What changed in this filing

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Item 1. Financial Statements

2022-05-10 compared with 2021-11-12 · 97 added, 140 removed, 275 unchanged (46% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

September 30,

Current assets:

17 unchanged sentences

5,000,000 undesignated authorized shares;

Class X Convertible Preferred Stock issued and outstanding shares – 0 as of September 30, 2021 (unaudited) and December 31, 2020, respectively

Class X Convertible Preferred Stock issued and outstanding shares – 0 as of March 31, 2022 (unaudited) and December 31, 2021, respectively

Common stock, $ 0.001 par value per share;

42,500,000 and 21,425,000 authorized shares as of September 30, 2021 and December 31, 2020, respectively;

issued and outstanding shares – 27,790,677 (unaudited) and 11,018,954 as of September 30, 2021 and December 31, 2020, respectively

42,500,000 authorized shares as of March 31, 2022 and December 31, 2021, respectively;

issued and outstanding shares – 28,056,249 (unaudited) and 27,793,035 as of March 31, 2022 and December 31, 2021, respectively

Additional paid-in capital

1 unchanged sentence

Accumulated deficit

Total aTyr Pharma stockholders’ equity

Total aTyr Pharma, Inc.

stockholders’ equity

Noncontrolling interest in Pangu BioPharma Limited

5 unchanged sentences

(in thousands, except share and per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

License and collaboration agreement revenues

Total revenues

Three Months Ended March 31,

Operating expenses:

13 unchanged sentences

(in thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Consolidated net loss

Other comprehensive loss:

Change in unrealized gain (loss) on available-for-sale investments, net of tax

Change in unrealized loss on available-for-sale investments, net of tax

Comprehensive loss

Comprehensive loss attributable to noncontrolling interest Pangu BioPharma Limited

Comprehensive loss attributable to noncontrolling interest in Pangu BioPharma Limited

Comprehensive loss attributable to aTyr Pharma, Inc.

4 unchanged sentences

(in thousands, except share data)

Nine Months Ended September 30, 2021 (unaudited)

Preferred Stock

Three months ended March 31, 2022 (unaudited)

Comprehensive

3 unchanged sentences

Issuance of common stock upon release of restricted stock units

Issuance of common stock from at-the-market offerings, net of offering costs

Issuance of common stock from committed purchase agreement, net of offering costs

Stock-based compensation

Net unrealized loss on investments, net of tax

Balance as of March 31, 2021

Issuance of common stock upon exercise of stock options

Issuance of common stock pursuant to employee stock purchase plan

Issuance of common stock from at-the-market offerings, net of offering costs

1 unchanged sentence

Net unrealized loss on investments, net of tax

Balance as of June 30, 2021

Issuance of common stock upon exercise of stock options

Issuance of common stock from at-the-market offerings, net of offering costs

Issuance of common stock from underwritten follow-on offering, net of offering costs

Stock-based compensation

Net unrealized loss on investments, net of tax

Balance as of September 30, 2021

Nine Months Ended September 30, 2020 (unaudited)

Preferred Stock

Balance as of March 31, 2022

Three Months Ended March 31, 2021 (unaudited)

Comprehensive

2 unchanged sentences

Balance as of December 31, 2020

Conversion of preferred stock to common stock

Issuance of common stock upon release of restricted stock units

Issuance of common stock from underwritten follow-on offering, net of offering costs

Issuance of common stock from at-the-market offerings, net of offering costs

Issuance of common stock from committed purchase agreement, net of offering costs

Stock-based compensation

Net unrealized loss on investments, net of tax

Net income (loss)

Balance as of March 31, 2021

Issuance of common stock upon release of restricted stock units

Issuance of common stock pursuant to employee stock purchase plan

Issuance of common stock from at-the-market offerings, net of offering costs

Stock-based compensation

Net unrealized gain on investments, net of tax

Balance as of June 30, 2020

Issuance of common stock from at-the-market offerings, net of offering costs

Stock-based compensation

Net unrealized gain on investments, net of tax

Balance as of September 30, 2020

See accompanying notes.

2 unchanged sentences

(in thousands)

Nine Months Ended September 30,

Cash flows from operating activities:

3 unchanged sentences

Stock-based compensation

Debt discount accretion and non-cash interest expense

Accretion of discount of available-for-sale investment securities

Amortization of premium of available-for-sale investment securities

Amortization of right-of-use assets

Loss on disposal of property and equipment

Gain on disposal of property and equipment

Changes in operating assets and liabilities:

2 unchanged sentences

Accounts payable and accrued expenses

Contract liability

Operating lease liability

8 unchanged sentences

Proceeds from issuance of common stock through option exercises

Proceeds from issuance of common stock through employee stock purchase plan

Proceeds from issuance of common stock from at-the-market offerings, net of offering costs

Proceeds from issuance of common stock from committed purchase agreement, net of offering costs

Proceeds from issuance of common stock from underwritten follow-on offering, net of offering costs

Repayments on borrowings

Net cash provided by financing activities

9 unchanged sentences

(we, us, and our) was incorporated in the State of Delaware on September 8, 2005.

We are focused on the discovery and development of innovative medicines based on novel biological pathways.

We are a biotherapeutics company engaged in the discovery and development of innovative medicines based on our proprietary tRNA synthetase biology platform.

Principles of Consolidation

2 unchanged sentences

Unaudited Interim Financial Information

The accompanying interim condensed consolidated financial statements are unaudited.

These unaudited interim financial statements have been prepared in accordance with United States generally accepted accounting principles (GAAP) and follow the requirements of the United States Securities and Exchange Commission (SEC) for interim reporting.

As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted.

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (U.S.

GAAP) and follow the requirements of the U.S.

Securities and Exchange Commission (SEC) for interim reporting.

As permitted under those rules, certain footnotes or other financial information that are normally required by U.S.

GAAP can be condensed or omitted.

In our opinion, the unaudited interim financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of our financial position and our results of operations and cash flows for periods presented.

2 unchanged sentences

Risks and Uncertainties

The impact of the COVID-19 pandemic has been and will likely continue to be extensive in many aspects of society, which has resulted in and will likely continue to result in significant disruptions to the global economy, as well as businesses and capital markets around the world.

The impact of the ongoing COVID-19 pandemic has been and will likely continue to be extensive in many aspects of society, which has resulted in and will likely continue to result in significant disruptions to the global economy, as well as businesses and capital markets around the world.

Impacts to our business have included delayed enrollment of our now completed Phase 1b/2a clinical trial in patients with pulmonary sarcoidosis and the discontinuation of some patients in that trial, temporary closures of portions of our facilities and those of our licensees and collaborators, disruptions or restrictions on our employee’s ability to travel and delays in certain research and development activities.

Other potential impacts to our business include, but are not limited to disruptions to or delays in planned clinical trials, third-party manufacturing supply and other operations, inflation, the potential diversion of healthcare resources away from the conduct of clinical trials to focus on pandemic concerns, interruptions or delays in the operations of the Food and Drug Administration or other regulatory authorities, and our ability to raise capital and conduct business development activities.

Food and Drug Administration or other regulatory authorities, and our ability to raise capital and conduct business development activities.

Liquidity and Financial Condition

We have incurred net losses in each year since our inception in 2005, including a condensed consolidated net loss of $ 25.2 million for the nine months ended September 30, 2021.

As of September 30, 2021, we had an accumulated deficit of $ 363.7 million.

We believe that our existing cash, cash equivalents and available-for-sale investments of $ 116.4 million as of September 30, 2021 will be sufficient to meet our anticipated cash requirements for a period of at least one year from the filing date of this Quarterly Report on Form 10-Q.

We have incurred net losses in each year since our inception in 2005, including a consolidated net loss of $ 12.2 million for the three months ended March 31, 2022.

As of March 31, 2022, we had an accumulated deficit of $ 384.4 million.

We believe that our existing cash, cash equivalents and available-for-sale investments of $ 98.7 million as of March 31, 2022 will be sufficient to meet our material cash requirements from known contractual and other obligations for a period of at least one year from the filing date of this Quarterly Report on Form 10-Q.

We do not expect to generate any revenues from product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take a number of years at a minimum.

10 unchanged sentences

Although these estimates are based on our knowledge of current events and actions we may undertake in the future, actual results may ultimately differ materially from these estimates and assumptions.

We follow Accounting Standards Codification (ASC) Topic 842, Leases in recording our operating and financing leases.

For our long-term operating leases, we recognized a right-of-use asset and a lease liability in our condensed consolidated balance sheets.

The lease liability is determined as the present value of future lease payments using an estimated rate of interest that we would pay to borrow equivalent funds on a collateralized basis at the lease commencement date.

The right-of-use asset is based on the liability adjusted for any prepaid or deferred rent.

We determine if an arrangement is a lease at inception.

Short-term leases with an initial term of 12 months or less are not recorded on our balance sheet.

For long-term operating leases with an initial term of greater than 12 months, we recognize an operating right-of-use asset (ROU) and a lease liability based on the present value of future lease payments using an estimated rate of interest that we would pay to borrow equivalent funds on a collateralized basis at the lease commencement date.

We determine the lease term at the commencement date by considering whether renewal options and termination options are reasonably assured of exercise.

We also made accounting policy elections not to apply the recognition requirements under Topic 842 to any of our short-term leases and to account for each separate lease and associated non-lease components as a single lease component for all of our leases.

Under Topic 842 we determine if an arrangement is a lease at inception.

Our right-of-use assets consist of an operating lease for our facility headquarters.

We have a noncancelable operating lease that includes certain tenant improvement allowances and is subject to base lease payments, which escalate over the term of the lease, additional charges for common area maintenance and other costs.

Rent expense for the operating lease is recognized on a straight-line basis over the lease term and is included in operating expenses in our condensed consolidated statements of operations.

If a lease is modified, the modified contract is evaluated to determine whether it is or contains a lease.

If a lease continues to exist, the lease modification is determined to be a separate contract when the modification grants the lessee an additional ROU that is not included in the original lease and the lease payments increase commensurate with the standalone price for the additional ROU.

A lease modification that results in a separate contract will be accounted for in the same manner as a new lease.

For a modification that is not a separate contract, we reassess the lease classification using the modified terms and conditions and the facts and circumstances as of the effective date of the modification and recognize the amount of the remeasurement of the lease liability for the modified lease as an adjustment to the corresponding operating lease ROU asset.

Our ROU asset consists of an operating lease for our facility headquarters.

We currently do not have any finance leases.

We do not separate lease and non-lease components of our long-term leases.

Rent expense for the operating lease is recognized on a straight-line basis over the lease term and is included in our condensed consolidated statement of operations.

Variable lease payments, including lease operating expenses, are recorded as incurred.

Revenue Recognition

We evaluate our agreements under ASC Topic 606, Revenue from Contracts with Customers and ASC Topic 808, Collaborative Arrangements .

We evaluate our agreements under Accounting Standard Codification ( ASC) Topic 606, Revenue from Contracts with Customers and ASC Topic 808, Collaborative Arrangements .

We recognize revenue when we transfer promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services .

15 unchanged sentences

Diluted net loss per share is calculated by dividing the net loss by the weighted average number of common stock equivalents outstanding for the period determined using the treasury-stock method.

Dilutive common stock equivalents are comprised of warrants for common stock, options and restricted stock units outstanding under our stock option plan and estimated shares to be purchased under our employee stock purchase plan.

Dilutive common stock equivalents are comprised

of warrants for common stock, options and restricted stock units outstanding under our stock option plan and estimated shares to be purchased under our employee stock purchase plan.

For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding , as the assumed exercise or settlement of stock options, restricted stock units, and warrants, or the conversion of preferred stock are anti-dilutive .

Potentially dilutive securities not considered for the calculation of diluted net loss per share are as follows (in common stock equivalents):

Nine Months Ended September 30,

Three Months Ended March 31,

Common stock warrants

7 unchanged sentences

We expect the adoption of the amendments in Topic 326 to not have a material effect in our condensed consolidated financial position or results of operations when such amendment is adopted.

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes to identify, evaluate, and improve areas of GAAP for which costs and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements.

The amendments for Topic 740 simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740.

The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance.

Topic 740 is effective for fiscal years beginning after December 15, 2020 which we adopted on January 1, 2021.

The adoption did not have an effect on our condensed consolidated financial position or results of operations.

Fair Value Measurements

19 unchanged sentences

for Identical

As of September 30, 2021

As of March 31, 2022

Cash equivalents

12 unchanged sentences

Available-for-sale investments:

Asset-backed securities

Commercial paper

Corporate debt securities

Municipal bonds

Total available-for-sale investments

Total assets measured at fair value

As of September 30, 2021 and December 31, 2020, available-for-sale investments are detailed as follows (in thousands):

September 30, 2021

As of March 31, 2022 and December 31, 2021, available-for-sale investments are detailed as follows (in thousands):

March 31, 2022

Contractual Maturity

4 unchanged sentences

Municipal bonds

Within 2 years

December 31, 2021

1 unchanged sentence

Available-for-sale investments:

Asset-backed securities

Within 1 year

Commercial paper

1 unchanged sentence

Corporate debt securities

Within 1 year

Municipal bonds

At each reporting date, we perform an evaluation of impairment to determine if any unrealized losses are other-than-temporary.

1 unchanged sentence

We intend, and have the ability, to hold our investments in unrealized loss positions, if any, until their amortized cost basis has been recovered.

As of September 30, 2021, all of our available-for-sale investments had a variety of effective maturity dates of less than two years .

As of September 30, 2021, 19 out of 30 available-for-sale investments were in gross unrealized loss positions.

As of March 31, 2022, all available-for-sale investments had a variety of effective maturity dates of less than two years .

As of March 31, 2022, all available-for-sale investments were in gross unrealized loss positions and have been in such loss positions less than twelve months .

License and Other Agreements

Kyorin Pharmaceutical Co., Ltd.

In January 2020, we entered into a collaboration and license agreement with Kyorin Pharmaceutical Co., Ltd.

(Kyorin) for the development and commercialization of ATYR1923 for interstitial lung diseases (ILD) in Japan.

Under the agreement (the Kyorin Agreement), Kyorin received an exclusive right to develop and commercialize ATYR1923 in Japan for all forms of ILD.

Under the terms of the Kyorin Agreement, Kyorin is obligated to fund all research, development, regulatory, marketing and commercialization activities in Japan.

In September 2020, Kyorin began dosing patients in a Phase 1 clinical trial of ATYR1923 (known as KRP-R120 in Japan) and completed the last subject visit in December 2020.

The Phase 1 clinical trial, which was conducted and funded by Kyorin, was a placebo-controlled study to evaluate the safety, pharmacokinetics and immunogenicity of ATYR1923.

ATYR1923 was observed to be generally safe and well-tolerated with no drug-related serious adverse events and pharmacokinetics findings were consistent with previous studies of ATYR1923.

In January 2020, we entered into a collaboration and license agreement (Kyorin Agreement) with Kyorin Pharmaceutical Co., Ltd.

(Kyorin) for the development and commercialization of efzofitimod for interstitial lung disease (ILD) in Japan.

Under the Kyorin Agreement, Kyorin received an exclusive right to develop and commercialize efzofitimod in Japan for all forms of ILD.

Kyorin is obligated to fund all research, development, regulatory, marketing and commercialization activities in Japan.

In 2020, Kyorin completed a Phase 1 clinical trial of efzofitimod (known as KRP-R120 in Japan).

The Phase 1 clinical trial, which was conducted and funded by Kyorin, was a placebo-controlled study to evaluate the safety, pharmacokinetics and immunogenicity of efzofitimod in 32 healthy Japanese male volunteers.

Efzofitimod was observed to be generally well-tolerated with no drug-related serious adverse events and pharmacokinetics findings were consistent with previous studies of efzofitimod.

We received an $ 8.0 million upfront payment in January 2020 and a $ 2.0 milestone payment in January 2021 upon completion of enrollment in the Phase 1 clinical trial, and we are eligible to receive up to an additional $ 165.0 million in the aggregate upon achievement of certain development, regulatory and sales milestones, as well as tiered royalties ranging from the mid-single digits to mid-teens on net sales in Japan.

Following the first anniversary of the effective date of the Kyorin Agreement, Kyorin had the right to terminate the agreement for any reason upon 90 days advance written notice.

In addition, either party may terminate the Kyorin Agreement in the event that the other party breaches the agreement and fails to cure the breach, becomes insolvent or challenges certain of the intellectual property rights licensed under the agreement .

Either party may terminate the Kyorin Agreement in the event that the other party breaches the agreement and fails to cure the breach, becomes insolvent or challenges certain of the intellectual property rights licensed under the agreement .

We assessed our license and collaboration with Kyorin in accordance with Topic 606 and concluded that Kyorin is a customer.

We identified the following performance obligations under the Kyorin Agreement:

1) the license of ATYR1923 for ILD in Japan;

1) the license of efzofitimod for ILD in Japan;

and 2) free clinical trial material for Kyorin’s Phase 1 clinical trial.

2 unchanged sentences

We determined that the relative standalone selling price was $ 0.1 million for the free clinical trial material delivered to Kyorin in June 2020, using the “expected cost plus a margin” approach.

In December 2020, Kyorin completed the last subject visit in its Phase 1 clinical trial of ATYR1923.

In December 2020, Kyorin completed the last subject visit in its Phase 1 clinical trial of efzofitimod.

This achievement triggered a $2.0 million milestone payment which we recognized as license and collaboration revenue in December 2020.

We received the $2.0 million from Kyorin in January 2021.

For the nine months ended September 30, 2021, there were no activities that triggered additional license and collaboration agreement revenue.

For the nine months ended September 30, 2020, we recognized $ 8.0 million as license and collaboration agreement revenue for the upfront payment received.

Both the remaining milestones and royalty payments under the Kyorin Agreement are variable consideration.

For each of the three months ended March 31, 2022 and 2021, there were no activities that triggered additional license and collaboration agreement revenue under the Kyorin Agreement.

The remaining milestones and royalty payments under the Kyorin Agreement are variable consideration.

Since milestone payments are binary in nature, we will use the “most-likely” method to evaluate whether the milestones should be included as revenue.

We will apply constraint to these amounts until the milestone is probable of being achieved.

We will constrain these amounts until the milestone is probable of being achieved.

The royalties are dependent on future sales by Kyorin which are at the full discretion of Kyorin.

Accordingly, we will apply a constraint to these amounts until the future sales have occurred.

Accordingly, we constrain these amounts until the future sales have occurred.

Hong Kong University of Science and Technology

In March 2020, our subsidiary, Pangu BioPharma, together with the Hong Kong University of Science and Technology (HKUST) was awarded a grant of approximately $ 750,000 to build a high-throughput platform for the development of bi-specific antibodies.

The two-year project is being funded by the Hong Kong Government’s Innovation and Technology Commission (ITC) under the Partnership Research Program (PRP).

The project is being funded by the Hong Kong Government’s Innovation and Technology Commission (ITC) under the Partnership Research Program (PRP).

The PRP aims to support research and development projects undertaken by companies in collaboration with local universities and public research institutions.

The grant funded approximately 50% of the total estimated project cost and we contributed the remaining 50%.

The ITC funded approximately 50% of the total estimated project cost and we contributed the remaining 50%.

The research grant agreement between Pangu BioPharma, HKUST and the Government of the Hong Kong Special Administration Region became effective April 1, 2020 .

The term of the project was initially for two years and in December 2021, due to the ongoing COVID-19 pandemic, was extended for an additional six months with no additional costs.

All the contributions provided by the ITC are paid to HKUST and we record expenses under this grant award when incurred.

Expenses for each of the three months ended September 30, 2021 and 2020 were $ 0.1 million .

Expenses for the nine months ended September 30, 2021 and 2020 were approximately $ 0.3 million and $ 0.1 million , respectively .

Expenses for the three months ended March 31, 2022 and 2021 were $ 41,000 and $ 0.2 million, respectively.

Commitments and Contingencies

Facility Leases

Future minimum payments under the non-cancelable facility lease and reconciliation to the operating lease liability as of September 30, 2021 were as follows (in thousands):

Future minimum payments under the non-cancelable facility lease and reconciliation to the operating lease liability as of March 31, 2022 were as follows (in thousands):

Operating Lease

3 unchanged sentences

Long-term operating lease liability, net of current portion

For each of the three months ended September 30, 2021 and 2020, we recorded an operating lease cost of $ 0.2 million.

For each of the nine months ended September 30, 2021 and 2020, we recorded an operating lease cost of $ 0.7 million.

As of September 30, 2021, the weighted-average remaining lease term was 1 .7 years and the weighted-average discount rate was 9.6 %.

For each of the three months ended March 31, 2022 and 2021, we recorded an operating lease cost of $ 0.2 million.

Stockholders’ Equity

2 unchanged sentences

The total net proceeds from the offering were approximately $ 80.6 million after deducting underwriting discounts, commissions and offering expenses payable by us.

In February 2020, we completed an underwritten follow-on public offering of 4,235,294 shares of our common stock at a price to the public of $ 4.25 per share.

In March 2020, the underwriters fully exercised their option to purchase additional shares resulting in the issuance of an additional 635,294 shares of common stock.

The total net proceeds from the offering were approximately $ 18.8 million, after deducting underwriting discounts, commissions and offering expenses payable by us.

At the Market Offering Programs

In March 2021, we entered into a Capital on Demand TM Sales Agreement with JonesTrading Institutional Services LLC (JonesTrading) for an at-the-market offering (ATM Offering Program), pursuant to which we can sell from time to time, at our option, up to an aggregate of $ 25.0 million of shares of our common stock through JonesTrading, as sales agent or principal.

JonesTrading is entitled to a commission at a fixed rate equal of up to 3 % of the gross proceeds.

For the nine months ended September 30, 2021, we sold an aggregate of 986,267 shares of common stock at an average price of $ 4.75 per share for net proceeds of $ 4.4 million under the JonesTrading ATM Offering Program.

In May 2019, we entered into a sales agreement with H.C.

Wainwright & Co., LLC (Wainwright) with respect to an ATM Offering Program under which we could offer and sell shares of our common stock having an aggregate offering price of up to $ 10.0 million.

Wainwright was entitled to a commission at a fixed rate equal to 3 % of the gross proceeds.

In November 2020, we amended our sales agreement with Wainwright to increase the amount of the ATM Offering Program to $ 20.0 million.

Wainwright was entitled to a commission at a fixed commission rate equal to 3 % of the gross proceeds.

In March 2021, the ATM Offering Program with Wainwright automatically terminated upon the issuance and sale of all of the shares of common stock having an aggregate offering price of $ 20.0 million.

Under the ATM Offering Program with Wainwright, during 2020, we sold an aggregate of 1,657,075 shares of common stock at an average price of $ 4.07 per share for net proceeds of $ 6.4 million.

Prior to the termination of the sales agreement with Wainwright, in 2021, we sold an aggregate of 1,988,254 shares of common stock at an average price of $ 4.99 per share for net proceeds of $ 9.6 million under the Wainwright ATM Offering Program.

In March 2021, we entered into a Capital on Demand TM Sales Agreement with JonesTrading Institutional Services LLC (JonesTrading) for an at-the-market offering program (Prior ATM Offering Program), pursuant to which we were entitled to sell from time to time, at our option, up to an aggregate of $ 25.0 million of shares of our common stock through JonesTrading, as sales agent or principal.

JonesTrading was entitled to a commission at a fixed rate equal of up to 3.0 % of the gross proceeds.

During 2021, we sold an aggregate of 986,267 shares of common stock at an average price of $ 4.75 per share for net proceeds of $ 4.4 million under the Prior ATM Offering Program.

For the three months ended March 31, 2022, we sold an aggregate of 260,455 shares of common stock at an average price of $ 6.07 per share for net proceeds of approximately $ 1.5 million under the Prior ATM Offering Program.

On April 22, 2022, we terminated the Prior ATM Offering Program.

Purchase Agreement

In September 2020 , we entered into a common stock purchase agreement (Purchase Agreement) with Aspire Capital Fund, LLC (Aspire Capital), which provides that,

upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $ 20.0 million of shares of our common stock at our request from time to time during the 30 month term of the Purchase Agreement.

In September 2020 , we entered into a common stock purchase agreement (Purchase Agreement) with Aspire Capital Fund, LLC (Aspire Capital), which provides that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $ 20.0 million of shares of our common stock at our request from time to time during the 30 month term of the Purchase Agreement.

Concurrently with entering into the Purchase Agreement, we also entered into a registration rights agreement with Aspire Capital, in which we agreed to file one or more registration statements, as permissible and necessary to register under the Securities Act of 1933, as amended, for the resale of the shares of our common stock that have been and may be issued to Aspire Capital under the Purchase Agreement.

For the nine months ended September 30, 2021, we sold an aggregate of 3,000,000 shares of common stock at an average price of $ 5.09 per share for net proceeds of $ 15.2 million under this Purchase Agreement.

For the three months ended March 31, 2021, we sold an aggregate of 3,000,000 shares of common stock at an average price of $ 5.09 per share for net proceeds of $ 15.2 million under this Purchase Agreement.

Inducement Grants

In March 2022, we adopted and our Board of Directors approved our 2022 Inducement Plan (Inducement Plan).

Awards granted under our Inducement Plan are in accordance with the Nasdaq Listing Rules5635(c)(4).

A total of 300,000 shares of our common stock were initially reserved for the issuance under our Inducement Plan.

The maximum term of options granted under the Inducement Plan is ten years .

Each option vests over a period of four years , with 25 % of the shares vesting on the one-year anniversary of the applicable vesting commencement date and the remaining 75 % vesting in equal monthly installments over three years , subject to continuous employment.

In March 2022, we granted nonstatutory stock options under our Inducement Plan to purchase an aggregate of 58,400 shares of our common stock, each with an exercise price of $ 5.24 per share as inducement awards to ten employees.

Common Stock Reserved for Future Issuance

Common stock reserved for future issuance was as follows:

September 30, 2021

March 31, 2022

Common stock warrants

1 unchanged sentence

Shares available under the 2015 equity incentive plan

Shares available under the 2022 inducement plan

Shares available under the employee stock purchase plan

The following table summarizes our stock option activity under all equity incentive plans for the nine months ended September 30, 2021:

The following table summarizes our stock option activity under all equity incentive plans for the three months ended March 31, 2022:

Stock Options

2 unchanged sentences

Canceled/forfeited/expired

Outstanding as of September 30, 2021

Outstanding as of March 31, 2022

The assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee stock option grants were as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Expected term (in years)

2 unchanged sentences

104.0% – 104.8

86.3% – 104.8

102.2% – 109.7

Expected dividend yield

The following table summarizes our restricted stock unit activity under all equity incentive plans for the nine months ended September 30, 2021:

The following table summarizes our restricted stock unit activity under all equity incentive plans for the three months ended March 31, 2022:

Number of Outstanding

2 unchanged sentences

Balance as of December 31, 2021

Balance as of September 30, 2021

Balance as of March 31, 2022

Stock-based Compensation

The allocation of stock-based compensation for all options, including performance options with a market condition, employee stock purchase plan and restricted stock units is as follows (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

The allocation of stock-based compensation for all options and restricted stock units and stock issued pursuant to our employee stock purchase plan is as follows (in thousands):

Research and development

1 unchanged sentence

Total stock-based compensation expense

Subsequent Events

In April 2022, we entered into an Open Market Sale Agreement SM with Jefferies LLC (Jefferies) implementing an “at-the-market” offering program (ATM Offering Program), pursuant to which we may offer and sell, from time to time and at our option, up

to an aggregate of $ 65.0 million of shares of our common stock through Jefferies, acting as sales agent.

Jefferies is entitled to a fixed commission rate of up to 3.0 % of the gross sales proceeds of shares sold under the ATM Offering Program.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements