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Item 1. Financial Statements

2024-08-08 compared with 2024-05-02 · 169 added, 103 removed, 429 unchanged (39% of the section changed)

3 unchanged sentences

(In Thousands, Except Per Share Amounts)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Current assets:

38 unchanged sentences

200,000 shares authorized;

70,554 shares and 69,905 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

70,914 shares and 69,905 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 593,253 584,138

7 unchanged sentences

(In Thousands, Except Per Share Amounts)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Product revenue $ 6,259 $ 11,048 $ 15,810 $ 19,412

6 unchanged sentences

Restructuring charges — 72 — 145

Asset impairment and other charges 165 — 165 —

Total costs and operating expenses 30,711 33,949 59,672 70,596

1 unchanged sentence

Interest income 972 1,121 1,881 2,209

Other expense, net ( 516 ) ( 25 )

Interest and other expense, net

( 985 ) ( 9 ) ( 1,500 ) ( 33 )

Loss before income taxes ( 22,745 ) ( 11,514 ) ( 34,239 ) ( 34,115 )

7 unchanged sentences

(In Thousands)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Net loss $ ( 22,755 ) $ ( 11,523 ) $ ( 34,260 ) $ ( 34,140 )

1 unchanged sentence

Unrealized loss on available-for-sale short-term investments, net of tax

( 7 ) — ( 23 ) —

Comprehensive loss $ ( 22,762 ) $ ( 11,523 ) $ ( 34,283 ) $ ( 34,140 )

5 unchanged sentences

Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders' Equity

Three Months Ended March 31, 2024 Shares Amount

Balance as of January 1, 2024

Three Months Ended June 30, 2024 Shares Amount

Balance as of April 1, 2024

70,554 $ 7 $ 588,311 $ ( 16 ) $ ( 509,035 ) $ 79,267

Exercise of stock options 73 — 143 — — 143

Release of stock awards 576 — — — — —

Issuance of common stock upon release of stock awards 236 — — — — —

Issuance of common stock under employee stock purchase plan 124 — 260 — — 260

Stock-based compensation — — 4,682 — — 4,682

— — 3,171 — — 3,171

Issuance of common stock warrants — — 859 — — 859

Net Loss — — — — ( 22,755 ) ( 22,755 )

Other comprehensive loss — — — ( 7 ) — ( 7 )

Balance as of March 31, 2024

Balance as of June 30, 2024

70,914 $ 7 $ 593,253 $ ( 23 ) $ ( 531,790 ) $ 61,447

1 unchanged sentence

Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders' Equity

Three Months Ended March 31, 2023 Shares Amount

Three Months Ended June 30, 2023 Shares Amount

Balance as of April 1, 2023

66,696 $ 6 $ 569,917 $ — $ ( 443,907 ) $ 126,016

Issuance of common stock upon exercise of stock options 71 — 141 — — 141

Issuance of common stock upon release of stock awards 285 — — — — —

Issuance of common stock in connection with an equity sales agreement, net of issuance costs of $ 331

2,752 — 6,781 — — 6,781

Stock-based compensation — — 2,716 — — 2,716

Net Loss — — — ( 11,523 ) ( 11,523 )

Balance as of June 30, 2023

69,804 $ 6 $ 579,555 $ — $ ( 455,430 ) $ 124,131

See accompanying notes to the unaudited condensed consolidated financial statements.

Codexis, Inc.

Condensed Consolidated Statements of Stockholders' Equity

(In Thousands)

Common Stock Additional

Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders' Equity

Six Months Ended June 30, 2024 Shares Amount

Balance as of January 1, 2024

69,905 $ 7 $ 584,138 $ — $ ( 497,530 ) $ 86,615

Exercise of stock options 143 — 281 — — 281

Release of stock awards 479 — — — — —

Issuance of common stock upon exercise of stock options 73 — 143 — — 143

Issuance of common stock upon release of stock awards 812 — — — — —

Issuance of common stock warrants in connection with debt issuance — — 859 — — 859

Issuance of common stock under employee stock purchase plan 124 — 260 — — 260

Stock-based compensation — — 7,853 — — 7,853

Net Loss — — — ( 34,260 ) ( 34,260 )

Other comprehensive loss — — — ( 23 ) — ( 23 )

Balance as of June 30, 2024

70,914 $ 7 $ 593,253 $ ( 23 ) $ ( 531,790 ) $ 61,447

Issuance of common stock, net of issuance costs of $ 390

Common Stock Additional

Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders' Equity

Six Months Ended June 30, 2023 Shares Amount

Balance as of January 1, 2023

65,811 $ 6 $ 566,081 $ — $ ( 421,290 ) $ 144,797

Issuance of common stock upon exercise of stock options 214 — 422 — — 422

Issuance of common stock upon release of stock awards 764 — — — — —

Issuance of common stock in connection with an equity sales agreement, net of issuance costs of $ 721

3,080 — 7,931 — — 7,931

Stock-based compensation — — 5,525 — — 5,525

Taxes paid related to net share settlement of equity awards ( 65 ) — ( 404 ) — — ( 404 )

Net Loss — — — ( 34,140 ) ( 34,140 )

Balance as of March 31, 2023

Balance as of June 30, 2023

69,804 $ 6 $ 579,555 $ — $ ( 455,430 ) $ 124,131

3 unchanged sentences

(In Thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating activities:

1 unchanged sentence

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation 1,252 1,466

Depreciation and amortization

Reduction in the carrying amount of right-of-use assets 1,561 2,517

Stock-based compensation 7,853 5,525

Asset impairment and other charges

Equity securities earned from research and development activities — ( 118 )

15 unchanged sentences

Investment in short-term investments ( 57,140 ) —

Proceeds from maturity of short-term investments

Investment in non-marketable securities — ( 750 )

2 unchanged sentences

Proceeds from exercises of stock options 281 422

Proceeds from issuance of common stock in connection with public offering — 1,540

Costs incurred in connection with issuance of common stock at public offering ( 60 ) ( 65 )

Proceeds from issuance of stock under employee stock purchase plan

Proceeds from issuance of common stock in connection with equity sales agreement

Costs incurred in connection with equity sales agreements

( 403 ) ( 395 )

Proceeds from long-term debt 29,521 —

10 unchanged sentences

Capital expenditures incurred but not yet paid $ 768 $ 434

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the unaudited condensed consolidated balance sheets as of March 31, 2024 and 2023 to the total of the same such amounts shown above in the unaudited condensed consolidated statements of cash flows:

Transfer from property and equipment to assets held for sale

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the unaudited condensed consolidated balance sheets as of June 30, 2024 and 2023 to the total of the same such amounts shown above in the unaudited condensed consolidated statements of cash flows:

Cash and cash equivalents $ 18,595 $ 92,093

1 unchanged sentence

Total cash, cash equivalents and restricted cash $ 20,174 $ 94,147

This table excludes short-term investments of $ 54.6 million as of June 30, 2024.

Total cash, cash equivalents, and short-term investments as of June 30, 2024 were $ 73.2 million.

See accompanying notes to the unaudited condensed consolidated financial statements.

1 unchanged sentence

Description of Business

In these notes to the unaudited condensed consolidated financial statements, the “Company,” “we,” “us,” and “our” refers to Codexis, Inc.

In these notes to the unaudited condensed consolidated financial statements, the “Company,” “Codexis,” “we,” “us,” and “our” refers to Codexis, Inc.

and its subsidiaries on a consolidated basis.

14 unchanged sentences

The condensed consolidated balance sheet at December 31, 2023 has been derived from the audited consolidated financial statements at that date, but does not include all disclosures, including notes, required by GAAP for complete financial statements.

The significant accounting policies used in preparation of the unaudited condensed consolidated financial statements for the three months ended March 31, 2024 and 2023, are consistent with those discussed in Note 2 to the audited consolidated financial statements in the Company’s 2023 Annual Report on Form 10-K and are updated below as necessary.

The significant accounting policies used in preparation of the unaudited condensed consolidated financial statements for the three and six months ended June 30, 2024 and 2023, are consistent with those discussed in Note 2 to the audited consolidated financial statements in the Company’s 2023 Annual Report on Form 10-K and are updated below as necessary.

There have been no significant changes in our significant accounting policies or critical accounting estimates since December 31, 2023.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to present fairly our financial position as of March 31, 2024 and results of operations for the interim periods presented.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to present fairly our financial position as of June 30, 2024 and results of operations for the interim periods presented.

The interim results are not necessarily indicative of the results for any future interim period or for the entire year.

7 unchanged sentences

Short-term Investments

We classify all marketable debt securities that have effective maturities of three months or less from the date of purchase as cash equivalents and those with effective maturities of greater than three months as short-term investments securities in the condensed consolidated balance sheets.

We classify all marketable debt securities that have effective maturities of three months or less from the date of purchase as cash equivalents and those with effective maturities of greater than three months as short-term investment securities in the condensed consolidated balance sheets.

We determine the appropriate classification of our short-term investments at the time of purchase and reevaluate such designation at each balance sheet date.

1 unchanged sentence

After consideration of our risk versus reward objectives, as well as our liquidity requirements, we may sell these debt securities prior to their effective maturities.

We carry these short-term investments at fair value, and report the unrealized gains and losses, net of taxes, as a component of stockholders’ equity, except for the changes in allowance for expected credit losses, which are included in “Other expense, net” in the unaudited condensed consolidated statements of operations.

We determine any realized gains or losses on the sale of short-term investments on a specific identification method, and we record such gains and losses as a component of other income and expenses.

We carry these short-term investments at fair value, and report the unrealized gains and losses, net of taxes, as a component of stockholders’ equity, except for the changes in allowance for expected credit losses, which are included in “Interest and other expense, net” in the unaudited condensed consolidated statements of operations.

We determine any realized gains or losses on the sale of short-term investments on a specific identification method, and we record such gains and losses as a component of interest income.

Short-term investments are reviewed periodically for allowances for credit losses and impairment.

When evaluating the investments, the Company reviews factors such as the extent to which the fair value of the security is less than the amortized cost basis, adverse conditions specifically related to the security, the financial condition of the issuer, the Company’s intent to sell, and whether it would be more likely than not that the Company would be required to sell the investments before the recovery of the amortized cost basis.

Impairment of Long-Lived Assets

We evaluate the carrying values of long-lived assets, which include property and equipment and right-of-use assets, whenever events, changes in business circumstances or our planned use of long-lived assets indicate that their carrying amounts may not be fully recoverable or that their useful lives are no longer appropriate.

If these facts and circumstances exist, we assess for recovery by comparing the carrying values of long-lived assets with the future net undiscounted cash flows expected to be generated by the asset.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset.

Assets Held For Sale

The Company classifies assets as held for sale when the following conditions are met:

(i) management has committed to a plan to sell, (ii) the assets are available for immediate sale in their present condition, (iii) the Company has initiated an active program to identify a buyer, (iv) it is probable that a sale will occur within one year, (v) the assets are actively marketed for sale at a reasonable price in relation to their current fair value, and (vi) there is a low likelihood of significant changes to the plan or that the plan will be withdrawn.

If all of the criteria are met as of the balance sheet date, the assets are presented separately in the consolidated balance sheet as held for sale at the lower of the carrying amount or fair value less costs to sell.

The assets are then no longer depreciated or amortized while classified as held for sale.

Accounting Pronouncements

Recently adopted accounting pronouncements

Aside from those recently issued accounting pronouncements not yet adopted and described below, there were no recent accounting pronouncements or changes in accounting pronouncements during the three months ended March 31, 2024, that are of significance or potential significance to us.

There were no recent accounting pronouncements or changes in accounting pronouncements during the three and six months ended June 30, 2024, that are of significance or potential significance to us.

Recently issued accounting pronouncements not yet adopted

In March 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2024-02 Codification Improvements .

The amendments in this ASU amends the Codification to remove references to various concepts statements and impacts a variety of topics in the Codification.

2024-02, Codification Improvements - Amendments to Remove References to the Concepts Statements .

This ASU amends the FASB Accounting Standard Codification (the “ASC”) to remove references to various concepts statements and impacts a variety of topics in the ASC.

This ASU is effective for public companies with annual periods beginning after December 15, 2024, with early adoption permitted.

If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period.

We are currently evaluating the effects of the standard on our consolidated financial statements and related disclosures.

2 unchanged sentences

Improvements to Income Tax Disclosures .

The amendments in the ASU, which requires public companies, on an annual basis, to provide disclosures of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction.

The amendments in the ASU require public companies, on an annual basis, to provide disclosures of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction.

This ASU is effective for public companies with annual periods beginning after December 15, 2024, with early adoption permitted.

10 unchanged sentences

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative .

The amendments in the ASU are intended to amend certain disclosure and presentation requirements for a variety of topics within the Accounting Standards Codification ( “ ASC ”) .

The amendments in the ASU are intended to amend certain disclosure and presentation requirements for a variety of topics within the ASC.

These amendments align the requirements in the ASC to the removal of certain disclosure requirements set out in Regulation S-X and Regulation S-K, as announced by the SEC.

7 unchanged sentences

Disaggregated information is as follows (in thousands):

Three Months Ended March 31,

Primary geographical markets:

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Primary geographical markets:

Americas $ 1,046 $ 3,937 $ 8,289 $ 6,521

EMEA 1,967 8,349 4,539 11,438

APAC 4,966 9,037 12,224 16,346

Total revenues $ 7,979 $ 21,323 $ 25,052 $ 34,305

1 unchanged sentence

The following table presents balances of contract assets, unbilled receivables, contract costs, and contract liabilities (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Contract assets $ 3,213 $ 815

2 unchanged sentences

deferred revenue $ 10,000 $ 10,761

We ha d no a sset impairment charges related to financial assets in the three months ended March 31, 2024 and 2023.

We had no asset impairment charges related to financial assets in the three and six months ended June 30, 2024 and 2023.

The increase in contract assets was primarily due to increases in product revenue from contracts subject to over time revenue recognition.

1 unchanged sentence

The decrease in deferred revenue was primarily due to the timing of recognition of revenue.

As of March 31, 2024, we have $ 5.5 million of short-term unbilled receivables presented as unbilled receivables within current assets and $ 0.9 million of long-term unbilled receivables that is included within the other non-current assets line item in the condensed consolidated balance sheets.

As of June 30, 2024, we have $ 4.4 million of short-term unbilled receivables presented as unbilled receivables within current assets and $ 1.2 million of long-term unbilled receivables that is included within the other non-current assets line item in the condensed consolidated balance sheets.

As of December 31, 2023 , we had $ 9.1 million of short-term unbilled receivables presented as unbilled receivables within current assets and $ 0.8 million of long-term unbilled receivables that is included within the other non-current assets line item in the condensed consolidated balance sheets.

We recognized t he following revenues ( in thousands):

Three Months Ended March 31,

We recognized the following revenues (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Revenue recognized in the period for:

2024 2023 2024 2023

Amounts included in contract liabilities at the beginning of the period:

6 unchanged sentences

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting periods.

The estimated revenue does not include contracts with original durations of one year or less, amounts of variable consideration attributable to royalties, or contract renewals that are unexercised as of March 31, 2024.

Th e balances in the table below are partially based on judgments involved in estimating future orders from customers subject to the exercise of material rights pursuant to respective contracts as of March 31, 2024 (in thousands):

The balances in the table below a re partially based on judgments involved in estimating future orders from customers subject to the exercise of material rights pursuant to respective contracts as of June 30, 2024 (in thousands):

Remainder of 2024

8 unchanged sentences

The following shares were not considered in the computation of diluted net loss per share because their effect was anti-dilutive (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Shares issuable under the Equity Incentive Plan and ESPP 12,893 9,312 12,893 9,312

5 unchanged sentences

Our non-marketable equity securities are investments in privately held companies without readily determinable market value and primarily relate to our investments in Molecular Assemblies, Inc.

(“MAI”), seqWell Inc.

(“seqWell”), and Arzeda Corp.

(“MAI”) and seqWell, Inc.

These investments are accounted for under the measurement alternative and are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes for identical or similar securities of the same issuer.

1 unchanged sentence

The fair value of non-marketable equity securities are classified within Level 3 when we estimate fair value using unobservable inputs such as when we remeasure due to impairment and we use discount rates, market data of comparable companies, and rights and obligations of the securities the Company holds, among others.

We adjust the carrying value of non-marketable equity securities which have been remeasured during the period and recognize resulting gains or losses as a component of other expense, net in the unaudited condensed consolidated statements of operations.

There was no remeasurement event for our investments in MAI, seqWell, Arzeda, and other non-marketable equity securities that occurred during the three months ended March 31, 2024 and 2023.

We recognized no realized gains or losses during the three months ended March 31, 2024 and 2023.

We adjust the carrying value of non-marketable equity securities which have been remeasured during the period and recognize resulting gains or losses as a component of interest and other expense, net in the unaudited condensed consolidated statements of operations.

There was no remeasurement event for our investments in MAI, seqWell, and other non-marketable equity securities that occurred during the three and six months ended June 30, 2024 and 2023.

We recognized no realized gains or losses during the three and six months ended June 30, 2024 and 2023.

The following table presents the carrying value of our non-marketable equity securities (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

$ 6,693 $ 6,693

3 unchanged sentences

Fair Value Measurements

The following tables show the Company’s cash, cash equivalents, and short-term investments by significant investment category as of March 31, 2024 and December 31, 2023 (in thousands):

March 31, 2024

The following tables show the Company’s cash, cash equivalents, and short-term investments by significant investment category as of June 30, 2024 and December 31, 2023 (in thousands):

June 30, 2024

Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Short-term Investments

16 unchanged sentences

We limit the credit risk associated with our cash equivalents and short-term investments by placing them with banks and institutions we believe are highly credit-worthy and investing in highly-rated investments.

As of March 31, 2024, and December 31, 2023, the contractual maturity of all investments held was less than one year.

During the three months ended March 31, 2024 and 2023, we did no t recognize any significant credit losses no r other-than-temporary impairment losses on our short-term investments.

As of June 30, 2024, and December 31, 2023, the contractual maturity of all investments held was less than one year.

During the three and six months ended June 30, 2024 and 2023, we did no t recognize any significant credit losses no r other-than-temporary impairment losses on our short-term investments.

Balance Sheets Details

Inventories consisted of the following (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Raw materials $ 108 $ 108

3 unchanged sentences

Prepaid expenses and other current assets

As of March 31, 2024, prepaid expenses and other current assets consisted of prepaid expenses of $ 4.7 million and other current assets of $ 0.5 million.

As of June 30, 2024, prepaid expenses and other current assets consisted of prepaid expenses of $ 2.1 million, assets held for sale of $ 0.1 million, and other current assets of $ 0.9 million.

As of December 31, 2023, prepaid expenses and other current assets consisted of prepaid expenses of $ 4.6 million and other current assets of $ 0.6 million.

1 unchanged sentence

Property and equipment, net consisted of the following (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Laboratory equipment $ 36,547 $ 37,216

6 unchanged sentences

Property and equipment, net

$ 13,966 $ 15,487

Depreciation expense included in both research and development expenses and selling, general and administrative expenses in the unaudited condensed consolidated statements of operations was as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Research and development $ 1,020 $ 1,242 $ 2,052 $ 2,486

1 unchanged sentence

Total depreciation expense $ 1,239 $ 1,480 $ 2,491 $ 2,946

$ 1,252 $ 1,466

Other Accrued Liabilities

Other accrued liabilities consisted of the following (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Accrued professional and outside service fees $ 2,766 $ 2,330

5 unchanged sentences

In April 2023, the Board approved an employee stock purchase plan (the “ESPP”) which became effective upon approval at the Annual Meeting in June 2023.

The ESPP allows eligible employees of the Company to purchase shares of our common stock through payroll deductions over 24 -month offering periods.

The ESPP allows eligible employees of the Company to purchase shares of our common stock through payroll deductions.

Offering periods are generally over a 24 -month period and begin in May and November of each year.

The per share purchase price will be the lower of 85 % of the closing trading price per share of our common stock on the first trading date of an offering period in which a participant is enrolled or 85 % of the closing trading price per share on the purchase date.

1 unchanged sentence

The Company is authorized to grant up to 2,000,000 shares of common stock under the ESPP.

The first offering period of the ESPP commenced in December 2023 and as of March 31, 2024, the Company had not issued any shares of common stock under the ESPP.

We recognized $ 0.1 million of stock-based compensation expenses related to the ESPP in the three months ended March 31, 2024.

The first offering period of the ESPP commenced in December 2023.

For the three and six months ended June 30, 2024, 123,889 shares of common stock were purchased under the ESPP.

As of June 30, 2024, 1,876,111 shares of common stock were available for future issuance under the ESPP.

We recognized $ 72 thousand and $ 149 thousand of stock-based compensation expenses related to the ESPP for the three and six months ended June 30, 2024, respectively.

As of June 30, 2024, the total unrecognized stock-based compensation expense, net of expected forfeitures, related to the ESPP was $ 0.6 million and is expected to be recognized over the remaining offering period.

Stock Options

1 unchanged sentence

In January 2024, the Board approved the grants of stock options with a vesting term over three years from the date of grant, of which 33 % vest at the end of one year , and 67 % vest monthly over the remaining two years .

Restricted Stock Units (“RSUs”)

We also grant employees RSUs, which generally vest over either a period with 33 % of the shares subject to the RSUs vesting on each yearly anniversary of the vesting commencement date, in each case contingent upon such employee’s continued service on such vesting date.

We may grant RSUs with different vesting terms from time to time.

Stock-Based Compensation Expense

Stock-based compensation expense is included in the unaudited condensed consolidated statements of operations as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Cost of product revenue $ 101 $ 83 $ 216 $ 212

3 unchanged sentences

The following table presents total stock-based compensation expense by security type included in the unaudited condensed consolidated statements of operations (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Stock options $ 2,117 $ 1,096 $ 3,631 $ 2,018

RSUs and RSAs 1,317 1,126

PBOs 16 ( 76 )

RSUs and restricted stock awards (“RSAs”)

1,152 1,373 2,469 2,499

Performance-contingent restricted stock units (“PSUs”)

— 279 247 1,116

Performance based options (“PBOs”)

1,341 ( 32 ) 1,357 ( 108 )

ESPP 72 — 149 —

Total $ 4,682 $ 2,716 $ 7,853 $ 5,525

As of March 31, 2024, unr ecognized stock-based compensation expense, net of expected forfeitures, was $ 13.3 million related to unvested stock options and $ 6.5 million related to unvested RSUs and RSAs.

On June 29, 2024, we entered into an Advisory Services Agreement with a former executive of the Company.

Pursuant to the advisory agreement, the exercise period for the former executive’s vested stock options and performance-based options was also extended.

The modification resulted in a stock-based compensation expense of $ 2.0 million recognized in selling, general and administrative expenses for the three and six months ended June 30, 2024.

As of June 30, 2024, unrecognized stock-based compensation expense, net of expected forfeitures, was $ 12.0 million related to unvested stock options, and $ 6.0 million related to unvested RSUs and RSAs.

Stock-based compensation expense for these awards will be recognized through 2028.

1 unchanged sentence

Exercise of Options

For the three months ended March 31, 2024 and March 31, 2023, we issued 72,856 and 142,856 shares, respectively, upon option exercises at a weighted-average exercise price of $ 1.97 and $ 1.97 per share, respectively, with net cash proceeds of $ 0.1 million and $ 0.3 million, respectively.

For the six months ended June 30, 2024 and June 30, 2023, we issued 75,856 and 214,284 shares, respectively, upon option exercises at a weighted-average exercise price of $ 1.97 per share, with net cash proceeds of $ 0.1 million and $ 0.4 million, respectively.

Sales Agreements

11 unchanged sentences

With the exception of certain expenses, we will pay PSC up to 8 % of the gross sales price of the shares sold pursuant to the EDA for a combined amount of commission and reimbursement of PSC's expenses and fees.

During the three months ended March 31, 2024 and 2023, nil and 327,480 shares, respectively, of our common stock were issued and sold pursuant to the EDA.

During the three months ended March 31, 2023, we received gross proceeds of $ 1.5 million, or $ 1.2 million in net proceeds after PSC's commissions and direct offering expenses of $ 0.4 million.

As of March 31, 2024, $ 41.3 million worth of shares remained available for sale under the EDA.

The 2021 Registration Statement is set to expire in May 2024.

No shares of our common stock were issued and sold pursuant to the EDA during the three and six months ended June 30, 2024.

During the three and six months ended June 30, 2023, 2,751,941 and 3,079,421 shares of our common stock, respectively, were issued and sold pursuant to the EDA and we received gross proceeds of $ 7.1 million and $ 8.7 million, or $ 6.8 million and $ 7.9 million in net proceeds after PSC's commissions and direct offering expenses of $ 0.3 million and $ 0.7 million, respectively.

On April 24, 2024, we terminated the EDA.

1 unchanged sentence

Under the terms of the Cantor Sales Agreement, Cantor may sell the shares at market prices by any method that is deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act.

We intend to file a registration statement on Form S-3 registering the offer and sale of these shares under the Securities Act.

On May 2, 2024, we filed a registration statement on Form S-3 registering the offer and sale of these shares under the Securities Act which became effective on May 14, 2024.

We will pay a commission of up to 3.0 % of gross sales proceeds of any common stock sold under the Cantor Sales Agreement.

We have made no sales under the Cantor Sales Agreement and as of June 30, 2024, $ 75.0 million of shares remained available for sale under the Cantor Sales Agreement.

Commitments and Contingencies

1 unchanged sentence

The Company has entered into operating leases primarily for office and laboratory space.

Lease costs amounts included in the measurement of lease obligations and other information related to non-cancellable operating leases were as follows (in thousands):

Three Months Ended March 31,

Operating lease cost (1)

Lease cost amounts included in the measurement of lease obligations and other information related to non-cancellable operating leases were as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Operating lease costs (1)

$ 1,033 $ 1,830 $ 2,065 $ 3,660

(1) The Company had no variable lease costs.

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Weighted-average discount rate 6.6 %

Three Months Ended March 31,

Six Months Ended June 30,

Cash paid (in thousands):

Operating cash flows from operating leases $ 2,357 $ 3,775

As of March 31, 2024, our maturity analysis of annual undiscounted cash flows of the non-cancellable operating leases are as follows (in thousands):

As of June 30, 2024, our maturity analysis of annual undiscounted cash flows of the non-cancellable operating leases are as follows (in thousands):

Years Ending December 31, Operating Leases

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Lease obligations $ 14,170

Reconciliation of operating lease liabilities as shown within the unaudited condensed consolidated balance sheets:

Reconciliation of operating lease liabilities as shown within the unaudited condensed consolidated balance sheets (in thousands):

Current portion of lease obligations - Operating leases $ 3,979

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Payments Due by Period

Total 2024 (Remaining 9 Months) 2025 and

Total 2024 (Remaining 6 Months) 2025 and Thereafter

Facility maintenance agreement $ 281 $ 281 $ —

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Innovatus Loan Agreement

On February 13, 2024 (the “Closing Date”), we entered into a 5 -year term loan and security agreement (the “Loan Agreement”) with Innovatus Life Sciences Lending Fund I, LP (“Innovatus”), an affiliate of Innovatus Capital Partners, LLC, for an aggregate principal amount of up to $ 40.0 million and with a maturity date of February 13, 2029 (the “Innovatus Loan”).

On February 13, 2024 (the “Closing Date”), we entered into a five -year term loan and security agreement (the “Loan Agreement”) with Innovatus Life Sciences Lending Fund I, LP (“Innovatus”), an affiliate of Innovatus Capital Partners, LLC, for an aggregate principal amount of up to $ 40.0 million and with a maturity date of February 13, 2029 (the “Innovatus Loan”).

The Innovatus Loan consists of two tranches, of which the first tranche of $ 30.0 million was funded on February 13, 2024.

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The floating per annum interest rate of the Innovatus Loan is equal to the sum of (a) the greater of (i) prime rate published in the Money Rates section of the Wall Street Journal and (ii) 7.50 % , plus (b) 3.25 %;

provided that, at the election of the the Company, up to 2.0 % of such rate shall be payable in-kind until the third anniversary of the closing date.

provided that, at the election of the Company, up to 2.0 % of such rate shall be payable in-kind until the third anniversary of the closing date.

The Company is required to make monthly interest-only payments through February 1, 2027, after which the Company is required to make monthly amortizing payments, with the remaining balance of the principal plus accrued and unpaid interest due at maturity.

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The Innovatus Loan contains customary representations and warranties and covenants, subject to customary carve outs, and includes financial covenants related to liquidity and net product revenue, with the latter beginning with the period ending September 30, 2024.

The Company believes it is in compliance with the terms included within the Innovatus Loan as of March 31, 2024.

The Company believes it is in compliance with the terms included within the Innovatus Loan as of June 30, 2024 .

The Innovatus Loan is secured by perfected first priority liens on the Company's assets, including a commitment by the Company to not allow any liens to be placed upon the Company's intellectual property.

1 unchanged sentence

The discount and issuance costs will be amortized over the life of the Innovatus Loan.

Interest expense for the Innovatus Loan for the three months ended March 31, 2024 was $ 0.5 million , and is inclusive of non-cash amortization of the debt discount, debt issuance costs, payable in-kind interest, and accretion of final payment.

The carrying amount of the Innovatus Loan approximates fair value given its recent issuance.

The effective interest rate for the Innovatus Loan was 14.0 % as of March 31, 2024 .

Interest expense for the Innovatus Loan for the three and six months ended June 30, 2024 was $ 1.0 million and $ 1.5 million respectively, and is inclusive of non-cash amortization of the debt discount, debt issuance costs, payable in-kind interest, and accretion of final payment.

The carrying amount of the Innovatus Loan approximates fair value given its recent issuance and the interest rate is based on the prime rate.

The effective interest rate for the Innovatus Loan was 14.0 % as of June 30, 2024 .

Additionally, in connection with entering into the Innovatus Loan, we entered into a Warrant Agreement with Innovatus on February 13, 2024 and issued to Innovatus a warrant to purchase an aggregate of 424,028 shares of the Company’s common stock at an exercise price of $ 2.83 per share.

1 unchanged sentence

At the time of issuance, the Company determined the estimated fair value of the warrants of $ 0.9 million using the Black-Scholes model.

As the warrants represent a freestanding equity instrument, the Company recorded the fair value of the warrants in additional paid-in capital as of March 31, 2024.

As the warrants represent a freestanding equity instrument, the Company recorded the fair value of the warrants in additional paid-in capital during the first quarter of 2024 .

The Company accounts for the amortization of the debt discount and issuance costs utilizing the effective interest method.

Long-term debt consisted of the following at March 31, 2024 (in thousands):

March 31, 2024

Long-term debt consisted of the following at June 30, 2024 (in thousands):

June 30, 2024

Face value of debt $ 30,000

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Under this new organizational and reporting structure, we managed our business as one reportable segment as of December 31, 2023.

Comparative prior period disclosures that reflected the previous two segments' information have been revised to conform to this change in our reportable segment.

Com parative prior period disclosures that reflected the previous two segments' information have been revised to conform to this change in our reportable segment.

Significant Customers

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Percentage of Total Revenues for the

Three Months Ended March 31,

Customer A 35 % *

Customer B 15 % 23 %

Customer C 10 % *

Customer D * 14 %

Customer E * 13 %

Customer F * 10 %

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

18 % * 16 % 11 %

* 28 % * 17 %

* 18 % * 11 %

* Percentage was less than 10%

1 unchanged sentence

Percentage of Accounts Receivables as of

March 31, 2024 December 31, 2023

Customer B 23 % 12 %

Customer G 23 % 13 %

Customer H * 21 %

Customer I * 12 %

June 30, 2024 December 31, 2023

* Percentage was less than 10%

Identifiable long-lived assets by location was as follows (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

United States $ 25,878 $ 28,624

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