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Item 2. Management’s Discussion and Analysis

2022-08-09 compared with 2022-05-11 · 119 added, 57 removed, 212 unchanged (45% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial conditions and results of operations should be read together with our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q, or Quarterly Report, and our audited financial statements and notes thereto as of and for the years ended December 31, 2021 and 2020 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, including Contractual Obligations, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, or the 2021 Annual Report, filed with the United States Securities and Exchange Commission, or SEC, on March 30, 2022.

The following discussion and analysis of our financial conditions and results of operations should be read together with our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report and our audited financial statements and notes thereto as of and for the years ended December 31, 2021 and 2020 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, including Contractual Obligations, included in our Annual Report filed with the SEC on March 30, 2022.

In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements.

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Currently available therapies for these diseases are limited, with many diseases having no approved therapies or treatments.

Our goal is to develop disease modifying treatments for patients with these degenerative disorders by initially leveraging our expertise in the σ-2 (sigma-2) receptor, or S2R, which is expressed by multiple cell types, including neuronal synapses, and acts as a key regulator of cellular damage commonly associated with certain age-related degenerative diseases of the CNS and retina.

Our goal is to develop disease modifying treatments for patients with these degenerative disorders by initially leveraging our expertise in the S2R, which is expressed by multiple cell types, including neuronal synapses, and acts as a key regulator of cellular damage commonly associated with certain age-related degenerative diseases of the CNS and retina.

We believe that targeting the S2R complex represents a mechanism that is functionally distinct from other current approaches in clinical development for the treatment of degenerative diseases.

In August 2022, at the Alzheimer’s Association International Conference (AAIC), we presented a proteomic analysis of clinical biomarker data from all participants enrolled in our SPARC study for whom end-of-study (at six months) and baseline cerebrospinal fluid samples were available (n=18).

The SPARC study (COG0105) enrolled 23 individuals with mild-to-moderate Alzheimer’s disease, or AD, who were randomized to receive oral once-daily treatment with CT1812 or placebo for six months.

The analyses demonstrated the effect of CT1812 on multiple priority AD biomarkers, including YKL-40, a biomarker of inflammation, which is upregulated in AD.

Participants treated with CT1812 exhibited a downward shift in YKL-40 towards levels observed in healthy, non-demented individuals, supporting a potential positive impact of CT1812 on disease biology.

In addition, CT1812 had a significant impact on CSF levels of clusterin (CLU), which has been identified as a genetic risk factor for AD by several independent, large-scale genome-wide association studies (GWAS).

We believe the analytic results support the proposed synaptoprotective mechanism of action of CT1812 and role in normalizing cellular processes known to be adversely disrupted in AD.

Since our inception in 2007, we have incurred significant operating losses and devoted substantially all of our time and resources to developing our lead product candidate, CT1812, building our intellectual property portfolio, raising capital and recruiting management and technical staff to support these operations.

As of March 31, 2022, we had an accumulated deficit of $97.8 million.

We incurred a net loss of $3.8 million and net income of $0.2 million for the three months ended March 31, 2022 and 2021, respectively.

As of June 30, 2022, we had an accumulated deficit of $103.6 million.

We incurred a net loss of $5.8 million and $9.6 million for the three and six months ended June 30, 2022, respectively, and net loss of $1.5 million and $1.3 million for the three and six months ended June 30, 2021, respectively.

To date, we have funded our operations primarily with proceeds from grants awarded by the National Institute of Aging, or NIA, a division of the National Institutes of Health, or NIH, and proceeds from our IPO, the sales of our convertible promissory notes, convertible preferred stock, simple agreements for future equity, or SAFEs, and stock option exercises.

Since our inception, we have received approximately $168.9 million in cumulative grant awards to fund our clinical trials, primarily from the NIA, and we have raised approximately $102.0 million in net proceeds from sales of our equity securities, convertible notes, SAFEs, stock option exercises, and our IPO.

As of March 31, 2022, we had cash and cash equivalents of $51.5 million.

As of June 30, 2022, we had cash and cash equivalents of $45.8 million.

On October 13, 2021, we completed our IPO, pursuant to which we issued and sold 3,768,116 shares of our common stock at a public offering price of $12.00 per share.

Additionally, on November 12, 2021, the underwriters exercise of their over-allotment option in full to purchase 565,217 shares of our common stock closed.

In connection with the IPO, we received net proceeds of approximately $44.2 million, after deducting underwriting discounts and commissions and other offering related expenses payable by us, which includes net proceeds of approximately $6.3 million from the over-allotment exercise.

In connection

with the IPO, we received net proceeds of approximately $44.2 million, after deducting underwriting discounts and commissions and other offering related expenses payable by us, which includes net proceeds of approximately $6.3 million from the exercise of the over-allotment option.

We expect to continue to incur significant and increasing expenses and net losses for the foreseeable future, as we advance our current and future product candidates through preclinical and clinical development, manufacture drug product and drug supply, seek regulatory approval for our current and future product candidates, maintain and expand our intellectual property portfolio, hire additional research and development and business personnel and operate as a public company.

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Impact of COVID-19 on Our Business

Our business has been and could continue to be adversely affected by the effects of the COVID-19 pandemic, including, but not limited to, our clinical trials.

Our business has been and could continue to be adversely affected by the effects of the ongoing COVID-19 pandemic, including, but not limited to, our clinical trials.

For example, the COVID-19 pandemic may impact patient enrollment in our ongoing and future clinical trials of CT1812.

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For example, we have made certain adjustments to the operation of our trials in an effort to ensure the monitoring and safety of patients and minimize risks to trial integrity during the pandemic in accordance with the guidance issued by the FDA and may need to make further adjustments in the future.

We have also initiated our clinical trial protocols to enable remote visits to mitigate any potential impacts as a result of the COVID-19 pandemic.

also initiated our clinical trial protocols to enable remote visits to mitigate any potential impacts as a result of the COVID-19 pandemic.

Many of these adjustments are new and untested, may not be effective, may affect the integrity of data collected, and may have unforeseen effects on the progress and completion of our clinical trials and the findings from such clinical trials.

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Grant income relates to the grants awarded from governmental bodies that are conditional cost reimbursement grants and are recognized as grant income as allowable costs are incurred and the right to payment is realized.

The grants awarded relate to agreed upon direct and indirect costs for specific studies or clinical trials, which may include personnel

and consulting costs, costs paid to contract research organizations, research institutions and /or consortiums involved in the grant, as well as facilities and administrative costs.

The grants awarded relate to agreed upon direct and indirect costs for specific studies or clinical trials, which may include personnel and consulting costs, costs paid to contract research organizations, research institutions and /or consortiums involved in the grant, as well as facilities and administrative costs.

These grants are cost plus fixed fee arrangements in which we are reimbursed for eligible direct and indirect costs over time, up to the maximum amount of each specific grant award.

Only costs that are allowable under the grant award, certain government regulations and the NIH’s supplemental policy and procedure manual may be claimed for reimbursement, and the reimbursements are subject to routine audits from governmental agencies from time to time.

As of March 31, 2022, the Company has been awarded grants with project periods that extend through May 31, 2025, subject to extension.

As of June 30, 2022, the Company has been awarded grants with project periods that extend through May 31, 2025, subject to extension.

Our clinical trials have been funded by approximately $168.9 million in cumulative grants awarded primarily by the NIA, which includes an approximately $81.0 million grant from the NIA to fund our Phase 2 (COG0203) study of CT1812 in patients with early-stage AD, an approximately $30.5 million grant from the NIA to fund our Phase 2 (COG0201) study of CT1812 in patients with mild to moderate AD, and an approximately $29.5 million grant from the NIA to fund our Phase 2 (COG1201) study of CT1812 in patients with dementia with lewy bodies.

Change in fair value of derivative liability

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Other (expense) income, net consists primarily of research and development tax credits earned in the applicable period, as well as foreign currency transaction gains or losses.

Income Tax Expense

The Company’s effective tax rate for the three months ended March 31, 2022 was (3.4%), compared to the effective tax rate for the three months ended March 31, 2021 of 0.0%.

The March 31, 2022 income tax expense relates primarily to state income taxes related to an individual state.

Income tax benefit (expense)

Our income tax benefit (expense) relates primarily to state income taxes related to an individual state.

We maintain a full valuation allowance against all deferred tax assets as of June 30, 2022 and December 31, 2021, as management has determined that it is not more likely than not that we will realize these future tax benefits.

Results of Operations

Comparison of the Three Months Ended March 31, 2022 and 2021

Comparison of the Three Months Ended June 30, 2022 and 2021

The following table summarizes our results of operations (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Operating Expenses:

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Change in the fair value of the derivative liability

Other income, net

Change in the fair value of SAFEs

Other (expense) income, net

Interest expense, net

Total other income, net

Loss before income taxes

Income tax benefit

Research and Development Expenses

The following table summarizes our research and development expenses (in thousands):

Three Months Ended June 30,

Clinical programs

Manufacturing

Preclinical programs

Facilities and other costs

Research and development expenses were $9.1 million for the three months ended June 30, 2022, compared to $4.9 million for the three months ended June 30, 2021.

The increase of $4.2 million was primarily due to the following:

● an increase of $4.7 million in clinical programs related to increased phase II trial activity primarily due to increased contract research organization spend;

● an increase of $0.8 million in personnel costs associated with expanded research and development activities, and equity-based compensation expense;

● a decrease of $1.3 million in manufacturing expense related to costs incurred with contract manufacturing organizations for production of pre-clinical and future clinical trial materials associated with our most advanced product candidates due to the timing of the manufacturing of the pre-clinical and clinical trial materials.

General and Administrative Expenses

General and administrative expenses were $3.1 million for the three months ended June 30, 2022, compared to $1.1 million for the three months ended June 30, 2021.

The increase of $2.0 million was primarily due to:

● an increase of $0.4 million in Director & Officer liability insurance and other expenses;

● an increase of $0.3 million in compensation expense driven by increased headcount;

● an increase of $0.6 million in professional fees driven by increased audit, tax, and legal services;

● an increase of $0.7 million in equity-based compensation from stock option grants.

Other Income (Expense)

Grant income was $6.4 million for the three months ended June 30, 2022, compared to $4.6 million for the three months ended June 30, 2021.

The change in grant income is correlated with the increase in eligible reimbursable costs incurred during 2022 as compared to 2021.

Change in Fair Value of the Derivative Liability

Changes in the fair value derivative liability resulted in a gain of $1.1 million for the three months ended June 30, 2021.

There was no gain or loss for the three months ended June 30, 2022 as the derecognition of the derivative liability occurred in May 2021 upon the conversion of convertible notes into shares of our Series B-1 convertible preferred stock.

Change in Fair Value of the SAFEs

Changes in the fair value of the SAFEs resulted in a loss of $1.0 million for the three months ended June 30, 2021.

There was no change in the fair value for the three months ended June 30, 2022 as the derecognition of the SAFE liability occurred when the SAFEs converted into shares of our common stock upon the closing of our IPO.

Other Income (Expense), Net

Other expense, net was less than $0.1 million for the three months ended June 30, 2022, compared to other income, net of $0.1 million for the three months ended June 30, 2021.

Overall, the change in other expense was not significant in either period.

Interest Expense, Net

Interest expense, net was less than $0.1 million for the three months ended June 30, 2022, compared to Interest expense, net of $0.4 million for the three months ended June 30, 2021.

The change of $0.4 million in interest expense, net was the result of the convertible notes outstanding balance during the three months ended June 30, 2021, which were subsequently converted into shares of our Series B-1 convertible preferred stock in May 2021.

Income Tax Benefit

Income tax benefit for the three months ended June 30, 2022 was $0.1 million related to the reversal of a prior period estimate of state income tax for a particular state.

Comparison of the Six Months Ended June 30, 2022 and 2021

The following table summarizes our results of operations (in thousands):

Six Months Ended June 30,

(in thousands)

Consolidated Statements of Operations Data:

Operating Expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense):

Change in the fair value of the derivative liability

Change in the fair value of SAFEs

Other (expense) income, net

Gain on debt extinguishment

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Loss before income taxes

Income tax expense

Research and Development Expenses

The following table summarizes our research and development expenses (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Clinical programs

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Facilities and other costs

Research and development expenses were $6.5 million for the three months ended March 31, 2022, compared to $4.4 million for the three months ended March 31, 2021.

Research and development expenses were $15.6 million for the six months ended June 30, 2022, compared to $9.3 million for the six months ended June 30, 2021.

The increase of $6.3 million was primarily due to the following:

● an increase of $2.6 million in clinical programs related to increased phase II trial activity;

● an increase of $7.4 million in clinical programs related to increased phase II trial activity primarily due to increased contract research organization spend;

● an increase of $1.4 million in personnel costs associated with expanded research and development activities, and equity-based compensation expense;

● a decrease of $1.4 million in manufacturing expense related to costs incurred with contract manufacturing organizations for production of pre-clinical and future clinical trial materials associated with our most advanced product candidates;

● a decrease of $2.6 million in manufacturing expense related to costs incurred with contract manufacturing organizations for production of pre-clinical and future clinical trial materials associated with our most

advanced product candidates due to the timing of the manufacturing of the pre-clinical and clinical trial materials;

● an increase of $0.1 million in preclinical programs due to increased sponsored research spend under grants.

General and Administrative Expenses

General and administrative expenses were $2.9 million for the three months ended March 31, 2022, compared to $1.2 million for the three months ended March 31, 2021.

General and administrative expenses were $6.0 million for the six months ended June 30, 2022, compared to $2.2 million for the six months ended June 30, 2021.

The increase of $3.8 million was primarily due to:

● an increase of $0.9 million in Director & Officer liability insurance and other expenses;

● an increase of $0.4 million in compensation driven by increased headcount;

● an increase of $0.8 million in professional fees driven by increased audit, tax, and legal services;

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Other Income (Expense)

Grant income was $5.9 million for the three months ended March 31, 2022, compared to $4.7 million for the three months ended March 31, 2021.

Grant income was $12.3 million for the six months ended June 30, 2022, compared to $9.3 million for the six months ended June 30, 2021.

The change in grant income is correlated with the increase in eligible reimbursable costs incurred during 2022 as compared to 2021.

Change in Fair Value of the Derivative Liability

Changes in the fair value derivative liability resulted in a gain of $1.1 million for the three months ended March 31, 2021.

There was no gain or loss for the three months ended March 31, 2022 as the derecognition of the derivative liability occurred May, 2021 upon the conversion of convertible notes into Series B-1 Convertible Preferred Stock at that time.

Changes in the fair value derivative liability resulted in a gain of $2.2 million for the six months ended June 30, 2021.

There was no gain or loss for the six months ended June 30, 2022 as the derecognition of the derivative liability occurred in May 2021 upon the conversion of convertible notes into shares of Series B-1 convertible preferred stock.

Change in Fair Value of the SAFEs

Changes in the fair value of the SAFEs resulted in a loss of $1.0 million for the six months ended June 30, 2021.

There was no change in the fair value for the six months ended June 30, 2022 as the derecognition of the SAFE liability occurred when the SAFEs converted into shares of our common stock upon the closing of our IPO.

Other Income (Expense), Net

Other expense, net was $0.2 million for the three months ended March 31, 2022, compared to other income, net of $0.1 million for the three months ended March 31, 2021.

Overall, the change in other expense was not significant in either period.

Other expense, net was $0.2 million for the six months ended June 30, 2022, compared to other income, net of $0.2 million for the six months ended June 30, 2021.

Overall, management believes that the change in other expense was not significant in either period.

Gain on Debt Extinguishment

There was no gain or loss on debt extinguishment for the three months ended March 31, 2022.

Gain on debt extinguishment was $0.4 million for the three months ended March 31, 2021 as a result of the forgiveness of the Paycheck Protection Program loan on January 21, 2021.

There was no gain or loss on debt extinguishment for the six months ended June 30, 2022.

Gain on debt extinguishment was $0.4 million for the six months ended June 30, 2021 as a result of the forgiveness of the Paycheck Protection Program loan on January 21, 2021.

Interest Expense, Net

Interest expense, net was less than $0.1 million for the three months ended March 31, 2022, compared to Interest expense, net of $0.5 million for the three months ended March 31, 2021.

The change of $0.4 million in interest expense, net was the result of the convertible notes outstanding balance during the three months ended March 31, 2021, which were subsequently converted into Series B-1 Preferred Stock in May of 2021.

Income Tax Expense

Income tax expense for the three months ended March 31, 2022 was approximately $0.1 million related to state income tax for a particular state.

Interest expense, net was less than $0.1 million for the six months ended June 30, 2022, compared to interest expense, net of $0.9 million for the six months ended June 30, 2021.

The change of $0.9 million in interest expense, net was the result of the convertible notes outstanding balance during the six months ended June 30, 2021, which were subsequently converted into shares of our Series B-1 convertible preferred stock in May 2021.

Liquidity and Capital Resources

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Additionally, on November 12, 2021, the underwriters exercise of their over-allotment option to purchase 565,217 shares of our common stock closed.

The net proceeds were approximately $44.2 million, after deducting underwriting discounts and commissions and other offering related expenses payable by the Company, which includes net proceeds of approximately $6.3 million from the over-allotment exercise.

As of March 31, 2022, we had $51.5 million in cash and cash equivalents and have not generated positive cash flows from operations.

Based on our current business plans, we believe that the net proceeds from the IPO, together with our existing cash and cash equivalents and income from non-dilutive grants, will be sufficient for us to fund our operating expenses and capital expenditures requirements into the second half of 2023.

As of June 30, 2022, we had $45.8 million in cash and cash equivalents and have not generated positive cash flows from operations.

We have based these estimates on assumptions that may prove to be incorrect or require adjustment as a result of business decisions, and we could utilize our available capital resources sooner than we currently expect.

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Our future funding requirements will depend on many factors, including, but not limited to:

● the scope, progress, costs and results of our ongoing and planned clinical trials of CT1812, as well as the associated costs, including any unforeseen costs we may incur as a result of preclinical study or clinical trial delays due to the COVID-19 pandemic, the ongoing invasion of Ukraine by Russia or other delays;

● the scope, progress, costs and results of our ongoing and planned clinical trials of CT1812, as well as the associated costs, including any unforeseen costs we may incur as a result of preclinical study or clinical trial delays due to the COVID-19 pandemic or other diseases, global or political instability, such as the ongoing conflict between Ukraine and Russia, inflation, or other delays;

● the scope, progress, costs and results of preclinical development, laboratory testing and clinical trials for any future product candidates we may decide to pursue;

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Adequate funding may not be available when needed or on terms acceptable to us, or at all.

Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic, the ongoing invasion of Ukraine by Russia and otherwise.

Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic or other diseases, the ongoing conflict between Ukraine and Russia, inflation, and otherwise.

If we fail to obtain necessary capital when needed on acceptable terms, or at all, it could force us to delay, limit, reduce or terminate our product development programs, commercialization efforts or other operations.

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The following table summarizes our cash flows for the periods indicated (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows used in operating activities

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Operating Activities

Net cash used in operating activities for the three months ended March 31, 2022 was $3.0 million, which consisted primarily of our net loss of $3.8 million, offset by the impact of equity-based compensation of $1.0 million and a net change of $0.2 million in our operating assets and liabilities.

The net change in our operating assets and liabilities was primarily due to an increase in grant receivables of $1.0 million, an increase in other assets of $1.4 million, and an increase in other noncurrent liabilities of $1.9 million.

Net cash used in operating activities for the three months ended March 31, 2021 was $0.8 million, which consisted primarily of our net income of $0.2 million partially offset by the net non-cash gains of $1.1 million and a net change of $0.1 million in our operating assets and liabilities.

The non-cash gains primarily consisted of the change in derivative liabilities of $1.1 million and a gain on debt extinguishment of $0.4 million.

The net change in our operating assets and liabilities was primarily due to an increase in grant receivables of $1.1 million, and an increase in accounts payable of $1.0 million.

Net cash used in operating activities for the six months ended June 30, 2022 was $8.3 million, which consisted primarily of our net loss of $9.6 million, offset by the impact of equity-based compensation of $1.9 million and a net change of $0.8 million in our operating assets and liabilities.

The net change in our operating assets and liabilities was primarily due to an increase in grant receivables of $1.5 million, an increase in other assets of $1.3 million, offset by an increase in other noncurrent liabilities of $1.7 million, and an increase in deferred grant income of $0.5 million.

Net cash used in operating activities for the six months ended June 30, 2021 was $1.7 million, which consisted primarily of our net loss of $1.3 million as well as net non-cash gains of $1.0 million and a net change of $0.6 million in our operating assets and liabilities.

The net non-cash gains primarily consisted of amortization of debt discounts of $0.4 million, change in derivative liabilities of $2.2 million, change in fair value of the SAFEs of $1.0 million, a gain on debt extinguishment of $0.4 million, and equity-based compensation of $0.2 million.

The net change in our operating assets and liabilities was primarily due to an increase in grant receivables of $1.7 million, an increase in prepaid expenses and other current assets of $0.3 million, a decrease in other receivables of $0.3 million, an increase in accounts payable of $0.4 million, an increase in accrued expenses of $1.3 million, and an increase in other current liabilities of $0.5 million.

Investing Activities

Net cash used in investing activities for the three months ended March 31, 2022 was $0.1 million related to purchases of fixed assets.

We did not use any cash for investing activities for the three months ended March 31, 2021.

Net cash used in investing activities for the six months ended June 30, 2022 was $0.1 million related to purchases of fixed assets.

We did not use any cash for investing activities for the six months ended June 30, 2021.

Financing Activities

Net cash used in financing activities was $0.1 million for the three months ended March 31, 2022, and net cash provided by financing activities was $9.0 million for the three months ended March 31, 2021.

The decrease in cash relates primarily to the $8.9 million of SAFEs issued during the three months ended March 31, 2021.

Net cash used in financing activities was $0.5 million for the six months ended June 30, 2022, and net cash provided by financing activities was $7.8 million for the six months ended June 30, 2021.

The decrease in cash relates primarily to the $8.9 million of SAFEs issued during the six months ended June 30, 2021.

Contractual Obligations

The following table summarizes our contractual obligations as of March 31, 2022 (in thousands):

The following table summarizes our contractual obligations as of June 30, 2022 (in thousands):

Operating lease obligations:

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The lease has a term of 89 months and commenced on December 9, 2021.

The annual base rent under the lease is less

than $0.1 million for the first lease year and is subject to annual increases of between 1.82% and 2.04%.

The annual base rent under the lease is less than $0.1 million for the first lease year and is subject to annual increases of between 1.82% and 2.04%.

We provided a security deposit in the form of a Letter of Credit in the amount of less than $0.1 million pursuant to the terms of the lease.

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Payments of $0.1 million are due monthly from October 2021 through September 2022.

As of March 31, 2022, the outstanding principal of the loan was $0.8 million.

As of June 30, 2022, the outstanding principal of the loan was $0.4 million.

We enter into contracts in the normal course of business with contract research organizations and other vendors to assist in the performance of our research and development and other services and products for operating purposes.

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Subsequent to the IPO, the board of directors will determine the fair value of the shares of common stock underlying the stock-based awards based off of the closing price as reported on the Nasdaq Stock Market LLC on the grant date.

See Note 7 to our financial statements for the three months ended March 31, 2022 for more information concerning certain of the specific assumptions we used in applying the Black-Scholes option pricing model to determine the estimated fair value of our stock options.

See Note 7 to our consolidated financial statements for the three and six months ended June 30, 2022 for more information concerning certain of the specific assumptions we used in applying the Black-Scholes option pricing model to determine the estimated fair value of our stock options.

Certain of such assumptions involve inherent uncertainties and the application of significant judgment.

As of March 31, 2022, the total unrecognized compensation expense related to unvested time-based vesting awards was $9.6 million, which is expected to be recognized over weighted-average remaining vesting period of approximately 3.1 years.

As of June 30, 2022, the total unrecognized compensation expense related to unvested time-based vesting awards was $9.0 million, which is expected to be recognized over weighted-average remaining vesting period of approximately 2.5 years.

Recent Accounting Pronouncements

For a description of recent accounting pronouncements, see Note 2 of the notes to our financial statements included in this Quarterly Report.

For a description of recent accounting pronouncements, see Note 2 of the notes to our consolidated financial statements included in this Quarterly Report.

Emerging Growth Company Status

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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 2. Management’s Discussion and Analysis