What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-08-08 compared with 2023-05-04 · 106 added, 60 removed, 163 unchanged (50% 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 and our audited financial statements and notes thereto as of and for the years ended December 31, 2022 and 2021 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report filed with the Securities and Exchange Commission, or SEC, on March 23, 2023.

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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Please see “Special Note Regarding Forward-Looking Statements” and “Risk Factors” included in Part I, Item 1A of our Annual Report for factors that could cause or contribute to such differences.

We are a clinical-stage biopharmaceutical company engaged in the discovery and development of innovative, small molecule therapeutics targeting age-related degenerative diseases and disorders of the central nervous system, or CNS, and retina.

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.

Currently available therapies for these diseases are limited, with few Alzheimer’s disease (“AD”) treatments, one approved treatment for age-related macular degeneration (“dAMD”) and no approved treatments for dementia with Lewy bodies.

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 (“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.

Recent clinical results supports this hypothesis.

In the SNAP study, results of which were published in May 2023 in the journal, Translational Neurodegeneration and showed that a single oral dose of CT1812 rapidly displaces Aβ oligomers from synapses of individuals with AD.

In the SEQUEL study, top-line results showed that four weeks of treatment with CT1812 improved synapse activity and connectivity of brain regions as measured via quantitative electroencephalogram (“qEEG”).

Together, these findings provide evidence that the displacement of oligomers from synapses via CT1812 engagement with the S2R results in improved synapse function.

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, 2023, we had an accumulated deficit of $121.6 million.

We incurred a net loss of $6.2 million and $3.8 million for the three months ended March 31, 2023 and 2022, 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 initial public offering, or IPO, completed in October 2021, proceeds from our follow-on public offering in November 2022, sales of our common stock through our ATM (as defined below), sales of our convertible promissory notes, convertible preferred stock, simple agreements for future equity, or SAFE, and stock option exercises.

As of June 30, 2023, we had an accumulated deficit of $126.3 million.

We incurred a net loss of $4.7 million and $10.9 million for the three and six months ended June 30, 2023, respectively, and net loss of $5.8 million and $9.6 million for the three and six months ended June 30, 2022, respectively.

To date, we have funded our operations primarily with proceeds from grants awarded by the National Institute of Aging (the “NIA”), a division of the National Institutes of Health (the “NIH”), and proceeds from our initial public offering (the “IPO”), completed in October 2021, proceeds from our follow-on public offering in November 2022, sales of our common stock through our ATM (as defined below), sales of our convertible promissory notes, convertible preferred stock, simple agreements for future equity (“SAFE”) and stock option exercises.

Since our inception, we have received approximately $171.0 million in cumulative grant awards to fund our clinical trials, primarily from the NIA, and we have raised approximately $111.2 million in net proceeds from sales of our equity securities, convertible notes, SAFE, stock option exercises, IPO and follow-on public offering, and ATM.

As of March 31, 2023, we had cash and cash equivalents of $38.8 million.

As of June 30, 2023, we had cash and cash equivalents of $37.2 million.

On November 15, 2022, we completed our follow-on public offering, pursuant to which we issued and sold 5,000,000 shares of our common stock at a public offering price of $1.20 per share.

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On December 23, 2022, we entered into a sales agreement with Cantor Fitzgerald & Co.

Riley Securities, Inc., or the Sales Agents, providing for the offering, issuance and sale by us of up to $40.0 million of our common stock from time to time in “at-the-market” offerings (the “ATM”).

We sold 95,823 shares of common stock under the Sales Agreement during the three months ended March 31, 2023 for gross proceeds of approximately $0.2 million.

As of March 31, 2023, there was $39.8 million of common stock remaining available for sale under the ATM, subject to the limitations of General Instruction I.B.6 of Form S-3.

Riley Securities, Inc.

(the “Sales Agents”), providing for the offering, issuance and sale by us of up to $40.0 million of our common stock from time to time in “at-the-market” offerings (the “ATM”).

We sold 1,105,178 shares of common stock under the ATM during the six months ended June 30, 2023 for gross proceeds of approximately $2.5 million.

As of June 30, 2023, there was approximately $37.5 million of common stock remaining available for sale under the ATM.

On March 10, 2023, we entered into a purchase agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) for an equity line financing (the “Lincoln Park Purchase Agreement”).

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333-268992) covering the resale of shares of common stock that are issued under the Lincoln Park Purchase Agreement.

As of March 31, 2023, we had not sold any shares of our common stock to Lincoln Park.

As of June 30, 2023, we had not sold any shares of our common stock to Lincoln Park.

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 ongoing COVID-19 pandemic, including, but not limited to, our clinical trials.

Our business has been and could be adversely affected by the effects of the COVID-19 pandemic or other national health issues.

For example, our ongoing and/or planned clinical trials may be impacted by interruptions or delays in the operations of the FDA and comparable foreign regulatory authorities.

Additionally, 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.

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.

The spread of COVID-19, including the spread of new strains and variants of COVID-19, and actions taken to reduce such spread may also materially affect us economically.

While the potential further economic impact brought by, and the duration of, the COVID 19 pandemic may be difficult to assess or predict, there could be a significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity and financial position.

Additionally, 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.

While the potential further economic impact brought by the COVID-19 pandemic may be difficult to assess or predict, there could be a significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity and financial position.

As a result, we may face difficulties raising capital through future sales of our common stock or such sales may be on unfavorable terms.

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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 (“CROs”), 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, 2023, the Company has been awarded grants with project periods that extend through May 31, 2026, subject to extension.

As of June 30, 2023, the Company has been awarded grants with project periods that extend through May 31, 2026, subject to extension.

Our clinical trials have been funded by approximately $171.0 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.

Interest Expense

Interest expense for the three months ended March 31, 2023 and 2022 consisted of interest expense related to the insurance premium financing arrangement with a lender.

Other Expense, Net

Other expense, net consists primarily of other fees such as offering costs incurred to establish our equity line financing, as well as foreign currency transaction gains or losses.

Interest expense consisted of interest expense related to the insurance premium financing arrangement with a lender.

Other Income (Expense), Net

Other income (expense), net consists primarily of interest income from money market funds, other fees such as offering costs incurred to establish our equity line financing, as well as foreign currency transaction gains or losses.

Results of Operations

Comparison of the Three Months Ended March 31, 2023 and 2022

Comparison of the Three Months Ended June 30, 2023 and 2022

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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Other income (expense):

Other expense, net

Other income (expense), net

Interest expense

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Loss before income tax

Income tax expense

Income tax benefit

Research and Development Expenses

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

Three Months Ended March 31,

Three Months Ended June 30,

Clinical programs

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Facilities and other costs

Research and development expenses were $5.4 million for the three months ended March 31, 2023, compared to $6.5 million for the three months ended March 31, 2022.

Research and development expenses were $8.5 million for the three months ended June 30, 2023, compared to $9.1 million for the three months ended June 30, 2022.

The decrease of $0.6 million was primarily due to the following:

● A decrease of $1.6 million in clinical programs related to decreased phase II trial activity primarily due to decreased contract research organization spend;

● a decrease of $0.9 million in clinical programs primarly related to lower Phase II trial spend due to non-recurring start up activities with CROs;

● an increase of $0.3 million in personnel costs associated with expanded research and development activities, and equity-based compensation expense;

● a decrease of $0.8 million in manufacturing and preclinical program 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 $0.4 million in manufacturing 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;

● an increase of $0.4 million in preclinical programs, facilities and other costs primarily due to increased sponsored research spend under grants.

General and Administrative Expenses

General and administrative expenses were $3.5 million for the three months ended March 31, 2023, compared to $2.9 million for the three months ended March 31, 2022.

General and administrative expenses were $3.3 million for the three months ended June 30, 2023, compared to $3.1 million for the three months ended June 30, 2022.

The increase of $0.2 million was primarily due to:

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● an increase of $0.3 million in professional fees and other costs primarily driven by increased audit, tax, and legal expenses;

● an increase of $0.3 million in equity-based compensation from stock option grants.

● an increase of $0.1 million in equity-based compensation from stock option and restricted stock unit (“RSU”) grants.

Other Income (Expense)

Grant income was $3.4 million for the three months ended March 31, 2023, compared to $5.9 million for the three months ended March 31, 2022.

Grant income was $6.9 million for the three months ended June 30, 2023, compared to $6.4 million for the three months ended June 30, 2022.

The change in grant income is correlated with the increase in eligible reimbursable costs related to clinical trials incurred during 2023 as compared to 2022.

Other Income (Expense), Net

Other income, net was $0.2 million for the three months ended June 30, 2023, compared to other expense, net of less than $0.1 million for the three months ended June 30, 2022.

The change in other income (expense), net was driven primarily by interest earned on money market funds.

Interest Expense

Interest expense was less than $0.1 million for the three months ended June 30, 2023, compared to interest expense of less than $0.1 million for the three months ended June 30, 2022.

Interest expense was not significant in either period.

Comparison of the Six Months Ended June 30, 2023 and 2022

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

Six Months Ended June 30,

Operating Expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense):

Other expense, net

Interest expense

Total other income, net

Research and Development Expenses

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

Six Months Ended June 30,

Clinical programs

Manufacturing

Preclinical programs

Facilities and other costs

Research and development expenses were $13.9 million for the six months ended June 30, 2023, compared to $15.6 million for the six months ended June 30, 2022.

The decrease of $1.7 million was primarily due to the following:

● a decrease of $2.5 million in clinical programs primarly related to lower Phase II trial spend due to non-recurring start up activities with CROs;

● an increase of $1.3 million in personnel costs associated with expanded research and development activities, and equity-based compensation expense;

● a decrease of $1.2 million in manufacturing 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;

● an increase of $0.7 million in preclinical programs, facilities and other costs primarily due to increased sponsored research spend under grants.

General and Administrative Expenses

General and administrative expenses were $6.9 million for the six months ended June 30, 2023, compared to $6.0 million for the six months ended June 30, 2022.

The increase of $0.9 million was primarily due to:

● a decrease of $0.4 million in Director & Officer liability insurance and other expenses;

● an increase of $0.1 million in compensation driven by increased headcount;

● an increase of $0.9 million in professional fees driven by increased audit, tax, and legal services;

● an increase of $0.3 million in equity-based compensation from stock option and RSU grants.

Other Income (Expense)

Grant income was $10.4 million for the six months ended June 30, 2023, compared to $12.3 million for the six months ended June 30, 2022.

The change in grant income is correlated with the decrease in eligible reimbursable costs incurred during 2023 as compared to 2022.

Other Expense, Net

Other expense, net was $0.6 million for the three months ended March 31, 2023, compared to other expense, net of $0.2 million for the three months ended March 31, 2022.

The change in other expense, net was driven primarily by expenses related to the Lincoln Park Purchase Agreement.

Other expense, net was $0.4 million for the six months ended June 30, 2023, compared to other expense, net of $0.2 million for the six months ended June 30, 2022.

The increase in other expense, net was driven primarily by expenses related to the Lincoln Park Purchase Agreement incurred in the first quarter of 2023.

Interest Expense

Interest expense was less than $0.1 million for the three months ended March 31, 2023, compared to interest expense of less than $0.1 million for the three months ended March 31, 2022.

Interest expense was less than $0.1 million for the six months ended June 30, 2023, compared to interest expense of less than $0.1 million for the six months ended June 30, 2022.

Interest expense was not significant in either period.

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The net proceeds were approximately $5.2 million, after deducting underwriting discounts and commissions and other offering related expenses payable by us.

On December 23, 2022, we entered into a sales agreement with the Sales Agents, providing for the offering, issuance and sale by us of up to $40.0 million of our common stock from time to time in ATM offerings, subject to the limitations of General Instruction I.B.6 of Form S-3.

As of March 31, 2023, we sold 95,823 shares of common stock under the Sales Agreement during the three months ended March 31, 2023 for gross proceeds of approximately $0.2 million.

As of March 31, 2023, there was $39.8 million of common stock remaining available for sale under the ATM.

On December 23, 2022, we entered into a

sales agreement with the Sales Agents, providing for the offering, issuance and sale by us of up to $40.0 million of our common stock from time to time in ATM offerings.

As of June 30, 2023, we sold 1,105,178 shares of common stock under the ATM during the six months ended June 30, 2023 for gross proceeds of approximately $2.5 million.

As of June 30, 2023, there was $37.5 million of common stock remaining available for sale under the ATM.

In addition, in March 2023, we entered into the Lincoln Park Purchase Agreement with Lincoln Park Capital Fund, LLC , or Lincoln Park, giving the Company the right, but not the obligation to sell to Lincoln Park up to $35.0 million worth of shares of our common stock .

As of March 31, 2023, there had been no shares sold to date under this agreement.

As of March 31, 2023, we had $38.8 million in cash and cash equivalents and have not generated positive cash flows from operations.

Based on our current business plans, we believe that 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 2024, which assumes no usage from the remaining ATM nor the Lincoln Park Purchase Agreement.

As of June 30, 2023, there had been no shares sold to date under this agreement.

As of June 30, 2023, we had $37.2 million in cash and cash equivalents and have not generated positive cash flows from operations.

Based on our current business plans, we believe that 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 through the third quarter of 2024, which assumes no usage from the remaining ATM nor the Lincoln Park Purchase Agreement.

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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Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we raise funds through collaborations, licenses and other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may

not be favorable to us and/or may reduce the value of our common stock.

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 or other diseases, the ongoing conflict between Ukraine and Russia, inflation, liquidity constraints, failures and instability in U.S.

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 COVID-19 pandemic or other diseases, the ongoing conflict between Ukraine and Russia, inflation, liquidity constraints, failures and instability in U.S.

and international financial banking systems, and otherwise.

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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

Cash flows used in investing activities

Cash flows used in financing activities

Cash flows provided by (used in) financing activities

Effect of exchange rate changes on cash and cash equivalents

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Operating Activities

Net cash used in operating activities for the three months ended March 31, 2023 was $2.7 million, which consisted primarily of our net loss of $6.2 million, offset primarily by the impact of equity-based compensation of $1.2 million and a net change of $1.9 million in our operating assets and liabilities.

The net change in our operating assets and liabilities was primarily due to a decrease in grant receivables of $2.1 million, an increase in prepaid expenses and other assets of $0.1 million, and a decrease in accounts payable and accrued expenses of less than $0.1 million.

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 six months ended June 30, 2023 was $6.4 million, which consisted primarily of a net loss of $10.9 million, offset primarily by the impact of equity-based compensation of $2.2 million and a net change of $1.9 million in operating assets and liabilities.

The net change in operating assets and liabilities was

primarily due to a decrease in grant receivables of $1.3 million, a decrease in prepaid expenses and other assets of $0.8 million, an increase in accounts payable and accrued expenses of $1.2 million, and a decrease in deferred grant income and other liabilities of $1.3 million.

Net cash used in operating activities for the six months ended June 30, 2022 was $8.3 million, which consisted primarily of a 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 operating assets and liabilities.

The net change in 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.

Investing Activities

Net cash used in investing activities for the three months ended March 31, 2023 and 2022 was less than $0.1 million and $0.1 million, respectively, related to a decreased purchase of fixed assets.

Net cash used in investing activities for the six months ended June, 2023 and 2022 was less than $0.1 million and $0.1 million, respectively, related to a decreased purchase of fixed assets.

Overall, the change in net cash used in investing activities was insignificant.

Financing Activities

Net cash used in financing activities was less than $0.1 million for the three months ended March 31, 2023, and net cash provided by financing activities was $0.1 million for the three months ended March 31, 2022.

Net cash provided by financing activities was $2.1 million for the six months ended June 30, 2023, and net cash used in financing activities was $0.5 million for the six months ended June 30, 2022.

The change in net cash provided by financing activities is primarily related to net proceeds from the issuance of common stock under the ATM program.

Contractual Obligations

The following table summarizes our contractual obligations as of March 31, 2023 (in thousands):

The following table summarizes our contractual obligations as of June 30, 2023 (in thousands):

Operating lease obligations:

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Under the agreement, we financed $0.8 million of certain premiums at a 6.85% annual interest rate.

Payments of less than $0.1 million are due monthly from November 2022 through December 2023.

As of March 31, 2023, the outstanding principal of the loan was $0.4 million.

Total payments of less than $0.1 million, including interest and principal, are due monthly from November 2022 through October 2023.

As of June 30, 2023, the outstanding principal of the loan was $0.2 million.

We have entered into an operating leases for office and laboratory facilities under agreements that run through May 31, 2029.

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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.

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.

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

These contracts typically do not contain minimum purchase commitments and generally provide for termination on notice, and therefore are cancelable contracts and not included in the table of contractual obligations.

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The Critical Accounting Policies and Significant Judgements and Estimates included in our Annual Report on Form 10-K have not materially changed.

See “Critical Accounting Policies and Use of Estimates” included in Part II, Item 7 of our Annaul Report on Form 10-K filed with the SEC on March 23, 2023.

See “Critical Accounting Policies and Use of Estimates” included in Part II, Item 7 of our Annual Report on Form 10-K filed with the SEC on March 23, 2023.

Recent Accounting Pronouncements

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Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.

to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (1) are no longer an emerging growth company or (2) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.

We elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (1) are no longer an emerging growth company or (2) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.

As a result, our financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

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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