2 unchanged sentences
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively), evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2022.
−Removed: Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of December 31, 2021 to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
+Added: Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were
+Added: effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures.
Management’s Annual Report on Internal Control Over Financial Reporting
5 unchanged sentences
Based on our evaluation under that framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2022.
−Removed: The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.
+Added: This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm because we are not an accelerated filer or large accelerated filer
Changes in Internal Control Over Financial Reporting
−Removed: There were no changes in our internal control over financial reporting during the year ended December 31, 2021 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
+Added: There were no changes in our internal control over financial reporting during the quarter ended December 31, 2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
2 unchanged sentences
OTHER INFORMATION
−Removed: The following summary contains a description of material U.S.
−Removed: federal income tax and UK tax consequences of the acquisition, ownership and disposition of our ordinary shares or ADSs.
−Removed: This summary should not be considered a comprehensive description of all the tax considerations that may be relevant to beneficial owners of ADSs.
−Removed: Federal Income Tax Considerations for U.S.
−Removed: The following is a description of the material U.S.
−Removed: federal income tax consequences to the U.S.
−Removed: Holders described below of owning and disposing of our ordinary shares or ADSs.
−Removed: It is not a comprehensive description of all tax considerations
−Removed: that may be relevant to a particular person’s decision to acquire securities.
−Removed: This discussion applies only to a U.S.
−Removed: Holder holds our ordinary shares or ADSs as a capital asset for tax purposes (generally, property held for investment).
−Removed: In addition, it does not describe all of the tax consequences that may be relevant in light of a U.S.
−Removed: Holder’s particular circumstances, including state and local tax consequences, estate tax consequences, alternative minimum tax consequences, the special tax accounting rules under Section 451(b) of the Code, the potential application of the Medicare contribution tax, and tax consequences applicable to U.S.
−Removed: Holders subject to special rules, such as:
−Removed: • banks, insurance companies, and certain other financial institutions;
−Removed: expatriates and certain former citizens or long-term residents of the United States;
−Removed: • dealers or traders in securities who use a mark-to-market method of tax accounting;
−Removed: • persons holding ordinary shares or ADSs as part of a hedging transaction, “straddle,” wash sale, conversion transaction or integrated transaction or persons entering into a constructive sale with respect to ordinary shares or ADSs;
−Removed: • persons whose “functional currency” for U.S.
−Removed: federal income tax purposes is not the U.S.
−Removed: • brokers, dealers or traders in securities, commodities or currencies;
−Removed: • tax-exempt entities or government organizations;
−Removed: • S corporations, partnerships, or other entities or arrangements classified as partnerships for U.S.
−Removed: federal income tax purposes;
−Removed: • regulated investment companies or real estate investment trusts;
−Removed: • persons that own or are deemed to own 10% or more of the voting power or value of our ordinary shares or ADSs;
−Removed: • persons who acquired our ordinary shares or ADSs pursuant to the exercise of any employee share option or otherwise as compensation;
−Removed: • persons holding our ordinary shares or ADSs in connection with a trade or business, permanent establishment, or fixed base outside the United States;
−Removed: • persons who own (directly or through attribution) 10% or more (by vote or value) of our outstanding ordinary shares.
−Removed: If an entity that is classified as a partnership for U.S.
−Removed: federal income tax purposes holds ordinary shares or ADSs, the U.S.
−Removed: federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership.
−Removed: Partnerships holding ordinary shares or ADSs and partners in such partnerships are encouraged to consult their tax advisers as to the particular U.S.
−Removed: federal income tax consequences of holding and disposing of ordinary shares or ADSs.
−Removed: The discussion is based on the Internal Revenue Code of 1986, as amended, or the Code, administrative pronouncements, judicial decisions, final, temporary and proposed Treasury Regulations, and the income tax treaty between the UK and the United States, all as of the date of this Annual Report, changes to any of which may affect the tax consequences described herein—possibly with retroactive effect.
−Removed: Holder” is a holder who, for U.S.
−Removed: federal income tax purposes, is a beneficial owner of ordinary shares or ADSs and is:
−Removed: • An individual who is a citizen or individual resident of the United States;
−Removed: • a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District of Columbia;
−Removed: • an estate the income of which is subject to U.S.
−Removed: federal income taxation regardless of its source;
−Removed: • a trust if (1) a U.S.
−Removed: court is able to exercise primary supervision over the administration of the trust and one or more U.S.
−Removed: persons have authority to control all substantial decisions of the trust or (2) the trust has a valid election to be treated as a U.S.
−Removed: person under applicable U.S.
−Removed: Treasury Regulations.
−Removed: Generally, a U.S.
−Removed: Holder of an ADS should be treated for U.S.
−Removed: federal income tax purposes as holding the ordinary shares represented by our ADS.
−Removed: Accordingly, no gain or loss will be recognized upon an exchange of ADSs for ordinary shares.
−Removed: Treasury has expressed concerns that intermediaries in the chain of ownership between the holder of an ADS and the issuer of the security underlying our ADS may be taking actions that are inconsistent with the beneficial ownership of the underlying security.
−Removed: Accordingly the creditability of foreign taxes, if any, as described below, could be affected by actions taken by intermediaries in the chain of ownership between the holders of ADSs and our company if as a result of such actions the holders of ADSs are not properly treated as beneficial owners of the underlying ordinary shares.
−Removed: These actions would also be inconsistent with the claiming of the reduced tax rate, described below, applicable to dividends received by certain non-corporate holders.
−Removed: PERSONS CONSIDERING AN INVESTMENT IN ORDINARY SHARES OR ADSs SHOULD CONSULT THEIR TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES APPLICABLE TO THEM RELATING TO THE ACQUISITION, OWNERSHIP AND DISPOSITION OF THE ORDINARY SHARES OR ADSs, INCLUDING THE APPLICABILITY OF U.S.
−Removed: FEDERAL, STATE AND LOCAL TAX LAWS.
−Removed: Passive Foreign Investment Company Rules
−Removed: If we are classified as a passive foreign investment company, or PFIC, in any taxable year, a U.S.
−Removed: Holder will be subject to special rules generally intended to reduce or eliminate any benefits from the deferral of U.S.
−Removed: federal income tax that a U.S.
−Removed: Holder could derive from investing in a non-U.S.
−Removed: company that does not distribute all of its earnings on a current basis.
−Removed: corporation will be classified as a PFIC for any taxable year in which, after applying certain look-through rules, either:
−Removed: • at least 75% of its gross income is passive income (such as interest income);
−Removed: • at least 50% of its gross assets (determined on the basis of a quarterly average) is attributable to assets that produce passive income or are held for the production of passive income.
−Removed: Based on the current and expected composition of our income and assets and the value of our assets, we believe that we were not a PFIC for U.S.
−Removed: federal income tax purposes for our taxable year ended December 31, 2020 or our taxable year ended December 31, 2021.
−Removed: However, no assurances regarding our PFIC status can be provided for any past, the 2021 taxable year or any future taxable years.
−Removed: The determination of whether we are a PFIC is a fact-intensive determination made on an annual basis applying principles and methodologies that in some circumstances are unclear and subject to varying interpretation.
−Removed: If we are treated as a non-publicly traded CFC for the year being tested for purposes of the PFIC rules, the value of our assets will be measured by the adjusted tax basis of our assets.
−Removed: If we are a publicly traded CFC or not a CFC for such year, the value of our assets generally will be determined by reference to the market price of our ordinary shares or ADSs from time to time, which may fluctuate considerably.
−Removed: Under the income test, our status as a PFIC depends on the composition of our income which will depend on the transactions we enter into in the future and our corporate structure.
−Removed: The composition of our income and assets is also affected by the spending of the cash we raise in any offering.
−Removed: If we are classified as a PFIC in any year with respect to which a U.S.
−Removed: Holder owns the ordinary shares or ADSs, we will continue to be treated as a PFIC with respect to such U.S.
−Removed: Holder in all succeeding years during which the U.S.
−Removed: Holder owns the ordinary shares or ADSs, regardless of whether we continue to meet the tests described above unless (i) we cease to be a PFIC and the U.S.
−Removed: Holder has made a “deemed sale” election under the PFIC rules, or (ii) the U.S.
−Removed: Holder makes a Qualified Electing Fund Election, or QEF Election, with respect to all taxable years during such U.S.
−Removed: Holders holding period in which we are a PFIC.
−Removed: If the “deemed sale” election is made, a U.S.
−Removed: Holder will be deemed to have sold the ordinary shares or ADSs the U.S.
−Removed: Holder holds at their fair market value and any gain from such deemed sale would be subject to the rules described below.
−Removed: After the deemed sale election, so long as we do not become a PFIC in a subsequent taxable year, the U.S.
−Removed: Holder’s ordinary shares or ADSs with respect to which such election was made will not be treated as shares in a PFIC and the U.S.
−Removed: Holder will not be subject to the rules described below with respect to any “excess distribution” the U.S.
−Removed: Holder receives from us or any gain from an actual sale or other disposition of the ordinary shares or ADSs.
−Removed: Holders should consult their tax
−Removed: advisors as to the possibility and consequences of making a deemed sale election if we cease to be a PFIC and such election becomes available.
−Removed: For each taxable year we are treated as a PFIC with respect to U.S.
−Removed: Holders, U.S.
−Removed: Holders will be subject to special tax rules with respect to any “excess distribution” such U.S.
−Removed: Holder receives and any gain such U.S.
−Removed: Holder recognizes from a sale or other disposition (including, under certain circumstances, a pledge) of ordinary shares or ADSs, unless (i) such U.S.
−Removed: Holder makes a QEF Election or (ii) our ordinary shares or ADSs constitute “marketable” securities, and such U.S.
−Removed: Holder makes a mark-to-market election as discussed below.
−Removed: Distributions a U.S.
−Removed: Holder receives in a taxable year that are greater than 125% of the average annual distributions a U.S.
−Removed: Holder received during the shorter of the three preceding taxable years or the U.S.
−Removed: Holder’s holding period for the ordinary shares or ADSs will be treated as an excess distribution.
−Removed: Under these special tax rules:
−Removed: • the excess distribution or gain will be allocated ratably over a U.S.
−Removed: Holder’s holding period for the ordinary shares or ADSs;
−Removed: • the amount allocated to the taxable year of disposition or distribution, and any taxable year prior to the first taxable year in which we became a PFIC, will be treated as ordinary income;
−Removed: • the amount allocated to each other year will be subject to the highest tax rate in effect for that year for individuals or corporations, as appropriate, and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.
−Removed: The tax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the ordinary shares or ADSs cannot be treated as capital, even if a U.S.
−Removed: Holder holds the ordinary shares or ADSs as capital assets.
−Removed: If we are a PFIC, a U.S.
−Removed: Holder will generally be subject to similar rules with respect to distributions we receive from, and our dispositions of the stock of, any of our direct or indirect subsidiaries that also are PFICs, as if such distributions were indirectly received by, and/or dispositions were indirectly carried out by, such U.S.
−Removed: Holders should consult their tax advisors regarding the application of the PFIC rules to our subsidiaries.
−Removed: Holders can avoid the interest charge on excess distributions or gain relating to the ordinary shares or ADSs by making a mark-to-market election with respect to the ordinary shares or ADSs, provided that the ordinary shares or ADSs are “marketable.” Ordinary shares or ADSs will be marketable if they are “regularly traded” on certain U.S.
−Removed: stock exchanges or on a foreign stock exchange that meets certain conditions.
−Removed: For these purposes, the ordinary shares or ADSs will be considered regularly traded during any calendar year during which they are traded, other than in de minimis quantities, on at least 15 days during each calendar quarter.
−Removed: Any trades that have as their principal purpose meeting this requirement will be disregarded.
−Removed: Our ADSs have been listed on Nasdaq, which is a qualified exchange for these purposes.
−Removed: Consequently, if our ADSs remain listed on Nasdaq and are regularly traded, and you are a holder of ADSs, we expect the mark-to-market election would be available to you if we are a PFIC.
−Removed: Holder should consult its tax advisor as to the whether a mark-to-market election is available or advisable with respect to the ordinary shares or ADSs.
−Removed: Holder that makes a mark-to-market election must include in ordinary income for each year an amount equal to the excess, if any, of the fair market value of the ordinary shares or ADSs at the close of the taxable year over the U.S.
−Removed: Holder’s adjusted tax basis in the ordinary shares or ADSs.
−Removed: An electing holder may also claim an ordinary loss deduction for the excess, if any, of the U.S.
−Removed: Holder’s adjusted basis in the ordinary shares or ADSs over the fair market value of the ordinary shares or ADSs at the close of the taxable year, but this deduction is allowable only to the extent of any net mark-to-market gains for prior years.
−Removed: Gains from an actual sale or other disposition of the ordinary shares or ADSs will be treated as ordinary income, and any losses incurred on a sale or other disposition of the shares will be treated as an ordinary loss to the extent of any net mark-to-market gains for prior years.
−Removed: Once made, the election cannot be revoked without the consent of the Internal Revenue Service, or the IRS, unless the ordinary shares or ADSs cease to be marketable.
−Removed: However, a mark-to-market election generally cannot be made for equity interests in any lower-tier PFICs that we own, unless shares of such lower-tier PFIC are themselves “marketable.” As a result, even if a U.S.
−Removed: Holder validly makes a mark-to-market election with respect to our ordinary shares or ADSs, the U.S.
−Removed: Holder may continue to be subject to the PFIC rules (described above) with respect to its indirect interest in any of our investments that are treated as an equity interest in a PFIC for U.S.
−Removed: federal income tax purposes.
−Removed: Holders should consult their tax advisors to determine whether any of these
−Removed: elections would be available and if so, what the consequences of the alternative treatments would be in their particular circumstances.
−Removed: We do not intend to provide information necessary for U.S.
−Removed: holders to make QEF elections which, if available, would result in tax treatment different from the general tax treatment for PFICs described above.
−Removed: Unless otherwise provided by the U.S.
−Removed: Treasury, each U.S.
−Removed: shareholder of a PFIC is required to file an annual report containing such information as the U.S.
−Removed: Treasury may require.
−Removed: Holder’s failure to file the annual report will cause the statute of limitations for such U.S.
−Removed: Holder’s U.S.
−Removed: federal income tax return to remain open with regard to the items required to be included in such report until three years after the U.S.
−Removed: Holder files the annual report, and, unless such failure is due to reasonable cause and not willful neglect, the statute of limitations for the U.S.
−Removed: Holder’s entire U.S.
−Removed: federal income tax return will remain open during such period.
−Removed: Holders should consult their tax advisors regarding the requirements of filing such information returns under these rules.
−Removed: WE STRONGLY URGE YOU TO CONSULT YOUR TAX ADVISOR REGARDING THE APPLICATION OF THE PFIC RULES TO YOUR INVESTMENT IN THE ORDINARY SHARES OR ADSs.
−Removed: Taxation of Distributions
−Removed: Subject to the discussion above under “Passive Foreign Investment Company Rules,” distributions paid on ordinary shares or ADSs, other than certain pro rata distributions of ordinary shares or ADSs, will generally be treated as dividends to the extent paid out of our current or accumulated earnings and profits (as determined under U.S.
−Removed: federal income tax principles).
−Removed: Because we may not calculate our earnings and profits under U.S.
−Removed: federal income tax principles, we expect that distributions generally will be reported to U.S.
−Removed: Holders as dividends.
−Removed: Subject to applicable limitations and the discussions above regarding concerns expressed by the U.S.
−Removed: Treasury, dividends paid to certain non-corporate U.S.
−Removed: Holders may be taxable at preferential rates applicable to “qualified dividend income” if we are a “qualified foreign corporation” and certain other requirements are met.
−Removed: However, the qualified dividend income treatment will not apply if we are treated as a PFIC with respect to the U.S.
−Removed: The amount of the dividend will be treated as foreign-source dividend income to U.S.
−Removed: Holders and will not be eligible for the dividends-received deduction generally available to U.S.
−Removed: corporations under the Code.
−Removed: Dividends will generally be included in a U.S.
−Removed: Holder’s income on the date of the U.S.
−Removed: Holder’s receipt of the dividend.
−Removed: The amount of any dividend income paid in foreign currency will be the U.S.
−Removed: dollar amount calculated by reference to the exchange rate in effect on the date of actual or constructive receipt, regardless of whether the payment is in fact converted into U.S.
−Removed: If the dividend is converted into U.S.
−Removed: dollars on the date of receipt, a U.S.
−Removed: Holder should not be required to recognize foreign currency gain or loss in respect of the dividend income.
−Removed: Holder may have foreign currency gain or loss if the dividend is converted into U.S.
−Removed: dollars after the date of receipt.
−Removed: Such gain or loss would generally be treated as U.S.-source ordinary income or loss.
−Removed: The amount of any distribution of property other than cash (and other than certain pro rata distributions of ordinary shares or ADSs or rights to acquire ordinary shares or ADSs) will be the fair market value of such property on the date of distribution.
−Removed: For foreign tax credit limitation purposes, our dividends will generally be treated as passive category income.
−Removed: Because no UK income taxes will be withheld from dividends on ordinary shares or ADSs, there will be no creditable foreign taxes associated with any dividends that a U.S.
−Removed: Holder will receive.
−Removed: The rules governing foreign tax credits are complex and U.S.
−Removed: Holders should therefore consult their tax advisers regarding the effect of the receipt of dividends for foreign tax credit limitation purposes.
−Removed: Sale or Other Taxable Disposition of Ordinary Shares and ADSs
−Removed: Subject to the discussion above under “Passive Foreign Investment Company Rules,” gain or loss realized on the sale or other taxable disposition of ordinary shares or ADSs will be capital gain or loss, and will be long-term capital gain or loss if the U.S.
−Removed: Holder held the ordinary shares or ADSs for more than one year at the time of sale or other taxable disposition.
−Removed: The amount of the gain or loss will equal the difference between the U.S.
−Removed: Holder’s tax basis in the ordinary shares or ADSs disposed of and the amount realized on the disposition, in each case as determined in U.S.
−Removed: This gain or loss will generally be U.S.-source gain or loss for foreign tax credit purposes.
−Removed: Subject to the PFIC rules described above, long-term capital gains recognized by certain non-corporate U.S.
−Removed: Holders (including individuals) will be, under current law, subject to reduced rates of U.S.
−Removed: federal income tax.
−Removed: The deductibility of capital losses is subject to limitations.
−Removed: If the consideration received by a U.S.
−Removed: Holder is not paid in U.S.
−Removed: dollars, the amount realized will be the U.S.
−Removed: dollar value of the payment received determined by reference to the spot rate of exchange on the date of the sale or other disposition.
−Removed: However, if the ordinary shares or ADSs are treated as traded on an “established securities market” and you are either a cash basis taxpayer or an accrual basis taxpayer that has made a special election (which must be applied consistently from year to
−Removed: year and cannot be changed without the consent of the IRS), you will determine the U.S.
−Removed: dollar value of the amount realized in a non-U.S.
−Removed: dollar currency by translating the amount received at the spot rate of exchange on the settlement date of the sale.
−Removed: If you are an accrual basis taxpayer that is not eligible to or does not elect to determine the amount realized using the spot rate on the settlement date, you will recognize foreign currency gain or loss to the extent of any difference between the U.S.
−Removed: dollar amount realized on the date of sale or disposition and the U.S.
−Removed: dollar value of the currency received at the spot rate on the settlement date.
−Removed: Information Reporting and Backup Withholding
−Removed: Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting, and may be subject to backup withholding, unless (i) the U.S.
−Removed: Holder is a corporation or other exempt recipient or (ii) in the case of backup withholding, the U.S.
−Removed: Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding on a duly executed IRS Form W-9 or otherwise establishes an exemption.
−Removed: The amount of any backup withholding from a payment to a U.S.
−Removed: Holder may be allowed as a credit against the U.S.
−Removed: Holder’s U.S.
−Removed: federal income tax liability and may entitle the U.S.
−Removed: Holder to a refund, provided that the required information is timely furnished to the IRS.
−Removed: Information with Respect to Foreign Financial Assets
−Removed: Holders who are individuals (and, under regulations, certain entities) may be required to report information relating to the ordinary shares or ADSs, subject to certain exceptions (including an exception for ordinary shares or ADSs held in accounts maintained by certain U.S.
−Removed: financial institutions), by filing IRS Form 8938 (Statement of Specified Foreign Financial Assets) with their federal income tax return.
−Removed: Holders who fail to timely furnish the required information may be subject to a penalty.
−Removed: Additionally, if a U.S.
−Removed: Holder does not file the required information, the statute of limitations with respect to tax returns of the U.S.
−Removed: Holder to which the information relates may not close until three years after such information is filed.
−Removed: Holders should consult their tax advisers regarding their reporting obligations with respect to their ownership and disposition of the ordinary shares or ADSs.
−Removed: The following is intended as a general guide to current UK tax law and HM Revenue & Customs, or HMRC, published practice (which is not binding) applying as at the date of this Annual Report (both of which are subject to change at any time, possibly with retrospective effect) relating to the holding of ADSs.
−Removed: It does not constitute legal or tax advice and does not purport to be a complete analysis of all UK tax considerations relating to the holding of ADSs, or all of the circumstances in which holders of ADSs may benefit from an exemption or relief from UK taxation.
−Removed: It is written on the basis that we do not (and will not) directly or indirectly derive 75% or more of its qualifying asset value from UK land, and that we are and will remain solely resident in the UK for tax purposes and will therefore be subject to the UK tax regime and not the U.S.
−Removed: tax regime save as set out above under “—U.S.
−Removed: Federal Income Tax Considerations for U.S.
−Removed: Except to the extent that the position of non-UK resident persons is expressly referred to, this guide relates only to persons who are resident (and in the case of individuals, domiciled or deemed domiciled) for tax purposes solely in the UK and do not have a permanent establishment, branch or agency (or equivalent) in any other jurisdiction with which the holding of our ADSs is connected, or UK Holders, who are absolute beneficial owners of our ADSs (and do not hold our ADSs through an Individual Savings Account or a Self-Invested Personal Pension).
−Removed: This guide may not relate to certain classes of UK Holders, such as (but not limited to):
−Removed: • persons who are connected with us;
−Removed: • financial institutions;
−Removed: • insurance companies;
−Removed: • charities or tax-exempt organizations;
−Removed: • collective investment schemes;
−Removed: • pension schemes;
−Removed: • market makers, intermediaries, brokers or dealers in securities or persons who hold ADSs otherwise than as an investment;
−Removed: • persons who have (or are deemed to have) acquired their ADSs by virtue of an office or employment or who are or have been our officers or employees or any of our affiliates;
−Removed: • individuals who are subject to UK taxation on a remittance basis or to whom split-year treatment applies.
−Removed: The decision of the First-tier Tribunal (Tax Chamber) in HSBC Holdings PLC and The Bank of New York Mellon Corporation v HMRC (2012) cast some doubt on whether a holder of a depositary receipt is the beneficial owner of the underlying shares.
−Removed: However, based on published HMRC guidance we would expect that HMRC will regard a holder of ADSs as holding the beneficial interest in the underlying shares and therefore these paragraphs assume that a holder of ADSs is the beneficial owner of the underlying ordinary shares and any dividends paid in respect of the underlying ordinary shares (where the dividends are regarded for UK purposes as that person’s own income) for UK direct tax purposes.
−Removed: THESE PARAGRAPHS ARE A SUMMARY OF CERTAIN UK TAX CONSIDERATIONS AND ARE INTENDED AS A GENERAL GUIDE ONLY.
−Removed: IT IS RECOMMENDED THAT ALL HOLDERS OF ADSs OBTAIN ADVICE AS TO THE CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSAL OF OUR ADSs IN THEIR OWN PARTICULAR CIRCUMSTANCES FROM THEIR OWN TAX ADVISORS.
−Removed: IN PARTICULAR, NON-UK RESIDENT OR DOMICILED PERSONS OR PERSONS SUBJECT TO TAXATION IN ANY JURISDICTION OTHER THAN THE UK ARE ADVISED TO CONSIDER THE POTENTIAL IMPACT OF ANY RELEVANT DOUBLE TAXATION AGREEMENTS.
−Removed: Withholding Tax
−Removed: Dividends that we pay will not be subject to any withholding or deduction for or on account of UK tax.
−Removed: An individual UK Holder may, depending on his or her particular circumstances, be subject to UK tax on dividends received from us.
−Removed: An individual holder of ADSs who is not resident for tax purposes in the UK should not be chargeable to UK income tax on dividends received from us unless he or she carries on (whether solely or in partnership) a trade, profession or vocation in the UK through a permanent establishment, branch or agency to which our ADSs are attributable.
−Removed: There are certain exceptions for trading in the UK through independent agents, such as some brokers and investment managers.
−Removed: Dividend income is treated as the top slice of the total income chargeable to UK income tax for an individual UK Holder.
−Removed: An individual UK Holder who receives a dividend in the 2021/2022 tax year will be entitled to a tax-free allowance of £2,000.
−Removed: Income within the dividend allowance counts towards an individual’s basic or higher rate limits and may, therefore, affect the level of personal allowance to which they are entitled.
−Removed: Dividend income in excess of this tax-free allowance will (subject to the availability of any income tax personal allowance) be taxed at 7.5% (for the tax year 2021/2022) to the extent the excess amount falls within the basic rate band, 32.5% (for the tax year 2021/2022) to the extent the excess amount falls within the higher rate band, and 38.1% (for the tax year 2021/2022) to the extent the excess amount falls within the additional rate band.
−Removed: The government has announced that dividend tax rates will increase by 1.25% from April 2022.
−Removed: The dividend tax-free allowance of £2,000 is, however, expected to remain unaffected.
−Removed: The new rates (stated in the Finance Bill currently before the UK Parliament) will be:
−Removed: basic rate at 8.75%, higher rate at 33.75%, and additional rate at 39.35%.
−Removed: Corporation Tax
−Removed: A corporate holder of ADSs who is not resident for tax purposes in the UK should not be chargeable to UK corporation tax on dividends received from us unless it carries on (whether solely or in partnership) a trade in the UK through a permanent establishment to which our ADSs are attributable.
−Removed: Corporate UK Holders should not be subject to UK corporation tax on any dividend received from us so long as the dividends qualify for exemption, which should be the case, although certain conditions must be met.
−Removed: It should be noted that the exemptions, whilst of wide application, are not comprehensive and are subject to anti-avoidance rules in relation to a dividend.
−Removed: If the conditions for the exemption are not satisfied, or such anti-avoidance provisions apply or such UK Holder elects for an otherwise exempt dividend to be taxable, UK corporation tax will be chargeable on the amount of any dividends (at the current rate of 19% for the tax year 2021/2022 rising to 25% in the tax year 2023/2024 for companies with profits of more than £250,000 whilst the rate of 19% will apply to companies with profits not exceeding £50,000 with a tapered rate applying to profits between £50,000 and £250,000).
−Removed: Chargeable Gains
−Removed: A disposal or deemed disposal of ADSs by a UK Holder may, depending on the UK Holder’s circumstances and subject to any available exemptions or reliefs (such as the annual exemption), give rise to a chargeable gain or an allowable loss for the purposes of UK capital gains tax and corporation tax on chargeable gains.
−Removed: If an individual UK Holder who is subject to UK income tax at either the higher or the additional rate is liable to UK capital gains tax on the disposal of ADSs, the current applicable rate will be 20% (for the tax year 2021/2022).
−Removed: For an individual UK Holder who is subject to UK income tax at the basic rate and liable to UK capital gains tax on such disposal, the current applicable rate would be 10% (for the tax year 2021/2022), save to the extent that any capital gains when aggregated with the UK Holder’s other taxable income and gains in the relevant tax year exceed the unused basic rate tax band.
−Removed: In that case, the rate currently applicable to the excess would be 20% (for the tax year 2021/2022).
−Removed: If a corporate UK Holder becomes liable to UK corporation tax on the disposal (or deemed disposal) of ADSs, the main rate of UK corporation tax would apply (currently at 19% for the tax year 2021/2022 rising to 25% in the tax year 2023/2024 for companies with profits of more than £50,000 whilst the rate of 19% will apply to companies with profits not exceeding £250,000 with a tapered rate applying to profits between £50,000 and £250,000).
−Removed: A holder of ADSs that is not resident for tax purposes in the UK should not normally be liable to UK capital gains tax or corporation tax on chargeable gains on a disposal (or deemed disposal) of ADSs, unless the person is carrying on (whether solely or in partnership) a trade, profession or vocation in the UK through a branch or agency (or, in the case of a corporate holder of ADSs, through a permanent establishment) to which our ADSs are attributable.
−Removed: However, an individual holder of ADSs who has ceased to be resident for tax purposes in the UK or is treated as resident outside the UK for the purposes of a double taxation treaty for a period of five years or less and who disposes of ADSs during that period of temporary non-residence may be liable on his or her return to the UK (or upon ceasing to be regarded as resident outside the UK for the purposes of double taxation treaty) to UK tax on any capital gain realized (subject to any available exemption or relief).
−Removed: Stamp Duty and Stamp Duty Reserve Tax
−Removed: The discussion below relates to the holders of our ordinary shares or ADSs wherever resident, however it should be noted that special rules may apply to certain persons such as market makers, brokers, dealers or intermediaries.
−Removed: Issue of Ordinary Shares
−Removed: No UK stamp duty or stamp duty reserve tax, or SDRT, is generally payable on the issue of the ordinary shares underlying our ADSs.
−Removed: Transfers of Ordinary Shares
−Removed: An unconditional agreement to transfer ordinary shares will normally give rise to a charge to SDRT at the rate of 0.5% of the amount or value of the consideration payable for the transfer.
−Removed: The purchaser of the shares is liable for the SDRT.
−Removed: Transfers of ordinary shares in certificated form are generally also subject to stamp duty at the rate of 0.5% of the amount or value of the consideration given for the transfer (rounded up to the next £5.00).
−Removed: Stamp duty is normally paid by the purchaser.
−Removed: The charge to SDRT will be cancelled or, if already paid, repaid (generally with interest), where a transfer instrument has been duly stamped within six years of the charge arising, (either by paying the stamp duty or by claiming an appropriate relief) or if the instrument is otherwise exempt from stamp duty.
−Removed: Clearance Services and Depositary Receipts
−Removed: Under current UK tax law and published HMRC practice, no SDRT (and, where the transfer is effected by a written instrument, stamp duty) is generally payable where an issue or transfer of ordinary shares (including an unconditional agreement to transfer ordinary shares to a clearance service or a depositary receipt system (including to a nominee or agent for, a person whose business is or includes the issue of depositary receipts or the provision of clearance services)) is an integral part of an issue of share capital unless the clearance service has made and maintained an election under section 97A of the UK Finance Act 1986, or a section 97A election.
−Removed: It is understood that HMRC regards the facilities of DTC as a clearance service for these purposes and we are not aware of any section 97A election having been made by the DTC.
−Removed: Issue of ADSs
−Removed: No UK stamp duty or SDRT is payable on the issue of ADSs in the Company.
−Removed: If arising, any stamp duty or SDRT payable on a transfer of ordinary shares to a depositary receipt system or clearance service will in practice generally be paid by the transferors or participants in the clearance service or depositary receipt system.
−Removed: Transfers of ADSs
−Removed: No UK SDRT should be required to be paid in respect of a paperless transfer of ADSs through the facilities of DTC, provided that no section 97A election has been made by DTC, and such ADSs are held through DTC at the time of any agreement for their transfer.
−Removed: No UK stamp duty will in practice be payable on a written instrument transferring an ADS provided that the instrument of transfer is executed and remains at all times outside the United Kingdom.
−Removed: Where these conditions are not met, the transfer of, or agreement to transfer, an ADS could, depending on the circumstances, attract a charge to UK stamp duty at the rate of 0.5% of the amount or value of the consideration.
−Removed: If it is necessary to pay stamp duty, it may also be necessary to pay interest and penalties.
−Removed: Issue or Transfers of ADRs
−Removed: No UK stamp duty or SDRT should be required to be paid on the issue or transfer of (including an agreement to transfer) ADRs in the Company.
+Added: Not applicable.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
34 unchanged sentences
4.2 Form of American Depositary Receipt (included in exhibit 4.1).
+Added: 4.3* Description of Securities
10.1# Investment and shareholders’ agreement by and between COMPASS Rx Limited and the shareholders named therein, dated April 17, 2020 and amended and restated on August 7, 2020.
4 unchanged sentences
Form 20-F 001-39522 10.2 3/9/2021
−Removed: 10.4# Employment Agreement with Piers Morgan
−Removed: Form 20-F 001-39522 10.3 3/9/2021
−Removed: 10.5# Employment Agreement with Lars Wilde.
−Removed: Form 20-F 001-39522 10.4 3/9/2021
−Removed: 10.6# Amendment to Lars Wilde employment agreement
−Removed: Form 20-F 001-39522 10.5 3/9/2021
−Removed: 10.7# Employment Agreement with Nate Poulsen.
−Removed: Form 20-F 001-39522 10.6 3/9/2021
−Removed: 10.8# Confidentiality Agreement with Nate Poulsen
−Removed: Form 20-F 001-39522 10.7 3/9/2021
10.4# Employment Agreement with Ekaterina Malievskaia.
Form 20-F 001-39522 10.7 3/9/2021
−Removed: 10.10# The Chief Financial Officer’s Settlement Agreement dated July 29, 2021 with the Company
−Removed: Form 6-K 001-39522 10.1 11/9/2021
−Removed: 10.11# The General Counsel and Chief Legal Officer’s Settlement Agreement dated September 29, 2021 with the Company
−Removed: Form 6-K 001-39522 10.2 11/9/2021
−Removed: 10.12# The President, Chief Business Officer and Co-founder’s Part-Time Agreement with the Company
−Removed: Form 6-K 001-39522 10.3 11/9/2021
10.5 2020 Employee Share Option and Incentive Plan with Non-Employee Sub-Plan and U.S.
10 unchanged sentences
Form F-1/A 333-248484 10.6 9/14/2020
−Removed: 10.18*# Employ ment Agreement with Michael Falvey
+Added: 10.10# Employment Agreement with Michael Falvey
Form 6-K 001-39522 10.1 12/7/2021
−Removed: 10.19 Restricted share unit award agreement for company employees under the COMPASS Pathways plc 2020 Share option and incentive plan
+Added: 10.11# Form of Non-Qualified Share Option Agreement for Company Employees under the 2020 Share Option and Incentive Plan.
Form 8-K 001-39522 10.2 02/04/2022
−Removed: 10.20*# E mplo yment A greement with Matthew Owens
+Added: 10.12#* Restricted share unit award agreement for company employees under the COMPASS Pathways plc 2020 Share O ption and I ncentive P lan
+Added: 10.13# Employment Agreement with Matthew Owens
+Added: 10-K 001-39522 10.20 02/24/2022
10.14 Services Agreement by and between BioInnovation Labs LLC and COMPASS Pathways Inc dated January 31, 2022
+Added: 10-K 001-39522 10.21 02/24/2024
10.15 Service Agreement by and between Movassate Family Trust and COMPASS Pathways Inc dated August 3, 2021
+Added: 10-K 001-39522 10.22 02/24/2022
+Added: 10.16 Master Research Collaboration Agreement by and among COMPASS Pathfinder Limited, King’s College London and South London and Maudsley NHS Foundation Trust, dated March 22, 2022
+Added: 10-Q 001-39522 10.1 05/10/2022
+Added: 10.17# Employment Agreement dated August 1, 2022 by and between COMPASS Pathways plc and Kabir Nath.
+Added: 8-K 001-39522 10.1 07/19/2022
+Added: 10.18 Amendment to Employment Agreement dated September 14, 2020 by and between COMPASS Pathways plc and George Goldsmith.
+Added: 8-K 001-39522 10.2 07/19/2022
+Added: 10.19* WeWork Membership Agreement dated August 22, 2022 by and between COMPASS Pathways Inc and 130 Madison Avenue Tenant LLC
+Added: 10.20# Form of Inducement Award Non-Qualified Share Option Agreement.
+Added: 10-Q 001-39522 10.3 8/04/2022
21.1 Subsidiaries of COMPASS Pathways plc.
Form F-1 333-248484 21.1 8/28/2020
−Removed: 23.1* Consent of PricewaterhouesCoopers LLP, an Independent Registered Public Accounting Firm
+Added: 23.1* Consent of Pricewaterhou s e Coopers LLP, an Independent Registered Public Accounting Firm
31.1* Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Rule 13(a)-14(a)/15d-14(a), by Principal Executive Officer
1 unchanged sentence
32.1** Certification pursuant to 18 U.S.C.
−Removed: Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Principal Executive Officer
−Removed: 32.2** Certification pursuant to 18 U.S.C.
−Removed: Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Principal Financial Officer
+Added: Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Principal Executive Office r and P r inciple Financial Officer
101.INS* XBRL Instance Document
11 unchanged sentences
FORM 10-K SUMMARY
+Added: Not applicable.
INDEX TO THE FINANCIAL STATEMENTS
9 unchanged sentences
To the Board of Directors and Shareholders of COMPASS Pathways plc
−Removed: Opinions on the Financial Statements and Internal Control over Financial Reporting
−Removed: We have audited the accompanying consolidated balance sheets of COMPASS Pathways plc and its subsidiaries (the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements of operations and comprehensive loss, of convertible preferred shares and shareholders’ equity (deficit), and of cash flows for each of the three years in the period ended December 31, 2021, including the related notes (collectively referred to as the “consolidated financial statements”).
−Removed: We also have audited the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
−Removed: In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020 , and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America.
−Removed: Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
+Added: Opinion on the Financial Statements
+Added: We have audited the accompanying consolidated balance sheets of COMPASS Pathways plc and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of operations and comprehensive loss, of shareholders’ equity (deficit), and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes (collectively referred to as the “consolidated financial statements”).
+Added: In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and December 31, 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America.
Change in Accounting Principle
As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2021.
−Removed: Basis for Opinions
−Removed: The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 9A.
−Removed: Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.
+Added: Basis for Opinion
+Added: These consolidated financial statements are the responsibility of the Company’s management.
+Added: Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
−Removed: We conducted our audits in accordance with the standards of the PCAOB.
−Removed: Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
−Removed: Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
+Added: We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB.
+Added: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
+Added: The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
+Added: As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.
+Added: Accordingly, we express no such opinion.
+Added: Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
−Removed: Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.
−Removed: Our audits also included performing such other procedures as we considered necessary in the circumstances.
−Removed: We believe that our audits provide a reasonable basis for our opinions.
−Removed: Definition and Limitations of Internal Control over Financial Reporting
−Removed: A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
−Removed: A company’s internal control over financial reporting includes those policies and procedures
−Removed: that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
−Removed: (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
−Removed: and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
−Removed: Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
−Removed: Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
−Removed: Critical Audit Matters
+Added: We believe that our audits provide a reasonable basis for our opinion.
+Added: Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgements.
1 unchanged sentence
Benefit from Research and Development Tax Credit
−Removed: As described in Note 2 to the consolidated financial statements, the Company carries out research and development activities and benefits from the UK research and development (“R&D”) tax credit regime under the scheme for small and medium-sized enterprises.
−Removed: For the year ended December 31, 2021, the Company recognized $9.6 million in benefit from R&D tax credits.
−Removed: As disclosed by management, they evaluate the tax credit programs the Company is expected to be eligible for and recognize a benefit from the R&D tax credit for the portion of the expense that management expects to qualify under the program and has reasonable assurance that the amount will ultimately be realized.
−Removed: Management assesses its research and development activities and expenditures to determine whether the nature of the activities and expenditures will qualify for credit under the tax credit program and whether the claim will ultimately be realized based on the allowable reimbursable expense criteria established by the UK government.
+Added: As described in Notes 2 and 5 to the consolidated financial statements, the Company carries out research and development activities and benefits from the UK research and development (“R&D”) tax credit regime under the scheme for small and medium-sized enterprises.
+Added: For the year ended December 31, 2022, the Company recognized $14.4 million in benefit from R&D tax credit.
+Added: As disclosed by management, they evaluate the tax credit programs the Company is expected to be eligible for and recognize a benefit from the R&D tax credit for the portion of the expense that management expects to qualify under the program and have reasonable assurance that the amount will ultimately be realized.
+Added: Management assesses its research and development activities and expenditures to determine whether the nature of the activities and expenditures will qualify for
+Added: credit under the tax credit program and whether the claim will ultimately be realized based on the allowable reimbursable expense criteria established by the UK government.
Management makes judgements to estimate the qualifying R&D expenditures including the allocation of time spent by individual team members on R&D activities versus non-R&D activities.
−Removed: The principal considerations for our determination that performing procedures relating to the benefit from research and development tax credit is a critical audit matter are (i) the significant judgement by management when determining the nature and amount of expenses that qualify under the tax credit program including estimating the allocation of time spent on R&D activities;
−Removed: and (ii) a high degree of auditor judgement, subjectivity, and effort in performing procedures and evaluating audit evidence related to the benefit from R&D tax credit.
+Added: The principal considerations for our determination that performing procedures relating to the Benefit from R&D Tax Credit is a critical audit matter are (i) the significant judgement applied by management when determining the nature and amount of expenses that qualify under the tax credit program, including estimating the allocation of time spent on R&D activities;
+Added: and (ii) the high degree of auditor judgement, subjectivity and effort in performing procedures and evaluating audit evidence related to the benefit from R&D tax credit.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
−Removed: These procedures included testing the effectiveness of controls over management’s process relating to accruing the benefit from R&D tax credit.
−Removed: These procedures also included, among others, (i) evaluating management’s assessment of the nature of the activities performed by the company and their qualification for the R&D tax credit program (ii) testing management’s process for estimating R&D costs that qualify, (iii) evaluating the reasonableness of management’s allocation of qualifying expenses including determining the amount expected to be realized based on relevant criteria outlined in the tax relief program, (iv) testing the completeness and accuracy of the data underlying the tax credit calculations, and (v) obtaining evidence of cash received in respect of the prior year’s claim to support the assessment that the benefit will ultimately be realized.
+Added: These procedures included, among others, (i) evaluating management’s assessment of the nature of the activities performed by the Company and their qualification for the R&D tax credit program available for small and medium sized enterprises, (ii) testing management’s process for estimating R&D costs that qualify, (iii) evaluating the reasonableness of management’s allocation of qualifying expenses including determining the amount expected to be realized based on relevant criteria outlined in the tax credit program, (iv) testing the completeness and accuracy of the data underlying the tax credit calculations, and (v) obtaining evidence of cash received in respect of the prior year’s claim to support the assessment that the benefit will ultimately be realized.
/s/ PricewaterhouseCoopers LLP
32 unchanged sentences
Ordinary shares, £ 0.008 par value;
−Removed: 42,019,874 and 35,930,331
−Removed: shares authorized, issued and outstanding at
−Removed: December 31, 2021 and 2020, respectively
+Added: 42,631,794 and 42,019,874 shares authorized, issued and outstanding at December 31, 2022 and 2021, respectively
Deferred shares, £ 21,921.504 par value;
−Removed: one share authorized,
−Removed: issued and outstanding at December 31, 2021 and 2020
+Added: one share authorized, issued and outstanding at December 31, 2022 and 2021
Additional paid-in capital 458,825 444,750
−Removed: Accumulated other comprehensive income 8,840 14,585
+Added: Accumulated other comprehensive (loss)/income ( 16,867 ) 8,840
Accumulated deficit ( 261,146 ) ( 169,641 )
5 unchanged sentences
(in thousands, except share and per share amounts)
+Added: (expressed in U.S.
+Added: Dollars, unless otherwise stated)
Year Ended December 31,
16 unchanged sentences
Net loss ( 91,505 ) ( 71,742 ) ( 60,334 )
−Removed: Other comprehensive income:
+Added: Other comprehensive loss:
Foreign exchange translation adjustment ( 25,707 ) ( 5,745 ) 14,683
4 unchanged sentences
COMPASS PATHWAYS PLC
−Removed: Consolidated Statements of Convertible Preferred Shares and Shareholders’ Equity (Deficit)
+Added: Consolidated Statements of Shareholders’ Equity (Deficit)
(in thousands, except share and per share amounts)
+Added: (expressed in U.S.
+Added: Dollars, unless otherwise stated)
CONVERTIBLE A CONVERTIBLE B CONVERTIBLE ORDINARY SHARES £ 0.008
−Removed: DEFERRED SHARES ADDITIONAL PAID-IN CAPITAL ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ACCUMULATED DEFICIT TOTAL SHAREHOLDERS' EQUITY (DEFICIT)
+Added: DEFERRED SHARES ADDITIONAL PAID-IN CAPITAL ACCUMULATED OTHER COMPREHENSIVE (LOSS)/ INCOME ACCUMULATED DEFICIT TOTAL SHAREHOLDERS' EQUITY (DEFICIT)
PREFERRED SHARES PREFERRED SHARES PREFERRED SHARES PAR VALUE £ 21,921.504 PAR VALUE
1 unchanged sentence
Balance at December 31, 2019 2,650,980 $ 3,761 7,131,525 $ 35,147 — $ — 10,752,429 $ 111 — $ — $ 7,162 $ ( 98 ) $ ( 37,565 ) $ ( 30,390 )
−Removed: Issuance of ordinary shares, net of issuance costs — — — — — — 201,263 — — — — — — —
−Removed: Share-based compensation expense — — — — — — — — — — 3,253 — — 3,253
−Removed: Unrealized gain (loss) on foreign currency translation — — — — — — — — — — — 337 — 337
−Removed: Net loss — — — — — — — — — — — — ( 19,612 ) ( 19,612 )
−Removed: Balance at December 31, 2019 2,650,980 3,761 7,131,525 35,147 — — 10,752,429 111 — — 7,162 ( 98 ) ( 37,565 ) ( 30,390 )
Issuance of B convertible preferred shares, net of issuance costs — — — — 4,913,404 61,316 — — — — — — — —
6 unchanged sentences
Share-based compensation expense — — — — — — — — — — 17,983 — — 17,983
−Removed: Unrealized gain on foreign currency translation — — — — — — — — — — — 14,683 — 14,683
+Added: Unrealized gain (loss) on foreign currency translation — — — — — — — — — — — 14,683 — 14,683
Net loss — — — — — — — — — — — — ( 60,334 ) ( 60,334 )
3 unchanged sentences
Issuance of ordinary shares, net of issuance costs — — — — — — 4,600,000 51 — — 154,743 — — 154,794
−Removed: Vesting of restricted stock units — — — — — — 12,607 — — — — — — —
+Added: Issuance of ordinary shares to settle vested restricted stock units — — — — — — 12,607 — — — — — — —
Share-based compensation expense — — — — — — — — — — 8,639 — — 8,639
−Removed: Unrealized loss on foreign currency translation — — — — — — — — — — — ( 5,745 ) — ( 5,745 )
+Added: Unrealized gain (loss) on foreign currency translation — — — — — — — — — — — ( 5,745 ) — ( 5,745 )
Net loss — — — — — — — — — — — — — ( 71,742 ) ( 71,742 )
Balance at December 31, 2021 — $ — — $ — — $ — 42,019,874 $ 435 1 $ 28 $ 444,750 $ 8,840 $ ( 169,641 ) $ 284,412
+Added: Issuance of ordinary share under ATM offering, net of issuance costs — — — — — 44,416 1 — — 439 — — 440
+Added: Exercise of share options — — — — — 462,722 4 — — 397 — — 401
+Added: Issuance of ordinary shares to settle vested restricted stock units — — — — — 82,622 — — — — — — —
+Added: Issuance of ordinary shares under 2020 employee share purchase plan — — — — — 22,160 — — — 199 — — 199
+Added: Shares tendered for withholding taxes — — — — ( 83 ) — — ( 83 )
+Added: Share-based compensation expense — — — — 13,123 — — 13,123
+Added: Unrealized gain (loss) on foreign currency translation — — — — — ( 25,707 ) — ( 25,707 )
+Added: Net loss — — — — — — — — — — — ( 91,505 ) ( 91,505 )
+Added: Balance at December 31, 2022 — $ — — $ — — 42,631,794 $ 440 1 $ 28 $ 458,825 $ ( 16,867 ) $ ( 261,146 ) $ 181,280
The accompanying notes are an integral part of these consolidated financial statements.
2 unchanged sentences
(in thousands)
+Added: (expressed in U.S.
+Added: Dollars, unless otherwise stated)
Year Ended December 31,
4 unchanged sentences
Depreciation and amortization 330 175 112
−Removed: Non-cash loss on foreign currency remeasurement 22 — —
Change in fair value of convertible notes — — 1,771
+Added: Non-cash loss on foreign currency remeasurement 1,141 22 —
Non-cash share-based compensation 13,123 8,639 17,983
13 unchanged sentences
CASH FLOWS FROM FINANCING ACTIVITIES:
−Removed: Proceeds of issuance of ordinary shares, net of issuance costs 154,794 — —
−Removed: Proceeds from exercise of options 1,852 16 —
+Added: Proceeds from issuance of ordinary shares, net of issuance costs 440 154,794 —
+Added: Proceeds from the issuance of shares under the employee share purchase plan 199 — —
+Added: Proceeds from exercise of share options 401 1,852 16
Issuance of ADRs in initial public offering, net of issuance costs — — 132,823
Proceeds of issuance of preferred shares, net of issuance costs — — 61,316
−Removed: Proceeds from issuance of convertible notes — — 18,434
−Removed: Payments of initial public offering costs — — ( 55 )
Net cash provided by financing activities 1,040 156,646 194,155
Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 24,959 ) ( 5,576 ) 13,225
−Removed: Net increase in cash and cash equivalents 82,991 165,372 2,077
−Removed: Cash, cash equivalents and restricted cash, beginning of the year 190,356 24,984 22,907
−Removed: Cash, cash equivalents and restricted cash, end of the year $ 273,347 $ 190,356 $ 24,984
+Added: Net (decrease)/increase in cash, cash equivalents and restricted cash ( 129,966 ) 82,991 165,372
+Added: Cash, cash equivalents and restricted cash, beginning of the period 273,347 190,356 24,984
+Added: Cash, cash equivalents and restricted cash, end of the period $ 143,381 $ 273,347 $ 190,356
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Right-of-use assets obtained in exchange for new operating lease liabilities $ 783 $ 5,562 $ —
−Removed: Proceeds from exercise of options were not received and recorded in other current assets $ 53 $ — $ —
−Removed: Deferred issuance costs included in prepaid expenses $ 856 $ — $ 58
+Added: Unpaid tax withholdings on stock award recognized in accrued and other liabilities $ 85 $ — $ —
+Added: Proceeds from exercise of options were received and recorded in other current assets $ — $ 53 $ —
+Added: Deferred issuance costs included in accrued expenses $ — $ 856 $ —
Conversion of convertible notes into convertible preferred shares $ — $ — $ 21,614
10 unchanged sentences
COMPASS Pathways plc, or the Company, is a mental health care company dedicated to accelerating patient access to evidence-based innovation in mental health.
−Removed: The Company is developing psilocybin therapy through late-stage clinical trials in Europe and North America for patients with treatment-resistant depression.
−Removed: The Company is a public limited company incorporated in England and Wales and was originally incorporated under the name COMPASS Rx Limited before being renamed COMPASS Pathways plc as part of our corporate reorganization as more particularly described below.
−Removed: Prior to and in contemplation of the consummation of the Company's initial public offering, or IPO, of American Depositary Shares, or ADSs, the Company undertook a corporate reorganization.
−Removed: The corporate reorganization took place in several steps, all of which have been completed.
−Removed: The Company refers to the following steps, which are discussed in more detail below, as the “corporate reorganization”.
−Removed: •Prior to the corporate reorganization, the holding company of the COMPASS group was COMPASS Pathfinder Holdings Limited.
−Removed: • Pursuant to the terms of a share for share exchange completed on August 7, 2020, all of the shareholders of COMPASS Pathfinder Holdings Limited, which, until the corporate reorganization was the holding company of the COMPASS group, exchanged each of the shares held by them for 1,161 of the same class, with the same shareholder rights, of newly issued shares of COMPASS Rx Limited and, as a result, COMPASS Pathfinder Holdings Limited became a wholly owned subsidiary of COMPASS Rx Limited.
−Removed: This share exchange had the effect of a 1:1,161 share split.
−Removed: No shareholder rights or preferences changed as a result of the share for share exchange.
−Removed: COMPASS Pathfinder Holdings Limited is a private limited liability company incorporated under the laws of England and Wales and its primary offices are in London, United Kingdom, (U.K.).
−Removed: COMPASS Pathfinder Holdings Limited has one wholly-owned subsidiary, COMPASS Pathfinder Limited, whose primary office is in London, United Kingdom.
−Removed: COMPASS Pathfinder Limited has one wholly-owned subsidiary, COMPASS Pathways Inc.
−Removed: whose primary office is located in New York, United States of America.
−Removed: • Pursuant to Part 17 of the Companies Act 2006, on August 19, 2020, COMPASS Rx Limited reduced its share capital by way of a reduction of the nominal value of each share in the capital of COMPASS Rx Limited from £ 1.00 to £ 0.001 in order to satisfy the net asset test requirement in section 92 of the Companies Act 2006 for the re-registration of COMPASS Rx Limited as a public limited company and to create distributable reserves in order to support future distributions activities by the Company (although we note that none are currently planned).
−Removed: • COMPASS Rx Limited was re-registered as a public limited company and renamed COMPASS Pathways plc, effective on August 21, 2020.
−Removed: COMPASS Pathways plc is a holding company with nominal activity.
−Removed: • Immediately prior to the completion of the Company’s IPO on September 22, 2020, the different classes of issued share capital of COMPASS Pathways plc were reorganized on a one-for-0.1136 basis into a single class of 27,305,331 ordinary shares by way of a reverse share split, which was retroactively restated in our consolidated financial statements.
−Removed: As part of this reverse share split, the nominal value of COMPASS Pathways plc’s ordinary shares changed from £ 0.001 per share to £ 0.008 per share and a single, non-voting deferred share with a nominal value of £ 21,921.504 in the capital of the Company was created and transferred to the Company.
−Removed: • On September 22, 2020, the Company completed the IPO.
−Removed: In the IPO, the Company sold an aggregate of 8,625,000 ADSs representing the same number of ordinary shares, including 1,125,000 ADSs pursuant to the underwriters’ over-allotment right option to purchase additional ADSs, at a public offering price of $ 17.00 per ADS.
−Removed: Net proceeds were approximately $ 132.8 million, after deducting underwriting discounts and commissions and other offering expenses.
−Removed: COMPASS Pathways plc is a continuation of COMPASS Pathfinder Holdings Limited and its subsidiaries, and the corporate reorganization has been accounted for as a combination of entities under common control.
−Removed: The corporate reorganization associated with the IPO was given retrospective effect in the prior year consolidated financial statements and such financial statements represent the financial statements of COMPASS Pathways plc.
−Removed: In connection with the corporate reorganization, outstanding restricted share awards and option grants of COMPASS Pathfinder Holdings Limited were exchanged for share awards and option grants of COMPASS Pathways plc with identical restrictions.
−Removed: The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations.
+Added: The Company is developing its investigational COMP360 psilocybin therapy through late-stage clinical trials in Europe and North America for patients with treatment-resistant depression.
+Added: The Company is subject to risks and uncertainties common to clinical stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary intellectual property and technology, compliance with government regulations and the ability to secure additional capital to fund operations.
Therapeutic candidates currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval, prior to commercialization.
1 unchanged sentence
Even if the Company’s therapeutic development efforts are successful, it is uncertain when, if ever, the Company will realize revenue from sales.
−Removed: The Company has funded its operations primarily with proceeds from the sale of its convertible preferred shares, the issuance of convertible notes, and more recently through the sale of American Depository Shares in connection with the September 2020 IPO and its $ 154.8 million May 2021 follow-on offering, including the underwriters’ exercise of their over-allotment option.
−Removed: On October 8, 2021, the Company entered into a Sales Agreement with Cowen and Company, LLC (“Cowen”), under which the Company may issue and sell from time to time up to $ 150.0 million of its ADSs, each representing one ordinary share, through Cowen as the sales agent.
−Removed: Sales of our ADSs, if any, will be made at market prices.
−Removed: We have not yet sold any ADSs under this at-the-market offering.
−Removed: The Company has incurred recurring losses since its inception, including net losses of $ 71.7 million and $ 60.3 million for the year ended December 31, 2021 and 2020, respectively.
+Added: The Company has funded its operations primarily with proceeds from the sale of its convertible preferred shares, the issuance of convertible notes, and more recently through the sale of American Depository Shares, or ADSs, in connection with the Company’s initial public offering, or the IPO, in September 2020, and its $ 154.8 million May 2021 follow-on offering.
+Added: On October 8, 2021, the Company entered into a Sales Agreement with Cowen and Company, LLC, or Cowen, under which the Company may issue and sell from time to time up to $ 150.0 million of its ADSs, each representing one ordinary share, through Cowen as the sales agent.
+Added: Sales of the Company’s ADSs, if any, will be made at market prices.
+Added: On December 14, 2022, under our at-the-market offering we sold 44,416 ADSs at $ 10.53 per ADS.
+Added: The Company has incurred recurring losses since its inception, including net losses of $ 91.5 million and $ 71.7 million for the years ended December 31, 2022 and 2021, respectively.
In addition, as of December 31, 2022, the Company had an accumulated deficit of $ 261.1 million.
The Company expects to continue to generate operating losses for the foreseeable future.
−Removed: The future viability of the Company is dependent on its ability to raise additional capital to finance its operations.
+Added: The Company believes the cash and cash equivalents on hand as of December 31, 2022 of $ 143.2 million will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next twelve months, including progressing our Phase 3 clinical program, our Phase 2 studies in anorexia nervosa and PTSD and costs associated with operating as a public company.
+Added: The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business.
+Added: We will need substantial additional funding to comple te the development and commercialization of our Phase 3 clinical program, and our Phase 2 studies in anorexia nervosa and PTSD.
The Company’s inability to raise capital as and when needed could have a negative impact on its financial condition and ability to pursue its business strategies.
There can be no assurance that the current operating plan will be achieved or that additional funding will be available on terms acceptable to the Company, or at all.
−Removed: The Company believes the cash and cash equivalents on hand as of December 31, 2021 of $ 273.2 million will be sufficient to fund its operating expenses and capital expenditure requirements into 2024.
−Removed: The Company continues to assess its business plans and the impact which the ongoing COVID-19 pandemic may have on its ability to advance the development and manufacturing of COMP360 as a result of adverse impacts on the research sites, service providers, vendors, or suppliers on whom it relies, or to raise further financing to support the development of its investigational COMP360 psilocybin therapy.
−Removed: No assurances can be given that this analysis will enable the Company to avoid any future impact from the ongoing COVID-19 pandemic or the emergence of new variants, including downturns in business sentiment generally or in its sector in particular.
−Removed: The Company cannot currently predict the scope and severity of any future potential business shutdowns or disruptions, but if the Company or any of the third parties on whom it relies or with whom the Company conducts business were to experience additional shutdowns or other business disruptions, the Company’s ability to conduct its business in the manner and on the timelines presently planned could be materially and adversely impacted.
+Added: The future viability of the Company is dependent on its ability to raise additional capital to finance its operations.
+Added: The Company may raise additional capital through a combination of equity offerings, debt financings, collaborations, and other strategic transactions, including marketing, distribution or licensing arrangements.
+Added: There can be no assurance that additional funding will be available on terms acceptable to the Company, on a timely basis or at all.
+Added: The failure of the Company to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the Company’s business, results of operations, and financial conditions.
+Added: The COVID-19 pandemic and policies and regulations implemented by governments in response to the COVID-19 pandemic, most of which have been lifted, have had a significant impact, both directly and indirectly, on global businesses and commerce.
+Added: For example, although restrictions in the United Kingdom and the United States have generally been lifted, additional indirect effects such as worker shortages and supply chain constraints continue to impact segments of the economy.
+Added: The future extent of the impact of the COVID-19 pandemic on our preclinical studies or clinical trial operations, our supply chain and manufacturing and our office-based business operations or any of the third parties on whom it relies or with whom the Company conducts business, such as CROs or CMOs, will depend on future developments, which remain highly uncertain and cannot be predicted with confidence, such as the duration of the pandemic, the emergence of additional or more infectious variants, or the effectiveness of actions to contain and treat coronavirus.
Summary of Significant Accounting Policies
3 unchanged sentences
The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.
−Removed: All intercompany balances and transactions have been eliminated in consolidation.
+Added: All intercompany balances and transactions have been eliminated on consolidation.
Use of Estimates
1 unchanged sentence
GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting periods.
−Removed: Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the prepayment and accrual for research and development expenses, discount rates for leases, the fair value of ordinary shares before IPO, share-based compensation, measurement of the fair value of the Company’s convertible notes and the research and development tax credit.
+Added: Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the prepayment and accrual for research and development expenses, share-based compensation and the research and development tax credit.
Estimates are periodically reviewed in light of changes in circumstances, facts and experience.
3 unchanged sentences
The Company considers all highly liquid investments that have maturities of three months or less when acquired to be cash equivalents.
−Removed: The Company does not currently have any cash equivalents.
+Added: The Company does not currently have any material cash equivalents.
Restricted Cash
1 unchanged sentence
The investment does not have readily determinable fair value and it is carried at cost, less impairment, adjusted for subsequent changes to estimated fair value up to the original cost, in circumstances where the Company does not have the ability to exercise significant influence or control over the operating and financial policies of the investee.
−Removed: Fair Value of Financial Instruments
−Removed: Certain liabilities of the Company are carried at fair value under U.S.
+Added: Fair Value Measurements
+Added: Certain assets and liabilities of the Company are carried at fair value under U.S.
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.
−Removed: Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:
+Added: Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the inputs for the first two are considered observable and the inputs for the last are considered unobservable:
• Level 1—Quoted prices in active markets for identical assets or liabilities.
1 unchanged sentence
• Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques
+Added: The carrying amounts reflected in the consolidated balance sheets for the Company’s cash and cash equivalents, restricted cash, accounts payable and accrued expenses approximate fair value because of the short-term nature of these instruments.
The Company's convertible notes issued prior to IPO were classified within Level 3 of the fair value hierarchy because their fair values were estimated by utilizing valuation models and significant unobservable inputs.
−Removed: The convertible notes were valued using a scenario-based discounted cash flow analysis.
+Added: The convertible notes were
+Added: valued using a scenario-based discounted cash flow analysis.
Two primary scenarios were considered and probability weighted to arrive at the valuation conclusion for each convertible note.
11 unchanged sentences
The Company places cash and cash equivalents in established financial institutions.
−Removed: The Company has no significant off-balance-
−Removed: sheet risk or concentration of credit risk, such as foreign exchange contracts, options contracts, or other foreign hedging arrangements.
+Added: The Company has no significant off-balance-sheet risk or concentration of credit risk, such as foreign exchange contracts, options contracts, or other foreign hedging arrangements.
Property and Equipment
14 unchanged sentences
Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker in deciding how to allocate resources and assess performance.
−Removed: The Company and the Company’s chief operating decision maker, the Company’s Chief Executive Officer, views the Company’s operations and manages its business as a single operating segment;
+Added: The Company and the Company’s chief operating decision maker, the Company’s Chief Executive Officer, view the Company’s operations and manage its business as a single operating segment;
however, the Company operates in two geographic regions:
−Removed: the UK and the United States.
+Added: the United Kingdom, or UK, and the United States.
The Company’s fixed assets are primarily located in the UK.
5 unchanged sentences
The Company has entered into various research and development-related contracts with research institutions and other companies.
−Removed: These agreements are generally cancelable, and related payments are recorded as research and development expenses as incurred.
+Added: These agreements are generally cancellable, and related payments are recorded as research and development expenses as incurred.
The Company records prepayments and accruals for estimated ongoing research costs and receives updated estimates of costs and amounts owed on a monthly basis from its third-party service providers.
−Removed: When evaluating the adequacy of the prepayments and accrued liabilities, the Company analyzes progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted cost estimates from third-party service providers.
−Removed: Estimates are made in determining the prepaid and accrued balances at the end of any reporting period.
+Added: When evaluating the adequacy of the prepayments and accruals, the Company analyzes progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted cost estimates from third-party service providers.
+Added: Estimates are made in determining the prepaid and accrued expense balances at the end of any reporting period.
Actual results could differ from the Company’s estimates.
2 unchanged sentences
The Company accounts for all share-based payment awards granted to employees and non-employees as share-based compensation expense at fair value.
−Removed: The Company grants equity awards under its share-based compensation programs, which may include share options and restricted ordinary shares.
−Removed: The measurement date for employee and non-employee awards is the date of grant, and share-based compensation costs are recognized as expense over the requisite service period, which is the
−Removed: vesting period, on a straight-line basis.
+Added: The Company grants equity awards under its share-based compensation programs, which may include share options and restricted stock units.
+Added: The measurement date for employee and non-employee awards is the date of grant, and share-based compensation costs are recognized as an expense over the requisite service period, which is the vesting period, on a straight-line basis.
Share-based compensation expense is classified in the accompanying consolidated statements of operations and comprehensive loss based on the function to which the related services are provided.
1 unchanged sentence
Forfeitures are recorded as they occur.
−Removed: On October 1, 2021, we launched the Share Incentive Plan (the “SIP”) and Employee Share Purchase Plan (the “ESPP”), through which employees can purchase shares at a discounted price.
−Removed: We estimated the fair value of stock options and shares to be issued under the SIP and ESPP using the Black-Scholes option-pricing model on the date of grant.
+Added: On October 1, 2021, the Company launched the Share Incentive Plan, or the SIP, and Employee Share Purchase Plan, or the ESPP, through which employees can purchase shares at a discounted price.
+Added: The Company estimated the fair value of stock options and shares to be issued under the SIP and ESPP using the Black-Scholes option-pricing model on the date of grant.
The fair value of shares to be issued under these plans are recognized and amortized on a straight-line basis over the purchase period, which is generally six months.
8 unchanged sentences
The expected term of the Company’s share options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options.
+Added: The “simplified” method was determined to be appropriate as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its equity shares have been publicly traded.
Risk-free interest rate .
4 unchanged sentences
Fair value of ordinary shares.
−Removed: Given the absence of an active market for the Company’s ordinary shares prior to the IPO, the Company and the Board, the members of which the Company believes have extensive business, finance, and venture capital experience, were required to estimate the fair value of the Company’s ordinary shares at the time of each grant of a stock-based award.
+Added: Given the absence of an active market for the Company’s ordinary shares prior to the IPO, the Company and the board of directors of the Company, the members of which the Company believes have extensive business, finance, and venture capital experience, were required to estimate the fair value of the Company’s ordinary shares at
+Added: the time of each grant of a stock-based award prior to the IPO.
The grant date fair value of restricted ordinary shares and share options were calculated based on the grant date fair value of the underlying ordinary shares.
1 unchanged sentence
The Company’s valuations of ordinary shares were prepared using a market approach, based on precedent transactions in the shares, to estimate the Company’s total equity value using an option-pricing method, or OPM.
−Removed: After IPO, the fair value of ordinary shares is determined by reference to the closing price of ADSs on the Nasdaq Global Select Market on the day prior to the grant.
−Removed: The OPM method derives an equity value such that the value indicated for ordinary shares is consistent with the investment price, and it provides an allocation of this equity value to each of the Company’s securities.
+Added: After the Company’s IPO, the fair value of ordinary shares is determined by reference to the closing price of ADSs on the Nasdaq Global Select Market on the day prior to or day of the grant.
+Added: The OPM derives an equity value such that the value indicated for ordinary shares is consistent with the investment price, and it provides an allocation of this equity value to each of the Company’s securities.
The OPM treats the various classes of ordinary shares as call options on the total equity value of a company, with exercise prices based on the value thresholds at which the allocation among the various holders of a company’s securities changes.
4 unchanged sentences
2016-02, Leases (Topic 842), as amended, using the modified retrospective method and utilizing the effective date as its date of initial application, with prior periods presented in accordance with previous guidance under ASC 840, Leases, or ASC 840.
+Added: The Company has elected to apply the package of three expedients to all of its leases requiring (1) no reassessment of whether any expired or existing contracts are or contain leases, (2) the lease classification of any expired or existing leases, or (3) the capitalization of initial direct costs for any existing leases.
+Added: Adoption of this standard resulted in the recording of operating lease right-of-use assets and current operating lease liabilities of $ 1.0 million, on the Company’s balance sheet on the effective date.
+Added: The adoption of the standard did not have a material effect on the Company’s statements of operations and comprehensive loss, statements of cash flows or accumulated deficit.
+Added: Refer to Note 14 for right-of-use assets and liabilities recorded during the periods ended December 31, 2022 and 2021 respectively.
At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement.
1 unchanged sentence
Entities may elect not to separate lease and non-lease components.
−Removed: The Company has elected to
−Removed: account for lease and non-lease components together as a single lease component for all underlying assets and to allocate all the contract consideration to the lease component only.
+Added: The Company has elected to account for lease and non-lease components together as a single lease component for all underlying assets and to allocate all the contract consideration to the lease component only.
All the Company’s leases are classified as operating leases.
4 unchanged sentences
As the Company does not have a rating agency-based credit rating, quotes were obtained from lenders to establish an estimated secured rate to borrow based on Company and market-based factors as of the respective lease measurement dates.
−Removed: The Company has elected not to recognize leases with an original term of one year or less on the balance sheet.
+Added: The Company has elected not to recognize leases with an original term of one year or less on the balance sheets.
The Company typically only includes the non-cancelable lease term in its assessment of a lease arrangement unless there is an option to extend the lease that is reasonably certain of exercise.
−Removed: Prospectively, the Company will adjust the right-of-use assets for straight-line rent expense or any incentives received and remeasure the lease liability at the net present value using the same incremental borrowing rate that was in effect as of the lease commencement or transition date.
+Added: The Company adjusts the right-of-use assets for straight-line rent expense or any incentives received and remeasure the lease liability at the net present value using the same incremental borrowing rate that was in effect as of the lease commencement or transition date.
Operating lease costs are recognized on a straight-line basis over the lease term, and they are categorized within research and development and general and administrative expenses in the consolidated statements of operations and comprehensive loss.
5 unchanged sentences
Exchange gains or losses arising from foreign currency transactions are included in other income (expense), net in the consolidated statements of operations and comprehensive loss.
−Removed: The Company recorded foreign exchange gains of approximately $ 2.0 million and foreign exchange losses of approximately $ 11.7 million for the years ended December 31, 2021 and 2020, respectively.
−Removed: These gains and losses arise from US dollars which are held in a financial institution in one of our UK subsidiaries that has a functional currency of Pound Sterling.
+Added: The Company recorded foreign exchange gains of approximately $ 0.8 million and $ 2.0 million for the years ended December 31, 2022 and 2021, respectively.
+Added: These gains arise from U.S.
+Added: dollars which are held in a financial institution in one of our UK subsidiaries that has a functional currency of Pound Sterling.
For financial reporting purposes, the consolidated financial statements of the Company have been presented in the U.S.
1 unchanged sentence
The financial statements of entities are translated from their functional currency into the reporting currency as follows:
−Removed: assets and liabilities are translated at the exchange rates at the balance sheet dates, expenses and other income (expense), net are translated at the average exchange rates and shareholders’ equity (deficit) is translated based on historical exchange rates.
−Removed: Translation adjustments are not included in determining net loss but are included as a foreign exchange adjustment to other comprehensive income, a component of shareholders’ equity (deficit).
+Added: assets and liabilities are translated at the exchange rates at the balance sheet dates, expenses and other income (expense), net are translated at the average exchange rates for the periods presented and shareholders’ equity is translated based on historical exchange rates.
+Added: Translation adjustments are not included in determining net loss but are included as a foreign exchange adjustment to other comprehensive income, a component of shareholders’ equity.
+Added: In December 2019, the FASB issued Accounting Standard Update, or ASU, 2019-12, “Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740),” or ASU 740, which simplifies the accounting for income taxes.
+Added: The new guidance removes certain exceptions to the general principles in ASC 740 such as recognizing deferred taxes for equity investments, the incremental approach to performing intra-period tax allocation and calculating income taxes in interim periods.
+Added: The standard also simplifies accounting for income taxes under U.S.
+Added: GAAP by clarifying and amending existing guidance, including the recognition of deferred taxes for goodwill, the allocation of taxes to members of a consolidated group and requiring that an entity reflect the effect of enacted changes in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date.
+Added: This guidance is effective for annual periods beginning after December 15, 2020, and interim periods thereafter;
+Added: however, early adoption is permitted.
+Added: The Company adopted this ASU as of January 1, 2021 and it has had no material impact on the consolidated financial statements.
The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in its tax returns.
−Removed: Deferred tax assets and liabilities are determined on the basis of the differences between the consolidated financial statements and tax basis of assets and liabilities substantively enacted tax rates in effect for the year in which the differences are expected to reverse.
+Added: Deferred tax assets and liabilities are determined based on the difference between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
Changes in deferred tax assets and liabilities are recorded in the provision for income taxes.
4 unchanged sentences
If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed as the amount of benefit to recognize in the consolidated financial statements.
−Removed: The amount of benefits that may be used is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement.
−Removed: The provision for income taxes includes the effects of any resulting tax reserves, or
−Removed: unrecognized tax benefits, that are considered appropriate, as well as the related net interest and penalties.
−Removed: As of December 31, 2021 and 2020, the Company has not identified any uncertain tax positions.
+Added: The amount of benefit that may be used is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement.
+Added: The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate, as well as the related net interest and penalties.
+Added: As of December 31, 2022 and 2021, the Company has not identified any material uncertain tax positions.
The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statements of operations and comprehensive loss.
2 unchanged sentences
As a company that carries out extensive research and development activities, the Company benefits from the UK research and development tax credit regime under the scheme for small or medium-sized enterprises, or SME.
−Removed: Under the SME regime, the Company is able to surrender some of its trading losses that arise from qualifying research and development activities for a cash rebate of up to 33.35 % of such qualifying research and development expenditure.
+Added: Under the SME regime, the Company is able to surrender some of its trading losses that arise from qualifying research and development activities for a
+Added: cash rebate of up to 33.35 % of such qualifying research and development expenditure.
The Company meets the conditions of the SME regime.
4 unchanged sentences
Due to the nature of the business, the Company has generated losses since inception.
−Removed: The benefit from research and development, or R&D, tax credits is recognized in the consolidated statements of operations and comprehensive loss as a component of other income, net, and represents the sum of the research and development tax credits recoverable in the UK.
+Added: The benefit from research and development, or R&D, tax credits is recognized in the consolidated statements of operations and comprehensive loss as a component of other income (expense), net, and represents the sum of the research and development tax credits recoverable in the UK.
The UK research and development tax credit is fully refundable to the Company and is not dependent on current or future taxable income.
2 unchanged sentences
The Company may not be able to continue to claim research and development tax credits under the SME regime in the future because it may no longer qualify as a small or medium-sized company.
−Removed: Further, changes to the EU State Aid cap to limit the total aid claimable in respect of a given project to € 7.5 million may impact the Company's ability to claim R&D tax credits in future.
+Added: In addition, the EU State Aid cap limits the total aid claimable in respect of a given project to € 7.5 million which may impact the Company's ability to claim R&D tax credits in future.
+Added: Further, the U.K.
+Added: Finance Act of 2021 introduced a cap on credit claims under the SME Program in excess of £ 20,000 with effect from April 2021 by reference to, broadly, three times the total Pay As You Earn, or PAYE, and National Insurance Contributions, or NICs, liability of the company, subject to an exception which prevents the cap from applying.
+Added: That exception requires the company to be creating, taking steps to create or managing intellectual property, as well as having qualifying research and development expenditure in respect of connected parties, which does not exceed 15 % of the total claimed.
+Added: If such exception does not apply, this could restrict the amount of payable credit that we claim.
+Added: In the Finance Act 2022-23, the rates for the SME R&D regime were reduced such that for expenditure from April 1, 2023 the effective credit will reduce from 33.4p/£ to 18.6p/£.
Unsurrendered UK losses may be carried forward indefinitely to be offset against future taxable profits, subject to numerous utilization criteria and restrictions.
1 unchanged sentence
Comprehensive Loss
−Removed: Comprehensive loss includes net loss as well as other changes in shareholders’ equity (deficit) that result from transactions and economic events other than those with shareholders.
−Removed: For the years ended December 31, 2021 and 2020, the component of accumulated other comprehensive loss is foreign currency translation adjustment.
+Added: Comprehensive loss includes net loss as well as other changes in shareholders’ equity that result from transactions and economic events other than those with shareholders.
+Added: For the years ended December 31, 2022 and 2021, the only component of accumulated other comprehensive loss is foreign currency translation adjustment.
Net Loss per Share
The Company has reported losses since inception and has computed basic net loss per share attributable to ordinary shareholders by dividing net loss attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding for the period, without consideration for potentially dilutive securities.
−Removed: The Company computes diluted net loss per ordinary share after giving consideration to all potentially dilutive ordinary shares, including unvested ordinary shares, share options, convertible preferred, Series A convertible preferred shares and Series B convertible preferred shares, outstanding during the period determined using the treasury-stock and if-converted methods, except where the effect of including such securities would be antidilutive.
+Added: The Company computes diluted net loss per ordinary share after giving consideration to all potentially dilutive ordinary shares, including unvested restricted shares and outstanding options.
Because the Company has reported net losses since inception, these potential ordinary shares have been anti-dilutive and basic and diluted loss per share were the same for all periods presented.
−Removed: Recently Adopted Accounting Pronouncements
−Removed: In August 2018, the FASB issued ASU 2018-13, Changes to the Disclosure Requirements for Fair Value Measurement, or ASU 2018-13, which amends changes in unrealized gains and losses, the range and weighted average of significant
−Removed: unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty which should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption.
−Removed: ASU 2018-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those periods.
−Removed: Early application is permitted.
−Removed: The Company adopted this ASU as of January 1, 2020 and it has no material impact on the consolidated financial statements.
−Removed: In August 2018, the FASB issued ASU No.
−Removed: 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.
−Removed: The new standard will align the requirements for capitalizing implementation costs for hosting arrangements (services) with costs for internal-use software (assets).
−Removed: As a result, certain implementation costs incurred in hosting arrangements will be deferred and amortized.
−Removed: The new standard was effective for the Company on January 1, 2020.
−Removed: The Company adopted this ASU as of January 1, 2020 and an immaterial amount of implementation costs were capitalized within other assets as of December 31, 2020.
−Removed: In February 2016, the FASB issued ASU No.
−Removed: 2016-02, Leases (Topic 842), as subsequently amended, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors), and replaces the existing guidance in ASC 840.
−Removed: The FASB has issued several updates to the standard which:
−Removed: (i) clarify how to apply certain aspects of the new standard;
−Removed: (ii) provide an additional transition method for adoption of the new standard;
−Removed: (iii) provide a practical expedient for certain lessor accounting;
−Removed: and (iv) amend certain narrow aspects of the guidance.
−Removed: The new standard requires the identification and classification of arrangements that are or contain a lease and requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee.
−Removed: This classification will determine the recognition pattern of lease expense over the term of the lease.
−Removed: In addition, a lessee is required to record (i) a right-of-use asset and a lease liability on its balance sheet for all leases with accounting lease terms of more than 12 months regardless of whether it is an operating or finance lease and (ii) lease expense in its consolidated statements of operations and comprehensive loss for operating leases and amortization and interest expense in its consolidated statements of operations and comprehensive loss for financing leases.
−Removed: Leases with a term of 12 months or less may be accounted for similar to existing guidance for operating leases under ASC 840.
−Removed: In July 2018, the FASB issued ASU No.
−Removed: 2018-11, Leases (Topic 842), which added an optional transition method that allows companies to adopt the standard as of the beginning of the year of adoption as opposed to the earliest comparative period presented.
−Removed: This guidance is effective for Emerging Growth Companies for annual periods beginning after December 15, 2021, including interim periods within that fiscal year.
−Removed: Early adoption is permitted.
−Removed: The Company lost its Emerging Growth Company status on December 31, 2021 and has adopted Topic 842 during the year-ended December 31, 2021, with an effective adoption date of January 1, 2021.
−Removed: Interim periods previously issued for fiscal year 2021 were reported under the legacy leasing guidance of ASC 840.
−Removed: The Company has elected to adopt ASC 842 by utilizing the effective date method, which resulted in a cumulative-effect adjustment to the Company’s consolidated balance sheets at January 1, 2021 .
−Removed: As a result, prior periods are presented in accordance with the previous guidance in ASC 840.
−Removed: The Company has elected to apply the package of three expedients to all of its leases requiring (1) no reassessment of whether any expired or existing contracts are or contain leases, (2) the lease classification of any expired or existing leases, (3) or the capitalization of initial direct costs for any existing leases.
−Removed: Adoption of this standard resulted in the recording of operating lease right-of-use assets and current operating lease liabilities of $ 1.0 million, on the Company’s balance sheet on the effective date.
−Removed: The adoption of the standard did not have a material effect on the Company’s statements of operations and comprehensive loss, statements of cash flows or accumulated deficit.
−Removed: Refer to Note 14 for right-of-use assets and liabilities recorded during the year ended December 31, 2021.
−Removed: In December 2019, the Financial Accounting Standard Board, or the FASB, issued Accounting Standard Update, or ASU, 2019-12, “Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740),” or ASU 740, which simplifies the accounting for income taxes.
−Removed: The new guidance removes certain exceptions to the general principles in ASC 740 such as recognizing deferred taxes for equity investments, the incremental approach to performing intra-period tax allocation and calculating income taxes in interim periods.
−Removed: The standard also simplifies accounting for income taxes under U.S.
−Removed: GAAP by clarifying and amending existing guidance, including the recognition of deferred taxes for goodwill, the allocation of taxes to members of a consolidated group and requiring that an entity reflect the effect of enacted changes in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date.
−Removed: This guidance is effective for annual periods beginning after December 15, 2020, and interim periods thereafter;
−Removed: however, early adoption is permitted.
−Removed: The Company adopted this ASU as of January 1, 2021 and it has had no material impact on the consolidated financial statements.
+Added: The Company enters into foreign currency contracts to reduce the risk that our cash flows and earnings will be adversely affected by foreign currency exchange rate fluctuations.
+Added: The Company does not enter into foreign currency contracts for speculative purposes.
+Added: The Company recognizes derivative instruments, which do not qualify for hedge accounting, as either assets or liabilities on the balance sheet at fair value.
+Added: The Company records changes in the fair value (gains or losses) of the derivatives in the accompanying consolidated statement of operations and comprehensive loss as other income (expense), net.
+Added: Recently Issued Accounting Pronouncements
+Added: The Company reviewed recently issued accounting pronouncements and determined there will not be an impact to our financial position and results of operations.
Fair Value Measurements
There are no financial instruments measured at fair value on a recurring basis as of December 31, 2022 and 2021.
−Removed: Management believes that the carrying amounts of the Company’s consolidated financial instruments, including accounts payable and accrued expenses approximate fair value due to the short-term nature of those instruments.
+Added: Management believes that the carrying amounts of the Company’s consolidated financial instruments, including cash and cash equivalents, restricted cash, accounts payable and accrued expenses approximate fair value due to the short-term nature of those instruments.
The Company elected the fair value option to account for its convertible notes issued during 2019 (See Note 8).
The fair value of the convertible notes was determined based on significant inputs not observable in the market, which represents a level 3 measurement within the fair value hierarchy.
−Removed: The Company recorded a loss of $ 1.8 million and $ 1.1 million for changes in the fair value of the convertible notes in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2020 and 2019, respectively.
+Added: The Company recorded a loss of $ 1.8 million for changes in the fair value of the convertible notes in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2020.
The following table provides a roll forward of the aggregate fair value of the Company’s convertible notes, for which fair value was determined using level 3 inputs (in thousands):
1 unchanged sentence
Balance as of December 31, 2019 $ 21,089
−Removed: Issuance of convertible notes 18,434
Change in fair value 1,771
−Removed: Exchange difference 1,516
−Removed: Balance as of December 31, 2019 21,089
−Removed: Change in fair value 1,771
Settlement of convertible notes ( 21,614 )
1 unchanged sentence
Balance as of December 31, 2020, 2021 and 2022 $ —
−Removed: On March 6, 2020, the Company made a strategic investment of $ 0.5 million to acquire an 8 % (on a fully diluted basis) shareholding in Delix Therapeutics, Inc., a drug discovery and development company researching novel small molecules for use in CNS indications.
+Added: On March 6, 2020, the Company made a strategic investment of $ 0.5 million to acquire an 8 % (on a fully diluted basis) shareholding in Delix Therapeutics, Inc., a drug discovery and development company researching novel small molecules for use in Central Nervous System, or CNS, indications.
The Company’s investment in Delix Therapeutics, Inc.
21 unchanged sentences
accumulated depreciation ( 530 ) ( 358 )
−Removed: Depreciation and amortization expense were $ 0.2 million for the year ended December 31, 2021 and $ 0.1 million for the years ended December 31 2020 and 2019.
+Added: Depreciation and amortization expenses were $ 0.3 million, $ 0.2 million and $ 0.1 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Accrued Expenses and Other Liabilities
4 unchanged sentences
Payroll tax payable 167 593
−Removed: Income taxes payable — 243
Other liabilities 656 268
1 unchanged sentence
Convertible Notes
−Removed: On August 28, 2019, the Company entered into convertible note agreements for a total additional principal amount of $ 18.4 million (£ 15.0 million).
−Removed: The convertible notes issued in 2019 are collectively referred to as the “2019 Convertible Notes”.
−Removed: The 2019 Convertible Notes bore interest at 3 % per annum and were payable concurrently with repayment of the principal amount.
−Removed: No repayment of principal or interest was due until maturity, which occurred 12 months after issuance of the 2019 Convertible Notes.
−Removed: Under the agreement, the 2019 Convertible Notes automatically converted upon a Qualified Financing and Non-Qualified Financing securities upon (i) the completion of a Qualified Financing;
−Removed: or (ii) noteholder majority had approved a Non-Qualified Financing constituting a conversion event, at 15 % discount of the per share price of the securities sold in either a Qualified Financing or Non-Qualified Financing.
On April 17, 2020, upon the Series B convertible preferred share financing, which constituted a Qualified Financing, the outstanding principal of the convertible notes of $ 18.4 million (£ 15.0 million) automatically converted into 1,723,263 Series B convertible preferred shares, and there was no outstanding balance as of December 31, 2020.
2 unchanged sentences
Changes in fair value were recognized as a component of other income (expense), net in the consolidated statements of operations and comprehensive loss.
−Removed: The Company recognized losses in the consolidated statements of operations and comprehensive loss of $ 1.8 million and $ 1.1 million as change in fair value of the convertible notes during the years ended December 31, 2020 and 2019.
−Removed: There are no convertible notes outstanding in the year ended December 31, 2021.
+Added: The Company recognized losses in the consolidated statements of operations and comprehensive loss of $ 1.8 million as change in fair value of the convertible notes during the year ended December 31, 2020.
+Added: There are no convertible notes outstanding in the years ended December 31, 2022 or 2021.
Convertible Preferred Shares
−Removed: Prior to the IPO, the Company had issued convertible preferred shares, Series A convertible preferred shares and Series B convertible preferred shares.
−Removed: In August 2017, the Company entered into a subscription and shareholders agreement, or the 2017 Agreements, pursuant to which the Company issued an aggregate of 2,650,980 convertible preferred shares for total proceeds of approximately $ 3.9 million and incurred issuance costs of $ 0.1 million, recorded as a reduction to convertible preferred shares.
−Removed: The 2017 Agreements were amended and restated in September 2018, as so amended, the Amended 2018 Agreements.
−Removed: Pursuant to the Amended 2018 Agreements, the Company issued 7,131,525 Series A convertible preferred shares for an aggregate purchase price of $ 35.4 million and incurred issuance costs of $ 0.3 million, recorded as a reduction to convertible preferred shares.
On April 17, 2020, the Company closed a Series B funding round to secure an additional $ 80.0 million of funding, including the conversion of the 2019 Convertible Notes (see Note 8), through the issuance of Series B convertible preferred shares.
10 unchanged sentences
The holders of the Company’s convertible preferred shares, Series A convertible preferred shares and Series B convertible preferred shares had certain voting, dividend, and redemption rights, as well as liquidation preferences and conversion privileges.
−Removed: All rights, preferences, and privileges associated with the convertible preferred shares, Series A convertible preferred shares and Series B convertible preferred shares were terminated at the time of the Company’s IPO in conjunction with the conversion of all outstanding shares of convertible preferred shares, Series A convertible preferred shares and Series B convertible preferred shares into ordinary shares.
+Added: All rights, preferences, and privileges associated with the convertible preferred shares, Series A convertible preferred shares and Series B convertible preferred shares were terminated at the time of the Company’s IPO in conjunction with the conversion of all outstanding convertible preferred shares, Series A convertible preferred shares and Series B convertible preferred shares into ordinary shares.
Ordinary Shares
−Removed: In August 2017, the Company issued 10,551,166 ordinary shares for services rendered to the Company at a nominal value of £ 0.008 per share.
−Removed: In connection with the issuance of convertible preferred shares in August 2017, vesting conditions were placed on the 10,551,166 shares.
−Removed: These shares vested as follows:
−Removed: 25 % of the shares held by certain of the founders vested on August 17, 2017;
−Removed: 25 % of the shares vested on August 17, 2018;
−Removed: and 50 % of shares vested in twenty-four equal monthly installments from August 17, 2018 through August 17, 2020.
−Removed: The fair value of the ordinary shares issued to certain of the founders in excess of the consideration initially paid was recognized as share-based compensation over the vesting period.
−Removed: In October 2019, the Company issued 102,214 and 99,049 ordinary shares to a non-employee and an employee, with the vesting period of three and four years , respectively.
−Removed: The employee left the Company in July 2020 and 63,972 ordinary shares were forfeited and repurchased by the Company.
On September 22, 2020, the Company closed its IPO of ADSs representing its ordinary shares and issued and sold 8,625,000 ADSs at a public offering price of $ 17.00 per ADS, resulting in net proceeds of approximately $ 132.8 million after deducting underwriting fees and offering costs.
3 unchanged sentences
This capital raise resulted in net proceeds of approximately $ 154.8 million after deducting underwriting fees and offering costs.
−Removed: During the year ended December 31, 2021, the Company issued in total 1,476,936 ordinary shares to settle share options exercised by employees and non-employees, of which 232,227 ordinary shares related to options exercised in 2020, with subsequent share issuances in 2021.
−Removed: During the year ended December 31, 2021, 70,482 restricted share units vested, of which, 12,607 ordinary shares were issued in settlement of the vested restricted shares units on August 13, 2021.
−Removed: No ordinary shares were issued for the vested restricted share units of 57,875 in May, August and November 2021.
Each ordinary share entitles the holder to one vote on all matters submitted to a vote of the Company’s shareholders.
1 unchanged sentence
Through December 31, 2022, no cash dividends had been declared or paid by the Company.
+Added: On October 8, 2021, the Company entered into a Sales Agreement with Cowen and Company, LLC, or Cowen, under which the Company may issue and sell from time to time up to $ 150.0 million of its ADSs, each representing one ordinary share, through Cowen as the sales agent.
+Added: Sales of the Company’s ADSs, if any, will be made at market prices.
+Added: On December 14, 2022, under our at-the-market offering we sold 44,416 ADSs at $ 10.53 per ADS.
+Added: During the year ended December 31, 2021, the Company issued in total 1,476,936 ordinary shares to settle share options exercised by employees and non-employees, of which 232,227 ordinary shares related to options exercised in 2020, with subsequent share issuances in 2021.
+Added: During the year ended December 31, 2022, the Company issued in total 462,722 ordinary shares to settle share options exercised by employees and non-employees.
+Added: During the year ended December 31, 2021, a total of 70,482 restricted share units vested, of which 12,607 shares were vested and issued in settlement and 57,875 shares were vested but had not been issued at December 31, 2021.
+Added: During the year ended December 31, 2022, a total of 42,635 restricted share units vested, of which 24,747 shares were vested and issued in settlement and 17,888 shares were vested but had not been issued at December 31, 2022.
+Added: During 2022, a total of 82,622 shares were issued in settlement, of which 57,875 vested in 2021 and 24,747 vested in 2022.
+Added: During the years ended December 31, 2022 and 2021, the Company issued in total 22,160 and 0 shares under the employee share purchase plans.
Share-Based Compensation
2017 Equity Incentive Plan
−Removed: Under the Company’s shareholder and subscription agreements, the Company is authorized to issue restricted shares, restricted share units, as well as options, as incentives to its employees, non-employees and members of its board of directors.
−Removed: To the extent such incentives are in the form of share options, the options are granted pursuant to the terms of the 2017 Equity Incentive Plan, or the 2017 Plan.
+Added: Under the Company’s historical shareholder and subscription agreements, the Company was authorized to issue restricted shares, restricted share units, as well as options, as incentives to its employees, non-employees and members of its board of directors.
+Added: To the extent such incentives were in the form of share options, the options were granted pursuant to the terms of the 2017 Equity Incentive Plan, or the 2017 Plan.
In July 2019, the Company’s board of directors adopted the 2017 Plan.
−Removed: The 2017 Plan provides for the grant of Enterprise Management Incentive, or EMI, options, to its UK employees, for the grant of options to its U.S.
+Added: The 2017 Plan provided for the grant of Enterprise Management Incentive, or EMI, options, to its UK employees, for the grant of options to its U.S.
employees and non-employees of the Company.
−Removed: The 2017 Plan is administered by the board of directors.
−Removed: As of December 31, 2021, the Company was authorized under the shareholder agreements to issue a total of 13,601,246 ordinary shares, including shares underlying options granted pursuant to the 2017 Plan.
−Removed: Forfeitures are accounted for as they occur.
−Removed: As of December 31, 2021, there were 514,075 shares available for issuance as incentives to the Company’s employees and directors, which includes shares underlying options that may be granted from time to time subsequent to December 31, 2021 under the terms of the 2017 Plan.
−Removed: 12,607 ordinary shares were issued for 70,482 restricted share units that vested during the year ended December 31, 2021.
+Added: The 2017 Plan was administered by the board of directors.
Options granted under the 2017 Plan, typically vest over a three or four-year service period with 33.3 % and 25 % respectively, of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining years.
−Removed: Restricted share units granted under the 2017 Plan, typically vest over a four-year service period with 25 % of the award vesting on the first anniversary of the commencement date.
−Removed: The options granted by the Company prior to April 17, 2020 contain provisions that to the extent then outstanding, they will be subject to accelerated vesting upon the occurrence of a Sale, Asset Sale or listing of the Company's ordinary shares on any stock exchange, and any such unvested options accordingly became fully vested upon a Listing (as such term is defined in the 2017 Plan).
−Removed: 1,015,813 options granted to the President and Chief Business officer of the Company on May 19, 2020 became fully vested on August 17, 2020, resulting in the recognition of $ 9.5 million in share-based compensation expense, including $ 2.4 million in research and development expenses and $ 7.1 million in general and administrative expenses.
−Removed: The options granted before June 30, 2020 are subject to 100 % vesting upon the date of the listing of the Company's ordinary shares on any stock exchange.
−Removed: The options granted on June 30, 2020 are subject to 25 % vesting upon the earlier occurrence of (i) the one year anniversary of the date of grant, or (ii) the date of the listing of the Company's ordinary shares on any stock exchange.
−Removed: Upon completion of the IPO, 866,268 options vested due to the accelerated vesting and a total of $ 3.5 million was immediately recognized in share-based compensation expense, including $ 1.4 million in research and development expenses and $ 2.1 million in general and administrative expenses.
−Removed: The options granted on June 30, 2020 are subject to 25 % vesting upon the earlier occurrence of (i) the one year anniversary of the date of grant, or (ii) the date of the listing of the Company's ordinary shares on any stock exchange, followed by straight line vesting for three years for the remaining 75 % of the allocation until vested in full.
−Removed: The restricted share units granted on June 30, 2020 are subject to 25 % vesting upon the earlier of (i) the one year anniversary of the date of grant, or (ii) the first day following the six-month anniversary of the listing of the Company's
−Removed: ordinary shares on any stock exchange on which the closing price of the shares is 20 % higher than the listing price for at least five consecutive trading days.
Options granted under the 2017 Plan generally expire 10 years from the date of grant.
+Added: Restricted share units granted under the 2017 Plan typically vest over a four-year service period with 25 % of the award vesting on the first anniversary of the commencement date and quarterly thereafter.
+Added: The options granted on June 30, 2020 were subject to 25 % vesting upon the earlier occurrence of (i) the one year anniversary of the date of grant, or (ii) the date of the listing of the Company's ordinary shares on any stock exchange, followed by straight line vesting for three years for the remaining 75 % of the allocation until vested in full.
+Added: The restricted share units granted on June 30, 2020 were subject to 25 % vesting upon the earlier of (i) the one year anniversary of the date of grant, or (ii) the first day following the six-month anniversary of the listing of the Company's ordinary shares on any stock exchange on which the closing price of the shares is 20 % higher than the listing price for at least five consecutive trading days.
+Added: As of December 31, 2022, the Company was authorized to issue a total of 1,603,402 ordinary shares underlying outstanding options granted under the 2017 Plan prior to the IPO.
2020 Employee Share Purchase Plan
−Removed: The Company’s 2020 Employee Share Purchase Plan, or ESPP, was adopted by the Board in September 2020 and approved by shareholders in September 2020 and became effective upon the effectiveness of the Company’s Registration Statement on Form F-1 in connection with the IPO.
−Removed: The ESPP initially reserves and authorizes the issuance of up to a total of 340,053 ordinary shares to participating employees.
−Removed: The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2022 and each January 1 thereafter through January 1, 2022, by the lesser of (i) 1 % of the outstanding number of ordinary shares on the immediately preceding December 31 or (ii) 510,058 ordinary shares.
+Added: The Company’s 2020 Employee Share Purchase Plan, or the ESPP, was adopted by the Board in September 2020 and approved by shareholders in September 2020 and became effective upon the effectiveness of the Company’s Registration Statement on Form F-1 in connection with the IPO.
+Added: The ESPP initially reserved and authorized the issuance of up to a total of 340,053 ordinary shares to participating employees.
+Added: The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2022 and each January 1 thereafter through termination of the 2020 Plan, by the lesser of (i) 1 % of the outstanding number of ordinary shares on the immediately preceding December 31, (ii) 510,080 ordinary shares or (iii) such lesser number of ordinary shares as determined by the plan administrator.
The number of shares reserved under the ESPP is subject to change in the event of a share split, share dividend or other change in our capitalization.
−Removed: On October 1, 2021, the Company launched the Share Incentive Plan (the “SIP”) and the ESPP, through which employees can purchase shares at a discounted price.
+Added: On October 1, 2021, the Company launched the SIP and the ESPP, through which employees can purchase shares at a discounted price.
At the end of six months , shares will automatically be purchased at the lower of the opening and closing price of the shares for the saving period minus a 15 % discount.
2020 Share Option Plan
−Removed: In September 2020, the Company’s board of directors adopted, and the Company’s shareholders approved, the 2020 Share Option Plan, or (the “2020 Plan”), which became effective upon the effectiveness of the Company’s Registration Statement on Form F-1 in connection with the IPO.
+Added: In September 2020, the Company’s board of directors adopted, and the Company’s shareholders approved, the 2020 Share Option and Incentive Plan, or the 2020 Plan, which became effective upon the effectiveness of the Company’s Registration Statement on Form F-1 in connection with the IPO.
The 2020 Plan allows the compensation and leadership development committee to make equity-based and cash-based incentive awards to the Company’s officers, employees, directors and other key persons (including consultants).
−Removed: Options granted under the 2020 Plan generally expire 10 years from the date of grant and typically vest over a 4 year service period with 25 % of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining years.
+Added: Options granted under the 2020 Plan generally expire 10 years from the date of grant and typically vest over a 4 year service period with 25 % of the options vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining years.
The Company initially reserved 2,074,325 of its ordinary shares for the issuance of awards under the 2020 Plan.
−Removed: The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by up to 4 % of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by our compensation and leadership development committee.
+Added: The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by up to 4 % of the outstanding number of ordinary shares on the immediately
+Added: preceding December 31, or such lesser number of shares as determined by our compensation and leadership development committee.
This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization.
−Removed: The total number of ordinary shares that may be issued under the 2020 Plan was 2,074,325 shares as of December 31, 2021, of which 406,737 shares remained available for future grant.
+Added: The total number of ordinary shares that may be issued under the 2020 Plan is 3,755,119 shares as of December 31, 2022, of which 667,802 shares remained available for future grant.
+Added: The options granted in 2022 under the 2020 Plan to employees generally expire 10 years from the date of grant.
+Added: There are three potential vesting terms for the 2022 grants including:
+Added: (i) 25 % per year over four year service period, (ii) four year service period with 25 % of the vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining years;
+Added: and (iii) monthly vesting over four year service period.
During the years ended December 31, 2022, 2021 and 2020, the Company granted options to purchase 2,120,783 , 1,043,702 and 3,405,490 ordinary shares to employees and non-employees, respectively.
+Added: 2022 Inducement Option Award
+Added: On August 1, 2022, the Company granted to our new chief executive officer a non-qualified share option to purchase up to 600,000 ordinary shares as an inducement grant.
+Added: The non-qualified share option has a 10 year term and vests as to one-fourth on August 1, 2023 and as to the remaining three-fourths in equal monthly installments over the following 36 months.
+Added: The non-qualified share option has other terms that mirror those of non-qualified share options granted under the Company’s 2020 Plan and the Company’s standard form of non-qualified share option agreement.
Ordinary Shares
−Removed: A summary of the changes in the Company’s unvested ordinary shares during the year ended December 31, 2021 are as follows:
+Added: A summary of the changes in the Company’s unvested ordinary shares during the year ended December 31, 2022, 2021 and 2020 are as follows:
Number of Shares Weighted Average Grant Date Fair Value
Unvested and Outstanding as of December 31, 2020 13,757 $ 2.36
−Removed: Vested ( 1,829,786 ) 0.69
−Removed: Forfeited ( 63,972 ) 0.05
−Removed: Unvested and Outstanding as of December 31, 2020
+Added: Granted — $ —
Vested ( 13,757 ) $ 2.36
Forfeited — $ —
−Removed: Unvested and Outstanding as of December 31, 2021
−Removed: The total fair value of vested shares was less than $ 0.1 million and $ 1.3 million for the years ended December 31, 2021 and 2020, respectively.
+Added: Unvested and Outstanding as of December 31, 2022 and 2021 — $ —
+Added: The total fair value of vested shares was nil , less than $ 0.1 million and $ 1.3 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Restricted Share Units
−Removed: A summary of the changes in the Company’s unvested restricted share units during the year ended December 31, 2021 are as follows:
+Added: A summary of the changes in the Company’s unvested restricted share units during the years ended December 31, 2022, 2021 and 2020 are as follows:
Number of Shares Weighted Average Grant Date Fair Value
Unvested and Outstanding as of December 31, 2020 217,482 $ 10.19
−Removed: Granted 257,708 10.19
+Added: Vested ( 70,482 ) 10.19
Forfeited ( 31,860 ) 10.19
Unvested and Outstanding as of December 31, 2021 115,140 $ 10.19
−Removed: 217,482 10.19
+Added: Granted 202,830 13.52
Vested ( 42,635 ) 9.77
2 unchanged sentences
271,135 $ 12.23
−Removed: As of December 31, 2021 and 2020, there was $ 1.2 million and $ 2.0 million of unrecognized compensation cost related to unvested restricted share units, which is expected to be recognized over a weighted-average period of 2.5 years and 3.2 years, respectively.
+Added: As of December 31, 2022, 2021 and 2020, there was $ 2.6 million, $ 1.2 million and $ 2.0 million of unrecognized compensation cost related to unvested restricted share units, respectively, which is expected to be recognized over a weighted-average period of 2.95 years, 2.5 years and 3.2 years, respectively.
The exercise price of restricted share units is at a nominal value less than £ 0.01 per share.
Share Options
−Removed: The following table summarizes the Company’s share options activity for the year ended December 31, 2021:
+Added: The following table summarizes the Company’s share options activity for the years ended December 31, 2022, 2021 and 2020:
Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands)
7 unchanged sentences
Exercised ( 462,722 ) $ 0.75
−Removed: Forfeited ( 313,830 ) $ 22.45
+Added: Cancelled or forfeited ( 480,832 ) $ 11.09
Outstanding as of December 31, 2022
4 unchanged sentences
2,750,343 $ 17.31 8.99 $ 1,247
−Removed: During the year ended December 31, 2020, 429,929 share options were exercised, of which 232,227 share options were exercised by certain optionees with a total exercise price of less than $ 0.1 million.
−Removed: These ordinary shares were not issued to those optionees by December 31, 2020 and the amount received by the Company was recorded in the additional paid-in capital as at that date.
−Removed: The aggregate intrinsic value of options exercised during the years ended December 31, 2021 and 2020 was $ 47.4 million and $ 12.8 million, respectively.
−Removed: The weighted average exercise price of options granted to UK employees during the year ended December 31, 2020 was $ 7.17 per share.
−Removed: The weighted average exercise price of options granted to United States employees during the year ended December 31, 2020 was $ 5.17 per share.
−Removed: During the year ended December 31, 2021, there was no difference between the exercise price of UK employees and US employees if the options were granted on the same day.
−Removed: The weighted average exercise price of options granted to UK employees during the year ended December 31, 2019 was less than $ 0.01 per share.
−Removed: The weighted average exercise price of options granted to United States employees during the year ended December 31, 2019 was $ 1.39 per share.
+Added: The aggregate intrinsic value of options exercised during the years ended December 31, 2022, 2021 and 2020 was $ 5.5 million, $ 47.4 million and $ 12.8 million, respectively.
The aggregate intrinsic value of share options is calculated as the difference between the exercise price of the share options and the fair value of the Company’s ordinary shares for those share options that had exercise prices lower than the fair value of the Company’s ordinary shares.
−Removed: The weighted average grant-date fair value of share options granted was $ 21.35 , $ 9.83 and $ 1.88 per share during the years ended December 31, 2021, 2020 and 2019, respectively.
−Removed: As of December 31, 2021 and 2020, there was $ 27.4 million and $ 18.1 million of unrecognized compensation cost related to unvested share options, which is expected to be recognized over a weighted-average period of 3.1 years and 3.5 years, respectively.
+Added: The weighted average grant-date fair value of share options granted was $ 10 and $ 21.35 and $ 9.83 per share during the years ended December 31, 2022, 2021 and 2020, respectively.
+Added: As of December 31, 2022, 2021 and 2020, there was $ 30.4 million, $ 27.4 million and $ 18.1 million of unrecognized compensation cost related to unvested share options, which is expected to be recognized over a weighted-average period of 2.8 years, 3.1 years and 3.5 years respectively.
Share Option Valuation
2 unchanged sentences
2022 2021 2020
−Removed: Expected term (in years) 5.73 years 5.95 years 5.90 years
+Added: Expected option life (years) 5.95 years 5.73 years 5.95 years
Expected volatility 80.76 % 67.36 % 66.10 %
4 unchanged sentences
Share-based compensation expense recorded as research and development and general and administrative expenses is as follows (in thousands):
−Removed: Years Ended December 31,
+Added: Year Ended December 31,
2022 2021 2020
1 unchanged sentence
General and administrative 5,765 4,070 11,647
−Removed: $ 8,639 $ 17,983 $ 3,253
−Removed: In December 2021, the Company amended the initial share option contract with one employee.
−Removed: The amendment did not result in a modification and there was no impact on the total share-based compensation expenses recorded.
+Added: Total stock based compensation expense $ 13,123 $ 8,639 $ 17,983
Income (loss) before provision for income taxes consisted of the following (in thousands):
28 unchanged sentences
Deferred tax asset true-up 8 80 919
+Added: Return to Provision 1,580 ( 854 ) —
Equity Compensation ( 782 ) ( 8,302 ) —
8 unchanged sentences
Share-based compensation 9,332 6,232 3,128
+Added: Charitable contributions 33 — —
Total deferred tax assets 54,287 42,348 13,265
14 unchanged sentences
As of December 31, 2022, 2021 and 2020, the Company performed an evaluation to determine whether a valuation allowance was needed.
−Removed: The Company considered all available evidence, both positive and negative, which included the results of operations for the current and preceding years.
+Added: The Company considered all available evidence, both positive and negative, which included the results of operations for the current and
+Added: preceding years.
The Company determined that it was not possible to reasonably quantify future taxable income and determined that it is more likely than not that all of the deferred tax assets will not be realized.
−Removed: Accordingly, the Company
−Removed: maintained a full valuation allowance against its net UK deferred tax assets as of December 31, 2021, 2020 and 2019.
+Added: Accordingly, the Company maintained a full valuation allowance against its net UK deferred tax assets as of December 31, 2022, 2021 and 2020.
The deferred tax asset recognized relates entirely to the US entity.
17 unchanged sentences
Weighted-average number of ordinary shares used in net loss per share - basic and diluted 42,436,292 39,997,587 16,991,664
−Removed: 39,997,587 16,991,664 7,476,422
Net loss per share - basic and diluted $ ( 2.16 ) $ ( 1.79 ) $ ( 3.55 )
−Removed: The Company’s potentially dilutive securities, which include unvested ordinary shares, unvested restricted share units, convertible preferred shares, Series A convertible preferred shares, Series B convertible preferred shares and options granted, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share.
+Added: The Company’s potentially dilutive securities, which include unvested ordinary shares, unvested restricted share units, and options granted, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share.
Therefore, the weighted-average number of ordinary shares outstanding used to calculate both basic and diluted net loss per share attributable to ordinary shareholders is the same.
−Removed: The Company excluded the following potential ordinary shares, presented based on amounts outstanding at each year end, from the computation of diluted net loss per share attributable to
−Removed: ordinary shareholders for the years ended December 31, 2021, 2020 and 2019 because including them would have had an anti-dilutive effect:
+Added: The Company excluded the following potential ordinary shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to ordinary shareholders for the years ended December 31, 2022, 2021 and 2020 because including them would have had an anti-dilutive effect:
Year Ended December 31,
2022 2021 2020
−Removed: Unvested ordinary shares — 13,757 —
Unvested restricted share units 271,135 115,140 217,482
−Removed: Convertible preferred shares — — 2,650,980
−Removed: Series A convertible preferred shares — — 7,131,525
+Added: Unvested ordinary shares — — 13,757
Vested restricted share units, for which shares are not in issue 17,888 57,875 —
1 unchanged sentence
5,381,755 4,088,518 4,661,579
−Removed: Right of use of assets:
−Removed: Eastbourne Terrace , London, UK
−Removed: In November 2019, the Company entered into an operating lease located at 19 Eastbourne Terrace, London, UK.
−Removed: This lease commenced on January 1, 2020, and expired on December 31, 2021.
−Removed: Under the terms of the lease, the Company paid £ 780,000 per year, and paid a refundable deposit of £ 130,000 upon signing the agreement.
−Removed: Additionally, in February 2021, the Company entered into an Amendment for rental relief in January and February 2021 for a total of £ 32,500 , due to extended periods working from home as a result of the COVID-19 pandemic.
−Removed: In May 2019, the Company entered into a lease with BioLabs for 200 rentable square feet (“sf”) of office space at 180 Varick Street, New York, New York 10014, United States.
−Removed: The lease is cancellable with 30 days’ notice.
−Removed: This lease is accounted for as a short-term lease as the Company is not reasonably certain to extend the lease beyond twelve months and is therefore not recognized on the Company’s consolidated balance sheets.
+Added: Right of use assets
+Added: New York, USA
+Added: In August 2022, the Company entered into a twelve month membership agreement with WeWork for rentable office space.
+Added: The membership is cancellable with 90 days’ notice.
+Added: This membership is accounted for as a short-term lease as the Company is not reasonably certain to extend the lease beyond twelve months and is therefore not recognized on the Company’s consolidated balance sheets.
Soho, London, UK
3 unchanged sentences
Additionally, at the start of each calendar year, the monthly residency fee will be subject to an automatic inflation linked increase of the previous years’ amount.
−Removed: San Francisco, CA
−Removed: In August 2021, the Company entered into an operating lease commencing in August 2021 for approximately 2,526 rentable square feet located in San Francisco, California.
−Removed: The lease is set to expire on August 31, 2022 with no option to renew.
−Removed: The total monthly rent for the lease term is $ 10,000 per month, and the Company paid $ 9,000 of advanced rent upon lease execution.
−Removed: Additionally, the Company paid a refundable security deposit of $ 20,000 upon execution of the lease.
−Removed: The following table summarizes our costs included in consolidated statements of operations and comprehensive loss related to right of use lease assets we have entered into through December 31, 2021:
−Removed: (in thousands) December 31, 2021
+Added: Denmark Hill, London, UK
+Added: In March 2022, the Company entered into an agreement for a lease with South London and Maudsley NHS Foundation Trust for land and buildings at 5 Windsor Walk, Maudsley Hospital, Denmark Hill, London, UK.
+Added: The lease commenced on June 21, 2022 and has a contractual term of five years .
+Added: The rent is £ 180,000 per year, with no deposit payable.
+Added: The following table summarizes our costs included in our consolidated statements of operations and comprehensive loss related to right of use lease assets we have entered for the years ended December 31, 2022 and 2021 (in thousands):
+Added: Year Ended December 31,
Operating lease cost $ 2,263 $ 1,844
1 unchanged sentence
Short-term lease cost 256 86
+Added: $ 2,519 $ 1,930
Other information:
5 unchanged sentences
The following table summarizes the future minimum lease payments due under operating leases as of December 31, 2022, (in thousands):
−Removed: Year Ended December 31,
−Removed: Total lease payments 3,756
+Added: December 31, 2023 1,537
+Added: December 31, 2024 218
+Added: December 31, 2025 218
+Added: December 31, 2026 54
+Added: Total future minimum lease payments $ 2,027
imputed interest ( 99 )
Total $ 1,928
−Removed: The Company recorded rent expense totaling $ 1.9 million, $ 1.0 million and $ 0.4 million for the years ended December 31, 2021, 2020 and 2019, respectively.
Commitments and Contingencies
9 unchanged sentences
There have been no claims to date, and the Company has director and officer insurance that may enable it to recover a portion of any amounts paid for future potential claims.
−Removed: Related Party Transactions
−Removed: On August 28, 2019, as part of the Company’s 2019 Convertible Notes issuance an amount of $ 7.6 million (£ 6.2 million) was issued to a shareholder and it was converted to 710,621 shares of Series B convertible preferred shares on April 17, 2020.
−Removed: As of December 31, 2019, the shareholder’s convertible loan note remained outstanding.
−Removed: Refer to Note 8 for additional information on the 2019 Convertible Notes.
−Removed: The Company receives accounting and professional services from Tapestry Networks, Inc., or Tapestry, a company affiliated with a director of the Company and the Company’s Chief Executive Officer, from time to time as needed.
−Removed: The Company recorded accounting and professional fees of $ 0.1 million and $ 0.1 million for the years ended December 31, 2021 and 2020 and $ 0.2 million for year end December 31, 2019.
−Removed: As of December 31, 2021 and 2020, the Company had less than $ 0.1 million outstanding to Tapestry.
Employee Benefit Plans
In the UK, the Company makes contributions to private defined contribution pension schemes on behalf of its employees.
−Removed: The Company paid $ 0.2 million, less than $ 0.1 million and $ 0.1 million in contributions for the years ended December 31, 2021, 2020 and 2019, respectively.
+Added: The Company paid $ 0.2 million, $ 0.2 million and less than $ 0.1 million in contributions for the years ended December 31, 2022, 2021, and 2020 respectively.
In the United States, the Company established a defined contribution savings plan under Section 401(k) of the Internal Revenue Code.
1 unchanged sentence
employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis.
−Removed: The Company paid $ 0.1 million, less than $ 0.1 million and nil in contributions in the years ended December 31, 2021, 2020 and 2019, respectively.
−Removed: Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, as amended, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
+Added: The Company paid $ 0.2 million, $ 0.1 million and less than $ 0.1 million in contributions in the years ended December 31, 2022, 2021 and 2020, respectively.
+Added: Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934 the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
COMPASS Pathways plc
February 28, 2023
−Removed: /s/ George Goldsmith
−Removed: George Goldsmith
+Added: /s/ Kabir Nath
Chief Executive Officer
2 unchanged sentences
Signature Title Date
−Removed: /s/ George Goldsmith Chief Executive Officer and Chair of the Board of Directors (Principal Executive Officer) February 24, 2022
−Removed: George Goldsmith
+Added: /s/ Kabir Nath Chief Executive Officer
+Added: (Principal Executive Officer) February 28, 2023
/s/ Michael Falvey Chief Financial Officer
−Removed: (Principal Financial Officer and Principal Accounting Officer)
−Removed: February 24, 2022
+Added: (Principal Financial Officer and Principal Accounting Officer) February 28, 2023
Michael Falvey
+Added: /s/ George Goldsmith Chair of Board of Directors February 28, 2023
+Added: George Goldsmith
/s/ Ekaterina Malievskaia Chief Innovation Officer and Director February 28, 2023
2 unchanged sentences
David York Norton
−Removed: /s/ Jason Camm Director February 24, 2022
/s/ Annalisa Jenkins Director February 28, 2023
9 unchanged sentences
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.