1 unchanged sentence
Evaluation of Disclosure Controls and Procedures
−Removed: Our management, with the participation of our Chief Executive Officer and Interim 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, 2023.
−Removed: Based on such evaluation, our Chief Executive Officer and Interim Chief Financial Officer have concluded that our disclosure controls and procedures were 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 Interim Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures.
+Added: 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, 2024.
+Added: Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were 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
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act.
−Removed: Our 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 general accepted accounting principles.
+Added: Our 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.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
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: Under the supervision and with the participation of our management, including our Chief Executive Officer and Interim Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).
+Added: Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).
Based on our evaluation under that framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2024.
17 unchanged sentences
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.
+Added: Holder’s particular circumstances, including state and local tax consequences, estate tax consequences, alternative minimum tax consequences, the special tax accounting
+Added: rules under Section 451(b) of the Code, the potential application of the Medicare contribution tax, and tax consequences applicable to U.S.
Holders subject to special rules, such as:
35 unchanged sentences
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.
+Added: Treasury has expressed concerns that intermediaries in the chain of ownership between the holder of an ADS and the
+Added: issuer of the security underlying our ADS may be taking actions that are inconsistent with the beneficial ownership of the underlying security.
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.
12 unchanged sentences
We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation, the equity of which we own, directly or indirectly, 25% or more (by value).
−Removed: Based on the current and expected composition of our income and assets and the value of our assets, we believe that we were a PFIC for U.S.
+Added: Based on the composition of our income and assets and the value of our assets, we believe that we were a PFIC for U.S.
+Added: federal income tax purposes for our taxable year ended December 31, 2023 and we believe that we were not a PFIC for U.S.
federal income tax purposes for our taxable year ended December 31, 2024.
26 unchanged sentences
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.
+Added: Holder makes a
+Added: mark-to-market election as discussed below.
Distributions a U.S.
14 unchanged sentences
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
−Removed: during each calendar quarter.
+Added: 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.
Any trades that have as their principal purpose meeting this requirement will be disregarded.
22 unchanged sentences
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.
+Added: Holder files the annual report, and, unless such failure is due to
+Added: reasonable cause and not willful neglect, the statute of limitations for the U.S.
Holder’s entire U.S.
71 unchanged sentences
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
−Removed: remain solely resident in the UK for tax purposes and will therefore be subject to the UK tax regime and not the U.S.
+Added: 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.
tax regime save as set out above under “U.S.
23 unchanged sentences
An individual UK Holder who receives a dividend in the 2024/2025 tax year will be entitled to a tax-free allowance of £500.
−Removed: However, the UK government has announced that the dividend tax-free allowance of £1,000 will be reduced to £500 with effect from April 2024.
Income within the dividend allowance counts towards an individual’s basic, higher or additional rate limits and may, therefore, affect the level of personal allowance to which they are entitled.
7 unchanged sentences
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 (for individual UK Holders) and corporation tax on chargeable gains (for corporate UK Holders).
−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 2023/2024).
−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 2023/2024), 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 capital gains tax rate currently applicable to the excess would be 20% (for the tax year 2023/2024).
+Added: 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 capital gains tax rate is 24% (for the period of the 2024/2025 tax year from October 30, 2024;
+Added: the rate from April 6, 2024 to October 29, 2024 was 20%).
+Added: For an individual UK Holder who is subject to
+Added: UK income tax at the basic rate and liable to UK capital gains tax on such disposal, the current applicable rate would be 1 8 % (for the period of the 2024/2025 tax year from October 30, 2024;
+Added: the rate from April 6, 2024 to October 29, 2024 was 10%), 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.
+Added: In that case, the capital gains tax rate currently applicable to the excess would be 2 4 % (for the period of the 2024/2025 tax year from October 30, 2024;
+Added: the rate from April 6, 2024 to October 29, 2024 was 20%)...
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 25% for companies with profits of more than £250,000 or 19% for companies with profits not exceeding £50,000 with a marginal relief applying to profits between £50,000 and £250,000, in each case for the 2024/2025 tax year).
12 unchanged sentences
Clearance Services and Depositary Receipts
−Removed: Unless an exemption applies, when ordinary shares are issued or transferred into a depositary receipt system or a clearance service (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), a higher rate of 1.5% UK stamp duty or UK SDRT, which we refer to as the 1.5% Charge, as applicable, generally arises.
−Removed: However, under current UK tax law (as set out in the Finance Bill 2023-24, which received royal assent on 22 February 2024, becoming the Finance Act 2024), with effect from 1 January 2024,, no 1.5% Charge (to UK SDRT or, where effected by a written instrument, UK stamp duty) should arise in respect of an issue of ordinary shares, or an unconditional agreement to issue ordinary shares, to a clearance service or a depositary receipt system.
+Added: Under current UK tax law (as set out in section 20 and Schedule 11 of the Finance Act of 2024), with effect from 1 January 2024, a higher rate of 1.5% UK stamp duty or UK SDRT (which we refer to as the 1.5% Charge) should not arise in respect of an issue of ordinary shares, or an unconditional agreement to issue ordinary shares, to a clearance service or a depositary receipt system.
Further, subject to the below, no 1.5% Charge should arise in respect of a transfer of ordinary shares, or an unconditional agreement to transfer ordinary shares, to a clearance service or depositary receipt system, where the transfer is carried out in the course of “capital-raising arrangements”, being arrangements pursuant to which the relevant ordinary shares are issued by the company for the purpose of raising new capital.
11 unchanged sentences
On the basis of current published HMRC guidance, an ADR is not regarded as stock or a marketable security for the purposes of UK stamp duty or a chargeable security for the purposes of UK SDRT and, as such, 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: Chargeable Gains Tax – Warrants
+Added: For UK corporate holders of warrants, the precise UK corporation tax treatment of warrants is dependent on whether or not the warrants are considered to constitute derivative contracts for UK tax purposes.
+Added: Warrants treated as derivative contracts for UK tax purposes
+Added: Where a warrant constitutes a derivative contracts for UK tax purposes, the amounts that are required to be brought into account for UK corporation tax purposes by a UK corporate holder of warrants are, broadly, those amounts which are recognized under relevant generally accepted accounting principles in determining the relevant UK corporation’s profits and losses (including those of a capital nature) arising from the warrants, as well as certain related expenses.
+Added: UK corporate holders of warrants who consider that any of the warrants may constitute derivative contracts for UK tax purposes should consult with their tax advisors as to the tax implications of such treatment.
+Added: UK non-corporate holders, and warrants not treated as derivative contracts for UK tax purposes
+Added: Where (for UK corporate holders of warrants) a warrant does not constitute a derivative contract for UK tax purposes, or for UK non-corporate holders of warrants, then (depending on the circumstances) neither the grant nor the exercise of a warrant should generally give rise to a UK chargeable gains / capital gains tax charge, and the relevant UK holder’s base cost in the warrant, or (following exercise) the asset which was the subject of the warrant should broadly comprise, in the case of the warrant, any amounts paid by the relevant UK holder for the acquisition of the warrant, and in the case of the asset which was the subject of the warrant, any such amounts, together with any amounts paid for the exercise of the relevant warrant.
+Added: A disposal or deemed disposal of a warrant or (following the exercise of a warrant) the asset underlying the warrant 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 corporation tax on chargeable gains and capital gains tax.
+Added: 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 our warrants or (following exercise of a warrant) the underlying assets, the current applicable rate will be 24% (for the period from 30 October 2024 to the end of the 2024/2025 tax year).
+Added: 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 18% (for the period from 30 October 2024 to the end of the 2024/2025 tax year), 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
+Added: the unused basic rate tax band.
+Added: In that case, the rate currently applicable to the excess would be 24% (for the period from 30 October 2024 to the end of the 2024/2025 tax year).
+Added: If a corporate UK Holder becomes liable to UK corporation tax on the disposal (or deemed disposal) of a warrant or (following the exercise of a warrant) the asset underlying the warrant, the main rate of UK corporation tax would apply (at 25% for the tax year 2024/2025 for companies with profits of more than £50,000 whilst the prior 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).
+Added: A holder of warrants (or the underlying asset thereof) 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 a warrant or (following exercise) the asset underlying the warrant, 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 warrants or (following exercise) the underlying assets, through a permanent establishment) to which our warrants (or, following an exercise, the underlying assets) are attributable.
+Added: However, an individual holder of warrants 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 warrants (or, following exercise, the underlying asset) 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) despite the fact that the individual may not be resident in the UK at the time of the disposal.
+Added: Stamp Duty and Stamp Duty Reserve Tax - Warrants
+Added: The UK stamp duty and UK stamp duty reserve tax implications of both the issue, the exercise and the transfer of warrants is complex.
+Added: Specific professional advice should be sought before incurring or reimbursing the costs of a UK stamp duty or UK SDRT charge in any circumstances relating to a warranty (including the issuance, exercise or transfer of any warrant).
+Added: (b) Rule 10b5-1 Plans
+Added: During the three months ended December 31, 2024, none of our directors or executive officers adopted , terminated or modified the amount, pricing or timing provisions in any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
1 unchanged sentence
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
−Removed: Our board of directors has adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including our Chief Executive Officer, Interim Chief Financial Officer and other executive and senior officers.
+Added: Our board of directors has adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including our Chief Executive Officer, Chief Financial Officer and other executive and senior officers.
The full text of our code of business conduct and ethics is posted on the Investor Relations section of our website at ir.compasspathways.com.
1 unchanged sentence
We will disclose any amendments to our code of business conduct and ethics, or waivers of its requirements granted to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions, on our website or in filings under the Exchange Act as required by applicable law or the listing standards of the Nasdaq Stock Market.
−Removed: The remaining information called for by this item, including information about our Directors, Executive Officers and Audit Committee, will be set forth in our Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2023 and is incorporated herein by reference.
+Added: The remaining information called for by this item, including information about our Directors, Executive Officers and Audit Committee and our insider trading policy (a copy of our insider trading policy is filed as Exhibit 19.1 to this report), will be set forth in our Proxy Statement for the 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2024 and is incorporated herein by reference.
EXECUTIVE COMPENSATION
31 unchanged sentences
Form 8-K 001-39522 4.1 08/16/2023
+Added: F orm of Pre-funded Warrant
+Added: 001-39522 4.1
+Added: F orm of ADS Warrant
+Added: 001-39522 4.2
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.
Form F-1 333-248484 10.1 8/28/2020
−Removed: 10.2# Lease Agreement by and between Fora Space Limited and the Company, dated July 9, 2021
−Removed: Form 6-K 001-39522 10.1 8/11/2021
−Removed: 10.3# Employment Agreement with George Goldsmith.
−Removed: Form 20-F 001-39522 10.2 3/9/2021
−Removed: 10.4# Employment Agreement with Ekaterina Malievskaia.
−Removed: Form 20-F 001-39522 10.7 3/9/2021
2020 Employee Share Option and Incentive Plan with Non-Employee Sub-Plan and U.S.
5 unchanged sentences
Form F-1/A 333-248484 10.6 9/14/2020
−Removed: Employment Agreement with Michael Falvey
−Removed: Form 6-K 001-39522 10.1 12/7/2021
Form of Non-Qualified Share Option Agreement for Company Employees under the 2020 Share Option and Incentive Plan.
4 unchanged sentences
10-K 001-39522 10.20 02/24/2022
−Removed: Services Agreement by and between BioInnovation Labs LLC and COMPASS Pathways Inc dated January 31, 2022
−Removed: 10-K 001-39522 10.21 02/24/2024
Service Agreement by and between Movassate Family Trust and COMPASS Pathways Inc dated August 3, 2021
4 unchanged sentences
8-K 001-39522 10.1 07/19/2022
−Removed: Amendment to Employment Agreement dated September 14, 2020 by and between COMPASS Pathways plc and George Goldsmith.
−Removed: 8-K 001-39522 10.2 07/19/2022
−Removed: WeWork Membership Agreement dated August 22, 2022 by and between COMPASS Pathways Inc and 130 Madison Avenue Tenant LLC
−Removed: 10-K 001-39522 10.19 02/28/23
Form of Inducement Award Non-Qualified Share Option Agreement.
9 unchanged sentences
10-Q 001-39522 10.2 11/2/2023
−Removed: Separation Agreement dated October 24, 2023 by and between the Company and Michael Falvey
−Removed: 8-K 001-39522 10.1 10/26/2023
Employment Agreement dated May 7, 2020 by and between Compass Pathways and Mary-Rose Hughes, as amended
+Added: 10-K 001-39522 10.24 02/29/2024
Employment Agreement dated December 6, 2023, by and between Compass Pathways and Teri Loxam.
2 unchanged sentences
dated August 1, 2023
+Added: 10-K 001-39522 10.26 02/29/2024
+Added: Employment Agreement with Matthew Owens, as amended effective March 6, 2024
+Added: 10-Q 001-39522 10.1 05/08/2024
+Added: Employment Agreement dated April 15, 2024 with Kabir Nath
+Added: 10-Q 001-39522 10.2 05/08/2024
+Added: First Amendment dated October 30, 2024 to the Loan and Security Agreement, dated as of June 30, 2023, by and among the COMPASS Pathways plc, and its subsidiaries, the lenders party thereto and Hercules Capital, Inc., in its capacity as administrative agent and collateral agent
+Added: Settlement Agreement with Matthew Owens dated December 19, 2024
+Added: C ompass Pathways plc I nsider Trading Policy
21.1 Subsidiaries of COMPASS Pathways plc.
34 unchanged sentences
Opinion on the Financial Statements
−Removed: We have audited the accompanying consolidated balance sheets of COMPASS Pathways plc and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive loss, of shareholders’ equity, and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”).
−Removed: In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
+Added: We have audited the accompanying consolidated balance sheets of Compass Pathways plc (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, of shareholders’ equity, and of cash flows for the years then ended, 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, 2024 and 2023, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
4 unchanged sentences
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB.
−Removed: 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: 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.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
5 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
−Removed: Critical Audit Matter
+Added: Critical Audit Matters
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 judgments.
1 unchanged sentence
Benefit from Research and Development Tax Credit
−Removed: As described in Notes 2 and 3 to the consolidated financial statements, the Company carries out extensive research and development (“R&D”) activities and benefits from the UK R&D tax credit regime under the scheme for small and medium-sized enterprises (“SME”).
−Removed: For the year ended December 31, 2023, the Company recognized $12.9 million in benefit from R&D tax credit.
−Removed: As disclosed by management, they evaluate which UK R&D tax credit programs the Company is expected to be eligible for, that they plan to submit a claim for and have reasonable assurance that the amount will ultimately be realized.
−Removed: Management assesses the Company’s R&D activities and expenditures to determine whether the nature of the activities and expenditures will qualify for credit under the SME regime and whether the claim will ultimately be realized based on the allowable reimbursable expense criteria established by the UK government.
−Removed: Management makes judgements and estimates relating to the allocation of time spent on R&D activities by individuals.
−Removed: The principal considerations for our determination that performing procedures relating to 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 by individuals 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: As disclosed in Notes 2 and 3 to the consolidated financial statements, the Company’s balance of UK research and development (“R&D”) tax credit was $20.7 million.
+Added: As a company that carries out extensive R&D activities, the Company benefits from the UK R&D tax credit regime under the scheme for small or medium-sized enterprises (“SME’s”).
+Added: Under the SME regime, the Company is able to surrender some of its trading losses that arise from qualifying R&D activities for a cash rebate of a portion of such qualifying R&D expenditure.
+Added: As disclosed by management, they evaluate each reporting period which UK R&D tax credit programs they expect to be eligible for, that they plan to submit a claim for and have reasonable assurance that the amount will ultimately be realized.
+Added: For the year ended December 31, 2024 management believes that the Company meets the R&D intensity condition and has therefore calculated its R&D tax credit at the enhanced rate on the basis that it is research intensive.
+Added: The principal consideration for our determination that performing procedures relating to benefit from research and development tax credit is a critical audit matter is a high degree of auditor 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, 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 determining R&D costs that qualify for the SME regime, (iii) evaluating the appropriateness 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 used in the R&D tax credit calculations, and (v) obtaining evidence over the recoverability of the prior year claim given that the cash has not yet been received, 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 SME’s, (ii) testing the underlying expenditure and the appropriateness 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, and (iii) evaluating the appropriateness of management’s assessment as to whether the Company qualifies to claim under the R&D intensive scheme at an enhanced rate.
/s/ PricewaterhouseCoopers LLP
10 unchanged sentences
Restricted cash 389 440
−Removed: Prepaid income tax 1,123 575
Prepaid expenses and other current assets 35,821 40,658
9 unchanged sentences
Accrued expenses and other liabilities 14,495 11,301
+Added: Debt, current portion
Operating lease liabilities - current 1,725 2,411
1 unchanged sentence
NON-CURRENT LIABILITIES
−Removed: Long-term debt
+Added: Debt, non-current portion
+Added: 24,652 28,757
Operating lease liabilities - non-current 303 1,882
4 unchanged sentences
68,552,215 and 61,943,471 shares authorized, issued and outstanding at December 31, 2024 and 2023, respectively
−Removed: Deferred shares, £ 21,921.504 par value;
−Removed: nil and 1 share authorized, issued and outstanding at December 31, 2023 and 2022, respectively
Additional paid-in capital 704,919 621,645
11 unchanged sentences
Year Ended December 31,
−Removed: 2023 2022 2021
OPERATING EXPENSES:
5 unchanged sentences
OTHER INCOME (EXPENSE), NET:
+Added: Benefit from R&D tax credit
21,097 12,875
−Removed: Interest expense
+Added: Interest income
+Added: Foreign exchange (losses) gains
( 1,032 ) 3,686
−Removed: Foreign exchange gains
+Added: Interest expense
( 4,479 ) ( 2,204 )
−Removed: Benefit from R&D tax credit 12,875 14,424 9,648
Total other income, net
6 unchanged sentences
Net loss ( 155,122 ) ( 118,464 )
−Removed: Other comprehensive loss:
+Added: Other comprehensive income (loss):
Foreign exchange translation adjustment 732 ( 59 )
7 unchanged sentences
ORDINARY SHARES
−Removed: DEFERRED SHARES ADDITIONAL PAID-IN CAPITAL ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)
+Added: DEFERRED SHARES ADDITIONAL PAID-IN CAPITAL ACCUMULATED OTHER COMPREHENSIVE LOSS
ACCUMULATED DEFICIT TOTAL SHAREHOLDERS' EQUITY
3 unchanged sentences
Balance at December 31, 2022
−Removed: Exercise of share options 1,244,709 14 — — 1,891 — — 1,905
−Removed: Issuance of shares due to options exercised in previous year 232,227 3 — — ( 3 ) — — —
−Removed: Issuance of ordinary shares, net of issuance costs 4,600,000 51 — — 154,743 — — 154,794
−Removed: Issuance of ordinary shares to settle vested restricted stock units 12,607 — — — — — — —
−Removed: Share-based compensation expense — — — — 8,639 — — 8,639
−Removed: Unrealized loss on foreign currency translation
42,631,794 $ 440 1 $ 28 $ 458,825 $ ( 16,867 ) $ ( 261,146 ) $ 181,280
−Removed: Net loss — — — — — — ( 71,742 ) ( 71,742 )
−Removed: Balance at December 31, 2021 42,019,874 $ 435 1 $ 28 $ 444,750 $ 8,840 $ ( 169,641 ) $ 284,412
−Removed: Issuance of ordinary shares under ATM offering, net of issuance costs
+Added: Issuance of ordinary shares under ATM facility, net of issuance costs 2,937,622 29 — — 28,091 — — 28,120
+Added: Issuance of ordinary shares under PIPE offering, net of issuance costs
16,076,750 163 — — 116,652 — — 116,815
+Added: Issuance of warrants to purchase ordinary shares
+Added: — — — — 687 — — 687
Exercise of share options 166,801 2 — — — — — 2
Issuance of ordinary shares to settle vested restricted stock units 78,022 1 — — ( 1 ) — — —
−Removed: Issuance of ordinary shares under employee share purchase plan
+Added: Cancellation of deferred share
— — ( 1 ) ( 28 ) 28 — — —
+Added: Issuance of ordinary shares under employee share purchase plan 52,482 — — — 351 — — 351
Shares tendered for withholding taxes — — — — ( 265 ) — — ( 265 )
4 unchanged sentences
Balance at December 31, 2023
−Removed: Exercise of share options 166,801 2 — — — — — 2
−Removed: Issuance of ordinary shares under ATM offering, net of issuance costs
61,943,471 $ 635 — $ — $ 621,645 $ ( 16,926 ) $ ( 379,610 ) $ 225,744
−Removed: Issuance of ordinary shares under PIPE offering, net of issuance costs
−Removed: 16,076,750 163 — — 116,652 — — 116,815
+Added: Issuance of ordinary shares under ATM facility, net of issuance costs 2,509,798 25 — — 26,194 — — 26,219
Issuance of warrants to purchase ordinary shares 3,752,050 38 — — 37,220 — — 37,258
−Removed: — — — — 687 — — 687
+Added: Exercise of share options 189,214 2 — — 219 — — 221
Issuance of ordinary shares to settle vested restricted stock units 83,527 1 — — ( 1 ) — — —
−Removed: Cancellation of deferred share — — ( 1 ) ( 28 ) 28 — — —
Issuance of ordinary shares under employee share purchase plan 74,155 1 — — 364 — — 365
−Removed: 52,482 — — — 351 — — 351
Shares tendered for withholding taxes — — — — ( 239 ) — — ( 239 )
Share-based compensation expense — — — — 19,517 — — 19,517
−Removed: Unrealized loss on foreign currency translation
+Added: Unrealized gain on foreign currency translation
— — — — — 732 — 732
1 unchanged sentence
Balance at December 31, 2024
+Added: 68,552,215 $ 702 — $ — $ 704,919 $ ( 16,194 ) $ ( 534,732 ) $ 154,695
The accompanying notes are an integral part of these consolidated financial statements.
5 unchanged sentences
Year Ended December 31,
−Removed: 2023 2022 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
1 unchanged sentence
Adjustments to reconcile net loss to net cash used in operating activities
−Removed: Depreciation and amortization 242 330 175
+Added: Depreciation 233 242
Non-cash interest
Loss on disposal of property and equipment
−Removed: Non-cash (gain) loss on foreign currency remeasurement
+Added: Non-cash loss (gain) on foreign currency remeasurement
755 ( 2,617 )
2 unchanged sentences
Non-cash lease expenses
−Removed: 2,027 2,126 1,797
Changes in operating assets and liabilities
13 unchanged sentences
Proceeds from issuance of ordinary shares, net of issuance costs 26,219 144,935
+Added: Proceeds from the exercise of warrants
Proceeds from the issuance of shares under the employee share purchase plan 365 351
Payments of withholding tax on stock award
+Added: ( 239 ) ( 265 )
Net proceeds from issuance of long-term debt
3 unchanged sentences
Effect of exchange rate changes on cash, cash equivalents and restricted cash 194 867
−Removed: Net increase/(decrease) in cash, cash equivalents and restricted cash
+Added: Net (decrease)/increase in cash, cash equivalents and restricted cash
( 55,168 ) 77,257
4 unchanged sentences
$ 3,070 $ 1,254
−Removed: SUPPLEMENTAL NON-CASH TRANSACTIONS:
−Removed: Right-of-use assets obtained in exchange for new operating lease liabilities $ 4,184 $ 783 $ 5,562
−Removed: Unpaid withholding tax on stock award recognized in accrued and other liabilities
−Removed: Proceeds from exercise of options received and recorded in other current assets
−Removed: Deferred issuance costs included in accrued expenses $ — $ — $ 856
−Removed: Issuance of warrants together with long-term debt
−Removed: $ 687 $ — $ —
−Removed: Issuance of warrants together with issuance of ordinary shares
+Added: Cash paid for taxes
$ 1,121 $ 2,442
+Added: In 2023, the Company received $ 124.9 million in gross proceeds for the PIPE offering, of which $ 8.1 million was paid for issuance costs and the net proceeds of $ 116.8 million has been included in the proceeds from issuance of ordinary shares, net of issuance costs within the cash flows from financing activities.
The following table provides a reconciliation of the cash, cash equivalents and restricted cash balances as of each of the periods, shown above:
Year Ended December 31,
−Removed: 2023 2022 2021
Cash and cash equivalents $ 165,081 $ 220,198
11 unchanged sentences
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 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 May 2021 follow-on offering.
−Removed: 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: The Company has funded its operations with proceeds from the sale of its ordinary shares, American Depository Shares, or ADSs, including in its offerings pursuant to its at-the-market, or ATM, offering program, proceeds from a loan agreement with Hercules Capital, Inc., and proceeds from a private placement transaction, or the PIPE.
+Added: The Company is party to a Sales Agreement for its ATM offering program, dated October 8, 2021, with TD Securities (USA) LLC, or TD 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 TD Cowen as the sales agent.
Sales of the Company’s ADSs, if any, will be made at market prices.
−Removed: Through December 31, 2023, the Company sold 2,982,038 ADSs under the Sales Agreement, resulting in $ 28.6 million in net proceeds.
−Removed: On June 30, 2023 (the “Effective Date”), the Company entered into a Loan Agreement with Hercules, which provided for aggregate maximum borrowings of up to $ 50.0 million, including a term loan of $ 30.0 million, which was funded on the Effective Date.
−Removed: On August 16, 2023, the Company entered into a Securities Purchase Agreement, pursuant to which the Company agreed to sell and issue in a private placement transaction (the “PIPE”) (i) 16,076,750 ADSs and (ii) PIPE Warrants to purchase up to 16,076,750 ADSs, at a purchase price of approximately $ 7.78 per ADS and accompanying PIPE Warrant to purchase one ADS.
+Added: Since the establishment of the ATM offering program, t hrough December 31, 2024, the Company sold 5,491,836 ADSs under the ATM offering program, resulting in $ 54.8 million in net proceeds.
+Added: On June 30, 2023, the Company entered into a Loan Agreement with Hercules, which provided for aggregate maximum borrowings of up to $ 50.0 million, including a term loan of $ 30.0 million, which was funded on June 30, 2023.
+Added: On August 16, 2023, the Company entered into a Securities Purchase Agreement, pursuant to which the Company agreed to sell and issue in a private placement transaction (i) 16,076,750 ADSs and (ii) PIPE Warrants to purchase up to 16,076,750 ADSs, at a purchase price of approximately $ 7.78 per ADS and accompanying PIPE Warrant to purchase one ADS.
Each PIPE Warrant has an exercise price of $ 9.93 per ADS and is exercisable for a three year period beginning in February 2024.
The PIPE Warrants may be exercised on a cashless basis if there is no effective registration statement registering the shares underlying the PIPE Warrants.
−Removed: The Company has incurred recurring losses since its inception, including net losses of $ 118.5 million and $ 91.5 million for the years ended December 31, 2023 and 2022, respectively.
+Added: Through December 31, 2024, PIPE Warrants were exercised for 3,752,050 ADS, resulting in $ 37.3 million in exercise proceeds.
+Added: The Company will receive up to an additional approximately $ 122.4 million in gross proceeds if the PIPE Warrants are fully exercised.
+Added: The Company has incurred recurring losses since its inception, including net losses of $ 155.1 million and $ 118.5 for the years ended December 31, 2024 and 2023, respectively.
In addition, as of December 31, 2024, the Company had an accumulated deficit of $ 534.7 million.
The Company expects to continue to generate operating losses for the foreseeable future.
−Removed: The Company believes the cash and cash equivalents on hand as of December 31, 2023 of $ 220.2 million, together with the net proceeds raised to date during the first quarter, will be sufficient to fund its operating expenses and capital expenditure requirements into late 2025.
+Added: The Company believes the cash and cash equivalents on hand as of December 31, 2024 of $ 165.1 million, together with the net proceeds raised to date during the first quarter of 2025 of $ 140.4 million, will be sufficient to fund its operating expenses and capital expenditure requirements at least through the planned 26-week data read-out from our COMP006 study, which is expected in the second half of 2026 .
The future viability of the Company is dependent on its ability to raise additional capital to finance its operations.
−Removed: 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.
+Added: The Company’s inability to raise capital as and when needed 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.
1 unchanged sentence
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.
−Removed: Market volatility, instability in the banking system, geopolitical tensions resulting from the ongoing war between Ukraine and Russia, the Israel-Hamas war, fluctuating inflation and interest rates and the related impact on U.S., U.K.
−Removed: and global economies, the risk of economic slowdown or recession or a potential government shutdown in the United States, the upcoming presidential election the United States or other factors could adversely impact our operations, financial results and ability to raise additional funding.
+Added: Market volatility, geopolitical tensions resulting from the ongoing war between Ukraine and Russia, conflict in the Middle East, fluctuating inflation and interest rates and the related impact on U.S., UK and global economies, instability in the banking system, the risk of economic slowdown or recession in the U.S., the potential for significant changes in U.S.
+Added: or regulatory environment or other factors could adversely impact the Company’s operations, financial results and ability to raise additional funding .
Summary of Significant Accounting Policies
7 unchanged sentences
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, research and development expenses and the research and development tax credit.
Estimates are periodically reviewed in light of changes in circumstances, facts and experience.
6 unchanged sentences
Restricted cash as of December 31, 2024 and 2023 represents a collateral deposit for employee credit cards.
−Removed: The Company’s investment of $ 0.5 million to acquire 8 % (on a fully diluted basis) shareholding in Delix Therapeutics, Inc., does not have a 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: As of December 31, 2023, no impairment loss was recognized.
Fair Value Measurements
−Removed: 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.
4 unchanged sentences
• 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
−Removed: 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.
+Added: The carrying amounts reflected in the consolidated balance sheets for the Company’s cash and cash equivalents, restricted cash, other current assets, accounts payable and accrued expenses approximate fair value because of the short-term nature of these instruments.
+Added: The carrying value of the Company’s outstanding debt approximates fair value, reflecting interest rates currently available to the Company.
Concentration of Credit Risk
12 unchanged sentences
Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the consolidated statements of operations and comprehensive loss.
−Removed: Expenditures for repairs and maintenance are charged to expense as incurred.
+Added: Expenditures for repairs and maintenance are charged to expenses as incurred.
Impairment of Long-Lived Assets
4 unchanged sentences
Segment Information
−Removed: 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, view the Company’s operations and manage its business as a single operating segment, which carries out its operations in two geographic regions:
−Removed: the United Kingdom, or UK, and the United States.
−Removed: The Company’s property and equipment are primarily located in the UK.
−Removed: The Company’s singular concentration is focused on accelerating patient access to evidence-based innovation in mental health.
+Added: In November 2023, the FASB issued ASU 2023-07 - Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures, which improved segment disclosure requirements, primarily through enhanced disclosure requirements for significant segment expenses.
+Added: The improved disclosure requirements apply to all public entities that are required to report segment information, including those with only one reportable segment.
+Added: The Company has adopted the guidance for the fiscal year ended December 31, 2024.
+Added: Operating segments are identified as components of an entity that meet all of the following criteria:
+Added: i) engage in business activities from which it may incur expenses;
+Added: ii) operating results are regularly reviewed by the chief operating decision maker, to allocate resources and assess performance;
+Added: iii) discrete financial information is available.
+Added: The Company’s chief operating decision maker ("CODM"), is the Chief Executive Officer.
+Added: The Company views its operations and manages its business as one operating segment.
+Added: The CODM uses ‘total operating expenses,’ research and development and general and administrative ‘expenses by category,’ ‘loss before income taxes’ and ‘total assets’ to assess performance and decide how to allocate resources.
+Added: The CODM also uses ‘total operating expenses’ ‘expenses by category’ and ‘loss before income taxes’ to monitor budget versus actual results to assess performance.
+Added: Loss before income taxes is reported on the consolidated statements of operations and comprehensive loss.
+Added: The measure of assets is reported on the consolidated balance sheets as total assets.
+Added: As the Company operates in one operating segment, all required financial segment information can be found in these consolidated financial statements.
+Added: All additional disclosures can be found in Note 13 below.
Research and Development Costs
20 unchanged sentences
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.
−Removed: There have been no performance conditions attached to the share options granted by the Company to date.
+Added: There have been no performance or market conditions attached to the share options granted by the Company to date.
The fair value of each share option grant is estimated on the date of grant using the Black-Scholes option pricing model.
3 unchanged sentences
The Company lacks sufficient company-specific historical and implied volatility information for its ordinary shares.
−Removed: Therefore, it estimates its expected share volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price.
+Added: Therefore, it estimates its expected share volatility using a blended rate of:
+Added: (1) historical volatility of publicly traded peer companies and (2) the Company’s historical volatility since being publicly traded since September 2020.
+Added: The Company expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price.
Expected term.
10 unchanged sentences
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.
−Removed: Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets and current and non-current lease liabilities, as applicable.
+Added: Leases with a term greater than one year are recognized on the balance sheets as right-of-use assets and current and non-current lease liabilities, as applicable.
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.
3 unchanged sentences
When readily determinable, the discount rate used to calculate the lease liability is the rate implicit in the lease.
−Removed: As the Company’s leases do not typically provide an implicit rate, the Company utilizes its incremental borrowing
−Removed: rate to discount lease payments, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment.
+Added: As the Company’s leases do not typically provide an implicit rate, the Company utilizes its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment.
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 sheets.
+Added: The Company has elected not to recognize leases with an original term of one year or less on the consolidated 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.
8 unchanged sentences
Therefore, its financing source is the primary indicator of its cash flows and its functional currency.
−Removed: The change in functional currency from the British Pound Sterling is due to a change in the source of the Company’s financing and cash flows going forward, which will now primarily be U.S.
+Added: The change in functional currency from the British Pound Sterling was due to a change in the source of the Company’s financing and cash flows going forward, which is primarily U.S.
Dollars (“USD”).
5 unchanged sentences
To the extent that the distinct and separable operation has monetary assets and liabilities denominated in the old functional currency, such balances will create transaction gains and losses subsequent to the change in functional currency.
−Removed: The balance recorded in the cumulative translation adjustment account for prior periods is not reversed upon the change in functional currency.
+Added: The balance recorded in the cumulative translation reserve, included within accumulated other comprehensive loss, in the consolidated balance sheets for prior periods is not reversed upon the change in functional currency.
The Company translates the assets and liabilities of Compass Pathfinder Limited into USD at the exchange rate in effect on the balance sheet date.
Income and expenses are translated at the average exchange rate in effect during the period.
−Removed: Unrealized translation gains and losses are recorded as a cumulative translation adjustment, which is included in the consolidated statements of shareholders’ equity as a component of accumulated other comprehensive income/(loss).
+Added: Unrealized translation gains and losses are recorded as a cumulative translation adjustment, which is included in the consolidated statements of shareholders’ equity as a component of accumulated other comprehensive loss.
+Added: Corporate Income Taxes
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.
5 unchanged sentences
First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities.
−Removed: If the tax position is deemed more-
−Removed: likely-than-not to be sustained, the tax position is then assessed as the amount of benefit to recognize in the consolidated financial statements.
+Added: 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.
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.
4 unchanged sentences
Benefit from Research and Development Tax Credit
−Removed: 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, in effect through December 31, 2023, the Company is able to surrender some of its trading losses that arise from qualifying research and development activities for a cash rebate of a portion of such qualifying research and development expenditure.
+Added: As a company that carries out extensive research and development (“R&D”) activities, the Company benefits from the UK R&D tax credit regime under the scheme for small or medium-sized enterprises, (“SME’s”).
+Added: Under the SME regime, the Company is able to surrender some of its trading losses that arise from qualifying R&D activities for a cash rebate of a portion of such qualifying R&D expenditure.
Up until April 1, 2023 the effective rate was 33.3% on in-house expenditures and 21.7% on work that was contracted out (to unconnected subcontractors).
On and after April 1, 2023, the effective rates reduced to 18.6% and 12.1%, respectively.
−Removed: New rules were announced in the Finance Bill 2023-24 for an enhanced effective rate of relief for loss making research intensive SMEs, which would be 27.0% for qualifying in-house expenditures and 17.5% for qualifying subcontracted expenditures.
−Removed: The legislation was not substantively enacted at the balance sheet date, although based on the proposed rules, the Company does not believe that it would meet the criteria for the enhanced rate of relief for the year through December 31, 2023.
−Removed: After the Finance Bill has received Royal Assent, the R&D claim will be reviewed at a transaction level, and the threshold calculation prepared with more certainty to determine whether the enhanced rate can be applied for submission of the claim.
+Added: New rules were introduced by the Finance Act 2024 for an enhanced effective rate of relief for loss making research intensive SMEs, which are approximately 27.0% for qualifying in-house expenditures and approximately 17.5% for qualifying subcontracted expenditures (to unconnected subcontractors).
+Added: To be eligible as a research intensive company (the R&D intensity condition), the qualifying R&D expenditure for tax purposes must be at least 40% of the aggregate expenditure across the consolidated group.
+Added: The threshold has decreased from 40% to 30% from January 1, 2025.
+Added: Aggregate expenditure is defined as being brought into account in calculating the profits for the period of any trade carried on by the company, but payments between connected companies can be excluded to avoid double counting.
+Added: For the year ended December 31, 2023 as a result of an intercompany loan between two group companies, a large exchange loss was generated in one company and a corresponding gain in the other.
+Added: There is uncertainty over the ability to net off this exchange gain and loss when calculating aggregate expenditure, which is not covered by HMRC guidance.
+Added: The outcome of this will determine whether the Company can claim the enhanced rate of relief as a research intensive company.
+Added: Confirmation of the position has been sought from HMRC under a non-statutory clearance application and the Company is awaiting a response.
+Added: For the year ended December 31, 2023, the Company has accounted for its R&D tax credit on the basis that it was not research intensive.
+Added: For the year ended December 31, 2024 the Company believes that it would meet the R&D intensity condition regardless of whether it can net off the exchange gains and losses arising from the intercompany loan, and has therefore calculated its R&D tax credit at the enhanced rate on the basis that it is research intensive.
+Added: The enhanced rate for a payable credit is 14.5% compared to the standard rate of 10%, which when applied to qualifying expenditure enhanced by 86% to 186%, gives an effective rate of 27% on qualifying in house expenditure and 17.5% for qualifying subcontracted expenditure (to unconnected subcontractors).
The Company currently meets the conditions of the SME regime.
−Removed: A large portion of costs relating to research and development, clinical trials and manufacturing activities are eligible for inclusion within these tax credit cash rebate claims.
−Removed: The Company is subject to corporate taxation in the UK.
+Added: A large portion of costs relating to R&D, clinical trials and clinical manufacturing activities are eligible for inclusion within these tax credit cash rebate claims.
+Added: The Company is subject to corporation tax in the UK.
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.
−Removed: The UK research and development tax credit is fully refundable to the Company and is not dependent on current or future taxable income.
−Removed: As a result, the Company has recorded the entire benefit from the UK research and development tax credit as a benefit which is included in net loss before income tax and accordingly, not reflected as part of the income tax provision.
−Removed: If, in the future, any UK research and development tax credits generated are needed to offset a corporation tax liability in the UK, that portion would be recorded as a benefit within the income tax provision and any refundable portion not dependent on taxable income would continue to be recorded within other income, net.
−Removed: 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: In addition, there is a maximum cap in respect of a given project of € 7.5 million which may impact the Company’s ability to claim R&D tax credits in future.
−Removed: Further, the U.K.
−Removed: 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.
−Removed: 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.
−Removed: If such exception does not apply, this could restrict the amount of payable credit that the Company claims.
+Added: The benefit from 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 R&D tax credits recoverable in the UK.
+Added: The UK R&D tax credit is fully refundable to the Company and is not dependent on current or future taxable income.
+Added: As a result, the Company has recorded the entire benefit from the UK R&D tax credit as a benefit which is included in net loss before income tax and accordingly, not reflected as part of the income tax provision.
+Added: If, in the future, any UK R&D tax credits generated are needed to offset a corporation tax liability in the UK, that portion would be recorded as a benefit within the income tax provision and any refundable portion not dependent on taxable income would continue to be recorded within other income, net.
+Added: For accounting periods starting on or after April 1, 2024, the SME and RDEC regimes have been merged, which will impact us for the first time from January 1, 2025.
+Added: Under this new merged regime, for non-research intensive companies, the effective net credit will be 16.2% for in-house expenditure, and 10.5% for subcontracted expenditure (paid to unconnected subcontractors), but this merged regime will apply to both SME and large companies.
+Added: An enhanced rate of relief is available for research intensive companies, which is approximately 27.0% for qualifying expenditure and approximately 17.5% for qualifying subcontracted expenditure, but as well as meeting the R&D intensity condition, the Company must be a loss making SME.
+Added: The Company may not be able to continue to claim enhanced R&D tax credits under the research intensive regime in the future depending on its rate of growth such that it is no longer an SME or because of the profile of its expenditure.
+Added: Having qualified as a research intensive company in the current year, even if the R&D expenditure threshold is not met in the subsequent year, while the company remains an SME and loss making, it will continue to be eligible for the enhanced rate unless it fails the test for a second consecutive year.
+Added: There is a cap on repayable credits to a multiple of payroll taxes (broadly, to a maximum payable credit equal to £20,000 plus three times the total PAYE and NICs liability of the company) subject to an exemption which prevents the cap from applying.
+Added: That exemption requires the company to be creating, taking steps to create or managing intellectual property, as well as having qualifying R&D expenditure in respect of connected parties which does not exceed 15% of the total claimed.
+Added: If the exemption does not apply, this could restrict the amount of payable credit that we claim.
+Added: SME R&D reliefs (whether by way of additional deductions or payable tax credits) are also on a per project basis and each project is limited to a maximum cap of €7.5 million.
+Added: From January 1, 2025, the cap will no longer be applicable.
Unsurrendered UK losses may be carried forward indefinitely to be offset against future taxable profits, subject to numerous utilization criteria and restrictions.
2 unchanged sentences
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.
−Removed: For the years ended December 31, 2023 and 2022, the only component of
−Removed: accumulated other comprehensive loss is foreign currency translation adjustment.
+Added: For the years ended December 31, 2024 and 2023, the only component of accumulated other comprehensive loss is foreign currency translation adjustment.
Net Loss per Share
2 unchanged sentences
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: The Company enters into foreign currency contracts to reduce the risk that its cash flows and earnings will be adversely affected by foreign currency exchange rate fluctuations.
−Removed: The Company does not enter into foreign currency contracts for speculative purposes.
−Removed: The Company recognizes derivative instruments, which do not qualify for hedge accounting, as either assets or liabilities on the balance sheet at fair value.
−Removed: The Company records changes in the fair value (gains or losses) of the derivatives in the accompanying consolidated statements of operations and comprehensive loss as other income, net.
−Removed: The Company did not enter into any contracts during the year ended December 31, 2023.
−Removed: During the year ended December 31, 2022, the Company entered into and settled a foreign forward agreement, resulting in a positive fair value change of $ 2.3 million in other income.
−Removed: During the year ended December 31, 2021, the Company did not enter into any contracts.
Long-term Debt
4 unchanged sentences
Debt issuance costs consist of costs incurred in obtaining long-term financing.
−Removed: These costs are classified on the consolidated balance sheet as a direct deduction from the carrying amount of the related debt liability.
−Removed: These expenses are deferred and amortized as part of interest expense in the consolidated statement of operations using the effective interest rate method over the term of the debt agreement.
+Added: These costs are classified on the consolidated balance sheets as a direct deduction from the carrying amount of the related debt liability.
+Added: These expenses are deferred and amortized as part of interest expense in the consolidated statements of operations and comprehensive loss using the effective interest rate method over the term of the debt agreement.
On June 30, 2023, the Company entered into a warrant agreement with Hercules.
5 unchanged sentences
As part of this analysis, the Company determined it appropriate to account for the PIPE Warrants as equity.
−Removed: The Company measures warrants at inception at fair value using the Black-Scholes valuation model.
+Added: The Company measured warrants at inception at fair value using the Black-Scholes valuation model.
Assumptions used in the warrant pricing model include the following:
1 unchanged sentence
The Company lacks sufficient company-specific historical and implied volatility information for its ordinary shares.
−Removed: Therefore, it estimates its expected share volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price.
+Added: Therefore, it estimates its expected share volatility using a blended rate of:
+Added: (1) historical volatility of publicly traded peer companies and (2) the Company’s historical volatility since being publicly traded since September 2020.
+Added: The Company expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price.
Expected term.
10 unchanged sentences
Recently Issued Accounting Pronouncements
−Removed: In November 2023, the Financial Accounting Standard Board ("FASB") issued new guidance designed to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses per segment.
−Removed: The guidance is effective for all fiscal years beginning after December 15, 2023, and for interim periods beginning after December 15, 2024.
−Removed: The new standard must be adopted on a retrospective basis and early adoption is permitted.
−Removed: The Company is not early adopting the standard.
−Removed: We are currently evaluating this guidance to determine its impact on our consolidated financial statements.
−Removed: In December 2023, the FASB issued new guidance designed to improve income tax disclosure requirements, primarily through increased disaggregation disclosures within the effective tax rate reconciliation as well as enhanced disclosures on income taxes paid.
+Added: In December 2023, the FASB issued ASU 2023-09 - Income Taxes (Topic 740):
+Added: Improvements to Income Tax Disclosures, designed to improve income tax disclosure requirements, primarily through increased disaggregation disclosures within the effective tax rate reconciliation as well as enhanced disclosures on income taxes paid.
The guidance is effective for all fiscal years beginning after December 15, 2024.
1 unchanged sentence
The Company is not early adopting the standard.
−Removed: We are currently evaluating this guidance to determine its impact on our consolidated financial statements.
+Added: We are currently evaluating this guidance to determine its impact on our consolidated financial statement disclosures.
+Added: In November 2024, the FASB issued ASU 2024-03 - Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):
+Added: Disaggregation of Income Statement Expenses, designed to improve disclosures, primarily through increased expense disaggregation.
+Added: The guidance is effective for all fiscal years beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027.
+Added: The new standard can be adopted on a prospective basis with an option to be adopted retrospectively and early adoption is permitted.
+Added: The Company is not early adopting the standard.
+Added: We are currently evaluating this guidance to determine its impact on our consolidated financial statement disclosures.
Prepaid Expenses and Other Current Assets
1 unchanged sentence
UK R&D tax credit $ 20,712 $ 27,877
−Removed: Prepaid insurance premium 1,885 2,818
Prepaid research and development
+Added: Prepaid income tax
VAT recoverable 1,109 1,052
+Added: Prepaid insurance premium
Other current assets 2,191 1,895
$ 35,821 $ 40,658
+Added: During the year ended December 31, 2024, the Company received $ 14.9 million and $ 13.6 million from the UK government for the 2022 and 2023 R&D tax credit, respectively.
Long-term Prepaid Expenses and Other Assets
2 unchanged sentences
Property and equipment 189 423
−Removed: Other investment 469 469
$ 6,595 $ 7,049
1 unchanged sentence
Accrued expenses and other liabilities consisted of the following (in thousands):
+Added: Accrued compensation and benefit costs $ 7,914 $ 7,069
Accrued research and development expense 3,724 2,117
Accrued professional expenses 1,532 1,077
−Removed: Accrued compensation and benefit costs 7,069 5,534
−Removed: Payroll tax payable 13 167
+Added: Income taxes payable
Other liabilities 1,325 1,038
$ 14,495 $ 11,301
−Removed: On June 30, 2023, the Company entered into the Loan Agreement with Hercules, which provided for aggregate maximum borrowings of up to $ 50.0 million, consisting of (i) a term loan of $ 30.0 million, which was funded on the Effective Date, (ii) subject to the Company achieving certain performance milestones and available until December 15, 2024, an additional term loan of $ 10.0 million, and (iii) subject to the approval of Hercules’ investment committee in its sole discretion, and available during the interest-only period, an additional term loan of $ 10.0 million.
+Added: The costs associated with the strategic reorganization, during the fourth quarter of 2024, were not material.
+Added: On June 30, 2023 (the “Effective Date”), the Company entered into the Loan Agreement with Hercules, which provided for aggregate maximum borrowings of up to $ 50.0 million, consisting of (i) a term loan of $ 30.0 million, which was funded on the Effective Date, (ii) subject to the Company achieving certain performance milestones and available until June 30, 2025, an additional term loan of $ 10.0 million, and (iii) subject to the approval of Hercules’ investment committee in its sole discretion, and available during the interest-only period, an additional term loan of $ 10.0 million.
The term loan will mature on July 1, 2027.
3 unchanged sentences
Payments under the Loan Agreement are interest only until the first principal payment is due on July 1, 2025 (or if the Borrowers achieve certain performance milestones, the interest only period may be extended to January 2, 2026 and, upon the achievement of certain additional performance milestones, the interest only period may be extended to July 1, 2026), followed by equal monthly payments of principal and interest through the scheduled maturity date, July 1, 2027.
−Removed: The Company incurred fees and transaction costs totaling $ 3.3 million associated with the initial term loan, which are recorded as a reduction to the carrying value of the long-term debt in the consolidated balance sheet.
+Added: The Company incurred fees and transaction costs totaling $ 3.3 million associated with the initial term loan, which are recorded as a reduction to the carrying value of the long-term debt in the consolidated balance sheets.
These fees included $ 0.4 million of facility fees, $ 0.8 million of company fees, $ 0.7 million in warrants, and $ 1.4 million of end of term charges.
4 unchanged sentences
The Loan Agreement includes a financial covenant requiring us to maintain a minimum level of $ 22.5 million of cash during the period commencing on July 1, 2024 (subject to adjustment if certain performance milestones are met).
−Removed: Company meets the performance milestones, the minimum cash covenant will not apply if its market capitalization is at least $ 750.0 million.
+Added: If the Company meets the performance milestones, the minimum cash covenant will not apply if its market capitalization is at least $ 750.0 million.
The Company was in compliance with all covenants of the Loan Agreement as of December 31, 2024.
6 unchanged sentences
Carrying value of long-term debt
+Added: current portion
+Added: Non-current portion
Future principal payments, including End of Term Charge, are as follows (in thousands):
−Removed: December 31, 2024 —
−Removed: December 31, 2025 6,572
−Removed: December 31, 2026 14,166
−Removed: December 31, 2027 10,687
+Added: Year ending December 31, 2025
+Added: Year ending December 31, 2026
+Added: Year ending December 31, 2027
Total $ 31,425
−Removed: Interest expense associated with the Loan Agreement for the year ended December 31, 2023 was $ 2.2 million.
+Added: Interest expense associated with the Loan Agreement for the years ended December 31, 2024 and 2023 was $ 4.5 million and $ 2.2 million, respectively.
Shareholders’ Equity
Ordinary Shares
−Removed: On May 4, 2021, the Company sold 4,000,000 ordinary shares in connection with its follow-on offering.
−Removed: On May 19, 2021 the underwriters exercised their option to purchase an additional 600,000 ordinary shares.
−Removed: This capital raise resulted in net proceeds of approximately $ 154.8 million after deducting underwriting fees and offering costs.
Each ordinary share entitles the holder to one vote on all matters submitted to a vote of the Company’s shareholders.
6 unchanged sentences
During the year ended December 31, 2024, a total of 107,644 restricted share units vested, of which 83,527 shares were issued and 24,117 shares were settled.
+Added: During the year ended December 31, 2023, a total of 96,177 restricted share units vested, of which 69,120 shares were issued and 27,057 shares were settled.
During the year ended December 31, 2023, a total of 78,022 ordinary shares were issued in settlement of restricted share units, of which 8,902 shares were vested and not issued at December 31, 2022.
−Removed: 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, 8,902 shares were vested but had not been issued and 8,986 shares were settled at December 31, 2022.
−Removed: During the year ended December 31, 2022, a total of 82,622 shares were issued in settlement, of which 57,875 vested in 2021 and 24,747 vested in 2022.
−Removed: 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.
−Removed: During the years ended December 31, 2023, 2022, and 2021 the Company issued in total 52,482 , 22,160 and nil shares, respectively, under the employee share purchase plan.
+Added: During the years ended December 31, 2024 and 2023 the Company issued in total 74,155 and 52,482 shares, respectively, under the employee share purchase plan.
Deferred Shares
Immediately prior to the completion of the Company’s IPO in September 2020, the different classes of issued share capital of Compass Pathways plc were reorganized 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.
+Added: 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
+Added: £ 21,921.504 in the capital of the Company was created and transferred to the Company.
On June 28, 2023, the single deferred share was cancelled.
3 unchanged sentences
On August 18, 2023, in connection with the PIPE, the Company issued and sold warrants to purchase up to 16,076,750 ADSs, each representing one ordinary share, at a purchase price of $ 9.93 per ADS.
−Removed: The PIPE Warrants will become exercisable for a three year period beginning in February 2024.
+Added: The PIPE Warrants became exercisable for a three year period beginning in February 2024.
+Added: Through December 31, 2024, PIPE Warrants were exercised for 3,752,050 ADSs, resulting in $ 37.3 million in exercise proceeds.
Share-Based Compensation
15 unchanged sentences
The ESPP initially reserved and authorized 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 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
−Removed: administrator.
+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.
13 unchanged sentences
and (iii) monthly vesting over four year service period.
−Removed: During the years ended December 31, 2023, 2022 and 2021 , the Company granted options to purchase 2,560,916 , 2,120,783 and 1,043,702 ordinary shares to employees and non-employees, respectively.
2022 Inducement Option Award
3 unchanged sentences
Restricted Share Units
−Removed: A summary of the changes in the Company’s unvested restricted share units during the years ended December 31, 2023 and 2022 are as follows:
+Added: A summary of the changes in the Company’s unvested restricted share units during the year ended December 31, 2024 is as follows:
Number of Shares Weighted Average Grant Date Fair Value
9 unchanged sentences
Share Options
−Removed: The following table summarizes the Company’s share options activity for the years ended December 31, 2023 and 2022:
+Added: The following table summarizes the Company’s share options activity for the year ended December 31, 2024:
Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands)
17 unchanged sentences
Year Ended December 31,
−Removed: 2023 2022 2021
−Removed: Expected option life (years) 5.70 years 5.95 years 5.73 years
+Added: Expected option life (years) 5.1 years 5.7 years
Expected volatility 86.05 % 87.33 %
5 unchanged sentences
Year Ended December 31,
−Removed: 2023 2022 2021
Research and development 10,309 8,910
3 unchanged sentences
Year Ended December 31,
−Removed: 2023 2022 2021
United Kingdom ( 156,711 ) ( 120,320 )
4 unchanged sentences
Year Ended December 31,
−Removed: 2023 2022 2021
Current income tax provision
20 unchanged sentences
( 1,214 ) ( 2,259 )
−Removed: Equity compensation
−Removed: 33 ( 782 ) ( 8,302 )
+Added: Share-based compensation
Change in UK tax rate
−Removed: ( 1,258 ) ( 3,609 ) ( 10,147 )
Other ( 129 ) 18
2 unchanged sentences
Year Ended December 31,
−Removed: 2023 2022 2021
Net operating loss carryforward $ 84,927 $ 64,747
7 unchanged sentences
Net deferred tax assets $ 3,774 $ 3,336
−Removed: As of December 31, 2023, 2022 and 2021, the Company had UK net operating loss carryforwards of approximately $ 259.0 million, $ 176.9 million and $ 144.0 million, respectively, that can be carried forward indefinitely.
+Added: As of December 31, 2024 and 2023, the Company had UK net operating loss carryforwards of approximately $ 339.7 million, and $ 252.3 million, respectively, that can be carried forward indefinitely.
Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2024 and 2023 related primarily to the increases in net operating loss and were as follows (in thousands):
Year Ended December 31,
−Removed: 2023 2022 2021
Valuation allowance at beginning of year $ 76,072 $ 51,909
1 unchanged sentence
Increases recorded to CTA ( 1,393 ) 3,192
−Removed: Decreases recorded to CTA — ( 4,612 ) ( 697 )
Valuation allowance at end of year $ 100,090 $ 76,072
1 unchanged sentence
As of December 31, 2024 and 2023, 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
−Removed: preceding years.
+Added: The Company considered all available evidence, both positive and negative, which included the results of operations for the current and 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.
6 unchanged sentences
As of December 31, 2024 and 2023, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company’s statements of operations and comprehensive loss.
−Removed: The Company and its subsidiaries file corporation tax returns in the U.K.
−Removed: and income tax returns in the U.S.
+Added: The Company and its subsidiaries file corporation tax returns in the UK and income tax returns in the U.S.
To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the federal, state, or foreign tax authorities, if such tax attributes are utilized in a future period.
−Removed: During the second quarter of 2021, the Finance Act 2021 (the Act) was enacted in the U.K..
+Added: During the second quarter of 2021, the Finance Act 2021 (the Act) was enacted in the UK.
The Act increased the main corporation tax rate from 19% to 25% effective April 1, 2023 and enhanced the first-year capital allowance on qualifying new plant and machinery assets effective April 1, 2021.
−Removed: The effects on the Company’s existing deferred tax balances have been recorded and are offset by the valuation allowance maintained against the Company’s U.K.
−Removed: net deferred tax assets.
+Added: The effects on the Company’s existing deferred tax balances have been recorded and are offset by the valuation allowance maintained against the Company’s UK net deferred tax assets.
Net Loss Per Share
−Removed: Basic and diluted net loss per share attributable to ordinary shareholders was calculated as follows (in thousands, except share and per share amounts):
−Removed: Year Ended December 31,
−Removed: 2023 2022 2021
−Removed: Net loss $ ( 118,464 ) $ ( 91,505 ) $ ( 71,742 )
−Removed: Net loss attributable to ordinary shareholders - basic and diluted $ ( 118,464 ) $ ( 91,505 ) $ ( 71,742 )
−Removed: Weighted-average number of ordinary shares used in net loss per share - basic and diluted 51,028,024 42,436,292 39,997,587
−Removed: Net loss per share - basic and diluted $ ( 2.32 ) $ ( 2.16 ) $ ( 1.79 )
+Added: The Company computes basic net loss per share by dividing net loss by the weighted-average number of shares outstanding.
+Added: The Company computes diluted net loss per share by dividing net loss by the weighted-average number of shares and dilutive potential share equivalents then outstanding during the period.
The Company’s potentially dilutive securities, which include unvested ordinary shares, unvested restricted share units, options granted and warrants, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share.
2 unchanged sentences
Year Ended December 31,
−Removed: 2023 2022 2021
Unvested restricted share units 658,553 320,203
−Removed: Vested restricted share units, for which shares are not in issue — 17,888 57,875
Share options 8,235,619 6,969,328
3 unchanged sentences
New York, USA
−Removed: In August 2022, the Company entered into a twelve month membership agreement with WeWork for rentable office space.
−Removed: The membership was cancellable with 90 days’ notice.
−Removed: This membership was accounted for as a short-term lease as the Company was not reasonably certain to extend the lease beyond twelve months and was therefore not recognized on the Company’s consolidated balance sheets.
−Removed: On October 31, 2023, the Company terminated the membership agreement with WeWork for rentable office space in New York, NY.
−Removed: The Company is not required to pay any membership fees, for any period, following the termination date.
In September 2023, the Company entered into a lease agreement for office space located in New York, NY, that was undergoing construction to get the space ready for use.
6 unchanged sentences
Soho, London, UK
−Removed: In July 2021, the Company entered into a two-year operating lease with Fora Space Limited commencing on September 1, 2021.
−Removed: The noncancellable term is 24 months and there was no option to extend the lease.
−Removed: The recurring residency fee per month is £ 136,200 , and the Company paid a refundable deposit of £ 136,200 at the execution of the agreement.
−Removed: Additionally, at the start of each calendar year, the monthly residency fee was subject to an automatic inflation linked increase of the previous years’ amount.
In April 2023, the Company entered into a two-year operating lease with Fora Space Limited commencing on September 1, 2023.
7 unchanged sentences
Year Ended December 31,
−Removed: 2023 2022 2021
Operating lease cost $ 2,570 $ 2,331
11 unchanged sentences
December 31, 2027 94
−Removed: December 31, 2027 95
Total future minimum lease payments $ 2,120
12 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.
+Added: Segment Reporting
+Added: The Company has one operating segment.
+Added: The table below is a summary of the segment loss, including significant segment expenses (in thousands):
+Added: Year ended December 31,
+Added: Operating expenses:
+Added: Research and Development:
+Added: Development expenses
+Added: $ 76,993 $ 48,306
+Added: Personnel expenses
+Added: 26,707 23,533
+Added: Non-cash share-based compensation expense
+Added: Facilities and other expenses 1
+Added: General and Administrative:
+Added: Personnel expenses
+Added: 23,422 18,192
+Added: Legal and professional fees
+Added: Facilities and other expenses 1
+Added: 12,001 13,042
+Added: Non-cash share-based compensation expense
+Added: Total operating expenses
+Added: 178,205 136,919
+Added: Operating loss
+Added: ( 178,205 ) ( 136,919 )
+Added: Benefit from R&D tax credit 21,097 12,875
+Added: Interest income 8,268 4,623
+Added: Interest expense ( 4,479 ) ( 2,204 )
+Added: Foreign exchange (losses) gains
+Added: ( 1,032 ) 3,686
+Added: Income tax expense ( 1,594 ) ( 780 )
+Added: $ ( 155,122 ) $ ( 118,464 )
+Added: 1 Other expenses include subscriptions and memberships, consulting fees and company insurance.
+Added: Related Party Transactions
+Added: Pursuant to the terms of a consulting agreement between the Company and Alithos, Inc., a company founded by our co-founder, former chief executive officer, former chairman and greater than 5% shareholder, George Goldsmith, the Company provided consulting services to Alithos.
+Added: Through December 31, 2024, the Company recorded $ 0.1 million in other income as a result of this transaction.
Subsequent Events
−Removed: During the first quarter quarter of 2024, through February 23, 2024, under our Sales Agreement with Cowen and Company, LLC, or Cowen, under which the Company may issue and sell its ADSs, each representing one ordinary share, we sold 2,154,798 ADSs, resulting in $ 22.4 million in net proceeds.
−Removed: On February 27, 2024, we received warrant exercise notices from an investor that participated in our August 2023 PIPE indicating its intention to exercise warrants for 901,050 ADSs.
−Removed: On February 28, 2024, we received the full exercise proceeds of $ 8.9 million for the notice to exercise warrants.
−Removed: The exercise of the warrants has not settled and the underlying ADSs have
−Removed: not yet been issued.
−Removed: The ADSs issuable upon exercise of these warrants are registered for resale pursuant to a resale registration statement on Form S-3 (File No.
−Removed: 333-274436) which was declared by the Securities and Exchange Commission (SEC) on September 18, 2023.
+Added: In January 2025, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with TD Securities (USA) LLC (“TD Cowen”), in which the Company issued and sold (i) 24,014,728 American Depositary Shares, each representing one ordinary share, nominal value £ 0.008 each, of the Company and accompanying warrants to purchase up to 24,014,728 ADSs, and (ii) in lieu of ADSs, to certain investors, pre-funded warrants to purchase up to 11,044,720 ADSs and accompanying 2025 ADS Warrants to purchase up to 11,044,720 ADSs.
+Added: The offering price is $ 4.2750 per ADS and accompanying 2025 ADS Warrant, and $ 4.2649 per Pre-Funded Warrant and accompanying 2025 ADS Warrant.
+Added: Gross proceeds from the 2025 Financing were approximately $ 150 million and the Company may receive up to approximately $ 353 million in additional gross proceeds if the 2025 ADS Warrants are fully exercised for cash.
+Added: The Pre-Funded Warrants have an exercise price of $ 0.0001 per ADS and are exercisable immediately.
+Added: The Pre-Funded Warrants expire when exercised in full.
+Added: The 2025 ADS Warrants have an exercise price of $ 5.7960 per ADS and are
+Added: exercisable following a specified data milestone.
+Added: The 2025 ADS Warrants will expire after three years .
+Added: Once the ADS Warrants become exercisable, the Company may force the exercise of the 2025 ADS Warrants (by way of cash or cashless exercise, at the Company’s option), in whole or in part, by delivering a notice of forced exercise to the holders, provided that the closing price for the Company’s ADSs on Nasdaq exceeded the warrant exercise price of $ 5.796 for the three consecutive trading days prior to the date on which the notice of forced exercise is delivered.
+Added: On February 27, 2025, we entered into a new Sales Agreement to govern our ATM offering program with TD Cowen under which we may issue and sell from time to time up to $ 150.0 million of our ADSs, subject to the terms of the Sales Agreement and only after the registration statement covering such ATM offering program has been declared effective.
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
−Removed: February 29, 2024
+Added: February 27, 2025 By:
/s/ Kabir Nath
5 unchanged sentences
(Principal Executive Officer) February 27, 2025
−Removed: /s/ Mary-Rose Hughes
−Removed: Interim Chief Financial Officer
+Added: /s/ Teri Loxam
+Added: Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
February 27, 2025
−Removed: Mary-Rose Hughes
−Removed: /s/ George Goldsmith Chair of Board of Directors February 29, 2024
−Removed: George Goldsmith
−Removed: /s/ David York Norton Lead Director February 29, 2024
−Removed: David York Norton
+Added: /s/ Gino Santini
+Added: Chair of Board of Directors February 27, 2025
/s/ Annalisa Jenkins Director February 27, 2025
5 unchanged sentences
Thomas Lönngren
−Removed: Ekaterina Malievskaia
−Removed: /s/ Robert McQuade Director February 29, 2024
+Added: /s/ Robert McQuade Director
+Added: February 27, 2025
Robert McQuade
1 unchanged sentence
Linda McGoldrick
−Removed: /s/ Wayne Riley Director February 29, 2024
+Added: /s/ David Norton
+Added: Director February 27, 2025
Wayne Riley, M.D., MPH, M.B.A.
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.