What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2024-03-21 compared with 2023-03-15 · 53 added, 158 removed, 234 unchanged (47% of the section changed)

Market for Registrant ’

s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information and Holders of Record

On November 2, 2021, shares of our common stock were approved for trading on the Nasdaq Capital Market under the symbol “CMPX”.

As of February 24, 2023, there were approximately 150 stockholders of record of our common stock.

On November 2, 2021, shares of our common stock were approved for trading on the Nasdaq Capital Market under the symbol “CMPX”.

As of March 15, 2024, there were approximately 100 stockholders of record of our common stock.

The actual number of stockholders is greater than this number and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.

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Securities Authorized for Issuance under Equity Compensation Plans

Our 2020 Stock Option and Incentive Plan (the “2020 Plan”) is the only equity incentive plan approved and adopted by our stockholders and provides for the issuance of shares of our common stock to our officers and other employees, directors and consultants.

The following table presents information as of December 31, 2023 with respect to compensation plans or arrangements under which shares of our common stock may be issued:

Plan category

Number of securities to be

issued upon exercise of

outstanding stock options,

warrants and rights (000's)

Weighted-average exercise price

of outstanding stock options,

warrants and rights

Number of securities

remaining available for

issuance under equity

compensation plans (000's)

Number of securities to be issued upon exercise of outstanding stock options, warrants and rights (000's)

Weighted-average exercise price of outstanding stock options, warrants and rights

Number of securities remaining available for issuance under equity compensation plans (000's)

Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

Includes 900 thousand shares of common stock issuable (subject to vesting) with respect to restricted stock units granted pursuant to the 2020 Plan, at a grant date fair market value of $3.83 per share.

Includes 1.5 million shares of common stock issuable (subject to vesting) with respect to restricted stock units granted pursuant to the 2020 Plan;

900 thousand at a grant date fair market value of $3.93 per share and 600 thousand at a grant date fair market value of $3.83 per share.

This value is not included in the weighted average exercise price.

Includes 193 thousand shares of common stock issuable (subject to vesting) with respect to restricted stock awards granted prior to adoption of the 2020 Plan at a grant date fair market value of $1.74 per share.

On January 1, 2024, an additional 5.1 million shares became available for issuance for a total of 10.2 million shares available for future issuance.

For further description of the equity compensation plans, see Note 9 to the financial statements included in this Annual Report on Form 10-K.

Recent Sales of Unregistered Securities

Private Investment in Public Entity ( “

PIPE ”

On November 2, 2022, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain accredited investors (the “Investors”) pursuant to which we agreed to sell and issue to the Investors in a PIPE financing an aggregate of 25,000,000 shares of our common stock at a purchase price of $3.21 per share.

The 25,000,000 shares were issued on November 4, 2022.

The gross proceeds to us from the PIPE are $80.3 million (before deducting placement agent fees and other expenses in connection with the offering).

In connection with the PIPE offering, we paid $4.5 million to the underwriters and for other legal and accounting costs, for net proceeds of $75.8 million.

The PIPE offering was made pursuant to our registration statement on Form S-3 (File No.

333-268652) filed with the SEC on December 2, 2022, and declared effective by the SEC on January 20, 2023, including a prospectus thereto that was filed with the SEC on January 24, 2023.

The PIPE offering was exempt from registration under Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated by the SEC thereunder.

The common stock in the PIPE offering was sold to “accredited investors”, as defined in Regulation D.

Management ’

s Discussion and Analysis of Financial Condition and Results of Operations.

Unless otherwise stated or the context otherwise indicates, references to the “

Company ”

or similar terms refer to Compass Therapeutics, Inc.

For further description of the equity compensation plans, see Note 9 to the consolidated financial statements included in this Annual Report on Form 10-K.

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

Unless otherwise stated or the context otherwise indicates, references to the “ Company ” , “ we ” , “ our ” , “ us ” or similar terms refer to Compass Therapeutics, Inc.

together with its wholly-owned subsidiaries, which we refer to as Compass Therapeutics.

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes and other financial information included in this Form 10-K.

Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-K, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties as described under the heading “

Special Note Regarding Forward-Looking Statements ”

elsewhere in this Form 10-K.

You should review the disclosure under the heading “

Risk Factors ”

in this Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

You should review the disclosure under the heading “ Risk Factors ” in this Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

We are a clinical-stage, oncology-focused biopharmaceutical company developing proprietary antibody-based therapeutics to treat multiple human diseases.

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We plan to advance our product candidates through clinical development as both standalone therapies and in combination with proprietary pipeline antibodies based on supportive clinical and nonclinical data.

On June 25, 2021, we consummated a definitive merger agreement (the “Merger Agreement”) with Trigr Therapeutics, Inc.

(“TRIGR”), a private biotechnology company.

Pursuant to the Merger Agreement, through our wholly-owned subsidiaries and a two-step merger structure, we acquired all of the outstanding shares of TRIGR (the “TRIGR Merger”).

Consideration payable to TRIGR shareholders at closing totaled an aggregate of 10,265,133 shares of our common stock (after giving effect to elimination of fractional shares that would otherwise be issued).

In addition, TRIGR shareholders are eligible to receive up to $9 million, representing earnout payments which are dependent on certain events, including a $2 million earnout payment which was paid in 2021 and a $5 million earnout which is dependent on biologics license application approval of a product candidate acquired in the transaction, renamed CTX-009.

Financial Overview

Since our inception, we have devoted substantially all of our efforts to organizing and staffing our Company, business planning, raising capital, research and development activities, building our intellectual property portfolio and providing general and administrative support for these operations.

We have funded our operations primarily with proceeds from private placements of preferred and common equity, an underwritten public offering in the fourth quarter of 2021 and borrowings under the 2018 loan and security agreement with Pacific Western Bank (the "2018 Credit Facility", which was paid off and cancelled as of November 2021).

Through December 31, 2022, we had received gross proceeds of $409 million from the sale of equity securities, including $80.3 million in gross proceeds from our additional common stock issued pursuant to a private investment in public equity (“PIPE”) (see Note 11 to our consolidated financial statements). 

We have funded our operations primarily with proceeds from the sale of equity securities of $412 million through December 31, 2023.

We have incurred significant operating losses since inception.

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We may also incur expenses in connection with the in-licensing or acquisition of additional product candidates.

Furthermore, we expect to incur additional costs associated with operating as a public company, including significant legal, accounting, investor relations, compliance and other expenses that we did not incur as a private company.

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy.

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As of December 31, 2023, we had $152.5 million in cash, cash equivalents and marketable securities.

Based on our research and development plans, we expect that these cash resources will enable us to fund our operating expenses and capital expenditures requirements into 2026.

Based on our research and development plans, we expect that these cash resources will enable us to fund our operating expenses and capital expenditures requirements into mid-2026.

We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all.

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Listing on the Nasdaq Capital Market

On November 2, 2021, shares of our common stock were approved for trading on the Nasdaq Capital Market under the symbol “CMPX”.

Reverse Merger

We were originally incorporated as Olivia Ventures, Inc.

(“Olivia”) in the State of Delaware on March 20, 2018.

Prior to the Merger (as defined below), Olivia was a “shell company”

(as defined in Rule 12b-2 of the Exchange Act).

On June 17, 2020, we completed a merger (the “Merger”) pursuant to an Agreement and Plan of Merger and Reorganization, by and among us, Compass Acquisition LLC and Compass Therapeutics, and, as a result, Compass Therapeutics became a wholly-owned subsidiary of the Company.

Additionally, certain of our wholly-owned subsidiaries, each, a Blocker Merger Sub, merged with and into the applicable blocker entity (the "Blockers"), in transactions which we refer to as the Blocker Mergers.

At the effective time of the Merger and the applicable effective time of each Blocker Merger, collectively, the Effective Time, an aggregate of 31,627,139 shares of its common stock were issued to holders of common membership interests of Compass Therapeutics (including common membership interests issued upon the conversion of preferred membership interests) and 7,428,217 shares of its common stock were issued to the holders of equity interests of the Blockers.

The issuances of shares of our common stock to the security holders of Compass Therapeutics and the Blockers are collectively referred to as the Share Conversion.

In addition, 2,930,836 shares of our common stock were reserved for issuance under our 2020 Stock Option and Incentive Plan.

Immediately prior to the Effective Time, an aggregate of 4,000,000 of the 5,000,000 shares of our common stock held by pre-Merger stockholders of Olivia Ventures, Inc.

were forfeited and surrendered for cancellation (the "Stock Forfeiture").

The Merger and the Blocker Mergers were treated as a recapitalization and reverse acquisition by us for financial reporting purposes.

Compass Therapeutics is considered the acquirer for accounting purposes, and the historical financial statements of Olivia before the Merger have been replaced with the historical financial statements of Compass Therapeutics in this and future filings with the SEC.

The Merger is being treated as a tax-free reorganization under Section 368(a) of the Code.

The following discussion highlights Compass Therapeutics, Inc.’s consolidated results of operations and the principal factors that have affected our financial condition as well as our liquidity and capital resources for the periods described and provides information that management believes is relevant for an assessment and understanding of the consolidated balance sheets and the consolidated statements of operations and comprehensive loss presented herein.

The following discussion and analysis are based on our consolidated financial statements contained in this Form 10-K, which we have prepared in accordance with United States generally accepted accounting principles.

You should read this discussion and analysis together with such consolidated financial statements and the related notes thereto.

Private Placement Offering

On June 19, 2020, we sold 12,096,442 shares of our common stock pursuant to the Private Placement offering of our common stock at a purchase price of $5.00 per share.

The aggregate gross proceeds from the Private Placement were approximately $60.5 million (before deducting placement agent fees and other expenses in connection with the Private Placement).

In connection with the Private Placement, we paid $6.3 million to the placement agents (and for other legal and accounting costs), for net proceeds of $54.2 million.

The Private Placement was exempt from registration under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated by the SEC thereunder.

The common stock in the Private Placement was sold to “accredited investors”, as defined in Regulation D, and was conducted on a “reasonable best efforts”

Follow-On Public Offering

On November 2, 2021, we sold through an underwritten public offering, with SVB Leerink LLC, as representative of the underwriters, 35,715,000 shares of our common stock, at a price to the public of $3.50 per share, less underwriting discounts and commissions.

We granted the underwriters a 30-day option to purchase up to an additional 5,357,250 shares of common stock, at the public offering price of $3.50, less any underwriting discounts and commissions.

On December 2, 2021, pursuant to this 30-day option, we sold an additional 3,271,857 shares of our common stock, for a total of 38,986,857 shares of common stock sold as part of the Follow-On Public Offering.

The aggregate gross proceeds from the Follow-On Public Offering were approximately $136.5 million (before deducting placement agent fees and other expenses in connection with the offering).

In connection with the Follow-On Public Offering, we paid $8.5 million to the underwriters (and for other legal and accounting costs), for net proceeds of $128.0 million.

The Follow-On Public Offering was made pursuant to our shelf registration statement on Form S-3 (File No.

333-257821), including a base prospectus that was declared effective by the U.S.

Securities and Exchange Commission (the “SEC”) on July 20, 2021, as supplemented by a prospectus supplement dated November 1, 2021 that was filed with the SEC on November 3, 2021 (the “Prospectus Supplement”).

Private Investment in Public Entity ( “

PIPE ”

On November 2, 2021, shares of our common stock were approved for trading on the Nasdaq Capital Market under the symbol “CMPX”.

Private Investment in Public Entity ( “ PIPE ” ) Offering

On November 2, 2022, we entered into a securities purchase agreement ("the "Securities Purchase Agreement") with certain accredited investors (the "Investors") pursuant to which we agreed to sell and issue to the Investors in a PIPE financing an aggregate of 25,000,000 shares of our common stock at a purchase price of $3.21 per share.

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The PIPE offering was exempt from registration under Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated by the SEC thereunder.

The common stock in the PIPE offering was sold to “accredited investors”, as defined in Regulation D.

COVID-19 Update

In December 2019, COVID-19, was declared a pandemic by the World Health Organization.

The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19, the actions taken to contain it or mitigate its impact, and the economic impact on local, regional, national and international markets.

We have been carefully monitoring the COVID-19 pandemic and its potential impact on our business and have taken important steps to help ensure the safety of our employees and their families and to reduce the spread of COVID-19 community-wide.

We are ensuring that essential staffing levels at our operations remain in place, including maintaining key personnel in our laboratory facilities.

We have implemented stringent safety measures designed to create a safe and clean environment for our employees as we continue to comply with applicable federal, state and local guidelines instituted in response to the COVID-19 pandemic.

We have been able to continue to pursue clinical trials of CTX-009 and of CTX-471 without significant delays, however, we have experienced some temporary delays in the enrollment of patients due to the COVID-19 pandemic.

We could experience some additional temporary delays or disruptions due to the ongoing COVID-19 pandemic, including limited or reduced patient access to trial investigators, hospitals and trial sites, delayed initiation of new clinical trial sites and limited on-site personnel support at various trial sites, which could adversely impact our development plans, including the initiation of planned clinical trials and our ability to conduct ongoing clinical trials.

We also expect that COVID-19 precautions may directly or indirectly impact (i) our employees and business operations or personnel at third-party suppliers and other vendors in the U.S.

and other countries, (ii) the availability, cost or supply of materials, and (iii) the timeline for our ongoing clinical trial and potential future trials.

We are continuing to assess the potential impact of the COVID-19 pandemic on our current and future business and operations, including our expenses and clinical trials, as well as on our industry and the healthcare system.

The common stock in the PIPE offering was sold to “accredited investors”, as defined in Regulation D.

At-The-Market ( “ ATM ” ) Offering

In June 2023, we sold, through our Open Market Sale Agreement SM with Jefferies LLC, 951,873 shares of common stock at an average price of $3.28 for total proceeds of $3.1 million and net proceeds of $3.0 million.

Inflation Reduction Act of 2022

The Inflation Reduction Act of 2022 (“IRA”) was enacted on August 16, 2022.

The IRA includes provisions imposing a 1% excise tax on share repurchases that occur after December 31, 2022 and introduces a 15% corporate alternative minimum tax on adjusted financial statement income. 

We do not expect the IRA to have a material impact on our consolidated financial statements.

The Inflation Reduction Act of 2022 (“IRA”) was enacted on August 16, 2022.

To date, the IRA has not had a material impact on our consolidated financial statements.

Components of Results of Operations

In-process R&D

In-process R&D expenses consists of the 2021 acquisition of TRIGR, whose primary asset is CTX-009, an anti-DLL4 x VEGF-A bispecific antibody.

As we expense research and development costs as incurred, the cost of this acquisition was expensed in 2021.

See Note 16 to the consolidated financial statements contained in this Form 10-K for further description of the accounting of this transaction.

There were no In-process R&D expenses in 2022.

Research and development

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employee-related expenses, including salaries, related benefits and equity-based compensation expense, for employees engaged in research and development functions;

Contract Research Organizations (“CROs”) that are primarily engaged to support the clinical development of our product candidates;

Contract Development Manufacturing Organizations (“CDMOs”) that are primarily engaged to provide drug substance and drug product for our clinical trials, research and development programs, as well as investigative sites and consultants that conduct our clinical trials, nonclinical studies and other scientific development services;

Contract Research Organizations (“CROs”) that are primarily engaged to support the clinical development of our product candidates;

cost of acquiring and manufacturing nonclinical and clinical trial materials, including manufacturing registration and validation batches;

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competition with other products;

the impact of any business interruptions to our operations, including the timing and enrollment of patients in our planned clinical trials, or to those of our manufacturers, suppliers, or other vendors resulting from the ongoing COVID-19 pandemic or similar public health crisis;

a continued acceptable safety profile of our therapies following approval.

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We also anticipate that we will incur increased accounting, audit, legal, regulatory, compliance and director and officer insurance costs, as well as investor and public relations expenses associated with being a public company.

Other income (expense)

In 2022, the main component of other income was interest income from marketable securities.

In 2021, the main component was interest expense related to cash interest under our 2018 Credit Facility that we entered into in March 2018, which as of December 31, 2021 had been terminated.

In addition, other income and expenses include realized gains and losses on sale or disposal of equipment.

In 2023 and 2022, the main component of other income was interest income from marketable securities.

We are organized as a Delaware corporation and treated as a c-corporation for federal and state income taxes.

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All such taxes have been recorded in our financial statements.

As of December 31, 2022 we recorded a net deferred tax asset of $28.0 million primarily related to a net operating loss carryforward, section 174 capitalization, research and development tax credit carryforward, and capitalized licensing fees.

As of December 31, 2023 we recorded a deferred tax asset of $44.3 million primarily related to a net operating loss carryforward, section 174 capitalization, research and development tax credit carryforward, and capitalized licensing fees.

The asset has a corresponding full deferred tax valuation allowance.

Pursuant to Section 382 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an ownership change (generally defined as a greater than 50% change (by value) in the ownership of its equity over a three-year period), the corporation’s ability to use its pre-change net operating loss carryforwards and certain other pre-change tax attributes to offset its post-change income may be limited.

We may have experienced such ownership changes in the past, and we may experience ownership changes in the future as a result of shifts in our stock ownership, some of which are outside our control.

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General and administrative

In-Process R&D

Total operating expenses

Loss from operations

Other income (expense)

Loss before income tax expense

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Research and development expenses increased by $8.1 million from $30.0 million in 2022 to $38.1 million in 2023.

This increase was primarily attributable to a $10.3 million increase in clinical, manufacturing, toxicology studies and other costs related to our three main programs describe below.

This increase was primarily attributable to a $10.7 million increase in clinical and manufacturing costs related to our lead program, CTX-009 described below.

We track supplies, outsourced development, personnel costs and other research and development costs of specific programs.

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General and administrative expenses increased by $0.6 million from $11.7 million in 2022 to $12.2 million in 2023.

The increase was primarily attributable to higher stock compensation expense of $1.2 million offset by lower legal costs of $0.5 million.

The increase was primarily attributable to higher stock compensation expense of $1.0 million offset by lower insurance costs of $0.3 million.

We anticipate that our general and administrative expenses will increase in the future as we expand our operations to support our growing research and development efforts.

Other income (expense)

Other income (expense) increased by $2.7 million from $0.3 million of expense in 2021 to $2.4 million of income in 2022.

The primary change was an increase in interest income of $2.3 million and a decrease of interest expense of $0.4 million.

In-process R&D

In-process R&D expenses consists of the acquisition of TRIGR, whose primary asset is CTX-009, an anti-DLL4 x VEGF-A bispecific antibody.

As we expense research and development costs as incurred, the cost of this acquisition was expensed in 2021.

See Note 16 to the consolidated financial statements contained in this Form 10-K for further description of the accounting of this transaction.

Other income increased by $5.4 million from $2.4 million in 2022 to $7.9 million in 2023.

The change was from an increase in interest income of $5.4 million as a result of higher interest rates as compared to 2022.

Income tax expense

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We have funded our operations primarily with proceeds from private placements of preferred and common equity and an underwritten public offering in the fourth quarter of 2021.

Through December 31, 2022, we had received gross proceeds of $409 million from the sale of equity securities, including $136.5 million in gross proceeds from our Follow-On Public Offering (as defined above), $60.5 million in gross proceeds from the sale of our common stock in the Private Placement (as defined above) and $80.3 million in gross proceeds from a PIPE financing.

In addition, we received $15 million in term loan borrowings under the 2018 Credit Facility, which was paid off and cancelled as of November 2021.

Through December 31, 2023, we received gross proceeds of $412 million from the sale of equity securities, including $136.5 million in gross proceeds from our Follow-On Public Offering, $60.5 million in gross proceeds from the sale of our common stock in the Private Placement, $80.3 million in gross proceeds from a PIPE financing and $3.1 million in gross proceeds from sales through our ATM facility.

As of December 31, 2023, we had cash, cash equivalents and marketable securities of $152.5 million.

Additionally, we received an additional $17.6 million in net proceeds in the first quarter of 2024 from sales through our ATM facility.

On July 9, 2021, we filed an S-3 registration statement which became effective July 20, 2021.

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On December 2, 2022, we filed an S-3 registration statement which was declared effective by the SEC on January 20, 2023, for the shares issued through the PIPE offering.

In March 2018, we entered into a credit facility with Pacific Western Bank ("2018 Credit Facility") which matured on March 1, 2022 and consisted of $15.0 million in term loans.

We made interest-only payments through March 31, 2020, and beginning in April 2020, we began to make monthly payments of $625 thousand toward principal plus interest.

The 2018 Credit Facility included a success fee of $1.1 million to the lender which was paid upon completion of the Merger.

We paid the balance of this loan in November 2021.

As of December 31, 2021 and 2022, the Company had no loan obligations.

Funding Requirements

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Cash used in operating activities

Cash used in investing activities

Cash provided by (used in) investing activities

Cash provided by financing activities

Net increase (decrease) in cash, cash equivalents and restricted cash

Net decrease in cash and cash equivalents

Operating Activities

During the year ended December 31, 2023, we used $40.6 million of cash in operating activities, resulting from our net loss of $42.5 million and the change in operating assets and liabilities of $2.9 million, offset by non-cash charges of $4.8 million.

Our non-cash charges primarily consisted of stock-based compensation expense of $5.3 million and amortization of ROU asset of $1.1 million.

The change in our operating assets and liabilities of $1.4 million was related to the increase in prepaid expenses of $5.6 million, primarily from prepaid manufacturing expenses related to CTX-009, partially offset by an increase in short term liabilities of $4.3 million, primarily related to manufacturing expenses related to CTX-009.

Our non-cash charges primarily consisted of stock-based compensation expense of $6.1 million and amortization of ROU asset of $1.2 million offset by the amortization of premiums and discounts on marketable securities of $3.2 million.

The change in our operating assets and liabilities of $2.9 million was related to the decrease in accrued expenses of $9.2 million offset by an increase in prepaid expenses of $6.8 million, primarily related to the decrease in minimum obligations related to CTX-009 manufacturing contracts.

During the year ended December 31, 2022, we used $34.1 million of cash in operating activities, resulting from our net loss of $39.2 million and the change in operating assets and liabilities of $1.4 million, offset by non-cash charges of $6.4 million.

Our non-cash charges were comprised of the write-off of in-process R&D of $50.6 million, depreciation and amortization of $0.6 million, gain on disposal of equipment of $42 thousand, stock-based compensation expense of $4.0 million, non-cash interest expense of $41 thousand and amortization of ROU asset of $1.1 million.

The change in our operating assets and liabilities was primarily related to an increase in accrued expenses primarily driven by the $6.0 million accrued milestone payment.

Our non-cash charges primarily consisted of stock-based compensation expense of $5.3 million and amortization of ROU asset of $1.1 million.

The change in our operating assets and liabilities of $1.4 million was related to the increase in prepaid expenses of $5.6 million, primarily from prepaid manufacturing expenses related to CTX-009, partially offset by an increase in short term liabilities of $4.3 million, primarily related to manufacturing expenses related to CTX-009.

Investing Activities

During the year ended December 31, 2022 cash used in investing activities was $151.2 million, which was primarily attributed to the purchase of marketable securities of $200.1 million offset by the sale or maturity or marketable securities of $49.0 million.

We did not have marketable securities in 2021.

During the year ended December 31, 2021 cash used in investing activities was $1.8 million, which was attributed to purchase of property and equipment of $1.6 million, primarily from leasehold improvements in our new facility, $0.3 million from asset acquisition costs related to the TRIGR transaction and $0.1 million in proceeds from the sale of equipment.

During the year ended December 31, 2023 cash provided by investing activities was $27.0 million, which was primarily attributed to the net proceeds of marketable securities of $27.0 million.

During the year ended December 31, 2022, cash used in investing activities was $151.2 million, which was primarily attributed to the net purchase of marketable securities of $151.1 million.

Financing Activities

During the year ended December 31, 2023, cash provided by financing activities was $2.9 million.

This was primarily from the issuance of stock utilizing our ATM program for net proceeds of $3.0 million.

During the year ended December 31, 2022, we had $75.8 million of net cash provided by financing activities.

This was primarily due to the closing of the PIPE Offering in the fourth quarter of 2022, which resulted in net proceeds of $75.7 million.

During the year ended December 31, 2021, we had $118.6 million of net cash provided by financing activities.

This was primarily due to the closing of the Follow-on Public Offering in the fourth quarter of 2021, which resulted in net proceeds of $128.0 million that were partially offset by $9.4 million in payments under the 2018 Credit Facility.

Future Funding Requirements

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our need to implement additional internal systems and infrastructure, including financial and reporting systems.

We believe that our existing cash, cash equivalents and marketable securities as of December 31, 2022 will enable us to fund our operating expenses and capital expenditure requirements into 2026.

We believe that our existing cash, cash equivalents and marketable securities as of December 31, 2023 will enable us to fund our operating expenses and capital expenditure requirements into mid-2026.

We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

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Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity and debt financings, collaborations, strategic alliances, and marketing, distribution or licensing arrangements with third parties.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, our shareholders’

ownership interests may be materially diluted, and the terms of such securities could include liquidation or other preferences that adversely affect your rights as a common stockholder.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, our shareholders’ ownership interests may be materially diluted, and the terms of such securities could include liquidation or other preferences that adversely affect your rights as a common stockholder.

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

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This table does not include (i) any milestone payments that are not deemed probable under license agreements as the timing and likelihood of such payments are not known with certainty, (ii) any royalty payments to third parties as the amounts, timing and likelihood of such payments are not known, and (iii) contracts that are entered into in the ordinary course of business which are cancelable.

Critical Accounting Policies and Significant Judgments and Estimates

Critical Accounting Estimates

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States ("GAAP").

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Depending on the timing of payments to the service providers and the progress that we estimate has been made as a result of the service provided, we may record net prepaid or accrued expenses relating to these costs.

As of December 31, 2022, we have $6.4 million of accrued and prepaid manufacturing expenses for the purchase and manufacture of drug product for CTX-009 related to minimum contractual obligations with two CDMO’s.

Stock Awards and Unit-Based Compensation

The following table summarizes stock awards and unit-based compensation expense:

Year Ended December 31,

Research and development

General and administrative

Total stock compensation expense

See Notes 3 and 9 to our consolidated financial statements appearing in this Form 10-K for additional stock compensation information.

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In April 2012, the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") was enacted.

Under Section 107(b) of the JOBS Act, an “emerging growth company”

can delay the adoption of new or revised accounting standards until such time as those standards would apply to private companies.

Under Section 107(b) of the JOBS Act, an “emerging growth company” can delay the adoption of new or revised accounting standards until such time as those standards would apply to private companies.

We have made the election to delay the adoption of such accounting standards as provided in the JOBS Act.

There are other exemptions and reduced reporting requirements provided by the JOBS Act that we are currently evaluating.

For example, as an “emerging growth company”, we are exempt from Sections 14A(a) and (b) of the Exchange Act that would otherwise require us to (i) submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay”, “say-on-frequency”, and “golden parachutes”;

and (ii) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of our Chief Executive Officer’s compensation to our median employee compensation.

We also intend to rely on an exemption from the rule requiring us to provide an auditor’s attestation report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act.

We will continue to remain an “emerging growth company”

until the earliest of the following:

We will continue to remain an “emerging growth company” until the earliest of the following:

(i) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement;

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity