What changed in this filing

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Item 2. Management’s Discussion and Analysis

2020-11-09 compared with 2020-08-13 · 81 added, 84 removed, 240 unchanged (41% of the section changed)

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The following discussion of the financial condition and results of operations of Compass Therapeutics, Inc.

should be read in conjunction with the financial statements and the notes to those statements included in this Quarterly Report on Form 10Q for the period ended June 30, 2020.

should be read in conjunction with the financial statements and the notes to those statements included in this Quarterly Report on Form 10Q for the period ended September 30, 2020.

Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risk, uncertainties and assumptions.

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To date, we have funded our operations primarily with proceeds from the sale of our equity securities and borrowings from debt arrangements.

Through June 30, 2020, we have received $132.0 million in gross proceeds from the sale of Compass LLC equity securities, $15 million in term loan borrowings under the Compass LLC credit facility and $60.5 million in gross proceeds ($53.6 in net proceeds) from the sale of our common stock in a private placement.

Through September 30, 2020, we have received $132.0 million in gross proceeds from the sale of Compass LLC equity securities, $15.0 million in term loan borrowings under a credit facility with Pacific Western Bank, or the 2018 Credit Facility, and $54.2 million in net proceeds from the sale of our common stock in a private placement in June 2020.

We have incurred significant operating losses since inception and have not generated any revenue from the sale of products and we do not expect to generate any revenue from the sale of products in the near future, if at all.

Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of our treatments and any future product candidates.

Our net losses were $5.6 million and $8.8 million for the three months ended June 30, 2020 and 2019 and $12.0 million and $19.6 million for the six months ended June 30, 2020 and 2019, respectively.

We had an accumulated deficit of $133.9 million at June 30, 2020.

Our net losses were $9.1 million and $8.6 million for the three months ended September 30, 2020 and 2019 and $21.1 million and $28.1 million for the nine months ended September 30, 2020 and 2019, respectively.

We had an accumulated deficit of $143.0 million at September 30, 2020.

We expect to continue to incur significant expenses for at least the next several years as we advance through clinical development, develop additional product candidates and seek regulatory approval of any product candidates that complete clinical development.

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Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through equity and debt financings, or other capital sources, which may include collaborations with other companies or other strategic transactions.

As of March 31, 2020, we had $17.5 million in cash, cash equivalents and marketable securities.

In June 2020, we raised an aggregate of $53.6 million in net proceeds from a private placement of our common stock.

Based on our research and development plans, we expect that such cash resources will enable us to fund our operating expenses and capital expenditure requirements into the fourth quarter of 2021.

As of September 30, 2020, we had $55.5 million in cash and cash equivalents.

Based on our research and development plans, we expect that such cash resources will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2022.

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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The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Recent Developments

Reverse Merger

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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 the our common stock held by pre-Merger stockholders of Olivia Ventures, Inc.

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, or 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 before the Merger in this and future filings with the SEC.

filings with the SEC.

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

Private Placement Offering

On June 19, 2020, we sold 12,096,442 shares of our common stock pursuant to the initial closing of a private placement offering for up to 14,000,000 shares of our common stock, at a purchase price of $5.00 per share for approximately $53.6 million in net proceeds.

On June 19, 2020, we sold 12,096,442 shares of our common stock pursuant to the closing of a private placement offering, at a purchase price of $5.00 per share for approximately $54.2 million in net proceeds.

This offering is now closed.

COVID-19 Update

In December 2019, a novel strain of coronavirus, COVID-19, was reported to have surfaced in Wuhan, China.

As of June 2020, COVID-19 has spread to Europe, the United States and many other countries, and has been declared a pandemic by the World Health Organization.

As of September 2020, COVID-19 has spread to Europe, the United States and many other countries, and has been declared a pandemic by the World Health Organization.

In an effort to contain the spread of COVID-19, the United States, Europe and Asia have implemented severe travel restrictions, social distancing requirements, stay-at-home or shelter-in-place orders and have delayed the commencement of non-COVID-19-related clinical trials, among other restrictions.

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For those employees, we have implemented stringent safety measures designed to comply with applicable federal, state and local guidelines instituted in response to the COVID-19 pandemic.

To date, we have been able to c ontinue to pursue our Phase 1 clinical trial without delays or major difficulties despite the COVID-19 pandemic.

Nevertheless, we expect that COVID-19 precautions may directly or indirectly impact the timeline for our ongoing clinical trial and potential f uture trials.

For ongoing and planned clinical trials, we anticipate and have experienc ed some temporary delays or disruptions due to the 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 var ious trial sites, which could adversely impact our development plans, including the initiation of planned clinical trials and our ability to conduct ongoing clinical trials.

W e expect that COVID-19 precautions may directly or indirectly impact 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.

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a continued acceptable safety profile of our therapies following approval.

A change in the outcome of any of t hese variables with respect to the development of our product candidates could significantly change the costs and timing associated with the development of that product candidate.

A change in the outcome of any of these variables with respect to the development of our product candidates could significantly change the costs and timing associated with the development of that product candidate.

We may never succeed in obtaining regulatory approval for any of our product candidates.

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Interest income

Interest income consists primarily of interest income received on our cash and cash equivalents.

Interest income consists primarily of interest income received on our cash, cash equivalents and restricted cash.

Interest expense

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All such taxes have been recorded in our consolidated financial statements.

Subsequent to the Merger, we may not record any income tax benefits for the net loss we anticipate incurring in the future if we believe, based upon the weight of available evidence, that it is more likely than not that all of our net operating losses and tax credits will not be utilized.

Subsequent to the Merger, we have not recorded any income tax benefits for the net loss incurred as we believe, based upon the weight of available evidence, that it is more likely than not that all of our net operating losses and tax credits will not be utilized.

Results of Operations

Comparison of the Three Months Ended June 30, 2020 and 2019

The following table summarizes Compass Therapeutics, Inc.’s results of operations for the three months ended June 30, 2020 and 2019:

Three Months Ended June 30,

Comparison of the Three Months Ended September 30, 2020 and 2019

The following table summarizes our results of operations for the three months ended September 30, 2020 and 2019:

Three Months Ended September 30,

(in thousands)

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Research and development expenses

Research and development expenses decreased by $2.4 million from $5.4 million for the three months ended June 30, 2019 to $3.0 million for the three months ended June 30, 2020.

The decrease was primarily attributable to a reduction in headcount which resulted in a decrease in salaries and related benefits of $1.2 million.

Research and development expenses decreased by $2.3 million from $6.0 million for the three months ended September 30, 2019 to $3.7 million for the three months ended September 30, 2020.

The decrease was primarily attributable to a reduction in headcount which resulted in a decrease in salaries and related benefits of $0.7 million, and to $1.0 million related to a milestone payment we made under our collaboration agreement with Adimab LLC in 2019 while no such payments were made in 2020.

The reduced headcount resulted in an additional decrease in research and development expense related to lab supplies and general lab expense of $0.6 million.

In addition, other operating expense related research and development expenses decreased by $0.2 million.

The decrease in research and development expenses was partially offset by the initial expenses related to beginning clinical trials for our product candidate CTX-471 in the amount of $0.1 million.

We anticipate our research and development expenses to increase in future periods as we advance our IND-enabling studies for CTX-8371, advance CTX-8573 into IND-enabling studies and continue to further develop our other pre-clinical product candidates.

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Research and development expenses are summarized by program in the table below:

Three Months Ended June 30,

Unallocated research and development

Three Months Ended September 30,

NKP30 cell engagement platform

Unallocated research and development expenses

Total research and development expenses

General and Administrative Expenses

General and administrative expenses decreased by $1.2 million from $3.3 million for the three months ended June 30, 2019 to $2.1 million for the three months ended June 30, 2020.

The decrease was primarily attributable to a reduction in headcount which resulted in a decrease in salaries and related benefits of $0.8 million.

Legal expenses related to our intellectual property and consulting and professional fees decreased by $0.4 million as a result of a change in service providers and reduced use of external consulting services.

General and administrative expenses increased by $2.9 million from $2.4 million for the three months ended September 30, 2019 to $5.3 million for the three months ended September 30, 2020.

The increase was primarily attributable to increased legal and professional fees in the amount of $1.0 million and the issuance of stock options in August 2020 which resulted in increased stock compensation expense of $2.0 million.

Facilities costs also increased by $0.4 million for the three months ended September 30, 2020 compared to the corresponding period in 2019.

These increases were partially offset by reduced salary and benefits costs of $0.5 million resulting from reduced headcount.

We anticipate our general and administrative expenses to increase in future periods as we expand our operations to support our research and development efforts and operate as a publicly traded company .

Interest income

We recognized interest income of $7,000 and $0.2 million during the three months ended June 30, 2020 and 2019, respectively.

The decrease in interest income is primarily attributable to the lower average balance of our cash and cash equivalents.

We recognized interest income of $22,000 and $0.2 million during the three months ended September 30, 2020 and 2019, respectively.

The decrease in interest income is primarily attributable to the lower interest rates on our cash and cash equivalents.

Interest Expense

We recognized interest expense of $0.2 million and $0.3 million during each of the three months ended June 30, 2020 and 2019, respectively.

We began making principal payments in April 2020, reducing the average principal balance of our debt in the second quarter of 2020.

We recognized interest expense of $0.2 million and $0.3 million during each of the three months ended September 30, 2020 and 2019, respectively.

We began making principal payments in April 2020, reducing the average outstanding principal balance of our debt in the second quarter of 2020.

Change in fair value of derivative liability and loan success fee

We recognized a change in our derivative liability of $0.2 million and $32,000 during the three months ended June 30, 2020 and 2019, respectively.

The increase in fair value of the derivative liability is primarily attributable to the increased likelihood of a liquidity event occurring whereby a success fee payment would be payable as required under our 2018 Credit Facility.

The success fee was paid in June 2020 following the Merger.

We recognized a change in our derivative liability of $7,000 during the three months ended September 30, 2019.

The increase in fair value of the derivative liability during the 2019 period is primarily attributable to the increased likelihood of a liquidity event occurring whereby a success fee payment would be payable as required under our 2018 Credit Facility.

The success fee was paid in June 2020 following the Merger and as a result the balance of the derivative was zero.

Realized foreign exchange loss

Our realized foreign exchange losses were relatively small and unchanged during the three months ended June 30, 2020 and 2019 as we have a limited number of payment arrangements denominated in a currency other that the U.S.

Our realized foreign exchange losses were relatively small and unchanged during the three months ended September 30, 2020 and 2019 as we have a limited number of payment arrangements denominated in a currency other than the U.S.

Income tax expense

During the three months ended June 30, 2020 and 2019, we recognized income tax expenses of $16,000 and $26,000, respectively.

Our income tax expense is primarily attributable to the services that our wholly-owned subsidiary, which is a C corporation, provides at cost plus a profit margin.

Comparison of the Six Months Ended June 30, 2020 and 2019

The following table summarizes Compass Therapeutics, Inc.’s results of operations for the six months ended June 30, 2020 and 2019:

Six Months Ended June 30,

During the three months ended September 30, 2020 we did not recognize any income tax expenses.

During the three months ended September 30, 2019, we recognized income tax expenses of $26,000, which were primarily attributable to the services that our wholly-owned subsidiary, which is a C corporation, provided at cost plus a profit margin.

Comparison of the Nine Months Ended September 30, 2020 and 2019

The following table summarizes our results of operations for the nine months ended September 30, 2020 and 2019:

Nine Months Ended September 30,

(in thousands)

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Research and development expenses

Research and development expenses decreased by $6.1 million from $12.6 million for the six months ended June 30, 2019 to $6.6 million for the six months ended June 30, 2020.

Research and development expenses decreased by $8.6 million from $19.1 million for the nine months ended September 30, 2019 to $10.5 million for the nine months ended September 30, 2020.

The decrease was primarily attributable to a reduction in our research and development personnel and related expenses, and the completion of our preclinical efforts for our product candidate CTX-471 and the related filing of our IND in February 2019.

We initiated efforts to reduce our research and development workforce in April 2019 which resulted in a decrease in salaries and related benefits of $3.4 million.

The reduced headcount combined with the transition of CTX-471 to the clinic and completion of the pre-clinical studies and filing of our IND resulting in additional decrease in research and development expenses decreased by $3.4 million, of which $0.6 million was due to a milestone payment we made under our collaboration agreement with Adimab LLC in 2019 and no such payments were made in 2020.

In addition, the transition of CTX-471 to the clinic and the completion of pre-clinical studies and filing of our IND resulted in research and development expenses decreasing additionally by $4.7 million, of which $1.5 million was due to a milestone payment we made under our collaboration agreement with Adimab LLC in 2019 while no such payments were made in 2020.

Other research and development expenses decreased by $0.5 million.

The decrease in research and development expenses was partially offset by initial expenses related to beginning clinical trials for our product candidate CTX-471 in the amount of $0.2 million.

We anticipate our research and development expenses to increase in future periods as we begin our IND-enabling studies for CTX-8371 and continue to further develop our other pre-clinical product candidates.

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

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Research and development expenses are summarized by program in the table below:

Six Months Ended June 30,

Unallocated research and development

Nine Months Ended September 30,

NKP30 cell engagement platform

Unallocated research and development expenses

Total research and development expenses

General and Administrative Expenses

General and administrative expenses decreased by $2.3 million from $6.6 million for the six months ended June 30, 2019 to $4.3 million for the six months ended June 30, 2020.

The decrease was primarily attributable to a reduction in headcount which resulted in a decrease in salaries and related benefits of $1.4 million.

Legal expenses related to our intellectual property and consulting and professional fees of $1.3 million and $0.1 million, respectively, as a result of a change in service providers and reduced use of external consulting services.

General and administrative expenses increased by $0.9 million from $8.5 million for the nine months ended September 30, 2019 to $9.4 million for the nine months ended September 30, 2020.

The increase was primarily attributable to the issuance of stock options in August 2020 which resulted in an increase in stock compensation expense of $2.1 million, as well as an increase in legal fees, professional fees, and facilities costs of $0.5 million.

These increases were partially offset by a reduction in headcount which resulted in a decrease in salaries and related benefits of $1.7 million.

Interest income

We recognized interest income of $48,000 and $0.5 million during the six months ended June 30, 2020 and 2019, respectively.

The decrease in interest income is primarily attributable to the lower average balance of our cash and cash equivalents.

We recognized interest income of $70,000 and $0.6 million during the nine months ended September 30, 2020 and 2019, respectively.

The decrease in interest income is primarily attributable to the lower interest rates on our cash and cash equivalents.

Interest expense

We recognized interest expense of $0.5 million and $0.6 million during the six months ended June 30, 2020 and 2019, respectively.

We began making principal payments in April 2020, reducing the average balance of our debt in the second quarter of 2020.

We recognized interest expense of $0.7 million and $0.9 million during the nine months ended September 30, 2020 and 2019, respectively.

We began making principal payments in April 2020, reducing the average outstanding balance of our debt in the second quarter of 2020.

Change in fair value of derivative liability and success fee

We recognized a change in our derivative liability of $0.5 million and $89,000 during the six months ended June 30, 2020 and 2019, respectively.

We recognized a change in our derivative liability of $0.6 million and $0.1 million during the nine months ended September 30, 2020 and 2019, respectively.

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Realized foreign exchange loss

Our realized foreign exchange losses were relatively small and unchanged during the six months ended June 30, 2020 and 2019 as we have a limited number of payment arrangements denominated in a currency other that the U.S.

Our realized foreign exchange losses were relatively small and unchanged during the nine months ended September 30, 2020 and 2019 as we have a limited number of payment arrangements denominated in a currency other that the U.S.

Income tax expense

During the six months ended June 30, 2020 and 2019, we recognized income tax expenses of $32,000 and $54,000, respectively, and attributable to the services provided by our wholly-owned C corporation subsidiary.

During the nine months ended September 30, 2020 and 2019, we recognized income tax expenses of $32,000 and $81,000, respectively, and attributable to the services provided by the wholly-owned subsidiary of Compass Therapeutics LLC, prior to the closing of the Merger.

Liquidity and Capital Resources

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To date, we have funded our operations primarily with proceeds from the sale of our equity securities and borrowings from debt arrangements.

Through June 30, 2020, we have received $132.0 million in gross proceeds from the sale of Compass LLC equity securities and $15 million in term loan borrowings under the Compass LLC credit facility.

Following the completion of the Merger, we completed a private placement of our common stock and in exchange for gross proceeds of $60.5 million.

As of June 30, 2020, we had cash and cash equivalents of $65.4 million.

Through September 30, 2020, we have received $132.0 million in gross proceeds from the sale of Compass LLC equity securities and $15.0 million in term loan borrowings under the Compass LLC credit facility.

Following the completion of the Merger, we completed a private placement of our common stock and in exchange for net proceeds of $54.2 million.

As of September 30, 2020, we had cash and cash equivalents of $55.5 million.

Funding Requirements

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revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval.

We will need additional fun ds to meet operational needs and capital requirements for clinical trials, other research and development expenditures, and business development activities.

Because of the numerous risks and uncertainties associated with the development and commercializati on of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical studies.

We will need additional funds to meet operational needs and capital requirements for clinical trials, other research and development expenditures, and business development activities.

Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical studies.

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

To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may 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 covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends.

If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or drug candidates, or grant licenses on terms that may not be favorable to us.

If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

To the extent that we raise additional capital through the sale of equi ty or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder.

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

If we raise additional fun ds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or drug candidates, or grant li censes on terms that may not be favorable to us.

If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research, product development or fu ture commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

The following table shows a summary of our cash flows for the periods indicated:

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

Cash used in operating activities

Cash used in investing activities

Cash provided by (used in) investing activities

Cash provided by financing activities

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Operating Activities

During the six months ended June 30, 2020, we used $13.1 million of cash in operating activities, resulting from our net loss of $12.0 million and the change in operating assets and liabilities of $3.0 million, offset by non‑cash charges of $1.9 million.

During the nine months ended September 30, 2020, we used $20.2 million of cash in operating activities, resulting from our net loss of $21.1 million and the change in operating assets and liabilities of $4.0 million, offset by non‑cash charges of $4.9 million.

Our non‑cash charges were comprised of depreciation and amortization of $1.3 million, share-based compensation expense of $3.0 million, non-cash interest expense of $72,000, and a change in fair value of our derivative liability of $0.6 million.

The change in our operating assets was primarily related to the settlement of a derivative liability and a decrease in our accounts payable and accrued expenses and due to the timing in which we pay our vendors.

During the six months ended June 30, 2019, we used $19.4 million of cash in operating activities, resulting from our net loss of $19.6 million and the change in operating assets and liabilities of $1.5 million, offset by non‑cash charges of $1.7 million.

Our non‑cash charges were comprised of depreciation and amortization of $1.1 million, share-based compensation expense of $0.4 million, a change in fair value of our derivative liability of $90,000 and non-cash interest expense of $62,000.

The change in our operating assets was primarily related to the decrease in our accounts payable and accrued expenses.

The change in our operating assets was primarily related to the settlement of a derivative liability and a decrease in our accrued expenses due to the timing in which we pay our vendors.

During the nine months ended September 30, 2019, we used $26.2 million of cash in operating activities, resulting from a net loss of $28.1 million and a change in operating assets and liabilities of $0.5 million, offset by non‑cash charges of $2.4 million.

Non‑cash charges were comprised of depreciation and amortization of $1.6 million, share-based compensation expense of $0.7 million, a change in fair value of our derivative liability of $96,000 and non-cash interest expense of $93,000.

The change in our operating assets was primarily related to the net decrease in our accounts payable and accrued expenses.

Investing Activities

During the six months ended June 30, 2020 cash received from investing activities was $39,000 attributed to the sale of property and equipment.

During the six months ended June 30, 2019, cash used in investing activities was $0.3 million attributable to the purchases of property and equipment.

Financing Activi ties

We had no financing activities during the six months ended June 30, 2019.

During the six months ended June 30, 2020 we received cash of $53.1 million from financing activities.

This was primarily due to the closing of the Merger in June 2020 which resulting in net proceeds of $55 million.

This was offset by $1.9 in principal payments related to the 2018 Credit Facility.

In March 2018, we entered into a credit facility with Pacific Western Bank, which consists of $15.0 million in term loans:

During the nine months ended September 30, 2020 cash received from investing activities was $32,000 attributed to the sale of property and equipment for which we received $55,000, offset by $23,000 in purchases of property and equipment.

During the nine months ended September 30, 2019, cash used in investing activities was $0.3 million attributable to purchases of property and equipment.

Financing Activities

We had no financing activities during the nine months ended September 30, 2019.

During the nine months ended September 30, 2020 we received net cash proceeds of $50.4 million from financing activities.

This was primarily due to the closing of a private placement in June 2020, which resulted in net proceeds of $54.2 million that were partially offset by $3.8 in principal payments under the 2018 Credit Facility.

Indebt edness

In March 2018, we entered into the 2018 Credit Facility with Pacific Western Bank, which consists of $15.0 million in term loans:

a $10.0 million Tranche 1, and a $5.0 million Tranche 2.

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

We believe that our existing cash and cash equivalents as of June 30, 2020 will enable us to fund our operating expenses and capital expenditure requirements into fourth quarter of 2021, which we expect to enable us to complete Part 2 of our ongoing Phase 1 clinical trial of CTX-471, commence the planned Phase 1 development of CTX-8371, subject to satisfactory completion of IND-enabling activities for that product candidate, and to complete IND-enabling activities with respect to our NKp30 bispecific program.

We believe that our existing cash and cash equivalents as of September 30, 2020 will enable us to fund our operating expenses and capital expenditure requirements into first quarter of 2022, which we expect to enable us to complete Part 2 of our ongoing Phase 1 clinical trial of CTX-471, commence the planned Phase 1 development of CTX-8371, subject to satisfactory completion of IND-enabling activities for that product candidate, and to complete IND-enabling activities with respect to our NKp30 bispecific program.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis