What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2021-03-25 compared with 2020-03-09 · 239 added, 174 removed, 483 unchanged (46% of the section changed)

2 unchanged sentences

ANNUAL REPORT ON FORM 10-K

INDEX TO FINANCIAL STATEMENTS

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Financial Statements

Balance Sheets

Statements of Operations and Comprehensive Loss

Statements of Stockholders’

Statements of Cash Flows

Notes to Financial Statements

Consolidated Financial Statements

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to C onsolidated Financial Statements

Report of Independent Registered Public Accounting Firm

1 unchanged sentence

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Corvus Pharmaceuticals, Inc.

(the “Company”) as of December 31, 2019 and 2018, and the related statements of operations and comprehensive loss, changes in stockholders’

equity and cash flows for each of the three years in the period ended December 31, 2019, including the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 , and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019 in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of Corvus Pharmaceuticals, Inc.

(the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of operations and comprehensive loss, of changes in stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2020, including the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit of these financial statements in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB.

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.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Emphasis of Matter

As discussed in Note 1 to the consolidated financial statements, the Company will require additional financing to fund future operations.

Management’s plans in regard to this matter are described in Note 1 .

/s/ PricewaterhouseCoopers LLP

1 unchanged sentence

March 25, 2021

We have served as the Company’s auditor since 2015

CORVUS PHARMACEUTICALS, INC.

BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

6 unchanged sentences

Operating lease right-of-use asset

Liabilities and Stockholders’

Investment in Angel Pharmaceuticals

Liabilities and Stockholders’ Equity

Current liabilities:

4 unchanged sentences

Operating lease liability

Other liabilities

Total liabilities

Commitments and contingencies (Note 13)

Stockholders’

Stockholders’ equity:

Preferred stock:

7 unchanged sentences

Additional paid-in capital

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income

Accumulated deficit

Total stockholders’

Total liabilities and stockholders’

The accompanying notes are an integral part of these financial statements.

Total stockholders’ equity

Total liabilities and stockholders’ equity

The accompanying notes are an integral part of these consolidated financial statements.

CORVUS PHARMACEUTICALS, INC.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share data)

6 unchanged sentences

Interest income and other expense, net

Gain on deconsolidation of Angel Pharmaceuticals

Loss from equity method investment

Net loss per share, basic and diluted

3 unchanged sentences

Comprehensive loss

The accompanying notes are an integral part of these financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

CORVUS PHARMACEUTICALS, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands, except share and per share data)

Comprehensive

Stockholders’

Income (Loss)

Balance at December 31, 2017

Issuance of common stock in conjunction with the Sales Agreement, net

Common stock issued on exercise of stock options

Vesting of restricted stock issued upon early exercise of stock options

Stock-based compensation expense

Unrealized loss on marketable securities

Balance at December 31, 2017

Issuance of common stock upon follow-on public offering, net

5 unchanged sentences

Retirement of common stock in exchange for common stock warrant

( 1,458,000 )

Issuance of common stock warrant in exchange for retirement of common stock

4 unchanged sentences

Balance at December 31, 2019

The accompanying notes are an integral part of these financial statements.

Issuance of common stock in connection with at-the-market offering, net

Common stock issued on exercise of stock options

Stock-based compensation expense

Unrealized loss on marketable securities

Balance at December 31, 2020

The accompanying notes are an integral part of these consolidated financial statements.

CORVUS PHARMACEUTICALS, INC.

STATEMENTS OF CASH FLOWS

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

5 unchanged sentences

Stock-based compensation

Gain on deconsolidation of Angel Pharmaceuticals

Loss from equity method investment

Changes in operating assets and liabilities:

4 unchanged sentences

Operating lease liability

Other long-term liabilities

Net cash used in operating activities

1 unchanged sentence

Purchases of marketable securities

Sales of marketable securities

Maturities of marketable securities

3 unchanged sentences

Proceeds from issuance of common stock, net (includes $30,850 in aggregate gross proceeds from related parties for the year ended December 31, 2018)

Proceeds from issuance of common stock in connection with at-the-market offering, net

Proceeds from exercise of common stock options

Net cash provided by financing activities

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of the period

2 unchanged sentences

Purchases of property and equipment incurred but not paid

The accompanying notes are an integral part of these financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

CORVUS PHARMACEUTICALS, INC.

NOTE TO FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Corvus Pharmaceuticals, Inc.

(“Corvus”

or the “Company”) was incorporated in Delaware on January 27, 2014 and commenced operations in November 2014.

Corvus is a clinical stage biopharmaceutical company focused on the development and commercialization of precisely targeted oncology therapies.

The Company’s operations are located in Burlingame, California.

(“Corvus” or the “Company”) was incorporated in Delaware on January 27, 2014 and commenced operations in November 2014.

Corvus is a clinical-stage biopharmaceutical company.

The Company’s operations are located in Burlingame, California.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Corvus Biopharmaceuticals, Ltd.

and Corvus Hong Kong Limited.

All significant intercompany accounts and transactions have been eliminated from the consolidated financial statements.

Initial Public Offering

On March 22, 2016, the Company’s registration statement on Form S-1 (File No.

333-208850) relating to its initial public offering (“IPO”) of its common stock was declared effective by the Securities and Exchange Commission (“SEC”) and the shares of its common stock began trading on the Nasdaq Global Market on March 23, 2016.

On March 22, 2016, the Company’s registration statement on Form S-1 (File No.

The public offering price of the shares sold in the IPO was $ 15.00 per share.

4 unchanged sentences

Follow-on Public Offering

In March 2018, the Company completed a follow-on public offering in which the Company sold 8,117,647 shares of common stock at a price of $8.50 per share, which included 1,058,823 shares issued pursuant to the underwriters’

exercise of their option to purchase additional shares of common stock.

In March 2018, the Company completed a follow-on public offering in which the Company sold 8,117,647 shares of common stock at a price of $ 8.50 per share, which included 1,058,823 shares issued pursuant to the underwriters’ exercise of their option to purchase additional shares of common stock.

The aggregate net proceeds received by the Company from the offering were approximately $ 64.9 million, net of underwriting discounts and commissions and offering expenses payable by the Company.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, contract manufacturer and contract research organizations, compliance with government regulations and the need to obtain additional financing to fund operations.

Since commencing operations in 2014, the majority of the Company’s efforts have been focused on the research and development of ciforadenant, CPI-006 and CPI-818.

The Company believes that it will continue to expend substantial resources for the foreseeable future as it continues clinical development of, seek regulatory approval for and, if approved, prepare for the commercialization of ciforadenant, CPI-006, and CPI-818, as well as product candidates under the Company’s other development programs.

Since commencing operations in 2014, the majority of the Company’s efforts have been focused on the research and development of CPI-006, CPI-818 and ciforadenant.

These expenditures will include costs associated with research and development, conducting preclinical studies and clinical trials, obtaining regulatory approvals, manufacturing and supply, sales and marketing and general operations.

In addition, other unanticipated costs may arise.

Because the outcome of any clinical trial and/or regulatory approval process is highly uncertain, the Company may not be able to accurately estimate the actual amounts necessary to successfully complete the development, regulatory approval process and commercialization of ciforadenant, CPI-006, CPI-818 or any other product candidates.

The Company does not expect its existing capital resources to be sufficient to enable it to fund the completion of its clinical trials and remaining development program of ciforadenant, CPI-006 or CPI-818 through commercialization.

In addition, its operating plan may change as a result of many factors, including those described in this Annual Report on Form 10-K for the year ended December 31, 2019.

Because the outcome of any clinical trial and/or regulatory approval process is highly uncertain, the Company may not be able to accurately estimate the actual amounts necessary to successfully complete the development, regulatory approval process and commercialization of CPI-006, CPI-818, and ciforadenant or any other product candidates.

The Company does not expect its existing capital resources to be sufficient to enable it to fund the completion of its clinical trials and remaining

development program of CPI-006, CPI-818 and ciforadenant through commercialization.

In addition, its operating plan may change as a result of many factors.

The Company has incurred significant losses and negative cash flows from operations in all periods since inception and had an accumulated deficit of $ 223.1 million as of December 31, 2020.

The Company has historically

financed its operations primarily through the sale of redeemable convertible preferred stock and common stock.

The Company has historically financed its operations primarily through the sale of redeemable convertible preferred stock and common stock.

While the Company has been able to raise multiple rounds of financing, there can be no assurance that in the event the Company requires additional financing, such financing will be available on terms which are favorable or at all.

Failure to generate sufficient cash flows from operations, raise additional capital or reduce certain discretionary spending would have a material adverse effect on the Company’s ability to achieve its intended business objectives.

As of December 31, 2020, the Company had cash, cash equivalents and short-term marketable securities of $ 44.3 million.

Management believes that the Company’s current cash, cash equivalents and short-term marketable securities will be sufficient to fund its planned operations for at least 12 months from the date of the issuance of these financial statements

The current COVID-19 (coronavirus) pandemic, which is impacting worldwide economic activity, poses risks that the Company or its employees, contractors, suppliers, and other partners may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities.

The extent to which COVID-19 impacts the Company’s business, including its clinical trials and financial condition, will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the pandemic, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.

As COVID-19 continues to spread around the globe, we will likely experience disruptions, including delays or difficulties in enrolling patients in our clinical trials, delays or difficulties in clinical site initiation, interruption of key clinical trial activities, delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials and delays in necessary interactions with local regulatory authorities.

COVID-19 may also impact the Company’s ability to raise additional capital on a timely basis or at all, which could negatively impact short-term and long-term liquidity.

Exchange Warrants

On November 8, 2019, the Company entered into an exchange agreement (the “Exchange Agreement”) with an Investor and its affiliates (the “Exchanging Stockholders”), pursuant to which the Company exchanged an aggregate of 1,458,000 shares of the Company’s common stock, par value $0.0001 per share, owned by the Exchanging Stockholders for pre-funded warrants (the “Exchange Warrants”) to purchase an aggregate of 1,458,000 shares of common stock (subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Exchange Warrants), with an exercise price of $0.0001 per share.

On November 8, 2019, the Company entered into an exchange agreement (the “Exchange Agreement”) with an investor and its affiliates (the “Exchanging Stockholders”), pursuant to which the Company exchanged an aggregate of 1,458,000 shares of the Company’s common stock, par value $ 0.0001 per share, owned by the Exchanging Stockholders for pre-funded warrants (the “Exchange Warrants”) to purchase an aggregate of 1,458,000 shares of common stock (subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Exchange Warrants), with an exercise price of $ 0.0001 per share.

The Exchange Warrants will expire ten years from the date of issuance.

The Exchange Warrants are exercisable at any time prior to expiration except that the Exchange Warrants cannot be exercised by the Exchanging Stockholders if, after giving effect thereto, the Exchanging Stockholders would beneficially own more than 9.99% of the Company’s common stock, subject to certain exceptions.

The Exchange Warrants are exercisable at any time prior to expiration except that the Exchange Warrants cannot be exercised by the Exchanging Stockholders if, after giving effect thereto, the Exchanging Stockholders would beneficially own more than 9.99 % of the Company’s common stock, subject to certain exceptions.

In accordance with Accounting Standards Codification Topic 505, Equity, and Accounting Research Bulletin 43, the Company recorded the retirement of the common stock exchanged as a reduction of common shares outstanding and elected to record the excess over par value as a debit to additional paid-in-capital at the fair value of the Exchange Warrants on the issuance date.

4 unchanged sentences

Basis of Presentation

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S.

GAAP”).

The Company’s functional and reporting currency is the U.S.

The accompanying financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and discharge of liabilities in the normal course of business.

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S.

The Company’s functional and reporting currency is the U.S.

dollar, except for its investment in its equity method investee which is the Chinese yuan.

The accompanying consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and discharge of liabilities in the normal course of business.

Since its inception, the Company has incurred significant losses and negative cash flows from operations.

4 unchanged sentences

Use of Estimates

The preparation of the Company’s financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

The preparation of the Company’s consolidated financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.

Actual results could differ from such estimates.

Concentrations of Credit Risk and Other Risks and Uncertainties

Substantially all of the Company’s cash and cash equivalents are deposited in accounts with two financial institutions that management believes are of high credit quality.

Such deposits may, at times, exceed federally insured limits.

The Company maintains its cash with an accredited financial institution and accordingly, such funds are subject to minimal credit risk.

The Company’s marketable securities consist of investments in U.S.

Treasury securities, U.S.

2 unchanged sentences

The Company has not experienced any losses on its deposits of cash, cash equivalents or marketable securities.

The Company is subject to a number of risks similar to other early stage biopharmaceutical companies, including, but not limited to, the need to obtain adequate additional funding, possible failure of preclinical testing or clinical trials, its reliance on third parties to conduct its clinical trials, the need to obtain marketing approval for its product candidates, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of the Company’s product candidates, its right to develop and commercialize its product candidates pursuant to the terms and conditions of the licenses granted to the Company, and protection of proprietary technology.

If the Company does not successfully commercialize or partner any of its product candidates, it will be unable to generate product revenue or achieve profitability.

3 unchanged sentences

The Company considers all highly liquid investment securities with remaining maturities at the date of purchase of three months or less to be cash equivalents.

Investments with remaining maturities, at the date of purchase, greater than three months are classified as “available-for-sale”

and are carried at fair value with unrealized gains and losses, if any, included as a component of accumulated other comprehensive income (loss) in stockholders’

Investments with remaining maturities, at the date of purchase, greater than three months are classified as “available-for-sale” and are carried at fair value with unrealized gains and losses, if any, included as a component of accumulated other comprehensive income (loss) in stockholders’ equity.

Interest and realized gains and losses are included in interest income.

1 unchanged sentence

Fair Value Measurements

Fair value accounting is applied for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually).

The carrying amount of the Company’s financial instruments, including cash equivalents, accounts payable and accrued liabilities, approximate fair value due to their short-term maturities.

Fair value accounting is applied for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis (at least annually).

The carrying amount of the Company’s financial instruments, including cash equivalents, accounts payable and accrued liabilities, approximate fair value due to their short-term maturities.

Variable Interest Entities

The Company determines at the inception of each arrangement whether an entity in which the Company holds an investment or in which the Company has other variable interests is considered a variable interest entity ("VIE").

The Company consolidates VIEs when it is the primary beneficiary.

The primary beneficiary of a VIE is the party that meets both of the following criteria:

(1) has the power to make decisions that most significantly affect the economic performance of the VIE and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE.

Periodically, the Company assesses whether any changes in the interest or relationship with the entity affect the determination of whether the entity is still a VIE and, if so, whether the Company is the primary beneficiary.

If the Company is not the primary beneficiary in a VIE, the Company accounts for the investment or other variable interest in accordance with applicable GAAP.

Investments in Equity Securities

Investments in equity securities over which the Company is able to exercise significant influence over the investee, but does not control the investee, and is not the primary beneficiary of the investee’s activities that are considered VIEs are accounted for using the equity method.

Adjustments are made to investments accounted for using the equity method for any earnings or losses incurred and are recorded in loss from operations.

Investments in equity securities which do not have readily determinable fair values and for which the Company is not able to exercise significant influence over the investee are accounted for under the measurement alternative which is the cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar securities of the same investee and adjustments related to the basis differences, if any.

Property and Equipment, Net

8 unchanged sentences

The Company regularly reviews the carrying value and estimated lives of all of its long-lived assets, including property and equipment, to determine whether indicators of impairment may exist which warrant adjustments to carrying values or estimated useful lives.

The determinants used for this evaluation include management’s estimate of the asset’s ability to generate positive income from operations and positive cash flow in future periods as well as the strategic significance of the assets to the Company’s business objectives.

significance of the assets to the Company’s business objectives.

Should impairment exist, the impairment loss to be recognized is measured by the amount by which the carrying amount of the asset exceeds the projected discounted future net cash flows arising from the asset.

3 unchanged sentences

The Company accounts for nonrefundable advance payments for goods and services that will be used in future research and development activities as expenses when the goods have been received or when the service has been performed rather than when the payment is made.

Research and development expenses consist of costs incurred by the Company for the discovery and development of the Company’s product candidates and include:

● employee-related expenses, including salaries, benefits, travel and non-cash stock-based compensation expense;

4 unchanged sentences

Clinical Trial Accruals

Costs for preclinical studies and clinical trial activities are recognized based on an evaluation of the vendors’

progress towards completion of specific tasks, using data such as clinical site activations, patient enrollment or information provided to the Company by its vendors regarding their actual costs incurred.

Costs for preclinical studies and clinical trial activities are recognized based on an evaluation of the vendors’ progress towards completion of specific tasks, using data such as clinical site activations, patient enrollment or information provided to the Company by its vendors regarding their actual costs incurred.

Payments for these activities are based on the terms of individual contracts and payment timing may differ significantly from the period in which the services are performed.

The Company determines accrual estimates through reports from and discussions with applicable personnel and outside service providers as to the progress or state of completion, or the services completed.

The Company’s estimates of accrued expenses as of each balance sheet date are based on the facts and circumstances known at the time.

Stock-Based Compensation

The Company maintains incentive plans under which incentive stock options and nonqualified stock options may be granted to employees and non-employee service providers.

The Company accounts for stock-based employee compensation arrangements in accordance with the provisions of ASC 718, “Compensation—Stock Compensation.”

For stock options granted to employees, the Company recognizes compensation expense for all stock-based awards based on the grant-date estimated fair values.

The Company accounts for stock-based employee compensation arrangements in accordance with the provisions of ASC 718, “Compensation—Stock Compensation.” For stock options granted to employees, the Company recognizes compensation expense for all stock-based awards based on the grant-date estimated fair values.

The value of the award is recognized as an expense ratably over the requisite service period.

5 unchanged sentences

The Company estimates actual current tax exposure together with assessing temporary differences resulting from differences in accounting for reporting purposes and tax purposes for certain items, such as accruals and allowances not currently deductible for tax purposes.

These temporary differences result in deferred tax assets and liabilities, which are included in the Company’s balance sheets.

In general, deferred tax assets represent future tax benefits to be received when certain expenses previously recognized in the Company’s statements of operations and comprehensive loss become deductible expenses, under applicable income tax laws or when net operating loss or credit carryforwards are utilized.

Accordingly, realization of the Company’s deferred tax assets is dependent on future taxable income against which these deductions, losses and credits can be utilized.

The Company must assess the likelihood that the Company’s deferred tax assets will be recovered from future taxable income and a valuation allowance is recorded when it is more likely than not that the deferred tax asset will not be recovered.

These temporary differences result in deferred tax assets and liabilities, which are included in the Company’s balance sheets.

Accordingly, realization of the Company’s deferred tax assets is dependent on future taxable income against which these deductions, losses and credits can be utilized.

The Company applies judgment in the determination of the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

8 unchanged sentences

Comprehensive Loss

Comprehensive loss includes net loss as well as other changes in stockholders’

equity that result from transactions and economic events other than those with stockholders.

The Company’s only element of other comprehensive loss in any period presented was unrealized gains and losses on available-for-sale marketable securities.

Comprehensive loss includes net loss as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders.

The Company’s only element of other comprehensive loss in any period presented was unrealized gains and losses on available-for-sale marketable securities.

Net Loss per Share

4 unchanged sentences

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2014-09, Revenue from Contracts with Customers, which required an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers.

2014-09 will replace most existing revenue recognition guidance in U.S.

GAAP when it becomes effective.

The new standard is effective January 1, 2018 for public companies.

Early application is permitted as of January 1, 2017.

The standard permits the use of either the retrospective or cumulative effect transition method.

In March 2016, the FASB issued ASU No.

2016-08, Revenue from Contracts with Customers (Topic 606):

Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies the implementation guidance on principal versus agent considerations in ASU No.

In April 2016, the FASB issued ASU No.

2016-10, Revenue from Contracts with Customers (Topic 606):

Identifying Performance Obligations and Licensing, which clarifies certain aspects of identifying performance obligations and licensing implementation guidance.

In May 2016, the FASB issued ASU No.

2016-12, Revenue from Contracts with Customers (Topic 606):

Narrow-Scope Improvements and Practical Expedients, which relates to disclosures of remaining performance obligations, as well as other amendments to guidance on collectability, non-cash consideration and the presentation of sales and other similar taxes collected from customers.

These standards have the same effective date and transition date of January 1, 2018.

The Company adopted this guidance on January 1, 2018.

The adoption of this guidance did not have a material impact on its condensed financial statements as the Company is not yet generating revenues.

In February 2016, the FASB issued ASU No.

7 unchanged sentences

The Company adopted the new standard on January 1, 2019 and chose to apply the provisions of ASC 842 as of the effective date with no restatement of prior periods.

Additionally, the Company has elected the ‘package of practical expedients’, which permit it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs.

Additionally, the Company

has elected the ‘ package of practical expedients ’, which permit it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs.

The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements;

2 unchanged sentences

The Company has elected not to apply the recognition requirements of Topic 842 for leases with a term of 12 months or less.

Upon adoption of ASU 2016-02, the Company recognized an operating lease, right-of-use asset of $2.8 million and a corresponding liability of $3.8 million and eliminated $1.0 million of deferred rent in the Company’s condensed balance sheet.

The adoption of ASU 2016-02 did not have any impact on the Company’s condensed statements of operations and comprehensive loss.

Upon adoption of ASU 2016-02, the Company recognized an operating lease, right-of-use asset of $ 2.8 million and a corresponding liability of $ 3.8 million and eliminated $ 1.0 million of deferred rent in the Company’s consolidated balance sheet.

The adoption of ASU 2016-02 did not have any impact on the Company’s consolidated statements of operations and comprehensive loss.

What changed 10-K

Item 8. Financial Statements and Supplementary Data