What changed in this filing

/stocks — the workspaceLOADING

Item 4. Controls and Procedures

2021-11-04 compared with 2021-08-05 · 195 added, 153 removed, 747 unchanged (32% of the section changed)

80 unchanged sentences

(in thousands, except share and per share data)

September 30,

Current assets:

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Convertible preferred stock, $ 0.00001 par value;

10,000,000 shares authorized and no shares issued and outstanding at June 30, 2021 and December 31, 2020.

10,000,000 shares authorized and no shares issued and outstanding at September 30, 2021 and December 31, 2020.

Common stock, $ 0.00001 par value;

150,000,000 shares authorized and 65,157,003 and 48,251,819 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

150,000,000 shares authorized and 65,249,116 and 48,251,819 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Operating expenses:

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Balance at June 30, 2021

Exercise of stock options

Stock-based compensation

Other comprehensive income

Balance at September 30, 2021

Comprehensive

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Balance at June 30, 2020

Exercise of stock options

Stock-based compensation

Other comprehensive loss

Balance at September 30, 2020

See accompanying notes to condensed financial statements.

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(in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

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The condensed balance sheet data, as of December 31, 2020, was derived from audited financial statements, but does not include all disclosures required by U.S.

The condensed results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the full year or for any other future year or interim period.

The condensed results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the full year or for any other future year or interim period.

The accompanying condensed financial statements should be read in conjunction with the audited financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC.

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The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed balance sheets that sum to the total of the amounts shown in the condensed statements of cash flows.

September 30,

(in thousands)

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The Company adopted this ASU on January 1, 2021 , and there was no material impact on the financial statements upon adoption of this ASU.

CYTOMX THERAPEUTICS, INC.

Notes to Condensed Financial Statements (Unaudited)—(Continued)

Net Loss Per Share

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Options and ESPP to purchase common stock

CYTOMX THERAPEUTICS, INC.

Notes to Condensed Financial Statements (Unaudited)—(Continued)

Fair Value Measurements and Investments

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The following tables set forth the fair value of the Company’s investments subject to fair value measurements on a recurring basis and the level of inputs used in such measurements:

June 30, 2021

September 30, 2021

(in thousands)

3 unchanged sentences

Government bonds - long term

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Notes to Condensed Financial Statements (Unaudited)—(Continued)

December 31, 2020

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All long term investments consist of U.S.

government bonds with contractual maturities of eighteen months , and no other securities have contractual maturities of greater than twelve months.

government bonds purchased in the second quarter of 2021 with contractual maturities of eighteen months , and no other securities have contractual maturities of greater than twelve months.

CYTOMX THERAPEUTICS, INC.

Notes to Condensed Financial Statements (Unaudited)—(Continued)

Accrued Liabilities

Accrued liabilities consisted of the following:

September 30,

(in thousands)

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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Under the CD71 Agreement, the Company received an upfront payment of $ 20.0 million in April 2016, and was eligible to initially receive up to $ 470.0 million in development, regulatory and commercial milestone payments, a 35 % profit split on U.S.

sales, and royalties on

CYTOMX THERAPEUTICS, INC.

Notes to Condensed Financial Statements (Unaudited)—(Continued)

sales, and royalties on ex-U.S.

sales at percentages in the high teens to low twenties if the Company participates in the co-development of the CD71 conditionally activated ADC subject to a reversion to a royalty on U.S.

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The Company shall perform research services to discover the Probody therapeutics and create conditionally activated ADCs for the nominated collaboration targets.

From that point, AbbVie shall have sole right and responsibility for development and commercialization of products comprising or containing such conditionally activated ADCs (“Discovery Licensed Products”).

From that point, AbbVie

CYTOMX THERAPEUTICS, INC.

Notes to Condensed Financial Statements (Unaudited)—(Continued)

shall have sole right and responsibility for development and commercialization of products comprising or containing such conditionally activated ADCs (“Discovery Licensed Products”).

Under the Discovery Agreement, the Company received an upfront payment of $ 10.0 million in April 2016 and subsequently earned an additional $ 10.0 million milestone payment triggered by selection of the second target by AbbVie in June 2019.

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The Company determined that the remaining potential milestone payments of both agreements, if recognized, are probable of significant revenue reversal as their achievement is highly dependent on factors outside the Company’s control.

Therefore, these payments continue to be fully constrained and are not included in the transaction price as of June 30, 2021.

The Company recognized revenue of $ 2.1 million and $ 1.3 million for the three months ended June 30, 2021 and 2020, respectively, and $ 3.3 million and $ 31.4 million for the six months ended June 30, 2021 and 2020, respectively, related to the AbbVie Agreements.

As of June 30, 2021 and December 31, 2020, deferred revenue related to the CD71 Agreement performance obligation was $ 23.3 million and $ 25.2 million, respectively, and deferred revenue related to the Discovery Agreement performance obligation was $ 6.6 million and $ 8.0 million, respectively.

No amounts were due from AbbVie as of both June 30, 2021 and December 31, 2020.

Therefore, these payments continue to be fully constrained and are not included in the transaction price as of September 30, 2021.

The Company recognized revenue of $ 2.9 million and $ 4.2 million for the three months ended September 30, 2021 and 2020, respectively, and $ 6.2 million and $ 35.6 million for the nine months ended September 30, 2021 and 2020, respectively, related to the AbbVie Agreements.

As of September 30, 2021 and December 31, 2020, deferred revenue related to the CD71 Agreement performance obligation was $ 21.1 million and $ 25.2 million, respectively, and deferred revenue related to the Discovery Agreement performance obligation was $ 5.9 million and $ 8.0 million, respectively.

No amounts were due from AbbVie as of both September 30, 2021 and December 31, 2020.

On September 29, 2017, the Company and Amgen, Inc.

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The Company estimated a premium on the stock sold to Amgen of $ 0.5 million, which takes into account a discount due to the lack of marketability resulting from the six-month lockup period.

Under the terms of the Amgen Agreement, the Company and Amgen will co-develop a conditionally activated T-cell engaging bispecific therapeutic targeting epidermal growth factor receptor (the “EGFR Products”).

The Company is responsible for early-stage development of EGFR Products and all related costs up to certain pre-set costs and certain limits based on clinical trial size.

Amgen will be responsible for late-stage development, commercialization, and all related costs of EGFR Products.

In October 2021, CytomX and Amgen executed an amendment to the Amgen Agreement primarily to (1) extend the target selection date for Amgen to select its additional targets for research and development, and (2) reduce the total number of milestone events and increase the total amount of milestone payments for EGFR Products.

Under the terms of the Amgen Agreement, as amended, the Company and Amgen will co-develop a conditionally activated T-cell engaging bispecific therapeutic targeting epidermal growth factor receptor (the “EGFR Products”).

The Company is responsible for early-stage development of EGFR Products and Amgen will be responsible for late-stage development and commercialization of EGFR Products.

Following early-stage development, the Company will have the right to elect to participate financially in the global co-development of EGFR Products with Amgen, during which the Company would bear certain of the worldwide development costs for EGFR Products and Amgen would bear the rest of such costs (the “EGFR Co-Development Option”).

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If the Company chooses not to exercise its EGFR Co-Development Option, the Company will not bear any costs of later stage development.

The Company is eligible to

CYTOMX THERAPEUTICS, INC.

Notes to Condensed Financial Statements (Unaudited)—(Continued)

receive up to $ 455.0 million in development, regulatory, and commercial milestone payments for EGFR Products, and royalties in the low-double-digit to mid-teen percentage of worldwide commercial sales, provided that if the Company exercises its EGFR Co-Development option, it shall receive a profit and loss split of sales in the United States and royalties in the low-double-digit to mid-teen percentage of commercial sales outside of the United States.

The Company is also eligible to receive up to $ 460.0 million in development, regulatory, and commercial milestone payments for EGFR Products, and royalties in the low-double-digit to mid-teen percentage of worldwide commercial sales, provided that if the Company exercises its EGFR Co-Development option, it shall receive a profit and loss split of sales in the United States and royalties in the low-double-digit to mid-teen percentage of commercial sales outside of the United States.

Amgen also has the right to select a total of up to three targets, including the two additional targets discussed below.

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Except with respect to preclinical activities to be conducted by CytomX, Amgen will be responsible, at its expense, for the development, manufacture, and commercialization of all Amgen Products.

If Amgen exercises all of its options and advances all three of the Amgen Products, CytomX was initially eligible to receive up to $ 950.0 million in upfront, development, regulatory, and commercial milestones and tiered high single-digit to low-teen percentage royalties.

If Amgen exercises all of its options and advances all three of the Amgen

CYTOMX THERAPEUTICS, INC.

Notes to Condensed Financial Statements (Unaudited)—(Continued)

Products, CytomX was initially eligible to receive up to $ 950.0 million in upfront, development, regulatory, and commercial milestones and tiered high single-digit to low-teen percentage royalties.

The Company concluded that, at the inception of the agreement, Amgen’s option to select the two additional targets is not a material right and does not represent a performance obligation of the agreement.

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Amgen is eligible to receive up to $ 203.0 million in development, regulatory, and commercial milestone payments for the CytomX Product, and tiered mid-single digit to low double-digit percentage royalties.

The Company recognized revenue of $ 1.9 million and $ 3.7 million for the three months ended June 30, 2021 and 2020, respectively, and $ 4.5 million and $ 5.4 million for the six months ended June 30, 2021 and 2020, respectively, related to the Amgen Agreement.

As of June 30, 2021 and December 31, 2020, deferred revenue related to the EGFR Products performance obligation was $ 25.7 million and $ 29.8 million, respectively.

As of June 30, 2021 and December 31, 2020, deferred revenue related to the Amgen Other Products performance obligation was $ 1.8 million and $ 2.2 million, respectively.

No amounts were due from Amgen as of both June 30, 2021 and December 31, 2020.

The Company recognized revenue of $ 2.4 million and $ 1.6 million for the three months ended September 30, 2021 and 2020, respectively, and $ 6.9 million and $ 7.0 million for the nine months ended September 30, 2021 and 2020, respectively, related to the Amgen Agreement.

As of September 30, 2021 and December 31, 2020, deferred revenue related to the EGFR Products performance obligation was $ 23.5 million and $ 29.8 million, respectively.

As of September 30, 2021 and December 31, 2020, deferred revenue related to the Amgen Other Products performance obligation was $ 1.6 million and $ 2.2 million, respectively.

No amounts were due from Amgen as of both September 30, 2021 and December 31, 2020.

Astellas Pharma Inc.

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The Company is also entitled to tiered royalties from high-single digit to mid-teen percentage royalties from potential future sales.

Astellas is responsible for all preclinical research costs incurred by either party as set forth in the preclinical research plan and the Company will receive research and development service fees based on a prescribed FTE rate.

The Company recognized revenue of $ 4.9 million and $ 4.2 million for the three months ended June 30, 2021 and 2020, respectively;

and $ 9.7 million and $ 4.6 million for the six months ended June 30, 2021 and 2020, respectively.

Those revenues also included the research and development service revenue of $ 0.9 million and $ 0.2 million for the three months ended June 30, 2021 and 2020, respectively, and $ 1.7 million and $ 0.2 million for the six months ended June 30, 2021 and 2020, respectively.

As of June 30, 2021 and December 31, 2020, deferred revenue relating to the Astellas Agreement was $ 59.6 million and $ 67.6 million, respectively.

The amount due from Astellas under the Astellas Agreement was $ 0.9 million and $ 0.8 million as of June 30, 2021 and December 31, 2020, respectively.

CYTOMX THERAPEUTICS, INC.

Notes to Condensed Financial Statements (Unaudited)—(Continued)

The Company recognized revenue of $ 4.9 million and $ 4.5 million for the three months ended September 30, 2021 and 2020, respectively;

and $ 14.6 million and $ 9.1 million for the nine months ended September 30, 2021 and 2020, respectively.

Those revenues also included the research and development service revenue of $ 0.9 million and $ 0.5 million for the three months ended September 30, 2021 and 2020, respectively, and $ 2.6 million and $ 0.7 million for the nine months ended September 30, 2021 and 2020, respectively.

As of September 30, 2021 and December 31, 2020, deferred revenue relating to the Astellas Agreement was $ 55.6 million and $ 67.6 million, respectively.

The amount due from Astellas under the Astellas Agreement was $ 0.9 million and $ 0.8 million as of September 30, 2021 and December 31, 2020, respectively.

Bristol Myers Squibb Company

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Under the terms of the BMS Agreement, the Company granted Bristol Myers Squibb exclusive worldwide rights to develop and commercialize Probody therapeutics for up to four oncology targets.

Bristol Myers Squibb had additional rights to substitute up to two collaboration targets within three years of the effective date of the BMS Agreement.

Bristol Myers Squibb had additional rights to substitute up to two

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Notes to Condensed Financial Statements (Unaudited)—(Continued)

collaboration targets within three years of the effective date of the BMS Agreement.

These rights expired in May 2017.

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In addition, the Company will no longer be entitled to receive the research and development service fee as part of the arrangement.

The Company reevaluated the remaining potential milestone payments and determined that, if recognized, significant revenue reversal was still probable as the achievement of such milestones was highly dependent on factors outside the Company’s control.

As a result, these payments were fully constrained and were not included in the transaction price on September 30, 2021.

The Company recognized revenue of $ 7.4 million and $ 7.4 million for the three months ended September 30, 2021 and 2020, respectively and $ 22.2 million and $ 32.2 million for the nine months ended September 30, 2021 and 2020, respectively.

As of September 30, 2021 and December 31, 2020, deferred revenue relating to the BMS Agreement was $ 106.2 million and $ 128.3 million, respectively.

No amounts were due from Bristol Myers Squibb as of September 30, 2021 and December 31, 2020.

CYTOMX THERAPEUTICS, INC.

Notes to Condensed Financial Statements (Unaudited)—(Continued)

As a result, these payments were fully constrained and were not included in the transaction price on June 30, 2021.

The Company recognized revenue of $ 7.4 million and $ 7.4 million for the three months ended June 30, 2021 and 2020, respectively and $ 14.8 million and $ 24.8 million for the six months ended June 30, 2021 and 2020, respectively.

As of June 30, 2021 and December 31, 2020, deferred revenue relating to the BMS Agreement was $ 113.6 million and $ 128.3 million, respectively.

No amounts were due from Bristol Myers Squibb as of June 30, 2021 and December 31, 2020.

ImmunoGen, Inc.

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Contract Liabilities

The following table presents changes in the Company’s total contract liabilities during the six months ended June 30, 2021:

The following table presents changes in the Company’s total contract liabilities during the nine months ended September 30, 2021:

(in thousands)

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Deferred revenue

The Company expects that the $ 230.6 million of deferred revenue related to the following contracts as of June 30, 2021 will be recognized as revenue as set forth below.

The Company expects that the $ 213.9 million of deferred revenue related to the following contracts as of September 30, 2021 will be recognized as revenue as set forth below.

However, the timing of revenue recognition could differ from the estimates depending on facts and circumstances impacting the various contracts, including progress of research and development, resources assigned to the contracts by the Company or its collaboration partners, or other factors outside of the Company’s control.

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The $ 23.5 million of deferred revenue related to the Amgen EGFR Products is expected to be recognized based on actual FTE effort and program progress until approximately September 2024 .

CYTOMX THERAPEUTICS, INC.

Notes to Condensed Financial Statements (Unaudited)—(Continued)

The $ 1.6 million of deferred revenue related to the Amgen Other Products is expected to be recognized ratably until approximately September 2023 .

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The $ 106.2 million of deferred revenue related to the BMS Agreement is expected to be recognized ratably until approximately April 2025 .

CYTOMX THERAPEUTICS, INC.

Notes to Condensed Financial Statements (Unaudited)—(Continued)

License Agreements

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In March 2020, the Company incurred additional sublicense fees of $ 6.0 million related to the $ 80.0 million upfront fee received pursuant to the Astellas Agreement entered into in March 2020, and $ 1.4 million related to the $ 40.0 million milestone payment from AbbVie for satisfying the CD71 dose escalation success criteria under the CD71 Agreement in March 2020.

The Company incurred no sublicense expenses for the three months ended June 30, 2021 and 2020, and $ 0.9 million and $ 9.1 million for the six months ended June 30, 2021 and 2020, respectively, under the provisions of the UCSB Agreement.

As of June 30, 2021 and December 31, 2020, there was no outstanding sublicense fee payable to UCSB.

The Company incurred no sublicense expenses for the three months ended September 30, 2021 and 2020, and $ 0.9 million and $ 9.1 million for the nine months ended September 30, 2021 and 2020, respectively, under the provisions of the UCSB Agreement.

As of September 30, 2021 and December 31, 2020, there was no outstanding sublicense fee payable to UCSB.

In January 2021, the Company completed an underwritten public offering of 14,285,714 shares of common stock at a price of $ 7.00 per share.

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Stock Options

Activities under the Company’s stock option plans for the six months ended June 30, 2021 were as follows:

Activities under the Company’s stock option plans for the nine months ended September 30, 2021 were as follows:

Options Outstanding

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Option forfeited/expired

Balances at June 30, 2021

Options exercisable at June 30, 2021

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Notes to Condensed Financial Statements (Unaudited)—(Continued)

Balances at September 30, 2021

Options exercisable at September 30, 2021

Stock-based Compensation

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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Total stock-based compensation expense

CYTOMX THERAPEUTICS, INC.

Notes to Condensed Financial Statements (Unaudited)—(Continued)

Operating Lease

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In addition, the Company obtained a standby letter of credit (the “Letter of Credit”) in an amount of approximately $ 0.9 million, which may be drawn by the Landlord to be applied for certain purposes upon the Company’s breach of any provisions under the 2016 Lease.

The Company has recorded the $ 0.9 million Letter of Credit as non-current restricted cash on its balance sheet as of June 30, 2021 and December 31, 2020, respectively.

The Company has recorded the $ 0.9 million Letter of Credit as non-current restricted cash on its balance sheet as of September 30, 2021 and December 31, 2020, respectively.

Rent expense is recognized on a straight-line basis over the term of the lease and accordingly the Company records the difference between cash rent payments and the recognition of rent expense against the operating lease ROU asset.

Rent expense for each of the three months ended June 30, 2021 and 2020 was $ 1.3 million.

Rent expense for each of the six months ended June 30, 2021 and 2020 was $ 2.5 million.

Rent expense for each of the three months ended September 30, 2021 and 2020 was $ 1.3 million.

Rent expense for each of the nine months ended September 30, 2021 and 2020 was $ 3.8 million.

Supplemental information related to leases are as follows:

Three Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

(in thousands)

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Operating cash flows from operating leases

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Notes to Condensed Financial Statements (Unaudited)—(Continued)

June 30, 2021

September 30, 2021

December 31, 2020

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Operating lease

June 30, 2021

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Notes to Condensed Financial Statements (Unaudited)—(Continued)

September 30, 2021

(in thousands)

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Vytacera Bio, LLC filed its Answer to CytomX Therapeutics Inc.’s Counterclaims on June 5, 2020 .

The parties have agreed to a case schedule.

Discovery is ongoing.

The Company believes that the lawsuit is without merit and intends to vigorously defend itself and has no t recorded any amount for claims associated with this lawsuit as of June 30, 2021.

On October 13, 2021, the Court granted the parties’

stipulation to stay all pending case deadlines except for certain matters.

Thus, fact and expert discovery are presently stayed.

The Company believes that the lawsuit is without merit and intends to vigorously defend itself and has no t recorded any amount for claims associated with this lawsuit as of September 30, 2021.

The Company records the effect of an enacted change in a tax law in the period that includes the enactment date in accordance with ASC 740.

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The tax relief measures under the CARES Act for businesses include a five-year net operating loss carryback, suspension of annual deduction limitation of 80 % of taxable income from net operating losses generated in a tax year beginning after December 31, 2017, changes in the deductibility of interest, acceleration of alternative minimum tax credit refunds, payroll tax relief, and a technical correction to allow accelerated deductions for qualified improvement property.

The income tax benefit for the six months ended June 30, 2020 was generated as a result of the recognition of net operating loss carryback under the CARES Act which generated a refund of income taxes paid for 2018.

The Company maintains a full valuation allowance against its net deferred tax assets due to the Company’s history of losses as of June 30, 2021 and December 31, 2020 .

The income tax benefit for the nine months ended September 30, 2020 was generated as a result of the recognition of net operating loss carryback under the CARES Act which generated a refund of income taxes paid for 2018.

The Company maintains a full valuation allowance against its net deferred tax assets due to the Company’s history of losses as of September 30, 2021 and December 31, 2020 .

Management’s Discuss ion and Analysis of Financial Condition and Results of Operations

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We are a clinical-stage, oncology-focused biopharmaceutical company with a vision of transforming lives with safer, more effective therapies.

We are advancing a robust pipeline of novel, potential first-in-class antibody-based therapeutics created using our Probody® technology platform.

We are advancing a robust pipeline of novel, potential first-in-class and best-in-class antibody-based therapeutics created using our Probody® technology platform.

Probody therapeutics are designed to be conditionally activated in the tumor microenvironment, effectively enabling the targeting of cancer tissues more specifically, while minimizing deleterious activity in healthy tissues and in circulation.

We achieve this “conditional activation”

by modifying our Probody therapeutics with a mask that is designed to block binding to target until the mask is removed by proteases.

Proteases are enzymes that are more abundant in the tumor microenvironment than in normal tissue, potentially leading to an enrichment of therapeutic activity in the tumor.

by modifying our therapeutic product candidates with a mask that is designed to block binding to target until the mask is removed by proteases.

Proteases are enzymes that are more active in the tumor microenvironment than in normal tissue, potentially leading to an enrichment of therapeutic activity in the tumor.

We believe this innovative approach, that we have pioneered, has the promise to improve cancer treatments in three ways by:

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Approximately 40 evaluable patients will be enrolled into each arm of the study.

Due primarily to impacts from COVID-19, including slower clinical-trial site activation and patient enrollment, we expect initial data from the praluzatamab ravtansine study in 2022.

While in August 2021, we announced that the COVID-19 pandemic had negatively impacted clinical trial site activation and patient enrollment, our continuing efforts to overcome this challenge, including opening additional sites in U.S., Europe, and Asia, as well as partnering with patient advocacy groups to encourage enrollment from underrepresented populations, have allowed us to maintain our current outlook for initial data from the praluzatamab ravtansine study in 2022.

Additionally, CX-2029, the CD71-directed ADC, is being evaluated in four cohorts as a treatment for patients with squamous non-small cell lung cancer, head and neck squamous cell carcinoma, esophageal and gastro-esophageal junction cancers, and diffuse large B-cell lymphoma.

Twenty-five evaluable patients are targeted for each cohort.

We expect initial data from the CX-2029 study to be available in the fourth quarter of 2021.

Initial data from the CX-2029 study remains on track for the fourth quarter of 2021.

Our clinical-stage pipeline also includes cancer immunotherapeutic candidates against validated targets such as CTLA-4.

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Bristol Myers Squibb also continues to evaluate BMS-986288, a Probody version of non-fucosylated ipilimumab, as monotherapy or in combination with nivolumab in a Phase 1 clinical trial.

We have two preclinical agents in investigational new drug application (“IND”)-enabling studies, including CX-2043, our third conditionally activated ADC targeting the epithelial cell adhesion molecule (“EpCAM”), a widely expressed tumor antigen.

CX-2043 has demonstrated potent anti-tumor activity across multiple cancer types and superior tolerability in animal models compared to the corresponding unmasked ADC.

We, in partnership with Amgen, also have CX-904, a conditionally activated T-cell-engaging bispecific antibody candidate against the epidermal growth factor receptor (“EGFR”) on tumor cells and CD3 on T cells, in IND-enabling studies.

We submitted a pre-IND meeting request to the U.S.

Food and Drug Administration (“FDA”) and we expect written responses to our questions from the FDA in the third quarter of 2021.

We will continue to discuss the program with Amgen and are working toward the filing of an IND for CX-904 in late 2021 .

We are also engaged in broad drug discovery efforts towards the generation of new clinical candidates for the treatment of cancer,

including the application of our conditional activation platform to the engineering of novel, locally active cytokines, including interferon-alpha-2b.

We have two preclinical agents in investigational new drug application (“IND”)-enabling studies.

In partnership with Amgen, we are developing CX-904, a conditionally activated T-cell-engaging bispecific antibody candidate against the epidermal growth factor receptor (“EGFR”) on tumor cells and CD3 on T cells.

We expect to file an IND for CX-904 in late 2021.

CX-2043 is a lead candidate within our conditionally activated ADC program targeting the epithelial cell adhesion molecule (“EpCAM”), a widely expressed tumor antigen.

CX-2043 has demonstrated potent anti-tumor activity across multiple cancer types and superior tolerability in animal models compared to the

corresponding unmasked ADC.

We are also engaged in broad drug discovery efforts towards the generation of new clinical candidates for the treatment of cancer, including the application of our conditional activation platform to the engineering of novel, locally active cytokines, including interferon-alpha-2b.

On January 25, 2021, we completed an underwritten public offering of 14,285,714 shares of common stock at a price of $7.00 per share.

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We are not profitable and have incurred losses in each year since our founding in 2008.

Our net loss was $19.2 million and $34.8 million and for the three and six months ended June 30, 2021, respectively.

As of June 30, 2021 and December 31, 2020, we had an accumulated deficit of $484.9 million and $450.1 million, respectively.

Our net loss was $22.6 million and $57.4 million and for the three and nine months ended September 30, 2021, respectively.

As of September 30, 2021 and December 31, 2020, we had an accumulated deficit of $507.5 million and $450.1 million, respectively.

We expect to continue to incur significant losses for the foreseeable future.

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Since then, we have revised our strategy for developing praluzatamab ravtansine, and have initiated our Phase 2 clinical trial for praluzatamab ravtansine.

The COVID-19 outbreak and any preventative or protective actions that we, our collaboration partners or others may take in respect of the virus may result in further disruption for our clinical trials, including clinical trials for praluzatamab ravtansine and CX-2029, manufacturing, research, financial reporting capabilities and operations generally and could potentially impact our patients, partners, employees and third parties.

For example, we continue to be impacted by COVID-19 in our clinical trials, particularly in site initiation and patient enrollment for our ongoing Phase 2 clinical trial for praluzatamab ravtansine.

As a result, we now believe initial data from that clinical trial will be available in 2022.

The COVID-19 outbreak and any preventative or protective actions that we, our collaboration partners or others have taken, or may take, in respect of the virus may result in further disruption for our clinical trials, including clinical trials for praluzatamab ravtansine and CX-2029, manufacturing, research, financial reporting capabilities and operations generally and could potentially impact our patients, partners, employees and third parties.

Any resulting financial impact cannot be reasonably estimated at this time but may materially affect the business and our financial condition and results of operations.

The extent to which the COVID-19 pandemic continues to impact our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions necessary to contain the virus or treat its impact, among others.

Currently, it is not possible to predict how long the pandemic will last or the time that it will take for economic activity to return to its prior levels.

We do not yet know the full extent of any impact or delay on our business or our operations, including clinical trial activity, however, we will continue to monitor the COVID-19 situation closely and operate in accordance with all relevant health and safety guidelines as they evolve.

Currently, it is not possible to predict how long the pandemic will last or the extent or degree of its ongoing impact on economic activity, and our business.

We do not know the full extent of any impact or delay on our business or our operations, including clinical trial activity, however, we will continue to monitor the COVID-19 situation closely and operate in accordance with all relevant health and safety guidelines as they evolve in response to changing public health conditions.

Critical Accounting Policies and Estimates

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On an ongoing basis, management evaluates its significant accounting policies and estimates.

We base our estimates on historical experience and on various market-specific and other relevant assumptions that we believe to be reasonable

under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

base our estimates on historical experience and on various market-specific and other relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results may differ significantly from these estimates.

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A summary of our critical accounting policies and estimates is presented in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2020.

There have been no material changes to our critical accounting policies and estimates during the three and six months ended June 30, 2021.

There have been no material changes to our critical accounting policies and estimates during the three and nine months ended September 30, 2021.

Components of Results of Operations

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Interest income primarily consists of interest income from our cash equivalents and investments, and accretion of discounts or amortization of premiums on our investments.

Other Income, Net

Other income, net consists primarily of gains and losses resulting from changes to currency exchange rates.

Other income (expense), Net

Other income (expense), net consists primarily of gains and losses resulting from changes to currency exchange rates.

Income taxes are recorded in accordance with ASC 740 , Accounting for Income Taxes, or ASC 740 , which provides for deferred taxes using an asset and liability approach.

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Results of Operations

For the Three and Six Months Ended June 30, 2021 and 2020.

For the Three and Nine Months Ended September 30, 2021 and 2020.

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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Total Revenue

The decrease in revenue of $0.3 million for the three months ended June 30, 2021 compared to the corresponding period of 2020 was primarily due to:

a decrease in revenue from Amgen of $1.8 million driven by additional revenue recognized through June 30, 2020 given the completion of CX-904 clinical candidate characterization phase and its progress into the IND-enabling phase earlier than planned under the Collaboration and License Agreement with Amgen (the “Amgen Agreement”);

an increase in revenue from AbbVie of $0.8 million primarily due to a higher percentage of completion in the current quarter resulting from incremental FTE hours incurred for the CD71 program;

an increase in revenue from Astellas of $0.7 million primarily due to the increased research services during the current quarter under the Collaboration and License Agreement with Astellas (the “Astellas Agreement”) entered into in March 2020.

The decrease in revenue of $33.9 million for the six months ended June 30, 2021 compared to the corresponding period of 2020 was primarily due to:

Revenue for the three months ended September 30, 2021 was relatively flat as compared to the corresponding period of 2020 with the following notable variances:

revenue from AbbVie was lower by $1.3 million due to lower percentage of completion in the current quarter for the CD71 program given additional projected hours-to-completion and increase in the research period driven by the COVID-19 pandemic.

an increase in revenue from Amgen of $0.8 million driven by higher percentage of completion of the CX-904 project in the current quarter compared to the same period in the prior year under the Collaboration and License Agreement with Amgen (the “Amgen Agreement”);

The decrease in revenue of $34.1 million for the nine months ended September 30, 2021 compared to the corresponding period of 2020 was primarily due to:

a decrease in revenue of $29.5 million from AbbVie primarily due to the $40.0 million milestone payment earned in the first quarter of 2020 for satisfying the CD71 dose escalation success criteria milestone under the CD71 Co-Development and Licensing Agreement (the “CD71 Agreement”), of which $26.6 million was recognized reflecting the project percentage completion to date in the first quarter of 2020;

a decrease in revenue from Bristol Myers Squibb of $10.0 million due to the recognition in full of the $10.0 million milestone payment earned for achieving the dosing of first patient in the Part 2 cohort expansion of the ongoing CTLA-4 program by Bristol Myers Squibb in February 2020;

a decrease in revenue from Amgen of $0.9 million primarily due to a decrease in the projected FTE hours-to-completion and higher percentage of completion resulting from the completion of the clinical candidate characterization phase during the six months ended June 30, 2020 and moving to the IND-enabling phase earlier than planned;

an increase in revenue from Astellas of $5.1 million due to a full six-month recognition of the $80.0 million upfront payment over the estimated research service period of five years under the Astellas Agreement entered into in March 2020, as well as the increased research services during the current period.

partially offset by

an increase in revenue from Astellas of $5.4 million due to a full nine-month recognition of the $80.0 million upfront payment over the estimated research service period of five years under the Astellas Agreement entered into in March 2020, as well as the increased research services during the current period.

Operating Costs and Expenses

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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Research and development expenses

Research and development expenses increased $2.0 million during the three months ended June 30, 2021 compared to the corresponding period in 2020.

The change was driven mainly by increases in laboratory contracts and services and laboratory supplies and equipment expenses due to timing of manufacturing and tissue sampling activities.

Research and development expenses decreased $18.4 million during the six months ended June 30, 2021 compared to the corresponding period in 2020.

The decrease was attributable to the following:

Research and development expenses increased $5.1 million during the three months ended September 30, 2021 compared to the corresponding period in 2020.

The change was driven mainly by an increase of $3.4 million in personnel related expenses, clinical trial expenses and consulting and contract services primarily related to of CX-2009 and CX-2029;

and increase of $1.2 million in laboratory contracts and services and laboratory supplies and equipment expenses due to timing of manufacturing and tissue sampling activities.

Research and development expenses decreased $13.3 million during the nine months ended September 30, 2021 compared to the corresponding period in 2020.

The decrease was mainly attributable to the following:

a decrease of $11.2 million in licensing expenses, of which $8.2 million related to UCSB sublicense fees incurred on payments to us from various collaboration partners upon the achievements of certain milestones as well as the upfront payment from Astellas pursuant to the Astellas Agreement;

and $3.0 million to ImmunoGen pursuant to the CX-2009 License as we initiated the first dosing of a patient in the praluzatamab ravtansine (CX-2009) Phase 2 clinical trial in February 2020;

a decrease of $7.5 million in laboratory contracts and services due to timing of manufacturing activities as well as clinical trial related expenses.

a decrease of $3.2 million in laboratory contracts and services due to timing of manufacturing activities, as well as $2.5 million decrease of clinical trial related expenses;

partially offset by

an increase of $2.6 million in laboratory supplies and equipment expenses related to tissue sampling activities as well as consulting and contract services related to CX-2009 and CX-2029.

The following table summarizes our research and development expenses by program incurred during the respective periods presented:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

External costs incurred by product candidate (target):

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Total research and development expenses

The increase in research and development expenses for the three months ended June 30, 2021 compared to the corresponding period of 2020 was attributable to the following changes by project:

The increase in CX-2029 expenses was primarily due to increases in clinical trial expenses and laboratory contract services resulting from the timing of manufacturing and other research activities.

The increase in “Other wholly owned and partnered programs”

was primarily due to increases in clinical trial expenses and laboratory contract services resulting from the timing of manufacturing as wells as other research activities in the EpCAM study.

The decrease in research and development expenses for the six months ended June 30, 2021 compared to the corresponding period of 2020 was attributable to the following changes by project:

The increase in research and development expenses for the three months ended September 30, 2021 compared to the corresponding period of 2020 was attributable to the following changes by project:

The increase in CX-2009 expenses was primarily due to increases in clinical trial expenses of $1.0 million, resulting from increase in patient enrollment activities and laboratory contract services of $3.2 million, resulting from the timing of manufacturing and other research activities.

The increase in CX-2029 expenses was primarily due to increases in clinical trial expenses of $1.0 million resulting from increase in patient enrollment activities.

The decrease in “Other wholly owned and partnered programs”

was primarily due to a decrease of $2.7 million in laboratory contract and services related to the CX-904 project as it moved into IND application preparation phase.

The decrease in research and development expenses for the nine months ended September 30, 2021 compared to the corresponding period of 2020 was attributable to the following changes by project:

The decrease in CX-072 expenses was primarily due to a $6.2 million decrease in clinical trial related expenses and $1.4 million decrease in laboratory contract services as a result of the timing of manufacturing and other research activities in the CX-072 study and the termination of the CX-072-002 study to evaluate the anti-PD-L1 Probody CX-072 in combination with ipilimumab in melanoma.

The decrease in CX-2009 expenses was primarily due to a $3.0 million licensing payment to ImmunoGen incurred in the first quarter of 2020, a $1.8 million decrease in laboratory contract services in current period resulting from the timing of manufacturing and other research activities, partially offset by $0.5 million increase in clinical trial expenses.

The decrease in “Other wholly owned and partnered programs”

was primarily due to a $6.0 million sublicense fee payment to UCSB related to the $80.0 million upfront payment under the Astellas Agreement during the first quarter of 2020;

a $4.2 million decrease in laboratory contract and services related to the CX-904 program as it moved into IND application preparation phase;

partially offset by an increase of $1.1 million in laboratory contracts and services expenses related to the EpCAM program due to increase in pre-clinical activities.

The increase in CX-2029 expenses was primarily driven by a $2.5 million increase in clinical trial expenses and laboratory contract and services due to increase in patient enrollment activities.

The increase in CX-2009 expenses was primarily driven by approximately $4.0 million increase in total expenses, of which $3.0 million was related to clinical trial studies and laboratory contract services due to increase in research activities;

partially offset by a $3.0 million licensing payment to ImmunoGen incurred in the first quarter of 2020.

General and Administrative Expenses

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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General and administrative expenses

General and administrative expenses were essentially flat during the three and six months ended June 30, 2021 compared to the corresponding periods in 2020.

General and administrative expenses increased by $2.5 million during the three months ended September 30, 2021 compared to the corresponding period in 2020.

The increase was attributable to an increase of $1.3 million in personnel related and recruiting expenses as well as an increase of $1.2 million in in professional services.

General and administrative expenses increased by $2.8 million during the nine months ended September 30, 2021 compared to the corresponding period in 2020.

The increase was attributable to an increase of $2.2 million in personnel related and recruiting expenses as well as an increase of $0.6 million in in professional services.

Interest Income and Other Income (Expense)

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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Interest Income

Interest income decreased by $0.4 million and $1.4 million, respectively, during the three and six months ended June 30, 2021 compared to the corresponding periods in 2020, primarily driven by lower interest rates in 2021.

Interest income decreased by $0.1 million and $1.5 million, respectively, during the three and nine months ended September 30, 2021 compared to the corresponding periods in 2020, primarily driven by lower interest rates in 2021.

Benefit From Income Taxes

There was no income tax expense for the three months ended June 30, 2021 and 2020, respectively, as we were in a taxable loss position and we had minimal changes in our unrealized gain on available for sale debt securities.

Income tax benefit decreased by $13.9 million during the six months ended June 30, 2021, compared to the corresponding period in 2020.

The income tax benefit of $13.9 million for the six months ended June 30, 2020 was generated due to the recognition of net operating loss carrybacks under the CARES Act, which generated a refund of taxes paid for 2018.

There was no income tax expense for the three months ended September 30, 2021 and 2020, respectively, as we were in a taxable loss position and we had minimal changes in our unrealized gain on available for sale debt securities.

Income tax benefit decreased by $13.9 million during the nine months ended September 30, 2021, compared to the corresponding period in 2020.

The income tax benefit of $13.9 million for the nine months ended September 30, 2020 was generated due to the recognition of net operating loss carrybacks under the CARES Act, which generated a refund of taxes paid for 2018.

Liquidity and Capital Expenditures

Sources of Liquidity

As of June 30, 2021, we had cash, cash equivalents and investments of $366.1 million and an accumulated deficit of $484.9 million, compared to cash, cash equivalents and investments of $316.1 million and an accumulated deficit of $450.1 million as of December 31, 2020.

As of September 30, 2021, we had cash, cash equivalents and investments of $336.3 million and an accumulated deficit of $507.5 million, compared to cash, cash equivalents and investments of $316.1 million and an accumulated deficit of $450.1 million as of December 31, 2020.

To date, we have financed our operations primarily through sales of our common stock in conjunction with the IPO and subsequent stock offerings and through our at-the-market offering, sales of our convertible preferred securities prior to our IPO and payments received under our collaboration agreements.

Based upon our current operating plan, we expect our existing capital resources will be sufficient to fund operations for a period of at least twelve months from the date the financial statements included in this report are issued.

Based upon our current operating plan, we expect our existing capital resources will be sufficient to fund operations for a period of at least twelve months from the issuance date of the financial statements included in this report.

However, if the anticipated operating results and future financing are not achieved in future periods, our planned expenditures may need to be reduced in order to extend the time period over which the then-available resources would be able to fund the operations.

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in this Quarterly Report on Form 10-Q.

The cost and timing of developing our products, including praluzatamab ravtansine (CX-2009), and CX-2029, and pacmilimab (CX-072) are highly uncertain, are subject to substantial risks and many changes.

The cost and timing of developing our product candidates, including praluzatamab ravtansine (CX-2009), and CX-2029, and pacmilimab (CX-072) are highly uncertain, are subject to substantial risks and many changes.

As such, we may alter our expenditures as a result of contingencies such as the failure of one or all of our product candidates currently in clinical development, the acceleration of one or all of our product candidates in clinical development, the initiating of clinical trials for additional product candidates, the identification of more promising product candidates in our research efforts or unexpected operating costs and expenditures.

We will need to raise additional funds in the future.

There can be no assurance, however, that such efforts will be successful or that, in the event that they are successful, the terms and conditions of such financing will be favorable to us.

There can be no assurance, however, that such efforts will be successful;

or if they are successful, that the terms and conditions of such financing will be favorable to us.

Summary Statement of Cash Flows

The following table summarizes our cash flows for the periods indicated:

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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Cash Flows from Operating Activities

During the six months ended June 30, 2021, cash used in operating activities was $58.1 million, which consisted of a net loss of $34.8 million and a net decrease of $33.0 million relating to the change of our net operating assets and liabilities, offset by non-cash charges of $9.7 million.

During the nine months ended September 30, 2021, cash used in operating activities was $87.8 million, which consisted of a net loss of $57.4 million and a net decrease of $44.7 million relating to the change of our net operating assets and liabilities, offset by non-cash charges of $14.3 million.

The non-cash charges primarily consisted of $9.6 million in stock-based compensation, $2.3 million in non-cash lease expense, $2.1 million in depreciation and amortization and $0.3 million in amortization of premium on investments.

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a net decrease of $47.3 million in deferred revenue resulting from the continued recognition of deferred revenue from existing customers;

a decrease of $6.7 million in accounts payable, accrued and other long-term liabilities primarily due to timing of payment and a reduction in research and clinical expenses;

an increase of $4.4 million in cash flows from other assets, prepaid and other current assets.

During the six months ended June 30, 2020, cash provided by operating activities was $47.4 million, which consisted of a net loss of $3.5 million adjusted by non-cash charges of $9.9 million and a net increase of $41.0 million relating to the change of our net operating assets and liabilities.

The non-cash charges primarily consisted of $7.5 million in stock-based compensation, $1.4 million in non-cash lease expense and $1.3 million in depreciation and amortization, which amounts were partially offset by $0.3 million in accretion of discounts on our investments.

a decrease of $1.9 million in accounts payable, accrued and other long-term liabilities primarily due to timing of payments and an increase in research and clinical expenses;

an increase of $4.5 million in cash flows from other assets, prepaid and other current assets primarily due to reduced advance payments to our third party manufacturing vendors and timing of payments.

During the nine months ended September 30, 2020, cash provided by operating activities was $22.7 million, which consisted of a net loss of $18.2 million, adjusted by non-cash charges of $15.1 million and a net increase of $25.8 million relating to the change of our net operating assets and liabilities.

The non-cash charges primarily consisted of $11.4 million in stock-based compensation, $2.1 million in non-cash lease expense and $1.9 million in depreciation and amortization, which amounts were partially offset by $0.3 million in accretion of discounts on our short-term investments.

The change in our net operating assets and liabilities was primarily due to:

a net increase of $64.0 million in deferred revenue resulting primarily from the $80.0 million upfront payment due from Astellas as well as the $40.0 million milestone payment due from AbbVie, partially offset by the continued recognition of deferred revenue from existing and new customers, including the $26.6 million revenue recognized from the $40.0 million milestone payment earned in the first quarter of 2020, which reflected the percentage completed to-date on the project;

an increase of $1.2 million in cash flows from other assets and accounts payable;

a net increase of $46.8 million in deferred revenue resulting primarily from the $80.0 million upfront payment from Astellas as well as the $40.0 million milestone payment from AbbVie, partially offset by the continued recognition of deferred revenue from existing and new customers, including the $26.6 million revenue recognized in the first quarter of 2020, which reflected the percentage completed to-date on the project under the CD71 Agreement when the $40.0 million milestone was earned in the first quarter of 2020;

a decrease of $11.5 million in cash flows from prepaid expenses and other current assets, which included a $13.1 million income tax receivable resulting from a carryback of net operating loss incurred in 2019 to the preceding years as permitted by the CARES Act;

a decrease of $9.3 million in accrued liabilities primarily due to payment of $7.5 million for the ImmunoGen 2019 License;

a decrease in cash flow of $0.2 million from accounts receivable primarily related to research and development service fees due from Astellas pursuant to the Astellas Agreement.

Cash Flows from Investing Activities

During the six months ended June 30, 2021, cash provided by investing activities was $13.0 million, which consisted of $114.0 million in proceeds received upon the maturity of short-term marketable securities, partially offset by $99.9 million used in the purchase of long-term investments and $1.1 million of capital expenditures used to purchase property and equipment.

During the six months ended June 30, 2020, cash provided by investing activities was $51.9 million, which consisted of $97.7 million in proceeds received upon the maturity of marketable securities, partially offset by $44.7 million used in the purchase of short-term investments and $1.1 million of capital expenditures used to purchase property and equipment.

During the nine months ended September 30, 2021, cash provided by investing activities was $22.7 million, which consisted of $124 million in proceeds received upon the maturity of short-term marketable securities, partially offset by $99.9 million used in the purchase of long-term investments and $1.4 million of capital expenditures used to purchase property and equipment.

During the nine months ended September 30, 2020, cash used in investing activities was $38.2 million, which consisted of $189.0 million used in the purchase of short-term investments and $1.9 million of capital expenditures used to purchase property and equipment, partially offset by $152.7 million in proceeds received upon the maturity of marketable securities.

Cash Flows from Financing Activities

During the six months ended June 30, 2021, cash provided by financing activities consisted of $107.7 million of net proceeds from the follow-on public offering and $1.7 million of proceeds from the exercise of stock options and employee stock purchases under the employee stock purchase plan.

During the six months ended June 30, 2020, cash provided by financing activities primarily consisted of proceeds from the exercise of stock options and employee stock purchases under the employee stock purchase plan.

During the nine months ended September 30, 2021, cash provided by financing activities consisted of $107.7 million of net proceeds from the follow-on public offering and $1.8 million of proceeds from the exercise of stock options and employee stock purchases under the employee stock purchase plan.

During the nine months ended September 30, 2020, cash provided by financing activities primarily consisted of proceeds from the exercise of stock options and employee stock purchases under the employee stock purchase plan.

Contractual Obligations

During the three and six months ended June 30, 2021, there were no material changes in contractual obligations from the amounts disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020.

During the three and nine months ended September 30, 2021, there were no material changes in contractual obligations from the amounts disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020.

Segment Information

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These risks primarily relate to interest rate risks.

We had cash, cash equivalents and investments of $366.1 million as of June 30, 2021 and cash, cash equivalents and investments of $316.1 million as of December 31, 2020, which consists of bank deposits, money market funds and U.S.

We had cash, cash equivalents and investments of $336.3 million as of September 30, 2021 and cash, cash equivalents and investments of $316.1 million as of December 31, 2020, which consists of bank deposits, money market funds and U.S.

government bonds.

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We have not historically been exposed to material risks due to changes in interest rates.

Based on our investment positions as of June 30, 2021, a hypothetical 100 basis point change in interest rates would not have material effect in the fair value of the portfolio.

Based on our investment positions as of September 30, 2021, a hypothetical 100 basis point change in interest rates would not have material effect in the fair value of the portfolio.

Controls and Proc edures

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Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their control objectives.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2021, the end of the period covered by this Quarterly Report on Form 10-Q.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2021, the end of the period covered by this Quarterly Report on Form 10-Q.

Management’s assessment of internal control over financial reporting was conducted using the criteria defined in the Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

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Changes in Internal Controls Over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended June 30, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended September 30, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II –

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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 4. Controls and Procedures