What changed in this filing

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Item 1A. Risk Factors

2020-11-05 compared with 2020-08-14 · 108 added, 108 removed, 1205 unchanged (15% of the section changed)

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Since inception, we have incurred significant operating losses.

Our net loss was $23.5 million for the year ended December 31, 2019 and $17.4 million for the six months ended June 30, 2020.

As of June 30, 2020, we had an accumulated deficit of $72.2 million.

Our net loss was $23.5 million for the year ended December 31, 2019 and $29.8 million for the nine months ended September 30, 2020.

As of September 30, 2020, we had an accumulated deficit of $84.6 million.

To date, we have financed our operations primarily through the sale of common stock in our initial public offering, or IPO, and the sale of convertible preferred stock.

We have devoted substantially all of our financial resources and efforts to research and development, including clinical trials and preclinical studies of IMR-687.

We are still in the early stages of development of our only product candidate, IMR-687, and we have not completed development of IMR-687 nor have we identified and pursued any other product candidates.

We are still in the early stages of development of our only product candidate, IMR-687.

We expect to continue to incur significant expenses and operating losses over the next several years.

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navigate the impacts of COVID-19 and our response to it;

continue to advance clinical development of IMR-687, including our ongoing Phase 2a and open label extension, or OLE, clinical trials in patients with sickle cell disease, or SCD, and our recently initiated Phase 2b clinical trials in patients with SCD and β-thalassemia;

continue to advance clinical development of IMR-687, including our ongoing Phase 2a, open label extension, or OLE, and Phase 2b clinical trials in patients with sickle cell disease, or SCD, and our ongoing Phase 2b clinical trials in patients with β-thalassemia;

expand our planned research and development efforts for IMR-687 and pursue preclinical and, potentially, clinical activities for IMR-687 in heart failure with preserved ejection fraction, or HFpEF;

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Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.

Our failure to become and remain profitable would depress the value of our company and could impair our ability to raise capital, expand our business, maintain our research and development efforts, diversify our pipeline of product candidates or even continue our operations.

A decline in the value of our company could also cause our stockholders to lose all or part of their investme nt .

A decline in the value of our company could also cause our stockholders to lose all or part of their investment .

We are heavily dependent on the success of IMR-687, our only product candidate.

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Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations.

As of June 30, 2020, we had cash, cash equivalents and investments of $106.3 million.

As of September 30, 2020, we had cash, cash equivalents and investments of $96.1 million.

We believe that our existing cash, cash equivalents and investments will enable us to fund our operating expenses and capital expenditure requirements into mid-2022.

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Our future capital requirements will depend on many factors, including:

the severity and duration of the impact of the COVID-19 pandemic and our response to it;

the time and cost necessary to complete our ongoing Phase 2a and OLE clinical trials of IMR-687 in patients with SCD, to initiate and complete our Phase 2b clinical trial of IMR-687 in patients with SCD, to initiate and complete one or more pivotal clinical trials of IMR-687in SCD, and to pursue regulatory approvals for IMR-687 in SCD, and the costs of post-marketing studies that could be required by regulatory authorities;

the progress and results of our Phase 2a and OLE clinical trials of IMR-687 in patients with SCD;

the time and cost necessary to complete our Phase 2b clinical trial of IMR-687 in patients with β-thalassemia;

our ability to further advance IMR-687 in clinical development, and the timing and scope of these development activities;

our ability to advance IMR-687 in HFpEF through preclinical and, potentially, clinical development, and the timing and scope of these development activities;

the impact of the COVID-19 pandemic and our response to it;

the time and cost necessary to complete our ongoing Phase 2a, OLE and Phase 2b clinical trials of IMR-687 in patients with SCD, to initiate and complete one or more pivotal clinical trials of IMR-687 in SCD, and to pursue regulatory approvals for IMR-687 in SCD, and the costs of post-marketing studies that could be required by regulatory authorities;

the time and cost necessary to complete our Phase 2b clinical trial of IMR-687 in patients with β-thalassemia, to initiate and complete one or more pivotal clinical trials of IMR-687 in β-thalassemia, and to pursue regulatory approvals for IMR-687 in β-thalassemia, and the costs of post-marketing studies that could be required by regulatory authorities;

our ability to advance IMR-687 in HFpEF through preclinical and, potentially, clinical development, and the timing and scope of these research and development activities;

the costs of obtaining clinical and commercial supplies of IMR-687 and any other product candidates we may identify and develop;

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Adequate additional financing may not be available to us on acceptable terms, or at all.

For example, the global COVID-19 pandemic has negatively impacted, and may continue to negatively impact, the global financial markets, which may reduce our ability to raise additional capital.

For example, the global COVID-19 pandemic has created significant uncertainty in the globa l financial markets, which may reduce our ability to raise additional capital.

In addition, we may seek additional capital when market conditions are favorable, or for strategic considerations, even if we believe we have sufficient funds for our current or future operating plans.

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As of December 31, 2019, we had federal NOLs of $48.6 million and state NOLs of $48.9 million.

In general, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, and corresponding provisions of state law, a corporation that undergoes an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three year period, is subject to limitations on its ability to u tilize its pre-change NOLs and research and development tax credit carryforwards to offset future taxable income.

In general, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, and corresponding provisions of sta te law, a corporation that undergoes an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three year period, is subject to limitations on its ability to util ize its pre-change NOLs and research and development tax credit carryforwards to offset future taxable income.

We have not conducted a study to assess whether any such ownership changes have occurred.

We may have experienced such ownership changes in th e past and may experience such ownership changes in the future as a result of subsequent changes in our stock ownership (which may be outside our control).

As a result, if, and to the extent that, we earn net taxable income, our ability to use our pre-chan ge NOLs and research and development tax credit carryforwards to offset such taxable income may be subject to limitations .

We may have experienced such ownership changes in the p ast and may experience such ownership changes in the future as a result of subsequent changes in our stock ownership (which may be outside our control).

As a result, if, and to the extent that, we earn net taxable income, our ability to use our pre-change NOLs and research and development tax credit carryforwards to offset such taxable income may be subject to limitations .

There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs, or other unforeseen reasons, our existing NOLs could expire or otherwise become unavailable to offset future income tax liabilities.

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For these reasons, even if we attain profitability, we may be unable to use a material portion of our NOLs and other tax attributes.

Our business and operations have been and may continue to be adversely affected by the ongoing COVID-19 pandemic, as have the operations of our suppliers and manufacturers and other third-party service providers.

Our business and operations have been and may continue to be adversely affected by the ongoing COVID-19 pandemic, as may the operations of our suppliers and manufacturers and other third-party service providers.

In December 2019, a novel strain of coronavirus, called COVID-19, emerged in Wuhan, Hubei Province, China, which has now spread globally, including to the United States, the United Kingdom and the European Union.

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The future progression of the pandemic and its effects on our business and operations are uncertain.

The spread of COVID-19 has modestly affected our operations to date, including by causing minor disruptions in the conduct of our clinical trials.

The spread of COVID-19 has affected our operations to date, including by causing delays in the conduct of our clinical trials.

While we have not experienced any significant disruptions with the third parties on which we rely, the spread of COVID-19, or another infectious disease, could also negatively affect the operations of our third-party manufacturers, which could result in disruptions in the supply of IMR-687.

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We have enrolled and seek to enroll patients in our ongoing clinical trials at sites located both in the United States and internationally.

The COVID-19 pandemic may delay or otherwise adversely affect these clinical development activities, including our ability to recruit and retain patients in our ongoing clinical trials, as a result of many factors, including:

The COVID-19 pandemic has delayed and may continue to delay or otherwise adversely affect these clinical development activities, including our ability to recruit and retain patients in our ongoing clinical trials, as a result of many factors, including:

diversion of healthcare resources away from the conduct of our clinical trials in order to focus on pandemic concerns, including the availability of necessary materials, the attention of physicians serving as our clinical trial investigators, access to hospitals serving as our clinical trial sites, availability of hospital staff supporting the conduct of our clinical trials and the reluctance of patients enrolled in our clinical trials to visit clinical trial sites;

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availability of future capacity at contract manufacturers to produce sufficient drug substance and drug product to meet forecasted clinical trial demand if any of these manufacturers elect or are required to divert attention or resources to the manufacture of other pharmaceutical products.

For example, the COVID-19 pandemic has resulted in minor disruptions to our clinical trial operations, including some missed and incomplete patient visits in our ongoing Phase 2a clinical trial of IMR-687 in SCD and site activation and enrollment delays an d delays in review of our regulatory submissions with respect to our Phase 2b clinical trials of IMR-687 in SCD and β -thalassemia .

For example, the COVID-19 pandemic has resulted in disruptions to our clinical trial operations, including some missed and incomplete patient visits in our ongoing Phase 2a clinical trial of IMR-687 in SCD and site activation and enrollment delays and dela ys in review of our regulatory submissions with respect to our Phase 2b clinical trials of IMR-687 in SCD and β -thalassemia .

In addition, the COVID-19 pandemic may affect the operations of the U.S.

Food and Drug Administration , or FDA , and other heal th authorities, which could result in delays of regulatory actions related to our programs, including with respect to IMR-687.

Any negative impact that the COVID-19 pandemic has on recruiting or retaining patients in our clinical trials, the ability of our suppliers to provide materials for our product candidates, or the regulatory review process could cause additional delays which could materially and adversely affect our ability to obtain regulatory approval for and to commercialize our product candidates , increase our operating expenses, affect our ability to raise additional capital and have a material adverse effect on our financial results.

Food and Drug Administration , or FDA , and other health authorities, which could result in delays of regulatory actions related to our programs, including with respect to IMR-687.

Any negative impact that the COVID-19 pandemic has on recruiting or retaining patients in our clinical trials, the ability of our suppliers to provide materials for our product candidates, or the regulatory review process could cause additional delays which could materially and adversely affect our ability to obtain regulatory approval for and to commercialize our pro duct candidates, increase our operating expenses, affect our ability to raise additional capital and have a material adverse effect on our financial results.

In addition, if any of our clinical trial patients contract COVID-19, they may have adverse health outcomes that could impact the results of our clinical trials.

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Our future success is heavily dependent on our ability to successfully develop, obtain regulatory approval for and commercialize IMR-687.

IMR-687 is currently our only product candidate and we are testing it in a Phase 2a clinical trial and an OLE clinical trial in SCD and we recently initiated a Phase 2b clinical trial in SCD and a Phase 2b clinical trial in β-thalassemia.

IMR-687 is currently our only product candidate and we are testing it in Phase 2a, OLE and Phase 2b clinical trials in SCD and a Phase 2b clinical trial in β-thalassemia.

It may be a significant time before IMR-687 can advance into a pivotal trial, if at all.

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effectively competing with other therapies, including Oxbryta (voxelotor) and Adakveo (crizanlizumab) in SCD and ZYNTEGLO (INN autologous CD34+ cells encoding βA-T87Q-globin gene) (currently only approved in Europe and for which FDA approval is currently being sought), as well as REBLOZYL (luspatercept-aamt) for the treatment of ß-thalassemia;

obtaining and maintaining coverage, adequate pricing and adequate reimbursement from third-party payors, including government payors;

obtaining and maintain ing coverage, adequate pricing and adequate reimbursement from third-party payors, including government payors;

patients’ willingness to pay out-of-pocket for IMR-687 in the absence of coverage and/or adequate reimbursement from third-party payors;

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Significant preclinical study or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize any product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize any product candidates and may harm our business and results of operations.

Because we are developing IMR-687 using new endpoints and metho dologies, the FDA or other regulatory authorities may not consider the endpoints of our clinical trials to predict or provide clinically meaningful results.

Because we are developing IMR-687 using new endpoints and methodologies, the FDA or other regulatory authorities may not consider the endpoints of our clinical trials to predict or provide clinically meaningful results.

There are currently limited therapies approved to treat SCD.

To date, we have concentrated our product research and development efforts on developing a novel therapeutic for the treatment of SCD, and our future success depends on the success of this therapeutic approach.

To date, we have concentrated a significant portion of our product research and development efforts on developing a novel therapeutic for the treatment of SCD, and our future success depends on the success of this therapeutic approach.

The clinical trial requirements of the FDA and other comparable regulatory agencies and the criteria these regulators use to determine the safety and efficacy of any product candidate vary substantially according to the type, complexity, novelty and intended use and market of the potential product.

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Furthermore, the failure of any product candidate to demonstrate safety and efficacy in any clinical trial could negatively impact the perception of any other product candidates then under development and/or cause the FDA or other regulatory authorities to require additional testing before approving any other product candidates.

Interim top-line and preliminary results from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures, wh ich could result in material changes in the final data.

Interim top-line and preliminary results from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures, which could result in material changes in the final data.

From time to time, we may publish interim top-line or preliminary results from our clinical trials.

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As product candidates proceed through preclinical studies to late-stage clinical trials towards potential approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered along the way in an effort to optimize processes and results.

As an example, we expect to utilize an oral solution formulation of IMR-687 for clinical development in pediatric and adolescent populations with SCD that will differ from the oral tablet formulation of IMR-687 we have used in our clinical trials to date.

As an example, we expect to utilize an oral solution formulation of IMR-687 for clinical development in pediatric populations with SCD that will differ from the oral tablet formulation of IMR-687 we have used in our clinical trials to date.

Such changes carry the risk that they will not achieve these intended objectives.

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This could result in our own products being removed from the market or being less successful commercially.

If any product candidate receives marketing approval and we, or others, later disco ver that the drug is less effective than previously believed or causes undesirable side effects that were not previously identified, our ability to market the drug could be compromised.

If any product candidate receives marketing approval and we, or others, later discover that the drug is less effective than pr eviously believed or causes undesirable side effects that were not previously identified, our ability to market the drug could be compromised.

We conduct, and intend to conduct in the future, clinical trials of product candidates in carefully defined subsets of patients who have agreed to enter into clinical trials.

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If we do not successfully develop and eventually commercialize products, we will not obtain product revenue in future periods, resulting in significant harm to our financial position and adversely affecting our share price.

We are currently conducting a Phase 2a clinical trial and an OLE clinical trial of IMR-687 in patients with SCD and recently dosed the first patient in a Phase 2b clinical trial in this patient population.

We are currently conducting Phase 2a, OLE and Phase 2b clinical trials of IMR-687 in patients with SCD.

In addition, a key element of our business plan is to expand the breadth of indications for IMR-687 for the treatment of β-thalassemia and HFpEF.

We are currently conducting a Phase 2b clinical trial of IMR-687 in patients with β-thalassemia.

We are currently conducting a Phase 2b clinical trial of IMR-687 in patients with β-thalassemia and pre-clinical research in HFpEF.

A failure to establish IMR-687 as a viable treatment for β-thalassemia and/or HFpEF could harm our business prospects.

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Alternatively, we may allocate internal resources to a product candidate in a therapeutic area in which it would have been more advantageous to enter into a partnering arrangement.

Outside of the United States, we are conducting Phase 2 a and OLE clinical trial s of IMR-687 in patients with SCD at clinical sites in the United Kingdom and currently plan to conduct additional clinical trials for IMR-687 at other non-U.S.

sites, and the FDA may not accept data from trials conducted in such locations.

We are currently conducting Phase 2a and OLE clinical trials of IMR-687 in patients with SCD at clinical sites in the United Kingdom in addition to our clinical sites in the United States, and we plan to conduct additional clinical trials outside the United States.

W e are conducting clinical trial s of IMR-687 clinical trial sites , and the FDA may not accept data from trials conducted in such international locations.

In addition to our clinical sites in the United States, we are currently conducting clinical trials of IMR-687 at clinical sites outside of the United States.

For example, our Phase 2b clinical trials of IMR-687 in SCD and β-thalassemia are currently being conducted or expected to be conducted at clinical sites in Europe, Asia and Africa.

Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of these data is subject to conditions imposed by the FDA.

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To achieve commercial success for any product for which we have obtained marketing approval, we will need to establish a sales, marketing and distribution organization, either ourselves or through collaborations or other arrangements with third parties.

In the future, we expect that we would begin to build a sales and marketing infrastructure to market IMR-687 and any other product candidates we may develop in the United States and potentially in Europe, if and when approved by the applicable regulatory authority .

In the future, we expect that we would begin to build a sales and marketing infrastructure to market IMR-687 and any ot her product candidates we may develop in the United States and potentially in Europe, if and when approved by the applicable regulatory authority .

There are risks involved with establishing our own sales, marketing and distribution capabilities.

For example, recruiting and training a sales force is expensive and time-consuming and could delay any product launch.

If the commercial launch of a product candidate for which we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercializ ation expenses.

For exampl e, recruiting and training a sales force is expensive and time-consuming and could delay any product launch.

If the commercial launch of a product candidate for which we recruit a sales force and establish marketing capabilities is delayed or does not occu r for any reason, we would have prematurely or unnecessarily incurred these commercialization expenses.

These efforts may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel .

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In addition, with respect to SCD, we are aware of several product candidates in clinical development, including several product candidates for which FDA approval is currently being sought, which could be competitive with product candidates that we may successfully develop and commercialize.

EpiDestiny, Inc., or EpiDestiny (in collaboration with Novo Nordisk A/S, or Novo), Aruvant Sciences, Inc., Sangamo Therapeutics Inc., or Sangamo (in collaboration with Bioverativ Inc.), Cyclerion, Inc., Fulcrum Therapeutics, Inc., Agios Pharmaceuticals, Inc., Forma Therapeutics, Inc., Intellia Therapeutics, Inc.

(in collaboration with Novartis), Editas Medicine, Inc., CRISPR Therapeutics AG, or CRISPR (in collaboration with Vertex Pharmaceuticals Incorporated, or Vertex), Agios Pharmaceuticals, Inc., Forma Therapeutics, Inc.

and Syros Pharmaceuticals, Inc.

EpiDestiny, Inc., or EpiDestiny (in collaboration with Novo Nordisk A/S, or Novo), Aruvant Sciences, Inc., Sangamo Therapeutics Inc., or Sangamo (in collaboration with Bioverativ Inc.), Fulcrum Therapeutics, Inc., Agios Pharmaceuticals, Inc., Forma Therapeutics, Inc., Intellia Therapeutics, Inc.

(in collaboration with Novartis), Editas Medicine, Inc., CRISPR Therapeutics AG, or CRISPR (in collaboration with Vertex Pharmaceuticals Incorporated, or Vertex), and Syros Pharmaceuticals, Inc.

(in collaboration with GBT), among potentially other companies, are developing therapeutic approaches for patients with SCD.

Bellicum Pharmaceuticals, Inc., Kiadis Pharma N.V., EpiDestiny (in collaboration with Novo), Orchard Therapeutics plc, Sangamo (in collaboration with Sanofi.), CRISPR (in collaboration with Vertex) and Syros Pharmaceuticals, Inc.

and Syros Pharmaceuticals, Inc.

(in collaboration with GBT), among potentially other companies, are developing therapeutic approaches for patients with transfusion-dependent or non-transfusion- dependent β-thalassemia.

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop.

Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishi ng a strong market position before we are able to enter the market.

Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the mark et.

In addition, our ability to compete may be affected in many cases by insurers or other third-party payors seeking to encourage the use of generic products.

If any product candidates achiev e marketing approval, we expect that they would be priced at a significant premium over competitive generic products.

If any product candidates achieve marketing approval, we expect that they would be priced at a s ignificant premium over competitive generic products.

Many of the companies against which we are competing or against which we may compete in the future have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do.

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If these third parties do not successfully carry out their contractual duties, meet expected deadlines or manufacture any product candidates in accordance with regulatory requirements, if there are disagreements between us and such parties or if such parties are unable to expand capacities to

support commercialization of any product candidates for which we obtain marketing approval, we may not be able to fulfill, or may be delayed in pro ducing sufficient product candidates to meet, our supply requirements.

These facilities may also be affected by natural disasters, such as floods or fire, or geopolitical developments, or such facilities could face manufacturing issues, such as contaminati on or regulatory concerns following a regulatory inspection of such facility.

In such instances, we may need to locate an appropriate replacement third-party facility and establish a contractual relationship, which may not be readily available or on accept able terms, which would cause additional delay and increased expense, and may have a material adverse effect on our business .

support commercialization of any product candidates for which we obtain marketing approval, we may not be able to fulfill, or may be delayed in producing sufficient product candidates to meet, our suppl y requirements.

These facilities may also be affected by natural disasters, such as floods or fire, or geopolitical developments, or such facilities could face manufacturing issues, such as contamination or regulatory concerns following a regulatory inspec tion of such facility.

In such instances, we may need to locate an appropriate replacement third-party facility and establish a contractual relationship, which may not be readily available or on acceptable terms, which would cause additional delay and incr eased expense, and may have a material adverse effect on our business .

Our third-party manufacturers are subject to FDA inspection from time to time, including inspection and approval by the FDA before we can commence the manufacture and sale of any product candidates, and thereafter.

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If coverage and adequate reimbursement are not available, we may not be able to successfully commercialize any product candidate for which we obtain marketing approval.

There may be significant delays in obtaining coverage and reimbursement for newly approved drugs, and coverage may be more limited than the purposes for which the drug is approved by the FDA or similar regulat ory authorities outside of the United States.

Moreover, eligibility for coverage and reimbursement does not imply that a drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribut ion expenses.

M oreover, eligibility for coverage and reimbursement does not imply that a drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution expenses.

Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may not be made permanent.

Reimbursement rates may vary according to the use of the drug and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs and may be incorporated into existing payments for other services.

Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or p rivate payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States.

Further, no uniform policy for coverage and reimbursement exists in the United Stat es.

Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of l aws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States.

Further, no uniform policy for coverage and reimbursement exists in the United States.

Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies, but also have their own methods and process apart from Medicare determinations.

As a result, obtaining and maintaining cove rage and adequate reimbursement is often time-consuming and costly.

Our inability to promptly obtain coverage and adequate reimbursement rates from both government-funded and private payors for any approved products that we develop could have a material ad verse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.

As a result, obtaining and maintaining coverage and adequate reimbursement is often time-c onsuming and costly.

Our inability to promptly obtain coverage and adequate reimbursement rates from both government-funded and private payors for any approved products that we develop could have a material adverse effect on our operating results, our abil ity to raise capital needed to commercialize products and our overall financial condition.

Our future growth depends, in part, on our ability to penetrate foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties that, if they materialize, could harm our business.

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We rely, and expect to continue to rely, on third parties to conduct our clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, which may harm our business.

We currently rely on third-party clinical research organizations to conduct our ongoing Phase 2a clinical trial of IMR-687 in SCD and our recently initiated Phase 2b clinical trials in SCD and in β-thalassemia.

We currently rely on third-party clinical research organizations to conduct our ongoing Phase 2a clinical trial of IMR-687 in SCD and our Phase 2b clinical trials in SCD and in β-thalassemia.

We do not plan to independently conduct clinical trials of any other product candidates.

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We contract with a third - party for the manufacture of IMR-687, plan to contract with third parties for any other product candidates we may develop for preclinical and clinical testing and expect to continue to do so for commercialization.

This reliance on third parties entails risks, including that such third parties may not be able to comply with applicable regulatory requirements.

Any performance failure on the part of our existing or future manufacturers could delay c linical development or marketing approval.

This reliance on third parties entails risks, including that such third parties may not be able to comply with appl icable regulatory requirements.

Any performance failure on the part of our existing or future manufacturers could delay clinical development or marketing approval.

We rely on a third-party for the manufacture of IMR-687, and we expect to rely on third parties for the future manufacture of any other product candidates for preclinical and clinical testing.

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the priority of invention of patented technology.

In addition, license agreements are complex, and certain provisi ons in such agreements may be susceptible to multiple interpretations.

The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Moreover, if disputes over i ntellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected technology and product candida tes, which could have a material adverse effect on our business, financial conditions, results of operations and prospects.

In addition, license agreements are complex, and certain provisions in such agreements may be susceptible to multiple interpretations.

The resolution of any con tract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the relevant agreeme nt, either of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Moreover, if disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected technology and product candidates, which could have a material adverse effect on our business, financial conditions, results o f operations and prospects.

If we are unable to obtain, maintain, enforce and protect patent protection for our technology and product candidates or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully develop and commercialize our technology and product candidates may be adversely affected.

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Moreover, we or our licensor may be subject to a third-party preissuance submission of prior art to the United States Patent and Trademark Office, or USPTO, or become involved in opposition, derivation, revocation, reexamination, inter partes review, post-grant review or interference proceedings challenging our patent rights or the patent rights of others.

An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or product candidates and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize drugs without infringing third-party patent rights.

If the breadth or stren gth of protection provided by our patents and patent applications is threatened, regardless of the outcome, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.

An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allo w third parties to commercialize our technology or product candidates and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize drugs without infringing third-party patent rights.

If the breadth or stre ngth of protection provided by our patents and patent applications is threatened, regardless of the outcome, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.

Additionally, the coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance.

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If we do not obtain patent term extension in the United States under the Hatch-Waxman Act and in non-U.S.

countries under similar legislation, thereby potentially extending the term of our marketing exclusivity for any product candidates we may develop, ou r business may be materially harmed.

countries under similar le gislation, thereby potentially extending the term of our marketing exclusivity for any product candidates we may develop, our business may be materially harmed.

In the United States, the patent term of a patent that covers an FDA-approved drug may be eligible for limited patent term extension, which permits patent term restoration as compensation for the patent term lost during the FDA regulatory review process.

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In addition, the patent positions of companies in the development and commercialization of biologics and pharmaceuticals are particularly uncertain.

Supre me Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations.

This combination of events has created uncertainty with respect to the validity and enforceabil ity of patents once obtained.

Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations.

This combination of events has cr eated uncertainty with respect to the validity and enforceability of patents once obtained.

Depending on future actions by the U.S.

Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could have a material adverse effect on our patent rights and our ability to protect, defend and enforce our patent rights in the future.

Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways t hat could have a material adverse effect on our patent rights and our ability to protect, defend and enforce our patent rights in the future.

We and our licensor, and any future licensors, may become involved in lawsuits to protect or enforce our patent or other intellectual property rights, which could be expensive, time-consuming and unsuccessful.

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The legal threshold for initiating litigation or contested proceedings is low, so that even lawsuits or proceedings with a low probability of success might be initiated and require significant resources to defend.

Litigation and contested proceedings ca n also be expensive and time-consuming, and our adversaries in these proceedings may have the ability to dedicate substantially greater resources to prosecuting these legal actions than we can.

Litigation a nd contested proceedings can also be expensive and time-consuming, and our adversaries in these proceedings may have the ability to dedicate substantially greater resources to prosecuting these legal actions than we can.

The risks of being involved in such litigation and proceedings may increase if and as any product candidates near commercialization and as we gain the greater visibility associated with being a public company.

Third parties may assert infringement claims against us based on existing patents or patents that may be gra nted in the future, regardless of merit.

We may not be aware of all such intellectual property rights potentially relating to our technology and product candidates and their uses, or we may incorrectly conclude that third-party intellectual property is inv alid or that our activities and product candidates do not infringe such intellectual property.

Thus, we do not know with certainty that our technology and product candidates, or our development and commercialization thereof, do not and will not infringe, m isappropriate or otherwise violate any third - party’s intellectual property.

Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future, regardless of merit.

We may not be aware of all such intellectual property rights potentially relating to our technology and product candidates and their uses, or we may incorrectly conclude that third-party i ntellectual property is invalid or that our activities and product candidates do not infringe such intellectual property.

Thus, we do not know with certainty that our technology and product candidates, or our development and commercialization thereof, do n ot and will not infringe, misappropriate or otherwise violate any third - party’s intellectual property.

Third parties may assert that we are employing their proprietary technology without authorization.

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Uncertainties resulting from the initiation and continuation of intellectual property litigation or other proceedings could compromise our ability to compete in the marketplace.

Obtaining and maintaining patent prote ction depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Periodic maintenance, renewal and annuity fees and various other government fees on any issued patent and pending patent application must be paid to the USPTO and non-U.S.

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Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.

We may be subject to claims by third parties asserting that our employees, consultants or contractors have wrongfully used or disclosed confidential information of third parties, or we have wrongf ully used or disclosed alleged trade secrets of their current or former employers or claims asserting we have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property.

We may be subject to claims by third parties asserting that our employees, consultants or contractors have wrongfully used or disclosed confidential information of third parties, or we have wrongfully used or disclosed alleged trade secrets of their curren t or former employers or claims asserting we have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property.

Certain of our employees, consultants and contractors were previously employed at universities or other pharmaceutical or biotechnology companies, including our competitors or potential competitors.

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If any of any product candidates receives marketing approval, the accompanying label may limit the approved use of our drug, which could limit sales of the product.

The process of obtaining marketing approvals, both in the United States and abroad, is expensive, may take many years, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates i nvolved.

Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application may cause delays in the approval or rej ection of an application.

Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data is insufficient for approval and require additional preclinical, clinical or other stu dies.

Regulatory authorities have substantial discretion in the approval process and may refuse to ac cept any application or may decide that our data is insufficient for approval and require additional preclinical, clinical or other studies.

In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or prevent marketing approval of a product candidate.

Any marketing approval we ultimately obtain may be limited or subject to restrict ions or post-approval commitments that render the approved product not commercially viable.

Any marketing approval we ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the approved product not commercially viable.

If we experience delays in obtaining approval or if we fail to obtain approval of IMR-687 and any other product candidates we may develop, the commercial prospects for any product candidates may be harmed and our ability to generate revenues will be materially impaired.

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We received orphan drug designation for IMR-687 for SCD and β-thalassemia in the United States in February 2017 and June 2020, respectively.

We also received orphan drug designation for IMR-687 for SCD in the European Union in August 2020.

We may seek orphan drug designation in other indications or for any other future product candidates.

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Even if we do receive accelerated approval, we may not experience a faster development or regulatory review or approval process and receiving accelerated approval does not provide assurance of ultimate FDA approval.

Failure to obtain marketing approval in foreign jurisdictions would pre vent any product candidates from being marketed abroad.

Failure to obtain marketing approval in foreign jurisdictions would prevent any product candidates from being marketed abroad.

In order to market and sell our products in the European Union and many other foreign jurisdictions, we or our potential third-party collaborators must obtain separate marketing approvals and comply with numerous and varying regulatory requirements.

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Violations of the Federal Food, Drug and Cosmetic Act, or FDCA, and other statutes relating to the promotion and advertising of prescription drugs may lead to investigations and enforcement actions alleging violations of federal and state healthcare fraud and abuse laws, including the False Claims Act, as well as state consumer protection laws.

In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may have various consequences, including:

In addit ion, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may have various consequences, including:

suspension of or restrictions on such products, manufacturers or manufacturing processes;

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If these executive actions impose constraints on FDA’s ability to engage in oversight and implementation activities in the normal course, our business may be negatively impacted.

Our current and future operations are subject to applicable anti-kickback, fraud and abuse, false claims, transparency, health info rmation privacy and security, and other healthcare laws and regulations.

Our current and future operations are subject to applicable anti-kickback, fraud and abuse, false claims, transparency, health inform ation privacy and security, and other healthcare laws and regulations.

If we are unable to comply, or do not fully comply, with such laws and regulations, we could face substantial penalties.

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State and foreign laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs.

It is possible that governmental authori ties will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations.

If our operations, including anticipated activities that w ould be conducted by our sales team, are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, disgorgement, fines, imprisonment, exclusion of products from government funded healthcare programs, such as Medicare and Medicaid, additional reporting requirements and/or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allega tions of non-compliance with these laws and the curtailment or restructuring of our operations.

Efforts to ensure that o ur business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs.

It is possible that governmental authorities will conclude that our business practices may not comply with current or fu ture statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations.

If our operations, including anticipated activities that would be conducted by our sales team, are found to be in violation of any of thes e laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, disgorgement, fines, imprisonment, exclusion of products from government funded healthcare programs, such as Medicare and Medicaid, additional reporting requirements and/or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws and the curtailment or restructuring of our operations.

In addition, we may also experience reputational harm, diminished profits and future earnings.

If any of the physicians or other healthcare providers or entitie s with whom we expect to do business is found to be not in compliance with applicable laws, they may be subject to significant criminal, civil or administrative sanctions, including exclusions from participation in government funded healthcare programs.

If any of the physicians or other healthcare providers or entities with whom we expect to do business is found to be not in compliance with appli cable laws, they may be subject to significant criminal, civil or administrative sanctions, including exclusions from participation in government funded healthcare programs.

Compliance with global privacy and data security requirements could result in additional costs and liabilities to us or inhibit our ability to collect and process data globally, and the failure to comply with such requirements could subject us to significant lawsuits or fines and penalties, which may have a material adverse effect on our business, financial condition or results of operations.

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Even if we are not determined to have violated these laws, investigations into these issues typically require the expenditure of significant resources and generate negative publicity, which could harm our reputation and our business.

Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize any product candidates and affect the prices we may obt ain for any products that are approved in the United States or foreign jurisdictions.

Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketin g approval of and commercialize any product candidates and affect the prices we may obtain for any products that are approved in the United States or foreign jurisdictions.

In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of any product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell any product candidates for which we obtain marketing approval.

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District Court judge in the Northern District of Texas ruled that the individual mandate portion of the ACA is an essential and inseverable feature of the ACA, and therefore because the mandate was repealed as part of the TCJA , the remaining provisions of the ACA are invalid as well.

The Trump administration and CMS have both stated that the ruling will have no immediate effect, and on December 30, 2018 the same judge issued an order staying the judgment pendin g appeal.

The Trump administration and CMS have both stated that the ruling will have no immediate effect, and on December 30, 2018 the same judge issued an order sta ying the judgment pending appeal.

The Trump a dministration represented to the Court of Appeals considering this judgment that it does not oppose the lower court’s ruling.

On July 10, 2019, the Court of Appeals for the Fifth Circuit heard oral argument in this case.

On December 18 , 2019, that court affirmed the lower court’s ruling that the individual mandate portion of the ACA is unconstitutional and it remanded the case to the district court for reconsideration of the severability question and additional analysis of the provision s of the ACA.

On December 18, 2019, that court affirmed the lower court’s ruling that the individual mandate portion of the ACA is unconstitutional and it remanded the case to the district court for reconsideration of the severability question and additional analysis of the provisions of the ACA.

On January 21, 2020, the U.S .

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Supreme Court did agree to hear this case .

On June 25, 2020, the Trump Administration and a coalition of 1 8 states asked the court to strike down the entirety of the ACA.

On June 25, 2020, the Trump Administra tion and a coalition of 18 states asked the court to strike down the entirety of the ACA.

Litigation and legislation over the ACA are likely to continue, with unpredictable and uncertain results .

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The second order would establish an international pricing index that would set the price Medicare Part B pays for the costliest medications covered under the program to the lowest price in other economically advanced countries.

The President has indicated that this order will be held until August 24, 2020, because the administration may not implement it.

The third order is intended to reduce the costs of drugs by supporting the safe importation of prescription drugs.

Specifically, the order calls upon the Department of Health and Human Services, or HHS, to facilitate grants to individuals of waivers of the prohibition of importation of prescript ion drugs that would allow patients to import FDA approved drug products from abroad, so long as doing so would result in lower costs.

In addition, the order would allow wholesalers and pharmacies to re-import both biological drugs and insulin that were or iginally manufactured in the United States and then exported for international sale.

This action follows the publication of a proposed rulemaking on December 23, 2020 , if finalized, would allow states or certain other non-federal government entities to su bmit importation program proposals to the FDA for review and approval.

Applicants would be required to demonstrate that their importation plans pose no additional risk to public health and safety and will result in significant cost savings for consumers.

A t the same time, the FDA issued draft guidance that would allow manufacturers to import their own FDA-approved drugs that are authorized for sale in other countries (multi-market approved products) .

Specifically, the order calls u pon the Department of Health and Human Services, or HHS, to facilitate grants to individuals of waivers of the prohibition of importation of prescription drugs that would allow patients to import FDA approved drug products from abroad, so long as doing so would result in lower costs.

In addition, the order would allow wholesalers and pharmacies to re-import both biological drugs and insulin that were originally manufactured in the United States and then exported for international sale.

This action follows the publication of a proposed rulemaking on December 23, 2020 , that if finalized, would allow states or certain other non-federal government entities to submit importation program proposals to the FDA for review and approval.

Applicants would be required t o demonstrate that their importation plans pose no additional risk to public health and safety and will result in significant cost savings for consumers.

At the same time, the FDA issued draft guidance that would allow manufacturers to import their own FDA -approved drugs that are authorized for sale in other countries (multi-market approved products) .

Finally, the fourth order would end drug rebates used by health plan sponsors, pharmacies or pharmacy benefit managers, or PBMs, in operating the Medicare Part D program.

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Each of these orders directs the federal government to implement the initiatives outlined in the orders, meaning they will not have immediate effects.

Following issuance of these orders, President Trump issued a fifth executive order which instructs the federal government to develop a list of “essential” medicines and then buy them and other medical supplies from U.S.

manufacturers instead of from companies around the world, including especially China.

The order is meant reduce regulatory barriers to domestic pharmaceutical manufacturing and catalyze manufacturing technologies needed to keep drug prices low and the production of drug products in the United States.

At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

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We also could incur significant costs associated with civil or criminal fines and penalties or become subject to injunctions limiting or prohibiting our activities for failure to comply with such laws and regulations.

Although we maintain general liability insurance as well as w orkers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities.

We do not maintai n insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological, hazardous or radioactive materials.

Although we maintain general liability insurance as well as workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our emplo yees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities.

We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological, hazardous or radioactive materials.

In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations.

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actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;

variations in our fi nancial results or the financial results of companies that are perceived to be similar to us;

variations in our financial results or the financi al results of companies that are perceived to be similar to us;

sales of common stock by us, our executive officers, directors or principal stockholders, or others;

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Our executive officers, directors and principal stockholders, if they choose to act together, have the ability to control all matters submitted to stockholders for approval.

As of July 31, 2020, our executive officers and directors and our stockholders who owned more than 5% of our outstanding common stock, in the aggregate, beneficially owned shares representing approximately 90.5% of our common stock.

As of October 30, 2020, our executive officers and directors and our stockholders who owned more than 5% of our outstanding common stock, in the aggregate, beneficially owned shares representing approximately 90.5% of our common stock.

As a result, if these stockholders were to choose to act together, they would be able to control all matters submitted to our stockholders for approval, as well as our management and affairs.

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As a result, capital appreciation, if any, of our common stock will be the sole source of gain for our stockholders for the foreseeable future.

A significant portion of our total outstanding shares are eligible to be sold into the market in the near future, which could cause the market price of our common stock to drop significantly, even if our business is doing well.

Sales of a substantial number of shares of our common stock in the public market c ould cause our stock price to fall , even if our business is doing well.

Sales of a substantial number of shares of our common stock in the public market, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock, impair our ability to raise capital through the sale of additional equity securities, and make it more difficult for our stockholders to sell their common stock at a time and price that they deem appropriate.

As of July 31, 2020, we had 17,324,736 shares of common stock outstanding, which include the 5,405,000 shares of common stock that we sold in our IPO that became freely tradeable in the public market without restriction immediately following the applicable offering, unless purchased by our affiliates.

The remaining 11,875,465 shares of our common stock are currently restricted as a result of securities laws or lock-up agreements, but will become eligible to be sold at various times in the near future.

The representatives of the underwriters for our IPO may release some or all of the shares of common stock subject to lock-up agreements at any time and without notice, which would allow for earlier sales of shares in the public market.

Moreover, beginning September 7, 2020, holders of an aggregate of 11,093,726 shares of our common stock will have rights, subject to specified conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.

We have also registered all 3,505,468 shares of common stock that we may issue under our equity compensation plans and such shares can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates, vesting arrangements and exercise of options, and the lock-up agreements entered into in connection with our IPO.

Persons who were our stockholders prior to our IPO continue to hold a substantial number of shares of our common stock.

If such persons sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline.

Moreover, holders of an aggregate of 11,093,726 shares of our common stock have rights, subject to specified conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.

We are an “emerging growth company” and a “smaller reporting company,” and the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors.

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We have elected to take advantage of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (1) irrevocably elect to “opt out” of such extended transition period or (2) no longer qualify as an EGC.

We are also a smaller reporting company, and we will remain a smaller reporting company until the fiscal year following the determination that either (i) our voting and non-voting common shares held by non-affiliates is more than $250 million measured on the last business day of our second fiscal quarter, or (ii) our annual revenues are less than $100 million during the most recently completed fiscal year and our voting and non-voting common shares held by non-affiliates is more than $700 million measured on t he last business day of our second fiscal quarter.

Similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations, such as an exemption from providing selected financial data and an ability to provide simplified execu tive compensation information and only two years of audited financial statements .

We are also a smaller reporting company, and we will remain a smaller reporting company until the fiscal year following the determination that either (i) our voting and non-voting common shares held by non-affiliates is more than $250 million measured on the last business day of our second fiscal quarter, or (ii) our annual revenues are less than $100 million during the most recently completed fiscal year and our voting and non-voti ng common shares held by non-affiliates is more than $700 million measured on the last business day of our second fiscal quarter.

Similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations, such as an exemption fr om providing selected financial data and an ability to provide simplified executive compensation information and only two years of audited financial statements .

We have incurred and will continue to incur increased costs as a result of operating as a public company, and our management has devoted and will continued to be required to devote substantial time to new compliance initiatives and corporate governance practices.

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The Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the Nasdaq Global Select Market and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.

Our management devotea a substantial amount of time to these compliance initiatives.

Our management devote a substantial amount of time to these compliance initiatives.

Moreover, these rules and regulations will increase our legal and financial compliance costs, particularly as we hire additional financial and accounting employees to meet public company internal control and financial reporting requirements, and will make some activities more time-consuming and costly.

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Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock.

We are required to disclose changes made in our internal controls and procedures on a quarterly basis and ou r management is required to assess the effectiveness of these controls annually.

However, for as long as we are an “emerging growth company” under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effecti veness of our internal controls over financial reporting pursuant to Section 404.

We are required to disclose changes made in our internal controls and procedures on a quarterly basis and our management is r equired to assess the effectiveness of these controls annually.

However, for as long as we are an “emerging growth company” under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our int ernal controls over financial reporting pursuant to Section 404.

We could be an “emerging growth company” for up to five years.

An independent assessment of the effectiveness of our internal controls over financial reporting could detect p roblems that our management’s assessment might not.

An independent assessment of the effectiveness of our internal controls over financial reporting could detect problems that our management’s assessment might not.

Undetected material weaknesses in our internal controls over financial reporting could lead to financial statement restatements and require us to incur the expense of remediation.

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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 1A. Risk Factors