What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-08-06 compared with 2021-05-11 · 86 added, 62 removed, 210 unchanged (41% of the section changed)

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Business Overview

We are a clinical-stage biopharmaceutical company dedicated to developing and commercializing novel therapeutics to treat patients suffering from rare inherited genetic disorders of hemoglobin, known as hemoglobinopathies.

Our pipeline is built on the differentiated therapeutic potential of our initial product candidate, IMR-687, which is an oral, once-a-day, potentially disease-modifying treatment for sickle cell disease, or SCD, and ß-thalassemia.

Our pipeline is built on the differentiated therapeutic potential of our initial product candidate, IMR-687 ( t ovinontrine), which is an oral, once-a-day, potentially disease-modifying treatment for sickle cell disease, or SCD, and ß-thalassemia.

IMR-687 is a highly selective, potent small molecule inhibitor of phosphodiesterase-9, or PDE9, that has a multimodal mechanism of action that acts primarily on red blood cells, and has the potential to act on white blood cells, adhesion mediators and other cell types that are implicated in these disorders.

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The Ardent trial is a Phase 2b clinical trial of IMR-687 in approximately 99 adult patients with SCD and the Forte trial is a Phase 2b clinical trial in approximately 60 transfusion dependent patients and 60 non-transfusion dependent patients with ß-thalassemia.

In the first quarter of 2021, separate independent data monitoring committees for the Ardent and Forte Phase 2b clinical trials recommended opening of the higher dose IMR-687 treatment arm in each of these clinical trials following review of available safety and tolerability data.

These additional arms were pre-specified in the two protocols and enrollment is proceeding in each clinical trial at the IMR-687 higher dose (once daily dose of 300 mg or 400 mg based on patient weight), IMR-687 lower dose (once daily dose of 200 mg or 300 mg based on patient weight) or placebo.

We remain on track to complete the respective protocol-driven interim analyses for the Ardent and Forte Phase 2b clinical trials and to report interim data from each of these trials in the second half of 2021.

In addition, we expect to report data from the primary analysis from each of these trials in the first half of 2022 and data from the final analysis from each of these trials in the second half of 2022.

We are also conducting an open label extension, or OLE, clinical trial of IMR-687 in SCD, which allows patients from our completed Phase 2a clinical trial in SCD to continue into a long-term four-year trial to test safety and measure tolerability of IMR-687.

Similar to the Ardent and Forte Phase 2b clinical trials, in the first quarter of 2021, a safety review committee reviewed the available safety and tolerability data from patients in the OLE clinical trial and following this review recommended increasing the daily dose from 200mg to either 300 mg or 400 mg, based on patient weight.

We expect that patients will begin dose escalation to the higher dose under an amended protocol in mid-2021.

We expect to report additional data on the 200 mg daily dose from the OLE clinical trial at the European Hematology Association 2021 Virtual Congress in June 2021.

In addition, in the first half of 2021 we expect to initiate a single ascending dose, or SAD, followed by a multiple dose clinical trial of IMR-687 to further explore the safety, tolerability, and pharmacokinetics, or PK, of higher doses of IMR-687.

This short duration clinical trial in healthy volunteers under fed conditions will sequentially assess doses of IMR-687 up to 800 mg per day administered once daily or twice daily.

Based on the safety, tolerability and PK profile observed in the SAD portion of the trial, the multi-dose portion of the trial will evaluate multiple doses of IMR-687 over seven days at the maximum tolerated dose observed for the once daily and/or twice daily administrations from the SAD portion of the trial.

In part due to the ongoing exploration of higher adult doses of IMR-687, as well as expected data readouts from higher dose IMR-687 administration from the Ardent, Forte and OLE clinical trials in the second half of 2021, we currently anticipate initiating our pediatric clinical program of IMR-687 in SCD in 2022.

Lastly, we recently completed preclinical research of IMR-687 in heart failure with preserved ejection fraction, or HFpEF, and are formulating a clinical development plan for IMR-687 in this indication.

We have completed enrollment in the Ardent clinical trial as well as in the transfusion dependent cohort from the Forte clinical trial.

For the Ardent clinical trial, we expect to report interim data in the fourth quarter of 2021, data from the primary analysis in the first quarter of 2022 and data from the final analysis in the second half of 2022.

For the Forte clinical trial, we expect to report interim data for transfusion dependent cohort in the fourth quarter of 2021, data from an additional efficacy analysis of the entire transfusion dependent patient cohort in the first quarter of 2022 and data from the final analysis in the second half of 2022.

At the 2021 European Hematology Association, or EHA, Annual Congress in June 2021, we reported final data from all 93 patients in our completed Phase 2a clinical trial in SCD, including analyses that compared patients who received IMR-687 as part of the trial with those who received placebo.

The data from the Phase 2a clinical trial demonstrated that IMR-687 was well tolerated as a monotherapy and in combination with HU at all dose levels.

The pooled results further showed that when compared to placebo, patients on IMR-687 had:

• a 40% lower mean annualized rate of vaso-occlusive crises, or VOCs, as part of the safety analysis;

• a 38% lower mean annualized rate of VOC-related hospitalizations;

• an increase in time to first VOC of 169 days for patients treated with IMR-687 versus 87 days for placebo groups;

• improvements in the patient-reported VOC pain severity score.

Changes in SCD-related biomarkers were variable across the trial, including small but directional increases in f etal hemoglobin, or HbF .

At the 2021 EHA Annual Congress in June 2021, we also reported additional preliminary data from patients with evaluable data on the open label extension, or OLE, clinical trial in patients with SCD.

The OLE clinical trial allows patients from our completed Phase 2a clinical trial in SCD to continue into a long-term four-year trial to test safety and measure tolerability of IMR-687.

The data from the OLE clinical trial demonstrated that IMR-687 was well tolerated as a monotherapy and in combination with HU.

The results further showed that the improvement in the rate of VOCs observed in the Phase 2a clinical trial were maintained through eight months of treatment on the OLE clinical trial (n=18).

The data also demonstrated improvements in HbF and F-cells, with 36% (4/11) of patients having an absolute increase in HbF of greater than or equal to 3% after eight months of treatment on the OLE clinical trial (mean absolute increase of 1.7%) and 47% (7/15) having an absolute increase in F-cells of greater than or equal to 6% after eight months of treatment on the OLE clinical trial (mean absolute increase of 6.8%).

Changes in other SCD-related biomarkers were variable across the trial.

Lastly, we recently completed preclinical research of IMR-687 in heart failure with preserved ejection fraction, or HFpEF, and are developing a protocol for a Phase 2 proof-of-concept study for IMR-687 in this indication and expect to interact with the United States Food and Drug Administration in late 2021 .

We continue to evaluate the impact of the COVID-19 pandemic on each of our clinical trials, as discussed below, and therefore, our estimated timelines for our clinical trials could be delayed.

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Since our inception in 2016, our operations have focused on organizing and staffing our company, business planning, raising capital, establishing our intellectual property portfolio and performing research and development of IMR-687.

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

To date, we have funded our operations primarily through the sale of common stock and the sale of convertible preferred stock.

In February 2020 we effected a 1-for-6.299 reverse stock split of our common stock.

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The Shelf was declared effective on April 8, 2021.

We also simultaneously entered into a sales agreement with Cantor Fitzgerald & Co, LLC, as sales agent, providing for the offering, issuance and sale by us of up to an aggregate $75.0 million of our common stock from time to time in “at-the-market” offerings under the Shelf.

We also simultaneously entered into a sales agreement, or Sales Agreement, with Cantor Fitzgerald & Co, LLC, or Cantor, as sales agent, providing for the offering, issuance and sale by us of up to an aggregate $75.0 million of our common stock from time to time in “at-the-market” offerings under the Shelf.

As of June 30, 2021, we have issued and sold 231,291 shares of common stock under the Sales Agreement , resulting in net proceeds of $1.3 million after deducting commissions and offering expenses.

On July 16, 2021, we completed a public offering of shares of our common stock and issued and sold 8,333,333 shares of common stock at a public offering price of $6.00 per share, resulting in net proceeds of $46.8 million after deducting underwriting discounts and commissions and estimated offering expenses.

We have incurred significant operating losses since inception.

Our losses from operations were $10.3 million and $7.4 million for the three months ended March 31, 2021 and 2020, respectively.

As of March 31, 2021, we had an accumulated deficit of approximately $106.4 million.

Our losses from operations were $13.1 million and $23.4 million for the three and six months ended June 30, 2021, respectively, and $10.3 million and $17.7 million for the three and six months ended June 30, 2020, respectively.

As of June 30, 2021, we had an accumulated deficit of approximately $119.5 million.

We expect to continue to incur significant operating losses for the foreseeable future, as we advance IMR-687 and any product candidates we may develop in the future from discovery through preclinical development and clinical trials and seek regulatory approval of our product candidates.

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If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

As of March 31, 2021 and December 31, 2020, we had $75.6 million and $88.2 million, respectively, in cash, cash equivalents and investments.

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.

As of June 30, 2021 we had $ 66.8 million in cash, cash equivalents and investments.

We believe that our cash, cash equivalents and investments as of June 30, 2021, as well as the $4 6 .

8 million in net proceeds from our public offering of shares of common stock in July 2021 , will enable us to fund our operating expenses and capital expenditure requirements through the end of 2022 .

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

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We continue to actively monitor the impact of the COVID-19 pandemic on our financial condition, liquidity, operations, suppliers, industry and workforce.

Although we have not experienced any significant adverse impact from the COVID-19 pandemic on our financial condition, results of operations or liquidity as of the date of this Quarterly Report on Form 10-Q , the COVID-19 pandemic has resulted in disruptions to our clinical trial operations, including some missed and incomplete patient visits in our recently completed Phase 2a clinical trial of IMR-687 in SCD , delays to some patient visits in our OLE clinical trial in SCD, as well as site activation and enrollment delays and delays in review of our regulatory submissions with respect to our Ardent and Forte clinical trials of IMR-687 in SCD and ß-thalassemia.

In addition, most of our employees are currently working remotely, and we are temporarily restricting travel and attendance at industry events by our employees.

Although we have not experienced any significant adverse impact from the COVID-19 pandemic on our financial condition, results of operations or liquidity as of the date of this Quarterly Report on Form 10-Q, the COVID-19 pandemic has resulted in disruptions to our clinical trial operations, including some missed and incomplete patient visits in our completed Phase 2a clinical trial of IMR-687 in SCD, delays to some patient visits in our OLE clinical trial in SCD, as well as site activation and enrollment delays and delays in review of our regulatory submissions with respect to our Ardent and Forte clinical trials of IMR-687 in SCD and ß-thalassemia.

In addition, many of our employees are currently working remotely.

Our financial condition, results of operations and liquidity could be negatively impacted by the COVID-19 pandemic in future periods.

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Additionally, future commercial and regulatory factors beyond our control will impact our clinical development program and plans.

The following table summarizes our research and development expenses for the three months ended March 31, 2021 and 2020:

The following table summarizes our research and development expenses for the three and six months ended June 30, 2021 and 2020:

Three Months Ended

Six Months Ended

(in thousands)

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These increases will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, among other expenses.

We also anticipate increased expenses associated with being a public company, including costs for audit, legal, regulatory, and tax-related services related to compliance with the rules and regulations of the Securities and Exchange Commission, or SEC, listing standards applicable to companies listed on a national securities exchange, director and officer insurance premiums and investor relations costs.

In addition, if we obtain regulatory approval for IMR-687 or any future product candidate and to the extent that we engage in commercialization activities on our own, we expect to incur significant expenses related to building a sales and marketing team to support product sales, marketing and distribution activities.

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Results of Operations

Comparison of the Three Months Ended March 31, 2021 and 2020

The following table summarizes our results of operations for the three months ended March 31, 2021 and 2020:

Comparison of the Three Months Ended June 30, 2021 and 2020

The following table summarizes our results of operations for the three months ended June 30, 2021 and 2020:

Three Months Ended

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Research and Development Expenses

Research and development expenses increased by approximately $1.3 million from $5.8 million for the three months ended March 31, 2020 to $7.1 million for the three months ended March 31, 2021.

Research and development expenses increased by approximately $2.2 million from $7.9 million for the three months ended June 30, 2020, to $10.1 million for the three months ended June 30, 2021.

The increase in research and development expenses was primarily attributable to the following:

a $0.9 million increase in personnel-related costs, including a $0.2 million increase in stock-based compensation expense, primarily due to an increase in headcount to support the growth of our research and development efforts;

a $2.2 million increase in costs related to the development and manufacturing of clinical materials, clinical research and oversight of our clinical trials and investigative fees for IMR-687;

a $0.1 million increase in other research and development operational costs, including facilities, professional services, supplies, and travel;

a $0.1 million decrease in personnel-related costs.

General and Administrative Expenses

General and administrative expenses increased by approximately $1.6 million from $1.6 million for the three months ended March 31, 2020 to $3.2 million for the three months ended March 31, 2021.

General and administrative expenses increased by approximately $0.7 million from $2.4 million for the three months ended June 30, 2020, to $3.1 million for the three months ended June 30, 2021.

The increase in general and administrative expenses was primarily attributable to the following:

a $0.7 million increase in personnel costs, including a $0.4 million increase in stock-based compensation expense, primarily due to an increase headcount;

a $0.3 million increase in personnel-related costs, including a $0.2 million increase in stock-based compensation expense, primarily due to an increase headcount;

a $0.2 million increase in cost associated with directors and officers insurance premiums;

a $0.2 million increase in other general and administrative operational costs, including facilities, rent and franchise tax;

a $0.1 million increase in other general and administrative operational costs, including facilities and professional services.

Total Other Income, Net

Total other income, net was de minimis for the three months ended June 30, 2021 and $0.1 million for the three months ended June 30, 2020, in each case consisting primarily of interest earned on our cash, cash equivalents and investments.

Comparison of the Six Months Ended June 30, 2021 and 2020

The following table summarizes our results of operations for the six months ended June 30, 2021 and 2020:

Six Months Ended

(in thousands)

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Total other income, net

Research and Development Expenses

Research and development expenses increased by approximately $3.5 million from $13.7 million for the six months ended June 30, 2020 to $17.2 million for the six months ended June 30, 2021.

The increase in research and development expenses was primarily attributable to the following:

a $2.6 million increase in costs related to the development and manufacturing of clinical materials, clinical research and oversight of our clinical trials and investigative fees for IMR-687;

a $0.8 million increase in personnel-related costs, including a $0.4 million increase in stock-based compensation expense, primarily due to an increase in headcount to support the growth of our research and development efforts;

a $0.1 million increase in other research and development operational costs, including facilities, professional services, supplies, and travel.

General and Administrative Expenses

General and administrative expenses increased by approximately $2.3 million from $4.0 million for the six months ended June 30, 2020 to $6.3 million for the six months ended June 30, 2021.

The increase in general and administrative expenses was primarily attributable the following:

a $1.0 million increase in personnel-related costs, including a $0.6 million increase in stock-based compensation expense, primarily due to an increase headcount;

a $0.8 increase in cost associated with directors and officers insurance premiums;

a $0.4 million increase in other general and administrative operational costs, including facilities, public relations, and corporate taxes;

a $0.1 million increase in consulting and professional fees, including legal, business development, accounting and audit fees.

Total Other Income, Net

Total other income, net was approximately $0.1 million in each of the three months ended March 31, 2021 and 2020, consisting primarily of interest earned on our cash, cash equivalents and investments.

Total other income, net was de minimis for the six months ended June 30, 2021 and $0.2 million for the six months ended June 30, 2020, in each case consisting primarily of interest earned on our cash, cash equivalents and investments.

Liquidity and Capital Resources

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We have not yet commercialized IMR-687, which is in clinical development, and we do not expect to generate revenue from sales of IMR-687 or any product candidates we may develop in the future for several years, if at all.

Through March 31, 2021, we have funded our operations primarily through the issuance of common stock in our IPO and convertible preferred stock.

In February 2020, we raised $17.1 million in gross proceeds from the sale of 1,562,994 shares of Series B Preferred Stock upon a waiver of specified milestone conditions from the holders of a majority of the shares then held by the holders of Series B Preferred Stock.

Through June 30, 2021, we have funded our operations primarily through the issuance of common stock and convertible preferred stock.

In February 2020, we raised $17.1 million in gross proceeds from the sale of 1,562,994 shares of Series B p referred s tock upon a waiver of specified milestone conditions from the holders of a majority of the shares then held by the holders of Series B p referred s tock.

In March 2020, we completed an IPO of our common stock and issued and sold 4,700,000 shares of common stock at a public offering price of $16.00 per share, resulting in gross proceeds of $75.2 million.

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On April 1, 2021, we filed the Shelf with the SEC in relation to the registration and potential future issuance of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof in the aggregate amount of up to $200.0 million.

The Shelf was declared effective on April 8, 2021.We also simultaneously entered into a sales agreement with Cantor Fitzgerald & Co, LLC, as sales agent, providing for the offering, issuance and sale by us of up to an aggregate $75.0 million of our common stock from time to time in “at-the-market” offerings under the Shelf.

As of March 31, 2021, we had $75.6 million in cash, cash equivalents and investments.

The Shelf was declared effective on April 8, 2021.We also simultaneously entered into the Sales Agreement with Cantor, as sales agent, providing for the offering, issuance and sale by us of up to an aggregate $75.0 million of our common stock from time to time in “at-the-market” offerings under the Shelf.

As of June 30, 2021, we have issued and sold 231,291 shares of common stock under the Sales Agreement, resulting in net proceeds of $1.3 million after deducting commissions and offering expenses.

As of June 30, 2021, we had $66.8 million in cash, cash equivalents and investments.

While we do not currently expect that the COVID-19 pandemic will have a material adverse impact on our short-term or long-term liquidity, the impact of the COVID-19 pandemic on the global financial markets may reduce our ability to access capital, which could negatively impact our short-term and long-term liquidity.

See “Impact of COVID-19 Pandemic.”

The following table provides information regarding our cash flows for the three months ended March 31, 2021 and 2020:

Three Months Ended

The following table provides information regarding our cash flows for the six months ended June 30, 2021 and 2020:

Six Months Ended

(in thousands)

Net cash used in operating activities

Net cash provided by investing activities

Net cash provided by (used in) investing activities

Net cash provided by financing activities

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Net Cash Used in Operating Activities

Net cash used in operating activities for the three months ended March 31, 2021 was $13.0 million, primarily due to our net loss of $10.3 million and net cash outflow from the change in working capital of $3.8 million, partially offset by stock-based compensation expense of $0.9 million and amortization of $0.1 million on our short-term investments.

Net cash used in operating activities for the three months ended March 31, 2020 was $9.5 million, primarily due to our net loss of $7.2 million and net cash outflow from the change in working capital of $2.7 million, partially offset by stock-based compensation expense of $0.4 million.

Net cash used in operating activities for the six months ended June 30, 2021 was $23.4 million primarily due to our net loss of $23.4 million and net cash outflow from a change in working capital of $2.0 million, partially offset by stock-based compensation expense of $1.9 million and depreciation expense of $0.1 million.

Net cash used in operating activities for the six months ended June 30, 2020 was $18.8 million primarily due to our net loss of $17.4 million and net cash outflow from a change in working capital of $2.3 million, partially offset by stock-based compensation expense of $0.9 million.

Net Cash Provided by Investing Activities

Net cash provided by investing activities for the three months ended March 31, 2021 was $18.3 million due to proceeds from sales and maturities of short-term investments of $22.0 million, partially offset by purchases of marketable securities of $3.7 million.

Net cash provided by investing activities for the three months ended March 31, 2020 was $4.8 million due to proceeds from sales and maturities of short-term investments.

Net cash provided by investing activities for the six months ended June 30, 2021 was $21.7 million due to proceeds from maturities of short-term investments of $29.2 million, partially offset by purchases of short-term investments of $7.5 million.

Net cash used in investing activities for the six months ended June 30, 2020 was $27.7 million due to purchases of marketable securities of $41.8 million, partially offset by proceeds from sales and maturities of short-term investments of $14.2 million and purchases of equipment.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the nine months ended March 31, 2021 was $0.5 million, primarily due to $0.5 million of net proceeds received from the exercise of stock options.

Net cash provided by financing activities for the three months ended March 31, 2020 was $86.6 million, primarily due to $69.9 million of net proceeds received from our IPO, after deducting underwriting discounts and commissions, and $17.1 million of cash inflow resulting from sale of Series B Preferred Stock in February 2020.

Net cash provided by financing activities for the six months ended June 30, 2021 was $2.1 million, primarily due to $1.7 million of net proceeds received from the sale of common stock under our Sales Agreement with Cantor and $0.7 million of net proceeds received from the exercise of stock options, partially offset by payment of $0.3 million of issuance costs under the Sales Agreement.

Net cash provided by financing activities for the six months ended June 30, 2020 was $96.1 million, primarily due to $80.4 million of net proceeds received from our IPO, after deducting underwriting discounts and commissions, $17.1 million of cash inflow resulting from sale of Series B Preferred Stock in February 2020, and $0.2 million of proceeds from option exercises.

The proceeds from our IPO were partially offset by payments of $1.6 million of issuance costs.

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

continue to advance clinical development of IMR-687, including our OLE clinical trial in patients with SCD and our ongoing Ardent and Forte Phase 2b clinical trials of IMR-687 in patients with SCD and β-thalassemia;

expand our planned research and development efforts for IMR-687 and potentially pursue clinical activities for IMR-687 in HFpEF;

continue to advance clinical development of IMR-687, including our ongoing Ardent and Forte Phase 2b clinical trials of IMR-687 in patients with SCD and β-thalassemia and our OLE clinical trial in patients with SCD;

expand our planned research and development efforts for IMR-687 and pursue clinical activities for IMR-687 in HFpEF;

continue to incur third-party manufacturing costs to support our clinical trials of IMR-687 and, if approved, commercialization;

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make any milestone payments to Lundbeck under our exclusive license agreement with Lundbeck, upon the achievement of specified clinical or regulatory milestones.

Based on our current operating plan, we expect our existing cash, cash equivalents and investments will enable us to fund our operating expenses and capital expenditure requirements into mid-2022.

Based on our current operating plan, we expect our existing cash, cash equivalents and investments, along with the net proceeds from our public offering of shares of common stock in July 2021, will enable us to fund our operating expenses and capital expenditure requirements through the end of 2022.

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

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

the time and cost necessary to complete our ongoing OLE and Ardent 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 ongoing Ardent and OLE 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 Forte 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;

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The effects of material revisions in estimates, if any, will be reflected in the unaudited condensed consolidated financial statements prospectively from the date of change in estimates.

During the three months ended March 31, 2021, there were no material changes to our critical accounting policies from those described in our audited consolidated financial statements for the year ended December 31, 2020 included in our Annual Report on Form 10-K filed with the SEC on March 5, 2021, with the exception of the modified retrospective adoption of ASC 842 Leases.

During the three and six months ended June 30, 2021, there were no material changes to our critical accounting policies from those described in our audited consolidated financial statements for the year ended December 31, 2020 included in our Annual Report on Form 10-K filed with the SEC on March 5, 2021, with the exception of the modified retrospective adoption of ASC 842 Leases.

For more information on the adoption of ASC 842 Leases, see Note 2, Summary of Significant Accounting Policies – Leases, to the unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

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We will remain an EGC until the earliest of (i) December 31, 2025, (ii) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more, (iii) the date on which we have issued more than $1.0 billion in non-convertible debt during the previous rolling three-year period, or (iv) the date on which we are deemed to be a large accelerated filer under the Securities Exchange Act of 1934, as amended.

Quantitative and Qualitati ve Disclosures About Market Risk.

Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S.

interest rates, particularly because our cash equivalents are in the form of money market funds that are invested in U.S.

Treasury securities.

We also hold investments in corporate debt securities and commercial paper.

As of March 31, 2021, we had cash, cash equivalents and investments of $75.6 million.

Interest income is sensitive to changes in the general level of interest rates;

however, due to the short-term maturities of our cash equivalents and the low risk profile of our investments, an immediate 10% change in interest rates would not have a material effect on the fair market value of our investment portfolio.

We are not currently exposed to significant market risk related to changes in foreign currency exchange rates;

however, we have contracted with and may continue to contract with foreign vendors that are located in Europe and Asia, who we may pay in local currency.

Our operations may be subject to fluctuations in foreign currency exchange rates in the future.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis