Item 7. Management’s Discussion and Analysis
ITEM 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”), Section 27A of the
Securities Act of 1933, as amended, (the “Securities Act”), and Section 21E of the Exchange Act, about our expectations, beliefs, or intentions regarding our product development efforts, business, financial condition, results of operations,
strategies and prospects. You can identify forward-looking statements by the fact that these statements do not relate to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities,
trends or results as of the date they are made. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ
materially from any future results expressed or implied by the forward-looking statements. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements.
These factors include those contained in “Item 1A — Risk Factors” of this Annual Report on Form 10-K. We do not undertake any obligation to update forward-looking statements except as required by applicable law. We intend that all forward-looking
statements be subject to the safe harbor provisions of PSLRA. These forward-looking statements reflect our views only as of the date they are made.
Overview
We are a preclinical-stage biopharmaceutical company committed to realizing the potential of mRNA cell engineering to provide patients with transformational new medicines. We have
in-licensed a portfolio of over 100 patents covering key mRNA cell engineering technologies, including technologies for mRNA cell reprogramming, mRNA gene editing, the NoveSlice TM and UltraSlice TM gene-editing proteins, and the ToRNAdo TM mRNA
delivery system, which we collectively refer to as our “mRNA technology platform.” We plan to develop and advance a pipeline of therapeutic products, both internally and through strategic partnerships, with the near-term focus on deploying our mRNA
technology platform through strategic partnerships. We license our mRNA technology platform from Factor Limited under an exclusive license agreement.
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Basis of Presentation
Revenues
We are a pre-clinical stage company and have had no revenues from product sales to date. We will not have revenues from product sales until such time as we receive regulatory
approval of our product candidates, successfully commercialize our products or enter into a licensing agreement with respect to our intellectual property, which may include up-front licensing fees, of which there can be no assurance.
Research and Development Expenses
We expense our research and development costs as incurred. Our research and development expenses consist of costs incurred for company-sponsored research and development activities,
as well as support for selected investigator-sponsored research. Upfront payments and milestone payments for the licensing of technology are expensed as research and development in the period in which they are incurred if the technology is not
expected to have any alternative future uses other than the specific research and development project for which it was intended. In-process research and development (“IPR&D”) that we acquire and which has no alternative future uses and,
therefore, no separate economic values, is expensed to research and development costs at the time the costs are incurred.
The major components of research and development costs have included preclinical study costs, clinical manufacturing costs, clinical study and trial expenses, insurance coverage for
clinical trials, expensed licensed technology, consulting, scientific advisors and other third-party costs, salaries and employee benefits, stock-based compensation expense, supplies and materials and allocations of various overhead costs related
to our product development efforts.
We have contracted with third parties to perform various clinical study and trial activities in the development and testing of potential
products. The financial terms of these agreements vary from contract to contract and may result in uneven payment flows. We accrue for third party expenses based on estimates of the services received and efforts expended during the reporting
period. If the actual timing of the performance of the services or the level of effort varies from the estimate, the accrual is adjusted accordingly. The expenses for some third-party services may be recognized on a straight-line basis if the
expected costs are expected to be incurred ratably during the period. Payments under the contracts depend on factors such as the achievement of certain events or milestones, the successful enrollment of patients, the allocation of responsibilities
among the parties to the agreement, and the completion of portions of the clinical study or trial or similar conditions. Preclinical and clinical study and trial associated activities such as production and testing of clinical material require
significant up-front expenditures.
General and Administrative Expenses
Our general and administrative expenses consist primarily of salaries, benefits and other costs, including equity-based compensation, for our executive and administrative personnel,
legal and other professional fees, travel, insurance, and other corporate costs.
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Comparison of the Years Ended December 31, 2022 and 2021
Years ended December 31,
2022
2021
Change
(in thousands)
Operating expenses:
Research and development
$
10,392
$
12,705
$
(2,313
)
Impairment of in-process research and development
5,990
-
5,990
In-process research and development
-
80,538
(80,538
)
General and administrative
16,835
14,724
2,111
Transaction costs
-
5,765
(5,765
)
Total operating expenses
33,217
113,732
(80,515
)
Loss from operations
(33,217
)
(113,732
)
80,515
Other income (expense), net:
Loss on sale of NTN assets
-
(9,648
)
9,648
Change in fair value of warrant liabilities
10,795
-
10,795
Loss on non-controlling investment
(941
)
-
(941
)
Other (expense) income, net
(1,171
)
899
(2,070
)
Total other income (expense), net
8,683
(8,749
)
17,432
Loss before income taxes
(24,534
)
(122,481
)
97,947
Provision for income taxes
(45
)
(64
)
19
Net loss
$
(24,579
)
$
(122,545
)
$
97,966
Research and Development Expenses
Years ended December 31,
2022
2021
Change
(in thousands)
License and MSA expense
$
4,761
$
6,500
$
(1,739
)
Payroll-related
2,426
2,342
84
Stock-based compensation
1,249
1,597
(348
)
Clinical
1,047
1,292
(245
)
Other expenses, net
909
974
(65
)
Total research and development expenses
$
10,392
$
12,705
$
(2,313
)
For the year ended December 31, 2022, our research and development expenses decreased primarily due to a reduction in license expenses under the Original Factor License Agreement,
less stock-based compensation expense due to forfeitures of stock options and restricted stock units, and lower clinical trial expense. These reductions were offset by expenses incurred related to the MSA, which was not in place in the prior year,
and other miscellaneous expense during 2022 when compared to the year ended December 31, 2021.
Impairment of In-Process Research and Development
As discussed in Part I, Item 1 of this Annual Report on Form 10-K, in June 2022, we received the results from the INSPIRE phase 2 trial of IRX-2. The IRX-2 multi-cytokine biologic
immunotherapy represents substantially all the fair value assigned to the technologies of IRX that we acquired in 2018. Despite outcomes that favored IRX-2 in certain predefined subgroups, the INSPIRE trial did not meet the primary endpoint of
Event-Free Survival (EFS) at two years of follow up. Significant additional clinical development work would be required to advance IRX-2 in the form of additional Phase 2 and 3 studies to further evaluate the treatment effect of IRX-2 in patient
subgroups and in combination with checkpoint inhibitor therapies. The INSPIRE trial is the only Company-sponsored study of IRX-2. IRX-2 has been studied externally in other clinical settings outside of head and neck cancer in the form of
investigator sponsored trials, which have either ended or are not currently active. Based on the totality of available information, we currently do not have plans to further develop the IRX-2 product candidate. As such, we determined that the
carrying value of the IPR&D asset was impaired and recognized a non-cash impairment charge of approximately $6.0 million for the year ended December 31, 2022. There was no similar impairment charge for the year ended December 31, 2021.
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In-Process Research and Development
During the year ended December 31, 2021, we expensed the $80.5 million fair value of IPR&D acquired in the Novellus Acquisition because there was no future alternative use for
the IPR&D other than for its intended purpose. There was no similar transaction for the year ended December 31, 2022.
General and Administrative Expenses
Years ended December 31,
2022
2021
Change
(in thousands)
Professional fees
$
8,499
$
7,351
$
1,148
Payroll-related
2,942
1,299
1,643
Insurance
1,951
1,134
817
Stock-based compensation
1,686
3,638
(1,952
)
Loss on disposal or sale of fixed assets
280
-
280
Other expenses, net
1,477
1,302
175
Total general and administrative expenses
$
16,835
$
14,724
$
2,111
The increase in general and administrative expense for the year ended December 31, 2022 primarily related to increased legal fees, settlements related to certain legal matters and
increased headcount, as well as severance expense for certain employees, including our former Chief Executive Officer, who resigned effective May 26, 2022. Other increases included premiums for public company insurance policies and losses on the
disposal or sale of fixed assets, as compared to the same period in 2021. These increases were offset by decreased stock-based compensation expense due primarily to forfeitures of stock options and restricted stock units as compared to the year
ended December 31, 2021.
Transaction Costs
For the year ended December 31, 2021, we incurred approximately $5.8 million in transaction costs related to the issuance of common stock to Eterna LLC’s financial advisor upon
consummation of the Merger, and there were no comparable transaction costs for the year ended December 31, 2022.
Loss on Sales of NTN Assets
We incurred a $9.6 million loss on the sale of NTN assets for year ended December 31, 2021 in connection with the Disposition, and there were no comparable transaction costs for the
year ended December 31, 2022.
Change in Fair Value of Warrant Liabilities
For the year ended December 31, 2022, we recognized a credit of $11.4 million for the change in the fair value of warrant liabilities, which was offset by $0.6 million in expense
related to the excess fair value of the Q1-22 Common Warrants and Q1-22 Pre-Funded Warrant (as defined below) issued in connection with the Q1-22 PIPE Transaction (as defined below) over the $12.0 million gross proceeds received. There were no
comparable credits or expenses for the year ended December 31, 2021.
Loss on Non-Controlling Investment
We account for our investment in NoveCite under the equity method. During the year ended December 31, 2022, we recognized approximately $0.9 million of loss on our 25%
non-controlling investment in NoveCite. Of the $0.9 million loss for the year ended December 31, 2022, $0.5 million related to NoveCite’s results of operations for the year ended December 31, 2021. We have not guaranteed obligation of NoveCite
nor are we otherwise committed to provide any financial support for NoveCite. Therefore, we will record losses only up to our investment carrying amount. There was no comparable loss for the year ended December 31, 2021.
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Other (Expense) Income, Net
Years ended December 31,
2022
2021
Change
(in thousands)
Q1-22 PIPE transaction fees
$
(1,007
)
$
-
$
(1,007
)
Liquidated damages
(240
)
-
(240
)
Interest expense, net
(30
)
(74
)
44
PPP Loan forgiveness and ERC refunds
-
974
(974
)
Other income, net
106
(1
)
107
Total other (expense), income net
$
(1,171
)
$
899
$
(2,070
)
For the year ended December 31, 2022, the increase in other expense, net was primarily due to fees related to the Q1-22 PIPE Transaction (as defined below), which were allocated to
the warrants issued in connection with the transaction. Additionally, we recorded a loss related to the liquidated damages we incurred under our registration rights agreement with the Q1-22 PIPE Investor (as defined below) as a result of not timely
filing with the SEC our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022. These increases in expense to the year ended December 31, 2022 were offset by income from the sale of certain fixed assets and a decrease in interest
expense when compared to the year ended December 31, 2021. During the year ended December 31, 2021, we recognized income from the forgiveness of our Paycheck Protection Program loan and for payroll tax refunds under the Employee Retention Credit
program, both of which were under the Coronavirus Aid, Relief, and Economic Security Act administered by the U.S. Small Business Administration (the “CARES Act”). We did not receive any such income for the year ended December 31, 2022.
Provision for Income Taxes
We recognized a provision for income taxes of approximately $45,000 and $64,000 for the years ended December 31, 2022 and 2021, respectively. Our income tax provision is primarily
for U.S. state income tax. At December 31, 2022 and 2021, we had available net operating loss (“NOL”) carryforwards of approximately $35.6 million and $20.7 million for federal income tax purposes, respectively, of which $35.6 million can be
carried forward indefinitely. We have available $28.8 million and $20.7 million of state NOLs for the years ended December 31, 2022 and 2021, respectively, which begin to expire in 2041. We also have foreign NOL carryforwards of $6.3 million and
$4.8 million for the years ended December 31, 2022 and 2021, respectively, which carry forward indefinitely. Section 382 of the Internal Revenue Code (“IRC”) imposes limits on the ability to use NOL carryforwards that existed prior to a change in
control to offset future taxable income. Such limitations would reduce, potentially significantly, the gross deferred tax assets disclosed in the table above related to the NOL carryforwards. We continue to disclose the NOL carryforwards at their
original amount in the table above as no potential limitation has been quantified. We have also established a full valuation allowance for all deferred tax assets, including the NOL carryforwards, since we could not conclude that we were more
likely than not able to generate future taxable income to realize these assets.
Liquidity and Capital Resources
At December 31, 2022, we had cash and cash equivalents of approximately $15.5 million, of which approximately $4.1 million was restricted cash, as discussed below.
On March 6, 2022, we entered into a securities purchase agreement (the “Q1-2022 Purchase Agreement”) with an investor (the “Q1-22 PIPE Investor”), providing for the private
placement (the “Q1-22 PIPE Transaction”) to the Q1-22 PIPE Investor of approximately 343,000 units, each unit consisting of (i) one share of our common stock (or, in lieu thereof, one pre-funded warrant (each, a “Q1-22 Pre-Funded Warrant”) to
purchase one share of common stock) and (ii) one warrant (each, a “Q1-22 Common Warrant”) to purchase one share of common stock, for an aggregate gross purchase price of approximately $12.0 million. The Q1-22 PIPE Transaction closed on March 9,
2022 for net proceeds of approximately $11.0 million. The Q1-22 PIPE Investor exercised all of the Q1-22 Pre-Funded Warrants on July 12, 2022 at an exercise price of $0.10 per share for total proceeds of approximately $7,000. Pursuant to Q1-22
Purchase Agreement, we are prohibited from issuing equity in variable rate transactions for a period of one-year following consummation of the Q1-22 PIPE Transaction, including issuing equity under the Second Purchase Agreement (as defined below).
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On October 18, 2022, we entered into a facility sublease agreement (the “Sublease”) for approximately 45,500 square feet of office and laboratory space in Somerville,
Massachusetts. The term of the Sublease is approximately 10 years, and we will pay approximately $63.0 million in base rental payments over the 10-year term, plus our share of the Sublessor’s parking spaces and operating expenses. As part of the
Sublease, we delivered a security deposit in the form of a letter of credit in the amount of $4.1 million, which will be reduced on an incremental basis throughout the term of the lease. The letter of credit was issued by our commercial bank,
which required that we cash collateralize the letter of credit with $4.1 million of cash deposited in a restricted account maintained by such bank. The amount of required restricted cash collateral will decline in parallel with the reduction in
the amount of the letter of credit over the term of the sublease. The amount of restricted cash reduces by an equal amount our available working capital.
On November 23, 2022, we entered into a securities purchase agreement (the “Q4-22 Purchase Agreement”) with certain investors (the “Q4-22 PIPE Investors”), providing for the private
placement (the “Q4-22 PIPE Transaction”) to the Q4-22 Investors of approximately 2,185,000 units, each unit consisting of (i) one share of common stock and (ii) two warrants, each exercisable to purchase one share of common stock at an exercise
price of $3.28 per share (the “Q4-22 Warrants”), at a purchase price of $3.53 per unit (inclusive of $0.125 per Q4-22 Warrant), for net proceeds of approximately $7.4 million.
In April 2021, we and an investment group (the “Investment Group”) executed a purchase agreement (the “First Purchase Agreement”), pursuant to which we had the
right, but not the obligation, to sell to the Investment Group, and the Investment Group was obligated to purchase, up to $20.0 million of shares of our common stock. Sales of common stock by us were subject to certain limitations, and could occur
from time to time, at our sole discretion. In consideration for the Investment Group’s entry into the First Purchase Agreement, we issued the Investment Group approximately 3,000 shares of common stock. As of December 31, 2022, we had issued and
sold to the Investment Group approximately 56,000 shares of common stock under the First Purchase Agreement for gross proceeds of $20.0 million, and no further shares may be sold to the Investment Group under the First Purchase Agreement.
In May 2021, we and the Investment Group executed a second purchase agreement (the “Second Purchase Agreement”), pursuant to which we have the right, but not
the obligation, to sell to the Investment Group, and the Investment Group would be obligated to purchase, up to $40.0 million of shares of our common stock. Sales of common stock by us are subject to certain limitations, and may occur from time to
time, at our sole discretion. In consideration of the Investment Group’s entry into the Second Purchase Agreement, we issued to the Investment Group 50,000 shares of common stock.
Actual sales of shares of common stock to the Investment Group under the Second Purchase Agreement depend on a variety of factors to be determined by us from
time to time, including, among others, market conditions, the trading price of the common stock and determinations by us as to the appropriate sources of funding for us and our operations.
As of December 31, 2022, we had issued and sold approximately 121,000 shares of common stock under the Second Purchase Agreement for total gross proceeds of
$34.1 million. Pursuant to the securities purchase agreement in respect of the Q1-22 PIPE Transaction, we were prohibited from issuing additional shares under the Second Purchase Agreement for a period of one-year immediately following the closing
of the Q1-22 PIPE Transaction.
We have to date incurred operating losses, and we expect these losses to continue in the future as we further develop our product development programs and operate as a publicly
traded company. In the near-term, we intend to focus on licensing opportunities for our in-licensed technology, but there can be no assurance that we will enter into agreements with respect to such opportunities on such terms and within a
timeframe necessary to satisfy our need for working capital. While we are not presently pursuing product development, we may do so in the future, and current and potential licensing partners may seek to do so. Developing product candidates,
conducting clinical trials and commercializing products are expensive, and we would need to raise substantial additional funds if we were to pursue the development of one or more product candidates Based on our current financial condition and
forecasts of available cash, we believe we do not have sufficient funds to fund our operations for the next twelve months from the filing of the financial statements contained in this Annual Report on Form 10-K for the year ended December 31, 2022.
We can provide no assurance that we will be able to satisfy our near- or long-term cash needs through licensing transactions, or that we will obtain any additional financing that we require in the future or, even if such financing is available,
that it will be obtainable on terms acceptable to us.
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In that regard, our future funding requirements will depend on many factors, including:
•
the terms and timing of any collaborative, licensing and other agreements that we may establish;
•
the cost of filing and potentially prosecuting, defending and enforcing any patent claims and other intellectual property rights;
•
the cost and timing of regulatory approvals;
•
the cost and delays in product development as a result of any changes in regulatory oversight applicable to our products;
•
the cost and timing of establishing sales, marketing and distribution capabilities;
•
the effect of competition and market developments;
•
the scope, rate of progress and cost of clinical trials and other product development activities; and
•
future clinical trial results.
We plan to raise additional funds to support our product development activities and working capital requirements through public or private equity offerings, debt financings,
strategic partnerships, out-license collaborations or other means. Any sale by us of additional equity or convertible debt securities could result in dilution to our stockholders. There can be no assurance that any such required additional funding
will be available to us at all or available on terms acceptable to us.
Further, to the extent that we raise additional funds through collaborative arrangements, it may be necessary to relinquish some rights to our technologies or grant sublicenses on
terms that are not favorable to us. If we are not able to secure additional funding when needed, we may have to delay the commercialize of our products, reduce the scope of or eliminate one or more research and development programs, which could
have an adverse effect on our business.
Cash Flows
Cash flows from operating, investing and financing activities, as reflected in the accompanying consolidated statements of cash flows, are summarized as follows:
For the years ended
December 31,
(in thousands)
2022
2021
Change
Cash (used in) provided by:
Operating activities
$
(20,976
)
$
(23,488
)
$
2,512
Investing activities
(47
)
(22,742
)
22,695
Financing activities
19,579
61,585
(42,006
)
Net (decrease) increase in cash and cash equivalents
$
(1,444
)
$
15,355
$
(16,799
)
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Net Cash Used in Operating Activities
The decrease in cash used in operating activities was due to a decrease in net loss of $3.5 million, after giving effect to adjustments made for non-cash transactions, offset by an
increase in cash provided by operating assets and liabilities of $6.0 million during the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease in cash used in operations was primarily driven by increased accrued
compensation due to severance accruals, accrued costs for litigation matters, amounts due to related party for the License Fee Obligation and increased insurance liabilities.
Net Cash Used in Investing Activities
The decrease in net cash used in investing activities was primarily due to $22.9 million of cash used to purchase Novellus during the year ended December 31, 2021, which was offset
by proceeds of approximately $0.3 million from the Merger and the Disposition. There were no similar transactions during the year ended December 31, 2022.
Net Cash Provided by Financing Activities
The decrease in net cash provided by financing activities was primarily the result of a decrease in net proceeds from capital raising transactions of approximately $42.9 million,
net, offset by a decrease in principal payments made for long-term debt arrangements of $0.9 million during the year ended December 31, 2022 compared to the year ended December 31, 2021.
Critical Accounting Estimates
Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S.
GAAP. The preparation of these consolidated financial statements requires us to make judgments, estimates, and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the
date of the consolidated financial statements, as well as the reported expenses during the reporting periods. We continually evaluate our judgments, estimates and assumptions. We base our estimates on the terms of underlying agreements, our
expected course of development, historical experience and other factors we believe are reasonable based on the circumstances, the results of which form our management’s basis for making judgments about the carrying value of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from these estimates. We believe the following critical accounting estimates affect our more significant judgments and estimates used in the preparation of our consolidated
financial statements.
Goodwill Impairment
Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in the acquisition of IRX Therapeutics, Inc. in November 2018 (the “IRX
Acquisition”), which was accounted for as a business combination. Goodwill is not amortized but is tested for impairment annually, or if events occur or circumstances change that would reduce the fair value of a reporting unit below its carrying
value. Since management evaluates Eterna as a single reporting unit, goodwill is tested for impairment at the entity level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the
entity is less than its carrying value. Such qualitative factors include macroeconomic conditions, industry and market considerations, cost factors, overall financial performance and other relevant events. If the entity does not pass the
qualitative assessment, then the entity’s carrying value is compared to its fair value. Goodwill is considered impaired if the carrying value of the entity exceeds its fair value.
Recent Accounting Pronouncements
Newly Adopted Accounting Standards
In July 2021, the FASB issued Accounting Standards Update (“ASU”) 2021-05, Leases (Topic 842) – Lessors - Certain Leases with Variable Lease
Payments, which amends the lessor classification guidance to introduce additional criteria when classifying leases with variable lease payments that do not depend on a reference index or a rate. We adopted this ASU effective January 1,
2022, which did not have a material impact on our financial statements.
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In May 2021, the FASB issued ASU 2021-04 , Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50),
Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options .
ASU 2021-04 addresses the accounting for certain modifications or exchanges of freestanding equity-classified written call options. We adopted this ASU effective January 1, 2022, which did not have a material impact on our financial statements.
In November 2021, the FASB issued ASU 2021-10, Disclosures by Business Entities about Government Assistance, which requires a business
entity to disclose information about certain government assistance that it has received, including (i) the type of assistance, (ii) an entity’s accounting for the assistance and (iii) the effect of the assistance on the entities accounting
statements. We adopted this standard effective January 1, 2022, which did not have a material impact on the Company’s financial statements. We have approximately $0.6 million in payroll tax refunds recorded in other receivable on the accompanying
consolidated balance sheets as of December 31, 2022 and 2021 pursuant to the Employee Retention Credit program under the CARES Act.
Accounting Standard to be Adopted
In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to
Contractual Sale Restrictions (“ASU 2022-03”). The FASB issued ASU 2022-03 to (1) clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that
prohibit the sale of an equity security, (2) to amend a related illustrative example, and (3) to introduce new disclosure requirements for equity related securities subject to contractual sale restrictions that are measured at fair value in
accordance with Topic 820. ASU 2022-03 clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The
guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years with early adoption permitted. We are evaluating when to adopt the amendments in ASU 2022-02. We do not expect a material impact
as a result of adopting this amendment.
ITEM 7A.
Quantitative and Qualitative Disclosures about Market Risk
Under SEC rules and regulations, as a smaller reporting company we are not required to provide the information otherwise required by this item.