What changed in this filing

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Item 1. Financial Statements

2023-11-09 compared with 2023-08-10 · 72 added, 56 removed, 350 unchanged (27% of the section changed)

3 unchanged sentences

(In thousands, except share and per share data)

September 30,

Current assets

18 unchanged sentences

Preferred stock, $ .0001 par value per share;

200,000,000 shares authorized and no shares issued or outstanding as of June 30, 2023 and December 31, 2022

200,000,000 shares authorized and no shares issued or outstanding as of September 30, 2023 and December 31, 2022

Common stock, $ .0001 par value per share;

1,000,000,000 shares authorized as of June 30, 2023 and December 31, 2022;

63,458,932 shares and 63,257,376 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

1,000,000,000 shares authorized as of September 30, 2023 and December 31, 2022;

63,460,939 shares and 63,257,376 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

Additional paid-in capital

7 unchanged sentences

(In thousands, except share and per share data)

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

Operating expenses

26 unchanged sentences

Balance as of June 30, 2022

Issuance of common stock, net of offering costs

Exercise of stock options

Stock-based compensation

Other comprehensive income

Balance as of September 30, 2022

Other Comprehensive

3 unchanged sentences

Stock-based compensation

Other comprehensive gain

Other comprehensive income

Balance as of March 31, 2023

4 unchanged sentences

Balance as of June 30, 2023

Exercise of stock options

Stock-based compensation

Other comprehensive income

Balance as of September 30, 2023

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

2 unchanged sentences

(In thousands)

Six months ended June 30,

Nine months ended September 30,

Cash flows from operating activities

17 unchanged sentences

Cash flows from financing activities

Proceeds from issuance of common stock, net of underwriting discounts and commissions

Exercise of stock options

Payment of deferred offering costs

Payment of offering costs and deferred offering costs

Proceeds from Employee Stock Purchase Plan

6 unchanged sentences

Property and equipment purchases included in accounts payable and accrued other expenses

Deferred offering costs included in accounts payable and accrued other expenses

Offering costs and deferred offering costs included in accounts payable and accrued other expenses

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

9 unchanged sentences

and certain countries in Europe.

In addition, the Company has identified EDG-7500, for the potential treatment of hypertrophic cardiomyopathy (HCM) and is conducting nonclinical studies to support advancing the compound into a Phase 1 clinical trial in late 2023.

In addition, the Company has initiated the Phase 1 study of EDG-7500, for the potential treatment of hypertrophic cardiomyopathy (HCM).

The Company is using its proprietary drug discovery platform to develop a pipeline of precision medicine product candidates that target key muscle proteins and modulators to address a broad array of genetically defined muscle disorders.

Risks and Uncertainties

The board of directors of the Company discusses with management macroeconomic and geopolitical developments, including inflation, instability in the banking and financial services sector, tightening of the credit markets, the Russia/Ukraine conflict, COVID-19, cybersecurity and sanctions so that the Company can be prepared to react to new developments as they arise.

The board of directors of the Company discusses with management macroeconomic and geopolitical developments, including inflation, instability in the banking and financial services sector, tightening of the credit markets, international conflicts, COVID-19, cybersecurity and sanctions so that the Company can be prepared to react to new developments as they arise.

The board of directors and the management of the Company are carefully monitoring these developments and the resulting economic impact on its financial condition and results of operations.

Liquidity and Capital Resources

The Company has an accumulated deficit of $ 188.9 million and cash, cash equivalents and marketable securities of $ 309.9 million as of June 30, 2023.

The Company has an accumulated deficit of $ 214.6 million and cash, cash equivalents and marketable securities of $ 289.7 million as of September 30, 2023.

The Company’s ability to fund ongoing operations is highly dependent upon raising additional capital through the issuance of equity securities and issuing debt or other financing vehicles.

8 unchanged sentences

Prior to termination, the Company had not sold any Placement Shares under the Prior Sales Agreement.

As of June 30, 2023, the Company has not sold any shares under the ATM Program.

As of September 30, 2023, the Company has not sold any shares under the ATM Program.

The Company’s ability to secure capital is dependent upon success in developing its technology and product candidates.

1 unchanged sentence

The issuance of additional equity or debt securities will likely result in substantial dilution to the Company’s stockholders.

Should additional capital not be available to the Company in the near term, or not be available on

acceptable terms, the Company may be unable to realize value from the Company’s assets or discharge liabilities in the normal course of business, which may, among other alternatives, cause the Company to delay, substantially reduce, or discontinue operational activities to conserve cash balances, which could have a material adverse effect on the Company’s ability to achieve its intended business objectives.

Should additional capital not be available to the Company in the near term, or not be available on acceptable terms, the Company may be unable to realize value from the Company’s assets or discharge liabilities in the

normal course of business, which may, among other alternatives, cause the Company to delay, substantially reduce, or discontinue operational activities to conserve cash balances, which could have a material adverse effect on the Company’s ability to achieve its intended business objectives.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.

The financial statements do not reflect any adjustments relating to the recoverability and reclassification of assets and liabilities that might be necessary if the Company is unable to continue as a going concern.

The Company believes that the $ 309.9 million of cash, cash equivalents and marketable securities on hand as of June 30, 2023 will be sufficient to fund its operations in the normal course of business and meet its liquidity needs through at least the next 12 months from the issuance of these financial statements.

The Company believes that the $ 289.7 million of cash, cash equivalents and marketable securities on hand as of September 30, 2023 will be sufficient to fund its operations in the normal course of business and meet its liquidity needs through at least the next 12 months from the issuance of these financial statements.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 unchanged sentences

The condensed balance sheet as of December 31, 2022, is derived from the Company’s audited financial statements.

The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023, or for any other future annual or interim period.

The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023, or for any other future annual or interim period.

The accompanying interim unaudited condensed financial statements should be read in conjunction with our audited financial statements included in our Annual Report on Form 10-K that was filed with the SEC on February 23, 2023.

In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation of our financial position as of June 30, 2023, the results of operations for the three and six months ended June 30, 2023 and 2022 and cash flows for the six months ended June 30, 2023 and 2022 have been made.

In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation of our financial position as of September 30, 2023, the results of operations for the three and nine months ended September 30, 2023 and 2022 and cash flows for the nine months ended September 30, 2023 and 2022 have been made.

Certain prior year amounts have been reclassified for consistency with the current year presentation.

These reclassifications had no effect on the reported results of operations.

An adjustment has been made to the Condensed Statement of Cash Flows for the nine months ended September 30, 2022 to reclassify cash receipts for tenant improvements to be a change in the Company’s lease liability.

Segment Information

7 unchanged sentences

The Company considers all liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Cash equivalents as of June 30, 2023 and December 31, 2022 primarily consist of money market funds and cash.

Cash equivalents as of September 30, 2023 and December 31, 2022 primarily consist of money market funds and cash.

Concentrations of Credit Risk

2 unchanged sentences

The Company believes that it is not exposed to significant credit risk as its deposits are held at financial institutions that management believes to be of high credit quality.

Company has not experienced any losses on deposits since inception.

The Company has not experienced any losses on deposits since inception.

The Company regularly invests excess cash with major financial institutions in money market funds, corporate debt securities, and commercial paper, all of which can be readily purchased and sold using established markets.

4 unchanged sentences

Should the equity issuance be abandoned, the deferred offering costs are expensed immediately as a charge to operating expenses in the statement of operations.

Deferred offering costs as of June 30, 2023 and December 31, 2022 were $ 0.4 million and $ 0.3 million, respectively.

Deferred offering costs as of September 30, 2023 and December 31, 2022 were $ 0.5 million and $ 0.3 million, respectively.

Such costs are classified in other non-current assets in the accompanying balance sheets.

20 unchanged sentences

If impairment is recognized, the carrying value of the impaired asset is reduced to its fair value.

There were no impairment charges or long-lived assets disposed of during the three and six months ended June 30, 2023 and 2022.

There were no impairment charges or long-lived assets disposed of during the three and nine months ended September 30, 2023 and 2022.

Deferred income taxes are provided on temporary differences between financial statement and income tax reporting.

4 unchanged sentences

Deferred tax liabilities are recognized for temporary differences that will be taxable in future years.

The Company evaluated its tax positions and determined it has no uncertain tax positions as of June 30, 2023.

The Company evaluated its tax positions and determined it has no uncertain tax positions as of September 30, 2023.

Fair Value of Financial Instruments

19 unchanged sentences

The following tables summarize the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):

As of June 30, 2023

As of September 30, 2023

Cash equivalents:

23 unchanged sentences

With regard to commercial paper, all of the securities had high credit ratings and one year or less to maturity; therefore, fair value was derived from accretion of purchase price to face value over the term of maturity or quoted market prices for similar instruments if available.

During the three and six months ended June 30, 2023, there were no transfers of financial assets between Level 1 and Level 2.

As of June 30, 2023, the remaining contractual maturities of $ 274.5 million of marketable securities were less than one year and $ 4.2 million were one to two years .

During the three and nine months ended September 30, 2023, there were no transfers of financial assets between Level 1 and Level 2.

As of September 30, 2023, the remaining contractual maturities of $ 250.1 million of marketable securities were less than one year and $ 7.0 million were one to two years .

The Company periodically reviews its portfolio of debt securities to determine if any investment is impaired due to credit loss or other potential valuation concerns.

For debt securities where the fair value of the investment is less than the amortized cost basis, the Company has assessed at the individual security level for various quantitative factors including, but not limited to, the nature of the investments, changes in credit ratings, interest rate fluctuations, industry analyst reports, and the severity of impairment.

Unrealized losses on marketable securities at June 30, 2023 were primarily due to changes in interest rates, including market credit spreads, and not due to increased credit risks associated with specific securities.

Unrealized losses on marketable securities at September 30, 2023 were primarily due to changes in interest rates, including market credit spreads, and not due to increased credit risks associated with specific securities.

Comprehensive Loss

29 unchanged sentences

The Company is authorized to issue two classes of stock designated as common stock and preferred stock.

As of June 30, 2023 the total number of shares authorized was 1,200,000,000 .

As of September 30, 2023 the total number of shares authorized was 1,200,000,000 .

The total number of shares of common stock authorized was 1,000,000,000 .

14 unchanged sentences

or (3) such other amount as the Company’s board of directors may determine.

As of June 30, 2023, there were 4,412,983 shares available for future issuance under the 2021 Plan.

As of September 30, 2023, there were 1,215,672 shares available for future issuance under the 2021 Plan.

Founder Stock Options

1 unchanged sentence

This grant is separate from the Company’s equity incentive plans discussed above.

As of June 30, 2023, 1,531,780 options were both outstanding and exercisable.

There were no options exercised during the three and six months ended June 30, 2023.

As of September 30, 2023, 1,531,780 options were both outstanding and exercisable.

There were no options exercised during the three and nine months ended September 30, 2023.

Total stock-based compensation expense related to all equity plans, including Founder Stock Options was allocated as follows (in thousands):

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

Research and development

1 unchanged sentence

Total stock-based compensation expense

Grant of Stock Options

During the nine months ended September 30, 2023, the Company issued 3,785,094 stock options with a fair value of $ 20.0 million that vest over a weighted average period of 3.9 years.

NOTE 5 COMMITMENTS AND CONTINGENCIES

1 unchanged sentence

On November 20, 2020, the Company exclusively licensed intellectual property from The Ohio State Innovation Foundation (OSIF) pursuant to a license agreement.

Under the license agreement, the Company is obligated to make payments to OSIF aggregating up to $ 1.3 million per product covered by the OSIF licensed patent rights upon the achievement of specified development and regulatory approval milestones and approximately $ 2.3 million per product covered by the OSIF licensed patent rights upon the achievement of specified sales milestones.

The Company is also obligated to pay low single-digit royalties to OSIF based on net sales by the Company and its affiliates and sublicensees of each product covered by the OSIF licensed patent rights.

In addition, in the event the Company sublicenses the OSIF licensed patent rights, the Company is obligated to pay OSIF a specified portion of income received from sublicensing.

Total costs incurred for license fees and milestones achieved under the OSIF license agreement were $ 6,250 and $ 12,500 for the three and six months ended June 30, 2023, respectively and $ 6,250 and $ 12,500 for the three and six months ended June 30, 2022, respectively.

As of June 30, 2023, the Company has paid $ 0.7 million for license fees and milestones achieved in connection with the license agreement.

On July 27, 2023, the Company provided notice to OSIF to terminate the license agreement because the licensed technology is no longer relevant to the Company’s business, effective as of 90 days from the date of such notice.

Under the license agreement, the Company was obligated to make payments to OSIF aggregating up to $ 1.3 million per product covered by the OSIF licensed patent rights upon the achievement of specified development and regulatory approval milestones and approximately $ 2.3 million per product covered by the OSIF licensed patent rights upon the achievement of specified sales milestones.

The Company was also obligated to pay low single-digit royalties to OSIF based on net sales by the Company and its affiliates and sublicensees of each product covered by the OSIF licensed patent rights.

In addition, in the event the Company sublicensed the OSIF licensed patent rights, the Company was obligated to pay OSIF a specified portion of income received from sublicensing.

As of September 30, 2023, the Company has paid $ 0.7 million for license fees and milestones achieved in connection with the license agreement.

On July 27, 2023, the Company provided notice to OSIF to terminate the license agreement because the licensed technology was no longer relevant to the Company’s business.

The license agreement was terminated, effective October 25, 2023.

Lease Agreements

3 unchanged sentences

The New Boulder Lease includes two tenant improvement allowances, which includes one for $ 1.0 million in construction costs to be fully reimbursed by the lessor (the First Allowance) and one for $ 2.0 million in construction costs to be repaid to the lessor as additional rent payments over the initial term of the lease (the Second Allowance).

Both the First Allowance and Second Allowance have been received in full as of June 30, 2023.

Both the First Allowance and Second Allowance have been received in full.

The receipt of $ 2.0 million under the Second Allowance resulted in an increase to operating lease liabilities and an increase to aggregate base rent payments totaling $ 2.5 million.

1 unchanged sentence

The Expansion space includes an improvement allowance in the amount of $ 0.5 million to be fully reimbursed by the lessor.

As of June 30, 2023, $ 0 was received by the lessor under the allowance associated with the expansion space.

As of September 30, 2023, $ 0 was received by the lessor under the allowance associated with the expansion space.

Under the New Boulder Lease and the Expansion Space (collectively, the Lease), the Company has the option to extend the Lease for two additional terms of five years each.

1 unchanged sentence

Such amounts are not included in the measurement of the lease liabilities and are recognized as variable lease expense when they are incurred.

Variable lease expense was $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2023, respectively and $ 0 for both the three and six months ended June 30, 2022.

Variable lease expense was $ 0.1 million and $ 0.3 million for the three and nine months ended September 30, 2023, respectively and $ 17,000 for both the three and nine months ended September 30, 2022.

The Lease is classified as an operating lease.

1 unchanged sentence

The option to extend the Lease was not recognized as part of the Company’s lease liabilities and ROU lease assets, as such extensions are not reasonably certain to occur.

As of June 30, 2023, the weighted-average remaining lease term and the weighted-average discount rate for the Lease was 6.8 years and 6.4 %, respectively.

Rent expense under the Lease was $ 0.1 million and $ 0.3 million for the three and six months ended June 30, 2023, respectively and $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2022, respectively.

Future minimum lease payments under the Lease as of June 30, 2023 are as follows (in thousands):

As of September 30, 2023, the weighted-average remaining lease term and the weighted-average discount rate for the Lease was 6.5 years and 6.4 %, respectively.

Rent expense under the Lease was $ 0.1 million and $ 0.4 million for the three and nine months ended September 30, 2023, respectively and $ 0.1 million and $ 0.3 million for the three and nine months ended September 30, 2022, respectively.

Future minimum lease payments under the Lease as of September 30, 2023 are as follows (in thousands):

Year Ending December 31,

1 unchanged sentence

Total undiscounted future minimum lease payments

tenant improvement receivable

Total lease liability

1 unchanged sentence

From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business.

The Company was not subject to any material legal proceedings during the six months ended June 30, 2023 and no material legal proceedings are currently pending or threatened.

The Company was not subject to any material legal proceedings during the nine months ended September 30, 2023 and no material legal proceedings are currently pending or threatened.

Indemnification Agreements

3 unchanged sentences

To date, the Company has not incurred any material costs as a result of such indemnifications.

The Company is not aware of any claims under indemnification arrangements, and it has not accrued any liabilities related to such obligations in its financial statements as of June 30, 2023.

The Company is not aware of any claims under indemnification arrangements, and it has not accrued any liabilities related to such obligations in its financial statements as of September 30, 2023.

NOTE 6 NET LOSS PER SHARE

1 unchanged sentence

Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and potentially dilutive securities outstanding for the period.

For purposes of the diluted net loss per share calculation, the convertible preferred stock and common stock options are considered to be potentially dilutive securities.

Basic and diluted net loss per share is presented in conformity with the two-class method required for participating securities as the convertible preferred stock is considered a participating security.

For purposes of the diluted net loss per share calculation, common stock options and unvested restricted stock units are considered to be potentially dilutive securities.

The Company’s participating securities do not have a contractual obligation to share in the Company’s losses.

2 unchanged sentences

The following table sets forth the computation of the basic and diluted net loss per share (in thousands, except share and per share data):

Three months ended June 30,

Six Months Ended June 30,

Three months ended September 30,

Nine Months Ended September 30,

Weighted-average shares outstanding used in computing net loss per share, basic and diluted

1 unchanged sentence

The following weighted average outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive:

Three months ended June 30,

Six Months Ended June 30,

Three months ended September 30,

Nine Months Ended September 30,

Options to purchase common stock

2 unchanged sentences

Property and equipment consisted of the following amounts (in thousands):

As of June 30,

As of September 30,

As of December 31,

7 unchanged sentences

Property and equipment - net

Depreciation expense was $ 0.4 million and $ 0.6 million for the three and six months ended June 30, 2023, respectively and $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2022, respectively.

Depreciation expense was $ 0.4 million and $ 1.1 million for the three and nine months ended September 30, 2023, respectively and $ 0.1 million and $ 0.3 million for the three and nine months ended September 30, 2022, respectively.

NOTE 8 ACCRUED OTHER EXPENSES

Accrued other expenses consisted of the following amounts (in thousands):

As of June 30,

As of September 30,

As of December 31,

3 unchanged sentences

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 1. Financial Statements