What changed in this filing

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Item 1. Financial Statements

2021-08-10 compared with 2021-05-11 · 122 added, 88 removed, 433 unchanged (33% of the section changed)

25 unchanged sentences

NONCURRENT LIABILITIES:

Deferred rent

Long term debt, net

5 unchanged sentences

Preferred stock - $ 0.00001 par value;

10,000,000 shares and 0 shares authorized at March 31, 2021 and December 31, 2020, respectively;

0 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

10,000,000 shares and 0 shares authorized at June 30, 2021 and December 31, 2020, respectively;

0 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

Common stock—$ 0.00001 par value;

500,000,000 shares authorized at March 31, 2021 and December 31, 2020, respectively;

56,892,406 shares and 56,890,569 issued and outstanding at March 31, 2021 and December 31, 2020, respectively

500,000,000 shares authorized at June 30, 2021 and December 31, 2020, respectively;

57,000,139 shares and 56,890,569 issued and outstanding at June 30, 2021 and December 31, 2020, respectively

Additional paid in capital

8 unchanged sentences

(In thousands, except share and per share data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Net product revenues

7 unchanged sentences

Loss on debt extinguishment

Other expense, net

Other income (expense), net

Interest expense, net

5 unchanged sentences

Weighted average number of shares of common stock - basic

Weighted average number of shares of common stock -

Weighted average number of shares of common stock - diluted

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

7 unchanged sentences

Stock-based compensation

Balance as of June 30, 2021

stockholders’

Balance as of March 31, 2021

Exercise of options

Stock-based compensation

Balance as of June 30, 2021

Convertible Preferred

10 unchanged sentences

Stock-based compensation

Repurchase and cancellation of common units

Balance as of June 30, 2020

Convertible Preferred

Series A, B, & C

stockholders’

Balance as of March 31, 2020

Preferred stock dividend, Series A

Preferred stock accretion, Series A

Preferred stock dividend, Series B

Preferred stock accretion, Series B

Preferred stock dividend, Series C

Preferred stock accretion, Series C

Exercise of options

Stock-based compensation

Repurchase and cancellation of common units

Balance as of June 30, 2020

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

3 unchanged sentences

(In thousands, except share and per share data)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

2 unchanged sentences

Intangible amortization

Stock-based compensation expense

Stock-based and employee stock purchase compensation expense

Stock appreciation rights market adjustment

9 unchanged sentences

Other non-current liabilities

Net provided by (cash used) in operating activities

Net cash provided by (used in) operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

8 unchanged sentences

Proceeds from exercised options

Repurchase of common stock

Net cash provided by financing activities

26 unchanged sentences

The Company’s operations are conducted in its wholly owned subsidiary, Harmony.

The Company is a commercial-stage pharmaceutical company focused on developing and commercializing innovative therapies for patients living with rare neurological disorders who have unmet medical needs.

The Company is a commercial-stage, rare disease pharmaceutical company focused on developing and commercializing innovative therapies for patients living with rare neurological disorders who have unmet medical needs.

The Company is headquartered in Plymouth Meeting, Pennsylvania.

13 unchanged sentences

The unaudited condensed consolidated financial statements have been prepared as though the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

The Company has an accumulated deficit of $480,809 and $488,195, as of March 31, 2021 and December 31, 2020, respectively.

As of March 31, 2021, the Company had cash and cash equivalents of $141,169.

The Company has an accumulated deficit of $ 466,692 and $ 488,195 , as of June 30, 2021 and December 31, 2020, respectively.

As of June 30, 2021, the Company had cash and cash equivalents of $ 159,686 .

On August 21, 2020, the Company received aggregate proceeds from a common stock offering of approximately $ 135,435 , net of underwriting discounts and commissions and other estimated offering expenses (see Note 11).

1 unchanged sentence

This capital raise and debt issuance has resolved the Company’s significant risks and uncertainties regarding sources of liquidity, which previously raised substantial doubt about the Company’s ability to continue as a going concern.

The Company believes that its anticipated cash from operating and financing activities and existing cash and cash equivalents will enable the Company to meet its operational liquidity needs and fund its planned investing activities for the next twelve months fr o m the date of issuance of these unaudited condensed consolidated financial statements.

The Company believes that its anticipated cash from operating and financing activities and existing cash and cash equivalents will enable the Company to meet its operational liquidity needs and fund its planned investing activities for the next twelve months from the date of issuance of these unaudited condensed consolidated financial statements.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2 unchanged sentences

All intercompany accounts and transactions have been eliminated in consolidation.

The condensed consolidated balance sheet as of March 31, 2021, and the condensed consolidated statements of cash flows for the three months ended March 31, 2021 and 2020, and condensed consolidated statements of operations and comprehensive income (loss) and the condensed consolidated statements of convertible preferred stock and shareholders’ equity (deficit) for the three months ended March 31, 2021 and 2020, are unaudited.

The condensed consolidated balance sheet as of June 30, 2021, the condensed consolidated statements of cash flows for the six months ended June 30, 2021 and 2020, and the condensed consolidated statements of operations and comprehensive income (loss) and the condensed consolidated statements of convertible preferred stock and shareholders’ equity (deficit) for the three and six months ended June 30, 2021 and 2020, are unaudited.

The balance sheet as of December 31, 2020 was derived from audited financial statements as of and for the year ended December 31, 2020.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual financial statements as of and for the year ended December 31, 2020, and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statements of the Company’s financial position as of March 31, 2020, and the results of its operations and its cash flows for the three months ended March 31, 2021 and 2020.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual financial statements as of and for the year ended December 31, 2020, and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of June 30, 2021, and the results of its operations and its cash flows for the three and six months ended June 30, 2021 and 2020.

The condensed consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year.

1 unchanged sentence

These condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes thereto for the year ended December 31, 2020.

The balance sheet data as of December 31, 2020 was derived from the Company’s audited financial statements for the year ended December 31, 2020.

Use of Estimates

3 unchanged sentences

Fair Value of Financial Instruments

The Company’s unaudited condensed consolidated financial statements include cash, cash equivalents, accounts payable, and accrued liabilities, all of which are short term in nature and, accordingly, approximate fair value.

The Company’s unaudited condensed consolidated financial statements include cash, cash equivalents, restricted cash, accounts payable, and accrued liabilities, all of which are short term in nature and, accordingly, approximate fair value.

Additionally, prior to the IPO, the Company’s condensed consolidated financial statements included a warrant liability that was carried at fair value and was re-measured at each balance sheet date until it would be exercised or expired.

13 unchanged sentences

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents consist of cash and, if applicable, highly liquid investments with an original maturity of three months or less when purchased, including investments in Money Market Funds.

Cash and cash equivalents and restricted cash consist of cash and, if applicable, highly liquid investments with an original maturity of three months or less when purchased, including investments in Money Market Funds.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that equal the amount reflected in the statements of cash flows.

16 unchanged sentences

Historically, the Company has not experienced credit losses on its accounts receivable.

As of March 31, 2021, three customers accounted for 100% of gross accounts receivable, Caremark LLC (“CVS Caremark”), which accounted for 34% of gross accounts receivable;

As of June 30, 2021, three customers accounted for 100 % of gross accounts receivable;

Caremark LLC (“CVS Caremark”), which accounted for 35 % of gross accounts receivable;

PANTHERx Specialty Pharmacy LLC (“Pantherx”), which accounted for 35 % of gross accounts receivable;

1 unchanged sentence

(“Accredo”), which accounted for 30 % of gross accounts receivable.

As of December 31, 2020, three customers accounted for 100% of gross accounts receivable, CVS Caremark, which accounted for 44% of gross accounts receivable;

As of December 31, 2020, three customers accounted for 100 % of gross accounts receivable;

CVS Caremark, which accounted for 44 % of gross accounts receivable;

Pantherx, which accounted for 23 % of gross accounts receivable;

and Accredo, which accounted for 33 % of gross accounts receivable.

For the three months ended March 31, 2021, three customers accounted for 100% of gross product revenues;

For the six months ended June 30, 2021, three customers accounted for 100 % of gross product revenues;

CVS Caremark accounted for 37 % of gross product revenues;

Pantherx accounted for 38% of gross product revenues;

Pantherx accounted for 35 % of gross product

and Accredo accounted for 28 % of gross product revenues.

For the three months ended March 31, 2020 three customers accounted for 100% of gross product revenues;

CVS Caremark accounted for 42% of

gross product revenues;

For the six months ended June 30 , 2020 three customers accounted for 100 % of gross product revenues;

CVS Caremark accounted for 42 % of gross product revenues;

Pantherx accounted for 33 % of gross product revenues;

4 unchanged sentences

The Company began capitalizing inventory upon FDA approval of WAKIX ® .

Excluded from cost of product sold shown and included in general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss is amortization of acquired developed technology of $4,579 and $1,786 for the three months ended March 31, 2021 and 2020, respectively.

Advertising Expenses

We expensed the costs of advertising, including promotional expenses, as incurred.

Advertising expense was $1,653 and $2,454 for the three months ended March 31, 2021 and 2020, respectively.

Excluded from cost of product sold shown and included in general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss is amortization of acquired developed technology of $ 4,629 and $ 1,907 for the three months ended June 30, 2021 and 2020, respectively, and $ 9,208 and $ 3,693 for the six months ended June 30, 2021 and 2020, respectively.

Recently Issued Accounting Pronouncements

22 unchanged sentences

The guidance was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022.

The Company is currently evaluating the impact of the transition from LIBOR to alternative reference rates but does not expect a significant impact to our condensed consolidated financial statements.

The Company is currently evaluating the impact of the transition from LIBOR to alternative reference rates but does not expect a significant impact to its condensed consolidated financial statements.

In May 2021, the FASB issued ASU No.

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 (a consensus of the FASB Emerging Issues Task Force) , which clarif ies and reduce s diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchang e.

The amendments are effective for annual periods beginning after December 15, 2021, including interim periods within those periods with early adoption permitted.

The Company is currently evaluating the impact of adopting this new accounting guidance.

Inventory, net consisted of the following:

8 unchanged sentences

This event triggered a milestone payment of $ 75,000 associated with the License Agreement (discussed below) which the Company capitalized as an intangible asset and paid in November of 2019.

The Company determined a useful life of 10 years for such intangible asset, and, as of December 31, 2020 the remaining useful life was 8.5 years.

The Company determined a useful life of 10 years for such intangible asset, and, as of June 30, 2021, the remaining useful life was 8.25 years.

Prior to this event, all other milestones associated with the License Agreement were expensed through research and development as they did not meet the criteria to be recognized as an intangible asset.

1 unchanged sentence

This event triggered a milestone payment of $ 100,000 associated with the License Agreement which the Company capitalized as an intangible asset and paid in January of 2021.

The Company determined a useful life of 9 years for such intangible asset, and, as of December 31, 2020 the remaining useful life was 8.5 years.

Amortization expense for the three months ended March 31, 2021 and 2020 was $4,579 and $1,786, respectively and is recorded in general and administrative expenses on the condensed consolidated statements of operations and comprehensive income (loss).

The Company determined a useful life of 9 years for such intangible asset, and, as of June 30, 2021, the remaining useful life was 8.25 years.

Amortization expense was $ 4,629 and $ 1,907 for the three months ended June 30, 2021 and 2020, respectively, and $ 9,208 , and $ 3,693 , for the six months ended June 30, 2021 and 2020 respectively, and is recorded in general and administrative expenses on the condensed consolidated statements of operations and comprehensive income (loss).

The Company expects the future annual amortization expense for the unamortized intangible assets to be as follows:

Years ending December 31,

2021 (excluding the three months ended March 31, 2021)

2021 (excluding the six months ended June 30, 2021)

The gross carrying amount and net book value of the intangible assets is as follows:

11 unchanged sentences

The License Agreement also requires sales-based milestone payments, a fixed trademark royalty and a tiered royalty, all based on net sales, which become due and payable to Bioprojet on a quarterly basis.

During the three months ended March 31, 2021 and 2020, the Company incurred $9,547 and $3,277, respectively, for sales-based, trademark and tiered royalties recognized as cost of product sold.

As of March 31, 2021 and December 31, 2020, the Company had accrued $9,512 and $9,006, respectively, for sales-based, trademark and tiered royalties.

The Company incurred $ 11,812 and $ 6,000 for the three months ended June 30, 2021 and 2020, respectively, and $ 21,359 and $ 9,277 for the six months ended June 30, 2021 and 2020, respectively, for sales-based, trademark and tiered royalties recognized as cost of product sold.

As of June 30, 2021 and December 31, 2020, the Company had accrued $ 11,811 and $ 9,006 , respectively, for sales-based, trademark and tiered royalties.

At December 31, 2020, the Company had accrued $ 100,000 for the milestone payment to Bioprojet.

4 unchanged sentences

Selling and marketing

Research and development

Professional fees, consulting, and other services

Other expenses

Research and development

Milestone payment

10 unchanged sentences

On January 9, 2020, the Company entered into a credit agreement with OrbiMed Royalty & Credit Opportunities, LP for an aggregate amount of $ 200,000 (the “OrbiMed Loan”), which matures in January 2026 .

Borrowings under the OrbiMed Loan are collateralized by all of the Company’s assets, excluding the

intellectual property licensed through the License Agreement.

Borrowings under the OrbiMed Loan are collateralized by all of the Company’s assets, excluding the intellectual property licensed through the License Agreement.

The OrbiMed Loan bears an interest rate equal to the sum of (i) the greater of (a) 1-month LIBOR or (b) 2.00 % per annum, plus (ii) 11.00 % per annum, paid in cash monthly in arrears on the last day of each month starting in January 2020.

2 unchanged sentences

In addition to entering into the OrbiMed Loan, the Company extinguished the CRG Loan which required a payoff amount of $ 120,893 consisting of principal repayment, interest, and exit fees.

In connection with extinguishment of the CRG Loan, we recognized a loss on extinguishment of $22,639, which included an exit fee of $18,047 and the write-off of the remaining unamortized debt issuance costs of $4,592.

In connection with extinguishment of the CRG Loan, the Company recognized a loss on extinguishment of $ 22,639 , which included an exit fee of $ 18,047 and the write-off of the remaining unamortized debt issuance costs of $ 4,592 .

The loss on extinguishment of debt was recorded in loss on debt extinguishment within the Company’s condensed consolidated statements of operations.

1 unchanged sentence

These debt issuance costs will be amortized as additional interest expense over the six-year loan term of the OrbiMed Loan.

The fair value of the OrbiMed loan as of March 31, 2021 was $260,328.

The fair value of the OrbiMed loan as of June 30, 2021 was $ 257,568 .

In connection with the OrbiMed Loan, the Company issued warrants (the “Warrants”) to OrbiMed Royalty & Credit Opportunities, LP on January 9, 2020.

3 unchanged sentences

The portion of the OrbiMed Loan proceeds allocated to the warrant liability resulted in a debt discount, which is presented in the condensed consolidated balance sheets as a direct deduction from the carrying value of the debt and is being amortized as additional interest expense over the six-year loan term of the OrbiMed Loan.

The unamortized debt discount as of March 31, 2021 is $2,031 and is presented in the condensed consolidated balance sheets as a direct deduction from the carrying value of the debt.

The balances of the OrbiMed Loan as of March 31, 2021 and December 31, 2020 were as follows:

The unamortized debt discount as of June 30, 2021 is $ 1,957 and is presented in the condensed consolidated balance sheets as a direct deduction from the carrying value of the debt.

The balances of the OrbiMed Loan as of June 30, 2021 and December 31, 2020 were as follows:

Liability component - principal

1 unchanged sentence

Liability component - net carrying value

Interest expense related to the OrbiMed Loan and CRG Loan were included in interest expense, net in the Condensed Consolidated Statements of Operations as follows:

For the Three Months Ended March 31,

Interest expense related to the OrbiMed Loan and CRG Loan were included in interest expense, net in the condensed consolidated statements of operations and comprehensive income (loss) as follows:

Three Months Ended

Six Months Ended

Interest on principal balance

12 unchanged sentences

In addition, tenant improvement allowances recorded are amortized as a reduction to rent expense on a straight-line basis over the lease term.

Rent expense was $136 for the three months ended March 31, 2021, compared to $204 for the three months ended March 31, 2020.

The following table sets forth the lease payment obligations as of March 31, 2021, for the periods indicated below:

Rent expense was $ 217 and $ 353 for the three and six months ended June 30, 2021, respectively, compared to $ 151 and $ 355 for the three and six months ended June 30, 2020, respectively.

The following table sets forth the lease payment obligations as of June 30, 2021, for the periods indicated below:

Years ending December 31,

2021 (excluding the three months ended March 31, 2021)

2021 (excluding the six months ended June 30, 2021)

CONVERTIBLE PREFERRED STOCK

3 unchanged sentences

On January 8, 2018, the Company issued an additional 15,000,000 shares of Series A convertible preferred stock for a purchase price of $ 1.00 per share, or $ 15,000 in the aggregate.

As of March 31, 2020, there were 286,000,000 Series A convertible preferred stock authorized of which 285,000,000 were issued and outstanding.

As of June 30, 2020, there were 286,000,000 Series A convertible preferred stock authorized of which 285,000,000 were issued and outstanding.

Each outstanding share of Series A convertible preferred stock accrued dividends at 10 % per annum of the Series A original issue price, subject to adjustment for stock splits, combinations, recapitalizations, stock dividends and similar transactions.

2 unchanged sentences

On January 8, 2018, the Company issued 8,000,000 shares of Series B convertible preferred stock for a purchase price of $ 1.25 per share, or $ 10,000 in the aggregate.

As of March 31, 2020, there were 8,030,000 shares of Series B convertible preferred stock authorized, of which 8,000,000 were issued and outstanding.

Each outstanding share of Series B convertible preferred stock accrued dividends at 10% per annum of the Series B original issue price, subject to adjustment for stock splits, combinations, recapitalizations, stock dividends and similar transactions.

As of June 30, 2020, there were 8,030,000 shares of Series B convertible preferred stock authorized, of which 8,000,000 were issued and outstanding.

outstanding share of Series B convertible preferred stock accrue d dividends at 10 % per annum of the Series B original issue price, subject to adjustment for stock splits, combinations, recapitalizations, stock dividends and similar transactions.

Preferred dividends on the Series B convertible preferred stock were cumulative and were compounded annually.

1 unchanged sentence

On August 9, 2019, the Company issued 25,510,205 shares of Series C convertible preferred stock for a purchase price of $ 1.96 per share, or $ 50,000 in the aggregate.

As March 31, 2020, there were 25,600,000 shares of Series C convertible preferred stock authorized, of which 25,510,205 were issued and outstanding.

As June 30, 2020, there were 25,600,000 shares of Series C convertible preferred stock authorized, of which 25,510,205 were issued and outstanding.

Each outstanding share of Series C convertible preferred stock accrued dividends at 10 % per annum of the Series C original issue price, subject to adjustment for stock splits, combinations, recapitalizations, stock dividends and similar transactions.

27 unchanged sentences

RSUs vest over the vesting period specified in the applicable award agreement, at achievement of a performance requirement, or upon change of control (as defined in the applicable plan).

Changes in stock options granted under the 2017 and 2020 Plans for the three months ended March 31, 2021 is as follows:

Changes in stock options granted under the 2017 and 2020 Plans for the six months ended June 30, 2021 is as follows:

Awards outstanding—December 31, 2020

2 unchanged sentences

Awards forfeited

Awards outstanding—March 31, 2021

Changes in SARs granted under the 2017 Plan for the three months ended March 31, 2021 is as follows:

Awards outstanding—June 30, 2021

Changes in SARs granted under the 2017 Plan for the three months ended June 30, 2021 is as follows:

Awards outstanding—December 31, 2020

2 unchanged sentences

Awards forfeited

Awards outstanding—March 31, 2021

Changes in RSUs granted under the 2020 Plan for the three months ended March 31, 2021 is as follows:

Awards outstanding—June 30, 2021

Changes in RSUs granted under the 2020 Plan for the three months ended June 30, 2021 is as follows:

Awards outstanding—December 31, 2020

2 unchanged sentences

Awards forfeited

Awards outstanding—March 31, 2021

As of March 31, 2021 and December 31, 2020, stock awards issued under the 2017 and 2020 Plans of 1,143,791 and 987,538 common shares, respectively, were vested.

Awards outstanding—June 30, 2021

As of June 30, 2021 and December 31, 2020, stock awards issued under the 2017 and 2020 Plans of 1,074,133 and 987,538 common shares, respectively, were vested.

The Company has elected early adoption of ASU No.

2016-09 to recognize forfeitures as they occur.

As a result of the adoption, for the three months ended March 31, 2020 the Company reversed $10 out of stock-based compensation previously recorded.

As a result of the adoption, for the six months ended June 30, 2020 the Company reversed $ 10 out of stock-based compensation previously recorded.

Value of Stock Options and SARs

8 unchanged sentences

The assumptions used to value the awards are summarized in the following table.

March 31, 2021

June 30, 2021

Dividend yield

6 unchanged sentences

The fair value of RSUs is equal to the value of the Company’s common stock on the grant date.

The weighted average per share fair value of awards issued under the 2017 Plan and 2020 Plan was $11.99 and $10.06 on March 31, 2021 and December 31, 2020, respectively.

Stock-based compensation expense, net was $3,251 and $475 for the three months ended March 31, 2021 and 2020, respectively, and was recorded in the condensed consolidated statements of operations and comprehensive loss in the following line items:

For the Three Months Ended March 31,

The weighted average per share fair value of awards issued under the 2017 Plan and 2020 Plan was $ 12.24 and $ 10.06 on June 30, 2021 and December 31, 2020, respectively.

Stock-based compensation expense, net for the three and six months ended June 30, 2021 and 2020, respectively, was recorded in the condensed consolidated statements of operations and comprehensive income (loss) in the following line items:

Three Months Ended June 30,

Six Months Ended June 30,

Research and development expense

5 unchanged sentences

Years Ending December 31,

2021 (excluding the three months ended March 31, 2021)

2021 (excluding the six months ended June 30, 2021)

Employee Stock Purchase Plan

The 2021 Employee Stock Purchase Plan (“ESPP”) was adopted by the Company’s Board of Directors on April 30, 2021.

The ESPP permits eligible employees to purchase shares of the Company’s common stock at a 15 % discount from the lesser of the fair market value per share of the Company’s common stock on the first day of the offering period or the fair market value of the Company’s common stock on the purchase date.

Funds are collected from employees through after-tax payroll deductions.

The total number of shares reserved for issuance under the ESPP was initially 629,805 .

It is intended that the ESPP meet the requirements for an “employee stock purchase plan” under Section 423 of the Internal Revenue Code.

For the three and six months ended June 30, 2021, there were no shares issued under the ESPP, respectively.

The discount on the ESPP for the three and six months ended June 30, 2021 is nominal.

In connection with the OrbiMed Loan, the Company issued Warrants to OrbiMed Royalty & Credit Opportunities, LP on January 9, 2020.

2 unchanged sentences

The unamortized debt discount as of March 31, 2021 and December 31, 2020 was $2,031 and $2,102, respectively, and is presented in the condensed consolidated balance sheet as a direct deduction from the carrying value of the debt.

During the three months ended March 31, 2020, a loss of $1,146 was recorded in other expense in the condensed consolidated statements of operations due to the change in the fair value of the warrant liability.

See Note 15 for the fair value of the Warrants.

The unamortized debt discount as of June 30, 2021 and December 31, 2020 was $ 1,957 and $ 2,102 , respectively, and is presented in the condensed consolidated balance sheet as a direct deduction from the carrying value of the debt.

During the three and six months ended June 30, 2020, a loss of $ 438 and $ 1,584 was recorded in other expense in the condensed consolidated statements of operations due to the change in the fair value of the warrant liability.

In connection with the IPO, the financial instrument underlying the warrants was converted from the Company’s Series C Preferred Stock to the Company’s Common Stock.

1 unchanged sentence

EARNINGS PER SHARE

For the three months ended March 31, 2020, the Company used the two-class method to compute net loss per common share because the Company has issued securities (convertible preferred stock) that entitle the holder to participate in dividends and earnings of the Company.

For the three and six months ended June 30, 2020, the Company used the two-class method to compute net loss per common share because the Company has issued securities (convertible preferred stock) that entitle the holder to participate in dividends and earnings of the Company.

Under this method, net income is reduced by the amount of any dividends earned and the accretion of convertible preferred stock to its redemption value during the period.

2 unchanged sentences

The two-class method is not applicable during periods with a net loss, as the holders of the convertible preferred stock have no obligation to fund losses.

The Company has reported a net loss for the three months ended March 31, 2020, and the weighted average number of shares utilized for basic and diluted net loss per share attributable to common stockholders are the same for these periods because all convertible preferred stock and stock options have been excluded from the computation of diluted weighted-average shares outstanding because such securities would have an antidilutive impact.

Additionally, the fair value adjustment for the warrants was excluded from the computation of diluted net loss for the three months ended March 31, 2020 since the additional income would have an antidilutive impact.

The Company has reported net income for the three months ended March 31, 2021.

Diluted net income (loss) per common share is computed under the treasury stock method by using the weighted average number of shares of common stock outstanding, plus, for periods with net income attributable to common stockholders, the potential dilutive effects of stock options, stock appreciation rights, restricted stock units and warrants.

The Company has reported a net loss for the three and six months ended June 30, 2020, and the weighted average number of shares utilized for basic and diluted net loss per share attributable to common stockholders are the same for these periods because all convertible preferred stock and stock options have been excluded from the computation of diluted weighted-average shares outstanding because such securities would have an antidilutive impact.

Additionally, the fair value adjustment for the warrants was excluded from the computation of diluted net loss for the three and six months ended June 30, 2020 since the additional income would have an antidilutive impact.

The Company has reported net income for the three and six months ended June 30, 2021.

In addition, the Company analyzes the potential dilutive effects of the outstanding convertible preferred stock under the ‘if-converted’ method when calculating diluted earnings per share, in which it is assumed that the outstanding convertible preferred stock converts into common stock at the beginning of the period or when issued if later.

1 unchanged sentence

The following table sets forth the computation of basic and diluted net loss per share:

For the Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Net income (loss)

6 unchanged sentences

Securities outstanding that are included in the computation above, utilizing the treasury stock method are as follows:

For the Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Stock options, SARs, and RSUs to purchase common stock

Potential common shares issuable upon conversion of preferred stock, exercise of stock options, and exercise of warrants that are excluded from the computation of diluted weighted-average shares outstanding as well as the warrant fair value adjustments excluded from the numerator are as follows:

For the Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Stock options, SARs, and RSUs to purchase common stock

1 unchanged sentence

Adjustment for warrants

FINANCIAL INSTRUMENTS

The Company primarily applies the market approach to determine the fair value of financial instruments that are measured at fair value on a recurring basis.

There were no changes to its valuation techniques used to determine the fair value of financial instruments during the three months ended March 31, 2021.

The Company’s financial assets and liabilities which are measured at fair value on a recurring basis were comprised of cash, cash equivalents, and restricted cash of $141,919 and $229,381 as of March 31, 2021 and December 31, 2020, respectively, based on Level 1 inputs.

The Company estimates the fair value of the warrant liability using the Black-Scholes option-pricing model at each balance sheet date or when specific events occur.

As discussed in Note 13, in connection with the Company’s IPO the warrant fair value was updated on August 19, 2020 with the change in fair value recorded in current period earnings as other expense in the condensed consolidated statement of operations and reclassified to equity.

During the three months ended March 31, 2020, a loss of $1,146 was recorded in general and administrative expense in the condensed consolidated statements of operations due to the change in the fair value of the warrant liability.

RELATED-PARTY TRANSACTIONS

2 unchanged sentences

In addition, the Chairman of the Company’s board of directors was the President and owner of the entity.

For the three months ended March 31, 2021 and 2020, respectively, the Company incurred $71 and $1,730, respectively, in management fee expense and other expenses to this related party, which are included in general and administrative expense in the condensed consolidated statements of operations and comprehensive loss.

The Company incurred $ 71 and $ 1,744 for the three months ended June 30, 2021 and 2020, respectively, and $ 142 and $ 3,474 for the six months ended June 30, 2021 and 2020, respectively, in management fee expense and other expenses to this related party, which are included in general and

administrative expense in the condensed consolidated statements of operations and comprehensive loss.

The Company terminated the Management Services Agreement upon the consummation of its IPO.

The Company is also party to a right of use agreement with the related party whereby it has access to and the right to use certain office space leased by the related party in Chicago, Illinois .

In addition, the Company had participated in certain transactions with separate related parties that also share common ownership with the Company, primarily related to combined employee health plans.

As of March 31, 2021 and December 31, 2020, respectively, the amounts from related parties included in prepaid expenses and other assets was $23 and $1, respectively.

In addition, the Company had participate d in certain transactions with separate related parties that also share common ownership with the Company, primarily related to combined employee health plans.

As of June 30 , 2021 and Dec ember 3 1 , 2020 the amounts due to related parties included in current liabilities was $ 0 and $ 0 , respectively, and the amount in cluded in prepaid expenses and other assets was $ 0 and $ 1 , respectively.

SUBSEQUENT EVENTS

On August 9, 2021, the Company entered into a Credit Agreement (the “New Credit Facility”) with Blackstone Alternative Credit Advisors LP and the other lenders party thereto from time to time and Wilmington Trust, National Association , as administrative agent, that provides for (i) a senior secured term loan facility in an aggregate original principal amount of $ 200,000 and (b) a senior secured delayed draw term loan facility in an aggregate principal amount up to $ 100,000 .

In connection with the New Credit Facility, on August 9, 2021, the Company also sold 1,048,951 shares of the Company’s common stock at a price per share of $ 28.60 for gross proceeds of $ 30,000 .

The OrbiMed Loan was repaid in full and all commitments thereunder were terminated on August 9, 2021 in connection with the execution of the New Credit Facility .

In connection with the payment of the OrbiMed Loan, we paid an exit fee of 7.0 % and a repayment premium of 4.0 % of the principal amount of the OrbiMed Loan repaid.

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