What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-11-14 compared with 2022-08-05 · 67 added, 81 removed, 230 unchanged (39% of the section changed)

25 unchanged sentences

Since our inception in 2006, we have devoted substantially all our resources to research and development, raising capital, building our management team and building our intellectual property portfolio.

To date, we have financed our

operations primarily through sales of our common stock, Series A convertible preferred stock and warrants, warrant exercises, the issuance of convertible promissory notes, and the Paycheck Protection Program loan (“PPP loan”) that was forgiven in May 2021.

To date, we have financed our operations primarily through sales of our common stock, Series A convertible preferred stock and warrants, warrant exercises, the issuance of convertible promissory notes, and the Paycheck Protection Program loan (“PPP loan”) that was forgiven in May 2021.

In addition, in July 2020, the Company entered into an Other Transaction Authority for Prototype Agreement (“OTA Agreement”), with the Department of Defense (“DoD”) to fund the Company’s efforts in developing an antibody cocktail therapeutic to treat COVID-19.

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In May 2021, the Company and the DoD amended the OTA Agreement, pursuant to which the DoD award was increased from $13.3 million to $17.6 million.

As of June 30, 2022, the Company has received $17.4 million in expense reimbursement from the DoD under the OTA Agreement.

As of June 2022, the Company has transitioned into a clinical stage biopharmaceutical company as our Phase 1b study of IMM-BCP-01 in patients infected with SARS-CoV-2 is underway.

As of September 30, 2022, the Company has received $17.4 million in expense reimbursement from the DoD under the OTA Agreement.

To date, we have not generated any revenue from product sales and do not expect to generate revenue from the sale of products for the foreseeable future.

Since inception we have incurred significant operating losses.

Our net losses for the three months ended June 30, 2022 and 2021 were $8.9 million and $5.2 million, respectively, and $20.6 million and $9.1 million for the six months ended June 30, 2022 and 2021, respectively.

As of June 30, 2022, we had a cash balance of $34.6 million.

Our net losses for the three months ended September 30, 2022 and 2021 were $8.5 million and $7.7 million, respectively, and $29.1 million and $16.9 million for the nine months ended September 30, 2022 and 2021, respectively.

As of September 30, 2022, we had cash and cash equivalents of $27.1 million.

We expect to continue to incur losses for the foreseeable future.

We expect to continue to incur significant expenses and increasing operating losses in connection with ongoing research and development activities related to our portfolio of programs as we continue our preclinical and clinical development of our product candidates for IMM-ONC-01 and IMM-BCP-01, respectively.

We expect to continue to incur significant expenses and increasing operating losses in connection with ongoing research and development activities related to our portfolio of programs as we continue development of our product candidates, IMM-ONC-01 and IMM-BCP-01, respectively.

We also plan to perform research activities as we seek to discover and develop additional product candidates;

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As a result of these anticipated expenditures and potential unanticipated expenditures, we will need substantial additional financing to support our continuing operations and pursue our growth strategy.

Until such time as we generate

significant revenue from product sales, if ever, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements.

Until such time as we generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of any stockholder will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our stockholders.

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The inability to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy.

Through June 30, 2022, we raised an aggregate of $125.1 million in gross proceeds from sales of our common stock, Series A convertible preferred stock and warrants, warrant and stock option exercises, the issuance of convertible promissory notes, and the PPP loan.

On October 1, 2021, we entered into an Open Market Sale Agreement (“ATM Agreement”) with Jefferies Group LLC, which provides that, upon the terms and subject to the conditions and limitations in the ATM Agreement, the Company may elect, from time to time, to offer and sell common shares having an aggregate offering price of up to $75.0 million through Jefferies Group LLC acting as sales agent.

The Company has not yet sold any shares under the ATM Agreement.

We expect that our cash as of June 30, 2022 will be sufficient to fund our operations at least 12 months from the filing date of this Quarterly Report on Form 10-Q, including our planned Phase 1b studies for IMM-BCP-01 and IMM-ONC-01.

Through September 30, 2022, we raised an aggregate of $125.1 million in gross proceeds from sales of our common stock, Series A convertible preferred stock and warrants, warrant and stock option exercises, the issuance of convertible promissory notes, and the PPP loan.

On October 1, 2021, we entered into an Open Market Sale Agreement (“ATM Agreement”) with Jefferies Group LLC, which provides that, upon the terms and subject to the conditions and limitations in the ATM Agreement, we may elect, from time to time, to offer and sell shares of common stock under our existing shelf registration statement having an aggregate offering price of up to $75.0 million through Jefferies Group LLC acting as sales agent.

The Company has not yet sold any shares under the ATM Agreement or the shelf registration statement.

We expect that our cash as of September 30, 2022 will be sufficient to fund our operations at least 12 months from the filing date of this Quarterly Report on Form 10-Q, including our planned development activities for IMM-BCP-01 and IMM-ONC-01.

We have based these estimates on assumptions that may prove to be imprecise, and we may exhaust our available capital resources sooner than we currently expect.

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SARS-CoV-2 (“IMM-BCP-01”)

We are actively developing an antibody cocktail, comprising a combination of three effective anti-viral antibodies derived from the B cells of COVID-19 patients that exhibit high neutralizing titers.

We are actively developing an antibody cocktail derived from the B cells of COVID-19 patients who exhibited high neutralizing titers.

IMM-BCP-01 targets non-overlapping regions of the Spike protein of SARS-CoV-2 which include highly conserved, subdominant epitopes.

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If successful in clinical testing, we expect that our antibody cocktail product candidate could be used both as a treatment for individuals who have contracted SARS-CoV-2 and as a prophylactic to offer protection against the virus for individuals who are at risk of contracting SARS-CoV-2.

We are conducting this program in collaboration with the DoD, which has asserted that this platform may be of strategic importance, due to its potential use in the current COVID-19 pandemic as well as in future viral outbreaks.

We are conducting this program in collaboration with the DoD.

The IMM-BCP-01 program is broadly focused on the emerging variants of SARS-CoV-2.

IMM-BCP-01 retains neutralization activity, in preclinical testing, against the Omicron variant and its sub-lineages, including the BA.4/.5 variants, which account for the majority of current cases.

IMM-BCP-01 retains neutralization activity, in preclinical testing, against the Omicron variant and its dominant sub-lineages, including the BA.4/.5 variants which account for the majority of current cases.

We submitted an IND application for the IMM-BCP-01 program to the U.S.

FDA in November 2021.

Following a brief clinical hold, the U.S.

FDA communicated that the clinical study can be initiated for our antibody cocktail for the treatment of SARS-CoV-2.

Our Phase 1b study of IMM-BCP-01 in patients infected with SARS-CoV-2 is underway with topline data expected in the second half of 2022.

FDA in November 2021 and initiated the Phase 1b study of IMM-BCP-01 in patients infected with SARS-CoV-2 in June 2022 .

We expect to obtain topline safety and PK data by the end of the year and announce those results in the beginning of 2023.

Oncology (“IMM-ONC-01”)

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IL-38 was identified as the target of an antibody isolated from a hybridoma library generated from the memory B cells of a patient with squamous head and neck cancer.

Query of public and proprietary databases of cancer gene expression revealed over-expression of IL-38 in multiple solid tumors.

Query of public and proprietary (Tempus) databases of cancer gene expression revealed over-expression of IL-38 in multiple solid tumors.

Further, a correlation with low levels of tumor-infiltrating immune effector cells, a hallmark of immune suppression in some of these patients’ tumors, and high IL-38 expression was also observed, suggesting a role for IL-38 as an immune checkpoint.

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We believe that this information could potentially guide patient selection for early clinical testing and may improve overall probability of demonstrating clinical utility, thereby improving the probability of clinical success.

We plan to submit our IND application for the IMM-ONC-01 program in the second half of 2022.

We plan to submit our IND application for the IMM-ONC-01 program by mid-2023.

Other programs and platform

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We intend to continue to invest in this platform, to evaluate novel antibody-target pairs and to develop a pipeline of antibody therapeutics as single agents or in combination with other therapeutics or technologies to yield product candidates, such as Antibody-Drug Conjugates (“ADCs”).

We believe our discovery engine has the ability to advance one to two programs into IND-enabling studies per year.

We believe our discovery engine has the ability to generate one to two development candidates per year.

We also intend to continue to explore additional strategic partnerships and collaborations to expand our opportunities and capabilities.

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COVID-19 pandemic

In response to the COVID-19 pandemic, we have taken, and continue to take, proactive measures to prioritize health and safety, including of our employees and other personnel.

These measures included establishing a work-from-home policy for our employees, other than those performing or supporting business-critical operations and implementing stringent safety measures designed to comply with applicable federal, state and local guidelines.

We have successfully implemented a back-to-work policy;

our approach to transitioning back to the office was tailored to the role of each team member and evolves as the specific conditions associated with the COVID-19 pandemic continue to evolve.

We will continue to monitor guidance and regulations from the Centers for Disease Control and local health authorities and will adjust our onsite rules and policies in accordance with this guidance and regulations.

We have also taken, and continue to take, proactive measures to maintain business continuity in the face of the COVID-19 pandemic.

Communication throughout our organization has remained active during the pandemic.

addition, as part of our vendor management processes, we have ongoing dialogues with third-party service providers, which are intended to ensure that they continue to meet our criteria for business continuity.

The effect of the ongoing COVID-19 pandemic on our projected research and development timelines and activities is uncertain.

Notwithstanding the measures taken, the future impact of COVID-19, including its variants, on our industry, the healthcare system and our current and future operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, including increases in inflation, supply chain disruption, labor shortage and shifting demand, among others.

The ongoing COVID-19 pandemic is evolving, and to date has led to the implementation of various responses from time to time, including government-imposed quarantines, travel restrictions, and other public health safety measures.

We have and will continue to closely monitor the spread of COVID-19 and its variants, and plan to continue taking proactive measures to identify and mitigate the adverse impacts on, and risks to, our business posed by its spread and actions taken by governmental and health authorities to address the ongoing COVID-19 pandemic.

We expect to continue to take actions as may be required or recommended by government authorities or as we determine are in the best interests of the health and safety of our employees and other personnel in light of COVID-19 and variants thereof.

The extent to which COVID-19 ultimately impacts our business, results of operations or financial condition will depend on future developments, which, despite progress in vaccination efforts, remain highly uncertain and cannot be predicted with confidence, such as the duration of the COVID-19 pandemic, new strains of the virus, including any future variants that may emerge, which may impact rates of infection and vaccination efforts, developments or perceptions regarding the

safety of vaccines, new information that may emerge concerning the severity of COVID-19, the direct and indirect economic effects of the pandemic and containment measures, including increases in inflation, supply chain disruption, labor shortage and shifting demand, and any additional preventative and protective actions taken to contain the pandemic or treat its impact, among others.

The estimates of the impact on the Company’s business may change based on new information that may emerge concerning COVID-19 and the actions to contain it or treat its impact and the economic impact on local, regional, national and international markets.

See “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 28, 2022 and elsewhere in our filings with the SEC for a discussion of the potential adverse impact of COVID-19 on our business, results of operations and financial condition.

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We expect that our research and development expenses will increase substantially in connection with our planned preclinical and clinical development activities.

In July 2020, we entered into the OTA Agreement with the DoD to fund our efforts in developing Biosynthetic Convalescent Plasma (“BCP”) to treat COVID-19.

In July 2020, we entered into the OTA Agreement with the DoD to fund the development of IMM-BCP-01 to treat COVID-19.

The OTA Agreement was modified in May 2021 to increase such funding.

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General and administrative expenses consist primarily of salaries and other related costs, including share-based compensation for personnel in our executive, business development, and administrative functions.

General and administrative expenses also include legal fees relating to intellectual property and corporate matters, professional fees for accounting, auditing, tax and consulting services, insurance costs, travel, direct and allocated facility related expenses and other operating costs.

administrative expenses also include legal fees relating to intellectual property and corporate matters, professional fees for accounting, auditing, tax and consulting services, insurance costs, travel, direct and allocated facility related expenses and other operating costs.

We anticipate that our general and administrative expenses will increase in the future to support increased and progressed research and development activities.

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Accordingly, we cannot fully predict the extent to which our business and results of operations will be affected by the pandemic.

Comparison of the three and six months ended June 30, 2022 and 2021

Three Months Ended June 30,

Six Months Ended June 30,

Comparison of the three and nine months ended September 30, 2022 and 2021

Three Months Ended September 30,

Nine Months Ended September 30,

Operating expenses:

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Interest income (expense), net

Three months ended June 30, 2022 and 2021

Three months ended September 30, 2022 and 2021

Research and development expenses

Research and development expenses were $5.7 million and $3.2 million, net of DoD reimbursement for the three months ended June 30, 2022 and 2021, respectively.

Research and development expenses increased by $2.5 million for the three months ended June 30, 2022.

This increase is primarily due to a $4.1 million reduction of contra-research and development expense as a result of a reduction in BCP-01 program spending and reimbursable related expenses under the DoD agreement during the three months ended June 30, 2022.

Contra-research and development expenses offsets the expenses recognized in the period

for the DoD Agreement.

Personnel-related costs increased by $0.2 million due to an increase in headcount and stock-based compensation.

These increases in personnel-related costs were offset by $0.6 million in contra-expense to personnel related costs relating to the CARES Act employee retention credit.

In addition, outsourced research and raw materials decreased by $1.1 million and facility related costs decreased by $0.1 million for the three months ended June 30, 2022.

Research and development expenses were $5.2 million and $4.5 million, net of DoD reimbursement for the three months ended September 30, 2022 and 2021, respectively.

Research and development expenses increased by $0.7 million for the three months ended September 30, 2022.

This increase is primarily due to a $5.3 million reduction of contra-research and development expense as a result of a reduction in BCP-01 program spending and reimbursable related expenses under the DoD agreement during the three months ended September 30, 2022.

Contra-research and development expenses offsets the expenses recognized in the period for the DoD agreement.

Personnel-related costs increased by $0.2 million due to an increase in headcount and stock-based compensation offset by a $4.7 million decrease in outsourced research and materials and a $0.1 million decrease in facility related costs.

Research and development expenses are expected to increase in the future as we continue our current research programs, initiate new research programs, continue our preclinical development of product candidates and conduct current and future clinical trials for our programs and product candidates.

General and administrative expenses

General and administrative expenses increased by $0.7 million to $3.2 million for the three months ended June 30, 2022 from $2.5 million for the three months ended June 30, 2021.

The increase was primarily a result of $0.9 million increase in personnel-related costs due to an increase in headcount and stock-based compensation offset by $0.2 million in contra-expense to personnel related costs relating to the CARES Act employee retention credit.

General and administrative expenses increased by $0.1 million to $3.3 million for the three months ended September 30, 2022 from $3.2 million for the three months ended September 30, 2021.

The increase was primarily a result of a $0.3 million increase in personnel-related costs due to an increase in headcount and stock-based compensation offset by a $0.2 million decrease in professional fees, general fees and facility related costs.

Interest income (expense), net

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Interest income consists of interest earned on our cash balances held with financial institutions.

Other income for the three months ended June 30, 2021 consists of forgiveness of the PPP Loan.

Six months ended June 30, 2022 and 2021

Nine months ended September 30, 2022 and 2021

Research and development expenses

Research and development expenses were $13.8 million and $5.2 million, net of DoD reimbursement for the six months ended June 30, 2022 and 2021, respectively.

Research and development expenses increased by $8.6 million for the six months ended June 30, 2022.

This increase is primarily due to a $7.4 million reduction of contra-research and development expense as a result of a reduction in BCP-01 program spending and reimbursable related expenses under the DoD agreement during the three months ended June 30, 2022.

Research and development expenses were $19.0 million and $9.7 million, net of DoD reimbursement for the nine months ended September 30, 2022 and 2021, respectively.

Research and development expenses increased by $9.3 million for the nine months ended September 30, 2022.

This increase is primarily due to a $12.7 million reduction of contra-research and development expense as a result of a reduction in BCP-01 program spending and reimbursable related expenses under the DoD agreement during the nine months ended September 30, 2022.

Contra-research and development expenses offsets the expenses recognized in the period for the DoD agreement.

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These increases in personnel-related costs were offset by $0.6 million in contra-expense to personnel related costs relating to the CARES Act employee retention credit.

In addition, outsourced research and raw materials increased by $0.8 million offset by $0.2 million decrease in facility related costs.

In addition, outsourced research and raw materials decreased by $3.9 million and facility related costs decreased by $0.3 million.

General and administrative expenses

General and administrative expenses increased by $2.4 million to $6.8 million for the six months ended June 30, 2022 from $4.4 million for the three months ended June 30, 2021.

General and administrative expenses increased by $2.5 million to $10.1 million for the nine months ended September 30, 2022 from $7.6 million for the nine months ended September 30, 2021.

The increase was primarily a result of a $2.5 million increase in personnel-related costs due to an increase in headcount and stock-based compensation offset by $0.2 million in contra-expense to personnel related costs relating to the CARES Act employee retention credit.

In addition, professional fees and other general expenses increased by $0.3 million for the six months ended June 30, 2022.

In addition, professional fees and other general expenses increased by $0.2 million for the nine months ended September 30, 2022.

Interest income (expense), net

Interest expense consists of interest related to equipment loan payables.

Interest expense consists of interest related to loan payables.

Interest income consists of interest earned on our cash balances held with financial institutions.

Other income for the six months ended June 30, 2021 consists of forgiveness of the PPP Loan.

Other income for the nine months ended September 30, 2021 consists of forgiveness of the PPP Loan.

Liquidity and capital resources

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We expect to incur significant expenses and operating losses for the foreseeable future as continue our preclinical development of product candidates and conduct current and future clinical trials for our product candidates.

As of June 30, 2022, we had $34.6 million in cash.

As of September 30, 2022, we had $27.1 million in cash and cash equivalents.

On October 1, 2021, we entered into an Open Market Sale Agreement (“ATM Agreement”) with Jefferies Group LLC, which provides that, upon the terms and subject to the conditions and limitations in the ATM Agreement, we may elect, from time to time, to offer and sell common shares under the registration statement having an aggregate offering price of up to $75.0 million through Jefferies Group LLC acting as sales agent.

We filed a shelf registration statement on Form S-3, which was declared effective by the SEC on October 14, 2021, pursuant to which we may issue from time-to-time securities with an aggregate value of up to $200.0 million.

In October 2021, we entered into an Open Market Sale Agreement (“ATM Agreement”) with Jefferies Group LLC, which provides that, upon the terms and subject to the conditions and limitations in the ATM Agreement, we may elect, from time to time, to offer and sell common shares under the registration statement having an aggregate offering price of up to $75.0 million through Jefferies Group LLC acting as sales agent.

We have not yet sold any shares under the ATM Agreement.

The Company has not yet sold any shares under the ATM Agreement or the shelf registration statement.

We will need to raise additional capital before we exhaust our current cash to continue to fund our research and development, including our plans for clinical and preclinical trials and new product development, as well as to fund operations.

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We can give no assurances that we will be able to secure such additional sources of funds to support our operations, or, if such funds are available to us, that such additional financing will be sufficient to meet our needs.

The following table summarizes our sources and uses of cash for the six months ended June 30, 2022 and 2021:

Six Months Ended June 30,

The following table summarizes our sources and uses of cash for the nine months ended September 30, 2022 and 2021:

Nine Months Ended September 30,

(in thousands)

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Cash provided by financing activities

Net increase (decrease) in cash and restricted cash

Net (decrease) increase in cash and cash equivalents and restricted cash

Operating activities

Net cash used in operating activities for the six months ended June 30, 2022 was $14.4 million, consisting primarily of our net loss of $20.6 million and decreases of accrued expenses and other liabilities of $3.3 million, offset by net noncash charges of $2.8 million for stock compensation expense, depreciation and amortization of right-of-use asset, decreases in prepaid expenses and other assets of $4.5 million, and increases in accounts payable of $2.2 million.

Net cash used in operating activities for the six months ended June 30, 2021 was $7.3 million, consisting primarily of our net loss of $9.1 million and forgiveness of the PPP loan of $0.5 million, offset by noncash charges of $1.4 million for stock compensation expense and depreciation and amortization, increases in accrued expenses and other liabilities of

$0.3 million, increases in accounts payable of $0.5 million, and decreases in prepaid expenses and other assets of $0.1 million.

Net cash used in operating activities for the nine months ended September 30, 2022 was $22.0 million, consisting primarily of our net loss of $29.1 million and net decreases of accrued expenses and other liabilities and accounts payable of $2.4 million, offset by net noncash charges of $4.3 million for stock compensation expense, depreciation and amortization of right-of-use asset and decreases in prepaid expenses and other assets of $5.2 million.

Net cash used in operating activities for the nine months ended September 30, 2021 was $11.4 million, consisting primarily of our net loss of $16.9 million, increases in prepaid expenses and other assets of $1.8 million, and forgiveness of PPP Loan of $0.5 million, offset by noncash charges of $2.9 million for stock compensation expense, depreciation and amortization, and increases in accrued expenses and other liabilities of $2.8 million and accounts payable of $2.1 million.

Investing activities

During the six months ended June 30, 2022 and 2021, we used $0.2 million and $0.1 million, respectively, for the purchase of property and equipment.

During the nine months ended September 30, 2022 and 2021, we used $0.2 million and $0.1 million, respectively, for the purchase of property and equipment.

Financing activities

During the six months ended June 30, 2022, financing activities provided $0.1 million from exercise of stock options.

During the six months ended June 30, 2021, financing activities provided $27.3 million from proceeds from the sale of common stock and common stock warrants, the exercise of common stock warrants and stock options, offset by the payment of issuance costs, and for payments related to our equipment loan.

During the nine months ended September 30, 2022, financing activities provided $32,000 from exercise of stock options.

During the nine months ended September 30, 2021, financing activities provided $28.0 million of proceeds from the sale of common stock and common stock warrants, the exercise of common stock warrants and stock options, offset by the payment of issuance costs, and for payments related to our equipment loan.

Funding requirements

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● continue to operate as a public company.

We expect that our existing cash at June 30, 2022 will enable us to fund our current and planned operating expenses and capital expenditures at least 12 months from the filing date of this Quarterly Report on Form 10-Q.

The Company will need additional financing to support its continuing operations and pursue its development strategy.

We have based

these estimates on assumptions that may prove to be imprecise, and we may exhaust our available capital resources sooner that we currently expect.

We expect that our existing cash at September 30, 2022 will enable us to fund our current and planned operating expenses and capital expenditures at least 12 months from the filing date of this Quarterly Report on Form 10-Q.

The Company will need additional financing to support its continuing operations and pursue its research and development strategy.

We have based these estimates on assumptions that may prove to be imprecise, and we may exhaust our available capital resources sooner than we currently expect.

Because of the numerous risks and uncertainties associated with the development of our programs, we are unable to estimate the amounts of increased capital outlays and operating expenses associated with completing the research and development of our product candidates.

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If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our research and development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Critical accounting policies and use of estimates

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We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

We evaluate our estimates and assumptions on an ongoing basis.

We evaluate our

estimates and assumptions on an ongoing basis.

Our actual results may differ from these estimates under different assumptions or conditions.

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2016-02, Leases (“Topic 842”) (“ASU 2016-02”), which establishes ASC 842 and supersedes the lease accounting guidance under ASC 840.

The standard generally requires lessees to recognize operating and finance lease liabilities and corresponding right-of-use

(“ROU”) assets on the balance sheet and provide enhanced disclosures on the amount, timing, and uncertainty of cash flows arising from lease arrangements.

The standard generally requires lessees to recognize operating and finance lease liabilities and corresponding right-of-use (“ROU”) assets on the condensed balance sheet and provide enhanced disclosures on the amount, timing, and uncertainty of cash flows arising from lease arrangements.

The Company adopted ASC 842 using the modified retrospective approach.

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As of January 1, 2022, the effective date, the Company identified one operating lease arrangement relating to the Company’s headquarter facility and a short-term lease relating to laboratory equipment.

The adoption of ASC 842 resulted in a recognition of an ROU asset and lease liability of $0.2 million on the Company’s balance sheet relating to the leases as of January 1, 2022.

The adoption of ASC 842

resulted in a recognition of an ROU asset and lease liability of $0.2 million on the Company’s condensed balance sheet relating to the leases as of January 1, 2022.

The adoption of the standard did not have a material effect on the Company’s condensed statements of operations and condensed statements of cash flows.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis