What changed in this filing

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Item 1. Financial Statements

2021-08-12 compared with 2021-05-13 · 88 added, 81 removed, 544 unchanged (24% of the section changed)

25 unchanged sentences

no shares issued

and outstanding as of March 31, 2021 and December 31, 2020

and outstanding as of June 30, 2021 and December 31, 2020

Common stock, $ 0.0001 par value;

1 unchanged sentence

43,055,112 and

15,565,380 shares issued and outstanding as of March 31, 2021 and December 31,

15,565,380 shares issued and outstanding as of June 30, 2021 and December 31,

2020, respectively

7 unchanged sentences

(In thousands, except share and per share amounts)

Three Months Ended March 31,

Three Months Ended

Six Months Ended

Operating expenses:

8 unchanged sentences

Change in fair value of warrant liability

Other expense

Net loss and comprehensive loss

24 unchanged sentences

Business Combination (Note 3)

Issuance of common stock upon exercise of

stock options

Vesting of restricted common stock

Stock-based compensation expense

Balance at June 30, 2020, effect of

Business Combination (Note 3)

Convertible Preferred Stock

18 unchanged sentences

Balance at March 31, 2021

Issuance of common stock upon exercise of

stock options

Stock-based compensation expense

Balance at June 30, 2021

The accompanying notes are an integral part of the financial statements.

2 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

26 unchanged sentences

Exercise of warrants

Unpaid issuance costs in accounts payable and accrued expenses and other current liabilities

Property and equipment purchases included in accounts payable and accrued expenses

The accompanying notes are an integral part of the financial statements.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share amounts)

Nature of the business

2 unchanged sentences

The Company was founded on March 3, 2015 and is currently located in Cambridge, Massachusetts.

Unless the context otherwise requires, references in these notes to “Gemini”, “the Company”, “we”, “us” and “our” and any related terms are intended to mean the post-Business Combination Gemini Therapeutics, Inc.

and its consolidated subsidiary.

Business Combination Transaction

Unless the context otherwise requires, references in these notes to “Gemini”, “the Company”, “we”, “us” and “our” and any related terms are intended to mean Gemini Therapeutics, Inc.

and its consolidated subsidiary following the Business Combination (as defined below).

Since its inception, the Company has devoted substantially all its efforts and financial resources to organizing and staffing the Company, business planning, raising capital, discovering product candidates and securing related intellectual property rights and conducting research and development activities for our product candidates.

The Company’s lead product candidate, GEM103, is currently in Phase 2a clinical development and its other product candidates and research initiatives are in preclinical or earlier stages of development.

On February 5, 2021 (the “Closing Date”), FS Development Corporation, a Delaware corporation (“FSDC”), consummated the previously announced business combination (the “Business Combination”) pursuant to the terms of the Agreement and Plan of Merger, dated as of October 15, 2020 (as amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among Gemini Therapeutics, Inc., a Delaware corporation (“Old Gemini”), Shareholder Representative Services LLC, a Colorado limited liability company solely in its capacity as the representative, agent and attorney-in-fact of the Company Securityholders (the “Stockholders’ Representative”), FSDC and FSG Merger Sub Inc., a Delaware corporation (“Merger Sub”).

6 unchanged sentences

Risks and Liquidity

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, uncertainty of product development and commercialization, lack of marketing and sales history, development by its competitors of new technological innovations, dependence on key personnel, market acceptance of products, product liability, protection of proprietary technology, ability to raise additional financing and compliance with government regulations.

If the Company does not successfully commercialize any of its product candidates, it will be unable to generate recurring product revenue or achieve profitability.

5 unchanged sentences

Prior to the Business Combination, the Company primarily financed its operations through the sale of convertible preferred stock, borrowings under convertible promissory notes and borrowings under loan agreements.

The Company believes that its $185.0 million of cash and cash equivalents will enable it to fund its planned operations for at least twelve months from the issuance date of these condensed consolidated financial statements, though the Company may pursue additional cash resources through public or private equity

or debt financings .

The Company believes that its $ 167.5 million of cash and cash equivalents as of June 30, 2021 will enable it to fund its planned operations for at least twelve months from the issuance date of these condensed consolidated financial statements, though the Company may pursue additional cash resources through public or private equity or debt financings.

Management’s expectations with respect to its ability to fund current planned operations is based on estimates that are subject to risks and uncertainties.

2 unchanged sentences

Impact of the COVID-19 Pandemic

In March 2020, the WHO declared the COVID-19 outbreak a pandemic.

The COVID-19 outbreak and government measures taken in response have had a significant impact, both direct and indirect, on businesses and commerce, as worker shortages have occurred;

In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic.

The COVID-19 outbreak and the increased prevalence of variants of the virus, and government measures taken in response, have had a significant impact, both direct and indirect, on businesses and commerce, as worker shortages have occurred;

supply chains have been disrupted;

1 unchanged sentence

and demand for certain goods and services, such as medical services and supplies, has spiked, while demand for other goods and services, such as travel, has fallen.

The COVID-19 pandemic continues to present significant business challenges in 2021, and the future progression of the outbreak and its effects on the Company’s business and operations are uncertain.

The Company and its third-party contract manufacturers (“CMOs”), contract research organizations (“CROs”) and clinical sites may experience disruptions in supply of product candidates and/or procurement of items that are essential for the Company’s research and development activities, including raw materials used in the manufacturing of its product candidates, medical and laboratory supplies used in its clinical trials or preclinical studies or animals that are used for preclinical testing, in each case, for which there may be shortages because of ongoing efforts to address the outbreak.

The COVID-19 pandemic has resulted in and will likely continue to result in significant disruptions to the global economy, and businesses and capital markets around the world.

The Company cannot predict the future progression or full impact of the outbreak and its effects on the Company’s business and operations.

The Company and its third-party contract manufacturers (“CMOs”), contract research organizations (“CROs”) and clinical sites have experienced and may continue to experience disruptions in supply of product candidates and/or procurement of items that are essential for the Company’s research and development activities, including raw materials used in the manufacturing of its product candidates, medical and laboratory supplies used in its clinical trials or preclinical studies or animals that are used for preclinical testing, in each case, for which there may be shortages because of ongoing efforts to address the outbreak.

Additionally, the Company has enrolled, and will seek to enroll, patients in its clinical trials at sites located both in the United States and internationally.

Most of the Company’s clinical trial sites are in areas affected by COVID-19 and, as a result, its trials are being impacted.

Most of the Company’s clinical trial sites are in areas affected by COVID-19 and, as a result, its trials have been and may continue to be impacted.

The Company cannot predict how long or impactful these delays may be on its clinical trials.

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The Company has not incurred impairment losses in the carrying values of its assets as a result of the COVID-19 pandemic, and it is not aware of any specific related event or circumstance that would require it to revise its estimates reflected in these condensed consolidated financial statements.

Although the COVID-19 pandemic did not have a significant impact on the Company’s condensed consolidated financial results in the first quarter of 2021, the full extent to which the COVID-19 pandemic will impact the Company’s business, results of operations, financial condition and cash flows will depend on future developments that are highly uncertain, and the estimates of the impact on the Company’s business may change based on new information that may emerge concerning COVID-19, including the duration of the pandemic, any potential subsequent waves or strains of COVID-19 infection, the effectiveness, distribution and acceptance of COVID-19 vaccines and the actions to contain it or treat its impact and the economic impact on local, regional, national and international markets.

Although the COVID-19 pandemic did not have a significant impact on the Company’s condensed consolidated financial results in the second quarter of 2021, the full extent to which the COVID-19 pandemic will impact the Company’s business, results of operations, financial condition and cash flows will depend on future developments that are highly uncertain, and the estimates of the impact on the Company’s business may change based on new information that may emerge concerning COVID-19, including the duration of the pandemic, any potential subsequent waves or strains of COVID-19 infection, the effectiveness, distribution and acceptance of COVID-19 vaccines and the actions to contain it or treat its impact and the economic impact on local, regional, national and international markets.

Business Combination

2 unchanged sentences

In accordance with the terms and subject to the conditions of the Merger Agreement, at the effective time of the Merger, (i) all shares of Old Gemini’s Series B Preferred Stock (including shares of Series B Preferred Stock issued upon conversion of outstanding convertible promissory notes), Series A Preferred Stock and Common Stock (collectively, “Old Gemini Stock”) issued and outstanding immediately prior to the effective time of the Merger, whether vested or unvested, were converted into the right to receive their pro rata portion of the 17,942,274 shares of FSDC Class A Common Stock (the “Common Stock”) issued as Merger consideration (the “Merger Consideration”), provided that 2,150,000 shares of Common Stock are held in escrow for a period of 12 months from the Closing Date to satisfy any indemnification obligations of Old Gemini under the Merger Agreement;

(ii) each option exercisable for Old Gemini

Stock that was outstanding immediately prior to effective time of the Merger was assumed and continues in full force and effect on the same terms and conditions as were previously applicable to such options, subject to adjustments to exercise price and number of shares Common Stock issuable upon exercise based on the final conversion ratio calculated in accordance with the Merger Agreement, and (iii) 4,264,341 shares of Common Stock were reserved for issuance under the newly adopted 2021 Stock Option and Incentive Plan (the “2021 Plan”) .

(ii) each option exercisable for Old Gemini Stock that was outstanding immediately prior to effective time of the Merger was assumed and continues in full force and effect on the same terms and conditions as were previously applicable to such options, subject to adjustments to exercise price and number of shares Common Stock issuable upon exercise based on the final conversion ratio calculated in accordance with the Merger Agreement, and (iii) 4,264,341 shares of Common Stock were reserved for issuance under the newly adopted 2021 Stock Option and Incentive Plan (the “2021 Plan”).

The Company accounted for the Business Combination as a reverse recapitalization, which is the equivalent of Old Gemini issuing stock for the net assets of FSDC, accompanied by a recapitalization, with FSDC treated as the acquired company for accounting purposes.

The determination of FSDC as the “acquired” company for accounting purposes was primarily based on the fact that subsequent to the Business Combination, Gemini has a majority of the voting power of the combined company, Gemini will comprise all of the ongoing operations of the combined entity, a majority of the governing body of the combined company and Gemini’s senior management will comprise all of the senior management of the combined company.

The determination of FSDC as the “acquired” company for accounting purposes was primarily based on the fact that subsequent to the Business Combination, shareholders of Old Gemini prior to the Business Combination have a majority of the voting power of the combined company, the operations of Old Gemini will comprise all of the ongoing operations of the combined entity, and Old Gemini’s senior management will comprise all of the senior management of the combined company.

The net assets of FSDC were stated at historical cost with no goodwill or other intangible assets recorded.

Reported results from operations included herein prior to the Business Combination are those of Old Gemini.

The shares and corresponding capital amounts and loss per share related to Old Gemini’s outstanding convertible preferred stock and common stock prior to the Business Combination have been retroactively restated to reflect the conversion ratio established in the Merger Agreement (1.00 Old Gemini share for .2180 shares of Gemini, the “Conversion Ratio”).

In connection with the Business Combination, the Company incurred underwriting fees and other costs considered direct and incremental to the transaction totaling $21.0 million, consisting of legal, accounting, financial advisory and other professional fees.

These amounts are reflected within additional paid-in capital in the condensed consolidated balance sheet as of March 31, 2021.

The shares and corresponding capital amounts and loss per share related to Old Gemini’s outstanding convertible preferred stock and common stock prior to the Business Combination have been retroactively restated to reflect the conversion ratio established in the Merger Agreement (1.00 Old Gemini share for 0.2180 shares of the Company , the “ Conversion Ratio ”) .

In connection with the Business Combination, the Company incurred equity issuance costs and other costs considered direct and incremental to the transaction totaling $ 21.0 million, consisting of legal, accounting, financial advisory and other professional fees.

These amounts are reflected within additional paid-in capital in the condensed consolidated balance sheet as of June 30, 2021.

PIPE Financing

1 unchanged sentence

Summary of Net Proceeds

The following table summarizes the elements of the net proceeds from the Business Combination as of March 31, 2021 (in thousands):

The following table summarizes the elements of the net proceeds from the Business Combination as of June 30, 2021 (in thousands):

Cash - FSDC Trust Account and cash (net of redemptions)

Cash - PIPE Financing

Underwriting fees and other issuance costs paid prior to March 31, 2021

Proceeds from Business Combination, net of issuance costs paid per the Cash Flows

from Financing Activities

Other issuance costs included in accounts payable and accrued expenses and

other current liabilities

Equity issuance costs and other costs paid prior to June 30, 2021

Net proceeds from the Business Combination

8 unchanged sentences

Issuance of common stock upon exercise of warrants

Total shares of New Gemini common stock outstanding immediately following

Total shares of the Company's common stock outstanding immediately following

the Business Combination

6 unchanged sentences

In the opinion of management, all adjustments necessary for a fair statement of the financial information, which are of a normal and recurring nature, have been made for the interim periods reported.

Results of operations for the three months ended March 31, 2021 and 2020 are not necessarily indicative of the results for the entire fiscal year or any other period.

The condensed consolidated financial information for the three months ended March 31, 2021 and 2020 have been prepared on the same basis as and should be read in conjunction with Old Gemini’s audited financial statements and notes thereto for the year ended December 31, 2020 included the Company’s Form 8-K/A as filed with the SEC on March 29, 2021.

Results of operations for the three and six months ended June 30, 2021 and 2020 are not necessarily indicative of the results for the entire fiscal year or any other period.

The condensed consolidated financial information for the three and six months ended June 30, 2021 and 2020 have been prepared on the same basis as and should be read in conjunction with Old Gemini’s audited financial statements and notes thereto for the year ended December 31, 2020 included in the Company’s Form 8-K/A as filed with the SEC on March 29, 2021.

As a result of the Business Combination, the shares and corresponding capital amounts and loss per share related to Old Gemini’s outstanding convertible preferred stock and common stock prior to the Business Combination have been retroactively restated to reflect the Conversion Ratio established in the Merger Agreement.

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The objectives of the Company’s cash management policy are to safeguard and preserve funds to maintain liquidity sufficient to meet the Company’s cash flow requirements and to attain a market rate of return.

The Company’s cash equivalents consist of amounts invested in money market mutual funds as of March 31, 2021 and December 31, 2020.

The Company’s cash equivalents consist of amounts invested in money market mutual funds as of June 30, 2021 and December 31, 2020.

Restricted cash

Restricted cash amounted to $323 thousand as of March 31, 2021 and December 31, 2020, which consists of $100 thousand to collateralize the Company’s credit card and $223 thousand to collateralize its irrevocable standby letter of credit for its facility lease arrangement.

Restricted cash amounted to $ 323 thousand as of June 30, 2021 and December 31, 2020, which consists of $ 100 thousand to collateralize the Company’s credit card and $ 223 thousand to collateralize its irrevocable standby letter of credit for its facility lease arrangement.

The letter of credit is in the name of the landlord and is required to fulfill lease requirements in the event the Company should default on its lease obligation.

A reconciliation of the cash and cash equivalents and restricted cash as presented in the Company’s balance sheets to the Company’s statements of cash flows is as follows:

A reconciliation of the cash and cash equivalents and restricted cash as presented in the Company’s balance sheets to the Company’s statements of cash flows is as follows (in thousands):

Cash and cash equivalents

33 unchanged sentences

Should the in-process equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the condensed consolidated statements of operations and comprehensive loss.

The Company had no deferred offering costs as of March 31, 2021.

The Company had no deferred offering costs as of June 30, 2021.

As of December 31, 2020, the Company recorded deferred offering costs of $ 2.6 million related to the costs incurred in connection with the Business Combination.

10 unchanged sentences

The carrying values of the Company’s prepaid expenses and other current assets and accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities.

The carrying value of the Company’s term loan as of March 31, 2021 and December 31, 2020 (see Note 7) approximated fair value based on interest rates currently available to the Company.

The carrying value of the Company’s term loan as of June 30, 2021 and December 31, 2020 (see Note 7) approximated fair value based on interest rates currently available to the Company.

Debt issuance costs

2 unchanged sentences

In February 2019, concurrent with the Company’s term loan agreement (see Note 7), the Company issued warrants to purchase shares of Old Gemini’s Series A preferred stock.

The Company accounts for the warrants to purchase Series A preferred stock as a liability as these warrants are freestanding financial instruments that may require the Company to transfer assets upon exercise.

The Company accounted for the warrants to purchase Series A preferred stock as a liability as these warrants were freestanding financial instruments that may have required the Company to transfer assets upon exercise.

The fair value of the warrants classified as liabilities is estimated using the Black-Scholes Option Pricing Model and adjusted to fair value at the end of each reporting period.

78 unchanged sentences

In periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, since dilutive common shares are not assumed to be outstanding if their effect is anti-dilutive.

The Company reported a net loss attributable to common stockholders for the three months ended March 31, 2021 and 2020.

The Company reported a net loss attributable to common stockholders for the three and six months ended June 30, 2021 and 2020.

Emerging growth company status

Following the closing of the Business Combination, the Company is an “emerging growth company” (“EGC”), as defined in the Jumpstart Our Business Startups Act (“JOBS Act”), and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs.

The Company qualifies as an “emerging growth company” (“EGC”), as defined in the Jumpstart Our Business Startups Act (“JOBS Act”), and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs.

The Company may take advantage of these exemptions until it is no longer an EGC under Section 107 of the JOBS Act, which provides that an EGC can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards.

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Recently adopted accounting pronouncements

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement , (“ASU 2018-13”).

The new standard removes certain disclosures, modifies certain disclosures and adds additional disclosures related to fair value measurement.

ASU 2018-13 is effective for annual periods after December 15, 2019.

This standard became effective for the Company on January 1, 2020 and did not have a material impact on the Company’s disclosures.

In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808):

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The amendments in this update clarify that certain transactions between collaborative arrangement participants should be accounted for as revenue when the collaborative arrangement participant is a customer in the context of a unit of account and precludes recognizing as revenue consideration received from a collaborative arrangement participant if the participant is not a customer.

This standard became effective for the Company on January 1, 2021 and did not have an impact on its condensed consolidated financial statements for the three months ended March 31, 2021.

This standard became effective for the Company on January 1, 2021 and did not have a material impact on its condensed consolidated financial statements as the Company had no transactions applicable to this guidance;

however, the standard may impact how the Company accounts for certain business transactions in the future.

Recently issued accounting pronouncements

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The following tables present information about the Company’s financial assets and liabilities measured at fair value (in thousands) on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values:

March 31, 2021

June 30, 2021

Money market funds in cash and cash equivalents

3 unchanged sentences

The values of cash equivalents are classified as Level 1 measurements under the fair value hierarchy, as these assets have been valued using quoted market prices in active markets and do not have any restrictions on redemption.

As of March 31, 2021 and December 31, 2020, cash equivalents were comprised of funds in money market accounts.

There were no transfers or reclassifications between Level 1, Level 2 and Level 3 during the three months ended March 31, 2021.

As of June 30, 2021 and December 31, 2020, cash equivalents were comprised of funds in money market accounts.

There were no transfers or reclassifications between Level 1, Level 2 and Level 3 during the three and six months ended June 30, 2021.

The value of the warrant liability is classified as a Level 3 measurement under the fair value hierarchy, as this liability has been valued based on significant inputs not observable in the market.

4 unchanged sentences

The fair value of the warrants was recorded as a liability on the date of issuance and was revalued at the end of each reporting period until being exercised upon the closing of the Business Combination.

The following table sets forth a summary of the activities of the Company’s Series A preferred stock warrant liability, which represents a recurring measurement that is classified within Level 3 of the fair value hierarchy wherein fair value is estimated using significant unobservable inputs:

Three Months Ended March 31,

Three Months Ended

Six Months Ended

Beginning warrant liability balance

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Accrued other

On February 8, 2019 (the “Closing Date”), the Company entered into a term loan facility of up to $10.0 million (the “Term Loan”) with Silicon Valley Bank (“SVB”).

On February 8, 2019, the Company entered into a term loan facility of up to $ 10.0 million (the “Term Loan”) with Silicon Valley Bank (“SVB”).

The proceeds were used for general corporate and working capital purposes.

Concurrent with the Term Loan, the Company issued SVB warrants to purchase 15,257 shares of the Company’s Series A preferred stock at an exercise price of $ 5.46 (see Note 5).

As of March 31, 2021 and December 31, 2020, the Company had $9.2 million and $10.0 million, respectively, in principal outstanding under the Term Loan.

As of June 30, 2021 and December 31, 2020, the Company had $ 7.9 million and $ 10.0 million, respectively, in principal outstanding under the Term Loan.

The Term Loan is governed by a loan and security agreement, dated February 8, 2019 , between the Company and SVB (the “SVB Loan Agreement”).

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On April 18, 2019, the Company borrowed $ 7.5 million under the first tranche, and on December 17, 2019, the Company borrowed $ 2.5 million under the second tranche having satisfied the milestone requirement.

The Term Loan initially matured on July 1, 2022 and accrues interest at a floating rate per annum equal to the greater of 3.75% or the prime rate minus 1.5% (1.75% as of March 31, 2021).

The Term Loan initially matured on July 1, 2022 and accrues interest at a floating rate per annum equal to the greater of 3.75 % or the prime rate minus 1.5 % ( 1.75 % as of June 30, 2021).

The Term Loan initially provided for monthly interest-only payments until July 31, 2020.

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The amount of the end of term charge is being accrued over the loan term as interest expense.

As of March 31, 2021 and December 31, 2020, the Company accrued $275 thousand and $239 thousand, respectively, related to the end of term charge, which has been classified within other long-term liabilities.

As of June 30, 2021 and December 31, 2020, the Company accrued $ 308 thousand and $ 239 thousand, respectively, related to the end of term charge, which has been classified within other long-term liabilities.

The SVB Loan Agreement includes a provision under which SVB may accelerate the scheduled maturities of the Term Loan under conditions that are not objectively determinable.

The Company evaluated the likelihood of such acceleration and determined that it is not probable and classified the Term Loan on the balance sheet in accordance with the repayment schedule as of March 31, 2021.

As of March 31, 2021, scheduled principal payments for the Term Loan are as follows (in thousands):

As of June 30, 2021, scheduled principal payments for the Term Loan are as follows (in thousands):

Year Ending December 31,

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Long-term portion

Interest expense for the three months ended March 31, 2021 and 2020 was approximately $138 thousand and $153 thousand, respectively.

Interest expense was approximately $ 121 thousand and $ 107 thousand for the three months ended June 30, 2021 and 2020, respectively, and approximately $ 259 thousand and $ 260 thousand for the six months ended June 30, 2021 and 2020, respectively.

Convertible promissory notes

On August 21, 2020, the Company entered into a purchase agreement with various investors to issue $14.0 million in convertible promissory notes (the “Notes”).

On August 21, 2020, Old Gemini entered into a purchase agreement with various investors to issue $ 14.0 million in convertible promissory notes (the “Notes”).

The Notes accrued simple interest at 8 % per annum.

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The Notes served as a bridge loan prior to the PIPE Financing that was completed in connection with the closing of the Business Combination.

The Notes were intended to automatically convert into shares of common stock issued in the PIPE at a per share conversion price equal to the lowest per share price paid for such shares of common stock in the PIPE.

The Notes were intended to automatically convert into shares of common stock issued in the PIPE Financing at a per share conversion price equal to the lowest per share price paid for such shares of common stock in the PIPE Financing.

The Notes were amended to allow for the principal and interest to convert to shares of Series B preferred stock prior to the closing of the Business Combination.

immediately prior to the closing of the Business Combination, the outstanding principal and interest under the Notes converted into 2,341,316 shares of Series B preferred stock at a per share conversion price of $ 6.1986 and the Notes liability was extinguished .

T he Company recorded other expense of $ 0.7 million for the difference between the reacquisition price of the Notes and the net carrying amount of the Notes in the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2021 .

As of December 31, 2020, the carrying value of the Notes was as follows:

Accordingly, immediately prior to the closing of the Business Combination, the outstanding principal and interest under the Notes converted into 2,341,316 shares of Series B preferred stock at a per share conversion price of $ 6.1986 and the Notes liability was extinguished.

The Company recorded other expense of $ 0.7 million for the difference between the reacquisition price of the Notes and the net carrying amount of the Notes in the condensed consolidated statements of operations and comprehensive loss for the six months ended June 30, 2021.

As of December 31, 2020, the carrying value of the Notes was as follows (in thousands):

Principal amount

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Long-term portion

During the three months ended March 31, 2021, the Company recognized interest expense of $1.7 million.

During the three and six months ended June 30, 2021, the Company recognized interest expense of $ 0 and $ 1.7 million, respectively.

Stockholders’ Equity (Deficit)

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The Company’s board of directors has the authority, without further action by the stockholders, to issue such shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each such series, and to fix the designations, powers, voting, and other rights, preferences and privileges of the shares.

There were no issued and outstanding shares of preferred stock as of March 31, 2021.

In connection with the closing of the Business Combination, all previously issued and outstanding Series A convertible preferred stock and Series B convertible preferred stock were exchanged for common stock in Gemini pursuant to the Conversion Ratio established in the Merger Agreement.

There were no issued and outstanding shares of preferred stock as of June 30, 2021.

In connection with the closing of the Business Combination, all previously issued and outstanding Series A convertible preferred stock and Series B convertible preferred stock were exchanged for common stock of the Company pursuant to the Conversion Ratio established in the Merger Agreement.

All fractional shares were rounded down.

Pursuant to the term of the Amended and Restated Certificate of Incorporation, the Company authorized 250,000,000 shares of common stock with a par value of $ 0.0001 per share.

Immediately following the closing of the Business Combination and as of March 31, 2021, there were 42,998,664 and 43,002,144 shares of common stock issued and outstanding, respectively.

Immediately following the closing of the Business Combination and as of June 30, 2021, there were 42,998,664 and 43,055,112 shares of common stock issued and outstanding, respectively.

As discussed in Note 3, Business Combination , the Company has retroactively adjusted the shares issued and outstanding prior to February 5, 2021 to give effect to the Conversion Ratio established in the Merger Agreement to determine the number of shares of common stock into which they were converted.

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and otherwise do all things necessary to carry out the purposes of the 2021 Plan.

As of June 30, 2021, 498,602 shares remained available for future issuance under the 2021 Plan.

The exercise price of each award granted under the 2021 Plan requiring exercise will be 100 % of the fair market value of stock subject to the award, determined as of the date of the grant, or such higher amount as the plan administrator may determine in connection with the grant, and the term of stock option may not be greater than ten years.

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Awards granted under the 2021 Inducement Plan expire no later than ten years from the date of grant.

As of March 31, 2021, 1,616,895 shares were available for issuance under the 2021 Inducement Plan.

As of June 30, 2021, 983,949 shares were available for issuance under the 2021 Inducement Plan.

Stock-based compensation expense

The Company recorded stock-based compensation expense in the following expense categories of its condensed consolidated statements of operations and comprehensive loss (in thousands):

Three Months Ended March 31,

Three Months Ended

Six Months Ended

Research and development

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The following table summarizes the computation of basic and diluted net loss per share attributable to common stockholders of the Company (in thousands, except share and per share amounts):

Three Months Ended March 31,

Three Months Ended

Six Months Ended

Net loss attributable to common stockholders

5 unchanged sentences

The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

Three Months Ended March 31,

As of June 30,

Unvested restricted stock

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Finally, the Company is required to make royalty payments of between 1.25 % and 2.50 % of net product sales if commercialization is achieved.

The financial statements as of March 31, 2021 do not include liabilities with respect to this agreement as the Company has not yet generated revenue and the achievement of certain milestones is not probable.

The financial statements as of June 30, 2021 do not include liabilities with respect to this agreement as the Company has not yet generated revenue and the achievement of certain milestones is not probable.

In June 2018, the Company entered into a Cell Line License Agreement with Life Technologies Corporation (the “2018 License Agreement”) to obtain non-exclusive use of 293 H cells in support of GEM-103 manufacturing activities.

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The 2018 License Agreement includes additional consideration of $ 275 thousand contingent upon future commercialization of each licensed product.

As the Company has not yet generated revenue from operations, no provision was included in the financial statements with respect to the additional consideration under the 2018 License Agreement as of March 31, 2021.

In March 2019, the Company entered into a second Cell Line License Agreement with Life Technologies Corporation (the “2019 License Agreement”) to obtain non-exclusive use of a CTS Viral Production cell line for producing genetically engineered adeno-associated virus particles to be used in human therapeutics.

2 unchanged sentences

The 2019 License Agreement includes additional consideration of $ 350 thousand contingent upon future commercialization of each licensed product.

As the Company has not yet generated revenue from operations, no provision was included in the financial statements with respect to the additional consideration under the 2019 License Agreement as of March 31, 2021.

In October 2018, the Company entered into a Master License Agreement with Avitide, Inc.

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Finally, the Company is required to make royalty payments of 1.25 % of net product sales if commercialization is achieved.

The financial statements as of March 31, 2021 do not include liabilities with respect to additional consideration under this agreement as the Company has not yet generated revenue and the achievement of certain milestones is not probable.

The financial statements as of June 30, 2021 do not include liabilities with respect to additional consideration under this agreement as the Company has not yet generated revenue and the achievement of certain milestones is not probable.

In June 2019, the Company entered into a GPEx-Derived Cell Line Sale Agreement with Catalent Pharma Solutions, LLC (the “2019 Sale Agreement”) to purchase all right, title and interest in and to the GPEx Cell Line.

1 unchanged sentence

Certain milestone payments may be waived if Catalent manufactures > 50 % of the total product required for the relevant clinical trial.

Contingencies

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

The Company is not aware of any indemnification arrangements could have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations in its condensed consolidated financial statements as of March 31, 2021 .

Legal proceedings

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

As of March 31, 2021, the Company was not a party to any material legal matters or claims.

As of June 30, 2021, the Company was not a party to any material legal matters or claims.

Related party transactions

The Company engaged a firm managed by an executive of the Company for professional services related to accounting, finance and other administrative functions.

For the three months ended March 31, 2021, the costs incurred under this arrangement totaled $105 thousand, of which $95 thousand was recorded in stockholders’ equity (deficit) as a reduction to additional paid-in capital as a result of the Business Combination and $10 thousand was recorded as general and administrative expense in the accompanying condensed consolidated statements of operations and comprehensive loss.

As of March 31, 2021 and December 31, 2020, amounts owed under this arrangement totaled $6 and $257 thousand, respectively, and is included in accounts payable and/or accrued expenses in the accompanying consolidated balance sheet for each period.

For the three and six months ended June 30, 2021, the costs incurred under this arrangement totaled $ 0 and $ 105 thousand, respectively, of which $ 95 thousand was recorded in stockholders’ equity (deficit) as a reduction to additional paid-in capital as a result of the Business Combination and $ 10 thousand was recorded as general and administrative expense in the accompanying condensed consolidated statements of operations and comprehensive loss.

As of June 30, 2021 and December 31, 2020, amounts owed under this arrangement totaled $ 0 and $ 257 thousand, respectively, and is included in accounts payable and/or accrued expenses in the accompanying consolidated balance sheet for each period.

The executive of the Company associated with this firm resigned from the Company in February 2021.

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