Item 5. Market for Registrant’s Common Equity
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock commenced trading on the Nasdaq Global Market on April 8, 2020 and trades under the symbol “KROS.” Prior to April 8, 2020, there was no public market for our common stock.
Holders
As of March 19, 2021, there were 54 stockholders of record of our common stock, one of which is Cede & Co., a nominee for Depository Trust Company, or DTC. All of the shares of common stock held by brokerage firms, banks and other financial institutions as nominees for beneficial owners are deposited into participant accounts at DTC, and are considered to be held of record by Cede & Co. as one stockholder.
Dividends
We have never declared or paid any dividends on our capital stock. We currently intend to retain all available funds and any future earnings for the operation and expansion of our business and, therefore, we do not anticipate declaring or paying cash dividends in the foreseeable future. The payment of dividends will be at the discretion of our board of directors and will depend on our results of operations, capital requirements, financial condition, prospects, contractual arrangements, any limitations on payment of dividends present in any future debt agreements and other factors that our board of directors may deem relevant.
Stock Performance Graph
This performance graph below shall not be deemed "soliciting material" or to be "filed" with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into this Annual Report on Form 10-K or any other filing of Keros Therapeutics, Inc. under the Exchange Act or the Securities Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent that we specifically incorporate this information by reference therein.
The graph set forth below compares the cumulative total stockholder return on our common stock between April 8, 2020 (the date our common stock commenced trading on the Nasdaq Global Market) and December 31, 2020, with the cumulative total return of (a) the Nasdaq Composite Index and (b) the Nasdaq Biotechnology Index, over the same period. This graph assumes the investment of $100 on April 8, 2020 in our common stock, the Nasdaq Composite Index, and the Nasdaq Biotechnology Index and assumes the reinvestment of dividends, if any. The graph assumes our closing sales price on April 8, 2020 of $20.08 per share as the initial value of our common stock and not the initial offering price to the public of $16.00 per share.
The comparisons shown in the graph below are based upon historical data. We caution that the stock price performance shown in the graph below is not necessarily indicative of, nor is it intended to forecast, the potential future performance of our common stock.
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Recent Sales of Unregistered Securities
None.
Use of Proceeds
Initial Public Offering
On April 13, 2020, we closed our initial public offering, or IPO, in which we issued and sold an aggregate of 6,900,000 shares of common stock at a public offering price of $16.00 per share. All of the shares of common stock issued and sold in our IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (Registration No. 333-237212), which was declared effective by the SEC on April 7, 2020. The offering commenced on April 7, 2020, and, following the sale of the shares upon the closing of the IPO, the offer terminated.
The aggregate net proceeds to us from the public offering were approximately $100.1 million, after deducting underwriting discounts and commissions and offering expenses payable by us of approximately $2.5 million. No offering expenses were paid directly or indirectly to any of our directors or officers (or their associates) or persons owning 10% or more of any class of our equity securities or to any other affiliates.
The following information updates the planned use of proceeds information from our IPO we previously disclosed in the final prospectus for our IPO dated April 7, 2020, which we filed with the SEC pursuant to Rule 424(b)(4) of the Securities Act on April 8, 2020: we intend to use the net proceeds from the IPO, together with our existing cash and cash equivalents, to advance the clinical development of KER-050, including the advancement of Phase 2 clinical trials in patients with MDS and in patients with myelofibrosis, to advance the clinical development of KER-047, including the initiation of separate Phase 2 clinical trials in patients with IDA and in patients with IRIDA, and to advance KER-012 into clinical development, including the initiation of a Phase 1 clinical trial. We intend to use the remainder to fund other research and development activities, including activities related to our proprietary discovery approach, working capital and general corporate purposes.
November 2020 Public Offering of Common Stock
On November 17, 2020, we closed a public offering in which we issued and sold an aggregate of 2,990,000 shares of common stock at a public offering price of $50.00 per share. All of the shares of common stock issued and sold in this public offering were registered under the Securities Act pursuant to a registration statement on Form S-1 (Registration No. 333-250010), which was declared effective by the SEC on November 12, 2020. Jefferies LLC, SVB Leerink LLC and Piper Sandler & Co. acted as joint book-running managers for the offering. H.C. Wainwright & Co., LLC acted as co-manager for the offering. The offering commenced on November 12, 2020, and, following the sale of the shares upon the closing of the offering, the offer terminated.
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The aggregate net proceeds to us from the public offering were approximately $140.1 million, after deducting underwriting discounts and commissions and offering expenses payable by us of approximately $9.4 million. No offering expenses were paid directly or indirectly to any of our directors or officers (or their associates) or persons owning 10% or more of any class of our equity securities or to any other affiliates.
There has been no material change in the use of proceeds from our public offering from those disclosed in the final prospectus for our public offering dated November 12, 2020 and filed with the SEC pursuant to Rule 424(b)(4) of the Securities Act on November 13, 2020.
Purchase of Equity Securities by the Issuer and Affiliated Purchasers
None.
ITEM 6. SELECTED FINANCIAL DATA
The following tables set forth our selected financial data for the periods indicated. We derived the selected consolidated statements of operations data for the years ended December 31, 2020 and 2019 and the selected consolidated balance sheet data as of December 31, 2020 and 2019 from our audited financial statements included elsewhere in this Annual Report on Form 10-K. The selected consolidated statements of operations data for the year ended December 31, 2018 and the selected consolidated balance sheet data as of December 31, 2018 are derived from our audited financial statements not included in this Annual Report on Form 10-K. Our historical results are not necessarily indicative of results to be expected for any period in the future.
The data should be read together with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in conjunction with the consolidated financial statements, related notes and other financial information included elsewhere in this Annual Report on Form 10-K. The selected financial data in this section are not intended to replace our consolidated financial statements and are qualified in their entirety by our consolidated financial statements, related notes and other financial information included elsewhere in this Annual Report on Form 10-K.
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YEAR ENDED
DECEMBER 31,
2020 2019 2018
(in thousands, except share and per share data)
Consolidated Statement of Operations Data:
Revenue:
Research collaboration revenue $ — $ 10,000 $ 10,000
Total revenue — 10,000 10,000
Operating expenses:
Research and development (33,860) (17,379) (10,111)
General and administrative (12,797) (3,184) (1,580)
Total operating expenses (46,657) (20,563) (11,691)
Loss from operations (46,657) (10,563) (1,691)
Other income (expense), net:
Interest income (expense), net
(6) (8) 6
Research and development incentive income 2,460 558 370
Change in fair value of preferred stock tranche liability (1,490) (2,564) (43)
Other income, net
160 241 280
Total other income (expense), net 1,124 (1,773) 613
Loss before income taxes (45,533) (12,336) (1,078)
Income tax benefit (provision) 172 — (257)
Net loss $ (45,361) $ (12,336) $ (1,335)
Net loss attributable to common stockholders—basic and diluted $ (45,361) $ (14,136) $ (2,346)
Net loss per share attributable to common stockholders—basic and diluted(1)
$ (2.93) $ (6.08) $ (1.08)
Weighted average common stock outstanding—basic and diluted(1)
15,506,397 2,326,857 2,174,514
(1) See Note 12 to our consolidated financial statements appearing elsewhere in this Annual Report on 10-K for further details on the calculation of basic and diluted net loss per share attributable to common stockholders.
DECEMBER 31,
2020 2019 2018
(in thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents $ 265,876 $ 7,020 $ 23,259
Working capital(1)
260,542 4,441 14,062
Total assets 269,443 10,955 27,412
Total liabilities 7,722 10,460 14,654
Convertible preferred stock(2)
— 19,941 19,941
Total stockholders’ equity (deficit) 261,721 (19,446) $ (7,183)
(1) Working capital is defined as current assets less current liabilities.
(2) All outstanding shares of our convertible preferred stock automatically converted into 10,725,129 shares of our common stock in connection with the completion of our initial public offering.