What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-08 compared with 2021-08-09 · 61 added, 64 removed, 187 unchanged (40% of the section changed)

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Some of such factors include, but are not limited to:

• changes in expectations with respect to the initiation, timing, progress and results of preclinical and clinical trials for B-VEC, KB105, KB104, KB407, KB408, KB301 and any other product candidates, including the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available and our research and development programs and expenses;

• changes in expectations with respect to the initiation, timing, progress and results of preclinical and clinical trials for B-VEC, KB105, KB104, KB407, KB408, KB301, KB303 and any other product candidates, including the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available and our research and development programs and expenses;

• the continuing impact that the COVID-19 pandemic and measures implemented to prevent its spread may have on our business operations, access to capital, research and development activities, and preclinical and clinical trials for our product candidates;

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• our ability to achieve certain accelerated or orphan drug designations from the FDA;

• changes in our estimates regarding the potential market opportunity for B-VEC, KB105, KB104, KB407, KB408, KB301 and any other product candidates;

• changes in our estimates regarding the potential market opportunity for B-VEC, KB105, KB104, KB407, KB408, KB301, KB303 and any other product candidates;

• our ability to raise capital to fund our operations;

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• our general and administrative expenses;

• risks related to our ability to successfully develop and commercialize our product candidates, including B-VEC, KB105, KB104, KB407, KB408, KB301 and our other product candidates;

• risks related to our ability to successfully develop and commercialize our product candidates, including B-VEC, KB105, KB104, KB407, KB408, KB301, KB303 and our other product candidates;

• our ability to identify and develop new product candidates;

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• our estimates regarding expenses, future revenue, capital requirements and needs for or ability to obtain additional financing;

• our ability to successfully resolve any intellectual property or other claims that may be brought against us;

• risks related to our ongoing litigation;

• our ability to successfully resolve any intellectual property or other claims that have been brought against us to date and may be brought against us in the future;

• global economic conditions;

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Throughout this Form 10-Q, unless the context requires otherwise, all references to “Krystal,” “the Company,” we,” “our,” “us” or similar terms refer to Krystal Biotech, Inc., together with its consolidated subsidiaries.

We are a clinical stage biotechnology company leading the field of redosable gene therapy for the treatment of serious rare diseases.

We are a clinical stage biotechnology company leading the field of redosable gene delivery for the treatment of serious rare diseases.

Using our patented platform that is based on engineered HSV-1, we create vectors that efficiently deliver therapeutic transgenes to cells of interest in multiple organ systems.

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• B-VEC is a topical gel containing our novel vector designed to deliver two copies of the COL7A1 transgene for the treatment of dystrophic epidermolysis bullosa ("DEB"), a serious rare skin disease caused by missing or mutated type VII collagen protein ("COL7").

The randomized, double-blind, placebo-controlled GEM-3 pivotal study is ongoing.

On March 30, 2021, we announced completion of patient enrollment, and we expect to announce top line data in 4Q21.

The randomized, double-blind, placebo-controlled GEM-3 pivotal study was designed to evaluate topical B-VEC as compared to placebo in DEB patients.

On October 25, 2021,

we announced completion of the GEM-3 study, and we expect to announce top line data in 4Q21.

Details of the pivotal study can be found at www.clinicaltrails.gov under NCT identifier NCT04491604.

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Nothing included on this website shall be deemed incorporated by reference into this Quarterly Report on Form 10-Q.

On September 9, 2021, we announced that the U.S.

FDA approved a compassionate use request from a physician for the use of topical (eye drop) B-VEC in the system of a single DEB patient after undergoing surgical removal of the scarred layer of the cornea.

• KB105 is a topical gel containing our novel vector designed to deliver two copies of the TGM1 transgene for the treatment of TGM1-deficient autosomal recessive congenital ichthyosis ("TGM1-ARCI"), a serious rare skin disorder caused by missing or mutated TGM1 protein.

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• KB407 is an inhaled (nebulized) formulation of our novel vector designed to deliver two copies of the full-length CFTR transgene for the treatment of cystic fibrosis, a serious rare lung disease caused by missing or mutated cystic fibrosis transmembrane conductance regulator ("CFTR") protein.

On April 19, 2021, we announced positive preclinical data from the Good Laboratory Practice toxicology and biodistribution study, in which the No-Observed-Adverse-Effect Level was determined to be the highest dose tested.

More detailed data will be presented at the 2021 North American Cystic Fibrosis Conference that will take place September 30 through October 2, 2021.

We expect to initiate clinical testing in 3Q21.

On September 29, 2021, we announced that the Bellberry Human Research Ethics Committee in Australia granted approval to conduct a Phase 1 clinical study of inhaled KB407 in patients with cystic fibrosis, and trial initiation is anticipated in 4Q21.

More detailed data from the Good Laboratory Practice "GLP" toxicology and biodistribution study was presented at the virtual 2021 North American Cystic Fibrosis Conference that took place November 2-5, 2021.

• KB408 is an inhaled (nebulized) formulation of our novel vector designed to deliver two copies of the SERPINA1 transgene, that encodes for normal human alpha-1 antitrypsin protein, for the treatment of alpha-1 antitrypsin deficiency.

On April 19, 2021, we announced positive initial proof-of-concept preclinical in vitro and in vivo data.

More detailed preclinical data will be presented at a future scientific conference.

We presented preclinical pharmacology data for KB408 at the European Society of Gene & Cell Therapy Virtual Congress that was held October 19-22, 2021.

• KB104 is a topical gel formulation of our novel vector designed to deliver two copies of the SPINK5 transgene for the treatment of Netherton Syndrome, a debilitating autosomal recessive skin disorder caused by missing or mutated SPINK5 protein.

We expect to initiate a Phase 1 clinical study in 2022.

We are also leveraging the ability of our platform to deliver proteins of interest to cells in the skin in the context of aesthetic medicine via our wholly owned subsidiary Jeune.

We are also leveraging the ability of our platform to deliver proteins of interest to cells in the skin in the context of aesthetic medicine via our wholly owned subsidiary Jeune Aesthetics, Inc.

A summary description of Jeune’s key product candidate and its status is as follows:

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A Phase 1 study is currently ongoing.

On March 24, 2021, we announced initial data from Cohort 1 on the Phase 1 study that showed safety and tolerability of the two (2) repeat KB301 injections in human subjects.

On August 2, 2021, Jeune announced the dosing of the first patient in the efficacy cohort of the PEARL-1 study.

The efficacy cohort is a randomized, double-blind, saline controlled evaluation of safety and efficacy of KB301 for the improvement of skin quality in approximately 30 subjects.

Bilateral treatment areas on the neck behind the ear, on the cheek, and above the knee will be chosen and randomized on Day 0.

Patients will receive two repeat doses of low dose KB301, high dose KB301, or saline 14 days apart.

Change in skin quality from baseline will be assessed via the Skin Roughness Score, Fine Lines Score, and the Subject Satisfaction Score.

Treatment areas above the knee will be evaluated for change in thickness using a caliper.

Jeune expects to announce initial data from Cohort 2 in 4Q21.

On August 2, 2021, Jeune announced the dosing of the first patient in the second Cohort of the PEARL-1 study.

This cohort is a randomized, double-blind, saline controlled evaluation of safety and efficacy of KB301 for the improvement of skin quality.

Enrollment of this cohort completed in October 2021, and Jeune expects to announce initial data from Cohort 2 in early 2022.

Details of the Phase 1 study can be found at www.clinicaltrials.gov under NCT identifier NCT04540900.

Nothing included on these websites shall be deemed incorporated by reference into this Quarterly Report on Form 10-Q

Nothing included on this website shall be deemed incorporated by reference into this Quarterly Report on Form 10-Q

Jeune has several other aesthetic medicine product candidates in various stages of preclinical development.

Business Highlights and Recent Developments

• On May 3, 2021, the Company announced the appointment of Andy Orth to the position of Chief Commercial Officer of Krystal Biotech.

• In 2Q21, the Company began enrolling patients into an OLE study, including patients who participated in the Phase 3 study, as well as new participants who meet all enrollment criteria.

• On June 30, 2021, the Company entered into a Standard Form of Contract for Construction and the corresponding General Conditions of the Contract for Construction with Whiting-Turner, pursuant to which Whiting-Turner is constructing and managing the construction of ASTRA located in the Pittsburgh, Pennsylvania area.

The 150,000 square foot ASTRA facility is under construction and expected to be completed and validated in 2022.

The Agreement contains certain customary terms and conditions of the parties addressing the Project responsibilities.

Subject to certain conditions in the Agreement, the Company will pay Whiting-Turner a contract price consisting of the cost of work plus a fee equal to 1.75% of the cost of work, subject to a guaranteed maximum price to be agreed upon in an amendment to the Agreement at a later date.

• On September 15, 2021, we announced the appointment of Laurent Goux as the General Manager of Europe.

• On October 12, 2021, we announced a collaboration with GeneDx, Inc., a wholly-owned subsidiary of BioReference Laboratories, Inc., an OPKO Health company, to offer no-charge genetic testing for all types of Epidermolysis Bullosa (EB).

The goal of the program, called Krystal Decode DEB TM , is to help patients with the dystrophic form of this genetic condition, also known as DEB, get a definitive diagnosis sooner, with highly accurate results obtained with a blood or cheek swab sample.

COVID-19 Update

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While to date the impact of the pandemic on our business and clinical trials has been minimal and the increased vaccination rates in the U.S.

are encouraging, we will continue to assess the potential impact of the COVID-19 pandemic on our business and operations, including our supply chain and preclinical and clinical trial activities.

are encouraging, we will continue to assess the potential impact of the coronavirus disease ("COVID-19") pandemic on our business and operations, including our supply chain and preclinical and clinical trial activities.

For additional information regarding the impact of the coronavirus pandemic, please see "Risk Factor - Business interruptions resulting from the COVID-19 outbreak or similar public health crises could cause a disruption of the development efforts of our product candidates and adversely impact our business."

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We expect our research and development expenses will increase as we continue the manufacturing of preclinical and clinical materials and manage the clinical trials of, and seek regulatory approval for, our product candidates and expand our product portfolio.

In the near term, we expect that our research and development expenses will increase as we continue with our

pivotal Phase 3 clinical trial for B-VEC, conduct our ongoing Phase 1/2 clinical trial for KB105, conduct our phase 1 safety study for KB301 and incur preclinical expenses for our other product candidates.

In the near term, we expect that our research and development expenses will increase as we continue with our pivotal Phase 3 clinical trial for B-VEC, conduct our ongoing Phase 1/2 clinical trial for KB105, conduct our phase 1 safety study for KB301 and incur preclinical expenses for our other product candidates.

Due to the numerous risks and uncertainties associated with product development, we cannot determine with certainty the duration, costs and timing of our clinical trials, and, as a result, the actual costs to complete our clinical trials may exceed the expected costs.

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We anticipate that our general and administrative expenses will increase in the future to support the continued research and development of our product candidates and to operate as a public company.

These increases will likely include increased costs for insurance, costs related to the hiring of additional personnel and payments to outside consultants, lawyers and accountants, among other expenses.

These increases will likely include increased

costs for insurance, costs related to the hiring of additional personnel and payments to outside consultants, lawyers and accountants, among other expenses.

Additionally, if and when we believe a regulatory approval of our first product candidate appears likely, we anticipate that we will increase our salary and personnel costs and other expenses as a result of our preparation for commercial operations.

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Critical Accounting Policies, Significant Judgments and Estimates

There have been no significant changes during the three and six months ended June 30, 2021 to our critical accounting policies, significant judgments and estimates as disclosed in our management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2020.

There have been no significant changes during the three and nine months ended September 30, 2021 to our critical accounting policies, significant judgments and estimates as disclosed in our management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2020.

Results of Operations

Three Months Ended June 30, 2021 and 2020

Three Months Ended June 30,

Three Months Ended September 30, 2021 and 2020

Three Months Ended September 30,

2021 2020 Change

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Research and Development Expenses

Research and development expenses increased $3.0 million in the three months ended June 30, 2021 compared to the three months ended June 30, 2020.

Higher research and development expenses were due to an increase in outsourced research and development activities of approximately $951 thousand, lab supplies of $340 thousand, payroll related expenses of $1.2 million, which is primarily driven by an increase in headcount to support overall growth, and includes a $903 thousand increase in stock-based compensation, and other research and development expenses of $464 thousand, primarily due to depreciation, rent, and other overhead expenses.

Research and development expenses increased $980 thousand in the three months ended September 30, 2021 compared to the three months ended September 30, 2020.

Higher research and development expenses were due to an increase in preclinical, clinical and pre-commercial manufacturing activities of $538 thousand, payroll related expenses of $363 thousand, which were primarily driven by an increase in headcount to support overall growth, and includes a $327 thousand increase in stock-based compensation, software related costs of $167 thousand, and other research and development expenses of $191 thousand, primarily due to depreciation and rent.

These increases were offset by decrease in outsourced research and development activities of approximately $279 thousand.

General and Administrative Expenses

General and administrative expenses increased $6.5 million in the three months ended June 30, 2021 as compared to the three months ended June 30, 2020.

Higher general and administrative spending was due largely to increases in payroll related expenses of approximately $3.4 million, which is primarily driven by an increase in headcount to support overall growth, and includes a $2.5 million increase in stock-based compensation, market research related expenses of approximately $318 thousand, legal and professional fees of approximately $1.6 million and other administrative and professional expenses of $1.1 million.

Interest and other income for the three months ended June 30, 2021 and 2020 was $30 thousand and $121 thousand, respectively, and consisted of interest and dividend income earned from our cash, cash equivalents and investments.

Six Months Ended June 30, 2021 and 2020

Six Months Ended June 30,

General and administrative expenses increased $5.0 million in the three months ended September 30, 2021 as compared to the three months ended September 30, 2020.

Higher general and administrative spending was due largely to increases in payroll related expenses of approximately $3.1 million, which was primarily driven by an increase in headcount to support overall growth, and includes a $2.0 million increase in stock-based compensation, commercial preparedness expenses of approximately $1.2 million, medical affairs costs of $101 thousand, software related costs of $453 thousand, and other administrative expenses of $422 thousand, primarily due to rent and insurance costs.

These increases were offset by a decrease in legal and professional fees of approximately $316 thousand, which includes $1.6 million of insurance proceeds.

Interest and other income for the three months ended September 30, 2021 and 2020 was $63 thousand and $70 thousand, respectively, and consisted of interest and dividend income earned from our cash, cash equivalents and investments.

Nine Months Ended September 30, 2021 and 2020

Nine Months Ended September 30,

2021 2020 Change

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Research and Development Expenses

Research and development expenses increased $5.6 million in the six months ended June 30, 2021 compared to the six months ended June 30, 2020.

Higher research and development expenses were due to an increase in outsourced research and development activities of approximately $2.3 million, lab supplies of $918 thousand, payroll related expenses of $1.6 million, which is primarily driven by an increase in headcount to support overall growth, and includes a $1.2 million increase in stock-based compensation, and other research and development expenses of $817 thousand, primarily due to depreciation, rent, and other overhead expenses.

Research and development expenses increased $6.6 million in the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

Higher research and development expenses were due to an increase in outsourced research and development activities of approximately $2.0 million, preclinical, clinical and pre-commercial manufacturing activities of $1.8 million, payroll related expenses of $1.9 million, which was primarily driven by an increase in headcount to support overall growth, and includes a $1.6 million increase in stock-based compensation, travel related expenses associated with our clinical trial sites of $199 thousand, software related costs of $212 thousand, and other research and development expenses of $611 thousand, primarily due to depreciation and rent.

General and Administrative Expenses

General and administrative expenses increased $12.2 million in the six months ended June 30, 2021 as compared to the six months ended June 30, 2020.

Higher general and administrative spending was due largely to increases in payroll related expenses of approximately $5.8 million, which is primarily driven by an increase in headcount to support overall growth, and includes a $3.9 million increase in stock-based compensation, market research related expenses of approximately $1.3 million, legal and professional fees of approximately $3.5 million and other administrative expenses of $1.6 million.

General and administrative expenses increased $17.2 million in the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020.

Higher general and administrative spending was due largely to increases in payroll related expenses of approximately $9.0 million, which was primarily driven by an increase in headcount to support overall growth, and includes a $5.9 million increase in stock-based compensation, commercial preparedness expenses of approximately $2.2 million, medical affairs costs $437 thousand, software related costs of $715 thousand, legal and professional fees of approximately $3.6 million which includes $1.6 million of insurance proceeds, insurance costs of $408 thousand, and other administrative expenses of $768 thousand, primarily due to rent.

Other Income (Expense)

Interest and other income for the six months ended June 30, 2021 and 2020 was $64 thousand and $725 thousand, respectively, and consisted of interest and dividend income earned from our cash, cash equivalents and investments.

Interest expense for the six months ended June 30, 2021 and 2020 was $1.5 million and zero, respectively, and related to accretion of the financial obligation for the build to suit lease liability during the six months ended June 30, 2021 to a balance that equaled the purchase consideration for ASTRA.

Interest and other income for the nine months ended September 30, 2021 and 2020 was $127 thousand and $795 thousand, respectively, and consisted of interest and dividend income earned from our cash, cash equivalents and investments.

Interest expense for the nine months ended September 30, 2021 and 2020 was $1.5 million and zero, respectively, and related to accretion of the financial obligation for the build to suit lease liability during the nine months ended September 30, 2021 to a balance that equaled the purchase consideration for ASTRA.

Liquidity and Capital Resources

At June 30, 2021, our cash, cash equivalents and short-term investments balance was approximately $367.7 million.

At September 30, 2021, our cash, cash equivalents and short-term investments balance was approximately $343.1 million.

Since operations began, we have incurred operating losses.

Our net losses were $16.4 million and $6.8 million for the three months ended June 30, 2021 and 2020 and $32.2 million and $12.2 million for the six months ended June 30, 2021 and 2020, respectively.

At June 30, 2021, we had an accumulated deficit of $103.4 million.

With the net proceeds raised from its public and private securities offerings, including the public offering completed on February 1, 2021 and the ATM Program, the Company believes that its cash, cash equivalents and short-term investments as of June 30, 2021 will be sufficient to allow the Company to fund its operations for at least 12 months from the filing date of this Form 10-Q.

Our net losses were $15.6 million and $9.6 million for the three months ended September 30, 2021 and 2020 and $47.8 million and $21.8 million for the nine months ended September 30, 2021 and 2020, respectively.

At September 30, 2021, we had an accumulated deficit of $119.0 million.

With the net proceeds raised from its public and private securities offerings, including the public offering completed on February 1, 2021 and the ATM Program, the Company believes that its cash, cash equivalents and short-term investments as of September 30, 2021 will be sufficient to allow the Company to fund its operations for at least 12 months from the filing date of this Form 10-Q.

As the Company continues to incur losses, a transition to profitability is dependent upon the successful development, approval and commercialization of our product candidates and the achievement of a level of revenues adequate to support the Company’s cost structure.

Furthermore, we expect to incur increasing costs associated with operating as a public company, meeting financial controls, satisfying regulatory and quality standards, maintaining product and clinical trials, and furthering our efforts around our current and future product candidates.

The Company may never achieve profitability, and unless and until it does, the Company will continue to need to raise additional capital.

The Company may never achieve profitability, and unless and until it does, the Company will continue to need to raise additional capital or obtain financing from other sources.

Costs related to clinical trials can be unpredictable and therefore there can be no guarantee that we will have sufficient capital to fund our continued clinical studies of B-VEC, KB105, KB301 or our planned preclinical studies for our other product candidates, or our operations.

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The following table summarizes our sources and uses of cash (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Net cash used in operating activities $ (27,038) $ (18,059)

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Operating Activities

Net cash used in operating activities for the six months ended June 30, 2021 was $19.8 million and consisted primarily of a net loss of $32.2 million adjusted for non-cash items primarily of depreciation and amortization and stock-based compensation expense of $7.7 million and build to suit interest expense of $1.5 million, as well as cash used by increases in net operating assets of approximately $3.2 million.

Net cash used in operating activities for the six months ended June 30, 2020 was $11.3 million and consisted primarily of a net loss of $12.2 million adjusted for non-cash items of depreciation and amortization and stock-based compensation expense of approximately $2.2 million, and cash provided by decreases in net operating liabilities of approximately $1.3 million.

Net cash used in operating activities for the nine months ended September 30, 2021 was $27.0 million and consisted primarily of a net loss of $47.8 million adjusted for non-cash items primarily of depreciation and amortization and stock-based

compensation expense of $12.2 million and build to suit interest expense of $1.5 million, as well as increases in net operating liabilities of approximately $7.1 million.

Net cash used in operating activities for the nine months ended September 30, 2020 was $18.1 million and consisted primarily of a net loss of $21.8 million adjusted for non-cash items of depreciation and amortization and stock-based compensation expense of approximately $4.1 million, and decreases in net operating liabilities of approximately $371 thousand.

Investing Activities

Net cash used in investing activities for the six months ended June 30, 2021 was $63.1 million and consisted primarily of expenditures of $6.5 million on the build-out of our ASTRA facility, leasehold improvement of new office space, and purchases of computer and laboratory equipment, $59.6 million on the purchase of short-term and long-term investments, partially offset by proceeds of $3.0 million received from the maturities of short-term investments.

Net cash used in investing activities for the six months ended June 30, 2020 was $2.3 million and consisted primarily of purchases of $3.2 million of short-term available-for-sale investment securities, and expenditures of $3.5 million on the build-out of our ASTRA facility, leasehold improvement of new office space, and purchases of computer and laboratory equipment, partially offset by proceeds of $4.4 million received from the maturities of short-term investments.

Net cash used in investing activities for the nine months ended September 30, 2021 was $100.2 million and consisted primarily of expenditures of $27.5 million on the build-out of our ASTRA facility, leasehold improvement of new office space, and purchases of computer and laboratory equipment, $83.8 million on the purchase of short-term and long-term investments, partially offset by proceeds of $11.0 million received from the maturities of short-term investments.

Net cash used in investing activities for the nine months ended September 30, 2020 was $5.0 million and consisted primarily of purchases of $3.2 million of short-term available-for-sale investment securities, and expenditures of $7.6 million on the build-out of our ASTRA facility, leasehold improvement of new office space, and purchases of computer and laboratory equipment, partially offset by proceeds of $5.9 million received from the maturities of short-term investments.

Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2021 was $144.1 million and consisted primarily of proceeds of $152.1 million received from our public offering, ATM Program and exercises of stock options, partially offset by expenditures of $8.0 million used for the purchase of the ASTRA building.

Net cash provided by financing activities for the nine months ended September 30, 2021 was $145.6 million and consisted primarily of proceeds of $153.6 million received from our public offering, ATM Program and exercises of stock options, partially offset by expenditures of $8.0 million used for the purchase of the ASTRA building.

On February 1, 2021 the Company completed a public offering of 2,211,538 shares of its common stock at $65.00 per share.

Net proceeds to the Company from the offering were $134.9 million after deducting underwriting discounts and commissions of approximately $8.6 million and other offering expenses of approximately $198 thousand.

During the six months ended June 30, 2021, pursuant to the ATM Program the Company issued 262,500 shares of common stock at a weighted average price of $66.50 per share for net proceeds of $16.9 million after deducting underwriting discounts and commissions of approximately $524 thousand.

During the nine months ended September 30, 2021, pursuant to the ATM Program the Company issued 262,500 shares of common stock at a weighted average price of $66.50 per share for net proceeds of $16.9 million after deducting underwriting discounts and commissions of approximately $524 thousand.

The Company also incurred $172 thousand of other offering expenses related to the ATM Program.

For the six months ended June 30, 2021, the Company received proceeds of $354 thousand from the exercise of stock options.

Net cash provided by financing activities for the six months ended June 30, 2020 was $117.7 million and was primarily from proceeds from our public offering in May 2020 of 2,275,000 shares of our common stock to the public at $55.00 per share.

Net proceeds to the Company from the offering were $117.2 million after deducting underwriting discounts and commissions of approximately $7.5 million and other offering expenses of approximately $463 thousand, of which $132 thousand was unpaid as of June 30, 2020.

For the nine months ended September 30, 2021, the Company received proceeds of $1.9 million from the exercise of stock options.

Net cash provided by financing activities for the nine months ended September 30, 2020 was $117.9 million and was primarily from proceeds from our public offering in May 2020 of 2,275,000 shares of our common stock to the public at $55.00 per share.

Off-Balance Sheet Arrangements

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Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.

We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, are subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

Beginning with our fiscal year ending December 31, 2022, we will cease to be an emerging growth company.

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