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Item 1. Financial Statements

2023-11-06 compared with 2023-08-07 · 251 added, 140 removed, 391 unchanged (50% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data) June 30,

(In thousands, except share and per share data) September 30,

2023 December 31,

2 unchanged sentences

Short-term investments 188,828 217,271

Accounts receivable, net

Prepaid expenses and other current assets 5,465 4,608

17 unchanged sentences

$ 0.00001 par value;

80,000,000 shares authorized at June 30, 2023 and December 31, 2022;

27,974,916 shares issued and outstanding at June 30, 2023;

80,000,000 shares authorized at September 30, 2023 and December 31, 2022;

28,194,655 shares issued and outstanding at September 30, 2023;

and 25,763,743 shares issued and outstanding at December 31, 2022

1 unchanged sentence

Accumulated other comprehensive loss

( 382 ) ( 728 )

Accumulated deficit ( 278,519 ) ( 280,759 )

3 unchanged sentences

Krystal Biotech, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In thousands, except share and per share data) 2023 2022 2023 2022

Product revenues, net

$ 8,556 $ — $ 8,556 $ —

Cost of goods sold 223 — 223 —

Research and development 10,629 11,516 35,061 31,720

General and administrative 25,904 17,863 49,939 33,771

Selling, general, and administrative 23,697 19,935 73,637 53,705

Litigation settlement — — 12,500 25,000

1 unchanged sentence

(Loss) from operations

( 25,993 ) ( 31,451 ) ( 112,865 ) ( 110,425 )

Other income:

Gain from sale of priority review voucher

100,000 — 100,000 —

Interest and other income, net 6,740 1,601 15,105 2,502

Net loss $ ( 33,210 ) $ ( 28,108 ) ( 78,507 ) ( 78,073 )

Unrealized gain (loss) on available-for-sale securities and currency translation adjustment ( 82 ) ( 348 ) 492 ( 1,382 )

Comprehensive loss $ ( 33,292 ) $ ( 28,456 ) $ ( 78,015 ) $ ( 79,455 )

Net loss per common share:

Basic and diluted $ ( 1.25 ) $ ( 1.10 ) $ ( 3.00 ) $ ( 3.08 )

Net income (loss) $ 80,747 $ ( 29,850 ) 2,240 ( 107,923 )

Unrealized (loss) gain on available-for-sale securities and currency translation adjustment

( 146 ) 70 346 ( 1,312 )

Comprehensive income (loss)

$ 80,601 $ ( 29,780 ) $ 2,586 $ ( 109,235 )

Net income (loss) per common share:

Basic $ 2.88 $ ( 1.17 ) $ 0.08 $ ( 4.24 )

Diluted $ 2.79 $ ( 1.17 ) $ 0.08 $ ( 4.24 )

Weighted-average common shares outstanding:

Basic and diluted 26,656,883 25,545,167 26,187,161 25,331,000

Basic 28,042,130 25,619,125 26,812,278 25,428,097

Diluted 28,892,226 25,619,125 27,384,539 25,428,097

The accompanying notes are an integral part of these condensed consolidated financial statements.

3 unchanged sentences

Stockholders'

(In thousands, except shares) Shares Amount Capital (Loss) Deficit Equity

(In thousands, except shares) Shares Amount Capital Loss

Deficit Equity

Balances at January 1, 2023 25,763,743 $ — $ 803,718 $ ( 728 ) $ ( 280,759 ) $ 522,231

6 unchanged sentences

Issuance of common stock, net 2,178,703 — 185,397 — — 185,397

Shares surrendered for taxes and forfeitures — — — — — —

Stock-based compensation expense — — 11,443 — — 11,443

3 unchanged sentences

27,974,916 $ — $ 1,012,616 $ ( 236 ) $ ( 359,266 ) $ 653,114

Issuance of common stock, net 219,739 — 13,511 — — 13,511

Stock-based compensation expense — — 8,722 — — 8,722

Unrealized (loss) on investments and other

— — — ( 146 ) — ( 146 )

Net income — — — — 80,747 80,747

Balances at September 30, 2023

28,194,655 $ — $ 1,034,849 $ ( 382 ) $ ( 278,519 ) $ 755,948

Common Stock Additional Paid-in Accumulated Other Comprehensive Accumulated Total

9 unchanged sentences

Issuance of common stock, net 472,706 — 30,748 — — 30,748

Shares surrendered for taxes and forfeitures ( 7,500 ) — — — — —

Shares forfeited

( 7,500 ) — — — — —

Stock-based compensation expense — — 8,335 — — 8,335

3 unchanged sentences

25,664,287 $ — $ 779,583 $ ( 1,545 ) $ ( 218,857 ) $ 559,181

Issuance of common stock, net 45,377 — 2,176 — — 2,176

Stock-based compensation expense — — 9,195 — — 9,195

Unrealized gain on investments and other

— — — 70 — 70

Net loss — — — — ( 29,850 ) ( 29,850 )

Balances at September 30, 2022

25,709,664 $ — $ 790,954 $ ( 1,475 ) $ ( 248,707 ) $ 540,772

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

Six Months Ended

Nine Months Ended

September 30,

(In thousands) 2023 2022

Operating Activities

Net loss $ ( 78,507 ) $ ( 78,073 )

Adjustments to reconcile net loss to net cash used in operating activities

Net income (loss) $ 2,240 $ ( 107,923 )

Adjustments to reconcile net income (loss) to net cash (used in) operating activities

Gain from sale of priority review voucher

( 100,000 ) —

Depreciation and amortization 2,569 2,966

Stock-based compensation expense 30,080 23,678

Loss on disposals of fixed assets — 22

Other, net ( 4,290 ) ( 224 )

Changes in operating assets and liabilities

Accounts receivable

Prepaid expenses and other current assets ( 137 ) 1,031

5 unchanged sentences

Investing Activities

Proceeds from sale of priority review voucher

Purchases of property and equipment ( 9,952 ) ( 47,762 )

1 unchanged sentence

Proceeds from maturities of investments 428,620 153,599

Net cash used in investing activities ( 12,394 ) ( 94,132 )

Net cash provided by (used in) investing activities

92,798 ( 108,875 )

Financing Activities

Issuance of common stock, net 187,492 30,807

Issuance of common stock, net of issuance costs

200,880 32,927

Taxes paid related to settlement of restricted stock awards ( 749 ) ( 649 )

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(“Jeune Aesthetics”), in Delaware, a wholly-owned subsidiary, for the purpose of undertaking preclinical and clinical studies for aesthetic skin conditions.

In January 2022, August 2022, and December 2022, the Company incorporated wholly-owned subsidiaries in Switzerland, Netherlands, and France, respectively, for the purpose of establishing initial operations in Europe for the development and commercialization of Krystal's product pipeline.

In January 2022, August 2022, December 2022, and August 2023, the Company incorporated wholly-owned subsidiaries in Switzerland, Netherlands, France, and Germany, respectively, for the purpose of establishing initial operations in Europe for the commercialization of the Company’s product pipeline.

We are a commercial-stage biotechnology company focused on the discovery, development, and commercialization of genetic medicines to treat diseases with high unmet medical needs.

Our approach leverages our patented platform that is based on engineered Herpes Simplex Virus-1 (“HSV-1”) vector to deliver therapeutic transgenes to cells of interest in multiple organ systems.

Our approach leverages our patented platform that is based on an engineered Herpes Simplex Virus-1 (“HSV-1”) vector to deliver therapeutic transgenes to cells of interest in multiple organ systems.

The cell’s own machinery then transcribes and translates the transgene to treat the disease.

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On May 19, 2023, the Company received U.S.

Food and Drug Administration (“FDA”) approval for its first candidate, VYJUVEK™ (“VYJUVEK”) for the treatment of Dystrophic Epidermolysis Bullosa (“DEB”) in patients six months or older.

Additionally, the Company received a Rare Pediatric Disease Priority Review Voucher.

VYJUVEK became commercially available upon approval, and the Company expects to begin generating revenue from VYJUVEK product sales in 3Q 2023.

As of June 30, 2023, the Company had an accumulated deficit of $ 359.3 million.

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

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.

Management intends to fund future operations through its on hand cash and cash equivalents, the sale of equity, debt financings, and may also seek additional capital through arrangements with strategic partners or other sources.

Food and Drug Administration (“FDA”) approval for its first product, VYJUVEK ® (“VYJUVEK”) for the treatment of Dystrophic Epidermolysis Bullosa (“DEB”) in patients six months or older.

Additionally, the Company received a Rare Pediatric Disease Priority Review Voucher (“PRV”) in connection with the VYJUVEK approval.

VYJUVEK became commercially available upon approval, and we began generating revenue from VYJUVEK product sales in 3Q 2023.

As of September 30, 2023, the Company had an accumulated deficit of $ 278.5 million.

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

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

Management intends to fund future operations through its on hand cash and cash equivalents, revenue generated from the sale of VYJUVEK, the sale of equity, debt financings, and may also seek additional capital through arrangements with strategic partners or other sources.

There can be no assurance that additional funding will be available on terms acceptable to the Company, if at all.

The Company is subject to risks common to companies in the biotechnology industry, including but not limited to the failure of product candidates in clinical and preclinical studies, the development of competing product candidates or other technological innovations by competitors, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to commercialize product candidates.

The Company expects to incur significant costs to expand its commercialization capabilities in advance of the potential global regulatory approvals of its lead product, VYJUVEK.

The Company believes that its cash, cash equivalents and short-term investments of approximately $ 477.5 million as of June 30, 2023 will be sufficient to allow the Company to fund its planned operations for at least the next 12 months from the date of this Quarterly Report on Form 10-Q.

The Company expects to incur significant costs to further its pipeline and to expand its commercialization capabilities in advance of the potential global regulatory approvals of VYJUVEK.

The Company believes that its cash, cash equivalents and short-term investments of approximately $ 562.1 million as of September 30, 2023 will be sufficient to allow the Company to fund its planned operations for at least the next 12 months from the date of this Quarterly Report on Form 10-Q.

Summary of Significant Accounting Policies

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The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year.

These unaudited interim condensed consolidated financial statements should be read in conjunction

with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the U.S.

These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the U.S.

Securities and Exchange Commission (“SEC”) on February 27, 2023.

6 unchanged sentences

The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates.

Estimates are used in the following areas:

stock-based compensation expense, accrued expenses, and the valuation allowance included in the deferred income tax calculation.

If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates in the period these variances become known.

Estimates are used in the following areas, among others:

variable consideration associated with revenue recognition, stock-based compensation expense, accrued expenses, and the valuation allowance included in the deferred income tax calculation.

Segment and Geographical Information

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The Company and the Company’s chief operating decision maker view the Company’s operations and manage its business in one operating segment, which is the business of developing and commercializing pharmaceutical products.

Concentrations of Credit Risk and Off-Balance Sheet Risk

Financial instruments that potentially subject the Company to credit risk consist of cash, cash equivalents and investments.

The Company’s policy is to invest its cash, cash equivalents and investments in money market funds, corporate bonds, commercial paper, U.S.

government agency securities and various other bank deposit accounts.

The counterparties to the agreements relating to the Company’s investments consist of financial institutions of high credit standing.

The Company is exposed to credit risk in the event of default by the financial institutions to the extent amounts recorded on the condensed consolidated balance sheets are in excess of insured limits.

The Company has not experienced any credit losses in such accounts and does not believe it is exposed to any significant credit risk on these funds.

The Company has no financial instruments with off-balance sheet risk of loss.

Cash, Cash Equivalents and Investments

8 unchanged sentences

Any premium arising at purchase is amortized to the earliest call date and any discount arising at purchase is accreted to maturity.

Amortization and accretion of premiums and discounts are recorded in interest and other income, net, in the consolidated statements of operations.

Amortization and accretion of premiums and discounts are recorded in interest and other income, net, in the condensed consolidated statements of operations and comprehensive income (loss).

Fair Value of Financial Instruments

9 unchanged sentences

There have been no transfers between Level 1, Level 2, and Level 3 in any periods presented.

The carrying amounts of financial instruments consisting of cash and cash equivalents, investments, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities included in the Company’s condensed consolidated financial statements, approximate fair value, primarily due to their short maturities.

Our available-for-sale, short-term and long-term investments, which consist of commercial paper, corporate bonds, and U.S.

government agency securities are considered to be Level 2 financial instruments.

The fair value of Level 2 financial assets is determined using inputs that are observable in the market or can be derived principally from or corroborated by observable market data, such as pricing for similar securities, recently executed transactions, cash flow models with yield curves, and benchmark securities.

In addition, Level 2 financial instruments are valued using comparisons to like-kind financial instruments and models that use readily observable market data as their basis.

The Company capitalizes inventory costs associated with products when future commercialization is considered probable, and a future economic benefit is expected to be realized.

These costs consist of raw materials, manufacturing-related costs, personnel costs including stock-based compensation, facility costs, transportation and freight, and other indirect overhead costs.

The carrying amounts of financial instruments consisting of cash and cash equivalents, investments, accounts receivable, net, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities included in the Company’s condensed consolidated financial statements, approximate fair value, primarily due to their short maturities.

Our available-for-sale, short-term and long-term investments are considered to be Level 2 financial instruments.

Revenue Recognition

The Company sells VYJUVEK to a limited number of specialty pharmacies (“SPs”) that mix the medication and administer it to patients in the patient’s home by a healthcare professional and a single specialty distributor (“SD”), that distributes VYJUVEK to hospitals and outpatient clinics where patients are administered the medication at a healthcare professional’s office.

The Company recognizes product revenue under ASC Topic 606, Revenue from Contracts with Customers (“Topic 606”).

Under Topic 606, the Company is required to complete the following five steps:

(i) identify the contract(s) with a customer;

(ii) identify the performance obligations in the contract;

(iii) determine the transaction price, including variable consideration, if any;

(iv) allocate the transaction price to the performance obligations in the contract;

and (v) recognize revenue when (or as) the entity satisfies a performance obligation.

The Company recognizes revenue when the customer obtains control of the product, which occurs at a point in time, upon delivery to the customer.

Sales and other taxes collected concurrent with revenue-producing activities are excluded from revenue.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring VYJUVEK and is generally based upon a list or fixed price less allowances for returns, rebates and discounts.

The Company’s payment terms are generally 30 to 60 days from the invoice date.

Variable Consideration

Product revenues is recorded at the net sales price, or transaction price, upon delivery and transfer of control to the customer, and includes an estimate of variable consideration, which results from discounts, rebates, and returns that are offered within contracts between the Company and its customers.

– Prompt Pay Discounts:

As an incentive for prompt payment, the Company offers a cash discount to customers.

The Company estimates accrued prompt pay discounts using the most likely amount method.

The Company expects that all eligible customers will comply with the contractual terms to earn the discount.

The Company records the discount as an allowance against accounts receivable, net and a reduction of revenue.

– Government Rebates:

The Company participates in certain government rebate programs including Medicaid.

The Company estimates accrued government rebates using the expected value method.

The Company accrues estimated rebates based on estimated percentages of VYJUVEK prescribed to qualified patients, estimated rebate percentages and estimated levels of inventory in the distribution channel that will be prescribed to qualified patients and records the rebates as a reduction of revenue.

Accrued government rebates are recorded as a reduction of revenue and are included in other accrued liabilities on the condensed consolidated balance sheets.

– Commercial Rebates:

The Company participates in certain commercial rebate programs.

Under these rebate programs, the Company pays a rebate to the commercial entity or third-party administrator of the program.

Accrued commercial rebates are estimated using the expected value method.

The Company accrues estimated rebates based on contract prices, estimated percentages of VYJUVEK that will be prescribed to qualified patients and estimated levels of inventory in the distribution channel.

Accrued commercial rebates are recorded as a reduction of revenue and are included in other accrued liabilities on the condensed consolidated balance sheets.

– Copay Assistance:

The Company provides copay assistance to qualified patients, helping them meet copay obligations to their insurance provider.

The Company reimburses pharmacies for this discount through third-party vendors.

The Company estimates copay assistance costs using the expected value method.

The estimate is based on contract prices, estimated percentages of VYJUVEK that will be prescribed to qualified patients, average assistance paid based on reporting from third-party vendors and estimated levels of inventory in the distribution channel.

Copay assistance costs are recorded as reductions to revenue and are accrued in other accrued liabilities on the condensed consolidated balance sheets.

The Company offers SPs and SDs limited return rights relating to product damage or defect and based on these provisions, the Company believes that there will be minimal returns.

Variable consideration is estimated and reduces the transaction price to reflect the Company’s best estimate of the amount of consideration to which the Company is entitled based on the terms of the contracts and are recorded in the same period the related product revenues is recognized.

The amount of variable consideration that is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is considered probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period.

Actual amounts of consideration ultimately received may differ from the Company’s estimates.

If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates in the period these variances become known.

Cost of Goods Sold

Cost of goods sold includes direct and indirect costs related to the manufacturing of VYJUVEK.

These costs consist of manufacturing costs, personnel costs including stock-based compensation, facility costs, and other indirect overhead costs.

Cost of goods sold may also include period costs related to certain manufacturing services and inventory adjustment charges.

Accounts Receivable

Accounts receivable is recorded net of allowances for prompt payment discounts, returns, and credit losses.

The Company estimates an allowance for credit losses by considering factors such as credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay.

As of September 30, 2023, the credit profiles for the Company’s customer was deemed to be in good standing, and as such an allowance for credit losses was not recorded.

Concentration of Credit Risk and Off-Balance Sheet Risk

Financial instruments that subject the Company to credit risk primarily consist of cash and cash equivalents, short-term investments, long-term investments, and accounts receivable, net.

The Company maintains its cash and cash equivalent balances with high-quality financial institutions and, consequently, the Company believes that such funds are subject to minimal credit risk.

The Company has not experienced any credit losses in such accounts and does not believe it is exposed to any significant credit risk on these funds.

The Company’s accounts receivable, net and marketable securities, which primarily consist of U.S.

government agency securities and treasuries, equity securities, corporate bonds and commercial paper, potentially subject the Company to concentrations of credit risk.

The Company had one customer for the three and nine months ended September 30, 2023 and no product revenues for the three and nine months ended September 30, 2022.

The Company has no financial instruments with off-balance sheet risk of loss.

The Company capitalizes inventory costs associated with products when future economic benefit is expected to be realized.

These costs consist of raw materials, manufacturing-related costs, personnel costs including stock-based compensation, facility costs, and other indirect overhead costs.

Prior to receiving FDA approval for VYJUVEK in May 2023, the Company expensed costs related to inventory for clinical and pre-commercial purposes directly to research and development expense.

Following the FDA’s approval of VYJUVEK, the Company began capitalizing inventory related to commercialized products held for sale, in-process of production for sale, and raw materials to be used in the manufacturing of inventory.

The Company values its inventories at the lower-of-cost and net realizable value, using the first-in, first-out (“FIFO”) basis.

The Company values its inventories at the lower-of-cost and net realizable value, on a first-in, first-out (“FIFO”) basis.

The Company adjusts the net realizable value of any excess, obsolete or unsalable inventories in the period in which an impairment is identified.

For the three and six months ended June 30, 2023 and 2022, there were no inventory impairment adjustments.

As of June 30, 2023, the Company recorded $ 1.1 million of inventory consisting of raw materials and work-in-process within prepaid expense and other current assets on the Company’s condensed consolidated balance sheets.

For the three and nine months ended September 30, 2023 and 2022, there were no inventory impairment adjustments.

As of September 30, 2023, the Company recorded $ 5.3 million of inventory, consisting of raw materials, work-in-process, and finished goods within inventory on the Company’s condensed consolidated balance sheets.

Property and Equipment, net

1 unchanged sentence

Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed to operations as incurred, while costs of major additions and betterments are capitalized.

Upon disposal, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the results of operations.

Upon disposal, the related cost and accumulated depreciation is removed and any resulting gain or loss is included in the results of operations.

Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets, which are as follows:

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The Company evaluates long-lived assets for potential impairment when events or changes in circumstances indicate the carrying value of the assets may not be recoverable.

We review the recoverability of the net book value of long-lived assets whenever events and circumstances indicate ("triggering events") that the net book value of an asset may not be recoverable from the estimated undiscounted future cash flows expected to result from its use and eventual disposition.

We review the recoverability of the net book value of long-lived assets whenever events and circumstances indicate ("triggering events") that the net book value of an asset may not be recoverable.

In cases where a triggering event occurs and undiscounted expected future cash flows are less than the net book value, we recognize an impairment loss equal to an amount by which the net book value exceeds the fair value of the asset.

Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.

The Company has no t identified any triggering events or recognized any impairment losses for the three and six months ended June 30, 2023 and 2022.

The Company has no t identified any triggering events or recognized any impairment losses for the three and nine months ended September 30, 2023 and 2022.

The Company accounts for its lease agreements in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification, or ASC, Topic 842, Leases .

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In addition, the Company also has made an accounting policy election to exclude leases with an initial term of twelve months or less from its condensed consolidated balance sheets and to account for lease and non-lease components of its operating leases as a single component.

For lease arrangements where it has been determined that the Company has control over an asset that is under construction and is thus considered the accounting owner of the asset during the construction period, the Company records a construction in progress asset and corresponding financial obligation on the condensed consolidated balance sheet.

Once the construction is complete, an assessment is performed to determine whether the lease meets certain sale-leaseback criteria.

If the sale-leaseback criteria are determined to be met, the Company will remove the asset and related financial obligation from the condensed consolidated balance sheet and treat the lease as either an operating or finance lease based on an assessment of the guidance.

If, upon completion of construction, the project does not meet the "sale-leaseback" criteria, the lease will be treated as a financing obligation and the Company will depreciate the asset over its estimated useful life for financial reporting purposes once the asset has been placed into service.

Research and Development Expenses

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The Company estimates contract research and manufacturing expenses based on the services performed pursuant to contracts with research organizations and manufacturing organizations that manufacture materials used in the Company’s ongoing preclinical and clinical studies.

Non-refundable advanced payments for goods or services to be received in the future for use in research and development activities are capitalized.

Non-refundable advanced payments for goods or services to be received in the future for use in research and development activities are capitalized within prepaid expenses and other current assets on the condensed consolidated balance sheets.

The capitalized amounts are expensed as the related goods are delivered or the services are performed.

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Stock-based compensation expense recognized in the financial statements is based on awards for which service conditions are expected to be satisfied.

Comprehensive Loss

Comprehensive loss is defined as the change in equity during a period from transactions from non-owner sources.

Unrealized gains or losses on available-for-sale securities is a component of other comprehensive gains or losses and is presented net of taxes.

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity during a period from transactions from non-owner sources.

Unrealized gains or losses on available-for-sale securities and foreign currency translation are components of other comprehensive gains or losses and are presented net of taxes.

We record reclassifications from other comprehensive gains or losses to interest and other income, net on the condensed consolidated statements of operations related to realized gains on sales of available-for-sale securities.

The Company reviews its securities quarterly to determine whether an other-than-temporary impairment has occurred.

The Company determined that there were no other-than-temporary impairments during the three and six months ended June 30, 2023 and 2022.

The Company determined that there were no other-than-temporary impairments during the three and nine months ended September 30, 2023 and 2022.

Recent Accounting Pronouncements

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There were no recently adopted accounting pronouncements that had a material impact on the Company’s condensed consolidated financial statements, and no recently issued accounting pronouncements that are expected to have a material impact on the Company’s condensed consolidated financial statements.

Net Loss Per Share Attributable to Common Stockholders

Basic net loss per share attributable to common stockholders is calculated by dividing net loss attributable to common stockholders by the weighted average shares outstanding during the period, without consideration for common stock equivalents.

Diluted net loss per share attributable to common stockholders is computed by dividing the net loss by the weighted-average number of shares of common stock and common share equivalents outstanding for the period.

Common share equivalents consist of common stock issuable upon exercise of stock options and vesting of restricted stock awards.

There were 3,274,066 and 3,686,862 common share equivalents outstanding as of June 30, 2023 and 2022, respectively, in the form of stock options and unvested restricted stock awards, that have been excluded from the calculation of diluted net loss per common share as their effect would be anti-dilutive for all periods presented.

Revenue Recognition

The Company began commercial marketing and sales of VYJUVEK throughout the United States and began recognizing revenue in 3Q 2023.

For the three and nine months ended September 30, 2023 and 2022, the Company recognized net product revenues of $ 8.6 million and zero , respectively.

Accounts receivable balances were $ 9.3 million and zero as of September 30, 2023 and December 31, 2022, respectively.

The following table summarizes changes in allowances and discounts for the three months ended September 30, 2023 (in thousands):

Other Accruals

Balance as of June 30, 2023

$ — $ — $ — $ —

920 195 78 1,192

Payments/Credits

— ( 5 ) — ( 5 )

Balance, as of September 30, 2023

$ 920 $ 190 $ 78 $ 1,187

Net Income (Loss) Per Share Attributable to Common Stockholders

Basic net income (loss) per share attributable to common stockholders is calculated by dividing net income (loss) attributable to common stockholders by the weighted average shares outstanding during the period, without consideration for common stock equivalents.

Diluted net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) by the weighted-average number of shares of common stock and common share equivalents outstanding for the period.

Common share equivalents consist of common stock issuable upon exercise of stock options and vesting of restricted stock awards and restricted stock units.

There were 378,299 and 1,277,313 common share equivalents, in the form of stock options, that have been excluded of from the calculation of diluted net income (loss) per common share for the three and nine months ended September 30, 2023, respectively, as their effect would be anti-dilutive.

There were 3,565,110 common share equivalents outstanding in the form of stock options and unvested restricted stock awards as of September 30, 2022 that were excluded from the calculation of diluted net income (loss) per common share as their effect would be anti-dilutive.

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In thousands, except share and per share data) 2023 2022 2023 2022

Net loss $ ( 33,210 ) $ ( 28,108 ) $ ( 78,507 ) $ ( 78,073 )

Weighted-average basic and

diluted common shares

Net income (loss) $ 80,747 $ ( 29,850 ) $ 2,240 $ ( 107,923 )

Weighted-average basic common shares

28,042,130 25,619,125 26,812,278 25,428,097

Basic and diluted net loss per

common share $ ( 1.25 ) $ ( 1.10 ) $ ( 3.00 ) $ ( 3.08 )

Dilutive effect of stock options and unvested restricted stock

850,096 — 572,261 —

Weighted-average diluted common shares

28,892,226 25,619,125 27,384,539 25,428,097

Net income (loss) per common share — Basic

$ 2.88 $ ( 1.17 ) $ 0.08 $ ( 4.24 )

Net income (loss) per common share — Diluted

$ 2.79 $ ( 1.17 ) $ 0.08 $ ( 4.24 )

Fair Value Instruments

The following tables show the Company’s cash, cash equivalents and available-for-sale securities by significant investment category as of June 30, 2023 and December 31, 2022, respectively (in thousands):

June 30, 2023

The following tables show the Company’s cash, cash equivalents and available-for-sale securities by significant investment category as of September 30, 2023 and December 31, 2022, respectively (in thousands):

September 30, 2023

Amortized Cost Gross

Losses Aggregate Fair

Aggregate Fair

Value Cash and Cash

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Amortized Cost Gross

Losses Aggregate Fair

Aggregate Fair

Value Cash and Cash

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Property and equipment, net consist of the following (in thousands):

September 30,

2023 December 31,

Construction in progress $ 97,759 $ 131,331

Building and building improvements 72,193 —

Construction in progress $ 56,074 $ 131,331

Leasehold improvements 24,835 24,217

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Property and equipment, net $ 164,029 $ 161,684

Depreciation expense was $ 1.2 million and $ 2.3 million for the three and six months ended June 30, 2023 and $ 494 thousand and $ 956 thousand for the three and six months ended June 30, 2022, respectively.

Depreciation expense was $ 1.2 million and $ 3.5 million for the three and nine months ended September 30, 2023 and $ 669 thousand and $ 1.6 million for the three and nine months ended September 30, 2022, respectively.

On March 27, 2023, the Company received the permanent occupancy permit for its second commercial scale CGMP facility, ASTRA, which allowed the Company to begin utilizing certain portions of the building.

As a result, certain assets relating to ASTRA were reclassified from construction in progress to leasehold improvements, manufacturing equipment, buildings and building improvements, furniture and fixtures, or computer equipment and software during the first half of 2023.

The Company placed additional portions of ASTRA into service during the three months ended June 30, 2023 as it was determined that additional assets were ready for their intended use.

The Company placed additional portions of ASTRA into service during the three months ended September 30, 2023 as it was determined that additional assets were ready for their intended use.

As certain building improvements are not yet complete and certain qualification activities are still underway, the Company will continue to hold the remaining assets within construction in progress until validation has been completed and the assets are ready for their intended use.

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Accrued expenses and other current liabilities consisted of the following (in thousands):

September 30,

2023 December 31,

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Accrued professional fees 2,786 3,397

Accrued preclinical and clinical expenses 1,582 1,365

Other current liabilities 2,315 267

Accrued preclinical and clinical expenses 1,908 1,365

Accrued taxes 152 43

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The agreements with CMOs primarily relate to the manufacturing of our cell and virus banks and for the manufacturing of our sterile gel that is mixed with in-house produced vectors as part of the final drug product for VYJUVEK.

Agreements with third parties may also include research and development consulting activities, clinical-trial agreements, storage, packaging, labeling, and/or testing of our preclinical and clinical-stage or pre-commercial

The Company is obligated to make milestone payments under certain of these contracts.

The Company may also be responsible for the payment of a monthly service fee for project management services for the duration of any agreements.

The estimated remaining commitment as of June 30, 2023 under these agreements is approximately $ 3.0 million.

The Company has incurred research and development expenses under these agreements of $ 1.1 million and $ 3.1 million for the three and six months ended June 30, 2023 and $ 1.2 million and $ 3.0 million for the three and six ended June 30, 2022, respectively.

The estimated remaining commitment as of September 30, 2023 under these agreements is approximately $ 2.7 million.

The Company has incurred research and development expenses under these agreements of $ 1.9 million and $ 5.0 million for the three and nine months ended September 30, 2023, respectively, and $ 2.1 million and $ 5.1 million for the three and nine months ended September 30, 2022, respectively.

ASTRA Contractual Obligations

The Company has contracted with various third parties to complete the interior build-out of our second CGMP facility, ASTRA.

The Company has contracted with various third parties to complete and qualify our second CGMP facility, ASTRA.

These contracts typically call for the payment of fees for services or materials upon the achievement of certain milestones.

The estimated remaining commitment as of June 30, 2023 is $ 10.6 million and primarily relates to the remaining building improvements and certain qualification activities of the facility.

The estimated remaining commitment as of September 30, 2023 is $ 11.1 million and primarily relates to the remaining building improvements and certain qualification activities of the facility.

The Company has included costs incurred to-date associated with the ongoing build-out of ASTRA within construction in progress, except for the assets of the facility that have been placed in service.

As of June 30, 2023, Substantial Completion, as defined in the Standard Form of Contract for Construction and the corresponding General Conditions of the Contract for Construction (the “Agreement”) with Whiting-Turner Contracting Company (“Whiting-Turner”), the construction manager for ASTRA, had not been achieved.

As of September 30, 2023, Substantial Completion, as defined in the Standard Form of Contract for Construction and the corresponding General Conditions of the Contract for Construction (the “Agreement”) with Whiting-Turner Contracting Company (“Whiting-Turner”), the construction manager for ASTRA, had not been achieved.

Whiting-Turner’s work under the Agreement represents a portion of the work necessary to complete construction of the ASTRA facility and, therefore the date of Substantial Completion of Whiting-Turner’s work under the Agreement may not equate to the date of in-service for portions of ASTRA or the date of full facility completion of ASTRA.

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The settlement agreement requires the Company to pay three additional $ 12.5 million contingent milestone payments upon reaching $ 100.0 million in total cumulative sales, $ 200.0 million in total cumulative sales and $ 300.0 million in total cumulative sales.

As defined in the settlement agreement, cumulative sales shall include all revenue from sales of the Company products by the Company and its affiliates and licensees, as reported by the Company in its annual Form 10-K filings.

As defined in the settlement agreement, cumulative sales shall include all revenue from sales of the Company products by the Company and its affiliates and licensees, as reported by the

Company in its annual Form 10-K filings.

If all milestones are achieved, the total consideration for settling the dispute, acquiring certain assets, and granting of a license from PeriphaGen will be $ 75.0 million, of which $ 37.5 million has been paid.

The Company recorded the settlement payments of zero and $ 12.5 million for the three and six months ended June 30, 2023, respectively, and zero and $ 25.0 million for the three and six months ended June 30, 2022, respectively, under litigation settlement expense on the condensed consolidated statements of operations for the six months ended June 30, 2023 and June 30, 2022.

In accordance with ASC 450, as of the June 30, 2023, Company has not recorded an accrual for the remaining contingent milestone payments.

The Company did no t receive insurance proceeds during the three and six months ended June 30, 2023 and received zero and $ 768 thousand during the three and six months ended June 30, 2022, respectively.

The reimbursements have been recorded as an offset to our legal fees included in general and administrative expenses on the condensed consolidated statements of operations and within operating activities on the condensed consolidated statements of cash flows.

As of June 30, 2023, future minimum commitments under the Company’s operating leases with lease terms in excess of 12 months were as follows (in thousands):

2023 (remaining six months) $ 828

The Company recorded the settlement payments of zero and $ 12.5 million for the three and nine months ended September 30, 2023, respectively, and zero and $ 25.0 million for the three and nine months ended September 30, 2022, respectively, under litigation settlement expense on the condensed consolidated statements of operations.

As of September 30, 2023, the Company has not recorded an accrual for the remaining contingent milestone payments.

The Company did no t receive insurance proceeds during the three and nine months ended September 30, 2023 and received zero and $ 768 thousand during the three and nine months ended September 30, 2022, respectively.

The reimbursements have been recorded as a reduction to our legal fees included in selling, general, and administrative expenses on the condensed consolidated statements of operations and within operating activities on the condensed consolidated statements of cash flows.

As of September 30, 2023, future minimum commitments under the Company’s operating leases with lease terms in excess of 12 months were as follows (in thousands):

2023 (remaining three months) $ 413

Thereafter 10,763

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Supplemental condensed consolidated balance sheet information related to leases is as follows:

September 30,

2023 December 31, 2022

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

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The issuance and sale of the Placement Shares were made pursuant to the Company's effective "shelf" registration statement on Form S-3 that was filed with the Securities and Exchange Commission (the “SEC”) on May 4, 2020 (the “2020 Shelf Registration Statement”).

During the six months ended June 30, 2022, the Company issued and sold 434,782 Placement Shares at a weighted average price of $ 69.00 per share for net proceeds of $ 29.1 million after deducting selling commissions of approximately $ 900 thousand.

During the nine months ended September 30, 2022, the Company issued and sold 434,782 Placement Shares at a weighted average price of $ 69.00 per share for net proceeds of $ 29.1 million after deducting selling commissions of approximately $ 900 thousand.

The Company’s 2020 Shelf Registration Statement expired on May 4, 2023, and the Company put in place a new at-the-market equity offering program under substantially the same terms as the 2020 ATM Program (the “New ATM Program”).

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The New Placement Shares will be offered and sold pursuant to the Company’s effective shelf registration statement on Form S-3 filed with the SEC on April 6, 2023, and a prospectus supplement relating to the New Placement Shares that was filed with the SEC on May 8, 2023.

During the quarter

ended June 30, 2023, no shares of common stock were issued pursuant to the New ATM Program, resulting in $ 150.0 million available for issuance under the New ATM Program.

During the quarter ended September 30, 2023 no shares of common stock were issued pursuant to the New ATM Program, resulting in $ 150.0 million available for issuance under the New ATM Program.

2023 Private Placement Offering

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Stock options have a life of ten years .

The Company granted 101,680 and 389,280 stock options to employees, non-employees, and directors of the Company during the three and six months ended June 30, 2023 and 589,500 and 1,769,000 to employees, non-employees, and directors of the Company during the three and six months ended June 30, 2022, respectively.

The Company granted 30,500 and 419,780 stock options to employees, non-employees, and directors of the Company during the three and nine months ended September 30, 2023 and 189,000 and 1,958,000 to employees, non-employees, and directors of the Company during the three and nine months ended September 30, 2022, respectively.

The following table summarizes the Company’s stock option activity:

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Expired — $ —

Outstanding at June 30, 2023 3,229,666 $ 65.04 8.4 $ 169,121

Exercisable at June 30, 2023 778,737 $ 55.83 7.5 $ 47,952

(1) Aggregate intrinsic value represents the difference between the closing stock price of our common stock on June 30, 2023 and the exercise price of outstanding in-the-money options.

The total intrinsic value (the amount by which the fair market value exceeds the exercise price) of stock options exercised during the three and six months ended June 30, 2023 was $ 26.7 million and $ 27.9 million, respectively, and during the three and six months ended June 30, 2022 was $ 704 thousand and $ 739 thousand, respectively.

The weighted-average grant-date fair value per share of options granted to employees, non-employees, and directors during the three and six months ended June 30, 2023 was $ 72.95 and $ 61.06 , respectively, and during the three and six months ended June 30, 2022 was $ 42.90 and $ 43.03 , respectively.

There was $ 98.2 million of unrecognized stock-based compensation expense related to employees', non-employees', and directors’ option awards that is expected to be recognized over a weighted-average period of 2.6 years as of June 30, 2023.

The Company has recorded stock-based compensation expense related to the issuance of stock option awards in the condensed consolidated statements of operations for the three and six months ended June 30, 2023 and 2022 as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Outstanding at September 30, 2023 2,667,260 $ 66.04 8.2 $ 133,648

Exercisable at September 30, 2023 707,277 $ 55.51 7.1 $ 42,793

(1) Aggregate intrinsic value represents the difference between the closing stock price of our common stock on September 30, 2023 and the exercise price of outstanding in-the-money options.

The total intrinsic value (the amount by which the fair market value exceeds the exercise price) of stock options exercised during the three and nine months ended September 30, 2023 was $ 13.5 million and $ 41.4 million, respectively, and during the three and nine months ended September 30, 2022 was $ 1.3 million and $ 2.1 million, respectively.

The weighted-average grant-date fair value per share of options granted to employees, non-employees, and directors during the three and nine months ended September 30, 2023 was $ 85.93 and $ 62.87 , respectively, and during the three and nine months ended September 30, 2022 was $ 49.59 and $ 43.66 , respectively.

There was $ 77.5 million of unrecognized stock-based compensation expense related to employees', non-employees', and directors’ option awards that is expected to be recognized over a weighted-average period of 2.6 years as of September 30, 2023.

The Company has recorded stock-based compensation expense related to the issuance of stock option awards in the condensed consolidated statements of operations for the three and nine months ended September 30, 2023 and 2022, respectively, as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Research and development $ 2,033 $ 2,184 $ 6,858 $ 5,547

General and administrative 6,978 5,776 14,086 10,357

Selling, general, and administrative

4,796 6,433 18,881 16,791

Total stock-based compensation $ 6,829 $ 8,617 $ 25,739 $ 22,338

The fair value of options was estimated at the date of grant using the Black-Scholes valuation model with the following weighted-average assumptions for the three and six months ended June 30, 2023 and 2022:

Three Months Ended June 30, Six Months Ended June 30,

The fair value of options was estimated at the date of grant using the Black-Scholes valuation model with the following weighted-average assumptions for the three and nine months ended September 30, 2023 and 2022:

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

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Restricted stock awards ("RSAs") granted to employees vest ratably over a four -year period.

The Company granted zero RSAs to employees of the Company during each of the three and six months ended June 30, 2023 and June 30, 2022.

The Company granted zero RSAs to employees of the Company during each of the three and nine months ended September 30, 2023 and September 30, 2022, respectively.

Number of Shares Weighted Average

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Surrendered for taxes ( 9,551 ) $ 78.89

Non-vested RSAs as of June 30, 2023

Non-vested RSAs as of September 30, 2023

$ 44,400 $ 78.89

There was $ 2.9 million of unrecognized stock-based compensation expense related to employees’ RSAs that is expected to be recognized over a weighted-average period of 1.7 years as of June 30, 2023.

The Company recorded stock-based compensation expense related to RSAs in the condensed consolidated statement of operations for the three and six months ended June 30, 2023 and 2022 as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

There was $ 2.5 million of unrecognized stock-based compensation expense related to employees’ RSAs that is expected to be recognized over a weighted-average period of 1.4 years as of September 30, 2023.

The Company recorded stock-based compensation expense related to RSAs in the condensed consolidated statement of operations for the three and nine months ended September 30, 2023 and 2022, as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

General and administrative $ 436 $ 418 $ 868 $ 899

Selling, general, and administrative

$ 437 $ 441 $ 1,305 $ 1,340

Total stock-based compensation $ 437 $ 441 $ 1,305 $ 1,340

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Restricted stock units (“RSUs”) granted to employees vest ratably over a four-year period.

The Company granted zero and 186,900 RSUs to employees of the Company during the three and six months ended June 30, 2023, and zero RSUs during the three and six months ended June 30, 2022, respectively.

The Company granted zero and 186,900 RSUs to employees of the Company during the three and nine months ended September 30, 2023, respectively, and zero RSUs during the three and nine months ended September 30, 2022, respectively.

Number of Shares Weighted Average

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Surrendered or forfeited ( 24,700 ) $ 81.91

Non-vested RSUs as of June 30, 2023

Non-vested RSUs as of September 30, 2023

162,200 $ 81.91

There was $ 13.0 million of unrecognized stock-based compensation expense related to employees’ RSU awards that is expected to be recognized over a weighted-average period of 3.7 years as of June 30, 2023.

The Company recorded stock-based compensation expense related to RSUs in the condensed consolidated statement of operations for the three and six months ended June 30, 2023 and 2022 as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

There was $ 11.3 million of unrecognized stock-based compensation expense related to employees’ RSU awards that is expected to be recognized over a weighted-average period of 3.4 years as of September 30, 2023.

The Company recorded stock-based compensation expense related to RSUs in the condensed consolidated statement of operations for the three and nine months ended September 30, 2023 and 2022, as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Research and Development $ 303 $ — $ 837 $ —

General and administrative 441 — 627 —

Selling, general, and administrative

Total stock-based compensation $ 673 $ — $ 1,835 $ —

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On a quarterly basis, management estimates the probable number of PSU’s that would vest until such time that the ultimate achievement of the performance criteria are known.

As of June 30, 2023, the Company estimates that 100 % of the PSUs granted will be eligible to vest.

The Company granted zero and 60,000 PSUs to employees of the Company during the three and six months ended June 30, 2023 and zero PSUs during the three and six months ended June 30, 2022.

As of September 30, 2023, the Company estimates that 100 % of the PSUs granted will be eligible to vest.

The Company granted zero and 60,000 PSUs to employees of the Company during the three and nine months ended September 30, 2023 and zero PSUs during the three and nine months ended September 30, 2022.

Number of Shares Weighted Average

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Surrendered or forfeited ( 10,000 ) $ 81.91

Non-vested PSUs as of June 30, 2023

Non-vested PSUs as of September 30, 2023

50,000 $ 81.91

There was $ 4.1 million of unrecognized stock-based compensation expense related to employees’ PSU awards that is expected to be recognized over a weighted-average period of 1.7 years as of June 30, 2023.

The Company recorded stock-based compensation expense related to PSUs in the condensed consolidated statement of operations for the three and six months ended June 30, 2023 and 2022 as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

There was $ 2.9 million of unrecognized stock-based compensation expense related to employees’ PSU awards that is expected to be recognized over a weighted-average period of 1.4 years as of September 30, 2023.

The Company recorded stock-based compensation expense related to PSUs in the condensed consolidated statement of operations for the three and nine months ended September 30, 2023 and 2022 as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

General and administrative $ 613 $ — $ 828 $ —

Selling, general, and administrative

$ 373 $ — $ 1,201 $ —

Total stock-based compensation $ 373 $ — $ 1,201 $ —

Shares remaining available for grant under the Plan were 1,126,321 , with a sublimit for incentive stock options of 4,282 , at June 30, 2023.

Following the FDA approval of VYJUVEK on May 19, 2023, the Company began capitalizing stock-based compensation associated with the allocation of labor costs related to work performed to manufacture VYJUVEK.

For the three and six months ended June 30, 2023, the Company capitalized $ 112 thousand in prepaid expenses and other current assets.

Historically, the Company capitalized the portion of stock-based compensation related to work performed on the construction of manufacturing facilities.

There was zero and $ 162 thousand and of stock-based compensation that was capitalized in property and equipment during the three and six months ended June 30, 2023 and $ 146 thousand and $ 287 thousand capitalized during the three and six months ended June 30, 2022, respectively.

Shares remaining available for grant under the Plan were 1,489,488 , with a sublimit for incentive stock options of 30,783 , at September 30, 2023.

After the FDA approval of VYJUVEK on May 19, 2023, the Company began capitalizing stock-based compensation associated with the allocation of labor costs related to work performed to manufacture VYJUVEK.

For the three and nine months ended September 30, 2023, the Company capitalized $ 410 thousand and $ 522 thousand, respectively, in inventory.

Historically, the Company also capitalized the portion of stock-based compensation related to work performed on the construction of our manufacturing facilities.

There was zero and $ 162 thousand of stock-based compensation that was capitalized in property and equipment during the three and nine months ended September 30, 2023 and $ 137 thousand and $ 423 thousand of stock-based compensation that was capitalized in property and equipment during the three and nine months ended September 30, 2022, respectively.

Gain from Sale of Priority Review Voucher

In August 2023, the Company entered into an agreement to sell the rare pediatric disease voucher (“PRV”), which was awarded to the Company in connection with the FDA’s approval of VYJUVEK.

The transaction closed in August 2023 and was not subject to any commissions or closing costs.

The proceeds of $ 100.0 million from the sale of the PRV were recorded as a gain from sale of priority review voucher on the Company’s condensed consolidated statement of operations as it did not have a carrying value at the time of the sale.

Subsequent Events

The Company evaluates events or transactions that occur after the balance sheet date, but prior to the issuance of the financial statements, to identify matters that require recognition or disclosure.

The Company concluded that no subsequent events have occurred, other than noted below, that would require recognition or disclosure in the condensed consolidated financial statements.

Andrew Orth, the Company’s Chief Commercial Officer, notified the Company that he was resigning from his position and his last day with the Company was August 2, 2023.

The Company concluded that no subsequent events have occurred, that would require recognition or disclosure in the condensed consolidated financial statements.

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