What changed in this filing

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Item 1. Financial Statements

2021-05-06 compared with 2020-11-05 · 91 added, 157 removed, 199 unchanged (55% of the section changed)

3 unchanged sentences

(In thousands, except par value data)

September 30,

Current assets:

10 unchanged sentences

Accounts payable and accrued expenses

Current portion of long-term debt, net

Current portion of long-term debt

Total current liabilities

Long-term debt, net

Operating lease liabilities, long-term

Long-term debt

Long-term operating lease liabilities

Other long-term liabilities

7 unchanged sentences

66,263 and 66,194 shares issued and outstanding as of

September 30, 2020 and December 31, 2019, respectively

March 31, 2021 and December 31, 2020, respectively

Additional paid-in capital

Accumulated other comprehensive income

Accumulated other comprehensive income (loss)

Accumulated deficit

5 unchanged sentences

(In thousands, except per share data)

Three Months Ended

Nine Months Ended

September 30,

Three Months Ended March 31,

Operating Expenses:

1 unchanged sentence

amounts of nil and $ 132 for the three months

ended September 30, 2020 and 2019, respectively,

and $ 195 and $ 284 for the nine months ended

September 30, 2020 and 2019, respectively)

ended March 31, 2021 and 2020, respectively)

General and administrative (includes related party

amounts of nil and $ 111 for the three months

ended September 30, 2020 and 2019, respectively,

and $ 187 and $ 262 for the nine months ended

September 30, 2020 and 2019, respectively)

ended March 31, 2021 and 2020, respectively)

Total operating expenses

1 unchanged sentence

Management fee income, related party

Interest income

Interest income, net

Interest expense

17 unchanged sentences

Balance at December 31, 2020

Issuance of common stock, net of offering costs

Share-based compensation expense

Issuance of common stock from exercise of options

and employee stock purchase plan

Other comprehensive loss

Balance at September 30, 2020

Comprehensive

Stockholders'

Income (Loss)

Balance at June 30, 2020

Share-based compensation expense

Issuance of common stock from exercise of options

Other comprehensive loss

Balance at September 30, 2020

See accompanying notes to unaudited condensed financial statements.

KURA ONCOLOGY, INC.

Condensed Statements of Stockholders’ Equity

(In thousands)

Balance at March 31, 2021

Comprehensive

2 unchanged sentences

Balance at December 31, 2019

Issuance of common stock, net of offering costs

Share-based compensation expense

Issuance of common stock from exercise of options

and employee stock purchase plan

Other comprehensive income

Balance at September 30, 2019

Comprehensive

Stockholders'

Income (Loss)

Balance at June 30, 2019

Share-based compensation expense

Issuance of common stock from exercise of options

Other comprehensive income

Balance at September 30, 2019

Balance at March 31, 2020

See accompanying notes to unaudited condensed financial statements.

2 unchanged sentences

(In thousands)

Nine Months Ended

September 30,

Three Months Ended March 31,

Operating Activities

2 unchanged sentences

Depreciation expense

Amortization of premium and accretion of discount on

Amortization of premium and accretion of discounts on

marketable securities, net

7 unchanged sentences

Purchases of marketable securities

Maturities and sales of marketable securities

Maturities of marketable securities

Purchases of property and equipment

Net cash used in investing activities

Net cash (used in) provided by investing activities

Financing Activities

Proceeds from issuance of common stock, net

Proceeds from exercise of stock options and

purchases under employee stock purchase plan

Proceeds from exercise of stock options

Repayment of long-term debt

Net cash provided by financing activities

Net increase in cash, cash equivalents and restricted cash

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

Cash, cash equivalents and restricted cash at beginning of period

8 unchanged sentences

We plan to advance our product candidates through a combination of internal development and strategic partnerships while maintaining significant development and commercial rights.

We presently have two key product candidates in clinical trials, tipifarnib and KO-539.

References in these Notes to Unaudited Condensed Financial Statements to the “Company,” “we,” “our” or “us,” refer to Kura Oncology, Inc.

19 unchanged sentences

Under the terms of an office lease entered into in March 2020, we are required to maintain a standby letter of credit during the term of the lease.

As of September 30, 2020, restricted cash of $ 0.2 million was pledged as collateral for the letter of credit.

As of March 31, 2021, restricted cash of $ 0.2 million was pledged as collateral for the letter of credit.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the unaudited condensed balance sheets that sum to the total of the amounts shown in the unaudited condensed statements of cash flows, in thousands:

September 30, 2020

March 31, 2021

December 31, 2020

September 30, 2019

March 31, 2020

December 31, 2019

1 unchanged sentence

Restricted cash

Allowance for Credit Losses

For available-for-sale debt securities in an unrealized loss position, we first assess whether we intend to sell, or it is more likely than not that we will be required to sell, the security before recovery of its amortized cost basis.

If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through earnings.

For available-for-sale debt securities that do not meet the aforementioned criteria, we evaluate whether the decline in fair value has resulted from credit losses or other factors.

In making this assessment, we consider the severity of the impairment, any changes in interest rates, changes to the underlying credit ratings and forecasted recovery, among other factors.

The credit-related portion of unrealized losses, and any subsequent improvements, are recorded in interest income through an allowance account.

Any impairment that has not been recorded through an allowance for credit losses is included in other comprehensive income (loss) on the unaudited condensed statements of operations and comprehensive loss.

Concentration of Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of cash, cash equivalents and short-term investments.

We maintain deposits in federally insured financial institutions in excess of federally insured limits.

We have established guidelines to limit our exposure to credit risk by placing investments with high credit quality financial institutions, diversifying our investment portfolio and placing investments with maturities that maintain safety and liquidity.

We periodically review and modify these guidelines to maximize trends in yields and interest rates without compromising safety and liquidity.

Net Loss per Share

Net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents.

Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents.

Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of common shares and common stock equivalents outstanding for the period determined using the treasury-stock method.

For purposes of this calculation, outstanding stock options, an outstanding warrant and employee stock purchase plan rights are excluded from the calculation of diluted net loss per common share for the periods presented as their effect would be anti-dilutive.

For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the antidilutive effect of the securities.

More specifically, for the three and nine months ended September 30, 2020 and 2019 , outstanding stock options, an outstanding warrant and employee stock purchase plan rights totaling approximately 5,178,000 shares and 4,099,000 shares, respectively, were excluded from the calculation of diluted net loss per share because to do so would be anti-dilutive.

Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2016-13, Financial Instruments-Credit Losses:

Measurement of Credit Losses on Financial Instruments, in order to improve financial reporting of expected credit losses on financial instruments and other commitments to extend credit.

ASU 2016-13 requires that an entity measure and recognize expected credit losses for financial assets held at amortized cost and replaces the incurred loss impairment methodology in prior GAAP with a methodology that requires consideration of a broader range of information to estimate credit losses, and establishes additional disclosures related to credit risks.

We adopted ASU 2016-13 on January 1, 2020.

The adoption of the new standard did not have a material impact on our unaudited condensed financial statements.

We will continue to actively monitor the impact of the ongoing coronavirus (COVID-19) pandemic on expected credit losses.

We invest in available-for-sale securities consisting of money market funds, U.S.

Treasury securities, corporate debt securities and commercial paper.

Common stock equivalents outstanding are comprised of stock options, restricted stock units, a warrant and employee stock purchase plan rights and are only included in the calculation of diluted earnings per common share when net income is reported and their effect is dilutive.

Because of our net loss for the three months ended March 31, 2021 and 2020 , outstanding common stock equivalents totaling approximately 6,834,000 and 5,368,000 , respectively, were excluded from the calculation of diluted net loss per common share because their effect was anti-dilutive.

We invest in available-for-sale securities consisting of money market funds, commercial paper, corporate debt securities and U.S.

Treasury securities.

Available-for-sale securities are classified as part of either cash and cash equivalents or short-term investments on our unaudited condensed balance sheets.

The following tables summarize, by major security type, our investments that are measured at fair value on a recurring basis, in thousands:

September 30, 2020

The following tables summarize, by major security type, our short-term investments that are measured at fair value on a recurring basis, in thousands:

March 31, 2021

Cash equivalents:

1 unchanged sentence

Short-term investments:

Treasury securities

Commercial paper

Corporate debt securities

Treasury securities

Total short-term investments

2 unchanged sentences

Money market funds

Commercial paper

Total cash equivalents

Short-term investments:

Treasury securities

Commercial paper

Corporate debt securities

Treasury securities

Total short-term investments

The available-for-sale investments are classified as current assets, even though the stated maturity date may be one year or more beyond the current balance sheet date, which reflects management’s intention to use the proceeds from sales of these securities to fund our operations, as necessary.

As of September 30, 2020, all of our short-term investments had maturities less than one year.

Realized gains and losses were de minimus for the three and nine months ended September 30, 2020.

We evaluate our available-for-sale debt securities for credit losses when the amortized cost basis exceeds fair value.

The credit-related portion of unrealized losses, and any subsequent improvements, are recorded in interest income through an allowance account.

Short-term investments are classified as current assets, even though the stated maturity date may be one year or more beyond the current balance sheet date, which reflects management’s intention to use the proceeds from sales of these securities to fund our operations, as necessary.

As of March 31, 2021 and December 31, 2020, short-term investments of $ 310.2 million and $ 242.6 million, respectively, had maturities less than one year, and short-term investments of $ 182.8 million and $ 65.2 million, respectively, had maturities between one to two years.

Realized gains and losses were de minimis for the three months ended March 31, 2021 and 2020.

As of March 31, 2021, 16 available-for-sale debt securities with a fair market value of $ 149.5 million were in gross unrealized loss positions, none of which were in such position for greater than 12 months.

We do not intend to sell these available-for-sale debt securities, and it is not more likely than not that we will be required to sell these securities prior to recovery of their amortized cost basis.

Based on our review of these available-for-sale debt securities, no ne of the unrealized losses is the result of a credit loss.

As such, we have no allowance for credit losses as of March 31, 2021 and December 31, 2020.

Unrealized gains and losses that are not credit-related are included in accumulated other comprehensive income (loss).

When evaluating an investment for impairment, we review factors such as the severity of the impairment, changes in underlying credit ratings, forecasted recovery, our intent to sell or the likelihood that we would be required to sell the investment before its anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made.

As of September 30, 2020, marketable securities with a fair market value of $ 8.1 million were in immaterial gross unrealized loss positions.

Based on our review of these securities, we believe none of the unrealized loss is a result of a credit loss as of September 30, 2020 because we do not intend to sell these securities and it is not more-likely-than-not that we will be required to sell these securities prior to recovery of their amortized cost basis.

Fair Value Measurements

As of September 30, 2020 and December 31, 2019, we had cash equivalents and short-term investments measured at fair value on a recurring basis.

As of March 31, 2021 and December 31, 2020, we had cash equivalents and short-term investments measured at fair value on a recurring basis.

Available-for-sale marketable securities consist of U.S.

Treasury securities, which were measured at fair value using Level 1 inputs, and corporate debt securities and commercial paper, which were measured at fair value using Level 2 inputs.

Treasury securities, which are measured at fair value using Level 1 inputs, and commercial paper and corporate debt securities which are measured at fair value using Level 2 inputs.

We determine the fair value of Level 2 related securities with the aid of valuations provided by third parties using proprietary valuation models and analytical tools.

2 unchanged sentences

The following tables summarize, by major security type, our cash equivalents and short-term investments that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy, in thousands:

September 30, 2020

March 31, 2021

Cash equivalents:

1 unchanged sentence

Short-term investments:

Treasury securities

Commercial paper

Corporate debt securities

Treasury securities

Total short-term investments

2 unchanged sentences

Money market funds

Commercial paper

Total cash equivalents

Short-term investments:

Treasury securities

Commercial paper

Corporate debt securities

Treasury securities

Total short-term investments

3 unchanged sentences

Property and equipment consisted of the following, in thousands:

September 30, 2020

March 31, 2021

December 31, 2020

Computer software and equipment and laboratory equipment

Furniture and fixtures

Leasehold improvements

Furniture and fixtures

Computer software and equipment and laboratory equipment

Property and equipment, gross

1 unchanged sentence

Property and equipment, net

Accounts payable and accrued liabilities consisted of the following, in thousands:

September 30, 2020

Accounts payable and accrued expenses consisted of the following, in thousands:

March 31, 2021

December 31, 2020

Accounts payable

Accrued research and development expenses

Accrued clinical trial research and development expenses

Accrued other research and development expenses

Accrued compensation and benefits

Lease liability, current portion

Operating lease liability, current portion

Other accrued expenses

Total accounts payable and accrued expenses

Long-Term Debt

On April 3, 2020, we entered into the First Amendment to Loan and Security Agreement with Silicon Valley Bank to extend the additional draw period.

Under the terms of the loan and security agreement, as amended, we may, at our sole discretion, borrow up to an additional $ 12.5 million at any time until November 30, 2020.

There were no other changes to the terms of the loan and security agreement.

We had a sublease with a related party for office space in San Diego, California, or Sublease, and a lease for office space in Cambridge, Massachusetts, that existed before January 1, 2019 and were classified as operating leases.

In March 2019, the Sublease was amended to extend the expiration date from October 31, 2019 to April 30, 2020 with the monthly rent increased from approximately $ 16,000 to approximately $ 24,000 per month effective November 1, 2019 .

In April 2020, the Sublease was amended to extend the expiration date from April 30, 2020 to June 30, 2020 with no change to the amount of monthly rent.

The Sublease was terminated in June 2020 .

See Note 10, Related Party Transactions, for further details of the Sublease.

The lease for office space in Cambridge, Massachusetts expired on July 31, 2020 .

In January 2020, we entered into an office lease agreement for our corporate offices in San Diego, California, which would have commenced on May 1, 2020 .

In May 2020, we entered into an amendment to such office lease agreement that subsequently amended the commencement date to August 1, 2020 and extended the lease expiration to November 30, 2025 .

In January 2020, we entered into an office lease agreement for our corporate offices in San Diego, California.

This agreement was originally scheduled to commence in May 2020 but was subsequently amended with an amended commencement date of August 1, 2020 and an extended lease expiration date of November 30, 2025 .

We refer to such office lease agreement, as amended, as the San Diego Lease.

The San Diego Lease provides for a one -time option to extend for a period of five additional years.

The monthly base rent is approximately $ 58,000 for the first year, which amount will increase by 3.0 % per year over the initial term.

The monthly base rent is approximately $ 58,000 for the first year, with such amount increasing by 3.0 % per year over the initial term.

In addition, the San Diego Lease is subject to charges for common area maintenance and other costs.

The San Diego Lease provides a four-month rent abatement period during the first year of the San Diego Lease and approximately $ 1.0 million in reimbursement for allowable tenant improvements, which effectively reduce the total lease payments owed for the San Diego Lease.

The San Diego Lease provides a four-month rent abatement period during the first year and approximately $ 1.0 million in reimbursements for allowable tenant improvements, which effectively reduce the total lease payments owed for the San Diego Lease.

For accounting purposes, the lease commencement date was determined to be March 2020 when we had control of the office space.

We recorded an operating lease right-of-use, or ROU, asset and operating lease liability of approximately $ 2.2 million on our unaudited condensed balance sheet on the lease commencement date in the first quarter of 2020.

In March 2020, we entered into a lease agreement for office space in Boston, Massachusetts, or the Boston Lease, which commenced on April 1, 2020 and expires on July 31, 2024 .

The Boston Lease provides for a one -time option to extend the Boston Lease for a period of five additional years after the expiration of the initial lease term .

Under the terms of the Boston Lease, monthly base rent is approximately $ 105,500 for the first year, subject to an annual fixed percentage increase of 2.0 % on April 1 st of each year.

Under the terms of the Boston Lease, monthly base rent was approximately $ 105,500 for the first year, subject to an annual fixed percentage increase of 2.0 % on April 1 st of each year.

In addition, we are obligated to pay for common area maintenance and other costs.

Under the terms of the Boston Lease, we are required to maintain a standby letter of credit of approximately $ 0.2 million during the term of the lease.

We recorded an operating lease ROU asset and operating lease liability of approximately $ 5.1 million on our unaudited condensed balance sheet on the lease commencement date in the second quarter of 2020.

We recorded an operating lease ROU asset and operating lease liability of approximately $ 5.1 million on our unaudited condensed balance sheet on the lease commencement date during the quarter ended June 30, 2020.

In May 2020, we entered into a two-year sublease for certain designated lab space in San Diego, California, which commenced on June 9, 2020 .

Under the terms of the sublease, the monthly base rent is approximately $ 12,500 in the first year, subject to an annual fixed percentage increase of 5.0 % in June of the following year.

Under the terms of the sublease, the monthly base rent is approximately $ 12,500 for the first year, subject to an annual fixed percentage increase of 5.0 % in June of the following year.

We are not obligated to pay for common area maintenance and other costs.

We recorded an operating lease ROU asset and operating lease liability of approximately $ 0.3 million on our unaudited condensed balance sheet on the lease commencement date in the second quarter of 2020.

Maturities of lease liabilities as of September 30, 2020 are as follows, in thousands:

We recorded an operating lease ROU asset and operating lease liability of approximately $ 0.3 million on our unaudited condensed balance sheet on the lease commencement date during the quarter ended June 30, 2020.

Maturities of lease liabilities as of March 31, 2021 are as follows, in thousands:

Year Ending December 31,

3 unchanged sentences

Total operating lease liabilities

As of December 31, 2019, we had remaining lease liabilities of approximately $ 0.3 million which will mature in 2020.

As of September 30, 2020 and December 31, 2019, total operating lease ROU assets were $ 6.7 million and $ 0.2 million, respectively.

As of September 30, 2020 and December 31, 2019, total operating lease liabilities were $ 7.9 million and $ 0.3 million, respectively, $ 6.0 million of which was recorded as noncurrent lease liability as of September 30, 2020.

As of September 30, 2020 and December 31, 2019, the weighted-average discount rate was 5.5 % and 6.5 %, and the weighted-average remaining lease term was 4.3 years and 0.5 years, respectively.

Total cash paid for amounts included in the measurement of lease liabilities, net of tenant improvement reimbursements, was $ 0.1 million and $ 0.4 million for the nine months ended September 30, 2020 and 2019, respectively.

ROU assets obtained in exchange for operating lease liabilities were $ 7.5 million and $ 0.7 million for the nine months ended September 30, 2020 and 2019, respectively.

Total operating lease expense was approximately $ 0.5 million and $ 0.1 million for the three months ended September 30, 2020 and 2019, respectively.

Total operating lease expense was approximately $ 1.2 million and $ 0.4 million for the nine months ended September 30, 2020 and 2019, respectively.

We have entered into short-term operating leases that are not recorded on the unaudited condensed balance sheet.

Total rent expense of all operating leases for the three months ended September 30, 2020 and 2019 was approximately $ 0.5 million and $ 0.1 million, respectively.

Total rent expense of all operating leases for the nine months ended September 30, 2020 and 2019 was approximately $ 1.4 million and $ 0.4 million, respectively.

Stockholders’ Equity

In May 2020, we completed a public offering in which we sold an aggregate of 10,465,000 shares of common stock at a price of $ 13.75 per share.

Net proceeds from the public offering, after deducting underwriting discounts, commissions and offering expenses, were approximately $ 134.9 million.

In June 2019, we completed a public offering in which we sold an aggregate of 6,785,000 shares of common stock at a price of $ 17.00 per share.

Net proceeds from the public offering, after deducting underwriting discounts, commissions and offering expenses, were approximately $ 108.1 million.

As of March 31, 2021 and December 31, 2020, total operating lease ROU assets were $ 5.9 million and $ 6.3 million, respectively.

As of March 31, 2021, total operating lease liabilities were $ 7.3 million, of which $ 5.2 million were recorded as long-term lease liabilities.

As of December 31, 2020, total operating lease liabilities were $ 7.7 million, of which $ 5.6 million were recorded as long-term lease liabilities.

As of March 31, 2021 and December 31, 2020, the weighted-average discount rate was 5.5 %, and the weighted-average remaining lease term was 3.8 years and 4.1 years, respectively.

Total cash paid for amounts included in the measurement of operating lease liabilities was $ 0.5 million and $ 0.2 million for the three months ended March 31, 2021 and 2020, respectively.

There were no ROU assets obtained in exchange for operating lease liabilities for the three months ended March 31, 2021.

ROU assets obtained in exchange for operating lease liabilities were $ 2.2 million for the three months ended March 31, 2020.

Total operating lease expense was approximately $ 0.5 million and $ 0.2 million for the three months ended March 31, 2021 and 2020, respectively.

We have also entered into short-term operating leases that are not recorded on the unaudited condensed balance sheets .

Total rent expense for the three months ended March 31, 2021 and 2020 was approximately $ 0.5 million and $ 0.3 million, respectively.

Share-Based Compensation

The following table summarizes share-based compensation expense for all share-based compensation arrangements, in thousands:

Three Months Ended

Nine Months Ended

September 30,

Three Months Ended March 31,

Research and development

1 unchanged sentence

Total share-based compensation expense

As of September 30, 2020, unrecognized compensation costs related to employee stock options was approximately $ 31.6 million, which is expected to be recognized over a weighted average period of approximately 2.8 years.

During the three months ended March 31, 2021, we began issuing restricted stock units, or RSUs.

As of March 31, 2021, unrecognized estimated compensation expense related to stock options and RSUs was approximately $ 61.4 million and $ 5.7 million, respectively, which is expected to be recognized over a weighted average period of approximately 2.9 years and 3.8 years, respectively.

Related Party Transactions

Our president and chief executive officer is also the sole managing member of Araxes Pharma LLC, or Araxes, and is a significant stockholder of each of us and Araxes.

The following is a summary of related party transactions for the three and nine months ended September 30, 2020 and 2019:

Facility Sublease

We subleased office space in San Diego, California from Araxes pursuant to the Sublease.

The Sublease commenced in June 2017 and would have expired on October 31, 2019 .

In March 2019, the Sublease was amended to extend until April 30, 2020 , and the monthly rent increased to approximately $ 24,000 per month effective November 1, 2019 , corresponding to the increase in Araxes’ monthly re nt.

In April 2020, the Sublease was amended to extend the expiration date to June 30, 2020 with no change to the amount of monthly rent.

The Sublease was terminated in June 2020 .

For the three months ended September 30, 2020 and 2019, rent expense, including operating costs, related to our sublease was approximately nil and $ 0.1 million, respectively.

For the nine months ended September 30, 2020 and 2019, rent expense, including operating costs, related to our Sublease was approximately $ 0.2 million and $ 0.3 million, respectively.

Management Fees

Our president and chief executive officer is also the sole managing member and a significant stockholder of Araxes Pharma LLC, or Araxes.

We have a management services agreement with Araxes pursuant to which Araxes pays us monthly fees for management services calculated based on costs incurred by us in the provision of services to Araxes, plus a reasonable mark-up.

For the three months ended September 30, 2020 and 2019, we recorded approximately $ 0.1 million in management fee income in both periods.

For the nine months ended September 30, 2020 and 2019, we recorded approximately $ 0.1 million and $ 0.2 million in management fee income, respectively.

In addition, the agreement allows for Araxes to reimburse us an amount equal to the number of full-time equivalents, or FTE, performing research and development services for Araxes, at an annual FTE rate of approximately $ 382,000 , plus actual expenses as reasonably incurred.

The initial term of this agreement expired on December 31, 2015 but, pursuant to the terms of the agreement, renews automatically for additional consecutive one-year periods.

The agreement may be terminated by either party with a notice of at least 30 days prior to the expiration of the then-renewal term.

For the three and nine months ended September 30, 2020 and 2019, we recorded de minimus reimbursements in each period, which was recorded as a reduction to research and development expenses, on our unaudited condensed statements of operations and comprehensive loss.

Services Agreement

We have a services agreement with Wellspring Biosciences, Inc., or Wellspring, a wholly owned subsidiary of Araxes, pursuant to which we pay Wellspring for research and development services provided to us in an amount equal to the number of FTE’s performing the services, at an annual FTE rate of $ 400,000 , plus actual expenses as reasonably incurred.

The initial term of this services agreement expired on December 31, 2015 but, pursuant to the terms of the agreement, renews automatically for additional consecutive one-year periods.

The agreement may be terminated by either party with a notice of at least 30 days prior to the expiration of the then-renewal term.

For the three months ended September 30, 2020 and 2019, we recognized approximately nil and $ 0.1 million from research and development services provided to us under this agreement as research and development expense on our unaudited condensed statements of operations and comprehensive loss.

For the nine months ended September 30, 2020 and 2019, we recognized approximately $ 0.1 million in both periods.

For the three months ended March 31, 2021 and 2020, we recorded $ 8,000 and $ 15,000 , respectively, in management fee income.

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