What changed in this filing

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Item 1. Financial Statements

2021-11-04 compared with 2021-08-05 · 59 added, 58 removed, 283 unchanged (29% of the section changed)

3 unchanged sentences

(In thousands, except par value data)

September 30,

Current assets:

23 unchanged sentences

66,504 and 66,194 shares issued and outstanding as of

June 30, 2021 and December 31, 2020, respectively

September 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Operating Expenses:

Research and development (includes related party

amounts of nil and $ 63 for the three months

ended June 30, 2021 and 2020, respectively, and nil and $ 195 for the six months ended June 30, 2021 and 2020, respectively)

General and administrative (includes related party

amounts of nil and $ 76 for the three months

ended June 30, 2021 and 2020, respectively, and nil and $ 187 for the six months ended June 30, 2021 and 2020, respectively)

Research and development

General and administrative

Total operating expenses

24 unchanged sentences

Other comprehensive loss

Balance at June 30, 2021

Balance at September 30, 2021

Comprehensive

1 unchanged sentence

Income (Loss)

Balance at March 31, 2021

Balance at June 30, 2021

Share-based compensation expense

Issuance of common stock from exercises of options

and employee stock purchase plan

Other comprehensive loss

Balance at June 30, 2021

Other comprehensive income

Balance at September 30, 2021

See accompanying notes to unaudited condensed financial statements.

10 unchanged sentences

and employee stock purchase plan

Other comprehensive income

Balance at June 30, 2020

Other comprehensive loss

Balance at September 30, 2020

Comprehensive

1 unchanged sentence

Income (Loss)

Balance at March 31, 2020

Issuance of common stock, net of offering costs

Balance at June 30, 2020

Share-based compensation expense

Issuance of common stock from exercises of options

and employee stock purchase plan

Other comprehensive loss

Balance at June 30, 2020

Balance at September 30, 2020

See accompanying notes to unaudited condensed financial statements.

2 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended

September 30,

Operating Activities

16 unchanged sentences

Purchases of property and equipment

Net cash (used in) provided by investing activities

Net cash used in investing activities

Financing Activities

36 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 June 30, 2021, restricted cash of $ 0.2 million was pledged as collateral for the letter of credit.

As of September 30, 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:

June 30, 2021

September 30, 2021

December 31, 2020

June 30, 2020

September 30, 2020

December 31, 2019

17 unchanged sentences

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 and six months ended June 30, 2021 and 2020 , common stock equivalents outstanding at June 30, 2021 and 2020 totaling approximately 7,002,000 and 5,141,000 , respectively, were excluded from the calculation of diluted net loss per common share because their effect was anti-dilutive.

Because of our net loss for the three and nine months ended September 30, 2021 and 2020 , common stock equivalents outstanding at September 30, 2021 and 2020 totaling approximately 6,950,000 and 5,178,000 , respectively, were excluded from the calculation of diluted net loss per common share because their effect was anti-dilutive.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that we adopt as of the specified effective date.

We have evaluated recently issued accounting pronouncements and, based on our preliminary assessment, we do not believe any will have a material impact on our unaudited condensed financial statements or related footnote disclosures.

We have evaluated recently issued accounting

pronouncements and , based on our preliminary assessment, we do not believe any will have a material impact on our unaudited con dens ed financial statements or related footnote disclosures.

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

4 unchanged sentences

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

June 30, 2021

September 30, 2021

Cash equivalents:

17 unchanged sentences

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 June 30, 2021 and December 31, 2020, short-term investments of $ 282.5 million and $ 242.6 million, respectively, had maturities less than one year, and short-term investments of $ 246.0 million and $ 65.2 million, respectively, had maturities between one to three years.

We had no realized gains or losses for the three and six months ended June 30, 2021.

As of June 30, 2021, 20 available-for-sale debt securities with a fair market value of $ 200.3 million were in gross unrealized loss positions, none of which were in such position for greater than 12 months.

As of September 30, 2021 and December 31, 2020, short-term investments of $ 320.9 million and $ 242.6 million, respectively, had maturities less than one year, and short-term investments of $ 183.4 million and $ 65.2 million, respectively, had maturities between one to three years.

We had no realized gains or losses for the three and nine months ended September 30, 2021.

As of September 30, 2021, 22 available-for-sale debt securities with a fair market value of $ 200.2 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 June 30, 2021 and December 31, 2020.

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 September 30, 2021 and December 31, 2020 .

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

Fair Value Measurements

As of June 30, 2021 and December 31, 2020, we had cash equivalents and short-term investments measured at fair value on a recurring basis.

As of September 30, 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 consisted of U.S.

6 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:

June 30, 2021

September 30, 2021

Cash equivalents:

18 unchanged sentences

Property and equipment consisted of the following, in thousands:

June 30, 2021

September 30, 2021

December 31, 2020

1 unchanged sentence

Furniture and fixtures

Computer software and equipment and laboratory equipment

Laboratory and computer equipment

Property and equipment, gross

2 unchanged sentences

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

June 30, 2021

September 30, 2021

December 31, 2020

12 unchanged sentences

In accordance with ASC 470-50, Debt Modifications and Extinguishments , we accounted for the transaction as an extinguishment of debt.

Accordingly, we recorded a loss of approximately $ 0.2 million for each of the three and six months ended June 30, 2021, which is included in interest expense on the unaudited condensed statements of operations and comprehensive loss.

Accordingly, we recorded a loss of approximately $ 0.2 million in the second quarter of 2021, which is included in interest expense on the unaudited condensed statements of operations and comprehensive loss for the nine months ended September 30, 2021.

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

16 unchanged sentences

The Sublease commenced on June 9, 2020 .

In May 2021, the Sublease was amended to modify the lease expiration date to August 9, 2021 , with the monthly base rent increased from approximately $ 12,500 to approximately $ 16,000 effective June 2021.

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

In May 2021, the Sublease was amended to shorten the lease term and increase the monthly base rent from approximately $ 12,500 to approximately $ 16,000 effective June 2021.

The lease expired on August 9, 2021 .

We were 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 during the quarter ended June 30, 2020.

In May 2021, we entered into an operating lease agreement for lab and office space in San Diego, California, or the Morehouse Lease, which is anticipated to commence on August 10, 2021 and expires on August 31, 2025 .

In May 2021, we entered into an operating lease agreement for lab and office space in San Diego, California, or the Morehouse Lease, which commenced on August 10, 2021 and expires on August 31, 2025 .

Under the terms of the Morehouse Lease, the monthly base rent is approximately $ 24,000 for the first year, subject to an annual fixed percentage increase of 3 % each year.

The Morehouse Lease provides approximately $ 106,000 in reimbursements for allowable tenant improvements, which effectively reduce the total lease payments owed for the Morehouse Lease.

The property is undergoing renovations for tenant improvements to install certain lab and office space upgrades.

The Morehouse Lease provided approximately $ 106,000 in reimbursements for allowable tenant improvements, which effectively reduced the total lease payments owed for the Morehouse Lease.

We are obligated to pay for common area maintenance and other costs associated with the Morehouse Lease.

For accounting purposes, the lease commencement date is estimated to be July 2021 when we expect to have control of the lab and office space.

Maturities of lease liabilities as of June 30, 2021 are as follows, in thousands:

For accounting purposes, the lease commencement date was determined to be July 2021 when we had control of the lab and office space.

We recorded an operating lease ROU asset and operating lease liability of approximately $ 1.0 million on our unaudited condensed balance sheet on the lease commencement date during the quarter ended September 30, 2021.

Maturities of lease liabilities as of September 30, 2021 are as follows, in thousands:

Year Ending December 31,

3 unchanged sentences

Total operating lease liabilities

As of June 30, 2021 and December 31, 2020, total operating lease ROU assets were $ 5.4 million and $ 6.3 million, respectively.

As of June 30, 2021, total operating lease liabilities were $ 6.7 million, of which $ 4.8 million were recorded as long-term lease liabilities.

As of September 30, 2021 and December 31, 2020, total operating lease ROU assets were $ 6.0 million and $ 6.3 million, respectively.

As of September 30, 2021, total operating lease liabilities were $ 7.4 million, of which $ 5.1 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 June 30, 2021 and December 31, 2020, the weighted-average discount rate was 5.5 %, and the weighted-average remaining lease term was 3.7 years and 4.1 years, respectively.

Total cash paid for amounts included in the measurement of operating lease liabilities was $ 1.1 million for the six months ended June 30, 2021 and $ 0.1 million, net of tenant improvement reimbursements, for the six months ended June 30, 2020.

There were no ROU assets obtained in exchange for operating lease liabilities for the six months ended June 30, 2021.

ROU assets obtained in exchange for operating lease liabilities were $ 7.5 million for the six months ended June 30, 2020.

Total operating lease expense was approximately $ 0.5 million and $ 0.6 million for the three months ended June 30, 2021 and 2020, respectively.

Total operating lease expense was approximately $ 1.0 million and $ 0.7 million for the six months ended June 30, 2021 and 2020, respectively.

We have also entered into short-term operating leases which expired in 2020 that are not recorded on the unaudited condensed balance sheets .

Total rent expense for the three months ended June 30, 2021 and 2020 was approximately $ 0.5 million and $ 0.6 million, respectively.

Total rent expense for the six months ended June 30, 2021 and 2020 was approximately $ 1.0 million and $ 0.9 million, respectively .

As of September 30, 2021 and December 31, 2020, the weighted-average discount rate was 5.5 %, and the weighted-average remaining lease term was 3.5 years and 4.1 years, respectively.

Total cash paid for amounts included in the measurement of operating lease liabilities, net of tenant improvement reimbursements, was $ 1.5 million and $ 0.1 million for the nine months ended September 30, 2021 and 2020, respectively.

ROU assets obtained in exchange for operating lease liabilities were $ 1.0 million and $ 7.5 million for the nine months ended September 30, 2021 and 2020, respectively.

Total operating lease expense for the three months ended September 30, 2021 and 2020 was approximately $ 0.5 million in both periods.

Total operating lease expense for the nine months ended September 30, 2021 and 2020 was approximately $ 1.5 million and $ 1.2 million, respectively.

entered into short-term operating leases which expired in 2020 that are not recorded on the unaudited condensed balance sheet s .

Total rent expense for the three months ended September 30, 2021 and 2020 was approximately $ 0.5 million in both periods .

Total rent expense for the nine months ended September 30, 2021 and 2020 was approximately $ 1.5 million and $ 1.4 million, respectively .

Share-Based Compensation

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Research and development

2 unchanged sentences

During 2021, we began issuing restricted stock units, or RSUs.

As of June 30, 2021, unrecognized estimated compensation expense related to stock options and RSUs was approximately $ 58.5 million and $ 5.3 million, respectively, which is expected to be recognized over a weighted average period of approximately 2.8 years and 3.6 years, respectively.

As of September 30, 2021, unrecognized estimated compensation expense related to stock options and RSUs was approximately $ 55.0 million and $ 4.4 million, respectively, which is expected to be recognized over a weighted average period of approximately 2.6 years and 3.3 years, respectively.

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