What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-08-07 compared with 2023-05-15 · 79 added, 50 removed, 155 unchanged (45% of the section changed)

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This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act).

All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, business strategy, research and development plans, the anticipated timing, costs, design and conduct of our ongoing and planned preclinical studies and planned clinical trials for lorundrostat and any future product candidates, the timing and likelihood of regulatory filings and approvals for lorundrostat and any future product candidates, our ability to commercialize our product candidates, if approved, the impact of the COVID-19 pandemic on our business, the pricing and reimbursement of our product candidates, if approved, the potential to develop future product candidates, the potential benefits of strategic collaborations and our intent to enter into any strategic arrangements, the timing and likelihood of success, and plans and objectives of management for future operations and future results of anticipated product development efforts, are forward-looking statements.

All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, business strategy, research and development plans, the anticipated timing, costs, design, and conduct of our ongoing and planned preclinical studies and planned clinical trials for lorundrostat and any future product candidates, the timing and likelihood of regulatory filings and approvals for lorundrostat and any future product candidates, our ability to commercialize our product candidates, if approved, the potential to develop future product candidates, the potential benefits of strategic collaborations and our intent to enter into any strategic arrangements, the timing and likelihood of success, and plans and objectives of management for future operations and future results of anticipated product development efforts, are forward-looking statements.

These statements involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.

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We are a clinical-stage biopharmaceutical company focused on developing medicines to target diseases driven by abnormally elevated aldosterone.

Our product candidate, lorundrostat, is a proprietary, orally administered, highly selective aldosterone synthase inhibitor that we are initially developing for the treatment of patients with uncontrolled hypertension (uHTN) or resistant hypertension (rHTN).

Our clinical-stage product candidate, lorundrostat, is a proprietary, orally administered, highly selective aldosterone synthase inhibitor that we are initially developing for the

treatment of cardiorenal conditions affected by abnormally elevated aldosterone, including hypertension and chronic kidney disease (CKD).

In the United States, there are over 115 million patients who have sustained elevated blood pressure (BP), or hypertension, and more than half of this population fails to achieve their BP goals, defined as BP of below 130/80 mmHg, with currently available medications.

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Patients with hypertension that persists despite taking two or more medications have 1.8 and 2.5 times greater mortality risk due to either cardiovascular disease or stroke, respectively.

In a Phase 2 proof-of-concept clinical trial evaluating 200 subjects with uHTN or rHTN (Target-HTN), lorundrostat demonstrated a clinically meaningful and statistically significant reduction in BP with once-daily dosing and was well tolerated.

In addition to hypertension, we intend to develop lorundrostat for the treatment of chronic kidney disease (CKD) and believe that our product candidate holds promise to be an innovative solution for the rapidly growing unmet need in multiple cardiorenal disorders.

In a Phase 2 proof-of-concept clinical trial evaluating 200 subjects with uncontrolled hypertension (uHTN) or resistant hypertension (rHTN), lorundrostat demonstrated a clinically meaningful and statistically significant reduction in BP with once-daily dosing and was well tolerated.

In addition to hypertension, we intend to develop lorundrostat for the treatment of CKD and believe that our product candidate holds promise to be an innovative solution for the rapidly growing unmet need in multiple cardiorenal disorders.

Clinical Highlights

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The topline data from this trial is expected in the first half of 2024.

We also plan to initiate our second pivotal trial, Launch-HTN, a randomized, double-blind, placebo-controlled Phase 3 clinical trial in the second half of 2023 to evaluate the safety and efficacy of lorundrostat for the treatment of uHTN or rHTN, when used as an add-on therapy to prescribed treatment of two or more antihypertensive medications in up to approximately 1,000 adult subjects.

We also plan to initiate our second pivotal trial, Launch-HTN, a randomized, double-blind, placebo-controlled Phase 3 clinical trial in the second half of 2023 to evaluate the safety and efficacy of lorundrostat for the treatment of uHTN or rHTN, when used as an add-on therapy to prescribed treatment of two to five antihypertensive medications in up to approximately 1,000 adult subjects.

The trial is expected to have a similar design as Advance-HTN.

The topline data from this trial is expected in mid-2025.

In mid-2023, we also plan to initiate an open-label extension trial to obtain additional safety data.

All subjects in the pivotal hypertension program, including the Advance-HTN and Launch-HTN trials will be given the opportunity to participate.

In mid-2023, we initiated an open-label extension trial to obtain additional safety data.

All subjects in the pivotal hypertension program, including the Advance-HTN and Launch-HTN trials, will be given the opportunity to participate in the extension trial.

Other Indications

Lorundrostat has been developed to normalize the production of aldosterone, and we believe this mechanism can be applied to other indications where abnormal aldosterone biology plays a role.

We plan to initiate a randomized, double-blind, placebo-controlled Phase 2 trial in mid-2023 to evaluate the safety and efficacy of lorundrostat for the treatment of uHTN or rHTN in a CKD population.

The topline data from this trial is expected in the first half of 2024.

Uninhibited aldosterone is known to play a critical role in the progression of CKD, which affects over 23 million people in the United States.

Furthermore, we may expand the development of lorundrostat into additional cardiorenal indications.

Lorundrostat has been developed to normalize the production of aldosterone, and we believe this mechanism can be applied to other indications where abnormal aldosterone biology plays a role, including CKD and cardiorenal indications.

Uninhibited aldosterone is known to play a critical role in the progression of CKD.

CKD is characterized by the gradual loss of kidney function, is estimated to affect more than 10% of the global population and over 23 million people in the United States, and is one of the leading causes of mortality worldwide.

According to the U.S.

Centers for Disease Control and Prevention (CDC), an estimated 1-in-7 (15%) of U.S.

adults have CKD.

Diabetes and hypertension are responsible for approximately two-thirds of CKD cases.

Early detection and treatment can often keep CKD from getting worse.

When CKD progresses, it may eventually lead to kidney failure, which requires dialysis or a kidney transplant to maintain life.

We plan to initiate a Phase 2 trial in the second half of 2023 for lorundrostat as a potential therapy to treat patients with Stage 2 to 4 CKD.

The planned Phase 2 clinical trial includes an initial proof-of-concept portion (Part A) and a profiling portion (Part B).

As this is an exploratory trial, interim data analyses may be conducted at one or more time points.

Topline data from this trial is anticipated between the fourth quarter of 2024 and the first quarter of 2025.

Financial Overview

We commenced our operations in May 2019 and have devoted substantially all of our resources to date to organizing and staffing our company, business planning, raising capital, in-licensing our product candidate, lorundrostat, establishing our intellectual property portfolio, conducting research, preclinical studies, and

clinical trials, and providing other general and administrative support for our operations.

As of March 31, 2023, we had cash, cash equivalents, and investments of $301.8 million.

From inception to March 31, 2023, we raised aggregate gross proceeds of approximately $378.8 million from the sale of common stock, convertible preferred stock, and convertible notes.

As of June 30, 2023, we had cash, cash equivalents, and investments of $282.8 million.

From inception to June 30, 2023, we raised aggregate gross proceeds of approximately $378.8 million from the sale of common stock, convertible preferred stock, and convertible notes.

In February 2023, we completed our initial public offering (IPO) of 13,800,000 shares of our common stock at a price to the public of $16.00 per share, including the exercise in full by the underwriters of their option to purchase 1,800,000 additional shares of our common stock.

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Our operations to date have been limited to business planning, raising capital, in-licensing and developing lorundrostat, conducting clinical trials, and other research and development activities.

Our net losses for the three months ended March 31, 2023 and 2022 were $12.6 million and $7.6 million, respectively.

As of March 31, 2023 and December 31, 2022, we had an accumulated deficit of $65.4 million and $52.8 million, respectively.

Our net losses for the six months ended June 30, 2023 and 2022 were $24.7 million and $14.0 million, respectively.

As of June 30, 2023 and December 31, 2022, we had an accumulated deficit of $77.6 million and $52.8 million, respectively.

Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on the timing of our clinical development activities and other research and development activities.

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In July 2020, we entered into a license agreement (the Mitsubishi License) with Mitsubishi Tanabe Pharmaceutical Company (Mitsubishi Tanabe), pursuant to which Mitsubishi Tanabe granted us an exclusive, worldwide, royalty-bearing, sublicensable license under Mitsubishi Tanabe’s patent and other intellectual property rights to exploit products incorporating lorundrostat (formerly MT-4129) (Lorundrostat Products) for the prevention, treatment, diagnosis, detection, monitoring, or predisposition testing with respect to indications, diseases, and conditions in humans.

We paid Mitsubishi Tanabe a $1.0 million upfront fee, and we are obligated to pay Mitsubishi Tanabe development milestone payments of up to $9.0 million in the aggregate and commercial milestone payments of up to $155.0 million in the aggregate upon first commercial sale and upon meeting certain annual sales targets, as well as additional commercial milestone payments of up to $10.0 million for a second indication.

Additionally, we are obligated to pay Mitsubishi Tanabe tiered royalties at percentages ranging from the mid-single digits to ten percent ( 10% ) of aggregate net sales of each Lorundrostat Product on a Lorundrostat Product-by-Lorundrostat Product and country-by-country basis, until the later of (i) the expiration of the last-to-expire valid Mitsubishi Tanabe patent claim covering a Lorundrostat Product, (ii) ten years from the first commercial sale of a Lorundrostat Product, or (iii) the expiration of regulatory exclusivity in such country.

Such royalties are subject to reduction under specified conditions, including lack of patent coverage

and generic competition.

We incurred $4.0 million of research and development expenses during the three months ended March 31, 2023 associated with an achieved development milestone in March 2023 related to the planned initiation of our pivotal clinical program of lorundrostat.

We are obligated to use commercially reasonable efforts to conduct and complete the development activities and to file for regulatory approval for at least one Lorundrostat Product in a major market country and consider in good faith to develop at least one Lorundrostat Product in a non-major market country.

If we elect to sublicense our rights under the Mitsubishi License to a third party with respect to exploitation of lorundrostat or any Lorundrostat Product in certain countries in Asia, Mitsubishi Tanabe has a right of first negotiation, for a specified period of time.

Pursuant to the Mitsubishi License, we paid Mitsubishi Tanabe a $1.0 million upfront fee, and we are obligated to pay Mitsubishi Tanabe development milestone payments of up to $9.0 million in the aggregate and commercial milestone payments of up to $155.0 million in the aggregate upon first commercial sale and upon meeting certain annual sales targets, as well as additional commercial milestone payments of up to $10.0 million for a second indication.

Additionally, we are obligated to pay

Mitsubishi Tanabe tiered royalties at percentages ranging from the mid-single digits to ten percent ( 10% ) of aggregate net sales of each Lorundrostat Product on a Lorundrostat Product-by-Lorundrostat Product and country-by-country basis, until the later of (i) the expiration of the last-to-expire valid Mitsubishi Tanabe patent claim covering a Lorundrostat Product, (ii) ten years from the first commercial sale of a Lorundrostat Product, or (iii) the expiration of regulatory exclusivity in such country.

Such royalties are subject to reduction under specified conditions, including lack of patent coverage and generic competition.

We incurred $4.0 million of research and development expenses during the six months ended June 30, 2023 associated with an achieved development milestone in March 2023 related to the planned initiation of our pivotal clinical program of lorundrostat.

We are obligated to use commercially reasonable efforts to conduct and complete the development activities and to file for regulatory approval for at least one Lorundrostat Product in a major market country and consider in good faith developing at least one Lorundrostat Product in a non-major market country.

If we elect to sublicense our rights under the Mitsubishi License to a third party with respect to exploitation of lorundrostat or any Lorundrostat Product in certain countries in Asia, we have agreed to negotiate such a sublicense first, for a specified period of time, with Mitsubishi Tanabe, if Mitsubishi Tanabe notifies us that it would like to obtain such a sublicense.

We also agreed not to commercialize any competing product prior to three years following the first commercial sale of the first Lorundrostat Product in any country without Mitsubishi Tanabe’s prior consent.

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Our future development costs may vary significantly based on factors such as:

• the initiation, type, number, scope, progress, expansions, results, costs, and timing of clinical trials and preclinical studies of lorundrostat and any future product candidates we may choose to pursue, including any modifications to clinical development plans based on feedback that we may receive from regulatory authorities;

including any modifications to clinical development plans based on feedback that we may receive from regulatory authorities;

• our ability and strategic decision to develop future product candidates other than lorundrostat, and the timing of such development, if any;

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Interest Income, Net

Interest income during 2023 is associated with our investments in money market funds and U.S.

Interest income reported in each period is associated with our investments in money market funds and U.S.

treasuries, net of fees or other related expenses.

Results of Operations

Comparison of the Three Months Ended March 31, 2023 and 2022

Comparison of the Three Months Ended June 30, 2023 and 2022

Three Months Ended,

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Research and Development Expenses

Research and development expenses increased by $5.5 million for the three months ended March 31, 2023, compared to the three months ended March 31, 2022, which was primarily due to increases of $4.0 million in license fees under the Mitsubishi License upon achieving a development milestone of lorundrostat in March 2023, $0.9 million in higher compensation expense as a result of additions to headcount, $0.7 million in clinical supply, manufacturing, and regulatory costs, and $0.5 million in other research and development expenses, partially offset by a decrease of $0.6 million in preclinical and clinical costs, driven by the timing of research and development activities and clinical trials of lorundrostat in each quarter.

Research and development expenses increased by $6.3 million for the three months ended June 30, 2023, compared to the three months ended June 30, 2022, which was primarily due to increases of $4.0 million in preclinical and clinical costs, driven by the initiation of the lorundrostat pivotal program in the second quarter of 2023, $1.3 million in higher compensation expense as a result of additions to headcount, and $1.0 million in clinical supply, manufacturing, and regulatory costs.

General and Administrative Expenses

General and administrative expenses increased by $1.9 million for the three months ended March 31, 2023, compared to the three months ended March 31, 2022.

The increase was primarily due to $0.8 million in higher compensation expense as a result of additions to headcount, $0.5 million in higher professional fees associated with operating as a public company, $0.4 million in higher other administrative expenses, and $0.2 million associated with new director and officer insurance policies.

General and administrative expenses increased by $3.0 million for the three months ended June 30, 2023, compared to the three months ended June 30, 2022.

The increase was primarily due to $1.4 million in higher compensation expense as a result of additions to headcount, $1.1 million in higher professional fees associated with operating as a public company, $0.3 million of higher insurance expense associated with new director and officer insurance policies, and $0.2 million in higher other administrative expenses.

Total Other Income, Net

Total other income, net increased by $2.3 million for the three months ended March 31, 2023, compared to the three months ended March 31, 2022, which was primarily attributable to interest earned during the three months ended March 31, 2023 on our investments in money market funds and U.S.

treasuries that began earning interest in mid-2022.

Total other income, net increased by $3.6 million for the three months ended June 30, 2023, compared to the three months ended June 30, 2022, which was primarily attributable to interest earned during the three months ended June 30, 2023 on our investments in money market funds and U.S.

treasuries that began earning interest in the third quarter of 2022.

Results of Operations

Comparison of the Six Months Ended June 30, 2023 and 2022

Six Months Ended,

2023 2022 Change

(in thousands)

Research and development expenses $ (24,177) $ (12,373) (11,804)

General and administrative expenses (6,496) (1,675) (4,821)

Total other income, net 5,924 — 5,924

Net loss $ (24,749) $ (14,048) $ (10,701)

Research and Development Expenses

Research and development expenses increased by $11.8 million for the six months ended June 30, 2023, compared to the six months ended June 30, 2022, which was primarily due to increases of $4.0 million in license fees under the Mitsubishi License upon achieving a development milestone of lorundrostat in March 2023, $3.8 million in preclinical and clinical costs, driven by the initiation of the lorundrostat pivotal program in

the second quarter of 2023, $2.2 million in higher compensation expense as a result of additions to headcount, $1.7 million in clinical supply, manufacturing, and regulatory costs, and $0.1 million in other research and development expenses.

General and Administrative Expenses

General and administrative expenses increased by $4.8 million for the six months ended June 30, 2023, compared to the six months ended June 30, 2022.

The increase was primarily due to $2.1 million in higher compensation expense as a result of additions to headcount, $1.9 million in higher professional fees associated with operating as a public company, $0.5 million of higher insurance expense associated with new director and officer insurance policies, and $0.3 million in higher other administrative expenses.

Total Other Income, Net

Total other income, net increased by $5.9 million for the six months ended June 30, 2023, compared to the six months ended June 30, 2022, which was primarily attributable to interest earned during the six months ended June 30, 2023 on our investments in money market funds and U.S.

treasuries that began earning interest in the third quarter of 2022.

Liquidity and Capital Resources

We have incurred net losses and negative cash flows from operations since our inception and anticipate we will continue to incur net losses and have negative cash flows from operations for the foreseeable future as we continue the development of, seek regulatory approval for, and potentially commercialize lorundrostat, seek to identify, assess, acquire, and in-license intellectual property related to or develop additional product candidates and operate as a public company.

From inception to March 31, 2023, we raised aggregate gross proceeds of approximately $378.8 million from the sale of common stock, convertible preferred stock, and convertible notes.

As of March 31, 2023, we had cash, cash equivalents, and investments of $301.8 million.

From inception to June 30, 2023, we raised aggregate gross proceeds of approximately $378.8 million from the sale of common stock, convertible preferred stock, and convertible notes.

As of June 30, 2023, we had cash, cash equivalents, and investments of $282.8 million.

In February 2023, we completed our IPO of 13,800,000 shares of our common stock sold at a price to the public of $16.00 per share, including the exercise in full by the underwriters of their option to purchase 1,800,000 additional shares of our common stock, for net proceeds of approximately $201.4 million, net of underwriting discounts, commissions, and offering costs.

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Funding Requirements

Based on our current operating plan, we believe that our cash, cash equivalents, and investments as of March 31, 2023 will be sufficient to allow us to fund our operations for at least twelve months.

Based on our current operating plan, we believe that our cash, cash equivalents, and investments as of June 30, 2023 will be sufficient to allow us to fund our operations for at least twelve months.

However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.

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• costs associated with any products or technologies that we may in-license or acquire;

• the other risks and uncertainties described under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022 and in “Risk Factors,” “Special Note Regarding Forward-Looking Statements and Market Data” and elsewhere in this Quarterly Report.

• the other risks and uncertainties described under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022 and in “Special Note Regarding Forward-Looking Statements and Market Data” and elsewhere in this Quarterly Report.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through equity offerings, debt financings, or other capital sources, including potential collaborations, licenses, and other similar arrangements.

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To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders may be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.

Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends.

Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from factors that include but are not limited to, inflation, the conflict between Russia and Ukraine and other factors, diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, and uncertainty about economic stability.

Debt financing and equity financing, if available,

may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends.

Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from factors that include but are not limited to, inflation, the conflict between Russia and Ukraine, diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, and uncertainty about economic stability.

If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly, and more dilutive.

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If we are unable to raise additional funds through equity or debt financings or other arrangements when needed or on terms acceptable to us, we may be required to delay, limit, reduce, or terminate our product development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves, or on less favorable terms than we would otherwise choose.

Comparison of the Three Months Ended March 31, 2023 and 2022

Comparison of the Six Months Ended June 30, 2023 and 2022

Since our inception, we have primarily used our available cash to fund expenditures related to the in-license and development of lorundrostat.

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Operating Activities

Net cash used in operating activities of $12.8 million during the three months ended March 31, 2023 increased, compared to $6.6 million during the three months ended March 31, 2022, which was primarily attributable to an increase in cash used to support our operating activities, including but not limited to, the development of lorundrostat and related clinical trial expenses, personnel and compensation expense, legal and professional fees to support our operations, and general working capital requirements.

The $6.2 million increase in cash used consisted of an increase in net loss of $5.0 million, the net effect of changes in working capital of $1.0 million, and accretion of discounts on held-to-maturity securities of $0.9 million, partially offset by an increase in stock-based compensation of $0.7 million.

Net cash used in operating activities of $33.2 million during the six months ended June 30, 2023 increased, compared to $12.0 million during the six months ended June 30, 2022, which was primarily attributable to an increase in cash used to support our operating activities, including but not limited to, the development of lorundrostat and related clinical trial expenses, personnel and compensation expense, legal and professional fees to support our operations, and general working capital requirements.

The $21.1 million increase in cash used consisted of an increase in net loss, adjusted for non-cash expenses, of approximately $11.5 million and the net effect of changes in working capital of $9.6 million.

Investing Activities

Net cash used in investing activities of $140.3 million during the three months ended March 31, 2023 increased, compared to zero during the three months ended March 31, 2022, which was attributable to purchases of marketable securities of $162.8 million during the three months ended March 31, 2023 subsequent to receiving cash proceeds from our IPO in February 2023, partially offset by maturities of the marketable securities of $22.5 million during three months ended March 31, 2023.

Net cash used in investing activities of $156.4 million during the six months ended June 30, 2023 increased, compared to zero during the six months ended June 30, 2022, which was attributable to purchases of marketable securities of $218.9 million during the six months ended June 30, 2023 subsequent to receiving cash proceeds from our IPO in February 2023, partially offset by maturities of the marketable securities of $62.5 million during the six months ended June 30, 2023.

Financing Activities

Net cash provided by financing activities of $203.6 million during the three months ended March 31, 2023 increased, compared to $12.0 million during the three months ended March 31, 2022.

During the three months ended March 31, 2023, we received aggregate gross proceeds of $220.8 million from the sale of our common stock in an IPO in February 2023 and paid $17.2 million of underwriting discounts, commissions, and offering costs in the same period.

During the three months ended March 31, 2022, we received $12.0 million in net proceeds from the issuance and sale of our Series A convertible preferred stock.

Net cash provided by financing activities of $203.0 million during the six months ended June 30, 2023 increased, compared to $129.6 million during the six months ended June 30, 2022.

During the six months ended June 30, 2023, we received aggregate gross proceeds of $220.8 million from the sale of our common stock in our IPO in February 2023 and paid $17.8 million of underwriting discounts, commissions, and offering costs in the same period.

During the six months ended June 30, 2022, we received $129.6 million in net proceeds from the issuance and sale of our Series A and Series B convertible preferred stock.

Contractual Obligations and Commitments

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however, actual results may differ materially from these estimates under different assumptions or conditions.

There were no changes during the three months ended March 31, 2023 to our critical accounting estimates as disclosed in our 2022 Annual Report on Form 10-K.

For information on our significant accounting

policies, please refer to Note 2.

There were no changes during the six months ended June 30, 2023 to our critical accounting estimates as disclosed in our 2022 Annual Report on Form 10-K.

For information on our significant accounting policies, please refer to Note 2.

“ Summary of Significant Accounting Policies ” within our 2022 Annual Report on Form 10-K.

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We intend to rely on other exemptions provided by the JOBS Act, including without limitation, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002.

We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of the consummation of our IPO, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if, among other factors, the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year (subject to certain conditions), or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

if, among other factors, the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year (subject to certain conditions), or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

We are also a smaller reporting company as defined in the Exchange Act.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis