What changed in this filing

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Item 1. Financial Statements

2021-07-13 compared with 2021-04-13 · 177 added, 91 removed, 479 unchanged (36% of the section changed)

6 unchanged sentences

Short-term investments

Accounts receivable

Contract assets

17 unchanged sentences

Preferred stock, $0.001 par value— 10,000,000 shares

authorized as of February 28, 2021 and

authorized as of May 31, 2021 and

November 30, 2020;

0 shares issued and outstanding

as of February 28, 2021 and November 30, 2020

as of May 31, 2021 and November 30, 2020

Common stock, $0.001 par value— 500,000,000 shares

authorized as of February 28, 2021 and

authorized as of May 31, 2021 and

November 30, 2020;

44,403,547 and 38,864,872 shares

issued and outstanding as of February 28, 2021 and

issued and outstanding as of May 31, 2021 and

November 30, 2020, respectively

8 unchanged sentences

(in thousands, except share and per share amounts)

Three Months Ended

Three Months Ended May 31,

Six Months Ended May 31,

Collaboration revenue

6 unchanged sentences

Loss before income taxes

Provision for income taxes

Net loss per share attributable to common stockholders, basic and diluted

Weighted-average number of shares outstanding, basic and diluted

Provision (benefit) for income taxes

Net income (loss)

Net income (loss) per share attributable to common

stockholders, basic

Weighted-average number of shares outstanding,

Net income (loss) per share attributable to common

stockholders, diluted

Weighted-average number of shares outstanding,

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

NURIX THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

Three Months Ended

Three Months Ended May 31,

Six Months Ended May 31,

Net income (loss)

Other comprehensive income (loss):

Unrealized gain (loss) on available-for-sale investments

Total comprehensive loss

Unrealized gain (loss) on

available-for-sale investments

Total comprehensive income (loss)

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

16 unchanged sentences

available-for-sale

Net income (loss)

Balance as of February 29, 2020

Issuance of Series D redeemable

convertible preferred stock at

$12.75 per share, net of

issuance costs of $336

Exercise of stock options

Vesting of early-exercised

stock options

Stock-based compensation

Unrealized gain (loss) on

available-for-sale

Net income (loss)

Balance as of May 31, 2020

Redeemable convertible

preferred stock

comprehensive

stockholders’

income (loss)

Balance as of November 30, 2020

4 unchanged sentences

stock options

Issuance under Employee Stock Purchase Plan

Issuance under Employee

Stock Purchase Plan

Stock-based compensation

1 unchanged sentence

available-for-sale

Net income (loss)

Balance as of February 28, 2021

Issuance of common stock in

connection with equity

offering, net of offering

costs of $643

Exercise of stock options

Vesting of early-exercised

stock options

Stock-based compensation

Unrealized gain (loss) on

available-for-sale

Net income (loss)

Balance as of May 31, 2021

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

2 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended May 31,

Cash flows from operating activities

Adjustments to reconcile net loss to net cash provided by

operating activities:

Adjustments to reconcile net loss to net cash (used in)

provided by operating activities:

Depreciation and amortization

3 unchanged sentences

Contract assets

Accounts receivable

Income tax receivable

3 unchanged sentences

Accrued and other liabilities

Net cash provided by operating activities

Net cash (used in) provided by operating activities

Cash flows from investing activities

Purchases of investments

Sales of investments

Maturities of investments

2 unchanged sentences

Cash flows from financing activities

Proceeds from issuance of redeemable convertible preferred stock,

net of offering costs

Proceeds from issuance of common stock, net of offering costs

Proceeds from exercise of stock options

1 unchanged sentence

Proceeds from issuance under Employee Stock Purchase Plan

Payments of deferred offering costs

Net cash provided by financing activities

6 unchanged sentences

Vesting of early exercised stock options

Redeemable convertible preferred stock issuance costs included in

accrued liabilities

Deferred offering costs included in accounts payable and accrued liabilities

As of February 28,

As of February 29,

As of May 31,

Reconciliation of cash, cash equivalents, and restricted cash as shown

13 unchanged sentences

The Company wholly owns a subsidiary, DeCART Therapeutics Inc.

(DeCART), which was incorporated in the state of Delaware on June 22, 2020 and holds a license to three of the Company’s compounds, including NX-0255, for drug-enhanced isolation of T cells nonexclusively with respect to one chimeric antigen receptor T cell (CAR-T) therapy target and exclusively with respect to three novel CAR-T therapy targets.

(DeCART), which was incorporated in the state of Delaware on June 22, 2020 and which holds a license to three of the Company’s compounds, including NX-0255, for drug-enhanced isolation of T cells exclusively with respect to three CAR-T therapy targets.

Initial Public Offering

11 unchanged sentences

Since inception, the Company has generally incurred significant losses and negative net cash flows from operations.

During the three months ended February 28, 2021, the Company incurred a net loss of $24.3 million and had positive net cash flows from operating activities of $8.1 million.

The Company had an accumulated deficit of $128.0 million as of February 28, 2021 and will require substantial additional capital for research and development activities.

During the six months ended May 31, 2021, the Company incurred a net loss of $50.7 million and had negative net cash flows from operating activities of $23.5 million.

The Company had an accumulated deficit of $154.4 million as of May 31, 2021 and will require substantial additional capital for research and development activities.

The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales of its drug candidates currently in development.

As of February 28, 2021, the Company had cash, cash equivalents and investments of $380.3 million.

As of May 31, 2021, the Company had cash, cash equivalents and investments of $496.5 million.

Management believes that its cash, cash equivalents and investments are sufficient to continue operating activities for at least 12 months following the issuance date of these condensed consolidated financial statements.

9 unchanged sentences

GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting.

The Company’s condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair statement of the Company’s financial position as of and for the three months ended February 28, 2021.

The condensed consolidated balance sheet as of November 30, 2020 was derived from the audited annual financial statements as of that date.

6 unchanged sentences

The accompanying condensed consolidated financial statements include the accounts of Nurix Therapeutics, Inc.

and its wholly owned subsidiary, DeCART.

and its wholly owned subsidiaries, including DeCART.

All intercompany balances and transactions have been eliminated in consolidation.

8 unchanged sentences

The Company bases its estimates on historical experience and on other relevant assumptions that are reasonable under the circumstances.

Actual results could materially differ from those estimates.

Actual results could differ materially from those estimates.

Concentration of Credit Risk

14 unchanged sentences

The extent to which the COVID-19 pandemic may directly or indirectly impact the Company’s financial statements is highly uncertain and subject to change.

Management considered the potential impact of the COVID-19 pandemic on its estimates and assumptions and there was not a material impact to the Company’s condensed consolidated financial statements as of and for the three months ended February 28, 2021;

however, actual results could differ from those estimates and there may be changes to management’s estimates in future periods.

58 unchanged sentences

Early adoption is permitted.

The Company is in the process of evaluating the impact of this new guidance on its financial statements.

The Company is in the process of evaluating the impact of this new guidance on its financial statements and expects to recognize a right-of-use asset and a lease liability on the Company’s consolidated balance sheet, which will increase the Company’s assets and liabilities.

In June 2016, the FASB issued ASU No.

3 unchanged sentences

An entity will recognize an allowance for credit losses on available-for-sale debt investments rather than an other-than-temporary impairment that reduces the cost basis of the investment.

ASU 2016-13 is effective for annual periods beginning after December 15, 2022, including interim periods within those annual periods.

ASU 2016-13 is effective for annual periods beginning after December 15,

2022, including interim periods within those annual periods.

Early adoption is permitted.

29 unchanged sentences

Upon signing the Gilead Agreement, Gilead paid the Company an upfront payment of $45.0 million plus $3.0 million in additional fees.

Subsequently, the Company received payments of $11.0 million for research milestones and additional payments.

As of February 28, 2021, the Company is eligible to receive up to approximately $2.3 billion in total additional payments, including up to $690.0 million upon the achievement of specified development milestones, up to $1.5 billion upon the achievement of specified sales milestones, subject to reduction for any product for which the Company exercises its option to co-develop and co-promote, and up to $139.8 million in certain additional fees related to target licensing, reservation and selection and research term extensions.

In addition, the Company is eligible to receive tiered royalties from mid-single digit to low tens percentages on annual net sales from any commercial products directed to the optioned collaboration targets, subject to certain reductions and excluding sales in the United States of any products for which the Company exercises its option to co-develop and co-promote, for which the Company and Gilead

share profits and losses evenly.

Subject to earlier expiration in certain circumstances, the Gilead Agreement expires on a licensed product-by-licensed product and country-by-country basis upon the later of (1) the expiration of the last to expire patent with a valid claim covering the applicable licensed product in the applicable country, (2) the expiration of any regulatory exclusivity for the applicable licensed product in the applicable country or (3) ten years after the first commercial sale of the applicable licensed product in the applicable country covered by the Gilead Agreement, provided that the term for any profit-shared licensed product in the United States will expire upon the expiration or termination of the applicable profit-share term as set forth in an applicable profit-share agreement to be negotiated upon the Company’s exercise of its option to co-develop and co-promote such licensed product.

Subsequently, the Company received payments of $13.5 million for research milestones and additional payments, including $2.5 million in the second quarter of 2021.

As of May 31, 2021, the Company is eligible to receive up to approximately $2.3 billion in total additional payments, including up to $688.5 million upon the achievement of specified development milestones, up to $1.5 billion upon the achievement of specified sales milestones, subject to reduction for any product for which the Company exercises its option to co-develop and co-promote, and up to $138.8 million in certain additional fees related to target licensing, reservation and selection and research term extensions.

the Company’s exercise of its option to co-develop and co-promote such licensed product.

If Gilead does not exercise an option to license a drug candidate, then the Gilead Agreement will terminate at the end of the last to expire option period.

5 unchanged sentences

In order to determine the transaction price, the Company evaluated all the payments to be received during the duration of the contract.

Certain milestones and additional fees were considered variable consideration, which were not included in the transaction price based on the most likely amount method as of February 28, 2021.

Certain milestones and additional fees were considered variable consideration, which were not included in the transaction price based on the most likely amount method as of May 31, 2021.

The Company will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

6 unchanged sentences

The cumulative effect of revisions to estimated costs to complete the Company’s performance obligation will be recorded in the period in which changes are identified and amounts can be reasonably estimated.

These actual costs consist primarily of internal FTE efforts and third party contract costs related to the Gilead Agreement.

For the three months ended February 28, 2021, the Company recognized collaboration revenue related to the Gilead Agreement of $2.7 million, all of which was included in deferred revenue as of November 30, 2020, and $0.5 million was related to performance obligation satisfied in previous periods.

For the three months ended February 29, 2020, the Company recognized revenue related to the Gilead Agreement of $2.4 million.

As of February 28, 2021, $41.4 million was recorded as deferred revenue, of which $14.4 million was current, on the condensed consolidated balance sheet related to the Gilead Agreement.

These actual costs consist primarily of internal employee and third party contract costs related to the Gilead Agreement.

For the three and six months ended May 31, 2021, the Company recognized collaboration revenue related to the Gilead Agreement of $3.7 million and $6.5 million, respectively, of which $2.9 million and $5.6 million, respectively, were included in deferred revenue as of November 30, 2020, and $0.6 million and $0.6 million, respectively, were related to activities satisfied in previous periods.

For the three and six months ended May 31, 2020, the Company recognized revenue related to the Gilead Agreement of $2.4 million and $4.8 million, respectively.

As of May 31, 2021, $40.2 million was recorded as deferred revenue, of which $14.7 million was current, on the condensed consolidated balance sheet related to the Gilead Agreement.

In December 2019, the Company entered into a strategic collaboration with Genzyme Corporation, a subsidiary of Sanofi, which became effective in January 2020 (as subsequently expanded and amended, the Sanofi Agreement), to discover, develop and commercialize a pipeline of targeted protein degradation drugs for patients with challenging diseases in multiple therapeutic areas using the Company’s DELigase platform to identify small molecules designed to induce degradation of three specified initial drug targets.

3 unchanged sentences

Under the Sanofi Agreement, Sanofi has exclusive rights and is responsible for the clinical development, commercialization and manufacture of drug candidates resulting from the collaboration while the Company retains the option to co-develop, co-promote and co-commercialize up to two targets, one of which must be selected from a list of targets designated at the execution of the Sanofi Agreement and one of which must be selected from targets identified by Sanofi as part of their recent expansion.

The Company’s right

to exercise its option to co-develop, co-promote and co-commercialize a given target is dependent on its ability to demonstrate, within a given timeframe, that it has sufficient cash resources and personnel to commercialize the product.

The Company’s right to exercise its option to co-develop, co-promote and co-commercialize a given target is dependent on its ability to demonstrate, within a given timeframe, that it has sufficient cash resources and personnel to commercialize the product.

The collaboration excludes the Company’s current internal protein degradation programs for which it retains all rights, and also excludes future internal programs, provided that the Company distinguished future programs as excluded from the scope of the collaboration.

For drug targets that are subject to the collaboration, the Company has primary responsibility for conducting preclinical research activities (including target validation, drug discovery, identification or synthesis) in accordance with the applicable research plan agreed to by the parties and established on a target-by-target basis.

The Company is obligated to use commercially reasonable efforts to identify relevant target binders and chimeric targeting molecules in order to identify development candidates.

For drug targets that are subject to the collaboration, the Company has primary responsibility for conducting preclinical research

activities (including target validation, drug discovery, identification or synthesis) in accordance with the applicable research plan agreed to by the parties and established on a target-by-target basis.

The Company is obligated to use commercially reasonable efforts to identify relevant target binders and c himeric t argeting m olecules in order to identify development candidates.

Subject to certain exceptions, each party will bear its own costs in the conduct of such research.

7 unchanged sentences

The Company is eligible to receive additional payments if Sanofi exercises an option to extend the license term with respect to a particular target.

As of February 28, 2021, the Company is eligible to receive up to approximately $2.5 billion in total payments, including payments of up to $500.0 million upon the achievement of specified development milestones, up to $625.0 million upon the achievement of specified regulatory milestones and up to $1.3 billion upon the achievement of certain sales milestones, as well as up to $163.1 million in certain additional fees related to target licensing and reservation.

As of May 31, 2021, the Company is eligible to receive up to approximately $2.5 billion in total payments, including payments of up to $500.0 million upon the achievement of specified development milestones, up to $625.0 million upon the achievement of specified regulatory milestones and up to $1.3 billion upon the achievement of certain sales milestones, as well as up to $163.1 million in certain additional fees related to target licensing and reservation.

In addition, the Company is eligible to receive tiered royalties ranging from mid-single digit to low teen percentages on annual net sales of any commercial products that may result from the collaboration, subject to certain reductions and excluding sales in the United States of any products for which the Company exercises its option to co-develop and co-promote, for which the parties share profits and losses evenly.

5 unchanged sentences

In order to determine the transaction price, the Company evaluated all the payments to be received during the duration of the contract.

Milestone and additional fees were considered variable consideration, which were not included in the transaction price based on the most likely amount method as of February 28, 2021.

Milestone and additional fees were considered variable consideration, which were not included in the transaction price based on the most likely amount method as of May 31, 2021.

The Company will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

5 unchanged sentences

The cumulative effect of revisions to estimated costs to complete the Company’s performance obligations will be recorded in the period in which changes are identified and amounts can be reasonably estimated.

These actual costs consist primarily of internal FTE efforts and third party contract costs related to the Sanofi Agreement.

The Company accounted for the First Sanofi Amendment as if it were part of the existing contract with Sanofi as the remaining goods and s ervices to be provided after the contract modification are not distinct from the goods and services already provided and, therefore, form part of a single performance obligation that is partially satisfied at the date of the contract modification.

These actual costs consist primarily of internal employee and third party contract costs related to the Sanofi Agreement.

The Company accounted for the First Sanofi Amendment as if it were part of the existing contract with Sanofi as the remaining goods and services to be provided after the contract modification are not distinct from the goods and services already provided and, therefore, form part of a single performance obligation that is partially satisfied at the date of the contract modification.

The contract modification did not have an effect on the contract transaction price.

The effect of the revised research period on the Company’s measure of progress toward complete satisfaction of the performance obligation was recognized as an adjustment to revenue at the date of the contract modification on a cumulative catch-up basis.

For the three months ended February 28, 2021, the Company recognized collaboration revenue related to the Sanofi Agreement of $2.3 million, all of which was included in deferred revenue as of November 30, 2020.

For the three months ended February 29, 2020, the Company recognized revenue related to the Sanofi Agreement of $0.4 million.

As of February 28, 2021, $69.0 million was recorded as deferred revenue, of which $18.4 million was current, on the condensed consolidated balance sheet related to the Sanofi Agreement.

For the three and six months ended May 31, 2021 , the Company recognized collaboration revenue related to the Sanofi Agreement of $3.3 million and $5.6 million , respectively , all of which was included in deferred revenue as of November 30, 2020.

For the three and six months ended May 31, 2020 , the Company recognized revenue related to the Sanofi Agreement of $1.8 million and $2.2 million , respectively .

As of May 31, 2021 , $65.7 million was recorded as deferred revenue, of which $19.0 million was current, on the condensed consolidated balance sheet related to the Sanofi Agreement.

Condensed Consolidated Balance Sheet Components

9 unchanged sentences

Total property and equipment, net

Depreciation and amortization expense was $0.6 million and $0.5 million for the three months ended February 28, 2021 and February 29, 2020, respectively.

Depreciation and amortization expense was $0.6 million and $0.5 million for the three months ended May 31, 2021 and 2020, respectively, and $1.3 million and $1.0 million for the six months ended May 31, 2021 and 2020, respectively.

All long-lived assets are maintained in the United States.

15 unchanged sentences

The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and considers factors specific to the asset or liability.

The following tables presents the Company’s financial assets, which consist of cash equivalents and investments classified as available-for-sale investments, that are measured at fair value on a recurring basis as of February 28, 2021 and November 30, 2020 (in thousands):

February 28, 2021

Money market funds

32 unchanged sentences

These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities, prepayment/default projections based on historical data and other observable inputs.

As of February 28, 2021 and November 30, 2020, none of the Company’s available-for-sale investments that were in an unrealized loss position had been in an unrealized loss position for more than 12 months.

During the three months ended February 28, 2021 and February 29, 2020, the Company did not recognize any other-than-temporary impairment losses.

As of May 31, 2021 and November 30, 2020, none of the Company’s available-for-sale investments that were in an unrealized loss position had been in an unrealized loss position for more than 12 months.

During the three and six months ended May 31, 2021 and 2020, the Company did not recognize any other-than-temporary impairment losses.

The Company’s short-term investments have maturities of less than one year from the respective condensed consolidated balance sheet dates.

6 unchanged sentences

Legal fees and other costs associated with such actions are expensed as incurred.

As of February 28, 2021, the Company had no outstanding, pending or threatened litigation.

As of May 31, 2021, the Company had no outstanding, pending or threatened litigation.

Indemnifications

12 unchanged sentences

In October 2015, the Company entered into a second lease agreement for additional space in the same building as its existing office and laboratory facilities.

In November 2017, the Company entered into an amendment to its original lease agreement that combined the Company’s two leases into a single lease agreement and extended the term of the lease agreement through April 30, 2025.

In November 2017, the Company entered into a second amendment to its original lease agreement that combined the Company’s two leases into a single lease agreement and extended the term of the lease agreement through April 30, 2025.

In March 2021, the Company entered into a third amendment to its original lease agreement to add additional office space in the same building.

The Company is required to pay base rent plus the tenant’s proportionate share of operating expenses as defined in the lease agreement.

1 unchanged sentence

In June 2020, the Company entered into a new lease agreement for additional space in the same building as the Company’s existing office for a 14-month term ending on July 31, 2021.

Rent expense was $0.8 million and $0.7 million for the three months ended February 28, 2021 and February 29, 2020, respectively.

Future minimum lease payments under the Company’s lease agreement as of February 28, 2021 were as follows (in thousands) :

Rent expense was $0.9 million and $0.7 million for the three months ended May 31, 2021 and 2020, respectively, and $1.7 million and $1.5 million for the six months ended May 31, 2021 and 2020, respectively.

Future minimum lease payments under the Company’s lease agreement as of May 31, 2021 were as follows (in thousands):

Year ending November 30,

3 unchanged sentences

The Company’s Certificate of Incorporation, as amended, authorizes the Company to issue up to 500,000,000 shares of $0.001 par value common stock.

Common stockholders are entitled to dividends when and if declared by the Company’s board of directors, subject to the prior rights of the preferred stockholders.

The holder of each share of common stock is entitled to one vote.

The common stockholders voting as a class are entitled to elect one member to the Company’s board of directors.

As of February 28, 2021, no dividends have been declared.

Common stock reserved for future issuance, on an as-if converted basis, as of February 28, 2021 and November 30, 2020, consists of the following and has been adjusted for the 1-for-3 reverse stock split:

As of May 31, 2021, no dividends have been declared.

C ommon stock reserved for future issuance, on an as-if converted basis , as of May 31, 2021 and November 30, 2020 , consists of the following and ha s been adjusted for the 1-for-3 reverse stock split :

Issuance of options under stock option plan

14 unchanged sentences

Shares of common stock subject to awards granted under the 2012 Plan that cease to be subject to such awards by forfeiture or otherwise after the termination of the 2012 Plan will be available for issuance under the 2020 Plan.

As of February 28, 2021, there were 3,696,307 shares of common stock reserved for future issuance pursuant to the 2020 Plan.

As of May 31, 2021, there were 3,542,030 shares of common stock reserved for future issuance pursuant to the 2020 Plan.

2012 Equity Incentive Plan

3 unchanged sentences

Options granted under the 2012 Plan may, but need not, be exercisable immediately, with any shares issued on exercise being subject to the Company’s right of repurchase.

As of February 28, 2021, there were no shares of common stock reserved for issuance pursuant to the 2012 Plan.

As of May 31, 2021, there were no shares of common stock reserved for issuance pursuant to the 2012 Plan.

Activity under the 2020 Plan and 2012 Plan is set forth below and has been adjusted for the 1-for-3 reverse stock split (in thousands, except per share data):

3 unchanged sentences

Options forfeited

Balances as of February 28, 2021

Options vested and expected to vest as of February 28, 2021 (2)

Options exercisable as of February 28, 2021

The aggregate intrinsic values were calculated as the pre-tax difference between the exercise price of stock options and the quoted market price of the Company’s common stock on February 28, 2021 for all in-the-money stock options.

Balances as of May 31, 2021

Options vested and expected to vest as of May 31, 2021 (2)

Options exercisable as of May 31, 2021

Certain stock options granted by the Company prior to the date of IPO are exercisable at the date of grant, with unvested shares subject to repurchase by the Company in the event of voluntary or involuntary termination of employment of the stockholder.

Such exercises are recorded as a liability in the condensed consolidated balance sheets and reclassified into equity as the options vest.

As of February 28, 2021, a total of 121,134 share of common stock were subject to repurchase by the Company at the lower of (i) the fair market value of such shares on the date of repurchase, or (ii) the original exercise price of such shares.

The corresponding exercise value of $0.5 million as of February 28, 2021 is recorded in share-based compensation liability.

As of May 31, 2021 , a total of 95,124 share s of common stock were subject to repurchase by the Company at the lower of (i) the fair market value of such shares on the date of repurchase, or (ii) the original exercise price of such shares.

The corresponding exercise value of $0.4 million as of May 31, 2021 is recorded in share-based compensation liability.

2020 Employee Stock Purchase Plan

4 unchanged sentences

The purchase price for shares of common stock purchased under the 2020 ESPP will be 85% of the lesser of the fair market value of the Company’s common stock on (i) the first trading day of the applicable offering period or (ii) the last trading day of each purchase period in the applicable offering period.

As of February 28, 2021, there were 1,054,059 shares of common stock reserved for issuance pursuant to the 2020 ESPP.

As of May 31, 2021, there were 1,054,059 shares of common stock reserved for issuance pursuant to the 2020 ESPP.

The first offering period commenced as of July 23, 2020, the date on which the Company’s registration statement on Form S-1 relating to its IPO of common stock became effective and ended on February 15, 2021.

2 unchanged sentences

The following table sets forth stock-based compensation expense related to stock options and ESPP that is included in the Company’s condensed consolidated statements of operations (in thousands):

Three Months Ended

Three Months Ended May 31,

Six Months Ended May 31,

Research and development

1 unchanged sentence

Total stock-based compensation

As of February 28, 2021, the total compensation cost related to stock-based awards not yet recognized was $49.7 million, which is expected to be amortized on a straight-line basis over the weighted-average remaining vesting period of approximately 3.5 years.

As of May 31, 2021, the total compensation cost related to stock-based awards not yet recognized was $48.9 million, which is expected to be amortized on a straight-line basis over the weighted-average remaining vesting period of approximately 3.3 years.

Defined Contribution Plan

2 unchanged sentences

Employees may contribute a percentage of their annual compensation to the plan, subject to statutory limitations.

During the three months ended February 28, 2021 and February 29, 2020, the Company made contributions to the 401(k) Plan during and recorded contribution expense of $0.2 million and $0.1 million, respectively.

For the three months ended February 28, 2021 and February 29, 2020, the Company recorded a current income tax expense of $71,000 and $11,000, respectively.

During the three and six months ended May 31, 2021 and 2020, the Company made contributions to the 401(k) Plan.

The Company recorded contribution expense of $0.2 million and $0.2 million during the three months ended May 31, 2021 and 2020, respectively and $0.4 million and $0.3 million during the six months ended May 31, 2021 and 2020, respectively.

Income tax expense was $0.1 million and $0.2 million for the three and six months ended May 31, 2021.

Income tax benefit was $20.6 million for the three and six months ended May 31, 2020.

Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Realization of the deferred tax assets is dependent upon future taxable income, the amount, if any, and timing of which are uncertain.

The Company has generated losses since inception and has established a valuation allowance to offset deferred tax assets as of February 28, 2021 and November 30, 2020 due to the uncertainty of realizing future tax benefits from its NOL carryforwards and other deferred tax assets.

The Company has generated losses since inception and has established a valuation allowance to offset deferred tax assets as of May 31, 2021 and November 30, 2020 due to the uncertainty of realizing future tax benefits from its NOL carryforwards and other deferred tax assets.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) was enacted in response to the COVID-19 pandemic.

3 unchanged sentences

In fiscal 2020, the Company filed refund claims of $19.6 million to carryback its NOLs generated in the fiscal years ended November 30, 2018 and 2019.

In fiscal 2020, the Company received cash of $16.3 million including interest income of $567,000.

As of February 28, 2021, the Company has an income tax receivable of $4.0 million on the condensed consolidated balance sheet for the remaining tax refund claims, which includes interest accrued of $0.1 million.

Net Loss Per Share

The following table sets forth the computation of the Company’s basic and diluted net loss per share attributable to common stockholders, which excludes shares which are legally outstanding but subject to repurchase by the Company (in thousands, except share and per share data):

Three Months Ended

Weighted-average number of shares outstanding, basic and diluted

Net loss per share attributable to common stockholders, basic and diluted

The following potentially dilutive securities were excluded from the computation of the diluted net loss per share of common stock for the periods presented because their effect would have been anti-dilutive:

Three Months Ended

Redeemable convertible preferred stock on an as-converted basis

In fiscal 2020, the Company received cash of $16.3 million including interest income

of $ 0.6 million.

In March 2021, the Company received cash of $ 0.8 million.

As of May 31, 2021 , the Company has an income ta x receivable of $3.1 million on the condensed consolidated balance sheet for the remaining tax refund claims , which includes interest accrued of $ 0.1 million .

Net Income (Loss) Per Share

The Company follows the two-class method when computing net income (loss) per common share when shares are issued that meet the definition of participating securities.

The two-class method determines net income (loss) per common share for each class of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings.

The two-class method requires income available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed.

The Company’s redeemable convertible preferred stock contractually entitles the holders of such shares to participate in dividends but does not contractually require the holders of such shares to participate in the Company’s losses.

The holders of redeemable convertible preferred stock are entitled to participate in noncumulative dividends on common stock at the rate of 8% of the applicable original issue price per share per annum based on the number of shares of common stock held on an as-converted basis.

As of May 31, 2021, no dividends on redeemable convertible preferred stock or common stock were declared or have ever been declared by the Company’s board of directors.

However, in accordance with ASC 260, Earnings Per Share , undistributed earnings are hypothetically allocated to holders of redeemable convertible preferred stock and are subtracted from net income in determining net income attributable to common stockholders.

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

For periods in which the Company reports net losses, diluted net loss per common share attributable to common stockholders is the same as basic net loss per common share attributable to common stockholders because potentially dilutive shares of common stock are not assumed to have been issued if their effect is anti-dilutive.

The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share attributable to common stockholders, which excludes shares which are legally outstanding but subject to repurchase by the Company (in thousands, except share and per share data):

Three Months Ended May 31,

Six Months Ended May 31,

Net income (loss)

noncumulative dividend to

preferred stockholders

Net income (loss) attributable to common

stockholders, basic and diluted

Weighted-average number of shares

outstanding, basic

Weighted-average dilutive effect of

stock options

Weighted-average number of shares

outstanding, diluted

Net income (loss) per share attributable to

common stockholders, basic

Net income (loss) per share attributable to

common stockholders, diluted

(1) Q2 2020 Revision of Basic and Diluted Net Income (Loss) per Share

During the second quarter of 2021, the Company identified an error in the computation and disclosure of the basic and diluted net income per share and the diluted weighted-average number of shares outstanding for the three months ended May 31, 2020 included in the Quarterly Financial Information (unaudited) footnote in its Annual Report on Form 10-K for the fiscal year ended November 31, 2020.

The three months ended May 31, 2020 was the first and only time the Company was in a net income position for the fiscal year ended November 30, 2020.

The error resulted from the exclusion of a hypothetical

noncumulative dividend attributable to participating preferred stockholders from net income and the exclusion of dilutive stock options from diluted weighted-average number of shares outstanding.

The Company evaluated the materiality of the error in accordance with SEC Staff Accounting Bulletin No.

99, Materiality and ASC 250, Accounting for Changes and Error Corrections , and concluded the error was not material to the previously issued consolidated financial statements.

However, the Company has revised its previously reported diluted weighted-average number of shares outstanding and basic and diluted net income per share, which increases the diluted weighted-average number of shares outstanding from 3,731,838 to 4,909,829 and decreases the basic and diluted net income per share from $ 2.03 to $ 0.00 for the three months ended May 31, 2020 .

The following potentially dilutive securities were excluded from the computation of the diluted net income (loss) per share of common stock for the periods presented because their effect would have been anti-dilutive:

Three Months Ended May 31,

Six Months Ended May 31,

Redeemable convertible preferred stock

on an as-converted basis

Options to purchase common stock

Options early exercised subject to vesting

Shares expected to be purchased under employee stock purchase plan

Shares expected to be purchased under

employee stock purchase plan

Subsequent Events

In March 2021, the Company completed a follow-on offering and issued 5,175,000 shares of common stock (including the exercise by the underwriters of their option to purchase an additional 675,000 shares of common stock) at a price to the public of $31.00 per share for net proceeds of approximately $150.1 million, after deducting underwriting discounts and commissions of $9.6 million and expenses of $0.7 million.

On July 8, 2021, the Company entered into a lease agreement for the lease of approximately 19,320 square feet of office space located at 455 Mission Bay Boulevard South, San Francisco, California, for a research and development laboratory and related uses.

The commencement date of the lease is expected to be on or about December 1, 2021 and the lease will expire on June 30, 2024, unless terminated earlier.

The minimum rent payable by the Company under the lease will be approximately $0.1 million per month, beginning on December 1, 2021, which amount will increase by 3% per year over the term.

The Company will also be responsible for the payment of additional rent to cover the Company’s share of the annual operating and tax expenses and utilities costs for the building.

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