What changed in this filing

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Item 1. Financial Statements

2023-02-09 compared with 2022-11-03 · 159 added, 97 removed, 442 unchanged (37% of the section changed)

3 unchanged sentences

(Amounts in thousands, except share and per share amounts)

September 30, 2022 March 31, 2022

December 31, 2022 March 31, 2022

Current assets:

5 unchanged sentences

Property, plant and equipment, net 7,679 7,933

Research and development incentives receivable, non-current 1,296 —

Restricted cash 1,636 1,636

11 unchanged sentences

Financing lease liabilities, non-current 24,086 24,406

Long term debt, net of discount $ 28,390 $ —

Total liabilities $ 83,205 $ 49,963

2 unchanged sentences

Common stock, $ 0.001 par value;

150,000,000 shares authorized as of September 30, 2022 and March 31, 2022;

49,739,407 and 47,338,660 shares issued and outstanding as of September 30, 2022 and March 31, 2022, respectively

150,000,000 shares authorized as of December 31, 2022 and March 31, 2022;

56,632,999 and 47,338,660 shares issued and outstanding as of December 31, 2022 and March 31, 2022, respectively

Additional paid-in capital 1,027,798 723,359

7 unchanged sentences

(Amounts in thousands, except share and per share amounts)

Three Months Ended September 30, Six Months Ended September 30,

Three Months Ended December 31, Nine Months Ended December 31,

2022 2021 2022 2021

8 unchanged sentences

Interest expense on finance lease liability ( 548 ) ( 555 ) ( 1,650 ) ( 1,670 )

Other (expense) income ( 2,659 ) ( 356 ) ( 4,678 ) ( 608 )

Total other (expense) income, net ( 1,523 ) ( 108 ) ( 2,900 ) ( 38 )

Interest expense on debt obligations ( 941 ) — ( 941 ) —

Other income (expense) 147 ( 241 ) ( 4,531 ) ( 849 )

Total other income (expense), net 1,940 24 ( 960 ) ( 14 )

Net loss $ ( 39,690 ) $ ( 29,674 ) $ ( 125,045 ) $ ( 86,340 )

5 unchanged sentences

(Amounts in thousands)

Three Months Ended September 30, Six Months Ended September 30,

Three Months Ended December 31, Nine Months Ended December 31,

2022 2021 2022 2021

32 unchanged sentences

Balances as of September 30, 2022 49,739,407 50 777,650 ( 396,559 ) 2,931 384,072

Issuance of prefunded warrants to purchase common stock 92,778 92,778

Issuance of common stock, net of issuance costs and underwriter fees 6,810,658 7 149,847 149,854

Foreign currency translation adjustment — — — — 158 158

Unrealized loss on short-term investments — — — — 650 650

Exercise of stock options 60,921 — 500 — — 500

Vesting of RSUs 22,013 — — — — —

Stock-based compensation expense — — 7,023 — — 7,023

Net loss — — — ( 39,690 ) — ( 39,690 )

Balances as of December 31, 2022 56,632,999 $ 57 $ 1,027,798 $ ( 436,249 ) $ 3,739 $ 595,345

Balances as of March 31, 2021 46,566,481 $ 47 $ 692,243 $ ( 193,168 ) $ ( 394 ) $ 498,728

6 unchanged sentences

Foreign currency translation adjustment — — — — 219 219

Unrealized loss on short-term investments — — — — — —

Exercise of stock options 124,880 — 1,211 — — 1,211

2 unchanged sentences

Balances as of September 30, 2021 46,855,331 47 707,190 ( 249,834 ) 9 457,412

Foreign currency translation adjustment — — — — 161 161

Unrealized loss on short-term investments — — — — ( 351 ) ( 351 )

Exercise of stock options 350,985 — 4,043 — — 4,043

Stock-based compensation expense — — 5,918 — — 5,918

Net loss — — — ( 29,674 ) — ( 29,674 )

Balances as of December 31, 2021 47,206,316 $ 47 $ 717,151 $ ( 279,508 ) $ ( 181 ) $ 437,509

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

2 unchanged sentences

(Amounts in thousands)

Six Months Ended September 30,

Nine Months Ended December 31,

Cash flows from operating activities:

3 unchanged sentences

Depreciation 1,919 1,598

Noncash interest expense 235 —

Net amortization of premiums and discounts on short-term investments ( 1,782 ) 1,792

12 unchanged sentences

Proceeds from sales and maturities of short-term investments 316,180 196,250

Net cash provided by investing activities 5,351 15,940

Net cash used in investing activities ( 119,750 ) 2,520

Cash flows from financing activities:

Proceeds from issuance of common stock, net of underwriting fees and discounts 150,102 —

Proceeds from issuance of prefunded warrants to purchase common stock, net of underwriting fees and discounts 92,778 —

Proceeds from issuance of common stock through ATM sales, net of offering costs 37,438 —

Proceeds from long-term debt 30,000 —

Payment of debt issuance costs ( 1,846 ) —

Principal payment of finance lease obligation ( 262 ) ( 188 )

6 unchanged sentences

Supplemental disclosure of non-cash investing and financing activities:

Common stock issuance costs included in accrued expenses 249 —

Purchases of property and equipment included in accounts payable 19 491

Lease assets obtained in exchange for new operating lease liabilities — 365

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

18 unchanged sentences

The accompanying consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business.

The Company has incurred recurring losses since its inception, including net losses of $ 43.1 million and $ 29.4 million for the three months ended September 30, 2022 and 2021, respectively and net losses of $ 85.4 million and $ 56.7 million for the six months ended September 30, 2022 and 2021, respectively.

In addition, as of September 30, 2022, the Company had an accumulated deficit of $ 396.6 million.

The Company has incurred recurring losses since its inception, including net losses of $ 39.7 million and $ 29.7 million for the three months ended December 31, 2022 and 2021, respectively and net losses of $ 125.0 million and $ 86.3 million for the nine months ended December 31, 2022 and 2021, respectively.

In addition, as of December 31, 2022, the Company had an accumulated deficit of $ 436.2 million.

The Company expects to continue to generate operating losses for the foreseeable future.

26 unchanged sentences

Unaudited interim financial information

The accompanying consolidated balance sheet as of September 30, 2022, the consolidated statements of operations, of comprehensive loss and of stockholders’ equity for the three and six months ended September 30, 2022 and 2021 and the consolidated statements of cash flows for the six months ended September 30, 2022 and 2021 are unaudited.

The unaudited interim consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of September 30, 2022 and the results of its operations for the three and six months ended September 30, 2022 and 2021 and its cash flows for the six months ended September 30, 2022 and 2021.

The financial data and other information disclosed in these consolidated notes related to the three and six months ended September 30, 2022 and 2021 are unaudited.

The results for the three and six months ended September 30, 2022 are not necessarily indicative of results to be expected for the year ending March 31, 2023, any other interim periods or any future year or period.

The accompanying consolidated balance sheet as of December 31, 2022, the consolidated statements of operations, of comprehensive loss and of stockholders’ equity for the three and nine months ended December 31, 2022 and 2021 and the consolidated statements of cash flows for the nine months ended December 31, 2022 and 2021 are unaudited.

The unaudited interim consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of December 31, 2022 and the results of its operations for the three and nine months ended December 31, 2022 and 2021 and its cash flows for the nine months ended December 31, 2022 and 2021.

The financial data and other information disclosed in these consolidated notes related to the three and nine months ended December 31, 2022 and 2021 are unaudited.

The results for the three and nine months ended December 31, 2022 are not necessarily indicative of results to be expected for the year ending March 31, 2023, any other interim periods or any future year or period.

The financial information included herein should be read in conjunction with the financial statements and notes in the Company's Annual Report on Form 10-K for the year ended March 31, 2022, which was filed with the Securities and Exchange Commission on May 19, 2022 (the "Annual Report").

During the three and six months ended September 30, 2022, there have been no changes to the Company’s significant accounting policies as described in the Annual Report, except as described below.

During the three and nine months ended December 31, 2022, there have been no changes to the Company’s significant accounting policies as described in the Annual Report, except as described below.

Recently adopted accounting pronouncements

8 unchanged sentences

Fair Value Measurements as of

September 30, 2022 Using:

December 31, 2022 Using:

Level 1 Level 2 Level 3 Total

11 unchanged sentences

The underlying securities in the money market funds held by the Company are all government backed securities.

During the three and six months ended September 30, 2022 and 2021, there were no transfers between levels.

During the three and nine months ended December 31, 2022 and 2021, there were no transfers between levels.

Valuation of cash equivalents and short-term investments

2 unchanged sentences

Treasury bonds were valued by the Company using quoted prices in active markets for similar securities, which represent a Level 2 measurement within the fair value hierarchy.

Cash equivalents consisted of money market funds at September 30, 2022 and March 31, 2022.

Cash equivalents consisted of money market funds at December 31, 2022 and March 31, 2022.

Short-term investments

As of September 30, 2022 and March 31, 2022, the Company's available-for-sale investments by type consisted of the following:

September 30, 2022

As of December 31, 2022 and March 31, 2022, the Company's available-for-sale investments by type consisted of the following:

December 31, 2022

cost Gross unrealized

9 unchanged sentences

Total $ 290,989 $ — $ ( 1,282 ) $ — $ 289,707

As of September 30, 2022, available-for-sale securities consisted of investments that mature within one year.

As of March 31, 2022, available-for-sale securities consisted of investments that mature within one year, with the exception of certain U.S.

As of December 31, 2022, available-for-sale securities consisted of investments that mature within one year, with the exception of certain U.S.

Government agency bonds which have maturities between one and two years and an aggregate fair value of $ 24.0 million.

As of March 31, 2022, available-for-sale securities consisted of investments that mature within one year,

with the exception of certain U.S.

Government agency bonds and U.S.

2 unchanged sentences

Property, plant and equipment, net consisted of the following:

September 30, 2022 March 31, 2022

December 31, 2022 March 31, 2022

Office equipment $ 1,113 $ 937

6 unchanged sentences

Property, plant and equipment, net $ 7,679 $ 7,933

Depreciation expense was $ 617 and $ 1,237 for the three and six months ended September 30, 2022 and $ 532 and $ 1,050 for the three and six months ended September 30, 2021, respectively.

Depreciation expense was $ 682 and $ 1,919 for the three and nine months ended December 31, 2022 and $ 548 and $ 1,598 for the three and nine months ended December 31, 2021, respectively.

Depreciation expense is recorded within research and development and selling, general and administrative expenses in the consolidated statement of operations.

1 unchanged sentence

Accrued expenses and other current liabilities consisted of the following:

September 30, 2022 March 31, 2022

December 31, 2022 March 31, 2022

Accrued research and development costs $ 9,999 $ 5,882

3 unchanged sentences

Total accrued expenses and other current liabilities $ 19,158 $ 13,392

On October 6, 2022, the Company entered into a Loan and Security Agreement (the “Loan Agreement”), with Hercules Capital, Inc., as administrative agent, collateral agent and as a lender (“Hercules”).

Pursuant to the Loan Agreement, the Company can borrow term loans in an aggregate maximum principal amount of up to $ 200.0 million under multiple tranches (the “Term Loan Facility”).

Under the Loan Agreement, the Company borrowed an initial amount of $ 30.0 million on the Closing Date, and at the Company's sole option, can draw down an additional $ 30.0 million on or prior to September 30, 2023, as well as additional term loan advances in an aggregate principal amount of up to $ 115.0 million during the term of the Term Loan Facility subject to achievement of specified performance milestones, and two additional term loan advances up to an aggregate principal amount of $ 25.0 million subject to certain terms and conditions, on or prior to the end of the interest-only period.

The Company intends to use the proceeds of the Term Loan Facility for working capital and general corporate purposes.

The Term Loan Facility will mature on October 1, 2027 (the “Maturity Date”).

The outstanding principal balance of the Term Loan Facility bears interest payable in cash at a floating rate per annum equal to the greater of (i) 7.25 % and (ii) the sum of the Prime Rate (which is capped at 7.25 %) and 1.75 %.

Accrued interest is payable monthly following the funding of each term loan advance.

In addition, the principal balance of the Term Loan Facility will bear “payment-in-kind” interest at the rate of 1.50 % (“PIK Interest”), which PIK Interest will be added to the outstanding principal balance of the Term Loan Facility on each interest payment date.

Borrowings under the Loan Agreement are repayable in monthly interest-only payments through September 2026.

After the interest-only payment period, borrowings under the Loan Agreement are repayable in equal monthly payments of principal and accrued interest until October 2027.

At the Company's option, the Company may prepay all or a portion of the outstanding borrowings, subject to a prepayment fee of 3.0 % of the principal amount if prepayment occurs during the 12

months following the Closing Date, 2.0 % after 12 months following the Closing Date but prior to 36 months following the Closing Date, and 1.0 % thereafter.

The Loan Agreement contains customary facility fees, events of default and representations, warranties and affirmative and negative covenants, including a financial covenant requiring us to maintain certain levels of cash in accounts subject to a control agreement in favor of the Agent (the “Unrestricted Cash”) at all times commencing on January 1, 2024.

In addition, the Loan Agreement also contains a financial covenant that beginning on the later of (i) July 1, 2024 and (ii) the date on which the aggregate outstanding principal amount of the Term Loan Facility is equal to or greater than $ 100.0 million, the Company is required to satisfy one of the following requirements:

(1) achieve a minimum amount of trailing three-month net product revenue tested on a monthly basis, (2) maintain a market capitalization in excess of $ 1.2 billion and Unrestricted Cash in an amount no less than 50 % of the outstanding amount under the Term Loan Facility, or (3) maintain Unrestricted Cash in an amount no less than 85 % of the outstanding amount under the Term Loan Facility.

The Company paid a $ 0.5 million facility charge and incurred debt issuance costs of $ 1.5 million upon closing of the Loan Agreement.

The Loan Agreement also provides for a final payment, payable upon maturity or the repayment of the obligations in full or in part (on a pro rata basis), equal to 4.95 % of the aggregate principal amount of Term Loans advanced to the Borrower and repaid on such date, which is being accrued on the Company's consolidated balance sheet.

As of December 31, 2022, the amount accrued for the final payment is $ 0.1 million.

Unamortized debt issuance costs are recorded as a reduction of the carrying amount on the term loan and amortized as interest expense using the effective-interest method.

In addition, unamortized deferred financing costs of $ 0.3 million were recorded in other assets as of December 31, 2022 related to the Company's right to borrow additional amounts from Hercules in the future and amortized to interest expense over the relevant draw period on a straight-line basis.

Interest expense for the three and nine months ended December 31, 2022 was $ 0.9 million.

The summary of obligations under the term loan as of December 31, 2022 consisted of the following (in thousands):

December 31, 2022

Principal loan balance $ 30,109

Facility charge and diligence fee ( 328 )

Unamortized issuance costs ( 1,465 )

Accumulated end of term fee 74

Long term debt, net $ 28,390

The annual principal payments due under the Loan Agreement as of December 31, 2022 were as follows:

December 31, 2022

2023 (remaining 3 months) —

Thereafter 18,701

Total $ 32,139

The table of future payments of long-term debt excludes the end of term charge of $ 1.5 million, which is due upon the maturity of the loan

8 Stockholders’ equity

As of September 30, 2022 and March 31, 2022, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue up to 150,000,000 shares of common stock, par value $ 0.001 per share.

As of September 30, 2022 and March 31, 2022, the Company had reserved 18,862,638 and 16,605,804 shares of common stock for the exercise of outstanding stock options and the vesting of restricted share units, the number of shares remaining available for grant under the Company’s 2018 Omnibus Incentive Compensation Plan and the Company’s Employee Stock Purchase Plan (see Note 8) and the exercise of the outstanding warrants to purchase shares of common stock, respectively.

As of December 31, 2022 and March 31, 2022, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue up to 150,000,000 shares of common stock, par value $ 0.001 per share.

The Company had reserved for common stock for the exercise of outstanding stock options and the vesting of restricted share units, the number of shares remaining available for grant under the Company’s 2018 Omnibus Incentive Compensation Plan and the Company’s Employee Stock Purchase Plan (see Note 8) and the exercise of the outstanding warrants to purchase shares of common stock as follows:

December 31, 2022 March 31, 2022

Stock options, issued and outstanding 7,510,458 6,514,334

Restricted stock units 1,353,745 826,213

Stock options and restricted stock units, future issuance 2,194,816 1,933,300

Employee stock purchase plan, available for future grants 2,076,603 1,550,375

Pre-IPO warrants to purchase common stock 497,344 497,344

Pre-funded warrants 9,484,238 5,284,238

Total shares of common stock reserved for future issuance 23,117,204 16,605,804

Undesignated preferred stock

As of September 30, 2022, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue up to 10,000,000 shares of undesignated preferred stock, par value $ 0.001 per share.

There were no undesignated preferred shares issued or outstanding as of September 30, 2022.

As of December 31, 2022, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue up to 10,000,000 shares of undesignated preferred stock, par value $ 0.001 per share.

There were no undesignated preferred shares issued or outstanding as of December 31, 2022.

On August 11, 2020, the Company and the SVB Leerink LLC (the "Agent") entered into a sales agreement, which was subsequently amended on October 21, 2020 (as amended, the “2020 Sales Agreement”), pursuant to which the Company could sell, from time to time, at its option, up to an aggregate of $ 62.5 million of shares of the Company’s common stock, $ 0.001 par value per share, through the Agent, as the Company’s sales agent.

During the six months ended September 30, 2022, the Company settled transactions that occurred pursuant to the 2020 Sales Agreement, whereby the Company issued and sold an aggregate of 1,686,438 shares of its common stock, resulting in gross proceeds of $ 32.0 million, before deducting fees of $ 1.0 million.

The Company did no t issue or sell any shares under the 2020 Sales Agreement during the six months ended September 30, 2021.

During the nine months ended December 31, 2022, the Company settled transactions that occurred pursuant to the 2020 Sales Agreement, whereby the Company issued and sold an aggregate of 1,686,438 shares of its common stock, resulting in gross proceeds of $ 32.0 million, before deducting fees of $ 1.0 million.

The Company did no t issue or sell any shares under the 2020 Sales Agreement during the nine months ended December 31, 2021.

On June 23, 2022, the 2020 Sales Agreement was terminated by the execution by the Company and the Agent of a new sales agreement (the “2022 Sales Agreement”).

4 unchanged sentences

The Company has also agreed to provide the Agent with customary indemnification rights.

During the three months ended September 30, 2022, pursuant to the 2022 Sales Agreement, the Company issued and sold an aggregate of 340,000 shares of its common stock, resulting in gross proceeds of $ 6.7 million, before deducting fees of $ 0.2 million.

During the nine months ended December 31, 2022, pursuant to the 2022 Sales Agreement, the Company issued and sold an aggregate of 340,000 shares of its common stock, resulting in gross proceeds of $ 6.7 million, before deducting fees of $ 0.3 million.

The Company cannot provide any assurances that it will issue any additional Shares pursuant to the 2022 Sales Agreement.

The Company did no t issue or sell any shares under the 2020 Sales Agreement or the 2022 Sales Agreement during the three and nine months ended December 31, 2022.

Equity offerings

In November 2019, the Company completed a public offering of (a) 4,516,561 shares of the Company's common stock at a public offering price of $ 13.61 per share, and (b) pre-funded warrants to purchase 2,200,000 shares of the Company's common stock at a public offering price of $ 13.6099 per warrant.

The Company received aggregate net proceeds of approximately $ 85,598 after deducting underwriting discounts, commissions and other offering expenses payable by the Company of approximately $ 5,814 .

In June 2020, the Company completed a public offering of (a) 3,478,261 shares of the Company’s common stock (the “June 2020 Shares”), inclusive of the June 2020 Underwriters fully exercised 30-day option to purchase 652,173 shares of the Company's common stock at a public offering price of $ 23.00 per share, and (b) pre-funded warrants to purchase 1,521,738 shares of the Company’s common stock at a public offering price of $ 22.9999 per warrant.

2 unchanged sentences

The Company received aggregate net proceeds of approximately $ 269,975 after deducting underwriting discounts, commissions and other offering expenses payable by the Company of approximately $ 17,525 .

In December 2022, the Company completed a public offering of (a) 6,810,658 shares of the Company’s common stock, inclusive of the underwriters 30-day option to purchase up to an additional 1,436,172 shares of the Company’s common stock, at a public offering price of $ 23.50 per share and (b) pre-funded warrants to purchase 4,200,000 shares of the Company’s common stock at a public offering price of $ 23.4999 per warrant.

The Company received aggregate net proceeds of approximately $ 242,631 after deducting underwriting discounts, commissions and other offering expenses payable by the Company of approximately $ 16,119 .

9 Pre-funded Warrants

The pre-funded warrants described above are exercisable at any time after the date of issuance.

1 unchanged sentence

A holder of a pre-funded warrant may increase or decrease this percentage up to 19.99 % by providing at least 61 days’ prior notice to the Company.

Certain holders have decreased the 9.99 % threshold to a 4.99 % threshold.

Other than as set forth in Note 8 and Note 9 to these consolidated financial statements, the 3,084,238 shares of the Company's common stock underlying the above described pre-funded warrants, and the 2,200,000 shares of the Company's common stock underlying pre-funded warrants that were issued by the Company in 2019, are not included in the number of issued and outstanding shares of the Company’s common stock set forth herein.

As of September 30, 2022, no pre-funded warrants had been exercised.

The 9,484,238 shares of the Company's common stock underlying the above described pre-funded warrants, are not included in the number of issued and outstanding shares of the Company’s common stock outstanding as reported on the consolidated balance sheet, though they are included in the Company's annual pool increase calculation as well as the weighted average outstanding common stock in the calculation of basic and diluted net loss per share, as noted below in Note 10.

As of December 31, 2022, no pre-funded warrants had been exercised.

10 Stock-based compensation

2 unchanged sentences

Three Months Ended

September 30, Six Months Ended

September 30,

December 31, Nine Months Ended

2022 2021 2022 2021

2 unchanged sentences

$ 7,023 $ 5,918 $ 21,209 $ 18,481

The following table summarizes stock-based compensation expense by award type for the three months ended September 30, 2022 and 2021:

The following table summarizes stock-based compensation expense by award type for the three and nine months ended December 31, 2022 and 2021:

Three Months Ended

September 30, Six Months Ended September 30,

December 31, Nine Months Ended December 31,

2022 2021 2022 2021

13 unchanged sentences

Restricted stock awards and non-statutory stock options were granted under the 2017 Plan to employees, officers, members of the board of directors, advisors and consultants of the Company.

The maximum number of common shares that may be issued under the 2017 Plan was 2,659,885 , of which no ne remained available for future grants as of September 30, 2022.

The maximum number of common shares that may be issued under the 2017 Plan was 2,659,885 , of which no ne remained available for future grants as of December 31, 2022.

Shares with respect to which awards have expired, terminated, surrendered or cancelled under the 2017 Plan without having been fully exercised will be available for future awards under the 2018 Plan referenced below.

2 unchanged sentences

On July 9, 2018, the Company’s board of directors adopted, and the Company’s stockholders approved the 2018 Omnibus Incentive Compensation Plan (the “2018 Plan”), which became effective immediately prior to the effectiveness of the registration statement filed in connection with the Company’s initial public offering.

The 2018 Plan provides for the issuance of incentive stock options, non-qualified stock options, stock awards, stock units, stock appreciation rights and other stock-based

The 2018 Plan provides for the issuance of incentive stock options, non-qualified stock options, stock awards, stock units, stock appreciation rights and other stock-based awards.

The number of shares of common stock initially reserved for issuance under the 2018 Plan is 3,617,968 shares.

1 unchanged sentence

The number of shares reserved for issuance under the 2018 Plan will increase automatically on the first day of each April equal to 4.0 % of the total number of shares of common stock outstanding on the last trading day in the immediately preceding fiscal year, which includes for these purposes, the 5,284,238 shares issuable upon exercise of those pre-funded warrants described in Note 9 to these consolidated financial statements, or such lesser amount as determined by the Board.

On April 1, 2022, the number of shares reserved for issuance under the 2018 Plan automatically increased by 2,104,915 shares pursuant to the terms of the 2018 Plan and based on total number of shares of common stock outstanding on March 31, 2022.

On April 1, 2022, the number of shares reserved for issuance under the 2018 Plan automatically increased by 2,104,915 shares pursuant to the terms of the 2018 Plan and based on total

number of shares of common stock outstanding on March 31, 2022.

On April 1, 2021, the number of shares reserved for issuance under the 2018 Plan automatically increased by 2,074,028 shares pursuant to the terms of the 2018 Plan.

As of September 30, 2022, 2,327,646 shares remained available for future grants under the 2018 Plan.

As of December 31, 2022, 2,194,816 shares remained available for future grants under the 2018 Plan.

The 2015 Plan, the 2017 Plan and the 2018 Plan are administered by the board of directors or, at the discretion of the board of directors, by a committee of the board of directors.

13 unchanged sentences

The Company’s ESPP is not currently active.

Out-of-Plan Inducement Grant

Out-of-Plan Inducement Grants

In May 2021, the Company granted an equity award to a newly hired executive as a material inducement to enter into employment with the Company.

3 unchanged sentences

The inducement grant is included in the stock option and RSU award tables below.

In December 2022, the Company granted an equity award to a newly hired executive as a material inducement to enter into employment with the Company.

The grant constitutes an "employment inducement grant" in accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules and was issued outside of the 2018 Plan and each of the other stock incentive plans described above.

The inducement grant included a nonqualified stock option to purchase up to 82,500 shares of the Company's common stock, as well as a restricted stock unit grant representing 55,000 shares of the Company's common stock.

These stock option and restricted stock unit inducement grants have terms and conditions consistent with those set forth under the 2018 Plan and vest under the same respective vesting schedules as stock option and restricted stock unit awards granted under the 2018 Plan.

The inducement grant is included in the stock option and RSU award tables below.

Stock option valuation

8 unchanged sentences

Three Months Ended

September 30, Six Months Ended

September 30,

December 31, Nine Months Ended

2022 2021 2022 2021

12 unchanged sentences

Cancelled ( 245,199 ) $ 22.75

Outstanding as of September 30, 2022 7,413,466 $ 16.98 7.31 $ 30,477

Outstanding as of December 31, 2022 7,510,458 $ 17.17 7.12 $ 85,400

Options exercisable as of March 31, 2022 3,645,749 $ 10.85 6.31 $ 24,875

Options exercisable as of September 30, 2022 4,291,654 $ 13.50 6.31 $ 26,428

As of September 30, 2022, there was $ 41.7 million of unrecognized compensation cost related to unvested common stock options, which is expected to be recognized over a weighted average period of 2.5 years.

The weighted average grant-date fair value of stock options granted during the six months ended September 30, 2022 and 2021 was $ 12.20 and $ 22.25 , respectively.

The aggregate intrinsic value of stock options exercised during the six months ended September 30, 2022 was $ 1.2 million.

Options exercisable as of December 31, 2022 4,504,534 $ 14.07 6.14 $ 63,812

As of December 31, 2022, there was $ 39.4 million of unrecognized compensation cost related to unvested common stock options, which is expected to be recognized over a weighted average period of 2.4 years.

The weighted average grant-date fair value of stock options granted during the nine months ended December 31, 2022 and 2021 was $ 12.64 and $ 22.25 , respectively.

The aggregate intrinsic value of stock options exercised during the nine months ended December 31, 2022 was $ 2.3 million.

Restricted stock units

A summary of the changes in the Company's RSUs during the three months ended September 30, 2022 is as follows:

A summary of the changes in the Company's RSUs during the nine months ended December 31, 2022 is as follows:

Number of Restricted Shares Weighted

4 unchanged sentences

Cancelled ( 71,288 ) 26.38

Outstanding as of September 30, 2022 1,263,341 24.49

As of September 30, 2022, there was $ 27.1 million of unrecognized compensation cost related to unvested restricted stock units, which is expected to be recognized over a weighted average period of 3.2 years.

As of September 30, 2021, there was $ 20.7 million unrecognized compensation cost related to unvested restricted stock units .

Outstanding as of December 31, 2022 1,353,745 24.30

As of December 31, 2022, there was $ 27.5 million of unrecognized compensation cost related to unvested restricted stock units, which is expected to be recognized over a weighted average period of 3.0 years.

As of December 31, 2021, there was $ 21.6 million unrecognized compensation cost related to unvested restricted stock units .

11 Net loss per share

Basic and diluted net loss per share attributable to common stockholders was calculated as follows:

Three Months Ended September 30, Six Months Ended September 30,

Three Months Ended December 31, Nine Months Ended December 31,

2022 2021 2022 2021

2 unchanged sentences

Net loss per share, basic and diluted $ ( 0.69 ) $ ( 0.57 ) $ ( 2.25 ) $ ( 1.66 )

The 5,284,238 share of the Company's common stock issuable upon exercise of the November 2019 Pre-Funded Warrants, the June 2020 Pre-Funded Warrants and the October 2020 Pre-Funded Warrants described in Note 7 to these consolidated financial statements are included as outstanding common stock in the calculation of basic and diluted net loss per share.

The Company’s potentially dilutive securities, which include stock options and warrants to purchase common stock have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share.

The 9,484,238 shares of the Company's common stock issuable upon exercise of Pre-Funded Warrants described in Note 9 to these consolidated financial statements are included as outstanding common stock in the calculation of basic and diluted net loss per share.

The Company’s potentially dilutive securities, which include stock options and warrants to purchase shares of common stock that resulted from the conversion of warrants to purchase shares of series seed preferred stock existing before the Company's IPO, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share.

Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share is the same.

The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect:

Three and Six Months Ended September 30,

Three and Nine Months Ended December 31,

Options to purchase common stock 7,510,458 6,695,387

29 unchanged sentences

In July 2022, Regeneron informed the Company that the costs of the study have reached the initial budget for the initial study plan of June 2018 and that Regeneron's reimbursement of CERPASS study costs to the Company have completed in the period ending June 30, 2022 in relation to the initial study budget.

The Company and Regeneron are in communication regarding receiving Regeneron's acknowledgement of the sharing of the study costs according to the current budget that superseded that of the initial study plan and initial budget.

As a result of this notice from, and the ongoing communications with, Regeneron, the Company has not recorded any cost-sharing reimbursements from Regeneron in prepaid expenses and other current assets in the consolidated balance sheet or as an offset to research and development expense within the consolidated statement of operations since Regeneron informed the Company that Regeneron’s reimbursement of CERPASS study costs to the Company have completed.

During the six months ended September 30, 2022 and 2021, the Company recorded $ 1.1 million and $ 2.9 million, respectively as an offset to research and development expenses.

During the three and six months ended September 30, 2022 and 2021, the Company did not make any payments to Regeneron under the terms of the agreement.

During the six months ended September 30, 2022 and 2021, the Company received payments under the terms of the agreement from Regeneron of $ 2.0 million and $ 2.7 million, respectively.

As of September 30, 2022 and March 31, 2022, the Company had a balance of $ 1.1 million and $ 2.0 million of receivables from Regeneron in connection with this agreement in prepaid expenses and other current assets in the consolidated balance sheet, respectively.

The Company does not expect any further reimbursements from Regeneron related to the initial study plan of June 2018.

During the three months ended December 31, 2022 and 2021, the Company recorded $ 0.0 million and $ 1.9 million, respectively as an offset to research and development expenses.

During the nine months ended December 31, 2022 and 2021, the Company recorded $ 1.1 million and $ 4.8 million, respectively as an offset to research and development expenses.

During the three and nine months ended December 31, 2022 and 2021, the Company did not make any payments to Regeneron under the terms of the agreement.

During the nine months ended December 31, 2022 and 2021, the Company received payments under the terms of the agreement from Regeneron of $ 3.1 million and $ 4.3 million, respectively.

As of December 31, 2022 and March 31, 2022, the Company had a balance of $ 0.0 million and $ 2.0 million of receivables from Regeneron in connection with this agreement in prepaid expenses and other current assets in the consolidated balance sheet, respectively.

13 Commitments and contingencies

The table below presents the lease-related assets and liabilities recorded on the consolidated balance sheet as of September 30, 2022:

Three Months Ended September 30, Six Months Ended September 30,

The table below presents the lease-related assets and liabilities recorded on the consolidated balance sheet as of December 31, 2022 and 2021:

Three Months Ended December 31, Nine Months Ended December 31,

2022 2021 2022 2021

4 unchanged sentences

Total lease cost $ 1,407 $ 1,411 $ 4,234 $ 4,227

The following table summarizes the classification of lease costs in the consolidated statement of operations for the three months ended September 30, 2022 and 2021 as follows:

Three Months Ended September 30, Six Months Ended September 30,

The following table summarizes the classification of lease costs in the consolidated statement of operations for the three months ended December 31, 2022 and 2021 as follows:

Three Months Ended December 31, Nine Months Ended December 31,

2022 2021 2022 2021

7 unchanged sentences

Total lease cost $ 1,407 $ 1,411 $ 4,234 $ 4,227

The following table summarizes the maturity of the Company's lease liabilities on an undiscounted cash flow basis and a reconciliation to the operating and financing lease liabilities recognized on its balance sheet as of September 30, 2022:

September 30, 2022

December 31, 2022

Operating leases Financing lease Total

2023 (remaining six months) $ 500 $ 1,297 $ 1,797

2023 (remaining three months) $ 260 $ 647 $ 907

2024 1,041 2,639 3,680

6 unchanged sentences

Total lease liabilities $ 5,304 $ 26,705 $ 32,009

The following table provides lease disclosure as of September 30, 2022 and March 31, 2022:

September 30, 2022 March 31, 2022

The following table provides lease disclosure as of December 31, 2022 and March 31, 2022:

December 31, 2022 March 31, 2022

Right-to-use operating lease asset $ 5,002 $ 5,552

6 unchanged sentences

Total lease liabilities $ 32,009 $ 32,839

The following table provides lease disclosure for the three months ended September 30, 2022 and 2021:

Six Months Ended September 30,

The following table provides lease disclosure for the nine months ended December 31, 2022 and 2021:

Nine Months Ended December 31,

Other information

3 unchanged sentences

Financing cash flows from finance leases $ 262 $ 188

Right-to-use asset obtained in exchange for new operating lease liabilities $ — $ 365

Weighted-average remaining lease term - operating leases 6.9 years 7.9 years

2 unchanged sentences

Weighted-average discount rate - financing leases 8.3 % 8.3 %

The variable lease costs and short-term lease costs were insignificant for three and six months ended September 30, 2022 and 2021.

The variable lease costs and short-term lease costs were insignificant for three and nine months ended December 31, 2022 and 2021.

Manufacturing commitments

The Company has entered into an agreement with a contract manufacturing organization to provide clinical trial products.

As of September 30, 2022 and March 31, 2022, the Company had committed to minimum payments under these arrangements totaling $ 1,209 and $ 1,951 , respectively.

As of December 31, 2022 and March 31, 2022, the Company had committed to minimum payments under these arrangements totaling $ 1,144 and $ 1,951 , respectively.

Indemnification agreements

3 unchanged sentences

To date, the Company has not incurred any material costs as a result of such indemnifications.

The Company is not aware of any claims under indemnification arrangements, and therefore it has not accrued any liabilities related to such obligations in its consolidated financial statements as of September 30, 2022 or March 31, 2022.

Legal proceedings

4 unchanged sentences

Information about the Company’s long-lived assets held in different geographic regions is presented in the tables below:

September 30, 2022 March 31, 2022

December 31, 2022 March 31, 2022

United States $ 6,046 $ 6,318

1 unchanged sentence

$ 7,679 $ 7,933

Subsequent Events

On October 6, 2022 (the “Closing Date”), the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Hercules Capital, Inc.

(“Hercules”), in its capacity as administrative agent and collateral agent (the “Agent”) and as a lender, and certain other financial institutions that from time to time may become parties to the Loan Agreement as lenders (collectively, the “Lenders”).

The Loan Agreement provides for term loans in an aggregate principal amount of up to $ 200.0 million under multiple tranches (the “Term Loan Facility”), available to be drawn during the specified time period at the Company's option, which includes (i) an initial term loan advance of $ 30.0 million on the Closing Date with an additional $ 30.0 million available to be drawn on or prior to September 30, 2023, (ii) subject to the Company achieving certain performance milestones, additional term loan advances in an aggregate principal amount of up to $ 115.0 million during the term of the Term Loan Facility, and (iii) subject to approval by the applicable Lenders’ investment committees in their discretion, up to two term loan advances in an aggregate principal amount of up to $ 25.0 million, on or prior to the end of the interest-only period referred to below.

The Company has agreed to use the proceeds of the Term Loan Facility for working capital and general corporate purposes.

The Term Loan Facility will mature on October 1, 2027 (the “Maturity Date”).

Accrued interest is payable monthly following the funding of each term loan advance.

The Company may make payments of interest only, without any loan amortization payments, for a period of forty-eight ( 48 ) months following the Closing Date, which interest-only period may be extended to (i) the date which is fifty-four ( 54 ) months following the Closing Date if certain performance milestones have been achieved, and (ii) the Maturity Date if certain additional performance milestones have been achieved.

At the end of the interest-only period, the Company is required

to begin repayment of the outstanding principal of the Term Loan Facility in equal monthly installments (or, in a single installment, if the interest-only period has been extended to the Maturity Date).

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