What changed in this filing

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Item 1. Financial Statements

2022-04-27 compared with 2021-11-03 · 119 added, 155 removed, 315 unchanged (47% of the section changed)

3 unchanged sentences

(unaudited, in thousands, except share and per share data)

September 30,

Current assets:

2 unchanged sentences

Prepaid expenses and other current assets

Restricted cash, current

Accounts receivable - related party

3 unchanged sentences

Other non-current assets

Restricted cash, excluding current portion

Restricted cash

Liabilities and Stockholders’ Equity

9 unchanged sentences

Finance lease liabilities, excluding current portion

Deferred revenue - related party, excluding current portion

Other non-current liabilities

Total liabilities

2 unchanged sentences

10,000,000 shares authorized

at September 30, 2021 and December 31, 2020;

at March 31, 2022 and December 31, 2021;

no shares issued and

outstanding at September 30, 2021 and December 31, 2020

outstanding at March 31, 2022 and December 31, 2021

Common stock, $ 0.001 par value;

300,000,000 shares authorized at

September 30, 2021 and December 31, 2020;

March 31, 2022 and December 31, 2021;

112,781,291 shares issued and

outstanding at September 30, 2021 and 84,893,994 shares issued and

outstanding at March 31, 2022 and 110,340,281 shares issued and

outstanding at December 31, 2021;

2,158,329 pre-funded warrants outstanding at

September 30, 2021 and December 31, 2020

no pre-funded warrants outstanding at March 31,

2022 and 2,158,329 pre-funded warrants outstanding at December 31, 2021

Additional paid-in capital

7 unchanged sentences

(unaudited, in thousands, except share and per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Collaboration revenue - related party

2 unchanged sentences

General and administrative

Restructuring charges

Total operating expenses

9 unchanged sentences

(unaudited, in thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Other comprehensive loss:

5 unchanged sentences

(unaudited, in thousands, except share data)

For the Three Months Ended September 30, 2021

Comprehensive

Income (Loss)

Stockholders'

Balance at June 30, 2021

Equity-based compensation

Exercise of stock options

Forfeiture of restricted stock awards

Unrealized loss on available-for-sale

Balance at September 30, 2021

For the Nine Months Ended September 30, 2021

For the Three Months Ended March 31, 2022

Comprehensive

Income (Loss)

Stockholders'

1 unchanged sentence

Equity-based compensation

Sale of common stock, net of issuance costs of $ 8,872

Exercise of stock options

Vesting of restricted stock units

Forfeiture of restricted stock awards

Exercise of pre-funded warrants

Unrealized loss on available-for-sale

Balance at September 30, 2021

For the Three Months Ended September 30, 2020

Comprehensive

Income (Loss)

Stockholders'

Balance at June 30, 2020

Equity-based compensation

Vesting of restricted stock units

Forfeiture of restricted stock awards

Balance at September 30, 2020

For the Nine Months Ended September 30, 2020

Balance at March 31, 2022

For the Three Months Ended March 31, 2021

Comprehensive

3 unchanged sentences

Equity-based compensation

Sale of common stock, net of issuance costs of $ 8,872

Exercise of stock options

Vesting of restricted stock units

Forfeiture of restricted stock awards

Unrealized loss on available-for-sale

Balance at September 30, 2020

Balance at March 31, 2021

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

2 unchanged sentences

(unaudited, in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Amortization of (discount)/premium on available-for-sale securities

Amortization of premium on available-for-sale securities

Equity-based compensation expense

Depreciation expense

Gain on disposal of property and equipment

Loss on disposal of property and equipment

Changes in operating assets and liabilities:

9 unchanged sentences

Purchases of available-for-sale securities

Net cash (used in) provided by investing activities

Net cash provided by (used in) investing activities

Cash flows from financing activities:

Proceeds from issuance of common stock, net of issuance costs

Proceeds from exercise of warrants

Proceeds from exercise of stock options

Net cash provided by financing activities

Net decrease in cash, cash equivalents and restricted cash

Net increase in cash, cash equivalents and restricted cash

Cash, cash equivalents, and restricted cash at beginning of period

1 unchanged sentence

Supplemental disclosure of non-cash investing and financing activities:

Change in unrealized loss

Decrease in right of use asset due to lease termination

Offering costs in accruals

Property and equipment included in accounts payable and accruals

15 unchanged sentences

The Company filed an Investigational New Drug application (“IND”) in September 2017 and initiated a Phase I/II clinical trial for SGT-001 in the United States during the fourth quarter of 2017 , which is called IGNITE DMD.

In November 2019, IGNITE DMD was placed on clinical hold by the U.S.

Food and Drug Administration (“FDA”).

In October 2020, following changes to the clinical protocol designed to enhance patient safety, improvements to its manufacturing process, and the provision of additional efficacy and safety data to the FDA, the Company announced that the FDA lifted the clinical hold placed on the Company’s IGNITE DMD Phase I/II clinical trial.

In February 2021, the Company resumed treatment of patients in the IGNITE DMD clinical trial.

In May 2021, the Company announced the advancement of a next-generation Duchenne microdystrophin gene transfer program, SGT-003, a preclinical candidate that combines a novel and rationally-designed capsid candidate from this library with Solid’s proprietary nNOS containing microdystrophin construct.

In March 2022, the Company reported two-year interim safety and efficacy data from the first three patients treated with SGT-001 in the 2E14 vg/kg dose cohort of IGNITE DMD, which results suggested durable benefit compared with natural history trajectories 24 months post-administration of SGT-001 across functional, pulmonary and patient reported outcome measures.

In addition, no new drug-related safety findings have been identified in patients treated with SGT-001 in IGNITE DMD in post-dosing periods of 90 days to approximately four years.

In April 2022, the Company announced that it had concluded enrollment in IGNITE DMD.

In May 2021, the Company announced the advancement of a next-generation Duchenne microdystrophin gene transfer program, SGT-003, a preclinical candidate that combines a novel and rationally designed capsid candidate with the Company’s proprietary neuronal Nitric Oxide Synthase (“nNOS”) containing microdystrophin construct.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on licenses, protection of proprietary technology, dependence on key personnel, compliance with government regulations and the need to obtain additional financing to fund operations.

7 unchanged sentences

The accompanying condensed consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

Through September 30, 2021, the Company has funded its operations primarily with the proceeds from the sale of redeemable preferred units and member units, the sale of common stock and prefunded warrants to purchase shares of its common stock in private placements, the sale of common stock in its initial public offering and follow-on public offering in March 2021 and sales under its at-the-market sales agreement.

Through March 31, 2022, the Company has funded its operations primarily with the proceeds from the sale of redeemable preferred units and member units, the sale of common stock and prefunded warrants to purchase shares of its common stock in private placements, the sale of common stock in its initial public offering and follow-on public offering in March 2021 and sales under an at-the-market sales agreement, dated March 13, 2019, as amended on August 16, 2021 (the “ATM Sales Agreement”), by and between the Company and Jefferies LLC (“Jefferies”).

In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued.

As of September 30, 2021, the Company had an accumulated deficit of $ 458,147 .

During the three and nine months ended September 30, 2021, the Company incurred a net loss of $ 17,983 and $ 53,578 , respectively, and the Company used $ 56,890 of cash in operations for the nine months ended September 30, 2021.

As of March 31, 2022, the Company had an accumulated deficit of $ 502,085 .

During the three months ended March 31, 2022, the Company incurred a net loss of $ 25,328 , and the Company used $ 27,190 of cash in operations for the three months ended March 31, 2022.

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

Based upon its current operating plan, the Company expects that its cash, cash equivalents and available-for-sale securities of $ 229,760 as of September 30, 2021, will be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months from the date of issuance of these financial statements.

Based upon its current operating plan, the Company expects that its cash, cash equivalents and available-for-sale securities of $ 180,050 as of March 31, 2022, will be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months from the date of issuance of these financial statements.

However, the Company has based this estimate on assumptions that may prove to be wrong, and its operating plan may change as a result of many factors currently unknown to it.

As a result, the Company could deplete its capital resources sooner than it currently expects.

The Company expects to finance its future cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances or licensing arrangements.

The Company expects it may finance its future cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances or licensing arrangements.

If the Company is unable to obtain funding, the Company would be forced to delay, reduce or eliminate some or all of its research and development programs, preclinical and clinical testing or commercialization efforts, which could adversely affect its business prospects.

6 unchanged sentences

The year-end condensed consolidated balance sheet data presented for comparative purposes was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP.

The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the operating results for the full year or for any other subsequent interim period.

The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the operating results for the full year or for any other subsequent interim period.

Summary of Significant Accounting Policies

1 unchanged sentence

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting periods.

Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, estimates related to revenue recognition, the recognition of research and development expenses and equity-based compensation.

8 unchanged sentences

Restricted Cash

The Company held restricted cash of $ 2,162 and $ 327 in separate restricted bank accounts as security deposits for leases of the Company’s facilities as of September 30, 2021 and December 31, 2020, respectively.

As of September 30, 2021 and December 31, 2020, the Company classified $ 90 and $ 0 as a current asset and $ 2,072 and $ 327 as a non-current asset respectively.

The Company held restricted cash of $ 2,070 in separate restricted bank accounts as security deposits for leases of the Company’s facilities as of March 31, 2022 and December 31, 2021.

As of March 31, 2022 and December 31, 2021, the Company classified $ 2,070 as a non-current asset.

A reconciliation of the amounts of cash and cash equivalents and restricted cash from the cash flow statement to the balance sheet is as follows:

September 30,

Cash and cash equivalents as presented on balance sheet

Restricted cash, current, as presented on balance sheet

Restricted cash, non-current, as presented on balance sheet

Restricted cash, as presented on balance sheet

Cash and cash equivalents and restricted cash as presented on

17 unchanged sentences

In June 2021, the Company entered into a lease with Hood Park LLC (“Landlord”), pursuant to which the Company will lease approximately 49,869 square feet of office, laboratory, research and development and manufacturing space located in Charlestown, Massachusetts (“Premises”).

The Company intends to relocate its corporate headquarters to the Premises in early 2022.

The Company expects to relocate its corporate headquarters to the Premises in May 2022.

The term of the lease commences on the later of (i) the date the Landlord delivers the Premises to the Company or (ii) the earlier of (a) the date the Company’s work on the Premises is substantially completed, (b) the date the Company commences business operations in the Premises, or (c) the one hundred twentieth (120th) day following the Landlord’s satisfaction of item (i) above.

The lease commencement date is anticipated to be in the first half of 2022.

The date on which the Company will become responsible for paying rent under the lease will be 61 days following the lease commencement date.

The lease commencement date is anticipated to be in the second quarter of 2022.

The initial term of the lease will be for a ten-year period commencing on the lease commencement date, unless earlier terminated.

The lease provides the Company with an option to extend the lease for an additional five-year term.

The Company and the Landlord are each obligated to undertake certain improvements prior to the commencement of the lease.

The Landlord delivered the Premises to the Company in September 2021.

The Company plans to make certain improvements to the Premises prior to commencement of the lease, which will be partially paid for with a tenant improvement allowance.

The Company and the Landlord are each obligated to undertake certain improvements prior to the commencement of the lease, and significant improvements were still in progress as of March 31, 2022.

The lease will commence when the construction of the lessor assets is substantially complete, which is expected to be in May 2022.

The monthly lease payment is approximately $ 305 with annual escalation of approximately 3 %.

The lease includes a $ 10,223 construction allowance.

The Company was required to post a customary letter of credit in the amount of $ 1,833 , subject to decrease on a set schedule, as a security deposit pursuant to the lease.

As of September 30, 2021, the lease had not commenced.

For the three and nine months ended September 30, 2021, the Company incurred approximately $ 680 of tenant improvement allowance receivable.

In June 2021, the Company determined that it no longer needed a floor of office space that it was renting and terminated its lease with another landlord.

As a result of the termination, the Company wrote off $ 1,314 and $ 1,233 of the remaining lease liability and right-of-use asset, respectively, associated with the lease.

As of March 31, 2022, the Company recorded approximately $ 6,171 of tenant improvement allowance receivable, reimbursable by the landlord which is included in other current assets on the accompanying balance sheet.

In April 2022, the Company terminated a lease for lab space in Cambridge, Massachusetts early.

The lease will terminate in June 2022 .

The Company is currently evaluating the impact of the termination agreement to the financial statements including the right of use asset and lease liability.

The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions.

8 unchanged sentences

DiPalma, and other services, including financial planning, offering support and accounting services, in exchange for fees payable to Danforth based on hourly rates.

The Company has paid Danforth approximately $ 194 and $ 381 for the three and nine months ended September 30, 2021, respectively, and $ 0 for each of the three and nine months ended September 30, 2020.

The Company has paid Danforth approximately $ 235 and $ 85 for the three months ended March 31, 2022, and March 31, 2021, respectively.

In accordance with the consulting agreement, in November 2020, the Company issued to Danforth a warrant to purchase 30,000 shares of the Company’s common stock at an exercise price per share of $ 3.29 .

As of September 30, 2021, the shares had vested in full.

As of March 31, 2022, the shares had vested in full.

The consulting agreement may be terminated by either party without cause upon 60 days’ prior written notice to the other party and with cause upon 30 days’ prior written notice to the other party.

Recently Adopted Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes , which simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and clarifies and amends existing guidance to improve consistent application.

The standard became effective for the Company beginning January 1, 2021.

The amendments that are related to changes in ownership of foreign equity method investments or foreign subsidiaries are to be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption.

The amendments that are related to franchise taxes that are partially based on income are to be applied on either a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption.

All other amendments under this ASU are to be applied on a prospective basis.

The Company adopted the guidance effective January 1, 2021 .

The adoption of this new standard did not have a material impact on the Company’s financial statements.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

In August 2020, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No.

2020-06, Debt, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which, among other things, provides guidance on how to account for contracts on an entity’s own equity.

This ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity.

Specifically, the ASU eliminated the need for the Company to assess whether a contract on the entity’s own equity (1) permits settlement in unregistered shares, (2) whether counterparty rights rank higher than shareholder’s rights, and (3) whether collateral is required.

In addition, the ASU requires incremental disclosure related to contracts on the entity’s own equity and clarifies the treatment of certain financial instruments accounted for under this ASU on earnings per share.

The ASU also simplifies the accounting for convertible instruments by removing the beneficial conversion feature and cash conversion feature separation models.

This ASU may be applied on a full retrospective or modified retrospective basis.

This ASU is effective for smaller reporting companies for fiscal years beginning after December 15 , 2023, with early adoption permitted.

The Company does not expect the adoption to materially impact its financial position and results of operations.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

8 unchanged sentences

Collaboration Agreement

On October 22, 2020 (the “Effective Date”), the Company entered into a collaboration and license agreement with Ultragenyx Pharmaceutical Inc.

to focus on the development and commercialization of new gene therapies for Duchenne Muscular Dystrophy.

The Company granted Ultragenyx an exclusive worldwide license for any pharmaceutical product that expresses the Company’s proprietary microdystrophin construct from AAV8 and variants thereof in clade E for the treatment of Duchenne Muscular Dystrophy and other diseases resulting from the lack of functional dystrophin (the “Licensed Products”).

On October 22, 2020 (the “Effective Date”), the Company entered into the Collaboration Agreement with Ultragenyx to focus on the development and commercialization of new gene therapies for Duchenne.

The Company granted Ultragenyx an exclusive worldwide license for any pharmaceutical product that expresses the Company’s proprietary microdystrophin construct from AAV8 and variants thereof in clade E for the treatment of Duchenne and other diseases resulting from the lack of functional dystrophin (the “Licensed Products”).

The Company retains exclusive rights to all other uses of its microdystrophin proteins, including under its existing SGT-001 program.

The Company will conduct certain research and development activities with respect to the development of the Licensed Products.

Ultragenyx will reimburse the Company for personnel and out-of-pocket costs that the Company incurs in conducting such development activities.

The Company is conducting certain research and development activities with respect to the development of the Licensed Products.

Ultragenyx is reimburs ing the Company for personnel and out-of-pocket costs that the Company incurs in conducting such development activities.

In addition, Ultragenyx granted to the Company an exclusive Development Option or Income Share Option (each as defined and described below) exercisable in the Company’s sole discretion one time per Licensed Product.

16 unchanged sentences

Stock Purchase Agreement

In connection with the execution of the Collaboration Agreement, Ultragenyx and the Company also entered into a stock purchase agreement (the “Stock Purchase Agreement”) on October 22, 2020 (the “Closing Date”), pursuant to which the Company issued and sold 7,825,797 shares of its common stock (the “Shares”) to Ultragenyx at a price of $ 5.1113 per share for an aggregate purchase price of approximately $ 40,000 .

In connection with the execution of the Collaboration Agreement, Ultragenyx and the Company also entered into a stock purchase agreement (the “Stock Purchase Agreement”) on the Effective Date, pursuant to which the Company issued and sold 7,825,797 shares of its common stock (the “Shares”) to Ultragenyx at a price of $ 5.1113 per share for an aggregate purchase price of approximately $ 40,000 .

The Stock Purchase Agreement contains customary representations, warranties and covenants of each of the parties thereto.

Following the sale of the Shares, Ultragenyx beneficially owned approximately 14.45 % of the Company’s outstanding common stock .

As of September 30, 2021 , Ultragenyx beneficially owned less than 10 % of the Company’s outstanding common stock.

As of March 31, 2022 , Ultragenyx beneficially owned less than 10 % of the Company’s outstanding common stock.

Investor Agreement

8 unchanged sentences

(2) an obligation to perform research and development services;

and (iii) an obligation to participate in a joint steering committee.

and (3) an obligation to participate in a joint steering committee.

The Company assessed the promised goods and services to determine if they are distinct.

12 unchanged sentences

Under this method, the transaction price is recognized over the contract’s entire performance period, using costs incurred relative to total estimated costs to determine the extent of progress towards completion.

During the three and nine months ended September 30, 2021, the Company recognized $ 3,537 and $ 10,466 , respectively, of related party collaboration revenue, associated with its collaboration with Ultragenyx related to research and development services performed during the period and the corresponding cost reimbursement receivable.

The following table presents changes in the balances of the Company’s related party collaboration receivables and contract liabilities during the three and nine months ended September 30, 2021:

Balance as of June 30, 2021

Balance as of September 30, 2021

Related party collaboration receivable

Contract liabilities:

Deferred revenue

During the three months ended March 31, 2022 and March 31, 2021, the Company recognized $ 1,925 and $ 3,335 , respectively, of related party collaboration revenue, associated with its collaboration with Ultragenyx related to research and development services performed during the period and the corresponding cost reimbursement receivable.

The following table presents changes in the balances of the Company’s related party collaboration receivables and contract liabilities during the three months ended March 31, 2022:

Balance as of December 31, 2021

Balance as of September 30, 2021

Balance as of March 31, 2022

Related party collaboration receivable

1 unchanged sentence

Deferred revenue

The change in receivables balance for the three and nine months ended September 30, 2021 is driven by amounts owed to the Company for research and development services provided, partially offset by $ 280 in collections received from Ultragenyx during the nine months ended September 30, 2021.

As of September 30, 2021, there was $ 11,125 of deferred revenue related to the Collaboration Agreement, which is classified as either current or non-current in the accompanying condensed consolidated balance sheet based on the period the services are expected to be delivered.

Additionally, as of September 30, 2021, there was $ 594 of related party collaboration receivables related to reimbursable costs expected to be received from Ultragenyx for research and development services performed.

The changes in the related party collaboration receivables balance during the three months ended March 31, 2022 are driven by amounts owed to the Company for research and development services provided, partially offset by the collections received from Ultragenyx during the three months ended March 31, 2022.

As of March 31, 2022 and December 31, 2021, there was $ 6,170 and $ 8,080 , respectively, of deferred revenue related to the Collaboration Agreement, which is classified as either current or non-current in the accompanying condensed consolidated balance sheet based on the period the services are expected to be delivered.

Additionally, as of March 31, 2022 and December 31, 2021, there was $ 14 and $ 110 , respectively, of related party collaboration receivables related to reimbursable costs expected to be received from Ultragenyx for research and development services performed.

Costs incurred relating to the Collaboration Agreement consist of internal and external research and development costs, which primarily include salaries and benefits, lab supplies, preclinical research studies, clinical studies, consulting services, and commercial development.

These costs are included in research and development expenses in the Company’s condensed consolidated statement of operations during the three and nine months ended September 30, 2021.

These costs are included in research and development expenses in the Company’s condensed consolidated statement of operations during the three months ended March 31, 2022.

Fair Value of Financial Assets and Liabilities

The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values:

Fair Value Measurements as of September 30, 2021

Fair Value Measurements as of March 31, 2022

Cash equivalents

2 unchanged sentences

Cash equivalents

As of September 30, 2021 and December 31, 2020, the fair values of the Company’s available-for-sale debt securities, which consisted of treasury bills, commercial paper, and corporate bond securities, was determined using Level 2 inputs.

During the nine months ended September 30, 2021 and the year ended December 31, 2020, there were no transfers between Level 1, Level 2 and Level 3.

Available-for-sale securities

As of March 31, 2022 and December 31, 2021, the fair values of the Company’s available-for-sale securities, which consisted of corporate bond securities as of March 31, 2022 and treasury bills, commercial paper, and corporate bond securities as of December 31, 2021, were determined using Level 2 inputs.

During the three months ended March 31, 2022 and the year ended December 31, 2021, there were no transfers between Level 1, Level 2 and Level 3.

The fair value of the Company’s cash, restricted cash, accounts payable, and accrued expenses and other current liabilities approximate their carrying value due to their short-term maturities.

Available-for-Sale Securities

As of September 30, 2021, the fair value of available-for-sale securities by type of security was as follows:

September 30, 2021

As of March 31, 2022, the fair value of available-for-sale securities by type of security was as follows:

March 31, 2022

Corporate bond securities

As of December 31, 2021, the fair value of available-for-sale securities by type of security was as follows:

December 31, 2021

Treasury bill

1 unchanged sentence

Commercial paper

As of December 31, 2020, there were no available-for-sale securities.

The estimated fair value and amortized cost of the Company’s available-for-sale securities by contractual maturity are summarized as follows:

September 30, 2021

The estimated fair value and amortized cost of the Company’s available-for-sale securities as of March 31, 2022, by contractual maturity are summarized as follows:

March 31, 2022

Due in one year or less

Total available-for-sale securities

The weighted average maturity of the Company’s available-for-sale securities as of September 30, 2021 was approximately 0.6 years.

The weighted average maturity of the Company’s available-for-sale securities as of March 31, 2022 was approximately 0.7 years .

The estimated fair value and amortized cost of the Company’s available-for-sale securities as of December 31, 2021 by contractual maturity are summarized as follows:

December 31, 2021

Due in one year or less

Total available-for-sale securities

The weighted average maturity of the Company’s available-for-sale securities as of December 31, 2021 was approximately 0.7 years .

Property and Equipment

Property and equipment consists of the following:

September 30,

Furniture and fixtures

5 unchanged sentences

Less accumulated depreciation

Depreciation expense was $ 752 and $ 2,204 for the three and nine months ended September 30, 2021.

Depreciation expense was $ 709 and $ 734 for the three months ended March 31, 2022 and March 31, 2021, respectively.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:

September 30,

Prepaid research and development expenses

Tenant improvement allowance receivable

Prepaid expenses and other assets

1 unchanged sentence

Accrued expenses and other current liabilities consist of the following:

September 30,

Accrued research and development

3 unchanged sentences

In July 2019, the Company issued and sold in a private placement (i) 10,607,525 shares of its common stock at a price per share of $ 4.65 and (ii) 2,295,699 pre-funded warrants to purchase shares of its common stock at a price per warrant of $ 4.64 .

Each pre-funded warrant is exercisable for one share of common stock at an exercise price of $ 0.01 and the pre-funded warrants have no expiration date.

The Company received gross proceeds from the private placement of $ 59,977 , before deducting offering costs of $ 2,102 .

Each pre-funded warrant was exercisable for one share of common stock at an exercise price of $ 0.01 and the pre-funded warrants had no expiration date.

In October 2020, 137,370 of these pre-funded warrants were exercised.

No warrants were exercised during the three and nine months ended September 30, 2021 and 2020.

In October 2020, in connection with the execution of the Collaboration Agreement, Ultragenyx and the Company also entered into the Stock Purchase Agreement, pursuant to which the Company issued and sold 7,825,797 shares of its common stock to Ultragenyx at a price of $ 5.1113 per share for an aggregate purchase price of approximately $ 40,000 .

In October 2020, the Company sold 6,309,632 shares of common stock pursuant to a sales agreement (the “ATM Sales Agreement”), by and between the Company and Jefferies LLC (“Jefferies”), resulting in net proceeds to the Company of $ 23,209 .

In December 2020, the Company issued and sold in a private placement 24,324,320 shares of its common stock at a price per share of $ 3.70 .

The Company received net proceeds from the private placement of $ 86,210 after deducting placement agent fees and offering expenses of $ 3,790 .

During the three months ended March 31, 2022, 2,158,329 of these pre-funded warrants were exercised.

No warrants were exercised during the three months ended March 31, 2021.

In March 2021, the Company issued and sold in a public offering 25,000,000 shares of its common stock at a price to the public of $ 5.575 per share.

1 unchanged sentence

Equity-Based Compensation

In connection with the closing of the Company’s initial public offering, the board of directors and stockholders approved the 2018 Omnibus Incentive Plan, which provides for the reservation of 5,001,000 shares of common stock for equity awards.

On June 16, 2020, the Company’s stockholders approved the 2020 Equity Incentive Plan (“2020 Plan”) which consists of (i) 3,000,000 shares of common stock and (ii) additional shares of common stock (up to 4,879,025 ) as is equal to (i) the number of shares reserved under the Company’s 2018 Omnibus Incentive Plan (“2018 Plan”) that remain available for grant under the 2018 Plan as of immediately prior to the date the 2020 Plan was approved by the Company’s stockholders and (ii) the number of shares subject to awards granted under the 2018 Plan which awards expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right.

In connection with the closing of the Company’s initial public offering, the Board of Directors and stockholders approved the 2018 Omnibus Incentive Plan (the “2018 Plan”), which provides for the reservation of 5,001,000 shares of common stock for equity awards.

On June 16, 2020, the Company’s stockholders approved the 2020 Equity Incentive Plan (“2020 Plan”) which consists of (i) 3,000,000 shares of common stock and (ii) additional shares of common stock (up to 4,879,025 ) as is equal to (i) the number of shares reserved under the 2018 Plan that remain available for grant under the 2018 Plan as of immediately prior to the date the 2020 Plan was approved by the Company’s stockholders and (ii) the number of shares subject to awards granted under the 2018 Plan which awards

expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right.

In June 2021, the Company’s stockholders approved an amendment to the 2020 Plan to reserve an additional 7,000,000 shares of common stock for issuance under the plan.

At September 30, 2021, 8,836,782 shares remained available for future issuance under the 2020 Plan.

As of March 31, 2022 , 4,901,412 shares remained available for future issuance under the 2020 Plan.

Under the 2020 Plan, stock options may not be granted at less than fair value on the date of grant.

In June 2021, the Company’s stockholders also approved the 2021 Employee Stock Purchase Plan (“ESPP”), which provides for 1,102,885 shares to be available for purchase by eligible employees according to its

In June 2021, the Company’s stockholders also approved the 2021 Employee Stock Purchase Plan (“ESPP”) , which provides for 1,102,885 shares to be available for purchase by eligible employees according to its terms .

The first offering period under the ESPP commenced on September 1, 2021.

At September 30, 2021, 1,102,885 shares remained available for future issuance under the ESPP.

During the three and nine months ended September 30, 2021, the Company granted options for the purchase of 458,350 and 3,460,245 , respectively, shares of common stock.

During the three and nine months ended September 30, 2021, the Company granted 98,650 restricted stock units.

As of March 31, 2022 , 1,058,204 shares remained available for future issuance under the ESPP.

During the three months ended March 31, 2022 and March 31, 2021, the Company granted options for the purchase of 2,621,075 and 2,397,495 shares of common stock, respectively.

During the three months ended March 31, 2022, the Company granted 1,451,495 restricted stock units.

The Company did not grant restricted stock units for the three months ended March 31, 2021.

The Company recorded equity-based compensation expense related to all of its share-based awards to employees and non-employees in the following captions within its condensed consolidated statements of operations:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Research and development

General and administrative

Restructuring

During the three and nine months ended September 30, 2021 and 2020, the Company recorded no income tax benefits for the net operating losses incurred or for the research and development tax credits and orphan drug credits generated in each year due to its uncertainty of realizing a benefit from those items.

The Company has provided a valuation allowance for the full amount of its net deferred tax assets because, at September 30, 2021 and December 31, 2020, it was more likely than not that any future benefit from deductible temporary differences and net operating loss and tax credit carryforwards would not be realized.

As of September 30, 2021 and December 31, 2020, the Company had no t recorded any amounts for unrecognized tax benefits.

During the three months ended March 31, 2022 and 2021, the Company recorded no income tax benefits for the net operating losses incurred or for the research and development tax credits and orphan drug credits generated in each year due to its uncertainty of realizing a benefit from those items.

The Company has provided a valuation allowance for the full amount of its net deferred tax assets because, at March 31, 2022 and December 31, 2021, it was more likely than not that any future benefit from deductible temporary differences and net operating loss and tax credit carryforwards would not be realized.

As of March 31, 2022 and December 31, 2021, the Company had no t recorded any amounts for unrecognized tax benefits.

The Company files income tax returns as prescribed by the tax laws of the jurisdictions in which it operates.

6 unchanged sentences

The Company may periodically become subject to legal proceedings and claims arising in connection with ongoing business activities, including claims or disputes related to patents that have been issued or that are pending in the field of research on which the Company is focused.

The Company is not aware of any material legal proceedings or claims as of September 30, 2021.

The Company is not aware of any material legal proceedings or claims as of March 31, 2022.

Net Loss per Share

1 unchanged sentence

The numerator for basic and diluted net loss per share attributable to common stockholders is as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Net loss attributable to common stockholders

The denominator is as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Weighted average shares of common stock outstanding,

2 unchanged sentences

Net loss per share attributable to common stockholders, basic and diluted is as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Net loss per share attributable to common stockholders

The following potential common stock equivalents, presented based on amounts outstanding at each period end, were excluded from the calculation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect for the nine months ended September 30:

Options to purchase shares of common stock

1 unchanged sentence

Unvested restricted stock units

Subsequent Events

In April 2022, the Company implemented changes to its corporate strategy to prioritize the advancement of its key programs, SGT-001 and SGT-003.

In connection with the changes to corporate operations, the Company reduced headcount by approximately 35 percent.

The Company expects to substantially complete the restructuring in the second quarter of 2022.

The Company estimates total restructuring costs of approximately $ 1,700 related to severance and other employee termination benefits.

The Company expects that approximately $ 500 would be paid during the three months ended June 30, 2022 and approximately $ 1,200 would be paid during the remainder of 2022.

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