What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-05-06 compared with 2020-11-05 · 109 added, 236 removed, 182 unchanged (65% of the section changed)

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We are a multi-asset, clinical-stage biopharmaceutical company focused on identifying, developing and commercializing treatments in high unmet need areas involving multi-drug resistant, or MDR, bacterial infections and rare diseases.

Our most advanced product candidate, Tebipenem Pivoxil Hydrobromide, or tebipenem HBr (previously SPR994), is designed to be the first oral carbapenem-class antibiotic for use in adults to treat MDR Gram-negative infections.

Our most advanced product candidate, Tebipenem Pivoxil Hydrobromide, or tebipenem HBr, is designed to be the first broad-spectrum oral carbapenem-class antibiotic for use in adults to treat MDR Gram-negative infections.

Treatment with effective orally administrable antibiotics may prevent hospitalizations for serious infections and enable earlier, more convenient and cost-effective treatment of patients after hospitalization.

We are also developing SPR720, a novel oral antibiotic designed for the treatment of a rare, orphan disease caused by pulmonary non-tuberculous mycobacterial infections, or NTM disease.

In addition, we have a platform technology known as our Potentiator Platform, which includes an IV-administered product candidate, SPR206, being developed to treat MDR Gram-negative infections in the hospital.

We are also developing SPR720, a novel oral antibiotic designed for the treatment of a rare, orphan disease caused by non-tuberculous mycobacterial pulmonary infections, or NTM disease.

In addition, we have a Potentiator technology, which includes an IV-administered product candidate, SPR206, being developed to treat MDR Gram-negative infections in the hospital.

We believe that our novel product candidates, if successfully developed and approved, would have a meaningful patient impact and significant commercial applications for the treatment of MDR infections in both the community and hospital settings.

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Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates.

As of September 30, 2020, we had an accumulated deficit of $259.1 million, and cash, cash equivalents and marketable securities of $127.2 million.

As of March 31, 2021, we had an accumulated deficit of $297.1 million, and cash, cash equivalents and marketable securities of $115.7 million.

We expect to continue to incur significant expenses and increasing operating losses for at least the next several years.

Based on our current plans, we believe that our existing cash, cash equivalents and marketable securities, together with the committed funding from our existing BARDA contract and other non-dilutive funding commitments, will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2022, through the approval process for tebipenem HBr.

Based on our current plans, we believe that our existing cash, cash equivalents and marketable securities, together with the committed funding from our existing BARDA contract and other non-dilutive funding commitments, will enable us to fund our operating expenses and capital expenditure requirements into the second quarter of 2022, including through the submission of the New Drug Application, or NDA, for tebipenem HBr.

This timeline is subject to uncertainty as to the timing of future expenditures.

We have developed plans to mitigate this risk, which primarily consist of raising additional capital through some combination of equity or debt financings, potentially new collaborations, additional grant funding and/or reducing cash expenditures.

We have developed plans to mitigate this risk, which primarily consist of raising additional capital through some combination of equity or debt financings, potential new collaborations, additional grant funding and/or reducing cash expenditures.

If we are not able to secure adequate additional funding, we plan to make reductions in spending.

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Recent Developments

Pre-NDA Meeting for tebipenem HBr

On March 25, 2021, we completed a pre-NDA meeting with the U.S.

Food and Drug Administration, or FDA, for tebipenem HBr and subsequently obtained written minutes from the meeting.

The purpose of the meeting was to discuss format and content of the submission.

Subject to FDA’s review of the full submission, we achieved consensus that the package as described would allow review of the NDA.

We anticipate submitting an NDA for tebipenem HBr to the FDA in the second half of 2021.

Updates on SPR206

In conjunction with Everest Medicines, and through our grant from the DoD awarded in July 2019, we plan to conduct a Phase 1 bronchoalveolar lavage (BAL) clinical trial assessing the penetration of SPR206 into the pulmonary compartment in the second quarter of 2021, as well as initiate a renal impairment study (RIS) of SPR206 in the second quarter of 2021.

Update on Phase 2a Clinical Trial of SPR720

On February 5, 2021, we announced that the FDA informed us that a clinical hold had been placed on our Phase 2a clinical trial of SPR720, following our notification to the FDA of our decision to pause dosing in our ongoing Phase 2a clinical trial of SPR720 as a precautionary measure related to events in our ongoing animal toxicology study of SPR720.

The decision to implement the pause was made based on a recommendation from the Company’s Safety Review Board, or SRB, following review of data from an ongoing toxicology study of SPR720 in adult non-human primates in which mortalities with inconclusive causality to treatment were observed.

The animal study is being conducted to assess the potential toxicity of SPR720.

A concurrent study of SPR720 in rats is proceeding uneventfully.

These studies are meant to support longer-term treatment with SPR720 beyond the 28 days currently supported by IND-enabling toxicology studies.

No serious adverse events have been observed in any human study participants.

Subsequent to receiving verbal notification from the FDA of the clinical hold, we received a formal clinical hold letter in which the FDA has requested additional information from the non-human primate trial, including a study report.

We have decided to discontinue the Phase 2a clinical trial at this time to best facilitate future potential adjustments to the protocol based on FDA feedback and to avoid incurring costs associated with the trial while on clinical hold.

We are continuing to work with the FDA to evaluate the findings and determine the further development pathway for the SPR720 clinical program.

Business Update regarding COVID-19

The spread of SARS-CoV-2, and the resulting disease COVID-19 in 2020, has caused an economic downturn on a global scale, as well as widespread business disruptions and significant volatility in the financial markets.

In March 2020, the World Health Organization declared COVID-19 a pandemic.

In response to the pandemic, we have implemented a remote working policy for all employees to aid the global containment effort.

Underwritten Public Offering

On September 15, 2020, we completed an underwritten public offering of 4,785,000 shares of common stock and 3,215,000 shares of our Series D Convertible Preferred Stock, or Series D Preferred Stock.

The price to the public in the offering was $10.00 per share with respect to the common stock and the Series D Preferred Stock.

We received net proceeds from the offering of approximately $74.7 million after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

In addition, pursuant to the Underwriting Agreement, we granted the underwriters an option, exercisable for 30 days, to purchase up to 1,200,000 additional shares of our common stock.

On October 1, 2020, we issued and sold all 1,200,000 shares of common stock at the price of $10.00 per share pursuant to the underwriters’ exercise of their option to purchase additional shares of common stock, resulting in additional net proceeds of approximately $11.2 million after deducting underwriting discounts and commissions.

The shares of Series D Preferred Stock are convertible on a one-to-one basis into shares of our common stock at any time at the option of the holder, provided that the holder will be prohibited from converting the Series D Preferred Stock into shares of our common stock if, as a result of such conversion, the holder, together with its affiliates, would own more than 9.99% of the total number of shares of our common stock then issued and outstanding.

In the event of our liquidation, dissolution, or winding up, holders of our Series D Preferred Stock will receive a payment equal to $0.001 per share of Series D Preferred Stock before any proceeds are distributed to the holders of our common stock and equal to any distributions to the holders of Series A Convertible Preferred Stock, Series B Convertible Preferred Stock and Series C Convertible Preferred Stock.

The Series D Preferred Stock has no voting rights, except as required by law and except that the consent of the Series D Preferred Stock holders will be required to amend the terms of the Series D Preferred Stock.

Tebipenem HBr

On September 8, 2020, we announced positive topline results for the Phase 3 ADAPT-PO clinical trial of oral tebipenem HBr in complicated urinary tract infection, or cUTI, and acute pyelonephritis, or AP.

The ADAPT-PO trial is the first ever trial to compare an all oral regimen against an all intravenous, or IV, regimen for the treatment of cUTI.

The pivotal Phase 3 clinical trial of oral tebipenem HBr met the primary endpoint, demonstrating statistical non-inferiority versus IV ertapenem.

The primary endpoint of the trial was defined as the overall response rate (combined clinical cure plus microbiological eradication) at the test-of-cure, or TOC, visit in the microbiological-intent-to-treat population, or micro-ITT.

Favorable overall response rates at TOC were 58.8% versus 61.6% for tebipenem HBr and ertapenem, respectively (treatment difference, -3.3%;

95% confidence interval [CI]:

-12.5% NI margin).

Clinical cure rates at TOC were high, at greater than 93% in both treatment groups, and overall response rates were consistent across key subgroups of interest.

In the ADAPT-PO trial, comparative safety data from the 1,372 hospitalized adult patients who enrolled in the trial suggest that tebipenem HBr was well-tolerated, with a safety profile similar to that of ertapenem.

Treatment emergent adverse events, or TEAEs, were reported in approximately 26% of patients in both treatment groups.

The most commonly reported TEAEs in both treatment groups were diarrhea (5.0%) and headache (3.8%).

Serious TEAEs were infrequent (1.3% for tebipenem HBr versus 1.7% for ertapenem) and no deaths were reported in the trial.

Three Clostridioides difficile -associated TEAEs were observed in the ertapenem group, while none were observed in the tebipenem HBr group.

ADAPT-PO is a global, randomized, placebo-controlled Phase 3 clinical trial that evaluated the safety and efficacy of tebipenem HBr in hospitalized adult patients with cUTI or AP.

Patients were randomized (1:1) to receive 600 mg of tebipenem HBr orally every 8 hours, or 1 g of ertapenem IV every 24 hours, for a total of 7 to 10 days.

Patients with concurrent bacteremia received up to 14 days of therapy.

The primary endpoint was the overall response, defined as the combination of clinical cure and microbiological eradication of the causative pathogen(s), at the TOC visit (Day 19, plus or minus 2 days) and was assessed in the micro-ITT population.

The primary analysis and assessment of non-inferiority was evaluated using a pre-specified -12.5% non-inferiority, or NI, margin.

This NI margin was a modification of the original NI margin of -10% that was discussed with the U.S.

Food and Drug Administration, or FDA, because of concern that the COVID-19 pandemic could have an adverse effect on the trial.

As a result, the NI margin was modified prior to database lock from the original NI margin.

However, as noted by the lower bound of the 95% confidence interval (-9.7), the trial also achieved success according to the original -10% NI margin.

W e presented additional details on the ADAPT-PO trial at IDWeek 2020 on October 24 , 2020 demonstrating that both the clinical cure and microbiological eradication rates were comparable between treatment groups at the end of treatment, TOC and at the late follow-up visits .

We anticipate submi tting a New Drug Application for tebipenem HBr to the FD A in the second quarter of 2021.

In September 2020, SPR720 received Fast Track designation for the treatment of adult patients with nontuberculous mycobacteria pulmonary disease (NTM-PD) by the FDA.

On August 26, 2020, we announced that the FDA accepted our investigational new drug, or IND, application for SPR720.

With the IND accepted, we expect to initiate a Phase 2a clinical trial evaluating SPR720 in patients with nontuberculous mycobacterial, or NTM, pulmonary disease by year-end 2020.

The planned Phase 2a clinical trial is designed as a multi-center, partially blinded, placebo-controlled proof-of-concept clinical trial that will enroll approximately 90 treatment-inexperienced patients with NTM pulmonary disease due to Mycobacterium avium complex.

Patients will be randomized to receive either 500mg or 1,000mg of oral SPR720, placebo or standard of care consisting of a macrolide and ethambutol, plus the option of adding a rifamycin.

The objectives of the trial are to evaluate plasma pharmacokinetics, safety, tolerability, and microbiological response of SPR720 compared with placebo and standard of care over 28 days of treatment.

Potentiator Platform

We achieved a development milestone from our partner Everest Medicines upon delivery of the SPR206-101 SAD/MAD clinical study report, or CSR, in October 2020, as specified under the regional collaboration launched in 2019.

We expect to present final data from the Phase 1 clinical trial in the first half of 2021.

In conjunction with Everest Medicines, and through its grant from the DoD awarded in July 2019, we plan to conduct a Phase 1 BAL clinical trial assessing the penetration of SPR206 into the pulmonary compartment in the first half of 2021, as well as initiate a renal impairment study of SPR206 in 2021.

The continued spread of SARS-CoV-2, and the resulting disease COVID-19, has resulted in an economic downturn on a global scale, as well as significant volatility in the financial markets.

In response to the pandemic, we have maintained a remote working policy for all employees to aid the global containment effort.

Components of Our Results of Operations

Grant Revenue

To date, we have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products in the foreseeable future.

Sales Revenue

To date, we have not generated any revenue from product sales.

If our development efforts for our product candidates are successful and result in regulatory approval, we may generate revenue in the future from product sales.

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We may never succeed in obtaining regulatory approval for any of our product candidates.

Grant Revenue

To date, the majority of our revenue has been derived from government awards.

We expect that our revenue for the next several years will be derived primarily from payments under our government awards that we have currently entered into and that we may enter into in the future.

We expect that our revenue for the next few years will be derived primarily from payments under our government awards that we have currently entered into and that we may enter into in the future.

Collaboration Revenue

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Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our research activities, including our drug discovery efforts, and the development of our product candidates.

Since the fourth quarter of 2016 and through September 30, 2020, we have recorded research and development expenses conducted by our Australian subsidiary net of a 43.5% research and development tax incentive we expect to receive for qualified expenses from the Australian government.

Research and development expenses consist primarily of costs incurred for our research activities, including our drug discovery efforts, and the development of our product candidates, which include:

employee-related expenses, including salaries, related benefits, travel and share-based compensation expense for employees engaged in research and development functions;

expenses incurred in connection with the preclinical and clinical development of our product candidates, including under agreements with contract research organizations, or CROs;

costs incurred in connection with our government awards;

the cost of consultants and contract manufacturing organizations, or CMOs, that manufacture drug products for use in our preclinical studies and clinical trials;

facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance and supplies;

payments made under third-party licensing agreements.

We have recorded research and development expenses conducted by our Australian subsidiary net of a 43.5% research and development tax incentive we expect to receive for qualified expenses from the Australian government.

In June 2019, we entered into a collaboration with the Bill & Melinda Gates Medical Research Institute, or the Gates MRI, a nonprofit research institution wholly owned by the Bill and Melinda Gates Foundation, to develop SPR720 for the treatment of lung infections caused by Mycobacterium tuberculosis , or Mtb.

In furtherance of the Gates MRI’s charitable purposes, we also granted the Gates MRI a no cost, exclusive license to develop, manufacture and commercialize SPR720 for the treatment of tuberculosis, or TB, in low- and middle- income countries.

Gates MRI will conduct and fund preclinical and clinical studies for the development of SPR720 against TB, and also fund certain agreed upon collaborative research activities performed by us.

Due to our assessment that we do not have a vendor/customer relationship with the Gates MRI, we will recognize the funding received under the agreement as a reduction to the research and development expenses as the related expenses are incurred.

Gates MRI will conduct and fund preclinical and clinical studies for the development of SPR720 against TB, and fund certain agreed upon collaborative research activities performed by us.

Due to our assessment that we do not have a vendor/customer relationship with the Gates MRI, we recognize the funding received under the agreement as a reduction to the research and development expenses as the related expenses are incurred.

We expense research and development costs as incurred.

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Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

The Company continues to expect that its research and development expenses will increase in 2020 relative to 2019 due to the greater expense associated with the pivotal ADAPT-PO trial, for which the Company reported data in the third quarter of 2020, the initiation of a SPR720 Phase 2a clinical trial by year-end 2020, and increased research and development personnel to support the ongoing and planned programs.

At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical and clinical development of any of our product candidates.

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We anticipate that our general and administrative expenses will increase in the foreseeable future as we increase our headcount to support our continued research, development and commercialization of our product candidates.

We also anticipate that we will incur increased accounting, audit, legal, regulatory, compliance, infrastructure and director and officer insurance costs as well as investor and public relations expenses associated with operating as a public company.

Other Income (Expense)

Interest Income

Interest income consists of interest earned on our cash equivalents, which are primarily invested in money market accounts, as well as interest earned on our investments in marketable securities that we held during the three and nine months ended September 30, 2020 and 2019.

Other Income (Expense), Net

Other income (expense), net, consists of insignificant amounts of miscellaneous income, as well as realized and unrealized gains and losses from foreign currency-denominated cash balances, vendor payables and receivables from the Australian research and development tax incentive.

Since our inception, we have not recorded any income tax benefits for the net losses we have incurred in each year or for our earned research and development tax credits, as we believe, based upon the weight of available evidence, that it is more likely than not that all of our net operating loss carryforwards and tax credits will not be realized.

As of December 31, 2019 , we had federal and state net operating loss carryforwards of $156.8 million and $157.8 million, respectively, which may be available to offset future income tax liabilities and begin to expire in 2033.

In addition, as of December 31, 2019 , we had foreign net operating loss carryforwards of $7.7 million, which may be available to offset future income tax liabilities and do not expire.

As of December 31, 2019 , we also had federal and state research and development tax credit carryforwards of $4.1 million and $1.1 million, respectively, which begin to expire in 2033 and 2028, respectively.

We have recorded a full valuation allowance against our net deferred tax assets at each balance sheet date.

Critical Accounting Policies and Significant Judgments and Estimates

A description of our significant accounting policies is disclosed in Note 2 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020 and in Note 2 to our unaudited consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States, or GAAP.

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Our actual results may differ from these estimates under different assumptions or conditions.

We believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.

Funding Received from Government Contracts, Tax Incentives and Collaborations

Since our inception, we have been able to obtain partial funding for our research and development activities from government contracts, government tax incentives and a collaboration arrangement.

The classification within our statement of operations and comprehensive loss of the funding received under these arrangements is subject to management judgment based on the nature of the arrangements we enter into, the source of the funding and whether the funding is considered central to our business operations.

Government Contracts

We generate revenue from government contracts that reimburse us for certain allowable costs for funded projects.

We have determined that government grant revenue is outside the scope of ASC 606.

For contracts with government agencies, when we have concluded that we are the principal in conducting the research and development expenses and where the funding arrangement is considered central to our ongoing operations, we classify the recognized funding received as revenue.

We recognize funding received from the Biomedical Advanced Research and Development Authority, or BARDA, the U.S.

Department of Defense, or the DoD, and the National Institute of Allergy and Infectious Diseases, or NIAID, of the National Institutes of Health, or NIH, as revenue, rather than as a reduction of research and development expenses, because we are the principal in conducting the research and development activities and these contracts are central to our ongoing operations.

We recognize revenue only after the qualifying expenses related to the contracts have been incurred, we are reasonably assured that the expenses will be reimbursed and the revenue is collectable.

We record revenue recognized upon incurring qualifying expenses in advance of billing as unbilled revenue, which is included in other receivables in our consolidated balance sheet.

The related costs incurred by us are included in research and development expense in our consolidated statements of operations and comprehensive loss.

Government Tax Incentives

For available government tax incentives that we may earn without regard to the existence of taxable income and that require us to forego tax deductions or the use of future tax credits and net operating loss carryforwards, we classify the funding recognized as a reduction of the related qualifying research and development expenses incurred.

Since the fourth quarter of 2016, our operating subsidiary in Australia has met the eligibility requirements to receive a 43.5% tax incentive for qualifying research and development activities.

We recognize these incentives as a reduction of research and development expenses in our consolidated statements of operations in the same period that the related qualifying expenses are incurred.

Reductions of research and development expense recognized upon incurring qualifying expenses in advance of receipt of tax incentive payments are recorded in our consolidated balance sheet as tax incentive receivables.

Related to these incentives, we recognized reductions of research and development expense of less than $0.1 million and $0.1 million during the three months ended September 30, 2020 and 2019, respectively, and $0.3 million and $0.3 million during the nine months ended September 30, 2020 and 2019

Collaboration Agreements

For collaboration agreements with a third party, to determine the appropriate statement of operations classification of the recognized funding, we first assess whether the collaboration arrangement is within the scope of the accounting guidance for collaboration arrangements.

If it is, we evaluate the collaborative arrangement for proper classification in the statement of operations based on the nature of the underlying activity and we assess the payments to and from the collaborative partner.

If the payments to and from the collaborative partner are not within the scope of other authoritative accounting guidance, we base the statement of operations classification for the payments received on a reasonable, rational analogy to authoritative accounting guidance, applied in a consistent manner.

Conversely, if the collaboration arrangement is not within the scope of accounting guidance for collaboration arrangements, we assess whether the collaboration arrangement represents a vendor/customer relationship.

If the collaborative arrangement does not represent a vendor/customer relationship, we then classify the funding payments received in the statement of operations and comprehensive loss as a reduction of the related expense that is incurred.

In June 2019, we entered into a collaboration agreement with the Gates MRI and concluded that the agreement is within the scope of the accounting guidance for collaboration arrangements.

Due to the cost-funded nature of the payments and our assessment that we do not have a vendor/customer relationship with the Gates MRI, we will recognize the funding received under the agreement as a reduction to research and development expense as we incur the related expenses.

Accrued Research and Development Expenses

As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued research and development expenses.

This process involves reviewing open contracts and purchase orders, communicating with our applicable personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs.

The majority of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met;

however, some require advance payments.

We make estimates of our accrued expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances known to us at that time.

We periodically confirm the accuracy of the estimates with the service providers and make adjustments if necessary.

Examples of estimated accrued research and development expenses include fees paid to:

vendor in connection with the preclinical development activities;

CMOs in connection with the production of preclinical and clinical trial materials;

CROs in connection with preclinical and clinical studies;

investigative sites in connection with clinical trials.

We base our expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant to quotes and contracts with multiple research institutions and CROs that conduct and manage preclinical studies and clinical trials on our behalf.

The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows.

There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense.

In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period.

If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or prepaid expense accordingly.

Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period.

To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses.

Share-Based Compensation

We measure all share-based awards granted to employees and directors based on the fair value on the date of grant using the Black-Scholes option-pricing model, and we recognize compensation expense of those awards over the requisite service period, which is generally the vesting period of the respective award.

Generally, we issue awards with only service-based vesting conditions and record the expense for these awards using the straight-line method.

The Black-Scholes option-pricing model uses as inputs the fair value of our common stock and assumptions we make for the volatility of our common stock, the expected term of our common stock options and performance-based awards, the risk-free interest rate for a period that approximates the expected term of our common stock options and performance-based awards, and our expected dividend yield.

We have made no changes to our existing critical accounting policies, as described in our Annual Report on Form 10-K for the year ended December 31, 2020.

Results of Operations

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These factors raise substantial doubt about our ability to continue as a going concern.

Comparison of the Three Months Ended September 30, 2020 and 2019

The following table summarizes our results of operations for the three months ended September 30, 2020 and 2019 (in thousands):

Three Months Ended September 30,

Comparison of the Three Months Ended March 31, 2021 and 2020

The following table summarizes our results of operations for the three months ended March 31, 2021 and 2020 (in thousands):

Three Months Ended March 31,

Grant revenue

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Grant Revenue

Three Months Ended September 30,

Three Months Ended March 31,

BARDA Contract (tebipenem HBr)

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NIAID Award (SPR720)

DoD Agreement (Potentiator Platform)

DoD Agreement (Potentiator product candidates)

Total grant revenue

Grant revenue recognized during the three months ended September 30, 2020 and 2019 consisted of the reimbursement of qualifying expenses incurred in connection with our various government awards.

The decrease in revenue during the three months ended September 30, 2020 was primarily due to decreased funding received under our BARDA contract for tebipenem HBr and net immaterial decreases under our other government awards.

Grant revenue recognized during the three months ended March 31, 2021 and 2020 consisted of the reimbursement of qualifying expenses incurred in connection with our various government awards.

The increase in revenue during the three months ended March 31, 2021 was primarily due to an increase of $5.1 million in qualified expenses incurred under our BARDA contract for tebipenem HBr, an increase of $0.6 million in funding under our DoD agreement relating to SPR206, and net immaterial activity under our other government awards.

Collaboration Revenue

During the three months ended September 30, 2020 and 2019, we recognized less than $0.1 million and $0.2 million of revenue, respectively, related to our agreement with Everest Medicines, consisting of the performance of research and development services.

During the three months ended March 31, 2021, we did not recognize any collaboration revenue, as the aggregate amount of the transaction price related to our agreement with Everest Medicines was fully allocated to satisfied performance obligations in prior periods.

During the three months ended March 31, 2020, we recognized $0.2 million of revenue, related to our agreement with Everest Medicines, consisting of the performance of research and development services.

Research and Development Expenses

Three Months Ended September 30,

Three Months Ended March 31,

Direct research and development expenses by program:

Tebipenem HBr (SPR994)

Potentiator Platform (SPR206 and SPR741)

Potentiator product candidates (SPR206 and SPR741)

Unallocated expenses:

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Total research and development expenses

Direct costs related to our tebipenem HBr program decreased by $2.4 million during the three months ended September 30, 2020 compared to the three months ended September 30, 2019, primarily due to the completion of significant activities in the Phase 3 clinical trial.

We expect to continue to incur direct costs related to tebipenem HBr as we finalize activities in the Phase 3 clinical trial and incur expenses related to a potential NDA filing for tebipenem HBr.

Direct costs related to our SPR720 program increased during the three months ended September 30, 2020 as compared to the three months ended September 30, 2019 , primarily due to increased expenses related to preparation for our Phase 2a clinical trial.

Direct costs related to our tebipenem HBr program decreased by $5.2 million during the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily due to the completion of significant activities in the Phase 3 clinical trial.

We expect to continue to incur direct costs related to tebipenem HBr as we finalize activities in the ongoing clinical trials to support a potential NDA filing for tebipenem HBr.

Direct costs related to our SPR720 program increased by $0.7 million during the three months ended March 31, 2021 as compared to the three months ended March 31, 2020, primarily due to expenses related to our Phase 2a clinical trial.

These expenses were partially offset by a decrease in spending associated with formulation development, manufacturing process and manufacturing of clinical trial material.

Direct costs related to our SPR720 program during the three months ended September 3 0 , 2020 reflect a $0.2 million reduction to expense related to activities funded by Gates MRI , compared to $0.9 million during the three months ended September 30, 2019.

Direct costs related to our Potentiator Platform include costs related to our SPR206 and SPR741 programs.

Direct costs related to our SPR206 program decreased by $0.4 million during the three months ended September 30, 2020, primarily due to higher costs incurred in the prior year related to the Phase 1 trial.

Direct costs related to our SPR741 program were immaterial for both the three months ended September 30, 2020 and 2019.

In early January 2020, we decided to proceed with SPR206 as the lead product candidate within the Potentiator Platform and discontinue development of SPR741.

During 2020 and 2019, research and development expenses conducted by our Australian subsidiary were recorded net of a 43.5% research and development tax incentive for qualified expenses from the Australian government, resulting in a receivable of $1.0 million.

The increase in personnel-related costs included in unallocated expenses of $1.0 million was due to an increase in research and development headcount, as well as a $0.2 million increase in share-based compensation.

The increase in facility-related and other costs was primarily due to the increased costs of supporting a larger research and development staff.

General and Administrative Expenses

Three Months Ended September 30,

Personnel related (including share-based compensation)

Professional and consultant fees

Facility related and other

Total general and administrative expenses

The increase in personnel-related costs of $0.4 million was primarily a result of an increase in headcount in our general and administrative function.

Personnel-related costs for the three months ended September 30, 2020 and 2019 included share-based compensation expense of $0.6 million and $0.6 million, respectively.

The increase in professional and consultant fees of $0.9 million was primarily due to increased commercial operation expenses.

The decrease in facility-related and other costs was primarily due to the higher allocation of costs to research and development due to the increased research and development headcount.

Other Income (Expense), Net

Other income, net was $0.1 million for the three months ended September 30, 2020, compared to $0.3 million for the three months ended September 30, 2019.

The change was primarily due to a larger unrealized foreign currency gain recognized in the third quarter of 2020, as a result of favorable foreign currency fluctuations, offsetting lower interest income earned as a result of lower interest rates.

Comparison of the Nine Months Ended September 30, 2020 and 2019

The following table summarizes our results of operations for the nine months ended September 30, 2020 and 2019 (in thousands):

Nine Months Ended September 30,

Grant revenue

Collaboration revenue

Total revenues

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense):

Interest income

Other income (expense), net

Total other income (expense), net

Grant Revenue

Nine Months Ended September 30,

BARDA Contract (SPR994)

NIAID Contract (SPR206)

NIAID Award (SPR720)

DoD Agreement (Potentiator Platform)

Total revenue

Grant revenue recognized during the nine months ended September 30, 2020 and 2019 consisted of the reimbursement of qualifying expenses incurred in connection with our various government awards.

The decrease in revenue during the nine months ended September 30, 2020 was primarily due to decreased funding received under our BARDA and our other government awards.

Collaboration Revenue

During the nine months ended September 30, 2020 and 2019, we recognized $0.3 and $4.0 million of revenue, respectively, related to our agreement with Everest Medicines.

The decrease in revenue is mainly due to decreased research and development services performed under the collaboration agreement.

Research and Development Expenses

Nine Months Ended September 30,

Direct research and development expenses by program:

Tebipenem HBr (SPR994)

Potentiator Platform (SPR206 and SPR741)

Unallocated expenses:

Personnel related (including share-based compensation)

Facility related and other

Total research and development expenses

Direct costs related to our tebipenem HBr program increased during the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019 , primarily due to costs related to significant activities performed in the Phase 3 clinical trial, as well as expenses related to formulation development, manufacturing process and manufacturing of clinical trial material We expect to continue to incur direct costs related to tebipenem HBr as we finalize activities in the Phase 3 clinical trial and incur expenses related to a potential NDA filing for tebipenem HBr.

Direct costs related to our SPR720 program increased during the nine months ended September 30, 2020 as compared to the nine months ended September 30, 2019, primarily due to increased expenses related to preparation for our Phase 2a clinical trial and increased costs related to the formulation development, manufacturing process and manufacturing of clinical trial material.

Direct costs related to our SPR720 program during the nine months ended September 30, 2020 reflect a $0.7 million reduction to expense related to activities funded by Gates MRI, compared to $0.9 million during the nine months ended September 30, 2019.

Direct costs related to our Potentiator Platform include costs related to our SPR206 and SPR741 programs.

Direct costs related to our SPR206 program decreased by $1.4 million during the nine months ended September 30, 2020, primarily due to higher costs incurred in the prior year related to the Phase 1 trial.

Direct costs related to our SPR741 program were immaterial for both the nine months ended September 30, 2020 and 2019.

In early January 2020, we decided to proceed with SPR206 as the lead product candidate within the Potentiator Platform and discontinue development of SPR741.

The increase of $2.6 million in personnel-related costs included in unallocated expenses was due to an increase in research and development headcount, as well as a $0.4 million increase in share-based compensation.

On February 5, 2021, we announced that the FDA informed us that a clinical hold had been placed on our Phase 2a clinical trial of SPR720, which is further described elsewhere in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Quarterly Report on Form 10-Q under the heading “Recent Developments – Update on Phase 2a Clinical Trial.” Direct costs related to our SPR720 program during the three months ended March 31, 2021 reflect a $0.6 million reduction to expense related to activities funded by Gates MRI, compared to $0.2 million during the three months ended March 31, 2020.

Direct costs related to our Potentiator product candidates during the three months ended March 31, 2021 includes costs related to our SPR206 program.

Direct costs related to our SPR206 program increased by $0.7 million during the three months ended March 31, 2021, primarily due to higher preclinical costs incurred and from clinical costs for the planned Phase 1 BAL and renal impairment trials .

In early January 2020, we decided to proceed with SPR206 as the lead Potentiator product candidate and discontinue development of SPR741.

Direct costs related to our SPR741 program were immaterial for both the three months ended March 31, 2021 and 2020.

During 2021 and 2020, research and development expenses incurred by our Australian subsidiary were recorded net of a 43.5% research and development tax incentive for qualified expenses from the Australian government, resulting in a receivable of $0.4 million as of March 31, 2021.

The increase in personnel-related costs of $1.5 million was primarily a result of an increase in research and development headcount.

Personnel-related costs for the three months ended March 31, 2021 and 2020 included share-based compensation expense of $0.8 million and $0.5 million, respectively.

The increase in facility-related and other costs was primarily due to the increased costs of supporting a larger research and development staff.

General and Administrative Expenses

Nine Months Ended September 30,

Three Months Ended March 31,

Personnel related (including share-based compensation)

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Total general and administrative expenses

The increase in personnel-related costs of $1.0 million was primarily a result of an increase in headcount in our general and administrative function.

Personnel-related costs for the nine months ended September 30, 2020 and 2019 included share-based compensation expense of $1.9 million and $1.7 million, respectively.

The increase in professional and consultant fees of $1.4 million was primarily related to increased commercial operations expenses, as well as increased IT, HR and Finance contractor and consulting expenses related to supporting the growth in our business.

The decrease in facility-related and other costs was primarily due to the higher allocation of costs to research and development due to the increased research and development headcount.

The increase in personnel-related costs of $2.1 million was primarily a result of an increase in headcount in our general and administrative functions.

Personnel-related costs for the three months ended March 31, 2021 and 2020 included share-based compensation expense of $1.2 million and $0.6 million, respectively.

The increase in professional and consultant fees of $1.8 million was primarily due to increased commercial operation expenses to support the potential commercialization of tebipenem HBr.

The increase in facility-related and other costs was primarily due to the increased costs of supporting a larger general and administrative staff.

Other Income (Expense), Net

Other income, net was $0.6 million for the nine months ended September 30, 2020, compared to $1.4 million for the nine months ended September 30, 2019.

Other income, net in the nine months ended September 30, 2020 was primarily comprised of unrealized foreign currency gains, offsetting decreased interest income due to falling interest rates.

In comparison, other income, net in the nine months ended September 30, 2019 was primarily comprised of interest earned on invested cash balances and marketable securities, offset by unrealized foreign currency losses.

Other income, net was less than $(0.1) million for the three months ended March 31, 2021, compared to $(0.4) million for the three months ended March 31, 2020.

The changes quarter over quarter were primarily due to fluctuations in unrealized foreign currency gains, offset by interest income.

Liquidity and Capital Resources

Since our inception, we have incurred significant operating losses.

We have generated limited revenue to date from funding arrangements with the DoD, NIAID, CARB-X and BARDA.

We have not yet commercialized any of our product candidates and we do not expect to generate revenue from sales of any product candidates for several years, if at all.

To date, we have funded our operations with proceeds from the sales of preferred units and bridge units, payments received under license and collaboration agreements and funding from government contracts, with proceeds from the IPO of our common stock, in July 2018 with an underwritten public offering of our common and preferred stock, and subsequent sales of our common stock and preferred stock.

As of September 30, 2020, we had cash, cash equivalents and marketable securities of $127.2 million.

We have recognized limited revenue to date from funding arrangements with the DoD, NIAID, CARB-X and BARDA and our license agreement with Everest.

We have not yet commercialized any of our product candidates and we do not expect to generate revenue from sales of any product candidates for a few years, if at all.

As of March 31, 2021, we had cash, cash equivalents and marketable securities of $115.7 million.

On September 15, 2020, we completed an underwritten public offering of an aggregate of 4,785,000 shares of our common stock, and 3,215,000 shares of our Series D Preferred Stock.

The price to the public in the offering was $10.00 per share with respect to the c ommon s tock and the Series D Preferred Stock.

The price to the public in the offering was $10.00 per share with respect to the common stock and the Series D Preferred Stock.

In addition, under the terms of the Underwriting Agreement, we granted the underwriters an option, exercisable for 30 days, to purchase up to 1,200,000 additional shares of common stock.

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Shares of Series D Preferred Stock will generally have no voting rights, except as required by law and except that the consent of holders of a majority of the then outstanding Series D Preferred Stock will be required to amend the terms of the Series D Preferred Stock.

As such, we have classified the Series D Convertible Preferred Stock within permanent equity in its consolidated balance sheet.

As such, we have classified the Series D Preferred Stock within permanent equity in its consolidated balance sheet.

The offering closed on September 15, 2020 with an aggregate public offering price of $80.0 million.

Aggregate net proceeds from the offering were $74.7 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

In addition, pursuant to the Underwriting Agreement, we granted the underwriters an option, exercisable for 30 days, to purchase up to 1,200,000 additional shares of our common stock.

On February 11, 2020, the Company announced a rights offering pursuant to which it distributed to holders of its common stock and Series A Preferred Stock and Series B Preferred Stock, at no charge, non-transferable subscription rights to purchase shares of our common stock and Series C Convertible Preferred Stock, or Series C Preferred Stock, with an aggregate offering value of $30.0 million.

In addition, pursuant to the Underwriting Agreement, on October 1, 2020, we issued and sold 1,200,000 shares of common stock at the price of $10.00 per share pursuant to the underwriters’ exercise of their option to purchase additional shares of common stock, resulting in additional net proceeds of approximately $11.2 million after deducting underwriting discounts and commissions.

On February 11, 2020, the Company announced a rights offering pursuant to which it distributed to holders of its common stock and Series A Preferred Stock and Series B Preferred Stock, at no charge, non-transferable subscription rights to purchase shares of our common stock and Series C Preferred Stock, with an aggregate offering value of $30.0 million.

For each share of common stock (including shares of common stock issuable upon conversion of the Company’s outstanding shares of Series A Preferred Stock and Series B Preferred Stock) owned by holders of record as of 5:00 p.m., New York time, on February 10, 2020, such holders received 0.152 rights to purchase shares of our common stock (subject to the aggregate offering threshold and certain ownership limitations).

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At the closing of the rights offering on March 5, 2020, a total of 1,046,249 shares of our common stock and 2,287 shares of Series C Preferred Stock were issued for aggregate gross proceeds of $30.0 million.

Issue costs related to the offering were $0.5 million.

Issuance costs related to the offering were $0.5 million.

On December 3, 2018, we filed a universal shelf registration statement on Form S-3 (Registration No.

333-228661) with the SEC, which was declared effective on December 11, 2018, and pursuant to which we registered for sale up to $200.0 million of any combination of our common stock, preferred stock, debt securities, warrants, rights and/or units from time to time and at prices and on terms that we may determine, including up to $50.0 million of our common stock available for issuance pursuant to an at-the-market offering program sales agreement that we entered into with Cantor Fitzgerald & Co, or Cantor.

Under the sales agreement, Cantor may sell shares of our common stock by any method permitted by law deemed to be an “at the market,” or ATM, offering as defined in Rule 415 of the Securities Act, subject to the terms of the sales agreement.

The prospectus underlying the ATM offering program was terminated on September 9, 2020 in connection with our underwritten public offering that was completed in September 2020.

At such time, we had raised approximately $15.4 million in sales of our common stock under the ATM offering program, prior to deducting sales commissions, and had remaining available capacity of approximately $34.6 million.

During the nine months ended September 30, 2020, we sold 786,447 shares of our common stock under the ATM agreement at an average price of approximately $12.02 per share for aggregate gross proceeds of approximately $9.4 million prior to deducting sales commissions.

Under the sales agreement, Cantor was permitted to sell shares of our common stock by any method permitted by law deemed to be an “at the market” offering as defined in Rule 415 of the Securities Act, subject to the terms of the sales agreement.

The prospectus underlying the “at the market” offering program was terminated on September 9, 2020 in connection with our underwritten public offering that was completed in September 2020.

At such time, we had raised approximately $15.4 million in sales of our common stock under the “at the market” offering program, prior to deducting sales commissions, and had remaining available capacity of approximately $34.6 million.

On November 13, 2020, we reinstated the “at-the-market” offering program with a capacity of up to $34.0 million by filing an updated prospectus.

On March 11, 2021, we entered into a new sales agreement with Cantor and filed a new universal shelf registration statement on Form S-3 (Registration No.

333-254170), and pursuant to which we registered for sale up to $300.0 million of any combination of our common stock, preferred stock, debt securities, warrants, rights and/or units from time to time and at prices and on terms that we may determine, including up to $75.0 million of our common stock available for issuance pursuant to the new “at-the-market” offering program sales agreement that we entered into with Cantor.

Under the new sales agreement, Cantor may sell shares of our common stock by any method permitted by law deemed to be an “at the market” offering as defined in Rule 415 of the Securities Act, subject to the terms of the new sales agreement.

Our universal shelf registration statement on Form S-3 (Registration No.

333-254170) became effective on March 29, 2021 and our prior sales agreement with Cantor terminated automatically at such time.

During the three months ended March 31, 2021, we sold 257,185 shares of our common stock under the prior “at the market” agreement at an average price of approximately $17.05 per share for aggregate gross proceeds of approximately $4.4 million prior to deducting sales commissions.

The COVID-19 pandemic has resulted in ongoing volatility in financial markets.

If our access to capital is restricted or associated borrowing costs increase as a result of developments in financial markets relating to the COVID-19 pandemic, our operations and financial condition could be adversely impacted.

The following table summarizes our sources and uses of cash for the nine months ended September 30, 2020 and 2019:

Nine Months Ended September 30,

The following table summarizes our sources and uses of cash for the three months ended March 31, 2021 and 2020:

Three Months Ended March 31,

Cash used in operating activities

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Operating Activities

Net cash used in operating activities for the nine months ended September 30, 2020 was $69.5 million, primarily resulting from our net loss of $59.7 million, adjusted for net non-cash items of $4.2 million (primarily stock-based compensation, depreciation, amortization, and unrealized foreign currency transaction gains).

Net cash provided by changes in our operating assets and liabilities was $(14.0) million and consisted primarily of a $1.9 million increase in other assets, a $(1.7) million increase in accounts payable, a $2.5 million increase in prepaid expenses and other current assets and a decrease of $8.3 million in accrued expenses.

Net cash used in operating activities for the nine months ended September 30, 2019 was $32.7 million, primarily resulting from our net loss of $35.9 million, adjusted for net non-cash items of $3.2 million (primarily stock-based compensation and depreciation and amortization expense).

Net cash provided by changes in our operating assets and liabilities was $0.1 million and consisted primarily of an increase of $5.0 million in receivables related to the Australian research and development tax initiative and our receivables under our government awards, and a $1.0 million decrease in accounts payable.

These uses of cash were offset by a $3.8 million decrease in prepaid expenses and other current assets and an increase of $2.7 million in accrued expenses.

Changes in accounts payable, accrued expenses and other current liabilities, and prepaid expenses and other current assets in all periods were generally due to growth in our business, the advancement of our development programs and the timing of vendor invoicing and payments.

Net cash used in operating activities for the three months ended March 31, 2021 was $15.5 million, primarily resulting from our net loss of $19.4 million, adjusted for net non-cash items of $2.4 million (primarily stock-based compensation, depreciation and amortization).

Net cash provided by changes in our operating assets and liabilities was $1.5 million and consisted primarily of a $2.7 million increase in accounts payable, a $2.4 million net increase in receivables, a $0.9 million decrease in prepaid expenses and other current assets and an increase of $0.6 million in accrued expenses.

Net cash used in operating activities for the three months ended March 31, 2020 was $23.3 million, primarily resulting from our net loss of $23.3 million, adjusted for net non-cash items of $1.8 million (primarily stock-based compensation and unrealized foreign currency transaction loss).

Net cash provided by changes in our operating assets and liabilities was $(1.9) million and consisted primarily of a decrease of $4.8 million in receivables and a $4.8 million increase in accounts payable.

These increases in cash were offset by a $0.9 million increase in prepaid expenses and other current assets and a decrease of $9.3 million in accrued expenses.

Changes in accounts payable, accrued expenses and other current liabilities, and prepaid expenses and other current assets in all periods were generally due to the advancement of our development programs and the timing of vendor invoicing and payments.

Investing Activities

Cash provided by investing activities during the nine months ended September 30, 2020 was $50.2 million primarily related to the maturities of marketable securities of $54.4 million, offset by purchases of marketable securities of $4.0 million.

Cash provided by investing activities during the nine months ended September 30, 2019 was $33.6 million primarily related to the net maturities of marketable securities.

Cash provided by investing activities during the three months ended March 31, 2021 was $3.0 million primarily related to the maturities of marketable securities of $6.0 million, offset by purchases of marketable securities of $3.0 million.

Cash provided by investing activities during the three months ended March 31, 2020 was $27.8 million primarily related to the maturities of marketable securities of $31.8 million offset by purchases of marketable securities of $4.0 million.

Financing Activities

Cash provided by financing activities during the nine months ended September 30, 2020 was $114.8 million, consisting primarily of proceeds of $105.2 million from the sale of common stock, Series C Preferred Stock and Series D Preferred Stock in our rights offering and underwritten public offering, proceeds of $9.2 million from the sale of common stock under our ATM offering program sales agreement and proceeds of $1.0 million from the exercise of employee stock options, offset by the payment of offering expenses of $0.6 million.

Cash provided by financing activities during the nine months ended September 30, 2019 was $10.5 million, consisting primarily of proceeds of $5.3 million from the sale of common stock under our ATM offering program sales agreement, proceeds of $5.0 million from the sale of common stock to Novo, offset by offering expenses of $0.2 million, as well as $0.4 million of proceeds from the exercise of employee stock options.

Cash provided by financing activities during the three months ended March 31, 2021 was $4.3 million, and consisted primarily of $4.3 million net sales of common stock under our “at-the-market” offering program sales agreement and proceeds of $0.1 million from the exercise of employee stock options, offset by the payment of offering expenses of less than $0.1 million.

Cash provided by financing activities during the three months ended March 31, 2020 was $30.2 million, and consisted primarily of proceeds of $30.0 million from the sale of common stock and Preferred Series C shares in our rights offering and proceeds of $0.5 million from the exercise of employee stock options, offset by offering expenses of $0.4 million.

Funding Requirements

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the extent to which we in-license or acquire other products and technologies.

As of September 30, 2020, we had cash, cash equivalents and marketable securities of $127.2 million.

As of March 31, 2021, we had cash, cash equivalents and marketable securities of $115.7 million.

In accordance with Accounting Standards Update, or ASU, 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40) , we are required to evaluate whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern from the issuance date of our financial statements.

Based on our current plans, we believe that our existing cash, cash equivalents and marketable securities, together with the committed funding from our existing BARDA contract and other non-dilutive funding commitments, will enable us to fund our operating expenses and capital expenditure requirements into the second quarter of 2022, including through the submission of the NDA for tebipenem HBr.

This timeline is subject to uncertainty as to the timing of future expenditures.

If we are not able to secure adequate additional funding, we plan to make reductions in spending.

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As a result, management has concluded that substantial doubt exists about our ability to continue as a going concern.

Our consolidated financial statements as of December 31, 2019 were prepared under the assumption that we will continue as a going concern for the next twelve months.

Our consolidated financial statements as of December 31, 20 20 were prepared under the assumption that we will not continue as a going concern for the next twelve months.

As a result, the opinion from our independent registered public accounting firm with respect to our annual financial statements contains an explanatory paragraph about such substantial doubt about our ability to continue as a going concern.

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Contractual Obligations and Commitments

During the three months ended September 30, 2020, there have been no material changes to our contractual obligations and commitments outside the ordinary course of business from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations and Commitments” in our Annual Report on Form 10-K for the year ended December 31, 2019.

During the three months ended March 31, 2021, there have been no material changes to our contractual obligations and commitments outside the ordinary course of business from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations and Commitments” in our Annual Report on Form 10-K for the year ended December 31, 2020.

Off-Balance Sheet Arrangements

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis