What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2023-03-08 compared with 2022-03-09 · 84 added, 98 removed, 285 unchanged (39% of the section changed)

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Prior to that time, there was no public market for our common stock.

As of March 4, 2022, there were over 100 holders of record of our common stock.

As of February 28, 2023, there were over 100 holders of record of our common stock.

This number does not include beneficial owners whose shares are held by nominees in street name.

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acted as joint book-running managers for the offering.

There has been no material change in the planned use of proceeds from our initial public offering from that described in the Prospectus.

There has been no material change in the planned use of proceeds from our initial public offering as described in our final prospectus filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC.

Management’s Discussion and Analys is of Financial Condition and Results of Operations.

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Our approach is based on the central premise that we can learn from patients who are winning their fight against cancer in order to treat those who are not.

Using one of our proprietary platform technologies, TargetScan, we analyze the T cells of cancer patients with exceptional responses to immunotherapy to discover how the immune system naturally recognizes and eliminates tumor cells in these patients.

This allows us to precisely identify the targets of T cell receptors, or TCRs, that are driving these exceptional responses.

We are continuing to build our ImmunoBank, a repository of therapeutic T cell receptors, or TCRs, that recognize diverse targets and are associated with multiple human leukocyte antigen, or HLA, types to provide customized multiplexed TCR-T therapy candidates for patients with a variety of solid tumors.

We are building our ImmunoBank using our proprietary platform technologies.

Using TargetScan, we analyze the T cells of cancer patients with exceptional responses to immunotherapy to discover how the immune system naturally recognizes and eliminates tumor cells in these patients.

This allows us to precisely identify the targets of TCRs that are driving these exceptional responses.

We aim to use these anti-cancer TCRs to treat patients with cancer by genetically engineering their own T cells to recognize and eliminate their cancer.

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We reduce the risk and enhance the safety profile of these therapeutic TCRs by screening them using SafetyScan to identify potential off-targets of a TCR and eliminate those TCR candidates that cross-react with proteins expressed at high levels in critical organs.

We believe this three-pronged approach will enable us to discover and develop a wide array of potential treatment options for patients with cancer.

We are advancing a robust pipeline of TCR-T therapy candidates for the treatment of patients with hematologic and solid tumor malignancies.

Our lead liquid tumor product candidates, TSC-100 and TSC-101, are in development for the treatment of patients with hematologic malignancies to eliminate residual leukemia and prevent relapse following hematopoietic stem cell transplantation, or HCT.

We are advancing a robust pipeline of TCR-T therapy candidates for the treatment of patients with hematologic malignancies and solid tumors.

Our lead product candidates, TSC-100 and TSC-101, are in development for the treatment of patients with hematologic malignancies to eliminate residual leukemia and prevent relapse following hematopoietic cell transplantation, or HCT.

TSC-100 and TSC-101 target HA-1 and HA-2 antigens, respectively, which are well-recognized TCR targets that were identified in patients with exceptional responses to HCT-associated immunotherapy.

We submitted Investigational New Drug, or IND, applications with the U.S.

Food and Drug Administration, or FDA, for each of TSC-100 and TSC-101 in the fourth quarter of 2021.

The FDA has cleared the IND for TSC-100 while the IND for TSC-101 remains on clinical hold pending additional assessment of the potential for off-tumor reactivity in certain tissues.

We plan to initiate the Phase 1 clinical study of TSC-100 in the first half of 2022.

Pending clearance of the IND for TSC-101, we will initiate the TSC-101 arm of the trial.

We have initiated a multi-arm Phase 1 clinical study of TSC-100 and TSC-101 with several clinical sites activated, with planned additional sites to be added in 2023.

In addition, we are developing multiple TCR-T therapy candidates for the treatment of solid tumors.

One of the key goals for our solid tumor program is to develop what we refer to as multiplexed TCR-T therapy.

We are designing these multiplexed therapies to be a combination of up to three highly active TCRs that are customized for each patient and selected from our bank of therapeutic TCRs, which we refer to as ImmunoBank.

We plan to populate the ImmunoBank with TCRs for multiple targets as well as multiple HLA types for each target, thus helping us to overcome the key solid tumor resistance mechanisms of target loss as well as HLA loss.

We are currently advancing five solid tumor programs, with TSC-200 in IND-enabling activities, TSC-204 advancing to IND-enabling studies, and TSC-201, TSC-202, and TSC-203, in lead optimization, and expect to submit two IND applications for our solid tumor TCR-T therapy candidates in the second half of 2022, with additional IND applications expected to be submitted in 2023.

We plan to populate the ImmunoBank with TCRs for multiple targets as well as multiple HLA types for each target, thus helping us to overcome key solid tumor resistance mechanisms of target loss and HLA loss.

We are currently advancing six solid tumor programs:

TSC-204, entering Phase 1 development;

TSC-200 and TSC-203, in IND-enabling activities;

TSC-201, in lead optimization;

and TSC-202 and TSC-205, in discovery.

In December 2022, we submitted a primary investigational new drug, or IND, application for T-Plex, enabling customized mixtures of TCR-Ts to be administered to patients based on cancer-targets and associated common HLA types expressed in their tumors, as well as secondary IND applications for two initial TCR-T product candidates:

TSC-204-A0201 and TSC-204-C0702.

The FDA has cleared our IND applications for T-Plex, TSC-204-A0201, and TSC-204-C0702, allowing us to initiate study start-up activities.

We plan to further expand the ImmunoBank by filing INDs for additional TCRs throughout 2023.

Since our inception in 2018, we have devoted our efforts to raising capital, obtaining financing, filing, prosecuting and maintaining intellectual property rights, organizing and staffing our company and incurring research and development costs related to the identification of novel targets for TCRs and development of TCR-T therapies to target and eliminate cancer cells.

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We received $89.6 million in net proceeds (after deducting underwriting discounts, commissions and offering costs), from our IPO.

Under the terms of our Collaboration and License Agreement with Novartis, we received a $20.0 million upfront payment and agreed to invest an estimated $10.0 million in research costs that will be reimbursed by Novartis over the research period of the agreement.

conclude in March 2023.

Finally, we received $30.0 million in gross proceeds through the issuance of a debt facility to K2HV under the Loan Agreement.

Impact of COVID-19

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To date, our revenue has been derived from our one collaboration and two licensing agreements.

We have not generated any revenue from the sale of therapies to date, nor do we expect to originate revenues therefrom in the near future, if at all.

We have not generated any revenue from the sale of therapies to date, nor do we expect to generate revenues therefrom in the near future, if at all.

If our development efforts for our product candidates are successful and result in regulatory approval or if we enter into additional license or collaboration agreements with third parties, we may generate additional revenue in the future from sales of our therapies, payments from license or collaboration agreements that we may enter into with third parties, or any combination thereof.

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In March 2020, we entered into a Collaboration and License Agreement, or the Novartis Agreement, with Novartis Institutes for BioMedical Research, Inc., or Novartis, to collaborate on their research efforts to discover and develop novel TCR-T therapies.

Under the Novartis Agreement, we will identify and characterize TCRs in accordance with a research plan, transfer data arising from the research plan, and Novartis will have the option to license and develop TCRs for up to three novel targets identified in performance of the collaboration during the collaboration period of the Novartis Agreement.

Novartis will also have rights of first negotiation for certain additional targets and TCRs identified in performance of the collaboration during a defined period.

Under the Novartis Agreement, we will identify and characterize TCRs in accordance with a research plan, and transfer data arising from the research plan.

We are free to develop TCRs against targets not licensed by Novartis.

The collaboration includes an upfront fee and research funding together totaling $30.0 million.

We have the potential to receive up to $10.0 million per target, of which Novartis may select up to three, and potential milestone payments, contingent on clinical, regulatory and sales success.

In addition to the milestones, Novartis will pay us royalties equal to a percentage in the mid-single-digits to low-teens on net sales for each therapy.

The collaboration included an upfront fee and research funding together totaling $30.0 million.

The Novartis Agreement is within the scope of ASC 606 under which we have identified a single performance obligation consisting of the research services, data reporting and participation in a joint steering committee.

During the year ended December 31, 2022, we recognized $13.5 million of revenue associated with the Novartis Agreement, which includes recognition of the upfront payment and research funding.

We expect to recognize the remaining arrangement consideration over the expected research term, which is not expected to exceed 3 years from the execution of the agreement.

We expect to recognize the remaining arrangement consideration over the expected research term, which is anticipated to conclude in March 2023.

See Note 8, Collaboration and License Agreements, to our audit financial statements included elsewhere in this Annual Report.

Operating Expenses

Research and Development Expenses

Research and development expenses consist primarily of costs incurred in connection with our research activities, including our therapeutic discovery efforts, preclinical trials and the development of our proprietary platform technologies and product candidates.

Research and development expenses consist primarily of costs incurred in connection with our research activities, including our therapeutic discovery efforts, preclinical and clinical trials, and the development of our proprietary platform technologies and product candidates.

We expense research and development costs as incurred, which include:

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

We have incurred significantly increased accounting, audit, legal, regulatory, compliance and director and officer insurance costs as well as investor and public relations expenses associated with operating as a public company and anticipate this expenses to increase in 2022 as we complete a full year as a public company.

We have incurred significantly increased accounting, audit, legal, regulatory, compliance and director and officer insurance costs as well as investor and public relations expenses associated with operating as a public company and anticipate these expenses to increase in 2023 as we continue to expand the business.

In addition, if we obtain regulatory approval for a product candidate and do not enter into a third-party commercialization collaboration, we expect to incur significant expenses related to building a sales and marketing team to support sales, marketing and distribution activities.

As of December 31, 2022, the unrecognized compensation cost related to outstanding options, inclusive of research and development and general and administrative, was $13.0 million, which is expected to be recognized over a weighted-average period of 2.76 years.

Other income consists primarily of interest earned on our cash and cash equivalents balances held in financial institutions.

Interest Expense

Interest expense consists of interest associated with our outstanding debt obligation, including the amortization of debt issuance costs.

Since our inception, we have not recorded any U.S.

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As of December 31, 2022, we had federal and state net operating loss carryforwards of $86.2 million and $83.5 million, respectively, which may be used to offset future taxable income, if any.

These amounts expire at various dates through 2041.

The state amounts expire at various dates through 2042.

The federal net operating losses generated in and after 2018 can be carried forward indefinitely.

As of December 31, 2021, we had federal and state tax credit carryforwards of $3.5 million and $2.3 million, respectively.

These amounts expire at various dates through 2036.

As of December 31, 2022, we had federal and state tax credit

carryforwards of $6.9 million and $4.2 million, which expire at various dates through 2042 and 2037, respectively.

Due to the degree of uncertainty related to the ultimate use of the deferred tax assets, we have fully reserved these tax benefits, as the determination of the realization of the deferred tax benefits was not determined to be more likely than not.

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Other income:

Interest income

We had $10.1 million revenue for the year ended December 31, 2021 and $1.1 million revenue for the year ended December 31, 2020.

The increase was related to the recognition of revenue associated with the Novartis Agreement, which has an expected term that ends no later than March 2023.

The revenue generated from the Novartis Agreement has increased for the year ended December 31, 2021 as compared to December 31, 2020 as a result of the timing of research activities, which commenced in September 2020.

A s of December 31, 2021, the Company had current and long-term deferred revenue of $11.4 million and $1.5 million, respectively.

Revenue is anticipated to slightly increase through 2022.

Interest and other income, net

Interest expense

Total other income

We had $13.5 million revenue for the year ended December 31, 2022 and $10.1 million of revenue for the year ended December 31, 2021.

The revenue generated from the Novartis Agreement has increased for year ended December 31, 2022 as compared to December 31, 2021 as a result of the timing of research activities, which includes the identification and characterization of TCRs in accordance with a research plan and transfer of data arising from the research plan.

As of December 31, 2022, the Company had current deferred revenue of $3.9 million, which is expected to be recognized within the first quarter of 2023, prior to the conclusion of the agreement which is anticipated in March 2023.

Research and Development Expenses

The following table summarizes our research and development expenses for the years ended December 31, 2022 and 2021 (in thousands):

Preclinical studies

Legal and professional fees

Personnel expenses (including stock-based compensation)

Laboratory supplies, research materials and studies

Facility-related and other

Clinical studies

Legal and professional fees

Total research and development expenses

The increase in research and development expenses was primarily attributable to a $16.0 million increase in laboratory supplies, research material, and preclinical studies in order to support the IND submissions for TSC-100 and TSC-101.

There was a $5.3 million increase in personnel expenses, including an increase of $0.6 million related to stock-based compensation expense, due to an increase in headcount from 45 to 77.

Finally, there was a $3.1 million increase in facility-related expenses and other expenses due to the expansion of leased facilities as well as the increased depreciation related to purchases of laboratory equipment.

The increase in research and development expenses was primarily attributable to a $7.0 million increase in personnel expenses, including an increase of $0.7 million related to stock-based compensation expense.

This is driven by expansion of the in-house chemistry, manufacturing, and controls (“CMC”), clinical, and preclinical departments.

There was a $4.4 million increase in facility-related expenses due to the expansion of leased facilities, including commencement of a new lease in 2022, as well as the increased depreciation related to purchases of laboratory equipment.

These expansionary activities are driven by the expansion of facilities and equipment for in-house CMC as clinical and preclinical activities ramp up.

There was a $1.9 million increase in clinical studies expense related to Phase 1 study start-up activities for TSC-100 and TSC-101.

Finally, there was a $1.0 million increase in expense related to laboratory supplies, research material, and preclinical studies in order to support pipeline development and solid tumor IND-enabling activities.

General and Administrative Expenses

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Legal and professional fees

Other expenses

Facility-related and other

Total general and administrative expenses

The increase in general and administrative expense was primarily due to a $4.3 million increase in personnel expenses, which includes an increase of $1.4 million related to stock-based compensation expense due to an increase in headcount from 12 to 21.

In addition, there was an increase of $2.8 million in other expenses primarily related to increased costs due to public company D&O insurance, depreciation expense, recruiting, and market research.

The increase in general and administrative expenses was primarily due to a $4.5 million increase in personnel expenses, which includes an increase of $1.3 million related to stock-based compensation expense.

In addition, there was an increase of $2.0 million primarily related to increased costs for insurance and other administrative expenses, depreciation expense, and facilities-related costs.

Liquidity and Capital Resources

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Additionally, Novartis is obligated to reimburse us for costs incurred to perform the research and development activities of up to $10 million.

To date, we have funded our operations primarily with proceeds from sales of equity securities, most recently, with proceeds from the sale of common stock in our IPO in July 2021.

To date, we have funded our operations primarily with proceeds from sales of equity securities, proceeds from the sale of common stock in our IPO in July 2021, and through the issuance of a debt security in September 2022.

As of December 31, 2022, we had $29.3 million of outstanding debt under the Loan Agreement, which is subject to interest only payments until September 2024, which can be extended to September 2025 upon achievement of certain financial and clinical milestones, following which the term loans will amortize in equal monthly installments until the September 1, 2026 maturity.

See “—Loan Agreement.”

As of December 31, 2022, we had cash and cash equivalents of $120.0 million.

This agreement requires the company to maintain unrestricted cash and cash equivalents in an amount equal to or greater 120% of the outstanding borrowings.

In addition, we must maintain liquidity greater than the average monthly consolidated change in cash and cash equivalents for the consecutive three-month period ended as of any date of determination, multiplied by 5.0.

Funding requirements

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance our research programs into preclinical and clinical development.

In addition, we expect to continue to incur additional costs associated with operating as a public company.

The timing and amount of our operating expenditures will depend largely on:

the identification of additional research programs and product candidates;

the scope, progress, costs and results of preclinical and clinical development of any product candidates we may develop;

the scope, progress, results and costs of research and development for our current and future product candidates, including our current and planned clinical trials, and ongoing preclinical development for our current and future product candidates;

the costs, timing and outcome of regulatory review of any product candidates we may develop;

our decision to initiate a clinical trial, not to initiate a clinical trial or to terminate a clinical trial;

our decision to build manufacturing capabilities;

our decision to develop and expand our manufacturing capabilities;

our decision to invest in facilities to enable growth;

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the costs of continuing to operate as a public company.

We believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into 2024.

We believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into the second quarter of 2024.

We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.

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We may encounter unforeseen expenses, difficulties, complications, delays and other currently unknown factors that could adversely affect our business.

Moreover, as a public company, we will incur significant legal, accounting and other expenses that we were not required to incur as a private company.

In addition, the Sarbanes-Oxley Act of 2002, as well as rules adopted by the SEC and Nasdaq, requires public companies to implement specified corporate governance practices that are currently not applicable to us as a private company.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, we will first be required to furnish a report by our management on our internal control over financial reporting for the year ending December 31, 2022.

However, while we remain an emerging growth company and a smaller reporting company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.

To achieve compliance with Section 404 within the prescribed period, we will be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging.

In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting.

We expect these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly.

Moreover, as a public company, we incur significant legal, accounting and other expenses that we were not required to incur as a private company.

We furnished the first report by our management on our internal control over financial reporting for this year ending December 31, 2022 in this Annual Report, as required by Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404.

However, while we remain an emerging growth company and a smaller reporting company, we are not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.

These rules and regulations have increased and will continue to increase our legal and financial compliance costs and will make some activities more time-consuming and costly and our business continues to evolve.

We will require additional capital to develop our product candidates and fund our operations into the foreseeable future.

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If we raise additional funds by issuing equity securities, our stockholders may experience dilution.

Any future debt financing into which we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments or engage in certain merger, consolidation or asset sale transactions.

Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders.

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We may also be required to sell or license our rights to product candidates in certain territories or indications that we would otherwise prefer to develop and commercialize ourselves.

If we are required to enter into collaborations and other arrangements to address our liquidity needs, we may have to give up certain rights that limit our ability to develop and commercialize our product candidates or may have other terms that are not favorable to us or our stockholders, which could materially and adversely affect our business and financial prospects.

See Part 2, Item 1A.

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our net loss of $66.2 million;

an increase in prepaid and other current assets of $2.6 million, and;

a decrease in deferred revenue of $6.5 million

a decrease in deferred revenue of $9.0 million, due to recognition of revenue related to the Novartis collaboration, and;

an increase in right-of-use assets and lease liabilities, net of $2.0 million, due to the recognition of the new lease upon commencement, offset by scheduled lease expense.

These were partially offset by:

non-cash charges of $5.8 million related to depreciation expense and stock-based compensation, and;

an increase in accrued expenses and other current liabilities of $3.2 million.

non-cash charges of $9.9 million related to depreciation expense, stock-based compensation, and non-cash interest expense related to note payable;

an increase in accrued expenses of $0.7 million, and;

an increase in accounts payable of $0.5 million.

During the year ended December 31, 2021, net cash used in operating activities of $48.7 million was primarily driven by:

our net loss of $48.6 million, and;

an increase in prepaid expenses and other current assets of $1.2 million

an increase in prepaid and other current assets of $2.6 million, and;

a decrease in deferred revenue of $6.5 million, due to recognition of revenue related to the Novartis collaboration.

These were partially offset by:

non-cash charges of $1.7 million related to depreciation expense and stock-based compensation;

an increase in deferred revenue of $19.4 million, due the receipt of upfront payments related to the Novartis Collaboration;

an increase in accrued expenses of $1.5 million, and;

an increase in accounts payable and other current liabilities of $1.1 million

non-cash charges of $5.8 million related to depreciation expense and stock-based compensation, and;

an increase in accrued expenses and other current liabilities of $3.2 million.

Investing Activities

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Financing Activities

During the year ended December 31, 2022, net cash provided by financing activities was $29.4 million, consisting primarily of net proceeds from the issuance of convertible debt of $29.4 million under the Loan Agreement with K2HV.

During the year ended December 31, 2021, net cash provided by financing activities was $189.7 million, consisting primarily of net proceeds of $99.7 million from our issuance of convertible preferred stock, $89.6 million from our IPO, and $0.3 million in net proceeds from the exercise of common stock options.

During the year ended December 31, 2020, net cash provided by financing activities was $0.3 million, consisting primarily of net proceeds from the exercise of common stock options.

Contractual Obligations

The following is a summary of our significant contractual obligations as of December 31, 2021 (in thousands):

Less than 1 year

More than 5 years

Contractual Obligations:

Operating lease commitments (1)

Total Contractual Obligations

(1) Represents future minimum lease payments under our operating lease for 840 Winter Street in Waltham, Massachusetts and an additional space at 880 Winter Street Waltham, Massachusetts of which rent is anticipated to commence January 2023.

The term is expected to expire December 2032.

We enter into contracts in the normal course of business with third-party CROs for clinical trials, preclinical studies, and other services and

products for operating purposes.

These contracts generally provide for termination following a certain period after notice and therefore we believe that our

non-cancelable obligations under these agreements are not material, and they are not included in the table above.

See Note 10, Loan and Security Agreement, to our audited financial statements included elsewhere in this Annual Report for a discussion of obligations in relation to the Loan Agreement with K2HV.

See Note 9, Commitments and Contingencies, to our audited financial statements included elsewhere in this Annual Report for a discussion of obligations in relation to our leases.

Critical Accounting Policies and Estimates

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We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

evaluate our estimates and assumptions on an ongoing basis.

We evaluate our estimates and assumptions on an ongoing basis.

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

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Revenue recognition

To date, our revenues have consisted of consideration related to the Novartis Agreement.

To date, our revenues have primarily consisted of consideration related to the Novartis Agreement.

We adopted the provisions of Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), or ASC 606, on January 1, 2018.

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

Stock-based compensation

We measure stock-based awards granted to employees and directors based on fair value on the date of the grant using the Black-Scholes option-pricing model for options.

Compensation expense for those awards is recognized over the requisite service period, which is generally the vesting period of the respective award.

We use the straight-line method to record the expense of awards with service-based vesting conditions.

We use the graded-vesting method to record the expense of awards with both service-based and performance-based vesting conditions, commencing when achievement of the performance condition becomes probable.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model, which 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 stock options, the risk-free interest rate for a period that approximates the expected term of our stock options and our expected dividend yield.

Prior to our IPO, there was no public market for our common stock, and consequently, the estimated fair value of our common stock was determined by our board of directors as of the date of each option grant, with input from management, considering third-party valuations of our common stock as well as our board of directors’

assessment of additional objective and subjective factors that it believed were relevant and which may have changed from the date of the most recent third-party valuation through the date of the grant.

Since our IPO, we have determined the fair market value of our common stock using the closing price of our common stock as reported on the Nasdaq Global Select Market.

Recently Issued Accounting Pronouncements

We do not believe that any recently issued accounting pronouncements will materially impact our financial position and results of operations.

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

Emerging Growth Company and Smaller Reporting Company Status

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Quantitative and Qualitat ive Disclosures About Market Risk.

We are exposed to market risk related to changes in interest rates.

As of December 31, 2021, we had cash, cash equivalents, and restricted cash of $166.4 million which were held in savings accounts at banking institutions and money market funds that invest in U.S.

Government securities.

Interest income is sensitive to changes in the general level of interest rates;

however, due to the nature of these investments, an immediate 10% change in market interest rates would not have a material effect on the fair market value of our cash balance or on our financial position or results of operations.

Inflation generally affects us by increasing our cost of labor and clinical trial costs.

We do not believe that inflation had a material effect on our business, financial condition or results of operations during the years and three months ended December 31, 2021 and 2020.

We are a smaller reporting company, as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide the information required under this item.

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-K

Item 5. Market for Registrant’s Common Equity