What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-03-17 compared with 2021-03-18 · 113 added, 97 removed, 774 unchanged (21% of the section changed)

18 unchanged sentences

This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm due to a transition period established by rules of the SEC for “emerging growth companies”.

Remediation of Previously Reported Material Weaknesses

During the year ended December 31, 2018, we reported material weaknesses in our internal control over financial reporting related to deficiencies in our controls over the financial statement close process, including over complex accounting issues, expense classification and accrued research and development expenses, as well as the cash disbursement process.

We took a number of actions in 2018 and 2019 to improve our internal control over financial reporting to remediate these material weaknesses.

For the year ended December 31, 2020, we completed our testing of the operating effectiveness of the implemented controls and determined they were effective.

As a result, we have concluded the material weaknesses identified in fiscal year 2018 have been remediated as of December 31, 2020.

We cannot assure you that material weaknesses or significant deficiencies will not occur in the future or that we will be able to remediate such weaknesses or deficiencies in a timely manner, which could impair our ability to accurately and timely report our financial position, results of operations or cash flows.

For additional information see the related risks in the section titled “Risk Factors” in Part I, Section 1.A of this Annual Report.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the quarter ended December 31, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the year ended December 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Other Information.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

Certain information required by Part III is omitted from this Annual Report on Form 10-K and is incorporated by reference from our definitive proxy statement relating to our 2022 annual meeting of stockholders, pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended, also referred to in this Annual Report on Form 10-K as our 2022 Proxy Statement, which we expect to file with the SEC no later than April 29, 2022.

25 unchanged sentences

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets

43 unchanged sentences

Total current liabilities

Note payable, net of discount

Deferred rent, net of current portion

8 unchanged sentences

December 31, 2021 and 2020;

41,569 and 31,673 shares issued

as of December 31, 2020 and 2019, respectively;

41,569 and 31,643

shares outstanding as of December 31, 2020 and 2019, respectively

43,652 and 41,569 shares issued and

outstanding as of December 31, 2021 and 2020, respectively

Additional paid-in capital

12 unchanged sentences

Loss from operations

Other income (expense):

Interest income

Other (expense) income:

Interest (expense) income, net

Other expense, net

Total other income, net

Total other (expense) income, net

Comprehensive loss

10 unchanged sentences

Issuance of common stock upon public

offering, net of offering costs of $ 525

offerings, net of offering costs of $ 697

Issuance of common stock under

ATM facility, net of offering costs of $ 67

Issuance of common stock under 2018 employee stock

2 unchanged sentences

Balance as of December 31, 2020

Vesting of restricted stock awards and units

Stock-based compensation expense

Vesting of restricted stock units

Exercise of stock options

Issuance of common stock upon public

offerings, net of offering costs of $ 697

Issuance of common stock under

2 unchanged sentences

purchase plan

Stock-based compensation expense

Balance as of December 31, 2021

20 unchanged sentences

offerings, net of offering costs

Proceeds from long-term debt

Payments of issuance cost related to long-term debt

Proceeds from issuance of common stock under ATM facility, net of offering costs

2 unchanged sentences

Net cash provided by financing activities

Net increase in cash, cash equivalents and restricted cash

Net (decrease) increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

Cash, cash equivalents and restricted cash at end of period

Supplemental Cash:

Interest paid

Supplemental disclosure of non-cash investing and financing activities:

Purchases of property and equipment included in accounts payable and

accrued expenses

Common stock offering costs incurred but unpaid at period end

15 unchanged sentences

The Company has devoted substantially all of its efforts to research and development, business planning, acquiring operating assets, seeking protection for its technology and product candidates, and raising capital.

Since inception, the Company has funded its operations through sales of preferred stock and common stock.

Since inception, the Company has funded its operations through sales of preferred stock and common stock and a term loan facility.

As of December 31, 2021, the Company had an accumulated deficit of $ 383,542 .

16 unchanged sentences

All material long-lived assets of the Company reside in the United States.

Reclassifications

Restricted cash totaling $ 492 as of December 31, 2019 has been reclassified from “Other assets” to “Restricted cash” in order to conform to the current period presentation.

Additionally, the Company has reclassified $ 214 which was previously classified as “Accrued expenses and other current liabilities” as of December 31, 20219 to “Deferred rent” in order to

conform to the current period presentation.

These reclassifications had no effect on the consolidated results of operation or cash flows for the year ended December 31, 2019.

Use of Estimates

12 unchanged sentences

The Company deposits its cash and cash equivalents in financial institutions that it believes have high credit quality and has not experienced any losses on such accounts and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

Deferred Issuance Costs

The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred issuance costs until such financings are consummated.

After consummation of the equity financing, these costs are recorded as a reduction of the proceeds generated as a result of the offering.

Should the planned equity financing be abandoned, the deferred issuance costs will be expensed immediately as a charge to operating expenses in the consolidated statements of operations.

As of December 31, 2019, the Company recorded deferred issuance costs of $ 133 within other assets on the consolidated balance sheet related to a follow-on offering of common stock completed in February 2020.

There were no amounts deferred as of December 31, 2020.

Fair Value Measurements

40 unchanged sentences

dollars at the average rates in effect during the period.

Any differences resulting from the remeasurement of assets, liabilities, and operations of the Canadian and Australian subsidiaries are recorded within other income (expense), net in the consolidated statements of operations and comprehensive loss.

During the years ended December 31, 2020 and 2019, the Company recorded foreign exchange losses of $ 203 and $ 90 , respectively, in other expense.

Any differences resulting from the remeasurement of assets, liabilities, and operations of the Canadian and Australian subsidiaries are recorded within other (expense) income, net in the consolidated statements of operations and comprehensive loss.

During the years ended December 31, 2021 and 2020, the Company recorded foreign exchange losses of $ 61 and $ 203 , respectively, in other expense in the consolidated statements of operations and comprehensive loss.

Research and Development Expenses

7 unchanged sentences

When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs.

Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period.

Significant judgments and estimates are made in determining the accrued

balances at the end of any reporting period.

Actual results could differ from the Company’s estimates.

32 unchanged sentences

Changes in deferred tax assets and liabilities are recorded in the provision for income taxes.

The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established.

Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established.

The Company accounts for uncertain tax positions recognized in the consolidated financial statements by prescribing a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

8 unchanged sentences

Subsequent events have been evaluated as required.

The Company has evaluated all subsequent events and determined that there are no material recognized or unrecognized subsequent events requiring disclosure.

Emerging Growth Company Status

3 unchanged sentences

The Company may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of an offering or such earlier time that it is no longer an “emerging growth company.”

Recently Adopted Accounting Pronouncements

In November 2018, the FASB issued ASU No.

2018-18, Collaborative Arrangements (Topic 808)—Clarifying the Interaction between Topic 808 and Topic 606 , or ASU 2018-18.

The amendments in ASU 2018-18 clarify that certain transactions between collaborative arrangement participants should be accounted for as revenue under ASC 606 when the collaborative arrangement participant is a customer in the context of a unit of account.

The amendments under ASU 2018-18 are effective for interim and annual fiscal periods beginning after December 15, 2019, with early adoption permitted.

The amendments in ASU 2018-18 should be applied retrospectively to the date of initial application of ASC 606.

The Company adopted ASU 2018-18 during the quarter ended March 31, 2020.

The adoption did not have a material impact on the consolidated financial statements.

In August 2018, the FASB issued ASU No.

2018-15, Intangible-Goodwill and Other Internal-Use Software (Subtopic 350-40), or ASU 2018-15.

ASU 2018-15 updates guidance regarding accounting for implementation costs associated with a cloud computing arrangement that is a service contract.

The amendments under ASU 2018-15 are effective for interim and annual fiscal periods beginning after December 15, 2019, with early adoption permitted.

The Company adopted ASU 2018-15 during the quarter ended March 31, 2020.

The adoption did not have a material impact on the consolidated financial statements.

In August 2018, the FASB issued ASU No.

2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement , or ASU 2018-13.

The amendments in ASU 2018-13 eliminate, add, and modify certain disclosure requirements for fair value measurements.

The amendments are effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted for either the entire ASU or only the provisions that eliminate or modify requirements.

The amendments with respect to changes in unrealized gains and losses, the range and weighted-average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty are to be applied prospectively.

All other amendments are to be applied retrospectively to all periods presented.

The Company adopted ASU 2018-13 during the quarter ended March 31, 2020.

The adoption did not have a material impact on the consolidated financial statements.

Recently Issued Accounting Pronouncements

21 unchanged sentences

These amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash.

The amendments in both ASU 2016-13 and ASU 2019-11 are

effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years.

The amendments in both ASU 2016-13 and ASU 2019-11 are effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years.

As a result of the Company having elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act, 2016-13 and ASU 2019-11 are effective for the Company for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years.

11 unchanged sentences

As consideration for the MPSII License Agreement, the Company agreed to pay UoM an upfront, one-time fee of $ 8,000 , which was recognized as research and development expense during the year ended December 31, 2020.

As part of the agreement, the Company is obligated to make milestone payments of up to an aggregate of $ 80,000 upon the achievement of specified development and regulatory milestones, to pay royalties, on a product-by-product and country-by-country basis, of a mid-single digit percentage based on net sales of products licensed under the agreement and to pay a low double digit percentage of any sublicense fees received by the Company.

by-country basis, of a mid-single digit percentage based on net sales of products licensed under the agreement and to pay a low double - digit percentage of any sublicense fees received by the Company.

The next anticipated payment milestones under the MPSII License Agreement include $ 2,000 , which would become due following the date of regulatory approval of the clinical trial application for the investigator-sponsored Phase 1/2 clinical trial sponsored by UoM, and $ 4,000 , upon the dosing of the first patient in the investigator-sponsored Phase 1/2 clinical trial sponsored by UoM.

4 unchanged sentences

Under the CRFA, the Company has agreed to fund the budgeted costs of an investigator-sponsored Phase 1/2 clinical trial to be sponsored by UoM in connection with the development activities under the MPSII License Agreement, which are currently estimated to equal approximately £ 9,900 in the aggregate .

For the year ended December 31, 2020, the Company recognized $ 565 of costs related to the CRFA.

For the years ended December 31, 2021 and 2020, the Company recognized $ 1,437 and $ 565 , respectively, of costs related to the CRFA.

Agreements with University Health Network (“UHN”)

2 unchanged sentences

On November 4, 2016, the Company exercised its option and entered into a license agreement with UHN, pursuant to which UHN granted the Company an exclusive worldwide license under certain intellectual property rights and a non-exclusive worldwide license under certain know-how, in each case subject to certain retained rights, to develop, commercialize and sell products for use in the treatment of Fabry disease.

In addition, for three years following the execution of the agreement, UHN granted the Company an exclusive option to obtain a license under

certain improvements to the licensed intellectual property rights as well as an option to negotiate a license under certain other improvements.

In addition, for three years following the execution of the agreement, UHN granted the Company an exclusive option to obtain a license under certain improvements to the licensed intellectual property rights as well as an option to negotiate a license under certain other improvements.

Under this agreement, the Company paid an option fee of CAD$ 20 , an upfront license fee of CAD$ 75 , plus the annual license maintenance fee for the first year.

37 unchanged sentences

BioMarin has the right to terminate the agreement upon the Company’s bankruptcy or insolvency, or in the event of any challenge or opposition to the licensed patent rights or related actions brought by the Company or its affiliates or sublicensees, or if the Company, its affiliates or sublicensees knowingly assist a third-party in challenging or otherwise opposing the licensed patent rights, except as required under a court order or subpoena.

Agreement with GenStem Therapeutics, Inc.

Agreement with Papillon Therapeutics, Inc.

(previously GenStem Therapeutics, Inc.

On October 2, 2017, the Company entered into a license agreement with GenStem, pursuant to which GenStem granted the Company an exclusive worldwide license, subject to certain retained rights, under certain intellectual property rights owned or controlled by GenStem to develop, commercialize and sell products for use in the treatment of cystinosis.

5 unchanged sentences

The Company may terminate the agreement at will upon the specified prior written notice to GenStem.

For the year ended December 31, 2020 the Company recorded no research and development expense related to milestone payments.

For the year ended December 31, 2019 the Company recorded $ 2,000 related to milestone payments.

In October 2021, the Company received noticed that the license agreement with GenStem had been assigned to Papillon Therapeutics, Inc.

(“Papillon”).

No expenses related to the license were recorded for the years ended December 31, 2021 and 2020.

Agreement with Lund University Rights Holders

22 unchanged sentences

Other current assets

Prepaid expenses and other current assets

Property and equipment, net

26 unchanged sentences

On August 31, 2018, the Company entered into a sub-lease agreement for lab space located in Cambridge Massachusetts, United States, which was set to expire in October 2020 .

On June 9, 2020, the Company amended the terms of the sublease, which is now set to expire in April 2022 .

On June 9, 2020, the Company amended the terms of the sublease, which was set to expire in April 2022 .

Effective January 1, 2022, the Company amended the terms of the sublease, which is now set to expire in April 2023 .

The annual lease payments are subject to a 5 % increase each year.

2 unchanged sentences

The annual lease payments are fixed for years 1 and 2, and then subject to a 6.67 % increase for years 3 through 5 .

In accordance with the lease agreement, the Company is required to maintain a security deposit of CAD $ 27 , which was recorded in other long-term assets as of December 31, 2020.

In accordance with the lease agreement, the Company is required to maintain a security deposit of CAD$ 27 , which was recorded in other long-term assets as of December 31, 2021 and 2020.

The Company recorded rent expense of $ 2,648 and $ 2,352 during the years ended December 31, 2021 and 2020, respectively.

23 unchanged sentences

The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements.

On November 2, 2021 (the “Closing Date”), the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Silicon Valley Bank (“SVB”) pursuant to which a term loan in an aggregate principal amount of up to $ 50,000 (the “Term Loan Facility”) is available to the Company in three tranches, subject to certain terms and conditions.

The first tranche of $ 15,000 was advanced to the Company on the Closing Date.

Subject to the terms and conditions of the Loan Agreement, the first tranche allows the Company to borrow an additional $ 15,000 through October 31, 2023.

Upon satisfaction of certain milestones, the second and third tranches are available under the Term Loan Facility which allows the Company to borrow an additional amount up to $ 10,000 in each tranche through October 31, 2023.

Additionally, the Company may seek to borrow up to an additional $ 15,000 at the sole discretion of the lender through the term of the Loan Agreement.

The Loan Agreement matures on October 1, 2026 (the “Maturity Date”).

The Company is required to pay an end of term fee (“End of Term Charge”) equal to 9.00 % of the aggregate principal amount of the Term Loan advances upon repayment.

Advances under the Term Loan Facility will bear interest at a rate equal to the greater of either (i) the Prime Rate (as reported in The Wall Street Journal) plus 4.85 %, and (ii) 8.10 %.

The Company will make interest only payments through November 1, 2024.

Following the interest only period, the Company will repay the principal balance and interest of the advances in equal monthly installments through October 1, 2026 .

The Company may prepay advances under the Loan Agreement, in whole or in part, at any time subject to a prepayment charge (the “Prepayment Premium”) equal to:

(a) 1.50 % of amounts so prepaid, if such prepayment occurs during the first year following the Closing Date;

(b) 1.00 % of the amount so prepaid, if such prepayment occurs during the second year following the Closing Date, and (c) 0.00 % of the amount so prepaid, if such prepayment occurs after the second year following the Closing Date.

Upon prepayment or repayment of all or any of the term loans under the Term Loan Facility, the Company will pay (in addition to any Prepayment Premium) an end of term charge of 9.0 % of the aggregate funded amount under the Term Loan Facility.

The Term Loan Facility is secured by substantially all of the Company’s assets, other than the Company’s intellectual property.

The Company has agreed to not pledge or secure its intellectual property to others.

The End of Term Charge is recorded as a debt discount with an initial carrying balance of $ 1,350 .

During the year ended December 31, 2021 the Company recognized $ 103 of debt issuance costs related to legal expenses that has been included in the debt discount balance.

The debt discount costs are being accreted to the principal amount of debt and being

amortized from the date of issuance through the Maturity Date to interest expense using the effective-interest rate method.

The effective interest rate of the outstanding debt under the Loan Agreement is approximately 11.12 %.

As of December 31, 2021 the carrying value of the note payable consists of the following:

December 31, 2021

(in thousands)

Note payable, including End of Term Charge

Debt discount, net of accretion

Note payable, net of discount, long-term

As of December 31, 2021, the future principal payments due under the arrangement, excluding interest and the end of term charge, are as follows:

Year Ending December 31,

During the year ended December 31, 2021, the Company recognized $ 203 of interest expense related to the Loan Agreement, which is reflected in other (expense) income, net on the consolidated statements of operations and comprehensive loss.

As of December 31, 2021 and 2020, the authorized capital stock of the Company included 150,000,000 shares of common stock, $ 0.0001 par value, and 10,000,000 shares of undesignated preferred stock.

9 unchanged sentences

In June 2020, the Company sold an aggregate of 384,140 shares of common stock under its “at-the-market” facility (the “ATM Facility”) for net proceeds, after deducting commissions and other offering expenses payable by the Company, of $ 8,130 .

As of December 31, 2020, approximately $ 41,549 of common stock remained available for future issuance under the ATM Facility.

In November 2020, the Company closed an underwritten public offering of 5,000,000 shares of its common stock at a public offering price of $ 15.00 per share (the “November 2020 Follow-on Offering”).

The net proceeds to the Company from the November 2020 Follow-on Offering, after deducting underwriting discounts and commissions and other offering expenses payable by the Company, were $ 70,221 .

In May 2021, the Company sold an aggregate of 1,829,268 shares of common stock under the ATM Facility for net proceeds, after deducting commissions and other offering expenses payable by the Company, of $ 14,550 .

As of December 31, 2021, approximately $ 26,549 of common stock remained available for future issuance under the ATM Facility.

Common Stock Reserved for Future Issuance

As of December 31, 2021 and 2020, the Company has reserved the following shares of common stock for future issuance:

Shares reserved for vesting of restricted stock awards

Shares reserved for exercise of outstanding stock options

32 unchanged sentences

The Company’s 2018 Employee Stock Purchase Plan (the “ESPP”) was adopted by the Board on June 1, 2018 and approved by stockholders on June 7, 2018 and became effective upon the effectiveness of the Company’s Registration Statement on Form S-1.

The ESPP is intended to qualify as an “employee sto

ck purchase plan” within the meaning of Section 423(b) of the Code.

The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423(b) of the Code.

The ESPP initially reserves and authorizes the issuance of up to a total of 223,200 shares of common stock to participating employees.

3 unchanged sentences

During the years ended December 31, 2021 and 2020, the Company issued 27,580 and 13,425 shares, respectively of common stock.

The total number of shares of common stock that may be issued under the ESPP was 762,900 shares as of December 31, 2020, of which 762,900 shares remained available for future grant, and which does not include the shares added to the ESPP reserve on January 1, 2021 as a result of the ESPP Evergreen for the year ended December 31, 2020.

The total number of shares of common stock available for future grant was 1,151,010 as of December 31, 2021, which does not include the shares added to the ESPP reserve on January 1, 2022 as a result of the ESPP Evergreen for the year ended December 31, 2021.

2019 Inducement Plan

27 unchanged sentences

The purchase price of the restricted stock awards are determined by the Board.

Unvested shares of restricted stock awards may not be sold or transferred by the holder.

shares of restricted stock awards may not be sold or transferred by the holder.

These restrictions lapse according to the time-based vesting conditions of each award.

53 unchanged sentences

Accordingly, the Company has provided a full valuation allowance for deferred tax assets as of December 31, 2021 and 2020.

The valuation allowance increased $ 32,066 and $ 19,968 during the years ended December 31, 2020 and 2019, respectively, due primarily to net operating losses generated.

The valuation allowance increased by $ 30,401 and $ 32,066 during the years ended December 31, 2021 and 2020, respectively, due primarily to net operating losses generated.

As of December 31, 2021 and 2020, the Company had U.S.

5 unchanged sentences

state net operating loss carryforwards of $ 290,500 and $ 201,642 , respectively, which may be available to offset future taxable income.

These losses expire at various dates through 2040.

As of December 31, 2020 and 2019, the Company has federal research and development tax credit carryforwards of $ 3,677 and $ 1,547 , respectively.

These losses expire at various dates beginning in 2041.

As of December 31, 2021 and 2020, the Company had federal research and development tax credit carryforwards of $ 6,234 and $ 3,677 , respectively.

Included in the $ 6,234 of federal tax credit carryforwards are $ 1,959 of orphan drug credits.

The Company qualifies for, and has elected to, apply part of its federal research credits against its payroll tax liability in accordance with certain provisions of the Internal Revenue Code.

Through the year ended December 31, 2020 the Company qualifies for, and has elected to, apply part of its federal research credits against its payroll tax liability in accordance with certain provisions of the Internal Revenue Code.

The amount applied towards the Company’s payroll tax liability is capped at $ 250 per year.

The federal research credits generated in excess of the $ 250 cap are able to be carried forward for 20 years.

As of December 31, 2020 and 2019, the Company had state research and development tax credit carryforwards of approximately $ 894 and $ 214 , respectively, available to reduce future tax liabilities which expire at various dates through 2034.

As of December 31, 2021 and 2020, the Company had state research and development tax credit carryforwards of approximately $ 1,959 and $ 894 , respectively, available to reduce future tax liabilities which expire at various dates beginning in 2037.

For all years through December 31, 2021, the Company generated research credits but has not conducted a study to document the qualified activities.

3 unchanged sentences

Qualifying expenditures largely comprise employment costs for research staff, consumables, certain internal overhead costs and subcontracted expenditures as part of research projects for which the Company does not receive income.

For the year ended December 31, 2020, the Company recorded $ 589 in research and development tax credits as an offset to research and development expenses.

For the year ended December 31, 2021 and 2020, the Company recorded $ 1,210 and $ 589 , respectively, in research and development tax credits as an offset to research and development expenses in the consolidated statement of operations and comprehensive loss.

Under the provisions of the Internal Revenue Code, the net operating loss and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities.

Net operating loss and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50 percentage points, as defined under Sections 382

and 383 of the Internal Revenue Code, respectively, as well as similar state provisions.

This could limit the amount of tax attributes that can be utilized annually to offset future tax liabilities.

18 unchanged sentences

For the years ended December 31, 2021 and 2020, the Company recorded expenses of $ 1,523 and $ 1,488 , respectively, related to a sublease to rent lab space, provided by an entity affiliated with a member of the board.

Subsequent Events

The Company has completed an evaluation of all subsequent events after the audited balance sheet date of December 31, 2021 through the filing date of this Annual Report on Form 10-K with the SEC, to ensure that these consolidated financial statements include appropriate disclosure of events both recognized in the consolidated financial statements as of December 31, 2021, and events which occurred subsequently but were not recognized in the consolidated financial statements.

The Company has concluded that no subsequent events have occurred that require disclosure, except as disclosed within these consolidated financial statements and as described below.

In January 2022 the Company announced the deprioritization of AVR-RD-01, its investigational gene therapy program for Fabry disease.

This decision was made due to several factors, including new clinical data showing variable engraftment patterns from the five most recently dosed patients in the Company’s Phase 2 clinical trial of AVR-RD-01 for the treatment of Fabry disease, which the Company refers to as the FAB-GT clinical trial.

The emergence of such new data would have significantly extended the program’s development timeline.

That development, coupled with an increasingly challenging market and regulatory environment for Fabry disease, were among the primary factors leading to the Company’s deprioritization of its Fabry program.

As a result of the deprioritization, the Company has stopped enrollment of its Phase 2 FAB-GT clinical trial and will focus on its other pipeline programs.

In connection with the deprioritization of AVR-RD-01 noted above, in January, 2022, the Company approved changes to the Company’s organization as well as a broader operational cost reduction plan.

As part of this plan, the Company approved a reduction in the Company’s workforce by approximately 23 % across different areas and functions in the Company (the “Workforce Reduction”).

The Workforce Reduction is expected to be substantially complete in the first quarter of 2022.

Affected employees were offered separation benefits, including severance payments.

The Company estimates that the severance and termination-related costs will total approximately $ 2.5 million in the aggregate and expects to record these charges in the first quarter of 2022.

The Company expects that payments of these costs will be substantially complete through the end of the first quarter of 2022.

EXHIBIT INDEX

39 unchanged sentences

333-225213) and incorporated herein by reference)

Amendment to Employment Agreement, by and between the Registrant and Geoff MacKay, dated April 5, 2021 (filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on May 13, 2021 (File No.

001-38537) and incorporated herein by reference

Employment Agreement, by and between the Registrant and Erik Ostrowski, dated December 17, 2018 (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on December 21, 2018 (File No.

001-38537) and incorporated herein by reference)

Amendment to Employment Agreement, by and between the Registrant and Erik Ostrowski, dated April 5, 2021 (filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed on May 13, 2021 (File No.

001-38537) and incorporated herein by reference

Employment Agreement, by and between the Registrant and Steven Avruch, dated December 17, 2018 (filed as Exhibit 10.13 to the Registrant’s Annual Report on Form 10-K filed on March 25, 2019 (File No.

001-38537) and incorporated herein by reference)

Consulting Agreement, by and between the Registrant and Birgitte Volck, M.D., Ph.D., dated December 17, 2018 (filed as Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K filed on March 25, 2019 (File No.

Amendment to Employment Agreement, by and between the Registrant and Steven Avruch, dated April 5, 2021 (filed as Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q filed on May 13, 2021 (File No.

001-38537) and incorporated herein by reference

Employment Agreement, by and between the Registrant and Birgitte Volck, M.D., Ph.D., dated December 17, 2018 (filed as Exhibit 10.15 to the Registrant’s Annual Report on Form 10-K filed on March 25, 2019 (File No.

Employment Agreement, by and between the Registrant and Deanna Petersen, dated September 1, 2018 (filed as Exhibit 10.16 to the Registrant’s Annual Report on Form 10-K filed on March 16, 2020 (File No.

001-38537) and incorporated herein by reference)

Separation Agreement and Release, by and between the Registrant and Birgitte Volck, M.D., Ph.D., dated July 16, 2020 (filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed on August 6, 2020 (File No.

Amendment to Employment Agreement, by and between the Registrant and Deanna Petersen, dated April 5, 2021 (filed as Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q filed on May 13, 2021 (File No.

001-38537) and incorporated herein by reference )

Employment Agreement, by and between the Registrant and Chris Mason, dated September 1, 2018 (filed as Exhibit 10.19 to the Registrant’s Annual Report on Form 10-K filed on March 18, 2021 (File No.

001-38537) and incorporated herein by reference)

Employment Agreement, by and between the Registrant and Chris Mason, dated September 1, 2018

Employment Agreement, by and between the Registrant and Diana Escolar, dated December 4, 2020

Amendment to Employment Agreement, by and between the Registrant and Chris Mason, dated April 5, 2021 (filed as Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q filed on May 13, 2021 (File No.

001-38537) and incorporated herein by reference)

Employment Agreement, by and between the Registrant and Essra Ridha, dated October 6, 2021

2018 Employee Stock Purchase Plan (filed as Exhibit 10.14 to the Registrant’s Second Amendment to the Registration Statement on Form S-1 filed on June 11, 2018 (File No.

7 unchanged sentences

333-230493) and incorporated herein by reference)

2020 Inducement Plan and form of award agreement thereunder

2020 Inducement Plan and form of award agreement thereunder (filed as Exhibit 10.25 to the Registrant’s Annual Report on Form 10-K filed on March 18, 2021 (File No.

001-38537) and incorporated herein by reference)

EXHIBIT INDEX

Loan and Security Agreement, dated November 2, 2021, by and among the Registrant, the lenders party thereto from time to time and Silicon Valley Bank, as administrative agent and collateral agent (filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on November 4, 2021 (File No.

001-38537) and incorporated herein by reference)

Subsidiaries of the Registrant

Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm

Power of Attorney (included on the signature page)

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

2 unchanged sentences

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

EXHIBIT INDEX

Interactive Data Files pursuant to Rule 405 of Regulation S-T formatted in Inline Extensible Business Reporting Language (“Inline XBRL”).

45 unchanged sentences

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 9A. Controls and Procedures