What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-08-16 compared with 2021-05-11 · 210 added, 97 removed, 367 unchanged (46% of the section changed)

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We recently acquired exclusive worldwide rights to a clinical-stage, intrathecally dosed AAV9 gene therapy program, now known as TSHA-120, for the treatment of giant axonal neuropathy, or GAN.

A Phase 1/2 clinical trial of TSHA-120 is being conducted by the National Institutes of Health under an accepted investigational new drug application, or IND, and we expect to provide a regulatory and clinical update by the end of 2021.

A Phase 1/2 clinical trial of TSHA-120 is being conducted by the National Institutes of Health, or NIH under an accepted investigational new drug application, or IND, and we expect to provide a regulatory and clinical update by the end of 2021.

A Phase 1/2 clinical trial of TSHA-101 was initiated by Queen’s University at Kingston, or Queen’s University, under an accepted Clinical Trial Application, or CTA, in Canada, and Queen’s University expects to report preliminary safety and biomarker data in the second half of 2021 and preliminary clinical data by the end of 2021.

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We are also developing TSHA-118 for the treatment of CLN1 disease (one of the forms of Batten disease) and intend to initiate a Phase 1/2 clinical trial of TSHA-118 in the second half of 2021 under a currently open IND.

We anticipate dosing the first patient in that trial in the second half of 2021 and reporting biomarker data in the first half of 2022.

Further, we plan to advance four new undisclosed programs focused on neurodevelopmental disorders, genetic epilepsies and neurodegenerative diseases into preclinical development in 2021.

In addition to our product pipeline candidates, we are building a platform of next-generation technologies to optimize key components of our AAV-based gene therapies, including redosing, transgene regulation and capsid development.

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We do not have any product candidates approved for sale and have not generated any revenue from product sales.

funded our operations through the sale of equity, raising an aggregate of $307.0 million of gross proceeds from our initial public offering and private placements of our convertible preferred stock.

We have funded our operations through the sale of equity, raising an aggregate of $307.0 million of gross proceeds from our initial public offering and private placements of our convertible preferred stock.

Since our inception, we have incurred significant operating losses.

Our net losses were $32.0 million for the three months ended March 31, 2021 and $5.4 million for the three months ended March 31, 2020.

As of March 31, 2021, we had an accumulated deficit of $93.2 million.

Our net losses were $73.0 million for the six months ended June 30, 2021 and $26.7 million for the six months ended June 30, 2020.

As of June 30, 2021, we had an accumulated deficit of $134.1 million.

We expect to continue to incur significant expenses and operating losses for the foreseeable future.

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continue to advance the preclinical and clinical development of our product candidates and preclinical and discovery programs;

conduct our ongoing clinical trial of TSHA-101 and TSHA-120, as well as initiate and complete additional clinical trials of TSHA-101, TSHA-118, TSHA-102, TSHA-104 and any other current and future product candidates that we advance;

conduct our ongoing clinical trials of TSHA-101 and TSHA-120, as well as initiate and complete additional clinical trials of TSHA-101, TSHA-118, TSHA-102, TSHA-104 and any other current and future product candidates that we advance;

seek regulatory approval for any product candidates that successfully complete clinical trials;

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Recent Developments

In March 2021, we acquired the exclusive worldwide rights to a clinical-stage AAV9 gene therapy program, now known as TSHA-120, for the treatment of GAN, pursuant to a license agreement with Hannah’s Hope Fund for Giant Axonal Neuropathy, Inc., or HHF.

Under the terms of the agreement, HHF will receive an upfront payment of $5.5 million and will be eligible to receive clinical, regulatory and commercial milestones totaling up to $19.3 million, as well as a low, single-digit royalty on net sales upon commercialization of TSHA-120.

TSHA-120 for Giant Axonal Neuropathy

We recently acquired exclusive worldwide rights to a clinical-stage, intrathecally dosed AAV9 gene therapy program, now known as TSHA-120, for the treatment of giant axonal neuropathy, or GAN.

In March 2021, we acquired the exclusive worldwide rights to a clinical-stage, intrathecally dosed AAV9 gene therapy program, now known as TSHA-120, for the treatment of giant axonal neuropathy, or GAN, pursuant to a license agreement with Hannah’s Hope Fund for Giant Axonal Neuropathy, Inc., or HHF.

Under the terms of the agreement, HHF received an upfront payment of $5.5 million and will be eligible to receive clinical, regulatory and commercial milestones totaling up to $19.3 million, as well as a low, single-digit royalty on net sales upon commercialization of TSHA-120.

GAN is a rare autosomal recessive disease of the central and peripheral nervous systems caused by loss-of-function gigaxonin gene mutations.

The estimated prevalence of GAN is 2,400 patients in the Unites States and European Union.

The estimated prevalence of GAN is 2,400 patients in the United States and European Union.

Symptoms and features of children with GAN usually develop around the age of five years and include an abnormal, wide based, unsteady gait, weakness and some sensory loss.

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This phenotype represents up to 6% of all CMT2 diagnosis.

In the late-onset population, patients have poor quality of life but the disease is not life-

I n early-onset disease, symptomatic treatments attempt to maximize physical development and minimize the rate of deterioration.

In the late-onset population, patients have poor quality of life but the disease is not life-limiting.

In early-onset disease, symptomatic treatments attempt to maximize physical development and minimize the rate of deterioration.

Currently, there are no approved disease-modifying treatments available.

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The GAN natural history study was initiated in 2013 and included 45 GAN patients, aged 3 to 21 years.

As would be expected for a neurodegenerative disease, younger patients have higher baseline scores.

However, the rate of decline in the MFM32 scores demonstrated consistency across patients of all ages, with most demonstrating an average 8-point decline per year regardless of age and/or baseline MFM32 score, as shown in the natural history plot below.

Imaging data from this study has demonstrated that there are distinctive increased T2 signal abnormalities within the cerebellar white matter surrounding the dentate nucleus of the cerebellum, which represents one of the earliest brain imaging findings in individuals with GAN.

These findings precede the more widespread periventricular and deep white matter signal abnormalities associated with advanced disease.

In addition, cortical and spinal cord atrophy appeared to correlate with more advanced disease severity and older age.

Impaired pulmonary function in patients with GAN also was observed, with forced vital capacity correlating well with several functional outcomes such as the MFM32, a validated 32-item scale for motor function measurement developed for neuromuscular diseases.

Nocturnal hypoventilation and sleep apnea progressed over time, with sleep apnea worsening as ambulatory function deteriorated.

Total MFM32 score also correlated with ambulatory status, where independently ambulant individuals performed better and had higher MFM32 scores than the non-ambulant group, as shown in the graph below.

Patients also reported significant autonomic dysfunction based on the COMPASS 31 self-assessment questionnaire.

In addition, nerve conduction function demonstrated progressive sensorimotor polyneuropathy with age.

As would be expected for a neurodegenerative disease, younger patients have higher baseline MFM32 scores.

However, the rate of decline in the MFM32 scores demonstrated consistency across p atients of all ages, with most demonstrating an average 8-point decline per year regardless of age and/or baseline MFM32 score, as shown in the natural history plot below .

A 4-point score change in the MFM32 is considered clinically meaningful, suggesting that GAN patients lose significant function annually.

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The time to fall off the rotarod, known as latency, was also evaluated and the data below demonstrate the clear difference in latency in treated versus untreated GAN rodents.

A result is considered to be statistically significant when the probability of the result occurring by random chance, rather than from the efficacy of the treatment, is sufficiently low.

A result is considered statistically significant when the probability of the result occurring by random chance, rather than from the efficacy of the treatment, is sufficiently low.

The conventional method for determining the statistical significance of a result is known as the “p-value,” which represents the probability that random chance caused the result (e.g., a p-value = 0.01 means that there is a 1% probability that the difference between the control group and the treatment group is purely due to random chance).

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Treatment with TSHA-120 resulted in considerable improvements in the pathological appearance of the DRG in the GAN knockout mice.

Shown below is tissue from a GAN knockout mouse model with numerous abnormal neuronal inclusions containing aggregates of damaged neurofilament in the

DRG as indicated by the yellow arrows.

On image C, the tissue from the GAN knockout mice treated with an intrathecal inj ection of TSHA-120 had a notable improvement in the reduction of these neuronal inclusions in the DRG.

Shown below is tissue from a GAN knockout mouse model with numerous abnormal neuronal inclusions containing aggregates of damaged neurofilament in the DRG as indicated by the yellow arrows.

On image C, the tissue from the GAN knockout mice treated with an intrathecal injection of TSHA-120 had a notable improvement in the reduction of these neuronal inclusions in the DRG.

When a quantitative approach to the reduction in inclusions in the DRG was applied, it was observed that TSHA-120 treated mice experienced a statistically significant reduction in the average number of neuronal inclusions versus the GAN knockout mice that received vehicle as illustrated below.

Additionally, TSHA-120 demonstrated improved pathology of the sciatic nerve in the GAN knockout mice as shown below.

Results of Ongoing Phase 1/2 Clinical Trial

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To date, 14 patients have been intrathecally dosed and six patients have at least three years ’ worth of long-term follow up data.

The 1.8x10 14 total vg dose and

1.2x10 14 total vg cohorts demonstrated dose-related and meaningful slowing of disease progression in the first year post dosing , as illustrated below .

T he 1.8x10 14 total vg dose and 1.2x10 14 total vg cohorts demonstrated dose-related and meaningful slowing of disease progression in the first year post dosing , as illustrated below .

T he 1.8x10 14 total vg dose effected a statistically significant 8-point improvement versus the historical control over the course of a year and the 1.2x10 14 total vg dose effected a statistically significant 6-point improvement over the course of a year .

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Patients dosed with 1.8x10 14 total vg and 1.2x10 14 total vg have shown sustained dose-dependent improvements in MFM32 scores for more than three years, as illustrated below.

To date, TSHA-120 has been well-tolerated at multiple doses with no signs of significant acute or subacute inflammation, no sudden sensory changes and no drug-related or persistent elevation of transam inases.

We expect to report additional data from this trial later this year, including results from the highest dose cohort of 3.5x10 14 total vg.

We expect to report additional data from this trial in the second half of 2021 , including results from the highest dose cohort of 3.5x10 14 total vg.

Bayesian Analysis of TSHA-120

To gain further insight into the impact of TSHA-120 treatment on GAN disease progression and to add more robustness to the data, an additional analysis utilizing Bayesian statistical methodology was performed.

Bayesian analysis is a useful method that enables direct probability statements about any unknown quantity of interest to be m ade, in this case, a statement around the probability of a clinically meaningful improvement in MFM32.

Bayesian analysis is a useful method that enables direct probability statements about any unknown quantity of interest to be made, in this case, a statement around the probability of a clinically meaningful improvement in MFM32.

Bayesian analysis also enables immediate incorporation into the analysis of data gathered as the trial progresses.

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The Bayesian analysis confirms the positive findings that were seen with the frequentist approach.

As shown below, the Bayesian efficacy analysis confirmed that TSHA-120 halted patients’ pre-treatment rate of decline when compared to individual historical data.

As shown on these graphs, the 1.8x10 14 total vg dose halted patient pre-treatment rate of decline with an average annual slope improvement of 7.78 points while the 1.2x10 14 total vg dose resulted in a clinically meaningful

slowing of disease progression with an average annual slope improvement of 6.09 points.

These results are consistent with a dose respo nse relationship.

As shown below, t he Bayesian efficacy analysis confirmed that TSHA-120 halted patients’ pre-treatment rate of decline when compared to individual historical data.

These results are consistent with a dose response relationship.

Further analyses confirmed that there was a nearly 100% probability of clinically meaningful slowing of disease progression.

As shown below, the 1.8x10 14 total vg dose confirmed a virtually 100% probability of clinically meaningful slowing of disease

compared to natural history decline of GAN patients while the 1.2x10 14 total vg dose confirmed an approximat ely 85% probability of clinically meaningful slowing of disease and a virtually 100% probability of any slowing of disease.

As shown below, t he 1.8x10 14 total vg dose confirmed a virtually 100% probability of clinically meaningful slowing of disease compared to natural history decline of GAN patients while the 1.2x10 14 total vg dose confirmed an approximately 85% probability of clinically meaningful slowing of disease and a virtually 100% probability of any slowing of disease.

We intend to engage with the FDA, European Medicines Agency, Medicines and Healthcare products Regulatory Agency in the United Kingdom and the Pharmaceuticals and Medical Devices Agency in Japan to discuss the regulatory pathway for TSHA-120 and will provide an update by year-end.

Preclinical Program Updates

Vagus Nerve Redosing

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At either four or sixteen weeks after wild-type rats were injected intrathecally with TSHA-120, they received a second dose via direct injection of the AAV9 vector into the vagus nerve.

Four weeks after the second injection, tissues were assessed for expression of our re-dosed virus by

staining for the green fluorescent protein, GFP , c arried by the second AAV9 vector.

Examination of the injected vagus nerve and associated nodose ganglia showed a robust expression of GFP (as represented by the brown staining below ), indicating that in rats, AAV9 can be re-dosed through a direct nerve inj ection following intrathecal delivery.

Four weeks after the second injection, tissues were assessed for expression of our re-dosed virus by staining for the green fluorescent protein, GFP, carried by the second AAV9 vector.

Examination of the injected vagus nerve and associated nodose ganglia showed a robust expression of GFP (as represented by the brown staining below), indicating that in rats, AAV9 can be re-dosed through a direct nerve injection following intrathecal delivery.

Consistent with single-dosing studies, re-dosed animals showed expression in the medulla vagus nerve nuclei.

As shown below, GFP expression was seen in the nucleus ambiguous, which controls motor functions critical for vocalization, swallowing and

peristalsis and in the Pre-Botzinger complex, which contains respiratory rhythm generating neurons – all of which are autonomic functions compromised in GAN and many other neurological diseases.

As illustrated below, further support of how vagus nerve injection permits AAV9 redosing was demonstrated in the brain of a naïve animal shown on the left compared to an intrathecally AAV9-immunized rat on the right.

As shown below , GFP expression was seen in the nucleus ambiguous, which controls motor functions critical for vocalization, swallowing and peristalsis and in the Pre-Botzinger complex, which contains respiratory rhythm generating neurons – all of which are autonomic functions compromised in GAN and many other neurological diseases.

As illustrated below, f urther support of how vagus nerve injection permits AAV9 redosing was demonstrated in the brain of a naïve animal shown on the left compared to an intrathecally AAV9-immunized rat on the right.

Efficient GFP transduction was observed in vagal nerve fibers and in brain neurons.

In the area postrema, which has a reduced blood-barrier and is a target for vagal afferent fiber trafficking, there was reduced GFP expression in pre-immunized animals, at four and sixteen weeks, as compared to naïve animals.

This suggests that pre-existing neutralization antibodies may dampen the overall transduction of vagal nerve delivered

AAV9, but efficient transduction of autonomic relevant neurons can still be achieved.

This suggests that pre-existing neutralization antibodies may dampen the overall transduction of vagal nerve delivered AAV9, but efficient transduction of autonomic relevant neurons can still be achieved.

These results support that the vagus nerve space is immune privileged enough to allow for redosing.

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TSHA-102 was compared to unregulated full length MECP2 (AAV9/MECP2) and unregulated miniMECP2 (AAV9/miniMECP2).

TSHA-102 extended knockout survival by 56% via IT delivery.

In contrast, the unregulated miniMECP2 gene transfer failed to significantly extend knockout survival at either dose tested.

TSHA-102 extended knockout mouse model survival by 56% via IT delivery.

In contrast, the unregulated miniMECP2 gene transfer failed to significantly extend knockout mouse model survival at either dose tested.

Additionally, the unregulated full-length MECP2 construct did not demonstrate a significant extension in survival and was associated with an unacceptable toxicity profile in wild type mice.

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AAV9/MECP2- and AAV9/miniMECP2-treated wild type mice had a significantly higher mean (worse) aggregate behavioral severity score versus that observed for saline-treated mice (p <0.05;

at 6–30 and 7–27 weeks of age, respectively).

at 6–30 and 7–27 weeks of age,

respectively).

TSHA-102-treated wild type mice had a significantly lower (better) mean aggregate severity score versus those of AAV9/MECP2- and AAV9/miniMECP2-treated mice at most timepoints from 11–19 and 9–20 weeks of age, respectively.

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miRARE-mediated genotype-dependent gene regulation was demonstrated by analyzing tissue sections from wild type and knockout mice treated with AAV9 vectors given intrathecally.

TSHA-102 demonstrated regulated expression in different regions of

As shown in the graph and photos below, i n the pons and midbrain, miRARE inhibited mean MECP2 gene expression in a genotype-dependent manner as indicated by significantly fewer myc(+) cells observed in wild type mice compared to knockout mice (p<0.05), thereby dem onstrating that TSHA-102 achieved MECP2 expression levels similar to normal physiological parameters.

We plan to submit an IND / CTA for TSHA-102 in the second half of 2021 and initiate a clinical trial by the end of 2021.

When knockout mice were injected with a vector expressing the mini-MECP2 transgene with and without the miRARE element, miRARE reduced overall miniMECP2 transgene expression compared to unregulated miniMECP2 in wild type mice as shown below.

TSHA-102 demonstrated regulated expression in different regions of the brain.

As shown in the graph and photos below, i n the pons and midbrain, miRARE inhibited mean MECP2 gene expression in a genotype-dependent manner as indicated by significantly fewer myc(+) cells observed in wild type mice compared to knockout mice (p<0.05), thereby demonstrating that TSHA-102 achieved MECP2 expression levels similar to normal physiological parameters.

We plan to submit an IND / CTA for TSHA-102 in the second half of 2021, initiate a Phase 1/2 clinical trial by the end of 2021 and report clinical data by the end of 2022.

TSHA-118 for CLN1 Disease

CLN1 disease (one of the forms of Batten disease), a lysosomal storage disorder, is a progressive, fatal neurodegenerative disease with early childhood onset that has an estimated incidence of approximately 1 in 138,000 live births worldwide.

The estimated prevalence of CLN1 disease is 900 patients in the United States and European Union.

CLN1 disease is caused by loss-of-function mutations in the CLN1 gene that encodes the enzyme palmitoyl-protein thioesterase-1, or PPT1, a small glycoprotein involved in the

degradation of certain lipid-modified proteins.

Loss of function mutations in the CLN1 gene causes accumulation of these lipid-modified proteins in cells, eventually leading to aggregation, neuronal cellular dysfunction and, ultimately neuronal cell death.

In the infantile-onset form of CLN1 disease, clinical symptoms appear between six to 24 months and include rapid deterioration of speech and motor function, refractory epilepsy, ataxia and visual failure.

Infantile-onset CLN1 patients are typically poorly responsive by five years of age and remain noncommunicative until their death, which usually occurs by seven years of age.

Late-infantile-onset CLN1 disease begins between two to four years of age with initial visual and cognitive decline followed by the development of ataxia and myoclonus, or quick, involuntary muscle jerks.

Juvenile-onset CLN1 disease patients present between the ages of five to ten years old, with vision loss as a first symptom followed by cognitive decline, seizures and motor decline.

Approximately 60% of the children diagnosed with CLN1 disease in the United States present with early-onset infantile forms, with the remaining 40% experiencing later-onset childhood forms.

All currently available therapeutic approaches for patients with CLN1 disease are targeted towards the treatment of symptoms, and no disease-modifying therapies have been approved.

Gene therapy has shown promise in correcting forms of neuronal ceroid lipofuscinoses, or NCL, diseases that involve mutations in soluble enzymes, in part, due to cross-correction of neighboring non-transduced cells.

We believe that the introduction of a functional CLN1 gene using an AAV9 vector delivered intrathecally to the CNS offers the potential of a disease-modifying therapeutic approach for this disease.

TSHA-118 is a self-complementary AAV9 viral vector that expresses human codon-optimized CLN1 complementary deoxyribonucleic acid under control of the chicken ß-actin hybrid promoter.

We acquired exclusive worldwide rights to certain intellectual property rights and know-how relating to the research, development and manufacture of TSHA-118 (formerly ABO-202) in August 2020 pursuant to a license agreement with Abeona Therapeutics Inc., or Abeona.

TSHA-118 has been granted orphan drug designation, rare pediatric disease designation and fast track designation from the FDA and orphan drug designation from the European Medicines Agency for the treatment of CLN1 disease.

There are currently two natural history studies ongoing to understand more about the disease.

One is an observational study in Hamburg , Germany to assess the natural history of CLN diseases, including CLN1 disease, as part of the international DEM-CHILD database.

The second study is a combined retrospective and prospective study being run by the University of Rochester to characterize the age-at-onset of major symptoms and the relationship between age and severity.

As shown below, there are three different forms of the disease which are categorized based on the age of onset of first symptom :

infantile, late infantile, and juvenile.

As demonstrated below, symptomatology is closely related to the underlying phenotype.

Preclinical Studies

In third-party preclinical studies, evidence of improvements in behavioral outcomes, survival and restoration of PPT1 enzymatic activity was observed, which we believe supports continued development of TSHA-118.

In these studies, TSHA-118 was administered at a dose of 7.0 x 10 11 vg/mouse via intrathecal lumbar puncture to a mouse model of CLN1 disease, selected for its ability to recapitulate the severity of the human disease.

The results from this study showed that intrathecal treatment with TSHA-

118 significantly extended survival of CLN1 knockout mice, with enhanced survival and behavioral outcomes correlating with treatment at younger ages and higher doses.

As illustrated in the figure below, mice treated with TSHA-118 at four weeks or twelve weeks of age had a mean survival of 18.7 or 16.7 months, respectively, compared to approximately 8 months survival for untreated CLN1 knockout mice.

Preclinical studies suggested that early intervention is key to better outcomes in CLN1 disease.

In CLN1 knockout mice, higher doses of TSHA-118 and earlier intervention mediated stronger rescue of these mice, as demonstrated below.

In addition, TSHA-118-treated CLN1 knockout mice had sustained preservation of motor function as demonstrated below.

PPT1 enzyme activity in serum was measured at selected timepoints following TSHA-118 delivery by intrathecal administration at four, twenty or twenty-six weeks of age.

Serum was collected either at four months post-treatment or at the humane endpoint.

As shown in the figure below, heterozygous mice had approximately 50% of normal serum PPT1 activity compared to wild-type mice.

In contrast, treatment of CLN1 knockout mice with TSHA-118 resulted in supraphysiological levels of active PPT1 in the serum in comparison to wild-type and heterozygous mice.

TSHA-104 for SURF1-Associated Leigh Syndrome

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The SURF1 gene encodes the SURF1 protein, which plays a critical role in mitochondrial translation and is involved in the assembly of the cytochrome c oxidase complex.

Mutations in SURF1 lead to SURF1-associated Leigh syndrome, a recessively inherited mitochondrial disease, and are the most frequent cause of Leigh syndrome, a rapidly progressive neurological condition characterized by the degeneration of the CNS.

characterized by the degeneration of the CNS.

To date over 100 SURF1 mutations, including non-sense, frame shift and missense variants have been described in literature.

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In the majority of SURF1-deficient patients, serum lactate is elevated, and elevated levels of serum lactate have been reported in the CSF as well, indicative of mitochondrial dysfunction.

We are pursuing a gene replacement strategy with the goal of restoring mitochondrial function in pati ents with SURF1-associated Leigh syndrome caused by loss-of-function mutations.

We are pursuing a gene replacement strategy with the goal of restoring mitochondrial function in patients with SURF1-associated Leigh syndrome caused by loss-of-function mutations.

We are constructing TSHA-104 from a codon-optimized version of the human SURF1 gene packaged within a self-complementary AAV9 viral vector under the control of a CBh promoter.

We plan to submit an IND / CTA for TSHA-104 in the second half of 2021 and initiate a Phase 1/2 clinical trial by the end of 2021.

We plan to submit an IND / CTA for TSHA-104 in the second half of 2021, initiate a Phase 1/2 clinical trial by the end of 2021 and report biomarker data in the first half of 2022.

We have received orphan drug designation and rare pediatric disease designation from the FDA for TSHA-104 for the treatment of SURF1-associated Leigh syndrome.

Preclinical Studies

Data from preclinical studies suggest that functional gene replacement strategy could restore mitochondrial functions in SURF1-associated Leigh syndrome caused by SURF1 loss-of-function mutations, which we believe supports continued development of TSHA-104.

In these studies, TSHA-104 was administered at two dose levels via intrathecal lumbar puncture to a knock-out mouse model of SURF1-associated Leigh syndrome.

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TSHA-104 also induced SURF1 expression in the brain and partially rescued COX activity in a tissue specific manner, as shown below.

As shown below, TSHA-104 restored elevation of blood lactate on exhaustive exercise in the SURF1 knock-out mice.

Improvement in MTC01, which is part of the assembled COX1 complex, was dose dependent in the treated mice as demonstrated below.

In addition, there was a correlation between MTCO1 assembly and COX activity , as demonstrated below.

When examining long-term rescue, TSHA-104 restored elevation of blood lactate on exhaustive exercise in the SURF1 knock-out mice.

Natural H istory S tudy D ata

A detailed retrospective chart review natural history study published in 2013 included 44 cases with SURF1 deficiency.

Of the 36 deceased patients with known causes of death, the cause was central respiratory failure in 80% of the patients.

Seven patients survived beyond 10 years of age.

Of these patients, six had neurological symptoms such as ataxia and motor developmental delay.

Of note, gastrointestinal symptoms were not the prominent presenting feature in these cases.

Furthermore, these six patients also did not experience developmental regression.

Literature searches identified 98 SURF1-deficient cases with available survival data, which were pooled together with the data from the 44 cases.

The Kaplan-Meier analysis below compared the survival experience of 142 SURF1-deficient cases to two other groups with Leigh syndrome due to nuclear gene mutations (56 with LRPPRC deficiency and 63 with nuclear-encoded complex I-deficient Leigh syndrome/“Leigh- like” disease).

As indicated in the survival curve, the disease is progressive with significant morbidity, involves impairment in development and cognition causes seizures and results in a median survival length of 5.4 years.

Exploratory Study to Examine COX1 Activity and Clinical Phenotype

The underlying pathophysiology of SURF1 deficiency is linked to the deficiency of mitochondrial activity, which is centered around the formation of a COX complex and the resulting activity of COX1.

We completed an exploratory study that examined the fibroblasts from various patients who were categorized as typical or severe Leigh syndrome versus patients who had a milder presentation, of Leigh syndrome to examine the difference in COX activity and the relevance of COX1 as a biomarker for the disease.

As demonstrated below, preliminary data indicated that mild patients had slightly higher COX activity than severe patients, which suggests that a small increase in cytochrome oxidase activity could benefit patients.

In addition, a reduction in COX activity correlated with disease worsening, as indicated by patient fibroblast data below.

TSHA-113 for Tauopathies

We are developing TSHA-113 for the treatment of tauopathies.

Tau accumulation predicts neurodegeneration in Alzheimer’s disease, and the propagation of tau aggregates is thought to mediate the progression of several neurodegenerative diseases, including progressive supranuclear palsy, corticobasal degeneration, behavioral variant frontotemporal degeneration, chronic traumatic encephalopathy, frontotemporal dementia and parkinsonism linked to chromosome 17.

Tau accumulation predicts neurodegeneration in Alzheimer’s disease, and the propagation of tau aggregates is thought to mediate the progression of several neurodegenerative diseases, including

progressive supranuclear palsy, corticobasal degeneration, behavioral variant frontotemporal degeneration, chronic traumatic encephalopathy, frontotemporal dementia and parkinsonism linked to chromosome 17.

As a result, multiple strategies are currently being tested to reduce tau and ameliorate the effects of these diseases.

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SLC13A5 deficiency is caused by bi-allelic loss-of function

m utations in the SLC13A5 gene, which codes for a sodium dependent citrate transporter, or NaCT, that is largely expressed in the brain and liver.

mutations in the SLC13A5 gene, which codes for a sodium dependent citrate transporter, or NaCT, that is largely expressed in the brain and liver.

To date, all tested mutations result in no or a greatly reduced amount of the citrate in the cells.

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Administration of TSHA-105 resulted in a significant, sustainable decrease of plasma citrate levels up to 3-months post-injection, as shown below.

These results suggest that gene replacement therapy can restore citrate transport and that citrate may be used as a biomarker for the disease and following treatment.

In addition, in ongoing EEG studies, TSHA-105 normalized EEG activity and decreased the number of seizures in knockout mice in comparison vehicle-treated controls as shown below.

TSHA-105 also reduced seizure susceptibility in SLC13A5 knockout mice as shown below.

TSHA-105 also reduced seizures and associated deaths in SLC13A5 knockout mice , as shown below.

TSHA-103 for SLC6A1 Haploinsufficiency Disorder

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Clinician education and expanded use of genetic screening panels that include SLC6A1 will likely lead to increased identification of individuals with these mutations.

Our Solution:

We are developing TSHA-103, a genetic epilepsy product candidate, for the treatment of SLC6A1 haploinsufficiency disorder.

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In the SLC6A1 knockout mouse model, TSHA-103 improved nesting and EEG, activity, as shown below.

In SLC6A1 knockout and heterozygous mouse models, TSHA-103 reduced spike train activity, which is a recording of abnormal neuronal activity associated with seizures, as shown below.

In SLC6A1 knockout and heterozygous mouse models, neonatal ICV administration of TSHA-103 rescued abnormal EEG.

TSHA-106 for Angelman Syndrome

We are developing TSHA-106 for the treatment of Angelman syndrome, a neurodevelopmental disorder caused by a maternal deficiency of the UBE3A gene.

Angelman syndrome is characterized by profound developmental delay, ataxia and gait disturbance, sleep disorder, seizures, heightened anxiety and aggression and severe speech impairments.

Angelman syndrome affects approximately one per 12,000 to 20,000 patients worldwide.

The estimated prevalence of Angelman syndrome is 55,000 patients in

the United States and European Union.

There are currently no approved therapies for the treatment of Angelman syndrome.

Current treatment focuses on supportive care and managing medical and developmental issues.

Angelman syndrome is an imprinting disorder in which the maternal gene is deficient and the paternal copy of UBE3A is intact but silenced by a long non-coding RNA, UBE3A antisense transcript, or UBE3A -ATS.

Delivery of an ASO targeting UBE3A-ATS showed promising results in ameliorating Angelman syndrome symptoms in a transgenic mouse model.

There are two approaches to treat this genetic abnormality.

The first is to replace the maternal chromosome, or the maternal allele.

The second approach is to use a silencing mechanism, or a small interfering RNA, to silence the noncoding strip of RNA that binds to the paternal allele and causes silencing of the gene.

We are examining both approaches.

We are developing TSHA-106 to target the UBE3A -ATS transcript through shRNA knock-down with an AAV-based strategy to achieve broad distribution of the shRNA expression cassette across the entire CNS following a single intrathecal dose.

License Agreements

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We are obligated to pay Abeona up to $26.0 million in regulatory-related milestones and up to $30.0 million in sales-related milestones per licensed product and high single-digit royalties on net sales of licensed products.

Royalties are payable on a licensed product-by-licensed product and country-by-country basis until the latest of the expiration or revocation or complete rejection of the last licensed patent covering such licensed product in the country where the licensed product is sold, the loss of market exclusivity in such country where the product is sold, or, if no licensed product exists in such country and no market exclusivity exists in such

country, ten years from first commercial sale of such licensed product in such country.

In addition, concurrent with the Abeona C LN1 Agreement we entered into a purchase and reimbursement agreement with Abeona, pursuant to which we purchased specified inventory from Abeona and reimbursed Abeona for certain research and development costs previously incurred for total consideration of $4.0 million paid in fiscal year 2020.

In addition, concurrent with the Abeona CLN1 Agreement we entered into a purchase and reimbursement agreement with Abeona, pursuant to which we purchased specified inventory from Abeona and reimbursed Abeona for certain research and development costs previously incurred for total consideration of $4.0 million paid in fiscal year 2020.

The Abeona CLN1 Agreement expires on a country-by-country and licensed product-by-licensed product basis upon the expiration of the last royalty term of a licensed product.

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We have been actively monitoring the COVID-19 situation and its impact globally.

Our financial results for the quarter ended March 31, 2021 were not impacted by COVID-19.

We believe the remote working arrangements and travel restrictions imposed by various governmental jurisdictions have had limited impact on our ability to maintain internal operations during the quarter ended March 31, 2021.

The extent to which COVID-19 may impact our business and operations will depend on future developments that are highly uncertain and cannot be predicted with confidence, such as the duration of the outbreak, the effectiveness of actions to contain and treat COVID-19 and the efficacy, availability and adoption of vaccines, both domestically and globally.

Although we have not experienced any material business shutdowns or interruptions due to the COVID-19 pandemic, we cannot predict the scope and severity of any potential business shutdowns or disruptions in the future, including to our planned clinical trials and preclinical studies.

Our financial results for the six months ended June 30, 2021 were not impacted by COVID-19.

The extent to which COVID-19 may impact our business and operations will depend on future developments that are highly uncertain and cannot be predicted with confidence, such as the duration of the outbreak, the effectiveness of actions to contain and treat COVID-19, the efficacy, availability and adoption of vaccines, both domestically and globally, and the impact of new variants or mutations of the coronavirus, such as the Delta variant.

Although we have not experienced any material business

shutdowns or interruptions due to the COVID-19 pandemic, we cannot predict the scope and severity of any potential business shutdowns or disruptions in the future , including to our planned clinical trials and preclinical studies.

Any such shutdowns or other business interruptions could result in material and negative effects to our ability to conduct our business in the manner and on the timelines presently planned, which could have a material adverse impact on our business, results of operation and financial condition .

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employee-related expenses, including salaries, bonuses, benefits, stock-based compensation, other related costs for those employees involved in research and development efforts;

license maintenance fees and milestone fees incurred in connection with various license agreements;

external research and development expenses incurred under agreements with consultants, contract research organizations, or CROs, investigative sites and consultants to conduct our preclinical studies;

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We also anticipate that our general and administrative expenses will increase as a result of payments for accounting, audit, legal, consulting services, as well as costs associated with maintaining compliance with Nasdaq listing rules and SEC requirements, director and officer liability insurance, investor and public relations activities and other expenses associated with operating as a public company.

We anticipate the additional costs for these services will increase our general and administrative expenses by between $6.0 million and $7.0 million on an annual basis, including the cost of director and officer liability insurance.

We anticipate the additional costs for these services will substantially increase our general and administrative expenses by between $6.0 million and $7.0 million on an annual basis, including the cost of director and officer liability insurance.

Results of Operations

Results of Operations for the Three Months Ended March 31, 2021 and for the Three Months Ended March 31, 2020

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

Results of Operations for the Three Months Ended June 30, 2021 and for the Three Months Ended June 30, 2020

The following table summarizes our results of operations for the three months ended June 30, 2021 and the three months ended June 30, 2020 (in thousands):

For the Three Months

Ended March 31, 2021

For the Three Months Ended March 31, 2020

Ended June 30, 2021

For the Three Months

Ended June 30, 2020

Operating expenses:

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Interest expense

Total other income, net

Total other expense, net

Research and Development Expenses

Research and development expenses were $23.9 million for the three months ended March 31, 2021, compared to $5.5 million for the three months ended March 31, 2020.

Research and development expenses were $30.6 million for the three months ended June 30, 2021, compared to $3.1 million for the three months ended June 30, 2020.

The $27.5 million increase was primarily attributable to an increase of $10.3 million of expenses incurred in research and development manufacturing and other raw material purchases, which included cGMP batches produced by Catalent and UT Southwestern.

Additionally, we incurred a year-over-year increase of $3.1 million in research and development licensing fees driven by the acquisition of exclusive worldwide rights to TSHA-120, for the treatment of GAN.

We incurred an increase in employee compensation and expenses of $5.2 million, which included $1.6 million of non-cash stock-based compensation.

We also incurred an increase of $2.4 million in sponsored research agreement expenses for our various product candidates.

Additionally, we incurred an increase of $2.7 million for research and development consulting fees including technical operations support and translational sciences, $0.9 million for regulatory and clinical consulting, and other research and development of $1.0 million.

We incurred an increase in employee compensation expenses of $8.5 million, which included $2.2 million of non-cash stock-based compensation, and $8.7 million in third-party research and development expenses, which includes clinical trial CRO activities, GLP toxicology studies, and consulting for regulatory and clinical studies.

General and Administrative Expenses

General and administrative expenses were $8.2 million for the three months ended March 31, 2021, compared to less than $0.1 million for the three months ended March 31, 2020.

The increase of approximately $8.1 million was primarily attributable to $4.2 million of incremental compensation expense, which included $2.0 million of non-cash stock-based compensation, $1.5 million of additional consulting and professional fees, including patient advocacy consulting fees and personnel recruiting expenses.

We also incurred an increase of $0.9 million of professional fees, which included $0.7 million in legal expenses related to general corporate matters, $0.8 million related to insurance expenses, $0.3 million of marketing expenses, and other general and administrative expenses of $0.5 million.

General and administrative expenses were $10.1 million for the three months ended June 30, 2021, compared to $0.9 million for the three months ended June 30, 2020.

The increase of approximately $9.2 million was primarily attributable to $4.7 million of incremental compensation expense, which included $2.3 million of non-cash stock-based compensation.

We also incurred an increase of $4.5 million in professional fees related to legal, insurance, investor relations/communications, accounting, personnel recruiting and patient advocacy activities.

Results of Operations for the Six Months Ended June 30, 2021 and for the Six Months Ended June 30, 2020

The following table summarizes our results of operations for the six months ended June 30, 2021 and the six months ended June 30, 2020 (in thousands):

For the Six Months

Ended June 30, 2021

For the Six Months

Ended June 30, 2020

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense):

Change in fair value of preferred stock tranche liability

Interest income

Interest expense

Total other expense, net

Research and Development Expenses

Research and development expenses were $54.5 million for the six months ended June 30, 2021, compared to $8.6 million for the six months ended June 30, 2020.

The $45.9 million increase was primarily attributable to an increase of $15.2 million of expenses incurred in research and development manufacturing and other raw material purchases, which included cGMP batches produced by Catalent and UT Southwestern.

We also incurred an increase in employee compensation and expenses of $13.8 million, which included $3.8 million of non-cash stock-based compensation.

License fees increased by $3.0 million due to the acquisition of exclusive worldwide rights to TSHA-120, for the treatment of GAN.

We also incurred an increase of $8.0 million of third-party research and development consulting fees, primarily related to GLP toxicology studies and clinical study CRO activities, and $4.7 million in consulting for regulatory and clinical studies.

Finally, sponsored research agreement expenses increased by $1.2 million.

General and Administrative Expenses

General and administrative expenses were $18.4 million for the six months ended June 30, 2021, compared to $1.0 million for the six months ended June 30, 2020.

The increase of approximately $17.4 million was primarily attributable to $8.9 million of incremental compensation expense, which included $4.4 million of non-cash stock-based compensation.

We also incurred an increase of $7.0 million in professional fees related to legal, insurance, investor relations/communications, accounting, personnel recruiting and patient advocacy activities and an increase is $1.5 million in other expenses.

Other Income ( Expense )

Change in Fair Value of Preferred Stock Tranche Liability

On March 4, 2020, the Company entered into a purchase agreement (the “Series A Purchase Agreement”) providing for a private placement of up to 10,000,000 shares of Series A convertible preferred stock at an original issuance price of $3.00 per share, subject to separate closings, including:

(1) 6,000,000 shares at the initial closing on March 4, 2020, and (2) 2,000,000 shares at each of two subsequent closings triggered by the achievement of specific clinical milestones.

The Series A Purchase Agreement obligated the Company to issue and sell and the Series A investors to purchase up to a total of 4,000,000 additional shares of Series A convertible preferred stock (the “Milestone Shares”) at the same price per share upon the achievement of certain defined clinical milestones (the “tranche liability”).

We determined that our obligation to issue, and the investors’ right to purchase, additional shares of Series A convertible preferred stock pursuant to the milestone closings represented a freestanding financial instrument, or the tranche liability.

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We concluded that the tranche liability met the definition of a freestanding financial instrument, as it was legally detachable and separately exercisable from the initial closing of the Series A convertible preferred stock.

On March 31, 2020 the tranche liability was remeasured and a non-cash gain of $0.2 million was recorded in other income, net.

On June 30, 2020, ahead of the anticipated closing of the Series B convertible preferred stock financing at an original issuance price of $17.00 per share on July 2, 2020, certain Series A investors elected to exercise in full their options to purchase their pro-rata portion of the Milestone Shares prior to our achievement of the clinical milestones and purchased 200,000 shares of Series A convertible preferred stock.

We remeasured the fair value of the entire tranche liability at June 30, 2020, and recognized a non-cash expense of approximately $17.0 million.

Liquidity and Capital Resources

Since our inception, we have not generated any revenue and have incurred significant operating losses.

As of March 31, 2021, we had cash and cash equivalents of $228.7 million.

As of June 30, 2021, we had cash and cash equivalents of $197.4 million.

We have funded our operations through equity financings, raising an aggregate of $307.0 million in gross proceeds from our initial public offering and private placements of convertible preferred stock.

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In September 2020, we raised gross proceeds of $181.0 million in our initial public offering.

On August 12, 2021, or the Closing Date, we entered into a Loan and Security Agreement, or the Term Loan Agreement, with the lenders party thereto from time to time, or the Lenders and Silicon Valley Bank, as administrative agent and collateral agent for the Lenders, or the Agent.

The Term Loan Agreement provides for (i) on the Closing Date, $40.0 million aggregate principal amount of term loans available through December 31, 2021, (ii) from January 1, 2022 until September 30, 2022, an additional $20.0 million term loan facility available at the Company’s option upon having three distinct and active clinical stage programs at the time of draw, (iii) from October 1, 2022 until March 31, 2023, an additional $20.0 million term loan facility available at our option upon having three distinct and active clinical stage programs at the time of draw and (iv) from April 1, 2023 until December 31, 2023, an additional $20.0 million term loan facility available upon approval by the Agent and the Lenders, or, collectively, the Term Loans.

We drew $30.0 million in term loans on the Closing Date.

The loan repayment schedule provides for interest only payments until August 31, 2024, followed by consecutive monthly payments of principal and interest.

All unpaid principal and accrued and unpaid interest with respect to each term loan is due and payable in full on August 1, 2026.

Funding Requirements

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If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.

We believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital requirements into 2023.

Assuming full access to the $100.0 million in term loans under the Term Loan Agreement we entered into on August 12 , 2021, we expect we will be able to fund our operating expenses and capital requirements into the second half of 2023 .

We intend to devote our existing cash and cash equivalents to the clinical and preclinical development of our product candidates.

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To the extent that we raise additional capital through the sale of equity or convertible debt securities, the terms of these equity securities or this debt may restrict our ability to operate.

Any future debt financing and equity financing, if available, may involve agreements that include covenants limiting and restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, entering into profit-sharing or other arrangements or declaring dividends.

The Term Loan Agreement contains negative covenants, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness and dividends and other distributions.

Any future additional debt financing and equity financing, if available, may involve agreements that include covenants limiting and restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, entering into profit-sharing or other arrangements or declaring dividends.

If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us.

We are continuing to assess the effect that the COVID-19 pandemic may have on our business and operations.

The extent to which COVID-19 may impact our business and operations will depend on future developments that are highly uncertain and cannot be predicted with confidence, such as the duration of the outbreak, the duration and effect of business disruptions and the short-term effects and ultimate effectiveness of the travel restrictions, quarantines, social distancing requirements and business closures in the United States and other countries to contain and treat the disease and the efficacy, availability and adoption of vaccines, both domestically and globally.

While the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a continued and growing pandemic could result in significant disruption of global financial markets, reducing our ability to

access capital, which could in the future negatively affect our liquidity.

In addition, a recession or marke t correction resulting from the spread of COVID-19 could materially affect our business and the value of our common stock.

The following table shows a summary of our cash flows for the three months ended March 30, 2021 and 2020 (in thousands):

For the Three Months

Ended March 31, 2021

For the Three Months Ended March 31, 2020

The extent to which COVID-19 may impact our business and operations will depend on future developments that are highly uncertain and cannot be predicted with confidence, such as the duration of the outbreak, the duration and effect of business disruptions and the short-term effects and ultimate effectiveness of the travel restrictions, quarantines, social distancing requirements and business closures in the United States and other countries to contain and treat the disease, the efficacy, availability and adoption of vaccines, both domestically and globally, and the impact of new variants or mutations of the coronavirus, such as the Delta variant .

While the potential economic impact brought by, and the duration of, the COVID-19 pandemic may be difficult to assess or predict, a continued and growing pandemic could result in significant disruption of global financial markets, reducing our ability to access capital, which could in the

future negatively affect our liquidity.

In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and the value of our common stock.

The following table shows a summary of our cash flows for the six months ended June 30, 2021 and 2020 (in thousands):

For the Six Months Ended June 30, 2021

For the Six Months Ended June 30, 2020

Net cash used in operating activities

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Operating Activities

For the three months ended March 31, 2021, our net cash used in operating activities of $22.0 million primarily consisted of a net loss of $32.0 million, primarily attributable to our spending on research and development expenses.

For the six months ended June 30, 2021, our net cash used in operating activities of $44.9 million primarily consisted of a net loss of $73.0 million, primarily attributable to our spending on research and development expenses.

The net loss of $73.0 million was partially offset by adjustments for non-cash items, primarily the up-front license fee of $5.5 million to HHF related to the acquisition of TSHA-120 and stock-based compensation of $8.1 million.

For the three months ended March 31, 2020, our net cash used in operating activities of $1.7 million primarily consisted of a net loss of $5.4 million, primarily attributable to spending on research and development expenses.

The net loss of $5.4 million was partially offset by the upfront fee to acquire the license rights pursuant to the Queen’s University Agreement for $3.0 million.

The $73.0 million net loss was also partially offset by a $14.1 million source of cash provided by operating assets and liabilities, primarily resulting from an increase in accounts payable and accrued expenses.

For the six months ended June 30, 2020, operating activities used $4.2 million of cash.

Net cash used in operating activities for the six months ended June 30, 2020 was primarily attributable to a $26.7 million net loss and offset by $20.0 million of non-cash items, primarily driven by a change in fair value of our preferred stock tranche liability of $17.0 million liability related to the issuance of Series A convertible preferred stock and the upfront payment to acquire the license rights pursuant to the Queen’s University Agreement for $3.0 million, which was recorded as a component of research and development expenses.

The $26.7 million net loss was also partially offset by a $2.5 million source of cash provided by operating assets and liabilities, primarily resulting from an increase in accounts payable and accrued expenses.

Investing Activities

During the three months ended March 31, 2021, investing activities used $0.5 million of cash attributable to capital expenditures related to computer and lab equipment.

No investing activities took place in the three months ended March 31, 2020.

During the six months ended June 30, 2021, investing activities used $9.0 million of cash attributable to the up front license fee payment of $5.5 million to acquire exclusive worldwide rights to TSHA-120, for the treatment of GAN, and capital expenditures related to our in-house manufacturing facility and office space.

During the six months ended June 30, 2020, investing activities used $3.0 million of cash attributable to the upfront payment to acquire the license rights pursuant to the Queen’s University Agreement of $3.0 million.

Financing Activities

During the three months ended March 31, 2020, financing activities provided $18.0 million attributable to the net proceeds from the sale of our Series A convertible preferred stock.

No financing activities took place during the three months ended March 31, 2021.

During the six months ended June 30, 2020, financing activities provided $18.4 million of cash, which was primarily attributable to the issuance of 6,200,000 shares of our Series A convertible preferred stock in exchange for gross proceeds of $18.6 million, net of the payment of issuance costs of approximately $0.3 million.

In January 2020, we also entered into two secured promissory notes with a related party, our President and Chief Executive Officer, RA Session II, for an aggregate of $1.67 million.

During March 2020, we repaid $1.65 million of the notes.

The remaining balance of approximately $28,000 was repaid in July 2020.

No financing activities took place during the six months ended June 30, 2021.

Off-Balance Sheet Arrangements

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See Note 2 to our unaudited condensed consolidated financial statements located in “Part I – Financial Information, Item 1.

Financial Statements” in this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements applicable to our consolidated financial statements.

Financial Statements” in this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements applicable to our condensed consolidated financial statements.

Emerging Growth Company and Smaller Reporting Company Status

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Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards.

Thus, an emerging growth company

can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

We elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accou nting standards until they would apply to private companies.

Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

We elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.

In addition, as an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies.

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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