What changed in this filing

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Item 1. Financial Statements

2021-11-10 compared with 2021-08-13 · 178 added, 240 removed, 1034 unchanged (29% of the section changed)

3 unchanged sentences

(in thousands, except share and par value amounts)

September 30,

Current assets:

33 unchanged sentences

Preferred stock:

Undesignated preferred stock, $0.0001 par value, 10,000,000 shares authorized, no shares issued or outstanding as of June 30, 2021 (unaudited);

Undesignated preferred stock, $0.0001 par value, 10,000,000 shares authorized, no shares issued or outstanding as of September 30, 2021;

9,961,846 shares authorized, no shares issued or outstanding as of December 31, 2020

Common stock, $0.0001 par value, 250,000,000 shares authorized, 34,977,923 shares issued and outstanding as of June 30, 2021 (unaudited);

Common stock, $0.0001 par value, 250,000,000 shares authorized, 35,317,313 shares issued and outstanding as of September 30, 2021;

4,537,321 shares issued and outstanding as of December 31, 2020

13 unchanged sentences

(in thousands, except share and per share amounts)

Three months ended June 30,

Six months ended June 30,

$ 11,986  

$ 6,908  

$ 24,103  

$ 8,997  

Three months ended September 30,

Nine months ended September 30,

Operating expenses:

4 unchanged sentences

Total operating expenses

11,310  

10,179  

Income (loss) from operations

12,793  

(Loss) income from operations

Other income (expense):

Gain (loss) on extinguishment of debt

( 16,096 )  

Loss on extinguishment of debt

Interest expense related to amortization of debt issuance costs and discount

( 574 )  

( 150 )  

Interest expense on principal

( 16 )  

( 1,197 )  

( 215 )  

Fair value adjustment related to derivative and warrant liability

( 394 )  

( 424 )  

Interest and other (expense) income, net

Interest and other income (expense), net

Total other income (expense)

( 1,734 )  

( 16,886 )  

Income (loss) before income taxes

( 4,093 )  

Income tax benefit (expense)

Net income (loss)

$ 6,203  

$ ( 4,093 )  

Loss before income taxes

Income tax benefit

Deemed dividend

( 16,898 )  

( 54,342 )  

Net (loss) income attributable to common stockholders

$ ( 10,695 )  

$ ( 58,435 )  

Basic net income (loss) per share of common stock:

Net income (loss)

$ 0.18  

$ 0.21  

$ ( 0.17 )  

Net (loss) income attributable to common stockholders

$ ( 0.40 )  

$ 0.21  

$ ( 2.42 )  

Diluted net income (loss) per share of common stock:

Net (loss) income attributable to common stockholders

$ ( 0.40 )  

$ 0.21  

$ ( 2.42 )  

Net loss attributable to common stockholders

Basic net loss per share of common stock:

Net loss attributable to common stockholders

Diluted net loss per share of common stock:

Net loss attributable to common stockholders

Weighted average number of shares of common stock outstanding:

29,174,565  

3,947,656  

24,187,484  

3,476,107  

29,174,565  

3,947,728  

24,187,484  

3,476,107  

See accompanying notes to unaudited condensed financial statements

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Balance as of January 1, 2021

$ 192,062  

$ ( 258,474 )  

( 10,296 )  

Stock-based compensation expense

Issuance of common stock in connection with Public Offering, net of discounts and commissions

49,284  

49,285  

Issuance of common stock in connection with the exercise of warrants in the January 2021 Inducement Transaction, net of discounts and commissions

40,390  

40,391  

Issuance of common stock in connection with the exercise of common stock warrants

25,593  

Fair value of warrants issued in connection with the Exchange Agreement

15,990  

Fair value of Series B-2 Preferred Stock issued in accordance with the Exchange Agreement

29,056  

Issuance of common stock as a result of Series B-2 Preferred Stock conversion

( 29,056 )  

29,055  

Fair value of warrants issued in connection with the January 2021 Inducement Transaction

38,437  

Deemed dividend related the January 2021 Inducement Transaction

( 37,444 )  

Offering expenses charged to equity

( 1,106 )  

Issuance of common stock in exchange for consulting services

Balance as of March 31, 2021

353,018  

( 268,770 )  

84,251  

Stock-based compensation expense

Issuance of common stock in connection with the exercise of warrants in the June 2021 Inducement Transaction, net of discounts and commissions

35,455  

Issuance of common stock in connection with the exercise of common stock warrants

Fair value of warrants issued in connection with the June 2021 Inducement Transaction

17,089  

Deemed dividend related the June 2021 Inducement Transaction

( 16,898 )  

Offering expenses charged to equity

( 18 )  

Issuance of common stock in exchange for consulting services

Balance as of June 30, 2021

$ 393,227  

$ ( 262,567 )  

$ 130,663  

Stock-based compensation expense

Issuance of common stock in connection with the exercise of warrants in the June 2021 Inducement Transaction, net of discounts and commissions

Issuance of common stock in connection with the exercise of common stock warrants

Issuance of common stock in exchange for consulting services

Balance as of September 30, 2021

See accompanying notes to unaudited condensed financial statements

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Balance as of June 30, 2020

Stock-based compensation expense

Issuance of common stock in connection with Deerfield Optional Conversion Feature

Issuance of common stock in exchange for consulting services

Balance as of September 30, 2020

See accompanying notes to unaudited condensed financial statements

2 unchanged sentences

(in thousands)

Six months ended June 30,

Nine months ended September 30,

Cash flows from operating activities:

16 unchanged sentences

Other liabilities

Net cash provided by operating activities

Net cash provided by (used in) operating activities

Cash flows from investing activities:

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Food and Drug Administration (the "FDA") approved drugs as well as to generate prodrug versions of existing compounds that may have applications for new disease indications.

The Company's product candidate pipeline is focused on the high need areas of attention deficit hyperactivity disorder ("ADHD") and stimulant use disorder ("SUD").

The Company has received FDA approval for APADAZ, an immediate-release combination product containing benzhydrocodone, a prodrug of hydrocodone and acetaminophen. On March 2, 2021, the Company announced that the FDA approved the new drug application ("NDA") for AZSTARYS (formerly referred to as KP415 ), a once-daily product for the treatment of ADHD in patients age six years and older.

The Company's additional clinical product candidate for the treatment of ADHD include 

KP484, and the Company's clinical product candidate for the treatment of SUD includes KP879.

The Company's prodrug product candidate pipeline is focused on the high need areas of attention deficit hyperactivity disorder ("ADHD"), stimulant use disorder ("SUD") and central nervous system ("CNS") rare diseases, including idiopathic hypersomnia ("IH").

In addition, the Company has received FDA approval for AZSTARYS (formerly referred to as KP415 ), a new once-daily treatment for ADHD in patients age six years and older, and for APADAZ, an immediate-release combination product containing benzhydrocodone, a prodrug of hydrocodone, and acetaminophen. 

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S.

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Operating results for the 

three and six months ended June 30, 2021 

three and nine  months ended September 30, 2021 

not  necessarily indicative of the results that 

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Entry into 2020 ELOC Agreement

In February 2020, the Company entered into a purchase agreement for an equity line of credit (the “2020 ELOC Agreement”) with Lincoln Park which provides that, upon the terms and subject to the conditions and limitations set forth therein, the Company may sell to Lincoln Park up to $ 4.0  million of shares of common stock from time to time over the 

In February 2020, the Company entered into a purchase agreement for an equity line of credit (the “2020 ELOC Agreement”) with Lincoln Park Capital, LLC ("Lincoln Park") which provides that, upon the terms and subject to the conditions and limitations set forth therein, the Company may sell to Lincoln Park up to $ 4.0  million of shares of common stock from time to time over the 

12 -month term of the 2020 ELOC Agreement, and upon execution of the 2020 ELOC Agreement the Company issued an additional 19,289 shares of common stock to Lincoln Park as commitment shares in accordance with the closing conditions within the 2020 ELOC Agreement. Concurrently with entering into the 2020 ELOC Agreement, the Company also entered into a registration rights agreement with Lincoln Park (the “2020 ELOC Registration Rights Agreement”) pursuant to which the Company agreed to register the sale of the shares of common stock that have been and may be issued to Lincoln Park under the 2020 ELOC Agreement pursuant to the Company’s existing shelf registration statement on Form S- 3  or a new registration statement.

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8, 2021 under the ticker symbol “KMPH”.

Entry into 2021 ATM Agreement

On July 

2, 2021, the Company entered into an equity distribution agreement (the "2021 ATM Agreement") with JMP Securities LLC ("JMP") and RBC Capital Markets, LLC ("RBCCM") under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock having an aggregate offering price of up to $ 75.0 million through JMP and RBCCM as its sales agents.

The issuance and sale, if any, of common stock by the Company under the 2021 ATM Agreement will be made pursuant to a registration statement on Form S- 3.

JMP and RBCCM may sell the common stock by any method permitted by law deemed to be an “at the market offering”

as defined in Rule 

415 of the Securities Act of 1933, as amended.

JMP and RBCCM will use commercially reasonable efforts to sell the common stock from time to time, based upon instructions from the Company (including any price, time or size limits or other customary parameters or conditions the Company may impose).

The Company will pay JMP and RBCCM a commission equal to 3.0 % in the aggregate of the gross sales proceeds of any common stock sold through JMP and RBCCM under the 2021 ATM Agreement.

The Company filed a registration statement on Form S- 3 covering the sale of the shares of its common stock up to $ 350.0 million, $ 75.0 million of which was allocated to the sales of the shares of common stock issuable under the 2021 ATM Agreement, which was declared effective on July 12, 2021.

As of September 30, 2021, no shares have been issued or sold under the 2021 ATM Agreement.

Summary of Significant Accounting Policies

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In September 2019, the Company entered into a Collaboration and License Agreement (the “KP415  License Agreement”) with Commave Therapeutics SA, an affiliate of Gurnet Point Capital (“Commave”).

Under the KP415  License Agreement, the Company granted to Commave an exclusive, worldwide license to develop, manufacture and commercialize the Company’s product candidates containing serdexmethylphenidate (“SDX”) and d-methylphenidate (“d-MPH”), including AZSTARYS, KP484, and, at the option of Commave, KP879, KP922 or any other product candidate developed by the Company containing SDX and developed to treat ADHD or any other central nervous system disorder (the “Additional Product Candidates”

Under the KP415  License Agreement, the Company granted to Commave an exclusive, worldwide license to develop, manufacture and commercialize the Company’s product candidates containing SDX and d-methylphenidate (“d-MPH”), including AZSTARYS, KP484, and, at the option of Commave, KP879, KP922 or any other product candidate developed by the Company containing SDX and developed to treat ADHD or any other CNS disorder (the “Additional Product Candidates”

and, collectively with AZSTARYS and KP484, the “Licensed Product Candidates”).

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Commave is obligated to make such royalty payments on a product-by-product basis until expiration of the Royalty Term (as defined in the KP415  License Agreement) for the applicable product.

In May 2020, the FDA accepted the Company’s NDA for AZSTARYS.

Per the KP415 License Agreement, the Company received a regulatory milestone payment of $ 5.0  million following the FDA’s acceptance of the AZSTARYS NDA.

In addition, the Company is entitled to payments from Commave of up to $420.0  million in the aggregate, conditioned upon the achievement of certain U.S.

sales milestones, which are dependent upon, among other things, the timing of approval for a new drug application for AZSTARYS and its final approved label, if any.

Further, Commave will pay the Company quarterly, tiered royalty payments ranging from a percentage in the high single digits to mid-twenties of Net Sales (as defined in the KP415  License Agreement) in the U.S.

and a percentage in the low to mid-single digits of Net Sales in each country outside of the U.S., in each case subject to specified reductions under certain conditions as described in the KP415  License Agreement.

Commave also agreed to be responsible for and reimburse the Company for all of the development, commercialization and regulatory expenses incurred on the licensed products, subject to certain limitations as set forth in the KP415  License Agreement.

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The KP415  License Agreement also established a joint steering committee, which monitors progress of the development of both AZSTARYS and KP484.

Subject to the oversight of the joint steering committee, the Company otherwise retains all responsibility for the conduct of all regulatory activities required to obtain new drug application approval of AZSTARYS and KP484;

Subject to the oversight of the joint steering committee, the Company otherwise retains all responsibility for the conduct of all regulatory activities required to obtain new drug application approval of AZSTARYS and KP484;

provided that Commave shall be the sponsor of any clinical trials conducted by the Company on behalf of Commave.

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The consideration allocated to the grant of the exclusive, worldwide license was $10.0  million, which reflects the standalone selling price.

The Company utilized the adjusted market assessment approach to determine this standalone selling price which included analyzing prospective offers received from various entities throughout our licensing negotiation process as well as the consideration paid to other competitors in the market for a similar type transaction.

The Company determined that the intellectual property licensed under the KP415  License Agreement represented functional intellectual property and it has significant standalone functionality and therefore should be recognized at a point in time as opposed to over time.

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The Company utilized a blended approach which took into consideration the adjusted market assessment approach and the expected cost plus a margin approach to determine this standalone selling price.

This blended approach utilized the adjusted market approach and expected cost plus margin approach to value the performance of consulting services which included analyzing hourly rates of vendors in the a market who perform similar services to those of the Company to develop a range and then analyzing the average cost per hour of our internal resources and applying a margin which placed the value in the median of the previously identified range.

This blended approach utilized the adjusted market approach and expected cost plus margin approach to value the performance of consulting services which included analyzing hourly rates of vendors in a market who perform similar services to those of the Company to develop a range and then analyzing the average cost per hour of our internal resources and applying a margin which placed the value in the median of the previously identified range.

For the reimbursement of out-of-pocket 

third -party research and development costs the Company utilized the expected cost plus a margin approach, which included estimating the actual out-of-pocket cost the Company expects to pay to third -parties for research and development costs and applying a margin, if necessary.

The Company determined that no margin was necessary of these out-of-pocket 

The Company determined that no margin was necessary for these out-of-pocket 

third -party research and development costs as these are purely pass-through costs and the margin for managing these third -party activities is included within the value of the performance of consulting services.

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third -party research and development costs identified in the initial product development plan for AZSTARYS which was anticipated at the inception date of the KP415 License Agreement.

As of June 30, 2021, the Company has recognized all of the consulting services and out-of-pocket 

As of September 30, 2021, the Company has recognized all of the consulting services and out-of-pocket 

third -party research and development costs under this cap.

6 unchanged sentences

The Company is entitled to additional payments from Commave conditioned upon the achievement of specified regulatory milestones related to AZSTARYS and KP484 and the achievement of certain U.S.

sales milestones, which are dependent upon, among other things, the timing of approval for a new drug application for AZSTARYS and its final approved label, if any.

sales milestones.

8 unchanged sentences

Since both performance obligations were satisfied as of the end of the second quarter of 2020 the full $ 5.0  million payment was recognized as revenue during the second quarter of 2020.

On April 8, 2021, the Company entered into Amendment No.

In April 2021, the Company entered into Amendment No.

1 to the KP415 Amendment (the "KP415 Amendment").

3 unchanged sentences

Drug Enforcement Agency (the "DEA"), which occurred on May 7, 2021.

SDX is the prodrug component of AZSTARYS.

In addition, the KP415 Amendment increases the total remaining future regulatory and sales milestone payments related to AZSTARYS to up to an aggregate of $ 590.0 million in payments upon the occurrence of specified regulatory milestones related to AZSTARYS and upon the achievement of specified U.S.

In addition, the KP415 Amendment increased the total remaining future regulatory and sales milestone payments related to AZSTARYS to up to an aggregate of $ 590.0 million in payments upon the occurrence of specified regulatory milestones related to AZSTARYS and upon the achievement of specified U.S.

net sales milestones.

1 unchanged sentence

Commave is obligated to make such royalty payments on a product-by-product basis until expiration of the Royalty Term for the applicable product.

Pursuant to the KP415 Amendment, Commave and the Company also agreed to modify Commave’s right of first refusal such that the Company’s product candidate, KP922, is no longer subject to Commave’

right of first refusal to acquire, license or commercialize any Additional Product Candidate. 

Commave’s right of first refusal shall only apply to any Additional Product Candidate which contains SDX, with such right of first refusal expiring upon the acceptance of an NDA for such Additional Product Candidate containing SDX.

Pursuant to the KP415 Amendment, Commave and the Company also agreed to modify Commave’s ROFR such that the Company’s product candidate, KP922, is no longer subject to Commave’

ROFR to acquire, license or commercialize any Additional Product Candidate. Commave’s ROFR shall only apply to any Additional Product Candidate which contains SDX, with such ROFR expiring upon the acceptance of an NDA for such Additional Product Candidate containing SDX.

Per the KP415 Amendment, the Company earned a regulatory milestone payment of $ 10.0  million following the FDA’s approval of the AZSTARYS NDA, in March 2021, as well as $ 10.0 million following the DEA's scheduling of SDX in May 2021.

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In accordance with ASC 340 - 40, Contracts with Customers , the Company recognized $ 1.0 million of royalty costs due to payment to Aquestive related to the regulatory milestones earned and recorded it in the item titled royalty and direct contract acquisition costs in the unaudited condensed statements of operations for first and second quarter of 2021, respectively.

For the three months ended June 30, 2021 and 2020, the Company recognized revenue under the KP415 License Agreement of $ 10.0 million and $ 5.6 million, respectively.

For the six months ended June 30, 2021 and 2020, the Company recognized revenue under the KP415 License Agreement of $ 20.0 million and $ 7.3 million, respectively.

For the three months ended September 30, 2021, the Company recognized minimal revenue under the KP415 License Agreement.

For the three months ended September 30, 2020, the Company recognized 

no revenue under the KP415 License Agreement.

For the nine  months ended September 

30, 2021 and 2020, the Company recognized revenue under the KP415 License Agreement of $ 20.0 million and $ 7.3 million, respectively.

There was 

no  deferred revenue related to this agreement as of June 30, 2021 or December 31, 2020.

no  deferred revenue related to this agreement as of September 

30, 2021 or December 31, 2020.

APADAZ License Agreement

7 unchanged sentences

KVK may terminate the APADAZ License Agreement upon 90 days written notice if a regulatory authority in the United States orders KVK to stop sales of APADAZ due to a safety concern.

In addition, after the third anniversary of the APADAZ License Agreement, KVK may terminate the APADAZ License Agreement without cause upon 18 months prior written notice.

In addition, KVK may terminate the APADAZ License Agreement without cause upon 18 months prior written notice.

The Company 

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As such, the revenue related to the performance obligation will be recognized as the consulting services are performed and the services associated with the reimbursable third -party pass-through costs are incurred and paid by the Company, in accordance with the practical expedient allowed under ASC 606 regarding an entity’s right to consideration from a customer in an amount that corresponds directly to the value to the customer of the entity’s performance completed to date.

As of June 30, 2021, the Company has recognized approximately 60 % of the consulting services and third -party pass-through costs under the Corium Consulting Agreement.

For the three and six months ended 

June 30, 2021, the Company recognized revenue under the Corium Consulting Agreement of $ 1.6 million and $ 3.2 million, respectively.

There was no revenue recognized for the three or six months ended June 30, 2020 related to the Corium Consulting Agreement.

As of June 30, 2021, the Company had deferred revenue related to this agreement of $ 0.2  million.

As of December 31, 2020, the Company had deferred revenue related to this agreement or $ 0.1 million.

As of September 30, 2021, the Company has recognized approximately 70 % of the consulting services and third -party pass-through costs under the Corium Consulting Agreement.

For the three and nine months ended 

September 30, 2021, the Company recognized revenue under the Corium Consulting Agreement of $ 2.0 million and $ 5.9 million, respectively.

For each of the three and 

nine months ended September 30, 2020, the Company recognized revenue under the Corium Consulting Agreement of $ 1.9 million.

As of September 30, 2021, the Company had deferred revenue related to this agreement of $ 0.3  million.

As of December 31, 2020, the Company had deferred revenue related to this agreement of $ 0.1 million.

Other Consulting Arrangements

For the three months ended June 30, 2021 and 2020, the Company recognized revenue under other consulting arrangements of $ 0.3  million and $ 1.3 million, respectively.

For the six months ended June 30, 2021 and 2020, the Company recognized revenue under other consulting arrangements of $ 0.8 million and $ 1.7 million, respectively.

For the three months ended September 30, 2021 and 2020, the Company recognized no revenue under other consulting arrangements.

For the nine months ended September 30, 2021 and 2020, the Company recognized revenue under other consulting arrangements of $ 0.2 million and $ 1.7 million, respectively.

There was 

no  deferred revenue from other consulting arrangements as of June 30, 2021 or December 31, 2020.

no  deferred revenue from other consulting arrangements as of September 30, 2021 or December 31, 2020.

Accounts and Other Receivables

Accounts and other receivables consists of receivables under the KP415  License Agreement and Corium Consulting Agreement, as well as receivables related to other consulting arrangements, income tax receivables and other receivables due to the Company.

Accounts and other receivables consist of receivables under the KP415  License Agreement and Corium Consulting Agreement, as well as receivables related to other consulting arrangements, income tax receivables and other receivables due to the Company.

Receivables under the KP415  License Agreement and Corium Consulting Agreement are recorded for amounts due to the Company related to reimbursable third -party costs and performance of consulting services.

These receivables, as well as the receivables related to other consulting arrangements, are evaluated to determine if any reserve or allowance should be established at each reporting date.

As of June 30, 2021, the Company had receivables related to the Corium Consulting Agreement in the amount of $ 1.1 million and other consulting arrangements in the amount of and $ 0.6  million .

As of September 30, 2021, the Company had receivables related to the Corium Consulting Agreement of $ 1.2  million and other consulting arrangements of $ 0.1  million.

As of December 

31, 2020, the Company had receivables related to the Corium Consulting Agreement of $ 2.1 million, other consulting arrangements of $ 0.4 million and no receivables related to the KP415 License Agreement.

As of June 30, 2021 and December 31, 2020, 

31, 2020, the Company had receivables related to the Corium Consulting Agreement of $ 2.1 million and other consulting arrangements of $ 0.4 million.

As of September 30, 2021, and December 31, 2020, 

no reserve or allowance for doubtful accounts has been established.

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15, 2021, and interim periods within those fiscal years.

Early adoption is permitted, but no earlier than fiscal years beginning after December 

15, 2020, including interim periods within those fiscal years.

FASB specified that an entity should adopt the guidance as of the beginning of its annual fiscal year.

The Company is currently evaluating the impact the adoption of ASU 

2020 - 06  could have on the Company’s financial statements and disclosures.

The Company does not believe the adoption of ASU 

2020 - 06  will have a material impact on the Company’s financial statements and disclosures.

In May 2021, the FASB issued ASU 

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This guidance is effective for financial statements issued for fiscal years beginning after December 

15, 2021, and interim periods within those fiscal years. Early adoption is permitted for all entities, including adoption in an interim period.

If an entity elects to early adopt the amendments in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period.

The Company is currently evaluating the impact the adoption of ASU 

2021 - 04  could have on the Company’s financial statements and disclosures.

15, 2021, and interim periods within those fiscal years.

FASB specified that an entity should adopt the guidance as of the beginning of its annual fiscal year.

The Company does not believe the adoption of ASU 

2021 - 04  will have a material impact on the Company’s financial statements and disclosures.

Debt Obligations

As of June 30, 2021 , the Company had no convertible notes outstanding.

As of September 30, 2021 , the Company had no convertible notes outstanding.

As of December 31, 2020, the Company had convertible notes outstanding in the aggregate principal amount of $ 68.2 million.

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The Series B- 2  Certificate of Designation Amendment provides that each share of the Company’s Series B- 2  preferred stock is convertible into shares of the Company’s common stock at a per share price equal to the common stock exchange price under the September 2019 Exchange Agreement, which equals the greater of (i) $9.60 (subject to adjustment to reflect stock splits and similar events), or (ii) the average of the volume-weighted average prices of the Company’s common stock on each of the 15  trading days immediately preceding such exchange.

As of June 30, 2021, the Deerfield Lenders have converted $ 17.1  million of principal under the December 2019 Notes into all 1,777,437 shares of common stock available under the Deerfield Optional Conversion Feature.

As of September 30, 2020, the Deerfield Lenders had converted all $ 17.1  million of principal under the December 2019 Notes into all 1,777,437 shares of common stock available under the Deerfield Optional Conversion Feature.

The Company determined the changes to the Deerfield Convertible Note met the definition of a troubled debt restructuring under ASC 

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The changes to the Facility Notes, under the December 2020 Exchange Agreement, were accounted for as a debt extinguishment as the cash flows immediately after the December 2020 Exchange Agreement were substantially different from the cash flows immediately prior to the December 2020 Exchange Agreement and while the Company was experiencing financial difficulties it was determined that the lender did not grant a concession.

As such a loss of extinguishment related to the extinguishment of the old notes was recorded in the unaudited condensed statement of operations for the six months ended June 30, 2021 and additional debt issuance costs related the new notes were capitalized and amortized using the effective interest method through the Payoff of Facility Agreement Notes (discussed below).

As such, a loss of extinguishment related to the extinguishment of the old notes is recorded in the unaudited condensed statement of operations for the nine months ended September 30, 2021 and additional debt issuance costs related the new notes were capitalized and amortized using the effective interest method through the Payoff of Facility Agreement Notes (discussed below).

The transactions contemplated under the December 2020 Exchange Agreement, including the obligation to pre-pay any portion of the Facility Agreement Notes or to complete the Exchange and the effectiveness of the amendments to the Facility Agreement, the Notes and the IRA, were subject to specified conditions of closing, including certain closing of the Public Offering, the filing of the Restated Series B- 2 Certificate of Designation (as defined below) and the approval for listing of the Company’s common stock, including the shares issuable upon conversion of the Series B- 2 Preferred Stock and exercise of the Exchange Warrants, on the Nasdaq Capital Market.

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Liabilities - Extinguishment of Liabilities , as the Company repaid the debt (and has been relieved of the related obligation) without entering into new debt with the Facility Agreement Note Holders and there is no other continuing debt with the Facility Agreement Note Holders.

The payoff letter resulted in a loss on extinguishment of debt which is recorded on the unaudited condensed statements of operations for the six months ended June 30, 2021.

The payoff letter resulted in a loss on extinguishment of debt which is recorded on the unaudited condensed statements of operations for the nine months ended September 30, 2021.

On April 

23, 2020, the Company received proceeds of $ 0.8  million from the PPP Loan under the PPP of the CARES Act, a portion of which may be forgiven, which the Company used to retain current employees, maintain payroll and make lease and utility payments.

The PPP Loan matured on April 

23, 2022  and bore annual interest at a rate of 1.0%.

Payments of principal and interest on the PPP Loan were originally deferred for the first two months of the PPP Loan term.

The PPP Flexibility Act of 2020, which was signed in June 2020, extend that deferral to the first six months of the PPP loan term.

Thereafter, the Company would have been required to pay the lender equal monthly payments of principal and interest.

In June 2021, the Company received notice from the U.S.

Small Business Administration that the principal and interest due under its PPP Loan had been forgiven in full.

This gain on extinguishment is shown within other income (expense) on the condensed statements of operations for the three and six months ended June 30, 2021.

This gain on extinguishment is shown within other income (expense) on the condensed statements of operations for the nine months ended September 30, 2021.

Commitments and Contingencies

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However, for such matters when it is probable that the Company has incurred a liability and can reasonably estimate the amount, the Company accrues and discloses such estimates.

June 30, 2021  and December 31, 2020 , no accruals have been made related to commitments and contingencies.

September 30, 2021 , and December 31, 2020 , no accruals have been made related to commitments and contingencies.

Preferred Stock and Warrants

Authorized, Issued, and Outstanding Preferred Stock

As of June 30, 2021, the Company had 10,000,000 shares of authorized, unallocated and unissued preferred stock.

As of September 30, 2021, the Company had 10,000,000 shares of authorized, unallocated and unissued preferred stock.

As of December 31, 2020, the Company had 10,000,000 shares of authorized preferred stock. The following shares of preferred stock were designated, issued and outstanding as of December 31, 2020: 

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(ii) a Certificate of Elimination of Series B- 1  Convertible Preferred Stock, eliminating from the Company’s Certificate of Incorporation the 1,576 shares designated as Series B- 1  Convertible Preferred Stock;

and (iii) a Certificate of Elimination of Series B- 2  Convertible Preferred Stock, eliminating from the Company’s Certificate of Incorporation the 31,480 shares designated as Series B- 2  Convertible Preferred Stock. As of June 30, 2021, 

no shares of preferred stock were designated, issued or outstanding.

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19, 2015, by and among the Company, Deerfield and the other parties signatory thereto, contemplated by the December 2020 Exchange Agreement that were conditional upon, among other things, the closing of the Public Offering, the filing of the Series B- 2  Certificate of Designation and/or the approval for listing of the Company’s common stock, including the shares issuable upon conversion of the Series B- 2  Preferred Stock and exercise of the Exchange Warrants, on the Nasdaq Capital Market, became effective on January 

As of June 30, 2021, all shares of Series B- 2 Preferred Stock have been converted into 4,842,699 shares of common stock. 

In March 2021, all shares of Series B- 2 Preferred Stock converted into 4,842,699 shares of common stock. 

Common Stock and Warrants

Authorized, Issued, and Outstanding Common Shares

June 30, 2021  and December 31, 2020 , the Company had authorized shares of common stock of 250,000,000 shares.

September 30, 2021 , and December 31, 2020 , the Company had authorized shares of common stock of 250,000,000 shares.

Of the authorized shares, 35,317,313 and 

4,537,321 shares of common stock were issued and outstanding as of 

June 30, 2021  and December 31, 2020 , respectively.

June 30, 2021  and December 31, 2020 , the Company had reserved authorized shares of common stock for future issuance as follows:

June 30, 2021  

September 30, 2021 , and December 31, 2020 , respectively.

September 30, 2021  and December 31, 2020 , the Company had reserved authorized shares of common stock for future issuance as follows:

September 30, 2021  

December 31, 2020  

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The following table summarizes common stock activity for the  

six months ended June 30, 2021 :

nine months ended September 30, 2021 :

Shares of Common Stock  

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28,480,156  

Adjustment for cash paid in lieu on DTC fractional shares

Adjustment for cash paid in lieu of DTC fractional shares

Common stock issued as a result of warrant exercises

3 unchanged sentences

34,977,923  

Common stock issued as a result of warrant exercises

332,289  

Common stock issued as compensation to third-parties

Balance as of September 30, 2021

35,317,313  

On June 

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Changes in the number of shares that are expected to be issued are treated as changes in variable consideration under ASC 606 and are recorded as a change in contract asset in the balance sheets.

As of June 30, 2021 and December 31, 2020, a contract asset of $ 0.4 million is recorded in other long-term assets on the balance sheets related to the KVK Warrant.

As of September 30, 2021 and December 31, 2020, a contract asset of $ 0.4 million is recorded in other long-term assets on the balance sheets related to the KVK Warrant.

Pre-Funded  

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The pre-funded warrants were immediately exercisable. The pre-funded warrants were exercisable, at the option of each holder, in whole or in part, by delivering to the Company a duly executed exercise notice accompanied by payment in full for the number of shares of common stock purchased upon such exercise. In lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the aggregate exercise price, the holder was able to elect instead to receive upon such exercise (either in whole or in part) the net number of shares of common stock determined according to a formula set forth in the pre-funded warrants.

As of June 30, 2021, all pre-funded warrants have been exercised for 926,841 shares of common stock and gross proceeds of approximately $ 72 . 

In January 2021, all pre-funded warrants were exercised for 926,841 shares of common stock and gross proceeds of approximately $ 72 . 

Warrants to Purchase Common Stock

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In the event of a fundamental transaction which is not approved by the Company’s board of directors, the holders of the Offering Warrants have the right to require the Company or a successor entity to redeem the Offering Warrants in the amount of the Black Scholes value of the unexercised portion of the Offering Warrants on the date of the consummation of the fundamental transaction payable in the form of consideration paid to the holders of common stock in such fundamental transaction.

The Offering Warrants meet the equity classification requirements and thus are recorded in additional paid-in capital on the unaudited condensed balance sheets. As of June 30, 2021, 3,302,645 Offering Warrants have been exercised for 2,871,668 shares of common stock and gross proceeds of approximately $ 15.9 million.

The Offering Warrants meet the equity classification requirements and thus are recorded in additional paid-in capital on the unaudited condensed balance sheets. As of September 30, 2021, 3,461,858 Offering Warrants have been exercised for 3,030,881 shares of common stock and gross proceeds of approximately $ 16.9 million.

These amounts are exclusive of the Offering Warrants exercised as part of the January 2021 Inducement Transaction discussed below.

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18,702 shares of common stock.

As of June 30, 2021, 400,000 Underwriter Warrants have been exercised for 400,000 shares of common stock and gross proceeds of approximately $ 3.3 million.

As of September 30, 2021, 400,000 Underwriter Warrants have been exercised for 400,000 shares of common stock and gross proceeds of approximately $ 3.3 million.

January 2021 Warrant Exercise Inducement Letters and Issuance of Warrants

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In lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of common stock determined according to a formula set forth in the warrants.

would own more than 4.99 % (or, upon election by a holder prior to the issuance of its January 2021 Inducement Warrants, 9.99 %) of the Company’s outstanding common stock immediately after exercise.

A holder (together with its affiliates) may not exercise any portion of the January 2021 Inducement Warrant to the extent that the holder and its affiliates and any other person or entities with which such holder would constitute a Section 13 (d) “group” would own more than 4.99 % (or, upon election by a holder prior to the issuance of its January 2021 Inducement Warrants, 9.99 %) of the Company’s outstanding common stock immediately after exercise.

Except as otherwise provided in the January 2021 Inducement Warrants or by virtue of such holder’s ownership of shares of the Company’s common stock, the holders of the January 2021 Inducement Warrants do not have the rights or privileges of holders of common stock with respect to the shares of common stock underlying the January 2021 Inducement Warrants, including any voting rights, until they exercise their January 2021 Inducement Warrants.

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January 2021 Inducement Warrants have the right to require the Company or a successor entity to redeem the January 2021 Inducement Warrants in the amount of the Black Scholes value of the unexercised portion of the January 2021 Inducement Warrants on the date of the consummation of the fundamental transaction payable in the form of consideration paid to the holders of common stock in such fundamental transaction.

As of June 30, 2021, 1,676,921 January 2021 Inducement Warrants have been exercised for 1,676,921 shares of common stock and gross proceeds of approximately $ 10.7  million. These amounts are exclusive of the January 2021 Inducement Warrants exercised as part of the June 2021 Inducement Transaction discussed below.

As of September 30, 2021, 1,676,921 January 2021 Inducement Warrants have been exercised for 1,676,921 shares of common stock and gross proceeds of approximately $ 10.7  million. These amounts are exclusive of the January 2021 Inducement Warrants exercised as part of the June 2021 Inducement Transaction discussed below.

In accordance with the January 2021 Inducement Transaction we recognized a deemed dividend of $ 37.4 million which is the difference between the grant date fair value of the January 2021 Inducement Warrants and the purchase price of the January 2021 Inducement Warrants.

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would own more than 4.99 % (or, upon election by a holder prior to the issuance of its June 2021 Inducement Warrants, 9.99 %) of the Company’s outstanding common stock immediately after exercise.

A holder (together with its affiliates) may not exercise any portion of the June 2021 Inducement Warrant to the extent that the holder and its affiliates and any other person or entities with which such holder would constitute a Section 13 (d) “group” would own more than 4.99 % (or, upon election by a holder prior to the issuance of its June 2021 Inducement Warrants, 9.99 %) of the Company’s outstanding common stock immediately after exercise.

Except as otherwise provided in the June 2021 Inducement Warrants or by virtue of such holder’s ownership of shares of the Company’s common stock, the holders of the June 2021 Inducement Warrants do not have the rights or privileges of holders of common stock with respect to the shares of common stock underlying the June 2021 Inducement Warrants, including any voting rights, until they exercise their June 2021 Inducement Warrants.

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June 2021 Inducement Warrants have the right to require the Company or a successor entity to redeem the June 2021 Inducement Warrants in the amount of the Black Scholes value of the unexercised portion of the June 2021 Inducement Warrants on the date of the consummation of the fundamental transaction payable in the form of consideration paid to the holders of common stock in such fundamental transaction.

As of June 30, 2021, no June 2021 Inducement Warrants have been exercised.

As of September 30, 2021, no June 2021 Inducement Warrants have been exercised.

In accordance with the June 2021 Inducement Transaction we recognized a deemed dividend of $ 16.9 million which is the difference between the grant date fair value of the June 2021 Inducement Warrants and the purchase price of the June 2021 Inducement Warrants.

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5,489,660 as of 

June 30, 2021. 

September 30, 2021. 

The number of shares of common stock reserved for issuance under the 

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 For the 

three and six months ended June 30, 2020, 

three and nine months ended September 30, 2020, 

RSAs were granted for a total of 1,384 and 9,205 shares of common stock, respectively.

No RSAs were granted during the three and six months ended June 30, 2021.

No stock options were exercised during the three or six months ended June 30, 2021 or 

2020, respectively.

No RSAs were granted during the three and nine months ended September 30, 2021.

During the three and nine months ended September 

30, 2020, stock options were exercised for a total of 279 shares of common stock.

No stock options were exercised during the three or nine months ended September 30, 2021.

Stock-based compensation expense recorded under the Incentive Stock Plan and the 2014 Plan is included in the following line items in the accompanying statements of operations (in thousands):

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

Research and development

3 unchanged sentences

$ 1,613  

There was $ 0.4 million of stock-based compensation expense related to performance-based awards recognized during the six months ended June 30, 2021.

There was $ 0.3 million of stock-based compensation expense related to performance-based awards recognized during the three and six months ended June 30, 2020. 

There was no stock-based compensation expense related to performance-based awards recognized during the three months ended June 30, 2021.

$ 2,034  

There was $ 0.3 million of stock-based compensation expense related to performance-based awards recognized during the nine months ended September 30, 2020. 

There was $ 0.4 million of stock-based compensation expense related to performance-based awards recognized during the nine months ended September 

There was no stock-based compensation expense related to performance-based awards recognized during the three months ended September 

30, 2020,  or 

Fair Value of Financial Instruments

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The Deerfield Convertible Note, December 2019 Notes and the January 2020 Note were all extinguished in the first quarter of 

2021 and therefore had no value as of June 30, 2021.

2021 and therefore had no value as of September 30, 2021.

The Deerfield Convertible Note, December 2019 Notes and the 

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This determination requires significant judgments to be made.

The following table summarizes the conclusions reached regarding fair value measurements as of June 30, 2021 and December 31, 2020 ( in thousands):

Balance as of June 30, 2021  

The following table summarizes the conclusions reached regarding fair value measurements as of September 30, 2021, and December 31, 2020 ( in thousands):

Balance as of September 30, 2021  

Quoted Prices in Active Markets for Identical Assets (Level 1)  

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The Company’s Deerfield Warrant liability and embedded Warrant Put Option are, and the embedded Deerfield Note Put Option was, measured at fair value on a recurring basis.

June 30, 2021, 

the Deerfield Warrant liability and embedded Warrant Put Option are, and as of December 31, 2020 

the Deerfield Warrant liability, embedded Warrant Put Option and the embedded Deerfield Note Conversion Feature were, reported on the unaudited condensed balance sheets in derivative and warrant liability.

September 30, 2021, 

the Deerfield Warrant liability and embedded Warrant Put Option are, and as of December 31, 2020, the Deerfield Warrant liability, embedded Warrant Put Option and the embedded Deerfield Note Conversion Feature were, reported on the unaudited condensed balance sheets in derivative and warrant liability.

The Company used a Monte Carlo simulation to value the Deerfield Warrant liability, embedded Warrant Put Option and the embedded Deerfield Note Conversion Feature for all periods presented.

1 unchanged sentence

Changes in the fair value of the Deerfield Warrant liability and embedded Warrant Put Option are, and changes in the fair value of the embedded Deerfield Note Put Option were (through December 31, 2020), reflected in the unaudited condensed statements of operations for the 

three and six months ended June 30, 2021 and 2020 as a fair value adjustment related to derivative and warrant liability.

The derivative liability for the Deerfield Warrant was $ 628,000 and $ 230,000 at June 30, 2021 and December 31, 2020, respectively.

The derivative liability for the embedded Warrant Put Option was $ 38,000 and $ 25,000 at June 30, 2021 and December 31, 2020, respectively.

three and nine  months ended September 30, 2021, and 2020 as a fair value adjustment related to derivative and warrant liability.

The derivative liability for the Deerfield Warrant was $ 339,000 and $ 230,000 at September 30, 2021, and December 31, 2020, respectively.

The derivative liability for the embedded Warrant Put Option was $ 22,000 and $ 25,000 at September 

30, 2021 and December 31, 2020, respectively.

The derivative liability for the Deerfield Note Conversion Feature had no value at December 31, 2020.

A 10% increase in the enterprise value would result in an increase of $ 58,000 in the estimated fair value of the Deerfield Warrant liability and an increase of $ 4,000 in the estimated fair value of the embedded Warrant Put Option liability.

In addition, the Company assumed a weighted-average probability of a liquidity event occurring of approximately 23 % with an estimated probability-weighted value of approximately $ 83.3 million and a weighted-average probability of a fundamental change event occurring of approximately 28 % with an estimated probability-weighted value of approximately $ 1.1 billion, respectively, with estimated timing in each scenario of the fourth quarter of 2022.

In addition, the Company assumed a weighted-average probability of a liquidity event occurring of approximately 23 % with an estimated probability-weighted value of approximately $ 63.3 million and a weighted-average probability of a fundamental change event occurring of approximately 28 % with an estimated probability-weighted value of approximately $ 800 million, respectively, with estimated timing in each scenario of the first quarter of 2023.

The Company’s KVK Warrant liability is measured at fair value on a recurring basis.

As of June 30, 2021 

and December 31, 2020, 

As of September 30, 2021, and December 31, 2020, 

the KVK Warrant liability is reported on the unaudited condensed balance sheets in derivative and warrant liability.

5 unchanged sentences

Changes in the fair value of the KVK Warrant liability are reflected in the unaudited condensed statements of operations for the 

three and six months ended June 30, 2021 and 2020 as a fair value adjustment related to derivative and warrant liability.

three and nine months ended September 30, 2021, and 2020 as a fair value adjustment related to derivative and warrant liability.

A reconciliation of the beginning and ending balances for the derivative and warrant liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3 ) is as follows (in thousands):

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

Balance as of beginning of period

Adjustment to fair value

( 305 )  

Balance as of end of period

Net Income (Loss) Per Share

Net Loss Per Share

Under the 

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The Company reports the more dilutive of the approaches ( two -class or if-converted) as its diluted net income (loss) per share of common stock during the period.

Diluted net income (loss) per share of common stock is the same as basic net income (loss) per share of common stock for the three months ended June 30, 2021 and 2020 because the effects of potentially dilutive items were anti-dilutive for the respective periods.

Diluted net loss per share of common stock is the same as basic net loss per share of common stock for the three and nine months ended September 30, 2020, because the effects of potentially dilutive items were anti-dilutive for the respective periods.

The following securities, presented on a common stock equivalent basis, have been excluded from the calculation of weighted average number of shares of common stock outstanding because their effect is anti-dilutive:

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

Conversion of Deerfield Convertible Note

22 unchanged sentences

1,234,913  

* Inclusive of 324,312 shares of Common Stock issuable (i) in exchange of the Deerfield Optional Conversion Feature, or (ii) upon conversion of the Series B-2 Preferred Stock issuable in exchange of the Deerfield Optional Conversion Feature.

A reconciliation from net income (loss) to basic net income (loss) per share of common stock, basic net (loss) income attributable to common stockholders per share of common stock and diluted net (loss) income attributable to common stockholders per share of common stock for the three and six months ended June 30, 2021 and 2020 is as follows (in thousands):

Three months ended June 30,

Six months ended June 30,

Basic net income (loss) per share of common stock:

Net income (loss)

A reconciliation from net loss to basic net loss per share of common stock, basic net loss attributable to common stockholders per share of common stock and diluted net loss attributable to common stockholders per share of common stock for the three and nine months ended September 

30, 2021, and 2020 is as follows (in thousands):

Three months ended September 30,

Nine months ended September 30,

Basic net loss per share of common stock:

$ ( 1,759 )  

$ ( 3,009 )  

Net income attributable to participating securities

$ ( 5,852 )  

Net loss attributable to participating securities

Undistributed net loss, basic

$ ( 1,759 )  

Undistributed net income (loss), basic

$ ( 3,009 )  

3 unchanged sentences

27,905  

Basic net income (loss) per share of common stock

Basic net loss per share of common stock

$ ( 0.05 )  

1 unchanged sentence

$ ( 0.21 )  

Net income (loss)

$ ( 1,759 )  

$ ( 3,009 )  

Dividends declared or accumulated

$ ( 5,852 )  

Dividends declared or accumulated

( 54,342 )  

Net (loss) income attributable to common stockholders

Net loss attributable to common stockholders

$ ( 1,759 )  

$ ( 3,009 )  

Net income attributable to participating securities

$ ( 60,194 )  

Net loss attributable to participating securities

Undistributed net loss attributable to shares of common stockholders, basic

$ ( 1,759 )  

Undistributed net (loss) income attributable to common stockholders, basic

$ ( 3,009 )  

3 unchanged sentences

27,905  

Basic net (loss) income attributable to common stockholders per share of common stock

Basic net loss attributable to common stockholders per share of common stock

$ ( 0.05 )  

1 unchanged sentence

$ ( 2.16 )  

Diluted net (loss) income per share of common stock:

Undistributed net (loss) income attributable to common stockholders

Diluted net loss per share of common stock:

Undistributed net loss attributable to common stockholders

$ ( 1,759 )  

$ ( 3,009 )  

$ ( 60,194 )  

Fair value adjustment income related to Deerfield Warrant liability

( 290 )  

Fair value adjustment income related to embedded Warrant Put Option

Fair value adjustment expense (income) related to KVK Warrant liability

Undistributed net (loss) income attributable to common stockholders, diluted

( 16 )  

Fair value adjustment income related to KVK Warrant liability

( 27 )  

( 14 )  

Undistributed net loss attributable to common stockholders, diluted

$ ( 2,092 )  

$ ( 3,009 )  

$ ( 60,208 )  

Weighted average number of shares of common stock outstanding, basic

8 unchanged sentences

27,905  

Diluted net (loss) income attributable to common stockholders per share of common stock

Diluted net loss attributable to common stockholders per share of common stock

$ ( 0.06 )  

2 unchanged sentences

Severance Expense

February 2020, the Company eliminated the chief business officer role and Gordon K.

Johnson separated from the Company. In connection with his separation, Mr. Johnson was entitled to severance benefits as documented in his Amended and Restated Employment Agreement entered into in June 2015.

February 2020, the Company eliminated the chief business officer role. In connection with the elimination, the chief business officer was entitled to severance benefits as documented in his Amended and Restated Employment Agreement entered into in June 2015.

The severance benefits consisted of personnel and other related charges of approximately $ 0.4  million and stock compensation expense of approximately $ 0.4  million related to the acceleration of vesting on unvested shares subject to certain stock options.

These severance benefits are presented as severance expense in the unaudited condensed statements of operations for the six months ended June 30, 2020.

These severance benefits are presented as severance expense in the unaudited condensed statements of operations for the nine months ended September 30, 2020.

As of December 31, 2020, the Company had accrued severance expense recorded within accounts payable and accrued expenses in the amount of $ 0.1  million.

For the three months ended June 30, 2020, and the three and six months ended June 30, 2021, there was no severance expense. As of June 30, 2021, there was no accrued severance expense.

For the three months ended September 30, 2020, and the three and nine months ended September 30, 2021, there was no severance expense. As of September 30, 2021, there was no accrued severance expense.

The Company has operating and finance leases for office space, laboratory facilities and various laboratory equipment, furniture and office equipment and leasehold improvements.

The Company's leases have remaining lease terms of less than 1 year to approximately 

5 years, some of which include options to extend the leases for up to 5 years, and some which include options to terminate the leases within 1 year. In February 2020, the Company agreed to sublease office space in Florida, comprised of one of the two contiguous suites, under a non-cancelable operating lease, which expires in February 2026.

The Company's leases have remaining lease terms of less than 1 year to approximately 4  years, some of which include options to extend the leases for up to 5 years, and some which include options to terminate the leases within 1 year. In February 2020, the Company agreed to sublease office space in Florida, comprised of one of the two contiguous suites, under a non-cancelable operating lease, which expires in February 2026.

In October 2020, the Company agreed to terminate this sublease, in exchange for a termination payment, due to financial difficulties encountered by the subtenant as a result of COVID- 19.

1 unchanged sentence

The components of lease expense were as follows (in thousands): 

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

Finance lease cost:

11 unchanged sentences

Supplemental cash flow information related to leases was as follows (in thousands):

Six months ended June 30,

Nine months ended September 30,

Cash paid for amounts included in the measurement of lease liabilities:

8 unchanged sentences

Supplemental balance sheet information related to leases was as follows (in thousands, except weighted average remaining lease term and weighted average discount rate):

September 30,

Finance Leases

25 unchanged sentences

Finance leases

10.5 %  

Operating leases

1 unchanged sentence

Year Ending December 31,

2021 (excluding the six months ended June 30, 2021)

2021 (excluding the nine months ended September 30, 2021)

Total lease payments

3 unchanged sentences

Subsequent Events

On July 

2, 2021, the Company entered into an Equity Distribution Agreement (the "Agreement") with JMP Securities LLC ("JMP") and RBC Capital Markets, LLC ("RBCCM") under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock having an aggregate offering price of up to $ 75.0 million through JMP and RBCCM as its sales agents.

The issuance and sale, if any, of common stock by the Company under the Agreement will be made pursuant to a registration statement on Form S- 3.

JMP and RBCCM may sell the common stock by any method permitted by law deemed to be an “at the market offering”

as defined in Rule 

415 of the Securities Act of 1933, as amended.

The Company will pay JMP and RBCCM a commission equal to three percent ( 3.0 %) in the aggregate of the gross sales proceeds of any common stock sold through JMP and RBCCM under the Agreement.

The Company filed a registration statement on Form S- 3 covering the sale of the shares of its common stock up to $ 350.0 million, $ 75.0 million of which was allocated to the sales of the shares of common stock issuable under the Agreement, which was declared effective on July 12, 2021.

On October 19, 2021, the Company announced that its shares of common stock were approved for listing to The Nasdaq Global Select Market.

Trading on The Nasdaq Global Select Market commenced effective with the open of business on October 19, 2021, under the Company’s ticker symbol, “KMPH”.

The Company was previously listed on The Nasdaq Capital Market, following its uplisting to the exchange in January 2021.

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

What changed 10-Q

Item 1. Financial Statements