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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2022

 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________to___________.

 

Commission file number: 001-35005

 

ASSEMBLY BIOSCIENCES, INC.

(Exact name of Registrant as specified in its charter)

 

Delaware

20-8729264

(State or other jurisdiction of

(I.R.S. Employer Identification No.)

incorporation or organization)

 

 

331 Oyster Point Blvd., Fourth Floor

 

South San Francisco, California

94080

(Address of principal executive offices)

(zip code)

 

(833) 509-4583

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001

ASMB

The Nasdaq Global Select Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes         No       

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes            No       

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer

 

Accelerated Filer

Non-accelerated Filer

 

Smaller Reporting Company

Emerging growth company

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes       No   

 

As of May 9, 2022, there were 48,216,473 shares of the registrant’s common stock outstanding.

 

 


 

Index

 

 

 

Page

Number

 

 

 

PART I:

FINANCIAL INFORMATION

2

 

 

 

Item 1.

Financial Statements

2

 

 

 

 

Condensed Consolidated Balance Sheets at March 31, 2022 (unaudited) and December 31, 2021

2

 

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2022 and 2021 (unaudited)

3

 

 

 

 

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2022 and 2021 (unaudited)

4

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021 (unaudited)

5

 

 

 

 

Notes to the Condensed Consolidated Financial Statements (unaudited)

6

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

15

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

22

 

 

 

Item 4.

Controls and Procedures

22

 

 

 

PART II:

OTHER INFORMATION

23

 

 

 

Item 1.

Legal Proceedings

23

 

 

 

Item 1A.

Risk Factors

23

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

36

 

 

 

Item 3.

Defaults Upon Senior Securities

36

 

 

 

Item 4.

Mine Safety Disclosures

36

 

 

 

Item 5.

Other Information

36

 

 

 

Item 6.

Exhibits

37

 

 

SIGNATURES

38

 

 

 


 

References to Assembly Biosciences, Inc.

Throughout this Quarterly Report on Form 10-Q, the “Company,” “Assembly,” “we,” “us,” and “our,” except where the context requires otherwise, refer to Assembly Biosciences, Inc. and its consolidated subsidiaries, and “our board of directors” or “the Board” refers to the board of directors of Assembly Biosciences, Inc.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” that are subject to certain risks and uncertainties, including, without limitation, those set forth in Part I, Item 1A of our Annual Report on Form 10-K filed with the U.S. Securities and Exchanges Commission (SEC) on March 11, 2022 (2021 Annual Report) and Part II, Item 1A of this Quarterly Report on Form 10-Q under the heading “Risk Factors,” that could cause actual results to materially differ. Such risks and uncertainties include, among other things:

 

our ability to initiate and complete clinical trials involving our therapeutic product candidates, including studies contemplated by our clinical collaboration agreements, in the currently anticipated timeframes;

 

safety and efficacy data from clinical studies may not warrant further development of our product candidates;

 

clinical and nonclinical data presented at conferences may not differentiate our product candidates from other companies’ candidates;

 

results of nonclinical studies may not be representative of disease behavior in a clinical setting and may not be predictive of the outcomes of clinical studies;

 

continued development and commercialization of our hepatitis B virus (HBV) product candidates, if successful, in the China territory will be dependent on, and subject to, our collaboration agreement governing our HBV-related activity in the China territory;

 

our ability to maintain financial resources necessary to continue our clinical studies and fund business operations; and

 

any impact that the COVID-19 pandemic may have on our business and operations, including initiation, enrollment and continuation of our clinical studies or timing of discussions with regulatory authorities.

You are urged to consider statements that include the words may, will, would, could, should, might, believes, hopes, estimates, projects, potential, expects, plans, anticipates, intends, continues, forecast, designed, goal or the negative of those words or other comparable words to be uncertain and forward-looking. In particular, forward-looking statements include, but are not limited to, statements regarding the timing of commencement of future clinical studies involving our therapeutic product candidates; our ability to successfully complete, and receive favorable results in, clinical trials for our product candidates; and the expected impact of the COVID-19 pandemic on our business and operations. We intend such forward-looking statements to be covered by the safe harbor provisions contained in Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Except as required by law, we assume no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

1


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ASSEMBLY BIOSCIENCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands except for share amounts and par value)

 

 

 

March 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

51,174

 

 

$

45,627

 

Marketable securities - short-term

 

 

71,826

 

 

 

101,000

 

Accounts receivable from collaborations

 

 

524

 

 

 

336

 

Prepaid expenses and other current assets

 

 

7,253

 

 

 

7,241

 

Total current assets

 

 

130,777

 

 

 

154,204

 

 

 

 

 

 

 

 

 

 

Marketable securities - long-term

 

 

23,459

 

 

 

27,972

 

Property and equipment, net

 

 

1,019

 

 

 

1,139

 

Operating lease right-of-use (ROU) assets

 

 

5,300

 

 

 

6,042

 

Other assets

 

 

2,175

 

 

 

1,703

 

Total assets

 

$

162,730

 

 

$

191,060

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

1,407

 

 

$

2,659

 

Accrued research and development expenses

 

 

3,596

 

 

 

3,400

 

Other accrued expenses

 

 

2,499

 

 

 

6,863

 

Operating lease liabilities - short-term

 

 

3,207

 

 

 

3,151

 

Total current liabilities

 

 

10,709

 

 

 

16,073

 

 

 

 

 

 

 

 

 

 

Deferred revenue

 

 

2,733

 

 

 

2,733

 

Operating lease liabilities - long-term

 

 

2,497

 

 

 

3,325

 

Total liabilities

 

 

15,939

 

 

 

22,131

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued or outstanding

 

 

 

 

 

 

Common stock, $0.001 par value; 100,000,000 shares authorized as of March 31, 2022 and December 31, 2021; 48,132,937 and 48,120,437 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

 

 

48

 

 

 

48

 

Additional paid-in capital

 

 

802,170

 

 

 

800,728

 

Accumulated other comprehensive loss

 

 

(908

)

 

 

(419

)

Accumulated deficit

 

 

(654,519

)

 

 

(631,428

)

Total stockholders' equity

 

 

146,791

 

 

 

168,929

 

Total liabilities and stockholders' equity

 

$

162,730

 

 

$

191,060

 

 

See Accompanying Notes to Condensed Consolidated Financial Statements

2


ASSEMBLY BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands except for share and per share amounts)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

 

2022

 

 

2021

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

Research and development

 

$

17,205

 

 

$

18,554

 

 

General and administrative

 

 

5,957

 

 

 

8,704

 

 

Total operating expenses

 

 

23,162

 

 

 

27,258

 

 

Loss from operations

 

 

(23,162

)

 

 

(27,258

)

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

 

 

 

 

 

 

 

Interest and other income, net

 

 

71

 

 

 

58

 

 

Total other income

 

 

71

 

 

 

58

 

 

Net loss

 

$

(23,091

)

 

$

(27,200

)

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

Unrealized loss on marketable securities

 

 

(489

)

 

 

(1

)

 

Comprehensive loss

 

$

(23,580

)

 

$

(27,201

)

 

 

 

 

 

 

 

 

 

 

 

Net loss per share, basic and diluted

 

$

(0.48

)

 

$

(0.69

)

 

Weighted average common shares outstanding, basic and diluted

 

 

48,123,930

 

 

 

39,679,734

 

 

 

See Accompanying Notes to Condensed Consolidated Financial Statements

 

3


 

ASSEMBLY BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands except for share amounts)

(Unaudited)

 

 

 

Common Stock

 

 

Additional

 

 

Accumulated

Other

 

 

 

 

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Paid-in

Capital

 

 

Comprehensive

Loss

 

 

Accumulated

Deficit

 

 

Stockholders'

Equity

 

Balance as of December 31, 2021

 

 

48,120,437

 

 

$

48

 

 

$

800,728

 

 

$

(419

)

 

$

(631,428

)

 

$

168,929

 

Issuance of common stock for settlement of restricted stock units (RSUs)

 

 

12,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on marketable debt securities

 

 

 

 

 

 

 

 

 

 

 

(489

)

 

 

 

 

 

(489

)

Stock-based compensation

 

 

 

 

 

 

 

 

1,442

 

 

 

 

 

 

 

 

 

1,442

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(23,091

)

 

 

(23,091

)

Balance as of March 31, 2022

 

 

48,132,937

 

 

$

48

 

 

$

802,170

 

 

$

(908

)

 

$

(654,519

)

 

$

146,791

 

 

 

 

 

Common Stock

 

 

Additional

 

 

Accumulated

Other

 

 

 

 

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Paid-in

Capital

 

 

Comprehensive

Loss

 

 

Accumulated

Deficit

 

 

Stockholders'

Equity

 

Balance as of December 31, 2020

 

 

34,026,680

 

 

$

34

 

 

$

742,387

 

 

$

(270

)

 

$

(501,573

)

 

$

240,578

 

Issuance of common stock under at-the-market (ATM) equity offering program, net of issuance costs

 

 

5,991,858

 

 

 

6

 

 

 

34,131

 

 

 

 

 

 

 

 

 

34,137

 

Issuance of common stock for settlement of RSUs

 

 

86,146

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on marketable debt securities

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

Stock-based compensation

 

 

 

 

 

 

 

 

(270

)

 

 

 

 

 

 

 

 

(270

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(27,200

)

 

 

(27,200

)

Balance as of March 31, 2021

 

 

40,104,684

 

 

$

40

 

 

$

776,248

 

 

$

(271

)

 

$

(528,773

)

 

$

247,244

 

 

See Accompanying Notes to Condensed Consolidated Financial Statements

 

4


 

ASSEMBLY BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(23,091

)

 

$

(27,200

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

120

 

 

 

107

 

Stock-based compensation

 

 

1,443

 

 

 

(286

)

Net amortization of investments in marketable debt securities

 

 

149

 

 

 

92

 

Non-cash rent expense

 

 

893

 

 

 

1,135

 

Loss on disposal of property and equipment

 

 

 

 

 

1,611

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable from collaboration

 

 

(188

)

 

 

1,027

 

Prepaid expenses and other current assets

 

 

(12

)

 

 

303

 

Other assets

 

 

(472

)

 

 

358

 

Accounts payable

 

 

(1,252

)

 

 

(1,036

)

Accrued research and development expenses

 

 

196

 

 

 

(102

)

Other accrued expenses

 

 

(4,365

)

 

 

(8,312

)

Operating lease liabilities

 

 

(923

)

 

 

(1,041

)

Net cash used in operating activities

 

 

(27,502

)

 

 

(33,344

)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

 

 

 

(3,078

)

Proceeds from sale of property and equipment

 

 

 

 

 

857

 

Purchases of marketable securities

 

 

(3,951

)

 

 

(49,213

)

Proceeds from maturities of marketable securities

 

 

30,000

 

 

 

66,450

 

Proceeds from sale of marketable securities

 

 

7,000

 

 

 

3,000

 

Net cash provided by investing activities

 

 

33,049

 

 

 

18,016

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Proceeds from the issuance of common stock under ATM equity offering program, net of issuance costs

 

 

 

 

 

34,137

 

Net cash provided by financing activities

 

 

 

 

 

34,137

 

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

 

5,547

 

 

 

18,809

 

Cash and cash equivalents at the beginning of the period

 

 

45,627

 

 

 

59,444

 

Cash and cash equivalents at the end of the period

 

$

51,174

 

 

$

78,253

 

Supplemental non-cash investing and financing activities

 

 

 

 

 

 

 

 

Operating lease liabilities arising from obtaining ROU assets

 

$

 

 

$

42

 

Remeasurement of lease liabilities arising from modification of ROU assets

 

$

 

 

$

(788

)

 

See Accompanying Notes to Condensed Consolidated Financial Statements

 

 

5


 

 

ASSEMBLY BIOSCIENCES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 - Nature of Business

Overview

Assembly Biosciences, Inc. (together with its subsidiaries, Assembly or the Company), incorporated in Delaware in October 2005, is a clinical-stage biotechnology company advancing a novel class of oral therapeutic candidates for the treatment of chronic hepatitis B virus (HBV) infection and other viral diseases. The Company operates in one segment and is headquartered in South San Francisco, California, with operations in California and China. Prior to the Company’s wind-down of its Microbiome program in January 2021, the Company also had operations in Connecticut.

The Company’s research and development programs are pursuing multiple drug candidates that inhibit the HBV replication cycle and block the generation of covalently closed circular DNA (cccDNA), with the aim of discovering and developing finite and curative therapies for patients with HBV. The Company has discovered several novel core inhibitors, which are small molecules that directly target and allosterically modify the HBV core (HBc) protein in a way that affects assembly and stability of HBV nucleocapsids and is currently advancing an early-stage program evaluating a novel small molecule approach to inhibit entry for both HBV and hepatitis delta viruses.

Liquidity

The Company has not derived any revenue from product sales to date and currently has no approved products. Once a product has been developed, it will need to be approved for sale by the U.S. Food and Drug Administration or an applicable foreign regulatory agency. Since inception, the Company’s operations have been financed primarily through the sale of equity securities, proceeds from the exercise of warrants and stock options, issuance of debt, and upfront payments related to collaboration agreements. The Company has incurred losses from operations since inception and expects to continue to incur substantial losses for the next several years as it continues its product development efforts. Management believes the Company currently has sufficient funds to meet its operating requirements for at least the next twelve months following the date these unaudited condensed consolidated financial statements are issued. If the Company cannot generate significant cash from its operations, it intends to obtain any additional funding it requires through strategic relationships, public or private equity or debt financings, grants or other arrangements. The Company cannot assure such funding will be available on reasonable terms, if at all. Market volatility resulting from the global novel coronavirus disease (COVID-19) pandemic or other factors could also adversely impact the Company’s ability to access capital when and as needed.

If the Company is unable to generate enough revenue from its collaborations, secure additional sources of funding or receive full and timely collections of amounts due, it may be necessary to significantly reduce the current rate of spending through reductions in staff and delaying, scaling back, or stopping certain research and development programs, including more costly clinical trials.

Note 2 - Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and pursuant to the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the SEC. In management’s opinion, the unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and include normal recurring adjustments necessary for the fair presentation of the Company’s financial position and its results of operations and comprehensive loss and its cash flows for the periods presented. These statements do not include all disclosures required by U.S. GAAP and should be read in conjunction with the Company’s audited consolidated financial statements and accompanying

6


 

notes for the fiscal year ended December 31, 2021, which are contained in the 2021 Annual Report. The results for the three months ended March 31, 2022 are not necessarily indicative of results to be expected for the entire year ending December 31, 2022 or future operating periods.

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Estimates inherent in the preparation of the accompanying unaudited condensed consolidated financial statements include estimates of costs incurred but not yet invoiced for research and development accruals, recoverability and useful lives of our long-lived assets, amounts receivable under collaboration agreements, measurement of operating lease liabilities, and the fair value of stock options, stock appreciation rights, and RSUs granted to employees, directors, and consultants.

The Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible these external factors could have an effect on the Company’s estimates and could cause actual results to differ materially from those estimates and assumptions.

Other Risks and Uncertainties

In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. The ongoing COVID-19 pandemic and its broad, global impacts, including supply chain disruptions, have impacted certain aspects of the Company’s business, including where and how the Company’s employees work in its labs and offices and how and when the Company’s nonclinical and clinical studies are conducted. Early in the pandemic, the Company’s clinical and preclinical studies were largely unaffected, but as the pandemic has continued, the Company has experienced enrollment delays for two of its multi-drug combination clinical studies, delayed animal studies and delayed shipping of compounds necessary for the Company’s research programs. Although the clinical studies that experienced enrollment delays are now fully enrolled, the lockdowns resulting from China’s strict “zero covid” policy are also impacting execution of one of these multi-drug clinical studies. The Company relies on contract research organizations (CROs), some of which are in China and India. While these CROs have experienced pandemic-related impacts from time to time, the latest shutdowns in China have impacted the Company more than earlier in the pandemic. The Company cannot at this time predict the specific extent, duration, or full impact the COVID-19 pandemic will have on its business, operations, strategy, prospects and financial condition and results. The impact of the COVID-19 pandemic on the Company’s financial performance will depend on future developments, including the duration and spread of the outbreak and related governmental advisories and restrictions. These developments and the impact of the COVID-19 pandemic on the financial markets and the overall economy are highly uncertain. If the financial markets and/or the overall economy are impacted for an extended period, the Company’s results may be adversely affected.

In addition, the study plan of the Company’s triple combination study with Antios Therapeutics, Inc. (Antios) initially included a site in Ukraine, but the study will no longer be conducted there due to the instability resulting from Russia’s invasion. These changes to the Company’s study plan will result in a delayed data readout.

7


 

Income Taxes

Effective January 1, 2022, a provision of the Tax Cuts and Jobs Act (TCJA) has taken effect creating a significant change to the treatment of research and experimental expenditures under Section 174 of the IRC (Sec. 174 expenses). Historically, businesses have had the option of deducting Sec. 174 expenses in the year incurred or capitalizing and amortizing the costs over five years. The new TCJA provision, however, eliminates this option and will require Sec. 174 expenses associated with research conducted in the U.S to be capitalized and amortized over a five-year period. For expenses associated with research outside of the United States, Sec. 174 expenses will be capitalized and amortized over a 15-year period. The Company prepared an analysis of the tax impact of capitalizing and amortizing these costs over the required periods and for calendar year 2022, it is expecting to be in a loss position after the estimated addback.

Net Loss per Share

Basic net loss per share of common stock excludes dilution and is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share of common stock reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity unless inclusion of such shares would be anti-dilutive.

     A reconciliation of the numerators and the denominators of the basic and diluted net loss per common share computations is as follows (in thousands, except per share amounts):

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Numerator:

 

 

 

 

 

 

 

 

Net loss

 

$

(23,091

)

 

$

(27,200

)

Denominator:

 

 

 

 

 

 

 

 

Weighted average common shares and

   pre-funded warrants outstanding - basic and diluted

 

 

48,123,930

 

 

 

39,679,734

 

Net loss per share - basic and diluted

 

$

(0.48

)

 

$

(0.69

)

 

Securities excluded from the computation of diluted net loss per share because including them would have been antidilutive are as follows:

 

 

 

March 31,

 

 

 

2022

 

 

2021

 

Options to purchase common stock

 

 

7,475,876

 

 

 

7,382,515

 

Common stock subject to purchase under our Employee Stock Purchase Plan (ESPP)

 

 

129,107

 

 

 

44,870

 

Unvested RSUs

 

 

1,553,755

 

 

 

666,574

 

Total

 

 

9,158,738

 

 

 

8,093,959

 

 

Note 3 – Fair Value Measurements and Investments in Marketable Securities

The carrying amounts of cash equivalents and marketable securities approximate their fair value based upon quoted market prices. Certain of the Company’s financial instruments are not measured at fair value on a recurring basis, but are recorded at amounts that approximate their fair value due to their liquid or short-term nature, such as cash, accounts receivable, accounts payable and accrued expenses.

The Company uses the following three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs to value its financial instruments:

Level 1: Observable inputs such as unadjusted quoted prices in active markets for identical instruments.

Level 2: Quoted prices for similar instruments that are directly or indirectly observable in the marketplace.

8


 

Level 3: Significant unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.

Investments in marketable securities consisted of the following (in thousands):

 

 

March 31, 2022

 

 

 

Amortized

Cost

 

 

Gross

Unrealized

Gain

 

 

Gross

Unrealized

Loss

 

 

Fair Value

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market fund

 

$

48,361

 

 

$

 

 

$

 

 

$

48,361

 

Total cash equivalents

 

 

48,361

 

 

 

 

 

 

 

 

 

48,361

 

Short-term marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. and foreign corporate debt securities

 

 

4,097

 

 

 

 

 

 

(63

)

 

 

4,034

 

Asset-backed securities

 

 

21,978

 

 

 

 

 

 

(97

)

 

 

21,881

 

U.S. and foreign commercial paper

 

 

45,913

 

 

 

 

 

 

(2

)

 

 

45,911

 

Total short-term marketable securities

 

 

71,988

 

 

 

 

 

 

(162

)

 

 

71,826

 

Long-term marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. and foreign corporate debt securities

 

 

14,966

 

 

 

 

 

 

(280

)

 

 

14,686

 

U.S. treasury securities

 

 

8,966

 

 

 

 

 

 

(193

)

 

 

8,773

 

Total long-term marketable securities

 

 

23,932

 

 

 

 

 

 

(473

)

 

 

23,459

 

Total cash equivalents and marketable securities

 

$

144,281

 

 

$

 

 

$

(635

)

 

$

143,646

 

 

 

 

 

December 31, 2021

 

 

 

Amortized

Cost

 

 

Gross

Unrealized

Gain

 

 

Gross

Unrealized

Loss

 

 

Fair Value

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market fund

 

$

42,507

 

 

$

 

 

$

 

 

$

42,507

 

Total cash equivalents

 

 

42,507

 

 

 

 

 

 

 

 

 

42,507

 

Short-term marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. and foreign corporate debt securities

 

 

7,015

 

 

 

 

 

 

(2

)

 

 

7,013

 

Asset-backed securities

 

 

29,097

 

 

 

 

 

 

(38

)

 

 

29,059

 

U.S. and foreign commercial paper

 

 

64,929

 

 

 

 

 

 

(1

)

 

 

64,928

 

Total short-term marketable securities

 

 

101,041

 

 

 

 

 

 

(41

)

 

 

101,000

 

Long-term marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. and foreign corporate debt securities

 

 

19,117

 

 

 

 

 

 

(74

)

 

 

19,043

 

U.S. treasury securities

 

 

8,960