UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
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:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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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.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 |
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Smaller reporting company |
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Emerging growth company |
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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 4, 2023, the registrant had
Table of Contents
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PART I. |
3 |
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Item 1. |
3 |
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3 |
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4 |
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5 |
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6 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
7 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
16 |
Item 3. |
24 |
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Item 4. |
24 |
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PART II. |
25 |
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Item 1. |
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Item 1A. |
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Item 2. |
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Item 3. |
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Item 4. |
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Item 5. |
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Item 6. |
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28 |
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i
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements with respect to, among other things, our operations and financial performance. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, business strategy and plans and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” "estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “could,” “target,” “predict,” “seek” and similar expressions are intended to identify forward-looking statements. We include forward-looking information in our discussion of the following, among other topics, the initiation, timing, progress and results of our current and future clinical trials, including disclosing initial or preliminary data from our CYT-0851 combination cohorts with capecitabine and gemcitabine in mid-2023, advancing CYT-0851 into one or more expansion cohorts in 2023, advancing CYT-0851 into a randomized phase 2 clinical trial with registrational intent in platinum resistant ovarian cancer; and our estimates regarding our cash runway, expenses, future revenue, capital requirements and needs for additional financing.
These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those referenced in the section titled “Risk Factors,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the U.S. Securities and Exchange Commission on March 23, 2023, which could cause actual results to differ materially. Moreover, we operate in a very competitive and rapidly changing environment and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in or implied by any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
The forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date of this report. You should not rely upon forward-looking statements as predictions of future events. We cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q to conform these statements to actual results or reflect interim developments, except as required by law.
Some of the key factors that could cause actual results to differ include that:
• Our announced strategic prioritization and workforce reduction may not result in CYT-0851 being successfully advanced, may not result in anticipated savings, and may disrupt our business, and we may pursue additional strategic alternatives.
• We have a limited operating history and have no products approved for commercial sale, which may make it difficult for you to evaluate our current business and predict our future success and viability.
• We have incurred significant losses since inception. We expect to incur losses for the foreseeable future and may never achieve or maintain profitability.
• We will need substantial additional funding. If we are unable to raise capital when needed, we will be forced to delay, reduce, or eliminate our research and product development programs or future commercialization efforts.
• We have never successfully completed any clinical trials, and we may be unable to do so for CYT-0851 or any future drug candidates we develop.
• Our clinical trials may fail to demonstrate adequately the safety and efficacy of CYT-0851 or any future drug candidates, which would delay or prevent further clinical development of those candidates, or prevent marketing approval from FDA or similar regulatory authorities.
• Positive results from the clinical trials and preclinical studies of our drug candidates are not necessarily predictive of the results of later clinical trials or preclinical studies. If we cannot replicate the positive results from our clinical trials and preclinical studies of our drug candidates in our later clinical trials preclinical studies, we may be unable to successfully develop, obtain regulatory approval for and commercialize our drug candidates.
• Our clinical trials may fail to demonstrate adequately the safety and efficacy of any of our drug candidates, which would delay or prevent further clinical development of those candidates, or prevent marketing approval from FDA or similar regulatory authorities.
• We are developing CYT-0851 for use in combination with other therapies, which exposes us to additional risks.
1
• If we are unable to successfully develop and commercialize companion diagnostic tests for our drug candidates, or experience significant delays in doing so, we may not realize the full commercial potential of our drug candidates.
• Synthetic lethality represents an emerging class of precision medicine targets, and negative perceptions of the efficacy, safety or tolerability of this class of targets, including any that we develop, could adversely affect our ability to conduct our business, advance our drug candidates or obtain regulatory approvals.
• If we are unable to adequately protect and enforce our intellectual property or obtain and maintain patent protection for our technology and products or if the scope of the patent protection obtained is not sufficiently broad, our competitors or other third parties could develop and commercialize technology and products similar or identical to ours, and our ability to successfully develop and commercialize our technology and products may be impaired.
• Unfavorable global economic conditions could adversely affect our business, financial condition or results of operations.
2
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
CYTEIR THERAPEUTICS, INC.
Condensed consolidated balance sheets
(in thousands, except share and per share amounts) |
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March 31, |
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December 31, |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Prepaid expenses and other current assets |
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Total current assets |
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$ |
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$ |
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Property and equipment, net |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses and other current liabilities |
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Total current liabilities |
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$ |
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$ |
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Other long term liabilities |
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Total liabilities |
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$ |
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$ |
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Stockholders’ equity: |
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, $ |
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— |
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— |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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( |
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( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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See accompanying notes to condensed consolidated financial statements.
3
CYTEIR THERAPEUTICS, INC.
Condensed consolidated statements of operations
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Three Months Ended |
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(in thousands, except share and per share amounts) |
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2023 |
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2022 |
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Operating expenses: |
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Research and development |
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$ |
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$ |
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General and administrative |
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Total operating expenses |
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Loss from operations |
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( |
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( |
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Other income (expense): |
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Interest income |
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Loss on disposal of property and equipment |
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( |
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- |
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Gain on lease terminations and modification |
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- |
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Total other income (expense) |
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Net loss |
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$ |
( |
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$ |
( |
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Net loss per share—basic and diluted |
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$ |
( |
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$ |
( |
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Weighted-average common stock outstanding—basic and diluted |
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See accompanying notes to condensed consolidated financial statements.
4
CYTEIR THERAPEUTICS, INC.
Condensed consolidated statements of stockholders’ equity
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Common stock |
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(in thousands, except share and per share amounts) |
Shares |
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Amount |
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Additional |
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Accumulated |
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Total |
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Balance At December 31, 2021 |
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$ |
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$ |
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$ |
( |
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$ |
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Exercise of common stock options |
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— |
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— |
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Vesting of early exercised options |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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( |
) |
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( |
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Balance At March 31, 2022 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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Common stock |
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(in thousands, except share and per share amounts) |
Shares |
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Amount |
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Additional |
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Accumulated |
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Total |
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Balance At December 31, 2022 |
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$ |
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$ |
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$ |
( |
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$ |
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Exercise of common stock options |
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— |
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— |
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Vesting of early exercised options |
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— |
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— |
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Issuance of common stock under ESPP |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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( |
) |
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( |
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Balance At March 31, 2023 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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See accompanying notes to condensed consolidated financial statements.
5
CYTEIR THERAPEUTICS, INC.
Condensed consolidated statements of cash flows
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Three Months Ended |
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(in thousands) |
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2023 |
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2022 |
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Cash flows from operating activities: |
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Net loss |
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$ |
( |
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$ |
( |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization expense |
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Stock-based compensation |
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Non-cash lease expense |
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Loss on disposal of property and equipment |
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— |
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Gain on lease terminations and modification |
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( |
) |
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— |
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Changes in operating assets and liabilities: |
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Prepaid expenses and other current assets |
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( |
) |
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Accounts payable |
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( |
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Accrued expenses and other current liabilities |
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( |
) |
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( |
) |
Net cash used in operating activities |
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$ |
( |
) |
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$ |
( |
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Cash flows from investing activities: |
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Purchases of property and equipment |
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— |
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( |
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Proceeds from sales of property and equipment |
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— |
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Net cash provided by (used) in investing activities |
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$ |
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$ |
( |
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Cash flows from financing activities: |
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Proceeds from issuance of common stock under ESPP |
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— |
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Proceeds from exercise of stock options |
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Net cash provided by financing activities |
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$ |
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$ |
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Net decrease in cash, cash equivalents, and restricted cash |
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( |
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( |
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Cash, cash equivalents and restricted cash at beginning of period |
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Cash, cash equivalents and restricted cash at end of period |
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$ |
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$ |
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Supplemental disclosure of cash flows |
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Property and equipment purchases in accounts payable |
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$ |
— |
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$ |
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Remeasurement of operating lease liabilities and right-of-use assets |
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$ |
( |
) |
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— |
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Vesting of early exercised options |
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$ |
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$ |
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The following table provides a reconciliation of the cash, cash equivalents, and restricted cash balances as of each of the dates shown below:
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Three Months Ended |
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2023 |
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2022 |
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Cash and cash equivalents |
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$ |
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$ |
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Total cash, cash equivalents, and restricted cash |
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$ |
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$ |
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See accompanying notes to condensed consolidated financial statements.
6
CYTEIR THERAPEUTICS, INC.
Notes to condensed consolidated financial statements – (unaudited)
1. Nature of the business
Cyteir Therapeutics, Inc., (the “Company”) is a clinical-stage oncology company that is focused on the development of CYT-0851, an oral investigational drug candidate that inhibits monocarboxylate transporters. Cyteir’s current priority in CYT-0851 development is in combination with capecitabine or gemcitabine in a phase 1/2 clinical study, including patients with advanced ovarian cancer or other solid tumors, respectively. Through 2022, the Company used its expertise in DNA damage response biology and a disciplined approach to select targets for other novel, differentiated programs with the aim of building a patient-centric portfolio of effective cancer therapies. In January 2023, the Company announced a strategic prioritization that included the discontinuation of these preclinical efforts.
The Company was formed as a Delaware corporation on June 4, 2012, pursuant to the General Corporation Law of the State of Delaware. The Company has a principal office in Lexington, Massachusetts.
Liquidity
The Company has incurred net operating losses since inception and has funded its operations primarily with proceeds from the sale of redeemable convertible preferred stock and the issuance of common stock in its initial public offering, or IPO. As of March 31, 2023, the Company had cash and cash equivalents of $
The Company expects that its cash and cash equivalents as of March 31, 2023 will be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months from the date these condensed consolidated financial statements are available to be issued.
The Company will need additional funding to support its planned operating activities. There can be no assurances, however, that the current operating plan will be achieved or that additional funding will be available on terms acceptable to the Company, or at all. If the Company is unable to obtain sufficient funding, it could be required to delay its development efforts, limit activities and reduce research and development costs, which could adversely affect its business prospects.
COVID-19 considerations
The development of the Company’s product candidates could be disrupted and materially adversely affected in by a pandemic, epidemic or outbreak of an infectious disease, such as the ongoing COVID-19 pandemic. These disruptions related to the COVID pandemic could affect the Company’s business, including, but not limited to, the ability of the Company's clinical research organizations, or CROs, to conduct clinical trials in countries outside of the United States, the Company’s ability to identify suitable clinical sites or open those sites for enrollment due to competing business needs, the Company’s ability to enroll patients due to their fear of coming into medical facilities and their perceived risk of becoming infected at such facilities, and the Company’s ability to monitor the clinical data generated at its clinical sites, required for completion of clinical trials.
7
2. Summary of significant accounting policies
The Company's significant accounting policies are disclosed in the audited consolidated financial statements for the years ended December 31, 2022 and 2021 ("audited financial statements"), which are included in the Company's Annual Report on Form 10-K that was filed with the SEC on March 23, 2023. Since the date of the financial statements, there have been no changes to the Company's significant accounting policies, except as noted below.
Interim Financial Information
8
3. Fair value measurement
The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis (in thousands):
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March 31, 2023 |
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Assets: |
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Total |
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Quoted prices in |
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Significant |
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Significant |
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Cash equivalents: |
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Money market funds |
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$ |
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$ |
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$ |
— |
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$ |
— |
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Total assets |
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$ |
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$ |
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$ |
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$ |
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December 31, 2022 |
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Assets |
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Total |
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Quoted prices in |
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Significant |
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Significant |
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Cash equivalents: |
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Money market funds |
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$ |
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$ |
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$ |
— |
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$ |
— |
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Total assets |
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$ |
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$ |
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$ |
— |
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$ |
— |
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During the three months ended March 31, 2023 and the year ended December 31, 2022, there were
The Company uses the carrying amounts of its restricted cash, prepaid expenses and other current assets, accounts payable and accrued expenses and other current liabilities to approximate their fair value due to the short-term nature of these amounts.
4. Prepaid expenses and other current assets
Prepaid expenses and other current assets consisted of the following (in thousands):
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March 31, |
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December 31, |
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Prepaid research and development expenses |
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$ |
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$ |
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Prepaid insurance |
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Prepaid other |
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Other receivables |
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Total |
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$ |
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$ |
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9
5. Property and equipment, net
On January 19, 2023, the Company announced a strategic prioritization of clinical development of CYT-0851, which included the discontinuation of preclinical efforts and a workforce reduction by approximately
Property and equipment, net consisted of the following (in thousands):
Acquisition cost |
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Laboratory and computer equipment |
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Leasehold improvements |
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Total |
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As of December 31, 2022 |
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$ |
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$ |
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$ |
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Disposals |
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( |
) |
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( |
) |
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( |
) |
As of March 31, 2023 |
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$ |
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$ |
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$ |
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Accumulated depreciation and amortization |
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Laboratory and computer equipment |
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Leasehold improvements |
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Total |
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As of December 31, 2022 |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
Depreciation expense |
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( |
) |
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( |
) |
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( |
) |
Disposals |
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As of March 31, 2023 |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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Carrying amount |
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Laboratory and computer equipment |
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Leasehold improvements |
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Total |
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As of December 31, 2022 |
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$ |
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$ |
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$ |
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As of March 31, 2023 |
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$ |
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$ |
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$ |
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For both the three months ended March 31, 2023 and 2022, depreciation and amortization expense related to property and equipment was $
6. Accrued expenses and other current liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
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March 31, |
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December 31, |
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Accrued research and development expenses |
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$ |
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$ |
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Accrued compensation |
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Accrued other |
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Operating lease liabilities |
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Total accrued expenses and other current liabilities |
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$ |
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|
$ |
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||
7. Common stock
The voting, dividend and liquidation rights of the holders of the Company’s common stock are subject to and qualified by the rights, powers and preferences of the holders of the preferred stock as set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
As of March 31, 2023 and December 31, 2022, the Company has reserved the following shares of common stock for the potential exercise of stock options:
10
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March 31, |
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December 31, |
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2023 |
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2022 |
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Options to purchase common stock |
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Remaining shares reserved for future issuance |
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Total |
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8. Stock-based compensation
2012 Stock Incentive Plan
The Company adopted the 2012 Stock Incentive Plan (the “2012 Plan”) in November 2012 pursuant to which the Company can issue incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards and other stock awards. Recipients of stock options or stock appreciate rights shall be eligible to purchase shares of the Company’s common stock at an exercise price equal to the estimated fair market value of such stock on the date of grant. The exercise price may be less than fair market value if the stock award is granted pursuant to an assumption or substitution for another stock award in the event of a merger or sale of the Company. The maximum term of options granted under the 2012 Plan is
2021 Equity Incentive Plan
In June 2021, the Company’s board of directors adopted and the Company’s stockholders approved the 2021 Plan, which became effective immediately prior to the effectiveness of the registration statement for the IPO. The 2021 Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards. Upon effectiveness of the 2021 Plan, the number of shares of common stock reserved for issuance under the 2021 Plan was
At March 31, 2023,
2021 Employee Stock Purchase Plan
In June 2021, the Company’s board of directors adopted, and the Company’s stockholders approved, the 2021 Employee Stock Purchase Plan (the “ESPP”), which became effective immediately prior to the effectiveness of the registration statement for the IPO. The ESPP is administered by the compensation committee of the Company’s board of directors, except that the Company’s board of directors may at any time act as the administrator of the ESPP. The ESPP provides participating employees with the opportunity to purchase shares of common stock, with an initial aggregate share pool of
11
The ESPP allows eligible employees to authorize payroll deductions of between 1% and 15% of their regular base salary or wages to be applied toward the purchase of shares of the Company's common stock on the last trading day of the offering period, subject to certain limitations contained in the ESPP. Participating employees will purchase shares of the Company's common stock at a discount of 15% on the lesser of the closing price of the Company's common stock on the Nasdaq Global Select Market (i) on the first trading day of the offering period or (ii) the last trading day of the offering period. The Company utilizes the Black Scholes option pricing model to compute the fair market value of the shares subject to outstanding options under the ESPP and compensation expense is recognized over the offering period.
Participation in the ESPP is voluntary. Eligible employees become participants in the ESPP by enrolling in the plan and authorizing payroll deductions in accordance with the terms of the ESPP. At the end of each offering period, accumulated payroll deductions are used to purchase the Company’s shares at the discounted price. The Company makes no contributions to the ESPP. A participant may withdraw from the ESPP or reduce contributions to the ESPP during an offering period. If the participant elects to withdraw during an offering period, all contributions are refunded as soon as administratively practicable. If a participant elects to withdraw during an offering period, the participant may not re-enroll in the current offering but may elect to participate in future offerings, subject to the terms of the ESPP. Only whole shares of the Company may be purchased under the ESPP.
The Company issued
Early exercise of unvested stock options
Shares purchased by employees pursuant to the early exercise of stock options are not deemed, for accounting purposes, to be outstanding shares until those shares vest according to their respective vesting schedules. Cash received from employee exercises of unvested options is included in long-term liabilities on the condensed consolidated balance sheets. Amounts recorded are reclassified to common stock and additional paid-in capital as the shares vest. As of March 31, 2023 and December 31, 2022, there were
Stock option valuation
The assumptions that the Company used in the Black Scholes option-pricing model to determine the grant date fair value of stock options granted were as follows:
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March 31, |
December 31, |
Risk-free interest rate range |
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Dividend yield |
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Expected life of options (years) |
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Volatility rate range |
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The following table summarizes the Company’s stock option activity during the three months ended March 31, 2023:
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Number of |
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Weighted average |
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Weighted average |
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Aggregate intrinsic |
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Outstanding as of December 31, 2022 |
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|
$ |
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$ |
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Granted |
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$ |
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|
|
— |
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— |
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Exercised |
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( |
) |
|
$ |
|
|
|
— |
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— |
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Forfeited or cancelled |
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( |
) |
|
$ |
|
|
|
— |
|
|
|
— |
|
|
Outstanding as of March 31, 2023 |
|
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|
|
$ |
|
|
|
|
|
$ |
|
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Options vested and exercisable as of March 31, 2023 |
|
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|
|
$ |
|
|
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$ |
|
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As of March 31, 2023, there was $
12
The aggregate intrinsic value of options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the common stock as of the end of the reporting period. The weighted-average grant date fair value of the Company’s stock options granted during the three months ended March 31, 2023 and 2022 was $
The total fair value of options vested during the three months ended March 31, 2023 and 2022 was $
Stock-based compensation expense
Stock-based compensation expense included in the Company’s condensed consolidated statements of operations is as follows (in thousands):
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