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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

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

 

For the quarterly period ended September 30, 2021

 

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 001-37566

 

SYNLOGIC, INC.

(Exact name of Registrant as specified in its Charter)

 

Delaware

(State or other jurisdiction of

incorporation or organization)

 

26-1824804

(I.R.S. Employer

Identification No.)

 

 

 

301 Binney St., Suite 402

Cambridge, MA

(Address of principal executive offices)

 

02142

(Zip Code)

(617) 401-9975

(Registrant’s telephone number, including area code)

 

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

 

Title of each class

Trading Symbol

Name of exchange on which registered

Common Stock, par value $0.001 per share

SYBX

The Nasdaq Capital 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 November 3, 2021, there were 69,709,236 shares of the registrant’s common stock, par value $0.001 per share, outstanding.

 

 


 

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained herein are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

 

 

the success of our research and development efforts;

 

the initiation, progress, timing, costs and results of clinical trials for our product candidates;

 

the time and costs involved in obtaining regulatory approvals for our product candidates;

 

the success of our collaborations with third parties;

 

the progress, timing and costs involved in developing manufacturing processes and in manufacturing products, as well as agreements with third-party manufacturers;

 

the rate of progress and cost of our commercialization activities;

 

the expenses we incur in marketing and selling our product candidates;

 

the revenue generated by sales of our product candidates;

 

the emergence of competing or complementary technological developments;

 

the terms and timing of any additional collaborative, licensing or other arrangements that we may establish;

 

the acquisition of businesses, products and technologies;

 

our need to implement additional infrastructure and internal systems;

 

our need to add personnel and financial and management information systems to support our product development and potential future commercialization efforts, and to enable us to operate as a public company;

 

the development of major public health concerns, including the novel coronavirus outbreak or other pandemics arising globally, and the current and future impact of it and COVID-19 on our clinical trials, business operations and funding requirements; and

 

other risks and uncertainties, including those listed under Part II, Item 1A. “Risk Factors”.

Any forward-looking statements in this Quarterly Report on Form 10-Q reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Part II, Item 1A. “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

This Quarterly Report on Form 10-Q also contains estimates, projections and other information concerning our industry, our business, and the markets for certain diseases, including data regarding the incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources.

 

 


 

SYNLOGIC, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

 

 

 

Page

 

 

 

PART I - FINANCIAL INFORMATION

 

 

 

 

 

Item 1. Financial Statements

 

 

 

 

 

Unaudited Consolidated Balance Sheets

 

1

 

 

 

Unaudited Consolidated Statements of Operations and Comprehensive Loss

 

2

 

 

 

Unaudited Consolidated Statements of Stockholders’ Equity

 

3

 

 

 

Unaudited Consolidated Statements of Cash Flows

 

4

 

 

 

Notes to Unaudited Consolidated Financial Statements

 

5

 

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

15

 

 

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

26

 

 

 

Item 4. Controls and Procedures

 

26

 

 

 

PART II - OTHER INFORMATION

 

 

 

 

 

Item 1. Legal Proceedings

 

27

 

 

 

Item 1A. Risk Factors

 

27

 

 

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

57

 

 

 

Item 3. Defaults Upon Senior Securities

 

57

 

 

 

Item 4. Mine Safety Disclosures

 

57

 

 

 

Item 5. Other Information

 

57

 

 

 

Item 6. Exhibits

 

58

 

 

 

Signatures

 

59

 

 

 

 


 

SYNlogic, Inc. and SUBSIDIARIES

Unaudited Consolidated Balance Sheets

(In thousands, except share amounts)

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

62,925

 

 

$

32,507

 

Short-term marketable securities

 

 

87,129

 

 

 

67,937

 

Accounts receivable

 

 

1,000

 

 

 

 

Prepaid expenses and other current assets

 

 

5,548

 

 

 

6,402

 

Total current assets

 

 

156,602

 

 

 

106,846

 

Property and equipment, net

 

 

9,625

 

 

 

10,776

 

Right of use asset - operating lease

 

 

14,455

 

 

 

15,527

 

Restricted cash

 

 

1,097

 

 

 

1,097

 

Prepaid research and development, net of current portion

 

 

8,750

 

 

 

9,590

 

Other assets

 

 

7

 

 

 

4

 

Total assets

 

$

190,536

 

 

$

143,840

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,522

 

 

$

1,995

 

Accrued expenses

 

 

3,984

 

 

 

3,773

 

Deferred revenue

 

 

988

 

 

 

 

Lease liability - operating lease

 

 

3,085

 

 

 

2,531

 

Finance lease obligations

 

 

12

 

 

 

2

 

Total current liabilities

 

 

10,591

 

 

 

8,301

 

Long-term liabilities:

 

 

 

 

 

 

 

 

Lease liability - operating lease, net of current portion

 

 

18,211

 

 

 

20,273

 

Finance lease obligations, net of current portion

 

 

21

 

 

 

 

Other long-term liabilities

 

 

131

 

 

 

131

 

Total long-term liabilities

 

 

18,363

 

 

 

20,404

 

Commitments and contingencies (Note 11)

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

 

Common stock, $0.001 par value

 

 

 

 

 

 

 

 

250,000,000 shares authorized as of September 30, 2021 and December 31, 2020.

   69,707,541 shares issued and outstanding as of September 30, 2021 and

   38,183,273 shares issued and outstanding as of December 31, 2020.

 

 

70

 

 

 

38

 

Additional paid-in capital

 

 

437,286

 

 

 

345,394

 

Accumulated other comprehensive income

 

 

9

 

 

 

14

 

Accumulated deficit

 

 

(275,783

)

 

 

(230,311

)

Total stockholders' equity

 

 

161,582

 

 

 

115,135

 

Total liabilities and stockholders' equity

 

$

190,536

 

 

$

143,840

 

 

The accompanying notes are an integral part of the unaudited consolidated financial statements.

1


 

Synlogic, INC. aND SUBSIDIARIES

Unaudited Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

 

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

 

September 30, 2021

 

 

September 30, 2020

 

 

September 30, 2021

 

 

September 30, 2020

 

Revenue

$

916

 

 

$

 

 

$

1,162

 

 

$

545

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

13,355

 

 

 

10,481

 

 

 

35,254

 

 

 

36,067

 

General and administrative

 

3,616

 

 

 

2,956

 

 

 

11,528

 

 

 

10,250

 

Total operating expenses

 

16,971

 

 

 

13,437

 

 

 

46,782

 

 

 

46,317

 

Loss from operations

 

(16,055

)

 

 

(13,437

)

 

 

(45,620

)

 

 

(45,772

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and investment income

 

41

 

 

 

216

 

 

 

151

 

 

 

1,196

 

Interest expense

 

(1

)

 

 

(1

)

 

 

(2

)

 

 

(6

)

Other expense

 

(1

)

 

 

 

 

 

(1

)

 

 

(3

)

Other income (expense), net

 

39

 

 

 

215

 

 

 

148

 

 

 

1,187

 

Net loss

$

(16,016

)

 

$

(13,222

)

 

$

(45,472

)

 

$

(44,585

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share - basic and diluted

$

(0.29

)

 

$

(0.36

)

 

$

(0.91

)

 

$

(1.27

)

Weighted-average common stock outstanding - basic and diluted

 

55,336,936

 

 

 

36,297,780

 

 

 

49,730,231

 

 

 

35,174,203

 

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(16,016

)

 

$

(13,222

)

 

$

(45,472

)

 

$

(44,585

)

Net unrealized (loss) gain on marketable securities

 

(2

)

 

 

(135

)

 

 

(5

)

 

 

(31

)

Comprehensive loss

$

(16,018

)

 

$

(13,357

)

 

$

(45,477

)

 

$

(44,616

)

 

The accompanying notes are an integral part of the unaudited consolidated financial statements.

 

 

2


 

Synlogic, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Stockholders’ Equity

(In thousands, except share amounts)

 

 

Common stock

$0.001 par value

 

Additional

paid-in

 

Accumulated

other

comprehensive

 

Accumulated

 

Total

 

 

Shares

 

Amount

 

capital

 

income (loss)

 

deficit

 

equity

 

 

For the Three Months Ended September 30, 2021

 

Balance at June 30, 2021

 

52,375,344

 

$

52

 

$

387,782

 

$

11

 

$

(259,767

)

$

128,078

 

Proceeds from issuance of common stock, net of issuance costs

 

17,250,000

 

 

18

 

 

48,426

 

 

 

 

 

 

48,444

 

Exercise of options

 

93,033

 

 

 

 

209

 

 

 

 

 

 

209

 

Issuance of common stock under employee stock purchase plan

 

23,592

 

 

 

 

61

 

 

 

 

 

 

61

 

Cancellation of restricted stock

 

(34,428

)

 

 

 

 

 

 

 

 

 

 

Equity-based compensation expense

 

 

 

 

 

808

 

 

 

 

 

 

808

 

Unrealized gain (loss) on securities

 

 

 

 

 

 

 

(2

)

 

 

 

(2

)

Net loss

 

 

 

 

 

 

 

 

 

(16,016

)

 

(16,016

)

Balance at September 30, 2021

 

69,707,541

 

$

70

 

$

437,286

 

$

9

 

$

(275,783

)

$

161,582

 

 

For the Three Months Ended September 30, 2020

 

Balance at June 30, 2020

 

34,145,111

 

$

34

 

$

333,925

 

$

214

 

$

(202,501

)

$

131,672

 

Issuance of common stock under employee stock purchase plan

 

29,857

 

 

 

 

42

 

 

 

 

 

 

42

 

Exercise of options

 

724

 

 

 

 

1

 

 

 

 

 

 

1

 

Proceeds from issuance of common stock in connection with ATM offering, net of issuance costs

 

533,711

 

 

1

 

 

1,203

 

 

 

 

 

 

1,204

 

Cancellation of restricted stock

 

(37,351

)

 

 

 

 

 

 

 

 

 

 

Equity-based compensation expense

 

 

 

 

 

935

 

 

 

 

 

 

935

 

Unrealized gain (loss) on securities

 

 

 

 

 

 

 

(135

)

 

 

 

(135

)

Net loss

 

 

 

 

 

 

 

 

 

(13,222

)

 

(13,222

)

Balance at September 30, 2020

 

34,672,052

 

$

35

 

$

336,106

 

$

79

 

$

(215,723

)

$

120,497

 

 

For the Nine Months Ended September 30, 2021

 

Balance at December 31, 2020

 

38,183,273

 

$

38

 

$

345,394

 

$

14

 

$

(230,311

)

$

115,135

 

Proceeds from issuance of common stock in connection with ATM offering, net of issuance costs

 

2,447,211

 

 

3

 

 

8,047

 

 

 

 

 

 

8,050

 

Proceeds from issuance of common stock, net of issuance costs

 

28,750,000

 

 

29

 

 

80,990

 

 

 

 

 

 

81,019

 

Exercise of options

 

125,146

 

 

 

 

273

 

 

 

 

 

 

273

 

Issuance of restricted stock

 

242,454

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock under employee stock purchase plan

 

42,653

 

 

 

 

94

 

 

 

 

 

 

94

 

Restricted stock awards withheld for payment of employees' withholding tax liability

 

(18,187

)

 

 

 

(73

)

 

 

 

 

 

(73

)

Cancellation of restricted stock

 

(65,009

)

 

 

 

 

 

 

 

 

 

 

Equity-based compensation expense

 

 

 

 

 

2,561

 

 

 

 

 

 

2,561

 

Unrealized gain (loss) on securities

 

 

 

 

 

 

 

(5

)

 

 

 

(5

)

Net loss

 

 

 

 

 

 

 

 

 

(45,472

)

 

(45,472

)

Balance at September 30, 2021

 

69,707,541

 

$

70

 

$

437,286

 

$

9

 

$

(275,783

)

$

161,582

 

 

For the Nine Months Ended September 30, 2020

 

Balance at December 31, 2019

 

32,266,814

 

$

33

 

$

327,900

 

$

110

 

$

(171,138

)

$

156,905

 

Issuance of common stock under employee stock purchase plan

 

29,857

 

 

 

 

42

 

 

 

 

 

 

42

 

Exercise of options

 

724

 

 

 

 

1

 

 

 

 

 

 

1

 

Issuance of restricted stock

 

226,335

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock in connection with ATM offering, net of issuance costs

 

2,312,693

 

 

2

 

 

5,058

 

 

 

 

 

 

5,060

 

Cancellation of restricted stock

 

(164,371

)

 

 

 

 

 

 

 

 

 

 

Equity-based compensation expense

 

 

 

 

 

3,105

 

 

 

 

 

 

3,105

 

Unrealized gain (loss) on securities

 

 

 

 

 

 

 

(31

)

 

 

 

(31

)

Net loss

 

 

 

 

 

 

 

 

 

(44,585

)

 

(44,585

)

Balance at September 30, 2020

 

34,672,052

 

$

35

 

$

336,106

 

$

79

 

$

(215,723

)

$

120,497

 

 

The accompanying notes are an integral part of the unaudited consolidated financial statements.

3


 

Synlogic, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Cash Flows

(In thousands)

 

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2021

 

 

September 30, 2020

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(45,472

)

 

$

(44,585

)

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

 

 

 

 

 

 

 

 

Depreciation

 

 

1,832

 

 

 

1,983

 

Equity-based compensation expense

 

 

2,561

 

 

 

3,105

 

Accretion/amortization of investment securities

 

 

243

 

 

 

(50

)

Reduction in carrying amount of operating lease right of use asset

 

 

1,532

 

 

 

1,286

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(1,000

)

 

 

 

Prepaid expenses and other current assets

 

 

854

 

 

 

5,062

 

Prepaid research and development, net of current portion

 

 

840

 

 

 

7,164

 

Accounts payable and accrued expenses

 

 

455

 

 

 

(1,843

)

Deferred revenue

 

 

988

 

 

 

(544

)

Operating lease liabilities

 

 

(1,968

)

 

 

(1,419

)

Other long-term liabilities

 

 

 

 

 

176

 

Other assets

 

 

(3

)

 

 

 

Net cash used in operating activities

 

 

(39,138

)

 

 

(29,665

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of marketable securities

 

 

(97,981

)

 

 

(52,726

)

Proceeds from maturity of marketable securities

 

 

77,272

 

 

 

61,736

 

Proceeds from redemption of marketable securities

 

 

1,270

 

 

 

16,747

 

Purchases of property and equipment

 

 

(507

)

 

 

(384

)

Net cash (used in) provided by investing activities

 

 

(19,946

)

 

 

25,373

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Payments on finance lease obligations

 

 

(6

)

 

 

(190

)

Proceeds from issuance of common stock, net of issuance costs

 

 

81,167

 

 

 

 

Proceeds from issuance of common stock in connection with at-the-market offering, net of issuance costs

 

 

8,047

 

 

 

5,070

 

Proceeds from employee stock purchases and exercise of stock options

 

 

367

 

 

 

43

 

Payment of employee withholding taxes relating to restricted stock awards

 

 

(73

)

 

 

 

Net cash provided by financing activities

 

 

89,502

 

 

 

4,923

 

Net increase in cash, cash equivalents and restricted cash

 

 

30,418

 

 

 

631

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

33,604

 

 

 

27,281

 

Cash, cash equivalents and restricted cash at end of period

 

$

64,022

 

 

$

27,912

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of non-cash investing activities:

 

 

 

 

 

 

 

 

Assets acquired under operating lease obligation

 

$

460

 

 

$

 

Property and equipment purchases included in accounts payable and accrued expenses

 

$

138

 

 

$

(4

)

Supplemental disclosure of non-cash financing activities:

 

 

 

 

 

 

 

 

Purchase under finance lease

 

$

36

 

 

$

 

Issuance costs included in accounts payable and accrued expenses

 

$

145

 

 

$

10

 

Cash paid for interest

 

$

1

 

 

$

6

 

 

The accompanying notes are an integral part of the unaudited consolidated financial statements.

 

 

4


 

 

SYNLOGIC, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

(1)

Nature of Business

Organization

Synlogic, Inc., together with its wholly owned and consolidated subsidiaries (Synlogic or the Company), is a clinical-stage biopharmaceutical company focused on the drug discovery and development of Synthetic Biotic™ medicines. Synthetic Biotic medicines are generated from Synlogic’s proprietary drug discovery and development platform, leveraging a reproducible, modular approach to synthetic biology to develop beneficial microbes, which perform or deliver critical therapeutic functions. Synthetic Biotic medicines are designed to metabolize a toxic substance or compensate for missing or damaged metabolic pathways. Synlogic’s goal is to discover, develop and ultimately commercialize Synthetic Biotic medicines. Since incorporation, the Company has devoted substantially all of its efforts to the research and development of its product candidates.

On August 28, 2017, Synlogic, Inc., formerly known as Mirna Therapeutics, Inc. (NASDAQ: MIRN) (Mirna), completed a business combination with Synlogic, a private company, pursuant to the Agreement and Plan of Merger and Reorganization, dated as of May 15, 2017 (the Merger Agreement), pursuant to which the private Synlogic entity survived as a wholly owned subsidiary of Mirna (the Merger). Immediately after completion of the Merger, Mirna changed its name to “Synlogic, Inc.” (NASDAQ: SYBX).

Risks and Uncertainties

At September 30, 2021, the Company had approximately $150.1 million in cash, cash equivalents, and short-term marketable securities, $1.1 million of restricted cash and an accumulated deficit of approximately $275.8 million. Since its inception through September 30, 2021, the Company has primarily financed its operations through the issuance of preferred stock, units and warrants, the sale of its common stock, the Roche Collaboration and Option Agreement, the AbbVie collaboration, and cash received in the Merger. In the absence of positive cash flows from operations, the Company is highly dependent on its ability to find additional sources of funding in the form of debt or equity financing. Management believes that the Company has sufficient cash to fund its operations through at least twelve months from the issuance of these financial statements.

As an early-stage company, the Company is subject to a number of risks common to other life science companies, including, but not limited to, raising additional capital, development by its competitors of new technological innovations, risk of failure in preclinical and clinical studies, safety and efficacy of its product candidates in clinical trials, the risk of relying on external parties such as contract research organizations (CROs) and contract manufacturing organizations (CMOs), the regulatory approval process, market acceptance of the Company’s products once approved, lack of marketing and sales history, dependence on key personnel and protection of proprietary technology. The Company’s therapeutic programs are currently pre-commercial, spanning discovery through early development and will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval, prior to commercialization of any product candidates.  These efforts require significant amounts of additional capital, adequate personnel, infrastructure, and extensive compliance-reporting capabilities.  There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained, that any products developed will obtain necessary regulatory approval or that any approved products will be commercially viable.  Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate revenue from product sales.  The Company may never achieve profitability, and unless and until it does, it will continue to need to raise additional capital or obtain financing from other sources, such as strategic collaborations or partnerships.

(2)

Summary of Significant Accounting Policies

The significant accounting policies described in the Company’s audited financial statements as of and for the year ended December 31, 2020, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (SEC) on March 25, 2021 (the 2020 Annual Report), have had no material changes during the three and nine months ended September 30, 2021.

 

 

Basis of Presentation

The accompanying consolidated financial statements and the related disclosures as of September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020 are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) and the rules and regulations of the SEC for interim financial statements.  Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.  These interim consolidated financial statements should be read in conjunction with the Company’s 2020 and 2019 audited consolidated financial statements and notes included in the Company’s 2020 Annual Report. The December 31, 2020 consolidated balance sheet included herein was derived from the audited financial statements as of that date but does not include all disclosures including notes required by

5


 

GAAP for complete financial statements. In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments, consisting of normal and recurring adjustments, necessary for the fair presentation of the Company’s financial position and results of operations for the three and nine months ended September 30, 2021 and 2020.  The results of operations for the interim periods are not necessarily indicative of the results to be expected for the year ending December 31,