10-Q
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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 March 31, 2023

 

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 Global 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 4, 2023, there were 68,211,278 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 fact 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, if approved;
the revenue generated by sales of our product candidates, if approved;
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 extent to which our business is adversely impacted by the effects of the coronavirus outbreak (COVID-19) or by other health epidemics or pandemics; 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

 

11

 

 

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

21

 

 

 

Item 4. Controls and Procedures

 

21

 

 

 

PART II - OTHER INFORMATION

 

 

 

 

 

Item 1. Legal Proceedings

 

22

 

 

 

Item 1A. Risk Factors

 

22

 

 

 

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

 

58

 

 

 

Item 3. Defaults Upon Senior Securities

 

58

 

 

 

Item 4. Mine Safety Disclosures

 

58

 

 

 

Item 5. Other Information

 

58

 

 

 

Item 6. Exhibits

 

59

 

 

 

Signatures

 

60

 

 


 

SYNlogic, Inc. and SUBSIDIARIES

Unaudited Consolidated Balance Sheets

(In thousands, except share amounts)

 

 

 

March 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

25,539

 

 

$

15,861

 

Short-term marketable securities

 

 

31,829

 

 

 

61,768

 

Prepaid expenses and other current assets

 

 

4,991

 

 

 

2,153

 

Total current assets

 

 

62,359

 

 

 

79,782

 

Property and equipment, net

 

 

6,885

 

 

 

7,323

 

Right of use asset - operating lease

 

 

13,547

 

 

 

14,356

 

Restricted cash

 

 

1,097

 

 

 

1,097

 

Prepaid research and development, net of current portion

 

 

9,533

 

 

 

8,300

 

Other assets

 

 

22

 

 

 

7

 

Total assets

 

$

93,443

 

 

$

110,865

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

2,316

 

 

$

1,785

 

Accrued expenses

 

 

2,421

 

 

 

5,290

 

Deferred revenue

 

 

692

 

 

 

882

 

Lease liability - operating lease

 

 

4,294

 

 

 

4,152

 

Finance lease obligations

 

 

14

 

 

 

13

 

Total current liabilities

 

 

9,737

 

 

 

12,122

 

Long-term liabilities:

 

 

 

 

 

 

Lease liability - operating lease, net of current portion

 

 

14,993

 

 

 

16,129

 

Finance lease obligations, net of current portion

 

 

1

 

 

 

4

 

Total long-term liabilities

 

 

14,994

 

 

 

16,133

 

Commitments and contingencies (Note 11)

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

Common stock, $0.001 par value

 

 

 

 

 

 

250,000,000 shares authorized as of March 31, 2023 and December 31, 2022.
  
72,238,745 shares issued and 68,041,856 shares outstanding as of March 31, 2023 and
  
70,933,140 shares issued and 66,736,251 shares outstanding as of December 31, 2022.

 

 

72

 

 

 

71

 

Additional paid-in capital

 

 

443,829

 

 

 

442,237

 

Accumulated other comprehensive loss

 

 

(30

)

 

 

(161

)

Accumulated deficit

 

 

(372,641

)

 

 

(357,019

)

Treasury stock, at cost (4,196,889 shares at March 31, 2023 and at December 31, 2022)

 

 

(2,518

)

 

 

(2,518

)

Total stockholders' equity

 

 

68,712

 

 

 

82,610

 

Total liabilities and stockholders' equity

 

$

93,443

 

 

$

110,865

 

 

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

 

 

March 31, 2023

 

 

March 31, 2022

 

Revenue

$

174

 

 

$

244

 

Operating expenses:

 

 

 

 

 

Research and development

 

12,450

 

 

 

11,738

 

General and administrative

 

3,967

 

 

 

4,271

 

Total operating expenses

 

16,417

 

 

 

16,009

 

Loss from operations

 

(16,243

)

 

 

(15,765

)

Other income (expense):

 

 

 

 

 

Interest and investment income

 

628

 

 

 

67

 

Interest expense

 

(1

)

 

 

(1

)

Other income (expense)

 

(6

)

 

 

2

 

Total other income, net

 

621

 

 

 

68

 

Net loss

$

(15,622

)

 

$

(15,697

)

 

 

 

 

 

 

Net loss per share - basic and diluted

$

(0.23

)

 

$

(0.22

)

Weighted-average common stock outstanding - basic and diluted

 

69,070,211

 

 

 

71,969,007

 

Comprehensive loss:

 

 

 

 

 

Net loss

$

(15,622

)

 

$

(15,697

)

Net unrealized (loss) gain on marketable securities

 

131

 

 

 

(300

)

Comprehensive loss

$

(15,491

)

 

$

(15,997

)

 

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

 

Treasury Stock

 

Total

 

 

Shares

 

Amount

 

capital

 

income (loss)

 

deficit

 

Shares

 

Amount

 

equity

 

Balance at December 31, 2022

 

70,933,140

 

$

71

 

$

442,237

 

$

(161

)

$

(357,019

)

 

(4,196,889

)

$

(2,518

)

$

82,610

 

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

 

1,033,398

 

 

1

 

 

815

 

 

 

 

 

 

 

 

 

 

816

 

Issuance of restricted stock

 

162,210

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock under employee stock purchase plan

 

109,997

 

 

 

 

59

 

 

 

 

 

 

 

 

 

 

59

 

Equity-based compensation expense

 

 

 

 

 

718

 

 

 

 

 

 

 

 

 

 

718

 

Unrealized gain (loss) on securities

 

 

 

 

 

 

 

131

 

 

 

 

 

 

 

 

131

 

Net loss

 

 

 

 

 

 

 

 

 

(15,622

)

 

 

 

 

 

(15,622

)

Balance at March 31, 2023

 

72,238,745

 

$

72

 

$

443,829

 

$

(30

)

$

(372,641

)

 

(4,196,889

)

$

(2,518

)

$

68,712

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2021

 

69,698,844

 

$

70

 

$

438,113

 

$

(45

)

$

(290,872

)

 

 

$

147,266

 

Exercise of options

 

30,622

 

 

 

 

52

 

 

 

 

 

 

52

 

Issuance of restricted stock

 

507,260

 

 

 

 

 

 

 

 

 

 

Issuance of common stock under employee stock purchase plan

 

40,528

 

 

 

83

 

 

 

 

 

 

 

 

83

 

Cancellation of restricted stock

 

(9,668

)

 

 

 

 

 

 

 

Equity-based compensation expense

 

 

 

890

 

 

 

 

 

 

890

 

Unrealized gain (loss) on securities

 

 

 

 

(300

)

 

 

 

 

(300

)

Net loss

 

 

 

 

 

(15,697

)

 

 

 

(15,697

)

Balance at March 31, 2022

 

70,267,586

 

$

70

 

$

439,138

 

$

(345

)

$

(306,569

)

 

 

$

132,294

 

 

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)

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

March 31, 2023

 

 

March 31, 2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(15,622

)

 

$

(15,697

)

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

 

 

 

 

 

 

Depreciation

 

 

576

 

 

 

601

 

(Gain)/loss on disposal of property and equipment

 

 

(11

)

 

 

 

Equity-based compensation expense

 

 

718

 

 

 

890

 

Accretion/amortization of investment securities

 

 

(327

)

 

 

(11

)

Change in carrying amount of operating lease right of use asset

 

 

809

 

 

 

769

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

(2,838

)

 

 

821

 

Prepaid research and development, net of current portion

 

 

(1,233

)

 

 

(488

)

Accounts payable and accrued expenses

 

 

(2,378

)

 

 

(1,387

)

Deferred revenue

 

 

(190

)

 

 

(217

)

Operating lease liabilities

 

 

(994

)

 

 

(739

)

Other assets

 

 

(15

)

 

 

(19

)

Net cash used in operating activities

 

 

(21,505

)

 

 

(15,477

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of marketable securities

 

 

 

 

 

(12,121

)

Proceeds from maturity of marketable securities

 

 

30,397

 

 

 

32,356

 

Purchases of property and equipment

 

 

(143

)

 

 

(477

)

Proceeds from the sale of property and equipment

 

 

16

 

 

 

 

Net cash provided by investing activities

 

 

30,270

 

 

 

19,758

 

Cash flows from financing activities:

 

 

 

 

 

 

Payments on finance lease obligations

 

 

(2

)

 

 

(3

)

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

 

 

856

 

 

 

 

Proceeds from employee stock purchases and exercise of stock options

 

 

59

 

 

 

135

 

Net cash provided by financing activities

 

 

913

 

 

 

132

 

Net increase in cash, cash equivalents and restricted cash

 

 

9,678

 

 

 

4,413

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

16,958

 

 

 

17,535

 

Cash, cash equivalents and restricted cash at end of period

 

$

26,636

 

 

$

21,948

 

 

 

 

 

 

 

 

Supplemental disclosure of non-cash investing activities:

 

 

 

 

 

 

Assets acquired under operating lease obligation

 

$

 

 

$

1,773

 

Property and equipment purchases included in accounts payable and accrued expenses

 

$

 

 

$

118

 

Supplemental disclosure of non-cash financing activities:

 

 

 

 

 

 

Issuance costs included in accounts payable and accrued expenses

 

$

40

 

 

$

 

Cash paid for interest

 

$

 

 

$

1

 

 

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 applying synthetic biology to the discovery and development of Synthetic Biotics. Synthetic Biotics are generated from Synlogic’s proprietary platform, leveraging a reproducible, modular approach to the generation of novel drug candidates that perform or deliver critical therapeutic functions. Synthetic Biotics are designed to metabolize a toxic substance, compensate for missing or damaged metabolic pathways or deliver combinations of therapeutic factors. Synlogic’s goal is to discover, develop and ultimately commercialize Synthetic Biotics. Since incorporation, the Company has devoted substantially all of its efforts to the research and development of its product candidates.

Risks and Uncertainties

At March 31, 2023, the Company had approximately $57.4 million in cash, cash equivalents, and short-term marketable securities, $1.1 million of restricted cash and an accumulated deficit of approximately $372.6 million. Since its inception through March 31, 2023, the Company has primarily financed its operations through the issuance of preferred stock, units and warrants, the sale of its common stock, and collaborations, including with Roche. 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 and other sources of liquidity, including cash equivalents and short-term marketable securities, to fund its operations through at least twelve months from the date of 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 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 alliances.

COVID-19

While the Company is not aware of a material impact from the continuation of the COVID-19 pandemic through March 31, 2023, the full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations, and financial condition, including expenses and manufacturing, clinical trials, and research and development costs, depends on future developments that are uncertain at this time.

(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, 2022, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (SEC) on March 29, 2023 (the 2022 Annual Report), have had no material changes during the three months ended March 31, 2023.

 

5


 

Basis of Presentation

The accompanying consolidated financial statements and the related disclosures as of March 31, 2023 and for the three months ended March 31, 2023 and 2022 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 2022 and 2021 audited consolidated financial statements and notes included in the 2022 Annual Report. The consolidated balance sheet as of December 31, 2022 included herein was derived from the audited financial statements as of that date but does not include all disclosures including notes required by 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 months ended March 31, 2023 and 2022. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or any other interim period or future year or period.

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of Synlogic and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

 

Recently Issued Accounting Pronouncements

 

New accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) from time to time, and rules are issued by the SEC that the Company has or will adopt as of a specified date. Unless otherwise noted, management does not believe that any recently issued accounting pronouncements issued by the FASB or guidance issued by the SEC had, or is expected to have, a material impact on the Company’s present or future financial statements.

 

(3)
Fair Value of Financial Instruments

The tables below present information about the Company’s assets that are measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value, as described under Note 2, Summary of Significant Accounting Policies, in the audited financial statements included in the 2022 Annual Report.

The Company’s investment portfolio includes many fixed income securities that do not always trade on a daily basis. As a result, the pricing services used by the Company applied other available information as applicable through processes such as benchmark yields, benchmarking of like securities, sector groupings and matrix pricing to prepare evaluations. In addition, model processes were used to assess interest rate impact and develop prepayment scenarios. These models take into consideration relevant credit information, perceived market movements, sector news and economic events. The inputs into these models may include benchmark yields, reported trades, broker-dealer quotes, issuer spreads and other relevant data.

At March 31, 2023 and December 31, 2022, the Company has classified assets measured at fair value on a recurring basis as follows (in thousands):

 

 

 

Fair Value Measurements at Reporting Date Using

 

 

 

March 31,

 

 

Quoted Prices in Active
Markets for Identical
Assets

 

 

Significant Other
Observable Inputs

 

 

Significant
Unobservable Inputs

 

Description

 

2023

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Money market funds

 

$

25,539

 

 

$

25,539

 

 

$

 

 

$

 

Commercial paper

 

 

25,849

 

 

 

 

 

 

25,849

 

 

 

 

U.S. treasuries

 

 

5,980

 

 

 

5,980

 

 

 

 

 

 

 

Total

 

$

57,368

 

 

$

31,519

 

 

$

25,849

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements at Reporting Date Using

 

 

 

December 31,

 

 

Quoted Prices in Active
Markets for Identical
Assets

 

 

Significant Other
Observable Inputs

 

 

Significant
Unobservable Inputs

 

Description

 

2022

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Money market funds

 

$

15,861

 

 

$

15,861

 

 

$

 

 

$

 

Commercial paper

 

 

44,375

 

 

 

 

 

 

44,375

 

 

 

 

U.S. treasuries

 

 

17,393

 

 

 

17,393

 

 

 

 

 

 

 

Total

 

$

77,629

 

 

$

33,254

 

 

$

44,375

 

 

$

 

 

6


 

 

Cash equivalents, prepaid expenses and other current assets, accounts payable and accrued expenses at March 31, 2023 and December 31, 2022 are carried at amounts that approximate fair value due to their short-term maturities. Finance lease obligations at March 31, 2023 and December 31, 2022 approximate fair value as they bear interest at a rate approximating a market interest rate.

(4)
Available-for-Sale Securities

 

The following tables summarize the available-for-sale securities held at March 31, 2023 and December 31, 2022 (in thousands):

 

March 31, 2023

 

Amortized cost

 

 

Gross unrealized
gains

 

 

Gross unrealized
losses

 

 

Fair Value

 

Commercial paper

 

$

25,863

 

 

$

2

 

 

$

(16

)

 

$

25,849

 

U.S. treasuries

 

 

5,996

 

 

 

 

 

 

(16

)

 

 

5,980

 

Total

 

$

31,859

 

 

$

2

 

 

$

(32

)

 

$

31,829

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

Amortized cost

 

 

Gross unrealized
gains

 

 

Gross unrealized
losses

 

 

Fair Value

 

Commercial paper

 

$

44,437

 

 

$

8

 

 

$

(70

)

 

$

44,375

 

U.S. treasuries

 

 

17,492

 

 

 

 

 

 

(99

)

 

 

17,393

 

Total

 

$

61,929

 

 

$

8

 

 

$

(169

)

 

$

61,768

 

 

The contractual maturity of all securities held at March 31, 2023 was three months or less. There were seven and fifteen investments in an unrealized loss position at March 31, 2023 and December 31, 2022, respectively, none of which had been in an unrealized loss position for more than twelve months. The aggregate fair value of the securities in an unrealized loss position at March 31, 2023 and December 31, 2022 was $17.9 million and $36.6 million, respectively. The Company reviews its investments for other-than-temporary impairment whenever the fair value of an investment is less than amortized cost and evidence indicates that an investment’s carrying amount is not recoverable within a reasonable period of time. To determine whether an impairment is other-than-temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. The Company did not hold any securities with an other-than-temporary impairment at March 31, 2023.

Gross realized gains and losses on the sales of investments have not been material to the Company’s consolidated statement of operations.

(5)
Property and Equipment, net

Property and equipment, net consists of the following (in thousands):

 

 

 

March 31,

 

 

December 31,

 

 

 

2023

 

 

2022