10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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

OR

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

 

For the transition period from ________ to _________

 

Commission File Number: 001-38582

 

Allakos Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

45-4798831

(State or other jurisdiction of

incorporation or organization)

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

825 Industrial Road, Suite 500

San Carlos, California

94070

(Address of principal executive offices)

(Zip Code)

 

 

(650) 597-5002

Registrant’s telephone number, including area code

 

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

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common Stock, par value $0.001

ALLK

The Nasdaq Global Select Market

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 2, 2023, the registrant had 86,560,315 shares of common stock outstanding.

 

 


ALLAKOS INC.

Table of Contents

 

Page

PART I.

FINANCIAL INFORMATION

2

Item 1.

Financial Statements (Unaudited)

2

Balance Sheets

2

Statements of Operations and Comprehensive Loss

3

 

Statements of Stockholders’ Equity

4

Statements of Cash Flows

5

Notes to Unaudited Interim Financial Statements

6

Item 2.

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

17

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

25

Item 4.

Controls and Procedures

26

PART II.

OTHER INFORMATION

27

Item 1.

Legal Proceedings

27

Item 1A.

Risk Factors

27

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

28

Item 3.

Defaults Upon Senior Securities

28

Item 4.

Mine Safety Disclosures

28

Item 5.

Other Information

28

Item 6.

Exhibits

29

Signatures

30

 

 

 

1


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited).

allakos inc.

balance sheets

(in thousands, except per share data)

 

 

 

March 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

 

 

(unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

93,854

 

 

$

87,217

 

Investments

 

 

158,745

 

 

 

192,569

 

Prepaid expenses and other current assets

 

 

30,261

 

 

 

29,057

 

Total current assets

 

 

282,860

 

 

 

308,843

 

Property and equipment, net

 

 

37,769

 

 

 

39,144

 

Operating lease right-of-use assets

 

 

24,798

 

 

 

30,225

 

Other long-term assets

 

 

4,981

 

 

 

8,208

 

Total assets

 

$

350,408

 

 

$

386,420

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

9,101

 

 

$

4,832

 

Accrued expenses and other current liabilities

 

 

20,429

 

 

 

25,206

 

Total current liabilities

 

 

29,530

 

 

 

30,038

 

Operating lease liabilities, net of current portion

 

 

40,430

 

 

 

45,949

 

Total liabilities

 

 

69,960

 

 

 

75,987

 

Contingencies (Note 7)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.001 par value per share; 20,000 shares
   authorized as of March 31, 2023 and December 31, 2022;
   
no shares issued and outstanding as of March 31, 2023
   and December 31, 2022

 

 

 

 

 

 

Common stock, $0.001 par value per share; 200,000 shares
   authorized as of March 31, 2023 and December 31, 2022;
   
86,560 and 85,387 shares issued and outstanding as of
   March 31, 2023 and December 31, 2022, respectively

 

 

86

 

 

 

85

 

Additional paid-in capital

 

 

1,255,530

 

 

 

1,243,408

 

Accumulated other comprehensive gain (loss)

 

 

12

 

 

 

(284

)

Accumulated deficit

 

 

(975,180

)

 

 

(932,776

)

Total stockholders’ equity

 

 

280,448

 

 

 

310,433

 

Total liabilities and stockholders’ equity

 

$

350,408

 

 

$

386,420

 

 

See accompanying notes to unaudited interim financial statements

 

2


 

Allakos Inc.

Statements of Operations and Comprehensive Loss

(in thousands, except per share data)

(unaudited)

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2023

 

 

2022

 

Operating expenses

 

 

 

 

 

 

Research and development

 

$

33,078

 

 

$

176,807

 

General and administrative

 

 

11,968

 

 

 

18,844

 

Total operating expenses

 

 

45,046

 

 

 

195,651

 

Loss from operations

 

 

(45,046

)

 

 

(195,651

)

Interest income

 

 

2,678

 

 

 

83

 

Other expense, net

 

 

(36

)

 

 

(1,455

)

Net loss

 

 

(42,404

)

 

 

(197,023

)

Unrealized gain (loss) on investments

 

 

296

 

 

 

(316

)

Comprehensive loss

 

$

(42,108

)

 

$

(197,339

)

Net loss per common share:

 

 

 

 

 

 

Basic and diluted

 

$

(0.49

)

 

$

(3.60

)

Weighted-average number of common shares outstanding:

 

 

 

 

 

 

Basic and diluted

 

 

85,845

 

 

 

54,686

 

 

See accompanying notes to unaudited interim financial statements

 

3


 

Allakos Inc.

Statements of STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)

 

 

 

Common Stock

 

 

Additional
Paid-In
Capital

 

 

Accumulated Other Comprehensive Gain (Loss)

 

 

Accumulated
Deficit

 

 

Total
Stockholders’
Equity

 

 

 

Shares

 

 

Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2021

 

 

54,622

 

 

$

54

 

 

$

1,058,399

 

 

$

(153

)

 

$

(612,824

)

 

$

445,476

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

11,392

 

 

 

 

 

 

 

 

 

11,392

 

Issuance of common stock upon exercise of stock options

 

 

34

 

 

 

 

 

 

104

 

 

 

 

 

 

 

 

 

104

 

Issuance of common stock upon 2018 ESPP purchase

 

 

42

 

 

 

 

 

 

243

 

 

 

 

 

 

 

 

 

243

 

Issuance of common stock upon vesting of restricted stock units

 

 

63

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on investments

 

 

 

 

 

 

 

 

 

 

 

(316

)

 

 

 

 

 

(316

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(197,023

)

 

 

(197,023

)

Balance at March 31, 2022

 

 

54,761

 

 

$

54

 

 

$

1,070,138

 

 

$

(469

)

 

$

(809,847

)

 

$

259,876

 

 

 

 

 

Common Stock

 

 

Additional
Paid-In
Capital

 

 

Accumulated Other Comprehensive Gain (Loss)

 

 

Accumulated
Deficit

 

 

Total
Stockholders’
Equity

 

 

 

Shares

 

 

Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2022

 

 

85,387

 

 

$

85

 

 

$

1,243,408

 

 

$

(284

)

 

$

(932,776

)

 

$

310,433

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

10,665

 

 

 

 

 

 

 

 

 

10,665

 

Issuance of common stock upon exercise of stock options

 

 

6

 

 

 

 

 

 

26

 

 

 

 

 

 

 

 

 

26

 

Issuance of common stock upon 2018 ESPP purchase

 

 

144

 

 

 

 

 

 

442

 

 

 

 

 

 

 

 

 

442

 

Issuance of common stock upon vesting of restricted stock units

 

 

881

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

Issuance of common stock under the ATM Offering, net of issuance costs

 

 

142

 

 

 

 

 

 

990

 

 

 

 

 

 

 

 

 

990

 

Unrealized gain on investments

 

 

 

 

 

 

 

 

 

 

 

296

 

 

 

 

 

 

296

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(42,404

)

 

 

(42,404

)

Balance at March 31, 2023

 

 

86,560

 

 

$

86

 

 

$

1,255,530

 

 

$

12

 

 

$

(975,180

)

 

$

280,448

 

 

See accompanying notes to unaudited interim financial statements

 

4


 

Allakos Inc.

Statements of Cash Flows

(in thousands)

(unaudited)

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(42,404

)

 

$

(197,023

)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

1,524

 

 

 

2,123

 

Stock-based compensation

 

 

10,665

 

 

 

11,392

 

Net amortization (accretion) of premiums and discounts on investments

 

 

(1,474

)

 

 

1,130

 

Noncash lease expense

 

 

474

 

 

 

413

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

(1,195

)

 

 

14,637

 

Other long-term assets

 

 

3,227

 

 

 

(3,151

)

Accounts payable

 

 

4,385

 

 

 

(5,053

)

Accrued expenses and other current liabilities

 

 

(4,475

)

 

 

1,825

 

Operating lease liabilities, net of current portion

 

 

(866

)

 

 

(580

)

Net cash used in operating activities

 

 

(30,139

)

 

 

(174,287

)

Cash flows from investing activities

 

 

 

 

 

 

Purchases of investments

 

 

(49,415

)

 

 

(19,988

)

Proceeds from sales of investments

 

 

 

 

 

19,989

 

Proceeds from maturities of investments

 

 

85,000

 

 

 

60,000

 

Purchases of property and equipment

 

 

(267

)

 

 

(2,589

)

Net cash provided by investing activities

 

 

35,318

 

 

 

57,412

 

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from issuance of common stock, net of issuance costs

 

 

990

 

 

 

 

Proceeds from exercise of stock options

 

 

26

 

 

 

104

 

Proceeds from issuance of common stock under the 2018 ESPP

 

 

442

 

 

 

243

 

Net cash provided by financing activities

 

 

1,458

 

 

 

347

 

Net increase (decrease) in cash, cash equivalents and
   restricted cash

 

 

6,637

 

 

 

(116,528

)

Cash, cash equivalents and restricted cash, beginning of period

 

 

88,689

 

 

 

155,097

 

Cash, cash equivalents and restricted cash, end of period

 

$

95,326

 

 

$

38,569

 

Supplemental disclosures

 

 

 

 

 

 

Noncash investing and financing items:

 

 

 

 

 

 

Noncash adjustments to right-of-use assets

 

$

(5,617

)

 

$

 

 

See accompanying notes to unaudited interim financial statements

 

5


 

ALLAKOS INC.

NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

1. Organization and Business

Allakos Inc. (“Allakos” or the “Company”) was incorporated in the state of Delaware in March 2012. Allakos is a clinical stage biopharmaceutical company focused on the development of lirentelimab (AK002) and AK006 for the treatment of eosinophil and mast cell related diseases. The Company’s primary activities to date have included establishing its facilities, recruiting personnel, conducting research and development of its product candidates and raising capital. The Company’s operations are located in San Carlos, California. The Company operates in one reportable segment.

Liquidity Matters

Since inception, the Company has incurred net losses and negative cash flows from operations. During the three months ended March 31, 2023, the Company incurred a net loss of $42.4 million. At March 31, 2023, the Company had an accumulated deficit of $975.2 million and does not expect to experience positive cash flows from operating activities in the foreseeable future. The Company has financed its operations to date primarily through the sale of common stock. Management expects to incur additional operating losses in the future as the Company continues to further develop, seek regulatory approval for and, if approved, commence commercialization of its product candidates.

Due to the clinical study results released in December 2021, our Board of Directors approved in February 2022 plans to reduce our contractual commitments and a reorganization plan (the “Reorganization Plan”) to reduce operating costs and better align our workforce with the clinical development plans of our business.

The Company had $252.6 million of cash, cash equivalents and marketable securities at March 31, 2023. Management believes that this amount is sufficient to fund the Company’s operations for at least the next 12 months from the issuance date of these financial statements.

2. Summary of Significant Accounting Policies

Basis of Presentation

The unaudited interim financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements and accompanying notes.

The interim balance sheet as of March 31, 2023, the statements of operations and comprehensive loss, statements of stockholders’ equity and statements of cash flows for the three months ended March 31, 2023 and 2022 are unaudited. The unaudited interim financial statements have been prepared on the same basis as the audited annual financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair presentation of the Company’s financial position as of March 31, 2023 and its results of operations and comprehensive loss for the three months ended March 31, 2023 and 2022 and its cash flows for the three months ended March 31, 2023 and 2022. Certain information and note disclosures normally included in annual audited financial statements prepared in accordance with U.S. GAAP have been omitted. The financial data and the other financial information disclosed in these notes to the interim financial statements are also unaudited. The results of operations for any interim period are not necessarily indicative of the results to be expected for the entire year or for any other future annual or interim period. These interim financial statements should be read in conjunction with the Company’s audited financial statements included in the Company’s Annual Report on Form 10-K, which was filed with the SEC on March 6, 2023.

Use of Estimates

Management uses significant judgment when making estimates related to common stock valuation and related stock-based compensation expense, accrued research and development expense, and lease-related assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates under different assumptions or conditions, and those differences could be material to the financial position and results of operations.

Concentration of Credit Risk and Other Risks and Uncertainties

Financial instruments that potentially subject the Company to credit risk principally consist of cash, cash equivalents and investments. These financial instruments are currently held in accounts in varying amounts at four separate financial institutions that management believes possesses high credit quality. Amounts on deposit with these financial institutions have and will continue to exceed federally-insured limits. The Company has not experienced any losses on its cash deposits. Additionally, the Company’s investment policy limits its investments to certain types of securities issued by or backed by the U.S. government and its agencies.

 

6


 

The Company is subject to a number of risks similar to that of other early stage biopharmaceutical companies, including, but not limited to, the need to obtain adequate additional funding, possible failure of current or future clinical trials, its reliance on third-parties to conduct its clinical trials, the need to obtain regulatory and marketing approvals for its product candidates, competitive developments, the need to successfully commercialize and gain market acceptance of the Company’s product candidates, its right to develop and commercialize its product candidates pursuant to the terms and conditions of the licenses granted to the Company, protection of proprietary technology, the ability to make milestone, royalty or other payments due under licensing agreements, and the need to secure and maintain adequate manufacturing arrangements with third-parties. If the Company does not successfully commercialize or partner its product candidates, it will be unable to generate product revenue or achieve profitability.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Company’s balance sheets and which, in aggregate, represent the amounts reported in the accompanying statements of cash flows (in thousands):

 

 

 

March 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Cash and cash equivalents

 

$

93,854

 

 

$

87,217

 

Restricted cash in other long-term assets

 

 

1,472

 

 

 

1,472

 

Total

 

$

95,326

 

 

$

88,689

 

 

 

 

March 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Cash and cash equivalents

 

$

36,294

 

 

$

152,822

 

Restricted cash in prepaid and other current assets

 

 

803

 

 

 

 

Restricted cash in other long-term assets

 

 

1,472

 

 

 

2,275

 

Total

 

$

38,569

 

 

$

155,097

 

 

Restricted cash at March 31, 2023 represents $1.5 million in security deposits for the lease of the Company’s facility in San Carlos, California. The security deposit is in the form of a letter of credit secured by restricted cash and is recorded in other long-term assets on the Company’s balance sheets.

Investments

The Company invests in marketable securities, primarily securities issued by the United States government and its agencies. The Company’s investments are considered available-for-sale and are classified as current assets even when the stated maturities of the underlying securities exceed one year from the date of the current balance sheet being reported. This classification reflects management’s ability and intent to utilize proceeds from the sale of such investments to fund ongoing operations. Unrealized gains and losses are excluded from earnings and are reported as a component of accumulated other comprehensive gain. The cost of securities sold is determined using the specific-identification method. Interest earned and adjustments for the amortization of premiums and discounts on investments are included in interest income, net, on the statements of operations and comprehensive loss. Realized gains and losses and declines in fair value judged to be other than temporary, if any, on investments in marketable securities are included in other expense, net, on the statements of operations and comprehensive loss.

Operating Leases

The Company accounts for its leases in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 842, “Leases” (“ASC 842”). Right-of-use assets represent the Company’s right to use an underlying asset over the lease term and include any lease payments made prior to the lease commencement date and are reduced by lease incentives. Lease liabilities represent the present value of the total lease payments over the lease term, calculated using the Company’s incremental borrowing rate. In determining the Company’s incremental borrowing rate, consideration is given to the term of the lease and the Company’s credit risk. The Company recognizes options to extend a lease when it is reasonably certain that it will exercise such extension. The Company does not recognize options to terminate a lease when it is reasonably certain that it will not exercise such early termination options. Lease expense is recognized on a straight-line basis over the expected lease term.

 

7


 

Accrued Research and Development Expense

Service agreements with contract development and manufacturing organizations (“CDMOs”), clinical contract research organizations (“CROs”) and clinical investigative sites comprise a significant component of the Company’s research and development activities. External costs for these vendors are recognized as the services are incurred. The Company accrues for expenses resulting from obligations under agreements with its third-parties for which the timing of payments does not match the periods over which the materials or services are provided to the Company. Accruals are recorded based on estimates of services received and efforts expended pursuant to agreements established with CDMOs, clinical CROs, clinical investigative sites and other outside service providers. These estimates are typically based on contracted amounts applied to the proportion of work performed and determined through analysis with internal personnel and external service providers as to the progress or stage of completion of the services.

The Company makes judgements and estimates in determining the accrual balance in each reporting period. In the event advance payments are made to a CDMO, clinical CRO, clinical investigative site or other outside service provider, the payments are recorded within prepaid expenses and other current assets or other long-term assets, as appropriate, and subsequently recognized as research and development expense when the associated services have been performed. As actual costs become known, the Company adjusts its liabilities and assets. Inputs, such as the extent of services received and the duration of services to be performed, may vary from the Company’s estimates, which will result in adjustments to research and development expense in future periods. Changes in these estimates that result in material changes to the Company’s accruals could materially affect the Company’s results of operations. The Company’s historical estimates have not been materially different from actual amounts recorded.

Research and Development Expense

Research and development costs are expensed as incurred. Research and development costs include, among others, consulting costs, salaries, benefits, travel, stock-based compensation, laboratory supplies and other non-capital equipment utilized for in-house research, allocation of facilities and overhead costs and external costs paid to third-parties that conduct research and development activities on the Company’s behalf. Costs to terminate commitments with third-party suppliers performing research and development activities and amounts incurred in connection with license agreements, including milestone payments, are also included in research and development expense.

Advance payments for goods or services to be rendered in the future for use in research and development activities are deferred and included in prepaid expenses and other current assets or other long-term assets, as appropriate. The deferred amounts are expensed as the related goods are delivered or the services are performed.

Comprehensive Loss

Comprehensive loss is defined as the change in stockholders’ equity during a period from transactions and other events and circumstances from non-owner sources. The differences between net loss and comprehensive loss for the three months ended March 31, 2023 and 2022 are a result of unrealized gains and losses on the Company’s investments included in current assets on the Company’s balance sheets.

Net Loss per Share

The Company calculates basic net loss per share by dividing the net loss attributable to common stockholders by the weighted-average shares of common stock outstanding during the period. The Company calculates diluted net loss per share after giving consideration to all potentially dilutive securities outstanding during the period using the treasury-stock and if-converted methods, except where the effect of including such securities would be anti-dilutive. Because the Company has reported net losses since inception, the effect from potentially dilutive securities would have been anti-dilutive and therefore has been excluded from the calculation of diluted net loss per share.

The Company’s weighted-average shares of common stock outstanding increased from 54.7 million shares during the first quarter of 2022 to a weighted-average of 85.8 million during the first quarter of 2023, primarily as a result of the 29.9 million shares sold as part of an underwritten registered direct offering closed on September 21, 2022 (the “September 2022 Offering”). Refer to Note 8 “Stockholders’ Equity” for additional details related to the offering.

 

8


 

Basic and diluted net loss per share was calculated as follows (in thousands, except per share data):

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2023

 

 

2022

 

Numerator:

 

 

 

 

 

 

Net loss

 

$

(42,404

)

 

$

(197,023

)

Denominator:

 

 

 

 

 

 

Weighted-average shares of common stock outstanding,
   basic and diluted

 

 

85,845

 

 

 

54,686

 

Net loss per share, basic and diluted

 

$

(0.49

)

 

$

(3.60

)

The following table sets forth the potentially dilutive securities that have been excluded from the calculation of diluted net loss per share due to their anti-dilutive effect for the periods indicated (in thousands):

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2023

 

 

2022

 

Options to purchase common stock

 

 

6,830

 

 

 

5,380

 

Unvested restricted stock units

 

 

6,142

 

 

 

5,267

 

Unvested performance stock units

 

 

3,062

 

 

 

4,216

 

Shares issuable under employee stock purchase plans

 

 

59

 

 

 

17

 

Total

 

 

16,093

 

 

 

14,880

 

Recently Issued and Adopted Accounting Pronouncements

The Company has reviewed recently issued accounting pronouncements and concluded they are either not applicable to the business or that no material effect is expected on the Company’s financial statements as a result of future adoption.

3. Fair Value Measurements

The Company measures and reports certain financial instruments as assets and liabilities at fair value on a recurring basis. The Company’s financial assets measured at fair value on a recurring basis were as follows (in thousands):

 

 

 

March 31, 2023

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

91,345

 

 

$

 

 

$

 

 

$

91,345

 

Total cash equivalents

 

 

91,345

 

 

 

 

 

 

 

 

 

91,345

 

Short-term marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasuries

 

 

158,745

 

 

 

 

 

 

 

 

 

158,745

 

Total short-term marketable securities

 

 

158,745

 

 

 

 

 

 

 

 

 

158,745

 

Total cash equivalents and short-term
   marketable securities

 

$

250,090

 

 

$

 

 

$

 

 

$

250,090

 

 

 

 

December 31, 2022

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

86,270

 

 

$

 

 

$

 

 

$

86,270

 

Total cash equivalents

 

 

86,270

 

 

 

 

 

 

 

 

 

86,270

 

Short-term marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasuries

 

 

192,569

 

 

 

 

 

 

 

 

 

192,569

 

Total short-term marketable securities

 

 

192,569

 

 

 

 

 

 

 

 

 

192,569

 

Total cash equivalents and short-term
   marketable securities

 

$

278,839

 

 

$

 

 

$

 

 

$

278,839