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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

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: 001-38938

 

Stoke Therapeutics, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

47-1144582

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

45 Wiggins Ave

Bedford, Massachusetts

01730

(Address of principal executive offices)

(Zip Code)

(781) 430-8200

(Registrant’s telephone number, including area code)

 

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

 

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, $0.0001 par value per share

 

STOK

 

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 April 26, 2023 the registrant had 44,188,534 shares of common stock, $0.0001 par value per share, outstanding.

 

 

 


Table of Contents

 

Page

PART I.

FINANCIAL INFORMATION

4

Item 1.

Financial Statements (Unaudited)

4

Consolidated balance sheets

4

Consolidated statements of operations and comprehensive loss

5

Consolidated statements of stockholders’ equity

6

Consolidated statements of cash flows

7

Notes to unaudited consolidated financial statements

8

Item 2.

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

16

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

28

Item 4.

Controls and Procedures

28

PART II.

OTHER INFORMATION

29

Item 1.

Legal Proceedings

29

Item 1A.

Risk Factors

29

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

67

Item 3.

Defaults Upon Senior Securities

67

Item 4.

Mine Safety Disclosures

67

Item 5.

Other Information

67

Item 6.

Exhibits

68

Signatures

69

 

2


FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of present and historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, business strategy, prospective products, planned preclinical studies and clinical or field trials, regulatory approvals, research and development costs, and timing and likelihood of success, as well as plans and objectives of management for future operations, may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words.

Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to us. Such statements are subject to a number of known and unknown risks, uncertainties and assumptions, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to, those identified in Part I. Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II. Item 1A “Risk Factors.” These risks and uncertainties include, but are not limited to:

our ability to become profitable;
our ability to procure sufficient funding;
our limited operating history;
our ability to develop, obtain regulatory approval for and commercialize STK-001, STK-002 and our future product candidates;
the direct and indirect impact of inflation, interest rates, foreign currency exchange rates, instability in the global banking system, geopolitical conflict and macroeconomic conditions on our business, financial condition and operations, including on our expenses, supply chain, strategic partners, research and development costs, clinical trials and employees;
our success in early preclinical studies or clinical trials, which may not be indicative of results obtained in later studies or trials;
our ability to obtain regulatory approval to commercialize STK-001, STK-002 or any other future product candidate;
the success of our collaboration with Acadia Pharmaceuticals and our ability to enter into successful collaborations in the future;
our ability to identify patients with the diseases treated by STK-001, STK-002 or our future product candidates, and to enroll patients in trials;
the success of our efforts to use TANGO to expand our pipeline of product candidates and develop marketable products;
our ability to obtain, maintain and protect our intellectual property;
our reliance upon intellectual property licensed from third parties;
our ability to identify, recruit and retain key personnel;
our financial performance; and
developments or projections relating to our competitors or our industry.

You should read this Quarterly Report on Form 10-Q and the documents that we reference herein completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

3


PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Stoke Therapeutics, Inc.

Consolidated balance sheets

(in thousands, except share and per share amounts)

(unaudited)

 

 

 

 

 

 

 

 

 

 

March 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

190,339

 

 

$

113,556

 

Marketable securities

 

 

63,334

 

 

 

116,039

 

Prepaid expenses

 

 

10,191

 

 

 

10,932

 

Other current assets

 

 

5,880

 

 

 

2,955

 

Interest receivable

 

 

492

 

 

 

588

 

Total current assets

 

$

270,236

 

 

$

244,070

 

Restricted cash

 

 

569

 

 

 

569

 

Operating lease right-of-use assets

 

 

4,202

 

 

 

4,753

 

Property and equipment, net

 

 

6,789

 

 

 

6,675

 

Total assets

 

$

281,796

 

 

$

256,067

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

4,299

 

 

$

766

 

Accrued and other current liabilities

 

 

13,777

 

 

 

15,748

 

Deferred revenue - current portion

 

 

13,451

 

 

 

14,880

 

Total current liabilities

 

$

31,527

 

 

$

31,394

 

Deferred revenue - net of current portion

 

 

34,144

 

 

 

36,856

 

Other long term liabilities

 

 

2,303

 

 

 

2,968

 

Total long term liabilities

 

 

36,447

 

 

 

39,824

 

Total liabilities

 

$

67,974

 

 

$

71,218

 

Commitments and contingencies (Note 6)

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

Common stock, par value of $0.0001 per share; 300,000,000 shares
   authorized,
44,175,089 and 39,439,575 shares issued and outstanding as
   of March 31, 2023 and December 31, 2022, respectively

 

 

4

 

 

 

4

 

Additional paid-in capital

 

 

534,111

 

 

 

483,170

 

Accumulated other comprehensive loss

 

 

(598

)

 

 

(1,175

)

Accumulated deficit

 

 

(319,695

)

 

 

(297,150

)

Total stockholders’ equity

 

$

213,822

 

 

$

184,849

 

Total liabilities and stockholders’ equity

 

$

281,796

 

 

$

256,067

 

 

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

4


Stoke Therapeutics, Inc.

Consolidated statements of operations and comprehensive loss

(in thousands, except share and per share amounts)

(unaudited)

 

 

 

Three Months Ended March 31,

 

 

2023

 

 

2022

 

 

Revenue

 

$

5,152

 

 

$

3,000

 

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

 

19,631

 

 

 

18,309

 

 

General and administrative

 

 

10,211

 

 

 

9,486

 

 

Total operating expenses

 

 

29,842

 

 

 

27,795

 

 

Loss from operations

 

 

(24,690

)

 

 

(24,795

)

 

Other income:

 

 

 

 

 

 

 

Interest income (expense), net

 

 

2,103

 

 

 

104

 

 

Other income (expense), net

 

 

42

 

 

 

42

 

 

Total other income

 

 

2,145

 

 

 

146

 

 

Net loss

 

$

(22,545

)

 

$

(24,649

)

 

Net loss per share, basic and diluted

 

$

(0.53

)

 

$

(0.66

)

 

Weighted-average common shares outstanding, basic
   and diluted

 

 

42,536,474

 

 

 

37,448,301

 

 

Comprehensive loss:

 

 

 

 

 

 

 

Net loss

 

$

(22,545

)

 

$

(24,649

)

 

Other comprehensive gain (loss):

 

 

 

 

 

 

 

Unrealized gain (loss) on marketable securities

 

 

577

 

 

 

(516

)

 

Total other comprehensive loss

 

$

577

 

 

$

(516

)

 

Comprehensive loss

 

$

(21,968

)

 

$

(25,165

)

 

 

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

5


Stoke Therapeutics, Inc.

Consolidated statements of stockholders’ equity

(in thousands, except share and per share amounts)

(unaudited)

 

 

 

Common stock

 

 

Additional
paid-in capital

 

 

Accumulated other comprehensive gain (loss)

 

 

Accumulated deficit

 

 

Total stockholders' equity

 

 

 

Shares

 

 

Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2021

 

 

36,902,499

 

 

$

4

 

 

$

414,024

 

 

$

(168

)

 

$

(196,083

)

 

$

217,777

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(24,649

)

 

 

(24,649

)

Unrealized loss on marketable securities

 

 

 

 

 

 

 

 

 

 

 

(516

)

 

 

 

 

 

(516

)

Stock-based compensation

 

 

 

 

 

 

 

 

4,975

 

 

 

 

 

 

 

 

 

4,975

 

Issuance of common stock upon exercise of stock options

 

 

53,377

 

 

 

 

 

 

93

 

 

 

 

 

 

 

 

 

93

 

Shares sold as part of controlled equity offering sales agreement

 

 

2,080,486

 

 

 

 

 

 

42,128

 

 

 

 

 

 

 

 

 

42,128

 

Issuance of common stock related to employee stock purchase plan

 

 

8,307

 

 

 

 

 

 

169

 

 

 

 

 

 

 

 

 

169

 

Balance as of March 31, 2022

 

 

39,044,669

 

 

$

4

 

 

$

461,389

 

 

$

(684

)

 

$

(220,732

)

 

$

239,977

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2022

 

 

39,439,575

 

 

$

4

 

 

$

483,170

 

 

$

(1,175

)

 

$

(297,150

)

 

$

184,849

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(22,545

)

 

 

(22,545

)

Unrealized gain on marketable securities

 

 

 

 

 

 

 

 

 

 

 

577

 

 

 

 

 

 

577

 

Stock-based compensation

 

 

 

 

 

 

 

 

5,887

 

 

 

 

 

 

 

 

 

5,887

 

Issuance of common stock upon exercise of stock options

 

 

80,611

 

 

 

 

 

 

158

 

 

 

 

 

 

 

 

 

158

 

Shares sold as part of controlled equity offering sales agreements

 

 

4,635,353

 

 

 

 

 

 

44,743

 

 

 

 

 

 

 

 

 

44,743

 

Issuance of common stock related to employee stock purchase plan

 

 

19,550

 

 

 

 

 

 

153

 

 

 

 

 

 

 

 

 

153

 

Balance as of March 31, 2023

 

 

44,175,089

 

 

$

4

 

 

$

534,111

 

 

$

(598

)

 

$

(319,695

)

 

$

213,822

 

 

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

6


Stoke Therapeutics, Inc.

Consolidated statements of cash flows

(in thousands)

(unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(22,545

)

 

$

(24,649

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

Depreciation

 

 

597

 

 

 

247

 

Amortization and accretion of marketable securities

 

 

32

 

 

 

235

 

Stock-based compensation

 

 

5,887

 

 

 

4,975

 

Reduction in the carrying amount of right of use assets

 

 

550

 

 

 

377

 

Changes in assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

(2,088

)

 

 

(3,265

)

Accounts payable and accrued liabilities

 

 

351

 

 

 

(3,443

)

Deferred revenue

 

 

(4,140

)

 

 

58,014

 

Net cash provided by (used in) operating activities

 

 

(21,356

)

 

 

32,491

 

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of marketable securities

 

 

 

 

 

(143,941

)

Purchases of property and equipment

 

 

(165

)

 

 

(841

)

Sales of marketable securities

 

 

53,250

 

 

 

9,000

 

Net cash provided by (used in) investing activities

 

 

53,085

 

 

 

(135,782

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from Employee Stock Purchase Plan

 

 

153

 

 

 

169

 

Proceeds from issuance of common stock upon exercise of stock options

 

 

158

 

 

 

93

 

Proceeds from controlled equity offering sales agreements

 

 

44,743

 

 

 

42,245

 

Net cash provided by financing activities

 

 

45,054

 

 

 

42,507

 

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

 

 

76,783

 

 

 

(60,784

)

Cash, cash equivalents and restricted cash—beginning of period

 

 

114,125

 

 

 

145,464

 

Cash, cash equivalents and restricted cash—end of period

 

$

190,908

 

 

$

84,680

 

 

 

 

 

 

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

Property and equipment included in accrued expense and accounts payable

 

$

545

 

 

$

301

 

 

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

7


Stoke Therapeutics, Inc. and subsidiary

Notes to Consolidated financial statements—(unaudited)

1. Nature of the business

Organization

Stoke Therapeutics, Inc. (the “Company”) was founded in June 2014 and was incorporated under the laws of the State of Delaware. The Company is a biotechnology company dedicated to addressing the underlying cause of severe diseases by upregulating protein expression with RNA-based medicines.

Shelf Registration

In May 2022, the Company filed a universal Shelf Registration statement on Form S-3 (the “Registration Statement”) with the SEC. The Registration Statement was declared effective by the SEC on May 31, 2022, and contains two prospectuses: a base prospectus, which covers the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $400,000,000 of its common stock, preferred stock, debt securities, warrants to purchase common stock, preferred stock or debt securities, subscription rights to purchase common stock, preferred stock or debt securities and/or units consisting of some or all of these securities; and a sales agreement prospectus covering the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $150,000,000 of its common stock that may be issued and sold under a Controlled Equity Offering Sales Agreement (“Sales Agreement”). The specific terms of any securities to be offered pursuant to the base prospectus will be specified in a prospectus supplement to the base prospectus. The $150,000,000 of common stock that may be offered, issued and sold under the sales agreement prospectus is included in the $400,000,000 of securities that may be offered, issued and sold by the Company under the base prospectus. As of March 31, 2023, the Company had issued approximately 4.6 million shares of common stock pursuant to the Sales Agreement for net proceeds of $44.7 million.

Uncertainties

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

Liquidity

The Company expects that its operating losses and negative cash flows will continue for the foreseeable future. As of the issuance date of these unaudited consolidated financial statements, the Company expects that its cash, cash equivalents, marketable securities and restricted cash will be sufficient to fund its operating expenses and capital expenditure requirements through at least twelve months from the issuance date of these unaudited consolidated financial statements.

2. Summary of significant accounting policies and recent accounting pronouncements

Basis of presentation and consolidation

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of the Company and its wholly-owned subsidiary. Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). All intercompany transactions between and among its consolidated subsidiary have been eliminated.

Unaudited interim financial information

The accompanying interim unaudited consolidated financial statements and related disclosures are unaudited and have been prepared in accordance with GAAP for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s consolidated financial statements and related footnotes as of and for the year ended December 31, 2022, which was filed with the SEC on March 6, 2023. The Company’s financial information as of March 31, 2023 and for the three months ended March 31, 2023 and 2022 is unaudited, but in the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation of the financial position, results of operations and cash

8


flows at the dates and for the periods presented of the results of these interim periods have been included. The balance sheet information as of December 31, 2022 was derived from audited consolidated financial statements. The results of the Company’s operations for any interim period are not necessarily indicative of the results that may be expected for any other interim period or for a full fiscal year.

Use of estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, equity, revenue, expenses and disclosure of contingent assets and liabilities. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Actual results could differ from those estimates.

Cash, cash equivalents and restricted cash

The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. The Company deposits its cash in checking, sweep and money market accounts.

At March 31, 2023, restricted cash consisted of money market accounts collateralizing letters of credit issued as security deposits in connection with the Company’s leases of its corporate facilities.

Cash and cash equivalents, and restricted cash in the consolidated statements of cash flows consists of the following (in thousands):

 

 

 

As of March 31,

 

 

 

2023

 

 

2022

 

Cash and cash equivalents

 

$

190,339

 

 

$

84,111

 

Restricted cash - long-term

 

 

569

 

 

 

569

 

Total cash, cash equivalents and restricted cash

 

$

190,908

 

 

$

84,680

 

 

Emerging growth company and smaller reporting company status

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies.

The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the Company’s unaudited consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

The Company will remain an emerging growth company until the earliest of (1) the last day of its first fiscal year (a) in which the Company has total annual gross revenues of at least $1.235 billion, or (b) in which the Company is deemed to be a large accelerated filer, which means the market value of its common stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30th, (2) the date on which it has issued more than $1.0 billion in non-convertible debt securities during the prior three-year period and (3) December 31, 2024.

The Company is also a “smaller reporting company,” meaning that the market value of its stock held by non-affiliates is less than $700.0 million and the Company’s annual revenue is less than $100.0 million during the most recently completed fiscal year. The Company may continue to be a smaller reporting company as long as either (i) the market value of its stock held by non-affiliates is less than $250.0 million or (ii) its annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of its stock held by non-affiliates is less than $700.0 million. If the Company is a smaller reporting company at the time it ceases to be an emerging growth company, the Company may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company, the Company may choose to present only the two most recent fiscal years of audited financial statements in its Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

9


3. Fair value measurements

The following tables present information about the Company’s financial assets measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands):

 

 

 

Fair value measurements as of March 31, 2023

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

190,339

 

 

$

 

 

$

 

 

$

190,339

 

Total

 

$

190,339

 

 

$

 

 

$

 

 

$

190,339

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

$

 

 

$

5,302

 

 

$

 

 

$

5,302

 

Commercial paper

 

 

 

 

 

3,978

 

 

 

 

 

 

3,978

 

US Government debt securities

 

 

 

 

 

54,054

 

 

 

 

 

 

54,054

 

Total

 

$

 

 

$

63,334

 

 

$

 

 

$

63,334

 

 

 

 

Fair value measurements as of December 31, 2022

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

111,927

 

 

$

 

 

$

 

 

$

111,927

 

Total

 

$

111,927

 

 

$

 

 

$

 

 

$

111,927

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

$

 

 

$

34,527

 

 

$

 

 

$

34,527

 

Commercial paper

 

 

 

 

 

7,978

 

 

 

 

 

 

7,978

 

US Government debt securities

 

 

 

 

 

73,534

 

 

 

 

 

 

73,534

 

Total

 

$

 

 

$

116,039

 

 

$

 

 

$

116,039

 

The Company’s cash equivalents and marketable securities are carried at fair value, determined according to the fair value hierarchy. The carrying value of the Company’s accounts payable and accrued expenses approximate their fair values due to the short-term nature of these liabilities.

The Company’s assets with fair value categorized as Level 1 within the fair value hierarchy include money market funds. Money market funds are publicly traded mutual funds and are presented as cash equivalents on the consolidated balance sheets as of March 31, 2023 and December 31, 2022.

The Company measures its marketable securities at fair value on a recurring basis and classifies those instruments within Level 2 of the fair value hierarchy. Marketable securities are valued using models or other valuation methodologies that use Level 2 inputs. These models are primarily industry-standard models that consider various assumptions, including time value, yield curve, volatility factors, default rates, current market and contractual prices for the underlying financial instruments, as well as other economic measures. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

There were no transfers to Level 3 in the periods presented.

 

4. Marketable securities

The following table summarizes the Company’s marketable securities as of March 31, 2023 (in thousands):

 

 

 

March 31, 2023

 

 

 

Amortized Cost

 

 

Unrealized Gains

 

 

Unrealized Loss

 

 

Fair Value

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

$

5,317

 

 

$

 

 

$

(15

)

 

$

5,302

 

Commercial paper

 

 

3,990

 

 

 

 

 

 

(12

)

 

 

3,978

 

US Government debt securities

 

 

54,625

 

 

 

 

 

 

(571

)

 

 

54,054

 

Total

 

$

63,932

 

 

$

 

 

$

(598

)

 

$

63,334

 

 

10


The following table summarizes the Company’s marketable securities as of December 31, 2022 (in thousands):

 

 

 

December 31, 2022