ROCKET PHARMACEUTICALS, INC. You should read the following discussion and analysis of our financial condition
and results of operations together with the condensed consolidated financial
statements and related notes that are included elsewhere in this Quarterly
Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended
We are a clinical-stage, multi-platform biotechnology company focused on the development of first, only and best-in-class gene therapies, with direct on-target mechanism of action and clear clinical endpoints, for rare and devastating diseases. We currently have three clinical-stage ex vivo lentiviral vector ("LVV") programs currently enrolling patients in the US and EU for Fanconi Anemia ("FA"), a genetic defect in the bone marrow that reduces production of blood cells or promotes the production of faulty blood cells, Leukocyte Adhesion Deficiency-I ("LAD-I"), a genetic disorder that causes the immune system to malfunction and Pyruvate Kinase Deficiency ("PKD"), a rare red blood cell autosomal recessive disorder that results in chronic non-spherocytic hemolytic anemia. Of these, both the Phase 2 FA program and the Phase 1/2 LAD-I program are in registration-enabling studies in the US and EU. In addition, in the US we have a clinical stage in vivo adeno-associated virus ("AAV") program for Danon disease, a multi-organ lysosomal-associated disorder leading to early death due to heart failure. Finally, we have a pre-clinical stage LVV program for Infantile Malignant Osteopetrosis ("IMO"), a genetic disorder characterized by increased bone density and bone mass secondary to impaired bone resorption - this program is anticipated to enter the clinic in 2020. We have global commercialization and development rights to all of these product candidates under royalty-bearing license agreements. Additional work in the discovery stage for an FA CRISPR/CAS9 program as well as a gene therapy program for the less common FA subtypes C and G is ongoing.
Recent Developments
On
Gene Therapy Overview
Genes are composed of sequences of deoxyribonucleic acid ("DNA"), which code for proteins that perform a broad range of physiologic functions in all living organisms. Although genes are passed on from generation to generation, genetic changes, also known as mutations, can occur in this process. These changes can result in the lack of production of proteins or the production of altered proteins with reduced or abnormal function, which can in turn result in disease.
Gene therapy is a therapeutic approach in which an isolated gene sequence or segment of DNA is administered to a patient, most commonly for the purpose of treating a genetic disease that is caused by genetic mutations. Currently available therapies for many genetic diseases focus on administration of large proteins or enzymes and typically address only the symptoms of the disease. Gene therapy aims to address the disease-causing effects of absent or dysfunctional genes by delivering functional copies of the gene sequence directly into the patient's cells, offering the potential for curing the genetic disease, rather than simply addressing symptoms.
We are using modified non-pathogenic viruses for the development of our gene therapy treatments. Viruses are particularly well suited as delivery vehicles because they are adept at penetrating cells and delivering genetic material inside a cell. In creating our viral delivery vehicles, the viral (pathogenic) genes are removed and are replaced with a functional form of the missing or mutant gene that is the cause of the patient's genetic disease. The functional form of a missing or mutant gene is called a therapeutic gene, or the "transgene." The process of inserting the transgene is called "transduction." Once a virus is modified by replacement of the viral genes with a transgene, the modified virus is called a "viral vector." The viral vector delivers the transgene into the targeted tissue or organ (such as the cells inside a patient's bone marrow). We have two types of viral vectors in development, LVV and AAV. We believe that our LVV and AAV-based programs have the potential to offer a long-lasting and significant therapeutic benefit to patients.
Gene therapies can be delivered either (1) ex vivo (outside the body), in which case the patient's cells are extracted and the vector is delivered to these cells in a controlled, safe laboratory setting, with the modified cells then being reinserted into the patient, or (2) in vivo (inside the body), in which case the vector is injected directly into the patient, either intravenously ("IV") or directly into a specific tissue at a targeted site, with the aim of the vector delivering the transgene to the targeted cells.
We believe that scientific advances, clinical progress, and the greater regulatory acceptance of gene therapy have created a promising environment to advance gene therapy products as these products are being designed to restore cell function and improve clinical outcomes, which in many cases include prevention of death at an early age.
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Table of Contents Pipeline Overview
The chart below shows the current phases of development of Rocket's programs and product candidates:
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LVV Programs. Rocket's LVV-based programs utilize third-generation, self-inactivating lentiviral vectors to target selected rare diseases. Currently, Rocket is developing LVV programs to treat FA, LAD-I, PKD, and IMO.
Fanconi Anemia Complementation Group A (FANCA):
FA, a rare and life-threatening DNA-repair disorder, generally arises from a mutation in a single FA gene. An estimated 60 to 70% of cases arise from mutations in the Fanconi-A ("FANCA") gene, which is the focus of our program. FA results in bone marrow failure, developmental abnormalities, myeloid leukemia and other malignancies, often during the early years and decades of life. Bone marrow aplasia, which is bone marrow that no longer produces any or very few red and white blood cells and platelets leading to infections and bleeding, is the most frequent cause of early morbidity and mortality in FA, with a median onset before 10 years of age. Leukemia is the next most common cause of mortality, ultimately occurring in about 20% of patients later in life. Solid organ malignancies, such as head and neck cancers, can also occur, although at lower rates during the first two to three decades of life.
Although improvements in allogeneic (donor-mediated) hematopoietic stem cell transplant ("HSCT"), currently the most frequently utilized therapy for FA, have resulted in more frequent hematologic correction of the disorder, HSCT is associated with both acute and long-term risks, including transplant-related mortality, graft versus host disease ("GVHD"), a sometimes fatal side effect of allogeneic transplant characterized by painful ulcers in the GI tract, liver toxicity and skin rashes, as well as increased risk of subsequent cancers. Our gene therapy program in FA is designed to enable a minimally toxic hematologic correction using a patient's own stem cells during the early years of life. We believe that the development of a broadly applicable autologous gene therapy can be transformative for these patients.
Each of our LVV-based programs utilize third-generation, self-inactivating lentiviral vectors to correct defects in patients' HSCs, which are the cells found in bone marrow that are capable of generating blood cells over a patient's lifetime. Defects in the genetic coding of HSCs can result in severe, and potentially life-threatening anemia, which is when a patient's blood lacks enough properly functioning red blood cells to carry oxygen throughout the body. Stem cell defects can also result in severe and potentially life-threatening decreases in white blood cells resulting in susceptibility to infections, and in platelets responsible for blood clotting, which may result in severe and potentially life-threatening bleeding episodes. Patients with FA have a genetic defect that prevents the normal repair of genes and chromosomes within blood cells in the bone marrow, which frequently results in the development of acute myeloid leukemia ("AML"), a type of blood cancer, as well as bone marrow failure and congenital defects. The average lifespan of an FA patient is estimated to be 30 to 40 years. The prevalence of FA in the US and EU is estimated to be about 4,000, and given the efficacy seen in non-conditioned patients, the addressable annual market opportunity is now thought to be in the 400 to 500 range.
We currently have one LVV-based program targeting FA, RP-L102. RP-L102 is our
lead lentiviral vector based program that we in-licensed from Centro de
Investigaciones Energéticas, Medioambientales y Tecnológicas ("CIEMAT"), which
is a leading research institute in
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In
During the third quarter of 2019, we received alignment from the FDA on the
trial design and the primary endpoint. This alignment was similar to that
previously received from the
In
Leukocyte Adhesion Deficiency-I (LAD-I):
LAD-I is a rare autosomal recessive disorder of white blood cell adhesion and migration, resulting from mutations in the ITGB2 gene encoding for the Beta-2 Integrin component, CD18. Deficiencies in CD18 result in an impaired ability for neutrophils (a subset of infection-fighting white blood cells) to leave blood vessels and enter into tissues where these cells are needed to combat infections. As is the case with many rare diseases, true estimates of incidence are difficult; however, several hundred cases have been reported to date.
Most LAD-I patients are believed to have the severe form of the disease. Severe LAD-I is notable for recurrent, life-threatening infections and substantial infant mortality in patients who do not receive an allogeneic HSCT. Mortality for severe LAD-I has been reported as 60 to 75% by age two in the absence of allogeneic HCST.
We currently have one program targeting LAD-I, RP-L201. RP-L201 is a clinical
program that we in-licensed from CIEMAT. We have partnered with
The ongoing open-label, single-arm, Phase 1/2 registration enabling clinical
trial of RP-L201 has dosed one severe LAD-I patient in the
In
Pyruvate Kinase Deficiency (PKD):
Red blood cell PKD is a rare autosomal recessive disorder resulting from
mutations in the pyruvate kinase L/R ("PKLR") gene encoding for a component of
the red blood cell ("RBC") glycolytic pathway. PKD is characterized by chronic
non-spherocytic hemolytic anemia, a disorder in which RBCs do not assume a
normal spherical shape and are broken down, leading to decreased ability to
carry oxygen to cells, with anemia severity that can range from mild
(asymptomatic) to severe forms that may result in childhood mortality or a
requirement for frequent, lifelong RBC transfusions. The pediatric population is
the most commonly and severely affected subgroup of patients with PKD, and PKD
often results in splenomegaly (abnormal enlargement of the spleen), jaundice and
chronic iron overload which is likely the result of both chronic hemolysis and
the RBC transfusions used to treat the disease. The variability in anemia
severity is believed to arise in part from the large number of diverse mutations
that may affect the PKLR gene. Estimates of disease incidence have ranged
between 3.2 and 51 cases per million in the white
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We currently have one LVV-based program targeting PKD, RP-L301. RP-L301 is a
clinical stage program that we in-licensed from CIEMAT. The IND for RP-L301 to
initiate a global Phase 1 study was cleared by the FDA in
This global Phase 1 open-label, single-arm, clinical trial is expected to enroll
six adult and pediatric transfusion-dependent PKD patients in the
Infantile Malignant Osteopetrosis (IMO):
IMO is a genetic disorder characterized by increased bone density and bone mass secondary to impaired bone resorption. Normally, small areas of bone are constantly being broken down by special cells called osteoclasts, then made again by cells called osteoblasts. In IMO, the cells that break down bone (osteoclasts) do not work properly, which leads to the bones becoming thicker and not as healthy. Untreated IMO patients may suffer from a compression of the bone-marrow space, which results in bone marrow failure, anemia and increased infection risk due to the lack of production of white blood cells. Untreated IMO patients may also suffer from a compression of cranial nerves, which transmit signals between vital organs and the brain, resulting in blindness, hearing loss and other neurologic deficits.
We currently have one LVV-based program targeting IMO, RP-L401. RP-L401 is a
preclinical program that we in-licensed from
AAV Program: Danon Disease:
Danon disease is a multi-organ lysosomal-associated disorder leading to early
death due to heart failure. Danon disease is caused by mutations in the gene
encoding lysosome-associated membrane protein 2 ("LAMP-2"), a mediator of
autophagy. This mutation results in the accumulation of autophagic vacuoles,
predominantly in cardiac and skeletal muscle. Male patients often require heart
transplantation and typically die in their teens or twenties from progressive
heart failure. Along with severe cardiomyopathy, other Danon disease symptoms
can include skeletal muscle weakness, liver disease, and intellectual
impairment. There are no specific therapies available for the treatment of Danon
disease. RP-A501 is in clinical trials as an in vivo therapy for Danon disease,
which is estimated to have a prevalence of 15,000 to 30,000 patients in the
In
On
As of
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Table of Contents CRISPR/Cas9 gene editing in Fanconi Anemia:
In addition to its LVV and AAV programs, we also have a program evaluating CRISPR/Cas9-based gene editing for FA. This program is currently in the discovery phase. CRISPR/Cas9-based gene editing is a different method of correcting the defective genes in a patient, where the editing is very specific and targeted to a particular gene sequence. "CRISPR/Cas9" stands for Clustered, Regularly Interspaced Short Palindromic Repeats ("CRISPR") Associated protein-9. The CRISPR/Cas9 technology can be used to make "cuts" in DNA at specific sites of targeted genes, making it potentially more precise in delivering gene therapies than traditional vector-based delivery approaches. CRISPR/Cas9 can also be adapted to regulate the activity of an existing gene without modifying the actual DNA sequence, which is referred to as gene regulation.
Strategy
We seek to bring hope and relief to patients with devastating, undertreated, rare pediatric diseases through the development and commercialization of potentially curative first-in-class gene therapies. To achieve these objectives, we intend to develop into a fully-integrated biotechnology company. In the near- and medium-term, we intend to develop our first-in-class product candidates, which are targeting devastating diseases with substantial unmet need, develop proprietary in-house analytics and manufacturing capabilities and continue to commence registration trials for our currently planned programs. In the medium and long-term, we expect to submit our first biologics license applications ("BLAs"), and establish our gene therapy platform and expand our pipeline to target additional indications that we believe to be potentially compatible with our gene therapy technologies. In addition, during that time, we believe that our currently planned programs will become eligible for priority review vouchers from the FDA that provide for expedited review. We have assembled a leadership and research team with expertise in cell and gene therapy, rare disease drug development and commercialization.
We believe that our competitive advantage lies in our disease-based selection approach, a rigorous process with defined criteria to identify target diseases. We believe that this approach to asset development differentiates us as a gene therapy company and potentially provides us with a first-mover advantage.
Financial Overview
Since our inception, we have devoted substantially all of our resources to
organizing and staffing the Company, business planning, raising capital,
acquiring or discovering product candidates and securing related intellectual
property rights, conducting discovery, research and development activities for
the programs and planning for potential commercialization. We do not have any
products approved for sale and have not generated revenue from product sales.
From inception through
Since inception, we have incurred significant operating losses. Our ability to
generate product revenue sufficient to achieve profitability will depend heavily
on the successful development and eventual commercialization of one or more of
the current or future product candidates and programs. We had net losses of
Until such a time as we can generate significant revenue from product sales, if ever, we will seek to fund our operations through public or private equity or debt financings or other sources, which may include collaborations with third parties and government programs or grants. Adequate additional financing may not be available to us on acceptable terms, or at all. We can make no assurances that we will be able to raise the cash needed to fund our operations and, if we fail to raise capital when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more product candidates or delay pursuit of potential in-licenses or acquisitions.
Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.
Revenue
To date, we have not generated any revenue from any sources, including from product sales, and we do not expect to generate any revenue from the sale of products in the near future. If our development efforts for product candidates are successful and result in regulatory approval or license agreements with third parties, we may generate revenue in the future from product sales.
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Table of Contents Operating Expenses
Research and Development Expenses
Our research and development program ("R&D") expenses consist primarily of external costs incurred for the development of our product candidates. These expenses include:
• expenses incurred under agreements with research institutions that conduct
research and development activities including, process development,
preclinical, and clinical activities on Rocket's behalf;
• costs related to process development, production of preclinical and clinical
materials, including fees paid to contract manufacturers and manufacturing
input costs for use in internal manufacturing processes;
• consultants supporting process development and regulatory activities; and
• costs related to in-licensing of rights to develop and commercialize our
product candidate portfolio.
We recognize external development costs based on contractual payment schedules aligned with program activities, invoices for work incurred, and milestones which correspond with costs incurred by the third parties. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses.
Our direct research and development expenses are tracked on a program-by-program basis for product candidates and consist primarily of external costs, such as research collaborations and third party manufacturing agreements associated with our preclinical research, process development, manufacturing, and clinical development activities. Our direct research and development expenses by program also include fees incurred under license agreements. Our personnel, non-program and unallocated program expenses include costs associated with activities performed by our internal research and development organization and generally benefit multiple programs. These costs are not separately allocated by product candidate and consist primarily of:
• salaries and personnel-related costs, including benefits, travel and
stock-based compensation, for our scientific personnel performing research and
development activities;
• facilities and other expenses, which include expenses for rent and maintenance
of facilities, and depreciation expense and;
• laboratory supplies and equipment used for internal research and development
activities.
Our research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development. As a result, we expect that research and development expenses will increase substantially over the next several years as we increase personnel costs, including stock-based compensation, support ongoing clinical studies, seek to achieve proof-of-concept in one or more product candidates, advance preclinical programs to clinical programs, and prepare regulatory filings for product candidates.
We cannot determine with certainty the duration and costs to complete current or future clinical studies of product candidates or if, when, or to what extent we will generate revenues from the commercialization and sale of any of our product candidates that obtain regulatory approval. We may never succeed in achieving regulatory approval for any of our product candidates. The duration, costs, and timing of clinical studies and development of product candidates will depend on a variety of factors, including:
• the scope, rate of progress, and expense of ongoing as well as any future
clinical studies and other research and development activities that we
undertake;
• future clinical trial results;
• uncertainties in clinical trial enrollment rates;
• changing standards for regulatory approval; and
• the timing and receipt of any regulatory approvals.
We expect research and development expenses to increase for the foreseeable future as we continue to invest in research and development activities related to developing product candidates, including investments in manufacturing, as our programs advance into later stages of development and as we conduct additional clinical trials. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of product candidates is highly uncertain. As a result, we are unable to determine the duration and completion costs of research and development projects or when and to what extent we will generate revenue from the commercialization and sale of any of our product candidates.
Our future research and development expenses will depend on the clinical success of our product candidates, as well as ongoing assessments of the commercial potential of such product candidates. In addition, we cannot forecast with any degree of certainty which product candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements. We expect our research and development expenses to increase in future periods for the foreseeable future as we seek to complete development of our product candidates.
The successful development and commercialization of our product candidates is highly uncertain. This is due to the numerous risks and uncertainties associated with product development and commercialization, including the uncertainty of:
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• the scope, progress, outcome and costs of our clinical trials and other
research and development activities;
• the efficacy and potential advantages of our product candidates compared to
alternative treatments, including any standard of care;
• the market acceptance of our product candidates;
• obtaining, maintaining, defending and enforcing patent claims and other
intellectual property rights;
• significant and changing government regulation; and
• the timing, receipt and terms of any marketing approvals.
A change in the outcome of any of these variables with respect to the development of our product candidates that we may develop could mean a significant change in the costs and timing associated with the development of our product candidates. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials or other testing beyond those that we currently contemplate for the completion of clinical development of any of our product candidates that we may develop or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development of that product candidate.
General and Administrative Expenses
General and administrative ("G&A") expenses consist primarily of salaries and related benefit costs for personnel, including stock-based compensation and travel expenses for our employees in executive, operational, finance, legal, business development, and human resource functions. In addition, other significant general and administrative expenses include professional fees for legal, patents, consulting, investor and public relations, auditing and tax services as well as other expenses for rent and maintenance of facilities, insurance and other supplies used in general and administrative activities. We expect general and administrative expenses to increase for the foreseeable future due to anticipated increases in headcount to support the continued advancement of our product candidates. We also anticipate that we will incur increased accounting, audit, legal, regulatory, compliance and director and officer insurance costs as well as investor and public relations expenses.
Interest Expense
Interest expense is related to the 2021 Convertible Notes, which mature in
Interest Income
Interest income is related to interest earned from investments.
Critical Accounting Policies and Significant Judgments and Estimates
Our consolidated financial statements are prepared in accordance with generally
accepted accounting principles in the
Our significant accounting policies are described in more detail in our 2019 Form 10-K, except as otherwise described below.
Results of Operations
Comparison of the Three Months Ended
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The following table summarizes the results of operations for the three months
ended
Three Months Ended March 31,
2020 2019 Change
Operating expenses:
Research and development $ 16,957 $ 15,137 $ 1,820
General and administrative 7,163 3,808 3,355
Total operating expenses 24,120 18,945 5,175
Loss from operations (24,120 ) (18,945 ) (5,175 )
Research and development incentives - 250 (250 )
Interest expense (1,573 ) (1,604 ) 31
Interest and other income net 967 601 366
Accretion of discount on investments 62 247 (185 )
Total other income (expense), net (544 ) (506 ) (38 )
Net loss $ (24,664 ) $ (19,451 ) $ (5,213 ) Research and Development Expenses
R&D expenses increased from
General and Administrative Expenses
G&A expenses increased from
Other Income
Other income remained consistent and was
Liquidity, Capital Resources and Plan of Operations
Since inception, we have not generated any revenue from any sources, including from product sales, and have incurred significant operating losses and negative cash flows from our operations. We have funded operations to date primarily with proceeds from the sale of preferred shares, common stock and the issuance of convertible notes.
Cash Flows
The following table summarizes our cash flows for each of the periods presented:
Three Months Ended March 31,
2020 2019
Cash used in operating activities $ (22,245 ) $ (15,977 )
Cash provided by investing activities 27,499 29,175
Cash used in financing activities (117 ) -
Net change in cash, cash equivalents and
restricted cash $ 5,137 $ 13,198
Operating Activities
During the three months ended
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During the three months ended
Investing Activities
During the three months ended
During the three months ended
Financing Activities
During the three months ended
During the three months ended
Funding Requirements
We expect expenses to increase substantially in connection with our ongoing activities, particularly as we advance our preclinical activities, initiate additional clinical trials and manufacturing of our product candidates. In addition, we expect to incur additional costs associated with operating as a public company. Our expenses will also increase as we:
• leverage our programs to advance other product candidates into preclinical and
clinical development;
• seek regulatory agreements to initiate clinical trials in the EU, US and ROW;
• establish a sales, marketing, medical affairs and distribution infrastructure
to commercialize any product candidates for which Rocket may obtain marketing
approval and intend to commercialize on its own or jointly;
• hire additional preclinical, clinical, regulatory, quality and scientific
personnel;
• expand our operational, financial and management systems and increase
personnel, including personnel to support our clinical development,
manufacturing and commercialization efforts and our operations as a public
company;
• maintain, expand and protect our intellectual property portfolio; and
• acquire or in-license other product candidates and technologies.
As of
Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical product candidates, we are unable to estimate the exact amount of working capital requirements. Our future funding requirements will depend on, and could increase significantly as a result of, many factors, including:
• the scope, progress, results and costs of researching and developing our
product candidates, and conducting preclinical studies and clinical trials;
• the costs, timing and outcome of regulatory review of our product candidates;
• the costs of future activities, including product sales, medical affairs,
marketing, manufacturing and distribution, for any of our product candidates
for which we receive marketing approval;
• the costs of manufacturing commercial-grade product to support commercial
launch;
• the ability to receive additional non-dilutive funding, including grants from
organizations and foundations;
• the revenue, if any, received from commercial sale of its products, should any
of its product candidates receive marketing approval;
• the costs of preparing, filing and prosecuting patent applications,
maintaining and enforcing our intellectual property rights and defending
intellectual property-related claims;
• our ability to establish and maintain collaborations on favorable terms, if at
all;
• the extent to which we acquire or in-license other product candidates and
technologies; and
• the timing, receipt and amount of sales of, or milestone payments related to
our royalties on, current or future product candidates, if any.
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Table of Contents Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of public or private equity offerings, debt financings, collaborations, strategic partnerships or marketing, distribution or licensing arrangements with third parties. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our ownership interest may be materially diluted, and the terms of such securities could include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specified actions, such as incurring additional debt, making capital expenditures or declaring dividends. In addition, additional debt financing would result in increased fixed payment obligations.
If we raise funds through governmental funding, collaborations, strategic partnerships or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, reduce or eliminate our product development or future commercialization efforts or grant rights to develop and market product candidates that it would otherwise prefer to develop and market themselves.
Contractual Obligations and Commitments
There were no material changes outside the ordinary course of our business to the contractual obligations specified in the table of contractual obligations included in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2019 Form 10-K. Information regarding contractual obligations and commitments may be found in Note 11 of our Consolidated Unaudited Financial Statements in this Form 10-Q.
Off-Balance Sheet Arrangements
We did not have during the periods presented, and do not currently have, any
off-balance sheet arrangements, as defined in the rules and regulations of the
JOBS Act
Under Section 107(b) of the Jumpstart Our Business Startups Act of 2012 (the
"JOBS Act"), an "emerging growth company" can delay the adoption of new or
revised accounting standards until such time as those standards would apply to
private companies. We have irrevocably elected not to avail ourselves of this
exemption and, as a result, we will adopt new or revised accounting standards at
the same time as other public companies that are not emerging growth companies.
There are other exemptions and reduced reporting requirements provided by the
JOBS Act that we are currently evaluating. For example, as an emerging growth
company, we are exempt from Sections 14A(a) and (b) of the Securities Exchange
Act of 1934 (the "Exchange Act"), which would otherwise require us to (i) submit
certain executive compensation matters to stockholder advisory votes, such as
"say-on-pay," "say-on-frequency" and "golden parachutes" and (ii) disclose
certain executive compensation related items such as the correlation between
executive compensation and performance and comparisons of our Chief Executive
Officer's compensation to our median employee compensation. We also intend to
rely on an exemption from the rule requiring us to provide an auditor's
attestation report on our internal controls over financial reporting pursuant to
Section 404(b) of the Sarbanes-Oxley Act and the rule requiring us to comply
with any requirement that may be adopted by the
Recently Issued Accounting Pronouncements
A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 4 of our "Consolidated Unaudited Financial Statements," in this Quarterly Report on Form 10-Q.
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