You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. This discussion and analysis and other parts of this Annual Report on Form 10-K contain forward-looking statements based upon current beliefs, plans and expectations related to future events and our future financial performance that involve risks, uncertainties and assumptions, such as statements regarding our intentions, plans, objectives, expectations, forecasts and projections. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under the section titled "Risk Factors" and elsewhere in this Annual Report on Form 10-K.
Overview
Kodiak Sciences (we or the Company) is a biopharmaceutical company committed to researching, developing and commercializing transformative therapeutics to treat high prevalence retinal diseases inthe United States and additional international markets. We are bringing new science to the design and development of next generation retinal medicines. Our ABC PlatformTM uses molecular engineering to merge the fields of antibody-based and chemistry-based therapies and is at the core of Kodiak's discovery engine. Our lead product candidate, KSI-301, is a novel anti-VEGF antibody biopolymer conjugate being investigated in multiple pivotal studies in retinal vascular diseases including wAMD, DME, RVO and non-proliferative diabetic retinopathy. Our hope with KSI-301 is to meaningfully extend treatment intervals for all patients with retinal vascular diseases. Our pipeline, including product candidates KSI-501 and KSI-601, aims to bring a similar ethos of drug development to other unmet needs in retina such as dry AMD and glaucoma. Our goal is to prevent and treat the major causes of blindness by developing next-generation therapeutics for chronic, high-prevalence retinal diseases. Our overall objective is to develop our product candidates, seek FDA and worldwide health authority marketing authorization approvals, and ultimately commercialize our product candidates.
KSI-301 Phase 2b/3 Pivotal Study in Wet AMD Top-line Readout
We recently announced top-line results from our randomized, double-masked, active comparator-controlled Phase 2b/3 clinical trial evaluating the efficacy, durability and safety of KSI-301, a novel antibody biopolymer conjugate, in treatment-naïve subjects with neovascular (wet) age-related macular degeneration ("wet AMD"). The trial randomized 559 participants, approximately 80% of whom were enrolled inthe United States . The study had two treatment arms: KSI-301 5mg on a flexible long-interval regimen and aflibercept 2mg on a fixed short-interval regimen. In the study, three monthly loading doses were administered to all subjects at 0-, 4- and 8-weeks. Subjects on aflibercept were then treated at fixed two month intervals. Subjects on KSI-301 were assessed starting three months after the completion of the loading phase (i.e. beginning at 20 weeks) and, based on predefined disease activity criteria, were treated every three-, four-, or five-months. As a result, patients in the KSI-301 group did not receive dosing more frequently than every three months at any point in the study after the loading phase. The primary endpoint of the study was the average change in best-corrected visual acuity (BCVA) score (a measure of the best vision a person can achieve when reading letters on an eye chart, including with correction such as glasses) from baseline at year one. For the assessment of the primary efficacy endpoint, KSI-301 patients in all three groups (dosed every three, four or five months) were pooled together and their BCVA was compared as a group to the aflibercept group (dosed every two months).
The results show that KSI-301 did not meet the primary efficacy endpoint of showing non-inferior visual acuity gains for subjects dosed on extended regimens compared to aflibercept given every eight weeks.
A pre-specified secondary analysis at year 1 assessing durability showed 59% of patients in the KSI-301 arm achieved five-month dosing with visual acuity gains and anatomic improvements comparable to the overall aflibercept group.
KSI-301 was well-tolerated in the study, with no new safety signals identified.
Intraocular inflammation occurred in 3.2% of KSI-301 treated patients as compared to 0.0% of patients treated with aflibercept. Recent wet AMD studies have reported intraocular inflammation rates with aflibercept of 1-4.5%. In all cases reported in the Phase 2b/3 study, the clinical finding of inflammation resolved, and no cases of intraocular inflammation with vascular occlusions were observed. We believe that these safety data coupled with the safety observations across the ongoing Phase 3 studies continue to suggest a safety profile for KSI-301 comparable to today's existing standard of care agents. 72 -------------------------------------------------------------------------------- We believe allowing treatment with KSI-301 no more often than every twelve weeks after the loading phase for every patient was insufficient. Nonetheless, we believe the results demonstrate a clear anti-VEGF effect, strong durability and a reassuring safety profile. We believe these data continue to support the potential of KSI-301 and our ABC Platform to significantly extend treatment intervals in retinal disorders in a safe and convenient manner.
KSI-301 Regulatory Plan and Outlook
If successful, we intend to include data from the BEACON, GLEAM/GLIMMER, and DAYLIGHT studies in a single initial BLA, and would seek labeling at launch that is supportive of a range of dosing intervals. We continue to expect that data from our GLEAM and GLIMMER studies will serve as the primary basis for our anticipated BLA submission in DME. Data from our BEACON study is intended to serve as the basis for our anticipated BLA submission in RVO. In wet AMD, we believe that the DAYLIGHT study may clarify the ability of KSI-301 when dosed more frequently to effectively treat a broader population of patients with wet AMD. If successful, we believe that data from our DAYLIGHT study could form the basis of our anticipated BLA submission in wet AMD, with monthly dosing. We believe that, over time, we may be able to generate additional data to support longer-interval dosing in wet AMD in certain patient populations. We are not planning for results of the GLOW study to be included in our initial BLA filing, given our expectations for a longer recruitment timeframe. We may include the results of the GLOW study in NPDR without DME in a supplemental BLA following our planned initial BLA submission.
Financial Operations Overview
Since inception inJune 2009 , we have devoted substantially all of our resources to discovering and developing product candidates and manufacturing processes, building our ABC Platform and assembling our core capabilities in drug development for ophthalmic disease. We plan to continue to use third-party contract research organizations, or CROs, to carry out our preclinical and clinical development. We rely on third-party contract manufacturing organizations, or CMOs, to manufacture and supply our preclinical and clinical materials to be used during the development of our product candidates. We are evaluating investments in commercial manufacturing capacity. We do not have any products approved for sale and have not generated any product revenue since inception. We have funded our operations primarily through the sale and issuance of equity securities. InOctober 2018 , we completed our initial public offering, or IPO. InDecember 2019 , we completed a follow-on offering. InNovember 2020 , we completed a second follow-on offering. We have incurred significant operating losses to date and expect that our operating losses will increase significantly as we advance our product candidates, particularly KSI-301, through preclinical and clinical development, seek regulatory approval, prepare for and, if approved, proceed to commercialization; broaden and improve our platform; acquire, discover, validate and develop additional product candidates; obtain, maintain, protect and enforce our intellectual property portfolio; and hire additional personnel. In addition, we expect to incur additional costs associated with operating as a public company. Our net loss was$267.0 million ,$133.1 million and$47.4 million for the years endedDecember 31, 2021 , 2020 and 2019, respectively. As ofDecember 31, 2021 , we had an accumulated deficit of$558.2 million . Our ability to generate product revenue will depend on the successful development and eventual commercialization of one or more of our product candidates. Until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources, including potential collaborations with other companies or other strategic transactions. Adequate funding may not be available to us on acceptable terms, or at all. If we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back, or discontinue the development and commercialization of KSI-301 for wet AMD, RVO, DME or NPDR or delay our efforts to advance and expand our product pipeline. InNovember 2020 , we filed an automatic shelf registration statement (File No. 333-250109), which became effective upon filing. The shelf registration statement allows us to issue certain securities, including shares of our common stock, from time to time. InNovember 2020 , we completed a follow-on offering pursuant to the automatic shelf registration and issued and sold 5,972,222 shares of common stock, including the underwriters' full exercise of their over-allotment option, at a price to the public of$108.00 per share under our shelf registration statement. The gross proceeds from this offering were$645.0 million , resulting in aggregate net proceeds of$612.0 million after deducting underwriting discounts and commissions and other offering costs.
As of
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Components of Operating Results
Operating Expenses
Research and Development Expenses
Substantially all of our research and development expenses consist of expenses incurred in connection with the development of our ABC Platform and product candidates. These expenses include certain payroll and personnel expenses, including stock-based compensation, for our research and product development employees; laboratory supplies and facility costs; consulting costs; contract manufacturing and fees paid to CROs to conduct certain research and development activities on our behalf; and allocated overhead, including rent, equipment, depreciation and utilities. We expense both internal and external research and development expenses as they are incurred. Costs of certain activities, such as manufacturing and preclinical and clinical studies, are generally recognized based on an evaluation of the progress to completion of specific tasks. Nonrefundable payments made prior to the receipt of goods or services that will be used or rendered for future research and development activities are deferred and capitalized. The capitalized amounts are recognized as expense as the goods are delivered or the related services are performed. We are focusing substantially all of our resources and development efforts on the development of our product candidates, in particular KSI-301. We expect our research and development expenses to increase substantially during the next few years as we conduct our Phase 3 clinical studies, complete our clinical program, pursue regulatory approval of our drug candidates and prepare for a possible commercial launch. Predicting the timing or the final cost to complete our clinical program or validation of our commercial manufacturing and supply processes is difficult and delays may occur because of many factors, including factors outside of our control. For example, if the FDA or other regulatory authorities were to require us to conduct clinical trials beyond those that we currently anticipate, 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. Furthermore, we are unable to predict when or if our drug candidates will receive regulatory approval with any certainty.
General and Administrative Expenses
General and administrative expenses consist principally of payroll and personnel expenses, including stock-based compensation; professional fees for legal, consulting, accounting and tax services; allocated overhead, including rent, equipment, depreciation and utilities; and other general operating expenses not otherwise classified as research and development expenses. We anticipate that our general and administrative expenses will increase as a result of increased personnel costs, including stock-based compensation, expanded infrastructure and higher consulting, legal and accounting services associated with maintaining compliance with requirements of the stock exchange listing andSecurities and Exchange Commission , orSEC , investor relations costs and director and officer insurance premiums associated with being a public company.
Interest Income
Interest income consists primarily of interest income earned on our cash, cash equivalents and marketable securities.
Other Income (Expense), Net
Other income (expense), net consists primarily of tax provisions and amortized issuance costs from the liability related to the future sale of royalties to BBA in 2019, net of accretion income and amortization expense on marketable debt securities. 74 --------------------------------------------------------------------------------
Results of Operations
The following table summarizes our results of operations for the periods indicated (in thousands, except percentages) :
Year Ended 2021 vs 2020 December 31, Change 2021 2020 2019 Dollar Percent Operating expenses Research and development$ 217,340 $ 107,389 $ 37,506 $ 109,951 102 % General and administrative 49,711 28,618 11,684 21,093 74 % Loss from operations (267,051 ) (136,007 ) (49,190 ) (131,044 ) 96 % Interest income 298 2,902 1,568 (2,604 ) * Interest expense (22 ) (25 ) (8 ) 3 * Other income (expense), net (215 ) 34 265 (249 ) * Net loss$ (266,990 ) $ (133,096 ) $ (47,365 ) $ (133,894 ) 101 %
* Percentage is not meaningful
Research and Development Expenses
Research and development expenses increased
The following table summarizes our research and development expenses for the periods indicated (in thousands):
Year Ended December 31, 2021 vs 2020 2021 2020 2019 Change KSI-301 program expenses$ 137,849 $ 58,563 $ 19,285 $ 79,286 KSI-501 program expenses 4,529 1,573 1,188 2,956 ABC Platform and other program expenses 11,354 7,365 2,218 3,989 Payroll and personnel expenses 51,171 30,434 11,978 20,737 Facilities and other research and development expenses 12,437 9,454 2,837 2,983 Total research and development expenses$ 217,340 $ 107,389 $ 37,506 $ 109,951 KSI-301 program expenses increased$79.3 million during the year endedDecember 31, 2021 as compared to 2020. The increase was primarily due to clinical trial costs to support ongoing trials, as well as manufacturing progress for KSI-301. We initiated two pivotal Phase 3 clinical studies in DME (GLEAM and GLIMMER) and one pivotal Phase 3 clinical study in RVO (BEACON) in the third quarter of 2020. InJune 2021 , we randomized the first patients into an additional Phase 3 study in wet AMD (DAYLIGHT) designed to broaden KSI-301's product labeling.
KSI-501 program expenses increased
ABC Platform external expenses increased
Payroll and personnel expenses increased$20.7 million during the year endedDecember 31, 2021 as compared to 2020, due to increased headcount and stock-based compensation expense. We recorded an incremental stock-based compensation expense of$8.3 million relating to the long-term performance incentive plan program in the fourth quarter of 2021. Furthermore, the research and development headcount increased 38% during the year endedDecember 31, 2021 . Facilities and other research and development expenses increased$3.0 million during the year endedDecember 31, 2021 as compared to 2020, primarily due to lease costs for ourPalo Alto andSwitzerland facilities expansion.
General and Administrative Expenses
General and administrative expenses increased$21.1 million , or 74%, during the year endedDecember 31, 2021 as compared to 2020, primarily driven by increased headcount and stock-based compensation expense, professional services related to consulting, legal and accounting, and lease costs forPalo Alto facilities expansion. We recorded an incremental stock-based compensation expense of$5.9 million relating to the long-term performance incentive plan program in the fourth quarter of 2021. 75 --------------------------------------------------------------------------------
Interest Income
Interest income decreased$2.6 million during the year endedDecember 31, 2021 as compared to 2020, which was mainly attributable to interest income earned on increased cash equivalent balances from our follow-on offering inDecember 2019 andNovember 2020 . Other Income (Expense), Net
Other income (expense), net decreased
Liquidity and Capital Resources; Plan of Operations
Sources of Liquidity
We have funded our operations primarily through the sale and issuance of common stock, redeemable convertible preferred stock, convertible notes and warrants. As ofDecember 31, 2021 , we had cash and cash equivalents of$731.5 million .
Follow-On Offering
InDecember 2019 , we completed a follow-on offering pursuant to the shelf registration on Form S-3 and issued and sold 6,900,000 shares of common stock at a price to the public of$46.00 per share. The gross proceeds from this offering were$317.4 million , resulting in aggregate net proceeds of$297.6 million after deducting underwriting discounts and commissions and other offering costs payable by us.
In
Future Funding Requirements
We have incurred net losses since our inception. For the years endedDecember 31, 2021 , 2020 and 2019, we had net losses of$267.0 million ,$133.1 million , and$47.4 million , respectively, and we expect to continue to incur additional losses in future periods. As ofDecember 31, 2021 , we had an accumulated deficit of$558.2 million . We have based these estimates on assumptions that may prove to be wrong, and we could deplete our available capital resources sooner than we expect. Because of the risks and uncertainties associated with research, development and commercialization of product candidates, we are unable to estimate the exact amount of our working capital requirements. Our future funding requirements will depend on and could increase significantly as a result of many factors. To date, we have not generated any product revenue. We do not expect to generate any product revenue unless and until we obtain regulatory approval of and commercialize any of our product candidates or enter into collaborative agreements with third parties, and we do not know when, or if, either will occur. We expect to continue to incur significant losses for the foreseeable future, and we expect our losses to increase as we continue the development of, and seek regulatory approvals for, our product candidates, and begin to commercialize any approved products. We are subject to all of the risks typically related to the development of new product candidates, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. Moreover, we expect to continue incurring additional costs associated with operating as a public company. 76 -------------------------------------------------------------------------------- We have based these estimates on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. The timing and amount of our operating expenditures and capital requirements will depend on many factors, including:
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the scope, timing, rate of progress and costs of our drug discovery, preclinical development activities, laboratory testing and clinical trials for our product candidates;
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the number and scope of clinical programs we decide to pursue;
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the scope and costs of manufacturing development and commercial manufacturing activities;
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the extent to which we acquire or in-license other product candidates and technologies;
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the cost, timing and outcome of regulatory review of our product candidates;
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the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;
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our ability to establish and maintain collaborations on favorable terms, if at all;
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our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of our product candidates;
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the costs associated with being a public company; and
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the cost and timing associated with commercializing our product candidates, if they receive marketing approval.
A change in the outcome of any of these or other variables with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate. Furthermore, our operating plans may change in the future, and we will continue to require additional capital to meet operational needs and capital requirements associated with such operating plans. If we raise additional funds by issuing equity securities, our stockholders may experience dilution. Any future debt financing into which we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments and engage in certain merger, consolidation or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders. If we are unable to raise additional funds when needed, we may be required to delay, reduce, or terminate some or all of our development programs and clinical trials. We may also be required to sell or license rights to our product candidates in certain territories or indications to others that we would prefer to develop and commercialize ourselves. The significant uncertainties caused by the evolving effects of the COVID-19 pandemic may also negatively impact our operations and capital resources. We and our key clinical and manufacturing partners have been able to continue to advance our operations, and we continue to monitor the impact of COVID-19 on our ability to continue the development of, and seek regulatory approvals for, our product candidates, and begin to commercialize any approved products. This pandemic may ultimately have a material adverse effect on our liquidity and operating plans, although we are unable to make any prediction with certainty given the spread and rapidly changing nature of the pandemic and the evolving global actions taken to contain and treat the novel coronavirus.
Adequate additional funding may not be available to us on acceptable terms or at all. Our failure to raise capital as and when needed could have a negative impact on our financial condition and our ability to pursue our business strategies. See the section titled "Risk Factors" for additional risks associated with our substantial capital requirements.
Summary Statement of Cash Flows
The following table sets forth the primary sources and uses of cash for each of the periods presented below: Year Ended December 31, 2021 2020 (in thousands) Net cash (used in) provided by: Operating activities$ (182,270 ) $ (83,428 ) Investing activities (38,798 ) 104,834 Financing activities 8,182 717,377 Net increase (decrease) in cash, cash equivalents and restricted cash$ (212,886 ) $ 738,783 77
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Cash Flows from Operating Activities
Net cash used in operating activities was$182.3 million for the year endedDecember 31, 2021 . Cash used in operating activities was primarily driven by the increase in net loss during this period due to increased payroll and personnel expenses and manufacturing and clinical trial costs to support overall growth. Cash used in operating activities was also driven by changes in operating assets and liabilities.
Cash Flows from Investing Activities
Net cash used in investing activities was
Cash Flows from Financing Activities
Net cash provided by financing activities was
Contractual Obligations and Commitments
Operating Leases
Operating lease payments represent our commitment for future minimum rent made under non-cancelable leases for our corporate offices inPalo Alto, California , and office and laboratory space in Visp,Switzerland . The total future payments for our operating lease obligations as ofDecember 31, 2021 is$123.7 million , of which$7.3 million is due in the next twelve months.
Embedded Lease
Embedded lease payment represent our commitment for future minimum payment made under the manufacturing agreement withLonza Ltd. for the clinical and commercial supply of drug substance in a custom-built manufacturing facility. The total future payments relating to our embedded lease, including capital contribution payments, as ofDecember 31, 2021 is approximately189.5 million Swiss Francs , of which53.0 million Swiss Francs is expected to be due in the next twelve months. Manufacturing Agreements The Company has entered into service and equipment purchase agreements in the normal course of business with various providers, which can contain minimum commitments or other noncancelable obligations. As ofDecember 31, 2021 , the total amount of contractual obligations related to these manufacturing agreements that are subject to cancellation fees, including accrued amounts, was$69.5 million , of which$59.7 million is expected to be due in the next twelve months. For further information on our leases and manufacturing agreements, refer to Note 7 of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Clinical Agreements
The Company may incur potential contingent payments upon our achievement of clinical, regulatory and commercial milestones, as applicable. Due to the uncertainty of the achievement and timing of the events requiring payment under these agreements, the amount to be paid by us are not fixed or determinable at this time.
Critical Accounting Policies, Significant Judgments and Use of Estimates
Our consolidated financial statements have been prepared in accordance withU.S. generally accepted accounting principles, or GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported expenses incurred during the reporting periods. The impact of the ongoing COVID-19 pandemic continues to evolve. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management's judgments and estimates. 78 --------------------------------------------------------------------------------
Our accrued research and development costs are estimated based on the level of services performed, including the phase or completion of events, and contracted costs. Accrued clinical trial and related costs are estimated using data such as patient enrollment, clinical site activations or information provided by outside service providers regarding their actual costs incurred. Management determined accrual estimates through reports from and discussions with clinical personnel and outside service providers as to the progress of trials, or the services completed. The estimated costs of research and development provided, but not yet invoiced, are included in accrued liabilities and other current liabilities on the consolidated balance sheets. If the actual timing of the performance of services or the level of effort varies from the original estimates, we will adjust the accrual accordingly. Payments made to third parties under these arrangements in advance of the performance of the related services are recorded as prepaid expenses and other assets until the services are rendered.
Stock-Based Compensation Expense
We measure and recognize compensation expense for all stockbased awards made to employees, directors and nonemployees, based on estimated fair values of the awards on the grant date and recognized using the straightline method over the requisite service period. The fair value of options is estimated on the grant date using the BlackScholes option valuation model or Monte Carlo simulation model. The calculation of stockbased compensation expense requires that we make certain assumptions and judgments about a number of complex and subjective variables used in the valuation model, including the expected term, expected volatility of the underlying common stock and riskfree interest rate. Our stock-based awards are subject to either service, performance-based or market-based vesting conditions. We evaluate whether achievement of the performance conditions is probable and record expense over the appropriate service period based on this assessment.
Changes in these assumptions can materially affect the fair value and ultimately how much stock-based compensation expense is recognized. These inputs are subjective and generally require significant analysis and judgment to develop.
Income Taxes
We provide for income taxes under the asset and liability method. Current income tax expense or benefit represents the amount of income taxes expected to be payable or refundable for the current year. Deferred income tax assets and liabilities are determined based on differences between the financial statement reporting and tax bases of assets and liabilities and net operating loss, or NOLs, and credit carryforwards, and are measured using the enacted tax rates and laws that will be in effect when such items are expected to reverse. Deferred income tax assets are reduced, as necessary, by a valuation allowance when management determines it is more likely than not that some or all of the tax benefits will not be realized. We assess all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position's sustainability and is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and we will determine whether (1) the factors underlying the sustainability assertion have changed and (2) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit might change as new information becomes available. Our policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits. As ofDecember 31, 2021 and 2020, none of the unrecognized tax benefits would affect income tax expense with consideration of our valuation allowance. We do not expect that our uncertain tax positions will materially change in the next twelve months. NOLs and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service ("IRS") and may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50% as defined under Sections 382 and 383 in the Internal Revenue Code, which could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on our value immediately prior to the ownership change. We have completed a Section 382 study throughDecember 31, 2020 which concluded no such ownership change had occurred throughDecember 31 . 2020. Subsequent ownership changes since the most recent study may further affect the limitation in future years. 79 --------------------------------------------------------------------------------
Recent Accounting Pronouncements
A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is discussed under Note 2 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. 80
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