TALIS BIOMEDICAL CORPORATION The following discussion and analysis of our financial condition and results of operations should be read together with our audited financial statements and related notes included elsewhere in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the "Risk Factors" section of this Annual Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. You should carefully read the "Risk Factors" section of this Annual Report to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section entitled "Special Note Regarding Forward-Looking Statements."
Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is designed to provide material information relevant to an assessment of our financial condition and results of operations, including an evaluation of the amounts and certainty of cash flows from operations and from outside sources. This section is designed to focus on material events and uncertainties known to management that are reasonably likely to cause reported financial information not to be necessarily indicative of future operating results or of future financial condition. This includes descriptions and amounts of matters that have had a material impact on reported operations, as well as matters that are reasonably likely based on management's assessment to have a material impact on future operations.
Overview
Talis aims to transform diagnostic testing by developing and commercializing
innovative products that are designed to enable accurate, reliable, low cost and
rapid molecular testing for infectious diseases and other conditions at the
point of care. While timely diagnosis of infectious diseases is critically
important to enable effective treatment, testing is primarily performed in
centralized laboratories, which requires samples to be shipped for processing,
delaying the return of results by days. Point-of-care testing solves this
problem by delivering the timely information necessary for clinical care. We are
developing the Talis One system, a sample-to-answer, cloud-enabled molecular
diagnostic system that could be deployed to a variety of testing settings in
Recent surveys of women's and sexual health providers that we have conducted confirm the continued and strong interest in adoption of point-of-care systems, such as the Talis One system. We believe that the Talis One system is well positioned to meet the growing demand in both traditional and non-traditional care settings. Although there are several commercially available point-of-care systems, we believe that few, if any, sufficiently meet the needs of healthcare providers to drive broad adoption of, and transition to, point-of-care testing from central lab testing for a broad range of infectious diseases. We believe that the ideal point-of-care technology for diagnosing infectious diseases would not only be highly accurate and rapid, but would also be easy to use, low cost, cloud-compatible and enable multiplexing to detect multiple pathogens at the same time.
We are developing Talis One tests to address some of the most critical
infectious diseases in women's and sexual health, initially with a panel for
Chlamydia trachomatis, Neisseria gonorrhoeae, and Trichomonas vaginalis
(CT/NG/TV), as well as a respiratory panel consisting of tests for influenza A,
influenza B and COVID-19 (
Our products will require marketing authorization from the
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test under an EUA. After assessing current market dynamics and the financial
environment, we suspended commercial investment in the stand-alone Talis One
COVID-19 test, as we believe the investments required to commercialize in
We have invested in automated cartridge manufacturing lines which are currently located at our contract manufacturers' sites and are operated by our contract manufacturing partners. By the end of 2022, we had made improvements in our manufacturing process and demonstrated with our stand-alone COVID-19 test that these high-speed assembly lines can consistently produce cartridges that meet industry standards. In addition, we have resumed investigational use only (IUO) system evaluations of the Talis One system using our COVID-19 test, the results of which have confirmed acceptable cartridge performance when used by third parties, accuracy and validity rates consistent with our internal quality control testing, and positive feedback on the user experience. We will continue to (i) focus on flexible manufacturing to support our research and development functions, clinical trials and to gain internal expertise of our manufacturing process and capabilities and (ii) refine and improve high throughput manufacturing lines to ensure we maintain the ability to manufacture at scale with acceptable cost of goods sold for commercialization.
In addition to the automated cartridge manufacturing lines, we have also established internal manufacturing lines that we expect will accelerate product development and support the product lifecycle. These lines allow us to (i) make process improvements and cost reductions in-house before transferring production back to our contract manufacturing partners, (ii) innovate more quickly to support internal test development and (iii) support cartridge inventory levels pre-commercialization. In order to drive further efficiency and cost reduction in the manufacturing process, we have begun restructuring our relationships with our contract manufacturing partners.
We outsource a substantial portion of our manufacturing. Design work, prototyping and pilot manufacturing are performed in-house before outsourcing to third-party contract manufacturers. Our outsourced production strategy is intended to drive rapid scalability. Certain of our suppliers of components and materials are single source suppliers. During 2022, we had two suppliers provide more than 10% of our materials and equipment purchases. To support a commercial launch, we have invested in automated cartridge manufacturing production lines for our Talis One cartridges. Those assets deemed to have an alternative future use have been capitalized as property and equipment while those assets determined to not have an alternative future use have been expensed.
Since our inception in 2013, we have devoted substantially all our efforts to
research and development activities, manufacturing capabilities, raising
capital, building our intellectual property portfolio, providing general and
administrative support for these operations, and providing selling support as
the need has arisen. We have principally financed our operations through the
issuance and sale of shares of our convertible preferred stock to outside
investors in private equity financings as well as the issuance of convertible
promissory notes and receipts from government grants. Prior to our initial
public offering, we received
We have incurred recurring losses since our inception, including net losses of
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continue the research and development of our system and tests for multiple diseases;
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initiate clinical trials for, or additional pre-clinical development of, our Talis One system;
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further develop and refine the manufacturing processes for our Talis One system and potentially the design of our Talis One system;
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•
change or add manufacturers or suppliers of materials used for our Talis One system;
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seek marketing authorizations;
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seek to identify and validate diagnostic tests for additional disease states;
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obtain, maintain, protect and enforce our intellectual property portfolio;
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re-establish and deploy a sales force;
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seek to attract and retain new and existing skilled personnel;
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create additional infrastructure to support our operations as a public company and incur increased legal, accounting, investor relations and other expenses; and
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experience delays or encounter issues with any of the above.
As of
In addition, if we obtain marketing authorization for our system, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. As a result, we will need substantial additional funding to support our operating activities. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of development, manufacturing and commercialization activities. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operating activities through one or a combination of grant revenue, equity or debt financings, or collaborations or partnerships with other companies. Adequate funding may not be available to us on acceptable terms, or at all.
If we are unable to obtain funding, we will be forced to delay, reduce or eliminate some or all of our research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect our business prospects, or we may be unable to continue operations.
In March and
COVID-19 pandemic
The global outbreak of COVID-19 across many countries around the globe,
including
Certain states and cities have taken and may re-institute measures to prevent or slow the spread of COVID-19, and its variants including by instituting quarantines, vaccination mandates, and testing requirements restrictions on travel, "stay-at-home" rules, restrictions on types of business that may continue to operate and/or restrictions on the types of construction projects that may continue. While vaccine availability and uptake has increased, the longer-term macro-economic effects on global supply chains, inflation, labor shortages and wage increases continue to impact many industries.
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The COVID-19 pandemic presents material uncertainty and risk with respect to our financial condition and development efforts, including:
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interruption of or delays in receiving products and supplies from the third parties we rely on to, among other things, manufacture components of our instruments, due to staffing shortages, production slowdowns or stoppages and disruptions in delivery systems, which may impair our ability to sell our products and consumables;
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limitations on our business operations by the local, state, or federal government that could impact our ability to sell or deliver our instruments and consumables;
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delays in customers' purchasing decisions and negotiations with customers and potential customers;
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business disruptions caused by workplace, laboratory and office closures, travel limitations, cyber security and data accessibility limits, or communication or mass transit disruptions; and
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limitations on employee resources that would otherwise be focused on the conduct of our activities, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people.
Components of our results of operations
Revenue
To date, we have not generated any revenue from sales of our Talis One system. We expect to generate revenue in the future from product sales of our Talis One instruments and single use cartridges, following regulatory approval, but there can be no assurance that we will be successful in our development and commercialization efforts. Our business model is focused on driving the adoption of the Talis One system. Customers would gain access to our instrument via a direct sales model or a reagent rental model. Under direct system sales, our customers would directly purchase our Talis One instrument and make subsequent independent purchases of our cartridges. This would include, during our early customer engagements, a fully paid workflow license to practice the desired workflow(s) in a specific field of use. In addition, we would also offer system support to the extent customers require further system and workflow optimization following system implementation. When we place a system under a reagent rental agreement, we plan to install equipment in the customer's facility without a fee and the customer agrees to purchase our cartridges at a stated price over the term of the reagent rental agreement. Some of these agreements could include minimum purchase commitments. Under a reagent rental model, we plan to retain title to the equipment and such title is transferred to the customer at the conclusion of the initial arrangement. The cost of the instrument under the agreement is expected to be recovered in the fees charged for consumables, to the extent sold, over the term of the agreement.
We cannot predict when, or to what extent we will generate revenue from the
commercialization and sale of our system. Although we obtained an EUA for our
stand-alone Talis One COVID-19 test and the CE Mark authorization under the
IVDD, the EUA was revoked in
Product revenue, net
In
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606, Revenue from Contracts with Customers. Our product revenue is recognized upon the transfer of control of our test kits to the customer. This program has concluded at the end of 2022.
Grant revenue
For the twelve months ended
The NIH Contract for the RADx initiative expired on
Under the
These grants are not in the scope of the contracts with customers accounting guidance as the government entities and/or government-sponsored entities are not customers under the agreements.
Operating expenses
Cost of product sold
We began to recognize costs of product sold in
Research and development expenses
Research and development expenses consist primarily of internal and external costs incurred for our research activities, the development of our system, investment in manufacturing capabilities as well as costs incurred pursuant to our government grants and include:
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salaries, benefits and other related costs, including stock-based compensation expense, for personnel engaged in research and development functions;
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the cost of laboratory supplies and developing and manufacturing of our system;
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contract services, other outside costs and costs to develop our technology capabilities;
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facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs;
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cost of outside consultants, including their fees and related travel expenses, engaged in research and development functions; and
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expenses related to regulatory affairs.
Until future commercialization is considered probable and the future economic benefit is expected to be realized, we do not capitalize pre-launch inventory costs and costs of property and equipment prior to completion of marketing authorization unless the regulatory review process has progressed to a point that objective and persuasive evidence of regulatory approval is sufficiently probable, and future economic benefit can be asserted. We record pre-launch inventory costs to research and development expenses, or if used in marketing evaluations, record such cost to selling, general and administrative expense. We record property and equipment costs to research and development expenses when the asset does not have an alternative future use. A number of factors are taken into consideration, based on management's judgment, including the current status in the regulatory approval process, potential impediments to the approval process, anticipated research and development initiatives and risk of technical feasibility, viability of commercialization and marketplace trends.
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Research and development activities are central to our business model. We
previously focused our research and development efforts on the stand-alone Talis
One COVID-19 test but have refocused on the development of tests for women's and
sexual health infections, including a panel for STIs and other infections, such
as HSV, the
Selling, general and administrative expenses
Selling, general and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation and bonus, for personnel in our executive, finance, sales and product management, commercial operations, human resources and legal functions. Selling, general and administrative expenses also include professional fees for legal, auditing, tax and consulting services, insurance fees, information technology, and facility-related expenses, which include direct depreciation expenses and allocated expenses for rent and maintenance of facilities and other operating expenses. Selling, general and administrative expenses include impairment expense for the excess of the carrying value of our right-of-use assets over their estimated fair value. Estimated fair value is determined based upon an estimate of discounted future cash flows or other appropriate measures of estimated fair value.
Other income (expense)
Other income (expense), net consists primarily of interest income on cash deposits held at financial institutions, gains and losses on holdings invested in money market funds, and unrealized and realized foreign exchange gains and losses.
Results of operations
Comparison for the twelve months ended
The following table summarizes our results of operations (in thousands):
Twelve Months Ended
December 31,
(in thousands) 2022 2021 Change
Revenue
Grant revenue $ 1,160 $ 8,193 $ (7,033 )
Product revenue, net 3,652 - 3,652
Total revenue, net $ 4,812 $ 8,193 $ (3,381 )
Operating expenses:
Cost of goods sold 8,391 - 8,391
Research and development 70,831 157,591 (86,760 )Selling, general and administrative 40,729 42,418 (1,689 ) Total operating expenses
$ 119,951 $ 200,009 $ (80,058 ) Loss from operations (115,139 ) (191,816 ) 76,677 Other (expense) income, net 2,127 (220 ) 2,347
Net loss and comprehensive loss
Grant revenue
During the twelve months ended
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Product revenue, net, cost of product sold
We began to generate sales during
Research and development expenses
Research and development expenses for the twelve months ended
Selling, general and administrative expenses
Selling, general and administrative expenses were
Liquidity and capital resources
Sources of liquidity
We have funded our operations primarily through public equity offerings, private placements of equity securities and through government grants.
On
As of
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In March and
Nasdaq Deficiency Notice
On
On
If, at any time during this second 180-day compliance period, the closing bid
price of the common stock is at least
We intend to actively monitor the bid price of our common stock and will consider available options to regain compliance with the Nasdaq listing requirements, including a reverse stock split.
Future funding requirements
We do not have any commercial-scale manufacturing facilities and expect to continue to rely on third parties to manufacture the Talis One system and related test cartridges. We have entered into, and expect to enter into additional, agreements with contract manufacturers to support our manufacturing scale-up. We have engaged a third-party logistics provider to manage the movement of materials between suppliers and contract manufacturers and for finished goods warehousing.
We do not expect to generate any meaningful revenue unless and until we obtain regulatory approval of and commercialize our Talis One system. Until we can generate a sufficient amount of revenue from the commercialization of the Talis One system, if ever, we expect to finance our future cash needs through one or a combination of nondilutive corporate development and licensing opportunities, grant revenue, equity or debt financings, or collaborations or partnerships with other companies.
To date, our primary uses of cash have been to fund operating expenses, primarily research and development expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued expenses and operating lease costs. We currently have no other ongoing material financing commitments, such as lines of credit or guarantees. We expect to incur significant research and development and commercialization expenses related to program sales, marketing, manufacturing and distribution to the extent that such sales, marketing and distribution are not the responsibility of any future collaborators. We expect to incur additional costs associated with operating as a public company. Accordingly, we may choose to obtain additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.
Since our inception, we have incurred significant losses and negative cash flows
from operations. We have an accumulated deficit of
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in the future as we conduct and expand our research and development,
manufacturing and commercialization activities. Based on our planned operations,
we expect that our unrestricted cash and cash equivalents of
We have based our projections of operating capital requirements on assumptions that may prove to be incorrect, and we may use all our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of the Talis One system, we are unable to estimate the exact amount of our operating capital requirements. Our future capital requirements will depend on many factors, including:
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our ability to receive, and the timing of receipt of future regulatory approval for our products;
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the number and development requirements of tests for other diseases or disease states that we may pursue;
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our ability to manufacture the Talis One system at scale to meet eventual market demand, if any;
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the amount of capital, and related timing of payments, required to build sufficient inventory of our Talis One system and test cartridges in advance of and during commercial launch;
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the costs and timing of future commercialization activities, including manufacturing, marketing, sales and distribution, for the Talis One system;
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limitations of, or interruptions in, the quality or quantity of materials from our third-party suppliers;
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our ability to implement an effective manufacturing, marketing and commercialization operation;
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the scope, progress, results and costs of our ongoing and planned operations;
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the costs associated with expanding our operations;
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intervention, interruptions or recalls by government or regulatory agencies;
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enhancements and disruptive advances in the diagnostic testing industry;
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our estimates and forecasts of the market size addressable by our Talis One system;
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security breaches, data losses or other disruptions affecting our information systems;
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the regulatory and political landscape upon any future commercial launch of the Talis One system;
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the revenue, if any, received from commercial sales of our products, if and when approved, including additional working capital requirements if we pursue a reagent rental model for our Talis One instrument, or from commercial sales of third-party products, including the Antigen Tests;
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the costs to defend any shareholder suits or other third-party litigation;
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our ability to establish strategic collaborations; and
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the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims.
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Cash flows
The following table summarizes our cash flows for each of the periods presented
(in thousands):
Year Ended December 31,
2022 2021
(in thousands)
Net cash used in operating activities $ (100,136 ) $ (171,384 )
Net cash used in investing activities (1,615 ) (2,866 )
Net cash provided by financing activities 406 234,429
Net (decrease) increase in cash, cash equivalents and
restricted cash $ (101,345 ) $ 60,179
Operating activities
During the year ended
During the year ended
Investing activities
During the years ended
Financing activities
During the year ended
During the year ended
Contractual obligations
Leases
See Note 6. Commitments and contingencies, to our audited financial statements
included in Item 8 of this Annual Report for a summary of our operating lease
commitments as of
In
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Purchase commitments
Currently, we have no material long-term purchase commitments. We have entered into contracts in the normal course of business with certain contract manufacturing organizations and other third parties for manufacturing services.
Critical accounting policies and estimates
This MD&A is based on our financial statements, which have been prepared in
accordance with generally accepted accounting principles in
While our significant accounting policies are described in greater detail in Note 2 to our financial statements appearing within Item 8 of this Annual Report, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.
Inventory
We value our inventory at the lower of cost or net realizable value and determines the cost of inventory using the first-in, first-out method. Lower of cost or net realizable value is evaluated by considering obsolescence, excessive levels of inventory, deterioration and other factors.
In order to assess the ultimate realization of inventories, we are required to make judgments as to future demand requirements compared to current or committed inventory levels. We periodically review our inventories for shelf life, excess or obsolescence and writes-down obsolete or otherwise unmarketable inventory to its estimated net realizable value. If the actual net realizable value is less than the carrying value, or if it is determined that inventory utilization will further diminish based on estimates of demand, additional inventory write-downs may be required. Inventory write-offs are recorded in cost of product sold and a new lower-cost basis for the inventory is established. Excess and obsolete inventory is primarily based on estimated forecasted sales, usage levels, and expiration dates.
Research and development expenses
Capitalizing pre-launch inventory costs will not occur prior to obtaining an EUA or other FDA marketing authorization unless the regulatory review process has progressed to a point that objective and persuasive evidence of regulatory approval is sufficiently probable, commercialization is considered probable and future economic benefit can be asserted. We have incurred significant costs related to the scale-up of manufacturing activities for commercialization. We record such costs as research and development expenses, or if used in marketing evaluations costs are recorded as selling, general and administrative expenses. A number of factors are taken into consideration, based on our management's judgment, including the current status in the regulatory approval process, potential impediments to the approval process, anticipated research and development initiatives and risk of technical feasibility, viability of commercialization and marketplace trends.
All materials, equipment, and external consulting costs associated with developing aspects of the production line that do not have an alternative future use are expensed as research and development costs until regulatory approval or clearance is obtained, and commercialization is probable. Materials, equipment, and external consulting costs associated with developing aspects of the production line that are deemed to have an alternative future use are capitalized as property and equipment, assessed for impairment and depreciated over their related useful lives. These research and development costs, including expenditures for property and equipment with no alternative future use, are classified as operating cash outflows within our statements of cash flows.
Stock-based compensation
We measure stock-based compensation expense for stock options and restricted stock units (RSUs) granted to our employees and directors on the date of grant and recognize the corresponding compensation expense of those awards over the requisite service period, which is generally the vesting period of the respective award, on a
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straight-line basis. We also recognize stock-based compensation expense associated with our employee stock purchase plan (ESPP) based on the grant date fair value required under authoritative guidance. Forfeitures are recorded as they occur.
From time to time, we may grant stock options to employees, including executive officers, that vest upon the satisfaction of service-based or performance-based vesting conditions. We recognize stock-based compensation over the requisite service period using the accelerated attribution method for awards with a performance condition if the performance condition is deemed probable of being met.
We estimate the fair value of stock options granted to our employees and directors on the grant date, and the resulting stock-based compensation expense, using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires the use of subjective assumptions which determine the fair value of stock option awards. These assumptions include:
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Expected term. The expected term of options represents the period of time that options are expected to be outstanding. Our historical stock option exercise experience does not provide a reasonable basis upon which to estimate an expected term due to lack of sufficient data. We estimate the expected term by using the simplified method, which calculates the expected term as the average of the time-to-vesting and the contractual life of the options.
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Expected volatility. Prior to our IPO, there has been no public market for our common stock, and as a result we do not have any trading history of our common stock, expected volatility is estimated based on the average volatility for comparable publicly traded diagnostic companies over a period equal to the expected term of the stock option grants. The comparable companies are chosen based on their similar size, stage in the life cycle or area of specialty.
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Risk-free interest rate. The risk-free interest rate is based on the
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Expected dividend yield. We have never paid dividends on our common stock and have no plans to pay dividends on our common stock. Therefore, we use an expected dividend yield of zero.
Following the closing of our IPO, we determine the fair market value of our common stock based on its closing price as reported on the date of grant on the primary stock exchange on which our common stock is traded.
Prior to our IPO, there has been no public market for our common stock. As such,
the estimated fair value of the common stock underlying our stock options was
determined by our board of directors, with input from management, considering
our most recently available third-party valuations of common stock and our board
of directors' assessment of additional objective and subjective factors that it
believed were relevant, and factors that may have changed from the date of the
most recent valuation through the date of the grant, which intended all options
granted to be exercisable at a price per share not less than the per share fair
value of our common stock underlying those options on the date of grant. We
believe that our board of directors has the relevant experience and expertise to
determine the fair value of our common stock. Prior to our IPO, given the
absence of a public trading market for our common stock, the valuations of our
common stock were determined in accordance with the guidelines outlined in the
The assumptions we used in the pre-IPO valuation model were based on future expectations combined with management judgment. In the absence of a public trading market, our board of directors with input from management exercised significant judgment and considered numerous objective and subjective factors to determine the fair value of our common stock as of the date of each option grant, including the following factors:
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contemporaneous independent valuations performed at periodic intervals by an independent third-party valuation firm;
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the prices at which we sold shares of preferred stock and the superior rights and preferences of the preferred stock relative to our common stock at the time of each grant;
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•
the progress of our research and development programs, including the status and results of preclinical studies for our system;
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our stage of development and commercialization and our business strategy;
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external market conditions affecting the diagnostics industry and trends within the diagnostics industry;
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the lack of an active public market for our common stock; and
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the likelihood of achieving a liquidity event, such as an initial public offering or sale of our company in light of prevailing market conditions.
Leases
Lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the remaining lease term. The present value of future lease payments are discounted using the interest rate implicit in lease contracts if that rate is readily determinable; otherwise we utilize our incremental borrowing rate (IBR), which reflects the fixed rate at which we could borrow on a collateralized basis over a similar term, the amount of the lease payments in a similar economic environment. After lease commencement and the establishment of a right-to-use asset and operating lease liability, lease expense is recorded on a straight-line basis over the lease term.
Recoverability of long-lived assets
We review the carrying amount of our long-lived assets, including property and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of an asset or an asset group may not be fully recoverable. If indicators of impairment exist, an impairment loss would be recognized when the estimated undiscounted future cash flows expected to result from the use of the asset or asset group and its eventual disposition are less than its carrying amount. The impairment charge is determined based upon the excess of the carrying value of the asset over its estimated fair value, reducing the carrying value of the related asset to no less than its fair value. Estimated fair value is determined based upon an estimate of discounted future cash flows or other appropriate measures of estimated fair value. Estimates in our fair value calculation may include estimates made for discount rate, rental rate and escalations or downtime periods associated with our right-of-use assets as well as others. A 5% change in the estimated rental rate, escalations or downtime periods would not materially impact the fair value of the right-of-use assets. In addition, a 200 basis point change in the selected discount rate would not materially impact the fair value of the right-of-use assets. For purposes of recognition of impairment for long-lived assets, we group assets and liabilities at the lowest level for which cash flows are separately identifiable.
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 2 to our audited financial statements included within Item 8 of this Annual Report.
Recently adopted accounting standards
In
In
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adopted ASU 2016-13 on
Emerging growth company status
In
In addition, as an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:
•
reduced disclosure about the compensation paid to our executive officers;
•
not being required to submit to our stockholders' advisory votes on executive compensation or golden parachute arrangements;
•
an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act; and
•
an exemption from new or revised financial accounting standards until they would
apply to private companies and from compliance with any new requirements adopted
by the
We may take advantage of these exemptions for up to the last day of the fiscal
year ending after the fifth anniversary of our initial public offering, which is
We are also a "smaller reporting company" meaning that the market value of our
stock held by non-affiliates is less than
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