UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
(Address of principal executive offices) |
(Zip Code) |
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of November 1, 2022, the registrant had
Table of Contents
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PART I. |
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Item 1. |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Item 4. |
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PART II. |
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Item 1. |
41 |
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Item 1A. |
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Item 2. |
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Item 3. |
86 |
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Item 4. |
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Item 5. |
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Item 6. |
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FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, business strategy, product candidates, clinical development plans and expectations, including, without limitation, planned commencements of clinical studies, patient enrollment expectations, expected release of clinical trial results and data, and expected completion dates, potential regulatory submissions, prospective products, product approvals, research and development costs, timing and likelihood of success, and plans and objectives of management for future operations and results, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including the risks, uncertainties and assumptions described under the sections in this Quarterly Report titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These forward-looking statements are subject to numerous risks, including, without limitation, the following:
2
Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur, and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report will prove to be accurate. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances, or otherwise.
You should read this Quarterly Report and the documents that we reference in this Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
3
RISK FACTORS SUMMARY
Our business is subject to numerous risks and uncertainties, including those described in Part II Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q. You should carefully consider these risks and uncertainties when investing in our common stock. The principal risks and uncertainties affecting our business include the following:
4
5
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Frequency Therapeutics, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
(unaudited)
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September 30, 2022 |
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December 31, 2021 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Short-term marketable securities |
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Prepaid expenses and other current assets |
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Total current assets |
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Long-term marketable securities |
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Property and equipment, net |
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Right of use assets |
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Restricted cash |
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Other long-term assets |
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Total assets |
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$ |
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$ |
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses |
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Lease liabilities |
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Other current liability |
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Term loan, current portion |
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Total current liabilities |
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Lease liabilities, net of current portion |
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Term loan, net of current portion |
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Other long-term liabilities |
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Total liabilities |
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Stockholders’ equity: |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive income |
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( |
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( |
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Accumulated deficit |
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( |
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( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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See accompanying notes.
6
Frequency Therapeutics, Inc.
Consolidated Statements of Operations
(in thousands, except share and per share amounts)
(unaudited)
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Three Months Ended |
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Nine Months Ended |
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2022 |
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2021 |
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2022 |
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2021 |
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Revenue |
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$ |
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$ |
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$ |
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$ |
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Operating expenses: |
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Research and development |
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General and administrative |
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Total operating expenses |
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Loss from operations |
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( |
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( |
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( |
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Interest income |
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Interest expense |
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( |
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( |
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( |
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( |
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Realized gain (loss) on investments |
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( |
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( |
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Foreign exchange (loss) gain |
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( |
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( |
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( |
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Other income (expense), net |
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( |
) |
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( |
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Loss before income taxes |
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( |
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( |
) |
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( |
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( |
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Income tax benefit (provision) |
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( |
) |
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( |
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Net loss |
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$ |
( |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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Net loss per share attributable to common stockholders-basic and diluted |
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$ |
( |
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$ |
( |
) |
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$ |
( |
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$ |
( |
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Weighted-average shares of common stock outstanding-basic and diluted |
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See accompanying notes.
7
Frequency Therapeutics, Inc.
Consolidated Statements of Comprehensive Loss
(in thousands)
(unaudited)
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Three Months Ended |
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Nine Months Ended |
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2022 |
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2021 |
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2022 |
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2021 |
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Net loss |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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Other comprehensive gain (loss): |
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Unrealized gain (loss) on marketable securities |
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( |
) |
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( |
) |
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( |
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Total other comprehensive gain (loss) |
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( |
) |
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( |
) |
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( |
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Comprehensive loss |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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$ |
( |
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See accompanying notes.
8
Frequency Therapeutics, Inc.
Consolidated Statements Stockholders’ Equity
(in thousands, except share and per share amounts)
(unaudited)
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Common |
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Common |
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Additional |
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Accumulated other |
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Accumulated |
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Total stockholders’ |
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Balance, June 30, 2021 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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Stock-based compensation expense |
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- |
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- |
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- |
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- |
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Purchase of common stock under Employee Stock Purchase Plan |
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- |
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- |
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Issuance of common stock, net |
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- |
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- |
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- |
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Forfeiture of restricted stock |
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( |
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- |
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- |
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- |
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- |
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- |
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Other comprehensive loss |
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- |
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- |
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- |
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( |
) |
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- |
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( |
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Net loss |
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- |
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- |
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- |
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- |
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( |
) |
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( |
) |
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Balance, September 30, 2021 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
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Balance, June 30, 2022 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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Stock-based compensation expense |
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- |
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- |
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- |
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- |
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Purchase of common stock under Employee Stock Purchase Plan |
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- |
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- |
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- |
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Issuance of common stock, net |
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- |
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( |
) |
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- |
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- |
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( |
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Issuance of common stock pursuant to restricted stock units |
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- |
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- |
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- |
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- |
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- |
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Other comprehensive gain |
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- |
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- |
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- |
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- |
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Net loss |
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- |
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- |
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- |
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- |
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( |
) |
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( |
) |
Balance, September 30, 2022 |
|
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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Common |
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Common |
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Additional |
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Accumulated other |
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Accumulated |
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Total stockholders’ |
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Balance, December 31, 2020 |
|
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
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|||||
Stock-based compensation expense |
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- |
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- |
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- |
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- |
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|||
Purchase of common stock under Employee Stock Purchase Plan |
|
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- |
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- |
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||||
Issuance of common stock, net |
|
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- |
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- |
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- |
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|||
Forfeiture of restricted stock |
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( |
) |
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- |
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- |
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- |
|
|
|
- |
|
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- |
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Other comprehensive loss |
|
|
- |
|
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|
- |
|
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|
- |
|
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( |
) |
|
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- |
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( |
) |
Net loss |
|
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- |
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- |
|
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- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Balance, September 30, 2021 |
|
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( |
) |
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|||||
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||||||
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||||||
Balance, December 31, 2021 |
|
|
|
|
$ |
|
|
$ |
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|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
Stock-based compensation expense |
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|
- |
|
|
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- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
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||
Purchase of common stock under Employee Stock Purchase Plan |
|
|
|
|
|
- |
|
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|
|
|
|
- |
|
|
|
- |
|
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|
|||
Issuance of common stock, net |
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- |
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- |
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- |
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|
|||
Issuance of common stock pursuant to restricted stock units |
|
|
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
Other comprehensive loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |