August 8, 2022 4:34 PM EDT

News and research before you hear about it on CNBC and others. Claim your 1-week free trial to StreetInsider Premium here.

For the quarterly period ended June 30, 2022
For the transition period from _______ to _______
Commission File Number: 001-37798
Selecta Biosciences, Inc.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction
of incorporation or organization)
(I.R.S. Employer Identification No.)
65 Grove Street, Watertown, MA
(Address of principal executive offices)
(Zip Code)
(617) 923-1400
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.0001 par value per shareSELBThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerýSmaller reporting companyý
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No ý
As of August 2, 2022, the registrant had 152,713,211 shares of common stock, par value $0.0001 per share, outstanding.

Item 1. 
Item 2.
Item 3.
Item 4.
Item 1. 
Item 1A. 
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.


This Quarterly Report on Form 10-Q, or the 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, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. 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, prospective products, product approvals, research and development costs, timing and likelihood of success, the plans and objectives of management for future operations and future results of anticipated products, the impact of the COVID-19 pandemic on our business and operations and our future financial results, and the period over which we estimate our existing cash and cash equivalents will be sufficient to fund our future operating expenses and capital expenditure requirements 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 factors described under the sections in this Quarterly Report titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as the following:
our status as a development-stage company and our expectation to incur losses in the future;
our future capital needs and our need to raise additional funds;
our ability to build a pipeline of product candidates and develop and commercialize such pipeline;
our unproven approach to therapeutic intervention;
our ability to enroll patients in clinical trials, timely and successfully complete those trials and receive necessary regulatory approvals;
our ability to access manufacturing facilities and to receive or manufacture sufficient quantities of our product candidates;
our ability to maintain our existing or future collaborations or licenses;
the continuing impact of the COVID-19 pandemic on our operations, the continuity of our business, including our preclinical studies and clinical trials, and general economic conditions;
our ability to protect and enforce our intellectual property rights;
federal, state, and foreign regulatory requirements, including FDA regulation of our product candidates;
our ability to obtain and retain key executives and attract and retain qualified personnel;
developments relating to our competitors and our industry, including the impact of government regulation; and
our ability to successfully manage our growth.
Moreover, we operate in an evolving environment. New risks and uncertainties may emerge from time to time, and it is not possible for management to predict all risk and uncertainties.
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. 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.

Item 1. Financial Statements (unaudited)

Selecta Biosciences, Inc. and Subsidiaries
Consolidated Balance Sheets
(Amounts in thousands, except share data and par value)

 June 30,December 31,
Current assets:  
Cash and cash equivalents$138,057 $114,057 
Marketable securities3,999 13,998 
Accounts receivable23,994 9,914 
Prepaid expenses and other current assets6,522 6,474 
Total current assets172,572 144,443 
Non-current assets:
Property and equipment, net2,833 2,142 
Right-of-use asset, net9,238 9,829 
Long-term restricted cash1,379 1,379 
Investments2,000 2,000 
Other assets46 90 
Total assets$188,068 $159,883 
Liabilities and stockholders’ equity  
Current liabilities:  
Accounts payable$693 $224 
Accrued expenses12,366 10,533 
Loan payable3,285 5,961 
Lease liability1,125 1,049 
Income taxes payable320 601 
Deferred revenue15,974 53,883 
Total current liabilities33,763 72,251 
Non-current liabilities:
Loan payable, net of current portion22,634 19,673 
Lease liability8,018 8,598 
Deferred revenue7,113 11,417 
Warrant liabilities26,934 25,423 
Total liabilities98,462 137,362 
Commitments and contingencies (Note 17)
Stockholders’ equity:  
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding as of June 30, 2022 and December 31, 2021
Common stock, $0.0001 par value; 350,000,000 shares authorized; 152,713,211 and 123,622,965 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively
15 12 
Additional paid-in capital487,008 457,391 
Accumulated deficit(392,937)(430,316)
Accumulated other comprehensive loss(4,480)(4,566)
Total stockholders’ equity89,606 22,521 
Total liabilities and stockholders’ equity$188,068 $159,883 

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

Selecta Biosciences, Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Loss)
(Amounts in thousands, except share and per share data)

 Three Months Ended
June 30,
Six Months Ended
June 30,
Collaboration and license revenue$39,273 $19,663 $73,272 $30,713 
Operating expenses:
Research and development19,182 14,463 36,871 27,467 
General and administrative6,231 4,748 11,768 9,952 
Total operating expenses25,413 19,211 48,639 37,419 
Operating income (loss)13,860 452 24,633 (6,706)
Investment income207 12 222 24 
Foreign currency transaction, net(104)(14)(76)(7)
Interest expense(715)(711)(1,422)(1,422)
Change in fair value of warrant liabilities(4,647)4,820 13,868 (11,927)
Other income, net 6 154 6 
Net income (loss)$8,601 $4,565 $37,379 $(20,032)
Other comprehensive income (loss):
Foreign currency translation adjustment118 12 86 6 
Unrealized gain on marketable securities 1   
Total comprehensive income (loss)$8,719 $4,578 $37,465 $(20,026)
Net income (loss) per share:
Basic$0.06 $0.04 $0.27 $(0.18)
Diluted$0.06 $0.00 $0.17 $(0.18)
Weighted average common shares outstanding:
Basic148,505,729 113,524,110 136,436,316 112,140,815 
Diluted148,505,729 121,177,998 136,966,312 112,140,815 

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

Selecta Biosciences, Inc. and Subsidiaries
Consolidated Statements of Changes in Stockholders’ Equity
(Amounts in thousands, except share data)

   Additional other
 Common stockpaid-inAccumulatedcomprehensiveStockholders’
Balance at December 31, 2021123,622,965 $12 $457,391 $(430,316)$(4,566)$22,521 
Issuance of common stock under Employee Stock Purchase Plan81,057 — 127 — — 127 
Issuance of common stock upon exercise of options11,262 — 21 — — 21 
Issuance of vested restricted stock units89,142 — — — — — 
Issuance of common stock through at-the-market offering, net576,418 — 1,675 — — 1,675 
Other financing fees— — (79)— — (79)
Stock-based compensation expense— — 2,753 — — 2,753 
Currency translation adjustment— — — — (32)(32)
Net income— — — 28,778 — 28,778 
Balance at March 31, 2022124,380,844 12 461,888 (401,538)(4,598)55,764 
Issuance of vested restricted stock units10,938 — — — —  
Issuance of common stock and common warrants27,428,572 3 21,477 — — 21,480 
Issuance of common stock, license agreement892,857 — 1,000 — — 1,000 
Other financing fees— — 79 — — 79 
Stock-based compensation expense— — 2,564 — — 2,564 
Currency translation adjustment— — — — 118 118 
Net income— — — 8,601 — 8,601 
Balance at June 30, 2022
152,713,211 $15 $487,008 $(392,937)$(4,480)$89,606 

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

Selecta Biosciences, Inc. and Subsidiaries
Consolidated Statements of Changes in Stockholders’ (Deficit) Equity
(Amounts in thousands, except share data)
   Additional otherStockholders’
 Common stockpaid-inAccumulatedcomprehensive(Deficit)
Balance at December 31, 2020108,071,249 $11 $391,175 $(404,629)$(4,563)(18,006)
Issuance of common stock under Employee Stock Purchase Plan34,696 — 72 — — 72 
Issuance of common stock upon exercise of options153,278 — 244 — — 244 
Issuance of vested restricted stock units10,937 — — — —  
Issuance of common stock through at-the-market offering, net4,706,844 — 20,943 — — 20,943 
Stock-based compensation expense— — 1,780 — — 1,780 
Currency translation adjustment— — — — (6)(6)
Unrealized (losses) on marketable securities— — — — (1)(1)
Net loss— — — (24,597)— (24,597)
Balance at March 31, 2021112,977,004 $11 $414,214 $(429,226)$(4,570)$(19,571)
Issuance of common stock upon exercise of options242,278 — 425 — — 425 
Issuance of vested restricted stock units10,938 — — — —  
Issuance of common stock through at-the-market offering, net1,849,072 1 8,562 — — 8,563 
Stock-based compensation expense— — 1,783 — — 1,783 
Currency translation adjustment— — — — 12 12 
Unrealized gain on marketable securities— — — — 1 1 
Net income— — — 4,565 — 4,565 
Balance at June 30, 2021115,079,292 $12 $424,984 $(424,661)$(4,557)$(4,222)

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

Selecta Biosciences, Inc. and Subsidiaries 
Consolidated Statements of Cash Flows
(Amounts in thousands)
 Six Months Ended
June 30,
Cash flows from operating activities
Net income (loss)$37,379 $(20,032)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization696 512 
Amortization of premiums and discounts on marketable securities 28 
Non-cash lease expense591 549 
(Gain) on disposal of property and equipment(147) 
Stock-based compensation expense6,317 3,563 
Non-cash interest expense579 594 
Warrant liabilities revaluation(13,868)11,927 
Changes in operating assets and liabilities:
Accounts receivable(14,080)(1,241)
Prepaid expenses, deposits and other assets(374)(2,811)
Accounts payable300 (289)
Income taxes payable(280) 
Deferred revenue(42,213)(11,046)
Accrued expenses and other liabilities965 70 
                    Net cash (used in) operating activities(24,135)(18,176)
Cash flows from investing activities
Proceeds from maturities of marketable securities10,000  
Purchases of marketable securities (24,417)
Purchases of property and equipment(554)(643)
                    Net cash provided by (used in) investing activities9,446 (25,060)
Cash flows from financing activities
Debt amendment fee included in debt discount(110) 
Net proceeds from issuance of common stock- at-the-market offering1,675 29,547 
Net proceeds from issuance of common stock and common warrants36,890  
Proceeds from exercise of stock options21 672 
Proceeds from issuance of common stock under Employee Stock Purchase Plan127 72 
                    Net cash provided by financing activities38,603 30,291 
Effect of exchange rate changes on cash86 9 
Net change in cash, cash equivalents, and restricted cash24,000 (12,936)
Cash, cash equivalents, and restricted cash at beginning of period115,436 140,064 
Cash, cash equivalents, and restricted cash at end of period$139,436 $127,128 
Supplemental cash flow information
Cash paid for interest$1,014 $998 
Noncash investing and financing activities
Issuance of common stock, license agreement in stock-based compensation expense$1,000 $ 
Purchase of property and equipment not yet paid$320 $2 
Equity offering costs in accrued liabilities$31 $44 
The accompanying notes are an integral part of these unaudited consolidated financial statements.

Selecta Biosciences, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

1. Description of the Business
Selecta Biosciences, Inc., or the Company, was incorporated in Delaware on December 10, 2007, and is based in Watertown, Massachusetts. The Company is a clinical-stage biopharmaceutical company. The Company’s ImmTOR® platform encapsulates rapamycin, also known as sirolimus, an FDA approved immunomodulator, in biodegradable nanoparticles. ImmTOR is designed to induce antigen-specific immune tolerance. The Company believes, by combining ImmTOR with antigens of interest, the Company’s precision immune tolerance platform has the potential to restore self-tolerance to auto-antigens in autoimmune diseases, amplify the efficacy of biologics (including gene therapies) and mitigate the formation of anti-drug antibodies, or ADAs, against biologic drugs.
Since inception, the Company has devoted its efforts principally to research and development of its technology and product candidates, recruiting management and technical staff, acquiring operating assets, and raising capital. The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, new technological innovations, protection of proprietary technology, dependence on key personnel, compliance with government regulations and the need to obtain additional financing. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance-reporting capabilities.
The Company’s product candidates are in development. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained, or maintained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees and consultants.
Unaudited Interim Financial Information
The accompanying unaudited consolidated financial statements for the three and six months ended June 30, 2022 and 2021 have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC, for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, have been condensed or omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K that was filed with the SEC on March 10, 2022. The unaudited interim financial statements have been prepared on the same basis as the audited consolidated financial statements. In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments that are necessary for a fair statement of the Company’s financial position as of June 30, 2022, the consolidated results of operations for the three and six months ended June 30, 2022, and cash flows for the six months ended June 30, 2022. Such adjustments are of a normal and recurring nature. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2022.
Liquidity and Management’s Plan
The future success of the Company is dependent on its ability to develop its product candidates and ultimately upon its ability to attain and sustain profitable operations. The Company is subject to a number of risks similar to other early-stage life science companies, including, but not limited to, successful development of its product candidates, raising additional capital with favorable terms, protection of proprietary technology and market acceptance of any approved future products. The successful development of product candidates requires substantial working capital, which may not be available to the Company on favorable terms or at all.
To date, the Company has financed its operations primarily through the initial public offering of its common stock, private placements of its common stock, issuances of common and preferred stock, debt, research grants, research collaborations and licenses. The Company currently has no source of product revenue, and it does not expect to generate product revenue for the foreseeable future. To date, the Company’s revenue has primarily been from collaboration and license agreements. The Company has devoted substantially all of its financial resources and efforts to developing its ImmTOR platform, identifying potential product candidates and conducting preclinical studies and clinical trials. The Company is in the early stages of development of its product candidates, and it has not completed development of any ImmTOR-enabled therapies.

As of June 30, 2022, the Company’s cash, cash equivalents, restricted cash and marketable securities were $143.4 million, of which $1.4 million was restricted cash related to lease commitments and $0.3 million was held by its Russian subsidiary designated solely for use in its operations. The Company believes the cash, cash equivalents, restricted cash and marketable securities as of June 30, 2022 will enable it to fund its current planned operations for at least the next twelve months from the date of issuance of these financial statements, though it may realize additional cash resources upon the achievement of certain contingent collaboration milestones or it may pursue additional cash resources through public or private equity or debt financings or by establishing collaborations with other companies. Management’s expectations with respect to its ability to fund current and long term planned operations are based on estimates that are subject to risks and uncertainties. If actual results are different from management’s estimates, the Company may need to seek additional strategic or financing opportunities sooner than would otherwise be expected. However, there is no guarantee that any collaboration milestones will be achieved or that any of these strategic or financing opportunities will be executed on favorable terms, and some could be dilutive to existing stockholders. If the Company is unable to obtain additional funding on a timely basis, it may be forced to significantly curtail, delay, or discontinue one or more of its planned research or development programs or be unable to expand its operations or otherwise capitalize on its commercialization of its product candidates. The Company anticipates operating losses to continue for the foreseeable future due to, among other things, costs related to research and development of its product candidates and its administrative organization.
At this time, any impact of COVID-19 on the Company’s business, revenues, results of operations and financial condition will largely depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the pandemic, the emergence of new virus variants, travel restrictions and social distancing in the United States and other countries, business closures or disruptions, supply chain disruptions, the ultimate impact on financial markets and the global economy, and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.
Guarantees and Indemnifications
As permitted under Delaware law, the Company indemnifies its officers, directors, consultants and employees for certain events or occurrences that happen by reason of the relationship with, or position held at the Company. Through June 30, 2022, the Company had not experienced any losses related to these indemnification obligations, and no claims were outstanding. The Company does not expect significant claims related to these indemnification obligations and, consequently, concluded that the fair value of these obligations is negligible, and no related reserves were established.

2. Summary of Significant Accounting Policies
The Company disclosed its significant accounting policies in Note 2 – Summary of Significant Accounting Policies included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. There have been no material changes during the three months ended June 30, 2022, with the exception of the matters discussed in recent accounting pronouncements.
Recent Accounting Pronouncements
Recently Adopted
In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), DebtModifications and Extinguishments (Subtopic 470-50), CompensationStock Compensation (Topic 718), and Derivatives and HedgingContracts in Entity’s Own Equity (Subtopic 815-40): Issuer's Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. ASU 2021-04 provides guidance as to how entities should account for a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option (i.e., a warrant) that remains equity-classified after modification or exchange as an exchange of the original instrument for a new instrument. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. This new standard was effective for all entities for fiscal years beginning after December 15, 2021. The adoption of ASU 2021-04 did not have an impact on the Company’s financial position or results of operations upon adoption.
Not Yet Adopted
In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. This new standard will be effective for smaller reporting companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company is assessing the impact this standard will have on its consolidated financial statements and disclosures.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. Subsequently, in November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses. ASU 2016-13 requires entities to measure all expected credit

losses for most financial assets held at the reporting date based on an expected loss model which includes historical experience, current conditions, and reasonable and supportable forecasts. ASU 2016-13 also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses. This ASU will be effective for smaller reporting companies for fiscal years beginning after December 15, 2022, with early adoption permitted. The adoption of ASU 2016-13 is not expected to have an impact on the Company’s financial position or results of operations upon adoption.

3. Marketable Securities and Investments
The following table summarizes the marketable securities held as of June 30, 2022 and December 31, 2021 (in thousands):
Unrealized gainsUnrealized lossesFair
June 30, 2022
Commercial paper3,999   3,999 
Total$3,999 $ $ $3,999 
December 31, 2021
Corporate bonds$2,007 $ $(1)$2,006 
Commercial paper11,992   11,992 
Total$13,999 $ $(1)$13,998 
All marketable securities held at June 30, 2022 and December 31, 2021 had maturities of less than 12 months when purchased and are classified as short-term marketable securities on the accompanying consolidated balance sheet. During the six months ended June 30, 2022, there were no marketable securities adjusted for other than temporary declines in fair value. The Company does not intend to sell its investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be at maturity.
As of June 30, 2022 and December 31, 2021, the Company has a $2.0 million investment in Cyrus Biotechnology, Inc., or Cyrus, pursuant to an investment agreement entered into in connection with the Collaboration and License Agreement with Cyrus. The Company’s maximum exposure to loss related to this variable interest entity is limited to the carrying value of the investment.

4. Net Income (Loss) Per Share
The following table sets forth the computation of basic and diluted net income (loss) per share for the three and six months ended June 30, 2022 and 2021 (in thousands, except share and per-share data):
 Three Months Ended
June 30,
Six Months Ended
June 30,
     Net income (loss)$8,601 $4,565 $37,379 $(20,032)
     Less: Change in fair value of liability warrants— (4,820)(13,868) 
     Adjusted net income (loss)$8,601 $(255)$23,511 $(20,032)
     Weighted-average common shares outstanding - basic148,505,729 113,524,110 136,436,316 112,140,815 
     Dilutive effect of employee equity incentive plans and
     outstanding warrants
 7,653,888 529,996  
     Weighted-average common shares used in per share calculations - diluted148,505,729 121,177,998 136,966,312 112,140,815 
Net income (loss) per share:
     Basic$0.06 $0.04 $0.27 $(0.18)
     Diluted$0.06 $ $0.17 $(0.18)


The following table represents the potential dilutive shares of common stock excluded from the computation of the diluted net loss per share for all periods presented, as the effect would have been anti-dilutive:
 Three Months Ended
June 30,
Six Months Ended
June 30,
Options, RSUs and ESPP shares16,422,488 10,574,133 16,660,700 10,574,133 
Warrants to purchase common stock31,307,409 292,469 20,863,898 12,378,016 
Total47,729,897 10,866,602 37,524,598 22,952,149 

5. Fair Value Measurements
The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021 (in thousands):
June 30, 2022
TotalLevel 1Level 2Level 3
     Money market funds (included in cash equivalents)$76,686 $76,686 $ $ 
Marketable securities:
     Commercial paper3,999  3,999  
Total assets$80,685 $76,686 $3,999 $ 
     Warrant liabilities$26,934 $ $ $26,934 
Total liabilities$26,934 $ $ $26,934 
December 31, 2021
TotalLevel 1Level 2Level 3
     Money market funds (included in cash equivalents)$66,563 $66,563 $ $ 
Marketable securities:
     Corporate bonds2,006  2,006  
     Commercial paper11,992  11,992  
Total assets$80,561 $66,563 $13,998 $ 
     Warrant liabilities$25,423 $ $ $25,423 
Total liabilities$25,423 $ $ $25,423 

There were no transfers within the fair value hierarchy during the six months ended June 30, 2022 or year ended December 31, 2021.

Cash, Cash Equivalents, and Restricted Cash
As of June 30, 2022 and December 31, 2021, money market funds were classified as cash and cash equivalents on the accompanying consolidated balance sheets as they mature within 90 days from the date of purchase.
As of June 30, 2022, the Company had restricted cash balances relating to a secured letter of credit in connection with its lease for the Company’s headquarters. The Company’s consolidated statements of cash flows include the following as of June 30, 2022 and 2021 (in thousands):
June 30,
Cash and cash equivalents$138,057 $125,749 
Long-term restricted cash1,379 1,379 
Total cash, cash equivalents, and restricted cash$139,436 $127,128 


Marketable Securities
As of June 30, 2022, marketable securities classified as Level 2 within the valuation hierarchy consist of commercial paper which are available-for-sale securities in accordance with the Company’s investment policy. The Company estimates the fair value of these marketable securities by taking into consideration valuations that include market pricing based on real-time trade data for the same or similar securities, and other observable inputs. The amortized cost of available-for-sale debt securities is adjusted for amortization of premiums and accretion of discounts to the earliest call date for premiums or to maturity for discounts.
Loans Payable
At June 30, 2022, in light of the issuance of the first tranche under the Company’s term loan pursuant the Loan and Security Agreement, dated August 31, 2020, as amended, among the Company, Oxford Finance LLC, or Oxford, as Collateral Agent and a Lender, and Silicon Valley Bank, or SVB, as a Lender, or the Loan and Security Agreement, the Company believes the carrying value approximates the fair value of the loan.
In December 2019, the Company issued warrants in connection with a private placement of shares of common stock, or the 2019 Warrants. Pursuant to the terms of the 2019 Warrants, the Company could be required to settle the 2019 Warrants in cash in the event of certain acquisitions of the Company and, as a result, the 2019 Warrants are required to be measured at fair value and reported as a liability on the balance sheet.
In April 2022, the Company issued warrants in connection with an underwritten offering of shares of common stock and warrants to purchase shares of common stock, or the 2022 Warrants. Pursuant to the terms of the 2022 Warrants, the Company could be required to settle the 2022 Warrants in cash in the event of an acquisition of the Company under certain circumstances and, as a result, the 2022 Warrants are required to be measured at fair value and reported as a liability on the balance sheet.
The Company recorded the fair value of the 2019 Warrants and the 2022 Warrants upon issuance using the Black-Scholes valuation model and is required to revalue the 2019 Warrants and the 2022 Warrants at each reporting date, with any changes in fair value recorded in the statement of operations and comprehensive income (loss). The valuations of the 2019 Warrants and the 2022 Warrants are considered Level 3 of the fair value hierarchy due to the need to use assumptions in the valuations that are both significant to the fair value measurement and unobservable; including the stock price volatility and the expected life of the 2019 Warrants and the 2022 Warrants. Generally, increases (decreases) in the fair value of the underlying stock and estimated term would result in a directionally similar impact to the fair value measurement. The changes in the fair values of the Level 3 warrant liability are reflected in the statement of operations and comprehensive income (loss) for the three and six months ended June 30, 2022 and 2021.
The estimated fair values of the 2019 Warrants and the 2022 Warrants are determined using the following inputs to the Black-Scholes simulation valuation:
Estimated fair value of the underlying stock. The Company estimates the fair value of the common stock based on the closing stock price at the end of each reporting period.
Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury at the valuation date commensurate with the expected remaining life assumption.
Dividend rate. The dividend rate is based on the historical rate, which the Company anticipates will remain at zero.
Expected life. The expected life of the 2019 Warrants and the 2022 Warrants is assumed to be equivalent to their remaining contractual terms which expire on December 23, 2024 and April 11, 2027, respectively.
Volatility. The Company estimates stock price volatility based on the Company’s historical volatility and the historical volatility of peer companies for a period of time commensurate with the expected remaining life assumption.
A summary of the Black-Scholes pricing model assumptions used to record the fair value of the 2019 Warrants liability is as follows:


June 30,December 31,
Risk-free interest rate2.92 %0.97 %
Dividend yield  
Expected life (in years)2.482.98
Expected volatility96.95 %96.10 %
A summary of the Black-Scholes pricing model assumptions used to record the fair value of the 2022 Warrants liability is as follows:
At Issuance
June 30,April 11,
Risk-free interest rate3.01 %2.79 %
Dividend yield  
Expected life (in years)4.785.00
Expected volatility99.88 %96.00 %
Changes in Level 3 Liabilities Measured at Fair Value on a Recurring Basis
The following table reflects a roll-forward of fair value for the Company’s Level 3 warrant liabilities (see Note 10), for the six months ended June 30, 2022 (in thousands):
Warrant liabilities
Fair value as of December 31, 2021
     Change in fair value(13,868)
Fair value as of June 30, 2022

6. Property and Equipment
Property and equipment consists of the following (in thousands):
 June 30,December 31,
Laboratory equipment$6,074 $5,134 
Computer equipment and software695 731 
Leasehold improvements57 45 
Furniture and fixtures341 332 
Office equipment190 163 
Construction in process310 534 
Total property and equipment7,667 6,939 
Less accumulated depreciation(4,834)(4,797)
Property and equipment, net$2,833 $2,142 

Depreciation expense was $0.2 million and $0.3 million, and $0.2 million and $0.3 million for the three and six months ended June 30, 2022 and 2021, respectively.


7. Accrued Expenses
Accrued expenses consist of the following (in thousands):
 June 30,December 31,
Payroll and employee related expenses$2,223 $3,179 
Collaboration and licensing500  
Accrued patent fees885 309 
Accrued external research and development costs6,701 4,339 
Accrued professional and consulting services547 815 
Accrued interest184 170 
Other1,326 1,721 
Accrued expenses$12,366 $10,533 
Other accrued expenses as of June 30, 2022 and December 31, 2021 include a $0.9 million estimated liability for the settlement of litigation relating to the two lawsuits described further within Note 17.

8. Leases
For the three and six months ended June 30, 2022 and 2021, the components of lease costs were as follows (in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
Operating lease cost$505 $454 $1,011 $898 
Variable lease cost205 182 425 470 
Short-term lease cost2 2 5 5 
Total lease cost$712 $638 $1,441 $1,373 

The maturity of the Company’s operating lease liabilities as of June 30, 2022 were as follows (in thousands):
June 30,
2022 (remainder)$942