AKOUOS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q, or this Quarterly Report, and our audited financial statements and related notes for the year endedDecember 31, 2021 included in our Annual Report on Form 10-K, filed with theSecurities and Exchange Commission , orSEC , onMarch 29, 2022 . Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, 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 Quarterly 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.
Overview
We are a precision genetic medicine company dedicated to our mission of developing gene therapies with the potential to restore, improve, and preserve high-acuity physiologic hearing for individuals who live with disabling hearing loss worldwide. We have built a precision genetic medicine platform that incorporates a proprietary vector library consisting of variants of a small virus commonly used in gene therapy, known as adeno-associated virus, or AAV, and a novel delivery approach. We are executing on our core strategic initiatives, which include the advancement of our lead product candidate, AK-OTOF; and expansion of our pipeline to include programs focused on monogenic and inner ear conditions of complex etiology, such as AK-antiVEGF for vestibular schwannoma; and to date, have completed development of an internal current good manufacturing practice pilot plant facility. We believe the genetic medicines we are developing have the potential to create a new standard of care for the treatment of disabling hearing loss, and to transform the lives of individuals and their families, with disabling hearing loss, by providing a meaningful alternative to the invasive and limited current non-pharmacologic treatments. Our aim is to leverage our capabilities to become a fully integrated biotechnology company. We believe our platform and our team together provide a unique advantage to efficiently develop potential genetic medicines for a variety of inner ear conditions. Since our inception, we have focused substantially all of our resources on organizing and staffing our company, business planning, raising capital, conducting research and development activities, filing and prosecuting patent applications, identifying potential product candidates, soliciting input from regulators regarding development of these product candidates, and undertaking nonclinical studies. We do not have any products approved for sale and have not generated any revenue from product sales. To date, we have funded our operations primarily with proceeds from sales of preferred stock (including borrowings under convertible promissory notes, which converted into preferred stock in 2017), with proceeds from our initial public offering, or IPO, and, most recently, from our at-the-market offering under our sales agreement, or the ATM Sales Agreement, withCowen and Company, LLC . Since our inception, we have incurred significant operating losses. Our ability to generate any product revenue or product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of
our
product candidates.
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We reported a net loss of
? initiate a planned Phase 1/2 clinical trial of our lead product candidate,
AK-OTOF, for the treatment of otoferlin gene (OTOF)-mediated hearing loss;
submit an investigational new drug application, or IND, and initiate a planned
? Phase 1/2 clinical trial for our product candidate AK-antiVEGF for the
treatment of vestibular schwannoma;
? continue our current research programs and our preclinical development of
product candidates from our current research programs;
? advance additional product candidates into preclinical and clinical
development;
? expand the capabilities of our genetic medicine platform;
? seek marketing approvals for any product candidates that successfully complete
clinical trials;
ultimately establish a sales, marketing, and distribution infrastructure; scale
? up manufacturing capabilities; and commercialize any products for which we may
obtain marketing approval;
? expand, maintain, and protect our intellectual property portfolio;
hire additional clinical, regulatory, manufacturing, and other scientific
? personnel to support our research, product development, and future
commercialization efforts; and
add operational, legal, compliance, financial, and management information
? systems personnel, including personnel to support our research, product
development, and future commercialization efforts and support our operations as
a public company.
We will not generate revenue from product sales unless and until we successfully
complete clinical development and obtain regulatory approval for one or more of
our product candidates. If we obtain regulatory approval for any of our product
candidates, we expect to incur significant expenses related to developing our
commercialization capability to support product sales, marketing, and
distribution. Further, we expect to incur additional costs associated with
operating as a public company.
As a result, we will need substantial additional funding to support our
continuing operations and pursue our growth strategy. Until such time as we can
generate significant revenue from product sales, if ever, we expect to finance
our operations through a combination of equity offerings, debt financings,
collaborations, licensing arrangements, and strategic alliances. We may be
unable to raise additional funds or enter into such other agreements or
arrangements when needed on favorable terms, or at all. If we fail to raise
capital or enter into such agreements as, and when, needed, we may have to
significantly delay, scale back, or discontinue the development and
commercialization of one or more of our product candidates.
Because of the numerous risks and uncertainties associated with pharmaceutical
product development, we are unable to accurately predict the timing or amount of
increased expenses or when, or if, we will be able to achieve or maintain
profitability. Even if we are able to generate product sales, we may not become
profitable. If we fail to become profitable or are unable to sustain
profitability on a continuing basis, then we may be unable to continue our
operations at planned levels and be forced to reduce or terminate our
operations.
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The COVID-19 pandemic may affect our ability to initiate and complete
nonclinical studies, delay the initiation of our planned clinical trial or
future clinical trials, disrupt regulatory activities, or have other adverse
effects on our business, results of operations, and financial condition. In
addition, the pandemic has caused substantial disruption to supply chains and
adversely impacted economies worldwide and could impact the financial markets,
each of which could result in adverse effects on our business and operations and
our ability to raise additional funds to support our operations.
To date, we have experienced a business disruption at our third-party
manufacturers, specifically manufacturing delays, including delays related to
the COVID-19 pandemic. We are continuing to monitor the impact of the COVID-19
pandemic on our business and financial statements. We have not incurred
impairment losses in the carrying values of our assets as a result of the
pandemic. We are following, and will continue to follow, recommendations from
the U.S. Centers for Disease Control and Prevention as well as federal, state,
and local governments regarding work-from-home practices for non-essential
employees as well as return-to-work policies and procedures. As a result, we
have modified our business practices, including implementing work-from-home and
return-to-work policies for employees in accordance with guidance from, and
requirements of, federal and state authorities. We expect to continue to take
actions as may be required or recommended by government authorities or as we
determine are in the best interests of our employees and other business partners
in light of the pandemic.
We cannot be certain what the overall impact of the COVID-19 pandemic will be on our business, and it has the potential to adversely affect our business, financial condition, results of operations, and prospects.
Components of Our Results of Operations
Revenue
To date, we have not generated any revenue from any sources, including product sales, and do not expect to generate any revenue from the sale of products for the foreseeable future. If our development efforts for our product candidates are successful and result in regulatory approval or collaboration or license agreements with third parties, we may generate revenue in the future from product sales, payments from collaboration or license agreements that we may enter into with third parties, or any combination thereof.
Operating Expenses
Research and Development Expenses
Research and development expenses consist of costs incurred for our research activities, including our discovery efforts, and the development of our programs. These expenses include:
employee-related expenses, including salaries, related benefits, and
? stock-based compensation expense for employees engaged in research and
development functions;
expenses incurred in connection with the preclinical development of our product
? candidates and research programs, including under agreements with third
parties, such as consultants, contractors, and contract research organizations,
or CROs;
the cost of developing and scaling our manufacturing process and manufacturing
? drug products for use in our research and nonclinical studies, including under
agreements with third parties, such as consultants, contractors, and
third-party manufacturers;
? laboratory supplies and research materials;
? facilities, depreciation, and other expenses, which include direct and
allocated expenses for rent and maintenance of facilities and insurance; and
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? payments made under third-party licensing agreements.
We expense research and development costs as incurred. Non-refundable advance payments that we make for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed, or when it is no longer expected that the goods will be delivered or the services rendered. Upfront payments under license agreements are expensed upon receipt of the license, and annual maintenance fees under license agreements are expensed in the period in which they are incurred. Milestone payments under license agreements are accrued, with a corresponding expense being recognized, in the period in which the milestone is determined to be probable of achievement and the related amount is reasonably estimable. Our direct external research and development expenses are tracked on a program-by-program basis, including our early-stage programs, and consist of costs that include fees, reimbursed materials, and other costs paid to consultants, contractors, third-party manufacturers, and CROs in connection with our research, nonclinical, and manufacturing activities. We do not allocate employee costs, costs associated with our discovery efforts, laboratory supplies, and facilities expenses, including depreciation or other indirect costs, to specific product development programs because these costs are deployed across multiple programs and our platform and, as such, are not separately classified. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect that our research and development expenses will increase substantially in connection with our planned preclinical and clinical development activities in the near term and in the future. In particular, we expect that the research and development expenses of our AK-OTOF and AK-antiVEGF programs will increase substantially in the near term. These substantial increases in expenses relate to plans to initiate a planned Phase 1/2 clinical trial of AK-OTOF, and to submit an IND for AK-antiVEGF for vestibular schwannoma to theU.S. Food and Drug Administration , or FDA, in 2023. We also expect that the research and development expenses of our other early-stage programs will increase in the near term as we initiate IND-enabling activities for those product candidates. At this time, we cannot accurately estimate or know the nature, timing, and costs of the efforts that will be necessary to complete the preclinical and clinical development of any of our product candidates. The successful development of our product candidates is highly uncertain. This is due to the numerous risks and uncertainties associated with product development, including the following:
? the timing and progress of nonclinical studies, including IND-enabling studies;
? the number and scope of preclinical and clinical programs we decide to pursue;
? raising additional funds necessary to complete clinical development of our
product candidates;
the timing of filing and acceptance of INDs or comparable foreign applications
? that allow commencement of our planned clinical trial or future clinical trials
for our product candidates;
? the successful initiation, enrollment, and completion of clinical trials,
including under current good clinical practices;
our ability to achieve positive results from our future clinical programs that
? support a finding of safety and effectiveness and an acceptable risk-benefit
profile of our product candidates in the intended populations;
? the availability of specialty raw materials for use in production of our
product candidates;
? our ability to establish arrangements through our own facilities or with
third-party manufacturers for clinical supply and for analytical testing;
? our ability to establish new licensing or collaboration arrangements;
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? the receipt and related terms of regulatory approvals from FDA and other
applicable regulatory authorities;
? our ability to establish and maintain patent, trademark, and trade secret
protection or regulatory exclusivity for our product candidates;
our ability to procure intellectual property protection and regulatory
? exclusivity and enforce and defend our intellectual property rights and claims;
and
? our ability to maintain a continued acceptable safety, tolerability, and
efficacy profile of our product candidates following approval.
A change in the outcome of any of these variables with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate. We may never succeed in obtaining regulatory approval for any of our product candidates.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and personnel-related costs, including stock-based compensation, for our personnel in executive, legal, finance and accounting, human resources, and other administrative functions. General and administrative expenses also include legal fees relating to intellectual property and corporate matters; professional fees paid for accounting, auditing, consulting, and tax services; insurance costs; travel expenses; and facility costs not otherwise included in research and development expenses. We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our continued research activities and development of our programs and platform. We also anticipate that we will continue to incur increased accounting, audit, legal, regulatory, compliance, director and officer insurance, and investor and public relations expenses associated with operating as a public company.
Other Income (Expense)
Interest Income
Interest income consists of interest earned on our invested cash and marketable securities balances.
Other Income (Expense), Net
Other income (expense), net includes interest expense related to a finance lease, any realized gains or losses on the sale of marketable securities, and miscellaneous other income and expense unrelated to our core operations.
Income Taxes
Since our inception, we have not recorded any income tax benefits for the net
losses we have incurred or for the research and development tax credits earned
in each year and interim period, as we believe, based upon the weight of
available evidence, that it is more likely than not that all of our net
operating loss carryforwards and tax credit carryforwards will not be realized.
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Results of Operations
Comparison of the three months ended
The following table summarizes our results of operations for the three months
ended
Three Months Ended
June 30,
(In thousands) 2022 2021 Change
Operating expenses:
Research and development $ 14,318 $ 17,119 $ (2,801)
General and administrative 6,682 5,665 1,017
Total operating expenses 21,000 22,784 (1,784)
Loss from operations (21,000) (22,784) 1,784
Other income (expense):
Interest income 295 554 (259)
Other income (expense), net (126) (510) 384
Total other income, net 169 44 125
Net loss $ (20,831) $ (22,740) $ 1,909 Research and Development Expenses
Three Months Ended
June 30,
(In thousands) 2022 2021 Change
Direct research and development expenses by program: AKOTOF$ 111 $ 6,104 $ (5,993) AK-antiVEGF 3,132 1,057 2,075 Other earlystage programs 407 889 (482) Platform, research and discovery, and unallocated expenses: Platformrelated external costs 664 1,253
(589)
Personnel related (including
stockbased compensation) 6,816 5,029 1,787
Facility related and other 3,188 2,787 401
Total research and development expenses
Research and development expenses were$14.3 million for the three months endedJune 30, 2022 , compared to$17.1 million for the three months endedJune 30, 2021 . The decrease of$6.0 million in direct costs related to our AK OTOF program was due to timing of manufacturing activities for existing third-party manufacturers (includingCatalent Maryland, Inc. ), in addition to the substantial completion of activities with one of our third-party manufacturers,Lonza Houston, Inc. The increase of$2.1 million in direct costs related to our AK-antiVEGF program was primarily due to increased manufacturing costs. The decrease of$0.5 million in research and development expenses for our other early-stage programs was primarily due to decreased spend related to the research of these programs. The decrease of$0.6 million in platform-related external costs was primarily related to decreases in spending related to the development of our novel delivery approach. The increase of$1.8 million in personnel related costs was primarily due to increased headcount in our research and development function. Personnel related costs included stock-based compensation expense of$1.1 million for the three months endedJune 30, 2022 and$1.2 million for the three months endedJune 30, 2021 . The increase of$0.4 million in facility related and other costs was primarily due to an increase in facility costs and laboratory costs related to our corporate headquarters. 28
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General and Administrative Expenses
Three Months Ended
June 30,
(In thousands) 2022 2021 ChangePersonnel related (including stockbased compensation)$ 4,392 $ 3,181 $ 1,211 Professional and consultant fees 1,158 1,356 (198) Facility related and other 1,132 1,128 4 Total general and administrative expenses$ 6,682 $
5,665
General and administrative expenses for the three months endedJune 30, 2022 were$6.7 million , compared to$5.7 million for the three months endedJune 30, 2021 . Personnel related costs increased by$1.2 million primarily as a result of the increase in headcount in our general and administrative function. Personnel related costs included stock-based compensation expense of$1.6 million for the three months endedJune 30, 2022 and$1.2 million for the three months endedJune 30, 2021 . The decrease of$0.2 million in professional and consultant fees was related to a decrease in professional fees related to legal services. Facility related and other expenses remained relatively consistent between
periods. Other Income (Expense) Interest Income
Interest income was
Other Expense, Net
Other expense, net was$0.1 million and$0.5 million , respectively, for each of the three months endedJune 30, 2022 and 2021, and was primarily related to net amortization of premiums and accretion of discounts on marketable securities.
Comparison of the six months ended
The following table summarizes our results of operations for the six months
ended
Six Months Ended June 30,
(In thousands) 2022 2021 Change
Operating expenses:
Research and development $ 34,706 $ 28,377 $ 6,329
General and administrative 13,328 10,555 2,773
Total operating expenses 48,034 38,932 9,102
Loss from operations (48,034) (38,932) (9,102)
Other income (expense):
Interest income 552 1,063 (511)
Other expense, net (332) (957) 625
Total other income, net 220 106 114
Net loss $ (47,814) $ (38,826) $ (8,988)
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Research and Development Expenses
Six Months Ended June 30,
(In thousands) 2022 2021 Change
Direct research and development expenses by program: AKOTOF$ 8,277 $ 8,360 $ (83) AK-antiVEGF 3,830 2,466 1,364 Other earlystage programs 635 1,395 (760) Platform, research and discovery, and unallocated expenses: Platformrelated external costs 1,684 1,497 187 Personnel related (including stockbased compensation) 13,742 9,537 4,205 Facility related and other 6,538
5,122 1,416
Total research and development expenses
Research and development expenses were$34.7 million for the six months endedJune 30, 2022 , compared to$28.4 million for the six months endedJune 30, 2021 . Direct costs related to our AK-OTOF program remained relatively consistent between periods. The increase of$1.4 million in direct costs related to our AK-antiVEGF program was primarily due to increased nonclinical toxicology studies and manufacturing costs. The decrease of$0.8 million in research and development expenses for our other early-stage programs was primarily due to decreased spend related to the research of these programs. The increase of$0.2 million in platform-related external costs was primarily related to increases in spending related to the development of our novel delivery approach. The increase of$4.2 million in personnel-related costs was primarily due to increased headcount in our research and development function. Personnel-related costs included stock-based compensation expense of$2.1 million for the six months endedJune 30, 2022 and$2.2 million for the six months endedJune 30, 2021 . The increase of$1.4 million in facility related and other costs was primarily due to an increase in facility costs and laboratory costs related to our corporate headquarters.
General and Administrative Expenses
Six Months Ended June 30,
(In thousands) 2022 2021 Change
Personnel related (including stockbased compensation) $ 8,965 $ 6,017 $ 2,948
Professional and consultant fees 2,032 2,459 (427)
Facility related and other 2,331 2,079 252
Total general and administrative expenses $ 13,328 General and administrative expenses for the six months endedJune 30, 2022 were$13.3 million , compared to$10.6 million for the six months endedJune 30, 2021 . Personnel-related costs increased by$2.9 million primarily as a result of the increase in headcount in our general and administrative function. Personnel-related costs included stock-based compensation expense of$3.3 million for the six months endedJune 30, 2022 and$2.3 million for the six months endedJune 30, 2021 . The decrease of$0.4 million in professional and consultant fees was related to a decrease in professional fees related to legal services. The increase in facility-related and other expenses of$0.3 million was primarily due to an increase in facility costs and laboratory costs related to our corporate headquarters.
Other Income (Expense)
Interest Income
Interest income was
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Other Expense, Net
Other expense, net was $0.3 million and $1.0 million , respectively, for each of
the six months ended June 30, 2022 and 2021, and was primarily related to net
amortization of premiums and accretion of discounts on marketable securities.
Liquidity and Capital Resources
Since our inception, we have incurred significant operating losses. We expect to incur significant expenses and operating losses for the foreseeable future as we advance the preclinical and, if successful, the clinical development of our programs. To date, we have funded our operations with proceeds from sales of preferred stock (including borrowings under convertible promissory notes, which converted into preferred stock in 2017), and through proceeds from our IPO and at-the-market offering under the ATM Sales Agreement. As ofJune 30, 2022 , we had cash, cash equivalents and marketable securities of$192.9 million . OnJune 30, 2020 , we completed our IPO and issued and sold 14,375,000 shares of our common stock, at a public offering price of$17.00 per share, for gross proceeds of$244.4 million , or net proceeds of$223.8 million after deducting underwriting discounts, commissions, and offering expenses. InAugust 2021 , we entered into an ATM Sales Agreement withCowen and Company, LLC , to issue and sell, from time to time at prevailing market prices, shares of the Company's common stock having aggregate gross proceeds of up to$100.0 million . The shares that may be sold pursuant to the ATM Sales Agreement, if any, will be issued and sold pursuant to our shelf registration statement on Form S-3 that was declared effective by theSEC onAugust 20, 2021 . During the second quarter of 2022 we sold 2,272,727 shares of common stock under the ATM Sales Agreement for net proceeds of approximately$7.2 million .
Cash Flows
The following table summarizes our sources and uses of cash for each of the
periods presented:
Six Months Ended June 30,
(In thousands) 2022 2021Cash used in operating activities$ (37,036) $
(28,011)
Cash provided by (used in) investing activities (18,806)
91,398
Cash provided by financing activities 7,515
127
Net increase (decrease) in cash, cash equivalents and restricted cash$ (48,327) $ 63,514 Operating Activities During the six months endedJune 30, 2022 , operating activities used$37.0 million of cash, primarily resulting from our net loss of$47.8 million , partially offset by non-cash charges of$7.7 million and net cash provided by changes in our operating assets and liabilities of$3.1 million .
During the six months ended
Changes in accounts payable, accrued expenses and other current liabilities, and
prepaid expenses and other current assets in all periods were generally due to
growth in our business, the advancement of our research programs, and the timing
of vendor invoicing and payments.
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Investing Activities
During the six months ended June 30, 2022 , net cash used in investing activities
was $18.8 million , related to purchases of marketable securities of $79.8
million and purchases of property and equipment of $9.0 million , partially
offset by proceeds from sales or maturities of marketable securities of $70.0
million .
During the six months ended June 30, 2021 , net cash provided by investing
activities was $91.4 million , related to maturities of marketable securities of
$168.0 million , partially offset by purchases of marketable securities of $70.3
million and purchases of property and equipment of $6.3 million .
Financing Activities
During the six months ended
During the six months ended
Funding Requirements
We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the nonclinical activities and studies and initiate clinical trials for our product candidates in development. The timing and amount of our funding requirements will depend on many factors, including:
? the progress, costs, and results of our planned Phase 1/2 clinical trial of
AK-OTOF and any future clinical development of AK-OTOF;
the progress, costs, and results of our IND-enabling studies to support our
? planned IND submission for AK-antiVEGF, and any future clinical development of
AK-antiVEGF;
? the scope, progress, costs, and results of preclinical and clinical development
for our other product candidates and development programs;
? the number and development requirements of other product candidates that we
pursue;
? the costs, timing, and outcome of regulatory review of our product candidates
and device system;
? the cost and timing of completion of clinical and commercial-scale
manufacturing activities;
the costs and timing of future commercialization activities, including product
? manufacturing, marketing, sales, and distribution, for any of our product
candidates for which we receive marketing approval;
the amount and timing of revenue, if any, received from commercial sales of our
? product candidates for which we receive marketing approval, which in turn
depends on the sales price and the availability of coverage and adequate
third-party reimbursement;
? the costs of operating as a public company;
? the costs to retain and attract our personnel;
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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;
? the cash requirements of any future acquisitions or discovery of product
candidates;
? the extent to which we may acquire or in-license other product candidates and
technologies; and
the severity, duration, and impact of the COVID-19 pandemic, which may
? adversely impact our business, including our planned Phase 1/2 clinical trials
and manufacturing activities for AK-OTOF and AK-antiVEGF, and planned
development activities for other product candidates.
We believe that our existing cash, cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditure requirements beyond the next 18 months from the issuance date of the consolidated financial statements. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances, and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of such stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures, or declaring dividends. If we raise additional funds through collaborations, licensing arrangements, or strategic alliances with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, or product candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce, or terminate our research, product development, or future commercialization efforts, or grant rights to develop and market drugs that we would otherwise prefer to develop and market ourselves.
Application of Critical Accounting Estimates
Our consolidated financial statements are prepared in accordance with generally accepted accounting principles inthe United States . The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our consolidated financial statements. We base our estimates on historical experience, known trends and events, and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions. During the three and six months endedJune 30, 2022 , there were no material changes to our critical accounting estimates. Our critical accounting policies are described in the notes to the consolidated financial statements and under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Significant Judgments and Estimates" in our Annual Report on Form 10-K for the year endedDecember 31, 2021 filed with theSEC onMarch 29, 2022 , and in the notes to the condensed consolidated financial statements appearing elsewhere in this Quarterly Report.
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 condensed consolidated interim financial statements appearing elsewhere
in this Quarterly Report.
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Emerging Growth Company Status
The Jumpstart Our Business Startups Act of 2012 permits an "emerging growth company" such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have elected not to "opt out" of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (i) irrevocably elect to "opt out" of such extended transition period or (ii) no longer qualify as an emerging growth company. We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.
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