AURA BIOSCIENCES, INC. The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report. This discussion and analysis and other parts of this Quarterly Report contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions, such as statements regarding our plans, objectives, expectations, intentions and projections. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under Part II, Item 1A, "Risk Factors" and elsewhere in this Quarterly Report. You should carefully read the "Risk Factors" section of this Quarterly Report to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section entitled "Special Note Regarding Forward-Looking Statements."
Overview
We are a clinical-stage biotechnology company leveraging our novel targeted oncology platform to develop a potential new standard of care across multiple cancer indications, with an initial focus on ocular and urologic oncology. Our proprietary platform enables the targeting of a broad range of solid tumors using Virus-Like Particles, or VLPs, that can be conjugated with drugs or loaded with nucleic acids to create Virus-Like Drug Conjugates, or VDCs. Our VDCs are largely agnostic to tumor type and can recognize a surface marker, known as heparan sulfate proteoglycans, or HSPGs, that are specifically modified and broadly expressed on many tumors. Belzupacap sarotalocan, our first VDC candidate, is being developed for the first line treatment of primary choroidal melanoma, a rare disease with no drugs approved. We have completed a Phase 1b/2 trial using intravitreal administration that has demonstrated a statistically significant growth rate reduction in patients with prior active growth and high levels of tumor control with visual acuity preservation in a majority of patients, as assessed using clinical endpoints in alignment with the feedback fromU.S. Food and Drug Administration , or the FDA. These data supported advancement into a Phase 2 dose escalation trial, where we are currently evaluating suprachoroidal, or SC, administration of belzupacap sarotalocan. We plan to present six to twelve-month safety and efficacy data from this trial in 2022 and make a decision on the route of administration to initiate a pivotal trial in the second half of 2022. We are also developing belzupacap sarotalocan for additional ocular oncology indications and plan to file an IND inthe United States in the second half of 2022 for choroidal metastases. Leveraging our VDCs' broad tumor targeting capabilities and having received fast track designation by the FDA for belzupacap sarotalocan for the treatment of non-muscle invasive bladder cancer, or NMIBC, we intend to initiate a Phase 1 trial in NMIBC, our first non-ophthalmic solid tumor indication, in the third quarter of 2022 and plan to present initial data from this trial in 2023. We were incorporated as aDelaware corporation in 2009 and, as ofAugust 1, 2022 , our headquarters are located inBoston, Massachusetts . Since our inception, we have focused our efforts on identifying and developing potential product candidates, conducting preclinical studies and clinical trials, organizing and staffing our company, business planning, establishing our intellectual property portfolio, raising capital, conducting discovery, research and development activities and providing general and administrative support for these operations. We do not have any product candidates approved for sale and have not generated any revenue to date. We have funded our operations primarily through the sale of convertible preferred stock, common stock, and warrants. From inception throughJune 30, 2022 , we have raised an aggregate of approximately$218.9 million of gross proceeds primarily from private placements of our equity and convertible preferred stock as well as through the issuance of our common stock. InNovember 2021 , we issued and sold 6,210,000 shares of our common stock, including the full exercise of the underwriters' option to purchase additional shares at a price to the public of$14.00 per share for aggregate gross proceeds of$86.9 million in our initial public offering. We received approximately$78.3 million in net proceeds after deducting underwriting discounts, commissions and offering expenses. We have incurred significant operating losses in every year since our inception in 2009 and have not generated any revenue. We expect to continue to incur significant expenses and operating losses for the foreseeable future. Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and commercialization of one or more of our product candidates. Our net losses were$26.3 million and$14.8 million for the six months endedJune 30, 2022 and 2021, respectively. As ofJune 30, 2022 , we had an accumulated deficit of$178.4 million . In addition, our losses from operations may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities. 17 -------------------------------------------------------------------------------- We anticipate that our expenses and capital requirements will increase substantially in connection with our ongoing activities, particularly as we advance the preclinical studies and clinical trials of our product candidates. In addition, we incur additional costs associated with operating as a public company. We expect that our expenses and capital requirements will increase substantially if and as we: ?
conduct our current and future clinical trials of belzupacap sarotalocan;
?
progress the preclinical and clinical development of new indications;
?
establish our manufacturing capability, including developing our contract development and manufacturing relationships;
?
seek to identify and develop additional product candidates;
?
seek regulatory approval of our current and future product candidates;
?
expand our operational, financial, and management systems and increase personnel, including personnel to support our preclinical and clinical development, manufacturing and commercialization efforts;
?
maintain, expand and protect our intellectual property portfolio; and
?
incur additional legal, accounting, or other expenses in operating our business, including the 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 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 or other strategic transactions. 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. We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain marketing approval for our product candidates. The lengthy process of securing marketing approvals for new drugs requires the expenditure of substantial resources. Any delay or failure to obtain regulatory approvals would materially adversely affect the development efforts of our product candidates and our business overall. Because of the numerous risks and uncertainties associated with product development, we are unable to 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 revenue from 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. As ofJune 30, 2022 , we had cash and cash equivalents and marketable securities of$122.1 million . We believe that our existing cash and cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditure requirements into 2024. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See "-Liquidity and Capital Resources" below.
Impact of the Ongoing COVID-19 Pandemic
The ongoing COVID-19 pandemic continues to present substantial public health and
economic challenges around the world, and to date has led to the implementation
of various responses, including government-imposed quarantines, stay-at-home
orders, travel restrictions, mandated business closures and other public health
safety measures.
We continue to closely monitor the impact of the COVID-19 pandemic on all
aspects of our business, including how it has and will continue to impact our
operations and the operations of our suppliers, vendors and business partners,
and may take further precautionary and preemptive actions as may be required by
federal, state or local authorities. In addition, we have taken steps to
minimize the current environment's impact on our business and strategy,
including devising contingency plans and securing additional resources from
third party service providers. For the safety of our employees and families, we
have introduced enhanced safety measures for scientists to be present in our
labs and increased the use of third party service providers for the conduct of
certain experiments and studies for research programs. To date, we've only
encountered minor delays in our manufacturing process due to a supply chain
constraint with one of our vendors.
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Beyond the impact on our pipeline, the extent to which COVID-19 ultimately
impacts our business, results of operations and financial condition will depend
on future developments, which remain highly uncertain and cannot be predicted
with confidence, such as the duration of the outbreak, the emergence of new
variants, new information that may emerge concerning the severity of COVID-19 or
the effectiveness of actions taken to contain COVID-19 or treat its impact,
including vaccination campaigns, among others. If we or any of the third parties
with whom we engage, however, were to experience any additional shutdowns or
other prolonged business disruptions, our ability to conduct our business in the
manner and on the timelines presently planned could be materially or negatively
affected, which could have a material adverse impact on our business, results of
operations and financial condition. Although to date, our business has not been
materially impacted by COVID-19, it is possible that our clinical development
timelines could be negatively affected by COVID-19, which could materially and
adversely affect our business, financial condition and results of operations.
See Item 1A "Risk Factors" of this Quarterly Report on Form 10-Q for a
discussion of the potential adverse impact of the COVID-19 pandemic on our
business, financial condition and results of operations.
Components of Our Results of Operations
Revenue
Since inception, we have not generated any revenue and do not expect to generate any revenue from the sale of products in the foreseeable future. If our development efforts for one or more of our product candidates are successful and result in regulatory approval, or if we enter into collaboration or license agreements with third parties, we may generate revenue in the future from a combination of product sales or payments from collaboration or license agreements. We cannot predict if, and when, or to what extent, we will generate revenue from the commercialization and sale of our product candidates. We may never succeed in obtaining regulatory approval for any of our product candidates.
Operating Expenses
Research and Development Expenses
Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts and the development of our belzupacap sarotalocan program, and include: ?
employee-related expenses, including salaries, related-benefits and stock-based compensation expense for employees engaged in research and development functions;
?
fees paid to consultants for services directly related to our product development and regulatory efforts;
?
expenses associated with conducting preclinical studies performed by ourselves, outside vendors or academic collaborators;
?
expenses incurred under agreements with contract research organizations, or CROs, as well as consultants that conduct and provide supplies for our preclinical studies and clinical trials;
? the cost of manufacturing belzupacap sarotalocan, including the potential cost of CMOs that manufacture product for use in our preclinical studies and clinical trials and perform analytical testing, scale-up and other services in connection with our development activities; ?
costs associated with preclinical activities and development activities;
?
costs associated with our intellectual property portfolio;
?
costs related to compliance with regulatory requirements; and
?
allocated expenses for utilities and other facility-related costs.
We expense research and development costs as incurred. Costs for external
development activities are recognized based on an evaluation of the progress to
completion of specific tasks using information provided to us by our vendors.
Payments for these activities are based on the terms of the individual
agreements, which may differ from the pattern of costs incurred, and are
reflected in our financial statements as prepaid or accrued research and
development expenses. We allocate our direct external research and development
costs across the entire belzupacap sarotalocan program. Preclinical expenses
consist of external research and development costs associated with activities to
support our current and future clinical programs, but are not allocated by
specific indications due to the overlap of the potential benefit of those
efforts across the entire belzupacap sarotalocan program.
Research and development activities are central to our business. We expect that
our research and development expenses will increase for the foreseeable future
as we continue clinical development for belzupacap sarotalocan and continue to
discover and develop additional product candidates. If any of our product
candidates enter into later stages of clinical development, they will 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.
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--------------------------------------------------------------------------------General and Administrative Expenses
General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive and finance functions. General and administrative expenses also include professional fees for legal, accounting, auditing, tax and consulting services; travel expenses; and facility-related expenses, which include allocated expenses for rent and maintenance of facilities and other operating costs not included in research and development. We expect that our general and administrative expenses will increase in the near-term as we continue to build a team to support our administrative, accounting and finance, communications, legal and business development efforts. We expect to incur increased expenses associated with being a public company, including costs of accounting, audit, legal, regulatory and tax compliance services; director and officer insurance costs; and investor and public relations costs.
Other Income (Expense)
Our other income (expense) consists of changes in the fair value of our warrant liability, accretion and interest income on marketable securities, loss on disposal of fixed assets, and interest income on our invested cash balances.
Income Taxes
Since our inception, we have not recorded anyU.S. federal or state income tax benefits for the net losses we have incurred in any year or for our earned research and development tax credits, due to the uncertainty of realizing a benefit from those items. As ofDecember 31, 2021 , we had federal gross operating loss carryforwards of approximately$138.7 million which may be available to offset future taxable income, of which$44.2 million begin to expire in 2029 and go through 2037 and$94.5 million do not expire. The state gross operating loss carryforwards of$113.6 million , which may be available to offset future taxable income and which would begin to expire in 2030. As ofDecember 31, 2021 , we had federal and state research and experimentation credit carryforwards of$4.7 million and$1.4 million , respectively, which may be available to offset future income tax liabilities and which would begin to expire in 2029 and 2028, respectively. Due to the degree of uncertainty related to the ultimate use of the deferred tax assets, we have fully reserved these tax benefits, as the determination of the realization of the deferred tax benefits was not determined to be more likely than not.
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,
2022 2021 Change
(in thousands)
Operating expenses:
Research and development $ 9,510 $ 6,632 $ 2,878
General and administrative 4,306 2,169 2,137
Total operating expenses 13,816 8,801 5,015
Loss from operations (13,816 ) (8,801 ) (5,015 )
Other income (expense):
Change in fair value of warrant liability 61 (3 ) 64
Change in fair value of derivative liability - (52 ) 52
Interest income, including amortization of
discount 292 4 288
Other expense (5 ) - (5 )
Total other income (expense) 348 (51 ) 399
Net loss $ (13,468 ) $ (8,852 ) $ (4,616 )
Other comprehensive items:
Unrealized loss on marketable securities (123 ) - (123 )
Total other comprehensive loss (123 ) - (123 )
Net loss and comprehensive loss $ (13,591 ) $ (8,852 ) $ (4,739 )
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Research and Development Expenses
The following table summarizes our research and development expenses for the
three months ended
Three Months Ended
June 30,
2022 2021 Change
(in thousands)
Preclinical $ 472 $ 194 $ 278
Clinical trials 1,115 741 374
Manufacturing development 2,416 2,885 (469 )
Personnel/overhead expenses 5,507 2,812 2,695
Total research and development expenses
Research and development expenses increased to$9.5 million for the three months endedJune 30, 2022 from$6.6 million for the three months endedJune 30, 2021 , primarily due to ongoing preclinical costs, clinical costs for belzupacap sarotalocan, and higher personnel expenses from growing headcount.
General and Administrative Expenses
General and administrative expenses increased to$4.3 million for the three months endedJune 30, 2022 from$2.2 million for the three months endedJune 30, 2021 , primarily driven by personnel expenses, as well as increases in general corporate expenses related to operating as a public company.
Comparison of the Six Months Ended
The following table summarizes our results of operations for the six months
ended
Six Months Ended
June 30,
2022 2021 Change
(in thousands)
Operating expenses:
Research and development $ 17,786 $ 10,817 $ 6,969
General and administrative 8,841 3,911 4,930
Total operating expenses 26,627 14,728 11,899
Loss from operations (26,627 ) (14,728 ) (11,899 )
Other income (expense):
Change in fair value of warrant liability 16 1 15
Change in fair value of derivative liability - (52 ) 52
Interest income, including amortization of
discount 319 3 316
Other expense (11 ) (3 ) (8 ) Total other income (expense) 324 (51 ) 375 Net loss$ (26,303 ) $ (14,779 ) $ (11,524 ) Other comprehensive items: Unrealized loss on marketable securities (128 ) - (128 ) Total other comprehensive loss (128 ) - (128 ) Net loss and comprehensive loss$ (26,431 ) $ (14,779 ) $ (11,652 ) 21
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Research and Development Expenses
The following table summarizes our research and development expenses for the six
months ended
Six Months Ended
June 30,
2022 2021 Change
(in thousands)
Preclinical $ 777 $ 270 $ 507
Clinical trials 2,311 1,491 820
Manufacturing development 4,204 4,211 (7 )
Personnel/overhead expenses 10,494 4,845 5,649
Total research and development expenses
Research and development expenses increased to$17.8 million for the six months endedJune 30, 2022 from$10.8 million for the six months endedJune 30, 2021 , primarily due to ongoing preclinical costs, clinical costs for belzupacap sarotalocan, and higher personnel expenses from growing headcount.
General and Administrative Expenses
General and administrative expenses increased to$8.8 million for the six months endedJune 30, 2022 from$3.9 million for the six months endedJune 30, 2021 , primarily driven by personnel expenses, as well as increases in general corporate expenses related to operating as a public company.
Liquidity and Capital Resources
To date we have funded our operations primarily through the sale of convertible preferred stock, and common stock. ThroughJune 30, 2022 , we have raised an aggregate of approximately$218.9 million of gross proceeds primarily from private placements of our equity and convertible preferred stock and warrants, as well as through the issuance of our common stock. InNovember 2021 , we issued and sold a total of 6,210,000 shares in our IPO of our common stock, including the full exercise of the underwriters' option to purchase additional shares, at a price to the public of$14.00 per share for aggregate gross proceeds of$86.9 million . We received approximately$78.3 million in net proceeds after deducting underwriting discounts, commissions and offering expenses.
Cash Flows
The following table summarizes our cash flows for each of the periods presented:
Six Months Ended
June 30,
2022 2021
(in thousands)
Net cash used in operating activities $ (25,828 ) $ (11,634 )
Net cash used in investing activities (68,939 ) (733 )
Net cash provided by financing activities 326 87,233
Net (decrease) increase in cash, cash equivalents, and restricted cash$ (94,441 ) $ 74,866 Operating Activities During the six months endedJune 30, 2022 , net cash used in operating activities was$25.8 million , primarily due to our net loss of$26.3 million and decrease in accounts payable related to the timing of vendor invoicing and payments, partially offset by the non-cash charge related to stock compensation expense. During the six months endedJune 30, 2021 , net cash used in operating activities was$11.6 million , primarily due to our net loss of$14.8 million offset by an increase in accounts payable related to the timing of vendor invoicing and payments, partially offset by the non-cash charge related to stock compensation expense. 22 --------------------------------------------------------------------------------
Investing Activities
Net cash used in investing activities during the six months endedJune 30, 2022 was$68.9 million due to purchases of marketable securities and purchases of property and equipment offset by maturities of marketable securities.
Net cash used in investing activities during the six months ended
Financing Activities
During the six months ended
During the six months endedJune 30, 2021 , net cash provided by financing activities was$87.2 million from the net proceeds from the sale of the second tranche of the Series D-2 preferred stock, net proceeds from the sale of Series E preferred stock, and proceeds from stock option exercises offset by deferred offering cost payments. Funding Requirements Our plan of operation is to continue implementing our business strategy, continue research and development of belzupacap sarotalocan and any other product candidates we may acquire or develop and continue to expand our research pipeline and our internal research and development capabilities. We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the preclinical activities and clinical trials of our current and future product candidates. In addition, we expect to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or terminate our research and development programs or future commercialization efforts. Our future capital requirements will depend on many factors, including: ?
the scope, timing, progress, costs, and results of discovery, preclinical development, and clinical trials for our current and future product candidates;
?
the number of clinical trials required for regulatory approval of our current and future product candidates;
?
the costs, timing, and outcome of regulatory review of any of our current and future product candidates;
?
the cost of manufacturing clinical and commercial supplies of our current and future product candidates;
?
the costs and timing of future commercialization activities, including manufacturing, marketing, sales, and distribution, for any of our product candidates for which we receive marketing approval;
? 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, including any claims by third parties that we are infringing upon their intellectual property rights; ? our ability to maintain existing, and establish new, strategic collaborations, licensing, or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty, or other payments due under any such agreement; ?
the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;
?
expenses to attract, hire and retain, skilled personnel;
?
the costs of operating as a public company;
?
our ability to establish a commercially viable pricing structure and obtain approval for coverage and adequate reimbursement from third-party and government payers;
?
addressing any potential interruptions or delays resulting from factors related to the ongoing COVID-19 pandemic;
?
the effect of competing technological and market developments; and
?
the extent to which we acquire or invest in businesses, products, and technologies.
A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. As ofJune 30, 2022 , we had cash and cash equivalents and marketable securities of$122.1 million . Based on our research and development plans, we believe that our existing cash and cash equivalents, will be sufficient to fund our operations into 2024. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. 23 -------------------------------------------------------------------------------- Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations from the sale of additional equity or debt financings, or other capital which comes in the form of strategic collaborations, licensing, or other arrangements. In the event that additional financing is required, we may not be able to raise it on terms acceptable to us, or at all. If we raise additional funds through the issuance of equity or convertible preferred stock, it may result in dilution to our existing stockholders. Debt financing or preferred equity financing, if available, may result in increased fixed payment obligations, and the existence of securities with rights that may be senior to those of our common stock. If we incur indebtedness, we could become subject to covenants that would restrict our operations. If we raise funds through strategic collaboration, licensing or other arrangements, we may relinquish significant rights or grant licenses on terms that are not favorable to us. Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets inthe United States and worldwide resulting from the ongoing COVID-19 pandemic and otherwise. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.
Material Cash Requirements
The following table summarizes our contractual obligations and commitments as ofJune 30, 2022 . Payments Due by Period Less than 1 to 3 3 to 5 More than Total 1 Year Years Years 5 Years (in thousands)
Operating lease commitments(1)
53 $ - $ - Total$ 696 $ 643 $ 53 $ - $ - (1)
Amounts in the table above reflect payments due for our lease of office space in
On
Except as disclosed in the table above, we have no long-term debt or finance leases and no material non-cancelable purchase commitments with service providers, as we have generally contracted on a cancelable, purchase-order basis. We enter into contracts in the normal course of business with equipment and reagent vendors, CROs, CMOs and other third parties for clinical trials, preclinical research studies and testing and manufacturing services. These contracts are cancelable by us upon prior notice. Payments due upon cancellation consist only of payments for services provided or expenses incurred, including noncancelable obligations of our service providers, up to the date of cancellation. These payments are not included in the preceding table as the amount and timing of such payments are not known.
There were no material changes to our contractual obligations and commitments
during the six months ended
Critical Accounting Policies and Significant Judgments and Estimates
Our management's discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance withU.S. generally accepted accounting principles, orU.S. GAAP. The preparation of our condensed consolidated financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, costs and expenses and the disclosure of contingent assets and liabilities in our condensed 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 six months endedJune 30, 2022 , there were no material changes to our critical accounting policies from those described in the section titled "Management's Discussion and Analysis of Financial Condition and Operations" included in our Annual Report on Form 10-K for the year endedDecember 31, 2021 , as filed with theSEC . 24 --------------------------------------------------------------------------------
Recent Accounting Pronouncements
We assessed the recent accounting pronouncements for the six months endedJune 30, 2022 and determined no pronouncements have material impact to the condensed consolidated financial statements.
Emerging Growth Company Status
The Jumpstart Our Business Startups Act of 2012, or the JOBS Act, permits that an "emerging growth company" may take advantage of the 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 to use the extended transition period under the JOBS Act. Accordingly, our consolidated financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards. The JOBS Act also exempts us from having to provide an auditor attestation of internal control over financial reporting under Sarbanes-Oxley Act Section 404(b). We will remain an "emerging growth company" until the earliest of: the last day of the fiscal year in which we have more than$1.07 billion in annual revenue; the date we qualify as a "large accelerated filer," with at least$700.0 million of equity securities held by non-affiliates; the issuance, in any three-year period, by us of more than$1.0 billion in non-convertible debt securities; or the last day of the fiscal year ending after the fifth anniversary of our IPO. We are also a "smaller reporting company," meaning that the market value of our stock held by non-affiliates is less than$700 million and our annual revenue was less than$100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than$250 million or (ii) our annual revenue is less than$100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than$700 million . If we are a smaller reporting company at the time we cease to be an EGC, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.
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