TALIS BIOMEDICAL CORPORATION The following discussion and analysis of our financial condition and results of operations should be read together with our audited financial statements and related notes included elsewhere in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the "Risk Factors" section of this Annual Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. You should carefully read the "Risk Factors" section of this Annual Report to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section entitled "Special Note Regarding Forward-Looking Statements."
Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is designed to provide material information relevant to an assessment of our financial condition and results of operations, including an evaluation of the amounts and certainty of cash flows from operations and from outside sources. This section is designed to focus on material events and uncertainties known to management that are reasonably likely to cause reported financial information not to be necessarily indicative of future operating results or of future financial condition. This includes descriptions and amounts of matters that have had a material impact on reported operations, as well as matters that are reasonably likely based on management's assessment to have a material impact on future operations.
Overview
Our primary focus is to transform diagnostic testing through innovative molecular diagnostic products that enable customers to deploy accurate, reliable, low cost and rapid molecular testing at the point-of-care for infectious diseases and other conditions.
We are developing the Talis One system which leverages expertise across
chemistry, biology, engineering and software to create a fully integrated,
cloud-enabled and portable molecular diagnostic solution that customers can
rapidly deploy when and where needed. The Talis One system incorporates core
proprietary technologies into a compact, easy-to-use instrument, that employs
single use test cartridges and software, including a central cloud database,
which are designed to work together to provide levels of testing accuracy
equivalent to a central laboratory. We intend to commercialize the Talis One
system as an integrated solution comprising single use consumables, an
instrument and software. Our commercial strategy will focus on building and
expanding an installed base of Talis One systems to generate revenue from the
purchase of such products. Our first commercial test will be the Talis One
COVID-19 Test System, which is a rapid point-of-care molecular diagnostic to
detect SARS-CoV-2 directly from a patient sample in less than 30 minutes. We are
developing assays for the detection of other respiratory infections that could
be included as a panel test with the Talis One COVID-19 Test System as well as
tests for infections related to women's health and STIs. In
Our products will require marketing authorization from the FDA prior to
commercialization. On
We have invested in automated cartridge manufacturing lines, the first of which began to come on-line in the first quarter of 2021. We are currently validating the performance of those automated cartridge manufacturing lines. These manufacturing lines are located at our contract manufacturers' sites and are operating by our contract manufacturing partners. We have also received components to build 5,000 Talis One instruments from our instrument contract manufacturer.
We outsource essentially all of our manufacturing. Design work, prototyping and pilot manufacturing are performed in-house before outsourcing to third party contract manufacturers. Our outsourced production strategy is intended to
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drive rapid scalability. Certain of our suppliers of components and materials are single source suppliers. To support our anticipated commercial launch, we have invested in automated cartridge manufacturing production lines for our Talis One cartridges. Those assets deemed to have an alternative future use have been capitalized as property and equipment while those assets determine to not have an alternative future use have been expensed.
Since our inception in 2013, we have devoted substantially all our efforts to
research and development activities, manufacturing capabilities, raising
capital, building our intellectual property portfolio and providing selling,
general and administrative support for these operations. We have principally
financed our operations through the issuance and sale of shares of our
convertible preferred stock to outside investors in private equity financings as
well as the issuance of convertible promissory notes and receipts from
government grants. Prior to our initial public offering, we received
We have incurred recurring losses since our inception, including net losses of
•
continue the research and development of our platform and assays for additional diseases;
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initiate clinical trials for, or additional preclinical development of, our Talis One system;
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further develop and refine the manufacturing processes for our Talis One system and potentially the design of our Talis One system;
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change or add manufacturers or suppliers of materials used for our Talis One system;
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seek marketing authorizations;
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seek to identify and validate diagnostic assays for other disease states;
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obtain, maintain, protect and enforce our intellectual property portfolio;
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hire and deploy a sales force;
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seek to attract and retain new and existing skilled personnel;
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create additional infrastructure to support our operations as a public company and incur increased legal, accounting, investor relations and other expenses; and
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experience delays or encounter issues with any of the above.
In addition, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. As a result, we will need substantial additional funding to support our operating activities. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operating activities through a combination of equity offerings, debt and grant revenue. Adequate funding may not be available to us on acceptable terms, or at all.
If we are unable to obtain funding, we will be forced to delay, reduce or eliminate some or all of our research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect our business prospects, or we may be unable to continue operations. Although we continue to pursue these plans, there is no assurance that we will be successful in obtaining sufficient funding on terms acceptable to us to fund continuing operations, if at all.
As of
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collaborations or partnerships with other companies. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our research efforts for our assays and development and manufacturing activities. We may not be able to raise additional capital on terms acceptable to us, or at all. Any failure to raise capital as and when needed would compromise our ability to execute on our business plan and may cause us to significantly delay or scale back our operations.
On
COVID-19 pandemic
Since it was reported to have surfaced in
We expect that COVID-19 precautions will directly or indirectly impact the timeline for some of our planned clinical trials for our non-COVID-19 related products in development, and we are continuing to assess the potential impact of the COVID-19 pandemic on our current and future business and operations, including our expenses and clinical trials, as well as on our industry and the healthcare system.
As a result of the outbreak, many companies have experienced disruptions in their operations and in markets served. We are considered an essential business and therefore the impact to our operations has been limited. To date, we have initiated some and may take additional temporary precautionary measures intended to help ensure our employees' well-being and minimize business disruption. For the safety of our employees and their families, we have temporarily reduced the presence of our employees in our labs. Certain of our third-party service providers have also experienced shutdowns or other business disruptions. We are continuing to assess the impact of the COVID-19 pandemic on our current and future business and operations, including our expenses and planned clinical trial and other development timelines, as well as on our industry and the healthcare system.
As a result of the COVID-19 pandemic, or similar pandemics and outbreaks, we have and may in the future experience severe disruptions, including:
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interruption of or delays in receiving products and supplies from the third parties we rely on to, among other things, manufacture components of our instruments, due to staffing shortages, production slowdowns or stoppages and disruptions in delivery systems, which may impair our ability to sell our products and consumables;
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limitations on our business operations by the local, state, or federal government that could impact our ability to sell or deliver our instruments and consumables;
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delays in customers' purchasing decisions and negotiations with customers and potential customers;
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business disruptions caused by workplace, laboratory and office closures and an increased reliance on employees working from home, travel limitations, cyber security and data accessibility limits, or communication or mass transit disruptions; and
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•
limitations on employee resources that would otherwise be focused on the conduct of our activities, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people.
Three vaccines for COVID-19 have been authorized for emergency use by the FDA as
of
Components of our results of operations
Revenue
To date, we have not generated any revenue from sales of our Talis One system. We expect to generate revenue in the future from product sales of our Talis One instruments and single use cartridges. Our business model is focused on driving the adoption of the Talis One system. Customers would gain access to our instrument via a direct sales model or a reagent rental model. Under direct platform sales, our customers would directly purchase our Talis One instrument and make subsequent independent purchases of our cartridges. This would include, during our early customer engagements, a fully paid workflow license to practice the desired workflow(s) in a specific field of use. In addition, we would also offer platform support to the extent customers require further system and workflow optimization following platform implementation. When we place a system under a reagent rental agreement, we plan to install equipment in the customer's facility without a fee and the customer agrees to purchase our cartridges at a stated price over the term of the reagent rental agreement. Some of these agreements could include minimum purchase commitments. Under a reagent rental model, we plan to retain title to the equipment and such title is transferred to the customer at the conclusion of the initial arrangement. The cost of the instrument under the agreement is expected to be recovered in the fees charged for consumables, to the extent sold, over the term of the agreement.
We cannot predict when, or to what extent we will generate revenue from the commercialization and sale of our system. While we have obtained EUA for our Talis One COVID-19 Test System, we have not generated any revenue from the sales of such system. We rely, and expect to continue to rely, on third parties for the manufacture of the Talis One system and our tests, as well as for commercial supply. Our contract manufacturers may not have the ability to produce quality product at scale to meet commercial demand which could delay commercialization efforts. Further, we may not succeed in maintaining regulatory approval for the Talis One COVID-19 Test System or obtaining regulatory approval for other products. Growth and predictability of recurring revenue is impacted by the timing of commercialization and expansion of our products. It is our goal and expectation that recurring revenue will grow over time, both in absolute dollars and as a percentage of our revenue.
Grant revenue
Through
In
Under the
In
These grants are not in the scope of the contracts with customers accounting guidance as the government entities and/or government-sponsored entities are not customers under the agreements.
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Operating expenses
Research and development expenses
Research and development expenses consist primarily of internal and external costs incurred for our research activities, the development of our platform, investment in manufacturing capabilities as well as costs incurred pursuant to our government grants and include:
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salaries, benefits and other related costs, including stock-based compensation expense, for personnel engaged in research and development functions;
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the cost of laboratory supplies and developing and manufacturing of our platform;
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contract services, other outside costs and costs to develop our technology capabilities;
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facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs;
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cost of outside consultants, including their fees and related travel expenses, engaged in research and development functions;
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expenses related to regulatory affairs; and
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fees related to our scientific advisory board.
Until future commercialization is considered probable and the future economic benefit is expected to be realized, we do not capitalize pre-launch inventory costs prior to completion of marketing authorization unless the regulatory review process has progressed to a point that objective and persuasive evidence of regulatory approval is sufficiently probable, and future economic benefit can be asserted. We record such costs to research and development costs, or if used in marketing evaluations, record such cost to selling, general and administrative expense. A number of factors are taken into consideration, based on management's judgment, including the current status in the regulatory approval process, potential impediments to the approval process, anticipated research and development initiatives and risk of technical feasibility, viability of commercialization and marketplace trends.
Prior to receiving an EUA and until future commercialization is considered probable, costs of property and equipment related to scaling up our manufacturing capacity for commercial launch are recorded to research and development expense when the asset does not have an alternative future use.
Research and development activities are central to our business model. We focus our research and development efforts on the Talis One COVID-19 Test System and the development of respiratory panels and tests for infections related to women's and sexual health. We expect to continue to incur significant research and development expenses in the future as we continue the research and development of our platform and assays for other infectious diseases and disease states, initiate clinical trials for future tests, further develop and refine the manufacturing processes for our platform, and continue commercialization efforts. There are numerous factors associated with the successful commercialization of any assay we may develop in the future for other diseases or disease states, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development.
Selling, general and administrative expenses
Selling, general and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive, finance, sales, product management, corporate and business development and administrative functions. Selling, general and administrative expenses also include professional fees for legal, patent, accounting, information technology, auditing, tax and consulting services, travel expenses and facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.
Other income (expense)
Other income (expense), net consists primarily of interest income on cash deposits held at financial institutions, gains and losses on holdings invested in money market funds, and unrealized and realized foreign exchange gains and losses.
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Results of operations
Comparison for the twelve months ended
The following table summarizes our results of operations (in thousands):
Twelve Months Ended
December 31,
(in thousands) 2021 2020 Change
Grant revenue $ 8,193 $ 10,938 $ (2,745 )
Operating expenses:
Research and development 157,591 89,019 68,572Selling, general and administrative 42,418 13,103 29,315 Total operating expenses
200,009 102,122 97,887
Loss from operations (191,816 ) (91,184 ) (100,632 )
Other (expense) income, net (220 ) 54 (274 )
Net loss and comprehensive loss
Grant revenue
Our revenue for the twelve months ended
Research and development expenses
Substantially all of our research and development expenses incurred for the
twelve months ended
Research and development expenses were
Research and development expenses of
The build-out of our automated consumable manufacturing lines, which began in
the middle of 2020, has substantially concluded as of
Selling, general and administrative expenses
Selling, general and administrative expenses were
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Liquidity and capital resources
Sources of liquidity
Through
On
In
As of
On
Future funding requirements
We do not have any commercial-scale manufacturing facilities and expect to rely on third parties to manufacture the Talis One system and related cartridges. We have entered into, and expect to enter into additional, agreements with contract manufacturers to support our manufacturing scale up. We have engaged a third-party logistics provider to manage the movement of materials between suppliers and contract manufacturers and for finished goods warehousing.
Until we can generate a sufficient amount of revenue from the commercialization of Talis One system and third party products that we sell, including the Antigen Tests, if ever, we expect to finance our future cash needs through public or private equity offerings or debt financings.
To date, our primary uses of cash have been to fund operating expenses, primarily research and development expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses. We have made a prepayment to the landlord of one of our leased properties in advance of commencement. We currently have no other ongoing material financing commitments, such as other lines of credit or guarantees. We expect to incur significant research and development and commercialization expenses related to program sales, marketing, manufacturing and distribution to the extent that such sales, marketing and distribution are not the responsibility of any future collaborators. We expect to incur additional costs associated with operating as a public company. Accordingly, we may choose to obtain additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.
Since our inception, we have incurred significant losses and negative cash flows
from operations. We have an accumulated deficit of
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potential additional collaboration proceeds prior to achieving commercialization of our products. Our ability to continue as a going concern is dependent upon our ability to successfully secure sources of financing and ultimately achieve profitable operations.
We have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of the Talis One system, we are unable to estimate the exact amount of our operating capital requirements. Our future capital requirements will depend on many factors, including:
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our ability to maintain an EUA for our Talis One COVID-19 Test System;
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our ability to receive, and the timing of receipt of future regulatory approval for other products;
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our ability to manufacture the Talis One COVID-19 Test System at scale to meet market demand;
•
the effectiveness and availability of the three vaccines that were authorized as
of
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the amount of capital, and related timing of payments, required to build sufficient inventory of our Talis One system and test cartridges in advance of and during commercial launch;
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the costs and timing of future commercialization activities, including manufacturing, marketing, sales and distribution, for the Talis One system;
•
limitations of, or interruptions in, the quality or quantity of materials from our third party suppliers;
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our ability to implement an effective manufacturing, marketing and commercialization operation;
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the scope, progress, results and costs of our ongoing and planned operations;
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the costs associated with expanding our operations;
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the number and development requirements of assays for other diseases or disease states that we may pursue;
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intervention, interruptions or recalls by government or regulatory agencies;
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enhancements and disruptive advances in the diagnostic testing industry;
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our estimates and forecasts of the market size addressable by our Talis One system;
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security breaches, data losses or other disruptions affecting our information systems;
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the regulatory and political landscape upon the launch of our commercialization of the Talis One system;
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the revenue, if any, received from commercial sales of our products if approved, including additional working capital requirements if we pursue a reagent rental model for our Talis One instrument, or from commercial sales of third party products, including the Antigen Tests;
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the costs to defend any shareholder suits or other third party litigation;
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our ability to establish strategic collaborations; and
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the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims.
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Cash flows
The following table summarizes our cash flows for each of the periods presented
(in thousands):
Year Ended December 31,
2021 2020
(in thousands)
Net cash used in operating activities $ (171,384 ) $ (87,024 )
Net cash used in investing activities (2,866 ) (8,201 )
Net cash provided by financing activities 234,429 246,754
Net increase in cash, cash equivalents and
restricted cash $ 60,179 $ 151,529
Operating activities
During the year ended
During the year ended
Investing activities
During the years ended
Financing activities
During the year ended
During the year ended
Contractual obligations Leases
See Note 6. Commitments and contingencies, to our audited financial statements
included in Item 8 of this Annual Report for a summary of our operating lease
commitments as of
In
Manufacturing production lines
In 2020, the Company began developing production lines to automate the production of its Talis One cartridges for the COVID-19 assay with the intention to scale up its manufacturing capabilities to meet demand. These commitments represent firm commitments relating to the scale-up of manufacturing capacity for Talis One cartridges, primarily attributed to investments in production lines. We expect to incur commitments, in the normal
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course of business, related to the scale up of production lines of
Purchase commitments
Purchase obligations include agreements to purchase goods or services that are
enforceable and legally binding to us and that specify all significant terms.
Purchase obligations exclude agreements that are cancelable without penalty.
Recognition of purchase obligations occurs when products or services are
delivered. We have purchase commitments of
Apart from the contracts with payment commitments that we have reflected above, we have entered into other contracts in the normal course of business with certain contract manufacturing organizations and other third parties for manufacturing services. Payments due upon cancellation consist only of payments for services provided and expenses incurred, including non-cancelable obligations of our service providers, up to the date of cancellation.
Critical accounting policies and significant judgments and estimates
This MD&A is based on our financial statements, which have been prepared in
accordance with generally accepted accounting principles in
While our significant accounting policies are described in greater detail in Note 2 to our financial statements appearing within Item 8 of this Annual Report, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.
Research and development expenses
Capitalizing pre-launch inventory costs will not occur prior to obtaining an EUA or other FDA marketing authorization unless the regulatory review process has progressed to a point that objective and persuasive evidence of regulatory approval is sufficiently probable, commercialization is considered probable and future economic benefit can be asserted. We have incurred significant costs related to the scale-up of manufacturing activities for commercialization. We record such costs as research and development expenses, or if used in marketing evaluations costs are recorded as selling, general and administrative expenses. A number of factors are taken into consideration, based on our management's judgment, including the current status in the regulatory approval process, potential impediments to the approval process, anticipated research and development initiatives and risk of technical feasibility, viability of commercialization and marketplace trends.
All materials, equipment, and external consulting costs associated with developing aspects of the production line that do not have an alternative future use are expensed as research and development costs until regulatory approval or clearance is obtained, and commercialization is probable. Materials, equipment, and external consulting costs associated with developing aspects of the production line that are deemed to have an alternative future use are capitalized as property and equipment, assessed for impairment and depreciated over their related useful lives. These research and development costs, including expenditures for property and equipment with no alternative future use, are classified as operating cash outflows within our statements of cash flows.
For certain research and development services where we have not yet been invoiced or otherwise notified of actual cost from the third-party contracted service providers, we are required to estimate the extent of the services that have been performed on our behalf and the associated costs incurred at each reporting period. The majority of our service providers invoice us monthly in arrears for services performed. We make estimates of our accrued expenses as of each balance sheet date in our financial statements based on facts and circumstances at that time. We periodically confirm the accuracy of our estimates with the service providers and make adjustments if necessary.
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Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period. To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses.
Stock-based compensation
We measure stock-based compensation expense for stock options and restricted stock units (RSUs) granted to our employees and directors on the date of grant and recognize the corresponding compensation expense of those awards over the requisite service period, which is generally the vesting period of the respective award, on a straight-line basis. We also recognize stock-based compensation expense associated with our employee stock purchase plan (ESPP) based on the grant date fair value required under authoritative guidance. Forfeitures are recorded as they occur.
From time to time, we may grant stock options to employees, including executive officers, that vest upon the satisfaction of both service-based and performance-based vesting conditions. We recognize stock-based compensation over the requisite service period using the accelerated attribution method for awards with a performance condition if the performance condition is deemed probable of being met.
We estimate the fair value of stock options granted to our employees and directors on the grant date, and the resulting stock-based compensation expense, using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires the use of subjective assumptions which determine the fair value of stock option awards. These assumptions include:
•
Expected term. The expected term of options represents the period of time that options are expected to be outstanding. Our historical stock option exercise experience does not provide a reasonable basis upon which to estimate an expected term due to lack of sufficient data. We estimate the expected term by using the simplified method, which calculates the expected term as the average of the time-to-vesting and the contractual life of the options.
•
Expected volatility. Prior to our IPO, there has been no public market for our common stock, and as a result we do not have any trading history of our common stock, expected volatility is estimated based on the average volatility for comparable publicly traded diagnostic companies over a period equal to the expected term of the stock option grants. The comparable companies are chosen based on their similar size, stage in the life cycle or area of specialty.
•
Risk-free interest rate. The risk-free interest rate is based on the
•
Expected dividend yield. We have never paid dividends on our common stock and have no plans to pay dividends on our common stock. Therefore, we use an expected dividend yield of zero.
Following the closing of our IPO, we determine the fair market value of our common stock based on its closing price as reported on the date of grant on the primary stock exchange on which our common stock is traded.
Prior to our IPO, there has been no public market for our common stock. As such,
the estimated fair value of the common stock underlying our stock options was
determined by our board of directors, with input from management, considering
our most recently available third-party valuations of common stock and our board
of directors' assessment of additional objective and subjective factors that it
believed were relevant, and factors that may have changed from the date of the
most recent valuation through the date of the grant, which intended all options
granted to be exercisable at a price per share not less than the per share fair
value of our common stock underlying those options on the date of grant. We
believe that our board of directors has the relevant experience and expertise to
determine the fair value of our common stock. Prior to our IPO, given the
absence of a public trading market for our common stock, the valuations of our
common stock were determined in accordance with the guidelines outlined in the
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The assumptions we used in the pre-IPO valuation model were based on future expectations combined with management judgment. In the absence of a public trading market, our board of directors with input from management exercised significant judgment and considered numerous objective and subjective factors to determine the fair value of our common stock as of the date of each option grant, including the following factors:
•
contemporaneous independent valuations performed at periodic intervals by an independent third-party valuation firm;
•
the prices at which we sold shares of preferred stock and the superior rights and preferences of the preferred stock relative to our common stock at the time of each grant;
•
the progress of our research and development programs, including the status and results of preclinical studies for our platform;
•
our stage of development and commercialization and our business strategy;
•
external market conditions affecting the diagnostics industry and trends within the diagnostics industry;
•
the lack of an active public market for our common stock; and
•
the likelihood of achieving a liquidity event, such as an initial public offering or sale of our company in light of prevailing market conditions.
In
Leases
Lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the remaining lease term. The present value of future lease payments are discounted using the interest rate implicit in lease contracts if that rate is readily determinable; otherwise we utilize our incremental borrowing rate (IBR), which reflects the fixed rate at which we could borrow on a collateralized basis over a similar term, the amount of the lease payments in a similar economic environment. After lease commencement and the establishment of a right-to-use asset and operating lease liability, lease expense is recorded on a straight-line basis over the lease term.
Recoverability of long-lived assets
We review the carrying amount of our long-lived assets, including property and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of an asset or an asset group may not be fully recoverable. If indicators of impairment exist, an impairment loss would be recognized when the estimated undiscounted future cash flows expected to result from the use of the asset or asset group and its eventual disposition are less than its carrying amount. The impairment charge is determined based upon the excess of the carrying value of the asset over its estimated fair value, with estimated fair value determined based upon an estimate of discounted future cash flows or other appropriate measures of estimated fair value. For purposes of recognition of impairment for long-lived assets, we group assets and liabilities at the lowest level for which cash flows are separately identifiable.
Recently issued accounting pronouncements
A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our audited financial statements included within Item 8 of this Annual Report.
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Emerging growth company status
In
In addition, as an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:
•
reduced disclosure about the compensation paid to our executive officers;
•
not being required to submit to our stockholders' advisory votes on executive compensation or golden parachute arrangements;
•
an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act; and
•
an exemption from new or revised financial accounting standards until they would
apply to private companies and from compliance with any new requirements adopted
by the
We may take advantage of these exemptions for up to the last day of the fiscal
year ending after the fifth anniversary of our initial public offering or such
earlier time that we are no longer an emerging growth company. We would cease to
be an emerging growth company on the date that is the earliest of (1) the last
day of the fiscal year in which we have total annual gross revenues of
We are also a "smaller reporting company" meaning that the market value of our
stock held by non-affiliates is less than
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