For the quarterly period ended September 30, 2021
For the transition period from _______ to _______
Commission File Number: 001-37798
Selecta Biosciences, Inc.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction
of incorporation or organization)
(I.R.S. Employer Identification No.)
65 Grove Street, Watertown, MA
(Address of principal executive offices)
(Zip Code)
(617) 923-1400
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.0001 par value per shareSELBThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerýSmaller reporting companyý
Emerging growth companyý
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ý
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No ý
As of November 5, 2021, the registrant had 116,648,919 shares of common stock, par value $0.0001 per share, outstanding.

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


This Quarterly Report on Form 10-Q, or the Quarterly Report, contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, business strategy, prospective products, product approvals, research and development costs, timing and likelihood of success, the plans and objectives of management for future operations and future results of anticipated products, the impact of the COVID-19 pandemic on our business and operations and our future financial results, and the period over which we estimate our existing cash and cash equivalents will be sufficient to fund our future operating expenses and capital expenditure requirements are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential”, or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including the factors described under the sections in this Quarterly Report titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as the following:
our status as a development-stage company and our expectation to incur losses in the future;
our future capital needs and our need to raise additional funds;
our ability to build a pipeline of product candidates and develop and commercialize such pipeline;
our unproven approach to therapeutic intervention;
our ability to enroll patients in clinical trials, timely and successfully complete those trials and receive necessary regulatory approvals;
our ability to access manufacturing facilities and to receive or manufacture sufficient quantities of our product candidates;
our ability to maintain our existing or future collaborations or licenses;
the continuing impact of the COVID-19 pandemic on our operations, the continuity of our business, including our preclinical studies and clinical trials, and general economic conditions;
our ability to protect and enforce our intellectual property rights;
federal, state, and foreign regulatory requirements, including FDA regulation of our product candidates;
our ability to obtain and retain key executives and attract and retain qualified personnel;
developments relating to our competitors and our industry, including the impact of government regulation; and
our ability to successfully manage our growth.
Moreover, we operate in an evolving environment. New risks and uncertainties may emerge from time to time, and it is not possible for management to predict all risk and uncertainties.
You should read this Quarterly Report and the documents that we reference in this Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

Item 1. Financial Statements

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

 September 30,December 31,
Current assets:  
Cash and cash equivalents$114,645 $138,685 
Marketable securities24,018  
Accounts receivable7,324 7,224 
Prepaid expenses and other current assets5,781 5,434 
Total current assets151,768 151,343 
Non-current assets:
Property and equipment, net1,807 1,395 
Right-of-use asset, net10,117 10,948 
Long-term restricted cash1,379 1,379 
Other assets91 370 
Total assets$167,162 $165,435 
Liabilities and stockholders’ (deficit) equity   
Current liabilities:  
Accounts payable$1,593 $443 
Accrued expenses10,742 8,146 
Loan payable4,125  
Lease liability1,013 908 
Income taxes payable15,828  
Deferred revenue62,315 72,050 
Total current liabilities95,616 81,547 
Non-current liabilities:
Loan payable, net of current portion21,304 24,793 
Lease liability8,873 9,647 
Deferred revenue20,057 38,746 
Warrant liabilities40,043 28,708 
Total liabilities185,893 183,441 
Commitments and contingencies (Note 17)
Stockholders’ (deficit) equity:  
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding at September 30, 2021 and December 31, 2020
Common stock, $0.0001 par value; 200,000,000 shares authorized; 115,443,500 and 108,071,249 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively
12 11 
Additional paid-in capital428,371 391,175 
Accumulated deficit(442,555)(404,629)
Accumulated other comprehensive loss(4,559)(4,563)
Total stockholders’ (deficit) equity (18,731)(18,006)
Total liabilities and stockholders’ (deficit) equity $167,162 $165,435 

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

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

 Three Months Ended
September 30,
Nine Months Ended
September 30,
Grant and collaboration revenue$24,427 $4,646 $55,140 $4,646 
Operating expenses:
Research and development20,951 13,960 48,418 39,414 
General and administrative5,445 4,420 15,397 14,155 
Total operating expenses26,396 18,380 63,815 53,569 
Operating loss(1,969)(13,734)(8,675)(48,923)
Investment income11 4 35 257 
Loss on extinguishment of debt (461) (461)
Foreign currency transaction, net2 43 (5)83 
Interest expense(711)(365)(2,133)(843)
Change in fair value of warrant liabilities592 4,779 (11,335)(3,606)
Other income, net9 5 15 63 
Loss before income taxes(2,066)(9,729)(22,098)(53,430)
Income tax expense(15,828) (15,828) 
Net loss$(17,894)$(9,729)$(37,926)$(53,430)
Other comprehensive income (loss):
Foreign currency translation adjustment(1)(32)5 (61)
Unrealized loss on marketable securities(1) (1) 
Total comprehensive loss$(17,896)$(9,761)$(37,922)$(53,491)
Net loss per share:
Basic and diluted$(0.16)$(0.09)$(0.34)$(0.54)
Weighted average common shares outstanding:
Basic and diluted115,169,949 105,325,788 113,161,622 98,968,359 

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

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

   Additional otherStockholders’
 Common stockpaid-inAccumulatedcomprehensive(Deficit)
Balance at December 31, 2020108,071,249 $11 $391,175 $(404,629)$(4,563)$(18,006)
Issuance of common stock under Employee Stock Purchase Plan34,696 — 72 — — 72 
Issuance of common stock upon exercise of options153,278 — 244 — — 244 
Issuance of vested restricted stock units10,937 — — — —  
Issuance of common stock through at-the-market offering, net4,706,844 — 20,943 — — 20,943 
Stock-based compensation expense— — 1,780 — — 1,780 
Currency translation adjustment— — — — (6)(6)
Unrealized (losses) on marketable securities— — — — (1)(1)
Net loss— — — (24,597)— (24,597)
Balance at March 31, 2021112,977,004 $11 $414,214 $(429,226)$(4,570)$(19,571)
Issuance of common stock upon exercise of options242,278 — 425 — — 425 
Issuance of vested restricted stock units10,938 — — — —  
Issuance of common stock through at-the-market offering, net1,849,072 1 8,562 — — 8,563 
Stock-based compensation expense— — 1,783 — — 1,783 
Currency translation adjustment— — — — 12 12 
Unrealized gain on marketable securities— — — — 1 1 
Net income— — — 4,565 — 4,565 
Balance at June 30, 2021115,079,292 $12 $424,984 $(424,661)$(4,557)$(4,222)
Issuance of common stock under Employee Stock Purchase Plan24,098 — 89 — — 89 
Issuance of common stock upon exercise of options1,936 — 5 — — 5 
Issuance of vested restricted stock units10,937 — — — —  
Issuance of common stock through at-the-market offering, net327,237 — 1,389 — — 1,389 
Stock-based compensation expense— — 1,904 — — 1,904 
Currency translation adjustment— — — — (1)(1)
Unrealized (losses) on marketable securities— — — — (1)(1)
Net loss— — — (17,894)— (17,894)
Balance at September 30, 2021
115,443,500 $12 $428,371 $(442,555)$(4,559)$(18,731)

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

Selecta Biosciences, Inc. and Subsidiaries
Consolidated Statements of Changes in Stockholders’ (Deficit) Equity
(Amounts in thousands, except share data)
   Additional otherStockholders’
 Common stockpaid-inAccumulatedcomprehensive(Deficit)
Balance at December 31, 201986,325,547 $9 $348,664 $(335,753)$(4,523)$8,397 
Issuance of common stock under Employee Stock Purchase Plan78,583 — 114 — — 114 
Issuance of common stock upon exercise of options5,128 — 3 — — 3 
Issuance of vested restricted stock units10,937 — — — —  
Issuance of common stock through at-the-market offering, net598,977 — 1,141 — — 1,141 
Other financing fees— — (147)— — (147)
Stock-based compensation expense— — 1,409 — — 1,409 
Currency translation adjustment— — — — (60)(60)
Net loss— — — (19,620)— (19,620)
Balance at March 31, 202087,019,172 $9 $351,184 $(355,373)$(4,583)$(8,763)
Issuance of common stock upon exercise of options37,500 — 98 — — 98 
Issuance of vested restricted stock units10,938 — — — —  
Issuance of common stock through at-the-market offering, net470,509 — 967 — — 967 
Issuance of common stock upon exercise of pre-funded warrants8,342,128 1 — — — 1 
Issuance of common stock upon exercise of common warrants4,967,563 — 17,214 — — 17,214 
Stock-based compensation expense— — 1,481 — — 1,481 
Currency translation adjustment— — — — 31 31 
Net loss— — — (24,081)— (24,081)
Balance at June 30, 2020100,847,810 $10 $370,944 $(379,454)$(4,552)$(13,052)
Issuance of common stock under Employee Stock Purchase Plan31,629 — 70 — — 70 
Issuance of vested restricted stock units60,937 — — — —  
Issuance of common stock through private placement5,416,390 1 10,268 — — 10,269 
Issuance of common warrants with long-term debt, net— — 444 — — 444 
Issuance of common stock upon exercise of common warrants879,210 — 3,485 — — 3,485 
Other financing fees— — (133)— — (133)
Stock-based compensation expense— — 1,296 — — 1,296 
Currency translation adjustment— — — — (32)(32)
Net loss— — — (9,729)— (9,729)
Balance at September 30, 2020107,235,976 $11 $386,374 $(389,183)$(4,584)$(7,382)

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

Selecta Biosciences, Inc. and Subsidiaries 
Consolidated Statements of Cash Flows
(Amounts in thousands)
 Nine Months Ended
September 30,
Cash flows from operating activities
Net loss$(37,926)$(53,430)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization851 490 
Amortization of premiums and discounts on marketable securities37  
Non-cash lease expense832 861 
Loss on disposal of property and equipment
Stock-based compensation expense5,467 4,186 
Non-cash interest expense800 406 
Warrant liabilities revaluation11,335 3,606 
Loss on extinguishment of debt 461 
Changes in operating assets and liabilities:
Accounts receivable(100)(7,626)
Prepaid expenses, deposits and other assets(510)(6,656)
Accounts payable1,148 (29)
Income taxes payable15,828  
Deferred revenue(28,424)99,512 
Accrued expenses and other liabilities1,740 389 
                    Net cash (used in) provided by operating activities(28,922)42,131 
Cash flows from investing activities
Proceeds from maturities of marketable securities6,400  
Payment made for investments(2,000) 
Purchases of marketable securities(30,455) 
Purchases of property and equipment(807)(625)
Proceeds from the sale of property and equipment 50 
                    Net cash used in investing activities(26,862)(575)
Cash flows from financing activities
Proceeds from issuance of long-term debt, net of expenses 24,838 
Repayments of principal on outstanding debt (19,313)
Net proceeds from issuance of common stock- at-the-market offering30,906 2,137 
Net proceeds from issuance of common stock- private placement 10,269 
Issuance costs paid for December 2019 financing (4,381)
Other financing fees (192)
Proceeds from exercise of pre-funded and common warrants 978 
Proceeds from exercise of stock options674 101 
Proceeds from issuance of common stock under Employee Stock Purchase Plan161 184 
                    Net cash provided by financing activities31,741 14,621 
Effect of exchange rate changes on cash3 (88)
Net change in cash, cash equivalents, and restricted cash(24,040)56,089 
Cash, cash equivalents, and restricted cash at beginning of period140,064 91,551 
Cash, cash equivalents, and restricted cash at end of period$116,024 $147,640 
Supplement cash flow information
Cash paid for interest$1,503 $519 
Noncash investing and financing activities
Cashless warrant exercise$ $18,228 
Reclassification of warrant liability to equity upon exercise of warrants$ $1,494 
Fair value of warrants issued in connection with issuance of long-term debt$ $444 
Purchase of property and equipment not yet paid$17 $17 
Equity offering costs in accrued liabilities$11 $117 
Unrealized (losses) on marketable securities$(1)$ 
Debt issuance costs in accrued liabilities$ $100 
The accompanying notes are an integral part of these unaudited consolidated financial statements.

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

1. Nature of the Business and Basis of Presentation
Selecta Biosciences, Inc., or the Company, was incorporated in Delaware on December 10, 2007, and is based in Watertown, Massachusetts. The Company is a clinical-stage biopharmaceutical company leveraging its ImmTOR™ immune tolerance platform with the goals of amplifying the efficacy of biologics, including enabling the re-dosing of life-saving gene therapies, and restoring self-tolerance in autoimmune diseases. The Company’s ImmTOR platform encapsulates rapamycin, also known as sirolimus, an immunomodulator, in biodegradable nanoparticles and is designed to induce antigen-specific immune tolerance. The Company believes ImmTOR has the potential to enhance the efficacy without compromising the safety of biologic therapies, improve product candidates under development, and enable novel therapeutic modalities. Since inception, the Company has devoted its efforts principally to research and development of its technology and product candidates, recruiting management and technical staff, acquiring operating assets, and raising capital.
The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, new technological innovations, protection of proprietary technology, dependence on key personnel, compliance with government regulations and the need to obtain additional financing. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance-reporting capabilities.
The Company’s product candidates are in development. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained, or maintained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees and consultants.
Unaudited Interim Financial Information
The accompanying unaudited consolidated financial statements for the three and nine months ended September 30, 2021 and 2020 have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC, for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, have been condensed or omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K that was filed with the SEC on March 12, 2021. The unaudited interim financial statements have been prepared on the same basis as the audited consolidated financial statements. In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments that are necessary for a fair statement of the Company’s financial position as of September 30, 2021, the consolidated results of operations for the three and nine months ended September 30, 2021, and cash flows for the nine months ended September 30, 2021. Such adjustments are of a normal and recurring nature. The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2021.
Liquidity and Management’s Plan
The future success of the Company is dependent on its ability to develop its product candidates and ultimately upon its ability to attain and sustain profitable operations. The Company is subject to a number of risks similar to other early-stage life science companies, including, but not limited to, successful development of its product candidates, raising additional capital with favorable terms, protection of proprietary technology and market acceptance of any approved future products. The successful development of product candidates requires substantial working capital, which may not be available to the Company on favorable terms or at all.
To date, the Company has financed its operations primarily through the initial public offering of its common stock, private placements of its common stock, issuances of common and preferred stock, debt, research grants and research collaborations. The Company currently has no source of product revenue, and it does not expect to generate product revenue for the foreseeable future. To date, all of the Company’s revenue has been collaboration and grant revenue. The Company has devoted substantially all of its financial resources and efforts to developing its ImmTOR platform, identifying potential product

candidates and conducting preclinical studies and clinical trials. The Company is in the early stages of development of its product candidates, and it has not completed development of any ImmTOR-enabled therapies.
As of September 30, 2021, the Company’s cash, cash equivalents, restricted cash and marketable securities were $140.0 million, of which $1.4 million was restricted cash related to lease commitments and $0.3 million was held by its Russian subsidiary designated solely for use in its operations. The Company believes the cash, cash equivalents, restricted cash and marketable securities as of September 30, 2021 will enable it to fund its operating expenses and capital expenditure requirements for at least twelve months from the issuance of these financial statements. As of September 30, 2021, the Company had an accumulated deficit of $442.6 million. The Company anticipates operating losses to continue for the foreseeable future due to, among other things, costs related to research and development of its product candidates and its administrative organization. The Company will require substantial additional financing to fund its operations and to continue to execute its strategy, and the Company intends to pursue a range of options to secure additional capital.
At this time, any impact of COVID-19 on the Company’s business, revenues, results of operations and financial condition will largely depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the pandemic, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions, supply chain disruptions, the ultimate impact on financial markets and the global economy, and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.
Guarantees and Indemnifications
As permitted under Delaware law, the Company indemnifies its officers, directors, consultants and employees for certain events or occurrences that happen by reason of the relationship with, or position held at, the Company. Through September 30, 2021, the Company had not experienced any losses related to these indemnification obligations, and no claims were outstanding. The Company does not expect significant claims related to these indemnification obligations and, consequently, concluded that the fair value of these obligations is negligible, and no related reserves were established.

2. Summary of Significant Accounting Policies
The Company disclosed its significant accounting policies in Note 2 – Summary of Significant Accounting Policies included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. There have been no material changes previously disclosed, with the exception of the matters discussed in recent accounting pronouncements.
Recent Accounting Pronouncements
Recently Adopted
In October 2020, the FASB issued ASU 2020-10, Codification Improvements, which updates various codification topics by clarifying or improving disclosure requirements to align with the SEC’s regulations. The Company adopted the new standard effective January 1, 2021, and there was no impact on its consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740)Simplifying the Accounting for Income Taxes. ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The Company adopted the new standard effective January 1, 2021, and there was no impact on its consolidated financial statements.
Not Yet Adopted
In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), DebtModifications and Extinguishments (Subtopic 470-50), CompensationStock Compensation (Topic 718), and Derivatives and HedgingContracts in Entity’s Own Equity (Subtopic 815-40): Issuer's Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. ASU 2021-04 provides guidance as to how entities should account for a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option (i.e., a warrant) that remains equity-classified after modification or exchange as an exchange of the original instrument for a new instrument. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. This new standard will be effective for us for fiscal years beginning after December 15, 2021 including interim periods within those fiscal years. The adoption of ASU 2021-04 is not expected to have an impact on the Company’s financial position or results of operations upon adoption.
In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. This new standard will be effective for us for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company is assessing the impact this standard will have on its consolidated financial statements and disclosures.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. Subsequently, in November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses. ASU 2016-13 requires entities to measure all expected credit losses for most financial assets held at the reporting date based on an expected loss model which includes historical experience, current conditions, and reasonable and supportable forecasts. ASU 2016-13 also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses. This new standard will be effective for us for fiscal years beginning after December 15, 2021. The adoption of ASU 2016-13 is not expected to have an impact on the Company’s financial position or results of operations upon adoption.

3. Marketable Securities
The following table summarizes the marketable securities held as of September 30, 2021 (in thousands):
Unrealized gainsUnrealized lossesFair
September 30, 2021
Corporate bonds$2,035 $ $(1)$2,034 
Commercial paper21,984   21,984 
Total$24,019 $ $(1)$24,018 
All marketable securities held at September 30, 2021 had maturities of less than 12 months when purchased and are classified as short-term marketable securities on the accompanying consolidated balance sheet. During the nine months ended September 30, 2021, there were no marketable securities adjusted for other than temporary declines in fair value.
As of December 31, 2020, the Company held no marketable securities.

4. Net Loss Per Share
The Company has reported a net loss for the three and nine months ended September 30, 2021 and 2020. The Company used the treasury stock method to determine the number of dilutive shares. The following table sets forth the computation of basic and diluted net loss per share (in thousands, except share and per-share data):
 Three Months Ended
September 30,
Nine Months Ended
September 30,
     Net loss$(17,894)$(9,729)$(37,926)$(53,430)
     Weighted-average common shares outstanding - basic and diluted115,169,949 105,325,788 113,161,622 98,968,359 
Net loss per share:
     Basic and diluted$(0.16)$(0.09)$(0.34)$(0.54)

The following table represents the potential dilutive common shares excluded from the computation of the diluted net loss per share for all periods presented, as the effect would have been anti-dilutive:
 Three Months Ended
September 30,
Nine Months Ended
September 30,
Options, RSUs and ESPP shares11,701,844 7,638,839 11,701,844 7,638,839 
Warrants to purchase common stock12,378,016 13,888,525 12,378,016 13,888,525 
Total24,079,860 21,527,364 24,079,860 21,527,364 


5. Fair Value Measurements
The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020 (in thousands):
September 30, 2021
TotalLevel 1Level 2Level 3
     Money market funds (included in cash equivalents)$56,563 $56,563 $ $ 
Marketable securities:
     Corporate bonds2,034  2,034  
     Commercial paper21,984  21,984  
Total assets$80,581 $56,563 $24,018 $ 
     Warrant liabilities$40,043 $ $ $40,043 
Total liabilities$40,043 $ $ $40,043 
December 31, 2020
TotalLevel 1Level 2Level 3
     Money market funds (included in cash equivalents)$80,576 $80,576 $ $ 
Total assets$80,576 $80,576 $ $ 
     Warrant liabilities$28,708 $ $ $28,708 
Total liabilities$28,708 $ $ $28,708 

There were no transfers within the fair value hierarchy during the nine months ended September 30, 2021 or the year ended December 31, 2020.

Cash, Cash Equivalents, and Restricted Cash
As of September 30, 2021 and December 31, 2020, the money market funds were classified as cash and cash equivalents on the accompanying consolidated balance sheets as they mature within 90 days from the date of purchase.
As of September 30, 2021, the Company had restricted cash balances relating to a secured letter of credit in connection with its lease for the Company’s headquarters (see Note 8 included elsewhere in this Quarterly Report). The Company’s consolidated statement of cash flows includes the following as of September 30, 2021 and 2020 (in thousands):
September 30,
Cash and cash equivalents$114,645 $146,261 
Long-term restricted cash1,379 1,379 
Total cash, cash equivalents, and restricted cash$116,024 $147,640 

Marketable Securities
As of September 30, 2021, marketable securities classified as Level 2 within the valuation hierarchy consist of corporate bonds and commercial paper. Marketable securities represent holdings of available-for-sale marketable debt securities in accordance with the Company’s investment policy. The Company estimates the fair value of these marketable securities by taking into consideration valuations that include market pricing based on real-time trade data for the same or similar securities, and other observable inputs. The amortized cost of available-for-sale debt securities is adjusted for amortization of premiums and accretion of discounts to the earliest call date for premiums or to maturity for discounts.
Loans Payable
At September 30, 2021, in light of the recent issuance of the Term A Loan under the 2020 Term Loan, the Company believes the carrying value approximates the fair value of the loan.

Common Warrants
In December 2019, the Company issued common warrants in connection with a private placement of common shares. Pursuant to the terms of the common warrants, the Company could be required to settle the common warrants in cash in the event of certain acquisitions of the Company and, as a result, the common warrants are required to be measured at fair value and reported as a liability on the balance sheet. The Company recorded the fair value of the common warrants upon issuance using the Black-Scholes valuation model and is required to revalue the common warrants at each reporting date with any changes in fair value recorded in the statement of operations and comprehensive loss. The valuation of the common warrants is considered Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable including the volatility rate and the estimated term of the warrants. Generally, increases (decreases) in the fair value of the underlying stock and estimated term would result in a directionally similar impact to the fair value measurement. The changes in the fair values of the Level 3 warrant liability are reflected in the statement of operations and comprehensive loss for the three and nine months ended September 30, 2021 and 2020.
The estimated fair value of warrants is determined using Level 3 inputs inherent in the Black-Scholes simulation valuation.
Estimated fair value of the underlying stock. The Company estimates the fair value of the common stock based on the closing stock price at the end of each reporting period.
Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury at the valuation date commensurate with the expected remaining life assumption.
Dividend rate. The dividend rate is based on the historical rate, which the Company anticipates will remain at zero.
Expected life. The expected life of the warrants is assumed to be equivalent to their remaining contractual term which expires on December 23, 2024.
Volatility. The Company estimates stock price volatility based on the Company’s historical volatility and the historical volatility of peer companies for a period of time commensurate with the expected remaining life of the warrants.
A summary of the Black-Scholes pricing model assumptions used to record the fair value of the warrant liability is as follows:
September 30,
Risk-free interest rate0.53 %
Dividend yield 
Expected life (in years)3.23
Expected volatility98.07 %
Changes in Level 3 Liabilities Measured at Fair Value on a Recurring Basis
The following table reflects a roll-forward of fair value for the Company’s Level 3 warrant liabilities (see Note 10), for the nine months ended September 30, 2021 (in thousands):
Warrant liabilities
Fair value as of December 31, 2020
     Change in fair value11,335 
Fair value as of September 30, 2021


6. Property and Equipment
Property and equipment consists of the following (in thousands):
 September 30,December 31,
Laboratory equipment$5,095 $4,427 
Computer equipment and software734 532 
Leasehold improvements45 38 
Furniture and fixtures327 327 
Office equipment163 163 
Construction in process93 163 
Total property and equipment6,457 5,650 
Less accumulated depreciation(4,650)(4,255)
Property and equipment, net$1,807 $1,395 

Depreciation expense was $0.1 million and $0.4 million for the three and nine months ended September 30, 2021, respectively. Depreciation expense was $0.1 million and $0.5 million for the three and nine months ended September 30, 2020, respectively.

7. Accrued Expenses
Accrued expenses consist of the following (in thousands):
 September 30,December 31,