On May 19, 2022, the Company completed the Acquisition. Pursuant to the terms of the Merger Agreement, at the closing of the Acquisition (the “Effective Time”), each share of capital stock of Novosteo (the “Novosteo Capital Stock”) that was issued and outstanding immediately prior to the Effective Time was automatically cancelled and converted into the right to receive 0.0911 shares of common stock, par value $0.001 per share, of the Company (the “Company Common Stock”). These shares included options to purchase an aggregate of 507,108 shares of the Company Common Stock upon conversion of the outstanding Novosteo options based on the Company Option Exchange Ratio (as defined in the Merger Agreement), with the awards retaining the same vesting and other terms and conditions as in effect immediately prior to consummation of the Acquisition. These options, as well as 519,216 unvested restricted shares were concluded to be post-combination expense and were excluded from purchase consideration.

The Company has included the financial results of Novosteo in the condensed consolidated financial statements from the date of the Acquisition and recorded immaterial amounts of expenses and earnings since the period from May 19, 2022 through June 30, 2022. The transaction costs associated with the Acquisition were approximately $1.1 million and were recorded in general and administrative expense. The acquisition date fair value of the consideration transferred for Novosteo was approximately $16,502,587, which consisted of 5,000,784 shares at $3.30 per share.

The Company accounted for the Acquisition as a business combination in accordance with ASC Topic 805, Business Combinations ("ASC 805"). The Company applied the acquisition method, which requires the identifiable assets acquired and liabilities assumed be recorded at fair value with limited exceptions. The following table summarizes the fair values of the identifiable assets acquired and liabilities assumed as of the date of acquisition (in thousands):


	May 19,
	2022
Identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	$	10,593
Prepaid expenses and other current assets		1,040
ROU asset		124
Property and equipment		279
Intangible assets		5,900
Accounts payable and accrued liabilities		(1,726	)
Deferred tax liabilities		(532	)
Net assets acquired	$	15,678
Goodwill	$	825

The final determination of the fair value of assets and liabilities will be completed within the one-year measurement period as required by ASC 805. The Novosteo, Inc. Acquisition will necessitate the use of this measurement period to adequately analyze and assess the factors used in establishing the fair values of the net assets acquired as of the acquisition date, primarily involving deferred tax liabilities.

The excess of the fair value of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill, which is primarily attributed to the assembled workforce and expanded market opportunities, for which there is no basis for U.S. income tax purposes. Goodwill amounts are not amortized but are rather tested for impairment at least annually. Goodwill is not deductible for tax purposes.

The Intangible asset balance above is attributable to in-process research and development with an indefinite useful life.

The amounts of the Company's revenue and net loss included in the acquirer's condensed consolidated statement of operations and comprehensive loss for the three and six months ended June 30, 2022 and 2021, and the unaudited pro forma revenue and net loss of the combined entity had the acquisition date been January 2, 2021 are as follows:


	Three Months Ended						Six Months Ended
	2022			2021			2022			2021
Revenue	$	262		$	202		$	262		$	220
Net loss		(16,265	)		(24,353	)		(39,421	)		(48,568	)

The 2022 supplemental pro forma earnings were adjusted to exclude $2.2 million of acquisition-related costs incurred in 2022, the 2021 pro forma earnings were adjusted to include these charges. The Company’s condensed consolidated income statements for the three and six months ended June 30, 2022 include net revenue and net loss of $0 and $0.1 million, respectively, attributable to the Acquisition.