inzy-10q_20200630.htm

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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 ☐ 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 ☒ 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.

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 31, 2020, the registrant had 23,364,851 shares of common stock, $0.0001 par value per share, outstanding.

This Quarterly Report on Form 10-Q contains forward-looking statements, which reflect our current views with respect to, among other things, our operations and financial performance. All statements, other than statements of historical fact, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would,” and the negative version of these words and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include but are not limited to those described under the “Risk Factors” section and include, among other things:

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q, particularly in the “Risk Factors” section, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures or investments we may make or enter into.

You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this Quarterly Report on Form 10-Q are made as of the date of this Quarterly Report on Form 10-Q, and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

	June 30, 2020			December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	50,863		$	31,605
Short-term investments		13,004			15,527
Prepaid expenses and other current assets		793			328
Total current assets		64,660			47,460
Property and equipment, net		846			298
Restricted cash		355			130
Deferred issuance costs		2,650			56
Total assets	$	68,511		$	47,944
Liabilities, convertible preferred stock and stockholders’ (deficit) equity
Current liabilities:
Accounts payable	$	1,399		$	901
Accrued expenses		5,328			2,335
Total current liabilities		6,727			3,236
Deferred lease incentive		238			—
Total liabilities		6,965			3,236
Commitments (Note 7)
Series A Convertible Preferred Stock, $0.0001 par value – 48,850,000 shares authorized; 48,850,000 shares issued and outstanding at June 30, 2020 and December 31, 2019; Liquidation preference of $48.9 million at June 30, 2020 and December 31, 2019		44,657			44,657
Series A-2 Convertible Preferred Stock, $0.0001 par value – 47,132,862 shares authorized at June 30, 2020 and December 31, 2019; 47,132,862 shares issued and outstanding at June 30, 2020; 23,566,431 shares issued and outstanding at December 31, 2019; Liquidation preference of $67.4 million at June 30, 2020 and $33.7 million at December 31, 2019		66,908			33,270
Stockholders’ (deficit) equity:
Common Stock, $0.0001 par value – 129,000,000 shares authorized; 1,344,704 shares issued and outstanding at June 30, 2020 and 1,204,630 shares issued and outstanding at December 31, 2019		—			—
Additional paid in-capital		1,831			1,428
Accumulated other comprehensive income		13			5
Accumulated deficit		(51,863	)		(34,652	)
Total stockholders’ (deficit) equity		(50,019	)		(33,219	)
Total liabilities, convertible preferred stock and stockholders’ (deficit) equity	$	68,511		$	47,944

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Operating expenses:
Research and development	$	7,877		$	3,489		$	14,283		$	7,623
General and administrative		1,671			1,064			3,171			2,094
Total operating expenses		9,548			4,553			17,454			9,717
Loss from operations		(9,548	)		(4,553	)		(17,454	)		(9,717	)
Other income (expense):
Interest income		71			394			242			604
Other income (expense), net		4			(14	)		1			(31	)
Other income (expense), net		75			380			243			573
Net loss	$	(9,473	)	$	(4,173	)	$	(17,211	)	$	(9,144	)
Other comprehensive (loss) income:
Unrealized (losses) gains on available-for-sale securities		(15	)		10			8			12
Total other comprehensive (loss) income		(15	)		10			8			12
Comprehensive loss	$	(9,488	)	$	(4,163	)	$	(17,203	)	$	(9,132	)
Net loss attributable to common stockholders—basic and diluted	$	(9,473	)	$	(4,173	)	$	(17,211	)	$	(9,144	)
Net loss per share attributable to common stockholders—basic and diluted	$	(7.57	)	$	(3.57	)	$	(14.01	)	$	(7.83	)
Weighted-average common shares outstanding—basic and diluted		1,251,244			1,170,480			1,228,296			1,167,346

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

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ (DEFICIT) EQUITY

	Series A Convertible Preferred Stock				Series A-2 Convertible Preferred Stock				Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders’ (Deficit)
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Income (Loss)			Deficit			Equity
Balance at December 31, 2019		48,850,000		44,657		23,566,431		33,270		1,204,630		—		1,428		5			(34,652	)		(33,219	)
Stock-based compensation		—		—		—		—		—		—		129		—			—			129
Exercise of stock options		—		—		—		—		2,677		—		5		—			—			5
Comprehensive income:
Unrealized gain on investments		—		—		—		—		—		—		—		23			—			23
Net loss		—		—		—		—		—		—		—		—			(7,738	)		(7,738	)
Balance at March 31, 2020		48,850,000	$	44,657		23,566,431	$	33,270		1,207,307	$	—	$	1,562	$	28		$	(42,390	)	$	(40,800	)
Issuance of Series A-2 Convertible Preferred Stock, net of issuance costs of $0.1 million		—		—		23,566,431		33,638		—		—		—		—			—			—
Stock-based compensation		—		—		—		—		—		—		120		—			—			120
Exercise of stock options		—		—		—		—		137,397		—		149		—			—			149
Comprehensive income:
Unrealized loss on investments		—		—		—		—		—		—		—		(15	)		—			(15	)
Net loss		—		—		—		—		—		—		—		—			(9,473	)		(9,473	)
Balance at June 30, 2020		48,850,000	$	44,657		47,132,862	$	66,908		1,344,704	$	—	$	1,831	$	13		$	(51,863	)	$	(50,019	)
Balance at December 31, 2018		48,850,000	$	44,657		7,482,515	$	10,372		1,135,015	$	—	$	1,055	$	(2	)	$	(14,928	)	$	(13,875	)
Issuance of Series A-2 Convertible Preferred Stock, net of issuance costs of $0.1 million		—		—		16,083,916		22,898		—		—		—		—			—			—
Stock-based compensation		—		—		—		—		—		—		41		—			—			41
Exercise of stock options		—		—		—		—		35,460		—		34		—			—			34
Comprehensive income:
Unrealized gain on investments		—		—		—		—		—		—		—		2			—			2
Net loss		—		—		—		—		—		—		—		—			(4,971	)		(4,971	)
Balance at March 31, 2019		48,850,000	$	44,657		23,566,431	$	33,270		1,170,475	$	—	$	1,130	$	—		$	(19,899	)	$	(18,769	)
Stock-based compensation		—		—		—		—		—		—		40		—			—			40
Comprehensive income:
Unrealized gain on investments		—		—		—		—		—		—		—		8			—			8
Net loss		—		—		—		—		—		—		—		—			(4,173	)		(4,173	)
Balance at June 30, 2019		48,850,000	$	44,657		23,566,431	$	33,270		1,170,475	$	—	$	1,170	$	8		$	(24,072	)	$	(22,894	)

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

	Six Months Ended June 30,
	2020			2019
Operating activities
Net loss	$	(17,211	)	$	(9,144	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		51			38
Stock-based compensation expense		249			81
Accretion on marketable securities		(81	)		(22	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(465	)		(337	)
Accounts payable		454			(393	)
Accrued expenses		2,105			(396	)
Net cash used in operating activities		(14,898	)		(10,173	)
Investing activities
Purchases of marketable securities		(18,908	)		(12,771	)
Maturities of marketable securities		21,520			9,225
Purchases of property and equipment		(168	)		(43	)
Net cash provided by (used in) investing activities		2,444			(3,589	)
Financing activities
Proceeds from issuance of Series A-2 Convertible Preferred Stock, net of issuance costs		33,638			22,898
Payment of initial public offering costs		(1,855	)		—
Proceeds from exercise of stock options		154			34
Net cash provided by financing activities		31,937			22,932
Net increase in cash, cash equivalents and restricted cash		19,483			9,170
Cash, cash equivalents and restricted cash at beginning of period		31,735			35,966
Cash, cash equivalents and restricted cash at end of period	$	51,218		$	45,136
Supplemental cash flow information:
Cash and cash equivalents	$	50,863		$	45,136
Restricted cash		355			—
Cash, cash equivalents and restricted cash at end of period	$	51,218		$	45,136
Property and equipment unpaid at end of period	$	431		$	—
Deferred offering costs unpaid at end of period	$	738		$	—
Deferred lease incentive - non-cash	$	238		$	—

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

Inozyme Pharma, Inc. (the “Company”) is a rare disease biopharmaceutical company developing novel therapeutics for the treatment of diseases of abnormal mineralization impacting the vasculature, soft tissue and skeleton.

The Company is pursuing the development of therapeutics to address the underlying causes of these debilitating diseases. It is well established that two genes, ENPP1 and ABCC6, play key roles in a critical mineralization pathway and that defects in these genes lead to abnormal mineralization. The Company is initially focused on developing a novel therapy to treat rare genetic diseases of ENPP1 and ABCC6 deficiencies.

The Company’s lead product candidate, INZ-701, is a soluble, recombinant, or genetically engineered, fusion protein that is designed to correct a defect in the mineralization pathway caused by ENPP1 and ABCC6 deficiencies. This pathway is central to the regulation of calcium deposition throughout the body and is further associated with neointimal proliferation, or the overgrowth of smooth muscle cells inside blood vessels.

On July 17, 2020, the Company effected a one-for-7.4730 reverse stock split of the Company’s common stock. All share and per share amounts in the condensed consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital. Shares of common stock underlying outstanding stock options and other equity instruments were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased in accordance with the terms of the appropriate securities agreements. Shares of common stock reserved for issuance upon the conversion of the Company’s convertible preferred stock were proportionately reduced and the respective conversion prices were proportionately increased. Stockholders entitled to fractional shares as a result of the reverse stock split will receive a cash payment in lieu of receiving fractional shares.

On July 28, 2020, the Company completed its initial public offering (“IPO”) pursuant to which it issued 7,000,000 shares of its common stock at a public ofering price of $16.00 per share, and on July 30, 2020, the Company sold an additional 1,050,000 shares pursuant to the exercise by the underwriters of their option to purchase additional shares. The Company received net proceeds from its IPO, inclusive of the exercise by the underwriters of their option to purchase additional shares, of $116.5 million, after deducting underwriting discounts and commissions and estimated offering expenses. Upon the closing of the IPO, all 104,277,222 shares of the then outstanding preferred stock automatically converted into 13,953,850 shares of common stock.

The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). All adjustments considered necessary for a fair presentation have been included.

The accompanying consolidated financial statements and footnotes to the financial statements have been prepared on the same basis as the most recently audited annual financial statements and, in the opinion of management, reflect all normal recurring adjustments necessary for the fair presentation of the Company’s financial position as of June 30, 2020 and the results of its operations and its cash flows for the three and six months ended June 30, 2020 and 2019. The results for the three and six months ended June 30, 2020 are not necessarily indicative of results to be expected for the year ending December 31, 2020, any other interim periods, or any future year or period. 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, 2019 included in the Company’s final prospectus for its IPO filed pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the “Securities Act”), with the Securities and Exchange Commission (the “SEC”) on July 24, 2020.

Since the Company’s incorporation in 2017 and through June 30, 2020, the Company has devoted substantially all of its efforts to raising capital, building infrastructure, developing intellectual property and conducting research and development. The Company incurred net losses of $17.2 million in the six months ended June 30, 2020 and $19.7 million in the year ended December 31, 2019 and had an accumulated deficit of $51.9 million as of June 30, 2020 and $34.7 million as of December 31, 2019. The Company had cash and cash equivalents of $50.9 million and $31.6 million, and short-term investments of $13.0 million and $15.5 million as of June 30, 2020 and December 31, 2019, respectively.

The accompanying condensed consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets, and the satisfaction of liabilities and commitments in the ordinary course of business. The Company has incurred recurring losses and negative cash flows from operations since inception and has primarily funded its operations with proceeds from the issuance of convertible preferred stock, and most recently, with proceeds from the IPO completed on July 28, 2020. The Company expects its operating losses and negative operating cash flows to continue into the foreseeable future as it continues to expand its research and development efforts.

The Company believes that its cash and cash equivalents as of June 30, 2020, together with the net proceeds of approximately $116.5 million from the IPO of the Company’s common stock completed in July 2020, will be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months from the date of filing this Quarterly Report on Form 10-Q. The Company will need additional funding to support its planned operating activities. If the Company is unable to obtain additional funding, it would be forced to delay, reduce or eliminate some or all of its research and development programs, product portfolio expansion, or commercialization efforts, which could adversely affect its business prospects.

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Inozyme Securities Corp., which is a Massachusetts subsidiary created to buy, sell, and hold securities, and Inozyme Ireland Limited. All intercompany transactions and balances have been eliminated.

The significant accounting policies and estimates used in the preparation of the accompanying consolidated financial statements are described in the Company’s audited consolidated financial statements for the year ended December 31, 2019 included in the Company’s final prospectus for its IPO filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on July 24, 2020. There have been no material changes in the Company’s significant accounting policies during the three months ended June 30, 2020.

The preparation of the Company’s financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Estimates and judgments are based on historical information and other market-specific or various relevant assumptions, including, in certain circumstances, future projections that management believes to be reasonable under the circumstances. Actual results could differ materially from estimates. Significant estimates and assumptions are used for, but not limited to the accruals for research and development expenses, and for equity instruments issued prior to the completion of the Company’s IPO, stock-based compensation expense, inclusive of the measurement of fair value of equity instruments. For equity instruments issued prior to the completion of the Company’s IPO, the Company utilized various valuation methodologies in accordance with the framework of the 2013 American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, to estimate the fair value of its equity instruments. The Company evaluates its estimates and assumptions on an ongoing basis. All revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

The Company records accrued liabilities for estimated costs of research and development activities conducted by service providers for sponsored research, preclinical studies and contract manufacturing activities. The Company records the estimated costs of research and development activities based upon the estimated amount of services provided but not yet invoiced and includes these costs in accrued expenses in the accompanying consolidated balance sheets and within research and development expense in the accompanying consolidated statements of operations and comprehensive loss.

The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with service providers. The Company makes significant judgments and estimates in determining the accrued liabilities balance in each reporting period. As actual costs become known, the Company adjusts its accrued liabilities. The Company has not experienced any material differences between accrued costs and actual costs incurred since its inception.

Research and development costs are expensed as incurred. Research and development costs consist of direct and indirect internal costs related to specific projects as well as fees paid to other entities that conduct certain research and development activities on the Company’s behalf.

The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings, including the Company’s IPO, as deferred issuance costs until such financings are consummated. After consummation of such an equity financing, these costs are recorded as a reduction of the proceeds generated as a result of the offering. The Company recorded deferred issuance costs at June 30, 2020 and December 31, 2019 of $2.7 million and $0.1 million, respectively.

The Company follows the two-class method when computing net loss allocable to common securities per share as the Company has issued shares that meet the definition of participating securities, which include shares of: (i) Series A Convertible Preferred Stock; and (ii) Series A-2 Convertible Preferred Stock. The two-class method requires a portion of net income to be allocated to the participating securities to determine net loss allocable to the common securities. During periods of loss, there is no allocation required under the two-class method since the participating securities do not have a contractual obligation to fund the losses of the Company.

Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock and potentially dilutive securities outstanding during the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per share calculation, diluted net loss per share attributable to common stockholders is calculated by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding after giving consideration to the dilutive effect of convertible preferred stock, restricted common stock, restricted stock units and stock options that are outstanding during the period. The Company has generated a net loss in all periods presented, therefore the basic and diluted net loss per share attributable to common stockholders are the same as the inclusion of the potentially dilutive securities would be anti-dilutive.

The Company categorizes its assets and liabilities measured at fair value in accordance with the authoritative accounting guidance that establishes a consistent framework for measuring fair value and expands disclosures for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents and short-term investments. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits and limits its exposure to credit risk by placing its cash with high credit quality financial institutions. The Company’s short-term investments are comprised of corporate debt securities, U.S. Treasury and agency securities and commercial paper of corporations. The Company mitigates credit risk by maintaining a diversified portfolio and limiting the amount of investment exposure as to institution, maturity and investment type.

The Company has no significant off-balance sheet risk such as foreign exchange contracts, option contracts, or other foreign hedging arrangements.

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The new standard, as amended, establishes a right-of-use model and requires a lessee to recognize on the balance sheet a right-of-use asset and corresponding lease liability for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the consolidated statements of operations and comprehensive loss. As a result of the FASB’s issuance of ASU No. 2020-05, “Revenue From Contracts With Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities”, the new standard is effective for the Company on January 1, 2022, with early adoption permitted. The Company is currently assessing the impact that adopting this standard will have on its consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13). ASU 2016-13 and its subsequent related updates establish a new forward-looking “expected loss model” that requires entities to estimate current expected credit losses on accounts receivable and financial instruments by using all practical and relevant information. The new standard and its subsequent related updates are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Company is currently assessing the impact that adopting this standard will have on its consolidated financial statements but does not expect it to be material.

In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (ASU 2018-15). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The accounting for the service element of a hosting arrangement that is a service contract is not affected by these amendments. ASU 2018-15 is effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021, with early adoption permitted. The Company is currently assessing the impact that adopting this standard will have on its consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes. The new guidance simplifies the accounting for income taxes by removing several exceptions in the current standard and adding guidance to reduce complexity in certain areas, such as requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The new standard is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently assessing the impact that adopting this standard will have on its consolidated financial statements.

Short-term investments consisted of the following (dollar amounts in thousands):

Total short-term investments at June 30, 2020 with unrealized losses were as follows (dollar amounts in thousands):

The Company did not have any short-term investments with unrealized losses at December 31, 2019.

The Company concluded that the net declines in market value of available-for-sale securities were temporary in nature and did not consider any of the investments to be other-than-temporarily impaired. In accordance with its investment policy, the Company invests in investment grade securities with high credit quality issuers, and generally limits the amount of credit exposure to any one issuer. The Company evaluates securities for other-than-temporary impairment at the end of each reporting period. Impairment is evaluated considering numerous factors, and their relative significance varies depending on the situation. Factors considered include the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the issuer, and the Company’s intent and ability to hold the investment to allow for an anticipated recovery in fair value. Furthermore, the aggregate of individual unrealized losses that had been outstanding for 12 months or less was not significant as of June 30, 2020 and December 31, 2019. The Company does not intend to sell these investments and it is not more likely than not that the Company will be required to sell the investments before a recovery of their amortized cost bases, which may be maturity. The Company also believes that it will be able to collect both principal and interest amounts due at maturity.

Prepaid expenses and other current assets consisted of the following (dollar amounts in thousands):

Delaware	38-4024528
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
321 Summer Street, Suite 400 Boston, Massachusetts	02210
(Address of principal executive offices)	(Zip Code)

		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss	2
	Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ (Deficit) Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	27
PART II.	OTHER INFORMATION	28

Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	81
Item 6.	Exhibits	82
Signatures		84

	June 30, 2020
Description	Maturity	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Commercial paper	1 year or less	$	9,100	$	11	$	(1	)	$	9,110
Corporate debt securities	1 year or less		2,888		—		—			2,888
U.S. Treasury securities	1 year or less		1,003		3		—			1,006
		$	12,991	$	14	$	(1	)	$	13,004

	December 31, 2019
Description	Maturity	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Commercial paper	1 year or less	$	10,903	$	3	$	—	$	10,906
Corporate debt securities	1 year or less		3,370		1		—		3,371
U.S. Treasury securities	1 year or less		1,249		1		—		1,250
		$	15,522	$	5	$	—	$	15,527

	June 30, 2020
Description	Maturity	Fair Value		Unrealized Losses
Commercial paper	1 year or less	$	2,611	$	(1	)
		$	2,611	$	(1	)