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, a 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 ~~November~~August 11, ~~2019,~~2020, the Registrant had ~~18,633,530~~27,319,959 common shares, $0.0001 par value per share, outstanding.

This Quarterly Report on Form 10-Q contains express or implied forward-looking statements that are based on our management’s belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties and other 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 these forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

In some cases, forward-looking statements can be identified by terminology such as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those set forth in Item 1A, “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019, which was filed with the Securities and Exchange Commission on March 24, 2020, as well as in our subsequent filings with the Securities and Exchange Commission. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, then actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. While we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.

	December 31,			September 30,			December 31,			June 30,
	2018			2019			2019			2020
Assets
Current assets
Cash and cash equivalents	$	89,478		$	83,562		$	72,624		$	78,860
Short term investments								-			40,469
Prepaid expenses		1,757			894			2,619			2,897
VAT receivable		479			303			310			298
Other current assets		179			128			94			12
Total current assets		91,893			84,887			75,647			122,536
Restricted cash		182			182			182			182
Property and equipment, net		164			136			127			110
Right-of-use lease assets - operating, net		1,506			1,264			1,179			1,002
Deposits and other assets		10			197			148			89
Total assets	$	93,755		$	86,666		$	77,283		$	123,919
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	587		$	542		$	1,142		$	770
Accrued expenses		2,922			7,169			3,688			4,724
Term loan, short term		2,811			—
Lease obligation - operating, short term		353			393			407			435
Total current liabilities		6,673			8,104			5,237			5,929
Term loan, long term		6,826			18,842			18,915			19,076
Lease obligation - operating, long term		1,353			1,052			943			717
Derivative liability		—			766			765			-
Other liabilities		159			16			58			138
Total liabilities		15,011			28,780			25,918			25,860
Commitments and contingencies (Note 10)
Commitments and contingencies (Note 11)
Stockholders’ equity
Preferred stock, $0.0001 par value; 10,000,000 shares authorized and no shares issued and outstanding		—			—			-			-
Common stock, $0.0001 par value; 150,000,000 shares authorized as of September 30, 2019; 18,569,289 and 18,629,730 shares issued and outstanding as of December 31, 2018 and September 30, 2019, respectively		2			2
Common stock, $0.0001 par value; 150,000,000 shares authorized as of June 30, 2020; 19,418,955 and 27,287,997 shares issued and outstanding as of December 31, 2019 and June 30, 2020, respectively								2			3
Additional paid-in capital		175,201			176,524			180,818			242,898
Accumulated deficit		(96,459	)		(118,640	)		(129,455	)		(144,842	)
Total stockholders’ equity		78,744			57,886			51,365			98,059
Total liabilities and stockholders’ equity	$	93,755		$	86,666		$	77,283		$	123,919

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

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2018			2019			2018			2019			2019			2020			2019			2020
Operating expenses:
Research and development	$	3,896		$	4,293		$	12,799		$	16,314		$	5,496		$	5,139		$	12,020		$	9,285
General and administrative		1,945			1,996			11,645			6,158			1,839			2,537			4,162			5,040
Total operating expenses		5,841			6,289			24,444			22,472			7,335			7,676			16,182			14,325
Loss from operations		(5,841	)		(6,289	)		(24,444	)		(22,472	)		(7,335	)		(7,676	)		(16,182	)		(14,325	)
Other (expense) income		(5	)		83			(58	)		61
Other expense														(14	)		(1	)		(22	)		(32	)
Interest income		445			397			1,221			1,350			463			21			953			245
Interest expense		(360	)		(398	)		(1,062	)		(1,121	)		(369	)		(639	)		(723	)		(1,275	)
Net loss and comprehensive loss	$	(5,761	)	$	(6,207	)	$	(24,343	)	$	(22,182	)	$	(7,255	)	$	(8,295	)	$	(15,974	)	$	(15,387	)
Net loss per share — basic and diluted	$	(0.31	)	$	(0.33	)	$	(1.31	)	$	(1.19	)	$	(0.39	)	$	(0.36	)	$	(0.86	)	$	(0.71	)
Weighted average common shares outstanding — basic and diluted		18,569,289			18,584,327			18,551,690			18,580,192			18,580,430			23,355,418			18,578,091			21,786,946

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

	COMMON STOCK				ADDITIONAL						TOTAL			COMMON STOCK				ADDITIONAL						TOTAL
														SHARES		AMOUNT		PAID-IN CAPITAL			ACCUMULATED DEFICIT			STOCKHOLDERS’ EQUITY
At December 31, 2019															19,418,955	$	2	$	180,818		$	(129,455	)	$	51,365
Net loss															—		—		—			(7,092	)		(7,092	)
Issuance of common stock under at-the-market offering net of commissions and issuance costs (Note 10)															1,502,892		—		10,253			—			10,253
Issuance of common stock upon exercise of stock options															30,143		—		154			—			154
Vesting of restricted stock															29,890		—		(84	)		—			(84	)
Stock-based compensation															—		—		508			—			508
At March 31, 2020															20,981,880		2		191,649			(136,547	)		55,104
Net loss															—		—		—			(8,295	)		(8,295	)
Common stock offering, net of commissions and issuance costs (Note 10)															6,220,589		1		50,147			—			50,148
Issuance of common stock upon exercise of stock options															85,528		—		561			—			561
Vesting of restricted stock															—		—		(80	)		—			(80	)
Stock-based compensation															—		—		621			—			621
At June 30, 2020															27,287,997	$	3	$	242,898		$	(144,842	)	$	98,059
	SHARES		AMOUNT		PAID-IN CAPITAL			ACCUMULATED DEFICIT			STOCKHOLDERS’ EQUITY
At December 31, 2018		18,569,289	$	2	$	175,201		$	(96,459	)	$	78,744			18,569,289	$	2	$	175,201		$	(96,459	)	$	78,744
Net loss		—		—		—			(8,719	)		(8,719	)		—		—		—			(8,719	)		(8,719	)
Issuance of common stock upon exercise of stock options		11,141		—		18			—			18			11,141		—		18			—			18
Stock-based compensation		—		—		355			—			355			—		—		355			—			355
At March 31, 2019		18,580,430		2		175,574			(105,178	)		70,398			18,580,430		2		175,574			(105,178	)		70,398
Net loss		—		—		—			(7,255	)		(7,255	)		—		—		—			(7,255	)		(7,255	)
Stock-based compensation		—		—		326			—			326			—		—		326			—			326
At June 30, 2019		18,580,430		2		175,900			(112,433	)		63,469			18,580,430	$	2	$	175,900		$	(112,433	)	$	63,469
Net loss		—		—		—			(6,207	)		(6,207	)
Issuance of common stock under at-the-market offering, net of issuance costs (Note 9)		40,300		—		256			—			256
Issuance of common stock upon exercise of stock options		9,000		—		35			—			35
Stock-based compensation		—		—		333			—			333
At September 30, 2019		18,629,730	$	2	$	176,524		$	(118,640	)	$	57,886

At December 31, 2017		18,534,240	$	2	$	173,011		$	(67,016	)	$	105,997
Net loss		—		—		—			(8,732	)		(8,732	)
Issuance of common stock upon exercise of stock options		7,606		—		56			—			56
Vesting of restricted stock		366		—		1			—			1
Stock-based compensation		—		—		622			—			622
At March 31, 2018		18,542,212		2		173,690			(75,748	)		97,944
Net loss		—		—		—			(9,850	)		(9,850	)
Issuance of common stock upon exercise of stock options		26,955		—		2			—			2
Vesting of restricted stock		122		—		—			—			—
Stock-based compensation		—		—		497			—			497
At June 30, 2018		18,569,289		2		174,189			(85,598	)		88,593
Net loss		—		—		—			(5,761	)		(5,761	)
Offering costs		—		—		(5	)		—			(5	)
Stock-based compensation		—		—		563			—			563
At September 30, 2018		18,569,289	$	2	$	174,747		$	(91,359	)	$	83,390

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

	Nine Months Ended September 30,						Six Months Ended June 30,
	2018			2019			2019			2020
Cash flows from operating activities
Net loss	$	(24,343	)	$	(22,182	)	$	(15,974	)	$	(15,387	)
Adjustments to reconcile net loss to cash used in operating activities
Depreciation expense		29			29			19			17
Amortization expense - right-of-use leased assets - operating		218			241			159			177
Accretion of discount on investments								-			(1	)
Stock-based compensation		1,682			1,014			681			1,129
Non-cash interest expense		278			260			173			246
Fair value adjustment to derivative liability		—			3			-			30
Changes in operating assets and liabilities
Prepaid expenses and other assets		51			1,088			107			(259	)
Accounts payable, accrued expenses and other liabilities		(926	)		3,940			4,806			343
Net cash used in operating activities		(23,011	)		(15,607	)		(10,029	)		(13,705	)
Cash flows from investing activities
Purchases of property and equipment		(41	)		—
Purchases of short term investments								-			(40,469	)
Net cash used in investing activities		(41	)		—			-			(40,469	)
Cash flows from financing activities
Costs related to initial public offering		(5	)		—
Proceeds from at-the-market offering, net of commissions		—			259
At-the-market offering costs		—			(189	)
Proceeds from term loan, net of costs		—			9,568
Proceeds from common stock offering, net								-			50,191
Proceeds from at-the-market offering, net								-			10,388
Proceeds from the exercise of vested stock options		58			53			18			715
Payment of term loan exit fee								-			(800	)
Settlements of restricted stock units for tax withholding obligations								-			(84	)
Net cash provided by financing activities		53			9,691			18			60,410
Net decrease in cash, cash equivalents and restricted cash		(22,999	)		(5,916	)
Net (decrease) increase in cash, cash equivalents and restricted cash								(10,011	)		6,236
Cash, cash equivalents and restricted cash at beginning of period		118,480			89,660			89,660			72,806
Cash, cash equivalents and restricted cash at end of period	$	95,481		$	83,744		$	79,649		$	79,042
Supplemental cash flow information
Interest paid	$	738		$	925		$	608		$	1,436
Taxes paid	$	283		$	296		$	256		$	144
Supplemental non-cash information
Acquisition of right-of-use leased assets - operating, net of disposal	$	26		$	—
Issuance of derivative in connection with modification of term loan	$	—		$	763
Transfer of issuance costs from other noncurrent assets to equity	$	—		$	3

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

scPharmaceuticals LLC was formed as a ~~Limited Liability Company~~limited liability company under the laws of the State of Delaware on February 19, 2013. On March 24, 2014, scPharmaceuticals LLC was converted to a Delaware corporation and changed its name to scPharmaceuticals Inc. (“the Company”). The Company is a pharmaceutical company focused on developing and commercializing products that have the potential to optimize the delivery of infused therapies, advance patient care and reduce healthcare costs. The Company’s ~~proprietary platform~~strategy is designed to enable the subcutaneous administration of therapies that have previously been limited to intravenous ~~or IV,~~(“IV”) delivery. The Company’s headquarters and primary place of business is Burlington, Massachusetts.

In January 2019, following a Type C meeting with the Food and Drug Administration, management implemented a restructuring plan to reduce operating costs and better align its workforce with the needs of its business. The Company recorded a charge of $1.4 million during the nine months ended September 30, 2019 related to the restructuring plan, which included severance, benefits and related costs. The Company recorded $966,000 and $426,000 in research and development expenses and general and administrative expenses related to the restructuring, respectively. The Company paid $1.3 million of these costs during the nine months ended September 30, 2019 and expects to pay $18,000 in the fourth quarter of 2019. The remainder of the restructuring charge consists of a non-cash charge of $70,000 related to the modification of stock options (Note 6). As of September 30, 2019, the Company had a balance of $18,000 in accrued expenses related to severance benefits, and related costs associated with the restructuring plan.

The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and have been prepared on a basis which assumes that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The condensed consolidated financial statements reflect the operations of the Company and its wholly-owned subsidiary, scPharmaceuticals Securities Corporation. Certain information and disclosures normally included in financial statements in accordance with U.S. GAAP have been condensed or omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and related notes for the year ended December 31, ~~2018~~2019 included in the Company’s Annual Report on Form 10-K filed with the ~~SEC~~Securities and Exchange Commission (the “SEC”) on March ~~21, 2019.~~24, 2020. The Company has determined that it operates in one segment.

The accompanying condensed consolidated balance sheet as of ~~September~~June 30, ~~2019,~~2020, the condensed consolidated statements of operations and comprehensive loss and stockholders’ equity for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2019~~2020 and condensed consolidated statements of cash flows for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2019~~2020 are unaudited. The unaudited condensed consolidated financial statements have been prepared on a basis consistent with that used to prepare the Company’s audited annual financial statements and include, in the opinion of management, adjustments, consisting of normal recurring items, necessary for the fair statement of the condensed consolidated financial statements. The operating results for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 are not necessarily indicative of the results expected for the full year ending December 31, ~~2019.~~2020.

As of June 30, 2020, the Company had an accumulated deficit of approximately $144.8million. Management expects to continue to incur operating losses for the foreseeable future. The Company has financed its operations to date from proceeds from the sale of common stock, preferred stock and the incurrence of debt.

As of June 30, 2020, the Company had cash, cash equivalents, restricted cash, and marketable securities of $119.5 million. The Company believes that its existing cash, cash equivalents, restricted cash and marketable securities will be sufficient to meet its cash commitments for at least the next 12 months after the date that the interim condensed consolidated financial statements are issued.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reported periods. Actual results could differ from those estimates.

Cash, cash equivalents and restricted cash consists of bank deposits, certificates of deposit and money market accounts with financial institutions. Cash equivalents are carried at cost which approximates fair value due to their short-term nature and which the Company believes do not have a material exposure to credit risk. The Company considers all highly liquid investments with

maturities of three months or less from the date of purchase to be cash equivalents. The Company’s cash and cash equivalent accounts, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.

As of ~~September~~June 30, ~~2019,~~2020, the Company classified $182,000 as restricted cash related to a letter of credit issued as a security deposit in connection with the Company’s lease of its corporate office facilities (Note ~~10)~~11). Cash, cash equivalents and restricted cash ~~consist~~consists of the ~~following:~~following (in thousands):

	December 31, 2018		September 30, 2019		December 31, 2019		June 30, 2020
Cash and cash equivalents	$	89,478	$	83,562	$	72,624	$	78,860
Restricted cash		182		182		182		182
Cash, cash equivalents and restricted cash	$	89,660	$	83,744	$	72,806	$	79,042

Financial instruments that subject the Company to credit risk primarily consist of cash and cash equivalents and available-for-sale securities. The Company maintains its cash and cash equivalent balances with high-quality financial institutions and, consequently, the Company believes that such funds are subject to minimal credit risk. The Company’s marketable securities consist of United States Treasury and mortgage-backed securities. The Company has adopted an investment policy that limits the amounts the Company may invest in any one type of investment and requires all investments held by the Company to hold a minimum rating, thereby reducing credit risk exposure.

In September 2019, the Company entered into a new loan and security agreement with Solar Capital Ltd. and Silicon Valley Bank (the “2019 Loan Agreement”) to refinance the Company’s 2017 Loan Agreement (Note 8). In connection with the 2019 Loan Agreement, the Company also entered into an exit agreement with Solar Capital Ltd. and Silicon Valley Bank (the “Exit Agreement”). The Exit Agreement provides for a payment to the lenders in the amount of 4% of the loan commitment, or $800,000, upon the occurrence of an exit event, as defined in the Exit Agreement. The Company ~~classifies~~invests excess cash balances in United States Treasury and mortgage-backed securities. The Company determines the ~~exit payment obligation as a liability on its~~appropriate classification of these securities at the time they are acquired and evaluates the appropriateness of such classifications at each balance sheet ~~because it represents a contingent payment obligation that is not clearly and closely related to the host instrument and meets the definition of a derivative.~~date. The ~~derivative liability was initially recorded~~Company reports available-for-sale investments at ~~fair value upon execution of the 2019 Loan Agreement and is subsequently remeasured to~~ fair value at each ~~reporting date. Changes~~balance sheet date and includes any unrealized gains and losses in accumulated other comprehensive income (loss), a component of stockholders’ equity. Realized gains and losses are determined using the specific identification method and are included in other income (expense). If any adjustment to fair value reflects a decline in the value of the ~~derivative liability are recognized as~~investment, the Company considers all available evidence to evaluate the extent to which the decline is “other than temporary,” including the intention to sell and, if so, marks the investment to market through a ~~component of other income (expense), net in~~charge to the ~~statement~~Company’s consolidated statements of operations and comprehensive loss. ~~Changes in the fair value of the derivative liability will continue to be recognized until an exit event occurs.~~

The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use (“ROU”) lease assets, current portion of lease obligations, and long term lease obligations on the Company’s balance sheets.

ROU lease assets represent the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligation to make lease payments arising from the lease. Operating ROU lease assets and obligations are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The ROU lease asset excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company accounts for income taxes in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 740, Income Taxes. Deferred tax assets and liabilities are recorded to reflect the impact of temporary differences between amounts of assets and liabilities for financial reporting purposes and such amounts as measured under enacted tax laws. A valuation allowance is required to offset any net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax asset will not be realized.

The Company provides reserves for potential payments of tax to various tax authorities related to uncertain tax positions. The tax benefits recorded are based on a determination of whether and how much of a tax benefit taken by the Company in its tax filings or positions is “more likely than not” to be realized following resolution of any uncertainty related to the tax benefit, assuming that the matter in question will be raised by the tax authorities. Potential interest and penalties associated with such uncertain tax positions are recorded as a component of income tax expense. At ~~September~~June 30, ~~2019,~~2020, the Company had no such accruals.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) (“ASU 2018-13”). ASU 2018-13 modifies fair value disclosure requirements, specifically around level transfers and valuation of Level 3 assets and liabilities. ASU 2018-13 is effective for financial statements issued for annual and interim periods beginning after December 15, 2019 for all entities. ~~Early adoption of all or part of ASU No. 2018-13 is permitted.~~ The Company ~~does not expect~~adopted ASU 2018-13 ~~to have a material~~on January 1, 2020 and there has not been any impact onto its financial statements.

The following table sets forth the computation of basic and diluted net loss per share of common stock (in thousands, except share and per share data):

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2018			2019			2018			2019			2019			2020			2019			2020
Net loss and comprehensive loss	$	(5,761	)	$	(6,207	)	$	(24,343	)	$	(22,182	)	$	(7,255	)	$	(8,295	)	$	(15,974	)	$	(15,387	)
Weighted-average shares used in computing net loss per share		18,569,289			18,584,327			18,551,690			18,580,192			18,580,430			23,355,418			18,578,091			21,786,946
Net loss per share, basic and diluted	$	(0.31	)	$	(0.33	)	$	(1.31	)	$	(1.19	)	$	(0.39	)	$	(0.36	)	$	(0.86	)	$	(0.71	)

The Company’s potentially dilutive securities, which include stock options and unvested restricted stock units, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect.

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2018		2019		2018		2019		2019		2020		2019		2020
Stock options to purchase common stock		1,746,287		1,424,018		1,746,287		1,424,018		1,430,788		2,029,843		1,430,788		2,029,843
Unvested restricted stock		—		160,900		—		160,900
Unvested restricted stock units										160,900		80,450		160,900		80,450
Total		1,746,287		1,584,918		1,746,287		1,584,918		1,591,688		2,110,293		1,591,688		2,110,293

Cash in excess of the Company’s immediate requirements is invested in accordance with the Company’s investment policy that primarily seeks to maintain adequate liquidity and preserve capital.

The following table summarizes the Company’s investments, by category, as of June 30, 2020 (in thousands):

A summary of the Company’s available-for-sale classified investments as of June 30, 2020 consisted of the following (in thousands):

The amortized cost and fair value of the Company’s available-for-sale investments, by contract maturity, as of June 30, 2020 consisted of the following (in thousands):

Purchased property and equipment consist of the following (dollars in thousands):

	ESTIMATED USEFUL LIFE	December 31, 2018			September 30, 2019			ESTIMATED USEFUL LIFE	December 31, 2019			June 30, 2020
Office equipment	5 years	$	10		$	10		5 years	$	10		$	10
Office furniture	7 years		116			116		7 years		116			116
Computer equipment	3 years		8			8		3 years		8			8
Leasehold improvements	Life of lease		95			95		Life of lease		95			95
			229			229				229			229
Less: Accumulated depreciation			(65	)		(93	)			(102	)		(119	)
Property and equipment, net		$	164		$	136			$	127		$	110

Depreciation expense for the three months ended ~~September 30, 2018 and September~~June 30, 2019 and June 30, 2020 was ~~$10,000~~$9,000 and ~~$10,000,~~$9,000, respectively.

Depreciation expense for the ~~nine~~six months ended ~~September 30, 2018 and September~~June 30, 2019 and June 30, 2020 was ~~$29,000~~$19,000 and ~~$29,000,~~$17,000, respectively.

~~Leased property and equipment consist of the following (dollars in thousands):~~

~~Amortization expense for the three months ended September 30, 2018 and September 30, 2019 was $74,000 and $82,000, respectively.~~

~~Amortization expense for the nine months ended September 30, 2018 and September 30, 2019 was $218,000 and $241,000, respectively.~~

	December 31, 2018		September 30, 2019		December 31, 2019		June 30, 2020
Contract research and development	$	1,492	$	4,146	$	2,001	$	2,937
Unrecoverable component costs		—		1,668
Employee compensation and related costs		727		923		1,250		1,315
Consulting and professional service fees		356		338		296		364
Interest						91		85
State taxes		165		36		49		20
Severance costs		133		18
Other		49		40		1		3
Total accrued expenses	$	2,922	$	7,169	$	3,688	$	4,724

The Company’s 2017 Stock Option and Incentive Plan (the “2017 Stock Plan”) became effective in November 2017, upon the closing of the Company’s initial public offering and will expire in October 2027. Under the 2017 Stock Plan, the Company may grant incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units (“RSUs”) and other stock-based awards. The Company’s 2014 Stock Incentive Plan (the “2014 Stock Plan”) was terminated in November 2017 upon the completion of the Company’s initial public offering and no further options were granted under the 2014 Stock Plan. At ~~September~~June 30, ~~2019,~~2020, there were ~~830,962~~703,636 options outstanding under the 2014 Stock Plan.

As of ~~September~~June 30, ~~2019,~~2020, there were ~~3,166,868~~3,894,270 shares of the Company’s common stock authorized for issuance under the 2017 Stock Plan, including ~~252,707~~265,203 options that have been forfeited from the 2014 Stock Plan.

At ~~September~~June 30, ~~2019,~~2020, there were ~~2,412,912~~2,466,174 options available for issuance under the 2017 Stock Plan, ~~593,056~~1,326,207 options outstanding and ~~160,900 restricted stock units~~80,450 RSUs outstanding. Awards granted under the 2017 Stock Plan have a term of ten years. Vesting of awards under the 2017 Stock Plan is determined by the board of directors, but is generally over one to four-year terms.

The fair value of options at date of grant was estimated using the Black-Scholes option-pricing model with the following assumptions:

	Nine Months Ended September 30,				Six Months Ended June 30,
	2018		2019		2019		2020
Risk-free interest rate	2.42%-2.86%		1.61%-2.51%		1.85%-2.51%		0.41% - 1.71%
Expected dividend yield	0%		0%		0%		0%
Expected life	5.5-7.0 years		5.5-6.1 years		5.5-6.0 years		5.5-6.6 years
Expected volatility	76%-86%		72%-74%		73%-74%		72%-75%
Weighted-average grant date fair value	$	7.57	$	2.17	$	2.14	$	4.06

The following table summarizes information about stock option activity during the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 (in thousands, except share and per share data):

NUMBER OF
SHARES

WEIGHTED-
AVERAGE
EXERCISE
PRICE

WEIGHTED-
AVERAGE
REMAINING
CONTRACTUAL
TERM

AGGREGATE
INTRINSIC
VALUE

Outstanding, December 31, 2018

1,588,306

$
6.75

Granted

145,022

3.34

Exercised

(20,141
)

2.62

Forfeited

(289,169
)

8.54

Outstanding, September 30, 2019

1,424,018

$
6.09

7.84

$
1,842

Vested and exercisable, September 30, 2019

854,952

$
6.20

7.45

$
1,024

Vested and expected to vest, September 30, 2019

1,308,083

$
6.15

7.76

$
1,661

	NUMBER OF SHARES			WEIGHTED- AVERAGE EXERCISE PRICE		WEIGHTED- AVERAGE REMAINING CONTRACTUAL TERM		AGGREGATE INTRINSIC VALUE
Outstanding, December 31, 2019		1,439,518		$	6.09
Granted		763,702			6.32
Exercised		(115,671	)		6.18
Forfeited		(57,706	)		9.97
Outstanding, June 30, 2020		2,029,843		$	6.06		8.08	$	4,128
Vested and exercisable, June 30, 2020		956,575		$	5.69		7.00	$	2,435
Vested and expected to vest, June 30, 2020		1,669,947		$	6.01		7.80	$	3,605

Of the options granted in the six months ended June 30, 2020, 226,110 were performance-based options. Vesting of these performance-based options is contingent on the occurrence of certain regulatory and commercial milestones. The Company is recognizing the expense as straight-line over the expected performance achievement term.

The following table summarizes information about RSU activity during the ~~nine~~six months ended ~~September~~June 30, ~~2019:~~2020:

	RSUs		AVERAGE GRANT DATE FAIR VALUE (IN DOLLARS PER SHARE)		RSUs			AVERAGE GRANT DATE FAIR VALUE (IN DOLLARS PER SHARE)
Outstanding, December 31, 2018		—	$	—
Outstanding, December 31, 2019						160,900		$	3.25
Granted		160,900		1.43		—			—
Vested		—		—		(80,450	)		3.25
Forfeited		—		—		—			—
RSUs outstanding at September 30, 2019		160,900	$	1.43
RSUs outstanding at June 30, 2020						80,450		$	3.25

The number of RSUs vested includes shares of common stock withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements. On June 30, 2020, 42,250 RSUs vested as a result of a regulatory milestone. 31,962 common shares were issued on July 2, 2020 related to the vesting event.

Unrecognized compensation expense related to unvested options as of ~~September~~June 30, ~~2019~~2020 was ~~$1.8~~$2.6 million and will be recognized over the remaining vesting periods of the underlying awards. The weighted-average period over which such compensation is expected to be recognized is ~~1.9~~2.0 years. Unrecognized compensation expense related to unvested RSUs as of ~~September~~June 30, ~~2019~~2020 was ~~$116,000~~$177,000 and will be recognized over the remaining vesting periods of the underlying awards. The weighted-average period over which such compensation is expected to be recognized is ~~1.3~~0.6 years.

During the nine months ended September 30, 2019, as part of the restructuring plan (Note 1), the Company extended the exercise period to one year for 55,677 vested options and for two years for 85,432 vested options of those affected, with a weighted average exercise price of $8.41, and recorded incremental stock-based compensation expense of $70,000.

The Company recorded stock-based compensation expense in the following expense categories of its accompanying condensed consolidated statements of operations and comprehensive loss for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2019~~2020 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2018		2019		2018		2019		2019		2020		2019		2020
Research and development	$	154	$	75	$	394	$	215	$	72	$	177	$	140	$	321
General and administrative		409		258		1,288		799		254		444		541		808
Total	$	563	$	333	$	1,682	$	1,014	$	326	$	621	$	681	$	1,129

The Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic, Fair Value Measurements and Disclosures (“ASC 820”), provides a fair value hierarchy, which classifies fair value measurements based on the inputs used in measuring fair value. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The three levels of the fair value hierarchy are described below:

Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2—Valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3—Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and observable.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The carrying values of the Company’s cash and restricted cash, prepaid expenses, value added tax, or VAT, receivable and deposits approximate their fair values due to their short-term nature. The carrying value of the Company’s loan payable was considered a reasonable estimate of fair value because the Company’s interest rate is near current market rates for instruments with similar characteristics.

The following table summarizes the Company’s assets ~~and liabilities~~ as of ~~September~~June 30, ~~2019~~2020 that are measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values (in thousands):

	TOTAL		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		TOTAL		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Assets
Cash equivalents	$	62,549	$	62,549	$	—	$	—	$	78,165	$	78,165	$	—	$	—
Total cash equivalents										78,165		78,165		—		—

United States Treasury securities										35,973		35,973		—		—
Mortgage-backed securities										4,496		—		4,496		—
Investments										40,469		35,973		4,496		—

Total	$	62,549	$	62,549	$	—	$	—	$	118,634	$	114,138	$	4,496	$	—
Liabilities:
Derivative liability	$	766	$	—	$	—	$	766
Total	$	766	$	—	$	—	$	766

The fair value of the derivative liability recognized in connection with the Company’s 2019 Loan Agreement (Note 8) was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The fair value of the derivative liability was determined using the probability-weighted expected return method (“PWERM”), which considered as inputs the timing and probability of occurrence of an exit event, the amount of the payment, and the risk-free discount rate reflecting the expected risk profile for each of the potential settlement scenarios.

In May 2017, the Company entered into a loan and security agreement (the “2017 Loan Agreement”), with Solar Capital Ltd. and Silicon Valley Bank (together, the “Lenders”), for $10.0 million. The 2017 Loan Agreement had a maturity date of May 1, 2021. Debt issuance costs for the 2017 Loan Agreement were to be amortized to interest expense over the remaining term of the 2017 Loan Agreement using the effective-interest method.

The interest rate under the 2017 Loan Agreement was ~~LIBOR~~the London Inter-bank Offered Rate (“LIBOR”) plus 8.45%. The initial interest-only period was until November 30, 2018, followed by a 30-month principal and interest period. The First Amendment to the Loan and Security Agreement, entered into in November 2018, extended the interest-only period through May 2019. The Third Amendment to the Loan and Security Agreement, entered into in May 2019, extended the interest-only period through August 2019, with the ability to further extend the interest only period to November 2019. Pursuant to the 2017 Loan Agreement, the Company provided a first priority security interest in all existing and after-acquired assets, excluding intellectual property, owned by the Company.

For the three and ~~nine~~six months ended ~~September~~June 30, 2019, the Company recorded ~~$53,000~~$66,000 and ~~$169,000,~~$116,000, respectively, related to the amortization of debt discount associated with the 2017 Loan Agreement. ~~For the three and nine months ended September 30, 2018 the Company recorded $68,000 and $212,000, respectively, related to the amortization of debt discount associated with the 2017 Loan Agreement.~~

The 2017 Loan Agreement allowed the Company to voluntarily prepay all (but not less than all) of the outstanding principal at any time. A prepayment premium of 1% would be assessed on the outstanding principal. A final payment fee of $250,000 was due upon the earlier to occur of the maturity date or prepayment of such borrowings. The final payment fee was increased to $325,000 in the First Amendment to the 2017 Loan Agreement. For the three and ~~nine~~six months ended ~~September~~June 30, 2019, the Company recorded ~~$23,000~~$27,000 and ~~$80,000,~~$57,000, respectively, related to the amortization of the final payment fee associated with the 2017 Loan Agreement. For the three and nine months ended September 30, 2018, the Company recorded $22,000 and $66,000, respectively, related to the amortization of the final payment fee associated with the 2017 Loan Agreement.

In September 2019, the Company ~~paid~~replaced the 2017 Loan Agreement with a new $20.0 million term loan with the Lenders (the “2019 Loan Agreement”). The restructured four-year term loan facility allows for an expansion of the 2017 Loan Agreement. Some of the proceeds from the 2019 Loan Agreement were used to pay off the ~~outstanding balance~~2017 Loan Agreement including the final fee of $325,000. The 2019 Loan Agreement extends the term of the credit facility until September 17, 2023. The payoff of the 2017 Loan Agreement ~~including accrued interest,~~ ~~and entered into the 2019 Loan Agreement for $20.0 million.~~ ~~The payoff~~ was treated as a modification of the debt. ~~The 2019 Loan Agreement has a maturity date of September 17, 2023.~~ Debt issuance costs for the 2019 Loan Agreement, including unamortized issuance costs for the 2017 Loan Agreement, will be amortized to interest expense over the remaining term of the 2019 Loan Agreement using the effective-interest method.

The interest rate under the 2019 Loan Agreement is the higher of (i) LIBOR plus 7.95% or (ii) 10.18% and there is an interest-only period until September 30, 2021. The rate at ~~September~~June 30, ~~2019~~2020 was 10.18%. Pursuant to the 2019 Loan Agreement, the Company provided a first priority security interest in substantially all ~~existing and after-acquired~~of the Company’s assets, ~~owned by the Company,~~ including ~~all~~ intellectual property, ~~and~~ subject to certain exceptions.

The Company entered into ~~the~~an Exit Agreement in connection with the 2019 Loan Agreement which provides for an aggregate payment of 4% of the loan commitment, or $800,000, to the lenders upon the occurrence of an exit ~~event.~~event (the “Exit Fee). The Company concluded that the exit payment obligation met the definition of a derivative that was required to be accounted for as a separate unit of accounting. The Company recorded the issuance-date fair value of the derivative liability of $763,000 as a debt discount and as a derivative liability in the Company’s balance sheet. The derivative liability is re-measured at each balance sheet date and any changes in estimated fair value is recorded as other income (expense). The Company paid the Exit Fee during the six months ended June 30, 2020 in conjunction with the Company’s public offering, which was deemed to be an exit event pursuant to the Exit Agreement (Note 10). Prior to the public offering, the Company recorded $30,000 in non-cash expense as a fair value adjustment to the derivative liability in 2020.

As of ~~September~~June 30, ~~2019,~~2020, unpaid borrowings under the 2019 Loan Agreement totaled $20.0 million. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, the Company recorded ~~$5,000~~$85,000 and $166,000, respectively, related to the amortization of debt discount associated with the 2019 Loan Agreement.

The 2019 Loan Agreement allows the Company to voluntarily prepay all (but not less than all) of the outstanding principal at any time. A prepayment premium of 3% or 1% through the one-year anniversary and the two-year anniversary, respectively, would be assessed on the outstanding principal. After the two-year anniversary, a 0.5% prepayment premium would be assessed on the outstanding principal. A final payment fee of $500,000 is due upon the earlier to occur of the maturity date or prepayment of such borrowings. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, the Company recorded ~~$6,000~~$40,000 and $80,000, respectively, related to the amortization of the final payment fee associated with the 2019 Loan Agreement.

In an event of default under the 2019 Loan Agreement, the interest rate will be increased by 5% and the balance under the loan may become immediately due and payable at the option of the lenders.

The 2019 Loan Agreement includes restrictions on, among other things, the Company’s ability to incur additional indebtedness, change the name or location of the Company’s business, merge with or acquire other entities, pay dividends or make other distributions to holders of its capital stock, make certain investments, engage in transactions with affiliates, create liens, sell assets or pay subordinated debt.

Total term loan and unamortized debt discount balances are as follows (in thousands):

	September 30, 2019			June 30, 2020
Face value	$	20,000		$	20,000
Less: discount		(1,158	)		(924	)
Total	$	18,842		$	19,076
Less: current portion		—			-
Total	$	18,842		$	19,076

As of ~~September~~June 30, ~~2019,~~2020, future principal payments due under the 2019 Loan Agreement are as follows (in thousands):

On August 23, 2019, the Company entered into an Open Market Sale Agreement^SM (“ATM Agreement”), with Jefferies LLC (“Jefferies”) with respect to an at-the-market offering program under which the Company ~~may~~could offer and sell ~~from time to time at its sole discretion,~~ shares of its common stock ~~par value $0.0001 per share~~ (the “ATM Shares”), having an aggregate offering price of up to $15.0 million through Jefferies as its sales agent. The offering and sale of ATM Shares ~~by the Company under the ATM Agreement will be and is being~~were made pursuant to the Company’s shelf registration statement on Form S-3, which was declared effective by the SEC on February 11, ~~2019.~~

Subject to the terms and conditions of the ATM Agreement, Jefferies will use its commercially reasonable efforts to sell the ATM Shares, based upon instructions from the Company, consistent with its normal trading and sales practices.2019 (the “Registration Statement”). The Company ~~will~~agreed to pay Jefferies a commission equal to 3.0% of the gross sales proceeds of such ATM Shares.

During the three months ended ~~September 30, 2019,~~March 31, 2020, the Company sold a total of ~~40,300~~1,502,892 ATM Shares under the ATM Agreement, in the open market, at ana weighted average gross selling price of ~~$6.63~~$7.13 per share for net proceeds of ~~$259,000.~~

~~During~~$10.4 million, which completed the ~~three months ended September 30, 2019, the~~program. The Company ~~incurred $189,000 of legal, accounting and other~~charged $135,000 in costs related to establish and activate the ~~ATM program. The Company charged $3,000 of these costs~~program against additional paid in capital upon issuance of shares ~~during~~in 2020.

In May 2020, the ~~three months ended September 30,2019.~~Company completed an underwritten public offering of 5,780,347 shares of its common stock (the “2020 Offering Shares”), pursuant to the Registration Statement. The 2020 Offering Shares were sold at an offering price of $8.65 per share, resulting in net proceeds of $46.6 million, after deducting underwriting discounts, commissions and offering expenses. In addition, the underwriters of the offering were granted the option for a period of 30 days to purchase up to an additional 867,052 shares of common stock at $8.65 per share. In June 2020, the underwriters exercised their option and purchased an additional 440,242 shares of common stock at $8.65 per share, resulting in additional net proceeds to the Company of $3.6 million, after deducting underwriting discounts, commissions and offering expenses.

The Company leases office facilities and equipment under long-term, non-cancelable operating lease agreements. The leases expire at various dates through 2022 and do not include renewal options.

Certain leases provide for increases in future minimum annual rental payments as defined in the lease agreements. The leases generally also include real estate taxes and common area maintenance ~~(“CAM”)~~ charges in the annual rental payments.

Pursuant to the terms of its lease agreement for the Company’s headquarters, the Company obtained a letter of credit in the amount of approximately $182,000 as security on the lease obligation. The letter of credit is listed as restricted cash on the Company’s consolidated balance sheets.

Short-term leases are leases having a term of twelve months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related lease asset or liability for such leases.

The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of ~~September~~June 30, ~~2019~~2020 (in thousands):

Year ended:
December 31, 2019	$	131
December 31, 2020		528		$	266
December 31, 2021		537			537
December 31, 2022		496			496
Total minimum lease payments		1,692			1,299
Less imputed interest		(247	)		(147	)
Total	$	1,445		$	1,152

	Nine Months Ended September 30,						Six Months Ended June 30,
	2018			2019			2019			2020
Lease cost:
Operating lease cost	$	348		$	368		$	246		$	243
Short-term lease cost		6			6			4			-
Sublease income		(26	)		(38	)		(25	)		(25	)
Total lease cost	$	328		$	336		$	225		$	218
Other information
Cash paid for amounts included in the measurement of lease liabilities	$	302		$	384		$	254		$	267
Operating cash flows from operating leases	$	55		$	(21	)	$	(13	)	$	(20	)
Weighted-average remaining lease term - operating leases	4.2 years			3.2 years			3.4 years			2.4 years
Weighted-average discount rate - operating leases		10.1	%		10.1	%		10.1	%		10.1	%

In February 2018, the Company signed a sublease agreement for its facility located in Lexington, Massachusetts. The lease commenced on April 1, 2018 and has an initial term of three years with an extension term through December 2022. In February 2020, the sublease was extended until December 31, 2022.

As part of the Company’s research and development efforts, the Company enters into research and development agreements with ~~unrelated~~certain companies. These agreements contain varying terms and provisions which include fees and milestones to be paid by the Company. Some of these agreements also contain provisions which require the Company to make payments for exclusivity in the development of products in the area of loop diuretics.

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies.

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

Due to the discontinuation of use of the sc2Wear Infusor, the Company has received notice of termination costs related to the program. The Company has accrued all costs for which it either believes it is contractually liable or for which the Company has negotiated settlement agreements in good faith. However, certain of the Company’s vendors have claimed or billed for additional costs for which the Company believes it is not obligated. At this time, the Company estimates that additional termination costs, if any, will be immaterial to the Company’s financial statements.

The following discussion and analysis of our financial condition and the results of operations should be read in conjunction with our financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q (“Quarterly Report”) and our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 (the “Annual Report”) filed with the Securities and Exchange Commission (the “SEC”) on March ~~21, 2019.~~24, 2020. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, 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 in our Annual Report and in this Quarterly 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.

We are a pharmaceutical company focused on developing and commercializing products that have the potential to optimize the delivery of infused therapies, advance patient care and reduce healthcare costs. Our strategy is designed to enable the subcutaneous administration of therapies that have previously been limited to intravenous, or IV, delivery. By moving delivery away from the high-cost healthcare settings typically required for IV administration, we believe our technology ~~reduces~~has the potential to reduce overall healthcare costs and advances the quality and convenience of care. Our lead product candidate, FUROSCIX, consists of our novel formulation of furosemide delivered via an on-body infusor and is under development for treatment of congestion in patients with worsening heart failure who display reduced responsiveness to oral diuretics and do not require hospitalization.

We ~~filed a~~resubmitted our new drug application, or NDA, for FUROSCIX, with the U.S. Food and Drug Administration, or FDA, ~~in August 2017. On~~on June ~~11, 2018, we received~~30, 2020. The resubmission was a response to a Complete Response Letter, or CRL, from the FDA ~~for~~with respect to our NDA submitted in August 2017, which indicated that, among other things, certain device modifications to our infusor were required. Based on ~~the outcome of~~ our interactions with the FDA, ~~including clarification on an additional dose validation study and proposed~~which required device modifications necessary to advance FUROSCIX using the existing ~~delivery~~ technology, we ~~have~~ decided to ~~discontinue use of the sc2Wear Infusor, and~~ transition to our next generation device. The resubmission incorporated our next generation device which is being developed inthrough a partnership with West Pharmaceutical Services, Inc., or West, using its proprietary, wearable, SmartDose^®~~drug delivery system. We held a Type C meeting with the FDA on June 18, 2019 and based on the results of that meeting we anticipate being able to resubmit the FUROSCIX NDA with the SmartDose~~ drug delivery system ~~by mid-year 2020.~~(SmartDose is a registered trademark of West Pharma. Services IL, Ltd., a subsidiary of West, in the United States and other jurisdictions). On July 23, 2020, the FDA accepted the resubmission of our NDA and assigned a Prescription Drug User Fee Act target action date of December 30, 2020 for completion of its review of the NDA.

As of ~~September~~June 30, ~~2019,~~2020, we had an accumulated deficit of ~~$118.6~~$144.8 million. We expect to continue to incur net losses for the foreseeable future as we develop the infrastructure to commercialize our products, if approved, in the United States, including building our sales and marketing organization, continue research and development efforts, ~~clinical trial activities,~~engaging in scale-up manufacturing and ~~seek~~seeking regulatory approval for new product candidates and ~~product~~ enhancements. We will need additional funding to pay expenses ~~relating~~related to our operating activities, including selling, general and administrative expenses and research and development expenses. Adequate funding may not be available to us on acceptable terms, or at all. Our failure to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on our business, results of operations or financial condition.

A new strain of novel coronavirus which causes a severe respiratory disease (“COVID-19”) was identified in 2019, and subsequently declared a pandemic by the World Health Organization, affecting the populations of the United States as well as the rest of the world. In response to the pandemic, we transitioned our workforce to work from home in March 2020. In July 2020, we opened our offices for limited access to employees integrating all recommendations for workplace safety, including appropriate protocols to ensure social-distancing. The health of our employees remains a top priority and we are continuing to monitor the impact of COVID-19 and government regulations.

To date, the third parties that perform our manufacturing, assembly, packaging and testing of our products have generally remained operational. The extent of the impact of the COVID-19 pandemic on the timing of the FDA’s review of the FUROSCIX NDA and our operational and financial performance will depend on future developments, including the duration, severity and spread of the pandemic, related restrictions on travel and transportation and other actions that may be taken by governmental authorities, the impact to the business of our suppliers or customers, and other items identified under “Risk Factors” below, all of which are uncertain and cannot be predicted. An extended period of global supply chain and economic disruption could materially affect our business, results of operations, access to sources of liquidity and financial condition.

Research and development, or R&D, expenses consist of the cost of engineering, clinical trials, regulatory and medical affairs and quality assurance associated with developing our proprietary technology and product candidates. R&D expenses consist primarily of:

We expense R&D costs as incurred. Given the emphasis to date on our lead product candidate FUROSCIX, our R&D expenses have not been allocated on a program-specific basis. In the future, we expect R&D expenses to increase in absolute dollars as we continue to develop new products and enhance existing products and technologies. We anticipate that our expenses will increase significantly as we:

General and administrative, or G&A, expenses consist of employee-related expenses, including salaries, benefits, travel expense and stock-based compensation expense for personnel in executive, finance, commercial, human resources, facility operations and administrative functions. Other G&A expenses include pre-approval promotional activities, marketing, conferences and trade shows, professional services fees, including legal, audit and tax fees, insurance costs, general corporate expenses and allocated facilities-related expenses.

If we receive FDA approval for FUROSCIX incorporating the next generation SmartDose drug delivery system, we anticipate that our G&A expenses will increase as we continue to build our corporate and commercial infrastructure to support the development and commercial launch of FUROSCIX in the United States.

Comparison of Three Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2019~~2020

The following table summarizes our results of operations for the three months ended ~~September~~June 30, ~~2018~~2019 and ~~2019~~2020 (in thousands):

	Three Months Ended September 30,						Increase			Three Months Ended June 30,						Increase
	2018			2019			(Decrease)			2019			2020			(Decrease)
Operating expenses:
Research and development	$	3,896		$	4,293		$	397		$	5,496		$	5,139		$	(357	)
General and administrative		1,945			1,996			51			1,839			2,537			698
Total operating expenses		5,841			6,289			448			7,335			7,676			341
Loss from operations		(5,841	)		(6,289	)		448			(7,335	)		(7,676	)		341
Other (expense) income		(5	)		83			88
Other expense											(14	)		(1	)		(13	)
Interest income		445			397			(48	)		463			21			(442	)
Interest expense		(360	)		(398	)		38			(369	)		(639	)		270
Net loss	$	(5,761	)	$	(6,207	)	$	446		$	(7,255	)	$	(8,295	)	$	1,040

Research and development expenses. R&D expenses were ~~$4.3~~$5.1 million for the three months ended ~~September~~June 30, ~~2019,~~2020, compared to ~~$3.9~~$5.5 million for the three months ended ~~September~~June 30, ~~2018.~~2019. The ~~increase~~decrease of $0.4 million was primarily attributable to a ~~$0.9~~$1.5 million ~~increase~~decrease in device development costs and a $0.1 million decrease in pharmaceutical preparation ~~costs and~~costs. The decrease was partially

offset by a $0.6 million increase in ~~device development costs. The increase was partially offset by a $0.6 million decrease in employee-related costs, a $0.3 million decrease in supplies and~~ contract services for clinical and medical affairs, a $0.3 million increase in employee-related costs and a ~~$0.2~~$0.3 million ~~decrease~~increase in regulatory ~~consulting.~~costs.

General and administrative expenses. G&A expenses were ~~$2.0~~$2.5 million for the three months ended ~~September~~June 30, ~~2019,~~2020, compared to ~~$1.9~~$1.8 million for the three months ended ~~September~~June 30, ~~2018.~~2019. The increase of ~~$0.1~~$0.7 million was primarily attributable to a $0.4 million increase in employee-related costs, a $0.2 million increase in ~~legal~~public company costs, ~~a $0.1 million increase in~~including director and officer’s insurance and investor and public relations costs, ~~related to commercial preparation,~~ and a $0.1 million increase in ~~public company related costs. The increase was partially offset by a $0.3 million decrease in employee-related~~legal costs.

Other ~~(expense) income.~~expense. Other ~~income~~expense was ~~$83,000~~$1,000 for the three months ended ~~September~~June 30, ~~2019,~~2020, compared to ~~expense of $5,000~~$14,000 for the three months ended ~~September~~June 30, ~~2018.~~2019. The ~~increase~~decrease in ~~income~~expense of ~~$88,000~~$13,000 was primarily attributable to foreign exchange gains due to foreign currency fluctuations.

Interest income. Interest income was ~~$397,000~~$21,000 for the three months ended ~~September~~June 30, ~~2019~~2020 compared to ~~$445,000~~$463,000 for the three months ended ~~September~~June 30, ~~2018.~~2019. The decrease of ~~$48,000~~$442,000 was primarily attributable to lower interest rates on our money market fund holdings.

Interest expense. Interest expense ~~increased $38,000 from~~was $0.6 million for the three months ended ~~September~~June 30, ~~2018~~2020 compared to $0.4 million for the three months ended ~~September~~June 30, 2019. ~~This~~The increase was ~~attributable~~due to ~~increased rates and balances on~~the restructuring of the term loan in September 2019 with Solar Capital Ltd. and Silicon Valley ~~Bank.~~Bank, which increased the principal from $10.0 million to $20.0 million.

Comparison of ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2019~~2020

The following table summarizes our results of operations for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2019~~2020 (in thousands):

	Nine Months Ended September 30,						Increase			Six Months Ended June 30,						Increase
	2018			2019			(Decrease)			2019			2020			(Decrease)
Operating expenses:
Research and development	$	12,799		$	16,314		$	3,515		$	12,020		$	9,285		$	(2,735	)
General and administrative		11,645			6,158			(5,487	)		4,162			5,040			878
Total operating expenses		24,444			22,472			(1,972	)		16,182			14,325			(1,857	)
Loss from operations		(24,444	)		(22,472	)		(1,972	)		(16,182	)		(14,325	)		(1,857	)
Other (expense) income		(58	)		61			119
Other expense											(22	)		(32	)		10
Interest income		1,221			1,350			129			953			245			(708	)
Interest expense		(1,062	)		(1,121	)		59			(723	)		(1,275	)		552
Net loss	$	(24,343	)	$	(22,182	)	$	(2,161	)	$	(15,974	)	$	(15,387	)	$	(587	)

Research and development expenses. R&D expenses were ~~$16.3~~$9.3 million for the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, compared to ~~$12.8~~$12.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018.~~2019. The ~~increase~~decrease of ~~$3.5~~$ 2.7 million was primarily attributable to ~~a $4.0 million increase~~one-time costs in ~~device development costs,~~2019, including $1.7 million in ~~unrecoverable component costs~~materials related to the ~~sc2Wear Infusor, $0.8~~first-generation device and $1.0 million ~~increase~~ in severance costs, and a ~~$0.7~~decrease of $2.0 million ~~increase~~ in ~~pharmaceutical preparation costs.~~device development costs in the six months ended June 30, 2020. The ~~increase~~decrease was partially offset by a ~~$1.9~~$0.9 million ~~decrease~~increase in ~~employee-related costs, a $1.6 million decrease in supplies and~~ contract services for clinical and medical affairs, a $0.6 million increase in employee-related costs, a $0.3 million increase in regulatory costs and a ~~$0.2~~$0.1 million ~~decrease~~increase in ~~regulatory consulting.~~pharmaceutical development costs.

General and administrative expenses. G&A expenses were ~~$6.2~~$5.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, compared to ~~$11.6~~$4.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018.~~2019. The ~~decrease~~increase of ~~$5.4~~$0.9 million was primarily attributable to a ~~$3.1~~$ 0.7 million ~~decrease~~increase in employee-related costs, a ~~$2.2~~$0.3 million ~~decrease~~increase in public company costs, ~~related to commercial preparation,~~including director and officer’s insurance and investor and public relations costs, and a ~~decrease of~~ $0.2 million increase in legal costs. The ~~decrease~~increase was partially offset by ~~an increase of $0.2~~$0.4 million in ~~public company costs.~~severance costs recognized in 2019.

Other ~~(expense) income.~~expense. Other ~~income~~expense was ~~$61,000~~$32,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, compared to ~~expense of $58,000~~$22,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2018.~~2019. The increase in ~~income~~expense of ~~$119,000~~$10,000 was primarily attributable to the fair value adjustment to the derivative liability. The increase was offset by foreign exchange gains due to ~~activity denominated in foreign currency combined with~~ foreign currency fluctuations.

Interest income. Interest income was ~~$1.4~~$0.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, compared to ~~$1.2~~$1.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018.~~2019. The ~~increase~~decrease of ~~$129,000~~$0.7 million was primarily attributable to ~~higher returns due to~~lower interest rates on our money market fund holdings.

Interest expense. Interest expense ~~increased $59,000 from the nine months ended September 30, 2018 to $1.1~~was $1.3 million for the ~~nine~~six months ended ~~September~~June 30, 2020, compared to $0.7 million for the six months ended June 30, 2019. ~~This~~The increase was ~~attributable~~due to ~~increased rates on~~ the ~~$10.0 million loan entered into in May 2017 and the additional $10.0 million borrowed in~~restructuring of the term loan ~~modification~~in September 2019 with Solar Capital Ltd. and Silicon Valley Bank, ~~in September 2019.~~which increased the principal from $10.0 million to $20.0 million.

We have funded our operations from inception through ~~September~~June 30, ~~2019~~ 2020 primarily through the sale of shares of our common stock ~~in our initial public offering~~ and, prior to that, through the private placement of our preferred stock and the incurrence of ~~debt.~~debt. As of ~~September~~June 30, ~~2019,~~ 2020, we had received net cash proceeds of $92.7 million from our initial public offering, $56.7 million from sales of our preferred stock, net cash proceeds of $18.8 million from borrowings under our term loan, net cash proceeds of $13.5 million ~~in net proceeds from convertible notes payable and $259,000~~ from sales of ~~our~~convertible notes, net cash proceeds of $50.2 million from the public offering and net cash proceeds of $14.4 million from the sale of common stock ~~under the ATM Agreement. Additionally,~~ in ~~September 2019 we entered into a new $20.0 million loan and security agreement with Solar Capital Ltd. and Silicon Valley Bank to refinance~~ our ~~prior $10.0 million 2017 Loan Agreement.~~at-the-market offering. As of ~~September~~June 30, ~~2019,~~2020, we had cash, cash equivalents and restricted cash of ~~$83.7~~$79.0 million and short term investments of $40.5 million.

We expect to incur substantial additional expenditures in the near future to support our ongoing activities and our plans to obtain regulatory approval for FUROSCIX incorporating the next generation SmartDose drug delivery system. We believe our existing unrestricted cash is sufficient to fund our operations through at least the next 12 months from the date of this quarterly report. We expect our costs and expenses to increase in the future as we prepare for and, if approved, commence U.S. commercialization of FUROSCIX, including the ~~building~~development of ~~our commercial infrastructure,~~a direct sales force, and as we continue to make substantial expenditures on research and development, including to increase our manufacturing capacity and for conducting clinical trials of our product candidates. Additionally, we will incur additional costs as a result of operating as a public company. Our future capital requirements will depend on many factors, including:

Additional financing may not be available on a timely basis on terms acceptable to us, or at all. We may raise funds in equity, royalty-based or debt financings or enter into additional credit facilities in order to access funds for our capital needs. If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution in their percentage ownership of our company, and any new equity securities we issue could have rights, preferences and privileges senior to those of holders of our common stock. If we raise additional funds through royalty-based financing arrangements, we will likely agree to relinquish rights to potentially valuable future revenue streams and may agree to covenants that restrict our operations or strategic flexibility. Any debt financing obtained by us in the future would cause us to incur additional debt service expenses and could include restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and pursue business opportunities. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, we may terminate or delay the development of one or more of our products, delay clinical trials necessary to market our products, or delay establishment or expansion of sales and marketing capabilities or other activities necessary to commercialize our products.

The following table summarizes our sources and uses of cash for each of the periods presented:

	Nine Months Ended September 30,						Six Months Ended June 30,
(in thousands)	2018			2019			2019			2020
Net cash (used in) provided by:
Operating activities	$	(23,011	)	$	(15,607	)	$	(10,029	)	$	(13,705	)
Investing activities		(41	)		—			-			(40,469	)
Financing activities		53			9,691			18			60,410
Net decrease in cash and restricted cash	$	(22,999	)	$	(5,916	)
Net (decrease) increase in cash, cash equivalents and restricted cash							$	(10,011	)	$	6,236

During the ~~nine~~six months ended ~~September~~June 30, 2020, net cash used in operating activities was $13.7 million, consisting primarily of a net loss of $15.4 million. This was offset by non-cash charges of $1.6 million and an increase in net operating liabilities of $0.1 million. The non-cash charges primarily consisted of depreciation, amortization related to our right of use leased assets, stock-based compensation expense, non-cash interest expense related to amortization of debt discount associated with the 2019 Loan Agreement and the fair value adjustment to the derivative liability.

During the six months ended June 30, 2019, net cash used in operating activities was ~~$15.6~~$10.0 million, consisting primarily of a net loss of ~~$22.2~~$16.0 million. This was offset by non-cash charges of ~~$1.5~~$1.0 million and an increase in net operating liabilities of ~~$5.0~~$4.9 million. The non-cash charges primarily consisted of depreciation, amortization related to our right of use leased assets, stock-based compensation expense and non-cash interest expense related to amortization of debt discount associated with the 2017 Loan Agreement. The increase in net operating liabilities related to accrued expenses for device ~~and pharmaceutical~~ development costs and ~~materials as well as the amortization of prepaid insurance.~~

During the nine months ended September 30, 2018, net cash used in operating activities was $23.0 million, consisting primarily of a net loss of $24.3 million and a decrease in net operating liabilities of $0.9 million. This was offset by non-cash charges of $2.2 million. The decrease in net operating liabilities primarily consisted of prepayments for device and pharmaceutical development and clinical trials, offset by receipt of a refund for Value Added Tax. The non-cash charges primarily consisted of depreciation, amortization related to our right of use leased assets, stock-based compensation expense and non-cash interest expense related to amortization of debt discount associated with the 2017 Loan Agreement.materials.

During the six months ended June 30, 2020, net cash used by investing activities was $40.5 million, consisting of purchases of short term investments.

There ~~were~~was no cash from investing activities during the ~~nine~~six months ended ~~September~~June 30, 2019.

~~During the nine months ended September 30, 2018, net cash used in investing activities consisted of purchases of property and equipment.~~

During the ~~nine~~six months ended ~~September~~June 30, 2020, net cash provided by financing activities was $60.4 million, consisting primarily of net proceeds of $50.2 million from the public offering, net proceeds of $10.4 million from the at-the-market offering and stock option exercises. The proceeds were offset by the $0.8 million Exit Fee associated with the 2019 Loan Agreement and tax obligations on the settlement of restricted stock units.

During the six months ended June 30, 2019, net cash provided by financing activities was ~~$9.7 million, consisting primarily of net proceeds from the 2019 Loan Agreement, net proceeds from sales made pursuant to the ATM Agreement, and stock option exercises.~~

~~During the nine months ended September 30, 2018, net cash provided by financing activities was $53,000,~~$18,000, consisting primarily of stock option exercises.

There were no material changes in our commitments under contractual obligations, as disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2018,~~2019, filed with the SEC on March ~~21, 2019.~~24, 2020.

Management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, expenses and related disclosures. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material. Our critical accounting policies are more fully described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2018,~~2019, filed with the SEC on March ~~21, 2019.~~24, 2020.

In April 2012, the Jumpstart Our Business Startups Act of 2012, or JOBS Act, was enacted. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected not to avail ourselves of this extended transition period and, as a result, we adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies. This election is irrevocable.

We are exposed to market risks related to changes in foreign currency exchange rates and interest rates.

We contract with vendors in foreign countries. As such, we have exposure to adverse changes in exchange rates of foreign currencies, principally the Swiss franc and the Euro, associated with our foreign transactions. We believe this exposure to be immaterial. We currently do not hedge against this exposure to fluctuations in exchange rates.

Our exposure to market risk also relates to interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates. As of ~~September~~June 30, ~~2019,~~2020, our aggregate outstanding indebtedness was $20.0 million, which bears interest at the rate ~~equal to~~at the higher of (i) LIBOR plus 7.95% or (ii) 10.18%. Due to the short-term duration and variable rate of our indebtedness, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our debt instruments.

Our management, with the participation of our principal executive officer and our principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures. Based on that evaluation of our disclosure controls and procedures as ~~of September~~June 30, ~~2019,~~ 2020, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures as of such date are effective at the reasonable assurance level. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial and accounting officer, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

There were no changes in our internal control over financial reporting during the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We are not currently aware of any such proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or results of operations.

Investing in our common stock involves a high degree of risk. Information regarding risk factors appears in Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, which was filed with the SEC on March ~~21, 2019. There~~24, 2020 (the “2019 Annual Report on Form 10-K”), and in Item 1A of our Quarterly Report on Form 10-Q for the period ended March 31, 2020, which was filed with the SEC on May 12, 2020 (the “March 31 Quarterly Report on Form 10-Q”). Aside from the below, there have been no material changes from the risk factors previously disclosed in ~~that~~the 2019 Annual Report on Form ~~10-K.~~10-K, as supplemented and amended by the risk factors disclosed in the March 31 Quarterly Report on Form 10-Q.

Disruptions at the FDA, the SEC and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

As of June 23, 2020, the FDA noted it was continuing to ensure timely reviews of applications for medical products during the COVID-19 pandemic in line with its user fee performance goals and conducting mission critical domestic and foreign inspections to ensure compliance of manufacturing facilities with FDA quality standards. However, the FDA may not be able to maintain this pace and delays or setbacks are possible in the future. On July 10, 2020, the FDA announced its goal of restarting domestic on-site inspections during the week of July 20, but such activities will depend on data about the virus’ trajectory in a given state and locality and the rules and guidelines that are put in place by state and local governments. The FDA has developed a rating system to assist in determining when and where it is safest to conduct prioritized domestic inspections. Regulatory authorities outside the U.S. may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic and may experience delays in their regulatory activities. We cannot guarantee that the FDA will be able to complete any required inspections or take other necessary actions with respect to our NDA by the Prescription Drug User Fee Act target action date of December 30, 2020. A delay in the review of our NDA could have a material impact on our results of operations.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001	SCPH	The Nasdaq Global Select Market

		Page

PART I – FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of December 31, ~~2018~~2019 and ~~September~~June 30, ~~2019~~2020	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~September~~June 30, ~~2019~~2020	2
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~September~~June 30, ~~2019~~2020	3
	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~September~~June 30, ~~2019~~2020	4
	Notes to Condensed Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19

Item 4.	Controls and Procedures	19

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	20
Item 1A.	Risk Factors	20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3.	Defaults Upon Senior Securities	20
Item 4.	Mine Safety Disclosures	20
Item 5.	Other Information	20
Item 6.	Exhibits	20

Exhibit Index		21
Signatures		22

Exhibit Number		Description

~~10.1~~
3.1		~~Loan~~Amendment No. 1 to the Company’s Amended and ~~Security Agreement, dated September 17, 2019,~~Restated Bylaws (incorporated by ~~and among scPharmaceuticals Inc., Solar Capital Ltd. and Silicon Valley Bank.(1)~~reference to the Registrant’s Current Report on Form 8-K (File No. 001-38293) filed on June 10, 2020)

31.1*		Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1†		Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*		XBRL Instance Document

101.SCH*		XBRL Taxonomy Extension Schema Document

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

	SCPHARMACEUTICALS INC.

Date: ~~November 12, 2019~~August 13, 2020	By:	/s/ John H. Tucker
		John H. Tucker
		President and Chief Executive Officer (Principal Executive Officer and Principal Financial Officer)

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
Emerging growth company	☒

	At June 30, 2020
Investments - Current:	Cost Basis		Accumulated Unrealized Gains		Accumulated Unrealized Losses		Fair Value
United States Treasury securities	$	35,973	$	-	$	-	$	35,973
Mortgage-backed securities		4,496		-		-		4,496
Total	$	40,469	$	-	$	-	$	40,469

	Amortized Cost		Fair Value
Due in one year or less	$	40,469	$	40,469
Total	$	40,469	$	40,469

Year ended:
December 31, 2021	$	2,500
December 31, 2022		10,000
December 31, 2023		7,500
Total	$	20,000