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Akouos (AKUS)

Document and Entity Information

Document and Entity Information - shares6 Months Ended
Jun. 30, 2020Jul. 31, 2020
Cover [Abstract]
Entity Registrant NameAKOUOS, INC.
Entity Central Index Key0001722271
Entity Current Reporting StatusNo
Entity Filer CategoryNon-accelerated Filer
Current Fiscal Year End Date--12-31
Entity Common Stock, Shares Outstanding34,370,648
Document Type10-Q
Document Period End DateJun. 30,
2020
Amendment Flagfalse
Document Fiscal Year Focus2020
Document Fiscal Period FocusQ2
Entity Shell Companyfalse
Entity Small Businesstrue
Entity Emerging Growth Companytrue
Entity Interactive Data CurrentYes
Entity Ex Transition Periodfalse

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in ThousandsJun. 30, 2020Dec. 31, 2019
Current assets:
Cash and cash equivalents $ 333,004 $ 25,078
Prepaid expenses and other current assets1,040 1,061
Total current assets334,044 26,139
Property and equipment, net12,694 11,492
Operating lease right-of-use assets6,099 6,214
Restricted cash1,317 1,317
Deferred offering costs0
Total assets354,154 45,162
Current liabilities:
Accounts payable2,130 339
Accrued expenses and other current liabilities6,072 4,962
Operating lease liabilities1,027 641
Total current liabilities9,229 5,942
Operating lease liabilities, net of current portion12,606 13,143
Other long‑term liabilities63 188
Total liabilities21,898 19,273
Commitments and contingencies (See Note 10)
Convertible preferred stock (Series Seed, Seed 1, A, and B), $0.0001 par value; no shares authorized at June 30, 2020 and 178,349,005 shares authorized at December 31, 2019; no shares issued and outstanding at June 30, 2020 and 178,349,005 shares issued and outstanding at December 31, 201958,690
Stockholders’ equity (deficit):
Common stock, $0.0001 par value; 200,000,000 shares authorized at June 30, 2020 and 235,000,000 shares authorized at December 31, 2019; 34,370,648 shares issued and outstanding at June 30, 2020 ; 997,165 shares issued and outstanding at December 31, 20193
Additional paid‑in capital388,340 323
Accumulated deficit(56,087)(33,124)
Total stockholders’ equity (deficit)332,256 (32,801)
Total liabilities, convertible preferred stock and stockholders’ equity (deficit) $ 354,154 $ 45,162

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / sharesJun. 30, 2020Dec. 31, 2019
CONSOLIDATED BALANCE SHEETS
Convertible preferred stock, Par value $ 0.0001 $ 0.0001
Convertible preferred stock, Shares authorized0 178,349,005
Convertible preferred stock, Shares issued0 178,349,005
Convertible preferred stock, Shares outstanding0 178,349,005
Preferred stock, Par value $ 0.0001 $ 0.0001
Preferred stock, Shares authorized5,000,000 0
Preferred stock, Shares issued0 0
Preferred stock, Shares outstanding0 0
Common stock, Par value $ 0.0001 $ 0.0001
Common stock, Shares authorized200,000,000 235,000,000
Common stock, Shares issued34,370,648 997,165
Common stock, Shares outstanding34,370,648 997,165

CONSOLIDATED STATEMENT OF OPERA

CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2020Jun. 30, 2019Jun. 30, 2020Jun. 30, 2019
Operating expenses:
Research and development $ 9,937 $ 4,366 $ 17,971 $ 7,509
General and administrative2,664 749 5,168 1,380
Total operating expenses12,601 5,115 23,139 8,889
Loss from operations(12,601)(5,115)(23,139)(8,889)
Other income (expense):
Change in fair value of preferred stock tranche liability3,013 753
Interest income80 100 180 228
Other income (expense), net(2)(2)(4)(5)
Total other income (expense), net78 3,111 176 976
Net loss and comprehensive loss $ (12,523) $ (2,004) $ (22,963) $ (7,913)
Net loss per share attributable to common stockholders, basic and diluted $ (11.14) $ (3.42) $ (25.05) $ (13.91)
Weighted‑average common shares outstanding, basic and diluted1,124,251 586,616 916,521 568,811

CONSOLIDATED STATEMENTS OF CONV

CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT - USD ($) $ in ThousandsCommon StockAdditional Paid‑in CapitalAccumulated DeficitConvertible preferred stockTotal
Balances at beginning of period at Dec. 31, 2018 $ 27,647
Convertible preferred stock, Shares outstanding, beginning of period at Dec. 31, 2018103,015,190
Balances at end of period at Mar. 31, 2019 $ 27,647
Convertible preferred stock, Shares outstanding, end of period at Mar. 31, 2019103,015,190
Balances at beginning of period at Dec. 31, 2018 $ 154 $ (7,383) $ (7,229)
Balances at beginning of period (in shares) at Dec. 31, 2018935,887
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options (in shares)197
Vesting of restricted common stock from early‑exercised stock options and sales of restricted common stock7 7
Stock‑based compensation expense18 18
Net loss(5,909)(5,909)
Balances at end of period at Mar. 31, 2019179 (13,292)(13,113)
Balances at end of period (in shares) at Mar. 31, 2019936,084
Balances at beginning of period at Dec. 31, 2018 $ 27,647
Convertible preferred stock, Shares outstanding, beginning of period at Dec. 31, 2018103,015,190
Balances at end of period at Jun. 30, 2019 $ 27,647
Convertible preferred stock, Shares outstanding, end of period at Jun. 30, 2019103,015,190
Balances at beginning of period at Dec. 31, 2018154 (7,383)(7,229)
Balances at beginning of period (in shares) at Dec. 31, 2018935,887
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss(7,913)
Balances at end of period at Jun. 30, 2019201 (15,296)(15,095)
Balances at end of period (in shares) at Jun. 30, 2019952,692
Balances at beginning of period at Mar. 31, 2019 $ 27,647
Convertible preferred stock, Shares outstanding, beginning of period at Mar. 31, 2019103,015,190
Balances at end of period at Jun. 30, 2019 $ 27,647
Convertible preferred stock, Shares outstanding, end of period at Jun. 30, 2019103,015,190
Balances at beginning of period at Mar. 31, 2019179 (13,292)(13,113)
Balances at beginning of period (in shares) at Mar. 31, 2019936,084
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options13 13
Issuance of common stock upon exercise of stock options (in shares)16,608
Vesting of restricted common stock from early‑exercised stock options and sales of restricted common stock(9)(9)
Stock‑based compensation expense18 18
Net loss(2,004)(2,004)
Balances at end of period at Jun. 30, 2019201 (15,296)(15,095)
Balances at end of period (in shares) at Jun. 30, 2019952,692
Balances at beginning of period at Dec. 31, 2019 $ 58,690 $ 58,690
Convertible preferred stock, Shares outstanding, beginning of period at Dec. 31, 2019178,349,005 178,349,005
Increase (Decrease) in Temporary Equity [Roll Forward]
Issuance of convertible preferred stock, net $ 104,837
Issuance of convertible preferred stock, net (in shares)221,399,223
Balances at end of period at Mar. 31, 2020 $ 163,527
Convertible preferred stock, Shares outstanding, end of period at Mar. 31, 2020399,748,228
Balances at beginning of period at Dec. 31, 2019323 (33,124) $ (32,801)
Balances at beginning of period (in shares) at Dec. 31, 2019997,165
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options7 7
Issuance of common stock upon exercise of stock options (in shares)13,630
Vesting of restricted common stock from early‑exercised stock options and sales of restricted common stock12 12
Stock‑based compensation expense111 111
Net loss(10,440)(10,440)
Balances at end of period at Mar. 31, 2020453 (43,564)(43,111)
Balances at end of period (in shares) at Mar. 31, 20201,010,795
Balances at beginning of period at Dec. 31, 2019 $ 58,690 $ 58,690
Convertible preferred stock, Shares outstanding, beginning of period at Dec. 31, 2019178,349,005 178,349,005
Convertible preferred stock, Shares outstanding, end of period at Jun. 30, 20200
Balances at beginning of period at Dec. 31, 2019323 (33,124) $ (32,801)
Balances at beginning of period (in shares) at Dec. 31, 2019997,165
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon completion of initial public offering, net of commissions, underwriting discounts and offering costs223,800
Conversion of Stock, Shares Issued18,969,672
Net loss(22,963)
Balances at end of period at Jun. 30, 2020 $ 3 388,340 (56,087) $ 332,256
Balances at end of period (in shares) at Jun. 30, 202034,370,648
Balances at beginning of period at Mar. 31, 2020 $ 163,527
Convertible preferred stock, Shares outstanding, beginning of period at Mar. 31, 2020399,748,228
Increase (Decrease) in Temporary Equity [Roll Forward]
Conversion of convertible preferred stock to common stock $ (163,527)
Conversion of convertible preferred stock, shares(399,748,228)
Convertible preferred stock, Shares outstanding, end of period at Jun. 30, 20200
Balances at beginning of period at Mar. 31, 2020453 (43,564) $ (43,111)
Balances at beginning of period (in shares) at Mar. 31, 20201,010,795
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options31 31
Issuance of common stock upon exercise of stock options (in shares)15,181
Vesting of restricted common stock from early‑exercised stock options and sales of restricted common stock7 7
Stock‑based compensation expense490 490
Issuance of common stock upon completion of initial public offering, net of commissions, underwriting discounts and offering costs $ 1 223,849 223,850
Issuance of common stock upon completion of initial public offering, net of commissions, underwriting discounts and offering costs, shares14,375,000
Conversion of Stock, Amount Issued $ 2 163,510 163,512
Conversion of Stock, Shares Issued18,969,672
Net loss(12,523)(12,523)
Balances at end of period at Jun. 30, 2020 $ 3 $ 388,340 $ (56,087) $ 332,256
Balances at end of period (in shares) at Jun. 30, 202034,370,648

CONSOLIDATED STATEMENTS OF CO_2

CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT (Parenthetical) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Mar. 31, 2020Jun. 30, 2020
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
Issuance cost $ 228 $ 2,054

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands6 Months Ended
Jun. 30, 2020Jun. 30, 2019
Cash flows from operating activities:
Net loss $ (22,963) $ (7,913)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense917 103
Amortization of operating lease right‑of‑use assets115 87
Change in fair value of preferred stock tranche liability(753)
Stock‑based compensation expense601 36
Changes in operating assets and liabilities:
Prepaid expenses and other current assets21 (4)
Accounts payable998 654
Operating lease liabilities(151)115
Accrued expenses and other current liabilities504 728
Net cash used in operating activities(19,958)(6,947)
Cash flows from investing activities:
Purchases of property and equipment(2,082)(592)
Net cash used in investing activities(2,082)(592)
Cash flows from financing activities:
Proceeds from the issuance of convertible preferred stock104,837
Proceeds from initial public offering of common stock227,269
Payments of capital or finance lease obligations(124)(74)
Proceeds from exercise of stock options and sale of restricted common stock38 13
Payments of initial public offering costs(2,054)
Net cash provided by (used in) financing activities329,966 (61)
Net increase (decrease) in cash, cash equivalents and restricted cash307,926 (7,600)
Cash, cash equivalents and restricted cash at beginning of period26,395 24,340
Cash, cash equivalents and restricted cash at end of period334,321 16,740
Supplemental cash flow information:
Cash paid for interest4 5
Supplemental disclosure of non‑cash investing and financing information:
Purchases of property and equipment included in accounts payable and accrued expenses820 102
Offering costs included in accounts payable and accrued expenses1,365
Operating lease liabilities arising from obtaining right‑of‑use assets6,550
Leasehold improvements paid by lessor1,641
Reconciliation of cash, cash equivalents and restricted cash:
Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 334,321 $ 16,740

Nature of the Business and Basi

Nature of the Business and Basis of Presentation6 Months Ended
Jun. 30, 2020
Nature of the Business and Basis of Presentation
Nature of the Business and Basis of Presentation1. Nature of the Business and Basis of Presentation
Akouos, Inc., together with its consolidated subsidiary (the “Company” or “Akouos”), is a precision genetic medicine company dedicated to its mission of developing gene therapies with the potential to restore, improve, and preserve high‑acuity physiologic hearing for individuals worldwide who live with disabling hearing loss. The Company was formed as a limited liability corporation under the laws of the Commonwealth of Massachusetts in March 2016 under the name Akouos, LLC and converted into a corporation under the laws of the State of Delaware in November 2016 under the name Akouos, Inc.
The Company is subject to risks and uncertainties common to early‑stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, the impact of the COVID‑19 coronavirus, and the ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure, and extensive compliance‑reporting capabilities. Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.
On June 18, 2020, the Company effected a one-for-21.073 reverse stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each series of the Company’s convertible preferred stock. Accordingly, all share and per share amounts for all periods presented in the accompanying condensed consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse stock split and adjustment of the preferred stock conversion ratios.
On June 30, 2020, the Company completed its initial public offering of its common stock and issued and sold 14,375,000 shares of its common stock, at a public offering price of $17.00 per share, for gross proceeds of $244.4 million, or net proceeds of $223.8 million after deducting underwriting discounts, commissions, and offering expenses.
Upon the closing of the Company’s initial public offering on June 30, 2020, all shares of convertible preferred stock automatically converted into 18,969,672 shares of common stock.
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 primarily funded its operations with proceeds from sales of convertible preferred stock and proceeds from the Company’s initial public offering of common stock. The Company has incurred losses and negative cash flows from operations since its inception. As of June 30, 2020, the Company had an accumulated deficit of $56.1 million.
The Company expects that its operating losses and negative cash flows will continue for the foreseeable future. As of August 13, 2020, the filing date of this Quarterly Report on Form 10-Q, the Company expects that its existing cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months from the issuance date of the interim condensed consolidated financial statements.
The Company expects to seek additional funding through public and private equity financings, debt financings, collaborations, licensing arrangements, and/or strategic alliances. The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into collaborations or other such arrangements. The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders. If the Company is unable to obtain funding, the Company could 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. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations, if at all.
Impact of the COVID‑19 Coronavirus
The COVID‑19 pandemic, which began in December 2019 and has spread worldwide, has caused many governments to implement measures to slow the spread of the outbreak. The outbreak and government measures taken in response have had a significant impact, both direct and indirect, on businesses and commerce, as worker shortages have occurred, supply chains have been disrupted, and facilities and production have been suspended. The future progression of the pandemic and its effects on the Company’s business and operations are uncertain. The COVID‑19 pandemic may affect the Company’s ability to initiate and complete preclinical studies, delay the initiation of its planned clinical trial or future clinical trials, disrupt regulatory activities, or have other adverse effects on its business and operations. In particular, the Company and its contract manufacturing organizations (“CMOs”) and contract research organizations (“CROs”) may face disruptions that may affect the Company’s ability to initiate and complete preclinical studies, manufacturing disruptions, and delays at clinical trial sites. The pandemic has already caused significant disruptions in the financial markets, and may continue to cause such disruptions, which could impact the Company’s ability to raise additional funds to support its operations. Moreover, the pandemic has significantly impacted economies worldwide and could result in adverse effects on the Company’s business and operations.
The Company is monitoring the potential impact of the COVID‑19 pandemic on its business and financial statements. To date, the Company has not experienced material business disruptions or incurred impairment losses in the carrying values of its assets as a result of the pandemic and it is not aware of any specific related event or circumstance that would require it to revise its estimates reflected in these condensed consolidated financial statements. The extent to which the COVID‑19 pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition, including planned and future clinical trials and research and development costs, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID‑19, the actions taken to contain or treat it, and the duration and intensity of the related effects.
Basis of Presentation
The accompanying condensed consolidated financial statements reflect the operations of the Company and its wholly owned, domestic subsidiary. Intercompany balances and transactions have been eliminated in consolidation. The accompanying condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

Summary of Significant Accounti

Summary of Significant Accounting Policies6 Months Ended
Jun. 30, 2020
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies2. Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
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 initial public offering filed pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, with the Securities and Exchange Commission, or the SEC, on June 26, 2020. There have been no material changes in the Company’s significant accounting policies during the six months ended June 30, 2020.
Use of Estimates
The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the accrual of research and development expenses and the valuations of common stock, stock options, and a preferred stock tranche liability. The Company bases its estimates on historical experience, known trends, and other market‑specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates, as there are changes in circumstances, facts, and experience. Changes in estimates are recorded in the period in which they become known. Actual results may differ from those estimates or assumptions.
Unaudited Interim Financial Information
The accompanying condensed consolidated balance sheet as of June 30, 2020, the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2020 and 2019, the condensed consolidated statement of cash flows for the six months ended June 30, 2020 and 2019 and the condensed consolidated statements of convertible preferred stock and stockholders’ equity (deficit) for the three and six months ended June 30, 2020 and 2019 are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of June 30, 2020 and necessary for the fair statement of the Company’s financial position as of June 30, 2020 and the results of its operations for the three and six months ended June 30, 2020 and 2019 and its cash flows for the six months ended June 30, 2020 and 2019. The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2020 and 2019 are also unaudited. 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. The accompanying balance sheet as of December 31, 2019 has been derived from the Company’s audited financial statements for the year ended December 31, 2019. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The accompanying unaudited interim condensed 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 initial public offering filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on June 26, 2020.
Concentrations of Credit Risk and of Significant Suppliers
Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains its cash and cash equivalents at one accredited financial institution. The Company’s cash equivalents as of June 30, 2020 and December 31, 2019 consisted of U.S. government money market funds. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.
The Company is dependent on third‑party vendors for its product candidates. In particular, the Company relies, and expects to continue to rely, on a small number of vendors to manufacture materials and components required for the production of its product candidates. These programs could be adversely affected by a significant interruption in the manufacturing process.
Deferred Offering Costs
The Company capitalizes certain legal, professional accounting, and other third‑party fees that are directly associated with in‑process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded in stockholders’ equity (deficit) as a reduction of additional paid‑in capital generated as a result of the offering. Should the planned equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the consolidated statement of operations and comprehensive loss. There were no deferred offering costs as of June 30, 2020 and December 31, 2019.
Cash Equivalents
The Company considers all highly liquid investments with a remaining maturity when purchased of three months or less to be cash equivalents.
Restricted Cash
In connection with the Company’s lease agreement entered into in December 2018, the Company is required to maintain a letter of credit of $1.3 million for the benefit of the landlord. As of June 30, 2020 and December 31, 2019, this amount was classified as restricted cash (non‑current) in the condensed consolidated balance sheets.
The Company is required to maintain a separate cash balance of less than $0.1 million pledged as collateral for a credit card account. As of June 30, 2020 and December 31, 2019, this amount was classified as restricted cash (non‑current) on the condensed consolidated balance sheets.
Fair Value Measurements
Certain assets and liabilities of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and financial liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:
·
Level 1—Quoted prices in active markets for identical assets or liabilities.
·
Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.
·
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies, and similar techniques.
The Company’s cash equivalents and preferred stock tranche liability are carried at fair value, determined according to the fair value hierarchy described above (see Note 3). The carrying values of the Company’s accounts payable and accrued expenses approximate their fair values due to the short‑term nature of these liabilities.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expense is recognized using the straight‑line method over the estimated useful life of each asset as follows:
Estimated Useful Life
Laboratory equipment
5 years
Furniture and fixtures
4 years
Leasehold improvements
Shorter of term of lease or 15 years
Costs for capital assets not yet placed into service are capitalized as construction‑in‑progress and depreciated once placed into service. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is included in loss from operations. Expenditures for repairs and maintenance that do not improve or extend the life of the respective assets are charged to expense as incurred.
Classification and Accretion of Convertible Preferred Stock
The Company’s convertible preferred stock is classified outside of stockholders’ equity (deficit) on the condensed consolidated balance sheets because the holders of such shares have liquidation rights in the event of a deemed liquidation that, in certain situations, is not solely within the control of the Company and would require the redemption of the then‑outstanding convertible preferred stock. The Company’s Series Seed, Series Seed 1, Series A, and Series B convertible preferred stock are not redeemable, except in the event of a deemed liquidation. Because the occurrence of a deemed liquidation event is not currently probable, the carrying values of the convertible preferred stock are not being accreted to their redemption values. Subsequent adjustments to the carrying values to the convertible preferred stock would be made only when a deemed liquidation event becomes probable. Upon the closing of the Company’s initial public offering on June 30, 2020, all outstanding shares of convertible preferred stock automatically converted into 18,969,672 shares of common stock.
Impairment of Long‑Lived Assets
Long‑lived assets consist of property and equipment. Long‑lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long‑lived asset group for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long‑lived asset group to its carrying value. An impairment loss would be recognized in loss from operations when estimated undiscounted future cash flows expected to result from the use of an asset group are less than its carrying amount. Impairment is measured based on the excess of the carrying value of the related assets over the fair value of such assets. The Company did not record any impairment losses on long‑lived assets during the three and six months ended June 30, 2020 and 2019.
Segment Information
The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company’s focus is on developing gene therapies with the potential to restore, improve, and preserve high-acuity physiologic hearing for individuals with hearing loss. All of the Company’s long‑lived assets are located in the United States.
Government Contracts
The Company has received funding from government contracts that reimburse the Company for certain allowable costs for funded projects. For contracts with government agencies, when the Company has concluded that it is the principal in conducting the research and development expenses but where the funding arrangement is not considered core to the Company’s ongoing operations, the Company classifies the recognized funding received as other income in its condensed consolidated statement of operations and comprehensive loss.
Research and Development Costs
Costs for research and development activities are expensed in the period in which they are incurred. Research and development expenses consist of costs incurred in performing research and development activities, including salaries and bonuses, stock‑based compensation, employee benefits, facilities costs, laboratory supplies, depreciation and amortization, manufacturing expenses, and external costs of vendors engaged to conduct research and preclinical development activities as well as the cost of licensing technology.
Upfront payments under license agreements are expensed upon receipt of the license, and annual maintenance fees under license agreements are expensed in the period in which they are incurred. Milestone payments under license agreements are accrued, with a corresponding expense being recognized, in the period in which the milestone is determined to be probable of achievement and the related amount is reasonably estimable.
Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed.
Research, Development, and Manufacturing Contract Costs and Accruals
The Company has entered into various research, development, and manufacturing contracts with research institutions and other companies. These agreements are generally cancelable, and related costs are recorded as research and development expenses as incurred. The Company records accruals for estimated ongoing research and development costs. When billing terms under these contracts do not coincide with the timing of when the work is performed, the Company is required to make estimates of outstanding obligations to those third parties as of period end. Any accrual estimates are based on a number of factors, including the Company’s knowledge of the progress towards completion of the research, development, and manufacturing activities, invoicing to date under the contracts, communication from the research institutions and other companies of any actual costs incurred during the period that have not yet been invoiced, and the costs included in the contracts. Significant judgments and estimates may be made in determining the accrued balances at the end of any reporting period. Actual results could differ from the estimates made by the Company. The historical accrual estimates made by the Company have not been materially different from the actual costs.
Patent Costs
All patent‑related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses.
Stock‑Based Compensation
The Company measures stock options with service‑based vesting granted to employees, non‑employees, and directors based on the fair value on the date of grant using the Black‑Scholes option‑pricing model. The Company measures restricted common stock awards using the difference, if any, between the purchase price per share of the award and the fair value of the Company’s common stock at the date of grant. Compensation expense for employee awards is recognized over the requisite service period, which is generally the vesting period of the award. Compensation expense for non‑employee awards is recognized in the same manner as if the Company had paid cash in exchange for the goods or services, which is generally the vesting period of the award. The Company uses the straight‑line method to record the expense of awards with only service‑based vesting conditions. The Company has not granted awards with performance‑ or market‑based vesting conditions. The Company accounts for forfeitures of share‑based awards as they occur.
The Company classifies stock‑based compensation expense in its condensed consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.
Comprehensive Loss
Comprehensive loss includes net loss as well as other changes in stockholders’ equity (deficit) that result from transactions and economic events other than those with stockholders. There was no difference between net loss and comprehensive loss for each of the periods presented in the accompanying consolidated financial statements.
Income Taxes
The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.
The Company accounts for uncertainty in income taxes recognized in the consolidated financial statements by applying a two‑step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more‑likely‑than‑not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no amounts accrued for interest and penalties on its condensed consolidated balance sheets at June 30, 2020 and December 31, 2019.
Net Loss per Share
The Company follows the two‑class method when computing net income (loss) per share as the Company has issued shares that meet the definition of participating securities. The two‑class method determines net income (loss) per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two‑class method requires income (loss) available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to share in undistributed earnings as if all income (loss) for the period had been distributed.
Basic net income (loss) per share attributable to common stockholders is computed by dividing net income (loss) attributable to common stockholders by the weighted‑average number of common shares outstanding for the period. Diluted net income (loss) per share attributable to common stockholders is computed by adjusting net income (loss) attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the diluted net income (loss) attributable to common stockholders by the weighted‑average number of common shares outstanding for the period, including potential dilutive common shares. For purposes of this calculation, the Company’s outstanding stock options, unvested restricted common stock, and convertible preferred stock are considered potential dilutive common shares.
The Company’s participating securities contractually entitle the holders of such securities to participate in dividends but do not contractually require the holders of such securities to participate in losses of the Company. Accordingly, in periods in which the Company reports a net loss, such losses are not allocated to such participating securities. In periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, since dilutive common shares are not assumed to have been issued if their effect is anti‑dilutive. The Company reported a net loss attributable to common stockholders for the three and six months ended June 30, 2020 and 2019.
Recently Adopted Accounting Pronouncements
In August 2018, the FASB issued ASU No. 2018‑13, Fair Value Measurement (Topic 820): Disclosure Requirements for Fair Value Measurement (“ASU 2018‑13”), which modifies the existing disclosure requirements for fair value measurements in Topic 820. The new disclosure requirements include disclosure related to changes in unrealized gains or losses included in other comprehensive income (loss) for recurring Level 3 fair value measurements held at the end of each reporting period and the explicit requirement to disclose the range and weighted‑average of significant unobservable inputs used for Level 3 fair value measurements. The other provisions of ASU 2018‑13 include eliminated and modified disclosure requirements. An entity is permitted to early adopt any removed or modified disclosures upon issuance of ASU 2018‑13 and delay adoption of the additional disclosures until their effective date. For all entities, this guidance is required to be adopted for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2018‑13 as of the required effective date of January 1, 2020, and the adoption did not have a material impact on the Company’s consolidated financial statements.
Recently Issued Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the FASB or other standard‑setting bodies that the Company adopts as of the specified effective date. The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected not to “opt out” of the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and non‑public companies, the Company can adopt the new or revised standard at the time non‑public companies adopt the new or revised standard and can do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company. The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for non‑public companies.
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”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016‑13 replaces the existing incurred loss impairment model with an expected loss model. It also eliminates the concept of other‑than‑temporary impairment and requires credit losses related to available‑for‑sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes may result in earlier recognition of credit losses. In November 2018, the FASB issued ASU No. 2018‑19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses , which narrowed the scope and changed the effective date for non‑public entities for ASU 2016‑13. The FASB subsequently issued supplemental guidance within ASU No. 2019‑05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief (“ASU 2019‑05”). ASU 2019‑05 provides an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For public entities that are SEC filers, excluding entities eligible to be smaller reporting companies, ASU 2016‑13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. For all other entities, ASU 2016‑13 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2016‑13 will have on its consolidated financial statements.

Fair Value Measurements

Fair Value Measurements6 Months Ended
Jun. 30, 2020
Fair Value Measurements
Fair Value Measurements3. Fair Value Measurements
The following tables present the Company’s fair value hierarchy for its assets and liabilities that are measured at fair value on a recurring basis and indicate the level within the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value (in thousands):
Fair Value Measurements at
June 30, 2020 Using:
Level 1
Level 2
Level 3
Total
Assets:
Cash equivalents:
Money market funds
$
332,142
$

$

$
332,142
Restricted cash:
Money market funds
1,292


1,292
$
333,434
$

$

$
333,434
Fair Value Measurements at
December 31, 2019 Using:
Level 1
Level 2
Level 3
Total
Assets:
Cash equivalents:
Money market funds
$
24,281
$

$

$
24,281
Restricted cash:
Money market funds
1,292


1,292
$
25,573
$

$

$
25,573
U.S. government money market funds were valued by the Company based on quoted market prices, which represent a Level 1 measurement within the fair value hierarchy. During the three and six months ended June 30, 2020 and 2019 there were no transfers between Level 1, Level 2, and Level 3.

Property and Equipment, Net

Property and Equipment, Net6 Months Ended
Jun. 30, 2020
Property and Equipment, Net
Property and Equipment, Net4. Property and Equipment, Net
Property and equipment, net consisted of the following (in thousands):
June 30, 2020
December 31, 2019
Laboratory equipment
$
4,184
$
2,536
Furniture and fixtures
461
358
Leasehold improvements
8,916
8,915
Construction in progress
444
77
14,005
11,886
Less: Accumulated depreciation and amortization
(1,311)
(394)
$
12,694
$
11,492
Depreciation and amortization expense for the three and six months ended June 30, 2019 was not significant. Depreciation and amortization expense for the three and six months ended June 30, 2020 was approximately $0.5 million and $0.9 million, respectively.

Accrued Expenses and Other Curr

Accrued Expenses and Other Current Liabilities6 Months Ended
Jun. 30, 2020
Accrued Expenses and Other Current Liabilities
Accrued Expenses and Other Current Liabilities5. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
June 30, 2020
December 31, 2019
Accrued employee compensation and benefits
$
1,082
$
1,157
Accrued external research, development, and manufacturing expenses
2,344
2,605
Accrued professional fees
2,250
67
Payments due for leasehold improvements

756
Other
396
377
$
6,072
$
4,962

Convertible Preferred Stock

Convertible Preferred Stock6 Months Ended
Jun. 30, 2020
Convertible Preferred Stock
Convertible Preferred Stock6. Convertible Preferred Stock
The Company has issued Series Seed convertible preferred stock (the “Series Seed preferred stock”), Series Seed 1 convertible preferred stock (the “Series Seed 1 preferred stock”), Series A convertible preferred stock (the “Series A preferred stock”), and Series B convertible preferred stock (the “Series B preferred stock,” and collectively with the Series Seed preferred stock, the Series Seed 1 preferred stock, and the Series A preferred stock, the “Preferred Stock”).
In February 2020, the Company issued and sold 221,399,223 shares of Series B preferred stock, at a price of $0.47455 per share, for gross proceeds of $105.1 million. The Company incurred issuance costs in connection with this transaction of $0.2 million.
Upon the closing of the Company’s initial public offering on June 30, 2020, all outstanding shares of Preferred Stock automatically converted into 18,969,672 shares of common stock.

Stockholders' Equity

Stockholders' Equity6 Months Ended
Jun. 30, 2020
Stockholders' Equity
Stockholders' Equity7. Stockholders’ Equity
Common Stock
As of June 30, 2020 and December 31, 2019, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue 200,000,000 and 235,000,000 shares, respectively, of common stock $0.0001 par value per share.
On June 18, 2020, the Company effected a one-for-21.073 reverse stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each series of the Company’s convertible preferred stock. Accordingly, all share and per share amounts for all periods presented in the accompanying condensed consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse stock split and adjustment of the preferred stock conversion ratios.
On June 30, 2020, the Company completed its initial public offering of its common stock and issued and sold 14,375,000 shares of common stock, at a public offering price of $17.00 per share, for gross proceeds of $244.4 million, or net proceeds of $223.8 million after deducting underwriting discounts, commissions, and offering expenses.
Preferred Stock
As of June 30, 2020, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue 5,000,000 shares of preferred stock, $0.0001 par value per share. As of June 30, 2020, no shares of preferred stock were issued or outstanding. .

Stock_Based Compensation

Stock‑Based Compensation6 Months Ended
Jun. 30, 2020
Stock‑Based Compensation
Stock‑Based Compensation8. Stock‑Based Compensation
2016 Stock Plan
The Company’s 2016 Stock Plan (the “2016 Plan”) provides for the Company to grant incentive stock options or non‑qualified stock options, restricted stock, restricted stock units, and other equity awards to employees, directors, and consultants of the Company. The 2016 Plan is administered by the board of directors or, at the discretion of the board of directors, by a committee of the board of directors. The board of directors may also delegate to one or more officers of the Company the power to grant awards to employees and certain officers of the Company. The exercise prices, vesting, and other restrictions are determined at the discretion of the board of directors, or its committee or any such officer if so delegated.
Stock options granted under the 2016 Plan with service‑based vesting conditions generally vest over four years and expire after ten years.
During the six months ended June 30, 2020 the Company increased the number of shares of common stock authorized for issuance under the 2016 Plan from 1,508,669 shares to 3,722,685 shares. As of June 30, 2020, no shares remained available for future issuance under the 2016 Plan. The total number of shares of common stock that may be issued under the 2016 Plan was 1,508,669 shares as of December 31, 2019, of which 363,350 shares remained available for future issuance as of December 31, 2019.
2020 Stock Plan
On May 28, 2020, the Company's board of directors adopted, and on June 17, 2020 its stockholders approved, the 2020 Stock Plan (the "2020 Plan"). The 2020 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units, and other stock-based awards. The number of shares initially reserved for issuance under the 2020 Plan is the sum of 4,294,594, plus the number of shares (up to 3,622,691 shares) equal to the sum of (i) the number of shares remaining available for issuance under the 2016 Plan upon the effectiveness of the 2020 Plan and (ii) the number of shares of common stock subject to outstanding awards granted under the 2016 Plan that expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right. The number of shares of common stock that may be issued under the 2020 Plan will automatically increase on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2021 and continuing for each fiscal year until, and including, the fiscal year ending December 31, 2030, equal to the lowest of (i) 2,728,610 shares, (ii) 4% of the number of shares of common stock outstanding on such date, and (iii) an amount determined by the Company's board of directors. The shares of common stock underlying any awards that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, repurchased or are otherwise terminated by the Company under the 2020 Plan will be added back to the shares of common stock available for issuance under the 2020 Plan.
As of June 30, 2020, the total number of shares of common stock available for issuance under the 2020 Plan is 5,052,236 shares.
2020 Employee Stock Purchase Plan
On May 28, 2020, the Company's board of directors adopted, and on June 17, 2020 its stockholders approved, the 2020 Employee Stock Purchase Plan (the "2020 ESPP"). A total of 360,651 shares of common stock were initially reserved for issuance under this plan. The number of shares of common stock that may be issued under the 2020 ESPP will automatically increase on the first day of each fiscal year, beginning with the fiscal year commencing on January 1, 2021 and continuing for each fiscal year until, and including, the fiscal year commencing on January 1, 2031, equal to the lowest of (i) 640,630 shares, (ii) 1% of the number of shares of common stock outstanding on such date, and (iii) an amount determined by the Company's board of directors.
Stock Option Valuation
The fair value of stock option grants is estimated using the Black‑Scholes option‑pricing model. The Company historically has been a private company and lacks company‑specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. For options with service‑based vesting conditions, the expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain‑vanilla” options. The risk‑free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.
Stock Options
The following table summarizes the Company’s stock option activity since December 31, 2019:
Weighted‑
Weighted‑
Average
Average
Aggregate
Number of
Exercise
Contractual
Intrinsic
Shares
Price
Term
Value
(in years)
(in thousands)
Outstanding as of December 31, 2019
961,751
$
1.69
9.5
$
524
Granted
1,971,407
8.54
Exercised
(28,811)
1.33
Forfeited
(56,267)
3.22
Outstanding as of June 30, 2020
2,848,080
$
6.43
$
45,765
Vested and expected to vest as of June 30, 2020
2,848,080
$
6.43
$
45,765
Options exercisable as of June 30, 2020
211,744
$
2.22
$
4,293
The weighted‑average grant‑date fair value of stock options granted during the three months ended June 30, 2020 and 2019 was $7.62 per share and $0.64 per share respectively, and during the six months ended June 30, 2020 and 2019 was $7.04 per share and $0.64 per share, respectively.
Early Exercise of Stock Options into Restricted Stock
Certain option grants permit option holders to elect to exercise unvested options in exchange for unvested common stock. The options that are exercised prior to vesting will continue to vest according to the respective option agreement, and such unvested shares are subject to repurchase by the Company at the optionee’s original exercise price in the event the optionee’s service with the Company voluntarily or involuntarily terminates.
A summary of the Company’s unvested common stock from option early exercises that is subject to repurchase by the Company is as follows:
Shares
Unvested restricted common stock as of December 31, 2018
70,945
Issued
51,913
Vested
(19,962)
Unvested restricted common stock as of December 31, 2019
102,896
Vested
(16,921)
Unvested restricted common stock as of June 30, 2020
85,975
Proceeds from the early exercise of options are recorded as a liability within accrued expenses and other current liabilities on the condensed consolidated balance sheet. The liability for unvested common stock subject to repurchase is then reclassified to additional paid‑in capital as the Company’s repurchase right lapses. The shares purchased by the employees and directors pursuant to the early exercise of stock options are not deemed, for accounting purposes, to be outstanding until those shares have vested. As of June 30, 2020, the liability related to the payments for unvested shares from early‑exercised options was $0.1 million. As of December 31, 2019 the liability related to the payments for unvested shares from early‑exercised options was $0.1 million.
Restricted Common Stock Awards
The Company has both (i) granted restricted stock awards, with the recipient not paying for the shares of common stock, and (ii) issued and sold restricted stock, with the recipient purchasing the common stock at its fair value per share. In both circumstances, the restricted shares of common stock have service‑based vesting conditions and unvested shares are either subject to forfeiture by the employee or subject to repurchase by the Company, at the lesser of holder’s original purchase price or fair value, in the event the holder’s service with the Company voluntarily or involuntarily terminates. Service‑based restricted stock awards generally vest over four years.
Proceeds from the issuance and sale of restricted common stock are recorded as a liability within accrued expenses and other current liabilities on the condensed consolidated balance sheet. The liability for unvested common stock subject to repurchase is then reclassified to additional paid‑in capital as the Company’s repurchase right lapses. Shares of restricted common stock granted or sold to employees and directors are not deemed, for accounting purposes, to be outstanding until those shares have vested.
The Company did not grant or sell restricted common stock awards during 2019 or the six months ended June 30, 2020. As of June 30, 2020 and December 31, 2019, the liability related to the payments received for shares of unvested restricted stock was less than $0.1 million.
The following table summarizes the Company’s restricted common stock award activity for the six months ended June 30, 2020:
Weighted‑
Average
Grant‑Date
Shares
Fair Value
Unvested restricted common stock as of December 31, 2018
329,365
$
0.0485
Vested
(119,623)
0.0548
Unvested restricted common stock as of December 31, 2019
209,742
$
0.0443
Vested
(58,655)
0.0400
Unvested restricted common stock as of June 30, 2020
151,087
$
0.0500
The total fair value of restricted common stock vested during the three and six months ended June 30, 2020 was less than $0.1 million.
Stock‑Based Compensation
The Company records compensation cost for all share‑based payment arrangements, including employee, director, and consultant stock options and restricted stock.
The Company recorded stock‑based compensation expense in the following expense categories of its consolidated statements of operations and comprehensive loss (in thousands):
Three Months Ended
Six Months Ended
June 30,
June 30,
2020
2019
2020
2019
Research and development expenses
$
164
$
9
$
218
$
18
General and administrative expenses
326
9
383
18
$
490
$
18
$
601
$
36
As of June 30, 2020, there was $14.2 million of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of 3.34 years.

License Agreements

License Agreements6 Months Ended
Jun. 30, 2020
License Agreements
License Agreements9. License Agreements
License Agreement with Massachusetts Eye and Ear
In October 2017, the Company entered into a license agreement with Massachusetts Eye and Ear Infirmary and the Schepens Eye Research Institute, Inc. (collectively referred to as “MEE”) (the “MEE License”). Under the MEE License, the Company received an exclusive, non‑transferable, sublicensable, worldwide, royalty‑bearing license to certain patent rights and know‑how, including rights related to adeno-associated virus, or AAV, ancestral technology, including AAVAnc80, to use, research, develop, manufacture, and commercialize licensed products in the treatment, diagnosis, and prevention of any and all balance disorders, including hearing disorders of the inner ear, in each case, with a total prevalence in the United States of less than 3,000 patients, and an exclusive, non‑transferable, sublicensable right and license under MEE’s rights, title, and interest in certain patents co‑owned by MEE and Children’s Medical Center Corporation to use, research, develop, manufacture, and commercialize licensed products. The Company is obligated to use commercially reasonable efforts to develop and commercialize the MEE licensed products, including filing an investigational new drug application (“IND”) in the United States or investigational medicinal product dossier (“IMPD”) in any country in the European Union or an equivalent application in any country within 18 months of completion of specified toxicology studies for a licensed product.
Upon entering into the MEE License in 2017, the Company issued to MEE shares of the Company’s common stock then having a fair value of $0.1 million. The Company is obligated to make aggregate milestone payments to MEE of up to $17.7 million upon the achievement of specified development, regulatory, and sales milestones. The Company is also obligated to pay tiered royalties of a mid to high single‑digit percentage based on annual net sales of licensed products by the Company and any of its affiliates and sublicensees. Royalties will be paid by the Company on a licensed product‑by‑licensed product and country‑by‑country basis beginning after the first commercial sale of an MEE licensed product and lasting until the later of (i) the expiration of the last valid claim in the licensed patents or (ii) ten years after the first commercial sale of such MEE licensed product (the “MEE Royalty Term”).
The MEE License remains in effect until the last expiration date of the last to expire MEE Royalty Term, unless terminated earlier. The Company has the right to terminate the MEE License at will, with or without cause, by 90 days’ advance written notice to MEE or upon MEE’s material breach of the MEE License, provided that MEE does not cure such material breach within a specified period. MEE has the right to terminate the MEE License in its entirety if (i) the Company fails to make any payment due within a specified period after MEE notifies the Company of such failure, (ii) the Company or its affiliates challenge the validity of the licensed patent rights, (iii) the Company fails to maintain required insurance, or (iv) the Company becomes insolvent or bankrupt. MEE also has the right to terminate the Company’s rights to specific intellectual property rights it has licensed to the Company under the MEE License if the Company materially breaches certain diligence obligations and does not cure within a specified period after written notice from MEE.
During the three and six months ended June 30, 2020 and 2019 the Company did not make any payments to MEE or recognize any research and development expenses under the MEE License.
Sublicense Agreement with Lonza Houston, Inc.
In October 2017, the Company entered into a sublicense agreement with Lonza Houston, Inc. (“Lonza”), as amended in December 2018 (the “Lonza Sublicense”). Under the agreement, the Company received an exclusive, non‑transferable, sublicensable, worldwide, royalty‑bearing sublicense to certain patent rights and know‑how related to AAV ancestral technology, including AAVAnc80, to use, research, develop, manufacture, and commercialize licensed products for the treatment, diagnosis, and prevention of any and all balance disorders or diseases pertaining to the inner ear and/or any and all hearing diseases or disorders, including hearing disorders of the inner ear, but excluding all such disorders or diseases with a total prevalence in the United States of less than 3,000 patients. The Company is obligated to use commercially reasonable efforts to develop and commercialize the Lonza sublicensed products, including filing an IND in the United States or IMPD in any country in the European Union or an equivalent application in any country within 18 months of completion of specified toxicology studies for a licensed product.
Upon entering into the Lonza Sublicense in 2017, the Company issued to Lonza shares of the Company’s common stock then having a fair value of $0.1 million. The Company is obligated to make aggregate milestone payments to Lonza of up to $18.5 million upon the achievement of specified development, regulatory, and sales milestones. The Company is also obligated to pay tiered royalties of a mid to high single‑digit percentage based on annual net sales of licensed products by the Company and any of its affiliates and sublicensees as denoted in the Lonza Sublicense. Royalties will be paid by the Company on a licensed product‑by‑licensed product and country‑by‑country basis beginning after the first commercial sale of a Lonza sublicensed product and lasting until the later of (i) the expiration of the last valid claim in the patent or (ii) ten years after the first commercial sale of such Lonza sublicensed product (the “Lonza Royalty Term”).
The Lonza Sublicense remains in effect until the last expiration date of the last to expire Lonza Royalty Term, unless terminated earlier. The Company has the right to terminate the Lonza Sublicense at will, with or without cause, by 90 days’ advance written notice to Lonza or upon Lonza’s material breach of the Lonza Sublicense, provided that Lonza does not cure such material breach within a specified period. Lonza has the right to terminate the Lonza Sublicense in its entirety if (i) the Company fails to make any payment due within a specified period after Lonza notifies the Company of such failure, (ii) the Company or its affiliates challenge the validity of the sublicensed patent rights, (iii) the Company fails to maintain required insurance, or (iv) the Company becomes insolvent or bankrupt. Lonza also has the right to terminate the Company’s rights to specific intellectual property rights it has sublicensed to the Company under the Lonza Sublicense if the Company materially breaches certain diligence obligations and does not cure within a specified period after written notice from Lonza.
During the three and six months ended June 30, 2020 and 2019 the Company did not make any payments to Lonza or recognize any research and development expenses under the Lonza Sublicense.

Commitments and Contingencies

Commitments and Contingencies6 Months Ended
Jun. 30, 2020
Commitments and Contingencies.
Commitments and Contingencies10. Commitments and Contingencies
401(k) Plan
The Company has a defined‑contribution plan under Section 401(k) of the Internal Revenue Code of 1986 (the “401(k) Plan”). The 401(k) Plan covers all employees who meet defined minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre‑tax basis. As currently established, the Company is not required to make, and to date has not made, any contributions to the 401(k) Plan.
Indemnification Agreements
In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, CROs, business partners, and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and certain of its executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. The Company has not incurred any material costs as a result of such indemnifications and is not currently aware of any indemnification claims.
Legal Proceedings
The Company is not currently party to any material legal proceedings. At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses as incurred the costs related to such legal proceedings.

Net Loss per Share

Net Loss per Share6 Months Ended
Jun. 30, 2020
Net Loss per Share
Net Loss per Share11. Net Loss per Share
Net Loss per Share
Basic and diluted net loss per share attributable to common stockholders was calculated as follows (in thousands, except share and per share amounts):
Three Months Ended June 30,
Six Months Ended June 30,
2020
2019
2020
2019
Numerator:
Net loss attributable to common stockholders
$
(12,523)
$
(2,004)
$
(22,963)
$
(7,913)
Denominator:
Weighted‑average common shares outstanding, basic and diluted
1,124,251
586,616
916,521
568,811
Net loss per share attributable to common stockholders, basic and diluted
$
(11.14)
$
(3.42)
$
(25.05)
$
(13.91)
The Company’s potential dilutive securities 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 and Six Months Ended June 30,
2020
2019
Convertible preferred stock (as converted to common stock)

18,969,672
Unvested restricted common stock
237,062
329,573
Stock options to purchase common stock
2,848,080
340,288
3,085,142
19,639,533

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)6 Months Ended
Jun. 30, 2020
Summary of Significant Accounting Policies
Use of EstimatesUse of Estimates
The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the accrual of research and development expenses and the valuations of common stock, stock options, and a preferred stock tranche liability. The Company bases its estimates on historical experience, known trends, and other market‑specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates, as there are changes in circumstances, facts, and experience. Changes in estimates are recorded in the period in which they become known. Actual results may differ from those estimates or assumptions.
Unaudited Interim Financial InformationUnaudited Interim Financial Information
The accompanying condensed consolidated balance sheet as of June 30, 2020, the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2020 and 2019, the condensed consolidated statement of cash flows for the six months ended June 30, 2020 and 2019 and the condensed consolidated statements of convertible preferred stock and stockholders’ equity (deficit) for the three and six months ended June 30, 2020 and 2019 are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of June 30, 2020 and necessary for the fair statement of the Company’s financial position as of June 30, 2020 and the results of its operations for the three and six months ended June 30, 2020 and 2019 and its cash flows for the six months ended June 30, 2020 and 2019. The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2020 and 2019 are also unaudited. 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. The accompanying balance sheet as of December 31, 2019 has been derived from the Company’s audited financial statements for the year ended December 31, 2019. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The accompanying unaudited interim condensed 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 initial public offering filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on June 26, 2020.
Concentrations of Credit Risk and of Significant SuppliersConcentrations of Credit Risk and of Significant Suppliers
Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains its cash and cash equivalents at one accredited financial institution. The Company’s cash equivalents as of June 30, 2020 and December 31, 2019 consisted of U.S. government money market funds. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.
The Company is dependent on third‑party vendors for its product candidates. In particular, the Company relies, and expects to continue to rely, on a small number of vendors to manufacture materials and components required for the production of its product candidates. These programs could be adversely affected by a significant interruption in the manufacturing process.
Deferred Offering CostsDeferred Offering Costs
The Company capitalizes certain legal, professional accounting, and other third‑party fees that are directly associated with in‑process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded in stockholders’ equity (deficit) as a reduction of additional paid‑in capital generated as a result of the offering. Should the planned equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the consolidated statement of operations and comprehensive loss. There were no deferred offering costs as of June 30, 2020 and December 31, 2019.
Cash EquivalentsCash Equivalents
The Company considers all highly liquid investments with a remaining maturity when purchased of three months or less to be cash equivalents.
Restricted CashRestricted Cash
In connection with the Company’s lease agreement entered into in December 2018, the Company is required to maintain a letter of credit of $1.3 million for the benefit of the landlord. As of June 30, 2020 and December 31, 2019, this amount was classified as restricted cash (non‑current) in the condensed consolidated balance sheets.
The Company is required to maintain a separate cash balance of less than $0.1 million pledged as collateral for a credit card account. As of June 30, 2020 and December 31, 2019, this amount was classified as restricted cash (non‑current) on the condensed consolidated balance sheets.
Fair Value MeasurementsFair Value Measurements
Certain assets and liabilities of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and financial liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:
·
Level 1—Quoted prices in active markets for identical assets or liabilities.
·
Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.
·
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies, and similar techniques.
The Company’s cash equivalents and preferred stock tranche liability are carried at fair value, determined according to the fair value hierarchy described above (see Note 3). The carrying values of the Company’s accounts payable and accrued expenses approximate their fair values due to the short‑term nature of these liabilities.
Property and EquipmentProperty and Equipment
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expense is recognized using the straight‑line method over the estimated useful life of each asset as follows:
Estimated Useful Life
Laboratory equipment
5 years
Furniture and fixtures
4 years
Leasehold improvements
Shorter of term of lease or 15 years
Costs for capital assets not yet placed into service are capitalized as construction‑in‑progress and depreciated once placed into service. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is included in loss from operations. Expenditures for repairs and maintenance that do not improve or extend the life of the respective assets are charged to expense as incurred.
Classification and Accretion of Convertible Preferred StockClassification and Accretion of Convertible Preferred Stock
The Company’s convertible preferred stock is classified outside of stockholders’ equity (deficit) on the condensed consolidated balance sheets because the holders of such shares have liquidation rights in the event of a deemed liquidation that, in certain situations, is not solely within the control of the Company and would require the redemption of the then‑outstanding convertible preferred stock. The Company’s Series Seed, Series Seed 1, Series A, and Series B convertible preferred stock are not redeemable, except in the event of a deemed liquidation. Because the occurrence of a deemed liquidation event is not currently probable, the carrying values of the convertible preferred stock are not being accreted to their redemption values. Subsequent adjustments to the carrying values to the convertible preferred stock would be made only when a deemed liquidation event becomes probable. Upon the closing of the Company’s initial public offering on June 30, 2020, all outstanding shares of convertible preferred stock automatically converted into 18,969,672 shares of common stock.
Impairment of Long‑Lived AssetsImpairment of Long‑Lived Assets
Long‑lived assets consist of property and equipment. Long‑lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long‑lived asset group for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long‑lived asset group to its carrying value. An impairment loss would be recognized in loss from operations when estimated undiscounted future cash flows expected to result from the use of an asset group are less than its carrying amount. Impairment is measured based on the excess of the carrying value of the related assets over the fair value of such assets. The Company did not record any impairment losses on long‑lived assets during the three and six months ended June 30, 2020 and 2019.
Segment InformationSegment Information
The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company’s focus is on developing gene therapies with the potential to restore, improve, and preserve high-acuity physiologic hearing for individuals with hearing loss. All of the Company’s long‑lived assets are located in the United States.
Government ContractsGovernment Contracts
The Company has received funding from government contracts that reimburse the Company for certain allowable costs for funded projects. For contracts with government agencies, when the Company has concluded that it is the principal in conducting the research and development expenses but where the funding arrangement is not considered core to the Company’s ongoing operations, the Company classifies the recognized funding received as other income in its condensed consolidated statement of operations and comprehensive loss.
Research and Development CostsResearch and Development Costs
Costs for research and development activities are expensed in the period in which they are incurred. Research and development expenses consist of costs incurred in performing research and development activities, including salaries and bonuses, stock‑based compensation, employee benefits, facilities costs, laboratory supplies, depreciation and amortization, manufacturing expenses, and external costs of vendors engaged to conduct research and preclinical development activities as well as the cost of licensing technology.
Upfront payments under license agreements are expensed upon receipt of the license, and annual maintenance fees under license agreements are expensed in the period in which they are incurred. Milestone payments under license agreements are accrued, with a corresponding expense being recognized, in the period in which the milestone is determined to be probable of achievement and the related amount is reasonably estimable.
Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed.
Research, Development, and Manufacturing Contract Costs and AccrualsResearch, Development, and Manufacturing Contract Costs and Accruals
The Company has entered into various research, development, and manufacturing contracts with research institutions and other companies. These agreements are generally cancelable, and related costs are recorded as research and development expenses as incurred. The Company records accruals for estimated ongoing research and development costs. When billing terms under these contracts do not coincide with the timing of when the work is performed, the Company is required to make estimates of outstanding obligations to those third parties as of period end. Any accrual estimates are based on a number of factors, including the Company’s knowledge of the progress towards completion of the research, development, and manufacturing activities, invoicing to date under the contracts, communication from the research institutions and other companies of any actual costs incurred during the period that have not yet been invoiced, and the costs included in the contracts. Significant judgments and estimates may be made in determining the accrued balances at the end of any reporting period. Actual results could differ from the estimates made by the Company. The historical accrual estimates made by the Company have not been materially different from the actual costs.
Patent CostsPatent Costs
All patent‑related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses.
Stock‑Based CompensationStock‑Based Compensation
The Company measures stock options with service‑based vesting granted to employees, non‑employees, and directors based on the fair value on the date of grant using the Black‑Scholes option‑pricing model. The Company measures restricted common stock awards using the difference, if any, between the purchase price per share of the award and the fair value of the Company’s common stock at the date of grant. Compensation expense for employee awards is recognized over the requisite service period, which is generally the vesting period of the award. Compensation expense for non‑employee awards is recognized in the same manner as if the Company had paid cash in exchange for the goods or services, which is generally the vesting period of the award. The Company uses the straight‑line method to record the expense of awards with only service‑based vesting conditions. The Company has not granted awards with performance‑ or market‑based vesting conditions. The Company accounts for forfeitures of share‑based awards as they occur.
The Company classifies stock‑based compensation expense in its condensed consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.
Comprehensive LossComprehensive Loss
Comprehensive loss includes net loss as well as other changes in stockholders’ equity (deficit) that result from transactions and economic events other than those with stockholders. There was no difference between net loss and comprehensive loss for each of the periods presented in the accompanying consolidated financial statements.
Income TaxesIncome Taxes
The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.
The Company accounts for uncertainty in income taxes recognized in the consolidated financial statements by applying a two‑step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more‑likely‑than‑not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no amounts accrued for interest and penalties on its condensed consolidated balance sheets at June 30, 2020 and December 31, 2019.
Net Loss per ShareNet Loss per Share
The Company follows the two‑class method when computing net income (loss) per share as the Company has issued shares that meet the definition of participating securities. The two‑class method determines net income (loss) per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two‑class method requires income (loss) available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to share in undistributed earnings as if all income (loss) for the period had been distributed.
Basic net income (loss) per share attributable to common stockholders is computed by dividing net income (loss) attributable to common stockholders by the weighted‑average number of common shares outstanding for the period. Diluted net income (loss) per share attributable to common stockholders is computed by adjusting net income (loss) attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the diluted net income (loss) attributable to common stockholders by the weighted‑average number of common shares outstanding for the period, including potential dilutive common shares. For purposes of this calculation, the Company’s outstanding stock options, unvested restricted common stock, and convertible preferred stock are considered potential dilutive common shares.
The Company’s participating securities contractually entitle the holders of such securities to participate in dividends but do not contractually require the holders of such securities to participate in losses of the Company. Accordingly, in periods in which the Company reports a net loss, such losses are not allocated to such participating securities. In periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, since dilutive common shares are not assumed to have been issued if their effect is anti‑dilutive. The Company reported a net loss attributable to common stockholders for the three and six months ended June 30, 2020 and 2019.
Recently Adopted and Issued Accounting PronouncementsRecently Adopted Accounting Pronouncements
In August 2018, the FASB issued ASU No. 2018‑13, Fair Value Measurement (Topic 820): Disclosure Requirements for Fair Value Measurement (“ASU 2018‑13”), which modifies the existing disclosure requirements for fair value measurements in Topic 820. The new disclosure requirements include disclosure related to changes in unrealized gains or losses included in other comprehensive income (loss) for recurring Level 3 fair value measurements held at the end of each reporting period and the explicit requirement to disclose the range and weighted‑average of significant unobservable inputs used for Level 3 fair value measurements. The other provisions of ASU 2018‑13 include eliminated and modified disclosure requirements. An entity is permitted to early adopt any removed or modified disclosures upon issuance of ASU 2018‑13 and delay adoption of the additional disclosures until their effective date. For all entities, this guidance is required to be adopted for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2018‑13 as of the required effective date of January 1, 2020, and the adoption did not have a material impact on the Company’s consolidated financial statements.
Recently Issued Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the FASB or other standard‑setting bodies that the Company adopts as of the specified effective date. The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected not to “opt out” of the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and non‑public companies, the Company can adopt the new or revised standard at the time non‑public companies adopt the new or revised standard and can do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company. The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for non‑public companies.
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”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016‑13 replaces the existing incurred loss impairment model with an expected loss model. It also eliminates the concept of other‑than‑temporary impairment and requires credit losses related to available‑for‑sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes may result in earlier recognition of credit losses. In November 2018, the FASB issued ASU No. 2018‑19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses , which narrowed the scope and changed the effective date for non‑public entities for ASU 2016‑13. The FASB subsequently issued supplemental guidance within ASU No. 2019‑05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief (“ASU 2019‑05”). ASU 2019‑05 provides an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For public entities that are SEC filers, excluding entities eligible to be smaller reporting companies, ASU 2016‑13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. For all other entities, ASU 2016‑13 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2016‑13 will have on its consolidated financial statements.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)6 Months Ended
Jun. 30, 2020
Summary of Significant Accounting Policies
Schedule of estimated useful livesEstimated Useful Life
Laboratory equipment
5 years
Furniture and fixtures
4 years
Leasehold improvements
Shorter of term of lease or 15 years

Fair Value Measurements (Tables

Fair Value Measurements (Tables)6 Months Ended
Jun. 30, 2020
Fair Value Measurements
Schedule of fair value hierarchy for its assets and liabilities that are measured at fair value on a recurring basisFair Value Measurements at
June 30, 2020 Using:
Level 1
Level 2
Level 3
Total
Assets:
Cash equivalents:
Money market funds
$
332,142
$

$

$
332,142
Restricted cash:
Money market funds
1,292


1,292
$
333,434
$

$

$
333,434
Fair Value Measurements at
December 31, 2019 Using:
Level 1
Level 2
Level 3
Total
Assets:
Cash equivalents:
Money market funds
$
24,281
$

$

$
24,281
Restricted cash:
Money market funds
1,292


1,292
$
25,573
$

$

$
25,573

Property and Equipment, Net (Ta

Property and Equipment, Net (Tables)6 Months Ended
Jun. 30, 2020
Property and Equipment, Net
Schedule of property and equipment, netJune 30, 2020
December 31, 2019
Laboratory equipment
$
4,184
$
2,536
Furniture and fixtures
461
358
Leasehold improvements
8,916
8,915
Construction in progress
444
77
14,005
11,886
Less: Accumulated depreciation and amortization
(1,311)
(394)
$
12,694
$
11,492

Accrued Expenses and Other Cu_2

Accrued Expenses and Other Current Liabilities (Tables)6 Months Ended
Jun. 30, 2020
Accrued Expenses and Other Current Liabilities
Schedule of accrued expenses and other current liabilitiesJune 30, 2020
December 31, 2019
Accrued employee compensation and benefits
$
1,082
$
1,157
Accrued external research, development, and manufacturing expenses
2,344
2,605
Accrued professional fees
2,250
67
Payments due for leasehold improvements

756
Other
396
377
$
6,072
$
4,962

Stock_Based Compensation (Table

Stock‑Based Compensation (Tables)6 Months Ended
Jun. 30, 2020
Stock‑Based Compensation
Schedule of stock option activityWeighted‑
Weighted‑
Average
Average
Aggregate
Number of
Exercise
Contractual
Intrinsic
Shares
Price
Term
Value
(in years)
(in thousands)
Outstanding as of December 31, 2019
961,751
$
1.69
9.5
$
524
Granted
1,971,407
8.54
Exercised
(28,811)
1.33
Forfeited
(56,267)
3.22
Outstanding as of June 30, 2020
2,848,080
$
6.43
$
45,765
Vested and expected to vest as of June 30, 2020
2,848,080
$
6.43
$
45,765
Options exercisable as of June 30, 2020
211,744
$
2.22
$
4,293
Schedule of unvested common stock from option early exercisesShares
Unvested restricted common stock as of December 31, 2018
70,945
Issued
51,913
Vested
(19,962)
Unvested restricted common stock as of December 31, 2019
102,896
Vested
(16,921)
Unvested restricted common stock as of June 30, 2020
85,975
Schedule of restricted common stock award activityWeighted‑
Average
Grant‑Date
Shares
Fair Value
Unvested restricted common stock as of December 31, 2018
329,365
$
0.0485
Vested
(119,623)
0.0548
Unvested restricted common stock as of December 31, 2019
209,742
$
0.0443
Vested
(58,655)
0.0400
Unvested restricted common stock as of June 30, 2020
151,087
$
0.0500
Schedule of stock based compensation expenseThree Months Ended
Six Months Ended
June 30,
June 30,
2020
2019
2020
2019
Research and development expenses
$
164
$
9
$
218
$
18
General and administrative expenses
326
9
383
18
$
490
$
18
$
601
$
36

Net Loss per Share (Tables)

Net Loss per Share (Tables)6 Months Ended
Jun. 30, 2020
Net Loss per Share
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]Three Months Ended June 30,
Six Months Ended June 30,
2020
2019
2020
2019
Numerator:
Net loss attributable to common stockholders
$
(12,523)
$
(2,004)
$
(22,963)
$
(7,913)
Denominator:
Weighted‑average common shares outstanding, basic and diluted
1,124,251
586,616
916,521
568,811
Net loss per share attributable to common stockholders, basic and diluted
$
(11.14)
$
(3.42)
$
(25.05)
$
(13.91)
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]Three and Six Months Ended June 30,
2020
2019
Convertible preferred stock (as converted to common stock)

18,969,672
Unvested restricted common stock
237,062
329,573
Stock options to purchase common stock
2,848,080
340,288
3,085,142
19,639,533

Nature of the Business and Ba_2

Nature of the Business and Basis of Presentation (Details) $ / shares in Units, $ in ThousandsJun. 30, 2020USD ($)$ / sharessharesJun. 18, 2020Jun. 30, 2020USD ($)$ / sharessharesJun. 30, 2020USD ($)$ / sharessharesDec. 31, 2019USD ($)
Temporary Equity [Line Items]
Share price | $ / shares $ 17 $ 17 $ 17
Value of shares issued $ 223,850 $ 223,800
Shares issued, gross proceeds $ 244,400
Accumulated deficit $ (56,087) $ (56,087) $ (56,087) $ (33,124)
Common Stock
Temporary Equity [Line Items]
Reverse stock split ratio21.073
Shares issued | shares14,375,000 14,375,000
Share price | $ / shares $ 17 $ 17 $ 17
Value of shares issued $ 223,800 $ 1
Shares issued, gross proceeds $ 244,400
Common stock issued in conversion, shares | shares18,969,672 18,969,672

Summary of Significant Accoun_4

Summary of Significant Accounting Policies (Details) $ in Thousands6 Months Ended
Jun. 30, 2020USD ($)Institution
Summary of Significant Accounting Policies
Number of financial institutions in which the company maintains cash and cash equivalents | Institution1
Deferred offering costs $ 0
Letter of credit related to lease agreement1,300
Cash collateral for credit card account $ 100

Summary of Significant Accoun_5

Summary of Significant Accounting Policies - Property and Equipment (Details)6 Months Ended
Jun. 30, 2020
Laboratory equipment
Property and Equipment
Property, Plant and Equipment, Useful Life5 years
Furniture and fixtures
Property and Equipment
Property, Plant and Equipment, Useful Life4 years
Leasehold improvements
Property and Equipment
Property, Plant and Equipment, Useful Life15 years

Summary of Significant Accoun_6

Summary of Significant Accounting Policies - Preferred stock, etc. (Details) - USD ($) $ in Millions3 Months Ended6 Months Ended
Jun. 30, 2020Jun. 30, 2020Dec. 31, 2019
Summary of Significant Accounting Policies [Line Items]
Amounts accrued for interest and penalties $ 0 $ 0 $ 0
Common Stock
Summary of Significant Accounting Policies [Line Items]
Common stock issued in conversion, shares18,969,672 18,969,672

Fair Value Measurements - Recur

Fair Value Measurements - Recurring Basis (Details) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2020Jun. 30, 2019Jun. 30, 2020Jun. 30, 2019Dec. 31, 2019
Fair Value, Transfers Between Level 1 and Level 2, Description and Policy [Abstract]
Transfer of fair value asset, Level 1 into Level 2 $ 0 $ 0 $ 0 $ 0
Transfer of fair value asset, Level 2 into Level 10 0 0 0
Transfer of fair value asset, into Level 30 0 0 0
Transfer of fair value asset, out of Level 30 0 0 0
Transfer of fair value liability, Level 1 into Level 20 0 0 0
Transfer of fair value liability Level 2 into Level 10 0 0 0
Transfer of fair value liability, into Level 30 0 0 0
Transfer of fair value liability, out of Level 30 $ 0 0 $ 0
Recurring
Assets:
Assets333,434 333,434 $ 25,573
Recurring | Money market funds
Assets:
Cash equivalents332,142 332,142 24,281
Restricted cash1,292 1,292 1,292
Recurring | Level 1
Assets:
Assets333,434 333,434 25,573
Recurring | Level 1 | Money market funds
Assets:
Cash equivalents332,142 332,142 24,281
Restricted cash $ 1,292 $ 1,292 $ 1,292

Property and Equipment, Net (De

Property and Equipment, Net (Details) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2020Jun. 30, 2020Jun. 30, 2019Dec. 31, 2019
Property and Equipment
Property and equipment, Gross $ 14,005 $ 14,005 $ 11,886
Less: Accumulated depreciation and amortization(1,311)(1,311)(394)
Property and Equipment, Net12,694 12,694 11,492
Depreciation and amortization expense500 917 $ 103
Laboratory equipment
Property and Equipment
Property and equipment, Gross4,184 4,184 2,536
Furniture and fixtures
Property and Equipment
Property and equipment, Gross461 461 358
Leasehold improvements
Property and Equipment
Property and equipment, Gross8,916 8,916 8,915
Construction in progress
Property and Equipment
Property and equipment, Gross $ 444 $ 444 $ 77

Accrued Expenses and Other Cu_3

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in ThousandsJun. 30, 2020Dec. 31, 2019
Accrued Expenses and Other Current Liabilities
Accrued employee compensation and benefits $ 1,082 $ 1,157
Accrued external research, development, and manufacturing expenses2,344 2,605
Accrued professional fees2,250 67
Payments due for leasehold improvements756
Other396 377
Total $ 6,072 $ 4,962

Convertible Preferred Stock (De

Convertible Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands1 Months Ended3 Months Ended6 Months Ended
Feb. 29, 2020Jun. 30, 2020Mar. 31, 2020Jun. 30, 2020
Temporary Equity [Line Items]
Gross proceeds received from sale of convertible preferred stock $ 104,837
Issuance costs $ 228 $ 2,054
Series B preferred stock
Temporary Equity [Line Items]
Shares, issued and sold221,399,223
Shares price per share $ 0.47455
Gross proceeds received from sale of convertible preferred stock $ 105,100
Issuance costs $ 200
Common Stock
Temporary Equity [Line Items]
Common stock issued in conversion, shares18,969,672 18,969,672

Stockholders' Equity (Details)

Stockholders' Equity (Details) $ / shares in Units, $ in ThousandsJun. 30, 2020USD ($)$ / sharessharesJun. 18, 2020Jun. 30, 2020USD ($)$ / sharessharesJun. 30, 2020USD ($)$ / sharessharesDec. 31, 2019$ / sharesshares
Class of Stock [Line Items]
Common stock, Shares authorized200,000,000 200,000,000 200,000,000 235,000,000
Common stock, Par value | $ / shares $ 0.0001 $ 0.0001 $ 0.0001 $ 0.0001
Share Price | $ / shares $ 17 $ 17 $ 17
Shares issued, gross proceeds | $ $ 244,400
Value of shares issued | $ $ 223,850 $ 223,800
Preferred stock, Shares authorized5,000,000 5,000,000 5,000,000 0
Preferred stock, Par value | $ / shares $ 0.0001 $ 0.0001 $ 0.0001 $ 0.0001
Preferred stock, Shares issued0 0 0 0
Preferred stock, Shares outstanding0 0 0 0
Common Stock
Class of Stock [Line Items]
Reverse stock split ratio21.073
Shares issued14,375,000 14,375,000
Share Price | $ / shares $ 17 $ 17 $ 17
Shares issued, gross proceeds | $ $ 244,400
Value of shares issued | $ $ 223,800 $ 1

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - sharesJun. 17, 2020Jun. 30, 2020Dec. 31, 2019
2016 Plan
Stock‑Based Compensation
Number of shares authorized for issuance3,722,685 1,508,669
Remaining shares available for issuance0 363,350
2016 Plan | Stock option
Stock‑Based Compensation
Vesting period4 years
Expiration period10 years
2020 Stock Plan
Stock‑Based Compensation
Number of shares authorized for issuance5,052,236
Number of shares authorized, fixed portion4,294,594
Number of shares authorized, variable portion3,622,691
Annual increase in shares reserved for issuance2,728,610
Annual increase in shares reserved for issuance, as a percent of stock outstanding4.00%
2020 Employee Stock Purchase Plan
Stock‑Based Compensation
Number of shares authorized, fixed portion360,651
Annual increase in shares reserved for issuance640,630
Annual increase in shares reserved for issuance, as a percent of stock outstanding1.00%

Stock_Based Compensation - Stoc

Stock‑Based Compensation - Stock option activity (Details) - Stock option - USD ($) $ / shares in Units, $ in Thousands3 Months Ended6 Months Ended12 Months Ended
Jun. 30, 2020Jun. 30, 2019Jun. 30, 2020Jun. 30, 2019Dec. 31, 2019
Number of Shares
Outstanding as at beginning of period (in shares)961,751
Granted (in shares)1,971,407
Exercised (in shares)(28,811)
Forfeited (in shares)(56,267)
Outstanding as at end of period (in shares)2,848,080 2,848,080 961,751
Vested and expected to vest as at end of period (in shares)2,848,080 2,848,080
Options exercisable as at end of period (in shares)211,744 211,744
Weighted Average Exercise Price
Weighted average exercise price outstanding as at beginning of period (in dollars per share) $ 1.69
Weighted average exercise price, Granted (in dollars per share)8.54
Weighted average exercise price, Exercised (in dollars per share)1.33
Weighted average exercise price, Forfeited (in dollars per share)3.22
Weighted average exercise price, Outstanding as at end of period (in dollars per share) $ 6.43 6.43 $ 1.69
Vested and expected to vest as at end of period (in dollars per share)6.436.43
Options exercisable as at end of period (in dollars per share) $ 2.22 $ 2.22
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Contractual term, Outstanding (in years)9 years 7 months 6 days9 years 6 months
Contractual term, Vested and expected to vest (in years)9 years 7 months 6 days
Contractual term, Options exercisable (in years)8 years 9 months 18 days
Average intrinsic value, Outstanding $ 45,765 $ 45,765 $ 524
Average intrinsic value, Vested and expected to vest45,765 45,765
Average intrinsic value, Exercisable $ 4,293 $ 4,293
Weighted‑average grant‑date fair value of stock options granted $ 7.62 $ 0.64 $ 7.04 $ 0.64

Stock_Based Compensation - Earl

Stock‑Based Compensation - Early exercise of stock options into restricted stock (Details) - USD ($) $ in Millions6 Months Ended12 Months Ended
Jun. 30, 2020Dec. 31, 2019Dec. 31, 2018
Restricted stock from early exercise of options
Stock‑Based Compensation
Unvested restricted common stock at beginning of period102,896 70,945
Grants in period51,913
Vested(16,921)(19,962)
Unvested restricted common stock at end of period85,975 102,896
Stock option
Stock‑Based Compensation
Liability for unvested shares $ 0.1 $ 0.1

Stock_Based Compensation - Rest

Stock‑Based Compensation - Restricted common stock award activity (Details) - USD ($) $ / shares in Units, $ in Millions3 Months Ended6 Months Ended12 Months Ended
Jun. 30, 2020Jun. 30, 2020Dec. 31, 2019
Restricted stock awards
Shares
Unvested restricted common stock at beginning of period209,742 329,365
Vested(58,655)(119,623)
Unvested restricted common stock at end of period151,087 151,087 209,742
Weighted Average Grant Date Fair Value
Unvested restricted common stock at beginning of period $ 0.0443 $ 0.0485
Vested0.0400 0.0548
Unvested restricted common stock at end of period $ 0.0500 $ 0.0500 $ 0.0443
Total fair value of restricted common stock vested $ 0.1 $ 0.1
Restricted stock awards | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Liability for unvested awards $ 0.1 $ 0.1 $ 0.1
Service‑based restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period4 years
Grants in period0 0

Stock_Based Compensation - St_2

Stock‑Based Compensation - Stock based compensation expense (Details) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2020Jun. 30, 2019Jun. 30, 2020Jun. 30, 2019
Stock‑Based Compensation
Stock‑based compensation expense $ 490 $ 18 $ 601 $ 36
Total unrecognized stock‑based compensation expense related to the unvested stock‑based awards14,200 $ 14,200
Unrecognized stock‑based compensation expense, weighted average period3 years 4 months 2 days
Research and development expenses
Stock‑Based Compensation
Stock‑based compensation expense164 9 $ 218 18
General and administrative expenses
Stock‑Based Compensation
Stock‑based compensation expense $ 326 $ 9 $ 383 $ 18

License Agreement (Details)

License Agreement (Details)1 Months Ended3 Months Ended6 Months Ended
Oct. 31, 2017USD ($)itemJun. 30, 2020USD ($)Jun. 30, 2019USD ($)Jun. 30, 2020USD ($)Jun. 30, 2019USD ($)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Research and development $ 9,937,000 $ 4,366,000 $ 17,971,000 $ 7,509,000
MEE License
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of domestic patients | item3,000
IND filing period18 months
Fair value of stock $ 100,000
Milestone payment amount0 0 0 0
Period for start commercial sale of product10 years
Number of days for advance written notice90 days
Research and development0 0 0 0
MEE License | Maximum
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Milestone payment amount $ 17,700,000
Lonza Sublicense
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of domestic patients | item3,000
IND filing period18 months
Fair value of stock $ 100,000
Milestone payment amount0 0 0 0
Period for start commercial sale of product10 years
Number of days for advance written notice90 days
Research and development $ 0 $ 0 $ 0 $ 0
Lonza Sublicense | Maximum
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Milestone payment amount $ 18,500,000

Net Loss per Share (Details)

Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2020Mar. 31, 2020Jun. 30, 2019Mar. 31, 2019Jun. 30, 2020Jun. 30, 2019
Net Loss per Share
Net loss $ (12,523) $ (10,440) $ (2,004) $ (5,909) $ (22,963) $ (7,913)
Weighted‑average common shares outstanding, basic and diluted1,124,251 586,616 916,521 568,811
Net loss per share attributable to common stockholders, basic and diluted $ (11.14) $ (3.42) $ (25.05) $ (13.91)

Net Loss per Share - Antidiluti

Net Loss per Share - Antidilutive securities (Details) - shares6 Months Ended
Jun. 30, 2020Jun. 30, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities excluded from computation of earnings per share amount3,085,142 19,639,533
Convertible preferred stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities excluded from computation of earnings per share amount18,969,672
Restricted stock awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities excluded from computation of earnings per share amount237,062 329,573
Stock option
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities excluded from computation of earnings per share amount2,848,080 340,288