Restatement of Previously Issued Consolidated Financial Statements

9 Months Ended

Sep. 30, 2023

Accounting Changes and Error Corrections [Abstract]

Restatement of Previously Issued Consolidated Financial Statements

3. Restatement of Previously Issued Condensed Consolidated Financial Statements

On January 30, 2024, the Audit Committee of the Board of Directors of the Company, after discussions with the Company's management and its current and former independent registered public accounting firms, determined that the Company’s unaudited financial statements included in the Company’s Quarterly Report on Form 10-Q for the period ending September 30, 2023, filed with the SEC on November 9, 2023, as well as the relevant portions of any communication which describe or are based on the unaudited financial statements, should no longer be relied upon.

This Note discloses the nature of the restatement adjustments and discloses the cumulative effects of these adjustments on the condensed consolidated balance sheets, statements of operations, and statements of cash flows for the three and nine month periods ended September 30, 2023 and 2022 included in the original Form 10-Q. The condensed consolidated statements of stockholders’ (deficit) equity for the three and nine month periods ended September 30, 2023 and 2022 have also been restated for the correction to net loss.

Description of Restatement Adjustments

The restatement is related solely to the accounting treatment for certain government assistance arrangements with SIF and TPC that originated prior to 2021 in the form of conditionally repayable loans with below-market interest rates (the "Arrangements"). In connection with the preparation of the financial statements for fiscal year 2023, it was determined that the Arrangements were not properly accounted for. The Company initially accounted for these arrangements by analogizing to IAS 20 and IFRS 9, under which the fair value of the interest rate subsidy is recognized as income and the amount repayable is discounted by imputing a market rate of interest. During the preparation of the financial statements for fiscal year 2023, the Company determined that the debt-like characteristics of the Arrangements placed them in the scope of US GAAP guidance that precludes imputation of interest where interest rates are affected by tax attributes or legal restrictions prescribed by a governmental agency. As such, the Company restated other income from government assistance and interest expense on the condensed consolidated statements of operations and comprehensive loss and research incentives receivable and loans payable on the consolidated balance sheets to eliminate the effect of non-cash interest imputation. In addition to revenue projections, the revenue-based formula that determines the cash repayments under the SIF Loan requires other inputs, including the compound annual growth rate. An error related to the compound annual growth rate input in the estimation of debt repayment cash flows was also corrected.

The effects of the restatement, including the related income tax impacts are reflected in the impacted tables and footnotes throughout these consolidated financial statements in this Amendment No. 1. The restatement adjustments and their impacts on the previously issued condensed consolidated financial statements included in the original Form 10-Q are described below.

Condensed Consolidated Financial Statements - Restatement Reconciliation Tables

In light of the foregoing, in accordance with ASC 250, Accounting Changes and Error Corrections, we are restating the previously issued condensed consolidated financial statements for the three and nine month periods ended September 30, 2023 and 2022, to reflect the effects of the restatement adjustments, and to make certain corresponding disclosures. In the following tables, we have presented a reconciliation of our condensed consolidated balance sheets, statements of operations, and cash flows as previously reported for these prior periods to the restated and revised amounts. Financial statement line items and subtotals that were not impacted by the restatement adjustments have been omitted for enhanced clarity.

Summary of Restatement - Condensed Consolidated Balance Sheets


	As of September 30, 2023
(In thousands)	As Previously Reported		Restatement Adjustments		As Restated
Loans payable, net, current	$	30,006	$	193	$	30,199
Total current liabilities	43,328		193		43,521
Loans payable, net, noncurrent	9,108		23,722		32,830
Total liabilities	61,383		23,915		85,298
Accumulated deficit	(443,132)		(23,915)		(467,047)
Total stockholders' equity (deficit)	8,796		(23,915)		(15,119)
Total liabilities and stockholders’ equity (deficit)	70,179		—		70,179

Summary of Restatement - Condensed Consolidated Statements of Operations


	Three Months Ended September 30,
	2023						2022
(In thousands, except share and per share data)	As Previously Reported		Restatement Adjustments		As Restated		As Previously Reported		Restatement Adjustments		As Restated
Loss from operations	$	(18,407)	$	—	$	(18,407)	$	(15,164)	$	—	$	(15,164)
Other income (expense), net:
Interest expense	(1,247)		212		(1,035)		(1,069)		436		(633)
Government assistance	1,051		(1,051)		—		—		—		—
Other income (expense), net	365		562		927		948		1,225		2,173
Total other income (expense), net	2,578		(277)		2,301		1,853		1,661		3,514
Net loss	(15,829)		(277)		(16,106)		(13,311)		1,661		(11,650)
Net loss per share, basic and diluted	(0.12)		—		(0.12)		(0.11)		0.01		(0.10)
Weighted-average shares * used in computing net loss per share, basic and diluted	133,222,318		—		133,222,318		116,256,805		—		116,256,805



Net comprehensive loss	(15,814)		(277)		(16,091)		(13,255)		1,661		(11,594)


	Nine Months Ended September 30,
	2023						2022
(In thousands, except share and per share data)	As Previously Reported		Restatement Adjustments		As Restated		As Previously Reported		Restatement Adjustments		As Restated
Loss from operations	$	(64,004)	$	—	$	(64,004)	$	(38,427)	$	—	$	(38,427)
Other income (expense), net:
Interest expense	(2,482)		660		(1,822)		(3,588)		1,336		(2,252)
Government assistance	1,051		(1,051)		—		—		—		—
Other income (expense), net	(59)		25		(34)		1,301		1,481		2,782
Total other income (expense), net	(2,331)		(366)		(2,697)		(313)		2,817		2,504
Net loss	(66,335)		(366)		(66,701)		(38,740)		2,817		(35,923)
Net loss per share, basic and diluted	(0.50)		(0.01)		(0.51)		(0.32)		0.03		(0.29)
Weighted-average shares * used in computing net loss per share, basic and diluted	131,373,959		—		131,373,959		122,337,727		—		122,337,727



Net comprehensive loss	(66,405)		(366)		(66,771)		(38,722)		2,817		(35,905)

Summary of Restatement - Condensed Consolidated Statements of Cash Flows


	Nine Months Ended September 30,
	2023						2022
(In thousands)	As Previously Reported		Restatement Adjustments		As Restated		As Previously Reported		Restatement Adjustments		As Restated
Net loss	$	(66,335)	$	(366)	$	(66,701)	$	(38,740)	$	2,817	$	(35,923)
Adjustments to reconcile net loss to cash used in operating activities:
Non-cash interest expense	2,405		(660)		1,745		$	1,616	(1,336)		280
Government assistance	(1,051)		1,051		—		$	—	—		—
Unrealized foreign exchange loss (gain)	(15)		(25)		(40)		$	(1,226)	(1,481)		(2,707)
Net cash used in operating activities	(45,910)		—		(45,910)		(34,339)		—		(34,339)
Net cash used in investing activities	(176)		—		(176)		(316)		—		(316)
Net cash provided by financing activities	92,408		—		92,408		38,967		—		38,967
Effect of exchange rate changes on cash and cash equivalents	(70)		—		(70)		(31)		—		(31)