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Restatement of Previously Issued Combined Financial Statements | 12 Months Ended
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Dec. 31, 2021
Accounting Changes and Error Corrections [Abstract] |
Restatement of Previously Issued Combined Financial Statements | 2. Restatement of Previously Issued Combined Financial Statements Subsequent to the issuance of the audited combined financial statements for the year ended December 31, 2020 and 2019, the Company determined the balance of accounts receivable, net, as of December 31, 2020, was understated by $7.0 million and general and administrative expense was understated by $0.7 million for the year ended December 31, 2019. The error as of December 31, 2020 was the result of the omission of an unbilled amount which was also improperly excluded from net transfers from parent company in the combined statement of changes in parent company net investment for the year ended December 31, 2020, resulting in an understatement of parent company net investment. The error as of December 31, 2019 related to bad debt expense that was not properly included in general and administrative expense on the combined statements of operations and was improperly recorded as part of the net transfers from parent company in the combined statements of changes in parent company net investment. The errors identified as of December 31, 2020 and 2019, each resulted in the overstatement of cash provided by operating activities and an understatement of cash provided by financing activities in the combined statements of cash flows, in the respective periods. The Company has concluded that the errors identified were material to the combined financial statements as of and for the year ended December 31, 2020 and 2019. Accordingly, previously reported amounts have been revised to reflect the correction of the error as well as other immaterial errors identified through the process of compiling the carve-out financial statements. The following tables present the revised results for the year ended December 31, 2020, the adjustments made and the previously reported amounts to summarize the effect of the restatement on the previously-issued combined financial statements for the periods impacted (in thousands). Combined Balance Sheets
|  | December 31, 2020 |
|  | Reported |  |  | Adjustment |  |  | Restated |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable |  | $ | 8,870 |  |  | $ | 7,005 |  |  | $ | 15,875 |
Total current assets |  | $ | 9,644 |  |  | $ | 7,005 |  |  | $ | 16,649 |
Intangible assets, net |  | $ | 186,592 |  |  | $ | 52 |  |  | $ | 186,644 |
Goodwill |  | $ | 84,066 |  |  | $ | (87 | ) |  | $ | 83,979 |
Total assets |  | $ | 288,410 |  |  | $ | 6,970 |  |  | $ | 295,380 |
|  | December 31, 2020 |
|  | Reported |  |  | Adjustment |  |  | Restated |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Accrued liabilities |  | $ | 3,456 |  |  | $ | 500 |  |  | $ | 3,956 |
Current portion of finance lease liabilities |  | $ | 14 |  |  | $ | (13 | ) |  | $ | 1 |
Total current liabilities |  | $ | 13,790 |  |  | $ | 487 |  |  | $ | 14,277 |
Deferred income taxes, net |  | $ | 29,185 |  |  | $ | (260 | ) |  | $ | 28,925 |
Other long-term liabilities |  | $ | 1,295 |  |  | $ | 13 |  |  | $ | 1,308 |
Total liabilities |  | $ | 59,603 |  |  | $ | 240 |  |  | $ | 59,843 |
Parent company net investment: |  |  |  |  |  |  |  |  |  |  |  |
Parent company net investment |  | $ | 228,807 |  |  | $ | 6,730 |  |  | $ | 235,537 |
Total liabilities and parent company net investment |  | $ | 288,410 |  |  | $ | 6,970 |  |  | $ | 295,380 |
Combined Statements of Operations
|  | Year ended December 31, 2020 |
|  | Reported |  |  | Adjustment |  |  | Restated |
Research and development |  | $ | 24,894 |  |  | $ | (98 | ) |  | $ | 24,796 |
General and administrative |  | $ | 10,240 |  |  | $ | (15 | ) |  | $ | 10,225 |
Total operating expenses |  | $ | 49,004 |  |  | $ | (113 | ) |  | $ | 48,891 |
Loss from operations |  | $ | (25,736 | ) |  | $ | 113 |  |  | $ | (25,623 | )
Loss before income tax |  | $ | (23,841 | ) |  | $ | 113 |  |  | $ | (23,728 | )
Income tax benefit (expense) |  | $ | 5,945 |  |  | $ | 226 |  |  | $ | 6,171 |
Net loss |  | $ | (17,896 | ) |  | $ | 339 |  |  | $ | (17,557 | )
Combined Statements of changes in Parent Company Net Investment
|  | December 31, 2020 |
|  | Reported |  |  | Adjustment |  |  | Restated |
Parent company net investment – January 1, 2020 |  | $ | 218,185 |  |  | $ | 58 |  |  | $ | 218,243 |
Net loss |  | $ | (17,896 | ) |  | $ | 339 |  |  | $ | (17,557 | )
Net transfers from parent company |  | $ | 19,353 |  |  | $ | 6,333 |  |  | $ | 25,686 |
Parent company net investment – December 31, 2020 |  | $ | 228,807 |  |  | $ | 6,730 |  |  | $ | 235,537 |
Combined Statements of Cash Flows
|  | Year ended December 31, 2020 |
|  | Reported |  |  | Adjustment |  |  | Restated |
Operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Net loss |  | $ | (17,896 | ) |  | $ | 339 |  |  | $ | (17,557 | )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Deferred income taxes, net |  | $ | (5,960 | ) |  | $ | (225 | ) |  | $ | (6,185 | )
Other |  | $ | — |  |  | $ | 161 |  |  | $ | 161 |
Changes in operating assets and liabilities, net of acquisitions: |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable, net |  | $ | (1,096 | ) |  | $ | 1,435 |  |  | $ | 339 |
Accounts payable and accrued liabilities |  | $ | 2,337 |  |  | $ | 422 |  |  | $ | 2,759 |
Deferred revenue |  | $ | 9,779 |  |  | $ | (8,451 | ) |  | $ | 1,328 |
Other |  | $ | 1,323 |  |  | $ | (14 | ) |  | $ | 1,309 |
Net cash provided by operating activities |  | $ | 9,952 |  |  | $ | (6,333 | ) |  | $ | 3,619 |
|  | Year ended December 31, 2020 |
|  | Reported |  |  | Adjustment |  |  | Restated |
Financing activities: |  |  |  |  |  |  |  |  |  |  |  |
Net transfer from parent |  | $ | 19,353 |  |  | $ | 6,333 |  |  | $ | 25,686 |
Net cash provided by financing activities |  | $ | 17,028 |  |  | $ | 6,333 |  |  | $ | 23,361 |
Supplemental disclosure of cash flow information: |  |  |  |  |  |  |  |  |  |  |  |
Deferred revenue recorded in accounts receivable |  | $ | — |  |  | $ | 8,451 |  |  | $ | 8,451 |
The following tables present the revised results for the year ended December 31, 2019, the adjustments made and the previously reported amounts to summarize the effect of the restatement on the previously-issued combined financial statements for the periods impacted (in thousands). Combined Balance Sheets
|  | December 31, 2019 |
|  | Reported |  |  | Adjustment |  |  | Restated |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable |  | $ | 7,774 |  |  | $ | 150 |  |  | $ | 7,924 |
Total current assets |  | $ | 7,795 |  |  | $ | 150 |  |  | $ | 7,945 |
Goodwill |  | $ | 77,108 |  |  | $ | (86 | ) |  | $ | 77,022 |
Total assets |  | $ | 262,320 |  |  | $ | 64 |  |  | $ | 262,384 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable |  | $ | 806 |  |  | $ | 71 |  |  | $ | 877 |
Current portion of finance lease liabilities |  | $ | — |  |  | $ | 7 |  |  | $ | 7 |
Total current liabilities |  | $ | 6,139 |  |  | $ | 78 |  |  | $ | 6,217 |
Deferred income taxes, net |  | $ | 35,388 |  |  | $ | (86 | ) |  | $ | 35,302 |
Other long-term liabilities |  | $ | 295 |  |  | $ | 14 |  |  | $ | 309 |
Total liabilities |  | $ | 44,135 |  |  | $ | 6 |  |  | $ | 44,141 |
Parent company net investment: |  |  |  |  |  |  |  |  |  |  |  |
Parent company net investment |  | $ | 218,185 |  |  | $ | 58 |  |  | $ | 218,243 |
Total liabilities and parent company net investment |  | $ | 262,320 |  |  | $ | 64 |  |  | $ | 262,384 |
Combined Statements of Operations
|  | Year ended December 31, 2019 |
|  | Reported |  |  | Adjustment |  |  | Restated |
License and milestone revenue |  | $ | 12,685 |  |  | $ | 65 |  |  | $ | 12,750 |
Service revenue |  | $ | 5,528 |  |  | $ | 40 |  |  | $ | 5,568 |
Total revenue |  | $ | 18,213 |  |  | $ | 105 |  |  | $ | 18,318 |
Research and development |  | $ | 13,137 |  |  | $ | 71 |  |  | $ | 13,208 |
General and administrative |  | $ | 7,976 |  |  | $ | 675 |  |  | $ | 8,651 |
Total operating expenses |  | $ | 30,599 |  |  | $ | 746 |  |  | $ | 31,345 |
Loss from operations |  | $ | (12,386 | ) |  | $ | (641 | ) |  | $ | (13,027 | )
Loss before income tax |  | $ | (12,386 | ) |  | $ | (641 | ) |  | $ | (13,027 | )
Income tax benefit (expense) |  | $ | (657 | ) |  | $ | 95 |  |  | $ | (562 | )
Net loss |  | $ | (13,043 | ) |  | $ | (546 | ) |  | $ | (13,589 | )
Combined Statements of changes in Parent Company Net Investment
|  | December 31, 2019 |
|  | Reported |  |  | Adjustment |  |  | Restated |
Net loss |  | $ | (13,043 | ) |  | $ | (546 | ) |  | $ | (13,589 | )
Net transfers from parent company |  | $ | 19,686 |  |  | $ | 604 |  |  | $ | 20,290 |
Parent company net investment – December 31, 2019 |  | $ | 218,185 |  |  | $ | 58 |  |  | $ | 218,243 |
Combined Statements of Cash Flows
|  | Year ended December 31, 2019 |
|  | Reported |  |  | Adjustment |  |  | Restated |
Operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Net loss |  | $ | (13,043 | ) |  | $ | (546 | ) |  | $ | (13,589 | )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Deferred income taxes, net |  | $ | 653 |  |  | $ | (96 | ) |  | $ | 557 |
Changes in operating assets and liabilities, net of acquisitions: |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable, net |  | $ | (5,565 | ) |  | $ | 1,275 |  |  | $ | (4,290 | )
Accounts payable and accrued liabilities |  | $ | (648 | ) |  | $ | 78 |  |  | $ | (570 | )
Deferred revenue |  | $ | (450 | ) |  | $ | (1,425 | ) |  | $ | (1,875 | )
Other |  | $ | (1,959 | ) |  | $ | 110 |  |  | $ | (1,849 | )
Net cash used in operating activities |  | $ | (4,591 | ) |  | $ | (604 | ) |  | $ | (5,195 | )
Financing activities: |  |  |  |  |  |  |  |  |  |  |  |
Net transfer from parent |  | $ | 19,686 |  |  | $ | 604 |  |  | $ | 20,290 |
Net cash provided by financing activities |  | $ | 16,686 |  |  | $ | 604 |  |  | $ | 17,290 |
Supplemental disclosure of cash flow information: |  |  |  |  |  |  |  |  |  |  |  |
Deferred revenue recorded in accounts receivable |  | $ | — |  |  | $ | 1,425 |  |  | $ | 1,425 |

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- Definition The entire disclosure for reporting error correction. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 7 -URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22644-107794 + Details
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