phas-10q_20190930.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number 001-38697

 

PhaseBio Pharmaceuticals, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

 

03-0375697

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

1 Great Valley Parkway, Suite 30

Malvern, Pennsylvania 19355

(Address including zip code of principal executive offices)

(610) 981-6500

(Registrant’s telephone number, including area code)

 

 

Securities registered or to be registered pursuant to Section 12(b) of the Act.

 

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock

 

PHAS

 

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

 

 

 

 

 

 

 

 

Large accelerated filer

 

  

Accelerated filer

 

Non-accelerated filer

 

  

  

Smaller reporting company

 

 

 

 

  

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

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

 

 

Class of Common Stock

 

Outstanding Shares as of November 8, 2019

Common Stock, $0.001 par value

 

28,766,332

 

 

 

 


Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

2

Item 1.

Condensed Financial Statements (Unaudited)

2

 

Condensed Balance Sheets

2

 

Condensed Statements of Operations

3

 

Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

4

 

Condensed Statements of Cash Flows

5

 

Notes to Unaudited Condensed Financial Statements

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

19

Item 3.

Quantitative and Qualitative Disclosures About Market Risks

30

Item 4.

Controls and Procedures

31

 

 

 

PART II.

OTHER INFORMATION

32

Item 1.

Legal Proceedings

32

Item 1A.

Risk Factors

32

Item 2.

Recent Sales of Unregistered Securities and Use of Proceeds

67

Item 3.

Defaults Upon Senior Securities

67

Item 4.

Mine Safety Disclosures

67

Item 5.

Other Information

67

Item 6.

Exhibits

67

 

Signatures

69

1


PART 1. FINANCIAL INFORMATION

Item 1.

Condensed Financial Statements

PHASEBIO PHARMACEUTICALS, INC.

CONDENSED BALANCE SHEETS

(in thousands, except share and per share amounts)

(unaudited)

 

 

 

September 30,

2019

 

 

December 31,

2018

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

81,771

 

 

$

61,031

 

Restricted cash

 

 

 

 

 

20

 

Other receivable

 

 

583

 

 

 

233

 

Prepaid expenses and other assets

 

 

1,015

 

 

 

1,344

 

Total current assets

 

 

83,369

 

 

 

62,628

 

Property and equipment, net

 

 

1,022

 

 

 

355

 

Operating lease right-of-use assets

 

 

1,780

 

 

 

 

Other assets

 

 

32

 

 

 

43

 

Total assets

 

$

86,203

 

 

$

63,026

 

Liabilities and stockholders' equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current portion of long-term debt

 

$

1,990

 

 

$

 

Accounts payable

 

 

1,659

 

 

 

1,806

 

Accrued expenses and other current liabilities

 

 

2,313

 

 

 

2,771

 

Total current liabilities

 

 

5,962

 

 

 

4,577

 

Long-term debt

 

 

7,740

 

 

 

7,500

 

Operating lease liabilities

 

 

1,577

 

 

 

 

Other long-term liabilities

 

 

120

 

 

 

 

Deferred rent

 

 

 

 

 

22

 

Total liabilities

 

 

15,399

 

 

 

12,099

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value; 10,000,000 shares authorized at September 30, 2019 and

   December 31, 2018; zero shares issued and outstanding at September 30, 2019 and

   December 31, 2018

 

 

 

 

 

 

Common stock, $0.001 par value; 200,000,000 shares authorized; 28,782,811 shares

   issued and 28,752,844 shares outstanding at September 30, 2019; 24,528,242 shares

   issued and 24,498,275 shares outstanding at December 31, 2018

 

 

29

 

 

 

25

 

Treasury stock, at cost, 29,967 shares as of September 30, 2019 and December 31, 2018

 

 

(24

)

 

 

(24

)

Additional paid-in capital

 

 

221,626

 

 

 

173,837

 

Accumulated deficit

 

 

(150,827

)

 

 

(122,911

)

Total stockholders’ equity

 

 

70,804

 

 

 

50,927

 

Total liabilities and stockholders' equity

 

$

86,203

 

 

$

63,026

 

 

See accompanying notes to unaudited condensed financial statements.

2


PHASEBIO PHARMACEUTICALS, INC.

CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grant revenue

 

$

241

 

 

$

411

 

 

$

1,097

 

 

$

411

 

Revenue under collaborative agreement

 

 

 

 

 

 

 

 

500

 

 

 

 

Total revenue

 

 

241

 

 

 

411

 

 

 

1,597

 

 

 

411

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

9,028

 

 

 

4,354

 

 

 

22,530

 

 

 

9,779

 

General and administrative

 

 

2,803

 

 

 

1,056

 

 

 

7,523

 

 

 

2,616

 

Total operating expenses

 

 

11,831

 

 

 

5,410

 

 

 

30,053

 

 

 

12,395

 

Loss from operations

 

 

(11,590

)

 

 

(4,999

)

 

 

(28,456

)

 

 

(11,984

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

451

 

 

 

60

 

 

 

1,259

 

 

 

132

 

Interest expense

 

 

(266

)

 

 

(890

)

 

 

(711

)

 

 

(3,741

)

Foreign exchange gain (loss)

 

 

14

 

 

 

 

 

 

(8

)

 

 

 

Change in fair value of warrant liability

 

 

 

 

 

(1,713

)

 

 

 

 

 

(2,709

)

Change in fair value of derivative liability

 

 

 

 

 

(359

)

 

 

 

 

 

(676

)

Total other income (expense)

 

 

199

 

 

 

(2,902

)

 

 

540

 

 

 

(6,994

)

Net loss

 

$

(11,391

)

 

$

(7,901

)

 

$

(27,916

)

 

$

(18,978

)

Net loss per common share, basic and diluted

 

$

(0.40

)

 

$

(10.45

)

 

$

(1.03

)

 

$

(25.33

)

Weighted average common shares outstanding, basic and diluted

 

 

28,719,932

 

 

 

755,908

 

 

 

27,065,774

 

 

 

749,198

 

 

See accompanying notes to unaudited condensed financial statements.

 

 

 

3


 

PHASEBIO PHARMACEUTICALS, INC.

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

(in thousands, except share amounts)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity (Deficit)

 

 

Redeemable Convertible

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Total

Stockholders'

 

 

Preferred Stock

 

 

 

Common Stock

 

 

Treasury Stock

 

 

Paid-in

 

 

Accumulated

 

 

Equity

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

(Deficit)

 

Balance at December 31, 2018

 

 

 

$

 

 

 

 

24,528,242

 

 

$

25

 

 

 

(29,967

)

 

$

(24

)

 

$

173,837

 

 

$

(122,911

)

 

$

50,927

 

Issuance of common stock warrants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

210

 

 

 

 

 

 

210

 

Exercises of stock options

 

 

 

 

 

 

 

 

150

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

238

 

 

 

 

 

 

238

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,293

)

 

 

(7,293

)

Balance at March 31, 2019

 

 

 

 

 

 

 

 

24,528,392

 

 

 

25

 

 

 

(29,967

)

 

 

(24

)

 

 

174,285

 

 

 

(130,204

)

 

 

44,082

 

Issuance of common stock warrants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

86

 

 

 

 

 

 

86

 

Issuance of common stock in public offering, net

 

 

 

 

 

 

 

 

4,124,475

 

 

 

4

 

 

 

 

 

 

 

 

 

46,273

 

 

 

 

 

 

46,277

 

Exercises of stock options

 

 

 

 

 

 

 

 

74,740

 

 

 

 

 

 

 

 

 

 

 

 

126

 

 

 

 

 

 

126

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

270

 

 

 

 

 

 

270

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,232

)

 

 

(9,232

)

Balance at June 30, 2019

 

 

 

 

 

 

 

 

28,727,607

 

 

 

29

 

 

 

(29,967

)

 

 

(24

)

 

 

221,040

 

 

 

(139,436

)

 

 

81,609

 

Exercises of stock options

 

 

 

 

 

 

 

 

55,204

 

 

 

 

 

 

 

 

 

 

 

 

95

 

 

 

 

 

 

95

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

491

 

 

 

 

 

 

491

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11,391

)

 

 

(11,391

)

Balance at September 30, 2019

 

 

 

$

 

 

 

 

28,782,811

 

 

$

29

 

 

 

(29,967

)

 

$

(24

)

 

$

221,626

 

 

$

(150,827

)

 

$

70,804

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2017

 

9,131,999

 

 

$

89,634

 

 

 

 

775,755

 

 

$

1

 

 

 

(29,967

)

 

$

(24

)

 

$

1,672

 

 

$

(99,065

)

 

$

(97,416

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

104

 

 

 

 

 

 

104

 

Accretion of redeemable preferred stock

   to redemption value

 

 

 

 

16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(16

)

 

 

 

 

 

(16

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,403

)

 

 

(4,403

)

Balance at March 31, 2018

 

9,131,999

 

 

 

89,650

 

 

 

 

775,755

 

 

 

1

 

 

 

(29,967

)

 

 

(24

)

 

 

1,760

 

 

 

(103,468

)

 

 

(101,731

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

62

 

 

 

 

 

 

62

 

Accretion of redeemable preferred stock

   to redemption value

 

 

 

 

17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17

)

 

 

 

 

 

(17

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,674

)

 

 

(6,674

)

Balance at June 30, 2018

 

9,131,999

 

 

 

89,667

 

 

 

 

775,755

 

 

 

1

 

 

 

(29,967

)

 

 

(24

)

 

 

1,805

 

 

 

(110,142

)

 

 

(108,360

)

Issuance of redeemable preferred stock

 

1,842,959

 

 

 

14,890

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of redeemable preferred stock upon

   conversion of promissory notes

 

2,080,209

 

 

 

19,778

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercises of warrants

 

144,948

 

 

 

1,212

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercises of stock options

 

 

 

 

 

 

 

 

19,885

 

 

 

 

 

 

 

 

 

 

 

 

53

 

 

 

 

 

 

53

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

96

 

 

 

 

 

 

96

 

Accretion of redeemable preferred stock

   to redemption value

 

 

 

 

62

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(62

)

 

 

 

 

 

(62

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,901

)

 

 

(7,901

)

Balance at September 30, 2018

 

13,200,115

 

 

$

125,609

 

 

 

 

795,640

 

 

$

1

 

 

 

(29,967

)

 

$

(24

)

 

$

1,892

 

 

$

(118,043

)

 

$

(116,174

)

 

See accompanying notes to unaudited condensed financial statements.

 

 

4

 


 

PHASEBIO PHARMACEUTICALS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

Operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(27,916

)

 

$

(18,978

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

124

 

 

 

82

 

Stock-based compensation

 

 

999

 

 

 

262

 

Non-cash interest expense

 

 

354

 

 

 

3,580

 

Change in fair value warrant liability

 

 

 

 

 

2,709

 

Change in fair value derivative liability

 

 

 

 

 

676

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Other receivable

 

 

(350

)

 

 

(411

)

Prepaid expenses and other assets

 

 

340

 

 

 

130

 

Accounts payable

 

 

(114

)

 

 

558

 

Accrued expenses

 

 

(556

)

 

 

1,182

 

Deferred rent

 

 

14

 

 

 

(5

)

Net cash used in operating activities

 

 

(27,105

)

 

 

(10,215

)

Investing activities

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(824

)

 

 

(31

)

Net cash used in investing activities

 

 

(824

)

 

 

(31

)

Financing activities

 

 

 

 

 

 

 

 

Proceeds from issuance of redeemable convertible preferred stock, net

 

 

 

 

 

17,712

 

Proceeds from issuance of common stock in public offering, net

 

 

46,277

 

 

 

 

Long-term borrowings, net

 

 

3,089

 

 

 

3,995

 

Payments of initial public offering costs

 

 

 

 

 

(595

)

Proceeds from exercise of stock options

 

 

221

 

 

 

53

 

Proceeds from exercise of warrants

 

 

 

 

 

16

 

Repayments of long-term debt

 

 

(938

)

 

 

 

Net cash provided by financing activities

 

 

48,649

 

 

 

21,181

 

Net increase in cash and cash equivalents

 

 

20,720

 

 

 

10,935

 

Cash, cash equivalents and restricted cash at the beginning of the period

 

 

61,051

 

 

 

13,406

 

Cash, cash equivalents and restricted cash at the end of the period

 

$

81,771

 

 

$

24,341

 

Supplemental disclosure for cash flow

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

357

 

 

$

161

 

Supplemental disclosure of non-cash investing and financing activities

 

 

 

 

 

 

 

 

Accrued interest on term loan refinanced to principal

 

$

308

 

 

$

 

Conversion of convertible promissory notes into redeemable convertible

   preferred stock

 

$

 

 

$

19,778

 

Issuance of warrants in conjunction with debt

 

$

296

 

 

$

2,822

 

Debt refinanced with new term loan

 

$

6,563

 

 

$

 

Initial recognition of operating lease right-of-use assets and operating lease liabilities

 

$

1,991

 

 

$

 

Accretion of redeemable convertible preferred stock

 

$

 

 

$

95

 

Warrant liability converted to redeemable convertible preferred stock upon

   the exercise of warrants

 

$

 

 

$

1,196

 

Deferred initial public offering costs included in accounts payable and accrued expenses

 

$

 

 

$

1,623

 

Purchases of property and equipment included in accounts payable

 

$

6

 

 

$

 

 

See accompanying notes to unaudited condensed financial statements.

 

 

5


PhaseBio Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(unaudited)

 

1.

Organization and Description of Business

Description of Business

PhaseBio Pharmaceuticals, Inc. (the “Company”) was incorporated as a Delaware corporation on January 10, 2002. The Company is a clinical-stage biopharmaceutical company focused on the development and commercialization of novel therapies to treat orphan diseases, with an initial focus on cardiopulmonary indications. The Company’s lead product candidate, PB2452, is a novel reversal agent for the antiplatelet drug ticagrelor, which the Company is developing for the treatment of patients on ticagrelor who are experiencing a major bleeding event or those who require urgent surgery. The Company’s second product candidate, PB1046, is a once-weekly fusion protein currently in a Phase 2b clinical trial for the treatment of pulmonary arterial hypertension. PB1046 utilizes the Company’s proprietary half-life extending elastin-like polypeptide technology, which also serves as an engine for the Company’s preclinical pipeline.

Reverse Stock Split

In October 2018, in connection with its initial public offering (“IPO”), the Company effected a 11.0634-for-1 reverse split of its outstanding common stock and redeemable convertible preferred stock. No fractional shares were issued in connection with the stock split, and the par value and other terms of the common stock were not affected by the stock split. All share and per share amounts, including stock options, have been retroactively adjusted in these condensed financial statements for all periods presented to reflect the reverse stock split. Further, exercise prices of stock options have been retroactively adjusted in these condensed financial statements for all periods presented to reflect the reverse stock split.

Liquidity

The Company has experienced net losses and negative cash flows from operations since its inception and, as of September 30, 2019, had an accumulated deficit of $150.8 million. The Company expects to continue to incur net losses for at least the next several years. As of September 30, 2019, the Company had cash and cash equivalents of $81.8 million and working capital of $77.4 million. Management believes that its cash and cash equivalents as of September 30, 2019, in addition to $5.0 million of proceeds from the October 2019 borrowing under its term loan (see Note 14), are sufficient to fund the Company’s operating expenses and capital requirements into the first quarter of 2021.

Basis of Presentation

The accompanying condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial reporting and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations. All adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the accompanying condensed financial statements have been made. Although these interim condensed financial statements do not include all of the information and footnotes required for complete annual financial statements, management believes the disclosures are adequate to make the information presented not misleading. The unaudited interim results of operations and cash flows for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the full year. The unaudited interim condensed financial statements and footnotes should be read in conjunction with the audited financial statements and footnotes for the year ended December 31, 2018, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on March 26, 2019, wherein a more complete discussion of significant accounting policies and certain other information can be found.

Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”). Certain non-significant reclassifications have been made to conform the prior period presentation. 

The Company manages its operations as a single reportable segment for the purposes of assessing performance and making operating decisions.

6


PhaseBio Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(unaudited)

 

2.

Significant Accounting Policies

Use of Estimates

The preparation of the Company’s condensed financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the Company’s condensed financial statements and accompanying notes. The most significant estimates in the Company’s condensed financial statements relate to the valuation of redeemable convertible preferred stock warrants prior to the IPO, the conversion option on the convertible notes prior to conversion and clinical trial accruals. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results could differ materially from those estimates and assumptions.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains certain deposit accounts and money market funds in federally insured financial institutions in excess of federally insured limits. The Company could experience losses on the money market funds in the future.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity from the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents include cash in readily available checking and money market accounts.

Restricted Cash

The Company had restricted cash of $20,000 as of December 31, 2018, which was held in a certificate of deposit at the Company’s bank to secure the Company’s corporate credit card. The restriction was removed in June 2019.

Fair Value of Financial Instruments

The carrying amounts of other receivable, prepaid expenses and other assets, accounts payable and accrued expenses and other current liabilities are reasonable estimates of their fair value because of the short maturity of these items. Based on the borrowing rates currently available to the Company for loans with similar terms, the Company believes the fair values of the term loan and operating lease liabilities and corresponding right-of-use assets approximate their respective carrying values.

Property and Equipment