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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

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

For the quarterly period ended March 31, 2022

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: 001-40631

 

Caribou Biosciences, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

45-3728228

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

 

2929 7th Street, Suite 105

Berkeley, California

94710

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (510) 982-6030

 

Securities 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, par value $0.0001 per share

 

CRBU

 

The Nasdaq Global Select Market

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

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

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

 

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

As of May 4, 2022, the registrant had 60,705,391 shares of common stock, $0.0001 par value per share, outstanding.

 

 

 


 

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

1

Item 1.

Financial Statements (Unaudited)

1

 

Condensed Consolidated Balance Sheets

1

 

Condensed Consolidated Statements of Operations and Comprehensive Loss

2

 

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

3

 

Condensed Consolidated Statements of Cash Flows

4

 

Notes to Unaudited Condensed Consolidated Financial Statements

6

Item 2.

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

24

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

33

Item 4.

Controls and Procedures

33

PART II.

OTHER INFORMATION

35

Item 1.

Legal Proceedings

35

Item 1A.

Risk Factors

35

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

35

Item 6.

Exhibits

36

Signatures

37

 

 

 

i


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

CARIBOU BIOSCIENCES, INC. AND ITS SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and per share amounts)

 

 

 

March 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

147,630

 

 

$

240,420

 

Marketable securities, short-term

 

 

206,101

 

 

 

135,412

 

Accounts receivable

 

 

374

 

 

 

1,153

 

Contract assets

 

 

1,494

 

 

 

1,488

 

Other receivables

 

 

4,169

 

 

 

5,483

 

Prepaid expenses and other current assets

 

 

8,242

 

 

 

7,236

 

Total current assets

 

 

368,010

 

 

 

391,192

 

NON-CURRENT ASSETS

 

 

 

 

 

 

Investments in equity securities

 

 

7,666

 

 

 

7,626

 

Marketable securities, long-term

 

 

37,092

 

 

 

37,676

 

Property and equipment - net

 

 

6,016

 

 

 

4,887

 

Operating lease, right of use asset

 

 

25,749

 

 

 

 

Other assets

 

 

1,464

 

 

 

975

 

TOTAL ASSETS

 

$

445,997

 

 

$

442,356

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

Accounts payable

 

$

1,814

 

 

$

3,990

 

Accrued expenses and other current liabilities

 

 

11,190

 

 

 

13,136

 

Lease liabilities

 

 

825

 

 

 

 

Deferred revenue

 

 

12,838

 

 

 

8,703

 

Total current liabilities

 

 

26,667

 

 

 

25,829

 

LONG-TERM LIABILITIES

 

 

 

 

 

 

Deferred revenue, net of current portion ($100 and $100 from related party)

 

 

17,326

 

 

 

22,032

 

Deferred rent and lease incentive liability

 

 

 

 

 

2,097

 

MSKCC success payments liability

 

 

2,484

 

 

 

4,080

 

Lease liabilities, non-current

 

 

27,238

 

 

 

 

Other liabilities

 

 

9

 

 

 

17

 

Deferred tax liabilities

 

 

476

 

 

 

476

 

Total liabilities

 

 

74,200

 

 

 

54,531

 

COMMITMENTS AND CONTINGENCIES (Note 9)

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Preferred stock, par value $0.0001 per share, 10,000,000 shares authorized at March 31, 2022 and December 31, 2021; no shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

 

 

 

 

 

 

Common stock, par value $0.0001 per share, 300,000,000 shares authorized at March 31, 2022 and December 31, 2021, respectively; 60,689,609 and 60,263,158 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

 

 

6

 

 

 

6

 

Additional paid-in-capital

 

 

489,762

 

 

 

485,748

 

Accumulated other comprehensive loss

 

 

(1,089

)

 

 

(135

)

Accumulated deficit

 

 

(116,882

)

 

 

(97,794

)

Total stockholders’ equity

 

 

371,797

 

 

 

387,825

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

445,997

 

 

$

442,356

 

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

1


 

CARIBOU BIOSCIENCES, INC. AND ITS SUBSIDIARIES

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(in thousands, except share and per share amounts)

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Licensing and collaboration revenue

 

$

2,664

 

 

$

1,586

 

Operating expenses:

 

 

 

 

 

 

Research and development

 

 

13,924

 

 

 

10,165

 

General and administrative

 

 

9,593

 

 

 

4,596

 

Total operating expenses

 

 

23,517

 

 

 

14,761

 

Loss from operations

 

 

(20,853

)

 

 

(13,175

)

Other income (expense):

 

 

 

 

 

 

Change in fair value of equity securities

 

 

(88

)

 

 

 

Change in fair value of the MSKCC success payments liability

 

 

1,596

 

 

 

 

Other income - net

 

 

257

 

 

 

16

 

Total other income (expense)

 

 

1,765

 

 

 

16

 

Net loss

 

 

(19,088

)

 

 

(13,159

)

Other comprehensive loss:

 

 

 

 

 

 

        Net unrealized loss on available-for-sale marketable securities, net of tax

 

 

(954

)

 

 

 

Net comprehensive loss

 

$

(20,042

)

 

$

(13,159

)

Net loss per share, basic and diluted

 

$

(0.32

)

 

$

(1.39

)

Weighted-average common shares outstanding, basic and diluted

 

 

60,546,170

 

 

 

9,499,448

 

 

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

2


 

CARIBOU BIOSCIENCES, INC. AND ITS SUBSIDIARIES

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

(Unaudited)

(in thousands, except share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Convertible Preferred Stock

 

 

Common Stock

 

 

Additional Paid-In

 

 

Other Comprehensive

 

 

Retained Earnings (Accumulated

 

 

Total Stockholders’ Equity

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit)

 

 

(Deficit)

 

BALANCE—December 31, 2021

 

 

 

 

$

 

 

 

60,263,158

 

 

$

6

 

 

$

485,748

 

 

$

(135

)

 

$

(97,794

)

 

$

387,825

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,024

 

 

 

 

 

 

 

 

 

3,024

 

Issuance of common stock under employee stock plans

 

 

 

 

 

 

 

 

36,596

 

 

 

 

 

 

361

 

 

 

 

 

 

 

 

 

361

 

Issuance of common stock on exercise of options

 

 

 

 

 

 

 

 

389,855

 

 

 

 

 

 

629

 

 

 

 

 

 

 

 

 

629

 

Net unrealized loss on available-for-sale marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(954

)

 

 

 

 

 

(954

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(19,088

)

 

 

(19,088

)

BALANCE—March 31, 2022

 

 

 

 

$

 

 

 

60,689,609

 

 

$

6

 

 

$

489,762

 

 

$

(1,089

)

 

$

(116,882

)

 

$

371,797

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE—December 31, 2020

 

 

7,766,582

 

 

$

41,323

 

 

 

9,710,830

 

 

$

1

 

 

$

7,433

 

 

$

 

 

$

(30,871

)

 

$

(23,437

)

Issuance of Series C convertible preferred stock, net of issuance costs of $6.2 million

 

 

6,663,940

 

 

 

108,827

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock on exercise of options

 

 

 

 

 

 

 

 

584,614

 

 

 

 

 

 

564

 

 

 

 

 

 

 

 

 

564

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

343

 

 

 

 

 

 

 

 

 

343

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(13,159

)

 

 

(13,159

)

BALANCE—March 31, 2021

 

 

14,430,522

 

 

$

150,150

 

 

 

10,295,444

 

 

$

1

 

 

$

8,340

 

 

$

 

 

$

(44,030

)

 

$

(35,689

)

 

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

3


 

CARIBOU BIOSCIENCES, INC. AND ITS SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net loss

 

$

(19,088

)

 

$

(13,159

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

308

 

 

 

221

 

Loss on disposal of fixed assets

 

 

 

 

 

3

 

Interest expense

 

 

 

 

 

4

 

Non-cash consideration for licensing and collaboration revenue

 

 

(128

)

 

 

 

Change in fair value of equity securities

 

 

88

 

 

 

 

Stock-based compensation expense

 

 

3,024

 

 

 

343

 

Change in fair value of MSKCC success payments liability

 

 

(1,596

)

 

 

686

 

Amortization of investment premiums

 

 

327

 

 

 

 

Non-cash lease expense

 

 

500

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

779

 

 

 

74

 

Contract assets

 

 

(6

)

 

 

355

 

Other receivables

 

 

1,313

 

 

 

(1,095

)

Prepaid expenses and other current assets

 

 

(1,296

)

 

 

(562

)

Other assets

 

 

(487

)

 

 

(421

)

Accounts payable

 

 

(1,915

)

 

 

37

 

Accrued expenses and other current liabilities

 

 

(2,831

)

 

 

3,879

 

Deferred revenue, current and long-term

 

 

(572

)

 

 

29,964

 

Deferred rent and lease incentive liability

 

 

 

 

 

(8

)

Operating lease liabilities

 

 

(85

)

 

 

 

Other liabilities

 

 

(8

)

 

 

(8

)

Net cash provided by (used in) operating activities

 

 

(21,673

)

 

 

20,313

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Maturities of marketable securities

 

 

39,300

 

 

 

 

Purchases of property and equipment

 

 

(723

)

 

 

(22

)

Purchases of marketable securities

 

 

(110,684

)

 

 

 

Net cash used in investing activities

 

 

(72,107

)

 

 

(22

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Proceeds from issuance of Series C convertible preferred stock, net of issuance costs

 

 

 

 

 

109,235

 

Proceeds from exercise of stock options and purchases of common stock under employee stock purchase plan

 

 

990

 

 

 

564

 

Payments on capital lease

 

 

 

 

 

(119

)

Net cash provided by financing activities

 

 

990

 

 

 

109,680

 

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

 

 

(92,790

)

 

 

129,971

 

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — BEGINNING OF PERIOD

 

 

240,466

 

 

 

15,953

 

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — END OF PERIOD

 

$

147,676

 

 

$

145,924

 

RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

 

 

 

 

 

 

Cash and cash equivalents

 

$

147,630

 

 

$

145,924

 

Restricted cash

 

 

46

 

 

 

 

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ON THE BALANCE SHEET

 

$

147,676

 

 

$

145,924

 

 

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

 

 

 

 

 

 

 

4


 

Cash paid for income taxes

 

$

 

 

$

 

Cash paid for interest

 

$

 

 

$

1

 

 

 

 

 

 

 

 

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

Acquisition of property and equipment included in accrued expenses and other current liabilities

 

$

981

 

 

$

95

 

Deferred issuance costs related to initial public offering unpaid at period end

 

$

 

 

$

422

 

Series C convertible preferred stock issuance costs unpaid at period end

 

$

 

 

$

408

 

Right-of-use-assets obtained in exchange for new operating lease liabilities

 

$

26,249

 

 

$

 

 

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

5


 

CARIBOU BIOSCIENCES, INC. AND ITS SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

1. Description of the Business, Organization, and Liquidity

 

Business and Organization

 

Caribou Biosciences, Inc. (the “Company” or “we”) is a clinical-stage CRISPR genome-editing biopharmaceutical company dedicated to developing innovative, transformative therapies for patients with devastating diseases. CRISPR is an acronym for Clustered Regularly Interspaced Short Palindromic Repeats. Our novel CRISPR platform, CRISPR hybrid RNA-DNA (“chRDNA,” pronounced “chardonnay”), enables high genome-editing precision to develop cell therapies that are specifically engineered to target cancer and are armored for enhanced persistence. We are advancing a pipeline of allogeneic, or off-the-shelf, chimeric antigen receptor (“CAR”)-T (“CAR-T”) and CAR-natural killer (“CAR-NK”) cell therapies for the treatment of patients with hematologic malignancies and solid tumors.

 

We incorporated in October 2011 as a Delaware corporation and are headquartered in Berkeley, California. We have four wholly owned subsidiaries: Antler Holdco, LLC, incorporated in Delaware in April 2019; Microbe Holdco, LLC, incorporated in Delaware in June 2020; Arboreal Holdco, LLC, incorporated in Delaware in November 2020; and Biloba Holdco, LLC, incorporated in Delaware in April 2021. Our wholly owned subsidiaries hold interests in our equity investments and do not have operating activities.

 

Liquidity

 

We have incurred net losses and negative cash flows from operations since our inception and we had an accumulated deficit of $116.9 million as of March 31, 2022. During the three months ended March 31, 2022, we incurred a net loss of $19.1 million and used $21.7 million of cash in operating activities. We expect to continue to incur substantial losses, and our ability to achieve and sustain profitability will depend on the successful development, approval, and commercialization of our product candidates and on our achievement of sufficient revenue to support our cost structure. We may never achieve profitability and, unless and until we do, we will need to continue to raise additional capital. Our management expects that existing cash, cash equivalents, and marketable securities of $390.8 million as of March 31, 2022, will be sufficient to fund our current operating plan for at least the next 12 months from the date of issuance of our condensed consolidated financial statements.

2. Summary of Significant Accounting Policies

 

There have been no changes to the significant accounting policies disclosed in Note 2 to the annual consolidated financial statements for the year ended December 31, 2021 included in our Annual Report on Form 10-K (“Form 10-K”), other than changes to our leasing policy described below in connection with the adoption of the guidance under the Accounting Standards Codification (“ASC”) 842, Leases.

 

Basis of Presentation and Principles of Consolidation

 

The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and include the accounts of Caribou Biosciences, Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions are eliminated in consolidation.

 

Use of Estimates

 

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires our 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 our condensed consolidated financial statements; and the reported amounts of revenue, income, and expenses during the applicable reporting period. On an ongoing basis, we evaluate our estimates and assumptions, including those related to revenue recognition, common stock valuation, stock-based compensation expense, accrued expenses related to research and development activities, valuation of the Memorial Sloan Kettering Cancer Center (“MSKCC”) success payments liability, and income taxes. Our management bases its estimates on historical experience and on various other assumptions that they believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from those estimates.

6


 

 

Segments

 

We operate and manage our business as one reportable and operating segment, which is the business of developing a pipeline of allogeneic CAR-T and CAR-NK cell therapies. Our president and chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for allocating resources and evaluating financial performance. All long-lived assets are maintained in the United States.

 

Concentrations of Credit Risk and Other Uncertainties

 

Financial instruments that potentially subject us to concentration of credit risk consist of cash and cash equivalents, accounts receivable, contract assets, other receivables, and investments in marketable securities and equity securities. Substantially all of our cash and cash equivalents are deposited in accounts at two financial institutions, and account balances may at times exceed federally insured limits. We mitigate the risks by investing in high-grade instruments, limiting our exposure to one issuer, and we monitor the ongoing creditworthiness of the financial institutions and issuers. We believe these financial institutions to be of high credit quality.

 

Licensees that represent 10% or more of our revenue and accounts receivable and contract assets are as follows:

 

 

 

Revenue

 

 

Accounts Receivable and
Contract Assets

 

 

 

Three Months Ended

 

 

As of

 

 

As of

 

 

 

March 31, 2022

 

 

March 31, 2021

 

 

March 31, 2022

 

 

December 31, 2021

 

Licensee A

 

 

23.1

%

 

 

38.8

%

 

 

 

*

 

 

 

*

Licensee B

 

 

19.6

%

 

 

34.1

%

 

 

28.0

%

 

 

24.6

%

Licensee C

 

 

35.0

%

 

 

 

*

 

 

33.4

%

 

 

45.1

%

Licensee D

 

 

 

*

 

 

 

*

 

 

14.3

%

 

 

 

*

Total

 

 

77.8

%

 

 

72.9

%

 

 

75.7

%

 

 

69.7

%

 

*Less than 10%

 

We monitor economic conditions to identify facts or circumstances that may indicate if any of our accounts receivable are not collectible or if the contract assets should be impaired. No allowance for doubtful accounts was recorded as of March 31, 2022 or December 31, 2021.

 

Leases

 

We adopted the guidance under ASC 842 on January 1, 2022 using the modified retrospective approach with a cumulative-effect adjustment as of January 1, 2022 in accordance with the Accounting Standard Update (“ASU”) 2016-02, Leases (Topic 842). We determine whether an arrangement is or contains a lease at the inception of the arrangement and whether such a lease is classified as a finance lease or operating lease at the commencement date of the lease. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities, and long-term lease liabilities. We elected not to recognize the right-of-use assets and lease liabilities for leases with lease terms of 12 months or less (short-term leases). Lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. As the interest rate implicit in our lease contracts is not readily determinable, we utilize a collateralized incremental borrowing rate based on the information available at the commencement date to determine the present value of lease payments. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received and impairment charges if we determine the right-of-use asset is impaired. There was no cumulative-effect adjustment recorded to retained earnings on January 1, 2022.

 

We consider the lease term to be the noncancellable period that we have the right to use the underlying asset, together with any periods where it is reasonably certain we will exercise an option to extend (or not terminate) the lease. Periods covered by an option to extend (or not terminate) the lease in which the exercise of the option is controlled by the lessor are included in the lease term.

 

Rent expense for operating leases is recognized on a straight-line basis over the lease term and is presented in operating expenses on the statements of operations and comprehensive loss. We have elected to not separate lease and non-lease components for our facilities leases and leases of electroporation devices and, instead, we account for each separate lease component and the non-lease components associated with that lease component as a single lease component. Variable lease payments are recognized as incurred and are presented in operating expenses on the statements of operations and comprehensive loss.

 

7


 

As of March 31, 2022 and December 31, 2021, we had no finance leases. For more information about the impact of adoption and disclosures on our leases, see Note 9.

 

Recent Accounting Pronouncements

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the FASB”) or other standard-setting bodies and are adopted by us as of the specified effective date.

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This ASU requires a lessee to recognize in its statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. We adopted the new standard as of January 1, 2022, using the modified retrospective approach. Comparative periods were not adjusted and continue to be presented under the previous accounting guidance. We elected the package of practical expedients permitted under the transition guidance, which allowed us to carry forward the historical lease classification of contracts entered into prior to January 1, 2022.

 

Our adoption of the new standard impacted the condensed consolidated balance sheets as follows (in thousands):

 

 

 

January 1, 2022