prvl-10q_20190630.htm

 

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 June 30, 2019    

 

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: 001-38939

 

Prevail Therapeutics Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

82-2129632

(State or other jurisdiction of

incorporation or organization)

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

 

430 East 29th Street, Suite 1520

New York, New York 10016

10016

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (917) 336-9310

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol

Name of exchange on which registered

Common Stock, par value $0.0001 per share

PRVL

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  

As of August 6, 2019, the registrant had 34,021,194 shares of common stock, par value $0.0001 per share, outstanding.

 

 

 


Table of Contents

 

 

 

Page

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

1

 

 

 

PART I.

FINANCIAL INFORMATION

2

 

 

 

Item 1.

Financial Statements (Unaudited)

2

 

Balance Sheets

2

 

Statements of Operations

3

 

Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Deficit

4

 

Statements of Cash Flows

5

 

Notes to Unaudited 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 Risk

28

Item 4.

Controls and Procedures

29

 

 

 

 

 

 

PART II.

OTHER INFORMATION

30

 

 

 

Item 1.

Legal Proceedings

30

Item 1a.

Risk Factors

30

Item 2.

Recent Sales of Unregistered Securities

78

Item 3.

Defaults Upon Senior Securities

78

Item 4.

Mine Safety Disclosures

78

Item 5.

Other Information

78

Item 6.

Exhibits

79

 

SIGNATURES

80

 

 


SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q are forward-looking statements, including statements about:

 

our expectations regarding the initiation, timing, scope and results of our development activities, including our planned clinical trials;

 

 

the timing of and plans for regulatory filings;

 

our plans to obtain and maintain regulatory approvals of our product candidates in any of the indications for which we plan to develop them;

 

 

the potential benefits of our product candidates and technologies;

 

our expectations regarding our ability to identify additional gene therapy product candidates;

 

the market opportunities for our product candidates and our ability to maximize those opportunities;

 

our business strategies and goals;

 

estimates of our expenses, capital requirements and need for additional financing;

 

our expectations regarding potentially establishing manufacturing capabilities;

 

the performance of our third-party suppliers and manufacturers,

 

our expectations regarding our ability to obtain and maintain intellectual property protection for our product candidates and our ability to operate our business without infringing on the intellectual property rights of others;

 

 

our expectations regarding developments and projections relating to our competitors and any competing therapies that are or become available;

 

 

our ability to identify, recruit and retain key personnel;

 

regulatory development in the United States and foreign countries; and

 

our expectations regarding the uses of the net proceeds from our initial public offering and the sufficiency of such net proceeds together with our existing cash and cash equivalents to fund our operations.

 

In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “continue” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target” or “will” or the negative of these terms or other similar expressions intended to identify statements about the future. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read the section titled “Risk Factors” set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report on Form 10-Q will prove to be accurate. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

You should read this Quarterly Report on Form 10-Q, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

 

1


PART I—FINANCIAL INFORMATION

Prevail Therapeutics Inc.

Balance Sheets

(Unaudited)

(in thousands, except share and per share data)

 

 

 

June 30,

2019

 

 

December 31,

2018

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

202,095

 

 

$

63,014

 

Prepaid expenses and other current assets

 

 

4,253

 

 

 

563

 

Total current assets

 

 

206,348

 

 

 

63,577

 

Property and equipment, net

 

 

2,123

 

 

 

678

 

Operating lease right-of-use assets

 

 

7,516

 

 

 

8,534

 

Restricted cash

 

 

91

 

 

 

91

 

TOTAL ASSETS

 

$

216,078

 

 

$

72,880

 

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND

   STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,003

 

 

$

1,241

 

Accrued expenses and other current liabilities

 

 

4,555

 

 

 

1,477

 

Operating lease liabilities

 

 

1,101

 

 

 

917

 

Total current liabilities

 

 

7,659

 

 

 

3,635

 

Long-term operating lease liabilities

 

 

7,380

 

 

 

7,952

 

TOTAL LIABILITIES

 

 

15,039

 

 

 

11,587

 

COMMITMENTS AND CONTINGENCIES (Note 13) REDEEMABLE

   CONVERTIBLE PREFERRED STOCK

 

 

 

 

 

 

 

 

Series Seed preferred stock - $0.0001 par value, 0 and 6,480,000 shares authorized,

   issued, and outstanding as of June 30, 2019 and December 31, 2018, respectively

 

 

 

 

 

3,524

 

Series A preferred stock - $0.0001 par value, 0 and 9,072,000 shares authorized,

   0 and 8,997,085 shares issued, and outstanding as of June 30, 2019

   and December 31, 2018, respectively

 

 

 

 

 

76,186

 

STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

Common stock - $0.0001 par value, 200,000,000 and 28,398,600 shares

   authorized as of June 30, 2019 and December 31, 2018, respectively,

   34,021,194 and 7,209,000 shares issued and outstanding as

   of June 30, 2019 and December 31, 2018

 

 

3

 

 

 

1

 

Additional paid-in capital

 

 

246,998

 

 

 

2,496

 

Accumulated deficit

 

 

(45,962

)

 

 

(20,914

)

Total stockholders’ equity (deficit)

 

 

201,039

 

 

 

(18,417

)

TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED

   STOCK, AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

$

216,078

 

 

$

72,880

 

 

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

2


Prevail Therapeutics Inc.

Statements of Operations

(Unaudited)

(in thousands, except share and per share data)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

11,955

 

 

$

3,207

 

 

$

20,366

 

 

$

4,511

 

General and administrative

 

 

3,713

 

 

 

959

 

 

 

5,598

 

 

 

1,600

 

Operating loss

 

 

(15,668

)

 

 

(4,166

)

 

 

(25,964

)

 

 

(6,111

)

Change in fair value of derivative liabilities

 

 

 

 

 

 

 

 

 

 

 

(781

)

Interest income

 

 

565

 

 

 

222

 

 

 

916

 

 

 

222

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

(471

)

Total other income (expense), net

 

 

565

 

 

 

222

 

 

 

916

 

 

 

(1,030

)

Net loss

 

$

(15,103

)

 

$

(3,944

)

 

$

(25,048

)

 

$

(7,141

)

Net loss per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

$

(0.58

)

 

$

(0.19

)

 

$

(1.05

)

 

$

(0.42

)

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

26,212,356

 

 

 

20,326,716

 

 

 

23,945,198

 

 

 

16,970,543

 

 

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


 

3


Prevail Therapeutics Inc.

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

(Unaudited)

(in thousands except share data)

 

 

 

Series Seed

 

 

Series A

 

 

Series B

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

Preferred Stock

 

 

Preferred Stock

 

 

Preferred Stock

 

 

Common Stock

 

 

Additional

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Paid-in Capital

 

 

Deficit

 

 

Deficit

 

For the three months ended June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at March 31, 2019

 

 

6,480,000

 

 

$

3,525

 

 

 

8,997,085

 

 

$

76,186

 

 

 

3,958,046

 

 

$

49,834

 

 

 

7,209,000

 

 

$

1

 

 

$

3,108

 

 

$

(30,859

)

 

$

(27,750

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,109

 

 

 

 

 

 

1,109

 

Conversion of convertible preferred stock

   into common stock upon the closing of

   initial public offering

 

 

(6,480,000

)

 

 

(3,525

)

 

 

(8,997,085

)

 

 

(76,186

)

 

 

(3,958,046

)

 

 

(49,834

)

 

 

19,435,131

 

 

 

1

 

 

 

129,542

 

 

 

 

 

 

129,543

 

Issuance of common stock upon closing of

   initial public offering, net of issuance

   costs of $3,015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,353,000

 

 

 

1

 

 

 

113,235

 

 

 

 

 

 

113,236

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

24,063

 

 

 

 

 

 

4

 

 

 

 

 

 

4

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(15,103

)

 

 

(15,103

)

Balance at June 30, 2019

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

34,021,194

 

 

$

3

 

 

$

246,998

 

 

$

(45,962

)

 

$

201,039

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended June 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at March 31, 2018

 

 

6,480,000

 

 

$

3,524

 

 

 

8,053,489

 

 

$

68,189

 

 

 

 

 

$

 

 

 

7,209,000

 

 

$

1

 

 

$

1,038

 

 

$

(5,024

)

 

$

(3,985

)

Issuance of Series A Preferred Stock

 

 

 

 

 

 

 

 

943,596

 

 

 

7,997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

459

 

 

 

 

 

 

459

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,944

)

 

 

(3,944

)

Balance at June 30, 2018

 

 

6,480,000

 

 

$

3,524

 

 

 

8,997,085

 

 

$

76,186

 

 

 

 

 

$

 

 

 

7,209,000

 

 

$

1

 

 

$

1,497

 

 

$

(8,968

)

 

$

(7,470

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the six months ended June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2018

 

 

6,480,000

 

 

$

3,524

 

 

 

8,997,085

 

 

$

76,186

 

 

 

 

 

$

 

 

 

7,209,000

 

 

$

1

 

 

$

2,496

 

 

$

(20,914

)

 

$

(18,417

)

Issuance of Series B Preferred Stock,

   net of issuance costs of $166

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,958,046

 

 

 

49,834

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,721

 

 

 

 

 

 

1,721

 

Conversion of convertible preferred stock

   into common stock upon the closing of

   initial public offering

 

 

(6,480,000

)

 

 

(3,524

)

 

 

(8,997,085

)

 

 

(76,186

)

 

 

(3,958,046

)

 

 

(49,834

)

 

 

19,435,131

 

 

 

1

 

 

 

129,542

 

 

 

 

 

 

129,543

 

Issuance of common stock upon closing

   of initial public offering, net of issuance

   costs of $3,015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,353,000

 

 

 

1

 

 

 

113,235

 

 

 

 

 

 

113,236

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

24,063

 

 

 

 

 

 

4

 

 

 

 

 

 

4

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(25,048

)

 

 

(25,048

)

Balance at June 30, 2019

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

34,021,194

 

 

$

3

 

 

$

246,998

 

 

$

(45,962

)

 

$

201,039

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the six months ended June 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2017

 

 

6,480,000

 

 

$

3,524

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

7,209,000

 

 

$

1

 

 

$

886

 

 

$

(1,827

)

 

$

(940

)

Issuance of Series A Preferred Stock, net of

   issuance costs of $93

 

 

 

 

 

 

 

 

7,666,716

 

 

 

64,907

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series A Preferred Stock shares issued as a

   result of conversion of convertible

   note - related party

 

 

 

 

 

 

 

 

1,330,369

 

 

 

11,279

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

611

 

 

 

 

 

 

611

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,141

)

 

 

(7,141

)

Balance at June 30, 2018

 

 

6,480,000

 

 

$

3,524

 

 

 

8,997,085

 

 

$

76,186

 

 

 

 

 

$

 

 

 

7,209,000

 

 

$

1

 

 

$

1,497

 

 

$

(8,968

)

 

$

(7,470

)

 

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

 

4


Prevail Therapeutics Inc.

Statements of Cash Flows

(Unaudited)

(in thousands)

 

 

 

Six Months Ended June 30,

 

 

 

2019

 

 

2018

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(25,048

)

 

$

(7,141

)

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

 

 

 

 

 

 

 

 

Depreciation

 

 

93

 

 

 

14

 

Stock-based compensation

 

 

1,721

 

 

 

611

 

Amortization of convertible note discount, issuance costs and other non-cash

   interest

 

 

 

 

 

471

 

Change in fair value of derivative liabilities

 

 

 

 

 

781

 

Other

 

 

 

 

 

12

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

(3,690

)

 

 

(492

)

Operating lease right-of-use asset

 

 

1,018

 

 

 

146

 

Accounts payable

 

 

762

 

 

 

1,334

 

Accrued expenses and other current liabilities

 

 

3,078

 

 

 

417

 

Operating lease liabilities

 

 

(388

)

 

 

(140

)

Net cash used in operating activities

 

 

(22,454

)

 

 

(3,987

)

Cash flows from investing activities

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(1,538

)

 

 

(167

)

Net cash used in investing activities

 

 

(1,538

)

 

 

(167

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

116,251

 

 

 

 

Payment of issuance costs for preferred stock

 

 

(166

)

 

 

 

Payment of issuance costs for common stock

 

 

(3,016

)

 

 

(93

)

Proceeds from exercise of stock options

 

 

4

 

 

 

 

Proceeds from issuance of Series A preferred stock

 

 

 

 

 

65,000

 

Proceeds from issuance of Series B preferred stock

 

 

50,000

 

 

 

 

Net cash provided by financing activities

 

 

163,073

 

 

 

64,907

 

Net increase in cash, cash equivalents and restricted cash

 

 

139,081

 

 

 

60,753

 

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

 

 

63,105

 

 

 

12,836

 

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

 

$

202,186

 

 

$

73,589

 

Supplemental disclosure of non-cash investing and financing activities

 

 

 

 

 

 

 

 

Conversion of convertible note plus accrued interest into 1,330,369 shares of Series

   A preferred stock

 

$

 

 

$

11,279

 

Right-of-use asset obtained in exchange for operating lease obligation

 

$

 

 

$

7,740

 

Conversion of preferred stock to common stock upon the initial public offering

 

$

129,543

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30,

 

 

 

2019

 

 

2018

 

Reconciliation of cash, cash equivalents and restricted cash reported within

   the Balance Sheets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

202,095

 

 

$

73,498

 

Restricted Cash

 

 

91

 

 

 

91

 

Total cash, cash equivalents and restricted cash

 

 

202,186

 

 

 

73,589

 

 

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

 

 

5


 

 

Prevail Therapeutics Inc.

Notes to the Financial Statements (Unaudited)

1. NATURE OF THE BUSINESS

Prevail Therapeutics Inc. (the “Company”) was incorporated in the State of Delaware on July 6, 2017. The Company is a biotechnology company engaged in the research and development of novel gene therapies in an effort to treat Parkinson’s disease and other neurodegenerative diseases. Since beginning operations, the Company has devoted substantially all its efforts to research and development, recruiting management and technical staff, administration, and raising capital. In May 2019, the U.S. Food and Drug Administration, or FDA, declared the Investigational New Drug, or IND, application associated with the Company’s lead program, PR001, for the treatment of patients with Parkinson’s disease with GBA1 mutations, or PD-GBA, as open.

Stock Split - In June 2019, the Board of Directors of the Company approved a 1.62-for-one forward stock-split of the Company’s outstanding shares of common stock, convertible preferred stock and options outstanding and available for future issuance. The stock split became effective on June 7, 2019. Accordingly, all share and per share amounts for all periods presented in the accompanying financial statements and notes thereto have been retroactively adjusted, where applicable, to reflect this forward stock split. Shares of common stock underlying outstanding stock options and other equity instruments were proportionately increased and the respective per share value and exercise prices, if applicable, were proportionately decreased in accordance with the terms of the agreements governing such securities.

Initial Public Offering - In June 2019, the Company completed its initial public offering, or IPO, whereby the Company sold an aggregate of 7,353,000 shares of its common stock at a price of $17.00 per share. The shares began trading on The Nasdaq Global Select Market on June 20, 2019. The aggregate net proceeds received by the Company from the offering were approximately $113.2 million, after deducting underwriting discounts and commissions and offering expenses payable by the Company of $11.8 million. Upon the closing of the IPO, all outstanding shares of redeemable convertible preferred stock converted into 19,435,131 shares of common stock. Additionally, the Company is authorized to issue 200,000,000 shares of common stock and 10,000,000 shares of preferred stock. On June 24, 2019, Prevail Therapeutics Inc. filed an Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, in connection with the closing of the IPO.

Significant Risks and Uncertainties - The Company is subject to a number of risks common to early-stage biotechnology companies. Principal among these risks are the uncertainties in the development process, development of the same or similar technological innovations by competitors, protection of proprietary technology, dependence on key personnel, compliance with government regulations and approval requirements, and the need to obtain additional financing to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive pre-clinical and clinical testing and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure, and extensive compliance-reporting capabilities.

There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s technology will be obtained, that any products developed will obtain necessary government regulatory approval, or that any approved products will be commercially viable. The Company operates in an environment of rapid change in technology and substantial competition from pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its qualified employees, consultants and contractors to be successful with its objectives.

Liquidity and Capital Resources- Since its inception, the Company has incurred operating losses and has consistently used cash in operations. The Company has not recognized any revenue to date, devoting its efforts and capital resources to research and development of its product candidates. The Company’s activities have been primarily funded by the sale of shares of preferred stock and common stock (see Note 8). The Company manages its capital resources to ensure the Company will continue as a going concern while maximizing the return to stockholders through the optimization of the debt and equity balances.

The Company’s cash and cash equivalents as of June 30, 2019 and December 31, 2018 were $202.1 million and $63.0 million respectively. In March 2019, the Company raised an aggregate of $49.8 million of net proceeds from its Series B convertible preferred stock financing. In June 2019, the Company completed its IPO whereby the Company sold an aggregate of 7,353,000 shares of its common stock for aggregate net proceeds of approximately $113.2 million. Based on the Company’s cash and cash equivalents balance as of June 30, 2019, which include the net proceeds of the Series B convertible preferred stock financing and the proceeds from the IPO, the Company estimates that its cash and cash equivalents balance will be sufficient to enable it to fund its operating expenses and capital expenditure req