NextCure Inc
For the period ended Dec 31, 2024. Filed Mar 6, 2025.
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FY2024 · Filed Mar 6, 2025
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Item 8. Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of NextCure, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of NextCure, Inc. (the Company) as of December 31, 2024 and 2023, the related statements of operations and comprehensive loss, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Clinical Trial Prepaid and Accrued Expenses
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| Description of the Matter | As disclosed in Note 2 to the financial statements, the Company expenses research and development costs as incurred, which include costs relating to contracts with clinical research organizations under clinical site agreements. The Company estimates the prepaid and accrued expenses based on the services received and efforts expended in relation to amounts invoiced by and paid to clinical research organizations at the balance sheet date. The Company’s clinical trial prepaid expenses of $1.4 million at December 31, 2024 are included in prepaid expenses and other current assets on the balance sheet, the Company’s clinical trial accrued expenses at December 31, 2024 of $0.4 million are included in accrued liabilities and other liabilities on the balance sheet, and the Company’s related 2024 clinical trial expenses are included in research and development expenses of $41.5 million on the statement of operations and comprehensive loss for the year ended December 31, 2024. |
| Auditing the Company’s clinical trial prepaid and accrued expenses involved subjective auditor judgment due to the estimation required by management in determining the progress to completion of services that have been performed by the clinical research organizations and the associated costs that will be invoiced by the clinical research organizations subsequent to the date that the financial statements are issued. | |
| How We Addressed the Matter in Our Audit | To test the clinical trial prepaid and accrued expenses, our audit procedures included, among others, reviewing agreements with clinical research organizations to corroborate key financial and contractual terms, and testing the accuracy and completeness of the underlying data used in the prepaid and accrued expense computations. We also evaluated management’s estimates of the progress of clinical trials by making direct inquiries of the Company’s operations personnel that oversee the clinical trials and obtaining information directly from a sample of clinical research organizations. To evaluate the completeness of the prepaid and accrued expenses, we also examined subsequent invoices from the clinical research organizations and cash disbursements to the clinical research organizations, to the extent such invoices were received, or payments were made prior to the date that the financial statements were issued. |
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/s/Ernst & Young LLP
We have served as the Company’s auditor since 2018.
Baltimore, Maryland
March 6, 2025
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