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Item 9A. Controls and Procedures

2021-03-15 compared with 2020-03-30 · 500 added, 1230 removed, 596 unchanged (74% of the section changed)

5 unchanged sentences

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on that evaluation of our disclosure controls and procedures as of December 31, 2019, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures as of such date are effective at the reasonable assurance level.

Management’s Annual Report on Internal Control over Financial Reporting

This Annual Report on Form 10-K does not include a report of management’s assessment regarding our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) or an attestation report of our independent registered accounting firm due to a transition period established by rules of the SEC for newly public companies.

Additionally, our independent registered accounting firm will not be required to opine on the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer an “emerging growth company” as defined in the JOBS Act.

Based on that evaluation of our disclosure controls and procedures as of December 31, 2020, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures as of such date were effective at the reasonable assurance level.

Management’s Report on Internal Controls over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting.

Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes policies and procedures that:

pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors;

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

We continue to review our internal control over financial reporting and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in “Internal Control — Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

Based on this assessment, our senior management has concluded that the internal control over financial reporting was effective as of December 31, 2020.

This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm due to a transition period established by rules of the SEC for “emerging growth companies”.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We continuously seek to improve the efficiency and effectiveness of our internal controls.

This results in refinements to processes throughout our company.

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the year ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

During the year ended December 31, 2020, we have not experienced any material impact in our internal controls over financial reporting despite our employees working remotely due to the COVID-19 pandemic.

We are continually monitoring and assessing the COVID-19 pandemic to determine any potential impacts on our internal controls over financial reporting including changes to their design and operating effectiveness.

Other Information.

On February 26, 2020, the Compensation Committee of our Board of Directors approved annual bonus awards to our employees, including our named executive officers for their performance during the fiscal year ended December 31, 2019.

The annual bonus awards were paid in cash.

The bonuses awarded to our named executive officers are set forth as follows:

Named Executive Officer

Nonequity incentive plan compensation

Giuseppe Ciaramella, Ph.D.

Terry-Ann Burrell

Directors, Executive Officers and Corporate Governance.

Executive officers and directors

Our executive officers and directors, and their ages and positions as of December 31, 2019, are as set forth below:

Executive Officers

Chief Executive Officer, Director

Giuseppe Ciaramella, Ph.D.

President and Chief Scientific Officer

Terry-Ann Burrell

Chief Financial Officer and Treasurer

Non-Employee Directors

Kristina Burow

Graham Cooper

Mark Fishman, M.D.

Carole Ho, M.D.

Stephen Knight, M.D.

Robert Nelsen

Executive officers

John Evans has served as our Chief Executive Officer since January 2020, and previously served as our President and Chief Executive Officer since 2017.

Evans has significant experience as a company builder, dealmaker, and drug developer in the biotechnology industry.

Evans has also served as a Venture Partner with ARCH Venture Partners since 2017 and as a Director of Verve Therapeutics since August 2018.

Evans was previously an early employee and member of the leadership team at Agios Pharmaceuticals, from September 2009 until April 2017, most recently serving as Senior Vice President for Corporate Development and Portfolio Leadership.

At Agios, Mr.

Evans served as IDH Portfolio Executive, providing strategic and operational leadership for a portfolio of first-in-class IDH inhibitors including IDHIFA and TIBSOVO.

He helped initiate and lead Agios’ landmark alliance with Celgene, resulting in over $600 million of funding and investments across multiple research collaborations in cancer metabolism.

At Agios, Mr.

Evans led a team of eight employees.

He also co-led Agio’s expansion into rare genetic diseases.

Prior to joining Agios, Mr.

Evans worked at Infinity Pharmaceuticals, McKinsey & Company’s pharmaceuticals practice and MedImmune.

Evans holds an MBA in Healthcare Management from Wharton, a M.S.

in Biotechnology from the University of Pennsylvania, and a B.A.

in English with distinction from Yale University.

We believe that Mr.

Evans is qualified to serve on our Board of Directors based on his extensive experience in the pharmaceutical industry and his expansive knowledge of our company based on his role as Chief Executive Officer.

Giuseppe Ciaramella, Ph.D ., has served as our Chief Scientific Officer since February 2018 and as our President and Chief Scientific Officer since January 2020.

Ciaramella has 25 years of drug discovery experience across different therapeutic modalities, from small molecule, to biologics, to advanced medicinal products, such as mRNA.

Prior to joining Beam, Dr.

Ciaramella was the Chief Scientific Officer of the Infectious Diseases division of Moderna Therapeutics from 2014 until February 2018, where he was instrumental in generating some of the first LNP-encapsulated, mRNA vaccines to be dosed in humans, several of which are progressing through clinical studies.

From 2011 until 2014, Dr.

Ciaramella served as Executive Director at Astrazeneca, where he led their small molecule antiviral strategy.

Between 2010 and 2011 he served as Vice President and Head of Collaborative Research at Boehringer Ingelheim, where he had responsibility for external research.

Prior to Boehringer Ingelheim, he spent 14 years at Pfizer in the U.K.

where he held several leadership positions, including head of Biotherapeutics, head of Antivirals and head of the Hit Discovery Group.

Ciaramella is a member of the Infectious Diseases Society of America and of the American Society of Gene Therapy.

Ciaramella holds a Ph.D.

in Biochemistry from University College London.

Terry-Ann Burrell has served as our Chief Financial Officer since August 2019 and as our Chief Financial Officer and Treasurer since September 2019.

From May 2008 to August 2019, Ms.

Burrell worked at J.P.

Morgan Securities LLC, where she most recently served as Managing Director.

Burrell was responsible for deal execution across both mergers and acquisitions and capital markets.

In her role, she advised biotechnology and pharmaceutical companies on strategic considerations, including mergers and acquisitions, initial public and secondary offerings and valuation analysis.

Burrell holds a bachelor’s degree from Harvard College and an MBA from New York University’s Leonard N.

Stern School of Business.

Non-employee directors

Kristina Burow has served on our Board of Directors since June 2017.

Burow is a Managing Director with ARCH Venture Partners.

Burow is focused on the creation and development of biotechnology, pharmaceutical and biotechnology companies.

Since joining ARCH in 2002, Ms.

Burow has played a significant role in the creation and development of a number of companies.

Burow is also a Director of Gossamer Bio, Scholar Rock, Unity Biotechnology, and Vir Biotechnology, and on the boards of a

number of private companies.

Burow served on the board of Receptos, Inc.

from 2010 to 2015 and of Sienna Biopharmaceuticals, Inc.

from 2015 to 2019 .

She previously was a co-founder and Director of Receptos , Inc.

Burow has participated in a number of other ARCH portfolio companies including Siluria Technologies, Kythera Biopharmaceuticals, Ikaria and was a co-founder and board member of Sapphire Energy.

Prior to joining ARCH Ms.

Burow was an Associate with the Novartis BioVenture Fund in San Diego.

Burow holds an M.B.A.

from the University of Chicago, an M.A.

in Chemistry from Columbia University and a B.S.

in Chemistry from the University of California, Berkeley.

We believe Ms.

Burow’s investment and leadership experience makes her qualified to serve on our Board of Directors.

Graham Cooper has served as a member of our Board of Directors since October 2019.

From March 2018 until April 2019, Mr.

Cooper served as the Chief Operating Officer and Chief Financial Officer of Assembly Biosciences, Inc.

Cooper previously served as the Chief Financial Officer of Receptos, Inc., from February 2013 until its acquisition by Celgene in August 2015 and Chief Financial Officer of Geron Corporation from January 2012 to December 2012.

From May 2006 until March 2011, Mr.

Cooper served as Chief Financial Officer of Orexigen Therapeutics, Inc.

Prior to that, Mr.

Cooper held roles of increasing responsibility at Deutsche Bank Securities, an investment bank, from August 1997 to February 2006, including Director, Health Care Investment Banking.

He began his career as an accountant at Deloitte & Touche and was previously a C.P.A.

Cooper currently serves on the board of directors of Unity Biotechnology, Inc., a public biotechnology company, Kezar Life Sciences, a public biotechnology company, and Applied Molecular Therapeutics, Inc., a private biotechnology company.

Cooper received a B.A.

in Economics from the University of California at Berkeley and an M.B.A.

from the Stanford Graduate School of Business.

We believe that Mr.

Cooper is qualified to serve on our board of directors due to his significant financial and accounting experience in the life sciences industry.

Fishman, M.D.

, has served on our Board of Directors since May 2018.

Fishman is a Professor in the Harvard Department of Stem Cell and Regenerative Biology and Chief of the Pathways Clinical Service at Massachusetts General Hospital.

In February 2019, he became a Co-Founding Partner of Aditum Bio Fund and Chairman of its Scientific and Medical Advisory Board.

From 2002 through 2016, Dr.

Fishman was the founding President of the Novartis Institutes for BioMedical Research (NIBR), a member of the Executive Committee of Novartis, AG, and served on the Board of Directors of Novartis International Pharmaceutical LTD and Chaired the Board of Directors of the Genomics Institute of the Novartis Research Foundation.

Prior to his time at NIBR, he was the Founding Director of the Cardiovascular Research Center and Chief of Cardiology at Massachusetts General Hospital.

Fishman also has served as the Chairman of the Board of privately held Semma Therapeutics since 2016.

He also serves as a consultant to and Scientific Advisory Board member of several other privately held biotechnology companies.

Fishman graduated from Yale College and Harvard Medical School and trained in medicine and cardiology at Massachusetts General Hospital.

We believe that Dr.

Fishman’s experience studying genetics and regenerative medicine makes him qualified to serve on our Board of Directors.

Carole Ho, M.D.

has served on our Board of Directors since November 2018.

Ho has served as the Chief Medical Officer and Head of Development of Denali Therapeutics since June 2015.

Prior to joining Denali, Dr.

Ho held various roles of increasing responsibility between at Genentech between 2007 and 2015 most recently as Vice President, Non-Oncology Early Clinical Development.

From November 2006 to October 2007, Dr.

Ho served as Associate Medical Director at Johnson & Johnson.

From June 2002 to November 2006, she was an instructor in the Department of Neurology and Neurological Sciences at Stanford University.

Ho received her M.D.

from Cornell University and her B.S.

in Biochemical Sciences from Harvard College.

We believe that Dr.

Ho’s experience studying neurology and her experience in senior leadership at a public company makes her qualified to serve on our Board of Directors.

Stephen Knight, M.D.

has served on our Board of Directors since June 2017.

Knight joined F-Prime Capital, where he serves as President and Managing Partner, in 2003.

He has worked in the pharmaceutical and biotechnology industries for over 25 years and invests broadly across healthcare.

Steve serves on the Board of Directors of Iora Health, and Pulmocide.

Steve previously served on the boards of several private and public health care companies including Semma Therapeutics, Innovent Biologics, Blueprint Medicines, Denali Therapeutics, FoldRx Pharmaceuticals, Ironwood Pharmaceuticals, NextWave Pharmaceuticals, Proteostasis Therapeutics, and Respivert, Ltd.

Prior to joining F-Prime Capital, Steve held various senior management roles in private and public biotechnology and consulting companies.

He was also a researcher at AT&T Bell Laboratories, the National Institutes of Health, and Yale University.

He holds an M.D.

from the Yale University School of Medicine, an M.B.A.

from the Yale School of Organization and Management, and received a B.S.

in biology from Columbia University, where he graduated summa cum laude and Phi Beta Kappa.

We believe that Dr.

Knight’s experience in the medical industry makes him qualified to serve on our Board of Directors.

Robert Nelsen has served as a member of our board of directors since June 2017.

Nelsen co-founded ARCH Venture Partners in 1986 and currently serves as a Managing Director.

Nelsen currently serves on boards of directors of Denali Therapeutics, Inc., Karuna Therapeutics, Inc., Vir Biotechnology, Unity Biotechnology, Inc.

and on the boards of a number of private companies.

Nelsen served on the boards of Agios Pharmaceuticals Inc.

from 2007 to 2017, Syros Pharmaceuticals, Inc.

from 2012 to 2018, Sage Therapeutics, Inc.

from 2013 to 2016, Juno Therapeutics, Inc.

from 2013 to 2018, when it was acquired by Celgene Corporation, Bellerophon Therapeutics, Inc.

from 2014 to 2015, Sienna Biopharmaceuticals, Inc.

from 2015 to 2018 and Gossamer Bio, Inc.

from 2017 to 2018, prior to its initial public offering.

He previously served as a Trustee of the Fred Hutchinson Cancer Research Institute, the Institute for Systems Biology, and was a director of the National Venture Capital Association.

Nelsen holds an M.B.A.

the University of Chicago and a B.S.

from the University of Puget Sound with majors in Economics and Biology.

We believe that Mr.

Nelsen’s venture capital experience in the biotechnology industry makes him qualified to serve on our Board of Directors.

Family relationships

There are no family relationships among any of our directors and executive officers.

Audit committee

The audit committee’s responsibilities include:

appointing, approving the compensation of, and evaluating the qualifications, performance and independence of our independent registered public accounting firm;

overseeing the work of our independent registered public accounting firm, including through the receipt and consideration of reports from such firm, and pre-approving all audit and permitted non-audit services to be performed by our independent registered public accounting firm;

reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements and related disclosures, including earnings releases;

reviewing and discussing with management and our independent registered public accounting firm any material issues regarding accounting principles and financial statement presentations;

coordinating our board of directors’ oversight of our internal control over financial reporting, disclosure controls and procedures, code of business conduct and ethics, procedures for complaints and legal and regulatory matters;

discussing our risk management policies with management;

establishing policies regarding hiring employees from our independent registered public accounting firm and procedures for the receipt and retention of accounting related complaints and concerns;

meeting independently with our independent registered public accounting firm and management;

reviewing and approving any related person transactions;

overseeing our guidelines and policies governing risk assessment and risk management;

overseeing the integrity of our information technology systems, process and data;

preparing the audit committee report required by SEC rules;

reviewing and assessing, at least annually, the adequacy of the audit committee’s charter;

performing, at least annually, an evaluation of the performance of the audit committee.

All audit services and all non-audit services, other than de minimis non-audit services, to be provided to us by our independent registered public accounting firm must be approved in advance by our audit committee.

The members of our audit committee are Graham Cooper, Kristina Burow and Mark Fishman.

Cooper chairs the audit committee.

Our board of directors has determined that each member of the audit committee, other than Ms.

Burow, satisfies the independence standards of the applicable rules of the Nasdaq Stock Market applicable to audit committee members.

Our board of directors has determined that each member of our audit committee has sufficient knowledge in financial and auditing matters to serve on the audit committee.

Our board of directors has also determined that Mr.

Cooper is an “audit committee financial expert,” as defined under Item 407 of Regulation S-K.

We expect to satisfy the member independence requirements for the audit committee prior to the end of the transition period provided under current Nasdaq Listing Rules and SEC rules and regulations for newly public companies.

The audit committee charter, which has been adopted by our board of directors, is available on our website.

Compensation committee

Our compensation committee’s responsibilities include:

assisting our board of directors in developing and reviewing potential candidates for executive positions;

reviewing our overall compensation strategy, including base salary, incentive compensation and equity-based grants;

reviewing and approving corporate goals and objectives relevant to compensation of our chief executive officer and our other executive officers;

recommending to our board of directors the compensation of our chief executive officer and other executive officers;

reviewing and making recommendations to the board of directors with respect to director compensation;

overseeing and administering our cash and equity incentive plans;

reviewing, considering and selecting, to the extent determined to be advisable, a peer group of appropriate companies for purposing of benchmarking and analysis of compensation for our executive officers and directors;

reviewing and approving all employment contract and other compensation, severance and change-in- control arrangements for our executive officers;

recommending to our board of directors any stock ownership guidelines for our executive officers and non-employee directors;

retaining, appointing or obtaining advice of a compensation consultant, legal counsel or other advisor, and determining the compensation and independence of such consultant or advisor;

preparing, if required, the compensation committee report on executive compensation for inclusion in our annual proxy statement in accordance with the proxy rules;

monitoring our compliance with the requirements of Sarbanes-Oxley relating to loans to directors and officers;

overseeing our compliance with applicable SEC rules regarding shareholder approval of certain executive compensation matters;

reviewing the risks associated with our compensation policies and practices;

reviewing and assessing, at least annually, the adequacy of the compensation committee’s charter;

performing, on an annual basis, an evaluation of the performance of the compensation committee.

The members of our compensation committee are Kristina Burow, Stephen Knight and Carole Ho.

Burow chairs the compensation committee.

Our board of directors has determined that each member of the compensation committee satisfies the independence standards of the applicable rules of the Nasdaq Stock Market applicable to compensation committee members.

Prior to establishing a compensation committee, our board of directors made decisions relating to the compensation of our executive officers.

The compensation committee may delegate any of the responsibilities of the full committee to subcommittees and may delegate such responsibilities of the full committee to executive officers of the Company and other persons as may be permitted by applicable laws, rules or regulations and in accordance with the listing standards set forth by Nasdaq.

The compensation committee charter, which has been adopted by our board of directors, is available on our website.

Nominating and governance committee

Our nominating and corporate governance committee’s responsibilities include:

identifying individuals qualified to become members of our board of directors consistent with criteria approved by the board and receiving nominations for such qualified individuals;

recommending to our board of directors the persons to be nominated for election as directors and to each committee of the board;

establishing a policy under which our shareholders may recommend a candidate to the nominating and corporate governance committee for consideration for nomination as a director;

reviewing and recommending committee slates on an annual basis;

recommending to our board of directors qualified candidates to fill vacancies on our board of directors;

developing and recommending to our board of directors a set of corporate governance principals applicable to us and reviewing the principles on at least an annual basis;

reviewing and making recommendations to our board with respect to our board leadership structure and board committee structure;

reviewing, in concert with our board of directors, our policies with respect to significant issues of corporate public responsibility;

making recommendations to our board of directors’ processes for annual evaluations of the performance of our board of directors, our chief executive officer and committees of our board of directors;

overseeing the process for annual evaluations of our board of directors, chief executive officer and committees of our board of directors and certifying that performance of our chief executive officer and other members of executive management is being properly evaluated;

considering and reporting to our board of directors any questions of possible conflicts of interest of members of our board of directors;

providing new director orientation and continuing education for existing directors on a periodic basis;

overseeing the maintenance and presentation to our board of directors of management’s plans for succession to senior management positions in the Company;

reviewing and assessing, at least annually, the adequacy of the nominating and corporate governance committee’s charter;

performing, on an annual basis, an evaluation of the performance of the nominating and corporate governance committee.

The members of our nominating and corporate governance committee are Mark Fishman, Carole Ho and Stephen Knight.

Fishman chairs the nominating and corporate governance committee.

Our board of directors has determined that each member of the nominating and corporate governance committee satisfies the independence standards of the applicable rules of the Nasdaq Stock Market.

The nominating and governance committee charter, which has been adopted by our board of directors, is available on our website.

Our board of directors may establish other committees from time to time.

Code of business conduct and ethics

We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, which became effective upon the effectiveness of our registration statement on February 5, 2020.

A current copy of the code is available on the investor section of our website.

In addition, we posted on our website all disclosures that are required by law or Nasdaq Stock Market rules concerning any amendments to, or waivers from, any provision of the code.

Executi ve Compensation.

The following discussion and analysis of compensation arrangements should be read with the compensation tables and related disclosures set forth below.

This section provides an overview of the compensation awarded to, earned by, or paid to our principal executive officer and our next two most highly compensated executive officers in respect of their service to us for the fiscal year ended December 31, 2019.

We refer to these individuals as our named executive officers.

Our named executive officers are:

John Evans, our Chief Executive Officer;

Giuseppe Ciaramella, Ph.D., our President and Chief Scientific Officer;

Terry-Ann Burrell, our Chief Financial Officer and Treasurer.

Our board of directors was responsible for determining the compensation of our executive officers prior to the establishment of the compensation committee of our board of directors in February 2019.

Following its establishment, our compensation committee is generally responsible for determining the compensation of our executive officers.

Our Chief Executive Officer made recommendations to our compensation committee about the compensation of his direct reports in respect of fiscal year 2019.

Summary compensation table

The following table sets forth the compensation awarded to, earned by, or paid to our named executive officers in respect of their service to us for the fiscal years ended December 31, 2019 and December 31, 2018 (as applicable):

Name and principal position

Chief Executive Officer

Giuseppe Ciaramella, Ph.D.

President and Chief Scientific Officer

Terry-Ann Burrell (7)

Chief Financial Officer and Treasurer

Amounts shown for Mr.

Evans and Dr.

Ciaramella for the respective year include contributions made to our 401(k) plan.

The amount shown for Dr.

Ciaramella for fiscal year 2018 reflects a sign-on bonus.

The amount reported in this column represents the aggregate grant date fair value of restricted shares of our common stock granted to Mr.

Evans in fiscal year 2018 computed in accordance with FASB ASC 718, excluding the effect of estimated forfeitures.

The assumptions used to value the restricted stock for this purpose are set forth in Note 13, Stock option and grant plan , to our consolidated financial statements included in this Annual Report on Form 10-K.

The amounts reported in this column represent the aggregate grant date fair value of options to purchase our common stock granted to each of our named executive officers in fiscal year 2019 and to Mr.

Evans and Dr.

Ciaramella in fiscal year 2018 computed in accordance with FASB ASC 718, excluding the effect of estimated forfeitures.

The assumptions used to value the options for this purpose are set forth in Note 13, Stock option and grant plan , to our consolidated financial statements included in this Annual Report on Form 10-K.

With respect to performance-based stock options granted to Mr.

Evans and Dr.

Ciaramella in fiscal year 2019, the grant date fair value of such options based on the probable outcome of the performance conditions associated with the options on the grant date is $0.

If all applicable performance milestones associated with such options were achieved at maximum levels, the grant date fair value of the 2019 performance-based stock options would be $552,901 for Mr.

Evans and $132,976 for Dr.

Amounts shown represent the annual bonus earned by each of our named executive officers for 2019 and by Mr.

Evans and Dr.

Ciaramella for 2018, in each case based on the attainment of both corporate and individual performance goals.

The amount reported for Mr.

Evans for fiscal year 2019 includes commuting benefits ($720) and a tax-gross up associated with his commuting benefits ($314) and for 2018 reflects company-paid group term life insurance premiums ($144).

The amount reported for Dr.

Ciaramella for fiscal 2019 reflects reimbursement of his COBRA continuation coverage through August 31, 2019 ($17,914), commuting benefits ($720) and a tax gross-up associated with his commuting benefits ($314) and for fiscal year 2018 reflects reimbursement of his COBRA continuation coverage ($18,319) and company-paid group term life insurance premiums ($132).

The amount reported for Ms.

Burrell for fiscal year 2019 reflects commuting and temporary housing benefits ($38,328) and a tax gross-up associated with her commuting and temporary housing benefits ($15,730).

Burrell commenced employment with us as our Chief Financial Officer on August 20, 2019.

Narrative disclosure to summary compensation table

During fiscal year 2019, the base salary for each of Mr.

Ciaramella and Ms.

Burrell was $472,500, $413,502 and $400,000, respectively.

Burrell’s base salary was established at the time she commenced employment with us.

The amended and restated employment agreement or letter agreement with each named executive officer, described below, establishes a base salary, which took effect in connection with our IPO and is subject to periodic review.

Upon our IPO, Mr.

Evans’s base salary was increased to $535,000, and Dr.

Ciaramella’s base salary was increased to $475,000.

Burrell’s base salary was increased to $420,000, effective January 1, 2020.

Annual bonuses

With respect to fiscal year 2019, each of Mr.

Ciaramella and Ms.

Burrell was eligible to receive an annual bonus, with the target amount of such bonus for each named executive officer set forth in his or her employment or letter agreement with us.

For fiscal year 2019, the target bonus amounts, expressed as a percentage of base salary, for each of Mr.

Ciaramella and Ms.

Burrell were as follows:

50%, 40% and 40%, respectively.

Annual bonuses for fiscal year 2019 for our named executive officers are based on the attainment of both corporate and individual performance goals as recommended by our compensation committee and determined by our board of directors.

The corporate performance goals for 2019 related to building the company and advancing our R&D pipeline, and the compensation committee of the board of directors determined that such goals were achieved collectively at 125% of target.

With respect to fiscal year 2019, each named executive officer earned an annual bonus as follows:

Evans, $367,813;

Ciaramella $267,188;

Burrell $200,000.

In connection with our IPO, the target bonus amount for Mr.

Evans was increased to 55% of his base salary and for Dr.

Ciaramella was increased to 45% of his base salary.

Equity compensation

Ciaramella and Ms.

Burrell each received incentive equity grants in fiscal year 2019 under the Beam Therapeutics Inc.

2017 Stock Option and Grant Plan, or the 2017 Plan.

On February 13, 2019, Mr.

Evans was granted an option to purchase 107,929 shares of our common stock, which vests as to 50% of the underlying shares upon the achievement of certain development milestones related to editing applications and as to 50% upon the achievement of a closing price hurdle following our IPO, in each case, generally subject to Mr.

Evans’s continued employment with us through December 31, 2022.

On May 17, 2019, Mr.

Evans was granted an option to purchase 223,000 shares of our common stock, which vests as to 25% of the underlying shares on October 1, 2020 and in 36 equal monthly installments thereafter, generally subject to Mr.

Evans’s continued employment with us through the applicable vesting date.

On February 13, 2019, Dr.

Ciaramella was granted an option to purchase 25,957 shares of our common stock, which vests as to 50% of the underlying shares upon the achievement of certain development milestones related to editing applications and as to 50% upon the achievement of a closing price hurdle following our IPO, in each case, generally subject to Dr.

Ciaramella’s continued employment with us through December 31, 2022.

On each of May 17, 2019 and May 31, 2019, Dr.

Ciaramella was granted an option to purchase 121,646 shares of our common stock and an option to purchase 23,303 shares of our common stock, respectively, each of which vests as to 25% of the underlying shares on October 1, 2020 and in 36 equal monthly installments thereafter, generally subject to Dr.

Ciaramella’s continued employment with us through the applicable vesting date.

On August 31, 2019, Ms.

Burrell was granted an option to purchase 390,250 shares of our common stock, which vests as to 25% of the underlying shares on August 20, 2020 and in 36 equal monthly installments thereafter, generally subject to Ms.

Burrell’s continued employment with us through the applicable vesting date.

In connection with our IPO and his promotion to the role of President, Dr.

Ciaramella was granted an option to purchase 510,893 shares of our common stock under the Beam Therapeutics Inc.

2019 Equity Incentive Plan, or the 2019 Plan, which will vest as to 25% of the underlying shares on the first anniversary of the grant date and in 36 equal monthly installments thereafter, generally subject to Dr.

Ciaramella’s continued employment with us through the applicable vesting date.

Agreements with our named executive officers

Ciaramella and Ms.

Burrell are each party to an employment or letter agreement with us that sets forth the terms and conditions of his or her employment.

In connection with our IPO, these agreements were amended and restated.

The material terms of the agreements, as amended and restated, are described below.

The terms “cause,” “good reason” and “change in control” referred to below are defined in the respective named executive officer’s agreement.

We entered into an amended and restated letter agreement with Mr.

Evans, which became effective upon our IPO, that provides for a base salary of $535,000 per year, subject to annual review by our compensation committee, and a target annual bonus equal to 55% of his annual base salary, with the actual amount of the bonus earned based on the terms of the applicable bonus plan developed by our board of directors or our compensation committee.

The letter agreement also provides that, for so long as Mr.

Evans serves as our Chief Executive Officer, at each annual meeting of our stockholders we will nominate him to serve as a member of our board of directors, and, if so elected at such meeting, he will continue to serve as a member of our board of directors.

Evans’s amended and restated letter agreement contains a perpetual confidentiality covenant and an assignment of intellectual property covenant.

Evans is also party to an Employee Non-Competition, Non-Solicitation, Confidentiality and Assignment Agreement under which he has agreed not to compete with us or solicit our employees, consultants, customers or suppliers during his employment and for one year following his termination and has agreed to a perpetual confidentiality covenant and an assignment of intellectual property covenant.

We entered into an amended and restated employment agreement with Dr.

Ciaramella, which became effective upon our IPO, that provides for a base salary of $475,000 per year, subject to adjustment by our board of directors (or a committee thereof), and a target annual bonus equal to 45% of his annual base salary, with the actual amount of the bonus earned determined by our board of directors, in its discretion, based on Dr.

Ciaramella’s performance and corporate performance compared to goals established by our compensation committee.

Ciaramella’s amended and restated employment agreement contains a perpetual confidentiality covenant and an assignment of intellectual property covenant.

Ciaramella is also party to an Employee Non-Competition, Non-Solicitation, Confidentiality and Assignment Agreement under which he has agreed not to compete with us or solicit our employees, consultants, customers or suppliers during his employment and for one year following his termination and has agreed to a perpetual confidentiality covenant and an assignment of intellectual property covenant.

We entered into an amended and restated letter agreement with Ms.

Burrell, which became effective upon our IPO, that provides for a base salary of $400,000 per year, subject to periodic review and adjustment by our compensation committee, and a target annual bonus equal to 40% of her annual base salary, with the actual amount of the bonus earned based on our compensation committee’s assessment of individual and corporate performance.

Burrell is also party to an Employee Non-Solicitation, Confidentiality and Assignment Agreement under which she has agreed not to solicit our employees, independent contractors, customers, vendors or suppliers during her employment and for one year following her termination and has agreed to a perpetual confidentiality covenant and an assignment of intellectual property covenant.

Severance upon termination of employment;

change in control.

Under his amended and restated letter agreement, if Mr.

Evans’s employment is terminated by us without cause or by him for good reason, he will be entitled to receive (i) continued payment of his base salary for a period of 12 months, (ii) an amount equal to his target annual bonus for the year of termination, pro-rated to reflect the portion of the calendar year during which he was employed, (iii) continued vesting for 12 months of any unvested equity awards, (iv) extended exercisability of the options granted to him on March 8, 2018 and July 13, 2018 until the earlier of the expiration of the original term and the date that is 24 months following his termination, and (v) payment of his full COBRA premiums for 12 months following his termination (or, if earlier, until the date on which Mr.

Evans becomes eligible for coverage under a subsequent employer’s medical plan), subject to his eligibility for, and timely election of, COBRA coverage.

In the event of a change in control, any unvested equity awards held by Mr.

Evans, other than the portion of such equity awards that would otherwise have vested during the six-month period following such change in control (referred to as the “carved-out equity”), will become fully vested and exercisable.

The carved-out equity will remain outstanding and eligible to vest in accordance with its terms.

Under his amended and restated letter agreement, if Mr.

Evans’s employment is terminated by us without cause or by him for good reason within 12 months following or within 30 days immediately prior to the change in control, he will be entitled to receive (i) continued payment of his base salary for a period of 18 months following termination, (ii) an amount equal to 1.5 multiplied by his target annual bonus for the year of termination, (iii) immediate vesting of any unvested equity awards, (iv) extended exercisability of the options granted to him on March 8, 2018 and July 13, 2018 until the earlier of the expiration of the original term and the date that is 24 months following his termination, and (v) payment of his full COBRA premiums for 18 months following his termination (or, if earlier, until the date on which Mr.

Evans becomes eligible for coverage under a subsequent employer’s medical plan), subject to his eligibility for, and timely election of, COBRA coverage.

Under his amended and restated employment agreement, if Dr.

Ciaramella’s employment is terminated by us without cause or by him for good reason, he will be entitled to receive (i) continued payment of his base salary for a period of 12 months, (ii) an amount equal to his target annual bonus for the year of termination, pro-rated to reflect the portion of the calendar year during which he was employed, (iii) continued vesting for 12 months of any unvested equity awards, and (iv) payment of his full COBRA premiums for 12 months following his termination (or, if earlier, until the date on which Dr.

Ciaramella becomes eligible for coverage under a subsequent employer’s medical plan), subject to his eligibility for, and timely election of, COBRA coverage.

In the event of a change in control, 50% of the unvested equity awards held by Dr.

Ciaramella, other than the portion of such equity awards that would otherwise have vested during the six-month period following such change in control (referred to as the “carved-out equity”), will become fully vested and exercisable.

The carved-out equity will remain outstanding and eligible to vest in accordance with its terms.

Under his amended and restated employment agreement, if Dr.

Ciaramella’s employment is terminated by us without cause or by him for good reason within 12 months following or within 30 days immediately prior to the change in control, he will be entitled to receive (i) continued payment of his base salary for a period of 12 months, (ii) an amount equal to his target annual bonus for the year of termination, (iii) immediate vesting of any unvested equity awards, and (iv) payment of his full COBRA premiums for 12 months following his termination (or, if earlier, until the date on which Dr.

Ciaramella becomes eligible for coverage under a subsequent employer’s medical plan), subject to his eligibility for, and timely election of, COBRA coverage.

Under her amended and restated letter agreement, if Ms.

Burrell’s employment is terminated by us without cause or by her for good reason, she will be entitled to receive (i) continued payment of her base salary for a period of 12 months and (ii) payment of a portion of her COBRA premiums for 12 months following her termination (or, if earlier, until the date on which Ms.

Burrell becomes eligible for coverage under a subsequent employer’s medical plan) in an amount equal to the employer portion of such premiums for active employees, subject to her eligibility for, and timely election of, COBRA coverage.

Under her amended and restated letter agreement, if Ms.

Burrell’s employment is terminated by us without cause or by her for good reason within 12 months following or within 30 days immediately prior to a change in control, she will be entitled to receive (i) continued payment of her base salary for a period of 12 months following termination, (ii) an amount equal to her target annual bonus for the year of termination, (iii) immediate vesting of any unvested equity awards, and (iv) payment of a portion of her COBRA premiums for 12 months (or, if earlier, until the date on which Ms.

Severance Subject to Release of Claims.

Our obligation to provide an executive with severance payments and other benefits under the executive’s amended and restated employment or letter agreement is conditioned on the executive signing a release of claims in favor of us.

In addition, our obligation to provide Mr.

Evans with severance payments and other benefits under his letter agreement is conditioned on his remaining available to provide consulting services to us as reasonably requested by our board of directors.

Employee and retirement benefits

We currently provide broad-based health and welfare benefits that are available to all of our employees, including our named executive officers, including health, life, disability, vision, and dental insurance.

In addition, we maintain a 401(k) retirement plan for our full-time employees.

The 401(k) plan also permits us to make discretionary employer contributions.

We did not make any employer contributions to the 401(k) plan in 2019.

Other than the 401(k) plan, we do not provide any qualified or non-qualified retirement or deferred compensation benefits to our employees, including our named executive officers.

Outstanding awards at fiscal year-end table

The following table sets forth information concerning outstanding equity awards held by each of our named executive officers as of December 31, 2019:

Option awards

unexercisable

Giuseppe Ciaramella, Ph.D.

7/13/2028(10)

2/13/2029(11)

5/17/2029(12)

5/31/2029(13)

Terry-Ann Burrell

8/31/2029(14)

Based on the most recent estimated fair market value of a share of our common stock ($13.68), as determined by our board of directors on August 31, 2019.

Represents 228,068 restricted shares of our common stock granted on August 17, 2017, of which 85,594 restricted shares vested in equal monthly installments through January 3, 2018, and, after giving effect to an amendment to the grant, the remaining 142,474 restricted shares vest in 48 equal monthly installments following January 8, 2018, generally subject to Mr.

Evans’s continued employment with us through the applicable vesting date.

Represents 850,889 restricted shares of our common stock granted on January 8, 2018, which, after giving effect to an amendment to the grant, vest in 48 equal monthly installments following the grant date, generally subject to Mr.

Evans’s continued employment with us through the applicable vesting date.

Represents an option to purchase 198,672 shares of our common stock granted on May 8, 2018, which vests as to 50% of the underlying shares upon the achievement of certain development milestones related to editing applications and as to 50% of the underlying shares upon the achievement of a closing price hurdle following our IPO, in each case, generally subject to Mr.

Evans’s continued employment with us through December 31, 2022.

Represents an option to purchase 539,645 shares of our common stock granted on July 13, 2018, which vested as to 25% of the underlying shares on January 8, 2019 and vests in 36 equal monthly installments thereafter, generally subject to Mr.

Evans’s continued employment with us through the applicable vesting date.

Represents an option to purchase 107,929 shares of our common stock granted on February 13, 2019, which vests as to 50% of the underlying shares upon the achievement of certain development milestones related to editing applications and as to 50% of the underlying shares upon the achievement of a closing price hurdle following our IPO, in each case generally subject to Mr.

Evans’s continued employment with us through December 31, 2022.

Represents an option to purchase 223,000 shares of our common stock granted on May 17, 2019, which vests as to 25% of the underlying shares on October 1, 2020 and vests in 36 equal monthly installments thereafter, generally subject to Mr.

Evans’s continued employment with us through the applicable vesting date.

Represents an option to purchase 54,635 shares of our common stock granted on May 8, 2018, which vests as to 50% of the underlying shares upon the achievement of certain development milestones related to editing applications and as to 50% of the underlying shares upon the achievement of a closing price hurdle following our IPO, in each case, generally subject to Dr.

Ciaramella’s continued employment with us through December 31, 2022.

Represents an option to purchase 273,175 shares of our common stock granted on May 8, 2018, which vested as to 25% of the underlying shares on February 26, 2019 and vests in 36 equal monthly installments thereafter, generally subject to Dr.

Ciaramella’s continued employment with us through the applicable vesting date.

Represents an option to purchase 129,788 shares of our common stock granted on July 13, 2018, which vested as to 25% of the underlying shares on February 26, 2019 and vests in 36 equal monthly installments thereafter, generally subject to Dr.

Ciaramella’s continued employment with us through the applicable vesting date.

Represents an option to purchase 25,957 shares of our common stock granted on February 13, 2019, which vests as to 50% of the underlying shares upon the achievement of certain development milestones related to editing applications and as to 50% of the underlying shares upon the achievement of a closing price hurdle following our IPO, in each case generally subject to Dr.

Ciaramella’s continued employment with us through December 31, 2022.

Represents an option to purchase 121,646 shares of our common stock granted on May 17, 2019, which vests as to 25% of the underlying shares on October 1, 2020 and vests in 36 equal monthly installments thereafter, generally subject to Dr.

Ciaramella’s continued employment with us through the applicable vesting date.

Represents an option to purchase 23,303 shares of our common stock granted on May 31, 2019, which vests as to 25% of the underlying shares on October 1, 2020 and vests in 36 equal monthly installments thereafter, generally subject to Dr.

Ciaramella’s continued employment with us through the applicable vesting date.

Represents an option to purchase 390,250 shares of our common stock granted on August 31, 2019, which vests as to 25% of the underlying shares on August 20, 2020 and vests in 36 equal monthly installments thereafter, generally subject to Ms.

Burrell’s continued employment with us through the applicable vesting date.

Director compensation

The following table sets forth information concerning the compensation awarded to, earned by or paid to our non-employee directors during the fiscal year ended December 31, 2019.

Evans’s compensation for 2019 is included with that of our other named executive officers above.

Kristina Burow(3)

Mark Fishman, M.D.

Carole Ho, M.D.

Stephen Knight, M.D.(3)

Robert Nelsen(3)

Michael Yi(3)(4)

Feng Zhang, Ph.D.(5)

Graham Cooper(6)

Amount represents cash fees earned in fiscal year 2019, pro-rated for the director’s service during the year.

The amounts reported in this column represent the aggregate grant date fair value of options to purchase our common stock granted to Dr.

Ho in fiscal year 2019 computed in accordance with FASB ASC 718, excluding the effect of estimated forfeitures.

As of December 31, 2019, Dr.

Fishman held options to purchase 260,241 shares of our common stock and Dr.

Ho held options to purchase 64,670 shares of our common stock.

Directors who are affiliated with our investors do not receive compensation in respect of their service as members of our board of directors.

Yi resigned from our board of directors effective July 16, 2019.

Zhang resigned from our board of directors effective February 21, 2019.

Cooper joined our board of directors on October 8, 2019.

Director compensation

In respect of their service on our board of directors in fiscal year 2019, Dr.

Cooper were each entitled to receive a $50,000 cash retainer, pro-rated, as applicable, for the director’s service during the year, and stock option grants as determined by our board of directors.

On April 30, 2018, we entered into a consulting agreement with Dr.

Fishman pursuant to which he agreed to provide certain advisory services to our Chief Executive Officer and us in exchange for certain stock option grants, which were made in 2018.

Fishman agreed to terminate the consulting agreement effective September 23, 2019.

On February 13, 2019, Dr.

Ho received a grant of an option to purchase 64,670 shares of our common stock, which vested as to 25% of the underlying shares on October 19, 2019, with the remainder vesting in 36 equal monthly installments thereafter subject to her continued service with us through the applicable vesting date.

Director compensation policy

In connection with our IPO, our board of directors adopted a non-employee director compensation policy, which became effective upon the completion of our IPO.

Under the non-employee director compensation policy, our non-employee directors, other than our non-employee directors affiliated with ARCH Venture Partners or F Prime Capital, will be compensated as follows:

each non-employee director will receive an annual cash fee of $35,000 ($65,000 for the chairman of our board of directors);

each non-employee director who is a member of the audit committee will receive an additional annual cash fee of $7,500 ($15,000 for the audit committee chairman);

each non-employee director who is a member of our compensation committee will receive an additional annual cash fee of $5,000 ($10,000 for our compensation committee chairman);

each non-employee director who is a member of the nominating and corporate governance committee will receive an additional annual cash fee of $4,000 ($8,000 for the nominating and corporate governance committee chairman);

each non-employee director who is first elected or appointed to our board of directors after the completion of our IPO will be granted an option under the 2019 Plan to purchase shares of common stock having a grant date fair value, determined in accordance with FASB ASC 718, of approximately $375,000 upon his or her initial election to our board of directors;

each non-employee director who is not first elected or appointed to our board of directors in the calendar year in which an annual meeting occurs (or, for the avoidance of doubt, at the time of the annual meeting) will annually be granted an option under the 2019 Plan to purchase shares of common stock having a grant date fair value, determined in accordance with FASB ASC 718, of approximately $187,500 on the date of the first meeting of our board of directors held after such annual meeting of our stockholders;

in connection with our IPO, Mr.

Cooper was granted an option to purchase 31,220 shares of our common stock, with an exercise price equal to $17.00, our IPO price.

The stock options granted to our non-employee directors will have a per share exercise price equal to the fair market value of a share of our common stock on the date of grant and will expire not later than ten years after the date of grant.

The stock options granted to non-employee directors upon the non-employee director’s initial election to our board of directors will vest as to one-third of the underlying shares on the first anniversary of the date of grant and in equal monthly installments as to the remainder of the shares for two years thereafter, subject to such director’s continued service on our board of directors.

The annual stock options granted to our non-employee directors will vest in full on the first anniversary of the date of grant, subject to the director’s continued service on our board of directors.

All cash fees will be paid quarterly, in arrears, or upon the earlier resignation or removal of the non-employee director.

The amount of each payment will be prorated for any portion of a calendar quarter that a non-employee director is not serving on our board of directors, based on the number of calendar days served by such non-employee director.

Each non-employee director, including each director affiliated with ARCH Venture Partners or F-Prime Capital, is entitled to reimbursement for reasonable travel and other expenses incurred in connection with attending meetings of our board of directors and any committee on which he or she serves.

Security Ownership of Certain Beneficial Own ers and Management and Related Stockholder Matters .

The following table sets forth certain information with respect to the beneficial ownership of our common stock at March 13, 2020, as adjusted to reflect the sale of common stock offered by us in our IPO, for:

each person who we know beneficially owns more than 5% of our common stock;

each of our directors;

each of our named executive officers;

all of our directors and executive officers as a group.

The number of shares beneficially owned by each stockholder is determined under rules issued by the SEC.

Under these rules, a person is deemed to be a “beneficial” owner of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security.

Except as indicated in the footnotes below, we believe, based on the information furnished to us, that the individuals and entities named in the table below have sole voting and investment power with respect to all shares of common stock beneficially owned by them, subject to any applicable community property laws.

Percentage ownership of our common stock before this offering is based on 51,327,657 shares of our common stock outstanding as of March 13, 2020.

Outstanding common stock as of March 13, 2020 includes 2,310,400 shares of unvested restricted stock, which are not included as outstanding for accounting purposes and are not included as outstanding shares in our consolidated financial statements.

In computing the number of shares beneficially owned by an individual or entity and the percentage ownership of that person, shares of common stock subject to options, warrants or other rights held by such person that are currently exercisable or that will become exercisable within 60 days after March 13, 2020 are considered outstanding, although these shares are not considered outstanding for purposes of computing the percentage ownership of any other person.

Unless noted otherwise, the address of all listed stockholders is 26 Landsdowne Street, 2nd Floor, Cambridge, MA 02139.

Name of beneficial owner

5% or greater stockholders:

Funds affiliated with ARCH Venture Partners(1)

F-Prime Capital Partners Healthcare Fund V LP(2)

HH Beam Holdings LLC(3)

TLS Beta Pte.

Directors and Named Executive Officers:

John Evans(5)

Giuseppe Ciaramella(6)

Terry-Ann Burrell

Kristina Burow

Graham Cooper

Mark Fishman, M.D.(7)

Stephen Knight, M.D.

Carole Ho, M.D.(8)

Robert Nelsen

All executive officers and directors as a group (9 persons)(9)

* Less than 1%

Represents (a) 4,121,519 shares of common stock issuable upon exercise of convertible preferred stock held by ARCH Venture Fund IX Overage, L.P., or ARCH IX Overage, and (b) 4,121,520 shares of common stock issuable upon exercise of convertible preferred stock held by ARCH Venture Fund IX, L.P., or ARCH IX.

ARCH Venture Partners IX Overage, L.P., or the GPLP, as the sole general partner of ARCH IX Overage, has the power to vote and dispose of the shares held of record by ARCH IX Overage and may be deemed to beneficially own certain of the shares held of record by ARCH IX Overage.

ARCH Venture Partners IX, L.P., or AVP IX LP, has the power top vote and dispose of the shares held of record by ARCH IX and may be deemed to beneficially own certain of the shares held of record by ARCH IX.

GPLP and AVP IX LP disclaim beneficial ownership of all shares held of record by ARCH IX Overage and ARCH IX, respectively, in which the GPLP or AVP IX LP does not have an actual pecuniary interest.

ARCH Venture Partners IX, LLC, or the GPLLC, as the sole general partner of the

GPLP and AVP IX LP, has the power to vote and dispose of the shares held of record by ARCH IX Overage and ARCH IX and may be deemed to beneficially own certain of the shares held of record by ARCH IX Overage and ARCH IX.

The GPLLC disclaims beneficial ownership of all shares held of record by ARCH IX Overage and ARCH IX in which it does not have an actual pecuniary interest.

Keith Crandell, Clinton Bybee, and Robert Nelsen are the managing directors of the GPLLC, share the power to vote and dispose of the shares held of record by ARCH IX Overage and ARCH IX and may be deemed to beneficially own certain of the shares held of record by ARCH IX Overage and ARCH IX.

The managing directors disclaim beneficial ownership of all shares held of record by ARCH IX Overage and ARCH IX in which they do not have an actual pecuniary interest.

The address of all filing persons is 8755 W.

Higgins Road, Suite 1025, Chicago, IL 60631.

Consists of 66,369 shares of common stock issuable upon conversion of shares of Series B Preferred Stock, 4,715,723 shares of common stock issuable upon conversion of shares of Series A2 Preferred Stock and 2,189,820 shares of common stock issuable upon conversion of shares of Series A1 Preferred Stock held by F-Prime Capital Partners Healthcare Fund V LP.

F-Prime Capital Partners Healthcare Advisors Fund V LP is the general partner of F-Prime Capital Partners Healthcare Fund V LP.

F-Prime Capital Partners Healthcare Advisors Fund V LP is solely managed by Impresa Management LLC, the managing member of its general partner and its investment manager.

Impresa Management LLC is owned, directly or indirectly, by various shareholders and employees of FMR LLC.

Each of the entities listed above expressly disclaims beneficial ownership of the securities listed above except to the extent of any pecuniary interest therein.

The address of these entities is 245 Summer Street, Boston, MA 02210.

Consists of 1,991,072 shares of common stock issuable upon conversion of shares of Series B Preferred Stock, 630,776 shares of common stock issuable upon conversion of shares of Series A2 Preferred Stock and 49,555 shares of common stock issuable upon conversion of shares of Series A1 Preferred Stock held by HH Beam Holdings LLC.

HH Beam Holdings LLC is beneficially owned and controlled by Hillhouse Fund IV, L.P.

Hillhouse Capital Management, Ltd.

acts as the sole management company of Hillhouse Fund IV, L.P., which is in turn ultimately controlled by Mr.

The registered address of HH Beam Holdings LLC is Citco Trustees (Cayman) Limited, 89 Nexus Way, Camana Bay, PO Box 31106, Grand Cayman KY1-1205, Cayman Islands.

TLS Beta Pte.

is a wholly owned subsidiary of Temasek Life Sciences Private Limited, which is a wholly owned subsidiary of Fullerton Management Pte.

Ltd., which is a wholly owned subsidiary of Temasek Holdings (Private) Limited.

The address of these entities is 60B Orchard Road, #06-18 Tower 2, The Atrium@Orchard, Singapore 238891.

Includes 455,292 shares of unvested restricted stock as of March 13, 2020 that Mr.

Evans has the ability to vote.

Includes options to purchase 292,492 shares of common stock that are exercisable within 60 days of March 13, 2020.

Includes options to purchase 218,270 shares of common stock that are exercisable within 60 days of March 13, 2020.

Includes options to purchase 130,120 shares of common stock that are exercisable within 60 days of March 13, 2020.

Includes options to purchase 24,251 shares of common stock that are exercisable within 60 days of December 31, 2019.

Includes 455,292 shares of unvested restricted stock as of March 13, 2020 that Mr.

Evans has the ability to vote.

Includes options to purchase 665,133 shares of common stock that are exercisable within 60 days of March 13, 2020.

The information required by this Item 10 will be included in our definitive proxy statement to be filed with the Securities and Exchange Commission, or SEC, with respect to our 2021 Annual Meeting of Stockholders and is incorporated herein by reference.

We have adopted a written code of business conduct and ethics, or Code, that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

A current copy of the Code is available on the investor section of our website at investors.beamtx.com.

We intend to disclose on our website any amendments to, or waivers from, our Code that are required to be disclosed pursuant to SEC rules.

Executive Compensation.

The information required by this Item 11 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2021 Annual Meeting of Stockholders and is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this Item 12 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2021 Annual Meeting of Stockholders and is incorporated herein by reference.

Certain Relationships and Related Transactions, and Director Independence.

The following is a summary of transactions since January 1, 2019 to which we have been a party in which the amount involved exceeded $120,000 and in which any of our executive officers, directors, promoters or beneficial holders of more than 5% of our capital stock had or will have a direct or indirect material interest.

We believe that all of the transactions described below were made on terms no less favorable to us than could have been obtained from unaffiliated third parties

Private placements

Series B convertible preferred stock

In November 2018, December 2018, January 2019 and February 2019 we completed the sale of an aggregate of 40,178,574 shares of our Series B convertible preferred stock at a purchase price of $3.36 per share for an aggregate purchase price of $135.0 million.

Each share of our Series B convertible preferred stock was converted into shares of our common stock immediately prior to the closing of our IPO, including adjustments in connection with the 1-for-4.4843 reverse stock split of our common stock effected on January 24, 2020.

The following table summarizes purchases of shares of our Series B convertible preferred stock by holders of more than 5% of our capital stock and entities affiliated with a member of our board of directors.

Name of stockholder

Number of series

purchase price

Funds affiliated with ARCH Venture Partners

Kristina Burow

Robert Nelsen

F-Prime Capital Partners Healthcare Fund V LP

Stephen Knight

HH Beam Holdings LLC

TLS Beta Pte.

Founder academic consulting agreements

On March 1, 2017, we entered into Academic Consulting Agreements with each of David Liu, Feng Zhang and Keith Joung, or the Founders, pursuant to which the Founders provide advisory services as mutually determined by us and the Founders from time to time.

The initial term of the Academic Consulting Agreements is for four years, and the agreements continue in effect thereafter until terminated by either party.

Under the terms of the agreements, we pay each of the Founders a consulting fee of $150,000 per year, payable in monthly installments in arrears beginning with the initial closing of our Series A-1 convertible preferred stock on June 28, 2017.

Additionally, we agreed to reimburse each of the Founders for reasonable business expenses incurred in connection with the performance of their services under the agreements.

To date, we have paid each of the Founders $200,000 for consulting services pursuant to these agreements.

License and collaboration agreement

In September 2019, we entered into a collaboration and license agreement with Prime Medicine, Inc., or Prime Medicine, to research and develop a novel gene editing technology recently developed by David Liu and his group at Broad Institute.

David Liu is a Founder and beneficially owns 5% or more of our common stock.

Under the terms of this agreement, we granted Prime Medicine a non-exclusive license to certain of our CRISPR technology (including Cas12b) and delivery technology, and certain other technology controlled by us, to develop and commercialize gene-editing products for the treatment of human diseases.

Prime Medicine granted us an exclusive license under certain gene editing technology controlled by Prime Medicine in certain fields and for certain applications similar to those we are already pursuing with base editing (specifically, the creation and correction of single-base transition mutations as well as the treatment of sickle cell disease).

Our exclusive rights from Prime Medicine are also subject to Broad Institute’s inclusive innovation model.

We are not currently using the intellectual property licensed from Prime Medicine in any of our current programs, however, we are required to use commercially reasonable efforts to develop new product candidates using the intellectual property licensed from Prime Medicine and therefore intend to evaluate this gene editing technology in accordance with our agreement with Prime Medicine and may in the future use this technology in future product candidates.

Each party granted to the other party certain exclusive and non-exclusive licenses to certain technology developed after the effective date of the agreement and controlled by the granting party or jointly owned by the parties.

Each party has an obligation to assign rights in certain technology developed under the collaboration to the other party.

We are required to use commercially reasonable efforts to develop and seek regulatory approval for two products that use licensed technology from Prime Medicine in certain specified countries and to commercialize licensed products for which regulatory approval has been obtained in certain specified countries.

Prime Medicine and we are each required to use commercially reasonable efforts to conduct the activities for which we are responsible under any development plan(s) under the agreement.

Prime Medicine has an option to jointly develop and commercialize, and share expenses and revenue for, certain products that use technology licensed from Prime Medicine in the United States.

For products that use technology licensed from Prime Medicine, we may be required to make milestone payments to Prime Medicine upon the achievement of certain clinical, regulatory and commercial events.

The aggregate potential milestone payments per product for the achievement of such clinical and regulatory events ranges from the low- to mid-eight figures.

The aggregate potential milestone payments per product for the achievement of such commercial events ranges from the mid- to high-eight figures.

We may also be obligated to pay a high-single digit royalty to a royalty rate between 10% and 15% on net sales of products that are covered by the technology licensed to us or by certain technology developed under the agreement, subject to certain reductions.

We may be entitled to receive from Prime Medicine a low-single digit royalty on net sales of products developed by Prime Medicine that are covered by the technology licensed from us, subject to certain reductions.

In addition, certain of the rights licensed under the agreement are sublicensed from third parties, and we or Prime Medicine may be required to make certain payments to such third parties to the extent we or Prime Medicine develop and commercialize products under such rights.

We have an obligation to issue $5,000,000 in shares of our common stock to Prime Medicine, and Prime Medicine has an obligation to issue 5,000,000 shares of its common stock to us, should the collaboration extend beyond one year.

We are also obligated to provide management services to Prime Medicine for up to one year.

We have the right to designate one member of Prime Medicine’s board of directors.

Director affiliations

Some of our directors are affiliated with and serve on our board of directors as representatives of entities which beneficially own or owned 5% or more of our common stock, as indicated below:

Principal stockholder

Kristina Burow

Funds affiliated with ARCH Venture Partners

Robert Nelsen

Funds affiliated with ARCH Venture Partners

Stephen Knight

F-Prime Capital Partners Healthcare Fund V LP

Investor rights agreement

We are party to an amended and restated investor rights agreement, or the Investor Rights Agreement, with each holder of our convertible preferred stock, which includes each holder of more than 5% of our capital stock and certain of our directors (or, in some cases, entities affiliated therewith).

The Investor Rights Agreement imposes certain affirmative obligations on us, and also grants certain rights to the holders, including certain registration rights with respect to the registrable securities held by them.

Other provisions of the Investor Rights Agreement were terminated upon completion of our IPO.

Employment or offer letter agreements

We have entered into employment or offer letter agreements with certain of our executive officers.

See Item 11., Executive Compensation , in this Annual Report on Form 10-K.

We have granted stock options and/or restricted stock to our named executive officers, other executive officers and certain of our directors.

See the Item 11, Executive Compensation, in this Annual Report on Form 10-K.

Director and officer indemnification and insurance

We have agreed to indemnify each of our directors and executive officers against certain liabilities, costs and expenses, and have purchased directors’ and officers’ liability insurance.

We also maintain a general liability insurance policy which covers certain liabilities of directors and officers arising out of claims based on acts or omissions in their capacities as directors or officers.

Related person transaction policy

Our board of directors has adopted a written related person transaction policy setting forth the policies and procedures for the review and approval or ratification of related person transactions.

This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act of 1933, as amended, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we were or are to be a participant, where the amount involved exceeds $120,000 in any fiscal year and a related person had, has or will have a direct or indirect material interest, including without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person.

In reviewing and approving any such transactions, our audit committee is tasked to consider all relevant facts and circumstances, including, but not limited to, whether the transaction is on terms comparable to those that could be obtained in an arm’s length transaction and the extent of the related person’s interest in the transaction.

All of the transactions described in this section occurred prior to the adoption of this policy.

Director independence

Under the rules of the Nasdaq Stock Market, independent directors must comprise a majority of a listed company’s board of directors within one year of the completion of its initial public offering.

In addition, the rules of the Nasdaq Stock Market require that, subject to specified exceptions, each member of a listed company’s audit and compensation committees be independent and that director

nominees be selected or recommended for the board’s selection by independent directors constituting a majority of the independent directors or by a nominating and corporate governance committee comprised solely of independent directors.

Under the rules of the Nasdaq Stock Market, a director will only qualify as “independent” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that such person is “independent” as defined under Nasdaq Stock Market and the Exchange Act rules.

Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act.

In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors or any other board committee:

(1) accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries or (2) be an affiliated person of the listed company or any of its subsidiaries.

Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, our board of directors has determined that each of our directors, with the exception of Mr.

Evans, is an “independent director” as defined under applicable rules of the Nasdaq Stock Market, including, in the case of Mr.

Cooper and Mr.

Fishman, the independence criteria set forth in Rule 10A-3 under the Exchange Act, and in the case of all the members of our compensation committee, the independence criteria set forth in Rule 10C-1 under the Exchange Act and are “non-employee directors” as defined in Section 16b-3 of the Exchange Act.

In making such determination, our board of directors considered the relationships that each such non-employee director has with us and all other facts and circumstances that our board of directors deemed relevant in determining his or her independence, including the beneficial ownership of our capital stock by each non-employee director.

Evans is not an independent director under these rules because he is our Chief Executive Officer.

Principal Accoun ting Fees and Services .

Our audit committee has appointed Deloitte and Touch LLP, or Deloitte, as our independent registered public accounting firm for the fiscal year ending December 31, 2019.

Deloitte has served as our registered public accountant since 2017.

The following table represents aggregate fees billed to us for services related to the fiscal years ended December 31, 2019 and 2018, by Deloitte.

Audit-related fees

All other fees

Audit fees consist of fees billed for professional services performed by Deloitte for the audit of our annual consolidated financial statements, the review of interim consolidated financial statements, and review of the registration statement on Form S-1 for our IPO, and related services that are normally provided in connection with statutory and regulatory filings or engagements.

Audit related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements, such as fees for the adoption of new accounting standards.

Tax fees consist of fees for professional services, including tax consulting, compliance, and transfer pricing services.

All other fees consist of database subscription fees paid to Deloitte.

The audit committee has considered whether the provision of non-audit services is compatible with maintaining the independence of Deloitte and has concluded that the provision of such services is compatible with maintaining such independence.

Pre-Approval Policies and Procedures

Our audit committee has adopted policies and procedures relating to the approval of all audit and non-audit services that are to be performed by our registered public accounting firm.

These policies and procedures generally provide that we will not engage our registered public accounting firm to render audit or non-audit services unless the service is specifically approved in advance by our audit committee or the engagement is entered into pursuant to one of the pre-approval procedures described below.

From time to time, our audit committee may pre-approve specified types of services that are expected to be provided to us by our registered public accounting firm during the next 12 months.

Any such pre-approval is detailed as to the particular service or type of services to be provided and is also generally subject to a maximum dollar amount.

Our audit committee may also delegate to one or more subcommittees or an individual member of our audit committee the authority to approve any audit or non-audit services to be provided to us by our registered public accounting firm.

Any approval of services by a subcommittee or member of our audit committee pursuant to this delegated authority is reported on at the next meeting of our audit committee.

During our 2019 and 2018 fiscal years, all services provided by Deloitte were pre-approved by our audit committee.

The information required by this Item 13 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2021 Annual Meeting of Stockholders and is incorporated herein by reference.

Principal Accounting Fees and Services.

The information required by this Item 14 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2021 Annual Meeting of Stockholders and is incorporated herein by reference.

Exhibits, Financial Statement Schedules.

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Description of Exhibit

Agreement and Plan of Merger, dated February 22, 2021, among Beam Therapeutics Inc., Galileo Merger Sub I, Inc., Galileo Merger Sub II, LLC, Guide Therapeutics, Inc.

(“Guide”), Shareholder Representative Services LLC, and the Guide Holders Signatory thereto

Fourth Amended Certificate of Incorporation of Beam Therapeutics Inc.

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Specimen stock certificate evidencing shares of common stock

Amended and Restated Investors’ Rights Agreement, by and among Beam Therapeutics Inc.

and the investors party thereto, dated as of November 8, 2018

Amended and Restated Investors’ Rights Agreement, among Beam Therapeutics Inc.

and the investors party thereto, dated November 8, 2018

Description of Registered Securities

Lease, by and between UP 26 Landsdowne, LLC and Beam Therapeutics Inc., dated February 21, 2018

Indenture of Lease, by and between Massachusetts Institute of Technology and Beam Therapeutics Inc., dated as of April 24, 2019

License Agreement, by and between MIL 21E, LLC and Beam Therapeutics Inc., dated as of June 25, 2019

License Agreement, by and between the President and Fellows of Harvard College and Beam Therapeutics Inc., dated as of June 27, 2017

License Agreement, by and between The Broad Institute, Inc.

and Blink Therapeutics Inc., dated as of May 9, 2018

License Agreement, by and between Editas Medicine, Inc.

and Beam Therapeutics Inc., dated as of May 9, 2018

License Agreement, by and between Bio Palette Co., Ltd.

and Beam Therapeutics Inc., dated as of March 27, 2019

Lease, between UP 26 Landsdowne, LLC and Beam Therapeutics Inc., dated February 21, 2018

Indenture of Lease, between Massachusetts Institute of Technology and Beam Therapeutics Inc., dated April 24, 2019

License Agreement, between MIL 21E, LLC and Beam Therapeutics Inc., dated June 25, 2019

License Agreement, between the President and Fellows of Harvard College and Beam Therapeutics Inc., dated June 27, 2017

Amendment No.

1 to License Agreement, between the President and Fellows of Harvard College and Beam Therapeutics Inc., dated December 12, 2017

Amendment No.

2 to License Agreement, between the President and Fellows of Harvard College and Beam Therapeutics Inc., dated March 27, 2020

License Agreement, between The Broad Institute, Inc.

and Blink Therapeutics Inc., dated May 9, 2018

First Amendment to License Agreement, between The Broad Institute, Inc.

and Blink Therapeutics Inc., dated September 4, 2018

Description of Exhibit

License Agreement, between Editas Medicine, Inc.

and Beam Therapeutics Inc., dated May 9, 2018

Letter Agreement, between Beam Therapeutics Inc., The Broad Institute, Inc., the President and Fellows of Harvard College, and Editas Medicine, Inc., dated September 26, 2018

Letter Agreement, between the President and Fellows of Harvard College, The Broad Institute, Inc., and Beam Therapeutics Inc., dated January 7, 2021.

License Agreement, between Bio Palette Co., Ltd.

and Beam Therapeutics Inc., dated March 27, 2019

Beam Therapeutics Inc.

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and its directors and officers

Description of Exhibit

Letter Agreement between Beam Therapeutics Inc.

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2019 Equity Incentive Plan

Form of Restricted Stock Unit Award Agreement under the Beam Therapeutics Inc.

2019 Equity Incentive Plan

Form of Restricted Stock Award Agreement under the Beam Therapeutics Inc.

2019 Equity Incentive Plan

Beam Therapeutics Inc.

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Beam Therapeutics Inc.

Non-Employee Director Compensation Policy

Non-Employee Director Compensation Policy, as amended

Lease Agreement between Beam Therapeutics Inc.

and ARE-NC Region No.

Description of Exhibit

List of Subsidiaries of Beam Therapeutics Inc.

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Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Portions of this exhibit have been omitted because the Registrant has determined they are not material and would likely cause competitive harm to the Registrant if publicly disclosed

Portions of this exhibit have been omitted because the Registrant has determined they are not material and are they type that the Registrant treats as private or confidential.

Indicates management contract or compensatory plan.

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Form 10-K Summary

Not applicable.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized .

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Robert Nelsen

/s/ Kathleen Walsh

March 15, 2021

Kathleen Walsh

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

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Consolidated statements of operations and other comprehensive loss

Consolidated statements of redeemable convertible preferred stock and stockholders’ deficit

Consolidated statements of redeemable convertible preferred stock and stockholders’ equity (defici t)

Consolidated statements of cash flows

Notes to consolidated financial statements

REPORT OF INDEPENDENT REGI STERED PUBLIC ACCOUNTING FIRM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of Beam Therapeutics Inc.

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We have audited the accompanying consolidated balance sheets of Beam Therapeutics Inc.

and subsidiaries (the "Company") as of December 31, 2019 and 2018, the related consolidated statements of operations and other comprehensive loss, redeemable convertible preferred stock and stockholders' deficit, and cash flows, for each of the two years in the period ended December 31, 2019, 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 as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

Change in Accounting Principle

As discussed in Note 2 to the financial statements, effective January 1, 2019, the Company adopted FASB Accounting Standards Codification Topic 842, Leases, using the modified retrospective approach and utilizing the effective date as its date of adoption.

and subsidiaries (the "Company") as of December 31, 2020 and 2019, the related consolidated statements of operations and other comprehensive loss, redeemable convertible preferred stock and stockholders' equity (deficit), and cash flows, for the years then ended, 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 as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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Operating lease right-of-use assets

Liabilities, redeemable convertible preferred stock, and stockholders’ deficit

Liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit)

Current liabilities:

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Current portion of equipment financing liability

Financing milestone liabilities payable

Deferred rent, current portion

Total current liabilities

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Long-term equipment financing liability

Deferred rent, net of current portion

Other liabilities

Total liabilities

Commitments and contingencies (See Note 7, Leases , and Note 8, License agreements )

Commitments and contingencies (See Note 7, Leases , Note 8, License agreements and Note 9, Collaboration and license agreements)

Redeemable convertible preferred stock (See Note 10, Redeemable convertible preferred stock )

Stockholders’ deficit:

Stockholders’ equity (deficit):

Preferred stock, $0.01 par value;

25,000,000 and no shares authorized, and no shares issued or outstanding at December 31, 2020 and 2019, respectively

Common stock, $0.01 par value;

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Additional paid-in capital

Accumulated other comprehensive income

Accumulated other comprehensive (loss) income

Accumulated deficit

Total stockholders’ deficit

Total liabilities, redeemable convertible preferred stock, and stockholders’ deficit

Total stockholders’ equity (deficit)

Total liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit)

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

Beam Therapeutics Inc.

Consolidated statements of operations and other comprehensive loss

Consolidated Statements of O perations and Other Comprehensive Loss

(in thousands, except share and per share amounts)

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Change in fair value of derivative liabilities

Loss on issuance of preferred stock in connection with Blink Merger (see Note 10, Blink Therapeutics )

Loss on issuance of preferred stock to investors

Change in fair value of preferred stock tranche liabilities

Interest income

Interest expense

Other expense

Interest and other income (expense), net

Total other income (expense)

Unrealized gain on marketable securities

Unrealized (loss) gain on marketable securities

Comprehensive loss

Reconciliation of net loss to net loss attributable to common stockholders:

Net loss attributable to noncontrolling interest in Blink

Accretion of redeemable convertible preferred stock to redemption value, including dividends on preferred stock

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Beam Therapeutics Inc.

Consolidated statements of redeemable convertible preferred stock and stockholders’ deficit

Consolidated Statements of Redeemable C onvertible Preferred Stock and Stockholders’ Equity (Deficit)

(in thousands, except share amounts)

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Comprehensive

Noncontrolling

Stockholders’

Noncontrolling

(Loss) Income

Equity (Deficit)

Balance at December 31, 2018

Issuance of Series A-1 redeemable convertible preferred stock, net of issuance costs of $108 and including derecognition of preferred stock tranche liability of $769

Issuance of Series A-2 redeemable convertible preferred stock, net of issuance costs of $57 and including derecognition of preferred stock tranche liability of $4,567

Issuance of Series B redeemable convertible preferred stock, net of issuance costs of $95

Issuance of Blink Series A redeemable convertible preferred stock

Issuance of series A-2 redeemable convertible preferred stock in connection with Blink Merger and redemption of redeemable noncontrolling interest

Issuance of Blink common stock

Issuance of common stock in connection with Blink Merger

Issuance of common stock to scientific founders in connection with Blink Merger

Redemption of noncontrolling interest in Blink upon Blink Merger

Accretion of redeemable convertible preferred stock to redemption value

Vesting of restricted common stock

Issuance of common stock related to anti-dilution rights, including derecognition of anti-dilution derivative liability of $300

Stock-based compensation

Exercise of common stock options

Issuance of common stock related to license agreement

Stock-based compensation

Other comprehensive income

Balance at December 31, 2019

Issuance of Series B redeemable convertible preferred stock, net of issuance costs of $95

Accretion of redeemable convertible preferred stock to redemption value

Conversion of redeemable convertible preferred stock to common stock upon closing of initial public offering

Issuance of common stock from initial public offering, net of issuance costs of $18.7 million

Issuance of common stock from October 2020 public offering, net of issuance costs of $8.5 million

Issuance of common stock related to license agreements

Vesting of restricted common stock

Issuance of common stock related to license agreement

Stock-based compensation

Exercise of common stock options

Other comprehensive income

Other comprehensive loss

Balance at December 31, 2020

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Beam Therapeutics Inc.

Consolidated statements of cash flows

Consolidated S tatements of Cash Flows

(in thousands)

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

Loss on issuance of preferred stock in connection with Blink Merger (See Note 10, Blink Therapeutics )

Loss on issuance of preferred stock to investors

Amortization of investment premiums

Amortization of investment discount (premiums)

Stock-based compensation expense

2 unchanged sentences

Change in fair value of derivative liabilities

Change in fair value of preferred stock tranche liabilities

Changes in operating assets and liabilities:

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Accrued expenses and other liabilities

Deferred rent liabilities

Operating lease liabilities

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Financing activities

Proceeds from issuance of Series A-1 Preferred Stock, net

Proceeds from issuance of Series A-2 Preferred Stock, net

Proceeds from issuance of Series B Preferred Stock, net

Proceeds from issuance of Blink Series A Preferred Stock, net

Proceeds from initial public offering, net of underwriting discount

Proceeds from October 2020 public offering, net of underwriting discount

Payment of initial and follow-on public offering costs

Proceeds from equipment financings

Repayment of equipment financings

Equity issuance costs

Proceeds from exercise of stock options

Net cash provided by financing activities

Net (decrease) increase in in cash, cash equivalents and restricted cash

Net increase (decrease) in in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash—beginning of period

Cash, cash equivalents and restricted cash—end of period

Supplemental disclosure of noncash investing and financing activities:

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

Beam Therapeutics Inc.

Consolidated statements of cash flows (continued)

(in thousands)

Years Ended December 31,

Supplemental disclosure of cash flow information:

Cash paid for interest

Supplemental disclosure of non-cash investing and financing activities:

Conversion of redeemable convertible preferred stock to common stock upon closing of the initial public offering

Property and equipment additions in accounts payable and accrued expenses

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Operating lease liabilities arising from obtaining right-of-use assets

Issuance of common stock in connection with Blink Merger

Issuance of common stock to founders in connection with Blink Merger

Issuance of Series A-2 Preferred Stock in connection with Blink Merger

Issuance of Series A-1 and A-2 Preferred Stock for research and development license

Recognition and derecognition of preferred stock tranche liabilities

Issuance of common stock for research and development license

Issuance of common stock for research and development licenses

Equity issuance costs in accounts payable and accrued expenses

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Beam Therapeutics Inc.

(the “Company” or “Beam”) is a research stage biotechnology company committed to creating a new class of precision genetic medicines, based on the Company’s proprietary base editing technology, with a vision of providing life-long cures to patients suffering from serious diseases.

(the “Company” or “Beam”) is a biotechnology company committed to establishing the leading, fully integrated platform for precision genetic medicines.

Beam’s vision is to provide life-long cures to patients suffering from genetic diseases.

The Company was incorporated on January 25, 2017 (Inception) as a Delaware corporation and began operations in July 2017.

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Liquidity and capital resources

Since its inception, the Company has devoted substantially all of our resources to building our base editing platform and advancing development of our portfolio of programs, establishing and protecting our intellectual property, conducting research and development activities, organizing and staffing our company, business planning, raising capital and providing general and administrative support for these operations.

Since its inception, the Company has devoted substantially all of its resources to building its base editing platform and advancing development of its portfolio of programs, establishing and protecting its intellectual property, conducting research and development activities, organizing and staffing the Company, business planning, raising capital and providing general and administrative support for these operations.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry including, but not limited to, technical risks associated with the successful research, development and manufacturing of product candidates, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations.

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Even if the Company’s drug development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

Since its inception, the Company has incurred substantial losses and had a net loss of $78.3 million for the year ended December 31, 2019.

As of December 31, 2019, the Company had an accumulated deficit of $203.0 million.

In connection with the Company’s initial public offering, or IPO, the Company’s board of directors approved a one-for-4.4843 reverse stock split of its issued and outstanding common stock and stock options and a proportional adjustment to the existing conversion ratios for the Company’s redeemable convertible preferred stock effective as of January 24, 2020.

Accordingly, all common stock shares, per share amounts, and additional paid in capital amounts for all periods presented in the accompanying financial statements have been retroactively adjusted, where applicable, to reflect the reverse stock split and adjustment to the preferred stock conversion ratios .

In February 2020, the Company completed its IPO in which the Company issued and sold 12,176,471 shares of its common stock, including 1,588,235 shares pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $17.00 per share, for aggregate gross proceeds of $207.0 million.

The Company received approximately $188.3 million in net proceeds after deducting underwriting discounts and offering expenses payable by the Company.

In connection with the IPO, all outstanding shares of Company’s redeemable convertible preferred stock converted into 29,127,523 shares of its common stock.

In October 2020, the Company issued and sold 5,750,000 shares of its common stock, including 750,000 shares pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $23.50 per share, for aggregate gross proceeds of $135.1 million.

The Company received approximately $126.6 million in net proceeds after deducting underwriting discounts and offering expenses payable by the Company.

On January 16, 2021, the Company entered into a Securities Purchase Agreement with certain purchasers, pursuant to which the Company agreed to sell and issue to the Purchasers, in a private placement, shares of common stock of the Company.

The closing of the private placement occurred on January 21, 2021.

The Company issued and sold 2,795,700 shares of its common stock at a purchase price of $93.00 per share for aggregate gross proceeds of $260.0 million, before deducting fees to the placement agents and other estimated offering expenses payable by the Company (See Note 11, Preferred stock and common stock ).

The Company received approximately $252.1 million in net proceeds after deducting estimated offering expenses payable by the Company.

Since its inception, the Company has incurred substantial losses and had an accumulated deficit of $397.6 million as December 31, 2020.

The Company expects to generate operating losses and negative operating cash flows for the foreseeable future.

On February 11, 2020, the Company completed its initial public offering, or IPO, in which the Company issued and sold 12,176,471 shares of its common stock, including 1,588,235 shares pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $17.00 per share, for aggregate gross proceeds of $207.0 million.

The Company received approximately $188.3 million in net proceeds after deducting underwriting discounts and estimated offering expenses payable by the Company.

The Company expects that its cash, cash equivalents and marketable securities as of December 31, 2019 of $91.8 million, along with $188.3 million in net IPO proceeds, will be sufficient to fund its operations for at least the next twelve months from the date of issuance of these financial statements.

The Company expects that its cash, cash equivalents and marketable securities as of December 31, 2020 of $299.7 million will be sufficient to fund its operations for at least the next twelve months from the date of issuance of these financial statements.

The Company will need additional financing to support its continuing operations and pursue its growth strategy.

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The Company will need to generate significant revenue to achieve profitability, and it may never do so.

As further discussed in Note 11, Redeemable convertible preferred stock , upon the completion of the IPO of its common stock in February 2020, all outstanding redeemable convertible preferred stock converted into shares of common stock.

COVID-19-related significant risks and uncertainties

With the ongoing concern related to the COVID-19 pandemic during 2020, the Company has maintained and expanded its business continuity plans to address and mitigate the impact of the COVID-19 pandemic on its business.

In March 2020, to protect the health of its employees, and their families and communities, the Company restricted access to its offices to personnel who performed critical activities that must be completed on-site, limited the number of such personnel that could be present at its facilities at any one time, and requested that most of its employees work remotely.

In May 2020, as certain states eased restrictions, the Company established new protocols to better allow its full laboratory staff access to the Company’s facilities.

These protocols included several shifts working over a seven-day-week protocol.

The Company expects to continue incurring additional costs to ensure it adheres to the guidelines instituted by the Centers for Disease Control and Prevention, or CDC, and to provide a safe working environment to its onsite employees.

The extent to which the COVID-19 pandemic impacts the Company’s business, its corporate development objectives, results of operations and financial condition, and the value of and market for its common stock, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements, and the effectiveness of actions taken globally to contain and treat the disease.

Disruptions to the global economy, disruption of global healthcare systems, and other significant impacts of the COVID-19 pandemic could have a material adverse effect on the Company’s business, financial condition, results of operations and growth prospects.

While the COVID-19 pandemic did not significantly impact the Company’s business or results of operations during the twelve months ended December 31, 2020, the length and extent of the pandemic, its consequences, and containment efforts will determine the future impact on the Company’s operations and financial condition.

S ummary of significant accounting policies

Basis of presentation

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Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification, or ASC, and Accounting Standards Update, or ASU, of the Financial Accounting Standards Board, or FASB.

S ummary of significant accounting policies

Principles of consolidation

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The Company bases its estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances.

Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, incremental borrowing rate used in the calculation of lease liabilities, the fair values of common stock, redeemable convertible preferred stock, redeemable convertible preferred stock tranche liabilities, stock-based compensation, financing milestone payments and success payments.

Actual results could differ from these estimates.

Cash, and cash equivalents, and restricted cash

Cash and cash equivalents consist of standard checking accounts, money market accounts, and all highly liquid investments with a remaining maturity of three months or less at the date of purchase.

Restricted cash represents collateral provided for letters of credit issued as security deposits in connection with the Company’s leases of its corporate and manufacturing facilities.

The following table reconciles cash, cash equivalents, and restricted cash reported within the Company’s consolidated balance sheets to the total of the amounts shown in the consolidated statements of cash flows (in thousands):

Cash and cash equivalents

Cash and cash equivalents consist of standard checking accounts, money market accounts and commercial paper.

The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents.

Restricted cash

Total cash, cash equivalents, and restricted cash

Marketable securities

The Company classifies marketable securities with a remaining maturity when purchased of greater than three months as available-for-sale.

Available-for-sale securities are maintained by the Company’s investment managers and consist of commercial paper and high-grade corporate notes.

Available-for-sale securities are carried at fair value with the unrealized gains and losses included in accumulated other comprehensive income as a component of stockholders’ equity until realized.

Available-for-sale securities are maintained by the Company’s investment managers and consist of commercial paper, high-grade corporate notes, U.S.

Treasury securities and government securities.

Available-for-sale securities are carried at fair value with the unrealized gains and losses included in accumulated other comprehensive (loss) income as a component of stockholders’ equity until realized.

Any premium or discount arising at purchase is amortized and/or accreted to interest income and/or expense over the life of the instrument.

Realized gains and losses are determined using the specific identification method and are included in other income (expense).

Restricted cash

Restricted cash represents collateral provided for letters of credit issued as security deposits in connection with the Company’s lease of its corporate facilities.

As of December 31, 2019 and 2018, restricted cash was $13.3 million and $1.5 million, respectively.

Realized gains and losses are determined using the specific identification method and are included in interest and other income (expense), net.

Concentrations of credit risk

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As permitted under Delaware law, the Company indemnifies its officers, directors, consultants, and employees for certain events or occurrences that happen by reason of the relationship with, or position held at, the Company.

Through December 31, 2019 and 2018, the Company had not experienced any losses related to these indemnification obligations, and no claims were outstanding.

For the twelve months ended December 31, 2020 and 2019, the Company had not experienced any losses related to these indemnification obligations, and no claims were outstanding.

The Company does not expect significant claims related to these indemnification obligations and, consequently, concluded that the fair value of these obligations is negligible, and no related reserves were established.

Equity issuance costs

The Company capitalized incremental legal, professional, accounting and other third-party fees that were directly associated with the IPO as other non-current assets until the IPO was consummated.

After consummation of the IPO in February 2020, these costs were recorded in stockholders’ deficit as a reduction of additional paid-in-capital generated as a result of the offering.

As of December 31, 2019, equity issuance costs of $3.1 million were included in other assets in the accompanying consolidated balance sheets.

The Company capitalizes incremental legal, professional, accounting and other third-party fees that were directly associated with its stock offerings as other non-current assets until the offerings are consummated.

Upon consummation, these costs are recorded in stockholders’ equity (deficit) as a reduction of additional paid-in-capital generated as a result of the offerings.

As of December 31, 2020, there were no deferred offering costs.

As of December 31, 2019, equity issuance costs of $3.1 million related to the IPO were included in other assets in the accompanying consolidated balance sheets.

Fair value of financial instruments

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Shorter of useful life or remaining term

Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in loss from operations.

Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in interest and other income (expense), net.

Expenditures for repairs and maintenance are charged to expense as incurred.

Impairment of long-lived assets

The Company evaluates its long-lived assets, which consist primarily of property and equipment and operating lease right-of-use assets, and our investment in Verve Therapeutics, Inc., or Verve, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

The Company evaluates its long-lived assets, which consist primarily of property and equipment and operating lease right-of-use assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset.

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Freestanding financial instruments and derivatives

The Company has identified the following financial instruments, which are recorded as liabilities on the consolidated balance sheet and separately accounted for at fair value.

Preferred Stock Tranche Liabilities – The Company has determined that its obligation to issue, and the Company’s investors’ right to purchase, additional shares of redeemable convertible Series A-1 Preferred Stock, or Series A-1 Preferred, pursuant to the second closing and redeemable convertible Series A-2 Preferred Stock, or Series A-2 Preferred, and together with the Series A-1 Preferred, the Series A Preferred, pursuant to the third closing (see Note 11, Redeemable convertible preferred stock ) represent a freestanding instrument.

The freestanding preferred stock tranche liability, or the tranche liability, was initially recorded at fair value, with gains and losses arising from changes in fair value recognized in other income (expense) in the consolidated statement of operations and other comprehensive loss.

The tranche liabilities were remeasured at each reporting period and upon the modification, exercise or expiration of the obligation.

The liabilities were valued using an option pricing model.

In 2018, all Series A-1 Preferred and Series A-2 Preferred closings occurred, and all tranche liabilities have been derecognized.

The following financial instruments were issued pursuant to a license agreement between the President and Fellows of Harvard College, or Harvard, and the Company, or the Harvard License Agreement, and a license agreement with the Broad Institute of MIT and Harvard, or Broad Institute, and the Company, or the Broad License Agreement, (see Note 8, License Agreements ):

Financing Milestone Payments – The Company was required to make future cash payments to Harvard and Broad Institute upon the achievement of future financing milestones tied to the closing of additional rounds of Series A Preferred and Series B Preferred Stock.

The financing milestone payments were accounted for under ASC Topic 815, Derivatives and Hedging , or ASC 815, and were initially recorded at fair value with a corresponding charge to research and development expense.

The liabilities were marked to market at each balance sheet date with all changes in value recognized in other income (expense) in the consolidated statement of operations and other comprehensive loss.

The Company adjusted the liability for changes in fair value until the achievement of the financing milestones.

To determine the estimated fair value of the financing milestone

payments, the Company used a Monte Carlo simulation model, which models the value of the liability based on the change of several key variables, including time to capital raise, probabilities to capital raise, cost of debt, as well as the projected price per share upon issuance.

As of December 31, 2018, all financing milestone payments have been achieved and were either paid in cash or are recorded in accrued expenses for actual amounts due.

All outstanding financing milestone payment liabilities have been paid in 2019.

Success Payments –The Company is required to make success payments to Harvard and Broad Institute based on increases in the per share fair market value of the Company’s Series A Preferred, payable in cash.

Subsequent to the February 2020 IPO, the amount of success payments will be based on market value of Beam’s common stock.

The success payments are accounted for under ASC 815 and are initially recorded at fair value with a corresponding charge to research and development expense.

Pursuant to a license agreement between the President and Fellows of Harvard College, or Harvard, and the Company, or the Harvard License Agreement, and a license agreement with the Broad Institute of MIT and Harvard, or Broad Institute, and the Company, or the Broad License Agreement, (see Note 8, License Agreements ), the Company is required to make success payments to Harvard and Broad Institute based the achievement of specified multiples of the initial weighted average value of the Company’s redeemable convertible Series A-1 Preferred Stock and the Company’s redeemable convertible Series A-2 Preferred Stock, or together the Series A Preferred, at specified valuation dates, payable in cash or Company common stock.

Subsequent to the IPO, the amount of the success payments are based on the market value of Beam’s common stock.

The success payments are accounted for under ASC 815, Derivatives and Hedging and were initially recorded at fair value with a corresponding charge to research and development expense.

The liabilities are marked to market at each balance sheet date with all changes in value recognized in other income (expense) in the consolidated statement of operations and other comprehensive loss.

The Company will continue to adjust the liability for changes in fair value until the earlier of the achievement or expiration of the success payment obligation.

To determine the estimated fair value of the success payments, the Company used a Monte Carlo simulation model, which models the value of the liability based on several key variables, including probability of event occurrence, timing of event occurrence, as well as the value of the Series A Preferred.

Anti-Dilution Issuance Rights – Additional shares of common stock were issued to Harvard and Broad Institute upon equity financings allowing Harvard and Broad Institute to maintain a defined ownership percentage in the Company on a fully diluted basis until the Company achieved a defined aggregate level of preferred stock financing.

These anti-dilution issuance rights were accounted for under ASC 815 and are initially recorded at fair value with a corresponding charge to research and development expense.

As such, the Company recorded this instrument as a liability at its fair value with a corresponding amount recorded as research and development expense and marked it to market at each reporting period, with changes in fair value recognized in other income (expense) in the consolidated statement of operations and other comprehensive loss at each period-end while this instrument was outstanding.

The liability was valued using a Monte Carlo simulation model, which models the value of the liability based on the change of several key variables, including the time to the capital raise, the probability of the capital raise, as well as the fair value of the Company’s common stock.

During 2018, the anti-dilution issuance rights were satisfied and there is no additional derivative liability accounting.

Leases and rent expense

On January 1, 2019, the Company adopted ASU No.

2016-02, Leases (Topic 842) , or ASC 842.

Under the standard the Company accounts for leases using a right-of-use, or ROU, model, which recognizes that, at the date of commencement, a lessee has a financial obligation to make lease payments to the lessor for the right to use the underlying asset during the lease term.

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement.

Leases with a term greater than one year are recognized on the balance sheet as ROU assets and short-term and long-term lease liabilities, as applicable.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease.

The Company typically only includes an initial lease term in its assessment of a lease arrangement.

It also considers termination options and factors those into the determination of lease payments.

Options to renew a lease are not included in the assessment unless there is reasonable certainty that the Company will renew.

Operating lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the expected remaining lease term.

Certain adjustments to the ROU asset may be required for items such as incentives received.

The interest rate implicit in lease contracts is typically not readily determinable.

As a result, the Company utilizes its incremental borrowing rate, which reflects the fixed rate at which it could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company is required to pay fees for operating expenses in addition to monthly base rent for certain operating leases (non-lease components).

The Company has elected the practical expedient which allows non-lease components to be combined with lease components for all asset classes.

Variable non-lease components are not included within the lease right-of-use asset and lease liability on the consolidated balance sheet, and instead are reflected as expense in the period they are paid.

Leasehold improvements are not unique and are retained by the lessor at the end of the lease.

However, in the case of a space designed to be suitable for the Company’s specific real estate needs and if the Company is responsible for cost overruns, the Company is the accounting owner of the leasehold improvements.

The Company’s real estate operating leases provide for scheduled annual rent increases throughout the lease terms.

The Company recognizes the effects of the scheduled rent increases on a straight-line basis over the full terms of the lease.

Tenant improvement allowances, if any, provided by a landlord are recorded as a reduction of the ROU asset related to that lease.

Redeemable convertible preferred stock

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Then, in the absence of additional paid-in capital, the accretion is charged to the accumulated deficit.

As discussed in Note 11, Redeemable convertible preferred stock , all of the Company’s outstanding redeemable convertible preferred stock converted into the Company’s common stock upon the closing of the IPO in February 2020.

All of the Company’s outstanding redeemable convertible preferred stock converted into the Company’s common stock upon the closing of the IPO in February 2020.

Revenue recognition

The Company recognizes revenue in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and its related amendments, or, collectively, ASC 606.

At inception, the Company determines whether contracts are within the scope of ASC 606 or other topics.

For contracts that are determined to be within the scope of ASC 606, revenue is recognized when a customer obtains control of promised goods or services.

The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods and services.

To achieve this core principle, the Company applies the following five steps (i) identify the contract with the customer;

(ii) identify the performance obligations in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance obligations in the contract;

and (v) recognize revenue when performance obligation is satisfied.

The Company only applies the five-step model to contracts when it determines that collection of substantially all consideration for goods and services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration.

Performance obligations promised in a contract are identified based on the goods and services that will be transferred to the customer that are both capable of being distinct and are distinct in the context of the contract.

To the extent a contract includes multiple promised goods and services, the Company applies judgment to determine whether promised goods and services are both capable of being distinct and distinct in the context of the contract.

If these criteria are not met, the promised goods and services are accounted for as a combined performance obligation.

The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods and services to the customer.

To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method, depending on the nature of the variable consideration.

Variable consideration is included in the transaction price if, in management’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur.

Any estimates, including the effect of the constraint on variable consideration, are evaluated at each reporting period for any changes.

Determining the transaction price requires significant judgment.

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation.

Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation.

The consideration to be received is allocated among the separate performance obligations based on relative standalone selling prices.

The Company typically determines standalone selling prices using an adjusted market assessment approach model.

The Company satisfies performance obligations either over time or at a point in time.

Revenue is recognized over time if either (i) the customer simultaneously receives and consumes the benefits provided by the entity’s performance, (ii) the entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or (iii) the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date.

If the entity does not satisfy a performance obligation over time, the related performance obligation is satisfied at a point in time by transferring the control of a promised good or service to a customer.

Licenses of intellectual property, or IP:

If the license to the Company’s IP is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from consideration allocated to the license when the license is transferred to the customer and the customer can use and benefit from the licenses.

For licenses that are combined with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue.

The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

See Note 9, Collaboration and license agreements , for a discussion of Beam’s license agreement with Verve Therapeutics, Inc, or Verve .

Milestone payments:

At the inception of each arrangement that includes development or regulatory milestone payments, the Company evaluates the probability of reaching the milestones and estimate the amount to be included in the transaction price using the most likely amount method.

If it is probable that a significant revenue reversal would not occur in the future, the associated milestone value is included in the transaction price.

Milestone payments that are not within the Company’s control or the licensee’s, such as regulatory approvals, are not considered probable of being achieved until those approvals are received and therefore revenue recognized is constrained as management is unable to assert that a reversal of revenue would not be possible.

The transaction price is then allocated to each performance obligation on a relative standalone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied.

At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price.

Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment.

To date, the Company has not recognized any milestone revenue resulting from any of its agreements.

Commercial Milestone Payments and Royalties:

For arrangements that include sales-based royalties, including milestone payments based on levels of sales, if the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

To date, the Company has not recognized any royalty revenue resulting from any of its agreements.

When no performance obligations are required of the Company, or following the completion of the performance obligation period, such amounts are recognized as revenue upon transfer of control of the goods or services to the customer.

Generally, all amounts received or due other than sales-based milestones and royalties are classified as license fees.

Sales-based milestones and royalties will be recognized as royalty revenue at the later of when the related sales occur or when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

Deferred revenue arises from amounts received in advance of the culmination of the earnings process and is recognized as revenue in future periods as performance obligations are satisfied.

Deferred revenue expected to be recognized within the next twelve months is classified as a current liability.

Upfront payment contract liabilities resulting from the Company’s license agreements do not represent a financing component as the payment is not financing the transfer of goods or services, and the technology underlying the licenses granted reflects research and development expenses already incurred by the Company.

Research and development costs

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Research and development costs consist of costs incurred in performing research and development activities, including salaries and bonuses, stock-based compensation, employee benefits, facilities costs, laboratory supplies, depreciation, manufacturing expenses, preclinical expenses, consulting, and other contracted services.

Additionally, under the terms of the Harvard License Agreement and the Broad License Agreement, the Company is obligated to make future payments should certain financing, development and regulatory milestones be achieved.

Further, the fair value of the Company’s common stock issued under license agreements, such as those with Bio Palette Co., Ltd., or Bio Palette, and Prime Medicine Inc., or Prime Medicine, are recorded as research and development costs.

Additionally, under the terms of the Harvard License Agreement and the Broad License Agreement, the Company is obligated to make future payments should certain development and regulatory milestones be achieved.

The Company has included such costs as research and development as the costs incurred related to the license agreements had no alternative future use.

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Stock-based compensation

The Company’s stock-based compensation program allows for grants of stock options and restricted stock awards.

The Company’s stock-based compensation program allows for grants of stock options, restricted stock awards and restricted stock units.

Grants are awarded to employees and non-employees, including directors.

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The Company estimates the fair value of options granted using the Black-Scholes option pricing model, or Black-Scholes, for stock option grants to both employees and non-employees.

The fair value of the Company’s common stock is used to determine the fair value of restricted stock awards.

The fair value of the Company’s common stock is used to determine the fair value of restricted stock awards and restricted stock units.

Stock-based compensation awards are subject to either service- or performance-based vesting conditions.

Compensation expense related to awards to employees, directors and non-employees with service-based vesting conditions is recognized on a straight-line

basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term.

Compensation expense related to awards to employees, directors and non-employees with service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term.

Compensation expense related to awards to employees with performance-based vesting conditions is recognized based on grant date fair value over the requisite service period using the accelerated attribution method to the extent achievement of the of performance condition is probable.

The Black-Scholes option pricing model requires inputs based on certain subjective assumptions, including (i) the expected stock price volatility, (ii) the expected term of the award, (iii) the risk-free interest rate, and (iv) expected dividends.

Due to the lack of a public market for the Company’s common stock and lack of company-specific historical and implied volatility data, the Company has based its computation of expected volatility on the historical volatility of a representative group of public companies with similar characteristics to the Company, including stage of product development and life science industry focus.

Due to the lack of a public market for the Company’s common stock prior to the IPO and continued lack of sufficient company-specific historical and implied volatility data, the Company has based its computation of expected volatility on the historical volatility of a representative group of public companies with similar characteristics to the Company, including stage of product development and life science industry focus.

The historical volatility is calculated based on a period of time commensurate with expected term assumption.

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The Company recognizes forfeitures as they occur.

Due to the absence of an active market during the years ended December 31, 2019 and 2018 for the Company’s common stock, the Company utilized methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation , to estimate the fair value of its common stock.

In determining the exercise prices for options granted, the Company has considered the estimated fair value of the common stock as of the measurement date.

Due to the absence of an active market for the Company’s common stock prior to the IPO, the Company utilized methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation , to estimate the fair value of its common stock.

In determining the exercise prices for options granted, the Company considered the estimated fair value of the common stock as of the measurement date.

The estimated fair value of the common stock has been determined at each grant date based upon a variety of factors, including the illiquid nature of the common stock, arm’s-length sales of the Company’s capital stock (including redeemable convertible preferred stock), the effect of the rights and preferences of the preferred shareholders, and the prospects of a liquidity event.

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Significant changes to the key assumptions underlying the factors used could result in different fair values of common stock at each valuation date.

Subsequent to the IPO, the Company has used the market value of its common stock on the measurement date.

All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred.

Due to the uncertainty about the recovery of the expenditure, amounts incurred are classified as general and administrative expenses in the accompanying consolidated statements of operations and other comprehensive loss.

The Company’s real estate operating leases provide for scheduled annual rent increases throughout the lease terms.

The Company recognizes the effects of the scheduled rent increases on a straight-line basis over the full terms of the lease.

Prior to the adoption of ASU 2016-02, Leases , or ASC 842, tenant improvement allowances, if any, provided by a landlord are recorded as deferred rent and amortized as reduction to rent expense over the lease terms.

Subsequent to the adoption of ASC 842, tenant improvement allowances, if any, provided by a landlord are recorded as a reduction of the right-of-use, or ROU, asset related to that lease.

Variable interest entities

The Company reviews each legal entity formed by related parties to determine whether or not the entity is a variable interest entity, or VIE.

The Company reviews each legal entity in which it has a financial interest to determine whether or not the entity is a variable interest entity, or VIE.

If the entity is a VIE, the Company assesses whether or not it is the primary beneficiary of that VIE based on a number of factors, including (i) which party has the power to direct the activities that most significantly affect the VIE’s economic performance, (ii) the parties’ contractual rights and responsibilities pursuant to any contractual agreements and (iii) which party has the obligation to absorb losses or the right to receive benefits from the VIE.

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The Company determines whether it is more likely than not that a tax position will be sustained upon examination.

If it is not more likely than not

that a position will be sustained, none of the benefit attributable to the position is recognized.

If it is not more likely than not that a position will be sustained, none of the benefit attributable to the position is recognized.

The tax benefit to be recognized for any tax position that meets the more-likely-than-not recognition threshold is calculated as the largest amount that is more than 50% likely of being realized upon resolution of the contingency.

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Comprehensive loss includes net loss as well as other changes in stockholders’ deficit which includes certain changes in equity that are excluded from net loss.

The Company’s only element of other comprehensive income is unrealized gains and losses on marketable securities.

The Company’s only element of other comprehensive loss is unrealized gains and losses on marketable securities.

Net loss per share

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Diluted net loss per share attributable to common stockholders is computed by dividing the diluted net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, including potential dilutive common shares assuming the dilutive effect of common stock equivalents.

For purposes of the dilutive net loss per share calculation, stock options and stock units for which the performance and market vesting conditions have been deemed probable, potential dilutive securities, which include redeemable convertible preferred stock, unvested restricted stock, common stock options and shares issuable under anti-dilution rights are considered to be common stock equivalents, while stock options and stock units with performance- or market-based vesting conditions that were not deemed probable as of December 31, 2019 are not considered to be common stock equivalents.

The Company’s redeemable convertible preferred stock contractually entitles the holders of such shares to participate in dividends but does not contractually require the holders of such shares to participate in losses of the Company.

Accordingly, in periods in which the Company reports a net loss, such losses are not allocated to such participating securities.

In periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

For purposes of the dilutive net loss per share calculation, stock options and stock units for which the performance and market vesting conditions have been deemed probable, potential dilutive securities, which include redeemable convertible preferred stock, unvested restricted stock, and common stock options are considered to be common stock equivalents, while stock options and stock units with performance- or market-based vesting conditions that were not deemed probable are not considered to be common stock equivalents.

The Company’s redeemable convertible preferred stock contractually entitled the holders of such shares to participate in dividends but did not contractually require the holders of such shares to participate in losses of the Company.

Accordingly, in periods in which the Company reported a net loss, such losses were not allocated to such participating securities.

In periods in which the Company reported a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders was the same as basic net loss per share attributable to common stockholders, since dilutive common shares were not assumed to have been issued if their effect is anti-dilutive.

The Company reported a net loss attributable to common stockholders for the years ended December 31, 2020 and 2019.

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The Company views its operations as and manages its business in one operating segment operating exclusively in the United States.

Recently adopted accounting pronouncements

In February 2016, the FASB issued ASC 842.

The new lease standard requires leases to be accounted for using a right-of-use model, which recognizes that, at the date of commencement, a lessee has a financial obligation to make lease payments to the lessor for the right to use the underlying asset during the lease term.

The lessee recognizes a corresponding right-of-use asset related to this right.

Effective January 1, 2019, the Company early adopted ASC 842 using the modified retrospective approach, which provides a method for recording existing leases at adoption using the effective date as its date of initial application, for which prior periods are presented in accordance with the previous guidance in ASC 840, Leases , or ASC 840.

The Company made the following practical expedients elections:

(1) elected the short-term lease exception, (2) did not elect hindsight and (3) elected to not separate non-lease components from lease components.

It also adopted the transitional practical expedients, which allowed the Company to carry forward its historical assessment of whether existing agreements contained a lease and the classification of its existing operating leases.

As of January 1, 2019, the Company did not have any financing leases or obligations.

For financing obligations as of December 31, 2019, refer to Note 7, Leases .

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement.

Leases with a term greater than one year are recognized on the balance sheet as ROU assets and short-term and long-term lease liabilities, as applicable.

ROU assets represent the Company’s right to use an underlying

asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease.

The Company typically only include s an initial lease term in its assessment of a lease arrangement.

It also consider s termination options and factor s those into the determination of lease payments.

Options to renew a lease are not included in the assessment unless there is reasonable certainty that the Company will renew.

Operating lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the expected remaining lease term.

Certain adjustments to the ROU asset may be required for items such as incentives received.

The interest rate implicit in lease contracts is typically not readily determinable.

In transition to ASC 842, the Company utilized the remaining lease term of its leases in determining the appropriate incremental borrowing rates.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Impact of Adoption ASC 842 on the Consolidated Financial Statements

(Prior to ASC

842 Adoption)

(As adjusted)

Operating lease assets (1)

Deferred rent, current portion (2)

Deferred rent, net of current portion (2)

Current portion of operating lease liability (3)

Long-term operating lease liability (3)

Represents recognition of operating lease right-of-use assets.

Represents reclassification of deferred rent to operating lease.

Represents recognition of operating lease liabilities.

The adoption of ASC 842 did not have a material effect on the Company’s consolidated statements of operations and other comprehensive loss, consolidated statements of redeemable convertible preferred stock and stockholders’ deficit or consolidated statements of cash flows.

The Company will continue to report financial information for fiscal years ended before December 31, 2018 under ASC 840.