What changed in this filing

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Item 1. Financial Statements

2022-08-09 compared with 2022-05-09 · 309 added, 197 removed, 805 unchanged (39% of the section changed)

16 unchanged sentences

Property and equipment, net

Operating lease, right of use asset

Operating lease, right of use assets

LIABILITIES AND STOCKHOLDERS’

3 unchanged sentences

Lease liabilities

Deferred revenue

Deferred revenue ($ 150 and $ 0 from related party, respectively)

Total current liabilities

LONG-TERM LIABILITIES

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

Deferred revenue, net of current portion ($ 0 and $ 100 from related party, respectively)

Deferred rent and lease incentive liability

6 unchanged sentences

STOCKHOLDERS’

Preferred stock, par value $ 0.0001 per share, 10,000,000 shares authorized at March 31, 2022 and December 31, 2021;

no shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

Common stock, par value $ 0.0001 per share, 300,000,000 shares authorized at March 31, 2022 and December 31, 2021, respectively;

60,689,609 and 60,263,158 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

Preferred stock, par value $ 0.0001 per share, 10,000,000 shares authorized at June 30, 2022 and December 31, 2021;

no shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

Common stock, par value $ 0.0001 per share, 300,000,000 shares authorized at June 30, 2022 and December 31, 2021, respectively;

60,838,370 and 60,263,158 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

Additional paid-in-capital

8 unchanged sentences

(in thousands, except share and per share amounts)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Licensing and collaboration revenue

7 unchanged sentences

Change in fair value of the MSKCC success payments liability

Gain on extinguishment of PPP Loan

Other income, net

14 unchanged sentences

Other Comprehensive

Retained Earnings (Accumulated

Total Stockholders’

Income (Loss)

BALANCE—December 31, 2021

Stock-based compensation expense

Issuance of common stock under employee stock plans

Issuance of common stock on exercise of options

Net unrealized loss on available-for-sale marketable securities

Stock-based compensation expense

Other comprehensive loss

BALANCE—March 31, 2022

Issuance of common stock on exercise of options

Stock-based compensation expense

Other comprehensive loss

BALANCE—June 30, 2022

BALANCE—December 31, 2020

3 unchanged sentences

BALANCE—March 31, 2021

Repayment of promissory note

Issuance of common stock on exercise of options

Stock-based compensation expense

BALANCE—June 30, 2021

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

3 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

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

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

Depreciation and amortization

Loss on disposal of fixed assets

Interest expense

Non-cash consideration for licensing and collaboration revenue

2 unchanged sentences

Change in fair value of MSKCC success payments liability

Acquired in-process research and development

Extinguishment of PPP Loan

Amortization of investment premiums

11 unchanged sentences

Other liabilities

Net cash provided by (used in) operating activities

Net cash (used in) provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Maturities of marketable securities

Purchases of property and equipment

Purchases of marketable securities

Purchases of property and equipment

Net cash used in investing activities

2 unchanged sentences

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

Repayment of promissory note

Payments on capital lease

Payment of deferred issuance costs

Net cash provided by financing activities

7 unchanged sentences

Restricted cash

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

TOTAL CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for income taxes

Cash paid for interest

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

1 unchanged sentence

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

Series C convertible preferred stock issuance costs unpaid at period end

Acquired in-process research and development accrued

Extinguishment of PPP Loan

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

19 unchanged sentences

Our wholly owned subsidiaries hold interests in our equity investments and do not have operating activities.

We have incurred net losses and negative cash flows from operations since our inception and we had an accumulated deficit of $ 116.9 million as of March 31, 2022.

During the three months ended March 31, 2022, we incurred a net loss of $ 19.1 million and used $ 21.7 million of cash in operating activities.

We have incurred net losses and negative cash flows from operations since our inception and we had an accumulated deficit of $ 143.6 million as of June 30, 2022.

During the six months ended June 30, 2022, we incurred a net loss of $ 45.8 million and used $ 43.5 million of cash in operating activities.

We expect to continue to incur substantial losses, and our ability to achieve and sustain profitability will depend on the successful development, approval, and commercialization of our product candidates and on our achievement of sufficient revenue to support our cost structure.

We may never achieve profitability and, unless and until we do, we will need to continue to raise additional capital.

Our management expects that existing cash, cash equivalents, and marketable securities of $ 390.8 million as of March 31, 2022, will be sufficient to fund our current operating plan for at least the next 12 months from the date of issuance of our condensed consolidated financial statements.

Our management expects that existing cash, cash equivalents, and marketable securities of $ 366.1 million as of June 30, 2022, will be sufficient to fund our current operating plan for at least the next 12 months from the date of issuance of our condensed consolidated financial statements.

Summary of Significant Accounting Policies

25 unchanged sentences

Three Months Ended

March 31, 2022

March 31, 2021

March 31, 2022

Six Months Ended

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

June 30, 2022

December 31, 2021

1 unchanged sentence

We monitor economic conditions to identify facts or circumstances that may indicate if any of our accounts receivable are not collectible or if the contract assets should be impaired.

No allowance for doubtful accounts was recorded as of March 31, 2022 or December 31, 2021.

No allowance for doubtful accounts or contract asset impairment was recorded as of June 30, 2022 or December 31, 2021.

Property and Equipment, Net

Property and equipment are recorded at cost, net of accumulated depreciation and amortization.

Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets.

The useful lives of property and equipment are as follows:

Furniture and fixtures

Laboratory equipment

Leasehold improvements

Shorter of remaining lease term or estimated useful life

Upon retirement or sale of the assets, the cost and related accumulated depreciation and amortization are removed from the balance sheet and the resulting gain or loss is recorded in the statements of operations.

Repairs and maintenance are expensed as incurred.

We adopted the guidance under ASC 842 on January 1, 2022 using the modified retrospective approach with a cumulative-effect adjustment as of January 1, 2022 in accordance with the Accounting Standard Update (“ASU”) 2016-02, Leases (Topic 842).

4 unchanged sentences

As the interest rate implicit in our lease contracts is not readily determinable, we utilize a collateralized incremental borrowing rate based on the information available at the commencement date to determine the present value of lease payments.

Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received and impairment charges if we determine the right-of-use asset is impaired.

Certain adjustments to the right-of-use assets

may be required for items such as initial direct costs paid or incentives received and impairment charges if we determine the right-of-use assets are impaired.

There was no cumulative-effect adjustment recorded to retained earnings on January 1, 2022.

4 unchanged sentences

Variable lease payments are recognized as incurred and are presented in operating expenses on the statements of operations and comprehensive loss.

As of March 31, 2022 and December 31, 2021, we had no finance leases.

As of June 30, 2022 and December 31, 2021, we had no finance leases.

For more information about the impact of adoption and disclosures on our leases, see Note 9.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the “

FASB”) or other standard-setting bodies and are adopted by us as of the specified effective date.

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

In February 2016, the FASB issued ASU No.

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New Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments –

Credit Losses:

In June 2016, the FASB issued ASU 2016-13, Financial Instruments–Credit Losses:

Measurement of Credit Losses on Financial Instruments (Topic 326).

19 unchanged sentences

Evaluators may prioritize inputs differently on any given day for any security based on market conditions, and not all inputs listed are available for use in the evaluation process for each security evaluation on any given day.

Level 1 financial instruments are comprised of money market funds and U.S.

Changes in the ability to observe valuation inputs may result in a reclassification of levels of certain securities within the fair value hierarchy.

We recognize transfers into and out of levels within the fair value hierarchy in the period in which the actual event or change in circumstances that caused the transfer occurs.

No such transfers occurred during the three and six months ended June 30, 2022.

Level 1 financial instruments are comprised of money market fund investments and U.S.

Treasury bills.

Level 2 financial instruments are comprised of commercial paper and corporate debt securities.

Level 2 financial instruments are comprised of commercial paper, corporate debt securities, and U.S.

government agency bonds.

Financial assets and liabilities are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies, or similar techniques, and at least one significant model assumption or input is unobservable.

1 unchanged sentence

The following table sets forth our financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):

Fair Value Measurements as of March 31, 2022

Fair Value Measurements as of June 30, 2022

Commercial paper ($ 50,370 included in cash and cash equivalents)

1 unchanged sentence

Money market fund investments (included in cash and cash equivalents)

Corporate debt securities ($ 2,999 included in cash and cash equivalents)

Corporate debt securities

government agency bonds ($ 1,199 included in cash and cash equivalents)

11 unchanged sentences

Total fair value of liabilities

The fair value and amortized cost of cash equivalents and available-for-sale marketable securities by major security type as of March 31, 2022 and December 31, 2021 are presented in the following tables (in thousands):

As of March 31, 2022

The fair value and amortized cost of cash equivalents and available-for-sale marketable securities by major security type as of June 30, 2022 and December 31, 2021 are presented in the following tables (in thousands):

As of June 30, 2022

Commercial paper ($ 50,370 included in cash and cash equivalents)

1 unchanged sentence

Money market investments (included in cash equivalents)

Corporate debt securities ($ 2,999 included in cash and cash equivalents)

Corporate debt securities

government agency bonds ($ 1,199 included in cash and cash equivalents)

21 unchanged sentences

Change in fair value

Balance at March 31, 2022

Balance at June 30, 2022

Our liability for the MSKCC success payments is carried at fair value and changes are recognized as expense or income as part of other income (expense) until the success payments liability is paid or expires (Note 4).

We recorded $ 1.6 million and $ 0.7 million change in fair value of the MSKCC success payments liability in other income (expense) and research and development expense in our condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2022 and 2021, respectively.

We recorded $ 1.1 million and $ 0.5 million change in fair value of the MSKCC success payments liability in other income (expense) and research and development expense in our condensed consolidated statements of operations and comprehensive loss for the three months ended June 30, 2022 and 2021, respectively.

We recorded $ 2.6 million and $ 1.2 million change in fair value of the MSKCC success payments liability in other income (expense) and research and development expense in our condensed consolidated statements of operations and comprehensive loss for the six months ended June 30, 2022 and 2021, respectively.

We utilize a Monte Carlo simulation model that models the future movement of stock prices based on several key variables.

5 unchanged sentences

Expected volatility

Probability of achieving multiple of Initial Share Price

2.6 % to 8.7 %

1 unchanged sentence

Expected term (years)

The computation of expected volatility was estimated using a combination of available information about the historical volatility of stocks of similar publicly traded companies for a period matching the expected term assumption and the historical and implied volatility of our stock.

The computation of expected volatility is estimated using a combination of available information about the historical volatility of stocks of similar publicly traded companies for a period matching the expected term assumption and the historical and implied volatility of our stock.

The risk-free interest rate, expected volatility, and expected term assumptions depend on the estimated timing of our phase 1 clinical trial for our CB-012 product candidate utilizing the know-how, biological materials, and intellectual property licensed under the MSKCC Agreement and the estimated timing of marketing approval for this product candidate from the U.S.

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The UC/Vienna Agreement includes certain diligence milestones that we must meet.

For products and services sold by us that are covered by the CVC IP, we will owe low- to mid-single-digit percent royalties on net sales, subject to a minimum annual royalty.

For products and services sold by us that are covered by the CVC IP, we will owe low- to mid-single-digit percent royalties on

net sales, subject to a minimum annual royalty.

Prior to the time that we are selling products, we owe UC/Vienna an annual license maintenance fee.

5 unchanged sentences

We are obligated to reimburse UC for its prosecution and maintenance costs of the CVC IP.

For each of the three months ended March 31, 2022 and 2021, we incurred $ 0.3 million for payments we owe to UC related to sublicensing revenues, which we recorded in research and development expenses in our condensed consolidated statements of operations and comprehensive loss.

For the three months ended March 31, 2022 and 2021, we reimbursed UC $ 2.3 million and $ 3.2 million, respectively, for prosecution and maintenance costs of the CVC IP, which were recorded in general and administrative expenses in our condensed consolidated statements of operations and comprehensive loss.

For the three months ended June 30, 2022 and 2021, we incurred $ 0.2 million and $ 0.7 million, respectively, for payments we owe to UC related to sublicensing revenues, which we recorded in research and development expenses in our condensed consolidated statements of operations and comprehensive loss.

For the six months ended June 30, 2022 and 2021, we incurred $ 0.5 million and $ 1.0 million, respectively, for payments we owe to UC related to sublicensing revenues, which we recorded in research and development expenses in our condensed consolidated statements of operations and comprehensive loss.

For the three months ended June 30, 2022 and 2021, we reimbursed UC $ 1.0 million and $ 3.3 million, respectively, for prosecution and maintenance costs of the CVC IP, which were recorded in general and administrative expenses in our condensed consolidated statements of operations and comprehensive loss.

For the six months ended June 30, 2022 and 2021, we reimbursed UC $ 3.3 million and $ 6.5 million, respectively, for prosecution and maintenance costs of the CVC IP, which were recorded in general and administrative expenses in our condensed consolidated statements of operations and comprehensive loss.

On December 15, 2016, we entered into a Consent to Assignments, Licensing and Common Ownership and Invention Management Agreement (“IMA”) relating to the CVC IP.

Under the IMA, CRISPR Therapeutics AG (“CRISPR”) reimburses us 50 % of the amounts we reimburse UC for patent prosecution and maintenance costs of the CVC IP.

For the three months ended March 31, 2022 and 2021, CRISPR reimbursed us $ 1.1 million and $ 1.6 million, respectively, which we recorded as reductions of general and administrative expenses in our condensed consolidated statements of operations and comprehensive loss.

Memorial Sloan Kettering Cancer Center (“MSKCC”)

On November 13, 2020, we entered into an Exclusive License Agreement with MSKCC (the “MSKCC Agreement”), under which we exclusively licensed know-how, biological materials, and patent families relating to fully-human single-chain variable fragments targeting CD371 (also known as CLL-1) for use in T cells, NK cells, and genome-edited induced pluripotent stem cells (“iPSCs”) for allogeneic CD371-targeted cell therapies (currently used in our CB-012 product candidate).

For the three months ended June 30, 2022 and 2021, CRISPR reimbursed us $ 0.5 million and $ 1.6 million, respectively, which we recorded as reductions of general and administrative expenses in our condensed consolidated statements of operations and comprehensive loss.

For the six months ended June 30, 2022 and 2021, CRISPR reimbursed us $ 1.6 million and $ 3.2 million, respectively, which we recorded as reductions of general and administrative expenses in our condensed consolidated statements of operations and comprehensive loss.

Memorial Sloan Kettering Cancer Center

also known as CD371) for use in T cells, NK cells, and genome-edited induced pluripotent stem cells (“iPSCs”) for allogeneic CLL-1-targeted cell therapies (currently used in our CB-012 product candidate).

We paid MSKCC an upfront payment of $0.5 million in cash and $2.1 million in stock.

For each licensed CD371 product, we may owe potential clinical, regulatory, and commercial milestone payments totaling $ 112.0 million.

In addition, in the event we, our affiliates, or sublicensees, receive regulatory approval for a licensed CD371 product, we will owe low- to mid-single-digit percent royalties on net sales by us, our affiliates, and our sublicensees.

For each licensed CLL-1 product, we may owe potential clinical, regulatory, and commercial milestone payments totaling $112.0 million.

In addition, in the event we, our affiliates, or sublicensees, receive regulatory approval for a licensed CLL-1 product, we will owe low- to mid-single-digit percent royalties on net sales by us, our affiliates, and our sublicensees.

Our license from MSKCC includes the right to sublicense through multiple tiers and we will owe MSKCC a percentage of upfront cash or equity received from our sublicensees.

The percentage owed decreases as our licensed CD371 product candidate moves through development, starting at a low-double-digit percentage if clinical trials have not yet begun and decreasing to a mid-single-digit percentage if our licensed CD371 product candidate is in later clinical trial stages.

The percentage owed decreases as our licensed CLL-1 product candidate moves through development, starting at a low-double-digit percentage if clinical trials have not yet begun and decreasing to a mid-single-digit percentage if our licensed CLL-1 product candidate is in later clinical trial stages.

We are also responsible for paying a percentage of licensed patent costs.

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At our option, success payments to MSKCC may be made in cash or common stock.

The relevant time period commences when the first patient is dosed with a licensed CD371 product candidate in the first phase 1 clinical trial and ends upon the earlier of the third anniversary from the approval of our, or our affiliate’s, or sublicensee’s, biologics license application (“BLA”) by the FDA or 10 years from the date the first patient was dosed with a licensed CD371 product candidate in the first phase 1 clinical trial.

The relevant time period commences when the first patient is dosed with a licensed CLL-1 product candidate in the first phase 1 clinical trial and ends upon the earlier of the third anniversary from the approval of our, or our affiliate’s, or sublicensee’s biologics license application (“BLA”) by the FDA or 10 years from the date the first patient was dosed with a licensed CLL-1 product candidate in the first phase 1 clinical trial.

The aggregate success payments will not exceed $ 35.0 million.

8 unchanged sentences

If MSKCC materially breaches the MSKCC Agreement in certain circumstances (e.g., granting a third party a license in our field) then, during the time of such uncured breach, MSKCC will not be entitled to receive any success payments or any change of control payment.

As of March 31, 2022, the estimated fair value of the total success payments obligation to MSKCC was $ 2.5 million, which was included in long-term liabilities in our condensed consolidated balance sheets.

For the three months ended March 31, 2022 and 2021, we recognized a $ 1.6 million and $ 0.7 million, respectively, change in fair value of the MSKCC success payments liability, which was recorded in other income (expense) in our condensed consolidated statements of operations and comprehensive loss.

As of June 30, 2022, the estimated fair value of the total success payments obligation to MSKCC was $ 1.4 million, which was included in long-term liabilities in our condensed consolidated balance sheets.

For the three months ended June 30, 2022 and 2021, we recognized a $ 1.1 million and $ 0.5 million, respectively, change in fair value of the MSKCC success payments liability, which was recorded in other income (expense) in our condensed consolidated statements of operations and comprehensive loss.

For the six months ended June 30, 2022 and 2021, we recognized a $ 2.6 million and $ 1.2 million, respectively, change in fair value of the MSKCC success payments liability, which was recorded in other income (expense) in our condensed consolidated statements of operations and comprehensive loss.

Intellia Therapeutics, Inc.

4 unchanged sentences

Under the Intellia License Agreement, each party is responsible for 30 % of the other party’s expenses for prosecution and maintenance of the licensed intellectual property.

For the three months ended March 31, 2022 and March 31, 2021, we reimbursed Intellia less than $ 0.1 million, which was recorded as general and administrative expenses in our condensed consolidated statements of operations and comprehensive loss.

During each of the three months ended March 31, 2022 and 2021, Intellia reimbursed us $ 0.3 million and $ 0.5 million, respectively (including reimbursement for a portion of the patent prosecution and maintenance costs of the CVC IP paid to UC), which were recorded as reductions of general and administrative expenses in our condensed consolidated statements of operations and comprehensive loss.

During the three months ended June 30, 2022 and 2021, we reimbursed Intellia $ 0.2 million and less than $ 0.1 million, respectively, which was recorded as general and administrative expenses in our condensed consolidated statements of operations and comprehensive loss.

During the six months ended June 30, 2022 and 2021, we reimbursed Intellia $ 0.4 million and less than $ 0.1 million, respectively, which was recorded as general and administrative expenses in our condensed consolidated statements of operations and comprehensive loss.

During the three months ended June 30, 2022 and 2021, Intellia reimbursed us $ 0.2 million and $ 0.8 million, respectively (including reimbursement for a portion of the patent prosecution and maintenance costs of the CVC IP paid to UC), which were recorded as reductions of general and administrative expenses in our condensed consolidated statements of operations and comprehensive loss.

During the six months ended June 30, 2022 and 2021, Intellia reimbursed us $ 0.5 million and $ 1.3 million, respectively (including reimbursement for a portion of the patent prosecution and maintenance costs of the CVC IP paid to UC), which were recorded as reductions of general and administrative expenses in our condensed consolidated statements of operations and comprehensive loss.

The term of the Intellia License Agreement continues for the life of the licensed patents and patent applications;

1 unchanged sentence

On June 16, 2021, we entered into a leaseback agreement with Intellia (the “Leaseback Agreement”).

Pursuant to the Leaseback Agreement, in exchange for Intellia’s grant to us of an exclusive license to certain intellectual property relating to CRISPR-Cas9, including Cas9 chRDNAs, for use solely in the manufacture of our CB-010 product candidate, we paid Intellia an upfront cash payment of $ 1.0 million and will pay up to $ 23.0 million in potential future regulatory and sales milestones.

payment of $ 1.0 million and will pay up to $ 23.0 million in potential future regulatory and sales milestones.

Additionally, we will owe Intellia low- to mid-single-digit percent royalties on net sales of our CB-010 product candidate by us, our affiliates, and sublicensees until the expiration, abandonment, or invalidation of the last patent within the intellectual property relating to CRISPR-Cas9, including that relating to Cas9 chRDNAs (i.e., 2036, without patent term adjustment or patent term extension).

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and a low-single-digit percentage of licensing revenue we receive for licensing the chRDNA patent family after December 2020.

No licensing fee payments were incurred to Pioneer during the three months ended March 31, 2022.

During the three months ended March 31, 2021, we incurred $ 0.8 million for payments we owed to Pioneer related to licensing revenues, which were recorded as a research and development expense in our condensed consolidated statements of operations and comprehensive loss.

For the three and six months ended June 30, 2022, and for the three months ended June 30, 2021, we did not incur any expenses for payments we owe to Pioneer related to licensing revenues.

For the six months ended June 30, 2021, we incurred $ 0.8 million for payments we owed to Pioneer related to licensing revenues, which were recorded as a research and development expense in our condensed consolidated statements of operations and comprehensive loss.

AbbVie Manufacturing Management Unlimited Company

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Under the terms of the AbbVie Agreement, we conduct certain preclinical research, development, and manufacturing activities under the collaboration, including certain activities for the manufacture and supply of licensed product for AbbVie’s phase 1 clinical trials.

AbbVie reimburses us for all such activities, including reimbursement for time spent by employees at a designated FTE rate.

AbbVie reimburses us for all such activities,

including reimbursement for time spent by employees at a designated FTE rate.

The duration of the collaboration is not fixed.

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We constrain the estimated variable consideration if we assess that it is probable that a significant reversal in the amount of cumulative revenue recognized may occur in future periods.

We constrained all developmental and regulatory milestone payments as of March 31, 2022.

We constrained all developmental and regulatory milestone payments as of June 30, 2022.

The transaction price is reevaluated at the end of each reporting period and as changes in circumstances occur.

2 unchanged sentences

We received an upfront cash payment of $ 30.0 million from AbbVie during the year ended December 31, 2021.

We recognized short-term deferred revenue in the amount of $ 12.5 million and long-term deferred revenue in the amount of $ 14.5 million related to this upfront cash payment in our condensed consolidated balance sheets as of March 31, 2022.

We recognized short-term deferred revenue in the amount of $ 12.1 million and long-term deferred revenue in the amount of $ 13.1 million related to this upfront cash payment in our condensed consolidated balance sheets as of June 30, 2022.

We recognized short-term deferred revenue in the amount of $ 8.3 million and long-term deferred revenue in the amount of $ 19.1 million related to these payments in our consolidated balance sheets as of December 31, 2021.

We recognized $ 0.9 million in revenue for the three months ended March 31, 2022, relating to the AbbVie Agreement.

As of March 31, 2022, and December 31, 2021, we also recorded $ 0.2 and $ 1.0 million in accounts receivable, respectively, and $ 0.4 and $ 0.2 million, respectively, in contract assets in our condensed consolidated balance sheets.

We recognized $ 2.9 million and $ 0.5 million in revenue for the three months ended June 30, 2022 and 2021, respectively, relating to the AbbVie Agreement.

We recognized $ 3.8 million and $ 0.5 million in revenue for the six months ended June 30, 2022 and 2021, respectively, relating to the AbbVie Agreement.

As of June 30, 2022, and December 31, 2021, we also recorded $ 0.4 and $ 1.0 million in accounts receivable, respectively, and $ 1.1 and $ 0.2 million, respectively, in contract assets in our condensed consolidated balance sheets.

Disaggregation of Revenue

We disaggregate revenue by geographical market based on the location of research and development activities of our licensees and collaborators.

The following is a summary of revenue by geographic location for the three months ended March 31, 2022 and 2021 (in thousands):

Three Months Ended March 31,

The following is a summary of revenue by geographic location for the three and six months ended June 30, 2022 and 2021 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

United States

Rest of world

During the three months ended March 31, 2022, we recognized $ 1.7 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 0.9 million of revenue related to performance obligations satisfied over time.

During the three months ended March 31, 2021, we recognized $ 1.6 million of revenue related to performance obligations satisfied at a point in time, and no revenue related to performance obligations satisfied over time.

During the three months ended June 30, 2022, we recognized $ 1.3 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 2.9 million of revenue related to performance obligations satisfied over time.

During the three months ended June 30, 2021, we recognized $ 1.0 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 0.5 million of revenue related to performance obligations satisfied over time.

During the six months ended June 30, 2022, we recognized $ 3.1 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 3.8 million of revenue related to performance obligations satisfied over time.

During the six months ended June 30, 2021, we recognized $ 2.6 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 0.5 million of revenue related to performance obligations satisfied over time.

Contract Balances

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The remaining deferred revenue relates to upfront payments received under license agreements that also include non-refundable annual license fees, which are accounted for as material rights for license renewals and are recognized at the point in time annual license fees are paid by the licensees and the renewal periods begin.

The following table presents changes in our contract assets and liabilities during the three months ended March 31, 2022 (in thousands):

The following table presents changes in our contract assets and liabilities during the six months ended June 30, 2022 (in thousands):

Balance as of

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Deferred revenue, current and long-term

Unbilled accounts receivable did not change significantly during the three months ended March 31, 2022.

Deferred revenue decreased during the three months ended March 31, 2022, primarily due to offsetting of $ 0.5 million in deferred revenue recognized in connection with the AbbVie Agreement (Note 4).

During the three months ended March 31, 2022 and 2021, we recognized $ 0.6 million and $ 0.1 million of revenue, respectively, which were included in the opening contract liabilities balances as of December 31, 2021 and 2020, respectively.

Unbilled accounts receivable increased during the six months ended June 30, 2022, primarily due to the increase in unbilled research costs under the AbbVie Agreement in the amount of $ 0.9 million.

Deferred revenue decreased during the six months ended June 30, 2022, primarily due to a higher amount of revenue recognized compared to the amount of additional billings during the six months ended June 30, 2022.

During the six months ended June 30, 2022 and 2021, we recognized $ 2.5 million and $ 0.1 million of revenue, respectively, which were included in the opening contract liabilities balances as of December 31, 2021 and 2020, respectively.

Transaction Prices Allocated to Remaining Performance Obligations

Remaining unsatisfied performance obligations represent in aggregate the amount of a transaction price that has been allocated to performance obligations not delivered as of the end of a reporting period.

The value of transaction prices allocated to remaining unsatisfied performance obligations as of March 31, 2022 was approximately $ 46.4 million.

We expect to recognize approximately $ 12.8 million of remaining performance obligations as revenue in the next 12 months and the remainder thereafter.

Remaining performance obligations represent in aggregate the amount of a transaction price that has been allocated to performance obligations not delivered as of the end of a reporting period.

The value of transaction prices allocated to remaining unsatisfied performance obligations as of June 30, 2022 was approximately $ 44.0 million.

We expect to recognize approximately $ 12.6 million of remaining performance obligations as revenue in the next 12 months and to recognize the remainder thereafter.

Capitalized Contract Acquisition Costs and Fulfillment Costs

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Balance Sheet Items

Other receivables consisted of the following as of March 31, 2022 and December 31, 2021, respectively (in thousands):

Other receivables consisted of the following (in thousands):

Patent cost reimbursements

Accrued interest on marketable securities

Prepaid expenses and other current assets consisted of the following as of March 31, 2022 and December 31, 2021, respectively (in thousands):

Prepaid expenses and other current assets consisted of the following (in thousands):

Prepaid contract manufacturing and clinical costs

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Prepaid income taxes

Property and equipment, net, consisted of the following as of March 31, 2022 and December 31, 2021, respectively (in thousands):

Property and equipment, net, consisted of the following (in thousands):

Lab equipment

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Property and equipment, net

Depreciation and amortization expenses related to property and equipment were $ 0.3 and $ 0.2 million, respectively, for each of the three months ended March 31, 2022 and 2021.

Accrued expenses and other current liabilities consisted of the following as of March 31, 2022 and December 31, 2021, respectively (in thousands):

Depreciation and amortization expenses related to property and equipment were $ 0.4 and $ 0.2 million, respectively, for the three months ended June 30, 2022 and 2021.

Depreciation and amortization expenses related to property and equipment were $ 0.7 million and $ 0.5 million for the six months ended June 30, 2022 and 2021, respectively.

Accrued expenses and other current liabilities consisted of the following (in thousands):

Accrued employee compensation and related expenses

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Accrued patent expenses

Accrued sublicensing fees

Accrued expenses related to sublicensing revenues

Credit card liability

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This represents a material voting interest in the private company and entitles us to hold one of the four private company’s board of director seats and to jointly vote with another stockholder on a second board of director seat.

As of March 31, 2022, we have appointed one of the four directors.

As of June 30, 2022, we have appointed one of the four directors of the private company.

We concluded that the private company is a variable interest entity and that we are not its primary beneficiary based on our representation on its board of directors.

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Under the measurement alternative, our investment in the private company’s convertible preferred stock was initially recorded at its estimated fair value, but the carrying value may be adjusted through earnings upon an impairment or when there is an observable price change involving the same or a similar investment with the private company.

As of each of March 31, 2022 and December 31, 2021, the carrying value of investment was $ 7.5 million.

There have been no changes to the carrying value of the investment during the three months ended March 31, 2022.

We did not recognize any revenue in connection with the Private Company License Agreement for the three months ended March 31, 2022 and 2021.

As of March 31, 2022 and December 31, 2021, DuPont held a greater than 5 % of our voting interest and Pioneer, then a DuPont company, is considered a related party (Note 4).

As of each of June 30, 2022 and December 31, 2021, the carrying value of the investment was $ 7.5 million.

There have been no changes to the carrying value of the investment during the three months ended June 30, 2022.

We did not recognize any revenue in connection with the Private Company License Agreement for each of the three and six months ended June 30, 2022 and 2021.

Scientific Advisory Board Payments

Doudna, a co-founder and stockholder of the Company, receives compensation for participating on our scientific advisory board (the “SAB”) .

During each of the three months ended March 31, 2022 and 2021, we paid Dr.

During each of the three and six months ended June 30, 2022 and 2021, we paid Dr.

Doudna less than $ 0.1 million for her participation on our SAB.

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Our PPP Loan provided for customary events of default, including those relating to failure to make payment, bankruptcy, breaches of representations, and material adverse effects.

We could have prepaid the principal of our PPP Loan at any time without incurring any prepayment charges.

We could have prepaid the principal of our PPP

Loan at any time without incurring any prepayment charges.

On May 22, 2021, our PPP Loan was forgiven in full by the SBA and, at that time, we recognized a PPP Loan extinguishment gain of $ 1.6 million in our condensed consolidated statements of operations and comprehensive loss.

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Facility Lease Agreements

We lease laboratory and office space under non-cancellable operating agreements.

We lease laboratory and office space under noncancellable operating agreements.

In March 2021, we entered into a ten-year lease agreement, which superseded and replaced our prior lease, as amended, for our corporate headquarters and the new lease included additional office and laboratory space located within the same building in Berkeley, California.

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Three Months Ended

March 31, 2022

June 30, 2022

Six Months Ended

June 30, 2022

Operating lease cost*

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Total lease cost

* Includes $ 0.5 million of variable lease cost related to operating expenses and taxes.

*Includes $ 0.5 million and $ 1.0 million of variable lease cost related to operating expenses and taxes for the three and six months ended June 30, 2022, respectively.

Supplemental information related to our leases is as follows (in thousands):

Three Months Ended March 31, 2022

Six Months Ended

June 30, 2022

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

As of March 31, 2022, the weighted-average remaining lease term was 9.0 years for our corporate office and laboratory leases, and the weighted-average discount rate was 11.3 %.

The following table summarizes a maturity analysis of our operating lease liabilities showing the aggregate lease payments as of March 31, 2022 (in thousands):

As of June 30, 2022, the weighted-average remaining lease term was 8.8 years for our corporate office and laboratory leases, and the weighted-average discount rate was 11.29 %.

The following table summarizes a maturity analysis of our operating lease liabilities showing the aggregate lease payments as of June 30, 2022 (in thousands):

Remainder of 2022*

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** Reflects an offset of $ 1.5 million related to incentives expected to be received in 2023.

*** Reflects an offset of $ 0.2 million related to incentives expected to be received in 2024.

Capital Lease

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To date, we have not paid any claims or been required to defend any action related to our indemnification obligations.

As of March 31, 2022 and December 31, 2021, we did not have any material indemnification claims that were probable or reasonably possible, and consequently, we have not recorded related liabilities.

As of June 30, 2022 and December 31, 2021, we did not have any material indemnification claims that were probable or reasonably possible, and consequently, we have not recorded related liabilities.

From time to time, we may become involved in legal proceedings arising in the ordinary course of business.

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We are not currently subject to any material legal proceedings, and we are not aware of any unasserted claims pending that could, individually or in the aggregate, have a material adverse effect on our results of operations or financial condition.

Common stock reserved for future issuance, on an as converted basis, consists of the following:

March 31, 2022

Common stock reserved for future issuance consists of the following:

June 30, 2022

December 31, 2021

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Furthermore, any shares subject to awards under the 2013 Plan that terminate, expire, or lapse for any reason without the delivery of shares, or are reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price, will be added to the 2021 Plan.

The 2021 Plan also provides that the number of shares initially reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2022 and ending on January 1, 2031, by an amount equal to the lesser of (a) 5 % of the shares of common stock outstanding on the last day of the immediately preceding fiscal year and (b) such smaller number of shares of stock as determined by our Board.

an amount equal to the lesser of (a) 5 % of the shares of common stock outstanding on the last day of the immediately preceding fiscal year and (b) such smaller number of shares of stock as determined by our Board.

No more than 56,000,000 shares of stock may be issued upon the exercise of incentive stock options under the 2021 Plan.

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The grant date fair market value of all awards made under the 2021 Plan and all cash compensation paid by us to any non-employee director for services as a director in any fiscal year may not exceed $ 750,000 , increased to $ 1,000,000 in the fiscal year of their initial service as a non-employee director.

As of March 31, 2022, we had 6,783,690 shares available for issuance under the 2021 Plan.

The following table summarizes stock option activity under our equity incentive plans during the three months ended March 31, 2022:

Shares Available

As of June 30, 2022, we had 6,310,513 shares available for issuance under the 2021 Plan.

The following table summarizes stock option activity under our equity incentive plans during the six months ended June 30, 2022:

Stock Options

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Outstanding at December 31, 2021

Addition to option pool

Options granted

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Options cancelled or forfeited

Outstanding at March 31, 2022

Exercisable at March 31, 2022

Vested and expected to vest at March 31, 2022

Outstanding at June 30, 2022

Exercisable at June 30, 2022

Vested and expected to vest at June 30, 2022

*The aggregate intrinsic value is calculated as the difference between the stock option exercise price and the estimated fair value of the underlying common stock at the end of each reporting period referenced above.

Grant Date Fair Value

During the three months ended March 31, 2022 and 2021, we granted 339,030 and 1,561,079 stock options to employees and non-employees with a weighted-average grant date fair value of $ 6.68 and $ 2.73 per share, respectively.

We estimated the fair value of each employee and non-employee stock option award on the grant date using the Black-Scholes option-pricing model based on the following assumptions for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,

71.7 % - 72.0 %

During the three months ended June 30, 2022, we granted 495,120 stock options to employees ( no stock options were granted to non-employees) with a weighted average grant date fair value of $ 4.82 .

During the six months ended June 30, 2022, we granted 834,150 stock options to employees and non-employees with a weighted average grant date fair value of $ 5.58 .

During the three months ended June 30, 2021, we granted 896,831 stock options to employees ( no stock options were granted to non-employees) with a weighted average grant date fair value of $ 3.44 .

During the six months ended June 30, 2021, we granted 2,457,910 stock options to employees and non-employees with a weighted average grant date fair value of $ 2.99 .

We estimated the fair value of each employee and non-employee stock option award on the grant date using the Black-Scholes option-pricing model based on the following assumptions:

Three Months Ended June 30,

Six Months Ended June 30,

71.9 % to 74.1 %

75.3 % to 75.9 %

71.7 % to 74.1 %

75.3 % to 76.5 %

Expected term (in years)

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0.9 % to 1.1 %

1.7 % to 3.4 %

0.9 % to 1.2 %

Expected dividend yield

As of March 31, 2022, there was $ 32.0 million of unrecognized stock-based compensation expense related to employee and non-employee stock options that is expected to be recognized over a weighted-average period of 3.0 years.

As of June 30, 2022, there was $ 31.5 million of unrecognized stock-based compensation expense related to employee and non-employee stock options that is expected to be recognized over a weighted-average period of 2.9 years.

Restricted Stock Units (“RSUs”)

During the three months ended March 31, 2022, we granted 60,000 RSUs under the 2021 Plan.

A summary of the status of and change in unvested RSUs as of March 31, 2022 was as follows:

During the six months ended June 30, 2022, we granted 60,000 RSUs under the 2021 Plan.

A summary of the status of and change in unvested RSUs as of June 30, 2022 was as follows:

Number of Shares Underlying Outstanding Restricted Stock

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Unvested, January 1, 2022

Unvested, March 31, 2022

As of March 31, 2022, the total unrecognized stock-based compensation expense related to unvested RSUs was $ 0.6 million, which is expected to be recognized over the remaining weighted-average vesting period of 3.8 years.

Unvested, June 30, 2022

As of June 30, 2022, the total unrecognized stock-based compensation expense related to unvested RSUs was $ 0.6 million, which is expected to be recognized over the remaining weighted-average vesting period of 3.6 years.

Employee Stock Purchase Plan (“ESPP”)

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The first offering period commenced on August 16, 2021 and ended on February 15, 2022.

We have issued 36,596 shares of common stock under the ESPP as of March 31, 2022.

We recorded $ 0.1 million in accrued liabilities related to contributions withheld as of March 31, 2022.

We have issued 36,596 shares of common stock under the ESPP as of June 30, 2022.

We recorded $ 0.2 million in accrued liabilities related to contributions withheld as of June 30, 2022.

Stock-Based Compensation Expense

We recorded stock-based compensation expense related to employee and non-employee equity-based awards in our condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2022 and 2021 as follows (in thousands):

Three Months Ended March 31,

We recorded stock-based compensation expense related to employee and non-employee equity-based awards grants in our condensed consolidated statements of operations and comprehensive loss as follows (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Research and development

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The above stock-based compensation expense related to the following equity-based awards (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Stock options

Stock-based compensation expense related to employees was $ 2.9 million and $ 0.3 million for the three months ended March 31, 2022 and 2021, respectively.

Stock-based compensation expense related to non-employees was $ 0.1 million and less than $ 0.1 million for the three months ended March 31, 2022 and 2021, respectively.

Stock-based compensation expense related to employees was $ 2.9 million and $ 0.6 million for the three months ended June 30, 2022 and 2021, respectively.

Stock-based compensation expense related to employees was $ 5.9 million and $ 0.9 million for the six months ended June 30, 2022 and 2021, respectively.

Stock-based compensation expense related to non-employees was less than $ 0.1 million for the three months ended June 30, 2022 and 2021, respectively.

Stock-based compensation expense related to non-employees was $ 0.1 million and less than $ 0.1 million for the six months ended June 30, 2022 and 2021, respectively.

401(k) Savings Plan

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We also provide a 4 % match for employee contributions up to a certain limit.

During the three months ended March 31, 2022 and 2021, we contributed $ 0.2 million and $ 0.1 million, respectively, to our 401(k) plan.

No income tax expense was recorded during the three months ended March 31, 2022 and 2021 due to our operating losses.

During the six months ended June 30, 2022 and 2021, we contributed $ 0.4 million and $ 0.2 million, respectively, to our 401(k) plan.

No income tax expense was recorded during each of the three months and six ended June 30, 2022 and 2021 due to our operating losses.

Net Loss Per Share

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Three Months Ended

Six Months Ended

Weighted-average common shares outstanding used to compute net loss per share, basic and diluted

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Because we were in a net loss position for all periods presented, basic net loss per share is the same as diluted net loss per share for all periods, as the inclusion of all common stock equivalents outstanding would have been anti-dilutive.

Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were, as of March 31, 2022 and 2021 , as follows:

Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:

Convertible preferred stock

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Shares committed under ESPP

Common shares subject to nonrecourse notes

Subsequent Events

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We assume no obligation to revise or update any forward-looking statements for any reason, except as required by law.

We are a clinical-stage CRISPR genome-editing bio pharmaceutical company dedicated to developing innovative, transformative therapies for patients with devastating diseases.

We are a clinical-stage CRISPR genome-editing biopharmaceutical company dedicated to developing innovative, transformative therapies for patients with devastating diseases.

We are advancing a pipeline of allogeneic, or off-the-shelf, CAR-T and CAR-NK cell therapies for the treatment of patients with hematologic malignancies and solid tumors.

Our renowned founders, including a Nobel Prize laureate, are pioneers in the field of CRISPR genome editing.

Our chRDNA technology has demonstrated superior specificity and high efficiency in preclinical studies and enables us to perform multiple, precise genomic edits, while maintaining genomic integrity.

Our lead product candidate, CB-010, is, to our knowledge, the first clinical-stage allogeneic anti-CD19 CAR-T cell therapy with programmed cell death protein 1 (“PD-1”) removed from the CAR-T cell surface by a genome-edited knockout of the PDCD1 gene.

Our chRDNA genome-editing technology has demonstrated superior specificity and high efficiency in preclinical studies and enables us to perform multiple, precise genomic edits, while maintaining genomic integrity.

Our lead product candidate, CB-010, to our knowledge, is the first clinical-stage allogeneic anti-CD19 CAR-T cell therapy with programmed cell death protein 1 (“PD-1”) removed from the CAR-T cell surface by a genome-edited knockout of the PDCD1 gene.

We have demonstrated in preclinical models that the PD-1 knockout improves the persistence of antitumor activity by disrupting a pathway that leads to rapid T cell exhaustion.

CB-010 is being evaluated in our ANTLER phase 1 clinical trial in patients with relapsed or refractory B cell non-Hodgkin lymphoma.

We have announced that the European Hematology Association (“EHA”) has accepted an abstract with initial clinical data from our ANTLER phase 1 trial for the EHA 2022 Hybrid Congress, to be held in Vienna, Austria, in June 2022.

Our CB-011 product candidate is an allogeneic CAR-T cell product candidate that is, to our knowledge, the first anti-BCMA CAR-T cell therapy incorporating an immune cloaking approach that includes both the removal of the endogenous beta-2 microglobulin (“B2M”) protein by a genome-edited knockout of the B2M gene and insertion of a beta-2-microglobulin–human-leukocyte-antigen-E–peptide transgene (“B2M–HLA-E”), enabling expression of HLA-E on the CAR-T cell surface.

We presented initial clinical data from cohort 1 at dose level 1 (40x10 6 CAR-T cells) from our ANTLER trial in June 2022 at the European Hematology Association 2022 Congress, and we expect to share additional clinical data from cohort 1 by the end of 2022.

The ANTLER trial is currently enrolling patients at dose level 2 (80x10 6 CAR-T cells).

Our CB-011 product candidate is an allogeneic CAR-T cell product candidate that targets B cell maturation antigen (“BCMA”).

To our knowledge, it is the first anti-BCMA CAR-T cell therapy incorporating an immune cloaking approach that includes both the removal of the endogenous beta-2 microglobulin (“B2M”) protein by a genome-edited knockout of the B2M gene and insertion of a B2M–human-leukocyte-antigen-E–peptide transgene (“B2M–HLA-E”), enabling expression of HLA-E on the CAR-T cell surface.

This strategy is designed to blunt CAR-T cell rejection by both patient T cells and natural killer (“NK”) cells to enable more durable antitumor activity.

CB-011 is in preclinical development for relapsed or refractory multiple myeloma.

We expect to submit an investigational new drug (“IND”) application for CB-011 in the second half of 2022.

CB-012 is our allogeneic armored CAR-T cell product candidate targeting CD371 (also known as CLL-1), currently in preclinical development for the treatment of relapsed or refractory acute myeloid leukemia (“AML”).

We expect to submit an investigational new drug (“IND”) application for CB-011 in the fourth quarter of 2022.

CB-012 is our allogeneic armored CAR-T cell product candidate targeting CLL-1 (also known as CD371), currently in preclinical development for the treatment of relapsed or refractory acute myeloid leukemia (“AML”).

CLL-1 is an attractive target for AML due to its expression on myeloid cancer cells, its enrichment in leukemic stem cells, and its absence on hematopoietic stem cells.

We expect to submit an IND application for CB-012 in 2023.

CD371 is an attractive target for AML due to its expression on myeloid cancer cells, its enrichment in leukemic stem cells, and its absence on hematopoietic stem cells.

We are also developing allogeneic CAR-NK cell therapies derived from genome-edited iPSCs for the treatment of solid tumors.

CB-020 is our first CAR-NK product candidate and it will contain genome edits designed to overcome some of the challenges of targeting solid tumors, such as trafficking, tumor infiltration, heterogeneity, and the immunosuppressive tumor microenvironment.

We expect to select a tumor cell-surface target for our CB-020 product candidate in 2022.

Also in 2022, we expect to disclose armoring strategies we are developing for our CAR-NK platform.

We expect to select a tumor cell-surface target for our CB-020 product candidate in the fourth quarter of 2022.

Also in the fourth quarter of 2022, we expect to disclose armoring strategies we are developing for our CAR-NK platform.

Since our founding in 2011, we have devoted substantially all of our resources to organizing and staffing, business planning, raising capital, developing our genome-editing platform technologies, developing our product candidates and building our pipeline, creating and maintaining our intellectual property portfolio, and establishing arrangements with third parties for the manufacture and testing of our product candidates.

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and proceeds from our IPO.

In total, we received an aggregate of approximately $321.0 million in net proceeds from our IPO, after deducting underwriting discounts and commissions and offering expenses.

In connection with the closing of our IPO, all outstanding shares of our convertible preferred stock automatically converted into 26,234,654 shares of our common stock.

Our net losses for the three months ended March 31, 2022 and 2021 were $19.1 million and $13.2 million, respectively.

We had an accumulated deficit of $116.9 million as of March 31, 2022.

Our net losses for the three months ended June 30, 2022 and 2021 were $26.7 million and $14.3 million, respectively.

Our net losses for the six months ended June 30, 2022 and 2021 were $45.8 million and $27.5 million, respectively.

We had an accumulated deficit of $143.6 million as of June 30, 2022.

Our net losses and operating losses may fluctuate from quarter to quarter and year to year depending primarily on the timing of our clinical trials and nonclinical studies and our other research and development expenses.

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We do not own or operate any manufacturing facilities and we outsource a substantial portion of our clinical trial studies to third parties.

We use multiple CMOs to individually manufacture, under cGMP, chRDNA guides, Cas proteins, plasmids, and AAV6 vectors used in the manufacture of our CAR-T cells as well as our CAR-NK cell therapy product candidates.

We use multiple CMOs to individually manufacture, under cGMP, chRDNA guides, Cas proteins, plasmids, and AAV6

vectors used in the manufacture of our CAR-T cells as well as our CAR-NK cell therapy product candidates.

We expect to rely on our CMOs for the manufacturing of our product candidates to expedite readiness for future clinical trials, and most of these CMOs have capabilities for commercial manufacturing.

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Impact of the COVID-19 Pandemic and Geopolitical Events

We are unable to predict the effect that the COVID-19 pandemic or geopolitical events, including the conflict in Ukraine, may have on our operations.

We are unable to predict the effect that the COVID-19 pandemic or national or international political events may have on our operations.

To the extent the COVID-19 pandemic or geopolitical events adversely affect our business prospects, financial condition, and results of operation, they may also have the effect of exacerbating many of the other risks described or referenced in the section of our Form 10-K titled “Risk Factors,”

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Each of these payments results in licensing and collaboration revenue.

Revenue under such licensing and collaboration agreements was $2.7 million and $1.6 million for the three months ended March 31, 2022 and 2021, respectively.

Revenue under such licensing and collaboration agreements was $4.2 million and $1.5 million for the three months ended June 30, 2022 and 2021, respectively, and $6.9 million and $3.1 million for the six months ended June 30, 2022 and 2021, respectively.

See Notes 4 and 5 to our condensed consolidated financial statements included elsewhere in this Form 10-Q.

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personnel-related costs, including salaries, benefits, and share-based compensation expense, for our research and development personnel;

allocated facilities and other overhead expenses, including expenses for rent and facilities maintenance and depreciation.

allocated facilities and other overhead expenses, including expenses for rent, facilities maintenance, and depreciation.

We expense research and development costs as incurred.

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expanded indications and patient populations for our products.

The following table summarizes our research and development expenses for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,

The following table summarizes our research and development expenses for the periods indicated:

Three Months Ended June 30,

For the Six Months Ended June 30,

(in thousands)

External costs:

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We accrue for these reimbursements as the respective expenses are incurred and classify such reimbursements as a reduction of general and administrative expenses.

During the three months ended March 31, 2022 and 2021, we recorded $1.5 million and $2.1 million, respectively, of patent cost reimbursements as a reduction to general and administrative expense.

We expect that our general and administrative expenses will increase substantially in the future as a result of expanding our operations, including hiring personnel, preparing for potential commercialization of our product candidates, and additional facility occupancy costs, as well as increased costs associated with operating as a public company (including legal, audit, and accounting fees;

During the three months ended June 30, 2022 and 2021, we recorded $0.7 million and $2.4 million, respectively, of patent cost reimbursements as a reduction to general and administrative expense.

During the six months ended June 30, 2022 and 2021, we recorded $2.1 million and $4.5 million, respectively, of patent cost reimbursements as a reduction to general and administrative expense.

We expect that our general and administrative expenses may increase in the future as a result of expanding our operations, including hiring personnel, preparing for potential commercialization of our product candidates, and additional facility occupancy costs.

In addition, once we cease to be an emerging growth company we expect increased costs associated with operating as a public company (including legal, audit, and accounting fees;

maintaining compliance with the rules and regulations of the SEC and Nasdaq;

director and officer insurance premiums;

investor and public relations activities;

and other accompanying compliance and governance requirements).

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Other Income (Expense)

Other income (expense) consists primarily of interest income earned on cash and marketable securities, change in the fair value of our equity investments, change in fair value of the MSKCC success payments liability under the MSKCC Agreement , and other income from the sale of certain intellectual property rights.

Results of Operations

Comparison of the Three Months Ended March 31, 2022 and 2021

The following table summarizes our results of operations for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,

Comparison of the Three Months Ended June 30, 2022 and 2021

The following table summarizes our results of operations for the periods indicated:

Three Months Ended June 30,

(in thousands)

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Other income (expense)

Interest income

Interest expense

Change in fair value of equity securities

Change in fair value of the MSKCC success payments liability

Gain on extinguishment of PPP Loan

Other income, net

Total other income (expense)

Licensing and Collaboration Revenue

Licensing and collaboration revenue increased by $1.1 million, or 68%, to $2.7 million for the three months ended March 31, 2022 from $1.6 million for the three months ended March 31, 2021.

We recognized $0.9 million related to the AbbVie Agreement for the three months ended March 31, 2022 and no revenue was recognized under this agreement for the three months ended March 31, 2021.

The remaining increase was primarily related to other license agreements with various other licensees.

The following table summarizes our revenue by licensee for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,

Licensing and collaboration revenue increased by $2.7 million, or 184%, to $4.2 million for the three months ended June 30, 2022 from $1.5 million for the three months ended June 30, 2021.

This increase was primarily related to increases of $2.4 million related to recognition of revenue under the AbbVie Agreement and $0.4 million related to other license agreements with various licensees.

The following table summarizes our revenue by licensee for the periods indicated:

Three Months Ended June 30,

(in thousands)

Other licensing agreements

Other licensees

Total licensing revenue

Research and Development Expenses

Research and development expenses increased by $3.8 million, or 37%, to $13.9 million for the three months ended March 31, 2022 from $10.2 million for the three months ended March 31, 2021.

This increase was primarily related to increases of $3.2 million in personnel-related expenses (which includes an increase in stock-based compensation expense of $0.9 million), $1.1 million in external clinical trial-related activities and contract manufacturing for our product candidates, and $0.7 million in other facilities and allocated expenses, partially offset by decreases of $0.9 million in expenses related to licensing, sublicensing revenue, and milestones and $0.4 million in other research and development expenses.

Research and development expenses increased by $10.3 million, or 83%, to $22.6 million for the three months ended June 30, 2022 from $12.3 million for the three months ended June 30, 2021.

This increase was primarily related to increases of $6.0 million in external activities related to our ANTLER phase 1 clinical trial and contract manufacturing for CB-010 and our preclinical product candidates;

$3.3 million in other research and development expenses to advance IND-enabling studies for CB-011 and preclinical research for additional programs, as well as other consulting services related to research and development;

$2.5 million in personnel-related expenses (which include an increase in stock-based compensation expense of $0.7 million) due to incremental hiring;

and $0.6 million in other facilities and allocated expenses;

partially offset by a decrease of $2.1 million in expenses related to licensing, sublicensing revenue, and milestones.

General and Administrative Expenses

General and administrative expenses increased by $5.0 million, or 109%, to $9.6 million for the three months ended March 31, 2022 from $4.6 million for the three months ended March 31, 2021.

This increase was primarily related to increases of $3.2 million in personnel-related expenses (which includes an increase in stock-based compensation expense of $1.8 million), $1.7 million in legal, accounting, insurance, and other expenses associated with being a public company, and $0.7 million in facilities and other allocated expenses, partially offset by a $0.6 million decrease in patent prosecution and maintenance costs.

General and administrative expenses increased by $4.9 million, or 96%, to $10.0 million for the three months ended June 30, 2022 from $5.1 million for the three months ended June 30, 2021.

This increase was primarily related to increases of $3.3 million in personnel-related expenses (which include an increase in stock-based compensation expense of $1.6 million) due to incremental hiring;

$1.1 million in facilities and other allocated expenses;

and $0.8 million in legal, accounting, insurance, and other expenses associated with being a public company;

partially offset by a $0.3 million decrease in patent cost reimbursements.

Total Other Income (Expense)

We recognized other income related to the change in the fair value of the MSKCC success payments liability in the amount of $1.6 million for the three months ended March 31, 2022.

Interest income recognized during the three months ended March 31, 2022 increased to $0.3 million from less than $0.1 million during the three months ended March 31, 2021 due to the increase in holdings of marketable securities.

No income tax benefit or expense was recognized for the three months ended March 31, 2022 and 2021.

We recognized other income related to the change in the fair value of the MSKCC success payments liability in the amount of $1.1 million for the three months ended June 30, 2022.

The PPP Loan was forgiven in May 2021, and we recognized gain on the PPP Loan extinguishment of $1.6 million for the three months ended June 30, 2021.

No such gain was recognized for the three months ended June 30, 2022.

Other income, net during the three months ended June 30, 2022 increased to $0.6 million from less than $0.1 million during the three months ended June 30, 2021 primarily due to an increase in interest income related to increased market rates and growth of our marketable securities portfolio.

Comparison of the Six Months Ended June 30, 2022 and 2021

The following table summarizes our results of operations for the periods indicated:

Six Months Ended June 30,

(in thousands)

Licensing and collaboration revenue

Operating expenses

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense)

Change in fair value of equity securities

Change in fair value of the MSKCC success payments liability

Gain on extinguishment of PPP Loan

Other income, net

Total other income (expense)

Licensing and Collaboration Revenue

Licensing and collaboration revenue increased by $3.8 million, or 124%, to $6.9 million for the six months ended June 30, 2022 from $3.1 million for the six months ended June 30, 2021.

This increase was primarily related to increases of $3.3 million related to recognition of revenue under the AbbVie Agreement and $0.5 million related to other license agreements with various licensees.

The following table summarizes our revenue by licensee for the periods indicated:

Six Months Ended June 30,

(in thousands)

Other licensees

Total licensing revenue

Research and Development Expenses

Rese arch and development expenses increased by $14.0 million, or 62%, to $36.5 million for the six months ended June 30, 2022 from $22.5 million for the six months ended June 30, 2021.

This increase was primarily related to increases of $7.2 million in external activities related to our ANTLER phase 1 clinical trial and contract manufacturing for CB-010 and our preclinical product candidates;

$5.7 million in personnel-related expenses (which include an increase in stock-based compensation expense of $1.6 million) due to incremental hiring;

$3.4 million in other research and development expenses to advance IND-enabling studies for CB-011 and preclinical research for additional programs, as well as other consulting services related to research and development;

and $1.3 million in other facilities and allocated expenses;

partially offset by a decrease of $3.6 million in expenses related to licensing, sublicensing revenue, and milestone s.

General and Administrative Expenses

General and administrative expenses increased by $9.9 million, or 102%, to $19.6 million for the six months ended June 30, 2022 from $9.7 million for the six months ended June 30, 2021.

This increase was primarily related to increases of $6.4 million in personnel-related expenses (which include an increase in stock-based compensation expense of $3.4 million) due to incremental hiring;

$2.7 million in facilities and other allocated expenses;

and $1.8 million in legal, accounting, insurance, and other expenses associated with being a public company;

partially offset by a $0.9 million decrease in patent cost reimbursements.

Other Income (Expense)

We recognized other income related to the change in the fair value of the MSKCC success payments liability in the amount of $2.6 million for the six months ended June 30, 2022.

The PPP Loan was forgiven in May 2021, and we recognized gain on the PPP Loan extinguishment of $1.6 million for the six months ended June 30, 2021.

No such gain was recognized for the six months ended June 30, 2022.

Other income, net during the six months ended June 30, 2022 increased to $0.9 million from less than $0.1 million during the six months ended June 30, 2021 primarily due to an increase in interest income related to increased market rates and growth of our marketable securities portfolio.

Liquidity, Capital Resources, and Capital Requirements

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We have also received approximately $88.4 million in net proceeds from the sale of Intellia common stock that we received under the Intellia Agreement.

Additionally, through March 31, 2022, we received approximately $78.0 million from licensing agreements, licensing and collaboration agreements, a service agreement, patent assignments, and government grants, including $30.2 million that was received from AbbVie under the AbbVie Agreement.

As of March 31, 2022, we had cash, cash equivalents, and marketable securities of $390.8 million.

In March 2021, we received net proceeds of $108.8 million from our Series C convertible preferred stock financing and an upfront payment of $30.0 million from AbbVie under the AbbVie Agreement.

In July and August 2021, we received aggregate net proceeds of approximately $321.0 million from our IPO.

Additionally, through June 30, 2022, we received approximately $79.4 million from licensing agreements, licensing and collaboration agreements, a service agreement, patent assignments, and government grants, including $30.4 million that was received from AbbVie under the AbbVie Agreement.

As of June 30, 2022, we had cash, cash equivalents, and marketable securities of $366.1 million.

We will continue to be dependent upon equity financing, debt financing, collaborations and licensing arrangements, and/or other forms of capital raises at least until we are able to generate significant positive cash flows from our operations.

We have no ongoing material financing commitments, such as lines of credit or guarantees, that are expected to affect our liquidity over the next five years, except for our lease commitments as described in Note 9 to our condensed consolidated financial statements included elsewhere in this Form 10-Q .

Based on our current operating plan, we expect that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the date of this Form 10-Q.

We have no current ongoing material financing commitments, such as lines of credit or guarantees, that are expected to affect our liquidity over the next five years, except for our lease commitments as described in Note 9 to our condensed consolidated financial statements included elsewhere in this Form 10-Q, and payments under certain of our license agreements as described in Note 4 to our condensed consolidated financial statements included elsewhere in this Form 10-Q.

Based on our current operating plan, we expect that our existing cash and cash equivalents will enable us to fund our current operating plan for at least the next 12 months from the date of this Form 10-Q.

We have based these estimates on our current assumptions, which may require future adjustments based on our ongoing business decisions.

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the impact of the COVID-19 pandemic or geopolitical events on our clinical development or operations;

the impact of inflationary pressures on the cost of our operations;

the costs associated with being a public company.

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If we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish certain valuable rights to our product candidates, technologies, future revenue streams, or research programs or grant licenses on terms that may not be favorable to us.

Comparison of the Three Months Ended March 31, 2022 and 2021

Comparison of the Six Months Ended June 30, 2022 and 2021

The following summarizes our cash flows for the periods indicated:

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

Cash provided by (used in) operating activities

Cash (used in) provided by operating activities

Cash used in investing activities

Cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

Cash Provided by (Used in) Operating Activities

Net cash used in operating activities was $21.7 million for the three months ended March 31, 2022, and net cash provided by operating activities was $20.3 million for the three months ended March 31, 2021.

Cash used in operating activities for the three months ended March 31, 2022 was primarily due to our net loss of $19.1 million, adjusted by non-cash charges of $2.5 million and net changes in our operating assets and liabilities of $5.1 million.

Our non-cash charges were primarily comprised of $3.0 million of stock-based compensation, non-cash lease expense of $0.5 million, amortization of investment premiums of $0.3 million, and $0.3 million of depreciation and amortization expense, which were partially offset by the change in the fair value of the MSKCC success payments liability of $1.6 million.

The changes in our operating assets and liabilities were due to decreases of $0.8 million in accounts receivable and $1.3 million in other receivables, offset by increases in prepaid expenses and other current assets of $1.3 million, other assets of $0.5 million, and increases of $1.9 million in accounts payable, $2.8 million in accrued expenses and other current liabilities, $0.6 million in deferred revenue, and $0.1 million in operating lease liabilities.

Cash provided by operating activities in the three months ended March 31, 2021 was primarily due to a $30.0 million upfront payment received from AbbVie under the AbbVie Agreement and recorded as deferred revenues, partially offset by a net loss of $13.2 million for the three months ended March 31, 2021.

Our non-cash charges were comprised of a change in the fair value of the MSKCC success payments liability of $0.7 million, $0.3 million of stock-based compensation, and $0.2 million of depreciation and amortization expense.

The changes in our net operating assets and liabilities were primarily due to an increase of $3.9 million in accrued expenses and other current liabilities and a $0.4 million decrease in contract assets, partially offset by an increase of $1.1 million in other receivables, an increase of $0.6 million in prepaid expenses and other current assets, and an increase of $0.4 million in other assets.

Net (decrease) increase in cash and cash equivalents

Cash (Used in) Provided by Operating Activities

Net cash used in operating activities was $43.5 million for the six months ended June 30, 2022, and net cash provided by operating activities was $3.8 million for the six months ended June 30, 2021.

Cash used in operating activities for the six months ended June 30, 2022 was primarily due to our net loss of $45.8 million, adjusted by non-cash charges of $5.6 million and net changes in our operating assets and liabilities of $3.4 million.

Our non-cash charges were primarily comprised of $5.9 million of stock-based compensation, non-cash lease expense of $1.0 million, $0.7 million of depreciation and amortization expense, amortization of investment premiums of $0.4 million, and acquired in-process research and development of $0.3 million, which were partially offset by the change in the fair value of the MSKCC success payments liability of $2.6 million.

The changes in our operating assets and liabilities were due to decreases of $0.6 million in accounts receivable and $2.4 million in other receivables, and an increase of $1.1 million in accrued expenses and other current liabilities, offset by increases in contract assets of $0.6 million, prepaid expenses and other current assets of $0.3 million, other assets of $0.3 million, and decreases of $3.6 million in accounts payable, $2.5 million in deferred revenue, and $0.2 million in operating lease liabilities.

Cash provided by operating activities in the six months ended June 30, 2021 was primarily due to our net loss for the year of $27.5 million adjusted by non-cash charges of $2.0 million and net changes in our net operating assets and liabilities of $29.3 million.

Our non-cash charges were comprised of a change in the fair value of success payments liability of $1.2 million, $1.0 million of acquired in-process research development accrued at period end, $0.9 million of stock-based compensation, and $0.5 million of depreciation and amortization expense, which were offset by the PPP Loan extinguishment gain upon the loan forgiveness of $1.6 million.

The changes in our net operating assets and liabilities were due to increases of $31.8 million in deferred revenue, $1.0 million in accounts payable, $1.0 million in accrued expenses and other current liabilities, $0.7 million in deferred rent and lease incentive liability, and a decrease of $0.5 million in contract assets, offset by increases of $3.9 million in other receivables and $1.8 million in prepaid expenses and other current assets.

Cash Used in Investing Activities

During the three months ended March 31, 2022, cash used in investing activities was $72.1 million.

During the three months ended March 31, 2021 cash used in investing activities was less than $0.1 million.

Cash used in investing activities for the three months ended March 31, 2022, was primarily due to purchases of marketable securities of $110.7 million and property and equipment of $0.7 million, partially offset by the proceeds from maturities of marketable securities of $39.3 million.

Cash used in investing activities for the three months ended March 31, 2021 was primarily due to purchases of property and equipment in the amount of less than $0.1 million.

During the six months ended June 30, 2022, cash used in investing activities was $86.1 million.

During the six months ended June 30, 2021 cash used in investing activities was $0.5 million.

Cash used in investing activities for the six months ended June 30, 2022, was primarily due to purchases of marketable securities of $181.8 million and property and equipment of $3.3 million, partially offset by the proceeds from maturities of marketable securities of $99.0 million.

Cash used in investing activities for the six months ended June 30, 2021 was due to our purchases of property and equipment of $0.5 million.

Cash Provided by Financing Activities

During the three months ended March 31, 2022 and 2021, cash provided by financing activities was $1.0 million and $109.7 million, respectively.

Cash provided by financing activities for the three months ended March 31, 2022 was primarily due to exercise of stock options and purchases of common stock under the 2021 ESPP plan of $1.0 million.

Cash provided by financing activities for the three months ended March 31, 2021 was primarily due to our receipt of net proceeds from the issuance of Series C preferred stock in the amount of $109.2 million and proceeds from common stock options exercised of $0.6 million, partially offset by the repayments of capital lease obligation in the amount of $0.1 million.

During the six months ended June 30, 2022 and 2021, cash provided by financing activities was $1.4 million and $110.3 million, respectively.

Cash provided by financing activities for the six months ended June 30, 2022 was due to the exercise of stock options and purchases of common stock under the 2021 ESPP plan of $1.4 million.

Cash provided by financing activities for the six months ended June 30, 2021 was primarily due to our receipt of net proceeds from the issuance of Series C convertible preferred stock in the amount of $108.8 million, proceeds from the exercise of our common stock options of $1.1 million, and repayment of the promissory note issued to the Company’s President and Chief Executive Officer in the amount of $1.2 million, partially offset by principal payments for a capital lease of $0.1 million and payment of deferred issuance costs of $0.7 million.

Critical Accounting Policies and Significant Judgments and Estimates

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Since the date of such financial statements, there have been no material changes to our significant accounting policies other than those described in Note 2 to our condensed consolidated financial statements included elsewhere in this Form 10-Q.

There have been no material changes to our critical accounting estimates as compared to those disclosed in our Form 10-K.

Recently Issued Accounting Pronouncements

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We believe the fair value of the indemnification rights and agreements is minimal.

Accordingly, we have not recorded any liabilities for these indemnification rights and agreements as of March 31, 2022.

Accordingly, we have not recorded any liabilities for these indemnification rights and agreements as of June 30, 2022.

Emerging Growth Company Status

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We expect to use the extended transition period for any other new or revised accounting standards during the period in which we remain an emerging growth company.

As described in Note 2 to our condensed consolidated financial statements included elsewhere in this Form 10-Q, we have early adopted multiple accounting standards, because the JOBS Act does not preclude an emerging growth company from adopting a new or revised accounting standard earlier than the time that such standard applies to private companies, to the extent early adoption is allowed by the accounting standard.

As described in Note 2 to our condensed consolidated financial statements included elsewhere in this Form 10-Q, we have early adopted certain accounting standards, because the JOBS Act does not preclude an emerging growth company from adopting a new or revised accounting standard earlier than the time that such standard applies to private companies, to the extent early adoption is allowed by the accounting standard.

Quantitative and Qualitative Disclosures about Market Risk.

There have been no material changes to the Company’s market risk during the three months ended March 31, 2022.

There have been no material changes to the Company’s market risk during the six months ended June 30, 2022.

For a discussion of the Company’s exposure to market risk, refer to the section titled “Quantitative and Qualitative Disclosures About Market Risk”

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements