What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-07 compared with 2023-11-07 · 217 added, 278 removed, 386 unchanged (56% of the section changed)

4 unchanged sentences

(in thousands, except share and per share amounts)

September 30,

2024 December 31,

18 unchanged sentences

Accrued expenses and other current liabilities 18,990 21,135

Lease liabilities, current 1,139 966

Operating lease liabilities, current

Deferred revenue ($ 2,487 and $ 2,487 from related party, respectively)

3 unchanged sentences

MSKCC success payments liability 2,636 2,939

Lease liabilities, non-current 26,316 26,780

Operating lease liabilities, non-current

25,895 25,908

Deferred tax liabilities 556 557

2 unchanged sentences

STOCKHOLDERS’ EQUITY

Preferred stock, par value $ 0.0001 per share, 10,000,000 shares authorized at September 30, 2023 and December 31, 2022;

no shares issued and outstanding as of September 30, 2023 and December 31, 2022

Common stock, par value $ 0.0001 per share, 300,000,000 shares authorized at September 30, 2023 and December 31, 2022, respectively;

88,430,609 and 61,029,184 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

Common stock, par value $ 0.0001 per share, 300,000,000 shares authorized at March 31, 2024, and December 31, 2023, respectively;

90,314,501 and 88,448,948 shares issued and outstanding as of March 31, 2024, and December 31, 2023, respectively

Additional paid-in-capital 684,121 667,648

Accumulated other comprehensive loss ( 981 ) ( 1,518 )

Accumulated other comprehensive (loss) income

Accumulated deficit ( 340,519 ) ( 299,285 )

6 unchanged sentences

(in thousands, except share and per share amounts)

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Licensing and collaboration revenue (including $ 622 and $ 1,772 for three and nine months ended September 2023, respectively, from related parties, and none for all other periods)

Three Months Ended March 31,

Licensing and collaboration revenue (including $ 622 and $ 0 , from a related party, respectively)

$ 2,429 $ 3,502

8 unchanged sentences

Other income, net 4,465 2,832

Total other income (expense)

4,631 ( 110 ) 11,052 3,389

Total other income

Net loss ( 41,234 ) ( 28,044 )

Other comprehensive income (loss):

Net unrealized gain (loss) on available-for-sale marketable securities, net of tax 155 ( 454 ) 537 ( 1,900 )

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

Net comprehensive loss $ ( 41,586 ) $ ( 27,256 )

7 unchanged sentences

Common Stock Additional Paid-In

Capital Accumulated Other Comprehensive

Loss Accumulated

Capital Accumulated Other Comprehensive Income

Deficit Total Stockholders’ Equity

1 unchanged sentence

BALANCE—December 31, 2023 88,448,948 $ 8 $ 667,648 $ 30 $ ( 299,285 ) $ 368,401

Issuance of common stock under employee stock plans 70,271 — 404 — — 404

Issuance of common stock on exercise of options 55,433 — 115 — — 115

Issuance of common stock in connection with at-the-market offering, net of offering expenses 168,635 — 1,007 — — 1,007

Stock-based compensation expense — — 3,131 — — 3,131

Net loss — — — — ( 28,044 ) ( 28,044 )

Other comprehensive income — — — 788 — 788

BALANCE—March 31, 2023 61,323,523 $ 6 $ 504,255 $ ( 730 ) $ ( 225,259 ) $ 278,272

Issuance of common stock on exercise of options 86,085 — 236 — — 236

Issuance of common stock pursuant to a private placement with Pfizer 4,690,431 — 17,290 — — 17,290

Stock-based compensation expense — — 3,585 — — 3,585

Net loss — — — — ( 29,519 ) ( 29,519 )

Other comprehensive loss — — — ( 406 ) — ( 406 )

BALANCE—June 30, 2023 66,100,039 $ 6 $ 525,366 $ ( 1,136 ) $ ( 254,778 ) $ 269,458

Issuance of common stock under employee stock plans

Issuance of common stock upon employee stock plans

122,035 — 667 — — 667

Issuance of common stock on exercise of options 134,347 — 489 — — 489

Issuance of common stock on RSU release

Issuance of common stock in connection with our at-the-market equity offering program, net of offering expenses

1,594,171 1 11,329 — — 11,330

Issuance of common stock in connection with follow-on public offering, net of offering expenses

Issuance of common stock on RSU release

15,000 — — — — —

1 unchanged sentence

Net loss — — — — ( 41,234 ) ( 41,234 )

Other comprehensive income — — — 155 — 155

BALANCE—September 30, 2023 88,430,609 $ 8 $ 664,021 $ ( 981 ) $ ( 264,780 ) $ 398,268

Other comprehensive loss — — — ( 352 ) — ( 352 )

BALANCE—March 31, 2024 90,314,501 $ 9 $ 684,121 $ ( 322 ) $ ( 340,519 ) $ 343,289

BALANCE—December 31, 2022 61,029,184 $ 6 $ 499,598 $ ( 1,518 ) $ ( 197,215 ) $ 300,871

1 unchanged sentence

Issuance of common stock on exercise of options 55,433 — 115 — — 115

Issuance of common stock in connection with our at-the-market equity offering program, net of offering expenses

168,635 — 1,007 — — 1,007

Stock-based compensation expense — — 3,131 — — 3,131

Net loss — — — — ( 28,044 ) ( 28,044 )

Other comprehensive loss — — — ( 954 ) — ( 954 )

Other comprehensive income — — — 788 — 788

BALANCE—March 31, 2023 61,323,523 $ 6 $ 504,255 $ ( 730 ) $ ( 225,259 ) $ 278,272

Issuance of common stock on exercise of options 148,761 — 363 — — 363

Stock-based compensation expense — — 2,918 — — 2,918

Net loss — — — — ( 26,697 ) ( 26,697 )

Other comprehensive loss — — — ( 492 ) — ( 492 )

BALANCE—June 30, 2022 60,838,370 $ 6 $ 493,043 $ ( 1,581 ) $ ( 143,579 ) $ 347,889

Issuance of common stock on exercise of options 148,566 — 654 — — 654

Stock-based compensation expense — — 2,672 — — 2,672

Net loss — — — — ( 26,647 ) ( 26,647 )

Other comprehensive loss

— — — ( 454 ) — ( 454 )

BALANCE—September 30, 2022 60,986,936 $ 6 $ 496,369 $ ( 2,035 ) $ ( 170,226 ) $ 324,114

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

3 unchanged sentences

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

3 unchanged sentences

Gain on disposal of fixed assets — ( 34 )

Non-cash consideration for licensing and collaboration revenue ( 61 ) ( 205 )

Change in fair value of equity securities — 15

2 unchanged sentences

Acquired in-process research and development 1,500 —

(Accretion of discounts) and amortization of premiums on investments, net ( 6,042 ) 106

Accretion of discounts on investments in marketable securities, net

( 1,539 ) ( 1,494 )

Non-cash lease expense 524 515

9 unchanged sentences

Operating lease liabilities 51 ( 323 )

Other liabilities — ( 15 )

Net cash used in operating activities ( 37,203 ) ( 27,939 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sales and maturities of marketable securities 283,193 163,130

Proceeds from maturities of marketable securities

97,088 98,665

Purchases of marketable securities ( 71,184 ) ( 75,931 )

1 unchanged sentence

Payments to acquire in-process research and development ( 1,500 ) —

Net cash used in investing activities ( 36,709 ) ( 94,419 )

Net cash provided by investing activities 22,956 20,703

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from follow-on public offering, net of offering expenses

Proceeds from issuance of common stock in a private placement with Pfizer 17,290 —

Proceeds from exercise of stock options and purchases of common stock under employee stock purchase plan 1,508 2,006

Proceeds from issuance of common stock related to at-the-market offering, net of offering expenses 1,007 —

Proceeds from exercise of stock options

Proceeds from purchases of common stock under employee stock purchase plan

Proceeds from issuance of common stock related to our at-the-market equity offering program, net of offering expenses

Net cash provided by financing activities 12,485 1,642

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 45,720 ( 158,335 )

NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 1,762 ) ( 5,594 )

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — BEGINNING OF PERIOD 51,208 58,384

3 unchanged sentences

Restricted cash 46 46

TOTAL CASH, CASH EQUIVALENTS, AND RESTRICTED CASH $ 104,104 $ 82,131

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for income taxes $ 170 $ —

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

$ 49,446 $ 52,790

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

1 unchanged sentence

Offering costs included in accrued expenses $ — $ 116

Right-of-use-assets obtained in exchange for new operating lease liabilities $ — $ 26,249

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

5 unchanged sentences

Caribou Biosciences, Inc.

(the “Company” or “we”) is a clinical-stage C lustered R egularly I nterspaced S hort P alindromic R epeats (“CRISPR”) genome-editing biopharmaceutical company dedicated to developing transformative therapies for patients with devastating diseases.

Our genome-editing platform, including our novel chRDNA ( C RISPR h ybrid R NA- DNA , or “chRDNA,” pronounced “chardonnay”) technology, enables superior editing precision to develop cell therapies that are armored to improve antitumor activity.

(“Company” or “we”) is a clinical-stage C lustered R egularly I nterspaced S hort P alindromic R epeats (“CRISPR”) genome-editing biopharmaceutical company dedicated to developing transformative therapies for patients with devastating diseases.

Our genome-editing platform, including our novel chRDNA ( C RISPR h ybrid R NA- DNA , or “chRDNA,” pronounced “chardonnay”) technology, enables more precise genome editing to develop cell therapies that are armored to improve activity against diseases.

We are advancing a pipeline of allogeneic, or off-the-shelf, cell therapies from our chimeric antigen receptor (“CAR”) T (“CAR-T”) cell and CAR-natural killer (“CAR-NK”) cell platforms as readily available therapeutic treatments for patients.

6 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 $ 264.8 million as of September 30, 2023.

During the nine months ended September 30, 2023, we incurred a net loss of $ 67.6 million and used $ 71.9 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, regulatory approval, and commercialization of our product candidates and on our generation of sufficient revenue to support our cost structure.

We have incurred operating losses and negative cash flows from operations since our inception and we had an accumulated deficit of $ 340.5 million as of March 31, 2024.

During the three months ended March 31, 2024, we incurred a net loss of $ 41.2 million and used $ 37.2 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, regulatory approval, and commercialization of our product candidates and on our ability to generate 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 $ 396.7 million as of September 30, 2023, 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.

In July and August of 2023, we issued and sold a total of 22,115,384 shares of our common stock in an underwritten follow-on public offering for total net proceeds of approximately $ 134.4 million, which included the full exercise of the underwriters’ right to purchase 2,884,615 additional shares of our common stock.

Our management expects that existing cash, cash equivalents, and marketable securities of $ 345.9 million as of March 31, 2024, will be sufficient to fund our current operating plan for at least the next 12 months from the date of issuance of our unaudited condensed consolidated financial statements.

Summary of Significant Accounting Policies

1 unchanged sentence

Basis of Presentation and Principles of Consolidation

The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.

GAAP”) and include the accounts of Caribou Biosciences, Inc.

and its wholly owned subsidiaries.

Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.

GAAP”) and include our accounts and the accounts of our wholly owned subsidiaries.

All intercompany accounts and transactions are eliminated in consolidation.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S.

The preparation of unaudited condensed consolidated financial statements in conformity with U.S.

GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities;

the disclosure of contingent assets and liabilities at the date of our condensed consolidated financial statements;

the disclosure of contingent assets and liabilities at the date of our unaudited condensed consolidated financial statements;

and the reported amounts of revenue, income, and expenses during the applicable reporting period.

On an ongoing basis, we evaluate our estimates and assumptions, including those related to revenue recognition, common stock valuation, stock-based compensation expense, accrued expenses related to research and development activities, valuation of the Memorial Sloan Kettering Cancer Center (“MSKCC”) success payments liability, and income taxes.

Our management bases its estimates on historical experience and on various other assumptions that they believe to be reasonable under the circumstances, the results of which form the

basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

On an ongoing basis, we evaluate our estimates and assumptions, including those related to revenue recognition, stock-based compensation expense, accrued expenses related to research and development activities, valuation of the Memorial Sloan Kettering Cancer Center (“MSKCC”) success payments liability, operating lease right-of-use assets and liabilities, and income taxes.

Our management bases its estimates on historical experience and various other assumptions that they believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results may differ materially from those estimates.

4 unchanged sentences

Financial instruments that potentially subject us to concentration of credit risk consist of cash and cash equivalents, accounts receivable, contract assets, other receivables, and investments in marketable securities and equity securities.

Substantially all of our cash and cash equivalents are deposited in accounts at two financial institutions, and our account balances exceed federally insured limits.

Substantially all of our cash and cash equivalents are deposited in accounts at four financial institutions, and our account balances exceed federally insured limits.

We mitigate the risks by investing in high-grade instruments, limiting our exposure to one issuer, and we monitor the ongoing creditworthiness of the financial institutions and issuers.

2 unchanged sentences

Contract Assets

Three Months Ended

Nine Months Ended As of

September 30,

September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

Three Months Ended As of

March 31, 2024 March 31, 2023

Licensee A 25.3 % 17.6 % 29.5 % *

Licensee B 23.1 % 22.0 % 36.6 % 47.5 %

Licensee C — % 45.9 % — % *

25.6 % — % — % *

Total 74.0 % 85.5 % 66.1 % 47.5 %

*Less than 10%

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

No allowance for credit losses or contract asset impairment was recorded as of September 30, 2023, or December 31, 2022.

Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments–Credit Losses:

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

This ASU provides guidance on the measurement of credit losses for most financial assets and certain other instruments that are not measured at fair value through net income.

ASU 2016-13 replaces the current incurred loss impairment approach with a methodology to reflect expected credit losses and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates.

This ASU is to be applied on a modified retrospective approach and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, and interim reporting periods within fiscal years beginning after December 15, 2023.

Early adoption is permitted for all entities for fiscal years beginning after December 15, 2018, and interim periods therein.

We adopted ASU 2016-13 on January 1, 2023.

The impact of ASU 2016-13 on our financial statements and related disclosures was not material.

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

No allowance for credit losses or contract asset impairment was recorded as of March 31, 2024, or December 31, 2023.

Recent Accounting Pronouncements Not Yet Adopted

In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-06, Disclosure Improvements:

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.

This ASU aligns the requirements in the Accounting Standards Codification (“ASC”) to the removal of certain disclosure requirements set out in Regulation S-X and Regulation S-K, announced by the U.S.

Securities and Exchange Commission (“SEC”).

The effective date for each amended topic in the ASC is either the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective or June 30, 2027, if the SEC has not removed the requirements by that date.

Early adoption is prohibited.

We are currently evaluating the impact of the new guidance and do not expect that the adoption of ASU 2023-06 will have a material impact on our consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

This ASU requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis.

Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the impact of the adoption of ASU 2023-07.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

This ASU requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the impact of the adoption of ASU 2023-09.

In March 2024, the FASB issued ASU No.

2024-01, Compensation - Stock Compensation (Topic 718):

Scope Application of Profits Interest and Similar Awards.

The amendments in ASU 2024-01 improve consistent application of and simplify U.S.

GAAP of Topic 718 by clarifying and amending existing guidance.

ASU 2024-01 is effective for fiscal years beginning after December 15, 2024, and for interim periods within those annual periods, with early adoption permitted.

We are currently evaluating the impact of the adoption of ASU 2024-01.

In March 2024, the FASB issued ASU No.

2024-02, Codification Improvements - Amendments to Remove References to the Concepts Statements.

The amendments in ASU 2024-02 clarify and simplify references to certain concept statements within U.S.

ASU 2024-02 is effective for fiscal years beginning after December 15, 2024, with early application permitted.

We are currently evaluating the impact of the adoption of ASU 2024-02.

Fair Value Measurements and Fair Value of Financial Instruments

6 unchanged sentences

Our financial instruments consist of Level 1, Level 2, and Level 3 financial instruments.

We generally classify our marketable securities as Level 2.

We generally classify our marketable securities as Level 1 or Level 2.

Instruments are classified as Level 2 when observable market prices for identical securities that are traded in less active markets are used.

3 unchanged sentences

For certain security types, additional inputs may be used, or some of the standard inputs may not be applicable.

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.

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 nine months ended September 30, 2023, and 2022.

No such transfers occurred during the three months ended March 31, 2024, and 2023.

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

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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 September 30, 2023

Fair Value Measurements as of March 31, 2024

Total Level 1 Level 2 Level 3

1 unchanged sentence

$ 239,369 $ 239,369 $ — $ —

Commercial paper ($ 23,858 included in cash and cash equivalents)

51,462 — 51,462 —

government agency bonds 33,073 — 33,073 —

Money market fund investments (included in cash and cash equivalents) 11,638 11,638 — —

Commercial paper 20,546 — 20,546 —

Corporate debt securities 10,384 — 10,384 —

4 unchanged sentences

Total Level 1 Level 2 Level 3

Treasury bills ($ 23,527 included in cash and cash equivalents)

$ 262,439 $ 262,439 $ — $ —

Commercial paper ($ 9,759 included in cash and cash equivalents)

40,373 — 40,373 —

Treasury bills 91,966 91,966 — —

government agency bonds ($ 3,976 included in cash and cash equivalents)

government agency bonds

40,185 — 40,185 —

Corporate debt securities 36,819 — 36,819 —

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

17,876 17,876 — —

Corporate debt securities

11,531 — 11,531 —

Total fair value of assets $ 372,404 $ 280,315 $ 92,089 $ —

1 unchanged sentence

Total fair value of liabilities $ 2,939 $ — $ — $ 2,939

The fair value and amortized cost of cash equivalents and available-for-sale marketable securities by major security type as of September 30, 2023, and December 31, 2022 are presented in the following tables (in thousands):

As of September 30, 2023

The fair value and amortized cost of cash equivalents and available-for-sale marketable securities by major security type as of March 31, 2024, and December 31, 2023 are presented in the following tables (in thousands):

As of March 31, 2024

Treasury bills ($ 13,904 included in cash and cash equivalents)

$ 239,568 $ 12 $ ( 211 ) $ 239,369

Commercial paper ($ 23,858 included in cash and cash equivalents)

51,491 — ( 29 ) 51,462

government agency bonds 33,159 — ( 86 ) 33,073

Money market investments (included in cash equivalents) 19,556 — — 19,556

Commercial paper 20,549 — ( 3 ) 20,546

Money market fund investments (included in cash equivalents)

11,638 — — 11,638

Corporate debt securities 10,393 7 ( 16 ) 10,384

6 unchanged sentences

As of December 31, 2023

Commercial paper ($ 26,669 included in cash equivalents)

Treasury bills ($ 23,527 included in cash and cash equivalents)

$ 262,328 $ 331 $ ( 220 ) $ 262,439

Treasury bills 92,910 1 ( 945 ) 91,966

government agency bonds ($ 3,976 included in cash and cash equivalents)

Commercial paper ($ 9,759 included in cash and cash equivalents)

40,386 — ( 13 ) 40,373

government agency bonds

40,295 1 ( 111 ) 40,185

Money market fund investments (included in cash equivalents)

17,876 — — 17,876

Corporate debt securities

Money market investments (included in cash equivalents) 27,693 — — 27,693

11,489 50 ( 8 ) 11,531

Total cash equivalents and marketable securities $ 372,374 $ 382 $ ( 352 ) $ 372,404

4 unchanged sentences

Total cash equivalents and marketable securities $ 372,404

The following table presents the fair value of available-for-sale marketable securities by contractual maturities (in thousands):

March 31, 2024

Due in less than one year $ 244,588

Due in one to five years 51,938

Total $ 296,526

The following table sets forth a summary of the changes in the fair value of our Level 3 financial liability (in thousands):

2 unchanged sentences

Change in fair value ( 303 )

Balance at September 30, 2023 $ 1,256

Balance at March 31, 2024 $ 2,636

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.

We recorded a $ 0.1 million and $ 1.6 million change in the fair value of the MSKCC success payments liability as a loss in other income (expense) in our condensed consolidated statements of operations for the three months ended September 30, 2023, and 2022, respectively.

We recorded $ 0.4 million and $ 1.0 million change in fair value of the MSKCC success payments liability as a gain in other income (expense) in our condensed consolidated statements of operations for the nine months ended September 30, 2023, and 2022, respectively.

As of December 31, 2022, we utilized a Monte Carlo simulation model that models the future movement of stock prices based on several key variables.

This model requires significant estimates and assumptions in determining the estimated fair value of the MSKCC success payments liability at each balance sheet date.

The assumptions used to calculate the fair value of the MSKCC success payments liability are subject to a significant amount of judgment including the expected volatility that was estimated using available information about the historical volatility of stocks of publicly traded companies that are similar to us, the estimated term, and the estimated number and timing of valuation measurement dates.

The table below summarizes key assumptions used in the valuation of MSKCC success payments liability:

We recorded a $ 0.3 million and $ 0.3 million change in the fair value of the MSKCC success payments liability as a gain in other income (expense) in our unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2024, and 2023, respectively.

The table below summarizes key assumptions used in the valuation of the MSKCC success payments liability:

Fair value of common stock $ 5.73

4 unchanged sentences

Expected term (years) 3.7 to 5.2

(1) MSKCC is entitled to certain success payments if our common stock fair value increases by certain multiples of value based on a comparison of the fair market value of our common stock to $ 5.1914 per share, adjusted for any future stock splits (the “Initial Share Price”), during a specified time period.

(1) MSKCC is entitled to certain success payments if our common stock fair value increases, during a specified time period, by certain multiples of value based on a comparison of the fair market value of our common stock to $ 5.1914 per share, adjusted for any future stock splits (“Initial Share Price”).

For further information regarding our agreement with MSKCC, see Note 4 to the consolidated financial statements included in our Form 10-K.

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 risk-free interest rate, expected volatility, and expected term assumptions depend on the estimated initiation of our AMpLify phase 1 clinical trial for our CB-012 product candidate utilizing the know-how, biological materials, and intellectual property licensed under the Exclusive License Agreement, dated November 13, 2020, with MSKCC (the “MSKCC Agreement”) and the estimated timing of marketing approval for this product candidate from the U.S.

The risk-free interest rate, expected volatility, and expected term assumptions depend on the time period from the initiation of our AMpLify phase 1 clinical trial for our CB-012 product candidate utilizing the know-how, biological materials, and intellectual property licensed under the Exclusive License Agreement, dated November 13, 2020, with MSKCC (“MSKCC Agreement”) until the estimated timing of marketing approval for this product candidate from the U.S.

Food and Drug Administration (“FDA”).

In addition, we incorporated the estimated number and timing of valuation measurement dates in the calculation of the MSKCC success payments liability.

As of September 30, 2023, we did not note any significant changes to the inputs used in the MSKCC success payments liability fair value calculation, other than a change in the fair value of our common stock to $ 4.78 per share.

As of March 31, 2024, we did not note any significant changes to the inputs used in the MSKCC success payments liability fair value calculation, other than a change in the fair value of our common stock to $ 5.14 per share.

Significant Agreements

Since December 31, 2022, there have been no material changes to the key terms of our significant agreements other than the termination notice we received from AbbVie Manufacturing Management Unlimited Company (“AbbVie”) for the Collaboration and License Agreement (as amended, the “AbbVie Agreement”) under which we were developing two allogeneic CAR-T cell therapies for AbbVie.

For further information regarding our significant agreements, including the AbbVie Agreement, see Note 4 to the consolidated financial statements included in our Form 10-K.

See Note 7 to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for additional information on our agreements with Pfizer, Inc.

(“Pfizer”), which we entered into on June 29, 2023.

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

On September 26, 2023, we received notice from AbbVie that AbbVie elected to terminate the AbbVie Agreement.

By mutual agreement with AbbVie, termination of the AbbVie Agreement became effective on October 25, 2023.

Due to receipt of the termination notice, we stopped performing preclinical research and development services under the AbbVie Agreement and determined that our performance obligation to AbbVie was substantially completed as of September 30, 2023.

Consequently, the remaining $ 20.8 million of deferred revenue from the upfront cash payment was recognized during the three months ended September 30, 2023.

During the three months ended September 30, 2023, we recognized $ 21.5 million in licensing and collaboration revenue associated with the AbbVie Agreement, of which $ 20.8 million had been included in deferred revenue as of the beginning of the period.

During the nine months ended September 30, 2023, we recognized $ 24.5 million in licensing and collaboration revenue associated with the AbbVie Agreement.

For the three and nine months ended September 30, 2022, we recognized $ 1.7 million and $ 5.5 million in revenue associated with the AbbVie Agreement, respectively.

As of September 30, 2023, we had recorded $ 1.0 million in accounts receivable and, as of December 31, 2022, we had recorded no amounts in accounts receivable in our condensed consolidated balance sheets relating to the AbbVie Agreement.

As of September 30, 2023, and December 31, 2022, we had $ 0.7 million and $ 0.9 million, respectively, in contract assets in our condensed consolidated balance sheet and consolidated balance sheet, respectively, relating to the AbbVie Agreement.

We enter into agreements with third parties to in-license intellectual property and related materials and know-how.

These agreements may include nonrefundable, upfront payments;

Since December 31, 2023, there have been no material changes to the key terms of our significant agreements.

For further information regarding our significant agreements, see Note 4 to the consolidated financial statements included in our Form 10-K.

During the three months ended March 31, 2023, we recognized $ 1.6 million in revenue associated with the now-terminated Collaboration and License Agreement, dated February 9, 2021 (as amended, “AbbVie Agreement”) with AbbVie Manufacturing Management Unlimited Company (“AbbVie”).

No revenue was recognized under the AbbVie Agreement during the three months ended March 31, 2024, as the AbbVie Agreement was terminated effective October 25,

As of March 31, 2024, and December 31, 2023, we had no amounts recorded in accounts receivable, contract assets, or deferred revenue in our consolidated balance sheets related to the AbbVie Agreement.

Our significant agreements may include nonrefundable, upfront payments;

annual license maintenance fees;

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Our obligation to make such payments is contingent upon milestones being achieved, licensed products being commercialized, and the agreements remaining in effect.

For the three months ended September 30, 2023, and 2022, we recorded $ 0.4 million and $ 0.3 million, respectively, as research and development expense in our condensed consolidated statements of operations related to our license agreements.

For the nine months ended September 30, 2023, and 2022, we recorded $ 1.2 million and $ 0.8 million, respectively, as research and development expense in our condensed consolidated statements of operations related to our license agreements.

For the three months ended September 30, 2023, and 2022, we recorded $ 0.4 million and $ 1.4 million, respectively, as general and administrative expense for patent prosecution and maintenance costs in our condensed consolidated statements of operations, which includes reimbursements of patent prosecution and maintenance costs of $ 0.1 million and $ 0.9 million, respectively.

For the nine months ended September 30, 2023, and 2022, we recorded $ 2.2 million and $ 4.7 million, respectively, as general and administrative expense for patent prosecution and maintenance costs in our

condensed consolidated statements of operations, which includes reimbursements of patent prosecution and maintenance costs of $ 1.3 million and $ 3.1 million, respectively.

As of September 30, 2023, certain license and assignment agreements included potential future payments from us for development, regulatory, and sales milestones totaling approximately $ 161.2 million.

For the three months ended March 31, 2024, and 2023, we recorded $ 1.3 million and $ 0.4 million, respectively, as research and development expense in our unaudited condensed consolidated statements of operations and comprehensive loss related to our significant agreements.

For the three months ended March 31, 2024, and 2023, we recorded $ 0.2 million and $ 0.8 million, respectively, as general and administrative expense for patent prosecution and maintenance costs in our unaudited condensed consolidated statements of operations and comprehensive loss, which includes reimbursements of patent prosecution and maintenance costs of $ 0.1 million and $ 0.4 million, respectively.

As of March 31, 2024, certain license and assignment agreements included potential future payments from us for development, regulatory, and sales milestones totaling approximately $ 160.2 million.

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 table is a summary of revenue by geographic location for the three and nine months ended September 30, 2023, and 2022 (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

The following table is a summary of revenue by geographic location for the three months ended March 31, 2024, and 2023 (in thousands):

Three Months Ended March 31,

United States $ 2,269 $ 3,385

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Total $ 2,429 $ 3,502

During the three months ended September 30, 2023, we recognized $ 1.6 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 22.1 million of revenue related to performance obligations satisfied over time that included $ 21.5 million in licensing and collaboration revenue associated with the AbbVie Agreement, of which $ 20.8 million had been included in deferred revenue as of the beginning of the period.

During the three months ended September 30, 2022, we recognized $ 1.6 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 1.7 million of revenue related to performance obligations satisfied over time.

During the nine months ended September 30, 2023, we recognized $ 5.8 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 25.1 million of revenue related to performance obligations satisfied over time which included $ 24.5 million in licensing and collaboration revenue associated with the AbbVie Agreement.

During the nine months ended September 30, 2022, we recognized $ 4.7 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 5.5 million of revenue related to performance obligations satisfied over time.

During the three months ended March 31, 2024, we recognized $ 1.8 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 0.6 million of revenue related to performance obligations satisfied over time.

During the three months ended March 31, 2023, we recognized $ 1.9 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 1.6 million of revenue related to performance obligations satisfied over time.

Contract Balances

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Contract assets are rights to consideration in exchange for a license that we have granted to a licensee when the right is conditional on something other than the passage of time.

Our contract asset balances represent reimbursable research costs related to the AbbVie Agreement, as well as royalties and milestone payments from our other license agreements that are unbilled as of the end of a reporting period.

Our contract asset balances represent royalties and milestone payments from our other license agreements that are unbilled as of the end of a reporting period.

Contract liabilities consist of deferred revenue and relate to amounts invoiced to, or advance consideration received from, licensees that precede our satisfaction of the associated performance obligations.

Our deferred revenue primarily results from the upfront payment received relating to our performance obligation to Pfizer.

The remaining deferred revenue relates to upfront payments received under license agreements that also include nonrefundable 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 nine months ended September 30, 2023 (in thousands):

As of March 31, 2024, and December 31, 2023, our deferred revenue balance primarily resulted from the upfront payment received relating to our performance obligation to Pfizer Inc.

The remaining deferred revenue relates to upfront payments received under license agreements that also include nonrefundable annual license fees, which are accounted for as material rights for license renewals and are recognized at the point in time when 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, 2024 (in thousands):

Balance as of

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Balance as of

September 30,

Accounts receivable $ 148 $ 2,193 $ ( 1,424 ) $ 917

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Deferred revenue, current and long-term $ 8,949 $ 675 $ ( 1,369 ) $ 8,255

Unbilled accounts receivable decreased $ 0.6 million during the nine months ended September 30, 2023, primarily due to the decrease in unbilled research costs under the AbbVie Agreement.

Deferred revenue decreased during the nine months ended September 30, 2023, primarily due to the recognition of deferred revenues related to the completion of our performance obligation to AbbVie as a result of AbbVie’s termination of the AbbVie Agreement, offset by the $ 7.5 million allocated to the Pfizer information sharing committee, during the nine months ended September 30, 2023.

See Notes 4 and 7 to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for additional information.

During the nine months ended September 30, 2023, and 2022, we recognized $ 23.2 million and $ 3.4 million of revenue, respectively, which was included in the opening contract liabilities balances at the beginning of the respective periods.

Unbilled accounts receivable decreased $ 0.5 million during the three months ended March 31, 2024, primarily due to the decrease in minimum annual royalties under our license agreements.

Deferred revenue decreased during the three months ended March 31, 2024, primarily due to the recognition of deferred revenue related to the satisfaction of our performance obligation to Pfizer.

See Note 7 to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for additional information.

During the three months ended March 31, 2024, and 2023, we recognized $ 0.7 million and $ 1.1 million of revenue, respectively, which was included in the opening contract liabilities balances at the beginning of the respective periods.

Transaction Prices Allocated to Remaining Performance Obligations

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 September 30, 2023, was approximately $ 9.6 million.

The value of transaction prices allocated to remaining unsatisfied performance obligations as of March 31, 2024, was approximately $ 8.3 million.

We expect to recognize approximately $ 2.8 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

We did not incur any expenses to obtain license and collaboration agreements, and costs to fulfill those contracts do not generate or enhance our resources.

We did not incur any expenses to obtain our existing contracts, and costs to fulfill those contracts do not generate or enhance our resources.

As such, no costs to obtain or fulfill a contract have been capitalized in any period.

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Other receivables consisted of the following (in thousands):

September 30,

2024 December 31,

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

September 30,

2024 December 31,

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Prepaid insurance 581 993

Prepaid income taxes 603 431

Other 1,846 1,220

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

September 30,

2024 December 31,

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Property and equipment, net $ 19,167 $ 18,270

Depreciation and amortization expenses related to property and equipment were $ 1.6 million and $ 0.4 million, respectively, for the three months ended September 30, 2023, and 2022.

Depreciation and amortization expenses related to property and equipment were $ 2.8 million and $ 1.1 million, respectively, for the nine months ended September 30, 2023, and 2022.

Depreciation and amortization expenses related to property and equipment were $ 0.7 million and $ 0.6 million, for the three months ended March 31, 2024, and 2023, respectively.

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

September 30,

2024 December 31,

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Accrued research and development expenses 7,594 8,720

Accrued litigation settlement

Accrued patent expenses 500 613

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Related Party Transactions

Edge Animal Health

On May 15, 2020, we entered into an Exclusive License Agreement for Veterinary Therapeutics (as amended, the “Edge chRDNA License Agreement”) with Edge Animal Health (“Edge”), a private company, related party, under which we granted Edge an exclusive worldwide license to Cas9 and Cas12a chRDNA intellectual property rights and know-how in the defined field of veterinary therapeutics.

As consideration for this exclusive license, Edge issued to us 7,500,000 shares of convertible preferred stock with an estimated fair value of $ 7.5 million, which was the price paid for similar shares by another investor, and which was an arm’s length transaction.

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

As of September 30, 2023, we had appointed one of the four Edge directors.

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

As Edge’s convertible preferred stock is not in substance common stock, we recorded this investment using the measurement

alternative in accordance with ASC 321, Investments–Equity Securities.

Under the measurement alternative, our investment in Edge’s convertible preferred stock was initially recorded at its estimated fair value, and 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 Edge.

As of each of September 30, 2023, and December 31, 2022, the carrying value of the Edge investment was $ 7.5 million.

There have been no changes to the carrying value of the investment during the three months ended September 30, 2023.

On May 16, 2023, we entered into an Exclusive License Agreement for Veterinary Therapeutics (CRISPR-Cas9) (the “Edge Cas9 License Agreement”), under which we granted Edge an exclusive worldwide license to certain CRISPR-Cas9 intellectual property rights in the field of veterinary therapeutics.

Previously, on May 15, 2020, we had entered into an Option for an Exclusive License under which Edge could exercise its option within three years upon payment of a total of $ 1.2 million, which Edge paid, and we entered into the Edge Cas9 License Agreement.

We did not recognize any revenue in connection with the Edge Cas9 License Agreement during the three months ended September 30, 2023.

We recognized $ 1.2 million of revenue in connection with the Edge Cas9 License Agreement during the nine months ended September 30, 2023.

We did no t recognize any revenue in connection with the Edge Cas9 License Agreement in 2022.

Since December 31, 2023, there have been no new related party transactions, except as set forth below.

For further information regarding our related parties, see Note 7 to the consolidated financial statements included in our Form 10-K.

Pfizer Investment

On June 29, 2023, we entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with Pfizer, pursuant to which we, in a private placement transaction (the “Pfizer Investment”), agreed to issue and sell to Pfizer 4,690,431 shares of our common stock, par value $ 0.0001 per share, at a purchase price of $ 5.33 per share, for aggregate gross proceeds of approximately $ 25.0 million.

The issuance and sale of the shares to Pfizer closed on June 30, 2023.

We granted certain registration rights to Pfizer under the Securities Purchase Agreement covering the resale of the shares.

Unless otherwise agreed by Pfizer, we have agreed to use the proceeds from the Pfizer Investment solely in connection with (i) the development program for our allogeneic anti-BCMA CAR-T cell therapy known as CB-011 that is being evaluated in the CaMMouflage clinical trial and/or (ii) any other single-targeted anti-BCMA CAR-T cell therapy using an anti-BCMA single-chain variable fragment owned or controlled by us (collectively, cell therapies described in clauses (i) and (ii) are referred to as a “BCMA Product Candidate”), for 36 months beginning on June 29, 2023.

On June 29, 2023, in connection with the Pfizer Investment, we and Pfizer also entered into an Information Rights Agreement (the “Information Rights Agreement”), having a thirty-six ( 36 )-month term.

Under the Information Rights Agreement, we granted Pfizer a thirty ( 30 )-calendar day right of first negotiation (“ROFN”) if we commence or engage with any third party with respect to a potential grant of rights to develop and/or commercialize a BCMA Product Candidate, including, without limitation, a license agreement, a co-promotion/co-commercialization agreement, a profit share agreement, a joint venture agreement, or an asset sale agreement (a “Grant of Program Rights”).

If we and Pfizer do not reach an agreement with respect to a Grant of Program Rights within the 30-day period, then we may pursue negotiations and enter into an agreement with any third party.

If we and such third party do not reach agreement on the Grant of Program Rights within a specified time period, Pfizer’s right of first negotiation would be reinstated.

Under the Information Rights Agreement, we also agreed to grant Pfizer the right to designate one representative to serve on our scientific advisory board.

Through an information sharing committee, we will provide calendar quarter updates to Pfizer regarding the development program for a BCMA Product Candidate.

Additionally, we agreed to provide Pfizer access to any preclinical or interim or final clinical data (including raw data) and results generated as part of the development program for a BCMA Product Candidate at the same time that we provide such data to a third party (other than to our service providers or the FDA or other regulatory authorities), subject to certain confidentiality exceptions.

On June 29, 2023, we and Pfizer also entered into a Voting Agreement, pursuant to which, for a period of 12 months, Pfizer agreed to cause our voting securities that Pfizer beneficially owns (within the meaning of Rules 13d-3 or 13d-5 under the Exchange Act) in excess of 4.99 % of our then issued and outstanding voting securities to be voted (i) with respect to any matter directly relating to remuneration of directors, directors’ insurance, or indemnification or release from liability of directors, in a manner proportionally consistent with the votes properly cast for and against by holders of voting securities not beneficially owned by Pfizer, and (ii) with respect to any other matter in which Pfizer shall have the right to vote such voting securities, in accordance with the recommendation of our board of directors or any applicable committee thereof.

We recorded the issuance of our common stock at its estimated fair value of $ 17.5 million , which reflects a discount for the lack of marketability of the shares.

The remaining $ 7.5 million of the aggregate purchase price was allocated to the Information Rights Agreement, which represented a contract with a customer.

We concluded that the information sharing committee represents the only performance obligation under the Information Rights Agreement.

The ROFN does not provide Pfizer with a material right and is therefore not a performance obligation.

We recognize revenue over time as the measure of progress which we believe best depicts the obligations to Pfizer.

The information sharing committee will meet quarterly over the 36-month term of the Information Rights Agreement, which results in recognition of the transaction price over the 36-month term.

During each of the three- and nine-month periods ended September 30, 2023, we recognized $ 0.6 million of revenue from Pfizer.

As of September 30, 2023, there was approximately $ 6.9 million of related party deferred revenue ($ 2.5 million included in current liabilities and $ 4.4 million included in long-term liabilities) related to our performance obligation to Pfizer.

During the three months ended March 31, 2024, we recognized $ 0.6 million of revenue from our Information Rights Agreement with Pfizer, dated June 29, 2023, pursuant to which we had originally allocated $ 7.5 million as a contract with a customer under ASC Topic 606.

We did no t recognize any revenue from Pfizer during the three months ended March 31, 2023.

As of March 31, 2024, there was approximately $ 5.6 million of related party deferred revenue ($ 2.5 million included in current liabilities and $ 3.1 million included in long-term liabilities) related to our performance obligation to Pfizer.

As of December 31, 2023, there was approximately $ 6.2 million of related party deferred revenue ($ 2.5 million included in current liabilities and $ 3.7 million included in long-term liabilities) related to our performance obligation to Pfizer.

Operating Lease Obligations

As of September 30, 2023 we had operating leases for our laboratory and office space in Berkeley, California, consisting of approximately 75,000 square feet, with remaining lease terms up to 8.8 years.

As of March 31, 2024, we had operating leases for our laboratory and office space in Berkeley, California, consisting of approximately 75,000 square feet, with remaining lease terms up to 8.3 years.

Certain of our laboratory and office space lease agreements include options to extend the terms for a period of five years and also contain provisions for future rent increases.

In addition to base rent, we pay our share of operating expenses and taxes.

The components of lease costs, which are included in our statements of operations, were as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

The components of lease costs, which are included in our unaudited condensed consolidated statements of operations and comprehensive loss, were as follows (in thousands):

Three Months Ended March 31,

Operating lease cost (1)

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Total lease cost $ 2,016 $ 1,947

(1) Included $ 0.7 million and $ 0.6 million of variable lease cost related to operating expenses and taxes for the three months ended September 30, 2023, and 2022, respectively.

Included $ 1.9 million and $ 1.6 million of variable lease cost related to operating expenses and taxes for the nine months ended September 30, 2023, and 2022, respectively.

(1) Included $ 0.7 million and $ 0.6 million of variable lease cost related to operating expenses and taxes for the three months ended March 31, 2024, and 2023, respectively.

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

Nine Months Ended September 30,

Three Months Ended March 31,

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

Operating cash flows from operating leases $ 711 $ 1,093

The weighted-average remaining lease term and the weighted-average discount rate for our laboratory and office leases were as follows:

September 30,

The following table summarizes the weighted-average remaining lease term and weighted-average discount rate for our corporate laboratory and office leases:

2024 December 31,

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Weighted-average discount rate 11.3 % 11.3 %

The following table summarizes a maturity analysis of our operating lease liabilities showing the aggregate lease payments as of September 30, 2023 (in thousands):

The following table summarizes a maturity analysis of our operating lease liabilities showing the aggregate lease payments as of March 31, 2024 (in thousands):

Remainder of 2024 (1)

Thereafter 15,993

Total undiscounted lease payments 42,853

imputed interest ( 15,398 )

Total future undiscounted lease payments

Less imputed interest ( 13,847 )

Total discounted lease payments 27,159

current portion of lease liability ( 1,139 )

Less current portion of lease liability ( 1,264 )

Noncurrent portion of lease liability $ 25,895

(1) Reflects an offset of $ 0.6 million related to incentives expected to be received in 2024.

(2) Reflects an offset of $ 0.7 million related to incentives expected to be received in 2024.

Commitments and Contingencies

Research and Development Agreements

We enter into various agreements in the ordinary course of business, such as those with suppliers, contract research organizations (“CROs”), contract manufacturing organizations (“CMOs”), clinical trial sites, and the like.

These agreements provide for termination by either party in certain circumstances, generally with less than one-year notice and are, therefore, cancellable contracts and, if cancelled, are not anticipated to have a material effect on our condensed consolidated financial condition, results of operations, or cash flows.

Research, Manufacturing, and License Agreements

We enter into various agreements in the ordinary course of business, such as those with contract manufacturing organizations (“CMOs”), suppliers, clinical research organizations (“CROs”), clinical trial sites, licensors, assignors, and the like.

These agreements provide for termination by either party in certain circumstances, generally with less than one-year notice and are, therefore, cancellable contracts and, if cancelled, are not anticipated to have a material effect on our unaudited condensed consolidated financial condition, results of operations, or cash flows.

Some of these agreements also include contingent payments that will become payable if and when certain development, regulatory, clinical, and/or commercial milestones are achieved by us.

As of March 31, 2024, the satisfaction and timing of such contingent payments is uncertain and cannot be reasonably estimated.

Guarantees and Indemnifications

In the normal course of business, we enter into agreements that contain a variety of representations and warranties and provide for certain indemnifications by us.

In the ordinary course of business, we enter into agreements that contain a variety of representations and warranties and provide for certain indemnifications by us.

Our exposure under these agreements is unknown because claims may be made against us in the future.

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

As of September 30, 2023, and December 31, 2022, we did not have any material indemnification claims that were probable or reasonably possible, and consequently, we have not recorded related liabilities.

As of March 31, 2024, and December 31, 2023, 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 litigation arising in the ordinary course of business.

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District Court for the Northern District of California against our company and certain of our officers and current and former members of our board of directors, Bergman v.

Caribou Biosciences, Inc., et al., Case Number 4:23-cv-01742-YGR (the “Bergman Case”).

The Bergman complaint challenges disclosures regarding our company’s business, operations, and prospects, specifically with respect to the alleged durability of CB-010’s therapeutic effect and the product candidate’s clinical and commercial prospects, in alleged violation of Sections 11 and 15 of the Securities Act of 1933, as amended (the “Securities Act”) and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Caribou Biosciences, Inc., et al.

, Case Number 4:23-cv-01742-YGR (“Bergman Case”).

The Bergman complaint challenges disclosures regarding our company’s business, operations, and prospects, specifically with respect to the alleged durability of CB-010’s therapeutic effect and the product candidate’s clinical and commercial prospects, in alleged violation of Sections 11 and 15 of the Securities Act of 1933, as amended (“Securities Act”) and Sections 10(b) and 20(a) of the Exchange Act.

On September 18, 2023, plaintiffs filed an amended complaint adding the IPO underwriters as defendants and making substantially the same allegations as the original complaint.

Additionally, on March 22, 2023, a putative class action lawsuit was filed in Superior Court of the State of California for the County of Alameda against our company and certain of our officers and current and former members of our board of directors, Lowry v.

Caribou Biosciences, Inc., et al., Case Number T23-1084 (the “Lowry Case”).

The Lowry Case challenges disclosures regarding our company’s business, operations, and prospects, specifically with respect to the

alleged durability of CB-010’s therapeutic effect and the product candidate’s clinical and commercial prospects, in alleged violation of Sections 11 and 15 of the Securities Act.

On November 14, 2023, we filed a motion to dismiss the amended complaint for failure to state a claim.

Motion to dismiss briefing was completed on February 21, 2024.

On April 22, 2024, we reached an agreement in principle with plaintiffs to settle the Bergman Case for $ 3.9 million, which is included in general and administrative expense for the three months ended March 31, 2024, in exchange for a full release of the putative class’s claims against us and all of our current and former officers, current and former members of our board of directors, the IPO underwriters, and the other named defendant.

The parties are negotiating a settlement agreement, which the court must approve before settlement is final.

On March 22, 2023, a putative class action lawsuit was filed in Superior Court of the State of California for the County of Alameda against our company and certain of our officers and current and former members of our board of directors, Lowry v.

Caribou Biosciences, Inc., et al., Case Number T23-1084 (“Lowry Case”).

The Lowry Case challenges disclosures regarding our company’s business, operations, and prospects, specifically with respect to the alleged durability of CB-010’s therapeutic effect and the product candidate’s clinical and commercial prospects, in alleged violation of Sections 11 and 15 of the Securities Act.

The allegations and claims in the Lowry Case are substantially similar to the Securities Act claims asserted in the Bergman Case.

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On September 11, 2023, plaintiff filed an amended complaint making substantially the same allegations as the original complaint.

We believe these lawsuits are without merit and intend to vigorously defend the claims asserted against us.

On November 9, 2023, we filed a motion to dismiss the amended complaint on the grounds that our certification of incorporation mandates that Securities Act claims against us be brought in federal court.

On February 28, 2024, the court granted our motion to dismiss and, on April 15, 2024, the court entered an order of dismissal.

Common stock reserved for future issuance consisted of the following:

September 30, 2023 As of

March 31, 2024 As of

December 31, 2023

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Shelf Registration Statement

On August 9, 2022, we filed a shelf registration statement on Form S-3 (“Shelf Registration Statement”) with the U.S.

Securities and Exchange Commission (“SEC”).

The Shelf Registration Statement allows us to sell from time to time up to $ 400.0 million of common stock, preferred stock, debt securities, warrants, rights, or units comprised of any combination of these securities, for our own account in one or more offerings (including the $ 100.0 million of common stock reserved for our at-the-market equity offering program described below).

On August 9, 2022, we filed a shelf registration statement on Form S-3 (“Shelf Registration Statement”) with the SEC.

The SEC declared the Shelf Registration Statement effective on August 16, 2022.

The terms of any offering under the Shelf Registration Statement will be established at the time of such offering and will be described in a prospectus supplement to the Shelf Registration Statement filed with the SEC prior to the completion of any such offering.

The terms of any offering under the Shelf Registration Statement are established at the time of such offering, as described in a prospectus supplement to the Shelf Registration Statement filed with the SEC prior to the completion of any such offering.

In July and August 2023, we issued and sold a total of 22,115,384 shares of our common stock in an underwritten follow-on public offering at a price to the public of $ 6.50 per share, which included the full exercise of the underwriters’ right to purchase 2,884,615 additional shares of our common stock.

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At-the-market Equity Offering Program

On August 9, 2022, we entered into an Open Market Sale Agreement SM (the “ATM Sales Agreement”) with Jefferies LLC (“Jefferies”) with respect to an at-the-market (“ATM”) equity offering program, pursuant to which, through Jefferies as sales agent, we may from time to time, sell shares of our common stock having an aggregate offering price of up to $ 100.0 million in gross proceeds under the Shelf Registration Statement.

During the nine months ended September 30, 2023, we sold 168,635 shares of our common stock under the ATM Sales Agreement at an average price per share of $ 7.32 for aggregate gross proceeds of $ 1.2 million ($ 1.0 million net of offering expenses).

On August 9, 2022, we entered into an at-the-market Open Market Sale Agreement SM (“ATM Sales Agreement”) with Jefferies LLC (“Jefferies”), pursuant to which, through Jefferies as sales agent, we may from time to time, sell shares of our common stock having an aggregate offering price of up to $ 100.0 million in gross proceeds under the Shelf Registration Statement.

As of March 31, 2024, we have sold 1,762,806 shares of our common stock under the ATM Sales Agreement, at an average price per share of $ 7.32 for aggregate gross proceeds of $ 12.9 million ($ 12.3 million net of offering expenses).

Stock-Based Compensation

Equity Incentive Plans

In July 2021, our board of directors adopted and our stockholders approved the 2021 Equity Incentive Plan (the “2021 Plan”) that became effective on July 22, 2021.

As of September 30, 2023, we had 5,894,280 shares available for issuance under the 2021 Plan.

The following table summarizes stock option activity under our equity incentive plans during the nine months ended September 30, 2023:

In July 2021, our board of directors adopted and our stockholders approved the 2021 Equity Incentive Plan (“2021 Plan”) that became effective on July 22, 2021.

As of March 31, 2024, we had 6,565,993 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, 2024:

Stock Options Weighted-

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Options cancelled or forfeited ( 95,452 ) 11.73

Outstanding at September 30, 2023 9,523,394 $ 8.06 8.3 $ 3,139

Exercisable at September 30, 2023 3,906,573 $ 7.88 7.5 $ 2,527

Vested and expected to vest at September 30, 2023 9,523,394 $ 8.06 8.3 $ 3,139

Outstanding at March 31, 2024 12,094,332 $ 7.73 8.2 $ 4,031

Exercisable at March 31, 2024 4,824,205 $ 8.18 7.0 $ 3,161

Vested and expected to vest at March 31, 2024 12,094,332 $ 7.73 8.2 $ 4,031

(1) 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 September 30, 2023, and 2022, we granted 384,095 and 372,600 stock options to employees with a weighted average grant date fair value of $ 3.64 and $ 6.43 , respectively.

During the nine months ended September 30, 2023, and 2022, we granted 3,406,801 and 1,206,750 stock options to employees with a weighted average grant date fair value of $ 3.91 and $ 5.84 , 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:

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

During the three months ended March 31, 2024, and 2023, we granted 2,913,727 and 2,536,340 stock options to employees with a weighted average grant date fair value of $ 4.59 and $ 4.13 , respectively.

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

Three Months Ended March 31,

Volatility 75.7 % to 75.9 %

74.9 % to 75.0 %

71.7 % to 74.2 %

Expected term (in years) 5.0 to 6.0

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3.5 % to 4.1 %

3.5 % to 4.6 %

1.7 % to 3.7 %

Expected dividend yield 0.0 % 0.0 %

As of September 30, 2023, there was $ 29.7 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 2.7 years.

As of March 31, 2024, there was $ 35.0 million of unrecognized stock-based compensation expense related to employee stock options that is expected to be recognized over a weighted-average period of 2.8 years.

Restricted Stock Units

During the nine months ended September 30, 2023, we did not grant any restricted stock units (“RSUs”) or performance-based RSUs (“PSUs”) under the 2021 Plan.

A summary of the status of and change in unvested RSUs and PSUs as of September 30, 2023 was as follows:

During the three months ended March 31, 2024, we granted 995,767 restricted stock units (“RSUs”) and did not grant any performance-based RSUs (“PSUs”) under the 2021 Plan.

A summary of the status of and change in unvested RSUs and PSUs as of March 31, 2024 was as follows:

Number of Shares Underlying Outstanding RSUs and PSUs Weighted-Average Grant Date Fair Value per RSU and PSU

Unvested, January 1, 2024 205,357 $ 8.49

Granted 995,767 6.81

Vested ( 15,000 ) 10.64

Forfeited ( 5,576 ) 8.65

Unvested, September 30, 2023 168,438 $ 10.10

The PSUs were granted to our executive officers and will vest contingent upon the achievement of a clinical milestone for CB-010 during a performance period ending December 31, 2024, and an executive officer’s continued employment during the performance period.

As of September 30, 2023, the achievement of this milestone was not considered probable and, therefore, no stock-based compensation was recorded.

As of September 30, 2023, the total unrecognized stock-based compensation expense related to unvested RSUs was $ 0.9 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.5 years.

As of September 30, 2023, there was approximately $ 0.6 million of unrecognized stock-based compensation expense related to unvested PSUs.

Unvested, March 31, 2024 1,180,548 $ 7.04

employment during the performance period.

As of March 31, 2024, the achievement of this milestone was not considered probable and, therefore, no stock-based compensation was recorded.

As of March 31, 2024, the total unrecognized stock-based compensation expense related to unvested RSUs was $ 7.1 million, which is expected to be recognized over the remaining weighted-average vesting period of 3.4 years.

As of March 31, 2024, there was approximately $ 0.6 million of unrecognized stock-based compensation expense related to unvested PSUs.

Employee Stock Purchase Plan (“ESPP”)

In July 2021, our board of directors adopted and our stockholders approved the ESPP, which became effective on July 22, 2021.

We have issued 207,567 shares of common stock under the ESPP as of September 30, 2023.

We recorded $ 0.2 million in accrued liabilities related to contributions withheld as of September 30, 2023.

We have issued 329,602 shares of common stock under the ESPP as of March 31, 2024.

We recorded $ 0.2 million in accrued liabilities related to contributions withheld as of March 31, 2024.

Stock-Based Compensation Expense

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

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

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

Three Months Ended March 31,

Research and development $ 1,617 $ 1,310

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

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Stock options $ 3,489 $ 2,798

ESPP 96 80 427 209

RSUs 194 114 579 216

Total $ 3,988 $ 3,131

There was no stock-based compensation expense related to non-employees for the three months ended September 30, 2023, and was less than $ 0.1 million for the three months ended September 30, 2022.

There was no stock-based compensation expense related to non-employees for the nine months ended September 30, 2023, and $ 0.1 million for the nine months ended September 30, 2022.

401(k) Savings Plan

In 2017, we established a defined-contribution savings plan under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Tax Code”).

In 2017, we established a defined-contribution savings plan under Section 401(k) of the Internal Revenue Code of 1986, as amended (“Tax Code”).

Our 401(k) plan is available to all employees and allows participants to defer a portion of their annual compensation on a pretax basis subject to applicable laws.

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

During the three months ended September 30, 2023, and 2022, we contributed $ 0.3 million and $ 0.2 million, respectively, to our 401(k) plan.

During the nine months ended September 30, 2023, and 2022, we contributed $ 0.8 million and $ 0.6 million, respectively, to our 401(k) plan.

No income tax expense was recorded during each of the three- and nine-month periods ended September 30, 2023, and 2022 due to our operating losses.

During the three months ended March 31, 2024, and 2023, we contributed $ 0.4 million and $ 0.3 million, respectively, to our 401(k) plan.

No income tax expense was recorded during each of the three-month periods ended March 31, 2024, and 2023 due to our operating losses.

Net Loss Per Share

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Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Net loss $ ( 41,234 ) $ ( 28,044 )

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

September 30,

Stock options outstanding 12,094,332 9,102,960

RSUs and PSUs issued and outstanding 168,438 259,769

RSUs issued and outstanding

1,128,191 236,169

Shares committed under ESPP 108,788 149,350

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Subsequent Events

We did not have any subsequent events as of the filing date of this Quarterly Report on Form 10-Q.

On April 22, 2024, an agreement in principle was reached with the plaintiffs in the Bergman v.

Caribou Biosciences, Inc., et al.

, Case Number 4:23-cv-01742-YGR (“Bergman Case”) to settle the Bergman Case for $ 3.9 million.

The parties are negotiating a settlement agreement, which the court must approve before settlement is final .

See Note 9 to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for additional information.

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