What changed in this filing

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Item 1. Financial Statements

2024-08-06 compared with 2024-05-07 · 155 added, 107 removed, 496 unchanged (35% of the section changed)

36 unchanged sentences

STOCKHOLDERS’ EQUITY

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

Common stock, par value $ 0.0001 per share, 300,000,000 shares authorized at June 30, 2024, and December 31, 2023, respectively;

90,362,771 and 88,448,948 shares issued and outstanding as of June 30, 2024, and December 31, 2023, respectively

Additional paid-in-capital 688,990 667,648

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(in thousands, except share and per share amounts)

Three Months Ended March 31,

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

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Licensing and collaboration revenue (including $ 2,245 and $ 2,867 for three and six months ended June 30, 2024, respectively, and $ 1,150 for each of the three- and six-month periods ended June 30, 2023, from related parties)

$ 3,464 $ 3,755 $ 5,893 $ 7,257

Operating expenses:

8 unchanged sentences

Total other income

5,804 3,349 10,572 6,421

Net loss ( 37,697 ) ( 29,519 ) ( 78,931 ) ( 57,563 )

1 unchanged sentence

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

3 ( 406 ) ( 349 ) 382

Net comprehensive loss $ ( 37,694 ) $ ( 29,925 ) $ ( 79,280 ) $ ( 57,181 )

7 unchanged sentences

Common Stock Additional Paid-In

Capital Accumulated Other Comprehensive Income

Capital Accumulated Other Comprehensive (Loss) 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 upon employee stock plans

Issuance of common stock under ESPP

122,035 — 667 — — 667

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

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

Issuance of common stock in connection with our ATM offering, net of offering expenses

1,594,171 1 11,329 — — 11,330

Issuance of common stock on RSU release

Issuance of common stock upon vesting of RSUs

15,000 — — — — —

3 unchanged sentences

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

Issuance of common stock under ESPP

400 — 2 — — $ 2

Issuance of common stock on exercise of options 47,870 — 129 — — $ 129

Stock-based compensation expense — — 4,738 — — 4,738

Net loss — — — — ( 37,697 ) ( 37,697 )

Other comprehensive income — — — 3 — 3

BALANCE—June 30, 2024 90,362,771 $ 9 $ 688,990 $ ( 319 ) $ ( 378,216 ) $ 310,464

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

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

Issuance of common stock under ESPP

70,271 — 404 — — 404

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

Issuance of common stock in connection with our ATM offering, net of offering expenses

168,635 — 1,007 — — 1,007

3 unchanged sentences

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 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

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

3 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

3 unchanged sentences

Gain on disposal of fixed assets — ( 34 )

Non-cash consideration for licensing and collaboration revenue ( 1,634 ) ( 61 )

Change in fair value of equity securities 102 ( 7 )

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CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of common stock pursuant to private placement with Pfizer

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

Proceeds from purchases of common stock under ESPP

Proceeds from issuance of common stock related to our ATM, net of offering expenses

Net cash provided by financing activities 12,617 19,213

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

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 13,296 ) 7,856

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

5 unchanged sentences

$ 37,912 $ 66,240

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for income taxes $ — $ 170

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

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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.

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

We incorporated in October 2011 as a Delaware corporation and are headquartered in Berkeley, California.

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

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 have incurred operating losses and negative cash flows from operations since our inception and we had an accumulated deficit of $ 378.2 million as of June 30, 2024.

During the six months ended June 30, 2024, we incurred a net loss of $ 78.9 million and used $ 70.1 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 $ 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.

Our management expects that existing cash, cash equivalents, and marketable securities of $ 311.8 million as of June 30, 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

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Actual results may differ materially from those estimates.

We operate and manage our business as one reportable operating segment, which is the business of developing a pipeline of allogeneic CAR-T and CAR-NK cell therapies.

We operate and manage our business as one reportable operating segment, which is the business of developing a pipeline of allogeneic CAR-T cell therapies.

Our president and chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for allocating resources and evaluating financial performance.

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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 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.

Substantially all 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 these financial institutions and issuers.

Licensees that represent 10% or more of our revenue and accounts receivable and contract assets were as follows:

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Contract Assets

Three Months Ended As of

March 31, 2024 March 31, 2023

Three Months Ended

Six Months Ended As of

June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Licensee A * * 10.4 % * * *

2 unchanged sentences

17.9 % * 21.1 % * * *

46.9 % 30.6 % 27.5 % 15.8 % * *

Total 83.5 % 84.3 % 79.5 % 76.4 % 59.3 % 47.5 %

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 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.

No allowance for credit losses or contract asset impairment was recorded as of June 30, 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”).

Codification Amendments in Response to the U.S.

Securities and Exchange Commission (“SEC”) Disclosure Update and Simplification Initiative.

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.

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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.

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.

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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 months ended March 31, 2024, and 2023.

No such transfers occurred during the six months ended June 30, 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 March 31, 2024

Fair Value Measurements as of June 30, 2024

Total Level 1 Level 2 Level 3

3 unchanged sentences

43,931 — 43,931 —

government agency bonds 33,073 — 33,073 —

government agency bonds ($ 2,995 included in cash and cash equivalents)

33,358 — 33,358 —

Money market fund investments (included in cash and cash equivalents) 10,875 10,875 — —

18 unchanged sentences

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 March 31, 2024, and December 31, 2023 are presented in the following tables (in thousands):

As of March 31, 2024

The fair value and amortized cost of cash equivalents and available-for-sale marketable securities by major security type as of June 30, 2024, and December 31, 2023, are presented in the following tables (in thousands):

As of June 30, 2024

Treasury bills ($ 5,786 included in cash and cash equivalents)

2 unchanged sentences

43,961 — ( 30 ) 43,931

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

government agency bonds ($ 2,995 included in cash and cash equivalents)

33,414 — ( 56 ) 33,358

Money market fund investments (included in cash equivalents)

25 unchanged sentences

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

March 31, 2024

June 30, 2024

Due in less than one year $ 223,783

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Change in fair value ( 2,098 )

Balance at March 31, 2024 $ 2,636

Balance at June 30, 2024 $ 841

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 $ 0.3 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.

We recorded a $ 1.8 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 June 30, 2024, and 2023, respectively.

We recorded a $ 2.1 million and $ 0.5 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 six months ended June 30, 2024, and 2023, respectively.

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

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

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.

As of June 30, 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 $ 1.64 per share.

Significant Agreements

1 unchanged sentence

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.

During the three months ended June 30, 2023, we recognized $ 1.4 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”).

During the six months ended June 30, 2023, we recognized $ 3.0 million in revenue under the AbbVie Agreement.

No revenue was recognized under the AbbVie Agreement during each of the three- or six-month periods ended June 30, 2024, as the AbbVie Agreement was terminated

effective October 25, 2023.

As of June 30, 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;

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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 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.

For the three months ended June 30, 2024, and 2023, we recorded $ 0.3 million and $ 0.4 million, respectively, as research and development expense in our unaudited consolidated statements of operations and comprehensive loss related to our license agreements.

For the six months ended June 30, 2024, and 2023, we recorded $ 1.6 million and $ 0.8 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 June 30, 2024, and 2023, we recorded $ 0.2 million and $ 1.0 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 $ 0.4 million and $ 0.7 million, respectively.

For the six months ended June 30, 2024, and 2023, we recorded $ 0.4 million and $ 1.8 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 $ 0.5 million and $ 1.1 million, respectively.

As of June 30, 2024, certain license and assignment agreements included potential future payments from us for development, regulatory, and sales milestones totaling approximately $ 159.9 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 months ended March 31, 2024, and 2023 (in thousands):

Three Months Ended March 31,

The following table is a summary of revenue by geographic location for the three and six months ended June 30, 2024, and 2023 (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

United States $ 3,444 $ 3,746 $ 5,713 $ 7,131

1 unchanged sentence

Total $ 3,464 $ 3,755 $ 5,893 $ 7,257

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.

During the three months ended June 30, 2024, we recognized $ 2.8 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 0.7 million of revenue related to performance obligations satisfied over time.

During the three months ended June 30, 2023, we recognized $ 2.4 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 1.4 million of revenue related to performance obligations satisfied over time.

During the six months ended June 30, 2024, we recognized $ 4.6 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 1.3 million of revenue related to performance obligations satisfied over time.

During the six months ended June 30, 2023, we recognized $ 4.3 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 3.0 million of revenue related to performance obligations satisfied over time.

Contract Balances

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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.

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.

As of June 30, 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):

The following table presents changes in our contract assets and liabilities during the six months ended June 30, 2024 (in thousands):

Balance as of

6 unchanged sentences

Deferred revenue, current and long-term $ 8,949 $ 767 $ ( 2,283 ) $ 7,433

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.

Unbilled accounts receivable decreased $ 0.5 million during the six months ended June 30, 2024, primarily due to the decrease in minimum annual royalties under our license agreements.

Deferred revenue decreased during the six months ended June 30, 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.

During the six months ended June 30, 2024, and 2023, we recognized $ 1.6 million and $ 2.4 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 March 31, 2024, was approximately $ 8.3 million.

The value of transaction prices allocated to remaining unsatisfied performance obligations as of June 30, 2024, was approximately $ 7.4 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.

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Property and equipment, net $ 19,876 $ 18,270

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.

Depreciation and amortization expenses related to property and equipment were $ 0.9 million and $ 0.6 million for the three months ended June 30, 2024, and 2023, respectively.

Depreciation and amortization expenses related to property and equipment were $ 1.6 million and $ 1.2 million, for the six months ended June 30, 2024, and 2023, respectively.

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

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Accrued research and development expenses 9,698 8,720

Accrued litigation settlement

Accrued securities litigation settlement

Accrued patent expenses 872 613

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Pfizer Investment

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.

During the three months ended June 30, 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.

During the six months ended June 30, 2024, we recognized $ 1.2 million of revenue from Pfizer.

We did no t recognize any revenue from Pfizer during each of the three- and six-month periods ended June 30, 2023.

As of June 30, 2024, there was approximately $ 5.0 million of related party deferred revenue ($ 2.5 million included in current liabilities and $ 2.5 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.

Edge Animal Health

During the three months ended June 30, 2024, we received additional shares of convertible preferred stock pursuant to anti-dilution rights associated with the Exclusive License Agreement for Veterinary Therapeutics (as amended, the “Edge chRDNA License Agreement”) with Edge Animal Health (“Edge”), a private company and related party.

Edge issued to us 1,623,275 shares of convertible preferred stock with an estimated fair value of $ 1.6 million, based on management’s best estimate and judgment.

The Edge chRDNA License Agreement is a contract with a customer under ASC 606.

Accordingly, we recognized $ 1.6 million as revenue during each of the three- and six-month periods ended June 30, 2024.

We did not recognize any revenue in connection with the Edge chRDNA License Agreement in 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 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 option Edge exercised and paid $ 1.2 million, and we entered into the Edge Cas9 License Agreement.

We recognized $ 1.2 million of revenue in connection with the Edge Cas9 License Agreement for each of the three and six months ended June 30, 2023.

We did not recognize any revenue in connection with the Edge Cas9 License Agreement in 2024.

Operating Lease Obligations

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.

As of June 30, 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 8.1 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.

1 unchanged sentence

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,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Operating lease cost (1)

2 unchanged sentences

Total lease cost $ 1,981 $ 1,990 $ 3,997 $ 3,937

(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.

(1) Includes $ 0.6 million and $ 0.6 million of variable lease cost related to operating expenses and taxes for the three months ended June 30, 2024, and June 30, 2023, respectively.

Includes $ 1.3 million and $ 1.2 million of variable lease cost related to operating expenses and taxes for the six months ended June 30, 2024, and 2023, respectively.

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

Three Months Ended March 31,

Six Months Ended June 30,

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

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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 March 31, 2024 (in thousands):

The following table summarizes a maturity analysis of our operating lease liabilities showing the aggregate lease payments as of June 30, 2024 (in thousands):

Remainder of 2024 (1)

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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.

As of June 30, 2024, satisfaction and timing of such contingent payments is uncertain and thus cannot be reasonably estimated.

Guarantees and Indemnifications

1 unchanged sentence

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 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.

As of June 30, 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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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.

The parties filed a settlement agreement with the court on June 26, 2024, 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.

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Common stock reserved for future issuance consisted of the following:

March 31, 2024 As of

June 30, 2024 As of

December 31, 2023

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Unvested restricted stock units and performance-based restricted stock units 1,312,339 205,357

22,119,682 17,084,128

Total common stock reserved for future issuance 22,071,412 17,084,128

Shelf Registration Statement

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

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.

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

right to purchase 2,884,615 additional shares of our common stock.

The total gross proceeds from the offering were approximately $ 143.7 million ($ 134.4 million net of underwriting discounts and commissions and offering expenses).

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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).

As of June 30, 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

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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:

As of June 30, 2024, we had 6,439,947 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, 2024:

Stock Options Weighted-

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Options cancelled or forfeited ( 324,647 ) 11.38

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

Outstanding at June 30, 2024 12,040,717 $ 7.59 7.8 $ 19

Exercisable at June 30, 2024 5,262,980 $ 8.01 6.8 $ 19

Vested and expected to vest at June 30, 2024 12,040,717 $ 7.59 7.8 $ 19

(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 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.

During the three months ended June 30, 2024, and 2023, we granted 223,450 and 486,366 stock options to employees with a weighted average grant date fair value of $ 2.16 and $ 2.95 , respectively.

During the six months ended June 30, 2024, and 2023, we granted 3,137,177 and 3,022,706 stock options to employees with a weighted average grant date fair value of $ 4.42 and $ 3.94 , 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,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Volatility 75.7 % 74.7 % to 74.8 %

75.7 % to 75.9 %

74.7 % to 75.0 %

Expected term (in years) 6.0 6.0 5.0 to 6.0

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4.0 % to 4.5 %

3.5 % to 4.1 %

Expected dividend yield 0.0 % 0.0 % 0.0 % 0.0 %

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.

As of June 30, 2024, there was $ 31.1 million of unrecognized stock-based compensation expense related to employee stock options that is expected to be recognized over a weighted-average period of 2.7 years.

Restricted Stock Units

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:

During the six months ended June 30, 2024, we granted 1,143,617 restricted stock units (“RSUs”), and we 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 June 30, 2024 was as follows:

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

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Forfeited ( 21,635 ) 7.55

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

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 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.

Unvested, June 30, 2024 1,312,339 $ 6.60

On August 22, 2022, we granted PSUs to our executive officers, which will vest contingent upon the achievement of a clinical milestone for CB-010 during a performance period ending December 31, 2024, and the executive officer’s continued employment during the performance period.

As of June 30, 2024, the achievement of this milestone was not considered probable and, therefore, no stock-based compensation was recorded.

As of June 30, 2024, the total unrecognized stock-based compensation expense related to unvested RSUs was $ 6.8 million, which is expected to be recognized over the remaining weighted-average vesting period of 3.2 years.

As of June 30, 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 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.

We issued 330,002 shares of common stock under the ESPP as of June 30, 2024.

We recorded $ 0.5 million in accrued liabilities related to contributions withheld as of June 30, 2024.

Stock-Based Compensation Expense

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,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Research and development $ 1,994 $ 1,551 $ 3,610 $ 2,860

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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,

2024 2023 2024 2023

Stock options $ 3,891 $ 3,202 $ 7,379 $ 6,000

ESPP 157 189 229 331

RSUs 690 194 1,118 385

Total $ 4,738 $ 3,585 $ 8,726 $ 6,716

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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, 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.

During the six months ended June 30, 2024, and 2023, we contributed $ 0.7 million and $ 0.5 million, respectively, to our 401(k) plan.

No income tax expense was recorded during each of the three- and six-month periods ended June 30, 2024, and 2023 due to our operating losses.

Net Loss Per Share

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Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net loss $ ( 37,697 ) $ ( 29,519 ) $ ( 78,931 ) $ ( 57,563 )

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Subsequent Events

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.

On July 16, 2024, we announced that we had discontinued preclinical research activities associated with our allogeneic CAR-NK platform and reduced our workforce by 21 positions, or approximately 12 %.

In connection with the workforce reduction, we will incur approximately $ 0.5 million to $ 1.0 million in costs, consisting primarily of cash severance costs, benefits, and transition support services for impacted employees, which we expect to recognize in the third quarter of 2024.

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