Caribou Biosciences, Inc. 10-Q

Item 1. Financial Statements. CARIBOU BIOSCIENCES, INC. AND ITS SUBSIDIARIES Condensed Consolidated Balance Sheets (Unaudited) (in thousands, except share and per share amounts) September 30, 2024 December 31, 2023 ASSETS CURRENT ASSETS Cash and cash equivalents $ 31,970 $ 51,162 Marketable securities, short-term 196,208 277,665 Accounts receivable 184 148 Contract assets 798 1,425 Other receivables 1,683 2,286 Prepaid expenses and other current assets 6,583 6,155 Total current assets 237,426 338,841 NON-CURRENT ASSETS Investments in equity securities 9,272 7,753 Marketable securities, long-term 52,837 43,577 Property and equipment, net 19,565 18,270 Operating lease, right of use assets 20,493 22,182 Other assets 4,741 1,586 TOTAL ASSETS $ 344,334 $ 432,209 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES Accounts payable $ 2,704 $ 3,120 Accrued expenses and other current liabilities 25,448 21,135 Operating lease liabilities, current 1,178 1,200 Deferred revenue ($ 2,487 from related party as of September 30, 2024, and December 31, 2023) 2,829 2,847 Total current liabilities 32,159 28,302 LONG-TERM LIABILITIES Deferred revenue, net of current portion ($ 1,865 and $ 3,730 from related party as of September 30, 2024, and December 31, 2023, respectively) 3,947 6,102 MSKCC success payments liability 1,005 2,939 Operating lease liabilities, non-current 25,463 25,908 Deferred tax liabilities 557 557 Total liabilities 63,131 63,808 COMMITMENTS AND CONTINGENCIES (Note 9) STOCKHOLDERS’ EQUITY Common stock, par value $ 0.0001 per share, 300,000,000 shares authorized at September 30, 2024, and December 31, 2023; 90,552,687 and 88,448,948 shares issued and outstanding as of September 30, 2024, and December 31, 2023, respectively 9 8 Additional paid-in-capital 693,305 667,648 Accumulated other comprehensive income 789 30 Accumulated deficit ( 412,900 ) ( 299,285 ) Total stockholders’ equity 281,203 368,401 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 344,334 $ 432,209 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 1 Table of Contents CARIBOU BIOSCIENCES, INC. AND ITS SUBSIDIARIES Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (in thousands, except share and per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Licensing and collaboration revenue (including $ 622 and $ 3,488 for three and nine months ended September 30, 2024, respectively, and $ 622 and $ 1,772 for three and nine months ended September 30, 2023, respectively, from related parties) $ 2,024 $ 23,662 $ 7,917 $ 30,919 Operating expenses: Research and development 30,421 28,584 99,689 80,796 General and administrative 9,841 9,711 35,969 28,740 Total operating expenses 40,262 38,295 135,658 109,536 Loss from operations ( 38,238 ) ( 14,633 ) ( 127,741 ) ( 78,617 ) Other income: Change in fair value of equity securities ( 14 ) ( 4 ) ( 116 ) 3 Change in fair value of the MSKCC success payments liability ( 164 ) ( 139 ) 1,934 395 Other income, net 3,732 4,774 12,308 10,654 Total other income 3,554 4,631 14,126 11,052 Net loss ( 34,684 ) ( 10,002 ) ( 113,615 ) ( 67,565 ) Other comprehensive income: Net unrealized gain on available-for-sale marketable securities, net of tax 1,108 155 759 537 Net comprehensive loss $ ( 33,576 ) $ ( 9,847 ) $ ( 112,856 ) $ ( 67,028 ) Net loss per share, basic and diluted $ ( 0.38 ) $ ( 0.12 ) $ ( 1.26 ) $ ( 0.98 ) Weighted-average common shares outstanding, basic and diluted 90,455,900 83,783,992 90,034,799 68,878,921 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 2 Table of Contents CARIBOU BIOSCIENCES, INC. AND ITS SUBSIDIARIES Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) (in thousands, except share amounts) Common Stock Additional Paid-In Capital Accumulated Other Comprehensive (Loss) Income Accumulated Deficit Total Stockholders’ Equity Shares Amount BALANCE—December 31, 2023 88,448,948 $ 8 $ 667,648 $ 30 $ ( 299,285 ) $ 368,401 Issuances of common stock under ESPP 122,035 — 667 — — 667 Issuances of common stock on exercises of options 134,347 — 489 — — 489 Issuances of common stock in connection with our ATM offering, net of offering expenses 1,594,171 1 11,329 — — 11,330 Issuances of common stock upon vesting of RSUs 15,000 — — — — — Stock-based compensation expense — — 3,988 — — 3,988 Net loss — — — — ( 41,234 ) ( 41,234 ) Other comprehensive loss — — — ( 352 ) — ( 352 ) BALANCE—March 31, 2024 90,314,501 $ 9 $ 684,121 $ ( 322 ) $ ( 340,519 ) $ 343,289 Issuances of common stock under ESPP 400 — 2 — — 2 Issuances of common stock on exercises 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 Issuances of common stock under ESPP 138,743 — 246 — — 246 Issuances of common stock upon vesting of RSUs 51,173 — — — — — Stock-based compensation expense — — 4,069 — — 4,069 Net loss — — — — ( 34,684 ) ( 34,684 ) Other comprehensive income — — — 1,108 — 1,108 BALANCE—September 30, 2024 90,552,687 $ 9 $ 693,305 $ 789 $ ( 412,900 ) $ 281,203 BALANCE—December 31, 2022 61,029,184 $ 6 $ 499,598 $ ( 1,518 ) $ ( 197,215 ) $ 300,871 Issuances of common stock under ESPP 70,271 — 404 — — 404 Issuances of common stock on exercises of options 55,433 — 115 — — 115 Issuances of common stock in connection with our ATM 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 Issuances of common stock on exercises of options 86,085 — 236 — — 236 Issuances 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 Issuances of common stock under ESPP 68,183 — 382 — — 382 Issuances of common stock on exercises of options 83,407 — 372 — — 372 Issuances of common stock upon vesting of RSUs 63,596 — — — — — Issuances of common stock in connection with follow-on public offering, net of offering expenses 22,115,384 2 134,423 — — 134,425 Stock-based compensation expense — — 3,478 — — 3,478 Net loss — — — — ( 10,002 ) ( 10,002 ) Other comprehensive income — — — 155 — 155 BALANCE—September 30, 2023 88,430,609 $ 8 $ 664,021 $ ( 981 ) $ ( 264,780 ) $ 398,268 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 Table of Contents CARIBOU BIOSCIENCES, INC. AND ITS SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands) Nine Months Ended September 30, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 113,615 ) $ ( 67,565 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 2,743 2,785 Loss (gain) on disposal of fixed assets 4 ( 34 ) Non-cash consideration for licensing and collaboration revenue ( 1,634 ) ( 61 ) Change in fair value of equity securities 116 ( 3 ) Stock-based compensation expense 12,795 10,194 Change in fair value of MSKCC success payments liability ( 1,934 ) ( 395 ) Acquired in-process research and development 1,625 — Accretion of discounts on investments in marketable securities, net ( 3,708 ) ( 6,042 ) Non-cash lease expense 1,690 1,551 Changes in operating assets and liabilities: Accounts receivable ( 36 ) ( 931 ) Contract assets 628 588 Other receivables 603 ( 130 ) Prepaid expenses and other current assets ( 428 ) 852 Other assets ( 3,155 ) ( 30 ) Accounts payable ( 125 ) 1,089 Accrued expenses and other current liabilities 4,341 2,848 Deferred revenue, current and long-term ( 2,173 ) ( 16,337 ) Operating lease liabilities ( 467 ) ( 291 ) Net cash used in operating activities ( 102,730 ) ( 71,912 ) CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sales and maturities of marketable securities 325,553 283,193 Purchases of marketable securities ( 248,889 ) ( 310,566 ) Purchases of property and equipment ( 4,362 ) ( 9,336 ) Payments to acquire in-process research and development ( 1,625 ) — Net cash provided by (used in) investing activities 70,677 ( 36,709 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from public follow-on public offering, net of offering expenses — 134,536 Proceeds from issuances of common stock pursuant to private placement with Pfizer — 17,290 Proceeds from exercises of stock options 619 1,508 Proceeds from issuances of common stock under ESPP 913 — Proceeds from issuances of common stock related to our ATM, net of offering expenses 11,329 1,007 Net cash provided by financing activities 12,861 154,341 NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 19,192 ) 45,720 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — BEGINNING OF PERIOD 51,208 58,384 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — END OF PERIOD $ 32,016 $ 104,104 RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH Cash and cash equivalents $ 31,970 $ 104,058 Restricted cash 46 46 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ON THE BALANCE SHEET $ 32,016 $ 104,104 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for income taxes $ — $ 170 SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Purchases of property and equipment included in accounts payable and accrued expenses $ 373 $ 556 Offering costs included in accrued expenses $ — $ 113 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 Table of Contents CARIBOU BIOSCIENCES, INC. AND ITS SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) 1. Description of the Business, Organization, and Liquidity Business and Organization Caribou Biosciences, Inc. (“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 platform as readily available therapeutic treatments for patients. We incorporated in October 2011 as a Delaware corporation and are headquartered in Berkeley, California. We have four wholly owned subsidiaries: Antler Holdco, LLC, incorporated in Delaware in April 2019; Microbe Holdco, LLC, incorporated in Delaware in June 2020; Arboreal Holdco, LLC, incorporated in Delaware in November 2020; and Biloba Holdco, LLC, incorporated in Delaware in April 2021. Our wholly owned subsidiaries hold interests in our equity investments and do not have operating activities. Liquidity We have incurred operating losses and negative cash flows from operations since our inception and we had an accumulated deficit of $ 412.9 million as of September 30, 2024. During the nine months ended September 30, 2024, we incurred a net loss of $ 113.6 million and used $ 102.7 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 $ 281.0 million as of September 30, 2024, will be sufficient to fund our current operating plan for at least the next 12 months from the date of this Quarterly Report on Form 10-Q (“Form 10-Q”). 2. Summary of Significant Accounting Policies There have been no changes to the significant accounting policies disclosed in Note 2 to the annual consolidated financial statements for the year ended December 31, 2023, included in our Annual Report on Form 10-K (“Form 10-K”). Basis of Presentation and Principles of Consolidation 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 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 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, 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. 5 Table of Contents Segments 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. All long-lived assets are maintained in the United States. Concentrations of Credit Risk and Other Uncertainties 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 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: Revenue Revenue Accounts Receivable and Contract Assets Three Months Ended Nine Months Ended As of September 30, 2024 As of December 31, 2023 September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Licensee A 34.9 % * 24.2 % * 68.5 % 47.5 % Licensee B * 90.8 % * 79.1 % * * Licensee C 30.7 % * 23.6 % * * * Licensee D * * 20.5 % * * * Licensee E 14.0 % * * * * * Licensee F 11.2 % * * * * * Licensee G * * * * 15.9 % * Total 90.8 % 90.8 % 68.3 % 79.1 % 84.4 % 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 contract assets should be impaired. No allowance for credit losses or contract asset impairment was recorded as of September 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”). 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 6 Table of Contents 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 new guidance and do not expect that the adoption of ASU 2023-09 will have a material impact on our consolidated financial statements. 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. GAAP. 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. 3. Fair Value Measurements and Fair Value of Financial Instruments The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows: Level 1 —Quoted prices in active markets for identical assets or liabilities. Level 2 —Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 —Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets and liabilities measured at fair value are classified in their entireties based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires our management to make judgments and consider factors specific to the asset or liability. Our financial instruments consist of Level 1, Level 2, and Level 3 financial instruments. 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. When observable market prices for identical securities are not available, such instruments are priced using benchmark curves, benchmarking of like securities, sector groupings, matrix pricing, and valuation models. These valuation models are proprietary to the pricing providers or brokers and incorporate a number of inputs including, in approximate order of priority: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. 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 valuation 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, 2024, and 2023. Level 1 financial instruments are comprised of money market fund investments and U.S. Treasury bills. Level 2 financial instruments are comprised of commercial paper, corporate debt securities, and U.S. government agency bonds. Financial assets and liabilities are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies, or similar techniques, and at least one significant model assumption or input is unobservable. Level 3 financial instruments consist of the MSKCC success payments liability. 7 Table of Contents 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, 2024 Total Level 1 Level 2 Level 3 Assets: U.S. Treasury bills ($ 5,596 included in cash and cash equivalents) $ 193,812 $ 193,812 $ — $ — U.S. government agency bonds ($ 3,973 included in cash and cash equivalents) 31,515 — 31,515 — Commercial paper ($ 5,990 included in cash and cash equivalents) 30,203 — 30,203 — Money market fund investments (included in cash and cash equivalents) 16,411 16,411 — — Corporate debt securities 9,074 — 9,074 — Total fair value of assets $ 281,015 $ 210,223 $ 70,792 $ — Liabilities: MSKCC success payments liability $ 1,005 $ — $ — $ 1,005 Total fair value of liabilities $ 1,005 $ — $ — $ 1,005 Fair Value Measurements as of December 31, 2023 Total Level 1 Level 2 Level 3 Assets: U.S. 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 — U.S. government agency bonds 40,185 — 40,185 — 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 $ — Liabilities: MSKCC success payments liability $ 2,939 $ — $ — $ 2,939 Total fair value of liabilities $ 2,939 $ — $ — $ 2,939 8 Table of Contents The fair value and amortized cost of cash equivalents and available-for-sale marketable securities by major security type as of September 30, 2024, and December 31, 2023, are presented in the following tables (in thousands): As of September 30, 2024 Amortized Cost Basis Unrealized Gains Unrealized Losses Estimated Fair Value U.S. Treasury bills ($ 5,596 included in cash and cash equivalents) $ 193,198 $ 617 $ ( 3 ) $ 193,812 U.S. government agency bonds ($ 3,973 included in cash and cash equivalents) 31,380 136 ( 1 ) 31,515 Commercial paper ($ 5,990 included in cash and cash equivalents) 30,173 32 ( 2 ) 30,203 Money market fund investments (included in cash equivalents) 16,411 — — 16,411 Corporate debt securities 9,064 10 — 9,074 Total cash equivalents and marketable securities $ 280,226 $ 795 $ ( 6 ) $ 281,015 Classified as: Cash and cash equivalents $ 31,970 Marketable securities, short-term 196,208 Marketable securities, long-term 52,837 Total cash equivalents and marketable securities $ 281,015 As of December 31, 2023 Amortized Cost Basis Unrealized Gains Unrealized Losses Estimated Fair Value U.S. Treasury bills ($ 23,527 included in cash and cash equivalents) $ 262,328 $ 331 $ ( 220 ) $ 262,439 Commercial paper ($ 9,759 included in cash and cash equivalents) 40,386 — ( 13 ) 40,373 U.S. government agency bonds 40,295 1 ( 111 ) 40,185 Money market fund investments (included in cash equivalents) 17,876 — — 17,876 Corporate debt securities 11,489 50 ( 8 ) 11,531 Total cash equivalents and marketable securities $ 372,374 $ 382 $ ( 352 ) $ 372,404 Classified as: Cash and cash equivalents $ 51,162 Marketable securities, short-term 277,665 Marketable securities, long-term 43,577 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): September 30, 2024 Due in less than one year $ 196,208 Due in one to five years 52,837 Total $ 249,045 9 Table of Contents The following table sets forth a summary of the changes in the fair value of our Level 3 financial liability (in thousands): MSKCC Success Payments Liability Balance at December 31, 2023 $ 2,939 Change in fair value ( 1,934 ) Balance at September 30, 2024 $ 1,005 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 until the success payments liability is paid or expires. We recorded a $ 0.2 million and $ 0.1 million change in the fair value of the MSKCC success payments liability as a loss in other income in our unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended September 30, 2024, and 2023, respectively. We recorded a $ 1.9 million and $ 0.4 million change in the fair value of the MSKCC success payments liability as a gain in other income in our unaudited condensed consolidated statements of operations and comprehensive loss for the nine months ended September 30, 2024, and 2023, respectively. The table below summarizes key assumptions used in the valuation of the MSKCC success payments liability: As of December 31, 2023 Fair value of common stock $ 5.73 Risk-free interest rate 3.88 % Expected volatility 79 % Probability of achieving multiple of Initial Share Price (1) 5.2 % to 18.1 % Expected term (years) 3.7 to 5.2 (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 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, 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 $ 1.96 per share. 4. Significant Agreements 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 September 30, 2023, we recognized $ 21.5 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 nine months ended September 30, 2023, we recognized $ 24.5 million in revenue under the AbbVie Agreement. No revenue was recognized under the AbbVie Agreement during each of the three- and nine-month periods ended September 30, 2024, as the AbbVie Agreement was terminated effective October 25, 2023. As of September 30, 2024, and December 31, 2023, we had no amounts recorded in 10 Table of Contents 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; sublicensing fees; obligations to reimburse for patent prosecution and maintenance fees; success payments; regulatory clinical and commercial milestones; and royalty payments. 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, 2024, and 2023, we recorded $ 0.2 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 license agreements. For the nine months ended September 30, 2024, and 2023, we recorded $ 1.8 million and $ 1.2 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 September 30, 2024, and 2023, we recorded $ 0.1 million and $ 0.4 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 $ 0.1 million, respectively. For the nine months ended September 30, 2024, and 2023, we recorded $ 0.5 million and $ 2.2 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 $ 0.9 million and $ 1.3 million, respectively. As of September 30, 2024, certain license and assignment agreements included potential future payments from us for development, regulatory, and sales milestones totaling approximately $ 159.9 million. 5. Revenue 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, 2024, and 2023 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 United States $ 1,657 $ 23,285 $ 7,370 $ 30,416 Rest of world 367 377 547 503 Total $ 2,024 $ 23,662 $ 7,917 $ 30,919 During the three months ended September 30, 2024, we recognized $ 1.4 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 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 now-terminated AbbVie Agreement. During the nine months ended September 30, 2024, we recognized $ 6.0 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 1.9 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 now-terminated AbbVie Agreement. 11 Table of Contents Contract Balances Accounts receivable relate to our right to consideration for performance obligations completed (or partially completed) for which we have an unconditional right to consideration. Our accounts receivable balances represent amounts that we billed to our licensees with invoices outstanding as of the end of a reporting period. 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 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. As of September 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. (“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 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 nine months ended September 30, 2024 (in thousands): Balance as of December 31, 2023 Additions Deductions Balance as of September 30, 2024 Accounts receivable $ 148 $ 4,757 $ ( 4,721 ) $ 184 Contract assets: Unbilled accounts receivable $ 1,425 $ 2,663 $ ( 3,290 ) $ 798 Contract liabilities: Deferred revenue, current and long-term $ 8,949 $ 1,250 $ ( 3,423 ) $ 6,776 During the nine months ended September 30, 2024, and 2023, we recognized $ 2.2 million and $ 23.2 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, 2024, was approximately $ 6.8 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 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. 12 Table of Contents 6. Balance Sheet Items Other receivables consisted of the following (in thousands): September 30, 2024 December 31, 2023 Patent cost reimbursements $ 936 $ 1,403 Accrued interest on marketable securities 747 702 Other — 181 Total $ 1,683 $ 2,286 Prepaid expenses and other current assets consisted of the following (in thousands): September 30, 2024 December 31, 2023 Prepaid contract manufacturing and clinical costs $ 3,279 $ 3,942 Prepaid insurance 1,100 993 Other 2,204 1,220 Total $ 6,583 $ 6,155 Property and equipment, net, consisted of the following (in thousands): September 30, 2024 December 31, 2023 Lab equipment $ 18,276 $ 15,581 Leasehold improvements 11,493 2,235 Computer equipment 906 895 Furniture and equipment 697 499 Construction in progress — 8,204 Total property and equipment, gross 31,372 27,414 Less: accumulated depreciation and amortization ( 11,807 ) ( 9,144 ) Property and equipment, net $ 19,565 $ 18,270 Depreciation and amortization expenses related to property and equipment were $ 1.1 million and $ 1.6 million for the three months ended September 30, 2024, and 2023, respectively. Depreciation and amortization expenses related to property and equipment were $ 2.7 million and $ 2.8 million, for the nine months ended September 30, 2024, and 2023, respectively. Accrued expenses and other current liabilities consisted of the following (in thousands): September 30, 2024 December 31, 2023 Accrued research and development expenses $ 12,150 $ 8,720 Accrued employee compensation and related expenses 7,087 9,517 Accrued securities litigation settlement 3,900 — Accrued patent expenses 839 613 Accrued expenses related to sublicensing revenues 483 802 Credit card liability 16 377 Other 973 1,106 Total $ 25,448 $ 21,135 13 Table of Contents 7. Related Party Transactions 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 During the three months ended September 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 nine months ended September 30, 2024, we recognized $ 1.9 million of revenue from Pfizer. 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, 2024, there was approximately $ 4.4 million of related party deferred revenue ($ 2.5 million included in current liabilities and $ 1.9 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 In June 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, “Edge chRDNA License Agreement”) with Edge Animal Health (“Edge”), a private company and related party. Edge issued 1,623,275 shares of convertible preferred stock to us 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. We did no t recognize any revenue in connection with the Edge chRDNA License Agreement during the three months ended September 30, 2024. We recognized $ 1.6 million as revenue during the nine months ended September 30, 2024. We did no t 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) (“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 did no t recognize any revenue in connection with the Edge Cas9 License Agreement in 2024. We did no t 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. 8. Leases Operating Lease Obligations As of September 30, 2024, we had operating leases for our laboratory and office spaces in Berkeley, California, consisting of approximately 75,000 square feet, with remaining lease terms up to 7.8 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 unaudited condensed consolidated statements of operations and comprehensive loss, were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Operating lease cost (1) $ 1,950 $ 1,937 $ 5,822 $ 5,749 Short-term lease cost 63 63 188 188 Total lease cost $ 2,013 $ 2,000 $ 6,010 $ 5,937 (1) Includes $ 0.7 million of variable lease cost related to operating expenses and taxes for each of the three- month periods ended September 30, 2024, and September 30, 2023. Includes $ 2.0 million and $ 1.9 million of variable lease cost related to operating expenses and taxes for the nine months ended September 30, 2024, and 2023, respectively. 14 Table of Contents Supplemental information related to our leases was as follows (in thousands): Nine Months Ended September 30, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 2,624 $ 2,597 The following table summarizes the weighted-average remaining lease term and weighted-average discount rate for our corporate laboratory and office leases: September 30, 2024 December 31, 2023 Weighted-average remaining lease term (years) 6.7 7.4 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, 2024 (in thousands): Remainder of 2024 (1) $ 797 2025 4,411 2026 5,720 2027 5,922 2028 6,122 Thereafter 15,993 Total future undiscounted lease payments 38,965 Less imputed interest ( 12,324 ) Total discounted lease payments 26,641 Less current portion of lease liability ( 1,178 ) Noncurrent portion of lease liability $ 25,463 (1) Reflects an offset of $ 0.3 million related to incentives expected to be received in 2024. 9. Commitments and Contingencies 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 September 30, 2024, satisfaction and timing of such contingent payments are uncertain and thus cannot be reasonably estimated. Guarantees and Indemnifications 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. As of September 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. 15 Table of Contents Litigation From time to time, we may become involved in litigation arising in the ordinary course of business. We record a liability for such litigation when it is probable that future losses will be incurred and if such losses can be reasonably estimated. Significant judgment by us is required to determine both probability and the estimated amount. On April 11, 2023, a putative class action lawsuit was filed in the U.S. 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 23-cv-01742 (“Bergman Case”). The Bergman complaint challenged 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 Securities Exchange Act of 1934, as amended (“Exchange Act”). On September 18, 2023, plaintiffs filed an amended complaint adding the initial public offering (“IPO”) underwriters as defendants and making substantially the same allegations as the original complaint. 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 was 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 our current and former officers, current and former members of our board of directors, the IPO underwriters, and the other named defendant. The parties filed a settlement agreement with the court on June 26, 2024, and, on October 15, 2024, the court issued an order preliminarily approving the settlement and setting a final settlement approval hearing for February 18, 2025. 10. Common Stock Common stock reserved for future issuances consisted of the following: As of September 30, 2024 As of December 31, 2023 Stock options, issued and outstanding 11,611,364 9,410,404 Stock options, authorized for future issuances 6,827,620 5,952,012 Stock available under ESPP 2,139,666 1,516,355 Unvested RSUs and PSUs 1,302,846 205,357 Total common stock reserved for future issuances 21,881,496 17,084,128 Shelf Registration Statement On August 9, 2022, we filed a shelf registration statement on Form S-3 (“Shelf Registration Statement”) with the 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). 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, 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. 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 total gross proceeds from the offering were approximately $ 143.7 million ($ 134.4 million net of underwriting discounts and commissions and offering expenses). The shares were issued pursuant to the Shelf Registration Statement. At-the-market Equity Offering Program 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 September 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). 16 Table of Contents 11. Stock-Based Compensation Equity Incentive Plans 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 September 30, 2024, we had 6,827,620 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, 2024: Stock Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) (1) Outstanding at December 31, 2023 9,410,404 $ 8.03 8.0 $ 6,432 Options granted 3,528,702 5.97 Options exercised ( 182,217 ) 3.39 Options cancelled or forfeited ( 1,145,525 ) 8.35 Outstanding at September 30, 2024 11,611,364 $ 7.44 7.4 $ 41 Exercisable at September 30, 2024 5,810,961 $ 8.03 6.1 $ 41 Vested and expected to vest at September 30, 2024 11,611,364 $ 7.44 7.4 $ 41 (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, 2024, and 2023, we granted 391,525 and 384,095 stock options to employees with a weighted average grant date fair value of $ 1.49 and $ 3.64 , respectively. During the nine months ended September 30, 2024, and 2023, we granted 3,528,702 and 3,406,801 stock options to employees with a weighted average grant date fair value of $ 4.09 and $ 3.91 , 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 September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Volatility 75.8 % 74.2 % to 74.6 % 75.7 % to 75.9 % 74.2 % to 75.0 % Expected term (in years) 6.0 6.0 5.0 to 6.0 5.0 to 6.0 Risk-free interest rate 3.7 % to 3.8 % 4.1 % to 4.6 % 3.7 % to 4.5 % 3.5 % to 4.6 % Expected dividend yield 0.0 % 0.0 % 0.0 % 0.0 % As of September 30, 2024, there was $ 24.5 million of unrecognized stock-based compensation expense related to employee stock options that is expected to be recognized over a weighted-average period of 2.6 years. 17 Table of Contents Restricted Stock Units During the nine months ended September 30, 2024, we granted 1,342,842 restricted stock units (“RSUs”) to employees, and we did not grant any performance-based RSUs (“PSUs”) to employees under the 2021 Plan. A summary of the status of and change in unvested RSUs and PSUs as of September 30, 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 1,342,842 5.71 Vested ( 66,173 ) 10.07 Forfeited ( 179,180 ) 7.17 Unvested, September 30, 2024 1,302,846 $ 5.73 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 September 30, 2024, the achievement of this milestone was not considered probable and, therefore, no stock-based compensation was recorded. As of September 30, 2024, the total unrecognized stock-based compensation expense related to unvested RSUs was $ 5.7 million, which is expected to be recognized over the remaining weighted-average vesting period of 2.9 years. As of September 30, 2024, there was approximately $ 0.4 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 issued 468,745 shares of common stock under the ESPP as of September 30, 2024. We recorded $ 0.1 million in accrued liabilities related to contributions withheld as of September 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 September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Research and development $ 1,638 $ 1,464 $ 5,248 $ 4,324 General and administrative 2,431 2,014 7,547 5,870 Total $ 4,069 $ 3,478 $ 12,795 $ 10,194 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, 2024 2023 2024 2023 Stock options $ 3,530 $ 3,188 $ 10,909 $ 9,188 ESPP 80 96 309 427 RSUs 459 194 1,577 579 Total $ 4,069 $ 3,478 $ 12,795 $ 10,194 12. 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 (“Tax Code”). Our 401(k) plan is available to all employees and allows participants to defer a portion of 18 Table of Contents 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 nine months ended September 30, 2024, and 2023, we contributed $ 0.9 million and $ 0.8 million, respectively, to our 401(k) plan. 13. Income Taxes No income tax expense was recorded during each of the three- and nine-month periods ended September 30, 2024, and 2023 due to our operating losses. 14. Net Loss Per Share The following table sets forth the computation of the basic and diluted net loss per share (in thousands, except share and per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Numerator: Net loss $ ( 34,684 ) $ ( 10,002 ) $ ( 113,615 ) $ ( 67,565 ) Denominator: Weighted-average common shares outstanding used to compute net loss per share, basic and diluted 90,455,900 83,783,992 90,034,799 68,878,921 Net loss per share, basic and diluted $ ( 0.38 ) $ ( 0.12 ) $ ( 1.26 ) $ ( 0.98 ) Because we were in a net loss position for all periods presented, basic net loss per share is the same as diluted net loss per share for all periods, as the inclusion of all common stock equivalents outstanding would have been anti-dilutive. Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows: As of September 30, 2024 As of September 30, 2023 Stock options outstanding 11,611,364 9,523,394 RSUs issued and outstanding 1,259,377 168,438 Shares committed under ESPP 304,434 134,276 13,175,175 9,826,108 15. Restructuring Charge 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 %. The workforce reduction was completed during the third quarter of 2024. As a result, we recorded a total of $ 0.6 million in non-recurring restructuring charges during the three months ended September 30, 2024, consisting primarily of cash severance costs, continuation of benefits, and transition support services for impacted employees. 19 Table of Contents