What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-02-23 compared with 2022-02-24 · 331 added, 329 removed, 907 unchanged (42% of the section changed)

8 unchanged sentences

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

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

assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

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

41 unchanged sentences

Not applicable.

Certain information required by Part III is omitted from this Annual Report on Form 10-K and is incorporated by reference from our definitive proxy statement to be filed with the SEC with respect to our 2022 Annual Meeting of Stockholders, pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended, which we expect to file with the SEC no later than April 30, 2022.

Certain information required by Part III is omitted from this Annual Report on Form 10-K and is incorporated by reference from our definitive proxy statement to be filed with the SEC with respect to our 2023 Annual Meeting of Stockholders, pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended, which we expect to file with the SEC no later than May 1, 2023.

Directors, Executive Of ficers and Corporate Governance

37 unchanged sentences

Consolidated Statements of Stockholders’

Bookmark not defined.

Consolidated Statements of Cash Flows

23 unchanged sentences

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition –

Collaboration Arrangements –

Refer to Notes 2 and 9 to the financial statements and Investment Valuation –

Rewrite Asset Acquisition - Contingent Consideration Liability –

Refer to Notes 2, 4, and 11 to the financial statements

Critical Audit Matter Description

The Company recognizes collaboration revenue on license and collaboration agreements as they satisfy performance obligations and transfer control of goods and services to the customer.

During 2021, the Company entered into two new license and collaboration agreements with counterparties in exchange for a non-controlling equity ownership in each respective counterparty.

This resulted in management applying judgments in determining the accounting for these arrangements.

Specifically, management applied judgment in (1) identifying the performance obligations

within the arrangements and (2) measuring the arrangement consideration.

Measuring the arrangement consideration required management to estimate the fair value of the equity interests received, which were equity interests in private entities that did not have readily determinable market values.

The Company recognized $77.7 million of deferred revenue at the inception of the arrangements, which represented the fair value of the equity interests received.

Auditing the Company’s accounting for revenues pertaining to the new arrangements required an increased extent of effort and a high degree of auditor judgment due to the complex and judgmental nature of evaluating the performance obligations included within the license and collaboration agreements.

Additionally, given management used unobservable inputs to estimate the fair value of the equity interests received, performing audit procedures to evaluate these inputs required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

In February 2022, the Company completed the acquisition of Rewrite Therapeutics, Inc.

(“Rewrite”) and the transaction was accounted for as an asset acquisition.

Pursuant to the terms of the agreement to acquire Rewrite (the “Rewrite Merger Agreement”), the Company may be required to make a payment to the previous stockholders and option holders of Rewrite in the form of the Company’s common stock based on the achievement of a research milestone.

As this milestone is payable in the

Company’s common stock, the contingent consideration qualifies as a liability under ASC 480, Distinguishing Liabilities from Equity .

As of the acquisition date and as of December 31, 2022, the Company recorded an estimated liability for the acquisition-related contingent consideration at its fair value.

The Company estimated the fair value using unobservable inputs by applying a probability-based valuation model.

The key assumptions management used in the valuation model are the probability and estimated timing of achieving the research milestone.

These assumptions are not observable in the market and therefore represent Level 3 measurements within the fair value hierarchy.

Given that the fair value of the Rewrite contingent consideration liability is estimated based on unobservable inputs and is sensitive to changes in the probability and timing of milestone achievement, auditing the key assumptions required a high degree of auditor judgment and additional audit procedures, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our principal audit procedures related to the Company’s revenue recognition and valuation of the equity interests received included the following, among others:

We tested the effectiveness of controls over the Company’s processes for assessing the accounting treatment of new collaboration agreements and controls over the valuation of the equity interests received.

We obtained and read the contracts and other documents related to each arrangement.

We tested management’s identification of the promises for completeness, including the identification of distinct performance obligations.

For each performance obligation identified, we held corroborative inquires with individuals involved in the negotiation of the agreement and those responsible for overseeing the arrangement to confirm our understanding of those performance obligations as well as the Company’s assertions regarding whether those performance obligations are distinct or combined.

We tested the fair value of the equity interests received in exchange for entering into each arrangement.

For each equity interest received, and with the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology, (2) critical valuation and business assumptions and (3) tested the mathematical accuracy of the underlying valuations.

Our principal audit procedures related to the Rewrite contingent consideration liability included the following, among others:

We read the Rewrite Merger Agreement and other documents related to the acquisition to understand the terms of the contingent consideration obligation and compared the contract terms to the valuation model to evaluate consistency.

We tested the design, implementation, and effectiveness of controls over management’s review of the inputs and assumptions used in the valuation of the Rewrite contingent consideration liability, including the probability and timing of achievement of the research milestone.

With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology.

We also assessed the qualification, competence and objectivity of the external valuation professionals engaged by the Company.

We inquired of management and the Company’s scientific personnel to understand the milestone and the underlying assumptions, including current progress of development and underlying data associated with development efforts and timing of the related milestone.

We evaluated the reasonableness of management’s assumptions of the probability and timing of achievement of the research milestone by reviewing internal communications to management and the board of directors.

We evaluated whether management’s assumptions used for the research milestone were consistent with evidence obtained in other areas of the audit.

/s/ Deloitte & Touche LLP

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Equity method investment

Investments and other assets ($ 10.0 million and $ 0 million from related party)

Investments and other assets

LIABILITIES AND STOCKHOLDERS’

1 unchanged sentence

Accounts payable

Accrued expenses

Accrued expenses ($ 1.6 million and $ 0 million due to related party)

Current portion of operating lease liability

3 unchanged sentences

Long-term operating lease liability

Contingent consideration liability

Commitments and contingencies (Note 8)

5 unchanged sentences

Additional paid-in capital

Accumulated other comprehensive (loss)/income

Accumulated other comprehensive loss

Accumulated deficit

3 unchanged sentences

INTELLIA THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS O F OPERATIONS AND COMPREHENSIVE LOSS

CONSOLIDATED STATEMENTS OF OP ERATIONS AND COMPREHENSIVE LOSS

(Amounts in thousands except per share data)

7 unchanged sentences

Other (expense) income, net:

Loss from equity method investment

Interest income

Loss from equity method investment

Change in fair value of contingent consideration

Total other (expense) income, net

1 unchanged sentence

Weighted average shares outstanding, basic and diluted

Other comprehensive (loss) income:

Unrealized (loss) gain on marketable securities

Other comprehensive loss:

Unrealized loss on marketable securities

Other comprehensive loss from equity method investment

7 unchanged sentences

Stockholders’

(Loss) Income

Income (Loss)

Balance at December 31, 2019

Retroactive adjustment to beginning accumulated deficit for

adoption of ASC 842

Issuance of common stock through follow-on offerings,

net of issuance costs of $ 669

Issuance of common stock to Regeneron

Issuance of common stock through at-the-market offerings, net

1 unchanged sentence

Exercise of stock options

Vesting of restricted stock units

Issuance of shares under employee stock purchase plan

Equity-based compensation

Other comprehensive income - unrealized gain on marketable securities

Other comprehensive loss - unrealized loss on marketable securities

Balance at December 31, 2020

1 unchanged sentence

net of issuance costs of $ 284

Issuance of common stock to Regeneron

Issuance of common stock through at-the-market offerings, net

5 unchanged sentences

Other comprehensive loss - unrealized loss on marketable securities

Other comprehensive loss - equity method investment

Balance at December 31, 2021

2 unchanged sentences

Issuance of common stock through at-the-market offerings, net

of issuance costs of $ 52

of issuance costs of $ 164 - 2019 Sale Agreement

Issuance of common stock through at-the-market offerings, net

of issuance costs of $ 125 - 2022 Sale Agreement

Exercise of stock options

6 unchanged sentences

INTELLIA THERAPEUTICS, INC.

CONSOLIDATED STATEM ENTS OF CASH FLOWS

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

3 unchanged sentences

Depreciation and amortization

(Gain) loss on disposal of property and equipment

Equity-based compensation

Amortization/(accretion) of investment premiums/(discounts)

Amortization of investment premiums

Loss from equity method investment

Deferral of equity method investment intra-entity profit on sales

Loss on disposal of property and equipment

Change in fair value of contingent consideration

In-process research and development charge

Changes in operating assets and liabilities:

11 unchanged sentences

Maturities of marketable securities

Proceeds from sale of property and equipment

Acquired in-process research and development, net of cash acquired of $ 287

Investment in Kyverna Therapeutics, Inc.

Net cash (used in) provided by investing activities

Net cash provided by (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

7 unchanged sentences

Net cash provided by financing activities

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

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

Cash and cash equivalents and restricted cash equivalents, beginning of period

7 unchanged sentences

Right-of-use assets acquired under operating leases

Contingent consideration liability assumed in asset acquisition

Non-cash trade-in of property and equipment

Non-cash contribution of intellectual property to AvenCell Therapeutics, Inc.

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(“Intellia”

or the “Company”) is a leading clinical-stage genome editing company, focused on developing novel, potentially curative CRISPR/Cas9-based therapeutics.

CRISPR/Cas9, an acronym for C lustered, R egularly I nterspaced S hort P alindromic R epeats (“CRISPR”)/CRISPR associated 9 (“Cas9”), is a technology for genome editing, the process of altering selected sequences of genomic deoxyribonucleic acid (“DNA”).

To realize the transformative potential of CRISPR/Cas9-based technologies, Intellia is building a full-spectrum genome editing company, by leveraging its modular platform, to advance in vivo and ex vivo therapies for diseases with high unmet need.

For the Company's in vivo programs to address genetic diseases, intravenously administered CRISPR is used as the therapy, in which the Company's proprietary delivery technology enables highly precise editing of disease-causing genes directly within specific target tissues.

For the Company's ex vivo programs to address immuno-oncology and autoimmune diseases, CRISPR is used to create the therapy by engineering cells outside of the body.

The Company's deep scientific, technical and clinical development experience, along with its robust intellectual property (“IP”) portfolio, enables it to unlock broad therapeutic applications of CRISPR/Cas9 and related technologies to create new classes of genetic medicine.

or the “Company”) is a leading clinical-stage genome editing company focused on developing potentially curative therapies using CRISPR/Cas9-based technologies.

CRISPR/Cas9, an acronym for C lustered, R egularly I nterspaced S hort P alindromic R epeats (“CRISPR”)/ C RISPR a ssociated 9 (“Cas9”), is a technology for genome editing, the process of altering selected sequences of genomic deoxyribonucleic acid (“DNA”).

To fully realize the transformative potential of CRISPR/Cas9-based technologies, Intellia is building a full-spectrum genome editing company, by leveraging its modular platform, to advance in vivo and ex vivo therapies for diseases with high unmet need by pursuing two primary approaches.

For in vivo applications to address genetic diseases, the Company deploys CRISPR/Cas9 as the therapy that targets cells within the body.

In parallel, the Company is developing ex vivo applications to address immuno-oncology and autoimmune diseases, where we use CRISPR/Cas9 as the tool to create the engineered cell therapy.

The Company's deep scientific, technical and clinical development experience, along with its robust intellectual property (“IP”) portfolio, have enabled it to unlock broad therapeutic applications of CRISPR/Cas9 and related technologies to create new classes of genetic medicine.

The Company was founded and commenced active operations in mid-2014.

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Comprehensive loss is comprised of net loss and gain/loss on marketable securities and equity method investments.

On February 2, 2022, the Company entered into an agreement to acquire Rewrite Therapeutics, Inc., a Delaware corporation (“Rewrite”).

On the effective date of the agreement, Rewrite became a wholly-owned subsidiary of the Company.

In September 2022, Rewrite merged into Intellia, with Intellia the surviving entity.

Use of Estimates

1 unchanged sentence

GAAP”) requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes.

Significant estimates in these consolidated financial statements have been made in connection with the calculation of revenues, research and development expenses, valuation of equity and fair value method investments, and equity-based compensation expense.

The Company bases its estimates on historical experience and various other assumptions that management believes to be reasonable under the circumstances at the time such estimates are made.

5 unchanged sentences

Fair Value Measurements

The Company’s financial instruments include cash equivalents, marketable securities, accounts receivable, accounts payable and accrued expenses.

The Company’s financial instruments include cash equivalents, marketable securities, accounts receivable, non-marketable securities, accounts payable, accrued expenses and a contingent consideration liability.

Certain of the Company’s financial assets, including cash equivalents and marketable securities, have been initially valued at the transaction price, and subsequently revalued at the end of each reporting period, utilizing third-party pricing services or other observable market data.

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The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.

As of December 31, 2021 and 2020, cash equivalents consisted of interest-bearing money market accounts.

As of December 31, 2022, cash equivalents consisted of interest-bearing money market accounts and reverse repurchase agreements.

As of December 31, 2021, cash equivalents consisted of interest-bearing money market accounts.

Restricted Cash Equivalents

The Company has restricted cash equivalents made up of money market funds held in collateral accounts that are restricted to secure letters of credit in accordance with the leases for 281 Albany Street and 17 Tudor Street, which the Company entered into in March of 2020 and July of 2021, respectively (see Note 11).

The letters of credit, in the amount of $ 1.9 million and $ 0.2 million, respectively, are required to be maintained throughout the term of the leases.

The Company has restricted cash equivalents made up of money market funds held in collateral accounts that are restricted to secure letters of credit in accordance with certain of its leases.

As of December 31, 2022, these restricted cash equivalents amounted to $ 12.0 million.

As of December 31, 2021, these restricted cash equivalents amounted to $ 2.1 million.

The letters of credit are required to be maintained throughout the term of the leases;

in some cases, the Company is able to reduce the amounts held over time.

These restricted cash equivalents are long-term in nature and are included in “Investments and other assets”

in the Company’s consolidated balance sheets.

The Company has also received funds from certain grants that were restricted as to their use and were therefore classified as restricted cash equivalents.

These funds amounted to approximately $ 2.7 million as of December 31, 2020 and were used in full prior to December 31, 2021.

Accordingly, these funds were included in “Prepaid expenses and other current assets”

in the Company’s consolidated balance sheet for the period ended December 31, 2020.

Marketable Securities

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Refer to Note 3 for further information regarding the Company’s marketable securities.

Asset Acquisitions

At the time of acquisition, the Company determines if a transaction should be accounted for as a business combination or acquisition of assets.

The Company measures and recognizes asset acquisitions that are not deemed to be business combinations based on the cost to acquire the assets, which includes transaction costs, and the consideration is allocated to the items acquired based on a relative fair value methodology.

Goodwill is not recognized in asset acquisitions.

In an asset acquisition, the cost allocated to acquire in-process research and development with no alternative future use is charged to research and development expense at the acquisition date.

Non-Marketable Equity Securities

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As of December 31, 2022, the Company’s accounts receivable were related to its collaborations with Regeneron Pharmaceuticals, Inc.

(“Regeneron”) and AvenCell Therapeutics, Inc.

(“AvenCell”), a new universal chimeric antigen receptor T (“CAR-T”) cell therapy joint venture and privately held company established by the Company, Cellex Cell Professionals GmbH (“Cellex”) and funds managed by Blackstone Life Sciences Advisors L.L.C.

(“BXLS”) .

As of December 31, 2020, Regeneron accounted for all of the Company’s accounts receivable.

(“Regeneron”), AvenCell Therapeutics, Inc.

(“AvenCell”), SparingVision SAS (“SparingVision”) and ONK Therapeutics, Ltd.

(“ONK”).

As of December 31, 2021, the Company’s accounts receivable were related to its collaborations with Regeneron and AvenCell.

Property and Equipment

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To date, the Company has not recorded any material impairment losses on long-lived assets.

Contingent Consideration

The Company accounts for contingent consideration identified in an asset acquisition, that is payable in cash and does not meet the definition of a derivative under Accounting Standard Codification (“ASC”) 815, Derivatives and Hedging , when the contingency is resolved and the consideration is paid or becomes payable.

The Company accounts for contingent consideration identified in an asset acquisition that is settled in shares of common stock under ASC 480, Distinguishing Liabilities from Equity (“ASC 480”).

The contingent consideration liability will be recorded at fair value at the end of each reporting period with changes in estimated fair values recorded in other (expense) income in the consolidated statements of operations and comprehensive loss.

The estimated fair value of the contingent consideration liability related to the acquisition of Rewrite (see Notes 4 and 11) is determined based on a probability adjusted discounted cash flow model that includes significant estimates and assumptions pertaining to research and development.

Significant changes in any of the probabilities of success or in the probabilities as to the periods in which the milestone would be achieved would result in a significantly higher or lower fair value measurement.

The Company will continue to adjust the liability for changes in fair value until the obligation is settled or the research is abandoned.

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes and for operating loss and tax credit carryforwards.

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Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) and its related amendments (collectively known as Accounting Standard Codification (“ASC”) 606 (“ASC 606”).

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

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Determining the transaction price requires significant judgment, which is discussed in further detail for each of the Company’s collaboration agreements in Note 9.

In addition, none of the Company’s contracts as of December 31, 2021 contained a significant financing component.

In addition, none of the Company’s contracts as of December 31, 2022 or 2021 contained a significant financing component.

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

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Based on this consideration, the Company accounts for its co-development and co-promotion (“Co/Co”) agreements with Regeneron and AvenCell under ASC 808.

Because ASC 808 does not provide recognition and measurement guidance for collaborative arrangements, the Company has analogized to ASC 606.

Because ASC 808 does not

provide recognition and measurement guidance for collaborative arrangements, the Company has analogized to ASC 606.

Refer to Note 9 for additional information regarding the Company’s collaboration agreements.

1 unchanged sentence

Research and development costs are expensed as incurred.

Research and development expenses consist of expenses incurred in performing research and development activities, such as salaries, equity-based compensation and benefits of employees, allocated facility-related expenses, overhead expenses, license, sublicense and milestone fees, contract research, clinical trial costs, development and manufacturing services, and other related costs.

Research and development costs consist of expenses incurred in performing research and development activities, such as salaries, equity-based compensation and benefits of employees, allocated facility-related expenses, overhead expenses, license, sublicense and milestone fees, contract research, clinical trial costs, development and manufacturing services, and other related costs.

The Company records payments made for research and development services prior to the services being rendered as prepaid expenses on the consolidated balance sheet and expenses them as the services are provided.

10 unchanged sentences

Segment Information

The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions.

The Company's chief executive officer, its chief operating decision maker, manages the Company's operations as a single segment for the purpose of assessing performance and making operating decisions.

The Company’s one business segment is the development of genome editing-based therapies.

9 unchanged sentences

In circumstances where the Company has the ability to exercise significant influence, but not control, over the operating and financial policies of an entity in which the Company has a common stock or in-substance common stock investment, the Company utilizes the equity method of accounting for recording related investment activity.

In assessing whether the Company exercises significant influence, the Company considers the nature and magnitude of the investment, the voting and protective rights the Company holds, any participation in the governance of the other entity and other relevant factors such as the presence of a collaborative or other business relationship.

In assessing whether the Company exercises significant influence, the Company considers the nature and magnitude of the investment, the voting and protective rights the Company holds, any

participation in the governance of the other entity and other relevant factors such as the presence of a collaborative or other business relationship.

Under the equity method of accounting, the Company’s investments are initially recorded at cost on the consolidated balance sheets.

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If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period and the investment is written down to fair value.

At December 31, 2021, the Company accounted for its investment in AvenCell under the equity method of accounting and no impairment charges were recognized during the year ended December 31, 2021.

At December 31, 2022 and 2021, the Company accounted for its investment in AvenCell under the equity method of accounting and no impairment charges were recognized during the years ended December 31, 2022 or 2021.

Refer to Note 10 for further details.

Recent Accounting Pronouncements –

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify the accounting for income taxes .

ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.

The Company adopted ASU 2019-12 on January 1, 2021.

The adoption did not have a material effect on the Company’s consolidated financial statements .

Recent Accounting Pronouncements

There were no accounting pronouncements adopted by the Company in 2022 other than as noted above.

Marketable Securities

23 unchanged sentences

There were no material realized gains or losses in the years ended December 31, 2022, 2021 or 2020.

The Company did not reclassify any amounts out of accumulated other comprehensive income during these periods.

The Company did not reclassify any amounts out of accumulated other comprehensive income (loss) during these periods.

T he Company generally does not intend to sell any investments prior to recovery of their amortized cost basis for any investment in an unrealized loss position.

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Total marketable securities

Certain of the Company’s financial assets, including cash equivalents, restricted cash equivalents and marketable securities, have been initially valued at the transaction price, and subsequently revalued at the end of each reporting period, utilizing third-party pricing services or other observable market data.

The pricing services utilize industry standard valuation models and observable market inputs to determine value.

After completing its validation procedures, the Company did not adjust or override any fair value measurements provided by the pricing services as of December 31, 2022 or 2021.

The Company's investment in AvenCell was recorded at fair value, determined according to Level 3 inputs in the fair value hierarchy described above.

Other financial instruments, including accounts receivable, accounts payable and accrued expense, are carried at cost, which approximates fair value due to the short duration and term to maturity.

The Company's investment in AvenCell was initially recorded at fair value, determined according to Level 3 inputs in the fair value hierarchy described above.

Refer to Note 10 for further details.

The Company's investment in SparingVision SAS (“SparingVision”) was recorded at fair value, determined according to Level 3 inputs in the fair value hierarchy described above.

The Company's investment in SparingVision was initially recorded at fair value, determined according to Level 3 inputs in the fair value hierarchy described above.

The Company's investment in Kyverna Therapeutics, Inc.

(“Kyverna”) was recorded at cost, which is representative of fair value.

(“Kyverna”) was initially recorded at cost, which is representative of fair value.

Refer to Note 10 for further details.

SparingVision and Kyverna investments (the “investments”) are included in “Investments and other assets”

on the consolidated balance sheet.

There were no changes in observable prices of these investments as of December 31, 2021.

The SparingVision and Kyverna investments (the “investments”) are included in “Investments and other assets”

on the consolidated balance sheets.

These investments are accounted for using the measurement alternative at cost minus impairment adjusted for changes in observable prices.

There were no changes in observable prices of these investments as of December 31, 2022 or 2021.

As discussed further in Note 11, under the Rewrite Merger Agreement, the Rewrite Holders are eligible to receive a $ 25.0 million research milestone payment, payable in a combination of cash and the Company’s common stock valued using the volume-weighted average price of the Company’s stock over the ten-day trading period ending two trading days prior to the date on which the applicable milestone is achieved.

The milestone payable in the Company’s common stock results in liability classification under ASC 480.

This contingent consideration liability is carried at fair value which was estimated by applying a probability-based model, which utilized inputs based on timing of achievement that were unobservable in the market.

The contingent consideration liability is classified within Level 3 of the fair value hierarchy.

The following table reconciles the change in fair value of the contingent consideration liability based on the level 3 inputs listed below (in thousands):

For the year ended December 31, 2022

Balance at February 2, 2022 (at inception)

Change in fair value

Balance at December 31, 2022

As of inception (February 2, 2022)

As of December 31, 2022

Discount rate

Probability of achievement

Projected year of achievement

Property and Equipment, Net

13 unchanged sentences

(In thousands)

Employee compensation and benefits

Accrued research and development

Employee compensation and benefits

Accrued legal and professional expenses

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Stock-based compensation

In-process research and development

Change in valuation allowance

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On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act, (the “CARES Act”) was enacted in the U.S.

The CARES Act temporarily removes the 80 % limit for taxable years beginning before 2021 to allow an net operating loss carryforward to fully offset an organization’s income.

The CARES Act temporarily removes the 80 % limit for taxable years beginning before 2021 to allow a net operating loss carryforward to fully offset an organization’s income.

The CARES Act allows a five-year carryback of any net operating loss generated in a taxable year beginning after December 31, 2017, and before January 1, 2021.

The impact of the CARES Act was not material to the Company.

As of December 31, 2021 and 2020, the Company also had state net operating loss carryforwards of $ 767.8 million and $ 373.1 million, respectively, which may be available to offset future income tax liabilities and begin to expire in 2034 .

As of December 31, 2022 and 2021, the Company also had state net operating loss carryforwards of $797.

8 million and $ 767.8 million, respectively, which may be available to offset future income tax liabilities and begin to expire in 2034 .

As of December 31, 2022 and 2021, the Company had federal tax credit carryforwards of approximately $ 63.4 million and $ 37.9 million, respectively, which begin to expire in 2034 .

1 unchanged sentence

The Company evaluated the expected realizability of its net deferred tax assets and determined that there was significant negative evidence due to its net operating loss position and insufficient positive evidence to support the realizability of these net deferred tax assets.

The Company concluded it is more likely than not that its net deferred

tax assets would not be realized in the future;

The Company concluded it is more likely than not that its net deferred tax assets would not be realized in the future;

therefore, the Company has provided a full valuation allowance against its net deferred tax asset balance as of December 31, 2022 and 2021.

The valuation allowance increased by $ 163.9 million in 2021, $ 42.4 million in 2020, $ 34.5 million in 2019.

Utilization of the net operating loss and research and development credit carryforwards may be subject to a substantial annual limitation under Section 382 of the Internal Revenue Code of 1986, as amended, due to ownership changes that have occurred previously or that could occur in the future.

These ownership changes may limit the amount of net operating loss and research and development credit carryforwards that can be utilized annually to offset future taxable income and tax expense, respectively.

The Company has not yet conducted a study to assess whether a change of control, as defined in Section 382, has occurred or whether there have been multiple changes in control since inception, due to the significant cost and complexity associated with such a study.

Any limitation may result in expiration of a portion of the net operating loss carryforward or research credit carryforward before utilization.

A full valuation allowance has been provided against the Company’s net operating loss and tax credit carryforwards and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance.

Thus, there would be no impact to the balance sheet or statement of operations if an adjustment is required.

The valuation allowance increased by $ 150.0 million in 2022, $ 163.9 million in 2021, and $ 42.4 million in 2020.

Ownership changes may limit the amount of net operating loss carryforwards or research and development tax credit carryforwards that can be utilized to offset future taxable income or tax liability.

In general, an ownership change, as defined by Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50% over a three-year period.

If the Company has experienced a change of control, utilization of the net operating loss carryforwards or research and development tax credit carryforwards would be subject to an annual limitation under Section 382 and 383 of the Code.

Any limitation may result in expiration of a portion of the net operating loss carryforwards or research and development tax credit carryforwards before utilization.

During 2022, the Company completed an assessment of the available net operating loss carryforwards and other tax attributes under Section 382.

The analysis is not expected to result in a material limitation to the Company’s tax attributes and the results of this analysis are reflected herein.

As of December 31, 2022 , the Company had no t identified any unrecognized tax benefits.

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Commitments and Contingencies

Caribou Arbitration

On October 17, 2018, the Company initiated an arbitration proceeding against Caribou Biosciences, Inc.

(“Caribou”) asserting that Caribou violated the terms and conditions of a license agreement the Company entered into with them in July 2014 related to certain IP (the “Caribou License”), as well as other contractual and legal obligations to the Company, by using and seeking to license to third parties two patent families relating to specific structural or chemical modifications of guide RNAs (“gRNAs”), that were purportedly invented or controlled by Caribou, in the Company’s exclusive human therapeutic field, before an agreed-upon cutoff date of January 30, 2018.

On September 26, 2019, the Company announced that the arbitration panel issued an interim award concluding that both the structural and chemical gRNA modification technologies were exclusively licensed to the Company by Caribou pursuant to the Caribou License.

Nevertheless, the arbitration panel, solely with respect to the clinically modified gRNAs, stated that it will declare that Caribou has an equitable “leaseback”, which it described as exclusive, perpetual and worldwide (the “Caribou Award”).

The Caribou Award does not include the structural guide modifications IP also at issue in the arbitration, any other IP exclusively licensed or sublicensed by Caribou to the Company under the Caribou License (including but not limited to the foundational CRISPR/Cas9 IP co-owned by the Regents of the University of California, University of Vienna and Dr.

Emmanuelle Charpentier), or any other of the Company’s IP.

On February 6, 2020, the panel clarified that the Caribou Award is limited to a particular on-going Caribou program, which seeks to develop a CAR-T product directed at CD19.

On June 16, 2021, the Company executed a Leaseback Agreement (“Leaseback”) with Caribou, which settled the ongoing arbitration.

Under the Leaseback negotiated by the parties, in exchange for an upfront payment, potential future regulatory and sales milestones, and single-digit royalties payable by Caribou, the Company has agreed to leaseback or sublicense certain CRISPR/Cas9 IP, including the Company’s chemical gRNA modification technology and foundational CRISPR/Cas9 IP, to Caribou so that it can develop and commercialize CB-010.

Caribou also will be responsible for any payments required in respect of the Company’s in-licensed IP.

The Company recorded $ 1.0 million within “Collaboration Revenue”

in the second quarter of 2021 on the condensed consolidated statements of operations and comprehensive loss for an upfront payment related to the Leaseback and received the payment in the third quarter of 2021 .

During the year ended December 31, 2022, there have been no material changes to any outstanding litigation, nor is the Company a party to any new litigation.

License Agreements

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Collaborations and Other Arrangements

To accelerate the development and commercialization of CRISPR/Cas9-based products in multiple therapeutic areas, the Company has formed, and intends to seek other opportunities to form, strategic alliances with collaborators who can augment its leadership in CRISPR/Cas9 therapeutic development.

As of December 31, 2021, the Company’s accounts receivable were related to its collaborations with Regeneron and AvenCell .

As of December 31, 2021 the Company's contract liabilities were related to its collaborations with Regeneron, AvenCell, SparingVision and Kyverna.

As of December 31, 2020, the Company’s accounts receivable and contract liabilities were related to the Company’s collaboration with Regeneron.

To accelerate the development and commercialization of CRISPR-based products in multiple therapeutic areas, the Company has formed, and intends to seek other opportunities to form, strategic alliances with collaborators who can augment its leadership in CRISPR therapeutic development.

As of December 31, 2022, the Company’s accounts receivable were related to its collaborations with Regeneron, AvenCell, SparingVision and ONK and the Company's contract liabilities were related to its collaborations with Regeneron, AvenCell, SparingVision and Kyverna.

As of December 31, 2021, the Company’s accounts receivable were related to its collaborations with Regeneron and AvenCell and the Company's contract liabilities were related to its collaborations with Regeneron, AvenCell, SparingVision and Kyverna.

The following table presents changes in the Company’s accounts receivable and contract liabilities during the years ended December 31, 2022 and 2021 (in thousands):

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Accounts receivable

Contract liabilities:

Deferred revenue

Contract liabilities - deferred revenue

Balance at End

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Accounts receivable

Contract liabilities:

Deferred revenue

Contract liabilities - deferred revenue

During the years ended December 31, 2022, 2021 and 2020, the Company recognized the following revenues as a result of changes in the contract liability balance (in thousands):

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December 31, 2021

December 31, 2020

Amounts included in the contract liability at the beginning of the period

Costs to obtain and fulfill a contract

The Company did no t incur any expenses to obtain collaboration agreements and costs to fulfill those contracts do not generate or enhance resources of the Company.

The Company did not incur any expenses to obtain collaboration agreements and costs to fulfill those contracts do not generate or enhance resources of the Company.

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

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Under this agreement, the Company also may access the Regeneron Genetics Center and proprietary mouse models to be provided by Regeneron for a limited number of the Company’s liver programs.

At the inception of the 2016 Regeneron Agreement,

Regeneron selected the first of its 10 targets, transthyretin (“ATTR”) amyloidosis, which is subject to a co-development and co-promotion agreement between the Company and Regeneron (the “ATTR Co/Co”).

At the inception of the 2016 Regeneron Agreement, Regeneron selected the first of its 10 targets, transthyretin (“ATTR”) amyloidosis, which is subject to a co-development and co-promotion agreement between the Company and Regeneron (the “ATTR Co/Co”).

On May 30, 2020, the Company entered into (i) amendment no.

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Through December 31, 2022 , the Company has recognized $ 173.1 million of collaboration revenue under all arrangements, including $ 24.1 million, $ 25.7 million and $ 53.0 million of collaboration revenue in the years ended December 31, 2022, 2021 and 2020, respectively, in the consolidated statements of operations and comprehensive loss.

This includes $ 5.9 million, $ 10.7 million, and $ 12.0 million, respectively, primarily representing payments due from Regeneron pursuant to the ATTR Co/Co agreement.

These revenues are offset in part by contra-revenue related to the Hemophilia Co/Co agreements amounting to $ 2.7 million in the year ended December 31, 2021 and $ 0 million in the years ended December 31, 2020 and 2019.

This includes $ 11.9 million, $ 5.9 million, and $ 10.7 million, respectively, primarily representing payments due

from Regeneron pursuant to the ATTR Co/Co agreement.

These revenues are offset in part by contra-revenue related to the Hemophilia Co/Co agreements amounting to $ 10.4 million in the year ended December 31, 2022, $ 2.7 million in the year ended December 31, 2021 and $ 0 million in the year ended December 31, 2020.

As of December 31, 2022, there was approximately $ 28.8 million of the aggregate transaction price of the Amended Agreements remaining to be recognized, which the Company expects to be recognized during the research term through April 2024.

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AvenCell Therapeutics, Inc.

On July 30, 2021 (the “Effective Date”), the Company entered into two agreements with AvenCell, a privately held CAR-T cell therapy company formed on that date in a joint venture between the Company, Cellex and BXLS:

(i) a license and collaboration agreement (the “LCA”), under which the Company will collaborate to develop allogeneic universal CAR-T cell therapies and which granted AvenCell a license to develop and commercialize genome edited universal CAR-T cell therapies (limited to its use with their switchable, universal CAR-T cell UniCAR and RevCAR platforms);

On July 30, 2021 (the “Effective Date”), the Company entered into two agreements with AvenCell, a privately held chimeric antigen receptor T (“CAR-T”) cell therapy company formed on that date in a joint venture between the Company, Cellex Cell Professionals GmbH (“Cellex”) and funds managed by Blackstone Life Sciences Advisors L.L.C.

(“BXLS”):

(i) a license and collaboration agreement (the “AvenCell LCA”), under which the Company will collaborate to develop allogeneic universal CAR-T cell therapies and which granted AvenCell a license to develop and commercialize genome edited universal CAR-T cell therapies (limited to its use with their switchable, universal CAR-T cell UniCAR and RevCAR platforms);

and (ii) a co-development and co-funding agreement (the “AvenCell Co/Co”), under which the Company will co-develop and co-commercialize allogeneic universal CAR-T cell products for an immuno-oncology indication.

The Company granted AvenCell an exclusive license to combine the Company’s CRISPR/Cas9 technology platform with AvenCell’s switchable, universal CAR-T cell technology platform and made available to AvenCell certain know-how and materials.

For an eighteen-month period after the Effective Date, the Company will provide to AvenCell any improvements with respect to the underlying technology that are developed.

For the two-year period immediately following the Effective Date, the Company will perform certain activities, at the Company’s cost and expense, including providing to AvenCell certain know-how and materials to enable AvenCell to use the Company's CRISPR/Cas9 technology platform, as well as making available employees with requisite knowledge and experience to provide advice and answer questions regarding such know-how and materials for a limited number of hours per year (the “Knowledge Transfer Period”).

In addition, the Company and AvenCell will collaborate on at least seven

universal CAR-T ce ll products that combine the Company's allogeneic T cell technology with AvenCell's switchable, universal CAR-T cell technology, referred to as the (“Allo Collaboration”).

AvenCell will pay the Company to provide supply and manufacturing services for them, including supplying GMP CRISPR reagents to support the research and development of all CRISPR Products (as defined in the LCA) under the Allo Collaboration until the completion of the first Pivotal Trial (as defined in the LCA) of the first such CRISPR Product.

Financial Terms:

In exchange for the license, the Company received a 33.33 % equity interest in AvenCell at the time of the initial closing and AvenCell is, therefore, considered to be a related party of the Company.

The parties formed a joint steering committee (“JSC”), which is responsible for setting research objectives and overseeing the general strategies and research and development activities undertaken by the parties under the LCA.

The JSC will meet quarterly until the expiration or termination of the Allo Collaboration.

Term and Termination:

The term of the Allo Collaboration is from the Effective Date of the LCA until the completion of all activities under the then-current Allo Collaboration with respect to all relevant CRISPR Products.

The LCA contains termination provisions, including termination for insolvency, material breach, patent challenge, convenience, and cessation.

Co-Development and Co-Promotion Agreement:

Under the AvenCell Co/Co the parties will co-develop and co-commercialize in the U.S.

and key European countries certain allogeneic universal CAR-T products directed to an immuno-oncology target.

The Company is the lead commercialization party in the U.S., and AvenCell is the lead commercialization party in the European countries.

The parties will share equally in the profits and development costs.

The Company will have one additional option to enter into a second co-development and co-funding agreement from selected allogeneic universal CAR-T cell therapy products that the parties intend to develop under the Allo Collaboration for a payment of $ 30.0 million to AvenCell.

AvenCell LCA - Accounting Analysis:

The Company concluded that the accounting treatment for the LCA is within the scope of ASC 606 .

The Company evaluated the promised goods and services under the LCA and determined that it included one performance obligation:

a combined performance obligation including the license to the allogeneic technology, initial know-how and ongoing support services, including participation in the JSC during the two-year Knowledge Transfer Period.

The transaction price was determined to be $ 62.9 million, which represents the fair value of the Company's equity interest in AvenCell as of the Effective Date.

The Company allocated the full transaction price to the combined performance obligation including the license to allogeneic technology, the JSC, initial-know-how and ongoing support services.

The Company will recognize the $62.9 million using a time elapsed input method over the Knowledge Transfer Period, which in management’s judgement is the best measure of progress towards satisfying the performance obligation as this method provides the most faithful depiction of the entity’s performance in transferring control of the goods and services promised to AvenCell.

This represents the Company’s best estimate of the obligation, as after this period AvenCell will be able to fully benefit from the licensed IP on its own or with readily available resources.

Revenue recorded during each period will be eliminated in part by an amount representing the Company's 33.33 % ownership interest in AvenCell at that time, as this represents the intra-entity profit related to the transaction.

The Company will re-evaluate the measure of progress in each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.

The Company completed the initial transfer of know-how in the third quarter of 2021.

The Company recognized $ 5.9 million in revenue related to the LCA for the year ended December 31, 2021 after eliminating $ 2.9 million in intra-entity profits, which will be deferred and recognized if and when AvenCell commercializes a product with the Company's license or abandons the related project.

Until such time, the $ 2.9 million of revenue is indefinitely deferred and excluded from the results of operations of the Company.

As of December 31, 2021 the Company had deferred revenue of $ 54.1 million related to the AvenCell LCA, which the Company expects to recognize through July 2023 .

The payments attributable to the supply and manufacturing services are variable and are commensurate with the standalone selling prices of the services, and as such, will be attributed to those services.

The Company did not record any consideration related to the supply and manufacturing services in 2021.

AvenCell Co/Co - Accounting Analysis:

The Company concluded that the AvenCell Co/Co agreement meets the definition of a collaborative arrangement per ASC 808, which is outside of the scope of ASC 606.

Since ASC 808 does not provide recognition and measurement guidance for collaborative arrangements, the Company has analogized to ASC 606.

As such, the Company classifies cumulative amounts paid or received under the cost sharing provisions of the AvenCell Co/Co as a component of revenues in the consolidated statements of operations and comprehensive loss, to the extent that this does not result in a cumulative “negative revenue”

amount, in which case the cumulative shortfall would be reclassified as an expense.

Since December 31, 2021, there have been no material changes to the key terms of the AvenCell LCA and AvenCell Co/Co agreements.

In November 2022, the Company decided to re-prioritize its ex vivo programs and terminated the AvenCell Co/Co, effectively turning over control of the program to AvenCell.

The Company will also have one option to enter into an additional co-development and co-funding agreement for a payment of $ 30.0 million to AvenCell.

For further information on the terms and conditions of these agreements, please see the notes to the consolidated financial statements included in the Company's Annual Report for the year ended December 31, 2021.

Revenue Recognition –

Collaboration Revenue.

The Company recognized $ 22.8 million and $ 5.9 million in revenue related to the AvenCell LCA for the years ended December 31, 2022 and 2021, respectively, after eliminating $ 11.4 million and $ 2.9 million in intra-entity profits during those respective periods.

The elimination of intra-entity profits results in the deferral of revenue that will be recognized if and when AvenCell commercializes a product with the Company's license or abandons the related project.

Until such time, this revenue is indefinitely deferred and excluded from the results of operations of the Company.

The Company also recognized $ 0.3 million related to materials shipped in accordance with the AvenCell LCA in the year ended December 31, 2022.

The Company recognized $ 2.0 million in contra-revenue in the year ended December 31, 2022 related to the AvenCell Co/Co agreement.

The Company recognized $ 0.2 million in revenues related to the AvenCell Co/Co agreement for the year ended December 31, 2021.

As of December 31, 2022, there was approximately $ 19.9 million of the aggregate transaction price of the AvenCell LCA remaining to be recognized, which the Company expects to recognize through July 2023.

As of December 31, 2022 and 2021, the Company had $ 0.3 million and $ 0.1 million in accounts receivable, respectively, related to the AvenCell agreements.

The Company had deferred revenue of $ 19.9 million and $ 54.1 million as of December 31, 2022 and 2021, respectively, related to the AvenCell LCA.

SparingVision SAS

In October 2021, the Company and SparingVision, a genomic medicine company developing vision saving treatments for ocular diseases, entered into a license and collaboration agreement (the “SparingVision LCA”) to develop novel genomic medicines utilizing CRISPR/Cas9 technology for the treatment of ocular diseases.

The Company granted SparingVision exclusive rights to its proprietary in vivo CRISPR/Cas9-based genome editing technology for up to three ocular targets addressing diseases with significant unmet medical need.

In addition, the parties will research and develop novel self-inactivating adeno-associated virus (“AAV”) vectors and lipid nanoparticle-based approaches to address delivery of CRISPR/Cas9 genome editing reagents to the retina.

SparingVision will lead and fund the preclinical and clinical development for the genome editing product candidates pursued under the collaboration.

The Company will have an option to obtain exclusive U.S.

commercialization rights for product candidates arising from two of three collaboration targets.

For product candidates the Company chooses to option, it will pay an opt-in fee between $ 10.0 million and $ 20.0 million depending on the stage of development of the target, reimburse certain costs, share in 50 % of development costs and pay royalties to SparingVision on U.S.

Financial Terms:

In exchange for the license, the Company received 83,316 shares of Series A2 Preferred Stock (“Series A2”) which represented an equity ownership of approximately 11 % at the time of closing.

Attached to each share of Series A2, the Company received three warrants for the right to purchase additional Series A2 shares at designated prices that are subject to certain vesting conditions.

The Company will also be eligible to receive certain research, development and commercial milestone payments (up to approximately $ 200 million per product) as well as royalties on potential future sales of products arising from the collaboration.

The parties formed a JSC, which is responsible for monitoring and managing the collaboration prior to program completion.

SparingVision LCA - Accounting Analysis:

The Company determined that the accounting for the SparingVision LCA is within the scope of ASC 606.

The Company evaluated the promised goods and services and determined that it included one performance obligation:

a combined performance obligation including the license to the CRISPR technology as well as ongoing research and support services, including participation in the JSC .

The transaction price was determined to be $ 14.8 million, which represents the fair value of the Company's equity interest in SparingVision at the time of closing.

See Note 10 for the determination of the fair value of the Company’s investment.

The Company allocated the full transaction price to the combined performance obligation.

The Company will use a costs-incurred input method to recognize revenue, measuring the progress of the programs based on the costs incurred against budget, which in management's judgment is the best measure of progress towards satisfying the performance obligation.

These costs will be recorded as revenue when the expenses are incurred.

There was no revenue recognized in the year ended December 31, 2021 related to the SparingVision LCA.

As of December

31, 2021, the Company had deferred revenue of $ 14.8 million, which is expected to be recognized over a three to five year period.

Since December 31, 2021, there have been no material changes to the key terms of the SparingVision LCA agreement.

Revenue Recognition:

Collaboration Revenue.

The Company recognized $ 0.2 million in revenue related to the SparingVision LCA for the year ended December 31, 2022.

The Company did no t recognize collaboration revenue in the year ended December 31, 2021 related to the SparingVision LCA.

As of December 31, 2022, the Company had $ 0.1 million in accounts receivable related to the SparingVision LCA.

The Company did no t have accounts receivable related to the SparingVision LCA as of December 31, 2021.

As of December 31, 2022 and 2021, the Company had deferred revenue of $ 14.7 million and $ 14.8 million related to the SparingVision LCA, respectively, which is expected to be recognized over a six to nine year period from the signing of the agreement.

Kyverna Therapeutics, Inc.

In December 2021, the Company and Kyverna, a cell therapy company engineering a new class of therapies for autoimmune and inflammatory diseases, entered into a licensing and collaboration agreement (the “Kyverna LCA”), for the development of an allogeneic CD19 CAR-T cell therapy for the treatment of a variety of B cell-mediated autoimmune diseases.

The Company granted Kyverna rights to its proprietary ex vivo CRISPR/Cas9-based allogeneic platform for the development of KYV-201, an allogeneic CD19 CAR-T cell investigational candidate for the treatment of select autoimmune diseases.

This is a novel approach aimed at targeting CD19 for inflammatory diseases as compared to traditional oncology indications.

Kyverna will lead and fund preclinical and clinical development for KYV-201.

The Company will have an option to lead U.S.

commercialization for KYV-201 under a co-development and co-commercialization agreement.

If the Company chooses to co-develop and co-commercialize KYV-201, it will pay an opt-in fee of $ 5.0 million and share in 50 % of development costs and future net profit and/or loss arising from commercializing KYV-201 in the U.S.

Kyverna retains all rights outside of the U.S.

, and the Company will receive low-to-mid-single-digit royalties on net sales generated outside of the U.S.

Kyverna is considered to be a related party, as they have a board member in common with the Company.

Since December 31, 2021, there have been no material changes to the key terms of the Kyverna LCA agreement.

For further information on the terms and conditions of this agreement, please see the notes to the consolidated financial statements included in the Company's Annual Report for the year ended December 31, 2021.

Revenue Recognition:

Collaboration Revenue.

The Company recognized $ 6.6 million in revenue for the year ended December 31, 2022 re lated to the Kyverna LCA.

The Company did no t recognize any revenue for the year ended December 31, 2021 re lated to the Kyverna LCA.

As of December 31, 2022 and 2021, the Company did no t have accounts receivable related to the Kyverna LCA.

As of December 31, 2022 and 2021 the Company had deferred revenue of $ 0.4 million and $ 7.0 million, respectively, related to the Kyverna LCA, which is expected to be recognized through January 2023.

ONK Therapeutics, Ltd.

On February 12, 2022 the Company entered into a license, collaboration and option agreement with ONK (the “ONK LCA”), an innovative company dedicated to developing optimally engineered natural killer (“NK”) cell therapies to cure patients with cancer.

The agreement grants ONK a non-exclusive license to the Company's proprietary ex vivo CRISPR/Cas9-based genome editing platform and its Lipid Nanoparticle (“LNP”)-based delivery technologies for development of up to five allogeneic NK cell therapy products, which license is exclusive with respect to certain guide ribonucleic acids (“gRNAs”).

Responsibilities in the earlier stage of the license and collaboration agreement (the “evaluation program”) will be shared between the two parties, with each party bearing their own cost burden.

Upon completion of the evaluation program, ONK will identify up to five allogeneic targets for further development under a development program.

Once these allogeneic targets have been selected by ONK, any further development costs incurred by the Company are eligible for reimbursement.

ONK will be responsible for preclinical and clinical development for the engineered NK cell therapies enabled by the agreement.

Financial Terms:

In exchange for the license, the Company received an equity ownership of approximately 7% in Kyverna at the time of closing.

The Company will be eligible to receive certain development and commercial milestone payments, as well as low-to-mid-single-digit royalties on potential future sales of KYV-201.

Kyverna LCA –

The Company will be eligible to receive up to $ 184 million per product in future development and commercial milestone payments as achieved, as well as up to mid-single-digit royalties on potential future sales.

In addition, the agreement grants the Company options to co-develop and co-commercialize up to two products developed through the collaboration worldwide with rights to lead commercialization in the U.S.

There is no fee related to the exercise of these co-development and co-commercialization options.

The parties formed a joint steering committee, which is responsible for monitoring and managing the collaboration prior to program completion.

ONK LCA –

Accounting Analysis:

The Company determined that the accounting for the Kyverna LCA is within the scope of ASC 606.

The Company evaluated the promised goods and services and determined that it included one performance obligation:

a combined performance obligation related to the transfer of the license related to the allogeneic platform technology, a technology transfer, and other supply and research and development activities.

The transaction price was determined to be $ 7.0 million, which represents the fair value of the Company's equity interest in Kyverna at the time of closing.

See Note 10 for the determination of the fair value of the Company's investment.

The Company allocated the full transaction price to the combined performance obligation.

Revenue will be recognized under a time-elapsed input model starting at the completion of the technology transfer, which in management's judgment is the best measure of progress towards satisfying the performance obligation.

Progress will be measured and reassessed quarterly.

There was no revenue recognized in the year ended December 31, 2021 related to the Kyverna LCA.

As of December 31, 2021, the Company had deferred revenue of $ 7.0 million which is expected to be recognized over a nine to twelve month period.

The Company determined that the accounting for the ONK LCA is within the scope of ASC 606.

The Company identified one combined performance obligation related to the license, evaluation and development programs.

The LCA did not include an exchange of upfront consideration between the parties.

As the ONK LCA progresses, the Company will incur certain expenses.

Expenses incurred under the evaluation program will be accounted for under ASC 730, Research and Development .

Reimbursements under the development programs represent variable constrained consideration, whereas the Company is acting as the principal, and revenue will be recognized as expenses are incurred.

Milestone payments and royalties are constrained consideration and will be recorded as revenue upon achievement.

Revenue Recognition:

Collaboration Revenue.

The Company recognized $ 0.1 million in revenue for the year ended December 31, 2022 related to materials shipped in accordance with the ONK LCA.

Novartis Institutes for BioMedical Research, Inc.

In December 2014, the Company entered into a strategic collaboration agreement with Novartis (the “2014 Novartis Agreement”), primarily focused on the research of new ex vivo CRISPR/Cas9-edited therapies using CAR-T cells and hematopoietic stem cells (“HSCs”).

In December 2014, the Company entered into a strategic collaboration agreement with Novartis Institutes for BioMedical Research, Inc.

(“Novartis”) (the “2014 Novartis Agreement”), primarily focused on the research of new ex vivo CRISPR/Cas9-edited therapies using CAR-T cells and hematopoietic stem cells (“HSCs”).

The agreement was amended in December 2018 (the “Novartis Amendment”) to also include research on ocular stem cells (“OSCs”).

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The Amendment amends Novartis’

rights with respect to all of the CAR-T Therapeutic Targets (as defined in the 2014 Novartis Agreement) that Novartis selected under the 2014 Novartis Agreement, including (a) making Novartis’

rights with respect to all of the CAR-T Therapeutic Targets (as defined in the 2014

Novartis Agreement) that Novartis selected under the 2014 Novartis Agreement, including (a) making Novartis’

license non-exclusive for such CAR-T Therapeutic Targets, (b) removing Novartis’

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The Company made a one-time payment to Novartis of $10.0 million within 30 days after the effective date of the Amendment, which was recorded as research and development expense in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2021.

Since December 31, 2020, there have been no other material changes to the key terms of the 2014 Novartis Agreement and the Novartis Amendment.

Since December 31, 2021, there have been no material changes to the key terms of the 2014 Novartis Agreement and the Novartis Amendments.

For further information on the terms and conditions of these agreements, please see the notes to the consolidated financial statements included in the Company’s Annual Report for the year ended December 31, 2021.

Revenue Recognition –

Collaboration Revenue.

Through December 31, 2021, excluding amounts allocated to Novartis’

purchase of the Company’s Class A-1 and Class A-2 Preferred Units, the Company had recorded a total of $62.4 million in cash under the 2014 Novartis Agreement and the Novartis Amendment.

Through December 31, 2021, the Company recognized $ 62.4 million of collaboration revenue.

No revenue was recognized during the years ended December 31, 2021 or 2020 related to the 2014 Novartis Agreement and the Novartis Amendment.

The Company recognized $ 18.5 million during the year ended December 31, 2019, in the consolidated statement of operations and comprehensive loss, related to the 2014 Novartis Agreement and the Novartis Amendment.

As of December 31, 2019, the aggregate transaction price had been recognized in full.

Revenue Recognition –

No milestones under the 2014 Novartis Agreement and the Novartis Amendments were achieved during the year ended December 31, 2022.

In September 2021, a milestone related to a CRISPR/Cas9-based engineered cell therapy for the treatment of sickle cell disease was reached and, as a result, the Company recognized $ 0.3 million as collaboration revenue within the consolidated statement of operations and comprehensive loss.

In March 2020, the U.S.

Food and Drug Administration (“FDA”) accepted the Investigational New Drug ( “

) application submitted by Novartis for a CRISPR/Cas9-based engineered cell therapy for the treatment of sickle cell disease.

Food and Drug Administration (“FDA”) accepted the Investigational New Drug (“IND”) application submitted by Novartis for a CRISPR/Cas9-based engineered cell therapy for the treatment of sickle cell disease.

As a result of meeting this milestone, the Company recognized $ 5.0 million as collaboration revenue within the consolidated statement of operations and comprehensive loss.

In September 2021, an additional milestone was reached and, as a result, the Company recognized $ 0.3 million as collaboration revenue within the consolidated statement of operations and comprehensive loss.

No other milestones under the 2014 Novartis Agreement and the Novartis Amendment were achieved during the years ended December 31, 2021, 2020 or 2019.

The Company is eligible to receive additional downstream success-based milestones and royalties.

As of December 31, 2021 and 2020, the Company had no accounts receivable or deferred revenue related to the 2014 Novartis Agreement and the Novartis Amendment.

As of December 31, 2022 and 2021, the Company had no accounts receivable or deferred revenue related to the 2014 Novartis Agreement and the Novartis Amendments .

Equity-Method Investment and Other Investments

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The key assumptions used in the option pricing model, which are level 3 inputs, include the anticipated holding period to an exit and liquidity event, the volatility of market participants ( 76 %), the probability of AvenCell achieving certain milestones to obtain subsequent financings ( 75 %) and the discount for lack of marketability ( 11 %).

The Company recorded the initial investment in AvenCell of $ 62.9 million in “

Equity method investments ”

The Company recorded the initial investment in AvenCell of $ 62.9 million in “Equity method investments”

on its consolidated balance sheet.

Due to the timing and availability of AvenCell's financial information, the Company will record its share of losses from AvenCell on a quarterly basis on a one-quarter lag from July 30, 2021.

Therefore, the Company recorded its share of two months of AvenCell ’s losses generated in the third quarter of 2021 in the Company's operating results and other comprehensive loss in the fourth quarter of 2021, resulting in a reduction of the Company's investment by $ 1.8 million.

The Company will record its share of three months of AvenCell 's losses generated in the fourth quarter of 2021 in the Company's operating results in the first quarter of 2022.

The Company is not aware of any material events or transactions during this period.

The elimination of the intra-entity profit component of $ 2.9 million (See Note 9) resulted in a further reduction in the balance of the investment in AvenCell , bringing the carrying value of the investment to $ 58.1 million as of December 31, 2021.

Due to the timing and availability of AvenCell's financial information, the Company is recording its share of losses from AvenCell on a quarterly basis on a one-quarter lag.

Therefore, the Company recorded its share of twelve months of AvenCell ’s losses generated in the fourth quarter of 2021 and the first three quarters of 2022 in the Company's operating results and other comprehensive loss for the year ended December 31, 2022, resulting in a reduction of the Company's investment by $ 14.3 million.

The Company recorded its share of two months of AvenCell's losses generated in the third quarter of 2021 in the Company's operating results and other comprehensive loss in the fourth quarter of 2021, resulting in a reduction of the Company's investment by $ 1.8 million.

The elimination of the intra-entity profit component of $ 11.4 million and $ 2.9 million for the years ended December 31, 2022 and 2021, respectively (See Note 9) resulted in a further reduction in the balance of the investment in AvenCell , bringing the carrying value of the investment to $ 32.5 million and $ 58.1 million as of December 31, 2022 and 2021, respectively.

The Company is not aware of any material events or transactions during this period that would warrant additional disclosure or recognition in the financial statements.

At December 31, 2022, the maximum exposure to loss is limited to the Company’s equity investment in the joint venture.

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on its consolidated balance sheet.

There was no change in the observable price of the SparingVision investments as of December 31, 2021.

There was no change in the observable price or impairment of the SparingVision investment as of December 31, 2022 or 2021.

Kyverna Therapeutics, Inc.

In connection with the Kyverna LCA (See Note 9), the Company received 3,739,515 shares of Series B Preferred Stock with a fair value of $ 7.0 million.

The Company separately made an additional investment in Kyverna, purchasing 1,602,649 shares of Series B Preferred Stock in exchange for $ 3.0 million in cash (collectively referred to as the “Kyverna investments”).

The Company accounts for the Kyverna investments using the measurement alternative as Kyverna is a private company and there is no readily observable transaction price.

The Company accounts for the Kyverna investment using the measurement alternative as Kyverna is a private company and there is no readily observable transaction price.

The Company recorded the initial investment in Kyverna of $ 10.0 million in “Investments and other assets”

on its consolidated balance sheet.

There was no change in the observable price of the Kyverna investment as of December 31, 2021.

In October 2014, the Company entered into an agreement to lease office and laboratory space at 130 Brookline Street (the “130 Brookline Lease”) in Cambridge, Massachusetts under an operating lease agreement with a term through January 2020 , with an option to extend the term of the lease for an additional five-year period.

In April 2019, the lease was amended to extend the term for the additional five-year period, through January 2025 .

Upon the execution of the original lease, the Company provided a $ 0.3 million security deposit which is recorded in “Investments and other assets”

on the Company's consolidated balance sheets.

In March 2020, the Company entered into a second amendment to the 130 Brookline Lease (the “130 Brookline Lease Second Amendment”).

The 130 Brookline Lease Second Amendment extends the term of the 130 Brookline Lease by

approximately six years through January 31, 2031 .

This extended term is included as part of the lease liability and right-of-use asset at December 31, 2021.

The 130 Brookline Lease Second Amendment also provides an option to extend the lease for two consecutive five-year terms.

There was no change in the observable price or impairment of the Kyverna investment as of December 31, 2022 or 2021.

Rewrite Acquisition

On February 2, 2022, the Company entered into an agreement to acquire Rewrite (the “Rewrite Merger Agreement”).

Under the Rewrite Merger Agreement, the Company paid Rewrite’s former stockholders and optionholders (the “Rewrite Holders”) upfront consideration in an aggregate amount of $ 45.0 million, excluding customary purchase price adjustments and closing costs, payable in cash.

Pursuant to the Rewrite Merger Agreement, the Company acquired all of the issued and outstanding shares of Rewrite.

The Rewrite transaction resulted in the acquisition of certain know-how and IP assets related to Rewrite’s proprietary DNA writing technology.

The Company's management determined that the acquired assets did not meet the definition of a business pursuant to ASC 805, Business Combinations , as substantially all of the fair value of the acquired assets is concentrated into one identifiable asset, the DNA writing technology.

As of the date of closing of the transactions contemplated by the Rewrite Merger Agreement (the “Rewrite Merger Agreement Date”), the asset acquired had no alternative future use and had not reached a stage of technological feasibility.

As a result, all payment obligations have been recorded as research and development expense in the Company's consolidated statements of operations and other comprehensive loss in the amount of $ 56.0 million (see table below for details).

The total transaction price was allocated to the assets acquired and liabilities assumed on a relative fair value basis.

In addition, the Rewrite Holders are eligible to receive up to an additional $ 155.0 million in milestone payments, including $ 55.0 million upon the achievement of certain pre-specified research milestones and $ 100.0 million upon the achievement of a certain regulatory approval milestone, payable through a mixture of $ 130.0 million in cash and $ 25.0 million in a combination of cash and the Company’s common stock, which will be valued using the volume-weighted average price of the Company’s Common Stock over the ten consecutive trading day period ending on and including the trading day that is two trading days immediately prior to the issuance of the consideration issued in connection with the applicable milestone.

In September 2022, Rewrite Therapeutics, Inc.

merged into Intellia, with Intellia the surviving entity.

The Company determined that the research milestone settled in the Company’s common stock is classified as a contingent consideration liability under ASC 480 and, therefore, the Company recorded a liability for this milestone payment as of the Rewrite Merger Agreement Date at its fair value of $ 10.5 million.

The contingent consideration liability is remeasured at fair value each financial reporting period, with the resulting impact reflected in the Company’s consolidated statements of operations and other comprehensive loss, presented within other (expense) income.

The milestones that will be settled in cash will be recorded when the contingency is resolved and the consideration is paid or becomes payable.

As of December 31, 2022, none of the milestones that will be settled in cash were resolved.

In January 2023, the $ 25.0 million research milestone noted above was achieved and, in February 2023, the Company paid the Rewrite Holders a mixture of cash and 567,045 shares of common stock in order to fulfill this obligation.

The transaction price was determined and allocated as follows (in thousands):

Transaction Price

Upfront cash consideration

Research contingent consideration liabilities

Transaction costs

Total transaction price

Transaction Price Allocated

In-process research and development

Cash acquired

Other current assets acquired

Other liabilities assumed

Total transaction price

In October 2014, the Company entered into an agreement to lease office and laboratory space at 130 Brookline Street in Cambridge, Massachusetts under an operating lease agreement with a term through January 2020 .

In April 2019, the lease was amended to extend the term for an additional five-year period, through January 2025 .

In March 2020, the Company entered into a second amendment to this lease which extended the term by approximately six years through January 31, 2031 .

There is an option to extend the lease for two consecutive five-year terms .

The option for these further extensions is not included as part of the lease liability and right-of-use asset at December 31, 2022, as it is not reasonably certain that it will be exercised.

In the first quarter of 2020, the Company increased the right-of-use asset and liability related to this lease by approximately $ 7.3 million related to the 130 Brookline Lease Second Amendment.

In March 2019, the Company entered into a separate agreement to sublease additional office and laboratory space at 130 Brookline Street in Cambridge, Massachusetts under an operating sublease agreement with a term through April 2021 , with two options to extend the agreement by one year each, for a total option period of up to two years .

Upon commencement of the lease in April 2019, the Company recognized a right-of-use asset and lease liability of approximately $ 1.3 million.

In September 2020, the Company amended the lease to extend the term until October 2021.

An adjustment of $ 0.4 million to the right-of-use asset and lease liability was recorded upon the execution of the amendment.

This sublease was terminated in September 2021.

In January 2016, the Company entered into a ten-year agreement to lease office and laboratory space at 40 Erie Street (the “40 Erie Lease”) in Cambridge, Massachusetts under an operating lease agreement, with an option to terminate the lease at the end of the sixth year and an option to extend the term of the lease for an additional three years .

Upon the execution of this lease, the Company provided a $ 2.2 million security deposit, which has been recorded in “Investments and other assets”

on the consolidated balance sheets.

In November 2020, the Company entered into a second amendment to the 40 Erie Lease (the “40 Erie Lease Second Amendment”) which provides the Company with a right of first offer with respect to any space that becomes available at the 40 Erie Street building, and in consideration for this right the Company agreed to nullify the option to terminate the lease at the end of the sixth year that was included in the 40 Erie Lease.

In the fourth quarter of 2020, the Company increased the right-of-use asset and liability related to this lease by approximately $ 18.5 million related to the 40 Erie Lease Second Amendment.

In March 2020, the Company entered into an agreement to lease approximately 39,000 square feet of office and laboratory spa ce at 281 Albany Street in Cambridge, Massachusetts under an operating lease agreement (the “281 Albany Lease”).

The initial term of the 281 Albany Lease is ten years following the rent commencement date which was determined to be March 2021 in accordance with ASC 842, Leases (Topic 842) ( “

ASC 842 ”

), as that was when the facility was substantially complete and available for use.

T he Company recognized a right-of-use asset and a lease liability of approximately $ 40.4 million and $ 34.8 million, respectively, in the first quarter of 2021 related to the 281 Albany Lease.

In determining the lease liability, the Company used an incremental borrowing rate of 5.52 % based on a number of factors including the Company’s credit rating and the lease term.

Included in the recognized right-of-use asset at the inception of the lease was approximately $ 5.6 million in lease payments that were prepaid under the terms of the lease.

The Company modified the right-of-use asset in the second quarter of 2021 based on changes to the configuration of this space, resulting in an additional $ 1.4 million being added to the right-of-use asset.

The base rent under the 281 Albany Lease is $ 99.00 per square foot per year during the first year of the term, which is subject to scheduled annual increases up to $ 128.87 per square foot per year during the last year of the initial term, plus certain operating expenses and taxes.

In addition, the landlord contributed an aggregate of $ 4.4 million toward the cost of construction and tenant improvements for the premises.

In a ccordance with the 281 Albany Lease, the Company is required to maintain a letter of credit in the amount of $ 1.9 million that is restricted for the term of the lease.

These restricted cash equivalents are reported in “Investments and other assets”

in the Company’s consolidated balance sheet.

In November 2020, the Company entered into a second amendment to the 40 Erie Lease which provides the Company with a right of first offer with respect to any space that becomes available at the 40 Erie Street building, and in consideration for this right the Company agreed to nullify the option to terminate the lease at the end of the sixth year that was included in the 40 Erie Lease .

The option to extend the term of the lease for an additional three years is not included as part of the lease liability and right-of-use asset at December 31, 2022, as it is not reasonably certain that it will be exercised.

In March 2020, the Company entered into an agreement to lease approximately 39,000 square feet of office and laboratory space at 281 Albany Street in Cambridge, Massachusetts under an operating lease agreement (the “281 Albany Lease”).

The initial term of the 281 Albany Lease is ten years following the rent commencement date which was determined to be March 2021.

The Company has the option to extend the 281 Albany Lease for two successive five-year terms ;

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In July 2021, the Company entered into an agreement to lease 13,662 square feet of office space at 17 Tudor Street in Cambridge, Massachusetts under an operating lease agreement (the “17 Tudor Lease”).

The Company’s obligation to pay rent began on November 1, 2021.

The initial term of the 17 Tudor Lease is five years , and the Company has an option to extend the 17 Tudor Lease for one three-year term.

The option is not included as part of the lease liability and right-of-use asset at December 31, 2022, as it is not reasonably certain that it will be exercised.

The base rent under the 17 Tudor Lease is $ 74.00 per square foot during the first year of the term, which is subject to scheduled annual increases throughout the term, resulting in a base rent of $ 83.29 per square foot during the last year of the initial term, plus certain operating expenses and taxes.

In September 2021 the Company determined, in accordance with ASC 842, that the commencement date of the lease had been met as the Company had gained access to the facility

in order to begin work on lessee-owned tenant improvements and, accordingly, the Company recognized a right-of-use asset and a lease liability of approximately $ 4.9 million in the third quarter of 2021 related to the 17 Tudor Lease.

In January 2022, the Company entered into an agreement to lease approximately 38,000 square feet of office and laboratory space at 730 Main Street, Cambridge, Massachusetts under an operating lease agreement (the “730 Main Lease”).

The initial term of the 730 Main Lease is for ten years following the Rent Commencement Date and the Company has the option to extend the 730 Main Lease for one five-year term.

The base rent under the 730 Main Lease is $ 130.00 per square foot per year during the first year of the term, which is subject to scheduled 3 % annual increases, plus certain operating expenses and taxes.

In October 2022, the Company determined that in accordance with ASC 842, Leases (Topic 842) ( “

ASC 842 ”

), the commencement date of the lease had been met as the lessor had made the space available for the Company's use.

Therefore, the Company recognized a right-of-use asset and a lease liability of approximately $ 36.4 million in the fourth quarter of 2022 related to the 730 Main Lease.

In determining the lease liability, the Company used an incremental borrowing rate of 9.33 % based on a number of factors including the Company’s credit rating and the lease term.

In accordance with the 17 Tudor Lease, the Company is required to maintain a letter of credit in the amount of $ 0.2 million that is restricted for the term of the lease.

These restricted cash equivalents are reported in “Investments and other assets”

in the Company’s consolidated balance sheet.

In July 2021, the Company entered into an agreement to extend an existing lease for a clean room located in Waltham, Massachusetts under an operating lease agreement (the “Waltham Lease”) for an additional two years.

The Company determined, in accordance with ASC 842, that the extension should be accounted for as a lease modification and, accordingly, recorded an adjustment to the right-of-use asset and lease liability of approximately $ 2.5 million in the third quarter of 2021 related to the Waltham Lease.

In January 2023, the Company executed a sublease for a portion of the 730 Main Lease.

In February 2022, the Company entered into an agreement to lease approximately 140,000 square feet of office, general laboratory and manufacturing space located at 840 Winter Street, Waltham, Massachusetts (the “840 Winter Lease”), which will provide the Company with the ability to manufacture its own products in a good manufacturing practice (“GMP”) compliant facility as well as to supplement the Company’s current leased premises in Cambridge, Massachusetts.

The 840 Winter Lease, including the obligation to pay rent, is expected to commence in 2024 for an initial term of twelve years .

The base rent under the 840 Winter Lease is $ 73.50 per square foot per year during the first year of the term, which is subject to scheduled 3 % annual increases, plus certain operating expenses and taxes.

The Company has the option to extend the 840 Winter Lease for two five-year terms.

The Company did not record a right of use asset or liability related to the 840 Winter Lease under ASC 842 during the twelve months ended December 31, 2022, as the Company had not taken control of the premises.

In June 2022, the Company entered into an agreement to lease approximately 62,000 square feet of office and laboratory space located at 640 Memorial Drive, Cambridge, Massachusetts under an operating lease agreement (the “640 Memorial Drive Lease”).

The term of the lease is five years , ending in August 2027.

The Company does not have an option to extend the 640 Memorial Drive Lease .

The base rent under the 640 Memorial Drive Lease is approximately $ 97 per square foot per year during the first year of the term, which is subject to scheduled 4 % annual increases, plus certain operating expenses and taxes.

In September 2022 the Company determined, in accordance with ASC 842, that the commencement date for the lease had been met as the lessor had made the space available for the Company's use.

The Company recorded a right of use asset of $ 30.7 million and a lease liability of $ 30.2 million related to the 640 Memorial Drive Lease under ASC 842.

The difference between the right of use asset and the lease liability of $ 0.5 million relates to prepaid rent.

In determining the lease liability, the Company used an incremental borrowing rate of 7.99 % based on a number of factors including the Company's credit rating and the lease term.

Throughout the term of its leases, the Company is responsible for paying certain costs and expenses, in addition to the rent, as specified in the lease, including a proportionate share of applicable taxes, operating expenses and utilities.

The variable portion of these costs are expensed as incurred and are disclosed as variable lease cost.

The variable portion of these costs are expensed as incurred and are disclosed as variable lease costs.

The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Company’s operating leases for the years ended December 31, 2022 and 2021:

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Recipients of incentive stock options and non-qualified stock options are eligible to purchase shares of the Company’s common stock at an exercise price equal to the fair value of such stock on the grant date.

Stock options granted under the 2015 Plan generally vest 25 % on the first anniversary of the original vesting date, with the balance vesting monthly over the remaining three years , unless they contain specific performance-based vesting provisions.

The maximum term of stock options granted under the 2015 Plan is ten years .

Effective July 1, 2022, the Company adopted a retirement policy for equity awards granted to all employees other than the Company’s CEO (the “Policy”) and in December 2022, the Policy was amended to include the Company's CEO (the “Amended Policy”) upon approval by the Company's board of directors.

No other changes were made to the Policy in the amendment.

The Amended Policy applies to all equity awards granted after the date of adoption to employees who meet certain retirement eligibility criteria set forth in the Amended Policy (the “Retirees”).

Pursuant to the terms of the Amended Policy, upon a Retiree’s eligible retirement:

(i) all stock options held by the Retiree will continue to vest following the Retiree’s retirement date according to the original vesting schedule of the option until fully vested and all vested stock options held by such Retiree will remain exercisable until the earlier of the five-year anniversary of the Retiree’s retirement date or the original expiration date of the option, (ii) all unvested time-based RSUs held by the Retiree will vest in full on the Retiree’s retirement date and (iii) all unvested performance-based awards held by the Retiree will remain outstanding following the Retiree’s retirement date and the Retiree will remain eligible to earn a pro-rated portion of such performance-based awards at the end of the performance period based on actual performance during the performance period.

As of December 31, 2022, there were 3,541,302 shares available for future issuance under the 2015 Plan.

The number of shares reserved for issuance under the 2015 Plan shall be cumulatively increased by four percent of the number of

shares of stock issued and outstanding on the immediately preceding December 31 or such lesser number of shares of stock as determined by the board of directors .

The number of shares reserved for issuance under the 2015 Plan shall be cumulatively increased by four percent of the number of shares of stock issued and outstanding on the immediately preceding December 31 or such lesser number of shares of stock as determined by the board of directors .

Restricted Stock Units

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Unvested restricted stock units as of December 31, 2022

In January 2020, the Company granted 181,020 RSUs to certain non-executive employees that included a performance condition in addition to a service condition.

These RSUs would vest over a period of three years and were subject to accelerated vesting based on the Company’s programs achieving certain development milestones before December 1, 2022.

The fair value of the RSUs at date of grant was $ 15.05 .

During the year ended December 31, 2020, the Company achieved one of its development milestones and 58,870 of these RSUs vested.

During the year ended December 31, 2021, 26,235 of these RSUs vested based on the satisfaction of a service condition, and 64,290 vested due to the achievement of additional development milestones.

At December 31, 2021, none of these RSUs are unvested.

The weighted-average grant date fair value of RSUs granted for the years ended December 31, 2021, 2020 and 2019 was $ 73.81 , $ 21.70 and $ 0 .

The total fair value of RSUs vested (measured on the date of vesting) for the years ended December 31, 2021 and 2020 was $ 14.1 million and $ 2.8 million, respectively.

During the year ended December 31, 2019, RSAs that were granted prior to the Company's IPO vested with a total fair value (measured on the date of vesting) of $ 0.6 million.

In March 2022, the Company granted 794,424 RSUs with a service condition to employees as part of their annual grant, which vest over a period of three years .

The weighted average grant date fair value of these RSUs was $ 79.85 and the vesting start date for these RSUs was January 1, 2022.

Also in March 2022, 55,144 RSUs were granted to senior executives as part of their annual grant.

These RSUs have the potential to vest after a period of 3 years, with a vesting start date of January 1, 2022, and the number of shares to be delivered will depend on the Company's Total Shareholder Return (“TSR”), a market condition, over that period relative to a defined group of biotechnology companies.

The grant date fair value for these RSUs, calculated using a Monte Carlo valuation model, was $ 126.49 .

The following assumptions were used to determine the grant date fair value:

risk free interest rate:

expected dividend yield:

expected volatility:

expected term (in years):

The Company also granted 66,296 performance-based RSUs in March 2022 to certain non-executive employees that would vest upon obtaining certain scientific milestones.

There were two separate tranches, each attached to a different set of milestones.

The milestone related to the first tranche, made up of 21,878 RSUs, is deemed to be probable of achievement as of December 31, 2022;

the Company recorded $ 1.7 million in expense related to this tranche in 2022 and these RSUs vested in the first quarter of 2023 upon achievement of the milestone.

The remaining performance milestones were considered not probable of achievement as of December 31, 2022 and, therefore, no related stock-based compensation was recorded during the period then ending.

The weighted-average grant date fair value of RSUs granted for the years ended December 31, 2022, 2021 and 2020 was $ 70.90 , $ 73.81 and $ 21.70 , respectively.

The total fair value of RSUs vested (measured on the date of vesting) for the years ended December 31, 2022, 2021 and 2020 was $ 10.4 million, $ 14.1 million and $ 2.8 million, respectively.

As of December 31, 2022, there was $ 99.3 million of unrecognized equity-based compensation expense related to RSUs that are expected to vest.

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Stock Options

The weighted average grant date fair value of options, estimated as of the grant date using the Black-Scholes option pricing model, was $ 54.09 per option for options granted during the year ended December 31, 2021, $ 9.07 per option for options granted during the year ended December 31, 2020, and $ 9.21 per option for options granted during the year ended December 31, 2019.

The weighted average grant date fair value of options, estimated as of the grant date using the Black-Scholes option pricing model, was $ 57.23 , $ 54.09 and $ 9.07 per option for options granted during the years ended December 31, 2022, 2021 and 2020, respectively.

The total intrinsic value (the amount by which the fair market value exceeded the exercise price) of stock options exercised during the years ended December 31, 2022, 2021 and 2020 was $ 42.8 million, $ 262.0 million, and $ 20.3 million, respectively.

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The Company uses the simplified method because it does not have sufficient historical option exercise data to provide a reasonable basis upon which to estimate the expected term.

Stock options granted under the 2015 Plan generally vest 25% on the first anniversary of the original vesting date, with the balance vesting monthly over the remaining three years, unless they contain specific performance-based vesting provisions.

The maximum term of stock options granted under the 2015 Plan is ten years.

The Company uses the market closing price of its common stock as reported on the Nasdaq Global Select Market to determine the fair value of the shares of common stock underlying stock options.

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0.05 %- 0.09 %

0.17 %- 1.6 %

Expected term (in years)

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The offering closed on July 2, 2021 and the Company received net proceeds of $ 648.3 million, after deducting the underwriting discount, commissions and offering expenses.

In November 2022, the Company entered into an underwriting agreement related to a public offering of 6,550,219 shares of its common stock, par value $ 0.0001 per share, at a public offering price of $ 45.80 per share.

In addition, the Company granted the underwriter an option exercisable for 30 days from the date of the agreement to purchase, at the public offering price less any underwriting discounts and commissions, up to an additional 982,532 shares.

The offering closed on December 2, 2022 and the Company received net proceeds of $ 337.9 million, including the exercise in full of the underwriters' option to purchase additional shares, after deducting the underwriting discount, commissions and offering expenses.

At-the-Market Offering Programs

In October 2018, the Company entered into an Open Market Sale Agreement (the “2018 Sale Agreement”) with Jefferies LLC (“Jefferies”), under which Jefferies was able to offer and sell, from time to time in “at-the-market”

offerings, shares of its common stock having aggregate gross proceeds of up to $ 100.0 million.

The Company paid to Jefferies cash commissions of 3.0 % of the gross proceeds of sales of common stock under the 2018 Sale Agreement.

The Company issued 5,890,648 shares of its common stock at an average price of $ 16.98 per share in accordance with the 2018 Sale Agreement for aggregate net proceeds of $ 96.4 million, after payment of cash commissions to Jefferies and approximately $ 0.6 million related to legal, accounting and other fees in connection with the sales.

All shares related to the 2018 Sale Agreement had been sold as of December 31, 2019.

In August 2019, the Company entered into an Open Market Sale Agreement (the “2019 Sale Agreement”) with Jefferies, under which Jefferies was able to offer and sell, from time to time in “at-the-market”

In August 2019, the Company entered into an Open Market Sale Agreement (the “2019 Sale Agreement”) with Jefferies LLC (“Jefferies”) , under which Jefferies was able to offer and sell, from time to time in “at-the-market”

offerings, common stock having aggregate gross proceeds of up to $ 150.0 million.

The Company agreed to pay Jefferies cash commissions of 3.0 % of the gross proceeds of sales of common stock under the 2019 Sale Agreement.

During the year ended

December 31, 2019, the Company issued 287,231 shares of its common stock, in a series of sales, at an average price of $ 16.48 per share, in accordance with the 2019 Sale Agreement for aggregate net proceeds of $ 4.4 million, after payment of cash commissions to Jefferies and approximately $ 0.2 million related to legal, accounting and other fees in connection with the sales.

During the year ended December 31, 2020, the Company issued 2,270,161 shares of its common stock in a series of sales at an average price of $ 22.53 per share in accordance with the 2019 Sale Agreement, for aggregate net proceeds of $ 49.5 million after payment of cash commissions to Jefferies and approximately $ 0.2 million related to legal, accounting and other fees in connection with the sales.

During the year ended December 31, 2021, the Company issued 641,709 shares of its common stock in a series of sales at an average price of $ 72.79 per share in accordance with the 2019 Sale Agreement, for aggregate net proceeds of $ 45.3 million after payment of cash commissions to Jefferies and approximately $ 0.1 million related to legal, accounting and other fees in connection with the sales.

During the first quarter of 2022, the Company issued 579,788 shares of its common stock, in a series of sales, at an average price of $ 69.43 per share, in accordance with the 2019 Sale Agreement for aggregate net proceeds of $ 38.9 million, after payment of cash

commissions to Jefferies and approximately $ 0.2 million related to legal, accounting and other fees in connection with the sales.

The 2019 Sale Agreement expired during the third quarter of 2022.

In March 2022, the Company entered into an Open Market Sale Agreement (the “2022 Sale Agreement”) with Jefferies, under which Jefferies will be able to offer and sell, from time to time in “at-the-market”

offerings, common stock having aggregate gross proceeds of up to $ 400.0 million.

The Company agreed to pay Jefferies cash commissions of 3.0 % of the gross proceeds of sales of common stock under the 2022 Sale Agreement.

During the year ended December 31, 2022, the Company issued 3,395,339 shares of its common stock, in a series of sales, at an average price of $ 57.43 per share, in accordance with the 2022 Sale Agreement for aggregate net proceeds of $ 189.0 million, after payment of cash commissions to Jefferies and approximately $ 0.1 million related to legal, accounting and other fees in connection with the sales.

As of December 31, 2022, $ 205.0 million in shares of common stock remain eligible for sale under the 2022 Sale Agreement.

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The Company’s relationship with AvenCell is considered to be as a related party due to the Company’s 33.33 % investment in AvenCell being accounted for under the equity method.

T he Company recognized $ 5.9 million and $ 0.2 million in revenue u nder the AvenCell LCA and AvenCell Co/Co, respectively, for the year ended December 31, 2021.

As of December 31, 2021 the Company had deferred revenue of $ 54.1 million, comprised of $ 34.2 million in current deferred revenue and $ 19.9 million in non-current deferred revenue, related to the AvenCell LCA.

The Company and Kyverna are parties to the Kyverna LCA and are considered to be related parties because they have a common board member (see Note 9).

The Company owns preferred stock of Kyverna, the value of which is included in “Investments and other assets”

in the consolidated balance sheet.

The value of this investment was $ 10.0 million as of December 31, 2021.

There was no revenue recognized in the year ended December 31, 2021 related to the Kyverna LCA.

As of December 31, 2021, the Company had deferred revenue of $7.0 million related to the Kyverna LCA.

Until such time, this revenue is indefinitely deferred and excluded from the results of operations of the Company.

The Company also recognized $ 0.3 million related to materials shipped in accordance with the AvenCell LCA in the year ended December 31, 2022.

The Company recognized $ 2.0 million in contra-revenue in the year ended December 31, 2022 related to the AvenCell Co/Co agreement.

The Company recognized $ 0.2 million in revenues related to the AvenCell Co/Co agreement for the year ended December 31, 2021.

As of December 31, 2022 the Company had $ 19.9 million in current deferred revenue related to the AvenCell LCA.

In 2015, the Company established the Intellia Therapeutics, Inc.

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The Company made matching contributions of $ 2.7 million, $ 1.6 million and $ 1.1 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Subsequent Events

In January 2022, the Company entered into a Lease Agreement (the “Lease”) with the Massachusetts Institute of Technology (the “Landlord”) for office and laboratory space located at 730 Main Street, Cambridge, Massachusetts (the “Premises”).

Under the terms of the Lease, the Company will lease approximately 38,000 square feet at the Premises, which will supplement the Company’s current leased premises in Cambridge, Massachusetts.

The Lease, including the obligation to pay rent, is expected to commence on October 22, 2022 (the “Commencement Date”).

The initial term of the Lease is ten years following the Commencement Date.

The base rent under the Lease is $ 130.00 per square foot per year during the first year of the term, which is subject to scheduled annual increases up to $ 169.62 per square foot per year during the last year of the initial term, plus certain operating expenses and taxes.

The Company has the option to extend the Lease for one five-year term .

On February 2, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with RW Acquisition Corp., a Delaware corporation and a wholly-owned direct subsidiary of the Company (“Merger Sub”), Rewrite Therapeutics, Inc., a Delaware corporation (“Rewrite”) and Shareholder Representative Services LLC, a Colorado limited liability company, solely in its capacity as the representative of the Rewrite Holders (as defined below).

On the effective date of the Merger Agreement, Merger Sub merged with and into Rewrite, with Rewrite surviving as a wholly-owned direct subsidiary of the Company.

Pursuant to the Merger Agreement, and subject to the terms and conditions thereof, the Company paid Rewrite’s former stockholders and optionholders (the “Rewrite Holders”) upfront consideration in an aggregate amount of approximately $ 45.0 million payable in cash, excluding customary purchase price adjustments.

In addition, the Rewrite Holders will be eligible to receive up to an additional $ 155.0 million in milestone payments upon the achievement of certain pre-specified research and regulatory approval milestones, payable through a mixture of $ 130.0 million in cash and $ 25.0 million in shares of common stock, par value $ 0.0001 per share (“Common Stock”).

The shares of Common Stock will be valued using the volume-weighted average price of Common Stock of the Company over the ten consecutive trading day period ending on and including the trading day that is two trading days immediately prior to the issuance of the consideration issued in connection with the applicable milestone.

On February 12, 2022 the Company entered into a license, collaboration and option agreement with ONK Therapeutics, Ltd.

(“ONK”), an innovative company dedicated to developing optimally engineered natural killer (“NK”) cell therapies to cure patients with cancer.

The agreement grants ONK a non-exclusive license to the Company's proprietary ex vivo CRISPR/Cas9-based genome editing platform and its LNP-based delivery technologies for development of up to five allogeneic NK cell therapies, which license is exclusive with respect to certain gRNAs.

ONK will be responsible for preclinical and clinical development for the engineered NK cell therapies enabled by the agreement.

The Company will be eligible to receive up to $ 184 million per product in development and commercial milestone payments, as well as up to mid-single digit royalties on potential future sales.

In February 2022, the Company entered into a Lease Agreement (the “Winter Street Lease”) with ARE-Winter Street Property, LLC (the “Landlord”) for manufacturing space located at 840 Winter Street, Waltham, Massachusetts (the “Premises”).

Under the terms of the Winter Street Lease, the Company will lease approximately 140,000 square feet at the Premises, which will provide the Company with the ability to manufacture its own products in a GMP compliant facility as well as to supplement the Company’s current leased premises in Cambridge, Massachusetts.

The Winter Street Lease, including the obligation to pay rent, is expected to commence on February 1, 2024 (the “Commencement Date”).

The initial term of the Winter Street Lease is twelve years following the Commencement Date.

The base rent under the Winter Street Lease is $ 73.50 per square foot per year during the first year of the term, which is subject to scheduled 3% annual increases, plus certain operating expenses and taxes.

The Company has the option to extend the Winter Street Lease for two five-year terms.

EXHIBIT INDEX

27 unchanged sentences

First Amendment to Lease, dated as of April 5, 2019, by and between the Company and MIT 130 Brookline Leasehold LLC.

Fourth Amended and Restated Non-Employee Director Compensation Policy (4)

Fifth Amended and Restated Non-Employee Director Compensation Policy (4)

Lease Agreement, by and between the Registrant and 281-295 Albany Street Leasehold LLC, dated as of March 12, 2020 (12)

7 unchanged sentences

Lease Agreement by and between the Registrant and Are-Winter Street Property, LLC, dated as of February 22, 2022 (17)

Amended and Restated Retirement Policy for Equity Awards, effective December 6, 2022

Subsidiaries of the Registrant

47 unchanged sentences

001-37766) filed with the Securities and Exchange Commission on June 17, 2021

(17) Incorporated by reference to the Registrant’s Annual Report on Form 10-K (File No.

001-37766) filed with the Securities and Exchange Commission on February 24, 2022

(18) The certifications furnished in Exhibit 32.1 hereto are deemed to accompany this Annual Report on Form 10-K and will not be deemed “filed”

16 unchanged sentences

(Principal Financial and Accounting Officer)

/s/ Muna Bhanji

February 23, 2023

/s/ Fred Cohen

19 unchanged sentences

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-K

Item 9A. Controls and Procedures