What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-03 compared with 2023-08-07 · 141 added, 102 removed, 542 unchanged (31% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts) June 30,

(in thousands, except share and per share amounts) September 30,

2023 December 31,

13 unchanged sentences

Accounts payable (1)

$ 14,124 $ 4,332

Accrued expenses and other current liabilities (2)

14,023 10,688

Operating lease liability 11,219 11,694

7 unchanged sentences

775,000,000 shares authorized;

97,269,915 and 97,209,213 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

97,324,301 and 97,209,213 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

Additional paid-in capital 619,791 609,849

3 unchanged sentences

Total liabilities and stockholders’ equity $ 239,145 $ 360,314

(1) Includes related party amount of $ 0.3 million as of June 30, 2023 and December 31, 2022.

(1) Includes related party amount of $ 0.1 million as of September 30, 2023.

(2) Includes related party amount of $ 0.3 million as of December 31, 2022 .

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

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

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

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except share and per share amounts) 2023 2022 2023 2022

20 unchanged sentences

Comprehensive loss $ ( 50,589 ) $ ( 29,654 ) $ ( 132,255 ) $ ( 82,965 )

(1) Includes related party amount of $ 0.3 million and $ 0.6 million for the three and six months ended June 30, 2023, respectively.

(1) Includes related party amount of $ 0.1 million and $ 0.8 million for the three and nine months ended September 30, 2023, respectively.

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

19 unchanged sentences

Balance as of June 30, 2023 97,269,915 2 615,347 ( 268 ) ( 374,979 ) 240,102

Issuance of common stock upon exercise of stock options 54,386 — 227 — — 227

Stock-based compensation expense — — 4,217 — — 4,217

Change in unrealized loss on investments, net of tax — — — 119 — 119

Net loss — — — — ( 50,708 ) ( 50,708 )

Balance as of September 30, 2023 97,324,301 $ 2 $ 619,791 $ ( 149 ) $ ( 425,687 ) $ 193,957

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

19 unchanged sentences

Balance as of June 30, 2022 115,761,842 196,157 45,658,957 199,643 33,512,269 — 29,651 ( 150 ) ( 224,564 ) ( 195,063 )

Issuance of common stock upon exercise of stock options — — — — 55,687 — 204 — — 204

Repurchase of unvested restricted common stock — — — — ( 8,044 ) — — — — —

Stock-based compensation expense — — — — — — 1,417 — — 1,417

Net loss — — — — — — — — ( 29,350 ) ( 29,350 )

Change in unrealized loss on investments, net of tax — — — — — — — ( 304 ) — ( 304 )

Balance as of September 30, 2022 115,761,842 $ 196,157 45,658,957 $ 199,643 33,559,912 $ — $ 31,272 $ ( 454 ) $ ( 253,914 ) $ ( 223,096 )

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

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended

September 30,

(in thousands) 2023 2022

2 unchanged sentences

Adjustments to reconcile net loss to net cash used in operating activities

Non cash lease expense 6,304 4,222

Stock-based compensation expense 9,481 3,885

Non cash lease expense 9,440 6,992

Depreciation expense 3,406 1,354

2 unchanged sentences

Deferred income taxes ( 279 ) ( 762 )

Loss on disposal of property and equipment — 8

Changes in operating assets and liabilities:

4 unchanged sentences

Net cash used in operating activities ( 121,548 ) ( 101,114 )

Cash flows provided by (used in) investing activities:

Cash flows used in investing activities:

Maturities of investments 85,021 68,000

2 unchanged sentences

Payments of security deposits ( 170 ) ( 664 )

Net cash provided by (used in) investing activities 15,196 ( 19,898 )

Net cash used in investing activities ( 22,574 ) ( 33,409 )

Cash flows provided by (used in) financing activities:

Payments of deferred offering costs — ( 1,896 )

Net proceeds from stock option exercises 461 63

Payments of deferred offering costs — ( 2,642 )

Net cash provided by (used in) financing activities 461 ( 2,579 )

9 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended

September 30,

(in thousands) 2023 2022

1 unchanged sentence

Right-of-use assets obtained in exchange for new operating lease liabilities $ 3,265 $ 28,590

Decrease in right-of-use assets due to lease termination $ 6,100 $ —

Supplemental disclosure of non-cash investing and financing activities:

28 unchanged sentences

Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

Since its inception, the Company has incurred substantial losses and as of June 30, 2023, the Company had an accumulated deficit of $ 375.0 million.

Since its inception, the Company has incurred substantial losses and, as of September 30, 2023, the Company had an accumulated deficit of $ 425.7 million.

The Company expects to generate operating losses and negative operating cash flows for the foreseeable future.

The Company expects that its cash, cash equivalents, and investments as of June 30, 2023 of $ 207.6 million will be sufficient to fund its operations for at least the next twelve months from the date of issuance of these financial statements.

The Company expects that its cash, cash equivalents, and investments as of September 30, 2023 of $ 165.3 million will be sufficient to fund its operations for at least the next twelve months from the date of issuance of these financial statements.

The Company will need additional financing to support its continuing operations and pursue its growth strategy.

10 unchanged sentences

are unaudited.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of June 30, 2023, the results of its operations for the three and six months ended June 30, 2023 and 2022, the condensed consolidated statements of stockholders’ equity for the three and six months ended June 30, 2023 and 2022, and its cash flows for the six months ended June 30, 2023 and 2022.

The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2023 and 2022 are also unaudited.

The results for the three and six months ended June 30, 2023 are not necessarily indicative of results to be expected for the year ending December 31, 2023, any other interim periods, or any future year or period.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of September 30, 2023, the results of its operations for the three and nine months ended September 30, 2023 and 2022, the condensed consolidated statements of stockholders’ equity for the three and nine months ended September 30, 2023 and 2022, and its cash flows for the nine months ended September 30, 2023 and 2022.

The financial data and other information disclosed in these notes related to the three and nine months ended September 30, 2023 and 2022 are also unaudited.

The results for the three and nine months ended September 30, 2023 are not necessarily indicative of results to be expected for the year ending December 31, 2023, any other interim periods, or any future year or period.

The condensed consolidated balance sheet data as of December 31, 2022 was derived from our audited financial statements, but does not include all disclosures required by U.S.

15 unchanged sentences

The following tables present the Company’s fair value hierarchy for its assets that are measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair value:

As of June 30, 2023:

As of September 30, 2023:

(in thousands) Level 1 Level 2 Level 3 Total

1 unchanged sentence

Money market funds $ — $ 20,204 $ — $ 20,204

Treasury bills and government securities — 100,886 — 100,886

Treasury and government securities — 15,980 — 15,980

Short-term investments:

Treasury bills and government securities — 80,645 — 80,645

Treasury and government securities — 116,541 — 116,541

Related party short-term investment:

11 unchanged sentences

The Company classifies its U.S.

Treasury as short-term based on each instrument’s underlying contractual maturity date.

Treasury securities as short-term based on each instrument’s underlying contractual maturity date.

The fair value of the Company’s U.S.

3 unchanged sentences

Unrealized gains and losses of investments in debt securities consisted of the following:

As of June 30, 2023:

As of September 30, 2023:

(in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value

Short-term investments in debt securities:

Treasury bills and government securities $ 80,920 $ — $ ( 275 ) $ 80,645

Treasury and government securities $ 116,692 $ — $ ( 151 ) $ 116,541

Total short-term investments in debt securities $ 116,692 $ — $ ( 151 ) $ 116,541

2 unchanged sentences

Short-term investments:

Treasury bills and government securities $ 98,851 $ — $ ( 384 ) $ 98,467

Treasury and government securities $ 98,851 $ — $ ( 384 ) $ 98,467

Total short-term investments in debt securities $ 98,851 $ — $ ( 384 ) $ 98,467

The contractual maturities of the Company’s investments in debt securities held were as follows:

(in thousands) June 30,

(in thousands) September 30,

2023 December 31,

1 unchanged sentence

Marketable securities in unrealized loss positions consisted of the following:

As of June 30, 2023:

As of September 30, 2023:

(in thousands, except number of securities) Number of Securities Fair Value Gross Unrealized Losses

Investments in continuous loss position for less than 12 months:

Treasury bills and government securities 26 $ 80,645 $ ( 275 )

Based on factors such as historical experience, market data, issuer-specific factors, and current economic conditions, the Company did not record an allowance for credit losses as of June 30, 2023 related to these investments.

Treasury and government securities 46 $ 111,506 $ ( 151 )

Further, given the lack of significant change in the credit risk, the Company does not consider these investments to be impaired.

1 unchanged sentence

Property and equipment, net consisted of the following:

(in thousands) June 30,

(in thousands) September 30,

2023 December 31,

9 unchanged sentences

Depreciation expense related to property and equipment is as follows:

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

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

(in thousands) 2023 2022 2023 2022

2 unchanged sentences

Accrued expenses and other current liabilities consisted of the following:

(in thousands) June 30,

(in thousands) September 30,

2023 December 31,

19 unchanged sentences

On January 1, 2023, the annual increase resulted in an additional 4,860,461 shares authorized being added to the 2022 Plan.

As of June 30, 2023, the Company had 16,788,508 shares reserved under the 2022 Plan and the 2019 Plan, and 9,172,130 shares available for issuance under the 2022 Plan.

As of September 30, 2023, the Company had 16,734,122 shares reserved under the 2022 Plan and the 2019 Plan, and 8,808,586 shares available for issuance under the 2022 Plan.

2022 Employee Stock Purchase Plan

2 unchanged sentences

On January 1, 2023, the annual increase resulted in an additional 971,350 shares authorized being added to the 2022 Plan.

As of June 30, 2023, the Company had 1,942,700 shares available for issuance under the 2022 Plan.

No shares of the Company’s common stock were issued during the six months ended June 30, 2023 related to the 2022 ESPP.

As of September 30, 2023, the Company had 1,942,700 shares available for issuance under the 2022 Plan.

No shares of the Company’s common stock were issued during the nine months ended September 30, 2023 related to the 2022 ESPP.

Stock Options

The following table summarizes the Company’s stock option activity for the six months ended June 30, 2023:

The following table summarizes the Company’s stock option activity for the nine months ended September 30, 2023:

Number of Shares Weighted-Average Exercise Price

3 unchanged sentences

Cancelled or forfeited ( 276,165 ) 8.82

Outstanding at June 30, 2023 7,204,648 $ 9.48

Options vested and exercisable at June 30, 2023 1,528,964 $ 5.64

Options vested and expected to vest at June 30, 2023 7,204,648 $ 9.48

As of June 30, 2023, there was $ 44.3 million of total unrecognized compensation cost related to time-based unvested stock options the Company expects to recognize such amount over a remaining weighted-average period of 3.0 years.

Outstanding at September 30, 2023 7,513,806 $ 9.77

Options vested and exercisable at September 30, 2023 1,926,941 $ 6.49

Options vested and expected to vest at September 30, 2023 7,513,806 $ 9.77

As of September 30, 2023, there was $ 44.0 million of total unrecognized compensation cost related to time-based unvested stock options the Company expects to recognize such amount over a remaining weighted-average period of 2.9 years.

Performance-Based Stock Options

The following table summarizes the Company’s performance-based stock option activity for the six months ended June 30, 2023:

The following table summarizes the Company’s performance-based stock option activity for the nine months ended September 30, 2023:

Number of Shares Weighted-Average

3 unchanged sentences

Cancelled or forfeited — —

Outstanding at June 30, 2023 411,730 $ 6.65

Vested and exercisable at June 30, 2023 121,160 $ 5.11

As of June 30, 2023, there was $ 2.3 million of total unrecognized compensation cost related to performance-based stock options.

Outstanding at September 30, 2023 411,730 $ 6.65

Vested and exercisable at September 30, 2023 121,160 $ 5.11

As of September 30, 2023, there was $ 2.3 million of total unrecognized compensation cost related to performance-based stock options.

Restricted Common Stock Awards

1 unchanged sentence

The vesting of these restricted stock awards are time-based or performance-based.

Time-Based Restricted Common Stocks

The following table summarizes the Company’s time-based restricted common stock activity for the six months ended June 30, 2023 :

Time-Based Restricted Common Stock

The following table summarizes the Company’s time-based restricted common stock activity for the nine months ended September 30, 2023 :

Number of Shares Weighted-Average Grant-Date Fair Value

2 unchanged sentences

Repurchased — —

Outstanding at June 30, 2023 2,308,037 $ 0.12

As of June 30, 2023, there was $ 0.3 million of total unrecognized compensation cost related to unvested ti me-based restricted common stock which the Company expects to recognize over a weighted-average period of 0.8 years.

Outstanding at September 30, 2023 1,262,000 $ 0.16

As of September 30, 2023, there was $ 0.2 million of total unrecognized compensation cost related to unvested ti me-based restricted common stock which the Company expects to recognize over a weighted-average period of 0.9 years.

Performance-Based Restricted Common Stock

The following table summarizes the Company’s performance-based restricted common stock activity for the six months ended June 30, 2023 :

The following table summarizes the Company’s performance-based restricted common stock activity for the nine months ended September 30, 2023 :

Number of Shares Weighted-Average Grant-Date Fair Value

1 unchanged sentence

Repurchased — —

Outstanding at June 30, 2023 3,832,769 $ 0.07

As of June 30, 2023, there was $ 0.3 million of total unrecognized compensation cost related to unvested performance-based restricted common stock.

Outstanding at September 30, 2023 3,832,769 $ 0.07

As of September 30, 2023, there was $ 0.3 million of total unrecognized compensation cost related to unvested performance-based restricted common stock.

Stock-Based Compensation

The following table below summarizes the classification of the Company’s stock-based compensation expense related to stock options and restricted common stock awards in the condensed consolidated statements of operations and comprehensive loss:

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

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2023 2022 2023 2022

7 unchanged sentences

Upon the commencement of the Amended Lease, the Company recorded a lease liability and a right-of-use asset of $ 3.3 million.

The Company’s building leases consist of office and laboratory space under non-cancelable operating leases.

Future annual lease payments under non-cancelable operating leases as of June 30, 2023 w ere as follows:

The table below reconciles the undiscounted future annual lease payments to the total operating lease liabilities recorded in the condensed consolidated balance sheet as of September 30, 2023 :

(in thousands) Undiscounted

6 unchanged sentences

Also subject to any credits pursuant to the terms of the lease, the Company expects to pay up to approximately $ 208.7 million over the ten-year lease term .

As of June 30, 2023, the lease has not commenced in accordance with ASC 842, Leases ;

accordingly, the operating lease liabilities and operating lease right-of-use assets on the condensed consolidated balance sheet through June 30, 2023, and the table above, exclude any amounts related to this lease.

As of September 30, 2023, the lease has not commenced in accordance with ASC 842, Leases ;

accordingly, the operating lease liabilities and operating lease right-of-use assets on the condensed consolidated balance sheet through September 30, 2023, and the table above excludes any amounts related to this lease.

As of September 30, 2023, the Company determined that it is reasonably certain to exercise its option to terminate one of its leases.

This option allows the Company to terminate its lease by providing an advanced notice to the lessor.

This determination and the subsequent reassessment of the lease resulted in a $ 6.1 million deduction of the Company’s operating lease liability and its operating lease right-of-use asset on the condensed consolidated balance sheet as of September 30, 2023.

Further, the above table includes the reduction in lease payments resulting from the reasonably certain lease termination.

License and Collaboration Agreements

3 unchanged sentences

Basic and diluted net loss per common share attributable to common stockholders was calculated as follows:

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

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except share and per share amounts) 2023 2022 2023 2022

8 unchanged sentences

The following common stock equivalents were excluded from the calculation of diluted net loss per share applicable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

As of June 30,

As of September 30,

Anti-dilutive common stock equivalents:

Stock Options to purchase common stock 7,325,808 3,593,533

Options to purchase common stock 7,634,966 3,971,557

Unvested restricted common stock 5,094,769 10,597,726

4 unchanged sentences

Founder Consulting Services

For both the three months ended June 30, 2023 and 2022, the Company made payments of $ 37,500 in each period, and for the six months ended June 30, 2023 and 2022, the Company made payments of $ 75,000 in each period to one of the co-founder stockholders for scientific consulting and other expenses.

As of June 30, 2023 and December 31, 2022, there were no amounts included within accounts payable.

For both the three months ended September 30, 2023 and 2022, the Company made payments of $ 37,500 in each period, and for the nine months ended September 30, 2023 and 2022, the Company made payments of $ 112,500 in each period to one of the co-founder stockholders for scientific consulting and other expenses.

As of September 30, 2023, $ 12,500 was included within accounts payable, and, as of December 31, 2022, there were no amounts included within accounts payable.

Myeloid Therapeutics

2 unchanged sentences

The Company and Myeloid have one common board member, who is also an affiliate of Newpath, one of the Company’s holders of its common stock.

The Company provided notice to Myeloid of its intent to terminate the Myeloid Collaboration Agreement during the second quarter of 2023.

As of June 30, 2023 and December 31, 2022, there was $ 0.3 million related to license fees included within accrued expenses and other current liabilities.

The Company provided notice to Myeloid of its intent to terminate the Myeloid Collaboration Agreement during the second quarter of 2023, which termination is now effective.

As of September 30, 2023, there was $ 0.1 million in

accounts payable, and, as of December 31, 2022, there was $ 0.3 million included within accrued expenses and other current liabilities related to license fees.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

51 unchanged sentences

Results of Operations

Comparison of the Three Months Ended June 30, 2023 and 2022

The following table summarizes our results of operations for the three months ended June 30, 2023 and 2022:

Three Months Ended June 30,

Comparison of the Three Months Ended September 30, 2023 and 2022

The following table summarizes our results of operations for the three months ended September 30, 2023 and 2022:

Three Months Ended

September 30,

(in thousands, except share and per share amounts) 2023 2022 Change

13 unchanged sentences

Research and Development Expenses

Three Months Ended June 30,

Three Months Ended

September 30,

(in thousands) 2023 2022 Change

3 unchanged sentences

Facility related and other 6,160 4,821 1,339

License, intellectual property fees, and other 1,500 1,255 245

Professional and consultant fees 1,868 543 1,325

License, intellectual property fees, and other 1,510 1,945 (435)

Total research and development expenses $ 40,967 $ 25,047 $ 15,920

The $15.7 million increase in research and development expense for the three months ended June 30, 2023 as compared to the three months ended June 30, 2022 was primarily driven by:

The $15.9 million increase in research and development expense for the three months ended September 30, 2023 as compared to the three months ended September 30, 2022 was primarily driven by:

• $8.8 million increase in lab supplies expense due to continued discovery efforts and expansion of our research and development activities, including ongoing IND-enabling activities, and increased personnel in our R&D function;

2 unchanged sentences

General and Administrative Expenses

Three Months Ended June 30,

Three Months Ended

September 30,

(in thousands, except share and per share amounts) 2023 2022 Change

General and administrative expenses:

Professional and consultant fees $ 4,241 $ 2,783 $ 1,458

Personnel expenses $ 4,908 $ 3,255 $ 1,653

Professional and consultant fees 3,659 2,518 1,141

Facility related and other 1,925 835 1,090

Total general and administrative expenses $ 10,492 $ 6,608 $ 3,884

The $3.3 million increase in general and administrative expense for the three months ended June 30, 2023 as compared to the three months ended June 30, 2022 is primarily driven by $1.5 million increase in professional and consultant fees and $1.1 million increase in personnel expenses, both driven by growth in personnel as we operate as a public company and to support our growing research and development function.

The $3.9 million increase in general and administrative expense for the three months ended September 30, 2023 as compared to the three months ended September 30, 2022 is primarily driven by:

• $1.7 million increase in personnel expenses and $1.1 million increase in professional and consultant fees, both driven by growth in personnel as we operate as a public company and to support our growing research and development function;

• $1.1 million increase in facility related expenses primarily due to the expansion and build out of our office space.

Other Income (Expense)

Three Months Ended June 30,

Three Months Ended

September 30,

(in thousands, except share and per share amounts) 2023 2022 Change

6 unchanged sentences

Other Income, Net

Other income, net for the three months ended June 30, 2023 primarily consists of interest income from the Company’s short-term investments.

Comparison of the Six Months Ended June 30, 2023 and 2022

The following table summarizes our results of operations for the six months ended June 30, 2023 and 2022:

Six Months Ended June 30,

Other income, net for the three months ended September 30, 2023 primarily consists of interest income from the Company’s short-term investments.

Comparison of the Nine Months Ended September 30, 2023 and 2022

The following table summarizes our results of operations for the nine months ended September 30, 2023 and 2022:

Nine Months Ended

September 30,

(in thousands, except share and per share amounts) 2023 2022 Change

13 unchanged sentences

Research and Development Expenses

Six Months Ended June 30,

Nine Months Ended

September 30,

(in thousands) 2023 2022 Change

3 unchanged sentences

Facility related and other 17,485 11,122 6,363

License, intellectual property fees, and other 3,375 2,630 745

Professional and consultant fees 4,945 1,263 3,682

License, intellectual property fees, and other 4,885 4,575 310

Total research and development expenses $ 106,446 $ 57,664 $ 48,782

The $32.9 million increase in research and development expense for the six months ended June 30, 2023 as compared to the six months ended June 30, 2022 was primarily driven by:

The $48.8 million increase in research and development expense for the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022 was primarily driven by:

• $22.8 million increase in lab supplies expense due to continued discovery efforts and expansion of our research and development activities, including ongoing IND-enabling activities, and increased personnel in our R&D function;

2 unchanged sentences

General and Administrative Expenses

Six Months Ended June 30,

Nine Months Ended

September 30,

(in thousands) 2023 2022 Change

4 unchanged sentences

Total general and administrative expenses $ 30,303 $ 20,194 $ 10,109

The $6.2 million increase in general and administrative expense for the six months ended June 30, 2023 as compared to the six months ended June 30, 2022 is primarily driven by:

The $10.1 million increase in general and administrative expense for the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022 is primarily driven by:

• $3.7 million increase in professional and consultant fees and $3.4 million increase in personnel expenses, which includes an increase in stock-based compensation expense of $2.6 million, both driven by growth in personnel as we operate as a public company and to support our growing research and development function;

1 unchanged sentence

Other Income (Expense)

Six Months Ended June 30,

Nine Months Ended

September 30,

(in thousands) 2023 2022 Change

6 unchanged sentences

Other Income, Net

Other income, net for the six months ended June 30, 2023 primarily consists of interest income from the Company’s short-term investments.

Other income, net for the nine months ended September 30, 2023 primarily consists of interest income from the Company’s short-term investments.

Liquidity and Capital Resources

3 unchanged sentences

To date, we have funded our operations primarily with proceeds from sales of preferred stock and from our initial public offering.

As of June 30, 2023, we had cash, cash equivalents, and investments of $207.6 million, excluding our restricted cash, or $221.1 million, including restricted cash.

As of September 30, 2023, we had cash, cash equivalents, and investments of $165.3 million, excluding our restricted cash, or $178.8 million, including restricted cash.

The following table summarizes our sources and uses of cash for each of the periods presented:

Six Months Ended June 30,

Nine Months Ended

September 30,

(in thousands) 2023 2022

1 unchanged sentence

Net cash used in operating activities $ (121,548) $ (101,114)

Net cash provided by (used in) investing activities 15,196 (19,898)

Net cash used in investing activities (22,574) (33,409)

Net cash provided by (used in) financing activities 461 (2,579)

1 unchanged sentence

Operating Activities

Net cash used in operating activities for the six months ended June 30, 2023 was driven primarily by the following uses of cash:

Net cash used in operating activities for the nine months ended September 30, 2023 was driven primarily by the following uses of cash:

• $132.5 million net loss;

• $6.6 million change in lease liabilities;

• $9.0 million change in prepaid and other current assets;

• $3.4 million change in accrued expenses and other current liabilities.

• $8.9 million change in lease liabilities.

These were offset by:

• $13.6 million of non-cash amounts included in net loss, which primarily consisted of non-cash lease expense, stock-based compensation expense, change in fair value of short-term investment — related party, and depreciation and amortization expense;

• $22.7 million of non-cash amounts included in net loss, which primarily consisted of stock-based compensation expense, non-cash lease expense, depreciation and amortization expense, and change in fair value of short-term investment — related party;

• $6.9 million change in accounts payable.

Net cash used in operating activities for the six months ended June 30, 2022 was driven primarily by the following uses of cash:

Net cash used in operating activities for the nine months ended September 30, 2022 was driven primarily by the following uses of cash:

• $82.5 million net loss;

1 unchanged sentence

• $7.6 million change in lease liabilities;

• $1.1 million change in prepaid and other current assets.

These were offset by:

2 unchanged sentences

Investing Activities

Net cash provided by investing activities for the six months ended June 30, 2023 was driven primarily by the following uses of cash:

• $19.3 million of maturities of marketable securities, net of purchases;

Net cash provided by investing activities for the nine months ended September 30, 2023 was driven primarily by the following uses of cash:

• $15.5 million of purchases of marketable securities, net of maturities;

• $6.9 million of purchases of property and equipment.

Net cash used in investing activities for the six months ended June 30, 2022 was driven primarily by the following:

Net cash used in investing activities for the nine months ended September 30, 2022 was driven primarily by the following:

• $21.5 million of purchases of marketable securities, net of maturities;

1 unchanged sentence

Financing Activities

Net cash used in financing activities for the six months ended June 30, 2022 was driven by payment of deferred financing costs related to our IPO.

Net cash used in financing activities for the nine months ended September 30, 2022 was driven by payment of deferred financing costs related to our IPO.

Funding Requirements

6 unchanged sentences

For more information, refer to the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, and the “Risk Factors” section of subsequent Quarterly Reports on Form 10-Q.

We believe our existing cash, cash equivalents, and investments will be sufficient to fund our operating expenses and capital expenditure requirements into 2025.

We believe our existing cash, cash equivalents, and investments will be sufficient to fund our operating expenses and capital expenditure requirements through the end of 2024.

We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

7 unchanged sentences

If we receive regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on where we choose to commercialize ourselves.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of private and public equity offerings, debt financings, additional collaborations, strategic alliances, and marketing, distribution or licensing arrangements with third parties.

To the extent that we raise additional capital

through the sale of equity or convertible debt securities, ownership interest may be materially diluted, and the terms of such securities could include liquidation or other preferences that adversely affect your rights as a common stockholder.

and marketing, distribution or licensing arrangements with third parties.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, ownership interest may be materially diluted, and the terms of such securities could include liquidation or other preferences that adversely affect your rights as a common stockholder.

Debt financing and preferred equity financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specified actions, such as incurring additional debt, making capital expenditures or declaring dividends.

4 unchanged sentences

These contracts generally provide for termination on notice, and therefore are cancellable contracts and not included in the table of contractual obligations and commitments.

During the six months ended June 30, 2023, except for the minimum rental commitments disclosed in Note 7, Leases , to the unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q, there were no significant changes to our contractual obligations and commitments described under Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2022.

During the nine months ended September 30, 2023, except for the minimum rental commitments disclosed in Note 7, Leases , to the unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q, there were no significant changes to our contractual obligations and commitments described under Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2022.

Critical Accounting Policies and Significant Judgments and Estimates

4 unchanged sentences

Actual results may differ from these estimates.

During the six months ended June 30, 2023, there were no material changes to our critical accounting policies and significant judgements described under Management’s Discussion and Analysis of Critical Accounting Policies and Significant Judgments and Estimates which are included in our Annual Report on Form 10-K for the year ended December 31, 2022.

During the nine months ended September 30, 2023, there were no material changes to our critical accounting policies and significant judgements described under Management’s Discussion and Analysis of Critical Accounting Policies and Significant Judgments and Estimates which are included in our Annual Report on Form 10-K for the year ended December 31, 2022.

Recently Issued and Adopted Accounting Pronouncements

2 unchanged sentences

The Jumpstart Our Business Startups Act of 2012 permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies.

We have elected not to “opt out” of such extended transition period, which means that when a standard is issued or revised and it has different

application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company.

We have elected not to “opt out” of

such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company.

As a result of this election, our condensed consolidated financial statements may not be comparable to other public companies that comply with new or revised accounting pronouncements as of public company effective dates.

1 unchanged sentence

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

What changed 10-Q

Item 1. Financial Statements