f
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO |
Commission File Number:
(Exact name of Registrant as specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Name of each exchange on which registered |
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Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The number of shares of Registrant’s Common Stock outstanding as of August 7, 2022 was
Table of Contents
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Page |
PART I |
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Item 1. |
1 |
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1 |
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2 |
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Condensed Statements of Convertible Preferred Stock, Common Stock and Stockholders’ Equity (Deficit) |
3 |
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4 |
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5 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
14 |
Item 3. |
24 |
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Item 4. |
24 |
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PART II |
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Item 1. |
25 |
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Item 1A. |
25 |
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Item 2. |
66 |
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Item 3. |
67 |
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Item 4. |
67 |
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Item 5. |
67 |
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Item 6. |
67 |
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68 |
i
PART I—FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
IN8BIO, INC.
CONDENSED BALANCE SHEETS
(In thousands, except share and per share data)
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June 30, |
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2022 |
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December 31, |
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(unaudited) |
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2021 |
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Assets |
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(Note 2) |
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Current assets |
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Cash |
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$ |
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$ |
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Prepaid expenses and other current assets |
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Total Current Assets |
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Non-current assets |
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Property and equipment, net |
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Construction in progress |
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Restricted cash |
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Right of use assets - financing leases |
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Right of use assets - operating leases |
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Other non-current assets |
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Total Non-Current Assets |
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Total Assets |
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$ |
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$ |
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Liabilities and Stockholders' Equity |
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Liabilities |
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Current liabilities |
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Accounts payable |
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$ |
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$ |
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Accrued expenses and other current liabilities |
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Short-term financing lease liability |
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Short-term operating lease liability |
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Total Current Liabilities |
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Long-term financing lease liability |
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Long-term operating lease liability |
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Total Non-Current Liabilities |
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Total Liabilities |
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Stockholders' Equity |
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Common stock, par value $ |
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Additional paid-in capital |
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Accumulated deficit |
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( |
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( |
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Total Stockholders' Equity |
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Total Liabilities and Stockholders' Equity |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited condensed financial statements.
1
IN8BIO, INC.
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
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Three Months Ended |
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Six Months Ended |
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2022 |
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2021 |
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2022 |
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2021 |
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Operating expenses: |
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Research and development |
$ |
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$ |
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$ |
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$ |
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General and administrative |
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Total operating expenses |
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Loss from operations |
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( |
) |
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( |
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( |
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( |
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Net loss |
$ |
( |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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Net loss attributable to common stockholders (Note 10) |
$ |
( |
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$ |
( |
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$ |
( |
) |
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$ |
( |
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Net loss per share attributable to common stockholders – basic and diluted |
$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Weighted-average number of shares used in computing net loss per common share, basic and diluted |
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The accompanying notes are an integral part of these unaudited condensed financial statements.
2
IN8BIO INC.
CONDENSED STATEMENTS OF CONVERTIBLE PREFERRED STOCK, COMMON STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
(In thousands, except share data)
(Unaudited)
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Convertible |
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Common Stock |
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Additional |
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Accumulated |
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Total |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Deficit |
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(Deficit) |
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Balance at December 31, 2020 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Balance at March 31, 2021 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Balance at June 30, 2021 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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Balance at December 31, 2021 |
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— |
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$ |
— |
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$ |
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$ |
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$ |
( |
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$ |
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Stock option exercises |
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— |
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— |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Balance at March 31, 2022 |
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— |
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$ |
— |
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$ |
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$ |
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$ |
( |
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$ |
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Stock option exercises |
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— |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Balance at June 30, 2022 |
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— |
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$ |
— |
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$ |
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$ |
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$ |
( |
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$ |
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The accompanying notes are an integral part of these unaudited condensed financial statements.
3
IN8BIO, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
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Six Months Ended June 30, |
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2022 |
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2021 |
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Operating activities |
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Net loss |
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$ |
( |
) |
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$ |
( |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation |
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Non-cash stock-based compensation |
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Amortization of financing lease right-of-use assets |
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Amortization of operating lease right-of-use assets |
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Changes in operating assets and liabilities: |
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Prepaid expenses and other current assets |
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( |
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Other non-current assets |
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( |
) |
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— |
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Accounts payable |
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( |
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Accrued expenses and other current liabilities |
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( |
) |
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Short-term operating lease liabilities |
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Long-term operating lease liabilities |
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( |
) |
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( |
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Net cash used in operating activities |
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( |
) |
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( |
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Investing activities |
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Purchases of property and equipment |
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( |
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— |
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Construction in progress |
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( |
) |
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— |
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Net cash used in investing activities |
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( |
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— |
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Financing activities |
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Principal payments on financing leases |
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( |
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( |
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Exercise of common stock options |
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— |
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Deferred offering costs paid |
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— |
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( |
) |
Net cash used in financing activities |
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( |
) |
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( |
) |
Net decrease in cash and restricted cash |
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( |
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( |
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Cash and restricted cash at beginning of period |
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Cash and restricted cash at end of period |
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$ |
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$ |
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Cash, end of period |
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$ |
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$ |
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Restricted cash, end of period |
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— |
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Cash and restricted cash, end of period |
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$ |
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$ |
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Supplemental disclosure of non-cash financing and investing activities: |
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Purchase of construction in progress in accounts payable |
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$ |
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$ |
— |
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Purchase of property and equipment in accounts payable |
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$ |
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$ |
— |
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Deferred offering costs included in accounts payable and accrued expenses |
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$ |
— |
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$ |
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Initial measurement of operating lease right-of-use assets and liabilities |
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$ |
— |
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$ |
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The accompanying notes are an integral part of these unaudited condensed financial statements.
4
IN8BIO, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. ORGANIZATION AND NATURE OF OPERATIONS
Organization and Business
IN8bio, Inc. (the “Company”) is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of gamma-delta T cell therapies for the treatment of cancer. The Company’s lead product candidates are currently in Phase 1 clinical trials: INB-200, for the treatment of patients with newly diagnosed glioblastoma (“GBM”), and INB-100, for the treatment of patients with leukemia that are undergoing hematopoietic stem cell transplantation (“HSCT”). In addition, the Company’s DeltEx platform has yielded a broad portfolio of preclinical programs, including INB-300 and INB-400, focused on addressing other solid tumor types.
Incysus, Inc. (“Incysus”) was a corporation formed in the State of Delaware on November 23, 2015 and Incysus, Ltd. was incorporated in Bermuda on February 8, 2016. Incysus was the wholly owned United States subsidiary of Incysus, Ltd. On May 7, 2018, Incysus, Ltd. reincorporated in the United States in a domestication transaction (the “Domestication”) in which Incysus, Ltd. converted into a newly formed Delaware corporation, Incysus Therapeutics, Inc. (“Incysus Therapeutics”). On July 24, 2019, Incysus Therapeutics merged with Incysus. Incysus Therapeutics subsequently changed its name to IN8bio, Inc. in August 2020. Following the Domestication in May 2018 and the merging of Incysus Therapeutics and Incysus in July 2019, the Company does not have any subsidiaries to consolidate. The Company is headquartered in New York, New York.
Coronavirus Pandemic
The ongoing COVID-19 pandemic, including the periods of resurgences of cases relating to the spread of various strains, has had a significant impact, both direct and indirect, on businesses and commerce, as certain worker shortages have occurred, supply chains have been disrupted, and facilities and productions have been suspended. The COVID-19 pandemic has impacted and may continue to impact the clinical sites and startup activities for the Company’s Phase 1/2 clinical trial, including third-party manufacturing and logistics providers, which have disrupted and may continue to disrupt its supply chains and the availability or cost of materials, and it has affected and may continue to affect the Company’s ability to timely initiate, enroll and complete its clinical trials, conduct regulatory activities and operate its business more generally. The ongoing pandemic may impact the timing of regulatory approval of the investigational new drug application for clinical trials, the enrollment of any clinical trials that are approved, the availability of clinical trial materials and regulatory approval and commercialization of our products. The pandemic may also continue to impact the capital markets, inflation expectations and the Company’s ability to access capital, which could negatively impact short-term and long-term liquidity. The full extent to which the pandemic may impact the Company’s operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including as a result of evolving variants of COVID-19, the duration and intensity of the related effects of the pandemic and the uncertainty of the timing of the broader economic recovery to pre-pandemic levels.
Initial Public Offering
On
Liquidity and Capital Resources
Through June 30, 2022, the Company funded its operations primarily with proceeds from its Series A convertible preferred stock financing (“Series A Financing”) and with proceeds from its IPO. The Company has incurred recurring losses and negative operating cash flows from operations since its inception, including net losses of $
The Company has not yet generated product sales and as a result has experienced operating losses since inception. The Company expects to incur additional losses in the future to conduct research and development and will need to raise additional capital to fully implement management’s business plan. However, if such financing is not available at adequate levels, the Company may need to reevaluate its operating plans. On August 11, 2022, the Company announced the pricing of an underwritten public offering of
5
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Significant Accounting Policies
The Company’s significant accounting policies, which are disclosed in the audited financial statements for the year ended December 31, 2021 and the notes thereto, are included in the Company’s Annual Report on Form 10-K (the “Annual Report”) that was filed with the Securities and Exchange Commission (“SEC”) on March 17, 2022. Since the date of that filing, there have been no material changes to the Company’s significant accounting policies.
Basis of Presentation
Unaudited Interim Financial Information
The condensed financial statements of the Company included herein have been prepared pursuant to the rules and regulations of the SEC. Certain information and note disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted from these condensed financial statements, as is permitted by such rules and regulations. Accordingly, these condensed financial statements should be read in conjunction with the financial statements and notes thereto in the Company's Annual Report. The results for any interim period are not necessarily indicative of results for any future period. In the opinion of the Company’s management, all adjustments (consisting of normal and recurring adjustments) considered necessary for a fair statement of the results for the interim periods presented have been included.
Use of Estimates
The preparation of condensed financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed financial statements, and the reported amounts of expenses during the reporting periods presented. Such estimates and assumptions are used for, but are not limited to, the accrual of research and development expenses, deferred tax assets and liabilities and related valuation allowance, fair value of common stock and stock-based compensation, and the useful lives of property and equipment. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Actual results could differ from those estimates.
Property and Equipment
Property and equipment are stated at cost, less accumulated depreciation. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets. Significant replacements and improvements are capitalized, while maintenance and repairs, which do not improve or extend the life of the respective assets, are charged to expense as incurred.
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Estimated Useful Life |
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Computer equipment |
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Furniture |
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Laboratory equipment |
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Costs for capital assets not yet placed into service are capitalized as construction-in-progress and depreciated in accordance with the above guidelines once placed into service. Upon retirement or disposal of property and equipment, the cost and related accumulated depreciation are removed from the balance sheet and any gain or loss is reflected in the statement of operations.
Recently Issued Accounting Standards Updates
In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, Income Taxes (Topic 740): Simplifying the Accounting of Income Taxes ("Topic 740"), which is intended to simplify various aspects related to 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. This guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2021, with early adoption permitted. The Company has evaluated this guidance and determined that it does not have a material impact to its condensed financial statements.
6
3. PROPERTY AND EQUIPMENT, NET
Property and equipment, net consists of the following (in thousands):
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June 30, |
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December 31, |
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Machinery and equipment |
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$ |
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$ |
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Furniture and fixtures |
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Less accumulated depreciation |
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( |
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( |
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Property and equipment, net |
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$ |
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$ |
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Depreciation expense was $
4. CONSTRUCTION IN PROGRESS
Construction in progress consists of the following (in thousands):
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June 30, |
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December 31, |
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Furniture |
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$ |
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$ |
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Leasehold improvements |
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Internal use software not yet in service |
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Construction in progress |
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$ |
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$ |
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5. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following (in thousands):
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June 30, |
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December 31, |
|
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Accrued clinical trials |
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$ |
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$ |
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Accrued compensation |
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Accrued other |
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Total accrued expenses and other current liabilities |
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$ |
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$ |
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6. Debt
In April 2020, the Company was granted a loan (the “Loan”) in an amount of $
The Company used the entire Loan amount for qualifying expenses.
In August 2021, the Company repaid the Loan of $
7. CONVERTIBLE PREFERRED STOCK AND Stockholders' Equity
Our amended and restated certificate of incorporation authorizes us to issue up to
Convertible Preferred Stock
Upon closing of the IPO, all of the Company's outstanding shares of convertible preferred stock automatically converted into
7
8. STOCK-BASED COMPENSATION
2018 Equity Incentive Plan
On May 7, 2018, the Company established and adopted the 2018 Equity Incentive Plan (the “2018 Plan”) providing for the granting of stock awards for employees, directors and consultants to purchase shares of the Company’s common stock. Upon the effectiveness of the 2020 Plan (as defined below), the plan was terminated and no further issuances were made under the 2018 Plan, although it continues to govern the terms of any equity grants that remain outstanding under the 2018 Plan.
2020 Equity Incentive Plan
The 2020 Equity Incentive Plan (the “2020 Plan”) was approved by the Board of Directors and the Company’s stockholders and became effective on July 29, 2021. The Board of Directors, or committee thereof, is authorized to administer the 2020 Plan. The 2020 Plan provides for the grant of incentive stock options (“ISOs”) within the meaning of Section 422 of the U.S. Internal Revenue Code of 1986, as amended, to employees, and for the grant of nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of awards to employees, directors and consultants and any affiliates’ employees and consultants. The number of shares initially reserved for issuance under the 2020 Plan was 2,626,710, which automatically increases on January 1 of each year for a period of
2020 Employee Stock Purchase Plan
The 2020 Employee Stock Purchase Plan (the “2020 ESPP”) was approved by the Company’s Board of Directors and the Company’s stockholders and became effective on July 29, 2021. A total of
Stock Option Activity
The following is a summary of the stock option award activity during the six months ended June 30, 2022:
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Number |
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Weighted- |
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Weighted- |
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Aggregate |
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Outstanding at December 31, 2021 |
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$ |
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$ |
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Granted |
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Exercised |
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( |
) |
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Forfeited |
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( |
) |
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Outstanding at June 30, 2022 |
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$ |
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$ |
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Exercisable at June 30, 2022 |
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$ |
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$ |
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Options expected to vest as of June 30, 2022 |
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$ |
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