10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

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: 001-39692

 

IN8BIO, INC.

(Exact name of Registrant as specified in its Charter)

 

 

Delaware

82-5462585

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

350 5th Avenue, Suite 5330

New York, New York

10118

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (646) 600-6438

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

 

INAB

 

The Nasdaq Stock Market LLC

 

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. YesNo

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). YesNo

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

 

 

Accelerated filer

 

 

 

 

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

 

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 No

The number of shares of Registrant’s Common Stock outstanding as of November 01, 2022 was 24,502,157.

 

 

 


Table of Contents

 

 

 

Page

PART I

FINANCIAL INFORMATION

 

Item 1.

Condensed Financial Statements (Unaudited)

1

 

Condensed Balance Sheets

1

 

Condensed Statements of Operations

2

 

Condensed Statements of Convertible Preferred Stock, Common Stock, and Stockholders’ Equity (Deficit)

3

 

Condensed Statements of Cash Flows

4

 

Notes to Condensed Financial Statements

5

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

14

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

25

Item 4.

Controls and Procedures

25

 

 

 

PART II

OTHER INFORMATION

 

Item 1.

Legal Proceedings

26

Item 1A.

Risk Factors

26

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

68

Item 3.

Defaults Upon Senior Securities

68

Item 4.

Mine Safety Disclosures

68

Item 5.

Other Information

68

Item 6.

Exhibits

69

 

Signatures

 

 

i


PART I—FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

IN8BIO, INC.

CONDENSED BALANCE SHEETS

(In thousands, except share and per share data)

 

 

 

September 30,

 

 

 

 

 

 

2022

 

 

December 31,

 

 

 

(unaudited)

 

 

2021

 

Assets

 

 

 

 

(Note 2)

 

Current assets

 

 

 

 

 

 

Cash

 

$

27,647

 

 

$

37,021

 

Prepaid expenses and other current assets

 

 

2,007

 

 

 

1,959

 

Total Current Assets

 

 

29,654

 

 

 

38,980

 

Non-current assets

 

 

 

 

 

 

Property and equipment, net

 

 

350

 

 

 

97

 

Construction in progress

 

 

3,197

 

 

 

403

 

Restricted cash

 

 

252

 

 

 

251

 

Right of use assets - financing leases

 

 

363

 

 

 

704

 

Right of use assets - operating leases

 

 

4,336

 

 

 

1,630

 

Other non-current assets

 

 

231

 

 

 

158

 

Total Non-Current Assets

 

 

8,729

 

 

 

3,243

 

Total Assets

 

$

38,383

 

 

$

42,223

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

1,108

 

 

$

395

 

Accrued expenses and other current liabilities

 

 

2,877

 

 

 

1,235

 

Short-term financing lease liability

 

 

276

 

 

 

392

 

Short-term operating lease liability

 

 

639

 

 

 

234

 

Total Current Liabilities

 

 

4,900

 

 

 

2,256

 

Long-term financing lease liability

 

 

67

 

 

 

269

 

Long-term operating lease liability

 

 

3,852

 

 

 

1,515

 

Total Non-Current Liabilities

 

 

3,919

 

 

 

1,784

 

Total Liabilities

 

 

8,819

 

 

 

4,040

 

Stockholders' Equity

 

 

 

 

 

 

Common stock, par value $0.0001 per share; 490,000,000 shares authorized at September 30, 2022 and December 31, 2021; 24,502,157 and 18,781,242 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

 

 

3

 

 

 

2

 

Additional paid-in capital

 

 

82,975

 

 

 

70,872

 

Accumulated deficit

 

 

(53,414

)

 

 

(32,691

)

Total Stockholders' Equity

 

 

29,564

 

 

 

38,183

 

Total Liabilities and Stockholders' Equity

 

$

38,383

 

 

$

42,223

 

 

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)

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Research and development

$

4,255

 

 

$

1,350

 

 

$

10,140

 

 

$

4,660

 

General and administrative

 

3,144

 

 

 

2,041

 

 

 

10,583

 

 

 

4,144

 

Total operating expenses

 

7,399

 

 

 

3,391

 

 

 

20,723

 

 

 

8,804

 

Loss from operations

 

(7,399

)

 

 

(3,391

)

 

 

(20,723

)

 

 

(8,804

)

Net loss

$

(7,399

)

 

$

(3,391

)

 

$

(20,723

)

 

$

(8,804

)

Net loss attributable to common stockholders (Note 9)

$

(7,399

)

 

$

(3,391

)

 

$

(20,723

)

 

$

(8,804

)

Net loss per share attributable to common stockholders – basic and diluted

$

(0.34

)

 

$

(0.25

)

 

$

(1.05

)

 

$

(1.26

)

Weighted-average number of shares used in computing net loss per common share, basic and diluted

 

21,661,544

 

 

 

13,377,682

 

 

 

19,774,070

 

 

 

7,004,099

 

 

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)

 

 

 

Convertible
Preferred Stock
Series A

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated

 

 

Total
Stockholders’ Equity

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

(Deficit)

 

Balance at December 31, 2020

 

 

9,993,727

 

 

$

34,900

 

 

 

 

3,764,488

 

 

$

1

 

 

$

1,458

 

 

$

(18,038

)

 

$

(16,579

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

361

 

 

 

 

 

 

361

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,363

)

 

 

(2,363

)

Balance at March 31, 2021

 

 

9,993,727

 

 

$

34,900

 

 

 

 

3,764,488

 

 

$

1

 

 

$

1,819

 

 

$

(20,401

)

 

$

(18,581

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

392

 

 

 

 

 

 

392

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,050

)

 

 

(3,050

)

Balance at June 30, 2021

 

 

9,993,727

 

 

$

34,900

 

 

 

 

3,764,488

 

 

$

1

 

 

$

2,211

 

 

$

(23,451

)

 

$

(21,239

)

Issuance of common stock – as a result of IPO, net of issuance costs

 

 

 

 

 

 

 

 

 

4,000,000

 

 

 

1

 

 

 

32,290

 

 

 

 

 

 

32,291

 

Conversion of convertible preferred stock to common stock upon closing of IPO

 

 

(9,993,727

)

 

 

(34,900

)

 

 

 

10,990,065

 

 

 

1

 

 

 

34,899

 

 

 

 

 

 

34,900

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

477

 

 

 

 

 

 

477

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,391

)

 

 

(3,391

)

Balance at September 30, 2021

 

 

 

 

$

 

 

 

 

18,754,553

 

 

$

3

 

 

$

69,877

 

 

$

(26,842

)

 

$

43,038

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2021

 

 

 

 

$

 

 

 

 

18,781,242

 

 

$

2

 

 

$

70,872

 

 

$

(32,691

)

 

$

38,183

 

Stock option exercises

 

 

 

 

 

 

 

 

 

31,025

 

 

 

 

 

 

33

 

 

 

 

 

 

33

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

764

 

 

 

 

 

 

764

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,145

)

 

 

(6,145

)

Balance at March 31, 2022

 

 

 

 

$

 

 

 

 

18,812,267

 

 

$

2

 

 

$

71,669

 

 

$

(38,836

)

 

$

32,835

 

Stock option exercises

 

 

 

 

 

 

 

 

 

26,204

 

 

 

 

 

 

28

 

 

 

 

 

 

28

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

884

 

 

 

 

 

 

884

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,179

)

 

 

(7,179

)

Balance at June 30, 2022

 

 

 

 

$

 

 

 

 

18,838,471

 

 

$

2

 

 

$

72,581

 

 

$

(46,015

)

 

$

26,568

 

Issuance of common stock, net of issuance costs

 

 

 

 

 

 

 

 

 

5,663,686

 

 

 

1

 

 

 

9,497

 

 

 

 

 

 

9,498

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

897

 

 

 

 

 

 

897

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,399

)

 

 

(7,399

)

Balance at September 30, 2022

 

 

 

 

$

 

 

 

 

24,502,157

 

 

$

3

 

 

$

82,975

 

 

$

(53,414

)

 

$

29,564

 

 

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

3


 

IN8BIO, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

Operating activities

 

 

 

 

 

 

Net loss

 

$

(20,723

)

 

$

(8,804

)

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

 

 

 

 

 

 

Depreciation

 

 

71

 

 

 

67

 

Non-cash stock-based compensation

 

 

2,545

 

 

 

1,230

 

Amortization of financing lease right-of-use assets

 

 

341

 

 

 

392

 

Amortization of operating lease right-of-use assets

 

 

340

 

 

 

95

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

(48

)

 

 

(3,117

)

Other non-current assets

 

 

(73

)

 

 

(268

)

Accounts payable

 

 

710

 

 

 

42

 

Accrued expenses and other current liabilities

 

 

969

 

 

 

(938

)

Short-term operating lease liabilities

 

 

45

 

 

 

87

 

Long-term operating lease liabilities

 

 

(349

)

 

 

(119

)

Net cash used in operating activities

 

 

(16,172

)

 

 

(11,333

)

Investing activities

 

 

 

 

 

 

Purchases of property and equipment

 

 

(48

)

 

 

 

Construction in progress

 

 

(2,394

)

 

 

(153

)

Net cash used in investing activities

 

 

(2,442

)

 

 

(153

)

Financing activities

 

 

 

 

 

 

Proceeds from the issuance of common stock, net of offering costs

 

 

9,498

 

 

 

36,327

 

Principal payments on financing leases

 

 

(318

)

 

 

(390

)

Exercise of common stock options

 

 

61

 

 

 

 

Loan payable

 

 

 

 

 

(174

)

Deferred offering costs paid

 

 

 

 

 

(1,596

)

Net cash provided by financing activities

 

 

9,241

 

 

 

34,167

 

Net (decrease) increase in cash and restricted cash

 

 

(9,373

)

 

 

22,681

 

Cash and restricted cash at beginning of period

 

 

37,272

 

 

 

17,994

 

Cash and restricted cash at end of period

 

$

27,899

 

 

$

40,675

 

 

 

 

 

 

 

 

Cash, end of period

 

$

27,647

 

 

$

40,424

 

Restricted cash, end of period

 

 

252

 

 

 

251

 

Cash and restricted cash, end of period

 

$

27,899

 

 

$

40,675

 

 

 

 

 

 

 

 

Supplemental disclosure of non-cash financing and investing activities:

 

 

 

 

 

 

Construction in progress included in accounts payable and accrued liabilities

 

$

676

 

 

$

30

 

Conversion of preferred stock - Series A into common stock

 

$

 

 

$

34,900

 

Right-of-use assets obtained in exchange for financing lease

 

$

 

 

$

309

 

Right-of-use assets obtained in exchange for operating lease

 

$

 

 

$

969

 

Initial measurement of operating lease right-of-use assets and liabilities

 

$

3,046

 

 

$

3,483

 

 

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 GBM and 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 August 3, 2021, the Company completed its initial public offering (“IPO”) in which it issued and sold 4,000,000 shares of its common stock at a public offering price of $10.00 per share. The Company received net proceeds from the IPO of $32.3 million, after deducting underwriters’ discounts, commissions, and offering-related costs. Upon closing of the IPO, all of the Company's outstanding shares of convertible preferred stock automatically converted into 10,990,065 shares of common stock (see Note 6).

Liquidity and Capital Resources

To date, the Company has funded its operations primarily with proceeds from various public and private offerings of its common and preferred stock. The Company has incurred recurring losses and negative operating cash flows since its inception, including net losses of $20.7 million and $8.8 million for the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022, the Company had an accumulated deficit of $53.4 million.

On August 16, 2022, the Company completed an underwritten public offering of 5,394,737 shares of its common stock at a public offering price of $1.90 per share, for net proceeds of approximately $9.3 million, after deducting underwriting discounts, commissions and offering expenses. On August 19, 2022, the underwriter partially exercised their option to purchase an additional 268,949 shares at the public offering price of $1.90 per share, resulting in additional net proceeds of approximately $