QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 2023 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Delaware (State or other jurisdiction of (Address of principal executive offices) Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.0001 per share CRBU The Nasdaq Global Select Market o o Large accelerated filer o Accelerated filer o Non-accelerated filer x Smaller reporting company x Emerging growth company x March 31, December 31, 2022 2021 ASSETS CURRENT ASSETS Cash and cash equivalents $ 147,630 $ 240,420 Marketable securities, short-term 206,101 135,412 Accounts receivable 374 1,153 Contract assets 1,494 1,488 Other receivables 4,169 5,483 Prepaid expenses and other current assets 8,242 7,236 Total current assets 368,010 391,192 NON-CURRENT ASSETS Investments in equity securities 7,666 7,626 Marketable securities, long-term 37,092 37,676 Property and equipment - net 6,016 4,887 Operating lease, right of use asset 25,749 0 Other assets 1,464 975 TOTAL ASSETS $ 445,997 $ 442,356 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES Accounts payable $ 1,814 $ 3,990 Accrued expenses and other current liabilities 11,190 13,136 Lease liabilities 825 0 Deferred revenue 12,838 8,703 Total current liabilities 26,667 25,829 LONG-TERM LIABILITIES Deferred revenue, net of current portion ($100 and $100 from related party) 17,326 22,032 Deferred rent and lease incentive liability 0 2,097 MSKCC success payments liability 2,484 4,080 Lease liabilities, non-current 27,238 0 Other liabilities 9 17 Deferred tax liabilities 476 476 Total liabilities 74,200 54,531 COMMITMENTS AND CONTINGENCIES (Note 9) STOCKHOLDERS’ EQUITY Preferred stock, par value $0.0001 per share, 10,000,000 shares authorized at March 31, 2022 and December 31, 2021; 0 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively 0 0 Common stock, par value $0.0001 per share, 300,000,000 shares authorized at March 31, 2022 and December 31, 2021, respectively; 60,689,609 and 60,263,158 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively 6 6 Additional paid-in-capital 489,762 485,748 Accumulated other comprehensive loss (1,089 ) (135 ) Accumulated deficit (116,882 ) (97,794 ) Total stockholders’ equity 371,797 387,825 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 445,997 $ 442,356 Three Months Ended March 31, 2022 2021 Licensing and collaboration revenue $ 2,664 $ 1,586 Operating expenses: Research and development 13,924 10,165 General and administrative 9,593 4,596 Total operating expenses 23,517 14,761 Loss from operations (20,853 ) (13,175 ) Other income (expense): Change in fair value of equity securities (88 ) — Change in fair value of the MSKCC success payments liability 1,596 — Other income - net 257 16 Total other income (expense) 1,765 16 Net loss (19,088 ) (13,159 ) Other comprehensive loss: Net unrealized loss on available-for-sale marketable securities, net of tax (954 ) — Net comprehensive loss $ (20,042 ) $ (13,159 ) Net loss per share, basic and diluted $ (0.32 ) $ (1.39 ) Weighted-average common shares outstanding, basic and diluted 60,546,170 9,499,448 Convertible Preferred Stock Common Stock Additional Paid-In Other Comprehensive Retained Earnings (Accumulated Total Stockholders’ Equity Shares Amount Shares Amount Capital Income (Loss) Deficit) (Deficit) BALANCE—December 31, 2021 — $ — 60,263,158 $ 6 $ 485,748 $ (135 ) $ (97,794 ) $ 387,825 Stock-based compensation expense — — — — 3,024 — — 3,024 Issuance of common stock under employee stock plans — — 36,596 — 361 — — 361 Issuance of common stock on exercise of options — — 389,855 — 629 — — 629 Net unrealized loss on available-for-sale marketable securities — — — — — (954 ) — (954 ) Net loss — — — — — — (19,088 ) (19,088 ) BALANCE—March 31, 2022 — $ — 60,689,609 $ 6 $ 489,762 $ (1,089 ) $ (116,882 ) $ 371,797 BALANCE—December 31, 2020 7,766,582 $ 41,323 9,710,830 $ 1 $ 7,433 $ — $ (30,871 ) $ (23,437 ) Issuance of Series C convertible preferred stock, net of issuance costs of $6.2 million 6,663,940 108,827 — — — — — — Issuance of common stock on exercise of options — — 584,614 — 564 — — 564 Stock-based compensation expense — — — — 343 — — 343 Net loss — — — — — — (13,159 ) (13,159 ) BALANCE—March 31, 2021 14,430,522 $ 150,150 10,295,444 $ 1 $ 8,340 $ — $ (44,030 ) $ (35,689 ) Three Months Ended March 31, 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (19,088 ) $ (13,159 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 308 221 Loss on disposal of fixed assets 0 3 Interest expense 0 4 Non-cash consideration for licensing and collaboration revenue (128 ) 0 Change in fair value of equity securities 88 0 Stock-based compensation expense 3,024 343 Change in fair value of MSKCC success payments liability (1,596 ) 686 Amortization of investment premiums 327 0 Non-cash lease expense 500 0 Changes in operating assets and liabilities: Accounts receivable 779 74 Contract assets (6 ) 355 Other receivables 1,313 (1,095 ) Prepaid expenses and other current assets (1,296 ) (562 ) Other assets (487 ) (421 ) Accounts payable (1,915 ) 37 Accrued expenses and other current liabilities (2,831 ) 3,879 Deferred revenue, current and long-term (572 ) 29,964 Deferred rent and lease incentive liability 0 (8 ) Operating lease liabilities (85 ) 0 Other liabilities (8 ) (8 ) Net cash provided by (used in) operating activities (21,673 ) 20,313 CASH FLOWS FROM INVESTING ACTIVITIES: Maturities of marketable securities 39,300 0 Purchases of property and equipment (723 ) (22 ) Purchases of marketable securities (110,684 ) 0 Net cash used in investing activities (72,107 ) (22 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of Series C convertible preferred stock, net of issuance costs 0 109,235 Proceeds from exercise of stock options and purchases of common stock under employee stock purchase plan 990 564 Payments on capital lease 0 (119 ) Net cash provided by financing activities 990 109,680 NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH (92,790 ) 129,971 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — BEGINNING OF PERIOD 240,466 15,953 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — END OF PERIOD $ 147,676 $ 145,924 RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH Cash and cash equivalents $ 147,630 $ 145,924 Restricted cash 46 0 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ON THE BALANCE SHEET $ 147,676 $ 145,924 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for income taxes $ 0 $ 0 Cash paid for interest $ 0 $ 1 SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Acquisition of property and equipment included in accrued expenses and other current liabilities $ 981 $ 95 Deferred issuance costs related to initial public offering unpaid at period end $ 0 $ 422 Series C convertible preferred stock issuance costs unpaid at period end $ 0 $ 408 Right-of-use-assets obtained in exchange for new operating lease liabilities $ 26,249 $ 0 Basis of Presentation and Principles of Consolidation Use of Estimates Segments Concentrations of Credit Risk and Other Uncertainties Revenue Accounts Receivable and Three Months Ended As of As of March 31, 2022 March 31, 2021 March 31, 2022 December 31, 2021 Licensee A 23.1 % 38.8 % * * Licensee B 19.6 % 34.1 % 28.0 % 24.6 % Licensee C 35.0 % * 33.4 % 45.1 % Licensee D * * 14.3 % * Total 77.8 % 72.9 % 75.7 % 69.7 % Recent Accounting Pronouncements January 1, 2022 Pre-ASC 842 Balance ASC 842 Adoption Impact Post-ASC 842 Balance Operating lease right-of-use assets $ — $ 22,818 $ 22,818 Prepaid rent $ 291 $ (291 ) $ — Accrued expenses and other current liabilities* $ 13,136 $ 683 $ 13,819 Long-term operating lease liabilities $ — $ 23,941 $ 23,941 Deferred rent and lease incentive liability $ 2,097 $ (2,097 ) $ — In June 2016, the FASB issued ASU 2016-13, Financial 3. Fair Value Measurements and Fair Value of Financial Instruments The following table sets forth our financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands): Fair Value Measurements as of March 31, 2022 Total Level 1 Level 2 Level 3 Assets: Commercial paper ($46,516 included in cash and cash equivalents) $ 129,369 $ — $ 129,369 $ — U.S. Treasury bills ($26,990 included in cash and cash equivalents) 110,358 110,358 — — Money market fund investments (included in cash and cash equivalents) 64,730 64,730 — — Corporate debt securities ($2,999 included in cash and cash equivalents) 64,207 — 64,207 — U.S. government agency bonds ($6,395 included in cash and cash equivalents) 22,159 — 22,159 — Total fair value of assets $ 390,823 $ 175,088 $ 215,735 $ — Liabilities: MSKCC success payments liability $ 2,484 $ — $ — $ 2,484 Total fair value of liabilities $ 2,484 $ — $ — $ 2,484 Fair Value Measurements as of December 31, 2021 Total Level 1 Level 2 Level 3 Assets: Money market fund investments (included in cash and cash equivalents) $ 181,528 $ 181,528 $ — $ — Commercial paper ($58,892 included in cash and cash equivalents) 141,676 — 141,676 — Corporate debt securities 38,649 — 38,649 — U.S. Treasury bills 26,590 26,590 — — U.S. government agency bonds 25,065 — 25,065 — Total fair value of assets $ 413,508 $ 208,118 $ 205,390 $ — Liabilities: MSKCC success payments liability $ 4,080 $ — $ — $ 4,080 Total fair value of liabilities $ 4,080 $ — $ — $ 4,080 As of March 31, 2022 Amortized Unrealized Unrealized Estimated Commercial paper ($46,516 included in cash and cash equivalents) $ 129,544 $ 3 $ (178 ) $ 129,369 U.S. Treasury bills ($26,990 included in cash and cash equivalents) 110,867 1 (510 ) 110,358 Money market investments (included in cash equivalents) 64,730 — — 64,730 Corporate debt securities ($2,999 included in cash and cash equivalents) 64,479 3 (275 ) 64,207 U.S. government agency bonds ($6,395 included in cash and cash equivalents) 22,291 — (132 ) 22,159 Total cash equivalents and marketable securities $ 391,911 $ 7 $ (1,095 ) $ 390,823 Classified as: Cash and cash equivalents $ 147,630 Marketable securities, short-term 206,101 Marketable securities, long-term 37,092 Total cash equivalents and marketable securities $ 390,823 As of December 31, 2021 Amortized Unrealized Unrealized Estimated Money market investments (included in cash equivalents) $ 181,528 $ - $ — $ 181,528 Commercial paper ($58,892 included in cash equivalents) 141,726 1 (51 ) 141,676 U.S. government agency bonds 25,102 - (37 ) 25,065 Corporate debt securities 38,661 4 (16 ) 38,649 U.S. Treasury bills 26,626 1 (37 ) 26,590 Total cash equivalents and marketable securities $ 413,643 $ 6 $ (141 ) $ 413,508 Classified as: Cash and cash equivalents $ 240,420 Marketable securities, short-term 135,412 Marketable securities, long-term 37,676 Total cash equivalents and marketable securities $ 413,508 MSKCC Success Payments Balance at December 31, 2021 $ 4,080 Change in fair value (1,596 ) Balance at March 31, 2022 $ 2,484 As of As of Fair value of common stock $ 9.180 $ 15.090 Risk-free interest rate 2.32 % 1.52 % Expected volatility 75 % 75 % Probability 4.2% to 14.2% 7.0% to 20.9% Expected term (years) 4.6 to 6.0 4.2 to 5.5 Form 10-K. Multiple of Initial Share Price giving rise to a success payment 5x 10x 15x MSKCC success payments (in millions) $ 10.0 $ 10.0 $ 15.0 On February 9, 2021, we entered into a Collaboration and License Agreement We received an upfront cash payment of 2022. We enter into agreements with third parties to in-license intellectual property and related materials and know-how. These agreements may include non-refundable, upfront payments; annual license maintenance fees; sublicensing fees; obligations to reimburse for patent prosecution and maintenance fees; success payments; regulatory clinical and commercial milestones; and royalty payments. Our obligation to make such payments is contingent upon milestones being achieved, licensed products being commercialized, and the agreements remaining in effect. Three Months Ended March 31, 2022 2021 United States $ 2,612 $ 1,475 Rest of world 52 111 Total $ 2,664 $ 1,586 During the three months ended March 31, The following table presents changes in our contract assets and liabilities during the three months ended March 31, Balance as of Additions Deductions Balance as of Accounts receivable $ 1,153 $ 1,971 $ (2,750 ) $ 374 Contract assets: Unbilled accounts receivable $ 1,488 $ 1,494 $ (1,488 ) $ 1,494 Contract liabilities: Deferred revenue, current and long-term $ 30,735 $ 977 $ (1,548 ) $ 30,164 2023, primarily due to the decrease in unbilled research costs under the AbbVie Agreement. amount of additional billings during the three months ended March 31, 2023. the respective periods. Other receivables consisted of the following March 31, December 31, Patent cost reimbursements $ 3,377 $ 4,702 Accrued interest on marketable securities 436 226 Other 356 555 Total $ 4,169 $ 5,483 March 31, December 31, Prepaid contract manufacturing and clinical costs $ 4,704 $ 2,714 Prepaid insurance 1,086 1,897 Prepaid income taxes 1,486 1,486 Prepaid rent — 468 Other 966 671 Total $ 8,242 $ 7,236 March 31, December 31, Lab equipment $ 8,004 $ 6,848 Leasehold improvements 1,701 1,701 Computer equipment 477 273 Furniture and equipment 133 133 Construction in progress 86 9 Total property and equipment, gross 10,401 8,964 Less: accumulated depreciation and amortization (4,385 ) (4,077 ) Property and equipment, net $ 6,016 $ 4,887 2022. Accrued expenses and other current liabilities consisted of the following March 31, December 31, Accrued employee compensation and related expenses $ 2,479 $ 4,225 Accrued research and development expenses 4,149 4,065 Accrued patent expenses 3,180 3,213 Accrued sublicensing fees 582 586 Credit card liability — 259 Other 800 788 Total $ 11,190 $ 13,136 7. Related Party Transactions 2022. The components of lease costs, which are included in our statements of operations and comprehensive loss, Three Months Ended Operating lease cost* $ 1,799 Short-term lease cost 63 Total lease cost $ 1,862 Supplemental information related to our leases Three Months Ended March 31, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 871 The following table summarizes a maturity analysis of our operating lease liabilities showing the aggregate lease payments as of March 31, Remainder of 2022* $ 1,074 2023** 4,212 2024 4,527 2025 4,475 2026 5,720 Thereafter 28,037 Total undiscounted lease payments 48,045 Less: imputed interest (19,982 ) Total discounted lease payments 28,063 Less: current portion of lease liability (825 ) Noncurrent portion of lease liability $ 27,238 Contingencies Common stock reserved for future issuance SM (the “ATM Sales Agreement”) with Jefferies LLC (“Jefferies”) with respect to an at-the-market (“ATM”) equity offering program, pursuant to which, through Jefferies as sales agent, we may from time to time, sell shares of our common stock having an aggregate offering price of up to $100.0 million in gross proceeds under the Shelf Registration Statement. As of March 31, 2023, we have sold 168,635 shares of our common stock under the ATM Sales Agreement at an average price per share of $7.32 for aggregate gross proceeds of $1.2 million ($1.0 million net of offering expenses). As of As of Stock options, issued and outstanding 6,286,542 6,757,591 Stock options, authorized for future issuance 6,783,690 3,749,339 Stock available under our Employee Stock Purchase Plan 1,077,035 511,000 Unvested restricted stock units 60,000 0 14,207,267 11,017,930 11. Stock-Based Compensation The following table summarizes stock option activity under our equity incentive plans during the three months ended March 31, Shares Available Stock Options Weighted- Weighted- Aggregate Outstanding at December 31, 2021 3,749,339 6,757,591 $ 8.57 8.7 $ 50,085 Addition to option pool 3,013,157 Options granted (339,030 ) 339,030 10.47 Options exercised — (389,855 ) 1.61 Options cancelled or forfeited 420,224 (420,224 ) 7.04 Outstanding at March 31, 2022 6,843,690 6,286,542 $ 9.20 8.7 $ 19,821 Exercisable at March 31, 2022 1,555,480 $ 4.11 7.1 $ 8,617 Vested and expected to vest at March 31, 2022 6,286,542 $ 9.20 8.7 $ 19,821 2023: We estimated the fair value of each employee and non-employee stock option award on the grant date using the Black-Scholes option-pricing model based on the following Three Months Ended March 31, 2022 2021 Volatility 71.7% - 72.0% 76.4% to 76.5% Expected term (in years) 5.5 to 6.0 6.0 to 6.1 Risk-free interest rate 1.7% to 2.3% 1.1% to 1.2% Expected dividend yield 0.0% 0.0% Number of Shares Underlying Outstanding Restricted Stock Weighted-Average Grant Date Fair Value per RSU Unvested, January 1, 2022 0 $ 0 Granted 60,000 10.64 Unvested, March 31, 2022 60,000 $ 10.64 employment during the performance period. As of March 31, As of March 31, 2023, there was approximately $0.6 million of unrecognized stock-based compensation expense related to unvested PSUs. 2023. We recorded stock-based compensation expense related to employee and non-employee equity-based awards grants in our condensed consolidated statements of operations and comprehensive loss Three Months Ended March 31, 2022 2021 Research and development $ 1,100 $ 197 General and administrative 1,924 146 Total $ 3,024 $ 343 Three Months Ended March 31, 2022 2021 Stock options $ 2,930 $ 343 ESPP 63 0 RSUs 31 0 Total $ 3,024 $ 343 The following table sets forth the computation of the basic and diluted net loss per share (in thousands, except share and per share amounts): Three Months Ended 2022 2021 Numerator: Net loss $ (19,088 ) $ (13,159 ) Denominator: Weighted-average common shares outstanding used to compute net loss per share, basic and diluted 60,546,170 9,499,448 Net loss per share, basic and diluted $ (0.32 ) $ (1.39 ) As of As of Convertible preferred stock 0 26,234,654 Stock options outstanding 6,286,542 5,463,543 RSUs issued and outstanding 60,000 Shares committed under ESPP 51,687 0 Common shares subject to nonrecourse notes 0 409,795 6,398,229 32,107,992 9, 2023. cells (“HSCs”). CB-012 is being evaluated in investigational new drug (“IND”) application-enabling studies to support a planned IND application submission for r/r AML in the second half of 2023. Three Months Ended March 31, 2022 2021 Change (in thousands) �� External costs: Expenses related to licensing, sublicensing revenue, and milestones $ 308 $ 1,175 $ (867 ) Services provided by CROs, CMOs, and other third parties that conduct preclinical studies and clinical trials on our behalf 3,972 2,858 1,114 Other research and development expenses 2,336 2,722 (386 ) Total external costs 6,616 6,755 (139 ) Internal costs: Personnel-related expenses 5,597 2,435 3,162 Facilities and other allocated expenses 1,711 975 736 Total internal costs 7,308 3,410 3,898 Total research and development expenses $ 13,924 $ 10,165 $ 3,759 a clinical-stage public company. (the “MSKCC Agreement”). 2022 Three Months Ended March 31, 2022 2021 Change (in thousands) Licensing and collaboration revenue $ 2,664 $ 1,586 $ 1,078 Operating expenses Research and development 13,924 10,165 3,759 General and administrative 9,593 4,596 4,997 Total operating expenses 23,517 14,761 8,756 Loss from operations (20,853 ) (13,175 ) (7,678 ) Other income (expense) Interest income 251 4 247 Interest expense — (5 ) 5 Change in fair value of equity securities (88 ) — (88 ) Change in fair value of the MSKCC success payments liability 1,596 — 1,596 Other income 6 17 (11 ) Total other income (expense) 1,765 16 1,749 Net loss $ (19,088 ) $ (13,159 ) $ (5,929 ) periods indicated: Three Months Ended March 31, 2022 2021 Change (in thousands) AbbVie $ 933 $ — $ 933 Other licensing agreements 1,731 1,586 145 Total licensing revenue $ 2,664 $ 1,586 $ 1,078 periods indicated: 2022. (the “ ATM Sales Agreement”) with Jefferies LLC (“Jefferies”), pursuant to which, upon the terms and subject to the conditions and limitations set forth in the ATM Sales Agreement, we may, from time to time, in our sole discretion, issue and sell, through Jefferies, acting as sales agent, up to $100.0 million of our shares of common stock, by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended. Jefferies uses commercially reasonable efforts consistent with its normal sales and trading practices to sell shares from time to time, based upon our instructions (including any price or size limits or other customary parameters or conditions we may impose). We pay Jefferies a commission equal to 3.0% of the aggregate gross proceeds of any shares sold through Jefferies pursuant to the ATM Sales Agreement. As of March 31, and payments under certain of our license agreements as described in Note 4 to our condensed consolidated financial statements included elsewhere in this Form 10-Q. 2022 Three Months Ended March 31, 2022 2021 Change (in thousands) Cash provided by (used in) operating activities $ (21,673 ) $ 20,313 $ (41,986 ) Cash used in investing activities (72,107 ) (22 ) (72,085 ) Cash provided by financing activities 990 109,680 (108,690 ) Net increase (decrease) in cash and cash equivalents $ (92,790 ) $ 129,971 $ (222,761 ) 10-K. communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. 2023 2023. Description 3.1 3.2 4.1 10.2 10.2† 31.2* 32.1** 32.2** 101.INS* Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. 101.SCH* Inline XBRL Taxonomy Extension Schema Document 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document 104* Cover Page Interactive Data File (embedded within the Inline XBRL document) Filed herewith. Caribou Biosciences, Inc. Date: May 9, By: /s/ Rachel E. Haurwitz (Principal Executive Officer) Date: May 9, By: /s/ Jason V. O'Byrne Jason V. O’Byrne☒x2022☐o45-3728228
incorporation or organization)(I.R.S. Employer
Identification No.), Suite 105, California94710 (Zip Code) (510) (510) 982-6030Yesx ☒ No ☐Yesx ☒ No ☐☐☐☒☐☒☐o☐o No ☒x2022,2023, the registrant had 60,705,39161,363,713 shares of common stock, $0.0001 par value per share, outstanding.Table of ContentsFINANCIALFINANCIAL INFORMATIONMarch 31,
2023December 31,
2022ASSETS CURRENT ASSETS Cash and cash equivalents $ 52,744 $ 58,338 Marketable securities, short-term 175,794 189,325 Accounts receivable 1,533 202 Contract assets 1,639 2,247 Other receivables 1,670 2,215 Prepaid expenses and other current assets 6,110 7,921 Total current assets 239,490 260,248 NON-CURRENT ASSETS Investments in equity securities 7,683 7,698 Marketable securities, long-term 62,452 69,373 Property and equipment, net 12,646 10,678 Operating lease, right of use assets 23,715 24,230 Other assets 1,476 1,538 TOTAL ASSETS $ 347,462 $ 373,765 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES Accounts payable $ 2,651 $ 1,146 Accrued expenses and other current liabilities 12,544 16,079 Lease liabilities, current 1,022 966 Deferred revenue ($150 and $150 from related party, respectively) 10,883 9,937 Total current liabilities 27,100 28,128 LONG-TERM LIABILITIES Deferred revenue, net of current portion 13,911 15,954 MSKCC success payments liability 1,396 1,651 Lease liabilities, non-current 26,401 26,780 Deferred tax liabilities 382 381 Total liabilities 69,190 72,894 COMMITMENTS AND CONTINGENCIES (Note 9) STOCKHOLDERS’ EQUITY Preferred stock, par value $0.0001 per share, 10,000,000 shares authorized at March 31, 2023 and December 31, 2022; no shares issued and outstanding as of March 31, 2023 and December 31, 2022 — — Common stock, par value $0.0001 per share, 300,000,000 shares authorized at March 31, 2023 and December 31, 2022, respectively; 61,323,523 and 61,029,184 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively 6 6 Additional paid-in-capital 504,255 499,598 Accumulated other comprehensive loss (730) (1,518) Accumulated deficit (225,259) (197,215) Total stockholders’ equity 278,272 300,871 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 347,462 $ 373,765 Three Months Ended March 31, 2023 2022 Licensing and collaboration revenue $ 3,502 $ 2,664 Operating expenses: Research and development 25,709 13,924 General and administrative 8,909 9,593 Total operating expenses 34,618 23,517 Loss from operations (31,116) (20,853) Other income (expense): Change in fair value of equity securities (15) (88) Change in fair value of the MSKCC success payments liability 255 1,596 Other income, net 2,832 257 Total other income 3,072 1,765 Net loss (28,044) (19,088) Other comprehensive income (loss): Net unrealized gain (loss) on available-for-sale marketable securities, net of tax 788 (954) Net comprehensive loss $ (27,256) $ (20,042) Net loss per share, basic and diluted $ (0.46) $ (0.32) Weighted-average common shares outstanding, basic and diluted 61,186,514 60,546,170 Convertible Preferred Stock and Stockholders’ Equity (Deficit)Common Stock Additional Paid-In
CapitalAccumulated Other Comprehensive
LossAccumulated
DeficitTotal Stockholders’ Equity Shares Amount BALANCE—December 31, 2022 61,029,184 $ 6 $ 499,598 $ (1,518) $ (197,215) $ 300,871 Issuance of common stock under employee stock plans 70,271 — 404 — — 404 Issuance of common stock on exercise of options 55,433 — 115 — — 115 Issuance of common stock in connection with at-the-market offering, net of offering expenses 168,635 — 1,007 — — 1,007 Stock-based compensation expense — — 3,131 — — 3,131 Net loss — — — — (28,044) (28,044) Other comprehensive income — — — 788 — 788 BALANCE—March 31, 2023 61,323,523 $ 6 $ 504,255 $ (730) $ (225,259) $ 278,272 BALANCE—December 31, 2021 60,263,158 $ 6 $ 485,748 $ (135) $ (97,794) $ 387,825 Issuance of common stock under employee stock plans 36,596 — 361 — — 361 Issuance of common stock on exercise of options 389,855 — 629 — — 629 Stock-based compensation expense — — 3,024 — — 3,024 Net loss — — — — (19,088) (19,088) Other comprehensive loss — — — (954) — (954) BALANCE—March 31, 2022 60,689,609 $ 6 $ 489,762 $ (1,089) $ (116,882) $ 371,797 4Three Months Ended March 31, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (28,044) $ (19,088) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 589 308 Gain on disposal of fixed assets (34) — Non-cash consideration for licensing and collaboration revenue — (128) Change in fair value of equity securities 15 88 Stock-based compensation expense 3,131 3,024 Change in fair value of MSKCC success payments liability (255) (1,596) Amortization of investment premiums (1,494) 327 Non-cash lease expense 515 500 Changes in operating assets and liabilities: Accounts receivable (1,331) 779 Contract assets 607 (6) Other receivables 545 1,313 Prepaid expenses and other current assets 1,811 (1,296) Other assets 62 (487) Accounts payable 1,502 (1,915) Accrued expenses and other current liabilities (4,138) (2,831) Deferred revenue, current and long-term (1,097) (572) Operating lease liabilities (323) (85) Other liabilities — (8) Net cash used in operating activities (27,939) (21,673) CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sales and maturities of marketable securities 98,665 39,300 Purchases of marketable securities (75,931) (110,684) Purchases of property and equipment (2,031) (723) Net cash provided by (used in) investing activities 20,703 (72,107) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options and purchases of common stock under employee stock purchase plan 519 990 Proceeds from issuance of common stock related to at-the-market offering, net of offering expenses 1,123 — Net cash provided by financing activities 1,642 990 NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH (5,594) (92,790) CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — BEGINNING OF PERIOD 58,384 240,466 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — END OF PERIOD $ 52,790 $ 147,676 RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH Cash and cash equivalents $ 52,744 $ 147,630 Restricted cash 46 46 TOTAL CASH, CASH EQUIVALENTS, AND RESTRICTED CASH $ 52,790 $ 147,676 SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Purchases of property and equipment included in accounts payable and accrued expenses $ 1,714 $ 981 Offering costs included in accrued expenses $ 116 $ — Right-of-use-assets obtained in exchange for new operating lease liabilities $ — $ 26,249 CRISPR genome-editing biopharmaceutical company dedicated to developing innovative, transformative therapies for patients with devastating diseases. CRISPR is an acronym for Clustered Regularly Interspaced Short Palindromic Repeats.epeats (“CRISPR”) genome-editing biopharmaceutical company dedicated to developing transformative therapies for patients with devastating diseases. Our genome-editing platform, including our novel CRISPR platform, chRDNA (CRISPR hybrid RNA-DNA(“chRDNA,, or “chRDNA,” pronounced “chardonnay”), technologies, enables high genome-editingsuperior editing precision to develop cell therapies that are specifically engineeredarmored to target cancer and are armored for enhanced persistence.improve antitumor activity. We are advancing a pipeline of allogeneic, or off-the-shelf, cell therapies from our chimeric antigen receptor (“CAR”)-T T (“CAR-T”) cell and CAR-natural killer (“CAR-NK”) cell therapiesplatforms as readily available therapeutic treatments for the treatment of patients with hematologic malignancies and solid tumors.patients.$116.9$225.3 million as of March 31, 2022.2023. During the three months ended March 31, 2022,2023, we incurred a net loss of $19.1$28.0 million and used $21.7$27.9 million of cash in operating activities. We expect to continue to incur substantial losses, and our ability to achieve and sustain profitability will depend on the successful development, approval, and commercialization of our product candidates and on our achievement of sufficient revenue to support our cost structure. We may never achieve profitability and, unless and until we do, we will need to continue to raise additional capital. Our management expects that existing cash, cash equivalents, and marketable securities of $390.8$291.0 million as of March 31, 2022,2023, will be sufficient to fund our current operating plan for at least the next 12 months from the date of issuance of our condensed consolidated financial statements.20212022 included in ourAnnual Report on Form 10-K (“(“Form 10-K”), other than changes to our leasing policy described below in connection with the adoption of the guidance under the Accounting Standards Codification (“ASC”) 842, Leases.1one reportable and operating segment, which is the business of developing a pipeline of allogeneic CAR-T and CAR-NK cell therapies. Our president and chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for allocating resources and evaluating financial performance. All long-lived assets are maintained in the United States. We believe these financial institutions to be of high credit quality.arewere as follows:
Contract Assets As of
March 31,
2023As of
December 31,
2022 March 31, 2023 March 31, 2022 Licensee A 17.6 % 23.1 % 17.4 % * Licensee B 22.0 % 19.6 % 24.4 % 23.8 % Licensee C 45.9 % 35.0 % 45.7 % 36.6 % Total 85.5 % 77.7 % 87.5 % 60.4 % NaNNo allowance for doubtful accountscredit losses or contract asset impairment was recorded as of March 31, 20222023 or December 31, 2021.2022.LeasesWe adopted the guidance under ASC 842 on January 1, 2022 using the modified retrospective approach with a cumulative-effect adjustment as of January 1, 2022 in accordance with the Accounting Standard Update (“ASU”) 2016-02, Leases (Topic 842). We determine whether an arrangement is or contains a lease at the inception of the arrangement and whether such a lease is classified as a finance lease or operating lease at the commencement date of the lease. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities, and long-term lease liabilities. We elected not to recognize the right-of-use assets and lease liabilities for leases with lease terms of 12 months or less (short-term leases). Lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. As the interest rate implicit in our lease contracts is not readily determinable, we utilize a collateralized incremental borrowing rate based on the information available at the commencement date to determine the present value of lease payments. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received and impairment charges if we determine the right-of-use asset is impaired. There was no cumulative-effect adjustment recorded to retained earnings on January 1, 2022.We consider the lease term to be the noncancellable period that we have the right to use the underlying asset, together with any periods where it is reasonably certain we will exercise an option to extend (or not terminate) the lease. Periods covered by an option to extend (or not terminate) the lease in which the exercise of the option is controlled by the lessor are included in the lease term.Rent expense for operating leases is recognized on a straight-line basis over the lease term and is presented in operating expenses on the statements of operations and comprehensive loss. We have elected to not separate lease and non-lease components for our facilities leases and leases of electroporation devices and, instead, we account for each separate lease component and the non-lease components associated with that lease component as a single lease component. Variable lease payments are recognized as incurred and are presented in operating expenses on the statements of operations and comprehensive loss.7As of March 31, 2022 and December 31, 2021, we had 0 finance leases. For more information about the impact of adoption and disclosures on our leases, see Note 9.From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the “FASB”) or other standard-setting bodies and are adopted by us as of the specified effective date.In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This ASU requires a lessee to recognize in its statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. We adopted the new standard as of January 1, 2022, using the modified retrospective approach. Comparative periods were not adjusted and continue to be presented under the previous accounting guidance. We elected the package of practical expedients permitted under the transition guidance, which allowed us to carry forward the historical lease classification of contracts entered into prior to January 1, 2022.Our adoption of the new standard impacted the condensed consolidated balance sheets as follows (in thousands):*Adjustment represents the current portion of operating lease liabilities of $0.8 million and reclassification of the current portion of the lease incentive liability of $0.1 million to reduce the operating lease right-of-use assets.New Accounting Pronouncements Not Yet AdoptedInstruments–Instruments–Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326). This ASU provides guidance on the measurement of credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 replaces the current incurred loss impairment approach with a methodology to reflect expected credit losses and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates. This ASU is to be applied on a modified retrospective approach and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, and interim reporting periods within fiscal years beginning after December 15, 2023. Early adoption is permitted for all entities for fiscal years beginning after December 15, 2018, and interim periods therein. We are currently evaluating the impact of adoption ofadopted ASU 2016-13 on January 1, 2023. The impact on our condensed consolidated financial statements.fundsfund investments and U.S. Treasury bills. Level 2 financial instruments are comprised of commercial paper, and corporate debt securities. securities, and U.S. government agency bonds. Financial assets and liabilities are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies, or similar techniques, and at least one significant model assumption or input is unobservable. Level 3 financial instruments consist of the MSKCC success payments liability.Fair Value Measurements as of March 31, 2023 Total Level 1 Level 2 Level 3 Assets: U.S. Treasury bills ($18,946 included in cash and cash equivalents) $ 139,072 $ 139,072 $ — $ — U.S. government agency bonds 57,330 — 57,330 — Commercial paper ($1,811 included in cash and cash equivalents) 43,886 — 43,886 — Money market fund investments (included in cash and cash equivalents) 31,987 31,987 — — Corporate debt securities 18,715 — 18,715 — Total fair value of assets $ 290,990 $ 171,059 $ 119,931 $ — Liabilities: MSKCC success payments liability $ 1,396 $ — $ — $ 1,396 Total fair value of liabilities $ 1,396 $ — $ — $ 1,396 9 Fair Value Measurements as of December 31, 2022 Total Level 1 Level 2 Level 3 Assets: Commercial paper ($26,669 included in cash and cash equivalents) $ 96,899 $ — $ 96,899 $ — U.S. Treasury bills 91,966 91,966 — — U.S. government agency bonds ($3,976 included in cash and cash equivalents) 63,659 — 63,659 — Corporate debt securities 36,819 — 36,819 — Money market fund investments (included in cash and cash equivalents) 27,693 27,693 — — Total fair value of assets $ 317,036 $ 119,659 $ 197,377 $ — Liabilities: MSKCC success payments liability $ 1,651 $ — $ — $ 1,651 Total fair value of liabilities $ 1,651 $ — $ — $ 1,651 20222023 and December 31, 20212022 are presented in the following tables (in thousands): As of March 31, 2023 U.S. Treasury bills ($18,946 included in cash and cash equivalents) $ 139,537 $ 65 $ (530) $ 139,072 U.S. government agency bonds 57,475 53 (198) 57,330 Commercial paper ($1,811 included in cash and cash equivalents) 43,950 4 (68) 43,886 Money market investments (included in cash equivalents) 31,987 — — 31,987 Corporate debt securities 18,772 4 (61) 18,715 Total cash equivalents and marketable securities $ 291,721 $ 126 $ (857) $ 290,990 Classified as: Cash and cash equivalents $ 52,744 Marketable securities, short-term 175,794 Marketable securities, long-term 62,452 Total cash equivalents and marketable securities $ 290,990
Cost Basis
Gains
Losses
Fair Value
Cost Basis
Gains
Losses
Fair Value As of December 31, 2022 Commercial paper ($26,669 included in cash equivalents) $ 97,024 $ 6 $ (131) $ 96,899 U.S. Treasury bills 92,910 1 (945) 91,966 U.S. government agency bonds ($3,976 included in cash and cash equivalents) 63,926 25 (292) 63,659 Corporate debt securities 37,002 — (183) 36,819 Money market investments (included in cash equivalents) 27,693 — — 27,693 Total cash equivalents and marketable securities $ 318,555 $ 32 $ (1,551) $ 317,036 Classified as: Cash and cash equivalents $ 58,338 Marketable securities, short-term 189,325 Marketable securities, long-term 69,373 Total cash equivalents and marketable securities $ 317,036
Liability MSKCC Success Payments
LiabilityBalance at December 31, 2022 $ 1,651 Change in fair value (255) Balance at March 31, 2023 $ 1,396 $1.6a $0.3 million and $0.7$1.6 million change in the fair value of the MSKCC success payments liability as a gain in other income (expense) and research and development expense in our condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2023 and 2022, and 2021, respectively.10We utilize
March 31,
2022
December 31,
2021As of
December 31,
2022Fair value of common stock $ 6.28 Risk-free interest rate 3.88% Expected volatility 79% Probability of achieving multiple of Initial Share Price 3.0% to 10.6% Expected term (years) 4.6 to 6.0 Agreement(the “MSKCC Agreement”) and the estimated timing of marketing approval for this product candidate from the U.S. Food and Drug Administration (“FDA”). In addition, we incorporated the estimated number and timing of valuation measurement dates in the calculation of the MSKCC success payments liability.A small the assumptions and other inputs, such as the fair value of our common stock may have a relatively large change in the estimated valuation and associated liability and expense or income.to $5.31 per share.The Regents of the University of California and the University of ViennaWe entered into an Exclusive License Agreement, dated April 16, 2013 (as amended, the “UC/Vienna Agreement”) with The Regents of the University of California (“UC”) and the University of Vienna (“Vienna”) (together, “UC/Vienna”) wherein UC/Vienna granted us an exclusive worldwide license, with the right to sublicense, in all fieldsfoundational CRISPR-Cas9 patent family co-owned by UC, Vienna, and Dr. Emmanuelle Charpentier (the “CVC IP”). Dr. Charpentier has not granted us any rights, either directly or indirectly. The UC/Vienna Agreement continues until the last-to-expire patent or last-to-be-abandoned patent application within the CVC IP; provided, however, that UC/Vienna may terminate the UC/Vienna Agreement upon the occurrencekey terms of certain events, and we may terminate the UC/Vienna Agreement at our sole discretion upon written notice. Without patent term adjustment or patent term extension, the CVC IP will expire in 2033. The UC/Vienna Agreement includes certain diligence milestones that we must meet.significant agreements. For products and services sold by us that are covered by the CVC IP, we will owe low- to mid-single-digit percent royalties on net sales, subject to a minimum annual royalty. Priorfurther information regarding our significant agreements, please see Note 4 to the time that we are selling products, we owe UC/Vienna an annual license maintenance fee. We may owe UC/Vienna up to $3.4 million in certain regulatory and clinical milestone payments in the field of human therapeutics and diagnostics for products that are covered by the CVC IP and developed by us, an affiliate, or a sublicensee. Additionally, we pay UC/Vienna a specified percentage of sublicensing revenue, including cash and equity, we receive from sublicensing the CVC IP, subject to certain exceptions. If we include intellectual property owned or controlled by us in a sublicense to the CVC IP, we pay UC/Vienna a low double-digit percentage of sublicensing revenues received under the sublicense. If we do not include intellectual property owned or controlled by us in a sublicense to the CVC IP, we pay UC/Vienna 50% of sublicensing revenues received under the sublicense. To date, we have entered into over 25 sublicensing agreements in a variety of fields such as human therapeutics, forestry, agriculture, research reagents, transgenic animals, certain livestock targets, internal research, bioproduction, cell lines, and microbial applications that include the CVC IP as well as other Cas9 intellectual property owned or controlled by us. We are obligated to reimburse UC for its prosecution and maintenance costs of the CVC IP.For each of the three months ended March 31, 2022 and 2021, we incurred $0.3 million for payments we owe to UC related to sublicensing revenues, which we recorded in research and development expensesconsolidated financial statements included in our condensed consolidated statements of operations and comprehensive loss.11For the three months ended March 31, 2022 and 2021, we reimbursed UC $2.3 million and $3.2 million, respectively, for prosecution and maintenance costs of the CVC IP, which were recorded in general and administrative expenses in our condensed consolidated statements of operations and comprehensive loss.On December 15, 2016, we entered into a Consent to Assignments, Licensing and Common Ownership and Invention Management Agreement (“IMA”) relating to the CVC IP. Under the IMA, CRISPR Therapeutics AG (“CRISPR”) reimburses us 50% of the amounts we reimburse UC for patent prosecution and maintenance costs of the CVC IP. For the three months ended March 31, 2022 and 2021, CRISPR reimbursed us $1.1 million and $1.6 million, respectively, which we recorded as reductions of general and administrative expenses in our condensed consolidated statements of operations and comprehensive loss.Memorial Sloan Kettering Cancer Center (“MSKCC”)On November 13, 2020, we entered into an Exclusive License Agreement with MSKCC (the “MSKCC Agreement”), under which we exclusively licensed know-how, biological materials, and patent families relating to fully-human single-chain variable fragments targeting CD371 (also known as CLL-1) for use in T cells, NK cells, and genome-edited induced pluripotent stem cells (“iPSCs”) for allogeneic CD371-targeted cell therapies (currently used in our CB-012 product candidate). We paid MSKCC an upfront payment of $0.5 million in cash and $2.1 million in stock. For each licensed CD371 product, we may owe potential clinical, regulatory, and commercial milestone payments totaling $112.0 million. In addition, in the event we, our affiliates, or sublicensees, receive regulatory approval for a licensed CD371 product, we will owe low- to mid-single-digit percent royalties on net sales by us, our affiliates, and our sublicensees. Our license from MSKCC includes the right to sublicense through multiple tiers and we will owe MSKCC a percentage of upfront cash or equity received from our sublicensees. The percentage owed decreases as our licensed CD371 product candidate moves through development, starting at a low-double-digit percentage if clinical trials have not yet begun and decreasing to a mid-single-digit percentage if our licensed CD371 product candidate is in later clinical trial stages. We are also responsible for paying a percentage of licensed patent costs. The MSKCC Agreement includes certain diligence milestones that we must meet by specified dates, which may be extended upon payment of additional fees.MSKCC is entitled to certain success payments if our common stock fair value increases by certain multiples of increasing value based on a comparison of the fair market value of our common stock to $5.1914 per share, adjusted for any future stock splits (the “Initial Share Price”), during a specified time period. Under the MSKCC Agreement, as a publicly traded company, our common stock fair value is determined by any given 45-day volume weighted-average trading price. At our option, success payments to MSKCC may be made in cash or common stock. The relevant time period commences when the first patient is dosed with a licensed CD371 product candidate in the first phase 1 clinical trial and ends upon the earlier of the third anniversary from the approval of our, or our affiliate’s, or sublicensee’s, biologics license application (“BLA”) by the FDA or 10 years from the date the first patient was dosed with a licensed CD371 product candidate in the first phase 1 clinical trial. The aggregate success payments will not exceed $35.0 million. Additionally, if we undergo a change of control during the specified time period, we may owe a change of control payment, depending upon the increase in our stock price due to the change of control and also to what extent success payments have already been paid by us to MSKCC. In no event will the combination of success payments and the change of control payment owed to MSKCC exceed $35.0 million.The following table summarizes the amounts of the MSKCC success payments:We may terminate the MSKCC Agreement upon 90 calendar days’ prior written notice to MSKCC. MSKCC may terminate the MSKCC Agreement in the event of our uncured material breach, bankruptcy, or criminal activity. If MSKCC materially breaches the MSKCC Agreement in certain circumstances (e.g., granting a third party a license in our field) then, during the time of such uncured breach, MSKCC will not be entitled to receive any success payments or any change of control payment.As of March 31, 2022, the estimated fair value of the total success payments obligation to MSKCC was $2.5 million, which was included in long-term liabilities in our condensed consolidated balance sheets. For the three months ended March 31, 2022 and 2021, we recognized a $1.6 million and $0.7 million, respectively, change in fair value of the MSKCC success payments liability, which was recorded in other income (expense) in our condensed consolidated statements of operations and comprehensive loss.12Intellia Therapeutics, Inc.On July 16, 2014, we entered into a License Agreement (as amended, the “Intellia License Agreement”) with Intellia, LLC, to which Intellia Therapeutics, Inc. (“Intellia”) is a successor in interest. Under the Intellia License Agreement, we granted Intellia an exclusive worldwide license, with the right to sublicense, to certain CRISPR-Cas9 technology for a defined field of human therapeutics. Intellia granted us an exclusive worldwide license, with the right to sublicense, to certain of its CRISPR-Cas9 technology for all fields outside of the defined field of human therapeutics. Under the Intellia License Agreement, each party is responsible for 30% of the other party’s expenses for prosecution and maintenance of the licensed intellectual property. For the three months ended March 31, 2022 and March 31, 2021, we reimbursed Intellia less than $0.1 million, which was recorded as general and administrative expenses in our condensed consolidated statements of operations and comprehensive loss. During each of the three months ended March 31, 2022 and 2021, Intellia reimbursed us $0.3 million and $0.5 million, respectively (including reimbursement for a portion of the patent prosecution and maintenance costs of the CVC IP paid to UC), which were recorded as reductions of general and administrative expenses in our condensed consolidated statements of operations and comprehensive loss. The term of the Intellia License Agreement continues for the life of the licensed patents and patent applications; provided, however, either party may terminate the agreement upon the occurrence of certain events.On June 16, 2021, we entered into a leaseback agreement with Intellia (the “Leaseback Agreement”). Pursuant to the Leaseback Agreement, in exchange for Intellia’s grant to us of an exclusive license to certain intellectual property relating to CRISPR-Cas9, including Cas9 chRDNAs, for use solely in the manufacture of our CB-010 product candidate, we paid Intellia an upfront cash payment of $1.0 million and will pay up to $23.0 million in potential future regulatory and sales milestones. Additionally, we will owe Intellia low- to mid-single-digit percent royalties on net sales of our CB-010 product candidate by us, our affiliates, and sublicensees until the expiration, abandonment, or invalidation of the last patent within the intellectual property relating to CRISPR-Cas9, including that relating to Cas9 chRDNAs (i.e., 2036, without patent term adjustment or patent term extension).Pioneer Hi-Bred International, Inc. (now Corteva Agriscience)On July 13, 2015, we and Pioneer Hi-Bred International, Inc. (“Pioneer”) (now Corteva Agriscience), then a DuPont company (“DuPont”), entered into an Amended and Restated Collaboration and License Agreement, as amended (the “Pioneer Agreement”). Under the terms of the Pioneer Agreement, we and Pioneer cross-licensed CRISPR intellectual property portfolios. Pioneer granted us an exclusive worldwide license, with the right to sublicense, to its CRISPR intellectual property in the field of research tools, as well as a non-exclusive worldwide license to such intellectual property in human and animal therapeutics, industrial biotechnology, certain agriculture segments, and other fields; and we granted Pioneer an exclusive worldwide license, with the right to sublicense, to our CRISPR intellectual property, including the CVC IP, in a defined field of agriculture relating to specified row crops, as well as a non-exclusive worldwide license to the intellectual property in other agricultural applications, industrial biotechnology, nutrition and health, and other fields. The Pioneer Agreement continues until the expiration, abandonment, or invalidation of the last patent or patent application within the licensed intellectual property; provided, however, that the parties may terminate the Pioneer Agreement by mutual consent or either party may unilaterally terminate the Pioneer Agreement in the event of an uncured breach of a payment obligation, bankruptcy, or failure to maintain or own licensed intellectual property by the other party if the non-breaching party is materially adversely affected by the failure. We are obligated to pay low-single-digit percent royalties to Pioneer for the sales of our products in the research tools field as well as certain sublicensing revenues in that field. We are eligible to receive milestone payments from Pioneer if certain regulatory and commercial milestones are met related to specified row crops, for a total of up to $22.4 million, as well as to receive low-single-digit percent royalties for sales of defined agricultural products and certain sublicensing revenues in that field. In March 2021, we received a milestone payment of $0.3 million from Pioneer. Initially, Pioneer owned the patents and patent applications developed under the collaboration, including the chRDNA patent family, and granted us an exclusive license to these patents and patent applications in the fields of research tools and therapeutics.In December 2020, we and Pioneer entered into an amendment to the Pioneer Agreement under which Pioneer assigned to us the chRDNA patent family developed under the research collaboration, and we paid Pioneer an upfront payment of $0.5 million. We considered the payment to Pioneer in accordance with revenue recognition guidance and accounted for it as a reduction of the licensing and collaboration revenue in our condensed consolidated statements of operations and comprehensive loss. In addition to the upfront payment, we are now obligated to pay all patent prosecution and maintenance costs for the chRDNA patent family; up to $2.8 million in regulatory milestone payments for therapeutic products developed by us, our affiliates, or licensees that are covered by the chRDNA patent family; up to $20.0 million in sales milestones over a total of four therapeutics products sold by us, our affiliates, or licensees that are covered by the chRDNA patent family; and a low-single-digit percentage of licensing revenue we receive for licensing the chRDNA patent family after December 2020.13NaN licensing fee payments were incurred to Pioneer during the three months ended March 31, 2022. During the three months ended March 31, 2021, we incurred $0.8 million for payments we owed to Pioneer related to licensing revenues, which were recorded as a research and development expense in our condensed consolidated statements of operations and comprehensive loss.AbbVie Manufacturing Management Unlimited Company(the(as amended the “AbbVie Agreement”) with AbbVie Manufacturing Management Unlimited Company (“AbbVie”). Pursuant to the AbbVie Agreement, AbbVie selects one target or, for a dual CAR-T cell product, two targets (each selection, a “Program Slot”) to develop collaboration CAR-T cell products (and corresponding licensed products). For each of AbbVie’s two Program Slots (or up to four Program Slots, if AbbVie elects to expand the number as set forth below), we are collaborating to develop one or more collaboration allogeneic CAR-T cell products directed toward the single cancer target or target combination chosen by AbbVie as described in an applicable research plan, utilizing our Cas12a chRDNA genome-editing and cell therapy technologies. We granted AbbVie an exclusive (even as to us), royalty-bearing, worldwide license, with the right to grant sublicenses, under our Cas12a chRDNA and cell therapy intellectual property, as well as certain genome-editing technology that we may gain rights to in the future and intellectual property that may be developed under the collaboration, solely for AbbVie to develop, commercialize, manufacture, and otherwise exploit the collaboration CAR-T cell products in the field of human diagnostics, prophylactics, and therapeutics. Under the terms of the AbbVie Agreement, we conduct certain preclinical research, development, and manufacturing activities under the collaboration, including certain activities for the manufacture and supply of licensed product for AbbVie’s phase 1 clinical trials. AbbVie reimburses us for all such activities, including reimbursement for time spent by employees at a designated FTE rate. The duration of the collaboration is not fixed. Under the terms of the AbbVie Agreement, AbbVie has selected its initial Program Slot and has reserved six additional targets, which AbbVie may choose to be used or substituted into the two Program Slots or used for the third or fourth Program Slots if AbbVie expands the number of Program Slots during the collaboration.During the collaboration, AbbVie may expand from two Program Slots to a total of four Program Slots by paying us an additional $15.0 million for each Program Slot, provided that AbbVie must make such payment within the earlier of (a) 60 calendar days following completion of the phase 1 clinical trials for the initial collaboration CAR-T cell product and (b) December 31, 2025. Under the terms of the AbbVie Agreement, we are eligible to receive up to $150.0 million in future developmental and regulatory milestone payments for each Program Slot and up to $200.0 million in sales-based milestones for each Program Slot. We are also eligible to receive global royalties on net sales of licensed products sold by AbbVie, its affiliates, and sublicensees in the high-single-digit to low-teens percent range, subject, in certain instances, to various reductions.The term of the AbbVie Agreement continues in force and effect until the date of expiration of the last royalty term of the last country in which a licensed product is exploited. On a licensed product-by-licensed product and country-by-country basis, the royalty term is the period of time beginning on the first commercial sale of a licensed product in a country and ending on the latest of the following three dates: (a) the expiration, invalidation, revocation, cancellation, or abandonment date of the last patent that includes a valid claim to either (i) the collaboration CAR-T cell product in the licensed product or (ii) the method of making the collaboration CAR-T cell product in the licensed product in such country (in the case of (ii), only for so long as no biosimilar product is commercially available in such country); (b) 10 years from the date of the first commercial sale of such licensed product in such country; and (c) the expiration date of regulatory exclusivity for such licensed product in such country. The AbbVie Agreement may be terminated during the term by either party for an uncured material breach or bankruptcy by the other party. Additionally, AbbVie may terminate the AbbVie Agreement, in its entirety or on a licensed product-by-licensed product basis, effective immediately upon written notice to us, if AbbVie in good faith believes that it is not advisable for AbbVie to continue to exploit the collaboration CAR-T cell products or licensed products as a result of a perceived serious safety issue. AbbVie may also terminate the AbbVie Agreement in its entirety at its sole discretion upon 90 days’ prior written notice to us.The transaction price we received under the AbbVie Agreement associated with the first two Program Slots consisted of a $30.0 million upfront cash payment and the estimated variable consideration related to our performance of preclinical, development, and manufacturing activities under the collaboration and the developmental and regulatory milestone payments. We constrain the estimated variable consideration if we assess that it is probable that a significant reversal in the amount of cumulative revenue recognized may occur in future periods. We constrained all developmental and regulatory milestone payments as of March 31, 2022. The transaction price is reevaluated at the end of each reporting period and as changes in circumstances occur. We determined that the licenses we granted to AbbVie and our participation in the joint governance committee are not capable of being distinct from the preclinical research, development, and manufacturing activities and therefore are combined into one performance obligation. We recognize revenue based on the measure of progress using an estimated cost-based input method each reporting period.14$30.0$30.0 million from AbbVie during the year ended December 31, 2021. We recognized short-term deferred revenue in the amount of $12.5$10.4 million and long-term deferred revenue in the amount of $14.5$11.3 million related to this upfront cash payment in our condensed consolidated balance sheets as of March 31, 2022.2023. We recognized short-term deferred revenue in the amount of $8.3$9.4 million and long-term deferred revenue in the amount of $19.1$13.3 million related to these paymentsthis upfront cash payment in our consolidated balance sheets as of December 31, 2021.$0.9$1.6 million and $0.9 million in revenue for the three months ended March 31, 2023 and 2022, respectively, relating to the AbbVie Agreement. As of March 31, 2022, and December 31, 2021,2023, we also recorded $0.2 and $1.0$0.9 million in accounts receivable respectively, and $0.4as of December 31, 2022, we had recorded no amounts in accounts receivable in our condensed consolidated balance sheets. As of March 31, 2023 and $0.2December 31, 2022 we had $0.6 million and $0.9 million, respectively, in contract assets in our condensed consolidated balance sheets.20222023 and 20212022 (in thousands): Three Months Ended March 31, 2023 2022 United States $ 3,385 $ 2,612 Rest of world 117 52 Total $ 3,502 $ 2,664 2022,2023, we recognized $1.7$1.9 million of revenue related to performance obligations satisfied at a point in time, and we recognized $0.9$1.6 million of revenue related to performance obligations satisfied over time.2021,2022, we recognized $1.6$1.7 million of revenue related to performance obligations satisfied at a point in time, and 0we recognized $0.9 million of revenue related to performance obligations satisfied over time.royalties, milestone payments, and research costs related to the AbbVie Agreement, as well as royalties and milestone payments from our other license agreements that are unbilled as of the end of a reporting period.1520222023 (in thousands):
December 31,
2021
March 31,
2022Balance as of
December 31,
2022Additions Balance as of
March 31,
2023Accounts receivable $ 202 $ 3,003 $ (1,672) $ 1,533 Contract assets: Unbilled accounts receivable $ 2,247 $ 1,618 $ (2,226) $ 1,639 Contract liabilities: Deferred revenue, current and long-term $ 25,891 $ 1,246 $ (2,343) $ 24,794 did not change significantlydecreased $0.6 million during the three months ended March 31, 2022.2022,2023, primarily due to offsettinga higher amount of $0.5 million in deferred revenue recognized in connection withcompared to the AbbVie Agreement (Note 4).20222023 and 2021,2022, we recognized $0.6$1.1 million and $0.1$0.6 million of revenue, respectively, which were included in the opening contract liabilities balances asat the beginning of December 31, 2021 and 2020, respectively. unsatisfied performance obligations represent in aggregate the amount of a transaction price that has been allocated to performance obligations not delivered as of the end of a reporting period. The value of transaction prices allocated to remaining unsatisfied performance obligations as of March 31, 20222023 was approximately $46.4$38.3 million. We expect to recognize approximately $12.8$10.9 million of remaining performance obligations as revenue in the next 12 months and to recognize the remainder thereafter.as of March 31, 2022 and December 31, 2021, respectively (in thousands):
2022
2021 March 31,
2023December 31,
2022Patent cost reimbursements $ 1,338 $ 1,638 Accrued interest on marketable securities 332 570 Other — 7 Total $ 1,670 $ 2,215 as of March 31, 2022 and December 31, 2021, respectively (in thousands):
2022
202116 March 31,
2023December 31,
2022Prepaid contract manufacturing and clinical costs $ 3,538 $ 4,803 Prepaid insurance 907 1,568 Prepaid income taxes 431 431 Other 1,234 1,119 Total $ 6,110 $ 7,921 as of March 31, 2022 and December 31, 2021, respectively (in thousands):
2022
2021 March 31,
2023December 31,
2022Lab equipment $ 13,553 $ 12,588 Leasehold improvements 1,933 1,876 Computer equipment 754 709 Furniture and equipment 161 161 Construction in progress 2,454 993 Total property and equipment, gross 18,855 16,327 Less: accumulated depreciation and amortization (6,209) (5,649) Property and equipment, net $ 12,646 $ 10,678 $0.3$0.6 million and $0.2$0.3 million, respectively, for each of the three months ended March 31, 20222023 and 2021.as of March 31, 2022 and December 31, 2021, respectively (in thousands):
2022
2021 March 31,
2023December 31,
2022Accrued employee compensation and related expenses $ 3,220 $ 5,752 Accrued research and development expenses 6,183 6,731 Accrued patent expenses 828 1,331 Accrued expenses related to sublicensing revenues 656 596 Other 1,657 1,669 Total $ 12,544 $ 16,079 $7.5$7.5 million, which was the price paid for similar shares by another investor, and which was an arm’s length transaction. This represents a material voting interest in the private company and entitles us to hold one of the four private company’s board of director seats and to jointly vote with another stockholder on a second board of director seat. As of March 31, 2022,2023, we have appointed one of the four directors.directors of the private company. We concluded that the private company is a variable interest entity and that we are not its primary beneficiary based on our representation on its board of directors. As the private company’s convertible preferred stock is not in substance common stock, we record this investment using the measurement alternative in accordance with ASC 321, Investments–Equity Securities. Under the measurement alternative, our investment in the private company’s convertible preferred stock was initially recorded at its estimated fair value, but the carrying value may be adjusted through earnings upon an impairment or when there is an observable price change involving the same or a similar investment with the private company. As of each of March 31, 20222023 and December 31, 2021,2022, the carrying value of the investment was $7.5$7.5 million. There have been no changes to the carrying value of the investment during the three months ended March 31, 2022.2023. We did not recognize any revenue in connection with the Private Company License Agreement for the three months ended March 31, 20222023 and 2021.Pioneer2022 and December 31, 2021, DuPont held a greater than 5% of our voting interest and Pioneer, then a DuPont company, is considered a related party (Note 4).17Scientific Advisory Board PaymentsDr. Jennifer A. Doudna, a co-founder and stockholder of the Company, receives compensation for participating on our scientific advisory board (the “SAB”). During each of the three months ended March 31, 2022 and 2021,2023 we paid Dr. Doudna less than $0.1 million for her participation on our SAB.Loan to our President and Chief Executive OfficerIn November 2018, our president and chief executive officer entered into a promissory note with us for $1.1 million, as a means to provide liquidity without triggering a taxable event. The note bore interest at a rate of 3.04%, compounded annually, and was payable in five years, together with principal and accrued interest. The promissory note was secured by 409,795 shares of our common stock owned by our president and chief executive officer and was determined to be non-recourse for accounting purposes. As such, the issuance of the promissory note was effectively the grant of a new share option. The promissory note was repaid in full amount in June 2021 by our president and chief executive officer and recognized as an increase in additional paid in capital of $1.2 million.8. Paycheck Protection Program LoanOn May 6, 2020, we entered into a promissory note with WebBank (the “Lender”) pursuant to the Paycheck Protection Program for a total amount of $1.6 million (the “PPP Loan”). Our PPP Loan had a two-year term and bore interest at a stated rate of 1.0% per annum, accrued monthly, beginning on the date our PPP Loan was issued by the Lender. No monthly principal and interest payments were required under our PPP Loan. We did not provide any collateral or guaranteesoperating leases for our PPP Loan, nor did we pay any facility charge to obtain our PPP Loan. Our PPP Loan provided for customary events of default, including those relating to failure to make payment, bankruptcy, breaches of representations, and material adverse effects. We could have prepaid the principal of our PPP Loan at any time without incurring any prepayment charges. On May 22, 2021, our PPP Loan was forgiven in full by the SBA and, at that time, we recognized a PPP Loan extinguishment gain of $1.6 million in our condensed consolidated statements of operations and comprehensive loss.9. Commitments and ContingenciesFacility Lease AgreementsWe lease laboratory and office space under non-cancellable operating agreements. In March 2021, we entered into a ten-year lease agreement, which superseded and replaced our prior lease, as amended, for our corporate headquarters and the new lease included additional office and laboratory space located within the same building in Berkeley, California. ThisCalifornia, consisting of approximately 75,000 square feet, with remaining lease agreement containsterms up to 9.3 years. Certain of our laboratory and office space lease agreements include options to extend the terms for a renewal optionperiod of five years and contain provisions for an additional term of five years. future rent increases. In addition to base rent, we pay our share of operating expenses and taxes.In January 2022, we entered into a ten-and-a-half-year lease agreement for approximately 10,000 square feet of office and laboratory space in Berkeley, California near our current corporate headquarters. In connection with signing this lease, we paid a deposit in the amount of $0.4 million to the lessor. This lease agreement contains an escalation clause for increased base rent over the term and a renewal option for an additional term of five years. In addition to base rent, we pay our share of operating expenses and taxes. To complete certain leasehold improvements, the lessor has agreed to provide us a tenant improvement allowance of $1.8 million. The leasehold improvements constructed are presented under property and equipment on our condensed consolidated balance sheets and are depreciated on a straight-line basis over the remaining lease term.arewere as follows (in thousands):
March 31, 2022*Three Months Ended March 31, 2023 2022 $ 1,884 $ 1,799 Short-term lease cost 63 63 Total lease cost $ 1,947 $ 1,862 $0.5$0.6 million and $0.5 million of variable lease cost related to operating expenses and taxes.taxes for the three months ended March 31, 2023 and 2022, respectively.18iswas as follows (in thousands):As of March 31, 2022, theThree Months Ended March 31, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,093 $ 871 was 9.0 years for our corporate office and laboratory leases, and the weighted-average discount rate was for our laboratory and office leases were as follows:March 31,
2023December 31,
2022Weighted-average remaining lease term (years) 8.1 8.3 Weighted-average discount rate 11.3 % 11.3 % 20222023 (in thousands):*$ 2,241 3,883 2025 4,474 2026 5,720 2027 5,922 Thereafter 22,115 Total undiscounted lease payments 44,355 Less: imputed interest (16,932) Total discounted lease payments 27,423 Less: current portion of lease liability (1,022) Noncurrent portion of lease liability $ 26,401 $1.6$1.1 million related to incentives expected to be received in 2022.**2023.$0.2$0.6 million related to incentives expected to be received in 2023.2024.Capital LeaseWe accounted for certain leased equipment as a capital lease due to the ownership of such equipment transferring to us at the end of the lease term. As of December 31, 2021, the capital lease obligation was repaid in fullwe do 0t have any remaining future minimum lease payments related to this capital lease.20222023 and December 31, 2021,2022, we did not have any material indemnification claims that were probable or reasonably possible, and consequently, we have not recorded related liabilities.legal proceedingslitigation arising in the ordinary course of business. We record a liability for such matterslitigation when it is probable that future losses will be incurred and if such losses can be reasonably estimated. Significant judgment by us is required to determine both probability and the estimated amount. We are not currently subject to any material legal proceedings, and we are not aware of any unasserted claims pending that could, individually oraggregate, haveU.S. District Court for the Northern District of California against our company and certain of our officers and current and former members of our board of directors, Greenhalgh v. Caribou Biosciences, Inc., et al., Case Number 3:23-cv-00609-VC (the “Greenhalgh Case”). The Greenhalgh Case was voluntarily dismissed on March 16, 2023.material adverseputative class action lawsuit was filed in the U.S. District Court for the Northern District of California against our company and certain of our officers and current and former members of our board of directors, Bergman v. Caribou Biosciences, Inc., et al., Case Number 4:23-cv-01742-YGR (the “Bergman Case”). The Bergman complaint challenges disclosures regarding our company’s business, operations, and prospects, specifically with respect to the alleged durability of CB-010’s therapeutic effect and the product candidate’s clinical and commercial prospects, in alleged violation of Sections 11 and 15 of the Securities Act of 1933, as amended (the “Securities Act”) and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended. The allegations and claims asserted in the Bergman Case are the same allegations and claims asserted in the Greenhalgh Case. Plaintiff in the Bergman Case has filed a motion to consolidate the Bergman Case with the Greenhalgh case, and that motion is pending.resultscompany and certain of our officers and current and former members of our board of directors, Lowry v. Caribou Biosciences, Inc., et al., Case Number T23-1084 (the “Lowry Case”). The Lowry Case challenges disclosures regarding our company’s business, operations, or financial condition.and prospects, specifically with respect to the alleged durability of CB-010’s therapeutic effect and the product candidate’s clinical and commercial prospects, in alleged violation of Sections 11 and 15 of the Securities Act. The allegations and claims in the Lowry Case are substantially similar to the Securities Act claims asserted in the Bergman and Greenhalgh Cases. On April 26, 2023, we filed a motion to stay the Lowry Case during the pendency of the parallel federal court litigation in the Bergman Case and the Greenhalgh Case. We believe all of these lawsuits are without merit.19on an as converted basis, consistsconsisted of the following:As of
March 31, 2023As of
December 31, 2022Stock options, issued and outstanding 9,102,960 6,733,074 Stock options, authorized for future issuance 6,495,096 5,833,979 Stock available under our employee stock purchase plan 1,584,538 1,044,518 Unvested restricted stock units and performance-based restricted stock units 236,169 256,146 17,418,763 13,867,717
March 31, 2022
December 31, 2021Plan“Plan”) that became effective on July 22, 2021. We reserved 5,200,000 shares of common stock for issuance under the 2021 Plan. In addition, 934,562 shares available for issuance under the 2013 Equity Incentive Plan, adopted in 2013 and amended and restated in 2019, were transferred into the 2021 Plan. Furthermore, any shares subject to awards under the 2013 Plan that terminate, expire, or lapse for any reason without the delivery of shares, or are reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price, will be added to the 2021 Plan. The 2021 Plan also provides that the number of shares initially reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2022 and ending on January 1, 2031, by an amount equal to the lesser of (a) 5% of the shares of common stock outstanding on the last day of the immediately preceding fiscal year and (b) such smaller number of shares of stock as determined by our Board. No more than 56,000,000 shares of stock may be issued upon the exercise of incentive stock options under the 2021 Plan. Options under the 2021 Plan may be granted for periods of up to 10 years at exercise prices no less than the fair market value of our common stock on the date of grant; provided, however, that the exercise price of an incentive stock option granted to a 10% stockholder may not be less than 110% of the fair market value of the shares on the date of grant and such option may not be exercisable after the expiration of five years from the date of grant. The grant date fair market value of all awards made under the 2021 Plan and all cash compensation paid by us to any non-employee director for services as a director in any fiscal year may not exceed $750,000, increased to $1,000,000 in the fiscal year of their initial service as a non-employee director. As of March 31, 2022,2023, we had 6,783,6906,495,096 shares available for issuance under the 2021 Plan.2022:
to Grant
Average
Exercise Price
Average
Remaining
Contractual
Term (years)
Intrinsic Value (in thousands)*Stock Options Weighted-
Average
Exercise PriceWeighted-
Average
Remaining
Contractual
Term (years)Aggregate
Intrinsic Value (in thousands)*Outstanding at December 31, 2022 6,733,074 $ 9.01 8.2 $ 8,203 Options granted 2,536,340 6.06 Options exercised (40,433) 2.84 Options cancelled or forfeited (126,021) 10.12 Outstanding at March 31, 2023 9,102,960 $ 8.20 8.5 $ 4,824 Exercisable at March 31, 2023 3,019,066 $ 7.30 7.2 $ 3,551 Vested and expected to vest at March 31, 2023 9,102,960 $ 8.20 8.5 $ 4,824 2020222023 and 2021,2022, we granted 339,0302,536,340 and 1,561,079339,030 stock options to employees and non-employees with a weighted-averageweighted average grant date fair value of $6.68$4.13 and $2.73 per share,$6.68, respectively.assumptions for the three months ended March 31, 2022 and 2021:assumptions:Three Months Ended March 31, 2023 2022 Volatility 74.9% to 75.0% 71.7% to 72.0% Expected term (in years) 5.0 to 6.0 5.5 to 6.0 Risk-free interest rate 3.5% to 4.1% 1.7% to 2.3% Expected dividend yield 0.0% 0.0% 2022,2023, there was $32.0$34.2 million of unrecognized stock-based compensation expense related to employee and non-employee stock options that is expected to be recognized over a weighted-average period of 3.02.9 years.(“RSUs”)2022,2023, we granted 60,000did not grant any restricted stock units (“RSUs”) or performance-based RSUs (“PSUs”)under the 2021 Plan. A summary of the status of and change in unvested RSUs and PSUs as of March 31, 20222023 was as follows:Number of Shares Underlying Outstanding RSUs and PSUs Weighted-Average Grant Date Fair Value per RSU and PSU Unvested, January 1, 2023 256,146 $ 10.07 Vested (15,000) 10.64 Forfeited (4,977) 9.90 Unvested, March 31, 2023 236,169 $ 10.04 2022,2023, the achievement of this milestone was not considered probable and, therefore, no stock-based compensation was recorded.$0.6$0.9 million, which is expected to be recognized over the remaining weighted-average vesting period of 3.81.7 years.The ESPP is intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended (“Tax Code”). We reserved 511,000 shares of our common stock for employee purchases under the ESPP. The number of shares of common stock reserved for issuance under the ESPP will be automatically increased each January 1, beginning on January 1, 2022 and ending on January 1, 2031 by an amount equal to the lesser of (a) 1% of the shares of common stock outstanding on the last day of the immediately preceding fiscal year and (b) such smaller number of shares of stock as determined by our Board; provided that the maximum number of shares that may be issued under the ESPP is 10,000,000 shares. The ESPP allows an eligible employee to purchase shares of our common stock at a discount through payroll deductions of up to 15% of the employee’s eligible compensation. At the end of each purchase period, employees are able to purchase shares at 85% of the lower of the fair market value of our common stock at the beginning of the offering period or at the end of each applicable offering period. The first offering period commenced on August 16, 2021 and ended on February 15, 2022. We have issued 36,596139,384 shares of common stock under the ESPP as of March 31, 2022. 2023. We recorded $0.1$0.1 million in accrued liabilities related to contributions withheld as of March 31, 2022.21for the three months ended March 31, 2022 and 2021 as follows (in thousands):Three Months Ended March 31, 2023 2022 Research and development $ 1,310 $ 1,100 General and administrative 1,821 1,924 Total $ 3,131 $ 3,024 Three Months Ended March 31, 2023 2022 Stock options $ 2,798 $ 2,930 ESPP 142 63 RSUs 191 31 Total $ 3,131 $ 3,024 $2.9$3.1 million and $0.3$2.9 million for the three months ended March 31, 2023 and 2022, and 2021, respectively. Stock-basedThere was no stock-based compensation expense related to non-employees was $0.1 millionfor the three months ended March 31, 2023, and less than $0.1$0.1 million for the three months ended March 31, 2022 and 2021, respectively.2022.4%4% match for employee contributions up to a certain limit. During the three months ended March 31, 20222023 and 2021,2022, we contributed $0.2$0.3 million and $0.1$0.2 million, respectively, to our 401(k) plan.NaNthree monthsthree-month periods ended March 31, 20222023 and 20212022 due to our operating losses.
March 31,22Three Months Ended
March 31,2023 2022 Numerator: Net loss $ (28,044) $ (19,088) Denominator: Weighted-average common shares outstanding used to compute net loss per share, basic and diluted 61,186,514 60,546,170 Net loss per share, basic and diluted $ (0.46) $ (0.32) of March 31, 2022 and 2021, as follows:
March 31,
2022
March 31,
2021As of
March 31,
2023As of
March 31,
2022Stock options outstanding 9,102,960 6,286,542 RSUs and PSUs issued and outstanding 236,169 60,000 Shares committed under ESPP 149,350 51,687 9,488,479 6,398,229 10-Q (“Form 10-Q”).10-Q.20212022 included in our Annual Report on Form 10-K (“Form 10-K”) filed with the U.S. Securities and Exchange Commission (the “SEC”(“SEC”) on March 21, 2022.initialclinical data from such programs; future regulatory filings; our results of operations and financial position; plans and objectives of management for future operations; and the like, are forward-looking statements .statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words.CRISPRClustered Regularly Interspaced Short Palindromic Repeats (“CRISPR”) genome-editing biopharmaceutical biopharmaceutical company dedicated to developing innovative, transformative therapies for patients with devastating diseases. Our genome-editing platform, including our novel chRDNA (CRISPR hybrid RNA-DNA, or “chRDNA,” pronounced “chardonnay”) technologies, enables superior editing precision to develop cell therapies that are armored to improve antitumor activity. We are advancing a pipeline of allogeneic, or off-the-shelf, CAR-Tcell therapies from our chimeric antigen receptor (“CAR”) T (“CAR-T”) cell and CAR-NKCAR-natural killer (“CAR-NK”) cell platforms as readily available therapeutic treatments for patients.patients with hematologic malignancies and solid tumors. Our renowned founders,therapies are directed at established tumor cell surface targets for which autologous CAR-T cell therapeutics have already demonstrated clinical proof of concept, including CD19 and B cell maturation antigen (“BCMA”), as well as targets such as C-type lectin-like molecule-1 (“CLL-1,” also known as CD371). We use our chRDNA technologies to armor our cell therapies by using multiple genome-editing strategies, such as checkpoint disruption, immune cloaking, or a Nobel Prize laureate, are pioneers in the fieldcombination of CRISPR genome editing. Our chRDNA technology has demonstrated superior specificity and high efficiency in preclinical studies and enables usthese two strategies to perform multiple, precise genomic edits, while maintaining genomic integrity.enhance their antitumor activity.is, to our knowledge, is the first clinical-stage allogeneic anti-CD19 CAR-T cell therapy with programmed cell death protein 1 (“PD-1”) removed from the CAR-T cell surface by a genome-edited knockout of the PDCD1 gene. We have demonstrated in preclinical models that the PD-1 knockout improvesimproved the persistencedurability of antitumor activity by disrupting a pathway that leads to rapid T cell exhaustion. CB-010 is being evaluated in our ongoing ANTLER phase 1 clinical trial in patients with relapsed or refractory B cell non-Hodgkin lymphoma.lymphoma (“r/r B-NHL”). We have announced thatcompleted the European Hematology Associationdose escalation portion of the ANTLER trial and advanced into the dose expansion portion, enrolling second-line large B cell lymphoma (“EHA”LBCL”) patients to determine the recommended phase 2 dose. CB-010 has accepted an abstract with initial clinicalreceived Regenerative Medicine Advanced Therapy (“RMAT”) designation for r/r LBCL and fast track designation for r/r B-NHL from the U.S. Food and Drug Administration (“FDA”). We plan to provide a safety and efficacy update in the second half of 2023 from the ongoing ANTLER trial, including data from our ANTLER phase 1 trial for the EHA 2022 Hybrid Congress, to be held in Vienna, Austria, in June 2022.at least 15 patients from dose escalation with a minimum of six months of follow up.CB-011second product candidate, CB-011, is an allogeneic CAR-T cell product candidatetherapy that is, totargets BCMA. To our knowledge, it is the first anti-BCMA CAR-T cell therapy incorporating an immune cloaking approach that includes both the removal of the endogenous beta-2 microglobulin (“B2M”) protein by a genome-edited knockout of the B2M gene and insertion of a beta-2-microglobulin–B2M–human-leukocyte-antigen-E–peptide transgene (“B2M–HLA-E”), enabling expression of HLA-E on the CAR-T cell surface. This strategy is designed to bluntreduce CAR-T cell rejection by both patient T cells and natural killer (“NK”) cells to potentially enable more durable antitumor activity. CB-011 is being evaluated in preclinical development forour ongoing CaMMouflage phase 1 clinical trial in patients with relapsed or refractory multiple myeloma.myeloma (“r/r MM”). CB-011 has received fast track designation for r/r MM from the FDA. We expectplan to submit an investigational new drug (“IND”) application for CB-011 inprovide updates on dose escalation as the second half of 2022.CaMMouflage Phase 1 trial advances.24ouran allogeneic armored CAR-T cell product candidatetherapy targeting CD371 (also known as CLL-1),CLL-1, currently in preclinical development for the treatment of relapsed or refractory acute myeloid leukemia (“r/r AML”). CB-012 is, to our knowledge, the first allogeneic CAR-T cell therapy with both checkpoint disruption and immune cloaking strategies. We expect to submit an IND application for CB-012 in 2023. CD371believe that CLL-1 is an attractive target for AMLacute myeloid leukemia (“AML”) due to its expression on myeloid cancer cells, its enrichment in leukemic stem cells, and its absence on hematopoietic stem cells. also developing allogeneic CAR-NK cell therapies derived from genome-edited iPSCsinduced pluripotent stem cells (“iPSCs”) for the treatment of solid tumors. CB-020 is our first CAR-NK product candidate from our CAR-NK platform and itwe have selected receptor tyrosine kinase like orphan receptor 1 (“ROR1”) as the tumor cell-surface target for CB-020. CB-020 and potential future CAR-NK cell therapy product candidates will contain genome edits designed to overcome some of the challenges of targeting solid tumors, such as trafficking, tumor infiltration, heterogeneity, and the immunosuppressive tumor microenvironment. We expect to select a tumor cell-surface target for our CB-020 product candidate in 2022. Also in 2022, we expect to disclose armoring strategies we are developing for our CAR-NK platform.developingexpanding our genome-editing platform technologies, developing our product candidates and building our pipeline, creating and maintaining our intellectual property portfolio, and establishing arrangements with third parties for the manufacture, testing, and testingclinical trial evaluations of our product candidates. We do not have any products approved for commercial sale and have not generated any revenue from product sales. We have incurred net losses since commencement of our operations.agreements, license and collaboration agreements, and a service agreement;agreements; the sale of shares of Intellia Therapeutics, Inc. (“Intellia”) common stock that we received as consideration for the Intellia License Agreement;stock; the sale of our convertible preferred stock in private placements before our initial public offering (“IPO”); in 2021; and proceeds from our IPO. In total, we received an aggregate of approximately $321.0 million in net proceeds from our IPO, after deducting underwriting discounts and commissions and offering expenses. In connection with the closing of our IPO, all outstanding shares of our convertible preferred stock automatically converted into 26,234,654 shares of our common stock.and 2021 were $19.1$28.0 million and $13.2$19.1 million, respectively. We had an accumulated deficit of $116.9$225.3 million as of March 31, 2022.2023. Our net losses and operating losses may fluctuate from quarter to quarter and year to year depending primarily on the timing of expenses associated with our clinical trials and nonclinical studies and our other research and development expenses. In addition, we are incurring increased costs associated with operating as a public company, including legal, audit, and accounting fees; maintaining compliance with the rules and regulations of the SEC and Nasdaq; director and officer insurance premiums; investor and public relations activities; and other accompanying compliance and governance requirements. We anticipate that our expenses will increase substantially if and as we:CB-011, CB-012, and CB-020, and any other product candidates we identify and choose to develop;25CMOscontract manufacturing organizations (“CMOs”) to individually manufacture, under cGMP,current good manufacturing processes, chRDNA guides, CasCas9 and Cas12a proteins, plasmids, and AAV6adeno-associated virus serotype 6 vectors used in the manufacture of our CAR-T cells as well as our CAR-NK cell therapy product candidates. We expect to rely on our CMOs for the manufacturing of our product candidates to expedite readiness for future clinical trials, and most of these CMOs have capabilities for commercial manufacturing.Additionally, we may decide to build our own manufacturing facility in the future to provide us greater flexibility and control over our clinical or commercial manufacturing needs.public or private equity orofferings (including our at-the-market facility), debt financings, collaborations and strategic alliances, and licensing arrangements, with third parties.or other sources. There are no assurances that we will be successful in obtaining an adequate level of financing to support our business plans whenas needed on acceptable terms, or at all. If we raise additional funds through collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our intellectual property, future revenue streams, research programs, or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise capital as and when needed or on attractive terms, we may have to significantly delay, reduce, or discontinue the development and commercialization of our product candidates or scale back or terminate our pursuit of new in-licenses and acquisitions.Impact of the COVID-19 Pandemic and Geopolitical EventsWe are unable to predict the effect that the COVID-19 pandemic or geopolitical events, including the conflict in Ukraine, may have on our operations. To the extent the COVID-19 pandemic or geopolitical events adversely affect our business prospects, financial condition, and results of operation, they may also have the effect of exacerbating many of the other risks described or referenced in the section of our Form 10-K titled “Risk Factors,” such as those relating to the supply of materials for our product candidates, and the timing and possible disruptions of our ongoing and future preclinical studies and clinical trials, and our access to the financial markets.$2.7$3.5 million and $1.6$2.7 million for the three months ended March 31, 20222023 and 2021,2022, respectively. See Notes 4 and 5 to our condensed consolidated financial statements included elsewhere in this Form 10-Q.26development ofand our platform technologies, and our in-licensing and assignment agreements.uses;uses, sublicensing revenue, and milestones under our licensing agreements;CROscontract research organizations (“CROs”), CMOs, and clinical sites; andcosts of supplying the components for, and the manufacturing of, our product candidates for use in our preclinical studies and clinical trials; and•and facilities maintenance, and depreciation.Historically, we have not tracked external costs by clinical program. We intend to separately track certain external costs for each clinical program. However,on a program-by-program basis; however, we do not currently track, and do not intend to track costs that are deployed across multiple programs.candidatecandidates through clinical trials and later stages of development; conduct preclinical studies and clinical trials for our other product candidates; seek regulatory approvals for any product candidates that successfully complete clinical trials; expand our research and development efforts and incur expenses associated with hiring additional personnel to support our research and development efforts; and seek to identify, in-license, acquire, and/or develop additional product candidates.27three months ended March 31, 2022 and 2021:periods indicated:Three Months Ended March 31, 2023 2022 (in thousands) External costs: Expenses related to licensing, sublicensing revenue, and milestones $ 430 $ 308 Services provided by CROs, CMOs, clinical sites, and other third parties that conduct preclinical studies and clinical trials on our behalf 10,279 3,972 Other research and development expenses 4,719 2,336 Total external costs 15,428 6,616 Internal costs: Personnel-related expenses 7,936 5,597 Facilities and other allocated expenses 2,345 1,711 Total internal costs 10,281 7,308 Total research and development expenses $ 25,709 $ 13,924 20222023 and 2021,2022, we recorded $1.5$0.4 million and $2.1$1.5 million, respectively, of patent cost reimbursements as a reduction to general and administrative expense.28willmay increase substantially in the future as a result of expanding our operations, including hiring personnel, preparing for potential commercialization of our product candidates, and additional facility occupancy costs, as well as increased costs associated with operating as a public company (including legal, audit, and accounting fees; maintaining compliance with the rules and regulations of the SEC and Nasdaq; director and officer insurance premiums; investor and public relations activities; and other accompanying compliance and governance requirements). We also expect to increase the size of our administrative functionexpenses necessary to support the growth and operations of our business.MSKCCMemorial Sloan Kettering Cancer Center (“MSKCC”) success payments liability under the Exclusive License Agreement, dated November 13, 2020, with MSKCC Agreement, and other income from the sale of certain intellectual property rights.20222023 and 2021three months endedMarch 31, 2022 and 2021:Three Months Ended March 31, 2023 2022 Change (in thousands) Licensing and collaboration revenue $ 3,502 $ 2,664 $ 838 Operating expenses: Research and development 25,709 13,924 11,785 General and administrative 8,909 9,593 (684) Total operating expenses 34,618 23,517 11,101 Loss from operations (31,116) (20,853) (10,263) Other income (expense): Change in fair value of equity securities (15) (88) 73 Change in fair value of the MSKCC success payments liability 255 1,596 (1,341) Other income, net 2,832 257 2,575 Total other income 3,072 1,765 1,307 Net loss $ (28,044) $ (19,088) $ (8,956) $1.1$0.8 million or 68%, to $3.5 million for the three months ended March 31, 2023 from $2.7 million for the three months ended March 31, 2022 from $1.6 million for the three months ended March 31, 2021. We recognized $0.92022. This increase was primarily related to increases of $0.7 million related to recognition of revenue under the Collaboration and License Agreement (as amended, the “AbbVie Agreement”) with AbbVie Agreement for the three months ended March 31, 2022Manufacturing Management Unlimited Company (“AbbVie”) and no revenue was recognized under this agreement for the three months ended March 31, 2021. The remaining increase was primarily$0.2 million related to other license agreements with various other licensees.three months ended March 31, 2022 and 2021:29Three Months Ended March 31, 2023 2022 Change (in thousands) AbbVie $ 1,608 $ 933 $ 675 Other licensees 1,894 1,731 163 Total licensing revenue $ 3,502 $ 2,664 $ 838 $3.8$11.8 million or 37%, to $25.7 million for the three months ended March 31, 2023 from $13.9 million for the three months ended March 31, 2022 from $10.22022. This increase was primarily related to increases of $6.3 million in external CMO and CRO activities, driven by increases of $4.8 million due to timing of CMO activities for our product candidates, and $1.5 million in CRO activities primarily to advance our CB-010 ANTLER phase 1 trial; $2.4 million in other research and development expenses to advance CB-012 investigational new drug (“IND”) application-enabling studies and other preclinical research, as well as other outside services related to research and development; $2.3 million in personnel-related expenses, including stock-based compensation, due to headcount increases; and $0.7 million in facilities and other allocated expenses.2021. This increase was primarily related to increases of $3.2 million in personnel-related expenses (which includes an increase in stock-based compensation expense of $0.9 million), $1.1 million in external clinical trial-related activities and contract manufacturing for our product candidates, and $0.7 million in other facilities and allocated expenses, partially offset by decreases of $0.9 million in expenses related to licensing, sublicensing revenue, and milestones and $0.4 million in other research and development expenses.General and Administrative ExpensesGeneral and administrative expenses increased by $5.0 million, or 109%, to2023 from $9.6 million for the three months ended March 31, 2022 from $4.62022. This decrease was primarily related to decreases of $0.8 million in director and officer insurance and legal expenses; and $0.4 million in patent prosecution and maintenance costs; partially offset by an increase of $0.5 million in personnel-related expenses, including stock-based compensation, due to headcount increases.2021. This increase was primarily related to increases of $3.2 million in personnel-related expenses (which includes an increase in stock-based compensation expense of $1.8 million), $1.7 million in legal, accounting, insurance, and other expenses associated with being a public company, and $0.7 million in facilities and other allocated expenses, partially offset by a $0.6 million decrease in patent prosecution and maintenance costs.Total Other Income (Expense)other incomea gain related to the change in the fair value of the MSKCC success payments liability in the amount of $0.3 million and $1.6 million, respectively, for the three months ended March 31, 2022.Interest2023 and 2022, respectively.recognized during the three months ended March 31, 2022net increased to $0.3 million from less than $0.1by $2.6 million during the three months ended March 31, 2021 due2023 compared to theMarch 31, 2022. The increase primarily relates to a $2.5 million increase in holdings ofinterest income earned from marketable securities.Income TaxNo income tax benefit or expense was recognized for the three months ended March 31, 2022 and 2021.stock that we received under the Intellia Agreement.stock. Additionally, through March 31, 2022,2023, we received approximately $78.0$85.9 million from licensing agreements, licensing and collaboration agreements, a service agreement, patent assignments, and government grants, including $30.2$33.8 million that was received from AbbVie under the AbbVie Agreement.2022,2023, we have sold 168,635 shares of our common stock under the ATM Sales Agreement at an average price per share of $7.32 for aggregate gross proceeds of $1.2 million ($1.0 million net of offering expenses).$390.8$291.0 million. In March 2021, we received net proceeds of $108.8 million from our Series C convertible preferred stock financing and an upfront payment of $30.0 million from AbbVie under the AbbVie Agreement. In July and August 2021, we received aggregate net proceeds of approximately $321.0 million from our IPO. We will continue to be dependent upon equity financing, debt financing, collaborationscollaboration and licensing arrangements, and/or other forms of capital raises at least until we are able to generate significant positive cash flows from our operations. We have no current ongoing material financing commitments, such as lines of credit or guarantees, that are expected to affect our liquidity over the next five years, except for our lease commitments as described in Note 98 to our condensed consolidated financial statements included elsewhere in this Form 10-Q,.and cash equivalents, and marketable securities will enable usbe sufficient to fund our current operating expenses and capital expenditure requirementsplan for at least the next 12 months from the date of this Form 10-Q. We have based these estimates on our current assumptions, which may require future adjustments based on our ongoing business decisions.30 andpublic or private equity offerings (including our at-the-market equity offering program), debt financings, collaborations and strategic alliances, licensing arrangements.arrangements, or other sources. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could result in dilution to our stockholders. If we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances, or licensing arrangements with third parties or other sources, we may have to relinquish certain valuable rights to our product candidates, technologies, future revenue streams, or research programs or grant licenses on terms that may not be favorable to us.3120222023 and 2021Three Months Ended March 31, 2023 2022 Cash used in operating activities $ (27,939) $ (21,673) $ (6,266) Cash provided by (used in) investing activities 20,703 (72,107) 92,810 Cash provided by financing activities 1,642 990 652 Net decrease in cash and cash equivalents $ (5,594) $ (92,790) $ 87,196 Provided by (Used in)Used in Operating Activitiesand net cash provided byrespectively. was $20.3 million for the three months ended March 31, 2021.2023 was primarily due to our net loss of $28.0 million, adjusted by non-cash charges of $2.5 million and net changes in our operating assets and liabilities of $2.4 million. Our non-cash charges were primarily comprised of $3.1 million of stock-based compensation, $0.6 million of depreciation and amortization expense, and non-cash lease expense of $0.5 million, which were partially offset by amortization of investment premiums of $1.5 million, and change in the fair value of the MSKCC success payments liability of $0.3 million. The changes in our operating assets and liabilities were due to increases of $1.3 million inforin the three months ended March 31, 2022 was primarily due to our net loss of $19.1 million, adjusted by non-cash charges of $2.5 million and net changes in our operating assets and liabilities of $5.1 million. Our non-cash charges were primarily comprised of $3.0 million of stock-based compensation, non-cash lease expense of $0.5 million, amortization of investment premiums of $0.3 million, and $0.3 million of depreciation and amortization expense, which were partially offset by the change in the fair value of the MSKCC success payments liability of $1.6 million. The changes in our operating assets and liabilities were due to decreases of $0.8 million in accounts receivable and $1.3 million in other receivables, offset by increases in prepaid expenses and other current assets of $1.3 million, other assets of $0.5 million, and increases of $1.9 million in accounts payable, $2.8 million in accrued expenses and other current liabilities, $0.6 million in deferred revenue, and $0.1 million in operating lease liabilities.providedProvided by operating activities in(Used in) Investing Activities20212023 cash provided by investing activities was primarily due to a $30.0$20.7 million, upfront payment received from AbbVie under the AbbVie Agreement and recorded as deferred revenues, partially offset by a net loss of $13.2 million for the three months ended March 31, 2021. Our non-cash charges were comprised of a change in the fair value of the MSKCC success payments liability of $0.7 million, $0.3 million of stock-based compensation, and $0.2 million of depreciation and amortization expense. The changes in our net operating assets and liabilities were primarily due to an increase of $3.9 million in accrued expenses and other current liabilities and a $0.4 million decrease in contract assets, partially offset by an increase of $1.1 million in other receivables, an increase of $0.6 million in prepaid expenses and other current assets, and an increase of $0.4 million in other assets.Cash Used in Investing ActivitiesDuringduring the three months ended March 31, 2022 cash used in investing activities was $72.1 million. During2021 cash used in investing activities2023, was less than $0.1primarily due to proceeds from the sales and maturities of marketable securities of $98.7 million, partially offset by purchases of marketable securities of $75.9 million and property and equipment of $2.0 million.used in investingProvided by Financing Activities20212023 was primarily due to net proceeds from our at-the-market equity offering program of $1.1 million and the exercise of stock options and purchases of property and equipment incommon stock under the amount2021 Employee Stock Purchase Plan of less than $0.1$0.5 million.Cash Provided by Financing ActivitiesDuring the three months ended March 31, 2022 and 2021, cash provided by financing activities was $1.0 million and $109.7 million, respectively.32Cash provided by financing activities for the three months ended March 31, 2021 was primarily due to our receipt of net proceeds from the issuance of Series C preferred stock in the amount of $109.2 million and proceeds from common stock options exercised of $0.6 million, partially offset by the repayments of capital lease obligation in the amount of $0.1 million.2021,2022, and the related notes included in our Form 10-K. Since the date of such financial statements, there have been no material changes to our significant accounting policies other than those described in Note 2policies. There have been no material changes to our condensed consolidated financial statements included elsewherecritical accounting estimates as compared to those disclosed in thisour Form 10-Q.2022.2023. As described in Note 2our condensed consolidated financial statements included elsewhere in this Form 10-Q, we have early adopted multiple accounting standards, because the JOBS Act does not precludebe an emerging growth company, we may continue to rely on exemptions from adoptingcertain disclosure requirements that are available to smaller reporting companies. Specifically, as a new or revised accounting standard earlier thansmaller reporting company, we may choose to present only the time that such standard appliestwo most recent fiscal years of audited consolidated financial statements in our Annual Report on Form 10-K and, similar to privateemerging growth companies, to the extent early adoption is allowed by the accounting standard.smaller reporting companies have reduced disclosure obligations regarding executive compensation.the Company’sour market risk during the three months ended March 31, 2022.2023. For a discussion of the Company’sour exposure to market risk, refer to the section titled “Quantitative and Qualitative Disclosures About Market Risk” in our Form 10-K. and Exchange Act of 1934, as amended (the “Exchange Act”) is (a) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and (b) accumulated and332022,2023, our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) ofunder the Exchange Act). Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our principal executive officer and principal financial officer have concluded that, based upon the evaluation described above, as of March 31, 2022,2023, our disclosure controls and procedures were effective.ofunder the Exchange Act during the three months ended March 31, 20222023 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.be subject to various legal proceedings and claims that arisebecome involved in litigation arising in the ordinary course of our business activities.business. Regardless of the outcome, litigation can have a material adverse effect on us due to defense and settlement costs, diversion of our management resources, and other factors.not currently subject to any material legal proceedings.without merit.company.Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results.20222022.ActAct.10.110.1†10.3+ 10.4+ 10.5+ 10.6+ 10.7+ 10.8+ 31.1* *Filed herewith.**Furnished herewith.36Furnished herewith., 2022, 202237