Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2023 | |
Cover [Abstract] | |
Document Type | S-1/A |
Entity Registrant Name | NKGen Biotech, Inc. |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Central Index Key | 0001845459 |
Amendment Flag | true |
Amendment Description | AMENDMENT NO. 1 |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 117,000 | $ 351,000 |
Accounts receivable | 29,000 | |
Prepaid expenses and other current assets | 204,000 | 261,000 |
Total current assets | 350,000 | 612,000 |
Property and equipment, net | 15,521,000 | 16,567,000 |
Operating lease right-of-use assets, net | 362,000 | 802,000 |
Capitalized software, net | 97,000 | 89,000 |
Total assets | 16,330,000 | 18,070,000 |
Current liabilities: | ||
Accounts payable and accrued expenses (including related party amounts of $401 and $81 as of September 30, 2023 and December 31, 2022, respectively) | 2,652,000 | 2,202,000 |
Convertible promissory notes, current | $ 11,392,000 | $ 11,219,000 |
Other liability enumeration | Related party | Related party |
Operating lease liability, current | $ 379,000 | $ 458,000 |
Other current liabilities (including related party amounts of $160 and zero, as of September 30, 2023 and December 31, 2022, respectively) | 55,000 | 1,930,000 |
Total current liabilities | 14,741,000 | 55,743,000 |
Operating lease and other non-current liabilities | 360,000 | |
Deferred tax liability | 26,000 | 19,000 |
Total liabilities | 14,767,000 | 56,122,000 |
Commitments and contingencies | ||
Stockholders' equity (deficit): | ||
Common stock, $0.0001 par value; 500,000,000 authorized shares as of December 31, 2021 and 2022, respectively; 5,873,711 and 13,303,795 shares issued and outstanding as of December 31, 2021 and 2022, respectively | 1,000 | 1,000 |
Additional paid-in capital | 80,738,000 | 14,369,000 |
Accumulated deficit | (79,176,000) | (52,422,000) |
Total stockholders' equity (deficit) | 1,563,000 | (38,052,000) |
Total liabilities and stockholders' equity (deficit) | 16,330,000 | 18,070,000 |
Nonrelated party | Paycheck Protection Program Loan | ||
Current liabilities: | ||
Loans payable | 675,000 | |
Related party | ||
Current liabilities: | ||
Accounts payable and accrued expenses (including related party amounts of $401 and $81 as of September 30, 2023 and December 31, 2022, respectively) | 81,000 | 0 |
Convertible promissory notes, current | 263,000 | 259,000 |
Loans payable | 0 | 39,000,000 |
Other current liabilities (including related party amounts of $160 and zero, as of September 30, 2023 and December 31, 2022, respectively) | $ 0 | $ 1,867,000 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2023 | Sep. 29, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts payable and accrued expenses | $ 12,965,000 | $ 2,652,000 | $ 2,202,000 | |
Other current liabilities | $ 355,000 | $ 55,000 | $ 1,930,000 | |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | |
Common stock, shares issued | 21,888,976 | 13,303,795 | 5,873,711 | |
Common stock, shares outstanding | 21,888,976 | 21,888,976 | 13,303,795 | 5,873,711 |
Related party | ||||
Accounts payable and accrued expenses | $ 401,000 | $ 81,000 | $ 0 | |
Other current liabilities | $ 160,000 | $ 0 | $ 1,867,000 |
Statements of Operations and Co
Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||||||
Revenues | $ 0 | $ 3 | $ 0 | $ 77 | $ 77 | $ 426 |
Costs and expenses: | ||||||
Cost of revenues | 0 | 0 | 0 | 3 | 18 | 30 |
Research and development | 3,929 | 4,121 | 11,577 | 12,659 | 16,746 | 14,672 |
General and administrative | 2,974 | 1,874 | 8,737 | 5,501 | 7,659 | 7,585 |
Total expenses | 6,903 | 5,995 | 20,314 | 18,163 | 24,423 | 22,287 |
Loss from operations | (6,903) | (5,992) | (20,314) | (18,086) | (24,346) | (21,861) |
Other expenses: | ||||||
Interest expense (including related party amounts of $1,305 and $2,271 for the year ended December 31, 2021 and 2022, respectively) | (211) | (636) | (307) | (1,690) | (2,306) | (1,315) |
Other expenses, net | 0 | 8 | 120 | 58 | (95) | (84) |
Net loss before provision for income taxes | (33,177) | (6,693) | (49,348) | (19,806) | (26,747) | (23,260) |
Provision for income taxes | 0 | 0 | 0 | 0 | (7) | (5) |
Net loss | $ (33,177) | $ (6,693) | $ (49,348) | $ (19,806) | $ (26,754) | $ (23,265) |
Weighted-average common shares outstanding, basic | 13,397,968 | 6,088,729 | 13,342,568 | 5,962,841 | 6,356,348 | 5,819,883 |
Weighted-average common shares outstanding, diluted | 13,397,968 | 6,088,729 | 13,342,568 | 5,962,841 | 6,356,348 | 5,819,883 |
Net loss per share, basic | $ (2.48) | $ (1.10) | $ (3.70) | $ (3.32) | $ (4.21) | $ (4) |
Net loss per share, diluted | $ (2.48) | $ (1.10) | $ (3.70) | $ (3.32) | $ (4.21) | $ (4) |
Statements of Operations and _2
Statements of Operations and Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Research and development | $ 3,929 | $ 4,121 | $ 11,577 | $ 12,659 | $ 16,746 | $ 14,672 |
Interest expense | 211 | 636 | 307 | 1,690 | 2,306 | 1,315 |
Related party | ||||||
Research and development | 401 | 140 | 401 | 337 | 439 | 209 |
Interest expense | $ 63 | $ 628 | $ 160 | $ 1,663 | $ 2,271 | $ 1,305 |
Statements of Common Stock and
Statements of Common Stock and Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Common Stock Previously Reported | Common Stock Revision of Prior Period, Adjustment | Common Stock | Additional Paid-in Capital Previously Reported | Additional Paid-in Capital Revision of Prior Period, Adjustment | Additional Paid-in Capital | Accumulated Deficit Previously Reported | Accumulated Deficit Revision of Prior Period, Adjustment | Accumulated Deficit | Previously Reported | Revision of Prior Period, Adjustment | Total |
Balance as of beginning of period (in shares) at Dec. 31, 2020 | 13,914,370 | (13,914,370) | ||||||||||
Balance as of beginning of period at Dec. 31, 2020 | $ 14 | $ (14) | ||||||||||
Balance as of end of period (in shares) at Dec. 31, 2021 | 14,382,093 | (14,382,093) | 0 | |||||||||
Balance as of end of period at Dec. 31, 2021 | $ 14 | $ (14) | $ 0 | |||||||||
Balance as of beginning of period (in shares) at Dec. 31, 2020 | 5,682,691 | 5,682,691 | ||||||||||
Beginning balance at Dec. 31, 2020 | $ 1 | $ 1 | $ 14,200 | $ 13 | $ 14,213 | $ (29,157) | $ (29,157) | (14,943) | (14,943) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Stock-based compensation | 93 | 93,000 | ||||||||||
Exercise of common stock options | 63 | $ 63,000 | ||||||||||
Exercise of common stock options (in shares) | 191,020 | 191,020 | ||||||||||
Net loss | (23,265) | $ (23,265) | ||||||||||
Balance as of ending of period (in shares) at Dec. 31, 2021 | 5,873,711 | 5,873,711 | ||||||||||
Ending balance at Dec. 31, 2021 | $ 1 | $ 1 | 14,356 | 13 | 14,369 | (52,422) | $ 0 | (52,422) | $ (38,052) | $ 0 | $ (38,052) | |
Balance as of end of period (in shares) at Sep. 30, 2022 | 0 | |||||||||||
Balance as of end of period at Sep. 30, 2022 | $ 0 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Stock-based compensation | 54 | 0 | 54 | |||||||||
Exercise of common stock options | 160 | 0 | 160 | |||||||||
Exercise of common stock options (in shares) | 485,939 | |||||||||||
Net loss | 0 | (19,806) | (19,806) | |||||||||
Balance as of ending of period (in shares) at Sep. 30, 2022 | 6,359,650 | |||||||||||
Ending balance at Sep. 30, 2022 | $ 1 | 14,583 | (72,228) | $ (57,644) | ||||||||
Balance as of beginning of period (in shares) at Dec. 31, 2021 | 14,382,093 | (14,382,093) | 0 | |||||||||
Balance as of beginning of period at Dec. 31, 2021 | $ 14 | $ (14) | $ 0 | |||||||||
Balance as of end of period (in shares) at Dec. 31, 2022 | 32,575,043 | (32,575,043) | 0 | |||||||||
Balance as of end of period at Dec. 31, 2022 | $ 33 | $ (33) | $ 0 | |||||||||
Balance as of beginning of period (in shares) at Dec. 31, 2021 | 5,873,711 | 5,873,711 | ||||||||||
Beginning balance at Dec. 31, 2021 | $ 1 | $ 1 | 14,356 | 13 | 14,369 | (52,422) | 0 | (52,422) | (38,052) | 0 | (38,052) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Stock-based compensation | 69 | 69 | ||||||||||
Issuance of common stock upon conversion of related party loans | 66,139 | 66,139 | ||||||||||
Converted shares (in shares) | 6,943,789 | |||||||||||
Exercise of common stock options | 161 | $ 161 | ||||||||||
Exercise of common stock options (in shares) | 486,296 | 486,296 | ||||||||||
Net loss | (26,754) | $ (26,754) | ||||||||||
Balance as of ending of period (in shares) at Dec. 31, 2022 | 13,303,795 | 13,303,795 | ||||||||||
Ending balance at Dec. 31, 2022 | $ 1 | $ 1 | 80,706 | 32 | 80,738 | (79,176) | 0 | (79,176) | $ 1,563 | $ 0 | $ 1,563 | |
Balance as of beginning of period (in shares) at Jun. 30, 2022 | 14,474,484 | (14,474,484) | 0 | |||||||||
Balance as of beginning of period at Jun. 30, 2022 | $ 14 | $ (14) | $ 0 | |||||||||
Balance as of end of period (in shares) at Sep. 30, 2022 | 0 | |||||||||||
Balance as of end of period at Sep. 30, 2022 | $ 0 | |||||||||||
Balance as of beginning of period (in shares) at Jun. 30, 2022 | 0 | 5,911,444 | 5,911,444 | |||||||||
Beginning balance at Jun. 30, 2022 | $ 0 | $ 1 | $ 1 | 14,405 | 13 | 14,418 | (65,535) | 0 | (65,535) | $ (51,116) | $ 0 | (51,116) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Stock-based compensation | 0 | 16 | 0 | 16 | ||||||||
Exercise of common stock options | $ 0 | 149 | 0 | 149 | ||||||||
Exercise of common stock options (in shares) | 448,206 | |||||||||||
Net loss | $ 0 | 0 | (6,693) | (6,693) | ||||||||
Balance as of ending of period (in shares) at Sep. 30, 2022 | 6,359,650 | |||||||||||
Ending balance at Sep. 30, 2022 | $ 1 | 14,583 | (72,228) | $ (57,644) | ||||||||
Balance as of beginning of period (in shares) at Dec. 31, 2022 | 32,575,043 | (32,575,043) | 0 | |||||||||
Balance as of beginning of period at Dec. 31, 2022 | $ 33 | $ (33) | $ 0 | |||||||||
Balance as of end of period (in shares) at Sep. 30, 2023 | 0 | |||||||||||
Balance as of end of period at Sep. 30, 2023 | $ 0 | |||||||||||
Balance as of beginning of period (in shares) at Dec. 31, 2022 | 13,303,795 | 13,303,795 | ||||||||||
Beginning balance at Dec. 31, 2022 | $ 1 | $ 1 | 80,706 | 32 | 80,738 | (79,176) | 0 | (79,176) | $ 1,563 | $ 0 | 1,563 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Stock-based compensation | 3,208 | 0 | 3,208 | |||||||||
Exercise of common stock options | 11 | 0 | $ 11 | |||||||||
Exercise of common stock options (in shares) | 12,867 | 12,866 | ||||||||||
Reverse recapitalization transactions, net (in shares) | 8,572,314 | |||||||||||
Reverse recapitalization transactions, net | $ 1 | 36,842 | 0 | $ 3,928 | ||||||||
Net loss | 0 | (49,348) | (49,348) | |||||||||
Balance as of ending of period (in shares) at Sep. 30, 2023 | 21,888,976 | |||||||||||
Ending balance at Sep. 30, 2023 | $ 2 | 120,799 | (128,524) | $ (40,638) | ||||||||
Balance as of beginning of period (in shares) at Jun. 30, 2023 | 32,606,548 | (32,606,548) | 0 | |||||||||
Balance as of beginning of period at Jun. 30, 2023 | $ 33 | $ (33) | $ 0 | |||||||||
Balance as of end of period (in shares) at Sep. 30, 2023 | 0 | |||||||||||
Balance as of end of period at Sep. 30, 2023 | $ 0 | |||||||||||
Balance as of beginning of period (in shares) at Jun. 30, 2023 | 0 | 13,316,662 | 13,316,662 | |||||||||
Beginning balance at Jun. 30, 2023 | $ 0 | $ 1 | $ 1 | $ 82,958 | $ 32 | 82,990 | $ (95,347) | $ 0 | (95,347) | $ (12,356) | $ 0 | (12,356) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Stock-based compensation | $ 0 | 967 | 0 | 967 | ||||||||
Reverse recapitalization transactions, net (in shares) | 8,572,314 | |||||||||||
Reverse recapitalization transactions, net | $ 1 | 36,842 | 0 | 3,928 | ||||||||
Net loss | $ 0 | 0 | (33,177) | (33,177) | ||||||||
Balance as of ending of period (in shares) at Sep. 30, 2023 | 21,888,976 | |||||||||||
Ending balance at Sep. 30, 2023 | $ 2 | $ 120,799 | $ (128,524) | $ (40,638) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities | ||
Net loss | $ (26,754) | $ (23,265) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,210 | 1,128 |
Stock-based compensation | 69 | 93 |
Amortization of operating lease right-of use assets | 440 | 116 |
Change in fair value of convertible promissory notes and convertible promissory notes due to related parties | 177 | 143 |
Interest expense (including related party amounts of $63, $628, $160 and $1,663 for the three months ended September 30, 2023 and 2022 and the nine months ended September 30, 2023 and 2022, respectively) | 2,271 | 1,305 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (29) | 111 |
Prepaid expenses and other current assets | 57 | (48) |
Accounts payable and accrued expenses | 443 | 959 |
Operating lease liabilities | (437) | (116) |
Other, net | (4) | 26 |
Net cash used in operating activities | (22,557) | (19,548) |
Investing activities | ||
Purchases of property and equipment | (101) | (403) |
Purchase of capitalized software | (62) | (56) |
Net cash used in investing activities | (163) | (459) |
Financing activities | ||
Proceeds from exercise of common stock options | 161 | 63 |
Proceeds from related party loans | 23,000 | 20,500 |
Repayments on payroll protection program loan | (675) | (404) |
Net cash provided by financing activities | 22,486 | 20,159 |
Net increase in cash, cash equivalents, and restricted cash | (234) | 152 |
Cash, cash equivalents, and restricted cash at the beginning of period | 351 | 199 |
Cash, cash equivalents, and restricted cash at the end of period | 117 | 351 |
Supplemental disclosure of noncash investing and financing activities | ||
Related party loans and interest payable converted into common stock | 66,139 | |
Operating lease right-of use asset obtained in exchange for lease liability | 738 | |
Property and equipment included in Accounts payable and accrued expenses | $ 8 | $ 98 |
Company Information
Company Information | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Company Information | 1. Company Information NKGen Biotech, Inc. (“Company”, “NKGen”, “we”, “us”, or “our”), a Delaware corporation headquartered in Santa Ana, California, is a clinical-stage biotechnology company focused on the development and commercialization of innovative autologous, allogeneic and CAR-NK natural killer cell therapies utilizing their proprietary SNK (Super-Natural-Killer) platform. The Company is majority owned and controlled by NKMax Co., Ltd. (“NKMAX”), a company located in South Korea. The Company was originally incorporated in Delaware on January 28, 2021 under the name Graf Acquisition Corp. IV (“ Graf ”), as a special-purpose acquisition company for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or engaging in any other similar business combination with one or more businesses or entities. On April 14, 2023, the Company entered into the Agreement and Plan of Merger by and among Graf, Austria Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Graf (“ Merger Sub ”), and NKGen Biotech, Inc. (“ Merger Agreement ”). Upon consummation of the transactions under the Merger Agreement on September 29, 2023 (the “ Business Combination ”), Merger Sub merged with and into NKGen Biotech, Inc. (“ Legacy NKGen ”) with Legacy NKGen surviving the merger as a wholly owned subsidiary of Graf (the “ Merger ”). In connection with the consummation of the Business Combination (the “ Closing ”), Graf was renamed to “NKGen Biotech, Inc.” and Legacy NKGen changed its name to “NKGen Operating Biotech, Inc.” The Common Stock and warrants of the combined company began trading on The Nasdaq Stock Market LLC under the symbols “NKGN” and “NKGNW”, respectively, on October 2, 2023. Liquidity The Company follows Financial Accounting Standards Board (“ FASB ASC Presentation of Financial Statements — Going Concern The Company has a limited operating history, has incurred significant operating losses since its inception, and the revenue and income potential of the Company’s business and market are unproven. The preparation of these financial statements does not include any adjustments that may result from the outcome of this uncertainty. The Company’s financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As of December 31, 2022, the Company had an accumulated deficit of $79.2 million and cash and cash equivalents of $0.1 million. To date, the Company has funded its operations primarily with the net proceeds from the issuance of convertible promissory notes and the issuance of debt to a related party. The Company expects to incur substantial operating losses for the next several years and will need to obtain additional near-term financing in order to continue its research and development activities, initiate and complete clinical trials and launch and commercialize any product candidates for which it receives regulatory approval. Management has prepared cash flow forecasts which indicate that based on the Company’s expected operating losses and negative cash flows, there is substantial doubt about the Company’s ability to continue as a going concern for twelve months from the issuance of these financial statements. The Company plans to continue to fund its losses from operations and capital funding needs through additional debt or equity financings to be received from related parties, private equity, or other sources. If the Company is not able to secure adequate additional funding, the Company may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, suspend or curtail planned programs, or may be forced to cease operations or file for bankruptcy protection. Any of these actions could materially harm the Company’s business, results of operations and future prospects. There can be no assurance that such financing will be available or will be on terms acceptable to the Company. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation NKMAX held a majority of the voting power of Legacy NKGen before the Business Combination and continues to hold a majority of the voting power of the Company after the Business Combination. Therefore, as there was no change in control, the Business Combination was accounted for as a common control transaction with respect to Legacy NKGen along with a reverse recapitalization of the Company. Accordingly, for accounting purposes, the financial statements of the Company represent a continuation of the financial statements of Legacy NKGen with the Business Combination being treated as the equivalent of Legacy NKGen issuing shares for the net assets of Graf, accompanied by a recapitalization. The net assets of Graf were recognized as of the Closing at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are presented as those of Legacy NKGen and the accumulated deficit of Legacy NKGen has been carried forward after Closing. Upon the consummation of the Business Combination, all of Legacy NKGen’s equity was converted into equity of the Company based upon an exchange ratio (“ Exchange Ratio ”). In addition, all stock options of Legacy NKGen were converted using the Exchange Ratio into options exercisable for shares of the Company with the same terms and vesting conditions. The Exchange Ratio as of September 29, 2023, the date of Closing, was approximately 0.408 . All periods prior to the Business Combination have been retrospectively adjusted using the Exchange Ratio to reflect the reverse recapitalization. In connection with the reverse recapitalization treatment of the Business Combination, all issued and outstanding securities of Graf upon Closing were treated as issuances of the Company upon the consummation of the Business Combination. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“ SEC ”) and generally accepted accounting principles in the United States of America (“ US GAAP ”). The Company maintains its accounting records under the accrual method of accounting in conformity with US GAAP. The condensed balance sheet as of December 31, 2022 included herein was derived from the audited financial statements as of that date. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such regulations. Accordingly, these unaudited condensed consolidated financial statements and accompanying footnotes should be read in conjunction with Legacy NKGen’s financial statements as of and for the year ended December 31, 2022. The results for the interim periods are not necessarily indicative of results for the full year. Except as described in this Note 2, there have been no material changes to NKGen’s significant accounting policies as described in NKGen’s financial statements as of and for the year ended December 31, 2022. In the opinion of management, all adjustments, of a normal recuring nature, considered necessary for a fair presentation have been included in the condensed consolidated financial statements. The Company believes that the disclosures provided herein are adequate to prevent the information presented from being misleading. Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of condensed consolidated financial statements in accordance with US GAAP requires management to make estimates and assumptions that impact the reported amounts of certain assets and liabilities, certain disclosures at the date of the condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. The most significant estimates in the Company’s condensed consolidated financial statements include, but are not limited to, accrued research and development expenses, legacy convertible promissory notes, senior convertible promissory notes due to related parties, forward purchase derivative liabilities, derivative warrant liabilities, common stock, and equity awards. These estimates and assumptions are based upon historical experience, knowledge of current events, and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results could differ materially from those estimates. Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“ CODM ”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information presented on an enterprise-wide basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it operates in one reportable segment. Additionally, the Company generates all of its revenues, and maintains all of its long-lived assets within the United States. Transaction Costs The Company capitalizes deferred transaction costs, which primarily consist of incremental legal fees, accounting fees and other costs directly attributable to anticipated capital-raising transactions. The deferred transaction costs are reclassified upon the occurrence of the associated capital-raising transactions. All deferred transaction costs during the nine months ended September 30, 2023 were reclassified upon Closing of the Business Combination. No deferred transaction costs were recorded as of December 31, 2022. Transaction costs not specific to a single instrument are allocated on a relative fair value basis. Transaction costs allocated to equity-classified instruments are recorded to additional paid in capital. Transaction costs allocated to liability-classified instruments with recurring fair value measurements are recorded as transaction costs expenses in the condensed consolidated statements of operations and comprehensive loss. Deferred Debt Issuance Costs Costs incurred through the issuance of the revolving line of credit to parties who are providing short-term financing availability are reflected as deferred debt issuance costs. These costs are generally amortized to interest expense over the life of the financing instrument using the effective interest rate method or other methods approximating the effective interest method. As of September 30, 2023, $0.1 million in deferred debt issuance costs were recorded to prepaid expenses and other current assets on the condensed consolidated balance sheets. No deferred debt issuance costs were recorded as of December 31, 2022. Restricted Cash Restricted cash consists of funds that are contractually restricted due to a revolving line of credit, which was entered into during June 2023. In accordance with the terms of the revolving line of credit, the Company is required to maintain certain cash balances with the lender from December 31, 2023 and until June 2024 or repayment of all principals and other payables to the lender under the revolving line of credit as additional collateral for the borrowings. As of September 30, 2023, $0.3 million in restricted cash was recorded on the unaudited condensed consolidated balance sheet. No restricted cash balances were recorded as of December 31, 2022. The Company includes its restricted bank deposits in cash, cash equivalents and restricted cash when reconciling beginning-of-period and end-of-period total amounts shown on the condensed statement of cash flows for the nine months ended September 30, 2023. Hybrid Instruments The Company follows Financial Accounting Standards Board (“ FASB ”) Accounting Standard Codification (“ ASC ”) 480, Distinguishing Liabilities from Equity , when evaluating the accounting for its hybrid instruments. A financial instrument that embodies an unconditional obligation, or a financial instrument other than an outstanding share that embodies a conditional obligation, that the issuer must or may settle by issuing a variable number of its equity shares shall be classified as a liability (or an asset in some circumstances) if, at inception, the monetary value of the obligation is based solely or predominantly on any one of the following: (a) a fixed monetary amount known at inception; (b) variations in something other than the fair value of the issuer’s equity shares; or (c) variations inversely related to changes in the fair value of the issuer’s equity shares. Hybrid instruments meeting these criteria are not further evaluated for any embedded derivatives and are carried as a liability at fair value at each balance sheet date. Derivative Instruments FASB ASC 815, Derivatives and Hedging Activities , requires companies to bifurcate certain features from their host instruments and account for them as free-standing derivative financial instruments should certain criteria be met. The Company does not use derivative instruments to hedge exposures to interest rate, market, or foreign currency risks. The Company evaluates its financial instruments to determine whether such instruments are derivatives or contain features that qualify as embedded derivatives. Embedded derivatives must be separately measured from the host contract if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract and the features of the derivatives. Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized in the condensed consolidated statement of operations each period. Bifurcated embedded derivatives are classified with the related host contract in the Company’s condensed consolidated balance sheet. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Debt For convertible debt instruments that are not considered liabilities under ASC 480 or ASC 815, the Company applies ASC 470, Debt , for the accounting of such instruments, including any premiums or discounts. The Company’s senior convertible promissory notes are accounted for under ASC 470. Subscription Receivable The Company records stock issuances at the effective date. If the subscription is not funded upon issuance, the Company records a subscription receivable as an asset on the balance sheet. When subscription receivables are not received prior to the issuance of financial statements at a reporting date in satisfaction of the requirements under ASC 505, Equity , the subscription receivable is reclassified as a contra account to stockholder’s equity (deficit) on the balance sheet. Fair Value Option In lieu of bifurcation, on an instrument-by-instrument basis, the Company may elect the fair value option for certain financial instruments that meet the required criteria under ASC 825, Financial Instruments . The Company elected the fair value option for its legacy convertible promissory notes, which met the required criteria under ASC 825, Financial Instruments . Interest expense associated with the legacy convertible promissory notes is included in the change in fair value of such instruments. Fair Value of Financial Instruments The Company accounts for the fair value of its financial instruments under the framework established by US GAAP which defines fair value and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Level 1 — Quoted prices in active markets for identical assets or liabilities the Company has the ability to access at the measurement date. Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of assets or liabilities. Level 3 — Pricing inputs that are unobservable, supported by little or no market activity and are significant to the fair value of the assets or liabilities. Transfers to/from Levels 1, 2, and 3 are recognized at the beginning of the reporting period. There were no transfers to/from Levels 1, 2, and 3 during the three and nine months ended September 30, 2023 and 2022. ASC 820, Fair Value Measurement , states that in many cases, the transaction price will equal the fair value (for example, that might be the case when on the transaction date, the transaction to buy an asset takes place in the market in which the asset is sold). In determining whether a transaction price represents the fair value at initial recognition, the Company considers various factors such as whether the transaction was between related parties, is a forced transaction, or whether the unit of account for the transaction price does not represent the unit of account for the measured instrument. The Company does not measure assets at fair value on a recurring basis. Refer to Note 9, Fair Value of Financial Instruments, for further discussion regarding the Company’s fair value measurements. The carrying value of the Company’s related party loans approximates fair value as the stated interest rate approximates market rates for similar loans and due to the short-term nature of such loans, which are due within three years or less from issuance. The carrying value of the Company’s cash, restricted cash, accounts payable, accrued expenses, other current liabilities, and revolving line of credit approximates fair value primarily due to the short-term nature of such accounts. Stock-Based Compensation Stock-based compensation expense is comprised of stock options awarded to employees and consultants. The Company accounts for share-based awards under the fair value method prescribed by ASC 718-10, Stock Compensation . The fair value of stock options is estimated using the Black-Scholes option pricing model on the date of grant. This option pricing model involves a number of estimates, including the per share value of the underlying common stock, exercise price, estimate of future volatility, expected term of the stock option award, risk-free interest rate and expected annual dividend yield. The fair value of the shares of common stock underlying the stock options has historically been determined by the Company’s board of directors as there was no public market for the underlying common stock prior to October 2, 2023. The Company’s board of directors determines the fair value of the Company’s common stock by considering a number of objective and subjective factors including contemporaneous third-party valuations of its common stock, the valuation of comparable companies, sales of the Company’s common stock to outside investors in arms-length transactions, the Company’s operating and financial performance, the lack of marketability, and general and industry specific economic outlook, and the implied fair values upon a merger transaction, amongst other factors. The Company recognizes the expense for options with graded- vesting schedules on a straight-line basis over the requisite service period, which is generally the vesting period. Forfeitures are recognized as they occur. Basic and Diluted Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss for the year by the weighted-average number of common shares outstanding during the year. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding and potentially dilutive securities outstanding for the period using the treasury stock or if-converted method if their inclusion is dilutive. Diluted net loss per common share is the same as basic net loss per common share because the inclusion of potentially dilutive shares would be anti-dilutive to the calculation of loss and comprehensive loss per common share. The Company has one class of shares issued and outstanding. Accordingly, basic and diluted net loss per share is not allocated among multiple classes of shares. Basic and diluted net loss per share for all periods prior to the Closing have been retrospectively adjusted by the Exchange Ratio to effect the reverse recapitalization. Potentially anti-dilutive shares excluded from the calculation of diluted net loss per share for each of the three and nine months ended September 30, 2023 include the following: Private warrants 4,721,533 Working capital warrants 523,140 Public warrants 3,432,286 PIPE warrants 10,209,994 Stock options 2,101,760 SPA warrants 1,000,000 Senior convertible notes’ shares 1,000,000 Deferred founder shares (1) 1,173,631 (1) As described in Note 8, Related Party Transactions, deferred founder shares do not have voting rights, do not participate in dividends and are not transferrable absent the Company’s consent. Therefore, while deferred founder shares are considered outstanding for legal purposes and are included in the total quantity of outstanding shares on the unaudited condensed consolidated statements of stockholders’ deficit, they are not considered outstanding for accounting purposes, including basic and diluted net loss per share purposes. Potentially anti-dilutive shares excluded from the calculation of diluted net loss per share for each of the three and nine months ended September 30, 2022 includes stock options of 423,932 (after giving effect to the Exchange Ratio), in addition to the shares underlying the Legacy Convertible Notes. The Company is unable to quantify the number of shares underlying the legacy convertible notes for each of the three and nine months ended September 30, 2022 as the quantity of shares issuable upon conversion was not determinable for those periods. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012, (the “ JOBS Act ”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s unaudited condensed consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standard Board (“ FASB ”) issued Accounting Standards Update (“ ASU ”) No. 2016-13, Measurement of Credit Losses on Financial Instruments . ASU 2016-13, together with a series of subsequently issued related ASUs, has been codified in Topic 326. Topic 326 establishes new requirements for companies to estimate expected credit losses when measuring certain financial assets, including accounts receivables. The new guidance is effective for fiscal years beginning after December 15, 2022. The Company adopted the new guidance with its fiscal year beginning January 1, 2023. The adoption of ASC 326 had no material impact on the Company’s financial statements. | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“ SEC Business Combination NKMAX held a majority of the voting power of Legacy NKGen before the Business Combination and continues to hold a majority of the voting power of the Company after the Business Combination. Therefore, as there was no change in control, the Business Combination was accounted for as a common control transaction with respect to Legacy NKGen along with a reverse recapitalization of the Company. Accordingly, for accounting purposes, the financial statements of the Company represent a continuation of the financial statements of Legacy NKGen with the Business Combination being treated as the equivalent of Legacy NKGen issuing shares for the net assets of Graf, accompanied by a recapitalization. The net assets of Graf were recognized as of the Closing at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are presented as those of Legacy NKGen and the accumulated deficit of Legacy NKGen has been carried forward after Closing. Upon the consummation of the Business Combination, all of Legacy NKGen’s equity was converted into equity of the Company based upon an exchange ratio (“ Exchange Ratio All periods prior to the Business Combination have been retrospectively adjusted using the Exchange Ratio to reflect the reverse recapitalization. In connection with the reverse recapitalization treatment of the Business Combination, all issued and outstanding securities of Graf upon Closing were treated as issuances of the Company upon the consummation of the Business Combination. Use of Estimates The preparation of financial statements in accordance with US GAAP requires management to make estimates and assumptions that impact the reported amounts of certain assets and liabilities, certain disclosures at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. The most significant estimates in the Company’s financial statements include, but are not limited to, accrued research and development expenses, convertible promissory notes, convertible promissory notes due to related parties, the valuation of common stock and equity awards. These estimates and assumptions are based upon historical experience, knowledge of current events, and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results could differ materially from those estimates. Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information presented on an enterprise-wide basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it operates in one reportable segment. Additionally, the Company generates all of its revenues, and maintains all of its long-lived assets within the United States. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. The carrying amounts reported in the balance sheets for cash and cash equivalents are valued at cost, which approximate their fair value. These investments may include money market funds, U.S. Government agencies, corporate debt securities, and commercial paper. The Company has not experienced any losses in such accounts and management believes the Company has no highly liquid investments exposed to credit risk. Concentrations of Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company minimizes the amount of credit exposure by investing cash that is not required for immediate operating needs in money market funds, government obligations, and/or commercial paper with short maturities. To date, the Company has not experienced any losses associated with this credit risk and continues to believe this exposure is not significant. Cash deposits are insured by the Federal Deposit Insurance Corporations (“ FDIC For the years ended December 31, 2021 and 2022, no customer accounted for over 10% of total revenue. As of December 31, 2021 and 2022, the Company had no trade accounts receivables outstanding and less than $0.1 million in other receivables. Property and Equipment, net Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method. Leasehold improvements are depreciated over the shorter of their estimated useful lives or the term of the lease by use of the straight-line method. Repairs and maintenance costs are charged to expense as incurred. When assets are retired or sold, the assets and accumulated depreciation are removed from the respective amounts and any gain or loss is recognized, as applicable, in the accompanying statements of operations. Capitalized Software, net Expenditures related to internal use software are capitalized. Such expenditures are amortized over their period of benefit, which are generally three-year period, using the straight-line method. Impairment of Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset, or asset group, may not be recoverable. Recoverability is measured by a comparison of the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset or asset group exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset or asset group exceeds the fair value of the asset or asset group. The Company has not recognized any impairment losses for the years ended December 31, 2021 and 2022. Fair Value of Financial Instruments The Company follows ASC 820-10, Fair Value Measurements and Disclosures The Company’s financial instruments include cash and cash equivalents, prepaid expenses, accounts payable, accrued expenses, convertible promissory notes issued from 2019 through 2022 to investors (“2019 Convertible Notes”), convertible promissory notes due to related parties (“Related Party Convertible Notes”, together with the 2019 Convertible Notes, “Convertible Notes”) and debt due to a related party (“Related Party Loans”). The carrying amount of cash and cash equivalents, prepaid expenses and other assets, accounts payable and accrued expenses are generally considered to be representative of their respective values because of the short-term nature of those instruments. The Company elects to account for its 2019 Convertible Notes and Related Party Convertible Notes, which meet the required criteria, at fair value at inception and at each subsequent reporting date. Subsequent changes in fair value of the Convertible Notes are recorded within other expenses, net on the accompanying statement of operations and comprehensive loss. Interest expense associated with the Convertible Notes is included in the change in fair value for the Convertible Notes. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. The carrying value of the Company’s Related Party Loans approximates fair value as the stated interest rate approximates market rates for similar loans and due to the short-term nature of such loans. Employee Benefit Plan Effective January 1, 2019, the Company adopted and maintains a defined contribution plan, which qualifies under Section 401(k) of the Internal Revenue Code, on behalf of its eligible employees. Employee contributions are voluntary and are determined on an individual basis, limited to the maximum amount allowable under federal tax regulations. During the years ended December 31, 2021 and 2022, the Company did not contribute to the plan. Revenue Recognition Historically, the Company recognized revenue in connection with Coronavirus Disease of 2019 (“ COVID-19 The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers The transaction price is the amount of consideration the Company is entitled to receive in exchange for the transfer of control of a product or a service to a customer. To determine the transaction price, the Company considers the existence of any significant financing component, the effects of any variable elements, noncash considerations and consideration payable to the customer. If a significant financing component exists, the transaction price is adjusted for the time value of money. If an element of variability exists, the Company must estimate the consideration it expects to receive and uses that amount as the basis for recognizing revenue as the product or the service is transferred to the customer. If a contract has multiple performance obligations, the Company allocates the transaction price to each distinct performance obligation in an amount that reflects the consideration the Company is entitled to receive in exchange for satisfying each distinct performance obligation. For each distinct performance obligation, revenue is recognized when (or as) the Company transfers control of the product or the service applicable to such performance obligation. In those instances where the Company first receives consideration in advance of satisfying its performance obligation, the Company classifies such consideration as contract liability until (or as) the Company satisfies such performance obligation. In those instances where the Company first satisfies its performance obligation prior to its receipt of consideration, the consideration is recorded as accounts receivable. The Company expenses incremental costs of obtaining and fulfilling a contract as and when incurred if the expected amortization period of the asset that would be recognized is one year or less, or if the amount of the asset is immaterial. Otherwise, such costs are capitalized as contract assets if they are incremental to the contract and amortized to expense proportionate to revenue recognition of the underlying contract. Collaboration Agreement The Company has entered into a research agreement that falls under the scope of ASC 808, Collaborative Arrangements Research and Development Expenses All research and development costs are expensed in the period incurred. Research and development expenses primarily consist of services provided by contract organizations for clinical development, salaries and related expenses for personnel, including stock-based compensation expense, outside service providers, facilities costs, fees paid to consultants and other professional services, license fees, depreciation and supplies used in research and development. Payments made prior to the receipt of goods or services to be used in research and development are capitalized until the related goods or services are received. Costs are accrued for research performed over the service periods specified in the contracts and estimates are adjusted, if required, based upon an ongoing review of the level of effort and costs actually incurred. Leases The Company accounts for its leases under ASC 842, Leases Stock-Based Compensation Stock-based compensation expense is comprised of stock options awarded to employees and consultants. The Company accounts for share-based awards under the fair value method prescribed by ASC 718-10, Stock Compensation The fair value of the shares of common stock underlying the stock options has historically been determined by the Company’s board of directors as there is no public market for the underlying common stock. The Company’s board of directors determines the fair value of the Company’s common stock by considering a number of objective and subjective factors including contemporaneous third-party valuations of its common stock, the valuation of comparable companies, sales of the Company’s common stock to outside investors in arms-length transactions, the Company’s operating and financial performance, the lack of marketability, and general and industry specific economic outlook, amongst other factors. The Company recognizes the expense for options with graded-vesting schedules on a straight-line basis over the requisite service period, which is generally the vesting period. Forfeitures are recognized as they occur. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes net deferred tax assets to the extent the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability. No tax liability has been recognized in the financial statements attributed to uncertain tax positions. Basic and Diluted Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss for the year by the weighted-average number of common shares outstanding during the year. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding and potentially dilutive securities outstanding for the period using the treasury stock or if-converted method if their inclusion is dilutive. Diluted net loss per common share is the same as basic net loss per common share, because the inclusion of potentially dilutive shares would be anti-dilutive to the calculation of loss and comprehensive loss per common share. Potentially anti-dilutive shares excluded from the calculation of diluted net loss per share for the years ended December 31, 2021 and 2022 includes stock options of 723,115 and 185,248 , respectively (after the application of the Exchange Ratio), in addition to the shares underlying the Convertible Notes. The Company is unable to quantify the number of shares underlying the Convertible Notes as the quantity of shares issuable upon conversion, as described in Note 6, is not determinable at this time. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In October 2021, the FASB issued ASU 2021-07, Compensation — Stock Compensation (Topic 718) Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses: Measurement of Credit Losses on Financial Instruments In August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
Property and Equipment, net
Property and Equipment, net | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Property and Equipment, net | 11. Property and Equipment, net Property and equipment, net consist of the following (in thousands): September 30, December 31, Useful Life 2023 2022 Land — $ 5,025 $ 5,025 Buildings 40 years 8,325 8,325 Furniture and fixtures 7 years 677 677 Lab equipment 5 years 4,003 4,003 Leasehold improvements Lesser of estimated useful life or related lease term 52 52 Office equipment 5 years 17 17 Vehicles 5 years 112 112 18,211 18,211 Less: Accumulated depreciation (3,541) (2,690) $ 14,670 $ 15,521 Depreciation expense related to property and equipment was $0.3 million for each of the three months ended September 30, 2023 and 2022, and $0.9 million for each of the nine months ended September 30, 2023 and 2022. | 3. Property and Equipment, net Property and equipment, net consist of the following (in thousands) as of December 31: December 31, Useful Life 2021 2022 Land — $ 5,025 $ 5,025 Buildings 40 years 8,311 8,325 Furniture and fixtures 7 years 677 677 Lab equipment 5 years 3,907 4,003 Leasehold improvements Lesser of estimated useful life or related lease term 52 52 Office equipment 5 years 17 17 Vehicles 5 years 112 112 18,101 18,211 Less: Accumulated depreciation (1,534) (2,690) $ 16,567 $ 15,521 Depreciation expense related to property and equipment was $1.1 million and $1.2 |
Additional Balance Sheet Inform
Additional Balance Sheet Information | 12 Months Ended |
Dec. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Additional Balance Sheet Information | 4. Additional Balance Sheet Information Prepaid expenses and other current assets consist of the following (in thousands) as of December 31: December 31, 2021 2022 Prepaid expenses $ 172 $ 133 Other receivables 67 67 Other current assets 22 4 Prepaid expenses and other current assets $ 261 $ 204 Accounts payable and accrued expenses consists of the following (in thousands) as of December 31: December 31, 2021 2022 Accounts payable $ 1,687 $ 975 Accrued liabilities 248 1,359 Employee compensation 240 291 Other 27 27 Accounts payable and accrued expenses $ 2,202 $ 2,652 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | ||
Fair Value Measurements | 9. Fair Value of Financial Instruments Fair Value Hierarchy Liabilities measured at fair value on a recurring basis as of September 30, 2023 are as follows (in thousands): Fair Value Measurements at Reporting Date Using Balance as of September 30, 2023 Level 1 (1) Level 2 Level 3 Private Warrants $ 1,841 $ — $ — $ 1,841 Working Capital Warrants 204 — — 204 Forward Purchase Derivative Liability 20,201 — — 20,201 PIPE Warrants (1) 10,210 — — 10,210 Total $ 32,456 $ — $ — $ 32,456 (1) As of September 30, 2023, the fair value of the PIPE Warrants was measured using its respective transaction price as described below. In future reporting periods, the PIPE Warrants will be valued using level three inputs. Liabilities measured at fair value on a non-recurring basis as of September 30, 2023 include the Senior Convertible Notes. The valuation of the Senior Convertible Notes was determined to be a level three fair value measurement. The Senior Convertible Notes were determined to be in-scope of ASC 470, Debt . Accordingly, this instrument will not be measured at fair value on a recurring basis as the fair value measurement of this instrument was for purposes of the relative fair value allocation described below as the Senior Convertible Notes were issued together with the SPA Warrants. Liabilities measured at fair value on a recurring basis as of December 31, 2022 are as follows (in thousands): Fair Value Measurements at Reporting Date Using Balance as of December 31, 2022 Level 1 Level 2 Level 3 2019 Convertible Notes $ 11,392 $ — $ — $ 11,392 2019 Related Party Convertible Notes 263 — — 263 Total $ 11,655 $ — $ — $ 11,655 Legacy Convertible Notes The following table presents a reconciliation of the Legacy Convertible Notes: 2019 Related 2023 Related 2019 Party 2023 Party Convertible Convertible Convertible Convertible Notes Notes Notes Notes Total Balance as of December 31, 2022 $ 11,392 $ 263 $ — $ — $ 11,655 Issuance — — 4,700 125 4,825 Change in fair value 2,359 44 371 10 2,784 Balance as of June 30, 2023 $ 13,751 $ 307 $ 5,071 $ 135 $ 19,264 Issuance — — 1,390 — 1,390 Change in fair value (1,276) (31) (423) (11) (1,741) Conversion and settlement (12,475) (276) (6,038) (124) (18,913) Balance as of September 30, 2023 $ — $ — $ — $ — $ — For each of the three and nine months ended September 30, 2022, the Company recognized $0.1 million of expense associated with the change in fair value for the 2019 Convertible Notes. For each of the three and nine months ended September 30, 2022, the Company recognized less than $0.1 million of expense associated with the change in fair value of the 2019 Related Party Convertible Notes. The Company historically determined the carrying amount of the Legacy Convertible Notes using a scenario-based analysis that estimates the fair value of the Legacy Convertible Notes based on the probability-weighted present value of expected future investment returns by measuring the fair value of similar debt instruments that do not have the conversion feature. If no similar debt instrument existed, fair value was estimated by using assumptions that market participants would use in pricing a debt instrument, including market interest rates, credit standing, yield curves and volatilities. The following unobservable assumptions were used in determining the fair value of the Legacy Convertible Notes as of December 31, 2022: Probability of conversion — Probability of holding until maturity without conversion — Remaining term until potential conversion trigger date (years) — Discount yield (1) 20.0 % (1) Estimated using a comparable bond analysis and under S&P Global Inc.’s credit rating scale using a multinominal logical regression. The fair value of Legacy Convertible Notes immediately prior to their conversion at Closing was based upon the fair value of the 2,278,598 shares of the Company’s common stock issued upon their conversion totaling $18.9 million, at a per share value of $8.30 based upon the fair value of the Company’s common stock at Closing, which was the conversion date. Senior Convertible Notes The Senior Convertible Notes were recognized at Closing on September 29, 2023. There was no activity with respect to Senior Convertible Notes between Closing and September 30, 2023. Additionally, as described above in this Note 9, the Senior Convertible Notes are not measured at fair value on a recurring basis. As such, a reconciliation of the Senior Convertible Notes is not presented as the stand-alone fair value at initial recognition of $12.9 million represents the stand-alone fair value at period-end. The Company determined the stand-alone fair value of the Senior Convertible Notes using a binomial lattice model, which generates a distribution of stock prices over the term of the note, calculates the associated payoff for the note, and discounts the probability-weighted values from the lattice back to the valuation date. The fair value was estimated by using assumptions that market participants would use in pricing a convertible debt instrument, including market interest rates, credit rating, yield curves, and volatilities. The following unobservable assumptions were used in determining the fair value of the Senior Convertible Notes: Credit spread (1) 12.1 % Equity volatility 45.0 % (1) Estimated using a comparable bond analysis and under S&P Global Inc.’s credit rating scale using a multinominal logical regression. Private Warrants and Working Capital Warrants The Private Warrants and Working Capital Warrants were recognized at Closing on September 29, 2023. There was no activity, including changes in fair value, with respect to Private Warrants and Working Capital Warrants between Closing and September 30, 2023. As such, a reconciliation of the Private Warrants and Working Capital Warrants is not presented as the fair value at initial recognition of $1.8 million and $0.2 million, respectively, represents the fair value at period-end. The terms of the Private Warrants and Working Capital Warrants are identical. Accordingly, the methodology and assumptions used to value these instruments is identical. The fair value of the Private Warrants and Working Capital Warrants were measured using a Black-Scholes model. The estimated fair value of the Private Warrants and Working Capital Warrants was determined using Level 3 inputs. Inherent in a Black-Scholes model are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its Private Warrants and Working Capital Warrants based on implied volatility from the Company’s traded Private Warrants and Working Capital Warrants and from historical volatility of select peer company’s common stock that matches the expected remaining life of the Private Warrants and Working Capital Warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the Private Warrants and Working Capital Warrants. The expected life of the Private Warrants and Working Capital Warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero . The following unobservable assumptions were used in determining the fair value of the Private Warrants and Working Capital Warrants: Private Warrants volatility 9.6 % Dividend yield (per share) — PIPE Warrants The PIPE Warrants were recognized at Closing on September 29, 2023. There was no activity, including changes in fair value, with respect to PIPE Warrants between Closing and September 30, 2023. As such, a reconciliation of the PIPE Warrants is not presented as the fair value at initial recognition of $10.2 million represents the fair value at period-end. As of September 30, 2023, the fair value of the PIPE Warrants was measured using its respective transaction price of $10.2 million for 10,209,994 PIPE Warrants at a purchase price of $1.00 per warrant. In future reporting periods, the PIPE Warrants will be valued using level three inputs. The Company determined that the transaction price of the PIPE Warrants represented its fair value because the Warrant Investors were not related parties or holders of economic interest with respect to the Company prior to their investment, the consideration transferred by the Warrant Investors was cash, the transaction was not a forced transaction, and the unit of account for the transaction and the PIPE Warrants is the same as there were no other instruments issued together with the PIPE Warrants to the Warrant Investors or their related parties and affiliates in connection with the Warrant Subscription Agreements. Forward Purchase Derivative Liability The forward purchase derivative liability was recognized at Closing on September 29, 2023. There was no activity, including changes in fair value, with respect to forward purchase derivative liability between Closing and September 30, 2023. As such, a reconciliation of the forward purchase derivative liability is not presented as the fair value at initial recognition of $20.2 million represents the fair value at period-end. The fair value of the forward purchase derivative liability was estimated using a Monte Carlo simulation approach. The Company’s common share price was simulated with daily time steps for a range of various possible scenarios. The breadth of all possible scenarios was captured in an estimate of volatility, based on comparable companies’ historical equity volatilities, considering differences in their capital structure. The simulated prices were compared against the settlement adjustment features of the Forward Purchase Agreements. Under each simulated scenario of future stock price, the Company calculated the value of the forward purchase derivative liability arrangement. The average value across this range of possible scenarios, discounted to present using the risk-free rate, was used as the fair value of the forward purchase derivative liability. The following unobservable assumptions were used in determining the fair value of the forward purchase derivative liability: Dividend yield 0.0 % Equity volatility 105.0 % Relative Fair Values The Senior Convertible Notes were issued together with the SPA Warrants. Each instrument was recorded at its fair value, limited to a relative fair value based upon the percentage of its fair value to the total fair value based on the transaction price of the Securities Purchase Agreement of $10.0 million at Closing on September 29, 2023. The relative fair value of the SPA Warrants was treated as a discount to the Senior Convertible Notes, which will be amortized to interest expense over the term of the Senior Convertible Notes. The stand-alone fair value at initial recognition and as of September 30, 2023 for the Senior Convertible Notes and SPA Warrants was $12.9 million and $0.4 million, respectively. The relative fair value at initial recognition and as of September 30, 2023 for the Senior Convertible Notes and SPA Warrants was $9.7 million and $0.3 million, respectively. | 5. Fair Value Measurements The Company accounts for the fair value of its financial instruments under the framework established by US GAAP which defines fair value and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The Company’s management used the following methods and assumptions to estimate the fair value of its financial instruments: Level 1 — Quoted prices in active markets for identical assets or liabilities the Company has the ability to access at the measurement date. Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of assets or liabilities. Level 3 — Pricing inputs that are unobservable, supported by little or no market activity and are significant to the fair value of the assets or liabilities. The carrying amounts of the Company’s financial assets and financial liabilities are considered to be representative of their respective fair values because of the short-term nature of those instruments. The Company does not measure assets at fair value on a recurring basis. Liabilities measured at fair value on a recurring basis are as follows (in thousands): Fair Value Measurements at Reporting Date Using Balance as of December 31, 2021 Level 1 Level 2 Level 3 2019 Convertible Notes $ 11,219 $ — $ — $ 11,219 Related Party Convertible Notes 259 — — 259 Total $ 11,478 $ — $ — $ 11,478 Fair Value Measurements at Reporting Date Using Balance as of December 31, 2022 Level 1 Level 2 Level 3 2019 Convertible Notes $ 11,392 $ — $ — $ 11,392 Related Party Convertible Notes 263 — — 263 Total $ 11,655 $ — $ — $ 11,655 The following table presents a reconciliation of the Convertible Notes, which are measured at fair value (in thousands) on a recurring basis using significant unobservable inputs (Level 3): 2019 Related Party Convertible Convertible Notes Notes Total Balance as of December 31, 2020 $ 10,807 $ 528 $ 11,335 Transfer from related party to unrelated party 270 (270) — Change in fair value 142 1 143 Balance as of December 31, 2021 11,219 259 11,478 Change in fair value 173 4 177 Balance as of December 31, 2022 $ 11,392 $ 263 $ 11,655 The Company determines the carrying amount of the Convertible Notes by measuring the fair value of similar debt instruments that do not have the conversion feature. If no similar debt instrument exists, fair value is estimated by using assumptions that market participants would use in pricing a debt instrument, including market interest rates, credit standing, yield curves and volatilities. Determining the fair value of the Convertible Notes requires the use of accounting estimates and assumptions. These estimates and assumptions are judgmental in nature and could have a significant impact on the determination of the debt, and the associated non-cash interest expense. The following assumptions were used in determining the fair value of the Convertible notes: As of December 31, 2021 2022 Probability of conversion 90 % — Probability of holding until maturity without conversion 10 % — Remaining term until potential conversion trigger date (years) 0.75 — Discount yield (1) 17 % 20 % (1) Estimated using a comparable bond analysis and under S&P Global Inc.’s credit rating scale using a multinominal logical regression. |
Debt
Debt | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Debt Disclosure [Abstract] | ||
Debt | 7. Debt Revolving Line of Credit In June 2023, the Company entered into a $5.0 million revolving line of credit agreement with a commercial bank with a one-year term and an interest rate based on the higher of (i) the one month secured overnight financing rate plus 2.85% or (ii) 7.50% . Issuance fees of $0.1 million were incurred in connection with this revolving line of credit. All outstanding balances under the revolving line of credit are due and payable on June 20, 2024. The revolving line of credit is secured by all of the Company’s assets, including a deed of trust over the Company’s owned real property located in Santa Ana, California. Additionally, the Company is required to maintain a restricted cash balance of $0.3 million following the issuance. The Company will be required to maintain deposits with the lender in an amount of at least $15.0 million at all times beginning December 31, 2023 until June 20, 2024 for as long as there is a debt balance outstanding. As of September 30, 2023, the interest rate for the revolving line of credit was 8.17% . Through September 30, 2023, the Company drew down $4.9 million upon the revolving line of credit and no repayments of drawdowns occurred. Interest expense of $0.1 million was incurred upon the revolving line of credit for each of the three and nine months ended September 30, 2023. As of September 30, 2023, $0.1 million in accrued interest was recognized for the revolving line of credit, which is classified to other current liabilities within the unaudited condensed consolidated balance sheet as of September 30, 2023. No interest expense was incurred for the revolving line of credit during each of the three and nine months ended September 30, 2022. Related Party Loans Between August 2019 and April 2023, the Company entered into related party loans with NKMAX (“ Related Party Loans ”). In December 2022, the then-outstanding aggregate Related Party Loans’ principal and interest of $66.1 million was converted into 17,002,230 shares of common stock which was recognized as a capital contribution as of and for the year ended December 31, 2022. From January through April 2023, the Company entered into additional Related Party Loans with NKMAX for aggregate gross proceeds of $5.0 million. These additional Related Party Loans bear an interest rate of 4.6% and mature on December 31, 2024. There are no financial or non-financial covenants associated with the Related Party Loans. The additional Related Party Loans are not convertible into equity. In connection with the Related Party Loans, interest expenses incurred were $0.1 million and $0.6 million for the three months ended September 30, 2023 and 2022, respectively, and $0.2 million and $1.7 million for the nine months ended September 30, 2023 and 2022, respectively. Related party interest payable amounts recorded to other current liabilities on the unaudited condensed consolidated balance sheets were $0.2 million and zero as of September 30, 2023 and December 31, 2022, respectively. Short Term Related Party Loan In September 2023, NKGen raised $0.3 million in proceeds in connection with a related party loan with a 30-day term and an interest rate of 5.12% (“ Short Term Related Party Loan ”). This related party loan was not convertible into equity and was repaid in cash on October 5, 2023. Related party interest payable amounts recorded to other current liabilities on the unaudited condensed consolidated balance sheets were less than $0.1 million and zero as of September 30, 2023 and December 31, 2022, respectively. Related party interest expense was less than $0.1 million for each of the three and nine months ended September 30, 2023, and zero for each of the three and nine months ended September 30, 2022. | 6. Debt Convertible promissory notes From November through December 2019, the Company issued the 2019 Convertible Notes and the Related Party Convertible Notes for total proceeds of $11.1 million. The Convertible Notes bear interest at 1.68% per year and in the event the Company consummates, while the Convertible Notes are outstanding, an equity financing pursuant to which it sells shares of its equity securities, with an aggregate sales price of not less than $20.0 million, excluding any and all indebtedness under the Convertible Notes that is converted into Company equity securities sold in a qualified financing (“Next Round Securities”), and with the principal purpose of raising capital, then all principal, together with all unpaid accrued interest under the Notes, shall automatically convert into shares of Next Round Securities at the lesser of (i) the price obtained by dividing $300.0 million by the number of outstanding shares of common stock of the Company immediately prior to the qualified financing (assuming conversion of all securities convertible into common stock and exercise of all outstanding options and warrants, but excluding the shares of equity securities of the Company issuable upon the conversion of the Convertible Notes or other indebtedness) and (ii) a discount to the cash price per share paid by the other purchasers of Next Round Securities in the qualified financing equal to for an investor that invests up to $1.0 million in Convertible Notes: 20%, and for an investor that invests more than $1.0 million and less than $5.0 million in Convertible Notes: 25%. There are no financial or non-financial covenants associated with the Convertible Notes. The principal amounts of the Convertible Notes are due on demand as of December 31, 2022. Paycheck Protection Program Loan In May 2020, the Company received loan proceeds of $1.1 million pursuant to the Paycheck Protection Program (“PPP”). The PPP, established as part of the CARES Act, provides loans for small businesses to cover qualified payroll costs, rent, utilities, and interest on mortgage and other debt obligations. The loan has an interest rate of 1%. The loan was paid off in May 2022. The Company recorded interest expense of less than $0.1 million and $0.1 million related to the PPP loan to interest expense in the Statements of Operations and Comprehensive Loss for the years ended December 31, 2021 and 2022, respectively. |
Related-Party Transactions
Related-Party Transactions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Related Party Transactions [Abstract] | ||
Related-Party Transactions | 8. Related-Party Transactions Founder Shares Contemporaneously with the execution of the Merger Agreement, Graf and NKGen entered into an amended and restated sponsor support and lockup agreement (“ Amended and Restated Sponsor Support and Lockup Agreement ”). In connection with the Amended and Restated Sponsor Support and Lockup Agreement, of the 4,290,375 shares of Graf formerly held by Graf’s sponsor and insiders (“ Founder Shares ”): (i) 1,773,631 shares were forfeited, (ii) 1,173,631 shares became restricted shares subject to vesting conditions (“ Deferred Founder Shares ”), and (iii) the remaining 1,343,113 shares are subject to trading restrictions for up to two years and continued to be outstanding and fully vested shares. Deferred Founder Shares do not have voting rights, do not participate in dividends and are not transferrable. During the vesting period of five years from Closing (“ Vesting Period ”), if the trading price or price per share consideration upon a change in control for Common Stock is greater than or equal to $14.00 at any 20 trading days in a 30 consecutive trading-day period, then 873,631 Deferred Founder Shares will immediately vest; and if greater than or equal to $20.00 at any 20 trading days in a 30 consecutive trading-day period, then an additional 300,000 Deferred Founder Shares will immediately vest. In the event there is a sale of the Company, then immediately prior to the consummation of such sale, the calculated Acquiror Sale Price, as defined in the agreement, will take into account the number of Deferred Founder Shares that will vest upon a change in control. Upon the expiration of the Vesting Period, unvested Founder Shares will be forfeited and cancelled for no consideration. All Founder Shares, including Deferred Founder Shares, are equity classified primarily due to terms indexed to the Company’s own stock, including upon a change in control. Related Party Financial Instruments The Company’s related party financial instruments include (i) the Founder Shares, including Deferred Founder Shares described above in this Note 8, (ii) the SPA Warrants described in Note 5, (iii) the Working Capital Warrants described in Note 5, (iv) the Senior Convertible Notes described in Note 6, (v) select Legacy Convertible Notes described in Note 6, (vi) the Related Party Loans described in Note 7, (vii) the Short Term Related Party Loan described in Note 7, and (viii) the Private Warrants described in Note 5. Advisory and research services The Company was provided professional clinical program advisory services from Paul Song, prior to his hiring as Chief Executive Officer in December 2022. No such services were provided to or incurred by the Company during the three and nine months ended September 30, 2023. For the three and nine months ended September 30, 2022, $0.1 million and $0.3 million, respectively, in research and development expenses related to these advisory services were recorded. As of December 31, 2022, amounts payable of less than $0.1 million relating to advisory and research services from related parties remained outstanding, which were recorded to accounts payable and accrued expenses on the unaudited condensed consolidated balance sheet. As of September 30, 2023, no amounts payable remained outstanding relating to advisory and research services from related parties. Purchases of laboratory supplies For each of the three and nine months ended September 30, 2023, the Company recorded research and development expenses of $0.4 million associated with the purchase of laboratory supplies from NKMAX. For each of the three and nine months ended September 30, 2022, the Company recorded research and development expenses of $0.1 million associated with the purchase of laboratory supplies from NKMAX. As of September 30, 2023, $0.4 million remained outstanding relating to the purchase of laboratory supplies from NKMAX. As of December 31, 2022, amounts payable of $0.1 million relating to the purchase of laboratory supplies from NKMAX remained outstanding, which were recorded to accounts payable and accrued expenses on the unaudited condensed consolidated balance sheet. | 7. Related-Party Transactions Advisory and research services The Company was provided professional clinical program advisory services from Paul Song, prior to his hiring as Chief Executive Officer in December 2022. For the year ended December 31, 2021, no research and development expenses related to these advisory services were provided or recorded. For the year ended December 31, 2022, the Company recorded $0.4 million of research and development expenses related to these advisory services. As of December 31, 2022, amounts payable of less than $0.1 million remained outstanding and recorded within accounts payable and accrued expenses on the balance sheet. The Company receives scientific research consulting services from ATGEN Canada, a sister company under common ownership. For the year ended December 31, 2021, the Company recorded $0.2 million of research and development expenses for services provided by ATGEN Canada. For the year ended December 31, 2022, no research and development expenses related to these services were provided or recorded. As of December 31, 2021 and 2022, there were no outstanding amounts payable relating to these professional research services. Purchases of laboratory supplies For the years ended December 31, 2021 and 2022, the Company recorded research and development expenses totaling $0.1 million and $0.1 million, respectively, associated with the purchase of laboratory supplies from NKMAX. As of December 31, 2021 and December 31, 2022, there was zero and less than $0.1 million outstanding payables, respectively, relating to the purchase of laboratory supplies, which is recorded within accounts payable and accrued expenses on the balance sheets. Related party loans Between August 2019 and December 2022, the Company entered into multiple loan agreements with NKMAX under which the total proceeds received from related parties during the years ended December 31, 2021 and 2022 were $20.5 million and $23.0 million, respectively. The loans carry an interest rate of 4.6%. There are no financial or non-financial covenants associated with the debt. In December 2022, the aggregate outstanding related party loan principal and interest of $66.1 million was converted into 6,943,789 shares of common stock (after the application of the Exchange Ratio) which has been recognized as a capital contribution within the statements of common stock and stockholders’ equity (deficit). No related party loan amounts were outstanding as of December 31, 2022. Interest expenses incurred were $1.3 million and $2.3 million for the years ended December 31, 2021 and 2022, respectively. As of December 31, 2021 and 2022, interest payable amounts owed to related parties was $1.9 million and zero, respectively, which is recorded in other current liabilities on the balance sheets. Convertible promissory notes due to related parties In connection with the issuance of certain Convertible Notes from November 2019 to December 2019, relatives of one of the Company’s directors invested in convertible promissory notes totaling $0.5 million. As of December 31, 2021, the principal amount and the fair value of Related Party Convertible Notes held by relatives of a director of the Company were $0.3 million. As of December 31, 2022, the principal amount and related fair value of the Related Party Convertible Notes held by relatives of a director of the Company were $0.3 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | 14. Commitments and Contingencies Leases In February 2018, the Company entered into an operating lease agreement for office space located in 10 Pasteur, Irvine with a lease term of approximately five years . Rent payments commenced in February 2018. The lease expired on February 5, 2023. In October 2021, the Company entered into an operating lease agreement for office space located in 19700 Fairchild with a lease term of approximately two years with an option to extend the term for one two-year term, which at the time was not reasonably assured of exercise and therefore, not included in the lease term. Rent payments commenced in December 2021. The lease expires on December 31, 2023. As of September 30, 2023, the Company recorded an aggregate right of use asset of $1.1 million with an accumulated amortization of $1.0 million in the condensed balance sheet as operating lease right-of-use asset, net, and an aggregate lease liability of $0.1 million in the condensed balance sheet as operating lease liability, current. As of September 30, 2023, the weighted-average remaining lease term was less than one year , and the weighted-average estimated incremental borrowing rate was 6.00% . As of September 30, 2023, total undiscounted lease payments were $0.1 million, which are committed to be made during 2023. License Agreements The Company has entered into exclusive license agreements with NKMAX, as amended in October 2021, April 2023 and August 2023 (“ Intercompany License ”), pursuant to which the Company acquired certain intellectual property. Pursuant to each license agreement, as consideration for an exclusive license to the intellectual property, the Company paid an upfront fee of $1.0 million (“ Licensed Technology ”). As the license has no alternative future use, the Company recognized the upfront fee as research and development expense in the statement of operations during the year ended December 31, 2020. Additionally, the Company is also required to pay one-time milestone payments for the first receipt of regulatory approval by the Company or any of its affiliates for a Licensed Technology in the following jurisdictions (and amounts): the United States ( $5.0 million), the European Union (“ EU ”) ( $4.0 million), and four other countries ( $1.0 million each ). The Company is obligated to pay a mid-single digit royalty on net sales of Licensed Technology by it, its affiliates or its sublicensees, subject to customary reductions. The Company is also required to pay a percentage of its sublicensing revenue ranging from a low double-digit percentage to a midsingle digit percentage. As of September 30, 2023, the Company has not paid any milestone payments and no sales of Licensed Technology have occurred. Litigation The Company is subject to legal proceedings and claims, which arise in the ordinary course of business. The Company is not subject to any currently pending legal matters or claims that would have a material adverse effect on its financial position, results of operations or cash flows. In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future but have not yet been made. The Company accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. No amounts were accrued as of September 30, 2023 and December 31, 2022. | 8. Commitments and Contingencies Leases As of December 31, 2021, the Company recorded an aggregate ROU asset of $0.8 million with an aggregate accumulated amortization of $0.3 million in the balance sheet as operating lease right-of-use assets, net, and an aggregate lease liability of $0.8 million in the balance sheet as operating lease liability, of which $0.5 million was classified as current and $0.4 million was classified as noncurrent. As of December 31, 2021, the weighted-average remaining lease term is 1.7 years and the weighted-average estimated incremental borrowing rate is 5.5%. As of December 31, 2022, the Company recorded an aggregate ROU asset of $1.1 Maturities of the operating lease liability as of December 31, 2022 are as follows (in thousands): Minimum lease payments 2023 $ 412 Total undiscounted lease payments 412 Less: imputed interest (33) Total operating lease liability $ 379 As of December 31, 2021, the Company incurred operating cost of $0.3 million, of which $0.2 million was attributable as fixed cost and less than $0.1 million was attributable as variable cost. As of December 31, 2022, the Company incurred operating cost of $0.3 million, of which $0.2 million was attributable as fixed cost and less than $0.1 million was attributable as variable cost. License Agreements The Company has entered into exclusive license agreements with NKMAX, as amended in October 2021, April 2023 and August 2023 (“Intercompany License”), pursuant to which the Company acquired certain intellectual property. Pursuant to each license agreement, as consideration for an exclusive license to the intellectual property, the Company paid an upfront fee of $1.0 million (“Licensed Technology”). As the license has no alternative future use, the Company recognized the upfront fee as research and development expense in the statement of operations during the year ended December 31, 2020. Additionally, under each agreement, the Company shall make milestone payments to NKMAX after the first receipt of Regulatory Approval of a licensed product (“Licensed Product”) in the applicable country by the Company or any of its affiliates of $5.0 million in United States of America, $4.0 million in the European Union (“EU”) and $1.0 million in any country other than United States of America or the EU for up to four additional countries. The Company shall also pay a mid-single digit fee on the net sales of Licensed Products, the manufacture, use or sale of which are claimed by or use any Licensed Technology. As of December 31, 2022, the Company has not paid any milestone payments and no sales of Licensed Products have occurred. Litigation The Company is subject to legal proceedings and claims, which arise in the ordinary course of business. The Company is not subject to any currently pending legal matters or claims that would have a material adverse effect on its accompanying financial position, results of operations or cash flows. In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future but have not yet been made. The Company accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. No amounts were accrued as of December 31, 2021 and 2022. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Stockholders' Equity | ||
Stockholders' Equity | 10. Stockholders’ Equity Reverse Recapitalization As described in Note 2, Summary of Significant Accounting Policies , all historical equity data, including stock option data, in these unaudited condensed consolidated financial statements has been retrospectively adjusted by the Exchange Ratio to reflect the reverse recapitalization that occurred on September 29, 2023. Common Stock As of September 30, 2023, the Company had authorized 500,000,000 shares of common stock, par value $0.0001 per share. As of September 30, 2023, 21,888,976 shares of common stock were issued and outstanding , and 478,111,024 shares of common stock were reserved for future issuance. Preferred Stock As of September 30, 2023, the Company had authorized 10,000,000 shares of preferred stock, par value $0.0001 . As of September 30, 2023, zero shares of preferred stock were issued or outstanding . Employee Stock Purchase Plan Upon consummation of the Business Combination, the Company adopted an employee stock purchase plan (“ ESPP ”). The maximum number of shares of the Company’s common stock that may be issued under the ESPP is 3% of the fully diluted common stock of the Company, determined as of immediately following Closing. Such maximum number of shares is subject to automatic annual increases. The Company’s employees and the employees of any designated affiliates may participate in the ESPP. The purchase price of the ESPP shares is 85% of the lesser of the fair market value of the Company’s common stock on the first day of an offering or on the applicable date of purchase. As of September 30, 2023, there were no transactions with respect to the ESPP. 2023 Plan Upon consummation of the Business Combination, the Company adopted the 2023 equity incentive plan (“ 2023 Plan ”). The maximum number of shares of common stock that may be issued under the 2023 Plan is 12% of the fully diluted common stock of the Company, determined as of immediately following Closing. Such maximum number of shares is subject to automatic annual increases. Under the 2023 Plan, restricted shares and stock options with service or performance based conditions may be granted to employees and nonemployees. Upon the effective date of the 2023 Plan, the Company may not grant any additional awards under the 2019 Plan. As of September 30, 2023, no awards were granted under the 2023 Plan. 2019 Plan The Company’s 2019 Plan (“ 2019 Plan ”) became effective on October 23, 2019. The 2019 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock unit awards and performance share awards to employees, directors, and consultants of the Company. As of September 30, 2023, the Company has only issued stock options. Stock options granted under the 2019 Plan expire no later than ten years from the date of grant and generally vest over a four-year period, with vesting occurring at a rate of 25% at the end of the first and thereafter in 36 equal monthly installments, or in the case of awards granted to board members, on a monthly basis over three or four years . In general, vested options expire if not exercised within three months after termination of service. The fair value of each employee and non-employee stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Due to the Company’s limited operating history and a lack of company-specific historical and implied volatility data, the Company estimated expected volatility based on the historical volatility of a group of similar companies that are publicly traded. The historical volatility data was computed using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards. Due to the lack of historical exercise history, the expected term of the Company’s stock options for employees has been determined utilizing the “simplified” method for awards. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The expected dividend yield is zero since the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. A summary of the Company’s stock option activity for the nine months ended September 30, 2023 is as follows: Stock Options Weighted Average Outstanding Exercise Price Outstanding as of December 31, 2022 185,231 $ 1.37 Granted 2,173,693 6.67 Forfeited (244,298) 6.61 Exercised (12,866) 1.73 Outstanding as of September 30, 2023 2,101,760 $ 6.25 The weighted average assumptions used in the Black-Scholes option pricing model to determine the fair value of stock option grants for the nine months ended September 30, 2023 were as follows: Common stock fair value $ 9.18 Risk-free interest rate 3.53 % Expected volatility 111.00 % Expected term (in years) 6.08 Expected dividend yield 0.00 % Stock options outstanding, vested and expected to vest and exercisable as of September 30, 2023 are as follows: Weighted Average Total Number of Remaining Weighted- Aggregate Stock Contractual Average Intrinsic Value Options Life (Years) Exercise Price (in thousands) Outstanding as of December 31, 2022 185,231 6.98 $ 1.37 $ 980 Outstanding as of September 30, 2023 2,101,760 9.10 $ 6.25 $ 4,318 Vested and expected to vest as of September 30, 2023 2,101,760 9.10 $ 6.25 $ 4,318 Exercisable as of September 30, 2023 268,236 7.48 $ 3.40 $ 1,315 Intrinsic value is calculated as the difference between the exercise price of the underlying options and the estimated fair value of the common stock for the options that had exercise prices that were lower than the per share fair value of the common stock on the related measurement date. The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2023 was $0.1 million. The aggregate fair value of stock options vested during the nine months ended September 30, 2023 was $0.9 million. As of September 30, 2023, the total unrecognized stock-based compensation related to unvested stock option awards granted was $14.6 million, which the Company expects to recognize over a remaining weighted- average period of approximately 3.2 years. Stock-based compensation expense, recognized in the Company’s condensed statements of operations and comprehensive loss for the 2019 Plan was recorded as follows (in thousands): Three Months Ended Nine Months Ended September 30 September 30 2023 2022 2023 2022 Research and development $ 197 $ 11 $ 735 $ 34 General and administrative 770 5 2,472 20 Total stock-based compensation expense $ 967 $ 16 $ 3,207 $ 54 | 9. Stockholders’ Equity Reverse Recapitalization As described in Note 2, Summary of Significant Accounting Policies , all historical equity data, including stock option data, in these financial statements has been retrospectively adjusted by the Exchange Ratio to reflect the reverse recapitalization that occurred on September 29, 2023. Common Stock As of December 31, 2021 and 2022, the Company had authorized 500,000,000 shares of common stock, par value $0.0001 per share. As of December 31, 2021 and 2022, 5,873,711 and 13,303,795 shares of common stock were issued and outstanding, respectively. As of December 31, 2021 and 2022, 494,126,289 and 486,696,205 shares of common stock were reserved for future issuance, respectively. Equity Incentive Plans The Company’s 2019 Plan (“2019 Plan”) became effective on October 23, 2019. The 2019 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock unit awards and performance share awards to employees, directors, and consultants of the Company. As of December 31, 2022, the Company has only issued stock options. The 2019 Plan authorized up to 2,780,000 shares to be issued under the plan as of December 31, 2022. As of December 31, 2022, the Company had issued 867,572 stock options under the 2019 Plan. As of December 31, 2022, a total of 266,668 shares remained available for future issuance under the 2019 Plan. Stock options granted under the 2019 Plan expire no later than ten years from the date of grant and generally vest over a four-year period, with vesting occurring at a rate of 25% at the end of the first and thereafter in 36 equal monthly installments, or in the case of awards granted to board members, on a monthly basis over three The fair value of each employee and non-employee stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Due to the Company’s limited operating history and a lack of company-specific historical and implied volatility data, the Company estimated expected volatility based on the historical volatility of a group of similar companies that are publicly traded. The historical volatility data was computed using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards. Due to the lack of historical exercise history, the expected term of the Company’s stock options for employees has been determined utilizing the “simplified” method for awards. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The expected dividend yield is zero since the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. A summary of the Company’s stock option activity for the years ended December 31, 2021 and 2022 is as follows: Stock Options Weighted Average Outstanding Exercise Price Outstanding as of December 31, 2020 1,034,074 $ 1.00 Exercised (191,020) 0.34 Forfeited (119,939) 3.28 Outstanding as of December 31, 2021 723,115 $ 0.81 Exercised (486,296) 0.34 Forfeited (51,588) 2.11 Outstanding as of December 31, 2022 185,231 $ 1.37 There were no stock options granted during the years ended December 31, 2021 and 2022. Stock options outstanding, vested and expected to vest and exercisable as of December 31, 2021 and 2022 are as follows: Weighted Total Average Weighted- Aggregate Remaining Average Intrinsic Number of Contractual Exercise Value Stock Options Life (Years) Price (in thousands) Outstanding as of December 31, 2021 723,115 7.79 $ 0.81 $ 3,674 Outstanding as of December 31, 2022 185,231 6.98 $ 1.37 $ 980 Vested and expected to vest as of December 31, 2022 185,231 6.98 $ 1.37 $ 980 Exercisable as of December 31, 2022 146,053 6.94 $ 1.13 $ 807 Intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value of the common stock for the options that had exercise prices that were lower than the per share fair value of the common stock on the date of exercise. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2021 and 2022 was $0.1 million and $3.1 million, respectively. The aggregate fair value of stock options vested during the years ended December 31, 2021 and 2022 was $0.3 million and $0.6 million, respectively. As of December 31, 2022, the total unrecognized stock-based compensation related to unvested stock option awards granted was $0.1 million, which the Company expects to recognize over a remaining weighted-average period of approximately 1.1 years. Stock-based compensation expense, recognized in the Company’s statements of operations for the 2019 Plan was recorded as follows for the years ended December 31, 2021 and 2022 (in thousands): Years Ended December 31, 2021 2022 Research and development $ 44 $ 45 General and administrative 49 24 Total stock-based compensation expense $ 93 $ 69 |
Collaboration Agreement
Collaboration Agreement | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Collaboration Agreement | ||
Collaboration Agreement | 13. Collaboration Agreement On September 17, 2020, the Company entered into a strategic collaboration with Affimed GmbH (“ Affimed ”) to initiate a Phase 1/2 trial of SNK01 in combination with AFM24, a tetravalent biologic created by Affimed designed to direct NK cell killing of epidermal growth factor receptor (“ EGFR ”) expressing tumors. Under the collaboration agreement, the Company and Affimed split the development costs of the combination product equally. The study associated with the strategic collaboration with Affimed was discontinued by mutual agreement in June 2023. Total reductions to research and development expenses for the three months ended September 30, 2023 and 2022 were $0.2 million and less than $0.1 million, respectively. Total reductions to research and development expenses for the nine months ended September 30, 2023 and 2022 were $0.2 million and $0.4 million, respectively. | 10. Collaboration Agreement On September 17, 2020, the Company entered into a strategic collaboration with Affimed GmbH (“Affimed”) to initiate a Phase 1/2 trial of SNK01 in combination with AFM24, a tetravalent biologic created by Affimed designed to direct NK cell killing of epidermal growth factor receptor (“EGFR”) expressing tumors. Under the collaboration agreement, the Company and Affimed split the development costs of the combination product equally. Total reductions to research and development expenses for each of the years ended December 31, 2021 and 2022 were $0.4 million. |
Income Taxes
Income Taxes | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income Taxes | 15. Income Taxes The Company is subject to taxation in the U.S. and various state jurisdictions. The Company is not subject to taxation in foreign countries. The Company’s effective tax rate is calculated quarterly based upon current assumptions relating to the full year’s estimated operating results and various tax-related items. Each quarter, an estimate of the annual effective tax rate is updated should we revise our forecast of earnings based upon our operating results. If there is a change in the estimated effective annual tax rate, a cumulative adjustment is made. The Company’s effective tax rate was 0% for each of the three and nine months ended September 30, 2023 and 2022. The difference between the effective tax rate of 0% and the U.S. federal statutory rate of 21% for each of the three and nine months ended September 30, 2023 and 2022 was primarily due to changes in deferred tax balances, partially offset by valuation allowances. As of September 30, 2023 and 2022, we determined that, based on an evaluation of our history of net losses and all available evidence, both positive and negative, including our latest forecasts and cumulative losses in recent years, it was more likely than not that none or substantially none of our deferred tax assets would be realized and, therefore, we continued to record a valuation allowance. | 11. Income Taxes The Company is subject to taxation in the U.S. and various state jurisdictions. The Company is not subject to taxation in foreign countries. The provision for income taxes for the years ended December 31, 2021 and 2022 are as follows (in thousands): Years Ended December 31, 2021 2022 Current: Federal $ — $ — State — — Deferred: Federal 5 7 State — — Provision for income taxes $ 5 $ 7 A reconciliation of the income tax computed at federal statutory income tax rate to the reported provision for income taxes is as follows (in thousands): Years Ended December 31, 2021 2022 Tax benefit at statutory federal rate $ (4,885) $ (5,618) State tax, net of federal tax benefit (1,500) (1,694) Interest expense 274 477 Increase in valuation allowance 6,993 7,908 Permanent items 30 37 General business tax credit (923) (1,098) Other 16 (5) Provision for income taxes $ 5 $ 7 Significant components of the Company’s deferred income taxes are as follows (in thousands): December 31, 2021 2022 Deferred tax assets: Net operating losses $ 14,380 $ 17,890 Tax credit carryforwards, net 2,191 3,285 Accrued expenses 52 347 Section 174 R&E capitalization — 2,847 Lease liability 229 106 Stock-based compensation 15 20 Total deferred tax assets 16,867 24,495 Deferred tax liabilities: Operating lease right-of-use asset (224) (101) Property and equipment (745) (595) Total deferred tax liabilities (969) (696) Net deferred tax assets 15,898 23,799 Less: Valuation allowance (15,917) (23,825) Net deferred tax liability $ (19) $ (26) Realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Due to the lack of earnings history, the deferred tax assets have been offset by a valuation allowance net of reversing deferred tax liabilities that provided for a source of future taxable income. The valuation allowance increased by approximately $7.0 million and $7.9 million for the years ended December 31, 2021 and 2022, respectively. The Company has net operating loss carryforwards for federal and state income tax purposes of approximately $61.3 million and $71.6 million, respectively, as of December 31, 2022. Under the Tax Act and Jobs Act of 2017, the $61.3 million of federal net operating losses generated after December 31, 2017 will be carried forward indefinitely. The California net operating loss carryforwards will begin to expire in 2037 unless previously utilized. As of December 31, 2022, the Company also had federal and California research and development tax credit carryforward of approximately $2.2 million and $1.8 million, respectively. The federal research and development credit carryforwards will begin to expire in 2038. The California research and development credit carryforwards are available indefinitely. Federal and California tax laws impose significant restrictions on the utilization of net operating loss carryforwards in the event of a change in ownership of the Company, as defined by Internal Revenue Code Sections 382 and 383. The Company has not completed a formal study to determine the limitations on their tax attributes due to change in ownership and may have limitations on the utilization of net operating loss carryforwards, credit carryforwards, or other tax attributes due to ownership changes. The Inflation Reduction Act of 2022 (“IRA”) which incorporates a Corporate Alternative Minimum Tax (CAMT) was signed on August 16, 2022. The changes will be effective for the tax years beginning after December 31, 2022. The new tax law will require companies to compute two separate calculations for federal income tax purposes and pay the greater of the new minimum tax or their regular tax liability. The IRA is not expected to have a material impact for the Company. Under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act signed into law on March 27, 2020, net operating losses (“NOLs”) arising in tax years beginning after December 31, 2017, and before January 1, 2021 may be carried back to each of the five tax years preceding the tax year of such loss. Moreover, under the Tax Act as modified by the CARES Act, federal NOLs of the Company’s corporate subsidiaries generated in tax years ending after December 31, 2017 may be carried forward indefinitely, but the deductibility of federal NOLs, particularly for tax years beginning on or after January 1, 2021, may be limited. The Company is currently assessing the impact the CARES Act will have on the Company’s financial statements. Uncertain Tax Benefits No liability related to uncertain tax positions is recorded on the financial statements. The following table summarizes the activity related to the Company’s unrecognized tax benefits for the year ended December 31 (in thousands): Years Ended December 31, 2021 2022 Beginning balance $ 156 $ 269 Additions for tax positions related to the current year 113 131 Reductions for tax positions related to prior years — 3 Ending balance $ 269 $ 403 The reversal of uncertain tax benefits would not affect the effective tax rate to the extent that the Company continues to maintain a valuation allowance against its deferred tax assets. The Company does not anticipate any significant changes to unrecognized tax benefits over the next 12 months. Income tax returns are filed in the United States and California. The Company is not currently under audit by the Internal Revenue Service and the State of California. The years 2019 and forward remain open to examination for federal income tax purposes and the years 2018 and forward for California income tax to which the Company is subject. Due to net operating loss carryforwards, all years effectively remain open to income tax examination by the domestic taxing jurisdictions in which the Company files tax returns. The Company’s practice is to recognize interest and penalties related to income tax matters in income tax expense. For the years ended December 31, 2021 and 2022 the Company has not recognized any interest or penalties related to income tax in the Company’s statements of operations. |
Subsequent Events
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Subsequent Events [Abstract] | ||
Subsequent Events | 16. Subsequent Events Short Term Related Party Loan The Company’s $0.3 million Short Term Related Party Loan was repaid in full on October 5, 2023. | 12. Subsequent Events Amendment to the 2019 Plan and Stock Option Grants In February 2023, the Company amended its 2019 Plan to increase the aggregate number of shares of Common Stock reserved from 2,780,000 shares to 8,723,922 shares. From January 1, 2023 through May 15, 2023, the Company issued a total of 5,322,456 options to purchase common stock at an exercise price of $2.72 per share. Immediately following the issuance, a total of 1,770,389 shares remained available for future issuance under the 2019 Plan. 2023 NKMAX Loans From January through April 2023, NKGen entered into additional loan agreements with NKMAX for aggregate gross proceeds of $5.0 million. The terms of the loans included a 4.6% interest rate and a maturity date of December 31, 2024. Business Combination On April 14, 2023, the board of directors of Graf Acquisition Corp. IV, a Delaware corporation (“Graf,”), unanimously approved the Agreement and Plan of Merger, dated April 14, 2023, by and among Graf, Austria Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Graf (“Merger Sub”), and the Company (as it may be amended and/or restated from time to time, the “Merger Agreement”). If the Merger Agreement is adopted by Graf’s stockholders and the transactions under the Merger Agreement are consummated (the “Business Combination”), Merger Sub will merge with and into the Company with the Company surviving the merger as a wholly owned subsidiary of Graf (the “Merger”). In connection with the consummation of the Business Combination (the “Closing” and the date of the Closing, the “Closing Date”), Graf will be renamed “NKGen Biotech, Inc.” and the Company will change its name to “NKGen Operating Biotech, Inc.” References below to “New NKGen” denote Graf as the post-Business Combination entity. In accordance with the terms and subject to the conditions set forth in the Merger Agreement, Graf has agreed to pay to equity holders of the Company (other than holders of unvested NKGen options to purchase shares of common stock of NKGen (“NKGen options”) as of immediately prior to the effective time of the Merger (the “Effective Time”) aggregate consideration (the “Merger Consideration”) of a number of shares of newly issued common stock, par value $0.0001 per share, of New NKGen (“Common Stock”), valued at $10.00 per share, equal to the product of the number of outstanding shares of common stock of the Company (“NKGen common stock”) at the Closing, multiplied by the Exchange Ratio. The “Exchange Ratio” is equal to the quotient of (A) the sum of (i) $145.0 million plus (ii) the aggregate amount of principal and accrued interest underlying convertible promissory notes of NKGen (“NKGen Convertible Notes”) that are converted into shares of the Company common stock as of immediately prior to the effective time of the Merger (the “Effective Time”), divided by (B) $10.00, divided by (C) the number of Fully Diluted common stock of the Company (as defined below) immediately prior to the Effective Time. Prior to the Closing, the Company will use its commercially reasonable efforts to cause each convertible note to be converted into shares of NKGen common stock pursuant to its terms as of immediately prior to the Effective Time. Additionally, at the Effective Time, each outstanding and unexercised stock option of the Company will be cancelled and converted into an option to acquire Common Stock (“New NKGen Options”), provided that: (i) each such New NKGen Option shall be exercisable for that number of shares of Common Stock equal to the product (rounded down to the nearest whole number) of (A) the number of shares of NKGen common stock subject to such NKGen Option immediately prior the Effective Time multiplied by (B) the Exchange Ratio, and (ii) the per share exercise price for each share of Common Stock issuable upon exercise of the New NKGen Option shall be equal to the quotient (rounded up to the nearest whole cent) obtained by dividing (A) the exercise price per share of each NKGen Option immediately prior to the Effective Time by (B) the Exchange Ratio. 2023 Convertible Notes From March through May 15, 2023, the Company issued convertible promissory notes to investors for total proceeds of $4.1 million, of which $0.1 million was issued to a related party (the “2023 Convertible Notes”). The 2023 Convertible Notes bear interest at 4.55% per year and in the event the Company consummates, while the 2023 Convertible Notes are outstanding, an equity financing pursuant to which it sells shares of its equity securities, with an aggregate sales price of not less than $20.0 million in a qualified financing of Next Round Securities, excluding any and all indebtedness under the 2023 Convertible Notes that is converted into Next Round Securities, and with the principal purpose of raising capital, then all principal, together with all unpaid accrued interest under the 2023 Convertible Notes, shall automatically convert into shares of Next Round Securities at the lesser of (i) the price obtained by dividing (A) $300.0 million by (B) the number of outstanding shares of common stock of the Company immediately prior to the qualified financing (assuming conversion of all securities convertible into common stock and exercise of all outstanding options and warrants, but excluding the shares of equity securities of the Company issuable upon the conversion of the 2023 Convertible Notes or other indebtedness) and (ii) a discount to the cash price per share paid by the other purchasers of Next Round Securities in the qualified financing equal to for an investor that invests up to $5.0 million in the 2023 Convertible Notes: 15%, and for an investor that invests more than $5.0 million and less than $10.0 million in Notes: 20%, and for an investor that invests more than $10.0 million in 2023 Convertible Notes: 25%. The maturity dates of the 2023 Convertible Notes are three years from the respective issuance dates. Modification to the Convertible Notes In April 2023, the Company (i) modified the Convertible Notes to extend the maturity date to December 31, 2023 and (ii) modified the Convertible Notes and the 2023 Convertible Notes to provide that upon the closing of a transaction such as the Business Combination, the Convertible Notes and 2023 Convertible Notes will, immediately prior to the closing of such transaction, convert into the Company’s common stock at a conversion price equal to (a) the value ascribed to the consideration to be paid in respect of one share Amendment to NKMAX License In April 2023, the Company and NKMAX executed an amendment to the Intercompany License to expand the scope of Licensed Products initially limited to cancer treatment to any field of use. 13. Subsequent Events (unaudited) Additional 2023 Convertible Notes On May 19, 2023, the Company issued additional 2023 Convertible Notes for total proceeds of $0.8 million with the same terms as set forth above for the 2023 Convertible Notes issued from March through May 15, 2023. In August and September 2023, NKGen issued additional convertible notes of $1.4 million to investors. The terms of the additional convertible notes issued in August and September 2023 are consistent with those set forth for the 2023 Convertible Notes in Note 6. Revolving Line of Credit In June 2023, the Company entered into a $5.0 million revolving line of credit agreement with a commercial bank with a one-year term and an interest rate based on the higher of (i) the one month secured overnight financing rate plus 2.85% or (ii) 7.50%. Issuance fees of $0.1 million were incurred in connection with this revolving line of credit. The revolving line of credit is secured by all of the Company’s assets, including a deed of trust over the Company’s owned real property located in Santa Ana, California. Additionally, the Company is required to maintain a restricted cash balance of $0.3 million following the issuance. In June 2023, the Company executed a draw of $3.8 million on this revolving line of credit. In July 2023, the Company executed an additional draw of $1.1 million upon the revolving line of credit. On September 19, 2023, the minimum deposit requirement under the revolving line of credit was modified such that NKGen will be required to maintain the $15.0 million minimum deposits beginning as of December 31, 2023. No repayments of draws occurred through October 19, 2023. Collaboration Agreement The study associated with the strategic collaboration with Affimed was discontinued by mutual agreement in June 2023. Amendment to NKMAX License In August 2023, the Company and NKMAX executed an amendment to the Intercompany License to clarify that the Company shall not be responsible for certain fees or costs previously paid or incurred by NKMAX. Short Term Related Party Loan In September 2023, NKGen raised $0.3 million in proceeds in connection with a related party loan with a 30-day term and an interest rate of 5.12%. This related party loan is not convertible into equity. This loan was repaid on October 5, 2023. Employee Stock Purchase Plan Upon consummation of the Business Combination, NKGen adopted an employee stock purchase plan (“ESPP”). The maximum number of shares of NKGen common stock that may be issued under the ESPP is 3% of the fully diluted common stock of NKGen, determined as of immediately following Closing. Such maximum number of shares is subject to automatic annual increases. NKGen employees and the employees of any designated affiliates may participate in the ESPP. The purchase price of the ESPP shares is 85% of the lesser of the fair market value of NKGen common stock on the first day of an offering or on the applicable date of purchase. Warrant Subscription Agreements The Company entered into warrant subscription agreements (the “Warrant Subscription Agreements”) that closed on September 29, 2023, for total proceeds of $10.2 million with certain investors (the “Warrant Investors”), pursuant to which the Investors agreed to purchase an aggregate of 10,209,994 warrants, at a purchase price of $1.00 per warrant (the “Subscribed Warrants”). The Subscribed Warrants are exercisable for cash (or by “cashless” exercise under certain circumstances) during the five-year period beginning on the Closing Date. One-third of the Subscribed Warrants are exercisable initially at $10.00, one-third of the Subscribed Warrants are exercisable initially at $12.50, and one-third of the Subscribed Warrants are exercisable initially at $15.00. The initial exercise prices of each tranche are subject to adjustment every 180 days after the Closing based upon declines in trading prices of the Company’s common stock, as well as antidilution adjustments for stock splits, stock dividends, and the like. In addition, the Subscribed Warrants contain a downside protection provision, pursuant to which the Warrant Investors may demand a cashless exchange of certain Subscribed Warrants and, to the extent the relevant reference price is less than $1.50, a cash payment calculated as the difference between $1.50 and the then-current exercise price multiplied by the applicable number of warrant shares shall be paid to the Warrant Investors. Securities Purchase Agreement On September 29, 2023 NKGen received $10.0 million in connection with the issuance of the Senior Convertible notes which have a four-year term and an interest rate of 5.0% paid in cash semi-annually or 8.0% paid in kind (“Senior Convertible Notes”). The Senior Convertible Notes have a conversion price of $10.00 per share of common stock (subject to anti-dilution adjustments in the event of stock splits and the like), and a put option commencing 2.5 years after their issuance. Additionally, pursuant to the Securities Purchase Agreement, 1,000,000 warrants were issued to NKMAX at an exercise price of $11.50 per warrant (“SPA Warrants “). Such warrants have terms identical to the Public Warrants. Forward Purchase Agreements, Subscription Agreements, and Side Letter On September 22, 2023, September 26, 2023, and September 29, 2023, the Company entered into private agreements (“Private Placement Agreements”) with investors (“FPA Investors” or “Sellers”) consisting of Forward Purchase Agreements, Subscription Agreements, and a Side Letter. Concurrently with the Closing of the Business Combination, the FPA Investors purchased 3,168,121 shares of common stock (“Subscribed Shares”) in exchange for a subscription receivable of $32.9 million (“Prepayment Amount”), which was placed into an escrow account for the benefit of the FPA Investors (“Escrow Account”). The terms of the Private Placement Agreements provide that following a one-year period after the Closing (“Measurement Period”), subject to early termination and settlement at the election of the FPA Investors, the funds placed into the Escrow Account will be released to the Company, the FPA Investors, or a combination of both, based on a combination of factors, including the number of shares sold by the FPA Investors during the Measurement Period, the volume weighted average price of the Company’s common stock over a specified valuation period, and the application of antidilution provisions. In addition to the Subscribed Shares, the FPA Investors received an aggregate 314,889 share consideration shares (“Share Consideration Shares”), consisting of (i) the award of 200,000 Share Consideration Shares to Meteora Entities (as defined below) which were public shares redeemed and reversed by Graf Stockholders, (ii) the award of 34,889 Share Consideration Shares to Sandia Entities (as defined below) which were public shares redeemed and reversed by Graf Stockholders, and (iii) the issuance of 80,000 Share Consideration Shares, which are new shares of common stock issued in connection with the Closing, each for no cash consideration. In addition, the Meteora Entities received 200,000 structuring shares, pursuant to a side letter, (“Structuring Shares”, collectively with the Share Consideration Shares, “Incremental Shares”), which were also public shares of Graf common stock previously held by Graf Stockholders. These Incremental Shares are not subject to an escrow arrangement. The Incremental Shares were converted into shares of NKGen common stock on a one-for-one basis at Closing. Accordingly, such shares have the same voting as well as dividend and liquidation participation rights as other shares of NKGen common stock. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of Presentation NKMAX held a majority of the voting power of Legacy NKGen before the Business Combination and continues to hold a majority of the voting power of the Company after the Business Combination. Therefore, as there was no change in control, the Business Combination was accounted for as a common control transaction with respect to Legacy NKGen along with a reverse recapitalization of the Company. Accordingly, for accounting purposes, the financial statements of the Company represent a continuation of the financial statements of Legacy NKGen with the Business Combination being treated as the equivalent of Legacy NKGen issuing shares for the net assets of Graf, accompanied by a recapitalization. The net assets of Graf were recognized as of the Closing at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are presented as those of Legacy NKGen and the accumulated deficit of Legacy NKGen has been carried forward after Closing. Upon the consummation of the Business Combination, all of Legacy NKGen’s equity was converted into equity of the Company based upon an exchange ratio (“ Exchange Ratio ”). In addition, all stock options of Legacy NKGen were converted using the Exchange Ratio into options exercisable for shares of the Company with the same terms and vesting conditions. The Exchange Ratio as of September 29, 2023, the date of Closing, was approximately 0.408 . All periods prior to the Business Combination have been retrospectively adjusted using the Exchange Ratio to reflect the reverse recapitalization. In connection with the reverse recapitalization treatment of the Business Combination, all issued and outstanding securities of Graf upon Closing were treated as issuances of the Company upon the consummation of the Business Combination. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“ SEC ”) and generally accepted accounting principles in the United States of America (“ US GAAP ”). The Company maintains its accounting records under the accrual method of accounting in conformity with US GAAP. The condensed balance sheet as of December 31, 2022 included herein was derived from the audited financial statements as of that date. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such regulations. Accordingly, these unaudited condensed consolidated financial statements and accompanying footnotes should be read in conjunction with Legacy NKGen’s financial statements as of and for the year ended December 31, 2022. The results for the interim periods are not necessarily indicative of results for the full year. Except as described in this Note 2, there have been no material changes to NKGen’s significant accounting policies as described in NKGen’s financial statements as of and for the year ended December 31, 2022. In the opinion of management, all adjustments, of a normal recuring nature, considered necessary for a fair presentation have been included in the condensed consolidated financial statements. The Company believes that the disclosures provided herein are adequate to prevent the information presented from being misleading. | Basis of Presentation The accompanying financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“ SEC |
Business Combination | Business Combination NKMAX held a majority of the voting power of Legacy NKGen before the Business Combination and continues to hold a majority of the voting power of the Company after the Business Combination. Therefore, as there was no change in control, the Business Combination was accounted for as a common control transaction with respect to Legacy NKGen along with a reverse recapitalization of the Company. Accordingly, for accounting purposes, the financial statements of the Company represent a continuation of the financial statements of Legacy NKGen with the Business Combination being treated as the equivalent of Legacy NKGen issuing shares for the net assets of Graf, accompanied by a recapitalization. The net assets of Graf were recognized as of the Closing at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are presented as those of Legacy NKGen and the accumulated deficit of Legacy NKGen has been carried forward after Closing. Upon the consummation of the Business Combination, all of Legacy NKGen’s equity was converted into equity of the Company based upon an exchange ratio (“ Exchange Ratio All periods prior to the Business Combination have been retrospectively adjusted using the Exchange Ratio to reflect the reverse recapitalization. In connection with the reverse recapitalization treatment of the Business Combination, all issued and outstanding securities of Graf upon Closing were treated as issuances of the Company upon the consummation of the Business Combination. | |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in accordance with US GAAP requires management to make estimates and assumptions that impact the reported amounts of certain assets and liabilities, certain disclosures at the date of the condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. The most significant estimates in the Company’s condensed consolidated financial statements include, but are not limited to, accrued research and development expenses, legacy convertible promissory notes, senior convertible promissory notes due to related parties, forward purchase derivative liabilities, derivative warrant liabilities, common stock, and equity awards. These estimates and assumptions are based upon historical experience, knowledge of current events, and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results could differ materially from those estimates. | Use of Estimates The preparation of financial statements in accordance with US GAAP requires management to make estimates and assumptions that impact the reported amounts of certain assets and liabilities, certain disclosures at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. The most significant estimates in the Company’s financial statements include, but are not limited to, accrued research and development expenses, convertible promissory notes, convertible promissory notes due to related parties, the valuation of common stock and equity awards. These estimates and assumptions are based upon historical experience, knowledge of current events, and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results could differ materially from those estimates. |
Segments | Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“ CODM ”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information presented on an enterprise-wide basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it operates in one reportable segment. Additionally, the Company generates all of its revenues, and maintains all of its long-lived assets within the United States. | Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information presented on an enterprise-wide basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it operates in one reportable segment. Additionally, the Company generates all of its revenues, and maintains all of its long-lived assets within the United States. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. The carrying amounts reported in the balance sheets for cash and cash equivalents are valued at cost, which approximate their fair value. These investments may include money market funds, U.S. Government agencies, corporate debt securities, and commercial paper. The Company has not experienced any losses in such accounts and management believes the Company has no highly liquid investments exposed to credit risk. | |
Concentrations of Risk | Concentrations of Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company minimizes the amount of credit exposure by investing cash that is not required for immediate operating needs in money market funds, government obligations, and/or commercial paper with short maturities. To date, the Company has not experienced any losses associated with this credit risk and continues to believe this exposure is not significant. Cash deposits are insured by the Federal Deposit Insurance Corporations (“ FDIC For the years ended December 31, 2021 and 2022, no customer accounted for over 10% of total revenue. As of December 31, 2021 and 2022, the Company had no trade accounts receivables outstanding and less than $0.1 million in other receivables. | |
Property and Equipment, net | Property and Equipment, net Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method. Leasehold improvements are depreciated over the shorter of their estimated useful lives or the term of the lease by use of the straight-line method. Repairs and maintenance costs are charged to expense as incurred. When assets are retired or sold, the assets and accumulated depreciation are removed from the respective amounts and any gain or loss is recognized, as applicable, in the accompanying statements of operations. | |
Capitalized Software, net | Capitalized Software, net Expenditures related to internal use software are capitalized. Such expenditures are amortized over their period of benefit, which are generally three-year period, using the straight-line method. | |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset, or asset group, may not be recoverable. Recoverability is measured by a comparison of the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset or asset group exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset or asset group exceeds the fair value of the asset or asset group. The Company has not recognized any impairment losses for the years ended December 31, 2021 and 2022. | |
Fair Value of Financial Instruments | Fair Value Option In lieu of bifurcation, on an instrument-by-instrument basis, the Company may elect the fair value option for certain financial instruments that meet the required criteria under ASC 825, Financial Instruments . The Company elected the fair value option for its legacy convertible promissory notes, which met the required criteria under ASC 825, Financial Instruments . Interest expense associated with the legacy convertible promissory notes is included in the change in fair value of such instruments. | Fair Value of Financial Instruments The Company follows ASC 820-10, Fair Value Measurements and Disclosures The Company’s financial instruments include cash and cash equivalents, prepaid expenses, accounts payable, accrued expenses, convertible promissory notes issued from 2019 through 2022 to investors (“2019 Convertible Notes”), convertible promissory notes due to related parties (“Related Party Convertible Notes”, together with the 2019 Convertible Notes, “Convertible Notes”) and debt due to a related party (“Related Party Loans”). The carrying amount of cash and cash equivalents, prepaid expenses and other assets, accounts payable and accrued expenses are generally considered to be representative of their respective values because of the short-term nature of those instruments. The Company elects to account for its 2019 Convertible Notes and Related Party Convertible Notes, which meet the required criteria, at fair value at inception and at each subsequent reporting date. Subsequent changes in fair value of the Convertible Notes are recorded within other expenses, net on the accompanying statement of operations and comprehensive loss. Interest expense associated with the Convertible Notes is included in the change in fair value for the Convertible Notes. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. The carrying value of the Company’s Related Party Loans approximates fair value as the stated interest rate approximates market rates for similar loans and due to the short-term nature of such loans. |
Employee Benefit Plan | Employee Benefit Plan Effective January 1, 2019, the Company adopted and maintains a defined contribution plan, which qualifies under Section 401(k) of the Internal Revenue Code, on behalf of its eligible employees. Employee contributions are voluntary and are determined on an individual basis, limited to the maximum amount allowable under federal tax regulations. During the years ended December 31, 2021 and 2022, the Company did not contribute to the plan. | |
Revenue Recognition | Revenue Recognition Historically, the Company recognized revenue in connection with Coronavirus Disease of 2019 (“ COVID-19 The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers The transaction price is the amount of consideration the Company is entitled to receive in exchange for the transfer of control of a product or a service to a customer. To determine the transaction price, the Company considers the existence of any significant financing component, the effects of any variable elements, noncash considerations and consideration payable to the customer. If a significant financing component exists, the transaction price is adjusted for the time value of money. If an element of variability exists, the Company must estimate the consideration it expects to receive and uses that amount as the basis for recognizing revenue as the product or the service is transferred to the customer. If a contract has multiple performance obligations, the Company allocates the transaction price to each distinct performance obligation in an amount that reflects the consideration the Company is entitled to receive in exchange for satisfying each distinct performance obligation. For each distinct performance obligation, revenue is recognized when (or as) the Company transfers control of the product or the service applicable to such performance obligation. In those instances where the Company first receives consideration in advance of satisfying its performance obligation, the Company classifies such consideration as contract liability until (or as) the Company satisfies such performance obligation. In those instances where the Company first satisfies its performance obligation prior to its receipt of consideration, the consideration is recorded as accounts receivable. The Company expenses incremental costs of obtaining and fulfilling a contract as and when incurred if the expected amortization period of the asset that would be recognized is one year or less, or if the amount of the asset is immaterial. Otherwise, such costs are capitalized as contract assets if they are incremental to the contract and amortized to expense proportionate to revenue recognition of the underlying contract. | |
Collaboration Agreement | Collaboration Agreement The Company has entered into a research agreement that falls under the scope of ASC 808, Collaborative Arrangements | |
Research and Development Expenses | Research and Development Expenses All research and development costs are expensed in the period incurred. Research and development expenses primarily consist of services provided by contract organizations for clinical development, salaries and related expenses for personnel, including stock-based compensation expense, outside service providers, facilities costs, fees paid to consultants and other professional services, license fees, depreciation and supplies used in research and development. Payments made prior to the receipt of goods or services to be used in research and development are capitalized until the related goods or services are received. Costs are accrued for research performed over the service periods specified in the contracts and estimates are adjusted, if required, based upon an ongoing review of the level of effort and costs actually incurred. | |
Leases | Leases The Company accounts for its leases under ASC 842, Leases | |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense is comprised of stock options awarded to employees and consultants. The Company accounts for share-based awards under the fair value method prescribed by ASC 718-10, Stock Compensation . The fair value of stock options is estimated using the Black-Scholes option pricing model on the date of grant. This option pricing model involves a number of estimates, including the per share value of the underlying common stock, exercise price, estimate of future volatility, expected term of the stock option award, risk-free interest rate and expected annual dividend yield. The fair value of the shares of common stock underlying the stock options has historically been determined by the Company’s board of directors as there was no public market for the underlying common stock prior to October 2, 2023. The Company’s board of directors determines the fair value of the Company’s common stock by considering a number of objective and subjective factors including contemporaneous third-party valuations of its common stock, the valuation of comparable companies, sales of the Company’s common stock to outside investors in arms-length transactions, the Company’s operating and financial performance, the lack of marketability, and general and industry specific economic outlook, and the implied fair values upon a merger transaction, amongst other factors. The Company recognizes the expense for options with graded- vesting schedules on a straight-line basis over the requisite service period, which is generally the vesting period. Forfeitures are recognized as they occur. | Stock-Based Compensation Stock-based compensation expense is comprised of stock options awarded to employees and consultants. The Company accounts for share-based awards under the fair value method prescribed by ASC 718-10, Stock Compensation The fair value of the shares of common stock underlying the stock options has historically been determined by the Company’s board of directors as there is no public market for the underlying common stock. The Company’s board of directors determines the fair value of the Company’s common stock by considering a number of objective and subjective factors including contemporaneous third-party valuations of its common stock, the valuation of comparable companies, sales of the Company’s common stock to outside investors in arms-length transactions, the Company’s operating and financial performance, the lack of marketability, and general and industry specific economic outlook, amongst other factors. The Company recognizes the expense for options with graded-vesting schedules on a straight-line basis over the requisite service period, which is generally the vesting period. Forfeitures are recognized as they occur. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes net deferred tax assets to the extent the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability. No tax liability has been recognized in the financial statements attributed to uncertain tax positions. | |
Basic and Diluted Net Loss Per Common Share | Basic and Diluted Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss for the year by the weighted-average number of common shares outstanding during the year. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding and potentially dilutive securities outstanding for the period using the treasury stock or if-converted method if their inclusion is dilutive. Diluted net loss per common share is the same as basic net loss per common share because the inclusion of potentially dilutive shares would be anti-dilutive to the calculation of loss and comprehensive loss per common share. The Company has one class of shares issued and outstanding. Accordingly, basic and diluted net loss per share is not allocated among multiple classes of shares. Basic and diluted net loss per share for all periods prior to the Closing have been retrospectively adjusted by the Exchange Ratio to effect the reverse recapitalization. Potentially anti-dilutive shares excluded from the calculation of diluted net loss per share for each of the three and nine months ended September 30, 2023 include the following: Private warrants 4,721,533 Working capital warrants 523,140 Public warrants 3,432,286 PIPE warrants 10,209,994 Stock options 2,101,760 SPA warrants 1,000,000 Senior convertible notes’ shares 1,000,000 Deferred founder shares (1) 1,173,631 (1) As described in Note 8, Related Party Transactions, deferred founder shares do not have voting rights, do not participate in dividends and are not transferrable absent the Company’s consent. Therefore, while deferred founder shares are considered outstanding for legal purposes and are included in the total quantity of outstanding shares on the unaudited condensed consolidated statements of stockholders’ deficit, they are not considered outstanding for accounting purposes, including basic and diluted net loss per share purposes. Potentially anti-dilutive shares excluded from the calculation of diluted net loss per share for each of the three and nine months ended September 30, 2022 includes stock options of 423,932 (after giving effect to the Exchange Ratio), in addition to the shares underlying the Legacy Convertible Notes. The Company is unable to quantify the number of shares underlying the legacy convertible notes for each of the three and nine months ended September 30, 2022 as the quantity of shares issuable upon conversion was not determinable for those periods. | Basic and Diluted Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss for the year by the weighted-average number of common shares outstanding during the year. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding and potentially dilutive securities outstanding for the period using the treasury stock or if-converted method if their inclusion is dilutive. Diluted net loss per common share is the same as basic net loss per common share, because the inclusion of potentially dilutive shares would be anti-dilutive to the calculation of loss and comprehensive loss per common share. Potentially anti-dilutive shares excluded from the calculation of diluted net loss per share for the years ended December 31, 2021 and 2022 includes stock options of 723,115 and 185,248 , respectively (after the application of the Exchange Ratio), in addition to the shares underlying the Convertible Notes. The Company is unable to quantify the number of shares underlying the Convertible Notes as the quantity of shares issuable upon conversion, as described in Note 6, is not determinable at this time. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standard Board (“ FASB ”) issued Accounting Standards Update (“ ASU ”) No. 2016-13, Measurement of Credit Losses on Financial Instruments . ASU 2016-13, together with a series of subsequently issued related ASUs, has been codified in Topic 326. Topic 326 establishes new requirements for companies to estimate expected credit losses when measuring certain financial assets, including accounts receivables. The new guidance is effective for fiscal years beginning after December 15, 2022. The Company adopted the new guidance with its fiscal year beginning January 1, 2023. The adoption of ASC 326 had no material impact on the Company’s financial statements. | Recently Adopted Accounting Pronouncements In December 2019, the FASB issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In October 2021, the FASB issued ASU 2021-07, Compensation — Stock Compensation (Topic 718) Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses: Measurement of Credit Losses on Financial Instruments In August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Schedule of Property and Equipment, net | Property and equipment, net consist of the following (in thousands): September 30, December 31, Useful Life 2023 2022 Land — $ 5,025 $ 5,025 Buildings 40 years 8,325 8,325 Furniture and fixtures 7 years 677 677 Lab equipment 5 years 4,003 4,003 Leasehold improvements Lesser of estimated useful life or related lease term 52 52 Office equipment 5 years 17 17 Vehicles 5 years 112 112 18,211 18,211 Less: Accumulated depreciation (3,541) (2,690) $ 14,670 $ 15,521 | December 31, Useful Life 2021 2022 Land — $ 5,025 $ 5,025 Buildings 40 years 8,311 8,325 Furniture and fixtures 7 years 677 677 Lab equipment 5 years 3,907 4,003 Leasehold improvements Lesser of estimated useful life or related lease term 52 52 Office equipment 5 years 17 17 Vehicles 5 years 112 112 18,101 18,211 Less: Accumulated depreciation (1,534) (2,690) $ 16,567 $ 15,521 |
Additional Balance Sheet Info_2
Additional Balance Sheet Information (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | ||
Schedule of prepaid expenses and other current assets | December 31, 2021 2022 Prepaid expenses $ 172 $ 133 Other receivables 67 67 Other current assets 22 4 Prepaid expenses and other current assets $ 261 $ 204 | |
Schedule of accounts payable and accrued expenses | Accounts payable and accrued expenses consist of the following (in thousands): September 30, December 31, 2023 2022 Accounts payable $ 7,938 $ 975 Accrued liabilities 4,239 1,359 Employee compensation 730 291 Other 58 27 Accounts payable and accrued expenses $ 12,965 $ 2,652 | December 31, 2021 2022 Accounts payable $ 1,687 $ 975 Accrued liabilities 248 1,359 Employee compensation 240 291 Other 27 27 Accounts payable and accrued expenses $ 2,202 $ 2,652 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | ||
Schedule of liabilities measured at fair value on a recurring basis | Liabilities measured at fair value on a recurring basis as of September 30, 2023 are as follows (in thousands): Fair Value Measurements at Reporting Date Using Balance as of September 30, 2023 Level 1 (1) Level 2 Level 3 Private Warrants $ 1,841 $ — $ — $ 1,841 Working Capital Warrants 204 — — 204 Forward Purchase Derivative Liability 20,201 — — 20,201 PIPE Warrants (1) 10,210 — — 10,210 Total $ 32,456 $ — $ — $ 32,456 (1) As of September 30, 2023, the fair value of the PIPE Warrants was measured using its respective transaction price as described below. In future reporting periods, the PIPE Warrants will be valued using level three inputs. Liabilities measured at fair value on a recurring basis as of December 31, 2022 are as follows (in thousands): Fair Value Measurements at Reporting Date Using Balance as of December 31, 2022 Level 1 Level 2 Level 3 2019 Convertible Notes $ 11,392 $ — $ — $ 11,392 2019 Related Party Convertible Notes 263 — — 263 Total $ 11,655 $ — $ — $ 11,655 | Fair Value Measurements at Reporting Date Using Balance as of December 31, 2021 Level 1 Level 2 Level 3 2019 Convertible Notes $ 11,219 $ — $ — $ 11,219 Related Party Convertible Notes 259 — — 259 Total $ 11,478 $ — $ — $ 11,478 Fair Value Measurements at Reporting Date Using Balance as of December 31, 2022 Level 1 Level 2 Level 3 2019 Convertible Notes $ 11,392 $ — $ — $ 11,392 Related Party Convertible Notes 263 — — 263 Total $ 11,655 $ — $ — $ 11,655 |
Schedule of reconciliation of the Convertible Notes measured at fair value on a recurring basis using significant unobservable inputs | The following table presents a reconciliation of the Legacy Convertible Notes: 2019 Related 2023 Related 2019 Party 2023 Party Convertible Convertible Convertible Convertible Notes Notes Notes Notes Total Balance as of December 31, 2022 $ 11,392 $ 263 $ — $ — $ 11,655 Issuance — — 4,700 125 4,825 Change in fair value 2,359 44 371 10 2,784 Balance as of June 30, 2023 $ 13,751 $ 307 $ 5,071 $ 135 $ 19,264 Issuance — — 1,390 — 1,390 Change in fair value (1,276) (31) (423) (11) (1,741) Conversion and settlement (12,475) (276) (6,038) (124) (18,913) Balance as of September 30, 2023 $ — $ — $ — $ — $ — | 2019 Related Party Convertible Convertible Notes Notes Total Balance as of December 31, 2020 $ 10,807 $ 528 $ 11,335 Transfer from related party to unrelated party 270 (270) — Change in fair value 142 1 143 Balance as of December 31, 2021 11,219 259 11,478 Change in fair value 173 4 177 Balance as of December 31, 2022 $ 11,392 $ 263 $ 11,655 |
Schedule of assumptions were used in determining the fair value of the Convertible notes | The following unobservable assumptions were used in determining the fair value of the Legacy Convertible Notes as of December 31, 2022: Probability of conversion — Probability of holding until maturity without conversion — Remaining term until potential conversion trigger date (years) — Discount yield (1) 20.0 % (1) Estimated using a comparable bond analysis and under S&P Global Inc.’s credit rating scale using a multinominal logical regression. Credit spread (1) 12.1 % Equity volatility 45.0 % (1) Estimated using a comparable bond analysis and under S&P Global Inc.’s credit rating scale using a multinominal logical regression. Private Warrants volatility 9.6 % Dividend yield (per share) — Dividend yield 0.0 % Equity volatility 105.0 % | As of December 31, 2021 2022 Probability of conversion 90 % — Probability of holding until maturity without conversion 10 % — Remaining term until potential conversion trigger date (years) 0.75 — Discount yield (1) 17 % 20 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of maturities of the operating lease liability | Maturities of the operating lease liability as of December 31, 2022 are as follows (in thousands): Minimum lease payments 2023 $ 412 Total undiscounted lease payments 412 Less: imputed interest (33) Total operating lease liability $ 379 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Stockholders' Equity | ||
Schedule of Company's stock option activity | A summary of the Company’s stock option activity for the nine months ended September 30, 2023 is as follows: Stock Options Weighted Average Outstanding Exercise Price Outstanding as of December 31, 2022 185,231 $ 1.37 Granted 2,173,693 6.67 Forfeited (244,298) 6.61 Exercised (12,866) 1.73 Outstanding as of September 30, 2023 2,101,760 $ 6.25 Stock options outstanding, vested and expected to vest and exercisable as of September 30, 2023 are as follows: Weighted Average Total Number of Remaining Weighted- Aggregate Stock Contractual Average Intrinsic Value Options Life (Years) Exercise Price (in thousands) Outstanding as of December 31, 2022 185,231 6.98 $ 1.37 $ 980 Outstanding as of September 30, 2023 2,101,760 9.10 $ 6.25 $ 4,318 Vested and expected to vest as of September 30, 2023 2,101,760 9.10 $ 6.25 $ 4,318 Exercisable as of September 30, 2023 268,236 7.48 $ 3.40 $ 1,315 | Stock Options Weighted Average Outstanding Exercise Price Outstanding as of December 31, 2020 1,034,074 $ 1.00 Exercised (191,020) 0.34 Forfeited (119,939) 3.28 Outstanding as of December 31, 2021 723,115 $ 0.81 Exercised (486,296) 0.34 Forfeited (51,588) 2.11 Outstanding as of December 31, 2022 185,231 $ 1.37 |
Schedule of stock options outstanding, vested and expected to vest and exercisable | Weighted Total Average Weighted- Aggregate Remaining Average Intrinsic Number of Contractual Exercise Value Stock Options Life (Years) Price (in thousands) Outstanding as of December 31, 2021 723,115 7.79 $ 0.81 $ 3,674 Outstanding as of December 31, 2022 185,231 6.98 $ 1.37 $ 980 Vested and expected to vest as of December 31, 2022 185,231 6.98 $ 1.37 $ 980 Exercisable as of December 31, 2022 146,053 6.94 $ 1.13 $ 807 | |
Schedule of stock-based compensation expense, recognized in the Company's statements of operations | Stock-based compensation expense, recognized in the Company’s condensed statements of operations and comprehensive loss for the 2019 Plan was recorded as follows (in thousands): Three Months Ended Nine Months Ended September 30 September 30 2023 2022 2023 2022 Research and development $ 197 $ 11 $ 735 $ 34 General and administrative 770 5 2,472 20 Total stock-based compensation expense $ 967 $ 16 $ 3,207 $ 54 | Years Ended December 31, 2021 2022 Research and development $ 44 $ 45 General and administrative 49 24 Total stock-based compensation expense $ 93 $ 69 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for income taxes | Years Ended December 31, 2021 2022 Current: Federal $ — $ — State — — Deferred: Federal 5 7 State — — Provision for income taxes $ 5 $ 7 |
Schedule of reconciliation of the income tax computed at federal statutory income tax rate to the reported provision for income taxes | Years Ended December 31, 2021 2022 Tax benefit at statutory federal rate $ (4,885) $ (5,618) State tax, net of federal tax benefit (1,500) (1,694) Interest expense 274 477 Increase in valuation allowance 6,993 7,908 Permanent items 30 37 General business tax credit (923) (1,098) Other 16 (5) Provision for income taxes $ 5 $ 7 |
Schedule of significant components of the Company's deferred income taxes | December 31, 2021 2022 Deferred tax assets: Net operating losses $ 14,380 $ 17,890 Tax credit carryforwards, net 2,191 3,285 Accrued expenses 52 347 Section 174 R&E capitalization — 2,847 Lease liability 229 106 Stock-based compensation 15 20 Total deferred tax assets 16,867 24,495 Deferred tax liabilities: Operating lease right-of-use asset (224) (101) Property and equipment (745) (595) Total deferred tax liabilities (969) (696) Net deferred tax assets 15,898 23,799 Less: Valuation allowance (15,917) (23,825) Net deferred tax liability $ (19) $ (26) |
Schedule of the activity related to the Company's unrecognized tax benefits | Years Ended December 31, 2021 2022 Beginning balance $ 156 $ 269 Additions for tax positions related to the current year 113 131 Reductions for tax positions related to prior years — 3 Ending balance $ 269 $ 403 |
Company Information (Details)
Company Information (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accumulated deficit | $ (128,524) | $ (79,176) | $ (52,422) |
Cash and cash equivalents | $ 8,786 | $ 117 | $ 351 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 segment | Dec. 31, 2022 USD ($) segment shares | Dec. 31, 2021 USD ($) shares | |
Summary of Significant Accounting Policies | |||
Number of Reportable Segments | segment | 1 | 1 | |
Trade accounts receivable | $ 0 | $ 0 | |
Income tax penalties and interest accrued | $ 0 | ||
Legacy NKGen | |||
Summary of Significant Accounting Policies | |||
Exchange ratio | 0.408 | ||
Maximum | |||
Summary of Significant Accounting Policies | |||
Other receivables | $ 100 | $ 100 | |
Stock options | |||
Summary of Significant Accounting Policies | |||
Antidilutive securities excluded from computation of earnings per share | shares | 185,248 | 723,115 | |
Capitalized software | |||
Summary of Significant Accounting Policies | |||
Intangible asset, useful life | 3 years |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property and Equipment, net | ||||||
Property and equipment, Gross | $ 18,211 | $ 18,211 | $ 18,211 | $ 18,101 | ||
Less: Accumulated depreciation | (3,541) | (3,541) | (2,690) | (1,534) | ||
Property and equipment, net | 14,670 | 14,670 | 15,521 | 16,567 | ||
Depreciation expense | 300 | $ 300 | 900 | $ 900 | 600 | 1,100 |
Gain or loss on disposal of property and equipment | 0 | 0 | ||||
Land | ||||||
Property and Equipment, net | ||||||
Property and equipment, Gross | $ 5,025 | $ 5,025 | $ 5,025 | 5,025 | ||
Buildings | ||||||
Property and Equipment, net | ||||||
Property and equipment - Useful Life | 40 years | 40 years | 40 years | |||
Property and equipment, Gross | $ 8,325 | $ 8,325 | $ 8,325 | 8,311 | ||
Furniture and fixtures | ||||||
Property and Equipment, net | ||||||
Property and equipment - Useful Life | 7 years | 7 years | 7 years | |||
Property and equipment, Gross | $ 677 | $ 677 | $ 677 | 677 | ||
Lab equipment | ||||||
Property and Equipment, net | ||||||
Property and equipment - Useful Life | 5 years | |||||
Property and equipment, Gross | $ 4,003 | 3,907 | ||||
Leasehold improvements | ||||||
Property and Equipment, net | ||||||
Property and equipment, Gross | $ 52 | $ 52 | $ 52 | 52 | ||
Office equipment | ||||||
Property and Equipment, net | ||||||
Property and equipment - Useful Life | 5 years | 5 years | 5 years | |||
Property and equipment, Gross | $ 17 | $ 17 | $ 17 | 17 | ||
Vehicles | ||||||
Property and Equipment, net | ||||||
Property and equipment - Useful Life | 5 years | 5 years | 5 years | |||
Property and equipment, Gross | $ 112 | $ 112 | $ 112 | $ 112 |
Additional Balance Sheet Info_3
Additional Balance Sheet Information (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Prepaid expenses and other current assets | |||
Prepaid expenses | $ 1,200 | $ 133 | $ 172 |
Other receivables | 67 | 67 | |
Other current assets | 0 | 4 | 22 |
Prepaid expenses and other current assets | 1,313 | 204 | 261 |
Accounts payable and accrued expenses | |||
Accounts payable | 7,938 | 975 | 1,687 |
Accrued liabilities | 4,239 | 1,359 | 248 |
Employee compensation | 291 | 240 | |
Other | 27 | 27 | |
Accounts payable and accrued expenses | $ 12,965 | $ 2,652 | $ 2,202 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value Measurements | |||
Liabilities at fair value | $ 32,456 | $ 11,655 | |
Recurring | |||
Fair Value Measurements | |||
Liabilities at fair value | 11,655 | $ 11,478 | |
Recurring | 2019 Convertible Notes | |||
Fair Value Measurements | |||
Liabilities at fair value | 11,392 | 11,219 | |
Recurring | Related Party Convertible Notes | |||
Fair Value Measurements | |||
Liabilities at fair value | 263 | 259 | |
Level 1 | |||
Fair Value Measurements | |||
Liabilities at fair value | 0 | 0 | |
Level 2 | |||
Fair Value Measurements | |||
Liabilities at fair value | 0 | 0 | |
Level 3 | |||
Fair Value Measurements | |||
Liabilities at fair value | $ 32,456 | 11,655 | |
Level 3 | Recurring | |||
Fair Value Measurements | |||
Liabilities at fair value | 11,655 | 11,478 | |
Level 3 | Recurring | 2019 Convertible Notes | |||
Fair Value Measurements | |||
Liabilities at fair value | 11,392 | 11,219 | |
Level 3 | Recurring | Related Party Convertible Notes | |||
Fair Value Measurements | |||
Liabilities at fair value | $ 263 | $ 259 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of the Convertible Notes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value Measurements | ||
Liabilities measured at fair value, ending balance | $ 11,655 | |
Level 3 | Recurring | ||
Fair Value Measurements | ||
Liabilities measured at fair value, beginning balance | 11,478 | $ 11,335 |
Change in fair value | 177 | 143 |
Liabilities measured at fair value, ending balance | 11,655 | 11,478 |
Level 3 | Recurring | 2019 Convertible Notes | ||
Fair Value Measurements | ||
Liabilities measured at fair value, beginning balance | 11,219 | 10,807 |
Transfer from related party to unrelated party | 270 | |
Change in fair value | 173 | 142 |
Liabilities measured at fair value, ending balance | 11,392 | 11,219 |
Level 3 | Recurring | Related Party Convertible Notes | ||
Fair Value Measurements | ||
Liabilities measured at fair value, beginning balance | 259 | 528 |
Transfer from related party to unrelated party | (270) | |
Change in fair value | 4 | 1 |
Liabilities measured at fair value, ending balance | $ 263 | $ 259 |
Fair Value Measurements - Assum
Fair Value Measurements - Assumptions were used in determining the fair value of the Convertible notes (Details) | Dec. 31, 2022 | Dec. 31, 2021 Y |
Probability of conversion | ||
Fair Value Measurements | ||
Measurement input | 90 | |
Probability of holding until maturity without conversion | ||
Fair Value Measurements | ||
Measurement input | 10 | |
Remaining term until potential conversion trigger date (years) | ||
Fair Value Measurements | ||
Measurement input | 0.75 | |
Discount yield | ||
Fair Value Measurements | ||
Measurement input | 20 | 17 |
Debt (Details)
Debt (Details) - USD ($) $ in Millions | 2 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Dec. 31, 2022 | |
Maximum | For an investor that invests more than $1.0 million and less than $5.0 million | ||
Debt | ||
Amount of investment in notes | $ 5 | |
Discount rate percentage | 25% | |
Minimum | For an investor that invests up to $1.0 million | ||
Debt | ||
Amount of investment in notes | $ 1 | |
Discount rate percentage | 20% | |
Minimum | For an investor that invests more than $1.0 million and less than $5.0 million | ||
Debt | ||
Amount of investment in notes | $ 1 | |
Convertible promissory notes | ||
Debt | ||
Total proceeds | $ 11.1 | |
Interest rate percentage | 1.68% | |
Threshold minimum aggregate sales price in a qualified financing of Next Round Securities | $ 20 | |
Amount considered for determination of conversion price of debt | $ 300 |
Debt - Paycheck Protection Prog
Debt - Paycheck Protection Program Loan (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
May 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Debt | |||||||
Interest expense | $ 211 | $ 636 | $ 307 | $ 1,690 | $ 2,306 | $ 1,315 | |
Paycheck Protection Program Loan | |||||||
Debt | |||||||
Proceeds from loan | $ 1,100 | ||||||
Interest rate percentage | 1% | ||||||
Interest expense | $ 100 | $ 100 |
Related-Party Transactions (Det
Related-Party Transactions (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||||||
Research and development | $ 3,929,000 | $ 4,121,000 | $ 11,577,000 | $ 12,659,000 | $ 16,746,000 | $ 14,672,000 |
Accounts payable and accrued expenses | 12,965,000 | 12,965,000 | 2,652,000 | 2,202,000 | ||
Related Party [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Research and development | 401,000 | 140,000 | 401,000 | 337,000 | 439,000 | 209,000 |
Accounts payable and accrued expenses | 401,000 | 401,000 | 81,000 | 0 | ||
Related Party [Member] | Advisory And Research Services [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Research and development | 0 | 100,000 | 0 | 300,000 | 400,000 | |
Related Party [Member] | Advisory And Research Services [Member] | Paul Song | ||||||
Related Party Transaction [Line Items] | ||||||
Research and development | 0 | |||||
Accounts payable and accrued expenses | 100,000 | |||||
Related Party [Member] | Advisory And Research Services [Member] | ATGEN Canada | ||||||
Related Party Transaction [Line Items] | ||||||
Research and development | 0 | 200,000 | ||||
Accounts payable and accrued expenses | 0 | 0 | ||||
Related Party [Member] | Purchases Of Laboratory Supplies [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Research and development | $ 400,000 | $ 100,000 | $ 400,000 | $ 100,000 | ||
Related Party [Member] | Purchases Of Laboratory Supplies [Member] | NKMAX | ||||||
Related Party Transaction [Line Items] | ||||||
Research and development | 100,000 | 100,000 | ||||
Accounts payable and accrued expenses | $ 100,000 | $ 0 |
Related-Party Transactions - Re
Related-Party Transactions - Related party loans (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 4 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Apr. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||||||||
Proceeds from related party loans | $ 300,000 | $ 5,000,000 | $ 5,300,000 | $ 17,500,000 | $ 23,000,000 | $ 20,500,000 | |||
Interest expense | $ 211,000 | $ 636,000 | 307,000 | 1,690,000 | 2,306,000 | 1,315,000 | |||
Other current liabilities | 355,000 | $ 55,000 | 355,000 | 355,000 | $ 55,000 | 1,930,000 | |||
Common Stock [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Number of shares issued upon conversion of related party loans | 6,943,789 | ||||||||
Related Party [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Amount of principal and interest converted into shares | 66,100,000 | ||||||||
Loan outstanding | 0 | $ 0 | 39,000,000 | ||||||
Interest expense | 63,000 | $ 628,000 | 160,000 | $ 1,663,000 | 2,271,000 | 1,305,000 | |||
Other current liabilities | $ 160,000 | $ 0 | $ 160,000 | $ 160,000 | 0 | 1,867,000 | |||
Related Party [Member] | Common Stock [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Number of shares issued upon conversion of related party loans | 6,943,789 | ||||||||
Related Party [Member] | Multiple Loan Agreements with NKMAX [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Proceeds from related party loans | $ 23,000,000 | $ 20,500,000 | |||||||
Interest rate percentage | 4.60% | 4.60% |
Related-Party Transactions - Co
Related-Party Transactions - Convertible promissory notes (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Related Party Transaction [Line Items] | ||
Convertible promissory notes outstanding | $ 11,392 | $ 11,219 |
Related Party [Member] | ||
Related Party Transaction [Line Items] | ||
Convertible promissory notes outstanding | 263 | 259 |
Related Party [Member] | Convertible promissory notes | ||
Related Party Transaction [Line Items] | ||
Amount of investment in notes | 500 | |
Convertible promissory notes outstanding | $ 400 | $ 300 |
Commitments and Contingencies -
Commitments and Contingencies - Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating lease right-of-use assets | $ 362 | $ 802 | $ 89 |
Accumulated amortization | 700 | 300 | |
Operating lease liability | 379 | 800 | |
Operating lease liability, current | $ 379 | 458 | $ 96 |
Operating lease liability, noncurrent | $ 360 | ||
Weighted-average remaining lease term | 1 year | 1 year 8 months 12 days | 1 year |
Weighted-average estimated incremental borrowing rate | 5.90% | 5.50% | 6% |
Operating cost | $ 300 | $ 300 | |
Fixed cost | 200 | 200 | |
Variable cost | $ 100 | $ 100 |
Commitments and Contingencies_2
Commitments and Contingencies - Maturities of the operating lease liability (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | |||
2023 | $ 412 | ||
Total undiscounted lease payments | $ 100 | 412 | |
Less: imputed interest | (33) | ||
Total operating lease liability | $ 379 | $ 800 |
Commitments and Contingencies_3
Commitments and Contingencies - License Agreements and Litigation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2020 | Dec. 31, 2021 | |
Commitments and Contingencies | |||
Upfront fee | $ 1 | ||
Accrued litigation liability | $ 0 | $ 0 | |
US | |||
Commitments and Contingencies | |||
Milestone payments | $ 5 | ||
European Union | |||
Commitments and Contingencies | |||
Milestone payments | 4 | ||
Four additional countries | |||
Commitments and Contingencies | |||
Milestone payments | $ 1 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock (Details) - $ / shares | Sep. 30, 2023 | Sep. 29, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Stockholders' Equity | ||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | |
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Common stock, shares issued | 21,888,976 | 13,303,795 | 5,873,711 | |
Common stock, shares outstanding | 21,888,976 | 21,888,976 | 13,303,795 | 5,873,711 |
Common stock, shares reserved for future issuance | 478,111,024 | 486,696,205 | 494,126,289 |
Stockholders' Equity - Equity I
Stockholders' Equity - Equity Incentive Plans (Details) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 shares | Dec. 31, 2022 installment shares | Dec. 31, 2021 shares | Feb. 28, 2023 shares | |
2019 Equity Incentive Plan | ||||
Number of shares authorized under the plan | 2,780,000 | |||
Granted (in shares) | 2,173,693 | 0 | 0 | |
Expected dividend yield percentage | 0% | |||
2019 Plan | ||||
2019 Equity Incentive Plan | ||||
Number of shares authorized under the plan | 2,780,000 | |||
Granted (in shares) | 867,572 | |||
Number of shares remained available for future issuance under the plan | 266,668 | |||
Term of the stock options | 10 years | |||
Vesting period | 4 years | |||
Vesting percentage | 25% | |||
Number of equal monthly instalments for vesting | installment | 36 | |||
Expiration term of the vested options if not exercised | 3 months | |||
Minimum | Board members | 2019 Plan | ||||
2019 Equity Incentive Plan | ||||
Vesting period | 3 years | |||
Maximum | Board members | 2019 Plan | ||||
2019 Equity Incentive Plan | ||||
Vesting period | 4 years |
Stockholders' Equity - Equity_2
Stockholders' Equity - Equity Incentive Plans - Summary of the Company's stock option activity (Details) - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock Options Outstanding | |||
Outstanding at beginning of period (in shares) | 185,231 | 723,115 | 1,034,074 |
Exercised | (12,866) | (486,296) | (191,020) |
Forfeited | (244,298) | (51,588) | (119,939) |
Outstanding at end of period (in shares) | 2,101,760 | 185,231 | 723,115 |
Weighted Average Exercise Price | |||
Outstanding at beginning of period (in USD per share) | $ 1.37 | $ 0.81 | $ 1 |
Exercised | 1.73 | 0.34 | 0.34 |
Forfeited | 6.61 | 2.11 | 3.28 |
Outstanding at end of period (in USD per share) | $ 6.25 | $ 1.37 | $ 0.81 |
Granted | 2,173,693 | 0 | 0 |
Stockholders' Equity - Equity_3
Stockholders' Equity - Equity Incentive Plans - Stock options outstanding, vested and expected to vest and exercisable (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock Options Outstanding | ||||
Outstanding at beginning of period (in shares) | 185,231 | 723,115 | 1,034,074 | |
Outstanding at end of period (in shares) | 2,101,760 | 185,231 | 723,115 | |
Vested and expected to vest as of the ending date | 2,101,760 | 185,231 | ||
Exercisable as of the ending date | 268,236 | 146,053 | ||
Weighted Average Remaining Contractual Life (Years) | ||||
Weighted Average Remaining Contractual Life (Years) | 9 years 1 month 6 days | 6 years 11 months 23 days | 7 years 9 months 14 days | |
Vested and expected to vest as of the ending date | 9 years 1 month 6 days | 6 years 11 months 23 days | ||
Exercisable as of the ending date | 7 years 5 months 23 days | 6 years 11 months 8 days | ||
Weighted Average Exercise Price | ||||
Beginning balance | $ 6.25 | $ 1.37 | $ 0.81 | $ 1 |
Outstanding at end of period (in USD per share) | 6.25 | 1.37 | $ 0.81 | |
Vested and expected to vest as of the ending date | 6.25 | 1.37 | ||
Exercisable as of the ending date | $ 3.40 | $ 1.13 | ||
Outstanding at beginning of period | $ 980 | $ 3,674 | ||
Outstanding at end of period | 4,318 | 980 | $ 3,674 | |
Vested and expected to vest as of the ending date | 4,318 | 980 | ||
Exercisable as of the ending date | 1,315 | 807 | ||
Aggregate intrinsic value of stock options exercised | 100 | 3,100 | 100 | |
Aggregate fair value of stock options vested | $ 900 | $ 600 | $ 300 |
Stockholders' Equity - Equity_4
Stockholders' Equity - Equity Incentive Plans - Stock-based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock-based compensation expense | ||||||
Total unrecognized stock-based compensation related to unvested stock option awards granted | $ 14,600 | $ 14,600 | $ 100 | |||
Period for recognition of unrecognized stock-based compensation related to unvested stock option awards granted | 3 years 2 months 12 days | 1 year 1 month 6 days | ||||
Total stock-based compensation expense | 967 | $ 16 | $ 3,207 | $ 54 | $ 69 | $ 93 |
Research and Development Expense [Member] | ||||||
Stock-based compensation expense | ||||||
Total stock-based compensation expense | 197 | 11 | 735 | 34 | 45 | 44 |
General and Administrative Expense [Member] | ||||||
Stock-based compensation expense | ||||||
Total stock-based compensation expense | $ 770 | $ 5 | $ 2,472 | $ 20 | $ 24 | $ 49 |
Collaboration Agreement (Detail
Collaboration Agreement (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Collaboration Agreement | |
Total reductions to research and development expenses | $ 0.4 |
Income Taxes - Provision for in
Income Taxes - Provision for income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred: | ||||||
Federal | $ 7 | $ 5 | ||||
Provision for income taxes | $ 0 | $ 0 | $ 0 | $ 0 | $ 7 | $ 5 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the income tax computed at federal statutory income tax rate to the reported provision for income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||||||
Tax benefit at statutory federal rate | $ (5,618) | $ (4,885) | ||||
State tax, net of federal tax benefit | (1,694) | (1,500) | ||||
Interest expense | 477 | 274 | ||||
Increase in valuation allowance | 7,908 | 6,993 | ||||
Permanent items | 37 | 30 | ||||
General business tax credit | (1,098) | (923) | ||||
Other | (5) | 16 | ||||
Provision for income taxes | $ 0 | $ 0 | $ 0 | $ 0 | $ 7 | $ 5 |
Income Taxes - Significant comp
Income Taxes - Significant components of the Company's deferred income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred tax assets: | ||
Net operating losses | $ 17,890 | $ 14,380 |
Tax credit carryforwards, net | 3,285 | 2,191 |
Accrued expenses | 347 | 52 |
Section 174 R&E capitalization | 2,847 | |
Lease liability | 106 | 229 |
Stock-based compensation | 20 | 15 |
Total deferred tax assets | 24,495 | 16,867 |
Deferred tax liabilities: | ||
Operating lease right-of-use asset | (101) | (224) |
Property and equipment | (595) | (745) |
Total deferred tax liabilities | (696) | (969) |
Net deferred tax assets | 23,799 | 15,898 |
Less: Valuation allowance | (23,825) | (15,917) |
Net deferred tax liability | (26) | (19) |
Increase in valuation allowance | $ 7,900 | $ 7,000 |
Income Taxes - Operating Loss C
Income Taxes - Operating Loss Carryforwards and Tax Credit Carryforwards (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Federal | |
Income Taxes | |
Net operating loss carryforwards | $ 61.3 |
Research and development tax credit carryforward | 2.2 |
State | |
Income Taxes | |
Net operating loss carryforwards | 71.6 |
Research and development tax credit carryforward | $ 1.8 |
Income Taxes - Uncertain Tax Be
Income Taxes - Uncertain Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Uncertain Tax Benefits | ||
Beginning balance | $ 269 | $ 156 |
Additions for tax positions related to the current year | 131 | 113 |
Reductions for tax positions related to prior years | 3 | |
Ending balance | $ 403 | $ 269 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 2 Months Ended | 4 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Sep. 29, 2023 | May 19, 2023 | Apr. 14, 2023 | Sep. 30, 2023 | Aug. 31, 2023 | Apr. 30, 2023 | May 15, 2023 | Dec. 31, 2019 | May 15, 2023 | Apr. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Feb. 28, 2023 | |
Subsequent Events | ||||||||||||||
Aggregate number of shares reserved for issuance under the 2019 Plan | 2,780,000 | |||||||||||||
Granted (in shares) | 2,173,693 | 0 | 0 | |||||||||||
Exercise price of options issued under the 2019 Plan | $ 6.67 | |||||||||||||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||
Related party | ||||||||||||||
Subsequent Events | ||||||||||||||
Borrowing term | 3 years | |||||||||||||
Convertible Notes | ||||||||||||||
Subsequent Events | ||||||||||||||
Total proceeds | $ 11.1 | |||||||||||||
Interest rate percentage | 1.68% | |||||||||||||
Threshold minimum aggregate sales price in a qualified financing of Next Round Securities | $ 20 | |||||||||||||
Amount considered for determination of conversion price of debt | 300 | |||||||||||||
Convertible Notes | Related party | ||||||||||||||
Subsequent Events | ||||||||||||||
Amount of investment in notes | $ 0.5 | |||||||||||||
Subsequent Events | ||||||||||||||
Subsequent Events | ||||||||||||||
Aggregate number of shares reserved for issuance under the 2019 Plan | 8,723,922 | |||||||||||||
Granted (in shares) | 5,322,456 | |||||||||||||
Exercise price of options issued under the 2019 Plan | $ 2.72 | |||||||||||||
Shares remaining available for issuance under the 2019 Plan | 1,770,389 | |||||||||||||
Total proceeds | $ 10.2 | |||||||||||||
Borrowing term | 2 years 6 months | |||||||||||||
Subsequent Events | 2023 Convertible Notes | ||||||||||||||
Subsequent Events | ||||||||||||||
Total proceeds | $ 0.8 | $ 1.4 | $ 1.4 | $ 4.1 | ||||||||||
Interest rate percentage | 4.55% | |||||||||||||
Threshold minimum aggregate sales price in a qualified financing of Next Round Securities | $ 20 | |||||||||||||
Amount considered for determination of conversion price of debt | $ 300 | |||||||||||||
Borrowing term | 30 days | 3 years | ||||||||||||
Number of shares considered for determination of conversion price | 1 | |||||||||||||
Subsequent Events | 2023 Convertible Notes | For an investor that invests up to $5.0 million | ||||||||||||||
Subsequent Events | ||||||||||||||
Discount rate percentage | 15% | |||||||||||||
Subsequent Events | 2023 Convertible Notes | For an investor that invests up to $5.0 million | Maximum | ||||||||||||||
Subsequent Events | ||||||||||||||
Amount of investment in notes | $ 5 | |||||||||||||
Subsequent Events | 2023 Convertible Notes | For an investor that invests more than $5.0 million and less than $10.0 million | ||||||||||||||
Subsequent Events | ||||||||||||||
Discount rate percentage | 20% | |||||||||||||
Subsequent Events | 2023 Convertible Notes | For an investor that invests more than $5.0 million and less than $10.0 million | Minimum | ||||||||||||||
Subsequent Events | ||||||||||||||
Amount of investment in notes | $ 5 | |||||||||||||
Subsequent Events | 2023 Convertible Notes | For an investor that invests more than $10.0 million | ||||||||||||||
Subsequent Events | ||||||||||||||
Discount rate percentage | 25% | |||||||||||||
Subsequent Events | 2023 Convertible Notes | For an investor that invests more than $10.0 million | Maximum | ||||||||||||||
Subsequent Events | ||||||||||||||
Amount of investment in notes | $ 10 | |||||||||||||
Subsequent Events | 2023 Convertible Notes | Related party | ||||||||||||||
Subsequent Events | ||||||||||||||
Total proceeds | $ 0.1 | |||||||||||||
Subsequent Events | Convertible Notes | ||||||||||||||
Subsequent Events | ||||||||||||||
Number of shares considered for determination of conversion price | 1 | |||||||||||||
Subsequent Events | New NKGen | NKGen Biotech, Inc. | ||||||||||||||
Subsequent Events | ||||||||||||||
Common stock, par value (in USD per share) | $ 0.0001 | |||||||||||||
Share price | $ 10 | |||||||||||||
Exchange ratio, Amount considered for numerator | $ 145 | |||||||||||||
Subsequent Events | 2023 NKMAX Loans | ||||||||||||||
Subsequent Events | ||||||||||||||
Aggregate gross proceeds | $ 5 | |||||||||||||
Interest rate percentage | 4.60% |
Subsequent Events (unaudited) (
Subsequent Events (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 2 Months Ended | 4 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Oct. 19, 2023 | Sep. 29, 2023 | May 19, 2023 | Sep. 30, 2023 | Aug. 31, 2023 | Jul. 31, 2023 | Jun. 30, 2023 | May 15, 2023 | Sep. 30, 2023 | Apr. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 19, 2023 | |
Subsequent Events | |||||||||||||||
Issuance fees | $ 72 | $ 0 | |||||||||||||
Amount of draw executed | $ 4,900 | 4,931 | 0 | ||||||||||||
Proceeds from note payable to related party | $ 300 | $ 5,000 | 5,300 | 17,500 | $ 23,000 | $ 20,500 | |||||||||
Proceeds from issuance of warrants | $ 10,210 | $ 10,210 | $ 0 | ||||||||||||
Subsequent Events | |||||||||||||||
Subsequent Events | |||||||||||||||
Total proceeds | $ 10,200 | ||||||||||||||
Borrowing term | 2 years 6 months | ||||||||||||||
Percentage of fully diluted common stock | 3% | ||||||||||||||
Percentage of fair value common stock | 85% | ||||||||||||||
Warrants to purchase common stock shares | 10,209,994 | ||||||||||||||
Exercise price of warrants | $ 1 | ||||||||||||||
Warrants exercisable term | 5 years | ||||||||||||||
Subsequent Events | Minimum | |||||||||||||||
Subsequent Events | |||||||||||||||
Exercise price of warrants | $ 1.50 | ||||||||||||||
Class of warrants rights exercisable | 1.50 | ||||||||||||||
Subsequent Events | Warrants exercisable price at 10.00 | |||||||||||||||
Subsequent Events | |||||||||||||||
Conversion price | 10 | ||||||||||||||
Subsequent Events | Warrants exercisable price at 12.50 | |||||||||||||||
Subsequent Events | |||||||||||||||
Exercise price of warrants | 12.50 | ||||||||||||||
Subsequent Events | Warrants exercisable price at 15.00 | |||||||||||||||
Subsequent Events | |||||||||||||||
Exercise price of warrants | $ 15 | ||||||||||||||
Subsequent Events | Forward purchase agreements subscription agreements and side letter | |||||||||||||||
Subsequent Events | |||||||||||||||
Issuance of common stock to Sponsor (in shares) | 3,168,121 | ||||||||||||||
Issuance of common stock to Sponsor | $ 32,900 | ||||||||||||||
Conversion of Incremental shares | 1 | ||||||||||||||
Subsequent Events | Forward purchase agreements subscription agreements and side letter | Incremental shares | |||||||||||||||
Subsequent Events | |||||||||||||||
Issuance of common stock to Sponsor (in shares) | 314,889 | ||||||||||||||
Subsequent Events | Forward purchase agreements subscription agreements and side letter | Structuring shares | |||||||||||||||
Subsequent Events | |||||||||||||||
Issuance of common stock to Sponsor (in shares) | 200,000 | ||||||||||||||
Subsequent Events | Forward purchase agreements subscription agreements and side letter | Graf Acquisition Corp. IV [Member] | |||||||||||||||
Subsequent Events | |||||||||||||||
Issuance of common stock to Sponsor (in shares) | 34,889 | ||||||||||||||
Subsequent Events | Forward purchase agreements subscription agreements and side letter | Graf Acquisition Corp. IV [Member] | Incremental shares | |||||||||||||||
Subsequent Events | |||||||||||||||
Stock Issued During Period Shares New Issues Considerations Shares | 80,000 | ||||||||||||||
Subsequent Events | 2023 Convertible Notes | |||||||||||||||
Subsequent Events | |||||||||||||||
Total proceeds | $ 800 | $ 1,400 | $ 1,400 | $ 4,100 | |||||||||||
Borrowing term | 30 days | 3 years | |||||||||||||
Interest rate percentage | 4.55% | ||||||||||||||
Proceeds from note payable to related party | $ 300 | ||||||||||||||
Debt instrument interest rate | 5.12% | ||||||||||||||
Subsequent Events | 2027 Convertible Notes | |||||||||||||||
Subsequent Events | |||||||||||||||
Borrowing term | 4 years | ||||||||||||||
Interest rate percentage | 5% | ||||||||||||||
Warrants to purchase common stock shares | 1,000,000 | ||||||||||||||
Exercise price of warrants | $ 11.50 | ||||||||||||||
Proceeds from issuance of warrants | $ 10,000 | ||||||||||||||
Interest rate percentage in kind | 8% | ||||||||||||||
Conversion price | $ 10 | ||||||||||||||
Subsequent Events | Revolving Line of Credit | |||||||||||||||
Subsequent Events | |||||||||||||||
Maximum borrowing capacity | $ 5,000 | $ 15,000 | |||||||||||||
Borrowing term | 1 year | ||||||||||||||
Description of Variable Rate Basis | one month | ||||||||||||||
Variable rate percentage | 2.85% | ||||||||||||||
Interest rate percentage | 7.50% | ||||||||||||||
Issuance fees | $ 100 | ||||||||||||||
Restricted cash balance to be maintained | 300 | ||||||||||||||
Amount of draw executed | $ 1,100 | $ 3,800 | |||||||||||||
Repayments of draw | $ 0 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 8,786 | $ 117 |
Accounts receivable | 0 | 29 |
Restricted cash | 250 | 0 |
Prepaid expenses and other current assets | 1,313 | 204 |
Total current assets | 10,349 | 350 |
Property and equipment, net | 14,670 | 15,521 |
Operating lease right-of-use assets, net | 89 | 362 |
Capitalized software, net | 90 | 97 |
Total assets | 25,198 | 16,330 |
Current liabilities: | ||
Accounts payable and accrued expenses (including related party amounts of $401 and $81 as of September 30, 2023 and December 31, 2022, respectively) | 12,965 | 2,652 |
Convertible promissory notes, current | 0 | 11,392 |
Convertible promissory notes, due to related parties | 0 | 263 |
Revolving line of credit | 4,931 | 0 |
Related party loan, current | 300 | 0 |
Operating lease liability | 96 | 379 |
Other current liabilities (including related party amounts of $160 and zero, as of September 30, 2023 and December 31, 2022, respectively) | 355 | 55 |
Forward purchase derivative liability | 20,201 | 0 |
Total current liabilities | 38,848 | 14,741 |
Related party loans | 5,000 | 0 |
Deferred tax liability | 26 | 26 |
Derivative warrant liabilities | 12,255 | 0 |
Senior convertible promissory notes, noncurrent, due to related parties | 9,707 | 0 |
Total liabilities | 65,836 | 14,767 |
Commitments and contingencies (Note 14) | ||
Stockholders' equity (deficit): | ||
Common stock, $0.0001 par value; 500,000,000 authorized shares as of each of September 30, 2023 and December 31, 2022; 21,888,976 and 13,303,795 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 2 | 1 |
Additional paid-in capital | 120,799 | 80,738 |
Subscription receivable | (32,915) | 0 |
Accumulated deficit | (128,524) | (79,176) |
Total stockholders' equity (deficit) | (40,638) | 1,563 |
Total liabilities and stockholders' equity (deficit) | $ 25,198 | $ 16,330 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2023 | Sep. 29, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts payable and accrued expenses (including related party amounts of $401 and $81 as of September 30, 2023 and December 31, 2022, respectively) | $ 12,965,000 | $ 2,652,000 | $ 2,202,000 | |
Other current liabilities (including related party amounts of $160 and zero, as of September 30, 2023 and December 31, 2022, respectively) | $ 355,000 | $ 55,000 | $ 1,930,000 | |
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Common stock, shares authorized (shares) | 500,000,000 | 500,000,000 | 500,000,000 | |
Common stock, shares issued (in shares) | 21,888,976 | 13,303,795 | 5,873,711 | |
Common stock outstanding (in shares) | 21,888,976 | 21,888,976 | 13,303,795 | 5,873,711 |
Related Party | ||||
Accounts payable and accrued expenses (including related party amounts of $401 and $81 as of September 30, 2023 and December 31, 2022, respectively) | $ 401,000 | $ 81,000 | $ 0 | |
Other current liabilities (including related party amounts of $160 and zero, as of September 30, 2023 and December 31, 2022, respectively) | $ 160,000 | $ 0 | $ 1,867,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenues | $ 0 | $ 3 | $ 0 | $ 77 |
Costs and expenses: | ||||
Cost of revenues | 0 | 0 | 0 | 3 |
Research and development (including related party amounts of $401, $140, $401 and $337 for the three months ended September 30, 2023 and 2022 and nine months ended September 30, 2023 and 2022, respectively) | 3,929 | 4,121 | 11,577 | 12,659 |
General and administrative | 2,974 | 1,874 | 8,737 | 5,501 |
Total expenses | 6,903 | 5,995 | 20,314 | 18,163 |
Loss from operations | (6,903) | (5,992) | (20,314) | (18,086) |
Other income (expense): | ||||
Interest expense (including related party amounts of $63, $628, $160 and $1,663 for the three months ended September 30, 2023 and 2022 and the nine months ended September 30, 2023 and 2022, respectively) | (211) | (636) | (307) | (1,690) |
Change in fair value of convertible promissory notes and convertible promissory notes due to related parties (including related party amounts of $42, $1, $12 and $3 for the three months ended September 30, 2023 and 2022 and the nine months ended September 30, 2023 and 2022, respectively) | 1,741 | (73) | (1,043) | (88) |
Loss on issuance of forward purchase contract | (24,475) | 0 | (24,475) | 0 |
Transaction costs expensed | (3,329) | 0 | (3,329) | 0 |
Other income, net | 0 | 8 | 120 | 58 |
Net loss before provision for income taxes | (33,177) | (6,693) | (49,348) | (19,806) |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net loss | (33,177) | (6,693) | (49,348) | (19,806) |
Comprehensive loss | $ (33,177) | $ (6,693) | $ (49,348) | $ (19,806) |
Earnings Per Share [Abstract] | ||||
Weighted-average common shares outstanding, basic (in shares) | 13,397,968 | 6,088,729 | 13,342,568 | 5,962,841 |
Weighted-average common shares outstanding, diluted (in shares) | 13,397,968 | 6,088,729 | 13,342,568 | 5,962,841 |
Net loss per share, basic (in usd per share) | $ (2.48) | $ (1.10) | $ (3.70) | $ (3.32) |
Net loss per share, diluted (in usd per share) | $ (2.48) | $ (1.10) | $ (3.70) | $ (3.32) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Research and development (including related party amounts of $401, $140, $401 and $337 for the three months ended September 30, 2023 and 2022 and nine months ended September 30, 2023 and 2022, respectively) | $ 3,929 | $ 4,121 | $ 11,577 | $ 12,659 |
Interest expense (including related party amounts of $63, $628, $160 and $1,663 for the three months ended September 30, 2023 and 2022 and the nine months ended September 30, 2023 and 2022, respectively) | 211 | 636 | 307 | 1,690 |
Change in fair value of convertible promissory notes and convertible promissory notes due to related parties (including related party amounts of $42, $1, $12 and $3 for the three months ended September 30, 2023 and 2022 and the nine months ended September 30, 2023 and 2022, respectively) | 1,741 | (73) | (1,043) | (88) |
Related Party | ||||
Research and development (including related party amounts of $401, $140, $401 and $337 for the three months ended September 30, 2023 and 2022 and nine months ended September 30, 2023 and 2022, respectively) | 401 | 140 | 401 | 337 |
Interest expense (including related party amounts of $63, $628, $160 and $1,663 for the three months ended September 30, 2023 and 2022 and the nine months ended September 30, 2023 and 2022, respectively) | 63 | 628 | 160 | 1,663 |
Change in fair value of convertible promissory notes and convertible promissory notes due to related parties (including related party amounts of $42, $1, $12 and $3 for the three months ended September 30, 2023 and 2022 and the nine months ended September 30, 2023 and 2022, respectively) | $ 42 | $ 1 | $ 12 | $ 3 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) $ in Thousands | Previously Reported Common Stock | Previously Reported Additional Paid-in Capital | Previously Reported Subscription Receivable | Previously Reported Accumulated Deficit | Previously Reported | Revision of Prior Period, Adjustment Common Stock | Revision of Prior Period, Adjustment Additional Paid-in Capital | Revision of Prior Period, Adjustment Subscription Receivable | Revision of Prior Period, Adjustment Accumulated Deficit | Revision of Prior Period, Adjustment | Common Stock | Additional Paid-in Capital | Subscription Receivable | Accumulated Deficit | Total |
Balance as of beginning of period (in shares) at Dec. 31, 2020 | 13,914,370 | (13,914,370) | |||||||||||||
Balance as of beginning of period at Dec. 31, 2020 | $ 14 | $ (14) | |||||||||||||
Balance as of end of period (in shares) at Dec. 31, 2021 | 14,382,093 | (14,382,093) | 0 | ||||||||||||
Balance as of end of period at Dec. 31, 2021 | $ 14 | $ (14) | $ 0 | ||||||||||||
Balance as of beginning of period (in shares) at Dec. 31, 2020 | 5,682,691 | 5,682,691 | |||||||||||||
Beginning balance at Dec. 31, 2020 | $ 14,200 | $ (29,157) | (14,943) | $ 1 | $ 13 | $ 1 | $ 14,213 | $ (29,157) | (14,943) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Stock-based compensation | 93 | $ 93,000 | |||||||||||||
Exercise of common stock options (in shares) | 191,020 | 191,020 | |||||||||||||
Exercise of common stock options | 63 | $ 63,000 | |||||||||||||
Net loss | (23,265) | (23,265) | |||||||||||||
Balance as of ending of period (in shares) at Dec. 31, 2021 | 5,873,711 | 5,873,711 | |||||||||||||
Ending balance at Dec. 31, 2021 | 14,356 | $ 0 | (52,422) | $ (38,052) | $ 1 | 13 | $ 0 | $ 0 | $ 0 | $ 1 | 14,369 | $ 0 | (52,422) | $ (38,052) | |
Balance as of end of period (in shares) at Sep. 30, 2022 | 0 | ||||||||||||||
Balance as of end of period at Sep. 30, 2022 | $ 0 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Stock-based compensation | 54 | 0 | 0 | 54 | |||||||||||
Exercise of common stock options (in shares) | 485,939 | ||||||||||||||
Exercise of common stock options | 160 | 0 | 0 | 160 | |||||||||||
Net loss | 0 | 0 | (19,806) | (19,806) | |||||||||||
Balance as of ending of period (in shares) at Sep. 30, 2022 | 6,359,650 | ||||||||||||||
Ending balance at Sep. 30, 2022 | $ 1 | 14,583 | 0 | (72,228) | $ (57,644) | ||||||||||
Balance as of beginning of period (in shares) at Dec. 31, 2021 | 14,382,093 | (14,382,093) | 0 | ||||||||||||
Balance as of beginning of period at Dec. 31, 2021 | $ 14 | $ (14) | $ 0 | ||||||||||||
Balance as of end of period (in shares) at Dec. 31, 2022 | 32,575,043 | (32,575,043) | 0 | ||||||||||||
Balance as of end of period at Dec. 31, 2022 | $ 33 | $ (33) | $ 0 | ||||||||||||
Balance as of beginning of period (in shares) at Dec. 31, 2021 | 5,873,711 | 5,873,711 | |||||||||||||
Beginning balance at Dec. 31, 2021 | 14,356 | 0 | (52,422) | (38,052) | $ 1 | 13 | 0 | 0 | 0 | $ 1 | 14,369 | 0 | (52,422) | (38,052) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Stock-based compensation | 69 | $ 69 | |||||||||||||
Exercise of common stock options (in shares) | 486,296 | 486,296 | |||||||||||||
Exercise of common stock options | 161 | $ 161 | |||||||||||||
Net loss | (26,754) | (26,754) | |||||||||||||
Balance as of ending of period (in shares) at Dec. 31, 2022 | 13,303,795 | 13,303,795 | |||||||||||||
Ending balance at Dec. 31, 2022 | 80,706 | 0 | (79,176) | $ 1,563 | $ 1 | 32 | 0 | 0 | $ 0 | $ 1 | 80,738 | 0 | (79,176) | $ 1,563 | |
Balance as of beginning of period (in shares) at Jun. 30, 2022 | 14,474,484 | (14,474,484) | 0 | ||||||||||||
Balance as of beginning of period at Jun. 30, 2022 | $ 14 | $ (14) | $ 0 | ||||||||||||
Balance as of end of period (in shares) at Sep. 30, 2022 | 0 | ||||||||||||||
Balance as of end of period at Sep. 30, 2022 | $ 0 | ||||||||||||||
Balance as of beginning of period (in shares) at Jun. 30, 2022 | 0 | 5,911,444 | 5,911,444 | ||||||||||||
Beginning balance at Jun. 30, 2022 | $ 0 | 14,405 | 0 | (65,535) | $ (51,116) | $ 1 | 13 | 0 | 0 | $ 0 | $ 1 | 14,418 | 0 | (65,535) | (51,116) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Stock-based compensation | $ 0 | 16 | 0 | 0 | 16 | ||||||||||
Exercise of common stock options (in shares) | 448,206 | ||||||||||||||
Exercise of common stock options | $ 0 | 149 | 0 | 0 | 149 | ||||||||||
Net loss | $ 0 | 0 | 0 | (6,693) | (6,693) | ||||||||||
Balance as of ending of period (in shares) at Sep. 30, 2022 | 6,359,650 | ||||||||||||||
Ending balance at Sep. 30, 2022 | $ 1 | 14,583 | 0 | (72,228) | $ (57,644) | ||||||||||
Balance as of beginning of period (in shares) at Dec. 31, 2022 | 32,575,043 | (32,575,043) | 0 | ||||||||||||
Balance as of beginning of period at Dec. 31, 2022 | $ 33 | $ (33) | $ 0 | ||||||||||||
Balance as of end of period (in shares) at Sep. 30, 2023 | 0 | ||||||||||||||
Balance as of end of period at Sep. 30, 2023 | $ 0 | ||||||||||||||
Balance as of beginning of period (in shares) at Dec. 31, 2022 | 13,303,795 | 13,303,795 | |||||||||||||
Beginning balance at Dec. 31, 2022 | 80,706 | 0 | (79,176) | $ 1,563 | $ 1 | 32 | 0 | 0 | $ 0 | $ 1 | 80,738 | 0 | (79,176) | 1,563 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Stock-based compensation | 3,208 | 0 | 0 | 3,208 | |||||||||||
Reverse recapitalization transactions, net (in shares) | 8,572,314 | ||||||||||||||
Reverse recapitalization transactions, net | $ 1 | 36,842 | (32,915) | 0 | $ 3,928 | ||||||||||
Exercise of common stock options (in shares) | 12,867 | 12,866 | |||||||||||||
Exercise of common stock options | 11 | 0 | 0 | $ 11 | |||||||||||
Net loss | 0 | 0 | (49,348) | (49,348) | |||||||||||
Balance as of ending of period (in shares) at Sep. 30, 2023 | 21,888,976 | ||||||||||||||
Ending balance at Sep. 30, 2023 | $ 2 | 120,799 | (32,915) | (128,524) | $ (40,638) | ||||||||||
Balance as of beginning of period (in shares) at Jun. 30, 2023 | 32,606,548 | (32,606,548) | 0 | ||||||||||||
Balance as of beginning of period at Jun. 30, 2023 | $ 33 | $ (33) | $ 0 | ||||||||||||
Balance as of end of period (in shares) at Sep. 30, 2023 | 0 | ||||||||||||||
Balance as of end of period at Sep. 30, 2023 | $ 0 | ||||||||||||||
Balance as of beginning of period (in shares) at Jun. 30, 2023 | 0 | 13,316,662 | 13,316,662 | ||||||||||||
Beginning balance at Jun. 30, 2023 | $ 0 | $ 82,958 | $ 0 | $ (95,347) | $ (12,356) | $ 1 | $ 32 | $ 0 | $ 0 | $ 0 | $ 1 | 82,990 | 0 | (95,347) | (12,356) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Stock-based compensation | $ 0 | 967 | 0 | 0 | 967 | ||||||||||
Reverse recapitalization transactions, net (in shares) | 8,572,314 | ||||||||||||||
Reverse recapitalization transactions, net | $ 1 | 36,842 | (32,915) | 0 | 3,928 | ||||||||||
Net loss | $ 0 | 0 | 0 | (33,177) | (33,177) | ||||||||||
Balance as of ending of period (in shares) at Sep. 30, 2023 | 21,888,976 | ||||||||||||||
Ending balance at Sep. 30, 2023 | $ 2 | $ 120,799 | $ (32,915) | $ (128,524) | $ (40,638) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Operating Activities | ||
Net loss | $ (49,348) | $ (19,806) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 903 | 904 |
Stock-based compensation | 3,207 | 54 |
Noncash lease expense | 273 | 331 |
Change in fair value of convertible promissory notes and convertible promissory notes due to related parties | 1,043 | 88 |
Noncash interest expense (including related party amounts of $160 and $1,663 for the nine months ended September 30, 2023 and 2022, respectively) | 300 | 1,663 |
Transaction costs expensed | 3,329 | 0 |
Loss on issuance of forward purchase contract | 24,475 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 29 | (45) |
Prepaid expenses and other current assets | (1,037) | (47) |
Accounts payable and accrued expenses | 2,100 | 91 |
Operating lease liabilities | (283) | (327) |
Other, net | 0 | 3 |
Net cash used in operating activities | (15,009) | (17,091) |
Investing activities | ||
Purchases of property and equipment | 0 | (109) |
Purchases of capitalized software | (30) | (49) |
Net cash used in investing activities | (30) | (158) |
Financing activities | ||
Proceeds from exercise of common stock options | 12 | 160 |
Proceeds from related party loans | 5,300 | 17,500 |
Proceeds from draws on revolving line of credit | 4,931 | 0 |
Proceeds from issuance of common stock | 1,667 | 0 |
Proceeds from issuance of PIPE warrants | 10,210 | 0 |
Payment of debt issuance costs on revolving line of credit | (72) | 0 |
Repayments on paycheck protection loan | 0 | (675) |
Payment of deferred underwriting fee | (1,250) | 0 |
Payment of transaction costs | (13,055) | 0 |
Net cash provided by financing activities | 23,958 | 16,985 |
Net increase in cash, cash equivalents, and restricted cash | 8,919 | (264) |
Cash, cash equivalents, and restricted cash at the beginning of period | 117 | 351 |
Cash, cash equivalents, and restricted cash at the end of period | 9,036 | 87 |
Cash and cash equivalents | 8,786 | 87 |
Restricted cash | 250 | 0 |
Total cash, cash equivalents, and restricted cash | 9,036 | 87 |
Supplemental disclosure of noncash investing and financing activities | ||
Issuance of subscription receivable | 32,915 | 0 |
Conversion of legacy convertible promissory notes | 18,913 | 0 |
Unpaid transaction costs included in accounts payable and accrued expenses | 7,338 | 0 |
Assumption of derivative warrant liabilities | 2,045 | 0 |
Capitalized software costs included in accounts payable and accrued expenses | 15 | 0 |
Convertible Promissory Notes and Convertible Promissory Notes | ||
Financing activities | ||
Proceeds from issuance of convertible promissory notes and convertible promissory notes due to related parties | 6,215 | 0 |
Senior Convertible Promissory Notes with Warrants | ||
Financing activities | ||
Proceeds from issuance of convertible promissory notes and convertible promissory notes due to related parties | $ 10,000 | $ 0 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Interest expense (including related party amounts of $63, $628, $160 and $1,663 for the three months ended September 30, 2023 and 2022 and the nine months ended September 30, 2023 and 2022, respectively) | $ 300 | $ 1,663 |
Related Party | ||
Interest expense (including related party amounts of $63, $628, $160 and $1,663 for the three months ended September 30, 2023 and 2022 and the nine months ended September 30, 2023 and 2022, respectively) | $ 160 | $ 1,663 |
Company Information_2
Company Information | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Company Information | 1. Company Information NKGen Biotech, Inc. (“ Company ” or “ NKGen ”), a Delaware corporation headquartered in Santa Ana, California, is a clinical-stage biotechnology company focused on the development and commercialization of innovative autologous, allogeneic and CAR-NK natural killer cell therapies utilizing their proprietary SNK (Super-Natural-Killer) platform. The Company is majority owned and controlled by NKMAX Co., Ltd. (“ NKMAX ”), a company formed under the laws of the Republic of Korea. The Company was originally incorporated in Delaware on January 28, 2021 under the name Graf Acquisition Corp. IV (“ Graf ”), as a special-purpose acquisition company for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or engaging in any other similar business combination with one or more businesses or entities. On April 14, 2023, the Company entered into the Agreement and Plan of Merger by and among Graf, Austria Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Graf (“ Merger Sub ”), and NKGen Biotech, Inc. (“ Merger Agreement ”). Upon consummation of the transactions under the Merger Agreement on September 29, 2023 (the “ Business Combination ”), Merger Sub merged with and into NKGen Biotech, Inc. (“ Legacy NKGen ”) with Legacy NKGen surviving the merger as a wholly owned subsidiary of Graf (the “ Merger ”). In connection with the consummation of the Business Combination (the “ Closing ”), Graf was renamed to “ NKGen Biotech, Inc. ” and Legacy NKGen changed its name to “ NKGen Operating Biotech, Inc. ” The Common Stock and warrants of the combined company began trading on The Nasdaq Stock Market LLC under the symbols “ NKGN ” and “ NKGNW ”, respectively, on October 2, 2023. Throughout the notes to the unaudited condensed consolidated financial statements, unless otherwise noted or otherwise suggested by context, the “ Company ” refers to Legacy NKGen prior to the consummation of the Business Combination, and the Company after the consummation of the Business Combination. Liquidity The Company follows Financial Accounting Standards Board (“ FASB ”) Accounting Standards Codification (“ ASC ”) Topic 205-40, Presentation of Financial Statements — Going Concern , which requires that management evaluate whether there are relevant conditions and events that in aggregate raise substantial doubt about the entity’s ability to continue as a going concern and to meet its obligations as they become due within one year after the date that the condensed consolidated financial statements are issued. Under the guidance, the Company must first evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern (step 1). If the Company concludes substantial doubt is raised, management also is required to consider whether its plans alleviate that doubt (step 2). The Company has a limited operating history, has incurred significant operating losses since its inception, and the revenue and income potential of the Company’s business and market are unproven. The preparation of these condensed consolidated financial statements does not include any adjustments that may result from the outcome of this uncertainty. The Company’s condensed consolidated financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As of September 30, 2023, the Company had an accumulated deficit of $128.5 million and cash and cash equivalents of $8.8 million. To date, the Company has funded its operations primarily with the net proceeds from the issuance of convertible promissory notes, the issuance of debt to related parties, draws upon a revolving line of credit, the issuance and sale of equity securities, and proceeds from the Business Combination. The Company expects to incur substantial operating losses for the next several years and will need to obtain additional near-term financing in order to continue its research and development activities, initiate and complete clinical trials and launch and commercialize any product candidates for which it receives regulatory approval. Management has prepared cash flow forecasts which indicate that based on the Company’s expected operating losses and negative cash flows, there is substantial doubt about the Company’s ability to continue as a going concern for twelve months from the issuance of these condensed consolidated financial statements. The Company plans to continue to fund its losses from operations and capital funding needs through additional debt or equity financings to be received from related parties, private equity, or other sources. If the Company is not able to secure adequate additional funding, the Company may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, suspend or curtail planned programs, or may be forced to cease operations or file for bankruptcy protection. Any of these actions could materially harm the Company’s business, results of operations and future prospects. There can be no assurance that such financing will be available or will be at terms acceptable to the Company. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation NKMAX held a majority of the voting power of Legacy NKGen before the Business Combination and continues to hold a majority of the voting power of the Company after the Business Combination. Therefore, as there was no change in control, the Business Combination was accounted for as a common control transaction with respect to Legacy NKGen along with a reverse recapitalization of the Company. Accordingly, for accounting purposes, the financial statements of the Company represent a continuation of the financial statements of Legacy NKGen with the Business Combination being treated as the equivalent of Legacy NKGen issuing shares for the net assets of Graf, accompanied by a recapitalization. The net assets of Graf were recognized as of the Closing at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are presented as those of Legacy NKGen and the accumulated deficit of Legacy NKGen has been carried forward after Closing. Upon the consummation of the Business Combination, all of Legacy NKGen’s equity was converted into equity of the Company based upon an exchange ratio (“ Exchange Ratio ”). In addition, all stock options of Legacy NKGen were converted using the Exchange Ratio into options exercisable for shares of the Company with the same terms and vesting conditions. The Exchange Ratio as of September 29, 2023, the date of Closing, was approximately 0.408 . All periods prior to the Business Combination have been retrospectively adjusted using the Exchange Ratio to reflect the reverse recapitalization. In connection with the reverse recapitalization treatment of the Business Combination, all issued and outstanding securities of Graf upon Closing were treated as issuances of the Company upon the consummation of the Business Combination. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“ SEC ”) and generally accepted accounting principles in the United States of America (“ US GAAP ”). The Company maintains its accounting records under the accrual method of accounting in conformity with US GAAP. The condensed balance sheet as of December 31, 2022 included herein was derived from the audited financial statements as of that date. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such regulations. Accordingly, these unaudited condensed consolidated financial statements and accompanying footnotes should be read in conjunction with Legacy NKGen’s financial statements as of and for the year ended December 31, 2022. The results for the interim periods are not necessarily indicative of results for the full year. Except as described in this Note 2, there have been no material changes to NKGen’s significant accounting policies as described in NKGen’s financial statements as of and for the year ended December 31, 2022. In the opinion of management, all adjustments, of a normal recuring nature, considered necessary for a fair presentation have been included in the condensed consolidated financial statements. The Company believes that the disclosures provided herein are adequate to prevent the information presented from being misleading. Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of condensed consolidated financial statements in accordance with US GAAP requires management to make estimates and assumptions that impact the reported amounts of certain assets and liabilities, certain disclosures at the date of the condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. The most significant estimates in the Company’s condensed consolidated financial statements include, but are not limited to, accrued research and development expenses, legacy convertible promissory notes, senior convertible promissory notes due to related parties, forward purchase derivative liabilities, derivative warrant liabilities, common stock, and equity awards. These estimates and assumptions are based upon historical experience, knowledge of current events, and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results could differ materially from those estimates. Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“ CODM ”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information presented on an enterprise-wide basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it operates in one reportable segment. Additionally, the Company generates all of its revenues, and maintains all of its long-lived assets within the United States. Transaction Costs The Company capitalizes deferred transaction costs, which primarily consist of incremental legal fees, accounting fees and other costs directly attributable to anticipated capital-raising transactions. The deferred transaction costs are reclassified upon the occurrence of the associated capital-raising transactions. All deferred transaction costs during the nine months ended September 30, 2023 were reclassified upon Closing of the Business Combination. No deferred transaction costs were recorded as of December 31, 2022. Transaction costs not specific to a single instrument are allocated on a relative fair value basis. Transaction costs allocated to equity-classified instruments are recorded to additional paid in capital. Transaction costs allocated to liability-classified instruments with recurring fair value measurements are recorded as transaction costs expenses in the condensed consolidated statements of operations and comprehensive loss. Deferred Debt Issuance Costs Costs incurred through the issuance of the revolving line of credit to parties who are providing short-term financing availability are reflected as deferred debt issuance costs. These costs are generally amortized to interest expense over the life of the financing instrument using the effective interest rate method or other methods approximating the effective interest method. As of September 30, 2023, $0.1 million in deferred debt issuance costs were recorded to prepaid expenses and other current assets on the condensed consolidated balance sheets. No deferred debt issuance costs were recorded as of December 31, 2022. Restricted Cash Restricted cash consists of funds that are contractually restricted due to a revolving line of credit, which was entered into during June 2023. In accordance with the terms of the revolving line of credit, the Company is required to maintain certain cash balances with the lender from December 31, 2023 and until June 2024 or repayment of all principals and other payables to the lender under the revolving line of credit as additional collateral for the borrowings. As of September 30, 2023, $0.3 million in restricted cash was recorded on the unaudited condensed consolidated balance sheet. No restricted cash balances were recorded as of December 31, 2022. The Company includes its restricted bank deposits in cash, cash equivalents and restricted cash when reconciling beginning-of-period and end-of-period total amounts shown on the condensed statement of cash flows for the nine months ended September 30, 2023. Hybrid Instruments The Company follows Financial Accounting Standards Board (“ FASB ”) Accounting Standard Codification (“ ASC ”) 480, Distinguishing Liabilities from Equity , when evaluating the accounting for its hybrid instruments. A financial instrument that embodies an unconditional obligation, or a financial instrument other than an outstanding share that embodies a conditional obligation, that the issuer must or may settle by issuing a variable number of its equity shares shall be classified as a liability (or an asset in some circumstances) if, at inception, the monetary value of the obligation is based solely or predominantly on any one of the following: (a) a fixed monetary amount known at inception; (b) variations in something other than the fair value of the issuer’s equity shares; or (c) variations inversely related to changes in the fair value of the issuer’s equity shares. Hybrid instruments meeting these criteria are not further evaluated for any embedded derivatives and are carried as a liability at fair value at each balance sheet date. Derivative Instruments FASB ASC 815, Derivatives and Hedging Activities , requires companies to bifurcate certain features from their host instruments and account for them as free-standing derivative financial instruments should certain criteria be met. The Company does not use derivative instruments to hedge exposures to interest rate, market, or foreign currency risks. The Company evaluates its financial instruments to determine whether such instruments are derivatives or contain features that qualify as embedded derivatives. Embedded derivatives must be separately measured from the host contract if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract and the features of the derivatives. Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized in the condensed consolidated statement of operations each period. Bifurcated embedded derivatives are classified with the related host contract in the Company’s condensed consolidated balance sheet. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Debt For convertible debt instruments that are not considered liabilities under ASC 480 or ASC 815, the Company applies ASC 470, Debt , for the accounting of such instruments, including any premiums or discounts. The Company’s senior convertible promissory notes are accounted for under ASC 470. Subscription Receivable The Company records stock issuances at the effective date. If the subscription is not funded upon issuance, the Company records a subscription receivable as an asset on the balance sheet. When subscription receivables are not received prior to the issuance of financial statements at a reporting date in satisfaction of the requirements under ASC 505, Equity , the subscription receivable is reclassified as a contra account to stockholder’s equity (deficit) on the balance sheet. Fair Value Option In lieu of bifurcation, on an instrument-by-instrument basis, the Company may elect the fair value option for certain financial instruments that meet the required criteria under ASC 825, Financial Instruments . The Company elected the fair value option for its legacy convertible promissory notes, which met the required criteria under ASC 825, Financial Instruments . Interest expense associated with the legacy convertible promissory notes is included in the change in fair value of such instruments. Fair Value of Financial Instruments The Company accounts for the fair value of its financial instruments under the framework established by US GAAP which defines fair value and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Level 1 — Quoted prices in active markets for identical assets or liabilities the Company has the ability to access at the measurement date. Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of assets or liabilities. Level 3 — Pricing inputs that are unobservable, supported by little or no market activity and are significant to the fair value of the assets or liabilities. Transfers to/from Levels 1, 2, and 3 are recognized at the beginning of the reporting period. There were no transfers to/from Levels 1, 2, and 3 during the three and nine months ended September 30, 2023 and 2022. ASC 820, Fair Value Measurement , states that in many cases, the transaction price will equal the fair value (for example, that might be the case when on the transaction date, the transaction to buy an asset takes place in the market in which the asset is sold). In determining whether a transaction price represents the fair value at initial recognition, the Company considers various factors such as whether the transaction was between related parties, is a forced transaction, or whether the unit of account for the transaction price does not represent the unit of account for the measured instrument. The Company does not measure assets at fair value on a recurring basis. Refer to Note 9, Fair Value of Financial Instruments, for further discussion regarding the Company’s fair value measurements. The carrying value of the Company’s related party loans approximates fair value as the stated interest rate approximates market rates for similar loans and due to the short-term nature of such loans, which are due within three years or less from issuance. The carrying value of the Company’s cash, restricted cash, accounts payable, accrued expenses, other current liabilities, and revolving line of credit approximates fair value primarily due to the short-term nature of such accounts. Stock-Based Compensation Stock-based compensation expense is comprised of stock options awarded to employees and consultants. The Company accounts for share-based awards under the fair value method prescribed by ASC 718-10, Stock Compensation . The fair value of stock options is estimated using the Black-Scholes option pricing model on the date of grant. This option pricing model involves a number of estimates, including the per share value of the underlying common stock, exercise price, estimate of future volatility, expected term of the stock option award, risk-free interest rate and expected annual dividend yield. The fair value of the shares of common stock underlying the stock options has historically been determined by the Company’s board of directors as there was no public market for the underlying common stock prior to October 2, 2023. The Company’s board of directors determines the fair value of the Company’s common stock by considering a number of objective and subjective factors including contemporaneous third-party valuations of its common stock, the valuation of comparable companies, sales of the Company’s common stock to outside investors in arms-length transactions, the Company’s operating and financial performance, the lack of marketability, and general and industry specific economic outlook, and the implied fair values upon a merger transaction, amongst other factors. The Company recognizes the expense for options with graded- vesting schedules on a straight-line basis over the requisite service period, which is generally the vesting period. Forfeitures are recognized as they occur. Basic and Diluted Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss for the year by the weighted-average number of common shares outstanding during the year. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding and potentially dilutive securities outstanding for the period using the treasury stock or if-converted method if their inclusion is dilutive. Diluted net loss per common share is the same as basic net loss per common share because the inclusion of potentially dilutive shares would be anti-dilutive to the calculation of loss and comprehensive loss per common share. The Company has one class of shares issued and outstanding. Accordingly, basic and diluted net loss per share is not allocated among multiple classes of shares. Basic and diluted net loss per share for all periods prior to the Closing have been retrospectively adjusted by the Exchange Ratio to effect the reverse recapitalization. Potentially anti-dilutive shares excluded from the calculation of diluted net loss per share for each of the three and nine months ended September 30, 2023 include the following: Private warrants 4,721,533 Working capital warrants 523,140 Public warrants 3,432,286 PIPE warrants 10,209,994 Stock options 2,101,760 SPA warrants 1,000,000 Senior convertible notes’ shares 1,000,000 Deferred founder shares (1) 1,173,631 (1) As described in Note 8, Related Party Transactions, deferred founder shares do not have voting rights, do not participate in dividends and are not transferrable absent the Company’s consent. Therefore, while deferred founder shares are considered outstanding for legal purposes and are included in the total quantity of outstanding shares on the unaudited condensed consolidated statements of stockholders’ deficit, they are not considered outstanding for accounting purposes, including basic and diluted net loss per share purposes. Potentially anti-dilutive shares excluded from the calculation of diluted net loss per share for each of the three and nine months ended September 30, 2022 includes stock options of 423,932 (after giving effect to the Exchange Ratio), in addition to the shares underlying the Legacy Convertible Notes. The Company is unable to quantify the number of shares underlying the legacy convertible notes for each of the three and nine months ended September 30, 2022 as the quantity of shares issuable upon conversion was not determinable for those periods. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012, (the “ JOBS Act ”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s unaudited condensed consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standard Board (“ FASB ”) issued Accounting Standards Update (“ ASU ”) No. 2016-13, Measurement of Credit Losses on Financial Instruments . ASU 2016-13, together with a series of subsequently issued related ASUs, has been codified in Topic 326. Topic 326 establishes new requirements for companies to estimate expected credit losses when measuring certain financial assets, including accounts receivables. The new guidance is effective for fiscal years beginning after December 15, 2022. The Company adopted the new guidance with its fiscal year beginning January 1, 2023. The adoption of ASC 326 had no material impact on the Company’s financial statements. | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“ SEC Business Combination NKMAX held a majority of the voting power of Legacy NKGen before the Business Combination and continues to hold a majority of the voting power of the Company after the Business Combination. Therefore, as there was no change in control, the Business Combination was accounted for as a common control transaction with respect to Legacy NKGen along with a reverse recapitalization of the Company. Accordingly, for accounting purposes, the financial statements of the Company represent a continuation of the financial statements of Legacy NKGen with the Business Combination being treated as the equivalent of Legacy NKGen issuing shares for the net assets of Graf, accompanied by a recapitalization. The net assets of Graf were recognized as of the Closing at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are presented as those of Legacy NKGen and the accumulated deficit of Legacy NKGen has been carried forward after Closing. Upon the consummation of the Business Combination, all of Legacy NKGen’s equity was converted into equity of the Company based upon an exchange ratio (“ Exchange Ratio All periods prior to the Business Combination have been retrospectively adjusted using the Exchange Ratio to reflect the reverse recapitalization. In connection with the reverse recapitalization treatment of the Business Combination, all issued and outstanding securities of Graf upon Closing were treated as issuances of the Company upon the consummation of the Business Combination. Use of Estimates The preparation of financial statements in accordance with US GAAP requires management to make estimates and assumptions that impact the reported amounts of certain assets and liabilities, certain disclosures at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. The most significant estimates in the Company’s financial statements include, but are not limited to, accrued research and development expenses, convertible promissory notes, convertible promissory notes due to related parties, the valuation of common stock and equity awards. These estimates and assumptions are based upon historical experience, knowledge of current events, and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results could differ materially from those estimates. Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information presented on an enterprise-wide basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it operates in one reportable segment. Additionally, the Company generates all of its revenues, and maintains all of its long-lived assets within the United States. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. The carrying amounts reported in the balance sheets for cash and cash equivalents are valued at cost, which approximate their fair value. These investments may include money market funds, U.S. Government agencies, corporate debt securities, and commercial paper. The Company has not experienced any losses in such accounts and management believes the Company has no highly liquid investments exposed to credit risk. Concentrations of Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company minimizes the amount of credit exposure by investing cash that is not required for immediate operating needs in money market funds, government obligations, and/or commercial paper with short maturities. To date, the Company has not experienced any losses associated with this credit risk and continues to believe this exposure is not significant. Cash deposits are insured by the Federal Deposit Insurance Corporations (“ FDIC For the years ended December 31, 2021 and 2022, no customer accounted for over 10% of total revenue. As of December 31, 2021 and 2022, the Company had no trade accounts receivables outstanding and less than $0.1 million in other receivables. Property and Equipment, net Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method. Leasehold improvements are depreciated over the shorter of their estimated useful lives or the term of the lease by use of the straight-line method. Repairs and maintenance costs are charged to expense as incurred. When assets are retired or sold, the assets and accumulated depreciation are removed from the respective amounts and any gain or loss is recognized, as applicable, in the accompanying statements of operations. Capitalized Software, net Expenditures related to internal use software are capitalized. Such expenditures are amortized over their period of benefit, which are generally three-year period, using the straight-line method. Impairment of Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset, or asset group, may not be recoverable. Recoverability is measured by a comparison of the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset or asset group exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset or asset group exceeds the fair value of the asset or asset group. The Company has not recognized any impairment losses for the years ended December 31, 2021 and 2022. Fair Value of Financial Instruments The Company follows ASC 820-10, Fair Value Measurements and Disclosures The Company’s financial instruments include cash and cash equivalents, prepaid expenses, accounts payable, accrued expenses, convertible promissory notes issued from 2019 through 2022 to investors (“2019 Convertible Notes”), convertible promissory notes due to related parties (“Related Party Convertible Notes”, together with the 2019 Convertible Notes, “Convertible Notes”) and debt due to a related party (“Related Party Loans”). The carrying amount of cash and cash equivalents, prepaid expenses and other assets, accounts payable and accrued expenses are generally considered to be representative of their respective values because of the short-term nature of those instruments. The Company elects to account for its 2019 Convertible Notes and Related Party Convertible Notes, which meet the required criteria, at fair value at inception and at each subsequent reporting date. Subsequent changes in fair value of the Convertible Notes are recorded within other expenses, net on the accompanying statement of operations and comprehensive loss. Interest expense associated with the Convertible Notes is included in the change in fair value for the Convertible Notes. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. The carrying value of the Company’s Related Party Loans approximates fair value as the stated interest rate approximates market rates for similar loans and due to the short-term nature of such loans. Employee Benefit Plan Effective January 1, 2019, the Company adopted and maintains a defined contribution plan, which qualifies under Section 401(k) of the Internal Revenue Code, on behalf of its eligible employees. Employee contributions are voluntary and are determined on an individual basis, limited to the maximum amount allowable under federal tax regulations. During the years ended December 31, 2021 and 2022, the Company did not contribute to the plan. Revenue Recognition Historically, the Company recognized revenue in connection with Coronavirus Disease of 2019 (“ COVID-19 The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers The transaction price is the amount of consideration the Company is entitled to receive in exchange for the transfer of control of a product or a service to a customer. To determine the transaction price, the Company considers the existence of any significant financing component, the effects of any variable elements, noncash considerations and consideration payable to the customer. If a significant financing component exists, the transaction price is adjusted for the time value of money. If an element of variability exists, the Company must estimate the consideration it expects to receive and uses that amount as the basis for recognizing revenue as the product or the service is transferred to the customer. If a contract has multiple performance obligations, the Company allocates the transaction price to each distinct performance obligation in an amount that reflects the consideration the Company is entitled to receive in exchange for satisfying each distinct performance obligation. For each distinct performance obligation, revenue is recognized when (or as) the Company transfers control of the product or the service applicable to such performance obligation. In those instances where the Company first receives consideration in advance of satisfying its performance obligation, the Company classifies such consideration as contract liability until (or as) the Company satisfies such performance obligation. In those instances where the Company first satisfies its performance obligation prior to its receipt of consideration, the consideration is recorded as accounts receivable. The Company expenses incremental costs of obtaining and fulfilling a contract as and when incurred if the expected amortization period of the asset that would be recognized is one year or less, or if the amount of the asset is immaterial. Otherwise, such costs are capitalized as contract assets if they are incremental to the contract and amortized to expense proportionate to revenue recognition of the underlying contract. Collaboration Agreement The Company has entered into a research agreement that falls under the scope of ASC 808, Collaborative Arrangements Research and Development Expenses All research and development costs are expensed in the period incurred. Research and development expenses primarily consist of services provided by contract organizations for clinical development, salaries and related expenses for personnel, including stock-based compensation expense, outside service providers, facilities costs, fees paid to consultants and other professional services, license fees, depreciation and supplies used in research and development. Payments made prior to the receipt of goods or services to be used in research and development are capitalized until the related goods or services are received. Costs are accrued for research performed over the service periods specified in the contracts and estimates are adjusted, if required, based upon an ongoing review of the level of effort and costs actually incurred. Leases The Company accounts for its leases under ASC 842, Leases Stock-Based Compensation Stock-based compensation expense is comprised of stock options awarded to employees and consultants. The Company accounts for share-based awards under the fair value method prescribed by ASC 718-10, Stock Compensation The fair value of the shares of common stock underlying the stock options has historically been determined by the Company’s board of directors as there is no public market for the underlying common stock. The Company’s board of directors determines the fair value of the Company’s common stock by considering a number of objective and subjective factors including contemporaneous third-party valuations of its common stock, the valuation of comparable companies, sales of the Company’s common stock to outside investors in arms-length transactions, the Company’s operating and financial performance, the lack of marketability, and general and industry specific economic outlook, amongst other factors. The Company recognizes the expense for options with graded-vesting schedules on a straight-line basis over the requisite service period, which is generally the vesting period. Forfeitures are recognized as they occur. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes net deferred tax assets to the extent the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability. No tax liability has been recognized in the financial statements attributed to uncertain tax positions. Basic and Diluted Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss for the year by the weighted-average number of common shares outstanding during the year. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding and potentially dilutive securities outstanding for the period using the treasury stock or if-converted method if their inclusion is dilutive. Diluted net loss per common share is the same as basic net loss per common share, because the inclusion of potentially dilutive shares would be anti-dilutive to the calculation of loss and comprehensive loss per common share. Potentially anti-dilutive shares excluded from the calculation of diluted net loss per share for the years ended December 31, 2021 and 2022 includes stock options of 723,115 and 185,248 , respectively (after the application of the Exchange Ratio), in addition to the shares underlying the Convertible Notes. The Company is unable to quantify the number of shares underlying the Convertible Notes as the quantity of shares issuable upon conversion, as described in Note 6, is not determinable at this time. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In October 2021, the FASB issued ASU 2021-07, Compensation — Stock Compensation (Topic 718) Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses: Measurement of Credit Losses on Financial Instruments In August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
Reverse Recapitalization
Reverse Recapitalization | 9 Months Ended |
Sep. 30, 2023 | |
Reverse Recapitalization [Abstract] | |
Reverse Recapitalization | 3. Reverse Recapitalization As discussed in Note 1, Company Information, the Closing of the Business Combination occurred on September 29, 2023. In connection with the Business Combination: ● All of Legacy NKGen’s legacy convertible notes were converted into shares of Legacy NKGen common stock immediately prior to Closing and pursuant to their terms, totaling 5,579,266 shares, which were then cancelled and converted into 2,278,598 shares of the Company’s common stock after giving effect to the Exchange Ratio; ● All of Legacy NKGen’s 38,185,814 issued and outstanding shares were cancelled and converted into 15,595,262 shares of the Company’s common stock after giving effect to the Exchange Ratio (inclusive of shares attributable to the Legacy NKGen convertible notes); ● All of Legacy NKGen’s 5,146,354 issued and outstanding stock options were cancelled and converted into 2,101,760 outstanding stock options of the Company; ● The Company’s amended and restated certificate of incorporation and amended and restated bylaws were adopted; ● The Company adopted an employee stock purchase plan; and ● The Company adopted the 2023 equity incentive plan. The other related events that occurred in connection with the Closing include the following: ● The execution of the private placement agreements, as described in Note 4, Private Placement; ● The assumption of the public and private warrants, as described in Note 5, Warrants; ● The execution of the warrant subscription agreements, as described in Note 5, Warrants; ● The conversion of Legacy NKGen’s legacy convertible promissory notes, as described in Note 6, Convertible Notes; ● The execution of the securities purchase agreement, as described in Note 6, Convertible Notes; and ● The execution of the amended and restated sponsor support and lockup agreement, as described in Note 8, Related Party transactions. Refer to Note 9, Fair Value of Financial Instruments, for the Company’s measurements with respect to the financial instruments issued in connection with the foregoing agreements. Legacy NKGen incurred $7.5 million of transaction costs in connection with the Business Combination, which was determined to be a capital-raising transaction for Legacy NKGen. Of the $7.5 million in transaction costs, $4.2 million and $3.3 million was allocated on a relative fair value basis to equity-classified instruments and liability-classified instruments, respectively. The following tables reconcile elements of the Business Combination to the Company’s condensed consolidated financial statements, and should be read in conjunction with the footnotes referenced above (in thousands, except share amounts): Shares Graf public shares, net of redemptions 93,962 Private placement investors’ shares 3,683,010 Graf founder shares 2,516,744 Total Graf shares outstanding immediately prior to the Business Combination 6,293,716 Conversion of Legacy NKGen convertible promissory notes (after the application of the Exchange Ratio) 2,278,598 Legacy NKGen rollover shares (after the application of the Exchange Ratio) 13,316,662 Total Legacy NKGen shares 15,595,260 Total Company common stock outstanding immediately following the Business Combination 21,888,976 Recapitalization Closing proceeds Proceeds from issuance of common stock $ 1,667 Proceeds from issuance of PIPE warrants 10,210 Proceeds from issuance of senior convertible promissory notes with warrants 10,000 Closing disbursements Less: Payment of Graf deferred underwriter fees (1,250) Less: Payment of Graf transaction costs at Closing (1) (7,456) Less: Payment of Legacy NKGen transaction costs at Closing (3,510) Net cash proceeds from the Business Combination at Closing $ 9,661 Less: Payment of Legacy NKGen transaction costs prior to Closing (2,089) Net cash proceeds from the Business Combination $ 7,572 Noncash activity Conversion of legacy NKGen convertible promissory notes 18,913 Less: Operating liabilities assumed from Graf (860) Less: Unpaid transaction costs - assumed from Graf (1) (5,400) Less: Unpaid transaction costs – Legacy NKGen (1,938) Liability-classified instruments Less: Fair value of PIPE warrants (10,210) Less: Fair value of forward purchase derivative liability (20,201) Less: Fair value of senior convertible promissory notes (2) (9,707) Less: Fair value of private warrants (1,841) Less: Fair value of working capital warrants (204) Net equity impact of the Business Combination $ (23,876) (1) The Graf transaction costs includes a $4.0 million accrual related to a certain vendor to be paid in cash and common stock of $2.0 million each. At Closing, a cash payment of $1.3 million was disbursed to this vendor. The remaining $2.7 million amount was recognized as a component of the unpaid transaction costs assumed from Graf, of which $0.7 million represents a cash settlement obligation, and the remaining $2.0 million represents an obligation to issue a variable number of shares for a fixed monetary amount which was accounted for as a liability under ASC 480, Distinguishing Liabilities from Equity . (2) Represents allocated fair value. As presented in the unaudited condensed consolidated statements of stockholders’ deficit: Net equity impact of the Business Combination $ (23,876) Loss on issuance of forward purchase contract 24,475 Transaction costs expensed 3,329 Total Impact of Business Combination on total stockholders’ deficit (1) $ 3,928 Issuance of subscription receivable 32,915 Par value of common stock issued (1) Total Impact of Business Combination on additional paid-in capital $ 36,842 (1) Excludes impact of the Business Combination on net loss, which is presented separately in the unaudited condensed consolidated statements of stockholders’ deficit. |
Private Placement
Private Placement | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Private Placement | 4. Private Placement Background Prior to the Closing, the Company entered into private agreements (“ Private Placement Agreements ”) with investors (“ FPA Investors ”) consisting of forward purchase agreements (“ Forward Purchase Agreements ”), subscription agreements, a side letter, and escrow agreements. The Private Placement Agreements closed on September 29, 2023. Pursuant to the Private Placement Agreements, the FPA Investors purchased 3,168,121 shares of common stock (“ FPA Shares ”) for $32.9 million (“ Prepayment Amount ”). The Prepayment Amount was deposited into escrow accounts. The terms of the Private Placement Agreements provide that following a one -year period after the Closing, subject to early termination and settlement with respect to any number of FPA Shares at the election of the FPA Investors (“ Measurement Period ”), funds in the escrow accounts may be released to the FPA Investors, the Company or a combination of both based on a combination of factors, including the volume weighted average price of the Company’s common stock over a specified valuation period during the Measurement Period, the number of shares sold by the FPA Investors during the Measurement Period, and the application of antidilution provisions. The Private Placement Agreements expire at the end of the Measurement Period. All funds in escrow will be released to the Company, the FPA Investors, or a combination of both, at or before the one year anniversary of the Closing. In addition, all interest earned on the funds in the escrow accounts will be released to the FPA Investors. On the Cash Settlement Payment Date, which is the tenth business day following the last day of the valuation period commencing on the Valuation Date, the Escrow Agent will pay: (i) to us an amount equal to the number of Subscribed Shares that have not been sold by the FPA Investors as of the Valuation Date multiplied by the volume weighted daily VWAP over the Valuation Period (the "Settlement Amount") less an amount equal to $2.00 per such Subscribed Shares (the "Settlement Adjustment Amount") (unless we previously paid by the Settlement Adjustment Amount in shares of our common stock); and (ii) to the Seller all other amounts in the Escrow Account (including any interest earned on the funds in the Escrow Account). As a result, the amounts to be released to us will be based on our stock price over the valuation period. Other drivers of settlement outcomes include the application of antidilution provisions, the timing of sales and settlements, among other factors. In addition to the FPA Shares, the FPA Investors received 514,889 shares of common stock for no incremental consideration (“Bonus Shares”). The Bonus Shares are not subject to an escrow arrangement. Accounting All FPA Shares and Bonus Shares are outstanding shares of the Company that are not held in escrow, are transferrable without restrictions, and have the same voting as well as dividend and liquidation participation rights as other shares of the Company. Accordingly, such shares are equity classified and presented together with other shares of common stock in the unaudited condensed consolidated financial statements. The escrow agreements provide that funds placed into escrow are held in escrow for the benefit of the FPA Investors until they are released to the Company pursuant to the terms of the Private Placement Agreements and the Company’s creditors do not have access to the funds held in escrow in the event of bankruptcy of the Company. Accordingly, the Company has presented the Prepayment Amount of $32.9 million as a contra-equity subscription receivable because the funds held in escrow represent receivables from shareholders. The features of the Private Placement Agreements met the derivatives criteria under ASC 815 because they contained an underlying, notional amount, payment provision, and net settlement. Accordingly, a derivative liability was recognized based on the estimated measurement of the portion of the funds in escrow that could be released to the FPA Investors, based on circumstances existing as of September 30, 2023. The net balance of the Prepayment Amount presented as a subscription receivable and the derivative liability when considered together represents the estimated amount of escrow funds the Company expects to receive from the escrow accounts, based on circumstances existing as of September 30, 2023. Subsequent changes in fair value of the derivative liability associated with the Private Placement Agreements will be recognized through earnings on a quarterly basis. Upon the Closing, in addition to the $32.9 million subscription receivable, a loss on issuance of forward purchase contract totaling $24.5 million was recorded, which consisted of the fair value of the derivative liability of $20.2 million plus the fair value of the Bonus Shares of $4.3 million. |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2023 | |
Warrants [Abstract] | |
Warrants | 5. Warrants As of September 30, 2023, all warrants described below remained outstanding and unexercised. Public Warrants In connection with Graf’s initial public offering (“ IPO ”), 3,432,286 warrants were issued to Graf’s investors (“ Public Warrants ”). The Public Warrants, which entitle the registered holder to purchase one share of the Company’s common stock, have an exercise price of $11.50 per warrant, became exercisable 30 days after the completion of the Business Combination, and are set to expire five years from the completion of the Business Combination, or earlier upon redemption. The Public Warrants may be called for redemption at the sole discretion of the Company if the Company’s stock price equals or exceeds $18.00 per share and other certain conditions are met. The Public Warrants are equity classified due to terms indexed to the Company’s own stock and the satisfaction of other equity classification criteria. Private Warrants Concurrently with Graf’s IPO, Graf issued 4,721,533 warrants to Graf Acquisition Partners IV LLC (“ Private Warrants ”). The terms of the Private Warrants are identical to the Public Warrants with an exercise price of $11.50 per warrant, except that they are subject to certain transfer and sale restrictions and are not optionally redeemable so long as they are held by the initial purchasers or their permitted transferees. Additionally, the Private Warrants are exercisable on a cashless basis. If the Private Warrants are held by a party other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The Private Warrants are liability classified due to terms not indexed to the Company’s own stock. As described in Note 8, Related Party Transactions , the Private Warrants are a related party financial instrument. SPA Warrants Together with the issuance of the senior convertible notes described in Note 6, Convertible Notes, 1,000,000 warrants were issued to NKMAX at an exercise price of $11.50 per warrant (“ SPA Warrants ”). The terms of the SPA Warrants are identical to the terms of the Public Warrants. The SPA Warrants are equity classified due to terms indexed to the Company’s own stock and the satisfaction of other equity classification criteria. As described in Note 8, Related Party Transactions , the SPA Warrants are a related party financial instrument. Working Capital Warrants Prior to the Closing, Graf executed drawdowns upon a working capital loan facility. Upon Closing, the $0.8 million balance of the working capital loan facility was settled through the issuance of 523,140 warrants (“ Working Capital Warrants ”). The terms of the Working Capital Warrants are identical to the terms of the Private Warrants with an exercise price of $11.50 per warrant. The Working Capital Warrants are liability classified due to terms not indexed to the Company’s own stock. As described in Note 8, Related Party Transactions, the Working Capital Warrants are a related party financial instrument. PIPE Warrants Prior to the Closing, the Company entered into warrant subscription agreements (the “ Warrant Subscription Agreements ”) with certain investors (“ Warrant Investors ”), which closed on September 29, 2023. Pursuant to the Warrant Subscription Agreements, the Warrant Investors purchased an aggregate of 10,209,994 warrants, at a purchase price of $1.00 per warrant (“ PIPE Warrants ”) for total proceeds of $10.2 million. The PIPE Warrants are exercisable for cash (or by “cashless” exercise under certain circumstances) during the five-year period beginning on the Closing. One-third of the PIPE Warrants are exercisable initially at $10.00 per warrant, one-third of the PIPE Warrants are exercisable initially at $12.50 per warrant, and one-third of the PIPE Warrants are exercisable initially at $15.00 per warrant. The initial exercise prices of each tranche are subject to adjustment every 180 days after the Closing based upon declines in trading prices of the Company’s common stock, as well as antidilution adjustments for stock splits, stock dividends, and the like. In addition, the PIPE Warrants contain a downside protection provision, pursuant to which the Warrant Investors may demand a cashless exchange of certain PIPE Warrants and, to the extent the relevant reference price is less than $1.50 per share, a cash payment calculated as the difference between $1.50 per share and the then-current exercise price multiplied by the applicable number of warrant shares shall be paid to the Warrant Investors. The PIPE Warrants are liability classified due to terms not indexed to the Company’s own stock and their cash settlement provisions. |
Convertible Notes
Convertible Notes | 9 Months Ended |
Sep. 30, 2023 | |
Convertible Notes [Abstract] | |
Convertible Notes | 6. Convertible Notes Legacy Convertible Notes From November to December 2019, the Company issued convertible promissory notes to investors (“ 2019 Convertible Notes ”) and related parties (“ 2019 Related Party Convertible Notes ”). From March to September 2023, the Company issued additional convertible promissory notes issued to investors (“ 2023 Convertible Notes ”) and to related parties (“ 2023 Related Party Convertible Notes ”), collectively referred to as “ Legacy Convertible Notes ”. Total proceeds raised from the 2019 Convertible Notes and 2019 Related Party Convertible Notes were $10.8 million and $0.3 million, respectively, which each bore interest at 1.68% per year and had a maturity date of December 31, 2023 . Total proceeds raised from the 2023 Convertible Notes and 2023 Related Party Convertible Notes were $6.1 million and $0.1 million, respectively, which each bore interest at 4.55% per year and had maturity dates of three years from their respective issuance dates. The terms of the Legacy Convertible Notes provided for conversion into common stock upon the occurrence of a qualified financing transaction, including upon the Closing of the Business Combination. Pursuant to their terms, immediately prior to Closing, all of the Legacy Convertible Notes were converted into 5,579,266 shares of Legacy NKGen common stock, which then converted into 2,278,598 shares of the Company’s Common Stock at Closing based on the Exchange Ratio. Senior Convertible Notes Prior to the Closing, the Company entered into convertible note subscription agreements (“ Securities Purchase Agreement ”) with NKMAX for total proceeds of $10.0 million, with a four-year term and an interest rate of 5.0% paid in cash semi-annually or 8.0% paid in kind (“ Senior Convertible Notes ”), which closed on September 29, 2023. Interest began accruing at Closing and is payable semi-annually in arrears, with interest that is paid in kind (if applicable) increasing the principal amount outstanding on each interest payment date. The Company currently expects to make their interest payments in-kind in lieu of periodic cash payments. The Senior Convertible Notes are convertible at any time, in whole or in part, at NKMAX’s option at a conversion price of $10.00 per share of common stock (subject to anti-dilution adjustments in the event of stock splits and the like). The Senior Convertible Notes have a put option which may be exercised by NKMAX 2.5 years after the issuance of the Senior Convertible Notes. No less than six months after exercise of the put option, the Company will be required to repay all principal and accrued interest of the Senior Convertible Notes. Additionally, as described in Note 5, Warrants , together with the Securities Purchase Agreement, the SPA Warrants were issued to NKMAX, and accordingly, a relative fair value allocation was applied and discount was recognized on the Senior Convertible Notes as set forth in Note 9, Fair Value of Financial Instruments . There are no financial or non-financial covenants associated with the Senior Convertible Notes. During each of the three and nine months ended September 30, 2023, the Company recorded less than $0.1 million of interest expense and discount amortization related to the Senior Convertible Notes. Accrued interest of less than $0.1 million was recorded to other current liabilities within the condensed consolidated balance sheet as of September 30, 2023. As described in Note 8, Related Party Transactions , the Senior Convertible Notes are a related party financial instrument. |
Debt_2
Debt | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Debt Disclosure [Abstract] | ||
Debt | 7. Debt Revolving Line of Credit In June 2023, the Company entered into a $5.0 million revolving line of credit agreement with a commercial bank with a one-year term and an interest rate based on the higher of (i) the one month secured overnight financing rate plus 2.85% or (ii) 7.50% . Issuance fees of $0.1 million were incurred in connection with this revolving line of credit. All outstanding balances under the revolving line of credit are due and payable on June 20, 2024. The revolving line of credit is secured by all of the Company’s assets, including a deed of trust over the Company’s owned real property located in Santa Ana, California. Additionally, the Company is required to maintain a restricted cash balance of $0.3 million following the issuance. The Company will be required to maintain deposits with the lender in an amount of at least $15.0 million at all times beginning December 31, 2023 until June 20, 2024 for as long as there is a debt balance outstanding. As of September 30, 2023, the interest rate for the revolving line of credit was 8.17% . Through September 30, 2023, the Company drew down $4.9 million upon the revolving line of credit and no repayments of drawdowns occurred. Interest expense of $0.1 million was incurred upon the revolving line of credit for each of the three and nine months ended September 30, 2023. As of September 30, 2023, $0.1 million in accrued interest was recognized for the revolving line of credit, which is classified to other current liabilities within the unaudited condensed consolidated balance sheet as of September 30, 2023. No interest expense was incurred for the revolving line of credit during each of the three and nine months ended September 30, 2022. Related Party Loans Between August 2019 and April 2023, the Company entered into related party loans with NKMAX (“ Related Party Loans ”). In December 2022, the then-outstanding aggregate Related Party Loans’ principal and interest of $66.1 million was converted into 17,002,230 shares of common stock which was recognized as a capital contribution as of and for the year ended December 31, 2022. From January through April 2023, the Company entered into additional Related Party Loans with NKMAX for aggregate gross proceeds of $5.0 million. These additional Related Party Loans bear an interest rate of 4.6% and mature on December 31, 2024. There are no financial or non-financial covenants associated with the Related Party Loans. The additional Related Party Loans are not convertible into equity. In connection with the Related Party Loans, interest expenses incurred were $0.1 million and $0.6 million for the three months ended September 30, 2023 and 2022, respectively, and $0.2 million and $1.7 million for the nine months ended September 30, 2023 and 2022, respectively. Related party interest payable amounts recorded to other current liabilities on the unaudited condensed consolidated balance sheets were $0.2 million and zero as of September 30, 2023 and December 31, 2022, respectively. Short Term Related Party Loan In September 2023, NKGen raised $0.3 million in proceeds in connection with a related party loan with a 30-day term and an interest rate of 5.12% (“ Short Term Related Party Loan ”). This related party loan was not convertible into equity and was repaid in cash on October 5, 2023. Related party interest payable amounts recorded to other current liabilities on the unaudited condensed consolidated balance sheets were less than $0.1 million and zero as of September 30, 2023 and December 31, 2022, respectively. Related party interest expense was less than $0.1 million for each of the three and nine months ended September 30, 2023, and zero for each of the three and nine months ended September 30, 2022. | 6. Debt Convertible promissory notes From November through December 2019, the Company issued the 2019 Convertible Notes and the Related Party Convertible Notes for total proceeds of $11.1 million. The Convertible Notes bear interest at 1.68% per year and in the event the Company consummates, while the Convertible Notes are outstanding, an equity financing pursuant to which it sells shares of its equity securities, with an aggregate sales price of not less than $20.0 million, excluding any and all indebtedness under the Convertible Notes that is converted into Company equity securities sold in a qualified financing (“Next Round Securities”), and with the principal purpose of raising capital, then all principal, together with all unpaid accrued interest under the Notes, shall automatically convert into shares of Next Round Securities at the lesser of (i) the price obtained by dividing $300.0 million by the number of outstanding shares of common stock of the Company immediately prior to the qualified financing (assuming conversion of all securities convertible into common stock and exercise of all outstanding options and warrants, but excluding the shares of equity securities of the Company issuable upon the conversion of the Convertible Notes or other indebtedness) and (ii) a discount to the cash price per share paid by the other purchasers of Next Round Securities in the qualified financing equal to for an investor that invests up to $1.0 million in Convertible Notes: 20%, and for an investor that invests more than $1.0 million and less than $5.0 million in Convertible Notes: 25%. There are no financial or non-financial covenants associated with the Convertible Notes. The principal amounts of the Convertible Notes are due on demand as of December 31, 2022. Paycheck Protection Program Loan In May 2020, the Company received loan proceeds of $1.1 million pursuant to the Paycheck Protection Program (“PPP”). The PPP, established as part of the CARES Act, provides loans for small businesses to cover qualified payroll costs, rent, utilities, and interest on mortgage and other debt obligations. The loan has an interest rate of 1%. The loan was paid off in May 2022. The Company recorded interest expense of less than $0.1 million and $0.1 million related to the PPP loan to interest expense in the Statements of Operations and Comprehensive Loss for the years ended December 31, 2021 and 2022, respectively. |
Related-Party Transactions_2
Related-Party Transactions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Related Party Transactions [Abstract] | ||
Related-Party Transactions | 8. Related-Party Transactions Founder Shares Contemporaneously with the execution of the Merger Agreement, Graf and NKGen entered into an amended and restated sponsor support and lockup agreement (“ Amended and Restated Sponsor Support and Lockup Agreement ”). In connection with the Amended and Restated Sponsor Support and Lockup Agreement, of the 4,290,375 shares of Graf formerly held by Graf’s sponsor and insiders (“ Founder Shares ”): (i) 1,773,631 shares were forfeited, (ii) 1,173,631 shares became restricted shares subject to vesting conditions (“ Deferred Founder Shares ”), and (iii) the remaining 1,343,113 shares are subject to trading restrictions for up to two years and continued to be outstanding and fully vested shares. Deferred Founder Shares do not have voting rights, do not participate in dividends and are not transferrable. During the vesting period of five years from Closing (“ Vesting Period ”), if the trading price or price per share consideration upon a change in control for Common Stock is greater than or equal to $14.00 at any 20 trading days in a 30 consecutive trading-day period, then 873,631 Deferred Founder Shares will immediately vest; and if greater than or equal to $20.00 at any 20 trading days in a 30 consecutive trading-day period, then an additional 300,000 Deferred Founder Shares will immediately vest. In the event there is a sale of the Company, then immediately prior to the consummation of such sale, the calculated Acquiror Sale Price, as defined in the agreement, will take into account the number of Deferred Founder Shares that will vest upon a change in control. Upon the expiration of the Vesting Period, unvested Founder Shares will be forfeited and cancelled for no consideration. All Founder Shares, including Deferred Founder Shares, are equity classified primarily due to terms indexed to the Company’s own stock, including upon a change in control. Related Party Financial Instruments The Company’s related party financial instruments include (i) the Founder Shares, including Deferred Founder Shares described above in this Note 8, (ii) the SPA Warrants described in Note 5, (iii) the Working Capital Warrants described in Note 5, (iv) the Senior Convertible Notes described in Note 6, (v) select Legacy Convertible Notes described in Note 6, (vi) the Related Party Loans described in Note 7, (vii) the Short Term Related Party Loan described in Note 7, and (viii) the Private Warrants described in Note 5. Advisory and research services The Company was provided professional clinical program advisory services from Paul Song, prior to his hiring as Chief Executive Officer in December 2022. No such services were provided to or incurred by the Company during the three and nine months ended September 30, 2023. For the three and nine months ended September 30, 2022, $0.1 million and $0.3 million, respectively, in research and development expenses related to these advisory services were recorded. As of December 31, 2022, amounts payable of less than $0.1 million relating to advisory and research services from related parties remained outstanding, which were recorded to accounts payable and accrued expenses on the unaudited condensed consolidated balance sheet. As of September 30, 2023, no amounts payable remained outstanding relating to advisory and research services from related parties. Purchases of laboratory supplies For each of the three and nine months ended September 30, 2023, the Company recorded research and development expenses of $0.4 million associated with the purchase of laboratory supplies from NKMAX. For each of the three and nine months ended September 30, 2022, the Company recorded research and development expenses of $0.1 million associated with the purchase of laboratory supplies from NKMAX. As of September 30, 2023, $0.4 million remained outstanding relating to the purchase of laboratory supplies from NKMAX. As of December 31, 2022, amounts payable of $0.1 million relating to the purchase of laboratory supplies from NKMAX remained outstanding, which were recorded to accounts payable and accrued expenses on the unaudited condensed consolidated balance sheet. | 7. Related-Party Transactions Advisory and research services The Company was provided professional clinical program advisory services from Paul Song, prior to his hiring as Chief Executive Officer in December 2022. For the year ended December 31, 2021, no research and development expenses related to these advisory services were provided or recorded. For the year ended December 31, 2022, the Company recorded $0.4 million of research and development expenses related to these advisory services. As of December 31, 2022, amounts payable of less than $0.1 million remained outstanding and recorded within accounts payable and accrued expenses on the balance sheet. The Company receives scientific research consulting services from ATGEN Canada, a sister company under common ownership. For the year ended December 31, 2021, the Company recorded $0.2 million of research and development expenses for services provided by ATGEN Canada. For the year ended December 31, 2022, no research and development expenses related to these services were provided or recorded. As of December 31, 2021 and 2022, there were no outstanding amounts payable relating to these professional research services. Purchases of laboratory supplies For the years ended December 31, 2021 and 2022, the Company recorded research and development expenses totaling $0.1 million and $0.1 million, respectively, associated with the purchase of laboratory supplies from NKMAX. As of December 31, 2021 and December 31, 2022, there was zero and less than $0.1 million outstanding payables, respectively, relating to the purchase of laboratory supplies, which is recorded within accounts payable and accrued expenses on the balance sheets. Related party loans Between August 2019 and December 2022, the Company entered into multiple loan agreements with NKMAX under which the total proceeds received from related parties during the years ended December 31, 2021 and 2022 were $20.5 million and $23.0 million, respectively. The loans carry an interest rate of 4.6%. There are no financial or non-financial covenants associated with the debt. In December 2022, the aggregate outstanding related party loan principal and interest of $66.1 million was converted into 6,943,789 shares of common stock (after the application of the Exchange Ratio) which has been recognized as a capital contribution within the statements of common stock and stockholders’ equity (deficit). No related party loan amounts were outstanding as of December 31, 2022. Interest expenses incurred were $1.3 million and $2.3 million for the years ended December 31, 2021 and 2022, respectively. As of December 31, 2021 and 2022, interest payable amounts owed to related parties was $1.9 million and zero, respectively, which is recorded in other current liabilities on the balance sheets. Convertible promissory notes due to related parties In connection with the issuance of certain Convertible Notes from November 2019 to December 2019, relatives of one of the Company’s directors invested in convertible promissory notes totaling $0.5 million. As of December 31, 2021, the principal amount and the fair value of Related Party Convertible Notes held by relatives of a director of the Company were $0.3 million. As of December 31, 2022, the principal amount and related fair value of the Related Party Convertible Notes held by relatives of a director of the Company were $0.3 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | ||
Fair Value of Financial Instruments | 9. Fair Value of Financial Instruments Fair Value Hierarchy Liabilities measured at fair value on a recurring basis as of September 30, 2023 are as follows (in thousands): Fair Value Measurements at Reporting Date Using Balance as of September 30, 2023 Level 1 (1) Level 2 Level 3 Private Warrants $ 1,841 $ — $ — $ 1,841 Working Capital Warrants 204 — — 204 Forward Purchase Derivative Liability 20,201 — — 20,201 PIPE Warrants (1) 10,210 — — 10,210 Total $ 32,456 $ — $ — $ 32,456 (1) As of September 30, 2023, the fair value of the PIPE Warrants was measured using its respective transaction price as described below. In future reporting periods, the PIPE Warrants will be valued using level three inputs. Liabilities measured at fair value on a non-recurring basis as of September 30, 2023 include the Senior Convertible Notes. The valuation of the Senior Convertible Notes was determined to be a level three fair value measurement. The Senior Convertible Notes were determined to be in-scope of ASC 470, Debt . Accordingly, this instrument will not be measured at fair value on a recurring basis as the fair value measurement of this instrument was for purposes of the relative fair value allocation described below as the Senior Convertible Notes were issued together with the SPA Warrants. Liabilities measured at fair value on a recurring basis as of December 31, 2022 are as follows (in thousands): Fair Value Measurements at Reporting Date Using Balance as of December 31, 2022 Level 1 Level 2 Level 3 2019 Convertible Notes $ 11,392 $ — $ — $ 11,392 2019 Related Party Convertible Notes 263 — — 263 Total $ 11,655 $ — $ — $ 11,655 Legacy Convertible Notes The following table presents a reconciliation of the Legacy Convertible Notes: 2019 Related 2023 Related 2019 Party 2023 Party Convertible Convertible Convertible Convertible Notes Notes Notes Notes Total Balance as of December 31, 2022 $ 11,392 $ 263 $ — $ — $ 11,655 Issuance — — 4,700 125 4,825 Change in fair value 2,359 44 371 10 2,784 Balance as of June 30, 2023 $ 13,751 $ 307 $ 5,071 $ 135 $ 19,264 Issuance — — 1,390 — 1,390 Change in fair value (1,276) (31) (423) (11) (1,741) Conversion and settlement (12,475) (276) (6,038) (124) (18,913) Balance as of September 30, 2023 $ — $ — $ — $ — $ — For each of the three and nine months ended September 30, 2022, the Company recognized $0.1 million of expense associated with the change in fair value for the 2019 Convertible Notes. For each of the three and nine months ended September 30, 2022, the Company recognized less than $0.1 million of expense associated with the change in fair value of the 2019 Related Party Convertible Notes. The Company historically determined the carrying amount of the Legacy Convertible Notes using a scenario-based analysis that estimates the fair value of the Legacy Convertible Notes based on the probability-weighted present value of expected future investment returns by measuring the fair value of similar debt instruments that do not have the conversion feature. If no similar debt instrument existed, fair value was estimated by using assumptions that market participants would use in pricing a debt instrument, including market interest rates, credit standing, yield curves and volatilities. The following unobservable assumptions were used in determining the fair value of the Legacy Convertible Notes as of December 31, 2022: Probability of conversion — Probability of holding until maturity without conversion — Remaining term until potential conversion trigger date (years) — Discount yield (1) 20.0 % (1) Estimated using a comparable bond analysis and under S&P Global Inc.’s credit rating scale using a multinominal logical regression. The fair value of Legacy Convertible Notes immediately prior to their conversion at Closing was based upon the fair value of the 2,278,598 shares of the Company’s common stock issued upon their conversion totaling $18.9 million, at a per share value of $8.30 based upon the fair value of the Company’s common stock at Closing, which was the conversion date. Senior Convertible Notes The Senior Convertible Notes were recognized at Closing on September 29, 2023. There was no activity with respect to Senior Convertible Notes between Closing and September 30, 2023. Additionally, as described above in this Note 9, the Senior Convertible Notes are not measured at fair value on a recurring basis. As such, a reconciliation of the Senior Convertible Notes is not presented as the stand-alone fair value at initial recognition of $12.9 million represents the stand-alone fair value at period-end. The Company determined the stand-alone fair value of the Senior Convertible Notes using a binomial lattice model, which generates a distribution of stock prices over the term of the note, calculates the associated payoff for the note, and discounts the probability-weighted values from the lattice back to the valuation date. The fair value was estimated by using assumptions that market participants would use in pricing a convertible debt instrument, including market interest rates, credit rating, yield curves, and volatilities. The following unobservable assumptions were used in determining the fair value of the Senior Convertible Notes: Credit spread (1) 12.1 % Equity volatility 45.0 % (1) Estimated using a comparable bond analysis and under S&P Global Inc.’s credit rating scale using a multinominal logical regression. Private Warrants and Working Capital Warrants The Private Warrants and Working Capital Warrants were recognized at Closing on September 29, 2023. There was no activity, including changes in fair value, with respect to Private Warrants and Working Capital Warrants between Closing and September 30, 2023. As such, a reconciliation of the Private Warrants and Working Capital Warrants is not presented as the fair value at initial recognition of $1.8 million and $0.2 million, respectively, represents the fair value at period-end. The terms of the Private Warrants and Working Capital Warrants are identical. Accordingly, the methodology and assumptions used to value these instruments is identical. The fair value of the Private Warrants and Working Capital Warrants were measured using a Black-Scholes model. The estimated fair value of the Private Warrants and Working Capital Warrants was determined using Level 3 inputs. Inherent in a Black-Scholes model are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its Private Warrants and Working Capital Warrants based on implied volatility from the Company’s traded Private Warrants and Working Capital Warrants and from historical volatility of select peer company’s common stock that matches the expected remaining life of the Private Warrants and Working Capital Warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the Private Warrants and Working Capital Warrants. The expected life of the Private Warrants and Working Capital Warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero . The following unobservable assumptions were used in determining the fair value of the Private Warrants and Working Capital Warrants: Private Warrants volatility 9.6 % Dividend yield (per share) — PIPE Warrants The PIPE Warrants were recognized at Closing on September 29, 2023. There was no activity, including changes in fair value, with respect to PIPE Warrants between Closing and September 30, 2023. As such, a reconciliation of the PIPE Warrants is not presented as the fair value at initial recognition of $10.2 million represents the fair value at period-end. As of September 30, 2023, the fair value of the PIPE Warrants was measured using its respective transaction price of $10.2 million for 10,209,994 PIPE Warrants at a purchase price of $1.00 per warrant. In future reporting periods, the PIPE Warrants will be valued using level three inputs. The Company determined that the transaction price of the PIPE Warrants represented its fair value because the Warrant Investors were not related parties or holders of economic interest with respect to the Company prior to their investment, the consideration transferred by the Warrant Investors was cash, the transaction was not a forced transaction, and the unit of account for the transaction and the PIPE Warrants is the same as there were no other instruments issued together with the PIPE Warrants to the Warrant Investors or their related parties and affiliates in connection with the Warrant Subscription Agreements. Forward Purchase Derivative Liability The forward purchase derivative liability was recognized at Closing on September 29, 2023. There was no activity, including changes in fair value, with respect to forward purchase derivative liability between Closing and September 30, 2023. As such, a reconciliation of the forward purchase derivative liability is not presented as the fair value at initial recognition of $20.2 million represents the fair value at period-end. The fair value of the forward purchase derivative liability was estimated using a Monte Carlo simulation approach. The Company’s common share price was simulated with daily time steps for a range of various possible scenarios. The breadth of all possible scenarios was captured in an estimate of volatility, based on comparable companies’ historical equity volatilities, considering differences in their capital structure. The simulated prices were compared against the settlement adjustment features of the Forward Purchase Agreements. Under each simulated scenario of future stock price, the Company calculated the value of the forward purchase derivative liability arrangement. The average value across this range of possible scenarios, discounted to present using the risk-free rate, was used as the fair value of the forward purchase derivative liability. The following unobservable assumptions were used in determining the fair value of the forward purchase derivative liability: Dividend yield 0.0 % Equity volatility 105.0 % Relative Fair Values The Senior Convertible Notes were issued together with the SPA Warrants. Each instrument was recorded at its fair value, limited to a relative fair value based upon the percentage of its fair value to the total fair value based on the transaction price of the Securities Purchase Agreement of $10.0 million at Closing on September 29, 2023. The relative fair value of the SPA Warrants was treated as a discount to the Senior Convertible Notes, which will be amortized to interest expense over the term of the Senior Convertible Notes. The stand-alone fair value at initial recognition and as of September 30, 2023 for the Senior Convertible Notes and SPA Warrants was $12.9 million and $0.4 million, respectively. The relative fair value at initial recognition and as of September 30, 2023 for the Senior Convertible Notes and SPA Warrants was $9.7 million and $0.3 million, respectively. | 5. Fair Value Measurements The Company accounts for the fair value of its financial instruments under the framework established by US GAAP which defines fair value and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The Company’s management used the following methods and assumptions to estimate the fair value of its financial instruments: Level 1 — Quoted prices in active markets for identical assets or liabilities the Company has the ability to access at the measurement date. Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of assets or liabilities. Level 3 — Pricing inputs that are unobservable, supported by little or no market activity and are significant to the fair value of the assets or liabilities. The carrying amounts of the Company’s financial assets and financial liabilities are considered to be representative of their respective fair values because of the short-term nature of those instruments. The Company does not measure assets at fair value on a recurring basis. Liabilities measured at fair value on a recurring basis are as follows (in thousands): Fair Value Measurements at Reporting Date Using Balance as of December 31, 2021 Level 1 Level 2 Level 3 2019 Convertible Notes $ 11,219 $ — $ — $ 11,219 Related Party Convertible Notes 259 — — 259 Total $ 11,478 $ — $ — $ 11,478 Fair Value Measurements at Reporting Date Using Balance as of December 31, 2022 Level 1 Level 2 Level 3 2019 Convertible Notes $ 11,392 $ — $ — $ 11,392 Related Party Convertible Notes 263 — — 263 Total $ 11,655 $ — $ — $ 11,655 The following table presents a reconciliation of the Convertible Notes, which are measured at fair value (in thousands) on a recurring basis using significant unobservable inputs (Level 3): 2019 Related Party Convertible Convertible Notes Notes Total Balance as of December 31, 2020 $ 10,807 $ 528 $ 11,335 Transfer from related party to unrelated party 270 (270) — Change in fair value 142 1 143 Balance as of December 31, 2021 11,219 259 11,478 Change in fair value 173 4 177 Balance as of December 31, 2022 $ 11,392 $ 263 $ 11,655 The Company determines the carrying amount of the Convertible Notes by measuring the fair value of similar debt instruments that do not have the conversion feature. If no similar debt instrument exists, fair value is estimated by using assumptions that market participants would use in pricing a debt instrument, including market interest rates, credit standing, yield curves and volatilities. Determining the fair value of the Convertible Notes requires the use of accounting estimates and assumptions. These estimates and assumptions are judgmental in nature and could have a significant impact on the determination of the debt, and the associated non-cash interest expense. The following assumptions were used in determining the fair value of the Convertible notes: As of December 31, 2021 2022 Probability of conversion 90 % — Probability of holding until maturity without conversion 10 % — Remaining term until potential conversion trigger date (years) 0.75 — Discount yield (1) 17 % 20 % (1) Estimated using a comparable bond analysis and under S&P Global Inc.’s credit rating scale using a multinominal logical regression. |
Stockholders' Equity_2
Stockholders' Equity | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
Stockholders' Equity | 10. Stockholders’ Equity Reverse Recapitalization As described in Note 2, Summary of Significant Accounting Policies , all historical equity data, including stock option data, in these unaudited condensed consolidated financial statements has been retrospectively adjusted by the Exchange Ratio to reflect the reverse recapitalization that occurred on September 29, 2023. Common Stock As of September 30, 2023, the Company had authorized 500,000,000 shares of common stock, par value $0.0001 per share. As of September 30, 2023, 21,888,976 shares of common stock were issued and outstanding , and 478,111,024 shares of common stock were reserved for future issuance. Preferred Stock As of September 30, 2023, the Company had authorized 10,000,000 shares of preferred stock, par value $0.0001 . As of September 30, 2023, zero shares of preferred stock were issued or outstanding . Employee Stock Purchase Plan Upon consummation of the Business Combination, the Company adopted an employee stock purchase plan (“ ESPP ”). The maximum number of shares of the Company’s common stock that may be issued under the ESPP is 3% of the fully diluted common stock of the Company, determined as of immediately following Closing. Such maximum number of shares is subject to automatic annual increases. The Company’s employees and the employees of any designated affiliates may participate in the ESPP. The purchase price of the ESPP shares is 85% of the lesser of the fair market value of the Company’s common stock on the first day of an offering or on the applicable date of purchase. As of September 30, 2023, there were no transactions with respect to the ESPP. 2023 Plan Upon consummation of the Business Combination, the Company adopted the 2023 equity incentive plan (“ 2023 Plan ”). The maximum number of shares of common stock that may be issued under the 2023 Plan is 12% of the fully diluted common stock of the Company, determined as of immediately following Closing. Such maximum number of shares is subject to automatic annual increases. Under the 2023 Plan, restricted shares and stock options with service or performance based conditions may be granted to employees and nonemployees. Upon the effective date of the 2023 Plan, the Company may not grant any additional awards under the 2019 Plan. As of September 30, 2023, no awards were granted under the 2023 Plan. 2019 Plan The Company’s 2019 Plan (“ 2019 Plan ”) became effective on October 23, 2019. The 2019 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock unit awards and performance share awards to employees, directors, and consultants of the Company. As of September 30, 2023, the Company has only issued stock options. Stock options granted under the 2019 Plan expire no later than ten years from the date of grant and generally vest over a four-year period, with vesting occurring at a rate of 25% at the end of the first and thereafter in 36 equal monthly installments, or in the case of awards granted to board members, on a monthly basis over three or four years . In general, vested options expire if not exercised within three months after termination of service. The fair value of each employee and non-employee stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Due to the Company’s limited operating history and a lack of company-specific historical and implied volatility data, the Company estimated expected volatility based on the historical volatility of a group of similar companies that are publicly traded. The historical volatility data was computed using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards. Due to the lack of historical exercise history, the expected term of the Company’s stock options for employees has been determined utilizing the “simplified” method for awards. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The expected dividend yield is zero since the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. A summary of the Company’s stock option activity for the nine months ended September 30, 2023 is as follows: Stock Options Weighted Average Outstanding Exercise Price Outstanding as of December 31, 2022 185,231 $ 1.37 Granted 2,173,693 6.67 Forfeited (244,298) 6.61 Exercised (12,866) 1.73 Outstanding as of September 30, 2023 2,101,760 $ 6.25 The weighted average assumptions used in the Black-Scholes option pricing model to determine the fair value of stock option grants for the nine months ended September 30, 2023 were as follows: Common stock fair value $ 9.18 Risk-free interest rate 3.53 % Expected volatility 111.00 % Expected term (in years) 6.08 Expected dividend yield 0.00 % Stock options outstanding, vested and expected to vest and exercisable as of September 30, 2023 are as follows: Weighted Average Total Number of Remaining Weighted- Aggregate Stock Contractual Average Intrinsic Value Options Life (Years) Exercise Price (in thousands) Outstanding as of December 31, 2022 185,231 6.98 $ 1.37 $ 980 Outstanding as of September 30, 2023 2,101,760 9.10 $ 6.25 $ 4,318 Vested and expected to vest as of September 30, 2023 2,101,760 9.10 $ 6.25 $ 4,318 Exercisable as of September 30, 2023 268,236 7.48 $ 3.40 $ 1,315 Intrinsic value is calculated as the difference between the exercise price of the underlying options and the estimated fair value of the common stock for the options that had exercise prices that were lower than the per share fair value of the common stock on the related measurement date. The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2023 was $0.1 million. The aggregate fair value of stock options vested during the nine months ended September 30, 2023 was $0.9 million. As of September 30, 2023, the total unrecognized stock-based compensation related to unvested stock option awards granted was $14.6 million, which the Company expects to recognize over a remaining weighted- average period of approximately 3.2 years. Stock-based compensation expense, recognized in the Company’s condensed statements of operations and comprehensive loss for the 2019 Plan was recorded as follows (in thousands): Three Months Ended Nine Months Ended September 30 September 30 2023 2022 2023 2022 Research and development $ 197 $ 11 $ 735 $ 34 General and administrative 770 5 2,472 20 Total stock-based compensation expense $ 967 $ 16 $ 3,207 $ 54 | 9. Stockholders’ Equity Reverse Recapitalization As described in Note 2, Summary of Significant Accounting Policies , all historical equity data, including stock option data, in these financial statements has been retrospectively adjusted by the Exchange Ratio to reflect the reverse recapitalization that occurred on September 29, 2023. Common Stock As of December 31, 2021 and 2022, the Company had authorized 500,000,000 shares of common stock, par value $0.0001 per share. As of December 31, 2021 and 2022, 5,873,711 and 13,303,795 shares of common stock were issued and outstanding, respectively. As of December 31, 2021 and 2022, 494,126,289 and 486,696,205 shares of common stock were reserved for future issuance, respectively. Equity Incentive Plans The Company’s 2019 Plan (“2019 Plan”) became effective on October 23, 2019. The 2019 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock unit awards and performance share awards to employees, directors, and consultants of the Company. As of December 31, 2022, the Company has only issued stock options. The 2019 Plan authorized up to 2,780,000 shares to be issued under the plan as of December 31, 2022. As of December 31, 2022, the Company had issued 867,572 stock options under the 2019 Plan. As of December 31, 2022, a total of 266,668 shares remained available for future issuance under the 2019 Plan. Stock options granted under the 2019 Plan expire no later than ten years from the date of grant and generally vest over a four-year period, with vesting occurring at a rate of 25% at the end of the first and thereafter in 36 equal monthly installments, or in the case of awards granted to board members, on a monthly basis over three The fair value of each employee and non-employee stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Due to the Company’s limited operating history and a lack of company-specific historical and implied volatility data, the Company estimated expected volatility based on the historical volatility of a group of similar companies that are publicly traded. The historical volatility data was computed using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards. Due to the lack of historical exercise history, the expected term of the Company’s stock options for employees has been determined utilizing the “simplified” method for awards. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The expected dividend yield is zero since the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. A summary of the Company’s stock option activity for the years ended December 31, 2021 and 2022 is as follows: Stock Options Weighted Average Outstanding Exercise Price Outstanding as of December 31, 2020 1,034,074 $ 1.00 Exercised (191,020) 0.34 Forfeited (119,939) 3.28 Outstanding as of December 31, 2021 723,115 $ 0.81 Exercised (486,296) 0.34 Forfeited (51,588) 2.11 Outstanding as of December 31, 2022 185,231 $ 1.37 There were no stock options granted during the years ended December 31, 2021 and 2022. Stock options outstanding, vested and expected to vest and exercisable as of December 31, 2021 and 2022 are as follows: Weighted Total Average Weighted- Aggregate Remaining Average Intrinsic Number of Contractual Exercise Value Stock Options Life (Years) Price (in thousands) Outstanding as of December 31, 2021 723,115 7.79 $ 0.81 $ 3,674 Outstanding as of December 31, 2022 185,231 6.98 $ 1.37 $ 980 Vested and expected to vest as of December 31, 2022 185,231 6.98 $ 1.37 $ 980 Exercisable as of December 31, 2022 146,053 6.94 $ 1.13 $ 807 Intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value of the common stock for the options that had exercise prices that were lower than the per share fair value of the common stock on the date of exercise. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2021 and 2022 was $0.1 million and $3.1 million, respectively. The aggregate fair value of stock options vested during the years ended December 31, 2021 and 2022 was $0.3 million and $0.6 million, respectively. As of December 31, 2022, the total unrecognized stock-based compensation related to unvested stock option awards granted was $0.1 million, which the Company expects to recognize over a remaining weighted-average period of approximately 1.1 years. Stock-based compensation expense, recognized in the Company’s statements of operations for the 2019 Plan was recorded as follows for the years ended December 31, 2021 and 2022 (in thousands): Years Ended December 31, 2021 2022 Research and development $ 44 $ 45 General and administrative 49 24 Total stock-based compensation expense $ 93 $ 69 |
Property and Equipment, net_2
Property and Equipment, net | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Property and Equipment, net | 11. Property and Equipment, net Property and equipment, net consist of the following (in thousands): September 30, December 31, Useful Life 2023 2022 Land — $ 5,025 $ 5,025 Buildings 40 years 8,325 8,325 Furniture and fixtures 7 years 677 677 Lab equipment 5 years 4,003 4,003 Leasehold improvements Lesser of estimated useful life or related lease term 52 52 Office equipment 5 years 17 17 Vehicles 5 years 112 112 18,211 18,211 Less: Accumulated depreciation (3,541) (2,690) $ 14,670 $ 15,521 Depreciation expense related to property and equipment was $0.3 million for each of the three months ended September 30, 2023 and 2022, and $0.9 million for each of the nine months ended September 30, 2023 and 2022. | 3. Property and Equipment, net Property and equipment, net consist of the following (in thousands) as of December 31: December 31, Useful Life 2021 2022 Land — $ 5,025 $ 5,025 Buildings 40 years 8,311 8,325 Furniture and fixtures 7 years 677 677 Lab equipment 5 years 3,907 4,003 Leasehold improvements Lesser of estimated useful life or related lease term 52 52 Office equipment 5 years 17 17 Vehicles 5 years 112 112 18,101 18,211 Less: Accumulated depreciation (1,534) (2,690) $ 16,567 $ 15,521 Depreciation expense related to property and equipment was $1.1 million and $1.2 |
Additional Balance Sheet Info_4
Additional Balance Sheet Information | 9 Months Ended |
Sep. 30, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
Additional Balance Sheet Information | 12. Additional Balance Sheet Information Prepaid expenses and other current assets consist of the following (in thousands): September 30, December 31, 2023 2022 Prepaid expenses $ 1,200 $ 133 Other receivables 41 67 Revolving line of credit issuance fees 72 — Other — 4 Prepaid expenses and other current assets $ 1,313 $ 204 Accounts payable and accrued expenses consist of the following (in thousands): September 30, December 31, 2023 2022 Accounts payable $ 7,938 $ 975 Accrued liabilities 4,239 1,359 Employee compensation 730 291 Other 58 27 Accounts payable and accrued expenses $ 12,965 $ 2,652 |
Collaboration Agreement_2
Collaboration Agreement | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Collaboration Agreement | 13. Collaboration Agreement On September 17, 2020, the Company entered into a strategic collaboration with Affimed GmbH (“ Affimed ”) to initiate a Phase 1/2 trial of SNK01 in combination with AFM24, a tetravalent biologic created by Affimed designed to direct NK cell killing of epidermal growth factor receptor (“ EGFR ”) expressing tumors. Under the collaboration agreement, the Company and Affimed split the development costs of the combination product equally. The study associated with the strategic collaboration with Affimed was discontinued by mutual agreement in June 2023. Total reductions to research and development expenses for the three months ended September 30, 2023 and 2022 were $0.2 million and less than $0.1 million, respectively. Total reductions to research and development expenses for the nine months ended September 30, 2023 and 2022 were $0.2 million and $0.4 million, respectively. | 10. Collaboration Agreement On September 17, 2020, the Company entered into a strategic collaboration with Affimed GmbH (“Affimed”) to initiate a Phase 1/2 trial of SNK01 in combination with AFM24, a tetravalent biologic created by Affimed designed to direct NK cell killing of epidermal growth factor receptor (“EGFR”) expressing tumors. Under the collaboration agreement, the Company and Affimed split the development costs of the combination product equally. Total reductions to research and development expenses for each of the years ended December 31, 2021 and 2022 were $0.4 million. |
Commitments and Contingencies_4
Commitments and Contingencies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | 14. Commitments and Contingencies Leases In February 2018, the Company entered into an operating lease agreement for office space located in 10 Pasteur, Irvine with a lease term of approximately five years . Rent payments commenced in February 2018. The lease expired on February 5, 2023. In October 2021, the Company entered into an operating lease agreement for office space located in 19700 Fairchild with a lease term of approximately two years with an option to extend the term for one two-year term, which at the time was not reasonably assured of exercise and therefore, not included in the lease term. Rent payments commenced in December 2021. The lease expires on December 31, 2023. As of September 30, 2023, the Company recorded an aggregate right of use asset of $1.1 million with an accumulated amortization of $1.0 million in the condensed balance sheet as operating lease right-of-use asset, net, and an aggregate lease liability of $0.1 million in the condensed balance sheet as operating lease liability, current. As of September 30, 2023, the weighted-average remaining lease term was less than one year , and the weighted-average estimated incremental borrowing rate was 6.00% . As of September 30, 2023, total undiscounted lease payments were $0.1 million, which are committed to be made during 2023. License Agreements The Company has entered into exclusive license agreements with NKMAX, as amended in October 2021, April 2023 and August 2023 (“ Intercompany License ”), pursuant to which the Company acquired certain intellectual property. Pursuant to each license agreement, as consideration for an exclusive license to the intellectual property, the Company paid an upfront fee of $1.0 million (“ Licensed Technology ”). As the license has no alternative future use, the Company recognized the upfront fee as research and development expense in the statement of operations during the year ended December 31, 2020. Additionally, the Company is also required to pay one-time milestone payments for the first receipt of regulatory approval by the Company or any of its affiliates for a Licensed Technology in the following jurisdictions (and amounts): the United States ( $5.0 million), the European Union (“ EU ”) ( $4.0 million), and four other countries ( $1.0 million each ). The Company is obligated to pay a mid-single digit royalty on net sales of Licensed Technology by it, its affiliates or its sublicensees, subject to customary reductions. The Company is also required to pay a percentage of its sublicensing revenue ranging from a low double-digit percentage to a midsingle digit percentage. As of September 30, 2023, the Company has not paid any milestone payments and no sales of Licensed Technology have occurred. Litigation The Company is subject to legal proceedings and claims, which arise in the ordinary course of business. The Company is not subject to any currently pending legal matters or claims that would have a material adverse effect on its financial position, results of operations or cash flows. In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future but have not yet been made. The Company accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. No amounts were accrued as of September 30, 2023 and December 31, 2022. | 8. Commitments and Contingencies Leases As of December 31, 2021, the Company recorded an aggregate ROU asset of $0.8 million with an aggregate accumulated amortization of $0.3 million in the balance sheet as operating lease right-of-use assets, net, and an aggregate lease liability of $0.8 million in the balance sheet as operating lease liability, of which $0.5 million was classified as current and $0.4 million was classified as noncurrent. As of December 31, 2021, the weighted-average remaining lease term is 1.7 years and the weighted-average estimated incremental borrowing rate is 5.5%. As of December 31, 2022, the Company recorded an aggregate ROU asset of $1.1 Maturities of the operating lease liability as of December 31, 2022 are as follows (in thousands): Minimum lease payments 2023 $ 412 Total undiscounted lease payments 412 Less: imputed interest (33) Total operating lease liability $ 379 As of December 31, 2021, the Company incurred operating cost of $0.3 million, of which $0.2 million was attributable as fixed cost and less than $0.1 million was attributable as variable cost. As of December 31, 2022, the Company incurred operating cost of $0.3 million, of which $0.2 million was attributable as fixed cost and less than $0.1 million was attributable as variable cost. License Agreements The Company has entered into exclusive license agreements with NKMAX, as amended in October 2021, April 2023 and August 2023 (“Intercompany License”), pursuant to which the Company acquired certain intellectual property. Pursuant to each license agreement, as consideration for an exclusive license to the intellectual property, the Company paid an upfront fee of $1.0 million (“Licensed Technology”). As the license has no alternative future use, the Company recognized the upfront fee as research and development expense in the statement of operations during the year ended December 31, 2020. Additionally, under each agreement, the Company shall make milestone payments to NKMAX after the first receipt of Regulatory Approval of a licensed product (“Licensed Product”) in the applicable country by the Company or any of its affiliates of $5.0 million in United States of America, $4.0 million in the European Union (“EU”) and $1.0 million in any country other than United States of America or the EU for up to four additional countries. The Company shall also pay a mid-single digit fee on the net sales of Licensed Products, the manufacture, use or sale of which are claimed by or use any Licensed Technology. As of December 31, 2022, the Company has not paid any milestone payments and no sales of Licensed Products have occurred. Litigation The Company is subject to legal proceedings and claims, which arise in the ordinary course of business. The Company is not subject to any currently pending legal matters or claims that would have a material adverse effect on its accompanying financial position, results of operations or cash flows. In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future but have not yet been made. The Company accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. No amounts were accrued as of December 31, 2021 and 2022. |
Income Taxes_2
Income Taxes | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income Taxes | 15. Income Taxes The Company is subject to taxation in the U.S. and various state jurisdictions. The Company is not subject to taxation in foreign countries. The Company’s effective tax rate is calculated quarterly based upon current assumptions relating to the full year’s estimated operating results and various tax-related items. Each quarter, an estimate of the annual effective tax rate is updated should we revise our forecast of earnings based upon our operating results. If there is a change in the estimated effective annual tax rate, a cumulative adjustment is made. The Company’s effective tax rate was 0% for each of the three and nine months ended September 30, 2023 and 2022. The difference between the effective tax rate of 0% and the U.S. federal statutory rate of 21% for each of the three and nine months ended September 30, 2023 and 2022 was primarily due to changes in deferred tax balances, partially offset by valuation allowances. As of September 30, 2023 and 2022, we determined that, based on an evaluation of our history of net losses and all available evidence, both positive and negative, including our latest forecasts and cumulative losses in recent years, it was more likely than not that none or substantially none of our deferred tax assets would be realized and, therefore, we continued to record a valuation allowance. | 11. Income Taxes The Company is subject to taxation in the U.S. and various state jurisdictions. The Company is not subject to taxation in foreign countries. The provision for income taxes for the years ended December 31, 2021 and 2022 are as follows (in thousands): Years Ended December 31, 2021 2022 Current: Federal $ — $ — State — — Deferred: Federal 5 7 State — — Provision for income taxes $ 5 $ 7 A reconciliation of the income tax computed at federal statutory income tax rate to the reported provision for income taxes is as follows (in thousands): Years Ended December 31, 2021 2022 Tax benefit at statutory federal rate $ (4,885) $ (5,618) State tax, net of federal tax benefit (1,500) (1,694) Interest expense 274 477 Increase in valuation allowance 6,993 7,908 Permanent items 30 37 General business tax credit (923) (1,098) Other 16 (5) Provision for income taxes $ 5 $ 7 Significant components of the Company’s deferred income taxes are as follows (in thousands): December 31, 2021 2022 Deferred tax assets: Net operating losses $ 14,380 $ 17,890 Tax credit carryforwards, net 2,191 3,285 Accrued expenses 52 347 Section 174 R&E capitalization — 2,847 Lease liability 229 106 Stock-based compensation 15 20 Total deferred tax assets 16,867 24,495 Deferred tax liabilities: Operating lease right-of-use asset (224) (101) Property and equipment (745) (595) Total deferred tax liabilities (969) (696) Net deferred tax assets 15,898 23,799 Less: Valuation allowance (15,917) (23,825) Net deferred tax liability $ (19) $ (26) Realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Due to the lack of earnings history, the deferred tax assets have been offset by a valuation allowance net of reversing deferred tax liabilities that provided for a source of future taxable income. The valuation allowance increased by approximately $7.0 million and $7.9 million for the years ended December 31, 2021 and 2022, respectively. The Company has net operating loss carryforwards for federal and state income tax purposes of approximately $61.3 million and $71.6 million, respectively, as of December 31, 2022. Under the Tax Act and Jobs Act of 2017, the $61.3 million of federal net operating losses generated after December 31, 2017 will be carried forward indefinitely. The California net operating loss carryforwards will begin to expire in 2037 unless previously utilized. As of December 31, 2022, the Company also had federal and California research and development tax credit carryforward of approximately $2.2 million and $1.8 million, respectively. The federal research and development credit carryforwards will begin to expire in 2038. The California research and development credit carryforwards are available indefinitely. Federal and California tax laws impose significant restrictions on the utilization of net operating loss carryforwards in the event of a change in ownership of the Company, as defined by Internal Revenue Code Sections 382 and 383. The Company has not completed a formal study to determine the limitations on their tax attributes due to change in ownership and may have limitations on the utilization of net operating loss carryforwards, credit carryforwards, or other tax attributes due to ownership changes. The Inflation Reduction Act of 2022 (“IRA”) which incorporates a Corporate Alternative Minimum Tax (CAMT) was signed on August 16, 2022. The changes will be effective for the tax years beginning after December 31, 2022. The new tax law will require companies to compute two separate calculations for federal income tax purposes and pay the greater of the new minimum tax or their regular tax liability. The IRA is not expected to have a material impact for the Company. Under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act signed into law on March 27, 2020, net operating losses (“NOLs”) arising in tax years beginning after December 31, 2017, and before January 1, 2021 may be carried back to each of the five tax years preceding the tax year of such loss. Moreover, under the Tax Act as modified by the CARES Act, federal NOLs of the Company’s corporate subsidiaries generated in tax years ending after December 31, 2017 may be carried forward indefinitely, but the deductibility of federal NOLs, particularly for tax years beginning on or after January 1, 2021, may be limited. The Company is currently assessing the impact the CARES Act will have on the Company’s financial statements. Uncertain Tax Benefits No liability related to uncertain tax positions is recorded on the financial statements. The following table summarizes the activity related to the Company’s unrecognized tax benefits for the year ended December 31 (in thousands): Years Ended December 31, 2021 2022 Beginning balance $ 156 $ 269 Additions for tax positions related to the current year 113 131 Reductions for tax positions related to prior years — 3 Ending balance $ 269 $ 403 The reversal of uncertain tax benefits would not affect the effective tax rate to the extent that the Company continues to maintain a valuation allowance against its deferred tax assets. The Company does not anticipate any significant changes to unrecognized tax benefits over the next 12 months. Income tax returns are filed in the United States and California. The Company is not currently under audit by the Internal Revenue Service and the State of California. The years 2019 and forward remain open to examination for federal income tax purposes and the years 2018 and forward for California income tax to which the Company is subject. Due to net operating loss carryforwards, all years effectively remain open to income tax examination by the domestic taxing jurisdictions in which the Company files tax returns. The Company’s practice is to recognize interest and penalties related to income tax matters in income tax expense. For the years ended December 31, 2021 and 2022 the Company has not recognized any interest or penalties related to income tax in the Company’s statements of operations. |
Subsequent Events_2
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Subsequent Events [Abstract] | ||
Subsequent Events | 16. Subsequent Events Short Term Related Party Loan The Company’s $0.3 million Short Term Related Party Loan was repaid in full on October 5, 2023. | 12. Subsequent Events Amendment to the 2019 Plan and Stock Option Grants In February 2023, the Company amended its 2019 Plan to increase the aggregate number of shares of Common Stock reserved from 2,780,000 shares to 8,723,922 shares. From January 1, 2023 through May 15, 2023, the Company issued a total of 5,322,456 options to purchase common stock at an exercise price of $2.72 per share. Immediately following the issuance, a total of 1,770,389 shares remained available for future issuance under the 2019 Plan. 2023 NKMAX Loans From January through April 2023, NKGen entered into additional loan agreements with NKMAX for aggregate gross proceeds of $5.0 million. The terms of the loans included a 4.6% interest rate and a maturity date of December 31, 2024. Business Combination On April 14, 2023, the board of directors of Graf Acquisition Corp. IV, a Delaware corporation (“Graf,”), unanimously approved the Agreement and Plan of Merger, dated April 14, 2023, by and among Graf, Austria Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Graf (“Merger Sub”), and the Company (as it may be amended and/or restated from time to time, the “Merger Agreement”). If the Merger Agreement is adopted by Graf’s stockholders and the transactions under the Merger Agreement are consummated (the “Business Combination”), Merger Sub will merge with and into the Company with the Company surviving the merger as a wholly owned subsidiary of Graf (the “Merger”). In connection with the consummation of the Business Combination (the “Closing” and the date of the Closing, the “Closing Date”), Graf will be renamed “NKGen Biotech, Inc.” and the Company will change its name to “NKGen Operating Biotech, Inc.” References below to “New NKGen” denote Graf as the post-Business Combination entity. In accordance with the terms and subject to the conditions set forth in the Merger Agreement, Graf has agreed to pay to equity holders of the Company (other than holders of unvested NKGen options to purchase shares of common stock of NKGen (“NKGen options”) as of immediately prior to the effective time of the Merger (the “Effective Time”) aggregate consideration (the “Merger Consideration”) of a number of shares of newly issued common stock, par value $0.0001 per share, of New NKGen (“Common Stock”), valued at $10.00 per share, equal to the product of the number of outstanding shares of common stock of the Company (“NKGen common stock”) at the Closing, multiplied by the Exchange Ratio. The “Exchange Ratio” is equal to the quotient of (A) the sum of (i) $145.0 million plus (ii) the aggregate amount of principal and accrued interest underlying convertible promissory notes of NKGen (“NKGen Convertible Notes”) that are converted into shares of the Company common stock as of immediately prior to the effective time of the Merger (the “Effective Time”), divided by (B) $10.00, divided by (C) the number of Fully Diluted common stock of the Company (as defined below) immediately prior to the Effective Time. Prior to the Closing, the Company will use its commercially reasonable efforts to cause each convertible note to be converted into shares of NKGen common stock pursuant to its terms as of immediately prior to the Effective Time. Additionally, at the Effective Time, each outstanding and unexercised stock option of the Company will be cancelled and converted into an option to acquire Common Stock (“New NKGen Options”), provided that: (i) each such New NKGen Option shall be exercisable for that number of shares of Common Stock equal to the product (rounded down to the nearest whole number) of (A) the number of shares of NKGen common stock subject to such NKGen Option immediately prior the Effective Time multiplied by (B) the Exchange Ratio, and (ii) the per share exercise price for each share of Common Stock issuable upon exercise of the New NKGen Option shall be equal to the quotient (rounded up to the nearest whole cent) obtained by dividing (A) the exercise price per share of each NKGen Option immediately prior to the Effective Time by (B) the Exchange Ratio. 2023 Convertible Notes From March through May 15, 2023, the Company issued convertible promissory notes to investors for total proceeds of $4.1 million, of which $0.1 million was issued to a related party (the “2023 Convertible Notes”). The 2023 Convertible Notes bear interest at 4.55% per year and in the event the Company consummates, while the 2023 Convertible Notes are outstanding, an equity financing pursuant to which it sells shares of its equity securities, with an aggregate sales price of not less than $20.0 million in a qualified financing of Next Round Securities, excluding any and all indebtedness under the 2023 Convertible Notes that is converted into Next Round Securities, and with the principal purpose of raising capital, then all principal, together with all unpaid accrued interest under the 2023 Convertible Notes, shall automatically convert into shares of Next Round Securities at the lesser of (i) the price obtained by dividing (A) $300.0 million by (B) the number of outstanding shares of common stock of the Company immediately prior to the qualified financing (assuming conversion of all securities convertible into common stock and exercise of all outstanding options and warrants, but excluding the shares of equity securities of the Company issuable upon the conversion of the 2023 Convertible Notes or other indebtedness) and (ii) a discount to the cash price per share paid by the other purchasers of Next Round Securities in the qualified financing equal to for an investor that invests up to $5.0 million in the 2023 Convertible Notes: 15%, and for an investor that invests more than $5.0 million and less than $10.0 million in Notes: 20%, and for an investor that invests more than $10.0 million in 2023 Convertible Notes: 25%. The maturity dates of the 2023 Convertible Notes are three years from the respective issuance dates. Modification to the Convertible Notes In April 2023, the Company (i) modified the Convertible Notes to extend the maturity date to December 31, 2023 and (ii) modified the Convertible Notes and the 2023 Convertible Notes to provide that upon the closing of a transaction such as the Business Combination, the Convertible Notes and 2023 Convertible Notes will, immediately prior to the closing of such transaction, convert into the Company’s common stock at a conversion price equal to (a) the value ascribed to the consideration to be paid in respect of one share Amendment to NKMAX License In April 2023, the Company and NKMAX executed an amendment to the Intercompany License to expand the scope of Licensed Products initially limited to cancer treatment to any field of use. 13. Subsequent Events (unaudited) Additional 2023 Convertible Notes On May 19, 2023, the Company issued additional 2023 Convertible Notes for total proceeds of $0.8 million with the same terms as set forth above for the 2023 Convertible Notes issued from March through May 15, 2023. In August and September 2023, NKGen issued additional convertible notes of $1.4 million to investors. The terms of the additional convertible notes issued in August and September 2023 are consistent with those set forth for the 2023 Convertible Notes in Note 6. Revolving Line of Credit In June 2023, the Company entered into a $5.0 million revolving line of credit agreement with a commercial bank with a one-year term and an interest rate based on the higher of (i) the one month secured overnight financing rate plus 2.85% or (ii) 7.50%. Issuance fees of $0.1 million were incurred in connection with this revolving line of credit. The revolving line of credit is secured by all of the Company’s assets, including a deed of trust over the Company’s owned real property located in Santa Ana, California. Additionally, the Company is required to maintain a restricted cash balance of $0.3 million following the issuance. In June 2023, the Company executed a draw of $3.8 million on this revolving line of credit. In July 2023, the Company executed an additional draw of $1.1 million upon the revolving line of credit. On September 19, 2023, the minimum deposit requirement under the revolving line of credit was modified such that NKGen will be required to maintain the $15.0 million minimum deposits beginning as of December 31, 2023. No repayments of draws occurred through October 19, 2023. Collaboration Agreement The study associated with the strategic collaboration with Affimed was discontinued by mutual agreement in June 2023. Amendment to NKMAX License In August 2023, the Company and NKMAX executed an amendment to the Intercompany License to clarify that the Company shall not be responsible for certain fees or costs previously paid or incurred by NKMAX. Short Term Related Party Loan In September 2023, NKGen raised $0.3 million in proceeds in connection with a related party loan with a 30-day term and an interest rate of 5.12%. This related party loan is not convertible into equity. This loan was repaid on October 5, 2023. Employee Stock Purchase Plan Upon consummation of the Business Combination, NKGen adopted an employee stock purchase plan (“ESPP”). The maximum number of shares of NKGen common stock that may be issued under the ESPP is 3% of the fully diluted common stock of NKGen, determined as of immediately following Closing. Such maximum number of shares is subject to automatic annual increases. NKGen employees and the employees of any designated affiliates may participate in the ESPP. The purchase price of the ESPP shares is 85% of the lesser of the fair market value of NKGen common stock on the first day of an offering or on the applicable date of purchase. Warrant Subscription Agreements The Company entered into warrant subscription agreements (the “Warrant Subscription Agreements”) that closed on September 29, 2023, for total proceeds of $10.2 million with certain investors (the “Warrant Investors”), pursuant to which the Investors agreed to purchase an aggregate of 10,209,994 warrants, at a purchase price of $1.00 per warrant (the “Subscribed Warrants”). The Subscribed Warrants are exercisable for cash (or by “cashless” exercise under certain circumstances) during the five-year period beginning on the Closing Date. One-third of the Subscribed Warrants are exercisable initially at $10.00, one-third of the Subscribed Warrants are exercisable initially at $12.50, and one-third of the Subscribed Warrants are exercisable initially at $15.00. The initial exercise prices of each tranche are subject to adjustment every 180 days after the Closing based upon declines in trading prices of the Company’s common stock, as well as antidilution adjustments for stock splits, stock dividends, and the like. In addition, the Subscribed Warrants contain a downside protection provision, pursuant to which the Warrant Investors may demand a cashless exchange of certain Subscribed Warrants and, to the extent the relevant reference price is less than $1.50, a cash payment calculated as the difference between $1.50 and the then-current exercise price multiplied by the applicable number of warrant shares shall be paid to the Warrant Investors. Securities Purchase Agreement On September 29, 2023 NKGen received $10.0 million in connection with the issuance of the Senior Convertible notes which have a four-year term and an interest rate of 5.0% paid in cash semi-annually or 8.0% paid in kind (“Senior Convertible Notes”). The Senior Convertible Notes have a conversion price of $10.00 per share of common stock (subject to anti-dilution adjustments in the event of stock splits and the like), and a put option commencing 2.5 years after their issuance. Additionally, pursuant to the Securities Purchase Agreement, 1,000,000 warrants were issued to NKMAX at an exercise price of $11.50 per warrant (“SPA Warrants “). Such warrants have terms identical to the Public Warrants. Forward Purchase Agreements, Subscription Agreements, and Side Letter On September 22, 2023, September 26, 2023, and September 29, 2023, the Company entered into private agreements (“Private Placement Agreements”) with investors (“FPA Investors” or “Sellers”) consisting of Forward Purchase Agreements, Subscription Agreements, and a Side Letter. Concurrently with the Closing of the Business Combination, the FPA Investors purchased 3,168,121 shares of common stock (“Subscribed Shares”) in exchange for a subscription receivable of $32.9 million (“Prepayment Amount”), which was placed into an escrow account for the benefit of the FPA Investors (“Escrow Account”). The terms of the Private Placement Agreements provide that following a one-year period after the Closing (“Measurement Period”), subject to early termination and settlement at the election of the FPA Investors, the funds placed into the Escrow Account will be released to the Company, the FPA Investors, or a combination of both, based on a combination of factors, including the number of shares sold by the FPA Investors during the Measurement Period, the volume weighted average price of the Company’s common stock over a specified valuation period, and the application of antidilution provisions. In addition to the Subscribed Shares, the FPA Investors received an aggregate 314,889 share consideration shares (“Share Consideration Shares”), consisting of (i) the award of 200,000 Share Consideration Shares to Meteora Entities (as defined below) which were public shares redeemed and reversed by Graf Stockholders, (ii) the award of 34,889 Share Consideration Shares to Sandia Entities (as defined below) which were public shares redeemed and reversed by Graf Stockholders, and (iii) the issuance of 80,000 Share Consideration Shares, which are new shares of common stock issued in connection with the Closing, each for no cash consideration. In addition, the Meteora Entities received 200,000 structuring shares, pursuant to a side letter, (“Structuring Shares”, collectively with the Share Consideration Shares, “Incremental Shares”), which were also public shares of Graf common stock previously held by Graf Stockholders. These Incremental Shares are not subject to an escrow arrangement. The Incremental Shares were converted into shares of NKGen common stock on a one-for-one basis at Closing. Accordingly, such shares have the same voting as well as dividend and liquidation participation rights as other shares of NKGen common stock. |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of Presentation NKMAX held a majority of the voting power of Legacy NKGen before the Business Combination and continues to hold a majority of the voting power of the Company after the Business Combination. Therefore, as there was no change in control, the Business Combination was accounted for as a common control transaction with respect to Legacy NKGen along with a reverse recapitalization of the Company. Accordingly, for accounting purposes, the financial statements of the Company represent a continuation of the financial statements of Legacy NKGen with the Business Combination being treated as the equivalent of Legacy NKGen issuing shares for the net assets of Graf, accompanied by a recapitalization. The net assets of Graf were recognized as of the Closing at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are presented as those of Legacy NKGen and the accumulated deficit of Legacy NKGen has been carried forward after Closing. Upon the consummation of the Business Combination, all of Legacy NKGen’s equity was converted into equity of the Company based upon an exchange ratio (“ Exchange Ratio ”). In addition, all stock options of Legacy NKGen were converted using the Exchange Ratio into options exercisable for shares of the Company with the same terms and vesting conditions. The Exchange Ratio as of September 29, 2023, the date of Closing, was approximately 0.408 . All periods prior to the Business Combination have been retrospectively adjusted using the Exchange Ratio to reflect the reverse recapitalization. In connection with the reverse recapitalization treatment of the Business Combination, all issued and outstanding securities of Graf upon Closing were treated as issuances of the Company upon the consummation of the Business Combination. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“ SEC ”) and generally accepted accounting principles in the United States of America (“ US GAAP ”). The Company maintains its accounting records under the accrual method of accounting in conformity with US GAAP. The condensed balance sheet as of December 31, 2022 included herein was derived from the audited financial statements as of that date. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such regulations. Accordingly, these unaudited condensed consolidated financial statements and accompanying footnotes should be read in conjunction with Legacy NKGen’s financial statements as of and for the year ended December 31, 2022. The results for the interim periods are not necessarily indicative of results for the full year. Except as described in this Note 2, there have been no material changes to NKGen’s significant accounting policies as described in NKGen’s financial statements as of and for the year ended December 31, 2022. In the opinion of management, all adjustments, of a normal recuring nature, considered necessary for a fair presentation have been included in the condensed consolidated financial statements. The Company believes that the disclosures provided herein are adequate to prevent the information presented from being misleading. | Basis of Presentation The accompanying financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“ SEC |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. | |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in accordance with US GAAP requires management to make estimates and assumptions that impact the reported amounts of certain assets and liabilities, certain disclosures at the date of the condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. The most significant estimates in the Company’s condensed consolidated financial statements include, but are not limited to, accrued research and development expenses, legacy convertible promissory notes, senior convertible promissory notes due to related parties, forward purchase derivative liabilities, derivative warrant liabilities, common stock, and equity awards. These estimates and assumptions are based upon historical experience, knowledge of current events, and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results could differ materially from those estimates. | Use of Estimates The preparation of financial statements in accordance with US GAAP requires management to make estimates and assumptions that impact the reported amounts of certain assets and liabilities, certain disclosures at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. The most significant estimates in the Company’s financial statements include, but are not limited to, accrued research and development expenses, convertible promissory notes, convertible promissory notes due to related parties, the valuation of common stock and equity awards. These estimates and assumptions are based upon historical experience, knowledge of current events, and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results could differ materially from those estimates. |
Segments | Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“ CODM ”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information presented on an enterprise-wide basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it operates in one reportable segment. Additionally, the Company generates all of its revenues, and maintains all of its long-lived assets within the United States. | Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information presented on an enterprise-wide basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it operates in one reportable segment. Additionally, the Company generates all of its revenues, and maintains all of its long-lived assets within the United States. |
Transaction Costs | Transaction Costs The Company capitalizes deferred transaction costs, which primarily consist of incremental legal fees, accounting fees and other costs directly attributable to anticipated capital-raising transactions. The deferred transaction costs are reclassified upon the occurrence of the associated capital-raising transactions. All deferred transaction costs during the nine months ended September 30, 2023 were reclassified upon Closing of the Business Combination. No deferred transaction costs were recorded as of December 31, 2022. Transaction costs not specific to a single instrument are allocated on a relative fair value basis. Transaction costs allocated to equity-classified instruments are recorded to additional paid in capital. Transaction costs allocated to liability-classified instruments with recurring fair value measurements are recorded as transaction costs expenses in the condensed consolidated statements of operations and comprehensive loss. | |
Deferred Debt Issuance Costs / Debt | Deferred Debt Issuance Costs Costs incurred through the issuance of the revolving line of credit to parties who are providing short-term financing availability are reflected as deferred debt issuance costs. These costs are generally amortized to interest expense over the life of the financing instrument using the effective interest rate method or other methods approximating the effective interest method. As of September 30, 2023, $0.1 million in deferred debt issuance costs were recorded to prepaid expenses and other current assets on the condensed consolidated balance sheets. No deferred debt issuance costs were recorded as of December 31, 2022. Debt For convertible debt instruments that are not considered liabilities under ASC 480 or ASC 815, the Company applies ASC 470, Debt , for the accounting of such instruments, including any premiums or discounts. The Company’s senior convertible promissory notes are accounted for under ASC 470. | |
Restricted Cash | Restricted Cash Restricted cash consists of funds that are contractually restricted due to a revolving line of credit, which was entered into during June 2023. In accordance with the terms of the revolving line of credit, the Company is required to maintain certain cash balances with the lender from December 31, 2023 and until June 2024 or repayment of all principals and other payables to the lender under the revolving line of credit as additional collateral for the borrowings. As of September 30, 2023, $0.3 million in restricted cash was recorded on the unaudited condensed consolidated balance sheet. No restricted cash balances were recorded as of December 31, 2022. The Company includes its restricted bank deposits in cash, cash equivalents and restricted cash when reconciling beginning-of-period and end-of-period total amounts shown on the condensed statement of cash flows for the nine months ended September 30, 2023. | |
Hybrid Instruments | Hybrid Instruments The Company follows Financial Accounting Standards Board (“ FASB ”) Accounting Standard Codification (“ ASC ”) 480, Distinguishing Liabilities from Equity , when evaluating the accounting for its hybrid instruments. A financial instrument that embodies an unconditional obligation, or a financial instrument other than an outstanding share that embodies a conditional obligation, that the issuer must or may settle by issuing a variable number of its equity shares shall be classified as a liability (or an asset in some circumstances) if, at inception, the monetary value of the obligation is based solely or predominantly on any one of the following: (a) a fixed monetary amount known at inception; (b) variations in something other than the fair value of the issuer’s equity shares; or (c) variations inversely related to changes in the fair value of the issuer’s equity shares. Hybrid instruments meeting these criteria are not further evaluated for any embedded derivatives and are carried as a liability at fair value at each balance sheet date. | |
Derivative Instruments | Derivative Instruments FASB ASC 815, Derivatives and Hedging Activities , requires companies to bifurcate certain features from their host instruments and account for them as free-standing derivative financial instruments should certain criteria be met. The Company does not use derivative instruments to hedge exposures to interest rate, market, or foreign currency risks. The Company evaluates its financial instruments to determine whether such instruments are derivatives or contain features that qualify as embedded derivatives. Embedded derivatives must be separately measured from the host contract if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract and the features of the derivatives. Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized in the condensed consolidated statement of operations each period. Bifurcated embedded derivatives are classified with the related host contract in the Company’s condensed consolidated balance sheet. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. | |
Subscription Receivable | Subscription Receivable The Company records stock issuances at the effective date. If the subscription is not funded upon issuance, the Company records a subscription receivable as an asset on the balance sheet. When subscription receivables are not received prior to the issuance of financial statements at a reporting date in satisfaction of the requirements under ASC 505, Equity , the subscription receivable is reclassified as a contra account to stockholder’s equity (deficit) on the balance sheet. | |
Fair Value Option | Fair Value Option In lieu of bifurcation, on an instrument-by-instrument basis, the Company may elect the fair value option for certain financial instruments that meet the required criteria under ASC 825, Financial Instruments . The Company elected the fair value option for its legacy convertible promissory notes, which met the required criteria under ASC 825, Financial Instruments . Interest expense associated with the legacy convertible promissory notes is included in the change in fair value of such instruments. | Fair Value of Financial Instruments The Company follows ASC 820-10, Fair Value Measurements and Disclosures The Company’s financial instruments include cash and cash equivalents, prepaid expenses, accounts payable, accrued expenses, convertible promissory notes issued from 2019 through 2022 to investors (“2019 Convertible Notes”), convertible promissory notes due to related parties (“Related Party Convertible Notes”, together with the 2019 Convertible Notes, “Convertible Notes”) and debt due to a related party (“Related Party Loans”). The carrying amount of cash and cash equivalents, prepaid expenses and other assets, accounts payable and accrued expenses are generally considered to be representative of their respective values because of the short-term nature of those instruments. The Company elects to account for its 2019 Convertible Notes and Related Party Convertible Notes, which meet the required criteria, at fair value at inception and at each subsequent reporting date. Subsequent changes in fair value of the Convertible Notes are recorded within other expenses, net on the accompanying statement of operations and comprehensive loss. Interest expense associated with the Convertible Notes is included in the change in fair value for the Convertible Notes. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. The carrying value of the Company’s Related Party Loans approximates fair value as the stated interest rate approximates market rates for similar loans and due to the short-term nature of such loans. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company accounts for the fair value of its financial instruments under the framework established by US GAAP which defines fair value and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Level 1 — Quoted prices in active markets for identical assets or liabilities the Company has the ability to access at the measurement date. Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of assets or liabilities. Level 3 — Pricing inputs that are unobservable, supported by little or no market activity and are significant to the fair value of the assets or liabilities. Transfers to/from Levels 1, 2, and 3 are recognized at the beginning of the reporting period. There were no transfers to/from Levels 1, 2, and 3 during the three and nine months ended September 30, 2023 and 2022. ASC 820, Fair Value Measurement , states that in many cases, the transaction price will equal the fair value (for example, that might be the case when on the transaction date, the transaction to buy an asset takes place in the market in which the asset is sold). In determining whether a transaction price represents the fair value at initial recognition, the Company considers various factors such as whether the transaction was between related parties, is a forced transaction, or whether the unit of account for the transaction price does not represent the unit of account for the measured instrument. The Company does not measure assets at fair value on a recurring basis. Refer to Note 9, Fair Value of Financial Instruments, for further discussion regarding the Company’s fair value measurements. The carrying value of the Company’s related party loans approximates fair value as the stated interest rate approximates market rates for similar loans and due to the short-term nature of such loans, which are due within three years or less from issuance. The carrying value of the Company’s cash, restricted cash, accounts payable, accrued expenses, other current liabilities, and revolving line of credit approximates fair value primarily due to the short-term nature of such accounts. | |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense is comprised of stock options awarded to employees and consultants. The Company accounts for share-based awards under the fair value method prescribed by ASC 718-10, Stock Compensation . The fair value of stock options is estimated using the Black-Scholes option pricing model on the date of grant. This option pricing model involves a number of estimates, including the per share value of the underlying common stock, exercise price, estimate of future volatility, expected term of the stock option award, risk-free interest rate and expected annual dividend yield. The fair value of the shares of common stock underlying the stock options has historically been determined by the Company’s board of directors as there was no public market for the underlying common stock prior to October 2, 2023. The Company’s board of directors determines the fair value of the Company’s common stock by considering a number of objective and subjective factors including contemporaneous third-party valuations of its common stock, the valuation of comparable companies, sales of the Company’s common stock to outside investors in arms-length transactions, the Company’s operating and financial performance, the lack of marketability, and general and industry specific economic outlook, and the implied fair values upon a merger transaction, amongst other factors. The Company recognizes the expense for options with graded- vesting schedules on a straight-line basis over the requisite service period, which is generally the vesting period. Forfeitures are recognized as they occur. | Stock-Based Compensation Stock-based compensation expense is comprised of stock options awarded to employees and consultants. The Company accounts for share-based awards under the fair value method prescribed by ASC 718-10, Stock Compensation The fair value of the shares of common stock underlying the stock options has historically been determined by the Company’s board of directors as there is no public market for the underlying common stock. The Company’s board of directors determines the fair value of the Company’s common stock by considering a number of objective and subjective factors including contemporaneous third-party valuations of its common stock, the valuation of comparable companies, sales of the Company’s common stock to outside investors in arms-length transactions, the Company’s operating and financial performance, the lack of marketability, and general and industry specific economic outlook, amongst other factors. The Company recognizes the expense for options with graded-vesting schedules on a straight-line basis over the requisite service period, which is generally the vesting period. Forfeitures are recognized as they occur. |
Basic and Diluted Net Loss Per Common Share | Basic and Diluted Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss for the year by the weighted-average number of common shares outstanding during the year. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding and potentially dilutive securities outstanding for the period using the treasury stock or if-converted method if their inclusion is dilutive. Diluted net loss per common share is the same as basic net loss per common share because the inclusion of potentially dilutive shares would be anti-dilutive to the calculation of loss and comprehensive loss per common share. The Company has one class of shares issued and outstanding. Accordingly, basic and diluted net loss per share is not allocated among multiple classes of shares. Basic and diluted net loss per share for all periods prior to the Closing have been retrospectively adjusted by the Exchange Ratio to effect the reverse recapitalization. Potentially anti-dilutive shares excluded from the calculation of diluted net loss per share for each of the three and nine months ended September 30, 2023 include the following: Private warrants 4,721,533 Working capital warrants 523,140 Public warrants 3,432,286 PIPE warrants 10,209,994 Stock options 2,101,760 SPA warrants 1,000,000 Senior convertible notes’ shares 1,000,000 Deferred founder shares (1) 1,173,631 (1) As described in Note 8, Related Party Transactions, deferred founder shares do not have voting rights, do not participate in dividends and are not transferrable absent the Company’s consent. Therefore, while deferred founder shares are considered outstanding for legal purposes and are included in the total quantity of outstanding shares on the unaudited condensed consolidated statements of stockholders’ deficit, they are not considered outstanding for accounting purposes, including basic and diluted net loss per share purposes. Potentially anti-dilutive shares excluded from the calculation of diluted net loss per share for each of the three and nine months ended September 30, 2022 includes stock options of 423,932 (after giving effect to the Exchange Ratio), in addition to the shares underlying the Legacy Convertible Notes. The Company is unable to quantify the number of shares underlying the legacy convertible notes for each of the three and nine months ended September 30, 2022 as the quantity of shares issuable upon conversion was not determinable for those periods. | Basic and Diluted Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss for the year by the weighted-average number of common shares outstanding during the year. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding and potentially dilutive securities outstanding for the period using the treasury stock or if-converted method if their inclusion is dilutive. Diluted net loss per common share is the same as basic net loss per common share, because the inclusion of potentially dilutive shares would be anti-dilutive to the calculation of loss and comprehensive loss per common share. Potentially anti-dilutive shares excluded from the calculation of diluted net loss per share for the years ended December 31, 2021 and 2022 includes stock options of 723,115 and 185,248 , respectively (after the application of the Exchange Ratio), in addition to the shares underlying the Convertible Notes. The Company is unable to quantify the number of shares underlying the Convertible Notes as the quantity of shares issuable upon conversion, as described in Note 6, is not determinable at this time. |
Emerging Growth Company | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012, (the “ JOBS Act ”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s unaudited condensed consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. | |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standard Board (“ FASB ”) issued Accounting Standards Update (“ ASU ”) No. 2016-13, Measurement of Credit Losses on Financial Instruments . ASU 2016-13, together with a series of subsequently issued related ASUs, has been codified in Topic 326. Topic 326 establishes new requirements for companies to estimate expected credit losses when measuring certain financial assets, including accounts receivables. The new guidance is effective for fiscal years beginning after December 15, 2022. The Company adopted the new guidance with its fiscal year beginning January 1, 2023. The adoption of ASC 326 had no material impact on the Company’s financial statements. | Recently Adopted Accounting Pronouncements In December 2019, the FASB issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In October 2021, the FASB issued ASU 2021-07, Compensation — Stock Compensation (Topic 718) Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses: Measurement of Credit Losses on Financial Instruments In August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Potentially Antidilutive Shares Excluded from Computation of Diluted Net Loss Per Share | Potentially anti-dilutive shares excluded from the calculation of diluted net loss per share for each of the three and nine months ended September 30, 2023 include the following: Private warrants 4,721,533 Working capital warrants 523,140 Public warrants 3,432,286 PIPE warrants 10,209,994 Stock options 2,101,760 SPA warrants 1,000,000 Senior convertible notes’ shares 1,000,000 Deferred founder shares (1) 1,173,631 (1) As described in Note 8, Related Party Transactions, deferred founder shares do not have voting rights, do not participate in dividends and are not transferrable absent the Company’s consent. Therefore, while deferred founder shares are considered outstanding for legal purposes and are included in the total quantity of outstanding shares on the unaudited condensed consolidated statements of stockholders’ deficit, they are not considered outstanding for accounting purposes, including basic and diluted net loss per share purposes. |
Reverse Recapitalization (Table
Reverse Recapitalization (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Reverse Recapitalization [Abstract] | |
Schedule of Reverse Recapitalization | The following tables reconcile elements of the Business Combination to the Company’s condensed consolidated financial statements, and should be read in conjunction with the footnotes referenced above (in thousands, except share amounts): Shares Graf public shares, net of redemptions 93,962 Private placement investors’ shares 3,683,010 Graf founder shares 2,516,744 Total Graf shares outstanding immediately prior to the Business Combination 6,293,716 Conversion of Legacy NKGen convertible promissory notes (after the application of the Exchange Ratio) 2,278,598 Legacy NKGen rollover shares (after the application of the Exchange Ratio) 13,316,662 Total Legacy NKGen shares 15,595,260 Total Company common stock outstanding immediately following the Business Combination 21,888,976 Recapitalization Closing proceeds Proceeds from issuance of common stock $ 1,667 Proceeds from issuance of PIPE warrants 10,210 Proceeds from issuance of senior convertible promissory notes with warrants 10,000 Closing disbursements Less: Payment of Graf deferred underwriter fees (1,250) Less: Payment of Graf transaction costs at Closing (1) (7,456) Less: Payment of Legacy NKGen transaction costs at Closing (3,510) Net cash proceeds from the Business Combination at Closing $ 9,661 Less: Payment of Legacy NKGen transaction costs prior to Closing (2,089) Net cash proceeds from the Business Combination $ 7,572 Noncash activity Conversion of legacy NKGen convertible promissory notes 18,913 Less: Operating liabilities assumed from Graf (860) Less: Unpaid transaction costs - assumed from Graf (1) (5,400) Less: Unpaid transaction costs – Legacy NKGen (1,938) Liability-classified instruments Less: Fair value of PIPE warrants (10,210) Less: Fair value of forward purchase derivative liability (20,201) Less: Fair value of senior convertible promissory notes (2) (9,707) Less: Fair value of private warrants (1,841) Less: Fair value of working capital warrants (204) Net equity impact of the Business Combination $ (23,876) (1) The Graf transaction costs includes a $4.0 million accrual related to a certain vendor to be paid in cash and common stock of $2.0 million each. At Closing, a cash payment of $1.3 million was disbursed to this vendor. The remaining $2.7 million amount was recognized as a component of the unpaid transaction costs assumed from Graf, of which $0.7 million represents a cash settlement obligation, and the remaining $2.0 million represents an obligation to issue a variable number of shares for a fixed monetary amount which was accounted for as a liability under ASC 480, Distinguishing Liabilities from Equity . (2) Represents allocated fair value. As presented in the unaudited condensed consolidated statements of stockholders’ deficit: Net equity impact of the Business Combination $ (23,876) Loss on issuance of forward purchase contract 24,475 Transaction costs expensed 3,329 Total Impact of Business Combination on total stockholders’ deficit (1) $ 3,928 Issuance of subscription receivable 32,915 Par value of common stock issued (1) Total Impact of Business Combination on additional paid-in capital $ 36,842 (1) Excludes impact of the Business Combination on net loss, which is presented separately in the unaudited condensed consolidated statements of stockholders’ deficit. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | ||
Schedule of Fair Value Hierarchy | Liabilities measured at fair value on a recurring basis as of September 30, 2023 are as follows (in thousands): Fair Value Measurements at Reporting Date Using Balance as of September 30, 2023 Level 1 (1) Level 2 Level 3 Private Warrants $ 1,841 $ — $ — $ 1,841 Working Capital Warrants 204 — — 204 Forward Purchase Derivative Liability 20,201 — — 20,201 PIPE Warrants (1) 10,210 — — 10,210 Total $ 32,456 $ — $ — $ 32,456 (1) As of September 30, 2023, the fair value of the PIPE Warrants was measured using its respective transaction price as described below. In future reporting periods, the PIPE Warrants will be valued using level three inputs. Liabilities measured at fair value on a recurring basis as of December 31, 2022 are as follows (in thousands): Fair Value Measurements at Reporting Date Using Balance as of December 31, 2022 Level 1 Level 2 Level 3 2019 Convertible Notes $ 11,392 $ — $ — $ 11,392 2019 Related Party Convertible Notes 263 — — 263 Total $ 11,655 $ — $ — $ 11,655 | Fair Value Measurements at Reporting Date Using Balance as of December 31, 2021 Level 1 Level 2 Level 3 2019 Convertible Notes $ 11,219 $ — $ — $ 11,219 Related Party Convertible Notes 259 — — 259 Total $ 11,478 $ — $ — $ 11,478 Fair Value Measurements at Reporting Date Using Balance as of December 31, 2022 Level 1 Level 2 Level 3 2019 Convertible Notes $ 11,392 $ — $ — $ 11,392 Related Party Convertible Notes 263 — — 263 Total $ 11,655 $ — $ — $ 11,655 |
Schedule of Legacy Convertible Notes Reconciliation | The following table presents a reconciliation of the Legacy Convertible Notes: 2019 Related 2023 Related 2019 Party 2023 Party Convertible Convertible Convertible Convertible Notes Notes Notes Notes Total Balance as of December 31, 2022 $ 11,392 $ 263 $ — $ — $ 11,655 Issuance — — 4,700 125 4,825 Change in fair value 2,359 44 371 10 2,784 Balance as of June 30, 2023 $ 13,751 $ 307 $ 5,071 $ 135 $ 19,264 Issuance — — 1,390 — 1,390 Change in fair value (1,276) (31) (423) (11) (1,741) Conversion and settlement (12,475) (276) (6,038) (124) (18,913) Balance as of September 30, 2023 $ — $ — $ — $ — $ — | 2019 Related Party Convertible Convertible Notes Notes Total Balance as of December 31, 2020 $ 10,807 $ 528 $ 11,335 Transfer from related party to unrelated party 270 (270) — Change in fair value 142 1 143 Balance as of December 31, 2021 11,219 259 11,478 Change in fair value 173 4 177 Balance as of December 31, 2022 $ 11,392 $ 263 $ 11,655 |
Fair Value Unobservable Assumption Inputs | The following unobservable assumptions were used in determining the fair value of the Legacy Convertible Notes as of December 31, 2022: Probability of conversion — Probability of holding until maturity without conversion — Remaining term until potential conversion trigger date (years) — Discount yield (1) 20.0 % (1) Estimated using a comparable bond analysis and under S&P Global Inc.’s credit rating scale using a multinominal logical regression. Credit spread (1) 12.1 % Equity volatility 45.0 % (1) Estimated using a comparable bond analysis and under S&P Global Inc.’s credit rating scale using a multinominal logical regression. Private Warrants volatility 9.6 % Dividend yield (per share) — Dividend yield 0.0 % Equity volatility 105.0 % | As of December 31, 2021 2022 Probability of conversion 90 % — Probability of holding until maturity without conversion 10 % — Remaining term until potential conversion trigger date (years) 0.75 — Discount yield (1) 17 % 20 % |
Stockholders' Equity (Tables)_2
Stockholders' Equity (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
Schedule of Stock Option Activity | A summary of the Company’s stock option activity for the nine months ended September 30, 2023 is as follows: Stock Options Weighted Average Outstanding Exercise Price Outstanding as of December 31, 2022 185,231 $ 1.37 Granted 2,173,693 6.67 Forfeited (244,298) 6.61 Exercised (12,866) 1.73 Outstanding as of September 30, 2023 2,101,760 $ 6.25 Stock options outstanding, vested and expected to vest and exercisable as of September 30, 2023 are as follows: Weighted Average Total Number of Remaining Weighted- Aggregate Stock Contractual Average Intrinsic Value Options Life (Years) Exercise Price (in thousands) Outstanding as of December 31, 2022 185,231 6.98 $ 1.37 $ 980 Outstanding as of September 30, 2023 2,101,760 9.10 $ 6.25 $ 4,318 Vested and expected to vest as of September 30, 2023 2,101,760 9.10 $ 6.25 $ 4,318 Exercisable as of September 30, 2023 268,236 7.48 $ 3.40 $ 1,315 | Stock Options Weighted Average Outstanding Exercise Price Outstanding as of December 31, 2020 1,034,074 $ 1.00 Exercised (191,020) 0.34 Forfeited (119,939) 3.28 Outstanding as of December 31, 2021 723,115 $ 0.81 Exercised (486,296) 0.34 Forfeited (51,588) 2.11 Outstanding as of December 31, 2022 185,231 $ 1.37 |
Schedule of Stock Option Valuation Assumptions | The weighted average assumptions used in the Black-Scholes option pricing model to determine the fair value of stock option grants for the nine months ended September 30, 2023 were as follows: Common stock fair value $ 9.18 Risk-free interest rate 3.53 % Expected volatility 111.00 % Expected term (in years) 6.08 Expected dividend yield 0.00 % | |
Schedule of Stock-Based Compensation Expense | Stock-based compensation expense, recognized in the Company’s condensed statements of operations and comprehensive loss for the 2019 Plan was recorded as follows (in thousands): Three Months Ended Nine Months Ended September 30 September 30 2023 2022 2023 2022 Research and development $ 197 $ 11 $ 735 $ 34 General and administrative 770 5 2,472 20 Total stock-based compensation expense $ 967 $ 16 $ 3,207 $ 54 | Years Ended December 31, 2021 2022 Research and development $ 44 $ 45 General and administrative 49 24 Total stock-based compensation expense $ 93 $ 69 |
Property and Equipment, net (_2
Property and Equipment, net (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Schedule of Property and Equipment | Property and equipment, net consist of the following (in thousands): September 30, December 31, Useful Life 2023 2022 Land — $ 5,025 $ 5,025 Buildings 40 years 8,325 8,325 Furniture and fixtures 7 years 677 677 Lab equipment 5 years 4,003 4,003 Leasehold improvements Lesser of estimated useful life or related lease term 52 52 Office equipment 5 years 17 17 Vehicles 5 years 112 112 18,211 18,211 Less: Accumulated depreciation (3,541) (2,690) $ 14,670 $ 15,521 | December 31, Useful Life 2021 2022 Land — $ 5,025 $ 5,025 Buildings 40 years 8,311 8,325 Furniture and fixtures 7 years 677 677 Lab equipment 5 years 3,907 4,003 Leasehold improvements Lesser of estimated useful life or related lease term 52 52 Office equipment 5 years 17 17 Vehicles 5 years 112 112 18,101 18,211 Less: Accumulated depreciation (1,534) (2,690) $ 16,567 $ 15,521 |
Additional Balance Sheet Info_5
Additional Balance Sheet Information (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | ||
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following (in thousands): September 30, December 31, 2023 2022 Prepaid expenses $ 1,200 $ 133 Other receivables 41 67 Revolving line of credit issuance fees 72 — Other — 4 Prepaid expenses and other current assets $ 1,313 $ 204 | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consist of the following (in thousands): September 30, December 31, 2023 2022 Accounts payable $ 7,938 $ 975 Accrued liabilities 4,239 1,359 Employee compensation 730 291 Other 58 27 Accounts payable and accrued expenses $ 12,965 $ 2,652 | December 31, 2021 2022 Accounts payable $ 1,687 $ 975 Accrued liabilities 248 1,359 Employee compensation 240 291 Other 27 27 Accounts payable and accrued expenses $ 2,202 $ 2,652 |
Company Information (Details)_2
Company Information (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accumulated deficit | $ 128,524 | $ 79,176 | $ 52,422 |
Cash and cash equivalents | $ 8,786 | $ 117 | $ 351 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 USD ($) item shares | Sep. 30, 2022 shares | Sep. 30, 2023 USD ($) item segment shares | Sep. 30, 2022 shares | Dec. 31, 2022 USD ($) segment | Sep. 29, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Recapitalization exchange ratio | 0.408 | |||||
Number of reportable segments | segment | 1 | 1 | ||||
Deferred debt issuance costs | $ 100 | $ 100 | $ 0 | |||
Restricted cash | $ 250 | $ 250 | $ 0 | |||
Number of class of shares | item | 1 | 1 | ||||
Related Party | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Borrowing term | 3 years | |||||
Stock options | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Potentially anti-dilutive shares excluded from the calculation of diluted net loss per share | shares | 2,101,760 | 423,932 | 2,101,760 | 423,932 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Private warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially anti-dilutive shares excluded from the calculation of diluted net loss per share | 4,721,533 | 4,721,533 | ||
Working capital warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially anti-dilutive shares excluded from the calculation of diluted net loss per share | 523,140 | 523,140 | ||
Public warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially anti-dilutive shares excluded from the calculation of diluted net loss per share | 3,432,286 | 3,432,286 | ||
PIPE warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially anti-dilutive shares excluded from the calculation of diluted net loss per share | 10,209,994 | 10,209,994 | ||
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially anti-dilutive shares excluded from the calculation of diluted net loss per share | 2,101,760 | 423,932 | 2,101,760 | 423,932 |
SPA warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially anti-dilutive shares excluded from the calculation of diluted net loss per share | 1,000,000 | 1,000,000 | ||
Senior convertible notes' shares | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially anti-dilutive shares excluded from the calculation of diluted net loss per share | 1,000,000 | 1,000,000 | ||
Deferred founder shares | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially anti-dilutive shares excluded from the calculation of diluted net loss per share | 1,173,631 | 1,173,631 |
Reverse Recapitalization - Narr
Reverse Recapitalization - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 29, 2023 | Sep. 28, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Reverse Recapitalization [Line Items] | ||||||||
Converted shares (in shares) | 5,579,266 | |||||||
Stock converted, reverse recapitalization (in shares) | 2,278,598 | |||||||
Common stock outstanding (in shares) | 21,888,976 | 21,888,976 | 21,888,976 | 13,303,795 | 5,873,711 | |||
Common stock, shares issued (in shares) | 21,888,976 | 21,888,976 | 13,303,795 | 5,873,711 | ||||
Stock options cancelled and converted (in shares) | 2,101,760 | |||||||
Transaction costs expensed | $ 7,500 | $ 3,329 | $ 0 | $ 3,329 | $ 0 | |||
Legacy NKGen | ||||||||
Schedule Of Reverse Recapitalization [Line Items] | ||||||||
Common stock outstanding (in shares) | 38,185,814 | |||||||
Common stock, shares issued (in shares) | 38,185,814 | |||||||
Options, issued and outstanding (in shares) | 5,146,354 | |||||||
Equity Instruments | ||||||||
Schedule Of Reverse Recapitalization [Line Items] | ||||||||
Transaction costs expensed | $ 4,200 | |||||||
Liability Instruments | ||||||||
Schedule Of Reverse Recapitalization [Line Items] | ||||||||
Transaction costs expensed | $ 3,300 | |||||||
Common Stock, Including Convertible Debt Stock | ||||||||
Schedule Of Reverse Recapitalization [Line Items] | ||||||||
Stock converted, reverse recapitalization (in shares) | 15,595,262 |
Reverse Recapitalization - Sche
Reverse Recapitalization - Schedule of Reverse Recapitalization Table 1 (Details) | Sep. 29, 2023 shares |
Schedule Of Reverse Recapitalization [Line Items] | |
Total Legacy NKGen shares (in shares) | 2,278,598 |
Legacy NKGen rollover shares (in shares) | 13,316,662 |
Total Company common stock outstanding immediately following the Business Combination (in shares) | 21,888,976 |
Graf public shares, net of redemptions | Graf Acquisition Partners IV LLC | |
Schedule Of Reverse Recapitalization [Line Items] | |
Total Company common stock outstanding immediately following the Business Combination (in shares) | 93,962 |
Private placement investors' shares | Graf Acquisition Partners IV LLC | |
Schedule Of Reverse Recapitalization [Line Items] | |
Total Company common stock outstanding immediately following the Business Combination (in shares) | 3,683,010 |
Graf founder shares | Graf Acquisition Partners IV LLC | |
Schedule Of Reverse Recapitalization [Line Items] | |
Total Company common stock outstanding immediately following the Business Combination (in shares) | 2,516,744 |
Common Shareholders | Graf Acquisition Partners IV LLC | |
Schedule Of Reverse Recapitalization [Line Items] | |
Total Company common stock outstanding immediately following the Business Combination (in shares) | 6,293,716 |
Legacy NKGen | |
Schedule Of Reverse Recapitalization [Line Items] | |
Total Legacy NKGen shares (in shares) | 15,595,260 |
Reverse Recapitalization - Sc_2
Reverse Recapitalization - Schedule of Reverse Recapitalization Table 2 (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Schedule Of Reverse Recapitalization [Line Items] | |||
Proceeds from issuance of common stock | $ 1,667 | $ 1,667 | $ 0 |
Proceeds from issuance of PIPE warrants | 10,210 | 10,210 | 0 |
Proceeds from convertible debt | 10,000 | ||
Less: Payment of Graf deferred underwriter fees | (1,250) | (1,250) | 0 |
Less: Payment of transaction costs at Closing | (13,055) | 0 | |
Net cash proceeds from the Business Combination at Closing | 9,661 | ||
Less: Payment of Legacy NKGen transaction costs prior to Closing | (2,089) | ||
Net cash proceeds from the Business Combination | 7,572 | ||
Conversion of legacy NKGen convertible promissory notes | 18,913 | 18,913 | 0 |
Less: Operating liabilities assumed from Graf | (860) | ||
Less: Unpaid transaction costs | $ (7,338) | $ 0 | |
Less: Fair value of PIPE warrants | (10,210) | ||
Less: Fair value of forward purchase derivative liability | (20,201) | ||
Less: Fair value of senior convertible promissory notes(2) | (9,707) | ||
Less: Fair value of private warrants | (1,841) | ||
Less: Fair value of working capital warrants | (204) | ||
Net equity impact of the Business Combination | (23,876) | ||
Reverse recapitalization obligation, cash settlement | 700 | ||
Reverse recapitalization obligation, shares issuable | 2,000 | ||
Graf Acquisition Partners IV LLC | |||
Schedule Of Reverse Recapitalization [Line Items] | |||
Less: Payment of transaction costs at Closing | (7,456) | ||
Less: Unpaid transaction costs | (5,400) | ||
Legacy NKGen | |||
Schedule Of Reverse Recapitalization [Line Items] | |||
Less: Payment of transaction costs at Closing | (3,510) | ||
Less: Unpaid transaction costs | (1,938) | ||
Vendor | |||
Schedule Of Reverse Recapitalization [Line Items] | |||
Less: Payment of transaction costs at Closing | (1,300) | ||
Less: Unpaid transaction costs | (2,700) | ||
Vendor | Graf Acquisition Partners IV LLC | |||
Schedule Of Reverse Recapitalization [Line Items] | |||
Less: Unpaid transaction costs | (4,000) | ||
Vendor | Graf Acquisition Partners IV LLC | Common Stock | |||
Schedule Of Reverse Recapitalization [Line Items] | |||
Less: Unpaid transaction costs | (2,000) | ||
Vendor | Graf Acquisition Partners IV LLC | Cash | |||
Schedule Of Reverse Recapitalization [Line Items] | |||
Less: Unpaid transaction costs | $ (2,000) |
Reverse Recapitalization - Sc_3
Reverse Recapitalization - Schedule of Reverse Recapitalization Table 3 (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 29, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Schedule Of Reverse Recapitalization [Line Items] | |||||
Net equity impact of the Business Combination | $ (23,876) | ||||
Loss on issuance of forward purchase contract | $ 24,475 | $ 0 | $ 24,475 | $ 0 | |
Transaction costs expensed | $ 7,500 | 3,329 | $ 0 | $ 3,329 | $ 0 |
Reverse recapitalization transactions, net | 3,928 | ||||
Subscription Receivable | |||||
Schedule Of Reverse Recapitalization [Line Items] | |||||
Reverse recapitalization transactions, net | 32,915 | ||||
Common Stock | |||||
Schedule Of Reverse Recapitalization [Line Items] | |||||
Reverse recapitalization transactions, net | (1) | ||||
Additional Paid-in Capital | |||||
Schedule Of Reverse Recapitalization [Line Items] | |||||
Reverse recapitalization transactions, net | $ 36,842 |
Private Placement (Details)
Private Placement (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 28, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Derivative [Line Items] | ||||||
Shares purchased (in shares) | 3,168,121 | |||||
Repayment amount | $ 32,900 | |||||
Anniversary of closing period | 1 year | |||||
Amount per Subscribed Share considered for determination of Settlement Amount (in USD per share) | $ 2 | $ 2 | ||||
Loss on issuance of forward purchase contract | $ 24,475 | $ 0 | $ 24,475 | $ 0 | ||
Forward purchase derivative liability | 20,201 | 20,201 | $ 0 | |||
Bonus stock | $ 4,300 | $ 4,300 | ||||
Bonus Shares | ||||||
Derivative [Line Items] | ||||||
Shares purchased (in shares) | 514,889 |
Warrants (Details)
Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | ||||
Sep. 29, 2023 | May 20, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 28, 2023 | |
Class of Warrant or Right [Line Items] | |||||
Proceeds from issuance of PIPE warrants | $ 10,210 | $ 10,210 | $ 0 | ||
Working Capital Loan | Line of Credit | |||||
Class of Warrant or Right [Line Items] | |||||
Working capital loan | $ 800 | ||||
Public warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Period before warrants become exercisable | 30 days | ||||
Warrant term | 5 years | ||||
Public warrants | Graf Acquisition Partners IV LLC | |||||
Class of Warrant or Right [Line Items] | |||||
Warrants issued (in shares) | 3,432,286 | ||||
Warrant, exercise price (in dollars per share) | $ 11.50 | ||||
Public warrants | Common Stock | |||||
Class of Warrant or Right [Line Items] | |||||
Closing price required to redeem warrants (in dollars per share) | $ 18 | ||||
Private warrants | Graf Acquisition Partners IV LLC | |||||
Class of Warrant or Right [Line Items] | |||||
Warrants issued (in shares) | 4,721,533 | ||||
Warrant, exercise price (in dollars per share) | $ 11.50 | ||||
SPA warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Warrants issued (in shares) | 1,000,000 | ||||
Warrant, exercise price (in dollars per share) | $ 11.50 | ||||
Working capital warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Warrants issued (in shares) | 523,140 | ||||
Warrant, exercise price (in dollars per share) | $ 11.50 | ||||
PIPE warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Warrants issued (in shares) | 10,209,994 | 10,209,994 | |||
Warrant, exercise price (in dollars per share) | $ 1 | ||||
Warrant term | 5 years | ||||
Proceeds from issuance of PIPE warrants | $ 10,200 | ||||
Purchase price (usd per share) | $ 1 | ||||
Period before warrant adjustment | 180 days | ||||
PIPE warrants | First Tranche | |||||
Class of Warrant or Right [Line Items] | |||||
Warrant, exercise price (in dollars per share) | $ 10 | ||||
PIPE warrants | Second Tranche | |||||
Class of Warrant or Right [Line Items] | |||||
Warrant, exercise price (in dollars per share) | 12.50 | ||||
PIPE warrants | Third Tranche | |||||
Class of Warrant or Right [Line Items] | |||||
Warrant, exercise price (in dollars per share) | 15 | ||||
PIPE warrants | Minimum | |||||
Class of Warrant or Right [Line Items] | |||||
Cashless exchange, stock price trigger (in USD per share) | $ 1.50 |
Convertible Notes (Details)
Convertible Notes (Details) $ / shares in Units, $ in Thousands | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 29, 2023 USD ($) shares | Sep. 28, 2023 USD ($) $ / shares shares | Dec. 31, 2019 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | ||||||||||
Proceeds from convertible debt | $ 10,000 | |||||||||
Converted shares (in shares) | shares | 5,579,266 | |||||||||
Stock converted, reverse recapitalization (in shares) | shares | 2,278,598 | |||||||||
Interest expense | $ 211 | $ 636 | $ 307 | $ 1,690 | $ 2,306 | $ 1,315 | ||||
Legacy NKGen Common Stock | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Converted shares (in shares) | shares | 5,579,266 | |||||||||
2019 Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from convertible debt | $ 10,800 | |||||||||
2019 Related Party Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from convertible debt | $ 300 | |||||||||
2023 Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from convertible debt | $ 6,100 | |||||||||
Borrowing term | 3 years | |||||||||
2023 Related Party Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from convertible debt | $ 100 | |||||||||
Borrowing term | 3 years | |||||||||
Convertible Debt | 2019 Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate | 1.68% | |||||||||
Convertible Debt | 2019 Related Party Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate | 1.68% | |||||||||
Convertible Debt | 2023 Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate | 4.55% | 4.55% | 4.55% | |||||||
Convertible Debt | 2023 Related Party Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate | 4.55% | 4.55% | 4.55% | |||||||
Convertible Debt | Senior Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from convertible debt | $ 10,000 | |||||||||
Borrowing term | 4 years | |||||||||
Paid in kind interest rate | 8 | |||||||||
Conversion price (in dollars per share) | $ / shares | $ 10 | |||||||||
Exercise term | 2 years 6 months | |||||||||
Minimum holding period post exercise | 6 months | |||||||||
Interest expense | $ 100 | |||||||||
Accrued interest | $ 100 | $ 100 | $ 100 |
Debt (Details)_2
Debt (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 4 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Apr. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2024 | |
Debt Instrument [Line Items] | ||||||||||||
Issuance fees | $ 100 | $ 0 | $ 100 | $ 100 | $ 100 | $ 0 | ||||||
Proceeds from draws on revolving line of credit | 4,900 | 4,931 | $ 0 | |||||||||
Interest expense | 211 | $ 636 | 307 | 1,690 | 2,306 | $ 1,315 | ||||||
Proceeds from related party loans | $ 300 | $ 5,000 | $ 5,300 | 17,500 | 23,000 | 20,500 | ||||||
Related Party | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit borrowing term | 3 years | |||||||||||
Interest expense | 63 | 628 | $ 160 | 1,663 | $ 2,271 | $ 1,305 | ||||||
Principal and interest | 66,100 | |||||||||||
Related Party Loans | Convertible Debt | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Principal and interest | 66,100 | |||||||||||
Related Party Loans | Loans Payable | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate | 4.60% | |||||||||||
Related Party Loans | Line of Credit | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit borrowing term | 30 days | |||||||||||
Related Party Loans | Common Stock | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Converted shares (in shares) | 17,002,230 | |||||||||||
Related Party Loans | Related Party | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest expense | 100 | 600 | 100 | |||||||||
Interest payable | $ 100 | $ 0 | 100 | 100 | 100 | $ 0 | ||||||
Related Party Loans | Related Party | Loans Payable | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest expense | 200 | 1,700 | ||||||||||
Interest payable | $ 200 | $ 200 | 0 | $ 200 | $ 200 | 0 | ||||||
Related Party Loans | Related Party | Loans Payable | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate | 5.12% | 5.12% | 5.12% | 5.12% | ||||||||
Interest expense | $ 0 | 0 | ||||||||||
Revolving Credit Facility | Line of Credit | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Restricted cash balance requirement | $ 300 | |||||||||||
Revolving Credit Facility | Commercial Bank Credit Facility | Line of Credit | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Revolving line of credit | $ 5,000 | |||||||||||
Line of credit borrowing term | 1 year | |||||||||||
Interest rate | 7.50% | |||||||||||
Issuance fees | $ 100 | |||||||||||
Interest rate for the revolving line of credit | 8.17% | 8.17% | 8.17% | 8.17% | ||||||||
Interest expense | $ 100 | $ 0 | ||||||||||
Accrued interest | $ 100 | $ 100 | $ 100 | $ 100 | ||||||||
Revolving Credit Facility | Commercial Bank Credit Facility | Forecast | Line of Credit | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Minimum deposit balance | $ 15,000 | |||||||||||
Revolving Credit Facility | Commercial Bank Credit Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Line of Credit | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread interest rate on secured overnight financing rate | 2.85% |
Related-Party Transactions (D_2
Related-Party Transactions (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Apr. 14, 2023 D $ / shares shares | Sep. 30, 2023 USD ($) shares | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) shares | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) shares | Sep. 29, 2023 shares | |
Related Party Transaction [Line Items] | ||||||||
Common stock outstanding (in shares) | shares | 21,888,976 | 21,888,976 | 13,303,795 | 5,873,711 | 21,888,976 | |||
Trading restriction period | 2 years | |||||||
Research and development expense | $ | $ 3,929 | $ 4,121 | $ 11,577 | $ 12,659 | $ 16,746 | $ 14,672 | ||
Accounts payable | $ | 7,938 | 7,938 | 975 | 1,687 | ||||
Related Party | ||||||||
Related Party Transaction [Line Items] | ||||||||
Research and development expense | $ | 401 | 140 | 401 | 337 | 439 | $ 209 | ||
Amended And Restated Sponsor Support Lockup Agreement | Related Party | Graf Acquisition Partners IV LLC | ||||||||
Related Party Transaction [Line Items] | ||||||||
Common stock outstanding (in shares) | shares | 4,290,375 | |||||||
Shares forfeited (in shares) | shares | 1,773,631 | |||||||
Restricted shares subject to vesting conditions (in shares) | shares | 1,173,631 | |||||||
Shares were not forfeited, did not become restricted, nor subject to vesting conditions (in shares) | shares | 1,343,113 | |||||||
Advisory and Research Services | Related Party | ||||||||
Related Party Transaction [Line Items] | ||||||||
Research and development expense | $ | 0 | 100 | 0 | 300 | 400 | |||
Accounts payable | $ | 0 | 0 | 100 | |||||
Purchases of Laboratory Supplies | Related Party | ||||||||
Related Party Transaction [Line Items] | ||||||||
Research and development expense | $ | 400 | $ 100 | 400 | $ 100 | ||||
Accounts payable | $ | $ 400 | $ 400 | $ 100 | |||||
Deferred Founder Shares | Amended And Restated Sponsor Support Lockup Agreement | Related Party | Graf Acquisition Partners IV LLC | ||||||||
Related Party Transaction [Line Items] | ||||||||
Vesting period | 5 years | |||||||
Deferred Founder Shares | Trance One | Amended And Restated Sponsor Support Lockup Agreement | Related Party | Graf Acquisition Partners IV LLC | ||||||||
Related Party Transaction [Line Items] | ||||||||
Share price trigger (in USD per share) | $ / shares | $ 14 | |||||||
Threshold trading days | D | 20 | |||||||
Threshold consecutive trading days | D | 30 | |||||||
Shares vested (in shares) | shares | 873,631 | |||||||
Deferred Founder Shares | Tranche Two | Amended And Restated Sponsor Support Lockup Agreement | Related Party | Graf Acquisition Partners IV LLC | ||||||||
Related Party Transaction [Line Items] | ||||||||
Share price trigger (in USD per share) | $ / shares | $ 20 | |||||||
Threshold trading days | D | 20 | |||||||
Threshold consecutive trading days | D | 30 | |||||||
Shares vested (in shares) | shares | 300,000 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Schedule of Fair Value Hierarchy (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities measured at fair value | $ 32,456 | $ 11,655 |
Related Party | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 263 | |
2019 Convertible Notes | Nonrelated Party | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 11,392 | |
Private warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 1,841 | |
Working capital warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 204 | |
Forward Purchase Derivative Liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 20,201 | |
PIPE warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 10,210 | |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities measured at fair value | 0 | 0 |
Level 1 | Related Party | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 0 | |
Level 1 | 2019 Convertible Notes | Nonrelated Party | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 0 | |
Level 1 | Private warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | |
Level 1 | Working capital warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | |
Level 1 | Forward Purchase Derivative Liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | |
Level 1 | PIPE warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities measured at fair value | 0 | 0 |
Level 2 | Related Party | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 0 | |
Level 2 | 2019 Convertible Notes | Nonrelated Party | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 0 | |
Level 2 | Private warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | |
Level 2 | Working capital warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | |
Level 2 | Forward Purchase Derivative Liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | |
Level 2 | PIPE warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities measured at fair value | 32,456 | 11,655 |
Level 3 | Related Party | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 263 | |
Level 3 | 2019 Convertible Notes | Nonrelated Party | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | $ 11,392 | |
Level 3 | Private warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 1,841 | |
Level 3 | Working capital warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 204 | |
Level 3 | Forward Purchase Derivative Liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 20,201 | |
Level 3 | PIPE warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | $ 10,210 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Legacy Convertible Notes Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Sep. 30, 2023 | Jun. 30, 2023 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Liabilities measured at fair value, beginning balance | $ 19,264 | $ 11,655 |
Issuance | 1,390 | 4,825 |
Change in fair value | (1,741) | 2,784 |
Conversion and settlement | (18,913) | |
Liabilities measured at fair value, ending balance | 0 | 19,264 |
2019 Convertible Notes | Nonrelated Party | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Liabilities measured at fair value, beginning balance | 13,751 | 11,392 |
Issuance | 0 | 0 |
Change in fair value | (1,276) | 2,359 |
Conversion and settlement | (12,475) | |
Liabilities measured at fair value, ending balance | 0 | 13,751 |
2019 Convertible Notes | Related Party | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Liabilities measured at fair value, beginning balance | 307 | 263 |
Issuance | 0 | 0 |
Change in fair value | (31) | 44 |
Conversion and settlement | (276) | |
Liabilities measured at fair value, ending balance | 0 | 307 |
2023 Convertible Notes | Nonrelated Party | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Liabilities measured at fair value, beginning balance | 5,071 | 0 |
Issuance | 1,390 | 4,700 |
Change in fair value | (423) | 371 |
Conversion and settlement | (6,038) | |
Liabilities measured at fair value, ending balance | 0 | 5,071 |
2023 Convertible Notes | Related Party | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Liabilities measured at fair value, beginning balance | 135 | 0 |
Issuance | 0 | 125 |
Change in fair value | (11) | 10 |
Conversion and settlement | (124) | |
Liabilities measured at fair value, ending balance | $ 0 | $ 135 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Narrative (Details) $ / shares in Units, $ in Thousands | 2 Months Ended | 3 Months Ended | 9 Months Ended | |||
Sep. 29, 2023 USD ($) $ / shares shares | Dec. 31, 2019 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Stock converted, reverse recapitalization (in shares) | shares | 2,278,598 | |||||
Conversion of legacy NKGen convertible promissory notes | $ 18,913 | $ 18,913 | $ 0 | |||
Stock converted, reverse recapitalization (in USD per share) | $ / shares | $ 8.30 | |||||
Derivative warrant liabilities | 12,255 | $ 0 | ||||
Proceeds from issuance of convertible promissory notes and convertible promissory notes due to related parties | $ 10,000 | |||||
Forward purchase derivative liability | $ 20,201 | $ 0 | ||||
SPA warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Warrants issued (in shares) | shares | 1,000,000 | |||||
Warrant, exercise price (in dollars per share) | $ / shares | $ 11.50 | |||||
PIPE warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Derivative warrant liabilities | $ 10,200 | |||||
Warrants issued (in shares) | shares | 10,209,994 | 10,209,994 | ||||
Warrant, exercise price (in dollars per share) | $ / shares | $ 1 | |||||
Private warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Derivative warrant liabilities | $ 1,800 | |||||
Working capital warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Derivative warrant liabilities | 200 | |||||
Warrants issued (in shares) | shares | 523,140 | |||||
Warrant, exercise price (in dollars per share) | $ / shares | $ 11.50 | |||||
Senior convertible notes' shares | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Fair value of convertible notes | 12,900 | |||||
Dividend yield (per share) | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Private warrants and working capital warrants unobservable input | 0 | |||||
Related Party | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Fair value of debt | $ 263 | |||||
2019 Convertible Notes | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Proceeds from issuance of convertible promissory notes and convertible promissory notes due to related parties | $ 10,800 | |||||
2019 Convertible Notes | Related Party | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Expense associated with change in fair value | $ 100 | 100 | ||||
2019 Convertible Notes | Nonrelated Party | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Expense associated with change in fair value | $ 100 | $ 100 | ||||
Fair value of debt | $ 11,392 | |||||
Reported Value Measurement [Member] | SPA warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Fair value of warrants | 400 | |||||
Reported Value Measurement [Member] | Senior convertible notes' shares | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Fair value of debt | 12,900 | |||||
Estimate of Fair Value Measurement [Member] | SPA warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Fair value of warrants | 300 | |||||
Estimate of Fair Value Measurement [Member] | Senior convertible notes' shares | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Fair value of debt | $ 9,700 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Valuation Assumptions of Legacy Convertible Notes (Details) - Legacy Convertible Notes | Dec. 31, 2022 |
Probability of conversion | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0 |
Probability of holding until maturity without conversion | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0 |
Remaining term until potential conversion trigger date (years) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0 |
Discount Yield | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.200 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments - Valuation Assumptions of Senior Convertible Notes (Details) - Senior convertible notes' shares | Dec. 31, 2022 |
Credit spread | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.121 |
Equity volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.450 |
Fair Value of Financial Instr_8
Fair Value of Financial Instruments - Private Warrants and Working Capital Warrants (Details) | Dec. 31, 2022 |
Equity volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Private warrants and working capital warrants unobservable input | 0.096 |
Dividend yield (per share) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Private warrants and working capital warrants unobservable input | 0 |
Fair Value of Financial Instr_9
Fair Value of Financial Instruments - Valuation Assumptions of Forward Purchase Derivative Liability (Details) - Forward Purchase Derivative Liability | Dec. 31, 2022 |
Dividend yield | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Forward purchase derivative liability unobservable input | 0 |
Equity volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Forward purchase derivative liability unobservable input | 1.050 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) $ / shares in Units, $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 USD ($) installment $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Sep. 29, 2023 shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Common stock, shares authorized (shares) | 500,000,000 | 500,000,000 | 500,000,000 | |
Common stock, par value (in USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Common stock, shares issued (in shares) | 21,888,976 | 13,303,795 | 5,873,711 | |
Common stock outstanding (in shares) | 21,888,976 | 13,303,795 | 5,873,711 | 21,888,976 |
Common stock, reserved for future issuance (in shares) | 478,111,024 | 486,696,205 | 494,126,289 | |
Preferred stock, shares authorized (in shares) | 10,000,000 | |||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.0001 | |||
Preferred stock, shares issued (in shares) | 0 | |||
Preferred stock, shares outstanding (in shares) | 0 | |||
Expected dividend yield | 0% | |||
Intrinsic value of stock options exercised | $ | $ 0.1 | $ 3.1 | $ 0.1 | |
Fair value of options vested | $ | 0.9 | 0.6 | $ 0.3 | |
Unrecognized stock-based compensation | $ | $ 14.6 | $ 0.1 | ||
Weighted- average period of recognition | 3 years 2 months 12 days | 1 year 1 month 6 days | ||
2019 Plan | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Expiration period (in years) | 10 years | |||
Vesting period | 4 years | |||
Vesting percentage (as a percent) | 25% | |||
Employee Stock | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Maximum shares allowed to be issued (as a percent) | 3% | |||
ESPP purchase price of common stock, percent of market price (as a percent) | 85% | |||
Expected dividend yield | 0% | |||
Employee Stock | 2019 Plan | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Expiration period (in years) | 10 years | |||
Vesting period | 4 years | |||
Vested, expiration period | 3 months | |||
Vesting percentage (as a percent) | 25% | |||
Number of monthly installments | installment | 36 | |||
Employee Stock | 2019 Plan | Minimum | Board Member | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Employee Stock | 2019 Plan | Maximum | Board Member | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Stock Compensation | 2023 Plan | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Maximum shares allowed to be issued (as a percent) | 12% | |||
Stock options | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Expected dividend yield | 0% |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stock Option Activity (Details) - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock Options Outstanding | |||
Outstanding at beginning of period (in shares) | 185,231 | 723,115 | 1,034,074 |
Granted (in shares) | 2,173,693 | 0 | 0 |
Forfeited (in shares) | (244,298) | (51,588) | (119,939) |
Exercised (in shares) | (12,866) | (486,296) | (191,020) |
Outstanding at end of period (in shares) | 2,101,760 | 185,231 | 723,115 |
Weighted Average Exercise Price | |||
Outstanding at beginning of period (in USD per share) | $ 1.37 | $ 0.81 | $ 1 |
Granted (in USD per share) | 6.67 | ||
Forfeited (in USD per share) | 6.61 | 2.11 | 3.28 |
Exercised (in USD per share) | 1.73 | 0.34 | 0.34 |
Outstanding at end of period (in USD per share) | $ 6.25 | $ 1.37 | $ 0.81 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Option Valuation Assumptions (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected dividend yield | 0% | |
Stock options | ||
Equity [Abstract] | ||
Share price (in usd per share) | $ 9.18 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share price (in usd per share) | $ 9.18 | |
Risk-free interest rate | 3.53% | |
Expected volatility | 111% | |
Expected term (in years) | 6 years 29 days | |
Expected dividend yield | 0% |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Stock Options Vested and Expected to Vest (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Stock Options | |||
Outstanding at beginning of period (in shares) | 185,231 | 723,115 | 1,034,074 |
Outstanding at end of period (in shares) | 2,101,760 | 185,231 | 723,115 |
Vested and expected to vest (in shares) | 2,101,760 | 185,231 | |
Exercisable (in shares) | 268,236 | 146,053 | |
Weighted Average Remaining Contractual Life (Years) | |||
Outstanding of period | 9 years 1 month 6 days | 6 years 11 months 23 days | 7 years 9 months 14 days |
Vested and expected to vest years) | 9 years 1 month 6 days | 6 years 11 months 23 days | |
Exercisable (years) | 7 years 5 months 23 days | 6 years 11 months 8 days | |
Weighted- Average Exercise Price | |||
Outstanding at beginning of period (in USD per share) | $ 1.37 | $ 0.81 | $ 1 |
Outstanding at end of period (in USD per share) | 6.25 | 1.37 | $ 0.81 |
Vested and expected to vest (in USD per share) | 6.25 | 1.37 | |
Exercisable (in USD per share) | $ 3.40 | $ 1.13 | |
Total Aggregate Intrinsic Value (in thousands) | |||
Outstanding at beginning of period | $ 980 | $ 3,674 | |
Outstanding at end of period | 4,318 | 980 | $ 3,674 |
Vested and expected to vest | 4,318 | 980 | |
Exercisable | $ 1,315 | $ 807 |
Stockholders' Equity - Schedu_3
Stockholders' Equity - Schedule of Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Total stock-based compensation expense | $ 967 | $ 16 | $ 3,207 | $ 54 | $ 69 | $ 93 |
Research and development | ||||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Total stock-based compensation expense | 197 | 11 | 735 | 34 | 45 | 44 |
General and administrative | ||||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Total stock-based compensation expense | $ 770 | $ 5 | $ 2,472 | $ 20 | $ 24 | $ 49 |
Property and Equipment, net - S
Property and Equipment, net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 18,211 | $ 18,211 | $ 18,101 |
Less: Accumulated depreciation | (3,541) | (2,690) | (1,534) |
Property and equipment, net | 14,670 | 15,521 | 16,567 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 5,025 | $ 5,025 | 5,025 |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | 40 years | 40 years | |
Property and equipment, gross | $ 8,325 | $ 8,325 | 8,311 |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | 7 years | 7 years | |
Property and equipment, gross | $ 677 | $ 677 | 677 |
Lab equipment | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | 5 years | ||
Property and equipment, gross | $ 4,003 | 4,003 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 52 | $ 52 | 52 |
Office equipment | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | 5 years | 5 years | |
Property and equipment, gross | $ 17 | $ 17 | 17 |
Vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | 5 years | 5 years | |
Property and equipment, gross | $ 112 | $ 112 | $ 112 |
Property and Equipment, net - N
Property and Equipment, net - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||||||
Depreciation expense | $ 0.3 | $ 0.3 | $ 0.9 | $ 0.9 | $ 0.6 | $ 1.1 |
Additional Balance Sheet Info_6
Additional Balance Sheet Information - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | |||
Prepaid expenses | $ 1,200 | $ 133 | $ 172 |
Other receivables | 41 | 67 | |
Revolving line of credit issuance fees | 72 | 0 | |
Other | 0 | 4 | 22 |
Prepaid expenses and other current assets | $ 1,313 | $ 204 | $ 261 |
Additional Balance Sheet Info_7
Additional Balance Sheet Information - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | |||
Accounts payable | $ 7,938 | $ 975 | $ 1,687 |
Accrued liabilities | 4,239 | 1,359 | 248 |
Employee compensation | 730 | 291 | |
Other | 58 | 27 | |
Accounts payable and accrued expenses | $ 12,965 | $ 2,652 | $ 2,202 |
Collaboration Agreement (Deta_2
Collaboration Agreement (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Collaborative Arrangement, Transaction with Party to Collaborative Arrangement | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Reductions to research and development expenses | $ 0.2 | $ 0.1 | $ 0.2 | $ 0.4 |
Commitments and Contingencies_5
Commitments and Contingencies (Details) | 12 Months Ended | |||||
Oct. 31, 2021 | Dec. 31, 2020 USD ($) | Sep. 30, 2023 USD ($) country | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Feb. 28, 2018 | |
Other Commitments [Line Items] | ||||||
Term of lease | 2 years | 5 years | ||||
Renewal extension period | 2 years | |||||
Right of use asset, gross | $ 1,100,000 | |||||
Operating lease, accumulated amortization | 1,000,000 | |||||
Operating lease liability | $ 96,000 | $ 379,000 | $ 458,000 | |||
Remaining lease term | 1 year | 1 year | 1 year 8 months 12 days | |||
Weighted-average estimated incremental borrowing rate | 6% | 5.90% | 5.50% | |||
Total undiscounted lease payments | $ 100,000 | $ 412,000 | ||||
Payments for license agreement | $ 1,000,000 | |||||
Accrued litigation liability | $ 0 | $ 0 | ||||
NKMAX | ||||||
Other Commitments [Line Items] | ||||||
Number of countries | country | 4 | |||||
NKMAX | UNITED STATES | ||||||
Other Commitments [Line Items] | ||||||
Milestone payment, after regulatory approval | $ 5,000,000 | |||||
NKMAX | European Union | ||||||
Other Commitments [Line Items] | ||||||
Milestone payment, after regulatory approval | 4,000,000 | |||||
NKMAX | Country A | ||||||
Other Commitments [Line Items] | ||||||
Milestone payment, after regulatory approval | 1,000,000 | |||||
NKMAX | Country B | ||||||
Other Commitments [Line Items] | ||||||
Milestone payment, after regulatory approval | 1,000,000 | |||||
NKMAX | Country C | ||||||
Other Commitments [Line Items] | ||||||
Milestone payment, after regulatory approval | 1,000,000 | |||||
NKMAX | Country D | ||||||
Other Commitments [Line Items] | ||||||
Milestone payment, after regulatory approval | $ 1,000,000 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 0% | 0% | 0% | 0% |
Subsequent Events (Details)_2
Subsequent Events (Details) $ in Millions | Oct. 05, 2023 USD ($) |
Subsequent Event | |
Subsequent Event [Line Items] | |
Repayments of related party debt | $ 0.3 |