UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO |
Commission File Number:
(Exact name of Registrant as specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The number of shares of Registrant’s Common Stock outstanding as of August 7, 2023 was
Table of Contents
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Page |
PART I |
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Item 1. |
1 |
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1 |
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2 |
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3 |
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4 |
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5 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
14 |
Item 3. |
24 |
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Item 4. |
24 |
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PART II |
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Item 1. |
25 |
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Item 1A. |
25 |
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Item 2. |
67 |
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Item 3. |
67 |
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Item 4. |
67 |
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Item 5. |
67 |
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Item 6. |
67 |
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i
PART I—FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
IN8BIO, INC.
CONDENSED BALANCE SHEETS
(In thousands, except share and per share data)
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June 30, |
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2023 |
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December 31, |
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(unaudited) |
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2022 |
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Assets |
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(Note 2) |
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Current assets |
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Cash |
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$ |
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$ |
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Prepaid expenses and other current assets |
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Total Current Assets |
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Non-current assets |
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Property and equipment, net |
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Construction in progress |
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Restricted cash |
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Right-of-use assets - finance leases |
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Right-of-use assets - operating leases |
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Other non-current assets |
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Total Non-Current Assets |
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Total Assets |
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$ |
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$ |
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Liabilities and Stockholders' Equity |
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Liabilities |
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Current liabilities |
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Accounts payable |
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$ |
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$ |
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Accrued expenses and other current liabilities |
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Short-term finance lease liability |
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Short-term operating lease liability |
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Total Current Liabilities |
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Long-term finance lease liability |
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Long-term operating lease liability |
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Total Non-Current Liabilities |
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Total Liabilities |
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Stockholders' Equity |
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Preferred stock, par value $ |
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Common stock, par value $ |
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Additional paid-in capital |
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Accumulated deficit |
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( |
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Total Stockholders' Equity |
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Total Liabilities and Stockholders' Equity |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited condensed financial statements.
1
IN8BIO, INC.
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
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Three Months Ended |
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Six Months Ended |
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2023 |
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2022 |
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2023 |
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2022 |
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Operating expenses: |
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Research and development |
$ |
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$ |
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$ |
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$ |
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General and administrative |
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Total operating expenses |
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Other income |
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— |
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Loss from operations |
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Net loss |
$ |
( |
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$ |
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$ |
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$ |
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Net loss per share – basic and diluted |
$ |
( |
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$ |
( |
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$ |
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$ |
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Weighted-average number of shares used in computing net loss per common share, basic and diluted |
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The accompanying notes are an integral part of these unaudited condensed financial statements.
2
IN8BIO INC.
CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except share data)
(Unaudited)
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Common Stock |
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Additional |
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Accumulated |
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Total |
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Shares |
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Amount |
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Capital |
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Deficit |
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Stockholders' Equity |
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Balance at December 31, 2021 |
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$ |
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$ |
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$ |
( |
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$ |
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Stock option exercises |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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( |
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Balance at March 31, 2022 |
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$ |
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$ |
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$ |
( |
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$ |
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Stock option exercises |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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( |
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( |
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Balance at June 30, 2022 |
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$ |
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$ |
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$ |
( |
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$ |
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Balance at December 31, 2022 |
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$ |
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$ |
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$ |
( |
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$ |
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Issuance of common stock, net of issuance cost |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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( |
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( |
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Balance at March 31, 2023 |
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$ |
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$ |
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$ |
( |
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$ |
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Issuance of common stock, net of issuance cost |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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( |
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( |
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Balance at June 30, 2023 |
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$ |
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$ |
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$ |
( |
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$ |
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The accompanying notes are an integral part of these unaudited condensed financial statements.
3
IN8BIO, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
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Six Months Ended June 30, |
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2023 |
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2022 |
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Operating activities |
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Net loss |
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$ |
( |
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$ |
( |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization |
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Non-cash stock-based compensation |
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Amortization of finance lease right-of-use assets |
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Amortization of operating lease right-of-use assets |
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Changes in operating assets and liabilities: |
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Prepaid expenses and other current assets |
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Other non-current assets |
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( |
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Accounts payable |
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( |
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Accrued expenses and other current liabilities |
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( |
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290 |
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Short-term operating lease liabilities |
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Long-term operating lease liabilities |
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( |
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( |
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Net cash used in operating activities |
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( |
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Investing activities |
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Purchases of property and equipment |
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( |
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( |
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Construction in progress |
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( |
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( |
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Net cash used in investing activities |
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( |
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Financing activities |
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Proceeds from the issuance of common stock, net of offering costs |
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Principal payments on finance leases |
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( |
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Exercise of common stock options |
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Net cash provided by (used in) financing activities |
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( |
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Net decrease in cash and restricted cash |
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( |
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( |
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Cash and restricted cash at beginning of period |
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Cash and restricted cash at end of period |
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$ |
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$ |
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Cash, end of period |
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$ |
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$ |
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Restricted cash, end of period |
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Cash and restricted cash, end of period |
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$ |
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$ |
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Supplemental disclosure of non-cash financing and investing activities: |
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Initial measurement of financing lease right-of-use assets and liabilities |
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$ |
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$ |
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Lease modification of financing lease right-of-use assets and liabilities |
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$ |
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$ |
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Transfer from construction in progress to property and equipment |
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$ |
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$ |
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Construction in progress in accounts payable and accrued expenses |
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$ |
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$ |
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Purchase of property and equipment in accounts payable |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited condensed financial statements.
4
IN8BIO, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. ORGANIZATION AND NATURE OF OPERATIONS
Organization and Business
IN8bio, Inc. (the “Company”) is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of gamma-delta T cell product candidates for solid and liquid tumors. The Company’s lead product candidates are currently in Phase 1 clinical trials: INB-200, for the treatment of patients with newly diagnosed glioblastoma (“GBM”), and INB-100, for the treatment of patients with hematologic malignancies that are undergoing hematopoietic stem cell transplantation (“HSCT”). In addition, the Company is currently preparing to initiate patient enrollment in the company-sponsored Phase 2 clinical trial of INB-400 in which autologous genetically modified gamma-delta T cells will be assessed in newly diagnosed GBM patients. With additional funding, the Company expects to submit its company-sponsored investigational new drug application (“IND”) and to initiate a Phase 1b clinical trial of INB-400 in which allogeneic genetically modified gamma-delta T cells will be assessed in both relapsed and newly diagnosed GBM patients. The Company’s DeltEx platform has yielded a broad portfolio of preclinical programs, including INB-300 and INB-500, focused on addressing GBM and other solid and hematological tumor types.
Incysus, Inc. (“Incysus”) was a corporation formed in the State of Delaware on November 23, 2015 and Incysus, Ltd. was incorporated in Bermuda on February 8, 2016. Incysus was the wholly owned United States subsidiary of Incysus, Ltd. On May 7, 2018, Incysus, Ltd. reincorporated in the United States in a domestication transaction (the “Domestication”) in which Incysus, Ltd. converted into a newly formed Delaware corporation, Incysus Therapeutics, Inc. (“Incysus Therapeutics”). On July 24, 2019, Incysus Therapeutics merged with Incysus. Incysus Therapeutics subsequently changed its name to IN8bio, Inc. in August 2020. Following the Domestication in May 2018 and the merging of Incysus Therapeutics and Incysus in July 2019, the Company does not have any subsidiaries to consolidate. The Company is headquartered in New York, New York.
Going Concern
To date, the Company has funded its operations primarily with proceeds from various public and private offerings of its common and preferred stock. The Company has incurred recurring losses and negative operating cash flows since its inception, including net losses of $
On August 16, 2022, the Company completed an underwritten public offering of
In November 2022, the Company filed a shelf registration statement on Form S-3 (File No. 333-268288) (the “Shelf Registration Statement”) with the Securities and Exchange Commission (“SEC”), which permits the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $
The Company has not yet generated product sales and as a result has experienced operating losses since inception. The Company expects to incur additional losses in the future as it advances its product candidates through clinical trials, seeks to expand its product candidate portfolio through developing additional product candidates, grows its clinical, regulatory and quality capabilities, and incurs costs associated with operating as a public company, and, based on the Company’s business strategy, its existing cash of $
5
Accordingly, there is substantial doubt about the Company’s ability to continue to operate as a going concern. To continue to fund the operations of the Company beyond this time period, management has developed plans, which primarily consist of raising additional capital through some combination of public equity offerings, including through ATM offerings, and identifying strategic collaborations, licensing or other arrangements to support development of the Company’s product candidates. There is no assurance, however, that any additional financing or any revenue-generating collaboration will be available when needed, that management of the Company will be able to obtain financing or enter into a collaboration on terms acceptable to the Company, or that any additional financing or revenue generated through third party collaborations will be sufficient to fund our operations through this time period. If additional capital is not available, the Company will have to significantly delay, scale back or discontinue research and development programs or future commercialization efforts. The actual amount of cash that the Company will need to operate is subject to many factors. The accompanying financial statements have been prepared on the basis that the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Significant Accounting Policies
The Company’s significant accounting policies, which are disclosed in the audited financial statements for the year ended December 31, 2022 and the notes thereto, are included in the Company’s Annual Report on Form 10-K (the “Annual Report”) that was filed with the Securities and Exchange Commission (“SEC”) on March 30, 2023. Since the date of that filing, there have been no material changes to the Company’s significant accounting policies.
Basis of Presentation
Unaudited Interim Financial Information
The condensed financial statements of the Company included herein have been prepared pursuant to the rules and regulations of the SEC. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from these condensed financial statements, as is permitted by such rules and regulations. Accordingly, these condensed financial statements should be read in conjunction with the financial statements and notes thereto in the Company's Annual Report. The results for any interim period are not necessarily indicative of results for any future period. In the opinion of the Company’s management, all adjustments (consisting of normal and recurring adjustments) considered necessary for a fair statement of the results for the interim periods presented have been included.
Use of Estimates
The preparation of condensed financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed financial statements, and the reported amounts of expenses during the reporting periods presented. Such estimates and assumptions are used for, but are not limited to, the accrual of research and development expenses, deferred tax assets and liabilities and related valuation allowance, stock-based compensation, and the useful lives of property and equipment. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Actual results could differ from those estimates.
Concentration of Credit Risk
Financial instruments that potentially expose the Company to significant concentrations of credit risk consist primarily of cash. All of the Company’s cash is deposited in accounts with major financial institutions. Such deposits are in excess of the federally insured limits.
Property and Equipment
Property and equipment are stated at cost, less accumulated depreciation. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets. Significant replacements and improvements are capitalized,
6
while maintenance and repairs, which do not improve or extend the life of the respective assets, are charged to expense as incurred.
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Estimated Useful Life |
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Furniture |
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Machinery and equipment |
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Software |
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Leasehold improvements |
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Costs for capital assets not yet placed into service are capitalized as construction-in-progress and depreciated and amortized in accordance with the above guidelines once placed into service. Upon retirement or disposal of property and equipment, the cost and related accumulated depreciation and amortization are removed from the balance sheet and any gain or loss is reflected in the statement of operations.
Recently Issued Accounting Standards Updates
The Company did not adopt any new accounting guidance during the six months ended June 30, 2023, and as of the date of this report that had a material impact on the financial statements or disclosures. Additionally, there is no pending accounting guidance that the Company expects to have a material impact on the financial statements.
3. PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consist of the following (in thousands):
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June 30, |
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December 31, |
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Prepaid research and development |
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$ |
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$ |
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Prepaid insurance |
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Other |
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Total prepaid expenses and other current assets |
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$ |
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$ |
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4. PROPERTY AND EQUIPMENT, NET
Property and equipment, net consist of the following (in thousands):
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June 30, |
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December 31, |
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Machinery and equipment |
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$ |
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$ |
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Furniture and fixtures |
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Software |
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Leasehold improvements |
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Less accumulated depreciation and amortization |
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( |
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( |
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Property and equipment, net |
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$ |
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$ |
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Depreciation and amortization expense was $
5. CONSTRUCTION IN PROGRESS
Construction in progress consists of the following (in thousands):
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June 30, |
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December 31, |
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Furniture |
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$ |
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$ |
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Internal use software not yet in service |
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Total construction in progress |
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$ |
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$ |
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7
6. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following (in thousands):
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June 30, |
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December 31, |
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Accrued clinical trials |
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$ |
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$ |
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Accrued compensation |
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Accrued legal |
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Accrued other |
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Total accrued expenses and other current liabilities |
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$ |
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$ |
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7. STOCKHOLDERS' EQUITY
The Company’s authorized capital stock consists of
8. STOCK-BASED COMPENSATION
2018 Equity Incentive Plan
On May 7, 2018, the Company established and adopted the 2018 Equity Incentive Plan (the “2018 Plan”) providing for the granting of stock awards for employees, directors and consultants to purchase shares of the Company’s common stock. Upon the effectiveness of the 2020 Plan (as defined below), the 2018 Plan was terminated and no further issuances were made under the 2018 Plan, although it continues to govern the terms of any equity grants that remain outstanding under the 2018 Plan.
2020 Equity Incentive Plan
The 2020 Equity Incentive Plan (the “2020 Plan”) was approved by the Board of Directors and the Company’s stockholders and became effective on July 29, 2021. The number of shares initially reserved for issuance under the 2020 Plan was
Amended and Restated 2023 Equity Incentive Plan
The Amended and Restated 2023 Equity Incentive Plan (the “2023 Plan”) was approved by the Board of Directors and the Company’s stockholders and became effective on June 15, 2023. The Board of Directors, or a committee thereof, is authorized to administer the 2023 Plan. The 2023 Plan provides for the grant of ISOs within the meaning of Section 422 of the IRC as amended, to employees, and for the grant of non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of awards to the Company’s employees, directors and consultants and any Company affiliates’ employees and consultants. The number of shares initially reserved for issuance under the 2023 Plan was
8
2020 Employee Stock Purchase Plan
The 2020 Employee Stock Purchase Plan (the “2020 ESPP”) was approved by the Company’s Board of Directors and the Company’s stockholders and became effective on July 29, 2021. A total of
Stock Option Activity
The following is a summary of the stock option award activity during the six months ended June 30, 2023:
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Weighted- |
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Weighted- |
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Aggregate |
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Outstanding at December 31, 2022 |
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$ |
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$ |
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Granted |
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Exercised |
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— |
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— |
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Forfeited |
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( |
) |
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Outstanding at June 30, 2023 |
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$ |
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$ |
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Exercisable at June 30, 2023 |
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$ |
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$ |
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Options expected to vest as of June 30, 2023 |
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$ |
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$ |
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