Nkarta, Inc. [NKTX] Filings

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

10-Q 1 nktx-20230930.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended September 30, 2023


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

For the transition period from to

Commission File Number: 001-39370

Nkarta, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	47-4515206
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1150 Veterans Boulevard South San Francisco, CA	94080
(Address of principal executive offices)	(Zip Code)

(925) 407-1049

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

NKTX
 

The Nasdaq Stock Market LLC
(Nasdaq Global Select Market)

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. Yes ☒ No ☐

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). Yes ☒ No ☐

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.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 6, 2023, the registrant had 49,072,342 shares of common stock, par value $0.0001 per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited):	1
	Condensed Balance Sheets as of September 30, 2023 and December 31, 2022	1
	Condensed Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2023 and 2022	2
	Condensed Statements of Stockholders’ Equity for the three and nine months ended September 30, 2023 and 2022	3
	Condensed Statements of Cash Flows for the nine months ended September 30, 2023 and 2022	5
	Notes to Unaudited Condensed Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	73
Item 3.	Defaults Upon Senior Securities	74
Item 4.	Mine Safety Disclosures	74
Item 5.	Other Information	74
Item 6.	Exhibits	75
SIGNATURES		76

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, and the information incorporated herein by reference, particularly in the sections captioned “Risk Factors” under Part II, Item 1A, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under Part I, Item 2, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements by the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “predict,” “project,” “potential,” “should,” “will,” or “would,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. In addition, these statements are based on our management’s beliefs and assumptions and on information currently available to our management as of the date of this Quarterly Report on Form 10-Q. While we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. You should read the sections titled “Risk Factor Summary” below and “Risk Factors” set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements, which such factors may be updated or supplemented from time to time by subsequent reports we file with the Securities and Exchange Commission.

Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report on Form 10-Q will prove to be accurate. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

You should read this Quarterly Report on Form 10-Q, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

RISK FACTOR SUMMARY

Below is a summary of material factors that make an investment in our common stock speculative or risky. Importantly, this summary does not address all the risks and uncertainties that we face. Additional discussion of the risks and uncertainties summarized in this risk factor summary, as well as other risks and uncertainties that we face, can be found under Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q. The below summary is qualified in its entirety by the more complete discussion of such risks and uncertainties. You should consider carefully the risks and uncertainties described under Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q as part of your evaluation of an investment in our common stock.

•

We have a limited operating history and do not have any products approved for sale.

•

We have incurred significant losses since our inception and we expect to continue to incur significant losses for the foreseeable future.

•

We have never generated revenue from product sales and may never achieve or maintain profitability.

•

We will require additional capital, which, if available, may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our product candidates.

•

Our business depends upon the success of our CAR NK cell technology platform.

•

Utilizing CAR NK cells represents a novel therapeutic approach, and we must overcome significant challenges in order to develop, commercialize and manufacture our product candidates.

•

Clinical development involves a lengthy and expensive process with an uncertain outcome, and we may encounter substantial delays due to a variety of reasons outside our control.

•

Our business is highly dependent on the clinical success of our product candidates, and on the clinical success of NKX101 and NKX019 in particular, and we may fail to develop NKX101, NKX019 and/or our other product candidates successfully or be unable to obtain regulatory approval for them.

•

Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be delayed, made more difficult or rendered impossible by multiple factors outside our control.

•

Our preclinical pipeline programs may experience delays or may never advance to clinical trials, which would adversely affect our ability to obtain regulatory approvals or commercialize these programs on a timely basis or at all.

•

The results of preclinical studies and early-stage clinical trials may not be predictive of future results. Interim, “topline” and preliminary data from our clinical trials may differ materially from the final data. Initial success in any clinical trials may not be indicative of results obtained when these trials are completed or in later stage trials.

•

If any of our product candidates, or any competing product candidates, demonstrate relevant, serious adverse events, we may be required to halt or delay further clinical development.

•

Our business and the business or operations of our research partners and other third parties with whom we conduct business have been and could continue to be adversely affected by the effects of health epidemics, including the COVID-19 pandemic, in regions where we or third parties on which we rely have business operations.

•

We have entered into a research collaboration with CRISPR Therapeutics regarding certain product candidates, and we may enter into additional collaborations with third parties to develop or commercialize other product candidates. Our prospects with respect to those product candidates will depend in significant part on the success of those collaborations, and we may not realize the benefits of such collaborations.

•

If we fail to compete effectively with academic institutions and other biopharmaceutical companies that develop similar or alternatives to cellular immunotherapy product candidates, our business will be materially adversely affected.

•

Our manufacturing process is novel and complex, and we may encounter difficulties in production, or difficulties with internal manufacturing, which would delay or prevent our ability to provide a sufficient supply of our product candidates for clinical trials or our products for patients, if approved.

•

We rely on third parties to manufacture certain materials for use in the production of our product candidates, or may rely on third parties to manufacture certain of our product candidates in the future, which increases the risk that we will not have sufficient quantities of such materials or product candidates, or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.

•

We are reliant on a sole supplier for certain steps of our manufacturing process.

iii

•

Delays in commissioning and receiving regulatory approvals for our manufacturing facilities could delay our development plans and thereby limit our ability to develop our product candidates and generate revenues.

•

If our license agreement with National University of Singapore and St. Jude Children’s Research Hospital, Inc. is terminated, we could lose our rights to key components enabling our NK cell engineering platform.

•

If any patent protection we obtain is not sufficiently robust, our competitors could develop and commercialize products and technology similar or identical to ours.

•

If any of our product candidates are approved for marketing and commercialization and we have not developed or secured marketing, sales and distribution capabilities, either internally or from third parties, we will be unable to successfully commercialize such products and may not be able to generate product revenue.

•

Our product candidates, including NKX101 and NKX019, could be subject to regulatory limitations following approval, if and when such approval is granted.

•

The market price for our common stock may be volatile, which could contribute to the loss of all or part of your investment.

•

Concentration of ownership of our shares of common stock among our existing executive officers, directors and principal stockholders may prevent new investors from influencing significant corporate decisions.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

NKARTA, INC.

CONDENSED BALANCE SHEETS

(Unaudited, in thousands)


	September 30, 2023			December 31, 2022
Assets
Current assets
Cash and cash equivalents	$	38,262		$	37,494
Short-term investments		237,351			314,649
Prepaid expenses and other current assets		5,575			8,545
Total current assets		281,188			360,688
Restricted cash		2,743			2,743
Property and equipment, net		77,687			61,908
Operating lease right-of-use assets		40,519			45,749
Other long-term assets		3,727			1,850
Total assets	$	405,864		$	472,938
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	4,284		$	1,761
Operating lease liabilities, current portion		6,057			4,249
Accrued and other current liabilities		15,299			16,036
Total current liabilities		25,640			22,046
Operating lease liabilities, net of current portion		83,408			78,685
Total liabilities		109,048			100,731
Commitments and contingencies (Note 7)
Stockholders’ equity
Common stock		5			5
Additional paid-in capital		704,900			690,814
Accumulated other comprehensive loss		(409	)		(679	)
Accumulated deficit		(407,680	)		(317,933	)
Total stockholders’ equity		296,816			372,207
Total liabilities and stockholders’ equity	$	405,864		$	472,938

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

NKARTA, INC.

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited, in thousands, except share and per share data)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Operating expenses:
Research and development	$	22,194		$	23,435		$	73,451		$	64,053
General and administrative		7,100			6,827			27,014			19,919
Total operating expenses		29,294			30,262			100,465			83,972
Loss from operations		(29,294	)		(30,262	)		(100,465	)		(83,972	)
Other income, net:
Interest income		3,616			1,900			10,651			2,698
Other income, net		33			17			67			19
Total other income, net		3,649			1,917			10,718			2,717
Net loss	$	(25,645	)	$	(28,345	)	$	(89,747	)	$	(81,255	)
Other comprehensive loss:
Net unrealized gain (loss) on investments		192			(390	)		270			(1,171	)
Comprehensive loss	$	(25,453	)	$	(28,735	)	$	(89,477	)	$	(82,426	)
Net loss per share, basic and diluted	$	(0.52	)	$	(0.58	)	$	(1.83	)	$	(1.94	)
Weighted average shares used to compute net loss per share, basic and diluted		49,062,799			48,630,328			48,985,373			41,878,716

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

NKARTA, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited, in thousands, except share data)


	Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders'
	Shares		Amount		Capital		Gain/(Loss)			Deficit			Equity
Balance, December 31, 2022		48,877,806	$	5	$	690,814	$	(679	)	$	(317,933	)	$	372,207
Vesting of shares of common stock subject to repurchase		395		—		2		—			—			2
Issuance of common stock upon exercise of stock options		253		—		1		—			—			1
Issuance of common stock upon vesting of restricted stock units		50,469		—		—		—			—			—
Share-based compensation expense		—		—		4,746		—			—			4,746
Unrealized gain on investments		—		—		—		505			—			505
Net loss		—		—		—		—			(30,815	)		(30,815	)
Balance, March 31, 2023		48,928,923	$	5	$	695,563	$	(174	)	$	(348,748	)	$	346,646
Vesting of shares of common stock subject to repurchase		113		—		1		—			—			1
Issuance of common stock upon exercise of stock options		5,892		—		21		—			—			21
Issuance of common stock upon vesting of restricted stock units		28,074		—		—		—			—			—
Common stock issued under employee stock purchase plan		95,232		—		374		—			—			374
Share-based compensation expense		—		—		4,650		—			—			4,650
Unrealized loss on investments		—		—		—		(427	)		—			(427	)
Net loss		—		—		—		—			(33,287	)		(33,287	)
Balance, June 30, 2023		49,058,234	$	5	$	700,609	$	(601	)	$	(382,035	)	$	317,978
Issuance of common stock upon vesting of restricted stock units		10,000		—		—		—			—			—
Share-based compensation expense		—		—		4,291		—			—			4,291
Unrealized gain on investments		—		—		—		192			—			192
Net loss		—		—		—		—			(25,645	)		(25,645	)
Balance, September 30, 2023		49,068,234	$	5	$	704,900	$	(409	)	$	(407,680	)	$	296,816

NKARTA, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited, in thousands, except share data)


	Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders'
	Shares		Amount		Capital		Gain/(Loss)			Deficit			Equity
Balance, December 31, 2021		32,971,107	$	3	$	455,210	$	(150	)	$	(204,096	)	$	250,967
Vesting of shares of common stock subject to repurchase		10,924		—		6		—			—			6
Issuance of common stock upon exercise of stock options		21,067		—		79		—			—			79
Share-based compensation expense		—		—		4,097		—			—			4,097
Unrealized loss on short-term investments		—		—		—		(456	)		—			(456	)
Net loss		—		—		—		—			(25,987	)		(25,987	)
Balance, March 31, 2022		33,003,098	$	3	$	459,392	$	(606	)	$	(230,083	)	$	228,706
Vesting of shares of common stock subject to repurchase		2,387		—		3		—			—			3
Issuance of common stock upon exercise of stock options, net of repurchase		88,383		—		334		—			—			334
Issuance of common stock upon secondary offering, net of issuance costs		15,333,334		2		215,332		—			—			215,334
Share-based compensation expense		—		—		3,912		—			—			3,912
Unrealized loss on short-term investments		—		—		—		(325	)		—			(325	)
Net loss		—		—		—		—			(26,923	)		(26,923	)
Balance, June 30, 2022		48,427,202	$	5	$	678,973	$	(931	)	$	(257,006	)	$	421,041
Vesting of shares of common stock subject to repurchase		1,302		—		3		—			—			3
Issuance of common stock upon exercise of stock options, net of repurchase		265,988		—		953		—			—			953
Issuance of common stock upon at-the-market offering, net of issuance costs		113,213		—		1,612		—			—			1,612
Share-based compensation expense		—		—		4,390		—			—			4,390
Unrealized loss on short-term investments		—		—		—		(390	)		—			(390	)
Net loss		—		—		—		—			(28,345	)		(28,345	)
Balance, September 30, 2022		48,807,705	$	5	$	685,931	$	(1,321	)	$	(285,351	)	$	399,264

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

NKARTA, INC.

CONDENSED STATEMENT OF CASH FLOWS

(Unaudited, in thousands)


	Nine Months Ended September 30,
	2023			2022
Cash flows from operating activities:
Net loss	$	(89,747	)	$	(81,255	)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation expense		13,687			12,399
Depreciation and amortization		3,618			1,908
Accretion and amortization of premiums and discounts on investments, net		(6,915	)		763
Realized gain on investments		(34	)		—
Impairment of right-of-use assets		4,100			—
Non-cash lease expense		1,653			3,269
Changes in operating assets and liabilities:
Prepaid expenses and other assets		1,093			(1,575	)
Operating lease liabilities		6,112			11,446
Accounts payable and accrued and other liabilities		3,627			3,376
Net cash used in operating activities		(62,806	)		(49,669	)
Cash flows from investing activities:
Purchases of property and equipment		(21,340	)		(12,073	)
Purchases of investments		(196,877	)		(310,313	)
Maturities of investments		281,395			132,950
Net cash provided by (used in) investing activities		63,178			(189,436	)
Cash flows from financing activities:
Proceeds from stock option exercises		22			1,365
Proceeds from ESPP purchases		374			—
Proceeds from ATM offering, net of issuance costs		—			1,612
Proceeds from secondary offering, net of issuance costs		—			215,611
Net cash provided by financing activities		396			218,588
Net (decrease) increase in cash and cash equivalents		768			(20,517	)
Cash, cash equivalents, and restricted cash beginning of period		40,237			62,914
Cash, cash equivalents, and restricted cash end of period	$	41,005		$	42,397
Reconciliation of cash, cash equivalents and restricted cash to the balance sheet:
Cash and cash equivalents	$	38,262		$	39,654
Restricted cash		2,743			2,743
Total cash, cash equivalents and restricted cash	$	41,005		$	42,397
Supplemental disclosures of non-cash investing activities:
Acquisitions of property and equipment in accounts payable and accrued and other current liabilities	$	1,842		$	7,228

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

NKARTA, INC.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Description of Business

Description of the Business

Nkarta, Inc. ("Nkarta" or the "Company") was incorporated in the State of Delaware in July 2015. The Company is a biopharmaceutical company developing engineered natural killer ("NK") cell therapies. The Company is focused on leveraging the natural potent power of NK cells to identify and kill abnormal cells and recruit adaptive immune effectors to generate therapeutic responses that are specific and durable. Nkarta is combining its NK expansion platform technology with proprietary cell engineering technologies to generate an abundant supply of NK cells, engineer enhanced NK cell recognition of therapeutic targets, and improve persistence for sustained activity in the body for the treatment of cancer and autoimmune disease. Nkarta’s goal is to develop off-the-shelf NK cell therapy product candidates to improve outcomes for patients. The Company’s operations are based in South San Francisco, California, and it operates in one segment.

Liquidity and Management Plans

The accompanying unaudited condensed financial statements have been prepared assuming that the Company will continue as a going concern. However, since inception, the Company has devoted substantially all of its efforts to organizing and staffing, business planning, raising capital, conducting preclinical studies and initiating clinical studies, and has not realized substantial revenues from its planned principal operations. In addition, the Company has a limited operating history, has incurred operating losses since inception and expects that it will continue to incur net losses into the foreseeable future as it continues its research and development activities. As of September 30, 2023, the Company had an accumulated deficit of $407.7 million and cash, cash equivalents, restricted cash and investments of $278.4 million.

Management plans to continue to incur substantial costs in order to conduct research and development activities for which additional capital will be needed. The Company intends to raise such capital through debt or equity financings or other arrangements to fund operations. Management believes that the Company’s current cash, cash equivalents, restricted cash and investments will provide sufficient funds to enable the Company to meet its obligations for at least twelve months from the filing date of this report.

On March 17, 2023, the Company filed a Registration Statement on Form S-3, as amended by the Form S-3/A filed on April 24, 2023 (the "Shelf Registration Statement"), covering the offer and sale from time to time, pursuant to Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"), of up to $350.0 million in aggregate offering price of shares of the Company’s common stock, shares of the Company’s preferred stock, debt securities, warrants, rights and/or units, including up to $120.0 million in aggregate offering price of shares of the Company’s common stock, shares of the Company’s preferred stock, debt securities, warrants, rights and/or units registered on the Company’s Registration Statement on Form S-3 declared effective by the Securities and Exchange Commission (the "SEC") on September 2, 2021 (the "Prior Registration Statement") that have not yet been sold. The Shelf Registration Statement was declared effective by the SEC on May 5, 2023.

On August 12, 2021, the Company entered into a sales agreement with Cowen and Company, LLC, a sales agent, to provide for the offering, issuance and sale of up to an aggregate of $150.0 million of the Company’s common stock through an “at-the-market” equity offering program (the "ATM Offering Program") pursuant to the Prior Registration Statement and subject to the limitations thereof. For the nine months ended September 30, 2023, no sales of the Company’s common stock were made pursuant to the ATM Offering Program.

2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial statements as of September 30, 2023 and for the three and nine months ended September 30, 2023 and 2022 have been prepared in accordance with U.S. generally accepted accounting principle ("U.S. GAAP") for interim financial information and pursuant to Article 10 of Regulation S-X of the Securities Act, as amended. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. These unaudited condensed financial statements include only normal and recurring adjustments that the Company believes are necessary to fairly state the Company’s financial position and the results of its operations and cash flows for the periods presented.

The results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results expected for the full year or any subsequent interim period. The condensed balance sheet at December 31, 2022 has been derived from the audited financial statements at that date but does not include all disclosures required by U.S. GAAP for complete financial statements. Because all of the disclosures required by U.S. GAAP for complete financial statements are not included herein, these unaudited condensed financial statements and the notes accompanying them should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2022, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed by the Company with the SEC on March 16, 2023.

COVID-19 Pandemic

The COVID-19 pandemic has caused disruptions in the global economy and has affected and may affect the Company’s business and operations in the future. In response to the pandemic, the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") was signed into law on March 27, 2020. The CARES Act, among other things, includes tax provisions relating to refundable payroll tax credits, deferment of employer’s social security payments, net operating loss utilization and carryback periods, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act had no impact on the Company’s income tax provision for the year ended December 31, 2022 or the nine months ended September 30, 2023. The Company continues to evaluate the impact of the CARES Act on its financial position, results of operations and cash flows.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates, including those related to preclinical studies, percentage of completion of manufacturing activities, fair value of assets and liabilities, impairment of assets, leases, share-based compensation and income taxes. Management bases its estimates on historical experience, knowledge of current events and actions it may undertake in the future that management believes to be reasonable under the circumstances. Actual results may differ from these estimates and assumptions.

Net Loss Per Share

Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period, without consideration of potential dilutive securities. Diluted net loss per share is computed by dividing the net loss by the sum of the weighted average number of common shares plus the potential dilutive effects of potential dilutive securities outstanding during the period. Potential dilutive securities are excluded from diluted earnings or loss per share if the effect of such inclusion is antidilutive. The Company’s potentially dilutive securities, which include unvested common stock, outstanding stock options and restricted stock units under the Company’s equity incentive plans, have been excluded from the computation of diluted net loss per share as they would be anti-dilutive to the net loss per share. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position.

Long-Lived Asset Impairment

The Company assesses the impairment of long-lived assets whenever events or changes in business circumstances indicate that the carrying amounts of the asset or group of assets may not be fully recoverable. In the case of property, plant and equipment and right-of-use assets for the Company's leases, the Company determines whether there has been an impairment by comparing the carrying value of the group of assets to the anticipated undiscounted net future cash flows associated with the group of assets. If such cash flows are less than the carrying value, the Company writes down the group of assets to its fair value, which may be measured as anticipated net cash flows associated with the group of assets, discounted at a rate that the Company believes a market participant would utilize to reflect the risks associated with the cash flows, such as credit risk. See Note 6 for additional information regarding the impairment charge the Company recorded in connection with its leased facilities.

Nkarta, Inc. [NKTX] Filings
10-Q	[2023-11-09]
10-Q	[2023-08-10]
10-Q	[2023-05-11]
10-K	[2023-03-16]
10-Q	[2022-11-09]
10-Q	[2022-08-11]
10-Q	[2022-05-12]
10-K	[2022-03-17]
10-Q	[2021-11-10]
10-Q	[2021-08-12]
10-Q	[2021-05-13]
10-K	[2021-03-25]
10-Q	[2020-11-12]
10-Q	[2020-08-20]
S-1	[2020-06-19]