Q32 Bio Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

For the quarterly period ended June 30,2024

OR

For the transition period from ___________________ to ___________________

Commission File Number:001-38433

Q32 Bio Inc.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (781)999-0232

N/A

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

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

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, a 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 August 1, 2024, the registrant had 12,059,786 shares of common stock, $0.0001 par value per share, outstanding.

SUMMARY OF MATERIAL RISKS ASSOCIATED WITH OUR BUSINESS

Our ability to implement our business strategy is subject to numerous risks that you should be aware of before making an investment decision. These risks include the following, among others:

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We have incurred significant losses since inception, expect to incur significant losses for the foreseeable future and may not be able to achieve or sustain profitability in the future. We have no products for sale, have not generated any product revenue and may never generate product revenue or become profitable.

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We will require substantial additional capital to finance our operations in the future. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce or eliminate clinical trials, product development programs or future commercialization efforts.

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We have a limited operating history and no products approved for commercial sale, which may make it difficult for you to evaluate our current business and likelihood of success and viability.

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We face competition from entities that have developed or may develop programs for the diseases we plan to address with bempikibart, ADX-097 or other product candidates.

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Bempikibart, ADX-097 and our other product candidates are in early stages of development and may fail in development or suffer delays that materially and adversely affect their commercial viability. If we or future collaborators are unable to complete development of, or commercialize, our product candidates, or experience significant delays in doing so, our business will be materially harmed.

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We are substantially dependent on the success of our most advanced product candidates, bempikibart and ADX-097, and our clinical trials of such candidates may not be successful.

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Our business relies on certain licensing rights from Bristol Myers Squibb Company, or BMS, that can be terminated in certain circumstances. If we breach the BMS License Agreement, or if we are unable to satisfy our obligations related to the intellectual property we have licensed from BMS, we could lose the ability to develop and commercialize bempikibart.

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Our ability to protect our patents and other proprietary rights is uncertain, exposing us to the possible loss of competitive advantage.

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We and our independent registered public accounting firm have identified a material weakness in our internal control over financial reporting. If we are unable to remediate this material weakness, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect our business and the market price of our common stock.

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The market price of our common stock is expected to be volatile, and the market price of our common stock may drop.

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We may incur losses for the foreseeable future and might never achieve profitability.

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If we fail to attract and retain management and other key personnel, we may be unable to continue to successfully develop or commercialize our product candidates or otherwise implement our business plan.

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We will need to raise additional financing in the future to fund our operations, which may not be available to us on favorable terms or at all.

The summary risk factors described above should be read together with the text of the full risk factors below in the section titled “Risk Factors” and the other information set forth in this Quarterly Report on Form 10-Q, or Form 10-Q, including our consolidated financial statements and the related notes, as well as in other documents that we file with the U.S. Securities and Exchange Commission, or SEC. The risks summarized above or described in full below are not the only risks that we face. Additional risks and uncertainties not precisely known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, results of operations, and future growth prospects.

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FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains statements that are not historical facts and are considered forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward looking statements in this Quarterly Report on Form 10-Q may include, for example, statements about:

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our ability to achieve and sustain profitability in the future;

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our strategies, prospects, plans, expectations or objectives of management for our future operations;

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estimates of our future expenses, revenues, capital requirements, and our needs for additional financing;

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our estimates of and anticipated use of our existing cash, cash equivalents and marketable securities;

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the progress, scope or timing of the development of our product candidates;

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our expectations surrounding the potential safety, efficacy, and regulatory and clinical progress of our product candidates, including bempikibart and ADX-097, and our anticipated milestones and timing therefor;

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our ability to obtain and maintain regulatory approval of our product candidates;

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our ability to achieve and maintain market acceptance and adoption of our product candidates;

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the benefits that may be derived from any of our future products or the commercial or market opportunity with respect to any of our future products;

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our ability to maintain patent protection for our product candidates and protect our intellectual property rights;

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our ability to successfully compete against other companies developing similar products to ours;

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our anticipated operations, financial position, ability to raise capital to fund our operations, revenues, costs or expenses;

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our ability to retain our key executives and to attract and retain highly qualified personnel;

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our ability to successfully protect against cyber-attacks, security breaches and other disruptions to our information technology systems;

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our ability to establish and maintain an effective system of internal controls over financial reporting;

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the effect of uncertainties related to economic downturns, public health crises, and other macroeconomic conditions;

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our reliance on third parties in the supply and manufacture of our product candidates;

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the impact of applicable laws and regulations, whether in the U.S. or foreign jurisdictions, and any changes thereto;

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the statements regarding our future economic conditions or performance, statements of belief and any statement of assumptions underlying any of the foregoing; and

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other risks and uncertainties, including those listed under the caption “Risk Factors.”

These forward-looking statements are based on information available to us at the time of this Quarterly Report on Form 10-Q and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and except as otherwise required by applicable law, we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties, and other factors. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements, including those set forth in this Quarterly Report on Form 10-Q in the section titled “Risk Factors” and in our periodic filings with the SEC. Our SEC filings are available

ii publicly on the SEC’s website at www.sec.gov. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Should one or more of the risks or uncertainties described in this Quarterly Report on Form 10-Q, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.

This Quarterly Report on Form 10-Q includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. We are responsible for all of the disclosure contained in this Quarterly Report on Form 10-Q, and we believe these industry publications and third-party research, surveys and studies are reliable.

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