IN8BIO, INC.

Previous wording

We are a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of gamma-delta T cell product candidates for solid and liquid tumors. Gamma-delta T cells are a specialized population of T cells that possess unique properties. They are naturally occurring immune cells that can intrinsically differentiate between healthy and diseased tissue. These cells serve as a functional bridge between innate and adaptive immunity to contribute to direct tumor killing, as well as immune cell recruitment and activation to drive deeper and more comprehensive immune responses. The pivotal role of gamma-delta T cells in immune function and activation, against diseases such as cancer, underscores their therapeutic potential across a wide range of solid and hematologic malignancies. We develop ex vivo expanded and activated gamma-delta T cell candidates based upon our deep expertise in gamma-delta T cell biology, proprietary genetic engineering, and cell-type specific manufacturing capabilities, which we refer to collectively as our DeltEx platform. Our platform employs allogeneic, autologous, induced pluripotent stem cell ("iPSC"), genetically modified cell therapy approaches and T cell engagers that are designed to effectively identify and eradicate tumor cells. We are the most clinically advanced gamma-delta T cell-focused company and are utilizing our suite of DeltEx platform technologies as we aspire to eliminate cancer cells to achieve our mission of what we refer to as Cancer Zero ─ the safe elimination of all cancer cells in every patient battling the disease. We believe this lofty aspiration will one day be achievable, and that it is our responsibility to directly contribute to related global health efforts by pursuing scientific research that will advance cancer treatment.

Current wording

We are a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of gamma-delta T cell product candidates and T cell engagers ("TCEs") for cancer and autoimmune diseases. We are the most clinically advanced gamma-delta T cell-focused company and are utilizing our suite of DeltEx platform technologies as we aspire to eliminate cancer cells to achieve our mission of what we refer to as Cancer Zero ─ the safe elimination of all cancer cells in every patient battling the disease. We develop ex vivo expanded and activated gamma-delta T cell candidates and TCEs based upon our deep expertise in gamma-delta T cell biology, proprietary genetic engineering, and cell-type specific manufacturing capabilities, which we refer to collectively as our DeltEx platform. Our platform employs allogeneic, autologous, induced pluripotent stem cell ("iPSC"), genetically modified cell therapy approaches, and TCEs that are designed to effectively identify and eradicate tumor and targeted cells. To date, we have conducted two main investigator-sponsored Phase 1 clinical trials to test our gamma-delta T cell technologies in cancer patients. INB-100 tests our DeltEx Allogeneic ("Allo") gamma-delta T cells in older patients with high-risk leukemias undergoing haploidentical stem cell transplantation ("HSCT") and INB-200 tested our DeltEx Drug Resistant Immunotherapy ("DRI") in newly diagnosed glioblastoma ("GBM") patients. Both trials have demonstrated long-term durable remissions with patients remaining alive and in remission for greater than three years.

Previous wording

In September 2024, we suspended further enrollment of patients in our Phase 2 multi-center clinical trial of INB-400, for the treatment of newly diagnosed glioblastoma ("GBM"). This trial sought to expand the assessment of genetically modified, drug-resistant immunotherapy (“DRI”) gamma-delta T cells in newly diagnosed GBM patients in specialized brain tumor centers across the United States. We will continue to follow these patients for safety, progression-free and overall survival. We have completed patient dosing in the investigator-initiated Phase 1 trial of INB-200 (NCT04165941). We will present a Plenary Oral Presentation at the Society of Neuro-Oncology Annual Meeting in November 2024 where we will provide longer-term follow-up and additional data supporting the activity of our DRI gamma-delta T cell approach from the Phase 1 trial of INB-200. In June 2024, preliminary clinical data were presented at the American Society of Clinical Oncology Annual Meeting, demonstrating that 92% of evaluable patients treated in the investigator-initiated trial exceeded the median progression-free survival ("PFS") of 7 typically months achieved by standard-of-care therapy with concomitant temozolomide. We believe our DRI gamma-delta T cell therapeutic approach is applicable to multiple solid tumor types and will seek strategic alternatives and to potentially partner this program. In April 2023, we received Orphan Drug Designation for the autologous and allogeneic INB-400 products from the Food and Drug Administration (“FDA”), covering a broad range of malignant glioma indications, including relapsed and newly diagnosed GBM.

Current wording

INB-400 is the corporate-sponsored investigational new drug application ("IND") for the Phase 2, multi-center clinical trial for our DeltEx DRI technology for the treatment of newly diagnosed GBM. While the IND remains open and we continue to treat any enrolled patients, in September 2024, we implemented a pipeline prioritization, suspending enrollment in the Phase 2 Trial of INB-400. This trial sought to expand the assessment of genetically modified, DRI gamma-delta T cells in newly diagnosed GBM patients in multiple centers across the United States. We will continue to follow any treated patients for safety, PFS and OS with preliminary data to be reported in 2025. We believe our DeltEx DRI gamma-delta T cell therapeutic approach is demonstrating clinical activity and can be applied to multiple solid tumor types. We are seeking alternative funding sources and strategic opportunities to potentially partner this program. In April 2023, we received Orphan Drug Designation for the autologous and allogeneic INB-400 products from the FDA, covering a broad range of malignant glioma indications, including relapsed and newly diagnosed GBM.

Previous wording

We also have a portfolio of preclinical programs in development, including INB-300, which focuses on targeting various solid and liquid tumors using a dedicated non-signaling gamma-delta T cell based chimeric antigen receptor ("nsCAR") construct. We presented additional preclinical data demonstrating our proof-of-concept in vitro studies, run in triplicate, against the leukemia antigen targets CD33 and CD123, which demonstrated the ability of our nsCAR constructs to distinguish between tumor and healthy tissue, at the American Association for Cancer Research Annual Meeting in 2024. We plan to continue to optimize the construct for advancement towards animal models, potentially IND enabling studies and opportunities for potential partnership.

Current wording

We also have a portfolio of preclinical programs in development. These include INB-300, which is applicable to both solid and liquid tumors using a targeted non-signaling gamma-delta T cell based chimeric antigen receptor ("nsCAR") construct, and INB-500, which encompasses our ability to produce gamma-delta T cells from iPSCs. iPSCs represent a significant step toward next generation approaches of cellular manufacturing for true allogeneic and potentially "off-the-shelf" innate cell therapies. We presented additional preclinical data for INB-300, demonstrating our proof-of-concept in vitro studies, run in triplicate, against the leukemia antigen targets CD33 and CD123, at the AACR Annual Meeting in 2024. These data demonstrated the ability of our nsCAR constructs to distinguish between tumor tissue and healthy tissue. We plan to continue to optimize the nsCAR construct for advancement towards animal models, IND enabling studies and opportunities for potential partnership.

Previous wording

Our condensed financial statements have been prepared in conformity with generally accepted accounting principles which contemplate continuation of the Company on a going concern basis. The going concern basis assumes that assets are realized, and liabilities are extinguished in the ordinary course of business at amounts disclosed in the condensed financial statements. We have not yet generated product sales and, as a result, have experienced operating losses since inception. We expect to incur additional losses in the future as we advance our product candidates through clinical trials, seek to expand our product candidate portfolio through developing additional product candidates, grow our clinical, regulatory and quality capabilities, and incur costs associated with operating as a public company. The actual amount of cash that we will need to operate is subject to many factors. Based on our business strategy, we expect that our existing cash of $4.0 million as of September 30, 2024, including the additional net proceeds of $11.6 million from the 2024 Private Placement, will fund the Company’s projected operating expenses and capital expenditure requirements through December 2025. Accordingly, there is substantial doubt about the Company’s ability to continue to operate as a going concern for a period of 12 months from the date of issuance of these condensed financial statements. We have taken measures to defer or reduce costs in the near term in order to preserve capital and increase financial flexibility. These cash preservation measures may impact our ability and the timing to execute our strategy, including our ability to achieve the anticipated milestones and the timing of patient enrollment and/or regulatory filings for our preclinical and clinical programs.

Current wording

We expect to incur additional losses in the future as we advance our product candidates through clinical trials, seek to expand our product candidate portfolio through developing additional product candidates, grow our clinical, regulatory and quality capabilities, and incur costs associated with operating as a public company. Based on our business strategy, our existing cash of $11.9 million as of March 31, 2025 is not anticipated to fund the Company’s projected operating expenses and capital expenditure requirements for a period of at least 12 months from the date of issuance of these condensed financial statements, and accordingly, there is substantial doubt about the Company’s ability to continue to operate as a going concern.

Previous wording

To continue to fund our operations, management has developed plans, which primarily consist of the pipeline prioritization and workforce reduction, raising additional capital through some combination of equity and/or debt offerings, including through our ATM program, and identifying strategic collaborations, licensing or other arrangements to support development of our product candidates. In addition, we may receive an additional $5.4 million and $12.4 million in aggregate proceeds if the holders of our Series A warrants and Series C warrants exercise their warrants, respectively. Further, if not otherwise redeemed by us, we may also receive aggregate proceeds of up to $17.7 million from the exercise of our outstanding Series B warrants. There is no assurance, however, that we will receive any additional proceeds from these warrants or that any additional financing or any revenue-generating collaboration will be available, when needed. If additional capital is not available to us on a timely basis, or at all, we will be required to take additional actions beyond the cost preservation measures initiated to address our liquidity needs, including exploring other strategic options, continuing to further reduce operating expense by delaying, reducing the scope of, or discontinuing our research and development activities. If the Company becomes unable to continue as a going concern, it may have to terminate its operations and dispose of its assets and might realize significantly less than the values at which they are carried on its condensed financial statements. These actions may cause the Company’s stockholders to lose all or part of their investment in the Company’s common stock.

Current wording

We continue to deploy cash preservation measures to defer or reduce costs in the near term in order to preserve capital and increase financial flexibility given the ongoing market environment for biotechnology stocks. These cash preservation measures may impact our ability and the timing to execute our strategy, including our ability to achieve the anticipated milestones and the timing of regulatory filings for our preclinical and clinical programs. To continue to fund our operations, management has developed plans, which primarily consist of the pipeline prioritization and workforce reduction, raising additional capital through some combination of equity and/or debt offerings, including through our ATM program, and identifying strategic collaborations, licensing or other arrangements to support development of our product candidates. In addition, as of May 1, 2025, we may receive an additional $1.9 million and $8.1 million in aggregate proceeds if the holders of our Series A warrants and Series C warrants exercise their warrants, respectively. Further, if not otherwise redeemed by us, we may also receive aggregate proceeds of up to $4.1 million from the exercise of our outstanding Series B warrants. There is no assurance, however, that we will receive any additional proceeds from the Private Placements or that any additional financing or any revenue-generating collaboration will be available when needed, that management will be able to obtain financing or enter into a collaboration on terms acceptable to us, or that any additional financing or revenue generated through third-party collaborations will be sufficient to fund our operations. If additional capital is not available to us on a timely basis, or at all, we will be required to take additional actions beyond the cost preservation measures initiated to date to address our liquidity needs, including exploring other strategic options, continuing to further reduce operating expense or delaying, reducing the scope of, discontinuing or altering our research and development activities. For additional information, see "—Liquidity" below.

Previous wording

We expense research and development costs as incurred. Costs for external development activities are recognized based on an evaluation of the progress to completion of specific tasks using information provided to us by our vendors. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our condensed financial statements as prepaid or accrued research and development expenses. We allocate our direct external research and development costs across each product candidate. Preclinical expenses consist of external research and development costs associated with activities to support our current and future clinical programs but are not allocated by product candidate due to the overlap of the potential benefit of those efforts across multiple product candidates.

Current wording

We expense research and development costs as incurred. Costs for external development activities are recognized based on an evaluation of the progress to completion of specific tasks using information provided to us by our vendors. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our financial statements as prepaid or accrued research and development expenses. We allocate our direct external research and development costs across each product candidate. Preclinical expenses consist of external research and development costs associated with activities to support our current and future clinical programs but are not allocated by product candidate due to the overlap of the potential benefit of those efforts across multiple product candidates.

Previous wording

General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive and finance functions. General and administrative expenses also include professional fees for legal, accounting, auditing, tax and consulting services; travel expenses; director and officer insurance expenses as a publicly traded company; and facility-related expenses, which include allocated expenses for rent and maintenance of facilities and other operating costs not included in research and development.

Current wording

General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive and finance functions. General and administrative expenses also include professional fees for legal, accounting, auditing, tax and consulting services; travel expenses; director and officer insurance expenses as a publicly traded company; and facility-related expenses, which include shared expenses for rent and maintenance of facilities and other operating costs not included in research and development.

Previous wording

General and administrative expenses were $2.7 million for the three months ended September 30, 2024, compared to $3.4 million for the comparable prior year period. The decrease of $0.7 million was primarily due to a decrease in salaries and bonus as a result of our workforce reduction and cost savings related to directors' and officers' insurance premiums, partially offset by an increase in professional services.

Current wording

General and administrative expenses were $2.7 million for the three months ended March 31, 2025, compared to $3.7 million for the comparable prior year period. These amounts include non-cash items such as SBC and depreciation. The decrease of $1.0 million was primarily due to a decrease in personnel-related costs, including SBC, cost savings related to directors' and officers' insurance premiums and a reduction in professional services.

Previous wording

Interest income was $0.1 million for the three months ended September 30, 2024. We did not have interest income for the comparable period in the prior year. The increase was due to interest income earned from cash sweep accounts, which we opened during the first quarter of 2024.

Current wording

Interest income was $0.1 million for the three months ended March 31, 2025 and 2024.

Previous wording

We have funded our operations primarily through the sale of equity and equity-linked securities, including through our IPO, follow-on offerings, private placements and our ATM program. Through the date of this Quarterly Report, we have raised an aggregate of $132.1 million of gross proceeds from the sale of our securities.

Current wording

We have funded our operations primarily through the sale of equity and equity-linked securities, including through our IPO, follow-on offering, our ATM program and the Private Placements (as defined below). Through March 31, 2025, we have raised an aggregate of $135.9 million of gross proceeds from the sale of our securities.

Previous wording

In October 2024, the Company issued and sold units, comprised of an aggregate of 25,696,305 shares of the Company's common stock, 5,646,853 2024 Pre-Funded Warrants and 31,343,158 Series C Warrants, for net proceeds of $11.6 million after deducting placement agent fees and other estimated private placement expenses. The 2024 Pre-Funded Warrants have an exercise price of $0.0001 and the Series C Warrants have an exercise price of $0.27 per share. Each 2024 Pre-Funded Warrant is exercisable immediately and remains exercisable until exercised in full andeach Series C warrant is exercisable immediately and will expire on October 4, 2027.

Current wording

In October 2024, the Company issued and sold units, comprised of an aggregate of 25,696,305 shares of the Company's common stock, 5,646,853 Pre-Funded warrants (the “2024 Pre-Funded Warrants”) and 31,343,158 Series C warrants, for net proceeds of $11.6 million after deducting placement agent fees and other estimated private placement expenses (the “2024 Private Placement”). The 2024 Pre-Funded Warrants have an exercise price of $0.0001 and the Series C warrants have an exercise price of $0.27 per share. Each 2024 Pre-Funded Warrant is exercisable immediately and remains exercisable until exercised in full and each Series C warrant is exercisable immediately and will expire on October 4, 2027.

Previous wording

As of September 30, 2024, we had issued and outstanding 574,241 pre-funded warrants, 11,803,829 Series A warrants (subject to amendment as described below) and 11,823,829 Series B warrants. The pre-funded warrants have an exercise price of $0.0001 per share. The Series A warrants, as amended, have an exercise price of $0.45 per share. the Series B warrants have an exercise price of $1.50 per share, and the Series C warrants have an exercise price of $0.395 per share. The Series A warrants are exercisable immediately and will expire on October 4, 2025. The Series B warrants are exercisable immediately and expire on December 13, 2028. The Series C warrants are exercisable immediately and will expire on October 4, 2027.

Current wording

In December 2023, the Company issued 574,241 pre-funded warrants (the “2023 Pre-Funded warrants”), 11,823,829 Series A warrants and 11,823,829 Series B warrants, for net proceeds of $13.5 million (the “2023 Private Placement” and, together with the 2024 Private Placement, the “Private Placements”). The 2023 Pre-Funded warrants have an exercise price of $0.0001 per share, are exercisable immediately and are exercisable until the 2023 Pre-Funded warrant is exercised in full. The Series B warrants have an exercise price of $1.50 per share. The Series B warrants are exercisable immediately and expire on December 13, 2028. The Series B warrants allow the Company to redeem such warrants at a price of $0.01 per Series B warrant upon the Company’s public announcement of its INB-100 data for all enrolled patients covering a period of at least 22 months, along with certain stock price and trading volume requirements. Holders of Series B warrants may choose to exercise such warrants at a purchase price of $1.50 per share prior to such redemption.

Previous wording

In connection with the closing of the 2024 Private Placement, we amended certain of our outstanding series A common stock purchase warrants (“Series A Warrants”), representing approximately 11,734,076 shares of our Common Stock, to (i) reduce the exercise price from $1.25 to $0.45 per share and (ii) extend the termination date of the Series A Warrants to October 4, 2025

Current wording

In connection with the closing of the 2024 Private Placement, the Company amended certain of the Company’s outstanding Series A warrants, representing approximately 11,714,076 shares of the Company’s common stock, to (i) reduce the exercise price from $1.25 to $0.45 per share and (ii) extend the termination date of such Series A warrants to October 4, 2025 (the “Amended Series A Warrants”). The remainder of the Series A warrants (the “Unamended Series A warrants” and, together with the Amended Series A Warrants, the “Series A warrants”) have an exercise price of $1.25 per share.

Previous wording

We may receive up to an aggregate of approximately $17.8 million of gross proceeds from the exercise of the Series A and Series C warrants, assuming the exercise in full of all of the warrants for cash. Further, if not otherwise redeemed by us, we may also receive aggregate proceeds of up to $17.7 million from the exercise of our outstanding Series B warrants. There is no assurance, however, that we will receive any additional proceeds from these warrants or that any additional financing or any revenue-generating collaboration will be available, when needed. See Note 8, Warrants, to our condensed financial statements for additional information.

Current wording

After giving effect to the Warrant Exchanges and Warrant Exercises, we may receive up to an aggregate of $9.9 million of gross proceeds from the exercise of the Series A warrants, Series C warrants and pre-funded warrants, assuming the exercise in full of all of such warrants for cash. Further, after giving effect to the Warrant Exchanges and Warrant Exercises, if not otherwise redeemed by us, we may also receive aggregate proceeds of up to $4.1 million from the exercise of our outstanding Amended Series B warrants. There is no assurance, however, that we will receive any additional proceeds from these warrants or that any additional financing or any revenue-generating collaboration will be available, when needed. See Note 7, Warrants, for additional information.

Previous wording

In November 2022, we filed a shelf registration statement on Form S-3 (File No. 333-268288) with the SEC, which permits the offering, issuance and sale by us of up to a maximum aggregate offering price of $200 million of our securities, of which $50 million of common stock may be issued and sold pursuant to an ATM program. We entered into a Controlled Equity Offering SM sales agreement, or the Sales Agreement, with Cantor Fitzgerald and Truist, under which Cantor Fitzgerald and Truist agreed to act as our sales agents to sell shares of our common stock, from time to time, through the ATM program. On March 8, 2024, we delivered a termination notice to Truist, removing them as a sales agent under the ATM program. Such termination became effective on March 14, 2024. During the nine months ended September 30, 2024, we sold an aggregate of 3,479,623 shares of our common stock under the ATM program, resulting in net proceeds of approximately $3.8 million after deducting commissions and offering expenses.

Current wording

In November 2022, we filed a shelf registration statement on Form S-3 (File No. 333-268288), or the Shelf Registration Statement, with the SEC, which permits the offering, issuance and sale by us of up to a maximum aggregate offering price of $200 million of our securities, of which $50 million of common stock may be issued and sold pursuant to an ATM program. We entered into a Controlled Equity Offering SM sales agreement (the "Sales Agreement") with Cantor Fitzgerald and Truist, under which Cantor Fitzgerald and Truist agreed to act as our sales agents to sell shares of our common stock, from time to time, through the ATM program. On March 8, 2024, the Company delivered a termination notice to Truist, removing them as a sales agent under the ATM program. Such termination became effective on March 14, 2024. During the three months ended March 31, 2025, we sold an aggregate of 7,362,852 shares of our common stock under the ATM program, resulting in net proceeds of approximately $3.7 million after deducting underwriting discounts.

Previous wording

Additionally, inflationary factors, such as increases in the cost of our clinical trial materials and supplies, interest rates and overhead costs may adversely affect our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience increases in the near future (especially if inflation rates rise) on our operating costs, including our labor costs and research and development costs, due to supply chain constraints, consequences associated with geopolitical tensions such as the Israel-Hamas war and the Russia-Ukraine war, and employee availability and wage increases, which may result in additional stress on our working capital resources.

Current wording

Additionally, inflationary factors, such as increases in the cost of our clinical trial materials and supplies, interest rates and overhead costs may adversely affect our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience increases in the near future (especially if inflation rates rise) on our operating costs, including our labor costs and research and development costs, due to supply chain constraints, consequences associated with geopolitical tensions such as the Israel-Hamas war and the Russia-Ukraine war, any tariffs enacted by the U.S. government and employee availability and wage increases, which may result in additional stress on our working capital resources.

Previous wording

If we raise funds through strategic collaboration, licensing or other arrangements, we may relinquish significant rights or grant licenses on terms that are not favorable to us. Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions, increases in inflation expectations and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from uncertain economic conditions including inflation expectations and interest rates, the upcoming Federal election, bank failures, public health crises such as the COVID-19 pandemic, any potential for avian influenza or similar outbreak and other geopolitical tensions, such as the Israel-Hamas war and the Russia-Ukraine war. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or explore other strategic options for our product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.

Current wording

If we raise funds through strategic collaboration, licensing or other arrangements, we may relinquish significant rights or grant licenses on terms that are not favorable to us. Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions, increases in inflation expectations and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from uncertain economic conditions including inflation expectations and interest rates, uncertainties arising as a result of the change in U.S. federal administration, bank failures, public health crises such as the COVID-19 pandemic, any potential for avian influenza or similar outbreak and other geopolitical tensions, such as the Israel-Hamas war and the Russia-Ukraine war. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or explore other strategic options for our product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.

Previous wording

Our material cash requirements as of September 30, 2024 included operating lease commitments, including the lease of our current headquarters office in New York, New York, laboratory and office space in Birmingham, Alabama and a manufacturing service agreement with a third party to engage in research of cell therapy products. As of September 30, 2024, we had fixed lease payment obligations of $6.7 million, with $3.2 million payable within 12 months. See Note 13, Equipment and Facility Leases to our condensed financial statements for additional information.

Current wording

Our material cash requirements as of March 31, 2025 included operating lease commitments, including the lease of our current headquarters office in New York, New York, laboratory and office space in Birmingham, Alabama and a manufacturing service agreement with a third party to engage in research of cell therapy products. As of March 31, 2025, we had fixed lease payment obligations of $5.2 million, with $1.7 million payable within 12 months. In April 2025, we terminated our operating lease for additional unutilized office space in Birmingham, Alabama. We paid a one-time termination fee of $0.1 million, and will pay five monthly payments of $20,000, beginning June 1, 2025. Reflecting this termination, as of May 1, 2025, we had fixed lease payment obligations of $4.3 million, with $1.6 million payable within 12 months. See Note 12, Equipment and Facility Leases, for additional information.

Previous wording

Cash used in operating activities was $20.1 million during the nine months ended September 30, 2024, primarily due to our net loss of $24.3 million and changes in operating assets and liabilities of $2.2 million, partially offset by an increase in non-cash charges of $6.1 million. Decreases in our operating assets and liabilities consisted primarily of $2.2 million in accrued expenses and other current liabilities relating primarily to accrued compensation, accrued clinical trials, and accrued legal, $0.7 million in long-term operating liabilities, partially offset by an increase of $0.2 million in accounts payable. Increases in our non-cash charges consisted primarily of $4.2 million in stock-based compensation due to the acceleration in full of outstanding unvested stock options as a result of our workforce reduction in September 2024, $1.2 million in amortization of right-of-use assets associated with our operating and finance leases for the period, and $0.7 million of depreciation.

Current wording

Cash used in operating activities was $3.1 million during the three months ended March 31, 2025, primarily due to our net loss of $5.6 million, partially offset by an increase in non-cash charges of $1.5 million and changes in operating assets and liabilities of $0.7 million. Increases in our operating assets and liabilities consisted primarily of $0.6 million in prepaid expenses and other current assets and $0.2 million in accounts payable, partially offset by decreases of $0.1 million in accrued expenses and other current liabilities relating primarily to accrued compensation, accrued clinical trials, and accrued legal. Increases in our non-cash charges consisted primarily of $0.8 million in stock-based compensation, $0.4 million in amortization of right-of-use assets associated with our operating and finance leases for the period and $0.3 million of depreciation.

Previous wording

Cash used in operating activities was $18.5 million during the nine months ended September 30, 2023, primarily due to our net loss of $22.4 million and changes in operating assets and liabilities of $1.1 million, partially offset by an increase in non-cash charges of $5.0 million. Decreases in our operating assets and liabilities consisted primarily of $1.2 million in accounts payable and $0.6 million in long-term operating liabilities, partially offset by an increase of $0.3 million in prepaid expenses and other current assets, $0.3 million in accrued expenses and other current liabilities relating to accrued leasehold improvements and accrued manufacturing costs and $0.1 million in short-term operating liabilities. Increases in our non-cash charges consisted primarily of $3.1 million in stock-based compensation due to increased employee headcount resulting from growth in our business, $1.2 million in amortization of right-of-use assets associated with our operating and finance leases for the period and $0.7 million of depreciation.

Current wording

Cash used in operating activities was $7.9 million during the three months ended March 31, 2024, primarily due to our net loss of $8.6 million and changes in operating assets and liabilities of $1.1 million, partially offset by an increase in non-cash charges of $1.9 million. Decreases in our operating assets and liabilities consisted primarily of $2.1 million in accrued expenses and other current liabilities relating primarily to accrued compensation, accrued clinical trials, and accrued legal and $0.2 million in long-term operating liabilities, partially offset by an increase of $0.8 million in prepaid expenses and other current assets and $0.5 million in accounts payable. Increases in our non-cash charges consisted primarily of $1.2 million in stock-based compensation due to increased employee headcount resulting from growth in our business, $0.4 million in amortization of right-of-use assets associated with our operating and finance leases for the period and $0.2 million of depreciation.

Previous wording

Cash used in investing activities was $0.2 million during the nine months ended September 30, 2024, primarily due to purchases of property and equipment and construction in progress activity in relation to capitalized software.

Current wording

Cash used in investing activities was $0.1 million during the three months ended March 31, 2024, primarily due to purchases of property and equipment and construction in progress activity in relation to capitalized software.

Previous wording

Cash provided by financing activities was $3.0 million during the nine months ended September 30, 2024, primarily due to proceeds received from the issuance and sale of common stock pursuant to the ATM program of $3.8 million, partially offset by principal payments of $0.6 million on our leases and $0.2 million of deferred issuance costs.

Current wording

Cash provided by financing activities was $3.9 million during the three months ended March 31, 2025, primarily due to $3.7 million in net proceeds received from our ATM program, $0.4 million in Series C warrants exercised, partially offset by $0.2 million in principal payments of finance leases.

Previous wording

Cash provided by financing activities was $13.7 million during the nine months ended September 30, 2023, primarily due to proceeds received from the issuance and sale of common stock pursuant to the ATM program of $14.3 million offset by principal payments of $0.6 million on our leases.

Current wording

Cash used in financing activities was $0.3 million during the three months ended March 31, 2024, primarily due to principal payments of $0.2 million on our leases and $0.1 million of issuance costs.

Previous wording

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our condensed financial statements, which are prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our condensed financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, costs and expenses. We base our estimates and assumptions on historical experience, known trends and other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates. In making estimates and judgments, management employs critical accounting policies.

Current wording

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our condensed financial statements, which are prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, costs and expenses. We base our estimates and assumptions on historical experience, known trends and other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates. In making estimates and judgments, management employs critical accounting policies.

Previous wording

We have listed below our critical accounting policies that we believe to have the greatest potential impact on our condensed financial statements. Historically, our assumptions, judgments and estimates relative to our critical accounting estimates have not differed materially from actual results.

Current wording

We have listed below our critical accounting policies that we believe to have the greatest potential impact on our financial statements. Historically, our assumptions, judgments and estimates relative to our critical accounting estimates have not differed materially from actual results.

Previous wording

As part of the process of preparing our financial statements, we are required to estimate our accrued research and development expenses. We make estimates of our accrued expenses as of each condensed balance sheet date in the condensed financial statements based on facts and circumstances known to us at that time. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or the amount of prepaid expenses accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period. To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses.

Current wording

As part of the process of preparing our financial statements, we are required to estimate our accrued research and development expenses. We make estimates of our accrued expenses as of each balance sheet date in the financial statements based on facts and circumstances known to us at that time. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or the amount of prepaid expenses accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period. To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses.

Previous wording

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an annual and interim basis. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 on a retrospective basis. The Company does not expect the effect of this pronouncement to have a material impact on its disclosures.

Current wording

During the three months ended March 31, 2025, we adopted Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-07 effective January 1, 2025. See Note 13, Segments, in the accompanying notes to the condensed financial statements for further detail. Additionally, there is no pending accounting guidance that we expect to have a material impact on the condensed financial statements.

Previous wording

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands the disclosures required for income taxes. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendment should be applied on a prospective basis while retrospective application is permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures.

Current wording

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands the disclosures required for income taxes. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2023-09 and we will adopt it for fiscal year ending December 31, 2025.