Artiva Biotherapeutics, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations and the unaudited interim condensed financial statements and related notes included in this Quarterly Report on Form 10-Q should be read in conjunction with the financial statements and related notes thereto as of and for the year ended December 31, 2023 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in the prospectus filed on July 22, 2024, pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the Securities Act), with the Securities and Exchange Commission (the SEC) , or the Prospectus. This discussion and analysis and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements based upon current beliefs, plans and expectations related to future events and our future financial performance that involve risks, uncertainties and assumptions, such as statements regarding our intentions, plans, objectives and expectations for our business. Our actual results and the timing of selected events could differ materially from those described in or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the sections of this Quarterly Report on Form 10-Q entitled “Special Note Regarding Forward-Looking Statements” and “Risk Factors,” under Part II, Item 1A.

Current wording

The following discussion and analysis of our financial condition and results of operations and the unaudited interim condensed financial statements and related notes included in this Quarterly Report on Form 10-Q (the Quarterly Report) should be read in conjunction with the audited financial statements and related notes thereto as of and for the year ended December 31, 2024, and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on March 24, 2025 (Annual Report). This discussion and analysis and other parts of this Quarterly Report contain forward-looking statements based upon current beliefs, plans and expectations related to future events and our future financial performance that involve risks, uncertainties and assumptions, such as statements regarding our intentions, plans, objectives and expectations for our business. Our actual results and the timing of selected events could differ materially from those described in or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the sections of this Quarterly Report entitled “Special Note Regarding Forward-Looking Statements” and “Risk Factors,” under Part II, Item 1A.

Previous wording

We are a clinical-stage biotechnology company focused on developing natural killer (NK) cell-based therapies for patients suffering from devastating autoimmune diseases and cancers. Our product candidates are derived from donor cells (allogeneic) rather than a patient’s own cells (autologous) and are pre-manufactured, stored frozen and ready to ship to a patient’s treatment location, making them what we believe to be “off-the-shelf.” Our lead product candidate, AlloNK, is a non-genetically modified, cryopreserved NK cell therapy being evaluated in combination with B-cell targeted monoclonal antibodies (mAbs) in an ongoing Phase 1/1b trial in systemic lupus erythematosus (SLE) with or without lupus nephritis (LN) and a basket investigator-initiated trial (IIT) in multiple autoimmune indications. Seminal peer-reviewed clinical studies using autologous CD19 chimeric antigen receptor (CAR) T-cell therapy (auto-CAR-T) for the treatment of autoimmune diseases have demonstrated that deep B-cell depletion in the periphery and in the lymphoid tissue can lead to drug free disease remission. We have already demonstrated that AlloNK in combination with rituximab was able to drive deep B-cell depletion in the periphery and observed complete responses (CRs) in heavily pre-treated patients naïve to auto-CAR-T in our ongoing Phase 1/2 clinical trial in patients with relapsed or refractory B-cell non-Hodgkin lymphoma (B-NHL). We believe the preliminary results from our Phase 1/2 clinical trial evaluating AlloNK in combination with rituximab in patients with B-NHL provide a readthrough to autoimmune disease because efficacy in both diseases appears to be accomplished with a shared mechanism of action involving B-cell depletion in the periphery and in the lymphoid tissues, followed by an immunological reset and B-cell reconstitution. We expect to report initial data on autoimmune indications from at least one of our Phase 1/1b trial or the basket IIT in the first half of 2025.

Current wording

In May 2025, we announced our initiation in late 2024 of patient treatment with AlloNK in combination with mAbs in the Phase 1/1b trial in SLE / LN, and prioritization of patient enrollment for AlloNK in combination with obinutuzumab. In addition, we announced that, following Investigational New Drug application clearance by the U.S. Food and Drug Administration, we are initiating a global Phase 2a company-sponsored basket clinical trial for AlloNK in combination with rituximab for refractory rheumatoid arthritis (RA), Sjögren’s disease, idiopathic inflammatory myopathies and systemic sclerosis, with site initiation underway, which we believe is the first company-sponsored trial exploring an allogeneic cell therapy in refractory RA and Sjögren’s disease in the U.S. The protocol for the Phase 2a basket trial allows for continuous enrollment with no stagger within dose levels and no hospitalization or inpatient requirement for patients dosed with AlloNK, and we are currently exploring 1 billion cells per AlloNK dose in company-sponsored trials with plan to escalate to 4 billion cells per AlloNK dose, across both company-sponsored trials. Seminal peer-reviewed clinical studies using autologous CD19 chimeric antigen receptor (CAR) T-cell therapy (auto-CAR-T) for the treatment of autoimmune diseases have demonstrated that deep B-cell depletion in the periphery and in the lymphoid tissue can lead to drug free disease remission. We have already demonstrated that AlloNK in combination with rituximab was able to drive deep B-cell depletion in the periphery and observed complete responses (CRs) in heavily pre-treated patients naïve to auto-CAR-T in our ongoing Phase 1/2 clinical trial in patients with relapsed or refractory B-cell non-Hodgkin lymphoma (B-NHL). We believe the preliminary results from our Phase 1/2 clinical trial evaluating AlloNK in combination with rituximab in patients with B-NHL provide for a readthrough to autoimmune disease because efficacy in both diseases appears to be accomplished with a shared mechanism of action involving B-cell depletion in the periphery and in the lymphoid tissues, followed by an immunological reset and B-cell reconstitution. We expect to report initial safety and translational data for AlloNK in combination with a mAb across multiple autoimmune indications from ongoing clinical trials, and disclosure of our lead autoimmune indication for further development, by the end of 2025, and to report initial clinical response data in the lead autoimmune indication from ongoing clinical trials with longer follow-up to inform registrational strategy in the first half of 2026.

Previous wording

We commenced our operations in 2019 and have devoted substantially all of our resources to date to organizing and staffing our company, business planning, raising capital, establishing and engaging in collaborations, conducting research and development, advancing and scaling up product candidate manufacturing, establishing cold chain delivery logistics, establishing and protecting our intellectual property portfolio and providing general and administrative support for these activities. From our inception through September 30, 2024, we have raised aggregate gross proceeds of $8.0 million from the issuance and sale of convertible promissory notes, $70.0 million from our Series A convertible preferred stock financings, $120.0 million from our Series B convertible preferred stock financing and $24.4 million from our SAFEs. Additionally, in July 2024, we closed on our initial public offering (IPO), in which we issued and sold 13,920,000 shares of common stock at a public offering price of $12.00 per share. We also sold an additional 1,000,000 shares of common stock upon the partial exercise of the underwriters’ purchase option. The aggregate net proceeds of the IPO, inclusive of the partial exercise of the underwriters’ purchase option and after deducting underwriting discounts, commissions, and offering expenses, was $162.3 million.

Current wording

We commenced our operations in 2019 and have devoted substantially all of our resources to date to organizing and staffing our company, business planning, raising capital, establishing and engaging in collaborations, conducting research and development, advancing and scaling up product candidate manufacturing, establishing cold chain delivery logistics, establishing and protecting our intellectual property portfolio and providing general and administrative support for these activities. From our inception through March 31, 2025, we have raised aggregate gross proceeds of $8.0 million from the issuance and sale of convertible promissory notes, $70.0 million from our Series A convertible preferred stock financings, $120.0 million from our Series B convertible preferred stock financing and $24.4 million from our SAFEs. Additionally, in July 2024, we closed on our IPO, in which we issued and sold 13,920,000 shares of common stock at a public offering price of $12.00 per share. We also sold an additional 1,000,000 shares of common stock upon the partial exercise of the underwriters’ purchase option. The aggregate net proceeds of the IPO, inclusive of the partial exercise of the underwriters’ purchase option and after deducting underwriting discounts, commissions, and offering expenses, was $162.3 million.

Previous wording

We have incurred a net loss of $49.3 million and $16.7 million during the nine months ended September 30, 2024 and 2023, respectively, and $28.7 million and $58.8 million during the years ended December 31, 2023 and 2022, respectively. As of September 30, 2024, we had an accumulated deficit of $230.6 million, cash, cash equivalents and investments of $199.6 million. We expect to continue to incur significant losses for the foreseeable future as we advance our current and future product candidates through preclinical and clinical development, continue to build our operations and transition to operating as a public company. Accordingly, until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our cash needs through public or private equity or debt financings or other capital sources, which may include our existing and any future strategic collaborations and other strategic arrangements with third parties. However, we may not be able to raise additional funds or enter into such other arrangements when needed or on favorable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaboration or licensing arrangements with third parties or other strategic transactions, we may have to relinquish rights to our intellectual property, future revenue streams, research programs, or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional capital or enter into such arrangements when needed, we could be forced to delay, limit, reduce or terminate our research and development programs or future commercialization efforts, or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.

Current wording

We have incurred a net loss of $20.3 million and $14.0 million during the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, we had an accumulated deficit of $267.0 million, cash, cash equivalents and investments of $166.0 million. We expect to continue to incur significant losses for the foreseeable future as we advance our current and future product candidates through preclinical and clinical development, continue to build our operations and transition to operating as a public company. Accordingly, until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our cash needs through public or private equity or debt financings or other capital sources, which may include our existing and any future strategic collaborations and other strategic arrangements with third parties. However, we may not be able to raise additional funds or enter into such other arrangements when needed or on favorable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaboration or licensing arrangements with third parties or other strategic transactions, we may have to relinquish rights to our intellectual property, future revenue streams, research programs, or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional capital or enter into such arrangements when needed, we could be forced to delay, limit, reduce or terminate our research and development programs or future commercialization efforts, or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.

Previous wording

License and development support-related revenues related to GC Cell’s development support activities under the AB-201 Agreement were zero during the three months ended September 30, 2024 and 2023, and $0.3 million and zero during the nine months ended September 30, 2024 and 2023, respectively.

Current wording

License and development support-related revenues related to GC Cell’s development support activities under the AB-201 Agreement were zero and $0.3 million during the three months ended March 31, 2025 and 2024, respectively.

Previous wording

General and administrative expenses consist of personnel-related expenses, including salaries and related benefits, travel and stock-based compensation expenses for personnel engaged in executive, finance and other administrative functions. Other significant costs include facilities-related costs, legal fees relating to intellectual property and corporate matters, professional fees for accounting and consulting services and insurance costs. We expect that our general and administrative expenses will increase substantially for the foreseeable future to support our continued research and development activities, pre-commercial preparation activities for our product candidates, and, if any product candidate receives marketing approval, commercialization activities. Following the completion of this offering, we also anticipate increased expenses related to audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums and investor relations costs associated with operating as a public company.

Current wording

General and administrative expenses consist of personnel-related expenses, including salaries and related benefits, travel and stock-based compensation expenses for personnel engaged in executive, finance and other administrative functions. Other significant costs include facilities-related costs, legal fees relating to intellectual property and corporate matters, professional fees for accounting and consulting services and insurance costs. Additionally, costs include audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums and investor relations costs associated with operating as a public company. We expect that our general and administrative expenses will increase substantially for the foreseeable future to support our continued research and development activities, pre-commercial preparation activities for our product candidates, and, if any product candidate receives marketing approval, commercialization activities.

Previous wording

Interest income consists of interest on our money market funds and short-term and long-term investments.

Current wording

Interest income consists of interest on our money market funds and investments.

Previous wording

In connection with the closing of the IPO, the outstanding SAFEs converted into 2,391,418 shares of common stock.

Current wording

In connection with the closing of the IPO, the outstanding SAFEs converted into 2,391,418 shares of our common stock.

Previous wording

Other income (expense), net consists primarily of realized gains and losses on short-term investments.

Current wording

Other income, net consists primarily of realized gains and losses on investments.

Previous wording

License and Development Support Revenue. License and development support revenues were $0.3 million for the nine months ended September 30, 2024, compared to zero for the nine months ended September 30, 2023. Revenues were related to development support activities under the AB-201 Agreement.

Current wording

License and Development Support Revenue. License and development support revenues were zero for the three months ended March 31, 2025, compared to $0.3 million for the three months ended March 31, 2024. Revenues were related to development support activities under the AB-201 Agreement with GC Cell.

Previous wording

Research and development expenses were $13.5 million for the three months ended September 30, 2024, compared to $13.1 million for the three months ended September 30, 2023. The increase of $0.5 million was primarily due to a $0.4 million increase in internal research and development expense, and a $0.1 million increase in external research and development expense. The $0.4 million increase in internal research and development expense is primarily due to a $0.5 million increase in personnel-related expenses supporting our additional headcount as we expanded the number of research and development employees to support our programs, inclusive of an increase of $0.1 million of non-cash stock-based compensation expense, offset by a $0.1 million decrease in other operating costs. The $0.1 million increase in external research and development expense is primarily due to increases of $1.5 million of AB-101 costs related to product candidate development and clinical trials as we progressed towards the end of our clinical trial for the B-NHL program and commenced our clinical trial on the AlloNK for SLE/LN program, offset by decreases of $0.2 million in other program costs and $1.2 million in Merck Collaboration Agreement costs due to the termination of the agreement.

Current wording

Research and development expenses were $17.1 million for the three months ended March 31, 2025, compared to $11.2 million for the three months ended March 31, 2024. The increase of $5.9 million was primarily due to a $4.2 million increase in external research and development expense, and a $1.7 million increase in internal research and development expense. The $4.2 million increase in external research and development expense is primarily due to a $4.2 million increase in AB-101 costs related to product candidate development and clinical trials as we progressed towards the end of our Phase 1/2 clinical trial for the B-NHL program and commencement of our clinical trial on the AlloNK for SLE/LN program. The $1.7 million increase in internal research and development expense is primarily due to a $1.5 million increase in personnel-related expenses due to increased headcount, inclusive of an increase of $0.2 million of non-cash stock-based compensation expense, in addition to a $0.2 million increase in other operating costs.

Previous wording

General and Administrative Expenses. General and administrative expenses were $4.8 million for the three months ended September 30, 2024, compared to $2.8 million for the three months ended September 30, 2023. The increase of $2.0 million for the three months ended September 30, 2024, was primarily comprised of a $1.2 million increase in personnel-related costs including a $0.8 increase in personnel operating costs and a $0.4 million increase in non-cash stock-based compensation, in addition to a $0.7 million increase in operational costs and a $0.1 million increase in legal costs.

Current wording

General and Administrative Expenses. General and administrative expenses were $5.1 million for the three months ended March 31, 2025, compared to $3.6 million for the three months ended March 31, 2024. The increase of $1.5 million was primarily comprised of a $1.2 million increase in personnel-related costs, including a $0.7 million increase in administrative personnel expenses and a $0.5 increase in non-cash stock-based compensation, in addition to a $0.3 million increase in other operational and legal costs.

Previous wording

Other Income (Expense), Net. Other income was $0.9 million for the three months ended September 30, 2024, compared to other income of $0.5 million for the three months ended September 30, 2023. The increase of $0.4 million was primarily due to a $1.4 million increase in dividend and interest income due to more favorable rates of return during 2024 and higher investment balances, partially offset by a $1.0 million change in fair value of SAFEs, which we entered into in late 2023.

Current wording

Other Income, Net. Other income was $1.9 million for the three months ended March 31, 2025, compared to other income of $0.5 million for the three months ended March 31, 2024. The increase of $1.3 million was primarily due to a $1.2 million increase in dividend and interest income due to higher investment balances in 2025. Additionally there was a $0.3 million change in fair value of SAFEs in 2024 that did not occur in 2025, contributing to a $0.3 million increase. These increases were partially offset by a $0.2 million decrease in other income.

Previous wording

Unrealized Gain (Loss) on Investments. Unrealized gain on investments was $0.2 million for the three months ended September 30, 2024, compared to an unrealized gain of $0.1 million for the three months ended September 30, 2023. The increase of $0.1 million was primarily due to the change in fair value of available-for-sale securities purchased subsequent to September 30, 2023.

Current wording

Unrealized Gain (Loss) on Investments. Unrealized gain on investments was $0.1 million for the three months ended March 31, 2025, compared to an unrealized loss of $0.1 million for the three months ended March 31, 2024. The increase between periods of $0.2 million was primarily due to the change in fair value of investments.

Previous wording

We have incurred net losses and negative cash flows from operations since our inception and expect to continue to incur significant and increasing operating losses for the foreseeable future. We have never generated any revenue from product sales and do not expect to generate any revenues from product sales unless and until we successfully complete development of and obtain regulatory approval for our product candidates, which will not be for several years, if ever. In addition, if we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. From our inception through September 30, 2024, we have raised aggregate gross proceeds of $401.4 million to fund our operations, comprised primarily from proceeds received from the IPO, including proceeds from the underwriters partial exercise of their purchase option, our issuance of convertible promissory notes, SAFEs and private placements of our convertible preferred stock. In February 2021, we received a $30.0 million up-front payment from Merck for our two target programs. In addition, as of September 30, 2024, we have received $9.9 million related to reimbursable research services from Merck. As of September 30, 2024, we had cash, cash equivalents and investments of $199.6 million, and an accumulated deficit of $230.6 million. Based on our current operating plans, we expect our existing cash, cash equivalents and investments will be sufficient to fund our planned operating expenses and capital expenditure requirements at least through the end of 2026. Our total future capital requirements will depend on many factors and is subject to the risks and uncertainties set forth in the section titled “Risk Factors.”

Current wording

We have incurred net losses and negative cash flows from operations since our inception and expect to continue to incur significant and increasing operating losses for the foreseeable future. We have never generated any revenue from product sales and do not expect to generate any revenues from product sales unless and until we successfully complete development of and obtain regulatory approval for our product candidates, which will not be for several years, if ever. In addition, if we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. From our inception through March 31, 2025, we have raised aggregate gross proceeds of $401.7 million to fund our operations, comprised primarily from proceeds received from the IPO, including proceeds from the underwriters’ partial exercise of their overallotment option, our issuance of convertible promissory notes, SAFEs and private placements of our convertible preferred stock. In February 2021, we received a $30.0 million up-front payment from Merck for our two target programs. In addition, as of March 31, 2025, we have received $9.9 million related to reimbursable research services from Merck. As of March 31, 2025, we had cash, cash equivalents and investments of $166.0 million, and an accumulated deficit of $267.0 million. Based on our current operating plans, we expect our existing cash, cash equivalents and investments will be sufficient to fund our planned operating expenses and capital expenditure requirements into the second quarter of 2027. Our total future capital requirements will depend on many factors and is subject to the risks and uncertainties set forth in the section titled “Risk Factors.”

Previous wording

We expect our expenses and capital requirements to increase significantly in connection with our ongoing activities, particularly as we advance our lead product candidates and other development programs, in addition to the costs associated with operating as a public company. Accordingly, beyond the net proceeds raised in the IPO (including the partial exercise of the underwriters’ option to purchase additional shares of common stock), we will continue to require substantial additional funding to support our continuing operations.

Current wording

We expect our expenses and capital requirements to increase significantly in connection with our ongoing activities, particularly as we advance our lead product candidates and other development programs, in addition to the costs associated with operating as a public company. Accordingly, beyond the net proceeds raised in the IPO (including the partial exercise of the underwriters’ overallotment option), we will continue to require substantial additional funding to support our continuing operations.

Previous wording

the initiation, type, number, scope, results, costs and timing of, our ongoing and planned clinical trials of AlloNK and preclinical studies and initiation of clinical trials for future product candidates, including feedback received from regulatory authorities;

Current wording

the initiation, type, number, scope, results, costs and timing of, our ongoing and planned clinical trials of AlloNK, preclinical studies, and initiation of clinical trials for future product candidates, including feedback received from regulatory authorities;

Previous wording

the potential expansion of our current development programs to seek new indications;

Current wording

the potential expansion of our current development programs to seek new indications or other monoclonal antibodies;

Previous wording

the costs associated with hiring additional personnel and consultants as our business grows, including additional executive officers and clinical development personnel;

Current wording

the costs associated with hiring additional personnel and consultants as our business grows, including additional executive officers and clinical development, regulatory and commercial personnel;

Previous wording

patients’ willingness to pay out-of-pocket for any approved products in the absence of coverage and/or adequate reimbursement from third-party payors; and

Current wording

patients’ willingness to pay out-of-pocket for any approved products in the absence of coverage and/or adequate reimbursement from third-party payors;

Previous wording

costs associated with any products or technologies that we may in-license or acquire.

Current wording

costs associated with any products or technologies that we may in-license or acquire; and

Previous wording

The following table sets forth a summary of the net cash flow activity for the nine months ended September 30, 2023, and 2024 (in thousands):

Current wording

The following table sets forth a summary of the net cash flow activity for the three months ended March 31, 2025, and 2024 (in thousands):

Previous wording

Net cash used in operating activities for the nine months ended September 30, 2024, was $40.4 million, consisting primarily of our net loss incurred during the period of $49.3 million, offset by $8.9 million of non-cash charges. Non-cash charges consisted of $4.8 million in stock-based compensation expense, $3.6 million in change in fair value of SAFEs, and $1.8 million in depreciation and amortization expense, offset by $1.3 million of accretion of discounts on investments. Changes in operating assets and liabilities included a $1.1 million decrease in receivables, a $0.6 million increase in accounts payable, a $0.3 million increase in accrued expenses, and a $0.1 million change in other net balance sheet assets and liabilities, partially offset by a $2.1 million increase in prepaid expense and other current assets.

Current wording

Net cash used in operating activities for the three months ended March 31, 2025, was $19.8 million, consisting primarily of our net loss incurred during the period of $20.3 million, partially offset by $2.0 million of non-cash charges. Non-cash charges consisted of $2.1 million in stock-based compensation expense, $0.7 million of accretion of discounts on investments, and $0.6 million in depreciation and amortization expense. Changes in operating assets and liabilities included a $0.9 million decrease in accrued expenses, a $0.8 million increase in prepaid expense and other current assets, and a $0.2 million change in other net balance sheet assets and liabilities

Previous wording

Net cash used in operating activities for the nine months ended September 30, 2023, was $36.8 million, consisting primarily of our net loss incurred during the period of $16.7 million and $27.2 million of a net decrease in operating assets and liabilities, partially offset by $7.2 million of net non-cash charges. Non-cash charges consisted primarily of $5.7 million in stock-based compensation expense and $1.7 million in depreciation and amortization expense, offset by $0.2 million of accretion of discounts on short-term investments. The net change in operating assets and liabilities primarily related to a $25.2 million decrease in deferred revenue, a $3.0 million increase in receivables, a $1.1 million decrease in accrued expenses, partially offset by a $1.5 million increase in accounts payable, a $0.3 million decrease in prepaid expenses and other current assets, and a $0.3 million change in other net balance sheet assets and liabilities.

Current wording

Net cash used in operating activities for the three months ended March 31, 2024, was $15.1 million, consisting primarily of our net loss incurred during the period of $14.0 million and $3.0 million of a net decrease in operating assets and liabilities, partially offset by $1.9 million of net non-cash charges. Non-cash charges consisted primarily of $1.4 million in stock-based compensation expense, $0.6 million in depreciation and amortization expense and $0.3 million in change in fair value of SAFEs, offset by $0.4 million of accretion of discounts on investments. The net change in operating assets and liabilities primarily related to a $3.0 million decrease in accrued expenses and a $1.0 million decrease in prepaid expense and other current assets, offset by a $0.9 million decrease in accounts payable and a $0.1 million decrease in other net balance sheet liabilities.

Previous wording

Net cash used in investing activities for the nine months ended September 30, 2024, was $119.5 million related to $161.3 million of purchases of investments and $0.6 million of purchases of property and equipment, partially offset by $42.4 million in maturities of short-term investments.

Current wording

Net cash provided by investing activities for the three months ended March 31, 2025, was $10.0 million related to $29.0 million in maturities of investments, partially offset by $18.5 million in purchases of investments and $0.5 million in purchases of property and equipment.

Previous wording

Net cash used in investing activities for the nine months ended September 30, 2023, was $23.3 million related to $34.7 million of purchases of short-term investments and $2.6 million of purchases of property and equipment, partially offset by $14.0 million in maturities of short-term investments.

Current wording

Net cash provided by investing activities for the three months ended March 31, 2024, was $9.8 million related to $16.0 million in maturities of investments, partially offset by $6.2 million of purchases of investments.

Previous wording

We lease certain office space in San Diego, California, under a non-cancelable operating lease, with a term through December 2025 (the Executive Drive Lease). The Executive Drive Lease commenced on December 23, 2019, with a six-year initial term and includes aggregate monthly payments to the lessor of approximately $2.8 million. The Executive Drive Lease also provides for rent abatements and scheduled increases in base rent. In connection with the lease, we made a one-time cash security deposit in the amount of $0.4 million, of which $0.2 million was refunded in October 2021 and the remaining $0.2 million is refundable at the end of the lease term and is included in long-term assets in the balance sheets. The Executive Drive Lease includes a renewal option, which includes an option to renew for five additional years. We will not exercise the option and, as such, is not reflected as part of the right of use asset and associated lease liabilities.

Current wording

We lease certain office space in San Diego, California, under a non-cancelable operating lease, with a term through December 2025 (the Executive Drive Lease). The Executive Drive Lease commenced on December 23, 2019, with a six-year initial term and includes aggregate payments to the lessor of approximately $2.8 million. The Executive Drive Lease also provides for rent abatements and scheduled increases in base rent. In connection with the lease, we made a one-time cash security deposit in the amount of $0.4 million, of which $0.2 million was refunded in October 2021 and the remaining $0.2 million is refundable at the end of the lease term and is included in long-term assets in the balance sheets. The Executive Drive Lease includes a renewal option, which includes an option to renew for five additional years. We will not exercise the option and, as such, is not reflected as part of the right of use asset and associated lease liabilities.

Previous wording

In June 2021, we entered into a lease agreement for corporate office and laboratory space in San Diego, California (the Morehouse Lease), which represented a portion of a new facility that was under construction. The Morehouse Lease includes multiple, successive commencement dates. The office and laboratory space commenced in the second quarter of 2022 and the third quarter of 2022 for the cGMP manufacturing center. The Morehouse Lease has an initial term of 88 months and includes aggregate monthly payments to the lessor of approximately $23.2 million with a rent escalation clause, and a tenant improvement allowance of $12.3 million. We are also required to maintain a cash security deposit in the form of an unconditional and irrevocable letter of credit of $0.3 million which must remain in place until the termination of the lease and is considered a non-current asset as of September 30, 2024. These obligations are further described in Note 12 to our audited financial statements and Note 11 to our unaudited condensed financial statements appearing elsewhere in this this Quarterly Report.

Current wording

In June 2021, we entered into a lease agreement for corporate office and laboratory space in San Diego, California (the Morehouse Lease), which represented a portion of a new facility that was under construction. The Morehouse Lease includes multiple, successive commencement dates. The office and laboratory space commenced in the second quarter of 2022 and the third quarter of 2022 for the cGMP manufacturing center. The Morehouse Lease has an initial term of 88 months and includes aggregate payments to the lessor of approximately $23.2 million with a rent escalation clause, and a tenant improvement allowance of $12.3 million. We are also required to maintain a cash security deposit in the form of an unconditional and irrevocable letter of credit of $0.2 million which must remain in place until the termination of the lease and is considered a non-current asset as of March 31, 2025. These obligations are further described in Note 11 to our audited financial statements appearing in the Annual Report and Note 10 to our unaudited condensed financial statements appearing elsewhere in this Quarterly Report.

Previous wording

In August 2022, we entered into a lease agreement to use designated laboratory and vivarium space in San Diego, California (the Explora Lease). The Explora Lease is accounted for as an operating lease and commenced in August 2022. The Explora Lease has an initial term of 36 months and includes aggregate monthly payments to the lessor of approximately $0.8 million with a rent escalation clause.

Current wording

In August 2022, we entered into a lease agreement to use designated laboratory and vivarium space in San Diego, California (the Explora Lease). The Explora Lease is accounted for as an operating lease and commenced in August 2022. The Explora Lease has an initial term of 36 months and includes aggregate payments to the lessor of approximately $0.8 million with a rent escalation clause.

Previous wording

As of September 30, 2024, we have future remaining operating lease payments of $17.9 million relating to leases we have recognized in the condensed balance sheets, of which $1.0 million is payable before December 31, 2024.

Current wording

As of March 31, 2025, we have future remaining operating lease payments of $16.5 million relating to leases we have recognized in the condensed balance sheets, of which $3.1 million is payable before December 31, 2025.

Previous wording

Under our collaboration agreements, we have milestone payment obligations that are contingent upon the achievement of specified development, regulatory and commercial sales milestones and are required to make certain royalty payments in connection with the sale of products developed under the agreement (see Note 8 to our financial statements included elsewhere in this Quarterly Report). As of September 30, 2024, we are unable to estimate the timing or likelihood of achieving the milestones or making future product sales and, therefore, any related payments are not included in the table above.

Current wording

Under our collaboration agreements, we have milestone payment obligations that are contingent upon the achievement of specified development, regulatory and commercial sales milestones and are required to make certain royalty payments in connection with the sale of products developed under the agreement (see Note 7 to our unaudited condensed financial statements included elsewhere in this Quarterly Report). As of March 31, 2025, we are unable to estimate the timing or likelihood of achieving the milestones or making future product sales.

Previous wording

We enter into contracts in the normal course of business for contract research services, contract manufacturing services, professional services and other services and products for operating purposes. These contracts generally provide for termination after a notice period, and, therefore, are cancelable contracts and not included in the table above.

Current wording

We enter into contracts in the normal course of business for contract research services, contract manufacturing services, professional services and other services and products for operating purposes. These contracts generally provide for termination after a notice period, and, therefore, are cancelable contracts.

Previous wording

Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). The preparation of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, expenses, and the disclosure of our contingent liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are 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 under different assumptions or conditions.

Current wording

Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). The preparation of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, expenses, and the disclosure of our contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are 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 under different assumptions or conditions.

Previous wording

There have been no significant changes to our critical accounting estimates from those described in Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Significant Estimates and Judgments and our audited financial statements as of and for the year ended December 31, 2023 as included in the Company’s prospectus dated July 18, 2024 related to its IPO filed pursuant to Rule 424(b)(4) under the Securities Act of 1933.

Current wording

There have been no significant changes to our critical accounting estimates from those described in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Significant Estimates and Judgments and our audited financial statements as of and for the year ended December 31, 2024, as included in the Annual Report.

Previous wording

As an emerging growth company under the JOBS Act, we can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period for complying with new or revised accounting standards and as a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates. However, we may elect to early adopt any new or revised accounting standards whenever such early adoption is permitted for non-public companies. We may take advantage of these exemptions up until the time that we are no longer an emerging growth company.

Current wording

We are an emerging growth company under the Jumpstart Our Business Startups Act (JOBS Act). Under the JOBS Act, we can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period for complying with new or revised accounting standards and as a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates. However, we may elect to early adopt any new or revised accounting standards whenever such early adoption is permitted for non-public companies. We may take advantage of these exemptions up until the time that we are no longer an emerging growth company.

Previous wording

We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of the consummation of this offering, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year, or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

Current wording

We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of our IPO, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange

Previous wording

We are also a smaller reporting company as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

Current wording

We are also a smaller reporting company as defined by Rule 12b-2 of the Exchange Act because both the market value of our stock held by non-affiliates is less than $700 million and our annual revenue is less than $100.0 million during the most recently completed fiscal year. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.