Q32 Bio Inc.

Previous wording

Across all clinical trials, bempikibart has been dosed in 130 patients to-date and has demonstrated a favorable safety and tolerability profile, with no Grade 3 or higher related adverse events. We plan to enroll approximately 20 evaluable severe or very severe AA patients through 36 weeks of treatment in a Part B expansion of the SIGNAL-AA Phase 2a clinical trial and report topline data from SIGNAL-AA Part B in the first half of 2026.

Current wording

Across all clinical trials, bempikibart has been dosed in 145 patients to-date and has demonstrated a favorable safety and tolerability profile, with no Grade 3 or higher related adverse events. We plan to enroll approximately 20 evaluable severe or very severe AA patients through 36 weeks of treatment in a Part B expansion of the SIGNAL-AA Phase 2a clinical trial and report topline data from SIGNAL-AA Part B in the first half of 2026.

Previous wording

In February 2025, we announced a corporate restructuring to focus on the advancement of bempikibart for the treatment of patients with AA. As part of the restructuring, we discontinued the Phase 2 renal basket clinical trial of ADX-097 and are evaluating strategic options for our tissue-targeted complement inhibitor platform, inclusive of ADX-097 and early-stage assets, to prioritize the clinical development of bempikibart (the “Restructuring Plan”). The Restructuring Plan included a reduction in force, which we expect to substantially complete by the end of the second quarter of 2025. As part of this Restructuring Plan, we incurred severance and severance-related charges of approximately $0.9 million. We may also incur other charges or cash expenditures not currently contemplated or that cannot be currently estimated due to events that may occur as a result of, or be associated with, the Restructuring Plan.

Current wording

In February 2025, we announced a corporate restructuring to focus on the advancement of bempikibart for the treatment of patients with AA. As part of the restructuring, we discontinued the Phase 2 renal basket clinical trial of ADX-097 and are evaluating strategic options for our tissue-targeted complement inhibitor platform, inclusive of ADX-097 and early-stage assets, to prioritize the clinical development of bempikibart (the “Restructuring Plan”). The Restructuring Plan included a reduction in force, which was substantially completed as of June 30, 2025. As part of this Restructuring Plan, we incurred severance and severance-related charges of approximately $0.9 million.

Previous wording

As of March 31, 2025, we had cash and cash equivalents of $65.5 million. We expect that our cash and cash equivalents will be sufficient to enable us to fund our operating expenses and capital expenditure requirements to the second half of 2026. This estimate is based on assumptions that may prove to be wrong, and we could use our capital resources sooner than currently anticipated.

Current wording

As of June 30, 2025, we had cash and cash equivalents of $54.8 million. We expect that our cash and cash equivalents will be sufficient to enable us to fund our operating expenses and capital expenditure requirements into 2027. This estimate is based on assumptions that may prove to be wrong, and we could use our capital resources sooner than currently anticipated.

Previous wording

Upon closing of the Merger, Legacy Q32 converted the outstanding Convertible Notes plus accrued interest into shares of common stock at 90% of the purchase price of the mandatory conversion event. As the Convertible Notes are recorded at fair value, a noncash gain of $15.9 million on the change in fair value prior to the conversion of convertible notes is reflected in the unaudited condensed consolidated statement of operation for the three months ended March 31, 2024.

Current wording

Upon closing of the Merger, Legacy Q32 converted the outstanding Convertible Notes plus accrued interest into shares of common stock at 90% of the purchase price of the mandatory conversion event. As the Convertible Notes are recorded at fair value, a noncash gain of $15.9 million on the change in fair value prior to the conversion of convertible notes is reflected in the unaudited condensed consolidated statement of operation for the six months ended June 30, 2024.

Previous wording

Other income (expense), net was $1.2 million for the three months ended March 31, 2025, compared to $0.2 million for the three months ended March 31, 2024. Other income (expense), net for the three months ended March 31, 2025 includes a gain recorded for the change in fair value of the CVR liability of $1.0 million, as well as interest income of $0.7 million. These increases are partially offset by an other-than-temporary impairment charge of approximately $0.1 million we recorded because it was determined that the fair value of our equity investment in OXB (US) LLC was less than its carrying value and interest expense of $0.3 million on our venture debt. The increase in other income (expense), net is due to the change in fair value of the CVR liability that was not present in the prior year, as well as a higher average cash balance resulting in higher interest income for the three months ended March 31, 2025.

Current wording

Other income (expense), net was ($0.3) million for the three months ended June 30, 2025, compared to $2.4 million for the three months ended June 30, 2024. Other income (expense), net for the three months ended June 30, 2025 includes a loss recorded for the change in fair value of the CVR liability of $0.6 million as well as interest expense of $0.3 million on our venture debt. These decreases are partially offset by interest income of $0.6 million. The decrease in other income (expense), net is due to a gain on the change in fair value of the CVR liability of $1.4 million booked in the prior year as well as a lower average cash balance resulting in lower interest income for the three months ended June 30, 2025.

Previous wording

Prior to May 22, 2024, we accounted for our investment in OXB (US) LLC using the equity method of accounting and recorded our share of gains or losses from OXB (US) LLC on a quarterly basis. For the three months ended March 31, 2024, we recorded a loss from equity method investment of $0.2 million, representing our share of OXB (US) LLC’s net loss. See Notes 2 and 5 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information regarding the equity method of accounting.

Current wording

Prior to May 22, 2024, we accounted for our investment in OXB (US) LLC using the equity method of accounting and recorded our share of gains or losses from OXB (US) LLC on a quarterly basis. For the three months ended June 30, 2024, we recorded a loss from equity method investment of $1.4 million, representing our share of OXB (US) LLC’s net loss. See Notes 2 and 5 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information regarding the equity method of accounting.

Previous wording

Research and development expenses were $7.1 million for the three months ended March 31, 2025, compared to $9.8 million for the three months ended March 31, 2024. The decrease of $2.7 million was primarily due to a decrease of $2.5 million in clinical spend related to our bempikibart program due to higher costs in the prior year as we were advancing clinical trials for AA and AD, a decrease in direct research and development expenses related to ADX-097 of $0.5 million as we discontinued the Phase 2 renal basket clinical trial of ADX-097 in the first quarter of 2025 and a decrease in toxicology costs of $0.2 million as compared to the prior year.

Current wording

Research and development expenses were $12.3 million for the six months ended June 30, 2025, compared to $23.2 million for the six months ended June 30, 2024. Bempikibart program expenses decreased by $8.7 million due to lower clinical costs and lower costs related to manufacturing clinical trial materials, as well as higher costs in the prior year as we were advancing clinical trials for AA and AD. ADX-097 program expenses decreased by $1.1 million as we discontinued the Phase 2 renal basket clinical trial of ADX-097 in the first quarter of 2025.

Previous wording

The increase in personnel-related and consultant costs was primarily related to severance expense associated with the restructuring in February 2025. Personnel-related and consultant costs for the three months ended March 31, 2025 and 2024 included stock-based compensation expense of $0.3 million and $0.2 million, respectively.

Current wording

The decrease in personnel-related and consultant costs was primarily related to lower headcount associated with the Restructuring Plan in February 2025. Personnel-related and consultant costs for the six months ended June 30, 2025 and 2024 included stock-based compensation expense of $0.5 million in each period.

Previous wording

Upon closing of the Merger in March 2024, Legacy Q32 converted its outstanding Convertible Notes plus accrued interest into shares of common stock at 90% of the purchase price of the mandatory conversion event. As the Convertible Notes are recorded at fair value, a gain of $15.9 million on the change in fair value prior to the conversion of convertible notes is reflected in the unaudited condensed consolidated statement of operation for the three months ended March 31, 2024.

Current wording

Upon closing of the Merger in March 2024, Legacy Q32 converted its outstanding Convertible Notes plus accrued interest into shares of common stock at 90% of the purchase price of the mandatory conversion event. As the Convertible Notes are recorded at fair value, a gain of $15.9 million on the change in fair value prior to the conversion of convertible notes is reflected in the unaudited condensed consolidated statement of operation for the six months ended June 30, 2024.

Previous wording

Since inception, we have incurred significant operating losses and negative cash flows from operations. We have not yet commercialized any of our product candidates, which are in various phases of preclinical and clinical development, and we do not expect to generate revenue from sales of any products for several years, if at all. To date, we have funded our operations primarily from proceeds from the sales of our convertible preferred stock, convertible notes, venture debt, and proceeds from the Horizon Collaboration Agreement and from the Merger with Homology and accompanying Pre-Closing Financing. From inception through March 31, 2025, we raised $111.4 million in aggregate cash proceeds, net of issuance costs, from the sales of our Series A convertible preferred stock, Series A-1 convertible preferred stock and Series B convertible preferred stock and received payments of $55.0 million in connection with the Horizon Collaboration Agreement. We also received $30.0 million from the sales of convertible notes, $12.5 million from our venture debt, $61.3 million, net of issuance costs, in connection with the Merger with Homology and $42.0 million pursuant to the Pre-Closing Financing. As of March 31, 2025, we had cash and cash equivalents of $65.5 million.

Current wording

Since inception, we have incurred significant operating losses and negative cash flows from operations. We have not yet commercialized any of our product candidates, which are in various phases of preclinical and clinical development, and we do not expect to generate revenue from sales of any products for several years, if at all. To date, we have funded our operations primarily from proceeds from the sales of our convertible preferred stock, convertible notes, venture debt, and proceeds from the Horizon Collaboration Agreement and from the Merger with Homology and accompanying Pre-Closing Financing. From inception through June 30, 2025, we raised $111.4 million in aggregate cash proceeds, net of issuance costs, from the sales of our Series A convertible preferred stock, Series A-1 convertible preferred stock and Series B convertible preferred stock and received payments of $55.0 million in connection with the Horizon Collaboration Agreement. We also received $30.0 million from the sales of convertible notes, $12.5 million from our venture debt, $61.3 million, net of issuance costs, in connection with the Merger with Homology and $42.0 million pursuant to the Pre-Closing Financing. As of June 30, 2025, we had cash and cash equivalents of $54.8 million.

Previous wording

We have incurred significant operating losses since inception and, as of March 31, 2025, had an accumulated deficit of $245.8 million. We expect negative cash flows from operations and net losses for the foreseeable future as we continue to invest significantly in research and development of our product candidates and platform. We have not yet commercialized any product and do not expect to generate revenue from sales of any products for several years, if at all.

Current wording

We have incurred significant operating losses since inception and, as of June 30, 2025, had an accumulated deficit of $255.3 million. We expect negative cash flows from operations and net losses for the foreseeable future as we continue to invest significantly in research and development of our product candidates and platform. We have not yet commercialized any product and do not expect to generate revenue from sales of any products for several years, if at all.

Previous wording

As of March 31, 2025, we had cash and cash equivalents of $65.5 million. We expect that our cash and cash equivalents as of March 31, 2025, will be sufficient to fund our operations to the second half of 2026. Management based its projections of operating capital requirements on our current operating plan, which includes several assumptions that may prove to be incorrect, and we may use all of our available capital resources sooner than management expects. We expect to seek to raise additional capital through private or public equity or debt financings, loans or other capital sources, which could include collaborations, partnerships or other marketing, distribution, licensing or other strategic arrangements with third parties, or from grants, and may be required to seek additional capital sooner than planned. However, there can be no assurances that we will be able to raise additional capital from these sources on favorable terms, or at all.

Current wording

As of June 30, 2025, we had cash and cash equivalents of $54.8 million. We expect that our cash and cash equivalents as of June 30, 2025, will be sufficient to fund our operations into 2027. Management based its projections of operating capital requirements on our current operating plan, which includes several assumptions that may prove to be incorrect, and we may use all of our available capital resources sooner than management expects. We expect to seek to raise additional capital through private or public equity or debt financings, loans or other capital sources, which could include collaborations, partnerships or other marketing, distribution, licensing or other strategic arrangements with third parties, or from grants, and may be required to seek additional capital sooner than planned. However, there can be no assurances that we will be able to raise additional capital from these sources on favorable terms, or at all.

Previous wording

For the three months ended March 31, 2025, net cash used in operating activities was $12.5 million, which was primarily utilized for the funding of our operating expenses of $12.2 million as we incurred expenses associated with research and development activities including clinical trial activities associated with our bempikibart program. Non-cash expenses include stock-based compensation expense of $1.3 million, non-cash lease expenses of $0.2 million and depreciation expense of $0.1 million, partially offset by a gain of $1.0 million recognized on the change in fair value of the CVR liability. The change in net operating assets and liabilities was primarily attributable to a decrease in accrued expenses and other current liabilities of $2.2 million, an increase in other noncurrent assets of $0.3 million and a decrease in accounts payable of $0.3 million, partially offset by a decrease in prepaid expenses and other current assets of $0.8 million.

Current wording

For the six months ended June 30, 2025, net cash used in operating activities was $23.1 million, which was primarily utilized for the funding of our operating expenses of $21.4 million as we incurred expenses associated with research and development activities including clinical trial activities associated with our bempikibart program. Non-cash expenses include stock-based compensation expense of $2.6 million, non-cash lease expenses of $0.3 million and depreciation expense of $0.2 million, partially offset by a gain of $0.4 million recognized on the change in fair value of the CVR liability. The change in net operating assets and liabilities was primarily attributable to a decrease in accrued expenses and other current liabilities of $3.1 million, a decrease in accounts payable of $2.1 million, an increase in other noncurrent assets of $0.5 million and a decrease in our operating lease liability of $0.3 million, partially offset by a decrease in prepaid expenses and other current assets of $0.4 million.

Previous wording

For the three months ended March 31, 2024, net cash used in operating activities was $14.6 million, which was primarily utilized for the funding of our operating expenses of $14.8 million as we incurred expenses associated with research and development activities including clinical trial activities associated with our bempikibart and ADX-097 programs, adjusted for non-cash expenses of $15.0 million. Non-cash expenses include a gain of $15.9 million recognized on the change in fair value prior to the conversion of convertible notes pursuant to the Merger with Homology on March 25, 2024, stock-based compensation expense of $0.4 million, loss from our equity method investment of $0.2 million, non-cash lease expenses of $0.1 million and depreciation expense of $0.1 million. The change in net operating assets and liabilities was primary attributable to a decrease in accrued expenses and other current liabilities of $2.2 million and an increase in other noncurrent assets of $0.6 million, partially offset by an increase in accounts payable of $0.9 million and a decrease in prepaid expenses and other current assets of $1.3 million.

Current wording

For the six months ended June 30, 2024, net cash used in operating activities was $36.8 million, which was primarily utilized for the funding of our operating expenses of $32.8 million as we incurred expenses associated with research and development activities including clinical trial activities associated with our bempikibart and ADX-097 programs, adjusted for non-cash expenses of $13.5 million. Non-cash expenses include a gain of $15.9 million recognized on the change in fair value prior to the conversion of convertible notes pursuant to the Merger with Homology on March 25, 2024, a gain of $1.4 million recognized on the change in fair value of the CVR liability, stock-based compensation expense of $1.7 million, loss from our equity method investment of $1.6 million, non-cash lease expenses of $0.3 million, depreciation expense of $0.2 million and amortization of premium on short-term investments of $0.2 million. The change in net operating assets and liabilities was primary attributable to a decrease in accrued expenses and other current liabilities of $4.9 million, a decrease in accounts payable of $1.5 million, an increase in other noncurrent assets of $0.6 million and a decrease in our operating lease liability of $0.5 million, partially offset by a decrease in prepaid expenses and other current assets of $0.2 million.

Previous wording

For the three months ended March 31, 2024, net cash provided by investing activities consisted of maturities of short-term investments during the period since the Merger. There was no net cash used in or provided by investing activities for the three months ended March 31, 2025.

Current wording

For the six months ended June 30, 2024, net cash provided by investing activities consisted of maturities of short-term investments during the period since the Merger.

Previous wording

For the three months ended March 31, 2024, net cash provided by financing activities consisted of $53.2 million of cash acquired as part of the Merger, $42.0 million of proceeds from the issuance of common stock in the pre-closing financing and $7.0 million of proceeds from the borrowings under a new loan and security agreement, slightly offset by payments of $2.8 million of transaction costs related to the Merger. There was no net cash used in or provided by financing activities for the three months ended March 31, 2025.

Current wording

For the six months ended June 30, 2024, net cash provided by financing activities consisted of $53.2 million of cash acquired as part of the Merger, $42.0 million of proceeds from the issuance of common stock in the pre-closing financing and $7.0 million of proceeds from the borrowings under a new loan and security agreement, slightly offset by payments of $8.7 million of transaction costs related to the Merger.

Previous wording

We believe that, based on our current operating plan, our cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements to the second half of 2026. Management based its projections of operating capital requirements on our current operating plan, which includes several assumptions that may prove to be incorrect, and we may use all of our available capital resources sooner than we expect.

Current wording

We believe that, based on our current operating plan, our cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into 2027. Management based its projections of operating capital requirements on our current operating plan, which includes several assumptions that may prove to be incorrect, and we may use all of our available capital resources sooner than we expect.