10-Q
Q2--12-310001787400false0001787400us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-06-300001787400nktx:TwoThousandTwentyPerformanceIncentiveAndTwoThousandFifteenEquityIncentivePlanMember2023-06-300001787400us-gaap:RestrictedStockMember2023-06-300001787400us-gaap:LetterOfCreditMember2023-06-300001787400nktx:ResearchCollaborationAgreementMembernktx:DevelopmentAndRegulatoryApprovalMilestonesMember2023-04-012023-06-300001787400nktx:InitialLeaseAgreementAndAdditionalLeaseAgreementMember2023-03-310001787400us-gaap:CommercialPaperMember2022-12-310001787400us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2022-12-310001787400us-gaap:CommercialPaperMember2022-12-310001787400us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001787400us-gaap:ConstructionInProgressMember2023-06-300001787400srt:MaximumMembernktx:AgreementWithFinancialInstitutionMember2023-01-012023-06-300001787400srt:MinimumMembernktx:CorporateDebtSecuritiesOneMember2023-06-3000017874002021-07-012021-07-310001787400us-gaap:RetainedEarningsMember2022-03-310001787400srt:MinimumMembernktx:AgreementWithFinancialInstitutionMember2023-01-012023-06-300001787400us-gaap:CommonStockMember2021-12-310001787400us-gaap:LetterOfCreditMember2023-04-300001787400us-gaap:RetainedEarningsMember2022-12-310001787400nktx:CorporateOfficeAndLaboratorySpaceMember2018-05-012018-05-310001787400srt:MaximumMemberus-gaap:CommercialPaperMember2022-12-310001787400nktx:InitialLeaseAgreementMembernktx:CorporateOfficeAndLaboratorySpaceMember2018-05-012018-05-310001787400us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2023-06-300001787400us-gaap:FairValueInputsLevel2Memberus-gaap:CommercialPaperMember2022-12-310001787400nktx:SecondAmendmentOfAdditionalLeaseAgreementMember2022-08-012022-08-310001787400nktx:ResearchCollaborationAgreementMembernktx:NKCellProductsMember2021-05-052021-05-050001787400us-gaap:GeneralAndAdministrativeExpenseMember2023-04-012023-06-300001787400nktx:UsGovernmentCorporationsAndAgenciesSecuritiesOneMember2023-06-300001787400us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001787400nktx:ComputersAndSoftwareMember2022-12-310001787400us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-06-300001787400us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2023-06-300001787400us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-06-300001787400nktx:InitialLeaseAgreementMember2020-05-012020-05-310001787400us-gaap:FairValueInputsLevel2Member2023-06-300001787400nktx:ThirdAmendmentMember2021-01-012021-01-310001787400us-gaap:ConstructionInProgressMember2022-12-310001787400srt:MaximumMember2021-07-310001787400nktx:SpecifiedTaMembernktx:ResearchCollaborationAgreementMembernktx:DevelopmentAndRegulatoryApprovalMilestonesMember2023-01-012023-06-300001787400us-gaap:CommonStockMember2022-04-012022-06-300001787400us-gaap:RestrictedStockUnitsRSUMember2022-12-310001787400us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001787400nktx:CommonStockOptionsMember2022-01-012022-06-3000017874002021-12-310001787400srt:MinimumMembernktx:ResearchCollaborationAgreementMembernktx:NKCellProductsMember2021-05-052021-05-050001787400us-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-3100017874002023-04-012023-06-3000017874002023-03-3100017874002022-12-310001787400nktx:CorporateDebtSecuritiesOneMember2023-06-300001787400us-gaap:EmployeeStockMember2023-01-012023-06-300001787400us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001787400us-gaap:FairValueInputsLevel2Memberus-gaap:ShortTermInvestmentsMember2022-12-310001787400nktx:AgreementWithFinancialInstitutionMember2023-06-300001787400us-gaap:EmployeeStockMembernktx:AccruedAndOtherCurrentLiabilitiesMember2023-01-012023-06-300001787400us-gaap:FairValueInputsLevel2Memberus-gaap:CorporateDebtSecuritiesMember2022-12-310001787400srt:MaximumMemberus-gaap:IPOMember2023-05-172023-05-170001787400us-gaap:AdditionalPaidInCapitalMember2021-12-310001787400nktx:ResearchCollaborationAgreementMembernktx:DevelopmentAndRegulatoryApprovalMilestonesMember2023-06-300001787400us-gaap:AdditionalPaidInCapitalMember2022-06-3000017874002022-06-300001787400us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001787400nktx:TwoThousandTwentyPerformanceIncentivePlanMember2023-01-012023-06-3000017874002022-01-012022-06-300001787400us-gaap:CommercialPaperMember2023-06-300001787400us-gaap:FairValueInputsLevel2Memberus-gaap:CorporateDebtSecuritiesMember2023-06-300001787400nktx:TwoThousandTwentyPerformanceIncentiveAndTwoThousandFifteenEquityIncentivePlanMember2022-01-012022-12-310001787400nktx:ThirdAmendmentMember2023-01-012023-06-300001787400srt:MaximumMember2021-08-122021-08-120001787400us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-06-300001787400nktx:ResearchCollaborationAgreementMembernktx:DevelopmentAndRegulatoryApprovalMilestonesMember2022-04-012022-06-300001787400us-gaap:CorporateDebtSecuritiesMembersrt:MaximumMember2022-12-3100017874002023-08-070001787400srt:MaximumMemberus-gaap:CommercialPaperMember2023-06-300001787400us-gaap:GeneralAndAdministrativeExpenseMember2022-04-012022-06-300001787400us-gaap:CorporateDebtSecuritiesMember2022-12-310001787400nktx:TwoThousandTwentyPerformanceIncentiveAndTwoThousandFifteenEquityIncentivePlanMember2023-01-012023-06-300001787400us-gaap:RetainedEarningsMember2023-01-012023-03-310001787400us-gaap:CommonStockMember2023-03-310001787400nktx:InitialLeaseAgreementMembernktx:CorporateOfficeAndLaboratorySpaceMember2023-01-012023-06-300001787400nktx:ResearchCollaborationAgreementMembernktx:DevelopmentAndRegulatoryApprovalMilestonesMember2023-01-012023-06-300001787400us-gaap:CorporateDebtSecuritiesMembersrt:MaximumMember2023-06-300001787400us-gaap:AdditionalPaidInCapitalMember2023-03-310001787400us-gaap:RetainedEarningsMember2023-03-310001787400us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-06-300001787400srt:MinimumMembernktx:UsGovernmentCorporationsAndAgenciesSecuritiesOneMember2023-06-300001787400us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001787400nktx:InitialLeaseAgreementMembernktx:CorporateOfficeAndLaboratorySpaceMember2020-05-310001787400us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001787400us-gaap:FairValueInputsLevel1Member2023-06-300001787400nktx:TwoThousandTwentyPerformanceIncentiveAndTwoThousandFifteenEquityIncentivePlanMember2022-12-310001787400us-gaap:FairValueInputsLevel2Memberus-gaap:ShortTermInvestmentsMember2023-06-300001787400us-gaap:RetainedEarningsMember2022-04-012022-06-300001787400us-gaap:RetainedEarningsMember2021-12-310001787400us-gaap:RetainedEarningsMember2022-06-300001787400us-gaap:LeaseholdImprovementsMember2023-06-300001787400us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2022-12-310001787400us-gaap:AdditionalPaidInCapitalMember2022-03-310001787400us-gaap:CommercialPaperMember2023-06-300001787400us-gaap:CommonStockMember2023-01-012023-06-300001787400us-gaap:RestrictedStockUnitsRSUMember2023-06-300001787400nktx:ResearchEquipmentMember2023-06-300001787400us-gaap:ResearchAndDevelopmentExpenseMember2023-04-012023-06-300001787400us-gaap:FurnitureAndFixturesMember2022-12-310001787400nktx:CommonStockOptionsMember2023-01-012023-06-300001787400us-gaap:RetainedEarningsMember2022-01-012022-03-310001787400us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001787400us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300001787400us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300001787400us-gaap:ShortTermInvestmentsMember2023-01-012023-06-300001787400us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-06-300001787400us-gaap:LeaseholdImprovementsMember2022-12-310001787400us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2023-06-300001787400us-gaap:CommonStockMember2023-01-012023-03-310001787400srt:MaximumMemberus-gaap:IPOMember2021-09-022021-09-0200017874002023-01-012023-03-310001787400us-gaap:RetainedEarningsMember2023-06-300001787400us-gaap:FairValueInputsLevel1Member2022-12-310001787400nktx:ResearchEquipmentMember2022-12-310001787400us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001787400us-gaap:CommonStockMember2022-03-310001787400us-gaap:FairValueInputsLevel2Member2022-12-310001787400us-gaap:AdditionalPaidInCapitalMember2022-12-310001787400us-gaap:AdditionalPaidInCapitalMember2023-06-300001787400nktx:InitialLeaseAgreementMember2023-01-012023-06-300001787400us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300001787400us-gaap:CommonStockMember2023-06-300001787400nktx:TwoThousandTwentyPerformanceIncentivePlanMember2023-06-3000017874002021-07-310001787400us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-012023-06-3000017874002023-06-012023-06-300001787400us-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-06-300001787400us-gaap:RestrictedStockMember2022-12-310001787400us-gaap:ResearchAndDevelopmentExpenseMember2022-04-012022-06-300001787400us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMembersrt:MaximumMember2023-06-300001787400us-gaap:FairValueInputsLevel2Membernktx:LongTermInvestmentsMember2023-06-300001787400nktx:ResearchCollaborationAgreementMembernktx:DevelopmentAndRegulatoryApprovalMilestonesMember2022-01-012022-06-300001787400us-gaap:FurnitureAndFixturesMember2023-06-3000017874002023-01-012023-06-3000017874002022-04-012022-06-3000017874002022-01-012022-03-310001787400us-gaap:CorporateDebtSecuritiesMember2023-06-300001787400us-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-310001787400nktx:UnvestedCommonStockUponEarlyExerciseOfCommonStockOptionsMember2022-01-012022-06-300001787400us-gaap:RetainedEarningsMember2023-04-012023-06-300001787400us-gaap:FairValueInputsLevel2Memberus-gaap:CommercialPaperMember2023-06-300001787400nktx:InitialLeaseAgreementMember2020-05-310001787400us-gaap:CommonStockMember2022-06-3000017874002023-06-300001787400us-gaap:CommonStockMember2022-01-012022-03-310001787400us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001787400us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-06-300001787400us-gaap:CommonStockMember2022-12-310001787400nktx:InitialLeaseAgreementMember2021-10-012021-10-310001787400nktx:AgreementWithFinancialInstitutionMember2022-12-3100017874002022-03-310001787400us-gaap:CommonStockMember2023-04-012023-06-300001787400nktx:SecondAmendmentOfAdditionalLeaseAgreementMember2022-08-310001787400us-gaap:EmployeeStockMember2023-06-300001787400nktx:ComputersAndSoftwareMember2023-06-300001787400us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMembersrt:MaximumMember2022-12-31nktx:CrisprCas9iso4217:USDxbrli:sharesxbrli:purexbrli:sharesiso4217:USDnktx:Segment

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 10-Q

 

 

(Mark One)

 

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

 

For the quarterly period ended June 30, 2023

OR

 

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

 

For the transition period from to

Commission File Number: 001-39370

 

 

Nkarta, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

47-4515206

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

1150 Veterans Boulevard

South San Francisco, CA

94080

(Address of principal executive offices)

(Zip Code)

 

(925) 407-1049

(Registrant’s telephone number, including area code)

 

Not applicable

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

 

 

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

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

 

NKTX

 

 

The Nasdaq Stock Market LLC

(Nasdaq Global Select Market)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

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

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

As of August 7, 2023, the registrant had 49,058,234 shares of common stock, par value $0.0001 per share, outstanding.

 

 


Table of Contents

 

Page

PART I.

FINANCIAL INFORMATION

Item 1.

Financial Statements (unaudited):

1

Condensed Balance Sheets as of June 30, 2023 and December 31, 2022

1

Condensed Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2023 and 2022

2

Condensed Statements of Stockholders’ Equity for the three and six months ended June 30, 2023 and 2022

3

Condensed Statements of Cash Flows for the six months ended June 30, 2023 and 2022

5

Notes to Unaudited Condensed Financial Statements

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

16

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

24

Item 4.

Controls and Procedures

24

 

 

 

PART II.

OTHER INFORMATION

 

Item 1.

Legal Proceedings

25

Item 1A.

Risk Factors

25

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

72

Item 3.

Defaults Upon Senior Securities

72

Item 4.

Mine Safety Disclosures

72

Item 5.

Other Information

73

Item 6.

Exhibits

74

SIGNATURES

76

 

i


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS


 

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

 

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

 

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

 

ii


RISK FACTOR SUMMARY

 

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

 

We have a limited operating history and do not have any products approved for sale.
We have incurred significant losses since our inception and we expect to continue to incur significant losses for the foreseeable future.
We have never generated revenue from product sales and may never achieve or maintain profitability.
We will require additional capital, which, if available, may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our product candidates.
Our business depends upon the success of our CAR NK cell technology platform.
Utilizing CAR NK cells represents a novel approach to the treatment of cancer, and we must overcome significant challenges in order to develop, commercialize and manufacture our product candidates.
Clinical development involves a lengthy and expensive process with an uncertain outcome, and we may encounter substantial delays due to a variety of reasons outside our control.
Our business is highly dependent on the clinical success of our product candidates, and on the clinical success of NKX101 and NKX019 in particular, and we may fail to develop NKX101, NKX019 and/or our other product candidates successfully or be unable to obtain regulatory approval for them.
Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be delayed, made more difficult or rendered impossible by multiple factors outside our control.
Our preclinical pipeline programs may experience delays or may never advance to clinical trials, which would adversely affect our ability to obtain regulatory approvals or commercialize these programs on a timely basis or at all.
The results of preclinical studies and early-stage clinical trials may not be predictive of future results. Interim, “topline” and preliminary data from our clinical trials may differ materially from the final data. Initial success in any clinical trials may not be indicative of results obtained when these trials are completed or in later stage trials.
If any of our product candidates, or any competing product candidates, demonstrate relevant, serious adverse events, we may be required to halt or delay further clinical development.
Our business and the business or operations of our research partners and other third parties with whom we conduct business have been and could continue to be adversely affected by the effects of health epidemics, including the COVID-19 pandemic, in regions where we or third parties on which we rely have business operations.
We have entered into a research collaboration with CRISPR Therapeutics regarding certain product candidates, and we may enter into additional collaborations with third parties to develop or commercialize other product candidates. Our prospects with respect to those product candidates will depend in significant part on the success of those collaborations, and we may not realize the benefits of such collaborations.
If we fail to compete effectively with academic institutions and other biopharmaceutical companies that develop similar or alternatives to cellular immunotherapy product candidates, our business will be materially adversely affected.
Our manufacturing process is novel and complex, and we may encounter difficulties in production, or difficulties with internal manufacturing, which would delay or prevent our ability to provide a sufficient supply of our product candidates for clinical trials or our products for patients, if approved.
We rely on third parties to manufacture certain materials for use in the production of our product candidates, or may rely on third parties to manufacture certain of our product candidates in the future, which increases the risk that we will not have sufficient quantities of such materials or product candidates, or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.
We are reliant on a sole supplier for certain steps of our manufacturing process.

iii


Delays in commissioning and receiving regulatory approvals for our manufacturing facilities could delay our development plans and thereby limit our ability to develop our product candidates and generate revenues.
If our license agreement with National University of Singapore and St. Jude Children’s Research Hospital, Inc. is terminated, we could lose our rights to key components enabling our NK cell engineering platform.
If any patent protection we obtain is not sufficiently robust, our competitors could develop and commercialize products and technology similar or identical to ours.
If any of our product candidates are approved for marketing and commercialization and we have not developed or secured marketing, sales and distribution capabilities, either internally or from third parties, we will be unable to successfully commercialize such products and may not be able to generate product revenue.
Our product candidates, including NKX101 and NKX019, could be subject to regulatory limitations following approval, if and when such approval is granted.
The market price for our common stock may be volatile, which could contribute to the loss of all or part of your investment.
Concentration of ownership of our shares of common stock among our existing executive officers, directors and principal stockholders may prevent new investors from influencing significant corporate decisions.

 

 

 

 

 

 

iv


PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

NKARTA, INC.

CONDENSED BALANCE SHEETS

(Unaudited, in thousands)

 

 

 

June 30,
2023

 

 

December 31,
2022

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

29,117

 

 

$

37,494

 

Short-term investments

 

 

251,636

 

 

 

314,649

 

Prepaid expenses and other current assets

 

 

5,983

 

 

 

8,545

 

Total current assets

 

 

286,736

 

 

 

360,688

 

Long-term investments

 

 

18,728

 

 

 

 

Restricted cash

 

 

2,743

 

 

 

2,743

 

Property and equipment, net

 

 

76,094

 

 

 

61,908

 

Operating lease right-of-use assets

 

 

41,071

 

 

 

45,749

 

Other long-term assets

 

 

3,666

 

 

 

1,850

 

Total assets

 

$

429,038

 

 

$

472,938

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

3,010

 

 

$

1,761

 

Operating lease liabilities, current portion

 

 

6,050

 

 

 

4,249

 

Accrued and other current liabilities

 

 

17,553

 

 

 

16,036

 

Total current liabilities

 

 

26,613

 

 

 

22,046

 

Operating lease liabilities, net of current portion

 

 

84,447

 

 

 

78,685

 

Total liabilities

 

 

111,060

 

 

 

100,731

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

Common stock

 

 

5

 

 

 

5

 

Additional paid-in capital

 

 

700,609

 

 

 

690,814

 

Accumulated other comprehensive loss

 

 

(601

)

 

 

(679

)

Accumulated deficit

 

 

(382,035

)

 

 

(317,933

)

Total stockholders’ equity

 

 

317,978

 

 

 

372,207

 

Total liabilities and stockholders’ equity

 

$

429,038

 

 

$

472,938

 

 

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

1


NKARTA, INC.

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

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

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

25,122

 

 

$

21,049

 

 

$

51,257

 

 

$

40,617

 

General and administrative

 

 

11,736

 

 

 

6,563

 

 

 

19,914

 

 

 

13,093

 

Total operating expenses

 

 

36,858

 

 

 

27,612

 

 

 

71,171

 

 

 

53,710

 

Loss from operations

 

 

(36,858

)

 

 

(27,612

)

 

 

(71,171

)

 

 

(53,710

)

Other income, net:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

3,570

 

 

 

686

 

 

 

7,035

 

 

 

798

 

Other income, net

 

 

1

 

 

 

3

 

 

 

34

 

 

 

2

 

Total other income, net

 

 

3,571

 

 

 

689

 

 

 

7,069

 

 

 

800

 

Net loss

 

$

(33,287

)

 

$

(26,923

)

 

$

(64,102

)

 

$

(52,910

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized gain (loss) on investments

 

 

(427

)

 

 

(325

)

 

 

78

 

 

 

(781

)

Comprehensive loss

 

$

(33,714

)

 

$

(27,248

)

 

$

(64,024

)

 

$

(53,691

)

Net loss per share, basic and diluted

 

$

(0.68

)

 

$

(0.61

)

 

$

(1.31

)

 

$

(1.38

)

Weighted average shares used to compute net loss
   per share, basic and diluted

 

 

48,970,391

 

 

 

43,841,392

 

 

 

48,946,018

 

 

 

38,446,956

 

 

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

2


NKARTA, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited, in thousands, except share data)

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Gain/(Loss)

 

 

Deficit

 

 

Equity

 

Balance, December 31, 2022

 

 

48,877,806

 

 

$

5

 

 

$

690,814

 

 

$

(679

)

 

$

(317,933

)

 

$

372,207

 

Vesting of shares of common
   stock subject to repurchase

 

 

395

 

 

 

 

 

 

2

 

 

 

 

 

 

 

 

 

2

 

Issuance of common stock
   upon exercise of stock
   options

 

 

253

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

Issuance of common stock
   upon vesting of restricted stock units

 

 

50,469

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation
   expense

 

 

 

 

 

 

 

 

4,746

 

 

 

 

 

 

 

 

 

4,746

 

Unrealized gain on
   investments

 

 

 

 

 

 

 

 

 

 

 

505

 

 

 

 

 

 

505

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(30,815

)

 

 

(30,815

)

Balance, March 31, 2023

 

 

48,928,923

 

 

$

5

 

 

$

695,563

 

 

$

(174

)

 

$

(348,748

)

 

$

346,646

 

Vesting of shares of common
   stock subject to repurchase

 

 

113

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

Issuance of common stock
   upon exercise of stock
   options

 

 

5,892

 

 

 

 

 

 

21

 

 

 

 

 

 

 

 

 

21

 

Issuance of common stock
   upon vesting of restricted stock units

 

 

28,074

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued under
   employee stock purchase plan

 

 

95,232

 

 

 

 

 

 

374

 

 

 

 

 

 

 

 

 

374

 

Share-based compensation
   expense

 

 

 

 

 

 

 

 

4,650

 

 

 

 

 

 

 

 

 

4,650

 

Unrealized loss on
   investments

 

 

 

 

 

 

 

 

 

 

 

(427

)

 

 

 

 

 

(427

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(33,287

)

 

 

(33,287

)

Balance, June 30, 2023

 

 

49,058,234

 

 

$

5

 

 

$

700,609

 

 

$

(601

)

 

$

(382,035

)

 

$

317,978

 

 

3


NKARTA, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited, in thousands, except share data)

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Gain/(Loss)

 

 

Deficit

 

 

Equity

 

Balance, December 31, 2021

 

 

32,971,107

 

 

$

3

 

 

$

455,210

 

 

$

(150

)

 

$

(204,096

)

 

$

250,967

 

Vesting of shares of common
   stock subject to repurchase

 

 

10,924

 

 

 

 

 

 

6

 

 

 

 

 

 

 

 

 

6

 

Issuance of common stock
   upon exercise of stock
   options

 

 

21,067

 

 

 

 

 

 

79

 

 

 

 

 

 

 

 

 

79

 

Share-based compensation
   expense

 

 

 

 

 

 

 

 

4,097

 

 

 

 

 

 

 

 

 

4,097

 

Unrealized loss on
   short-term investments

 

 

 

 

 

 

 

 

 

 

 

(456

)

 

 

 

 

 

(456

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(25,987

)

 

 

(25,987

)

Balance, March 31, 2022

 

 

33,003,098

 

 

$

3

 

 

$

459,392

 

 

$

(606

)

 

$

(230,083

)

 

$

228,706

 

Vesting of shares of common
   stock subject to repurchase

 

 

2,387

 

 

 

 

 

 

3

 

 

 

 

 

 

 

 

 

3

 

Issuance of common stock
   upon exercise of stock
   options, net of repurchase

 

 

88,383

 

 

 

 

 

 

334

 

 

 

 

 

 

 

 

 

334

 

Issuance of common stock
   upon secondary offering, net
   of issuance costs

 

 

15,333,334

 

 

 

2

 

 

 

215,332

 

 

 

 

 

 

 

 

 

215,334

 

Share-based compensation
   expense

 

 

 

 

 

 

 

 

3,912

 

 

 

 

 

 

 

 

 

3,912

 

Unrealized loss on short-term
   investments

 

 

 

 

 

 

 

 

 

 

 

(325

)

 

 

 

 

 

(325

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,923

)

 

 

(26,923

)

Balance, June 30, 2022

 

 

48,427,202

 

 

$

5

 

 

$

678,973

 

 

$

(931

)

 

$

(257,006

)

 

$

421,041

 

 

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

4


NKARTA, INC.

CONDENSED STATEMENT OF CASH FLOWS

(Unaudited, in thousands)

 

 

 

Six Months Ended
June 30,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(64,102

)

 

$

(52,910

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Share-based compensation expense

 

 

9,396

 

 

 

8,009

 

Depreciation and amortization

 

 

1,636

 

 

 

1,243

 

Accretion and amortization of premiums and discounts on investments, net

 

 

(4,511

)

 

 

1,110

 

Realized gain on investments

 

 

(34

)

 

 

 

Impairment of right-of-use assets

 

 

4,100

 

 

 

 

Non-cash lease expense

 

 

1,100

 

 

 

2,019

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other assets

 

 

663

 

 

 

3,282

 

Operating lease liabilities

 

 

7,143

 

 

 

3,649

 

Accounts payable and accrued and other liabilities

 

 

2,078

 

 

 

(1,274

)

Net cash used in operating activities

 

 

(42,531

)

 

 

(34,872

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(15,151

)

 

 

(4,399

)

Purchases of investments

 

 

(157,486

)

 

 

(175,011

)

Maturities of investments

 

 

206,395

 

 

 

69,088

 

Net cash provided by (used in) investing activities

 

 

33,758

 

 

 

(110,322

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from stock option exercises

 

 

22

 

 

 

413

 

Proceeds from ESPP purchases

 

 

374

 

 

 

 

Proceeds from secondary offering, net of issuance costs

 

 

 

 

 

215,611

 

Net cash provided by financing activities

 

 

396

 

 

 

216,024

 

Net (decrease) increase in cash and cash equivalents

 

 

(8,377

)

 

 

70,830

 

Cash, cash equivalents, and restricted cash beginning of period

 

 

40,237

 

 

 

62,914

 

Cash, cash equivalents, and restricted cash end of period

 

$

31,860

 

 

$

133,744

 

Reconciliation of cash, cash equivalents and restricted cash to the balance sheet:

 

 

 

 

 

 

Cash and cash equivalents

 

$

29,117

 

 

$

131,646

 

Restricted cash

 

 

2,743

 

 

 

2,098

 

Total cash, cash equivalents and restricted cash

 

$

31,860

 

 

$

133,744

 

Supplemental disclosures of non-cash investing activities:

 

 

 

 

 

 

Acquisitions of property and equipment in accounts payable

 

$

690

 

 

$

926

 

 

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

5


NKARTA, INC.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

 

1. Organization and Description of Business

Description of the Business

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