dtil-10q_20200930.htm

 

 

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 September 30, 2020

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: 001-38841

 

Precision BioSciences, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

20-4206017

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

302 East Pettigrew St., Suite A-100

Durham, North Carolina

27701

(Address of principal executive offices)

(Zip Code)

 

(919) 314-5512

(Registrant’s telephone number, including area code)

 

N/A

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

 

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

 

 

 

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.000005 per share

DTIL

The 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 November 4, 2020, the registrant had 52,480,469 shares of common stock, $0.000005 par value per share, outstanding.

 

 

 


Table of Contents

 

 

 

Page

 

Forward-Looking Statements

3

 

Risk Factor Summary

6

PART I.

FINANCIAL INFORMATION

7

Item 1.

Financial Statements

7

 

Condensed Consolidated Balance Sheets

7

 

Condensed Consolidated Statements of Operations

8

 

Condensed Consolidated Statements of Changes in Stockholders’ Equity

9

 

Condensed Consolidated Statements of Cash Flows

10

 

Notes to Condensed Consolidated Financial Statements

11

Item 2.

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

23

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

38

Item 4.

Controls and Procedures

38

PART II.

OTHER INFORMATION

39

Item 1.

Legal Proceedings

39

Item 1A.

Risk Factors

39

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

91

Item 3.

Defaults Upon Senior Securities

91

Item 4.

Mine Safety Disclosures

91

Item 5.

Other Information

92

Item 6.

Exhibits

94

 

Signatures

95

 

 

 

 

2


FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of present and historical facts contained in this Quarterly Report on Form 10-Q, including without limitation, statements regarding our future results of operations and financial position, business strategy and approach, including related results, prospective products, planned preclinical studies and clinical or field trials, the status and results of our preclinical and clinical studies, expected release of interim data, expectations regarding our allogeneic chimeric antigen receptor T cell immunotherapy product candidates, potential new partnerships or alternative opportunities for our product candidates, expectations regarding our collaboration and license agreement with the University of Pennsylvania, capabilities of our manufacturing facility, regulatory approvals, research and development costs, timing, expected results and likelihood of success, plans and objectives of management for future operations, as well as the impact of the COVID-19 pandemic may be forward-looking statements. Without limiting the foregoing, in some cases, you can identify forward-looking statements by terms such as “aim”, “may,” “will,” “should,” “expect,” “exploring,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” “seeks,” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. No forward-looking statement is a guarantee of future results, performance, or achievements, and one should avoid placing undue reliance on such statements.

Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to us. Such beliefs and assumptions may or may not prove to be correct. Additionally, such forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to, those identified in Part I. Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II. Item 1A “Risk Factors” in this Quarterly Report on Form 10-Q. These risks and uncertainties include, but are not limited to:

 

our ability to become profitable;

 

our ability to procure sufficient funding and requirements under our current debt instruments and effects of restrictions thereunder;

 

risks associated with raising additional capital;

 

our operating expenses and our ability to predict what those expenses will be;

 

our limited operating history;

 

the success of our programs and product candidates in which we expend our resources;

limited ability or inability to assess the safety and efficacy of our product candidates;

 

our dependence on our ARCUS technology;

 

the initiation, cost, timing, progress, achievement of milestones and results of research and development activities, preclinical or greenhouse studies and clinical or field trials;

 

public perception about genome editing technology and its applications;

 

competition in the genome editing, biopharmaceutical, biotechnology and agricultural biotechnology fields;

 

our or our collaborators’ ability to identify, develop and commercialize product candidates;

 

pending and potential liability lawsuits and penalties against us or our collaborators related to our technology and our product candidates;

3


 

the U.S. and foreign regulatory landscape applicable to our and our collaborators’ development of product candidates;

 

our or our collaborators’ ability to obtain and maintain regulatory approval of our product candidates, and any related restrictions, limitations and/or warnings in the label of an approved product candidate;

 

our or our collaborators’ ability to advance product candidates into, and successfully design, implement and complete, clinical or field trials;

 

potential manufacturing problems associated with the development or commercialization of any of our product candidates;

our ability to obtain an adequate supply of T cells from qualified donors;

 

our ability to achieve our anticipated operating efficiencies at our manufacturing facility;

 

delays or difficulties in our and our collaborators’ ability to enroll patients;

changes in interim “top-line” and initial data that we announce or publish;

 

if our product candidates do not work as intended or cause undesirable side effects;

 

risks associated with applicable healthcare, data protection, privacy and security regulations and our compliance therewith;

 

the rate and degree of market acceptance of any of our product candidates;

 

the success of our existing collaboration agreements, and our ability to enter into new collaboration arrangements;

 

our current and future relationships with and reliance on third parties including suppliers and manufacturers;

 

our ability to obtain and maintain intellectual property protection for our technology and any of our product candidates;

 

potential litigation relating to infringement or misappropriation of intellectual property rights;

 

our ability to effectively manage the growth of our operations;

 

our ability to attract, retain, and motivate key executives and personnel;

 

market and economic conditions;

 

effects of system failures and security breaches;

 

effects of natural and manmade disasters, public health emergencies and other natural catastrophic events;

 

effects of the outbreak of COVID-19, or any pandemic, epidemic or outbreak of an infectious disease;

 

insurance expenses and exposure to uninsured liabilities;

 

effects of tax rules; and

 

risks related to ownership of our common stock, including fluctuations in our stock price.

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.

4


You should read this Quarterly Report on Form 10-Q and the documents that we reference herein 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. All forward-looking statements contained herein speak only as of the date of this Quarterly Report on Form 10-Q. 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.

As used in this Quarterly Report on Form 10-Q, unless otherwise stated or the context requires otherwise, references to “Precision,” the “Company,” “we,” “us,” and “our,” refer to Precision BioSciences, Inc. and its subsidiaries on a consolidated basis.


5


RISK FACTOR SUMMARY

Our business is subject to numerous risks and uncertainties, including those described in Part II. Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q. You should carefully consider these risks and uncertainties when investing in our common stock. Some of these risks and uncertainties include the following.

 

We have incurred significant operating losses since our inception and expect to continue to incur losses for the foreseeable future. We have never been profitable, and may never achieve or maintain profitability.

 

We will need substantial additional funding, and if we are unable to raise a sufficient amount of capital when needed on acceptable terms, or at all, we may be forced to delay, reduce or eliminate some or all of our research programs, product development activities and commercialization efforts.

 

We have a limited operating history, which makes it difficult to evaluate our current business and future prospects and may increase the risk of your investment.

 

ARCUS is a novel technology, making it difficult to predict the time, cost and potential success of product candidate development. We have not yet been able to assess the safety and efficacy of most of our product candidates in humans, and have only limited safety and efficacy information in humans to date regarding one of our product candidates.

 

We are heavily dependent on the successful development and translation of ARCUS, and due to the early stages of our product development operations, we cannot give any assurance that any product candidates will be successfully developed and commercialized.

 

Adverse public perception of genome editing may negatively impact the developmental progress or commercial success of products that we develop alone or with collaborators.

 

We face significant competition in industries experiencing rapid technological change, and there is a possibility that our competitors may achieve regulatory approval before us or develop product candidates or treatments that are safer or more effective than ours, which may harm our financial condition and our ability to successfully market or commercialize any of our product candidates.

 

Our future profitability, if any, depends in part on our and our collaborators’ ability to penetrate global markets, where we would be subject to additional regulatory burdens and other risks and uncertainties associated with international operations that could materially adversely affect our business.

 

Product liability lawsuits against us could cause us to incur substantial liabilities and could limit commercialization of any products that we develop alone or with collaborators.

 

The regulatory landscape that will apply to development of therapeutic product candidates by us or our collaborators is rigorous, complex, uncertain and subject to change, which could result in delays or termination of development of such product candidates or unexpected costs in obtaining regulatory approvals.

 

Clinical trials are difficult to design and implement, expensive, time-consuming and involve an uncertain outcome, and the inability to successfully and timely conduct clinical trials and obtain regulatory approval for our product candidates would substantially harm our business.

 

Even if we obtain regulatory approval for any products that we develop alone or with collaborators, such products will remain subject to ongoing regulatory requirements, which may result in significant additional expense.

 

Even if any product we develop alone or with collaborators receives marketing approval, such product may fail to achieve the degree of market acceptance by physicians, patients, healthcare payors and others in the medical community necessary for commercial success.

6


Part I. Financial information

 

Item 1.  Financial Statements.

Precision Biosciences, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

September 30, 2020

 

 

December 31, 2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

104,148

 

 

$

180,886

 

Accounts receivable

 

 

10,116

 

 

 

965

 

Prepaid expenses

 

 

8,235

 

 

 

9,497

 

Other current assets

 

 

61

 

 

 

2,324

 

Total current assets

 

 

122,560

 

 

 

193,672

 

Property, equipment, and software—net

 

 

36,494

 

 

 

39,571

 

Intangible assets—net

 

 

1,387

 

 

 

1,432

 

Right-of-use assets

 

 

6,691

 

 

 

 

Other assets

 

 

1,555

 

 

 

558

 

Total assets

 

$

168,687

 

 

$

235,233

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

959

 

 

$

2,037

 

Accrued compensation

 

 

4,665

 

 

 

4,425

 

Accrued clinical and research and development expenses

 

 

3,824

 

 

 

2,400

 

Accrued other expenses and other current liabilities

 

 

1,443

 

 

 

1,584

 

Deferred revenue

 

 

29,219

 

 

 

16,486

 

Lease liabilities

 

 

1,873

 

 

 

 

Total current liabilities

 

 

41,983

 

 

 

26,932

 

Deferred revenue—noncurrent

 

 

53,789

 

 

 

65,895

 

Deferred rent—noncurrent

 

 

 

 

 

4,092

 

Lease liabilities—noncurrent

 

 

9,091

 

 

 

 

Total liabilities

 

 

104,863

 

 

 

96,919

 

Commitments and contingencies (Note 4)

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.0001 par value— 10,000,000 shares authorized as of September 30, 2020 and December 31, 2019; no shares issued and outstanding as of September 30, 2020 and December 31, 2019

 

 

 

 

 

 

Common stock; $0.000005 par value— 200,000,000 shares authorized as of September 30, 2020 and December 31, 2019; 53,285,492 shares issued and 52,475,020 shares outstanding as of September 30, 2020; 51,965,708 shares issued and 51,155,236 shares outstanding as of December 31, 2019

 

 

 

 

 

 

Additional paid-in capital

 

 

327,396

 

 

 

316,333

 

Accumulated deficit

 

 

(262,620

)

 

 

(177,067

)

Treasury stock

 

 

(952

)

 

 

(952

)

Total stockholders’ equity

 

 

63,824

 

 

 

138,314

 

Total liabilities and stockholders’ equity

 

$

168,687

 

 

$

235,233

 

 

See notes to condensed consolidated financial statements

7


Precision Biosciences, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenue

 

$

7,363

 

 

$

4,865

 

 

$

15,439

 

 

$

15,716

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

24,873

 

 

 

19,791

 

 

 

74,935

 

 

 

62,512

 

General and administrative

 

 

8,534

 

 

 

7,052

 

 

 

26,852

 

 

 

18,547

 

Total operating expenses

 

 

33,407

 

 

 

26,843

 

 

 

101,787

 

 

 

81,059

 

Loss from operations

 

 

(26,044

)

 

 

(21,978

)

 

 

(86,348

)

 

 

(65,343

)

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in fair value of convertible notes payable

 

 

 

 

 

 

 

 

 

 

 

(9,758

)

Interest expense

 

 

 

 

 

 

 

 

 

 

 

(182

)

Interest income

 

 

28

 

 

 

1,236

 

 

 

795

 

 

 

3,322

 

Total other income (expense), net

 

 

28

 

 

 

1,236

 

 

 

795

 

 

 

(6,618

)

Net loss and net loss attributable to common stockholders

 

$

(26,016

)

 

$

(20,742

)

 

$

(85,553

)

 

$

(71,961

)

Net loss per share attributable to common stockholders-

   basic and diluted

 

$

(0.50

)

 

$

(0.41

)

 

$

(1.65

)

 

$

(1.85

)

Weighted average shares of common stock outstanding-

   basic and diluted

 

 

52,346,715

 

 

 

50,623,665

 

 

 

51,858,032

 

 

 

39,002,304

 

 

See notes to condensed consolidated financial statements

 

 

8


Precision Biosciences, Inc.

Condensed Consolidated Statements of Changes in

Stockholders’ Equity

(In thousands, except share amounts)

(Unaudited)

 

 

 

 

 

Series A Convertible

Preferred Stock

 

 

Series B Convertible

Preferred Stock

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

 

 

Treasury

 

 

Total

Stockholder's

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Stock

 

 

Equity

 

Balance- January 1, 2019

 

 

25,650,000

 

 

$

3

 

 

 

21,956,095

 

 

$

2

 

 

 

16,717,117

 

 

 

 

$

 

 

$

126,094

 

 

$

(85,187

)

 

$

(952

)

 

$

39,960

 

Adjustment to beginning accumulated

   deficit from adoption of ASU

   2014-09

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

997

 

 

 

 

 

 

997

 

Stock option exercises

 

 

 

 

 

 

 

 

 

 

 

 

 

 

145,975

 

 

 

 

 

 

 

 

107

 

 

 

 

 

 

 

 

 

107

 

Share-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,549

 

 

 

 

 

 

 

 

 

1,549

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(31,783

)

 

 

 

 

 

(31,783

)

Balance- March 31, 2019

 

 

25,650,000

 

 

$

3

 

 

 

21,956,095

 

 

$

2

 

 

 

16,863,092

 

 

 

 

$

 

 

$

127,750

 

 

$

(115,973

)

 

$

(952

)

 

$

10,830

 

Conversion of convertible preferred stock into

   common stock upon initial public offering

 

 

(25,650,000

)

 

 

(3

)

 

 

(21,956,095

)

 

 

(2

)

 

 

22,301,190

 

 

 

 

 

 

 

 

5

 

 

 

 

 

 

 

 

 

 

Issuance of common stock upon conversion of

   convertible notes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,921,461

 

 

 

 

 

 

 

 

49,490

 

 

 

 

 

 

 

 

 

49,490

 

Issuance of common stock in initial public

   offering, net of discounts and issuance costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,085,000

 

 

 

 

 

 

 

 

130,543

 

 

 

 

 

 

 

 

 

130,543

 

Stock option exercises

 

 

 

 

 

 

 

 

 

 

 

 

 

 

230,272

 

 

 

 

 

 

 

 

272

 

 

 

 

 

 

 

 

 

 

 

272

 

Share-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,279

 

 

 

 

 

 

 

 

 

2,279

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(19,436

)

 

 

 

 

 

(19,436

)

Balance- June 30, 2019

 

 

 

 

$

 

 

 

 

 

$

 

 

 

51,401,015

 

 

 

 

$

 

 

$

310,339

 

 

$

(135,409

)

 

$

(952

)

 

$

173,978

 

Stock option exercises

 

 

 

 

 

 

 

 

 

 

 

 

 

 

69,161

 

 

 

 

 

 

 

 

61

 

 

 

 

 

 

 

 

 

 

61

 

Share-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,491

 

 

 

 

 

 

 

 

 

2,491

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(20,742

)

 

 

 

 

 

(20,742

)

Balance- September 30, 2019

 

 

 

 

$

 

 

 

 

 

$

 

 

 

51,470,176

 

 

 

 

$

 

 

 

312,891

 

 

$

(156,151

)

 

$

(952

)

 

$

155,788

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance- January 1, 2020

 

 

 

 

$

 

 

 

 

 

$

 

 

 

51,965,708

 

 

 

 

$

 

 

$

316,333

 

 

$

(177,067

)

 

$

(952

)

 

$

138,314

 

Stock option exercises

 

 

 

 

 

 

 

 

 

 

 

 

 

 

244,999

 

 

 

 

 

 

 

 

212

 

 

 

 

 

 

 

 

 

212

 

Issuance of common stock under employee

   stock purchase plan

 

 

 

 

 

 

 

 

 

 

 

 

 

 

42,620

 

 

 

 

 

 

 

 

239

 

 

 

 

 

 

 

 

 

239

 

Share-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,105

 

 

 

 

 

 

 

 

 

3,105

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,836

)

 

 

 

 

 

(26,836

)

Balance- March 31, 2020

 

 

 

 

$

 

 

 

 

 

$

 

 

 

52,253,327

 

 

 

 

$

 

 

$

319,889

 

 

$

(203,903

)

 

$

(952

)

 

$

115,034

 

Stock option exercises

 

 

 

 

 

 

 

 

 

 

 

 

 

 

725,574

 

 

 

 

 

 

 

 

148

 

 

 

 

 

 

 

 

 

148

 

Share-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,118

 

 

 

 

 

 

 

 

 

3,118

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(32,701

)

 

 

 

 

 

(32,701

)

Balance- June 30, 2020

 

 

 

 

$

 

 

 

 

 

$

 

 

 

52,978,901

 

 

 

 

$

 

 

$

323,155

 

 

$

(236,604

)

 

$

(952

)

 

$

85,599

 

Stock option exercises

 

 

 

 

 

 

 

 

 

 

 

 

 

 

222,983

 

 

 

 

$

 

 

 

131

 

 

$

 

 

 

-

 

 

$

131

 

Issuance of common stock under employee

   stock purchase plan

 

 

 

 

 

 

 

 

 

 

 

 

 

 

83,608

 

 

 

 

 

 

 

 

401

 

 

 

 

 

 

 

 

 

401

 

Share-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,709

 

 

 

 

 

 

 

 

 

3,709

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,016

)

 

 

 

 

 

(26,016

)

Balance - September 30, 2020

 

 

 

 

$

 

 

 

 

 

$

 

 

 

53,285,492

 

 

 

 

$

 

 

$

327,396

 

 

$

(262,620

)

 

$

(952

)

 

$

63,824

 

 

See notes to condensed consolidated financial statements

 

 

 

9


 

Precision Biosciences, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

For the Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(85,553

)

 

$

(71,961

)

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

6,587

 

 

 

3,508

 

Share-based compensation

 

 

9,932

 

 

 

6,319

 

Loss on disposal of assets

 

 

 

 

 

22

 

Non-cash interest expense

 

 

 

 

 

182

 

Change in fair value of convertible notes payable

 

 

 

 

 

9,758

 

Amortization of right-of-use assets

 

 

755

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses

 

 

1,262

 

 

 

(1,826

)

Accounts receivable

 

 

(9,151

)

 

 

273

 

Other assets and other current assets

 

 

2,185

 

 

 

(601

)

Accounts payable

 

 

(1,337

)

 

 

597

 

Accrued other expenses and other current liabilities

 

 

2,023

 

 

 

4,862

 

Deferred revenue

 

 

627

 

 

 

(1,592

)

Lease liabilities and right-of-use assets

 

 

(1,264

)

 

 

 

Net cash used in operating activities

 

 

(73,934

)

 

 

(50,459

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property, equipment and software

 

 

(3,935

)

 

 

(19,137

)

Net cash used in investing activities

 

 

(3,935

)

 

 

(19,137

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from stock option exercises

 

 

491

 

 

 

440

 

Proceeds from employee stock purchase plan

 

 

640