PART I—FINANCIAL INFORMATION [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The company's unaudited financials show a significant asset increase to $331.8 million post-IPO, alongside a growing net loss of $46.6 million for the nine months ended September 30, 2021 [Condensed Balance Sheets](index=5&type=section&id=Condensed%20Balance%20Sheets) Total assets grew to $331.8 million and stockholders' equity turned positive to $303.7 million by September 30, 2021, driven by IPO proceeds and preferred stock conversion Condensed Balance Sheet Data (in thousands) | | September 30, 2021 (Unaudited) | December 31, 2020 | | :--- | :--- | :--- | | **Total current assets** | $284,822 | $129,964 | | **Total assets** | $331,794 | $148,161 | | **Total current liabilities** | $13,692 | $5,041 | | **Total liabilities** | $28,095 | $8,722 | | **Total stockholders' equity (deficit)** | $303,699 | $(81,315) | [Condensed Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Net losses increased to $18.3 million for Q3 2021 and $46.6 million for the first nine months, driven by higher R&D and G&A expenses Operating Results (in thousands) | | Three Months Ended Sep 30, | Nine Months Ended Sep 30, | | :--- | :--- | :--- | | | **2021** | **2020** | **2021** | **2020** | | **Research and development** | $12,944 | $8,480 | $33,440 | $22,735 | | **General and administrative** | $5,356 | $1,972 | $13,202 | $5,855 | | **Total operating expenses** | $18,300 | $10,452 | $46,642 | $28,590 | | **Loss from operations** | $(18,300) | $(10,452) | $(46,642) | $(28,590) | | **Net loss** | $(18,262) | $(10,295) | $(46,570) | $(28,077) | | **Net loss per share** | $(0.68) | $(10.29) | $(4.75) | $(29.65) | [Condensed Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit)](index=7&type=section&id=Condensed%20Statements%20of%20Convertible%20Preferred%20Stock%20and%20Stockholders'%20Equity%20(Deficit)) The company's equity structure was transformed by the IPO, which converted all preferred stock and added substantial paid-in capital - Upon completion of the IPO, all **26,102,278 shares of convertible preferred stock were converted into common stock**[23](index=23&type=chunk) - The company issued **13,800,000 shares of common stock** in its IPO, resulting in a significant increase in additional paid-in capital[23](index=23&type=chunk) [Condensed Statements of Cash Flows](index=11&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Net cash used in operations and investing was offset by $209.0 million in financing activities, primarily from the IPO and Series C stock issuance Cash Flow Summary (in thousands) | | Nine Months Ended September 30, | | :--- | :--- | :--- | | | **2021** | **2020** | | **Net cash used in operating activities** | $(44,465) | $(25,046) | | **Net cash (used in) provided by investing activities** | $(175,984) | $1,167 | | **Net cash provided by financing activities** | $208,991 | $61,344 | | **Net change in cash, cash equivalents and restricted cash** | $(11,458) | $37,465 | | **Cash, cash equivalents and restricted cash at end of period** | $117,624 | $61,736 | [Notes to Unaudited Condensed Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) The notes detail the company's business, the $188.5 million net proceeds from its August 2021 IPO, and management's assertion of sufficient liquidity for the next year - The company is a preclinical stage biotechnology company focused on therapies for heart disease, advancing candidates from gene therapy, cellular regeneration, and precision medicine platforms[33](index=33&type=chunk) - On August 3, 2021, the company completed its IPO, issuing 13.8 million shares of common stock and receiving **net proceeds of $188.5 million**[35](index=35&type=chunk) - Management believes that its **cash, cash equivalents, and marketable securities of $280.5 million** as of September 30, 2021, are sufficient to fund operations for at least the next twelve months[36](index=36&type=chunk)[37](index=37&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses its preclinical programs, increased operating expenses, and strengthened financial position following the $188.5 million IPO - The company is a preclinical biotechnology firm focused on curative therapies for heart disease with a pipeline including gene therapies and small molecules[101](index=101&type=chunk) - Key pipeline milestones for 2022 include submitting an IND or CTA for gene therapy candidate **TN-201** and an IND for small molecule inhibitor **TYA-11631**[103](index=103&type=chunk)[104](index=104&type=chunk) - The company completed its IPO on August 3, 2021, raising **net proceeds of $188.5 million**[105](index=105&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Net losses widened significantly in the three and nine months ended September 30, 2021, due to increased R&D and G&A spending Comparison of Operating Results (in thousands) | | Three Months Ended Sep 30, | Nine Months Ended Sep 30, | | :--- | :--- | :--- | | | **2021** | **2020** | **2021** | **2020** | | **Research and development** | $12,944 | $8,480 | $33,440 | $22,735 | | **General and administrative** | $5,356 | $1,972 | $13,202 | $5,855 | | **Net loss** | $(18,262) | $(10,295) | $(46,570) | $(28,077) | - The increase in R&D expenses was driven by higher facility and laboratory costs (**+$1.4M in Q3, +$5.0M in 9M**), personnel-related costs (**+$1.9M in Q3, +$3.9M in 9M**), and external research costs (**+$1.2M in Q3, +$1.8M in 9M**)[118](index=118&type=chunk)[119](index=119&type=chunk)[125](index=125&type=chunk)[130](index=130&type=chunk) - General and administrative expenses rose due to increased personnel costs, professional services for the IPO, and higher facility costs[120](index=120&type=chunk)[125](index=125&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) The company holds $280.5 million in cash and securities post-IPO, sufficient for the next twelve months, but will require substantial future funding - As of September 30, 2021, the company had **cash, cash equivalents, and investments in marketable securities of $280.5 million**[129](index=129&type=chunk) - Management believes **existing cash will be sufficient to fund operations** and capital expenditure needs for at least the next twelve months[132](index=132&type=chunk) - The company will require **substantial additional funding** to complete the development and commercialization of its product candidates[133](index=133&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, this section is not applicable - As a smaller reporting company, Tenaya Therapeutics is **not required to provide** quantitative and qualitative disclosures about market risk[151](index=151&type=chunk) [Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2021, with no material changes to internal controls - The CEO and CFO concluded that as of September 30, 2021, the company's **disclosure controls and procedures were effective**[152](index=152&type=chunk) - There were **no changes in internal control over financial reporting** during the quarter ended September 30, 2021, that have materially affected, or are reasonably likely to materially affect, internal controls[153](index=153&type=chunk) PART II—OTHER INFORMATION [Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently party to any material legal proceedings - As of the filing date, the company is **not involved in any legal proceedings** that are likely to have a material adverse effect on its business[155](index=155&type=chunk) [Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks related to its early stage of development, history of losses, need for capital, and uncertainties in drug development and regulation - The company is in the **early stages of development** with a limited operating history, no products approved for sale, and has incurred significant net losses since inception[157](index=157&type=chunk)[158](index=158&type=chunk)[161](index=161&type=chunk) - **Substantial additional capital will be required** to finance operations, and failure to raise it could force delays or elimination of research programs[157](index=157&type=chunk)[168](index=168&type=chunk) - The development of novel gene therapy product candidates is subject to a **rigorous, complex, and uncertain regulatory landscape**, with no guarantee of approval[157](index=157&type=chunk)[192](index=192&type=chunk) - The company faces risks related to **intellectual property**, including the ability to obtain and enforce patents and operate without infringing on the rights of third parties[157](index=157&type=chunk)[333](index=333&type=chunk)[347](index=347&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=93&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company details pre-IPO stock option grants and confirms the use of its $188.5 million in net IPO proceeds remains consistent with its registration statement - From July 1 to July 30, 2021, the company granted stock options to employees to purchase an aggregate of **446,998 shares of common stock** at an exercise price of $10.56 per share[467](index=467&type=chunk) - The company's IPO on August 3, 2021, generated **net proceeds of approximately $188.5 million** after deducting underwriting discounts, commissions, and offering expenses[469](index=469&type=chunk) - There has been **no material change in the planned use of proceeds** from the IPO as described in the Form S-1 registration statement[469](index=469&type=chunk) [Defaults Upon Senior Securities](index=94&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section is not applicable as the company reports no defaults [Mine Safety Disclosures](index=94&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable [Other Information](index=94&type=section&id=Item%205.%20Other%20Information) The company reports no other information for this period [Exhibits](index=95&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the quarterly report

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, 2021 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: 001-40656 TENAYA THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) Delaware 81-3789973 (Sta ...