AVROBIO(AVRO) - 2024 Q1 - Quarterly Results

Financial Performance - Net loss for the three months ended March 31, 2024, was $15,221,000, compared to a net loss of$14,445,000 for the same period in 2023, indicating an increase in loss of about 5.4%[6] - The company reported a comprehensive loss of $15,271,000 for the three months ended March 31, 2024, compared to a comprehensive loss of$14,445,000 for the same period in 2023, reflecting an increase of about 5.7%[6] - The total net loss attributable to common stockholders was $15,221,000, compared to a net loss of$14,445,000 for the same period in 2023, representing an increase of approximately 5.4%[81] Assets and Liabilities - Total current assets decreased from $30,884,000 as of December 31, 2023, to$20,558,000 as of March 31, 2024, representing a decline of approximately 33.5%[3] - Total liabilities increased from $43,408,000 as of December 31, 2023, to$50,102,000 as of March 31, 2024, an increase of about 15.3%[3] - Total stockholders' deficit increased from $84,636,000 as of December 31, 2023, to$99,574,000 as of March 31, 2024, an increase of about 17.6%[3] - Cash and cash equivalents decreased from $28,769,000 as of December 31, 2023, to$18,748,000 as of March 31, 2024, a reduction of approximately 34.9%[3] - Cash and cash equivalents decreased to $19.3 million as of March 31, 2024, down from$25.5 million at the end of 2023, representing a decrease of approximately 24%[12] - The aggregate liquidation preference of convertible preferred stock remained at $87,459,000 as of March 31, 2024, consistent with December 31, 2023[3] Research and Development - Research and development expenses for the three months ended March 31, 2024, were$10,818,000, down from $12,985,000 for the same period in 2023, a decrease of approximately 16.8$9.3 million in cash from operating activities during the first quarter of 2024, an improvement from $10.8 million used in the same period of 2023[12] - The Company paid$381,000 in operating cash flows for operating leases during the three months ended March 31, 2024, compared to $370,000 in the same period of 2023[53] Equity and Stock - The weighted-average common shares outstanding increased from 2,222,800 for the three months ended March 31, 2023, to 2,608,740 for the same period in 2024, an increase of approximately 17.3$80,627,000 as of March 31, 2024[57] - The Company has authorized the issuance of up to 11,947,558 shares of common stock, with 2,637,120 shares issued and outstanding as of March 31, 2024[67] - The 2019 Equity Incentive Plan allows for the issuance of up to 1,991,264 shares of common stock, with stock options being the only equity awards issued to date[68] - The total stock-based compensation expense for the three months ended March 31, 2024, was $321,000, up from$275,000 in 2023, indicating a year-over-year increase of approximately 16.7%[77] Mergers and Acquisitions - The company completed a merger with AVROBIO, Inc. on June 20, 2024, receiving $77.3 million in cash and completing the sale of$96.6 million in common stock[16] - The company entered into a merger agreement with AVROBIO on January 30, 2024, with the merger closing on June 20, 2024, treating AVROBIO as the acquired company for financial reporting purposes[91] - Concurrently with the merger, certain investors purchased 7,790,889 shares of the company's common stock for an aggregate purchase price of approximately $96.6 million[92] Fair Value and Liabilities - The company incurred a change in the fair value of SAFE liabilities amounting to a loss of$2,075,000 for the three months ended March 31, 2024[6] - As of March 31, 2024, the SAFE liabilities were valued at $32.59 million, up from$30.52 million as of December 31, 2023, reflecting a fair value adjustment of $2.08 million[31] - The fair value of the SAFEs issued in October 2023 was recognized at$10.4 million, with subsequent measurement resulting in total SAFE liabilities fair value of $32.6 million recorded in the statement of operations[87] Commitments and Expenses - The Company has commitments for annual maintenance fees and royalty payments under its agreements with Harvard and Alloy Therapeutics, which may total in the low seven digits annually[42][46] - The Company has a remaining installment of$56,668 due to Harvard in July 2024 as part of a license agreement[42] - Total lease costs for the three months ended March 31, 2024, amounted to $921,000, an increase of 4.3$883,000 for the same period in 2023[52] Depreciation and Fair Value Adjustments - Depreciation expense for the three months ended March 31, 2024, was $0.3 million, compared to$0.2 million for the same period in 2023[36] - The company recorded a change in the fair value of SAFE liabilities amounting to $2.1 million for the first quarter of 2024[12] Tax Assets - The company has maintained a full valuation allowance against its net deferred tax assets as of March 31, 2024, due to cumulative net losses and the likelihood of not realizing the benefits of these assets[79]