FREQUENCY THERAP(FREQ) - 2023 Q2 - Quarterly Report

FORM 10-Q Filing Information This section details the company's Form 10-Q filing status, identifying it as a non-accelerated, smaller reporting, and emerging growth company for the period ended June 30, 2023 - This is a Quarterly Report on Form 10-Q for the period ended June 30, 2023[2] - Frequency Therapeutics, Inc. is a Delaware corporation with Commission File Number 001-39062[2] Registrant Status | Status | Mark | | :---------------------- | :--- | | Large accelerated filer | ☐ | | Accelerated filer | ☐ | | Non-accelerated filer | ☒ | | Smaller reporting company | ☒ | | Emerging growth company | ☒ | Forward-Looking Statements This section outlines the company's forward-looking statements, emphasizing potential material differences in actual results due to risks and uncertainties, and the policy on updates - This report contains forward-looking statements covered by safe harbor provisions, including those related to the Merger Agreement with Korro Bio, Inc., future funding needs, expenses, and business strategy[7] - Actual results may differ materially due to known and unknown risks, uncertainties, and assumptions, as described in the 'Risk Factors' and 'Management's Discussion and Analysis' sections[7][8] - The company does not plan to publicly update or revise any forward-looking statements unless required by applicable law[9] PART I. FINANCIAL INFORMATION Item 1. Consolidated Financial Statements (Unaudited) This section presents the unaudited consolidated financial statements for Frequency Therapeutics, Inc., including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, along with accompanying notes. These statements are prepared in accordance with GAAP, and interim results are not necessarily indicative of full-year performance Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity as of June 30, 2023, and December 31, 2022 Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2023 | December 31, 2022 | | :-------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $39,712 | $51,954 | | Short-term marketable securities | $6,766 | $31,143 | | Total current assets | $48,379 | $87,493 | | Total assets | $79,383 | $121,238 | | Total current liabilities | $8,328 | $21,026 | | Total liabilities | $33,975 | $52,043 | | Accumulated deficit | $(292,004) | $(261,665) | | Total stockholders' equity | $45,408 | $69,195 | Consolidated Statements of Operations This section presents the company's financial performance over specific periods, highlighting operating expenses and net loss for the three and six months ended June 30, 2023 and 2022 Consolidated Statements of Operations Highlights (in thousands, except per share) | Metric | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | | :------------------------------------------ | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Research and development | $4,594 | $13,273 | $15,949 | $27,054 | | General and administrative | $7,237 | $8,000 | $16,393 | $17,477 | | Total operating expenses | $11,831 | $21,273 | $32,342 | $44,531 | | Net loss | $(10,796) | $(21,285) | $(30,339) | $(44,671) | | Net loss per share (basic and diluted) | $(0.30) | $(0.61) | $(0.85) | $(1.28) | - Net loss decreased by $10.5 million for the three months ended June 30, 2023, and by $14.3 million for the six months ended June 30, 2023, compared to the prior year periods[120][131] Consolidated Statements of Comprehensive Loss This section details the company's comprehensive loss, including net loss and other comprehensive income (loss) components for the three and six months ended June 30, 2023 and 2022 Consolidated Statements of Comprehensive Loss (in thousands) | Metric | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | | :------------------------------------ | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(10,796) | $(21,285) | $(30,339) | $(44,671) | | Unrealized gain (loss) on marketable securities | $58 | $(96) | $192 | $(330) | | Comprehensive loss | $(10,738) | $(21,381) | $(30,147) | $(45,001) | Consolidated Statements of Stockholders' Equity This section outlines changes in the company's stockholders' equity, reflecting the impact of net loss, stock-based compensation, and other comprehensive income (loss) Stockholders' Equity Changes (in thousands) | Metric | Balance, Dec 31, 2022 | Stock-based compensation expense | Other comprehensive gain | Net loss | Balance, June 30, 2023 | | :-------------------------- | :-------------------- | :----------------------------- | :----------------------- | :------- | :--------------------- | | Total stockholders' equity | $69,195 | $6,328 | $192 | $(30,339) | $45,408 | - Common shares issued and outstanding increased from 35,262,083 at December 31, 2022, to 35,963,706 at June 30, 2023[14][51] Consolidated Statements of Cash Flows This section presents the company's cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2023 and 2022 Consolidated Statements of Cash Flows (in thousands) | Activity | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(22,556) | $(30,821) | | Net cash provided by (used in) investing activities | $24,710 | $(6,641) | | Net cash (used in) provided by financing activities | $(14,135) | $200 | | Net decrease in cash, cash equivalents and restricted cash | $(11,981) | $(37,262) | | Cash, cash equivalents, and restricted cash at end of period | $41,672 | $44,072 | - Net cash used in operating activities decreased by $8.3 million year-over-year due to a $14.3 million decrease in net loss[151][152] - Net cash provided by investing activities significantly increased due to $26.8 million in redemptions of marketable securities in 2023[154][155] Notes to Unaudited Consolidated Financial Statements This section provides detailed explanations and additional information supporting the unaudited consolidated financial statements, covering organization, accounting policies, and specific financial items 1. Organization and basis of presentation This note describes the company's business, recent restructuring, and its financial viability concerns due to recurring losses and accumulated deficit - Frequency Therapeutics, Inc. is a preclinical-stage regenerative medicine company that underwent significant restructuring in February and May 2023, discontinuing its hearing program and reducing personnel by approximately 55% each time[28][101] - The company has incurred recurring losses since inception, with an accumulated deficit of $292.0 million as of June 30, 2023, and its future viability is dependent on raising additional capital[29] 2. Recently adopted and issued accounting standards This note outlines the company's adoption of new accounting standards and its election as an 'emerging growth company' to use an extended transition period - As an 'emerging growth company,' the company has elected to use the extended transition period for complying with new or revised accounting standards[34] - The company adopted ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), on January 1, 2023, which did not have a material impact on its consolidated financial statements[35] 3. Fair value measurements This note details the fair value of the company's financial assets, including money market funds and marketable securities, and efforts to move bank accounts Fair Value of Financial Assets (in thousands) | Asset Category | June 30, 2023 Fair Value | December 31, 2022 Fair Value | | :------------------------- | :------------------------- | :--------------------------- | | Money market funds (Level 1) | $30,441 | $30,649 | | Short-term marketable securities (Level 2) | $6,766 | $31,143 | | Total | $37,207 | $61,792 | - The company is actively working to move its sweep and deposit accounts from Silicon Valley Bridge Bank to another financial institution[37] 4. Investments This note provides details on the company's short-term marketable securities, including their amortized cost, unrealized gains/losses, and fair market value Short-term Marketable Securities (in thousands) | Metric | June 30, 2023 | December 31, 2022 | | :------------------------- | :-------------- | :---------------- | | Amortization Cost | $6,571 | $31,280 | | Unrealized Gain (Loss) | $195 | $(317) | | Fair Market Value | $6,766 | $31,143 | - The company held 4 debt securities in an unrealized loss position at June 30, 2023, totaling $6.8 million fair value with a $(15) thousand unrealized loss, an improvement from 14 securities totaling $27.2 million fair value with a $(213) thousand unrealized loss at December 31, 2022[40][41][42] - Unrealized losses are attributed to changes in interest rates and do not represent credit losses; the company does not intend to sell these investments before recovery of their amortized cost bases[39] 5. Property and equipment This note details the company's property and equipment, net of accumulated depreciation, categorized by lab equipment, furniture, office equipment, and software Property and Equipment, Net (in thousands) | Category | June 30, 2023 | December 31, 2022 | | :-------------------------- | :-------------- | :---------------- | | Lab equipment | $5,658 | $5,706 | | Furniture and office equipment | $3,238 | $3,238 | | Software | $291 | $291 | | Total | $9,187 | $9,235 | | Accumulated depreciation | $(7,860) | $(6,496) | | Property and equipment, net | $1,327 | $2,739 | - Depreciation expense for the six months ended June 30, 2023, was $1,494 thousand, compared to $1,415 thousand for the same period in 2022[43] 6. Accrued expenses This note itemizes the company's accrued expenses, including payroll, professional fees, third-party R&D, and other categories, as of June 30, 2023, and December 31, 2022 Accrued Expenses (in thousands) | Category | June 30, 2023 | December 31, 2022 | | :-------------------------------- | :-------------- | :---------------- | | Payroll and employee related expenses | $2,885 | $4,216 | | Professional fees | $1,541 | $377 | | Third-party research and development expenses | $73 | $773 | | Other | $372 | $525 | | Total | $4,871 | $5,891 | 7. Debt This note details the prepayment of the company's term loan in April 2023 and the resulting decrease in interest expense for the reported periods - The company prepaid the remaining $11.7 million of its term loan on April 3, 2023[45] - Interest expense for the three months ended June 30, 2023, was $0, down from $208 thousand in 2022, and for the six months ended June 30, 2023, was $284 thousand, down from $386 thousand in 2022[45] 8. Net loss per share This note presents the calculation of basic and diluted net loss per share, along with the weighted-average shares outstanding for the reported periods Net Loss Per Share (basic and diluted) | Period | Net Loss (in thousands) | Weighted-average shares outstanding | Net loss per share | | :----------------------------- | :---------------------- | :---------------------------------- | :----------------- | | 3 Months Ended June 30, 2023 | $(10,796) | 35,800,821 | $(0.30) | | 3 Months Ended June 30, 2022 | $(21,285) | 34,976,409 | $(0.61) | | 6 Months Ended June 30, 2023 | $(30,339) | 35,563,754 | $(0.85) | | 6 Months Ended June 30, 2022 | $(44,671) | 34,894,001 | $(1.28) | - Potential common shares (unvested restricted stock units and outstanding stock options) were excluded from diluted net loss per share computation as they were anti-dilutive due to the net loss[47][49] 9. Stockholders' equity This note details changes in common stock outstanding, shares reserved for future issuance under incentive plans, and activity under the 'at the market' equity offering program - Common stock outstanding increased to 35,963,706 shares at June 30, 2023, from 35,262,083 shares at December 31, 2022[51] - Shares reserved for future issuance under incentive plans and stock options outstanding totaled 7,464,133 at June 30, 2023[52] - No shares were sold under the 'at the market' equity offering program during the three or six months ended June 30, 2023[54] 10. Stock-based compensation This note provides a breakdown of stock-based compensation expense by category and period, including details on outstanding stock options and the impact of option repricing Stock-based Compensation Expense (in thousands) | Category | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | | :-------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Research and development | $171 | $1,598 | $1,010 | $3,899 | | General and administrative | $2,726 | $2,966 | $5,318 | $5,931 | | Total | $2,897 | $4,564 | $6,328 | $9,830 | - Outstanding stock options decreased from 5,742,053 at December 31, 2022, to 4,739,486 at June 30, 2023, with a weighted-average exercise price of $2.34[55] - The repricing of 'Underwater Options' on August 17, 2022, resulted in $2.5 million of incremental stock-based compensation, with $339 thousand recognized in the six months ended June 30, 2023[59][60] 11. Employee stock purchase plan This note details the number of shares purchased under the Employee Stock Purchase Plan (ESPP) and the remaining shares available for future issuance - 24,754 shares were purchased under the Employee Stock Purchase Plan (ESPP) in January 2023[64] - As of June 30, 2023, a total of 1,553,394 shares remain available for future issuance under the ESPP[64] 12. Income taxes This note explains the company's income tax expense, primarily state taxes on interest income, and the full valuation allowance against deferred tax assets - Income tax expense for the three and six months ended June 30, 2023, was $5 thousand and $29 thousand, respectively, representing state taxes on interest income[65] - A full valuation allowance has been recorded against deferred tax assets due to the company's cumulative loss position, making it more likely than not that the benefits will not be realized[66] 13. Collaboration agreement This note details the termination of the License and Collaboration Agreement with Astellas Pharma Inc. for FX-322 and the associated financial implications - The License and Collaboration Agreement with Astellas Pharma Inc. for FX-322 was terminated on April 14, 2023[70][105] - The company was not subject to any payments or costs as a result of this termination[70][105] - Joint costs invoiced to Astellas were $81 thousand for the three months and $108 thousand for the six months ended June 30, 2023, significantly down from 2022[71] 14. License agreements This note outlines the termination of several key license agreements, including those with MIT, CALIBR, and Massachusetts Eye and Ear, impacting various treatment programs - The exclusive patent license agreement with the Massachusetts Institute of Technology (MIT) was terminated, effective July 6, 2023[73][106] - The license agreement with the California Institute for Biomedical Research (CALIBR) for MS treatment was terminated, effective April 2023[75][108] - The non-exclusive patent license agreement with Massachusetts Eye and Ear (MEE) for hearing loss treatment was terminated, effective April 2023[77][107] 15. Commitments and contingencies This note addresses the company's indemnification obligations and legal contingencies, including a dismissed class action lawsuit and a shareholder derivative complaint - The company indemnifies its officers and directors and other parties in the ordinary course of business, with no material losses experienced to date[80][81][83] - A class action lawsuit (Quinones et al. v. Frequency Therapeutics, Inc. et al.) alleging securities fraud was dismissed on March 29, 2023, but the plaintiff filed an appeal[86] - The company is unable to estimate a range of possible loss for its legal contingencies, including a shareholder derivative complaint, and therefore no accruals have been recorded as of June 30, 2023[86][88][89] 16. Sublease This note details the company's sublease agreement for office space, including the square footage, term, and recognized and expected future sublease income - The company subleased approximately 30,040 square feet of its office space in Lexington, MA, for a two-year term, commencing July 8, 2022[90] - Sublease income recognized was $593 thousand for the three months and $1,186 thousand for the six months ended June 30, 2023[91] Expected Future Sublease Income (in thousands) | Years Ending December 31, | Sublease Income | | :------------------------ | :-------------- | | 2023 | $1,186 | | 2024 | $1,383 | | Total future sublease income | $2,569 | 17. Restructuring This note describes the company's restructuring efforts following the FX-322 Phase 2b study failure, including workforce reductions and associated charges - Following the failure of the FX-322 Phase 2b study in February 2023, the company discontinued its hearing development programs and initiated a restructuring, including a 55% workforce reduction[93][100] Restructuring-Related Charges (Six Months Ended June 30, 2023, in thousands) | Category | Severance and other benefit related costs | Accelerated depreciation charges | Accelerated hearing program charges | Total | | :-------------------------- | :-------------------------------------- | :----------------------------- | :-------------------------------- | :---- | | Research and development | $2,138 | $360 | $129 | $2,627 | | General and administrative | $1,702 | — | — | $1,702 | | Total | $3,840 | $360 | $129 | $4,329 | - The remaining liability for restructuring as of June 30, 2023, was $1,953 thousand, classified as current accrued expenses[95][96] 18. Subsequent events This note details the company's Agreement and Plan of Merger with Korro Bio, Inc., including the structure of the transaction and potential termination fees - On July 14, 2023, the company entered into an Agreement and Plan of Merger with Korro Bio, Inc., where Korro Bio will merge into a subsidiary and survive as a wholly-owned subsidiary of Frequency Therapeutics[97] - The Merger Agreement includes potential termination fees: Korro Bio may pay $4.0 million to Frequency, or Frequency may pay $1.5 million to Korro Bio, under specified circumstances[98] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations, highlighting the discontinuation of hearing programs, multiple workforce reductions, and the proposed merger with Korro Bio. The merger will significantly alter the company's future business focus and funding requirements, shifting to Korro Bio's programs Overview This overview summarizes the company's strategic shifts, including the discontinuation of hearing programs, workforce reductions, accumulated deficit, and the proposed merger with Korro Bio - The company discontinued its FX-322 and FX-345 hearing development programs in February 2023 after the FX-322-208 study failed its primary endpoint[100] - Significant workforce reductions of approximately 55% were announced in February and May 2023 to align with business needs[101] - As of June 30, 2023, the company had an accumulated deficit of $292.0 million, having incurred significant operating losses since inception[103] - On July 14, 2023, the company entered into a Merger Agreement with Korro Bio, Inc., and following the merger, the combined company's business will be Korro Bio's[100][104] License and collaboration agreements This section details the termination of key license and collaboration agreements, including those with Astellas Pharma Inc., MIT, MEE, and CALIBR, impacting various development programs - The collaboration agreement with Astellas Pharma Inc. for FX-322 was terminated on April 14, 2023, with no associated payments or costs to the company[105] - The Exclusive Patent License Agreement with MIT for hearing loss treatment was terminated, effective July 6, 2023[106] - The Non-Exclusive Patent License Agreement with MEE for hearing loss treatment was terminated on April 4, 2023[107] - The license agreement with CALIBR for MS treatment was terminated on April 28, 2023[108] Components of our results of operations This section breaks down the key components influencing the company's financial results, including research and development, general and administrative, interest income/expense, and other income Research and development expenses This section defines R&D expenses and outlines future expectations following the merger, focusing on strategic alternatives for the MS Program - R&D expenses primarily consist of employee-related costs, third-party agreements (CROs, manufacturing), consultants, laboratory supplies, and intellectual property license payments[110] - Following the Merger, R&D expenses for the remainder of 2023 are expected to relate to pursuing strategic alternatives for the MS Program[111] General and administrative expenses This section details G&A expenses, encompassing salaries, stock-based compensation, legal, professional, investor relations, insurance, travel, and facility-related costs - G&A expenses include salaries and stock-based compensation for executive, finance, business development, and administrative functions, as well as legal, professional, investor relations, insurance, travel, and facility-related costs[112] Interest income This section clarifies that interest income is generated from the company's cash equivalents and marketable securities holdings - Interest income is earned on cash equivalents and marketable securities[113] Interest expense This section states that interest expense is solely derived from interest paid on the company's term loan - Interest expense consists of interest paid on the company's term loan[114] Other income, net This section defines other income, net, as including amortization and accretion income on investments, along with sublease income - Other income, net, includes amortization and accretion income on investments, as well as sublease income[115] Income taxes This section explains that income tax expense represents state taxes on interest income, with a full valuation allowance due to cumulative losses - The income tax expense represents state taxes on interest income earned by a subsidiary, with a full valuation allowance on deferred tax assets due to cumulative losses[116][117] Results of operations This section provides a comparative analysis of the company's financial performance for the three and six months ended June 30, 2023 and 2022 Comparison of three months ended June 30, 2023 and 2022 This section compares the company's financial performance, including operating expenses and net loss, for the three months ended June 30, 2023, versus 2022 Financial Performance (3 Months Ended June 30, in thousands) | Metric | 2023 | 2022 | Increase (Decrease) | | :-------------------------- | :----- | :----- | :------------------ | | Research and development | $4,594 | $13,273 | $(8,679) | | General and administrative | $7,237 | $8,000 | $(763) | | Total operating expenses | $11,831 | $21,273 | $(9,442) | | Net loss | $(10,796) | $(21,285) | $10,489 | - Interest expense decreased to $0 in 2023 from $(208) thousand in 2022 due to the loan prepayment in April 2023[128] - Other income (expense), net, improved by $921 thousand, turning from an expense of $(227) thousand in 2022 to income of $694 thousand in 2023, primarily due to sublease income[129] Comparison of six months ended June 30, 2023 and 2022 This section compares the company's financial performance, including operating expenses and net loss, for the six months ended June 30, 2023, versus 2022 Financial Performance (6 Months Ended June 30, in thousands) | Metric | 2023 | 2022 | Increase (Decrease) | | :-------------------------- | :----- | :----- | :------------------ | | Research and development | $15,949 | $27,054 | $(11,105) | | General and administrative | $16,393 | $17,477 | $(1,084) | | Total operating expenses | $32,342 | $44,531 | $(12,189) | | Net loss | $(30,339) | $(44,671) | $14,332 | - Interest income increased by $349 thousand to $869 thousand in 2023 from $520 thousand in 2022[138] - Other income (expense), net, improved by $1.7 million, turning from an expense of $(260) thousand in 2022 to income of $1,447 thousand in 2023, primarily due to sublease income[140] Liquidity and capital resources This section discusses the company's financial position, including accumulated deficit, cash holdings, debt prepayment, and capital preservation efforts through workforce reductions - The company has incurred significant operating losses and had an accumulated deficit of $292.0 million as of June 30, 2023[103][142] - Cash, cash equivalents, and marketable securities totaled $46.5 million as of June 30, 2023[143] - The remaining $11.7 million term loan was prepaid on April 3, 2023[144] - Workforce reductions in April 2022, February 2023 (55%), and May 2023 (55% of remaining personnel) were implemented to preserve capital[146][147][148] Cash flows This section analyzes the company's cash flow activities from operations, investing, and financing for the six months ended June 30, 2023 and 2022 Cash flows for the six months ended June 30, 2023 This section details cash flows for the six months ended June 30, 2023, highlighting operating cash usage, investing cash generation, and financing cash usage - Net cash used in operating activities was $22.6 million, a decrease from the prior year, primarily due to a $14.3 million decrease in net loss[151][152] - Net cash provided by investing activities was $24.7 million, primarily from $26.8 million in redemptions of marketable securities[154] - Net cash used in financing activities was $14.1 million, primarily due to term loan repayments[156] Cash flows for the six months ended June 30, 2022 This section details cash flows for the six months ended June 30, 2022, highlighting operating cash usage, investing cash usage, and financing cash generation - Net cash used in operating activities was $30.8 million, driven by a $44.7 million net loss[157] - Net cash used in investing activities was $6.6 million, mainly from $38.1 million in marketable securities purchases, partially offset by $31.5 million in redemptions[158] - Net cash provided by financing activities was $0.2 million, from common stock issuance and the Employee Stock Purchase Plan[159] Funding requirements This section states that the combined company's funding requirements post-merger will shift to Korro Bio's programs, with no further development for Frequency's candidates - Following the Merger, the combined company's funding requirements will reflect Korro Bio's product candidates and programs, with no further development expected for Frequency's product candidates[160] Critical accounting policies and use of estimates This section notes that financial statement preparation involves management estimates and assumptions, with no material changes to critical accounting policies during the period - The preparation of financial statements requires management to make estimates and assumptions that affect reported amounts[161] - There were no material changes to critical accounting policies during the six months ended June 30, 2023[162] Recent accounting pronouncements This section refers to Note 2 for a description of recent accounting pronouncements relevant to the company's financial statements - A description of recent accounting pronouncements is disclosed in Note 2 to the unaudited consolidated financial statements[163] Emerging growth company status This section highlights the company's status as an 'emerging growth company' and its election to use an extended transition period for new accounting standards - As an 'emerging growth company,' the company has elected to take advantage of an extended transition period for complying with new or revised accounting standards[164] Item 3. Quantitative and Qualitative Disclosures About Market Risk This item is not required for the company as it is currently considered a smaller reporting company - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[166] Item 4. Controls and Procedures Management, with the participation of the Chief Executive Officer and Vice President of Finance and Operations, evaluated the effectiveness of the company's disclosure controls and procedures as of June 30, 2023, concluding they were effective at a reasonable assurance level. There were no material changes in internal control over financial reporting during the period - The company's disclosure controls and procedures were evaluated as effective at the reasonable assurance level as of June 30, 2023[168] - There was no change in internal control over financial reporting that materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting during the period[169] PART II. OTHER INFORMATION Item 1. Legal Proceedings Information regarding legal proceedings is incorporated by reference from Note 15, 'Commitments and contingencies – Legal Contingencies,' of the financial statements - Legal proceedings information is detailed in Note 15, 'Commitments and contingencies – Legal Contingencies'[171] Item 1A. Risk Factors The risk factors are incorporated by reference from the company's Registration Statement on Form S-4 filed with the SEC on July 27, 2023 - The risk factors are incorporated by reference from the company's Registration Statement on Form S-4 filed with the SEC on July 27, 2023 (File No. 333-273490)[172] Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities The company completed its IPO in October 2019, raising approximately $79.7 million in net proceeds. There has been no material change in the expected use of these net proceeds - The company completed its IPO in October 2019, issuing 6,325,000 shares of common stock and receiving approximately $79.7 million in net proceeds[173] - There has been no material change in the expected use of the net proceeds from the IPO[174] Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities during the period - None[175] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not applicable[175] Item 5. Other Information The company is a smaller reporting company and is not required to provide certain information under Item 408(a) of Regulation S-K - As a smaller reporting company, the company is not required to provide the information otherwise required under Item 408(a) of Regulation S-K[176] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including the Agreement and Plan of Merger, organizational documents, various support agreements related to the merger, and certifications from executive officers - Exhibit 2.1 is the Agreement and Plan of Merger, dated July 14, 2023, by and among Frequency Therapeutics, Inc., Frequency Merger Sub, Inc., and Korro Bio, Inc[177] - Includes various Form of Support Agreements related to the merger with Korro Bio, Inc[177] - Includes Rule 13a‑14(a) / 15d‑14(a) Certifications from the Chief Executive Officer and Vice President of Finance and Operations[177] SIGNATURES This section confirms the official signing of the report by the President and Chief Executive Officer and the Vice President, Finance and Operations on August 10, 2023 - The report was signed on August 10, 2023, by David L. Lucchino, President and Chief Executive Officer, and Richard Mitrano, Vice President, Finance and Operations[183]