Financial Performance - The company reported a net loss of $37.2 million for the six months ended June 30, 2023, and an accumulated deficit of $202.0 million[125]. - The net loss for the three months ended June 30, 2023, was $14.7 million, a decrease of $3.4 million from a net loss of $18.1 million in the same period of 2022[146]. - Net cash used in operating activities for the six months ended June 30, 2023, was $31.6 million, a decrease from $33.6 million in the same period of 2022[162]. - Other income, net for the six months ended June 30, 2023, was $3.3 million, compared to $0.5 million for the same period in 2022, reflecting a significant increase[158]. - Interest and other income for the three months ended June 30, 2023, was $1.8 million, compared to $0.3 million in 2022, an increase of $1.5 million[146]. Cash and Funding - As of June 30, 2023, the company had net proceeds of $186.2 million from sales of convertible preferred stock and $137.2 million from its IPO[113]. - As of June 30, 2023, the company had cash and cash equivalents of $152.3 million, expected to fund operations for more than 12 months[129]. - The company had received net proceeds of $186.2 million from convertible preferred stock sales and $137.2 million from its IPO as of June 30, 2023[159]. - The company may need to obtain substantial additional funds to achieve its business objectives if it resumes development of pharmaceutical products[170]. Strategic Initiatives - A comprehensive review of strategic alternatives was announced in February 2023, including a potential merger or acquisition[115]. - On June 22, 2023, the company entered into a Merger Agreement with Tourmaline, subject to stockholder approval[118]. - The company plans to declare a cash dividend to pre-Merger stockholders not exceeding $67.5 million[121]. - In July 2023, the company sold certain clinical data and intellectual property related to FCR001 for approximately $2.2 million[122]. - In July 2023, the company entered into an asset purchase agreement with ImmunoFree, selling certain clinical data and intellectual property related to FCR001[173]. Expenses and Cost Management - Research and development expenses decreased to $4.1 million for the three months ended June 30, 2023, from $13.2 million in the same period of 2022, a reduction of $9.1 million[146]. - General and administrative expenses increased to $6.0 million for the three months ended June 30, 2023, compared to $5.2 million in 2022, an increase of $0.8 million[148]. - Restructuring costs for the three months ended June 30, 2023, amounted to $6.4 million, with $5.7 million attributed to severance and employee termination costs[150]. - Total operating expenses for the three months ended June 30, 2023, were $16.5 million, down from $18.4 million in 2022, a decrease of $1.9 million[146]. - Research and development expenses for the six months ended June 30, 2023, were $17.5 million, down from $27.4 million in 2022, a decrease of $9.9 million[153]. - General and administrative expenses for the six months ended June 30, 2023, increased to $12.2 million from $9.4 million in 2022, an increase of $2.8 million[156]. - Restructuring costs for the six months ended June 30, 2023, totaled $10.9 million, with no restructuring costs incurred in the same period of 2022[157]. - The company expects expenses to decrease in 2023 compared to 2022 due to the discontinuation of certain clinical trials and workforce reductions[168]. Company Status and Market Position - The company has not generated any revenue since its inception and does not expect to generate revenue from product sales in the future[132]. - The company has incurred significant operating losses since inception and does not expect to generate revenue from product sales for several years[159]. - The company remains an "emerging growth company" until it exceeds $1.235 billion in annual revenue or meets other specified criteria[184]. - The company qualifies as a "smaller reporting company" with a market value of stock held by non-affiliates below $700 million and annual revenue under $100 million[185]. Risk Factors - The company has incurred significant costs related to evaluating strategic alternatives and the Merger, which may impact available cash for operations[126]. - The company has minimal exposure to foreign currency risk due to short transaction durations[190]. - Inflation has not had a material effect on the company's financial condition or results of operations during the recent reporting periods[191]. - The company continues to monitor the impact of rising inflation on its business[191]. - The company does not currently have any off-balance sheet arrangements[186]. - The company has not experienced material changes in the fair market value of its interest-sensitive marketable securities with a 100 basis points increase in interest rates[189]. - The company has engaged in contracts with vendors in currencies other than the U.S. dollar but has had minimal exposure to fluctuations in foreign currency exchange rates[190].
TALARIS THERAPEU(TALS) - 2023 Q2 - Quarterly Report