Tourmaline Bio(TRML) - 2023 Q3 - Quarterly Report

Merger and Corporate Changes - On October 19, 2023, Tourmaline Bio, Inc. completed a merger with Legacy Tourmaline, transitioning its business focus to developing transformative medicines for immune diseases [141]. - Following the merger, Talaris' common stock underwent a 1-for-10 reverse stock split, changing its ticker symbol from "TALS" to "TRML" on October 20, 2023 [142][145]. - The merger resulted in the issuance of approximately 15,877,090 shares of common stock to Legacy Tourmaline's stockholders based on an exchange ratio of 0.7977 [143]. - The company declared a special cash dividend of $64.7 million to pre-merger stockholders before the merger took effect [153]. Financial Performance - Prior to the merger, Talaris incurred a net loss of $7.0 million for the three months ended September 30, 2023, compared to a net loss of $19.0 million for the same period in 2022, reflecting a decrease of $12.0 million [164]. - General and administrative expenses increased to $9.1 million for the three months ended September 30, 2023, up from $4.8 million in the same period of 2022, representing a $4.3 million increase [168]. - Total operating expenses for the nine months ended September 30, 2023, were $50.1 million, a decrease of $6.6 million from $56.7 million in the same period of 2022 [172]. - Other income, net for the three months ended September 30, 2023, was $1.9 million, compared to $0.8 million in the same period of 2022, reflecting an increase of $1.1 million [170]. Research and Development - Research and development expenses for the three months ended September 30, 2023, were $0.3 million, a significant decrease of $14.7 million from $15.0 million in the same period of 2022 [165]. - Research and development expenses decreased to $17.8 million for the nine months ended September 30, 2023, down from $42.4 million in the same period of 2022, a reduction of $24.6 million [173]. - The company has estimated accrued research and development expenses based on contracts and services performed, which may vary from actual costs [198]. Cash and Capital Requirements - The company had approximately $67.1 million in cash and cash equivalents and $79.9 million in marketable securities as of September 30, 2023 [156]. - The company expects to need additional capital to fund operations and product development, as it has not generated any revenue from product sales [189]. - The company requires substantial additional capital to complete the development of TOUR006 and future product candidates, and plans to raise this capital through private or public equity or debt financings [190]. - The company had net proceeds of $186.2 million from convertible preferred stock sales and $137.2 million from its IPO through September 30, 2023 [177]. - Net cash used in operating activities for the nine months ended September 30, 2023, was $39.1 million, an improvement of $7.9 million compared to $47.0 million in the same period of 2022 [183]. - Investing activities provided $92.3 million of cash during the nine months ended September 30, 2023, primarily from marketable securities maturities [186]. Restructuring and Workforce Changes - The company implemented a restructuring plan that reduced its workforce by approximately 95% as of June 30, 2023, to extend resources and focus on core operations [152]. - Restructuring costs for the three months ended September 30, 2023, included $0.1 million in employee termination costs, while no restructuring costs were incurred in the same period of 2022 [169]. Company Status and Compliance - The company remains an emerging growth company and a smaller reporting company, with annual revenue less than $100 million and market value of stock held by non-affiliates below $700 million [205][206]. - The company may continue to rely on exemptions from certain disclosure requirements as a smaller reporting company [206]. - Recently issued accounting pronouncements that may impact the company's financial position are disclosed in the financial statements [207]. - The company is not required to provide certain market risk disclosures due to its status as a smaller reporting company [208].