In8bio, Inc S-1/A, filed Mar 31, 2021

In8bio, Inc. (INAB)

S-1/A 2021-03-31

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Title of each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price(1)(2)	Amount of Registration Fee(3)
Common Stock, $0.0001 par value per share	$69,000,000	$7,528

	Page
Prospectus Summary		1
Risk Factors		11
Special Note Regarding Forward-Looking Statements		61
Market and Industry Data		63
Use of Proceeds		64
Dividend Policy		66
Capitalization		67
Dilution		69
Management’s Discussion and Analysis of Financial Condition and Results of Operations		71
Business		81
Management		128
Executive and Director Compensation		134
Certain Relationships and Related Party Transactions		147
Principal Stockholders		151
Description of Capital Stock		153
Shares Eligible for Future Sale		158
Material U.S. Federal Income Tax Consequences for Non-U.S. Holders		160
Underwriting		164
Legal Matters		172
Experts		172
Where You Can Find Additional Information		172
Index to Financial Statements		F-1

	Years Ended December 31,
(in thousands, except share and per share data)	2019			2020
Statement of Operations Data:
Operating expenses:
Research and development		$	2,358		$	5,378
General and administrative			2,708			3,179
Loss on disposal of property and equipment			68			—
Total operating expenses			5,134			8,557
Loss from operations			(5,134)			(8,557)
Net loss		$	(5,134)		$	(8,557)
Net loss attributable to common stockholders(1)		$	(5,912)		$	(10,340)
Net loss per share attributable to common stockholders: basic and diluted		$	(1.85)		$	(3.02)
Weighted-average shares used to compute net loss per share attributable to common stockholders: basic and diluted			3,188,165			3,419,075
Pro forma net loss attributable to common stockholders(1)						(8,557)
Pro forma net loss per share attributable to common stockholders (unaudited): basic and diluted(1)					$	(0.91)
Weighted-average shares used to compute pro forma net loss per share attributable to common stockholders (unaudited): basic and diluted(1)						9,382,360

	As of December 31, 2020
(in thousands)	Actual			Pro Forma(1)			Pro Forma As Adjusted(2)(3)
				(unaudited)			(unaudited)
Balance Sheet Data:
Cash		$	17,994		$	17,994		$
Working capital(4)			15,572			15,572
Total assets			20,910			20,910
Preferred stock			34,900			—			—
Total stockholders’ (deficit) equity			(16,579)			18,321

	As of December 31, 2020
(in thousands, except share and per share amounts)	Actual			Pro Forma			Pro Forma As Adjusted(1)
Cash		$	17,994		$	17,994		$
Convertible preferred stock, Series A, par value, $0.0001 per share; 27,564,260 shares authorized, 9,993,727 shares issued and outstanding, actual; 27,564,260 shares authorized and no shares issued or outstanding, pro forma; no shares authorized, issued or outstanding, pro forma as adjusted		$	34,900		$	—
Stockholders’ (deficit) equity:
Preferred stock, par value $0.0001 per share; no shares authorized, issued and outstanding, actual; 10,000,000 shares authorized, no shares issued or outstanding, pro forma and pro forma as adjusted			—			—
Common stock, par value $0.0001 per share; 50,700,000 shares authorized, 3,764,488 shares issued and outstanding, actual; 50,700,000 shares authorized and 14,754,553 shares issued and outstanding, pro forma; 490,000,000 shares authorized and shares issued and outstanding, pro forma as adjusted			1			1
Additional paid-in capital			1,458			36,358
Accumulated deficit			(18,038)			(18,038)
Total stockholders’ (deficit) equity			(16,579)			18,321
Total capitalization		$	18,321		$	18,321		$

Assumed initial public offering price per share			$
Historical net tangible book deficit per share as of December 31, 2020	$	(5.05)
Pro forma increase in net tangible book value per share as of December 31, 2020 attributable to the pro forma transactions described above		6.13
Pro forma net tangible book value per share as of December 31, 2020		1.08
Increase in pro forma net tangible book value per share attributable to new investors participating in this offering
Pro forma as adjusted net tangible book value per share after this offering
Dilution per share to new investors participating in this offering			$

	Shares Purchased				Total Consideration					Average Price Per Share
	Number		Percent		Amount			Percent		Average Price Per Share
Existing stockholders		14,754,553		75.9%		$	35,559,158		32.2%		$	2.41
New investors
Total				%		$			%		$

	Year ended December 31,
	2019			2020			Change
				(in thousands)
Operating expenses:
Research and development		$	2,358		$	5,378		$	3,020
General and administrative			2,708			3,179			471
Loss on disposal of equipment			68			—			(68)
Total operating expenses			5,134			8,557			3,423
Loss from operations			(5,134)			(8,557)			(3,423)
Net loss		$	(5,134)		$	(8,557)		$	(3,423)

	Payments Due by Period
	Total			Less than 1 Year			1 to 3 Years			4 to 5 Years			More than 5 Years
	(in thousands)
Operating lease commitments.		$	2,266		$	832		$	1,157		$	277		$	—
Total		$	2,266		$	832		$	1,157		$	277		$	—

Grant Date	Number of Common Shares Subject to Options Granted		Exercise Price per Common Share			Estimated Per-Share Fair Value of Options			Estimated Fair Value per Common Share at Grant Date
February 3, 2020		1,825		$	1.10		$	0.96		$	1.10
May 5, 2020		28,287		$	1.23		$	0.96		$	1.23
October 5, 2020		896,628		$	6.74		$	4.79		$	6.74
October 15, 2020		3,066		$	6.74		$	4.79		$	6.74
February 1, 2021		305,132		$	5.36		$	4.02		$	5.36

NAME	AGE		POSITION(S)
Executive Officers
William Ho		45	President, Chief Executive Officer and Director
Lawrence Lamb, Ph.D.		67	Executive Vice President and Chief Scientific Officer
Patrick McCall		38	Chief Financial Officer
Kate Rochlin, Ph.D.		40	Vice President, Operations and Innovation
Melissa Beelen		53	Vice President, Clinical Operations
Non-Employee Directors
Alan S. Roemer(1)(2)		51	Chairman
Peter Brandt(1)(3)		63	Director
Thomas Cirrito, Ph.D.(1)(2)(3)		48	Director
Travis Whitfill(2)(3)		31	Director

Name and Principal Position	Year		Salary ($)(1)		Bonus ($)		Option Awards ($)(3)		Non-Equity Incentive Plan Compensation ($)(4)		Total ($)
William Ho		2020		279,167		150,000(2)		874,540		144,000		1,447,707
President, Chief Executive Officer and former		2019		213,505		—		—		—		213,505
Chief Financial Officer
Lawrence Lamb, Ph.D.		2020		245,000		—		1,311,810		120,000		1,676,810
Executive Vice President and Chief Scientific		2019		240,000		—		112,935		—		352,935
Officer
Melissa Beelen		2020		212,333		—		297,725		65,000		570,058
Vice President of Clinical Operations		2019		156,000		—		30,359		41,600		227,659

	Option Awards
Name and Principal Position	Grant Date	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Equity incentive plan awards: Number of securities underlying unexercised unearned options (#)		Option Exercise Price ($)			Option Expiration Date
William Ho	October 5, 2020		—		182,500(1)		—		$	6.74	October 4, 2030
President, Chief Executive Officer and former Chief Financial Officer
Lawrence Lamb, Ph.D.	November 12, 2018		48,665		6,085(2)		—		$	1.07	November 11, 2028
Executive Vice President and Chief Scientific Officer	March 12, 2019		28,216		30,671(3)		—		$	1.07	March 11, 2029
	March 12, 2019		—		22,082(4)		66,248(4)		$	1.07	March 11, 2029
	October 5, 2020		—		273,750(5)		—		$	6.74	October 4, 2030
Melissa Beelen	April 17, 2019		16,326		22,858(6)		—		$	1.07	April 16, 2029
Vice President of Clinical Operations	May 5, 2020		—		13,140(7)		—		$	1.23	May 4, 2030
	May 5, 2020		—		—		5,110(8)		$	1.23	May 4, 2030
	October 5, 2020		—		57,434(9)		—		$	6.74	October 4, 2030

Position	Annual Service Retainer			Chairperson Additional Retainer
Board of Directors		$	35,000		$	65,000
Audit Committee			7,500			15,000
Compensation Committee			5,000			10,000
Nominating and Corporate Governance Committee			4,000			8,000

Name	Fees Earned or Paid in Cash ($)		Option Awards(1)(4) ($)		Total ($)
Peter Brandt		—		203,848		203,848
Thomas Cirrito, Ph.D.		—		218,544		218,544
Alan S. Roemer		30,769(2)		1,081,960(3)		1,112,729
Travis Whitfill		—		10,815		10,815

	Year ended December 31,
	2019			2020			Change
				(in thousands)
Direct research and development expenses:
INB-100		$	—		$	706		$	706
INB-200			—			689			689
Unallocated expenses
Preclinical			595			1,319			724
Personnel expenses(1)			1,144			1,687			543
Facility related and other			619			977			358
Total research and development expenses		$	2,358		$	5,378		$	3,020

	Year ended December 31,
	2019			2020
	(in thousands)
Net cash used in operating activities		$	(4,801)		$	(7,133)
Net cash provided by investing activities			356			—
Net cash provided by financing activities			65			24,517
Net (decrease) increase in cash and restricted cash		$	(4,380)		$	17,384

Name	Series A Preferred Stock (#)		Warrants to Purchase Series A Preferred Stock (#)(3)		Cancellation of Indebtedness (2018 Note Conversion($)		Cash Purchase Price of Series A Preferred Stock ($)		Aggregate Purchase Price ($)
Entities affiliated with Bios Equity Partners, L.P.(1)		5,861,427		163,049		1,752,744		19,250,000		21,002,744
Entities affiliated with Emily Fairbairn(2)		3,005,920		25,195		270,850		10,500,000		10,770,850

	Number of Shares Beneficially Owned		Percentage of Shares Beneficially Owned
	Number of Shares Beneficially Owned		Before Offering	After Offering
Greater than 5% Stockholders:
Entities affiliated with Bios Equity Partners, L.P.(1)		6,625,102	44.9%
Entities affiliated with Emily Fairbairn(2)		3,341,527	22.7%
Directors and Named Executive Officers:
William Ho(3)		2,544,929	17.2%
Lawrence Lamb, Ph.D.(4)		185,116	1.2%
Melissa Beelen(5)		19,592	*
Peter Brandt(6)		202,570	1.4%
Thomas Cirrito, Ph.D.(7)		93,379	*
Alan S. Roemer(8)		67,320	*
Travis Whitfill(9)		12,775	*
All current executive officers and directors as a group (9 persons)(10)		3,125,681	20.8%

Name	Outstanding Option Awards
Peter Brandt		72,221
Thomas Cirrito, Ph.D.		76,650
Travis Whitfill		12,775
Alan S. Roemer		225,879

Underwriters			Number of Shares
Cowen and Company, LLC
Stifel, Nicolaus & Company, Incorporated
Mizuho Securities USA LLC
Total

	Page
Audited Financial Statements for the Years Ended December 31, 2019 and 2020
Report of Independent Registered Public Accounting Firm		F-2
Balance Sheets		F-3
Statements of Operations		F-4
Statements of Changes in Convertible Preferred Stock and Stockholders’ Deficit		F-5
Statements of Cash Flows		F-6
Notes to Financial Statements		F-7

	Convertible Preferred Stock					Common Stock					Additional Paid- in-Capital			Accumulated Deficit			Total
	Series A					Class A
	Shares		Amount			Shares		Amount
Balance at January 1, 2019		2,713,980		$	8,896		3,174,751		$	1		$	97		$	(4,347)		$	(4,249)
Exercise of common stock – Class A		—			—		60,920			—			65			—			65
Stock-based compensation expense		—			—		—			—			76			—			76
Net loss		—			—		—			—			—			(5,134)			(5,134)
Balance at December 31, 2019		2,713,980			8,896		3,235,671			1			238			(9,481)			(9,242)
Issuance of common stock – Class A		—			—		227,010			—			499			—			499
Issuance of common stock – Class A in relation to license agreement		—			—		89,629			—			103			—			103
Issuance of common stock – Class A in relation to legal settlement		—			—		200,750			—			248			—			248
Exercise of common stock option – Class A		—			—		11,428			—			13			—			13
Issuance of convertible preferred stock – Series A, net of $81 issuance cost		7,048,351			25,175		—			—			—			—			—
Exercise of warrants into convertible preferred stock – Series A		231,396			829		—			—			—			—			—
Stock-based compensation expense		—			—		—			—			357			—			357
Net loss		—			—		—			—			—			(8,557)			(8,557)
Balance at December 31, 2020		9,993,727		$	34,900		3,764,488		$	1		$	1,458		$	(18,038)		$	(16,579)

			Estimated Useful Life
Computer equipment			3 years
Laboratory equipment			3-5 years

Description	December 31, 2019			Quoted prices active markets for identical assets (Level 1)			Significant other observable inputs (Level 2)			Significant other observable inputs (Level 3)
Liability
Warrant liability		$	829		$	—		$	—		$	829
Total financial liabilities		$	829		$	—		$	—		$	829

	December 31, 2019			December 31, 2020
Machinery and equipment		$	443		$	443
Less accumulated depreciation			(169)			(257)
Property and equipment, net		$	274		$	186

	December 31, 2019			December 31, 2020
Accrued offering costs		$	—		$	876
Accrued clinical trials			—			376
Accrued compensation			87			400
Accrued other			—			126
Total accrued expenses and other current liabilities		$	87		$	1,778

	Year of Maturity		Interest Rate		Outstanding Principal
Loan payable		2022		1.00%		$	174
Total loan payable							174

	Options		Weighted- average exercise price			Weighted- average contractual term (in years)		Aggregate Intrinsic Value
Outstanding as of January 1, 2019		237,773		$	1.07		9.86		$	—
Granted		287,788		$	1.08		9.32
Exercised		(60,921)		$	1.08		0.91
Cancelled		(102,029)		$	1.08		9.33
Outstanding as of December 31, 2019		362,611		$	1.08		9.22		$	5
Granted		929,806		$	6.56		9.74

	December 31, 2019	December 31, 2020
Expected dividend yield	—	—
Expected volatility	81.9% – 90.1%	83.3% – 90.9%
Risk-free interest rate	1.6% – 2.5%	0.3% – 1.4%
Expected average life (in years)	5.98 – 8.97	4.25 – 9.34

	December 31, 2019			December 31, 2020
Current provision (benefit):
Federal		$	—		$	—
State			—			—
Total			—			—
Deferred provision (benefit):
Federal			(845)			(1,569)
State			(600)			(1,116)
Total			(1,445)			(2,685)
Change in valuation allowance			1,445			2,685
Income tax provision (benefit)		$	—		$	—

	December 31, 2019		December 31, 2020
U.S Federal statutory rate		21%		21%
State taxes, net of Federal Benefit		10%		10%
Non-deductible expenses		(1)%		0%
Change in valuation allowance		(30)%		(31)%
Effective rate		0%		0%

	December 31, 2019			December 31, 2020
Deferred tax assets:
Stock-based compensation		$	14		$	155
Net operating loss carryforwards and alternative minimum tax credits			2,089			4,667
Total deferred tax assets			2,103			4,822
Deferred tax liabilities:
Property and equipment			(5)			(38)
Total deferred tax liabilities			(5)			(38)
Valuation allowance			(2,098)			(4,784)
Deferred tax assets (liabilities), net		$	—		$	—

	December 31, 2019			December 31, 2020
Numerator:
Net loss		$	(5,134)		$	(8,557)
Less: Accruals of dividends of preferred stock			(778)			(1,783)
Net loss attributable to common stockholders – basic and diluted		$	(5,912)		$	(10,340)
Denominator:
Weighted-average common stock outstanding			3,188,165			3,419,075
Net loss per share attributable to common stockholders – basic and diluted		$	(1.85)		$	(3.02)

	December 31, 2019		December 31, 2020
Convertible preferred stock on an if converted basis		2,999,149		9,993,727
Stock options to purchase common stock		362,611		1,247,158
Warrants to purchase preferred stock		231,396		—

	Amounts
2021		$	832
2022			562
2023			365
2024			230
2025			236
Thereafter			41
Total minimum payments		$	2,266

Item	Amount
SEC registration fee		$	7,528
FINRA filing fee			14,246
Nasdaq listing fee			150,000
Printing expenses			100,000
Legal fees and expenses			1,500,000
Accounting fees and expenses			200,000
Miscellaneous expenses			228,226
Total		$	2,200,000

Exhibit Number		Description
	1.1*	Form of Underwriting Agreement.
	3.1#	Amended and Restated Certificate of Incorporation, as currently in effect.
	3.2#	Form of Amended and Restated Certificate of Incorporation, to be effective immediately after to the completion of this offering.
	3.3#	Bylaws, as currently in effect.
	3.4#	Form of Amended and Restated Bylaws, to be effective immediately prior to the completion of this offering.
	4.1#	Form of Common Stock Certificate.
	4.2#	Investors’ Rights Agreement, by and among the Registrant and certain of its stockholders, dated May 7, 2018.
	5.1#	Opinion of Cooley LLP.
	10.1+#	Form of Indemnity Agreement by and between the Registrant and its directors and executive officers.
	10.2+#	2018 Equity Incentive Plan.
	10.3+#	Form of Stock Option Grant Notice and Option Agreement under 2018 Equity Incentive Plan.
	10.4+#	2020 Equity Incentive Plan.
	10.5+#	Forms of Option Grant Notice and Option Agreement under 2020 Equity Incentive Plan.

Exhibit Number		Description
	10.6+*	Form of Restricted Stock Unit Grant Notice and Unit Award Agreement under 2020 Equity Incentive Plan.
	10.7+#	2020 Employee Stock Purchase Plan.
	10.8†#	Exclusive License Agreement, dated March 10, 2016, between the Registrant and The UAB Research Foundation, as amended.
	10.9†#	First Amendment to Exclusive License Agreement, dated December 14, 2016, between the UAB Research Foundation and the Registrant.
	10.10†#	Second Amendment to Exclusive License Agreement, dated December 14, 2016, between the UAB Research Foundation and the Registrant.
	10.11†#	Third Amendment to Exclusive License Agreement, dated December 14, 2016, between the UAB Research Foundation and the Registrant.
	10.12†#	Fourth Amendment to Exclusive License Agreement, dated December 14, 2016, between the UAB Research Foundation and the Registrant.
	10.13†#	Exclusive License Agreement, dated June 10, 2016, between Emory University, Children’s Healthcare of Atlanta, Inc., and UAB Research Foundation and the Registrant.
	10.14†#	First Amendment to Exclusive License Agreement between Emory University, Children’s Healthcare of Atlanta, Inc., The UAB Research Foundation and the Registrant.
	10.15†#	Second Amendment to Exclusive License Agreement between Emory University, Children’s Healthcare of Atlanta, Inc., The UAB Research Foundation and the Registrant.
	10.16+*	Amended and Restated Employment Agreement, between Registrant and William Ho, dated December 1, 2020.
	10.17+*	Amended and Restated Employment Agreement between Registrant and Lawrence Lamb, dated December 31, 2020.
	10.18+*	Offer Letter to Melissa Beelen, dated December 21, 2020.
	10.19+#	Non-Employee Director Compensation Policy.
	23.1*	Consent of CohnReznick LLP, an Independent Registered Public Accounting Firm.
	23.2#	Consent of Cooley LLP (included in Exhibit 5.1).
	24.1#	Power of Attorney (included on the signature page to this registration statement).