Instil Bio, Inc 10-Q/A for FY2023 Q3

Instil Bio, Inc. (TIL)

10-Q/A 2023-11-13 For: 2023-09-30

Added on April 07, 2026

About this 10-Q/A

Instil Bio, Inc filed this 10-Q/A on November 13, 2023, covering the quarter ended September 30, 2023 (FY2023 Q3).

Headline figures

Quarter ended September 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $67.43M; compared with a net loss of $56.22M a year earlier
Diluted EPS: -$0.52; compared with -$0.43 a year earlier

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Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.000001 par value per share	TIL	The Nasdaq Stock Market LLC


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒


Class of Common Stock			Outstanding at
130,079,097 shares of Common Stock, $0.000001 par value per share			November 9, 2023


			Page
Part I. Financial Information			2
Item 1. Financial Statements (Unaudited)			2
Condensed Consolidated Balance Sheets			2
Condensed Consolidated Statements of Operations and Comprehensive Loss			3
Condensed Consolidated Statements of Stockholders’ Equity			4
Condensed Consolidated Statements of Cash Flows			6
Notes to Condensed Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			19
Item 3. Quantitative and Qualitative Disclosures About Market Risk			31
Item 4. Controls and Procedures			31
Part II. Other Information			34
Item 1. Legal Proceedings			34
Item 1A. Risk Factors			34
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			96
Item 3. Defaults Upon Senior Securities			96
Item 4. Mine Safety Disclosures			96
Item 5. Other Information			97
Item 6. Exhibits			97
Signatures			98


	September 30, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	9,133	$	43,716
Marketable securities	174,315		217,204
Prepaid expenses and other current assets	10,582		8,458
Assets held for sale	1,600		—
Total current assets	195,630		269,378
Property, plant and equipment, net	139,435		196,880
Operating lease right-of-use assets	2,672		12,457
Other long-term assets	2,535		3,413
Total assets	$	340,272	$	482,128
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,645	$	2,359
Accrued expenses and other current liabilities	11,822		30,069
Contingent consideration, current portion	—		360
Total current liabilities	13,467		32,788
Contingent consideration, net of current portion	8,202		7,882
Operating lease liabilities, non-current	3,286		5,171
Loan payable	81,178		72,350
Other long-term liabilities	115		332
Total liabilities	106,248		118,523
Commitments and contingencies (Note 6)
Stockholders’ equity:
Preferred stock, par value $0.000001 per share; 10,000,000 shares authorized; zero shares issued and outstanding as of September 30, 2023, and December 31, 2022	—		—
Common stock, par value $0.000001 per share; 300,000,000 shares authorized; 130,079,097 shares issued and outstanding as of September 30, 2023, and December 31, 2022	—		—
Additional paid-in capital	802,605		788,992
Accumulated other comprehensive loss	(525)		(493)
Accumulated deficit	(568,056)		(424,894)
Total stockholders’ equity	234,024		363,605
Total liabilities and stockholders’ equity	$	340,272	$	482,128


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Operating expenses:
Research and development	$	8,492	$	39,660	$	37,621	$	120,334
General and administrative	11,941		16,989		36,681		49,325
Restructuring and impairment charges	46,283		—		71,847		—
Total operating expenses	66,716		56,649		146,149		169,659
Loss from operations	(66,716)		(56,649)		(146,149)		(169,659)
Interest income	2,313		1,276		6,671		1,859
Interest expense	(2,003)		(807)		(3,229)		(1,138)
Other expense, net	(1,026)		(415)		(455)		(1,863)
Loss before income tax benefit	(67,432)		(56,595)		(143,162)		(170,801)
Income tax benefit	—		371		—		1,468
Net loss	(67,432)		(56,224)		(143,162)		(169,333)
Other comprehensive loss:
Foreign currency translation	231		391		(210)		580
Unrealized gain (loss) on available-for-sale securities, net	39		(169)		178		(828)
Net comprehensive loss	$	(67,162)	$	(56,002)	$	(143,194)	$	(169,581)
Net loss per share, basic and diluted	$	(0.52)	$	(0.43)	$	(1.10)	$	(1.31)
Weighted-average shares used in computing net loss per share, basic and diluted	130,079,097		129,680,217		130,079,097		129,391,225


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount				(Loss) Income
Balance - December 31, 2022	130,079,097	$	—	$	788,992	$	(493)	$	(424,894)	$	363,605
Stock-based compensation	—	—		4,530		—		—		4,530
Net loss	—	—		—		—		(57,068)		(57,068)
Other comprehensive income	—	—		—		87		—		87
Balance - March 31, 2023	130,079,097	—		793,522		(406)		(481,962)		311,154
Stock-based compensation	—	—		4,413		—		—		4,413
Net loss	—	—		—		—		(18,662)		(18,662)
Other comprehensive loss	—	—		—		(389)		—		(389)
Balance - June 30, 2023	130,079,097	—		797,935		(795)		(500,624)		296,516
Stock-based compensation	—	—		4,670		—		—		4,670
Net loss	—	—		—		—		(67,432)		(67,432)
Other comprehensive income	—	—		—		270		—		270
Balance - September 30, 2023	130,079,097	$	—	$	802,605	$	(525)	$	(568,056)	$	234,024


	Nine Months Ended September 30,
	2023		2022
Cash flows from operating activities:
Net loss	$	(143,162)	$	(169,333)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	13,613		23,798
Non-cash lease expense	610		1,292
Foreign exchange remeasurement (gain) loss	(147)		2,768
Impairment of fixed assets	60,088		—
Impairment of right-of-use assets	7,724		—
Change in fair value of contingent consideration	(41)		(691)
Depreciation	3,720		3,888
Accretion on invested securities	(4,716)		(979)
Non-cash interest expense	762		596
Change in fair value of derivative instrument	528		(810)
Loss on disposals of property and equipment	338		240
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(1,082)		(2,168)
Other long-term assets	275		(2,076)
Accounts payable	(652)		683
Operating lease liabilities	(1,198)		(225)
Long term liabilities	(12)		—
Accrued restructuring costs	(2,246)		—
Accrued expenses and other current liabilities	(3,050)		(171)
Net cash used in operating activities	(68,648)		(143,188)
Cash flows from investing activities:
Purchase of marketable securities	(250,517)		(556,510)
Maturities of marketable securities	298,300		711,000
Purchases of property, plant and equipment	(20,605)		(71,577)
Purchase of derivative financial instrument	—		(1,174)
Net cash provided by investing activities	27,178		81,739
Cash flows from financing activities:
Principal payments on loan	(587)		—
Proceeds from exercise of stock options	—		1,172
Proceeds from note payable	8,669		64,512
Net cash provided by financing activities	8,082		65,684
Net (decrease) increase in cash, cash equivalents and restricted cash	(33,388)		4,235
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(182)		(707)
Cash, cash equivalents and restricted cash—beginning of period	43,716		38,090
Cash, cash equivalents and restricted cash—end of period	$	10,146	$	41,618
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized	$	4,908	$	554
Supplemental disclosure of noncash information:
Purchases of property, plant and equipment in accounts payable and accrued expenses and other current liabilities	$	67	$	15,033


	September 30, 2023		December 31, 2022
Land	$	31,243	$	31,243
Laboratory equipment	7,936		19,050
Buildings	23,198		32,778
Office and computer equipment	818		4,969
Leasehold improvements	1,365		4,340
Manufacturing equipment	1,933		8,803
Vehicles	—		64
Construction work-in-progress	79,235		104,117
Total property, plant and equipment, gross	145,728		205,364
Less: accumulated depreciation	(6,293)		(8,484)
Total property, plant and equipment, net	$	139,435	$	196,880


	September 30, 2023		December 31, 2022
Accrued construction costs	$	60	$	12,359
Accrued compensation and benefits	3,294		3,273
Accrued operational expenses	1,387		2,203
Accrued restructuring costs	3,188		5,434
Accrued research, development and clinical trial expenses	1,773		3,827
Operating lease liabilities, current	1,796		2,381
Other current liabilities	324		592
Total accrued expenses and other current liabilities	$	11,822	$	30,069


	As of September 30, 2023
	Level 1		Level 2		Level 3		Total
	(In thousands)
Financial Assets
Money market funds	$	6,862	$	—	$	—	$	6,862
U.S. Treasury bills	—		174,315		—		174,315
Derivative financial instrument	—		1,674		—		1,674
Total	$	6,862	$	175,989	$	—	$	182,851
Financial Liabilities
Contingent consideration	$	—	$	—	$	8,202	$	8,202

	As of December 31, 2022
	Level 1		Level 2		Level 3		Total
	(In thousands)
Financial Assets
Money market funds	$	22,830	$	—	$	—	$	22,830
U.S. Treasury bills	—		217,204		—		217,204
Derivative financial instrument	—		2,202		—		2,202
Total	$	22,830	$	219,406	$	—	$	242,236
Financial Liabilities
Contingent consideration	$	—	$	—	$	8,242	$	8,242


	September 30, 2023
	Maturity	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
U.S. Treasury bills	Less than one year	$	174,602	$	—	$	(287)	$	174,315


	Three Months Ended September 30, 2023		Nine Months Ended September 30, 2023
Operating lease cost	$	351	$	1,867
Variable lease cost	234		906
Total lease cost	$	585	$	2,773


	As of September 30, 2023
Principal amount	$	82,838
Unamortized debt issuance cost	(1,660)
Net carrying amount	$	81,178


	Employee Benefits		Contract Terminations		Total
Restructuring liability as of December 31, 2022	$	2,995	$	2,439	$	5,434
Payments	(4,543)		(893)		(5,436)
Adjustments	1,699		1,491		3,190
Total restructuring liability as of September 30, 2023	$	151	$	3,037	$	3,188


	INSTIL BIO, INC.

November 13, 2023	By:	/s/ Sandeep Laumas
		Sandeep Laumas Chief Financial Officer and Chief Business Officer (On behalf of the registrant and in his capacity as Principal Financial Officer and Principal Accounting Officer)


	Three Months Ended September 30, 2023		Nine Months Ended September 30, 2023
Cash paid for operating lease liabilities	$	491	$	1,806


	As of September 30, 2023
Weighted-average remaining lease term (in years)	2.8
Weighted-average discount rate	6.75	%


	As of September 30, 2023
2023 (remaining three months)	$	564
2024	1,978
2025	1,810
2026	1,218
Total future lease payments	5,570
Less: imputed interest	488
Total lease liability balance	5,082
Less: current portion of operating lease liabilities	1,796
Total operating lease liabilities, non-current	$	3,286


	Three Months Ended September 30, 2023		Nine Months Ended September 30, 2023
Asset impairment for leasehold improvements	$	—	$	2,644
One-time employee termination benefits	41		1,816
Building and construction work in progress impairment	41,542		41,542
Contract terminations	—		1,888
Right-of-use asset impairment	128		7,724
Impairment of long-lived assets held for sale	4,572		16,233
Total restructuring and impairment charges	$	46,283	$	71,847


	Three Months Ended September 30,				Change
	2023		2022		$
Operating expenses:
Research and development	$	8,492	$	39,660	$	(31,168)
General and administrative	11,941		16,989		(5,048)
Restructuring and impairment charges	46,283		—		46,283
Total operating expenses	66,716		56,649		10,067
Loss from operations	(66,716)		(56,649)		(10,067)
Interest income	2,313		1,276		1,037
Interest expense	(2,003)		(807)		(1,196)
Other expense, net	(1,026)		(415)		(611)
Loss before income tax benefit	(67,432)		(56,595)		(10,837)
Income tax benefit	—		371		(371)
Net loss	$	(67,432)	$	(56,224)	$	(11,208)


Exhibit Number						Description of Exhibit
3.1						Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-40215), filed with the SEC on March 23, 2021).
3.2						Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 001-40215), filed with the SEC on March 23, 2021).
4.1						Second Amended and Restated Investors’ Rights Agreement, by and among the Company and certain of its stockholders, dated December 30, 2020 (incorporated herein by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1 (File No. 333-253620), filed with the SEC on February 26, 2021).
31.1*						Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*						Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*#						Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*#						Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101						The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations and Comprehensive Loss, (iii) the Condensed Consolidated Statements of Stockholders’ Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) Notes to the Condensed Consolidated Financial Statements.
104						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)


1.			I have reviewed this Quarterly Report on Form 10-Q of Instil Bio, Inc.;


2.			Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.			Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.			The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


			(a)			Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


			(b)			Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


			(c)			Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


			(d)			Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


			(a)			All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and


			(b)			Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.




/s/ Bronson Crouch
Bronson Crouch
Chief Executive Officer (Principal Executive Officer)




/s/ Sandeep Laumas
Sandeep Laumas
Chief Financial Officer (Principal Financial Officer)


			1.			The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended (the “Exchange Act”); and


			2.			The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.