tcrr-10q_20200630.htm
0001750019 --12-31 Non-accelerated Filer Q2 false 0.1615 0.1615 P4Y P6M P1Y P8Y10M24D P8Y4M24D P6Y1M6D P5Y10M24D 0001750019 2020-01-01 2020-06-30 xbrli:shares 0001750019 2020-08-03 iso4217:USD 0001750019 2020-06-30 0001750019 2019-12-31 iso4217:USD xbrli:shares 0001750019 2020-04-01 2020-06-30 0001750019 2019-04-01 2019-06-30 0001750019 2019-01-01 2019-06-30 0001750019 us-gaap:CommonStockMember 2019-12-31 0001750019 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001750019 us-gaap:RetainedEarningsMember 2019-12-31 0001750019 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0001750019 us-gaap:CommonStockMember 2020-01-01 2020-03-31 0001750019 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0001750019 2020-01-01 2020-03-31 0001750019 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-03-31 0001750019 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001750019 us-gaap:CommonStockMember 2020-03-31 0001750019 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001750019 us-gaap:RetainedEarningsMember 2020-03-31 0001750019 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0001750019 2020-03-31 0001750019 us-gaap:CommonStockMember 2020-04-01 2020-06-30 0001750019 us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-06-30 0001750019 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-04-01 2020-06-30 0001750019 us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0001750019 us-gaap:CommonStockMember 2020-06-30 0001750019 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001750019 us-gaap:RetainedEarningsMember 2020-06-30 0001750019 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-06-30 0001750019 us-gaap:SeriesAPreferredStockMember 2018-12-31 0001750019 us-gaap:SeriesBPreferredStockMember 2018-12-31 0001750019 us-gaap:SeriesAPreferredStockMember 2019-01-01 2019-03-31 0001750019 us-gaap:SeriesBPreferredStockMember 2019-01-01 2019-03-31 0001750019 us-gaap:CommonStockMember 2018-12-31 0001750019 us-gaap:RetainedEarningsMember 2018-12-31 0001750019 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001750019 2018-12-31 0001750019 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0001750019 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0001750019 2019-01-01 2019-03-31 0001750019 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0001750019 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0001750019 us-gaap:CommonStockMember 2019-03-31 0001750019 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0001750019 us-gaap:RetainedEarningsMember 2019-03-31 0001750019 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0001750019 2019-03-31 0001750019 us-gaap:CommonStockMember 2019-04-01 2019-06-30 0001750019 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0001750019 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0001750019 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0001750019 us-gaap:CommonStockMember 2019-06-30 0001750019 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0001750019 us-gaap:RetainedEarningsMember 2019-06-30 0001750019 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0001750019 2019-06-30 0001750019 us-gaap:IPOMember 2019-02-14 2019-02-14 0001750019 us-gaap:IPOMember 2019-02-14 0001750019 us-gaap:AdditionalPaidInCapitalMember us-gaap:IPOMember 2019-02-14 2019-02-14 0001750019 us-gaap:CommonStockMember us-gaap:IPOMember 2019-02-14 2019-02-14 xbrli:pure 0001750019 2019-02-01 2019-02-01 0001750019 2020-03-06 2020-03-06 0001750019 tcrr:ATMProgramMember 2020-03-06 2020-03-06 0001750019 tcrr:ATMProgramMember 2020-01-01 2020-06-30 0001750019 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-06-30 0001750019 us-gaap:EmployeeStockOptionMember 2019-01-01 2019-06-30 0001750019 us-gaap:WarrantMember 2020-01-01 2020-06-30 0001750019 us-gaap:WarrantMember 2019-01-01 2019-06-30 0001750019 us-gaap:EmployeeStockMember 2020-01-01 2020-06-30 0001750019 us-gaap:EmployeeStockMember 2019-01-01 2019-06-30 0001750019 us-gaap:RestrictedStockMember 2020-01-01 2020-06-30 0001750019 us-gaap:RestrictedStockMember 2019-01-01 2019-06-30 0001750019 us-gaap:CorporateBondSecuritiesMember 2020-06-30 0001750019 us-gaap:CorporateBondSecuritiesMember 2019-12-31 0001750019 us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001750019 us-gaap:FairValueInputsLevel1Member us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001750019 us-gaap:FairValueInputsLevel2Member us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001750019 us-gaap:FairValueInputsLevel3Member us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001750019 us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001750019 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001750019 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001750019 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001750019 us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001750019 us-gaap:FairValueInputsLevel1Member us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001750019 us-gaap:FairValueInputsLevel2Member us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001750019 us-gaap:FairValueInputsLevel3Member us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001750019 us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001750019 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001750019 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001750019 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001750019 tcrr:LaboratoryEquipmentMember 2020-06-30 0001750019 tcrr:LaboratoryEquipmentMember 2019-12-31 0001750019 us-gaap:ComputerEquipmentMember 2020-06-30 0001750019 us-gaap:ComputerEquipmentMember 2019-12-31 0001750019 us-gaap:FurnitureAndFixturesMember 2020-06-30 0001750019 us-gaap:FurnitureAndFixturesMember 2019-12-31 0001750019 us-gaap:LeaseholdImprovementsMember 2020-06-30 0001750019 us-gaap:LeaseholdImprovementsMember 2019-12-31 0001750019 us-gaap:ConstructionInProgressMember 2020-06-30 0001750019 us-gaap:ConstructionInProgressMember 2019-12-31 0001750019 2020-06-01 2020-06-30 0001750019 2018-03-01 2018-03-31 0001750019 2018-03-31 0001750019 2019-03-01 2019-03-01 0001750019 2018-12-01 2018-12-31 iso4217:GBP 0001750019 2019-09-01 2019-09-30 0001750019 2019-09-30 0001750019 tcrr:GlobalNetSalesMember 2020-01-01 2020-06-30 0001750019 tcrr:GlobalNetSalesMember 2019-01-01 2019-12-31 0001750019 tcrr:IntellectualLicenseIncomeMember 2020-01-01 2020-06-30 0001750019 tcrr:IntellectualLicenseIncomeMember 2019-01-01 2019-12-31 tcrr:vote 0001750019 us-gaap:SeriesAPreferredStockMember 2019-02-13 0001750019 us-gaap:SeriesAPreferredStockMember us-gaap:CommonStockMember us-gaap:IPOMember 2019-02-19 2019-02-19 0001750019 us-gaap:SeriesAPreferredStockMember 2019-02-01 2019-02-01 0001750019 us-gaap:SeriesAPreferredStockMember 2020-01-01 2020-06-30 0001750019 us-gaap:SeriesAPreferredStockMember 2019-02-13 2019-02-13 0001750019 us-gaap:SeriesBPreferredStockMember 2019-02-13 0001750019 us-gaap:IPOMember us-gaap:CommonStockMember us-gaap:SeriesBPreferredStockMember 2019-02-19 2019-02-19 0001750019 us-gaap:SeriesBPreferredStockMember 2019-02-01 2019-02-01 0001750019 us-gaap:SeriesBPreferredStockMember 2020-01-01 2020-06-30 0001750019 us-gaap:SeriesBPreferredStockMember 2019-02-13 2019-02-13 0001750019 tcrr:A2018StockOptionAndIncentivePlanMember us-gaap:EmployeeStockOptionMember 2020-06-30 0001750019 tcrr:A2018StockOptionAndIncentivePlanMember us-gaap:EmployeeStockOptionMember 2020-01-01 2020-06-30 0001750019 tcrr:A2018StockOptionAndIncentivePlanMember us-gaap:EmployeeStockMember 2020-06-30 0001750019 us-gaap:ResearchAndDevelopmentExpenseMember 2020-04-01 2020-06-30 0001750019 us-gaap:ResearchAndDevelopmentExpenseMember 2019-04-01 2019-06-30 0001750019 us-gaap:ResearchAndDevelopmentExpenseMember 2020-01-01 2020-06-30 0001750019 us-gaap:ResearchAndDevelopmentExpenseMember 2019-01-01 2019-06-30 0001750019 us-gaap:GeneralAndAdministrativeExpenseMember 2020-04-01 2020-06-30 0001750019 us-gaap:GeneralAndAdministrativeExpenseMember 2019-04-01 2019-06-30 0001750019 us-gaap:GeneralAndAdministrativeExpenseMember 2020-01-01 2020-06-30 0001750019 us-gaap:GeneralAndAdministrativeExpenseMember 2019-01-01 2019-06-30 0001750019 2019-01-01 2019-12-31 0001750019 us-gaap:WarrantMember 2020-06-30 0001750019 us-gaap:WarrantMember 2019-12-31 0001750019 us-gaap:EmployeeStockMember 2019-02-01 2019-02-28 0001750019 us-gaap:EmployeeStockMember 2019-02-28 iso4217:EUR 0001750019 tcrr:DrPatrickBaeuerleMember srt:DirectorMember tcrr:ConsultingAgreementMonthlyFeeMember 2015-10-01 2015-10-01 0001750019 tcrr:DrPatrickBaeuerleMember srt:DirectorMember tcrr:ConsultingAgreementMonthlyFeeMember 2016-11-01 2016-11-01 0001750019 tcrr:DrPatrickBaeuerleMember srt:DirectorMember tcrr:ConsultingAgreementMember 2015-10-01 2015-10-01 0001750019 tcrr:DrPatrickBaeuerleMember srt:DirectorMember tcrr:ConsultingAgreementFeesMember 2020-01-01 2020-06-30 0001750019 tcrr:DrPatrickBaeuerleMember srt:DirectorMember tcrr:ConsultingAgreementFeesMember 2019-01-01 2019-06-30 0001750019 tcrr:MPMCapitalMember tcrr:TCR2TherapeuticsIncMember 2020-06-30 0001750019 tcrr:DrMitchellFinerPatternRecognitionVenturesMember tcrr:ConsultingAgreementQuarterlyFeeMember srt:DirectorMember 2017-05-09 2017-05-09 0001750019 tcrr:DrMitchellFinerPatternRecognitionVenturesMember tcrr:ConsultingAgreementFeesMember srt:DirectorMember 2020-01-01 2020-06-30 0001750019 tcrr:DrMitchellFinerPatternRecognitionVenturesMember tcrr:ConsultingAgreementFeesMember srt:DirectorMember 2019-01-01 2019-06-30 0001750019 tcrr:Dr.MitchellFinerPatternRecognitionVenturesMember tcrr:ConsultingAgreementYearlyFeeMember srt:DirectorMember 2020-06-05 2020-06-05 0001750019 tcrr:GlobewaysHoldingsLimitedMember tcrr:ConsultingAgreementYearlyFeeMember srt:DirectorMember 2017-10-01 2017-10-01 0001750019 tcrr:GlobewaysHoldingsLimitedMember tcrr:ConsultingAgreementFeesMember srt:DirectorMember 2019-01-01 2019-06-30 0001750019 tcrr:F2CapitalMember tcrr:TCR2TherapeuticsIncMember 2020-06-30 0001750019 us-gaap:IPOMember us-gaap:SubsequentEventMember 2020-07-27 2020-07-28 0001750019 us-gaap:IPOMember us-gaap:SubsequentEventMember 2020-07-28 0001750019 tcrr:InitialPublicOfferingClosedMember us-gaap:SubsequentEventMember 2020-07-30 2020-07-31

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended June 30, 2020

OR

 

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

 

For the transition period from ___________ to ___________

Commission file number 001-38811

 

TCR2 Therapeutics Inc.

(Exact name of Registrant as specified in its charter)

 

Delaware

 

47-4152751

(State or other jurisdiction of incorporation or organization)

 

(IRS Employer Identification No.)

 

100 Binney Street

Suite 710

Cambridge

MA

02142

(Address of Principal Executive Offices)

(Zip Code)

 

(617) 949-5200

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.0001 Par Value

 

TCRR

 

The Nasdaq Stock Market, LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

Emerging growth company

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes  No 

As of August 3, 2020, there were 33,344,021 shares of the registrant’s Common Stock, $0.0001 par value per share, outstanding.

 

 

 

 


TCR2 Therapeutics Inc.

 

Table of Contents

 

PART I

 

5

Item 1.

Financial Statements

5

 

Unaudited Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019

5

 

Unaudited Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2020 and 2019

6

 

Unaudited Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2020 and 2019

7

 

Unaudited Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) as of June 30, 2020 and 2019

8

 

Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2020 and 2019

10

 

Notes to the Unaudited Consolidated Financial Statements

11

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

26

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

38

Item 4.

Controls and Procedures

38

PART II

 

39

Item 1.

Legal Proceedings

39

Item 1A.

Risk Factors

39

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

99

Item 3.

Defaults Upon Senior Securities

100

Item 4.

Mine Safety Disclosures

100

Item 5.

Other Information

100

Item 6.

Exhibits

101

 

Signatures

102

 

 

 

 


FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q of TCR2 Therapeutics Inc. ("we," "us" and "our") contains or incorporates statements that constitute forward-looking statements within the meaning of the federal securities laws. Any statements that do not relate to historical or current facts or matters are forward looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “could,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” “continue” or the negative of these terms or other comparable terminology. Forward-looking statements appear in a number of places in this Quarterly Report on Form 10-Q and include, but are not limited to, statements about:

 

the timing of preclinical studies and clinical trials of TC-210, TC-110 and any other product candidates;

 

our need to raise additional funding before we can expect to generate any revenues from product sales;

 

our ability to submit our planned INDs, conduct successful clinical trials and obtain regulatory approval for TC-210, TC-110 or any other product candidates that we may identify or develop;

 

the ability of our TRuC-T cell platform to generate and advance additional product candidates;

 

our ability to establish an adequate safety, potency and purity profile for TC-210, TC-110 or any other product candidates that we may pursue;

 

our ability to manufacture TC-210, TC-110 or any other product candidate in conformity with our specifications and with the U.S. Food and Drug Administration’s requirements and to scale up manufacturing of our product candidates to commercial scale, if approved;

 

the implementation of our strategic plans for our business, any product candidates we may develop and our technology;

 

our intellectual property position, including the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology;

 

the rate and degree of market acceptance and clinical utility for any product candidates we may develop;

 

our estimates regarding our expenses, future revenues, capital requirements and our needs for additional financing;

 

our ability to maintain and establish collaborations;

 

our ability to effectively manage our anticipated growth;

 

developments relating to our competitors and our industry, including the impact of government regulation;

 

our estimates regarding the market opportunities for our product candidates;

 

our ability to retain the continued service of our key professionals and to identify, hire and retain additional qualified professionals;

 

our estimates of our expenses, ongoing losses, future revenue, capital requirements and our needs for, or ability to obtain, additional financing;

 

our expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act, or the JOBS Act;

 

our financial performance; and

 

other risks and uncertainties, including those listed under the section titled “Risk Factors.”

Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth, and involve known and unknown risks, uncertainties and other factors including, without limitation, risks, uncertainties and assumptions regarding the continuing impact of the COVID-19 pandemic on our business, operations, strategy, goals and anticipated timelines, our ongoing and planned preclinical activities, our ability to initiate, enroll, conduct or complete ongoing and planned clinical trials, our timelines for regulatory submissions and our financial position that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You are urged to carefully review the disclosures we make concerning these risks and other factors that may affect our business and operating results under “Item 1A. Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2019 and in this Quarterly Report on Form 10-Q. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. We do not intend, and undertake no obligation, to update any forward-looking

 


information to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events, unless required by law to do so.

 

 

 


Part I

Item 1. Financial Statements

TCR2 THERAPEUTICS INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except share data)

 

 

June 30, 2020

 

 

December 31, 2019

 

Assets

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Cash and cash equivalents

$

49,695

 

 

$

65,296

 

Investments

 

75,118

 

 

 

92,828

 

Prepaid expenses and other current assets

 

8,964

 

 

 

5,061

 

Total current assets

 

133,777

 

 

 

163,185

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

5,957

 

 

 

4,926

 

Restricted cash

 

417

 

 

 

417

 

Deferred offering costs

 

231

 

 

 

-

 

Total assets

$

140,382

 

 

$

168,528

 

 

 

 

 

 

 

 

 

Liabilities and stockholders’ equity (deficit)

 

 

 

 

 

 

 

Accounts payable

$

2,987

 

 

$

2,483

 

Accrued expenses and other current liabilities

 

3,373

 

 

 

5,050

 

Total current liabilities

 

6,360

 

 

 

7,533

 

 

 

 

 

 

 

 

 

Other liabilities

 

609

 

 

 

546

 

Total liabilities

 

6,969

 

 

 

8,079

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity (deficit)

 

 

 

 

 

 

 

Preferred stock, $0.0001 par value. 10,000,000 shares authorized, no shares issued or outstanding at June 30, 2020 and December 31, 2019, respectively.

 

-

 

 

 

-

 

Common stock, $0.0001 par value; 150,000,000 shares authorized; 24,139,510 and 24,050,936 shares issued; 24,104,595 and 23,981,109 shares outstanding at June 30, 2020 and December 31, 2019, respectively.

 

2

 

 

 

2

 

Additional paid-in capital

 

347,351

 

 

 

342,896

 

Accumulated other comprehensive income (loss)

 

402

 

 

 

142

 

Accumulated deficit

 

(214,342

)

 

 

(182,591

)

Total stockholders’ equity (deficit)

 

133,413

 

 

 

160,449

 

Total liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit)

$

140,382

 

 

$

168,528

 

 

See accompanying notes to unaudited consolidated financial statements

5


TCR2 THERAPEUTICS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands, except share and per share data)

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

12,907

 

 

$

8,833

 

 

$

24,862

 

 

$

16,722

 

General and administrative

 

 

3,809

 

 

 

3,307

 

 

 

8,080

 

 

 

6,193

 

Total operating expenses

 

 

16,716

 

 

 

12,140

 

 

 

32,942

 

 

 

22,915

 

Loss from operations

 

 

(16,716

)

 

 

(12,140

)

 

 

(32,942

)

 

 

(22,915

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

 

499

 

 

 

1,077

 

 

 

1,246

 

 

 

1,949

 

Loss before income taxes

 

 

(16,217

)

 

 

(11,063

)

 

 

(31,696

)

 

 

(20,966

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

28

 

 

 

-

 

 

 

55

 

 

 

-

 

Net loss

 

 

(16,245

)

 

 

(11,063

)

 

 

(31,751

)

 

 

(20,966

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accretion of redeemable convertible preferred stock to redemption value

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(49,900

)

Net loss attributable to common stockholders

 

$

(16,245

)

 

$

(11,063

)

 

$

(31,751

)

 

$

(70,866

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share of common stock, basic and diluted

 

$

(0.67

)

 

$

(0.46

)

 

$

(1.32

)

 

$

(3.91

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding, basic and diluted

 

 

24,075,984

 

 

 

23,818,003

 

 

 

24,043,913

 

 

 

18,105,142

 

 

See accompanying notes to unaudited consolidated financial statements

6


TCR2 THERAPEUTICS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(amounts in thousands)

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net loss

 

$

(16,245

)

 

$

(11,063

)

 

$

(31,751

)

 

$

(20,966

)

Unrealized gain on investments, net

 

 

864

 

 

 

211

 

 

 

260

 

 

 

318

 

Comprehensive loss

 

$

(15,381

)

 

$

(10,852

)

 

$

(31,491

)

 

$

(20,648

)

 

See accompanying notes to unaudited consolidated financial statements

 

 

7


TCR2 THERAPEUTICS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(amounts in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Accumulated

Other

 

 

Total

Stockholders'

 

 

 

Common Stock

 

 

Paid-In

 

 

Accumulated

 

 

Comprehensive

 

 

Equity

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

(Deficit)

 

Balance at December 31, 2019

 

 

23,981,109

 

 

$

2

 

 

$

342,896

 

 

$

(182,591

)

 

$

142

 

 

$

160,449

 

Reclassification of shares issued and previously subject to repurchase

 

 

17,456

 

 

 

-

 

 

 

13

 

 

 

-

 

 

 

-

 

 

 

13

 

Exercise of stock options

 

 

57,904

 

 

 

-

 

 

 

185

 

 

 

-

 

 

 

-

 

 

 

185

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

2,055

 

 

 

-

 

 

 

-

 

 

 

2,055

 

Unrealized loss on investments

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(604

)

 

 

(604

)

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(15,506

)

 

 

-

 

 

 

(15,506

)

Balance at March 31, 2020

 

 

24,056,469

 

 

$

2

 

 

$

345,149

 

 

$

(198,097

)

 

$

(462

)

 

$

146,592

 

Reclassification of shares issued and previously subject to repurchase

 

 

17,456

 

 

 

-

 

 

 

13

 

 

 

-

 

 

 

-

 

 

 

13

 

Exercise of stock options

 

 

30,670

 

 

 

-

 

 

 

125

 

 

 

-

 

 

 

-

 

 

 

125

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

2,064

 

 

 

-

 

 

 

-

 

 

 

2,064

 

Unrealized gain on investments

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

864

 

 

 

864

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(16,245

)

 

 

-

 

 

 

(16,245

)

Balance at June 30, 2020

 

 

24,104,595

 

 

$

2

 

 

$

347,351

 

 

$

(214,342

)

 

$

402

 

 

$

133,413

 

 

See accompanying notes to unaudited consolidated financial statements

8


TCR2 THERAPEUTICS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(amounts in thousands, except share data)

 

 

 

Redeemable Convertible Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Accumulated

Other

 

 

Total

Stockholders'

 

 

 

Series A

 

 

Series B

 

 

 

Common Stock

 

 

Paid-In

 

 

Accumulated

 

 

Comprehensive

 

 

Equity

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

(Deficit)

 

Balance at December 31, 2018

 

 

44,500,001

 

 

$

72,980

 

 

 

62,500,000

 

 

$

136,250

 

 

 

 

726,990

 

 

$

-

 

 

$

-

 

 

$

(85,590

)

 

$

(106

)

 

$

(85,696

)

Reclassification of shares issued and previously subject to repurchase

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

39,779

 

 

 

-

 

 

 

13

 

 

 

-

 

 

 

-

 

 

 

13

 

Exercise of stock options

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

124

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

1,141

 

 

 

-

 

 

 

-

 

 

 

1,141

 

Unrealized gain on investments

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

107

 

 

 

107

 

Accretion of redeemable preferred stock to redemption value

 

 

-

 

 

 

34,789

 

 

 

-

 

 

 

15,111

 

 

 

 

-

 

 

 

-

 

 

 

(498

)

 

 

(49,402

)

 

 

-

 

 

 

(49,900

)

Conversion of shares upon IPO

 

 

(44,500,001

)

 

 

(107,769

)

 

 

(62,500,000

)

 

 

(151,361

)

 

 

 

17,275,299

 

 

 

2

 

 

 

259,128

 

 

 

-

 

 

 

-

 

 

 

259,130

 

Initial public offering, net of issuance costs

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

5,750,000

 

 

 

-

 

 

 

77,155

 

 

 

-

 

 

 

-

 

 

 

77,155

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(9,903

)

 

 

-

 

 

 

(9,903

)

Balance at March 31, 2019

 

 

-

 

 

$

-

 

 

 

-

 

 

$

-

 

 

 

 

23,792,192

 

 

$

2

 

 

$

336,939

 

 

$

(144,895

)

 

$

1

 

 

$

192,047

 

Reclassification of shares issued and previously subject to repurchase

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

39,777

 

 

 

-

 

 

 

13

 

 

 

-

 

 

 

-

 

 

 

13

 

Exercise of stock options

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

24,721

 

 

 

-

 

 

 

18

 

 

 

-

 

 

 

-

 

 

 

18

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

1,444

 

 

 

-

 

 

 

-

 

 

 

1,444

 

Unrealized gain on investments

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

211

 

 

 

211

 

Initial public offering, issuance costs

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

(34

)

 

 

-

 

 

 

-

 

 

 

(34

)

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(11,063

)

 

 

-

 

 

 

(11,063

)

Balance at June 30, 2019

 

 

-

 

 

$

-

 

 

 

-

 

 

$

-

 

 

 

 

23,856,690

 

 

$

2

 

 

$

338,380

 

 

$

(155,958

)

 

$

212

 

 

$

182,636

 

 

See accompanying notes to unaudited consolidated financial statements

 

 

9


TCR2 THERAPEUTICS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

 

 

Six Months Ended June 30,

 

 

2020

 

 

2019

 

Operating activities

 

 

 

 

 

 

 

Net loss

$

(31,751

)

 

$

(20,966

)

Adjustments to reconcile net loss to cash used in operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

673

 

 

 

300

 

Stock-based compensation expense

 

4,119

 

 

 

2,585

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Prepaid expenses and other current assets

 

(3,904

)

 

 

(3,735

)

Accounts payable

 

29

 

 

 

180

 

Accrued expenses and other liabilities

 

(1,587

)

 

 

646

 

Cash used in operating activities

 

(32,421

)

 

 

(20,990

)

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

Purchases of equipment

 

(1,229

)

 

 

(941

)

Purchases of investments

 

(63,005

)

 

 

(106,566

)

Proceeds from sale or maturity of investments

 

80,975

 

 

 

42,619

 

Cash provided by (used in) investing activities

 

16,741

 

 

 

(64,888

)

 

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

 

Proceeds from initial public offering, net of issuance costs

 

-

 

 

 

80,213

 

Proceeds from the exercise of stock options

 

310

 

 

 

18

 

Deferred offering costs

 

(231

)