UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
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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
TCR2 Therapeutics Inc.
(Exact name of Registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(IRS Employer Identification No.) |
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(Address of Principal Executive Offices) |
(Zip Code) |
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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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.
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).
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.:
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Large accelerated filer |
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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
As of August 3, 2020, there were
TCR2 Therapeutics Inc.
Table of Contents
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5 |
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Item 1. |
5 |
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Unaudited Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019 |
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6 |
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7 |
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Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2020 and 2019 |
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11 |
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Item 2. |
Management's Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
38 |
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Item 4. |
38 |
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39 |
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Item 1. |
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Item 1A. |
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Item 2. |
99 |
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Item 3. |
100 |
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Item 4. |
100 |
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Item 5. |
100 |
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Item 6. |
101 |
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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:
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the timing of preclinical studies and clinical trials of TC-210, TC-110 and any other product candidates; |
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our need to raise additional funding before we can expect to generate any revenues from product sales; |
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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; |
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the ability of our TRuC-T cell platform to generate and advance additional product candidates; |
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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; |
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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; |
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the implementation of our strategic plans for our business, any product candidates we may develop and our technology; |
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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; |
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the rate and degree of market acceptance and clinical utility for any product candidates we may develop; |
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our estimates regarding our expenses, future revenues, capital requirements and our needs for additional financing; |
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our ability to maintain and establish collaborations; |
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our ability to effectively manage our anticipated growth; |
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developments relating to our competitors and our industry, including the impact of government regulation; |
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our estimates regarding the market opportunities for our product candidates; |
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our ability to retain the continued service of our key professionals and to identify, hire and retain additional qualified professionals; |
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our estimates of our expenses, ongoing losses, future revenue, capital requirements and our needs for, or ability to obtain, additional financing; |
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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; |
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our financial performance; and |
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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)
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June 30, 2020 |
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December 31, 2019 |
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Assets |
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Current assets |
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Cash and cash equivalents |
$ |
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$ |
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Investments |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Restricted cash |
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Deferred offering costs |
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Total assets |
$ |
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$ |
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Liabilities and stockholders’ equity (deficit) |
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Accounts payable |
$ |
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$ |
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Accrued expenses and other current liabilities |
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Total current liabilities |
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Other liabilities |
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Total liabilities |
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Commitments and contingencies (Note 7) |
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Stockholders’ equity (deficit) |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive income (loss) |
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Accumulated deficit |
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Total stockholders’ equity (deficit) |
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Total liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit) |
$ |
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$ |
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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)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2020 |
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2019 |
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2020 |
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2019 |
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Operating expenses |
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Research and development |
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$ |
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$ |
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$ |
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$ |
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General and administrative |
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Total operating expenses |
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Loss from operations |
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( |
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( |
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( |
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( |
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Interest income, net |
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Loss before income taxes |
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( |
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( |
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( |
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( |
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Income taxes |
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- |
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- |
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Net loss |
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( |
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( |
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( |
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( |
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Accretion of redeemable convertible preferred stock to redemption value |
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- |
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- |
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- |
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( |
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Net loss attributable to common stockholders |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Per share information |
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Net loss per share of common stock, basic and diluted |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Weighted average shares outstanding, basic and diluted |
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See accompanying notes to unaudited consolidated financial statements
6
TCR2 THERAPEUTICS INC.
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(amounts in thousands)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2020 |
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2019 |
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2020 |
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2019 |
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Net loss |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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Unrealized gain on investments, net |
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Comprehensive loss |
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$ |
( |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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)
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Additional |
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Accumulated Other |
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Total Stockholders' |
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Common Stock |
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Paid-In |
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Accumulated |
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Comprehensive |
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Equity |
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Shares |
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Amount |
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Capital |
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Deficit |
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Income (Loss) |
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(Deficit) |
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Balance at December 31, 2019 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Reclassification of shares issued and previously subject to repurchase |
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- |
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- |
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- |
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Exercise of stock options |
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- |
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- |
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- |
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Stock-based compensation expense |
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- |
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- |
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- |
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- |
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Unrealized loss on investments |
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- |
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- |
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- |
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- |
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( |
) |
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( |
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Net loss |
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- |
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- |
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- |
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( |
) |
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- |
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( |
) |
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Balance at March 31, 2020 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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Reclassification of shares issued and previously subject to repurchase |
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- |
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- |
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- |
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Exercise of stock options |
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- |
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- |
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- |
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Stock-based compensation expense |
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- |
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- |
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- |
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- |
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Unrealized gain on investments |
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- |
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- |
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- |
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- |
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Net loss |
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- |
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- |
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- |
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( |
) |
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- |
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( |
) |
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Balance at June 30, 2020 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
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|
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)
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Redeemable Convertible Preferred Stock |
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Additional |
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Accumulated Other |
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Total Stockholders' |
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Series A |
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Series B |
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Common Stock |
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Paid-In |
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Accumulated |
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Comprehensive |
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Equity |
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Shares |
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Amount |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Deficit |
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Income (Loss) |
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(Deficit) |
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Balance at December 31, 2018 |
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$ |
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$ |
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$ |
- |
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$ |
- |
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|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
Reclassification of shares issued and previously subject to repurchase |
|
|
- |
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|
- |
|
|
|
- |
|
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|
- |
|
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- |
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|
|
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|
- |
|
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|
- |
|
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Exercise of stock options |
|
|
- |
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- |
|
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|
- |
|
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|
- |
|
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|
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- |
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- |
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|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Stock-based compensation expense |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
Unrealized gain on investments |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
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|
Accretion of redeemable preferred stock to redemption value |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
Conversion of shares upon IPO |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
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( |
) |
|
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|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
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|
Initial public offering, net of issuance costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
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|
|
|
|
- |
|
|
|
|
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|
|
- |
|
|
|
- |
|
|
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Net loss |
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|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
Balance at March 31, 2019 |
|
|
- |
|
|
$ |
- |
|
|
|
- |
|
|
$ |
- |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
|
Reclassification of shares issued and previously subject to repurchase |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
Exercise of stock options |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
Stock-based compensation expense |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
Unrealized gain on investments |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Initial public offering, issuance costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
Balance at June 30, 2019 |
|
|
- |
|
|
$ |
- |
|
|
|
- |
|
|
$ |
- |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
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 |
$ |
( |
) |
|
$ |
( |
) |
|
Adjustments to reconcile net loss to cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Prepaid expenses and other current assets |
|
( |
) |
|
|
( |
) |
|
Accounts payable |
|
|
|
|
|
|
|
|
Accrued expenses and other liabilities |
|
( |
) |
|
|
|
|
|
Cash used in operating activities |
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
|
|
Purchases of equipment |
|
( |
) |
|
|
( |
) |
|
Purchases of investments |
|
( |
) |
|
|
( |
) |
|
Proceeds from sale or maturity of investments |
|
|
|
||||