til-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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, 2023


☐			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 001-40215

Instil Bio, Inc.

(Exact name of registrant as specified in its charter)

Delaware

83-2072195

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

3963 Maple Avenue, Suite 350

Dallas, Texas

75219

(Zip Code)

(Address of Principal Executive Offices)

(972) 499-3350

Registrant's telephone number, including area code

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

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, $0.000001 par value per share	TIL	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 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for 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 and posted on its corporate web site, if any, 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 files). Yes ☒ No ☐

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


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 7(a)(2)(B) of the Securities Act. ☐

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:


Class of Common Stock			Outstanding at
130,079,097 shares of Common Stock, $0.000001 par value per share			August 10, 2023

TABLE OF CONTENTS


			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			5
Notes to Condensed Consolidated Financial Statements			6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			17
Item 3. Quantitative and Qualitative Disclosures About Market Risk			29
Item 4. Controls and Procedures			29
Part II. Other Information			31
Item 1. Legal Proceedings			31
Item 1A. Risk Factors			31
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			93
Item 3. Defaults Upon Senior Securities			93
Item 4. Mine Safety Disclosures			93
Item 5. Other Information			94
Item 6. Exhibits			94
Signatures			95

Part I. Financial Information

Item 1. Financial Statements (Unaudited)

INSTIL BIO, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

(Unaudited)


	June 30, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	21,764	$	43,716
Marketable securities	179,935		217,204
Prepaid expenses and other current assets	12,456		8,458
Assets held for sale	6,432		—
Total current assets	220,587		269,378
Property, plant and equipment, net	181,469		196,880
Operating lease right-of-use assets	3,155		12,457
Other long-term assets	3,099		3,413
Total assets	$	408,310	$	482,128
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,160	$	2,359
Accrued expenses and other current liabilities	16,097		30,069
Contingent consideration, current portion	120		360
Total current liabilities	18,377		32,788
Contingent consideration, net of current portion	8,041		7,882
Operating lease liabilities, non-current	3,698		5,171
Loan payable	81,516		72,350
Other long-term liabilities	162		332
Total liabilities	111,794		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 June 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 June 30, 2023, and December 31, 2022	—		—
Additional paid-in capital	797,935		788,992
Accumulated other comprehensive loss	(795)		(493)
Accumulated deficit	(500,624)		(424,894)
Total stockholders’ equity	296,516		363,605
Total liabilities and stockholders’ equity	$	408,310	$	482,128

The accompanying notes are an integral part of these condensed consolidated financial statements.

INSTIL BIO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Operating expenses:
Research and development	$	8,459	$	41,500	$	29,129	$	80,674
General and administrative	11,518		17,224		24,740		32,336
Restructuring and impairment charges	1,010		—		25,564		—
Total operating expenses	20,987		58,724		79,433		113,010
Loss from operations	(20,987)		(58,724)		(79,433)		(113,010)
Interest income	2,287		486		4,358		583
Interest expense	(590)		(331)		(1,226)		(331)
Other income (expense), net	628		(1,032)		571		(1,448)
Loss before income tax benefit	(18,662)		(59,601)		(75,730)		(114,206)
Income tax benefit	—		609		—		1,097
Net loss	(18,662)		(58,992)		(75,730)		(113,109)
Other comprehensive loss:
Foreign currency translation	(211)		220		(441)		189
Unrealized (loss) gain on available-for-sale securities, net	(178)		(336)		139		(659)
Net comprehensive loss	$	(19,051)	$	(59,108)	$	(76,032)	$	(113,579)
Net loss per share, basic and diluted	$	(0.14)	$	(0.46)	$	(0.58)	$	(0.88)
Weighted-average shares used in computing net loss per share, basic and diluted	130,079,097		129,367,833		130,079,097		129,244,334

The accompanying notes are an integral part of these condensed consolidated financial statements.

INSTIL BIO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share and per share amounts)

(Unaudited)


	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


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount				Loss
Balance - December 31, 2021	129,028,278	$	—	$	757,003	$	(87)	$	(201,717)	$	555,199
Shares of common stock issued in connection with incentive stock plan	189,638	—		338		—		—		338
Stock-based compensation	—	—		7,493		—		—		7,493
Net loss	—	—		—		—		(54,117)		(54,117)
Other comprehensive loss	—	—		—		(354)		—		(354)
Balance - March 31, 2022	129,217,916	—		764,834		(441)		(255,834)		508,559
Shares of common stock issued in connection with incentive stock plan	332,381	—		565		—		—		565
Stock-based compensation	—	—		8,316		—		—		8,316
Net loss	—	—		—		—		(58,992)		(58,992)
Other comprehensive loss	—	—		—		(116)		—		(116)
Balance - June 30, 2022	129,550,297	$	—	$	773,715	$	(557)	$	(314,826)	$	458,332

The accompanying notes are an integral part of these condensed consolidated financial statements.

INSTIL BIO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net loss	$	(75,730)	$	(113,109)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	8,943		15,816
Non-cash lease expense	115		826
Foreign exchange remeasurement (gain) loss	(723)		1,477
Impairment of fixed assets

SEC Form 10-Q filed by Instil Bio Inc.