Item 2.02 Result of Operations and Financial Condition
The information set forth under Item 4.02 is incorporated into this Item 2.02 by reference.
Item 4.02(a) Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
OnDecember 13, 2021 , the Audit Committee of the Board of Directors ofIO Biotech, Inc. (the "Company"), based on the recommendation of management and after consultation with the Company's independent registered public accounting firm, EY Godkendt Revisionspartnerselskab (EY), determined that the Company's Unaudited Interim Condensed Financial Statements as ofJune 30, 2021 and for the Six Months EndedJune 30, 2021 and 2020 (the "Relevant Financial Statements") incorrectly accounted for an accrued expense related to certain research and development expenses, which should have been recorded as a prepaid expense. This led to an overstatement of research and development expenses for the six months endedJune 30, 2021 .
This incorrect accrued expense does not impact:
• total research and development expenses for the 9-month period endingSeptember 30, 2021 nor the financial year endedDecember 31, 2021 • the cash balances reported as ofJune 30, 2021 or any other period
• the timing or magnitude of cash used in operations for the six
months period endingJune 30, 2021 • the Company's previous guidance related to its cash runway
• any other prior periods other than the Relevant Financial Statements
Consequently, onDecember 13, 2021 , the Audit Committee concluded that investors should not rely on the Company's unaudited interim condensed financial statements as ofJune 30, 2021 and for the six months endedJune 30, 2021 , originally filed with theSecurities and Exchange Commission ("SEC") onOctober 5, 2021 . The Company is filing the above-described restated unaudited Relevant Financial Statements as an exhibit to this Current Report on Form 8-K.
The Audit Committee has discussed the matters disclosed in this Current Report on Form 8-K with EY, the Company's independent registered public accounting firm.
The tables below show the impact of the restatements on the relevant line items in the Company's financial statements:
Balance Sheet
(In thousands, except per share data)
(unaudited) As of June 30, 2021 As reported Adjustment As restated Prepaid expenses and other current assets$ 3,744 $ 1,666 $ 5,410 Total current assets 58,496 1,666 60,162 Total assets 58,534 1,666 60,200 Accrued expenses and other current liabilities 5,915 (1,666 ) 4,249 Total liabilities 38,955 (1,666 ) 37,289 Accumulated deficit (83,878 ) 3,369 (80,509 ) Accumulated other comprehensive income 1,422 (37 ) 1,385 Total stockholders' deficit (81,309 ) 3,332 (77,977 ) Total liabilities, convertible preference shares and stockholders' deficit 58,534 1,666 60,200
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Statement of Operations and Comprehensive Loss
(In thousands, except per share data)
(unaudited) Six Months Ended June 30, 2021 As reported Adjustment As restated
Research and development$ 12,972 $ (3,389 ) $ 9,583 Total operating expenses 16,185 (3,389 ) 12,796 Loss from operations (16,185 ) 3,389 (12,796 ) Currency exchange gain (loss), net 312 (20 ) 292 Total other income (29,291 ) (20 ) (29,311 ) Net loss (45,476 ) 3,369 (42,107 ) Net loss attributable to class A ordinary shareholders (49,409 ) 3,369 (46,040 ) Net loss per class A ordinary shareholder, basic and diluted$ (278.83 ) $ 19.01 $ (259.82 ) Net loss (45,476 ) 3,369 (42,107 ) Foreign currency translation (539 ) (37 ) (576 ) Total comprehensive loss (46,015 ) 3,332 (42,683 ) Statement of Cash Flows
(In thousands, except per share data)
(unaudited) Six Months Ended June 30, 2021 As reported Adjustment As restated Net loss$ (45,476 ) $ 3,369 $ (42,107 ) Adjustment to reconcile net loss to net cash used in operating activities Other non-cash items, net (312 ) (37 ) (349 ) Prepaid expenses and other current assets (1,514 ) (1,666 ) (3,180 ) Accrued expenses and other current liabilities 3,366 (1,666 ) 1,700 Net cash used in operating activities (13,293 ) - (13,293 ) Cash and cash equivalents, end of period 54,752 - 54,752
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. Exhibit Number Exhibit Description 99.1 Unaudited Interim Condensed Financial Statements as ofJune 30, 2021 and for the Six Months EndedJune 30, 2021 and 2020
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