Arcellx, Inc. (Arcellx or the Company) was incorporated in Delaware in December 2014 and is headquartered in Gaithersburg, Maryland. The Company is a clinical-stage biopharmaceutical company reimagining cell therapy through the development of innovative therapies for patients with cancer and other incurable diseases.

On February 8, 2022, the Company closed its initial public offering (IPO) of 9,487,500 shares of its common stock, including the exercise in full by the underwriters of their option to purchase 1,237,500 additional shares of its common stock, at a public offering price of $15.00 per share. The Company received net proceeds of $127.3 million, after deducting underwriting discounts and commissions of and other offering expenses paid by the Company of approximately $15.0 million. The Company’s common stock began trading on the Nasdaq Global Select Market on February 4, 2022, under the ticker symbol “ACLX.”

The Company has not commercialized any of its drug candidates and planned commercial operations have not commenced. The Company expects to incur additional operating losses and negative operating cash flows for the foreseeable future as it continues development of drug candidates, including preclinical and clinical testing and regulatory approval prior to commercialization. The Company has not generated any revenue to date from product sales and does not expect to generate any revenues from product sales in the foreseeable future. Even if drug development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. The Company expects that its cash and cash equivalents and marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements into the second half of 2023.

The Company has funded its operations primarily with proceeds from public and private offerings of its common and preferred stock. The Company plans to seek additional funding through public or private equity offerings, debt financings, marketing and distribution arrangements, other collaborations, strategic alliances, and licensing arrangements. The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into strategic alliances or other arrangements on favorable terms, or at all. The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders. If the Company is unable to obtain funding, the Company could be required to delay, reduce or eliminate research and development programs, product portfolio expansion or future commercialization efforts, which could adversely affect its business prospects.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC for interim financial information. Accordingly, they do not include all of the information required by U.S. generally accepted accounting principles for complete financial statements. These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the accompanying notes to our consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 24, 2022.

In our management’s opinion, the accompanying condensed consolidated financial statements contain all adjustments, including normal, recurring adjustments, necessary to fairly present our financial position as of March 31, 2022 and December 31, 2021, our condensed consolidated statements of operations and comprehensive loss for the three-month period ended March 2022 and 2021, our condensed consolidated statements of redeemable convertible preferred stock and stockholders’ equity (deficit) for the three-month period ended March 31, 2022 and 2021, and our statements of condensed consolidated cash flows for the three-month period ended March 31, 2022 and 2021. Interim results are not necessarily indicative of results for an entire year.

The Company has restated its previously reported unaudited condensed consolidated financial statements as of and for the three-month period ended March 31, 2022. The restatement reflects the correction of certain errors made in accounting for the Company’s research and development expenses and related accounts and other immaterial errors as of and for the three-month period ended March 31, 2022. The correction of these errors decreased the Company's net loss by $6.3 million.

The correction of the aforementioned errors and other immaterial errors reduced the research and development expenses by $6.3 million, from $24.4 million to $18.1 million, during the three-month period ended March 31, 2022, as a result of correcting the expense incurred as part of the Company's arrangements with third-party contract research organizations and contract manufacturing organizations. The following table presents the effect of the restatement on the Company's unaudited condensed consolidated financial statements:


(in thousands, except per share amounts)	As of and Three Months Ended March 31, 2022
	Previously Reported			Correction of Error			Restated
Changes in the balance sheet:
Prepaid expenses and other current assets	$	9,974		$	3,486		$	13,460
Total current assets		220,903			3,486			224,389
Property and equipment, net		10,127			(380	)		9,747
Prepaid research and development expenses and other long-term assets		8,913			488			9,401
Total assets		243,390			3,594			246,984
Accrued liabilities		14,400			(2,750	)		11,650
Operating lease liabilities, current portion		370			367			737
Total current liabilities		16,808			(2,383	)		14,425
Operating lease liabilities, net of current portion		4,844			(367	)		4,477
Total liabilities		21,799			(2,750	)		19,049
Accumulated deficit		(162,496	)		6,344			(156,152	)
Total stockholders’ equity		221,591			6,344			227,935
Total liabilities and stockholders’ equity		243,390			3,594			246,984

Changes in the statement of operations and comprehensive loss:
Research and development		24,401			(6,344	)		18,057
Total operating expenses		32,435			(6,344	)		26,091
Loss from operations		(32,435	)		6,344			(26,091	)
Net loss		(32,385	)		6,344			(26,041	)
Comprehensive loss		(32,409	)		6,344			(26,065	)
Net loss per share attributable to common stockholders—basic and diluted		(1.56	)		0.31			(1.25	)

Changes in the statement of cash flows:
Net loss		(32,385	)		6,344			(26,041	)
Depreciation and amortization		416			(153	)		263
Prepaid expenses and other current and non-current assets		(8,423	)		(3,441	)		(11,864	)
Accrued liabilities		2,563			(2,750	)		(187	)
Net cash used in operating activities		(32,586	)		—			(32,586	)