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 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.

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 Exchange Act). Yes ☐ No ☒

As of ~~November 4, 2022,~~May 5, 2023, the registrant had ~~40,254,890~~31,168,449 shares of common stock, $0.01 par value per share, outstanding.


	September 30,			December 31,			March 31,			December 31,
	2022			2021			2023			2022
	(Unaudited)						(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	28,880		$	8,305		$	45,244		$	36,640
Marketable securities, available-for-sale		19,111			82,575			4,762			7,762
Prepaid expenses and other current assets		1,497			1,266			1,178			851
Total current assets		49,488			92,146			51,184			45,253
Property and equipment, net		—			707
Other assets		—			26
Total assets	$	49,488		$	92,879		$	51,184		$	45,253

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	3,204		$	12,908		$	2,298		$	3,435
Accrued liabilities		2,271			3,703			1,862			2,687
Total current liabilities		5,475			16,611			4,160			6,122
Total liabilities		5,475			16,611			4,160			6,122
Commitments and contingencies (Note 6)
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock, $0.01 par value; 10,000,000 shares authorized, no shares issued and outstanding as of September 30, 2022 and December 31, 2021		—			—
Common stock, $0.01 par value; 200,000,000 shares authorized, 40,254,890 shares issued and outstanding as of September 30, 2022 and December 31, 2021		403			403
Preferred stock, $0.01 par value; 10,000,000 shares authorized, no shares issued and outstanding as of March 31, 2023 and December 31, 2022								—			—
Common stock, $0.01 par value; 200,000,000 shares authorized, 31,168,449 and 40,254,890 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively								312			403
Additional paid-in capital		172,016			170,241			186,094			172,212
Accumulated other comprehensive loss		(211	)		(225	)		79			(57	)
Accumulated deficit		(128,195	)		(94,151	)		(139,461	)		(133,427	)
Total stockholders’ equity		44,013			76,268			47,024			39,131
Total liabilities and stockholders’ equity	$	49,488		$	92,879		$	51,184		$	45,253

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


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2022			2021			2022			2021			2023			2022
Revenue - license fee:	$	—		$	—		$	—		$	18,000
Operating expenses:
Research and development		4,862			9,344			22,266			28,120		$	3,326		$	10,800
General and administrative		2,967			3,059			11,782			8,300			3,153			4,153
Total operating expenses		7,829			12,403			34,048			36,420			6,479			14,953
Loss from operations		(7,829	)		(12,403	)		(34,048	)		(18,420	)		(6,479	)		(14,953	)
Other income:
(Loss) gain from foreign exchange		—			(10	)		26			3			(4	)		1
Other (expense) income, net		(67	)		(191	)		(22	)		92
Other (loss) income, net		(67	)		(201	)		4			95
Interest and other income, net														449			88
Other income, net														445			89
Net loss	$	(7,896	)	$	(12,604	)	$	(34,044	)	$	(18,325	)	$	(6,034	)	$	(14,864	)
Net loss per share, basic and diluted	$	(0.20	)	$	(0.32	)	$	(0.85	)	$	(0.50	)	$	(0.09	)	$	(0.37	)
Weighted-average shares used to compute net loss per share, basic and diluted		40,254,890			39,962,069			40,254,890			36,662,627			64,842,336			40,254,890
Comprehensive loss:
Net loss	$	(7,896	)	$	(12,604	)	$	(34,044	)	$	(18,325	)	$	(6,034	)	$	(14,864	)
Unrealized gain on available-for-sale securities		181			273			14			121
Unrealized gain (loss) on available-for-sale securities														136			(242	)
Comprehensive loss	$	(7,715	)	$	(12,331	)	$	(34,030	)	$	(18,204	)	$	(5,898	)	$	(15,106	)

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


	Nine Months Ended September 30,						Three Months Ended March 31,
	2022			2021			2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(34,044	)	$	(18,325	)	$	(6,034	)	$	(14,864	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		577			141			—			353
Stock-based compensation expense		1,775			1,690			224			941
Net realized loss on sale of marketable securities		—			(121	)
Amortization of premium on marketable securities		1,055			1,210			32			312
Non-cash loss on termination of lease		137			—			—			137
Gain on sale of equipment		(147	)		—			—			(9	)
Gain from foreign exchange		—			3
Changes in operating assets and liabilities:
Prepaid expenses and other assets		(231	)		106			(327	)		(2,262	)
Accounts payable		(9,762	)		1,505			(1,265	)		(3,084	)
Other liabilities		(1,432	)		(1,213	)		(800	)		1,974
Net cash used in operating activities		(42,072	)		(15,004	)		(8,170	)		(16,502	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(7	)		(477	)		—			(7	)
Proceeds from sale of property and equipment		173			—
Purchase of available-for-sale marketable securities		(3,671	)		(165,914	)		—			(1,027	)
Proceeds from sales and maturities of marketable securities		66,094			105,889			3,104			20,540
Net cash provided by (used in) investing activities		62,589			(60,502	)
Net cash provided by investing activities								3,104			19,506
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from initial public offering, net of issuance costs		—			90,506
Proceeds from exercise of stock options		—			477
Proceeds from issuance of pre-funded warrants for the purchase of common stock, net of issuance costs								16,666			—
Repurchase and retirement of common stock								(3,000	)		—
Net cash provided by financing activities		—			90,983			13,666			—
Net change in cash and cash equivalents		20,517			15,477			8,600			3,004
Cash and cash equivalents at beginning of period		8,305			2,416			36,640			8,305
Effect of exchange rates on cash		58			—			4			(21	)
Cash and cash equivalents at end of period	$	28,880		$	17,893		$	45,244		$	11,288

Supplemental non-cash disclosure: NONCASH INVESTING AND FINANCING ACTIVITY:
Non-cash gain on sale of fixed assets	$	14		$	—
Reclassification of par to additional paid-in-capital	$	—		$	2
Conversion of Series A and B convertible preferred stock to common stock	$	—		$	72,925
Deferred financing costs in accounts payable							$	99		$	—
Operating right-of-use asset obtained in exchange for operating lease liability	$	824		$	—		$	—		$	824
Derecognition of operating right-of-use asset and operating lease liability upon termination of lease	$	714		$	—		$	—		$	714
Unrealized (loss) gain on available-for-sale marketable securities	$	(14	)	$	121
Unrealized gain (loss) on available-for-sale marketable securities							$	136		$	(242	)

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

Condensed Consolidated Statements of ~~Convertible Preferred Stock and~~Changes in Stockholders’ Equity

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

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Landos Biopharma Australia Pty Ltd. ~~(“Landos Australia”).~~ All intercompany balances and transactions have been eliminated in consolidation.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the ~~United States of America ("GAAP"~~U.S. (“GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s audited financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. In the opinion of the Company’s management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of its financial position, operating results and cash flows for the periods presented have been included. Operating results for the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 are not necessarily indicative of the results that may be expected for the full year, for any other interim period or for any future year.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts in the Company's consolidated financial statements and the disclosures made in the accompanying notes. Significant estimates and assumptions made in the accompanying condensed consolidated financial statements include, but are not limited to, accrued liabilities, fair value of equity instruments and uncertain tax positions. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Despite management’s intention to establish accurate estimates and use reasonable assumptions, actual results may differ from the Company's estimates.

~~Reclassification of Prior Year Presentation~~

~~Certain reclassifications have been made to the prior year presentation to conform to the 2022 presentation.~~

Significant Accounting Policies

The significant accounting policies used in preparation of these unaudited condensed consolidated financial statements for the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 are consistent with, and should be read in conjunction with, those discussed in Note 1 of the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and highly liquid investments with original maturities of three months or less at the date of purchase. The carrying amounts approximate fair value due to the short maturities of these investments. Cash equivalents consist primarily of amounts invested in money market funds and ~~commercial paper~~U.S. government treasury securities and are stated at fair value.

Marketable Securities

The Company’s investments in marketable securities are maintained by investment managers and consist of corporate debt securities and asset backed securities with original maturities of over ~~ninety (~~90) days, all of which are considered available-for-sale debt securities. The Company classifies its available-for-sale securities as short-term marketable securities on the Condensed Consolidated Balance Sheets, even though the stated maturity date may be one year or more beyond the current Condensed Consolidated Balance Sheets date, as the Company views those securities as available for use in current operations, if needed.

Available-for-sale securities are carried at fair value with their unrealized gains and losses included in accumulated other comprehensive loss within stockholders’ equity, until such gains and losses are realized in other income, ~~(expense),~~ net, within the Condensed Consolidated Statements of Operations and Comprehensive Loss, ~~or until an unrealized loss is considered other-than-temporary.~~except for the changes in allowance for expected credit losses, which are recorded in other income, net, within the Condensed Consolidated Statements of Operations and Comprehensive Loss. Realized gains and losses are determined using the specific identification method.

The Company ~~evaluates~~conducts periodic reviews to identify and evaluate each investment in its ~~investments with~~portfolio that has an unrealized ~~losses for other-than-temporary impairment. When assessing investments for other-than-temporary impairments in value,~~loss to determine whether a credit loss exists. An unrealized loss exists when the ~~Company considers such factors as, among other things, how significant the impairment in value is as a percentage of the original cost, how long the market~~current fair value of ~~the investment has been~~an individual security is less than its ~~original~~amortized cost basis.

A credit loss is estimated by considering available information relevant to the Company’s ability and intent to retain the investment for a period of time sufficient to allow for any anticipated recovery in fair value and market conditions. If the Company determines from this analysis that it does not expect to receive cash flows sufficient to recover the entire amortized costcollectability of the security and information about past events, current conditions and reasonable and supportable forecasts. Any credit loss is recorded as a charge to other income, net, not to exceed the amount of the unrealized loss. Unrealized losses other than the credit loss are recognized in accumulated other comprehensive loss. When determining whether a credit loss exists, the ~~impairment~~Company considers several factors, including whether the Company has the intent to sell the security or whether it is ~~considered other-than-temporary~~more likely than not that the Company will be required to sell the security prior to recovery of its amortized cost basis. If the Company has an intent to sell, or if it is more likely than not that the Company will be required to sell a debt security in an unrealized loss position before recovery of its amortized cost basis, the Company will write down the security to its fair value and ~~is recognized~~record the corresponding charge as a component of other income, net. No declines in value were deemed to be credit losses as of January 1, 2023, the ~~Condensed Consolidated Statements~~adoption date of ~~Operations and Comprehensive Loss.~~Accounting Standards Update (“ASU”) 2016-13—Financial Instruments (Topic 326) Measurement of Credit Losses on Financial Instrument (“ASU 2016-23”), or during the three months ended March 31, 2023.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash, cash equivalents and marketable securities. Bank deposits are held by accredited financial institutions, and these deposits ~~may at times be~~are often in excess of insured limits. The Company limits its credit risk associated with cash and cash equivalents by placing them with financial institutions it believes are of high quality. ~~The~~While the Company has not experienced any losses on its deposits of cash or cash ~~equivalents.~~ equivalents as of March 31, 2023, in March 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation as receiver. At the time of the closure, the Company held a cash balance with SVB. In March 2023, the Company successfully transferred all funds from this SVB account to one of its other banks not affiliated with SVB without incurring any loss.

The Company’s available-for-sale investments primarily consist of high-grade corporate debt securities and potentially subject the Company to concentrations of credit risk. The Company has adopted investment guidelines that limit the amounts the Company may invest in any one type of investment and requires all investments held by the Company to be highly rated, thereby reducing credit risk exposure.

Research and Development Expenses

Research and development costs consist primarily of external costs related to clinical development, contract manufacturing and discovery as well as personnel costs. The Company estimates preclinical and clinical study and research expenses based on the services performed, pursuant to contracts with research institutions that conduct and manage nonclinical and clinical studies and research services on its behalf. The Company records the costs of research and development activities based upon the estimated amount of services provided but not yet invoiced and includes these costs in accrued liabilities in the Condensed Consolidated Balance Sheets. These costs are a component of the Company’s research and development expenses. The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers under the service agreements. The Company makes significant judgments and estimates in determining the accrued liabilities balance in each reporting period. As actual costs become known, the Company adjusts its accrued liabilities.

Net Loss per Share

Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock together with the number of additional shares of common stock that would have been outstanding if all potentially dilutive shares of common stock had been issued. The Company included the weighted-average of the pre-funded warrants issued in its private placement in the number of outstanding shares for calculating basic and diluted net loss per share because the shares issuable upon exercise of the pre-funded warrants will be issued for little to no consideration. The following table sets forth the computation of basic and diluted net loss per share during the periods presented (in thousands, except share and per share amounts):


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2022			2021			2022			2021			2023			2022
Numerator:
Net Loss	$	(7,896	)	$	(12,604	)	$	(34,044	)	$	(18,325	)	$	(6,034	)	$	(14,864	)
Denominator:
Weighted-average shares of common stock issued and outstanding		40,254,890			40,156,089			40,254,890			36,890,531			37,024,155			40,254,890
Less: weighted-average unvested common stock subject to repurchase		—			(194,020	)		—			(227,904	)
Weighted-average common stock outstanding used to calculate net loss per common share, basic and diluted		40,254,890			39,962,069			40,254,890			36,662,627
Weighted-average pre-funded warrants outstanding														27,818,181			—
Weighted-average shares used to calculate net loss per common share, basic and diluted														64,842,336			40,254,890
Net loss per common stock, basic and diluted	$	(0.20	)	$	(0.32	)	$	(0.85	)	$	(0.50	)	$	(0.09	)	$	(0.37	)

The following outstanding shares of potentially dilutive securities have been excluded from diluted net loss per common share for the periods presented, because their inclusion would be anti-dilutive:


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2022		2021		2022		2021		2023		2022
Stock options to purchase common stock		3,404,736		1,291,098		3,404,736		1,291,098		4,821,236		1,676,389
Common stock subject to repurchase		—		194,020		—		227,904
Restricted stock units										998,070		—
Total		3,404,736		1,485,118		3,404,736		1,519,002		5,819,306		1,676,389

Comprehensive Loss

The Company’s comprehensive loss is currently comprised of changes in unrealized ~~gain~~loss on available-for-sale securities.

Segment Reporting

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment.

Emerging Growth Company Status

The Company is an emerging growth company (“EGC”), as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an EGC or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these condensed consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

Recently Adopted Accounting Pronouncements

~~In February 2016, the FASB issued ASU 2016-02—Leases (Topic 842)~~, requiring the recognition of lease assets and liabilities on the balance sheet. The standard: (a) clarifies the definition of a lease; (b) requires a dual approach to lease classification similar to current lease classifications; and (c) causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease-term of more than twelve months. The standard was effective for public entities for fiscal years beginning after December 15, 2018 and is effective for nonpublic entities for fiscal years beginning after December 15, 2021. The Company adopted ASU 2016-02, as amended, by applying the modified retrospective approach for leases existing at, and entered into after January 1, 2022. As a result, prior periods are presented in accordance with the previous guidance in ASC 840, ~~Leases~~ (“ASC 840”). The Company has elected to apply the “practical expedient package,” which permits it to not reassess previous conclusions around lease identification, lease classification, and initial direct costs. Further, the Company made accounting policy elections to exclude leases with terms of 12 months or less from the recognition requirements and to not separate lease and non-lease components. On January 1, 2022, the Company recognized an initial right-of-use asset and lease liability of $~~0.8~~ million. The adoption of Topic 842 did not have an impact on the Company’s Condensed Consolidated Statements of Operations and Comprehensive Loss and did not require recognition of a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company elected to continue applying the guidance under ASC 840 for comparative periods, as allowed in Topic 842.

~~Recently Issued Accounting Pronouncements Not Yet Adopted~~

In June 2016, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued ASU ~~2016-13—Financial Instruments (Topic 326) Measurement of Credit Losses on Financial Instrument~~ ~~(“CECL”),~~2016-23, which requires an allowance for expected credit losses on financial assets be recognized as early as day one of the instrument. This ASU departs from the incurred loss model which means the probability threshold is removed. It considers more forward-looking information and requires the entity to estimate its credit losses as far as it can reasonably estimate. The ASU was effective for fiscal years beginning after December 15, 2019 for public business entities that are U.S. Securities and Exchange Commission ~~(SEC)~~(“SEC”) filers, excluding entities eligible to be smaller reporting companies ~~(SRC)~~(“SRC”). For all other public business entities, including SRC, the ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. ~~Early adoption is permitted for fiscal years beginning after December 15, 2018.~~ The ~~Company expects to adopt the new standard in the annual reporting period beginning after December 15, 2022 and does not expect the~~Company's adoption of ~~this~~ ASU to2016-13 as of January 1, 2023 did not have a material impact on the condensed consolidated financial ~~statements.~~statements and accompanying notes.

3. Fair Value Measurement

Financial assets and liabilities are recorded at fair value on a recurring basis in the Condensed Consolidated Balance Sheets. The carrying values of the Company’s financial assets and liabilities, including cash and cash equivalents, prepaids and other current assets, accounts payable and accrued expenses approximate their fair value due to the short-term maturity of these instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. Assets and liabilities recorded at fair value in the condensed consolidated financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels are directly related to the amount of subjectivity with the inputs to the valuation of these assets or liabilities as follows:

Level 1—Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 2—Inputs (other than quoted prices included in Level 1) that are either directly or indirectly observable inputs for similar assets or liabilities. These include quoted prices for identical or similar assets or liabilities in active markets and quoted prices for identical or similar assets of liabilities in markets that are not active;

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The following table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values as of ~~September 30, 2022~~March 31, 2023 (in thousands):

September 30, 2022

Level 1

Level 2

Level 3

Aggregate
fair value

Assets:

U.S. government treasury securities

11,986

—

—

11,986

Fixed income securities

—

13,763

—

13,763

Asset backed securities

—

5,348

—

5,348

Total assets

$
11,986

$
19,111

$
—

$
31,097


	March 31, 2023
	Level 1		Level 2		Level 3		Aggregate fair value
Assets:
Money market fund	$	18,092		—		—	$	18,092
U.S. government treasury securities		22,187		—		—		22,187
Fixed income securities		—		4,179		—		4,179
Asset backed securities		—		583		—		583
Total assets	$	40,279	$	4,762	$	—	$	45,041

The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values as of December 31, ~~2021~~2022 (in thousands):


	December 31, 2021								December 31, 2022
	Level 1		Level 2		Level 3		Aggregate Fair Value		Level 1		Level 2		Level 3		Aggregate Fair Value
Assets:
Money market funds	$	3,180	$	—	$	—	$	3,180
U.S. government treasury securities									$	25,442	$	—	$	—	$	25,442
Fixed income securities		—		54,224		—		54,224		—		6,639		—		6,639
Asset backed securities		—		28,351		—		28,351		—		1,123		—		1,123
Total assets	$	3,180	$	82,575	$	—	$	85,755	$	25,442	$	7,762	$	—	$	33,204

The contractual maturities of available-for-sale securities as of ~~September 30, 2022~~March 31, 2023 are as follows (in thousands):


Within one year	$	14,033	$	4,179
Within one to five years		5,078		583
Total contractual maturities	$	19,111	$	4,762

The Company’s financial instruments consist of Level 1 and Level 2 assets. The Company values its Level 1 assets based on quoted prices in active markets for identical instruments. Level 1 assets consist primarily of highly liquid money market funds and U.S. government treasury securities that are included in cash equivalents. The Company values its Level 2 assets consisting of ~~certificates of deposits,~~ fixed income securities and asset backed securities with the help of a third-party pricing service using quoted market prices for similar instruments or nonbinding market prices that are corroborated by observable market data. The Company uses such pricing data as the primary input, to which no material adjustments have been made during the periods presented, to make its determination and assessments as to the ultimate valuation of these assets. The fair values of these instruments approximate amortized cost.

There were no transfers into or out of Level 3 securities during the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023.

5. Balance Sheet Components

~~Property and Equipment, net~~

~~Property and equipment, net consists of the following~~:

September 30,

December 31,

2022

2021

Laboratory equipment

$
561

$
837

Furniture and fixtures

14

307

Construction in process

—

104

Total property and equipment

575

1,248

Less: accumulated depreciation

(575
)

(541
)
Total property and equipment, net

$
—

$
707

~~Depreciation expense for property and equipment was $~~0 ~~and $48,000~~ ~~for the three months ended September 30, 2022 and 2021, respectively, and $0.6~~ ~~million and $0.1~~ ~~million for the nine months ended September 30, 2022 and 2021, respectively.~~

Accrued Liabilities

Accrued liabilities consist of the following:


	September 30,		December 31,		March 31,		December 31,
	2022		2021		2023		2022
Accrued research and development	$	1,314	$	1,575	$	1,237	$	1,222
Accrued general and administrative		230		996		195		271
Accrued payroll and employee benefits		727		1,132		430		1,194
Total accrued liabilities	$	2,271	$	3,703	$	1,862	$	2,687

5.6. Equity and Stock-Based Compensation

Securities Purchase Agreement

In January 2023, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with the institutional accredited investors named therein (the “Investors”), pursuant to which the Company issued and sold to the Investors in a private placement (the “Private Placement”) pre-funded warrants (the “Pre-Funded Warrants”) to purchase an aggregate of 30,909,090 shares (the “Warrant Shares”) of the Company’s common stock. Each Pre-Funded Warrant has an exercise price of $0.01 per Warrant Share. The purchase price per Pre-Funded Warrant was $0.54. The Company received net proceeds of $16.6 million in the Private Placement, after deducting $0.1 million of offering expenses payable by the Company.

The Pre-Funded Warrants issued in the Private Placement provide that the holder of the Pre-Funded Warrants will not have the right to exercise any portion of its Pre-Funded Warrants if such holder, together with its affiliates and any other persons whose beneficial ownership of common stock would be aggregated with the holder for purposes of Section 13(d) or Section 16 of the Securities Exchange Act of 1934, as amended, would beneficially own in excess of 35% of the number of shares of common stock outstanding immediately after giving effect to such exercise. The Warrant Shares will also be subject to certain registration rights under the Company’s Amended and Restated Investors’ Rights Agreement. As of March 31, 2023, none of the Pre-Funded Warrants have been exercised.

Treasury Stock

In February 2023, in connection with entering into the Purchase Agreement with its founder, a related party who is the former chief executive officer of the Company and a greater than 5% owner of the Company's common stock at the time of the transaction, and other stockholders, the Company repurchased 9,086,441 shares of common stock for an aggregate price of $3.0 million. The repurchased common stock was subsequently retired in March 2023. The Company recorded the shares repurchased using the cost method.

2019 Equity Incentive Plan

In December 2019, the board of directors of the Company (the “Board”) adopted the 2019 Equity Incentive Plan (the “2019 Plan”). The 2019 Plan provides for the grant of share-based awards, including stock options and restricted stock units, to employees, directors and non-employee service providers of the Company. The number of shares of common stock reserved for issuance under the 2019 Plan automatically increases on January 1 of each calendar year, starting on January 1, 2020 and continuing through January 1, 2029, in an amount equal to the least of (i) 5% of the total number of shares of the Company’s capital stock issued and outstanding on the last day of the calendar month before the date of each automatic increase; (ii) 1,000,000 shares; or (iii) a lesser number of shares determined by the Company’s board of directors. Subject to this provision, the Company added 1,824,900 shares available for grant to the 2019 Plan effective January 1, ~~2022.~~2023. As of ~~September 30, 2022,~~March 31, 2023, there were approximately ~~6,825,149~~6,235,479 shares available for future grants.

2021 Employee Stock Purchase Plan

In January 2021, the Board adopted the 2021 Employee Stock Purchase Plan (the “2021 ESPP”). The purpose of the 2021 ESPP is to secure the services of new employees, to retain the services of existing employees and to provide incentives for such individuals to exert maximum efforts toward the Company’s success. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Code for U.S. employees. The number of shares of common stock reserved for issuance under the 2021 ESPP automatically increases on January 1 of each calendar year, starting on January 1, 2022 and continuing through January 1, 2031, in an amount equal to the lesser of (i) 1% of the total number of shares of the Company’s capital stock issued and outstanding on the last day of the calendar month before the date of each automatic increase; or (ii) a lesser number of shares determined by the Board. Subject to this provision, the Company added 402,548 shares available for grant to the 2021 ESPP effective January 1, ~~2022.~~2023. As of ~~September 30, 2022,~~March 31, 2023, there were approximately ~~791,251~~1,193,799 shares available for future grants under the 2021 ESPP. As of ~~September 30, 2022,~~March 31, 2023, no shares of common stock had been purchased under the 2021 ESPP.

2022 Inducement Plan

In March 2022, the Board adopted the 2022 Inducement Plan. The 2022 Inducement Plan is a non-stockholder approved stock plan under which the Company may grant equity awards to induce highly-qualified prospective officers and employees who are not currently employed by the Company to accept employment and provide them with a proprietary interest in the Company. The Company intends that the 2022 Inducement Plan be reserved for persons to whom the Company may issue securities without stockholder approval as an inducement pursuant to Nasdaq Marketplace Rule 5635(c)(4). The number of shares of common stock reserved for issuance under the 2022 Inducement Plan was initially determined to be 1,000,000 shares. As of ~~September 30, 2022,~~March 31, 2023, there were 1,000,000 shares available for future grants under the 2022 Inducement Plan.

Stock Option Awards

~~The total intrinsic value of stock options exercised was $3.0~~ ~~million for the nine months ended September 30, 2021.~~

The weighted average fair value per share of options to purchase common stock granted was $~~0.90~~0.39 and $~~8.59~~1.47 for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively.

The following table summarizes stock-based compensation expense for employees, which was included in the condensed consolidated statements of operations and comprehensive loss as follows (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

2022

2021

2022

2021

Research and development

$
46

$
224

$
596

$
1,213

General and administrative

154

131

1,179

477

Total stock-based compensation expense

$
200

$
355

$
1,775

$
1,690

At ~~September 30, 2022,~~March 31, 2023, the total compensation cost related to unvested stock-based awards granted under the 2019 Plan but not yet recognized was approximately $2.2 million, which is expected to be recognized over a weighted-average period of approximately ~~3.5~~3.3 years.

At March 31, 2023, the total compensation cost related to unvested restricted stock units granted under the 2019 Plan but not yet recognized was approximately $0.4 million, which is expected to be recognized over a weighted-average period of approximately 2.9 years.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto as of December 31, ~~2021~~2022 and ~~2020~~2021 and for each of the two years in the period ended December 31, ~~2021~~2022 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on March ~~24, 2022.~~23, 2023. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to ~~"the~~“the company,"” “we,” “us,” and “our” refer to Landos Biopharma, Inc. together with its subsidiaries.

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements by the words “may,” “might,” “will,” ~~��could,~~“could,” “would,” “should,” “expect,” “intend,” “plan,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue” and “ongoing,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. You should refer to “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 and in ~~"Item~~“Item 1a. Risk ~~Factors"~~Factors” below for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements.

We are a clinical-stage biopharmaceutical company focused on the ~~discovery and~~ development of novel, oral, once-daily therapeutics for patients with ~~autoimmune~~certain immunology diseases. ~~We believe we were~~Our core expertise is the ~~first to identify and~~development of compounds that target ~~LANCL2, NLRX1 and PLXDC2, which are immunometabolic pathways or targets. We believe that these~~ novel pathways ~~are~~ at the interface of immunity and metabolism. Based on our understanding of the role that cellular metabolic pathways have on modulating inflammatory responses, we aim to inhibit these inflammatory responses by changing the metabolic processes in target cells. We have identified seven novel immunometabolic pathways or targets based on predictions of immunometabolic function using a proprietary advanced artificial intelligence-based integrated computational and experimental precision medicine platform. Our near-term focus is on our clinical-stage programs including omilancor for the treatment of ulcerative colitis, or UC, NX-13 for the treatment of UC, and LABP-104 for the potential treatment of systemic lupus erythematosus, or SLE, and rheumatoid arthritis, or RA. We believe the therapeutics we ~~discover and~~ develop, if approved, could have a significant positive impact on the quality of life of patients suffering from ~~autoimmune~~immunology diseases.

~~Omilancor~~Our current focus and lead candidate is NX-13, a ~~gut-restricted~~novel, oral therapeutic that is the first product candidate designed to engage the novel target lanthionine synthetase C-like protein 2, or LANCL2, a membrane receptor that has been shown to modulate immunological mechanisms that are associated with autoimmune diseases such as UC.gut-selective NLRX1 agonist. We are developing ~~omilancor~~NX-13 as a once-daily oral treatment ~~initially~~ for ~~UC. We are working on a reformulation of omilancor, including dose selection and assessment, and expect to announce both the timing and the next steps in the development of omilancor later this year.~~

~~NX-13 is a novel, gut-restricted oral therapeutic~~ulcerative colitis, or UC, that targets NOD-like receptor X1, or NLRX1, a mitochondria-associated receptor that has been associated with the modulation of inflammatory cytokines for UC. NX-13 is designed to target NLRX1 and induce anti-inflammatory effects in CD4+ T cells and other ~~immune~~ cells in the gastrointestinal tract.

We ~~are developing NX-13 as a once-daily oral treatment for UC. In August 2022, we~~ announced ~~positive~~ top-line results ~~for the~~from our NX-13 Phase 1b trial ~~of NX-13~~ in ~~moderate~~ UC ~~patients.~~patients in August 2022. The data ~~from this trial~~ showed ~~that NX-13 was~~favorable safety and tolerability profiles across a range of doses, as well tolerated following evaluation of multiple doses over four weeks compared with a placebo. While the study was shorter in duration than standard induction trials and not powered for efficacy, there was an indication ofas signals of clinical improvement as soon as two weeks in patients’ symptoms and four weeks by endoscopy in exploratory endpoints. We ~~expect to announce~~believe that these early signals, as well as the ~~timing~~data from long-term toxicology studies, support the potential of NX-13 as a new treatment for UC. We are continuing an in-depth analysis of the ~~initiation~~clinical, pharmacokinetic, or PK, and pharmacodynamic, or PD, data for NX-13. A preliminary analysis demonstrated promising signals of both target engagement and molecular dose response among the 250mg and 500mg immediate release, or IR, doses. In the second quarter of 2023, we initiated the NEXUS trial, which is a Phase 2 proof-of-concept clinical trial for NX-13. The NEXUS trial will be dose ranging, blinded, placebo-controlled and statistically powered. We are on track for first patient enrollment for the NEXUS trial in the second quarter of ~~NX-13 in moderate-to-severe UC patients later~~2023, and we expect to report top-line data from this ~~year.~~trial by the fourth quarter of 2024.

In addition to NX-13, we have discovered several preclinical product candidates, comprising the following:

In February 2023, we entered into an Asset Purchase and Redemption Agreement, or the Purchase Agreement, with Dr. Bassaganya-Riera, a related party who is our former Chief Executive Officer and a ~~novel, systemically bioavailable, oral therapeutic that targets LANCL2. We are developing LABP-104 as a once-daily oral treatment for SLE and/or RA. The pathogenesis~~greater than 5% owner of ~~SLE is connected to defective apoptosis leading to stimulation of B cells by dendritic cells and CD4+ T cells to produce auto-antibodies. These antibodies activate~~our common stock at the complement system and deposit in organs, leading to inflammation and tissue damage. We believe the activation of LANCL2 can intercept these events upstream through skewing of CD4+ T cells to regulatory phenotypes and maintenancetime of the ~~metabolic requirements for autophagy. We conducted~~transaction, Raquel Hontecillas and certain other stockholders, or together the Purchasers, whereby the Purchasers acquired (i) all of our right, title and interest in omilancor, LABP-104 and LABP-111 and any such derivatives and analogs that target LANCL proteins, or together the Acquired Compounds, (ii) a ~~Phase 1a trial of LABP-104 in healthy volunteers~~worldwide, perpetual, irrevocable, fully-paid up, royalty-free, exclusive, sublicensable and ~~expect topline results to be reported later this year. We expect to announce both~~transferable license grant under the ~~timing~~intellectual property rights retained by us and ~~the next steps~~necessary or useful for the development, manufacture and commercialization of ~~LABP-104 also later this year.~~the Acquired Compounds, (iii) a royalty agreement providing, among other things, for the payment by us to the Purchasers of a royalty of 2% of all net sales by us of any products containing certain compounds that we retained following the closing under the Purchase Agreement and (iv) $3,000,000 in cash in exchange for (x) 9,086,441 shares of our common stock held by the Purchasers and (y) a royalty agreement providing, among other things, for the payment by the Purchasers to us of a royalty of 6% of all net sales by the Purchasers of any products containing any of the Acquired Compounds in consideration for the acquired intellectual property rights.

In May 2021, we entered into an exclusive collaboration and license agreement, or the LianBio Agreement, with LianBio Respiratory Limited, or ~~LianBio,~~Lian, pursuant to which we granted ~~LianBio~~Lian an exclusive license, or the License, to develop, manufacture and commercialize ~~OMILANCOR~~NX-13 and NX-13 in Greater China (mainland China, Hong Kong, Taiwan and Macau), South Korea, Singapore, Thailand, Vietnam, Myanmar, Cambodia, Indonesia, and the Philippines, or the Territory. We received an upfront cash payment of $18.0 million in connection with the execution ofomilancor. In February 2023, we amended the LianBio Agreement to no longer cover omilancor and developmental milestones events were amended to reflect the transfer of omilancor. Subsequent to the amendment, we are eligible to receive development milestone payments of up to ~~$95.0~~$40.0 million ~~and~~as well as sales milestone payments of up to $105.0 million. We are also eligible to receive tiered low-double-digit royalties based on future net sales of ~~omilancor and~~ NX-13 in the ~~Territory,~~territory comprising the People’s Republic of China, Hong Kong, Macau, Taiwan, Cambodia, Indonesia, Myanmar, Philippines, Singapore, South Korea, Thailand and Vietnam, subject to reductions in specified circumstances.

We have a limited operating history. Since inception, our operations have focused on developing our clinical and preclinical product candidates, organizing and staffing our company, business planning, raising capital, establishing our intellectual property portfolio and conducting clinical trials and preclinical studies. We do not have any product candidates approved for sale and have not generated any revenue from product sales. ~~We have funded our operations primarily through the sale of equity securities.~~

Since our inception in 2017, we have funded operations through the issuance of convertible preferred stock and convertible promissory notes, through proceeds from our initial public offering, or IPO, ~~and~~ through the upfront payment from a license and collaboration agreement with a related ~~party.~~party and through the sale of pre-funded warrants in a private placement. As of ~~September 30, 2022,~~March 31, 2023, we had an accumulated deficit of ~~$128.2~~$139.5 million and we expect to incur substantial operating losses for at least the next several years. As ~~a result,~~such, we will need to raise additional capital to initiate and complete our planned clinical trials, to continue and expand our research and development operations that support our planned ~~discovery,~~ development and clinical and regulatory activities, and to adequately prepare for commercialization of our product candidates that may achieve regulatory approval in the future. As of ~~September 30, 2022,~~March 31, 2023, we had cash, cash equivalents and marketable securities of ~~$48.0 million, which we~~$50.0 million. We believe that our existing cash, cash equivalents and marketable securities as of March 31, 2023, will be sufficient to fund our ~~planned operations for at least the next 12 months. Upon completion of our portfolio prioritization review later this year, we will provide further details into our~~ operating ~~plans~~expenses and capital ~~resources.~~requirements into the first half of 2025. We anticipate that our expenses may increase significantly in connection with our ongoing activities, as we:

Research and development expenses consist primarily of costs incurred in connection with our research activities, including our discovery efforts and the development of our product candidates, and include:

We expense research and development costs as incurred. We track external development costs by product candidate or development program, but we do not allocate personnel costs or certain other costs to specific development programs or product candidates.

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have a higher development ~~costs~~cost than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. While we expect our research and development expenses to remain relatively consistent in the near-term as we complete our ongoing clinical trials, and as a result of our strategic review of our clinical programs, weWe expect that our research and development expenses will ~~increase~~be lower in 2023 relative to 2022 as a result of wind down of previous clinical trial activities. However, in the ~~long-term~~long term, we expect that they will increase and will comprise a larger percentage of our total expenses as we progress and complete our ongoing clinical trials, initiate new clinical trials, ~~hire additional research and development staff,~~ continue to discover and develop additional product candidates and prepare regulatory filings for any product candidates that successfully complete clinical trials.

The successful development of our product candidates is highly uncertain. At this time, we cannot determine with certainty the duration and costs of our existing and future clinical trials of our product candidates or any other product candidate we may develop or if, when, or to what extent we will generate revenue from the potential commercialization and sale of any product candidate for which we obtain marketing approval. We may never succeed in obtaining marketing approval for any product candidate. The duration, costs and timing of clinical trials and development of our product candidates and any other product candidate we may develop in the future will depend on a variety of factors, including:

Our expenditures are subject to additional uncertainties, and we may never succeed in achieving regulatory approval for our product candidates. We may obtain unexpected results from our clinical trials. We may elect to discontinue, delay or modify clinical trials of our product candidates. A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the U.S. Food and Drug Administration, or FDA, or another regulatory authority were to require us to conduct clinical trials beyond those that we anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant

delays in our clinical trials due to patient enrollment or other reasons, we would be required to expend significant additional financial resources and time on the completion of clinical development.

General and administrative expenses consist primarily of salaries and other related costs for personnel in our executive, finance, business development and administrative functions. General and administrative expenses also include legal fees relating to intellectual property and corporate matters, professional fees for accounting, auditing, tax and consulting services, insurance costs, travel expenses and facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.

We expect that our general and administrative expenses will ~~remain relatively consistent for~~be slightly lower in 2023 relative to 2022 as we focus our resources toward the ~~foreseeable future; however,~~development of NX-13. However, in the long term, we expect that they will increase as we increase our personnel headcount to support our expanded infrastructure, including the development of a commercialization infrastructure for any product candidates for which we may obtain regulatory approval. Our expenditures are subject to uncertainties, including the terms and timing of regulatory approvals, and the expense of filing, prosecuting, defending and enforcing any patent claims or other intellectual property rights.

~~Other~~Interest and other income, net, primarily consists of grant income received under the NIH grant agreement and interest income received from available-for-sale marketable securities. We were awarded a grant by the NIH for a phase 2 proof-of-concept efficacy study of omilancor in Crohn's disease patients. The grant award provided for reimbursement of actual, allowable costs incurred.

Comparison of the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~

The following table summarizes our results of operations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2022			2021			2022			2021			2023			2022
Revenue - license fee:	$	—		$	—		$	—		$	18,000
Operating expenses:
Research and development		4,862			9,344			22,266			28,120		$	3,326		$	10,800
General and administrative		2,967			3,059			11,782			8,300			3,153			4,153
Total operating expenses		7,829			12,403			34,048			36,420			6,479			14,953
Loss from operations		(7,829	)		(12,403	)		(34,048	)		(18,420	)		(6,479	)		(14,953	)
Other income:
(Loss) gain from foreign exchange		—			(10	)		26			3			(4	)		1
Other (expense) income, net		(67	)		(191	)		(22	)		92
Other (loss) income, net		(67	)		(201	)		4			95
Interest and other income, net														449			88
Other income, net														445			89
Net loss	$	(7,896	)	$	(12,604	)	$	(34,044	)	$	(18,325	)	$	(6,034	)	$	(14,864	)

Research and development expenses were ~~$4.9~~$3.3 million for the three months ended ~~September 30, 2022~~March 31, 2023 compared to ~~$9.3~~$10.8 million for the three months ended ~~September 30, 2021.~~March 31, 2022. The decrease of ~~$4.4~~$7.5 million was primarily attributed to ~~a decrease in CRO~~reduced clinical activities for our omilancor and LABP-104 programs due to the wind down of the related clinical ~~data management costs,~~trials, as well as a decrease in compensation costs due to the strategic review of our clinical programs that resulted in the termination of further enrollment in two clinical trials of omilancor for the treatment of Crohn's Disease, or CD. Research and development expenses were $22.3 million for the nine months ended September 30, 2022 compared to $28.1 million for the nine months ended September 30, 2021. The decrease of $5.8 million was primarily attributed to a decrease in clinical activities and manufacturing costs related to our omilancor program due to the termination of further enrollment in two clinical trials of omilancor for the treatment of CD, partially offset by an increasedecreases in consulting costs and ~~clinical activities related to our NX-13 and LABP-104 programs.~~depreciation expense.

The following table summarizes our research and development expenses by product candidate for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2022		2021		2022		2021		2023			2022
External costs by clinical program:
Omilancor	$	1,118	$	4,951	$	7,366	$	15,515	$	(55	)	$	5,251
NX-13		2,124		1,526		6,471		4,950		1,752			1,881
LABP-104		182		503		1,472		1,370		21			773
Total external costs by clinical program:		3,424		6,980		15,309		21,835		1,718			7,905
Compensation		796		1,446		3,333		4,129		1,280			1,536
Other		642		918		3,624		2,156		328			1,359
Total research and development expenses	$	4,862	$	9,344	$	22,266	$	28,120	$	3,326		$	10,800

General and administrative expenses were ~~$3.0~~$3.2 million for the three months ended ~~September 30, 2022~~March 31, 2023 compared to ~~$3.1~~$4.2 million for the three months ended ~~September 30, 2021.~~March 31, 2022. The decrease of ~~$0.1~~$1.0 million was primarily attributable to a decrease in consulting costs and stock-based compensation, as well as a prior year loss on lease termination that didn’t recur in the current period, partially offset by increases in ~~employee-related expenses, including stock-based compensation, as well as an increase in~~ legal ~~fees. General and administrative expenses were $11.8 million for~~fees associated with the nine months ended September 30, 2022 compared to $8.3 million for the nine months ended September 30, 2021. The increase of $3.5 million was primarily attributable to increases in employee-related expenses, including stock-based compensation, legal costs, recruiting fees, and a one-time charge incurred in connection with a lease termination, partially offset by a decrease in consulting costs.Purchase Agreement.

Since our inception, we have incurred significant operating losses and negative cash flows from our operations. We expect to incur significant expenses and operating losses for the foreseeable future as we advance the preclinical and clinical development of our research programs and product candidates. As a result, we will need additional capital to fund our operations, which we may obtain from additional equity or debt financings, collaborations, licensing arrangements or other sources.

We do not currently have any approved products and have never generated any revenue from product sales. To date, we have financed our operations primarily through the issuance of convertible preferred stock and convertible promissory notes, proceeds from our IPO, ~~and~~ the upfront payment from the LianBio ~~Agreement. On February 3, 2021, we completed our IPO~~Agreement and the sale of pre-funded warrants in ~~which we issued and sold 6,250,000 shares of our common stock and received net proceeds of $90.5 million, after deducting underwriters’ discounts and commissions and expenses payable by us.~~a private placement.

In March 2022, we filed a shelf registration statement on Form S-3, or the 2022 Shelf Registration Statement, with the SEC. The 2022 Shelf Registration Statement became effective in August 2022. The 2022 Shelf Registration Statement permits the offering, issuance and sale by us of up to a maximum aggregate offering price of $200.0 million of common stock, preferred stock, debt securities and warrants in one or more offerings and in any combination. As of ~~September 30, 2022,~~March 31, 2023, we had $200.0 million of common stock remaining that can be sold under the 2022 Shelf Registration Statement, although this amount will be limited for as long as we are subject to General Instruction I.B.6 of Form S-3, which limits the amount of funds we can raise through primary public offerings of securities in any twelve-month period using a registration statement on Form S-3 to one-third of the aggregate market value of the shares of our common stock held by non-affiliates. Therefore, we will be limited in the amount of proceeds we are able to raise by selling shares of our common stock using Form S-3, including the 2022 Shelf Registration Statement, until such time as our public float held by non-affiliates exceeds ~~$75~~$75.0 million.

In January 2023, we entered into a securities purchase agreement, or the Securities Purchase Agreement, with the institutional accredited investors named therein, or the Investors, pursuant to which we issued and sold to the Investors in a private placement, or the Private Placement, pre-funded warrants, or the Pre-Funded Warrants, to purchase an aggregate of 30,909,090 shares, or the Warrant Shares, of our common stock. Each Pre-Funded Warrant has an exercise price of $0.01 per Warrant Share. The purchase price per Pre-Funded Warrant was $0.54. The Pre-Funded Warrants issued in the Private Placement are exercisable at any time but provide that the holder of the Pre-Funded Warrants will not have the right to exercise any portion of its Pre-Funded Warrants if such holder, together with its affiliates and any other persons whose beneficial ownership of common stock would be aggregated with the holder for purposes of Section 13(d) or Section 16 of the Securities Exchange Act of 1934, as amended, would beneficially own in excess of 35% of the number of shares of common stock outstanding immediately after giving effect to such exercise. The Warrant Shares will also be subject to certain registration rights under our Amended and Restated Investors’ Rights Agreement. We received net proceeds of $16.6 million in the Private Placement, after deducting $0.1 million of offering expenses payable by us.

As of ~~September 30, 2022,~~March 31, 2023, we had ~~$48.0~~approximately $50.0 million in cash, cash equivalents and marketable securities and an accumulated deficit of ~~$128.2~~$139.5 million. We had no indebtedness as of March 31, 2023.

The following table summarizes our sources and uses of cash for each of the periods set forth below (in thousands):

During the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, we used cash in operating activities of ~~$42.1~~$8.2 million, reflecting a net loss of ~~$34.0~~$6.0 million, partially offset by non-cash charges of ~~$3.4~~$0.3 million and a net change of ~~$11.4~~$2.4 million in our operating assets and liabilities. The non-cash charges consist primarily of ~~$1.8 million of~~ stock-based compensation ~~expense, $1.1 million related to the amortization of the premium on marketable securities and $0.6 million of depreciation~~ expense. The net change in our operating assets and liabilities was primarily due to a decrease in accounts payable and other liabilities.

During the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, we used cash in operating activities of ~~$15.0~~$16.5 million, reflecting a net loss of ~~$18.3~~$14.9 million, partially offset by non-cash charges of ~~$2.9 million.~~$1.7 million and a net change of $3.4 million in our operating assets and liabilities. The non-cash charges consist primarily of ~~$1.7~~$0.9 million of stock-based compensation expense, ~~and $1.2~~$0.4 million of depreciation expense, $0.3 million related to the amortization of the premium on marketable ~~securities.~~securities and $0.1 million of non-cash expense related to the loss

recorded on the termination of an operating lease. The net change in our operating assets and liabilities was primarily due to a decrease in accounts payable, an increase in other liabilities and an increase in prepaid expenses and other assets.

Net cash provided by investing activities during the three months ended March 31, 2023 was $3.1 million, consisting primarily of proceeds from sales and maturities of marketable securities. Net cash provided by investing activities for the ~~nine~~three months ended ~~September 30,~~March 31, 2022 was ~~$62.6~~$19.5 million, consisting ~~primarily~~ of proceeds from sales and maturities of marketable securities, partially offset by purchases of available-for-sale marketable securities. Net cash used in investing activities for the nine months ended September 30, 2021 was $60.5 million, consisting primarily of purchases of marketable securities and property and equipment, partially offset by proceeds from sales and maturities of marketable securities.

Net cash provided by financing activities induring the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2023 of ~~$91.0~~$13.7 million was primarily related to net proceeds received from ~~our IPO.~~the issuance of pre-funded warrants for the purchase of common stock, partially offset by the repurchase and retirement of common stock.

To date, we have not generated any revenues from the commercial sale of approved drug products, and we do not expect to generate substantial revenue for at least the next few years. If we fail to complete the development of our product candidates in a timely manner or fail to obtain their regulatory approval, our ability to generate future revenue will be compromised. We do not know when, or if, we will generate any revenue from our product candidates, and we do not expect to generate significant revenue unless and until we obtain regulatory approval of, and commercialize, our product candidates. Further, we do not know when, or if, we will generate any additional revenue under the LianBio Agreement or pursuant to the royalty rights under the Purchase Agreement as future payments are conditioned upon the achievement of development and commercialization milestones that are uncertain as of this date. ~~Although we~~We expect our expenses to ~~remain relatively consistent in the near-term, we expect our expenses to~~proportionately increase ~~in the long-term~~ in connection with our ongoing activities, particularly as we continue the research and development of, continue or initiate ~~additional~~ clinical trials of, and seek marketing approval for, our product candidates. In addition, if we obtain approval for any of our product candidates, we expect to incur significant commercialization expenses related to sales, marketing, manufacturing and distribution. We anticipate that we will need substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.

Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain process that takes many years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of product candidates that we do not expect to be commercially available in the near term, if at all.

We believe that our existing cash, cash equivalents and marketable securities as of March 31, 2023 will ~~enable us~~be sufficient to fund our ~~planned operations for at least the next 12 months. Upon completion of our portfolio prioritization review later this year, we will provide further details into our~~ operating ~~plans~~expenses and capital ~~resources.~~requirements into the first half of 2025. We have based these estimates on assumptions that may prove to be imprecise, and we could utilize our available capital resources sooner than we expect.

Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical drugs, it is difficult to estimate with certainty the amount of our working capital requirements. Our future funding requirements will depend on many factors, including:

Further, our operating results may change in the future, and we may need additional funds to meet operational needs and capital requirements associated with such operating plans.

Our future commercial revenue, if any, will be derived from sales of products that we do not expect to be commercially available for several years, if at all. Until such time, if ever, that we can generate product revenue sufficient to achieve profitability, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaboration agreements, other third-party funding, strategic alliances, licensing arrangements and marketing and distribution ~~arrangements or other sources.~~arrangements. Adequate additional financing may not be available to us on acceptable terms, or at all. We currently have no credit facility or committed sources of capital. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of existing stockholders. Pursuant to the Securities Purchase Agreement, the Investors are entitled to exercise the pre-funded warrants to purchase an aggregate of 30,909,090 shares of our common stock. If the Investors were to exercise their outstanding Pre-Funded Warrants, existing stockholders will recognize significant dilution. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through other third-party funding, collaboration agreements, strategic alliances, licensing arrangements or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.

Critical Accounting Policies and Significant ~~Judgments~~Judgements and Estimates

Our management’s discussion and analysis of financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the ~~United States.~~U.S. The preparation of our condensed consolidated financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, costs and expenses and the disclosure of contingent assets and liabilities in our condensed consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

Our significant accounting policies are described in Note 1 to the ~~condensed~~ consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021.~~2022. The accounting policies and estimates that are most critical to a full understanding and evaluation of our reported financial results are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021.~~2022. There were no material changes to our critical accounting policies and estimates during the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

We maintain “disclosure controls and procedures,” as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer (our principal executive officer and principal financial officer), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report. Based on such evaluation, our Chief Executive Officer has concluded that as of ~~September 30, 2022,~~March 31, 2023, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in this Quarterly Report was (a) reported within the time periods specified by SEC rules and regulations, and (b) communicated to our management, including our Chief Executive Officer, to allow timely decisions regarding any required disclosure.

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the quarter ended ~~September 30, 2022~~March 31, 2023 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Our management, including our Chief Executive Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud.

In the ordinary course of business, we may be involved in various legal or regulatory proceedings. We are not currently subject to any material legal or regulatory proceedings.

~~An investment~~There have been no material changes in ~~our common stock involves a high degree of risk. You should consider carefully~~ the ~~risks and uncertainties~~risk factors described ~~under Item 1A of Part I~~in “Item 1A. Risk Factors” of our Annual Report on Form 10-K ~~together with all other information contained or incorporated by reference in this report before you decide to invest in our common stock. If any of~~for the Risk Factors were to actually occur, our business, financial condition, results of operations and our potential future growth prospects could be materially and adversely affected. Under the circumstances, the trading price of our common stock could decline, and you may lose all or part of your investment.year ended December 31, 2022

If we fail to comply or regain compliance with the continued listing standards of the Nasdaq Global Market, we may be delisted and the price of our common stock, our ability to access the capital markets and our financial condition could be negatively impacted.

Our common stock is currently listed on Nasdaq under the symbol “LABP.” To maintain the listing of our common stock on the Nasdaq Global Market, we are required to meet certain listing requirements, including, among others, maintaining a minimum closing bid price of $1.00 per share. In June 2022, the decline in the market price of our common stock resulted in a notice that we are not in compliance with the minimum bid price requirement for continued listing on the Nasdaq Global Market. If we are not able to regain compliance within the compliance period offered by Nasdaq, we could be delisted, which would have a further material adverse effect on market prices of our common stock and stockholder liquidity. We intend to actively monitor the bid price of our common stock and will consider available options to regain compliance with the listing requirement; however, there can be no assurance that we will be able to regain compliance with the listing requirement or will otherwise be in compliance with other Nasdaq listing criteria. If the Nasdaq Global Market delists our securities from trading on its exchange for failure to meet the listing standards, we and our stockholders could face significant negative consequences including:

~~None.~~In January 2023, we entered into a securities purchase agreement, or the Securities Purchase Agreement, with the institutional accredited investors named therein, or the Investors, pursuant to which we issued and sold to the Investors in a private placement, or the Private Placement, pre-funded warrants, or the Pre-Funded Warrants, to purchase an aggregate of 30,909,090 shares, or the Warrant Shares, of our common stock, or the Common Stock. Each Pre-Funded Warrant has an exercise price of $0.01 per Warrant Share. The purchase price per Pre-Funded Warrant was $0.54. We received net proceeds of $16.6 million in the Private Placement, after deducting $0.1 million of offering expenses payable by us.

The Pre-Funded Warrants issued in the Private Placement are exercisable at any time but provide that the holder of the Pre-Funded Warrants will not have the right to exercise any portion of its Pre-Funded Warrants if such holder, together with its affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the holder for purposes of Section 13(d) or Section 16 of the Securities Exchange Act of 1934, as amended, would beneficially own in excess of 35.00% of the number of shares of Common Stock outstanding immediately after giving effect to such exercise. The Warrant Shares will also be subject to certain registration rights under our Amended and Restated Investors’ Rights Agreement.

We have relied on the exemption from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof. In connection with the Investors’ execution of the Securities Purchase Agreement, each Investor represented to us that it is an “accredited investor” as defined in Regulation D of the Securities Act and that the Pre-Funded Warrants purchased by it were acquired for its own account for investment only and with no present intention of distributing any of the Pre-Funded Warrants or Warrant Shares or any arrangement or understanding with any other persons regarding the distribution of the Pre-Funded Warrants or Warrant Shares.

OnIn February 3, 2021, our Registration Statement on Form S-1, as amended (File No. 333-252083), was declared effective in connection with our initial public offering, inpursuant to which we ~~issued and~~ sold an aggregate of 6,250,000 shares of our common stock at a price to the public ~~offering and received net proceeds~~ of ~~$90.5 million, after deducting underwriters' discounts and commissions and expenses payable by us.~~$16.00 per share. The joint book-running managers of our initial public offering were J.P. Morgan Securities LLC, Jefferies LLC and SVB Leerink LLC, and Raymond James & Associates, Inc. acted as lead manager. There has been no material change in the planned use of proceeds from our initial public offering as described in our prospectus filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC onin February 4, 2021.

The exhibits listed on the Exhibit Index are either filed or furnished with this report or incorporated herein by reference.

^ Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or

† Certain portions of this exhibit (indicated by asterisks) have been omitted because they are not material and would likely cause

# This certification is being furnished solely to accompany this Quarterly Report pursuant to 18 U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Delaware	81-5085535
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
P.O. Box 11239 Blacksburg, Virginia	24062
(Address of principal executive offices)	(Zip Code)


		Page

PART I.	FINANCIAL INFORMATION	3

Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss	4
	Condensed Consolidated Statements of Cash Flows	5
	Condensed Consolidated Statements of ~~Convertible Preferred Stock and~~Changes in Stockholders’ Equity	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1615
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2322
Item 4.	Controls and Procedures	2322

PART II.	OTHER INFORMATION	2423

Item 1.	Legal Proceedings	2423
Item 1A.	Risk Factors	2423
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2423
Item 6.	Exhibits	2524
Signatures		2625


Exhibit Number		Description
3.1		Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K (File No. 00139971), filed with the Securities and Exchange Commission on February 8, 2021).
3.2		Amended and Restated Bylaws (incorporated by reference to Exhibit 3.4 to the Company’s to the Company’s Registration Statement on Form S-1 (File No. 333-252083), filed with the Securities and Exchange Commission on January 28, 2021).
4.1		Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 001-39971), filed with the Securities and Exchange Commission on January 5, 2023).
10.1+*		Severance Agreement by and between the Company and Fabio Cataldi, effective as of September 5, 2022.
10.2^		Securities Purchase Agreement by and between the Company and the investors that are a party thereto, dated January 4, 2023 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-39971), filed with the Securities and Exchange Commission on January 5, 2023).
10.3		Amendment No. 1 to the Amended and Restated Investor’s Rights Agreement, dated January 10, 2023, by and between the Company and the investors that are a party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-39971), filed with the Securities and Exchange Commission on January 13, 2023).
10.4†^		Asset Purchase and Redemption Agreement, by and between the Company and the counter parties identified therein, dated February 28, 2023 (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K (File No. 001-39971), filed with the Securities and Exchange Commission on February 28, 2023).
10.5†		First Amendment to License and Collaboration Agreement, by and between the Company and LianBio Respiratory Limited, dated February 28, 2023 (incorporated by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K (File No. 001-39971), filed with the Securities and Exchange Commission on March 23, 2023.
31.1*		Certification of Principal Executive and Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*#		Certification of Principal Executive and Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		Inline XBRL Instance Document. – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH*		Inline XBRL Taxonomy Extension Schema Document.
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*		Cover Page Interactive Data File (embedded within the Inline XBRL document)


	Landos Biopharma, Inc.

Date: ~~November 10, 2022~~May 12, 2023	By:	/s/ Gregory Oakes
		Gregory Oakes
		President and Chief Executive Officer
		(Principal Executive and Financial Officer)


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


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


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒


	Convertible Preferred Stock						Common Stock
	Shares			Amounts			Shares		Amounts		Additional Paid-in Capital		Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Stockholders’ Equity
Balance at December 31, 2021		—		$	—			40,254,890	$	403	$	170,241	$	(225	)	$	(94,151	)	$	76,268
Stock-based compensation expense		—			—			—		—		941		—			—			941
Unrealized loss on available-for-sale securities		—			—			—		—		—		(242	)		—			(242	)
Net loss		—			—			—		—		—		—			(14,864	)		(14,864	)
Balance at March 31, 2022		—		$	-			40,254,890	$	403	$	171,182	$	(467	)	$	(109,015	)	$	62,103
Stock compensation expense		—			—			—		—		634		—			—			634
Unrealized gain on available-for-sale securities		—			—			—		—		—		75			—			75
Net loss		—			—			—		—		—		—			(11,284	)		(11,284	)
Balance at June 30, 2022		—		$	-			40,254,890	$	403	$	171,816	$	(392	)	$	(120,299	)	$	51,528
Stock compensation expense		—			—			—		—		200		—			—			200
Unrealized gain (loss) on available-for-sale securities		—			—			—		—		—		181			—			181
Net loss		—			—			—		—		—		—			(7,896	)		(7,896	)
Balance at September 30, 2022		—		$	—			40,254,890	$	403	$	172,016	$	(211	)	$	(128,195	)	$	44,013

	Convertible Preferred Stock						Common Stock
	Shares			Amounts			Shares		Amounts		Additional Paid-in Capital		Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Stockholders’ Equity
Balance at December 31, 2020		11,260,608		$	73,037			12,767,909	$	71	$	1,633	$	10		$	(55,729	)	$	(54,015	)
Conversion of preferred stock to common stock upon closing of the initial public offering		(11,260,608	)		(73,037	)		20,549,478		262		72,775		—			—			73,037
Issuance of common stock, net of issuance costs		—			—			6,250,000		63		90,443		—			—			90,506
Stock-based compensation expense		—			—			—		—		1,023		—			—			1,023
Exercise of stock options		—			—			299,282		3		555		—			—			558
Unrealized loss on available-for-sale securities		—			—			—		—		—		(112	)		—			(112	)
Net loss		—			—			—		—		—		—			(9,818	)		(9,818	)
Balance at March 31, 2021		—		$	-			39,866,669	$	399	$	166,429	$	(102	)	$	(65,547	)	$	101,179
Stock compensation expense		—			—			—		—		312		—			—			312
Exercise of stock options		—			—			34,217		—		64		—			—			64
Unrealized loss on available-for-sale securities		—			—			—		—		—		(40	)					(40	)
Net income		—			—			—		—		—					4,097			4,097
Balance at June 30, 2021		—		$	-			39,900,886	$	399	$	166,805	$	(142	)	$	(61,450	)	$	105,612
Stock compensation expense		—			—			—		—		355		—			—			355
Exercise of stock options		—			—			152,271		2		280		—			—			282
Unrealized gain (loss) on available-for-sale securities		—			—			—		—		—		273			—			273
Net loss		—			—			—		—		—					(12,604	)		(12,604	)
Balance at September 30, 2021		—		$	—			40,053,157	$	401	$	167,440	$	131		$	(74,054	)	$	93,918


	September 30, 2022
	Level 1		Level 2		Level 3		Aggregate fair value
Assets:
U.S. government treasury securities		11,986		—		—		11,986
Fixed income securities		—		13,763		—		13,763
Asset backed securities		—		5,348		—		5,348
Total assets	$	11,986	$	19,111	$	—	$	31,097