Table of Contents

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report onForm 10-Q contains forward-looking statements. All statements other than statements of historical fact are “forward-looking statements” for purposes of this Quarterly Report on Form 10-Q. In some cases, you can identify theseforward-looking statements by forward-looking wordsterminology such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “expect,” or similar expressions, or the negative or plural of these words or expressions. These forward-looking statements include statements concerning the following:

These statements are only current predictions and are subject to known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. We discuss many of these risks in greater detail under Part I, Item 1A. Risk Factors in our Annual Report on Form10-K for the year ended December 31, 20182019 filed with the Securities and Exchange Commission on April 1, 2019,March 16, 2020, and under Part II, Item 1A. Risk Factors in this Quarterly Report on Form 10-Q, each as may be amended or updated in our Quarterly Reports on Form10-Q. You In particular, while we expect the COVID-19 pandemic to adversely affect our business operations and financial results, the extent of the impact on our ability to progress with our research, development, manufacturing and regulatory efforts, including our plans to resolve the clinical hold placed by the FDA on the IND for LB-001, and the value of and market for our common stock, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the United States and in other countries, and the effectiveness of actions taken globally to contain and treat the disease. Any forward-looking statement in this Quarterly Report on Form 10-Q reflects our current view with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, industry and future growth. Given these uncertainties, you should not rely uponon these forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, weWe cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we are underassume no dutyobligation to update or revise anythese forward-looking statements whether as a result offor any reason, even if new information future events or otherwise, afterbecomes available in the date of this Quarterly Report onForm 10-Q, and you should not rely on statements contained herein as representing our views as of any date subsequent to the date of this Quarterly Report on Form10-Q.future.

Unless the context otherwise requires, the terms “LogicBio,” “LogicBio Therapeutics, Inc.,” the “Company,” “we,” “us,” “our” and similar references in this Quarterly Report on Form10-Q refer to LogicBio Therapeutics, Inc. and its subsidiaries.

PART I—FINANCIALFINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

LogicBio Therapeutics, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

See notes to unaudited condensed consolidated financial statements.

combination of both. right-of-use asset and a current andnon-current lease liability, as applicable. The Company elected notthen allocates the transaction price to recognize on the balance sheet leases with terms of one year or less. The Company typically only includes an initial lease term in its assessment of a leasing arrangement. Options to renew a lease are not included in the Company’s assessment unless there is reasonable certainty that the Company will renew the lease. The Company remeasures and relocates the consideration in a contract when there is a modification of a lease that is not accounted for as a separate contract. A lease modification that results in a separate contract, including when the modification grants the lessee an additional right of use that is not included in the original lease, is accounted for in the same manner as a new lease. The Company monitors its material leases on a quarterly basis.

Operating lease liabilities and their correspondingright-of-use assets are recordedeach performance obligation based on the present value of lease payments over the expected remaining lease term. Certain adjustments to theright-of-use asset may be required for items suchrelative standalone selling price and recognizes as incentives received. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rate, which reflects the fixed rate at which the Company could borrow on a collateralized basisrevenue the amount of the lease paymentstransaction price that is allocated to the respective performance obligation when (or as) control is transferred to the customer and the performance obligation is satisfied.

Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue in the same currency, for a similar term, in a similar economic environment. In transition to ASC 842,Company’s condensed consolidated balance sheets. If the Company utilized the remaining lease term of its leases in determining the appropriate incremental borrowing rates.

In accordance with ASC 842, components of a lease should be split into three categories: lease components (e.g., land, building, etc.),non-lease components (e.g., common area maintenance, consumables, etc.) andnon-components (e.g., property taxes, insurance, etc.). The fixed andin-substance fixed contract consideration, including any consideration related tonon-components, must be allocated based on the respective relative fair values to the lease components andnon-lease components.

Although separation of lease andnon-lease componentsperformance obligation is required, certain practical expedients are available. Entities may elect the practical expedient not to separate lease andnon-lease components. Rather, entities would account for each lease component and the relatednon-lease component together as a single component. For new and amended leases beginning in 2019 and after, the Company has elected to account for the lease andnon-lease components for leases for classes of all underlying assets together and allocate all of the contract consideration to the lease component only.

Investments

The Company determines the appropriate classification of its investments in debt securities at the time of purchase. All of the Company’s securities are classified asavailable-for-sale and are reported in short-term investments or long-term investments based on maturity dates and whether such assets are reasonably expected to be realizedsatisfied within the next twelve months this will be classified in cash or sold or consumed during the normal cycle of business.Available-for-sale investmentscurrent liabilities. Amounts recognized as revenue prior to receipt are recorded at fair value,as contract assets in the Company's balance sheets. If the Company expects to have an unconditional right to receive the consideration in the next twelve months, this will be classified in current assets. A net contract asset or liability is presented for each contract with unrealized gains or losses included in accumulated other comprehensive income (loss) on the Company’s Condensed Consolidated Balance Sheets, exclusive of other-than-temporary impairment losses, if any. Investments may be composed of corporate debt securities, commercial paper, U.S. government and agency securities and certificates of deposit.a customer.

Recently Adopted Accounting Pronouncements

In February 2016,On January 1, 2020, the Company adopted Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13No. 2016-02,, Measurement of Credit Losses on Financial Instruments “Leases (Topic 842),” which. This ASU requires that credit losses be reported using an entityexpected losses model rather than the incurred losses model that is currently used, and establishes additional disclosures related to recognize assets and liabilities arising from a lease for both financing and operating leases on their balance sheet date. ASUNo. 2016-02 is effective for fiscal years beginning after December 15, 2018. In July 2018, an amendment was made that allows companiescredit risks. For available-for-sale debt securities with unrealized losses, the optionstandard requires allowances to be recorded instead of usingreducing the effective dateamortized cost of the new standard as the initial application date (at the beginning of the period in which the new standard is adopted, rather than at the beginning of the earliest comparative period). This update includes a short-term lease exception for leases with a term of 12 months or less, in which a lessee can make an accounting policy election not to recognize the associated lease assets and lease liabilities on its balance sheet. Additionally, in March 2019, the FASB issued ASU2019-01,Leases (Topic 842): Codification Improvements (“ASUNo. 2019-01”). ASUNo. 2019-01 clarifies the transition guidance related to interim disclosures provided in the year of adoption. Lessees will continue to differentiate between finance leases (previously referred to as capital leases) and operating leases, using classification criteria that are substantially similar to the previous guidance. For lessees, the recognition, measurement, and presentation of expenses and cash flows arising from a lease did not significantly change from previous U.S. GAAP. The modified retrospective method includes several optional practical expedients that entities may elect to apply, as well as transition guidance specific to nonstandard leasing transactions. The Company adopted Topic 842 on January 1, 2019 using a cumulative-effect adjustment on the effective date of the standard, for which comparative periods are presented in accordance with the previous guidance under ASC 840.

In adopting Topic 842, the Company elected to utilize the available package of practical expedients permitted under the transition guidance within the new standard, which does not require the reassessment of the following: i) whether existing or expired arrangements are or contain a lease, ii) the lease classification of existing or expired leases, and iii) whether previous initial direct costs would qualify for capitalization under the new lease standard. Additionally, the Company made an accounting policy election to keep leases with a term of 12 months or less off its balance sheet.

Adoption of this standard resulted in the recording of $210 each of operating lease liabilities and aright-of-use asset on the Company’s condensed consolidated balance sheet on the effective date.investment. The adoption of thethis standard did not have a material effectimpact on the Company’s condensed consolidated financial statements of operations, comprehensive loss, cash flows or convertible preferred stock and stockholders’ equity (deficit). Refer to Note 10 forright-of-userelated disclosures. asset and liabilities recorded during the six months ended June 30, 2019.

Recently Issued Accounting Pronouncements

There have been no new accounting pronouncements or changes to accounting pronouncements during the sixthree months ended June 30, 2019,March 31, 2020, as compared to the recent accounting pronouncements described in Note 2 of the Company’s Annual Report on Form10-K for the year ended December 31, 2018,2019, which could be expected to materially impact the Company’s unaudited condensed consolidated financial statements.

3. FAIR VALUE MEASUREMENTS

The following tables present information about the Company’s financial assets measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values:

When developing fair value estimates, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. When available, the Company uses quoted market prices to measure fair value. The Company classifies its money market funds and U.S. Treasury securities asvaluation technique used to measure fair value for the Company's Level 1 and Level 2 assets underis a market approach, using prices and other relevant information generated by market transactions involving identical or comparable assets. If market prices are not available, the fair value measurement is based on models that use primarily market-based parameters including yield curves, volatilities, credit ratings and currency rates. In certain cases where market rate assumptions are not available, the Company is required to make judgments about assumptions market participants would use to estimate the fair value of a financial instrument.

The Company did not have any transfers of assets between Level 1 and Level 2 of the fair value measurement hierarchy as these assets have been valued using quoted market prices in active markets without any valuation adjustment.during the three months ended March 31, 2020.

4. INVESTMENTS

The following table summarizesAs of March 31, 2020, the Company’sCompany did not hold any short-term or long-term investments.

As of December 31, 2019, the Company held available-for-sale investments which are consideredavailable-for-sale and were included in short-term investments on the condensed consolidated balance sheet as of June 30, 2019:and summarized in the table below:

5. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities at June 30, 2019March 31, 2020 and December 31, 20182019 consisted of the following:

Accrued compensation and benefits consists primarily of accrued bonuses. Accrued professional services consists primarily of consulting services, legal services and services provided by contract research organizations (“CRO”) and contract manufacturing organizations (“CMO”).

6. CONVERTIBLE PREFERRED STOCK

Series A convertible preferred stock and Series B convertible preferred stock is collectively referred to as “Preferred Stock.”DEBT

On October 23, 2018, uponJuly 2, 2019 (the “Closing Date”), the closingCompany entered into a loan and security agreement (the “Loan Agreement”), for term loans with Oxford Finance LLC (“Oxford”) and Horizon Technology Finance Corporation (“Horizon,” and, together with Oxford, the “Lenders”). The Loan Agreement allows the Company to borrow up to $20,000 issuable in two equal tranches (the “Term Loans”). On the Closing Date, the first tranche of the Company’s IPO, all outstanding shares of Preferred Stock converted into 11,789,775 shares of the Company’s common stock. As such, there were no outstanding shares of Preferred Stock as of June 30, 2019 and December 31, 2018.

The rights and privileges of the preferred stockholders were as follows:

Conversion: Each share of Preferred Stock$10,000 was convertible, at the option of the holder, at any time, into shares of common stock on aone-for-1.90993 basis. The conversion ratio was determined by dividing the original issue price of $1.4933drawn down by the conversion priceCompany (the “Term A Loan”). The second tranche of $0.78186. The Preferred Stock would automatically convert into shares of common stock at the closing a Qualified IPO (as defined in the Company’s amended and restated certificate of incorporation, as amended from time to time) or in anon-Qualified IPO, upon the approval of at least 60% of the preferred stockholders.

Liquidation Preference: Prior$10,000 will be available to the IPO, in the event of any liquidation or “Deemed Liquidation Event,” defined below, the preferred stockholders would have been entitledCompany through September 30, 2020, subject to certain clinical milestones (the “Term B Loan”).

The outstanding loan balance will accrue interest at the greater of (i) the original issue pricerate of the Preferred Stockone-month U.S. LIBOR rate plus any accrued dividends not yet paid plus any other dividends declared6.25% and unpaid or (ii) 8.75%. The Loan Agreement provides for an interest only period until July 1, 2021, followed by thirty-six equal monthly payments of principal and interest continuing through June 1, 2024 (the “Maturity Date”). The Company has the amount payable had all classesoption to prepay the outstanding balance prior to maturity, subject to a prepayment fee of shares been converted1.0% to common stock. In3.0% depending upon when the eventprepayment occurs. Upon repayment of the Term Loans, the Company is required to make a Deemed Liquidation Event, accrued dividends would not exceed 40%final payment to the Lenders equal to 4.5% of the original issue price. After paymentsprincipal amount of all preferential amounts are madethe Term Loans funded which will be accrued by charges to interest expense over the term of the loans using the effective interest method.

In conjunction with the Loan Agreement, the Company issued 15,686 of common stock warrants (“Warrants”) to the preferred stockholders, any remaining assets wouldLenders at a per share exercise price of $12.75, a maximum contractual term of 10 years and exercisable immediately. The fair value of the Warrants was accounted for as a debt discount and calculated to be distributedapproximately $136 using the Black-Scholes method. The Company determined the Warrants met the criteria for equity classification, and, as such, the fair value of the Warrants is recorded as additional paid-in capital on the condensed consolidated balance sheets. Finally, the Company incurred issuance costs of approximately $150. Both the debt discount and issuance costs will be accreted to Notes payable by charges to interest expense over the term of the Term A Loan using the effective interest method.

The Loan Agreement contains customary representations, warranties and covenants and also includes customary events of default. Events of default include, among other things, the Company’s failure to pay amounts due, a breach of certain covenants, a material adverse change event, misrepresentations and judgments. Upon the occurrence of an event of default, a default interest rate of an additional 5.00% per annum may be applied to the common stockholders on a pro rata basis. A Deemed Liquidation Event was defined as a merger, consolidation, reorganization or similar transaction;outstanding loan balances, and the sale transfer, exclusive license ofLenders may declare all oroutstanding obligations immediately due and payable. Borrowings under the Loan Agreement are collateralized by substantially all the Company’s assets, other than its intellectual property, which include maintaining certain cash balances in controlled accounts.

Interest expense was $272 for the three months ended March 31, 2020. The effective rate on the Loan Agreement, including the amortization of the Company’s assets/intellectual property; or the sale or transfer of shares to any person (or group of related or affiliated persons), directly or indirectly, representing a greater than 50%debt discount and issuance costs, and accretion of the voting powerfinal payment, was 9.7% at March 31, 2020. The components of the voting securitieslong-term debt balance are as follows:

As of March 31, 2020, the Company.estimated future principal payments due were as follows:

Dividends:Preferred stockholders were entitled to receive, when and if declared by the board of directors (the “Board”) out of any funds legally available, dividends at the rate of 8% of the original issue price per share. No dividends were declared or paid through October 23, 2018, the date on which all of the Preferred Stock was converted to common stock upon the closing of the Company’s IPO.

Voting Rights:Preferred Stock and common stock voted together as one class on an as converted basis.

7. STOCK-BASED COMPENSATION

Equity Incentive Plans

In December 2014, the Company adopted the LogicBio Therapeutics, Inc. 2014 Equity Incentive Plan, as amended (the “2014 Plan”), for the issuance of stock options and other stock-based awards. In October 2018, the Company’s 2018 Equity Incentive Plan (the “2018 Plan”) became effective and as a result, no further awards will be made under the 2014 Plan. The 2018 Plan was established to provide equity-based ownership opportunities for employees and directors, as well as outside consultants and advisors. The 2018 Plan authorized up to 1,183,214 of shares of the Company’s common stock to be issued. In addition, anyAny previously granted awards under the 2014 Plan will remain outstanding in accordance with their respective terms.

Under the 2018 Plan, there is an annual increase on January 1 of each year from 2019 until 2028, by the lesser of (i) 4% of the number of shares of common stock outstanding on December 31 of the prior year and (ii) an amount determined by the Board. On January 1, 2019,2020, the Company increased the number of shares available for future grant under the 2018 Plan by 887,535926,786 shares. At June 30, 2019,March 31, 2020, there were 1,288,2491,309,885 shares available for future grant under the 2018 Plan.

The 2018 Plan is administered by the Board. The exercise prices, vesting and other restrictions are determined at the discretion of the board of directors,Board, except that the exercise price per share of stock options may not be less than 100% of the fair market value of the common stock on the date of grant. Stock options awarded under the 2018 Plan expire 10 years after the grant date, unless the Board sets a shorter term. Vesting periods for awards under the 2018 Plan are determined at the discretion of the Board. Incentive stock options granted to employees and shares of restricted stock granted to employees, officers, members of the Board, advisors, and consultants of the Company typically vest over four years.Non-statutory options and shares of restricted stock granted to employees, officers, members of the Board, advisors, and consultants of the Company typically vest over three orone to four years.

Stock Options

During the sixthree months ended June 30,March 31, 2020 and 2019, and 2018, the Company granted options to purchase 174,591714,203 and 596,39479,123 shares of common stock, respectively, with a weighted-average grant date fair value per share of $6.34$4.74 and $4.20,$6.03, respectively. The Company recorded stock-based compensation expense for options granted of $674$761 and $85$210 during the sixthree months ended June 30,March 31, 2020 and 2019, and 2018, respectively. As of June 30, 2019,March 31, 2020, there were 2,509,5722,930,587 options outstanding and $5,215$7,268 of unrecognized stock-based compensation expense related to unvested stock options to be recognized over a weighted-average period of 3.1 years.

Restricted Common Stock

The Company has granted shares of restricted common stock with time-based and performance-based vesting conditions from time to time. During the sixthree months ended June 30,March 31, 2020 and 2019, the Company did not grant any shares of restricted common stock. During the six months ended June 30, 2018, the Company granted 107,054 shares of restricted common stock. The Company recorded stock-based compensation expense for restricted common stock granted of $133$44 and $148$66 during the sixthree months ended June 30,March 31, 2020 and 2019, and 2018, respectively. As of June 30, 2019,March 31, 2020, there were 564,02783,047 shares of unvested restricted common stock outstanding and $393$216 of unrecognized stock-based compensation expense related to unvested restricted common stock to be recognized over a weighted-average period of 2.11.8 years.