0001558370-22-002552 | 10-K | XBRL Viewer

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Current assets
Cash and cash equivalents	$ 198,053	$ 19,238
Prepaid expenses and other current assets	4,464	1,352
Total current assets	202,517	20,590
Restricted cash	1,553	1,551
Property and equipment, net	7,620	7,367
Operating lease right-of-use asset	5,977	6,309
Other non-current assets	393	500
Total assets	218,060	36,317
Current liabilities
Accounts payable	3,144	5,444
Accrued expenses	8,751	13,732
Operating lease liability, current portion	801	564
Notes payable, current portion		2,333
Other current liabilities	82	82
Total current liabilities	12,778	22,155
Notes payable, net of current portion	9,628	7,412
Operating lease liability, net of current portion	10,107	10,908
Other liabilities, long-term	118	1,127
Total liabilities	32,631	41,602
Commitments and contingencies (Note 8)
Convertible preferred stock (Series A, A-1, A-2(A), A-2(A-1), B and C), $0.0001 par value, no shares authorized and no shares issued and outstanding at December 31, 2021; 133,602,056 shares authorized and 66,788,528 shares issued and outstanding at December 31, 2020; aggregate liquidation preference of $0 and $80,250 at December 31, 2021 and December 31, 2020, respectively		78,002
Stockholders' equity (deficit)
Preferred stock, $0.0001 par value; 5,000,000 shares authorized, no shares issued or outstanding at December 31, 2021; no shares authorized, issued or outstanding at December 31, 2020
Common stock, $0.0001 par value; 200,000,000 shares authorized, 27,468,950 shares issued and 27,358,375 shares outstanding at December 31, 2021; 126,000,000 shares authorized, 973,898 shares issued and 689,929 shares outstanding at December 31, 2020	3
Additional paid-in capital	346,312	1,799
Accumulated deficit	(160,886)	(85,086)
Total stockholders' equity (deficit)	185,429	(83,287)
Total liabilities, convertible preferred stock and stockholders' equity (deficit)	$ 218,060	$ 36,317

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
CONSOLIDATED BALANCE SHEETS
Convertible preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Convertible preferred stock authorized	0	133,602,056
Convertible preferred stock issued	0	66,788,528
Convertible preferred stock outstanding	0	66,788,528
Convertible preferred stock, liquidation preference	$ 0	$ 80,250
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000,000	0
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	200,000,000	126,000,000
Common stock, shares issued	27,468,950	973,898
Common stock, shares outstanding	27,358,375	689,929

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Operating expenses
Research and development	$ 51,188	$ 43,910
General and administrative	23,856	10,653
Total operating expenses	75,044	54,563
Loss from operations	(75,044)	(54,563)
Other income (expense), net
Other expense, net	(756)	(656)
Total other income (expense), net	(756)	(656)
Net loss	(75,800)	(55,219)
Comprehensive loss	$ (75,800)	$ (55,219)
Net loss per share, basic (in dollars per share)	$ (13.52)	$ (105.42)
Net loss per share, diluted (in dollars per share)	$ (13.52)	$ (105.42)
Weighted average common shares outstanding, basic (in shares)	5,606,308	523,786
Weighted average common shares outstanding, diluted (in shares)	5,606,308	523,786

CONSOLIDATED STATEMENTS OF PREFERRED UNITS AND CONVERTIBLE PREFERRED STOCK - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2021	Dec. 31, 2020
Temporary Equity
Beginning balance		$ 78,002
Beginning balance (in shares)		66,788,528
Ending balance			$ 78,002
Ending balance (in shares)		0	66,788,528
Series A Convertible Preferred Stock
Temporary Equity
Beginning balance		$ 7,309
Beginning balance (in shares)		7,500,000
Effect of reorganization			$ 7,309
Effect of reorganization (in shares)	7,500,000		7,500,000
Conversion of convertible preferred stock into common stock upon initial public offering		$ (7,309)
Conversion of convertible preferred stock into common stock upon initial public offering (in shares)		(7,500,000)
Ending balance			$ 7,309
Ending balance (in shares)			7,500,000
Series A-1 Convertible Preferred Stock
Temporary Equity
Beginning balance		$ 20,740
Beginning balance (in shares)		19,565,216
Effect of reorganization			$ 20,740
Effect of reorganization (in shares)	19,565,216		19,565,216
Conversion of convertible preferred stock into common stock upon initial public offering		$ (20,740)
Conversion of convertible preferred stock into common stock upon initial public offering (in shares)		(19,565,216)
Ending balance			$ 20,740
Ending balance (in shares)			19,565,216
Series B Convertible Preferred Stock
Temporary Equity
Beginning balance		$ 49,953
Beginning balance (in shares)		39,723,312
Issuance of preferred stock or units, net of issuance costs		$ 50,200
Issuance of preferred stock or units (in shares)		39,723,312
Effect of reorganization			$ 49,953
Effect of reorganization (in shares)	39,723,312		39,723,312
Conversion of convertible preferred stock into common stock upon initial public offering		$ (100,153)
Conversion of convertible preferred stock into common stock upon initial public offering (in shares)		(79,446,624)
Ending balance			$ 49,953
Ending balance (in shares)			39,723,312
Series C Convertible Preferred Stock
Temporary Equity
Issuance of preferred stock or units, net of issuance costs		$ 94,686
Issuance of preferred stock or units (in shares)		68,271,641
Conversion of convertible preferred stock into common stock upon initial public offering		$ (94,686)
Conversion of convertible preferred stock into common stock upon initial public offering (in shares)		(68,271,641)
Series A Preferred Units
Temporary Equity
Beginning balance	$ 7,309		$ 7,309
Beginning balance (in shares)	7,500,000		7,500,000
Effect of reorganization			$ (7,309)
Effect of reorganization (in shares)			(7,500,000)
Series A-1 Preferred Units
Temporary Equity
Beginning balance	$ 20,740		$ 20,740
Beginning balance (in shares)	19,565,216		19,565,216
Effect of reorganization			$ (20,740)
Effect of reorganization (in shares)			(19,565,216)
Series B Preferred Units
Temporary Equity
Beginning balance	$ 39,984		$ 39,984
Beginning balance (in shares)	31,818,174		31,818,174
Issuance of preferred stock or units, net of issuance costs			$ 9,969
Issuance of preferred stock or units (in shares)			7,905,138
Effect of reorganization			$ (49,953)
Effect of reorganization (in shares)			(39,723,312)

CONSOLIDATED STATEMENTS OF PREFERRED UNITS AND CONVERTIBLE PREFERRED STOCK (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Series B Preferred Units
Issuance costs		$ 31
Series B Convertible Preferred Stock
Issuance costs	$ 50
Series C Convertible Preferred Stock
Issuance costs	$ 314

CONSOLIDATED STATEMENTS OF MEMBERS' AND STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands	Common Units	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Beginning balance at Dec. 31, 2019			$ 344	$ (29,867)	$ (29,523)
Beginning balance (in shares) at Dec. 31, 2019	409,303
Stockholders' Deficit
Effect of reorganization (in shares)	(409,303)	409,303
Vesting of restricted common stock (in shares)		251,732
Exercise of stock options			159		159
Exercise of stock options (in shares)		28,894
Equity-based compensation expense			1,296		1,296
Net loss				(55,219)	(55,219)
Ending balance at Dec. 31, 2020			1,799	(85,086)	(83,287)
Ending balance (in shares) at Dec. 31, 2020		689,929
Stockholders' Deficit
Conversion of convertible preferred stock into common stock upon initial public offering		$ 2	222,886		222,888
Conversion of convertible preferred stock into common stock upon initial public offering (in shares)		18,398,248
Issuance of common stock upon initial public offering, net of issuance costs of $13,547		$ 1	116,358		116,359
Issuance of common stock upon initial public offering, net of issuance costs (in shares)		8,119,106
Conversion of warrant liability to equity upon initial public offering			28		28
Vesting of restricted common stock (in shares)		103,192
Exercise of stock options			283		$ 283
Exercise of stock options (in shares)		47,900			47,900
Equity-based compensation expense			4,958		$ 4,958
Net loss				(75,800)	(75,800)
Ending balance at Dec. 31, 2021		$ 3	$ 346,312	$ (160,886)	$ 185,429
Ending balance (in shares) at Dec. 31, 2021		27,358,375

CONSOLIDATED STATEMENTS OF MEMBERS' AND STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($)
CONSOLIDATED STATEMENTS OF PREFERRED UNITS AND CONVERTIBLE PREFERRED STOCK AND MEMBERS' AND STOCKHOLDERS' EQUITY (DEFICIT)
Issuance of common stock upon initial public offering, issuance costs	$ 13,547

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Cash flows from operating activities:
Net loss	$ (75,800)	$ (55,219)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,499	1,065
Non-cash interest expense	173	39
Equity-based compensation expense	4,958	1,296
Loss on disposal of property and equipment	19
Change in fair value of warrant and derivative liabilities	203	126
Changes in operating assets and liabilities:
Prepaid and other assets	(3,136)	2,282
Operating lease right-of-use asset	332	299
Accounts payable	(2,818)	2,926
Accrued expenses and other liabilities	(5,617)	11,510
Operating lease liability	(564)	(415)
Net cash used in operating activities	(80,751)	(36,091)
Cash flows from investing activities:
Purchases of property and equipment	(1,100)	(2,188)
Net cash used in investing activities	(1,100)	(2,188)
Cash flows from financing activities:
Repayments of debt principal	(1,000)
Proceeds from debt issuance, net of issuance costs	975
Payments of finance lease	(85)	(99)
Payments of success fee	(750)
Proceeds from issuance of Series B preferred units, net of issuance costs		9,969
Proceeds from issuance of convertible preferred stock, net of issuance costs	144,886
Proceeds from initial public offering, net of issuance costs	116,359
Proceeds from exercise of stock options	283	159
Net cash provided by financing activities	260,668	10,029
Increase (decrease) in cash, cash equivalents & restricted cash	178,817	(28,250)
Cash, cash equivalents and restricted cash, beginning of period	20,789	49,039
Cash, cash equivalents and restricted cash, end of period	199,606	20,789
Supplemental cash flow disclosure:
Cash paid for interest	492	536
Supplemental disclosure of non-cash activities:
Conversion of convertible preferred stock into common stock upon initial public offering	222,888
Capital expenditures included in accounts payable or accrued expenses	539
Recognition of derivative liability in connection with long-term debt facility	250
Conversion of warrant liability to equity upon initial public offering	$ 28
Right-of-use assets obtained in exchange for operating lease liabilities		39
Right-of-use assets obtained in exchange for finance lease liabilities		423
Tenant improvements funded by landlord		$ 2,827

Description of Business, Organization and Liquidity

12 Months Ended

Dec. 31, 2021

Description of Business, Organization and Liquidity

Description of Business, Organization and Liquidity

1. Description of Business, Organization and Liquidity

Description of Business

Xilio Therapeutics, Inc., incorporated in Delaware in June 2020, is a clinical-stage biotechnology company focused on harnessing the immune system to achieve deep and durable clinical responses to improve the lives of patients with cancer.

For purposes of these consolidated financial statements, the “Company” refers to Xilio Therapeutics LLC (formerly Akriveia Therapeutics Inc., Akriveia Therapeutics LLC and Akrevia Therapeutics LLC) prior to the reorganization described below, and Xilio Therapeutics, Inc. after such reorganization. The Company’s headquarters are based in Waltham, Massachusetts.

Organization

Akriveia Therapeutics Inc. was incorporated in Delaware in June 2015. In May 2016, Akriveia Therapeutics Inc. completed its first tax free reorganization and the parent entity became Akriveia Therapeutics LLC. Akriveia Therapeutics LLC subsequently changed its name to Akrevia Therapeutics LLC in May 2018 and then to Xilio Therapeutics LLC in February 2020. In June 2020, the Company completed a series of transactions pursuant to which Xilio Therapeutics LLC became a direct, wholly owned subsidiary of Xilio Therapeutics, Inc., and all of the outstanding membership interests of Xilio Therapeutics LLC were exchanged for equity securities of Xilio Therapeutics, Inc. and Xilio Therapeutics, Inc. became the parent entity (the “Reorganization”). The purpose of the transaction was to reorganize the corporate structure so that existing investors would own capital stock in a corporation rather than equity interests in a limited liability company.

Upon consummation of the Reorganization, the historical consolidated financial statements of Xilio Therapeutics LLC became the historical consolidated financial statements of Xilio Therapeutics, Inc.

Liquidity

Since inception, the Company has devoted substantially all of its financial resources and efforts to research and development activities.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including but not limited to, risks associated with completing research programs and conducting additional research programs, advancing the Company’s current and future product candidates into preclinical and clinical development, seeking marketing approvals for any product candidates that successfully complete clinical trials, obtaining, expanding, maintaining and defending the Company’s intellectual property, and hiring additional clinical, regulatory, and scientific personnel. Programs currently under development will require significant additional research and development efforts, including preclinical and clinical testing and will need to obtain regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize revenue from product sales.

On October 26, 2021, the Company completed its initial public offering (“IPO”) of common stock and issued and sold an aggregate of 7,353,000 shares of its common stock at a public offering price of $16.00 per share, and on November 1, 2021, the Company issued and sold an additional 766,106 shares of common stock at a public offering price of $16.00 per share pursuant to the partial exercise by the underwriters of their option to purchase additional shares. The Company received aggregate gross proceeds of $129.9 million or aggregate net proceeds of $116.4 million, after deducting underwriting discounts and commissions and offering expenses payable by the Company. Upon the closing of the IPO, all shares of the Company’s then outstanding preferred stock automatically converted into an aggregate of 18,398,248 shares of common stock (see Note 11).

Prior to its IPO, the Company primarily funded its operations with proceeds from the sale of convertible preferred units and convertible preferred stock and a debt financing. As of December 31, 2021, the Company had cash and cash equivalents of $198.1 million. The Company expects that its cash and cash equivalents will be sufficient to meet the projected operating requirements and capital expenditures for at least twelve months from the date of issuance of these consolidated financial statements. The Company expects to continue to generate negative cash flows from operations and net losses for the foreseeable future as it continues to invest significantly in research and development of its product candidates, including preclinical, clinical and manufacturing process development. Management’s conclusion with respect to its ability to fund operations is based on estimates that are subject to risks and uncertainties that may prove to be incorrect. If actual results differ from management’s estimates, the Company may be required to seek additional funding or curtail planned activities to reduce operating expenses, which may have an adverse impact on the Company’s ability to achieve its business objectives.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASUs”) of the Financial Accounting Standards Board (“FASB”).

In April 2012, the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) was enacted. Section 107(b) of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected not to “opt out” of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company can adopt the new or revised standard at the time private companies adopt the new or revised standard and may do so until such time that the Company either (1) irrevocably elects to “opt out” of such extended transition period or (2) no longer qualifies as an emerging growth company. The Company may take advantage of these exemptions up until December 31, 2026, or such earlier time that it is no longer an emerging growth company.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Following the Reorganization, the accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Xilio Therapeutics LLC, Xilio Concerto LLC (“Concerto”), Xilio Development, Inc. (“Xilio Development”) and Xilio Securities Corp., which is a Massachusetts subsidiary created to buy, sell and hold securities. All intercompany accounts and transactions have been eliminated.

Reverse Stock Split

The Company’s board of directors and stockholders approved an amendment to the Company’s certificate of incorporation, which became effective on October 15, 2021. The amendment effected a 1-for-9.5 reverse stock split of the Company’s issued and outstanding common stock and eliminated the minimum price per share of common stock for an underwritten public offering that would result in the automatic conversion of the Company’s outstanding convertible preferred stock. Accordingly, all common share and per share amounts in the consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to the reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and judgments that may affect the reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the date of the financial statements and the related reporting of expenses during the reporting period. Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these consolidated financial statements. Factors that may affect estimates include expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. Significant estimates of accounting reflected in these consolidated financial statements include, but are not limited to, estimates related to accrued expenses, contingent amounts payable to third parties upon the consummation of specified transactions, including an initial public offering, the valuation of equity-based compensation, including incentive units, stock options and restricted common stock, useful life of long-lived assets and income taxes. Actual results could differ from those estimates.

Segment Information

The Company has one operating segment. Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision-maker in deciding how to allocate resources and assess performance. The Company’s chief operating decision-maker is its chief executive officer. The Company and its chief operating decision-maker view the Company’s operations and manage its business as a single operating segment. All of the Company’s long-lived assets are held in the United States.

Cash Equivalents and Restricted Cash

The Company considers all short-term, highly liquid investments with original maturities of 90 days or less at acquisition date to be cash equivalents. Cash equivalents, which consist of money market accounts, are stated at fair value. Restricted cash primarily represents a letter of credit issued to the landlord of the Company’s facility lease and is reflected in non-current assets on the accompanying consolidated balance sheets. Cash, cash equivalents and restricted cash consists of the following (in thousands):


	December 31,		December 31,
	2021		2020
Cash and cash equivalents	$	198,053	$	19,238
Restricted cash		1,553		1,551
Total cash, cash equivalents and restricted cash as shown on the consolidated statement of cash flows	$	199,606	$	20,789

Concentrations of Credit Risk and Significant Suppliers

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company holds all cash and cash equivalents at accredited financial institutions. Bank accounts in the United States are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of December 31, 2021 and 2020, certain of the Company’s primary operating accounts significantly exceeded the FDIC limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

The Company is dependent on a third-party manufacturer to supply material and manufacturing process development services for its product candidates and related research and development activities. These research and development programs and activities could be adversely affected by a significant interruption in the supply of such products and services which could have a material adverse effect on the Company’s business, financial position and results of operations.

Fair Value Measurements

Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

●

Level 1—Quoted prices in active markets for identical assets or liabilities.

●

Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

●

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The carrying values of the Company’s cash, prepaid expenses, accounts payable and accrued expenses approximate their fair value due to their short-term nature. The carrying value of the Company’s outstanding debt as of December 31, 2021 and 2020 approximates fair value based on the variable interest rate for the borrowings as well as the short duration of the term of the note. Items measured at fair value on a recurring basis include cash equivalents, the preferred warrant and contingent liabilities associated with the consummation of specified transactions, including an initial public offering.

Property and Equipment

Property and equipment is stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets, which are as follows:


		Estimated Useful Life
Computers and software		3 years
Laboratory equipment		5 years
Furniture and fixtures		5 years
Leasehold improvements		Shorter of the useful life or the remaining term of the lease

Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is included in loss from operations. Expenditures for repairs and maintenance that do not improve or extend the lives of the respective assets are charged to expense as incurred, while costs of major additions and betterments are capitalized.

Impairment of Long-Lived Assets

The Company periodically evaluates its long-lived assets, which consist of property and equipment, and any leased assets, for impairment whenever events or changes in circumstances indicate that a potential impairment may have occurred. If such events or changes in circumstances arise, the Company compares the carrying amount of the long-lived assets to the

estimated future undiscounted cash flows expected to be generated by the long-lived assets. If the estimated aggregate undiscounted cash flows are less than the carrying amount of the long-lived assets, an impairment charge, calculated as the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets, is recorded. The estimated fair value of the long-lived assets is determined based on the estimated discounted cash flows expected to be generated from the long-lived assets. The Company did not recognize impairment charges during the years ended December 31, 2021 and 2020, respectively.

Leases

The Company determines if an arrangement is or contains a lease at inception. Operating leases are included in right-of-use lease assets (“ROU assets”) and in both the current portion of lease obligations and long-term lease obligations on the Company’s consolidated balance sheets. Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense. Assets subject to finance leases are included in other non-current assets and the related lease obligation is included in other current liabilities and other long-term liabilities on the Company’s consolidated balance sheets. Lease expense for finance leases is recognized as depreciation expense and interest expense using the effective interest method. The Company has elected the short-term lease recognition exemption for short-term leases, which allows the Company not to recognize lease liabilities and ROU assets on the consolidated balance sheets for leases with an original term of twelve months or less.

ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease obligations represent the Company’s obligation to make lease payments arising from the lease. Operating lease liabilities and their corresponding ROU assets are initially recorded based on the present value of lease payments over the expected remaining lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Certain adjustments to the ROU asset may be required for items such 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 to discount lease payments. The incremental borrowing rate reflects the fixed rate at which the Company could borrow, on a collateralized basis, the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. Prospectively, the Company will adjust the ROU assets for straight-line rent expense or any incentives received and remeasure the lease liability at the net present value using the same incremental borrowing rate that was in effect as of the lease commencement or transition date.

The Company has lease agreements with lease and non-lease components, which are accounted for as a combined element.

Research and Development Costs and Accruals

Research and development expenses are expensed as incurred and consist of costs incurred in performing research and development activities, including compensation related expenses for research and development personnel, preclinical and clinical activities including cost of supply and manufacturing process development activities, overhead expenses including facilities expenses, materials and supplies, amounts paid to consultants and outside service providers, and depreciation of equipment. Upfront payments made for the licensing of technology are expensed as research and development expenses in the period in which they are incurred. In general, contingent payments are recognized when it becomes probable the payment will be required. Any contingent payments that qualify as a derivative liability are recognized at fair value on the Company’s consolidated balance sheets. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed.

The Company records accruals for estimated ongoing research and development costs, including costs associated with contracts with third-party contract research organizations and contract manufacturing organizations. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the preclinical studies or clinical trials, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. The Company’s historical accrual estimates have not been materially different from the actual costs.

Acquired In-Process Research and Development (“IPR&D”)

If the Company acquires an asset or group of assets under an in-licensing arrangement that does not meet the definition of a business under ASC Topic 805, Business Combinations, and the acquired IPR&D does not have an alternative future use, it is expensed on its acquisition date in accordance with guidance in ASC Topic 730, Research and Development. Contingent payments for the assets acquired are expensed or capitalized based on the nature of the associated asset at the date the payment is recognized.

Patent Costs

All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss.

Equity-Based Compensation

The Company accounts for equity awards, including grants of incentive units, common units, restricted stock and stock options, in accordance with ASC 718, Compensation—Stock Compensation (“Topic 718”). Topic 718 requires all equity-based payments to employees, which includes grants of employee equity awards, to be recognized in the consolidated statements of operations and comprehensive loss based on their grant date fair values.

There are significant judgments and estimates inherent in the determination of the fair value of the common securities. After the completion of the Company’s IPO, the Company considers the fair value of common stock to be equal to its current share price. If applicable, the current share price is adjusted to reflect material nonpublic information known to the company but unavailable to market participants. Prior to the completion of the Company’s IPO, the Company determined the fair value of the underlying common stock based on input from management and approved by the Company’s board of directors, which utilized the valuation of the Company’s enterprise value determined utilizing various methods including the market adjusted equity value method, guideline initial public offering method, transactions method, recent transactions method, option-pricing method, or a hybrid method. The total enterprise value was then allocated to the various outstanding equity instruments, including the underlying common stock, utilizing the option-pricing method.

The Company estimates the fair value of stock options using the Black-Scholes option pricing model, which uses as inputs the estimated fair value of common stock, and certain management estimates, including the expected stock price volatility, the expected term of the award, the risk-free rate, and expected dividends. Expected volatility is calculated based on reported volatility data for a representative group of publicly traded companies for which historical information is available. The Company selects companies with comparable characteristics with historical share price information that approximates the expected term of the equity-based awards. The Company computes the historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period that approximates the calculated expected term of the stock options. The Company will continue to apply this method until a sufficient amount of historical information regarding the volatility of its stock price becomes available. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant commensurate with the expected term assumption. The Company uses the simplified method, under which the expected term is presumed to be the midpoint between the vesting date and the end of the contractual term. The Company utilizes this method due to lack of historical exercise data. The expected dividend yield is assumed to be zero as the Company has no current plans to pay any dividends on common stock.

For awards with service-based vesting conditions, the Company recognizes equity-based compensation expense on a ratable basis over the vesting period. For awards subject to performance conditions, the Company recognizes equity-based compensation expense using an accelerated recognition method over the remaining service period when the Company determines the achievement of the performance condition is probable. The Company uses judgement to determine whether and, if so, how many awards are deemed probable of vesting at each reporting period. The Company recognizes forfeitures as they occur. The Company classifies equity-based compensation expense in its consolidated statements of operations and comprehensive loss consistent with the classification of the award recipient’s compensation expense.

Convertible Preferred Stock

The Company records all shares of convertible preferred stock at their respective fair values on the dates of issuance less issuance costs. The Company classifies its convertible preferred stock outside of stockholders’ deficit when the redemption of such shares is outside the Company’s control. The Company does not adjust the carrying values of the convertible preferred stock to the liquidation preferences of such stock until such time as a deemed liquidation event is probable of occurring.

Comprehensive Loss

Comprehensive loss is the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Comprehensive loss includes net loss and the change in accumulated other comprehensive loss for the period. The Company did not have any items of comprehensive income or loss other than net loss for the years ended December 31, 2021 and 2020.

Net Loss Per Share

The Company applies the two-class method to compute basic and diluted net loss per share because it has issued shares that meet the definition of participating securities. The two-class method determines net loss per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires losses available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to share in the earnings as if all losses for the period had been distributed. During periods of loss, there is no allocation required under the two-class method since the participating securities do not have a contractual obligation to fund the losses of the Company.

The Company calculates basic net loss per share attributable to common stockholders by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, which excludes shares of restricted common stock that are not vested. Diluted net loss per share is calculated by dividing net loss by the weighted average number of shares of common stock outstanding, as applicable, after giving consideration to the dilutive effect of preferred units, convertible preferred stock, incentive units, stock options, restricted common stock and warrants that are outstanding during the period. The Company has generated a net loss in all periods presented, so the basic and diluted net loss per share are the same, as the inclusion of the potentially dilutive securities would be anti-dilutive.

Income Taxes

Prior to the Reorganization, Xilio Therapeutics LLC elected to be treated under the partnership provisions of the Internal Revenue Code. Accordingly, all income and deductions of Xilio Therapeutics LLC were recorded on its members’ individual tax returns and no taxes were recorded by Xilio Therapeutics LLC. Xilio Development and Concerto, the wholly owned subsidiaries of Xilio Therapeutics LLC, were taxed as C-corporations for federal income tax purposes and filed separate corporate income tax returns from the LLC entity. Upon the consummation of the Reorganization, Xilio Therapeutics, Inc. became the 100% owner of Xilio Therapeutics LLC, creating a new corporate parent company and a consolidated group for income tax reporting. The Reorganization and change in tax status of the reporting entity did not have an impact on the consolidated tax provision.

Income taxes for Xilio Therapeutics, Inc. are recorded in accordance with ASC Topic 740, Income Taxes, which provides for deferred taxes using an asset and liability approach. Under this method, deferred income tax assets and liabilities are recognized based on future income tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities, and their respective income tax basis. Deferred income tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in income tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that a valuation allowance for any income tax benefits of which future realization is not more likely than not.

The Company provides reserves for potential payments of tax to various tax authorities related to uncertain tax positions. The tax benefits recorded are based on a determination of whether and how much of a tax benefit taken by the Company in its tax filings or positions is “more likely than not” to be realized following resolution of any uncertainty related to the tax benefit, assuming that the matter in question will be raised by the tax authorities. At December 31, 2021 and 2020, the Company had not identified any significant uncertain tax positions.

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes (“ASU 2019-12”), as part of its initiative to reduce complexity in the accounting standards. The amendments in ASU 2019-12 eliminate certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also clarifies and simplifies other aspects of the accounting for income taxes. The Company adopted ASU 2019-12 on October 1, 2021, and the implementation of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326)—Measurement of Credit Losses on Financial Instruments, which has been subsequently amended by ASU No. 2018-19, ASU No. 2019-04, ASU No. 2019-05, ASU No. 2019-10, ASU No. 2019-11, and ASU No. 2020-03 (“ASU 2016-13”). The provisions of ASU 2016-13 modify the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology and require a consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for the Company on January 1, 2023, with early adoption permitted. The Company is currently evaluating the potential impact that ASU 2016-13 may have on its consolidated financial statements and related disclosures.

In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”), which reduces the number of accounting models for convertible debt instruments and convertible preferred stock as well as amends the derivatives scope exception for contracts in an entity’s own equity. ASU 2020-06 is effective for the Company on January 1, 2024, with early adoption permitted. The Company is currently evaluating the potential impact that this standard may have on its consolidated financial statements and related disclosures.

Fair Value Measurements

12 Months Ended

Dec. 31, 2021

Fair Value Measurements

Fair Value Measurements

3. Fair Value Measurements

The Company measures the following financial assets and liabilities at fair value on a recurring basis. The fair value of these assets and liabilities was determined as follows (in thousands):


			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
		December 31,	Assets		Inputs		Inputs
	2020		Level 1		Level 2		Level 3
Financial assets:
Cash equivalents—money market funds	$	—	$	—	$	—	$	—
Total financial assets	$	—	$	—	$	—	$	—
Financial liabilities:
Debt derivative liability	$	396	$	—	$	—	$	396
Other derivative liability		407		—		—		407
Warrant to purchase Series A convertible preferred stock		22		—		—		22
Total financial liabilities	$	825	$	—	$	—	$	825


			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	December 31,		Assets		Inputs		Inputs
	2021		Level 1		Level 2		Level 3
Financial assets:
Cash equivalents—money market funds	$	8,534	$	8,534	$	—	$	—
Total financial assets	$	8,534	$	8,534	$	—	$	—

During the years ended December 31, 2021 and 2020, the Company did not hold any investments and there were no transfers between Level 1, Level 2, and Level 3.

In May 2016, the Company issued to a consultant a warrant to purchase 25,000 Series A preferred units at a price of $1.00 per unit. Effective upon the Reorganization, the preferred unit warrant was converted into a warrant to purchase 25,000 shares of Series A convertible preferred stock at a price of $1.00 per share. The fair value of the warrant liability utilized the Black-Scholes option-pricing model which incorporated significant inputs not observable in the market, and thus represented a Level 3 measurement within the fair value hierarchy. Based on the terms and conditions of the warrant, upon the completion of the Company’s IPO the warrant to purchase 25,000 shares of Series A convertible preferred stock automatically became a warrant to purchase 2,631 shares of common stock. Upon conversion into a warrant to purchase common stock, the Company concluded that the warrant met the definition of an equity instrument and the fair value of the warrant at the time of conversion, determined using the Black-Scholes option pricing model, was reclassified from other liabilities, long-term to additional paid-in capital.

The fair values of the debt derivative liability and the other derivative liability that were contingently payable upon the consummation of specified transactions, including an initial public offering, were based on significant inputs not observable in the market, including estimates regarding the probability of certain potential future events and outcomes and estimates regarding timing of those events and outcomes, with an applied discount rate representative of time value that represents a Level 3 measurement within the fair value hierarchy. The debt derivative liability and other derivative liability were paid during the year ended December 31, 2021 subsequent to the completion of the Company’s IPO. Accordingly, there was no amount recorded for the debt derivative liability and other derivative liability in the Company’s consolidated balance sheet as of December 31, 2021.

The following table summarizes the changes in the fair market value of the Company’s warrant liability, debt derivative liability and other derivative liability, which are classified within the Level 3 fair value hierarchy (in thousands):


							Total
			Debt		Other		level 3
	Warrant		derivative		derivative		financial
	liability		liability		liability		liabilities
Balance at December 31, 2019	$	17	$	357	$	—	$	374
Recognition of other derivative liability		—		—		325		325
Change in fair value of liability		5		39		82		126
Balance at December 31, 2020	$	22	$	396	$	407	$	825
Change in fair value of liability		6		354		93		453
Settlement of liability		—		(750)		(500)		(1,250)
Conversion of warrant liability to equity upon initial public offering		(28)		—		—		(28)
Balance at December 31, 2021	$	—	$	—	$	—	$	—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Property and Equipment, Net

12 Months Ended

Dec. 31, 2020

Property and Equipment, Net

Property and Equipment, Net

4. Property and Equipment, Net

Property and equipment, net consists of the following as of December 31, 2021 and 2020 (in thousands):


	December 31,		December 31,
	2021		2020
Laboratory equipment	$	3,805	$	2,925
Computers and software		228		228
Furniture and fixtures		636		482
Leasehold improvements		5,124		5,092
Construction in process		539		—
Total property and equipment	$	10,332	$	8,727
Less accumulated depreciation		(2,712)		(1,360)
Property and equipment, net	$	7,620	$	7,367

The Company incurred depreciation and amortization expense related to property and equipment, net of $1.4 million and $1.1 million for the years ended December 31, 2021 and 2020, respectively.

Accrued Expenses

12 Months Ended

Dec. 31, 2021

Accrued Expenses

Accrued Expenses

5. Accrued Expenses

Accrued expenses consist of the following as of December 31, 2021 and 2020 (in thousands):


	December 31,		December 31,
	2021		2020
External research and development	$	2,794	$	11,060
Personnel-related		5,145		2,013
Professional and consulting fees		491		481
Other		321		178
Total accrued expenses	$	8,751	$	13,732

Loan and Security Agreement

12 Months Ended

Dec. 31, 2021

Loan and Security Agreement

Loan and Security Agreement

6. Loan and Security Agreement

Initial Loan Agreement

In November 2019, the Company entered into a loan and security agreement with Pacific Western Bank (“PacWest”), as amended by a first amendment, dated March 12, 2021, and a second amendment, dated May 10, 2021 (the “Initial Loan Agreement”). Pursuant to the Initial Loan Agreement, the Company borrowed $10.0 million under a term loan. Interest on

the outstanding initial loan balance accrued at a variable annual rate equal to the greater of (i) the prime rate, as defined in the Loan Agreement, plus 0.25% or (ii) 5.00%. The Company was required to make interest-only payments on the loan on a monthly basis through May 21, 2021. Subsequent to the interest-only period, the Company was required to make equal monthly payments of principal plus interest until the scheduled loan maturity on November 21, 2023. In addition, under the Initial Loan Agreement, the Company was obligated to pay a one-time $0.5 million fee to PacWest upon the occurrence of specified liquidation events, including an initial public offering. The fee represented a derivative instrument that the Company bifurcated from the debt arrangement and carried at fair value with any changes in such fair value recorded to other income (expense), net in the Company’s consolidated statements of operations and comprehensive loss. This debt derivative is recorded as a component of other liabilities, long-term on the Company’s consolidated balance sheets. Upon the closing of the loan, the fair value of the debt derivative liability was $0.4 million that, together with certain legal and other fees incurred by the Company and associated with the Loan Agreement, was recognized as a debt discount and reflected as a reduction in the carrying value of the debt. The debt discount has been accreted and recognized as additional interest expense over the term of the Loan Agreement using the effective interest method.

Amended Loan Agreement

On September 17, 2021, the Company entered into a third amendment to the Initial Loan Agreement (as amended, the “Amended Loan Agreement” and together with the Initial Loan Agreement, the “Loan Agreement”), pursuant to which the Company borrowed $10.0 million under a new term loan and used the proceeds of such new term loan to repay the outstanding balance on the prior term loan. In addition, as a result of the amendment, prior to December 31, 2022, the Company has the ability to request one or more additional term loans in an aggregate principal amount of $10.0 million. Interest on amounts outstanding under the Loan Agreement accrue at a variable annual rate equal to the greater of (i) the prime rate plus 0.25% or (ii) 4.75%. As a result of the amendment, the Company is required to make interest-only payments on any outstanding balances through December 31, 2022. Subsequent to the interest-only period, the Company will be required to make equal monthly payments of principal plus interest until the loan matures on June 30, 2024. In addition, under the Amended Loan Agreement, the one-time fee the Company was obligated to pay to PacWest upon the occurrence of specified liquidation events, including an initial public offering, was increased from $0.5 million to an amount between $0.8 million and $1.0 million, depending on the timing and occurrence of specified events, including the closing of the IPO. The Company paid the one-time fee of $0.8 million to PacWest in October 2021 upon the closing of the IPO. As a result of the amendment, the Company is also obligated to pay PacWest a fee of 1.0% of the aggregate principal amounts then outstanding if any term loans are repaid prior to September 17, 2022, which is approximately one year from the date of the amendment to the loan and security agreement. Using the net present value method, the Company concluded the amendment should be accounted for as a debt modification as the present value of the remaining cash flows of the amended term loan are not substantially different from the present value of the remaining cash flows of the initial term loan.

The Loan Agreement contains customary representations, warranties and covenants and also includes customary terms covering events of default, including payment defaults, breaches of covenants, a change of control provision and occurrence of a material adverse effect. As security for its obligations under the Loan Agreement, the Company granted PacWest a first priority security interest on substantially all of the Company’s assets (other than intellectual property), subject to certain exceptions.

The Company has determined that the risk of subjective acceleration under the material adverse effect clause is not probable and therefore has classified the long-term portion of the outstanding principal in non-current liabilities. Upon the occurrence and continuation of an event of default, a default interest rate of an additional 5% per annum may be applied to the outstanding loan balance, and the administrative agent, collateral agent, and lender may declare all outstanding obligations immediately due and payable and exercise all of their rights and remedies as set forth in the Loan Agreement and under applicable law. As of December 31, 2021, the Company was in compliance with all covenants under the Loan Agreement.

The Company has the following minimum aggregate future loan payments under the Loan Agreement at December 31, 2021 (in thousands):


	Minimum Loan
	Payments
2022	$	—
2023		6,667
2024		3,333
Total future principal payments		10,000
Less: unamortized discount		(372)
Total notes payable	$	9,628

The Company recognized $0.6 million of interest expense related the Loan Agreement during each of the years ended December 31, 2021 and 2020, respectively, which is reflected in other income (expense), net on the consolidated statements of operations and comprehensive loss.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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-Name Accounting Standards Codification
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+ Details

Intellectual Property Licenses

12 Months Ended

Dec. 31, 2021

Intellectual Property Licenses

Intellectual Property Licenses

7. Intellectual Property Licenses

Cross-License Agreement with AskGene

In December 2020, Xilio Development entered into a cross-license agreement with AskGene Pharma, Inc. (“AskGene”) pursuant to which AskGene granted Xilio Development certain exclusive licenses for AskGene patent rights related to non-antigen binding IL-2 products in the field of oncology and certain co-exclusive licenses for AskGene patent rights related to antigen binding IL-2 products in all fields. In addition, subject to the terms of the agreement and during the time period specified, AskGene granted Xilio Development an option to certain exclusive licenses for AskGene patent rights related to non-antigen binding IL-15 products in the field of oncology and certain co-exclusive licenses for AskGene patent rights related to antigen binding IL-15 products in all fields. Under the agreement, AskGene retains rights to the AskGene patent rights in Singapore, Thailand, Malaysia, Vietnam, the People’s Republic of China, Taiwan, Macau, Hong Kong, Korea and India (the “AskGene territory”), and granted licenses to Xilio Development for the AskGene patent rights worldwide, excluding the AskGene territory (the “Xilio Development territory”).

Under the agreement, Xilio Development was required to pay AskGene an upfront payment of $6.0 million, and for each licensed product, Xilio Development is obligated to pay AskGene up to $13.0 million in the aggregate upon the achievement of specified regulatory milestones. If Xilio Development exercises its option for the IL-15 licenses during the option period, Xilio Development will be obligated to pay AskGene a $4.0 million option exercise fee. In addition, subject to specified conditions, for any IL-2 licensed product, Xilio Development is obligated to pay AskGene percentage royalties in the mid-single digits on aggregate annual net sales of IL-2 licensed products in the Xilio Development territory during the applicable royalty term, and if Xilio Development exercises its option for AskGene’s IL-15 patent rights, then for any IL-15 licensed product, Xilio Development is obligated to pay AskGene percentage royalties in the low single digits on aggregate annual net sales of IL-15 licensed products in the Xilio Development territory during the applicable royalty term.

During the term of the agreement, AskGene has agreed not to exploit the following in the field of oncology in the Xilio Development territory: (i) any non-antigen binding IL-2 product, and (ii) if Xilio Development exercises its option for AskGene’s IL-15 patent rights, any non-antigen binding IL-15 product.

In addition, under the agreement, Xilio Development granted a non-exclusive, royalty-free, non-transferable, worldwide license to AskGene for specified Xilio Development patent rights related to non-antigen binding IL-2 products in the field of immunology and for specified Xilio Development patent rights related to antigen binding IL-2 products in all fields. In addition, subject to the terms of the agreement and during the time period specified, Xilio Development granted AskGene an option to obtain an exclusive, royalty-bearing, non-transferable, worldwide license for specified Xilio Development patent rights related to non-antigen binding IL-2 products in the field of immunology and an option to obtain a co-exclusive, royalty-bearing, non-transferable, worldwide license for specified Xilio Development patent rights related to antigen binding IL-2 products in all fields. If AskGene exercises its option, the parties would negotiate and enter into a

license agreement, and AskGene would be obligated to pay Xilio Development up to $17.0 million in aggregate upfront and milestone payments for each licensed product. In addition, subject to specified conditions, for any IL-2 licensed product, AskGene is obligated to pay Xilio Development percentage royalties in the low single digits on aggregate annual net sales of IL-2 licensed products in the AskGene territory during the applicable royalty term.

The Company accounted for the agreement as an asset acquisition, as the Company only acquired licenses to specified patents from AskGene (an input) and no additional processes or outputs as a part of the agreement. The $6.0 million upfront payment was recorded as research and development expense in the consolidated statement of operations and comprehensive loss during the year ended December 31, 2020, as the acquired licenses were determined to have no alternative future use and the technological feasibility of the intellectual property has not yet been reached. The upfront payment was paid in installments between December 2020 and February 2021, with $1.0 million paid as of December 31, 2020. The remaining $5.0 million was paid during the three months ended March 31, 2021 and was recorded within accrued expenses in the accompanying consolidated balance sheets as of December 31, 2020. Any additional payments that are contingent upon achievement of development and regulatory milestones or upon sales of licensed products will not be recognized until it becomes probable that the Company will be required to make such payments.

Amended and Restated Exclusive License Agreement with City of Hope

In August 2016, the Company entered into an amended and restated exclusive license agreement with City of Hope pursuant to which City of Hope granted the Company an exclusive worldwide license to specified patent rights related to the Company’s anti-CTLA-4 monoclonal antibody program.

Under the agreement, the Company issued 24,019 common units to City of Hope. For the first three licensed products or licensed services to achieve specified development and regulatory milestones, the Company is obligated to pay City of Hope up to $10.3 million in the aggregate per licensed product or licensed service. In addition, subject to specified conditions, the Company is obligated to pay City of Hope tiered royalties in the low single digits on aggregate annual net sales of licensed products or licensed services on a country-by-country basis until the expiration of the last-to-expire patent or patent application licensed from City of Hope covering the applicable licensed product or licensed service in such country. The Company is also obligated to pay City of Hope a portion of any consideration the Company receives for the grant of sublicenses under the agreement ranging from a low double digit to mid-twenties percentage of such consideration to low double digit percentage of such consideration, subject to specified conditions under that agreement at the time that the Company grants any such sublicense. The Company incurred $0.3 million in costs related to the payment of specified development milestones under the agreement during the year ended December 31, 2021. The Company incurred no costs related to the payment of specified development milestones under the agreement during the year ended December 31, 2020. In each of the years ended December 31, 2021 and 2020, the Company incurred $10,000 under this agreement, which was recognized as research and development expense in the consolidated statements of operations and comprehensive loss.

In addition, the Company was obligated to pay $0.5 million to City of Hope in connection with the consummation of specified transactions, including an initial public offering. The Company accounted for the $0.5 million contingent payment as a derivative liability. The derivative liability was initially recognized at fair value with any changes in such fair value recorded to other income (expense), net in the accompanying consolidated statement of operations and comprehensive loss. The derivative liability was included in other liabilities, long term on the consolidated balance sheet as of December 31, 2020, and was paid during the fourth quarter of the year ended December 31, 2021 subsequent to the completion of the Company’s IPO. Any additional payments that are contingent upon achievement of development and regulatory milestones or upon sales of licensed products will not be recognized until it becomes probable that the Company will be required to make such payments.

CTLA-4 Monoclonal Antibody License Agreement with WuXi Biologics

In September 2016, the Company entered into a license agreement with WuXi Biologics (Hong Kong) Limited (“WuXi Biologics”), as amended in December 2017, pursuant to which WuXi Biologics granted the Company an exclusive worldwide license to specified monoclonal antibodies and patent rights and know-how controlled by WuXi Biologics, including certain patent rights related to the Company’s anti-CTLA-4 monoclonal antibody program.

For each product that exploits the rights licensed under the agreement, the Company is obligated to pay WuXi Biologics up to approximately $25.8 million in the aggregate for specified development and regulatory milestones. In addition, subject to specified conditions, the Company is obligated to pay WuXi Biologics tiered royalties in the low to mid-single digits on aggregate annual worldwide net sales of licensed products during the applicable royalty term.

The Company incurred $0.8 million and $1.0 million in costs related to the payment of specified development milestones under the agreement during the years ended December 31, 2021 and 2020, respectively. Any additional payments that are contingent upon the achievement of development and regulatory milestones or sales of licensed products will not be recognized until it becomes probable that the Company will be required to make such payments.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies

Commitments and Contingencies

8. Commitments and Contingencies

Purchase Commitments

In the normal course of business, the Company enters into agreements with contract research organizations for clinical trials and clinical supply manufacturing and with vendors for preclinical research studies and other services and products for operating purposes, and such contracts are generally cancellable by the Company for convenience by providing up to 90 days notice. The Company may be subject to certain termination fees or wind down costs upon termination of these agreements.

Leases

The Company has an operating lease for its headquarters and a finance lease for certain lab equipment. In August 2019, the Company entered into a facility lease agreement with a landlord providing funding for tenant improvements and occupancy of approximately 27,830 square feet of office and laboratory space (the “premises”) at 828 Winter Street, Waltham, Massachusetts. The initial term of the lease expires in March 2030, unless terminated earlier in accordance with the terms of the lease. The Company has a right to a five-year option to extend at then-market rates. The Company took possession of the premises in August 2019 and began tenant improvement, toward which the landlord agreed to fund a maximum of $4.9 million of such improvements. The Company included the expected landlord reimbursement amount of $4.9 million as a reduction to the amount of future minimum lease payments used to calculate the lease liability at lease commencement. The Company received reimbursement for tenant improvements in the amount of $2.0 million during the year ended December 31, 2019 and $2.9 million during the year ended December 31, 2020. Any reimbursement payments either received from the landlord, or due to be received from the landlord, have been recorded as an increase to the operating lease liability. The Company is obligated to pay its portion of real estate taxes and costs related to the premises, including costs of operations, maintenance, repair, replacement, and management of the new leased premises, which it began paying simultaneous with the rent commencement date in March 2020. As of December 31, 2021 and 2020, the Company has a letter of credit for the benefit of its landlord in the amount of $1.6 million, collateralized by a money market fund, which is recorded as restricted cash on the consolidated balance sheets.

The components of lease expense were as follows (in thousands):


	Year Ended
	December 31,
	2021		2020
Operating lease cost	$	1,225	$	1,225
Variable lease cost		—		—
Total lease costs	$	1,225	$	1,225
Finance lease cost:
Amortization of right of use asset	$	85	$	35
Interest on lease liability		16		8

Supplemental balance sheet information related to the leases was as follows (in thousands, except for remaining lease term and discount rates):


	Year Ended
	December 31,
	2021			2020
Operating Lease:
Operating lease right-of-use asset	$	5,977		$	6,309
Operating lease liability, current portion	$	801		$	564
Operating lease liability, net of current portion	$	10,107		$	10,908
Finance Lease:
Other non-current assets	$	303		$	388
Other current liabilities		82			82
Other liabilities, long-term		118			187
Weighted-average remaining lease term (in years):
Operating lease		8.17			9.17
Finance lease		2.70			3.70
Weighted-average discount rate:
Operating lease		8.0	%		8.0	%
Finance lease		6.9	%		6.9	%

Supplemental cash flow information related to leases was as follows (in thousands):


		Year Ended
		December 31,
		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,392	$	1,343
Financing cash flows from finance leases		85		99

Future minimum lease payments under non-cancellable leases as of December 31, 2021 are as follows (in thousands):


	Operating Lease		Finance Lease
2022	$	1,634	$	85
2023		1,683		85
2024		1,733		49
2025		1,785		—
2026		1,839		—
Thereafter		6,361		—
Total future minimum lease payments	$	15,035	$	219
Present value adjustment		(4,127)		(19)
Present value of lease liabilities	$	10,908	$	200

Legal Proceedings

From time to time, the Company may be party to litigation arising in the ordinary course of business. The Company was not subject to any material legal proceedings during the years ended December 31, 2021 and 2020.

Guarantees and Indemnifications

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third-party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential

amount of future payments the Company could be required to make under these provisions is not determinable. The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company has also entered into indemnification agreements with its directors that may require the Company to indemnify its directors against liabilities that may arise by reason of their status or service as directors to the fullest extent permitted by Delaware corporate law. The Company currently has directors’ and officers’ insurance.

Member Units

12 Months Ended

Dec. 31, 2021

Member Units

Member Units

9. Member Units

Prior to the Reorganization, all interests of members in distributions and other amounts were represented by their units of membership in the Company as specified in its LLC Agreement. There were two classes of units, capital units and incentive units. Capital units were comprised of common units and preferred units, which represented a capital interest in the Company, while incentive units represented profits interests within the meaning of IRS Revenue Procedures 93-27 and 2001-43. The various classes of capital units are described below.

Common Units

As part of the Reorganization in June 2020, all common units were converted to common stock. As a result, as of December 31, 2021 and 2020, there were no outstanding common units.

Preferred Units

Prior to the Reorganization in June 2020, the Company had sold Series A, A‑1, and B preferred units, including a tranche of 7,905,138 Series B Convertible Preferred Units issued in February 2020 that resulted in proceeds of $10.0 million net of issuance costs, which were collectively considered the preferred units. As part of the Reorganization in June 2020, all preferred units were converted to preferred stock. As a result, as of December 31, 2021 and 2020, there were no outstanding preferred units.

Reorganization

12 Months Ended

Dec. 31, 2021

Reorganization

Reorganization

10. Reorganization

In connection with the Reorganization:

●

Holders of Xilio Therapeutics LLC outstanding Series A preferred units received one share of Xilio Therapeutics, Inc. Series A convertible preferred stock for each Series A preferred unit held immediately prior to the Reorganization, with an aggregate of 7,500,000 shares of Xilio Therapeutics, Inc. Series A convertible preferred stock issued in the Reorganization;

●

Holders of Xilio Therapeutics LLC outstanding Series A-1 preferred units received one share of Xilio Therapeutics, Inc. Series A-1 convertible preferred stock for each Series A-1 preferred unit held immediately prior to the Reorganization, with an aggregate of 19,565,216 shares of Xilio Therapeutics, Inc. Series A-1 convertible preferred stock issued in the Reorganization;

●

Holders of Xilio Therapeutics LLC outstanding Series B preferred units received one share of Xilio Therapeutics, Inc. Series B convertible preferred stock for each Series B preferred unit held immediately prior to the Reorganization, with an aggregate of 39,723,312 shares of Xilio Therapeutics, Inc. Series B convertible preferred stock issued in the Reorganization;

●

Holders of Xilio Therapeutics LLC outstanding common units received one share of Xilio Therapeutics, Inc. common stock for each outstanding common unit held immediately prior to the Reorganization, with an aggregate of 409,303 shares of common stock issued in the Reorganization;

●

Holders of Xilio Therapeutics LLC outstanding incentive units received shares of Xilio Therapeutics, Inc. restricted common stock in an amount equal in value of such incentive units as determined by the applicable provisions of the Xilio Therapeutics LLC Agreement in effect immediately prior to the Reorganization, with an

aggregate of 552,546 shares of common stock and restricted stock issued in the Reorganization. The restricted common stock awards in Xilio Therapeutics, Inc. were issued with the same vesting terms as the incentive units held immediately prior to the Reorganization; and

●

The outstanding warrant to purchase 25,000 Series A preferred units of Xilio Therapeutics LLC at $1.00 per unit was converted to a warrant to purchase 25,000 shares of Xilio Therapeutics, Inc. Series A convertible preferred stock at the same purchase price.

In evaluating the Reorganization, the Company considered that (i) with the exception of holders of incentive units, there were no changes in ownership interest held by each stockholder as a result of the Reorganization, (ii) the changes in the overall ownership interest of the Company resulting from the changes in ownership interest related to the holders of incentive units as a result of the Reorganization is not significant and (iii) the Reorganization occurred between a parent and wholly owned subsidiary, where the parent, Xilio Therapeutics LLC, had no substantive operations. Based on this evaluation, the Company determined that the Reorganization lacked economic substance and should be accounted for in a manner consistent with a common control transaction. Similarly, there was no significant change in fair value between the stockholders, individually or as a class, and the Company determined that the exchange of shares occurring in the Reorganization should be accounted for as a modification of equity securities.

Preferred Stock and Common Stock

12 Months Ended

Dec. 31, 2021

Preferred Stock and Common Stock

Preferred Stock and Common Stock

11. Preferred Stock and Common Stock

Undesignated Preferred Stock

On October 26, 2021, in connection with the closing of the Company’s IPO, the Company amended and restated its Certificate of Incorporation authorizing the Company to issue 5,000,000 shares of undesignated preferred stock at $0.0001 par value per share.

Convertible Preferred Stock

Upon the closing of the IPO in October 2021, all shares of the Company’s then outstanding convertible preferred stock automatically converted into an aggregate of 18,398,248 shares of common stock. There was no convertible preferred stock outstanding as of December 31, 2021.

As of December 31, 2020, the Company had authorized 126,000,000 shares of common stock and 133,602,056 shares of convertible preferred stock, which consisted of the following: 7,525,000 shares of Series A convertible preferred stock, 19,565,216 shares of Series A-1 convertible preferred stock, 7,500,000 shares of Series A-2(A) convertible preferred stock, 19,565,216 shares of Series A-2(A-1) convertible preferred stock, and 79,446,624 shares of Series B convertible preferred stock (collectively, the “Convertible Preferred Stock”).

On January 20, 2021, the Company issued 39,723,312 shares of Series B convertible preferred stock to existing Series B convertible preferred stockholders at $1.265 per share for cash proceeds of $50.2 million, net of issuance costs.

On February 22, 2021, the Company amended and restated its certificate of incorporation to authorize 174,808,481 shares of Convertible Preferred Stock, of which 7,525,000 shares are designated as Series A convertible preferred stock, 19,565,216 shares are designated as Series A-1 convertible preferred stock, 79,446,624 shares are designated as Series B convertible preferred stock, and 68,271,641 shares are designated as Series C convertible preferred stock.

On February 23, 2021, the Company entered into a stock purchase agreement with existing and new investors whereby the Company issued and sold 68,271,641 shares of Series C convertible preferred stock to investors at $1.3915 per share for cash proceeds of $94.7 million, net of issuance costs.

The Company evaluated the convertible preferred stock and determined that they should be considered an “equity host” and not a “debt host.” The evaluation was necessary to determine if any embedded features required bifurcation and separate accounting as a derivative financial instrument. The Company’s analysis was based on a consideration of the economic characteristics and risks and more specifically, evaluated all the stated and implied substantive terms and features

including (i) whether the convertible preferred stock included redemption features, (ii) how and when any redemption features could have been exercised, (iii) whether the convertible preferred stock were entitled to dividends, (iv) the voting rights of the convertible preferred stock and (v) the existence and nature of any conversion rights. As a result of its evaluation that the convertible preferred stock is an “equity host,” the various embedded conversion options are not considered a separate, embedded derivative.

As of December 31, 2020, Convertible Preferred Stock consisted of the following (in thousands, except share amounts):


	As of December 31, 2020
		Preferred
		Shares					Common Shares
	Preferred Shares	Issued and	Carrying		Liquidation		Issuable Upon
	Authorized	Outstanding	Value		Preference		Conversion
Series A convertible preferred stock	7,525,000	7,500,000	$	7,309	$	7,500	789,473
Series A‑1 convertible preferred stock	19,565,216	19,565,216		20,740		22,500	2,059,496
Series A‑2(A) convertible preferred stock	7,500,000	—		—		—	—
Series A‑2(A‑1) convertible preferred stock	19,565,216	—		—		—	—
Series B convertible preferred stock	79,446,624	39,723,312		49,953		50,250	4,181,390
	133,602,056	66,788,528	$	78,002	$	80,250	7,030,359

The terms of the Convertible Preferred Stock prior to the conversion to common stock were as follows:

Liquidation

In the event of any liquidation, dissolution or winding up of affairs of the Company (including a change of control), distributions would have first been made to holders of the Series B convertible preferred stock until, on a share by share basis, each share of Series B convertible preferred stock has been distributed its original issuance price ($1.265) plus any declared but unpaid dividends. After distribution to the Series B convertible preferred stock holders, the holders of Series A, Series A-1, Series A-2(A) and Series A-2(A-1) convertible preferred stock would have received a distribution until, on a share by share basis, each share of Series A, Series A-1, Series A-2(A) and Series A-2(A-1) convertible preferred stock had been distributed an amount equal to the Series A, Series A-1, Series A-2(A) and Series A-2(A-1) convertible preferred stock original issuance price plus any declared but unpaid dividends. The Series A, Series A-1, Series A-2(A) and Series A-2(A-1) convertible preferred stock issuance prices were $1.00, $1.15, $1.00, and $1.15 per stock, respectively. After distribution to the Series A, Series A-1, Series A-2(A) and Series A-2(A-1) holders, the holders of all securities as if all such securities had been converted to common stock, would have received a distribution until, on a share by share basis, each share of Convertible Preferred Stock holder had been distributed an amount equal to two and one-half times the sum of its respective original issuance price and declared but unpaid dividends after which the holders of common stock would have received a distribution until, on a common stock by common stock basis, each share of common stock had been distributed a catch-up amount such that the aggregate distributions made to the common stock were the same as the average aggregate distributions made to the Convertible Preferred Stock. Any remaining amounts would have been distributed to the holders of the common stock and Convertible Preferred Stock in proportion to the number of shares of stock held by each (on an as-converted basis).

Conversion

Shares of Convertible Preferred Stock may have been converted by the holder at any time into a number of shares of common stock equal to such number of shares as determined by dividing the original issue price by the conversion price in effect at the time. The conversion price of the Series A convertible preferred stock was equal to $9.50, the conversion price of the Series A-1 convertible preferred stock was equal to $10.93 and the conversion price of the Series B convertible preferred stock was equal to $12.02, in each case as of December 31, 2020. The conversion price was subject to adjustments in the event of any stock dividend, stock split, combination or other similar recapitalization and other adjustments as set forth in the Company’s certificate of incorporation. Upon the closing of a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended,

in which the aggregate gross proceeds to the Company are at least $50 million, all outstanding Convertible Preferred Stock were to be automatically converted into a number of shares of common stock at the then applicable conversion rate.

If a defaulting purchaser failed to purchase the Series B convertible preferred stock it was required to purchase pursuant to the Series B Agreement, then each share of Convertible Preferred Stock held by such defaulting purchaser (and by any of such defaulting purchaser’s affiliates or any predecessor, transferor or assignor, successor, transferee or assign of such defaulting purchaser or such defaulting purchaser’s affiliates) would have automatically converted as follows: each 10 shares of Series B convertible preferred stock would have converted into 0.1053 shares of common stock, each share of Series A convertible preferred stock would have converted into one share of Series A-2(A) convertible preferred stock and each share of Series A-1 convertible preferred stock would have converted into one share of Series A-2(A-1) convertible preferred stock.

Voting

Holders of Convertible Preferred Stock vote together with the holders of common stock as a single class. Any action to be taken by the stockholders requires the approval of stockholders holding a majority of the outstanding shares of Convertible Preferred Stock and common stock, voting together as a single class on an as-converted basis, unless a different threshold is specifically required by law or by the Company’s certificate of incorporation.

Dividends

If any dividends were declared by the board of directors on the Convertible Preferred Stock, such dividends would have been at an annual rate of $0.060 per share of Series A convertible preferred stock, $0.069 per share of Series A-1 convertible preferred stock and $0.0759 per share of Series B convertible preferred stock, subject in each case to appropriate adjustment in the event of any dividend, split, combination or other similar recapitalization with respect to the applicable series of Convertible Preferred Stock, and were to be non-cumulative. Holders of Series A-2(A) and A-2(A-1) convertible preferred stock were not entitled to receive any dividends. Since inception, the Company has not declared any dividends.

Common Stock

Prior to the completion of the Company’s IPO, the voting, dividend and liquidation rights of the holders of shares of common stock were subject to and qualified by the rights, powers and preferences of the holders of shares of the Company’s convertible preferred stock. The rights, preferences and privileges of the Company’s common stock were as follows:

Voting

The holders of shares of common stock were entitled to one vote for each share of common stock held at any meeting of stockholders and at the time of any written action in lieu of a meeting of stockholders.

Dividends

The holders of shares of common stock were entitled to receive dividends, if and when declared by the Company’s board of directors. Cash dividends could not be declared or paid to holders of shares of common stock until all unpaid dividends on Preferred Stock had been paid in accordance with their terms.

Subsequent to the completion of the Company’s IPO, the voting, dividend and liquidation rights of the holders of shares of common stock are subject to and qualified by the rights, powers and preferences of the holders of shares of the Company’s undesignated preferred stock, if and when such shares are issued. The rights, preferences and privileges of the Company’s common stock are as follows:

Voting

The holders of shares of common stock are entitled to one vote for each share of common stock held at any meeting of stockholders and at the time of any written action in lieu of a meeting of stockholders.

Dividends

The holders of shares of common stock are entitled to receive dividends, if and when declared by the Company’s board of directors. No dividends have been declared by the Company’s board of directors or paid by the Company to the holders of common stock since the issuance of the common stock.

Liquidation

Upon the dissolution, liquidation or winding up of the Company, whether voluntary or involuntary, holders of the common stock will be entitled to receive, pro rata based on the number of shares held by each such holder, all assets of the Company available for distribution to its stockholders, subject to any preferential or other rights of any then outstanding preferred stock.

Shares Reserved for Future Issuance

As of December 31, 2021 and 2020, the Company had reserved shares of common stock for the conversion of outstanding Convertible Preferred Stock and for future issuance under the 2020 Stock Incentive Plan (as amended, the “2020 Plan”), the 2021 Stock Incentive Plan (the “2021 Plan”) and the 2021 Employee Stock Purchase Plan (the “2021 ESPP”) as follows:


	December 31,	December 31,
	2021	2020
Shares of common stock reserved for conversion of convertible preferred stock outstanding	—	7,030,359
Shares of common stock reserved for exercise of a warrant	2,631	2,631
Shares of common stock reserved for exercise of outstanding stock options under the 2021 and 2020 Stock Incentive Plans	4,088,456	810,358
Shares of common stock reserved for future awards under the 2021 and 2020 Stock Incentive Plans	2,349,875	151,769
Shares of common stock reserved for purchase under the 2021 Employee Stock Purchase Plan	292,031	—
Total shares reserved for future issuance	6,732,993	7,995,117

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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+ Details

Equity-Based Compensation

12 Months Ended

Dec. 31, 2021

Equity-Based Compensation

Equity-Based Compensation

12. Equity-Based Compensation

Equity Incentive Plans

2020 Stock Incentive Plan

In July 2020, the Company’s stockholders approved the 2020 Plan. Under the 2020 Plan, the Company was initially authorized to issue up to 991,021 shares of common stock to the Company’s employees, officers, directors, consultants, and advisors in the form of options, restricted stock awards or other stock-based awards. The 2020 Plan is administered by the board of directors, which has the power to determine the terms of the awards agreements, including the vesting requirements, provided that generally the exercise price per share of stock options granted could not be less than 100% of the fair market value of a share of the Company’s common stock on the date of grant, and the term of stock options granted could not exceed ten years. Vesting of stock options and restricted stock is subject to the recipient’s continued employment or service. The Company has the right to repurchase any unvested shares of restricted stock held by a recipient during the vesting period if the relationship between the recipient and the Company has terminated. For any awards under the 2020

Plan that expire or are terminated, surrendered, or canceled without having been fully exercised, if forfeited in whole or in part (including as the result of shares of common stock subject to such award being repurchased by the Company), the unused common stock subject to such award shall again be available for the grant of future awards. Shares of common stock that are tendered to the Company by a participant to exercise an award are added to the number of shares of common stock available for future awards. Shares of common stock may be withheld to satisfy applicable federal, state or local employment tax withholding obligations related to equity awards. Upon stock option exercise, the Company issues new shares and delivers them to the participant. As of December 31, 2020, the Company had issued service-based and performance-based stock options under the 2020 Plan. Stock options issued comprise awards granted to employees, non-employees, and directors.

During the year ended December 31, 2021, the Company amended its 2020 Plan to increase the common stock issuable under the 2020 Plan from 991,021 shares to 3,773,235 shares, plus up to 364,120 of additional shares of common stock equal to the number of shares of unvested restricted stock issued in exchange for incentive units as part of the Reorganization, to the extent such shares have been or will be forfeited.

2021 Stock Incentive Plan

In September 2021, the Company’s board of directors adopted, and in October 2021, the Company’s stockholders approved, the 2021 Plan, which became effective on October 21, 2021, immediately prior to the effectiveness of the Company’s registration statement on Form S-1 filed with the SEC on October 1, 2021, as amended (the “Registration Statement”). Upon effectiveness of the 2021 Plan, the Company ceased granting awards under the 2020 Plan. The 2021 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units, and other stock-based awards. The number of shares of the Company’s common stock initially reserved for issuance under the 2021 Plan is the sum of (1) 2,654,828; plus (2) the number of shares (up to 3,967,038 shares) as is equal to the sum of (x) the number of shares of the Company’s common stock reserved for issuance under the 2020 Plan that remained available for grant under the 2020 Plan immediately prior to the effectiveness of the Registration Statement and (y) the number of shares of the Company’s common stock subject to outstanding awards whether granted under the 2020 Plan or outside of the 2020 Plan which awards expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by us at their original issuance price pursuant to a contractual repurchase right and that, prior to the effectiveness of the 2021 Plan, would have become available for issuance under the 2020 Plan; plus (3) an annual increase, to be added on the first day of each fiscal year, beginning with the fiscal year, commencing on January 1, 2022 and continuing until, and including, January 1, 2031, equal to the lesser of (i) 5% of the number of shares of the Company’s common stock outstanding on the first day of such fiscal year and (ii) the number of shares of common stock determined by the Company’s board of directors. Effective January 1, 2022, the number of shares reserved for issuance under the 2021 Plan increased by 1,373,447 shares.

As of December 31, 2021, there were 2,349,875 shares available for future issuance under the 2021 Plan.

2021 Employee Stock Purchase Plan

In September 2021, the Company’s board of directors adopted, and in October 2021, the Company’s stockholders approved the 2021 ESPP, which became effective on October 21, 2021, immediately prior to the effectiveness of the Registration Statement. The 2021 ESPP initially provides participating employees with the opportunity to purchase up to an aggregate of 292,031 shares of the Company’s common stock. The number of shares of common stock reserved for issuance under the 2021 ESPP will automatically increase on each January 1, beginning on January 1, 2022 and ending on January 1, 2031, by the lesser of (i) 584,062 shares of common stock, (ii) 1% of the number of shares of the Company’s common stock outstanding on such date, and (iii) a number of shares of common stock as determined by the Company’s board of directors. Effective January 1, 2022, the number of shares reserved for issuance under the 2021 ESPP increased by 274,689 shares. As of December 31, 2021, no offering periods have commenced under the 2021 ESPP.

Total Equity-Based Compensation Expense

During the years ended December 31, 2021 and 2020, the Company recorded compensation expense related to incentive units, stock options and restricted common stock for employees and non-employees, which was allocated as follows in the consolidated statements of operations and comprehensive loss (in thousands):


	Year Ended December 31,
	2021		2020
Research and development expense	$	1,290	$	332
General and administrative expense		3,668		964
Total equity-based compensation expense	$	4,958	$	1,296

Stock Options

A summary of stock option activity under the Company’s Stock Incentive Plans is as follows:


				Weighted
				Average
				Remaining	Aggregate
		Weighted		Contractual	Intrinsic
	Number of	Average		Term	Value
	Stock Options	Exercise Price		(In years)	(In thousands)
Outstanding as of December 31, 2020	810,358	$	5.51	9.52	$	—
Granted	3,786,967		8.93
Exercised	(47,900)		5.90
Cancelled/forfeited	(460,969)		6.22
Outstanding as of December 31, 2021	4,088,456		8.59	9.13	$	30,291
Exercisable as of December 31, 2021	717,562		6.22	8.08	$	7,019
Vested and expected to vest as of December 31, 2021	4,088,456		8.59	9.13	$	30,291

Using the Black-Scholes option pricing model, the weighted average fair value of options granted to employees and directors during the years ended December 31, 2021 and 2020 was $6.28 per share and $3.60 per share, respectively. The Company satisfies stock option exercises with newly issued shares of common stock. The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2021 and 2020 was $0.5 million and none, respectively.

The following assumptions were used in determining the fair value of options granted to employees during the years ended December 31, 2021 and 2020:


	Year Ended December 31,
	2021			2020
Risk-free interest rate		0.63 – 1.39	%		0.16 – 0.36	%
Expected dividend yield		0	%		0	%
Expected term (in years)		5.52 – 10.00			2.25 – 6.08
Expected volatility		80.55 – 85.26	%		78.84 – 96.73	%

The performance conditions underlying the performance-based awards are not probable of achievement as of December 31, 2021. Therefore, no compensation expense has been recorded for these awards. At December 31, 2021, total unrecognized compensation expense related to performance-based awards was insignificant.

As of December 31, 2021, the Company had unrecognized equity-based compensation expense of $19.7 million related to stock options issued to employees and directors, excluding performance-based awards for which vesting is not considered probable, which is expected to be recognized over a weighted average period of 3.11 years.

During the year ended December 31, 2021, the Company entered into separation agreements with two former employees. Pursuant to the separation agreements, the former employees terminated their employment with the Company and agreed to provide certain consulting services to the Company through October 15, 2021 and November 30, 2021, respectively, during which the former employees’ equity awards continued to vest. In addition, the Company extended the former employees’ periods to exercise their vested options until 90 days from the termination date of the respective consulting periods. Because the services to be performed during the consulting period were considered non-substantive, the Company concluded that the former employees’ equity awards were modified. As a result of these modifications, the Company recognized $0.2 million in equity-based compensation expense in the statement of operations and comprehensive loss during the year ended December 31, 2021.

Restricted Stock

A summary of the Company’s restricted stock activity and related information is as follows:


	Number	Weighted
	of Shares	Average
	of Restricted	Grant Date
	Stock	Fair Value
Unvested as of December 31, 2020	283,969	$	5.51
Vested	(103,192)		5.51
Canceled/Forfeited	(70,202)		5.51
Unvested as of December 31, 2021	110,575		5.51

The Company had granted 552,546 shares of common stock underlying restricted stock awards as of June 30, 2020 in connection with the Reorganization. No restricted stock awards were granted during the year ended December 31, 2021. The Company recorded equity-based compensation expense for restricted stock granted to employees, directors and non-employees of $0.5 million and $0.3 million for the years ended December 31, 2021 and 2020, respectively. During the year ended December 31, 2021, the aggregate fair value of the restricted stock awards that vested was $1.0 million. As of December 31, 2021, total unrecognized compensation cost related to unvested restricted stock awards was approximately $0.7 million, which is expected to be recognized over a weighted-average period of 1.76 years.

Incentive Units

Prior to the Reorganization, the Company periodically granted incentive units to employees, directors and non-employees. The incentive units represented a separate substantive class of equity with defined rights within the LLC Agreement then in effect. The incentive units represented profits interests in the Company, which was an interest in the increase in the value of the Company over the strike price, or threshold dollar amount, determined at the time of grant. The holder, therefore, had the right to participate in distributions of profits only in excess of the threshold dollar amount. The threshold dollar amount was based on the valuation of the Company’s common units on or around the grant date. The Company determined that incentive units issued to employees, directors and non-employees were analogous to share-based payments and, as such, the Company measured and recognized the related compensation expense in a manner consistent with its accounting policy for its other equity-based awards. Pursuant to the LLC Agreement, the board of directors established a threshold dollar amount with respect to each incentive unit grant equal to the value of each common unit, determined by the amount of distributions that the holder of such a common unit would be entitled to receive in a hypothetical liquidation of the Company on the date of issuance of such incentive unit. Incentive unit grants generally vested over a four-year period. Certain grants vested upon the achievement of specific performance based milestones. If there was a liquidation or sale of the Company or one of the Company’s subsidiaries, a fair market value analysis would have been performed to determine the value of the common unit. If the value of the common unit was to be determined to have been greater than the threshold set upon the date of grant, then the holder of the common incentive unit would have been entitled to receive

proceeds from such liquidation or sale. Unvested incentive units were automatically cancelled and forfeited without any consideration upon termination of the participant’s continuous service to the Company.

At December 31, 2018, 3,570,000 incentive units were authorized to be granted. In June 2019, the Company amended and restated its LLC Agreement and increased the total number of incentive units authorized for issuance to 5,830,000 incentive units. In December 2019 the Company amended its LLC Agreement to increase the authorized number of incentive units available for issuance to 14,669,430. As of December 31, 2019, the Company had issued 585,777 incentive units, of which 571,712 units were outstanding.

A summary of the Company’s incentive units through the date of the Reorganization was as follows:


		Weighted-average		Weighted-average
	Number of	threshold price		fair value
	units	per unit		per unit
Outstanding at December 31, 2019	571,712	$	0.95	$	1.05
Granted	512,095		1.43		3.61
Forfeited	(2,949)		0.86		0.57
Exchanged for restricted common stock pursuant to the Reorganization	(1,080,858)		1.14		2.28
Outstanding at December 31, 2020	—

The weighted average grant date fair value for incentive units granted during the year ended December 31, 2020 was $3.61 per unit. There were no incentive units granted during the year ended December 31, 2021.

A summary of incentive units vested immediately prior to the date of the Reorganization is as follows:


		Number of
		units
Vested at December 31, 2019		187,773
Vested immediately prior to the Reorganization		118,099
Vested as of the Reorganization		305,872

Prior to the Reorganization, the Company recorded equity-based compensation expense for incentive units granted to employees, directors and non-employees of approximately $0.2 million for the year ended December 31, 2020.

The fair value of the incentive units issued was determined using a Black-Scholes option pricing model with the following assumptions (weighted-average):


	Year Ended
	December 31,
	2020
Grant date price per common unit	$	4.47
Threshold price per incentive unit	$	1.43
Risk-free interest rate		0.74	%
Expected dividend yield		0.00	%
Expected term (years)		6.0
Expected volatility		69.30	%

Reorganization

Pursuant to the Reorganization, outstanding vested and unvested incentive units of Xilio Therapeutics LLC were converted into restricted stock awards in Xilio Therapeutics, Inc. based upon a determined conversion ratio. The restricted common stock awards in Xilio Therapeutics, Inc. were issued with the same vesting terms as the vested and unvested incentive units

held immediately prior to the Reorganization. An aggregate of 552,546 shares of restricted common stock were issued to holders of incentive units in connection with the Reorganization.

The Company accounted for the exchange of incentive units in Xilio Therapeutics LLC for restricted common stock of Xilio Therapeutics, Inc. as a modification in accordance with the requirements of ASC Topic 718. Accordingly, the Company determined the fair value of the replacement awards was less than the fair value of the incentive units exchanged in connection with the Reorganization and therefore no incremental compensation expense will be recognized related to the modification. As the vesting and service period of the replacement awards did not change from the originally issued incentive awards, the Company will continue to recognize the grant date fair value of the incentive units as compensation expense over the remaining vesting period.

Net Loss Per Share

12 Months Ended

Dec. 31, 2021

Net Loss Per Share

Net Loss Per Share

13. Net Loss Per Share

The following table sets forth the outstanding common stock equivalents, presented based on amounts outstanding at each period end, that were excluded from the calculation of diluted net loss per share for the periods indicated because including them would have been anti-dilutive.


	Year Ended
	December 31,
	2021	2020
Convertible preferred stock	—	7,030,359
Unvested restricted common stock	110,575	283,969
Outstanding stock options	4,088,456	810,358
Warrants	2,631	2,631
Total common stock equivalents	4,201,662	8,127,317

Income Taxes

12 Months Ended

Dec. 31, 2021

Income Taxes

Income Taxes

14. Income Taxes

The Company has not recorded a current or deferred tax provision for the years ended December 31, 2021 and 2020. The effective income tax rate differed from the amount computed by applying the federal statutory rate to the Company’s loss before income taxes as follows:


	Year Ended December 31,
	2021		2020
Tax effected at statutory rate	21.0	%	21.0	%
State taxes	6.7		6.9
Equity-based compensation	(0.5)		(0.4)
Non-deductible expenses	(0.3)		—
Federal research and development credits	1.7		1.7
Change in valuation allowance	(28.6)		(29.2)
Effective income tax rate	0.0	%	0.0	%

Deferred tax assets consist of the following at December 31, 2021 and 2020 (in thousands):


	Year Ended December 31,
	2021		2020
Deferred tax assets:
Federal net operating loss carryforwards	$	31,387	$	16,376
State net operating loss carryforwards		8,910		4,400
Research and development credit carryforwards		3,873		2,101
Lease liability		2,980		3,134
Accruals and reserves		340		765
Intangible assets		2,061		1,912
Equity-based compensation		733		105
Total deferred tax assets:		50,284		28,793
Valuation allowance		(46,745)		(25,064)
Subtotal		3,539		3,729
Deferred tax liabilities:
Property and equipment		(1,883)		(1,944)
Right of use asset		(1,633)		(1,724)
Debt discount		(23)		(61)
Total deferred tax liabilities		(3,539)		(3,729)
Net deferred tax assets	$	—	$	—

The Company has had no income tax expense due to operating losses incurred since inception. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets. Based on this, the Company has provided a valuation allowance for the full amount of the net deferred tax assets as the realization of the deferred tax assets is not determined to be more likely than not. During the year ended December 31, 2021, the valuation allowance increased by $21.7 million primarily due to the increase in the Company’s book loss reported in the period and the generation of additional research and development credits.

As of December 31, 2021, the Company had $149.5 million and $141.0 million of federal and state operating loss carryforwards, respectively. Of the federal net operating loss carryovers, $144.6 million are not subject to expiration and the remaining federal and state net operating loss carryovers begin to expire in 2035. These loss carryforwards are available to reduce future federal taxable income, if any. As of December 31, 2021, the Company had $2.8 million and $1.4 million of federal and state credit carryovers which begin to expire in 2033. These loss and credit carryforwards are subject to review and possible adjustment by the appropriate taxing authorities.

Utilization of the Company’s net operating loss (“NOL”) carryforwards and research and development credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that have occurred previously or that could occur in the future in accordance with Section 382 of the Internal Revenue Code of 1986, as amended (“Section 382”) as well as similar state provisions. These ownership changes may limit the amount of NOL and research and development credit carryforwards that can be utilized annually to offset future taxable income and taxes, respectively. In general, an ownership change as defined by Section 382 results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50% over a three-year period. Since its formation, the Company has raised capital through the issuance of capital stock on several occasions. These financings could result in a change of control as defined by Section 382. The Company has not yet completed a detailed study of its inception to date ownership change activity.

The Company follows the provisions of ASC 740-10, Accounting for Uncertainty in Income Taxes, which specifies how tax benefits for uncertain tax positions are to be recognized, measured, and recorded in financial statements; requires certain disclosures of uncertain tax matters; specifies how reserves for uncertain tax positions should be classified on the balance sheet; and provides transition and interim period guidance, among other provisions. As of December 31, 2021, and 2020, the Company has not recorded tax reserves associated with any unrecognized tax benefits. The Company’s

policy is to recognize interest and penalties accrued on any uncertain tax positions as a component of income tax expense, if any, in its statements of income. As of December 31, 2021, and 2020, the Company had no reserves for uncertain tax positions. For the years ended December 31, 2021 and 2020, no estimated interest or penalties were recognized on uncertain tax positions. The Company has not recorded any interest or penalties on any unrecognized tax benefits since its inception.

The Company has not conducted a study of its research and development credit carryforwards. This study may result in an adjustment to research and development credit carryforwards; however, until a study is completed, and any adjustment is known, no amounts are being presented as an uncertain tax position. A full valuation allowance has been provided against the Company’s research and development credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be no impact to the consolidated balance sheets or statements of operations and comprehensive loss if an adjustment were required.

The Company’s tax returns remain open to examination by the Internal Revenue Service and the Commonwealth of Massachusetts for the years ended December 31, 2018 to December 31, 2020. In addition, the Company’s tax carryover attributes such as net operating losses or credits from earlier periods are also subject to examination. The Company is currently not subject to any examinations by the Internal Revenue Service or any other tax authorities for any tax years.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI http://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

401(k) Plan

12 Months Ended

Dec. 31, 2021

401(k) Plan

401(k) Plan

15. 401(k) Plan

In 2018, the Company established a defined contribution savings plan under Section 401(k) of the Internal Revenue Code, as amended, the Xilio Therapeutics, Inc. 401(k) Plan (the “401(k) Plan”). The 401(k) Plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. The Company is not required to make and has not made any contributions to the 401(k) Plan through December 31, 2021.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2021

Summary of Significant Accounting Policies

Basis of Presentation

Principles of Consolidation

Reverse Stock Split

Use of Estimates

Segment Information

Cash Equivalents and Restricted Cash


	December 31,		December 31,
	2021		2020
Cash and cash equivalents	$	198,053	$	19,238
Restricted cash		1,553		1,551
Total cash, cash equivalents and restricted cash as shown on the consolidated statement of cash flows	$	199,606	$	20,789

Concentrations of Credit Risk and Significant Suppliers

Fair Value Measurements

●

Level 1—Quoted prices in active markets for identical assets or liabilities.

●

Property and Equipment


		Estimated Useful Life
Computers and software		3 years
Laboratory equipment		5 years
Furniture and fixtures		5 years
Leasehold improvements		Shorter of the useful life or the remaining term of the lease

Impairment of Long-Lived Assets

Leases

The Company has lease agreements with lease and non-lease components, which are accounted for as a combined element.

Research and Development Costs and Accruals

Acquired In-Process Research and Development ("IPR&D")

Acquired In-Process Research and Development (“IPR&D”)

Patent Costs

Equity-Based Compensation

Convertible Preferred Stock

Comprehensive Loss

Net Loss Per Share

Income Taxes

Recently Adopted and Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Summary of Significant Accounting Policies

Schedule of cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash consists of the following (in thousands):


	December 31,		December 31,
	2021		2020
Cash and cash equivalents	$	198,053	$	19,238
Restricted cash		1,553		1,551
Total cash, cash equivalents and restricted cash as shown on the consolidated statement of cash flows	$	199,606	$	20,789

Schedule of estimated useful lives of assets


		Estimated Useful Life
Computers and software		3 years
Laboratory equipment		5 years
Furniture and fixtures		5 years
Leasehold improvements		Shorter of the useful life or the remaining term of the lease

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2021

Fair Value Measurements

Schedule of financial assets and liabilities at fair value on a recurring basis

The fair value of these assets and liabilities was determined as follows (in thousands):


			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
		December 31,	Assets		Inputs		Inputs
	2020		Level 1		Level 2		Level 3
Financial assets:
Cash equivalents—money market funds	$	—	$	—	$	—	$	—
Total financial assets	$	—	$	—	$	—	$	—
Financial liabilities:
Debt derivative liability	$	396	$	—	$	—	$	396
Other derivative liability		407		—		—		407
Warrant to purchase Series A convertible preferred stock		22		—		—		22
Total financial liabilities	$	825	$	—	$	—	$	825


			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	December 31,		Assets		Inputs		Inputs
	2021		Level 1		Level 2		Level 3
Financial assets:
Cash equivalents—money market funds	$	8,534	$	8,534	$	—	$	—
Total financial assets	$	8,534	$	8,534	$	—	$	—

Schedule of change fair value of the liabilities, measured with Level 3


							Total
			Debt		Other		level 3
	Warrant		derivative		derivative		financial
	liability		liability		liability		liabilities
Balance at December 31, 2019	$	17	$	357	$	—	$	374
Recognition of other derivative liability		—		—		325		325
Change in fair value of liability		5		39		82		126
Balance at December 31, 2020	$	22	$	396	$	407	$	825
Change in fair value of liability		6		354		93		453
Settlement of liability		—		(750)		(500)		(1,250)
Conversion of warrant liability to equity upon initial public offering		(28)		—		—		(28)
Balance at December 31, 2021	$	—	$	—	$	—	$	—

Property and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2020

Property and Equipment, Net

Summary of property and equipment, net

Property and equipment, net consists of the following as of December 31, 2021 and 2020 (in thousands):


	December 31,		December 31,
	2021		2020
Laboratory equipment	$	3,805	$	2,925
Computers and software		228		228
Furniture and fixtures		636		482
Leasehold improvements		5,124		5,092
Construction in process		539		—
Total property and equipment	$	10,332	$	8,727
Less accumulated depreciation		(2,712)		(1,360)
Property and equipment, net	$	7,620	$	7,367

Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2021

Accrued Expenses

Summary of accrued expenses

Accrued expenses consist of the following as of December 31, 2021 and 2020 (in thousands):


	December 31,		December 31,
	2021		2020
External research and development	$	2,794	$	11,060
Personnel-related		5,145		2,013
Professional and consulting fees		491		481
Other		321		178
Total accrued expenses	$	8,751	$	13,732

Loan and Security Agreement (Tables)

12 Months Ended

Dec. 31, 2021

Loan and Security Agreement

Schedule of minimum aggregate future loan payments

The Company has the following minimum aggregate future loan payments under the Loan Agreement at December 31, 2021 (in thousands):


	Minimum Loan
	Payments
2022	$	—
2023		6,667
2024		3,333
Total future principal payments		10,000
Less: unamortized discount		(372)
Total notes payable	$	9,628

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies

Schedule of components of lease expense

The components of lease expense were as follows (in thousands):


	Year Ended
	December 31,
	2021		2020
Operating lease cost	$	1,225	$	1,225
Variable lease cost		—		—
Total lease costs	$	1,225	$	1,225
Finance lease cost:
Amortization of right of use asset	$	85	$	35
Interest on lease liability		16		8

Schedule of supplemental balance sheet information related to leases

Supplemental balance sheet information related to the leases was as follows (in thousands, except for remaining lease term and discount rates):


	Year Ended
	December 31,
	2021			2020
Operating Lease:
Operating lease right-of-use asset	$	5,977		$	6,309
Operating lease liability, current portion	$	801		$	564
Operating lease liability, net of current portion	$	10,107		$	10,908
Finance Lease:
Other non-current assets	$	303		$	388
Other current liabilities		82			82
Other liabilities, long-term		118			187
Weighted-average remaining lease term (in years):
Operating lease		8.17			9.17
Finance lease		2.70			3.70
Weighted-average discount rate:
Operating lease		8.0	%		8.0	%
Finance lease		6.9	%		6.9	%

Schedule of supplemental cash flow information related to leases

Supplemental cash flow information related to leases was as follows (in thousands):


		Year Ended
		December 31,
		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,392	$	1,343
Financing cash flows from finance leases		85		99

Schedule of Future Lease Payments Under Operating Leases

Future minimum lease payments under non-cancellable leases as of December 31, 2021 are as follows (in thousands):


	Operating Lease		Finance Lease
2022	$	1,634	$	85
2023		1,683		85
2024		1,733		49
2025		1,785		—
2026		1,839		—
Thereafter		6,361		—
Total future minimum lease payments	$	15,035	$	219
Present value adjustment		(4,127)		(19)
Present value of lease liabilities	$	10,908	$	200

Schedule of Future Lease Payments Under financing Leases

Future minimum lease payments under non-cancellable leases as of December 31, 2021 are as follows (in thousands):


	Operating Lease		Finance Lease
2022	$	1,634	$	85
2023		1,683		85
2024		1,733		49
2025		1,785		—
2026		1,839		—
Thereafter		6,361		—
Total future minimum lease payments	$	15,035	$	219
Present value adjustment		(4,127)		(19)
Present value of lease liabilities	$	10,908	$	200

Preferred Stock and Common Stock (Tables)

12 Months Ended

Dec. 31, 2021

Preferred Stock and Common Stock

Schedule of convertible preferred stock

As of December 31, 2020, Convertible Preferred Stock consisted of the following (in thousands, except share amounts):


	As of December 31, 2020
		Preferred
		Shares					Common Shares
	Preferred Shares	Issued and	Carrying		Liquidation		Issuable Upon
	Authorized	Outstanding	Value		Preference		Conversion
Series A convertible preferred stock	7,525,000	7,500,000	$	7,309	$	7,500	789,473
Series A‑1 convertible preferred stock	19,565,216	19,565,216		20,740		22,500	2,059,496
Series A‑2(A) convertible preferred stock	7,500,000	—		—		—	—
Series A‑2(A‑1) convertible preferred stock	19,565,216	—		—		—	—
Series B convertible preferred stock	79,446,624	39,723,312		49,953		50,250	4,181,390
	133,602,056	66,788,528	$	78,002	$	80,250	7,030,359

Schedule of Shares Reserved for Future Issuance


	December 31,	December 31,
	2021	2020
Shares of common stock reserved for conversion of convertible preferred stock outstanding	—	7,030,359
Shares of common stock reserved for exercise of a warrant	2,631	2,631
Shares of common stock reserved for exercise of outstanding stock options under the 2021 and 2020 Stock Incentive Plans	4,088,456	810,358
Shares of common stock reserved for future awards under the 2021 and 2020 Stock Incentive Plans	2,349,875	151,769
Shares of common stock reserved for purchase under the 2021 Employee Stock Purchase Plan	292,031	—
Total shares reserved for future issuance	6,732,993	7,995,117

Equity-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2021

Equity-Based Compensation

Schedule of recorded compensation expense related to incentive units, stock options, and restricted common stock


	Year Ended December 31,
	2021		2020
Research and development expense	$	1,290	$	332
General and administrative expense		3,668		964
Total equity-based compensation expense	$	4,958	$	1,296

Summary of stock option activity


				Weighted
				Average
				Remaining	Aggregate
		Weighted		Contractual	Intrinsic
	Number of	Average		Term	Value
	Stock Options	Exercise Price		(In years)	(In thousands)
Outstanding as of December 31, 2020	810,358	$	5.51	9.52	$	—
Granted	3,786,967		8.93
Exercised	(47,900)		5.90
Cancelled/forfeited	(460,969)		6.22
Outstanding as of December 31, 2021	4,088,456		8.59	9.13	$	30,291
Exercisable as of December 31, 2021	717,562		6.22	8.08	$	7,019
Vested and expected to vest as of December 31, 2021	4,088,456		8.59	9.13	$	30,291

Schedule of assumptions used in determining the fair value of options granted to employees


	Year Ended December 31,
	2021			2020
Risk-free interest rate		0.63 – 1.39	%		0.16 – 0.36	%
Expected dividend yield		0	%		0	%
Expected term (in years)		5.52 – 10.00			2.25 – 6.08
Expected volatility		80.55 – 85.26	%		78.84 – 96.73	%

Schedule of company's restricted stock activity


	Number	Weighted
	of Shares	Average
	of Restricted	Grant Date
	Stock	Fair Value
Unvested as of December 31, 2020	283,969	$	5.51
Vested	(103,192)		5.51
Canceled/Forfeited	(70,202)		5.51
Unvested as of December 31, 2021	110,575		5.51

Summary of the Company's incentive unit activity


		Weighted-average		Weighted-average
	Number of	threshold price		fair value
	units	per unit		per unit
Outstanding at December 31, 2019	571,712	$	0.95	$	1.05
Granted	512,095		1.43		3.61
Forfeited	(2,949)		0.86		0.57
Exchanged for restricted common stock pursuant to the Reorganization	(1,080,858)		1.14		2.28
Outstanding at December 31, 2020	—

Summary of vested incentive units


		Number of
		units
Vested at December 31, 2019		187,773
Vested immediately prior to the Reorganization		118,099
Vested as of the Reorganization		305,872

Schedule of assumptions which estimate the fair value of incentive units

The fair value of the incentive units issued was determined using a Black-Scholes option pricing model with the following assumptions (weighted-average):


	Year Ended
	December 31,
	2020
Grant date price per common unit	$	4.47
Threshold price per incentive unit	$	1.43
Risk-free interest rate		0.74	%
Expected dividend yield		0.00	%
Expected term (years)		6.0
Expected volatility		69.30	%

Net Loss Per Share (Tables)

12 Months Ended

Dec. 31, 2021

Net Loss Per Share

Schedule of antidilutive securities excluded from computation of diluted net loss per share


	Year Ended
	December 31,
	2021	2020
Convertible preferred stock	—	7,030,359
Unvested restricted common stock	110,575	283,969
Outstanding stock options	4,088,456	810,358
Warrants	2,631	2,631
Total common stock equivalents	4,201,662	8,127,317

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Taxes

Schedule of effective income tax rate differs from federal statutory rate


	Year Ended December 31,
	2021		2020
Tax effected at statutory rate	21.0	%	21.0	%
State taxes	6.7		6.9
Equity-based compensation	(0.5)		(0.4)
Non-deductible expenses	(0.3)		—
Federal research and development credits	1.7		1.7
Change in valuation allowance	(28.6)		(29.2)
Effective income tax rate	0.0	%	0.0	%

Schedule of deferred tax assets

Deferred tax assets consist of the following at December 31, 2021 and 2020 (in thousands):


	Year Ended December 31,
	2021		2020
Deferred tax assets:
Federal net operating loss carryforwards	$	31,387	$	16,376
State net operating loss carryforwards		8,910		4,400
Research and development credit carryforwards		3,873		2,101
Lease liability		2,980		3,134
Accruals and reserves		340		765
Intangible assets		2,061		1,912
Equity-based compensation		733		105
Total deferred tax assets:		50,284		28,793
Valuation allowance		(46,745)		(25,064)
Subtotal		3,539		3,729
Deferred tax liabilities:
Property and equipment		(1,883)		(1,944)
Right of use asset		(1,633)		(1,724)
Debt discount		(23)		(61)
Total deferred tax liabilities		(3,539)		(3,729)
Net deferred tax assets	$	—	$	—

Description of Business, Organization and Liquidity (Details) - USD ($) $ / shares in Units, $ in Thousands				1 Months Ended	12 Months Ended
	Nov. 01, 2021	Nov. 01, 2021	Oct. 26, 2021	Oct. 31, 2021	Dec. 31, 2021	Dec. 31, 2020
Sale of stock
Cash and cash equivalents					$ 198,053	$ 19,238
Substantial doubt about going concern within one year					false
Common Stock
Sale of stock
Number of shares issued and sold					8,119,106
Conversion of convertible preferred stock into common stock upon initial public offering (in shares)				18,398,248	18,398,248
IPO
Sale of stock
Gross proceeds received	$ 129,900
Net proceeds received	$ 116,400
IPO, Excluding Over-Allotment Option
Sale of stock
Number of shares issued and sold			7,353,000
Offering price (in dollar per share)			$ 16.00
Over-Allotment Option
Sale of stock
Number of shares issued and sold		766,106
Offering price (in dollar per share)	$ 16.00	$ 16.00

Summary of Significant Accounting Policies - Reverse Stock Split, Segment (Details)		12 Months Ended
	Oct. 15, 2021	Dec. 31, 2021 segment
Summary of Significant Accounting Policies
Reverse stock split	0.1053
Number of operating segments		1

Summary of Significant Accounting Policies - Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Summary of Significant Accounting Policies
Cash and cash equivalents	$ 198,053	$ 19,238
Restricted cash	1,553	1,551
Total cash, cash equivalents and restricted cash as shown on the consolidated statement of cash flows	$ 199,606	$ 20,789	$ 49,039

Summary of Significant Accounting Policies - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2021
Computers and software
Property and Equipment
Estimated Useful Life	3 years
Laboratory equipment
Property and Equipment
Estimated Useful Life	5 years
Furniture & fixtures
Property and Equipment
Estimated Useful Life	5 years

Summary of Significant Accounting Policies - Equity-Based Compensation and Net Loss Per Share (Details)	12 Months Ended
	Dec. 31, 2021
Summary of Significant Accounting Policies
Expected dividend yield (as a percent)	0.00%

Summary of Significant Accounting Policies - Income Taxes (Details) - USD ($) $ in Thousands	5 Months Ended	12 Months Ended
	May 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Sale of stock
Provision or benefit for income taxes	$ 0	$ 0	$ 0
Xilio Therapeutics LLC
Sale of stock
Ownership percentage		100.00%

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Fair Value Measurements - Financial assets liabilities at fair value on a recurring basis (Details) - Recurring basis - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Financial assets:
Total financial assets	$ 8,534
Financial liabilities:
Total financial liabilities		$ 825
Debt derivative liability
Financial liabilities:
Total financial liabilities		396
Other derivative liability
Financial liabilities:
Total financial liabilities		407
Warrant to purchase Series A convertible preferred stock
Financial liabilities:
Total financial liabilities		22
Cash equivalents-money market funds
Financial assets:
Total financial assets	8,534
Level 1
Financial assets:
Total financial assets	8,534
Level 1 \| Cash equivalents-money market funds
Financial assets:
Total financial assets	$ 8,534
Level 3
Financial liabilities:
Total financial liabilities		825
Level 3 \| Debt derivative liability
Financial liabilities:
Total financial liabilities		396
Level 3 \| Other derivative liability
Financial liabilities:
Total financial liabilities		407
Level 3 \| Warrant to purchase Series A convertible preferred stock
Financial liabilities:
Total financial liabilities		$ 22

Fair Value Measurements - Transfers between levels (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Fair Value Measurements
Transfer of Level 1 to level 2	$ 0	$ 0
Transfer of Level 2 to level 1	0	0
Transfer into level 3	0	0
Transfer out level 3	$ 0	$ 0

Fair Value Measurements - Warrant (Details) - $ / shares	Oct. 26, 2021	Jun. 30, 2020	May 16, 2016
Common Stock
Warrants
Warrant to purchase	2,631
Series A Convertible Preferred Stock
Warrants
Warrant to purchase		25,000
Preferred units at a price, per unit		$ 1.00
Series A Preferred Units
Warrants
Warrant to purchase			25,000
Preferred units at a price, per unit			$ 1.00

Fair Value Measurements - Change in fair market value of liability which classified as level 3 (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Changes in the fair market value of liabilities
Beginning balance	$ 825	$ 374
Recognition of other derivative liability		325
Change in fair value of liability	453	126
Settlement of liability	(1,250)
Conversion of warrant liability to equity upon initial public offering	(28)
Ending balance		825
Warrant to purchase Series A convertible preferred stock
Changes in the fair market value of liabilities
Beginning balance	22	17
Change in fair value of liability	6	5
Conversion of warrant liability to equity upon initial public offering	(28)
Ending balance		22
Debt derivative liability
Changes in the fair market value of liabilities
Beginning balance	396	357
Change in fair value of liability	354	39
Settlement of liability	(750)
Ending balance		396
Other derivative liability
Changes in the fair market value of liabilities
Beginning balance	407
Recognition of other derivative liability		325
Change in fair value of liability	93	82
Settlement of liability	$ (500)
Ending balance		$ 407

Property and Equipment, Net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Property and Equipment
Property and equipment	$ 10,332	$ 8,727
Less accumulated depreciation	(2,712)	(1,360)
Property and equipment, net	7,620	7,367
Depreciation	1,400	1,100
Laboratory equipment
Property and Equipment
Property and equipment	3,805	2,925
Computers and software
Property and Equipment
Property and equipment	228	228
Furniture & fixtures
Property and Equipment
Property and equipment	636	482
Leasehold improvements
Property and Equipment
Property and equipment	5,124	$ 5,092
Construction in process
Property and Equipment
Property and equipment	$ 539

Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Accrued Expenses
External research and development	$ 2,794	$ 11,060
Personnel related	5,145	2,013
Professional and consulting services	491	481
Other	321	178
Total accrued expenses	$ 8,751	$ 13,732

Loan and Security Agreement - Description (Details) - Loan Agreement and Amended Loan Agreement - USD ($) $ in Millions		1 Months Ended
	Sep. 17, 2021	Oct. 31, 2021	Nov. 30, 2019
Loan and security agreement
Borrowed amount	$ 10.0		$ 10.0
Additional borrowing capacity	$ 10.0
Fee payable upon occurrence of liquidation events, including initial public offering			$ 0.5
Fee paid upon closing of IPO		$ 0.8
Fee payable (as percent)	1.00%
Additional interest rate upon event of default (as a percent)	5.00%
Minimum
Loan and security agreement
Stated interest rate	4.75%		5.00%
Fee payable upon occurrence of liquidation events, including initial public offering	$ 0.8
Maximum
Loan and security agreement
Fee payable upon occurrence of liquidation events, including initial public offering	$ 1.0
Debt derivative liability
Loan and security agreement
Derivative liability			$ 0.4
Prime rate
Loan and security agreement
Basis spread (as percent)	0.25%		0.25%

Loan and Security Agreement - Maturities (Details) - Loan Agreement and Amended Loan Agreement - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Minimum aggregate future loan payments
2023		$ 6,667
2024		3,333
Total future principal payments		10,000
Less: unamortized discount		(372)
Total notes payable		9,628
Interest expense	$ 600	$ 600

- Definition

Amount, after unamortized (discount) premium and debt issuance costs, of long-term debt. Includes, but not limited to, notes payable, bonds payable, debentures, mortgage loans and commercial paper. Excludes capital lease obligations.

+ References + Details

Intellectual Property Licenses - License Agreements (Details) $ in Thousands	1 Months Ended	3 Months Ended	12 Months Ended
	Dec. 31, 2020 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Sep. 30, 2016 USD ($)	Aug. 31, 2016 USD ($) item shares
License Agreements
Research and development			$ 51,188	$ 43,910
License Agreement \| AskGene
License Agreements
Research and development				6,000
Upfront payments	$ 1,000	$ 5,000
License Agreement \| AskGene \| IL-15 products
License Agreements
Upfront payments payable	6,000			6,000
Exercise fee payable	4,000			4,000
License Agreement \| AskGene \| Maximum \| IL-15 products
License Agreements
Regulatory milestone payments payable	13,000			13,000
License Agreement \| AskGene \| Maximum \| IL-2 products
License Agreements
Aggregate amount of upfront and milestone payments payable by AskGene	17,000			17,000
License Agreement \| City of Hope
License Agreements
Research and development			10	10
Costs incurred related to payment of specified development milestones			300	0
Number of common units issued \| shares						24,019
Number of licensed products or services \| item						3
Amount payable on specified transactions						$ 500
Contingent payment, derivative liability	$ 500			500
License Agreement \| City of Hope \| Maximum
License Agreements
Development and regulatory milestones payable						$ 10,300
License Agreement \| WuXi Biologics
License Agreements
Costs incurred related to payment of specified development milestones			$ 800	$ 1,000
Development and regulatory milestones payable					$ 25,800

Commitments and Contingencies - Lease information (Details) $ in Millions	1 Months Ended	12 Months Ended
	Aug. 31, 2019 USD ($) ft²	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Leases
Notice period for cancellation of commitment agreement		90 days
Area leased (in square feet) \| ft²	27,830
Option to extend	true
Term of option to extend	5 years
Maximum amount of tenant improvements to be funded by landlord	$ 4.9
Reduction in future minimum lease payments	$ 4.9
Reimbursement received			$ 2.9	$ 2.0
Restricted cash
Leases
Letter of credit for the benefit of landlord		$ 1.6	$ 1.6

Commitments and Contingencies - Components of lease expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Commitments and Contingencies
Operating lease cost	$ 1,225	$ 1,225
Total lease costs	1,225	1,225
Finance lease cost
Amortization of right of use asset	85	35
Interest on lease liability	$ 16	$ 8

Commitments and Contingencies - Schedule of supplemental balance sheet information related to leases (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Operating Lease:
Operating lease right-of-use asset	$ 5,977	$ 6,309
Operating lease liability, current portion	801	564
Operating lease liability, net of current portion	10,107	10,908
Finance Lease:
Other non-current assets	$ 303	$ 388
Finance Lease, Right-of-Use Asset, Statement of Financial Position	Other non-current assets	Other non-current assets
Other current liabilities	$ 82	$ 82
Finance Lease, Liability, Current, Statement of Financial Position	Other current liabilities	Other current liabilities
Other liabilities, long-term	$ 118	$ 187
Finance Lease, Liability, Noncurrent, Statement of Financial Position	Other liabilities, long-term	Other liabilities, long-term
Weighted-average remaining lease term (in years):
Operating lease	8 years 2 months 1 day	9 years 2 months 1 day
Finance lease	2 years 8 months 12 days	3 years 8 months 12 days
Weighted-average discount rate:
Operating lease	8.00%	8.00%
Finance lease	6.90%	6.90%

Commitments and Contingencies - Schedule of supplemental cash flow information related to leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 1,392	$ 1,343
Financing cash flows from finance leases	$ 85	$ 99

Commitments and Contingencies - Future minimum lease payments under non-cancellable leases (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Operating leases
2022	$ 1,634
2023	1,683
2024	1,733
2025	1,785
2026	1,839
Thereafter	6,361
Total future minimum lease payments	15,035
Present value adjustment	(4,127)
Present value of lease liabilities	10,908
Finance lease
2022	85
2023	85
2024	49
Total future minimum lease payments	219
Present value adjustment	(19)
Present value of lease liabilities	$ 200
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Other Liabilities, Current, Other Liabilities, Noncurrent

Member Units - Capital Units (Details) $ in Thousands	1 Months Ended	12 Months Ended
Member Units - Capital Units (Details) $ in Thousands	Feb. 29, 2020 USD ($) shares	Dec. 31, 2020 USD ($) shares	Dec. 31, 2021 shares	Dec. 31, 2019 item
Member Units
Number of classes of units \| item				2
Common units outstanding		0	0
Proceeds from issuance of preferred units \| $		$ 9,969
Outstanding number of preferred units		0	0
Series B Preferred Units
Member Units
Issuance of preferred stock or units (in shares)	7,905,138	7,905,138
Proceeds from issuance of preferred units \| $	$ 10,000

Reorganization - Description (Details)	6 Months Ended	12 Months Ended
Reorganization - Description (Details)	Jun. 30, 2020 $ / shares shares	Dec. 31, 2021 shares	Dec. 31, 2020 shares	May 16, 2016 $ / shares shares
Reorganization
Number of common shares issued upon conversion for each common unit held	1
Restricted Stock
Reorganization
Restricted common stock issued as part of the Reorganization (in shares)	552,546	0
Common Units
Reorganization
Effect of reorganization, common units/shares (in shares)	409,303		(409,303)
Series A Preferred Units
Reorganization
Number of convertible preferred stock issued upon conversion for each preferred unit held	1
Effect of reorganization, preferred units/shares (in shares)			(7,500,000)
Outstanding warrant				25,000
Exercise price of warrants or rights \| $ / shares				$ 1.00
Conversion of warrant to purchase shares				25,000
Series A-1 Preferred Units
Reorganization
Number of convertible preferred stock issued upon conversion for each preferred unit held	1
Series B Preferred Units
Reorganization
Number of convertible preferred stock issued upon conversion for each preferred unit held	1
Series A Convertible Preferred Stock
Reorganization
Effect of reorganization, preferred units/shares (in shares)	7,500,000		7,500,000
Exercise price of warrants or rights \| $ / shares	$ 1.00
Conversion of warrant to purchase shares	25,000
Series A-1 Convertible Preferred Stock
Reorganization
Effect of reorganization, preferred units/shares (in shares)	19,565,216		19,565,216
Series B Convertible Preferred Stock
Reorganization
Effect of reorganization, preferred units/shares (in shares)	39,723,312		39,723,312

Preferred Stock and Common Stock - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands			1 Months Ended	12 Months Ended
	Feb. 23, 2021	Jan. 20, 2021	Oct. 31, 2021	Dec. 31, 2021	Oct. 26, 2021	Feb. 22, 2021	Dec. 31, 2020
Preferred stock and Common stock
Preferred stock, shares authorized				5,000,000	5,000,000		0
Preferred stock, par value (in dollars per share)				$ 0.0001	$ 0.0001		$ 0.0001
Common stock, shares authorized				200,000,000			126,000,000
Convertible preferred stock authorized				0			133,602,056
Proceeds from issuance of convertible preferred stock, net of issuance costs				$ 144,886
Common Stock
Preferred stock and Common stock
Conversion of convertible preferred stock into common stock upon initial public offering (in shares)			18,398,248	18,398,248
Convertible preferred stock
Preferred stock and Common stock
Convertible preferred stock authorized						174,808,481	133,602,056
Series A Convertible Preferred Stock
Preferred stock and Common stock
Convertible preferred stock authorized						7,525,000	7,525,000
Share price, Convertible preferred stock (in dollars per share)							$ 1.00
Series A-1 Convertible Preferred Stock
Preferred stock and Common stock
Convertible preferred stock authorized						19,565,216	19,565,216
Share price, Convertible preferred stock (in dollars per share)							$ 1.15
Series A-2 (A) Convertible Preferred Stock
Preferred stock and Common stock
Convertible preferred stock authorized							7,500,000
Share price, Convertible preferred stock (in dollars per share)							$ 1.00
Series A-2 (A-1) Convertible Preferred Stock
Preferred stock and Common stock
Convertible preferred stock authorized							19,565,216
Share price, Convertible preferred stock (in dollars per share)							$ 1.15
Series B Convertible Preferred Stock
Preferred stock and Common stock
Convertible preferred stock authorized						79,446,624	79,446,624
Convertible preferred stock, shares issued (in shares)		39,723,312		39,723,312
Share price, Convertible preferred stock (in dollars per share)		$ 1.265		$ 1.265
Proceeds from issuance of convertible preferred stock, net of issuance costs		$ 50,200
Series C Convertible Preferred Stock
Preferred stock and Common stock
Convertible preferred stock authorized						68,271,641
Convertible preferred stock, shares issued (in shares)	68,271,641			68,271,641
Share price, Convertible preferred stock (in dollars per share)	$ 1.3915
Proceeds from issuance of convertible preferred stock, net of issuance costs	$ 94,700

Preferred Stock and Common Stock - Components (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Feb. 22, 2021	Dec. 31, 2020
Convertible Preferred Stock
Preferred Shares/Units Authorized	0		133,602,056
Preferred Shares/Units Issued	0		66,788,528
Preferred Shares/Units Outstanding	0		66,788,528
Preferred Shares/Units Carrying Value			$ 78,002
Preferred Shares/Units Liquidation Preference	$ 0		$ 80,250
Convertible preferred stock
Convertible Preferred Stock
Preferred Shares/Units Authorized		174,808,481	133,602,056
Preferred Shares/Units Issued			66,788,528
Preferred Shares/Units Outstanding			66,788,528
Preferred Shares/Units Carrying Value			$ 78,002
Preferred Shares/Units Liquidation Preference			$ 80,250
Common Shares/Units Issuable Upon Conversion			7,030,359
Series A Convertible Preferred Stock
Convertible Preferred Stock
Preferred Shares/Units Authorized		7,525,000	7,525,000
Preferred Shares/Units Issued			7,500,000
Preferred Shares/Units Outstanding			7,500,000
Preferred Shares/Units Carrying Value			$ 7,309
Preferred Shares/Units Liquidation Preference			$ 7,500
Common Shares/Units Issuable Upon Conversion			789,473
Series A-1 Convertible Preferred Stock
Convertible Preferred Stock
Preferred Shares/Units Authorized		19,565,216	19,565,216
Preferred Shares/Units Issued			19,565,216
Preferred Shares/Units Outstanding			19,565,216
Preferred Shares/Units Carrying Value			$ 20,740
Preferred Shares/Units Liquidation Preference			$ 22,500
Common Shares/Units Issuable Upon Conversion			2,059,496
Series A-2 (A) Convertible Preferred Stock
Convertible Preferred Stock
Preferred Shares/Units Authorized			7,500,000
Series A-2 (A-1) Convertible Preferred Stock
Convertible Preferred Stock
Preferred Shares/Units Authorized			19,565,216
Series B Convertible Preferred Stock
Convertible Preferred Stock
Preferred Shares/Units Authorized		79,446,624	79,446,624
Preferred Shares/Units Issued			39,723,312
Preferred Shares/Units Outstanding			39,723,312
Preferred Shares/Units Carrying Value			$ 49,953
Preferred Shares/Units Liquidation Preference			$ 50,250
Common Shares/Units Issuable Upon Conversion			4,181,390
Series C Convertible Preferred Stock
Convertible Preferred Stock
Preferred Shares/Units Authorized		68,271,641

Preferred Stock and Common Stock - Liquidation, Conversion, Voting and Dividends (Details) $ / shares in Units, $ in Millions	2 Months Ended	12 Months Ended
	Dec. 31, 2021 USD ($) Vote $ / shares	Dec. 31, 2020 USD ($) $ / shares	Feb. 23, 2021 $ / shares	Jan. 20, 2021 $ / shares
Preferred stock and Common stock
Minimum gross proceeds as threshold for conversion of preferred stock (in dollars) \| $		$ 50.0
Common Stock
Preferred stock and Common stock
Number of votes for each share held \| Vote	1
Dividends declared \| $	$ 0.0
Convertible preferred stock
Preferred stock and Common stock
Distribution ratio		2.5
Series A Convertible Preferred Stock
Preferred stock and Common stock
Share price, Convertible preferred stock (in dollars per share)		$ 1.00
Conversion price, Convertible preferred stock (in dollars per share)		$ 9.50
Preferred stock conversion to different class ratio		1
Annual dividend rate, Convertible preferred stock (in dollars per share)		$ 0.060
Series A-1 Convertible Preferred Stock
Preferred stock and Common stock
Share price, Convertible preferred stock (in dollars per share)		1.15
Conversion price, Convertible preferred stock (in dollars per share)		$ 10.93
Preferred stock conversion to different class ratio		1
Annual dividend rate, Convertible preferred stock (in dollars per share)		$ 0.069
Series A-2 (A) Convertible Preferred Stock
Preferred stock and Common stock
Share price, Convertible preferred stock (in dollars per share)		1.00
Series A-2 (A-1) Convertible Preferred Stock
Preferred stock and Common stock
Share price, Convertible preferred stock (in dollars per share)		1.15
Series B Convertible Preferred Stock
Preferred stock and Common stock
Share price, Convertible preferred stock (in dollars per share)	$ 1.265			$ 1.265
Conversion price, Convertible preferred stock (in dollars per share)		$ 12.02
Preferred units (shares) conversion ratio		0.1053
Annual dividend rate, Convertible preferred stock (in dollars per share)		$ 0.0759
Series C Convertible Preferred Stock
Preferred stock and Common stock
Share price, Convertible preferred stock (in dollars per share)			$ 1.3915

Preferred Stock and Common Stock - Shares Reserved for Future Issuance (Details) - shares	Dec. 31, 2021	Dec. 31, 2020
Preferred Stock and Common Stock
Shares of common stock reserved for conversion of convertible preferred stock outstanding		7,030,359
Shares of common stock reserved for exercise of a warrant	2,631	2,631
Shares of common stock reserved for exercise of outstanding stock options under the 2021 and 2020 Stock Incentive Plans	4,088,456	810,358
Shares of common stock reserved for future awards under the 2021 and 2020 Stock Incentive Plans	2,349,875	151,769
Shares of common stock reserved for purchase under the 2021 Employee Stock Purchase Plan	292,031
Total shares reserved for future issuance	6,732,993	7,995,117

Equity-Based Compensation - Equity Incentive Plans (Details) - shares		1 Months Ended		12 Months Ended
	Jan. 01, 2022	Oct. 31, 2021	Jul. 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Equity-Based Compensation
Common stock reserved for issuance (in shares)				6,732,993	7,995,117
2021 Stock Incentive Plan
Equity-Based Compensation
Available for future issuance (in shares)				2,349,875
2021 Stock Incentive Plan \| Subsequent events
Equity-Based Compensation
Additional common stock issuable under the plan	1,373,447
2021 Stock Incentive Plan \| Minimum
Equity-Based Compensation
Common stock reserved for issuance (in shares)		2,654,828
2021 Stock Incentive Plan \| Maximum
Equity-Based Compensation
Additional common stock reserved for issuance (in shares)		3,967,038
Annual increase in number of shares reserved for issuance (as a percent)		5.00%
2020 Stock Incentive Plan
Equity-Based Compensation
Shares authorized			991,021	3,773,235
Award term (in years)			10 years
Additional common stock issuable under the plan				364,120
2020 Stock Incentive Plan \| Minimum
Equity-Based Compensation
Percentage of market value of a share			100.00%

Equity-Based Compensation - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan - shares	Jan. 01, 2022	Oct. 21, 2021
Equity-Based Compensation
Shares authorized		292,031
Maximum
Equity-Based Compensation
Annual increase in number of shares reserved and available for issuance (in shares)		584,062
Annual increase in number of shares reserved for issuance (as a percent)		1.00%
Subsequent events
Equity-Based Compensation
Additional common stock issuable under the plan	274,689

Equity-Based Compensation - Equity-based compensation expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Equity-Based Compensation
Total compensation expense	$ 4,958	$ 1,296
Research and development expense
Equity-Based Compensation
Total compensation expense	1,290	332
General and administrative expense
Equity-Based Compensation
Total compensation expense	$ 3,668	$ 964

Equity-Based Compensation - Stock option activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Options Outstanding
Outstanding at beginning of period (in shares)	810,358
Granted (in shares)	3,786,967
Exercised (in shares)	(47,900)
Cancelled/forfeited (in shares)	(460,969)
Outstanding at end of period (in shares)	4,088,456	810,358
Exercisable at end of period (in shares)	717,562
Vested and expected to vest at end of period (in shares)	4,088,456
Weighted Average Exercise Price
Outstanding (in dollars per share)	$ 8.59	$ 5.51
Granted (in dollars per share)	8.93
Exercised (in dollars per share)	5.90
Cancelled/forfeited (in dollars per share)	6.22
Exercisable at end of period (in dollars per share)	6.22
Vested and expected to vest at end of period (in dollars per share)	$ 8.59
Weighted Average Remaining Contractual Term (In years)
Outstanding (in years)	9 years 1 month 17 days	9 years 6 months 7 days
Exercisable at end of period (in years)	8 years 29 days
Vested and expected to vest at end of period (in years)	9 years 1 month 17 days
Aggregate Intrinsic Value
Outstanding (in dollars)	$ 30,291
Exercisable (in dollars)	7,019
Vested and expected to vest (in dollars)	30,291
Exercised (in dollars)	$ 500	$ 0

Equity-Based Compensation - Stock options, fair value assumptions (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) employee $ / shares shares	Dec. 31, 2020 USD ($) $ / shares
Equity-Based Compensation
Expected dividend yield (as a percent)	0.00%
Stock options granted during the period (in shares) \| shares	3,786,967
Equity-based compensation expense	$ 4,958	$ 1,296
Former employees providing consulting services
Equity-Based Compensation
Equity-based compensation expense	$ 200
Number of former employees \| employee	2
Additional period granted for exercise of vested options	90 days
Stock options
Equity-Based Compensation
Fair value of options granted (in dollars per share) \| $ / shares	$ 6.28	$ 3.60
Risk-free interest rate, minimum (as a percent)	0.63%	0.16%
Risk-free interest rate, maximum (as a percent)	1.39%	0.36%
Expected dividend yield (as a percent)	0.00%	0.00%
Expected volatility, minimum (as percentage)	80.55%	78.84%
Expected volatility, maximum (as percentage)	85.26%	96.73%
Stock options \| Minimum
Equity-Based Compensation
Expected term (in years)	5 years 6 months 7 days	2 years 3 months
Stock options \| Maximum
Equity-Based Compensation
Expected term (in years)	10 years	6 years 29 days
Stock options, excluding performance-based awards
Equity-Based Compensation
Total unrecognized compensation cost	$ 19,700
Weighted-average period for unrecognized compensation cost to be recognized	3 years 1 month 9 days
Stock options, vesting based on performance
Equity-Based Compensation
Equity-based compensation expense	$ 0

Equity-Based Compensation - Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2021	Dec. 31, 2020
Weighted Average Grant Date Fair Value
Equity-based compensation expense		$ 4,958	$ 1,296
Restricted Stock
Equity Based Compensation
Outstanding at beginning of period (in shares)		283,969
Vested (in shares)		(103,192)
Canceled/Forfeited (in shares)		(70,202)
Outstanding at end of period (in shares)		110,575	283,969
Weighted Average Grant Date Fair Value
Outstanding at beginning of period (in dollars per share)		$ 5.51
Vested (in dollars per share)		5.51
Cancelled/forfeited (in dollars per share)		5.51
Outstanding at end of period (in dollars per share)		$ 5.51	$ 5.51
Granted (in shares)	552,546	0
Equity-based compensation expense		$ 500	$ 300
Aggregate fair value of restricted stock awards that vested		1,000
Total unrecognized compensation cost of unvested restricted stock awards		$ 700
Weighted-average period for unrecognized compensation cost to be recognized		1 year 9 months 3 days

Equity-Based Compensation - Incentive Units (Details) - Incentive Units - shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
Equity-Based Compensation
Vesting period (in years)	4 years
Shares authorized			14,669,430	5,830,000	3,570,000
Granted (in shares)	0	512,095	585,777
Shares outstanding			571,712

Equity-Based Compensation - Incentive Units, Activity (Details) - Incentive Units - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Equity Based Compensation
Outstanding at beginning of period (in shares)		571,712
Granted (in shares)	0	512,095	585,777
Forfeited (in shares)		(2,949)
Exchanged for restricted common stock pursuant to the Reorganization (in shares)		(1,080,858)
Outstanding at end of period (in shares)			571,712
Weighted-average threshold price per unit
Outstanding at beginning of period (in dollars per share)		$ 0.95
Granted (in dollars per share)		1.43
Forfeited (in dollars per share)		0.86
Exchanged for restricted common stock pursuant to the Reorganization (in dollars per share)		1.14
Outstanding at end of period (in dollars per share)			$ 0.95
Weighted-average fair value per unit
Outstanding at beginning of period (in dollars per share)		1.05
Granted (in dollars per share)		3.61
Forfeited (in dollars per share)		0.57
Exchanged for restricted common stock pursuant to the Reorganization (in dollars per share)		$ 2.28
Outstanding at end of period (in dollars per share)			$ 1.05

Equity-Based Compensation - Vested incentive units (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2021	Dec. 31, 2020
Equity-Based Compensation
Equity-based compensation expense		$ 4,958	$ 1,296
Incentive Units
Equity-Based Compensation
Vested at beginning of period (in shares)	187,773		187,773
Vested immediately prior to the Reorganization (in shares)	118,099
Vested as of the Reorganization (in shares)	305,872
Equity-based compensation expense			$ 200

Equity-Based Compensation - Incentive Units, Fair value assumptions (Details) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Fair value assumptions
Expected dividend yield (as a percent)	0.00%
Incentive Units \| Weighted-average
Fair value assumptions
Grant date price per common unit		$ 4.47
Threshold price per incentive unit		$ 1.43
Risk-free interest rate (as a percent)		0.74%
Expected dividend yield (as a percent)		0.00%
Expected term (in years)		6 years
Expected volatility (as a percent)		69.30%

Equity-Based Compensation - Reorganization (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2020 USD ($)
Restricted Stock
Equity-Based Compensation
Incremental compensation expense	$ 0

Net Loss Per Share (Details) - shares	12 Months Ended
Net Loss Per Share (Details) - shares	Dec. 31, 2021	Dec. 31, 2020
Net Loss Per Share
Total common stock equivalents	4,201,662	8,127,317
Convertible preferred stock
Net Loss Per Share
Total common stock equivalents		7,030,359
Restricted Stock
Net Loss Per Share
Total common stock equivalents	110,575	283,969
Stock options
Net Loss Per Share
Total common stock equivalents	4,088,456	810,358
Warrants
Net Loss Per Share
Total common stock equivalents	2,631	2,631

Income Taxes - Provision (Details) - USD ($) $ in Thousands	5 Months Ended	12 Months Ended
Income Taxes - Provision (Details) - USD ($) $ in Thousands	May 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Income Taxes
Provision or benefit for income taxes	$ 0	$ 0	$ 0

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Income Taxes - Effective income tax rate reconciliation (Details)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Effective income tax rate reconciliation
Tax effected at statutory rate	21.00%	21.00%
State taxes	6.70%	6.90%
Equity-based compensation	(0.50%)	(0.40%)
Non-deductible expenses	(0.30%)
Federal research and development credits	1.70%	1.70%
Change in valuation allowance	(28.60%)	(29.20%)
Effective income tax rate	0.00%	0.00%

Income Taxes - Deferred tax assets (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Deferred tax assets:
Federal net operating loss carryforwards	$ 31,387	$ 16,376
State net operating loss carryforwards	8,910	4,400
Research and development credit carryforwards	3,873	2,101
Lease liability	2,980	3,134
Accruals and reserves	340	765
Intangible assets	2,061	1,912
Equity-based compensation	733	105
Total deferred tax assets:	50,284	28,793
Valuation allowance	(46,745)	(25,064)
Subtotal	3,539	3,729
Deferred tax liabilities:
Property and equipment	(1,883)	(1,944)
Right of use asset	(1,633)	(1,724)
Debt discount	(23)	(61)
Total deferred tax liabilities	(3,539)	(3,729)
Total net deferred tax assets

Income Taxes - Operating loss and tax credit Carryforwards (Details) - USD ($) $ in Thousands	5 Months Ended	12 Months Ended
	May 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Income Taxes
Provision or benefit for income taxes	$ 0	$ 0	$ 0
Increase in valuation allowance		21,700
Uncertain tax benefits		0	0
Estimated interest or penalties recognized		0	$ 0
Federal
Income Taxes
Operating loss carryforwards		149,500
Operating loss carryovers		144,600
Credit carryovers		2,800
State
Income Taxes
Operating loss carryforwards		141,000
Credit carryovers		$ 1,400