xfor-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________________________________________________

FORM 10-Q

_____________________________________________________________________________________

(Mark One)


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

For the quarterly period ended March 31, 2024


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

For the transition period from __________ to __________

Commission File Number: 001-38295

_____________________________________________________________________________________

X4 PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

_____________________________________________________________________________________


Delaware (State or other jurisdiction of incorporation or organization)			27-3181608 (I.R.S. Employer Identification No.)

61 North Beacon Street, 4th Floor Boston, Massachusetts (Address of principal executive offices)			02134 (Zip Code)

(857) 529-8300

(Registrant’s telephone number, including area code)

____________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

XFOR

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 3, 2024, the registrant had 167,937,781 shares of common stock, $0.001 par value per share, outstanding.




	PART I: FINANCIAL INFORMATION
Item 1.	FINANCIAL STATEMENTS	7
	Condensed Consolidated Balance Sheets (unaudited) as of March 31, 2024 and December 31, 2023	7
	Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) for the Three Months Ended March 31, 2024 and 2023	8
	Condensed Consolidated Statements Stockholders’ Equity (unaudited) for the Three Months Ended March 3 1 , 202 4 and 202 3	9
	Condensed Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended M a r ch 3 1 , 202 4 and 202 3	10
	Notes to Condensed Consolidated Financial Statements (unaudited)	11
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	24
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	29
Item 4.	CONTROLS AND PROCEDURES	29
	PART II: OTHER INFORMATION
Item 1.	LEGAL PROCEEDINGS	30
Item 1A.	RISK FACTORS	30
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	63
Item 3.	DEFAULTS UPON SENIOR SECURITIES	63
Item 4.	MINE SAFETY DISCLOSURES	63
Item 5.	OTHER INFORMATION	63
Item 6.	EXHIBITS	64
SIGNATURES		65

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended, or the (“Exchange Act”), that relate to future events or to our future operations or financial performance. All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. These statements may be identified by such forward-looking terminology as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections about our company, are not guarantees of future results or performance and involve substantial risks and uncertainty. We may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in these forward-looking statements. These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, including risks described in the section titled “Risk Factors” and elsewhere in this report, regarding, among other things:

•the initiation, timing, progress and results of our current and future preclinical studies and clinical trials and related preparatory work and the period during which the results of the trials will become available, as well as our research and development programs;

•the potential benefits, including clinical utility, that may be derived from any of our products or product candidates;

•the timing of and our ability to obtain and maintain regulatory approval of our existing product or product candidates or any product candidates that we may develop in the future, and any related restrictions, limitations, or warnings in the label of any approved product candidates;

•our plans to research, develop, manufacture and commercialize our product or product candidates;

•the timing of our regulatory filings for our product candidates, along with regulatory developments in the United States and other foreign countries;

•the size and growth potential of the markets for our products and product candidates, if approved, and the rate and degree of market acceptance of our products and product candidates, including reimbursement that may be received from payors;

•the benefits of U.S. Food and Drug Administration (“FDA”) and European Commission designations, including, without limitation, Fast Track, Orphan Drug and Breakthrough Therapy;

•our commercialization, marketing and manufacturing capabilities and strategy;

•our ability to attract and retain qualified employees and key personnel;

•our competitive position and the development of and projections relating to our competitors or our industry;

•our expectations regarding our ability to obtain and maintain intellectual property protection;

•the success of competing therapies that are or may become available;

•our estimates and expectations regarding future operations, financial position, revenues, costs, expenses, uses of cash, capital requirements or our need for additional financing;

•our ability to continue as a going concern;

•our plans to in-license, acquire, develop and commercialize additional product candidates;

•the impact of laws and regulations;

•our plans to identify additional product candidates with significant commercial potential that are consistent with our commercial objectives;

•our ability to raise additional capital;

•our strategies, prospects, plans, expectations or objectives; and

•other risks and uncertainties, including those listed under the section titled “Risk Factors” in this Quarterly Report.

You should refer to the section titled “Risk Factors” in this Quarterly Report for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report.

SUMMARY OF SELECTED RISKS ASSOCIATED WITH OUR BUSINESS

Our business faces significant risks and uncertainties. If any of the following risks are realized, our business, financial condition and results of operations could be materially and adversely affected. You should carefully review and consider the full discussion of our risk factors in the section titled “Risk Factors” in Part I, Item 1A of this Quarterly Report. Some of the more significant risks include the following:

•We have incurred significant losses and have not generated revenue from product sales since our inception. We expect to continue to incur losses for the foreseeable future, and we may never achieve or maintain profitability.

•Our liquidity position raises substantial doubt about our ability to continue as a going concern and we will require substantial additional funding. If we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate any product development programs or commercialization efforts.

•Raising additional capital may cause dilution to our investors, restrict our operations or require us to relinquish rights to our technologies or product candidates. Future debt obligations may expose us to risks that could adversely affect our business, operating results and financial condition and may result in further dilution to our stockholders.

•We depend almost entirely on the success of our commercial product, XOLREMDITM, which has been approved for use as an oral, once-daily therapy to increase the number of circulating mature neutrophils and lymphocytes in patients 12 years of age and older with WHIM (warts, hypogammaglobulinemia, infections, and myelokathexis) syndrome in the U.S., and on our lead product candidate, mavorixafor, which we are developing for the potential treatment of other chronic neutropenic disorders. We cannot be certain that we will be able to obtain regulatory approval for, or successfully commercialize, mavorixafor for other chronic neutropenic disorders or any other product candidate.

•The regulatory review and approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, including additional indications for mavorixafor, our business will be substantially harmed.

•We depend on license agreements with Genzyme, Beth Israel Deaconess Medical Center, Georgetown University and Dana-Farber Cancer Institute to permit us to use patents and patent applications. Termination of these rights or the failure to comply with obligations under these agreements could materially harm our business and prevent us from developing or commercializing our product candidates.

•The results of clinical trials may not support our product candidate claims.

•We may fail to enroll a sufficient number of patients in our clinical trials in a timely manner, which could delay or prevent clinical trials of our product candidates.

•If the commercial opportunity for mavorixafor in WHIM syndrome and other chronic neutropenic disorders is smaller than we anticipate, our potential future revenue from mavorixafor may be adversely affected and our business may suffer.

•Interim top-line and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

•Our product candidates that have received regulatory approval may still face future development and regulatory difficulties and any approved products will be subject to extensive post-approval regulatory requirements. Additionally, any product candidate for which we obtain marketing approval could be subject to marketing restrictions or withdrawal from the market and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products.

•The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses. If we are found or alleged to have improperly promoted off-label uses, we may become subject to significant liability.

•A Breakthrough Therapy designation or Fast Track designation by the FDA for our product candidates may not lead to a faster development or regulatory review or approval process, and neither of these designations increases the likelihood that our product candidates that have been granted these designations will receive marketing approval.

•If we are unable to establish sales and marketing capabilities or to selectively enter into agreements with third parties to sell and market our product or product candidates, we may not be successful in commercializing our product candidates that have been approved.

•We may never obtain approval for our product candidates outside of the United States, which would limit our market opportunities and could harm our business.

•Our commercial products may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, which would harm our business.

•We have no experience manufacturing our product candidates on a large clinical or commercial scale and have no manufacturing facility. We are currently dependent on a single third party manufacturer for the manufacture of mavorixafor, the active pharmaceutical ingredient (“API”) and a single manufacturer of mavorixafor finished drug product capsules. If we experience problems with these third parties, the manufacturing of mavorixafor could be delayed, which could harm our results of operations.

•We rely on third-party CROs to conduct our preclinical studies and clinical trials. If these CROs do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our product candidates and our business could be substantially harmed.

•Disruptions in our supply chain could delay the commercial launch of our product or product candidates, if approved.

•Our employees, principal investigators, CROs and consultants may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have a material adverse effect on our business.

•We may depend on collaborations for the development and commercialization of our product candidates. If those collaborations are not successful, we may not be able to capitalize on the market potential of our product candidates.

•If we are unable to protect our intellectual property rights, our competitive position could be harmed.

•Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.

•Our future success depends on our ability to retain executives and to attract, retain and motivate key personnel in a competitive environment for skilled biotechnology personnel.

•We will need to grow the size of our organization, and we may experience difficulties in managing this growth.

•Our term loan contains restrictions that limit our flexibility in operating our business.

•Our business could be adversely affected by economic downturns, inflation, increases in interest rates, natural disasters, public health crises, political crises, geopolitical events, such as the wars in Ukraine and Gaza, or other macroeconomic conditions, which have in the past and may in the future negatively impact our business and financial performance.

•Our stock price has been and is likely to continue to be volatile and fluctuate substantially.

PART I FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS.

X4 PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)


	March 31, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	60,493	$	99,216
Marketable securities	20,376		15,000
Research and development incentive receivable	702		562
Prepaid expenses and other current assets	5,762		7,298
Total current assets	87,333		122,076
Property and equipment, net	742		745
Goodwill	17,351		17,351
Right-of-use assets	5,264		5,650
Other assets	1,492		1,436
Total assets	$	112,182	$	147,258
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	8,935	$	8,947
Accrued expenses	13,473		12,816
Current portion of lease liability	1,133		1,099

Total current liabilities	23,541		22,862
Long-term debt, including accretion, net of discount	54,824		54,570
Lease liabilities	2,318		2,612
Warrant liability (Note 4)	29,438		15,683
Other liabilities	1,025		432
Total liabilities	111,146		96,159
Commitments and contingencies (Note 9)
Stockholders’ equity:
Common stock, $0.001 par value, 500,000,000 shares authorized as of March 31, 2024 and December 31, 2023, respectively; 167,937,781 and 167,434,595 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively	168		167
Additional paid-in capital	530,694		528,956
Accumulated other comprehensive loss	(155)		(119)
Accumulated deficit	(529,671)		(477,905)
Total stockholders’ equity	1,036		51,099
Total liabilities and stockholders’ equity	$	112,182	$	147,258

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

X4 PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended March 31,
	2024		2023

Operating expenses:
Research and development	$	19,854	$	22,063
Selling, general and administrative	17,435		7,241
Total operating expenses	37,289		29,304
Loss from operations	(37,289)		(29,304)
Other (expense) income, net:
Interest income	1,066		835
Interest expense	(1,874)		(1,109)
Change in fair value of warrant liability	(13,755)		5,439
Other income, net	105		123
Total other (expense) income, net	(14,458)		5,288
Loss before provision for income taxes	(51,747)		(24,016)
Provision for income taxes	19		4
Net loss	$	(51,766)	$	(24,020)
Net loss per share: basic and diluted	$	(0.26)	$	(0.16)

Weighted average shares of common stock outstanding: basic and diluted	199,991,597		145,967,476

Other comprehensive loss, net of tax:
Net loss	$	(51,766)	$	(24,020)
Change in unrealized loss related to available-for-sale debt securities	(36)		—
Comprehensive loss	$	(51,802)	$	(24,020)

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

X4 PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share amounts)

(Unaudited)


	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2023	167,434,595	$	167	$	528,956	$	(119)	$	(477,905)	$	51,099

Vesting of restricted stock units	503,186	1		(1)						—
Stock-based compensation expense				1,739						1,739
Unrealized loss on marketable securities						(36)				(36)
Net loss								(51,766)		(51,766)
Balance at March 31, 2024	167,937,781	$	168	$	530,694	$	(155)	$	(529,671)	$	1,036


	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2022	121,667,250	$	122	$	450,786	$	(119)	$	(376,738)	$	74,051


Vesting of restricted stock units	540,238			—						—

Stock-based compensation				1,645						1,645
Net loss								(24,020)		(24,020)
Balance at March 31, 2023	122,207,488	$	122	$	452,431	$	(119)	$	(400,758)	$	51,676

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

X4 PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2024		2023
Cash flows from operating activities:
Net loss	$	(51,766)	$	(24,020)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	1,739		1,645
Depreciation and amortization expense	62		127
Non-cash lease expense	386		385
Accretion of debt discount	254		225
Change in fair value of warrant liability	13,755		(5,439)
Other	(117)		(51)
Changes in operating assets and liabilities:
Prepaid expenses, other current assets and research and development incentive receivable	1,062		2,084
Accounts payable	4		(1,714)
Accrued expenses and other long-term liabilities	1,264		496
Lease liabilities	(240)		(250)
Net cash used in operating activities	(33,597)		(26,512)
Cash flows from investing activities:
Purchase of marketable securities	(10,263)		—
Sales and maturities of marketable securities	5,000		—
Acquisition of property and equipment	(59)		(9)
Net cash used in investing activities	(5,322)		(9)
Cash flows from financing activities:


Fees paid to amendment loan and security agreement and issuance costs related to the sale of warrants	—		(381)
Repayments of borrowings and accrued end-of-term fees under loan and security agreement	—		(1,300)

Proceeds from sale of common stock, warrants and pre-funded warrants, net of issuance costs	—		(443)
Net cash used in financing activities	—		(2,124)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(59)		50
Net decrease in cash, cash equivalents and restricted cash	(38,978)		(28,595)
Cash, cash equivalents and restricted cash at beginning of period	100,248		123,028
Cash, cash equivalents and restricted cash at end of period	$	61,270	$	94,433

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

X4 PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. NATURE OF THE BUSINESS AND BASIS OF PRESENTATION

X4 Pharmaceuticals, Inc. (together with its subsidiaries, the “Company”) is a biopharmaceutical company discovering, developing, and commercializing novel therapeutics for the treatment of rare diseases and those with limited treatment options, with a focus on conditions resulting from dysfunction of the immune system. On April 29, 2024, the Company announced that the FDA approved the Company’s New Drug Application (“NDA”) for mavorixafor, which is being marketed under the trade name XOLREMDITM, for use as an oral, once-daily therapy in patients 12 years of age and older with WHIM syndrome (warts, hypogammaglobulinemia, infections, and myelokathexis), to increase the number of circulating mature neutrophils and lymphocytes. WHIM syndrome is a rare combined primary immunodeficiency and chronic neutropenic disorder. The Company is currently engaged in its U.S. launch of XOLREMDI in WHIM syndrome while also planning to seek regulatory approvals to commercialize mavorixafor outside of the U.S. The U.S. approval of XOLREMDI in the WHIM syndrome indication is the first for mavorixafor, which is an orally bioavailable selective antagonist of chemokine receptor CXCR4, a key regulator of the movement of immune cells throughout the body. Due to its ability to increase the mobilization of white blood cells from the bone marrow into the bloodstream, the Company believes that mavorixafor has the potential to provide therapeutic benefit across a variety of immune system disorders in addition to WHIM syndrome. As a result, the Company is conducting a Phase 2 clinical trial evaluating the safety and efficacy of mavorixafor as a monotherapy and in combination with human granulocyte colony-stimulating factor (“G-CSF”) in people with certain chronic neutropenic disorders. Interim data from this Phase 2 trial are expected to be presented in June 2024.The Company also plans to initiate a global Phase 3 clinical trial of mavorixafor in the second quarter of 2024 that aims to evaluate the efficacy, safety, and tolerability of oral once-daily mavorixafor with or without G-CSF in people with congenital or acquired primary autoimmune and idiopathic chronic neutropenia who are experiencing recurrent and/or serious infections. The Company is headquartered in Boston, Massachusetts and has a research facility in Vienna, Austria.

Going Concern Assessment—The Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. Although the Company has an approved drug product, sales of the Company’s drug product over the next 12 months will not be sufficient to fund the Company’s operating expenses. Since inception, the Company has incurred significant operating losses and negative cash flows from operations. As of March 31, 2024, the Company had $80.9 million of cash, cash equivalents and short-term marketable securities, and an accumulated deficit of $529.7 million. Net cash used in operating activities was $33.6 million for the three months ended March 31, 2024. The Company has a covenant under its Second Amended and Restated Loan and Security Agreement (the “Hercules Loan Agreement”) with Hercules Capital Inc. (“Hercules”), that requires that the Company currently maintain a minimum level of cash of $20 million, subject to adjustments beginning January 31, 2025 to 20% of outstanding borrowings. Based on its current cash flow projections, which excludes any new capital raising activities and the potential sale of the Priority Review Voucher that was granted by the FDA concurrent with the approval of XOLREMDI as discussed below, the Company believes it would not maintain the minimum cash required to satisfy this covenant beginning in the first quarter of 2025. In such event, the lender could require the repayment of all outstanding debt. Accordingly, management has concluded that the Company’s accumulated deficit, history of losses, future expected losses and negative cash flows met the ASC 205-40 standard for raising substantial doubt about the Company’s ability to continue as a going concern. The Company does not have adequate financial resources to fund its forecasted operating costs for at least one year after the date that these consolidated financial statements are issued. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. Accordingly, the consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

Concurrent with its approval of XOLREMDI and pursuant to its Rare Pediatric Disease designation, the FDA granted the Company a Priority Review Voucher (“PRV”) that may be used to obtain Priority Review for a subsequent application or sold to another drug sponsor. The Company’s cash flow projections exclude any potential sale of any PRV to a third party and include a $7.0 million milestone payment triggered by the achievement of such approval as discussed in Note 3. To finance its operations in 2025 and beyond, the Company will need to raise additional capital, which cannot be assured. Unless and until the Company reaches profitability in the future, it will require additional capital to fund its operations, which could be raised through a combination of equity offerings, debt financings, other third-party funding, marketing and distribution arrangements and other collaborations and strategic alliances. If the Company is unable to obtain funding, it could be forced to delay, reduce

X4 PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

or eliminate some or all of its research and development programs, product portfolio expansion or commercialization efforts, which would adversely affect its business prospects, or it may be unable to continue operations.

The Company is subject to risks common to companies in the biopharmaceutical industry including, but not limited to, uncertainties relating to conducting preclinical and clinical research and development, the manufacture and supply of products and product candidates for clinical and commercial use, obtaining and maintaining regulatory approvals and pricing and reimbursement for the Company’s products and product candidates, market acceptance, managing global growth and operating expenses, availability of additional capital, competition, obtaining and enforcing patents, stock price volatility, dependence on collaborative relationships and third-party service providers, dependence on key personnel, and from time to time government investigations, litigation, and potential product liability claims.

Principles of Consolidation— The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, including X4 Pharmaceuticals (Austria) GmbH (“X4 Austria”), which is incorporated in Vienna, Austria, and X4 Therapeutics, Inc. All intercompany accounts and transactions have been eliminated.

Unaudited Interim Condensed Consolidated Financial Statements— The condensed consolidated balance sheet at December 31, 2023 that is presented in these interim condensed consolidated financial statements was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The accompanying condensed consolidated financial statements are unaudited. The accompanying unaudited interim condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto for the year ended December 31, 2023 included in the 2023 Annual Report filed with the SEC on March 21, 2024. In the opinion of management, all adjustments, consisting only of normal recurring adjustments as necessary, for the fair statement of the Company’s condensed financial position, condensed results of its operations and comprehensive loss and cash flows have been made. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2024.

Use of Estimates— The preparation of the Company’s consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of expenses during the reporting period. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual of research and development expenses, and the impairment or lack of impairment of long-lived assets including operating lease right-of-use assets and goodwill. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. As of the date of issuance of these consolidated financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities. Actual results could differ from those estimates, and any such differences may be material to the Company’s consolidated financial statements.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Significant Accounting Policies—The Company’s significant accounting policies are disclosed in the audited consolidated financial statements and the notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 21, 2024. Since the date of those consolidated financial statements, there have been no material changes to the Company’s significant accounting policies.

X4 PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Restricted Cash


(in thousands)	As of March 31, 2024		As of December 31, 2023

Letter of credit security: Waltham lease	$	—	$	250
Letter of credit security: Vienna Austria lease	206

SEC Form 10-Q filed by X4 Pharmaceuticals Inc.