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Restatement of Previously Issued Financial Statements | 6 Months Ended
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Jun. 30, 2024
Accounting Changes and Error Corrections [Abstract] |
Restatement of Previously Issued Financial Statements | Restatement of Previously Issued Financial Statements In connection with the preparation of the Company’s financial statements for the year ended December 31, 2024, the Company determined that the Ultomiris Royalty Sale Agreement with OMERS entered into in November 2023 was incorrectly accounted for as deferred income and should have been accounted for as debt and that the Company understated the amount of its research and experimental expenses that should have been capitalized under Section 174 of the Code for the year ended December 31, 2023 as well as misstatement related to its state tax obligations, and therefore identified uncertain tax positions for federal and state income tax purposes. The impact of the restatement on the consolidated balance sheet as of June 30, 2024 is as follows (in thousands):
| June 30, 2024
| As Reported |  | Adjustment |  | As Restated
| (unaudited)
Assets |  |  |  |  |
Accounts receivable | 22,073 |  |  | 13,850 |  |  | 35,923 |
Prepaid expenses and other current assets | 23,986 |  |  | 602 |  |  | 24,588 |
Total current assets | 554,470 |  |  | 14,452 |  |  | 568,922 |
Total assets | $ | 826,167 |  |  | $ | 14,452 |  |  | $ | 840,619 |
Liabilities and stockholders’ equity |  |  |  |  |
Current liabilities |  |  |  |  |
Deferred income | 36,472 |  |  | (36,472) |  |  | — |
Debt | 6,947 |  |  | 31,983 |  |  | 38,930 |
Total current liabilities | 80,076 |  |  | (4,489) |  |  | 75,587 |
Uncertain tax position payable | — |  |  | 8,336 |  |  | 8,336 |
Deferred income, net of current portion | 104,081 |  |  | (104,081) |  |  | — |
Debt, net of current portion | 12,313 |  |  | 128,513 |  |  | 140,826 |
Total liabilities | 263,626 |  |  | 28,279 |  |  | 291,905 |
Stockholders’ equity |  |  |  |  |
Accumulated deficit | (598,368) |  |  | (13,827) |  |  | (612,195) |
Total stockholders’ equity | 562,541 |  |  | (13,827) |  |  | 548,714 |
Total liabilities and stockholders’ equity | $ | 826,167 |  |  | $ | 14,452 |  |  | $ | 840,619 |
The impact of the restatement on the consolidated statements of loss for the three months ended June 30, 2024 is as follows (in thousands):
| Three Months Ended June 30, 2024
| As Reported |  | Adjustment |  | As Restated
Revenue |  |  |  |  |
Collaborations, milestones, and royalties | $ | 16,960 |  |  | $ | 6,947 |  |  | $ | 23,907 |
Loss from operations | (62,317) |  |  | 6,947 |  |  | (55,370) |
Other income (expense) |  |  |  |  |
Interest expense | (844) |  |  | (8,438) |  |  | (9,282) |
Loss before income tax expense | (67,291) |  |  | (1,491) |  |  | (68,782) |
Income tax expense | 117 |  |  | (117) |  |  | — |
Net loss | (67,408) |  |  | (1,374) |  |  | (68,782) |
Net loss attributable to non-controlling interest | (1,445) |  |  | — |  |  | (1,445) |
Net loss attributable to Xencor, Inc. | $ | (65,963) |  |  | $ | (1,374) |  |  | $ | (67,337) |
Basic and diluted net loss per common share attributable to Xencor, Inc. | $ | (1.07) |  |  | $ | (0.02) |  |  | $ | (1.09) |
The impact of the restatement on the consolidated statement of loss for the six months ended June 30, 2024 is as follows (in thousands):
| Six Months Ended June 30, 2024
| As Reported |  | Adjustment |  | As Restated
Revenue |  |  |  |  |
Collaborations, milestones, and royalties | $ | 29,765 |  |  | $ | 10,139 |  |  | $ | 39,904 |
Loss from operations | (120,172) |  |  | 10,139 |  |  | (110,033) |
Other income (expense) |  |  |  |  |
Interest expense | (1,921) |  |  | (17,037) |  |  | (18,958) |
Total other income (expense), net | (15,828) |  |  | (17,037) |  |  | (32,865) |
Loss before income tax expense | (136,000) |  |  | (6,898) |  |  | (142,898) |
Income tax expense | 117 |  |  | (117) |  |  | — |
Net loss | (136,117) |  |  | (6,781) |  |  | (142,898) |
Net loss attributable to non-controlling interest | (2,121) |  |  | — |  |  | (2,121) |
Net loss attributable to Xencor, Inc. | $ | (133,996) |  |  | $ | (6,781) |  |  | $ | (140,777) |
Basic and diluted net loss per common share attributable to Xencor, Inc. | $ | (2.18) |  |  | $ | (0.11) |  |  | $ | (2.29) |
The impact of the restatement on the consolidated statements of comprehensive loss for the three months ended June 30, 2024 is as follows (in thousands):
| Three Months Ended June 30, 2024
| As Reported |  | Adjustment |  | As Restated
Net loss | (67,408) |  |  | (1,374) |  |  | (68,782) |
Other comprehensive loss |  |  |  |  |
Net unrealized loss on marketable debt securities | (498) |  |  | — |  |  | (498) |
Comprehensive loss | (67,906) |  |  | (1,374) |  |  | (69,280) |
Comprehensive loss attributable to non-controlling interest | (1,445) |  |  | — |  |  | (1,445) |
Comprehensive loss attributable to Xencor, Inc. | $ | (66,461) |  |  | $ | (1,374) |  |  | $ | (67,835) |
The impact of the restatement on the consolidated statement of comprehensive loss for the six months ended June 30, 2024 is as follows (in thousands):
| Six Months Ended June 30, 2024
| As Reported |  | Adjustment |  | As Restated
Net loss | (136,117) |  |  | (6,781) |  |  | (142,898) |
Other comprehensive loss |  |  |  |  |
Net unrealized loss on marketable debt securities | (1,942) |  |  | — |  |  | (1,942) |
Comprehensive loss | (138,059) |  |  | (6,781) |  |  | (144,840) |
Comprehensive loss attributable to non-controlling interest | (2,121) |  |  | — |  |  | (2,121) |
Comprehensive loss attributable to Xencor, Inc. | $ | (135,938) |  |  | $ | (6,781) |  |  | $ | (142,719) |
The impact of the restatement on the consolidated statements of cash flows for the six months ended June 30, 2024 is as follows (in thousands):
| Six Months Ended June 30, 2024
| As Reported |  | Adjustment |  | As Restated
Cash flows from operating activities |  |  |  |  |
Net loss | $ | (136,117) |  |  | $ | (6,781) |  |  | $ | (142,898) |
Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |  |
Non-cash royalty revenue related to sale of future royalties | — |  |  | (30,855) |  |  | (30,855) |
Non-cash interest expense | 1,900 |  |  | 17,037 |  |  | 18,937 |
Changes in operating assets and liabilities: |  |  |  |  |
Accounts receivable | (10,783) |  |  | 790 |  |  | (9,993) |
Income taxes | (5,782) |  |  | (117) |  |  | (5,899) |
Deferred income | (16,312) |  |  | 16,312 |  |  | — |
Net cash used in operating activities | (120,595) |  |  | (3,614) |  |  | (124,209) |
Cash flows from financing activities |  |  |  |  |
Reduction of liability for sale of future royalties | (3,614) |  |  | 3,614 |  |  | — |
Net cash (used in) provided by financing activities | (757) |  |  | 3,614 |  |  | 2,857 |

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- Definition The entire disclosure for reporting error correction. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 250 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 7 -Publisher FASB -URI https://asc.fasb.org/1943274/2147483443/250-10-50-7 + Details
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