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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

 

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

For the quarterly period ended June 30, 2021

OR

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: 001-38624

 

Vaccinex, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

16-1603202

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

1895 Mount Hope Avenue

Rochester, New York

14620

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (585) 271-2700

 

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value

VCNX

Nasdaq Capital Market

 

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 August 12, 2021, the registrant had 30,801,110 shares of common stock, $0.0001 par value per share, outstanding.

 

 

 


 

 

 

VACCINEX, INC.

FORM 10-Q

TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

 

 

PART I – FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

 

 

Item 1.

Financial Statements

 

3

 

 

 

 

 

Condensed Consolidated Balance Sheets (Unaudited)

 

3

 

 

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

 

4

 

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited)

 

5

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows (Unaudited)

 

6

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

7

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

21

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

29

 

 

 

 

Item 4.

Controls and Procedures

 

29

 

 

 

 

 

 

 

 

 

PART II – OTHER INFORMATION

 

 

 

 

 

 

 

 

 

 

Item 1A.

Risk Factors

 

30

 

 

 

 

 

 

 

 

Item 6.

Exhibits

 

32

 

 

 

 

 

Signatures

 

33

 

 

2


 

 

 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

VACCINEX, INC.

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except share and per share data)

 

 

 

As of

June 30, 2021

 

 

As of

December 31, 2020

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

22,385

 

 

$

10,596

 

Accounts receivable

 

 

-

 

 

 

157

 

Prepaid expenses and other current assets

 

 

1,057

 

 

 

533

 

Total current assets

 

 

23,442

 

 

 

11,286

 

Property and equipment, net

 

 

347

 

 

 

416

 

TOTAL ASSETS

 

$

23,789

 

 

$

11,702

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

1,721

 

 

$

3,169

 

Accrued expenses

 

 

1,505

 

 

 

1,937

 

Senior secured convertible debt, net

 

 

2,489

 

 

 

8,074

 

Total current liabilities

 

 

5,715

 

 

 

13,180

 

Long-term debt

 

 

1,134

 

 

 

1,134

 

TOTAL LIABILITIES

 

 

6,849

 

 

 

14,314

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

 

 

Stockholders’ equity (deficit):

 

 

 

 

 

 

 

 

Common stock, par value of $0.0001 per share; 100,000,000 shares authorized

   as of June 30, 2021, and December 31, 2020; 30,801,962 and 22,388,027

   shares issued as of June 30, 2021 and December 31, 2020, respectively;

   30,801,110 and 22,387,175 shares outstanding as of June 30, 2021

   and December 31, 2020, respectively

 

 

3

 

 

 

3

 

Additional paid-in capital

 

 

306,972

 

 

 

250,914

 

Treasury stock, at cost; 852 shares of common stock as of June 30, 2021 and

   December 31, 2020, respectively

 

 

(11

)

 

 

(11

)

Accumulated deficit

 

 

(290,024

)

 

 

(277,481

)

Total Vaccinex, Inc. stockholders’ equity (deficit)

 

 

16,940

 

 

 

(26,575

)

Noncontrolling interests

 

 

-

 

 

 

23,963

 

TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

16,940

 

 

 

(2,612

)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

23,789

 

 

$

11,702

 

 

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

3


 

 

VACCINEX, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

(in thousands, except share and per share data)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue

 

$

-

 

 

$

-

 

 

$

850

 

 

$

-

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

4,064

 

 

 

4,557

 

 

 

9,577

 

 

 

9,966

 

General and administrative

 

 

1,605

 

 

 

1,943

 

 

 

3,182

 

 

 

3,693

 

Total costs and expenses

 

 

5,669

 

 

 

6,500

 

 

 

12,759

 

 

 

13,659

 

Loss from operations

 

 

(5,669

)

 

 

(6,500

)

 

 

(11,909

)

 

 

(13,659

)

Interest expense

 

 

(351

)

 

 

-

 

 

 

(683

)

 

 

-

 

Other income (expense), net

 

 

51

 

 

 

(1

)

 

 

49

 

 

 

9

 

Loss before provision for income taxes

 

 

(5,969

)

 

 

(6,501

)

 

 

(12,543

)

 

 

(13,650

)

Provision for income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Net loss

 

 

(5,969

)

 

 

(6,501

)

 

 

(12,543

)

 

 

(13,650

)

Net loss attributable to noncontrolling interests

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Net loss attributable to Vaccinex, Inc. common stockholders

 

$

(5,969

)

 

$

(6,501

)

 

$

(12,543

)

 

$

(13,650

)

Comprehensive loss

 

$

(5,969

)

 

$

(6,501

)

 

$

(12,543

)

 

$

(13,650

)

Net loss per share attributable to Vaccinex, Inc. common stockholders, basic and diluted

 

$

(0.21

)

 

$

(0.39

)

 

$

(0.47

)

 

$

(0.84

)

Weighted-average shares used in computing net loss per share attributable to

   Vaccinex, Inc. common stockholders, basic and diluted

 

 

28,577,779

 

 

 

16,689,399

 

 

 

26,897,283

 

 

 

16,345,211

 

 

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

 

4


 

 

VACCINEX, INC.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited)

(in thousands, except share data)

 

 

 

Common Stock

 

 

 

 

 

 

Treasury Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional

Paid-in

Capital

 

 

Common

Stock

Shares

 

 

Amount

 

 

Accumulated

Deficit

 

 

Total

Vaccinex, Inc.

Stockholders’

Deficit

 

 

Noncontrolling

Interests

 

 

Total

Stockholders’

Deficit

 

Balance as of January 1, 2020

 

 

14,887,999

 

 

$

1

 

 

$

222,403

 

 

 

852

 

 

$

(11

)

 

$

(248,630

)

 

$

(26,237

)

 

$

23,963

 

 

$

(2,274

)

Issuance of Common Shares

 

 

1,468,563

 

 

 

1

 

 

 

7,475

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

7,476

 

 

 

-

 

 

 

7,476

 

Stock-based compensation

 

 

20,000

 

 

 

-

 

 

 

204

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

204

 

 

 

-

 

 

 

204

 

Exercise of stock options

 

 

1,025

 

 

 

-

 

 

 

4

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4

 

 

 

-

 

 

 

4

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(7,149

)

 

 

(7,149

)

 

 

-

 

 

 

(7,149

)

Balance as of March 31, 2020

 

 

16,377,587

 

 

 

2

 

 

 

230,086

 

 

 

852

 

 

 

(11

)

 

 

(255,779

)

 

 

(25,702

)

 

 

23,963

 

 

 

(1,739

)

Issuance of common shares

 

 

642,112

 

 

 

-

 

 

 

2,296

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,296

 

 

 

-

 

 

 

2,296

 

Exchange of partnership units for common shares (Note 10)

 

 

4,125

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

366

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

366

 

 

 

-

 

 

 

366

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(6,501

)

 

 

(6,501

)

 

 

-

 

 

 

(6,501

)

Balance as of June 30, 2020

 

 

17,023,824

 

 

$

2

 

 

$

232,748

 

 

 

852

 

 

$

(11

)

 

$

(262,280

)

 

$

(29,541

)

 

$

23,963

 

 

$

(5,578

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

Treasury Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional

Paid-in

Capital

 

 

Common

Stock

Shares

 

 

Amount

 

 

Accumulated

Deficit

 

 

Total

Vaccinex, Inc.

Stockholders’

Equity (Deficit)

 

 

Noncontrolling

Interests

 

 

Total

Stockholders’

Equity

(Deficit)

 

Balance as of January 1, 2021

 

 

22,388,027

 

 

$

3

 

 

$

250,914

 

 

 

852

 

 

$

(11

)

 

$

(277,481

)

 

$

(26,575

)

 

$

23,963

 

 

$

(2,612

)

Issuance of Common Shares

 

 

5,937,900

 

 

 

-

 

 

 

32,848

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

32,848

 

 

 

-

 

 

 

32,848

 

Common shares issuance costs

 

 

-

 

 

 

-

 

 

 

(985

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(985

)

 

 

-

 

 

 

(985

)

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

104

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

104

 

 

 

-

 

 

 

104

 

Shares issued for compensation

 

 

9,979

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Exchange of partnership units for common shares (Note 10)

 

 

109,900

 

 

 

-

 

 

 

2,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,000

 

 

 

(2,000

)

 

 

-

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(6,574

)

 

 

(6,574

)

 

 

-

 

 

 

(6,574

)

Balance as of March 31, 2021

 

 

28,445,806

 

 

 

3

 

 

 

284,881

 

 

 

852

 

 

 

(11

)

 

 

(284,055

)

 

 

818

 

 

 

21,963

 

 

 

22,781

 

Issuance of Common Shares

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

128

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

128

 

 

 

-

 

 

 

128

 

Exchange of partnership units for common shares (Note 10)

 

 

2,356,156

 

 

 

-

 

 

 

21,963

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

21,963

 

 

 

(21,963

)

 

 

-

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(5,969

)

 

 

(5,969

)

 

 

-

 

 

 

(5,969

)

Balance as of June 30, 2021

 

 

30,801,962

 

 

$

3

 

 

$

306,972

 

 

 

852

 

 

$

(11

)

 

$

(290,024

)

 

$

16,940

 

 

$

-

 

 

$

16,940

 

 

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

 

 

5


 

 

 

VACCINEX, INC.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

 

 

 

Six Months Ended June 30,

 

 

 

2021

 

 

2020

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net loss

 

$

(12,543

)

 

$

(13,650

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

91

 

 

 

162

 

Debt related charges included in interest expense

 

 

371

 

 

 

-

 

Stock-based compensation

 

 

232

 

 

 

570

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

157

 

 

 

677

 

Prepaid expenses and other current assets

 

 

(524

)

 

 

(1,275

)

Accounts payable

 

 

(1,448

)

 

 

2,055

 

Accrued expenses

 

 

(432

)

 

 

(1,497

)

Net cash used in operating activities

 

 

(14,096

)

 

 

(12,958

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(22

)

 

 

(254

)

Net cash used in investing activities

 

 

(22

)

 

 

(254

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

32,848

 

 

 

2,349

 

Redemption of convertible debt

 

 

(5,956

)

 

 

-

 

Payments of common stock issuance costs

 

 

(985

)

 

 

-

 

Proceeds from private offering of common stock

 

 

-

 

 

 

7,475

 

Proceeds from long-term debt

 

 

-

 

 

 

1,134

 

Proceeds from exercise of stock options

 

 

-

 

 

 

4

 

Net cash provided by financing activities

 

 

25,907

 

 

 

10,962

 

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

 

11,789

 

 

 

(2,250

)

CASH AND CASH EQUIVALENTS–Beginning of period

 

 

10,596

 

 

 

2,776

 

CASH AND CASH EQUIVALENTS–End of period

 

$

22,385

 

 

$

526

 

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND

   FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Capital expenditures incurred but not yet paid

 

$

-

 

 

$

(161

)

Amortization of deferred offering costs in prepaid assets

 

$

-

 

 

$

(54

)

Deferred offering costs in prepaid assets and accounts payable

 

$

-

 

 

$

269

 

 

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

 

 

6


 

 

VACCINEX, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 1.

  COMPANY AND NATURE OF BUSINESS

Vaccinex, Inc. (together with its subsidiaries, the “Company”) was incorporated in Delaware in April 2001 and is headquartered in Rochester, New York. The Company is a clinical-stage biotechnology company engaged in the discovery and development of targeted biotherapeutics to treat serious diseases and conditions with unmet medical needs, including cancer, neurodegenerative diseases, and autoimmune disorders. Since its inception, the Company has devoted substantially all of its efforts toward product research, manufacturing and clinical development, and raising capital.

The Company is subject to a number of risks and uncertainties common to other early-stage biotechnology companies including, but not limited to, dependency on the successful development and commercialization of its product candidates, rapid technological change and competition, dependence on key personnel and collaborative partners, uncertainty of protection of proprietary technology and patents, clinical trial uncertainty, fluctuation in operating results and financial performance, the need to obtain additional funding, compliance with governmental regulations, technological and medical risks, management of growth and effectiveness of marketing by the Company. The Company is also subject to risks related to the ongoing COVID-19 pandemic, discussed under “COVID-19 Pandemic” below. If the Company does not successfully commercialize or partner any of its product candidates, it will be unable to generate product revenue or achieve profitability.

Going Concern

These condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The Company has incurred significant losses and negative cash flows from operations since inception and expects to incur additional losses until such time that it can generate significant revenue from the commercialization of its product candidates. The Company had negative cash flow from operations of $14.1 million and $13.0 million for the six months ended June 30, 2021, and 2020, respectively, and an accumulated deficit of $290.0 million and $