UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
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☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2022March 31, 2023
OR
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☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File No. 001-38535
Aptinyx Inc.
(Exact name of registrant as specified in its charter)
| | |
Delaware | | 47-4626057 |
(State or other jurisdiction of | | (I.R.S. Employer |
909 Davis Street, Suite 600
Evanston, IL 60201
(847) 871-0377
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
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 $0.01 per share | APTX | The Nasdaq |
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, 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 2, 2022May 15, 2023 the registrant had 67,715,718 shares of common stock, $0.01 par value per share, outstanding.
Table of Contents
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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2
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks, uncertainties, and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from the information expressed or implied by these forward-looking statements. 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 revenue, projected costs, prospects, plans and objectives of management and expected market growth are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
These forward-looking statements include, among other things, statements about:
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for the |
3
● | our financial performance; |
● | our ability to fund our planned operations for the next twelve months and our ability to continue as a going concern; |
● | our expectations related to the use of our |
● | our expectations regarding our ability to maintain the |
● | other risks and uncertainties, including those listed under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, |
We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q and our Annual Report filed with the Securities and Exchange Commission, or the SEC, on March 23, 2022,30, 2023, particularly in the “Risk Factors” section, that could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures or investments that we may make or into which we may enter.
You should read this Quarterly Report on Form 10-Q and the documents that we reference herein and have filed or incorporated by reference as exhibits hereto completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
43
PART I—FINANCIAL INFORMATION
Item 1. Condensed Financial Statements.
Aptinyx Inc.
Condensed Balance Sheets
(unaudited)
(in thousands, except per share data)
| | | | | | |
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| June 30, |
| December 31, | ||
| | 2022 | | 2021 | ||
Assets | |
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Current assets: | |
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Cash and cash equivalents | | $ | 85,269 | | $ | 106,124 |
Restricted cash | | | 105 | | | 197 |
Prepaid expenses and other current assets | | | 6,766 |
|
| 8,422 |
Total current assets | | | 92,140 |
|
| 114,743 |
Other assets | | | 92 | | | — |
Property and equipment, net | | | 74 |
|
| 185 |
Total assets | | $ | 92,306 | | $ | 114,928 |
Liabilities and stockholders’ equity | | |
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Current liabilities: | | |
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Accounts payable | | $ | 2,106 | | $ | 622 |
Accrued expenses and other current liabilities | | | 3,576 |
|
| 5,064 |
Total current liabilities | | | 5,682 |
|
| 5,686 |
Term loan, non-current | | | 24,498 | | | 14,155 |
Other long-term liabilities | | | 27 |
|
| 331 |
Total liabilities | | $ | 30,207 |
| $ | 20,172 |
Commitments and contingencies (see Note 12) | | |
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Stockholders’ equity: | | |
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Preferred stock, $0.01 par value, 10,000 shares authorized and 0 shares issued and outstanding as of June 30, 2022 and December 31, 2021 | | | — | |
| — |
Common stock, $0.01 par value, 150,000 shares authorized as of June 30, 2022 and December 31, 2021, 67,716 issued and outstanding as of June 30, 2022 and December 31, 2021 | | | 677 |
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| 677 |
Additional paid-in capital | | | 386,803 |
|
| 381,966 |
Accumulated deficit | | | (325,381) |
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| (287,887) |
Total stockholders’ equity | | $ | 62,099 |
| $ | 94,756 |
Total liabilities and stockholders’ equity | | $ | 92,306 | | $ | 114,928 |
| | | | | | |
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| March 31, |
| December 31, | ||
| | 2023 | | 2022 | ||
Assets | |
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Current assets: | |
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| |
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Cash and cash equivalents | | $ | 44,573 | | $ | 56,205 |
Restricted cash | | | 179 | | | 179 |
Prepaid expenses and other current assets | | | 3,005 |
|
| 7,646 |
Total current assets | | | 47,757 |
|
| 64,030 |
Other assets | | | 206 | | | 2,622 |
Property and equipment, net | | | — |
|
| 32 |
Total assets | | $ | 47,963 | | $ | 66,684 |
Liabilities and stockholders’ equity | | |
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Current liabilities: | | |
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Accounts payable | | $ | 1,374 | | $ | 724 |
Accrued expenses and other current liabilities | | | 1,157 |
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| 2,772 |
Finance lease, current | | | 1,138 | | | — |
Term loan, current | | | 5,654 | | | 2,795 |
Total current liabilities | | | 9,323 |
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| 6,291 |
Finance lease, non-current | | | 940 | | | — |
Term loan, non-current | | | 19,444 | | | 22,108 |
Total liabilities | | $ | 29,707 |
| $ | 28,399 |
Commitments and contingencies (see Note 12) | | |
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Stockholders’ equity: | | |
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Preferred stock, $0.01 par value, 10,000 shares authorized and no shares issued and outstanding as of March 31, 2023 and December 31, 2022 | | | — | |
| — |
Common stock, $0.01 par value, 150,000 shares authorized as of March 31, 2023 and December 31, 2022, 67,716 issued and outstanding as of March 31, 2023 and December 31, 2022 | | | 677 |
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| 677 |
Additional paid-in capital | | | 391,381 |
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| 390,344 |
Accumulated deficit | | | (373,802) |
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| (352,736) |
Total stockholders’ equity | | $ | 18,256 |
| $ | 38,285 |
Total liabilities and stockholders’ equity | | $ | 47,963 | | $ | 66,684 |
See accompanying notes to these unaudited condensed financial statements.
54
Aptinyx Inc.
Condensed Statements of Operations
(unaudited)
(in thousands, except per share data)
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| | Three Months Ended March 31, |
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| 2022 |
| 2021 |
| 2022 |
| 2021 |
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| 2023 |
| 2022 |
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Revenues: | | | | | | | | | | | | | | |||||||
Collaboration revenue |
| $ | — | | $ | — |
| $ | — | | $ | 1,000 | | |||||||
Operating expenses: | | | |
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Research and development | | | 11,909 |
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| 14,796 | | | 25,511 |
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| 25,110 | | | $ | 16,093 |
| $ | 13,602 | |
General and administrative | | | 5,196 |
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| 5,070 | | | 10,973 |
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| 10,046 | | | | 4,229 |
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| 5,777 | |
Total operating expenses | | | 17,105 |
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| 19,866 | | | 36,484 |
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| 35,156 | | | | 20,322 |
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| 19,379 | |
Loss from operations | | | (17,105) |
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| (19,866) | | | (36,484) |
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| (34,156) | | | | (20,322) |
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| (19,379) | |
Other (income) expense, net | | | (195) |
|
| (47) | | | (224) |
|
| (111) | | | | (286) |
|
| (29) | |
Interest expense | | | 757 | | | — | | | 1,234 | | | — | | | | 1,030 | | | 477 | |
Net loss and comprehensive loss |
| $ | (17,667) | | $ | (19,819) |
| $ | (37,494) | | $ | (34,045) | |
| $ | (21,066) | | $ | (19,827) | |
Net loss per share attributable to common stockholders, basic and diluted |
| $ | (0.26) | | $ | (0.29) |
| $ | (0.55) | | $ | (0.51) | |
| $ | (0.31) | | $ | (0.29) | |
Weighted-average number of common shares outstanding, basic and diluted | |
| 67,716 |
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| 67,381 | |
| 67,716 |
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| 66,716 | | |
| 67,716 |
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| 67,716 | |
See accompanying notes to these unaudited condensed financial statements.
65
Aptinyx Inc.
Condensed Statements of Cash Flows
(unaudited)
(in thousands)
| | | | | | | | | | | | |
| | Six Months Ended | | Three Months Ended | ||||||||
| | June 30, | | March 31, | ||||||||
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| 2022 |
| 2021 |
| 2023 |
| 2022 | ||||
Cash flows from operating activities: |
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Net loss |
| $ | (37,494) | | $ | (34,045) |
| $ | (21,066) | | $ | (19,827) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | |
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Depreciation and amortization expense | | | 87 |
| | 450 | | | 32 |
| | 38 |
Change in fair value of derivative liability associated with contingently issuable warrants | | | (109) | | | — | | | — | | | 15 |
Non-cash interest expense related to term loan | | | 350 | | | — | | | 196 | | | 139 |
Impairment of assets related to supply manufacturing agreements | | | 8,199 | | | — | ||||||
Stock-based compensation expense | | | 4,631 |
| | 5,133 | | | 1,037 |
| | 2,350 |
Changes in operating assets and liabilities: | | | |
| | | | | |
| | |
Prepaid expenses and other assets | | | 1,887 |
| | 3,692 | | | 1,202 |
| | 2,375 |
Accounts receivable | | | — |
| | 257 | ||||||
Accounts payable | | | 1,406 |
| | (775) | | | 664 |
| | 1,075 |
Accrued expenses and other liabilities | | | (1,440) |
| | (467) | | | (1,629) |
| | (2,089) |
Net cash used in operating activities | | | (30,682) |
| | (25,755) | | | (11,365) |
| | (15,924) |
Cash flows from investing activities: | | |
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| |
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Proceeds from sale of property and equipment | | | — | | | 121 | ||||||
Net cash provided by investing activities | | | — |
| | 121 | ||||||
Cash flows from financing activities: | | |
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Proceeds from stock options exercised | | | — | | | 133 | ||||||
Repurchase of shares for tax withholdings | | | — | | | (912) | ||||||
Repayment of principal portion of finance lease liabilities | | | (265) | | | — | ||||||
Proceeds from issuance of term loan, net of issuance costs paid to lender | | | 10,000 | | | — | | | — | | | 10,000 |
Payment of debt issuance costs | | | (20) | | | — | | | (2) | | | (13) |
Proceeds from at the market offering, net of sales commission | | | — | | | 14,615 | ||||||
Payment of offering costs | | | (153) |
| | (4) | | | — |
| | (27) |
Net cash provided by financing activities | | | 9,827 |
| | 13,832 | | | (267) |
| | 9,960 |
Net (decrease) in cash, cash equivalents and restricted cash | | | (20,855) |
| | (11,802) | ||||||
Net decrease in cash, cash equivalents and restricted cash | | | (11,632) |
| | (5,964) | ||||||
Cash, cash equivalents and restricted cash, at beginning of period | | | 106,321 |
| | 141,299 | | | 56,384 |
| | 106,321 |
Cash, cash equivalents and restricted cash, at end of period |
| $ | 85,466 | | $ | 129,497 |
| $ | 44,752 | | $ | 100,357 |
Supplemental disclosure of cash flow information: | | | | | | | | | | | | |
Cash paid for interest | | $ | 798 | | $ | — | | $ | 822 | | $ | 298 |
Supplemental disclosure of non-cash investing and financing activities: | | |
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Right-of-use asset recognized in exchange for finance lease obligations | | $ | 2,344 | | $ | — | ||||||
Deferred offering costs not yet paid | | $ | 78 | | $ | — | | | — | | | 95 |
Debt issuance costs not yet paid | | | — | | | 2 | ||||||
Issuance of warrants in connection with term loan financing | | | 206 | | | — | | | — | | | 206 |
See accompanying notes to these unaudited condensed financial statements.
76
Aptinyx Inc.
Condensed Statements of Stockholders’ Equity
(unaudited)
(in thousands)
| | | | | | | | | | | | | | | ||||||||||||||
| | | | | | | Additional | | | | | Total | ||||||||||||||||
| | Common stock | | paid-in | | Accumulated | | stockholders’ | ||||||||||||||||||||
| | Shares |
| Amount |
| capital |
| deficit |
| equity | ||||||||||||||||||
Balance at March 31, 2022 |
| 67,716 | | $ | 677 | | $ | 384,522 | | $ | (307,714) | | $ | 77,485 | ||||||||||||||
Stock‑based compensation |
| — | | | — | | | 2,281 | | | — | | | 2,281 | ||||||||||||||
Net loss |
| — | | | — | | | — | | | (17,667) | | | (17,667) | ||||||||||||||
Balance at June 30, 2022 |
| 67,716 | | $ | 677 | | $ | 386,803 | | $ | (325,381) | | $ | 62,099 | ||||||||||||||
| | | | | | | | | | | | | | | ||||||||||||||
Balance at March 31, 2021 | | 66,930 | | $ | 669 | | $ | 375,499 | | $ | (227,227) | | $ | 148,941 | ||||||||||||||
Issuance of common stock upon vesting of restricted stock | | 1,084 | |
| 11 | |
| (11) | |
| — | |
| — | ||||||||||||||
Repurchase of shares for tax withholdings | | (345) | | | (3) | | | (902) | | | — | | | (905) | ||||||||||||||
Stock-based compensation | | — | |
| — | |
| 2,478 | |
| — | |
| 2,478 | ||||||||||||||
Issuance of common stock upon exercise of stock options | | 47 | | | — | | | 61 | | | — | | | 61 | ||||||||||||||
Net loss | | — | |
| — | |
| — | |
| (19,819) | |
| (19,819) | ||||||||||||||
Balance at June 30, 2021 | | 67,716 | | $ | 677 | | $ | 377,125 | | $ | (247,046) | | $ | 130,756 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Additional | | | | | Total | | | | | | | Additional | | | | | Total | ||||
| | Common stock | | paid-in | | Accumulated | | stockholders’ | | Common stock | | paid-in | | Accumulated | | stockholders’ | ||||||||||||
|
| Shares |
| Amount |
| capital |
| deficit |
| equity |
| Shares |
| Amount |
| capital |
| deficit |
| equity | ||||||||
Balance at December 31, 2021 |
| 67,716 | | $ | 677 | | $ | 381,966 | | $ | (287,887) | | $ | 94,756 |
| 67,716 | | $ | 677 | | $ | 381,966 | | $ | (287,887) | | $ | 94,756 |
Stock‑based compensation |
| — | |
| — | |
| 4,631 | |
| — | |
| 4,631 |
| — | |
| — | |
| 2,350 | |
| — | |
| 2,350 |
Issuance of warrants in connection with term loan financing | | — | | | — | | | 206 | | | — | | | 206 | | — | | | — | | | 206 | | | — | | | 206 |
Net loss | | — | | | — | | | — | | | (37,494) | | | (37,494) | | — | | | — | | | — | | | (19,827) | | | (19,827) |
Balance at June 30, 2022 |
| 67,716 | | $ | 677 | | $ | 386,803 | | $ | (325,381) | | $ | 62,099 | ||||||||||||||
Balance at March 31, 2022 |
| 67,716 | | $ | 677 | | $ | 384,522 | | $ | (307,714) | | $ | 77,485 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at December 31, 2020 | | 63,257 | | $ | 633 | | $ | 358,277 | | $ | (213,001) | | $ | 145,909 | ||||||||||||||
Issuance of common stock upon vesting of restricted stock |
| 1,089 | | | 11 | | | (11) | | | — | |
| — | ||||||||||||||
Repurchase of shares for tax withholdings | | (347) | | | (3) | | | (909) | | | — | | | (912) | ||||||||||||||
Issuance of common stock upon at the market offering, net of sales commissions and other offering costs of $529 | | 3,630 | | | 36 | | | 14,502 | | | — | | | 14,538 | ||||||||||||||
Balance at December 31, 2022 | | 67,716 | | $ | 677 | | $ | 390,344 | | $ | (352,736) | | $ | 38,285 | ||||||||||||||
Stock‑based compensation |
| — | | | — | | | 5,133 | | | — | |
| 5,133 | | — | | | — | | | 1,037 | | | — | | | 1,037 |
Issuance of common stock upon exercise of stock options | | 87 | | | — | | | 133 | | | — | | | 133 | ||||||||||||||
Net loss |
| — | | | — | | | — | | | (34,045) | |
| (34,045) |
| — | | | — | | | — | | | (21,066) | |
| (21,066) |
Balance at June 30, 2021 |
| 67,716 | | $ | 677 | | $ | 377,125 | | $ | (247,046) | | $ | 130,756 | ||||||||||||||
Balance at March 31, 2023 |
| 67,716 | | $ | 677 | | $ | 391,381 | | $ | (373,802) | | $ | 18,256 |
See accompanying notes to the unaudited condensed financial statements.
87
Aptinyx Inc.
Notes to Condensed Financial Statements
(unaudited)
1. Organization
Description of business
Aptinyx Inc. (the “Company” or “Aptinyx”) was incorporated in Delaware on June 24, 2015, and maintains its headquarters in Evanston, Illinois.
Aptinyx is a clinical-stage biopharmaceutical company focused on the discovery, development, and commercialization of novel, proprietary, synthetic small molecules for the treatment of brain and nervous system disorders. Aptinyx has a platform for discovering proprietary compounds that work through a novel mechanism: modulation of N-methyl-D-aspartate receptors (“NMDAr”), which are vital to normal and effective brain and nervous system functions. This mechanism has applicability across numerous nervous system disorders.
Liquidity, and capital resources, and going concern
On July 1, 2019, the Company entered into a Sales Agreement (the “2019 Sales Agreement”)The financial statements are prepared in accordance with Cowen and Company, LLC (“Cowen”) pursuant to which the Company may offer and sell shares of its common stock with an aggregate offering price of up to $50.0 million under an “at the market” offering program (the “2019 ATM Offering”). The 2019 Sales Agreement provides that Cowen will be entitledgenerally accepted accounting principles applicable to a sales commission equal to 3.0%going concern, which contemplates the realization of assets and the gross sales price per sharesatisfaction of all shares sold underliabilities in the 2019 ATM Offering. To date, thenormal course of business.
The Company has sold an aggregate of 5,120,940 shares under the 2019 ATM Offering at a weighted-average price of $3.99 per share for net proceeds of $20.4 million after deducting sales commissionincurred operating losses and other offering expenses, including 3,629,458 shares for net proceeds of $14.5 million during the six months ended June 30, 2021.
On September 15, 2021, the Company entered into a Loan and Security agreement (the “Loan Agreement”) with K2 HealthVentures LLC (“Lender”). The Loan Agreement provides up to $50.0 million principal in term loans, $15.0 million of which was funded at the time the Company entered into the agreement and $10.0 million of which was funded on March 14, 2022. See Note 7 for additional details regarding the Loan Agreement.
On September 16, 2021, the Company entered into a Sales Agreement (the “2021 Sales Agreement”) with Cowen pursuant to which the Company may offer and sell shares of its common stock with an aggregate offering price of up to $50.0 million under an “at the market” offering program (the “2021 ATM Offering”) and which supersedes the 2019 Sales Agreement and 2019 ATM Offering. The 2021 Sales Agreement provides that Cowen will be entitled to a sales commission equal to 3.0% of the gross sales price per share of all shares sold under the 2021 ATM Offering.negative cash flows from operations since inception. As of the date of these financial statements, 0 shares of common stock have been issued and sold pursuant to the 2021 Sales Agreement.
On March 24, 2022, the Company entered into an amendment to the 2021 Sales Agreement (the “2022 Sales Agreement”) pursuant to which the Company may offer and sell shares of its common stock with an aggregate offering price of up to $75.0 million under an “at the market” offering program (the “2022 ATM Offering”) and which supersedes the 2021 Sales Agreement and 2021 ATM Offering. The 2022 Sales Agreement provides that Cowen will be entitled to a sales commission equal to 3.0% of the gross sales price per share of all shares sold under the 2022 ATM Offering. As of the date of these financial statements, 0 shares of common stock have been issued and sold pursuant to the 2022 Sales Agreement.
As of June 30, 2022,31, 2023, the Company had an accumulated deficit of $373.8 million, cash and cash equivalents of $85.3$44.6 million, whichand total liabilities of $29.7 million.
In February 2023, in light of its financial condition and the results of recent clinical studies that did not support continued development, the Company believes will be sufficientbegan implementation of a strategic restructuring plan to fundspreserve capital and reduce operating costs. The Company also began exploration of strategic alternatives to maximize shareholder value. As part of the restructuring plan, the Company eliminated 60% of its planned operations forworkforce, leaving a periodcore team of at least twelve monthsindividuals to lead the strategic alternatives review process. On May 4, 2023, following the completion of the review of strategic alternatives, the Company’s board unanimously approved a plan of liquidation and dissolution of the Company, which plan is subject to stockholder approval.
These conditions and events raise substantial doubt about the Company’s ability to continue as a going concern.
The Company does not have plans to alleviate the substantial doubt about the Company’s ability to continue as a going concern.
The 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 dateoutcome of issuance of these condensed financial statements.this uncertainty.
9
2.Summary of significant accounting policies
Basis of presentation
The condensed financial statements of the Company included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted from this report, as is permitted by such rules and regulations. The accompanying condensed financial statements reflect all adjustments consisting of normal, recurring adjustments that are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. Interim results are not necessarily indicative of results for a full year. Accordingly, these condensed financial statements should be read in conjunction with the financial statements included in the Company’s
8
Annual Report on Form 10-K for the year ended December 31, 20212022 (the “Annual Report”) filed with the SEC on March 23, 2022.30, 2023.
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”), or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial statements upon adoption. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company, and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.
Use of estimates
The condensed financial statements are prepared in conformity with GAAP. This process requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Risk and uncertainties
The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of:of plans and expectations for the impactplan of COVID-19 on future clinical study results,liquidation and dissolution, and the scope, timing, rate of progress, and expense of the Company’s ongoing as well as any additional preclinical studies, clinical studies, and other research and development activities, clinical study enrollment rate or design, the manufacturing of the Company’s product candidates, significant and changing government regulation, and the timing and receipt of any regulatory approvals.activities.
Significant accounting policies
The Company’s significant accounting policies are described herein and in Note 3, “Summary of significant accounting policies,” in the Annual Report. There have been no material changes to the significant accounting policies during the sixthree months ended June 30, 2022.March 31, 2023.
Recently issued accounting pronouncement
In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”), as amended, which requires a lessee to recognize assets and liabilities on the balance sheet for operating leases and changes many key definitions, including the definition of a lease. The new standard includes a short-term lease exception for leases with a term of 12 months or less, as part of which a lessee can make an accounting policy election not to recognize lease assets and lease liabilities. Lessees will continue to differentiate between finance leases (previously referred to as capital leases) and operating leases using classification criteria that are substantially similar to the previous guidance. The new standard became effective for the Company for annual reporting periods beginning after December 15, 2021, and interim periods within
10
fiscal years beginning after December 15, 2022, and early adoption is permitted. The Company anticipates that the adoption of this standard will have an impact on its balance sheet due to the recognition of right-of-use assets and lease liabilities; however, the Company is currently evaluating the impact that the adoption of ASU 2016-02 may have on its condensed financial statements.
3. Supplemental financial information
Cash, cash equivalents and restricted cash
Cash and cash equivalents consist of cash and, if applicable, highly liquid investments with an original maturity of three months or less when purchased. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheets that sum to the total of the same such amounts shown in the condensed statements of cash flows (in thousands).
| | | | | | | | | | | | | | |
| | As of | | As of | | | As of | | As of | | ||||
| | June 30, | | December 31, | | | March 31, | | December 31, | | ||||
|
| 2022 |
| 2021 |
|
| 2023 |
| 2022 |
| ||||
Cash and cash equivalents | | $ | 85,269 | | $ | 106,124 | | | $ | 44,573 | | $ | 56,205 | |
Short-term and long-term restricted cash | |
| 197 | |
| 197 | | |||||||
Short-term restricted cash | |
| 179 | |
| 179 | | |||||||
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows | | $ | 85,466 | | $ | 106,321 | | | $ | 44,752 | | $ | 56,384 | |
Prepaid expenses and other current assets
Prepaid expenses and other current assets consist of the following (in thousands):
| | | | | | | |
| | As of | | As of | | ||
| | June 30, | | December 31, | | ||
|
| 2022 |
| 2021 |
| ||
Prepaid clinical |
| $ | 3,515 | | $ | 4,693 |
|
Prepaid insurance | | | 50 | | | 1,122 | |
Prepaid manufacturing costs | | | 2,844 | | | 2,241 | |
Other prepaid expenses and current assets |
|
| 357 | |
| 366 |
|
Total prepaid expenses and other current assets |
| $ | 6,766 | | $ | 8,422 |
|
Accrued expenses and other current liabilities
Accrued expenses and other current liabilities consist of the following (in thousands):
| | | | | | | |
| | As of | | As of | | ||
| | June 30, | | December 31, | | ||
|
| 2022 |
| 2021 |
| ||
Employee-related expenses | | $ | 1,344 | | $ | 2,567 | |
Development costs and sponsored research | |
| 1,027 | |
| 1,347 | |
Clinical trials | |
| 592 | |
| 810 | |
Other | |
| 613 | |
| 340 | |
Total accrued expenses and other current liabilities | | $ | 3,576 | | $ | 5,064 | |
4. Research collaboration agreement with Allergan
On July 24, 2015, the Company entered into a Research Collaboration Agreement (“RCA”) with Naurex Inc., a subsidiary of Allergan plc (“Allergan”), which became a wholly owned subsidiary of AbbVie Inc. in May 2020. The RCA was focused on the research and discovery of small molecules that modulate NMDArs. Under the terms of the agreement, the RCA terminated upon the earlier of (i) 180 days after a predetermined anniversary of the effective date of the RCA and (ii) the date on which Allergan exercised the last of 3 options to acquire molecules from a pool of
119
eligible compounds, in both cases (clauses (i) and (ii)) subject to potential extension if and as required for the Company to transfer to Allergan information and technology related to compounds that were licensed by Allergan. The jointly funded research activities and option exercise period under the RCA, including the associated payments by Allergan to the Company, came to their contractual conclusions in accordance with the agreement in August 2020 and February 2021, respectively. Under the terms of the agreement, Allergan was to pay the Company $1.0 million for each option exercised by Allergan. On February 23, 2021, Allergan exercised its option to acquire exclusive rights to develop and commercialize AGN-281705 within a predefined set of indications. For the six months ended June 30, 2021, the Company recognized the $1.0 million non-refundable milestone payment within collaboration revenue in the statements of operations as there were no remaining performance obligations associated with the optioned compound.
5.Prepaid expenses and other current assets
Prepaid expenses and other current assets consist of the following (in thousands):
| | | | | | | |
| | As of | | As of | | ||
| | March 31, | | December 31, | | ||
|
| 2023 |
| 2022 |
| ||
Prepaid clinical |
| $ | 2,048 | | $ | 3,828 |
|
Prepaid insurance | | | 579 | | | 1,109 | |
Prepaid manufacturing costs | | | — | | | 2,380 | |
Other prepaid expenses and current assets |
|
| 378 | |
| 329 |
|
Total prepaid expenses and other current assets |
| $ | 3,005 | | $ | 7,646 |
|
Accrued expenses and other current liabilities
Accrued expenses and other current liabilities consist of the following (in thousands):
| | | | | | | |
| | As of | | As of | | ||
| | March 31, | | December 31, | | ||
|
| 2023 |
| 2022 |
| ||
Employee-related expenses | | $ | 256 | | $ | 1,724 | |
Development costs and sponsored research | |
| 151 | |
| 84 | |
Clinical trials | |
| — | |
| 184 | |
Other | |
| 750 | |
| 780 | |
Total accrued expenses and other current liabilities | | $ | 1,157 | | $ | 2,772 | |
4. Fair value measurements
ASC 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes between the following:
● | Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; |
● | Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and |
● | Level 3 inputs are unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. |
To the extent that 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.
10
The carrying values reported in the Company’s balance sheets for cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued expenses are reasonable estimates of their fair values due to the short-term nature of these items.
Assets and liabilities measured at fair value on a recurring basis as of June 30, 2022,March 31, 2023, are as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | |
| | June 30, | | | | | | | | March 31, | | | | | | | ||||||||
|
| 2022 |
| Level 1 |
| Level 2 |
| Level 3 |
| 2023 |
| Level 1 |
| Level 2 |
| Level 3 | ||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | ||
Money market funds, included in cash and cash equivalents | | $ | 76,973 | | $ | 76,973 | | $ | — | | $ | — | | $ | 42,071 | | $ | 42,071 | | $ | — | | $ | — |
Money market funds, included in restricted cash | | | 197 | | | 197 | |
| — | |
| — | | | 179 | | | 179 | |
| — | |
| — |
Total Assets | | $ | 77,170 | | $ | 77,170 | | $ | — | | $ | — | | $ | 42,250 | | $ | 42,250 | | $ | — | | $ | — |
Liabilities | | | | | | | | | | | | | ||||||||||||
Derivative liability, included in other long-term liabilities | | $ | 16 | | $ | — | | $ | — | | $ | 16 | ||||||||||||
Total Liabilities | | $ | 16 | | $ | — | | $ | — | | $ | 16 |
12
Assets measured at fair value on a recurring basis as of December 31, 2021,2022, are as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, | | | | | | | | December 31, | | | | | | | ||||||||
|
| 2021 |
| Level 1 |
| Level 2 |
| Level 3 |
| 2022 |
| Level 1 |
| Level 2 |
| Level 3 | ||||||||
Assets |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Money market funds, included in cash and cash equivalents | | $ | 103,859 | | $ | 103,859 | | $ | — | | $ | — | | $ | 55,686 | | $ | 55,686 | | $ | — | | $ | — |
Money market funds, included in restricted cash | | | 197 | | | 197 | |
| — | |
| — | | | 179 | | | 179 | |
| — | |
| — |
Total Assets | | $ | 104,056 | | $ | 104,056 | | $ | — | | $ | — | | $ | 55,865 | | $ | 55,865 | | $ | — | | $ | — |
Liabilities | | | | | | | | | | | | | ||||||||||||
Derivative liability, included in other long-term liabilities | | $ | 331 | | $ | — | | $ | — | | $ | 331 | ||||||||||||
Total Liabilities | | $ | 331 | | $ | — | | $ | — | | $ | 331 |
6.5. Property and equipment, net
Property and equipment are as follows (in thousands):
| | | | | | | | | | | | | | |
| | As of | | As of | | | As of | | As of | | ||||
| | June 30, | | December 31, | | | March 31, | | December 31, | | ||||
| | 2022 |
| 2021 |
| | 2023 |
| 2022 |
| ||||
Office equipment and furniture | |
| 152 | |
| 152 | | |
| 152 | |
| 152 | |
Laboratory equipment | |
| 401 | |
| 401 | | |
| — | |
| 401 | |
Leasehold improvements | |
| 979 | |
| 979 | | |
| 979 | |
| 979 | |
Less accumulated depreciation | |
| (1,458) | |
| (1,347) | | |
| (1,131) | |
| (1,500) | |
Property and equipment, net | | $ | 74 | | $ | 185 | | | $ | — | | $ | 32 | |
Depreciation expense was less than $0.1 million for each of the three months ended June 30, 2022March 31, 2023 and 2021, respectively, and $0.1 million and $0.5 million for the six months ended June 30, 2022 and 2021, respectively.2022. The Company disposed of certain laboratory equipment during the six months ended June 30, 2021, that were fully depreciated at the time of disposal.
7.6. Debt
On September 15, 2021, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with K2 HealthVentures LLC (the “Lender”). The Lender has agreed to make available to the Company term loans in an aggregate principal amount of up to $50.0 million under the Loan Agreement. The Company plansplanned to use the proceeds of the term loans to support clinical development as well as for working capital and general corporate purposes. The Loan Agreement providesprovided a term loan commitment of $50.0 million in 4four potential tranches: (i) a $15.0 million term loan facility funded on September 15, 2021 (the “First Tranche Term Loan”); (ii) a $10.0 million term loan facility (the “Second Tranche Term Loan”) funded on March 14, 2022; (iii) a $10.0 million term loan facility (the “Third Tranche Term Loan”) available at the Company’s option between July 1, 2022, and December 1, 2022, subject to the draw of the Second Tranche Term Loan and positive Phase 2 clinical data from NYX-2925 or NYX-458 and progression of another clinical asset; and (iv) a $15.0 million term loan facility (the “Fourth Tranche Term Loan”) available through July 1, 2023, at the Company’s option but subject to review of financial and clinical plans and Lender’s Investment Committee approval. All 4four of these term loans havehad a maturity date of September 1, 2025.
11
Borrowings under all 4four term loan facilities bearbore interest at a floating per annum rate equal to the greater of (i) 7.95% and (ii) the Prime Rate plus 4.70%. The Company iswas permitted to make interest-only payments on the First Tranche Term Loan for the first 24 months following the funding date. The interest-only period cancould be extended by an additional 12 months, subject to the funding of the Second Tranche Term Loan and the funding of the Third Tranche Term Loan. The term of the combined facility will bewould have been 48 months, with repayment in monthly installments commencing at the end of the resulting interest-only period as outlined above through the end of the 48-month term.
13
The Company iswas obligated to pay a final fee equal to 6.45% of the aggregate amount of the term loans funded (“Exit Fee”), to occur upon the earliest of (i) the maturity date, (ii) the acceleration of the term loans, and (iii) the prepayment of the term loans. The Company hashad the option to prepay all, but not less than all, of the outstanding principal balance of the term loans under the Loan Agreement. If the Company prepaysprepaid all of the term loans prior to the maturity date, it willwould pay the Lender a prepayment penalty fee based on a percentage of the outstanding principal balance, equal to 3% if the payment occursoccurred on or before 24 months after the initial funding date, 2% if the prepayment occursoccurred more than 24 months after, but on or before 36 months after the initial funding date, or 1% if the prepayment occursoccurred more than 36 months after the initial funding date. The Company also is obligated to pay the Lender an origination fee of 0.8% of all term loans funded at the time of funding.
The Lender may,could, at its option, elect to convert any portion of no more than $4 million of the then outstanding term loan amount and all accrued and unpaid interest thereon into shares of the Company’s common stock at a conversion price of the lesser of $4.25 per share and the price per share of the common stock in the Company’s next equity offering in which the Company receives at least $20.0 million of gross proceeds. The Company determined that the embedded conversion option is not required to be separated from the term loan. The embedded conversion option meets the derivative accounting scope exception since the embedded conversion option is indexed to the Company’s own common stock and qualifies for classification within stockholders’ equity.
The Company’s obligations under the Loan Agreement arewere secured by a first priority security interest in substantially all of its assets. The Loan Agreement containscontained customary representations and warranties, and also includes customary events of default, including payment default, breach of covenants, change of control, and material adverse effects. The Loan Agreement restrictsrestricted certain activities, such as disposing of the Company’s business or certain assets, incurring additional debt or liens or making payments on other debt, making certain investments and declaring dividends, acquiring or merging with another entity, engaging in transactions with affiliates or encumbering intellectual property, among others. There arewere no financial covenants associated with the Loan Agreement. The Company was in compliance with all non-financial covenants under the Loan Agreement as of June 30, 2022.March 31, 2023.
Upon the occurrence of an event of default, a default interest rate of an additional 5% per annum may becould have been applied to the outstanding loan balances, and the Lender may declare all outstanding obligations immediately due and payable and exercise all of its rights and remedies as set forth in the Loan Agreement and under applicable law.
On April 21, 2023, the Company completed voluntary prepayment under the Loan Agreement, and the Loan Agreement and all other documents entered into in connection with the Loan Agreement were terminated, as described in Note 12.
The Company recorded interest expense related to the Loan Agreement of $0.8$1.0 million and $0.5 million for the three months ended June 30,March 31, 2023 and 2022, and $1.2 million for the six months ended June 30, 2022.respectively.
Future principal debt payments of the term loans funded as of June 30, 2022, are as follows (in thousands):
| | | |
|
| | |
2023 | | $ | 2,867 |
2024 | |
| 12,167 |
2025 | |
| 9,966 |
2026 | |
| — |
Total principal payments | |
| 25,000 |
Exit Fee | | | 1,613 |
Total principal payments and Exit Fee | | | 26,613 |
Less: Unamortized debt discount related to warrants | | | (420) |
Less: Unamortized debt discount related to Exit Fee | | | (1,335) |
Less: Unamortized debt issuance costs | |
| (360) |
Term loan, non-current | | $ | 24,498 |
8. Stock incentive plans
On June 5, 2018, the Company’s stockholders approved the 2018 Stock Option and Incentive Plan (the “2018 Plan”), which became effective on June 20, 2018.
1412
Future principal debt payments of the term loans funded as of March 31, 2023, are as follows (in thousands):
| | | |
|
| | |
2023 | | $ | 2,782 |
2024 | |
| 12,048 |
2025 | |
| 10,170 |
2026 | |
| — |
Total principal payments | |
| 25,000 |
Exit Fee | | | 1,613 |
Total principal payments and Exit Fee | | | 26,613 |
Less: Unamortized debt discount related to warrants | | | (300) |
Less: Unamortized debt discount related to Exit Fee | | | (954) |
Less: Unamortized debt issuance costs | |
| (261) |
Term loan, net | | | 25,098 |
Less: current portion of term loan | | | (5,654) |
Term loan, non-current | | $ | 19,444 |
7. Stock incentive plans
On June 5, 2018, the Company’s stockholders approved the 2018 Stock Option and Incentive Plan (the “2018 Plan”), which became effective on June 20, 2018.
Stock-based compensation expense
Non-cash stock-based compensation expense recognized in the accompanying condensed statements of operations relating to stock options, restricted stock awards, and restricted stock units for the three and six months ended June 30,March 31, 2023 and 2022, and 2021, was as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | |
| | Three months ended | | Six months ended | | | Three months ended | | ||||||||||||
| | June 30, | | June 30, | | | March 31, | | ||||||||||||
|
| 2022 |
| 2021 |
| 2022 |
| 2021 |
|
| 2023 |
| 2022 |
| ||||||
Research and development | | $ | 444 | | $ | 676 | | $ | 819 | | $ | 1,413 | | | $ | 165 | | $ | 375 | |
General and administrative | |
| 1,837 | |
| 1,802 | |
| 3,812 | |
| 3,720 | | |
| 872 | |
| 1,975 | |
Total stock‑based compensation expense | | $ | 2,281 | | $ | 2,478 | | $ | 4,631 | | $ | 5,133 | | | $ | 1,037 | | $ | 2,350 | |
Stock options
The table below summarizes activity related to stock options (in thousands, except per share amounts):
| | | | | | | | | | | | | | | | | | | | |
|
| |
| | |
| Weighted‑ |
| | |
| |
| | |
| Weighted‑ |
| | |
| | | | Weighted‑ | | average | | | | | | | Weighted‑ | | average | | | | ||
| | | | average | | remaining | | Aggregate | | | | average | | remaining | | Aggregate | ||||
| | | | exercise | | contractual | | intrinsic | | | | exercise | | contractual | | intrinsic | ||||
Options | | Shares | | price | | term | | value | | Shares | | price | | term | | value | ||||
Outstanding, December 31, 2021 |
| 10,713 | | $ | 5.36 |
| 8.07 | | $ | 718 | ||||||||||
Outstanding, December 31, 2022 |
| 11,836 | | $ | 4.96 |
| 7.31 | | $ | — | ||||||||||
Granted |
| 2,286 | |
| 2.98 |
|
| |
|
|
| 2,533 | |
| 0.36 |
|
| |
|
|
Exercised | | — | | | — | | | | | | | — | | | — | | | | | |
Forfeited and canceled |
| (383) | |
| 3.97 |
|
| |
|
|
| (1,061) | |
| 2.09 |
|
| |
|
|
Outstanding, June 30, 2022 | | 12,616 | | $ | 4.97 | | 7.82 | | $ | 19 | ||||||||||
Vested and expected to vest at June 30, 2022 | | 12,616 | | $ | 4.97 | | 7.82 | | $ | 19 | ||||||||||
Exercisable at June 30, 2022 |
| 6,282 | | $ | 6.64 |
| 6.61 | | $ | 2 | ||||||||||
Outstanding, March 31, 2023 | | 13,308 | | $ | 4.31 | | 7.10 | | $ | — | ||||||||||
Vested and expected to vest at March 31, 2023 | | 13,308 | | $ | 4.31 | | 7.10 | | $ | — | ||||||||||
Exercisable at March 31, 2023 |
| 8,002 | | $ | 5.87 |
| 5.90 | | $ | — |
During the sixthree months ended June 30,March 31, 2023 and 2022, and 2021, the Company granted 2.32.5 million and 3.11.7 million stock options, respectively, and these options had a weighted-average grant-date fair value of $2.28$0.29 and $2.73$2.74 per share,
13
respectively. The weighted-average grant-date fair value of options was determined using the Black-Scholes option-pricing model. The assumptions used in the Black-Scholes option-pricing model for options granted during the sixthree months ended June 30, 2022,March 31, 2023, were similar to those as described in the Annual Report, except for the manner in which the expected volatility was determined. The expected volatility for the Company’s options granted during the sixthree months ended June 30, 2022,March 31, 2023, is based on a weighted-average of the historical volatility of share values of publicly traded companies within the biotechnology industry, which includes the historical volatility of the Company’s stock since the Company’s initial public offering. As of June 30, 2022,March 31, 2023, there was $14.6$7.7 million of total unrecognized stock-based compensation expense related to non-vested stock options, which is expected to be recognized over a weighted-average period of 2.72.3 years. The options have a ten-year life and generally vest over a period of four years, subject to continuous employment.
Restrictedstock units
In June 2020, the Company issued an aggregate of 205,200 restricted stock units to employees. The restricted stock units issued in 2020 vested ten months from the date of grant. Such shares were not accounted for as outstanding until they vested. Non-cash restricted stock unit award expense recognized in the accompanying condensed statements of operations was $0.0 million and $0.2 million for the three months ended in June 30, 2022 and 2021, respectively, and $0.0 million and $0.8 million for the six months ended June 30, 2022 and 2021, respectively. There were 0 unvested restricted stock units as of June 30, 2022.
9. Warrants and derivative liability
Warrants
15
8. Warrants
Warrants
On September 15, 2021, the Company entered into the Loan Agreement with the Lender pursuant to which the Lender may provide the Company with term loans in an aggregate principal amount of up to $50.0 million.
On September 15, 2021, in connection with the funding of the First Tranche Term Loan, the Company issued a warrant exercisable for 147,600 shares of the Company’s common stock at an exercise price of $2.29 per share. The warrant is immediately exercisable for 147,600 shares and expires on September 15, 2031.
On March 14, 2022, in connection with the funding of the Second Tranche Term Loan, the Company issued a warrant exercisable for 98,399 shares of the Company’s common stock at an exercise price of $2.29 per share. The warrant is immediately exercisable for 98,399 shares and expires on September 15, 2031.
NaNNo warrants had been exercised as of June 30, 2022.March 31, 2023. Any shares of the Company’s common stock issued upon exercise of the warrants are permitted to be settled in unregistered shares. The warrants are classified as equity as they meet all of the conditions under GAAP for equity classification. The Company has calculated the fair value of the warrants for initial measurement and date of funding of the Second Tranche Term Loan, and reassesses whether equity classification for the warrants is appropriate upon any changes to the warrants or capital structure, at each balance sheet date.
The Company determined that the fair value of the warrants issued in connection with the First Tranche Term Loan and Second Tranche Term Loan was $0.3 million and $0.2 million, respectively. The specific assumptions used to determine the initial measurement of fair value of the warrants were as follows:
| | | | | | | | | | | | |
| | First Tranche | | Second Tranche | | First Tranche | | Second Tranche | ||||
| | Term Loan | | Term Loan | | Term Loan | | Term Loan | ||||
| | | | | | | | | | | | |
Expected volatility |
| 95 | % | | 93 | % |
| 95 | % | | 93 | % |
Expected dividends |
| NaN | | | NaN | |
| None | | | None | |
Expected term |
| 5.00 Years | | | 5.00 Years | |
| 5.00 Years | | | 5.00 Years | |
Risk-free rate |
| 0.81 | % | | 2.10 | % |
| 0.81 | % | | 2.10 | % |
Derivative Liability
The Additional Warrants’ (as defined below) derivative liability will be remeasured each reporting period until settled or extinguished with subsequent changes in fair value recorded through other income (expense), net in the condensed statements of operations. The fair value of the Additional Warrants derivative liability was determined using a Black-Scholes option pricing model based on the same input assumptions above, with an additional assessment required for the probability that the Additional Tranche Term Loans will be funded which would trigger the issuance of the Additional Warrants.
The Company is conditionally obligated to issue a fixed number of additional warrants (“Additional Warrants”) in the amount of 344,398 shares upon the funding of the Second, Third and Fourth Tranche Term Loans with the same exercise price and contractual term. The contingent obligation to issue the Additional Warrants did not meet the derivative scope exception or equity classification criteria and were accounted for as a derivative liability. The contingently issuable Additional Warrants derivative liability had an initial fair value of $0.3 million and was recorded as additional debt discount and as a separate derivative liability within other long-term liabilities in the condensed balance sheet.
As a result of the funding of the Second Tranche Term Loan, the Company issued a warrant exercisable for 98,399 shares of the Company’s common stock at $2.29 per share. Upon issuing the warrants, the Company reclassified the related portion of its Additional Warrants derivative liability into equity. The remaining Additional Warrant Liability that remains outstanding was remeasured as of period end. The Company recorded a $0.1 million loss on change in fair value through other (income) expense, net in the condensed statement of operations.
1614
The following table provides a reconciliation of the beginning and ending balances for the Company’s Additional Warrants derivative liability recognized in connection with the term loan measured at fair value using significant unobservable inputs (Level 3):
| | | |
| | Additional | |
| | Warrants | |
Balance at December 31, 2021 | | $ | 331 |
Fair value of Additional Warrant Derivative Liability issued during the period | |
| — |
Change in fair value | | | (109) |
Derecognition | |
| (206) |
Balance at June 30, 2022 | | $ | 16 |
The specific assumptions used to determine the fair value of the warrants as of June 30, 2022, and December 31, 2021 were as follows:
| | | | | | |
| | June 30, | | December 31, | ||
| | 2022 | | 2021 | ||
| | | | | | |
Expected volatility |
| 97 | % | | 95 | % |
Expected dividends |
| NaN | | | NaN | |
Expected term |
| 5.00 Years | | | 5.00 Years | |
Risk-free rate |
| 3.01 | % | | 1.26 | % |
10.9. Net loss per share
Basic and diluted net loss per share attributable to common stockholders was calculated as follows for the three and six months ended June 30,March 31, 2023 and 2022 and 2021 (in thousands, except per share data):
| | | | | | | | | | | | | | | | | | | | |
| | Three months ended | | Six months ended | | | Three months ended | | ||||||||||||
| | June 30, | | June 30, | | | March 31, | | ||||||||||||
|
| 2022 |
| 2021 |
| 2022 |
| 2021 |
|
| 2023 |
| 2022 |
| ||||||
Numerator: | | | | | | | | | | | | | | | | | | | | |
Net loss attributable to common stockholders | | $ | (17,667) | | $ | (19,819) | | $ | (37,494) | | $ | (34,045) | | | $ | (21,066) | | $ | (19,827) | |
Denominator: | |
| | |
|
| |
| | |
|
| | |
| | |
|
| |
Weighted-average common shares outstanding—basic and diluted | |
| 67,716 | |
| 67,381 | |
| 67,716 | |
| 66,716 | | |
| 67,716 | |
| 67,716 | |
Net loss per share attributable to common stockholders—basic and diluted | | $ | (0.26) | | $ | (0.29) | | $ | (0.55) | | $ | (0.51) | | | $ | (0.31) | | $ | (0.29) | |
The following common stock equivalents outstanding as of June 30,March 31, 2023 and 2022, and 2021, were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive (in thousands):
| | | | | | | | |
| | As of | | As of | ||||
| | June 30, | | March 31, | ||||
|
| 2022 |
| 2021 |
| 2023 |
| 2022 |
Stock options issued and outstanding |
| 12,616 |
| 9,488 |
| 13,308 |
| 12,428 |
Warrants | | 246 | | — | | 246 | | 246 |
Total |
| 12,862 |
| 9,488 |
| 13,554 |
| 12,674 |
11.10. Income taxes
Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided if based upon the weight of available evidence, it is more likely than not that some or
17
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, including its net operating losses. Based on its history of operating losses, the Company believes that it is more likely than not that the benefit of its deferred tax assets will not be realized. Accordingly, the Company has provided a full valuation allowance for deferred tax assets as of June 30, 2022,March 31, 2023, and December 31, 2021.2022.
12.11. Commitments and contingencies
Contingencies
From time to time, the Company may be subject to occasional lawsuits, investigations, and claims arising out of the normal conduct of business. The Company has no significant pending or threatened litigation as of June 30, 2022.March 31, 2023.
Indemnifications
In the normal course of business, the Company enters into contracts that contain a variety of indemnifications with its employees, licensors, suppliers and service providers. Further, the Company indemnifies its directors and officers who are, or were, serving at the Company’s request in such capacities. The Company’s maximum exposure under these arrangements is unknown as of June 30, 2022.March 31, 2023. The Company does not anticipate recognizing any significant losses relating to these arrangements.
15
Operating Leases
The Company enters into various non-cancelable, operating lease agreements for its facilities and equipment in order to conduct its operations. The Company expenses rent on a straight-line basis over the life of the lease and has recorded deferred rentthe related right of use lease asset and lease liability on the Company’s balance sheets within both accrued expensessheets.
In 2021, the Company entered into an agreement with a contract manufacturing organization for manufacturing of materials for research and other current liabilities and other long-term liabilities.development purposes, including manufacturing of clinical trial materials. This agreement is valid for a period of five years, unless terminated earlier by the Company. The Company has determined that the agreement includes an embedded lease. There are no contractual minimum purchase obligations associated with this agreement. All payments associated with this agreement are variable.
Total rent expense inclusive of lease incentives, under all the operating lease agreements amounted to $0.3 million and $0.2 million for each of the three months ended June 30,March 31, 2023 and 2022, respectively.
Finance lease
On January 1, 2023, a clinical supply manufacturing agreement commenced with a minimum order commitment of $2.6 million and 2021, and $0.4 million for eacha minimum lease term of the six months ended June 30, 2022 and 2021.two years.
12. Restructuring and impairment charges
Employee termination benefits
Employees affected by the reduction in workforce (footnote 1) received involuntary termination benefits that provided a one-time benefit arrangement and have no requirements to provide future service. Costs associated with the reduction in workforce amounted to $1.4 million for the three months ended March 31, 2023 of which $1.3 million were recognized within research and development and $0.1 million were recognized within general and administrative in the condensed statement of operations.
Impairment of long-lived clinical supply manufacturing prepayments
The Company determined that its inability to advance its development programs indicated impairment on its clinical supply manufacturing prepayments and right of use assets in the amount of $8.2 million for the three months ended March 31, 2023, and recognized within research and development in the condensed statement of operations.
13. Subsequent events
Debt prepayment
On April 21, 2023, the Company completed voluntary prepayment of all outstanding principal, accrued and unpaid interest, fees, costs and expenses, equal to $27.5 million in the aggregate under the Loan and Security Agreement dated as of September 15, 2021. Upon receipt by the Lender, all obligations, covenants, debts and liabilities of the Company under the Loan Agreement were satisfied and discharged in full, and the Loan Agreement and all other documents entered into in connection with the Loan Agreement were terminated.
Dissolution
On May 4, 2023, following the conclusion of the Company's review of strategic alternatives, the Company's Board of Directors unanimously approved the dissolution and liquidation of the Company pursuant to a plan of complete liquidation and dissolution, which plan is subject to stockholder approval.
16
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion should be read in conjunction with our condensed financial statements and accompanying footnotes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited financial statements and related footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2021,2022, or Annual Report, filed with the Securities and Exchange Commission, or the SEC, on March 23, 2022.30, 2023.
Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. See “Special Note Regarding Forward-Looking Statements.” Because of many factors, including those factors set forth in the “Risk Factors” section of our Annual Report and in section Part II, Item 1A of this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.
Overview
We areUntil recently, we were a clinical-stage biopharmaceutical company focused on the discovery, development, and commercialization of novel, proprietary, synthetic small molecules for the treatment of nervous system disorders. We focushad focused our efforts on targeting and modulating N-methyl-D-aspartateN-methyl-D-aspartate receptors, or NMDArs, which are vital to normal and effective function of the brain and nervous system.
In February 2023, we discontinued the development of our product candidate, NYX-458, in cognitive impairment associated with Parkinson’s disease and dementia with Lewy bodies, following results from an exploratory Phase 2 clinical study in which NYX-458 did not demonstrate clinically meaningful improvements over placebo on the study’s efficacy endpoints. Subsequently, we implemented a strategic restructuring plan to preserve capital and reduce operating costs. We believe leveraging the therapeutic advantagesalso began exploration of strategic alternatives to maximize shareholder value and engaged Ladenburg Thalmann & Co. as our exclusive financial advisor to assist in that process. As part of the differentiated modulatoryrestructuring plan, we eliminated approximately 60% of our workforce and took other actions, including early termination of our then-ongoing Phase 2b study of our product candidate, NYX-783, in post-traumatic stress disorder, or PTSD, to analyze the data to date. In March 2023, we discontinued the development of NYX-783 in PTSD following an analysis of the available data that indicated NYX-783 did not demonstrate sufficient improvements on the study’s primary endpoint to support continued development of the program by the Company.
On May 4, 2023, following the completion of our review of strategic alternatives, our board of directors unanimously approved a plan of liquidation and dissolution of the Company, which plan is subject to stockholder approval.
In light of our planned dissolution, on May 10, 2023, we received written notice from The Nasdaq Stock Market LLC (“Nasdaq”) that, based upon the Staff’s determination that the Company is a “public shell” as that term is defined in Nasdaq Listing Rule 5101, and the Company’s non-compliance with certain board and committee composition listing requirements, the Company would be delisted at the opening of business on May 19, 2023 unless the Company timely requests a hearing before a Nasdaq Hearings Panel to address the deficiencies and present a plan to regain compliance. The Company does not plan to request a hearing, and expects that trading in the Company's stock will be suspended upon the opening of business on May 19, 2023. Thereafter, Nasdaq will file a Form 25-NSE with the SEC to formally delist the Company's stock. Nasdaq has not specified the exact date on which the Form 25-NSE will be filed.
1817
mechanism of our compounds will drive a paradigm shift in the treatment of disorders of the brain and nervous system. We are advancing a pipeline of distinct product candidates derived from our NMDAr modulator discovery platform, or the discovery platform. The following table summarizes the current status of our development programs as of the date of this quarterly report.
NYX-2925 is in clinical development for the treatment of centralized pain. On April 7, 2022, we announced that NYX-2925 did not achieve statistically significant separation from placebo on the primary endpoint in a Phase 2b study evaluating its effects in patients with painful diabetic peripheral neuropathy, or DPN, and that the study results do not currently point to a path forward in development for painful DPN. We are currently evaluating NYX-2925 in a Phase 2b study evaluating the efficacy and safety in 305 patients with fibromyalgia.
NYX-783 is in Phase 2b clinical development for the treatment of post-traumatic stress disorder, or PTSD. We are currently enrolling a Phase 2b study evaluating the efficacy and safety of a 50 mg dose of NYX-783 in approximately 300 patients with PTSD. On April 19, 2022, we announced a temporary pause of the initiation of a second Phase 2b study evaluating a 150 mg dose of NYX-783 in patients with PTSD. The 150 mg study had not enrolled any patients at the time of the announcement and the study initiation was paused to conserve capital and extend operational runway.
NYX-458 is in clinical development for the treatment of cognitive impairment associated with neurodegenerative conditions. We are currently enrolling a Phase 2 exploratory study evaluating the safety and potential cognitive benefits of NYX-458 in approximately 100 patients with cognitive impairment associated with Parkinson’s disease or dementia with Lewy bodies.
The COVID-19 pandemic has and could further adversely impact our clinical and/or preclinical studies, as well as our business operations. We continue to evaluate the impact of the COVID-19 pandemic on patients and our employees, as well as our operations and the operations of our business partners and healthcare communities. In response to the COVID-19 pandemic, we have implemented policies to mitigate the risk of exposure to COVID-19 by our personnel, including a work-from-home policy applicable to the majority of our personnel and a phased approach to bringing personnel back to our locations over time. However, the ultimate impact of the COVID-19 pandemic on our business operations is highly uncertain and subject to change and will depend on future developments which are difficult to predict.
Since our inception in June 2015, we have never generated revenue from the sale of our products and have incurred significant net losses. Our nominal revenues have been primarily derived from a research collaboration agreement with Allergan plc, or Allergan, a development services agreement with Allergan, and research and development grants from the U.S. government. While these revenues offset a small portion of the costs associated with our early-stage research and discovery efforts, we do not rely on these revenues to fund our operations. In connection with the contractual
19
conclusion of our research collaboration with Allergan in February 2021, we do not expect to receive further revenues from this collaboration.
From our inception through June 30, 2022, we have raised an aggregate of $135.0 million of gross proceeds from sales of our convertible preferred stock, $117.8 million of gross proceeds from our initial public offering, or IPO, $104.4 million of gross proceeds from our follow-on public offerings and our “at the market” offering program, or the ATM Offering, and $25.0 million of gross proceeds from our Loan Agreement. See “Liquidity and capital resources.” Our net losses were $74.9 million and $50.1 million for the years ended December 31, 2021 and 2020, respectively, and $37.5 million and $34.0 million for the six months ended June 30, 2022 and 2021, respectively. As of June 30, 2022, we had an accumulated deficit of $325.4 million. Our net losses may fluctuate significantly from quarter to quarter and year to year. We expect to continue to incur significant expenses and operating losses for the foreseeable future. We anticipate that our expenses will continue to increase in connection with our ongoing activities.
We believe that our available funds will be sufficient to fund our operations for at least the next twelve months. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. We do not expect to generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for a product candidate, which we expect will take a number of years and the outcome of which is uncertain, or enter into collaborative agreements with third parties, the timing of which is largely beyond our control and may never occur. To fund our current and future operating plans, we will need additional capital, which we may obtain through one or more equity offerings, debt financings, or other third-party funding, including potential strategic alliances and licensing or collaboration arrangements. We may, however, be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all, including as a result of COVID-19. Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition and our ability to develop our current product candidates, or any additional product candidates, if developed. The amount and timing of our future funding requirements will depend on many factors, including the impacts of COVID-19, our ability to timely and successfully enroll subjects in our clinical studies, and the pace and results of our preclinical and clinical development efforts. We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.
Financial operations overview
Revenues
We have not generated any revenue from product sales. We are unable to predict when, if ever, material net cash inflows will commence from sales of our products, if approved. Our revenue to date has been primarily derived from a research collaboration agreement with Allergan (now a subsidiary of AbbVie), under which the jointly funded research activities and option exercise period, including the associated payments by Allergan, came to their contractual conclusion in August 2020 and February 2021, respectively; a development services agreement with Allergan, which was put in place to continue certain development activities for a pre-determined period of time following Allergan's acquisition of Naurex Inc.; and research and development grants from the U.S. government that have no repayment or royalty obligations and none of which are currently outstanding.
Operating expenses
Research and development expenses
Research and development activities account for a significant portion of our operating expenses. We expense research and development costs as incurred. Research and development expenses consist of costs incurred in connection with the development of our product candidates, including:
● | fees paid to consultants, sponsored researchers, contract manufacturing organizations, or CMOs, and contract research organizations, or CROs, including in connection with our preclinical and clinical studies, and other related clinical study fees, such as for investigator grants, patient screening, laboratory work, clinical study database management, and statistical compilation and analysis; |
20
● | costs related to acquiring and maintaining preclinical and clinical study materials and facilities; |
● | costs related to compliance with regulatory requirements; and |
● | costs related to salaries, bonuses, and other compensation, including stock-based compensation, for employees in research and development functions. |
At this time, we cannot reasonably estimate or know the nature, timing, and costs of the efforts that will be necessary to complete the development of our product candidates. This is due to the numerous risks and uncertainties associated with developing such product candidates, including the uncertainty related to:
A change in the outcome of any of these variables with respect to the development of any of our product candidates could significantly change the costs, timing, and viability associated with the development of that product candidate.
We expect our research and development expenses to increase over the next several years as we continue to implement our business strategy, which includes advancing our product candidates into and through clinical development, expanding our research and development efforts, seeking regulatory approvals for any product candidates for which we successfully complete clinical studies, accessing and developing additional product candidates, and hiring additional personnel to support our research and development efforts. In addition, product candidates in later stages of clinical development generally incur higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical studies. As such, we expect our research and development expenses to increase as our product candidates advance into later stages of clinical development.
General and administrative expenses
General and administrative expenses consist primarily of salaries and related costs, including stock-based compensation. General and administrative expenses also include rent as well as professional fees for legal, consulting, accounting, and audit services.
InRestructuring and Impairment Charges
During the future,three months ended March 31, 2023, we expectundertook certain operational and organizational steps in connection with a strategic reorganization plan and strategic alternatives, along with related cost-saving measures that we initiated in the quarter. These measures included discontinuing the ongoing clinical trials of NYX-783 for the treatment of PTSD, NYX-458 for the treatment of Parkinson’s disease and dementia with Lewy bodies and reducing our general and administrative expenses will increase as we continue to support our research and development and the potential commercialization of our product candidates, if approved.overall workforce.
Other (income) expense, net, and interest expense
Other (income) expense, net and interest expense consists primarily of the interest income earned on our cash and cash equivalents and interest expense on our Loan Agreement, and includes changes in fair value of the derivative liability associated with our obligation to issue additional warrants in connection with subsequent draws under our Loan Agreement.
2118
Results of operations
Comparison of the three months ended June 30,March 31, 2023 and 2022 and 2021
The following table summarizes our results of operations for the three months ended June 30,March 31, 2023 and 2022 and 2021 (in thousands):
| | | | | | | | | | | | | | | | | | |
|
| Three months |
| | |
| Year |
| | | ||||||||
| | ended June 30, | | Increase | | ended March 31, | | Increase | ||||||||||
|
| 2022 |
| 2021 |
| (Decrease) |
| 2023 |
| 2022 |
| (Decrease) | ||||||
Operating expenses: | |
|
| |
| | |
|
| |
|
| |
| | |
|
|
Research and development | |
| 11,909 | |
| 14,796 | |
| (2,887) | | | 16,093 | | | 13,602 | | | 2,491 |
General and administrative | |
| 5,196 | |
| 5,070 | |
| 126 | |
| 4,229 | |
| 5,777 | |
| (1,548) |
Total operating expenses | |
| 17,105 | |
| 19,866 | |
| (2,761) | |
| 20,322 | |
| 19,379 | |
| 943 |
Loss from operations | |
| (17,105) | |
| (19,866) | |
| (2,761) | |
| (20,322) | |
| (19,379) | |
| 943 |
Other (income) expense, net | |
| (195) | |
| (47) | |
| (148) | |
| (286) | |
| (29) | |
| 257 |
Interest expense | | | 757 | | | — | | | 757 | | | 1,030 | | | 477 | | | 553 |
Net loss and comprehensive loss | | $ | (17,667) | | $ | (19,819) | | $ | (2,152) | | $ | (21,066) | | $ | (19,827) | | $ | 1,239 |
Research and development expenses
The following table summarizes our research and development expenses incurred during the three months ended June 30,March 31, 2023 and 2022 and 2021 (in thousands):
| | | | | | | | | | | | | | | | | | |
|
| Three months |
| | |
| Year |
| | | ||||||||
| | ended June 30, | | Increase | | ended March 31, | | Increase | ||||||||||
|
| 2022 |
| 2021 |
| (Decrease) |
| 2023 |
| 2022 |
| (Decrease) | ||||||
NYX-2925 | | $ | 2,357 | | $ | 10,248 | | $ | (7,891) | | $ | 472 | | $ | 4,529 | | $ | (4,057) |
NYX-783 | |
| 4,154 | |
| 391 | |
| 3,763 | |
| 3,126 | |
| 4,551 | |
| (1,425) |
NYX-458 | |
| 1,924 | |
| 1,152 | |
| 772 | |
| 1,197 | |
| 1,460 | |
| (263) |
Impairment charges | | | 8,199 | | | — | | | 8,199 | |||||||||
Preclinical research and discovery programs | |
| 1,148 | |
| 450 | |
| 698 | |
| 444 | |
| 860 | |
| (416) |
Personnel and related costs | |
| 2,326 | |
| 2,555 | |
| (229) | |
| 2,655 | |
| 2,202 | |
| 453 |
Total research and development expenses | | $ | 11,909 | | $ | 14,796 | | $ | (2,887) | | $ | 16,093 | | $ | 13,602 | | $ | 2,491 |
Research and development expenses were $11.9$16.1 million for the three months ended June 30, 2022,March 31, 2023, compared to $14.8$13.6 million for the three months ended June 30, 2021.March 31, 2022. The net decreaseincrease of approximately $2.9$2.5 million was primarily due to the following:
● | a decrease of approximately |
● | a decrease of approximately $0.3 million in clinical, regulatory, and drug product costs related to the conduct of Phase 2 study of NYX-458 in Parkinson’s disease and dementia with Lewy bodies; and |
● | a decrease of approximately $1.4 million in clinical, regulatory, and drug product costs related to the conduct of Phase 2b |
● | and increase of approximately $8.2 million related to impairment charges associated with |
General and administrative expense
General and administrative expenses were $5.1$4.2 million and $5.8 million for each of the three months ended June 30,March 31, 2023 and March 31, 2022, and June 30, 2021, respectively.
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Other (income) expense, net
We recorded $0.2$0.3 million of other income for the three months ended June 30, 2022,March 31, 2023, compared to less than $0.1 million of other income for the three months ended June 30, 2021.March 31, 2022. This was primarily driven by a change in fair value of the derivative liability.
Interest expense
Interest expense was $0.8$1.0 million for the three months ended June 30, 2022, dueMarch 31, 2023, compared to $0.5 million for the three months ended March 31, 2022. This was driven by interest expense associated with our Loan Agreement. We did not incur interest expense in the three months ended June 30, 2021.
Comparison of the six months ended June 30, 2022Agreement and 2021
The following table summarizes our results of operations for the six months ended June 30, 2022 and 2021 (in thousands):
| | | | | | | | | |
|
| Six months |
| | | ||||
| | ended June 30, | | Increase | |||||
|
| 2022 |
| 2021 |
| (Decrease) | |||
Collaboration revenue | |
| — | |
| 1,000 | |
| (1,000) |
Operating expenses: | |
|
| |
|
| |
|
|
Research and development | |
| 25,511 | |
| 25,110 | |
| 401 |
General and administrative | |
| 10,973 | |
| 10,046 | |
| 927 |
Total operating expenses | |
| 36,484 | |
| 35,156 | |
| 1,328 |
Loss from operations | |
| (36,484) | |
| (34,156) | |
| 2,328 |
Other (income) expense, net | | | (224) | | | (111) | | | (113) |
Interest expense | |
| 1,234 | |
| — | |
| 1,234 |
Net loss and comprehensive loss | | $ | (37,494) | | $ | (34,045) | | $ | 3,449 |
Collaboration revenue
Collaboration revenue was $0.0 million and $1.0 million for the six months ended June 30, 2022 and 2021, respectively, and was attributable to the research collaboration with Allergan. The payments by Allergan associated with the jointly funded research activities and option exercise period under the research collaboration came to their contractual conclusion in August 2020 and February 2021, respectively.
Research and development expenses
The following table summarizes our research and development expenses incurred during the six months ended June 30, 2022 and 2021 (in thousands):
| | | | | | | | | |
|
| Six months |
| | | ||||
| | ended June 30, | | Increase | |||||
|
| 2022 |
| 2021 |
| (Decrease) | |||
NYX-2925 | | $ | 6,886 | | $ | 16,027 | | $ | (9,141) |
NYX-783 | |
| 8,705 | |
| 1,168 | |
| 7,537 |
NYX-458 | |
| 3,384 | |
| 1,688 | |
| 1,696 |
Preclinical research and discovery programs | |
| 2,008 | |
| 1,343 | |
| 665 |
Personnel and related costs | |
| 4,528 | |
| 4,884 | |
| (356) |
Total research and development expenses | | $ | 25,511 | | $ | 25,110 | | $ | 401 |
23
Research and development expenses were $25.5 million for the six months ended June 30, 2022, compared to $25.1 million for the six months ended June 30, 2021. The increase of approximately $0.4 million was primarily due to the following:
General and administrative expenses
General and administrative expenses were $10.9 million for the six months ended June 30, 2022, compared to $10.0 million for the six months ended June 30, 2021.
Other (income) expense, net
We recorded $0.2 million of other income for the six months ended June 30, 2022, compared to $0.1 million of other income for the six months ended June 30, 2021. This was primarily driven by a change in fair value of the derivative liability.
Interest expense
Interest expense was $1.2 million for the six months ended June 30, 2022, due to interest expense associated with our Loan Agreement. We did not incur interest expense in the six months ended June 30, 2021.finance lease.
Liquidity and capital resources
From our inception through June 30, 2022,March 31, 2023, we have incurred significant operating losses and have funded our operations to date through proceeds from collaborations, grants, sales of convertible preferred stock, IPO and follow-on public offerings, our ATM Offerings, and our debt financing. We have generated limited revenue to date from a research collaboration agreement with Allergan, a development services agreement with Allergan, and research and development grants from the U.S. government. The jointly funded research activities and option exercise period under the research collaboration agreement with Allergan, as well as associated payments by Allergan to us, came to their contractual conclusion in August 2020 and February 2021, respectively. We expect to continue to generate operating losses and negative operating cash flows for the foreseeable future, including through the execution of the Plan of Dissolution if approved by our stockholders.
On March 24, 2022, we entered into an amendment to the 2021 Sales Agreement (the “2022 Sales Agreement”) with Cowen pursuant to which the Company may offer and sell shares of its common stock with an aggregate offering price of up to $75.0 million under an “at the market” offering program (the “2022 ATM Offering”) and which supersedes the 2021 Sales Agreement and 2021 ATM Offering. The 2022 Sales Agreement provides that Cowen will be entitled to a sales commission equal to 3.0% of the gross sales price per share of all shares sold under the 2022 ATM Offering. To date, no shares of common stock have been issued and sold pursuant to the 2022 Sales Agreement.
On September 15, 2021, we entered into a loan and security agreement with K2 HealthVentures LLC or Loan Agreement.(the “Loan Agreement”). The Loan Agreement providesprovided up to $50.0 million principal in term loans, $15.0 million of which was funded at the time we entered into the agreement and $10.0 million of which was funded on March 14, 2022. Interest on the outstanding loan balance will accrueaccrued at a variable rate equal to the greater of (i) 7.95% and (ii) the prime rate as published in the Wall Street Journal plus 4.70%. We arewere required to make monthly interest-only payments through September 2023. If we drawdrew the third tranche, the interest-only period will bewould have been extended through October 2024.
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Subsequent to the interest-only period, we arewere required to make equal monthly principal payments plus any accrued interest until the loans mature in September 2025. Upon final payment or prepayment of the loans, we arewere required to pay a final payment equal to 6.45% of the loans borrowed. We havehad the option to prepay the loans in whole, subject to a prepayment fee of 3% if the payment occursoccurred on or before 24 months after the initial funding date, 2% if the prepayment occursoccurred more than 24 months after, but on or before 36 months after the initial funding date, or 1% if the prepayment occursoccurred more than 36 months after the initial funding date. We arewere obligated to pay a loan origination fee of 0.8% of each term loan that is funded under the Loan Agreement. The Loan Agreement also restrictsrestricted certain activities, such as disposing of our business or certain assets, incurring additional debt or liens or making payments on other debt, making certain investments and declaring dividends, acquiring or merging with another entity, engaging in transactions with affiliates or encumbering intellectual property, among others.On April 21, 2023, the Company completed voluntary prepayment under the Loan Agreement, and the Loan Agreement and all other documents entered into in connection with the Loan Agreement were terminated.
As of June 30, 2022,March 31, 2023, we had cash and cash equivalents of $85.3$44.6 million. We invest our cash equivalents in liquid money market accounts.
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In February 2023, we began implementation of a strategic restructuring plan to preserve capital and reduce operating costs. On May 4, 2023, following the completion of our review of strategic alternatives, our board of directors unanimously approved a plan of liquidation and dissolution of the Company, which plan is subject to stockholder approval. In connection with its restructuring plan and plan of dissolution, in April and May 2023, we made payments of approximately $5.0 million in the aggregate to fulfill and/or settle certain known financial obligations to terminated employees, vendors, auditors, and other creditors. These payments were incremental to our $27.5 million voluntary prepayment on April 21, 2023, of all outstanding principal, accrued and unpaid interest, fees, costs and expenses under the loan and security agreement with K2 HealthVentures. In addition, we expect to incur additional expenses and make additional payments associated with the plan of dissolution in the future, including, but not limited to, legal fees; insurance premiums; taxes; expenses incurred by the accounting firm of Verdolino & Lowey, P.C., which we have engaged to assist in the dissolution process; and other expenses related to the wind-down of the Company’s operations.
We cannot predict the ultimate amount of our liabilities, as uncertainties as to the ultimate amount of our operating costs and amounts to be reserved for claims, obligations and provisions during the liquidation and winding-up process, and the related timing to complete such transactions make it impossible to predict with certainty the actual net cash amount, if any, that will ultimately be available if the stockholders approve the plan of liquidation and dissolution, which they may not. Examples of uncertainties that could reduce our cash include unanticipated costs relating to the defense, satisfaction or settlement of lawsuits or other claims threatened against us or our directors or officers; amounts necessary to resolve claims of any creditors or other third parties; and delays in the liquidation and dissolution or other winding up process.
Funding requirements
Our primary uses of capital are, and we expect will continue to be,have been research and development activities, compensation and related expenses, product manufacturing, laboratory and related supplies, legal, and other regulatory expenses, patent prosecution filing and maintenance costs for our licensed intellectual property, and general overhead costs. We expect to continue incurring significant expenses and operating losses for the foreseeable future. In addition, since the closing of our IPO, we have incurred, and expect to continue to incur certain compensation and related expenses, insurance expenses, general overhead costs, associated with operating as a public company. We anticipate that our expenses will increaseand additional administrative costs in connection with our ongoing activities as we:the plan of liquidation and dissolution.
Outlook
Based on ourWe are not able to perform meaningful research andor development plans and our timing expectations related towithout obtaining additional sources of financing. On May 4, 2023, following the progresscompletion of our programs,review of strategic alternatives, our board of directors unanimously approved a plan of liquidation and dissolution of the Company, which plan is subject to stockholder approval. These conditions and events raise substantial doubt about our ability to continue as a going concern.
In February 2023, in connection with our strategic restructuring plan, we expect that our cash and cash equivalents as of June 30, 2022 will be sufficient to fund our operations for at least the next 12 months. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.
began discontinuing all clinical programs. We do not expect to generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for a product candidate, which we expect will take a number of years and the outcome of which is uncertain, or enter into collaborative agreements with third parties, the timing of which is largely beyond our control and may never occur. We will continue to require additional capital to develop our product candidates and fund operations for the foreseeable future, which we may obtain through one or more equity offerings, debt financings, or other third-party funding, including potential strategic alliances and licensing or collaboration arrangements. We may, however, be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all, including as a result of the COVID-19 pandemic. Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition and our ability to develop our current product candidates, or any additional product candidates, if developed. The amount and timing of our future funding requirements will depend on many factors, including the effects of the COVID-19 pandemic, our ability to timely and successfully enroll subjects in our clinical studies and the pace and results of our preclinical and clinical development efforts.sales. We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.
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Cash flows
The following table summarizes our sources and uses of cash for each of the three months ended June 30,March 31, 2023 and 2022 and 2021 (in thousands):
| | | | | | | | | | | | |
| | Six months ended | | Three months ended | ||||||||
| | June 30, | | March 31, | ||||||||
|
| 2022 |
| 2021 |
| 2023 |
| 2022 | ||||
Net cash provided by (used in): | | | | | | | | | | | | |
Operating activities | | $ | (30,682) | | $ | (25,755) | | $ | (11,365) | | $ | (15,924) |
Investing activities | |
| — | | | 121 | |
| — | | | — |
Financing activities | |
| 9,827 | | | 13,832 | |
| (267) | | | 9,960 |
Net (decrease) increase in cash, cash equivalents and restricted cash | | $ | (20,855) | | $ | (11,802) | ||||||
Net decrease in cash, cash equivalents and restricted cash | | $ | (11,632) | | $ | (5,964) |
Operating activities
For the sixthree months ended June 30, 2022,March 31, 2023, compared to the same period in 2021,2022, the $4.9$4.6 million increasedecrease in net cash used in operating activities was primarily due to a $3.4 millionour increase in our net loss year over year, driven mostly by lower collaboration revenue, higher research and development expenses, and offset by a decrease in the use of cash of $0.9 million due to changes in working capital largely drivenof $2.4 million offset by the timingnon-cash charges of cash paid$6.8 million related to support ourimpairment charges in clinical research programssupply agreements and a $0.6 million decrease in non-cash expenses related primarily to stock-based compensation.
InvestingFinancing activities
For the sixthree months ended June 30, 2022,March 31, 2023, compared to the same period in 2021,2022, the $0.1 million decrease in net cash provided by investing activities was primarily due to proceeds from disposal of laboratory equipment in 2021.
Financing activities
For the six months ended June 30, 2022, compared to the same period in 2021, the $4.0$10.2 million decrease in net cash provided by financing activities was primarily due to $14.6 million of net proceeds received from our at the market offering in the 2021 period compared to $9.8 million of net proceeds received from our loan and security agreementLoan Agreement in the 2022 period.period compared to $0.3 million principal payment of finance lease liability in the three months ended March 31, 2023.
Critical accounting policies and significant judgments and estimates
This discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with United States generally accepted accounting principles. The preparation of our financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities, revenue, costs and expenses, and related disclosures. Our critical accounting policies are described in the notes of our condensed financial statements included herein and our critical accounting estimates are discussed under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations— Critical Accounting Policies and Significant Judgments and Estimates” in our Annual Report. There were no material changes to our critical accounting policies or critical accounting estimates through June 30, 2022,March 31, 2023, from those discussed in our Annual Report.
Recent accounting pronouncements
See Note 2 to our condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q.
JOBS Act accounting election
Under Section 107(b) of the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act, an “emerging growth company” can delay the adoption of new or revised accounting standards until such time as those standards
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would apply to private companies. We intend to rely on this exemption. There are other exemptions and reduced reporting requirements provided by the JOBS Act that we are currently evaluating. For example, as an “emerging growth company,” we are exempt from Sections 14A(a) and (b) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would otherwise require us to (1) submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay,” “say-on-frequency,” and “golden parachutes;” and (2) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of our chief executive officer’s compensation to our median employee compensation. We also intend to rely on an exemption from the rule requiring us to provide an auditor’s attestation report on our internal controls over financial
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reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002. We will continue to remain an “emerging growth company” until the earliest of the following: (1) December 31, 2023; (2) the last day of the fiscal year in which our total annual gross revenue is equal to or more than $1.07$1.235 billion; (3) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (4) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Information requested by this Item 3. Quantitative and Qualitative Disclosures about Market Risk is not applicable as we are electing scaled disclosure requirements available to smaller reporting companies with respect to this Item.
Item 4. Controls and Procedures.
The Company has established disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to management, including the principal executive officer (our Chief Executive Officer) and principal financial officer (our Chief Financial Officer), to allow timely decisions regarding required disclosure. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of disclosure controls and procedures
Our management, with the participation of our Chief Executive Officer, and Chief Financial Officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures have been designed to provide reasonable assurance of achieving their objectives. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective at the reasonable assurance level as of June 30, 2022.March 31, 2023.
Changes in internal control over financial reporting
There were no changesIn the first quarter of 2023, we executed a significant separation of workforce and obtained written resignations of board of directors and the executive management team. The control procedures which are normally in ourplace with separate individuals have necessarily been combined across a significantly reduced staff. While we believe that internal control over financial reporting (as defined in Rules 13a-15(f)controls are intact and 15d-15(f) undercarefully monitored, the Exchange Act) that occurred duringabsence of an external members of the six months ended June 30, 2022 that have materially affected, or are reasonably likelyaudit committee, the absence of independent board members, and the combination of staff functions does expose us to materially affect, ourrisk associated with internal control over financial reporting.controls.
As of June 30, 2022, we have not experienced any material impact to our internal control over financial reporting due to the COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 pandemic on our internal controls to minimize the impact on their design and operating effectiveness.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may be involved in lawsuits, claims, investigations and proceedings, consisting of intellectual property, commercial, employment and other matters which arise in the ordinary course of business. While the outcome of any such proceedings cannot be predicted with certainty, as of June 30, 2022,March 31, 2023, we were not party to any legal proceedings that we would expect to have a material adverse impact on our financial position, results of operations, or cash flow.
Item 1A. Risk Factors.
The discussion of our business and operations in this report should be read together with the risk factors contained below, in Item 1A of our Annual Report, and in our other filings with the SEC, which describe various risks and uncertainties to which we are or may become subject. These risks and uncertainties have the potential to affect our business, financial condition, results of operations, cash flows, strategies, or prospects in a material and adverse manner. Except as noted below, thereThere are no material changes from the risk factors as previously disclosed in our Annual Report.Report, other than the risk factors set forth below.
We cannot predict the timing of a distribution to stockholders.
Our current intention is that, if approved by our stockholders, a certificate of dissolution would be filed with the State of Delaware promptly after such approval; however, the decision of whether or not to proceed with the plan of dissolution and liquidation (the “Dissolution”) will be made by the Board in its sole discretion. No further stockholder approval would be required to effect the Dissolution. However, if the Board determines that the Dissolution is not in our best interest or the best interest of our stockholders, the Board may, failin its sole discretion, abandon the Dissolution or may amend or modify the Plan of Dissolution to continuethe extent permitted by Delaware law without the necessity of further stockholder approval. After the Certificate of Dissolution has been filed, revocation of the Dissolution would require stockholder approval under Delaware law.
Under Delaware law, before a dissolved corporation may make any distribution to meetits stockholders, it must pay or make reasonable provision to pay all of its claims and obligations, including all contingent, conditional or unmatured contractual claims known to the listing standards of Nasdaqcorporation. Furthermore, we may be subject to potential liabilities relating to indemnification obligations, if any, to third parties or to our current and former officers and directors. It might take significant time to resolve these matters, and as a result we are unable to predict the timing of distributions, if any are made, to our common stock maystockholders.
We cannot assure you as to the amount of distributions, if any, to be delisted, which could havemade to our stockholders.
We cannot predict with certainty the amount of distributions, if any, to our stockholders. Such distributions will not occur until after a material adverse effect oncertificate of dissolution is filed, and we cannot predict the liquiditytiming or amount of any such distributions, as uncertainties as to the ultimate amount of our common stock.liabilities, the operating costs and amounts to be set aside for claims, obligations and provisions during the liquidation and winding-up process, and the related timing to complete such transactions make it impossible to predict with certainty the actual net cash amount that will ultimately be available for distribution to stockholders or the timing of any such distributions. Examples of uncertainties that could reduce the value of distributions to our stockholders include: unanticipated costs relating to the defense, satisfaction or settlement of lawsuits or other claims threatened against us or our directors or officers; amounts necessary to resolve claims of any creditors or other third parties; and delays in the liquidation and dissolution or other winding up process.
Our common stockIn addition, as we wind down, we will continue to incur expenses from operations, including directors’ and officers’ insurance; payments to service providers and any continuing employees or consultants; taxes; legal, accounting and consulting fees and expenses related to our filing obligations with the SEC, which will reduce any amounts available for distribution to our stockholders. As a result, we cannot assure you as to any amounts to be distributed to our stockholders
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if the Board proceeds with the Dissolution. If our stockholders do not approve the Dissolution Proposal, we will not be able to proceed with the Dissolution and no liquidating distributions will be made in connection therewith.
It is the current intent of the Board, assuming approval of the Dissolution, that any cash will first be used to pay our outstanding current liabilities and then will be retained to pay ongoing corporate and administrative costs and expenses associated with winding down the company, liabilities and potential liabilities relating to or arising out of any litigation matters and potential liabilities relating to our indemnification obligations, if any, to our service providers, or to our current and former officers and directors.
The Board will determine, in its sole discretion, the timing of the distribution of the remaining amounts, if any, to our stockholders in the Dissolution. We can provide no assurance as to if or when any such distribution will be made, and we cannot provide any assurance as to the amount to be paid to stockholders in any such distribution, if one is made. Stockholders may receive substantially less than the amount that we currently trades on The Nasdaq Global Select Market. The Nasdaq Stock Market LLC has requirementsestimate that a company must meetthey may receive, or they may receive no distribution at all. To the extent funds are available for distribution to stockholders, the Board intends to seek to distribute such funds to our stockholders as quickly as possible, as permitted by the DGCL, and intends to take all reasonable actions to optimize the distributable value to our stockholders.
If our stockholders do not approve the Dissolution, we would not be able to continue our business operations.
On March 30, 2023, we announced that, in order to remain listed on Nasdaq. In particular, Nasdaq rules require us to maintain a minimum closing bid price of $1.00 per sharelight of our common stock. Iffinancial condition and negative results from our clinical trials, our Board had approved a plan to review strategic alternatives, including a sale or merger of the closing bid priceCompany or one or more sales of our common stock wereassets, and to significantly and immediately reduce our operations (the “Strategic Plan”). In connection with the Strategic Plan, we terminated all but a core team of individuals to lead the strategic review process, and most individuals that remain below $1.00 per share for 30 consecutive trading days,are doing so on a part-time and consulting basis. After an extensive review of strategic alternatives, we have been unable to identify a merger partner or wepurchaser of our Company or our assets. If our stockholders do not meet other listing requirements, weapprove the Dissolution, the Board will continue to explore what, if any, alternatives are available for the future of the Company in light of its discontinued business activities; however, those alternatives are likely limited to seeking voluntary dissolution at a later time with potentially diminished assets, seeking bankruptcy protection (should our net assets decline to levels that would failrequire such action) or investing our cash in another operating business. It is unlikely that these alternatives would result in greater stockholder value than the Dissolution.
The Board may determine not to be in compliance with Nasdaq’s listing standards. The Nasdaq Stock Market LLC initiated the delisting process by issuing a deficiency letter on June 9, 2022, notifying us that the bid price for our common stock had closed below the $1.00 per share minimum for 30 consecutive trading days, and providing us a period of 180 calendar days to regain complianceproceed with the minimum bid price requirement. In orderDissolution.
Even if the Dissolution is approved by our stockholders, the Board may determine in its sole discretion not to regain compliance, shares of our common stock would need to maintain a minimum closing bid price of at least $1.00 per share for a minimum of 10 consecutive trading days. In addition, we may be unable to meet other applicable Nasdaq listing requirements, including maintaining minimum levels of stockholders’ equity or market values of our common stock, in which case our common stock could be delisted.proceed with the Dissolution. If our common stock wereBoard elects to pursue any alternative to the Dissolution, our stockholders may not receive any of the funds that might otherwise be delisted,available for distribution to our stockholders. After a certificate of dissolution has been filed, revocation of the liquidity of our common stockDissolution would be adversely affected, and the market price of our common stock could decrease.require stockholder approval under Delaware law.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Unregistered Sales of Equity Securities
Not applicable.
Use of Proceeds
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
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Item 6. Exhibits.
EXHIBIT INDEX
| | |
Exhibit |
| Description |
2.1 | | |
3.1 | | |
3.2 | | |
31.1* | | |
31.2* | | |
32.1* | | |
101.INS | | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH | | Inline XBRL Taxonomy Extension Schema Document |
101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | | Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 | | Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
* Filed herewith.
+ The certifications furnished in Exhibit 32.1 hereto are deemed to be furnished with this Quarterly Report on Form 10-Q and will not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the Registrant specifically incorporates it by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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| APTINYX INC. | |
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Date: | By: | /s/ Andrew Kidd |
| | Andrew Kidd |
| | Chief Executive Officer |
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