10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

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

For the quarterly period ended September 30, 2022

OR

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

For the transition period from ___________________ to ___________________

Commission File Number: 001-41365

 

HILLEVAX, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

85-0545060

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

75 State Street, Suite 100 - #9995

Boston, Massachusetts

02109

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (617) 213-5054

 

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, $0.0001 par value per share

 

HLVX

 

Nasdaq Global Select Market

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 November 8, 2022, the registrant had 33,345,260 shares of common stock, $0.0001 par value per share, outstanding.

 

 

 

 


 

Table of Contents

 

 

 

Page

 

 

 

PART I.

FINANCIAL INFORMATION

1

 

 

 

Item 1.

Financial Statements (Unaudited)

1

 

Condensed Consolidated Balance Sheets

1

 

Condensed Consolidated Statements of Operations

2

 

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

3

 

Condensed Consolidated Statements of Cash Flows

5

 

Notes to Condensed Consolidated Financial Statements

6

Item 2.

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

19

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

29

Item 4.

Controls and Procedures

29

 

 

 

PART II.

OTHER INFORMATION

30

 

 

 

Item 1.

Legal Proceedings

30

Item 1A.

Risk Factors

30

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

31

Item 3.

Defaults Upon Senior Securities

31

Item 4.

Mine Safety Disclosures

31

Item 5.

Other Information

31

Item 6.

Exhibits

32

Signatures

33

 

 

i


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

HilleVax, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and par value data)

(unaudited)

 

 

 

September 30,
2022

 

 

December 31,
2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

292,060

 

 

$

124,566

 

Prepaid expenses and other current assets

 

 

8,094

 

 

 

141

 

Total current assets

 

 

300,154

 

 

 

124,707

 

Property and equipment, net

 

 

600

 

 

 

42

 

Operating lease right-of-use assets

 

 

19,670

 

 

 

189

 

Restricted cash

 

 

1,631

 

 

 

 

Other assets

 

 

21

 

 

 

2,221

 

Total assets

 

$

322,076

 

 

$

127,159

 

Liabilities and Stockholders’ Equity (Deficit)

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable (includes related party amounts of $9 and $22,
   respectively)

 

$

875

 

 

$

1,024

 

Accrued expenses (includes related party amounts of $787 and $4,911,
   respectively)

 

 

7,699

 

 

 

9,164

 

Accrued interest (includes related party amounts of $0 and $723,
   respectively)

 

 

25

 

 

 

2,821

 

Convertible promissory notes payable at fair value (includes related party
   amounts of $
0 and $40,580, respectively)

 

 

 

 

 

158,276

 

Current portion of operating lease liability

 

 

34

 

 

 

32

 

Warrant liabilities - related party

 

 

 

 

 

56,445

 

Total current liabilities

 

 

8,633

 

 

 

227,762

 

Operating lease liability, net of current portion

 

 

21,134

 

 

 

153

 

Long-term debt, net of debt discount

 

 

4,737

 

 

 

 

Other long-term liabilities

 

 

379

 

 

 

1

 

Total liabilities

 

 

34,883

 

 

 

227,916

 

Commitments and contingencies (Note 3)

 

 

 

 

 

 

Stockholders’ equity (deficit):

 

 

 

 

 

 

Preferred stock, $0.0001 par value; authorized shares— 50,000,000 and
  
0 at September 30, 2022 and December 31, 2021, respectively; no shares
  issued and outstanding at September 30, 2022 and December 31, 2021

 

 

 

 

 

 

Common stock, $0.0001 par value; authorized shares— 500,000,000 and
 
50,000,000 at September 30, 2022 and December 31, 2021, respectively;
 issued shares—
33,345,260 and 9,225,321 at September 30, 2022 and
 December 31, 2021, respectively; outstanding shares—
31,563,386 and
 
6,599,886 at September 30, 2022 and December 31, 2021, respectively

 

 

3

 

 

 

1

 

Additional paid-in capital

 

 

530,995

 

 

 

4,426

 

Accumulated deficit

 

 

(243,805

)

 

 

(105,184

)

Total stockholders’ equity (deficit)

 

 

287,193

 

 

 

(100,757

)

Total liabilities and stockholders’ equity (deficit)

 

$

322,076

 

 

$

127,159

 

 

See accompanying notes.

1


 

HilleVax, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development (includes related party
   amounts of $
719, $0, $2,313 and $15, respectively)

 

$

13,315

 

 

$

896

 

 

$

28,352

 

 

$

1,623

 

In-process research and development - related party

 

 

 

 

 

37,666

 

 

 

2,500

 

 

 

37,666

 

General and administrative (includes related party
   amounts of $
3, $215, $37 and $599, respectively)

 

 

4,577

 

 

 

1,113

 

 

 

11,162

 

 

 

3,064

 

Total operating expenses

 

 

17,892

 

 

 

39,675

 

 

 

42,014

 

 

 

42,353

 

Loss from operations

 

 

(17,892

)

 

 

(39,675

)

 

 

(42,014

)

 

 

(42,353

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

1,317

 

 

 

 

 

 

1,657

 

 

 

 

Interest expense (includes related party amounts
   of $
0, $182, $717 and $199, respectively)

 

 

(205

)

 

 

(717

)

 

 

(3,157

)

 

 

(734

)

Change in fair value of convertible promissory notes (includes related party amounts of $0, $918, $13,196 and $1,435, respectively)

 

 

 

 

 

(875

)

 

 

(51,469

)

 

 

(1,392

)

Change in fair value of warrant liabilities - related party

 

 

 

 

 

(20,598

)

 

 

(43,575

)

 

 

(20,598

)

Other income (expense)

 

 

(25

)

 

 

(3

)

 

 

(63

)

 

 

(4

)

Total other income (expense)

 

 

1,087

 

 

 

(22,193

)

 

 

(96,607

)

 

 

(22,728

)

Net loss

 

$

(16,805

)

 

$

(61,868

)

 

$

(138,621

)

 

$

(65,081

)

Net loss per share, basic and diluted

 

$

(0.45

)

 

$

(10.03

)

 

$

(5.86

)

 

$

(12.26

)

Weighted-average shares of common stock outstanding, basic and diluted

 

 

37,323,626

 

 

 

6,166,500

 

 

 

23,640,388

 

 

 

5,306,710

 

 

See accompanying notes.

2


 

HilleVax, Inc.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(in thousands, except share data)

(unaudited)

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional
Paid-in
Capital

 

 

Accumulated
Deficit

 

 

Total
Stockholders’
Equity (Deficit)

 

 

Balance at June 30, 2022

 

 

31,311,387

 

 

$

3

 

 

$

530,151

 

 

$

(227,000

)

 

$

303,154

 

 

Vesting of restricted shares

 

 

251,999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock–based compensation

 

 

 

 

 

 

 

 

844

 

 

 

 

 

 

844

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(16,805

)

 

 

(16,805

)

 

Balance at September 30, 2022

 

 

31,563,386

 

 

$

3

 

 

$

530,995

 

 

$

(243,805

)

 

$

287,193

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at June 30, 2021

 

 

5,006,221

 

 

$

 

 

$

3

 

 

$

(5,989

)

 

$

(5,986

)

 

Issuance of common stock

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

 

Issuance of common stock in connection with
 license agreement

 

 

840,500

 

 

 

 

 

 

4,357

 

 

 

 

 

 

4,357

 

 

Vesting of restricted shares

 

 

643,836

 

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(61,868

)

 

 

(61,868

)

 

Balance at September 30, 2021

 

 

6,490,557

 

 

$

1

 

 

$

4,359

 

 

$

(67,857

)

 

$

(63,497

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes.

 

3


 

HilleVax, Inc.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) - (Continued)

(in thousands, except share data)

(unaudited)

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional
Paid-in
Capital

 

 

Accumulated
Deficit

 

 

Total
Stockholders’
Equity (Deficit)

 

 

Balance at December 31, 2021

 

 

6,599,886

 

 

$

1

 

 

$

4,426

 

 

$

(105,184

)

 

$

(100,757

)

 

Issuance of common stock in connection with initial public offering, net of issuance costs of $20,491

 

 

13,529,750

 

 

 

1

 

 

 

209,514

 

 

 

 

 

 

209,515

 

 

Conversion of August 2021 Notes and accrued interest into common shares

 

 

10,672,138

 

 

 

1

 

 

 

215,363

 

 

 

 

 

 

215,364

 

 

Conversion of Takeda Warrant liability into equity

 

 

 

 

 

 

 

 

100,020

 

 

 

 

 

 

100,020

 

 

Vesting of restricted shares

 

 

761,612

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock–based compensation

 

 

 

 

 

 

 

 

1,672

 

 

 

 

 

 

1,672

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(138,621

)

 

 

(138,621

)

 

Balance at September 30, 2022

 

 

31,563,386

 

 

$

3

 

 

$

530,995

 

 

$

(243,805

)

 

$

287,193

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2020

 

 

4,759,968

 

 

$

 

 

$

3

 

 

$

(2,776

)

 

$

(2,773

)

 

Issuance of common stock

 

 

1,606,815

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

 

Issuance of common stock in connection with
 license agreement

 

 

840,500

 

 

 

 

 

 

4,357

 

 

 

 

 

 

4,357

 

 

Vesting restrictions placed on
   previously issued and outstanding
   common stock

 

 

(2,332,386

)

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

 

Vesting of restricted shares

 

 

1,615,660

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(65,081

)

 

 

(65,081

)

 

Balance at September 30, 2021

 

 

6,490,557

 

 

$

1

 

 

$

4,359

 

 

$

(67,857

)

 

$

(63,497

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes.

4


 

HilleVax, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

Nine Months Ended
September 30,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(138,621

)

 

$

(65,081

)

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

 

 

 

 

 

 

Depreciation

 

 

 

 

 

1

 

Stock-based compensation

 

 

1,672

 

 

 

 

Change in fair value of convertible promissory notes (includes related party
   amounts of $
13,196 and $1,435, respectively)

 

 

51,469

 

 

 

1,392

 

Change in fair value of warrant liabilities - related party

 

 

43,575

 

 

 

20,598

 

Amortization of debt discount

 

 

182

 

 

 

 

Issuance of PIK interest debt

 

 

48

 

 

 

 

Acquired in-process research and development - related party

 

 

2,500

 

 

 

37,666

 

Loss on disposal of property and equipment

 

 

42

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other current assets (includes related party
   amounts of $
0 and $47, respectively)

 

 

(7,951

)

 

 

(24

)

Accounts payable, accrued expenses and other long-term liabilities
   (includes related party amounts of $(
4,137) and $(89), respectively)

 

 

(713

)

 

 

1,616

 

Accrued interest (includes related party amounts of $717 and $205,
   respectively)

 

 

2,823

 

 

 

734

 

Operating lease right-of-use assets and liabilities

 

 

1,502

 

 

 

(3

)

Net cash used in operating activities

 

 

(43,472

)

 

 

(3,101

)

Cash flows from investing activities

 

 

 

 

 

 

Cash paid for purchased in-process research and development

 

 

(2,500

)

 

 

(2,763

)

Purchase of property and equipment

 

 

(185

)

 

 

(15

)

Net cash used in investing activities

 

 

(2,685

)

 

 

(2,778

)

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

 

 

 

1

 

Proceeds from issuance of common stock in initial public offering

 

 

230,006

 

 

 

 

Payment of initial public offering costs

 

 

(19,389

)

 

 

 

Proceeds from issuance of long-term debt, net of issuance costs

 

 

4,665

 

 

 

 

Proceeds from issuance of convertible promissory notes

 

 

 

 

 

135,000

 

Net cash provided by financing activities

 

 

215,282

 

 

 

135,001

 

Net increase in cash, cash equivalents and restricted cash

 

 

169,125

 

 

 

129,122

 

Cash, cash equivalents and restricted cash—beginning of period

 

 

124,566

 

 

 

457

 

Cash, cash equivalents and restricted cash—end of period

 

$

293,691

 

 

$

129,579

 

Supplemental disclosure of cash flow information

 

 

 

 

 

 

Cash paid for interest

 

$

104

 

 

$

 

Supplemental disclosure of noncash investing and financing activities

 

 

 

 

 

 

Accrued interest exchanged for convertible promissory notes

 

$

 

 

$

47

 

Operating lease

 

$

20,317

 

 

$

180

 

Issuance of Takeda Warrants in connection with Takeda License

 

$