alt-10q_20190930.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

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

For the quarterly period ended September 30, 2019

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 001-32587

 

Altimmune, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

 

20-2726770

State or Other Jurisdiction of

Incorporation or Organization

 

I.R.S. Employer

Identification No.

 

910 Clopper Road Suite 201S, Gaithersburg, Maryland

 

20878

Address of Principal Executive Offices

 

Zip Code

 

(240) 654-1450

Registrant’s Telephone Number, Including Area Code

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

 

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 $0.0001 per share

ALT

The NASDAQ Global 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 Act).    Yes      No  

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: as of November 12, 2019 there were 15,338,072 shares of the registrant’s common stock, par value $0.0001 per share, outstanding.

 

 

 


 

 

 

ALTIMMUNE, INC.

TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

 

PART I — FINANCIAL INFORMATION

 

 

 

 

 

 

 

Item 1. Consolidated Financial Statements

 

 

 

 

 

 

 

Consolidated Balance Sheets as of September 30, 2019 (unaudited) and December 31, 2018

 

1

 

Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2019 and 2018 (unaudited)

 

2

 

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (unaudited)

 

3

 

Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018 (unaudited)

 

5

 

Notes to Consolidated Financial Statements (unaudited)

 

6

 

 

 

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

14

 

 

 

 

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

19

 

 

 

 

 

Item 4. Controls and Procedures

 

19

 

 

 

 

PART II — OTHER INFORMATION

 

20

 

 

 

 

 

Item 1. Legal Proceedings

 

20

 

 

 

 

 

Item 1A. Risk Factors

 

20

 

 

 

 

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

20

 

 

 

 

 

Item 3. Defaults Upon Senior Securities

 

20

 

 

 

 

 

Item 4. Mine Safety Disclosures

 

20

 

 

 

 

 

Item 5. Other Information

 

20

 

 

 

 

 

Item 6. Exhibits

 

21

 

 

 

i


 

 

Part I—FINANCIAL INFORMATION

Item 1.

Consolidated Financial Statements (Unaudited).

ALTIMMUNE, INC.

CONSOLIDATED BALANCE SHEETS

 

 

 

 

September 30, 2019

 

 

December 31, 2018

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

10,972,482

 

 

$

33,718,713

 

Restricted cash

 

 

34,174

 

 

 

634,416

 

Total cash, cash equivalents and restricted cash

 

 

11,006,656

 

 

 

34,353,129

 

Short-term investments

 

 

28,226,026

 

 

 

 

Accounts receivable

 

 

1,012,491

 

 

 

3,461,938

 

Tax refund receivable

 

 

968,597

 

 

 

1,008,973

 

Prepaid expenses and other current assets

 

 

410,148

 

 

 

548,094

 

Total current assets

 

 

41,623,918

 

 

 

39,372,134

 

Property and equipment, net

 

 

1,162,715

 

 

 

1,342,802

 

Right of use asset

 

 

717,303

 

 

 

 

Intangible assets, net

 

 

12,741,656

 

 

 

13,851,924

 

Other assets

 

 

142,331

 

 

 

183,682

 

Total assets

 

$

56,387,923

 

 

$

54,750,542

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

49,884

 

 

$

372,860

 

Accrued expenses and other current liabilities

 

 

2,311,824

 

 

 

4,082,949

 

Notes payable

 

 

105,062

 

 

 

71,596

 

Total current liabilities

 

 

2,466,770

 

 

 

4,527,405

 

Deferred income taxes

 

 

 

 

 

58,500

 

Contingent consideration

 

 

2,750,000

 

 

 

 

Other long-term liabilities

 

 

1,787,203

 

 

 

1,852,071

 

Total liabilities

 

 

7,003,973

 

 

 

6,437,976

 

Commitments and contingencies (Note 12)

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock, $0.0001 par value; 200,000,000 shares authorized;

   15,338,356 and 9,078,735 shares issued; 15,338,072 and 9,078,238 shares

  outstanding at September 30, 2019 and December 31, 2018, respectively

 

 

1,502

 

 

 

876

 

Additional paid-in capital

 

 

187,683,155

 

 

 

170,207,844

 

Accumulated deficit

 

 

(133,279,497

)

 

 

(116,855,991

)

Accumulated other comprehensive loss

 

 

(5,021,210

)

 

 

(5,040,163

)

Total stockholders’ equity

 

 

49,383,950

 

 

 

48,312,566

 

Total liabilities and stockholders’ equity

 

$

56,387,923

 

 

$

54,750,542

 

 

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

1


 

 

ALTIMMUNE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

 

 

 

For the Three Months Ended

September 30,

 

 

For the Nine Months Ended

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

643,978

 

 

$

2,634,393

 

 

$

5,225,600

 

 

$

7,742,514

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

8,729,697

 

 

 

4,728,726

 

 

 

14,892,464

 

 

 

15,394,616

 

General and administrative

 

 

2,187,661

 

 

 

1,963,733

 

 

 

6,485,960

 

 

 

7,345,651

 

Impairment charges

 

 

1,000,000

 

 

 

 

 

 

1,000,000

 

 

 

490,676

 

Total operating expenses

 

 

11,917,358

 

 

 

6,692,459

 

 

 

22,378,424

 

 

 

23,230,943

 

Loss from operations

 

 

(11,273,380

)

 

 

(4,058,066

)

 

 

(17,152,824

)

 

 

(15,488,429

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in fair value of warrant liability

 

 

76,000

 

 

 

806,224

 

 

 

30,000

 

 

 

(2,874,484

)

Changes in fair value of embedded derivatives

 

 

 

 

 

185,768

 

 

 

 

 

 

183,638

 

Interest expense

 

 

(756

)

 

 

(166,946

)

 

 

(2,244

)

 

 

(169,737

)

Interest income

 

 

224,058

 

 

 

21,100

 

 

 

649,268

 

 

 

78,306

 

Other income (expense)

 

 

(23,734

)

 

 

31,378

 

 

 

(6,206

)

 

 

289,053

 

Total other income (expense)

 

 

275,568

 

 

 

877,524

 

 

 

670,818

 

 

 

(2,493,224

)

Net loss before income tax benefit

 

 

(10,997,812

)

 

 

(3,180,542

)

 

 

(16,482,006

)

 

 

(17,981,653

)

Income tax benefit

 

 

58,500

 

 

 

829,393

 

 

 

58,500

 

 

 

3,318,124

 

Net loss

 

 

(10,939,312

)

 

 

(2,351,149

)

 

 

(16,423,506

)

 

 

(14,663,529

)

Other comprehensive income (loss) – foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

(463,177

)

Other comprehensive income (loss) – unrealized gains on investments

 

 

18,953

 

 

 

 

 

 

18,953

 

 

 

 

Comprehensive loss

 

$

(10,920,359

)

 

$

(2,351,149

)

 

$

(16,404,553

)

 

$

(15,126,706

)

Net loss

 

$

(10,939,312

)

 

$

(2,351,149

)

 

$

(16,423,506

)

 

$

(14,663,529

)

Preferred stock accretion and other deemed dividends

 

 

 

 

 

64,139

 

 

 

(452,925

)

 

 

(2,527,275

)

Net loss attributed to common stockholders

 

$

(10,939,312

)

 

$

(2,287,010

)

 

$

(16,876,431

)

 

$

(17,190,804

)

Weighted-average common shares outstanding, basic and diluted

 

 

14,768,931

 

 

 

1,321,289

 

 

 

12,481,494

 

 

 

983,651

 

Net loss per share attributed to common stockholders, basic and diluted

 

$

(0.74

)

 

$

(1.73

)

 

$

(1.35

)

 

$

(17.48

)

 

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

 

 

2


 

 

ALTIMMUNE, INC.

CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

(unaudited)

 

 

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

 

 

Accumulated

Other

Comprehensive

 

 

Total

Stockholders’

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Loss

 

 

Equity

 

Balance, January 1, 2019

 

 

 

 

 

 

9,078,238

 

 

$

876

 

 

$

170,207,844

 

 

$

(116,855,991

)

 

$

(5,040,163

)

 

$

48,312,566

 

Stock based compensation and vesting of restricted stock

 

 

 

 

 

 

71

 

 

 

 

 

 

 

407,742

 

 

 

 

 

 

 

 

 

 

 

407,742

 

Issuance of common stock in registered direct offering,

   net of offering costs

 

 

 

 

 

 

4,361,370

 

 

 

436

 

 

 

12,668,348

 

 

 

 

 

 

 

 

 

 

 

12,668,784

 

Issuance of common stock upon exercise of warrants

 

 

 

 

 

 

11,000

 

 

 

1

 

 

 

30,323

 

 

 

 

 

 

 

 

 

 

 

30,324

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,097,306

)

 

 

 

 

 

 

(2,097,306

)

Balance, March 31, 2019

 

 

 

 

 

 

13,450,679

 

 

 

1,313

 

 

 

183,314,257

 

 

 

(118,953,297

)

 

 

(5,040,163

)

 

 

59,322,110

 

Stock based compensation and vesting of restricted stock

 

 

 

 

 

 

71

 

 

 

 

 

 

 

289,800

 

 

 

 

 

 

 

 

 

 

 

289,800

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,386,888

)

 

 

 

 

 

 

(3,386,888

)

Balance, June 30, 2019

 

 

 

 

 

 

13,450,750

 

 

 

1,313

 

 

 

183,604,057

 

 

 

(122,340,185

)

 

 

(5,040,163

)

 

 

56,225,022

 

Stock based compensation and vesting of restricted stock

 

 

 

 

 

 

72

 

 

 

 

 

 

 

287,802

 

 

 

 

 

 

 

 

 

 

 

287,802

 

Issuance of common stock for acquired in-process

   research and development

 

 

 

 

 

 

1,887,250

 

 

 

189

 

 

 

3,791,296

 

 

 

 

 

 

 

 

 

 

 

3,791,485

 

Unrealized gain on short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18,953

 

 

 

18,953

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,939,312

)

 

 

 

 

 

 

(10,939,312

)

Balance, September 30, 2019

 

 

 

 

 

 

15,338,072

 

 

$

1,502

 

 

$

187,683,155

 

 

$

(133,279,497

)

 

$

(5,021,210

)

 

$

49,383,950

 

 


3


 

 

ALTIMMUNE, INC.

CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

(unaudited)

 

 

 

Series B Redeemable

Convertible Preferred

Stock

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

 

 

Accumulated

Other

Comprehensive

 

 

Total

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Loss

 

 

Equity

 

Balance, January 1, 2018

 

 

12,177

 

 

$

9,281,767

 

 

 

608,499

 

 

$

61

 

 

$

121,657,587

 

 

$

(77,684,839

)

 

$

(4,576,986

)

 

$

39,395,823

 

Stock based compensation and vesting of restricted stock

 

 

 

 

 

 

 

 

 

 

71

 

 

 

 

 

 

356,737

 

 

 

 

 

 

 

 

 

 

 

356,737

 

Exercises of stock options

 

 

 

 

 

 

 

 

 

 

7,703

 

 

 

1

 

 

 

18,487

 

 

 

 

 

 

 

 

 

 

 

18,488

 

Conversion of Series B redeemable convertible preferred

   stock into common stock

 

 

(5,219

)

 

 

(5,218,572

)

 

 

130,447

 

 

 

13

 

 

 

5,218,559

 

 

 

 

 

 

 

 

 

 

 

5,218,572

 

Accretion of Series B Redeemable convertible preferred

   stock

 

 

 

 

 

 

1,891,321

 

 

 

 

 

 

 

 

 

 

 

(1,891,321

)

 

 

 

 

 

 

 

 

 

 

(1,891,321

)

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

615,471

 

 

 

615,471

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,173,538

)

 

 

 

 

 

 

(3,173,538

)

Balance, March 31, 2018

 

 

6,958

 

 

 

5,954,516

 

 

 

746,720

 

 

 

75

 

 

 

125,360,049

 

 

 

(80,858,377

)

 

 

(3,961,515

)

 

 

40,540,232

 

Stock based compensation and vesting of restricted stock

 

 

 

 

 

 

 

 

 

 

71

 

 

 

 

 

 

252,156

 

 

 

 

 

 

 

 

 

 

 

252,156

 

Exercises of stock options

 

 

 

 

 

 

 

 

 

 

1,837

 

 

 

 

 

 

4,410

 

 

 

 

 

 

 

 

 

 

 

4,410

 

Accretion of Series B redeemable convertible preferred stock

 

 

 

 

 

 

956,150

 

 

 

 

 

 

 

 

 

 

 

(956,150

)

 

 

 

 

 

 

 

 

 

 

(956,150

)

Conversion of Series B redeemable convertible preferred

  stock into common stock

 

 

(4,036

)

 

 

(4,036,539

)

 

 

334,180

 

 

 

33

 

 

 

4,036,506

 

 

 

 

 

 

 

 

 

 

 

4,036,539

 

Redemption of Series B redeemable convertible

  preferred stock for cash and release of embedded

  derivative

 

 

(2,364

)

 

 

(2,364,044

)

 

 

 

 

 

 

 

 

 

 

23,292

 

 

 

 

 

 

 

 

 

 

 

23,292

 

Issuance of common stock for the exchange of warrants

 

 

 

 

 

 

 

 

 

 

167,700

 

 

 

17

 

 

 

2,126,983

 

 

 

 

 

 

 

 

 

 

 

2,127,000

 

Foreign currency translation

   adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,078,648

)

 

 

(1,078,648

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,138,842

)

 

 

 

 

 

 

(9,138,842

)

Balance, June 30, 2018

 

 

558

 

 

 

510,083

 

 

 

1,250,508

 

 

 

125

 

 

 

130,847,246

 

 

 

(89,997,219

)

 

 

(5,040,163

)

 

 

35,809,989

 

Stock based compensation and vesting of restricted stock

 

 

 

 

 

 

 

 

 

 

71

 

 

 

 

 

 

95,649

 

 

 

 

 

 

 

 

 

 

 

95,649

 

Accretion of Series B redeemble convertible preferred stock

 

 

 

 

 

 

47,414

 

 

 

 

 

 

 

 

 

 

 

(47,414

)

 

 

 

 

 

 

 

 

 

 

(47,414

)

Conversion of Series B redeemable convertible preferred

  stock into common stock

 

 

(558

)

 

 

(557,497

)

 

 

37,451

 

 

 

4

 

 

 

535,253

 

 

 

 

 

 

 

 

 

 

 

535,257

 

Issuance of common stock for the exchange of warrants

 

 

 

 

 

 

 

 

 

 

150,968

 

 

 

15

 

 

 

1,306,026

 

 

 

 

 

 

 

 

 

 

 

1,306,041

 

Issuance of common stock and units in registered direct

   offerings, net of offering costs

 

 

 

 

 

 

 

 

 

 

286,633

 

 

 

29

 

 

 

4,334,786

 

 

 

 

 

 

 

 

 

 

 

4,334,815

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,351,149

)

 

 

 

 

 

 

(2,351,149

)

Balance, September 30, 2018

 

 

 

 

$

 

 

 

1,725,630

 

 

$

173

 

 

$

137,071,546

 

 

$

(92,348,368

)

 

$

(5,040,163

)

 

$

39,683,188

 

 

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

 

 

 

4


 

 

ALTIMMUNE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

 

 

For the Nine Months Ended

September 30,

 

 

 

2019

 

 

2018

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net loss

 

$

(16,423,506

)

 

$

(14,663,529

)

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

 

 

 

 

 

 

 

 

Non-cash consideration for acquired in-process research and development

 

 

6,541,485

 

 

 

 

Impairment charge

 

 

1,000,000

 

 

 

490,676

 

Stock-based compensation

 

 

985,260

 

 

 

704,425

 

Depreciation

 

 

181,314

 

 

 

146,299

 

Amortization

 

 

135,664

 

 

 

45,426

 

Unrealized gains on foreign currency exchange

 

 

(3,310

)

 

 

31,357

 

Debt discount and deferred financing cost accretion

 

 

 

 

 

120,024

 

Gain on disposal of property and equipment

 

 

 

 

 

(3,806

)

Changes in fair value of warrant liability

 

 

(30,000

)

 

 

2,874,484

 

Changes in fair value of embedded derivatives

 

 

 

 

 

(183,638

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

2,449,447

 

 

 

1,258,837

 

Prepaid expenses and other current assets

 

 

179,298

 

 

 

589,773

 

Accounts payable

 

 

(322,976

)

 

 

20,940

 

Accrued expenses and other current liabilities

 

 

(2,125,851

)

 

 

1,695,296

 

Deferred revenue

 

 

(14,833

)

 

 

(14,833

)

Deferred rent

 

 

 

 

 

861,741

 

Lease obligation

 

 

(133,813

)

 

 

 

Tax refund receivable

 

 

40,376

 

 

 

4,839,775

 

Deferred taxes

 

 

(58,500

)

 

 

(3,046,768

)

Net cash used in operating activities

 

 

(7,599,945

)

 

 

(4,233,521

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Cash paid for short-term investments

 

 

(28,207,073

)

 

 

 

Purchase of property and equipment

 

 

(1,227

)

 

 

(968,354

)

Proceeds from sale of property and equipment

 

 

 

 

 

14,492

 

Additions to intangible assets

 

 

(25,396

)

 

 

(39,145

)

Net cash used in investing activities

 

 

(28,233,696

)

 

 

(993,007

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Redemption of preferred stock

 

 

 

 

 

(2,386,284

)

Cash paid in conjunction with warrant exchange

 

 

(25,000

)

 

 

(1,100,000

)

Proceeds from conditional economic incentive

 

 

 

 

 

100,000

 

Proceeds from issuance of common units, net of issuance costs

 

 

12,668,784

 

 

 

4,334,816

 

Payments of notes payable

 

 

(186,940

)

 

 

 

Proceeds from exercises of warrants and stock options

 

 

30,324

 

 

 

22,898

 

Net cash provided by financing activities

 

 

12,487,168

 

 

 

971,430

 

EFFECT OF EXCHANGE RATES ON CASH

 

 

 

 

 

(50,365

)

Net decrease in cash and cash equivalents and restricted cash

 

 

(23,346,473

)

 

 

(4,305,463

)

Cash, cash equivalents and restricted cash, beginning of period

 

 

34,353,129

 

 

 

12,303,639

 

Cash, cash equivalents and restricted cash, end of period

 

$

11,006,656

 

 

$

7,998,176