10-Q
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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 June 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 001-32157

 

https://cdn.kscope.io/1ba7f7429784a52a956f2812099bd121-img197167228_0.jpg 

Savara Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

84-1318182

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

6836 Bee Cave Road, Building III, Suite 201

Austin, TX

 

78746

(Address of principal executive offices)

 

(Zip Code)

(512) 614-1848

(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 $0.001 per share

 

SVRA

 

The 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, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒

As of August 11, 2022, the registrant had 114,042,642 shares of common stock, $0.001 par value per share, outstanding.


 

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

 

Item 1.

Financial Statements (Unaudited)

 

 

Condensed Consolidated Balance Sheets

1

 

Condensed Consolidated Statements of Operations and Comprehensive Loss

2

 

Consolidated Statements of Changes in Stockholders’ Equity

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

17

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

24

Item 4.

Controls and Procedures

24

PART II.

OTHER INFORMATION

25

Item 1.

Legal Proceedings

25

Item 1A.

Risk Factors

25

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

25

Item 3.

Defaults Upon Senior Securities

25

Item 4.

Mine Safety Disclosures

25

Item 5.

Other Information

25

Item 6.

Exhibits

25

Exhibit Index

26

Signatures

27

 

 

i


 

PART I—FINANCIAL INFORMATION

Item I. Financial Information

 

Savara Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

 

 

 

June 30, 2022

 

 

December 31, 2021

 

 

 

(Unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

95,153

 

 

$

34,012

 

Short-term investments

 

 

47,286

 

 

 

127,159

 

Prepaid expenses and other current assets

 

 

2,946

 

 

 

3,829

 

Total current assets

 

 

145,385

 

 

 

165,000

 

Property and equipment, net

 

 

61

 

 

 

73

 

In-process R&D

 

 

10,379

 

 

 

11,274

 

Other non-current assets

 

 

952

 

 

 

251

 

Total assets

 

$

156,777

 

 

$

176,598

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

805

 

 

$

1,443

 

Accrued expenses and other current liabilities

 

 

2,901

 

 

 

4,884

 

Current portion of long-term debt

 

 

 

 

 

8,333

 

Total current liabilities

 

 

3,706

 

 

 

14,660

 

Long-term liabilities:

 

 

 

 

 

 

Long-term debt

 

 

25,942

 

 

 

17,323

 

Other long-term liabilities

 

 

87

 

 

 

117

 

Total liabilities

 

 

29,735

 

 

 

32,100

 

Commitments and contingencies (Note 9)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock, $0.001 par value, 300,000,000 authorized as of June 30, 2022 and
   December 31, 2021;
114,041,271 and 114,036,892 shares issued and outstanding
   as of June 30, 2022 and December 31, 2021, respectively

 

 

116

 

 

 

116

 

Additional paid-in capital

 

 

445,927

 

 

 

444,898

 

Accumulated other comprehensive (loss) income

 

 

(1,016

)

 

 

5

 

Accumulated deficit

 

 

(317,985

)

 

 

(300,521

)

Total stockholders’ equity

 

 

127,042

 

 

 

144,498

 

Total liabilities and stockholders’ equity

 

$

156,777

 

 

$

176,598

 

 

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

1


 

Savara Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

For the three months ended June 30,

 

 

For the six months ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

6,418

 

 

$

7,252

 

 

 

12,102

 

 

 

14,841

 

General and administrative

 

 

2,957

 

 

 

3,153

 

 

 

5,311

 

 

 

5,931

 

Depreciation and amortization

 

 

8

 

 

 

47

 

 

 

16

 

 

 

94

 

Total operating expenses

 

 

9,383

 

 

 

10,452

 

 

 

17,429

 

 

 

20,866

 

Loss from operations

 

 

(9,383

)

 

 

(10,452

)

 

 

(17,429

)

 

 

(20,866

)

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(284

)

 

 

(558

)

 

 

(854

)

 

 

(1,150

)

Foreign currency exchange gain (loss)

 

 

42

 

 

 

43

 

 

 

29

 

 

 

(15

)

Tax credit income

 

 

461

 

 

 

26

 

 

 

790

 

 

 

873

 

Total other income (expense), net

 

 

219

 

 

 

(489

)

 

 

(35

)

 

 

(292

)

Net loss

 

$

(9,164

)

 

$

(10,941

)

 

$

(17,464

)

 

$

(21,158

)

Net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.06

)

 

$

(0.07

)

 

$

(0.11

)

 

$

(0.18

)

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

152,771,103

 

 

 

152,460,531

 

 

 

152,770,434

 

 

 

114,934,938

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) gain on foreign currency translation

 

 

(745

)

 

 

83

 

 

 

(953

)

 

 

(348

)

Unrealized gain (loss) on short-term
   investments

 

 

20

 

 

 

24

 

 

 

(68

)

 

 

(2

)

Total comprehensive loss

 

$

(9,889

)

 

$

(10,834

)

 

$

(18,485

)

 

$

(21,508

)

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

2


 

Savara Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Periods Ended June 30, 2022 and 2021

(In thousands, except share amounts)

(Unaudited)

 

 

 

Stockholders’ Equity

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

Number of
Shares

 

 

Amount

 

 

Additional
Paid-In
Capital

 

 

Accumulated
Deficit

 

 

Accumulated
Other
Comprehensive
Income (Loss)

 

 

Total

 

Balance on December 31, 2021

 

 

114,036,892

 

 

$

116

 

 

$

444,898

 

 

$

(300,521

)

 

$

5

 

 

$

144,498

 

Issuance of common stock
  for settlement of RSUs

 

 

3,688

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase of shares for
  minimum tax withholdings

 

 

(720

)

 

 

 

 

 

(1

)

 

 

 

 

 

 

 

 

(1

)

Stock-based compensation

 

 

 

 

 

 

 

 

574

 

 

 

 

 

 

 

 

 

574

 

Foreign exchange translation
  adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(208

)

 

 

(208

)

Unrealized loss on short-
  term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(88

)

 

 

(88

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(8,300

)

 

 

 

 

 

(8,300

)

Balance on March 31, 2022

 

 

114,039,860

 

 

$

116

 

 

$

445,471

 

 

$

(308,821

)

 

$

(291

)

 

$

136,475

 

Issuance of common stock
  for settlement of RSUs

 

 

1,812

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase of shares for
  minimum tax withholdings

 

 

(401

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

456

 

 

 

 

 

 

 

 

 

456

 

Foreign exchange translation
  adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(745

)

 

 

(745

)

Unrealized gain on short-
  term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20

 

 

 

20

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(9,164

)

 

 

 

 

 

(9,164

)

Balance on June 30, 2022

 

 

114,041,271

 

 

$

116

 

 

$

445,927

 

 

$

(317,985

)

 

$

(1,016

)

 

$

127,042

 

 

3


 

Savara Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Stockholders’ Equity (continued)

Periods Ended June 30, 2022 and 2021

(In thousands, except share amounts)

(Unaudited)

 

 

 

Stockholders’ Equity

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

Number of
Shares

 

 

Amount

 

 

Additional
Paid-In
Capital

 

 

Accumulated
Deficit

 

 

Accumulated
Other
Comprehensive
Income (Loss)

 

 

Total

 

Balance on December 31, 2020

 

 

54,152,955

 

 

$

55

 

 

$

320,893

 

 

$

(257,507

)

 

$

942

 

 

$

64,383

 

Issuance of common stock
  and pre-funded warrants in
  public offering, net of
  offering costs
(1)

 

 

57,479,978

 

 

 

57

 

 

 

121,770

 

 

 

 

 

 

 

 

 

121,827

 

Repurchase of outstanding
  pre-funded warrants

 

 

 

 

 

 

 

 

(3,909

)

 

 

 

 

 

 

 

 

(3,909

)

Net issuance of common
  stock upon exercise of
  stock warrants, net

 

 

1,737,450

 

 

 

2

 

 

 

2,544

 

 

 

 

 

 

 

 

 

2,546

 

Issuance of common stock
  for settlement of RSUs

 

 

5,563

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock
  upon exercise of stock
  options

 

 

202,708

 

 

 

 

 

 

2

 

 

 

 

 

 

 

 

 

2

 

Stock-based compensation

 

 

 

 

 

 

 

 

946

 

 

 

 

 

 

 

 

 

946

 

Foreign exchange
  translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(431

)

 

 

(431

)

Unrealized loss on short-
  term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26

)

 

 

(26

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(10,217

)

 

 

 

 

 

(10,217

)

Balance on March 31, 2021

 

 

113,578,654

 

 

$

114

 

 

$

442,246

 

 

$

(267,724

)

 

$

485

 

 

$

175,121

 

Issuance of common stock
  and pre-funded warrants in
  public offering, net of
  offering costs

 

 

 

 

 

 

 

 

321

 

 

 

 

 

 

 

 

 

321

 

Issuance of common stock
  for settlement of RSUs

 

 

203,687

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock
  upon exercise of stock
  options

 

 

65,191

 

 

 

 

 

 

3

 

 

 

 

 

 

 

 

 

3

 

Stock-based compensation

 

 

 

 

 

 

 

 

771

 

 

 

 

 

 

 

 

 

771

 

Foreign exchange
  translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

83

 

 

 

83

 

Unrealized gain on short-
  term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

24

 

 

 

24

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(10,941

)

 

 

 

 

 

(10,941

)

Balance on June 30, 2021

 

 

113,847,532

 

 

$

114

 

 

$

443,341

 

 

$

(278,665

)

 

$

592

 

 

$

165,382

 

 

(1)
As discussed in Note 8. Stockholders’ Equity, the Company sold (i) an aggregate of 57,479,978 shares of the Company’s common stock, par value $0.001 per share and (ii) pre-funded warrants to purchase an aggregate of 32,175,172 shares of the Company's common stock at an exercise price, equal to the par value, of $0.001 per share.

 

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

4


 

Savara Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

For the six months ended June 30,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(17,464

)

 

$

(21,158

)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

16

 

 

 

94

 

Amortization of right-of-use assets

 

 

66

 

 

 

116

 

Foreign currency (gain) loss

 

 

(29

)

 

 

15

 

Amortization of debt issuance costs

 

 

198

 

 

 

277

 

Amortization on premium to short-term investments

 

 

371

 

 

 

668

 

Stock-based compensation

 

 

1,030

 

 

 

1,717

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

1,337

 

 

 

(170

)

Non-current assets

 

 

(803

)

 

 

(890

)

Accounts payable and accrued expenses and other current liabilities

 

 

(2,463

)

 

 

(2,413

)

Long-term liabilities

 

 

 

 

 

(47

)

Net cash used in operating activities

 

 

(17,741

)

 

 

(21,791

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchase of property and equipment

 

 

(5

)

 

 

(6

)

Purchase of available-for-sale securities, net

 

 

(16,004

)

 

 

(114,445

)

Maturity of available-for-sale securities

 

 

83,593

 

 

 

33,280

 

Sale of available-for-sale securities, net

 

 

11,276

 

 

 

 

Net cash provided by (used in) investing activities

 

 

78,860

 

 

 

(81,171

)

Cash flows from financing activities:

 

 

 

 

 

 

Repurchase of outstanding pre-funded warrants

 

 

 

 

 

(3,909

)

Repayment of long-term debt (1)

 

 

(26,350

)

 

 

 

Proceeds from long-term debt, net (1)

 

 

26,438

 

 

 

 

Issuance of common stock and pre-funded warrants in public offering, net of offering costs

 

 

 

 

 

122,148

 

Proceeds from exercise of stock options

 

 

 

 

 

5

 

Issuance of common stock upon exercise of warrants, net

 

 

 

 

 

2,546

 

Repurchase of shares for minimum tax withholdings

 

 

(