SEC Filing - Unity Biotechnology

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ubx-10q_20220630.htm

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 June 30, 2022

☐	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: 001-38470

Unity Biotechnology, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	26-4726035
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

285 East Grand Ave. South San Francisco, CA	94080
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (650) 416-1192

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	UBX	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, 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 69,651,035 shares of common stock outstanding.

UNITY BIOTECHNOLOGY, INC.

QUARTERLY REPORT ON FORM 10-Q

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1	Condensed Financial Statements	2
	Condensed Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021	2
	Condensed Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2022 and 2021 (unaudited)	3
	Condensed Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2022 and 2021(unaudited)	4
	Condensed Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021 (unaudited)	6
	Notes to Condensed Financial Statements (unaudited)	7
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4	Controls and Procedures	34

PART II. OTHER INFORMATION

Item 1	Legal Proceedings	35
Item 1A	Risk Factors	35
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	78
Item 3	Default Upon Senior Securities	78
Item 4	Mine Safety Disclosures	78
Item 5	Other Information	78
Item 6	Exhibits	79
Signatures		80

PART I. FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

Unity Biotechnology, Inc.

Condensed Balance Sheets

(In thousands, except for share amounts and par value)

	June 30, 2022			December 31, 2021⁽¹⁾
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	19,442		$	32,905
Short-term marketable securities		45,065			55,170
Prepaid expenses and other current assets		2,765			1,879
Restricted cash		550			550
Total current assets		67,822			90,504
Property and equipment, net		8,697			9,942
Operating lease right-of-use assets		20,116			21,286
Long-term marketable securities		—			1,993
Long-term restricted cash		896			896
Other long-term assets		62			91
Total assets	$	97,593		$	124,712
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,437		$	1,985
Accrued compensation		3,291			4,028
Accrued and other current liabilities		4,604			6,370
Deferred revenue		—			216
Derivative liability related to debt		—			963
Current portion of long-term debt		7,087			3,055
Total current liabilities		16,419			16,617
Operating lease liability, net of current portion		28,573			30,094
Long-term debt, net		12,670			18,409
Other long-term liabilities		—			23
Total liabilities		57,662			65,143
Commitments and contingencies (Note 6)
Stockholders’ equity:
Convertible preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding		—			—
Common stock, $0.0001 par value; 300,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 69,584,933 and 62,991,906 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		7			6
Additional paid-in capital		472,187			459,631
Accumulated other comprehensive loss		(187	)		(44	)
Accumulated deficit		(432,076	)		(400,024	)
Total stockholders’ equity		39,931			59,569
Total liabilities and stockholders’ equity	$	97,593		$	124,712

⁽¹⁾ The balance sheet as of December 31, 2021 is derived from the audited financial statements as of that date.

See accompanying notes to the condensed financial statements.

Unity Biotechnology, Inc.

Condensed Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Licensing revenue - related party	$	236		$	—		$	236		$	—
Operating expenses:
Research and development		7,553			11,016			20,014			19,733
General and administrative		4,941			5,980			10,747			12,206
Total operating expenses		12,494			16,996			30,761			31,939
Loss from operations		(12,258	)		(16,996	)		(30,525	)		(31,939	)
Interest income		58			26			87			62
Interest expense		(894	)		(784	)		(1,702	)		(1,559	)
Other income (expense), net		(43	)		(72	)		88			(146	)
Net loss		(13,137	)		(17,826	)		(32,052	)		(33,582	)
Other comprehensive (loss) gain
Unrealized loss on marketable debt securities		(11	)		(10	)		(143	)		—
Comprehensive loss	$	(13,148	)	$	(17,836	)	$	(32,195	)	$	(33,582	)
Net loss per share, basic and diluted	$	(0.19	)	$	(0.32	)	$	(0.47	)	$	(0.62	)
Weighted-average number of shares used in computing net loss per share, basic and diluted		69,247,818			54,859,727			68,392,934			54,516,445

See accompanying notes to the condensed financial statements.

Unity Biotechnology, Inc.

Condensed Statements of Stockholders’ Equity

(In thousands, except share amounts)

(Unaudited)

	Common Stock				Additional Paid-In		Related Party Promissory Notes for Purchase of		Promissory Notes for Purchase of		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		Common Stock		Common Stock		Gain (Loss)			Deficit			Equity
Balances at December 31, 2021		62,991,906	$	6	$	459,631	$	—	$	—	$	(44	)	$	(400,024	)	$	59,569
Issuance of common stock, net of issuance costs, under at-the-market (“ATM”) offering program		2,325,000		—		3,420		—		—		—			—			3,420
Issuance of common stock to Lincoln Park Capital Fund		900,000		—		910		—		—		—			—			910
Issuance of common stock to Hercules Capital		2,627,612		1		3,178		—		—		—			—			3,179
Vesting of restricted stock units		303,588		—		—		—		—		—			—			—
Stock-based compensation		—		—		2,660		—		—		—			—			2,660
Unrealized loss on available-for-sale marketable securities		—		—		—		—		—		(132	)		—			(132	)
Net loss		—		—		—		—		—		—			(18,915	)		(18,915	)
Balances at March 31, 2022		69,148,106	$	7	$	469,799	$	—	$	—	$	(176	)	$	(418,939	)	$	50,691
Issuance of common stock, net of issuance costs, under ATM offering program		—		—		13		—		—		—			—			13
Issuance of common stock under 2018 ESPP		182,018		—		125		—		—		—			—			125
Issuance of common stock from restricted stock units		—		—		—		—		—		—			—			—
Vesting of restricted stock units		254,809		—		—		—		—		—			—			—
Stock-based compensation		—		—		2,250		—		—		—			—			2,250
Unrealized loss on available-for-sale marketable securities		—		—		—		—		—		(11	)		—			(11	)
Net loss		—		—		—		—		—		—			(13,137	)		(13,137	)
Balances at June 30, 2022		69,584,933	$	7	$	472,187	$	—	$	—	$	(187	)	$	(432,076	)	$	39,931

	Common Stock					Additional Paid-In		Related Party Promissory Notes for Purchase of			Promissory Notes for Purchase of			Accumulated Other Comprehensive		Accumulated			Total Stockholders’
	Shares			Amount		Capital		Common Stock			Common Stock			Gain (Loss)		Deficit			Equity
Balances at December 31, 2020		53,253,213		$	5	$	422,379	$	(210	)	$	—		$	5	$	(339,299	)	$	82,880
Issuance of common stock, net of issuance costs, under ATM offering program		1,220,629			—		8,892		—			—			—		—			8,892
Issuance of common stock upon exercise of stock options		259,019			—		1,183		—			—			—		—			1,183
Repurchase of early exercised shares		(33,370	)		—		—		—			—			—		—			—
Stock-based compensation		—			—		2,744		—			—			—		—			2,744
Vesting of restricted stock units		88,218			—		—		—			—			—		—			—
Reclass of promissory notes for purchase of common stock		—			—		—		210			(210	)		—		—			—
Unrealized gain on available-for-sale marketable securities		—			—		—		—			—			10		—			10
Net loss		—			—		—		—			—			—		(15,756	)		(15,756	)
Balances at March 31, 2021		54,787,709		$	5	$	435,198	$	—		$	(210	)	$	15	$	(355,055	)	$	79,953
Issuance of common stock upon exercise of stock options		238,519			—		612		—			—			—		—			612
Stock-based compensation		—			—		2,782		—			—			—		—			2,782
Issuance of common stock under 2018 ESPP		54,943			—		196		—			—			—		—			196
Vesting of restricted stock units		23,079			—		—		—			—			—		—			—
Repayment of promissory note for purchase of common stock		—			—		—		—			210			—		—			210