SEC Filing - Unity Biotechnology

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10-Q

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

☐ 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 November 4, 2022, the registrant had 14,192,305 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 September 30, 2022 (unaudited) and December 31, 2021	2
	Condensed Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2022 and 2021 (unaudited)	3
	Condensed Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021(unaudited)	4
	Condensed Statements of Cash Flows for the Nine Months Ended September 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	80
Item 3	Default Upon Senior Securities	80
Item 4	Mine Safety Disclosures	80
Item 5	Other Information	80
Item 6	Exhibits	81
Signatures		82

PART I. FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

Unity Biotechnology, Inc.

Condensed Balance Sheets

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


	September 30, 2022			December 31, 2021(1)
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	22,576		$	32,905
Short-term marketable securities		76,364			55,170
Prepaid expenses and other current assets		3,234			1,879
Restricted cash		550			550
Total current assets		102,724			90,504
Property and equipment, net		8,202			9,942
Operating lease right-of-use assets		19,515			21,286
Long-term marketable securities		4,980			1,993
Long-term restricted cash		896			896
Other long-term assets		76			91
Total assets	$	136,393		$	124,712
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,444		$	1,985
Accrued compensation		2,961			4,028
Accrued and other current liabilities		4,593			6,370
Deferred revenue		—			216
Derivative liability related to debt		—			963
Current portion of long-term debt		6,776			3,055
Total current liabilities		16,774			16,617
Operating lease liability, net of current portion		27,792			30,094
Long-term debt, net		13,262			18,409
Other long-term liabilities		—			23
Total liabilities		57,828			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 September 30, 2022 and December 31, 2021; 14,036,249 and 6,299,191 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively(2)		1			1
Additional paid-in capital		524,623			459,636
Accumulated other comprehensive loss		(275	)		(44	)
Accumulated deficit		(445,784	)		(400,024	)
Total stockholders’ equity		78,565			59,569
Total liabilities and stockholders’ equity	$	136,393		$	124,712

(1) The balance sheet as of December 31, 2021 (as adjusted for the Reverse Split, as defined in Note 2) is derived from the audited financial statements as of that date.

(2) The Company effected a reverse stock split of its outstanding shares of common stock where every ten shares of its common stock issued and outstanding was converted into one share of common stock. All share amounts and per share amounts disclosed in this Quarterly Report on Form 10-Q have been restated to reflect the reverse stock split on a retroactive basis in all periods presented.

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 September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Licensing revenue - related party	$	—		$	—		$	236		$	—
Operating expenses:
Research and development		8,208			9,081			28,222			28,815
General and administrative		4,922			5,747			15,669			17,952
Total operating expenses		13,130			14,828			43,891			46,767
Loss from operations		(13,130	)		(14,828	)		(43,655	)		(46,767	)
Interest income		329			20			416			82
Interest expense		(866	)		(792	)		(2,568	)		(2,351	)
Other income (expense), net		(41	)		(850	)		49			(996	)
Net loss		(13,708	)		(16,450	)		(45,758	)		(50,032	)
Other comprehensive (loss) gain
Unrealized loss on marketable debt securities		(88	)		—			(231	)		—
Comprehensive loss	$	(13,796	)	$	(16,450	)	$	(45,989	)	$	(50,032	)
Net loss per share, basic and diluted	$	(1.36	)	$	(2.97	)	$	(5.77	)	$	(9.13	)
Weighted-average number of shares used in computing net loss per share, basic and diluted(1)		10,072,077			5,543,644			7,928,729			5,482,648

(1) The Company effected a reverse stock split of its outstanding shares of common stock where every ten shares of its common stock issued and outstanding was converted into one share of common stock. All share amounts and per share amounts disclosed in this Quarterly Report on Form 10-Q have been restated to reflect the reverse stock split on a retroactive basis in all periods presented.

See accompanying notes to the condensed financial statements.

Unity Biotechnology, Inc.

Condensed Statements of Stockholders’ Equity

(In thousands, except share amounts)

(Unaudited)


	Common Stock(1)				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		6,299,191	$	1	$	459,636	$	—	$	—	$	(44	)	$	(400,024	)	$	59,569
Issuance of common stock, net of issuance costs, under at-the-market (“ATM”) offering program		232,500		—		3,420		—		—		—			—			3,420
Issuance of common stock to Lincoln Park Capital Fund		90,000		—		910		—		—		—			—			910
Issuance of common stock to Hercules Capital		262,761		—		3,179		—		—		—			—			3,179
Vesting of restricted stock units		30,359		—		—		—		—		—			—			—
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		6,914,811	$	1	$	469,805	$	—	$	—	$	(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		18,202		—		125		—		—		—			—			125
Issuance of common stock from restricted stock units		—		—		—		—		—		—			—			—
Vesting of restricted stock units		25,481		—		—		—		—		—			—			—
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		6,958,494	$	1	$	472,193	$	—	$	—	$	(187	)	$	(432,076	)	$	39,931
Issuance of common stock, net of issuance costs, under ATM equity offering program		633,464		—		8,570		—		—		—			—			8,570
Sale of common stock and warrants to purchase common shares under follow-on offering, net of issuance costs		6,428,571		—		41,650						—			—			41,650
Vesting of restricted stock units		15,720		—		—		—		—		—			—			—
Stock-based compensation		—		—		2,210		—		—		—			—			2,210
Unrealized loss on available-for-sale marketable securities		—		—		—		—		—		(88	)		—			(88	)
Net loss		—		—		—		—		—		—			(13,708	)		(13,708	)
Balances at September 30, 2022		14,036,249	$	1	$	524,623	$	—	$	—	$	(275	)	$	(445,784	)	$	78,565

Common Stock(1)

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