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 June 30, 2023

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: 001-38470

 

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, 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 4, 2023, the registrant had 14,601,258 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, 2023 (unaudited) and December 31, 2022

2

 

Condensed Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2023 and 2022 (unaudited)

3

 

Condensed Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2023 and 2022 (unaudited)

4

 

Condensed Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022 (unaudited)

6

 

Notes to Condensed Financial Statements (unaudited)

7

Item 2

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

22

Item 3

Quantitative and Qualitative Disclosures About Market Risk

33

Item 4

Controls and Procedures

33

 

 

 

PART II. OTHER INFORMATION

 

 

 

Item 1

Legal Proceedings

34

Item 1A

Risk Factors

34

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

79

Item 3

Default Upon Senior Securities

79

Item 4

Mine Safety Disclosures

79

Item 5

Other Information

79

Item 6

Exhibits

80

Signatures

81

 

 

1


 

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, 2023

 

 

December 31, 2022(1)

 

 

 

(Unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

19,118

 

 

$

12,736

 

Short-term marketable securities

 

 

49,974

 

 

 

82,059

 

Prepaid expenses and other current assets

 

 

3,874

 

 

 

1,740

 

Total current assets

 

 

72,966

 

 

 

96,535

 

Property and equipment, net

 

 

7,181

 

 

 

7,825

 

Operating lease right-of-use assets

 

 

18,061

 

 

 

19,042

 

Long-term marketable securities

 

 

1,899

 

 

 

 

Long-term restricted cash

 

 

896

 

 

 

896

 

Other long-term assets

 

 

5

 

 

 

52

 

Total assets

 

$

101,008

 

 

$

124,350

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

1,449

 

 

$

1,790

 

Accrued compensation

 

 

1,652

 

 

 

3,020

 

Accrued and other current liabilities

 

 

5,417

 

 

 

5,334

 

Current portion of long-term debt

 

 

13,704

 

 

 

9,476

 

Total current liabilities

 

 

22,222

 

 

 

19,620

 

Operating lease liability, net of current portion

 

 

25,297

 

 

 

26,991

 

Long-term debt, net of current portion

 

 

4,082

 

 

 

10,891

 

Total liabilities

 

 

51,601

 

 

 

57,502

 

Commitments and contingencies (Note 8)

 

 

 

 

 

 

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, 2023 and December 31, 2022;
  
14,595,477 and 14,215,302 shares issued and outstanding
  as of June 30, 2023 and December 31, 2022, respectively
(2)

 

 

1

 

 

 

1

 

Additional paid-in capital

 

 

532,563

 

 

 

527,049

 

Accumulated other comprehensive loss

 

 

(136

)

 

 

(251

)

Accumulated deficit

 

 

(483,021

)

 

 

(459,951

)

Total stockholders’ equity

 

 

49,407

 

 

 

66,848

 

Total liabilities and stockholders’ equity

 

$

101,008

 

 

$

124,350

 

 

(1) The balance sheet as of December 31, 2022 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 on October 19, 2022 where every ten shares of its common stock issued and outstanding was converted into one share of common stock. Any fractional post-split shares as a result of the reverse split were rounded down to the nearest whole post-split share. Shareholders of the Company previously authorized the Board of Directors to approve a reverse stock split at the annual meeting on October 18, 2022. 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.

2


 

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,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Licensing revenue - related party

 

$

 

 

$

236

 

 

$

 

 

$

236

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

6,529

 

 

 

7,553

 

 

 

12,364

 

 

 

20,014

 

General and administrative

 

 

5,433

 

 

 

4,941

 

 

 

10,252

 

 

 

10,747

 

Total operating expenses

 

 

11,962

 

 

 

12,494

 

 

 

22,616

 

 

 

30,761

 

Loss from operations

 

 

(11,962

)

 

 

(12,258

)

 

 

(22,616

)

 

 

(30,525

)

Interest income

 

 

805

 

 

 

58

 

 

 

1,660

 

 

 

87

 

Interest expense

 

 

(979

)

 

 

(894

)

 

 

(1,981

)

 

 

(1,702

)

Other income (expense), net

 

 

(69

)

 

 

(43

)

 

 

(133

)

 

 

88

 

Net loss

 

 

(12,205

)

 

 

(13,137

)

 

 

(23,070

)

 

 

(32,052

)

Other comprehensive (loss) gain

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on marketable debt securities

 

 

14

 

 

 

(11

)

 

 

115

 

 

 

(143

)

Comprehensive loss

 

$

(12,191

)

 

$

(13,148

)

 

$

(22,955

)

 

$

(32,195

)

Net loss per share, basic and diluted

 

$

(0.85

)

 

$

(1.90

)

 

$

(1.61

)

 

$

(4.69

)

Weighted-average number of shares used
in computing net loss per share, basic and
diluted
(1)

 

 

14,425,775

 

 

 

6,924,782

 

 

 

14,369,643

 

 

 

6,839,293

 

 

(1) The Company effected a reverse stock split of its outstanding shares of common stock on October 19, 2022 where every ten shares of its common stock issued and outstanding was converted into one share of common stock. Any fractional post-split shares as a result of the reverse split were rounded down to the nearest whole post-split share. Shareholders of the Company previously authorized the Board of Directors to approve a reverse stock split at the annual meeting on October 18, 2022. 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.

3


 

Unity Biotechnology, Inc.

Condensed Statements of Stockholders’ Equity

(In thousands, except share amounts)

(Unaudited)

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Gain (Loss)

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2022

 

 

14,215,302

 

 

$

1

 

 

$

527,049

 

 

$

(251

)

 

$

(459,951

)

 

$

66,848

 

Issuance of common stock, net of issuance costs,
   under at-the-market (“ATM”) offering program

 

 

106,781

 

 

 

 

 

 

274

 

 

 

 

 

 

 

 

 

274

 

Vesting of restricted stock units

 

 

37,131

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

2,270

 

 

 

 

 

 

 

 

 

2,270

 

Unrealized gain on available-for-sale marketable securities

 

 

 

 

 

 

 

 

 

 

 

101

 

 

 

 

 

 

101

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,865

)

 

 

(10,865

)

Balances at March 31, 2023

 

 

14,359,214

 

 

$

1

 

 

$

529,593

 

 

$

(150

)

 

$

(470,816

)

 

$

58,628

 

Issuance of common stock, net of issuance costs,
   under at-the-market (“ATM”) offering program

 

 

168,000

 

 

 

 

 

 

518

 

 

 

 

 

 

 

 

 

518

 

Issuance of common stock under 2018 ESPP

 

 

41,497

 

 

 

 

 

 

91

 

 

 

 

 

 

 

 

 

91

 

Vesting of restricted stock units

 

 

26,766

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

2,361

 

 

 

 

 

 

 

 

 

2,361

 

Unrealized gain on available-for-sale marketable securities

 

 

 

 

 

 

 

 

 

 

 

14

 

 

 

 

 

 

14

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12,205

)

 

 

(12,205

)

Balances at June 30, 2023

 

 

14,595,477

 

 

$

1

 

 

$

532,563

 

 

$

(136

)

 

$

(483,021

)

 

$

49,407

 

 

 

 

Common Stock(1)

 

 

Additional
Paid-In

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

(Loss)

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2021

 

 

6,299,158

 

 

$

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

 

 

30,358

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

6,914,777

 

 

$

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

 

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

 

 

6,958,460

 

 

$

1

 

 

$

472,193

 

 

$

(187

)

 

$

(432,076

)

 

$

39,931

 

 

4


 

(1) The Company effected a reverse stock split of its outstanding shares of common stock on October 19, 2022 where every ten shares of its common stock issued and outstanding was converted into one share of common stock. Any fractional post-split shares as a result of the reverse split were rounded down to the nearest whole post-split share. Shareholders of the Company previously authorized the Board of Directors to approve a reverse stock split at the annual meeting on October 18, 2022. 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.

5


 

Unity Biotechnology, Inc.

Condensed Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

Operating activities

 

 

 

 

 

 

Net loss

 

$

(23,070

)

 

$

(32,052

)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

643

 

 

 

1,236

 

Amortization of debt issuance costs

 

 

653

 

 

 

708

 

Debt extinguishment gain upon conversion to equity

 

 

 

 

 

(199

)

Net accretion and amortization of premium and discounts on
   marketable securities

 

 

(831

)

 

 

231

 

Gain on disposal of property and equipment

 

 

 

 

 

(151

)

Stock-based compensation

 

 

4,631

 

 

 

4,910

 

Non-cash rent expense

 

 

(540

)

 

 

(1,263

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

(2,134

)

 

 

(886

)

Other long-term assets

 

 

47

 

 

 

29

 

Accounts payable

 

 

(341

)

 

 

(541

)

Accrued compensation

 

 

(1,368

)

 

 

(737

)

Accrued liabilities and other current liabilities

 

 

(89

)

 

 

(1,069

)

Other long-term liabilities

 

 

 

 

 

(23

)

Net cash used in operating activities

 

 

(22,399

)

 

 

(29,807

)

Investing activities

 

 

 

 

 

 

Purchase of marketable securities

 

 

(21,868

)

 

 

(21,526

)

Maturities of marketable securities

 

 

53,000

 

 

 

33,250

 

Purchase of property and equipment