Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Amendment No. 1)
(Mark One) |
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the fiscal year ended |
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or |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from to |
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Commission File No.
(Exact name of registrant as specified in its charter)
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Registrant’s telephone number, including area code: (
Title of Each Class |
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Trading Symbol(s) |
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Name of Each Exchange On Which Registered |
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The |
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
Indicate by check mark if the registrant is a well‑known seasoned issuer, as defined in Rule 405 of the Securities Act.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
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.
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).
Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (Check One):
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Accelerated filer ☐ |
Non‑accelerated filer ☐ |
Smaller reporting company |
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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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant based upon the closing price of the registrant’s Common Stock on The Nasdaq Global Select Market on June 30, 2022 was $
On February 14, 2023, there were
DOCUMENTS INCORPORATED BY REFERENCE
Specified portions of the registrant’s definitive Proxy Statement to be issued in conjunction with the registrant’s 2023 Annual Meeting of Stockholders, which is expected to be filed not later than 120 days after the registrant’s fiscal year ended December 31, 2022, are incorporated by reference into Part III of this Annual Report. Except as expressly incorporated by reference, the registrant’s Proxy Statement shall not be deemed to be a part of this Annual Report on Form 10-K/A.
Table of Contents
EXPLANATORY NOTE
In accordance with applicable Securities and Exchange Commission (“SEC”) rules and as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, this Amendment includes new certifications from the Company's Principal Executive Officer and Principal Financial Officer dated as of the date of filing of this Amendment.
This Amendment consists solely of the preceding cover page, this explanatory note, Part IV., Item 15., “Exhibits and Financial Statement Schedules,” in its entirety, the Exhibits, the signature page and the new certifications of the Company’s Principal Executive Officer and Principal Financial Officer.
This Amendment does not reflect events occurring after the date of the Original Filing and does not amend or update in any way the disclosures made in the Original Filing, except as described above. In particular, the information included in this Amendment under Part II, Item 8 is identical in all respects to the information included under such caption in the Original Filing. This Amendment should be read in conjunction with the Original Filing and with the Company's subsequent filings with the SEC.
2
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this Annual Report on Form 10‑K/A:
1. Financial Statements:
The following financial statements, supplementary data and reports of independent public accountants appear in Part II, Item 8 of the Original Filing and are incorporated herein by reference.
Consolidated Balance Sheets as of December 31, 2022 and 2021
Consolidated Statements of Income for each of the three years in the period ended December 31, 2022
Consolidated Statements of Comprehensive Income for each of the three years in the period ended December 31, 2022
Consolidated Statements of Stockholders’ Equity for each of the three years in the period ended December 31, 2022
Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2022
Notes to the Consolidated Financial Statements
Reports of Independent Registered Public Accounting Firm (PCAOB ID
Report of Independent Registered Public Accounting Firm (PCAOB ID 248)
2. Financial Statement Schedules:
All schedules have been omitted because of the absence of conditions under which they are required or because the required information, where material, is shown in the financial statements, financial notes or supplementary financial information.
(b) Exhibits required by Item 601 of Regulation S‑K:
The information required by this Item is set forth on the exhibit index that follows the signature page of this report.
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Exhibits
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Incorporated by Reference |
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Filed Herewith |
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Exhibit |
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Description |
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Form |
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Exhibit |
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Filing |
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2.1 |
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8-K |
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2.1 |
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5/24/2022 |
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2.2 |
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8-K |
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2.1 |
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7/11/2022 |
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3.1 |
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S‑1 |
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3.3 |
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7/26/2004 |
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3.2 |
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Certificate of Amendment of Restated Certificate of Incorporation |
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10‑Q |
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3.4 |
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3/31/2007 |
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3.3 |
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8‑K |
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3.1 |
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1/8/2016 |
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3.4 |
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Amended and Restated Bylaws, amended and restated as of February 8, 2017 |
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8‑K |
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3.1 |
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2/9/2017 |
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4.1 |
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Specimen certificate representing the common stock of the registrant |
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10‑K |
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4.1 |
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12/31/2006 |
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4.2 |
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8‑K |
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4.1 |
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1/25/2013 |
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4.3 |
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Form of 2.125% Convertible Subordinated Note Due 2023 (included in Exhibit 4.4) |
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4.4 |
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8‑K |
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4.1 |
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8/7/2017 |
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4.5 |
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10-K |
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4.9 |
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2/19/2020 |
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4.6 |
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8-K |
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4.1 |
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3/8/2022 |
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10.1 |
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10‑Q |
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10.4 |
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6/30/2010 |
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10.2 |
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10‑Q |
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10.1 |
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6/30/2014 |
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10.3 |
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S‑1 |
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10.13 |
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6/10/2004 |
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10.4* |
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10‑K |
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10.13 |
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12/31/2013 |
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10.5+ |
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10‑K |
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10.22 |
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12/31/2009 |
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10.6+ |
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Amendment to Change in Control Severance Plan effective December 16, 2009 |
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10‑K |
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10.47 |
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12/31/2009 |
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10.7+ |
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2009 Change in Control Severance Plan adopted December 16, 2009 |
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10‑K |
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10.48 |
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12/31/2009 |
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10.8 |
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8‑K |
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10.2 |
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11/29/2010 |
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10.9 |
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Amendment to Strategic Alliance Agreement, dated October 3, 2011 |
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10‑K |
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10.34 |
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12/31/2011 |
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10.10+ |
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10‑Q |
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10.38 |
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6/30/2012 |
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10.11 |
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8‑K |
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10.1 |
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1/23/2013 |
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10.12 |
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8‑K |
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10.2 |
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1/23/2013 |
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10.13 |
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8‑K/A |
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10.1 |
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3/6/2014 |
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10.14* |
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8‑K/A |
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10.2 |
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3/6/2014 |
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10.15* |
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8‑K/A |
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10.3 |
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3/6/2014 |
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4
5
32# |
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99.1 |
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X |
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99.2 |
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10-K/A |
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99.1 |
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3/17/2022 |
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101.INS |
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Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
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X** |
101.SCH |
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Inline XBRL Taxonomy Extension Schema Document |
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X** |
101.CAL |
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Inline XBRL Taxonomy Extension Calculation Linkbase Document |
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X** |
101.DEF |
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Inline XBRL Taxonomy Extension Definition Linkbase Document |
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X** |
101.LAB |
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Inline XBRL Taxonomy Extension Label Linkbase Document |
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X** |
101.PRE |
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Inline XBRL Taxonomy Extension Presentation Linkbase Document |
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X** |
104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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X** |
+ Management contract or compensatory plan or arrangement required to be filed pursuant to Item 15(b) of Form 10‑K.
* Confidential treatment has been granted for certain portions which are omitted in the copy of the exhibit electronically filed with the Securities and Exchange Commission. The omitted information has been filed separately with the Securities and Exchange Commission pursuant to Innoviva, Inc.’s application for confidential treatment.
** Previously filed with the Original Filing on February 28, 2023.
# Furnished herewith.
6
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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INNOVIVA, INC. |
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Date: March 20, 2023 |
By: |
/s/ PAVEL RAIFELD Pavel Raifeld |
7
Exhibit 23.3
Consent of Independent Registered Public Accounting Firm
We consent to the use of our report dated March 16, 2023, with respect to the consolidated financial statements of Armata Pharmaceuticals, Inc., included in the Annual Report (Form 10-K/A) of Innoviva, Inc. for the year ended December 31, 2022 and to the use of our report dated March 17, 2022, with respect to the consolidated financial statements of Armata Pharmaceuticals, Inc., incorporated by reference in the Annual Report (Form 10-K/A) of Innoviva, Inc. for the year ended December 31, 2022 filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
San Diego, California
March 20, 2023
Exhibit 31.1
Certification of Principal Executive Officer
Pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002
I, Pavel Raifeld, certify that:
1. I have reviewed this Amendment No. 1 to the annual report on Form 10‑K/A of Innoviva, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a‑15(f) and 15(d)‑15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: |
March 20, 2023 |
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/s/ PAVEL RAIFELD |
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Pavel Raifeld |
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Chief Executive Officer |
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(Principal Executive Officer) |
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Exhibit 31.2
Certification of Principal Accounting Officer
Pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002
I, Marianne Zhen, certify that:
1. I have reviewed this Amendment No. 1 to the annual report on Form 10‑K/A of Innoviva, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a‑15(f) and 15(d)‑15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: |
March 20, 2023 |
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/s/ MARIANNE ZHEN |
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Marianne Zhen |
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Chief Accounting Officer |
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(Principal Financial Officer) |
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Exhibit 32
CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER
AND PRINCIPAL ACCOUNTING OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES‑OXLEY ACT OF 2002
I, Pavel Raifeld, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002, that the Amendment No. 1 to the annual report of Innoviva, Inc. on Form 10‑K/A for the fiscal year ended December 31, 2022 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended and that information contained in such Annual Report on Form 10‑K fairly presents in all material respects the financial condition of Innoviva, Inc. at the end of the periods covered by such Annual Report on Form 10‑K and results of operations of Innoviva, Inc. for the periods covered by such Annual Report on Form 10‑K.
Date: March 20, 2023 |
By: |
/s/ PAVEL RAIFELD |
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Pavel Raifeld |
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Chief Executive Officer |
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(Principal Executive Officer) |
I, Marianne Zhen, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002, that the Amendment No. 1 to the annual report of Innoviva, Inc. on Form 10‑K/A for the fiscal year ended December 31, 2022 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended and that information contained in such Annual Report on Form 10‑K fairly presents in all material respects the financial condition of Innoviva, Inc. at the end of the periods covered by such Annual Report on Form 10‑K and results of operations of Innoviva, Inc. for the periods covered by such Annual Report on Form 10‑K.
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Date: March 20, 2023 |
By: |
/s/ MARIANNE ZHEN |
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Marianne Zhen |
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Chief Accounting Officer |
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(Principal Financial Officer) |
A signed original of this written statement required by Section 906 has been provided to Innoviva, Inc. and will be retained by it and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 99.1
ARMATA PHARMACEUTICALS, INC.
INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
Armata Pharmaceuticals, Inc. |
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Report of Independent Registered Public Accounting Firm (Ernst & Young, LLP; San Diego, CA; PCAOB ID: 42) |
2 |
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Consolidated Balance Sheets as of December 31, 2022 and 2021 |
4 |
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Consolidated Statements of Operations for the Years Ended December 31, 2022 and 2021 |
5 |
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Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2022 and 2021 |
6 |
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Consolidated Statements of Cash Flows for the Years Ended December 31, 2022 and 2021 |
7 |
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Notes to Consolidated Financial Statements for the Years Ended December 31, 2022 and 2021 |
8 |
1
Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders of Armata Pharmaceuticals, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Armata Pharmaceuticals, Inc. (the Company) as of December 31, 2022 and 2021, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.
The Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses and negative cash flows from operations and has stated that substantial doubt exists about the Company’s ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
2
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
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Accrued clinical trial expenses and related research and development costs |
Description of the Matter |
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During 2022, the Company incurred $35.0 million for research and development costs and as of December 31, 2022, the Company recorded $2.7 million for accrued clinical trial expenses. As described in Note 3 of the consolidated financial statements, the Company records accruals for estimated ongoing research and development costs, comprising payments for work performed by third party contractors, laboratories, participating clinical trial sites, and others. The Company accrues for the estimated ongoing clinical trial site costs based on patient enrollment and progress of the trial.
Auditing management's accounting for accrued clinical trial expenses and related research and development costs is especially challenging as evaluating the progress or stage of completion of the activities under the Company's research and development agreements is dependent upon a high volume of data from third-party service providers and internal clinical personnel, which is tracked in spreadsheets and other end user computing programs.
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How We Addressed the Matter in Our Audit |
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To test the completeness of the Company's accrued clinical trial expenses and related research and development costs, we obtained supporting evidence of the research and development activities performed for significant clinical trials. To assess the appropriate measurement of accrued clinical trial expenses and related research and development costs, our audit procedures included, among others, obtaining and inspecting significant agreements and agreement amendments, evaluating the Company's documentation of trial timelines and future projections of trial progress, confirming amounts incurred to-date with third-party service providers, and testing a sample of transactions and comparing the costs against related invoices and contracts. We also tested a sample of subsequent payments to evaluate the completeness of the accrued expenses and compared the results to the current year accrual. |
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2019.
San Diego, California
March 16, 2023
3
Armata Pharmaceuticals, Inc.
Consolidated Balance Sheets
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December 31, 2022 |
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December 31, 2021 |
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Assets |
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Current assets |
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Cash and cash equivalents |
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$ |
14,852,000 |
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$ |
10,288,000 |
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Awards receivable |
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1,936,000 |
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2,989,000 |
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Prepaid expenses and other current assets |
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10,259,000 |
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1,718,000 |
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Total current assets |
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27,047,000 |
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14,995,000 |
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Restricted cash |
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5,960,000 |
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1,200,000 |
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Property and equipment, net |
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3,617,000 |
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2,220,000 |
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Operating lease right-of-use asset |
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43,035,000 |
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35,852,000 |
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In-process research and development |
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10,256,000 |
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10,256,000 |
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Goodwill |
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3,490,000 |
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3,490,000 |
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Other assets |
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2,429,000 |
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1,755,000 |
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Total assets |
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$ |
95,834,000 |
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$ |
69,768,000 |
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|
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
6,034,000 |
|
$ |
2,270,000 |
|
Accrued compensation |
|
|
1,828,000 |
|
|
1,035,000 |
|
Current portion of operating lease liabilities |
|
|
17,011,000 |
|
|
1,509,000 |
|
Total current liabilities |
|
|
24,873,000 |
|
|
4,814,000 |
|
Operating lease liabilities, net of current portion |
|
|
31,804,000 |
|
|
36,480,000 |
|
Deferred tax liability |
|
|
3,077,000 |
|
|
3,077,000 |
|
Total liabilities |
|
|
59,754,000 |
|
|
44,371,000 |
|
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
Common stock, $0.01 par value; 217,000,000 shares authorized; 36,144,706 and 27,112,299 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively |
|
|
361,000 |
|
|
271,000 |
|
Additional paid-in capital |
|
|
275,493,000 |
|
|
227,983,000 |
|
Accumulated deficit |
|
|
(239,774,000) |
|
|
(202,857,000) |
|
Total stockholders’ equity |
|
|
36,080,000 |
|
|
25,397,000 |
|
Total liabilities and stockholders’ equity |
|
$ |
95,834,000 |
|
$ |
69,768,000 |
|
The accompanying notes are an integral part of these consolidated financial statements.
4
Armata Pharmaceuticals, Inc.
Consolidated Statements of Operations
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
||||
|
|
December 31, |
|
||||
|
|
2022 |
|
2021 |
|
||
|
|
|
|
|
|
|
|
Grant revenue |
|
$ |
5,508,000 |
|
$ |
4,474,000 |
|
Operating expenses |
|
|
|
|
|
|
|
Research and development |
|
|
35,017,000 |
|
|
20,015,000 |
|
General and administrative |
|
|
7,437,000 |
|
|
8,281,000 |
|
Total operating expenses |
|
|
42,454,000 |
|
|
28,296,000 |
|
Loss from operations |
|
|
(36,946,000) |
|
|
(23,822,000) |
|
Other income (expense) |
|
|
|
|
|
|
|
Gain upon extinguishment of Paycheck Protection Program loan |
|
|
— |
|
|
726,000 |
|
Interest income |
|
|
29,000 |
|
|
5,000 |
|
Interest expense |
|
|
— |
|
|
(64,000) |
|
Total other income (expense), net |
|
|
29,000 |
|
|
667,000 |
|
Net loss |
|
$ |
(36,917,000) |
|
$ |
(23,155,000) |
|
Per share information: |
|
|
|
|
|
|
|
Net loss per share, basic and diluted |
|
$ |
(1.08) |
|
$ |
(0.96) |
|
Weighted average shares outstanding, basic and diluted |
|
|
34,294,124 |
|
|
24,104,146 |
|
The accompanying notes are an integral part of these consolidated financial statements.
5
Armata Pharmaceuticals, Inc.
Consolidated Statements of Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity |
||||||||||||
|
|
Common Stock |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
Additional |
|
|
|
Total |
|||
|
|
|
|
|
|
|
Paid-in |
|
Accumulated |
|
Stockholders’ |
|||
|
|
Shares |
|
Amount |
|
Capital |
|
Deficit |
|
Equity |
||||
Balances, December 31, 2020 |
|
18,688,461 |
|
$ |
187,000 |
|
$ |
198,372,000 |
|
$ |
(179,702,000) |
|
$ |
18,857,000 |
Sale of common stock, net of issuance costs |
|
8,275,060 |
|
|
83,000 |
|
|
26,223,000 |
|
|
— |
|
|
26,306,000 |
Exercises of warrants |
|
52,000 |
|
|
1,000 |
|
|
290,000 |
|
|
— |
|
|
291,000 |
Return of restricted stock awards for tax withholdings |
|
(25,424) |
|
|
— |
|
|
(106,000) |
|
|
— |
|
|
(106,000) |
Forfeiture of restricted stock awards |
|
(1,047) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Exercise of stock options |
|
99,517 |
|
|
— |
|
|
322,000 |
|
|
— |
|
|
322,000 |
Issuance of inducement stock awards |
|
23,732 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Stock-based compensation |
|
— |
|
|
— |
|
|
2,882,000 |
|
|
— |
|
|
2,882,000 |
Net loss |
|
— |
|
|
— |
|
|
— |
|
|
(23,155,000) |
|
|
(23,155,000) |
Balances, December 31, 2021 |
|
27,112,299 |
|
$ |
271,000 |
|
$ |
227,983,000 |
|
$ |
(202,857,000) |
|
$ |
25,397,000 |
Sale of common stock, net of issuance costs |
|
9,000,000 |
|
|
90,000 |
|
|
44,301,000 |
|
|
— |
|
|
44,391,000 |
Return of restricted stock awards for tax withholdings |
|
(5,511) |
|
|
— |
|
|
(21,000) |
|
|
— |
|
|
(21,000) |
Forfeiture of restricted stock awards |
|
(369) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Exercise of stock options |
|
38,287 |
|
|
— |
|
|
125,000 |
|
|
— |
|
|
125,000 |
Stock-based compensation |
|
— |
|
|
— |
|
|
3,105,000 |
|
|
— |
|
|
3,105,000 |
Net loss |
|
— |
|
|
— |
|
|
— |
|
|
(36,917,000) |
|
|
(36,917,000) |
Balances, December 31, 2022 |
|
36,144,706 |
|
$ |
361,000 |
|
$ |
275,493,000 |
|
$ |
(239,774,000) |
|
$ |
36,080,000 |
The accompanying notes are an integral part of these consolidated financial statements.
6
Armata Pharmaceuticals, Inc.
Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||
|
|
2022 |
|
2021 |
||
|
|
|
|
|
||
Operating activities: |
|
|
|
|
|
|
Net loss |
|
$ |
(36,917,000) |
|
$ |
(23,155,000) |
Adjustments required to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
Depreciation |
|
|
892,000 |
|
|
1,169,000 |
Gain upon extinguishment of Paycheck Protection Program loan |
|
|
— |
|
|
(722,000) |
Stock-based compensation |
|
|
3,105,000 |
|
|
2,882,000 |
Non-cash interest expense |
|
|
— |
|
|
60,000 |
Payment of accreted interest for deferred consideration for asset acquisition |
|
|
— |
|
|
(586,000) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Awards receivable |
|
|
1,053,000 |
|
|
(2,428,000) |
Accounts payable and accrued liabilities |
|
|
3,665,000 |
|
|
184,000 |
Accrued compensation |
|
|
793,000 |
|
|
472,000 |
Operating lease right-of-use asset and liability, net |
|
|
3,643,000 |
|
|
499,000 |
Prepaid expenses and other current assets |
|
|
(8,715,000) |
|
|
(1,950,000) |
Net cash used in operating activities |
|
|
(32,481,000) |
|
|
(23,575,000) |
Investing activities: |
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(2,211,000) |
|
|
(1,304,000) |
Net cash used in investing activities |
|
|
(2,211,000) |
|
|
(1,304,000) |
Financing activities: |
|
|
|
|
|
|
Principal payment of deferred consideration for asset acquisition |
|
|
— |
|
|
(1,414,000) |
Payment of deferred offering costs |
|
|
(500,000) |
|
|
— |
Proceeds from sale of common stock, net of offering costs |
|
|
44,391,000 |
|
|
26,319,000 |
Proceeds from exercise of warrants and stock options |
|
|
125,000 |
|
|
613,000 |
Net cash provided by financing activities |
|
|
44,016,000 |
|
|
25,518,000 |
Net increase in cash, cash equivalents and restricted cash |
|
|
9,324,000 |
|
|
639,000 |
Cash, cash equivalents and restricted cash, beginning of period |
|
|
11,488,000 |
|
|
10,849,000 |
Cash, cash equivalents and restricted cash, end of period |
|
$ |
20,812,000 |
|
$ |
11,488,000 |
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
ROU asset obtained by assuming operating lease liabilities |
|
$ |
8,669,000 |
|
$ |
26,056,000 |
Paycheck Protection Program loan forgiveness |
|
$ |
— |
|
$ |
722,000 |
Unpaid offering costs |
|
$ |
— |
|
$ |
13,000 |
Property and equipment included in accounts payable |
|
$ |
78,000 |
|
$ |
38,000 |
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||
|
|
2022 |
|
2021 |
||
Cash and cash equivalents |
|
$ |
14,852,000 |
|
$ |
10,288,000 |
Restricted cash |
|
|
5,960,000 |
|
|
1,200,000 |
Cash, cash equivalents and restricted cash |
|
$ |
20,812,000 |
|
$ |
11,488,000 |
The accompanying notes are an integral part of these consolidated financial statements.
7
Armata Pharmaceuticals, Inc.
Notes to Consolidated Financial Statements
1. Organization and Description of the Business
Armata Pharmaceuticals, Inc. (“Armata”, and together with its subsidiaries, is referred to herein as, the “Company”) is a clinical-stage biotechnology company focused on the development of precisely targeted bacteriophage therapeutics for the treatment of antibiotic-resistant and difficult-to-treat bacterial infections using its proprietary bacteriophage-based technology. On May 9, 2019, the Company’s predecessor, C3J Therapeutics, Inc. (“C3J”) completed a reverse merger with AmpliPhi Biosciences Corporation, a bacteriophage development stage company (“AmpliPhi”), where Ceres Merger Sub, Inc., a wholly-owned subsidiary of AmpliPhi, merged with and into C3J (the “Merger”). Immediately prior to the Merger, AmpliPhi changed its name to Armata Pharmaceuticals, Inc. Armata’s common stock is traded on the NYSE American exchange under the ticker symbol “ARMP”.
2. Liquidity
The Company has prepared its consolidated financial statements on a going concern basis, which assumes that the Company will realize its assets and satisfy its liabilities in the normal course of business. However, the Company has incurred net losses since its inception and has negative operating cash flows. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of the uncertainty concerning the Company’s ability to continue as a going concern.
On January 10, 2023, the Company entered into, as borrower, a secured convertible credit and security agreement (the “Credit Agreement”) with Innoviva Strategic Opportunities LLC, a wholly‐owned subsidiary of Innoviva, Inc. (Nasdaq: INVA) (collectively, "Innoviva"), a principal stockholder of the Company. The Credit Agreement provides for a secured term loan facility in an aggregate amount of $30 million (the “Loan”) at an interest rate of 8.0% per annum, and has a maturity date of January 10, 2024. Repayment of the Loan is required to be guaranteed by the Company’s domestic subsidiaries and foreign material subsidiaries, and the Loan is secured by substantially all of the assets of the Company and the subsidiary guarantors.
The Credit Agreement provides that if a Qualified Financing (as defined in the Credit Agreement) occurs, the outstanding principal amount of, and all accrued and unpaid interest on, the Loan shall be converted into shares of the Company’s common stock, par value $0.01 per share (“Common Stock”) at a price per share equal to a 15.0% discount to the lowest price per share for Common Stock paid by investors in a Qualified Financing (which price paid by investors in a Qualified Financing may not be less than a15.0% discount to the closing price of Common Stock immediately prior to the consummation of a Qualified Financing event). The Credit Agreement also requires the Company to file a registration statement (the “Registration Statement”) for the resale of all securities issued to the lender in connection with any conversion under the Credit Agreement. After the Registration Statement has been declared effective by the U.S. Securities and Exchange Commission, any outstanding Loan amount, including all accrued and unpaid interest thereon, may be converted at the lender’s option, into shares of Common Stock at a price per share equal to the greater of book value or market value per share of Common Stock on the date immediately preceding the effective date of the Credit Agreement, which is $1.52 (as may be appropriately adjusted for any stock split, combination or similar act).
On February 9, 2022, the Company entered into a securities purchase agreement (“February 2022 Securities Purchase Agreement”) to sell its common stock and warrants to Innoviva. The gross proceeds to the Company from the transaction were $45 million.
Pursuant and subject to the terms and conditions of the securities purchase agreement and related agreements, Innoviva agreed to purchase 9,000,000 newly issued shares of our common stock, at a price of $5.00 per share, and warrants to purchase up to 4,500,000 additional shares of our common stock, with an exercise price of $5.00 per share. The stock purchases were completed in two tranches. On February 9, 2022, Innoviva purchased 3,614,792 shares of common stock and warrants to purchase 1,807,396 shares of common stock for an aggregate purchase price of approximately $18.1 million. On March 31, 2022, upon our stockholders voting in favor of the transaction, Innoviva purchased approximately 5,385,208 shares of common stock and warrants to purchase approximately 2,692,604 shares of common stock for an aggregate purchase price of $26.9 million.
On October 28, 2021, the Company entered into a securities purchase agreement (the “October 2021 Securities Purchase Agreement”) with the Cystic Fibrosis Foundation (“CFF”), a Delaware corporation, the Company’s partner for its lead Phase 1b/2a clinical development program, and Innoviva Strategic Opportunities LLC, a wholly-owned subsidiary of Innoviva, Inc. (Nasdaq: INVA) (collectively, “Innoviva”) for the private placement of newly issued shares of common stock, par value $0.01 per share, of the Company (“Common Stock”). Pursuant to the October 2021 Securities Purchase Agreement, the Company issued and sold 909,091 shares to CFF and 1,212,122 shares to Innoviva, each at a per share price of $3.30 (the “October 2021 Private Placements”). The Company received aggregate gross proceeds from the October 2021 Private Placements of approximately $7.0 million, before deducting transaction expenses.
8
On January 26, 2021, the Company entered into a securities purchase agreement (the “January 2021 Securities Purchase Agreement”) with Innoviva, pursuant to which the Company issued and sold to Innoviva, in a private placement, up to 6,153,847 newly issued shares of Common Stock, and warrants (the “Common Warrants”) to purchase up to 6,153,847 shares of Common Stock, with an exercise price per share of $3.25 (the “January 2021 Private Placement”).
Management plans to raise additional capital through equity offerings, debt financings, or other capital sources, including potential collaborations, licenses and other similar arrangements. While management believes this plan to raise additional funds will alleviate the conditions that raise substantial doubt, these plans are not entirely within its control and cannot be assessed as being probable of occurring. The Company’s ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, financial markets in the United States and worldwide. The Company may not be able to secure additional financing in a timely manner or on favorable terms, if at all. Furthermore, if the Company issues equity securities to raise additional funds, its existing stockholders may experience dilution, and the new equity securities may have rights, preferences and privileges senior to those of the Company’s existing stockholders. If the Company raises additional funds through collaboration, licensing or other similar arrangements, it may be necessary to relinquish valuable rights to its potential products on terms that are not favorable to the Company. If the Company is unable to raise capital when needed or on attractive terms, it would be forced to delay, reduce or eliminate its research and development programs or other operations. If any of these events occur, the Company’s ability to achieve the development and commercialization goals would be adversely affected.
3. Significant Accounting Policies
Basis of Presentation
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries including C3J, Biocontrol Limited and AmpliPhi Australia Pty Ltd. All significant intercompany accounts and transactions have been eliminated.
Use of Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in its consolidated financial statements and accompanying notes. On an ongoing basis, management evaluates these estimates and judgments, which are based on historical and anticipated results and trends and on various other assumptions that management believes to be reasonable under the circumstances. By their nature, estimates are subject to an inherent degree of uncertainty and, as such, actual results may differ from management’s estimates.
Cash and Cash Equivalents