10-Q
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s

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

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: 001-37718

 

F-STAR THERAPEUTICS, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

52-2386345

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

Eddeva B920 Babraham Research Campus

Cambridge, United Kingdom

CB22 3AT

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: +44-1223-497400

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

 

Trading

Symbol

 

Name of each exchange
on which registered

 

Common Stock, $0.0001 par value per share

FSTX

The Nasdaq Stock Market

(Nasdaq Capital 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

The number of shares of Registrant’s Common Stock outstanding as of June 30, 2022 was 21,584,723.

 

 

 


 

F-star Therapeutics, Inc.

INDEX

PART I. FINANCIAL INFORMATION

 

 

 

Page

 

 

 

 

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

2

 

Condensed Consolidated Balance Sheets at June 30, 2022 and December 31, 2021

2

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2022 and 2021

3

 

Condensed Consolidated Statement of Stockholders’ Equity for the Three and Six Months Ended June 30, 2022 and 2021

4

 

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021

6

 

Notes to Unaudited Condensed Consolidated Financial Statements

7

Item 2.

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

25

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

41

Item 4.

Controls and Procedures

41

 

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

42

Item 1A.

Risk Factors

42

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

44

Item 3

Defaults Upon Senior Securities

44

Item 4

Mine Safety Disclosures

44

Item 5

Other Information

44

Item 6.

Exhibits

44

Exhibit Index

45

Signatures

46

 

i


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

F-star Therapeutics, Inc.

Condensed Consolidated Balance Sheets

(In Thousands, Except Share and Per Share Amounts)

 

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

Unaudited

 

 

 

 

Assets

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

52,963

 

 

$

78,549

 

Prepaid expenses and other current assets

 

 

4,825

 

 

 

3,879

 

Tax incentive receivable

 

 

7,074

 

 

 

2,311

 

Total current assets

 

 

64,862

 

 

 

84,739

 

Property and equipment, net

 

 

813

 

 

 

887

 

Right of use asset

 

 

2,760

 

 

 

3,281

 

Goodwill

 

 

14,451

 

 

 

14,898

 

In-process research and development and intangible assets, net

 

 

17,329

 

 

 

18,765

 

Other long-term assets

 

 

429

 

 

 

451

 

Total assets

 

$

100,644

 

 

$

123,021

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

4,048

 

 

$

3,081

 

Accrued expenses and other current liabilities

 

 

8,314

 

 

 

6,241

 

Term debt

 

 

353

 

 

 

 

Contingent value rights

 

 

1,740

 

 

 

1,907

 

Lease obligations, current

 

 

862

 

 

 

906

 

Total current liabilities

 

 

15,317

 

 

 

12,135

 

Long term Liabilities:

 

 

 

 

 

 

Term debt

 

 

9,398

 

 

 

9,605

 

Contingent value rights

 

 

2,046

 

 

 

1,694

 

Lease obligations

 

 

2,239

 

 

 

2,723

 

Deferred tax liability

 

 

7

 

 

 

7

 

Total liabilities

 

 

29,007

 

 

 

26,164

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.0001 par value; authorized, 10,000,000 shares at
   June 30, 2022 and December 31, 2021;
no shares issued or
   outstanding at June 30, 2022 and December 31, 2021

 

 

 

 

 

 

Common Stock, $0.0001 par value; authorized 200,000,000 shares at
   June 30, 2022 and December 31, 2021;
21,584,723 and 20,874,590
   shares issued and outstanding at June 30, 2022 and December 31, 2021

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

181,859

 

 

 

176,808

 

Accumulated other comprehensive loss

 

 

(692

)

 

 

(1,502

)

Accumulated deficit

 

 

(109,532

)

 

 

(78,451

)

Total stockholders’ equity

 

 

71,637

 

 

 

96,857

 

Total liabilities and stockholders’ equity

 

$

100,644

 

 

$

123,021

 

See accompanying notes to consolidated financial statements.

 

2


 

F-star Therapeutics, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(In Thousands, Except Share and Per Share Amounts)

 

 

 

For the Three Months
Ended June 30,

 

 

For the Six Months
Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

License revenue

 

$

 

 

$

 

 

$

2,551

 

 

$

2,917

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

8,724

 

 

 

8,291

 

 

 

16,761

 

 

 

15,423

 

General and administrative

 

 

7,457

 

 

 

6,501

 

 

 

13,159

 

 

 

12,930

 

Total operating expenses

 

 

16,181

 

 

 

14,792

 

 

 

29,920

 

 

 

28,353

 

Loss from operations

 

 

(16,181

)

 

 

(14,792

)

 

 

(27,369

)

 

 

(25,436

)

Other non-operating (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(334

)

 

 

(110

)

 

 

(642

)

 

 

(197

)

Change in fair value of contingent value rights

 

 

(127

)

 

 

(583

)

 

 

(185

)

 

 

(583

)

Other (expense) income

 

 

(2,352

)

 

 

68

 

 

 

(2,885

)

 

 

1,173

 

Total other non-operating (expense) income

 

 

(2,813

)

 

 

(625

)

 

 

(3,712

)

 

 

393

 

Net loss before income taxes

 

 

(18,994

)

 

 

(15,417

)

 

 

(31,081

)

 

 

(25,043

)

Income tax expense

 

 

 

 

 

(82

)

 

 

 

 

 

(190

)

Net loss

 

$

(18,994

)

 

$

(15,499

)

 

$

(31,081

)

 

$

(25,233

)

Basic and diluted adjusted net loss per common
   shares

 

$

(0.88

)

 

$

(0.91

)

 

$

(1.46

)

 

$

(1.93

)

Weighted-average number of shares
   outstanding, basic and diluted

 

 

21,573,499

 

 

 

17,022,417

 

 

 

21,329,840

 

 

 

13,083,230

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(18,994

)

 

$

(15,499

)

 

$

(31,081

)

 

$

(25,233

)

Other comprehensive (loss) gain :

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

 

749

 

 

 

286

 

 

 

810

 

 

 

(182

)

Total comprehensive loss

 

$

(18,245

)

 

$

(15,213

)

 

$

(30,271

)

 

$

(25,415

)

See accompanying notes to consolidated financial statements.

 

3


 

F-star Therapeutics, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

For the three months ended June 30, 2022 and 2021

(Unaudited)

(In Thousands, Except Share Amounts)

 

 

 

Stockholders’ Equity

 

 

 

Common Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30, 2022

 

Number of
Shares

 

 

Value

 

 

Capital in Excess
of par Value

 

 

Accumulated Other
Comprehensive
Loss

 

 

Accumulated
deficit

 

 

Total Stockholders’
Equity

 

Balance at March 31, 2022

 

 

21,493,212

 

 

$

2

 

 

$

180,141

 

 

$

(1,441

)

 

$

(90,538

)

 

$

88,164

 

Issuance of common stock in connection with
   at-the-market offering, net of issuance costs

 

 

80,558

 

 

 

 

 

 

320

 

 

 

 

 

 

 

 

 

320

 

RSU vesting, net of shares repurchased to cover tax
  withholding

 

 

10,953

 

 

 

 

 

 

(17

)

 

 

 

 

 

 

 

 

(17

)

Share-based compensation

 

 

 

 

 

 

 

 

1,415

 

 

 

 

 

 

 

 

 

1,415

 

Equity adjustment from foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

749

 

 

 

 

 

 

749

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,994

)

 

 

(18,994

)

Balance at June 30, 2022

 

 

21,584,723

 

 

$

2

 

 

$

181,859

 

 

$

(692

)

 

$

(109,532

)

 

$

71,637

 

 

 

 

 

 

 

 

Common Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30, 2021

 

Number of
shares

 

 

Value

 

 

Capital in Excess
of par Value

 

 

Accumulated Other
Comprehensive Loss

 

 

Accumulated
deficit

 

 

Total Stockholders’
Equity

 

Balance at March 31, 2021

 

 

9,100,320

 

 

$

1

 

 

$

93,418

 

 

$

(1,545

)

 

$

(56,902

)

 

$

34,972

 

Issuance of warrants in connection with term loan

 

 

 

 

 

 

 

 

326

 

 

 

 

 

 

 

 

 

326

 

Issuance of common stock in connection with public offering, net of issuance costs

 

 

979,843

 

 

 

 

 

 

9,115

 

 

 

 

 

 

 

 

 

9,115

 

Issuance of common stock in connection with
   public offering, net of issuance costs

 

 

10,439,347

 

 

 

1

 

 

 

68,177

 

 

 

 

 

 

 

 

 

68,178

 

Equity adjustment from foreign
   currency translation

 

 

 

 

 

 

 

 

 

 

 

286

 

 

 

 

 

 

286

 

Stock option exercises

 

 

67,052

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

 

 

 

 

 

 

1,859

 

 

 

 

 

 

 

 

 

1,859

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(15,499

)

 

 

(15,499

)

Balance at June 30, 2021

 

 

20,586,562

 

 

$

2

 

 

$

172,895

 

 

$

(1,259

)

 

$

(72,401

)

 

$

99,237

 

See accompanying notes to consolidated financial statements.

 

4


 

F-star Therapeutics, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

For the six months ended June 30, 2022 and 2021

(Unaudited)

(In Thousands, Except Share Amounts)

 

 

 

Stockholders’ Equity

 

 

 

Common Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended June 30, 2022

 

Number of
Shares

 

 

Value

 

 

Capital in Excess
of par Value

 

 

Accumulated Other
Comprehensive Loss

 

 

Accumulated
deficit

 

 

Total Stockholders’
Equity

 

Balance at December 31, 2021

 

 

20,874,590

 

 

$

2

 

 

$

176,808

 

 

$

(1,502

)

 

$

(78,451

)

 

$

96,857

 

Issuance of common stock in connection with
   at-the-market offering, net of issuance costs

 

 

625,612

 

 

 

 

 

 

2,269

 

 

 

 

 

 

 

 

 

2,269

 

RSU vesting, net of shares repurchased to cover tax
  withholding

 

 

84,521

 

 

 

 

 

 

(88

)

 

 

 

 

 

 

 

 

(88

)

Share-based compensation

 

 

 

 

 

 

 

 

2,870

 

 

 

 

 

 

 

 

 

2,870

 

Equity adjustment from foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

810

 

 

 

 

 

 

810

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(31,081

)

 

 

(31,081

)

Balance at June 30, 2022

 

 

21,584,723

 

 

$

2

 

 

$

181,859

 

 

$

(692

)

 

$

(109,532

)

 

$

71,637

 

 

 

 

 

 

 

 

Common Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended June 30, 2021

 

Number of
Shares

 

 

Value

 

 

Capital in Excess
of par Value

 

 

Accumulated Other
Comprehensive Loss

 

 

Accumulated
deficit

 

 

Total Stockholders’
Equity

 

Balance at December 31, 2020

 

 

9,100,117

 

 

$

1

 

 

$

91,238

 

 

$

(1,077

)

 

$

(47,168

)

 

$

42,994

 

Issuance of warrants in connection with term loan

 

 

 

 

 

 

 

 

326

 

 

 

 

 

 

 

 

 

326

 

Issuance of common stock in connection with public offering, net of issuance costs

 

 

979,843

 

 

 

 

 

 

9,115

 

 

 

 

 

 

 

 

 

9,115

 

Issuance of common stock in connection with
   public offering, net of issuance costs

 

 

10,439,347

 

 

 

1

 

 

 

68,177

 

 

 

 

 

 

 

 

 

68,178

 

Equity adjustment from foreign
   currency translation

 

 

 

 

 

 

 

 

 

 

 

(182

)

 

 

 

 

 

(182

)

Stock option exercises

 

 

67,255

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

 

 

 

 

 

 

4,039

 

 

 

 

 

 

 

 

 

4,039

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(25,233

)

 

 

(25,233

)

Balance at June 30, 2021

 

 

20,586,562

 

 

$

2

 

 

$

172,895

 

 

$

(1,259

)

 

$

(72,401

)

 

$

99,237

 

See accompanying notes to consolidated financial statements.

5


 

F-star Therapeutics, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In Thousands)

 

 

 

For the Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(31,081

)

 

$

(25,233

)

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

 

 

 

 

 

 

Share based compensation expense

 

 

2,870

 

 

 

4,039

 

Foreign currency (gain) loss

 

 

2,170

 

 

 

(570

)

(Gain) loss on disposal of property, plant and equipment

 

 

 

 

 

(9

)

Depreciation

 

 

236

 

 

 

297

 

Amortization of intangible assets