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 September 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 September 30, 2022 was 21,981,919.

 

 

 


 

F-star Therapeutics, Inc.

INDEX

PART I. FINANCIAL INFORMATION

 

 

 

Page

 

 

 

 

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

2

 

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

2

 

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

3

 

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

4

 

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 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

42

Item 4.

Controls and Procedures

42

 

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

43

Item 1A.

Risk Factors

43

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)

 

 

 

September 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

Unaudited

 

 

 

 

Assets

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

35,568

 

 

$

78,549

 

Prepaid expenses and other current assets

 

 

5,896

 

 

 

3,879

 

Tax incentive receivable

 

 

8,145

 

 

 

2,311

 

Total current assets

 

 

49,609

 

 

 

84,739

 

Property and equipment, net

 

 

879

 

 

 

887

 

Right of use asset

 

 

2,501

 

 

 

3,281

 

Goodwill

 

 

14,117

 

 

 

14,898

 

In-process research and development and intangible assets, net

 

 

16,199

 

 

 

18,765

 

Other long-term assets

 

 

412

 

 

 

451

 

Total assets

 

$

83,717

 

 

$

123,021

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

2,501

 

 

$

3,081

 

Accrued expenses and other current liabilities

 

 

7,747

 

 

 

6,241

 

Term debt

 

 

1,315

 

 

 

 

Contingent value rights

 

 

2,286

 

 

 

1,907

 

Lease obligations, current

 

 

826

 

 

 

906

 

Total current liabilities

 

 

14,675

 

 

 

12,135

 

Long term Liabilities:

 

 

 

 

 

 

Term debt

 

 

8,525

 

 

 

9,605

 

Contingent value rights

 

 

1,560

 

 

 

1,694

 

Lease obligations

 

 

2,012

 

 

 

2,723

 

Deferred tax liability

 

 

7

 

 

 

7

 

Total liabilities

 

 

26,779

 

 

 

26,164

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

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

 

 

 

 

 

 

Common Stock, $0.0001 par value; authorized 200,000,000 shares at
   September 30, 2022 and December 31, 2021;
21,981,919 and 20,874,590
   shares issued and outstanding at September 30, 2022 and December 31, 2021

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

183,310

 

 

 

176,808

 

Accumulated other comprehensive loss

 

 

1,565

 

 

 

(1,502

)

Accumulated deficit

 

 

(127,939

)

 

 

(78,451

)

Total stockholders’ equity

 

 

56,938

 

 

 

96,857

 

Total liabilities and stockholders’ equity

 

$

83,717

 

 

$

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 September 30,

 

 

For the Nine Months
Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

License revenue

 

$

1,125

 

 

$

751

 

 

$

3,676

 

 

$

3,668

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

9,670

 

 

 

5,113

 

 

 

26,431

 

 

 

20,536

 

General and administrative

 

 

5,161

 

 

 

5,239

 

 

 

18,320

 

 

 

18,169

 

Total operating expenses

 

 

14,831

 

 

 

10,352

 

 

 

44,751

 

 

 

38,705

 

Loss from operations

 

 

(13,706

)

 

 

(9,601

)

 

 

(41,075

)

 

 

(35,037

)

Other non-operating (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(378

)

 

 

(325

)

 

 

(1,020

)

 

 

(522

)

Change in fair value of contingent value rights

 

 

(60

)

 

 

(444

)

 

 

(245

)

 

 

(1,027

)

Other (expense) income

 

 

(4,263

)

 

 

(421

)

 

 

(7,148

)

 

 

752

 

Total other non-operating (expense) income

 

 

(4,701

)

 

 

(1,190

)

 

 

(8,413

)

 

 

(797

)

Net loss before income taxes

 

 

(18,407

)

 

 

(10,791

)

 

 

(49,488

)

 

 

(35,834

)

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

(190

)

Net loss

 

$

(18,407

)

 

$

(10,791

)

 

$

(49,488

)

 

$

(36,024

)

Basic and diluted adjusted net loss per common
   shares

 

$

(0.84

)

 

$

(0.52

)

 

$

(2.30

)

 

$

(2.35

)

Weighted-average number of shares
   outstanding, basic and diluted

 

 

21,856,193

 

 

 

20,617,822

 

 

 

21,507,219

 

 

 

15,300,433

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(18,407

)

 

$

(10,791

)

 

$

(49,488

)

 

$

(36,024

)

Other comprehensive (loss) income :

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

 

2,257

 

 

 

117

 

 

 

3,067

 

 

 

(65

)

Total comprehensive loss

 

$

(16,150

)

 

$

(10,674

)

 

$

(46,421

)

 

$

(36,089

)

See accompanying notes to consolidated financial statements.

 

3


 

F-star Therapeutics, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

For the three months ended September 30, 2022 and 2021

(Unaudited)

(In Thousands, Except Share Amounts)

 

 

 

Stockholders’ Equity

 

 

 

Common Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30, 2022

 

Number of
Shares

 

 

Value

 

 

Capital in Excess
of par Value

 

 

Accumulated Other
Comprehensive (Loss) Income

 

 

Accumulated
deficit

 

 

Total Stockholders’
Equity

 

Balance at June 30, 2022

 

 

21,584,723

 

 

$

2

 

 

$

181,859

 

 

$

(692

)

 

$

(109,532

)

 

$

71,637

 

Issuance of common stock for services rendered

 

 

385,527

 

 

 

 

 

 

41

 

 

 

 

 

 

 

 

 

41

 

RSU vesting, net of shares repurchased to cover tax withholding

 

 

11,669

 

 

 

 

 

 

(36

)

 

 

 

 

 

 

 

 

(36

)

Share-based compensation

 

 

 

 

 

 

 

 

1,446

 

 

 

 

 

 

 

 

 

1,446

 

Equity adjustment from foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

2,257

 

 

 

 

 

 

2,257

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,407

)

 

 

(18,407

)

Balance at September 30, 2022

 

 

21,981,919

 

 

$

2

 

 

$

183,310

 

 

$

1,565

 

 

$

(127,939

)

 

$

56,938

 

 

 

 

 

 

 

 

Common Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30, 2021

 

Number of
shares

 

 

Value

 

 

Capital in Excess
of par Value

 

 

Accumulated Other
Comprehensive (Loss) Income

 

 

Accumulated
deficit

 

 

Total Stockholders’
Equity

 

Balance at June 30, 2021

 

 

20,586,562

 

 

$

2

 

 

$

172,895

 

 

$

(1,259

)

 

$

(72,401

)

 

$

99,237

 

RSU vesting, net of shares repurchased to cover tax withholding

 

 

36,479

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

 

 

 

 

 

 

1,515

 

 

 

 

 

 

 

 

 

1,515

 

Equity adjustment from foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

117

 

 

 

 

 

 

117

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,791

)

 

 

(10,791

)

Balance at September 30, 2021

 

 

20,623,041

 

 

$

2

 

 

$

174,410

 

 

$

(1,142

)

 

$

(83,192

)

 

$

90,078

 

See accompanying notes to consolidated financial statements.

 

4


 

F-star Therapeutics, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

For the nine months ended September 30, 2022 and 2021

(Unaudited)

(In Thousands, Except Share Amounts)

 

 

 

Stockholders’ Equity

 

 

 

Common Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30, 2022

 

Number of
Shares

 

 

Value

 

 

Capital in Excess
of par Value

 

 

Accumulated Other
Comprehensive (Loss) Income

 

 

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 for services rendered

 

 

385,527

 

 

$

 

 

$

41

 

 

$

 

 

$

 

 

$

41

 

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

 

 

96,190

 

 

 

 

 

 

(124

)

 

 

 

 

 

 

 

 

(124

)

Share-based compensation

 

 

 

 

 

 

 

 

4,316

 

 

 

 

 

 

 

 

 

4,316

 

Equity adjustment from foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

3,067

 

 

 

 

 

 

3,067

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(49,488

)

 

 

(49,488

)

Balance at September 30, 2022

 

 

21,981,919

 

 

$

2

 

 

$

183,310

 

 

$

1,565

 

 

$

(127,939

)

 

$

56,938

 

 

 

 

 

 

 

 

Common Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 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

 

 

 

 

 

 

 

 

 

 

 

(65

)

 

 

 

 

 

(65

)

Stock option exercises

 

 

103,734

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

 

 

 

 

 

 

5,554

 

 

 

 

 

 

 

 

 

5,554

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(36,024

)

 

 

(36,024

)

Balance at September 30, 2021

 

 

20,623,041

 

 

$

2

 

 

$

174,410