What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-08-10 compared with 2023-05-11 · 74 added, 92 removed, 249 unchanged (40% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per-share)

(In thousands, except share and per-share amounts)

Current assets:

20 unchanged sentences

200,000,000 shares authorized;

49,286,710 and 49,199,845 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

52,657,661 and 49,199,845 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

Additional paid-in capital

6 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per-share)

(In thousands, except share and per-share amounts)

Three Months Ended

Six Months Ended

Operating expenses:

8 unchanged sentences

Total other income (expense), net

Other comprehensive income — unrealized gain on short-term investments

Other comprehensive income — unrealized (loss) gain on short-term investments

Comprehensive loss

4 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands, except share)

(In thousands, except share amounts)

Comprehensive

5 unchanged sentences

Issuance of common stock from Employee Stock Purchase Plan

Unrealized loss on short-term investments

Unrealized (loss) gain on short-term investments

Balance at March 31, 2023

Stock-based compensation

Vesting of restricted stock awards including withholding, net

Issuance of common stock in at-the-market offerings, net

Unrealized (loss) gain on short-term investments

Balance at June 30, 2023

The accompanying notes are an integral part of the unaudited consolidated financial statements.

12 unchanged sentences

Balance at March 31, 2022

Stock-based compensation

Exercise of stock options

Vesting of restricted stock awards including withholding, net

Issuance of common stock in at-the-market offerings, net

Issuance of common stock related to contingent consideration liability

Unrealized (loss) gain on short-term investments

Balance at June 30, 2022

The accompanying notes are an integral part of the unaudited consolidated financial statements.

2 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

20 unchanged sentences

Proceeds from issuance of common stock from Employee Stock Purchase Plan

(Payments for) proceeds from share-based compensation, net

Net cash (used in) provided by financing activities

Payment of conditional economic incentive

Proceeds from exercises of stock options

Payments for tax withholding in share-based compensation

Net cash provided by financing activities

Net decrease in cash and cash equivalents and restricted cash

2 unchanged sentences

SUPPLEMENTAL NON-CASH ACTIVITIES:

Deferred offering costs in accrued expenses and other current liabilities

Fair value of common stock retired in exchange for issuance of common stock warrant

The accompanying notes are an integral part of the unaudited consolidated financial statements.

20 unchanged sentences

Summary of Significant Accounting Policies

During the three months ended March 31, 2023, there have been no significant changes to the Company’s summary of significant accounting policies contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the SEC, except for the recently adopted accounting standard for ASU No.

During the six months ended June 30, 2023, there have been no significant changes to the Company’s summary of significant accounting policies contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the SEC, except for the recently adopted accounting standard for ASU No.

2016-13 as disclosed below.

17 unchanged sentences

The Company places all investments with government agencies, or corporate institutions whose debt is rated as investment grade.

As of March 31, 2023, none of the unrealized losses on our short-term investments are a result of credit loss, and therefore, the unrealized losses were recognized in OCI.

Due to a full valuation allowance, the Company did not record an income tax expense (benefit) for either of the three months ended March 31, 2023 or 2022.

As of June 30, 2023, none of the unrealized losses on the Company’s short-term investments are a result of credit loss, and therefore, the unrealized losses were recognized in OCI.

Due to a full valuation allowance, the Company did not record an income tax expense (benefit) for either of the three and six months ended June 30, 2023 or 2022.

The Company calculates its quarterly income tax provision based on an estimated, annual effective tax rates applied to ordinary income (or loss) and other known items computed and recognized as they occur.

8 unchanged sentences

Fair Value Measurements

The Company’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2023 consisted of the following (in thousands):

Fair Value Measurement at March 31, 2023

The Company’s assets measured at fair value on a recurring basis as of June 30, 2023 consisted of the following (in thousands):

Fair Value Measurement at June 30, 2023

Cash equivalents - money market funds

Short-term investments

The Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 consisted of the following (in thousands):

The Company’s assets measured at fair value on a recurring basis as of December 31, 2022 consisted of the following (in thousands):

Fair Value Measurement at December 31, 2022

3 unchanged sentences

The pricing services utilize industry standard valuation models, including both income and market-based approaches and observable market inputs to determine value.

Short-term investments with quoted prices as of March 31, 2023 as shown below (in thousands):

March 31, 2023

Short-term investments with quoted prices as of June 30, 2023 as shown below (in thousands):

June 30, 2023

Amortized Cost

4 unchanged sentences

Agency debt securities

Short-term investments with quoted prices as of December 31, 2022 as shown below (in thousand):

Short-term investments with quoted prices as of December 31, 2022 as shown below (in thousands):

December 31, 2022

7 unchanged sentences

Assets recorded at fair value on a non-recurring basis, such as property and equipment and intangible assets are recognized at fair value when they are impaired.

During the three months ended March 31, 2023 and year ended December 31, 2022, the Company had no significant assets or liabilities that were measured at fair value on a non-recurring basis.

During the six months ended June 30, 2023 and year ended December 31, 2022, the Company had no significant assets or liabilities that were measured at fair value on a non-recurring basis.

Operating Leases

The Company’s operating leases consist of leases for office and laboratory space in the United States, which expire in April 2025.

Rent expense during the three months ended March 31, 2023 and 2022 under all of the Company’s operating leases was $ 0.2 million and $ 0.1 million, respectively.

Rent expense under the Company’s operating leases was $ 0.1 million and $ 0.3 million during the three and six months ended June 30, 2023.

During the three and six months ended June 30, 2022, rent expense under the Company’s operating leases was $ 0.1 million and $ 0.2 million, respectively.

Rent expense includes short-term leases and variable lease costs that are not included in the lease obligation.

4 unchanged sentences

The Company has determined that the lease renewal option is not reasonably certain of being exercised.

The cash paid for operating lease liabilities for each of the three months ended March 31, 2023 and 2022 was $ 0.1 million.

The cash paid for operating lease liabilities for each of the six months ended June 30, 2023 and 2022 was $ 0.3 million.

Supplemental other information related to the operating leases balance sheet information is as follows (in thousands):

March 31, 2023

June 30, 2023

December 31, 2022

6 unchanged sentences

Accrued expenses and other current liabilities consist of the following (in thousands):

March 31, 2023

June 30, 2023

December 31, 2022

6 unchanged sentences

Total accrued expenses and other current liabilities

Contingent Consideration

The Company entered into an Agreement and Plan of Merger and Reorganization, dated July 8, 2019 , by and among the Company, Springfield Merger Sub, Inc., Springfield Merger Sub, LLC, Spitfire Pharma, Inc.

and David Collier, as the Stockholder Representative (the “Spitfire Merger Agreement”) to acquire all of the equity interests of Spitfire Pharma, Inc.

(“Spitfire”).

Spitfire was a privately held, preclinical pharmaceutical company developing a novel GLP-1/glucagon receptor dual agonist for the treatment of NASH.

The transaction closed on July 12, 2019.

The Company issued 1,887,250 unregistered shares of its common stock as upfront consideration to certain former securityholders of Spitfire, representing an amount equal to $ 5.0 million less working capital and transaction expense adjustment amounts as defined in the agreement.

The acquisition of Spitfire was accounted for as an asset acquisition instead of a business combination because substantially all of the fair value of the gross assets acquired was concentrated in a single identifiable asset or group of similar identifiable assets, and therefore, the asset was not considered a business.

The Company expensed the acquired intellectual property as of the acquisition date as in-process research and development with no alternative future uses.

The Spitfire Merger Agreement also includes future contingent payments up to $ 88.0 million payable in either cash or shares of the Company’s common stock as follows:

● a one-time payment of $ 5.0 million (the “IND Milestone Consideration Amount”) within sixty days of the submission of an Investigational New Drug Application (“IND”) to the United States Food and Drug Administration (the “FDA”) or other applicable governmental authority in a foreign jurisdiction, which IND has not been rejected or placed on clinical hold by the FDA or such applicable foreign governmental authority within time specified in the Spitfire Merger Agreement.

In November 2020, the Company issued 1,694,906 shares of its common stock to fully satisfy the obligations under the IND Milestone.

● a one-time payment of $ 3.0 million (the “Phase 2 Milestone Consideration Amount” and together with the IND Milestone Consideration Amount, the “Regulatory Milestones”) within sixty days of the initiation (first patient, first dosing) of the first Phase 2 clinical trial of a product candidate anywhere in the world.

In June 2022 the Company issued 847,444 shares of its common stock to fully satisfy the obligations under the Phase 2 Milestone.

● payments of up to $ 80.0 million upon the achievement of specified worldwide net sales (the “Sales Milestones”) of all products developed using the technology acquired in the License Agreement within ten years following the approval of a new drug application filed with the FDA.

The contingent payments related to the Sales Milestones are predominately cash-based payments accounted for under FASB Accounting Standards Codification Topic 450, Contingencies .

Accordingly, the Company will recognize the Sales Milestones when the contingency is probable and the amount can be reasonably estimated.

During the three months ended March 31, 2022, the Company recognized $ 1.8 million gain from change in fair value of contingent consideration liability.

Any changes in fair value have been recorded within research and development expense during the respective periods presented.

As described above, the Company fully satisfied the contingent consideration liability in June 2022.

As of March 31, 2023 and December 31, 2022, the Company had no contingent consideration liability.

Other Long-Term Liabilities

The Company’s other long-term liabilities are summarized as follows (in thousands):

March 31, 2023

June 30, 2023

December 31, 2022

4 unchanged sentences

The Amended and Restated Certificate of Incorporation, as amended (“Charter”), authorizes the Company to issue 200,000,000 shares of common stock, par value $ 0.0001 per share.

As of March 31, 2023, the Company had 49,286,710 shares of common stock issued and outstanding .

As of June 30, 2023, the Company had 52,657,661 shares of common stock issued and outstanding .

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders.

1 unchanged sentence

The Charter also authorizes the Company to issue 1,000,000 shares of preferred stock, par value $ 0.0001 per share.

As of March 31, 2023, the Company had no shares of preferred stock issued and outstanding .

As of June 30, 2023, the Company had no shares of preferred stock issued and outstanding .

At-the-Market Offerings

1 unchanged sentence

Riley Securities, Inc., serving as sales agents (the “Sales Agents”), with respect to an at-the-market offerings program under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, having an aggregate offering price of up to $ 150.0 million (the “Shares”) through the Sales Agents (the “2023 Offering”).

All Shares offered and sold in the 2023 Offering will be issued pursuant to the Company’s Registration Statement on Form S-3 filed with the SEC on February 28, 2023, which was declared effective immediately, the prospectus supplement relating to the 2023 Offering filed with the SEC on February 28, 2023 and any applicable additional prospectus supplements related to the 2023 Offering that form a part of the Registration Statement.

The Company capitalized approximately $ 0.2 million of other offering costs which will offset the proceeds

received from the shares sold under the 2023 Agreement.

No shares were sold under the 2023 Agreement during the three months ended March 31, 2023, and as of March 31, 2023, $ 150.0 million remained available to be sold under the 2023 Agreement.

As of March 31, 2023, there was $ 0.2 million deferred offering costs included in prepaid expenses and other current assets on the accompanying consolidated balance sheets.

All Shares offered and sold in the 2023 Offering will be issued pursuant to the Company’s Registration Statement on Form S-3ASR filed with the SEC on February 28, 2023, which was declared effective immediately, the prospectus supplement relating to the 2023 Offering filed with the SEC on February 28, 2023 and any applicable additional prospectus supplements related to the 2023 Offering that form a part of the Registration Statement.

The Company capitalized approximately $ 0.2 million of other offering costs which will offset the proceeds received from the shares sold under the 2023 Agreement.

During the six months ended June 30, 2023, the Company sold 3,364,631 shares of common stock under the 2023 Agreement resulting in approximately $ 13.4 million in proceeds, net of $ 0.4 million commission and other offering costs.

As of June 30, 2023, $ 136.2 million remained available to be sold under the 2023 Agreement.

As of June 30, 2023, there was $ 0.2 million deferred offering costs included in prepaid expenses and other current assets on the accompanying consolidated balance sheets.

On February 25, 2021, the Company entered into an Equity Distribution Agreement (the “2021 Agreement”) with Piper Sandler & Co., Evercore Group L.L.C.

2 unchanged sentences

Under the 2021 Agreement, the Company sold 10,004,869 shares of common stock resulting in approximately $ 121.0 million in proceeds, net of $ 4.0 million commission and other offering costs.

As of March 31, 2023, there were no remaining shares available under the 2021 Agreement.

Exchange Agreement

On February 25, 2021, the Company entered into an exchange agreement (the “Exchange Agreement”) with an Investor and its affiliates (the “Exchanging Stockholders”), pursuant to which the Company exchanged an aggregate of 1,000,000 shares of common stock, owned by the Exchanging Stockholders for pre-funded warrants (the “Exchange Warrants”) to purchase an aggregate of 1,000,000 shares of common stock (subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Exchange Warrants), with an exercise price of $ 0.0001 per share.

On January 24, 2022, the Exchange Warrants to purchase 1,000,000 shares were net exercised, resulting in the issuance of 999,984 shares of common stock, and no Exchange Warrants remain outstanding.

As of June 30, 2023, there were no remaining shares available under the 2021 Agreement.

Public Offering

5 unchanged sentences

On January 24, 2022, 760,870 of the Pre-Funded Warrants were exercised, resulting in the issuance of 760,870 shares of common stock.

As of March 31, 2023, there were 869,566 remaining Pre-Funded Warrants unexercised.

As of March 31, 2023, including the remaining 869,566 Pre-Funded Warrants, there were 1,015,166 outstanding warrants with a weighted-average exercise price of $ 0.66 and weighted-average contractual term of 0.7 years.

As of June 30, 2023, there were 869,566 remaining Pre-Funded Warrants unexercised.

As of June 30, 2023, including the remaining 869,566 Pre-Funded Warrants, there were 1,015,166 outstanding warrants with a weighted-average exercise price of $ 0.66 and weighted-average contractual term of 0.4 years.

Stock-Based Compensation

1 unchanged sentence

The Company’s stock option awards generally vest over four years and typically have a contractual life of ten years .

As of March 31, 2023, there was $ 20.5 million of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted-average period of 3.1 years.

During the three months ended March 31, 2023, the Company granted 1,159,725 stock options with a weighted average exercise price of $ 12.81 and per share weighted average grant date fair value of $ 10.42 .

Information related to stock options outstanding as of March 31, 2023 is as follows (in thousands, except share, exercise price and contractual term):

As of June 30, 2023, there was $ 19.5 million of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted-average period of 3.0 years.

During the six months ended June 30, 2023, the Company granted 1,506,226 stock options with a weighted average exercise price of $ 10.91 and per share weighted average grant date fair value of $ 8.85 .

Information related to stock options outstanding as of June 30, 2023 is as follows:

Weighted-Average

3 unchanged sentences

Exercise Price

Value (In thousands)

Restricted Stock Units (RSUs)

During the three months ended March 31, 2023, the Company granted 319,700 shares of RSUs with a weighted average grant date fair value of $ 13.20 which vest over four years .

As of March 31, 2023, the Company had unvested RSUs of 629,793 shares with total unrecognized compensation expense of $ 6.1 million, which the Company expects to recognize over a weighted average period of approximately 3.2 years.

During the three months ended March 31, 2023, the Company issued 54,347 shares of unrestricted common stock as a result of the vesting of 89,392 RSUs net of 35,045 shares of common stock withheld to satisfy tax withholding obligations.

2019 Employee Stock Purchase Plan

Under the Employee Stock Purchase Plan, employees purchased 13,215 shares for $ 0.1 million during the three months ended March 31, 2023.

During the three months ended March 31, 2023, the Company recognized compensation expense of $ 0.1 million.

During the six months ended June 30, 2023, the Company granted 319,700 shares of RSUs with a weighted average grant date fair value of $ 13.20 which vest over four years .

As of June 30, 2023, the Company had unvested RSUs of 620,417 shares with total unrecognized compensation expense of $ 5.6 million, which the Company expects to recognize over a weighted average period of approximately 3.0 years.

During the six months ended June 30, 2023, the Company issued 60,667 shares of unrestricted common stock as a result of the vesting of 98,768 RSUs net of 38,101 shares of common stock withheld to satisfy tax withholding obligations.

2019 Employee Stock Purchase Plan (ESPP)

Under the ESPP, employees purchased 13,215 shares for $ 0.1 million during the six months ended June 30, 2023.

During the three and six months ended June 30, 2023, the Company recognized compensation expense of $ 0.1 million and $ 0.2 million, respectively.

During the three and six months ended June 30, 2022, the Company recognized compensation expense of $ 47,000 and $ 0.1 million, respectively.

Stock-based Compensation Expense

Stock-based compensation expense is classified in the unaudited consolidated statements of operations and comprehensive loss for the three months ended March 31, 2023 and 2022 as follows (in thousands):

For the Three Months Ended

Stock-based compensation expense is classified in the unaudited consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2023 and 2022 as follows (in thousands):

Three Months Ended

Six Months Ended

Research and development

1 unchanged sentence

Net Loss Per Share

Because the Company has reported a net loss attributable to common stockholders for the three months ended March 31, 2023 and 2022, basic and diluted net loss per share attributable to common stockholders in each period are the same.

Because the Company has reported a net loss attributable to common stockholders for the six months ended June 30, 2023 and 2022, basic and diluted net loss per share attributable to common stockholders in each period are the same.

Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average numbers of shares of common stock outstanding for the period.

Basic shares outstanding includes the weighted average effect of the Company’s outstanding pre-funded warrants, the exercise of which requires little or no consideration for the delivery of shares of common stock.

shares outstanding includes the weighted average effect of the Company’s outstanding pre-funded warrants, the exercise of which requires little or no consideration for the delivery of shares of common stock.

Diluted net loss per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period.

1 unchanged sentence

Potential common shares issuable upon conversion, vesting or exercise of unvested restricted stock, RSUs, common stock warrants, and stock options that are excluded from the computation of diluted weighted-average shares outstanding, as they are anti-dilutive, are as follows:

Three Months Ended

Six Months Ended

Common stock warrants

4 unchanged sentences

Spitfire Acquisition

As disclosed in Note 6, the Company is obligated to make payments of up to $ 80.0 million upon the achievement of specified worldwide net sales of all products developed using the technology acquired from Spitfire Pharma Inc.

within ten years following the approval of a new drug application filed with the FDA.

In December 2019, a complaint was filed by Dr.

De-chu Christopher Tang (“Plaintiff”) against the Company, which the Company removed to the United States District Court for the Eastern District of Texas.

The Plaintiff amended the complaint in February 2020 to include Vipin K.

Garg and David J.

Drutz as defendants, in addition to the Company (Dr.

Drutz, and the Company are collectively referred to as “Defendants”).

In March 2020 the Defendants filed a motion to dismiss the complaint.

On March 25, 2021, the court granted the motion and dismissed the action for lack of personal jurisdiction.

In December 2021, the Plaintiff refiled the case in the United States District Court for the District of Maryland, captioned Tang v.

Altimmune, Inc., et al ., Case No.

8:21-cv-03283 (D.

Plaintiff, who is representing himself, asserts two causes of action:

(1) breach of a prior settlement agreement by “robbing Plaintiff’s properties”;

and (2) use by the Company of the “AdHigh system,” which Plaintiff claims is “proprietary.” On April 4, 2022, Defendants filed a motion to dismiss all claims in Plaintiff’s operative complaint.

On March 24, 2023, the court granted the motion, and dismissed the case as to Dr.

Drutz without prejudice for lack of jurisdiction, and dismissed the case as to the Company with prejudice.

Plaintiff did not file a notice of appeal within the 30-day deadline for appeal.

In July 2019, the Company entered into the Spitfire merger agreement to acquire all of the equity interests of Spitfire Pharma, Inc.

(“Spitfire”).

As part of the agreement, the Company is obligated to make payments of up to $ 80.0 million upon the achievement of specified worldwide net sales of all products developed using the technology acquired from Spitfire Pharma Inc.

(the “Sales Milestone”) within ten years following the approval of a new drug application filed with the FDA.

The contingent payments related to the Sales Milestones are predominately cash-based payments accounted for under FASB Accounting Standards Codification Topic 450, Contingencies .

Accordingly, the Company will recognize the Sales Milestones when the contingency is probable and the amount can be reasonably estimated.

The Company is a party in various contracts and subject to disputes, litigation, and potential claims arising in the ordinary course of business none of which are currently reasonably possible or probable of material loss.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements