Invivyd, Inc. 10-Q

Item 1A . Risk Factors. Information regarding risks and uncertainties related to our business appears in Part I, Item 1A. “Risk Factors” of the 2024 Form 10-K. As of the date of this Quarterly Report on Form 10-Q, there have been no material changes from the risk factors set forth in the 2024 Form 10-K, other than as described below. We may not be able to regain or maintain compliance with the continued listing standards of Nasdaq. Our common stock is listed on the Nasdaq Global Market, and we are therefore subject to its continued listing requirements, including requirements with respect to the market value of publicly-held shares, market value of listed shares, minimum bid price per share, and minimum stockholders’ equity, among others, and requirements relating to board and committee independence. If we fail to satisfy one or more of the requirements and are unable to timely regain compliance, we may be delisted from the Nasdaq Global Market. For example, on December 27, 2024, we received a letter from Nasdaq notifying us that, because the closing bid price for our common stock had closed below $1.00 per share for 30 consecutive business days, we no longer complied with the minimum bid price requirement for continued listing on the Nasdaq Global Market pursuant to Nasdaq Listing Rule 5450(a)(1) (the “Minimum Bid Price Requirement”). We then received a letter from Nasdaq on February 21, 2025 notifying us that we had regained compliance with the Minimum Bid Price Requirement, and the matter with respect to that period of non-compliance was closed. Subsequently, on April 21, 2025, we received a new letter from Nasdaq notifying us that, because the closing bid price for our common stock had again closed below $1.00 per share for 30 consecutive business days, we no longer complied with the Minimum Bid Price Requirement. Nasdaq’s notice has no immediate effect on the listing of our common stock, and, in accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have until October 20, 2025 to regain compliance with the Minimum Bid Price Requirement by maintaining a closing bid price of at least $1.00 per share for a minimum of ten consecutive business days, unless Nasdaq exercises its discretion to extend this ten-day period pursuant to Nasdaq Listing Rule 5810(c)(3)(H). In the event we do not regain compliance by October 20, 2025, we may be eligible for additional time to regain compliance with the Minimum Bid Price Requirement. To the extent that we are unable to regain compliance with the Minimum Bid Price Requirement or fail to maintain compliance with Nasdaq’s other continued listing requirements, there is a risk that our common stock may be delisted from Nasdaq. Delisting from Nasdaq may adversely affect our ability to raise additional financing through the public or private sale of equity securities, significantly affect the ability of investors to trade our securities, or negatively affect the value and liquidity of our common stock. Delisting also could have other negative results, including the potential loss of employee confidence, the loss of institutional investors or interest in potential business development opportunities. Furthermore, if we are delisted from Nasdaq and we are not able to list our common stock on another exchange, our common stock may be eligible to trade on an over-the-counter system, such as the OTCQB market, where an investor may find it more difficult to sell our common stock or obtain accurate quotations as to the market value of our common stock. We cannot assure you that our common stock, if delisted from Nasdaq, will be listed on another national securities exchange or quoted on an over-the-counter quotation system. Our failure to comply with the covenants or other terms of our Loan Agreement, including as a result of events beyond our control, could result in a default under the Loan Agreement that could materially and adversely affect the ongoing viability of our business. On April 18, 2025 (the “Closing Date”), we entered into that certain Loan and Security Agreement (the “Loan Agreement”) with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, as lender (the “Lender”), that provides for a senior secured term loan facility in an aggregate principal amount of up to $30 million (the “Term Facility”) consisting of: (a) Term A Loans in an aggregate principal amount of up to $10 million, which shall be available to be drawn from and after August 15, 2025 through December 31, 2026 upon compliance with certain financial covenants and conditions; (b) Term B Loans in an aggregate principal amount of up to $10 million, which shall be available to be drawn during the period commencing on the date of the achievement of certain net product revenue milestones and ending on June 30, 2027; and (c) Term C Loans in an aggregate principal amount of up to $10 million, which shall be available to be drawn during the period commencing on the date of the 39 achievement of certain net product revenue milestones and ending on June 30, 2027 (collectively, the “Term Loans”). The Term Loans (i) are due and payable on March 1, 2029 (the “Maturity Date”) and (ii) bear interest that is payable monthly (commencing with the month in which any loans are funded under the Term Facility) in arrears at a per annum rate (subject to increase during an Event of Default (as defined in the Loan Agreement)) equal to the greater of (x) the Wall Street Journal prime rate minus 0.25% (subject to a 9.00% cap) and (y) 6.00%. Commencing on April 1, 2027 (which date may be extended to April 1, 2028 upon the achievement of certain net product revenue milestones (the “Interest-Only Period Extension”)), we will be required to repay the principal of the Term Facility in 24 consecutive equal monthly installments (or, in the case of the Interest-Only Period Extension, 12 consecutive equal monthly installments). At maturity, or if earlier prepaid, we will also be required to pay a final payment fee equal to 4.50% of the aggregate principal amount of the Term Loans advanced under the Term Facility. The Loan Agreement provides for an unused term loan commitment fee equal to 1.00% of the Term Facility upon the earliest to occur of (1) July 1, 2027, (2) the occurrence of an Event of Default and (3) the termination of the Loan Agreement; provided, that such fee will be waived by the Lender in the event that we have requested and the Lender has funded any loans under the Term Facility prior to such date. Our obligations under the Loan Agreement are secured by a pledge of substantially all of our assets, excluding intellectual property. Certain of our future subsidiaries, if any, will be required to become co-borrowers under the Loan Agreement or guarantee our obligations under the Loan Agreement. In addition, such subsidiaries will be required to pledge substantially all of their assets, excluding intellectual property, to secure our obligations under the Loan Agreement. None of our subsidiaries in existence as of the Closing Date were required to be co-borrowers or guarantors or to so pledge their assets. The Loan Agreement contains affirmative and negative covenants, including limitations on our ability and our subsidiaries’ abilities, among other things, to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, enter into affiliate transactions and change our line of business, in each case, subject to certain exceptions. In addition, the Loan Agreement contains quarterly financial covenants requiring us to maintain (a) commencing at the end of the quarter following the advance of any loans under the Term Facility, a certain amount of minimum net product revenue and (b) commencing with the quarter ending December 31, 2025 (or, if earlier, commencing at the end of the quarter following the advance of greater than $15 million of loans under the Term Facility), either (i) a certain amount of minimum EBITDA or (ii) minimum unrestricted cash and cash equivalents in an amount equal to or greater than the greater of (x) an amount equal to the sum of our six-month Cash Burn (as defined in the Loan Agreement) and the aggregate amount of loans outstanding under the Term Facility and (y) the aggregate amount of loans outstanding under the Term Facility multiplied by two (the “Minimum Cash Threshold”). In addition, if we no longer maintain active sales of a product in the U.S., we will be required to maintain the Minimum Cash Threshold at all times. The Loan Agreement also includes Events of Default, in certain cases subject to customary periods to cure, following which the Lender may accelerate all amounts outstanding under the Term Facility and stop advancing money or extending credit. For example, the Lender may elect to accelerate the repayment of all unpaid principal of the Term Loans, accrued interest and other amounts owed under the Loan Agreement upon the occurrence of certain Events of Default, including, among other things: • our default in a payment obligation under the Loan Agreement; • our breach of the restrictive covenants or other terms of the Loan Agreement; • the occurrence of a material adverse change in our business operations or condition (financial or otherwise); • a material impairment in the perfection or priority of the Lender’s lien in the collateral specified in the Loan Agreement; • certain specified judgment defaults and cross-defaults to other debt agreements; • the consummation of a specified change of control transaction; and • certain specified insolvency and bankruptcy-related events. If we draw down any of the Term Loans under the Term Facility, our assets or cash flow may not be sufficient to fully repay our obligations under the Loan Agreement if the obligations thereunder are accelerated upon any Events of Default. Further, if we are unable to repay, refinance or restructure our obligations under the Loan Agreement, the Lender could proceed to protect and enforce their rights under the Loan Agreement by exercising such remedies (including foreclosure on the assets securing our obligations under the Loan Agreement) as are available to the Lender and in respect thereof under applicable law, either by suit in equity or by action at law, or both, whether for specific performance of any covenant or other agreement contained in the Loan Agreement or in aid of the exercise of any power granted in the Loan Agreement. The foregoing would materially and adversely affect the ongoing viability of our business. If we are unable to satisfy certain conditions in the Loan Agreement, we will be unable to draw down the amounts of the term loan facility. 40 For our Loan Agreement, we must satisfy certain conditions to be eligible to draw down the Term Loans. The Term A Loans shall be available to be drawn from and after August 15, 2025 through December 31, 2026 upon compliance with certain financial covenants, provided that we satisfy certain conditions described in the Loan Agreement. The Term B Loans shall be available to be drawn during the period commencing on the date of the achievement of certain net product revenue milestones and ending on June 30, 2027, provided that we satisfy certain conditions described in the Loan Agreement. The Term C Loans shall be available to be drawn during the period commencing on the date of the achievement of certain net product revenue milestones and ending on June 30, 2027, provided that we satisfy certain conditions described in the Loan Agreement. As of June 30, 2025, we had not satisfied the net product revenue milestone required to be eligible to access proceeds from the Term Facility as of the earliest draw down date, August 15, 2025. If we are unable to satisfy those conditions, we would not be able to draw down the respective Term Loans and may not be able to obtain alternative financing on commercially reasonable terms or at all. Our Loan Agreement contains restrictions that limit our flexibility in operating our business. The Loan Agreement contains various covenants that limit our ability to engage in specified types of transactions without the prior consent the Lender, including our ability to, among other things: • convey, sell, lease, transfer, assign, or otherwise dispose of our assets; • engage in any business other than the businesses currently engaged in by us or reasonably related thereto; • liquidate or dissolve; • merge or consolidate; • acquire all or substantially all of the stock, partnership, membership, or other ownership interest or other equity securities or property of another entity; • create, incur or assume additional indebtedness; • encumber or permit liens on certain of our assets; • make restricted payments, including paying dividends on, repurchasing or making distributions with respect to our common stock, subject to certain exceptions; • make specified investments; and • enter into certain transactions with our affiliates. The covenants in our Loan Agreement may limit our ability to take certain actions that may be in our long-term best interests. In the event that we breach one or more covenants, the Lender may choose to declare an Event of Default and require that we immediately repay any amounts outstanding under the Loan Agreement, plus fees, terminate the Lender’s commitments to fund any undrawn Term Loans and foreclose on the collateral granted to them to secure the obligations under the Loan Agreement. Such repayment could have a material adverse effect on our business, operating results and financial condition. To service our indebtedness, as applicable, we will require a significant amount of cash and our ability to generate cash depends on many factors beyond our control. Our ability to make cash payments on our indebtedness, as applicable, will depend on our ability to generate significant operating cash flow in the future. This ability is, to a significant extent, subject to general economic, financial, competitive, legislative, regulatory and other factors, that will be beyond our control. In addition, our business may not generate sufficient cash flow from operations to enable us to pay our indebtedness or to fund our other liquidity needs. In any such circumstance, we may need to refinance all or a portion of our indebtedness, on or before maturity. We may not be able to refinance any indebtedness on commercially reasonable terms or at all. If we cannot service our indebtedness, as applicable, we may have to take actions such as selling assets, seeking additional equity or reducing or delaying capital expenditures, strategic acquisitions and investments. Any such action, if necessary, may not be effected on commercially reasonable terms or at all. The instruments governing our indebtedness may restrict our ability to sell assets and our use of the proceeds from such sales. Item 2 . Unregistered Sales of Equity Securities and Use of Proceeds. Recent Sales of Unregistered Securities; Use of Proceeds We did not issue any unregistered equity securities during the three months ended June 30, 2025. Purchases of Equity Securities by the Issuer 41 We did not purchase any of our equity securities during the three months ended June 30, 2025.