10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 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, 2021

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: 001-40407

 

Vera Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

81-2744449

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

170 Harbor Way, 3rd Floor

South San Francisco, California

94080

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (650) 770-0077

 

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

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

 

Class A common stock, $0.001 par value per
share

VERA

The Nasdaq Stock Market LLC

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, a 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

As of November 5, 2021, the registrant had 21,277,614 shares of common stock, $0.001 par value per share, outstanding, consisting of 20,968,376 shares of Class A common stock, $0.001 par value per share and 309,238 shares of Class B common stock, $0.001 par value per share.

 

 


 

Table of Contents

 

 

Page

Number

PART I. FINANCIAL INFORMATION

1

 

 

Item 1. Condensed Financial Statements (Unaudited)

1

 

 

Condensed Balance Sheets

1

 

 

Condensed Statements of Operations and Comprehensive Loss

2

 

 

Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

3

 

 

Condensed Statements of Cash Flows

5

 

 

Notes to Condensed Financial Statements

6

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

19

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

25

 

 

Item 4. Controls and Procedures

26

 

 

PART II. OTHER INFORMATION

27

 

 

Item 1. Legal Proceedings

27

 

 

Item 1A. Risk Factors

27

 

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

79

 

 

Item 3. Defaults Upon Senior Securities

80

 

 

Item 4. Mine Safety Disclosures

80

 

 

Item 5. Other Information

80

 

 

Item 6. Exhibits

81

 

 

SIGNATURES

82

In this Quarterly Report on Form 10-Q, unless otherwise stated or as the context otherwise requires, references to “Vera,” “the Company,” “we,” “us,” “our” and similar references refer to Vera Therapeutics, Inc.

This Quarterly Report on Form 10-Q also contains registered marks, trademarks and trade names of other companies. All other trademarks, registered marks and trade names appearing in this report are the property of their respective holders. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.

 


 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

VERA THERAPEUTICS, INC.

Condensed Balance Sheets

(unaudited)

(in thousands, except share and per share amounts)

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

86,191

 

 

$

53,654

 

Restricted cash, current

 

 

 

 

 

50

 

Prepaid expenses and other current assets

 

 

3,569

 

 

 

557

 

Total current assets

 

 

89,760

 

 

 

54,261

 

Restricted cash, noncurrent

 

 

293

 

 

 

293

 

Non-marketable equity securities

 

 

1,114

 

 

 

 

Total assets

 

$

91,167

 

 

$

54,554

 

Liabilities, redeemable convertible preferred stock, and stockholders’ equity
   (deficit)

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

964

 

 

$

909

 

Restructuring liability, current

 

 

367

 

 

 

962

 

Accrued expenses and other current liabilities

 

 

2,711

 

 

 

535

 

Total current liabilities

 

 

4,042

 

 

 

2,406

 

Restructuring liability, noncurrent

 

 

1,362

 

 

 

1,634

 

Accrued and other noncurrent liabilities

 

 

286

 

 

 

286

 

Total liabilities

 

 

5,690

 

 

 

4,326

 

Commitments and contingencies (Note 12)

 

 

 

 

 

 

Redeemable convertible preferred stock, $0.001 par value; 0 and 182,772,372 shares
   authorized, issued and outstanding as of September 30, 2021 and December 31,
   2020, respectively

 

 

 

 

 

139,576

 

Stockholders’ equity (deficit)

 

 

 

 

 

 

Preferred stock, $0.001 par value; 10,000,000 and 0 shares authorized as of September
   30, 2021 and December 31, 2020, respectively;
no shares issued and outstanding as
   of September 30, 2021 and December 31, 2020

 

 

 

 

 

 

Class A common stock, $0.001 par value; 500,000,000 and 273,986,920 shares
   authorized as of September 30, 2021 and December 31, 2020, respectively;
   
20,968,376 and 355,296 shares issued and outstanding as of September 30, 2021
   and December 31, 2020, respectively

 

 

21

 

 

 

 

Class B non-voting common stock, $0.001 par value; 14,600,000 and 21,593,607
   shares authorized as of September 30, 2021 and December 31, 2020, respectively;
   
309,238 and 0 shares issued and outstanding as of September 30, 2021 and
   December 31, 2020, respectively

 

 

 

 

 

 

Additional paid-in capital

 

 

192,665

 

 

 

2,099

 

Accumulated deficit

 

 

(107,209

)

 

 

(91,447

)

Total stockholders’ equity (deficit)

 

 

85,477

 

 

 

(89,348

)

Total liabilities, redeemable convertible preferred stock, and stockholders’
   equity (deficit)

 

$

91,167

 

 

$

54,554

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

1


 

VERA THERAPEUTICS, INC.

Condensed Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands, except share and per share amounts)

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

3,564

 

 

$

1,969

 

 

$

9,731

 

 

$

5,362

 

General and administrative

 

 

3,688

 

 

 

652

 

 

 

8,086

 

 

 

2,903

 

Restructuring costs

 

 

 

 

 

1,416

 

 

 

 

 

 

1,416

 

Total operating expenses

 

 

7,252

 

 

 

4,037

 

 

 

17,817

 

 

 

9,681

 

Loss from operations

 

 

(7,252

)

 

 

(4,037

)

 

 

(17,817

)

 

 

(9,681

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

5

 

 

 

 

 

 

9

 

 

 

6

 

Interest expense

 

 

 

 

 

(64

)

 

 

 

 

 

(151

)

Gain on issuance of convertible notes

 

 

 

 

 

 

 

 

 

 

 

63

 

Change in fair value of convertible notes

 

 

 

 

 

(359

)

 

 

 

 

 

(775

)

Change in fair value of non-marketable equity securities

 

 

(364

)

 

 

 

 

 

(645

)

 

 

 

Gain on sale of PNAi technology

 

 

 

 

 

 

 

 

2,691

 

 

 

 

Total other income (expense)

 

 

(359

)

 

 

(423

)

 

 

2,055

 

 

 

(857

)

Net loss and comprehensive loss

 

$

(7,611

)

 

$

(4,460

)

 

$

(15,762

)

 

$

(10,538

)

Net loss per share attributable to common stockholders,
   basic and diluted

 

$

(0.36

)

 

$

(13.68

)

 

$

(1.46

)

 

$

(32.64

)

Weighted-average shares used in computing net loss per share
   attributable to common stockholders, basic and diluted

 

 

21,265,519

 

 

 

325,985

 

 

 

10,793,436

 

 

 

322,811

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

2


 

VERA THERAPEUTICS, INC.

Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

For the Three and Nine Months Ended September 30, 2021

(unaudited)

(in thousands, except share amounts)

 

 

 

Redeemable Convertible
Preferred Stock

 

 

Class A Common Stock

 

 

Class B Common
Stock

 

 

Additional
Paid-in

 

 

Accumulated

 

 

Total
Stockholders’
Equity

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

(Deficit)

 

Balance as of December 31,
   2020

 

 

182,772,372

 

 

$

139,576

 

 

 

355,296

 

 

$

 

 

 

 

 

$

 

 

$

2,099

 

 

$

(91,447

)

 

$

(89,348

)

Issuance of Class A common
   stock upon exercise of options

 

 

 

 

 

 

 

 

113,683

 

 

 

 

 

 

 

 

 

 

 

 

342

 

 

 

 

 

 

342

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

404

 

 

 

 

 

 

404

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,714

)

 

 

(4,714

)

Balances as of March 31, 2021

 

 

182,772,372

 

 

 

139,576

 

 

 

468,979

 

 

 

 

 

 

 

 

 

 

 

 

2,845

 

 

 

(96,161

)

 

 

(93,316

)

Class A common stock issued
   pursuant to initial public
   offering, net of issuance costs

 

 

 

 

 

 

 

 

5,002,500

 

 

 

5

 

 

 

 

 

 

 

 

 

48,406

 

 

 

 

 

 

48,411

 

Conversion of preferred stock
   into common stock

 

 

(182,772,372

)

 

 

(139,576

)

 

 

15,464,775

 

 

 

16

 

 

 

309,238

 

 

 

 

 

 

139,560

 

 

 

 

 

 

139,576

 

Issuance of Class A common
   stock upon exercise of options

 

 

 

 

 

 

 

 

32,122

 

 

 

 

 

 

 

 

 

 

 

 

208

 

 

 

 

 

 

208

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

713

 

 

 

 

 

 

713

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,437

)

 

 

(3,437

)

Balances as of June 30, 2021

 

 

 

 

 

 

 

 

20,968,376

 

 

 

21

 

 

 

309,238

 

 

 

 

 

 

191,732

 

 

 

(99,598

)

 

 

92,155

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

933

 

 

 

 

 

 

933

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,611

)

 

 

(7,611

)

Balances as of September 30, 2021

 

 

 

 

$

 

 

 

20,968,376

 

 

$

21

 

 

 

309,238

 

 

$

 

 

$

192,665

 

 

$

(107,209

)

 

$

85,477

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

3


 

VERA THERAPEUTICS, INC.

Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

For the Three and Nine Months Ended September 30, 2020

(unaudited)

(in thousands, except share amounts)

 

 

 

Redeemable Convertible
Preferred Stock

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Deficit

 

Balance as of December 31, 2019

 

 

14,015,773

 

 

$

40,095

 

 

 

322,007

 

 

$

 

 

$

1,486

 

 

$

(38,034

)

 

$

(36,548

)

Issuance of common stock upon exercise of
   options

 

 

 

 

 

 

 

 

2,491

 

 

 

 

 

 

15

 

 

 

 

 

 

15

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

61

 

 

 

 

 

 

61

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,474

)

 

 

(2,474

)

Balances as of March 31, 2020

 

 

14,015,773

 

 

 

40,095

 

 

 

324,498

 

 

 

 

 

 

1,562

 

 

 

(40,508

)

 

 

(38,946

)

Issuance of common stock upon exercise of
   options

 

 

 

 

 

 

 

 

1,382

 

 

 

 

 

 

7

 

 

 

 

 

 

7

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

72

 

 

 

 

 

 

72

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,604

)

 

 

(3,604

)

Balances as of June 30, 2020

 

 

14,015,773

 

 

 

40,095

 

 

 

325,880

 

 

 

 

 

 

1,641

 

 

 

(44,112

)

 

 

(42,471

)

Issuance of common stock upon exercise of
   options

 

 

 

 

 

 

 

 

172

 

 

 

 

 

 

1

 

 

 

 

 

 

1

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

55

 

 

 

 

 

 

55

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,460

)

 

 

(4,460

)

Balances as of September 30, 2020

 

 

14,015,773

 

 

$

40,095

 

 

 

326,052

 

 

$

 

 

$

1,697

 

 

$

(48,572

)

 

$

(46,875

)

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

4


 

VERA THERAPEUTICS, INC.

Condensed Statements of Cash Flows

(unaudited)

(in thousands)

 

 

 

Nine Months Ended
September 30,

 

 

 

2021

 

 

2020

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(15,762

)

 

$

(10,538

)

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

 

 

 

 

 

 

Depreciation, amortization and accretion

 

 

144

 

 

 

893

 

Impairment loss on property and equipment and intangible asset

 

 

 

 

 

1,185

 

Stock-based compensation

 

 

2,050

 

 

 

188

 

Restructuring payments

 

 

(875

)

 

 

(88

)

Non-cash interest expense on convertible notes

 

 

 

 

 

125

 

Issuance costs for convertible notes

 

 

 

 

 

24

 

Gain on issuance of convertible notes

 

 

 

 

 

(63

)

Gain on sale of PNAi technology

 

 

(2,691

)

 

 

 

Change in fair value of convertible notes

 

 

 

 

 

775

 

Change in fair value of non-marketable equity securities

 

 

645

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expense and other current assets

 

 

(3,012

)

 

 

(6

)

Accounts payable

 

 

55

 

 

 

(3

)

Accrued and other current liabilities

 

 

2,176

 

 

 

264

 

Other liabilities

 

 

 

 

 

(183

)

Net cash used in operating activities

 

 

(17,270

)

 

 

(7,427

)

Cash flows from investing activities

 

 

 

 

 

 

Proceeds from sale of PNAi technology

 

 

796

 

 

 

 

Purchase of property and equipment

 

 

 

 

 

(99

)

Net cash provided by (used in) investing activities

 

 

796

 

 

 

(99

)

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

550

 

 

 

23

 

Proceeds from issuance of convertible notes

 

 

 

 

 

5,602

 

Proceeds from issuance of Class A common stock upon initial public offering, net of
   underwriting discounts and commissions

 

 

51,176

 

 

 

 

Payment of offering costs related to initial public offering

 

 

(2,765

)

 

 

 

Payment issuance costs related to convertible promissory notes

 

 

 

 

 

(24

)

Payment on capital lease obligations

 

 

 

 

 

(112

)

Net cash provided by financing activities

 

 

48,961

 

 

 

5,489

 

Net increase (decrease) in cash and cash equivalents and restricted cash

 

 

32,487

 

 

 

(2,037

)

Cash, cash equivalents and restricted cash, beginning of period

 

 

53,997

 

 

 

3,558

 

Cash, cash equivalents and restricted cash, end of period

 

$

86,484

 

 

$

1,521

 

Reconciliation of cash and cash equivalents and restricted cash to the balance sheets

 

 

 

 

 

 

Cash and cash equivalents

 

$

86,191

 

 

$