10-Q 1 brhc10024565_10q.htm 10-Q

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 March 31, 2021

☐	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: 001-39743

KINNATE BIOPHARMA INC.

(Exact name of registrant as specified in its charter)

Delaware		82-4566526
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)
12707 High Bluff Drive, Suite 200 San Diego, CA		92130
(Address of principal executive offices)		(Zip Code))

Registrant’s telephone number, including area code: (858) 299-4699

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

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Stock, par value $0.0001 per share		KNTE		The Nasdaq Global Select 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, 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 May 10, 2021, the Registrant had 43,504,484 shares of common stock, $0.0001 par value per share, outstanding.

TABLE OF CONTENTS

		Page

PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	1

	Condensed Balance Sheets	1

	Condensed Statements of Operations and Comprehensive Loss	2

	Condensed Statements of Convertible Preferred Stock and Stockholders’ (Deficit) Equity	3

	Condensed Statements of Cash Flows	4

	Notes to Unaudited Condensed Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26

Item 4.	Controls and Procedures	26

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings	28

Item 1A.	Risk Factors	28

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	105

Item 3.	Defaults Upon Senior Securities	105

Item 4.	Mine Safety Disclosures	105

Item 5.	Other Information	105

Item 6.	Exhibits	106

SIGNATURES		107

-i-

	March 31, 2021			December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	182,389		$	365,462
Short-term investments		65,808			31,398
Prepaid expenses and other current assets		2,975			3,343
Total current assets		251,172			400,203
Property and equipment, net		283			368
Long-term investments		134,910			-
Total assets	$	386,365		$	400,571

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	3,212		$	3,940
Accrued expenses		4,581			3,364
Total current liabilities		7,793			7,304
Commitments and contingencies (See Note 10)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 200,000,000 shares authorized at March 31, 2021 and December 31, 2020; 0 shares outstanding at March 31, 2021 and December 31, 2020		-			-
Common stock, $0.0001 par value; 1,000,000,000 shares authorized at March 31, 2021 and December 31, 2020; 43,477,439 shares issued and outstanding at March 31, 2021 and December 31, 2020		4			4
Additional paid-in capital		449,394			446,601
Accumulated other comprehensive loss		(40	)		(9	)
Accumulated deficit		(70,786	)		(53,329	)
Total stockholders’ equity		378,572			393,267
Total liabilities and stockholders’ equity	$	386,365		$	400,571

	Three Months Ended March 31,
	2021			2020

Operating expenses:
Research and development	$	12,666		$	3,198
General and administrative (includes related party amounts of $0 and $92, respectively)		4,815			955
Total operating expenses		17,481			4,153
Loss from operations		(17,481	)		(4,153	)
Other income:
Interest income		403			212
Other (expense) income, net		(379	)		-
Total other income, net		24			212
Net loss		(17,457	)		(3,941	)
Unrealized loss on investments		(31	)		-
Comprehensive loss	$	(17,488	)	$	(3,941	)
Weighted-average shares outstanding, basic and diluted		43,477,439			3,672,446
Net loss per share, basic and diluted	$	(0.40	)	$	(1.07	)

	Series A Convertible Preferred Stock				Series B Convertible Preferred Stock					Common Stock				Additional Paid-in Capital		Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Stockholders’ (Deficit) Equity
	Shares		Amount		Shares		Amount			Shares		Amount		Additional Paid-in Capital		Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Stockholders’ (Deficit) Equity

Balance at December 31, 2019		7,762,727	$	18,942		9,705,182	$	74,204			3,665,020	$	-	$	82	$	-		$	(17,568	)	$	(17,486	)
Issuance costs for Series B convertible preferred stock		-		-		-		(16	)		-		-		-		-			-			-
Stock-based compensation expense		-		-		-		-			-		-		128		-			-			128
Exercise of stock options		-		-		-		-			7,593		-		3		-			-			3
Net loss		-		-		-		-			-		-		-		-			(3,941	)		(3,941	)
Balance at March 31, 2020		7,762,727	$	18,942		9,705,182	$	74,188			3,672,613	$	-	$	213	$	-		$	(21,509	)	$	(21,296	)

Balance at December 31, 2020		-	$	-		-	$	-			43,477,439	$	4	$	446,601	$	(9	)	$	(53,329	)	$	393,267
Stock-based compensation expense		-		-		-		-			-		-		2,793		-			-			2,793
Net loss		-		-		-		-			-		-		-		-			(17,457	)		(17,457	)
Other comprehensive loss		-		-		-		-			-		-		-		(31	)		-			(31	)
Balance at March 31, 2021		-	$	-		-	$	-			43,477,439	$	4	$	449,394	$	(40	)	$	(70,786	)	$	378,572

	March 31, 2021			December 31, 2020
Furniture and fixtures	$	4		$	72
Computers and equipment		262			275
Computer software		104			104
Property and equipment		370			451
Less accumulated depreciation		(87	)		(83	)
Property and equipment, net	$	283		$	368

	March 31, 2021		December 31, 2020
Accrued research and development	$	3,306	$	1,580
Accrued compensation		896		1,388
Accrued legal fees		237		288
Other accruals		142		108
Total	$	4,581	$	3,364

	March 31, 2021
	Maturity in Years	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
Corporate debt securities	less than 1	$	35,741	$	7	$	(12	)	$	35,736
Commercial paper	less than 1		30,072		-		-			30,072
Short-term investments		$	65,813	$	7	$	(12	)	$	65,808


Corporate debt securities	1 - 2	$	20,706	$	-	$	(27	)	$	20,679
U.S. Treasury securities	1 - 2		91,321		11		(1	)		91,331
Asset-backed securities	1 - 2		22,915		-		(15	)		22,900
Long-term investments		$	134,942	$	11	$	(43	)	$	134,910

	Fair Value Measurements at March 31, 2021
	Level 1		Level 2		Level 3		Total
Money market funds	$	181,388	$	-	$	-	$	181,388
Corporate debt securities		-		56,415		-		56,415
Commercial paper		-		30,072		-		30,072
U.S. Treasury securities		-		91,331		-		91,331
Asset-backed securities		-		22,900		-		22,900
Total cash equivalents and investments	$	181,388	$	200,718	$	-	$	382,106

	Fair Value Measurements at December 31, 2020
	Level 1		Level 2		Level 3		Total
Money market funds	$	364,461	$	-	$	-	$	364,461
Corporate debt securities		-		20,318		-		20,318
Commercial paper		-		11,080		-		11,080
Total cash equivalents and investments	$	364,461	$	31,398	$	-	$	395,859

		Options				Weighted- Average Exercise Price				Weighted- Average Remaining Contractual Term (in years)				Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2021			6,265,409			$	4.12				9.3

SEC Form 10-Q filed by Kinnate Biopharma Inc.