Gyre Therapeutics, Inc 10-Q for FY2023 Q3

About this 10-Q

Headline figures

Gyre Therapeutics, Inc. (GYRE)

10-Q 2023-10-26 For: 2023-09-30

Added on April 08, 2026

Gyre Therapeutics, Inc filed this 10-Q on October 26, 2023, covering the quarter ended September 30, 2023 (FY2023 Q3).

Date: October 26, 2023

/s/ Nassim Usman, Ph.D.

Nassim Usman, Ph.D.
President and Chief Executive Officer
(Principal Executive Officer)

Quarter ended September 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $1.58M; compared with a net loss of $4.88M a year earlier
Diluted EPS: -$0.04; compared with -$0.16 a year earlier

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Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	CBIO	NASDAQ


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐


		Page No.

PART I. FINANCIAL INFORMATION			3

Item 1.	Financial Statements:		3

	Condensed Consolidated Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022		3

	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2023 and 2022 (unaudited)		4

	Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the three and nine months ended September 30, 2023 and 2022 (unaudited)		5

	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022 (unaudited)		6

	Notes to Condensed Consolidated Financial Statements (Unaudited)		7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		25

Item 4.	Controls and Procedures		25

PART II. OTHER INFORMATION			26

Item 1.	Legal Proceedings		26

Item 1A.	Risk Factors		26

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		26

Item 3.	Defaults Upon Senior Securities		26

Item 4.	Mine Safety Disclosures		26

Item 5.	Other Information		27

Item 6.	Exhibits		27

Exhibit Index			28

Signatures		30


	September 30, 2023			December 31, 2022
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	2,228		$	21,666
Accounts and other receivables		—			5,000
Other receivables from GNI		1,200			—
Prepaid insurance		1,169			1,136
Prepaid and other current assets		535			404
Total current assets		5,132			28,206
Long-term receivable from GCBP		4,664			—
Other assets, noncurrent		168			168
Right-of-use assets		—			66
Property and equipment, net		—			4
Total assets	$	9,964		$	28,444
Liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit)
Current liabilities:
Accounts payable	$	158		$	194
Accrued compensation		708			2,582
Other accrued liabilities		917			1,452
Dividends payable		—			7,558
CVR derivative liability		—			5,000
Operating lease liability		—			38
Total current liabilities		1,783			16,824
CVR derivative liability, noncurrent		4,664			—
Total liabilities		6,447			16,824
Commitments and Contingencies (Note 8)
Redeemable convertible preferred stock, $0.001 par value, 123,418 shares authorized; 0 and 12,340 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		—			33,309
Stockholders’ equity (deficit):
Convertible preferred stock, $0.001 par value, 123,418 shares authorized; 12,340 and 0 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		33,309			—
Common stock, $0.001 par value, 100,000,000 shares authorized, 37,978,142 and 37,756,574 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		37			37
Additional paid-in capital		384,895			389,210
Accumulated deficit		(414,724	)		(410,936	)
Total stockholders’ equity (deficit)		3,517			(21,689	)
Total liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit)	$	9,964		$	28,444


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Revenue:
Collaboration	$	—		$	—		$	—		$	794

Operating expenses (income):
Cost of collaboration		—			—			—			798
Research and development		415			803			1,321			12,377
General and administrative		2,408			4,363			8,603			13,201
GNI cost-sharing reimbursement		(1,200	)		—			(1,200	)		—
Gain on disposal of assets, net		—			—			(4,736	)		(57,245	)
Total operating expenses (income)		1,623			5,166			3,988			(30,869	)
Income (loss) from operations		(1,623	)		(5,166	)		(3,988	)		31,663
Interest and other income, net		47			282			216			549
Income (loss) before income taxes		(1,576	)		(4,884	)		(3,772	)		32,212
Income tax expenses		—			—			16			—
Net income (loss) and comprehensive income (loss)	$	(1,576	)	$	(4,884	)	$	(3,788	)	$	32,212
Net income (loss) per share attributable to common stockholders, basic	$	(0.04	)	$	(0.16	)	$	(0.10	)	$	1.02
Net income (loss) per share attributable to common stockholders, diluted	$	(0.04	)	$	(0.16	)	$	(0.10	)	$	1.02
Shares used to compute net income (loss) per share attributable to common stockholders, basic		37,976,764			31,484,542			37,845,900			31,472,666
Shares used to compute net income (loss) per share attributable to common stockholders, diluted		37,976,764			31,484,542			37,845,900			31,605,834

Cash dividends paid per common share	$	—		$	1.43		$	0.24		$	1.43
CVR cash dividends paid per common share	$	0.05		$	—		$	0.17		$	—


	Redeemable Convertible Preferred Stock						Redeemable Preferred Stock					Convertible Preferred Stock				Common Stock				Additional Paid-In			Accumulated			Total Stockholders'
	Shares			Amount			Shares			Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Equity (Deficit)
Balance at December 31, 2022		12,340		$	33,309			—		$	—		—	$	—		37,756,574	$	37	$	389,210		$	(410,936	)	$	(21,689	)
Stock-based compensation expense		—			—			—			—		—		—		—		—		210			—			210
Issuance of common stock from stock grants		—			—			—			—		—		—		3,251		—		2			—			2
CVR cash dividends paid related to GCBP Agreement ($0.01 per share)		—			—			—			—		—		—		—		—		(206	)		—			(206	)
CVR derivative liability		—			—			—			—		—		—		—		—		(4,530	)		—			(4,530	)
Net income		—			—			—			—		—		—		—		—		—			260			260
Balance at March 31, 2023		12,340			33,309			—			—		—		—		37,759,825		37		384,686			(410,676	)		(25,953	)
Stock-based compensation expense		—			—			—			—		—		—		—		—		89			—			89
Issuance of common stock from option exercises		—			—			—			—		—		—		215,067		—		22			—			22
Issuance of preferred stock for stock dividends		—			—			37,975			—		—		—		—		—		—			—			—
Net loss		—			—			—			—		—		—		—		—		—			(2,472	)		(2,472	)
Balance at June 30, 2023		12,340			33,309			37,975			—		—		—		37,974,892		37		384,797			(413,148	)		(28,314	)
Stock-based compensation expense		—			—			—			—		—		—		—		—		98			—			98
Issuance of common stock from stock grants		—			—			—			—		—		—		3,250		—		—			—			—
Elimination and redemption of preferred stock		—			—			(37,975	)		—		—		—		—		—		—			—			—
Reclassification of preferred stock to permanent equity		(12,340	)		(33,309	)		—			—		12,340		33,309		—		—		—			—			33,309
Net loss		—			—			—			—		—		—		—		—		—			(1,576	)		(1,576	)
Balance at September 30, 2023		—		$	—			—		$	—		12,340	$	33,309		37,978,142	$	37	$	384,895		$	(414,724	)	$	3,517

	Redeemable Convertible Preferred Stock						Redeemable Preferred Stock					Convertible Preferred Stock				Common Stock				Additional Paid-In			Accumulated			Total Stockholders’
	Shares			Amount			Shares			Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Equity
Balance at December 31, 2021		—		$	—			—		$	—		—	$	—		31,409,707	$	31	$	443,752		$	(402,694	)	$	41,089
Stock-based compensation expense		—			—			—			—		—		—		32,684		—		515			—			515
Issuance of common stock from stock grants and option exercises		—			—			—			—		—		—		34,662		—		16			—			16
Net loss		—			—			—			—		—		—		—		—		—			(14,536	)		(14,536	)
Balance at March 31, 2022		—			—			—			—		—		—		31,477,053		31		444,283			(417,230	)		27,084
Stock-based compensation expense		—			—			—			—		—		—		—		—		346			—			346
Net income		—			—			—			—		—		—		—		—		—			51,632			51,632
Balance at June 30, 2022		—			—			—			—		—		—		31,477,053		31		444,629			(365,598	)		79,062
Stock-based compensation expense		—			—			—			—		—		—		—		—		224			—			224
Issuance of common stock from stock grants and option exercises		—			—			—			—		—		—		13,000		—		4			—			4
Cash dividends paid ($1.43 per share)		—			—			—			—		—		—		—		—		(45,031	)		—			(45,031	)
Net loss		—			—			—			—		—		—		—		—		—			(4,884	)		(4,884	)
Balance at September 30, 2022		—		$	—			—		$	—		—	$	—		31,490,053	$	31	$	399,826		$	(370,482	)	$	29,375


	September 30, 2023
	Level 1		Level 2		Level 3		Total
Financial assets:
Money market funds(1)	$	2,228	$	—	$	—	$	2,228
Long-term receivable from GCBP		—		—		4,664		4,664
Total financial assets	$	2,228	$	—	$	4,664	$	6,892

Financial liabilities:
CVR derivative liability, noncurrent	$	—	$	—	$	4,664	$	4,664
Total financial liabilities	$	—	$	—	$	4,664	$	4,664


	Long-term receivable		CVR derivative
	from GCBP		liability, noncurrent
Balance at December 31, 2022	$	—	$	—
Additions in the period		4,530		4,530
Changes in fair value		134		134
Balance at September 30, 2023	$	4,664	$	4,664


	September 30, 2023	December 31, 2022
Weighted-average remaining lease term	n/a	0.3 years
Weighted-average discount rate	n/a		4.3	%


	Number of Shares Underlying Outstanding Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)
Outstanding — December 31, 2022		8,678,767		$	1.42		7.47
Options granted (1)		14,008,093		$	0.86
Options exercised		(215,067	)	$	0.10
Options forfeited and cancelled (1)		(14,210,119	)	$	0.91
Options expired		(14,729	)	$	34.33
Outstanding — September 30, 2023		8,246,945		$	1.32		5.43
Exercisable — September 30, 2023		7,609,393		$	1.37


Exhibit Number	Exhibit Title	Form	File No.	Filing Date	Filed or Furnished herewith

2.1	Amendment to Business Combination Agreement, dated as of March 29, 2023, by and among Catalyst, GNI USA, GNI Group, GNI HK, Shanghai Genomics, the Minority Holders and CPI.	8-K	000-51173	March 30, 2023

2.2	Second Amendment to Business Combination Agreement, dated as of August 30, 2023, by and among Catalyst, GNI USA, GNI Group, GNI HK, Shanghai Genomics and CPI.	8-K	000-51173	August 31, 2023

2.3	Agreement and Amendment to Asset Purchase Agreement, dated as of March 29, 2023, by and among Catalyst, GNI Group and GNI HK.	8-K	000-51173	March 30, 2023

2.4	Contingent Value Rights Agreement, dated as of December 26, 2022, between Catalyst and American Stock Transfer & Trust Company, LLC	10-Q	000-51173	August 14, 2023

2.5	Amendment to Contingent Value Rights Agreement, dated as of March 29, 2023, executed by Catalyst (incorporated by reference to Exhibit 2.3 to the Company’s Quarterly Report on Form 10-Q dated March 31, 2023, filed on May 15, 2023).	8-K	000-51173	March 30, 2023

3.1	Certificate of Elimination for Catalyst's Series Y Preferred Stock.	8-K	000-51173	August 31, 2023

10.1§	Asset Purchase Agreement dated as of February 27, 2023 by and between Catalyst Biosciences, Inc. and GC Biopharma Corp.	8-K	000-51173	March 2, 2023

10.2**	Waiver Agreement between Catalyst Biosciences, Inc. and Dr. Nassim Usman, dated January 17, 2023.	10-Q	000-51173	August 14, 2023

10.3**	Waiver Agreement between Catalyst Biosciences, Inc. and Dr. Grant Blouse, dated January 14, 2023.	10-Q	000-51173	August 14, 2023

10.4**	Waiver Agreement between Catalyst Biosciences, Inc. and Ms. Seline Miller, dated January 17, 2023.	10-Q	000-51173	August 14, 2023

31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X

31.2	Certification of the Interim Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X



32.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	X

32.2	Certification of the Interim Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	X

101	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022; (ii) the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2023 and 2022 (unaudited); (iii) the Condensed Consolidated Statement of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) as of September 30, 2023 and September 30, 2022 (unaudited); (iv) the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022 (unaudited); and (v) the Notes to Unaudited Condensed Consolidated Financial Statements.	X

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


		CATALYST BIOSCIENCES, INC.

Date: October 26, 2023		/s/ Nassim Usman, Ph.D.
		Nassim Usman, Ph.D.
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: October 26, 2023		/s/ Seline Miller
		Seline Miller
		Interim Chief Financial Officer
		(Interim Financial and Principal Accounting Officer)