Vaccinex, Inc 10-K/A for FY2023
Vaccinex, Inc. (VCNX)
About this 10-K/A
Vaccinex, Inc filed this 10-K/A on April 25, 2024, covering the fiscal year ended December 31, 2023 (FY2023).
Headline figures
Fiscal year ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $570K
- up 107.3% from $275K a year earlier
- Net loss
- $20.25M
- compared with a net loss of $19.82M a year earlier
- Diluted EPS
- -$43.68
- compared with -$98.05 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
Amendment Number 1
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
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
(Exact name of Registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
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Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐
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.
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).
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.
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Emerging growth company |
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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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The aggregate market value of the Registrant’s common stock, par value $0.0001 per share, held by non-affiliates of the Registrant, as computed by reference to the June 30, 2023 closing price reported by Nasdaq, was approximately $
As of March 22, 2024, the Registrant had
Vaccinex, Inc. (the “Company”) is filing this Amendment No.1 on Form 10-K/A to its Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “Original Filing”), which was filed with the Securities and Exchange Commission (“SEC”) on April 2, 2024, solely for the purpose of adding the conformed signature of Deloitte & Touche LLP to the Report of Independent Registered Public Accounting Firm (the “Audit Report”). The signed Audit Report was received by the Company prior to the Original Filing being filed with the SEC, but the conformed signature in the Audit Report was inadvertently omitted from the Original Filing.
Pursuant to Rule 12b-15 of the Securities Exchange Act of 1934, as amended, this Amendment No. 1 contains the complete text of Item 15. Exhibits, Financial Statement Schedules and certifications of the Company's Principal Executive Officer and Principal Financial Officer required under Items 302 and 906 of the Sarbanes-Oxley Act of 2002, as amended, dated as of the date of this Amendment.
Except as expressly set forth in this Amendment No. 1, no other changes have been made to the Original Filing, and this Form 10-K/A does not modify, amend or update in any way any of the financial or other information contained in the Original Filing. This Form 10-K/A does not reflect events that may have occurred subsequent to the filing date of the Original Filing.
PART IV
Item 15. Exhibits, Financial Statement Schedules.
The financial statements listed in the accompanying index (page F-1) to the financial statements are filed as part of this Annual Report on Form 10-K.
The following exhibits are filed with this Annual Report on Form 10-K or incorporated by reference herein:
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Description |
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3.1 |
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3.2 |
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3.3 |
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4.1 |
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4.3 |
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4.4 |
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4.6 |
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10.1 |
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10.2+ |
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10.3+ |
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10.4+ |
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1
10.5+ |
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10.6+ |
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10.7+ |
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10.8+ |
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10.9+ |
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10.10† |
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10.11† |
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10.12† |
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10.13† |
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10.14 |
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10.15 |
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10.22 |
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10.23 |
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23.1* |
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2
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31.1* |
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31.2* |
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32.1* |
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97* |
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101.INS |
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Inline XBRL Instance Document |
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101.SCH |
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Inline XBRL Taxonomy Extension Schema Document |
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101.CAL |
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Inline XBRL Taxonomy Extension Calculation Linkbase Document |
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101.DEF |
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Inline XBRL Taxonomy Extension Definition Linkbase Document |
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101.LAB |
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Inline XBRL Taxonomy Extension Label Linkbase Document |
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101.PRE |
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Inline XBRL Taxonomy Extension Presentation Linkbase Document |
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104 |
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The cover page for the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 has been formatted in Inline XBRL and contained in Exhibit 101 |
* Filed or furnished herewith, as applicable.
+ Management contract.
† The Company was granted confidential treatment for certain information contained in this exhibit. Such information was filed separately with the Securities and Exchange Commission.
3
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Vaccinex, Inc. |
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Date: April 25, 2024 |
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By: |
/s/ Maurice Zauderer, Ph.D. |
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Maurice Zauderer, Ph.D. |
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President and Chief Executive Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.
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/s/ Maurice Zauderer, Ph.D. |
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President, Chief Executive Officer and Director |
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April 25, 2024 |
Maurice Zauderer, Ph.D. |
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(Principal Executive Officer) |
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/s/ Jill Sanchez, CPA |
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Chief Financial Officer |
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April 25, 2024 |
Jill Sanchez, CPA |
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(Principal Financial and Accounting Officer) |
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/s/ Albert D. Friedberg |
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Chairman of the Board |
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April 25, 2024 |
Albert D. Friedberg |
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/s/ Chrystyna Bedrij Stecyk |
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Director |
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April 25, 2024 |
Chrystyna Bedrij Stecyk |
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/s/ Jacob B. Frieberg |
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Director |
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April 25, 2024 |
Jacob B. Frieberg |
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/s/ Bala S. Manian, Ph.D. |
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Director |
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April 25, 2024 |
Bala S. Manian, Ph.D. |
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/s/ Gerald E. Van Strydonck |
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Director |
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April 25, 2024 |
Gerald E. Van Strydonck |
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/s/ Barbara Yanni |
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Director |
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April 25, 2024 |
Barbara Yanni |
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4
INDEX TO FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of Vaccinex, Inc.:
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Vaccinex, Inc. (the “Company”) as of December 31, 2023 and 2022, the related statements of operations and comprehensive loss, stockholders’ equity (deficit), and cash flows, for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the US federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Classification of warrant liability—Refer to Notes 2 and 9 to the financial statements
Critical Audit Matter Description
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms. Liability-classified warrants are recorded at their fair value and are subject to subsequent remeasurement at each balance sheet date until the warrants are exercised or expired, and any change in fair value is recognized in the Company’s statements of operations and comprehensive loss. On October 3, 2023, the Company sold warrants in a public offering to purchase up to 542,857 shares of common stock (the “public warrants”), which was accounted for as a liability.
We identified the assessment of the balance sheet classification of the public warrants issued during the year as a critical audit matter. The accounting requirements related to the classification of financial instruments as liabilities or equity are complex, which required a high degree of auditor judgment to analyze the terms and provisions of the warrant agreements, including the need to involve accounting specialists. Variation in the interpretation of terms and conditions in the public warrant agreements could result in the instruments being classified within stockholders’ equity, which would also impact the statement of operations and comprehensive loss.
F-2
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the classification of the public warrants issued on October 3, 2023, included the following, among others:
/s/
April 1, 2024
We have served as the Company’s auditor since 2014.
F-3
VACCINEX, INC.
Balance Sheets
(in thousands, except share and per share data)
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As of |
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As of |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Operating lease right-of-use asset |
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TOTAL ASSETS |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses |
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Deferred revenue |
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- |
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Current portion of long-term debt |
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Operating lease liability |
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Warrant liability |
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- |
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Total current liabilities |
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Long-term debt |
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Operating lease liability, net of current portion |
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- |
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TOTAL LIABILITIES |
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Stockholders’ equity (deficit): |
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Common stock, par value of $ |
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Additional paid-in capital |
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Treasury stock, at cost; |
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( |
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Accumulated deficit |
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( |
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( |
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TOTAL STOCKHOLDERS’ EQUITY/(DEFICIT) |
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( |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
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$ |
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$ |
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The accompanying notes are an integral part of these financial statements.
F-4
VACCINEX, INC.
Statements of Operations and Comprehensive Loss
(in thousands, except share and per share data)
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Year Ended December 31, |
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2023 |
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2022 |
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Revenue |
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$ |
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$ |
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Costs and expenses: |
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Research and development |
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General and administrative |
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Total costs and expenses |
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Loss from operations |
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( |
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( |
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Interest expense |
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( |
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( |
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Financing costs - warrant liabilities |
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( |
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- |
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Change in fair value of warrant liabilities |
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- |
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Other income (expense), net |
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Loss before provision for income taxes |
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( |
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Provision for income taxes |
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Net loss attributable to Vaccinex, Inc. common stockholders |
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$ |
( |
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$ |
( |
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Comprehensive loss |
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$ |
( |
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$ |
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Net loss per share attributable to Vaccinex, Inc. common |
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$ |
( |
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$ |
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Weighted-average shares used in computing net loss per share |
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The accompanying notes are an integral part of these financial statements.
F-5
VACCINEX, INC.
Statements of Stockholders’ Equity/(Deficit)
(in thousands, except share data)
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Common Stock |
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Treasury Stock |
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Shares |
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Amount |
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Additional |
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Common |
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Amount |
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Accumulated |
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Total |
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Balance as of January 1, 2022 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Issuance of common stock in private placement offerings |
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- |
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- |
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- |
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- |
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Stock-based compensation |
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- |
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- |
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- |
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- |
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- |
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Net loss |
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- |
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- |
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- |
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- |
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- |
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( |
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( |
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Balance as of December 31, 2022 |
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( |
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( |
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Issuance of common stock in private placement offerings |
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- |
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- |
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- |
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- |
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Issuance of common stock and pre-funded warrants |
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- |
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- |
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- |
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- |
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Issuance of common stock |
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Stock-based compensation |
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- |
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- |
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- |
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- |
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- |
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Net loss |
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- |
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- |
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- |
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- |
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- |
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( |
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( |
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Balance as of December 31, 2023 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
( |
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The accompanying notes are an integral part of these financial statements.
F-6
VACCINEX, INC.
Statements of Cash Flows
(in thousands)
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Year Ended December 31, |
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2023 |
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2022 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net loss |
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$ |
( |
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$ |
( |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation |
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Stock-based compensation |
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Change in fair value of warrant liability |
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- |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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( |
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Prepaid expenses and other current assets |
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Accounts payable |
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Accrued expenses |
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Deferred revenue |
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- |
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Net cash used in operating activities |
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( |
) |
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|
( |
) |
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
||
Purchase of property and equipment |
|
|
( |
) |
|
|
( |
) |
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
||
Proceeds from issuance of common stock, and |
|
|
|
|
|
- |
|
|
Proceeds from issuance of common stock |
|
|
|
|
|
|
||
Proceeds from private offering of common stock |
|
|
|
|
|
|
||
Payments of long-term debt |
|
|
( |
) |
|
|
( |
) |
Net cash provided by financing activities |
|
|
|
|
|
|
||
NET DECREASE IN CASH AND CASH EQUIVALENTS |
|
|
( |
) |
|
|
( |
) |
CASH AND CASH EQUIVALENTS–Beginning of period |
|
|
|
|
|
|
||
CASH AND CASH EQUIVALENTS–End of period |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these financial statements.
VACCINEX, INC.
Notes to Financial Statements
Vaccinex, Inc. (the “Company”) was incorporated in Delaware in April 2001 and is headquartered in Rochester, New York. The Company is a clinical-stage biotechnology company engaged in the discovery and development of targeted biotherapeutics to treat serious diseases and conditions with unmet medical needs, including cancer, neurodegenerative diseases, and autoimmune disorders. Since its inception, the Company has devoted substantially all of its efforts toward product research, manufacturing and clinical development, and raising capital.
The Company is subject to a number of risks and uncertainties common to other early-stage biotechnology companies including, but not limited to, dependency on the successful development and commercialization of its product candidates, rapid technological change and competition, dependence on key personnel and collaborative partners, uncertainty of protection of proprietary technology and patents, clinical trial uncertainty, fluctuation in operating results and financial performance, the need to obtain additional funding, compliance with governmental regulations, technological and medical risks, management of growth and effectiveness of marketing by the Company. If the Company does not successfully commercialize or partner any of its product candidates, it will be unable to generate product revenue or achieve profitability.
Going Concern
These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
The Company has incurred significant losses and negative cash flows from operations since inception and expects to incur additional losses until such time that it can generate significant revenue from the commercialization of its product candidates. The Company had losses from operations of $
In response to these conditions, management is currently evaluating different strategies to obtain the required funding of future operations. Financing strategies may include, but are not limited to, the public or private sale of equity, debt financing or funds from other capital sources, such as government funding, collaborations, strategic alliances, divestment of non-core assets, or licensing arrangements with third parties. There can be no assurances that the Company will be able to secure additional financing, or if available, that it will be sufficient to meet its needs or on favorable terms. Because management’s plans have not yet been finalized and are not within the Company’s control, the implementation of such plans cannot be considered probable. As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.
The accompanying financial statements reflect the application of certain significant accounting policies, as described below and elsewhere in the accompanying notes to the financial statements.
Basis of Presentation
F-8
VACCINEX, INC.
Notes to Financial Statements
Common Stock Reverse Split
On September 25, 2023, the
Use of Estimates
These financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amount of expenses during the reporting period. Such management estimates include those relating to assumptions used in the valuation of stock option awards, the valuation of the warrant liabilities, and valuation allowances against deferred income tax assets. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. The Company deposits its cash primarily in checking and money market accounts.
Concentration of Credit Risk, Other Risks and Uncertainties
The Company is subject to a number of risks, including, but not limited to, the lack of available capital; the possible delisting of our common stock from Nasdaq, possible failure of preclinical testing or clinical trials; inability to obtain regulatory approval of product candidates; competitors developing new technological innovations; potential interruptions in the manufacturing and commercial supply operations; unsuccessful commercialization strategy and launch plans for its proprietary drug candidates; risks inherent in litigation, including purported class actions; market acceptance of the Company’s products; and protection of proprietary technology.
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. Cash equivalents are deposited in interest-bearing money market accounts. Although the Company deposits its cash with multiple financial institutions, cash balances may occasionally be in excess of the amounts insured by the Federal Deposit Insurance Corporation. Management believes the financial risk associated with these balances is minimal and has not experienced any losses to date.
The Company has historically raised capital in transactions with investors that include members of its board of directors and entities controlled by certain board members. As such, the Company's directors, directly and indirectly, control a significant ownership percentage of the Company. The Company can provide no assurances that future financing will be available in sufficient amounts or on terms acceptable to it or that its directors or entities controlled by certain board members will be willing or able to participate in future capital raises by the Company.
The Company depends on third-party manufacturers for the manufacture of drug substances and drug product for clinical trials. The Company also relies on certain third parties for its supply chain. Disputes with these third- party manufacturers or shortages in goods or services from third-party suppliers could delay the manufacturing of the Company’s product candidates and adversely impact its results of operations.
Fair Value of Financial Instruments
Financial instruments consist of cash, accounts receivable, accounts payable, accrued liabilities, long-term debt, and warrant liabilities. Cash, accounts receivable, accounts payable, accrued liabilities, and debt, are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date of such amounts. Warrant liabilities are measured at fair value on a recurring basis utilizing a Black-Scholes pricing model with the assumptions discussed in Note 4.
F-9
VACCINEX, INC.
Notes to Financial Statements
Financing Activities
During the year ended December 31, 2023 the Company completed private placements of our common stock and warrants to purchase shares of our common stock to various investors for gross proceeds of $
On March 27, 2020, we announced that we had (i) entered into an open market sale agreement (the “Open Market Sale Agreement” or “ATM”) with Jefferies, LLC (“Jefferies”) and filed a prospectus supplement pursuant to which we were able to issue and sell up to $
During the year ended December 31, 2023 the Company sold
Property and Equipment, Net
Property and equipment are recorded at cost. Depreciation is computed over estimated useful lives of the related assets using the straight-line method. Leasehold improvements are amortized on a straight-line basis over the shorter of the useful life or term of the lease. Upon retirement or disposal, the cost and related accumulated depreciation are removed from the balance sheets and the resulting gain or loss is recorded to general and administrative expense in the statements of operations. Routine expenditures for maintenance and repairs are expensed as incurred.
Estimated useful lives for property and equipment are as follows:
|
|
Property and Equipment |
|
Estimated Useful Life |
Research equipment |
|
|
|
|
Furniture and fixtures |
|
|
|
|
Computer equipment |
|
|
|
|
Leasehold improvements |
|
|
|
Impairment of Long-Lived Assets
The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the ability to recover the carrying value of the assets from the expected future cash flows (undiscounted and without interest expense) of the related operations. If these cash flows are less than the carrying value of such assets, an impairment loss for the difference between the estimated fair value and carrying value is recorded. There was
Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance included in Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity ("ASC 480") and ASC 815, Derivatives and Hedging ("ASC 815"). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether the warrants meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent reporting period end date while the warrants are outstanding.
F-10
VACCINEX, INC.
Notes to Financial Statements
Warrants that meet all of the criteria for equity classification are required to be recorded as a component of additional paid-in capital at the time of issuance, or when the conditions for equity classification are met, and are not remeasured. Warrants that do not meet the required criteria for equity classification are classified as liabilities. The Company adjusts such warrants to fair value at each reporting period until the warrants are exercised or expire. Any change in fair value is recognized in the Company’s statements of operations and comprehensive loss.
Treasury Stock
The Company records treasury stock activities under the cost method whereby the cost of the acquired stock is recorded as treasury stock. The Company’s accounting policy upon the formal retirement of treasury stock is to deduct the par value from common stock and to reflect any excess of cost over par value as a reduction to additional paid-in capital (to the extent created by previous issuances of the shares) and then retained earnings. There was
Revenue Recognition
The Company’s revenues are generated primarily through collaborative research, license, development and commercialization agreements.
We recognize revenue when our customers obtain control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Arrangements that include rights to additional goods or services that are exercisable at a customer’s discretion are generally considered options. We assess if these options provide a material right to the customer and if so, they are considered performance obligations. The exercise of a material right is accounted for as a contract modification for accounting purposes.
The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) each performance obligation is satisfied at a point in time or over time, and if over time this is based on the use of an output or input method.
Amounts received prior to revenue recognition are recorded as deferred revenue. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current portion of deferred revenue in the accompanying balance sheets. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, net of current portion. Amounts recognized as revenue, but not yet received or invoiced are generally recognized as contract assets in the Other Assets line item in the Balance Sheets.
Collaborative Arrangements – The Company has entered into collaboration agreements, which are within the scope of ASC 606, to discover, develop, manufacture and commercialize product candidates. The terms of these agreements typically contain multiple promises or obligations, which may include: (1) licenses, or options to obtain licenses, to use the Company’s research program materials, and (2) research and development activities to be performed on behalf of the collaboration partner. Payments the Company receives under these arrangements typically include one or more of the following: non-refundable, upfront license fees; option exercise fees; funding of research and/or development efforts; clinical and development, regulatory, and sales milestone payments; and royalties on future product sales.
The Company also analyzes its collaboration arrangements to assess whether they are within the scope of ASC 808, Collaborative Arrangements (“ASC 808”) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities. This assessment is performed throughout the life of the arrangement based on changes in the responsibilities
F-11
VACCINEX, INC.
Notes to Financial Statements
of all parties in the arrangement. For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and those that are more reflective of a vendor-customer relationship and, therefore, are within the scope of ASC 606. For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently, generally by analogy to ASC 606. For those elements of the arrangement that are accounted for pursuant to ASC 606, the Company applies the five-step model described above.
For a complete discussion of accounting for collaboration revenues, see Note 5, “Collaboration Agreements”.
Grant Revenue
From time to time, the Company receives certain grant award funding to support its continuing research and development efforts. The Company considers these grants to be operating revenue as they support the Company’s primary operating activities. We recognize revenue from these contracts as we perform services under these arrangements when the funding is received. Revenues and related expenses are presented gross in the statements of operations and comprehensive loss as we have determined we control the arrangement as the primary obligor under the arrangements relative to the research and development services we perform.
Research and Development Costs
Expenditures, including payroll, contractor expenses and supplies, for research and development of products are expensed as incurred. Clinical trial and other development costs incurred by third parties are expensed as the contracted work is performed. Where contingent milestone payments are due to third parties under research and development arrangements, the milestone payment obligations are expensed when the milestone results are probable of being achieved.
Stock-Based Compensation
The Company utilizes the Black-Scholes stock option-pricing model as the method for estimating the grant date fair value of its stock option awards. The Black-Scholes stock option-pricing model requires the use of highly subjective and complex assumptions, including the stock options’ expected term and the price volatility of the underlying stock. The grant date fair value of the portion of the stock option award that is ultimately expected to vest is recognized as compensation expense over the stock option awards’ requisite service periods. The Company recognizes stock-based compensation to expense using the straight-line method over the requisite service period. If there are any modifications or cancelations of stock option awards, the Company may be required to accelerate, increase or decrease any remaining unrecognized stock-based compensation expense.
Income Taxes
The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities, which relate primarily to the carrying amount of the Company’s property and equipment and its net operating loss carryforward, are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax expense or benefit is the result of changes in the deferred tax assets and liabilities. Valuation allowances are established when necessary to reduce deferred tax assets where, based upon the available evidence, management concludes that it is more likely than not that the deferred tax assets will not be realized. In evaluating its ability to recover deferred tax assets, the Company considers all available positive and negative evidence, including its operating results, ongoing tax planning and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis. Because of the uncertainty of the realization of the deferred tax assets, the Company has recorded a full valuation allowance against its deferred tax assets.
Reserves are provided for tax benefits for which realization is uncertain. Such benefits are only recognized when the underlying tax position is considered more likely than not to be sustained on examination by a taxing authority, assuming they possess full knowledge of the position and facts. Interest and penalties related to uncertain tax positions are recognized in the provision for income taxes; however, the Company currently has
F-12
VACCINEX, INC.
Notes to Financial Statements
Segment and Geographic Information
The Company’s chief operating decision maker, its Chief Executive Officer, reviews its operating results on an aggregate basis for purposes of allocating resources and evaluating financial performance. The Company has one business activity, the discovery and development of targeted biotherapeutics to treat serious diseases and conditions with unmet medical needs, and there are no segment managers who are held accountable for operations or operating results. Accordingly, the Company operates in
Net Loss Per Share Attributable to Vaccinex, Inc. Common Stockholders
The Company calculates its basic and diluted net loss per share attributable to Vaccinex, Inc. common stockholders by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period, including issued but unexercised pre-funded warrants outstanding. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares, including issued but unexercised pre-funded warrants outstanding, plus common equivalent shares for the period, including any dilutive effect from such shares. Since the Company was in a net loss position for all periods presented, net loss per share attributable to common stockholders was the same on a basic and diluted basis, as the inclusion of all potential common equivalent shares outstanding would have been anti-dilutive.
For purposes of this calculation, stock options to purchase common stock, public warrants, and private placement warrants are considered common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to Vaccinex, Inc. common stockholders as their effect is anti-dilutive.
Recently Issued Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires disclosure of additional categories of information about federal, state and foreign income taxes in the rate reconciliation table and more details about the reconciling items in some categories if items meet a quantitative threshold. The ASU requires entities to disclose income taxes paid, net of refunds, disaggregated by federal (national), state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold. The guidance makes several other changes to the disclosure requirements. The ASU is required to be applied prospectively, with the option to apply it retrospectively. The ASU is effective for fiscal years beginning after December 15, 2024. The Company is currently assessing the impact of the adoption of this guidance on its financial statements and disclosures.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the ASU enhances interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, and contains other disclosure requirements. The ASU does not change how an entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The ASU is required to be applied retrospectively to all periods presented in the financial statements. The ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company is currently assessing the impact of the adoption of this guidance on its financial statements and disclosures.
F-13
VACCINEX, INC.
Notes to Financial Statements
Property and Equipment
Property and equipment consist of the following (in thousands):
|
|
As of |
|
|
As of |
|
||
Leasehold improvements |
|
$ |
|
|
$ |
|
||
Research equipment |
|
|
|
|
|
|
||
Furniture and fixtures |
|
|
|
|
|
|
||
Computer equipment |
|
|
|
|
|
|
||
Property and equipment, gross |
|
|
|
|
|
|
||
Less: accumulated depreciation and amortization |
|
|
( |
) |
|
|
( |
) |
Property and equipment, net |
|
$ |
|
|
$ |
|
||
Depreciation expense related to property and equipment was $
Accrued Expenses
Accrued expenses consist of the following (in thousands):
|
|
As of |
|
|
As of |
|
||
|
|
|
|
|
|
|
||
Accrued clinical trial cost |
|
$ |
|
|
$ |
|
||
Accrued payroll and related benefits |
|
|
|
|
|
|
||
Accrued consulting and legal |
|
|
|
|
|
|
||
Accrued other |
|
|
|
|
|
|
||
Accrued expenses |
|
$ |
|
|
$ |
|
||
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Assets and liabilities recorded at fair value on a nonrecurring basis in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Financial instruments consist of cash, accounts receivable, accounts payable, accrued liabilities, and long-term debt. Cash, accounts receivable, accounts payable, accrued liabilities, and debt, are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date of such amounts.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Fair value measurement standards also apply to certain financial assets and liabilities that are measured at fair value on a recurring basis (each reporting period). For the Company, these financial assets and liabilities include its cash equivalents deposited in money market funds and its warrant liabilities. The Company does not have any nonfinancial assets or liabilities that are measured at fair value on a recurring basis.
The assets’ or liabilities’ fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
F-14
VACCINEX, INC.
Notes to Financial Statements
The following table sets forth the fair value of the Company’s financial assets by level within the fair value hierarchy (in thousands):
|
|
As of December 31, 2023 |
|
|||||||||||||
|
|
Fair Value |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Financial Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market fund |
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
||
Total Financial Assets |
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
||
|
|
As of December 31, 2022 |
|
|||||||||||||
|
|
Fair Value |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Financial Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market fund |
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
||
Total Financial Assets |
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
||
|
|
As of December 31, 2023 |
|
|||||||||||||
|
|
Fair Value |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Financial Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Warrant liabilities - public warrants |
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
|
||
Warrant liabilities - private placement warrants |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Total Financial Liabilities |
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
|
||
The Company did
Fair Value Measurement of Warrant Liabilities
The Company uses the Black-Scholes pricing model to determine the fair value of its warrant liabilities using Level 3 inputs. Inputs used to determine estimated fair value of the warrant liabilities include the fair value of the underlying stock at the valuation date, the term of the warrants, and the expected volatility of the underlying stock. The significant unobservable input used in the fair value measurement of the warrant liabilities is the estimated term of the warrants.
The key inputs into the respective valuation models used to estimate the fair value of the warrant liabilities were as follows during the year ended December 31, 2023:
|
|
|
|
|||||||||
|
|
Public Warrants |
|
|
Private Placement Warrants |
|
|
Total |
|
|||
Warrant liabilities as of January 1, 2023 |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Issuance of warrants |
|
|
|
|
|
|
|
|
|
|||
Change in fair value |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Warrant liabilities as of December 31, 2023 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
F-15
VACCINEX, INC.
Notes to Financial Statements
The following table summarizes the changes in fair value of the Company’s warrant liabilities that is recognized in the change in fair value of the warrant liabilities in the accompanying statements of operations and comprehensive loss during the year-ended December 31, 2023 (in thousands):
|
|
|
|||||||||||
|
|
Public Warrants |
|
|
Private Placement Warrants |
||||||||
|
|
Low |
|
|
High |
|
|
Low |
|
|
|||
Risk-free interest rate |
|
|
% |
|
|
% |
|
|
% |
|
|||
Volatility |
|
|
% |
|
|
% |
|
|
% |
|
|||
Dividend yield |
|
|
% |
|
|
% |
|
|
% |
|
|||
Expected term (years) |
|
|
|
|
|
|
|
|
|
|
|||
Share price |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
Surface Oncology, Inc.
In November 2017, the Company entered into a research collaboration and license option agreement with Surface Oncology, Inc. (“Surface”) to identify and select antibodies against
Under the research collaboration and license option agreement, Surface paid an upfront technology access fee of $
Nasdaq Deficiency Notice
On May 25, 2023, the Company received a letter from the Listing Qualifications staff of Nasdaq notifying the Company that it no longer complies with the requirement under Nasdaq Listing Rule 5550(b)(1) to maintain a minimum of $
F-16
VACCINEX, INC.
Notes to Financial Statements
Upon notice from Nasdaq of noncompliance with Listing Rule 5550(b)(1), we may be granted 45 calendar days from the date of any notification letter to submit a plan to regain compliance with the Equity Standard (the “Compliance Plan”), and while there is no certainty we will be granted additional time, we may receive a compliance period, typically of no more than 180 days, to regain compliance with the Equity Standard. If the Company fails to regain compliance with the Nasdaq continued listing standards, after any compliance period, if granted, Nasdaq will provide notice that the Company’s common stock will be subject to delisting.
Other Contingencies
The Company is subject to claims and assessments from time to time in the ordinary course of business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount.
In the normal course of business, the Company may become involved in legal proceedings. The Company will accrue a liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. When only a range of possible loss can be established, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. The accrual for a litigation loss contingency might include, for example, estimates of potential damages, outside legal fees and other directly related costs expected to be incurred. As of December 31, 2023, and December 31, 2022 the Company was not involved in any material legal proceedings.
The Company leases its facilities from 1895 Management, Ltd., a New York corporation controlled by an entity affiliated with a director of the Company, under non-cancellable operating leases. Following entry into a lease extension agreement in August 2022, the lease agreement requires monthly rental payments of $
The Company accounts for its leases under ASC 842, Leases. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet. The Company determines if an arrangement is a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and lease liabilities are recognized based on the present value of lease payments over the lease term.
Under the guidance prescribed in ASC 842, the Company elected the practical expedient which does not require re-evaluation of the lease classification upon adoption, therefore, the Company’s conclusion that the 1895 Mt Hope Ave Lease was an operating lease, remains. As such, the Company recorded an operating lease right-of-use asset and corresponding operating lease liability on the balance sheets of $
Rent expense incurred under the operating lease for each of the years ended December 31, 2023 and 2022 was $
On May 8, 2020, the Company received the PPP Loan in the amount of $
F-17
VACCINEX, INC.
Notes to Financial Statements
Public Warrants
On
In the event of a fundamental transaction, the public warrants may require the Company to make a payment based on a Black-Scholes pricing model valuation, using specific inputs, which preclude the instruments from being considered indexed to the Company’s own stock in accordance with ASC 815. The public warrants also contain certain terms that provide for an adjustment in response to the occurrence or nonoccurrence of a specified event that is inconsistent with an implicit assumption in a standard valuation model, which also precludes the instruments from being considered indexed to the Company's stock in accordance with ASC 815. Therefore, the Company accounted for the public warrants as liabilities, which were initially recorded at the issuance date fair value of approximately $
Pre-Funded Warrants
In connection with the Offering, the Company sold pre-funded warrants exercisable for
The Company evaluated the pre-funded warrants and concluded that they met the criteria to be classified within stockholders’ equity within additional paid-in-capital. The pre-funded warrants are equity classified because they (1) are freestanding financial instruments that are legally detachable and separately exercisable from the common stock, (2) are immediately exercisable, (3) do not embody an obligation for the Company to repurchase its shares, (4) permit the holder to receive a fixed number of shares of common stock upon exercise, (5) are indexed to the Company's common stock and (6) meet the equity classification criteria.
Accordingly, the Company allocated approximately $
F-18
VACCINEX, INC.
Notes to Financial Statements
Private Placement Warrants
In November 2023, pursuant to securities purchase agreements entered into with certain investors, the Company issued and sold private placement warrants to purchase
In the event of a fundamental transaction, the private placement warrants may require the Company to make a payment based on a Black-Scholes pricing model valuation, using specific inputs, which preclude the instruments from being considered indexed to the Company’s own stock in accordance with ASC 815. Therefore, the private placement warrants are liability-classified and initially recorded at their respective issuance date fair values. As of December 31, 2023, all of the private placement warrants were outstanding.
Common stock has been reserved for the following potential future issuances:
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As of |
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As of |
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Shares underlying outstanding stock options |
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Shares available for future stock option grants |
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Shares underlying outstanding public warrants |
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- |
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Shares underlying outstanding private placement warrants |
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- |
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Shares underlying outstanding pre-funded warrants |
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- |
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Total shares of common stock reserved |
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2011 Employee Equity Plan
In connection with the adoption of the Company’s 2018 Omnibus Incentive Plan (the “2018 Plan”) in August 2018, the Company ceased granting stock options under the Company’s 2011 Employee Equity Plan (the “2011 Plan”). However, the 2011 Plan will continue to govern the terms and conditions of the outstanding stock options previously granted thereunder. Any shares of stock related to awards outstanding under the 2011 Plan that terminate by expiration, forfeiture, cancellation, or otherwise without the issuance of such shares will become available for grant under the 2018 Plan. Stock options granted under the 2011 Plan expire in five or
2018 Omnibus Incentive Plan
In August 2018, the Company’s board of directors adopted, and its stockholders approved, the 2018 Plan, which allows for the granting of stock, stock options, and stock appreciation rights awards to employees, advisors and consultants. Stock options granted under the 2018 Plan may be either incentive stock options or non-statutory stock options. Incentive stock options may be granted to employees, advisors and consultants at exercise prices of no less than the fair value of the common stock on the grant date. If at the time of grant, the optionee owns stock representing more than
F-19
VACCINEX, INC.
Notes to Financial Statements
The Company initially reserved
A summary of the Company’s stock option activity and related information is as follows:
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Stock |
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Weighted- |
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Weighted- |
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Aggregate |
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Balance as of January 1, 2022 |
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$ |
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- |
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Granted |
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Exercised |
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- |
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- |
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- |
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Forfeited |
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( |
) |
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Balance as of December 31, 2022 |
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$ |
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$ |
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Granted |
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Exercised |
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- |
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- |
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- |
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- |
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Forfeited |
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( |
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Expired |
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Balance as of December 31, 2023 |
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$ |
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$ |
- |
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Exercisable as of December 31, 2023 |
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$ |
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$ |
- |
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The weighted-average grant date fair value of stock options granted to employees and directors for the years ended December 31, 2023 and 2022 was $
The intrinsic value of stock options vested and expected to vest and exercisable is calculated based on the difference between the exercise price and the fair value of the Company’s common stock as of December 31, 2023 and 2022. The intrinsic value of exercised stock options is the difference between the fair value of the underlying common stock and the exercise price as of the exercise date. The intrinsic value of outstanding and exercisable awards at December 31, 2023 was nil.
As of December 31, 2023, and 2022, total unrecognized compensation cost related to stock options granted to employees was $
Determination of Fair Value
The determination of the fair value of stock options on the date of grant using the Black-Scholes option-pricing model is affected by the estimated fair value of the Company’s common stock, as well as assumptions regarding a number of variables that are complex, subjective and generally require significant judgment to determine. The assumptions used to calculate the fair value of stock options were:
Fair Value of Common Stock
Prior to the IPO, the fair value of the common stock underlying the stock options was determined by the Company’s board of directors, with input from management and third-party valuations. Subsequent to the IPO, the fair value of the Company’s common stock was based on its publicly traded price per share.
F-20
VACCINEX, INC.
Notes to Financial Statements
Expected Term
The expected term represents the period that the Company’s stock option awards are expected to be outstanding. Stock options granted have a maximum contractual life of
Expected Volatility
As the Company does not have a trading history for its common stock, the expected stock price volatility for the Company’s common stock was estimated by taking the average historic price volatility for industry peers based on daily price observations over a period equivalent to the expected term of the stock option grants. Industry peers consist of several public companies in the Company’s industry which are of similar size, complexity and stage of development. The Company intends to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of its own share price becomes available, or unless circumstances change such that the identified companies are no longer similar to the Company, in which case, more suitable companies whose share prices are publicly available would be used in the calculation.
Risk-Free Interest Rate
The risk-free interest rate is based on the U.S. Treasury rate, with maturities similar to the expected term of the stock options.
Expected Dividend Yield
The Company does not anticipate paying any dividends in the foreseeable future and, therefore, uses an expected dividend yield of
The grant date fair value of employee stock options was estimated using a Black-Scholes option-pricing model with the following weighted-average assumptions:
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Year Ended December 31, |
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2023 |
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2022 |
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Expected term (in years) |
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Expected volatility |
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Risk-free interest rate |
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Expected dividend yield |
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Total stock-based compensation expense recognized in the statements of operations and comprehensive loss is as follows (in thousands):
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Year Ended December 31, |
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2023 |
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2022 |
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Research and development |
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$ |
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$ |
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General and administrative |
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Total stock-based compensation expense |
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$ |
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$ |
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F-21
VACCINEX, INC.
Notes to Financial Statements
The reconciliation of federal statutory income tax rate to the Company’s effective income tax rate is as follows:
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Year Ended December 31, |
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2023 |
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2022 |
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Expected income tax benefit at the federal statutory rate |
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% |
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State taxes, net of federal benefit |
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Research and development credit, net |
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Non-deductible items and others |
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( |
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Change in valuation allowance |
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( |
) |
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( |
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Total |
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% |
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% |
||
Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
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As of December 31, |
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2023 |
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2022 |
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Deferred tax assets: |
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Federal and state net operating loss carryforwards |
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$ |
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$ |
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Research and development tax credits |
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Depreciation and amortization |
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Reserves and accruals |
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Other |
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Less: valuation allowance |
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( |
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( |
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Net deferred tax assets |
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- |
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Deferred tax liability: |
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Net deferred tax assets and liability |
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$ |
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$ |
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The Company’s valuation allowance increased by $
As of December 31, 2023, the Company had federal and state operating loss carryforwards of $
Under the provisions of Sections 382 and 383 of the Internal Revenue Code (the IRC), net operating loss and credit carryforwards and other tax attributes may be subject to limitation if there has been a significant change in ownership of the Company, as defined by the IRC. Future owner or equity shifts could result in limitations on net operating loss and credit carryforwards.
The Company files income tax returns in the U.S. federal jurisdiction as well as many U.S. state jurisdictions. The tax years
F-22
VACCINEX, INC.
Notes to Financial Statements
The Company evaluates tax positions for recognition using a more-likely-than-not recognition threshold, and those tax positions eligible for recognition are measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon the effective settlement with a taxing authority that has full knowledge of all relevant information. As of December 31, 2023, and 2022, the Company had
The following weighted-average common stock equivalents were excluded from the calculation of diluted net loss per share for the periods presented as they had an anti-dilutive effect:
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Year Ended December 31, |
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2023 |
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2022 |
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Options to purchase common stock |
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Public warrants to purchase common stock |
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- |
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Private placement warrants to purchase common stock |
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- |
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The Company sponsors a 401(k) plan that stipulates that eligible employees can elect to contribute to the 401(k) plan, subject to certain limitations, up to the lesser of the statutory maximum or
15.
As discussed in Note 7, the Company leases its facility from 1895 Management, Ltd., a New York corporation controlled by an entity affiliated with the Company’s chairman and major stockholder of the Company. Rent expense incurred under this operating lease was $
As discussed in Note 5, in November 2017, the Company entered into a research collaboration and license option agreement with Surface to identify and select antibodies against
On
F-23
VACCINEX, INC.
Notes to Financial Statements
On
On
On
On
On
On
F-24
VACCINEX, INC.
Notes to Financial Statements
On
Each Pre-Funded Warrant will have an initial exercise price of $
On March 28, 2024, the Company entered into a securities purchase agreement with Alzheimer’s Drug Discovery Foundation pursuant to which the Company sold shares of a newly designated series of convertible preferred stock, the Series A Preferred Stock, and warrants to purchase up to
On March 27, 2024, the Company entered into a securities purchase agreement pursuant to which the Company issued and sold
In March 2024, the Company entered into agreements with holders of the warrants issued in October and November 2023 and February 2024 pursuant to which the provisions that may require the Company to make a payment based on a Black-Scholes pricing model valuation, using specific inputs, and terms that provide for an adjustment in response to the occurrence or nonoccurrence of a specified event that is inconsistent with an implicit assumption in a standard valuation model, each of which preclude the instruments from being considered indexed to the Company's stock in accordance with ASC 815, were amended.
F-25
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement Nos. 333-274520, 333-274756 on Form S-1, 333-233607, 333-236417, 333-246322, 333-246326, 333-264236, 333-269385, 333-271074, 333-272649, 333-276465 on Form S-3, and 333-226964 on Form S-8 of our report dated April 1, 2024, relating to the financial statements of Vaccinex, Inc. appearing in this Annual Report on Form 10-K for the year ended December 31, 2023.
/s/ Deloitte & Touche LLP
Rochester, New York
April 25, 2024
Exhibit 31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Maurice Zauderer, certify that:
1. |
I have reviewed this annual report on Form 10-K/A for the year ended December 31, 2023, of Vaccinex, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report. |
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Dated: April 25, 2024 |
By: |
/s/ Maurice Zauderer |
|
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Maurice Zauderer, Ph.D. |
|
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President and Chief Executive Officer |
|
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(Principal Executive Officer) |
Exhibit 31.2
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Jill Sanchez, certify that:
1. |
I have reviewed this annual report on Form 10-K/A for the year ended December 31, 2023, of Vaccinex, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report. |
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Dated: April 25, 2024 |
By: |
/s/ Jill Sanchez |
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Jill Sanchez |
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Chief Financial Officer |
|
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(Principal Financial Officer) |
Exhibit 32.1
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the annual report of Vaccinex, Inc., (the "Company") on Form 10-K/A for the year ended December 31, 2023 (the "Report"), I, Maurice Zauderer, Ph.D., President and Chief Executive Officer of the Company and Jill Sanchez, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Dated: April 25, 2024 |
By: |
/s/ Maurice Zauderer |
|
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Maurice Zauderer, Ph.D. |
|
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President and Chief Executive Officer |
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Dated: April 25, 2024 |
By: |
/s/ Jill Sanchez |
|
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Jill Sanchez |
|
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Chief Financial Officer |
Exhibit 97
Vaccinex, Inc.
Policy for the Recovery of Erroneously Awarded Compensation
This Policy for the Recovery of Erroneously Awarded Compensation Policy (this “Policy”) has been adopted by the Board of Directors (the “Board”) of Vaccinex, Inc. (the “Company”), in accordance with the requirements of the Recovery Rules to implement a written policy for the recovery of erroneously awarded compensation received by executive officers in the event of an accounting restatement. This Policy shall be effective as of October 2, 2023 (the “Effective Date”). Capitalized terms used herein and not otherwise defined have the meanings assigned to them in Section 3 hereof.
For purposes of this Policy, the following terms have the meanings indicated, in addition to the other terms defined herein:
(iv) while the Company has a class of securities listed on a national securities exchange or a national securities association.
The Company and its subsidiaries are prohibited from (a) indemnifying any Executive Officer against (i) the loss of Erroneously Awarded Compensation pursuant to this Policy or (ii) any
claims relating to the Company’s enforcement of its rights under this Policy, and (b) paying or reimbursing the premiums on any insurance policy protecting against the recovery of Erroneously Awarded Compensation. Neither the Company nor any subsidiary shall enter into any agreement that exempts any Incentive-Based Compensation from the application of this Policy or that waives the Company’s right to recover Erroneously Awarded Compensation, and this Policy shall supersede any such agreement (whether entered into before, on or after the Effective Date).
This Policy shall be administered by the Board, considering any recommendation of the Committee, in accordance with the Recovery Rules. The Board, considering any recommendation of the Committee, will interpret and construe this Policy and to make all determinations necessary, appropriate or advisable for the administration of this Policy. Any determination made by the Board shall be binding on all persons. In the event any provision of this Policy is determined to be unenforceable or invalid under applicable law, such provision shall be applied to the maximum extent permitted by applicable law and shall automatically be deemed amended in a manner consistent with its objectives to the extent necessary to conform to any limitations required by applicable law.
The Company may require an Executive Officer to sign and return to the Company the Acknowledgement Form attached hereto as Exhibit A pursuant to which such Executive Officer will agree to be bound by the terms and comply with this Policy; provided, however, that this Policy shall apply to, and be enforceable against, any Executive Officer regardless of whether or not such Executive Officer signs and returns to the Company such Acknowledgement Form.
be bound by the terms of this Policy with respect to Incentive-Based Compensation subject to this Policy. Any right of recovery under this Policy is in addition to, and not in lieu of, any other remedies or rights of recovery that may be available to the Company or its subsidiaries under applicable law, regulation or rule, or pursuant to the terms of any policy or in any employment agreement, equity award agreement, or similar agreement and any other legal remedies available to the Company and its subsidiaries. To the extent that the application of this Policy would provide for recovery of Incentive-Based Compensation that the Company recovers pursuant to Section 304 of the Sarbanes- Oxley Act of 2002 or other recovery obligations or policies, the amount that the relevant Executive Officer has already reimbursed the Company will be credited to the required recovery under this Policy, as determined by the Board in its sole discretion. Nothing in this Policy precludes the Company from implementing any additional clawback, recovery or recoupment policies with respect to Executive Officers or other individuals. Application of this Policy does not preclude the Company or its subsidiaries from taking any other action to enforce any Executive Officer’s obligations to the Company or its subsidiaries, including termination of employment or institution of civil or criminal proceedings or any other remedies that may be available to the Company or its subsidiaries with respect to any Executive Officer.
As Adopted November 16, 2023.
EXHIBIT A
VACCINEX, INC.
POLICY FOR THE RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION
ACKNOWLEDGEMENT FORM
By signing below, you acknowledge and confirm that you have received and reviewed a copy of the Vaccinex, Inc. Policy for the Recovery of Erroneously Awarded Compensation (the “Policy”). Capitalized terms used but not otherwise defined in this Acknowledgement Form shall have the meanings ascribed to such terms in the Policy.
By signing below, you are acknowledging and agreeing that you are subject to the terms of the Policy and that you will repay to the Company the amount of any Erroneously Awarded Compensation that you are determined to be required to repay under the Policy. You understand that this obligation applies to awards of Incentive-Based Compensation issued to you in the past, present and future. Incentive-Based Compensation may include, but is not limited to, stock options, restricted stock, restricted stock units, performance stock units, and annual incentive awards.
By signing this Acknowledgement Form, you:
Signature
Print Name
Date