10-Q
http://fasb.org/us-gaap/2022#LicenseMember0001785345--12-31http://fasb.org/us-gaap/2022#LicenseMemberhttp://fasb.org/us-gaap/2022#LicenseMemberhttp://fasb.org/us-gaap/2022#LicenseMemberfalseQ20001785345us-gaap:ConvertiblePreferredStockMember2022-03-310001785345us-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueInputsLevel3Member2021-12-310001785345us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001785345us-gaap:AdditionalPaidInCapitalMember2021-03-310001785345us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-06-300001785345us-gaap:CommonStockMember2021-06-300001785345us-gaap:FairValueInputsLevel2Member2022-06-300001785345us-gaap:CommonStockMember2020-12-310001785345us-gaap:FairValueInputsLevel3Member2022-06-300001785345us-gaap:RetainedEarningsMember2021-03-310001785345us-gaap:LicenseAgreementTermsMember2021-05-142021-05-140001785345us-gaap:AdditionalPaidInCapitalMember2021-12-310001785345us-gaap:ConvertiblePreferredStockMember2022-06-300001785345us-gaap:IPOMember2021-02-012021-02-280001785345us-gaap:RetainedEarningsMember2022-04-012022-06-300001785345us-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueInputsLevel1Member2021-12-310001785345us-gaap:MoneyMarketFundsMember2021-12-310001785345us-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueInputsLevel1Member2022-06-300001785345us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMember2022-06-300001785345us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001785345labp:TwoThousandTwentyTwoInducementPlanMember2022-01-012022-06-300001785345us-gaap:RetainedEarningsMember2021-01-012021-03-310001785345us-gaap:ConvertiblePreferredStockMember2021-03-310001785345us-gaap:FairValueInputsLevel2Memberus-gaap:MoneyMarketFundsMember2021-12-310001785345us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001785345labp:LaboratoryEquipmentMember2021-12-310001785345us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-03-3100017853452020-12-310001785345labp:CommonStockSubjectToRepurchaseMember2021-01-012021-06-300001785345us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001785345labp:TwoThousandTwentyOneEmployeeStockPurchasePlanMember2021-01-012021-12-310001785345us-gaap:FairValueInputsLevel3Memberus-gaap:MoneyMarketFundsMember2021-12-310001785345us-gaap:FixedIncomeSecuritiesMemberus-gaap:FairValueInputsLevel1Member2021-12-310001785345us-gaap:AssetBackedSecuritiesMember2021-12-310001785345us-gaap:CommonStockMember2021-04-012021-06-3000017853452022-01-012022-03-310001785345us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-06-300001785345us-gaap:EmployeeStockOptionMember2022-01-012022-06-3000017853452021-04-012021-06-300001785345us-gaap:FixedIncomeSecuritiesMemberus-gaap:FairValueInputsLevel3Member2021-12-310001785345us-gaap:FairValueInputsLevel2Memberus-gaap:FixedIncomeSecuritiesMember2022-06-300001785345us-gaap:EmployeeStockOptionMember2021-04-012021-06-300001785345us-gaap:FairValueInputsLevel1Memberus-gaap:USTreasurySecuritiesMember2022-06-300001785345us-gaap:FairValueInputsLevel1Member2022-06-300001785345us-gaap:CommonStockMember2022-03-310001785345us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-3000017853452021-01-012021-01-310001785345labp:TwoThousandTwentyOneEmployeeStockPurchasePlanMember2022-01-012022-06-300001785345labp:LaboratoryEquipmentMember2022-06-300001785345us-gaap:CommonStockMember2021-01-012021-03-3100017853452021-03-310001785345us-gaap:CommonStockMember2021-03-310001785345us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001785345us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-3100017853452022-04-012022-06-3000017853452021-01-012021-06-300001785345us-gaap:GeneralAndAdministrativeExpenseMember2021-04-012021-06-300001785345us-gaap:FurnitureAndFixturesMember2021-12-310001785345us-gaap:FixedIncomeSecuritiesMemberus-gaap:FairValueInputsLevel3Member2022-06-300001785345labp:StockOptionsToPurchaseCommonStockMember2021-01-012021-06-300001785345labp:TwoThousandTwentyOneEmployeeStockPurchasePlanMember2021-01-010001785345srt:MaximumMemberus-gaap:SalesMember2021-05-142021-05-140001785345us-gaap:FixedIncomeSecuritiesMember2022-06-300001785345us-gaap:EmployeeStockOptionMember2021-01-012021-06-3000017853452022-08-050001785345us-gaap:FixedIncomeSecuritiesMember2021-12-310001785345us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300001785345us-gaap:ConvertiblePreferredStockMember2021-01-012021-03-310001785345us-gaap:FurnitureAndFixturesMember2022-06-3000017853452021-06-300001785345labp:CommonStockSubjectToRepurchaseMember2022-01-012022-06-300001785345us-gaap:RetainedEarningsMember2022-01-012022-03-310001785345us-gaap:InProcessResearchAndDevelopmentMembersrt:MaximumMember2021-05-142021-05-140001785345us-gaap:RetainedEarningsMember2021-06-3000017853452021-01-012021-03-310001785345labp:CommonStockSubjectToRepurchaseMember2022-04-012022-06-300001785345us-gaap:RetainedEarningsMember2021-04-012021-06-300001785345us-gaap:ConstructionInProgressMember2021-12-310001785345us-gaap:AdditionalPaidInCapitalMember2021-06-300001785345us-gaap:LicenseAgreementTermsMember2021-01-012021-06-300001785345us-gaap:FairValueInputsLevel3Member2021-12-310001785345us-gaap:IPOMember2021-02-280001785345us-gaap:FairValueInputsLevel1Member2021-12-310001785345us-gaap:CommonStockMember2021-02-012021-02-280001785345us-gaap:EmployeeStockOptionMember2022-04-012022-06-300001785345us-gaap:RetainedEarningsMember2022-03-310001785345us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-06-300001785345labp:StockOptionsToPurchaseCommonStockMember2022-01-012022-06-300001785345us-gaap:FairValueInputsLevel2Memberus-gaap:FixedIncomeSecuritiesMember2021-12-310001785345labp:CommonStockSubjectToRepurchaseMember2021-04-012021-06-300001785345us-gaap:ResearchAndDevelopmentExpenseMember2021-04-012021-06-3000017853452022-03-310001785345us-gaap:AdditionalPaidInCapitalMember2022-06-300001785345us-gaap:CommonStockMember2022-06-3000017853452021-12-310001785345labp:The2019PlanMemberus-gaap:AccountingStandardsUpdate201912Member2022-06-300001785345us-gaap:FairValueInputsLevel3Memberus-gaap:USTreasurySecuritiesMember2022-06-300001785345us-gaap:AdditionalPaidInCapitalMember2022-03-310001785345us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2021-12-310001785345us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001785345us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300001785345us-gaap:ResearchAndDevelopmentExpenseMember2022-04-012022-06-3000017853452021-08-310001785345us-gaap:RetainedEarningsMember2022-06-300001785345us-gaap:CommonStockMember2021-12-310001785345us-gaap:USTreasurySecuritiesMember2022-06-300001785345us-gaap:CorporateDebtSecuritiesMembersrt:MinimumMember2022-01-012022-06-300001785345us-gaap:FixedIncomeSecuritiesMemberus-gaap:FairValueInputsLevel1Member2022-06-300001785345us-gaap:RetainedEarningsMember2021-12-310001785345us-gaap:LicenseAgreementTermsMember2022-01-012022-06-3000017853452022-01-012022-06-300001785345us-gaap:ConstructionInProgressMember2022-06-300001785345us-gaap:ConvertiblePreferredStockMember2021-12-310001785345us-gaap:AssetBackedSecuritiesMember2022-06-300001785345us-gaap:RetainedEarningsMember2020-12-310001785345us-gaap:GeneralAndAdministrativeExpenseMember2022-04-012022-06-300001785345labp:The2019PlanMember2019-01-012019-12-310001785345us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001785345labp:The2019PlanMember2022-01-012022-06-300001785345us-gaap:FairValueInputsLevel2Member2021-12-310001785345us-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueInputsLevel3Member2022-06-300001785345labp:The2019PlanMember2022-01-010001785345us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-3000017853452022-06-300001785345us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001785345us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001785345us-gaap:ConvertiblePreferredStockMember2021-06-300001785345us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-06-300001785345labp:StockOptionsToPurchaseCommonStockMember2021-04-012021-06-300001785345us-gaap:FairValueInputsLevel2Memberus-gaap:AssetBackedSecuritiesMember2021-12-310001785345us-gaap:AdditionalPaidInCapitalMember2020-12-310001785345us-gaap:ConvertiblePreferredStockMember2020-12-310001785345labp:StockOptionsToPurchaseCommonStockMember2022-04-012022-06-300001785345us-gaap:FairValueInputsLevel2Memberus-gaap:AssetBackedSecuritiesMember2022-06-30xbrli:purexbrli:sharesiso4217:USDxbrli:sharesiso4217:USDlabp:Segment

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39971

 

Landos Biopharma, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

81-5085535

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

P.O. Box 11239

Blacksburg, Virginia

24062

(Address of principal executive offices)

(Zip Code)

(540) 218-2232

Registrant’s telephone number, including area code

 

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

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common stock, par value $0.01 per share

 

LABP

 

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

Non-accelerated filer

 

 

Smaller reporting company

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒

As of August 5, 2022, the registrant had 40,254,890 shares of common stock, $0.01 par value per share, outstanding.

 

 

 


 

Table of Contents

 

 

 

Page

 

 

 

PART I.

FINANCIAL INFORMATION

3

 

 

 

Item 1.

Financial Statements (Unaudited)

3

 

Condensed Consolidated Balance Sheets

3

 

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income

4

 

Condensed Consolidated Statements of Cash Flows

5

 

Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity

6

 

Notes to Unaudited Condensed Consolidated Financial Statements

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

15

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

22

Item 4.

Controls and Procedures

22

 

 

 

PART II.

OTHER INFORMATION

23

 

 

 

Item 1.

Legal Proceedings

23

Item 1A.

Risk Factors

23

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

23

Item 6.

Exhibits

24

Signatures

25

 

 


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements. (Unaudited)

Landos Biopharma, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

 

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(Unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

19,241

 

 

$

8,305

 

Marketable securities, available-for-sale

 

 

36,510

 

 

 

82,575

 

Prepaid expenses and other current assets

 

 

2,287

 

 

 

1,266

 

Total current assets

 

 

58,038

 

 

 

92,146

 

Property and equipment, net

 

 

 

 

 

707

 

Other assets

 

 

 

 

 

26

 

Total assets

 

$

58,038

 

 

$

92,879

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

4,711

 

 

$

12,908

 

Accrued liabilities

 

 

1,799

 

 

 

3,703

 

Total current liabilities

 

 

6,510

 

 

 

16,611

 

Total liabilities

 

 

6,510

 

 

 

16,611

 

Commitments and contingencies (Note 6)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.01 par value; 10,000,000 shares authorized, no shares issued and
  outstanding as of June 30, 2022 and December 31, 2021

 

 

 

 

 

 

Common stock, $0.01 par value; 200,000,000 shares authorized, 40,254,890 shares issued and outstanding as of June 30, 2022 and December 31, 2021

 

 

403

 

 

 

403

 

Additional paid-in capital

 

 

171,816

 

 

 

170,241

 

Accumulated other comprehensive loss

 

 

(392

)

 

 

(225

)

Accumulated deficit

 

 

(120,299

)

 

 

(94,151

)

Total stockholders’ equity

 

 

51,528

 

 

 

76,268

 

Total liabilities and stockholders’ equity

 

$

58,038

 

 

$

92,879

 

 

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

 

 

3


 

Landos Biopharma, Inc.

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income

(in thousands, except share and per share amounts)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue - license fee:

 

$

 

 

$

18,000

 

 

$

 

 

$

18,000

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

6,604

 

 

$

11,522

 

 

$

17,404

 

 

$

18,776

 

General and administrative

 

 

4,662

 

 

 

2,596

 

 

 

8,815

 

 

 

5,241

 

Total operating expenses

 

 

11,266

 

 

 

14,118

 

 

 

26,219

 

 

 

24,017

 

(Loss) income from operations

 

 

(11,266

)

 

 

3,882

 

 

 

(26,219

)

 

 

(6,017

)

Other income:

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) from foreign exchange

 

 

25

 

 

 

(5

)

 

 

26

 

 

 

13

 

Other (expense) income, net

 

 

(43

)

 

 

220

 

 

 

45

 

 

 

283

 

Other (loss) income, net

 

 

(18

)

 

 

215

 

 

 

71

 

 

 

296

 

Net (loss) income

 

$

(11,284

)

 

$

4,097

 

 

$

(26,148

)

 

$

(5,721

)

Net (loss) income per share, basic and diluted

 

$

(0.28

)

 

$

0.12

 

 

$

(0.65

)

 

$

(0.19

)

Weighted-average shares used to compute net (loss) income per share, basic

 

 

40,254,890

 

 

 

33,639,481

 

 

 

40,254,890

 

 

 

29,875,877

 

Weighted-average shares used to compute net (loss) income per share, diluted

 

 

40,254,890

 

 

 

34,384,784

 

 

 

40,254,890

 

 

 

29,875,877

 

Comprehensive (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(11,284

)

 

$

4,097

 

 

$

(26,148

)

 

$

(5,721

)

Unrealized gain (loss) on available-for-sale securities

 

 

75

 

 

 

(40

)

 

 

(167

)

 

 

(152

)

Comprehensive (loss) income

 

$

(11,209

)

 

$

4,057

 

 

$

(26,315

)

 

$

(5,873

)

 

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

 

4


 

Landos Biopharma, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net loss

 

$

(26,148

)

 

$

(5,721

)

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

 

 

 

 

 

 

Depreciation

 

 

577

 

 

 

93

 

Accrued interest on marketable securities

 

 

 

 

 

415

 

Stock-based compensation expense

 

 

1,575

 

 

 

1,335

 

Net realized gain on sale of marketable securities

 

 

 

 

 

2

 

Amortization of premium (discount) on marketable securities

 

 

549

 

 

 

245

 

Non-cash loss on termination of lease

 

 

137

 

 

 

 

Gain on sale of equipment

 

 

(23

)

 

 

 

Gain from foreign exchange

 

 

 

 

 

13

 

     Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other assets

 

 

(1,007

)

 

 

(1,260

)

Accounts payable

 

 

(8,255

)

 

 

2,067

 

Other liabilities

 

 

(1,904

)

 

 

(349

)

Net cash used in operating activities

 

 

(34,499

)

 

 

(3,160

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchase of property and equipment

 

 

(7

)

 

 

(213

)

Proceeds from sale of property and equipment

 

 

35

 

 

 

 

Purchase of available-for-sale marketable securities

 

 

(3,672

)

 

 

(85,409

)

Proceeds from sales and maturities of marketable securities

 

 

49,021

 

 

 

14,289

 

Net cash provided by (used in) investing activities

 

 

45,377

 

 

 

(71,333

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Proceeds from initial public offering, net of issuance costs

 

 

 

 

 

90,506

 

Proceeds from exercise of stock options

 

 

 

 

 

258

 

Net cash provided by financing activities

 

 

 

 

 

90,764

 

Net change in cash and cash equivalents

 

 

10,878

 

 

 

16,271

 

Cash and cash equivalents at beginning of period

 

 

8,305

 

 

 

2,416

 

Effect of exchange rates on cash

 

 

58

 

 

 

 

Cash and cash equivalents at end of period

 

$

19,241

 

 

$

18,687

 

 

 

 

 

 

 

 

Supplemental non-cash disclosure:
NONCASH INVESTING AND FINANCING ACTIVITY:

 

 

 

 

 

 

Non-cash gain on sale of fixed assets

 

$

14

 

 

$

 

Reclassification of par to additional paid-in-capital

 

$

 

 

$

2

 

Conversion of Series A and B convertible preferred stock to common stock

 

$

 

 

$

72,925

 

Operating right-of-use asset obtained in exchange for operating lease liability

 

$

824

 

 

$

 

Derecognition of operating right-of-use asset and operating lease liability
   upon termination of lease

 

$

714

 

 

$

 

Unrealized (loss) gain on available-for-sale marketable securities

 

$

(167

)

 

$

152

 

 

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

 

5


 

Landos Biopharma, Inc.

Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity

(in thousands, except share amounts)

(Unaudited)

 

 

 

Convertible
Preferred Stock

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amounts

 

 

 

Shares

 

 

Amounts

 

 

Additional
Paid-in
Capital

 

 

Accumulated
Other
Comprehensive
Loss

 

 

Accumulated
Deficit

 

 

Total
Stockholders’
Equity

 

Balance at December 31, 2021

 

 

 

 

$

 

 

 

 

40,254,890

 

 

$

403

 

 

$

170,241

 

 

$

(225

)

 

$

(94,151

)

 

$

76,268

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

941

 

 

 

 

 

 

 

 

 

941

 

Unrealized loss on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(242

)

 

 

 

 

 

(242

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14,864

)

 

 

(14,864

)

Balance at March 31, 2022

 

 

 

 

$

-

 

 

 

 

40,254,890

 

 

$

403

 

 

$

171,182

 

 

$

(467

)

 

$

(109,015

)

 

$

62,103

 

Stock compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

634

 

 

 

 

 

 

 

 

 

634

 

Unrealized gain on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

75

 

 

 

 

 

 

75

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11,284

)

 

 

(11,284

)

Balance at June 30, 2022

 

 

 

 

$

-

 

 

 

 

40,254,890

 

 

$

403

 

 

$

171,816

 

 

$

(392

)

 

$

(120,299

)

 

$

51,528

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Convertible
Preferred Stock

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amounts

 

 

 

Shares

 

 

Amounts

 

 

Additional
Paid-in
Capital

 

 

Accumulated
Other
Comprehensive
Loss

 

 

Accumulated
Deficit

 

 

Total
Stockholders’
Equity

 

Balance at December 31, 2020

 

 

11,260,608

 

 

$

73,037

 

 

 

 

12,767,909

 

 

$

71

 

 

$

1,633

 

 

$

10

 

 

$

(55,729

)

 

$

(54,015

)

Conversion of preferred stock to common stock upon closing of the initial public offering

 

 

(11,260,608

)

 

 

(73,037

)

 

 

 

20,549,478

 

 

 

262

 

 

 

72,775

 

 

 

 

 

 

 

 

 

73,037

 

Issuance of common stock, net of issuance costs

 

 

 

 

 

 

 

 

 

6,250,000

 

 

 

63

 

 

 

90,443

 

 

 

 

 

 

 

 

 

90,506

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,023

 

 

 

 

 

 

 

 

 

1,023

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

299,282

 

 

 

3

 

 

 

555

 

 

 

 

 

 

 

 

 

558

 

Unrealized loss on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(112

)

 

 

 

 

 

(112

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,818

)

 

 

(9,818

)

Balance at March 31, 2021

 

 

 

 

$

-

 

 

 

 

39,866,669

 

 

$

399

 

 

$

166,429

 

 

$

(102

)

 

$

(65,547

)

 

$

101,179

 

Stock compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

312

 

 

 

 

 

 

 

 

 

312

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

34,217

 

 

 

 

 

 

64

 

 

 

 

 

 

 

 

 

64

 

Unrealized loss on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(40

)

 

 

 

 

 

(40

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,097

 

 

 

4,097

 

Balance at June 30, 2021

 

 

 

 

$

-

 

 

 

 

39,900,886

 

 

$

399

 

 

$

166,805

 

 

$

(142

)

 

$

(61,450

)

 

$

105,612

 

 

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

 

6


 

Landos Biopharma, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

 

1. Organization and Description of the Business

 

Landos Biopharma, Inc. (“Landos” or the “Company”) was incorporated in the state of Delaware in January 2017 and is a clinical-stage biopharmaceutical company focused on the discovery and development of oral therapeutics for patients with autoimmune diseases. The Company has several active development programs, each discovered internally, targeting novel pathways at the interface of immunity and metabolism.

 

Initial Public Offering

 

In February 2021, the Company completed its initial public offering ("IPO") in which it sold 6,250,000 shares of common stock at an initial public offering price of $16.00 per share. Proceeds from the IPO, net of underwriting discounts, commissions and offering costs paid by the Company, were approximately $90.5 million.

 

In addition, in connection with the completion of the Company’s IPO, all outstanding shares of the Company's convertible preferred stock were converted into 20,549,478 shares of the Company’s common stock.

 

Stock Split

 

In January 2021, the Company’s Board of Directors approved a 1.8249-for-1 stock split of the Company’s outstanding common shares. Also in January 2021, the Company amended its Amended and Restated Certificate of Incorporation to affect the stock split. The stock split resulted in an adjustment to the preferred share conversion price to reflect a proportional increase in the number of common shares to be issued upon conversion. The accompanying condensed consolidated financial statements and notes to the condensed consolidated financial statements give retroactive effect to the stock split for all periods presented.

 

Liquidity and Capital Resources

 

As of June 30, 2022, the Company had cash, cash equivalents and marketable securities of $55.8 million, which it believes will be sufficient to fund its planned operations for at least the next 12 months. Upon completion of its portfolio prioritization review later this year, the Company will provide further details into its operating plans and capital resources.

 

Since the Company’s inception in 2017, it has funded operations through the issuance of convertible preferred stock and convertible promissory notes, the proceeds from its IPO, and the upfront payment from the license and collaboration agreement (Note 7). As of June 30, 2022, the Company had an accumulated deficit of $120.3 million and expects to incur substantial operating losses for at least the next several years. As such, the Company will need to raise additional capital to initiate and complete its planned clinical trials, to continue and expand its research and development operations that support its planned discovery, development and clinical and regulatory activities, and to adequately prepare for commercialization of its product candidates that may achieve regulatory approval in the future.

 

2. Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Landos Biopharma Australia Pty Ltd. (“Landos Australia”). All intercompany balances and transactions have been eliminated in consolidation.

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s audited financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2021. In the opinion of the Company’s management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of its financial position, operating results and cash flows for the periods presented have been included. Operating results for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the full year, for any other interim period or for any future year.

 

 

 

7


 

Use of Estimates

 

The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts in the Company's consolidated financial statements and the disclosures made in the accompanying notes. Significant estimates and assumptions made in the accompanying condensed consolidated financial statements include, but are not limited to, accrued liabilities, fair value of equity instruments, and uncertain tax positions. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Despite management’s intention to establish accurate estimates and use reasonable assumptions, actual results may differ from the Company's estimates.

 

Significant Accounting Policies

 

The significant accounting policies used in preparation of these unaudited condensed consolidated financial statements for the three and six months ended June 30, 2022 are consistent with, and should be read in conjunction with, those discussed in Note 1 of the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.

 

Cash and Cash Equivalents

 

Cash and cash equivalents consist of cash and highly liquid investments with original maturities of three months or less at the date of purchase. The carrying amounts approximate fair value due to the short maturities of these investments. Cash equivalents consist primarily of amounts invested in money market funds and commercial paper and are stated at fair value.

 

Marketable Securities

 

The Company’s investments in marketable securities are maintained by investment managers and consist of corporate debt securities with original maturities of over ninety (90) days, all of which are considered available-for-sale debt securities. The Company classifies its available-for-sale securities as short-term marketable securities on the Condensed Consolidated Balance Sheets, even though the stated maturity date may be one year or more beyond the current Condensed Consolidated Balance Sheets date, as the Company views those securities as available for use in current operations, if needed.