aqst-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended June 30, 2023


☐			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: 001-38599

Aquestive Therapeutics, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	30 Technology Drive, Warren, NJ 07059	82-3827296
(State or other jurisdiction of Incorporation or organization)	( 908) 941-1900	(I.R.S. Employer Identification Number)

(Address, Zip Code and Telephone Number of Registrant’s Principal Executive Offices)

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 $0.001 per share	AQST	NASDAQ Global Market

Securities registered pursuant to Section 12(g) of the Act: None

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act of 1934.

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

The number of outstanding shares of the registrant’s common stock, par value of $0.001 per share (the "Common Stock"), as of the close of business on August 4, 2023 was 61,726,668.

Table o f Content

AQUESTIVE THERAPEUTICS, INC.

FORM 10-Q

TABLE OF CONTENTS


		Page No.
PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022	3
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, 2023 and 2022	4
	Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the three months and six months ended June 30, 2023 and 2022	5
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	42
Item 4.	Controls and Procedures	42

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	44
Item 6.	Exhibits	44

SIGNATURES		45

Table o f Content

PART I – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS (Unaudited)

AQUESTIVE THERAPEUTICS, INC.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)


	June 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	22,436	$	27,273
Trade and other receivables, net	10,101		4,704
Inventories, net	5,950		5,780
Prepaid expenses and other current assets	1,301		2,131
Total current assets	39,788		39,888
Property and equipment, net	4,602		4,085
Right-of-use assets, net	5,778		5,211
Intangible assets, net	1,357		1,435
Other non-current assets	5,469		6,451
Total assets	$	56,994	$	57,070

Liabilities and stockholders’ deficit
Current liabilities:
Accounts payable	$	10,689	$	9,946
Accrued expenses	4,263		7,967
Lease liabilities, current	347		255
Deferred revenue, current	3,992		1,513
Liability related to the sale of future revenue, current	1,000		1,147
Loans payable, current	18,362		18,700
Total current liabilities	38,653		39,528
Loans payable, net	20,801		33,448
Liability related to the sale of future revenue, net	63,455		64,112
Lease liabilities	5,610		5,085
Deferred revenue	33,120		31,417
Other non-current liabilities	2,006		2,034
Total liabilities	163,645		175,624
Contingencies (Note 19)

Stockholders’ deficit:
Common stock ,$0.001 par value. Authorized 250,000,000 shares; 61,615,959 and 54,827,734 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	62		55
Additional paid-in capital	202,218		192,598
Accumulated deficit	(308,931)		(311,207)
Total stockholders’ deficit	(106,651)		(118,554)
Total liabilities and stockholders’ deficit	$	56,994	$	57,070

See accompanying notes to the condensed consolidated financial statements.

Table o f Content

AQUESTIVE THERAPEUTICS, INC.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(In thousands, except share and per share data amounts)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenues	$	13,241	$	13,265	$	24,375	$	25,535
Costs and expenses:
Manufacture and supply	6,617		5,242		11,354		9,456
Research and development	3,473		5,198		7,020		9,971
Selling, general and administrative	7,360		15,587		14,815		28,608
Total costs and expenses	17,450		26,027		33,189		48,035
Loss from operations	(4,209)		(12,762)		(8,814)		(22,500)
Other income/ (expenses):
Interest expense	(1,373)		(1,635)		(2,808)		(3,253)
Interest expense related to the sale of future revenue, net	(55)		(1,937)		(107)		(3,798)
Interest and other income (expense), net	129		32		14,642		29
Loss on extinguishment of debt	—		—		(353)		—
Net income (loss) before income taxes	(5,508)		(16,302)		2,560		(29,522)
Income taxes	284		—		284		—
Net income (loss)	$	(5,792)	$	(16,302)	$	2,276	$	(29,522)
Comprehensive income (loss)	$	(5,792)	$	(16,302)	$	2,276	$	(29,522)

Earnings (loss) per share attributable to common stockholders:
Basic (in dollars per share)	$	(0.10)	$	(0.36)	$	0.04	$	(0.68)
Diluted (in dollars per share)	$	(0.10)	$	(0.36)	$	0.04	$	(0.68)
Weighted average common shares outstanding:
Basic (in shares)	57,350,902		45,462,516		56,494,805		43,475,198
Diluted (in shares)	57,350,902		45,462,516		58,938,222		43,475,198

See accompanying notes to the condensed consolidated financial statements.

Table o f Content

AQUESTIVE THERAPEUTICS, INC.

Condensed Consolidated Statements of Changes in Stockholders’ Deficit

Three Months Ended March 31 2023 and June 30, 2023

(In thousands, except share amounts)

(Unaudited)


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity/Deficit
	Shares	Amount

Balance at December 31, 2022	54,827,734	$	55	$	192,598	$	(311,207)	$	(118,554)
Common Stock issued under public equity offering	1,078,622	1		992		—		993
Costs of common stock issued under public equity offering	—	—		(77)		—		(77)
Share-based compensation expense	—	—		344		—		344
Vested restricted stock units	16,005			(8)				(8)
Other	—	—		(1)		—		(1)
Net Income	—	—		—		8,068		8,068
Balance at March 31, 2023	55,922,361	56		193,848		(303,139)		(109,235)


Costs of common stock issued under private equity offering	—	—		—		—		—
Common Stock issued upon warrant exercises	3,689,452	4		3,538		—		3,542
Common Stock issued under public equity offering	1,981,937	2		4,407		—		4,409
Costs of common stock issued under public equity offering	—	—		(235)		—		(235)
Shares issued under employee stock purchase plan	18,699	—		31		—		31
Share-based compensation expense	—	—		631		—		631
Vested restricted stock units	3,510	—		(3)		—		(3)
Other	—	—		1		—		1
Net loss	—	—		—		(5,792)		(5,792)
Balance at June 30, 2023	61,615,959	62		202,218		(308,931)		(106,651)

Table o f Content

AQUESTIVE THERAPEUTICS, INC.

Condensed Consolidated Statements of Changes in Stockholders’ Deficit

Three Months Ended March 31 2022 and June 30, 2022

(In thousands, except share amounts)

(Unaudited)


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity/Deficit
	Shares	Amount

Balance at December 31, 2021	41,228,736	$	41	$	174,621	$	(256,796)	$	(82,134)
Common Stock issued under public equity offering	391,652	—		1,360		—		1,360
Costs of common stock issued under public equity offering	—	—		(62)		—		(62)
Share-based compensation expense	—	—		913		—		913
Other	—	—		1		(1)		—
Net loss	—	—		—		(13,220)		(13,220)
Balance at March 31, 2022	41,620,388	41		176,833		(270,017)		(93,143)
Fair value of warrants issued	—	—		5,874		—		5,874
Common Stock issued under private equity offering	6,686,491	7		4,622		—		4,629
Costs of common stock issued under private equity offering	—	—		(824)		—		(824)
Common Stock issued upon warrant exercises	4,000,000	4		(4)		—		—
Common Stock issued under public equity offering	1,013,226	1

SEC Form 10-Q filed by Aquestive Therapeutics Inc.