vaxx-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

(Mark One)

☒

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

For the quarterly period ended

June 30, 2023

-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

001-41058

Vaxxinity, Inc.

(Exact name of registrant as specified in its charter)

Delaware

86-2083865

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

505 Odyssey Way

Merritt Island

32953

(Address of principal executive offices)

(Zip Code)

(

254

)

244-5739

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since

last report)

__________________

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

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Class A Common Stock, par value

$0.0001 per share

VAXX

The

Nasdaq

Global Market

Indicate by check mark whether the registrant (1) has filed

all reports required to be filed by Section 13 or 15(d) of

the Securities Exchange Act of 1934 during the

preceding 12 months (or for such shorter period that

the registrant was required to file such reports), and (2)

has been subject to such filing requirements for the past 90

days. Yes

☒

☐

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

☒

☐

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 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

☐

☒

As of

August 7, 2023, the registrant had

112,870,912

shares of $0.0001 par value Class A common stock

outstanding and

13,874,132

shares of $0.0001 par value Class

B common stock outstanding.

SPECIAL NOTE REGARDING FORWARD

-LOOKING STATEMENTS

This Quarterly Report on

Form 10-Q contains forward-looking statements. Forward-looking statements are neither historical

facts nor

assurances of future performance. Instead, they are based on our current beliefs, expectations and assumptions regarding the future of

our

business,

future

plans

and

strategies

and

other

future

conditions.

some

cases,

you can

identify

forward-looking

statements

because

they

contain

words

such

“anticipate,”

“believe,”

“estimate,”

“expect,”

“intend,”

“may,”

“predict,”

“project,”

“target,”

“potential,” “seek,” “will,” “would,” “could,” “should,” “continue,” “contemplate,” “plan,” other words and terms of

similar meaning

and the negative of these words or similar terms.

Forward-looking statements

are subject to

known and unknown

risks and uncertainties,

many of which

may be beyond

our control.

caution you that

forward-looking statements

are not guarantees

of future performance

or outcomes and

that actual performance

and outcomes may

differ materially

from those made

in or suggested

by the forward-looking

statements contained

in this Quarterly

Report. In addition, even if our results of

operations, financial condition and cash flows, and the development of the

markets in which

we operate, are consistent with the forward-looking statements contained in this Quarterly Report, those results or

developments may

not be indicative of

results or developments in subsequent periods. New

factors emerge from time to time that

may cause our business

not to develop

as we expect, and

it is not possible

for us to predict

all of them. Factors

that could cause

actual results and

outcomes

to differ materially from those reflected in

forward-looking statements include, among others,

the following:

•

the prospects

of our

product candidates,

including the

progress,

number,

scope, cost,

results

and timing

of data

from

our development activities, preclinical trials

and clinical trials for our

product candidates or programs, such as the target

indication(s) for

development

approval,

the

size,

design,

population,

conduct,

cost,

objective

endpoints

any

clinical trial, or the timing for

initiation or completion of or availability of

results from any clinical trial, for submission,

review or approval of any regulatory filing, or for meeting with regulatory authorities

;

•

the potential benefits that may be derived from any of our product candidates;

•

the timing of and our

ability to obtain and maintain regulatory approval for our

existing product candidates, any product

candidates

that

may

develop,

and

any

restrictions,

limitations,

warnings

the

label

any

approved

product candidates;

•

our ability to develop and commercialize new products and

product candidates;

•

our ability to leverage our Vaxxine

Platform;

•

the rate and degree of market acceptance of our products

and product candidates;

•

estimates of our addressable market and

market growth, and expectations about market trends;

•

our future operations, financial position, revenue, costs, expenses, uses of cash, capital requirements

our needs for

additional

financing or

the period

for which

our existing

cash resources

will be

sufficient

to meet

our operating

requirements;

•

our ability

to comply

with legal

and regulatory

requirements

relating

to privacy,

tax, anti-corruption

and

other applicable laws;

•

our ability to hire and retain key personnel and to manage our

future growth effectively;

•

our ability to access capital on acceptable terms in a rising interest rate and tighter credit

environment;

•

expectations regarding our ability to continue as a going concern;

•

competitive companies and technologies

within our industry and our ability to compete;

•

our and our

collaborators’, including

United Biomedical’s

(“UBI”), ability

and willingness

to obtain,

maintain, defend

and enforce our intellectual

property protection

for our proprietary and

collaborative product candidates,

and the scope

of such protection;

•

the

performance

third-party

suppliers

and

manufacturers

and

our

ability

find

additional

suppliers

and

manufacturers and obtain alternative sources of raw materials;

•

our ability

and the

potential to

successfully manufacture

our product

candidates for

pre-clinical use,

for clinical

trials

and, if approved, on a larger scale for commercial

use;

•

the

ability

and

willingness

our

third-party

collaborators,

including

UBI,

continue

research

and

development

activities

relating

our

product

candidates

and

our

ability

attract

additional

collaborators

with

development,

regulatory and commercialization expertise;

•

general economic, political,

demographic and business

conditions in the

United States, Taiwan

and other jurisdictions

where we conduct business or clinical trials;

•

the potential effects of government

regulation, including regulatory developments

in the United

States and other jurisdictions;

•

ability to obtain additional financing in future offerings

or otherwise;

•

the effects

of the Russia-Ukraine

conflict and the

COVID-19 pandemic

on business operations

and the initiation,

development and operation of our clinical trials,

including patient enrollment of our clinical trials; and

•

our strategies, prospects, plans, expectations, forecasts or objectives.

We discuss

many of these and other

factors in greater detail under Item 1A.

“Risk Factors” in our Annual Report on Form 10-K

for the year ended December 31, 2022 filed with

the Securities and Exchange Commission on March 27,

2023. These risk factors

are not

exhaustive. Other

sections of

this report

may include additional

factors which

could adversely

impact our

business and

financial performance. New

risk factors emerge

from time to

time, and it is

not possible to

predict all such risk

factors, nor can

we assess the impact of

all such risk factors on

our business or the extent to

which any factor or combination

of factors may cause

actual results

to differ

materially from

those contained

in any

forward-looking statements.

Forward-looking statements

are not

guarantees of performance. Given these uncertainties, you should

not place undue reliance on these forward-looking statements,

which speak only as of the date hereof

You

should read

this Quarterly

Report and

the documents

that we reference

in this Quarterly

Report and

have filed as

exhibits

completely and with the understanding that

our actual future results may be materially

different from what we expect. We qualify

all of

the

forward-looking

statements

in this

Quarterly Report

by these

cautionary

statements.

Except

as required

by law,

undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events

or otherwise.

As used

in this

Quarterly Report

on Form

10-Q, unless

otherwise specified

or the

context otherwise

requires, the

terms “we,”

“our,” “us,” the

“Company” refer to

Vaxxinity,

Inc. and its

subsidiaries. All brand

names or

trademarks appearing in

this Quarterly

Report are the property of their respective owners.

Table of

Contents

Page

PART I—Financial Information

Item 1. Financial Statements

Condensed Consolidated Balance Sheets

Condensed Consolidated Statements of Operations and Other Comprehensive (Income) Loss

Condensed Consolidated Statements of Stockholders’ Equity

Condensed Consolidated Statements of Cash Flows

Notes to Condensed Consolidated Financial Statements

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Item 4. Controls and Procedures

PART II—Other Information

Item 1A. Risk Factors

Item 6. Exhibits

Signature

PART

I – FINANCIAL INFORMATION

Item 1. Financial Statements.

VAXXINITY,

INC.

CONDENSED CONSOLIDATED

BALANCE SHEETS

(in thousands, except share and per share amounts)

June 30,

December 31,

2023

2022

(Unaudited)

Assets

Current assets:

Cash and cash equivalents

37,058

33,475

Short-term investments

18,790

53,352

Restricted cash

205

1,095

Amounts due from related parties

407

414

Prepaid expenses and other current assets

3,245

5,551

Total current assets

59,705

93,887

Property and equipment, net

11,662

12,512

Total assets

71,367

106,399

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

1,893

5,295

Amounts due to related parties

12,788

12,772

Accrued expenses and other current liabilities

7,708

11,370

Note payable, net of debt issuance cost

398

391

Note payable to related party

994

1,113

Total current liabilities

23,780

30,941

Other liabilities:

Note payable, net of debt issuance cost, net of current

portion

9,732

9,933

Note payable to related party, net of current portion

2,607

3,112

Other long-term liabilities

236

Total liabilities

36,355

44,222

Commitments and contingencies (Note 14)

Preferred stock: $

0.0001

par value,

50,000,000

shares authorized at June 30, 2023 and December

31, 2022

—

Stockholders’ equity:

Class A common stock, $

0.0001

par value;

1,000,000,000

shares authorized,

112,823,913

and

112,182,750

shares issued and

outstanding at June 30, 2023 and December 31, 2022, respectively

278

Class B common stock, $

0.0001

par value;

100,000,000

shares authorized,

13,874,132

shares issued and outstanding at June

30, 2023 and December 31, 2022

Additional paid-in capital

371,852

366,798

Accumulated other comprehensive loss

(18)

(197)

Accumulated deficit

(337,101)

(304,703)

Total stockholders’ equity

35,012

62,177

Total liabilities and stockholders’ equity

71,367

106,399

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements.

VAXXINITY,

INC.

CONDENSED CONSOLIDATED

STATEMENTS

OF OPERATIONS AND

OTHER COMPREHENSIVE (INCOME) LOSS

(in thousands, except share and per share amounts)

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2023

2022

2023

2022

Operating expenses:

Research and development

8,345

10,664

19,769

22,142

General and administrative

6,082

6,560

13,422

13,246

Total operating expenses

14,427

17,224

33,191

35,388

Loss from operations

(14,427)

(17,224)

(33,191)

(35,388)

Other (income) expense:

Interest and other expense

146

105

338

210

Interest and other income

(578)

(75)

(1,145)

(80)

(Gain) loss on foreign currency transactions, net

(18)

(2)

(3)

Total other (income) expense,

net

(449)

(793)

127

Net loss

(13,977)

(17,252)

(32,398)

(35,515)

Net loss per share, basic and diluted

(0.11)

(0.14)

(0.26)

(0.28)

Weighted average common

shares outstanding, basic and

diluted

126,481,497

125,948,595

126,272,546

125,829,764

Other comprehensive income:

Unrealized gain on investments

(31)

—

(179)

—

Other comprehensive income

(31)

—

(179)

—

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements.

VAXXINITY,

INC.

CONDENSED CONSOLIDATED

STATEMENTS

OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

(Unaudited)

Common Stock-Class A

Common Stock-Class B

Amount

Additional Paid-in

Capital

Accumulated

Other

Comprehensive

(Loss)

Accumulated

Deficit

Stockholders’

Equity

Balance at December 31, 2022

112,182,750

278

13,874,132

366,798

(197)

(304,703)

62,177

Issuance of common stock upon exercise of stock options

6,161

—

Stock-based compensation expense

—

2,225

—

2,225

Unrealized gain on investments

—

148

—

148

Net loss

—

(18,421)

Balance at March 31, 2023

112,188,911

278

13,874,132

369,026

(49)

(323,124)

46,133

Issuance of common stock upon exercise of stock options

635,001

—

393

—

393

Stock-based compensation expense

—

2,433

—

2,433

Unrealized gain on investments

—

Net loss

—

(13,977)

Balance at June 30, 2023

112,823,912

278

13,874,132

371,852

(18)

(337,101)

35,012

Common Stock-Class A

Common Stock-Class B

Amount

Additional Paid-in

Capital

Accumulated

Other

Comprehensive

(Loss)

Accumulated

Deficit

Stockholders’

Equity

Balance at December 31, 2021

111,518,094

278

13,874,132

357,821

—

(229,481)

128,619

Issuance of common stock upon exercise of stock options

448,998

—

121

—

121

Stock-based compensation expense

—

2,178

—

2,178

Net loss

—

(18,263)

Balance at March 31, 2022

111,967,092

278

13,874,132

360,120

—

(247,744)

112,655

Issuance of common stock upon exercise of stock options

162,613

—

112

—

112

Stock-based compensation expense

—

1,826

—

1,826

Net loss

—

(17,252)

Balance at June 30, 2022

112,129,705

278

13,874,132

362,058

—

(264,996)

97,341

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements.

VAXXINITY,

INC.

CONDENSED CONSOLIDATED

STATEMENTS

OF CASH FLOWS

(in thousands)

(Unaudited)

Six Months Ended June 30,

2023

2022

Cash flows from operating activities:

Net loss

(32,398)

(35,515)

Adjustments to reconcile net loss to net cash used in operating

activities:

Depreciation expense

1,112

725

Amortization of debt issuance costs

Amortization of discount on short-term investments

(872)

—

Stock-based compensation expense

4,658

4,004

Changes in operating assets and liabilities:

Amounts due from related parties

(7)

Prepaid expenses and other current assets

2,306

1,003

Long-term deposits

—

(2,076)

Accounts payable

(3,402)

(2,854)

Amounts due to related parties

(2,683)

Accrued expenses and other current liabilities

(3,662)

7,326

Other long-term liabilities

—

(1)

Net cash used in operating activities

(32,209)

(30,051)

Cash flows from investing activities:

Purchase of short-term investments

(18,588)

—

Proceeds from maturity of short-term investments

54,200

—

Purchases of property and equipment

(262)

(1,252)

Net cash provided by (used in) investing activities

35,350

(1,252)

Cash flows from financing activities:

Repayments of note payable

(220)

(213)

Repayments of note payable with related party

(625)

—

Proceeds from exercise of stock options

397

233

Net cash provided by (used in) financing activities

(448)

Change in cash, cash equivalents and restricted cash

2,693

(31,283)

Cash, cash equivalents and restricted cash at beginning of

period

34,570

145,057

Cash, cash equivalents and restricted cash at end of period

37,263

113,774

Reconciliation of cash, cash equivalents and restricted cash:

Cash, cash equivalents and restricted cash at end of period

37,263

113,774

Less restricted cash

(205)

(1,095)

Cash and cash equivalents end of period

37,058

112,679

Supplemental Disclosure

Cash paid for interest

192

185

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements.

VAXXINITY,

INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

1. Nature of the Business

Vaxxinity,

Inc.,

Delaware

corporation

(“Vaxxinity

,”

and

together

with

its

subsidiaries,

the

“Company”),

was

formed

through

the

combination of

two separate businesses

that originated

from United Biomedical,

Inc. (“UBI”)

in two separate

transactions: a

spin-out

from UBI

in 2014 of

operations focused on

developing chronic disease

product candidates that

resulted in

United Neuroscience (“UNS”),

and a second spin-out

from UBI in 2020

of operations focused on

the development of a

COVID-19 vaccine that resulted

in C19 Corp.

(“COVAXX”).

On February 2, 2021,

Vaxxinity

was incorporated for

the purpose of reorganizing

and combining UNS

and COVAXX

and on March 2, 2021, did so by acquiring

all of the outstanding equity interests

of UNS and COVAXX

pursuant to a contribution and

exchange

agreement

(the

“Contribution

and

Exchange

Agreement”)

whereby

the

existing

equity

holders

UNS

and

COVAXX

contributed

their

equity

interests

each

UNS

and

COVAXX

exchange

for

equity

Vaxxinity

(the

“Reorganization”).

December 31, 2022, COVAXX

merged with and into Vaxxinity.

The Company is a

biotechnology company currently focused on

developing product candidates for human

use in the fields

of neurology,

pain, cardiovascular diseases

and coronaviruses utilizing

its “Vaxxine Platform”—a synthetic peptide vaccine

technology first developed

UBI

and

subsequently

refined

over

the

last

two

decades.

The

Company

engaged

the

development

rationally

designed

prophylactic and therapeutic vaccines to combat common chronic diseases with large global unmet medical need. The Company

is also

developing a heterologous booster vaccine

for SARS-Cov-2. UBI is a

significant shareholder of the Company

and, therefore, considered

a related party.

The Company

is subject

to risks and

uncertainties common

to early-stage

companies in

the biotechnology

industry including,

but not

limited

to,

uncertainty

product

development

and

commercialization,

lack

marketing

and

sales

history,

development

its

competitors of new

technological innovations, dependence on

key personnel, market

acceptance of products, product

liability, protection

of proprietary technology,

ability to raise additional

SEC Form 10-Q filed by Vaxxinity Inc.