vaxx-20230930

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

September 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 November 6, 2023, the registrant had

112,871,792

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

our business,

future

plans

and strategies

and other

future conditions.

In 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 of

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,

revenues, 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

global

conflicts,

including

Russia-Ukraine

and

Israel-Hamas,

and

the

COVID-19

pandemic

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

(Unaudited)

Condensed Consolidated Statements of Operations and Other Comprehensive Loss

(Income) (Unaudited)

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

Condensed Consolidated Statements of Cash Flows

(Unaudited)

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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)

(Unaudited)

September 30,

December 31,

2023

2022

Assets

Current assets:

Cash and cash equivalents

17,395

33,475

Short-term investments

25,124

53,352

Restricted cash

206

1,095

Amounts due from related parties

407

414

Prepaid expenses and other current assets

3,224

5,551

Total current assets

46,356

93,887

Property and equipment, net

11,123

12,512

Total assets

57,479

106,399

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

2,974

5,295

Amounts due to related parties

12,512

12,772

Accrued expenses and other current liabilities

4,744

11,370

Note payable, net of debt issuance cost

402

391

Note payable to related party

929

1,113

Total current liabilities

21,561

30,941

Other liabilities:

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

9,630

9,933

Note payable to related party, net of current portion

2,347

3,112

Other long-term liabilities

236

Total liabilities

33,774

44,222

Commitments and contingencies (Note 14)

(nil)

Stockholders’ equity:

Class A common stock, $

0.0001

par value;

1,000,000,000

shares authorized,

112,871,792

and

112,182,750

shares issued and

outstanding at September 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

September 30, 2023 and December 31, 2022

Additional paid-in capital

373,678

366,798

Accumulated other comprehensive loss

(7)

(197)

Accumulated deficit

(350,245)

(304,703)

Total stockholders’ equity

23,705

62,177

Total liabilities and stockholders’ equity

57,479

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 LOSS (INCOME)

(in thousands, except share and per share amounts)

(Unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2023

2022

2023

2022

Operating expenses:

Research and development

7,910

12,468

27,679

34,609

General and administrative

5,535

7,300

18,956

20,546

Total operating expenses

13,445

19,768

46,635

55,155

Loss from operations

(13,445)

(19,768)

(46,635)

(55,155)

Other (income) expense:

Interest and other expense

176

514

264

Interest and other income

(512)

(545)

(1,657)

(625)

(Gain) loss on foreign currency transactions, net

(25)

(28)

Total other (income), net

(300)

(516)

(1,093)

(389)

Net loss

(13,145)

(19,252)

(45,542)

(54,766)

Net loss per share, basic and diluted

(0.10)

(0.15)

(0.36)

(0.43)

Weighted average common shares outstanding, basic and

diluted

126,736,784

126,036,865

126,272,546

125,899,557

Other comprehensive (income) loss:

Unrealized (gain) loss on investments

(11)

215

(190)

215

Other comprehensive (income) loss

(11)

215

(190)

215

Comprehensive loss

(13,134)

(19,467)

(45,352)

(54,981)

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

Issuance of common stock upon exercise of stock options

47,880

—

Stock-based compensation expense

—

1,769

—

1,769

Unrealized loss on investments

—

Net loss

—

(13,145)

Balance at September 30, 2023

112,871,792

278

13,874,132

373,678

(7)

(350,245)

23,705

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

Issuance of common stock upon exercise of stock options

52,165

Stock-based compensation expense

2,357

Net loss

(215)

(19,251)

(19,466)

Balance at September 30, 2022

112,181,870

278

13,874,132

364,444

(215)

(284,247)

80,261

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)

Nine Months Ended September 30,

2023

2022

Cash flows from operating activities:

Net loss

(45,542)

(54,766)

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

Depreciation expense

1,778

1,144

Amortization of debt issuance costs

Amortization of discount on short-term investments

(1,222)

(422)

Stock-based compensation expense

SEC Form 10-Q filed by Vaxxinity Inc.