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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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56-2181648
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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101 Hudson Street
Suite 3610
Jersey City, New Jersey
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07302-6548
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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¨
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Accelerated filer
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ý
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1A.
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Item 6.
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Item 1.
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Financial Statements
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September 30, 2016
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December 31, 2015
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||||
Assets
|
|
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|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
29,809
|
|
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$
|
46,985
|
|
Short-term investments
|
22,544
|
|
|
—
|
|
||
Prepaid expenses and other current assets
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1,838
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|
|
1,452
|
|
||
Total current assets
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54,191
|
|
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48,437
|
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||
Investments
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6,030
|
|
|
—
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|
||
Other assets
|
431
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|
|
419
|
|
||
Deferred offering costs
|
360
|
|
|
417
|
|
||
Total assets
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$
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61,012
|
|
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$
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49,273
|
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Liabilities and stockholders’ equity
|
|
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||||
Current liabilities:
|
|
|
|
||||
Accounts payable
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$
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2,468
|
|
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$
|
619
|
|
Accrued expenses
|
1,306
|
|
|
3,149
|
|
||
Accrued severance and retention costs
|
7
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|
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2,639
|
|
||
Deferred revenue, current portion
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257
|
|
|
257
|
|
||
Total current liabilities
|
4,038
|
|
|
6,664
|
|
||
Deferred revenue, non-current
|
442
|
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|
635
|
|
||
Deferred rent
|
25
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|
|
25
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|
||
Warrant liability
|
9,164
|
|
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—
|
|
||
Loan payable, long-term
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14,167
|
|
|
—
|
|
||
Total liabilities
|
27,836
|
|
|
7,324
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value, authorized 5,000,000 shares as of September 30, 2016 and December 31, 2015; 0 shares issued and outstanding as of September 30, 2016 and December 31, 2015
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—
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|
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—
|
|
||
Common stock, $0.001 par value, 125,000,000 shares authorized as of September 30, 2016, and December 31, 2015; 23,430,868 and 13,905,599 shares issued and outstanding as of September 30, 2016, and December 31, 2015, respectively
|
23
|
|
|
14
|
|
||
Additional paid-in capital
|
209,827
|
|
|
192,069
|
|
||
Accumulated deficit
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(176,674
|
)
|
|
(150,134
|
)
|
||
Total stockholders’ equity
|
33,176
|
|
|
41,949
|
|
||
Total liabilities and stockholders’ equity
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$
|
61,012
|
|
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$
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49,273
|
|
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Three Months Ended September 30,
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Nine Months Ended September 30,
|
||||||||||||
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2016
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2015
|
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2016
|
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2015
|
||||||||
Revenue
|
$
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64
|
|
|
$
|
64
|
|
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$
|
193
|
|
|
$
|
193
|
|
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development, net
|
4,890
|
|
|
3,458
|
|
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16,293
|
|
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10,525
|
|
||||
Selling, general and administrative
|
1,880
|
|
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4,143
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6,086
|
|
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9,628
|
|
||||
Total operating expenses
|
6,770
|
|
|
7,601
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|
|
22,379
|
|
|
20,153
|
|
||||
Loss from operations
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(6,706
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)
|
|
(7,537
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)
|
|
(22,186
|
)
|
|
(19,960
|
)
|
||||
Other (income) expense:
|
|
|
|
|
|
|
|
||||||||
Warrant liability fair value adjustment
|
4,570
|
|
|
—
|
|
|
4,469
|
|
|
—
|
|
||||
Interest income
|
(48
|
)
|
|
(8
|
)
|
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(115
|
)
|
|
(10
|
)
|
||||
Total other expense (income)
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4,522
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|
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(8
|
)
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4,354
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|
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(10
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)
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||||
Loss from continuing operations
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(11,228
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)
|
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(7,529
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)
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(26,540
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)
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(19,950
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)
|
||||
Discontinued operations:
|
|
|
|
|
|
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|
||||||||
Loss from discontinued operations
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—
|
|
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(826
|
)
|
|
—
|
|
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(4,285
|
)
|
||||
Net loss
|
$
|
(11,228
|
)
|
|
$
|
(8,355
|
)
|
|
$
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(26,540
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)
|
|
$
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(24,235
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)
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Loss per share attributable to common stockholders - basic and diluted
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(0.48
|
)
|
|
$
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(0.54
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)
|
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$
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(1.53
|
)
|
|
$
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(1.72
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)
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Discontinued operations
|
—
|
|
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(0.06
|
)
|
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—
|
|
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(0.37
|
)
|
||||
Net loss per share - basic and diluted
|
$
|
(0.48
|
)
|
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$
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(0.60
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)
|
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$
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(1.53
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)
|
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$
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(2.09
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)
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Weighted average common shares outstanding:
|
|
|
|
|
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||||||||
Basic and diluted
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23,425,007
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13,904,331
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17,329,441
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11,576,498
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|
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Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(26,540
|
)
|
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$
|
(24,235
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)
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Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Non-cash component of impairment loss on classification of assets as held for sale (Note 13)
|
—
|
|
|
586
|
|
||
Loss on disposal of Services Business
|
—
|
|
|
73
|
|
||
Depreciation
|
11
|
|
|
447
|
|
||
Stock-based compensation expense
|
908
|
|
|
2,656
|
|
||
Write off of deferred offering costs
|
111
|
|
|
—
|
|
||
Change in fair value of warrant liability
|
4,469
|
|
|
—
|
|
||
Changes in deferred rent
|
—
|
|
|
(108
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable and unbilled services
|
—
|
|
|
(523
|
)
|
||
Prepaid expenses, other assets, and deferred costs
|
(939
|
)
|
|
(855
|
)
|
||
Accounts payable and accrued expenses
|
5
|
|
|
(431
|
)
|
||
Accrued severance and retention cost obligations
|
(2,631
|
)
|
|
2,809
|
|
||
Deferred revenue
|
(193
|
)
|
|
1,018
|
|
||
Net cash used in operating activities
|
(24,799
|
)
|
|
(18,563
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Maturities of short-term investments
|
6,932
|
|
|
—
|
|
||
Purchases of property and equipment
|
(24
|
)
|
|
(547
|
)
|
||
Proceeds from sale of Services Business (Note 13)
|
500
|
|
|
2,549
|
|
||
Purchase of investments
|
(35,506
|
)
|
|
—
|
|
||
Net cash (used in) provided by investing activities
|
(28,098
|
)
|
|
2,002
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from common stock issued
|
23,077
|
|
|
41,400
|
|
||
Payments of deferred offering costs and underwriting discounts and commissions
|
(1,788
|
)
|
|
(3,422
|
)
|
||
Proceeds from Loan Agreement
|
15,000
|
|
|
—
|
|
||
Payments of Loan Agreement issuance costs
|
(589
|
)
|
|
—
|
|
||
Proceeds from employee stock purchase plan issuance
|
21
|
|
|
106
|
|
||
Net cash provided by financing activities
|
35,721
|
|
|
38,084
|
|
||
Net decrease in cash and cash equivalents
|
(17,176
|
)
|
|
21,523
|
|
||
Cash and cash equivalents, beginning of period
|
46,985
|
|
|
32,243
|
|
||
Cash and cash equivalents, end of period
|
$
|
29,809
|
|
|
$
|
53,766
|
|
Supplemental cash flow information:
|
|
|
|
||||
Cash received for interest
|
67
|
|
|
—
|
|
||
Noncash financing and investing activities:
|
|
|
|
||||
Loan Agreement issuance costs included in accounts payable
|
$
|
426
|
|
|
$
|
—
|
|
Deferred offering costs included in accounts payable and accrued expenses
|
$
|
—
|
|
|
$
|
52
|
|
Equipment purchases in accounts payable and accrued expenses
|
$
|
—
|
|
|
$
|
12
|
|
Deferred offering costs reclassified to additional-paid-in capital
|
$
|
65
|
|
|
$
|
3,388
|
|
1.
|
Description of Business and Basis of Preparation
|
•
|
a base prospectus which covers the offering, issuance and sale by the Company of up to a maximum aggregate offering price of
$150,000
of the Company's common stock, preferred stock, debt securities and warrants, including common stock or preferred stock issuable upon conversion of debt securities, common stock issuable upon conversion of preferred stock, or common stock, preferred stock or debt securities issuable upon the exercise of warrants (the "Shelf Registration"), and
|
•
|
a prospectus covering the offering, issuance and sale by the Company of up to a maximum aggregate offering price of
$40,000
of the Company's common stock that may be issued and sold under a sales agreement with Cowen and Company, LLC ("Cowen"). On April 10, 2016, the Company terminated the sales agreement with Cowen and on April 11, 2016, entered
into a Controlled Equity Offering Sales Agreement
SM
(the “Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”). Pursuant to the Sales Agreement, the Company may sell from time to time, at its option, up to an aggregate of
$40,000
of the Company’s common stock, through Cantor, as sales agent (the “ATM Offering”). Pursuant to the Sales Agreement, sales of the common stock, if any, will be made under the Company’s previously filed and currently effective registration statement on Form S-3
(File No. 333-207705)
.
|
2.
|
Summary of Significant Accounting Policies
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Research and development expense, gross
|
|
$
|
5,091
|
|
|
$
|
3,553
|
|
|
$
|
16,881
|
|
|
$
|
11,352
|
|
Less: Reimbursement of research and development expense
|
|
201
|
|
|
95
|
|
|
588
|
|
|
827
|
|
||||
Research and development expense, net of reimbursements
|
|
$
|
4,890
|
|
|
$
|
3,458
|
|
|
$
|
16,293
|
|
|
$
|
10,525
|
|
•
|
Level 1 — Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets;
|
•
|
Level 2 — Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and
|
•
|
Level 3 — Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances.
|
|
September 30,
|
|
||||
|
2016
|
|
2015
|
|
||
Warrants to purchase Series C-1 Preferred
|
14,033
|
|
|
14,033
|
|
|
Warrants to purchase common stock associated with June 2016 Public Offering
|
4,218,750
|
|
|
—
|
|
|
Warrants to purchase common stock associated with Loan Agreement
|
122,435
|
|
|
—
|
|
|
Stock options
|
1,815,583
|
|
|
1,207,697
|
|
|
|
|
|
|
|
||||||||||||
|
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
||||||||
As of September 30, 2016
|
|
|
|
|
|
|
|
|
||||||||
U.S. government securities
|
|
$
|
28,574
|
|
|
$
|
7
|
|
|
$
|
48
|
|
|
$
|
28,533
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
28,574
|
|
|
$
|
7
|
|
|
$
|
48
|
|
|
$
|
28,533
|
|
4.
|
Prepaid Expenses and Other Current Assets
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Prepaid SCY-078 development services
|
$
|
262
|
|
|
$
|
108
|
|
Prepaid insurance
|
400
|
|
|
285
|
|
||
Other prepaid expenses
|
89
|
|
|
91
|
|
||
Other receivable due from R-Pharm
|
1,017
|
|
|
430
|
|
||
Escrow receivable due from Accuratus (Note 13)
|
—
|
|
|
500
|
|
||
Other current assets
|
70
|
|
|
38
|
|
||
Total prepaid expenses and other current assets
|
$
|
1,838
|
|
|
$
|
1,452
|
|
5.
|
Accrued Expenses
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Accrued research and development expenses
|
$
|
516
|
|
|
$
|
1,903
|
|
Accrued employee bonus compensation
|
569
|
|
|
776
|
|
||
Employee withholdings
|
7
|
|
|
42
|
|
||
Other accrued expenses
|
214
|
|
|
428
|
|
||
Total accrued expenses
|
$
|
1,306
|
|
|
$
|
3,149
|
|
6.
|
Borrowings
|
|
September 30, 2016
|
||
2016
|
$
|
—
|
|
2017
|
—
|
|
|
2018
|
4,500
|
|
|
2019
|
6,000
|
|
|
2020
|
4,500
|
|
|
Total principal payments
|
15,000
|
|
|
Final fee due at maturity
|
750
|
|
|
Total principal and final fee payment
|
15,750
|
|
|
Unamortized discount and debt issuance costs
|
(1,583
|
)
|
|
Less current portion
|
—
|
|
|
Loan payable, long term
|
$
|
14,167
|
|
7.
|
Commitments and Contingencies
|
|
|
||
September 30, 2016 to December 31, 2016
|
$
|
76
|
|
2017
|
307
|
|
|
2018
|
182
|
|
|
2019
|
—
|
|
|
2020
|
—
|
|
|
Thereafter
|
—
|
|
|
Total
|
$
|
565
|
|
8.
|
Stockholder's Equity
|
|
Shares of
Common Stock |
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Total Stockholders' Equity
|
|||||||||
Balance, December 31, 2015
|
13,905,599
|
|
|
$
|
14
|
|
|
$
|
192,069
|
|
|
$
|
(150,134
|
)
|
|
$
|
41,949
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,540
|
)
|
|
(26,540
|
)
|
||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
908
|
|
|
—
|
|
|
908
|
|
||||
Debt discount for Solar Warrant
|
|
|
|
|
244
|
|
|
|
|
244
|
|
|||||||
Common stock issued through employee stock purchase plan
|
7,356
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
||||
Common stock issued under Shelf Registration, net of expenses
|
9,517,913
|
|
|
9
|
|
|
16,585
|
|
|
—
|
|
|
16,594
|
|
||||
Balance, September 30, 2016
|
23,430,868
|
|
|
$
|
23
|
|
|
$
|
209,827
|
|
|
$
|
(176,674
|
)
|
|
$
|
33,176
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||
Outstanding stock options
|
1,815,583
|
|
|
1,379,727
|
|
Outstanding Series C-1 Preferred warrants
|
14,033
|
|
|
14,033
|
|
Outstanding June 2016 Public Offering warrants
|
4,218,750
|
|
|
—
|
|
Outstanding Solar Warrant
|
122,435
|
|
|
—
|
|
For possible future issuance under 2014 Equity Incentive Plan (Note 10)
|
672,782
|
|
|
552,415
|
|
For possible future issuance under Employee Stock Purchase Plan (Note 10)
|
72,338
|
|
|
50,283
|
|
For possible future issuance under 2015 Inducement Plan (Note 10)
|
165,000
|
|
|
165,000
|
|
Total common shares reserved for future issuance
|
7,080,921
|
|
|
2,161,458
|
|
9.
|
Income Taxes
|
10.
|
Stock-based Compensation
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Research and development
|
$
|
67
|
|
|
$
|
128
|
|
|
$
|
223
|
|
|
$
|
242
|
|
Selling, general and administrative
|
226
|
|
|
1,306
|
|
|
685
|
|
|
2,206
|
|
||||
Discontinued operations (Note 13)
|
—
|
|
|
107
|
|
|
—
|
|
|
208
|
|
||||
Total
|
$
|
293
|
|
|
$
|
1,541
|
|
|
$
|
908
|
|
|
$
|
2,656
|
|
11.
|
Fair Value Measurements
|
|
|
|
|
Fair Value Hierarchy Classification
|
|||||||||||
|
|
Balance
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
|||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|||||||
Cash on deposit
|
|
$
|
46,935
|
|
|
$
|
46,935
|
|
|
—
|
|
|
—
|
|
|
Money market funds
|
|
50
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|||
Total assets
|
|
$
|
46,985
|
|
|
$
|
46,985
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
September 30, 2016
|
|
|
|
|
|
|
|
|
|||||||
Cash on deposit
|
|
$
|
29,809
|
|
|
$
|
29,809
|
|
|
—
|
|
|
—
|
|
|
Total assets
|
|
$
|
29,809
|
|
|
$
|
29,809
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Warrant liability
|
|
$
|
9,164
|
|
|
—
|
|
|
—
|
|
|
$
|
9,164
|
|
|
Total liabilities
|
|
$
|
9,164
|
|
|
—
|
|
|
—
|
|
|
$
|
9,164
|
|
|
|
|
|
|
|
|
|
|
|
12.
|
Accrued Severance and Retention Costs
|
13.
|
Sale of the Services Business, Discontinued Operations
|
|
|
|
Three Months Ended September 30, 2015
|
|
Nine Months Ended September 30, 2015
|
||||
Major line items constituting loss of discontinued operations:
|
|
|
|
|
|
||||
Revenue
|
|
|
$
|
560
|
|
|
$
|
7,408
|
|
Cost of revenue
|
|
|
(466
|
)
|
|
(7,296
|
)
|
||
Research and development
|
|
|
(7
|
)
|
|
(860
|
)
|
||
Severance and exit costs
|
|
|
(1,061
|
)
|
|
(2,114
|
)
|
||
Impairment charge from classification of assets held for sale
|
|
|
—
|
|
|
(1,350
|
)
|
||
Gain (loss) on disposal, net of associated transaction costs of $764 for the three and nine month periods ended September 30, 2015
|
|
|
148
|
|
|
(73
|
)
|
||
Loss from discontinued operations
|
|
|
$
|
(826
|
)
|
|
$
|
(4,285
|
)
|
|
|
Nine Months Ended September 30, 2015
|
||
Depreciation expense
|
|
$
|
391
|
|
Purchases of property and equipment
|
|
(547
|
)
|
|
Stock-based compensation
|
|
208
|
|
|
Changes in deferred rent
|
|
(133
|
)
|
|
Equipment purchases in accounts payable and accrued expenses
|
|
—
|
|
•
|
Based on
in vitro
studies conducted with a broad range of CYP enzymes, SCY-078 showed minimal interference with most enzymes, either as a direct inhibitor or inducer, including CYP3A enzymes, the most common pathway for the metabolism of many drugs. CYP2C8 was shown to be the CYP enzyme with a higher risk of being inhibited by SCY-078;
|
•
|
DDI rosiglitazone clinical study to evaluate CYP2C8 inhibition: rosiglitazone, an antidiabetic medication, is very sensitive to inhibition of CYP2C8 and was used as an indicator of the maximum potential for clinical interaction with oral SCY-078. This study showed that SCY-078 had no effect on rosiglitazone blood levels when co-administered (i.e., no meaningful interaction was observed), indicating a low risk of clinical interactions with drugs metabolized via CYP enzymes;
|
•
|
DDI tacrolimus clinical study: tacrolimus is an anti-rejection drug commonly used for bone marrow and solid organ transplants patients. Several antifungals, specifically the azoles, induce an increase of tacrolimus blood levels (typically from two- to four-fold), resulting in toxicity concerns which frequently limits the use of the antifungals, and can require major tacrolimus dose adjustments. In this study, oral SCY-078 had no effect on the maximum tacrolimus blood levels (no change in Cmax) with only a minor effect on tacrolimus' AUC. These results suggest a low risk of clinical interactions and support the ability of co-administration of both drugs.
|
•
|
costs related to executing preclinical and clinical trials, including related drug formulation, manufacturing and other development;
|
•
|
salaries and personnel-related costs, including benefits and any stock-based compensation for personnel in research and development functions;
|
•
|
fees paid to consultants and other third parties who support our product candidate development and intellectual property protection;
|
•
|
other costs in seeking regulatory approval of our products; and
|
•
|
allocated overhead.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
||||||||||
SCY-078
|
$
|
4,890
|
|
|
$
|
3,434
|
|
|
$
|
16,293
|
|
|
$
|
10,360
|
|
Cyclophilin Inhibitor Platform
|
—
|
|
|
24
|
|
|
—
|
|
|
165
|
|
||||
Total research and development, net
|
$
|
4,890
|
|
|
$
|
3,458
|
|
|
$
|
16,293
|
|
|
$
|
10,525
|
|
|
Three Months Ended September 30,
|
|||||||||||||
|
2016
|
|
2015
|
|
Period-to-Period Change
|
|||||||||
Revenue
|
$
|
64
|
|
|
$
|
64
|
|
|
$
|
—
|
|
|
—
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||
Research and development, net
|
4,890
|
|
|
3,458
|
|
|
1,432
|
|
|
41.4
|
%
|
|||
Selling, general and administrative
|
1,880
|
|
|
4,143
|
|
|
(2,263
|
)
|
|
(54.6
|
)%
|
|||
Total operating expenses
|
6,770
|
|
|
7,601
|
|
|
(831
|
)
|
|
(10.9
|
)%
|
|||
Loss from operations
|
(6,706
|
)
|
|
(7,537
|
)
|
|
831
|
|
|
(11.0
|
)%
|
|||
Other (income) expense:
|
|
|
|
|
|
|
|
|
||||||
Warrant liability fair value adjustment
|
4,570
|
|
|
—
|
|
|
4,570
|
|
|
—
|
|
|||
Interest income
|
(48
|
)
|
|
(8
|
)
|
|
(40
|
)
|
|
500.0
|
%
|
|||
Total other expense (income)
|
4,522
|
|
|
(8
|
)
|
|
4,530
|
|
|
(56,625.0
|
)%
|
|||
Loss from continuing operations
|
(11,228
|
)
|
|
(7,529
|
)
|
|
(3,699
|
)
|
|
49.1
|
%
|
|||
Discontinued operations:
|
|
|
|
|
|
|
|
|
||||||
Loss from discontinued operations
|
—
|
|
|
(826
|
)
|
|
826
|
|
|
(100.0
|
)%
|
|||
Net loss
|
$
|
(11,228
|
)
|
|
$
|
(8,355
|
)
|
|
$
|
(2,873
|
)
|
|
34.4
|
%
|
|
Nine Months Ended September 30,
|
|||||||||||||
|
2016
|
|
2015
|
|
Period-to-Period Change
|
|||||||||
Revenue
|
$
|
193
|
|
|
$
|
193
|
|
|
$
|
—
|
|
|
—
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Research and development, net
|
16,293
|
|
|
10,525
|
|
|
5,768
|
|
|
54.8
|
%
|
|||
Selling, general and administrative
|
6,086
|
|
|
9,628
|
|
|
(3,542
|
)
|
|
(36.8
|
)%
|
|||
Total operating expenses
|
22,379
|
|
|
20,153
|
|
|
2,226
|
|
|
11.0
|
%
|
|||
Loss from operations
|
(22,186
|
)
|
|
(19,960
|
)
|
|
(2,226
|
)
|
|
11.2
|
%
|
|||
Other (income) expense:
|
|
|
|
|
|
|
|
|||||||
Warrant liability fair value adjustment
|
4,469
|
|
|
—
|
|
|
4,469
|
|
|
—
|
|
|||
Interest income
|
(115
|
)
|
|
(10
|
)
|
|
(105
|
)
|
|
1,050.0
|
%
|
|||
Total other expense (income)
|
4,354
|
|
|
(10
|
)
|
|
4,364
|
|
|
(43,640.0
|
)%
|
|||
Loss from continuing operations
|
(26,540
|
)
|
|
(19,950
|
)
|
|
(6,590
|
)
|
|
33.0
|
%
|
|||
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
|||||
Loss from discontinued operations
|
—
|
|
|
(4,285
|
)
|
|
4,285
|
|
|
(100.0
|
)%
|
|||
Net loss
|
$
|
(26,540
|
)
|
|
$
|
(24,235
|
)
|
|
$
|
(2,305
|
)
|
|
9.5
|
%
|
|
Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
|
||||||
Cash and cash equivalents, January 1
|
$
|
46,985
|
|
|
$
|
32,243
|
|
Net cash used in operating activities
|
(24,799
|
)
|
|
(18,563
|
)
|
||
Net cash (used in) provided by investing activities
|
(28,098
|
)
|
|
2,002
|
|
||
Net cash provided by financing activities
|
35,721
|
|
|
38,084
|
|
||
Net decrease in cash and cash equivalents
|
(17,176
|
)
|
|
21,523
|
|
||
Cash and cash equivalents, September 30
|
$
|
29,809
|
|
|
$
|
53,766
|
|
•
|
the progress, costs, and the clinical development of SCY-078;
|
•
|
the outcome, costs and timing of seeking and obtaining FDA and any other regulatory approvals;
|
•
|
the ability of product candidates to progress through clinical development successfully;
|
•
|
our need to expand our research and development activities;
|
•
|
the costs associated with securing, establishing and maintaining commercialization and manufacturing capabilities;
|
•
|
our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;
|
•
|
our need and ability to hire additional management and scientific and medical personnel; and
|
•
|
the economic and other terms, timing and success of our existing licensing arrangements and any collaboration, licensing or other arrangements into which we may enter in the future.
|
Item 3.
|
Quantitative and Qualitative Disclosure about Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1A.
|
Risk Factors
|
Item 6.
|
Exhibits
|
SCYNEXIS, INC.
|
||
|
|
|
By:
|
|
/s/ Marco Taglietti, M.D.
|
|
|
Marco Taglietti, M.D.
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
Date:
|
|
November 7, 2016
|
|
|
|
By:
|
|
/s/ Eric Francois
|
|
|
Eric Francois
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
|
|
Date:
|
|
November 7, 2016
|
Exhibit
Number
|
|
Description of Document
|
|
|
|
2.1
|
|
Asset Purchase Agreement, dated July 17, 2015, between the Company and Accuratus Lab Services, Inc. (Filed with the SEC as Exhibit 10.1 to our current report on Form 8-K, filed with the SEC on July 23, 2015, SEC File No. 001-36365, and incorporated by reference here).
|
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation (Filed with the SEC as Exhibit 3.1 to our current report on Form 8-K, filed with the SEC on May 12, 2014, SEC File No. 001-36365, and incorporated by reference here).
|
|
|
|
3.2
|
|
Amended and Restated By-Laws (Filed with the SEC as Exhibit 3.4 to our Registration Statement on Form S-1, filed with the SEC on February 27, 2014, SEC File No. 333-194192, and incorporated by reference here).
|
|
|
|
4.1
|
|
Reference is made to Exhibits 3.1 and 3.2.
|
|
|
|
4.2
|
|
Fifth Amended and Restated Investor Rights Agreement, dated December 11, 2013 (Filed with the SEC as Exhibit 10.21 to our Registration Statement on Form S-1, filed with the SEC on February 27, 2014, SEC File No. 333-194192), and incorporated by reference here).
|
|
|
|
4.3
|
|
Warrant issued to Solar Capital Ltd. dated September 30, 2016 (Filed with the SEC as Exhibit 10.2 to our Current Report on Form 8-K, filed with the SEC on October 5, 2016.
|
10.1
|
|
Non-Employee Director Compensation Arrangements.
|
|
|
|
10.2
|
|
Loan and Security Agreement, dated September 30, 2016, between SCYNEXIS, Inc. and Solar Capital Ltd.
(Filed with the SEC as Exhibit 10.1 to our Current Report on Form 8-K, filed with the SEC on October 5, 2016.
|
|
|
|
12.1
|
|
Statement Re Computation of Ratio of Earnings to Fixed Charges.
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Rule 13-a-14(a) or Rule 15(d)-14(a) of the Exchange Act
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 13a-14(b) or 15d-14(b) of the Exchange Act
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Schema Linkbase Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Labels Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document
|
1.
|
Each non-employee director receives an annual base cash retainer of $35,000 for such service, to be paid quarterly. In addition, the chairman of the Board receives an additional annual base cash retainer of
|
2.
|
In addition, each member of a committee receives compensation for service on a committee as follows:
|
a.
|
The chairperson of the audit committee receives an annual cash retainer of $15,000 for this service, paid quarterly, and each of the other members of the audit committee receives an annual cash retainer of $7,500, paid quarterly.
|
b.
|
The chairperson of the compensation committee receives an annual cash retainer of $11,000 for this service, paid quarterly, and each of the other members of the compensation committee receive an annual cash retainer of $5,500, paid quarterly.
|
c.
|
The chairperson of the nominating and corporate governance committee receive an annual cash retainer of $7,500 for this service, paid quarterly, and each of the other members of the nominating and corporate governance committee receive an annual cash retainer of $3,750, paid quarterly.
|
3.
|
Each year on the first business day of the calendar year, each non-employee director will automatically be granted an option to purchase shares, with the number of shares determined based on an option value of $30,000 (based on the Black-Scholes valuation formula and using a thirty-day average for the stock price for the purposes of that calculation). These annual grants will have an exercise price per share equal to the fair market value of a share of common stock on the date of grant and will vest in full on the one-year anniversary of the grant date; provided, that the non-employee director is providing continuous services on the applicable vesting date. If a new board member joins the Board, the director will be granted an initial option to purchase shares, with the number of shares determined based on an option value of $60,000 (based on the Black-Scholes valuation formula and using a thirty-day average for the stock price for purposes of that calculation). Initial option grants to new board members will have an exercise price per
|
|
|
Nine Months Ended September 30,
|
|
Year Ended December 31,
|
||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortization of deferred financing costs and debt discount (1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
755
|
|
|
$
|
3,485
|
|
|
$
|
2,918
|
|
Loss on extinguishment of debt (2)
|
|
—
|
|
|
—
|
|
|
1,389
|
|
|
—
|
|
|
—
|
|
|||||
Interest expense for beneficial conversion feature (3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,802
|
|
|
—
|
|
|||||
Interest expense — related party (4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
892
|
|
|
747
|
|
|||||
Interest expense (5)
|
|
—
|
|
|
—
|
|
|
48
|
|
|
192
|
|
|
225
|
|
|||||
Interest component of rental expense (6)
|
|
10
|
|
|
200
|
|
|
404
|
|
|
463
|
|
|
516
|
|
|||||
Total fixed charges
|
|
$
|
10
|
|
|
$
|
200
|
|
|
$
|
2,596
|
|
|
$
|
15,834
|
|
|
$
|
4,406
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss from continuing operations before taxes
|
|
$
|
(15,312
|
)
|
|
$
|
(28,338
|
)
|
|
$
|
(6,769
|
)
|
|
$
|
(31,906
|
)
|
|
$
|
(17,362
|
)
|
Fixed charges
|
|
10
|
|
|
200
|
|
|
2,596
|
|
|
15,834
|
|
|
4,406
|
|
|||||
Earnings
|
|
$
|
(15,302
|
)
|
|
$
|
(28,138
|
)
|
|
$
|
(4,173
|
)
|
|
$
|
(16,072
|
)
|
|
$
|
(12,956
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Deficiency of earnings available to cover fixed charges
|
|
$
|
(15,312
|
)
|
|
$
|
(28,338
|
)
|
|
$
|
(6,769
|
)
|
|
$
|
(31,906
|
)
|
|
$
|
(17,362
|
)
|
|
|
Nine Months Ended September 30,
|
|
Year Ended December 31,
|
||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortization of deferred financing costs and debt discount (1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
755
|
|
|
$
|
3,485
|
|
|
$
|
2,918
|
|
Loss on extinguishment of debt (2)
|
|
—
|
|
|
—
|
|
|
1,389
|
|
|
—
|
|
|
—
|
|
|||||
Interest expense for beneficial conversion feature (3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,802
|
|
|
—
|
|
|||||
Interest expense — related party (4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
892
|
|
|
747
|
|
|||||
Interest expense (5)
|
|
—
|
|
|
—
|
|
|
48
|
|
|
192
|
|
|
225
|
|
|||||
Interest component of rental expense (6)
|
|
10
|
|
|
200
|
|
|
404
|
|
|
463
|
|
|
516
|
|
|||||
Deemed dividend for beneficial conversion feature on Series D-2 preferred stock (7)
|
|
—
|
|
|
—
|
|
|
909
|
|
|
4,232
|
|
|
—
|
|
|||||
Deemed dividend for antidilution adjustments to convertible preferred stock (8)
|
|
—
|
|
|
—
|
|
|
214
|
|
|
6,402
|
|
|
—
|
|
|||||
Accretion of convertible preferred stock (9)
|
|
—
|
|
|
—
|
|
|
510
|
|
|
5,714
|
|
|
—
|
|
|||||
Total fixed charges
|
|
$
|
10
|
|
|
$
|
200
|
|
|
$
|
4,229
|
|
|
$
|
32,182
|
|
|
$
|
4,406
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss from continuing operations before taxes
|
|
(15,312
|
)
|
|
$
|
(28,338
|
)
|
|
$
|
(6,769
|
)
|
|
$
|
(31,906
|
)
|
|
$
|
(17,362
|
)
|
|
Fixed charges
|
|
10
|
|
|
200
|
|
|
4,229
|
|
|
32,182
|
|
|
4,406
|
|
|||||
Earnings
|
|
$
|
(15,302
|
)
|
|
$
|
(28,138
|
)
|
|
$
|
(2,540
|
)
|
|
$
|
276
|
|
|
$
|
(12,956
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
|||||
Deficiency of earnings available to cover fixed charges
|
|
(15,312
|
)
|
|
$
|
(28,338
|
)
|
|
$
|
(6,769
|
)
|
|
$
|
—
|
|
|
$
|
(17,362
|
)
|
1.
|
In April 2010, we entered into a $15.0 million credit facility agreement with HSBC Bank USA, National Association, or HSBC, which we refer to as the 2010 Credit Agreement. This 2010 Credit Agreement was guaranteed by a related party. We concluded that the guarantee represented a deemed contribution and recognized the value of the guarantee as deferred financing costs. The value of the guarantee was determined based on the difference between the 2010 Credit Agreement’s stated interest rate and the interest rate that would apply if there had been no guarantee from the related party. The value was determined to be $6.3 million at the time the 2010 Credit Agreement was established and was amortized over the life of the 2010 Credit Agreement. On March 8, 2013, the 2010 Credit Agreement and related party guarantee were extended through 2014, under an amendment referred to as the 2013 Credit Agreement. At the time of the extension, we concluded that the value of the new guarantee was $3.9 million. This amount was recorded as deferred financing costs and was being amortized through the year 2014.
|
2.
|
Upon completion of our IPO on May 7, 2014, the entire outstanding balance of the 2013 Credit Agreement, amounting to $15.0 million plus accrued interest, was paid in full using the proceeds from the IPO. We
|
3.
|
From December 2011 through June 2013, we issued convertible promissory notes totaling $12.3 million to related parties. These notes accrued interest at a rate of 8% per year. The purchasers of the convertible notes also received warrants to purchase common stock. The promissory notes, and accrued interest, were converted into preferred stock in December 2013. In connection with the conversion, the original conversion price on the promissory notes was reduced from$4.3125 to $1.40, and as a result, we recorded additional interest expense of $10.8 million in December 2013 as a result of the beneficial conversion for the antidilution adjustment on the Series D-1 convertible preferred stock and the Series D-2 convertible preferred stock. The warrant fair values were accounted for as a debt discount and amortized over the stated term of the convertibles notes. We concluded that the warrants qualified as a derivative liability and the fair value of the warrants should be adjusted at each reporting period. The amortization of the debt discount was recorded in amortization of deferred financing costs and debt discount and the change in the derivative liability was recorded in derivative fair value adjustment.
|
4.
|
Interest on related party convertible debt, as described above in footnote 3.
|
5.
|
Interest on outstanding balances under our 2010 Credit Agreement and 2013 Credit Agreement, as described above in footnote 1.
|
6.
|
The interest component of rental expense relates to our primary facility leases over the periods presented, including our facility lease in Durham, North Carolina during 2012, 2013, 2014, a portion of 2015 (until July 2015, when the Durham facility lease was assumed by Accuratus Laboratory Services, Inc.), and our facility lease in Jersey City, New Jersey during a portion of 2015 (since the lease inception in August 2015) and the nine month period ended September 30, 2016.
|
7.
|
In December, 2013, we sold shares of Series D-2 Convertible Preferred Stock and determined that the sale resulted in a beneficial conversion feature with an intrinsic value of $4,232, which we recorded as a reduction to additional paid-in capital upon the sale of the Series D-2 Preferred. In January, 2014, we sold additional shares of Series D-2 Preferred and determined that the sale of the Series D-2 Preferred resulted in a beneficial conversion feature with an intrinsic value of $909.
|
8.
|
In conjunction with the sale of Series D-2 Convertible Preferred Stock in December 2013, we recorded a deemed dividend as a reduction to additional paid-in capital of $6,402 as a result of the beneficial conversion for the antidilution adjustment on the outstanding shares of Series B Preferred, Series C Preferred, and Series C-2 Preferred. In conjunction with the sale of additional Series D-2 Preferred in January 2014, we recorded another deemed dividend as a reduction to additional paid-in capital of $214 as a result of the beneficial conversion for the antidilution adjustment on the outstanding shares of Series B Preferred, Series C Preferred, and Series C-2 Preferred.
|
9.
|
Relates to the accretion to liquidation value of each convertible preferred stock issuance.
|
1.
|
I have reviewed this Form 10-Q of SCYNEXIS, 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;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
c)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Marco Taglietti, M.D.
|
Marco Taglietti, M.D.
Chief Executive Officer
|
1.
|
I have reviewed this Form 10-Q of SCYNEXIS, 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;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
c)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Eric Francois
|
Eric Francois
Chief Financial Officer
|
1.
|
The Company’s Quarterly Report on Form 10-Q for the period ended
September 30, 2016
, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act, and
|
2.
|
The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
|
|
/s/ Marco Taglietti, M.D.
|
|
|
|
/s/ Eric Francois
|
Marco Taglietti, M.D.
Chief Executive Officer
|
|
|
|
Eric Francois
Chief Financial Officer
|