UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended March 31, 2024 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 No. 001-35996 ORGANOVO HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 27-1488943 (State or other jurisdiction of in ...

SAN DIEGO, May 21, 2024 (GLOBE NEWSWIRE) -- Organovo Holdings, Inc. (NASDAQ:ONVO), a clinical stage biotechnology company focused on developing novel treatment approaches in inflammatory bowel disease (IBD) including ulcerative colitis, today announces data from a poster presented at Digestive Disease Week (DDW2024) demonstrating the potential of the Company's lead clinical-stage compound, FXR314, in combination with tofacitinib for treating inflammatory bowel disease (IBD) using 3D models and preclinical m ...

SAN DIEGO, May 21, 2024 (GLOBE NEWSWIRE) -- Organovo Holdings, Inc. (Nasdaq:ONVO), a clinical stage biotechnology company focused on developing novel treatment approaches in inflammatory bowel disease (IBD) including ulcerative colitis, today announces data from a poster presented at Digestive Disease Week (DDW2024) demonstrating the potential of the Company's lead clinical-stage compound, FXR314, in combination with tofacitinib for treating inflammatory bowel disease (IBD) using 3D models and preclinical m ...

SAN DIEGO, May 14, 2024 (GLOBE NEWSWIRE) -- Organovo Holdings, Inc. (Nasdaq:ONVO), a clinical stage biotechnology company focused on developing novel treatment approaches in inflammatory bowel disease (IBD) including ulcerative colitis, today announces it will be presenting data on the Company's lead clinical-stage drug, FXR314 during DDW2024, which is being held in Washington, D.C. May 18-21, 2024. Contact CORE IR pr@coreir.com Source: Organovo, Inc. The poster, titled, "Combination therapy of the FXR agon ...

SAN DIEGO, May 14, 2024 (GLOBE NEWSWIRE) -- Organovo Holdings, Inc. (Nasdaq:ONVO), a clinical stage biotechnology company focused on developing novel treatment approaches in inflammatory bowel disease (IBD) including ulcerative colitis, today announces it will be presenting data on the Company's lead clinical-stage drug, FXR314 during DDW2024, which is being held in Washington, D.C. May 18-21, 2024. The poster, titled, "Combination therapy of the FXR agonist FXR314 with tofacitinib in models of inflammatory ...

SAN DIEGO, May 08, 2024 (GLOBE NEWSWIRE) -- Organovo Holdings, Inc. (NASDAQ:ONVO) ("Organovo" or the "Company"), a clinical stage biotechnology company focused on developing novel treatment approaches based on demonstration of clinical promise in three-dimensional (3D) human tissues, today announced the pricing of a public offering consisting of 6,562,500 shares of common stock (or pre-funded warrants in lieu thereof) and common warrants to purchase up to an aggregate of 6,562,500 shares of its common stock ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents Organovo Holdings, Inc.'s unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Organovo Holdings, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations and comprehensive loss, statements of stockholders' equity, and statements of cash flows, along with detailed notes explaining the company's business, significant accounting policies, investments, equity, lease commitments, and related party transactions for the periods ended December 31, 2023, and March 31, 2023 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity at specific dates **Condensed Consolidated Balance Sheets (in thousands):** | Item | Dec 31, 2023 (Unaudited) | Mar 31, 2023 | | :--------------------------------- | :----------------------- | :----------- | | **Assets** | | | | Cash and cash equivalents | $5,295 | $15,301 | | Total current assets | $6,241 | $17,048 | | Total assets | $8,881 | $20,313 | | **Labilities and Stockholders' Equity** | | | | Total current liabilities | $1,700 | $3,671 | | Total liabilities | $2,699 | $4,984 | | Total stockholders' equity | $6,182 | $15,329 | | Total Liabilities and Stockholders' Equity | $8,881 | $20,313 | - Cash and cash equivalents decreased significantly from **$15.3 million** at March 31, 2023, to **$5.3 million** at December 31, 2023[11](index=11&type=chunk) - Total current assets decreased from **$17.0 million** to **$6.2 million**, and total stockholders' equity decreased from **$15.3 million** to **$6.2 million**[11](index=11&type=chunk) [Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Loss](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Other%20Comprehensive%20Loss) This section outlines the company's financial performance over specific periods, detailing revenues, expenses, and net loss **Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Loss (in thousands, except per share data):** | Item | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2022 | Nine Months Ended Dec 31, 2023 | Nine Months Ended Dec 31, 2022 | | :---------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Royalty revenue | $5 | $131 | $80 | $208 | | Total Revenues | $5 | $131 | $80 | $208 | | Research and development expenses | $1,434 | $1,185 | $4,435 | $3,436 | | Selling, general and administrative expenses | $2,251 | $2,305 | $7,635 | $6,724 | | Total costs and expenses | $3,685 | $3,490 | $12,070 | $10,160 | | Loss from Operations | $(3,680) | $(3,359) | $(11,990) | $(9,952) | | Net Loss | $(3,604) | $(3,264) | $(11,626) | $(9,800) | | Net loss per common share—basic and diluted | $(0.40) | $(0.37) | $(1.31) | $(1.13) | - Total revenues decreased significantly for both the three-month period (from **$131 thousand** to **$5 thousand**) and the nine-month period (from **$208 thousand** to **$80 thousand**) year-over-year[13](index=13&type=chunk) - Net loss increased for both periods, reaching **$(3.6) million** for the three months and **$(11.6) million** for the nine months ended December 31, 2023[13](index=13&type=chunk) [Unaudited Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section details changes in the company's equity accounts, including common stock, additional paid-in capital, and accumulated deficit **Unaudited Condensed Consolidated Statements of Stockholders' Equity (in thousands):** | Item | Balance at March 31, 2023 | Balance at December 31, 2023 | | :--------------------------------- | :------------------------ | :------------------------- | | Common Stock (shares) | 8,717 | 9,839 | | Common Stock (amount) | $9 | $10 | | Additional paid-in capital | $340,317 | $342,796 | | Accumulated Deficit | $(324,998) | $(336,624) | | Total Stockholders' Equity | $15,329 | $6,182 | - Total stockholders' equity decreased from **$15.3 million** at March 31, 2023, to **$6.2 million** at December 31, 2023, primarily due to net losses[17](index=17&type=chunk) - The company issued **935,000 shares** of common stock from a public offering, contributing **$1.172 million** to additional paid-in capital during the nine months ended December 31, 2023[17](index=17&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the cash inflows and outflows from operating, investing, and financing activities over specific periods **Unaudited Condensed Consolidated Statements of Cash Flows (in thousands):** | Cash Flow Activity | Nine Months Ended Dec 31, 2023 | Nine Months Ended Dec 31, 2022 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(11,982) | $(7,675) | | Net cash provided by (used in) investing activities | $803 | $(804) | | Net cash provided by financing activities | $1,173 | $0 | | Net decrease in cash, cash equivalents, and restricted cash | $(10,006) | $(8,479) | | Cash, cash equivalents, and restricted cash at end of period | $5,438 | $20,339 | - Net cash used in operating activities increased to **$(11.98) million** for the nine months ended December 31, 2023, from **$(7.67) million** in the prior year[20](index=20&type=chunk) - Investing activities shifted from using cash (**$0.8 million**) in 2022 to providing cash (**$0.8 million**) in 2023, primarily due to maturities of investments and liquidation of equity securities[20](index=20&type=chunk) - Financing activities provided **$1.17 million** in cash in 2023 from common stock issuance, compared to none in 2022[20](index=20&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the unaudited condensed consolidated financial statements [Note 1. Description of Business](index=9&type=section&id=Note%201.%20Description%20of%20Business) This note describes Organovo Holdings, Inc.'s core business, focusing on clinical drug development and 3D human tissue models - Organovo Holdings, Inc. is a clinical-stage biotechnology company focused on the clinical drug development of the farnesoid X receptor (FXR) agonist FXR314 for gastrointestinal and liver diseases, particularly Inflammatory Bowel Disease (IBD) including Ulcerative Colitis (UC) and Crohn's disease (CD)[23](index=23&type=chunk)[24](index=24&type=chunk) - The company plans to initiate a **Phase 2a clinical trial** for FXR314 in UC in calendar year 2024[24](index=24&type=chunk) - A secondary focus is building high-fidelity, 3D human tissues to create complex multicellular disease models for drug discovery, initially concentrating on intestinal models for UC and CD to identify novel therapeutic targets[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=10&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing the financial statements, including going concern considerations - The financial statements are prepared in accordance with U.S. GAAP for interim financial information and include Organovo and its wholly-owned subsidiaries[31](index=31&type=chunk)[32](index=32&type=chunk) - The company's cash and cash equivalents of **$5.3 million** and an accumulated deficit of **$336.6 million** as of December 31, 2023, along with negative operating cash flows of **$12.0 million**, raise substantial doubt about its ability to continue as a going concern for at least one year[33](index=33&type=chunk)[35](index=35&type=chunk) - The company finances operations primarily through common stock sales (public and ATM offerings), private placements, intellectual property licensing, grants, and collaborative research agreements, and will require substantial additional funding[34](index=34&type=chunk)[35](index=35&type=chunk) - Investments include available-for-sale debt securities (U.S. Treasury bills) and equity securities, recorded at fair value, with unrealized gains/losses on debt securities in OCI and on equity securities in net income[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk) - Revenue is primarily from licensing intellectual property, specifically sales-based royalties, which are recognized based on estimates and adjusted once actual sales are determined[43](index=43&type=chunk)[44](index=44&type=chunk) [Note 3. Investments and Fair Value Measurement](index=12&type=section&id=Note%203.%20Investments%20and%20Fair%20Value%20Measurement) This note details the company's investment portfolio and the methods used to measure their fair value **Investments in Debt Securities (in thousands):** | Item | Amortized costs basis | Fair value | | :------------------------ | :-------------------- | :--------- | | As of March 31, 2023 | $4,943 | $4,945 | | As of December 31, 2023 | $1,995 | $1,995 | - As of December 31, 2023, the company held **$2.0 million** in debt securities (U.S. Treasury bills), down from **$4.9 million** at March 31, 2023, with fair value measured using Level 1 inputs[47](index=47&type=chunk)[48](index=48&type=chunk) **Investments in Equity Securities Activity (in thousands):** | Item | Amount | | :------------------------------ | :----- | | Balance at March 31, 2023 | $706 | | Liquidation of equity securities | $(718) | | Gain on investment in equity securities | $12 | | Balance at December 31, 2023 | $0 | - Equity securities were fully liquidated by June 26, 2023, resulting in a **zero fair value** at December 31, 2023, and a **$0.7 million liquidation** with a less than **$0.1 million gain** for the nine months ended December 31, 2023[49](index=49&type=chunk)[50](index=50&type=chunk) [Note 4. Accrued Expenses](index=12&type=section&id=Note%204.%20Accrued%20Expenses) This note provides a breakdown of the company's accrued expenses, highlighting significant changes **Accrued Expenses (in thousands):** | Item | Dec 31, 2023 | Mar 31, 2023 | | :--------------------------------- | :----------- | :----------- | | Accrued compensation | $439 | $609 | | Accrued legal and professional fees | $97 | $193 | | Acquired in-process research and development | $0 | $2,000 | | Other accrued expenses | $191 | $46 | | Total Accrued Expenses | $727 | $2,848 | - Total accrued expenses decreased significantly from **$2.8 million** at March 31, 2023, to **$0.7 million** at December 31, 2023, primarily due to the payment of **$2.0 million** for acquired in-process research and development[51](index=51&type=chunk) [Note 5. Stockholders' Equity](index=12&type=section&id=Note%205.%20Stockholders'%20Equity) This note details the components and changes in stockholders' equity, including common stock, preferred stock, and equity incentive plans - The company is authorized to issue **25 million shares** of preferred stock, with none currently outstanding[52](index=52&type=chunk) - As of December 31, 2023, **9,838,755 shares** of common stock were issued and outstanding, an increase from **8,716,906 shares** at March 31, 2023[11](index=11&type=chunk) - The 2022 Equity Incentive Plan replaced the 2012 Plan, reserving **1,236,738 shares** for issuance as of October 12, 2022, with **1,643,798 shares** remaining available at December 31, 2023[54](index=54&type=chunk)[63](index=63&type=chunk) - The company issued **934,621 shares** of common stock through ATM offerings during the nine months ended December 31, 2023, generating approximately **$22.9 million** in gross proceeds from ATM offerings to date[56](index=56&type=chunk) - Total unrecognized compensation cost for unvested stock options was approximately **$0.6 million** (**2.30 years** weighted average vesting) and for unvested RSUs was **$0.2 million** (**0.97 years** weighted average vesting) as of December 31, 2023[65](index=65&type=chunk)[66](index=66&type=chunk) [Note 6. Collaborative Research, Development, and License Agreements](index=18&type=section&id=Note%206.%20Collaborative%20Research,%20Development,%20and%20License%20Agreements) This note describes the company's agreements with third parties for research, development, and intellectual property licensing - The company has a non-exclusive license agreement with BICO Group AB for bioprinter and bioink patents, generating sales-based royalties[70](index=70&type=chunk)[71](index=71&type=chunk) - Royalty revenue for the three and nine months ended December 31, 2023, was **$5,000** and **$80,000**, respectively, reflecting a decrease due to lower sales of royalty-bearing products by the licensee[71](index=71&type=chunk) - The license agreement with the University of Missouri for self-assembling cell aggregates was amended in December 2022, making it fully paid up for a **$50,000 upfront payment**, eliminating future royalty obligations[73](index=73&type=chunk)[75](index=75&type=chunk) - The license agreement with Clemson University for ink-jet printing of viable cells requires royalties of **1.5% to 3%** of net sales and **40%** of sublicense payments, but no royalty expense was recorded for the nine months ended December 31, 2023, as legal expenses exceeded royalties owed[76](index=76&type=chunk)[77](index=77&type=chunk) [Note 7. Commitments and Contingencies](index=19&type=section&id=Note%207.%20Commitments%20and%20Contingencies) This note addresses potential future obligations and uncertain events that could impact the company's financial position - The company may be subject to various claims and legal actions in the ordinary course of business, but has not recorded any accrual for loss contingencies as an unfavorable outcome is not probable or reasonably estimable[78](index=78&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk) [Note 8. Leases](index=19&type=section&id=Note%208.%20Leases) This note outlines the company's operating lease arrangements for its facilities - The company has an operating lease for lab and office space in San Diego, commenced December 17, 2021, for approximately **62 months**, with monthly payments of **$40,800** and **3% annual escalators**[82](index=82&type=chunk) **Operating Lease Liabilities and Right-of-Use Assets (in thousands):** | Item | Dec 31, 2023 | | :--------------------------------- | :----------- | | Operating lease right-of-use assets | $1,403 | | Current operating lease liability | $502 | | Noncurrent operating lease liability | $999 | | Total lease liabilities | $1,501 | | Weighted average remaining lease term | 3.08 years | | Weighted average discount rate | 6% | - Operating lease expense was approximately **$125,000** for the three months and **$377,000** for the nine months ended December 31, 2023[85](index=85&type=chunk) [Note 9. Concentrations](index=20&type=section&id=Note%209.%20Concentrations) This note identifies significant concentrations of credit risk and revenue sources - The company's credit risk is concentrated in temporary cash investments held at various financial institutions, with balances potentially exceeding federally insured limits[87](index=87&type=chunk) - All royalty revenue is derived from a single licensee, but the company has not historically experienced accounts receivable write-downs[87](index=87&type=chunk) [Note 10. Related Parties](index=21&type=section&id=Note%2010.%20Related%20Parties) This note discloses transactions and relationships with entities considered related parties to the company - The company has an intercompany agreement with Viscient Biosciences, an entity where Organovo's Executive Chairman serves as CEO and President, for mutual services related to 3D bioprinting technology and shared facilities/equipment[90](index=90&type=chunk)[91](index=91&type=chunk) - For the nine months ended December 31, 2023, Organovo provided **$13,000** in histology services to Viscient, with no consulting expenses incurred from Viscient[91](index=91&type=chunk) [Note 11. Restructuring](index=21&type=section&id=Note%2011.%20Restructuring) This note details the company's recent workforce reduction and its financial implications - On August 18, 2023, Organovo announced a workforce reduction of approximately **24%** (**six employees**) to refocus on FXR314 clinical development, reduce operating expenses, and extend cash runway[92](index=92&type=chunk) - The company estimates approximately **$0.4 million** in cash expenditures for severance pay related to the reduction in force, with **$0.38 million** recorded as restructuring charges for the nine months ended December 31, 2023[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk) - Annual cost savings of **$1.5 million** are anticipated from this restructuring[92](index=92&type=chunk) [Note 12. Subsequent Events](index=21&type=section&id=Note%2012.%20Subsequent%20Events) This note reports significant events that occurred after the balance sheet date but before the financial statements were issued - Between January 1, 2024, and the filing date, the company issued **201,319 shares** of common stock through ATM offerings, generating approximately **$0.2 million** in net proceeds[95](index=95&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Organovo Holdings, Inc.'s financial condition and results of operations, highlighting the company's strategic shift to clinical drug development of FXR314 and 3D tissue models, its liquidity challenges, and the financial performance for the three and nine months ended December 31, 2023, compared to the prior year [Basis of Presentation](index=22&type=section&id=Basis%20of%20Presentation) This section explains the accounting principles and standards used in preparing the unaudited condensed consolidated financial statements - The unaudited condensed consolidated financial statements are prepared in accordance with SEC instructions for Form 10-Q and U.S. GAAP, and include all normal recurring adjustments[98](index=98&type=chunk) - Interim operating results are not necessarily indicative of full-year results[98](index=98&type=chunk) [Overview](index=22&type=section&id=Overview) This section provides a high-level summary of Organovo's strategic focus on clinical drug development and 3D human tissue technology - Organovo is a clinical-stage biotechnology company focused on developing the FXR agonist FXR314 for IBD (Ulcerative Colitis and Crohn's disease), with a **Phase 2a clinical trial** in UC planned for 2024[99](index=99&type=chunk)[100](index=100&type=chunk) - The company also develops high-fidelity 3D human tissues to create disease models for drug discovery, initially for UC and CD, aiming to identify novel therapeutic targets and develop drug candidates[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk) - Future plans include expanding into additional therapeutic areas and leveraging scientific expertise for drug development[106](index=106&type=chunk) [Critical Accounting Policies, Estimates, and Judgments](index=23&type=section&id=Critical%20Accounting%20Policies,%20Estimates,%20and%20Judgments) This section discusses the significant accounting policies and estimates that require management's judgment - Financial statements require management estimates and assumptions, which are continually reviewed, but none are considered critical[107](index=107&type=chunk) - No significant changes to critical accounting policies have occurred since March 31, 2023[108](index=108&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, comparing revenues and expenses over different periods [Comparison of the three months ended December 31, 2023 and 2022](index=23&type=section&id=Comparison%20of%20the%20three%20months%20ended%20December%2031,%202023%20and%202022) This section compares the company's financial performance for the three-month periods ended December 31, 2023, and 2022 **Results of Operations (Three Months Ended December 31, in thousands, except %):** | Item | 2023 | 2022 | Increase (decrease) $ | Increase (decrease) % | | :--------------------------------- | :--- | :--- | :-------------------- | :-------------------- | | Revenues | $5 | $131 | $(126) | (96%) | | Research and development | $1,434 | $1,185 | $249 | 21% | | Selling, general and administrative | $2,251 | $2,305 | $(54) | (2%) | | Other income | $76 | $95 | $(19) | (20%) | - Total revenue decreased by **96%** to **$5,000**, primarily due to reduced sales of royalty-bearing products by the licensee[109](index=109&type=chunk)[110](index=110&type=chunk) - Research and development expenses increased by **21%** to **$1.4 million**, driven by the strategic shift to advance FXR314 clinical development, including increases in consulting and lab expenses[109](index=109&type=chunk)[111](index=111&type=chunk) - Selling, general and administrative expenses decreased by **2%** to **$2.3 million**, mainly due to a decrease in personnel-related costs (including stock-based compensation) from a reduction in force, offset by increases in legal and investor relations expenses[109](index=109&type=chunk)[112](index=112&type=chunk) [Comparison of the nine months ended December 31, 2023 and 2022](index=25&type=section&id=Comparison%20of%20the%20nine%20months%20ended%20December%2031,%202023%20and%202022) This section compares the company's financial performance for the nine-month periods ended December 31, 2023, and 2022 **Results of Operations (Nine Months Ended December 31, in thousands, except %):** | Item | 2023 | 2022 | Increase (decrease) $ | Increase (decrease) % | | :--------------------------------- | :--- | :--- | :-------------------- | :-------------------- | | Revenues | $80 | $208 | $(128) | (62%) | | Research and development | $4,435 | $3,436 | $999 | 29% | | Selling, general and administrative | $7,635 | $6,724 | $911 | 14% | | Other income | $366 | $154 | $212 | 138% | - Total revenue decreased by **62%** to **$80,000**, attributed to lower sales of royalty-bearing products by the licensee[114](index=114&type=chunk)[115](index=115&type=chunk) - Research and development expenses increased by **29%** to **$4.4 million**, due to increased personnel, lab, consulting, depreciation, and facility costs associated with advancing FXR314 clinical development[114](index=114&type=chunk)[116](index=116&type=chunk) - Selling, general and administrative expenses increased by **14%** to **$7.6 million**, primarily due to higher legal and investor relations expenses, despite a decrease in personnel-related costs from a reduction in force[114](index=114&type=chunk)[118](index=118&type=chunk) - Other income increased by **138%** to **$0.4 million**, mainly from interest income[114](index=114&type=chunk)[119](index=119&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=26&type=section&id=Financial%20Condition,%20Liquidity%20and%20Capital%20Resources) This section assesses the company's financial health, cash position, and ability to meet its short-term and long-term obligations - The company's primary focus is clinical drug development of FXR314, with a **Phase 2a clinical trial** in UC planned for 2024, and leveraging 3D tissue technology for therapeutic drug development[120](index=120&type=chunk) - As of December 31, 2023, cash and cash equivalents were **$5.3 million**, restricted cash **$0.1 million**, and an accumulated deficit of **$336.6 million**, with negative cash flow from operations of **$12.0 million** for the nine months ended December 31, 2023[121](index=121&type=chunk) - Working capital decreased from **$13.3 million** at March 31, 2023, to **$4.5 million** at December 31, 2023[122](index=122&type=chunk) **Sources and Uses of Cash (Nine Months Ended December 31, in thousands):** | Cash Flow Activity | 2023 | 2022 | | :--------------------------------- | :----- | :----- | | Operating activities | $(11,982) | $(7,675) | | Investing activities | $803 | $(804) | | Financing activities | $1,173 | $0 | | Net decrease in cash, cash equivalents, and restricted cash | $(10,006) | $(8,479) | - The company expects total operating expenses for fiscal year ending March 31, 2024, to be between **$13.0 million** and **$15.0 million**[128](index=128&type=chunk) - Substantial additional funding is required, raising substantial doubt about the company's ability to continue as a going concern for at least one year[128](index=128&type=chunk) - The company has an effective shelf registration statement (2021 Shelf) for **$150.0 million** and an ATM program with **$27.1 million** available, and filed a new 2024 Shelf for **$150.0 million**[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) - As of December 31, 2023, **9,838,755 shares** of common stock were outstanding, with **2,509,149 shares** reserved for future issuance under various equity plans[135](index=135&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Organovo Holdings, Inc. is not required to provide quantitative and qualitative disclosures about market risk under Item 305(e) of Regulation S-K - The company is a smaller reporting company and is not required to provide disclosures about market risk[138](index=138&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details Organovo Holdings, Inc.'s disclosure controls and procedures, confirming their effectiveness as of December 31, 2023, and noting no material changes in internal control over financial reporting during the quarter. It also acknowledges the inherent limitations of control systems [Disclosure Controls and Procedures](index=29&type=section&id=Disclosure%20Controls%20and%20Procedures) This section describes the company's controls designed to ensure timely and accurate disclosure of financial information - Management, including the principal executive and financial officers, evaluated the effectiveness of disclosure controls and procedures as of December 31, 2023, and concluded they were designed and operating effectively[139](index=139&type=chunk)[140](index=140&type=chunk) [Changes in Internal Control over Financial Reporting](index=29&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports on any material changes in the company's internal control over financial reporting during the quarter - There were no changes in internal control over financial reporting during the fiscal quarter ended December 31, 2023, that materially affected or are reasonably likely to materially affect internal control over financial reporting[141](index=141&type=chunk) [Inherent Limitations on Effectiveness of Controls](index=29&type=section&id=Inherent%20Limitations%20on%20Effectiveness%20of%20Controls) This section acknowledges that internal control systems have inherent limitations and cannot provide absolute assurance - Management acknowledges that control systems provide only reasonable, not absolute, assurance and are subject to inherent limitations such as resource constraints, faulty judgments, simple errors, circumvention by individual acts or collusion, and management override[142](index=142&type=chunk) [PART II. OTHER INFORMATION](index=30&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers additional information not included in the financial statements, such as legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 7 of the financial statements for a discussion of Organovo Holdings, Inc.'s legal proceedings and contingencies, indicating no material accruals for loss contingencies - Legal proceedings and contingencies are discussed in Note 7 of the financial statements[145](index=145&type=chunk) [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) This section outlines the substantial risks associated with investing in Organovo Holdings, Inc., including significant operating losses, unproven business strategies, intense competition, funding requirements, lengthy clinical development processes, reliance on third parties, market volatility, and intellectual property challenges. It emphasizes that the company's ability to continue as a going concern is in substantial doubt [Risk Factor Summary](index=30&type=section&id=Risk%20Factor%20Summary) This section provides a concise overview of the primary risks facing the company, including financial and operational challenges - Key risks include substantial operating losses, unproven 3D tissue technology for drug discovery, need for constant human cell supply, substantial additional funding requirements leading to dilution or operational restrictions, lengthy and uncertain clinical drug development, dependence on strategic relationships, potential impact of legislation on drug commercialization, and substantial doubt about the company's ability to continue as a going concern[149](index=149&type=chunk) [Risks Related to our Business](index=31&type=section&id=Risks%20Related%20to%20our%20Business) This section details risks inherent to the company's operations, including unproven strategies, competition, and reliance on key resources - The company's business strategy, focusing on FXR314 clinical development and 3D bioprinting for drug discovery, is new and unproven, with no identified drug candidates from the new model to date, posing uncertainty for profitability[150](index=150&type=chunk)[152](index=152&type=chunk) - Substantial additional operating losses are expected as research and development activities increase, with profitability dependent on successful drug candidate identification, clinical trials, regulatory approval, and financing[151](index=151&type=chunk) - The biotechnology industry is highly competitive, with many competitors possessing greater resources and expertise, requiring substantial investments to compete effectively[153](index=153&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk) - Access to a constant, reliable supply of human cells is critical for 3D tissue development, and failure to secure this at cost-effective prices would harm the business[157](index=157&type=chunk) - The company's future success depends on attracting and retaining key executive officers and scientific personnel, with intense competition for qualified individuals[158](index=158&type=chunk) [Risks Related to Government Regulation](index=36&type=section&id=Risks%20Related%20to%20Government%20Regulation) This section addresses risks stemming from regulatory compliance, environmental concerns, and healthcare legislation impacting product commercialization - The company's use of hazardous chemicals and biological materials in R&D poses risks of accidental contamination, leading to potential lawsuits and costs exceeding insurance coverage[179](index=179&type=chunk) - Commercial viability of potential products depends on adequate reimbursement from third-party payors, which is uncertain and subject to cost-containment trends and legislative changes like the Inflation Reduction Act of 2022 and PPACA[180](index=180&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk) - Restructuring efforts in August 2023 to reduce workforce and focus on FXR314 may not yield anticipated benefits or savings, potentially leading to additional expenses or future workforce reductions[194](index=194&type=chunk) [Risks Related to Our Capital Requirements, Finances and Operations](index=38&type=section&id=Risks%20Related%20to%20Our%20Capital%20Requirements,%20Finances%20and%20Operations) This section covers financial and operational risks, including going concern issues, funding needs, operating losses, and management retention - Management has concluded that substantial doubt exists about the company's ability to continue as a going concern due to insufficient funds, which could adversely affect share price and ability to raise capital[195](index=195&type=chunk)[196](index=196&type=chunk) - Additional funding may not be available on acceptable terms, leading to potential delays or cessation of business opportunities and dilution for existing stockholders if equity is issued[197](index=197&type=chunk) - The company has a history of operating losses (**$12.0 million** for nine months ended Dec 31, 2023) and expects significant additional losses, with profitability uncertain[198](index=198&type=chunk)[199](index=199&type=chunk) - Quarterly operating results may vary due to factors like R&D expenditures, strategic evaluations, and litigation, potentially affecting stock price[200](index=200&type=chunk)[202](index=202&type=chunk) - Future strategic investments carry risks of unforeseen losses, deficiencies in internal controls, and failure to achieve desired returns, potentially impacting financial condition and stock price[205](index=205&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk) - The company's success depends on retaining key executive officers and personnel, and conflicts of interest may arise due to shared executives with Viscient Biosciences, Inc[208](index=208&type=chunk) [Risks Related to Our Common Stock and Liquidity Risks](index=43&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock%20and%20Liquidity%20Risks) This section discusses risks associated with the company's common stock, including listing compliance, price volatility, dilution, and anti-takeover provisions - Failure to maintain Nasdaq Capital Market listing (e.g., minimum bid price) could harm stock liquidity and ability to raise capital[222](index=222&type=chunk)[223](index=223&type=chunk) - The stock price is highly volatile and can fluctuate due to various factors, potentially leading to investor losses and costly securities litigation[224](index=224&type=chunk)[226](index=226&type=chunk) - Future issuance of additional equity securities to raise funds will likely dilute existing stockholders' ownership interests and could depress the stock price[227](index=227&type=chunk)[228](index=228&type=chunk) - The company does not intend to pay dividends in the foreseeable future, retaining earnings for expansion, which may affect stock market value[229](index=229&type=chunk) - Anti-takeover provisions in organizational documents and Delaware law may discourage or prevent a change of control, even if beneficial to stockholders[230](index=230&type=chunk)[232](index=232&type=chunk) [Risks Related to Our Intellectual Property](index=45&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) This section outlines risks concerning the protection, enforcement, and potential infringement of the company's intellectual property rights - The company's success depends on adequately protecting its proprietary rights through patents, which may be challenged or insufficient to prevent competitors[233](index=233&type=chunk)[234](index=234&type=chunk)[235](index=235&type=chunk) - Protecting intellectual property globally is expensive and challenging, with varying patent laws and enforcement strengths in foreign jurisdictions, potentially limiting protection[236](index=236&type=chunk)[237](index=237&type=chunk)[239](index=239&type=chunk)[240](index=240&type=chunk) - Patents may be found invalid or unenforceable if challenged in court or administrative bodies, leading to loss of rights, reduced scope, or invalidation, as seen in past IPR proceedings with Cellink AB[241](index=241&type=chunk)[242](index=242&type=chunk)[244](index=244&type=chunk) - Patent infringement lawsuits are expensive, time-consuming, and may not be successful, potentially distracting management and compromising confidential information[245](index=245&type=chunk)[246](index=246&type=chunk)[247](index=247&type=chunk) - Changes in U.S. patent law (e.g., Leahy-Smith Act, Supreme Court rulings) and international patent systems (e.g., European unitary patent system) create uncertainty and could diminish patent value, weakening the ability to protect products[251](index=251&type=chunk)[252](index=252&type=chunk)[253](index=253&type=chunk) - Dependence on license agreements (e.g., with University of Missouri, Clemson University, Salk Institute) means non-compliance or termination could materially harm the business and product development[254](index=254&type=chunk) - Failure to prevent disclosure of trade secrets and proprietary information through confidentiality agreements could adversely affect competitive position[255](index=255&type=chunk) - The company may face claims of wrongful use or disclosure of third-party confidential information by employees or consultants, leading to costly litigation[256](index=256&type=chunk) [General Risk Factors](index=50&type=section&id=General%20Risk%20Factors) This section covers broader risks, including compliance costs for federal securities laws and the Sarbanes-Oxley Act - Compliance with federal securities laws and Sarbanes-Oxley Act reporting requirements is expensive[257](index=257&type=chunk) - Failure to comply with Section 404 of the Sarbanes-Oxley Act or discovery of material weaknesses in internal controls could lead to sanctions, adverse financial results, and a decline in stock price[258](index=258&type=chunk)[259](index=259&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Organovo Holdings, Inc. issued 65,789 unregistered shares of common stock to a marketing firm on December 6, 2023, as consideration for services, relying on Section 4(a)(2) of the Securities Act exemption - On December 6, 2023, the company issued **65,789 unregistered shares** of common stock to a marketing firm for services, relying on Section 4(a)(2) of the Securities Act exemption[260](index=260&type=chunk) [Item 3. Defaults Upon Senior Securities](index=51&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Organovo Holdings, Inc. reported no defaults upon senior securities during the period - No defaults upon senior securities were reported[261](index=261&type=chunk) [Item 4. Mine Safety Disclosure](index=51&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This item is not applicable to Organovo Holdings, Inc - Mine Safety Disclosure is not applicable to the company[262](index=262&type=chunk) [Item 5. Other Information](index=51&type=section&id=Item%205.%20Other%20Information) During the fiscal quarter ended December 31, 2023, no directors or officers adopted or terminated any Rule 10b5-1 trading arrangements - No directors or officers adopted or terminated any Rule 10b5-1 trading arrangements during the fiscal quarter ended December 31, 2023[263](index=263&type=chunk) [Item 6. Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including organizational documents, equity incentive plans, and certifications, with some filed herewith and others incorporated by reference - The report includes various exhibits such as Certificate of Incorporation, Bylaws, 2023 Employee Stock Purchase Plan, and certifications from the Principal Executive Officer and Principal Financial Officer[265](index=265&type=chunk) [SIGNATURES](index=53&type=section&id=SIGNATURES) The report is duly signed on behalf of Organovo Holdings, Inc. by Keith Murphy, Executive Chairman (Principal Executive Officer), and Thomas Hess, Chief Financial Officer (Principal Financial Officer), on February 8, 2024 - The report was signed by Keith Murphy, Executive Chairman (Principal Executive Officer), and Thomas Hess, Chief Financial Officer (Principal Financial Officer), on February 8, 2024[270](index=270&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 For the transition period from to Commission File Number 001-35996 Organovo Holdings, Inc. (Exact name of registrant as specified in its charter) OR (State or other jurisdiction of incorporation or organization) Delaware 27-1488943 (I.R.S. Employer Identification No.) ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Organovo's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, equity, cash flows, and detailed notes for the three months ended June 30, 2023 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202023%20(Unaudited)%20and%20March%2031%2C%202023) This table summarizes Organovo's financial position, showing assets, liabilities, and equity changes between March 31, 2023, and June 30, 2023 | Metric | March 31, 2023 (in thousands) | June 30, 2023 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $15,301 | $10,754 | $(4,547) | | Investment in equity securities | $706 | $— | $(706) | | Total current assets | $17,048 | $11,695 | $(5,353) | | Total assets | $20,313 | $14,756 | $(5,557) | | Total current liabilities | $3,671 | $1,770 | $(1,901) | | Total liabilities | $4,984 | $2,980 | $(2,004) | | Total stockholders' equity | $15,329 | $11,776 | $(3,553) | [Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Loss](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Other%20Comprehensive%20Loss%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202023%20and%202022) This table details Organovo's financial performance, including revenue, expenses, and net loss for the three months ended June 30, 2023, compared to the prior year | Metric | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Change (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Royalty revenue | $75 | $— | $75 | 100% | | Research and development expenses | $1,666 | $1,020 | $646 | 63% | | Selling, general and administrative expenses | $2,604 | $2,219 | $385 | 17% | | Loss from Operations | $(4,195) | $(3,239) | $(956) | 29.5% | | Total Other Income | $169 | $26 | $143 | 550% | | Net Loss | $(4,028) | $(3,215) | $(813) | 25.3% | | Net loss per common share—basic and diluted | $(0.46) | $(0.37) | $(0.09) | 24.3% | [Unaudited Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202023%20and%202022) This table outlines changes in Organovo's stockholders' equity, including additional paid-in capital and accumulated deficit, for the three months ended June 30, 2023 | Metric | March 31, 2023 (in thousands) | June 30, 2023 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Additional Paid-in Capital | $340,317 | $340,792 | $475 | | Accumulated Deficit | $(324,998) | $(329,026) | $(4,028) | | Total Stockholders' Equity | $15,329 | $11,776 | $(3,553) | - Stock-based compensation expense for the three months ended June 30, 2023, was **$475 thousand**[15](index=15&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202023%20and%202022) This table presents Organovo's cash flow activities from operations, investing, and financing for the three months ended June 30, 2023, and 2022 | Metric | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | $(5,311) | $(2,414) | $(2,897) | | Net cash provided by (used in) investing activities | $764 | $(10,693) | $11,457 | | Net cash provided by financing activities | $— | $— | $— | | Net decrease in cash, cash equivalents, and restricted cash | $(4,547) | $(13,107) | $8,560 | | Cash, cash equivalents, and restricted cash at end of period | $10,897 | $15,711 | $(4,814) | - The increase in operating cash usage is primarily due to increased research and development activities, including a **$2.0 million cash outflow** for acquired in-process R&D of Metacrine's FXR drug compound[107](index=107&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements [Note 1. Description of Business](index=7&type=section&id=Note%201.%20Description%20of%20Business) This note describes Organovo's biotechnology focus on 3D tissues for drug discovery, particularly in IBD, and its acquisition of Metacrine's FXR program - Organovo is a biotechnology company building high-fidelity 3D tissues to recapitulate human disease for drug discovery, initially focusing on inflammatory bowel disease (IBD) like ulcerative colitis (UC) and Crohn's disease (CD)[21](index=21&type=chunk)[24](index=24&type=chunk)[90](index=90&type=chunk) - The company utilizes its proprietary NovoGen Bioprinters® and complementary 3D technologies to develop disease models and identify novel drug targets and therapeutics[23](index=23&type=chunk)[92](index=92&type=chunk) - In March 2023, Organovo acquired Metacrine, Inc.'s farnesoid X receptor (FXR) program, which includes two clinically tested compounds and over 2,000 discovery/preclinical compounds for GI and liver diseases[25](index=25&type=chunk)[94](index=94&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=7&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines Organovo's key accounting policies, including its going concern assessment and treatment of investments - The company's financial statements are prepared on a going concern basis, but management has concluded that substantial doubt exists about its ability to continue as a going concern for at least one year due to approximately **$10.8 million in cash and cash equivalents**, **$329.0 million accumulated deficit**, and **$5.3 million negative cash flow from operations** for the three months ended June 30, 2023[31](index=31&type=chunk)[33](index=33&type=chunk)[105](index=105&type=chunk) - The company will need substantial additional funding to support future operating activities and drug discovery/development, and cannot guarantee that additional financing will be available on favorable terms or at all[33](index=33&type=chunk)[111](index=111&type=chunk)[116](index=116&type=chunk) - Investments in debt securities (U.S. Treasury bills) are classified as available-for-sale and recorded at fair value, while investments in equity securities are remeasured at fair value with gains/losses recorded in net income[36](index=36&type=chunk)[37](index=37&type=chunk) [Note 3. Investments and fair value measurement](index=9&type=section&id=Note%203.%20Investments%20and%20fair%20value%20measurement) This note details Organovo's investments in debt and equity securities, including fair value measurements and related income | Investment Type | March 31, 2023 (in thousands) | June 30, 2023 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Investment in debt securities (Fair Value) | $4,945 | $4,993 | $48 | | Investment in equity securities (Fair Value) | $706 | $— | $(706) | - For the three months ended June 30, 2023, the company recorded **$0.1 million in interest income** from debt securities and a **$0.012 million gain** on equity securities[44](index=44&type=chunk)[46](index=46&type=chunk) [Note 4. Stockholders' Equity](index=10&type=section&id=Note%204.%20Stockholders'%20Equity) This note provides details on Organovo's common stock, shares reserved for issuance, and stock-based compensation expenses | Metric | March 31, 2023 | June 30, 2023 | | :--- | :--- | :--- | | Common stock shares issued and outstanding | 8,716,906 | 8,718,203 | | Total shares reserved for future issuance (all plans) | N/A | 2,708,506 | - Stock-based compensation expense for the three months ended June 30, 2023, was **$475 thousand**, with **$107 thousand for R&D** and **$368 thousand for G&A**[61](index=61&type=chunk) - The total unrecognized compensation cost related to unvested stock options was approximately **$2.3 million**, with a weighted average vesting period of **2.03 years**[61](index=61&type=chunk) [Note 5. Collaborative Research, Development, and License Agreements](index=13&type=section&id=Note%205.%20Collaborative%20Research%2C%20Development%2C%20and%20License%20Agreements) This note explains Organovo's royalty revenue from a license agreement and details related to other intellectual property arrangements | Revenue Source | Three Months Ended June 30, 2023 | | :--- | :--- | | Royalty revenue from License Agreement | $75,000 | - The royalty revenue is from a non-exclusive license granted to BICO Group AB for the use of Organovo's patents related to manufacturing and selling bioprinters and bioinks, as part of a settlement agreement[65](index=65&type=chunk)[66](index=66&type=chunk) - No royalty expense was recorded to the University of Missouri or Clemson University for the quarter, primarily due to legal expense offsets exceeding royalties owed or a prior lump-sum payment[70](index=70&type=chunk)[71](index=71&type=chunk)[73](index=73&type=chunk) [Note 6. Commitments and Contingencies](index=14&type=section&id=Note%206.%20Commitments%20and%20Contingencies) This note discusses Organovo's legal claims and potential loss contingencies, emphasizing the inherent unpredictability of litigation - The company has not recorded any accrual for loss contingencies related to legal claims, as no unfavorable outcome is probable or reasonably possible, nor is the amount estimable[76](index=76&type=chunk) - Litigation is inherently unpredictable, and an unfavorable resolution could materially adversely affect the company's financial statements[75](index=75&type=chunk)[76](index=76&type=chunk) [Note 7. Leases](index=15&type=section&id=Note%207.%20Leases) This note details Organovo's operating lease assets, liabilities, and future payment obligations | Metric | June 30, 2023 (in thousands) | | :--- | :--- | | Operating lease right-of-use assets | $1,606 | | Total lease liabilities | $1,705 | | Weighted average remaining lease term | 3.58 years | | Weighted average discount rate | 6% | - Operating lease expense for the three months ended June 30, 2023, was approximately **$126,000**[80](index=80&type=chunk) | Fiscal Year Ending March 31 | Future Lease Payments (in thousands) | | :--- | :--- | | 2024 | $382 | | 2025 | $523 | | 2026 | $538 | | 2027 | $460 | | **Total Future Lease Payments** | **$1,903** | [Note 8. Concentrations](index=16&type=section&id=Note%208.%20Concentrations) This note identifies Organovo's credit risk concentrations in temporary cash investments and royalty revenue from a single licensee - The company's credit risk is concentrated in temporary cash investments and royalty revenue from a single licensee[82](index=82&type=chunk) [Note 9. Related Parties](index=16&type=section&id=Note%209.%20Related%20Parties) This note describes Organovo's intercompany agreement and shared personnel with Viscient Biosciences, Inc., a related party - Organovo has an intercompany agreement with Viscient Biosciences, Inc., a related party, for services and shared facilities/equipment[85](index=85&type=chunk)[198](index=198&type=chunk) - Organovo's Executive Chairman and Chief Scientific Officer also hold positions at Viscient Biosciences, Inc[84](index=84&type=chunk)[196](index=196&type=chunk) | Service Provided | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | | :--- | :--- | :--- | | Histology services to Viscient | $10 | $11 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Organovo's financial condition and results for the three months ended June 30, 2023, highlighting increased losses and going concern doubt [Basis of Presentation](index=17&type=section&id=Basis%20of%20Presentation) This section clarifies that the financial statements are prepared according to SEC Form 10-Q and GAAP, to be read with the annual report - The unaudited condensed consolidated financial statements are prepared in accordance with SEC Form 10-Q instructions and GAAP, and should be read in conjunction with the audited financial statements from the Annual Report on Form 10-K[89](index=89&type=chunk) [Overview](index=17&type=section&id=Overview) This section outlines Organovo's core business of 3D tissue models for drug discovery, its FXR program acquisition, and patent portfolio strategy - Organovo focuses on building high-fidelity 3D tissues to model human diseases, identify gene targets, and develop drug discovery programs, with a primary focus on inflammatory bowel disease (IBD) including UC and CD[90](index=90&type=chunk)[93](index=93&type=chunk) - The company uses its NovoGen Bioprinters® and 3D technologies to create functional 3D human tissues that mimic native tissue, enabling complex disease models for drug development[91](index=91&type=chunk)[92](index=92&type=chunk) - Organovo acquired Metacrine, Inc.'s FXR program in March 2023, which includes clinically tested compounds for GI and liver diseases, to broaden its therapeutic areas[94](index=94&type=chunk) - The company holds a large patent portfolio related to its bioprinting platform and is exploring opportunities to leverage it for business and revenue expansion[96](index=96&type=chunk) [Critical Accounting Policies, Estimates, and Judgments](index=18&type=section&id=Critical%20Accounting%20Policies%2C%20Estimates%2C%20and%20Judgments) This section states that no significant changes to critical accounting policies have occurred since March 31, 2023 - No significant changes to critical accounting policies have occurred since March 31, 2023[98](index=98&type=chunk) [Results of Operations](index=18&type=section&id=Results%20of%20Operations) This section analyzes Organovo's revenue, research and development, selling, general and administrative expenses, and other income for the three months ended June 30, 2023 | Metric | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Change (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $75 | $— | $75 | 100% | | Research and development | $1,666 | $1,020 | $646 | 63% | | Selling, general and administrative | $2,604 | $2,219 | $385 | 17% | | Other income | $169 | $26 | $143 | 550% | [Revenues](index=19&type=section&id=Revenues) This section details Organovo's revenue, primarily from intellectual property licensing royalties, for the three months ended June 30, 2023 | Metric | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Change (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $75 | $— | $75 | 100% | - The revenue increase is attributed to sales-based royalties from intellectual property licensing[100](index=100&type=chunk) [Research and Development Expenses](index=19&type=section&id=Research%20and%20Development%20Expenses) This section analyzes the increase in Organovo's R&D expenses, driven by headcount, personnel, lab, consulting, and facilities costs | Metric | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Change (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Research and development | $1,505 | $863 | $642 | 74% | | Non-cash stock-based compensation | $107 | $121 | $(14) | (12%) | | Depreciation and amortization | $54 | $36 | $18 | 50% | | **Total research and development expenses** | **$1,666** | **$1,020** | **$646** | **63%** | - The increase in R&D expenses is due to a rise in headcount (from 14 to 18 full-time R&D staff), a **$0.3 million increase in personnel costs**, a **$0.2 million increase in lab expenses**, a **$0.1 million increase in consulting expenses**, and a **$0.1 million increase in facilities expenses**[101](index=101&type=chunk) [Selling, General and Administrative Expenses](index=19&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) This section examines the increase in Organovo's SG&A expenses, mainly due to legal, corporate, and consulting costs | Metric | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Change (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Selling, general and administrative | $2,223 | $1,666 | $557 | 33% | | Non-cash stock-based compensation | $368 | $539 | $(171) | (32%) | | Depreciation and amortization | $13 | $14 | $(1) | (7%) | | **Total selling, general and administrative expenses** | **$2,604** | **$2,219** | **$385** | **17%** | - The increase in SG&A expenses is primarily due to a **$0.4 million increase in legal and corporate expenses** and a **$0.1 million increase in consulting expenses**, despite a **$0.1 million decrease in personnel-related costs**[102](index=102&type=chunk) [Other Income](index=19&type=section&id=Other%20Income) This section details the significant increase in Organovo's other income for the three months ended June 30, 2023 | Metric | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Change (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Other income | $169 | $26 | $143 | 550% | [Financial Condition, Liquidity and Capital Resources](index=19&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) This section discusses Organovo's cash position, operating cash flow, and the substantial doubt about its ability to continue as a going concern - As of June 30, 2023, the company had **$10.8 million in cash and cash equivalents**, **$0.1 million in restricted cash**, and an accumulated deficit of **$329.0 million**[105](index=105&type=chunk) - The company had negative cash flow from operations of **$5.3 million** for the three months ended June 30, 2023[105](index=105&type=chunk) - Management has concluded that substantial doubt exists about the company's ability to continue as a going concern for at least one year, necessitating substantial additional funding[111](index=111&type=chunk)[176](index=176&type=chunk) [Operating activities](index=20&type=section&id=Operating%20activities) This section details the net cash used in Organovo's operating activities, primarily due to increased R&D and the Metacrine acquisition | Metric | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | $(5,311) | $(2,414) | $(2,897) | - The increase in operating cash usage is primarily due to increased R&D activities, including a **$2.0 million cash outflow** for the acquisition of Metacrine's FXR drug compound, related research data, and IP[107](index=107&type=chunk) [Investing activities](index=20&type=section&id=Investing%20activities) This section outlines Organovo's investing activities, including purchases and maturities of investments and liquidation of equity securities | Metric | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Net cash provided by (used in) investing activities | $764 | $(10,693) | $11,457 | - Investing activities included **$4.9 million in purchases of investments**, **$5.0 million in maturities of investments**, and **$0.7 million from liquidation of equity securities**[108](index=108&type=chunk) [Financing activities](index=20&type=section&id=Financing%20activities) This section confirms that Organovo had no cash financing activities during the three months ended June 30, 2023, or 2022 - No cash financing activities occurred during the three months ended June 30, 2023, or June 30, 2022[109](index=109&type=chunk) [Operations funding requirements](index=20&type=section&id=Operations%20funding%20requirements) This section addresses Organovo's future funding needs, expected operating expenses, and potential impacts of insufficient financing - Expected total operating expenses for fiscal year ending March 31, 2024, are between **$12.0 million and $14.0 million**[111](index=111&type=chunk) - The company has approximately **$100.0 million available** for future offerings under its 2021 Shelf registration statement and **$28.3 million available** through its ATM program as of June 30, 2023[115](index=115&type=chunk) - Failure to obtain adequate financing could materially adversely affect the business, operating results, financial condition, and ability to continue as a going concern, potentially leading to dilution or restrictive debt terms[116](index=116&type=chunk) [Off-Balance Sheet Arrangements](index=21&type=section&id=Off-Balance%20Sheet%20Arrangements) This section states that Organovo has no off-balance sheet arrangements - The company has no off-balance sheet arrangements[120](index=120&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=22&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not required for smaller reporting companies under Item 305(e) of Regulation S-K - This disclosure is not required for smaller reporting companies[121](index=121&type=chunk) [Item 4. Controls and Procedures](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2023, with no material changes in internal control over financial reporting - Management concluded that disclosure controls and procedures were designed and operating effectively as of June 30, 2023[123](index=123&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter[124](index=124&type=chunk) [Disclosure Controls and Procedures](index=22&type=section&id=Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of Organovo's disclosure controls and procedures as of June 30, 2023 - Disclosure controls and procedures are designed to ensure timely and accurate reporting of information required by the Exchange Act[122](index=122&type=chunk) - Management concluded that disclosure controls and procedures were effective as of June 30, 2023[123](index=123&type=chunk) [Changes in Internal Control over Financial Reporting](index=22&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section states that no material changes in internal control over financial reporting occurred during the fiscal quarter - No material changes in internal control over financial reporting occurred during the fiscal quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[124](index=124&type=chunk) [Inherent Limitations on Effectiveness of Controls](index=22&type=section&id=Inherent%20Limitations%20on%20Effectiveness%20of%20Controls) This section acknowledges that control systems provide only reasonable assurance due to inherent limitations like human error or management override - Control systems provide only reasonable assurance due to inherent limitations such as resource constraints, human error, collusion, or management override[125](index=125&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=23&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 6 for a discussion of Organovo's legal proceedings and contingencies, indicating no material accruals - Refer to Note 6 of the Notes to the Unaudited Condensed Consolidated Financial Statements for a discussion of legal proceedings and contingencies[128](index=128&type=chunk) [Item 1A. Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors) Investing in Organovo's common stock is highly speculative due to substantial risks, including ongoing operating losses, significant funding needs, and going concern doubt [Risk Factor Summary](index=23&type=section&id=Risk%20Factor%20Summary) This section summarizes key risks, including substantial operating losses, unproven drug discovery strategies, significant funding requirements, and going concern doubt - The company will incur substantial additional operating losses as research and development activities increase[132](index=132&type=chunk) - Using the platform technology to develop human tissues and disease models for drug discovery and development is new and unproven[132](index=132&type=chunk) - Substantial additional funding is required, which could cause dilution to existing stockholders or restrict operations[132](index=132&type=chunk) - Management has concluded that substantial doubt exists about the company's ability to continue as a going concern[132](index=132&type=chunk) [Risks Related to our Business](index=24&type=section&id=Risks%20Related%20to%20our%20Business) This section details risks associated with Organovo's unproven business strategy, intense competition, and dependence on cell supply and key personnel - The business strategy of using 3D bioprinting for drug discovery and development is unproven, and the company has not yet identified or developed any drug candidates using this model[133](index=133&type=chunk)[135](index=135&type=chunk) - The company faces intense competition in drug discovery from major drug companies, specialized biotechnology firms, and academic institutions with significantly greater financial and technical resources[136](index=136&type=chunk) - Success depends on successfully developing human tissues and disease models, outsourcing development, entering into partnerships, obtaining regulatory approvals, and raising sufficient funds[134](index=134&type=chunk) - The company requires access to a constant, steady, reliable supply of human cells to support its 3D tissue development activities[141](index=141&type=chunk) - Inability to successfully attract, hire, and integrate key additional employees or contractors could adversely impact drug discovery plans[142](index=142&type=chunk) [Risks Related to Government Regulation](index=28&type=section&id=Risks%20Related%20to%20Government%20Regulation) This section outlines risks from hazardous materials, inadequate reimbursement, and evolving healthcare legislation impacting drug commercialization - Past use of hazardous chemicals, biological materials, and infectious agents could lead to costly and time-consuming claims if improperly handled, stored, or disposed of[160](index=160&type=chunk)[161](index=161&type=chunk) - Failure to obtain and sustain adequate reimbursement for potential products by third-party payors would materially adversely affect future sales and profitability[162](index=162&type=chunk)[167](index=167&type=chunk) - Current and future legislation, such as the Inflation Reduction Act of 2022 and the PPACA, may increase the difficulty and cost of commercializing drug candidates and affect the prices obtained if approved[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk) [Risks Related to Our Capital Requirements, Finances and Operations](index=31&type=section&id=Risks%20Related%20to%20Our%20Capital%20Requirements%2C%20Finances%20and%20Operations) This section addresses Organovo's going concern doubt, history of losses, funding needs, and risks from strategic investments and cybersecurity - Management has concluded that substantial doubt exists about the company's ability to continue as a going concern, which could materially adversely affect its share price and ability to raise new capital or enter into strategic alliances[176](index=176&type=chunk) - The company has a history of operating losses (**$329.0 million accumulated deficit** as of June 30, 2023) and expects to incur significant additional operating losses[178](index=178&type=chunk) - Additional funds may not be available on acceptable terms, potentially requiring the company to delay, limit, or eliminate business opportunities, leading to dilution for existing stockholders or restrictive debt covenants[177](index=177&type=chunk) - Quarterly operating results may vary due to factors such as R&D expenditures, strategic evaluations, and litigation, which could negatively affect the market price of common stock[181](index=181&type=chunk) - Future strategic investments could negatively affect the business if desired returns are not achieved, potentially leading to unforeseen losses, asset impairments, or a downgrade in stock[184](index=184&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) - The company's future success depends on retaining executive officers and other key personnel, and conflicts of interest may arise due to shared executives with Viscient Biosciences, Inc[188](index=188&type=chunk)[199](index=199&type=chunk) - The company is subject to security breaches and cybersecurity incidents, as well as evolving global privacy and data security requirements (e.g., GDPR, CCPA), which could result in additional costs, liabilities, significant fines, and reputational harm[189](index=189&type=chunk)[190](index=190&type=chunk)[192](index=192&type=chunk)[194](index=194&type=chunk) [Risks Related to Our Common Stock and Liquidity Risks](index=35&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock%20and%20Liquidity%20Risks) This section covers risks related to stock listing, price volatility, potential dilution from future issuances, and anti-takeover provisions - Failure to maintain the listing of common stock on the Nasdaq Capital Market could seriously harm stock liquidity, market price, and ability to raise capital or complete strategic transactions[200](index=200&type=chunk)[201](index=201&type=chunk) - The price of common stock is likely to be highly volatile, which could lead to losses by investors and costly securities litigation[203](index=203&type=chunk) - Future issuance of additional shares of capital stock to raise funds will likely result in substantial dilution to existing stockholders' ownership interests[204](index=204&type=chunk)[205](index=205&type=chunk) - The company does not intend to pay dividends for the foreseeable future, which could affect the market value of its stock[206](index=206&type=chunk) - Anti-takeover provisions in organizational documents and Delaware law may discourage or prevent a change of control, even if beneficial to stockholders[207](index=207&type=chunk)[208](index=208&type=chunk) [Risks Related to Our Intellectual Property](index=37&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) This section discusses risks concerning inadequate IP protection, patent validity challenges, global enforcement, and reliance on license agreements - Inadequate protection of proprietary rights could allow competitors to use technologies and gain a competitive advantage, harming the business[209](index=209&type=chunk) - Patents covering products could be found invalid or unenforceable if challenged in court or before administrative bodies, potentially reducing their scope or allowing third parties to commercialize technology without payment[216](index=216&type=chunk) - The company may not be able to protect its intellectual property rights throughout the world due to prohibitive costs, varying legal systems, or public disclosures[213](index=213&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk) - Involvement in lawsuits to protect or enforce patents can be expensive, time-consuming, and unsuccessful, potentially leading to loss of rights, injunctions, or substantial penalties[221](index=221&type=chunk)[223](index=223&type=chunk) - Dependence on license agreements with the University of Missouri, Clemson University, and the Salk Institute means failure to comply with obligations could materially harm the business and prevent commercialization of product candidates[227](index=227&type=chunk) - Inability to adequately prevent disclosure of trade secrets and other proprietary information could adversely affect the competitive business position[229](index=229&type=chunk) - The company may be subject to claims that its employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties[230](index=230&type=chunk) [General Risk Factors](index=41&type=section&id=General%20Risk%20Factors) This section highlights the expenses and compliance challenges associated with federal securities laws and the Sarbanes-Oxley Act - Compliance with the reporting requirements of federal securities laws, including the Sarbanes-Oxley Act, can be expensive[231](index=231&type=chunk) - Failure to comply with Section 404 of the Sarbanes-Oxley Act related to accounting controls and procedures, or discovery of material weaknesses, could lead to sanctions, a decline in stock price, and significant additional resources to achieve compliance[232](index=232&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the three months ended June 30, 2023, Organovo repurchased 28 shares of common stock at an average price of $1.85 per share to satisfy tax withholding obligations upon the vesting of restricted stock unit awards | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | May 1, 2023 - May 31, 2023 | 28 | $1.85 | | **Total** | **28** | **$1.85** | - Shares were repurchased to satisfy tax withholding obligations upon the vesting of restricted stock unit awards[233](index=233&type=chunk) [Item 3. Defaults Upon Senior Securities](index=42&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - No defaults upon senior securities were reported[234](index=234&type=chunk) [Item 4. Mine Safety Disclosure](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This item is not applicable to the company - This item is not applicable to the company[235](index=235&type=chunk) [Item 5. Other Information](index=42&type=section&id=Item%205.%20Other%20Information) The company reported no other information - No other information was reported[236](index=236&type=chunk) [Item 6. Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including the Certificate of Incorporation, Bylaws, and various certifications (e.g., Section 302, Section 906 of Sarbanes-Oxley Act) and XBRL documents - The exhibits include organizational documents (Certificate of Incorporation, Bylaws), certifications (Section 302, Section 906 of Sarbanes-Oxley Act), and Inline XBRL documents[237](index=237&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended March 31, 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 No. 001-35996 ORGANOVO HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 27-1488943 (State or other jurisdiction of in ...