Part I—Financial Information This section presents the unaudited financial statements, management's analysis, and disclosures on market risk and internal controls Financial Statements (Unaudited) The company's financial position changed significantly post-merger, with increased assets and a substantial net loss driven by one-time expenses - On March 20, 2023, the company completed a reverse merger with Graybug Vision, Inc, with Private CalciMedica being treated as the accounting acquirer134087 - Post-merger, former Private CalciMedica and Graybug equityholders owned approximately 72% and 28% of the combined company, respectively134087 - Management has concluded that the company's existing cash, cash equivalents, and short-term investments may not be sufficient to fund operations for one year, raising substantial doubt about its ability to continue as a going concern46182 Condensed Consolidated Balance Sheets The balance sheet reflects a substantial increase in assets and a shift from deficit to positive stockholders' equity post-merger Condensed Consolidated Balance Sheets (in thousands) | | Sep 30, 2023 (unaudited) | Dec 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $11,644 | $1,327 | | Short-term investments | $2,947 | $0 | | Total current assets | $15,273 | $1,730 | | Total assets | $15,845 | $3,349 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $3,686 | $4,780 | | Total liabilities | $3,686 | $12,582 | | Total stockholders' equity (deficit) | $12,159 | ($71,304) | | Total liabilities and stockholders' equity (deficit) | $15,845 | $3,349 | - Following the merger, total assets increased significantly from $3.3 million to $15.8 million, primarily due to an increase in cash and the addition of short-term investments2399 - Total liabilities decreased from $12.6 million to $3.7 million, mainly because convertible promissory notes and warrant liabilities were converted to equity2399 Condensed Consolidated Statements of Operations and Comprehensive Loss Operating expenses and net loss surged for the nine-month period due to significant one-time merger-related charges Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $2,772 | $1,244 | $13,077 | $6,428 | | General and administrative | $2,061 | $2,044 | $20,679 | $4,660 | | Total operating expenses | $4,833 | $3,288 | $33,756 | $11,088 | | Loss from operations | ($4,833) | ($3,288) | ($33,756) | ($11,088) | | Net loss and comprehensive loss | ($4,619) | ($2,581) | ($30,211) | ($9,241) | | Net loss per share—basic and diluted | ($0.82) | ($31.04) | ($7.43) | ($113.24) | - For the nine months ended September 30, 2023, operating expenses surged to $33.8 million from $11.1 million in the prior year, including $16.2 million in one-time merger-related charges42159 Condensed Consolidated Statements of Cash Flows Cash flow from operations was negative, but financing activities provided a significant net increase in cash Condensed Consolidated Statements of Cash Flows (in thousands) | | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($22,118) | ($7,668) | | Net cash provided by (used in) investing activities | $11,561 | ($4) | | Net cash provided by financing activities | $20,725 | $3,007 | | Net increase (decrease) in cash and cash equivalents | $10,168 | ($4,665) | - For the nine months ended September 30, 2023, cash from financing activities was $20.7 million, primarily from $14.9 million in net cash acquired in the merger and $10.3 million from a private placement194 Management's Discussion and Analysis of Financial Condition and Results of Operations The company's focus on Auxora is detailed alongside rising expenses and substantial doubt about its going concern status Overview The company is a clinical-stage biopharmaceutical firm developing CRAC channel inhibitors, with Auxora as its lead candidate - The company is a clinical-stage biopharmaceutical company focused on developing therapeutics for inflammatory and immunologic diseases by inhibiting CRAC channels148149 - The lead product candidate is Auxora, with topline results for its Phase 2b CARPO trial expected in the first half of 2024 and plans for a Phase 2 AKI trial subject to funding150151153 Results of Operations Operating expenses for the nine-month period rose significantly due to increased R&D and G&A costs from merger-related charges Comparison of Operating Results (in thousands) | | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $2,772 | $1,244 | $13,077 | $6,428 | | General and administrative | $2,061 | $2,044 | $20,679 | $4,660 | | Total operating expenses | $4,833 | $3,288 | $33,756 | $11,088 | | Net loss | ($4,619) | ($2,581) | ($30,211) | ($9,241) | - For the nine months ended Sep 30, 2023, R&D expenses increased by $6.6 million, primarily due to a $4.8 million increase in personnel costs which included one-time merger-related charges177 - For the nine months ended Sep 30, 2023, G&A expenses increased by $16.0 million, driven by a $14.7 million rise in personnel costs including one-time merger-related charges178 Liquidity and Capital Resources Existing capital raises substantial doubt about going concern, with resources sufficient only through Q3 2024 - As of September 30, 2023, the company had cash, cash equivalents, and short-term investments of $14.6 million181 - Management believes existing resources are sufficient to fund operations only through the third quarter of 2024, which raises substantial doubt about the company's ability to continue as a going concern182 - In August 2023, the company established an At-the-Market (ATM) facility for up to $4.7 million and had raised $72,000 in net proceeds as of September 30, 2023120188 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, CalciMedica is not required to provide the information for this item - As a smaller reporting company, CalciMedica is not required to provide quantitative and qualitative disclosures about market risk215 Controls and Procedures Disclosure controls were deemed ineffective due to a material weakness in internal controls over financial reporting - Management identified a material weakness in internal controls related to the accounting for the valuation of its convertible promissory notes and warrant liability, leading to a restatement219477478 - Due to this material weakness, the CEO and Interim CFO concluded that the company's disclosure controls and procedures were not effective as of the end of the reporting period217 Part II—Other Information This section covers legal proceedings, key risk factors, and other required disclosures Legal Proceedings The company is not currently involved in any material litigation - The company states that it currently has no pending litigation that could have a material adverse effect on its financial condition or results of operations224 Risk Factors The company faces significant financial, clinical, operational, and regulatory risks, including a going concern warning Financial and Operational Risks The company's history of losses and need for capital create substantial doubt about its ability to continue as a going concern - The company has a limited operating history, has incurred net losses since inception, and there is substantial doubt about its ability to continue as a going concern228232 - Substantial additional funding is required to complete development and commercialization, which may cause significant dilution to stockholders231236 Clinical Development and Regulatory Risks The business depends heavily on the success of its lead candidate, Auxora, which is based on unproven science - The company's science is based on novel CRAC channel inhibition, which is unproven and may not result in approvable products245 - The business is highly dependent on the success of its lead candidate, Auxora, and failure to obtain regulatory approval would significantly harm the business249251 - A significant portion of its CARPO trial is conducted in India, and there is a risk that the FDA may not accept data from trials conducted outside the U.S262 Manufacturing, Commercialization and Third-Party Reliance Risks The company relies on third parties for manufacturing and clinical trials, creating risks in supply, quality, and market acceptance - The company relies on third parties (CROs) to conduct most of its research and clinical trials, and poor performance could delay or compromise programs314315 - The company has no manufacturing facilities and relies on third-party contract manufacturers, creating risks related to supply, quality, and regulatory compliance321322 - Even if approved, product candidates may fail to achieve market acceptance by physicians, patients, and payors, which is critical for commercial success325327 Intellectual Property Risks Success is contingent on obtaining and defending intellectual property, which faces uncertainty and potential challenges - The company's success depends on its ability to obtain and maintain sufficient intellectual property protection, a process that is uncertain and subject to challenge391392393 - The company may face third-party claims of intellectual property infringement, which could lead to costly litigation or block commercialization422424 - Protecting trade secrets is critical but difficult, and breaches or independent discovery by competitors could harm its competitive position445 Other General Risks Risks include a material weakness in internal controls and significant stockholder influence over corporate matters - A material weakness in internal control over financial reporting was recently identified, and failure to remediate it could lead to inaccurate reporting475476 - The company's principal stockholders and management own a significant percentage of stock, allowing them to exert significant control over matters subject to stockholder approval473 Other Disclosures The company reported no unregistered sales of equity securities or other material information during the period - The company reported no unregistered sales of equity securities, defaults upon senior securities, or other information for the quarter487488
GRAYBUG VISION(GRAY) - 2023 Q3 - Quarterly Report