Aerovate Therapeutics(US:AVTE)2025-11-14 12:00Financial Performance - The company incurred a net loss of $46.98 million for the period from June 18, 2024, to December 31, 2024, with a loss per share of $14.89[14]. - Total operating expenses for the same period amounted to $35.54 million, primarily driven by $31.23 million in research and development costs[14]. - Jade Biosciences has a stockholders' deficit of $46.8 million as of December 31, 2024, reflecting significant accumulated losses since inception[11]. - The Company incurred a net loss of $47.0 million from inception (June 18, 2024) to December 31, 2024, with an accumulated deficit of $47.0 million as of the same date[36]. - Basic and diluted net loss per share attributable to common stockholders was $(14.89) for the period from June 18, 2024, to December 31, 2024, with a net loss of $(46.979) million[152]. Assets and Funding - As of December 31, 2024, Jade Biosciences, Inc. reported total assets of $72.8 million, a significant increase from $3,000 on June 18, 2024[11]. - The Company had $69.4 million in cash and cash equivalents as of December 31, 2024, indicating a need for substantial additional funding to support operations[31][33]. - The company raised $95 million through the issuance of convertible notes payable, contributing to a net cash increase of $69.39 million by the end of the reporting period[20]. - The Company raised $80.0 million from the issuance of Convertible Notes in July 2024 and an additional $15.0 million in September 2024[37]. - The Company expects to finance its operating activities through equity offerings and debt financings until it can generate significant revenue from product sales[33]. Research and Development - The Company has significant research and development costs, which include external costs and expenses related to agreements with third-party service providers[60]. - The Company capitalized $24.9 million of research and development expenses from June 18, 2024, to December 31, 2024[122]. - The Company recognized $24.6 million in research and development expenses related to services provided by Paragon under the Paragon Option Agreement and the JADE-001 License Agreement for the period from June 18, 2024, to December 31, 2024[141]. - JADE-001 external research and development costs were $22.992 million, while JADE-002 and JADE-003 costs were $2.437 million and $2.141 million, respectively[161]. - The Company recognized $5.5 million as research and development expense related to the Paragon Option Agreement during the reporting period[133]. Mergers and Acquisitions - The company entered into a merger agreement with Aerovate Therapeutics, which will result in Jade becoming a wholly owned subsidiary of Aerovate[26]. - The merger is expected to enhance the combined company's focus on developing differentiated biologic therapies for autoimmune diseases[26]. - Jade's management team will lead the combined company post-merger, indicating a continuity of leadership and strategic direction[26]. - The Company completed a merger with Jade, resulting in an Exchange Ratio of 0.6311 shares of Aerovate common stock for each share of Jade common stock[30]. Regulatory and Market Risks - The company has identified risks related to regulatory approvals and market acceptance of its product candidates, which are critical for future success[24]. - The Company has substantial doubt about its ability to continue as a going concern for at least 12 months from the date its consolidated financial statements are available[40]. Stock and Equity - The Company issued 20,000,000 shares of Convertible Preferred Stock on June 18, 2024, for gross proceeds of less than $0.1 million[90]. - Each share of Convertible Preferred Stock is convertible into common stock at a ratio of 1-for-0.6311, with an original issue price of $0.0001 per share[97]. - The Company has 3,155,500 shares of common stock issued and outstanding, with 15,014,751 shares reserved for potential conversion of Convertible Preferred Stock and stock options[103][104]. - The 2024 Equity Incentive Plan authorized 8,067,789 shares of common stock for issuance, with 2,392,751 shares reserved as of December 31, 2024[105]. - The Company has accrued expenses totaling $4.125 million as of December 31, 2024, including $2.791 million for research and development contract costs[85]. Tax and Valuation - The effective income tax rate for the period was 0.0%, primarily due to a full valuation allowance of $7.6 million against deferred tax assets[119]. - The federal net operating loss carryforward was $2.1 million, with state net operating loss carryforwards of less than $0.1 million[120]. - The valuation allowance increased by $7.6 million due to net operating loss carryforwards and research and development tax credit carryforwards[122]. Related Party Transactions - The Company has $5.5 million in related party accrued expenses pertaining to services provided by Paragon and Parade under the Paragon Option Agreement as of December 31, 2024[156]. - Fairmount beneficially owns more than 5% of the Company's capital and has two representatives on the Board of Directors[157]. - The Company issued 20,000,000 shares of Convertible Preferred Stock to Fairmount for gross proceeds of less than $0.1 million in June 2024[157].