CalciMedica(CALC) - 2023 Q2 - Quarterly Report

PART I—FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents CalciMedica's unaudited condensed consolidated financial statements for the periods ended June 30, 2023, detailing the reverse merger's impact and key accounting policies Condensed Consolidated Balance Sheets As of June 30, 2023, total assets significantly increased to $20.2 million from $3.3 million due to the merger, shifting stockholders' equity from a $71.3 million deficit to a $16.2 million positive balance Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2023 (unaudited) | December 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $19,084 | $1,327 | | Total current assets | $20,045 | $1,730 | | Total assets | $20,245 | $3,349 | | Liabilities & Equity | | | | Total current liabilities | $4,024 | $4,780 | | Warrant liability | $0 | $2,645 | | Convertible promissory notes | $0 | $5,157 | | Total liabilities | $4,024 | $12,582 | | Total stockholders' equity (deficit) | $16,221 | ($71,304) | Condensed Consolidated Statements of Operations and Comprehensive Loss The company reported a $6.3 million net loss for Q2 2023 and a $25.6 million net loss for the six months ended June 30, 2023, driven by increased operating expenses from merger-related costs Statement of Operations Summary (in thousands) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $3,814 | $2,259 | $10,305 | $5,184 | | General and administrative | $2,769 | $1,330 | $18,618 | $2,616 | | Total operating expenses | $6,583 | $3,589 | $28,923 | $7,800 | | Loss from operations | ($6,583) | ($3,589) | ($28,923) | ($7,800) | | Net loss | ($6,304) | ($3,030) | ($25,592) | ($6,660) | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2023, net cash used in operations was $17.5 million, while financing activities provided $20.7 million, resulting in a $17.6 million net increase in cash Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($17,547) | ($5,842) | | Net cash provided by (used in) investing activities | $14,502 | ($4) | | Net cash provided by financing activities | $20,653 | $1,307 | | Net increase (decrease) in cash | $17,608 | ($4,539) | Notes to the Condensed Consolidated Financial Statements These notes detail the Graybug merger as a reverse recapitalization, significant accounting policies, fair value measurements, and confirm sufficient liquidity for operations beyond 12 months - The merger with Graybug on March 20, 2023, was accounted for as a reverse recapitalization, with Private CalciMedica treated as the accounting acquirer[222] - As of June 30, 2023, the company had $19.1 million in cash and cash equivalents, expected to fund operations beyond 12 months from the financial statement issuance date[229] - The company recorded one-time charges of $10.5 million for accelerated Graybug stock awards and $5.7 million in severance related to the merger during the six months ended June 30, 2023[263] Net Loss Per Share (Basic and Diluted) | Period | Net Loss (in thousands) | Weighted Average Shares | Net Loss Per Share | | :--- | :--- | :--- | :--- | | Three Months Ended June 30, 2023 | $(6,304) | 5,661,933 | $(1.11) | | Three Months Ended June 30, 2022 | $(3,030) | 82,923 | $(36.55) | | Six Months Ended June 30, 2023 | $(25,592) | 3,255,868 | $(7.86) | | Six Months Ended June 30, 2022 | $(6,660) | 80,812 | $(82.42) | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's clinical-stage biopharmaceutical focus, significant increase in operating expenses and net loss due to merger costs, and liquidity sufficient into H2 2024, with future capital needs for commercialization - The company is a clinical-stage biopharmaceutical firm focused on developing CRAC channel inhibitors, with its lead product candidate, Auxora, in a Phase 2b trial for acute pancreatitis (CARPO) with topline results expected in H1 2024[8] - The net loss for the six months ended June 30, 2023, was $25.6 million, including $16.2 million in one-time merger-related charges ($10.5 million for accelerated stock vesting and $5.7 million for severance)[11][27] - As of June 30, 2023, the company had $19.1 million in cash and cash equivalents, believed sufficient to fund operations into H2 2024[38] Results of Operations Total operating expenses increased 83% to $6.6 million for Q2 2023 and 271% to $28.9 million for the six-month period, primarily due to merger-related G&A costs Comparison of Operating Expenses for the Three Months Ended June 30 (in thousands) | Expense Category | 2023 | 2022 | Change Amount | Change % | | :--- | :--- | :--- | :--- | :--- | | Research and development | $3,814 | $2,259 | $1,555 | 69% | | General and administrative | $2,769 | $1,330 | $1,439 | 108% | | Total operating expenses | $6,583 | $3,589 | $2,994 | 83% | Comparison of Operating Expenses for the Six Months Ended June 30 (in thousands) | Expense Category | 2023 | 2022 | Change Amount | Change % | | :--- | :--- | :--- | :--- | :--- | | Research and development | $10,305 | $5,184 | $5,121 | 99% | | General and administrative | $18,618 | $2,616 | $16,002 | 612% | | Total operating expenses | $28,923 | $7,800 | $21,123 | 271% | - The $16.0 million increase in G&A expenses for the six-month period was primarily driven by a one-time charge for accelerated stock option vesting ($8.6 million) and a one-time severance charge ($4.1 million) due to the Merger[25] Liquidity and Capital Resources Operations have been funded by $149.7 million; as of June 30, 2023, $19.1 million in cash is expected to fund operations into H2 2024, but additional capital is needed for full development - Cash used in operating activities was $17.6 million for the six months ended June 30, 2023, compared to $5.8 million for the same period in 2022[33][36] - Cash provided by financing activities for the six months ended June 30, 2023, was $20.7 million, including $14.9 million net cash from the Merger and $10.3 million from a private placement, offset by $4.5 million in transaction costs[34] - Management believes $19.1 million in cash and cash equivalents as of June 30, 2023, will fund operations into H2 2024, but substantial additional capital is required for full development and commercialization[38] Item 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, CalciMedica is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, CalciMedica is not required to provide quantitative and qualitative disclosures about market risk[52] Item 4. Controls and Procedures Management concluded disclosure controls were ineffective as of June 30, 2023, due to a material weakness in accounting for convertible notes and warrant liability, with remediation efforts underway - Management concluded that disclosure controls and procedures were not effective as of the end of the reporting period[53] - A material weakness was identified in internal controls related to accounting for the valuation of convertible promissory notes and warrant liability[53][54] - Remediation steps have been initiated, including enhancing access to accounting literature and identifying third-party professionals for complex valuation model consultation[53] PART II—OTHER INFORMATION Item 1. Legal Proceedings Four lawsuits against former Graybug directors regarding merger disclosures were voluntarily dismissed after supplemental filings, resolved via a settlement agreement for a mootness fee - Four lawsuits were filed against Graybug and its directors related to the Merger, alleging misrepresentations and/or omissions in the proxy statement[57] - After Graybug filed supplemental disclosures, plaintiffs voluntarily dismissed their complaints, and a settlement agreement was executed to resolve a mootness fee demand[57] - The company believes no pending litigation could have a material adverse effect on its results of operations or financial condition[57] Item 1A. Risk Factors This section outlines significant investment risks, including limited operating history, ongoing losses, dependence on Auxora's success, clinical development uncertainties, reliance on third parties, and a material weakness in internal controls - The company is a clinical-stage biopharmaceutical company with a limited operating history, an accumulated deficit of $137.3 million as of June 30, 2023, and anticipates continued significant losses[69] - The business is highly dependent on the success of its lead product candidate, Auxora, and may fail to develop it successfully or obtain regulatory approval[74] - A material weakness in internal control over financial reporting was recently identified, potentially impacting financial reporting accuracy and investor confidence if not remediated[161][68] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities for the period covered by this report - The company reports no unregistered sales of equity securities for the period[171] Item 3. Defaults Upon Senior Securities The company reports no defaults upon senior securities - None reported[172] Item 4. Mine Safety Disclosures This item is not applicable to the company's operations - Not applicable[173] Item 5. Other Information The company reports no other information for this item - None reported[166] Item 6. Exhibits This section lists exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents, financing agreements, and officer certifications - A list of exhibits filed with the report is provided, including corporate governance documents, financing agreements, and required certifications[177][178]