Filed Pursuant to Rule 424(b)(3)
Registration No. 333-269564
Prospectus Supplement No. 2
(To Prospectus dated March 30, 2023)
Comera Life Sciences Holdings, Inc.
7,218,726 Shares of Common Stock
This prospectus supplement no. 2 (this “Prospectus Supplement”) updates, amends and supplements the prospectus dated March 30, 2023 (as amended or supplemented from time to time, the “Prospectus”) which forms a part of the Registration Statement on Form S-1 (Registration Statement No. 333-269564) filed by Comera Life Sciences Holdings, Inc. (“Holdco”). Capitalized terms used in this Prospectus Supplement and not otherwise defined herein have the meanings specified in the Prospectus.
This Prospectus Supplement is being filed to update, amend and supplement the information included or incorporated by reference in the Prospectus with the information contained in our Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission (the “SEC”) on May 12, 2023 (the “Quarterly Report”). Accordingly, we have attached the Quarterly Report to this Prospectus Supplement. This Prospectus Supplement is being re-filed due to a technical error that caused the Quarterly Report to be omitted as an attachment to the prospectus supplement filing on May 12, 2023.
This Prospectus Supplement is not complete without, and may not be delivered or utilized except in combination with, the Prospectus, including any amendments or supplements thereto. This Prospectus Supplement should be read in conjunction with the Prospectus and any amendments or supplements thereto. If there is any inconsistency between the information in the Prospectus and this Prospectus Supplement, you should rely on the information in this Prospectus Supplement.
The Holdco Common Stock is listed on The Nasdaq Capital Market (“Nasdaq”) under the symbol “CMRA”, and the Holdco Warrants are listed on Nasdaq under the symbol “CMRAW”. On May 11, 2023, the closing sale price of the Holdco Common Stock as reported on Nasdaq was $0.7299 per share, and the closing sale price of the Holdco Warrants as reported on Nasdaq was $0.0312 per warrant.
Investing in our securities is highly speculative and involves a high degree of risk. Before buying any securities, you should review carefully the risks and uncertainties of investing in our securities described in the section titled “Risk Factors” beginning on page 14 of the Prospectus, and under similar headings in any amendments or supplements thereto.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under the Prospectus or passed upon the accuracy or adequacy of the Prospectus. Any representation to the contrary is a criminal offense.
The date of this Prospectus Supplement is May 12, 2023
o
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period 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 Number: 1-41403
Comera Life Sciences Holdings, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware |
87-4706968 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
12 Gill Street Suite 4650 Woburn, Massachusetts |
01801 |
(Address of principal executive offices) |
(Zip Code) |
(617) 871-2101
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
Common Stock |
|
CMRA |
|
The Nasdaq Stock Market LLC |
Warrants |
|
CMRAW |
|
The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
|
☐ |
|
Accelerated filer |
|
☐ |
Non-accelerated filer |
|
☒ |
|
Smaller reporting company |
|
☒ |
|
|
|
|
Emerging growth company |
|
☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of May 11, 2023, the registrant had 22,305,138 shares of common stock, $0.0001 par value per share, outstanding.
2
Table of Contents
|
|
Page |
|
|
|
PART I. |
4 |
|
|
|
|
Item 1. |
4 |
|
|
Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 (unaudited) |
4 |
|
5 |
|
|
6 |
|
|
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022 (unaudited) |
7 |
|
Notes to Condensed Consolidated Financial Statements (unaudited) |
8 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
17 |
Item 3. |
24 |
|
Item 4. |
24 |
|
|
|
|
PART II. |
25 |
|
|
|
|
Item 1. |
25 |
|
Item 1A. |
25 |
|
Item 2. |
26 |
|
Item 3. |
26 |
|
Item 4. |
26 |
|
Item 5. |
26 |
|
Item 6. |
27 |
|
28 |
||
3
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
COMERA LIFE SCIENCES HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
1,538,653 |
|
|
$ |
446,607 |
|
Restricted cash - current |
|
|
— |
|
|
|
1,505,625 |
|
Accounts receivable |
|
|
— |
|
|
|
34,320 |
|
Deferred issuance costs |
|
|
— |
|
|
|
90,047 |
|
Prepaid expenses and other current assets |
|
|
868,784 |
|
|
|
986,499 |
|
Total current assets |
|
|
2,407,437 |
|
|
|
3,063,098 |
|
Restricted cash - non-current |
|
|
50,000 |
|
|
|
50,000 |
|
Property and equipment, net |
|
|
234,576 |
|
|
|
257,186 |
|
Right-of-use asset |
|
|
263,904 |
|
|
|
313,629 |
|
Security deposit |
|
|
43,200 |
|
|
|
43,200 |
|
Total assets |
|
$ |
2,999,117 |
|
|
$ |
3,727,113 |
|
Liabilities, Convertible Preferred Stock and Stockholders’ Deficit |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
1,772,187 |
|
|
$ |
1,458,267 |
|
Accrued expenses and other current liabilities |
|
|
1,365,334 |
|
|
|
1,295,764 |
|
Insurance premium financing |
|
|
— |
|
|
|
455,562 |
|
Deposit liability |
|
|
— |
|
|
|
1,505,625 |
|
Deferred revenue |
|
|
— |
|
|
|
144,280 |
|
Lease liability - current |
|
|
217,500 |
|
|
|
199,184 |
|
Total current liabilities |
|
|
3,355,021 |
|
|
|
5,058,682 |
|
Derivative warrant liabilities |
|
|
250,745 |
|
|
|
277,507 |
|
Lease liability - noncurrent |
|
|
53,669 |
|
|
|
120,302 |
|
Total liabilities |
|
|
3,659,435 |
|
|
|
5,456,491 |
|
Commitments and contingencies (Note 15) |
|
|
|
|
|
|
||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 4,305 shares designated Series A convertible preferred stock; 4,305 shares issued and outstanding at March 31, 2023 and December 31, 2022 |
|
|
4,604,526 |
|
|
|
4,517,710 |
|
Stockholders’ equity (deficit): |
|
|
|
|
|
|
||
Common stock, $0.0001 par value; 150,000,000 shares authorized; 19,152,693 and 16,709,221 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively |
|
|
1,915 |
|
|
|
1,671 |
|
Additional paid-in capital |
|
|
32,118,476 |
|
|
|
28,655,164 |
|
Accumulated deficit |
|
|
(37,385,235 |
) |
|
|
(34,903,923 |
) |
Total stockholders’ deficit |
|
|
(5,264,844 |
) |
|
|
(6,247,088 |
) |
Total liabilities, convertible preferred stock and stockholders’ deficit |
|
$ |
2,999,117 |
|
|
$ |
3,727,113 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
COMERA LIFE SCIENCES HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited)
|
|
Three Months Ended March 31, |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
Revenue |
|
$ |
392,915 |
|
|
$ |
95,334 |
|
Cost of revenue |
|
|
116,519 |
|
|
|
44,524 |
|
Operating expenses: |
|
|
|
|
|
|
||
Research and development |
|
|
343,705 |
|
|
|
487,217 |
|
General and administrative |
|
|
2,433,147 |
|
|
|
2,016,245 |
|
Total operating expenses |
|
|
2,776,852 |
|
|
|
2,503,462 |
|
Loss from operations |
|
|
(2,500,456 |
) |
|
|
(2,452,652 |
) |
Other income (expense), net: |
|
|
|
|
|
|
||
Change in fair value of derivative warrant liabilities |
|
|
26,762 |
|
|
|
— |
|
Interest expense |
|
|
(7,618 |
) |
|
|
(77 |
) |
Other expense, net |
|
|
— |
|
|
|
(426,666 |
) |
Total other income (expense), net |
|
|
19,144 |
|
|
|
(426,743 |
) |
Net loss and comprehensive loss |
|
|
(2,481,312 |
) |
|
|
(2,879,395 |
) |
Less: accretion of convertible preferred |
|
|
(86,816 |
) |
|
|
— |
|
Net loss attributable to common stockholders |
|
$ |
(2,568,128 |
) |
|
$ |
(2,879,395 |
) |
Net loss per share attributable to common stockholders — basic and diluted |
|
$ |
(0.13 |
) |
|
$ |
(4.01 |
) |
Weighted-average number of common shares used in computing net loss |
|
|
19,033,436 |
|
|
|
718,419 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
COMERA LIFE SCIENCES HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Series A Convertible |
|
|
Convertible |
|
|
|
|
|
|
Additional |
|
|
|
|
|
|
|
||||||||||||||||||
|
Preferred Stock |
|
|
Preferred Stock |
|
|
|
Common Stock |
|
|
Paid-in |
|
|
Accumulated |
|
|
Total |
|
||||||||||||||||||
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Stockholders’ Deficit |
|
|||||||||
Balance as of December 31, 2022 |
|
4,305 |
|
|
$ |
4,517,710 |
|
|
|
— |
|
|
$ |
— |
|
|
|
|
16,709,221 |
|
|
$ |
1,671 |
|
|
$ |
28,655,164 |
|
|
$ |
(34,903,923 |
) |
|
$ |
(6,247,088 |
) |
Issuance of common stock in connection with the January 2023 PIPE, net of issuance costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,406,242 |
|
|
|
240 |
|
|
|
3,200,209 |
|
|
|
|
|
|
3,200,449 |
|
|||||
Issuance of common stock in connection with the Arena purchase agreement |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
37,230 |
|
|
|
4 |
|
|
|
49,154 |
|
|
|
— |
|
|
|
49,158 |
|
Accretion of convertible preferred stock to redemption value |
|
— |
|
|
|
86,816 |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
(86,816 |
) |
|
|
— |
|
|
|
(86,816 |
) |
Stock-based compensation expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
300,765 |
|
|
|
— |
|
|
|
300,765 |
|
Net loss |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,481,312 |
) |
|
|
(2,481,312 |
) |
Balance as of March 31, 2023 |
|
4,305 |
|
|
$ |
4,604,526 |
|
|
|
— |
|
|
$ |
- |
|
|
|
|
19,152,693 |
|
|
$ |
1,915 |
|
|
$ |
32,118,476 |
|
|
$ |
(37,385,235 |
) |
|
$ |
(5,264,844 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Series A Convertible |
|
|
Convertible |
|
|
|
|
|
|
Additional |
|
|
|
|
|
|
|
||||||||||||||||||
|
Preferred Stock |
|
|
Preferred Stock |
|
|
|
Common Stock |
|
|
Paid-in |
|
|
Accumulated |
|
|
Total |
|
||||||||||||||||||
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Stockholders’ Deficit |
|
|||||||||
Balance as of December 31, 2021 |
|
— |
|
|
$ |
— |
|
|
|
13,802,758 |
|
|
$ |
20,857,453 |
|
|
|
|
308,443 |
|
|
$ |
31 |
|
|
$ |
2,213,547 |
|
|
$ |
(16,899,825 |
) |
|
$ |
(14,686,247 |
) |
Issuance of common stock upon exercise of stock options |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
735,859 |
|
|
|
74 |
|
|
|
429,356 |
|
|
|
— |
|
|
|
429,430 |
|
Stock-based compensation expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
42,556 |
|
|
|
— |
|
|
|
42,556 |
|
Net loss |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,879,395 |
) |
|
|
(2,879,395 |
) |
Balance as of March 31, 2022 |
|
— |
|
|
$ |
— |
|
|
|
13,802,758 |
|
|
$ |
20,857,453 |
|
|
|
|
1,044,302 |
|
|
$ |
105 |
|
|
$ |
2,685,459 |
|
|
$ |
(19,779,220 |
) |
|
$ |
(17,093,656 |
) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
COMERA LIFE SCIENCES HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
|
|
Three Months Ended March 31, |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
(2,481,312 |
) |
|
$ |
(2,879,395 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Stock-based compensation expense |
|
|
300,765 |
|
|
|
42,556 |
|
Depreciation expense |
|
|
28,260 |
|
|
|
24,774 |
|
Noncash lease expense |
|
|
1,408 |
|
|
|
(268 |
) |
Change in fair value of derivative warrant liabilities |
|
|
(26,762 |
) |
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
34,320 |
|
|
|
(148,000 |
) |
Prepaid expenses and other current assets |
|
|
117,715 |
|
|
|
220,676 |
|
Due from related parties |
|
|
— |
|
|
|
121 |
|
Accounts payable |
|
|
126,423 |
|
|
|
123,024 |
|
Accrued expenses and other current liabilities |
|
|
137,695 |
|
|
|
(300,767 |
) |
Deferred revenue |
|
|
(144,280 |
) |
|
|
47,727 |
|
Net cash used in operating activities |
|
|
(1,905,768 |
) |
|
|
(2,869,552 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
(88,359 |
) |
|
|
— |
|
Net cash flows used in investing activities |
|
|
(88,359 |
) |
|
|
— |
|
Cash flows from financing activities: |
|
|
|
|
|
|
||
Deferred offering costs paid in cash |
|
|
— |
|
|
|
(206,917 |
) |
Proceeds from January 2023 PIPE, net of issuance costs |
|
|
1,986,952 |
|
|
|
— |
|
Proceeds from the Arena Purchase Agreement |
|
|
49,158 |
|
|
|
— |
|
Repayment of insurance premium financing |
|
|
(455,562 |
) |
|
|
— |
|
Proceeds from exercise of stock options |
|
|
— |
|
|
|
429,430 |
|
Net cash provided by financing activities |
|
|
1,580,548 |
|
|
|
222,513 |
|
Net decrease in cash, cash equivalents and restricted cash |
|
|
(413,579 |
) |
|
|
(2,647,039 |
) |
Cash, cash equivalents and restricted cash at beginning of period |
|
|
2,002,232 |
|
|
|
6,560,140 |
|
Cash, cash equivalents, and restricted cash at end of period |
|
$ |
1,588,653 |
|
|
$ |
3,913,101 |
|
Supplemental information: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
1,538,653 |
|
|
$ |
3,863,101 |
|
Restricted cash |
|
|
50,000 |
|
|
|
50,000 |
|
Total cash, cash equivalents, and restricted cash shown in statements of cash flows |
|
$ |
1,588,653 |
|
|
$ |
3,913,101 |
|
Supplemental disclosure of noncash investing and financing activities: |
|
|
|
|
|
|
||
Fixed asset additions in accounts payable |
|
$ |
5,650 |
|
|
$ |
— |
|
Stock issuance costs in accounts payable and accrued expenses and other current liabilities |
|
$ |
360,253 |
|
|
$ |
109,738 |
|
Issuance of common stock in exchange for services by the Company's Board of Directors |
|
$ |
68,125 |
|
|
$ |
— |
|
Accretion on convertible preferred stock |
|
$ |
86,816 |
|
|
$ |
— |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
COMERA LIFE SCIENCES HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Organization
Formation and Organization
Comera Life Sciences Holdings, Inc. (“CLS Holdings,” “Comera” or the “Company”) was incorporated in Delaware on January 25, 2022 as a wholly-owned subsidiary of Comera Life Sciences, Inc. (“Legacy Comera”) for the purpose of effecting the Transaction (as defined below).
Legacy Comera was formed in the state of Delaware on January 2, 2014 as ReForm Biologics, LLC. On April 30, 2021, Legacy Comera completed a corporate reorganization (the “Reorganization”) and changed its name to ReForm Biologics, Inc. As part of the Reorganization, each issued and outstanding capital unit of Legacy Comera as of the date of the Reorganization was exchanged for shares of convertible preferred stock of Legacy Comera and previously outstanding incentive units of Legacy Comera were cancelled. On January 7, 2022, Legacy Comera changed its name to Comera Life Sciences, Inc. to emphasize Comera’s vision of a compassionate new era in medicine. On May 19, 2022, in connection with the closing of the Transaction, Legacy Comera became a wholly-owned subsidiary of CLS Holdings.
Comera is a biotechnology company dedicated to promoting a compassionate new era in medicine. The Company applies a deep knowledge of formulation science and technology to transform essential biologic medicines from intravenous (“IV”) to subcutaneous (“SQ”) forms. This revolutionary technology provides patients and families with the freedom of self-injectable care, allowing them to realize the potential of these life changing therapies, and to unlock the vast potential of their own lives. To accomplish this, Comera is developing an internal portfolio of proprietary therapeutics that incorporate Comera’s innovative proprietary formulation platform, SQore™. Comera also collaborates with pharmaceutical and biotechnology companies, applying the SQore™ platform to Comera’s partners’ biologic medicines to deliver enhanced formulations that facilitate self-injectable care.
Transaction
On May 19, 2022 (the “Closing Date”), the Company consummated the acquisition of all of the issued and outstanding shares of OTR Acquisition Corp. (“OTR”) and Legacy Comera (the “Transaction”), in accordance with the Business Combination Agreement dated January 31, 2022 (as amended on May 19, 2022, the “Business Combination Agreement”) by and among the Company, Legacy Comera, OTR, CLS Sub Merger 1 Corp., a Delaware corporation, (“Comera Merger Sub”), and CLS Sub Merger 2 Corp., a Delaware corporation (“OTR Merger Sub”). Pursuant to the terms of the Business Combination Agreement, a transaction between OTR and Legacy Comera was effected through the merger of Comera Merger Sub with and into Legacy Comera, with Legacy Comera surviving the merger as a wholly-owned subsidiary of CLS Holdings, and through a merger of OTR Merger Sub with and into OTR, with OTR surviving the merger as a wholly-owned subsidiary of CLS Holdings. OTR was formed in the state of Delaware for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities.
The Transaction was accounted for as a reverse recapitalization because Legacy Comera has been determined to be the accounting acquirer. Under the reverse recapitalization model, the Transaction treated Legacy Comera as issuing equity for the net assets of OTR, with no goodwill or intangible assets recorded.
2. Basis of Presentation and Significant Accounting Policies
Basis of Presentation
The accompanying condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).
The condensed consolidated financial statements do not include all the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s consolidated financial statements and related notes for the years ended December 31, 2022 and 2021 included in the Form 10-K filed with the SEC on March 17, 2023 (the “2022 Annual Report”).
8
The financial information as of March 31, 2023, and for the three months ended March 31, 2023 and 2022, is unaudited. In the opinion of management, all adjustments, consisting only of normal recurring adjustments considered necessary for the fair presentation of financial position, results of operations, and cash flows at the dates and for the periods presented, have been included. The balance sheet data as of December 31, 2022 was derived from audited consolidated financial statements. The results of the Company’s operations for any interim periods are not necessarily indicative of the results that may be expected for any other interim period or for a full fiscal year.
Risks and Uncertainties
The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including but not limited to, risks associated with completing preclinical studies and clinical trials, receiving regulatory approvals for product candidates, development by competitors of new biopharmaceutical products, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Significant discovery, research and development efforts, including clinical testing and regulatory approval, are required prior to commercialization of any potential product candidates. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize revenue from product sales.
Through March 31, 2023, the Company has funded its operations primarily with proceeds from the issuance of equity instruments and convertible notes. The Company has incurred recurring losses since its inception, including a net loss of $2.5 million and $2.9 million for the three months ended March 31, 2023 and 2022, respectively. In addition, as of March 31, 2023, the Company had an accumulated deficit of $37.4 million. The Company expects to continue to generate operating losses for the near future. The future viability of the Company is dependent on its ability to raise additional capital to finance its operations. The Company’s inability to raise capital as and when needed could have a negative impact on its financial condition and ability to pursue its business strategies. There can be no assurance that the current operating plan will be achieved or that additional funding will be available on terms acceptable to the Company, or at all.
The Company does not believe the cash, cash equivalents, and restricted cash on hand as of March 31, 2023 of $1.6 million will be sufficient to fund its operations and capital expenditure requirements for the next twelve months from the date the condensed consolidated financial statements are issued. The Company will be required to raise additional capital to continue to fund its operations. Such funding may not be available on acceptable terms, or at all. If the Company is unable to access additional funds when needed, it may not be able to continue operations or the Company may be required to delay, scale back or eliminate some or all of its ongoing research and development efforts and other operations. The Company’s ability to access capital when needed is not assured and, if not achieved on a timely basis, will materially harm its business, financial condition and results of operations. These uncertainties create substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements have been prepared on a basis which assumes that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.
Use of Estimates
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions, based on judgments considered reasonable, which affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. The Company bases its estimates and assumptions on historical experience, known trends and events and various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the valuation of derivative warrant liabilities, valuation of earn-out shares, and revenue recognition. Changes in estimates are recorded in the period in which they become known. Due to the risks and uncertainties involved in the Company’s business and evolving market conditions and, given the subjective element of the estimates and assumptions made, actual results may differ from estimated results.
Summary of Significant Accounting Policies
The significant accounting policies of the Company are set forth in Note 2, Basis of Presentation and Significant Accounting Policies, of the consolidated financial statements included in the 2022 Annual Report. During the three months ended March 31, 2023, the Company did not make any changes to its significant accounting policies.
9
Recently Issued Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial statements and disclosures.
3. Fair Value of Financial Assets and Liabilities
The following table presents the Company’s fair value hierarchy for its liabilities, which are measured at fair value on a recurring basis as of March 31, 2023:
|
|
Fair Value Measurements at March 31, 2023 Using: |
|
|||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative warrant liabilities |
|
$ |
— |
|
|
$ |
250,745 |
|
|
$ |
— |
|
|
$ |
250,745 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Fair Value Measurements at December 31, 2022 Using: |
|
|||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative warrant liabilities |
|
$ |
— |
|
|
$ |
277,507 |
|
|
$ |
— |
|
|
$ |
277,507 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
There were no assets for which fair value was required to be disclosed as of March 31, 2023 or December 31, 2022. During the three months ended March 31, 2023, there were no transfers between Level 1, Level 2 and Level 3.
4. Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following:
|
|
March 31, |
|
|
December 31, |
|
||
Prepaid insurance |
|
$ |
535,098 |
|
|
$ |
913,611 |
|
Contract assets |
|
|
248,635 |
|
|
|
— |
|
Other |
|
|
85,051 |
|
|
|
72,888 |
|
Prepaid expenses and other current assets |
|
$ |
868,784 |
|
|
$ |
986,499 |
|
5. Property and Equipment, Net
Property and equipment, net consisted of the following:
|
|
March 31, |
|
|
December 31, |
|
||
Lab equipment |
|
$ |
676,010 |
|
|
$ |
587,650 |
|
Leasehold improvements |
|
|
36,149 |
|
|
|
36,149 |
|
Computer equipment |
|
|
35,002 |
|
|
|
32,178 |
|
Other equipment |
|
|
9,411 |
|
|
|
9,411 |
|
Construction in progress |
|
|
2,825 |
|
|
|
88,359 |
|
|
|
|
759,397 |
|
|
|
753,747 |
|
Less accumulated depreciation |
|
|
(524,821 |
) |
|
|
(496,561 |
) |
Property and equipment, net |
|
$ |
234,576 |
|
|
$ |
257,186 |
|
Depreciation expense for the three months ended March 31, 2023 and 2022 was $28 thousand and $25 thousand, respectively.
10
6. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:
|
|
March 31, |
|
|
December 31, |
|
||
Accrued bonus |
|
$ |
882,485 |
|
|
$ |
767,093 |
|
Professional fees |
|
|
274,766 |
|
|
|
282,454 |
|
Accrued vacation |
|
|
30,814 |
|
|
|
21,194 |
|
Other |
|
|
177,269 |
|
|
|
225,023 |
|
Accrued expenses and other current liabilities |
|
$ |
1,365,334 |
|
|
$ |
1,295,764 |
|
7. Insurance Premium Financing
In May 2022, the Company entered into a finance agreement with First Insurance Funding in order to fund a portion of its insurance policies. The amount financed was $1.5 million and incurred interest at a rate of 4.00%. The Company was required to make monthly payments of $154 thousand through March 2023. There is no outstanding balance as of March 31, 2023.
8. Convertible Preferred Stock
As of March 31, 2023, the Company’s amended and restated certificate of incorporation (the “Articles”) provides for a class of authorized stock known as preferred stock, consisting of 1,000,000 shares, $0.0001 par value per share, issuable from time to time in one or more series. In connection with the Transaction, a certificate of designation was filed to designate and authorize the issuance of up to 4,305 shares of Series A Convertible Preferred Stock, par value $0.0001 per share (“Series A Preferred Stock”).
Convertible preferred stock consisted of the following as of March 31, 2023:
|
|
Par Value |
|
|
Shares Authorized |
|
|
Shares Issued and |
|
|
Carrying Value |
|
|
Liquidation |
|
|
Common Stock |
|
||||||
Series A Preferred Stock |
|
$ |
0.0001 |
|
|
|
4,305 |
|
|
|
4,305 |
|
|
$ |
4,604,526 |
|
|
$ |
4,604,526 |
|
|
|
342,754 |
|
In May 2022, the Company issued 4,305 shares of Series A Preferred Stock. The Series A Preferred Stock was issued in connection with the Transaction and the Settlement and Release Agreement (“Settlement Agreement”) in settlement of $4.3 million of advisory fees owed to Maxim Group LLC (“Maxim”) with an original purchase price of $1,000 per share (the “Series A Original Purchase Price”). The Company incurred $162 thousand of issuance costs in connection with the Series A Preferred Stock.
The holders of Series A Preferred Stock shall be entitled to receive, prior and in preference to the declaration or payment of any dividend on any other currently-outstanding capital stock, dividends when, as and if declared by the board of directors, payable quarterly on January 1, April 1, July 1 and October 1 of each calendar year (each date a “Series A Quarterly Dividend Payment Date”), commencing on and including July 1, 2022, which dividends shall be paid in cash at a rate of 8.0% per annum on the Series A Original Purchase Price for the first six Series A Quarterly Dividend Payment Dates, which shall increase by 2% per annum from and after each successive Series A Quarterly Dividend Payment Date, up to a maximum of 18%. Such dividends shall cumulate quarterly at the Series A Dividend Rate if not declared and paid on a Series A Quarterly Dividend Payment Date. As of March 31, 2023, no cash dividends have been declared or paid and the Company has $300 thousand of cumulative dividends in arrears.
As the preferred stock is considered to be contingently redeemable, the preferred stock has been classified outside of permanent equity. Since the contingent redemption is considered probable, the Series A Preferred Stock will be accreted to its redemption value at each reporting date. The Company recorded accretion of $87 thousand during the three months ended March 31, 2023, which is considered a deemed dividend.
9. Common Stock
As of March 31, 2023, the authorized capital stock of the Company included 150,000,000 shares of common stock, $0.0001 par value per share. The voting, dividend and liquidation rights of the holders of the Company’s common stock are subject to and qualified by the rights, powers and preferences of the holders of the Series A Preferred Stock.
11
Each share of common stock entitles the holder to one vote, together with the holders of the preferred stock on an as converted to common stock basis, on all matters submitted to the stockholders for a vote. Common stockholders are entitled to receive dividends, as may be declared by the board of directors, if any, subject to the preferential dividend rights of the preferred stock. Through March 31, 2023, no cash dividends have been declared or paid.
As of March 31, 2023, the Company has reserved the following shares of common stock for future issuance:
Exercise of outstanding stock options |
|
|
2,516,734 |
|
Available for issuance under equity compensation plans |
|
|
487,473 |
|
Exercise of outstanding common stock warrants |
|
|
15,853,816 |
|
Conversion of Series A Preferred Stock |
|
|
1,028,262 |
|
Reserved for issuance pursuant to the Arena Purchase Agreement |
|
|
4,204,644 |
|
Total shares of authorized common stock reserved for future issuance |
|
|
24,090,929 |
|
January 2023 PIPE
On January 2, 2023, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with a select group of existing shareholders and members of the Company's board of directors (the “Purchasers”), pursuant to which the Company agreed to issue and sell to the Purchasers in a private placement (the “January 2023 PIPE”) an aggregate of 2,406,242 units (collectively, the “Units”), each Unit consisting of (i) one share of common stock, and (ii) one warrant (the “January 2023 PIPE Warrants”) to purchase two shares of common stock (the “Warrant Shares”) at an exercise price of $1.23 per Warrant Share, for an aggregate purchase price of approximately $3.6 million, consisting of $1.48 per Unit, inclusive of $0.25 per 2023 PIPE Warrant. The financing closed on January 4, 2023 (the “January 2023 PIPE”), resulting in net proceeds of $3.2 million, after deducting offering costs of $361 thousand.
The following table reconciles the gross proceeds received from the January 2023 PIPE to the statement of cash flows:
Total gross proceeds |
|
|
3,561,238 |
|
Advanced deposits received in FY22 |
|
|
(1,505,625 |
) |
Non-cash proceeds related to board compensation |
|
|
(68,125 |
) |
Issuance costs paid in cash |
|
|
(536 |
) |
FY23 cash proceeds from January 2023 PIPE, net of issuance costs |
|
|
1,986,952 |
|
Common Stock Purchase Agreement
On August 31, 2022, the Company entered into a purchase agreement (the “Arena Purchase Agreement”) with Arena Business Solutions Global SPC II, Ltd. (“Arena”), pursuant to which Arena has committed to purchase up to $15.0 million (the “Commitment Amount”) of the Company’s common stock, subject to an increase, at the Company's option, to $30.0 million of the Company's common stock (the “Additional Commitment Amount”). Under the terms and subject to the conditions of the Arena Purchase Agreement, the Company has the right, but not the obligation, to sell to Arena, and Arena is obligated to purchase up to $15.0 million of the Company’s common stock, subject to increase at the Company's option by the Additional Commitment Amount. Such sales of common stock by the Company will be subject to certain limitations, and may occur from time to time, at the Company’s sole discretion, over the approximately 36-month period commencing on the date of the Purchase Agreement, provided that the registration statement (the “Registration Statement”) covering the resale by Arena of the shares of the Company’s common stock purchased under the Purchase Agreement remains effective, and the other conditions set forth in the Arena Purchase Agreement are satisfied. The purchase price of the shares of the Company’s common stock will be equal to 96% of the simple average of the daily VWAP of the Company’s common stock immediately preceding the time of sale as computed under the Arena Purchase Agreement.
The Company determined that its right to sell shares of the Company’s common stock to Arena represents a freestanding put option under ASC 815, but has a fair value of zero, and therefore no additional accounting was required. The Company issued 296,181 shares of common stock (the “Commitment Shares”) to Arena as a commitment fee in connection with entering into the Purchase Agreement. The $650 thousand fair value of the Commitment Shares along with $379 thousand of other issuance costs related to the Purchase Agreement were recognized as a loss within other expense, net in the year ended December 31, 2022.
During the three months ended March 31, 2023, the Company sold 37,230 shares of common stock at a weighted-average price of $1.32 per share, resulting in net proceeds of $49 thousand.
12
10. Stock-Based Compensation
2021 Stock Option and Grant Plan
On April 30, 2021, Legacy Comera established the 2021 Stock Option and Grant Plan (the “2021 Plan”), which provided for the grant of incentive stock options, non-statutory stock options, restricted stock awards, unrestricted stock awards and restricted stock units. In connection with the closing of the Transaction, option awards outstanding under the 2021 Plan were exchanged for options to purchase shares of the Company's common stock (the “Exchanged Options”), with proportional adjustments to the number of shares underlying the options and the exercise price of the options approved by the compensation committee and board of directors of Legacy Comera. Other than with respect to the exercise price and the underlying number of shares of the Company's common stock, the Exchanged Options remain subject to the terms and conditions of the Legacy Comera option awards issued pursuant to the 2021 Plan. The Exchanged Options are outstanding under and count against the number of shares reserved for issuance pursuant to the 2022 Equity and Incentive Plan (the “2022 Plan”). Following the closing of the Transaction, no additional awards may be granted under the 2021 Plan.
As of March 31, 2023, there were 2,516,734 options outstanding, inclusive of 1,159,934 Exchanged Options, exercisable for 1,159,934 shares of common stock at a weighted-average exercise price of $0.59 per share.
2022 Equity and Incentive Plan
On May 10, 2022, the Company established the 2022 Plan, which provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, unrestricted stock awards, restricted stock units, stock appreciation rights, cash awards and dividend equivalent rights. Incentive stock options may be granted only to the Company’s employees, including officers. Non-statutory options, restricted stock awards, unrestricted stock awards, restricted stock units, stock appreciation rights, cash awards and dividend equivalent rights may be granted to employees, directors, consultants and key persons of the Company.
The total number of common shares authorized to be issued under the 2022 Plan was 2,059,838. The share pool will automatically increase on January 1 of each year by four percent of the number of shares of Stock outstanding on the immediately preceding December 31, or such lesser number of shares as approved by the board of directors. The pool increased by 794,368 shares on January 1, 2023. As of March 31, 2023, there were 2,516,734 options outstanding, including 150,000 options related to an employee inducement grant in November 2022 as well as the Exchanged Options, with a weighted-average exercise price of $1.62 and 487,473 shares available for future grants under the 2022 Plan.
Shares underlying awards that are forfeited, cancelled, reacquired by the Company prior to vesting, satisfied without the issuance of common stock, or are otherwise terminated under the 2022 Plan without having been fully exercised (including the Exchanged Options) will be available for future awards.
Stock Option Activity
The following table summarizes the Company’s stock option activity for the three months ended March 31, 2023:
|
|
Number of |
|
|
Weighted- |
|
|
Weighted- |
|
|
Aggregate |
|
||||
Outstanding as of December 31, 2022 |
|
|
2,152,641 |
|
|
$ |
1.67 |
|
|
9.1 |
|
|
$ |
748 |
|
|
Granted |
|
|
372,600 |
|
|
|
1.30 |
|
|
|
|
|
|
|
||
Cancelled or forfeited |
|
|
(8,507 |
) |
|
|
0.59 |
|
|
|
|
|
|
|
||
Outstanding as of March 31, 2023 |
|
|
2,516,734 |
|
|
$ |
1.62 |
|
|
|
9.0 |
|
|
$ |
358 |
|
Exercisable as of March 31, 2023 |
|
|
557,606 |
|
|
$ |
0.59 |
|
|
|
8.3 |
|
|
$ |
171 |
|
The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the underlying stock options and the estimated fair value of the Company’s common stock for those stock options that had exercise prices lower than the estimated fair value of the Company’s common stock.
The weighted-average grant date fair value of options granted during the three months ended March 31, 2023 was $0.84.
13
As of March 31, 2023, total unrecognized compensation cost related to the unvested stock options was $2.1 million, which is expected to be recognized over a weighted-average period of 3.2 years.
Stock-Based Compensation
Stock-based compensation expense was allocated as follows:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
Cost of revenue |
|
$ |
1,883 |
|
|
|||