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 June 30, 2020
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: 001-39381
PANDION THERAPEUTICS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware |
83-3015614 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
134 Coolidge Avenue Watertown, Massachusetts |
02472 |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (617) 393-5925
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
|
Trading Symbol(s) |
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Name of each exchange on which registered |
Common stock, par value $0.001 per share |
|
PAND |
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Nasdaq Global Select Market |
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, a 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 |
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☐ |
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Accelerated filer |
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☐ |
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Non-accelerated filer |
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☒ |
|
Smaller reporting company |
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☒ |
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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 August 31, 2020, the registrant had 29,519,902 shares of common stock, $0.001 par value per share, outstanding.
This Quarterly Report on Form 10-Q includes forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “continue” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
The forward-looking statements in this Quarterly Report on Form 10-Q include, among other things, statements about:
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• |
our ongoing Phase 1a clinical trial of PT101; |
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• |
the initiation, timing, progress and results of our current and future preclinical studies and clinical trials, and our research and development programs; |
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• |
our plans to develop our current and future product candidates; |
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• |
the utility of our TALON platform in identifying and discovering product candidates; |
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• |
the timing of and our ability to submit applications for and obtain and maintain regulatory approvals for our current and future product candidates; |
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• |
our expectations regarding our ability to fund our operating expenses and capital expenditure requirements with our cash and cash equivalents; |
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• |
the potential advantages of our current and future product candidates; |
|
• |
the rate and degree of market acceptance and clinical utility of our products, if approved; |
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• |
our estimates regarding the potential market opportunity for our current and future product candidates; |
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• |
our commercialization, marketing and manufacturing capabilities and strategy; |
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• |
our intellectual property position; |
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• |
our ability to identify additional products, product candidates or technologies with significant commercial potential that are consistent with our commercial objectives; |
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• |
our estimates regarding expenses, future revenue, timing of any future revenue, capital requirements and needs for additional financing; |
|
• |
the impact of government laws and regulations; |
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• |
our competitive position; |
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• |
developments relating to our competitors and our industry; |
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• |
our ability to maintain and establish collaborations or obtain additional funding; |
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• |
the potential direct or indirect impact of the COVID-19 pandemic on our business, operations, and the markets and communities in which we and our partners, collaborators, vendors and customers operate; and |
|
• |
our expectations regarding the time during which we will be an emerging growth company under the JOBS Act. |
We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q, particularly in the “Risk Factors” section, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures or investments we may make or enter into.
i
You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to our other filings with the SEC completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this Quarterly Report on Form 10-Q are made as of the date of this Quarterly Report on Form 10-Q, and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
BASIS OF PRESENTATION
As used in this Quarterly Report on Form 10-Q, unless the context otherwise requires, references to “we,” “us,” “our,” the “Company,” “Pandion” and similar references refer: (1) following the consummation of our conversion to a Delaware corporation on July 16, 2020 in connection with our initial public offering, to Pandion Therapeutics, Inc., and (2) prior to the completion of such conversion, to Pandion Therapeutics Holdco LLC. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Corporate Conversion” in this Quarterly Report on Form 10-Q for further information.
ii
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Page |
PART I. |
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Item 1. |
1 |
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1 |
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2 |
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Condensed Consolidated Statements of Redeemable Convertible Preferred Shares and Members’ Deficit |
3 |
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5 |
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|
Notes to Unaudited Condensed Consolidated Financial Statements |
6 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
17 |
Item 3. |
31 |
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Item 4. |
31 |
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PART II. |
32 |
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Item 1. |
32 |
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Item 1A. |
32 |
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Item 2. |
79 |
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Item 6. |
81 |
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82 |
iii
PANDION THERAPEUTICS HOLDCO LLC
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
|
|
June 30, 2020 |
|
|
December 31, 2019 |
|
||
|
|
(unaudited) |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
105,725 |
|
|
$ |
15,970 |
|
Accounts receivable |
|
|
1,318 |
|
|
|
1,035 |
|
Prepaid expenses and other current assets |
|
|
3,377 |
|
|
|
2,960 |
|
Total current assets |
|
|
110,420 |
|
|
|
19,965 |
|
Property and equipment, net |
|
|
2,592 |
|
|
|
1,054 |
|
Restricted cash |
|
|
502 |
|
|
|
— |
|
Total assets |
|
$ |
113,514 |
|
|
$ |
21,019 |
|
Liabilities and members’ deficit |
|
|
|
|
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Current liabilities: |
|
|
|
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|
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|
Accounts payable |
|
$ |
3,742 |
|
|
$ |
1,207 |
|
Accrued expenses and other current liabilities |
|
|
2,260 |
|
|
|
1,455 |
|
SAFE agreement |
|
|
6,000 |
|
|
|
— |
|
Current portion of deferred revenue |
|
|
4,748 |
|
|
|
4,365 |
|
Total current liabilities |
|
|
16,750 |
|
|
|
7,027 |
|
Deferred revenue, net of current portion |
|
|
4,582 |
|
|
|
6,053 |
|
Long-term debt, net of issuance costs |
|
|
1,815 |
|
|
|
3,676 |
|
Other long-term liabilities |
|
|
253 |
|
|
|
85 |
|
Total liabilities |
|
|
23,400 |
|
|
|
16,841 |
|
Commitments and contingencies (Note 7) |
|
|
|
|
|
|
|
|
Redeemable convertible preferred shares, no par value; 91,534,629 and 51,217,321 shares authorized at June 30, 2020 and December 31, 2019, respectively; 91,441,336 and 35,524,212 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively; liquidation value of $152,596 at June 30, 2020 |
|
|
152,596 |
|
|
|
46,967 |
|
Members’ deficit |
|
|
|
|
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|
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|
Common shares, no par value; 100,000,000 and 62,000,000 shares authorized at June 30, 2020 and December 31, 2019, respectively; 1,237,639 shares issued at June 30, 2020 and December 31, 2019; 1,195,794 and 1,110,767 shares outstanding at June 30, 2020 and December 31, 2019, respectively |
|
|
— |
|
|
|
— |
|
Incentive shares, no par value; 13,182,678 and 7,717,678 shares authorized at June 30, 2020 and December 31, 2019, respectively; 2,364,595 and 946,751 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively |
|
|
382 |
|
|
|
172 |
|
Accumulated deficit |
|
|
(62,864 |
) |
|
|
(42,961 |
) |
Total members’ deficit |
|
|
(62,482 |
) |
|
|
(42,789 |
) |
Total liabilities, redeemable convertible preferred shares and members’ deficit |
|
$ |
113,514 |
|
|
$ |
21,019 |
|
See accompanying notes to the condensed consolidated financial statements.
1
PANDION THERAPEUTICS HOLDCO LLC
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
(Unaudited)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2020 |
|
|
2019 |
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|
2020 |
|
|
2019 |
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||||
Revenue |
|
$ |
1,955 |
|
|
$ |
— |
|
|
$ |
3,956 |
|
|
$ |
— |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
8,860 |
|
|
|
4,934 |
|
|
|
15,802 |
|
|
|
10,019 |
|
General and administrative |
|
|
2,297 |
|
|
|
840 |
|
|
|
3,863 |
|
|
|
1,614 |
|
Total operating expenses |
|
|
11,157 |
|
|
|
5,774 |
|
|
|
19,665 |
|
|
|
11,633 |
|
Loss from operations |
|
|
(9,202 |
) |
|
|
(5,774 |
) |
|
|
(15,709 |
) |
|
|
(11,633 |
) |
Interest income |
|
|
4 |
|
|
|
89 |
|
|
|
45 |
|
|
|
143 |
|
Interest expense |
|
|
(39 |
) |
|
|
— |
|
|
|
(82 |
) |
|
|
— |
|
Fair value adjustments to convertible note |
|
|
— |
|
|
|
— |
|
|
|
89 |
|
|
|
— |
|
Net loss |
|
|
(9,237 |
) |
|
|
(5,685 |
) |
|
|
(15,657 |
) |
|
|
(11,490 |
) |
Change in redemption value of redeemable convertible preferred shares |
|
|
(2,712 |
) |
|
|
(982 |
) |
|
|
(4,245 |
) |
|
|
(1,936 |
) |
Net loss attributable to common shareholders |
|
|
(11,949 |
) |
|
|
(6,667 |
) |
|
|
(19,902 |
) |
|
|
(13,426 |
) |
Net loss per common share, basic and diluted |
|
$ |
(10.15 |
) |
|
$ |
(6.30 |
) |
|
$ |
(17.23 |
) |
|
$ |
(13.19 |
) |
Weighted-average number of shares outstanding used in computing net loss per common share, basic and diluted |
|
|
1,177,479 |
|
|
|
1,057,617 |
|
|
|
1,154,856 |
|
|
|
1,018,254 |
|
See accompanying notes to the condensed consolidated financial statements.
2
PANDION THERAPEUTICS HOLDCO LLC
Condensed Consolidated Statements of Redeemable Convertible Preferred Shares and Members’ Deficit (Unaudited)
(in thousands, except share amounts)
|
|
Redeemable Convertible |
|
|
|
Redeemable Convertible |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
|
Total |
|
||||||||||||
|
|
Preferred Stock |
|
|
|
Preferred Shares |
|
|
|
Common Stock |
|
|
Common Shares |
|
|
Incentive Shares |
|
|
Paid-In |
|
|
Accumulated |
|
|
Members’ |
|
||||||||||||||||||||||||||||
|
|
Shares |
|
|
Amount |
|
|
|
Shares |
|
|
Amount |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Deficit |
|
|||||||||||||
Balance, January 1, 2019 |
|
|
19,831,103 |
|
|
$ |
24,977 |
|
|
|
|
— |
|
|
$ |
— |
|
|
|
|
940,713 |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
52 |
|
|
$ |
(17,109 |
) |
|
$ |
(17,057 |
) |
Reorganization |
|
|
(19,831,103 |
) |
|
|
(24,977 |
) |
|
|
|
19,831,103 |
|
|
|
24,977 |
|
|
|
|
(940,713 |
) |
|
|
— |
|
|
|
940,713 |
|
|
|
— |
|
|
|
— |
|
|
|
52 |
|
|
|
(52 |
) |
|
|
— |
|
|
|
— |
|
Issuance of Series A redeemable convertible preferred shares, net of issuance costs of $34 |
|
|
— |
|
|
|
— |
|
|
|
|
15,693,109 |
|
|
|
17,966 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Accretion of redeemable convertible preferred shares to redemption value |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
954 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(954 |
) |
|
|
(954 |
) |
Issuance of incentive shares |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
230,968 |
|
|
|
9 |
|
|
|
— |
|
|
|
— |
|
|
|
9 |
|
Vesting of restricted common shares |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
79,283 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,805 |
) |
|
|
(5,805 |
) |
Balance, March 31, 2019 |
|
|
— |
|
|
$ |
— |
|
|
|
|
35,524,212 |
|
|
$ |
43,897 |
|
|
|
|
— |
|
|
$ |
— |
|
|
|
1,019,996 |
|
|
$ |
— |
|
|
|
230,968 |
|
|
$ |
61 |
|
|
$ |
— |
|
|
$ |
(23,868 |
) |
|
$ |
(23,807 |
) |
Accretion of redeemable convertible preferred shares to redemption value |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
982 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(982 |
) |
|
|
(982 |
) |
Issuance of incentive shares |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
66,532 |
|
|
|
11 |
|
|
|
— |
|
|
|
— |
|
|
|
11 |
|
Vesting of restricted common shares |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
79,283 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,685 |
) |
|
|
(5,685 |
) |
Balance, June 30, 2019 |
|
|
— |
|
|
$ |
— |
|
|
|
|
35,524,212 |
|
|
$ |
44,879 |
|
|
|
|
— |
|
|
$ |
— |
|
|
|
1,099,279 |
|
|
$ |
— |
|
|
|
297,500 |
|
|
$ |
72 |
|
|
$ |
— |
|
|
$ |
(30,535 |
) |
|
$ |
(30,463 |
) |
3
PANDION THERAPEUTICS HOLDCO LLC
Condensed Consolidated Statements of Redeemable Convertible Preferred Shares and Members’ Deficit (Unaudited)
(in thousands, except share amounts)
|
|
Redeemable Convertible |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
||||||
|
|
Preferred Shares |
|
|
|
Common Shares |
|
|
Incentive Shares |
|
|
Accumulated |
|
|
Members’ |
|
|||||||||||||||||
|
|
Shares |
|
|
Amount |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Deficit |
|
|
Deficit |
|
||||||||
Balance, January 1, 2020 |
|
|
35,524,212 |
|
|
$ |
46,967 |
|
|
|
|
1,110,767 |
|
|
$ |
— |
|
|
|
946,751 |
|
|
$ |
172 |
|
|
$ |
(42,961 |
) |
|
$ |
(42,789 |
) |
Issuance of Series A redeemable convertible preferred shares, net of issuance costs of $20 |
|
|
15,693,109 |
|
|
|
17,980 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Issuance of Series A Prime redeemable convertible preferred shares on conversion of JDRF note |
|
|
948,225 |
|
|
|
1,811 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Issuance of Series B redeemable convertible preferred shares, net of issuance costs of $271 |
|
|
19,158,922 |
|
|
|
39,728 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Accretion of redeemable convertible preferred shares to redemption value |
|
|
— |
|
|
|
1,534 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,534 |
) |
|
|
(1,534 |
) |
Issuance of incentive shares |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
60 |
|
|
|
— |
|
|
|
60 |
|
Vesting of restricted common shares |
|
|
— |
|
|
|
— |
|
|
|
|
54,770 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(6,420 |
) |
|
|
(6,420 |
) |
Balance, March 31, 2020 |
|
|
71,324,468 |
|
|
$ |
108,020 |
|
|
|
|
1,165,537 |
|
|
$ |
— |
|
|
|
946,751 |
|
|
$ |
232 |
|
|
$ |
(50,915 |
) |
|
$ |
(50,683 |
) |
Issuance of Series B redeemable convertible preferred shares, net of issuance costs of $136 |
|
|
20,116,868 |
|
|
|
41,864 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Accretion of redeemable convertible preferred shares to redemption value |
|
|
— |
|
|
|
2,712 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,712 |
) |
|
|
(2,712 |
) |
Issuance of incentive shares |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
1,417,844 |
|
|
|
150 |
|
|
|
— |
|
|
|
150 |
|
Vesting of restricted common shares |
|
|
— |
|
|
|
— |
|
|
|
|
30,257 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(9,237 |
) |
|
|
(9,237 |
) |
Balance, June 30, 2020 |
|
|
91,441,336 |
|
|
$ |
152,596 |
|
|
|
|
1,195,794 |
|
|
$ |
— |
|
|
|
2,364,595 |
|
|
$ |
382 |
|
|
$ |
(62,864 |
) |
|
$ |
(62,482 |
) |
See accompanying notes to the condensed consolidated financial statements.
4
PANDION THERAPEUTICS HOLDCO LLC
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
|
|
Six Months Ended June 30, |
|
|||||
|
|
2020 |
|
|
2019 |
|
||
Cash flows from operating activities |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(15,657 |
) |
|
$ |
(11,490 |
) |
Adjustment to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation expense |
|
|
171 |
|
|
|
112 |
|
Equity-based compensation expense |
|
|
210 |
|
|
|
20 |
|
Fair value adjustments on convertible notes |
|
|
(89 |
) |
|
|
— |
|
Noncash interest expense |
|
|
39 |
|
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(283 |
) |
|
|
— |
|
Prepaid expenses and other current assets |
|
|
132 |
|
|
|
518 |
|
Accounts payable |
|
|
1,630 |
|
|
|
103 |
|
Accrued expenses and other current liabilities |
|
|
847 |
|
|
|
(886 |
) |
Deferred revenue |
|
|
(1,088 |
) |
|
|
— |
|
Net cash used in operating activities |
|
|
(14,088 |
) |
|
|
(11,623 |
) |
Cash flows from investing activities |
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(1,228 |
) |
|
|
(437 |
) |
Net cash used in investing activities |
|
|
(1,228 |
) |
|
|
(437 |
) |
Cash flows from financing activities |
|
|
|
|
|
|
|
|
Proceeds from simple agreement for future equity |
|
|
6,000 |
|
|
|
— |
|
Proceeds from issuance of Series A redeemable convertible preferred shares |
|
|
18,000 |
|
|
|
18,000 |
|
Series A redeemable convertible preferred share issuance costs |
|
|
(20 |
) |
|
|
(33 |
) |
Proceeds from issuance of Series B redeemable convertible preferred shares |
|
|
82,000 |
|
|
|
— |
|
Series B redeemable convertible preferred share issuance costs |
|
|
(407 |
) |
|
|
— |
|
Net cash provided by financing activities |
|
|
105,573 |
|
|
|
17,967 |
|
Net increase in cash and cash equivalents |
|
|
90,257 |
|
|
|
5,907 |
|
Cash, cash equivalents and restricted cash, beginning of period |
|
|
15,970 |
|
|
|
10,172 |
|
Cash, cash equivalents and restricted cash, end of period |
|
$ |
106,227 |
|
|
$ |
16,079 |
|
Components of cash, cash equivalents, and restricted cash |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
105,725 |
|
|
|
16,079 |
|
Restricted cash |
|
|
502 |
|
|
|
— |
|
Total cash, cash equivalents, and restricted cash |
|
$ |
106,227 |
|
|
$ |
16,079 |
|
Supplemental cash flow disclosures: |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
43 |
|
|
$ |
— |
|
Supplemental disclosures of noncash activities: |
|
|
|
|
|
|
|
|
Exchange of JDRF note and accrued interest for Series A redeemable convertible preferred shares |
|
$ |
1,811 |
|
|
$ |
— |
|
Deferred offering costs not yet paid |
|
$ |
549 |
|
|
$ |
— |
|
Purchase of property and equipment included in accounts payable |
|
$ |
481 |
|
|
$ |
— |
|
See accompanying notes to the condensed consolidated financial statements.
5
PANDION THERAPEUTICS HOLDCO LLC
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Business
Pandion Therapeutics Holdco LLC is a clinical stage biopharmaceutical company developing novel therapeutics designed to address the unmet needs of patients suffering from autoimmune diseases. We have combined a network-based conceptualization of the immune system with expertise in advanced protein engineering to develop our TALON (Therapeutic Autoimmune reguLatOry proteiN) drug design and discovery platform.
As used in these financial statements, unless the context otherwise requires, references to the “company”, “we,” “us,” and “our” refer to Pandion Therapeutics Holdco LLC, its wholly owned subsidiaries Pandion Therapeutics, Inc. and Pandion Program Co 1, Inc., and Pandion Securities Corp., a subsidiary of Pandion Therapeutics, Inc.
Pandion Therapeutics, Inc. was incorporated on September 19, 2016 as a Delaware corporation. We began operations in January 2017. Our principal offices are located in Watertown, Massachusetts. On December 31, 2018, Pandion Therapeutics Holdco LLC was formed in the state of Delaware. On January 1, 2019, we completed a series of transactions in which Pandion Therapeutics, Inc. became a direct wholly owned subsidiary of Pandion Therapeutics Holdco LLC and all outstanding equity securities of Pandion Therapeutics, Inc. were canceled and converted on a one-for-one basis into equity securities of Pandion Therapeutics Holdco LLC, which we refer to as the Restructuring. In accordance with the terms of the LLC Operating Agreement, and on the effective date of the Restructuring;
|
• |
each share of Pandion Therapeutics, Inc. common stock issued and outstanding immediately prior to the effective date of the Restructuring was converted into one common share of Pandion Therapeutics Holdco LLC; |
|
• |
each share of Pandion Therapeutics, Inc. Series A redeemable convertible preferred stock issued and outstanding immediately prior to the effective date of the Restructuring was converted into one Series A redeemable convertible preferred share of Pandion Therapeutics Holdco LLC; |
|
• |
all outstanding stock options to purchase shares of Pandion Therapeutics, Inc. common stock were cancelled and replaced with the same number of incentive shares in Pandion Therapeutics Holdco LLC; |
|
• |
each warrant issued by Pandion Therapeutics, Inc. that was outstanding immediately prior to the effective date of the Restructuring was cancelled and an equivalent number of incentive shares of Pandion Therapeutics Holdco LLC were issued; and |
|
• |
Pandion Therapeutics, Inc. became a wholly owned subsidiary of Pandion Therapeutics Holdco LLC. |
We determined that the Restructuring lacked economic substance and was therefore accounted for in a manner consistent with a common control transaction. Similarly, as there was no change in fair value between shareholders, individually or as a class, we determined that the exchange of shares occurring in the Restructuring should be accounted for as a modification of the equity securities and presented as a reclassification of the components of equity.
Initial Public Offering and Corporate Conversion
As described in Note 14, in July 2020 we completed our initial public offering. In contemplation of the initial public offering, on July 10, 2020, our wholly owned subsidiary Pandion Therapeutics, Inc. changed its name to Pandion Operations, Inc. and we subsequently engaged in the following transactions, which we refer to collectively as the Conversion:
|
• |
we converted from a Delaware limited liability company to a Delaware corporation by filing a certificate of conversion with the Secretary of State of the State of Delaware; and |
|
• |
we changed our name from Pandion Therapeutics Holdco LLC to Pandion Therapeutics, Inc. |
As part of the Conversion:
|
• |
holders of Series A preferred shares of Pandion Therapeutics Holdco LLC received one share of Series A preferred stock of Pandion Therapeutics, Inc. for each Series A preferred share held immediately prior to the Conversion; |
|
• |
holders of Series A prime preferred shares of Pandion Therapeutics Holdco LLC received one share of Series A prime preferred stock of Pandion Therapeutics, Inc. for each Series A prime preferred share held immediately prior to the Conversion; |
6
PANDION THERAPEUTICS HOLDCO LLC
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
|
• |
holders of common shares of Pandion Therapeutics Holdco LLC received one share of common stock of Pandion Therapeutics, Inc. for each common share held immediately prior to the Conversion; |
|
• |
holders of outstanding incentive shares in Pandion Therapeutics Holdco LLC, all of which were intended to constitute profits interests for U.S. federal income tax purposes, received a number of shares of common stock of Pandion Therapeutics, Inc. based upon a conversion price determined by our board of directors immediately prior to the Conversion. Of the shares of common stock issued in respect of incentive shares, 1,368,515 continue to be subject to vesting in accordance with the vesting schedule applicable to such incentive shares. Based on the determined fair value of $18.00 per common share, the incentive shares converted into an aggregate of 1,504,586 shares of our common stock, and we granted options to purchase an aggregate of 859,147 shares of our common stock. |
Following the Conversion, Pandion Therapeutics, Inc. held all property and assets of Pandion Therapeutics Holdco LLC and assumed all of the debts and obligations of Pandion Therapeutics Holdco LLC. On the effective date of the Conversion, the members of the board of directors of Pandion Therapeutics Holdco LLC became the members of the board of directors of Pandion Therapeutics, Inc. and the officers of Pandion Therapeutics Holdco LLC became the officers of Pandion Therapeutics, Inc.
Liquidity
Since inception, we have devoted substantially all our efforts to business planning, research and development, recruiting management and technical staff, and raising capital and have financed our operations primarily through the issuance of redeemable convertible preferred shares, debt financings, a simple agreement for future equity, or SAFE, and a collaboration.
We are subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if our product development efforts are successful, it is uncertain when, if ever, we will realize significant revenue from product sales.
We have evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date the