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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________

Form 10-Q

_____________________

(Mark One)

þ   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2022

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: 000-29959

_______________

Cassava Sciences, Inc.

(Exact name of registrant as specified in its charter)

Delaware

91-1911336

(State or other jurisdiction of

(I.R.S.  Employer

incorporation or organization)

Identification Number)

7801 N. Capital of Texas Highway, Suite 260, Austin, TX 78731

(512) 501-2444

(Address, including zip code, of registrant’s principal executive offices and

telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

0

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.001 par value

 

SAVA

 

Nasdaq Capital 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 þ   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 þ   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 þ

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 þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, $0.001 par value

40,097,917

Shares Outstanding as of August 2, 2022

 

1


CASSAVA SCIENCES, INC.

TABLE OF CONTENTS

Page No.

PART I.

FINANCIAL INFORMATION

Item 1.

Financial Statements

Condensed Consolidated Balance Sheets – June 30, 2022 and December 31, 2021

3

Condensed Consolidated Statements of Operations – Three and Six Months Ended June 30, 2022 and 2021

4

Condensed Consolidated Statements of Changes in Stockholders’ Equity - Three and Six Months Ended June 30, 2022 and 2021

5

Condensed Consolidated Statements of Cash Flows – Six Months Ended June 30, 2022 and 2021

6

Notes to Condensed Consolidated Financial Statements

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

17

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

35

Item 4.

Controls and Procedures

35

PART II.

OTHER INFORMATION

Item 1.

Legal Proceedings

35

Item 1A

Risk Factors

36

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

36

Item 3.

Defaults Upon Senior Securities

36

Item 4.

Mine Safety Disclosures

37

Item 5.

Other Information

37

Item 6.

Exhibits

38

Signatures

39

 

2


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CASSAVA SCIENCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands, except share and par value data)

June 30,

December 31,

2022

2021

ASSETS

Current assets:

Cash and cash equivalents

$

197,232

$

233,437

Prepaid expenses and other current assets

6,969

11,045

Total current assets

204,201

244,482

Operating lease right-of-use assets

166

210

Property and equipment, net

22,155

20,616

Intangible assets, net

859

1,075

Other assets

399

Total assets

$

227,381

$

266,782

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

4,758

$

7,126

Accrued development expense

3,318

2,803

Accrued compensation and benefits

176

1,877

Operating lease liabilities, current

100

97

Other current liabilities

370

631

Total current liabilities

8,722

12,534

Operating lease liabilities, non-current

88

139

Other non-current liabilities

201

194

Total liabilities

9,011

12,867

Commitments and contingencies (Notes 9, 10 and 11)

 

 

Stockholders' equity:

Preferred stock, $0.001 par value; 10,000,000 shares authorized, none issued and outstanding

Common stock, $0.001 par value; 120,000,000 shares authorized; 40,097,917 and 40,016,792 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

40

40

Additional paid-in capital

462,491

461,181

Accumulated deficit

(244,161)

(207,306)

Total stockholders' equity

218,370

253,915

Total liabilities and stockholders' equity

$

227,381

$

266,782

See accompanying notes to condensed consolidated financial statements.


3


 

Enstivity

CASSAVA SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)

Three months ended

Six months ended

June 30,

June 30,

2022

2021

2022

2021

Operating expenses:

Research and development, net of grant reimbursement

$

16,948

$

3,901

$

31,854

$

6,430

General and administrative

2,969

1,237

5,884

2,241

Total operating expenses

19,917

5,138

37,738

8,671

Operating loss

(19,917)

(5,138)

(37,738)

(8,671)

Interest income

314

13

345

20

Other income, net

275

538

Net loss

$

(19,328)

$

(5,125)

$

(36,855)

$

(8,651)

Net loss per share, basic and diluted

$

(0.48)

$

(0.13)

$

(0.92)

$

(0.22)

Shares used in computing net loss per share, basic and diluted

40,015

39,953

39,989

38,843

See accompanying notes to condensed consolidated financial statements.


4


 

CASSAVA SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited, in thousands, except share data)

Total

Common stock

Additional

Accumulated

stockholders'

Shares

Par value

paid-in capital

deficit

equity

Balance at December 31, 2020

35,237,987

$

35

$

267,086

$

(174,921)

$

92,200

Stock-based compensation for:

Stock options for employees

249

249

Stock options for non-employees

1

1

Issuance of common stock pursuant to exercise of stock options

554,019

1

691

692

Issuance of common stock pursuant to exercise of warrants

135,015

1,746

1,746

Common stock issued in conjunction with registered direct offering, net of issuance costs

4,081,633

4

189,821

189,825

Net loss

(3,526)

(3,526)

Balance at March 31, 2021

40,008,654

$

40

$

459,594

$

(178,447)

$

281,187

Stock-based compensation for:

Stock options for employees

410

410

Stock options for non-employees

5

5

Issuance of common stock pursuant to exercise of stock options

3,240

3

3

Net loss

(5,125)

(5,125)

Balance at June 30, 2021

40,011,894

$

40

$

460,012

$

(183,572)

$

276,480

Balance at December 31, 2021

40,016,792

$

40

$

461,181

$

(207,306)

$

253,915

Stock-based compensation for:

Stock options for employees

471

471

Stock options for non-employees

24

24

Issuance of common stock pursuant to exercise of stock options

14,488

211

211

Net loss

(17,527)

(17,527)

Balance at March 31, 2022

40,031,280

$

40

$

461,887

$

(224,833)

$

237,094

Stock-based compensation for:

Stock options for employees

462

462

Stock options for non-employees

23

23

Issuance of common stock pursuant to exercise of stock options

66,637

119

119

Net loss

(19,328)

(19,328)

Balance at June 30, 2022

40,097,917

$

40

$

462,491

$

(244,161)

$

218,370

 

See accompanying notes to condensed consolidated financial statements.

5


 

CASSAVA SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

Six months ended June 30,

2022

2021

Cash flows from operating activities:

Net loss

$

(36,855)

$

(8,651)

Adjustments to reconcile net loss to net cash used in operating activities:

Stock-based compensation

980

665

Depreciation

352

9

Amortization of intangible assets

260

Changes in operating assets and liabilities:

Prepaid and other assets

4,431

(2,236)

Operating lease right-of-use assets and liabilities

(4)

31

Accounts payable

(2,368)

1,001

Accrued development expense

515

1,743

Accrued compensation and benefits

(1,701)

37

Other liabilities

(254)

(44)

Net cash used in operating activities

(34,644)

(7,445)

Cash flows from investing activities:

Purchase of property and equipment

(1,891)

(73)

Net cash used in investing activities

(1,891)

(73)

Cash flows from financing activities:

Proceeds from issuance of common stock upon exercise of stock options

330

1,749

Proceeds from issuance of common stock upon exercise of common stock warrants

692

Proceeds from common stock offering, net of issuance costs

189,825

Net cash provided by financing activities

330

192,266

Net (decrease) increase in cash and cash equivalents

(36,205)

184,748

Cash and cash equivalents at beginning of period

233,437

93,506

Cash and cash equivalents at end of period

$

197,232

$

278,254

See accompanying notes to condensed consolidated financial statements.


6


Cassava Sciences, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1. General and Liquidity

Cassava Sciences, Inc. and its wholly-owned subsidiary (collectively referred to as the “Company”) discover and develop proprietary pharmaceutical product candidates that may offer significant improvements to patients and healthcare professionals. The Company generally focuses its discovery and product development efforts on disorders of the nervous system.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. All intercompany transactions and balances have been eliminated in consolidation. Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management of the Company, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for any other interim period or for the year 2022. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.