10-Q 1 hlvx-20220630.htm 10-Q 10-Q
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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, 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: 001-41365

 

HILLEVAX, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

85-0545060

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

75 State Street, Suite 100 - #9995

Boston, Massachusetts

02109

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (617) 213-5054

 

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, $0.0001 par value per share

 

HLVX

 

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, 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 July 31, 2022, the registrant had 33,427,209 shares of common stock, $0.0001 par value per share, outstanding.

 

 

 

 


 

Table of Contents

 

 

 

Page

 

 

 

PART I.

FINANCIAL INFORMATION

1

 

 

 

Item 1.

Financial Statements (Unaudited)

1

 

Condensed Consolidated Balance Sheets

1

 

Condensed Consolidated Statements of Operations

2

 

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

3

 

Condensed Consolidated Statements of Cash Flows

5

 

Notes to Condensed Consolidated Financial Statements

6

Item 2.

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

19

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

28

Item 4.

Controls and Procedures

29

 

 

 

PART II.

OTHER INFORMATION

30

 

 

 

Item 1.

Legal Proceedings

30

Item 1A.

Risk Factors

30

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

31

Item 3.

Defaults Upon Senior Securities

31

Item 4.

Mine Safety Disclosures

31

Item 5.

Other Information

31

Item 6.

Exhibits

32

Signatures

33

 

 

i


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

HilleVax, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and par value data)

(unaudited)

 

 

 

June 30,
2022

 

 

December 31,
2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

314,612

 

 

$

124,566

 

Prepaid expenses and other current assets (includes related party amounts
  of $
692 and $0, respectively)

 

 

4,893

 

 

 

141

 

Total current assets

 

 

319,505

 

 

 

124,707

 

Property and equipment, net

 

 

 

 

 

42

 

Operating lease right-of-use assets

 

 

20,075

 

 

 

189

 

Restricted cash

 

 

1,631

 

 

 

 

Other assets

 

 

21

 

 

 

2,221

 

Total assets

 

$

341,232

 

 

$

127,159

 

Liabilities and Stockholders’ Equity (Deficit)

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable (includes related party amounts of $1,645 and $22,
   respectively)

 

$

6,033

 

 

$

1,024

 

Accrued expenses (includes related party amounts of $757 and $4,911,
   respectively)

 

 

6,419

 

 

 

9,164

 

Accrued interest (includes related party amounts of $0 and $723,
   respectively)

 

 

23

 

 

 

2,821

 

Convertible promissory notes payable at fair value (includes related party
   amounts of $
0 and $40,580, respectively)

 

 

 

 

 

158,276

 

Current portion of operating lease liability

 

 

35

 

 

 

32

 

Warrant liabilities - related party

 

 

 

 

 

56,445

 

Total current liabilities

 

 

12,510

 

 

 

227,762

 

Operating lease liability, net of current portion

 

 

20,790

 

 

 

153

 

Long-term debt, net of debt discount

 

 

4,697

 

 

 

 

Other long-term liabilities

 

 

81

 

 

 

1

 

Total liabilities

 

 

38,078

 

 

 

227,916

 

Commitments and contingencies (Note 3)

 

 

 

 

 

 

Stockholders’ equity (deficit):

 

 

 

 

 

 

Preferred stock, $0.0001 par value; authorized shares— 50,000,000 and
   
0 at June 30, 2022 and December 31, 2021, respectively; no shares issued
   and outstanding at June 30, 2022 and December 31, 2021

 

 

 

 

 

 

Common stock, $0.0001 par value; authorized shares— 500,000,000 and
   
50,000,000 at June 30, 2022 and December 31, 2021, respectively; issued
   shares—
33,427,209 and 9,225,321 at June 30, 2022 and December 31,
   2021, respectively; outstanding shares—
31,311,387 and 6,599,886 at
   June 30, 2022 and December 31, 2021, respectively

 

 

3

 

 

 

1

 

Additional paid-in capital

 

 

530,151

 

 

 

4,426

 

Accumulated deficit

 

 

(227,000

)

 

 

(105,184

)

Total stockholders’ equity (deficit)

 

 

303,154

 

 

 

(100,757

)

Total liabilities and stockholders’ equity (deficit)

 

$

341,232

 

 

$

127,159

 

 

See accompanying notes.

1


 

HilleVax, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development (includes related party
   amounts of $
172, $0, $1,594 and $15, respectively)

 

$

8,826

 

 

$

460

 

 

$

15,037

 

 

$

727

 

In-process research and development

 

 

 

 

 

 

 

 

2,500

 

 

 

 

General and administrative (includes related party
   amounts of $
8, $219, $34 and $384, respectively)

 

 

3,982

 

 

 

753

 

 

 

6,585

 

 

 

1,951

 

Total operating expenses

 

 

12,808

 

 

 

1,213

 

 

 

24,122

 

 

 

2,678

 

Loss from operations

 

 

(12,808

)

 

 

(1,213

)

 

 

(24,122

)

 

 

(2,678

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

334

 

 

 

 

 

 

340

 

 

 

 

Interest expense (includes related party amounts
   of $
188, $8, $717 and $17, respectively)

 

 

(888

)

 

 

(8

)

 

 

(2,952

)

 

 

(17

)

Change in fair value of convertible promissory notes (includes related party amounts of $8,818, $444, $13,196 and $517, respectively)

 

 

(34,396

)

 

 

(444

)

 

 

(51,469

)

 

 

(517

)

Change in fair value of warrant liabilities - related party

 

 

(6,151

)

 

 

 

 

 

(43,575

)

 

 

 

Other income (expense)

 

 

(20

)

 

 

(2

)

 

 

(38

)

 

 

(1

)

Total other income (expense)

 

 

(41,121

)

 

 

(454

)

 

 

(97,694

)

 

 

(535

)

Net loss

 

$

(53,929

)

 

$

(1,667

)

 

$

(121,816

)

 

$

(3,213

)

Net loss per share, basic and diluted

 

$

(2.03

)

 

$

(0.34

)

 

$

(7.30

)

 

$

(0.66

)

Weighted-average shares of common stock outstanding, basic and diluted

 

 

26,512,881

 

 

 

4,935,738

 

 

 

16,685,372

 

 

 

4,869,690

 

 

See accompanying notes.

2


 

HilleVax, Inc.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(in thousands, except share data)

(unaudited)

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional
Paid-in
Capital

 

 

Accumulated
Deficit

 

 

Total
Stockholders’
Equity (Deficit)

 

 

Balance at March 31, 2022

 

 

6,897,450

 

 

$

1

 

 

$

4,698

 

 

$

(173,071

)

 

$

(168,372

)

 

Issuance of common stock in connection with initial public offering, net of issuance costs of $20,491

 

 

13,529,750

 

 

 

1

 

 

 

209,514

 

 

 

 

 

 

209,515

 

 

Conversion of August 2021 Notes and accrued interest into common shares

 

 

10,672,138

 

 

 

1

 

 

 

215,363

 

 

 

 

 

 

215,364

 

 

Conversion of Takeda Warrant liability into equity

 

 

 

 

 

 

 

 

100,020

 

 

 

 

 

 

100,020

 

 

Vesting of restricted shares

 

 

212,049

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock–based compensation

 

 

 

 

 

 

 

 

556

 

 

 

 

 

 

556

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(53,929

)

 

 

(53,929

)

 

Balance at June 30, 2022

 

 

31,311,387

 

 

$

3

 

 

$

530,151

 

 

$

(227,000

)

 

$

303,154

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at March 31, 2021

 

 

4,860,449

 

 

$

 

 

$

2

 

 

$

(4,322

)

 

$

(4,320

)

 

Vesting of restricted shares

 

 

145,772

 

 

 

 

 

 

1

 

 

 

 

 

 

1

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(1,667

)

 

 

(1,667

)

 

Balance at June 30, 2021

 

 

5,006,221

 

 

$

 

 

$

3

 

 

$

(5,989

)

 

$

(5,986

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes.

 

3


 

HilleVax, Inc.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) - (Continued)

(in thousands, except share data)

(unaudited)

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional
Paid-in
Capital

 

 

Accumulated
Deficit

 

 

Total
Stockholders’
Equity (Deficit)

 

 

Balance at December 31, 2021

 

 

6,599,886

 

 

$

1

 

 

$

4,426

 

 

$

(105,184

)

 

$

(100,757

)

 

Issuance of common stock in connection with initial public offering, net of issuance costs of $20,491

 

 

13,529,750

 

 

 

1

 

 

 

209,514

 

 

 

 

 

 

209,515

 

 

Conversion of August 2021 Notes and accrued interest into common shares

 

 

10,672,138

 

 

 

1

 

 

 

215,363

 

 

 

 

 

 

215,364

 

 

Conversion of Takeda Warrant liability into equity

 

 

 

 

 

 

 

 

100,020

 

 

 

 

 

 

100,020

 

 

Vesting of restricted shares

 

 

509,613

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock–based compensation

 

 

 

 

 

 

 

 

828

 

 

 

 

 

 

828

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(121,816

)

 

 

(121,816

)

 

Balance at June 30, 2022

 

 

31,311,387

 

 

$

3

 

 

$

530,151

 

 

$

(227,000

)

 

$

303,154

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2020

 

 

4,759,968

 

 

$

 

 

$

3

 

 

$

(2,776

)

 

$

(2,773

)

 

Issuance of common stock

 

 

1,606,815

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting restrictions placed on
   previously issued and outstanding
   common stock

 

 

(2,332,386

)

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

 

Vesting of restricted shares

 

 

971,824

 

 

 

 

 

 

1

 

 

 

 

 

 

1

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(3,213

)

 

 

(3,213

)

 

Balance at June 30, 2021

 

 

5,006,221

 

 

$

 

 

$

3

 

 

$

(5,989

)

 

$

(5,986

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes.

4


 

HilleVax, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

Six Months Ended
June 30,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(121,816

)

 

$

(3,213

)

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

 

 

 

 

 

 

Depreciation

 

 

 

 

 

1

 

Stock-based compensation

 

 

828

 

 

 

 

Change in fair value of convertible promissory notes (includes related party
   amounts of $
13,196 and $517, respectively)

 

 

51,469

 

 

 

517

 

Change in fair value of warrant liabilities - related party

 

 

43,575

 

 

 

 

Amortization of debt discount

 

 

81

 

 

 

 

Issuance of PIK interest debt

 

 

21

 

 

 

 

Acquired in-process research and development

 

 

2,500

 

 

 

 

Loss on disposal of property and equipment

 

 

42

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other current assets (includes related party
   amounts of $(
692) and $41, respectively)

 

 

(4,750

)

 

 

39

 

Accounts payable, accrued expenses and other long-term liabilities
   (includes related party amounts of $(
2,531) and $(59), respectively)

 

 

550

 

 

 

1,103

 

Accrued interest (includes related party amounts of $717 and $17,
   respectively)

 

 

2,821

 

 

 

17

 

Operating lease right-of-use assets and liabilities

 

 

754

 

 

 

 

Net cash used in operating activities

 

 

(23,925

)

 

 

(1,536

)

Cash flows from investing activities

 

 

 

 

 

 

Cash paid for purchased in-process research and development

 

 

(2,500

)

 

 

 

Purchase of property and equipment

 

 

 

 

 

(6

)

Net cash used in investing activities

 

 

(2,500

)

 

 

(6

)

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

 

 

 

1

 

Proceeds from issuance of common stock in initial public offering

 

 

230,006

 

 

 

 

Payment of initial public offering costs

 

 

(16,569

)

 

 

 

Proceeds from issuance of long-term debt, net of issuance costs

 

 

4,665

 

 

 

 

Proceeds from issuance of convertible promissory notes

 

 

 

 

 

1,750

 

Net cash provided by financing activities

 

 

218,102

 

 

 

1,751

 

Net increase in cash, cash equivalents and restricted cash

 

 

191,677

 

 

 

209

 

Cash, cash equivalents and restricted cash—beginning of period

 

 

124,566

 

 

 

457

 

Cash, cash equivalents and restricted cash—end of period

 

$

316,243

 

 

$

666

 

Supplemental disclosure of cash flow information

 

 

 

 

 

 

Cash paid for interest

 

$

30

 

 

$

 

Supplemental disclosure of noncash investing and financing activities

 

 

 

 

 

 

Operating lease

 

$

20,317

 

 

$

 

Unpaid initial public offering costs

 

$

1,724

 

 

$

 

Conversion of convertible promissory notes and accrued interest into common stock

 

$

215,364

 

 

$

 

Conversion of warrant liability into equity

 

$

100,020

 

 

$

 

Accreted final interest payment fees

 

$

70

 

 

$

 

 

 

 

 

 

 

 

 

See accompanying notes.

5


 

HilleVax, Inc.

Notes to Condensed Consolidated Financial Statements

1. Organization, Basis of Presentation and Summary of Significant Accounting Policies

Organization

HilleVax, Inc. (the “Company” or “HilleVax”) was incorporated in the state of Delaware in March 2020 under the name MokshaCo, Inc. (“MokshaCo”). On February 8, 2021, MokshaCo changed its name to HilleVax and merged with North Bridge V, Inc. (“North Bridge V”) and YamadaCo III, Inc. (“YamadaCo III”), each a Delaware corporation formed in 2019, with HilleVax being the surviving entity (the “Merger”). The Company is a biopharmaceutical company focused on developing and commercializing novel vaccines.

Forward Stock Split

On April 22, 2022, the Company effected a 1.681-for-1 forward split of shares of the Company’s common stock (the “Forward Stock Split”). The par value of the common stock was not adjusted as a result of the Forward Stock Split and the authorized shares were increased to 50,000,000 shares of common stock in connection with the Forward Stock Split. The accompanying financial statements and notes to the financial statements give retroactive effect to the Forward Stock Split for all periods presented, unless otherwise indicated.

Initial Public Offering

On May 3, 2022, the Company completed its initial public offering ("IPO") whereby it sold 13,529,750 shares of common stock at a public offering price of $17.00 per share, for net proceeds of approximately $209.5 million, after deducting underwriting discounts, commissions and offering costs of approximately $20.5 million (see Note 5).

Basis of Presentation

The Company, North Bridge V and YamadaCo III were entities under the common control of Frazier Life Sciences X, L.P. or its affiliates (“Frazier”) as a result of, among others, Frazier’s; (i) ownership of a majority of the outstanding capital stock of each of the companies, (ii) financing of each of the companies, (iii) control of board of directors of each of the companies, and (iv) management of each of the companies. As the merged entities were under common control, the financial statements prior to the Merger report the financial position, results of operations and cash flows of these merged companies. The financial statements also include, subsequent to its formation in May 2021, the accounts of HilleVax GmbH, a wholly-owned subsidiary formed in Zurich, Switzerland. The functional currency of both the Company and HilleVax GmbH is the U.S. dollar. The Company’s assets and liabilities that are not denominated in the functional currency are remeasured into U.S. dollars at foreign currency exchange rates in effect at the balance sheet date except for nonmonetary assets, which are remeasured at historical foreign currency exchange rates in effect at the date of transaction. Net realized and unrealized gains and losses from foreign currency transactions and remeasurement are reported in other income (expense), in the condensed consolidated statements of operations and were not material for the periods presented. All intercompany transactions have been eliminated in consolidation.

Liquidity and Capital Resources

From inception to June 30, 2022, the Company has devoted substantially all of its efforts to organizing and staffing the Company, business planning, raising capital, in-licensing its initial vaccine candidate, HIL-214, preparing for and managing its clinical trials of HIL-214, and providing other general and administrative support for these operations. The Company has a limited operating history, has never generated any revenue, and the sales and income potential of its business is unproven. The Company has incurred net losses and negative cash flows from operating activities since its inception and expects to continue to incur net losses into the foreseeable future as it continues the development and potential commercialization of HIL-214. From inception to June 30, 2022, the Company has funded its operations through the issuance of convertible promissory notes, commercial bank debt and the sale of common stock in its IPO which closed in May 2022.

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities that may result from the outcome of this uncertainty.

6


 

Management is required to perform a two-step analysis over the Company’s ability to continue as a going concern. Management must first evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern (Step 1). If management concludes that substantial doubt is raised, management is also required to consider whether its plans alleviate that doubt (Step 2). Management believes that it has sufficient working capital on hand to fund operations through at least the next twelve months from the date these financial statements were issued. There can be no assurance that the Company will be successful in acquiring additional funding, if needed, that the Company’s projections of its future working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years.

Unaudited Interim Financial Information

The unaudited condensed consolidated financial statements as of June 30, 2022, and for the three and six months ended June 30, 2022 and 2021, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), and with U.S. generally accepted accounting principles (“GAAP”) applicable to interim financial statements. These unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s audited financial statements and include all adjustments, consisting of only normal recurring accruals, which in the opinion of management are necessary to present fairly the Company’s financial position as of the interim date and results of operations for the interim periods presented. Interim results are not necessarily indicative of results for a full year or future periods. The condensed consolidated balance sheet data as of December 31, 2021 was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP. These unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2021, included in the Company’s prospectus filed with the SEC on April 29, 2022 pursuant to Rule 424(b) under the Securities Act of 1933, as amended.

Use of Estimates

The preparation of the Company’s unaudited condensed consolidated financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in the Company’s condensed consolidated financial statements and accompanying notes. The most significant estimates in the Company’s unaudited condensed consolidated financial statements relate to accruals for research and development expenses, and the valuation of convertible promissory notes, warrant liabilities and various other equity instruments. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results could differ materially from those estimates and assumptions.

Fair Value Option

As permitted under Accounting Standards Codification (“ASC”) 825, Financial Instruments, (“ASC 825”), the Company has elected the fair value option to account for its convertible promissory notes issued through December 31, 2021. In accordance with ASC 825, the Company recorded these convertible promissory notes at fair value with changes in fair value recorded in the condensed consolidated statements of operations. As a result of applying the fair value option, direct costs and fees related to the convertible promissory notes were recognized in earnings as incurred and not deferred. These convertible promissory notes converted to equity in connection with the Company's IPO.

Fair Value Measurements

The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or non-recurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices in active markets.

Level 2: Inputs, other than the quoted prices in active markets that are observable either directly or indirectly.

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

7


 

The carrying amounts of the Company’s financial instruments, including cash, cash equivalents and restricted cash, classified within the Level 1 designation discussed above, prepaid expenses and other current assets, accounts payable, and accrued liabilities, approximate fair value due to their short maturities. Warrant liabilities and convertible promissory notes were recorded at fair value on a recurring basis until they converted to equity in connection with the Company's IPO which closed in May 2022.

The Company has no financial assets measured at fair value on a recurring basis. None of the Company’s non-financial assets or liabilities are recorded at fair value on a non-recurring basis. No transfers between levels have occurred during the periods presented.

Liabilities measured at fair value on a recurring basis are as follows (in thousands):

 

 

 

 

 

 

Fair Value Measurements at
Reporting Date Using:

 

 

 

Total

 

 

Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)

 

 

Significant
Other
Observable
Inputs
    (Level 2)

 

 

Significant
Unobservable
Inputs
(Level 3)

 

As of June 30, 2022:

 

 

 

 

 

 

 

 

 

 

 

 

Warrant liabilities

 

$

 

 

$

 

 

$

 

 

$

 

Convertible promissory notes

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

 

 

$

 

 

$

 

 

$

 

As of December 31, 2021: