Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
FOR THE QUARTERLY PERIOD ENDED September 30, 2016
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: 0-31265
MABVAX
THERAPEUTICS HOLDINGS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
|
|
93-0987903
|
(STATE OR OTHER JURISDICTION OF
INCORPORATION
OR ORGANIZATION)
|
|
(I.R.S. EMPLOYER
IDENTIFICATION NO.)
|
11535 Sorrento Valley Road, Suite 400, San Diego, CA
92121
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES INCLUDING ZIP
CODE)
(858) 259-9405
(REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA
CODE)
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
and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted 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 and post such
files). Yes ☒
No ☐
Indicate
by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated
filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange
Act.
Large
accelerated filer
|
☐
|
Accelerated
filer
|
☐
|
|
|
|
|
Non-accelerated
filer
(Do
not check if a smaller reporting company)
|
☐
|
Smaller
reporting company
|
☒
|
Indicate
by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes ☐ No
☒
The
number of shares of common stock outstanding as of November 4, 2016
was 6,296,110.
Table of Contents
INDEX
|
|
|
Page
|
|
|
|
|
|
|
||
|
|
|
|
|
1
|
||
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
4
|
|
|
|
|
|
|
|
5
|
|
|
|
|
|
|
23
|
||
|
|
|
|
|
29
|
||
|
|
|
|
|
29
|
||
|
|
|
|
|
|
||
|
|
|
|
|
30
|
||
|
|
|
|
|
30
|
||
|
|
|
|
|
30
|
||
|
|
|
|
|
30
|
||
|
|
|
|
|
30
|
||
|
|
|
|
|
30
|
||
|
|
|
|
|
31
|
||
|
|
|
|
|
32
|
PART 1. FINANCIAL
INFORMATION
Item
1. Financial
Statements
MABVAX THERAPEUTICS HOLDINGS, INC.
Condensed Consolidated Balance
Sheets
|
September 30,
|
December 31,
|
|
2016
|
2015
|
|
(Unaudited)
|
(Note 1)
|
Assets
|
|
|
Current
assets:
|
|
|
Cash and cash equivalents
|
$6,941,213
|
$4,084,085
|
Grants
receivable
|
—
|
757,562
|
Prepaid expenses
|
485,785
|
419,751
|
Other current assets
|
10,000
|
47,586
|
Total
current assets
|
7,436,998
|
5,308,984
|
Property and equipment, net
|
665,588
|
135,486
|
Goodwill
|
6,826,003
|
6,826,003
|
Other long-term assets
|
168,597
|
126,654
|
Total
assets
|
$15,097,186
|
$12,397,127
|
Liabilities and Stockholders' Equity
|
|
|
Current
liabilities:
|
|
|
Accounts payable
|
$608,374
|
$3,002,497
|
Accrued compensation
|
640,192
|
562,755
|
Accrued clinical operations and site costs
|
666,146
|
391,041
|
Accrued lease contingency fee
|
590,504
|
590,504
|
License fee payable
|
—
|
225,000
|
Other accrued expenses
|
488,254
|
186,566
|
Interest payable
|
49,229
|
—
|
Current portion of notes payable
|
1,234,186
|
—
|
Current portion of capital leases payable
|
16,654
|
—
|
Total
current liabilities
|
4,293,539
|
4,958,363
|
Long-term
liabilities:
|
|
|
Long-term
portion of notes payable
|
3,083,971
|
—
|
Long-term portion of capital leases
|
72,498
|
—
|
Other long-term liabilities
|
133,057
|
—
|
Total
long-term liabilities
|
3,289,526
|
—
|
|
|
|
Commitments
and contingencies
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
Series D convertible preferred stock, $0.01 par value, 1,000,000
shares authorized, 132,489 and 191,490 shares issued and
outstanding, with a liquidation preference of $1,325 and $1,915 as
of September 30, 2016, and December 31, 2015,
respectively
|
1,325
|
1,915
|
Series E convertible preferred stock, $0.01 par value, 100,000
shares authorized, 33,333 shares issued and outstanding with a
liquidation preference of $333
|
333
|
333
|
Series
F convertible preferred stock, $0.01 par value, 1,559,252 shares
authorized, 665,281 shares and none issued and outstanding,
with a liquidation preference of $6,653 and none as of September
30, 2016 and December 31, 2015, respectively
|
6,653
|
—
|
Common
stock, $0.01 par value; 150,000,000 shares authorized, 6,296,110
and 3,836,631 shares issued and outstanding as of September 30,
2016 and December 31, 2015, respectively
|
62,961
|
38,366
|
Additional
paid-in capital
|
80,595,120
|
67,999,928
|
Accumulated
deficit
|
(73,152,271)
|
(60,601,778)
|
Total
stockholders' equity
|
7,514,121
|
7,438,764
|
Total
liabilities and stockholders' equity
|
$15,097,186
|
$12,397,127
|
See
Accompanying Notes to Condensed Consolidated Financial
Statements
MABVAX THERAPEUTICS HOLDINGS, INC.
Condensed Consolidated Statements of
Operations
(Unaudited)
|
Three Months Ended
|
Nine Months Ended
|
||
|
September 30,
|
September 30,
|
||
|
2016
|
2015
|
2016
|
2015
|
Revenues:
|
|
|
|
|
Grants
|
$—
|
$133,318
|
$148,054
|
$509,474
|
Total
revenues
|
—
|
133,318
|
148,054
|
509,474
|
|
|
|
|
|
Operating
costs and expenses:
|
|
|
|
|
Research and development
|
1,671,181
|
3,127,173
|
4,967,695
|
7,178,703
|
General and administrative
|
2,420,516
|
2,286,315
|
7,001,521
|
7,473,416
|
Total
operating costs and expenses
|
4,091,697
|
5,413,488
|
11,969,216
|
14,652,119
|
Loss
from operations
|
(4,091,697)
|
(5,280,170)
|
(11,821,162)
|
(14,142,645)
|
Interest
and other expense, net
|
(266,051)
|
(84)
|
(729,331)
|
(269)
|
Change
in fair value of warrant liability
|
—
|
—
|
—
|
19,807
|
Net
loss
|
$(4,357,748)
|
$(5,280,254)
|
$(12,550,493)
|
$(14,123,107)
|
Deemed
dividend on Series A-1 preferred stock
|
—
|
—
|
—
|
(9,017,512)
|
Deemed
dividend on Series A-1 warrant
|
—
|
—
|
—
|
(179,411)
|
Deemed
dividend on Series B preferred stock
|
—
|
—
|
—
|
(8,655,998)
|
Accretion
of preferred stock dividends
|
—
|
—
|
—
|
(93,234)
|
Net
loss allocable to common stockholders
|
$(4,357,748)
|
$(5,280,254)
|
$(12,550,493)
|
$(32,069,262)
|
Basic
and diluted net loss per share
|
$(0.86)
|
$(1.51)
|
$(2.87)
|
$(13.96)
|
Shares
used to calculate basic and diluted net loss per share
|
5,041,408
|
3,486,318
|
4,374,801
|
2,297,496
|
See
Accompanying Notes to Condensed Consolidated Financial
Statements
MABVAX THERAPEUTICS HOLDINGS, INC.
Condensed Consolidated Statements of Stockholders’ Equity
For the Nine Months Ended September 30, 2016
(Unaudited)
|
Series D, E and F
Convertible Preferred Stock
|
Common Stock
|
Additional
Paid-in
|
Accumulated
|
Total
Stockholders'
|
||
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Equity
|
|
|
|
|
|
|
|
|
Balance
at December 31, 2015
|
224,823
|
$2,248
|
3,836,631
|
$38,366
|
$67,999,928
|
$(60,601,778)
|
$7,438,764
|
Issuance
of warrants in connection with note payable transaction on January
15, 2016
|
—
|
—
|
—
|
—
|
607,338
|
—
|
607,338
|
Issuance
of whole in lieu of fractional shares resulting from reverse split
in August 2016
|
—
|
—
|
2,426
|
24
|
(24)
|
—
|
—
|
Issuance
of Series F convertible preferred stock, warrants and common stock
in August public offering, net of $866,410 in issuance
costs
|
665,281
|
6,653
|
1,297,038
|
12,970
|
8,552,720
|
—
|
8,572,343
|
Issuance
of additional common stock related to April 2015
financing
|
—
|
—
|
255,459
|
2,555
|
(2,555)
|
—
|
—
|
Stock
issued for services
|
—
|
—
|
35,644
|
356
|
163,644
|
—
|
164,000
|
Conversion of
Series D Preferred Stock to common stock
|
(59,001)
|
(590)
|
797,312
|
7,974
|
(7,384)
|
—
|
—
|
Stock
issued upon vesting of restricted stock units in April, July and
August of 2016, net of payroll taxes
|
—
|
—
|
71,600
|
716
|
(178,539)
|
—
|
(177,823)
|
Stock-based
compensation
|
—
|
—
|
—
|
—
|
3,459,992
|
—
|
3,459,992
|
Net
loss
|
—
|
—
|
—
|
—
|
—
|
(12,550,493)
|
(12,550,493)
|
Balance
at September 30, 2016
|
831,103
|
$8,311
|
6,296,110
|
$62,961
|
$80,595,120
|
$(73,152,271)
|
$7,514,121
|
See
Accompanying Notes to Condensed Consolidated Financial
Statements
MABVAX THERAPEUTICS HOLDINGS, INC.
Condensed Consolidated Statements of Cash
Flows
(Unaudited)
|
For the Nine
Months
Ended September 30,
|
|
|
2016
|
2015
|
Operating activities
|
|
|
Net
loss
|
$(12,550,493)
|
$(14,123,107)
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|
|
Depreciation
and amortization
|
60,058
|
15,412
|
Stock-based
compensation
|
3,459,992
|
2,966,603
|
Change
in fair value of warrants
|
—
|
(19,807)
|
Issuance
of restricted common stock for services
|
164,000
|
1,958,450
|
Amortization
and accretion related to notes payable
|
337,151
|
—
|
Increase
(decrease) in operating assets and liabilities:
|
|
|
Grants
receivable
|
757,562
|
(48,974)
|
Other
receivables
|
—
|
2,275
|
Prepaid
expenses and other
|
122,522
|
(191,619)
|
Accounts
payable
|
(2,476,130)
|
749,258
|
Accrued
clinical operations and site costs
|
275,105
|
(120,913)
|
Accrued
compensation
|
77,437
|
258,732
|
Other
accrued expenses
|
150,487
|
636,358
|
Net
cash used in operating activities
|
(9,622,309)
|
(7,917,332)
|
Investing activities
|
|
|
Purchases
of property and equipment
|
(412,498)
|
(68,279)
|
Net
cash used in investing activities
|
(412,498)
|
(68,279)
|
Financing activities
|
|
|
Cash
receipt from bank loan, net of financing costs
|
4,610,324
|
—
|
Issuances
of common stock, preferred stock and warrants, net of issuance
costs
|
8,572,343
|
11,046,348
|
Proceeds
from exercise of stock options
|
—
|
800
|
Principal
payments on short-term note
|
(106,405)
|
—
|
Principal
payments on capital lease
|
(6,504)
|
—
|
Purchase
of vested employee stock in connection with tax withholding
obligation
|
(177,823)
|
—
|
Net
cash provided by financing activities
|
12,891,935
|
11,047,148
|
Net
change in cash and cash equivalents
|
2,857,128
|
3,061,537
|
Cash
and cash equivalents at beginning of period
|
4,084,085
|
1,477,143
|
Cash
and cash equivalents at end of period
|
$6,941,213
|
$4,538,680
|
|
|
|
Supplemental disclosure:
|
|
|
Cash
paid during the period for income taxes
|
$24,626
|
$1,600
|
Supplemental disclosures of non-cash investing and financing
information:
|
|
|
Deemed
dividend on beneficial conversion feature for preferred
stock
|
$—
|
$17,852,921
|
Capital
lease in connection with purchase of equipment
|
$95,656
|
$—
|
Purchases
of property and equipment included in Accounts Payable
|
$82,006
|
$—
|
Accretion
of redemption value for Series A-1 and B convertible preferred
stock
|
—
|
93,234
|
Conversion
of Series A-1 redeemable preferred stock into common
stock
|
$—
|
$162,968
|
Conversion
of Series C preferred stock to common stock
|
$—
|
$966
|
Conversion
of Series B preferred stock to common stock
|
$—
|
$160,380
|
Conversion
of Series D preferred stock to common stock
|
$7,974
|
$467
|
Exchange
of Series A-1 preferred stock and warrants into common stock and
Series D convertible preferred stock
|
$—
|
$13,111,280
|
Exchange
of Series B preferred stock and warrants into common stock and
Series D convertible preferred stock
|
$—
|
$10,451,784
|
Fair
value of warrants issued
|
$607,338
|
$—
|
Warrants
exercised to purchase common stock on a cashless basis
|
$—
|
$12,198
|
Elimination
of warrant liability in exchange transaction
|
$—
|
$72,656
|
Financing
transaction costs not yet paid
|
$2,500
|
$586,608
|
See
Accompanying Notes to Condensed Consolidated Financial
Statements
MABVAX THERAPEUTICS HOLDINGS, INC.
Notes to Unaudited Condensed
Consolidated Financial Statements
1. Basis of Presentation
We
are a Delaware corporation, originally incorporated in 1988 under
the name Terrapin Diagnostics, Inc. in the State of Delaware, and
subsequently renamed “Telik, Inc.” in 1998, and
thereafter renamed MabVax Therapeutics Holdings, Inc.
(“MabVax Therapeutics Holdings”) in September 2014. Our
principal corporate office is located at 11535 Sorrento Valley
Road, Suite 400, San Diego, CA 92121 telephone: (858) 259-9405. On
July 8, 2014, we consummated a merger (the “Merger”)
with MabVax Therapeutics, Inc. (“MabVax Therapeutics”),
pursuant to which our subsidiary Tacoma Acquisition Corp. merged
with and into MabVax Therapeutics, with MabVax Therapeutics
surviving as our wholly owned subsidiary. This transaction is
referred to as the “Merger.” Unless the
context otherwise requires, references to “we,”
“our,” “us,” or the “Company”
in this Quarterly Report mean MabVax Therapeutics Holdings on a
condensed consolidated financial statement basis with our wholly
owned subsidiary following the Merger, MabVax Therapeutics, as
applicable. Beginning October 10, 2014, our common stock was quoted
on the OTCQB under the symbol “MBVX.” Since August 17,
2016, our common stock has been trading on The NASDAQ Capital
Market under the symbol “MBVX.”
The
balance sheet data at December 31, 2015, has been derived from
audited financial statements at that date. It does not include,
however, all of the information and notes required by accounting
principles generally accepted in the United States of America
(“GAAP”) for complete financial statements. The
consolidated financial statements as presented reflect certain
reclassifications from previously issued financial statements to
conform to the current year presentation.
On
August 16, 2016, we filed a certificate of amendment to our Amended
and Restated Certificate of Incorporation with the Secretary of
State of the State of Delaware in order to effectuate a reverse
stock split of our issued and outstanding common stock on a 1 for
7.4 basis, effective on August 16, 2016 (the “Reverse Stock
Split”). The Reverse Stock Split was effective with The
Financial Industry Regulatory Authority (FINRA) and the
Company’s common stock began trading on The NASDAQ Capital
Market at the open of business on August 17, 2016. All share and per share amounts, and number of
shares of common stock into which each share of preferred stock
will convert, in the financial statements and notes thereto have
been retroactively adjusted for all periods presented to give
effect to the reverse split, including reclassifying an amount
equal to the reduction in par value of common stock to additional
paid-in capital.
The
Company is a clinical stage biopharmaceutical company engaged in
the discovery, development and commercialization of proprietary
human monoclonal antibody products for the diagnosis and treatment
of a variety of cancers. The Company has discovered a pipeline of
human monoclonal antibody products based on the protective immune
responses generated by patients who have been vaccinated against
targeted cancers. The vaccines were discovered at Memorial Sloan
Kettering Cancer Center (“MSK”) and are exclusively
licensed to MabVax Therapeutics. The Company operates in only one
business segment.
We
have incurred net losses since inception and expect to incur
substantial losses for the foreseeable future as we continue our
research and development activities. To date, we have funded
operations primarily through government grants, proceeds from the
sale of common and preferred stock, the issuance of debt, the
issuance of common stock in lieu of cash for services, payments
from collaborators, and interest income. The process of developing
products will require significant additional research and
development, preclinical testing and clinical trials, as well as
regulatory approvals. We expect these activities, together with
general and administrative expenses, to result in substantial
operating losses for the foreseeable future. We will not receive
substantial revenue unless we or our collaborative partners
complete clinical trials, obtain regulatory approvals and
successfully commercialize one or more products; or we license our
technology after achieving one or more milestones of interest to a
potential partner.
The
accompanying unaudited condensed consolidated financial statements
were prepared using GAAP for interim financial information and the
instructions to Regulation S-X. While these statements reflect all
normal recurring adjustments which are, in the opinion of
management, necessary for a fair presentation of the results of the
interim period, they do not include all information or notes
required by GAAP for annual financial statements and should be read
in conjunction with the Audited Financial Statements of MabVax
Therapeutics Holdings for the year ended December 31, 2015 in
our Annual Report on Form 10-K filed with the Securities and
Exchange Commission on March 14, 2016.
The
preparation of condensed consolidated financial statements in
conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the condensed consolidated financial statements and the
reported amounts of expenses during the reporting period.
Management believes that these estimates are reasonable; however,
actual results may differ from these estimates.
Recent Accounting Pronouncements
In
February 2016, the Financial Accounting Standards Board, or FASB,
issued ASU 2016-2, "Leases (Topic 842)." This update
will increase transparency and comparability by recognizing lease
assets and lease liabilities on the balance sheet and disclosing
key information about leasing arrangements. Under the
new guidance, lessees will be required to recognize the following
for all leases (with the exception of short-term leases) at the
commencement date: (i) a lease liability, which is a lessee’s
obligation to make lease payments arising from a lease, measured on
a discounted basis; and (ii) a right-of-use asset, which is an
asset that represents the lessee’s right to use, or control
the use of, a specified asset for the lease term. Under the new
guidance, lessor accounting is largely unchanged, and it simplified
the accounting for sale and leaseback transactions. Lessees will no
longer be provided with a source of off-balance sheet financing.
Lessees (for capital and operating leases) and lessors (for
sales-type, direct financing, and operating leases) must apply a
modified retrospective transition approach for leases existing at,
or entered into after, the beginning of the earliest comparative
period presented in the financial statements. The modified
retrospective approach would not require any transition accounting
for leases that expired before the earliest comparative period
presented. Lessees and lessors may not apply a full retrospective
transition approach. The standard is effective for fiscal years
beginning after December 15, 2018, including interim periods within
those fiscal years. We are currently in the process of assessing
what impact this new standard may have on our condensed
consolidated financial statements.
In
March 2016, the FASB issued ASU 2016-09,
“Compensation—Stock Compensation (Topic 718):
Improvements to Employee Share-Based Payment Accounting.”
This update includes multiple provisions intended to simplify
various aspects of the accounting for share-based payment
transactions including accounting for excess tax benefits and tax
deficiencies, classification of excess tax benefits in the
statement of cash flows and accounting for award forfeitures. This
update is effective for annual and interim reporting periods of
public entities beginning after December 15, 2016, with early
adoption permitted. The Company is evaluating the impact of ASU
2016-09 on its consolidated financial statements.
Management
does not believe that any other recently issued, but not yet
effective, accounting standards if currently adopted would have a
material effect on the accompanying condensed consolidated
financial statements.
2. Liquidity and Going Concern
The
accompanying condensed consolidated financial statements have been
prepared on the going concern basis, which assumes that the Company
will continue to operate as a going concern and which contemplates
the realization of assets and the satisfaction of liabilities and
commitments in the normal course of business. As
reflected in the accompanying condensed consolidated financial
statements, the Company had a net loss of $12,550,493, net cash
used in operating activities of $9,622,309, net cash used in
investing activities of $412,498, and net cash provided by
financing activities of $12,891,935 for the nine months ended
September 30, 2016. As of September 30, 2016, the Company had
$6,941,213 in cash and cash equivalents and an accumulated deficit
of $73,152,271.
On
January 15, 2016, the Company and Oxford Finance, LLC, as
collateral agent and lender, entered into a loan and security
agreement (the “Loan Agreement”) providing for senior
secured term loans to the Company in an aggregate principal amount
of up to $10,000,000, subject to the terms and conditions set forth
in the Loan Agreement (the “January 2016 Term
Loan”). On January 15, 2016, the Company received
an initial loan of $5,000,000 under the Loan Agreement, before fees
and issuance costs of approximately $390,000.
On
August 22, 2016, we closed a public offering of 1,297,038 shares of
common stock and 665,281 shares of Series F Preferred Stock, and
warrants to purchase 1,962,319 shares of common stock at $5.55 per
share and warrants to purchase 1,962,319 shares of common stock at
$6.29 per share, at an offering price of $4.81 per share (the
“August 2016 Public Offering”). For every one
share of common stock or Series F Preferred Stock sold, we issued
one warrant to purchase one share of common stock at $5.55 per
share and one warrant to purchase one share of common stock at
$6.29 per share. We received $9,438,753 in gross proceeds,
before underwriting discounts and commissions and offering expenses
totaling $866,410. The gross proceeds include the
underwriters’ over-allotment option, which they exercised on
the closing date.
We
anticipate that the Company will continue to incur net losses into
the foreseeable future as we: (i) continue our Phase I clinical
trial for our standalone therapeutic HuMab 5b-1, designated as
MVT-5873 that was initiated in the first quarter of 2016; (ii)
continue our Positron Emission Tomography (“PET”)
imaging agent 89Zr-HuMab-5B1, designated as MVT-2163 that was
initiated in July 2016; (iii) prepare for filing with the Food and
Drug Administration, or FDA, an Investigational New Drug, or IND,
application for our HuMab-based radioimmunotherapy product,
designated as MVT-1075; (iv) continue preclinical work on several
other programs; and (iv) continue operations as a public
company. After giving effect to the net proceeds received from the
January 2016 Term Loan and the August 2016 Public Offering,
management believes that the Company has sufficient funds to meet
its obligations through May 2017. These conditions give rise to
substantial doubt as to the Company’s ability to continue as
a going concern. The accompanying condensed consolidated financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.
We
plan to continue to fund the Company’s losses from operations
and capital funding needs through equity or debt financings,
strategic collaborations, licensing arrangements, asset sales,
government grants or other arrangements. However, we cannot be sure
that such additional funds will be available on reasonable terms,
or at all. If we are unable to secure adequate additional funding,
we may be forced to make reductions in spending, extend payment
terms with suppliers, liquidate assets where possible, and/or
suspend or curtail planned programs. In addition, if the Company
does not meet its payment obligations to third parties as they come
due, it may be subject to litigation claims. Even if we are
successful in defending against these claims, litigation could
result in substantial costs and be a distraction to management. Any
of these actions could materially harm the Company’s
business, results of operations, and future prospects.
If
the Company raises additional funds by issuing equity securities,
substantial dilution to existing stockholders would result. If the
Company raises additional funds by incurring debt financing, the
terms of the debt may involve significant cash payment obligations
as well as covenants and specific financial ratios that may
restrict the Company’s ability to operate its
business.
3. Cash and Cash Equivalents
The
Company considers all highly liquid investments purchased with
original maturities of three months or less to be cash equivalents.
The Company limits its exposure to credit loss by holding cash in
U.S. dollars, or, from time to time, placing cash and investments
in U.S. government, agency and government-sponsored enterprise
obligations.
4. Fair value of financial instruments
The
Company’s financial instruments consist of cash and cash
equivalents, grants receivable, prepaid expenses and other current
assets and accounts payable, the carrying amount of which are
generally considered to be representative of their respective fair
values because of the short-term nature of those
instruments.
5. Convertible Preferred Stock, Common Stock and
Warrants
MabVax Therapeutics Series B Preferred Stock and Warrants
(Pre-Merger MabVax Therapeutics Issuances)
Due
to the anti-dilution protection in our Series B warrants (described
below), the Series B warrants were recorded as a current liability
in the amount of $92,463 on the Company’s consolidated
balance sheet as of December 31, 2014. On March 25,
2015, the Series B warrants were re-valued at $72,656 prior to
being exchanged into shares of common stock and Series D
convertible preferred stock on a one for one basis, and the warrant
liability was eliminated and the Company recorded a gain of $19,807
for the three months ended March 31, 2015.
Dividends on Preferred Stock
The
Company immediately recognizes the changes in the redemption value
on preferred stock as they occur, and the carrying value of the
security is adjusted to equal what the redemption amount would be
as if redemption were to occur at the end of the reporting date
based on the conditions that exist as of that date. The value
adjustment made to the Series B preferred stock redemption value
and preferred stock dividends for the three months ended March 31,
2015, was an increase of $93,234, and was no longer outstanding
after March 25, 2015.
Since
the Company’s inception, no dividends were ever declared by
the Company’s Board of Directors on either of the
Company’s Series A redeemable convertible preferred stock or
Series B redeemable convertible preferred stock.
Conversion of Preferred Stock into Common Stock
During
the nine months ended September 30, 2015, holders of Series A-1,
Series B, and Series C preferred stock converted 64,019, 106,437,
and 96,571 shares into 5,197, 37,417, and 16,313 shares of common
stock, respectively.
Exchange of Series A-1 and Series B Preferred Stock and Warrants
into Common Stock and Series D Convertible Preferred
Stock
On
March 25, 2015, the Company entered into separate exchange
agreements with certain holders of the Company’s Series A-1
preferred stock and warrants received in the Merger (the
“Series A-1 Exchange Securities”) and holders of the
Company’s Series B preferred stock and Series B warrants (the
“Series B Exchange Securities” and, collectively with
the Series A-1 Exchange Securities, the “Exchange
Securities”), all previously issued by the Company, to
eliminate the Exchange Securities. Pursuant to the exchange
agreements, the holders exchanged the Exchange Securities and
relinquished any and all other rights they may have had pursuant to
the Exchange Securities, their respective governing agreements and
certificates of designation, including any related registration
rights, in exchange for an aggregate of 342,906 shares of the
Company’s common stock and an aggregate of 238,156 shares of
the Company’s newly designated Series D convertible preferred
stock (the “Series D preferred stock”), convertible
into 3,218,325 shares of common stock. No cash was
exchanged in the transaction. The Company recorded
deemed dividends of $9,017,512, $8,655,998 and $179,411
representing the excess fair value of the common stock issued over
the original conversion terms of the Series A-1 and Series B
preferred stock as part of the consideration for elimination of the
Series A-1, Series B preferred stock and Series A-1 warrant,
respectively.
As
of March 25, 2015, pursuant to the terms of the exchange
agreements, the Series A-1 Purchase Agreement, dated February 12,
2014; the Series A-1 Registration Rights Agreement, dated February
12, 2014; the Series B Purchase Agreement, dated May 12, 2014; and
the Series B Registration Rights Agreement, dated May 12, 2014; all
of which have been described as part of the Company’s annual
report on Form 10-K, were terminated, and all rights covenants,
agreements and obligations contained therein, are of no further
force or effect.
No
commission or other payment was received by the Company in
connection with the exchange agreements.
Series D Preferred Stock
As
of September 30, 2016, there were 132,489 shares of Series D
preferred stock issued and outstanding that are convertible into an
aggregate of 1,790,392 shares of common stock, as compared to
191,490 that were convertible into 2,587,703 shares of common stock
as of December 31, 2015.
As
contemplated by the exchange agreements and as approved by the
Company’s Board of Directors, the Company filed with the
Secretary of State of the State of Delaware a Certificate of
Designation of Preferences, Rights and Limitations of Series D
Convertible Preferred Stock (the “Series D Certificate of
Designations”), on March 25, 2015. Pursuant to the
Series D Certificate of Designations, the Company designated
1,000,000 shares of its blank check preferred stock as Series D
preferred stock. Each share of Series D preferred stock has a
stated value of $0.01 per share. In the event of a
liquidation, dissolution or winding up of the Company, each share
of Series D preferred stock will be entitled to a per share
preferential payment equal to the stated value. Each share of
Series D preferred stock is convertible into 13.5135 shares of
common stock. The conversion ratio is subject to adjustment in
the event of stock splits, stock dividends, combination of shares
and similar recapitalization transactions. The Company is
prohibited from effecting the conversion of the Series D preferred
stock to the extent that, as a result of such conversion, the
holder beneficially would own more than 4.99% (provided that
certain investors elected to block their beneficial ownership
initially at 2.49% in the exchange agreements), in the aggregate,
of the issued and outstanding shares of the Company’s common
stock calculated immediately after giving effect to the issuance of
shares of common stock upon the conversion of the Series D
preferred stock. Each share of Series D preferred stock
entitles the holder to vote on all matters voted on by holders of
common stock. With respect to any such vote, each share of Series D
preferred stock entitles the holder to cast such number of votes
equal to the number of shares of common stock such shares of Series
D preferred stock are convertible into at such time, but not in
excess of the beneficial ownership limitations.
Series E Preferred Stock
As
of September 30, 2016 and December 31, 2015, there were 33,333
shares of Series E preferred stock issued and outstanding,
convertible into 519,751 and 450,446 shares of common stock,
respectively.
On
March 30, 2015, the Company filed with the Secretary of State of
the State of Delaware a Certificate of Designation of Preferences,
Rights and Limitations of Series E Convertible Preferred Stock (the
“Series E Certificate of Designations”) to designate
100,000 shares of its blank check preferred stock as Series E
preferred stock.
The
shares of Series E preferred stock are convertible into shares of
common stock based on a conversion calculation equal to the stated
value of such preferred share, plus all accrued and unpaid
dividends, if any, on such share of Series E preferred stock, as of
such date of determination, divided by the conversion price. The
stated value of each share of Series E preferred stock is $75 and
the initial conversion price is $5.55 per share, each subject to
adjustment for stock splits, stock dividends, recapitalizations,
combinations, subdivisions or other similar events. In addition,
during the period proscribed for in the Series E Certificate of
Designations, in the event the Company issues or sells, or is
deemed to issue or sell, shares of common stock at a per share
price that is less than the conversion price then in effect, the
conversion price shall be reduced to such lower price, subject to
certain exceptions. The Company is prohibited from effecting a
conversion of the share of Series E preferred stock to the extent
that, as a result of such conversion, such holder would
beneficially own more than 4.99% of the number of shares of common
stock outstanding immediately after giving effect to the issuance
of shares of common stock upon conversion of the Series E preferred
stock, which beneficial ownership limitation may be increased by
the holder up to, but not exceeding, 9.99%. Each holder is entitled
to vote on all matters submitted to stockholders of the Company,
and shall have the number of votes equal to the number of shares of
common stock issuable upon conversion of such holder’s share
of Series E preferred stock, but not in excess of beneficial
ownership limitations. The shares of Series E preferred stock bear
no interest.
On
August 22, 2016, when the Company closed on the August 2016 Public
Offering, the current Series E preferred stock conversion price of
$5.55 per share was reduced to $4.81 per share under the terms of
the Series E Certificate of Designations, resulting in an increase
in the number of shares of common stock to 519,751 that the Series
E preferred stock may be converted into. There is no further
adjustment required by the Series E Certificate of Designations in
the event of an offering of shares below $4.81 per share by the
Company.
April 2015 Private Placement
On
March 31, 2015, the Company consummated the first closing of a
private offering (the “April 2015 Private Placement”)
and sold $4,714,726 worth of units (the “Unit(s)”), net
of $281,023 in issuance costs. The Units consisted of 900,136
shares of common stock and warrants to purchase 450,068 shares of
common stock with an exercise price of $11.10 per
share. The Units were sold at a price of $5.55 per
Unit.
On
April 10, 2015, the Company consummated the second and final
closing of the April 2015 Private Placement and sold $3,831,622
worth of Units, net of $387,127 in issuance costs, of which
$2,500,000 of the Units consisted of Series E preferred stock and
the balance of it consisting of 760,135 shares of common stock,
together with warrants to all investors to purchase 605,293 shares
of common stock at $11.10 per share. Each Unit was sold
at a purchase price of $5.55 per Unit.
The
Company paid commissions to broker-dealers in the aggregate amount
of approximately $574,000 in the April 2015 Private
Placement.
OPKO
Health, Inc., or OPKO, was the lead investor in the April 2015
Private Placement, purchasing $2,500,000 worth of Units consisting
of Series E preferred stock.
As
a condition to OPKO’s and Frost Gama Investment
Trust’s, or FGIT’s, participation in the April 2015
Private Placement, each of the other investors in the April 2015
Private Placement agreed to execute lockup agreements restricting
the sale of 50% of the securities underlying the Units purchased by
them for a period of six months and the remaining 50% prior to the
expiration of one year following the final closing date of the
April 2015 Private Placement.
On
April 10, 2015, the Company agreed that $3.5 million of the net
proceeds of such closing would be paid into and held under the
terms of an escrow agreement with Signature Bank, N.A. pending the
approval of a representative of OPKO or 10 weeks thereafter, unless
released sooner or extended by the Company and OPKO. On
June 22, 2015, the Company and OPKO extended the termination date
of the escrow to 16 weeks from the final closing of the April 2015
Private Placement. In connection with the OPKO investment, Steven
Rubin, Esq. was appointed advisor to the Company. The escrowed
funds were to be returned to the applicable investors and the
Company shall have no further obligation to issue Units to such
investors in the event certain release conditions are not met. On
June 30, 2015, the Company and OPKO entered into a letter agreement
pursuant to which the Company granted the representative the right,
but not the obligation, until June 30, 2016, to nominate and
appoint up to two additional members of the Company’s Board
of Directors, or to approve the person(s) nominated by the Company
pursuant to the agreement in consideration for the release of the
escrowed funds. The nominees will be subject to the satisfaction of
standard corporate governance practices and any applicable national
securities exchange requirements. Upon signing the
agreement, the escrowed funds were released to the
Company.
The
warrants are exercisable upon issuance and expire October 10, 2017,
and may be exercised for cash or on a cashless basis. The warrants
have a per share exercise price of $11.10, subject to certain
adjustments including stock splits, dividends and reverse-splits.
The Company is prohibited from effecting the exercise of the
warrants to the extent that, as a result of such exercise, the
holder beneficially would own more than 4.99% in the aggregate, of
the issued and outstanding shares of the Company’s common
stock calculated immediately after giving effect to the issuance of
shares of common stock upon the exercise of the
warrants.
In
connection with the April 2015 Private Placement, the Company also
entered into registration rights agreements (the
“Registration Rights Agreements”) with the investors in
the April 2015 Private Placement pursuant to which the Company
agreed to file a registration statement with the SEC covering the
resale of 25% of common stock issued pursuant to the subscription
agreements including 25% of the common stock issuable upon
conversion of the Series E preferred stock, in the event the
investors elect to receive Series E preferred stock instead of
common stock (together, the “Registrable Securities”),
no later than 60 days following the final closing date of the April
2015 Private Placement, and to use its commercially reasonable best
efforts to have such registration statement declared effective
within 120 days after filing. Investors in the April 2015
Private Placement also may be required under certain circumstances
to agree to refrain from selling securities underlying the
purchased Units. The liquidated damages for failure to achieve
effectiveness of the Registerable Securities is 1% per month
beginning 120 days after filing, and provided management has not
used commercially reasonable best efforts to have the registration
statement declared effective within that time frame.
On
June 9, 2015, the Company and investors holding over 60% of the
outstanding Registrable Securities entered into an amendment
agreement to the Registration Rights Agreements in order to extend
the filing date of the registration statement to waive any payments
that may be due to the investors as a result of the Company not
filing a registration statement on or before the original filing
date. On August 4, 2015, the Company and investors
holding over 70% of the outstanding Registrable Securities entered
into a second amendment agreement to further extend the filing date
to October 9, 2015.
On
October 12, 2015, the Company and investors holding over 60% of the
outstanding Registerable Securities entered into a third amendment
agreement to the Registration Rights Agreements to suspend the
Company’s registration obligations under the Registration
Rights Agreements and related subscription agreements during any
period when the “standstill” provision set forth in the
subscription agreements is in effect.
On
January 28, 2016, the Company filed a Registration Statement on
Form S-1, registering 527,680 shares of common stock for resale,
including 112,613 shares of common stock, which are issuable upon
conversion of the Company’s Series E preferred stock issued
in the April 2015 Private Placement.
Except
for certain issuances, for a period beginning on the closing date
of the April 2015 Private Placement and ending on the date that is
the earlier of (i) 24 months from the final closing date of the
April 2015 Private Placement, (ii) the date the Company consummates
a financing (excluding proceeds from the April 2015 Private
Placement) in which the Company receives gross proceeds of at least
$10,000,000 and (iii) the date the common stock is listed for
trading on a national securities exchange (such period until the
earlier date, the “Price Protection Period”), in the
event that the Company issues any shares of common stock or
securities convertible into common stock at a price per share or
conversion price or exercise price per share that is less than
$5.55, the Company shall issue to the investors in the April 2015
Private Placement such additional number of shares of common stock
such that the investor shall own an aggregate total number of
shares of common stock as if they had purchased the Units at the
price of the lower price issuance. No adjustment in the warrants is
required in connection with a lower price issuance.
Effective
with the Company’s entry into an agreement with the
underwriter for the Company’s August 2016 Public Offering,
which closed on August 22, 2016, the Company issued 255,459 shares
of common stock to the holders of record of the shares purchased in
the Company’s April 2015 Private Placement under the Price
Protection Period, representing the shares the investors would have
received had they purchased their shares at $4.81 per share,
instead of $5.55 per share. Effective August 17, 2016, the date of
listing of the Company’s stock on the Nasdaq Capital Market,
the Price Protection Period came to an end.
The
Company has also granted each investor a right of participation in
the Company’s financings for a period of 24
months.
Between
April 13, 2015, and April 14, 2015, certain holders of warrants
issued in the April 2015 Private Placement to purchase an aggregate
of 250,000 shares of common stock exercised such warrants on a
cashless basis for an aggregate issuance of 164,835 shares of
common stock. As of September 30, 2016, there were 805,361 warrants
outstanding from the April 2015 Private Placement to purchase
common stock at $11.10 per share.
October 2015 Public Offering
On
October 5, 2015, the Company closed a public offering of 337,838
shares of common stock and warrants to purchase 168,919 shares of
common stock, at an offering price of $8.14 per share. For
every two shares of common stock sold, the Company issued one
warrant to purchase one share of common stock. The Company
received $2,750,000 in gross proceeds, before underwriting
discounts and commissions and offering expenses totaling
approximately $586,608, and without giving effect to any exercise
of the underwriters’ over-allotment option. The Company
used the net proceeds from this offering to fund the HuMab-5B1
human antibody program preclinical development and for
working capital and general corporate purposes.
The
shares and warrants were separately issued and sold in equal
proportions. The warrants are immediately exercisable, expire
September 30, 2018, and have an exercise price of $9.77 per
share. The warrants are not listed on any securities
exchange or other trading market. As of September 30,
2016, there were warrants to purchase 168,919 shares of common
stock outstanding. The Company granted the underwriters a 30-day
option to purchase up to an additional 50,676 shares of common
stock and up to an additional 25,338 warrants at the same price to
cover over-allotments, if any.
Under
the terms of the underwriting agreement entered into between the
Company and the underwriter in the public offering, the Company,
without the prior written consent of the underwriter, was
prohibited, for a period of 90 days after execution of the
underwriting agreement, from issuing any equity securities, subject
to certain exceptions.
August 2016 Public Offering
On
August 22, 2016, we closed a public offering of 1,297,038 shares of
common stock and 665,281 shares of Series F preferred stock, and
warrants to purchase 1,962,319 shares of common stock at $5.55 per
share and warrants to purchase 1,962,319 shares of common stock at
$6.29 per share, at an offering price of $4.81 per share. For
every one share of common stock or Series F preferred stock sold,
we issued one warrant to purchase one share of common stock at
$5.55 per share and one warrant to purchase one share of common
stock at $6.29 per share. We received $9,438,753 in gross
proceeds, before underwriting discounts and commissions and
offering expenses totaling $866,410. The gross proceeds include the
underwriter’s over-allotment option, which they exercised on
the closing date.
On
August 16, 2016, we filed a Certificate of Designations,
Preferences and Rights of the 0% Series F Convertible Preferred
Stock with the Delaware Secretary of State, designating 1,559,252
shares of preferred stock as 0% Series F convertible preferred
stock.
The
shares of Series F preferred stock are convertible into shares of
common stock based on a conversion calculation equal to the stated
value of such Series F preferred stock, plus all accrued and unpaid
dividends, if any, on such Series F preferred stock, as of such
date of determination, divided by the conversion price. The stated
value of each share of Series F preferred stock is $4.81 and the
initial conversion price is $4.81 per share, each subject to
adjustment for stock splits, stock dividends, recapitalizations,
combinations, subdivisions or other similar events. In the event of
a liquidation, dissolution or winding up of the Company, each share
of Series F preferred stock will be entitled to a per share
preferential payment equal to the par value. All shares of the
Company’s capital stock will be junior in rank to Series F
preferred stock with respect to the preferences as to dividends,
distributions and payments upon the liquidation, dissolution and
winding-up of the Company, except for the Company’s Series D
preferred stock and Series E preferred stock.
The
holders of Series F preferred stock will be entitled to receive
dividends if and when declared by our board of directors. The
Series F preferred stock shall participate on an “as
converted” basis, with all dividends declared on the
Company’s common stock. In addition, if we grant, issue or
sell any rights to purchase our securities pro rata to all our
record holders of our common stock, each holder will be entitled to
acquire such securities applicable to the granted purchase rights
as if the holder had held the number of shares of common stock
acquirable upon complete conversion of all Series F preferred stock
then held.
We are
prohibited from effecting a conversion of the Series F preferred
stock to the extent that, as a result of such conversion, the
holder would beneficially own more than 4.99% of the number of
shares of common stock outstanding immediately after giving effect
to the issuance of shares of common stock upon conversion of the
Series F preferred stock, which beneficial ownership limitation may
be increased by the holder up to, but not exceeding, 9.99%. Each
holder is entitled to vote on all matters submitted to stockholders
of the Company, and shall have the number of votes equal to the
number of shares of common stock issuable upon conversion of such
holder’s Series F preferred stock, but not in excess of the
beneficial ownership limitations.
Issuance of Common Stock under a 2014 Common Stock Purchase
Agreement
In
connection with a financing by the Company in July 2014 (the
“July 2014 Financing Transaction”), the Company assumed
certain obligations as per the original agreement to issue
additional shares to investors in the July 2014 Financing
Transaction if a subsequent financing or issuance of shares was at
a price per share lower than the price per share in the July 2014
Financing Transaction. The Company issued on March 31, 2015, an
aggregate of 11,904 shares of common stock that were required to be
issued in connection with the July 2014 Financing Transaction as a
result of the issuance of shares at a lower share price than in the
July 2014 Financing Transaction.
Grant of Restricted Shares
Rubin Grant
On
April 3, 2015, the Company entered into a consulting agreement with
Steve Rubin pursuant to which he agreed to provide advisory
services in connection with corporate strategy, licensing and
business development estimated to be for a period of 12
months. In exchange for his services, the Company
provided him with a one-time grant of 27,027 shares of the
Company’s restricted common stock, valued at $17.02 per
share. As the shares granted were fully vested upon
grant and the Company has no legal recourse to recover the shares
in the event of nonperformance, the Company recognized the grant
date fair value of the shares as consulting expense upon grant
during the second quarter of 2015.
Ravetch Grant
On
April 4, 2015, the Board of Directors approved the issuance of an
additional restricted stock award of 17,770 shares to Jeffrey
Ravetch, M.D., Ph. D, who is one of the Company’s board
members. This award is for future services covering at
least a one-year period. The award was granted in addition to the
prior award to Dr. Ravetch on April 2, 2015 of (i) 4,628 restricted
shares and (ii) options to purchase 4,628 shares of common stock
with an exercise price of $17.02 per share, for a total grant of
27,028 restricted shares and options. As the 17,770 shares granted
were fully vested upon grant and the Company has no legal recourse
to recover the shares in the event of nonperformance, the Company
recognized the grant date fair value of the shares as consulting
expense upon grant during the second quarter of 2015.
Livingston
Grant
On
April 4, 2015, the Board of Directors approved the issuance of a
restricted stock award by the Company of 135,135 shares of common
stock, valued at $17.02 per share, to Philip Livingston, Ph.D. for
his continuing service to the Company. On May 13, 2015,
the Compensation Committee of the Board of Directors clarified that
the award was being granted in consideration for at least one year
of Dr. Livingston’s services. The committee
further clarified that the vesting of the common stock shall be on
the one-year anniversary of the Board of Directors’ approval
of the award, or April 4, 2016. The Company expensed the
grant date fair value of the award over the vesting period of one
year.
Consulting Agreements
On
April 5, 2015, the Company entered into a consulting agreements
with two investor relations consultants to provide relations
services to the Company in consideration for an immediate grant of
40,541 shares of the Company’s restricted common stock and a
monthly cash retainer of $12,000 a month for ongoing services for a
period of one year. The consultants also received an additional
27,027 shares of the Company’s restricted common stock upon
the Company’s achieving a milestone based on its
fully-diluted market capitalization. As the shares granted were
fully vested upon grant and the Company has no legal recourse to
recover the shares in the event of nonperformance, the Company
recognized the grant date fair value of the 40,541 shares or
$690,000, as investor relations expense upon grant during the
second quarter of 2015. The performance condition for the 27,027
shares became probable and the market capitalization metric was met
during the second quarter; therefore, the Company recognized an
additional $460,000 of expense during the quarter ended June 30,
2015.
Also
during 2015, the Board of Directors approved the issuance of
restricted stock awards to two other consultants totaling 16,217
shares with vesting terms ranging from one to three years, valued
from $13.10 to $15.76 per share. The Company is
expensing each of the grant date fair value of the awards over the
performance period for the award, which will be re-measured at the
end of each quarter until the performance is complete. As of
September 30, 2016, the Company expensed $33,124 related to these
grants. As of September 30, 2016, the expected future compensation
expense related to these grants is $35,636 based upon the
Company’s stock price on September 30, 2016.
On
January 13, 2016, the Board of Directors approved the issuance of
13,514 shares of restricted stock valued at $64,000 to a consultant
for advisory services to the Company.
On
September 1, 2016, the Board of Directors approved the issuance of
22,130 shares of common stock with a date of issuance fair value of
$100,000 to another investor relations consulting firm. In exchange
for the shares granted and a monthly retainer, the consulting firm
will perform investor relation services on behalf of the Company.
As the shares granted were fully vested upon grant and the Company
has no legal recourse to recover the shares in the event of
nonperformance, the Company recognized the grant date fair value of
the 22,130 shares of $100,000 as investor relations expense upon
grant during the third quarter of 2016.
6. Notes Payable
On
January 15, 2016, we entered into a loan and security agreement
with Oxford Finance, LLC pursuant to which we had the option to
borrow $10,000,000 in two equal tranches of $5,000,000 each (the
“Loan Agreement”). The first tranche of
$5,000,000 was funded at close on January 15, 2016 (the “Term
A Loan”). The option to fund the second tranche of $5,000,000
(the “Term B Loan”) was upon the Company achieving
positive interim data on the Phase 1 HuMab-5B1 antibody trial in
pancreatic cancer and successfully uplisting to either the NASDAQ
Stock Market or NYSE MKT on or before September 30,
2016. The option for the Term B Loan expired on
September 30, 2016. The Company is not pursuing completion of any
additional debt financing with Oxford Finance, LLC at the present
time. The interest rate for the Term A Loan is set on a monthly
basis at the index rate plus 11.29%, where the index rate is the
greater of the 30-day LIBOR rate or 0.21%. Interest is
due on the first day of each month, in arrears, calculated based on
a 360-day year. The loan is interest only for the first
year after funding, and the principal amount of the loan is
amortized in equal principal payments, plus period interest, over
the next 36 months. A facility fee of 1.0% or $100,000
was due at closing of the transaction, and was earned and paid by
the Company on January 15, 2016. The Company is
obligated to pay a $150,000 final payment upon completion of the
term of the loan, and this amount is being accreted using the
effective interest rate method over the term of the loan. Each of
the term loans can be prepaid subject to a graduated prepayment
fee, depending on the timing of the prepayment.
Concurrent
with the closing of the transaction, the Company issued 225,226
common stock purchase warrants to Oxford Finance, LLC with an
exercise price of $5.55 per share. The warrants are
exercisable for five years and may be exercised on a cashless
basis, and expire on January 15, 2021. The Company recorded
$607,338 for the fair value of the warrants as a debt discount
within notes payable and an increase to additional paid-in capital
on the Company’s balance sheet. We used the
Black-Scholes-Merton valuation method to calculate the value of the
warrants. The debt discount is being amortized as interest expense
over the term of the loan using the effective interest
method.
We
granted Oxford Finance, LLC a perfected first priority lien on all
of the Company’s assets with a negative pledge on
intellectual property. The Company paid Oxford Finance, LLC a good
faith deposit of $50,000, which was applied towards the facility
fee at closing. The Company agreed to pay all costs,
fees and expenses incurred by Oxford Finance, LLC in the initiation
and administration of the facilities including the cost of loan
documentation.
At
the initial funding, the Company received net proceeds of
approximately $4,610,000 after fees and expenses. These fees and
expenses are being accounted for as a debt discount and classified
within notes payable on the Company’s condensed consolidated
balance sheet. The Company's transaction costs of approximately
$390,000 are presented in the condensed consolidated balance sheet
as a direct deduction from the carrying amount of the notes
payable, consistent with debt discounts. Debt discounts, issuance
costs and the final payment are being amortized or accreted as
interest expense over the term of the loan using the effective
interest method.
The
Loan Agreement also contains customary indemnification obligations
and customary events of default, including, among other things, our
failure to fulfill certain of the Company's obligations under the
Loan Agreement, the occurrence of a material adverse change, which
is defined as a material adverse change in the Company's business,
operations, or condition (financial or otherwise), a material
impairment of the prospect of repayment of any portion of the loan,
or a material impairment in the perfection or priority of the
Lenders’ lien in the collateral or in the value of such
collateral. In the event of default by the Company under the
Loan Agreement, the Lenders would be entitled to exercise their
remedies thereunder, including the right to accelerate payment of
the debt, upon which we may be required to repay all amounts then
outstanding under the Loan Agreement, which could harm the
Company's financial condition.
The
Company was in compliance with all applicable covenants set forth
in the Loan Agreement as of September 30, 2016.
The
Company recorded interest expense related to the term loan of
$266,057 and $729,350 for the three and nine months ended September
30, 2016, respectively. The annual effective interest rate on the
note payable, including the amortization of the debt discounts and
accretion of the final payment, but excluding the warrant
amortization, is approximately 13.8%.
As
of September 30, 2016, the Company has one insurance premium
note outstanding with a balance totaling $123,075, which
matures in April 2017. This note bears interest at a
rate of 4.5% per annum, and the monthly payments are
$20,783.
Future
principal payments under the Loan Agreement and insurance premium
note as of September 30, 2016 are as follows:
Years ending December 31:
|
|
2016
|
$61,192
|
2017
|
1,589,660
|
2018
|
1,666,667
|
2019
|
1,666,667
|
2020
|
138,889
|
Notes
payable, balance as of September 30, 2016
|
5,123,075
|
Unamortized
discount on notes payable
|
(804,918)
|
Notes
payable, net, balance as of September 30, 2016
|
4,318,157
|
Current
portion of notes payable
|
(1,234,186)
|
Non-current
portion of notes payable
|
$3,083,971
|
7. Related Party Transactions
On
April 1, 2016, the Company entered into a two-year consulting
agreement with Jeffrey Ravetch, M.D., Ph.D., a Board member, for
work beginning January 1, 2016 through December 31, 2017, at a rate
of $100,000 a year, in support of scientific and technical advice
on the discovery and development of technology and products for the
Company primarily related to monoclonal antibodies, corporate
development, and corporate partnering efforts. In April
2016, the Company paid Dr. Ravetch $100,000 for services to be
performed in 2016, and will pay quarterly thereafter beginning
January 1, 2017.
In
April 2015, the Company granted a restricted stock award of 135,135
shares to Phil Livingston, Ph.D., an employee and member of the
Board of Directors, for his continuing services to the Company, and
the value of this award has been amortized over a period of one
year.
8. Stock-based Activity
Amendment of Equity Incentive Plan
On
March 31, 2015, the Company approved a Second Amended and Restated
2014 Employee, Director and Consultant Equity Incentive Plan (the
“Plan”) to increase the number of shares reserved for
issuance under the Plan from 21,362 to 1,129,837 shares of common
stock. Additional changes to the Plan include:
●
|
|
An
“evergreen” provision to reserve additional shares for
issuance under the Plan on an annual basis commencing on the first
day of fiscal 2016 and ending on the second day of fiscal 2024,
such that the number of shares that may be issued under the Plan
shall be increased by an amount equal to the lesser of:
(i) 1,081,081 or the equivalent of such number of shares after
the administrator, in its sole discretion, has interpreted the
effect of any stock split, stock dividend, combination,
recapitalization or similar transaction in accordance with the
Plan; (ii) the number of shares necessary such that the total
shares reserved under the Plan equals (x) 15% of the number of
outstanding shares of common stock on such date (assuming the
conversion of all outstanding shares of Preferred Stock (as defined
in the Plan) and other outstanding convertible securities and
exercise of all outstanding warrants to purchase common stock) plus
(y) 30,946; and (iii) an amount determined by the
Board.
|
|
|
|
●
|
|
Provisions
that no more than 405,406 shares may be granted to any
participant in any fiscal year.
|
|
|
|
●
|
|
Provisions
to allow for performance based equity awards to be issued by the
Company in accordance with Section 162(m) of the Internal Revenue
Code.
|
|
|
|
●
|
|
On
September 22, 2016, the Board of Directors ratified an automatic
increase in the number of shares reserved for issuance under the
Plan, increasing the total shares reserved from 1,129,837 to
1,208,307 shares of common stock, under the annual evergreen
provision for the Plan.
|
Stock-based Compensation
We
measure stock-based compensation expense for equity-classified
awards, principally related to stock options and restricted stock
units, or RSUs, based on the estimated fair values of the awards on
the date of grant. We recognize the value of the portion of the
award that we ultimately expect to vest as stock-based compensation
expense over the requisite service period in our condensed
consolidated statements of operations. Due to limited activity in
2016 and 2015, we assumed a forfeiture rate of zero.
We
use the Black-Scholes-Merton model to estimate the fair value of
stock options granted. The expected term of stock options granted
represents the period of time that we expect them to be
outstanding. For the three and nine months ended
September 30, 2016 we used volatility of 70.98% to 85.91%, dividend
rate of 0%, expected term of 2.9 to 6 years, and risk-free interest
rate of 0.87% to 1.43% in our Black-Scholes-Merton calculations.
For the three and nine months ended September 30, 2015, we used
volatility of 81.03% to 86.62%, dividend rate of 0%, expected term
of 5.5 to 6 years, and risk-free interest rate of 0.87% to 1.05% in
our Black-Scholes-Merton calculations.
Total estimated stock-based compensation expense,
related to all of the Company’s stock-based payment awards
recognized under ASC 718, “Compensation—Stock
Compensation” and ASC 505, “Equity” comprised the
following:
|
Three Months
Ended
|
Three Months
Ended
|
Nine Months
Ended
|
Nine Months
Ended
|
|
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|
2016
|
2015
|
2016
|
2015
|
Research
and development
|
$301,985
|
$307,892
|
$889,666
|
$633,593
|
General
and administrative
|
666,556
|
1,186,931
|
2,570,326
|
2,333,010
|
Total
stock-based compensation expense
|
$968,541
|
$1,494,823
|
$3,459,992
|
$2,966,603
|
Stock-based Award Activity
The
following table summarizes the Company’s stock option
activity during the nine months ended September 30,
2016:
|
Options
Outstanding
|
Weighted-Average
Exercise Price
|
Outstanding
at December 31, 2015
|
438,249
|
$17.46
|
Granted
|
413,578
|
5.21
|
Exercised
|
—
|
—
|
Forfeited/cancelled/expired
|
(36,415)
|
15.28
|
Outstanding
and expected to vest at September 30, 2016
|
815,412
|
11.32
|
Vested
and exercisable at September 30, 2016
|
164,588
|
$17.58
|
The
total unrecognized compensation cost related to nonvested
stock option grants as of September 30, 2016, was $3,496,364, and
the weighted average period over which these grants are expected to
vest is 2.18 years. The Company has assumed a forfeiture rate of
zero. The weighted average remaining contractual life of stock
options outstanding at September 30, 2016, is 9.0
years.
During
the first nine months of 2016, the Company granted 413,578 options
to officers and employees with a weighted average exercise price of
$5.21 and vesting over a three-year period with vesting starting at
the one-year anniversary of the grant date. During the
first nine months of 2015, there were 407,547 options and 310,926
shares of restricted stock granted to directors, officers,
employees and consultants.
Because
the Company had a net operating loss carryforward as of September
30, 2016, no tax benefits for the tax deductions related to
stock-based compensation expense were recognized in the
Company’s condensed consolidated statements of operations.
Additionally, there were no stock options exercised in the three
and nine months ended September 30, 2016 and there were 376 stock
options exercised during the three and nine months ended September
30, 2015.
A
summary of activity related to restricted stock grants under the
Plan for the nine months ended September 30, 2016 is presented
below:
|
Shares
|
Weighted-Average
Grant-Date Fair Value
|
Nonvested
at December 31, 2015
|
310,926
|
$16.84
|
Granted
|
—
|
—
|
Vested
|
(105,448)
|
18.82
|
Forfeited
|
—
|
—
|
Nonvested
at September 30, 2015
|
205,478
|
16.85
|
As
of September 30, 2016, unamortized compensation expense related to
restricted stock grants amounted to $2,553,920, which is expected
to be recognized over a weighted average period of 1.5
years.
Management Bonus Plan
On
April 2, 2015, the Compensation Committee of the Board of Directors
approved the 2015 Management Bonus Plan (the “Management
Plan”) outlining maximum target bonuses of the base salaries
of certain of the Company’s executive
officers. Under the terms of the Management Plan, the
Company’s Chief Executive Officer shall receive a maximum
target bonus of up to 50% of his annual base salary, the Chief
Financial Officer shall receive a maximum target bonus of up to 35%
of his annual base salary and the Company’s Vice President
shall receive a maximum target bonus of up to 25% of his annual
base salary.
On
April 4, 2015, the Board approved the following Non-Employee
Director Policy (the “Incumbent Director Policy”) with
respect to incumbent non-employee members of the Board in the event
that they are replaced before their term expires:
●
|
|
a
one-time issuance of 2,703 restricted shares of common
stock;
|
●
|
|
the
vesting of all options and restricted stock grants held on such
date; and
|
●
|
|
the
payment of all earned but unpaid cash compensation for their
services on the Board and its committees, as of such
date.
|
On
April 4, 2015, in connection with his resignation from the Board of
Directors, Michael Wick received a one-time restricted stock grant
of 2,703 shares under the Incumbent Director
Policy.
On
February 16, 2016, our Compensation Committee approved a 2016
Management Bonus Plan (the “2016 Management Plan”)
outlining maximum target bonuses of the base salaries of certain of
our executive officers. Under the terms of the 2016 Management
Plan, the Company's Chief Executive Officer shall receive a maximum
target bonus of up to 50% of his annual base salary, and the Chief
Financial Officer and each of the Company's Vice Presidents shall
receive a maximum target bonus of up to 30% of their annual base
salary.
Stock Issued Upon Vesting of Restricted Stock Grants
On
April 2 and April 3, 2016, 98,237 shares of restricted stock units
vested upon the one-year anniversary of restricted stock units
granted. Accordingly, 64,392 shares were issued to the
Company’s directors and officers, and the Company withheld
33,845 shares for the employee portion of taxes and remitted
$177,823 to the tax authorities in order to satisfy tax liabilities
related to this issuance on behalf of the officers. In
addition, in July and August of 2016, 7,208 shares were issued to
outside consultants upon vesting of previously issued restricted
stock units. As of September 30, 2016, there were
205,478 nonvested restricted stock units remaining
outstanding.
Common Stock Reserved for Future Issuance
Common
stock reserved for future issuance consists of the following at
September 30, 2016:
Common
stock reserved for conversion of preferred stock
|
2,975,424
|
Common
stock reserved for exercise of warrants
|
5,124,144
|
Common
stock options outstanding
|
815,412
|
Authorized
for future grant or issuance under the Stock Plan
|
22,443
|
Nonvested
restricted stock
|
205,478
|
Total
|
9,142,901
|
9. Net Loss per Share
The
Company calculates basic and diluted net loss per share using the
weighted-average number of shares of common stock outstanding
during the period.
When
the Company is in a net loss position, it excludes from the
calculation of diluted net loss per share all potentially dilutive
stock options, preferred stock and warrants, and the diluted net
loss per share is the same as the basic net loss per share for such
periods. If the Company was to be in a net income position, the
weighted average number of shares used to calculate the diluted net
income per share would include the potential dilutive effect of
in-the-money securities, as determined using the treasury stock
method.
The
table below presents the potentially dilutive securities that would
have been included in the calculation of diluted net loss per share
if they were not antidilutive for the periods
presented.
|
As of September 30,
|
|
|
2016
|
2015
|
Stock
options
|
815,412
|
438,249
|
Restricted
stock awards
|
205,478
|
610,926
|
Preferred
stock
|
2,975,424
|
3,038,162
|
Common
stock warrants
|
5,124,144
|
805,361
|
Total
|
9,120,458
|
4,892,698
|
10. Contracts and Agreements
Memorial Sloan Kettering Cancer Center, or MSK
Since 2008 the Company has engaged in various
research agreements and collaborations with MSK including licensed
rights to cancer vaccines and the blood samples from patients who
have been vaccinated with MSK’s cancer vaccines. Total
sponsored research contracts outstanding in 2016 amounting to
approximately $800,000 in 2016 were approximately 89% complete as
of September 30, 2016. Such sponsored research agreements provide
support for preclinical work on the Company’s product
development programs. The work includes preparing
radioimmunoconjugates of the Company’s antibodies and
performing in vitro and in vivo pharmacology studies for our therapeutic antibody
product, imaging agent product and radioimmunotherapy product
programs.
Life Technologies Licensing Agreement
On
September 24, 2015, the Company entered into a licensing agreement
with Life Technologies Corporation, a subsidiary of ThermoFisher
Scientific. Under the agreement the Company agreed to
license certain cell lines from Life Technologies Corporation to be
used in the production of recombinant proteins for the
Company’s clinical trials. The amount of the
contract is for $450,000 and was fully expensed during
2015. The Company paid $225,000 during 2015 related to
this contract, and the remaining amount of $225,000 was paid during
the quarter ended September 30, 2016.
Rockefeller University Collaboration
In
July 2015, the Company entered into a research collaboration
agreement with Rockefeller University's Laboratory of Molecular
Genetics and Immunology. The Company provided antibody material to
Rockefeller University, which is exploring the mechanism of action
of constant region (Fc) variants of the HuMab 5B1 in the role of
tumor clearance. The Company will supply additional research
materials as requested by the university, which is evaluating ways
to optimize the function.
Juno Option Agreement
On
August 29, 2014, the Company entered into an option agreement (the
“Option Agreement”) with Juno Therapeutics, Inc.
(“Juno”) in exchange for a one-time up-front option fee
in the low five figures. Pursuant to the Option Agreement, the
Company granted Juno the option to obtain an exclusive, world-wide,
royalty-bearing license authorizing Juno to develop, make, have
made, use, import, have imported, sell, have sold, offer for sale
and otherwise exploit certain patents the Company developed with
respect to fully human antibodies with binding specificity against
human GD2 or sialyl-Lewis A antigens and certain Company controlled
biologic materials. As of June 30, 2016, the Option Agreement
expired and Juno no longer has a contractual right for use of
Company binding domains for use in the construction of CAR T-cells.
During the three and nine months ended September 30, 2016, no
revenues had been earned under the Option Agreement.
Patheon Biologics LLC Agreement
On April 14, 2014, the Company entered into a development and
manufacturing services agreement (the “Services
Agreement”) with Patheon (f.k.a. Gallus Biopharmaceuticals)
to provide a full range of manufacturing and bioprocessing
services, including cell line development, process development,
protein production, cell culture, protein purification,
bio-analytical chemistry and quality control, or QC,
testing. Total amount of the contract is estimated at
approximately $3.0 million. For the three and nine
months ended September 30, 2016, the Company had no additional
expenses associated with the agreement. The company
recorded no expenses related to this Services Agreement in 2016.
For the three and nine months ended September 30, 2015, the Company
recorded $751,931 and $1,987,006 of expense, respectively,
associated with the Services Agreement. During the third quarter of
2016, the Company negotiated a reduction in the amount previously
recorded and owed to Patheon related to manufacturing batches that
have failed, resulting in the reduction in R&D expenses of
approximately $363,000 during the quarter.
NCI PET Imaging Agent Grant
In
September 2013, the National Cancer Institute (“NCI”)
awarded the Company a Small Business Innovation Research, or SBIR,
Program Contract to support the Company’s program to develop
a Positron Emission Tomography (“PET”) imaging agent
for pancreatic cancer using a fragment of the Company’s 5B1
antibody (the “NCI PET Imaging Agent Grant”). The
project period for Phase I of the grant award of approximately
$250,000 covered a nine-month period which commenced in September
2013 and ended in June 2014.
On
August 25, 2014, the Company was awarded a $1.5 million contract
for the Phase II portion of the NCI PET Imaging Agent Grant. The
contract was intended to support a major portion of the preclinical
work being conducted by the Company, together with its
collaboration partner, MSK, to develop a novel PET imaging agent
for detection and assessment of pancreatic cancer. The total
contract amount for Phase I and Phase II of approximately
$1,749,000 supports research work through June 2016. The
contract has been successfully completed at the end of
2015. No additional activities are required or planned
under the contract and all monies available under the contract have
been requested and received.
The
Company records revenue associated with the NCI PET Imaging Agent
Grant as the related costs and expenses are incurred. For the three
and nine months ended September 30, 2016 and 2015, the Company
recorded none, $148,054, $133,318 and $509,474 of revenue
associated with the NCI PET Imaging Agent Grant,
respectively.
11. Commitments and contingencies
Litigation
On
September 18, 2015, an Order and Final Judgment was entered by the
Superior Court of the State of California, approving a settlement
of a class action lawsuit commenced on May 30, 2014, in Santa Clara
County Superior Court, State of California, on behalf of Cadillac
Partners and others similarly situated, naming as defendants,
MabVax Therapeutics, the Company and the Company’s directors,
Hudson Bay Capital Management LP, Bio IP Ventures LLC, Hudson Bay
Master Fund Ltd., and Hudson Bay IP Opportunities Master Fund LP,
together the “Parties,” alleging the defendants
breached certain fiduciary duties, or aided and abetted a breach of
fiduciary duties, in connection with the Company’s Merger
with MabVax Therapeutics. The plaintiff sought to enjoin the Merger
and obtain damages as well as attorneys’ and expert fees and
costs. We expect to incur no expenses in 2016 or
thereafter in connection with this lawsuit or
settlement.
Operating Leases
In
connection with the Merger, the Company recorded a $590,504
contingent lease termination fee, in connection with the
termination by MabVax Therapeutics Holdings (f.k.a. Telik, Inc.) of
the master lease and sublease of our facility located at 3165
Porter Drive in Palo Alto, California (the “Porter Drive
Facility”), which is payable to ARE-San Francisco No. 24
(“ARE”) following the Company’s receipt of $15
million or more in additional financing, in the aggregate, which
was achieved on August 22 ,2016.
On September 2, 2015, the Company
entered into a lease (the
“Lease”) with AGP Sorrento Business Complex, L.P., for
certain premises of office and laboratory space in buildings
located at 11535 Sorrento Valley Rd., San Diego, California, to
serve as the Company’s corporate offices and laboratories
(the “New Premises”). Due to the fact that
certain tenant improvements needed to be made to the New Premises
before the Company could take occupancy, the term of the Lease did
not commence until the New Premises were ready for occupancy, which
was on February 4, 2016. The Lease terminates six years
after such term commencement date, unless earlier terminated in
accordance with the Lease. Pursuant to the terms of the Lease, the
monthly base rent is $35,631, subject to annual increases as set
forth in the Lease.
The
Company has an option to extend the Lease term for a single,
five-year period. If the Lease term is extended for the
optional five-year period, the monthly base rent will be adjusted
based on fair market rental value. In addition to rent,
the Company agreed to pay a portion of the taxes and utility,
maintenance and other operating costs paid or accrued in connection
with the ownership and operation of the property.
The
Company previously leased its corporate office and laboratory space
under an operating lease that, as amended on August 1, 2010,
expired on July 31, 2015. The lease contained an option to
cancel at various dates prior to the termination date by paying a
cancellation penalty. The Company has provided a refundable
security deposit of $11,017 to secure its obligations under the
lease, which was included in other long-term assets in the
accompanying condensed consolidated financial statements. We
recognize rent expense on a straight-line basis over the term the
lease.
During
the three and nine months ended September 30, 2016, the Company
recorded rent expense of $115,238 and $318,159, respectively, and
during the three and nine months ended September 30, 2015, the
Company recorded rent expense of $31,627 and $89,156,
respectively.
Minimum
future annual operating lease obligations are as follows as of
September 30, 2016:
2016
(remaining)
|
$106,893
|
2017
|
439,330
|
2018
|
452,510
|
2019
|
466,085
|
2020
|
480,068
|
Thereafter
|
535,776
|
Total
|
$2,480,662
|
Capitalized Leases
On
March 21, 2016, the Company entered into a lease agreement with
ThermoFisher Scientific (“Lessor”). Under
the terms of the agreement, the Company agreed to lease two pieces
of equipment from the Lessor, a liquid chromatography system and an
incubator, totaling in cost of $95,656. The term of the
lease is five years (60 months), and the monthly lease payment is
$1,942. In addition, there is a $1.00 buyout option at the end of
the lease term.
As
of September 30, 2016, future minimum lease payments due in fiscal
years under capitalized leases are as follows:
2016 (remainder of)
|
$5,826
|
2017
|
23,306
|
2018
|
23,306
|
2019
|
23,306
|
2020
|
23,306
|
2021
and thereafter
|
7,904
|
Less
interest
|
(17,802)
|
Principal
|
89,152
|
Less
current portion
|
(16,654)
|
Noncurrent
portion
|
$72,498
|
Item 2.
Management's Discussion and Analysis of Financial
Condition and Results of
Operations
FORWARD LOOKING STATEMENTS
The
following discussion should be read in conjunction with our
condensed consolidated financial statements and other financial
information appearing elsewhere in this quarterly report. In
addition to historical information, the following discussion and
other parts of this quarterly report contain forward-looking
statements. You can identify these statements by forward-looking
words such as “plan,” “may,”
“will,” “expect,” “intend,”
“anticipate,” believe,” “estimate”
and “continue” or similar words. Forward-looking
statements include information concerning possible or assumed
future business success or financial results. You should read
statements that contain these words carefully because they discuss
future expectations and plans, which contain projections of future
results of operations or financial condition or state other
forward-looking information. We believe that it is important to
communicate future expectations to investors. However, there may be
events in the future that we are not able to accurately predict or
control. Accordingly, we do not undertake any obligation to update
any forward-looking statements for any reason, even if new
information becomes available or other events occur in the future
and thus you should not unduly rely on these
statements.
The
forward-looking statements included herein are based on current
expectations that involve a number of risks and uncertainties set
forth under “Risk Factors” in our Annual Report on Form
10-K as of and for the year ended December 31, 2015, Part
II-Section 1A herein, and other periodic reports filed with the
United States Securities and Exchange Commission
(“SEC”). Accordingly, to the extent that this Report
contains forward-looking statements regarding the financial
condition, operating results, business prospects or any other
aspect of the Company, please be advised that the Company’s
actual financial condition, operating results and business
performance may differ materially from that projected or estimated
by the Company in forward-looking statements and thus you should
not unduly rely on these statements.
Overview
We
have been engaged in the discovery and development of proprietary
human monoclonal antibody products for the diagnosis and treatment
of a variety of cancers. We have discovered a pipeline of human
monoclonal antibody products based on the protective immune
responses generated by patients who have been immunized against
targeted cancers. Therapeutic vaccines under development were
discovered at Memorial Sloan Kettering Cancer Center, or MSK, and
are exclusively licensed to MabVax Therapeutics. We operate in only
one business segment. We have incurred substantial losses since
inception, and we expect to incur additional substantial losses for
the foreseeable future as we continue our research and development
activities. To date, we have funded our operations primarily
through government grants, proceeds from the sale of common and
preferred stock, the issuance of debt, the issuance of common stock
in lieu of cash for services, payments from collaborators and
interest income. The process of developing our product
candidates will require significant additional research and
development, preclinical testing and clinical trials, as well as
regulatory approval. We expect these activities, together with
general and administrative expenses, to result in substantial
operating losses for the foreseeable future. We will not receive
product revenue unless we, or our collaborative partners, complete
clinical trials, obtain regulatory approval and successfully
commercialize one or more of our products. We cannot
provide assurance that we will ever generate revenues or achieve
and sustain profitability in the future or obtain the necessary
working capital for our operations.
During
the nine months ended September 30, 2016, our loss from operations
was $11,821,162 and our net loss was $12,550,493. Net cash used in
operating activities for the nine months ended September 30, 2016
was $9,622,309, and cash and cash equivalents as of September 30,
2016 were $6,941,213. As of September 30, 2016, we had
an accumulated deficit of $73,152,271.
We
are subject to risks common to biopharmaceutical companies,
including the need for capital, risks inherent in our research,
development and commercialization efforts, preclinical testing,
clinical trials, uncertainty of regulatory and marketing approvals,
enforcement of patent and proprietary rights, potential competition
and retention of key employees. In order for a product to be
commercialized, it will be necessary for us to conduct preclinical
tests and clinical trials, demonstrate efficacy and safety of our
product candidates to the satisfaction of regulatory authorities,
obtain marketing approval, enter into manufacturing, distribution
and marketing arrangements, obtain market acceptance and, in many
cases, obtain adequate reimbursement from government and private
insurers. We cannot provide assurance that we will ever generate
revenues or achieve and sustain profitability in the future or
obtain the necessary working capital for our
operations.
RESULTS OF OPERATIONS
We
are providing the following information about our revenues,
expenses, cash and liquidity.
Comparison of the Three and Nine Months Ended September 30, 2016
and 2015
Revenues:
|
Three Months Ended
September 30,
|
%
Increase/
|
Nine Months Ended
September 30,
|
%
Increase/
|
||
|
2016
|
2015
|
(Decrease)
|
2016
|
2015
|
(Decrease)
|
Revenues
|
$—
|
$133,318
|
(100%)
|
$148,054
|
$509,474
|
(71%)
|
For
the three months ended September 30, 2016, we recognized no
revenues, as compared to $133,318 for the same period in the prior
year. This decrease was primarily due to the completion of the
current phase of our contract with the National Institutes of
Health, or NIH (the “NIH Imaging Contract”), during the
first quarter of the current year.
For
the nine months ended September 30, 2016, we recognized
revenues of $148,054, as compared to $509,474 for the same period
in the prior year. This decrease was primarily due to the
completion of the current phase of the NIH Imaging Contract during
the first quarter of the current year.
Research and development expenses:
|
Three Months Ended
September 30,
|
%
Increase/
|
Nine Months Ended
September 30,
|
%
Increase/
|
||
|
2016
|
2015
|
(Decrease)
|
2016
|
2015
|
(Decrease)
|
Research
and development
|
$1,671,181
|
$3,127,173
|
(47%)
|
$4,967,695
|
$7,178,703
|
(31%)
|
For
the three months ended September 30, 2016, we incurred research and
development expenses of $1,671,181, as compared to $3,127,173 for
the same period a year ago. Expenses for the current quarter in
2016 were primarily for our Phase I clinical trials of MVT-5873 as
a therapeutic and MVT-2163 as a diagnostic for pancreatic cancer
and other CA 19.9 malignancies, and in-house staffing to support
preclinical and clinical development efforts in support of our
programs. Expenses in the same period a year ago were
primarily for GMP manufacturing development of our lead antibody
candidate HuMab 5B1, now designated as MVT-5873, at Patheon (f.k.a.
Gallus BioPharmaceuticals). In addition, during the current quarter
the Company negotiated a release of approximately $363,000 of
previously accrued manufacturing costs related to failed
manufacturing batches.
Stock-based
compensation expense included in research and development expenses
for the three months ended September 30, 2016 and 2015 was
$301,985 and $307,892, respectively.
For
the nine months ended September 30, 2016, we incurred research and
development expenses of $4,967,695, as compared to $7,178,703 for
the same period a year ago. Expenses for the first nine months in
2016 were primarily for our clinical trials, and in-house staffing
to support preclinical and clinical development efforts in support
of our programs. Expenses in the same period a year ago
were primarily for GMP manufacturing development of our lead
antibody candidate HuMab 5B1 at Patheon (f.k.a. Gallus
BioPharmaceuticals). In addition, during the current quarter the
Company negotiated a release of approximately $363,000 of
previously accrued manufacturing costs related to failed
manufacturing batches.
Stock-based
compensation expense included in research and development expenses
for the nine months ended September 30, 2016 and 2015 was $889,666
and $633,593, respectively.
General and administrative expenses:
|
Three Months Ended
September 30,
|
%
Increase/
|
Nine Months Ended
September 30,
|
%
Increase/
|
||
|
2016
|
2015
|
(Decrease)
|
2016
|
2015
|
(Decrease)
|
General
and administrative
|
$2,420,516
|
$2,286,315
|
6%
|
$7,001,520
|
$7,473,416
|
(6%)
|
For
the three months ended September 30, 2016, we incurred general and
administrative expenses of $2,420,516, as compared to $2,286,315
for the same period a year ago. The increase in general and
administrative expenses was primarily due to higher investor
relations expenses of $369,555, higher facility operating costs of
$140,020 and higher payroll related costs of $119,526. These
increases were partially offset by lower stock-based compensation
expenses of $520,375.
Stock-based
compensation expense included in general and administrative
expenses for the three months ended September 30, 2016 and
2015 was $666,556 and $1,186,931,
respectively.
For
the nine months ended September 30, 2016, we incurred general and
administrative expenses of $7,001,520, as compared to $7,473,416
for the same period a year ago. The decrease in general and
administrative expenses was primarily due to lower stock-based
compensation expenses of $237,316, lower investor relations
expenses of $850,998 primarily related to stock issued for services
in the same period last year, as well as lower consulting and
business development expenses of $662,450 primarily related to
stock issued for services in the same period last
year. These decreases were partially offset by increased
facility operating costs of $407,493, professional fees related to
consulting, audit and tax services of $195,589, and increased
business development costs of $396,346.
Stock-based
compensation expense included in general and administrative
expenses for the nine months ended September 30, 2016 and 2015 was
$2,570,326 and $2,333,010, respectively. Stock-based
compensation expense for the nine months ended September 30, 2016
included $592,329 in restricted stock for services.
Interest income and other income (expense):
|
Three Months Ended
September 30,
|
%
Increase/
|
Nine Months Ended
September 30,
|
%
Increase/
|
||
|
2016
|
2015
|
(Decrease)
|
2016
|
2015
|
(Decrease)
|
Interest
and other expense, net
|
$(266,051)
|
$(84)
|
*%
|
$(729,332)
|
$(269)
|
*%
|
*Not
meaningful
Interest
expense, partially offset by other income, amounted to $266,051 and
$84 for the quarters ended September 30, 2016 and 2015,
respectively. The amount for the three months ended September 30,
2016, consisted primarily of $158,735 of interest expense related
to interest on the Company’s term loan from Oxford Finance,
LLC, $47,584 of financing cost amortization, and $59,738 of warrant
amortization.
The
amount for the nine months ended September 30, 2016, was $729,332,
and consisted primarily of $443,175 interest expense related to
interest on the Company’s term loan from Oxford Finance, LLC,
$126,891 of financing cost amortization, and $159,302 of warrant
amortization partially offset by interest income of
$18.
The
fair value of the warrants issued to Oxford Finance, LLC related to
the term loan was recorded as a discount to the value of the note
payable, and is amortized over the term of the loan. In
addition, financing costs incurred related to the term loan are
amortized over the term of the loan.
Critical Accounting Policies and Significant Judgments and
Estimates
Our
management’s discussion and analysis of our financial
condition and results of operations are based on our consolidated
financial statements, which have been prepared in accordance with
generally accepted accounting principles in the United States
(“GAAP”). The preparation of these consolidated
financial statements requires us to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the
consolidated financial statements as well as the reported revenues
and expenses during the reporting periods. On an on-going basis, we
evaluate our estimates and judgments related to our operating
costs. We base our estimates on historical experience and on
various other factors that we believe are 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. Actual results may
differ significantly from these estimates under different
assumptions or conditions.
Our critical accounting policies include:
Revenue
recognition. Revenue from
grants is based upon internal and subcontractor costs incurred that
are specifically covered by the grant, including a facilities and
administrative rate that provides funding for overhead expenses.
NIH grants are recognized when we incur internal expenses that are
specifically related to each grant, in clinical trials at the
clinical trial sites, by subcontractors who manage the clinical
trials, and provided the grant has been approved for payment. U.S.
grant awards are based upon internal research and development costs
incurred that are specifically covered by the grant, and revenues
are recognized when we incur internal expenses that are related to
the approved grant.
Any
amounts received by us pursuant to the NIH grants prior to
satisfying our revenue recognition criteria are recorded as
deferred revenue.
Clinical
trial expenses. We accrue
clinical trial expenses based on work performed. In determining the
amount to accrue, we rely on estimates of total costs incurred
based on the enrollment of subjects, the completion of trials and
other events defined in contracts. We follow this method because we
believe reasonably dependable estimates of the costs applicable to
various stages of a clinical trial can be made. However, the actual
costs and timing of clinical trials are highly uncertain, subject
to risks, and may change depending on a number of factors.
Differences between the actual clinical trial costs and the
estimated clinical trial costs that we have accrued in any prior
period are recognized in the subsequent period in which the actual
costs become known. Historically, these differences have not been
material; however, material differences could occur in the
future.
Stock-based
compensation. Our
stock-based compensation programs include grants of stock options
and restricted stock to employees, non-employee directors and
non-employee consultants. Stock-based compensation cost is measured
at the grant date, based on the calculated fair value of the award,
and is recognized as an expense, under the straight-line method,
over the employee, non-employee director or non-employee
consultant’s requisite service period (generally the vesting
period of the equity grant).
We
account for equity instruments, including stock options and
restricted stock, issued to employees and non-employees in
accordance with authoritative guidance for equity based payments.
Stock options issued are accounted for at their estimated fair
value determined using the Black-Scholes-Merton option-pricing
model and restricted stock is accounted for using the grant date
fair value of our common stock granted. The fair value of options
and restricted stock granted to non-employees is re-measured as
they vest, and the resulting increase in value, if any, is
recognized as expense during the period the related services are
rendered.
Warrant
liability. We calculate the value of our warrant liability on
a quarterly basis, or when other events and circumstances occur,
using as a first step the Black-Scholes-Merton valuation model,
taking into consideration the warrant exercise price, the
probability of certain exercise price re-pricing scenarios, the
market price for the common stock on the date of measurement, the
risk-free interest rate, the dividend yield, the volatility of a
comparable period in which the warrant may be exercised, and the
remaining life of the warrant, and then as a second step we test
our valuation for reasonableness based on settlement offers we have
received from the holder of the warrant. If the settlement offer is
within a reasonable period of time from when we do our calculation,
and is not materially different from the value we recorded using
the Black-Scholes-Merton model, then we retain the value
established with our model. If the settlement offer were to reflect
a materially different amount near the date of our calculation,
then we would record the settlement
offer.
Income
taxes. Significant
judgment is required by management to determine our provision for
income taxes, our deferred tax assets and liabilities, and the
valuation allowance to record against our net deferred tax assets,
which are based on complex and evolving tax regulations throughout
the world. Our tax calculation is impacted by tax rates in the
jurisdictions in which we are subject to tax and the relative
amount of income earned in each jurisdiction. Our deferred tax
assets and liabilities are determined using the enacted tax rates
expected to be in effect for the years in which those tax assets
are expected to be realized.
The
effect of an uncertain income tax position is recognized as the
largest amount that is “more-likely-than-not” to be
sustained under audit by the taxing authority. An uncertain income
tax position will not be recognized if it has less than a 50%
likelihood of being sustained.
The
realization of our deferred tax assets is dependent upon our
ability to generate sufficient future taxable income. We establish
a valuation allowance when it is more-likely-than-not that the
future realization of all or some of the deferred tax assets will
not be achieved. The evaluation of the need for a valuation
allowance is performed on a jurisdiction-by-jurisdiction basis, and
includes a review of all available evidence, both positive and
negative. As of December 31, 2015, the Company concluded that
it was more-likely-than-not that its deferred tax assets would not
be realized, and a full valuation allowance has been
recorded.
The above listing is not intended to be a comprehensive list of all
of our accounting policies. In many cases, the accounting treatment
of a particular transaction is specifically dictated by
GAAP. See our audited consolidated financial statements
and notes thereto included in our 2015 Annual Report on Form 10-K,
which contain additional accounting policies and other disclosures
required by GAAP.
LIQUIDITY AND CAPITAL
RESOURCES
To
date, we have funded our operations primarily through government
grants, proceeds from the sale of common and preferred stock, the
issuance of debt, the issuance of common stock in lieu of cash for
services, payments from collaborators and interest income. We have
experienced negative cash flow from operations each year since our
inception. As of September 30, 2016, we had an accumulated deficit
of $73,152,271. We expect to continue to incur increased expenses,
resulting in losses, over at least the next several years due to,
among other factors, our continuing and planned clinical trials and
anticipated research and development activities. We had cash and
cash equivalents of $6,941,213 as of September 30,
2016.
|
September 30,
2016
|
December 31,
2015
|
Cash
and cash equivalents
|
$6,941,213
|
$4,084,085
|
Working
capital
|
$3,143,459
|
$350,621
|
Current
ratio
|
1.73:1
|
1.07:1
|
|
Nine Months Ended
September 30,
|
|
|
2016
|
2015
|
Cash
provided by (used in):
|
|
|
Operating
activities
|
$(9,622,309)
|
$(7,917,332)
|
Investing
activities
|
$(412,498)
|
$(68,279)
|
Financing
activities
|
$12,891,935
|
$11,047,148
|
Sources and
Uses of Net Cash for the Nine Months Ended September 30,
2016
Net
cash used in operating activities was $9,622,309 for the nine-month
period ended September 30, 2016, compared to $7,917,332 in the
comparable period in 2015. The net cash used in both periods was
primarily attributable to the net losses, adjusted to exclude
certain non-cash items, primarily stock-based compensation and
amortization of finance costs related to the term loan. Net cash
used in operating activities for the nine months ended September
30, 2016 was also impacted by a decrease of $2,476,130 in accounts
payable related primarily to research contract services and receipt
of $757,562 in connection with government grants and government
contracts.
The
net cash used in investing activities for the nine-month
periods ended September 30, 2016 and 2015, amounted to $412,498 and
$68,279, respectively, primarily as a result of purchase of lab
equipment in the corresponding periods.
Net
cash provided by financing activities was $12,891,935 for the nine
months ended September 30, 2016, compared to $11,047,148 in the
comparable period in 2015. Net cash provided by financing
activities for the nine months ended September 30, 2016 was
attributable to the net proceeds from the equity financing
transaction completed in August 2016 and the term loan initiated
during the first quarter of 2016. Net cash provided by financing
activities for the nine months ended September 30, 2015 was
attributable to the net proceeds from the sale of common stock and
warrants in a private placement completed in April
2015.
Future Contractual Obligations
The
Company had rental payment obligations under an operating lease
that expired on July 31, 2015 related to its facility at 11588
Sorrento Valley Road. The Company continued to occupy those
premises until February 4, 2016, and continued the lease on a
month-to-month basis.
On
September 2, 2015, the Company entered into a lease (the
“Lease”) with AGP Sorrento Business Complex, L.P., for
certain premises consisting of a total of approximately 14,971
square feet of office and laboratory space in buildings located at
Suite 400, 11535 Sorrento Valley Rd., San Diego, California,
to serve as the Company’s corporate offices and laboratories
(the “New Premises”). Due to the fact that certain
tenant improvements needed to be made to the New Premises before
the Company could occupy the New Premises, the term of the Lease
commenced on February 4, 2015. The Lease terminates six years after
such term commencement date, unless earlier terminated in
accordance with the Lease. Pursuant to the terms of the Lease, the
monthly base rent is $35,631, subject to annual increases as set
forth in the Lease.
The
Company has an option to extend the Lease term for a single,
five-year period. If the Lease term is extended for the optional
five-year period, the monthly base rent will be adjusted based on
fair market rental value. In addition to rent, the Company agreed
to pay a portion of the taxes and utility, maintenance and other
operating costs paid or accrued in connection with the ownership
and operation of the property.
Our
master lease and sublease of our facility located at the Porter
Drive Facility were terminated on February 28, 2013 and we entered
into a termination agreement with the landlord on February 19, 2013
to voluntarily surrender its premises. As a result of the
termination agreement, we were relieved of further obligations
under the master lease and further rights to rental income under
the sublease and paid a termination fee of approximately $700,000.
In addition to the termination fee, an additional termination fee
of $590,504 is due to the landlord following the Company’s
receipt of $15 million or more in additional financing, in the
aggregate, which was achieved on August 22 ,2016.
We
anticipate that we will continue to incur substantial net losses
into the foreseeable future as we: (i) continue our Phase I
clinical trial for our stand-alone therapeutic HuMab 5b-1, or
MVT-5873, which was initiated in the first quarter of 2016, (ii)
initiate our Phase I clinical trial of our PET imaging agent
89Zr-HuMab-5B1, or MVT-2163, (iii) continue to conduct preclinical
development activities related to other product development
candidates in our library, and (iv) monitor patients in clinical
trials that have already completed their treatment regimens. Based
on management’s assumptions for continuing to develop its
existing pipeline of products without additional funding, we expect
we will have sufficient funds to meet our obligations through May
2017.
We
plan to continue to fund our research and development and operating
activities through public or private equity financings, debt
financings, strategic partnerships or other arrangements with
organizations that have capabilities and/or products that are
complementary to our own capabilities and/or products, licensing
arrangements, government grants, or other arrangements. However, we
cannot be sure that such additional funds will be available on
reasonable terms, or at all. If we are unable to secure adequate
additional funding, we may be forced to reduce spending, extend
payment terms with suppliers, liquidate assets where possible,
and/or suspend or curtail planned programs. In addition, if we do
not meet our payment obligations to third parties as they come due,
we may be subject to litigation claims. Even if we are successful
in defending against these claims, litigation could result in
substantial costs and be a distraction to our management. Any of
these actions could materially harm our business, results of
operations, and future prospects.
If
we raise additional funds by issuing equity securities, substantial
dilution to our existing stockholders would result. If we raise
additional funds by incurring debt financing, the terms of the debt
may involve significant cash payment obligations as well as
covenants and specific financial ratios that may restrict our
ability to operate our business.
Recent Accounting Pronouncements
In
February 2016, the FASB issued ASU 2016-2, "Leases (Topic
842)." This update will increase transparency and
comparability by recognizing lease assets and lease liabilities on
the balance sheet and disclosing key information about leasing
arrangements. Under the new guidance, lessees will be
required to recognize the following for all leases (with the
exception of short-term leases) at the commencement date: (i) a
lease liability, which is a lessee’s obligation to make lease
payments arising from a lease, measured on a discounted basis and
(ii) a right-of-use asset, which is an asset that represents the
lessee’s right to use, or control the use of, a specified
asset for the lease term. Under the new guidance, lessor accounting
is largely unchanged, and it simplified the accounting for sale and
leaseback transactions. Lessees will no longer be provided with a
source of off-balance sheet financing. Lessees (for capital and
operating leases) and lessors (for sales-type, direct financing,
and operating leases) must apply a modified retrospective
transition approach for leases existing at, or entered into after,
the beginning of the earliest comparative period presented in the
financial statements. The modified retrospective approach would not
require any transition accounting for leases that expired before
the earliest comparative period presented. Lessees and lessors may
not apply a full retrospective transition approach. The standard is
effective for fiscal years beginning after December 15, 2018,
including interim periods within those fiscal years. We are
currently in the process of assessing what impact this new standard
may have on our consolidated financial statements.
In
March 2016, the FASB issued ASU 2016-09,
“Compensation—Stock Compensation (Topic 718):
Improvements to Employee Share-Based Payment Accounting.”
This update includes multiple provisions intended to simplify
various aspects of the accounting for share-based payment
transactions including accounting for excess tax benefits and tax
deficiencies, classification of excess tax benefits in the
statement of cash flows and accounting for award forfeitures. This
update is effective for annual and interim reporting periods of
public entities beginning after December 15, 2016, with early
adoption permitted. The Company is evaluating the impact of ASU
2016-09 on its consolidated financial statements.
Management
does not believe that any other recently issued, but not yet
effective, accounting standards if currently adopted would have a
material effect on the accompanying condensed consolidated
financial statements.
Off-Balance Sheet Arrangements
We
have no material off-balance sheet arrangements.
Item 3.
Quantitative and Qualitative Disclosures About
Market Risk.
Not
applicable.
Item 4.
Controls and
Procedures.
Disclosure Controls and Procedures
As
required by Rules 13a-15 and 15d-15 of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), the Company
has evaluated, with the participation of management, including the
Chief Executive Officer and the Chief Financial Officer, the
effectiveness of its disclosure controls and procedures (as defined
in such rules) as of the end of the period covered by this report.
The Chief Executive Officer and Chief Financial Officer concluded
that the Company’s disclosure controls and procedures are
effective as of September 30, 2016.
Because
of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Projections of
any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or
procedures may deteriorate. Management recognizes that
any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving their
objectives and management necessarily applies its judgment in
evaluating the cost-benefit relationship of possible controls and
procedures.
Changes in Internal Control over Financial Reporting
As
required by Rule 13a-15(d) of the Exchange Act, our management,
including our principal executive officer and our principal
financial officer, conducted an evaluation of the internal control
over financial reporting to determine whether any changes occurred
during the period covered by this Quarterly Report on Form 10-Q
that have materially affected, or are reasonably likely to
materially affect, our internal control over financial
reporting. Based on that evaluation, our principal
executive officer and principal financial officer concluded there
were no changes in our internal controls over financial reporting
(as defined in Rule 13a-15(f) under the Exchange Act) that could
significantly affect internal controls over financial reporting as
of September 30, 2016.
PART II. OTHER
INFORMATION
Item 1.
Legal
Proceedings.
None.
Other
than as set forth in our Quarterly Report on Form 10-Q for the
quarter ended June 30, 2016, there have been no material changes to
the Risk Factors set forth in our Annual Report on Form 10-K for
the year ended December 31, 2015.
Item 2.
Unregistered
Sales of Equity Securities and Use of Proceeds.
Series D Conversions
During
the quarter ended September 30, 2016, holders of Series D preferred
stock converted 40,799 shares of Series D preferred stock into
551,339 shares of common stock.
The
securities referenced above were issued in reliance on the
exemption from registration afford by Rule 506 of Regulation D
and/or Section 4(a)(2) of the Securities Act as a transaction by an
issuer not involving a public offering.
Item 3.
Defaults Upon Senior
Securities.
None.
Item 4.
Mine Safety
Disclosures.
None.
Item
5. Other Information.
None.
Item 6.
Exhibits.
EXHIBIT INDEX
Exhibits
Exhibit No.
|
Description
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
|
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
|
32
|
Certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
101
|
Interactive
data file
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
|
|
|
Date:
November 7, 2016
|
MABVAX
THERAPEUTICS HOLDINGS, INC.
|
|
|
|
|
|
By:
|
/s/
J. David Hansen
|
|
|
J.
David Hansen
|
|
|
President
and Chief Executive Officer (Principal Executive Officer authorized
to sign on behalf of the registrant)
|
|
|
|
|
|
|
|
By:
|
/s/
Gregory P. Hanson
|
|
|
Gregory
P. Hanson
|
|
|
Chief
Financial Officer (Principal Financial and Accounting Officer
authorized to sign on behalf of the registrant)
|
-32-