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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                      

Commission File Number: 001-40794

 

DICE THERAPEUTICS, INC.

 

 

Delaware

 

47-2286244

( State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

279 E. Grand Avenue, Suite 300

South San Francisco, California

 

94080

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: (650) 566-1420

 

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

DICE

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

  

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of October 31, 2021, the registrant had 38,231,415 shares of common stock, $0.0001 par value per share, outstanding.

 

 

 


 

Table of Contents

 

 

 

Page no.

PART I: FINANCIAL INFORMATION

1

Item 1.

Financial Statements (Unaudited)

 

 

Condensed Consolidated Balance Sheets

1

 

Condensed Consolidated Statements of Operations and Comprehensive Loss

2

 

Condensed Consolidated Statements of Convertible Preferred Units and Stockholders’ Equity/Members’ (Deficit)

3

 

Condensed Consolidated Statement of Cash Flows

5

 

Notes to Condensed Consolidated Financial Statements

6

Item 2.

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

19

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

29

Item 4.

Controls and Procedures

29

 

 

PART II: OTHER INFORMATION

30

Item 1.

Legal Proceedings

30

Item 1A.

Risk Factors

30

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

90

Item 3.

Defaults Upon Senior Securities

91

Item 4.

Mine Safety Disclosures

91

Item 5.

Other Information

91

Item 6.

Exhibits

91

Signatures

 

94

 

 


i


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “expect,” “predict,” “potential” and similar expressions that convey uncertainty of future events or outcomes, although not all forward-looking statements contain these words. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Risk factors” and elsewhere in this filing. Moreover, we operate in a competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. The forward-looking statements in this Quarterly Report include, among other things, statements about:

 

our ability to obtain funding for our operations, including funding necessary to complete the development and commercialization of our therapeutic candidates;

 

the timing of and our ability to obtain and maintain regulatory approvals for our therapeutic candidates;

 

future agreements with third parties in connection with the commercialization of our therapeutic candidates;

 

the success, cost and timing of our therapeutic candidate development activities and planned clinical trials;

 

our expectations regarding the impact of the COVID-19 pandemic and its potentially material adverse impact on our business, the macroeconomy, and the execution of our preclinical studies and clinical trials;

 

the rate and degree of market acceptance and clinical utility of our therapeutic candidates;

 

our commercialization, marketing and manufacturing capabilities and strategy;

 

the success of competing therapies that are or may become available;

 

our ability to attract and retain key management and technical personnel;

 

our expectations regarding our ability to obtain, maintain and enforce intellectual property protection for our therapeutic candidates;

 

our use of our existing cash, cash equivalents, and marketable securities; and

 

our estimates regarding expenses, future revenue, capital requirements and needs for additional financing.

The forward-looking statements made in this filing relate only to events or information as of the date on which the statements are made in this Quarterly Report. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report to conform these statements to actual results or to changes in our expectations, except as required by law. We intend the forward-looking statements contained in this Quarterly Report to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act).

 

ii


 

PART I: FINANCIAL INFORMATION

 

DICE THERAPEUTICS, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except unit and share amounts)

 

 

September 30,

2021

 

 

December 31,

2020 (1)

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

311,610

 

 

$

59,687

 

Marketable securities

 

 

24,052

 

 

 

 

Unbilled receivable

 

 

2,000

 

 

 

2,000

 

Restricted cash, current

 

 

150

 

 

 

 

Prepaid expenses and other current assets

 

 

2,976

 

 

 

364

 

Total current assets

 

 

340,788

 

 

 

62,051

 

Property and equipment, net

 

 

1,396

 

 

 

1,656

 

Restricted cash

 

 

198

 

 

 

149

 

Other assets

 

 

 

 

 

5

 

TOTAL ASSETS

 

$

342,382

 

 

$

63,861

 

LIABILITIES, CONVERTIBLE PREFERRED STOCK, AND

   STOCKHOLDERS’ EQUITY/MEMBERS’ (DEFICIT)

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Accounts payable

 

$

4,108

 

 

$

5,086

 

Accrued expenses and other liabilities

 

 

8,367

 

 

 

2,981

 

Capital lease obligations

 

 

 

 

 

98

 

Deferred revenue

 

 

 

 

 

1,125

 

Term loan, current portion

 

 

245

 

 

 

 

Total current liabilities

 

 

12,720

 

 

 

9,290

 

Deferred rent

 

 

20

 

 

 

28

 

Term loan, noncurrent

 

 

2,122

 

 

 

 

Warrant liability

 

 

 

 

 

314

 

TOTAL LIABILITIES

 

 

14,862

 

 

 

9,632

 

Commitments and contingencies (Note 5)

 

 

 

 

 

 

 

 

Convertible preferred units; no par value; no units and 61,498,146 units authorized as of

    September 30, 2021 and December 31, 2020, respectively; no units and 12,690,540 units

    issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

 

 

 

 

 

107,374

 

STOCKHOLDERS’ EQUITY/ MEMBERS’ (DEFICIT)

 

 

 

 

 

 

 

 

Preferred stock; $0.0001 par value; 10,000,000 shares and no shares authorized as of

    September 30, 2021 and December 31, 2020, respectively; no shares issued and

    outstanding

 

 

 

 

 

 

Common units; no par value; no units and 89,000,000 units authorized as of

   September 30, 2021 and December 31, 2020, respectively; no units and 2,248,687 units

   issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

 

 

 

 

 

 

Common stock; $0.0001 par value; 500,000,000 shares and no shares authorized

   as of September 30, 2021 and December 31, 2020, respectively; 38,231,415 and no shares

   issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

 

 

4

 

 

 

 

Additional paid-in capital

 

 

415,030

 

 

 

1,603

 

Accumulated deficit

 

 

(87,512

)

 

 

(54,748

)

Accumulated other comprehensive loss

 

 

(2

)

 

 

 

TOTAL STOCKHOLDERS’ EQUITY/ MEMBERS’ (DEFICIT)

 

 

327,520

 

 

 

(53,145

)

TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND

   STOCKHOLDERS’ EQUITY/ MEMBERS’ (DEFICIT)

 

$

342,382

 

 

$

63,861

 

See accompanying notes.

(1)

The condensed consolidated balance sheet as of December 31, 2020 is derived from the audited consolidated financial statements as of that date.

1


 

DICE THERAPEUTICS, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(In thousands, except share and per share amounts)

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Collaboration revenue

 

$

 

 

$

225

 

 

$

1,125

 

 

$

675

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

11,689

 

 

 

4,457

 

 

 

24,292

 

 

 

13,520

 

General and administrative

 

 

4,444

 

 

 

1,750

 

 

 

8,226

 

 

 

3,813

 

Total operating expenses

 

 

16,133

 

 

 

6,207

 

 

 

32,518

 

 

 

17,333

 

Loss from operations

 

 

(16,133

)

 

 

(5,982

)

 

 

(31,393

)

 

 

(16,658

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income, net

 

 

20

 

 

 

7

 

 

 

61

 

 

 

152

 

Interest expense

 

 

(60

)

 

 

(3

)

 

 

(114

)

 

 

(11

)

Change in fair value of warrant liability

 

 

(1,162

)

 

 

(38

)

 

 

(1,318

)

 

 

(92

)

Net loss

 

$

(17,335

)

 

$

(6,016

)

 

$

(32,764

)

 

$

(16,609

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on marketable securities

 

 

(2

)

 

 

(2

)

 

 

(2

)

 

 

(8

)

Comprehensive loss

 

$

(17,337

)

 

$

(6,018

)

 

$

(32,766

)

 

$

(16,617

)

Net loss per share, basic and diluted

 

$

(2.30

)

 

$

(2.68

)

 

$

(8.12

)

 

$

(7.39

)

Weighted-average shares used in computing net loss per share,

   basic and diluted

 

 

7,551,128

 

 

 

2,248,687

 

 

 

4,035,590

 

 

 

2,248,687

 

 

See accompanying notes.

 

 

2


 

 

DICE THERAPEUTICS, INC.

Condensed Consolidated Statements of Convertible Preferred Units and Stockholders’ Equity/ Members’ (Deficit)

(Unaudited)

(In thousands, except member unit data and share amounts)

 

 

 

Convertible

Preferred Units

 

 

 

Common Units

 

 

Common Stock

 

 

Additional

paid-in

 

 

Accumulated

 

 

Accumulated

other

comprehensive

 

 

Total

Stockholders’

equity/

members’

 

 

 

Units

 

 

Amount

 

 

 

Units

 

 

Amount

 

 

Shares

 

 

Amount

 

 

capital

 

 

deficit

 

 

income (loss)

 

 

(deficit)

 

Balances as of December 31, 2020

 

 

12,690,540

 

 

$

107,374

 

 

 

 

2,248,687

 

 

$

 

 

 

 

 

$

 

 

$

1,603

 

 

$

(54,748

)

 

$

 

 

$

(53,145

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

347

 

 

 

 

 

 

 

 

 

347

 

Other comprehensive gain (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7

)

 

 

(7

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,066

)

 

 

 

 

 

(8,066

)

Balances as of March 31, 2021

 

 

12,690,540

 

 

 

107,374

 

 

 

 

2,248,687

 

 

 

 

 

 

 

 

 

 

 

 

1,950

 

 

 

(62,814

)

 

 

(7

)

 

 

(60,871

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

396

 

 

 

 

 

 

 

 

 

396

 

Tax distributions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(60

)

 

 

 

 

 

 

 

 

(60

)

Other comprehensive gain (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 

 

 

7

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,363

)

 

 

 

 

 

(7,363

)

Balances as of June 30, 2021

 

 

12,690,540

 

 

 

107,374

 

 

 

 

2,248,687

 

 

 

 

 

 

 

 

 

 

 

 

2,286

 

 

 

(70,177

)

 

 

 

 

 

(67,891

)

Issuance of Series C convertible preferred

   units, net of issuance costs of $1,132

 

 

2,619,994

 

 

 

26,044

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of Series C-1 convertible preferred

   units, net of issuance costs of $319

 

 

4,446,056

 

 

 

59,705

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of convertible preferred, common

   and profit interest units to common stock

 

 

(19,756,590

)

 

 

(193,123

)

 

 

 

(2,248,687

)

 

 

 

 

 

24,366,797

 

 

 

2

 

 

 

193,121

 

 

 

 

 

 

 

 

 

193,123

 

Conversion of preferred unit warrants to

   common stock warrants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

535

 

 

 

 

 

 

 

 

 

535

 

Issuance of common stock in connection

   with initial public offering, net of issuance

   costs of $19,864

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13,800,000

 

 

 

2

 

 

 

214,706

 

 

 

 

 

 

 

 

 

214,708

 

Net exercise of common stock warrants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

64,648

 

 

 

 

 

 

1,224

 

 

 

 

 

 

 

 

 

1,224

 

Settlement of fractional shares resulting from

   reverse stock split

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(30

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,158

 

 

 

 

 

 

 

 

 

3,158

 

Other comprehensive gain (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2

)

 

 

(2

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,335

)

 

 

 

 

 

(17,335

)

Balances as of September 30, 2021

 

 

 

 

$

 

 

 

 

 

 

$

 

 

 

38,231,415

 

 

$

4

 

 

$

415,030

 

 

$

(87,512

)

 

$

(2

)

 

$

327,520

 

 

See accompanying notes.

 

 

3


 

 

DICE THERAPEUTICS, INC.

Condensed Consolidated Statements of Convertible Preferred Units and Members’ Deficit

(Unaudited)

(In thousands, except member unit data and share amounts)

 

 

 

Convertible

Preferred Units

 

 

 

Common Units

 

 

Additional

paid-in

 

 

Accumulated

 

 

Accumulated

other

comprehensive

 

 

Total

members’

 

 

 

Units

 

 

Cost

 

 

 

Units

 

 

Cost

 

 

capital

 

 

deficit

 

 

income (loss)

 

 

deficit

 

Balances as of December 31, 2019

 

 

7,450,911

 

 

$

55,692

 

 

 

 

2,248,687

 

 

$

 

 

$

1,378

 

 

$

(31,009

)

 

$

8

 

 

$

(29,623

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

127

 

 

 

 

 

 

 

 

 

127

 

Other comprehensive gain (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(13

)

 

 

(13

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,031

)

 

 

 

 

 

(5,031

)

Balances as of March 31, 2020

 

 

7,450,911

 

 

 

55,692

 

 

 

 

2,248,687

 

 

 

 

 

 

1,505

 

 

 

(36,040

)

 

 

(5

)

 

 

(34,540

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

130

 

 

 

 

 

 

 

 

 

130

 

Other comprehensive gain (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 

 

 

7

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,562

)