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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 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: 001-40367

VACCITECH PLC

(Exact Name of Registrant as Specified in its Charter)

England and Wales

Not Applicable

(State or other jurisdiction of
incorporation
or organization)

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

The Schrodinger Building

Heatley Road

The Oxford Science Park

Oxford, United Kingdom

OX4 4GE

(Address of principal executive offices)

(Zip Code)

Registrants telephone number, including area code: +44 (0) 1865 818 808

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

American Depositary Shares*

VACC

The Nasdaq Global Market

Ordinary shares, nominal value £0.000025 per share**

*American Depositary Shares may be evidenced by American Depositary Receipts. Each American Depositary Share represents one (1) ordinary share.

**Not for trading, but only in connection with the listing of American Depositary Shares on The Nasdaq Global Market.

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

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

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

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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

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

As of August 12, 2021, the registrant had 34,328,231 ordinary shares, nominal value £0.000025 per share, outstanding.

Table of Contents

Table of Contents

Page

PART I - FINANCIAL INFORMATION

1

Item 1.

Financial Statements

1

Item 2.

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

17

Item 3.

Quantitative and Qualitative Disclosure 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

31

Item 3.

Defaults Upon Senior Securities

32

Item 4.

Mine Safety Disclosures

32

Item 5.

Other Information

32

Item 6.

Exhibits

32

SIGNATURES

33

We own various trademark registrations and applications, and unregistered trademarks, including our name and our corporate logo. We have an exclusive license to use and display the Vaccitech registered trademark in order to commercialize Vaccitech in the United Kingdom. All other trade names, trademarks and service marks of other companies appearing in this prospectus are the property of their respective holders. Solely for convenience, the trademarks and trade names in this prospectus may be referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend to use or display other companies’ trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

From time to time, we may use our website, our Facebook page at Facebook.com/Vaccitech, our Twitter account at @Vaccitechplc and our LinkedIn account at linkedin.com/company/Vaccitech-plc/ to distribute material information. Our financial and other material information is routinely posted to and accessible on the Investors section of our website, available at www.vaccitech.co.uk. Investors are encouraged to review the Investors section of our website because we may post material information on that site that is not otherwise disseminated by us. Information that is contained in and can be accessed through our website, our Facebook page, our Twitter posts and our LinkedIn posts are not incorporated into, and does not form a part of, this Quarterly Report.

i

Table of Contents

PART I -  FINANCIAL INFORMATION

Item 1.   Financial Statements.

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Condensed Consolidated Financial Statements (Unaudited)

Page

Condensed Consolidated Balance Sheets

2

Condensed Consolidated Statements of Operations and Comprehensive Loss

3

Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Shares and Shareholders’ Equity (Deficit)

4

Condensed Consolidated Statements of Cash Flows

6

Notes to Condensed Consolidated Financial Statements

7

1

Table of Contents

VACCITECH PLC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE AMOUNTS)

(UNAUDITED)

    

June 30,

    

December 31,

 

    

 2021

    

 2020

 

ASSETS

 

  

 

  

Current assets:

 

  

 

  

Cash and cash equivalents

$

243,619

$

43,266

Accounts receivable

 

37

 

518

Research and development incentives receivable

 

4,558

 

2,708

Prepaid expenses and other current assets

 

8,514

 

1,409

Total current assets

 

256,728

 

47,901

Property and equipment, net

 

1,038

 

629

Right of use assets, net

 

2,040

 

2,136

Deferred tax assets

32

Total assets

$

259,838

$

50,666

LIABILITIES, REDEEMABLE PREFERRED SHARES AND SHAREHOLDERS’ DEFICIT

Current liabilities:

 

  

 

  

Accounts payable

$

4,683

$

4,667

Accrued expenses and other current liabilities

 

3,441

 

2,537

Deferred revenue

 

217

 

245

Current portion of lease liability

 

202

 

192

Total current liabilities

 

8,543

 

7,641

Convertible loan notes – non current

 

 

44,700

Lease liability – non current

 

1,384

 

1,472

Total liabilities

$

9,927

$

53,813

Commitments and contingencies (Note 11)

 

  

 

  

Series A redeemable convertible preferred shares (Series A shares); £0.10 nominal value; no shares issued and outstanding; (December 31, 2020: issued and outstanding: 22,065)

$

$

33,765

Series B redeemable convertible preferred shares (Series B shares); £0.10 nominal value; no shares issued and outstanding; (December 31, 2020: issued and outstanding: no shares issued or outstanding)

$

$

Shareholders’ equity/(deficit):

 

  

 

  

Ordinary shares, £0.000025 nominal value; 34,328,231 shares authorized, issued and outstanding (December 31, 2020: authorized, issued and outstanding: 7,960,458)

 

1

 

0

1

Deferred A shares, £1 nominal value; 63,443 shares authorized, issued and outstanding (December 31, 2020:no shares issued or outstanding)

 

86

 

Deferred B shares, £1 nominal value; 570,987 shares authorized, issued and outstanding (December 31, 2020: no shares issued or outstanding)

8

Deferred C shares, £0,000007 nominal value, 27,828,231 shares authorized, issued and outstanding (December 31, 2020: authorized, issued and outstanding: 7,960,458)

 

0

1

 

0

1

Additional paid-in capital

 

340,793

 

21,660

Accumulated deficit

 

(88,915)

 

(57,720)

Accumulated other comprehensive loss – foreign currency translation adjustments

 

(2,580)

 

(1,243)

Noncontrolling interest

 

518

 

391

Total shareholders’ equity/(deficit)

$

249,911

 $

(36,912)

Total liabilities, redeemable convertible preferred shares and shareholders’ equity

$

259,838

 $

50,666

1 indicates amount less than thousand

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2

Table of Contents

VACCITECH PLC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(IN THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE AMOUNTS)

(UNAUDITED)

Three months ended

Six months ended

    

June 30, 2021

    

June 30, 2020

    

June 30, 2021

    

June 30, 2020

License revenue

$

16

$

39

32

42

Service revenue

 

 

97

 

21

 

316

Research grants and contracts

 

19

 

375

 

197

 

858

Total revenue

 

35

 

511

 

250

 

1,216

Operating expenses

 

  

 

  

 

  

 

  

Research and development

 

4,509

 

3,877

 

9,119

 

8,119

General and administrative

 

12,371

 

970

 

14,148

 

2,082

Total operating expenses

 

16,880

 

4,847

 

23,267

 

10,201

Loss from operations

 

(16,845)

 

(4,336)

 

(23,017)

 

(8,985)

Other income (expense):

 

  

 

  

 

  

 

  

Change in fair value of derivatives

 

 

 

5,994

 

Unrealized exchange gain on convertible loan notes

 

 

 

209

 

Loss on extinguishment of convertible loan notes

 

 

 

(13,789)

 

Interest income

 

 

 

2

 

Interest expense

 

 

 

(2,650)

 

Research and development incentives

 

875

 

679

 

1,830

 

1,377

Other

(3)

(3)

Total other (expense) income

 

872

 

679

 

(8,407)

 

1,377

Tax (expense)/benefit

 

(12)

 

 

53

 

Net loss

 

(15,985)

 

(3,657)

 

(31,371)

 

(7,608)

Net loss attributable to noncontrolling interest

 

58

 

69

 

176

 

199

Net loss attributable to Vaccitech Plc. shareholders

 

(15,927)

 

(3,588)

 

(31,195)

 

(7,409)

Weighted-average ordinary shares outstanding, basic and diluted

 

24,897,665

 

7,904,838

 

16,523,961

 

7,860,760

Net loss per share attributable to ordinary shareholders, basic and diluted

$

(0.64)

$

(0.45)

(1.89)

(0.94)

Net loss

$

(15,985)

$

(3,657)

(31,371)

(7,608)

Other comprehensive income/(loss) – foreign currency translation adjustments

 

86

 

(144)

 

(1,330)

 

(827)

Comprehensive loss

 

(15,899)

 

(3,801)

 

(32,701)

 

(8,435)

Comprehensive loss attributable to noncontrolling interest

 

55

 

70

 

169

 

218

Comprehensive loss attributable to Vaccitech Plc. shareholders

$

(15,844)

$

(3,731)

(32,532)

(8,217)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

Table of Contents

VACCITECH PLC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED SHARES

AND SHAREHOLDERS’ EQUITY (DEFICIT)

(IN THOUSANDS, EXCEPT NUMBER OF SHARES)

(UNAUDITED)

Six months ended June 30, 2021

Series A

Series B 

Redeemable

Redeemable 

Accumulated

Convertible Preferred

Convertible

Additional

Other

Total

Shares

Preferred Shares

Ordinary Shares

Deferred A Shares

Deferred B Shares

Deferred C Shares

Paid-in-

Accumulated

Comprehensive

Noncontrolling

Shareholders’

    

Shares

    

Amount

    

Shares

    

Amount

 

  

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

capital

    

Deficit

    

Loss

    

Interest

    

 Deficit

Balance, January 1, 2021, as previously reported

 

22,065

$

33,765

 

$

 

7,960,458

$

0

1

$

$

7,960,458

$

0

1

 $

19,531

$

(55,591)

$

(1,243)

$

391

$

(36,912)

Share based compensation – restatement (see note 1)

2,129

(2,129)

$

Balance, January 1, 2021, as restated

22,065

$

33,765

$

7,960,458

$

0

1

$

$

7,960,458

$

0

1

 $

21,660

 $

(57,720)

 $

(1,243)

 $

391

$

(36,912)

Share based compensation

 

 

 

 

 

 

 

 

 

 

 

797

 

 

 

 

797

Issue of Series B shares, net of issuance costs

 

 

 

28,957

 

121,837

 

 

 

 

 

 

 

 

 

 

 

Series B Shares issued on conversion of convertible notes

 

 

 

12,421

 

53,721

 

 

 

 

 

 

 

 

 

 

 

Issue of Deferred A shares

 

 

(29)

 

 

(57)

 

 

 

63,443

 

86

 

 

 

 

 

 

 

86

Issue of ordinary shares

 

 

 

 

 

263,886

 

0

1

 

 

263,886

 

0

1

 

 

 

 

 

(0)

1

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,420)

 

4

 

(1,416)

Net loss

(15,268)

(118)

(15,386)

Balance, March 31, 2021

22,065

$

33,736

41,378

$

175,501

8,224,344

$

0

1

63,443

$

86

$

8,224,344

$

0

1

$

22,457

$

(72,988)

$

(2,663)

$

277

$

(52,831)

Share based compensation

8,736

8,736

Initial public offering, net of underwriting discounts

6,500,000

0

1

102,765

102,765

Offering Cost

(2,394)

(2,394)

Conversion of Series A shares

(22,065)

(33,736)

6,818,085

0

1

198,585

3

6,818,085

0

1

33,733

33,736

Conversion of Series B shares

(41,378)

(175,501)

12,785,802

0

1

372,402

5

12,785,802

0

1

175,496

175,501

Issue of share to non-controlling interest

296

296

Foreign currency translation adjustments

83

3

86

Net loss

(15,927)

(58)

(15,985)

Balance, June 30, 2021

$

$

34,328,231

$

1

63,443

$

86

570,987

$

8

27,828,231

$

0

1

$

340,793

$

(88,915)

$

(2,580)

$

518

$

249,911

1 Indicates amount less than thousand

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

4

Table of Contents

VACCITECH PLC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED SHARES

AND SHAREHOLDERS’ EQUITY (DEFICIT)

(IN THOUSANDS, EXCEPT NUMBER OF SHARES)

(UNAUDITED)

Six months ended June 30, 2020

 

Series A

Series B 

 

Redeemable

Redeemable 

Accumulated

 

Convertible Preferred

Convertible

Additional

Other

Total

 

Shares

Preferred Shares

Ordinary Shares

Deferred A Shares

Deferred B Shares

Deferred C Shares

Paid-in-

Accumulated

Comprehensive

Noncontrolling

Shareholders’

    

Shares

    

Amount

    

Shares

    

Amount

 

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

capital

    

Deficit

    

Loss

    

Interest

    

 Deficit

 

Balance, January 1, 2020, as previously reported

 

22,065

$

33,765

 

$

 

7,276,332

$

0

1

$

$

7,276,332

$

0

1

$

15,906

$

(37,885)

$

(467)

$

367

$

(22,079)

Share based compensation - restatement (see note 1)

  

2,129

(2,129)

Balance, January 1, 2020, as restated

22,065

$

33,765

$

7,276,332

$

0

1

$

$

7,276,332

$

0

1

$

18,035

$

(40,014)

$

(467)

$

367

$

(22,079)

Share based compensation

 

 

 

  

 

  

 

  

 

  

 

  

 

  

  

 

  

  

 

  

 

856

 

  

 

  

 

  

 

856

Issue of ordinary shares

 

 

 

 

  

 

479,568

 

0

1

  

 

  

  

 

  

479,568

 

0

1

 

  

 

  

 

  

 

  

 

(0)

1

Exercise of stock options

 

 

 

 

  

 

148,938

 

0

1

  

 

  

  

 

  

148,938

 

0

1

 

  

 

  

 

  

 

  

 

(0)

1

Foreign currency translation adjustments

 

 

 

 

  

 

  

 

  

 

  

 

  

  

 

  

  

 

  

 

  

 

  

 

(665)

 

(18)

 

(683)

Net loss

 

 

 

 

  

 

  

 

  

 

  

 

  

  

 

  

  

 

  

 

  

 

(3,821)

 

 

(130)

 

(3,951)

Balance, March 31, 2020