rapt-10q_20200930.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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, 2020

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: 001-38997

 

RAPT Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

47-3313701

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification Number)

561 Eccles Avenue

South San Francisco, California 94080

(Address of principal executive offices and zip code)

(650) 489-9000 

(Registrant’s telephone number, including area code)

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

 

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock $0.0001 par value per share

RAPT

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 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 November 10, 2020, there were 24,555,259 shares of the registrants common stock outstanding.

 

 


RAPT THERAPEUTICS, INC.

TABLE OF CONTENTS

 

 

 

 

Page No.

PART I. FINANCIAL INFORMATION

 

 

 

 

 

 

Item 1.

Financial Statements (Unaudited)

 

3

 

Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019

 

3

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2020 and 2019

 

4

 

Condensed Consolidated Statement of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2020 and Condensed Consolidated Statement of Convertible Preferred Stock and Stockholders’ Deficit for the Three and Nine Months Ended September 30, 2019

 

5

 

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2019

 

7

 

Notes to Condensed Consolidated Financial Statements

 

8

Item 2.

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

 

16

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

23

Item 4.

Controls and Procedures

 

23

 

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

24

Item 1A.

Risk Factors

 

24

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

61

Item 3.

Defaults Upon Senior Securities

 

61

Item 4.

Mine Safety Disclosures

 

61

Item 5.

Other Information

 

61

Item 6.

Exhibits

 

62

Signatures

 

63

 

 


PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

 

RAPT THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

 

September 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

(Note 2)

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

20,229

 

 

$

77,383

 

Marketable securities

 

 

102,557

 

 

 

 

Prepaid expenses and other current assets

 

 

2,722

 

 

 

3,123

 

Total current assets

 

 

125,508

 

 

 

80,506

 

Property and equipment, net

 

 

3,073

 

 

 

3,707

 

Other assets

 

 

389

 

 

 

389

 

Total assets

 

$

128,970

 

 

$

84,602

 

Liabilities and stockholders' equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

4,405

 

 

$

1,143

 

Accrued expenses

 

 

5,669

 

 

 

3,642

 

Deferred revenue, current

 

 

5,128

 

 

 

4,000

 

Other current liabilities

 

 

389

 

 

 

471

 

Total current liabilities

 

 

15,591

 

 

 

9,256

 

Deferred rent, net of current portion

 

 

2,200

 

 

 

2,225

 

Deferred revenue, non-current

 

 

1,132

 

 

 

 

Commitments

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

 

Preferred stock

 

 

 

 

 

 

Common stock

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

312,078

 

 

 

235,049

 

Accumulated other comprehensive income

 

 

74

 

 

 

20

 

Accumulated deficit

 

 

(202,107

)

 

 

(161,950

)

Total stockholders' equity

 

 

110,047

 

 

 

73,121

 

Total liabilities and stockholders' equity

 

$

128,970

 

 

$

84,602

 

 

 

 

See accompanying notes to condensed consolidated financial statements.

3


RAPT THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)

(Unaudited)

 

 

 

Three Months

 

 

Nine Months

 

 

 

September 30,

 

 

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenue

 

$

1,528

 

 

$

 

 

$

3,740

 

 

$

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

12,912

 

 

 

8,582

 

 

 

34,581

 

 

 

24,720

 

General and administrative

 

 

3,197

 

 

 

1,733

 

 

 

9,288

 

 

 

6,094

 

Total operating expenses

 

 

16,109

 

 

 

10,315

 

 

 

43,869

 

 

 

30,814

 

Loss from operations

 

 

(14,581

)

 

 

(10,315

)

 

 

(40,129

)

 

 

(30,814

)

Other income, net

 

 

237

 

 

 

344

 

 

 

763

 

 

 

1,033

 

Net loss before taxes

 

 

(14,344

)

 

 

(9,971

)

 

 

(39,366

)

 

 

(29,781

)

Provision for income taxes

 

 

287

 

 

 

 

 

 

791

 

 

 

 

Net loss

 

$

(14,631

)

 

$

(9,971

)

 

$

(40,157

)

 

$

(29,781

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

(70

)

 

 

15

 

 

 

(65

)

 

 

17

 

Unrealized gain (loss) on marketable securities

 

 

(33

)

 

 

 

 

 

119

 

 

 

 

Total comprehensive loss

 

$

(14,734

)

 

$

(9,956

)

 

$

(40,103

)

 

$

(29,764

)

Net loss per share, basic and diluted

 

$

(0.60

)

 

$

(12.41

)

 

$

(1.67

)

 

$

(40.15

)

Weighted average number of shares used in computing net loss

   per share, basic and diluted

 

 

24,449,115

 

 

 

803,229

 

 

 

23,989,926

 

 

 

741,711

 

 

 

 

See accompanying notes to condensed consolidated financial statements.

 

4


RAPT THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(In thousands, except share amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Other

 

 

Total

 

 

 

 

Common Stock

 

 

Paid-In

 

 

Accumulated

 

 

Comprehensive

 

 

Stockholders'

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income

 

 

Equity

 

Balance at December 31, 2019

 

 

 

21,833,037

 

 

$

2

 

 

$

235,049

 

 

$

(161,950

)

 

$

20

 

 

$

73,121

 

Issuance of common stock, net of issuance costs

 

 

 

2,500,000

 

 

 

 

 

 

69,842

 

 

 

 

 

 

 

 

 

69,842

 

Issuance of common stock upon exercise of stock

   options, net of repurchase

 

 

 

970

 

 

 

 

 

 

30

 

 

 

 

 

 

 

 

 

30

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

2,088

 

 

 

 

 

 

 

 

 

2,088

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

204

 

 

 

204

 

Unrealized loss on marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(217

)

 

 

(217

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

(13,139

)

 

 

 

 

 

(13,139

)

Balance at March 31, 2020

 

 

 

24,334,007

 

 

 

2

 

 

 

307,009

 

 

 

(175,089

)

 

 

7

 

 

 

131,929

 

Issuance of common stock upon exercise of stock

   options, net of repurchase

 

 

 

68,485

 

 

 

 

 

 

453

 

 

 

 

 

 

 

 

 

453

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

2,035

 

 

 

 

 

 

 

 

 

2,035

 

Issuance of common stock under

   the employee stock purchase plan

 

 

 

40,350

 

 

 

 

 

 

411

 

 

 

 

 

 

 

 

 

411

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(199

)

 

 

(199

)

Unrealized gain on marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

369

 

 

 

369

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

(12,387

)

 

 

 

 

 

(12,387

)

Balance at June 30, 2020

 

 

 

24,442,842

 

 

 

2

 

 

 

309,908

 

 

 

(187,476

)

 

 

177

 

 

 

122,611

 

Issuance of common stock upon exercise of stock

   options, net of repurchase

 

 

 

52,683

 

 

 

 

 

 

165

 

 

 

 

 

 

 

 

 

165

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

2,005

 

 

 

 

 

 

 

 

 

2,005

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(70

)

 

 

(70

)

Unrealized loss on marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(33

)

 

 

(33

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

(14,631

)

 

 

 

 

 

(14,631

)

Balance at September 30, 2020

 

 

 

24,495,525

 

 

$

2

 

 

$

312,078

 

 

$

(202,107

)

 

$

74

 

 

$

110,047

 

 

5


RAPT THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENT OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

(In thousands, except share amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Related Party

Promissory

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Notes for the

 

 

 

 

 

 

Other

 

 

Total

 

 

 

Convertible Preferred Stock

 

 

Common Stock

 

 

Paid-In

 

 

Purchase of

 

 

Accumulated

 

 

Comprehensive

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Common Stock

 

 

Deficit

 

 

Income (Loss)

 

 

Deficit

 

Balance at December 31, 2018

 

 

98,491,880

 

 

$

161,111

 

 

 

878,413

 

 

$

1

 

 

$

22,441

 

 

$

(598

)

 

$

(118,953

)

 

$

(4

)

 

$

(97,113

)

Issuance of Series C-2 convertible preferred stock,

   net of issuance costs

 

 

3,039,908

 

 

 

6,947

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock upon exercise of stock

   options, net of repurchase

 

 

 

 

 

 

 

 

3,685

 

 

 

 

 

 

66

 

 

 

 

 

 

 

 

 

 

 

 

66

 

Repurchase of common stock from related party

 

 

 

 

 

 

 

 

(53,649

)

 

 

 

 

 

 

 

 

109

 

 

 

 

 

 

 

 

 

109

 

Interest on promissory notes from related parties

   for purchase of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2

)

 

 

 

 

 

 

 

 

(2

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

377

 

 

 

 

 

 

 

 

 

 

 

 

377

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,188

)

 

 

 

 

 

(9,188

)

Balance at March 31, 2019

 

 

101,531,788

 

 

 

168,058

 

 

 

828,449

 

 

 

1

 

 

 

22,884

 

 

 

(491

)

 

 

(128,141

)

 

 

(4

)

 

 

(105,751

)

Issuance of Series C-2 convertible preferred stock,

   net of issuance costs

 

 

3,271,537

 

 

 

7,451

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock upon exercise of stock

   options, net of repurchase

 

 

 

 

 

 

 

 

13,996

 

 

 

 

 

 

34

 

 

 

 

 

 

 

 

 

 

 

 

34

 

Repurchase of common stock from related party

 

 

 

 

 

 

 

 

(29,686

)

 

 

 

 

 

 

 

 

65

 

 

 

 

 

 

 

 

 

65

 

Paydown of promissory notes from related parties

   for purchase of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

73

 

 

 

 

 

 

 

 

 

73

 

Forgiveness of promissory notes from related parties

   for purchase of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

353

 

 

 

 

 

 

 

 

 

 

 

353

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

347

 

 

 

 

 

 

 

 

 

 

 

 

347

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

 

 

 

2

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,622

)

 

 

 

 

 

(10,622

)

Balance at June 30, 2019

 

 

104,803,325

 

 

 

175,509

 

 

 

812,759

 

 

 

1

 

 

 

23,265

 

 

 

 

 

 

(138,763

)

 

 

(2

)

 

 

(115,499

)

Issuance of Series C-2 convertible preferred stock,

   net of issuance costs

 

 

 

 

 

(19

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock upon exercise of stock

   options, net of repurchase

 

 

 

 

 

 

 

 

122,281

 

 

 

 

 

 

227

 

 

 

 

 

 

 

 

 

 

 

 

227

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

431

 

 

 

 

 

 

 

 

 

 

 

 

431

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15

 

 

 

15

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,971

)

 

 

 

 

 

(9,971

)

Balance at September 30, 2019

 

 

104,803,325

 

 

$

175,490

 

 

 

935,040

 

 

$

1

 

 

$

23,923

 

 

$

 

 

$

(148,734

)

 

$

13

 

 

$

(124,797

)

 

 

See accompanying notes to condensed consolidated financial statements.

 

 

 

6


RAPT THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2020

 

 

2019

 

Operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(40,157

)

 

$

(29,781

)

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

 

 

 

 

 

 

 

 

Amortization of premium on marketable securities

 

 

268

 

 

 

 

Depreciation and amortization

 

 

858

 

 

 

1,011

 

Stock-based compensation expense

 

 

6,128

 

 

 

1,155

 

Loss on disposal of capital equipment

 

 

 

 

 

9

 

Gain (loss) on foreign currency translation

 

 

(65

)

 

 

17

 

Noncash interest income, net

 

 

 

 

 

20

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses and other long-term assets

 

 

401

 

 

 

(4,404

)

Accounts payable and accrued liabilities

 

 

5,207

 

 

 

2,187

 

Deferred revenue

 

 

2,260

 

 

 

 

Deferred rent

 

 

(25

)

 

 

 

Net cash used in operating activities

 

 

(25,125

)

 

 

(29,786

)

Investing activities

 

 

 

 

 

 

 

 

Purchase of marketable securities

 

 

(122,706

)

 

 

 

Proceeds from maturities of marketable securities

 

 

20,000

 

 

 

 

Purchase of property and equipment

 

 

(224

)

 

 

(863

)

Net cash used in investing activities

 

 

(102,930

)

 

 

(863

)

Financing activities

 

 

 

 

 

 

 

 

Proceeds from public offering, net of issuance costs

 

 

69,842

 

 

 

 

Proceeds from the sale of convertible preferred stock, net of issuance costs

 

 

 

 

 

14,379

 

Proceeds from issuance of common stock under the employee stock purchase plan

 

 

411

 

 

 

 

Proceeds from issuance of common stock, net of repurchases

 

 

648

 

 

 

782

 

Net cash provided by financing activities

 

 

70,901

 

 

 

15,161

 

Net decrease in cash and cash equivalents

 

 

(57,154

)

 

 

(15,488

)

Cash and cash equivalents at beginning of period

 

 

77,383

 

 

 

63,798

 

Cash and cash equivalents at end of period

 

$

20,229

 

 

$

48,310

 

Supplemental disclosures of non-cash investing and financing information

 

 

 

 

 

 

 

 

Deferred offering costs included in accounts payable and accrued expenses

 

$

 

 

$

454

 

Forgiveness of promissory notes from related party for purchase of common stock

 

$

 

 

$

382

 

 

 

 

See accompanying notes to condensed consolidated financial statements.

7


RAPT THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Organization

Description of the Business

RAPT Therapeutics, Inc. (“RAPT” or the “Company”) is a clinical-stage, immunology-based biopharmaceutical company focused on discovering, developing and commercializing oral small molecule therapies for patients with significant unmet needs in oncology and inflammatory diseases. Utili