10-Q

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, 2022

-OR-

☐

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

For the transition period from _________ to _________

Commission file number 

001-41058

Vaxxinity, Inc.

(Exact name of registrant as specified in its charter) 

Delaware

86-2083865

(State or other jurisdiction of 

incorporation or organization)

(I.R.S. Employer

Identification No.)

1717 Main St

,

Ste 3388

Dallas

,

TX

75201

(

254

)

244-5739

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

__________________

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

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Class A Common Stock, par value

$0.0001 per share

VAXX

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 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).

☐

As of November 8, 2022, the registrant had

112,181,870

shares of $0.0001 par value Class A common stock outstanding and

13,874,132

 shares of $0.0001 par value

Class B common stock outstanding.

SPECIAL NOTE REGARDING FORWARD -LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. Forward-looking statements are neither historical facts nor

assurances of future performance. Instead, they are based on our current beliefs, expectations and assumptions regarding the future of

our business, future plans and strategies and other future conditions. In some cases, you can identify forward-looking statements

because they contain words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “predict,” “project,” “target,”

“potential,” “seek,” “will,” “would,” “could,” “should,” “continue,” “contemplate,” “plan,” other words and terms of similar meaning

and the negative of these words or similar terms.

Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control.

We caution you that forward-looking statements are not guarantees of future performance or outcomes and that actual performance

and outcomes may differ materially from those made in or suggested by the forward-looking statements contained in this Quarterly

Report. In addition, even if our results of operations, financial condition and cash flows, and the development of the markets in which

we operate, are consistent with the forward-looking statements contained in this Quarterly Report, those results or developments may

not be indicative of results or developments in subsequent periods. New factors emerge from time to time that may cause our business

not to develop as we expect, and it is not possible for us to predict all of them. Factors that could cause actual results and outcomes

to differ materially from those reflected in forward-looking statements include, among others, the following:

• the prospects of our product candidates, including the timing of data from our clinical trials for our product candidates

and our ability to obtain and maintain regulatory approval for our product candidates;

• our ability to develop and commercialize new products and product candidates;

• our ability to leverage our Vaxxine Platform;

• the rate and degree of market acceptance of our products and product candidates;

• our status as a clinical-stage company and estimates of our addressable market, market growth, future revenue,

expenses, capital requirements and our needs for additional financing;

• our ability to comply with multiple legal and regulatory systems relating to privacy, tax, anti-corruption and

other applicable laws;

• our ability to hire and retain key personnel and to manage our future growth effectively;

• competitive companies and technologies within our industry and our ability to compete;

• our and our collaborators’, including United Biomedical’s (“UBI”), ability and willingness to obtain, maintain, defend

and enforce our intellectual property protection for our proprietary and collaborative product candidates, and the scope

of such protection;

• the performance of third-party suppliers and manufacturers and our ability to find additional suppliers and

manufacturers;

• our ability and the potential to successfully manufacture our product candidates for pre-clinical use, for clinical trials

and, if approved, on a larger scale for commercial use;

• the ability and willingness of our third-party collaborators, including UBI, to continue research and development

activities relating to our product candidates;

• general economic, political, demographic and business conditions in the United States, Taiwan and other jurisdictions;

• the potential effects of government regulation, including regulatory developments in the United

States and other jurisdictions;

• ability to obtain additional financing in future offerings;

• expectations about market trends; and

• the effects of the Russia-Ukraine conflict and the COVID-19 pandemic on business operations, the initiation,

development and operation of our clinical trials, including patient enrollment of our clinical trials.

We discuss many of these factors in greater detail under Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the

year ended December 31, 2021. These risk factors are not exhaustive and other sections of this report may include additional

factors which could adversely impact our business and financial performance. Given these uncertainties, you should not place

undue reliance on these forward-looking statements.

You should read this Quarterly Report and the documents that we reference in this Quarterly Report and have filed as exhibits

completely and with the understanding that our actual future results may be materially different from what we expect. We qualify

all of the forward -looking statements in this Quarterly Report by these cautionary statements. Except as required by law, we

undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events

or otherwise.

As used in this Quarterly Report on Form 10-Q, unless otherwise specified or the context otherwise requires, the terms “we,”

“our,” “us,” the “Company” refer to Vaxxinity, Inc. and its subsidiaries. All brand names or trademarks appearing in this Quarterly

Report are the property of their respective owners.

4

Table of Contents

Page

5

6

7

9

10

23

34

34

36

36

36

36

38

5

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

VAXXINITY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

September 30,

December 31,

2022

2021

(Unaudited)

Assets

Current assets:

Cash and cash equivalents

$

18,875

$

144,885

Short-term investments

80,233

—

Restricted cash

3,073

172

Amounts due from related parties

400

393

Prepaid expenses and other current assets

5,502

8,851

Total current assets

108,083

154,301

Property and equipment, net

12,801

12,372

Long-term deposits

2,076

—

Total assets

$

122,960

$

166,673

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$

3,319

$

3,192

Amounts due to related parties

16,676

19,407

Accrued expenses and other current liabilities

12,049

4,519

Notes payable

387

376

Total current liabilities

32,431

27,494

Other liabilities

Notes payable, net of current portion

10,032

10,323

Other long-term liabilities

236

237

Total liabilities

42,699

38,054

Commitments and contingencies (Note 15)

Preferred stock: $

0.0001

 par value,

50,000,000

 shares authorized at September 30, 2022 and December 31, 2021

—

—

Stockholders’ equity:

Class A common stock, $

0.0001

 par value;

1,000,000,000

 shares authorized,

112,181,870

 and

111,518,094

 shares issued and

outstanding at September 30, 2022 and December 31, 2021, respectively

278

278

Class B common stock, $

0.0001

 par value;

100,000,000

 shares authorized,

13,874,132

 shares issued and outstanding at

September 30, 2022 and December 31, 2021

—

—

Additional paid-in capital

364,445

357,822

Accumulated other comprehensive income (loss)

(215)

—

Accumulated deficit

(284,247)

(229,481)

Total stockholders’ equity

80,261

128,619

Total liabilities and stockholders’ equity

$

122,960

$

166,673

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

6

VAXXINITY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(Unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2022

2021

2022

2021

Revenue

$

—

$

50

$

—

$

67

Cost of revenue

—

9

—

1,937

Gross profit

—

41

—

(1,870)

Operating expenses:

Research and development

12,468

23,443

34,609

54,324

General and administrative

7,300

6,873

20,546

21,130

Total operating expenses

19,768

30,316

55,155

75,454

Loss from operations

(19,768)

(30,275)

(55,155)

(77,324)

Other (income) expense:

Interest and other expense

54

112

264

732

Interest and other income

(545)

(3)

(625)

(6)

Change in fair value of convertible notes

—

—

—

2,667

Change in fair value of simple agreement for future

equity

—

—

—

8,365

Change in fair value of warrant liability

—

—

—

214

(Gain) loss on foreign currency translation, net

(25)

5

(28)

24

Other (income) expense

(516)

114

(389)

11,996

Net loss

$

(19,252)

$

(30,389)

$

(54,766)

$

(89,320)

Net loss per share, basic and diluted

$

(0.15)

$

(0.44)

$

(0.43)

$

(1.30)

Weighted average common shares outstanding, basic and

diluted

126,036,865

68,728,509

125,899,557

68,667,682

Other comprehensive income (loss):

 Unrealized gain (loss) on investments

(215)

—

(215)

—

 Other comprehensive income (loss)

$

(215)

$

—

$

(215)

$

—

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

7

VAXXINITY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK

(in thousands, except share amounts)

(Unaudited)

Convertible Preferred Stock

Series Seed

Series Seed-1

Series Seed-2

Series A-1

Series A-2

Series A

Series B

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Total

Balance at December 31, 2020

7,831,528

$

10,383

22,876,457

$

20,903

14,615,399

$

11,315

1,871,511

$

4,640

6,307,690

$

15,234

—

$

—

—

$

—

$

62,475

Exchange of Series Seed, Series Seed-1, Series Seed-2, Series

A-1 and Series A-2 for Series A

(7,831,528)

(10,383)

(22,876,457)

(20,903)

(14,615,399)

(11,315)

(1,871,511)

(4,640)

(6,307,690)

(15,234)

53,502,585

62,475

—

—

—

Conversion of convertible notes to Series A preferred stock,

net of debt issuance costs

—

—

—

—

—

—

—

—

—

—

3,624,114

27,379

—

—

27,379

Conversion of notes payable with related parties to Series A

convertible preferred

—

—

—

—

—

—

—

—

—

—

423,230

2,138

—

—

2,138

Conversion of Simple Agreement for Future Equity to Series A

convertible preferred

—

—

—

—

—

—

—

—

—

—

4,539,060

35,600

—

—

35,600

Conversion of warrant liability to Series A convertible

preferred

—

—

—

—

—

—

—

—

—

—

134,106

614

—

—

614

Issuance of Series B convertible preferred stock, net of

issuance costs of $

131

—

—

—

—

—

—

—

—

—

—

—

—

15,365,574

122,791

122,791

Balance at September 30, 2021

—

$

—

—

$

—

—

$

—

—

$

—

—

$

—

62,223,095

$

128,206

15,365,574

$

122,791

$

250,997

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

8

VAXXINITY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

(Unaudited)

Common Stock-Class A

Common Stock-Class B

Treasury Stock

Shares

Amount

Shares

Amount

Shares

Amount

Additional Paid-

in Capital

Accumulated

Other

Comprehensive

Income (Loss)

Accumulated

Deficit

Stockholders’

Equity (Deficit)

Balance at December 31, 2021

111,518,094

$

278

13,874,132

$

—

—

$

—

$

357,822

$

—

$

(229,481)

$

128,619

Issuance of common stock upon exercise of stock options

663,776

—

—

—

—

—

262

—

—

262

Stock-based compensation expense

—

—

—

—

—

—

6,361

—

—

6,361

Net loss

—

—

—

—

—

—

—

(215)

(54,766)

(54,981)

Balance at September 30, 2022

112,181,870

$

278

13,874,132

$

—

—

$

—

$

364,445

$

(215)

$

(284,247)

$

80,261

Common Stock-Class A

Common Stock-Class B

Treasury Stock

Shares

Amount

Shares

Amount

Shares

Amount

Additional Paid-

in Capital

Accumulated

Other

Comprehensive

Income (Loss)

Accumulated

Deficit

Stockholders’

Equity (Deficit)

Balance at December 31, 2020

60,360,523

$

272

10,999,149

$

—

(3,169,093)

$

(23)

$

4,682

$

—

$

(92,306)

$

(87,352)

Issuance of common stock upon exercise of stock options

82,696

—

—

—

—

—

70

—

—

70

Vesting of restricted stock

15,405

—

—

—

—

—

—

—

—

—

Issuance of common stock upon stock grant

485,836

—

—

—

—

—

103

—

—

103

Reclassification of Class A common stock to Class B common stock

(2,874,983)

—

2,874,983

—

—

—

—

—

—

—

Retirement of treasury stock upon reorganization

(3,169,093)

—

—

—

3,169,093

23

(23)

—

—

(23)

Stock-based compensation expense

—

—

—

—

—

—

5,602

—

—

5,602

Net loss

—

—

—

—

—

—

—

—

(89,320)

(89,320)

Balance at September 30, 2021

54,900,384

$

272

13,874,132

$

—

—

$

—

$

10,434

$

—

$

(181,626)

$

(170,920)

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

9

VAXXINITY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

Nine Months Ended September 30,

2022

2021

Cash flows from operating activities:

Net loss

$

(54,766)

$

(89,320)

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

Depreciation expense

1,144

928

Amortization of debt issuance costs

40

234

Amortization of discount on short-term investments

(422)

—

Stock-based compensation expense

6,361

5,704

Non-cash consulting expense

—

268

Change in fair value of convertible notes

—

2,667

Change in fair value of warrant liability

—

214

Change in fair value of simple agreement for future equity

—

8,365

Changes in operating assets and liabilities:

Accounts receivable

—

26

Amounts due from related parties

(7)

(18)

Prepaid expenses and other current assets

3,349

(10,155)

Long-term deposits

(2,076)

—

Deferred offering costs

—

(3,935)

Accounts payable

127

2,888

Amounts due to related parties

(2,731)

13,212

Accrued expenses and other current liabilities

7,530

4,521

Other long-term liabilities

—

(2,625)

Net cash used in operating activities

(41,451)

(67,026)

Cash flows from investing activities:

Purchase of short-term investments

(107,526)

—

Redemption of short-term investments

27,500

—

Purchase of property and equipment

(1,574)

(50)

Net cash used in investing activities

(81,600)

(50)

Cash flows from financing activities:

Proceeds from issuance of notes payable with related parties

—

2,000

Repayment of convertible notes payable

—

(2,000)

Repayment of notes payable

(320)

(96)

Repayment of note payable with related party

—

(100)

Repayment of Paycheck Protection Program

—

(257)

Proceeds from issuance of simple agreement for future equity

—

2,900

Proceeds from issuance of Series B convertible preferred stock, net of issuance costs

—

122,791

Proceeds from exercise of stock options

262

70

Net cash provided by financing activities

(58)

125,308

Increase (decrease) in cash, cash equivalents, and restricted cash

(123,109)

58,232

Cash, cash equivalents, and restricted cash at beginning of period

145,057

31,217

Cash, cash equivalents, and restricted cash at end of period

$

21,948

$

89,449

Supplemental Disclosure

Cash paid for interest

$

277

$

288

Noncash Financing Activities

Exchange of Series Seed, Series Seed-1, Series Seed-2, Series A-1 and Series A-2 for Series A preferred stock

$

—

$

62,475

Conversion of simple agreement for future equity into Series A preferred stock

$

—

$

2,205

Conversion of convertible notes payable into Series A preferred stock

$

—

$

27,545

Conversion of notes payable with related parties into Series A preferred stock

$

—

$

35,600

Conversion of warrant liability into Series A preferred stock

$

—

$

614

Retirement of treasury stock upon reorganization

$

—

$

23

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

VAXXINITY, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

10

1. Nature of the Business

Vaxxinity, Inc., a Delaware corporation (“Vaxxinity ,” and together with its subsidiaries, the “Company”), was formed through the

combination of two separate businesses that originated from United Biomedica l, Inc. (“UBI”) in two separate transactions: a spin-out

from UBI in 2014 of operations focused on developing chronic disease product candidates that resulted in United Neuroscience (“UNS”),

and a second spin-out from UBI in 2020 of operations focused on the development of a COVID-19 vaccine that resulted in C19 Corp.

(“COVAXX”). On February 2, 2021, Vaxxinity was incorporated for the purpose of reorganizing and combining UNS and COVAXX

and on March 2, 2021, did so by acquiring all of the outstanding equity interests of UNS and COVAXX pursuant to a contribution and

exchange agreement (the “Contribution and Exchange Agreement”) whereby the existing equity holders of UNS and COVAXX

contributed their equity interests in each of UNS and COVAXX in exchange for equity in Vaxxinity (the “Reorganization”).

The Company is a biotechnology company currently focused on developing product candidates for human use in the fields of neurology,

pain, cardiovascular diseases and coronaviruses utilizing its “Vaxxine Platform”—a synthetic peptide vaccine technology first developed

by UBI and subsequently refined over the last two decades. The Company is engaged in the development of rationally designed

prophylactic and therapeutic vaccines to combat common chronic diseases with large global unmet medical need. We are also developing

a heterologous booster vaccine for SARS-Cov-2. UBI is a significant shareholder of the Company and, therefore, considered a related

party.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry including, but not

limited to, uncertainty of product development and commercialization, lack of marketing and sales history, development by its

competitors of new technological innovations, dependence on key personnel, market acceptance of products, product liability, protection

of proprietary technology, ability to raise additional financing, and compliance with government regulations. If the Company does not

successfully commercialize or out-license any of its product candidates, it will be unable to generate recurring product revenue or

achieve profitability.

The Company’s product candidates are in development and will require significant additional research and development efforts,

including extensive pre-clinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant

amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. There can be no

assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s

intellectual property will be obtained, that any products developed will obtain necessary government regulatory approval or that any

approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when,

if ever, the Company will generate significant revenue from product sales. The Company operates in an environment of rapid change in

technology and is dependent upon the services of its employees and consultants.

Contribution and Exchange Agreement

On March 2, 2021, in accordance with the Contribution and Exchange Agreement, (i) all outstanding shares of UNS and COVAXX

preferred stock and common stock were contributed to Vaxxinity and exchanged for like shares of stock in Vaxxinity, (ii) the outstanding

options to purchase shares of UNS and COVAXX common stock were terminated and substituted with options to purchase shares of

common stock in Vaxxinity, (iii) the outstanding warrant to purchase shares of COVAXX common stock was cancelled and exchanged

for a warrant to acquire common stock in Vaxxinity and (iv) each outstanding Reorganization Convertible Note (as defined below) was

contributed to Vaxxinity and the holders of such notes received Series A preferred stock in Vaxxinity. In particular:

•

Each UNS common share and convertible preferred share was exchanged for

0.2191

 shares of Vaxxinity common stock or

Series A preferred stock, as applicable;

•

Each share of COVAXX common and convertible preferred stock was exchanged for

3.4233

 shares of Vaxxinity common

stock or Series A preferred stock, as applicable (and prior to the closing of the Reorganization, all the holders of outstanding

COVAXX SAFEs agreed to convert such SAFEs into shares of Series A-3 preferred stock of COVAXX, which shares were

then exchanged for shares of Vaxxinity’s Series A preferred stock);

•

The Reorganization Convertible Notes were exchanged for an aggregate of

4,047,344

 shares of Vaxxinity’s Series A

preferred stock; and

•

Each outstanding option of both UNS and COVAXX to purchase common shares of UNS or COVAXX was terminated and

substituted with an option to purchase shares of Class A common stock of Vaxxinity. Each outstanding UNS option was

exchanged based on a conversion ratio of

0.2191

. Each outstanding COVAXX option was exchanged based on a conversion

ratio of

3.4233

.

VAXXINITY, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

11

All parties to the Contribution and Exchange Agreement intended that the contribution of outstanding equity interests to Vaxxinity in

exchange for Vaxxinity’s common stock and preferred stock be treated as an integrated transaction for U.S. federal income tax purposes

that is governed by Section 351(a) of the Internal Revenue Code of 1986, as amended.

The Reorganization was determined to be a common control transaction, so the carrying values of all contributed assets and assumed

liabilities remained unchanged and the financial information for all periods in the financial statements presented prior to the

Reorganization are presented on a consolidated basis.

Reverse Stock Split 

On October 29, 2021, the Company effectuated a reverse stock split of 1-for-

1.556

 (the “Stock Split”) of the Company’s Class A and

Class B common stock pursuant to an amendment to the Company’s Amended and Restated Certificate of Incorporation approved by

the Company’s board of directors and stockholders. As a result of the Stock Split, the Company also adjusted the share and per share

amounts associated with its options and warrants to purchase shares of its common stock. These unaudited condensed consolidated

financial statements including the notes have been retroactively adjusted to reflect the Stock Split for all periods presented. Any

fractional shares that would have resulted from the Stock Split have been rounded down to the nearest whole share. 

Initial Public Offering

On November 15, 2021, the Company closed its IPO of

6,000,000

 shares of Class A common stock at a public offering price of $

13.00

per share. On November 18, 2021 the Company held a subsequent closing for the issuance of an additional

537,711

 shares of Class A

common stock pursuant to a 30-day option granted to the underwriters to purchase up to an additional

900,000

 shares of Class A common

stock at the IPO price, less underwriting discounts and commissions. The aggregate net proceeds to the Company from the offering,

after deducting underwriting discounts and commissions and other offering expenses payable by the Company, was approximately $

71.1

million. Upon the closing of the IPO, all previously outstanding shares of the Company’s redeemable convertible preferred stock were

automatically converted at the same ratio used for the Stock Split (1-for-

1.556

) into shares of its Class A common stock.

Liquidity

As of September 30, 2022, the Company had $

102.2

 million of highly liquid assets to fund operations, including $

18.9

 million of cash

and cash equivalents, $

80.2

 million of short-term investments, and a $

3.1

 million restricted cash balance of which $

3.0

 million is

restricted for the reimbursement of certain research and development expenses related to our UB-612 COVID-19 vaccine program. To

date, the Company has primarily financed its operations through the sale of convertible preferred stock and common stock, borrowings

under promissory notes (including Convertible Notes), a portion of which has been raised from related party entities, and grants from

foundations such as the Coalition for Epidemic Preparedness Innovations (CEPI) and the Michael J. Fox Foundation (MJFF). The

Company has experienced significant negative cash flows from operations since inception, and incurred a net loss of $

54.8

 million for

the nine months ended September 30, 2022. Net cash used in operating activities for the nine months ended September 30, 2022 was

$

41.5

 million. In addition, as of September 30, 2022, the Company has an accumulated deficit of $

284.2

 million. The Company expects

to incur substantial operating losses and negative cash flows from operations for the foreseeable future. As of the date these financial

statements were available to be issued, the Company expects its existing cash and cash equivalents to be sufficient to fund its operating

expenses and capital expenditure requirements for at least the next 12 months.

In order to continue to fund future research and development activities, the Company will need to seek additional capital. This may

occur through strategic alliances, licensing arrangements, grants and/or future public or private debt or equity financings. Additional

funding may not be available on terms the Company finds acceptable or at all. If the Company is unable to obtain sufficient capital to

continue to advance its programs, the Company would be forced to delay, limit, reduce or terminate its product development or future

commercialization efforts or grant rights to third parties to develop and market product candidates that the Company would otherwise

prefer to develop and market itself.

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which

contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The unaudited condensed

consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset

amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.

VAXXINITY, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

12

2. Summary of Significant Accounting Policies

Basis of presentation

The accompanying interim unaudited condensed consolidated financial statements have been prepared using generally accepted

accounting principles in the United States of America (GAAP) and pursuant to the rules and regulations of the United States Securities

and Exchange Commission (“SEC”) for interim financial reporting. The unaudited condensed consolidated financial statements for the

periods presented include the accounts of UNS and COVAXX that were parties to the Contribution and Exchange Agreement. All share

and per share amounts, as originally recorded by each entity, have been converted to a number of shares and per share amounts using

the conversion ratios determined under the Contribution and Exchange Agreement and the Stock Split ratio. 

These interim condensed consolidated financial statements are unaudited and, in the opinion of management, include all adjustments

(consisting of normal recurring adjustments and accruals) necessary to fairly present the results of the interim periods. The condensed

consolidated balance sheet at December 31, 2021, has been derived from the audited financial statements at that date. Operating results

for the three and nine months ended September 30, 2022 and cash flows for the nine months ended September 30, 2022 are not

necessarily indicative of the results that may be expected for the fiscal year ended December 31, 2022 or any other future period. Certain

information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles

generally accepted in the United States (“U.S. GAAP”) have been omitted in accordance with the rules and regulations for interim

reporting of the SEC. These interim unaudited condensed financial statements should be read in conjunction with the financial statements

and notes thereto included in our report for the year ended December 31, 2021.

Leases

At inception of a contract, we determine whether an arrangement is or contains a lease. For all leases, we determine the classification as

either operating leases or financing leases. Operating leases are included in Operating lease right-of-use assets and Operating lease

liabilities in our Condensed Consolidated Balance Sheets.

Lease recognition occurs at the commencement date and lease liability amounts are based on the present value of lease payments over

the lease term. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise

that option. If a lease does not provide information to determine an implicit interest rate, we use our incremental borrowing rate in

determining the present value of lease payments. Right-of-use (ROU) assets represent our right to use an underlying asset for the lease

term, and lease liabilities represent our obligation to make lease payments under the lease. ROU assets also include any lease payments

made prior to the commencement date and exclude lease incentives received. Operating lease expense is recognized on a straight-line

basis over the lease term. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there

is a transfer of title or purchase option reasonably certain of exercise. Lease agreements with both lease and non-lease components, are

generally accounted for together as a single lease component. The Company has elected to apply the short-term expedient to leases with

a lease term of 12 months or less, which does not subject the leases to capitalization.

Short-term investments

The Company determines the appropriate classification of its investments at the time of purchase. Currently, all of the Company’s

investments are classified as available-for-sale in accordance with ASC Topic 320. The Company classifies investments available to

fund current operations as current assets on its consolidated balance sheets. Investments are classified as long-term assets on the

consolidated balance sheets if (i) the Company has the intent and ability to hold the investments for a period of at least one year and (ii)

the contractual maturity date of the investments is greater than one year.

Available-for-sale investments are recorded at fair value, with unrealized gains or losses included in accumulated other comprehensive

income or loss. Realized gains and losses, interest income earned on the Company’s cash, cash equivalents and investments, and

amortization or accretion of discounts and premiums on investments are included within other income (expense).

Available-for-sale debt securities are reviewed for possible impairment at least quarterly, or more frequently if circumstances arise that

may indicate impairment. When the fair value of the securities declines below the amortized cost basis, impairment is indicated and it

must be determined whether it is other than temporary. Impairment is considered to be other than temporary if the Company: (i) intends

to sell the security, (ii) will more likely than not be forced to sell the security before recovering its cost, or (iii) does not expect to recover

the security’s amortized cost basis. If the decline in fair value is considered other than temporary, the cost basis of the security is adjusted

to its fair market value and the realized loss is reported in earnings. Subsequent increases or decreases in fair value are reported in equity

as accumulated other comprehensive income.

The Company did not record any such impairments during the period ending September 30, 2022.

VAXXINITY, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

13

Related party transactions

The Company has a Related Party policy which defines related parties, and assigns oversight responsibility for related party transactions

to the Company's Audit Committee. The Committee reviews in advance related party transactions, and considers multiple factors,

including the proposed aggregate value of the transaction, or, in the case of indebtedness, the amount of principal that would be involved,

the benefits to the Company of the proposed transaction, the availability of other sources of comparable products or services, and an

assessment of whether the proposed transaction is on terms that are comparable to the terms available to or from, as the case may be,

unrelated third parties. Under the policy, related party transactions are approved only if the Committee determines in good faith that the

transaction is not inconsistent with the interests of the Company and its shareholders.

Significant accounting policies 

The significant accounting policies used in preparation of these unaudited condensed consolidated financial statements are disclosed in

our annual financial statements for the year ended December 31, 2021. There have been no changes to the Company’s significant

accounting policies during the three and nine months ended September 30, 2022.

Recently issued accounting pronouncements 

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and are adopted by the

Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued

standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

Recently adopted accounting standards

In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”). ASU 2018-11

provided an alternative method in addition to the modified retrospective transition method for ASU No. 2016-02, Leases: Amendments

to the FASB Accounting Standards Codification (“ASU 2016-02”), issued in February 2016. Under ASU 2018-11, an entity may elect

to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of

retained earnings in the period of adoption. Under ASU 2016-02, a lease is required to recognize assets and liabilities with lease terms

of more than twelve months. ASU 2016-02 is effective for nonpublic business entities and public entities eligible to be Smaller Reporting

Companies for fiscal years beginning after December 15, 2021. 

The Company adopted the new standard on January 1, 2022 using the modified retrospective approach. The Company has elected to

apply the transition method that allows companies to continue applying the guidance under the lease standard in effect at that time in

the comparative periods presented in the condensed financial statements and recognize a cumulative-effect adjustment to the opening

balance of accumulated deficit on the date of adoption. The Company has elected to combine lease components (for example fixed rent

payments) with non-lease components (for example, common-area maintenance costs) on our facility, lab equipment and CRO

embedded lease asset classes. The Company also elected the “package of practical expedients”, which permits the Company not to

reassess under the new standard the Company’s prior conclusions about lease identification, lease classification and initial direct costs.

In addition, the Company also elected the short-term lease practical expedients allowed under the standard. Lastly, the Company did not

elect the practical expedient allowing the use-of-hindsight which would require the Company to reassess the lease term of its leases

based on all facts and circumstances through the effective date.

Results for reporting period beginning after January 1, 2022 are presented under the new standard, while prior period amounts are not

adjusted and continue to be reported under the accounting standards in effect for the prior period. Upon adoption of the new lease

standard, on January 1, 2022, the Company was not entered into any leases subject to ASC 842 and did not capitalize a ROU asset or

lease liability.

3. Fair Value Measurements

The Company's money market accounts and short term investments are shown at fair value based on unadjusted quoted market prices

in active markets for identical assets.

The following table presents information about the Company’s financial instruments measured at fair value on a recurring basis and

indicate the level of the fair value hierarchy used to determine such fair values (in thousands):

VAXXINITY, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

14

September 30, 2022

Level 1

Level 2

Level 3

Total

Assets:

Short-term investments

80,233

—

—

80,233

Money market accounts

10,995

—

—

10,995

Total assets

$

91,228

$

—

$

—

$

91,228

December 31, 2021

Level 1

Level 2

Level 3

Total

Assets:

Money market account

$

139,794

$

—

$

—

$

139,794

Total assets

$

139,794

$

—

$

—

$

139,794

During the three and nine months ended September 30, 2022 and the year ended December 31, 2021, there were no transfers between

Level 1, Level 2 and Level 3.

4. Short-Term Investments

As of September 30, 2022, the Company’s short-term investments consist of the following (in thousands):

As of September 30, 2022

Amortized

Cost

Unrealized

Gains (Losses),

Net

Recorded

Basis

U.S. Treasury Securities

$

80,448

$

(215)

$

80,233

Total

$

80,448

$

(215)

$

80,233

These securities mature in less than 1 year.

5. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):

September 30,

December 31,

2022

2021

Prepaid materials and supplies

$

1,754

$

3,517

Clinical prepayments

2,067

4,379

Deposits

1,323

614

Other

358

341

$

5,502

$

8,851

The Company’s prepaid material and supplies related to enzyme-linked immunosorbent assay (“ELISA”) test production, of which $

1.7

million was paid to a related party and $

0.7

 million related to materials to be utilized during its Phase 3 COVID-19 vaccine clinical trial.

For the three and nine months ended September 30, 2022 the Company recognized an expense of $

1.8

 million that was prepaid in 2021

to UBP, a related party, for raw materials acquired to produce UB-612. See Note 15, “Commitments and Contingencies”, for more

information about this expense.

VAXXINITY, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

15

6. Property and Equipment

Property and equipment, net consisted of the following (in thousands):

September 30,

December 31,

2022

2021

Airplane

$

11,983

$

11,983

Laboratory and computer equipment

2,790

1,831

Software

169

168

Facilities, furniture and fixtures

106

85

Vehicles

87

87

Fixed assets not yet placed into service

791

199

Total property and equipment

15,926

14,353

Less: accumulated depreciation

(3,125)

(1,981)

Property and equipment, net

$

12,801

$

12,372

Depreciation expense for the three and nine months ended September 30, 2022 was $

0.4

 million and $

1.1

 million, respectively.

Depreciation expense for the three and nine months ended September 30, 2021 was $

0.4

 million and $

0.9

 million, respectively.

7. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

September 30,

December 31,

2022

2021

Accrued external research and development

$

3,842

$

1,501

Accrued bonuses

3,410

2,294

Accrued professional fees and other

4,767

692

Accrued interest

30

32

$

12,049

$

4,519

Accrued external research and development includes $

3.0

 million in grant monies received from CEPI during the nine months ended

September 30, 2022 not yet applied against research and development expense.

8. Other Long-Term Liabilities

Other long-term liabilities consisted of the following (in thousands):

September 30,

December 31,

2022

2021

Accrued tax provision

236

236

Accrued rent

—

1

$

236

$

237

As of September 30, 2022 and December 31, 2021, approximately $

0.2

 million of the accrued tax provision relates to penalties and

interest the Company may be subject to paying for late filing fees related to a foreign subsidiary. The Company expects these amounts

to be forgiven but has accrued for them until the statute of limitations expires and it is appropriate to write them off.

VAXXINITY, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

16

9. Notes Payable

Note Payable—Airplane

In connection with the acquisition of an airplane, the Company entered into a note payable agreement (the “2025 Note”) in June 2020

for $

11.5

 million, with an annual interest rate of

3.4

% and a maturity date of June 9, 2025. Principal and interest payments are payable

monthly in the amount of $

0.1

 million with a final payment of $

9.4

 million at maturity. The 2025 Note is guaranteed by the co-founders

of the Company. In addition, the Company incurred debt issuance costs of $

0.3

 million, which are being amortized over the term of the

loan. There are no financial covenants associated with the 2025 Note. 

The carrying value of the 2025 Note is as follows (in thousands):

September 30,

December 31,

2022

2021

Principal

$

10,564

$

10,883

Unamortized debt issuance cost

(145)

(184)

Carrying amount

10,419

10,699

Less: current portion

(387)

(376)

Note payable, net of current portion and debt issuance cost

$

10,032

$

10,323

As of September 30, 2022, the remaining principal payments for the 2025 Note, are as follows (in thousands):

Amount

2022

$

109

2023

444

2024

458

2025

9,553

$

10,564

Interest expense associated with the 2025 Note was $

0.1

 million and $

0.3

 million for the three and nine months ended September 30,

2022, respectively. Interest expense associated with the 2025 Note was $

0.1

 million and $

0.3

 million for the three and nine months

ended September 30, 2021, respectively. As of September 30, 2022, accrued interest of less than $

0.1

 million was included in accrued

expenses and other liabilities in the accompanying condensed consolidated balance sheets as of September 30, 2022 (unaudited) and

December 31, 2021.

Note Payable—Paycheck Protection Program

The Company applied for and received a loan, which is in the form of a note dated May 5, 2020, from HSBC Bank USA, National

Association (“HSBC”) in the aggregate amount of approximately $

0.3

 million (the “PPP Loan”), pursuant to the Paycheck Protection

Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides

for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. 

The Company paid off the PPP Loan in full, including all accrued but unpaid interest to the repayment date, in August 2021.

10. Convertible Preferred Stock

In connection with the Reorganization, each UNS convertible preferred share was exchanged for

0.2191

 shares of Vaxxinity preferred

stock and each share of COVAXX convertible preferred stock was exchanged for

3.4233

 shares of Vaxxinity preferred stock. During

the first and second quarters of 2021, the Company raised gross proceeds of $

122.9

 million in connection with its Series B preferred

stock financing. The Company issued a total of

15,365,574

 shares at a price of $

8.00

 per share. All shares of the Company’s Series B

preferred stock converted into shares of the Company’s Class A common stock concurrently with the closing of the initial public offering. 

As of September 30, 2022 and December 31, 2021, Vaxxinity’s Amended and Restated Certificate of Incorporation authorized

50,000,000

 shares of preferred stock with a par value of $

0.0001

 per share. There were no shares of preferred stock outstanding as of

September 30, 2022 and December 31, 2021.

VAXXINITY, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

17

11. Common Stock

As explained in Note 1, in accordance with the Contribution and Exchange Agreement, on March 2, 2021, all outstanding shares of

common stock of UNS and COVAXX were contributed to Vaxxinity and exchanged for an aggregate of

60,360,523

 shares of

Vaxxinity’s Class A common stock and

10,999,149

 shares of Vaxxinity’s Class B common stock. Each UNS share of common stock

was exchanged for

0.2191

 shares of Vaxxinity common stock and each share of COVAXX common stock was exchanged for

3.4233

shares of Vaxxinity common stock. 

Vaxxinity’s Amended and Restated Certificate of Incorporation dated November 15, 2021 authorized

1,100,000,000

 shares of common

stock with a par value of $

0.0001

 per share, of which

1,000,000,000

 shares have been designated as Class A common stock and

100,000,000

 shares have been designated as Class B common stock. 

Holders of Class A common stock and Class B common stock have identical rights, except with respect to voting and conversion. Except

as otherwise expressly provided in Vaxxinity’s Amended and Restated Certificate of Incorporation or Bylaws, or required by applicable

law, holders of Class A common stock will be entitled to one vote per share on all matters submitted to a vote of stockholders and

holders of our Class B common stock will be entitled to ten votes per share on all matters submitted to a vote of stockholders. 

Holders of Class A common stock and Class B common stock vote together as a single class on all matters submitted to a vote of

stockholders, except (i) amendments to Vaxxinity’s Amended and Restated Certificate of Incorporation to increase or decrease the par

value of a class of capital stock, in which case the applicable class would be required to vote separately to approve the proposed

amendment and (ii) amendments to Vaxxinity’s Amended and Restated Certificate of Incorporation that alter or change the powers,

preferences or special rights of a class of capital stock in a manner that affects its holders adversely, in which case the applicable class

would be required to vote separately to approve the proposed amendment. 

Holders of common stock are entitled to receive, ratably, dividends as may be declared by Vaxxinity’s board of directors out of funds

legally available therefor if the board of directors, in its discretion, determines to issue dividends. 

The Company has reserved shares of common stock for issuance for the following purposes:

September 30,

December 31,

2022

2021

Options and RSUs issued and outstanding

20,593,681

21,387,909

Options available for future grants

6,251,916

7,209,538

Warrants issued and outstanding

1,928,020

1,928,020

28,773,617

30,525,467

12. Stock-Based Compensation

2021 Omnibus Incentive Compensation Plan

In November 2021, the Company established the 2021 Omnibus Incentive Compensation Plan (the “Plan”), which provides for the

Company to grant nonqualified stock options, incentive (qualified) stock options, stock appreciation rights, restricted share awards,

restricted stock units, performance awards, cash incentive awards and other equity-based awards (including fully vested shares).

The maximum number of shares of common stock that can be issued under the Plan is

8,700,000

 Class A shares. This number increases

automatically on January 1 of each year, commencing January 1, 2023, by the number of shares equal to the lesser of (i)

4

% of the

outstanding shares of our common stock on the immediately preceding December 31, (ii) the number of shares determined by the

Compensation Committee, if any such determination is made, and (iii) the number of shares underlying any awards granted during the

preceding calendar year, net of the shares underlying awards canceled or forfeited under the Plan.

Stock Options

As of September 30, 2022 there were options for

13,931,226

 shares of Class A stock outstanding and options for

6,362,455

 shares of

Class B stock outstanding, of which

9,032,635

 Class A and

4,944,763

 Class B shares were exercisable, respectively. As of September 30,

2022, the maximum number of stock options awards available for future issuance under the Company’s plans is

6,251,916

.

VAXXINITY, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

18

The following table summarizes stock option activity during the nine months ended September 30, 2022:

Number of Stock

Options

Outstanding

Weighted

Exercise Price

Per Share

Weighted

Contractual

Term (years)

Aggregate

Intrinsic Value

(in thousands)

Balance at December 31, 2021

21,387,909

$

5.25

7.4

$

49,684

Granted

1,104,921

3.19

Exercised

(1,065,706)

3.26

Forfeited

(1,133,443)

7.23

Balance at September 30, 2022

20,293,681

$

5.13

7.1

$

11,940

Options vested and exercisable at September 30, 2022

13,977,398

$

4.52

6.8

$

10,773

The aggregate intrinsic value of options is calculated as the difference between the exercise price of the options and the fair value of the

common stock for those options that had exercise prices lower than the fair value of the common stock as of September 30, 2022.

The intrinsic value of options exercised during the nine months ended September 30, 2022 was $

4.5

 million.

The weighted-average grant-date fair value per share of options granted during the nine months ended September 30, 2022 was $

2.38

.

Restricted Stock

The following table summarizes the Company’s restricted stock activity for the nine months ended September 30, 2022:

Number of

Shares

Weighted

Average

Grant Date

Fair Value

Per Share

Unvested at December 31, 2021

—

$

—

Issued

300,000

3.76

Unvested at September 30, 2022

300,000

$

3.76

Stock-based compensation expense recognized on restricted stock was less than $

0.1

 million for the nine months ended September 30,

2022.

Stock-Based Compensation Expense

The Company recorded stock-based compensation expense in the following expense categories in the accompanying unaudited

condensed consolidated statements of operations (in thousands):

Three Months Ended September

30,

Nine Months Ended September

30,

2022

2021

2022

2021

General and administrative

$

1,509

$

1,100

$

3,888

$

4,864

Research and development

848

364

2,473

738

Total stock-based compensation expense

$

2,357

$

1,464

$

6,361

$

5,602

As of September 30, 2022, total unrecognized compensation cost related to the unvested stock-based awards was $

18.9

 million, which

is expected to be recognized over a weighted average period of

2.5

 years.

13. Income Taxes

The Company computes its expected annual effective income tax rate in accordance with ASC 740 and makes changes on a quarterly

basis, as necessary, based on certain factors such as changes in forecasted annual pre-tax income; changes to actual or forecasted

permanent book to tax differences; impacts from tax audits with state, federal or foreign tax authorities; impacts from tax law changes;

or change in judgment as to the realizability of deferred tax assets. The Company identifies items which are unusual and non-recurring

in nature and treats these as discrete events. The tax effect of discrete items is recorded in the quarter in which the discrete events occur. 

VAXXINITY, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

19

The Company’s effective tax rate for the nine months ended September 30, 2022 and 2021 was

0.00

%, due primarily to its uncertainty

of realizing a benefit from net operating losses incurred during the period.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some or all of the

recorded deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent on the generation of future

taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversal

of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on these items

and the consecutive years of pretax losses (resulting from impairment), management determined that enough uncertainty exists relative

to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance for all taxing

jurisdictions.

The Company files income tax returns in the U.S. federal and various state and local jurisdictions. The Company also files returns in

numerous foreign jurisdictions that have varied years remaining open for examination, but generally the statute of limitations is three

to four years from when the return is filed. As of September 30, 2022, the Company currently has no ongoing audits.

The Company has US net operating loss (“NOL”) carryforwards for federal and state income tax purposes. Use of the NOL

carryforwards is limited under Section 382 of the Internal Revenue Code, as we have had a change in ownership of more than 50% of

our capital stock over a three-year period as measured under Section 382 of the Internal Revenue Code. These complex changes of

ownership rules generally focus on ownership changes involving shareholders owning directly or indirectly 5% or more of our stock,

including certain public “groups” of shareholders as set forth under Section 382 of the Internal Revenue Code, including those arising

from new stock issuances and other equity transactions. Some of these NOL carryforwards will expire if they are not used within

certain periods. At this time, we consider it more likely than not that we will not have sufficient taxable income in the future that will

allow us to realize these NOL carryforwards.

14. Net Loss Per Share

The Company’s unvested restricted common shares have been excluded from the computation of basic net loss per share. 

The Company’s potentially dilutive securities, which include options, unvested restricted stock, convertible notes payable and

convertible preferred stock, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the

net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net

loss per share is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at

each period end, from the computation of diluted net loss per share for the three and nine months ended September 30, 2022 because

including them would have had an anti-dilutive effect:

September 30,

September 30,

2022

2021

Series A preferred stock

—

39,989,083

Series B preferred stock

—

9,875,037

Options and RSUs issued and outstanding

20,593,681

20,714,308

Warrants issued and outstanding stock

1,928,020

2,056,722

22,521,701

72,635,150

15. Commitments and Contingencies

Contractual Obligations 

The Company enters into agreements with contract research organizations (“CROs”) to conduct clinical trials and preclinical studies

and contract manufacturing organizations (“CMOs”) to produce vaccines and other potential product candidates. Contracts with CROs

and CMOs are generally cancellable, with notice, at the Company’s option. 

As of September 30, 2022, the Company had remaining prepayments to CROs of $

3.1

 million and remaining prepayments to CMOs of

$

0.7

 million for activities associated with the conduct of its clinical trials and for the production of the Company’s anticipated vaccine

product candidate. 

VAXXINITY, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

20

Michael J. Fox Foundation Grant

On November 3, 2021, the Company was awarded a grant from the Michael J. Fox Foundation for Parkinson’s Research (“MJFF”) in

the amount of $

0.8

 million to be used in a project for the exploration of markers for target engagement in individuals immunized with

UB-312, an active

a

-Synuclein immunotherapy. The Company will oversee sample management, sample preparation (IgG fractions)

and distribution, as well as characterize the binding properties of the antibodies against pathological forms of aSyn. As funding is

expected to be received in tranches over a two-year period, and the amounts received in each tranche are expected to be utilized within

twelve months, the funds received are recognized as a short-term accrued liability. The Company recognizes payments from MJFF as a

reduction of research and development expenses, in the same period as the expenses that the grant is intended to reimburse are incurred.

As of September 30, 2022, the balance of the short-term accrued liability was less than $

0.1

 million. For the nine months ended

September 30, 2022, the Company did not recognize any reduction of research and development expenses for amounts reimbursed

through the grant.

Coalition for Epidemic Preparedness Innovations (“CEPI”) Grant

In April 2022, the Company entered into an agreement with the Coalition for Epidemic Preparedness Innovations (“CEPI”) whereby

CEPI has agreed to provide funding of up to $

9.3

 million to co-fund a Phase 3 clinical trial of Vaxxinity’s next generation UB-612

COVID-19 vaccine candidate as a heterologous – or ‘mix-and-match’ – booster dose. The Phase 3 trial, which began earlier this year,

is evaluating the ability of UB-612 to boost COVID-19 immunity against the original strain and multiple variants of concern including

Omicron - in people aged 16 years or older, who have been previously immunized with an authorized COVID-19 vaccine.

The Company will also be performing further manufacturing scale-up work to enable readiness for potential commercialization. Under

the terms of the agreement with CEPI, if successful, a portion of the released doses of the commercial product will be delivered to the

COVID-19 Vaccines Global Access (“COVAX”) consortium for distribution to developing countries at low cost.

Cash payments received in advance under the CEPI Funding Agreement are restricted as to their use until expenditures contemplated in

the funding agreement are incurred. As funding is expected to be received in tranches over an eighteen month period, and the amounts

received in each tranche are expected to the utilized within twelve months, the funds received are reflected within restricted cash with a

corresponding short-term accrued liability. The Company recognizes payments from CEPI as a reduction of research and development

expenses, in the same period as the expenses that the grant is intended to reimburse are incurred. As of September 30, 2022, the balance

of the restricted cash and short-term accrued liability was $

3.0

 million. For the three and nine months ended September 30, 2022, the

Company recognized a reduction of $

1.6

 million and $

3.1

 million of research and development expenses, respectively.

Lease Agreements

In April 2022, the Company entered into a facility lease agreement for

4,419

 square feet of office space in New York, New York. The

lease commenced in April 2022 and will expire March 2029 with no option to renew. This lease and its terms were reviewed using the

guidance found in ASC 842. Since the lease has a non-cancellable period of one year, and after the first year both the Company and the

landlord have the option to early terminate the lease for any or no reason, the Company has elected to apply the short-term expedient,

which does not subject the New York lease to capitalization. 

The Company’s short-term leases resulted in $

0.1

 million short-term lease expense and less than $

0.1

 million variable lease expense

during the three months ended September 30, 2022 and $

0.3

 million short-term lease expense and less than $

0.1

 million variable lease

expense during the nine months ended September 30, 2022. 

License Agreements

In August 2021, Vaxxinity entered into a license agreement (the “Platform License Agreement”) with UBI and certain of its affiliates

that expanded intellectual property rights held under previously issued license agreements with UBI. As part of the agreement, Vaxxinity

obtained a worldwide, sublicensable (subject to certain conditions), perpetual, fully paid-up, royalty-free license to research, develop,

make, have made, utilize, import, export, market, distribute, offer for sale, sell, have sold, commercialize or otherwise exploit peptide-

based vaccines in the field of all human prophylactic and therapeutic uses, except for such vaccines related to human immunodeficiency

virus (HIV), herpes simplex virus (HSE) and Immunoglobulin E (IgE). The patents and patent applications licensed under the Platform

License Agreement include claims directed to a CpG delivery system, artificial T helper cell epitopes and certain designer peptides and

proteins utilized in UB-612. As described above, in consideration for the Platform License Agreement, the Company issued to UBI a

warrant to purchase Class A common stock (the “UBI Warrant”) . 

The Company considered ASC 805, “Business Combinations” (“ASC 805”) and ASC 730, “Research and Development” (“ASC 730”)

in determining how to account for the issuance of the Class A common stock warrants. The Class A common stock warrants were issued

to a related party in exchange for a license agreement. The majority of the voting interests in the related party and that of the Company

VAXXINITY, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

21

were held by a group of immediate family members, at the time of the transaction, and as such the transaction constitutes a common

control transaction, which requires the license to be accounted for at the carrying value in the books of the transferor. As the related

party did not have any basis in the assets licensed, there was no accounting impact for the Company.

Indemnification Agreements 

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to employees, consultants,

vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of

breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered

into indemnification agreements with members of its board of directors and executive officers that will require the Company, among

other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The

maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in

many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is

not aware of any indemnification arrangements that could have a material effect on its financial position, results of operations, or cash

flows, and it has not accrued any liabilities related to such obligations as of September 30, 2022 and December 31, 2021. 

Legal Proceedings

From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. As of

September 30, 2022 and December 31, 2021, the Company was not a party to any material legal matters or claims.

Loss Contingency

In April 2021, the Company engaged United Biopharma, Inc. (UBP) to begin acquiring raw materials for use in the production of GMP

grade recombinant protein for UB-612, our Covid vaccine candidate. Through August 2021, $

7.2

 million of materials were ordered, $

3

million of materials were received by UBP and paid for with an advance payment from Vaxxinity, and we expensed $

1.2

 million as

these raw materials were used to produce proteins. 

Upon rejection of the EUA by Taiwan in August 2021, UBP requested that its suppliers cancel the remaining orders. Through September

30, 2022, $

0.4

 million orders have been canceled, $

0.8

 million have been delivered, and $

3.0

 million are still open. For the open orders,

management has not yet concluded that a loss is probable, since UBP has been able to cancel some orders, and discussions with its

suppliers are still ongoing. Hence, an expense has not been recognized for them.

For the $

2.6

 million of raw materials where UBP has taken possession, management has concluded a loss is probable and recognized an

expense.

16. Benefit Plans

In March 2018, the Company established a defined contribution savings plan under Section 401(k) of the Code. This plan covers

substantially all U.S. employees who meet minimum age and service requirements and allows participants to defer a portion of their

annual compensation on a pre-tax basis. The Company does not make matching contributions to the Plan.

The Company offers its Ireland-based employees a Personal Retirement Savings Account (“PRSA”) that allows participants to defer a

portion of their annual compensation. The Company provides contributions equal to

4

% of each participant’s annual salary. During both

of the three and nine months ended September 30, 2022 and 2021, the Company contributed less than $

0.1

 million to PRSA accounts.

17. Related Party Transactions

The Company has related party arrangements with UBI and a number of its affiliated companies listed namely, United Biomedical, Inc.,

Asia (“UBI-Asia”), UBI Pharma, Inc. (“UBI-P”), United BioPharma, Inc (“UBP”) and UBI IP Holding (“UBI-IP”).

As of September 30, 2022 UBI owned

44

% of the Company’s stock. The majority of the voting interests in both UBI and the Company

were held by a group of immediate family members, and as such the entities are under common control.

These related parties are governed by various Master Services Agreements (“MSA”) detailed below. 

UBI MSA - UBI provides research, development and clinical functions to the Company. There is also a purchase arrangement

with UBI for the production and shipment of the Company’s diagnostic test kits.

VAXXINITY, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

22

UBIA MSA - UBI-Asia for manufacturing, quality control, testing, validation, and supply services.

UBP MSA - United BioPharma, Inc provide the Company with manufacturing, testing and validation.

COVID MSA (“COVID MSA”) - COVID MSA provides that UBI acts as COVAXX’s agent with respect to matters relating

the Company’s COVID-19 program and provides research, development, manufacturing and back office administrative

services to the Company.

COVID-19 Relief MSA - A four -company MSA with UBI, UBI-Asia and UBP. The Company is an exclusive licensee of

technologies related to diagnostics, vaccines, and therapies for COVID-19. The MSA established the terms under which UBI-

Asia provides research, development, testing and manufacturing services to the Company and UBP provides contract

development and manufacturing services to the Company.

Total amounts due to related parties were $

16.7

 million and $

19.4

 million as of September 30, 2022 and December 31, 2021,

respectively. Total amounts due from related parties were $

0.4

 million and $

0.4

 million as of September 30, 2022 and December 31,

2021, respectively. Total service fees incurred were $

0.0

 million and $

13.9

 million for the three months ended September 30, 2022 and

2021, respectively. Total service fees incurred were $

1.1

 million and $

32.6

 million for the nine months ended September 30, 2022 and

2021, respectively. 

Total related party operating activity, including the activity described above, are as follows (in thousands):

September 30,

December 31,

2022

2021

Consolidated balance sheet

Assets

Prepaid expenses and other current assets

$

1,743

$

3,517

Amounts due from related parties

400

393

Property and equipment, net

—

337

Liabilities

Amounts due to related parties

16,676

19,407

Accrued expenses

877

—

Three Months Ended September

30,

Nine Months Ended September

30,

2022

2021

2022

2021

Operating expenses

Research and development

Services provided by related parties

 $

—

 $

13,515

 $

1,139

 $

38,667

Taiwan CDC grant reimbursement from related party

—

—

—

(7,199)

General and administrative

Services provided by related parties

$

—

$

355

$

—

$

1,173

23

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited

condensed consolidated financial statements and related notes and other financial information appearing elsewhere in this Quarterly

Report. We intend for this discussion to provide you with information that will assist you in understanding our unaudited condensed

consolidated financial statements, the changes in key items in those unaudited condensed consolidated financial statements from

period to period and the primary factors that accounted for those changes.

Some of the information contained in this discussion and

analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business

and related financing, includes forward -looking statements that involve risks, uncertainties and assumptions. See the section of this

Quarterly Report titled “Special Note Regarding Forward-Looking Statements” for a discussion of forward-looking statements. As a

result of many factors, including those factors set forth in the “Risk Factors” section of this Quarterly Report, our actual results could

differ materially from management’s expectations and the results described in or implied by the forward-looking statements contained

in the following discussion and analysis.

Overview

Vaxxinity is engaged in the development and commercialization of rationally designed prophylactic and therapeutic vaccines to combat

common chronic disorders and infectious diseases with large global unmet medical needs. Vaccines offer significant cost, convenience

and accessibility advantages over other forms of treatment, but have traditionally been unable to effectively and safely combat chronic

diseases. We believe our platform may be able to do so, expanding access to, and reducing costs of, treatments across a potentially broad

spectrum of illnesses. Our Vaxxine Platform relies on a synthetic peptide vaccine technology first developed by UBI and subsequently

refined over the last two decades. We believe our vaccines have the potential to combat conditions that have not yet been successfully

treated, or which have been addressed with monoclonal antibodies (“mAbs”) which, while generally effective, are far more costly and

cumbersome to administer than vaccines, and thus are generally less accessible. Our pipeline is centered around common chronic

diseases, pursuing validated targets in neurology, pain and cardiovascular indications. We have also leveraged our Vaxxine Platform’s

applicability to infectious disease and are advancing next-generation booster candidate for SARS-CoV-2.

We separated our business from UBI through two transactions: a spin-out from UBI in 2014 of operations focused on developing chronic

disease product candidates that resulted in UNS, and a second spin-out from UBI in 2020 of operations focused on the development of

a COVID-19 vaccine that resulted in COVAXX. On February 2, 2021, Vaxxinity was incorporated for the purpose of reorganizing and

combining UNS and COVAXX and did so on March 2, 2021 through the Reorganization. The Reorganization was determined to be a

common control transaction, so the carrying values of all contributed assets and assumed liabilities remained unchanged and the financial

information for all periods in this section of the financial statements presented prior to the Reorganization are presented on a consolidated

basis. Unless the context requires otherwise, in this section we use the terms “Vaxxinity,” “we,” “us” and “our” to refer to our operations

(including through UNS and COVAXX) both prior to and after the Reorganization.

Since our spin-out transactions from UBI, we have focused on organizing and staffing our business, business planning, raising capital,

developing our Vaxxine Platform and pipeline candidates, identifying and testing potential product candidates and conducting clinical

trials. We have also developed a SARS CoV-2 antibody ELISA test, which received an EUA from the FDA in January 2021.

Our chronic disease pipeline consists of five programs from early to late-stage development. These include two primary programs

focused on well-validated targets of chronic disease: UB-313, which targets CGRP to prevent migraines; and VXX-401, which targets

PCSK9 to lower LDL cholesterol and reduce the risk of cardiac events. We consider these to be potential best-in-class based on their

potential for enhanced convenience, increased durability, expanded accessibility and greater cost-effectiveness as compared to biologics

and other available treatments. Moreover, for both of these programs, there is a known regulatory pathway to approval and either a

surrogate marker or experimental provocation that can facilitate and accelerate development decisions. We began dosing subjects in a

Phase 1 first-in-human trial of UB-313 in September 2022, and anticipate progressing VXX-401 into the clinic by the first half of 2023.

We have three programs that comprise our neurodegenerative disease pipeline: UB-311, our leading neurology product candidate, in

development for Alzheimer’s Disease (“AD”); UB-312, in development for Parkinson’s Disease (“PD”) and other synucleinopathies;

and an anti-tau product candidate which has the potential to address multiple neurodegenerative conditions, including AD. These

programs have the unique potential to not only

treat

 neurodegenerative diseases but also, depending on potential safety, convenience

and accessibility advantages of our vaccine approach,

prevent

 neurodegenerative diseases. Realizing that these neurodegenerative

disease and disease prevention candidates will require significantly more time and resources in connection with regulatory approval, we

are seeking strategic partnerships and/or dedicated investment in connection with the further advancement of these programs.

We believe in our Vaxxine Platform’s capability to create candidates to address a wide range of other chronic diseases, including those

that are or could potentially be successfully treated by mAbs, which increasingly dominate the treatment paradigm for many chronic

diseases.

24

In addition to our chronic disease pipeline, we are advancing an infectious disease product candidate, UB-612, as a heterologous booster

vaccine for SARS-CoV-2. We have reported results of our UB-612 Phase 1, Phase 2, and Phase 1 extension clinical trials. An EUA

application for UB-612 was denied by the TFDA in August 2021. We are pursuing accelerated pathways to authorization with regulators

in multiple jurisdictions, including high income countries and LMICs, based on a global Phase 3 heterologous booster trial of UB-612

that began in the first half of 2022.

We have principally funded our operations through financing transactions. Through September 30, 2022, we received gross proceeds of

$306.4 million in connection with various financial instruments, including the sale of preferred and common stock, the issuance of

promissory notes (including convertible promissory notes (“Convertible Notes”)), the entry into simple agreements for future equity

(“SAFEs”), and proceeds from our initial public offering. Additionally, we have been awarded grants totaling $10.0 million from the

Coalition for Epidemic Preparedness Innovations and the Michael J. Fox Foundation. The Company will continue to pursue non-dilutive

sources of financing, including grants, collaboration agreements, and revenue from the sale of our products. However, our ability to

generate revenue sufficient to achieve profitability will depend on the eventual regulatory approval, and successful commercialization

of one or more of our product candidates. To date, we have not yet obtained any regulatory approvals for our pipeline product candidates.

Costs associated with research and development are the most significant component of our expenses. These costs can vary greatly from

period to period depending on the timing of various trials for our product candidates. We expect our allocated research and development

costs to be in line with recent levels over the next 12 months and that they may increase over time as we expand the number of product

candidates that we are advancing, whether exclusively or with partners . Further, if we commercialize any of our product candidates in

the future on our own, we anticipate incurring greater selling and marketing expenses. Our product candidates are in clinical stage or

pre-clinical stage development, and we have generated limited revenue to date and have incurred significant operating losses since

inception. Net losses were $19.3 million and $30.4 million for the three months ended September 30, 2022 and 2021, respectively. Net

losses were $54.8 million and $89.3 million for the nine months ended September 30, 2022 and 2021, respectively. As of September 30,

2022, we had an accumulated deficit of $284.2 million. Our

expenses and capital requirements may increase over time in connection

with our operations, which could include:

•

continuing pre-clinical studies, existing clinical trials, and initiating new clinical trials for product candidates, including clinical

trials of UB-313 and VXX-401;

•

commercializing UB-612 and meeting post-marketing regulatory commitments;

•

hiring additional clinical, quality control, medical, scientific and other technical personnel to support clinical and research and

development programs;

•

expanding operational, financial and management systems and infrastructure, expanding our facilities and increasing personnel

to support operations;

•

maintaining, expanding and protecting our intellectual property portfolio;

•

seeking regulatory approvals for any product candidates that successfully complete clinical trials; and

•

undertaking pre-commercialization activities to establish sales, marketing , pharmacovigilance and distribution capabilities for

any product candidates for which we may receive regulatory approval in regions where we elect to commercialize products

on our own or jointly with third parties.

As of the date of this Report, we expect our existing cash and cash equivalents will be sufficient to fund our operating expenses and

capital expenditure requirements for at least the next 12 months. We believe that cash and cash equivalents and highly liquid assets on

hand will enable us to fund our operating expenses and capital requirements beyond the end of 2023, and do not anticipate any equity

capital raising activities in the near-term at or around current public market valuation levels. Thereafter, our viability will depend on our

ability to raise additional capital to finance operations through debt or equity raises, or non-dilutive sources such as grants, successful

product commercialization and/or collaborations with third parties for the development of our product candidates. If we are unable to

do any of the foregoing, we would be forced to delay, limit, reduce or terminate our product candidate development or future

commercialization efforts. Our estimates are based on a variety of assumptions that may prove to be wrong, and we could exhaust our

available capital resources sooner than expected. See “— Liquidity and Capital Resources.” 

Business Update Regarding COVID-19 Pandemic

In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. The onset of the pandemic led to our

institutional prioritization of COVID-19 vaccine development efforts, which correlated to a decline in research and development

expenditures for our chronic disease product candidates. To date, our operations have not been negatively impacted by the COVID-19

pandemic in a material manner. However, at this time, we cannot predict the specific extent, duration or full impact that the COVID-19

pandemic will have on our financial condition and operations, but the development of clinical supply materials could be delayed and

25

enrollment of patients in our studies may be delayed or suspended, as hospitals and clinics in areas where we are conducting trials shift

resources to cope with the COVID-19 pandemic and may limit access or close facilities due to the COVID-19 pandemic. Additionally,

if our trial participants are unable to travel to our clinical study sites as a result of quarantines or other restrictions resulting from the

COVID-19 pandemic, we may experience higher drop-out rates or delays in our clinical studies. The impact of the COVID-19 pandemic

on our financial performance will depend on future developments, including the duration and spread of the pandemic and related

governmental advisories and restrictions. These developments and the impact of the COVID-19 pandemic on the financial markets and

the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for

an extended period, our results may be materially adversely affected. See “Risk Factors—Risks Related to Our Business and Industry

in our Annual Report on Form 10-K for the year ended December 31, 2021—The ongoing coronavirus pandemic has caused

interruptions or delays of our business plan. Delays caused by the coronavirus pandemic may have a significant adverse effect on our

business.”

Components of Our Unaudited Condensed Consolidated Results of Operations

Revenue 

No revenue was generated during the three and nine months ended September 30, 2022. Revenue of $0.1 million was generated during

the three and nine months ended September 30, 2021 and consisted of commercial sales of our ELISA tests. We do not expect to generate

any meaningful revenue unless and until we obtain regulatory approval of and commercialize our product candidates, and we do not

know when, or if, this will occur. If our development efforts for our product candidates are successful and result in commercialization,

we may generate additional revenue in the future from a combination of product sales or payments from collaboration or license

agreements that we have entered into or may enter into with third parties. See “Risk Factors—Risks Related to the Discovery and

Development of Product Candidates in our Annual Report on Form 10-K for the year ended December 31, 2021. We have incurred

significant losses since our inception. We expect to incur losses for the foreseeable future and may never achieve or maintain

profitability.”

Cost of Revenue 

Cost of revenue consists of kit production costs consisting of materials, labor and overhead expenses directly related to ELISA tests sold

and the costs of expired ELISA tests, which are not available for commercial sale. 

If our development efforts in respect of our current pipeline of product candidates are successful and result in regulatory approval, we

expect our cost of revenue will increase in relative proportion to the level of our revenue as we commercialize the applicable product

candidate. We expect that cost of revenue will increase in absolute dollars as and if our revenue grows and will vary from period to

period as a percentage of revenue. 

Research and Development Expenses 

The design, initiation and execution of candidate discovery and development programs of our future potential product candidates is key

to our success and involves significant expenses. Prior to initiating these programs, project teams incorporating individuals from the

essential disciplines within Vaxxinity scope out the activities, timing, requirements, and design of the clinical trials. Once we have

decided to proceed, our Vaxxine Platform enables the iteration of drug candidates in the discovery phase through rapid, rational design

and formulation. After we have identified drug candidates, scaling their formulation from research grade to clinical grade, then to

commercial grade, typically consumes significant resources. In addition to internal research and development, we utilize service

providers, including related parties, to complete activities we do not have the internal resources to handle.

Research and development expenses consist primarily of costs incurred for research activities, including drug discovery efforts and the

development of our product candidates. We expense research and development costs as incurred, which include:

•

expenses incurred to conduct the necessary preclinical studies and clinical trials required to obtain regulatory approval;

•

expenses incurred under agreements with CROs that are primarily engaged in the oversight and conduct of our clinical trials,

preclinical studies and drug discovery efforts, and contract manufacturers that are primarily engaged to provide preclinical

and clinical drug substance and product for our research and development programs;

•

other costs related to acquiring and manufacturing materials in connection with our drug discovery efforts and preclinical

studies and clinical trial materials, including manufacturing validation batches, as well as investigative sites and consultants

that conduct our clinical trials, preclinical studies and other scientific development services;

•

employee-related expenses, including salaries and benefits, travel and stock-based compensation expense for employees

engaged in research and development functions;

26

•

costs related to compliance with regulatory requirements; and

•

facilities-related costs, depreciation and other expenses, which include rent and utilities.

We recognize external development costs based on an evaluation of the progress to completion of specific tasks using information

provided to us by service providers. This process involves reviewing open contracts and purchase orders, communicating with personnel

to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred

for the service when we have not yet been invoiced or otherwise notified of actual costs. Any advance payments that we make for goods

or services to be received in the future for use in research and development activities are recorded as prepaid expenses. Such amounts

are expensed as the related goods are delivered or the related services are performed, or until it is no longer expected that the goods will

be delivered or the services rendered, at which point the net remainder is expensed.

We rely on related parties for certain services to advance our research and development programs, including manufacturing, quality

control, testing, validation, supply services, research support, development and clinical functions. During the nine months ended

September 30, 2022 and 2021, related party expenses were approximately 3.6% and 58.0% of our research and development expenses,

respectively. 

Where appropriate, we allocate our third-party research and development expenses on a program-by-program basis. These expenses

primarily relate to outside consultants, CROs, contract manufacturers and research laboratories in connection with pre-clinical

development, process development, manufacturing and clinical development activities. We do not allocate our internal costs, such as

employee costs, costs associated with our discovery efforts, laboratory supplies and facilities, including depreciation or other indirect

costs, to specific programs because these costs often relate to platform development, to multiple programs simultaneously or to discovery

of new programs, and any such allocation would necessarily involve significant estimates and judgments and, accordingly, would be

imprecise. When we refer to the research and development expenses associated with a specific program, these refer exclusively to the

allocated third-party expenses associated with that product candidate. All other research and development costs are referred to as

unallocated costs.

Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical

development, primarily due to the increased size and duration of later-stage clinical trials. In an effort to help mitigate costs and use of

capital, it is the Company’s intention to advance late stage assets, such as UB-311, into large -scale trials with one or more strategic

partners. In the case of UB-311, t

he anticipated timing for the Phase 2b trial initiation will be determined once a strategic partnership

materializes. We believe the decision to share development costs with a partner for this program will allow Vaxxinity to focus resources

on the development of its other chronic disease candidates, as we initiate clinical trials for two potential best-in-class programs (UB-

313 and VXX-401).

At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the

pre-clinical and clinical development of any of our product candidates or when, if ever, material net cash inflows may commence from

any of our product candidates

General and Administrative Expenses 

General and administrative expenses consist primarily of salaries and benefits, travel and stock-based compensation expense for

personnel in the executive, business development, finance, human resources, legal, information technology and administrative functions.

General and administrative expenses also include facility- related costs as well as insurance costs and professional fees for legal, patent,

consulting, investor and public relations, accounting and audit services and other general operating expenses not otherwise classified as

research and development expenses. We expense general and administrative costs as incurred.

In the event UB-612 becomes authorized by a regulatory authority and commercially available, general and administrative expenses

may increase in the future. We will continue to incur public company-related expenses, including services associated with maintaining

compliance with Nasdaq listing and SEC requirements, director and officer liability insurance and investor and public relations costs.

Other Expense (Income) 

Interest Expense 

Interest expense consists of (i) interest expense recognized on the note payable entered into during June 2020 for the acquisition of an

airplane (the “2025 Note”), (ii) interest expense recognized on the Convertible Notes and (iii) interest expense recognized on other

promissory notes, including $0.1 million borrowed from our Chief Executive Officer (the “Executive Note”) and a related party

Convertible Note payable for $2.0 million in aggregate proceeds that was received in three tranches (the “2018 Related Notes”). The

Executive Note was repaid in full in August 2021 and the 2018 Related Notes were converted into Series A preferred stock concurrently

with the Reorganization.

27

Interest Income

Interest income consists of income earned on our cash and cash equivalents, money market holdings, and short-term investments. 

Change in Fair Value of Convertible Notes, SAFEs and Series A-1 Warrant Liability 

We issued a series of Convertible Notes during the years 2018 through 2021, a series of SAFEs during 2020 and 2021, and warrants to

purchase shares of our Series A-1 preferred stock (“Series A-1 Warrants”) during 2020, each of which were measured and accounted

for at fair value. We remeasured the fair value of each of the Convertible Notes, SAFEs and Series A-1 Warrants at each reporting date

and recognize changes in the fair value in our unaudited condensed consolidated statements of operations. Inputs to the calculation of

fair value generally included market and acquisition comparable(s) as well as other variables. In connection with the Reorganization, all

outstanding Convertible Notes, SAFEs, and Series A-1 Warrants were exchanged for shares of Series A preferred stock, which were

subsequently exchanged into shares of Class A common stock upon closing of the IPO in November 2021.

Loss on Foreign Currency Translation, Net 

Our foreign subsidiaries, which are wholly-owned by Vaxxinity , use the U.S. dollar as their functional currency and maintain records

in the local currency. Nonmonetary assets and liabilities are remeasured at historical rates and monetary assets and liabilities are

remeasured at exchange rates in effect at the end of the reporting period. Income statement accounts are remeasured at average exchange

rates for the reporting period. The resulting gains or losses are included in foreign currency (losses) gains in the unaudited condensed

consolidated financial statements.

Provision for Income Taxes 

We have not recorded any significant amounts related to income tax but have reserved $0.6 million of unrecognized tax benefits against

NOLs. We have not recorded any income tax benefits for the majority of our net losses we incurred to date. 

We account for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities

for the expected future tax consequences of events that have been included in the unaudited condensed consolidated financial statements

or our tax returns. 

Deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax basis

of existing assets and liabilities and for loss and credit carryforwards, which are measured using the enacted tax rates and laws in effect

in the years in which the differences are expected to reverse. The realization of our deferred tax assets is dependent upon the generation

of future taxable income, the amount and timing of which are uncertain. Valuation allowances are provided, if, based upon the weight

of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. As of September 30, 2022,

we continue to maintain a full valuation allowance against all of our deferred tax assets based on evaluation of all available evidence.

We file income tax returns in the U.S. federal and state jurisdictions and may become subject to income tax audit and adjustments by

related tax authorities. Our tax return periods (for entities then in existence) for U.S. federal income taxes for the tax years since 2017

remain open to examination under the statute of limitations by the Internal Revenue Service and state jurisdictions. We record reserves

for potential tax payments to various tax authorities related to uncertain tax positions, if any. The nature of uncertain tax positions is

subject to significant judgment by management and subject to change, which may be substantial. These reserves are based on a

determination of whether and how much a tax benefit taken by us in our tax filings or positions is more likely than not to be realized

following the resolution of any potential contingencies related to the tax benefit. We develop our assessment of uncertain tax positions,

and the associated cumulative probabilities, using internal expertise and assistance from third-party experts. As additional information

becomes available, estimates are revised and refined. Differences between estimates and final settlement may occur resulting in

additional tax expense. Potential interest and penalties associated with such uncertain tax positions is recorded as a component of our

provision for income taxes. 

Factors Affecting the Comparability of Our Unaudited Condensed Consolidated Results of Operations 

Reorganization

On March 2, 2021, Vaxxinity entered into the Contribution and Exchange Agreement, pursuant to which the outstanding equity interests

of UNS and COVAXX were contributed to Vaxxinity in return for equity interests in Vaxxinity, resulting in UNS and COVAXX

becoming wholly owned subsidiaries of Vaxxinity. Accordingly, all share and per share amounts prior to the Reorganization have been

adjusted to reflect the Reorganization. As a result, the historical financial information between January 1, 2021 and March 2, 2021

described in this Quarterly Report refers to the combined historical financial information of UNS and COVAXX. Our operations for the

nine months ended September 30, 2022 reflects the operations of Vaxxinity and its subsidiaries. Our operations for the nine months

ended September 30, 2021 reflects the operations of UNS and COVAXX businesses on a condensed consolidated basis for the period

from January 1, 2021 to March 1, 2021 and of Vaxxinity and its subsidiaries for the remainder of that six-month period. See Note 1 to

our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report. 

28

Condensed Consolidated Results of Operations

Comparison of the Three and Nine Months Ended September 30, 2022 and 2021

The following table summarizes our unaudited condensed consolidated results of operations for the three and nine months ended

September 30, 2022 and 2021, together with the dollar change in those items from period to period (in thousands): 

Three Months Ended September 30,

Nine Months Ended September 30,

2022

2021

Change

2022

2021

Change

Revenue

$

—

$

50

$

(50)

$

—

$

67

$

(67)

Costs of revenue

—

9

(9)

—

1,937

(1,937)

Gross (loss) profit

—

41

(41)

—

(1,870)

1,870

Operating expenses:

Research and development

12,468

23,443

(10,975)

34,609

54,324

(19,715)

General and administrative

7,300

6,873

427

20,546

21,130

(584)

Total operating expenses

19,768

30,316

(10,548)

55,155

75,454

(20,299)

Loss from operations

(19,768)

(30,275)

10,507

(55,155)

(77,324)

22,169

Other (income) expense:

Interest expense

54

112

(58)

264

732

(468)

Interest income

(545)

(3)

(542)

(625)

(6)

(619)

Change in fair value of

convertible notes

—

—

—

—

2,667

(2,667)

Change in fair value of simple

agreements for future equity

—

—

—

—

8,365

(8,365)

Change in fair value of

warrant liability

—

—

—

—

214

(214)

Loss (gain) on foreign

currency translation, net

(25)

5

(30)

(28)

24

(52)

Other (income) expense, net

(516)

114

(630)

(389)

11,996

(12,385)

Net loss

$

(19,252)

$

(30,389)

$

11,137

$

(54,766)

$

(89,320)

$

34,554

Revenue 

Revenues for all periods presented are negligible. All revenue and comparable decreases were due to sales of our ELISA tests. We are

not actively pursuing commercialization of our ELISA tests at this time.

Gross Margin

All gross margin and comparable decreases were due to sales of our ELISA tests. Gross margin was zero for the three and nine months

ended September 30, 2022. During the nine months ended September 30, 2021, we wrote off, to cost of revenue, $1.9 million in expired

ELISA tests that had no commercial value.

Research and Development Expenses 

Comparison of the three months ended September

30, 2022 to the three months ended September

30, 2021

Research and development expenses were $12.5 million and $23.4 million for the three months ended September 30, 2022 and 2021,

respectively. The $10.9 million decrease was comprised of a $14.6 million decrease in allocated costs (i.e., costs that can be directly

attributed to a specific clinical program), and a $3.6 million increase in unallocated costs. The decrease in allocated costs was primarily

due to a decrease of $14.9 million in costs related to our UB-612 Covid vaccine program, $0. 7 million to our UB-311 AD program and

$0.3 million to our UB-312 PD program, offset by increases in spend of $1.3 million on our VXX-401 hypercholesterolemia program

and a $2.6 million expense recognized in the three months ended September 30, 2022 for UB-612 raw materials acquired by UBP, a

related party contract manufacturer. See Note 15, “Commitments and Contingencies”, for more information about this expense. The

$3.6 million increase in unallocated costs was driven by increased salaries and personnel-related costs of $2.1 million, including stock-

based compensation expense of $0.5 million, a $0.8 million increase in rent, facilities and travel costs, and a $0.7 million increase in

external professional services supporting research and development activities across the pipeline. 

29

Comparison of the nine months ended September

30, 2022 to the nine months ended September

30, 2021

Research and development expenses were $34.6 million and $54.3 million for the nine months ended September 30, 2022 and 2021,

respectively. The $19.7 million decrease was comprised of a $31.7 million decrease in allocated costs (i.e., costs that can be directly

attributed to a specific clinical program), offset by an $12.0 million increase in unallocated costs. The decrease in allocated costs was

primarily due to a decrease of $37.8 million in costs related to our UB-612 Covid vaccine program, offset by increases in spend of $3.1

million on our VXX-401 hypercholesterolemia program, $1.6 million on our UB-313 CGRP program , $1.1 million on our UB-312 PD

program, and a $2.6 million expense recognized in the nine months ended September 30, 2022 for UB-612 raw materials acquired by

UBP, a related party contract manufacturer. See Note 15, “Commitments and Contingencies”, for more information about this expense.

The $12.0 million increase in unallocated costs was driven by increases in salaries and personnel-related costs of $9.5 million, including

stock-based compensation expense of $1.7 million, a $1.3 million increase in external professional services supporting research and

development activities across the pipeline, and a $1.2 million increase in facilities and other overhead costs. 

General and Administrative Expenses 

Comparison of the three months ended September

30, 2022 to the three months ended September

30, 2021

General and administrative expenses were $7.3 million and $6.9 million for the three months ended September 30, 2022 and 2021,

respectively. The $0.4 million increase was primarily due to increases in Directors and Officers (D&O) insurance costs of $1.1 million

and salaries and personnel-related costs of $0.3 million, partially offset by decreases of $1.0 million consulting costs and professional

services. 

Comparison of the nine months ended September

30, 2022 to the nine months ended September

30, 2021

General and administrative expenses were $20.5 million and $21.1 million for the nine months ended September 30, 2022 and 2021,

respectively. The $0.6 million decrease was primarily due to decreases of $1.2 million in legal spend, $1.0 million in consulting spend,

and $0.9 million in travel expense versus the prior year period when the company was planning to go public. Spending on external

recruiters also declined by $0.7 million. These cost decreases were partially offset by increases in D&O insurance costs of $2.9 million.

Interest Expense

Comparison of the three months ended September

30, 2022 to the three months ended September

30, 2021

Interest expense was $0.1 million and $0.1 million for the three months ended September 30, 2022 and 2021, respectively. 

Comparison of the nine months ended September

30, 2022 to the nine months ended September

30, 2021

Interest expense was $0.3 million and $0.7 million for the nine months ended September 30, 2022 and 2021, respectively. The $0.4

million decrease was due to the exchange of Convertible Notes for Series A preferred stock in connection with the Reorganization. 

Interest Income

Comparison of the three months ended September

30, 2022 to the three months ended September

30, 2021

Interest income on cash and short-term investments was $0.5 million and less than $0.1 million for the three months ended September 30,

2022 and 2021, respectively.

Comparison of the nine months ended September

30, 2022 to the nine months ended September

30, 2021

Interest income on cash and short-term investments was $0.6 million and less than $0.1 million for the nine months ended September 30,

2022 and 2021, respectively.

Change in Fair Value of Convertible Notes, SAFEs and Series A-1 Warrant Liability

In connection with the Reorganization, all outstanding Convertible Notes, SAFEs and Series A-1 Warrants were exchanged into shares

of Series A preferred stock, which were subsequently exchanged into shares of Class A common stock upon the closing of the IPO in

November 2021.

The $2.7 million change in fair value of the Convertible Notes recognized during the nine months ended September 30, 2021 related to

the revaluation of the Convertible Notes upon conversion to equity. The $8.4 million change in fair value of SAFEs recognized during

the nine months ended September 30, 2021 related to insight into the pricing of Vaxxinity’s next stock issuance at a higher valuation.

30

The $0.2 million change in fair value of Series A-1 Warrants recognized during the nine months ended September 30, 2021 related to

an increase in value of the Series A-1 preferred stock. 

Loss on Foreign Currency Translation, Net 

The net loss of foreign currency translation reflects increases in the US dollar foreign exchange rate for the three months ended

September 30, 2022 compared to the three months ended September 30, 2021 and the nine months ended September 30, 2022 compared

to the nine months ended September 30, 2021. 

Liquidity and Capital Resources

Sources of Liquidity 

We have generated limited revenue from sales of our ELISA tests and have not yet commercialized any of our product candidates, which

are in various phases of pre-clinical and clinical development. Prior to going public in late 2021, we financed operations primarily

through the issuance of convertible preferred stock, borrowings under promissory notes (including Convertible Notes) and the execution

of SAFEs. Through December 31, 2020, we received gross proceeds of $99.3 million in connection with the issuance of various financial

instruments, including the sale of preferred stock, the issuance of promissory notes (including Convertible Notes), and the execution of

SAFEs. In addition, we also generated revenue from the sale of an option to negotiate a license with UNS (which option has expired)

and the sales of ELISA tests in 2020 and 2021. During the year ended December 31, 2021, we raised a total of $198.8 million, which

consisted of $71.1 million in net proceeds from the issuance of common stock in connection with the IPO, $122.8 million in net proceeds

from the issuance of Series B preferred shares, $2.0 million in net proceeds from the issuance of convertible debt, and $2.9 million in

net proceeds from the issuance of SAFEs. At September 30, 2022, the Company had $102.2 million of highly liquid assets to fund

operations, including $18.9 million of cash and cash equivalents, $80.2 million of short-term investments, and a $3.1 million restricted

cash balance, compared to $144.9 million as of December 31, 2021. The decrease in liquid assets for the periods reported are primarily

due to the factors described under “Cash Flows” below.

Cash Flows

The following table provides information regarding our cash flows for the nine months ended September 30, 2022 and 2021 (in

thousands): 

September 30,

December 31,

2022

2021

Balance Sheet Data:

Cash and cash equivalents

$

18,875

$

144,885

Short-term investments, net

80,233

—

Restricted cash

3,073

172

Total assets

122,960

166,673

Total liabilities

42,699

38,054

Total stockholders' equity

$

80,261

$

128,619

Nine Months Ended September 30,

2022

2021

Statement of Cash Flow Data:

Net cash used in operating activities

$

(41,451)

$

(67,026)

Net cash used in investing activities

(81,600)

(50)

Net cash provided by financing activities

(58)

125,308

Net (decrease) increase in cash, cash equivalents and restricted cash

$

(123,109)

$

58,232

Operating Activities

Net cash used in operating activities for the nine months ended September 30, 2022 was $41.5 million, primarily resulting from a $54.8

million net loss, an unfavorable $6.2 million change in operating assets and liabilities and total non-cash items of $7.1 million. The

changes in net operating assets and liabilities were primarily due to a decrease of $2.7 million in amounts due to related party, a $7.5

million increase in accrued expenses and other current liabilities, a $3.3 million increase in prepaid expenses, and a $2.1 million decrease

in long-term deposits. The primary non-cash adjustments to net loss consisted of $6.4 million of stock-based compensation and $1.1

million in depreciation. 

31

Net cash used in operating activities for the nine months ended September 30, 2021 was $67.0 million, primarily due to an $89.3 million

net loss and an increase of $3.9 million in net operating assets and liabilities and an increase in total non-cash items of $18.4 million.

The cash flow impact from changes in net operating assets and liabilities were primarily due to $13.2 million in amounts due to related

party as well as $4.8 million related to accrued expense, accounts payable and other liabilities. These increases were offset by $10.2

million in prepaid expenses for UB-612 production as well as $4.0 million in deferred offering costs. The primary non-cash adjustments

to net loss included an $11.2 million change in the fair market value of financial instruments as well as $5.7 million of stock-based

compensation and $0.9 million in depreciation.

Investing Activities

Net cash used in investing activities totaled $81.6 million for the nine months ended September 30, 2022. The cash used in investing

activities consisted primarily of the acquisition of equipment and short -term investments. 

Net cash used in investing activities was less than $0.1 million for the nine months ended September 30, 2021. The cash used in investing

activities consisted primarily of the acquisition of equipment.

Financing Activities

Net cash used by financing activities was less than $0.1 million for the nine months ended September 30, 2022. We repaid $0.3 million

in relation to a note payable and received $0.3 million from the exercise of stock options.

Net cash provided by financing activities totaled $125.3 million for the nine months ended September 30, 2021. We raised capital

through the issuance of Series B preferred stock, with net proceeds of $122.8 million, and the issuance prior to the March 2021

Reorganization of SAFEs and Convertible Notes, with net proceeds of $2.9 million and $2.0 million, respectively. We also repaid $2.0

million in relation to a Convertible Note and $0.3 million in relation to a Paycheck Protection Program loan.

Funding Requirements

We have generated approximately $3.7 million in revenue since inception and have incurred net losses in each reporting period since

inception. We do not expect to generate any meaningful revenue unless and until we obtain regulatory approval of and commercialize

our product candidates, secure out-licensing agreements or form strategic partnerships. We do not know when, or if, this will occur.

Therefore, we will likely continue to incur significant losses for the foreseeable future, and losses may increase as we continue the

development of, and seek regulatory approvals for, our product candidates and begin to commercialize any approved products.

As of the date of this Quarterly Report, we expect our existing cash and cash equivalents will be sufficient to fund our operating expenses

and capital expenditure requirements for at least the next 12 months. As of September 30, 2022, other than our 2025 Note, we have no

material debt obligations.

We have based our projections of operating capital requirements on assumptions that may prove to be incorrect, and we may use all of

our available capital resources sooner than we expect. Our future capital requirements will depend on many factors, which include:

•

the number of discovery and pre-clinical programs that we pursue and the speed with which they are advanced;

•

the number, size, and nature of clinical trials that we conduct;

•

the length of time it takes for regulators to review and approve any product candidates that successfully complete clinical

trials;

•

the timing and manner in which we manufacture our pre-clinical and clinical drug material, the terms on which we can have

such manufacturing completed, and the extent to which we undertake commercialization of any drug products, if approved;

•

the timing and extent to which we secure out-licensing agreements for our products or form strategic partnerships; 

•

the extent to which we establish sales, marketing, medical affairs and distribution infrastructure to commercialize any product

candidates;

•

the timing and extent to which we expand our operational, financial and management systems and infrastructure, and

facilities; 

•

the timing and extent to which we increase our personnel to support operations, including necessary increases in headcount to

conduct and expand our clinical trials, commercialize any approved products and support our operations as a public

company; and

32

•

the number of patent applications we must file and claims we must defend in order to maintain, expand and protect our

intellectual property portfolio, and the costs of preparing, filing and prosecuting patent applications, maintaining and

protecting our intellectual property rights.

Until such time, if ever, as we can generate positive cash flows from operations, we expect to finance our cash needs through public or

private equity offerings, strategic collaborations and debt financing. To the extent that we raise additional capital through the sale of our

Class A common stock, convertible securities or other equity securities, shareholders’ ownership interest will be diluted and the terms

of these securities could include liquidation or other preferences and anti-dilution protections. In addition, debt financing, if available,

may result in fixed payment obligations and may involve agreements that include restrictive covenants that limit our ability to take

specific actions, such as incurring additional debt, making capital expenditures, creating liens, redeeming shares or declaring dividends.

If we raise additional funds through strategic collaborations or marketing, distribution or licensing arrangements with third parties, we

may have to relinquish valuable rights to our technologies, future revenue streams or product candidates or grant licenses on terms that

may not be favorable to us. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or

terminate our product candidate development or future commercialization efforts or grant rights to third parties to develop and market

product candidates that we would otherwise prefer to develop and market ourselves. 

Contract Research and Manufacturing Organizations

We recorded accrued expenses of $2.5 million in our balance sheet for expenditures incurred by CROs and contract manufacturers as

of September 30, 2022 and $4.5 million as of December 31, 2021 .

Tax -Related Obligations

We have reserved $0.6 million of unrecognized tax benefits against NOLs. Additionally, as of September 30, 2022, we accrued $0.2

million in interest and penalties related to prior year tax filings.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and do not currently have, any off-balance sheet arrangements, as defined in the rules and

regulations of the SEC. 

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect

the amounts reported in our unaudited condensed consolidated financial statements and accompanying notes. Management bases its

estimates on historical experience, market and other conditions, and various other assumptions it believes to be reasonable. Although

these estimates are based on management’s best knowledge of current events and actions that may impact us in the future, the estimation

process is, by its nature, uncertain given that estimates depend on events over which we may not have control. In addition, if our

assumptions change, we may need to revise our estimates, or take other corrective actions, either of which may also have a material

effect on our unaudited condensed consolidated financial statements. Significant estimates contained within these unaudited condensed

consolidated financial statements include, but are not limited to, the estimated fair value of our common stock, stock-based

compensation, income tax valuation allowance and the accruals of research and development expenses. We base our estimates on

historical experience, known trends and other market-specific or other relevant factors that we believe to be reasonable under the

circumstances. On an ongoing basis, management evaluates its estimates, as there are changes in facts and circumstances. If market and

other conditions change from those that we anticipate, our unaudited condensed consolidated financial statements may be materially

affected.

While our significant accounting policies are described in more detail in the notes to our unaudited condensed consolidated financial

statements appearing elsewhere in this Quarterly Report, we believe that the following critical accounting policies and estimates have a

higher degree of inherent uncertainty and require our most significant judgments.

Accrued Research and Development Expenses

As part of the process of preparing our unaudited condensed consolidated financial statements, we are required to estimate accrued

research and development expenses. As we advance our programs, we anticipate conducting more complex clinical studies resulting in

greater research and development expenses, which will place even greater emphasis on the accrual. This process involves reviewing

open contracts and purchase orders, communicating with our applicable personnel to identify services that have been performed on our

behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced

or otherwise notified of actual costs. The majority of our service providers invoice in arrears for services performed, on a pre-determined

schedule or when contractual milestones are met; however, some require advance payments. We make estimates of accrued expenses as

33

of each balance sheet date in the unaudited condensed consolidated financial statements based on facts and circumstances known to us

at that time. We periodically confirm the accuracy of the estimates with the service providers and make adjustments if necessary.

Examples of estimated accrued research and development expenses include fees paid to:

•

vendors, including research laboratories, in connection with pre-clinical development activities;

•

CROs and investigative sites in connection with pre-clinical studies and clinical trials; and

•

contract manufacturers in connection with drug substance and drug product formulation of pre-clinical studies and clinical

trial materials.

We base our expenses related to pre-clinical studies and clinical trials on our estimates of the services received and efforts expended

pursuant to quotes and contracts with multiple research institutions and CROs that supply, conduct and manage pre-clinical studies and

clinical trials on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may

result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services

provided and result in a prepayment of the expense. Payments under some of these contracts depend on factors such as the successful

enrollment of patients and the completion of clinical trial milestones. In accruing service fees, we estimate the time period over which

services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or

the level of effort varies from the estimate, we adjust the accrual or the prepaid expense accordingly. Although we do not expect our

estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed

relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low

in any particular period. To date, our estimated accruals have not differed materially from actual costs incurred.

Stock-Based Compensation

We measure all stock-based awards granted to employees, directors and non-employees based on their fair value on the date of the grant

and recognize the corresponding compensation expense of those awards over the requisite service period, which is generally the vesting

period of the respective award. Forfeitures are accounted for as they occur. We grant stock options and restricted stock awards that are

subject to service vesting conditions.

We classify stock-based compensation expense in our unaudited condensed consolidated statements of operations in the same manner

in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.

We estimate the fair value of each stock option grant using the Black-Scholes option-pricing model, which requires the use of subjective

assumptions that could materially impact the estimation of fair value and related compensation expense to be recognized. These

assumptions include (i) the expected volatility of our stock price, (ii) the periods of time over which recipients are expected to hold their

options prior to exercise (expected lives), (iii) expected dividend yield on our common stock, and (iv) risk-free interest rates, which are

based on quoted U.S. Treasury rates for securities with maturities approximating the options’ expected lives. Developing these

assumptions requires the use of judgment. Both prior to and after the IPO, we lacked company-specific historical and implied volatility

information. Therefore, we estimate our expected stock volatility based on the historical volatility of a publicly traded set of peer

companies. The expected term of the Company’s options has been determined utilizing the “simplified” method for awards that qualify

as “plain-vanilla” options. The expected term of options granted to non-employees is equal to the contractual term of the option award.

The expected dividend yield is zero as we have never paid dividends and do not currently anticipate paying any in the foreseeable future.

Simple Agreement for Future Equity

During the three months ended March 31, 2021, we entered into SAFEs. The SAFEs were not mandatorily redeemable, nor did they

require us to repurchase a fixed number of shares. We determined that the SAFEs contained a liquidity event provision that embodied

an obligation indexed to the fair value of the equity shares and could require us to settle the SAFE obligation by transferring assets or

cash. Our SAFEs represented a recurring measurement that is classified within Level 3, of the fair value hierarchy, as disclosed and

defined in Note 3 in our Annual Report on Form 10-K for the year ended December 31, 2021, wherein fair value is estimated using

significant unobservable inputs, including an estimate of the number of months to a liquidity event, volatility rates and the estimation

of the most likely conversion feature for converting the SAFE.

The fair value of the SAFEs on the date of issuance was determined to equal the proceeds we received. The value of the SAFEs on the

date of conversion into Series A preferred stock was determined to be equal to the fair value of the Series A preferred stock issued in

connection with the Reorganization.

Convertible Notes

Beginning in 2018, we issued Convertible Notes that bore simple interest at annual rates ranging from 4.8% to 6%. All unpaid principal,

together with the accrued interest thereon, for the Convertible Notes were payable upon the event of default or upon maturity, which

34

ranged from one to three years. The Convertible Notes contained a number of provisions addressing automatic and optional conversion,

events of default and prepayment provisions. We determined that a portion of the Convertible Notes contained a liquidity event

provision, requiring them to be measured and accounted for at fair value at each reporting date. We determined that Convertible Notes

requiring a measurement to fair value represented a recurring measurement that was classified within Level 3 of the fair value hierarchy

wherein fair value is estimated using significant unobservable inputs, as disclosed and defined in Note 3 in our Annual Report on Form

10-K for the year ended December 31, 2021.

Taiwan Centers for Disease Control Grant

UBIA, which is responsible for applying for and managing grants on our behalf, was awarded a grant by the Taiwan Centers for Disease

Control (“TCDC”) for COVID-19 vaccine development. The grant provides that costs incurred to complete the two phases of the clinical

trial will be reimbursed based on the achievement of certain milestones as defined in the agreement. We are entitled to reimbursement

under the TCDC grant. At each reporting date, we assess the status of all of the activities involved in completing the clinical study in

relation to the milestones. We account for the amounts that have been received from the TCDC to reimburse costs incurred on the

clinical study and not expected to be refunded back to the TCDC as contra research and development expenses in the accompanying

unaudited condensed consolidated statement of operations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risk in the ordinary course of our business. These risks primarily relate to foreign currency and changes in

interest rates. 

Foreign Currency Exchange Risk 

We have limited exposure to foreign currency exchange risk as most of our operating activities are primarily denominated in U.S.

dollars. We believe actual foreign exchange gains and losses did not have a significant impact on our results of operations for any periods

presented herein. The results of the analysis based on our financial position as of September 30, 2022, indicated that a hypothetical 10%

increase or decrease in applicable foreign currency exchange rates would not have a material effect on our financial results.

Interest Rate Risk 

We are exposed to market risk related to changes in interest rates. As of September 30, 2022 and December 31, 2021, our cash

equivalents consisted of interest-bearing checking accounts and money market accounts. We issued Convertible Notes, which

Convertible Notes were exchanged for Series A preferred stock in connection with the Reorganization. The Convertible Notes bore

simple interest at the annual rates ranging from 4.8% to 6%, with redemption terms payable at the earlier of one year, or upon the event

of default. In addition, the Convertible Notes contained provisions addressing automatic and optional conversion. Given the redemption

of the Convertible Notes, and the short-term nature and fixed interest rate, we believe there is no material exposure to interest rate risk.

Additionally, the 2025 Note we entered into for the year ended December 31, 2020 bears an annual interest rate of 3.4% and matures in

June 2025. Given the fixed interest rate of the 2025 Note, we believe there is no material exposure to interest rate risk. The results of

the analysis based on our financial position as of September 30, 2022, indicated that a hypothetical 100 basis point increase or decrease

in risk-free rates would not have a material effect on our financial results.

Our measurement of interest rate risk involves assumptions that are inherently uncertain and, as a result, cannot precisely estimate the

impact of changes in interest rates on net interest revenues. Actual results may differ from simulated results due to balance growth or

decline and the timing, magnitude, and frequency of interest rate changes, as well as changes in market conditions and management

strategies, including changes in asset and liability mix. 

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal accounting officer, evaluated, as of the end of

the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in

Rules 13a-15(e) and 15d-15(e) under the Exchange Act). In designing and evaluating our disclosure controls and procedures,

management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable

assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact

that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls

and procedures relative to their costs. Based on management’s evaluation and, our principal executive officer and principal accounting

officer concluded that, as of September 30, 202 2, our disclosure controls and procedures were effective at the reasonable assurance

level.

35

Changes in Internal Control over Financial Reporting

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a

reasonable possibility that a material misstatement of a company’s annual and interim financial statements will not be detected or

prevented on a timely basis.

We invested resources to remediate the material weaknesses identified in the preparation of our audited consolidated financial statements

for the year ended December 31, 2021 and in the preparation of our unaudited consolidated financial statements for the quarter ended

March 31, 2022. These remediation activities involved the following:

• hiring additional accounting personnel with the appropriate level of skill and experience for public company financial reporting;

• designing and implementing a formal financial close process that includes multiple levels of reviews of accounting entries; and

• supplementing our resources for evaluating and accounting for complex transactions and stock options through the use of third-

party advisors.

Other than the measures described above, there were no changes in our internal control over financial reporting (as defined in Rules

13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2022 that have materially affected, or are

reasonably likely to materially affect, our internal control over financial reporting. 

Inherent Limitations on Effectiveness of Controls

Our management, including the principal executive officer and principal financial and accounting officer, does not expect that our

disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no

matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be

met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be

considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide

absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have

been detected. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and

there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of

any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become inadequate because

of changes in conditions or deterioration in the degree of compliance with policies or procedures.

36

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time we are a party to various litigation matters incidental to the conduct of our business. We are not presently party to

any legal proceedings the resolution of which we believe would have a material adverse effect on our business, prospects, financial

condition, liquidity, results of operation, cash flows or capital levels. 

Item 1A. Risk Factors.

As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called

for by this Item 1A. Risk factors describing the major risks to our business can be found under Item 1A., “Risk Factors,” in our Annual

Report on Form 10-K for the year ended December 31, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Unregistered Sales of Equity Securities

There were no unregistered sales of equity securities during the quarterly period ended September 30, 2022.

Use of Proceeds

On November 15, 2021, the Company closed its IPO, as discussed in Note 1 of our consolidated financial statements in the Annual

Report on Form 10-K for the year ended December 31, 2021. The aggregate net proceeds to us from the offering, after deducting

underwriting discounts and commissions and other offering expenses payable by us, was approximately $71.1 million. The proceeds

from our IPO have been invested primarily in money market accounts. There has been no material change in the expected use of the net

proceeds from our IPO as described in our prospectus filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on

November 12, 2021.

Item 6. Exhibits.

The following exhibits required by Item 601 of Regulation S-K are filed herewith or have been filed previously with the SEC as indicated

below:

Exhibit

No.

Index to Exhibits

3.1

Amended and Restated Certificate of Incorporation of Vaxxinity, Inc. to be in effect upon the completion of this

offering (incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K (File No. 001-41058) filed on

November 17, 2021).

3.2

Amended and Restated Bylaws of Vaxxinity, Inc. to be in effect upon the completion of this offering (incorporated by

reference to Exhibit 3.2 of our Current Report on Form 8-K (File No. 001 -41058) filed on November 17, 2021).

4.1

Warrant to Purchase Shares of Class A Common Stock of Vaxxinity, Inc. (incorporated by reference to Exhibit 4.1 of

our Registration Statement on Form S-1/A (File No. 333-260163) filed on November 5, 2021).

37

31.1

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

31.2

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

32.1

Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-

Oxley Act of 2002**

101.INS

Inline XBRL Instance Document*

101.SCH

Inline XBRL Taxonomy Extension Schema Document*

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document*

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document*

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document*

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document*

104

Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document).*

__________________________

* Filed herewith.

** Furnished herewith.

† Indicates management contract or compensatory plan, contract or arrangement.

§ Portions of the exhibit, marked by brackets, have been omitted because the omitted information (i) is not material and (ii) would

likely cause competitive harm if publicly disclosed.

38

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 on November 10, 2022.

VAXXINITY, INC.

By:

/s/ Mei Mei Hu

Mei Mei Hu, 

President and Chief Executive Officer

(Principal executive officer)

By:

/s/ Jason Pesile

Jason Pesile

Senior Vice President, Finance & Accounting

(Principal financial and accounting officer)

EX-31.1

1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, 

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Mei Mei Hu, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Vaxxinity, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a

material fact necessary to make the statements made, in light of the circumstances under which such statements were

made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly

present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for,

the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure

controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial

reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to

be designed under our supervision, to ensure that material information relating to the registrant, including its

consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in

which this report is being prepared;

 (b) Designed such internal control over financial reporting, or caused such internal control over financial

reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of

financial reporting and the preparation of financial statements for external purposes in accordance with generally

accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this

report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the

period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that

occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an

annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal

control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal

control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors

(or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over

financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,

summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant

role in the registrant’s internal control over financial reporting.

Date: November 10, 2022 By: /s/ Mei Mei Hu 

 Mei Mei Hu

 President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

1

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO 

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, 

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jason Pesile, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Vaxxinity, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a

material fact necessary to make the statements made, in light of the circumstances under which such statements were

made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly

present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for,

the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure

controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial

reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to

be designed under our supervision, to ensure that material information relating to the registrant, including its

consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in

which this report is being prepared;

 (b) Designed such internal control over financial reporting, or caused such internal control over financial

reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of

financial reporting and the preparation of financial statements for external purposes in accordance with generally

accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this

report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the

period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that

occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an

annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal

control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal

control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors

(or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over

financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,

summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant

role in the registrant’s internal control over financial reporting.

Date: November 10, 2022 By: /s/ Jason Pesile 

 Jason Pesile

 Senior Vice President, Finance and Accounting

(Principal Financial and Accounting Officer) 

EX-32.1

1

Exhibit 32.1

CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Vaxxinity, Inc. (the “Company”) on Form 10-Q for the quarter ended

September 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the

undersigned hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley

Act of 2002, that, to the best of their knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act

of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition

and results of operations of the Company.

Date: November 10, 2022 By: /s/ Mei Mei Hu 

 Mei Mei Hu

 President and Chief Executive Officer

(Principal Executive Officer)

Date: November 10, 2022 By: /s/ Jason Pesile 

 Jason Pesile

 Senior Vice President, Finance and Accounting

(Principal Financial and Accounting Officer)

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2022	Nov. 08, 2022
Document Type	10-Q
Entity Central Index Key	0001851657
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	001-41058
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line Two	Ste 3388
Entity Address, Address Line One	1717 Main St
Entity Address, City or Town	Dallas
Entity Address, Postal Zip Code	75201
Entity Address, State or Province	TX
Entity Tax Identification Number	86-2083865
Entity Registrant Name	Vaxxinity, Inc.
Entity Ex Transition Period	false
Local Phone Number	254
City Area Code	244-5739
Title of 12(b) Security	Class A Common Stock, par value $0.0001 per share
Trading Symbol	VAXX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Shell Company	false
Class A Common Stock [Member]
Entity Common Stock, Shares Outstanding		112,181,870
Common Class B [Member]
Entity Common Stock, Shares Outstanding		13,874,132

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 18,875	$ 144,885
Short-term investments	80,233
Restricted Cash	3,073	172
Amounts due from related parties	400	393
Prepaid expenses and other current assets	5,502	8,851
Total current assets	108,083	154,301
Property and equipment, net	12,801	12,372
Long-term deposits	2,076
Total assets	122,960	166,673
Current liabilities:
Accounts payable	3,319	3,192
Amounts due to related parties	16,676	19,407
Accrued expense and other current liabilities	12,049	4,519
Notes payable	387	376
Total current liabilities	32,431	27,494
Other liabilities
Notes payable, net of current portion	10,032	10,323
Other long-term liabilities	236	237
Total liabilities	42,699	38,054
Preferred stock: $0.0001 par value, 50,000,000 shares authorized at September 30, 2022 and December 31, 2021	0	0
Stockholders' equity:
Additional paid-in capital	364,445	357,822
Accumulated other comprehensive income (loss)	(215)
Accumulated deficit	(284,247)	(229,481)
Total stockholders equity	80,261	128,619
Total liabilities and stockholders equity	122,960	166,673
Class A Common Stock [Member]
Stockholders' equity:
Common stock:	278	278
Common Class B [Member]
Stockholders' equity:
Common stock:	$ 0	$ 0

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized/designated	50,000,000	50,000,000
Class A Common Stock [Member]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	1,000,000,000	1,000,000,000
Common stock, shares issued	112,181,870	111,518,094
Common stock, shares outstanding	112,181,870	111,518,094
Common Class B [Member]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	13,874,132	13,874,132
Common stock, shares outstanding	13,874,132	13,874,132

XML

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Consolidated Statements of Income [Abstract]
Revenue				$ 67
Cost of revenue		$ 9		1,937
Gross (loss) profit		41		(1,870)
Operating expenses:
Research and development	$ 12,468	23,443	$ 34,609	54,324
General and administrative	7,300	6,873	20,546	21,130
Total operating expenses	19,768	30,316	55,155	75,454
Loss from operations	(19,768)	(30,275)	(55,155)	(77,324)
Other (income) expense:
Interest and other expense	54	112	264	732
Interest and other income	545	3	625	6
Change in fair value of convertible notes				2,667
Change in fair value of simple agreements for future equity				8,365
Change in fair value of warrant liability				214
(Gain) loss on foreign currency translation, net	(25)	5	(28)	24
Other (income) expense	516	(114)	389	(11,996)
Net loss	$ (19,252)	$ (30,389)	$ (54,766)	$ (89,320)
Net loss per share, basic and diluted	$ (0.15)	$ (0.44)	$ (0.43)	$ (1.30)
Weighted average common shares outstanding, basic and diluted	126,036,865	68,728,509	125,899,557	68,667,682
Other comprehensive income (loss):
Unrealized gain (loss) on investments	$ (215)		$ (215)
Other comprehensive income (loss)	$ (215)		$ (215)

XML

Condensed Consolidated Statements of Equity - USD ($) $ in Thousands	Total	Class A Common Stock [Member]	Class B Common Stock [Member]	Common Stock [Member] Class A Common Stock [Member]	Common Stock [Member] Class B Common Stock [Member]	Preferred Stock [Member]	Preferred Stock [Member] Series Seed Stock [Member]	Preferred Stock [Member] Series Seed-1 Stock [Member]	Preferred Stock [Member] Series Seed-2 Stock [Member]	Preferred Stock [Member] Series A-1 Stock [Member]	Preferred Stock [Member] Series A-2 Stock [Member]	Preferred Stock [Member] Series A Preferred Stock [Member]	Preferred Stock [Member] Series A Preferred Stock [Member] SAFEs [Member]	Preferred Stock [Member] Series A Preferred Stock [Member] Warrants [Member]	Preferred Stock [Member] Series A Preferred Stock [Member] Convertible Debt [Member]	Preferred Stock [Member] Series A Preferred Stock [Member] Notes Payable, Related Parties [Member]	Preferred Stock [Member] Series B Preferred Stock [Member]	Treasury Stock [Member]	Additional Paid In Capital [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Accumulated Deficit [Member]
Beginning balance at Dec. 31, 2020	$ (87,352)			$ 272		$ 62,475	$ 10,383	$ 20,903	$ 11,315	$ 4,640	$ 15,234	$ 0					$ 0	$ (23)	$ 4,682		$ (92,306)
Beginning balance, common shares at Dec. 31, 2020				60,360,523	10,999,149													3,169,093
Beginning balance, preferred shares at Dec. 31, 2020							7,831,528	22,876,457	14,615,399	1,871,511	6,307,690	0					0
Issuance of common stock upon exercise of stock options, shares				82,696
Issuance of common stock upon exercise of stock options	70																		70
Issuance of stock, shares				485,836													15,365,574
Issuance of stock	103																$ 122,791		103
Exhange of preferred stock, shares							(7,831,528)	(22,876,457)	(14,615,399)	(1,871,511)	(6,307,690)	53,502,585
Exchange of preferred stock							$ (10,383)	$ (20,903)	$ (11,315)	$ (4,640)	$ (15,234)	$ 62,475
Conversion of stock, shares													4,539,060	134,106	3,624,114	423,230
Conversion of stock													$ 35,600	$ 614	$ 27,379	$ 2,138
Vesting of restricted stock, shares				15,405
Retirement of treasury stock in merger, shares				3,169,093														3,169,093
Retirement of treasury stock in merger	23																	$ (23)	23
Stock-based compensation expense	5,602																		5,602
Reclassification of common stock to Class A, shares				(2,874,983)	2,874,983
Net loss	(89,320)																				(89,320)
Ending balance at Sep. 30, 2021	(170,920)			$ 272		$ 250,997	$ 0	$ 0	$ 0	$ 0	$ 0	$ 128,206					$ 122,791	$ 0	10,434		(181,626)
Ending balance, common shares at Sep. 30, 2021				54,900,384	13,874,132
Ending balance, preferred shares at Sep. 30, 2021							0	0	0	0	0	62,223,095					15,365,574
Ending balance, treasury shares at Sep. 30, 2021																		0
Beginning balance at Dec. 31, 2021	$ 128,619			$ 278															357,822		(229,481)
Beginning balance, common shares at Dec. 31, 2021		111,518,094	13,874,132	111,518,094	13,874,132
Issuance of common stock upon exercise of stock options, shares	1,065,706			663,776
Issuance of common stock upon exercise of stock options	$ 262																		262
Stock-based compensation expense	6,361																		6,361
Net loss	(54,981)																			$ (215)	(54,766)
Ending balance at Sep. 30, 2022	$ 80,261			$ 278															$ 364,445	$ (215)	$ (284,247)
Ending balance, common shares at Sep. 30, 2022		112,181,870	13,874,132	112,181,870	13,874,132

XML

Condensed Consolidated Statements of Equity (Parenthetical) $ in Thousands	Sep. 30, 2021 USD ($)
Preferred Stock [Member] | Series B Preferred Stock [Member]
Issuance of stock, issuance costs	$ 131

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities:
Net loss	$ (54,766)	$ (89,320)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense	1,144	928
Amortization of debt issuance costs	40	234
Amortization of discount on short-term investments	(422)
Stock-based compensation expense	6,361	5,704
Non-cash consulting expense		268
Change in fair value of convertible notes		2,667
Change in fair value of warrant liability		214
Change in fair value of simple agreements for future equity		8,365
Changes in operating assets and liabilities:
Accounts receivable		26
Amounts due to related parties	(7)	(18)
Prepaid expenses and other current assets	3,349	(10,155)
Long-term deposits	(2,076)
Deferred offering costs		(3,935)
Accounts payable	127	2,888
Amounts due to related parties	(2,731)	13,212
Accrued expenses and other current liabilities	7,530	4,521
Other liabilities	0	(2,625)
Net cash used in operating activities	(41,451)	(67,026)
Cash flows from investing activities:
Purchase of short-term investments	(107,526)
Redemption of short-term investments	27,500
Purchase of property and equipment	(1,574)	(50)
Net cash used in investing activities	(81,600)	(50)
Cash flows from financing activities:
Proceeds from issuance of convertible notes payable with related parties		2,000
Repayment of convertible notes		(2,000)
Repayment of notes payable	320	96
Repayment of note payable with related party		(100)
Repayment of Paycheck Protection Program		(257)
Proceeds from issuance of simple agreement for future equity		2,900
Proceeds from exercise of stock options	262	70
Net cash provided by financing activities	(58)	125,308
Increase in cash, cash equivalents, and restricted cash	(123,109)	58,232
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Beginning Balance	145,057	31,217
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Ending Balance	21,948	89,449
Supplemental Disclosure
Cash paid for interest	$ 277	288
Noncash Financing Activities
Reitrement Of Treasury Shares		23
Series B Preferred Stock [Member]
Changes in operating assets and liabilities:
Proceeds from issuance of convertible preferred stock, net of issuance costs		122,791
Noncash Financing Activities
Conversion Of Stock Amount Issued 1		122,900
Simple Agreement for Future Equity [Member]
Noncash Financing Activities
Conversion Of Stock Amount Issued 1		2,205
Series Seed, Series Seed-1, Series Seed-2, Series A-1 and Series A-2 for Series A [Member]
Noncash Financing Activities
Conversion Of Stock Amount Issued 1		62,475
Convertible Notes Payable to Series A Preferred [Member]
Noncash Financing Activities
Conversion Of Stock Amount Issued 1		27,545
Notes Payble to Series A Preferred [Member]
Noncash Financing Activities
Conversion Of Stock Amount Issued 1		35,600
Warrant to Series A Preferred [Member]
Noncash Financing Activities
Conversion Of Stock Amount Issued 1		$ 614

XML

Nature of the Business

9 Months Ended

Sep. 30, 2022

Nature of the Business [Abstract]

Nature of the Business

1. Nature of the Business

Vaxxinity, Inc., a Delaware corporation (“Vaxxinity ,” and together with its subsidiaries, the “Company”), was formed through the

combination of two separate businesses that originated from United Biomedica l, Inc. (“UBI”) in two separate transactions: a spin-out

from UBI in 2014 of operations focused on developing chronic disease product candidates that resulted in United Neuroscience (“UNS”),

and a second spin-out from UBI in 2020 of operations focused on the development of a COVID-19 vaccine that resulted in C19 Corp.

(“COVAXX”). On February 2, 2021, Vaxxinity was incorporated for the purpose of reorganizing and combining UNS and COVAXX

and on March 2, 2021, did so by acquiring all of the outstanding equity interests of UNS and COVAXX pursuant to a contribution and

exchange agreement (the “Contribution and Exchange Agreement”) whereby the existing equity holders of UNS and COVAXX

contributed their equity interests in each of UNS and COVAXX in exchange for equity in Vaxxinity (the “Reorganization”).

The Company is a biotechnology company currently focused on developing product candidates for human use in the fields of neurology,

pain, cardiovascular diseases and coronaviruses utilizing its “Vaxxine Platform”—a synthetic peptide vaccine technology first developed

by UBI and subsequently refined over the last two decades. The Company is engaged in the development of rationally designed

prophylactic and therapeutic vaccines to combat common chronic diseases with large global unmet medical need. We are also developing

a heterologous booster vaccine for SARS-Cov-2. UBI is a significant shareholder of the Company and, therefore, considered a related

party.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry including, but not

limited to, uncertainty of product development and commercialization, lack of marketing and sales history, development by its

competitors of new technological innovations, dependence on key personnel, market acceptance of products, product liability, protection

of proprietary technology, ability to raise additional financing, and compliance with government regulations. If the Company does not

successfully commercialize or out-license any of its product candidates, it will be unable to generate recurring product revenue or

achieve profitability.

The Company’s product candidates are in development and will require significant additional research and development efforts,

including extensive pre-clinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant

amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. There can be no

assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s

intellectual property will be obtained, that any products developed will obtain necessary government regulatory approval or that any

approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when,

if ever, the Company will generate significant revenue from product sales. The Company operates in an environment of rapid change in

technology and is dependent upon the services of its employees and consultants.

Contribution and Exchange Agreement

On March 2, 2021, in accordance with the Contribution and Exchange Agreement, (i) all outstanding shares of UNS and COVAXX

preferred stock and common stock were contributed to Vaxxinity and exchanged for like shares of stock in Vaxxinity, (ii) the outstanding

options to purchase shares of UNS and COVAXX common stock were terminated and substituted with options to purchase shares of

common stock in Vaxxinity, (iii) the outstanding warrant to purchase shares of COVAXX common stock was cancelled and exchanged

for a warrant to acquire common stock in Vaxxinity and (iv) each outstanding Reorganization Convertible Note (as defined below) was

contributed to Vaxxinity and the holders of such notes received Series A preferred stock in Vaxxinity. In particular:

•

Each UNS common share and convertible preferred share was exchanged for

0.2191

 shares of Vaxxinity common stock or

Series A preferred stock, as applicable;

•

Each share of COVAXX common and convertible preferred stock was exchanged for

3.4233

 shares of Vaxxinity common

stock or Series A preferred stock, as applicable (and prior to the closing of the Reorganization, all the holders of outstanding

COVAXX SAFEs agreed to convert such SAFEs into shares of Series A-3 preferred stock of COVAXX, which shares were

then exchanged for shares of Vaxxinity’s Series A preferred stock);

•

The Reorganization Convertible Notes were exchanged for an aggregate of

4,047,344

 shares of Vaxxinity’s Series A

preferred stock; and

•

Each outstanding option of both UNS and COVAXX to purchase common shares of UNS or COVAXX was terminated and

substituted with an option to purchase shares of Class A common stock of Vaxxinity. Each outstanding UNS option was

exchanged based on a conversion ratio of

0.2191

. Each outstanding COVAXX option was exchanged based on a conversion

ratio of

3.4233

.

All parties to the Contribution and Exchange Agreement intended that the contribution of outstanding equity interests to Vaxxinity in

exchange for Vaxxinity’s common stock and preferred stock be treated as an integrated transaction for U.S. federal income tax purposes

that is governed by Section 351(a) of the Internal Revenue Code of 1986, as amended.

The Reorganization was determined to be a common control transaction, so the carrying values of all contributed assets and assumed

liabilities remained unchanged and the financial information for all periods in the financial statements presented prior to the

Reorganization are presented on a consolidated basis.

Reverse Stock Split 

On October 29, 2021, the Company effectuated a reverse stock split of 1-for-

1.556

 (the “Stock Split”) of the Company’s Class A and

Class B common stock pursuant to an amendment to the Company’s Amended and Restated Certificate of Incorporation approved by

the Company’s board of directors and stockholders. As a result of the Stock Split, the Company also adjusted the share and per share

amounts associated with its options and warrants to purchase shares of its common stock. These unaudited condensed consolidated

financial statements including the notes have been retroactively adjusted to reflect the Stock Split for all periods presented. Any

fractional shares that would have resulted from the Stock Split have been rounded down to the nearest whole share. 

Initial Public Offering

On November 15, 2021, the Company closed its IPO of

6,000,000

 shares of Class A common stock at a public offering price of $

13.00

per share. On November 18, 2021 the Company held a subsequent closing for the issuance of an additional

537,711

 shares of Class A

common stock pursuant to a 30-day option granted to the underwriters to purchase up to an additional

900,000

 shares of Class A common

stock at the IPO price, less underwriting discounts and commissions. The aggregate net proceeds to the Company from the offering,

after deducting underwriting discounts and commissions and other offering expenses payable by the Company, was approximately $

71.1

million. Upon the closing of the IPO, all previously outstanding shares of the Company’s redeemable convertible preferred stock were

automatically converted at the same ratio used for the Stock Split (1-for-

1.556

) into shares of its Class A common stock.

Liquidity

As of September 30, 2022, the Company had $

102.2

 million of highly liquid assets to fund operations, including $

18.9

 million of cash

and cash equivalents, $

80.2

 million of short-term investments, and a $

3.1

 million restricted cash balance of which $

3.0

 million is

restricted for the reimbursement of certain research and development expenses related to our UB-612 COVID-19 vaccine program. To

date, the Company has primarily financed its operations through the sale of convertible preferred stock and common stock, borrowings

under promissory notes (including Convertible Notes), a portion of which has been raised from related party entities, and grants from

foundations such as the Coalition for Epidemic Preparedness Innovations (CEPI) and the Michael J. Fox Foundation (MJFF). The

Company has experienced significant negative cash flows from operations since inception, and incurred a net loss of $

54.8

 million for

the nine months ended September 30, 2022. Net cash used in operating activities for the nine months ended September 30, 2022 was

$

41.5

 million. In addition, as of September 30, 2022, the Company has an accumulated deficit of $

284.2

 million. The Company expects

to incur substantial operating losses and negative cash flows from operations for the foreseeable future. As of the date these financial

statements were available to be issued, the Company expects its existing cash and cash equivalents to be sufficient to fund its operating

expenses and capital expenditure requirements for at least the next 12 months.

In order to continue to fund future research and development activities, the Company will need to seek additional capital. This may

occur through strategic alliances, licensing arrangements, grants and/or future public or private debt or equity financings. Additional

funding may not be available on terms the Company finds acceptable or at all. If the Company is unable to obtain sufficient capital to

continue to advance its programs, the Company would be forced to delay, limit, reduce or terminate its product development or future

commercialization efforts or grant rights to third parties to develop and market product candidates that the Company would otherwise

prefer to develop and market itself.

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which

contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The unaudited condensed

consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset

amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.

XML

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2022

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of presentation

The accompanying interim unaudited condensed consolidated financial statements have been prepared using generally accepted

accounting principles in the United States of America (GAAP) and pursuant to the rules and regulations of the United States Securities

and Exchange Commission (“SEC”) for interim financial reporting. The unaudited condensed consolidated financial statements for the

periods presented include the accounts of UNS and COVAXX that were parties to the Contribution and Exchange Agreement. All share

and per share amounts, as originally recorded by each entity, have been converted to a number of shares and per share amounts using

the conversion ratios determined under the Contribution and Exchange Agreement and the Stock Split ratio. 

These interim condensed consolidated financial statements are unaudited and, in the opinion of management, include all adjustments

(consisting of normal recurring adjustments and accruals) necessary to fairly present the results of the interim periods. The condensed

consolidated balance sheet at December 31, 2021, has been derived from the audited financial statements at that date. Operating results

for the three and nine months ended September 30, 2022 and cash flows for the nine months ended September 30, 2022 are not

necessarily indicative of the results that may be expected for the fiscal year ended December 31, 2022 or any other future period. Certain

information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles

generally accepted in the United States (“U.S. GAAP”) have been omitted in accordance with the rules and regulations for interim

reporting of the SEC. These interim unaudited condensed financial statements should be read in conjunction with the financial statements

and notes thereto included in our report for the year ended December 31, 2021.

Leases

At inception of a contract, we determine whether an arrangement is or contains a lease. For all leases, we determine the classification as

either operating leases or financing leases. Operating leases are included in Operating lease right-of-use assets and Operating lease

liabilities in our Condensed Consolidated Balance Sheets.

Lease recognition occurs at the commencement date and lease liability amounts are based on the present value of lease payments over

the lease term. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise

that option. If a lease does not provide information to determine an implicit interest rate, we use our incremental borrowing rate in

determining the present value of lease payments. Right-of-use (ROU) assets represent our right to use an underlying asset for the lease

term, and lease liabilities represent our obligation to make lease payments under the lease. ROU assets also include any lease payments

made prior to the commencement date and exclude lease incentives received. Operating lease expense is recognized on a straight-line

basis over the lease term. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there

is a transfer of title or purchase option reasonably certain of exercise. Lease agreements with both lease and non-lease components, are

generally accounted for together as a single lease component. The Company has elected to apply the short-term expedient to leases with

a lease term of 12 months or less, which does not subject the leases to capitalization.

Short-term investments

The Company determines the appropriate classification of its investments at the time of purchase. Currently, all of the Company’s

investments are classified as available-for-sale in accordance with ASC Topic 320. The Company classifies investments available to

fund current operations as current assets on its consolidated balance sheets. Investments are classified as long-term assets on the

consolidated balance sheets if (i) the Company has the intent and ability to hold the investments for a period of at least one year and (ii)

the contractual maturity date of the investments is greater than one year.

Available-for-sale investments are recorded at fair value, with unrealized gains or losses included in accumulated other comprehensive

income or loss. Realized gains and losses, interest income earned on the Company’s cash, cash equivalents and investments, and

amortization or accretion of discounts and premiums on investments are included within other income (expense).

Available-for-sale debt securities are reviewed for possible impairment at least quarterly, or more frequently if circumstances arise that

may indicate impairment. When the fair value of the securities declines below the amortized cost basis, impairment is indicated and it

must be determined whether it is other than temporary. Impairment is considered to be other than temporary if the Company: (i) intends

to sell the security, (ii) will more likely than not be forced to sell the security before recovering its cost, or (iii) does not expect to recover

the security’s amortized cost basis. If the decline in fair value is considered other than temporary, the cost basis of the security is adjusted

to its fair market value and the realized loss is reported in earnings. Subsequent increases or decreases in fair value are reported in equity

as accumulated other comprehensive income.

The Company did not record any such impairments during the period ending September 30, 2022.

Related party transactions

The Company has a Related Party policy which defines related parties, and assigns oversight responsibility for related party transactions

to the Company's Audit Committee. The Committee reviews in advance related party transactions, and considers multiple factors,

including the proposed aggregate value of the transaction, or, in the case of indebtedness, the amount of principal that would be involved,

the benefits to the Company of the proposed transaction, the availability of other sources of comparable products or services, and an

assessment of whether the proposed transaction is on terms that are comparable to the terms available to or from, as the case may be,

unrelated third parties. Under the policy, related party transactions are approved only if the Committee determines in good faith that the

transaction is not inconsistent with the interests of the Company and its shareholders.

Significant accounting policies 

The significant accounting policies used in preparation of these unaudited condensed consolidated financial statements are disclosed in

our annual financial statements for the year ended December 31, 2021. There have been no changes to the Company’s significant

accounting policies during the three and nine months ended September 30, 2022.

Recently issued accounting pronouncements 

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and are adopted by the

Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued

standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

Recently adopted accounting standards

In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”). ASU 2018-11

provided an alternative method in addition to the modified retrospective transition method for ASU No. 2016-02, Leases: Amendments

to the FASB Accounting Standards Codification (“ASU 2016-02”), issued in February 2016. Under ASU 2018-11, an entity may elect

to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of

retained earnings in the period of adoption. Under ASU 2016-02, a lease is required to recognize assets and liabilities with lease terms

of more than twelve months. ASU 2016-02 is effective for nonpublic business entities and public entities eligible to be Smaller Reporting

Companies for fiscal years beginning after December 15, 2021. 

The Company adopted the new standard on January 1, 2022 using the modified retrospective approach. The Company has elected to

apply the transition method that allows companies to continue applying the guidance under the lease standard in effect at that time in

the comparative periods presented in the condensed financial statements and recognize a cumulative-effect adjustment to the opening

balance of accumulated deficit on the date of adoption. The Company has elected to combine lease components (for example fixed rent

payments) with non-lease components (for example, common-area maintenance costs) on our facility, lab equipment and CRO

embedded lease asset classes. The Company also elected the “package of practical expedients”, which permits the Company not to

reassess under the new standard the Company’s prior conclusions about lease identification, lease classification and initial direct costs.

In addition, the Company also elected the short-term lease practical expedients allowed under the standard. Lastly, the Company did not

elect the practical expedient allowing the use-of-hindsight which would require the Company to reassess the lease term of its leases

based on all facts and circumstances through the effective date.

Results for reporting period beginning after January 1, 2022 are presented under the new standard, while prior period amounts are not

adjusted and continue to be reported under the accounting standards in effect for the prior period. Upon adoption of the new lease

standard, on January 1, 2022, the Company was not entered into any leases subject to ASC 842 and did not capitalize a ROU asset or

lease liability.

XML

Fair Value Measurements

9 Months Ended

Sep. 30, 2022

Fair Value Measurements [Abstract]

Fair Value Measurements

3. Fair Value Measurements

The Company's money market accounts and short term investments are shown at fair value based on unadjusted quoted market prices

in active markets for identical assets.

The following table presents information about the Company’s financial instruments measured at fair value on a recurring basis and

indicate the level of the fair value hierarchy used to determine such fair values (in thousands):

During the three and nine months ended September 30, 2022 and the year ended December 31, 2021, there were no transfers between

Level 1, Level 2 and Level 3.

December 31, 2021

Level 1

Level 2

Level 3

Total

Assets:

Money market account

$

139,794

$

—

$

—

$

139,794

Total assets

$

139,794

$

—

$

—

$

139,794

September 30, 2022

Level 1

Level 2

Level 3

Total

Assets:

Short-term investments

80,233

—

—

80,233

Money market accounts

10,995

—

—

10,995

Total assets

$

91,228

$

—

$

—

$

91,228

XML

Short-Term Investments

9 Months Ended

Sep. 30, 2022

Short-Term Investments [Abstract]

Short-term investments

4. Short-Term Investments

As of September 30, 2022, the Company’s short-term investments consist of the following (in thousands):

These securities mature in less than 1 year.

As of September 30, 2022

Amortized

Cost

Unrealized

Gains (Losses),

Net

Recorded

Basis

U.S. Treasury Securities

$

80,448

$

(215)

$

80,233

Total

$

80,448

$

(215)

$

80,233

XML

Prepaid Expenses and Other Current Assets

9 Months Ended

Sep. 30, 2022

Prepaid Expenses and Other Current Assets [Abstract]

Prepaid Expenses and Other Current Assets

5. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):

September 30,

December 31,

2022

2021

Prepaid materials and supplies

$

1,754

$

3,517

Clinical prepayments

2,067

4,379

Deposits

1,323

614

Other

358

341

$

5,502

$

8,851

The Company’s prepaid material and supplies related to enzyme-linked immunosorbent assay (“ELISA”) test production, of which $

1.7

million was paid to a related party and $

0.7

 million related to materials to be utilized during its Phase 3 COVID-19 vaccine clinical trial.

XML

Property and Equipment

9 Months Ended

Sep. 30, 2022

Property and Equipment [Abstract]

Property and Equipment

6. Property and Equipment

Property and equipment, net consisted of the following (in thousands):

September 30,

December 31,

2022

2021

Airplane

$

11,983

$

11,983

Laboratory and computer equipment

2,790

1,831

Software

169

168

Facilities, furniture and fixtures

106

85

Vehicles

87

87

Fixed assets not yet placed into service

791

199

Total property and equipment

15,926

14,353

Less: accumulated depreciation

(3,125)

(1,981)

Property and equipment, net

$

12,801

$

12,372

Depreciation expense for the three and nine months ended September 30, 2022 was $

0.4

 million and $

1.1

 million, respectively.

Depreciation expense for the three and nine months ended September 30, 2021 was $

0.4

 million and $

0.9

 million, respectively.

XML

Accrued Expenses and Other Current Liabilities

9 Months Ended

Sep. 30, 2022

Accrued Expenses and Other Current Liabilities [Abstract]

Accrued Expenses and Other Current Liabilities

7. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

Accrued external research and development includes $

3.0

 million in grant monies received from CEPI during the nine months ended

September 30, 2022 not yet applied against research and development expense.

September 30,

December 31,

2022

2021

Accrued external research and development

$

3,842

$

1,501

Accrued bonuses

3,410

2,294

Accrued professional fees and other

4,767

692

Accrued interest

30

32

$

12,049

$

4,519

XML

Other Long-Term Liabilities

9 Months Ended

Sep. 30, 2022

Other Liabilities Disclosure [Abstract]

Other Long-Term Liabilities

8. Other Long-Term Liabilities

Other long-term liabilities consisted of the following (in thousands):

September 30,

December 31,

2022

2021

Accrued tax provision

236

236

Accrued rent

—

1

$

236

$

237

As of September 30, 2022 and December 31, 2021, approximately $

0.2

 million of the accrued tax provision relates to penalties and

interest the Company may be subject to paying for late filing fees related to a foreign subsidiary. The Company expects these amounts

to be forgiven but has accrued for them until the statute of limitations expires and it is appropriate to write them off.

XML

Notes Payable

9 Months Ended

Sep. 30, 2022

Notes payable with related parties [Abstract]

Notes payable with related parties [Text Block]

9. Notes Payable

Note Payable—Airplane

In connection with the acquisition of an airplane, the Company entered into a note payable agreement (the “2025 Note”) in June 2020

for $

11.5

 million, with an annual interest rate of

3.4

% and a maturity date of June 9, 2025. Principal and interest payments are payable

monthly in the amount of $

0.1

 million with a final payment of $

9.4

 million at maturity. The 2025 Note is guaranteed by the co-founders

of the Company. In addition, the Company incurred debt issuance costs of $

0.3

 million, which are being amortized over the term of the

loan. There are no financial covenants associated with the 2025 Note. 

The carrying value of the 2025 Note is as follows (in thousands):

As of September 30, 2022, the remaining principal payments for the 2025 Note, are as follows (in thousands):

Interest expense associated with the 2025 Note was $

0.1

 million and $

0.3

 million for the three and nine months ended September 30,

2022, respectively. Interest expense associated with the 2025 Note was $

0.1

 million and $

0.3

 million for the three and nine months

ended September 30, 2021, respectively. As of September 30, 2022, accrued interest of less than $

0.1

 million was included in accrued

expenses and other liabilities in the accompanying condensed consolidated balance sheets as of September 30, 2022 (unaudited) and

December 31, 2021.

Note Payable—Paycheck Protection Program

The Company applied for and received a loan, which is in the form of a note dated May 5, 2020, from HSBC Bank USA, National

Association (“HSBC”) in the aggregate amount of approximately $

0.3

 million (the “PPP Loan”), pursuant to the Paycheck Protection

Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides

for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. 

The Company paid off the PPP Loan in full, including all accrued but unpaid interest to the repayment date, in August 2021.

September 30,

December 31,

2022

2021

Principal

$

10,564

$

10,883

Unamortized debt issuance cost

(145)

(184)

Carrying amount

10,419

10,699

Less: current portion

(387)

(376)

Note payable, net of current portion and debt issuance cost

$

10,032

$

10,323

Amount

2022

$

109

2023

444

2024

458

2025

9,553

$

10,564

XML

Convertible Preferred Stock

9 Months Ended

Sep. 30, 2022

Convertible preferred stock [Abstract]

Convertible preferred stock

10. Convertible Preferred Stock

In connection with the Reorganization, each UNS convertible preferred share was exchanged for

0.2191

 shares of Vaxxinity preferred

stock and each share of COVAXX convertible preferred stock was exchanged for

3.4233

 shares of Vaxxinity preferred stock. During

the first and second quarters of 2021, the Company raised gross proceeds of $

122.9

 million in connection with its Series B preferred

stock financing. The Company issued a total of

15,365,574

 shares at a price of $

8.00

 per share. All shares of the Company’s Series B

preferred stock converted into shares of the Company’s Class A common stock concurrently with the closing of the initial public offering. 

As of September 30, 2022 and December 31, 2021, Vaxxinity’s Amended and Restated Certificate of Incorporation authorized

50,000,000

 shares of preferred stock with a par value of $

0.0001

 per share. There were no shares of preferred stock outstanding as of

September 30, 2022 and December 31, 2021.

XML

Common Stock

9 Months Ended

Sep. 30, 2022

Common Stock [Abstract]

Common Stock

11. Common Stock

As explained in Note 1, in accordance with the Contribution and Exchange Agreement, on March 2, 2021, all outstanding shares of

common stock of UNS and COVAXX were contributed to Vaxxinity and exchanged for an aggregate of

60,360,523

 shares of

Vaxxinity’s Class A common stock and

10,999,149

 shares of Vaxxinity’s Class B common stock. Each UNS share of common stock

was exchanged for

0.2191

 shares of Vaxxinity common stock and each share of COVAXX common stock was exchanged for

3.4233

shares of Vaxxinity common stock. 

Vaxxinity’s Amended and Restated Certificate of Incorporation dated November 15, 2021 authorized

1,100,000,000

 shares of common

stock with a par value of $

0.0001

 per share, of which

1,000,000,000

 shares have been designated as Class A common stock and

100,000,000

 shares have been designated as Class B common stock. 

Holders of Class A common stock and Class B common stock have identical rights, except with respect to voting and conversion. Except

as otherwise expressly provided in Vaxxinity’s Amended and Restated Certificate of Incorporation or Bylaws, or required by applicable

law, holders of Class A common stock will be entitled to one vote per share on all matters submitted to a vote of stockholders and

holders of our Class B common stock will be entitled to ten votes per share on all matters submitted to a vote of stockholders. 

Holders of Class A common stock and Class B common stock vote together as a single class on all matters submitted to a vote of

stockholders, except (i) amendments to Vaxxinity’s Amended and Restated Certificate of Incorporation to increase or decrease the par

value of a class of capital stock, in which case the applicable class would be required to vote separately to approve the proposed

amendment and (ii) amendments to Vaxxinity’s Amended and Restated Certificate of Incorporation that alter or change the powers,

preferences or special rights of a class of capital stock in a manner that affects its holders adversely, in which case the applicable class

would be required to vote separately to approve the proposed amendment. 

Holders of common stock are entitled to receive, ratably, dividends as may be declared by Vaxxinity’s board of directors out of funds

legally available therefor if the board of directors, in its discretion, determines to issue dividends. 

The Company has reserved shares of common stock for issuance for the following purposes:

September 30,

December 31,

2022

2021

Options and RSUs issued and outstanding

20,593,681

21,387,909

Options available for future grants

6,251,916

7,209,538

Warrants issued and outstanding

1,928,020

1,928,020

28,773,617

30,525,467

XML

Stock-Based Compensation

9 Months Ended

Sep. 30, 2022

Stock-Based Compensation [Abstract]

Stock-Based Compensation

12. Stock-Based Compensation

2021 Omnibus Incentive Compensation Plan

In November 2021, the Company established the 2021 Omnibus Incentive Compensation Plan (the “Plan”), which provides for the

Company to grant nonqualified stock options, incentive (qualified) stock options, stock appreciation rights, restricted share awards,

restricted stock units, performance awards, cash incentive awards and other equity-based awards (including fully vested shares).

The maximum number of shares of common stock that can be issued under the Plan is

8,700,000

 Class A shares. This number increases

automatically on January 1 of each year, commencing January 1, 2023, by the number of shares equal to the lesser of (i)

4

% of the

outstanding shares of our common stock on the immediately preceding December 31, (ii) the number of shares determined by the

Compensation Committee, if any such determination is made, and (iii) the number of shares underlying any awards granted during the

preceding calendar year, net of the shares underlying awards canceled or forfeited under the Plan.

Stock Options

As of September 30, 2022 there were options for

13,931,226

 shares of Class A stock outstanding and options for

6,362,455

 shares of

Class B stock outstanding, of which

9,032,635

 Class A and

4,944,763

 Class B shares were exercisable, respectively. As of September 30,

2022, the maximum number of stock options awards available for future issuance under the Company’s plans is

6,251,916

.

The following table summarizes stock option activity during the nine months ended September 30, 2022:

The aggregate intrinsic value of options is calculated as the difference between the exercise price of the options and the fair value of the

common stock for those options that had exercise prices lower than the fair value of the common stock as of September 30, 2022.

The intrinsic value of options exercised during the nine months ended September 30, 2022 was $

4.5

 million.

The weighted-average grant-date fair value per share of options granted during the nine months ended September 30, 2022 was $

2.38

.

Restricted Stock

The following table summarizes the Company’s restricted stock activity for the nine months ended September 30, 2022:

Stock-based compensation expense recognized on restricted stock was less than $

0.1

 million for the nine months ended September 30,

2022.

Stock-Based Compensation Expense

The Company recorded stock-based compensation expense in the following expense categories in the accompanying unaudited

condensed consolidated statements of operations (in thousands):

As of September 30, 2022, total unrecognized compensation cost related to the unvested stock-based awards was $

18.9

 million, which

is expected to be recognized over a weighted average period of

2.5

 years.

Number of Stock

Options

Outstanding

Weighted

Exercise Price

Per Share

Weighted

Contractual

Term (years)

Aggregate

Intrinsic Value

(in thousands)

Balance at December 31, 2021

21,387,909

$

5.25

7.4

$

49,684

Granted

1,104,921

3.19

Exercised

(1,065,706)

3.26

Forfeited

(1,133,443)

7.23

Balance at September 30, 2022

20,293,681

$

5.13

7.1

$

11,940

Options vested and exercisable at September 30, 2022

13,977,398

$

4.52

6.8

$

10,773

Number of

Shares

Weighted

Average

Grant Date

Fair Value

Per Share

Unvested at December 31, 2021

—

$

—

Issued

300,000

3.76

Unvested at September 30, 2022

300,000

$

3.76

Three Months Ended September

30,

Nine Months Ended September

30,

2022

2021

2022

2021

General and administrative

$

1,509

$

1,100

$

3,888

$

4,864

Research and development

848

364

2,473

738

Total stock-based compensation expense

$

2,357

$

1,464

$

6,361

$

5,602

XML

Income Taxes

9 Months Ended

Sep. 30, 2022

Income Taxes [Abstract]

Income Taxes

13. Income Taxes

The Company computes its expected annual effective income tax rate in accordance with ASC 740 and makes changes on a quarterly

basis, as necessary, based on certain factors such as changes in forecasted annual pre-tax income; changes to actual or forecasted

permanent book to tax differences; impacts from tax audits with state, federal or foreign tax authorities; impacts from tax law changes;

or change in judgment as to the realizability of deferred tax assets. The Company identifies items which are unusual and non-recurring

in nature and treats these as discrete events. The tax effect of discrete items is recorded in the quarter in which the discrete events occur. 

The Company’s effective tax rate for the nine months ended September 30, 2022 and 2021 was

0.00

%, due primarily to its uncertainty

of realizing a benefit from net operating losses incurred during the period.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some or all of the

recorded deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent on the generation of future

taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversal

of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on these items

and the consecutive years of pretax losses (resulting from impairment), management determined that enough uncertainty exists relative

to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance for all taxing

jurisdictions.

The Company files income tax returns in the U.S. federal and various state and local jurisdictions. The Company also files returns in

numerous foreign jurisdictions that have varied years remaining open for examination, but generally the statute of limitations is three

to four years from when the return is filed. As of September 30, 2022, the Company currently has no ongoing audits.

The Company has US net operating loss (“NOL”) carryforwards for federal and state income tax purposes. Use of the NOL

carryforwards is limited under Section 382 of the Internal Revenue Code, as we have had a change in ownership of more than 50% of

our capital stock over a three-year period as measured under Section 382 of the Internal Revenue Code. These complex changes of

ownership rules generally focus on ownership changes involving shareholders owning directly or indirectly 5% or more of our stock,

including certain public “groups” of shareholders as set forth under Section 382 of the Internal Revenue Code, including those arising

from new stock issuances and other equity transactions. Some of these NOL carryforwards will expire if they are not used within

certain periods. At this time, we consider it more likely than not that we will not have sufficient taxable income in the future that will

allow us to realize these NOL carryforwards.

XML

Net Loss Per Share

9 Months Ended

Sep. 30, 2022

Net Loss Per Share [Abstract]

Net Loss Per Share

14. Net Loss Per Share

The Company’s unvested restricted common shares have been excluded from the computation of basic net loss per share. 

The Company’s potentially dilutive securities, which include options, unvested restricted stock, convertible notes payable and

convertible preferred stock, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the

net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net

loss per share is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at

each period end, from the computation of diluted net loss per share for the three and nine months ended September 30, 2022 because

including them would have had an anti-dilutive effect:

September 30,

September 30,

2022

2021

Series A preferred stock

—

39,989,083

Series B preferred stock

—

9,875,037

Options and RSUs issued and outstanding

20,593,681

20,714,308

Warrants issued and outstanding stock

1,928,020

2,056,722

22,521,701

72,635,150

XML

Commitments and Contingencies

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

15. Commitments and Contingencies

Contractual Obligations 

The Company enters into agreements with contract research organizations (“CROs”) to conduct clinical trials and preclinical studies

and contract manufacturing organizations (“CMOs”) to produce vaccines and other potential product candidates. Contracts with CROs

and CMOs are generally cancellable, with notice, at the Company’s option. 

As of September 30, 2022, the Company had remaining prepayments to CROs of $

3.1

 million and remaining prepayments to CMOs of

$

0.7

 million for activities associated with the conduct of its clinical trials and for the production of the Company’s anticipated vaccine

product candidate. 

Michael J. Fox Foundation Grant

On November 3, 2021, the Company was awarded a grant from the Michael J. Fox Foundation for Parkinson’s Research (“MJFF”) in

the amount of $

0.8

 million to be used in a project for the exploration of markers for target engagement in individuals immunized with

UB-312, an active

a

-Synuclein immunotherapy. The Company will oversee sample management, sample preparation (IgG fractions)

and distribution, as well as characterize the binding properties of the antibodies against pathological forms of aSyn. As funding is

expected to be received in tranches over a two-year period, and the amounts received in each tranche are expected to be utilized within

twelve months, the funds received are recognized as a short-term accrued liability. The Company recognizes payments from MJFF as a

reduction of research and development expenses, in the same period as the expenses that the grant is intended to reimburse are incurred.

As of September 30, 2022, the balance of the short-term accrued liability was less than $

0.1

 million. For the nine months ended

September 30, 2022, the Company did not recognize any reduction of research and development expenses for amounts reimbursed

through the grant.

Coalition for Epidemic Preparedness Innovations (“CEPI”) Grant

In April 2022, the Company entered into an agreement with the Coalition for Epidemic Preparedness Innovations (“CEPI”) whereby

CEPI has agreed to provide funding of up to $

9.3

 million to co-fund a Phase 3 clinical trial of Vaxxinity’s next generation UB-612

COVID-19 vaccine candidate as a heterologous – or ‘mix-and-match’ – booster dose. The Phase 3 trial, which began earlier this year,

is evaluating the ability of UB-612 to boost COVID-19 immunity against the original strain and multiple variants of concern including

Omicron - in people aged 16 years or older, who have been previously immunized with an authorized COVID-19 vaccine.

The Company will also be performing further manufacturing scale-up work to enable readiness for potential commercialization. Under

the terms of the agreement with CEPI, if successful, a portion of the released doses of the commercial product will be delivered to the

COVID-19 Vaccines Global Access (“COVAX”) consortium for distribution to developing countries at low cost.

Cash payments received in advance under the CEPI Funding Agreement are restricted as to their use until expenditures contemplated in

the funding agreement are incurred. As funding is expected to be received in tranches over an eighteen month period, and the amounts

received in each tranche are expected to the utilized within twelve months, the funds received are reflected within restricted cash with a

corresponding short-term accrued liability. The Company recognizes payments from CEPI as a reduction of research and development

expenses, in the same period as the expenses that the grant is intended to reimburse are incurred. As of September 30, 2022, the balance

of the restricted cash and short-term accrued liability was $

3.0

 million. For the three and nine months ended September 30, 2022, the

Company recognized a reduction of $

1.6

 million and $

3.1

 million of research and development expenses, respectively.

Lease Agreements

In April 2022, the Company entered into a facility lease agreement for

4,419

 square feet of office space in New York, New York. The

lease commenced in April 2022 and will expire March 2029 with no option to renew. This lease and its terms were reviewed using the

guidance found in ASC 842. Since the lease has a non-cancellable period of one year, and after the first year both the Company and the

landlord have the option to early terminate the lease for any or no reason, the Company has elected to apply the short-term expedient,

which does not subject the New York lease to capitalization. 

The Company’s short-term leases resulted in $

0.1

 million short-term lease expense and less than $

0.1

 million variable lease expense

during the three months ended September 30, 2022 and $

0.3

 million short-term lease expense and less than $

0.1

 million variable lease

expense during the nine months ended September 30, 2022. 

License Agreements

In August 2021, Vaxxinity entered into a license agreement (the “Platform License Agreement”) with UBI and certain of its affiliates

that expanded intellectual property rights held under previously issued license agreements with UBI. As part of the agreement, Vaxxinity

obtained a worldwide, sublicensable (subject to certain conditions), perpetual, fully paid-up, royalty-free license to research, develop,

make, have made, utilize, import, export, market, distribute, offer for sale, sell, have sold, commercialize or otherwise exploit peptide-

based vaccines in the field of all human prophylactic and therapeutic uses, except for such vaccines related to human immunodeficiency

virus (HIV), herpes simplex virus (HSE) and Immunoglobulin E (IgE). The patents and patent applications licensed under the Platform

License Agreement include claims directed to a CpG delivery system, artificial T helper cell epitopes and certain designer peptides and

proteins utilized in UB-612. As described above, in consideration for the Platform License Agreement, the Company issued to UBI a

warrant to purchase Class A common stock (the “UBI Warrant”) . 

The Company considered ASC 805, “Business Combinations” (“ASC 805”) and ASC 730, “Research and Development” (“ASC 730”)

in determining how to account for the issuance of the Class A common stock warrants. The Class A common stock warrants were issued

to a related party in exchange for a license agreement. The majority of the voting interests in the related party and that of the Company

were held by a group of immediate family members, at the time of the transaction, and as such the transaction constitutes a common

control transaction, which requires the license to be accounted for at the carrying value in the books of the transferor. As the related

party did not have any basis in the assets licensed, there was no accounting impact for the Company.

Indemnification Agreements 

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to employees, consultants,

vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of

breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered

into indemnification agreements with members of its board of directors and executive officers that will require the Company, among

other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The

maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in

many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is

not aware of any indemnification arrangements that could have a material effect on its financial position, results of operations, or cash

flows, and it has not accrued any liabilities related to such obligations as of September 30, 2022 and December 31, 2021. 

Legal Proceedings

From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. As of

September 30, 2022 and December 31, 2021, the Company was not a party to any material legal matters or claims.

Loss Contingency

In April 2021, the Company engaged United Biopharma, Inc. (UBP) to begin acquiring raw materials for use in the production of GMP

grade recombinant protein for UB-612, our Covid vaccine candidate. Through August 2021, $

7.2

 million of materials were ordered, $

3

million of materials were received by UBP and paid for with an advance payment from Vaxxinity, and we expensed $

1.2

 million as

these raw materials were used to produce proteins. 

Upon rejection of the EUA by Taiwan in August 2021, UBP requested that its suppliers cancel the remaining orders. Through September

30, 2022, $

0.4

 million orders have been canceled, $

0.8

 million have been delivered, and $

3.0

 million are still open. For the open orders,

management has not yet concluded that a loss is probable, since UBP has been able to cancel some orders, and discussions with its

suppliers are still ongoing. Hence, an expense has not been recognized for them.

For the $

2.6

 million of raw materials where UBP has taken possession, management has concluded a loss is probable and recognized an

expense.

XML

Benefit Plans

9 Months Ended

Sep. 30, 2022

Benefit Plans [Abstract]

Benefit Plans

16. Benefit Plans

In March 2018, the Company established a defined contribution savings plan under Section 401(k) of the Code. This plan covers

substantially all U.S. employees who meet minimum age and service requirements and allows participants to defer a portion of their

annual compensation on a pre-tax basis. The Company does not make matching contributions to the Plan.

The Company offers its Ireland-based employees a Personal Retirement Savings Account (“PRSA”) that allows participants to defer a

portion of their annual compensation. The Company provides contributions equal to

4

% of each participant’s annual salary. During both

of the three and nine months ended September 30, 2022 and 2021, the Company contributed less than $

0.1

 million to PRSA accounts.

XML

Related Party Transactions

9 Months Ended

Sep. 30, 2022

Related Party Transactions [Abstract]

Related Party Transactions

17. Related Party Transactions

The Company has related party arrangements with UBI and a number of its affiliated companies listed namely, United Biomedical, Inc.,

Asia (“UBI-Asia”), UBI Pharma, Inc. (“UBI-P”), United BioPharma, Inc (“UBP”) and UBI IP Holding (“UBI-IP”).

As of September 30, 2022 UBI owned

44

% of the Company’s stock. The majority of the voting interests in both UBI and the Company

were held by a group of immediate family members, and as such the entities are under common control.

These related parties are governed by various Master Services Agreements (“MSA”) detailed below. 

UBI MSA - UBI provides research, development and clinical functions to the Company. There is also a purchase arrangement

with UBI for the production and shipment of the Company’s diagnostic test kits.

UBIA MSA - UBI-Asia for manufacturing, quality control, testing, validation, and supply services.

UBP MSA - United BioPharma, Inc provide the Company with manufacturing, testing and validation.

COVID MSA (“COVID MSA”) - COVID MSA provides that UBI acts as COVAXX’s agent with respect to matters relating

the Company’s COVID-19 program and provides research, development, manufacturing and back office administrative

services to the Company.

COVID-19 Relief MSA - A four -company MSA with UBI, UBI-Asia and UBP. The Company is an exclusive licensee of

technologies related to diagnostics, vaccines, and therapies for COVID-19. The MSA established the terms under which UBI-

Asia provides research, development, testing and manufacturing services to the Company and UBP provides contract

development and manufacturing services to the Company.

Total amounts due to related parties were $

16.7

 million and $

19.4

 million as of September 30, 2022 and December 31, 2021,

respectively. Total amounts due from related parties were $

0.4

 million and $

0.4

 million as of September 30, 2022 and December 31,

2021, respectively. Total service fees incurred were $

0.0

 million and $

13.9

 million for the three months ended September 30, 2022 and

2021, respectively. Total service fees incurred were $

1.1

 million and $

32.6

 million for the nine months ended September 30, 2022 and

2021, respectively. 

Total related party operating activity, including the activity described above, are as follows (in thousands):

September 30,

December 31,

2022

2021

Consolidated balance sheet

Assets

Prepaid expenses and other current assets

$

1,743

$

3,517

Amounts due from related parties

400

393

Property and equipment, net

—

337

Liabilities

Amounts due to related parties

16,676

19,407

Accrued expenses

877

—

Three Months Ended September

30,

Nine Months Ended September

30,

2022

2021

2022

2021

Operating expenses

Research and development

Services provided by related parties

 $

—

 $

13,515

 $

1,139

 $

38,667

Taiwan CDC grant reimbursement from related party

—

—

—

(7,199)

General and administrative

Services provided by related parties

$

—

$

355

$

—

$

1,173

XML

Summary of Significant Accounting Policies (Policy)

9 Months Ended

Sep. 30, 2022

Summary of Significant Accounting Policies [Abstract]

Basis of Presentation

Basis of presentation

The accompanying interim unaudited condensed consolidated financial statements have been prepared using generally accepted

accounting principles in the United States of America (GAAP) and pursuant to the rules and regulations of the United States Securities

and Exchange Commission (“SEC”) for interim financial reporting. The unaudited condensed consolidated financial statements for the

periods presented include the accounts of UNS and COVAXX that were parties to the Contribution and Exchange Agreement. All share

and per share amounts, as originally recorded by each entity, have been converted to a number of shares and per share amounts using

the conversion ratios determined under the Contribution and Exchange Agreement and the Stock Split ratio. 

These interim condensed consolidated financial statements are unaudited and, in the opinion of management, include all adjustments

(consisting of normal recurring adjustments and accruals) necessary to fairly present the results of the interim periods. The condensed

consolidated balance sheet at December 31, 2021, has been derived from the audited financial statements at that date. Operating results

for the three and nine months ended September 30, 2022 and cash flows for the nine months ended September 30, 2022 are not

necessarily indicative of the results that may be expected for the fiscal year ended December 31, 2022 or any other future period. Certain

information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles

generally accepted in the United States (“U.S. GAAP”) have been omitted in accordance with the rules and regulations for interim

reporting of the SEC. These interim unaudited condensed financial statements should be read in conjunction with the financial statements

and notes thereto included in our report for the year ended December 31, 2021.

Foreign currency translation

Significant accounting policies 

The significant accounting policies used in preparation of these unaudited condensed consolidated financial statements are disclosed in

our annual financial statements for the year ended December 31, 2021. There have been no changes to the Company’s significant

accounting policies during the three and nine months ended September 30, 2022.

Recently Adopted and Issued Accounting Pronouncements

Recently issued accounting pronouncements 

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and are adopted by the

Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued

standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

Recently adopted accounting standards

In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”). ASU 2018-11

provided an alternative method in addition to the modified retrospective transition method for ASU No. 2016-02, Leases: Amendments

to the FASB Accounting Standards Codification (“ASU 2016-02”), issued in February 2016. Under ASU 2018-11, an entity may elect

to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of

retained earnings in the period of adoption. Under ASU 2016-02, a lease is required to recognize assets and liabilities with lease terms

of more than twelve months. ASU 2016-02 is effective for nonpublic business entities and public entities eligible to be Smaller Reporting

Companies for fiscal years beginning after December 15, 2021. 

The Company adopted the new standard on January 1, 2022 using the modified retrospective approach. The Company has elected to

apply the transition method that allows companies to continue applying the guidance under the lease standard in effect at that time in

the comparative periods presented in the condensed financial statements and recognize a cumulative-effect adjustment to the opening

balance of accumulated deficit on the date of adoption. The Company has elected to combine lease components (for example fixed rent

payments) with non-lease components (for example, common-area maintenance costs) on our facility, lab equipment and CRO

embedded lease asset classes. The Company also elected the “package of practical expedients”, which permits the Company not to

reassess under the new standard the Company’s prior conclusions about lease identification, lease classification and initial direct costs.

In addition, the Company also elected the short-term lease practical expedients allowed under the standard. Lastly, the Company did not

elect the practical expedient allowing the use-of-hindsight which would require the Company to reassess the lease term of its leases

based on all facts and circumstances through the effective date.

Results for reporting period beginning after January 1, 2022 are presented under the new standard, while prior period amounts are not

adjusted and continue to be reported under the accounting standards in effect for the prior period. Upon adoption of the new lease

standard, on January 1, 2022, the Company was not entered into any leases subject to ASC 842 and did not capitalize a ROU asset or

lease liability.

Lessee Leases [Policy Text Block]

Leases

At inception of a contract, we determine whether an arrangement is or contains a lease. For all leases, we determine the classification as

either operating leases or financing leases. Operating leases are included in Operating lease right-of-use assets and Operating lease

liabilities in our Condensed Consolidated Balance Sheets.

Lease recognition occurs at the commencement date and lease liability amounts are based on the present value of lease payments over

the lease term. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise

that option. If a lease does not provide information to determine an implicit interest rate, we use our incremental borrowing rate in

determining the present value of lease payments. Right-of-use (ROU) assets represent our right to use an underlying asset for the lease

term, and lease liabilities represent our obligation to make lease payments under the lease. ROU assets also include any lease payments

made prior to the commencement date and exclude lease incentives received. Operating lease expense is recognized on a straight-line

basis over the lease term. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there

is a transfer of title or purchase option reasonably certain of exercise. Lease agreements with both lease and non-lease components, are

generally accounted for together as a single lease component. The Company has elected to apply the short-term expedient to leases with

a lease term of 12 months or less, which does not subject the leases to capitalization.

Related Party Transactions [Policy Text Block]

Related party transactions

The Company has a Related Party policy which defines related parties, and assigns oversight responsibility for related party transactions

to the Company's Audit Committee. The Committee reviews in advance related party transactions, and considers multiple factors,

including the proposed aggregate value of the transaction, or, in the case of indebtedness, the amount of principal that would be involved,

the benefits to the Company of the proposed transaction, the availability of other sources of comparable products or services, and an

assessment of whether the proposed transaction is on terms that are comparable to the terms available to or from, as the case may be,

unrelated third parties. Under the policy, related party transactions are approved only if the Committee determines in good faith that the

transaction is not inconsistent with the interests of the Company and its shareholders.

Short-Term Investments [Policy Text Block]

Short-term investments

The Company determines the appropriate classification of its investments at the time of purchase. Currently, all of the Company’s

investments are classified as available-for-sale in accordance with ASC Topic 320. The Company classifies investments available to

fund current operations as current assets on its consolidated balance sheets. Investments are classified as long-term assets on the

consolidated balance sheets if (i) the Company has the intent and ability to hold the investments for a period of at least one year and (ii)

the contractual maturity date of the investments is greater than one year.

Available-for-sale investments are recorded at fair value, with unrealized gains or losses included in accumulated other comprehensive

income or loss. Realized gains and losses, interest income earned on the Company’s cash, cash equivalents and investments, and

amortization or accretion of discounts and premiums on investments are included within other income (expense).

Available-for-sale debt securities are reviewed for possible impairment at least quarterly, or more frequently if circumstances arise that

may indicate impairment. When the fair value of the securities declines below the amortized cost basis, impairment is indicated and it

must be determined whether it is other than temporary. Impairment is considered to be other than temporary if the Company: (i) intends

to sell the security, (ii) will more likely than not be forced to sell the security before recovering its cost, or (iii) does not expect to recover

the security’s amortized cost basis. If the decline in fair value is considered other than temporary, the cost basis of the security is adjusted

to its fair market value and the realized loss is reported in earnings. Subsequent increases or decreases in fair value are reported in equity

as accumulated other comprehensive income.

The Company did not record any such impairments during the period ending September 30, 2022.

XML

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Measurements [Abstract]

Schedule of Financial Instruments Measured at Fair Value on a Recurring Basis

December 31, 2021

Level 1

Level 2

Level 3

Total

Assets:

Money market account

$

139,794

$

—

$

—

$

139,794

Total assets

$

139,794

$

—

$

—

$

139,794

September 30, 2022

Level 1

Level 2

Level 3

Total

Assets:

Short-term investments

80,233

—

—

80,233

Money market accounts

10,995

—

—

10,995

Total assets

$

91,228

$

—

$

—

$

91,228

XML

Short-Term Investments (Tables)

9 Months Ended

Sep. 30, 2022

Short-Term Investments [Abstract]

Short-Term Investments

As of September 30, 2022

Amortized

Cost

Unrealized

Gains (Losses),

Net

Recorded

Basis

U.S. Treasury Securities

$

80,448

$

(215)

$

80,233

Total

$

80,448

$

(215)

$

80,233

XML

Prepaid Expenses and Other Current Assets (Tables)

9 Months Ended

Sep. 30, 2022

Prepaid Expenses and Other Current Assets [Abstract]

Prepaid Expenses and Other Current Assets

September 30,

December 31,

2022

2021

Prepaid materials and supplies

$

1,754

$

3,517

Clinical prepayments

2,067

4,379

Deposits

1,323

614

Other

358

341

$

5,502

$

8,851

XML

Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2022

Property and Equipment [Abstract]

Property and Equipment, Net

September 30,

December 31,

2022

2021

Airplane

$

11,983

$

11,983

Laboratory and computer equipment

2,790

1,831

Software

169

168

Facilities, furniture and fixtures

106

85

Vehicles

87

87

Fixed assets not yet placed into service

791

199

Total property and equipment

15,926

14,353

Less: accumulated depreciation

(3,125)

(1,981)

Property and equipment, net

$

12,801

$

12,372

XML

Accrued Expenses and Other Current Liabilities (Tables)

9 Months Ended

Sep. 30, 2022

Accrued Expenses and Other Current Liabilities [Abstract]

Accrued expenses and other current liabilities

September 30,

December 31,

2022

2021

Accrued external research and development

$

3,842

$

1,501

Accrued bonuses

3,410

2,294

Accrued professional fees and other

4,767

692

Accrued interest

30

32

$

12,049

$

4,519

XML

Other Long-Term Liabilities (Tables)

9 Months Ended

Sep. 30, 2022

Other Liabilities Disclosure [Abstract]

Other Liabilities

September 30,

December 31,

2022

2021

Accrued tax provision

236

236

Accrued rent

—

1

$

236

$

237

XML

Notes payable (Tables)

9 Months Ended

Sep. 30, 2022

Notes payable with related parties [Abstract]

Schedule of Maturities of Notes Payable

Amount

2022

$

109

2023

444

2024

458

2025

9,553

$

10,564

Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Table Text Block]

September 30,

December 31,

2022

2021

Principal

$

10,564

$

10,883

Unamortized debt issuance cost

(145)

(184)

Carrying amount

10,419

10,699

Less: current portion

(387)

(376)

Note payable, net of current portion and debt issuance cost

$

10,032

$

10,323

XML

Common Stock (Tables)

9 Months Ended

Sep. 30, 2022

Common Stock [Abstract]

Reserved Shares of Common Stock for Issuance

September 30,

December 31,

2022

2021

Options and RSUs issued and outstanding

20,593,681

21,387,909

Options available for future grants

6,251,916

7,209,538

Warrants issued and outstanding

1,928,020

1,928,020

28,773,617

30,525,467

XML

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2022

Stock-Based Compensation [Abstract]

Summary of Stock Option Activity

Number of Stock

Options

Outstanding

Weighted

Exercise Price

Per Share

Weighted

Contractual

Term (years)

Aggregate

Intrinsic Value

(in thousands)

Balance at December 31, 2021

21,387,909

$

5.25

7.4

$

49,684

Granted

1,104,921

3.19

Exercised

(1,065,706)

3.26

Forfeited

(1,133,443)

7.23

Balance at September 30, 2022

20,293,681

$

5.13

7.1

$

11,940

Options vested and exercisable at September 30, 2022

13,977,398

$

4.52

6.8

$

10,773

Summary of Restricted Stock Activity

Number of

Shares

Weighted

Average

Grant Date

Fair Value

Per Share

Unvested at December 31, 2021

—

$

—

Issued

300,000

3.76

Unvested at September 30, 2022

300,000

$

3.76

Schedule of Stock-Based Compensation Expense for Stock Options

Three Months Ended September

30,

Nine Months Ended September

30,

2022

2021

2022

2021

General and administrative

$

1,509

$

1,100

$

3,888

$

4,864

Research and development

848

364

2,473

738

Total stock-based compensation expense

$

2,357

$

1,464

$

6,361

$

5,602

XML

Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2022

Net Loss Per Share [Abstract]

Schedule of Excluded Potential Common Shares from Computation of Diluted Net Loss Per Share

September 30,

September 30,

2022

2021

Series A preferred stock

—

39,989,083

Series B preferred stock

—

9,875,037

Options and RSUs issued and outstanding

20,593,681

20,714,308

Warrants issued and outstanding stock

1,928,020

2,056,722

22,521,701

72,635,150

XML

Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2022

Related Party Transactions [Abstract]

Schedule of Related Party Operating Activity

September 30,

December 31,

2022

2021

Consolidated balance sheet

Assets

Prepaid expenses and other current assets

$

1,743

$

3,517

Amounts due from related parties

400

393

Property and equipment, net

—

337

Liabilities

Amounts due to related parties

16,676

19,407

Accrued expenses

877

—

Three Months Ended September

30,

Nine Months Ended September

30,

2022

2021

2022

2021

Operating expenses

Research and development

Services provided by related parties

 $

—

 $

13,515

 $

1,139

 $

38,667

Taiwan CDC grant reimbursement from related party

—

—

—

(7,199)

General and administrative

Services provided by related parties

$

—

$

355

$

—

$

1,173

XML

Nature of the Business (Narrative) (Details) $ / shares in Units, $ in Thousands				3 Months Ended		9 Months Ended
	Nov. 18, 2021 $ / shares shares	Nov. 15, 2021 $ / shares shares	Oct. 29, 2021	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) shares	Sep. 30, 2021 USD ($)	Dec. 31, 2021 USD ($) shares
Nature of Business Disclosures [Line Items]
Proceeds from issuance of simple agreement for future equity							$ 2,900
Proceeds from issuance of convertible notes payable with related parties							2,000
Repayment of convertible notes							2,000
Cash and cash equivalents				$ 18,875		$ 18,875		$ 144,885
Net Income Loss				(19,252)	$ (30,389)	(54,766)	(89,320)
Accumulated deficit				(284,247)		(284,247)		(229,481)
Reverse stock split	1.556		1.556
Restricted Cash Current				3,073		3,073		$ 172
Net Cash Provided By Used In Operating Activities						(41,451)	$ (67,026)
Liquid Assets				102,200		102,200
Short Term Investments				80,233		80,233
UB-612 [Member]
Nature of Business Disclosures [Line Items]
Restricted Cash Current				$ 3,000		$ 3,000
Class A Common Stock [Member]
Nature of Business Disclosures [Line Items]
Issuance of stock, shares | shares		6,000,000
Share Price | $ / shares		$ 13.00
Underwriters [Member]
Nature of Business Disclosures [Line Items]
Issuance of stock, shares | shares	900,000
Underwriters [Member] | Class A Common Stock [Member]
Nature of Business Disclosures [Line Items]
Issuance of stock, shares | shares	537,711
Share Price | $ / shares	$ 71.1
UNS. [Member]
Nature of Business Disclosures [Line Items]
Note conversion ratio						3.4233
Option exchange ratio				0.2191
COVAXX [Member]
Nature of Business Disclosures [Line Items]
ConvertiblePreferredStockSharesIssuedUponConversion | shares								3.4233
Debt Conversion Converted Instrument Shares Issued 1 | shares						4,047,344

XML

Fair Value Measurements (Schedule of Financial Instruments Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short Term Investments	$ 80,233
Cash and cash equivalents	18,875	$ 144,885
Assets	91,228	139,794
Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	10,995	139,794
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short Term Investments	80,233
Assets	91,228	139,794
Level 1 [Member] | Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	$ 10,995	$ 139,794

XML

Short-Term Investments (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Cash And Cash Equivalents [Line Items]
Amortized Cost	$ 80,448
Unrealized Gains (Losses), Net	(215)
Recorded Basis	80,233
U S Treasury Securities [Member]
Cash And Cash Equivalents [Line Items]
Amortized Cost	80,448
Unrealized Gains (Losses), Net	(215)
Recorded Basis	$ 80,233

XML

Prepaid Expenses and Other Current Assets (Narrative) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Prepaid Expenses and Other Current Assets [Line Items]
Supplies	$ 1,754	$ 3,517
Vaccine Development [Member]
Prepaid Expenses and Other Current Assets [Line Items]
Supplies	700
UB-612 [Member] | Related Party [Member]
Prepaid Expenses and Other Current Assets [Line Items]
Supplies	1,800
ELISA [Member] | Related Party [Member]
Prepaid Expenses and Other Current Assets [Line Items]
Supplies	$ 1,700

XML

Prepaid Expenses and Other Current Assets (Prepaid Expenses and Other Current Assets) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Prepaid Expenses and Other Current Assets [Abstract]
Prepaid materials and supplies	$ 1,754	$ 3,517
Deposits	1,323	614
Clinical prepayments	2,067	4,379
Other	358	341
Total	$ 5,502	$ 8,851

XML

Property and Equipment (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 0.4	$ 0.4	$ 1.1	$ 0.9

XML

Property and Equipment (Property and Equipment, Net) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Property and equipment	$ 15,926	$ 14,353
Less accumulated depreciation	(3,125)	(1,981)
Property and equipment, net	12,801	12,372
Air Transportation Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	11,983	11,983
Laboratory And Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	2,790	1,831
Fixed Assets Not Yet Placed Into Service [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	791	199
Software And Software Development Costs [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	169,000	168,000
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	87,000	87,000
Furniture And Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	$ 106	$ 85

XML

Accrued Expenses and Other Current Liabilities (Narrative) (Details) $ in Millions	Sep. 30, 2022 USD ($)
Accrued Expenses and Other Current Liabilities [Abstract]
Grant Monies Received	$ 3.0

XML

Accrued Expenses and Other Current Liabilities (Accrued Expenses and Other Current Liabilities) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Accrued Expenses and Other Current Liabilities [Abstract]
Accrued payroll and benefits	$ 3,842	$ 1,501
Accrued External Research And Development	3,410	2,294
Accrued professional fees and other	4,767	692
Accrued interest	30	32
Total	$ 12,049	$ 4,519

XML

Other Long-Term Liabilities (Narrative) (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Other Liabilities Disclosure [Abstract]
Accrued Payroll Taxes Current And Noncurrent	$ 0.2	$ 0.2

XML

Other Long-Term Liabilities (Other Liabilities) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Other Liabilities Disclosure [Abstract]
Accrued tax provision	$ 236	$ 236
Lease liability		1
Total	$ 236	$ 237

XML

Notes payable (Notes payable with related parties) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Debt Instrument [Line Items]
Repayment of note payable with related party		$ (100)
Additions	$ (7)	$ (18)

XML

Notes payable (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Jun. 30, 2020
Debt Instrument [Line Items]
Proceeds from issuance of convertible notes payable with related parties				$ 2,000
Notes Payable, Airplane [Member]
Debt Instrument [Line Items]
Notes Payable, Related Parties					$ 11,500
Debt Instrument Interest Rate Stated Percentage					3.40%
Interest Expense, Debt	$ 100	$ 100	$ 300	$ 300
Debt Instrument Periodic Payment Interest			100
Debt Instrument Periodic Payment Terms Balloon Payment To Be Paid	9,400		9,400
Payments Of Debt Issuance Costs			300
Debt Instrument Increase Accrued Interest			100
Paycheck Protection Program [Member]
Debt Instrument [Line Items]
Notes Payable, Related Parties	$ 300		$ 300

XML

Notes payable (Carrying Value) (Details) - Note, 2025 [Member] - Notes Payable [Member] - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Principal	$ 10,564	$ 10,883
Unamortized debt issuance cost	145	184
Total	10,419	10,699
Less: current portion	(387)	(376)
Note payable, net of current portion and debt issuance cost	$ 10,032	$ 10,323

XML

Notes payable (Annual Principal Payments) (Details) - Note, 2025 [Member] - Notes Payable [Member] - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
2021	$ 109
2022	444
2023	458
2024	9,553
Total	$ 10,564	$ 10,883

XML

Convertible Preferred Stock (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2022	Dec. 31, 2021
Class Of Stock [Line Items]
Preferred stock, par value		$ 0.0001	$ 0.0001
Preferred stock, shares authorized/designated		50,000,000	50,000,000
Series B Preferred Stock [Member]
Class Of Stock [Line Items]
Conversion Of Stock, Per Share	$ 8.00
Conversion Of Stock Amount Issued 1	$ 122.9
Conversion Of Stock Shares Issued 1	15,365,574
Convertible Preferred Shares [Member] | UNS [Member]
Class Of Stock [Line Items]
Conversion Of Stock, Per Share	$ 0.2191
Convertible Preferred Shares [Member] | COVAXX [Member]
Class Of Stock [Line Items]
Conversion Of Stock, Per Share	$ 3.4233

XML

Common Stock (Narrative) (Details) - $ / shares		9 Months Ended
	Nov. 15, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Class A Common Stock [Member]
Class Of Stock [Line Items]
Issuance of stock, shares	6,000,000
Share Price	$ 13.00
Common stock, shares authorized		1,000,000,000		1,000,000,000
Common stock, par value		$ 0.0001		$ 0.0001
Common Class B [Member]
Class Of Stock [Line Items]
Common stock, shares authorized		100,000,000		100,000,000
Common stock, par value		$ 0.0001		$ 0.0001
Common Stock [Member] | Class A Common Stock [Member]
Class Of Stock [Line Items]
Issuance of stock, shares			485,836
Amended And Restated Common Stock [Member]
Class Of Stock [Line Items]
Common stock, shares authorized		1,100,000,000		1,100,000,000
Common stock, par value		$ 0.0001		$ 0.0001
Amended And Restated Common Stock [Member] | Class A Common Stock [Member]
Class Of Stock [Line Items]
Common stock, shares authorized		1,000,000,000		1,000,000,000
Amended And Restated Common Stock [Member] | Common Class B [Member]
Class Of Stock [Line Items]
Common stock, shares authorized		100,000,000		100,000,000
UNS [Member] | Class A Common Stock [Member]
Class Of Stock [Line Items]
Issuance of stock, shares		60,360,523
Shares converted		0.2191
UNS [Member] | Common Class B [Member]
Class Of Stock [Line Items]
Issuance of stock, shares		10,999,149
Shares converted		3.4233

XML

Common Stock (Reserved Share of Common Stock for Issuance) (Details) - shares	Sep. 30, 2022	Dec. 31, 2021
Class Of Stock [Line Items]
Options issued and outstanding	20,293,681	21,387,909
Options [Member]
Class Of Stock [Line Items]
Options issued and outstanding	20,593,681	21,387,909
Options available for future grants	6,251,916	7,209,538
Warrants issued and outstanding to purchase shares of common stock	1,928,020	1,928,020
Reserved Shares of Common Stock	28,773,617	30,525,467

XML

Stock-Based Compensation (Narrative) (Details - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options outstanding	20,293,681		20,293,681		21,387,909
Options exercisable	13,977,398		13,977,398
Total stock-based compensation expense	$ 2,357	$ 1,464	$ 6,361	$ 5,602
Options [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares available for grant	6,251,916		6,251,916		7,209,538
Options outstanding	20,593,681		20,593,681		21,387,909
Restricted Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted-average grant-date fair value per share of options granted			$ 3.76
Class A Common Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Available for issuance under Plan	8,700,000		8,700,000
Percent, Shares Outstanding	4.00%		4.00%
Class A Common Stock [Member] | Restricted Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation expense			$ 100
2021 Stock Option and Grant Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total unrecognized compensation cost	$ 18,900		$ 18,900
Recognized over a weighted average period			2 years 6 months
2021 Stock Option and Grant Plan [Member] | Options [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares available for grant	6,251,916		6,251,916
Intrincic value of options exercised			$ 4,500
Weighted-average grant-date fair value per share of options granted			$ 2.38
2021 Stock Option and Grant Plan [Member] | Class A Common Stock [Member] | Options [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options outstanding	13,931,226		13,931,226
Options exercisable	9,032,635		9,032,635
2021 Stock Option and Grant Plan [Member] | Common Class B [Member] | Options [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options outstanding	6,362,455		6,362,455
Options exercisable	4,944,763		4,944,763

XML

Stock-Based Compensation (Summary of Stock Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Stock-Based Compensation [Abstract]
Number of stock options, outstanding	21,387,909
Number of stock options, Granted	1,104,921
Number of stock options, Exercised	(1,065,706)
Number of stock options, Forfeited	(1,133,443)
Number of stock options, outstanding	20,293,681	21,387,909
Number of stock options, Exercisable	13,977,398
Weighted price per share, outstanding	$ 5.25
Weighted price per share, Granted	3.19
Weighted price per share, Exercised	3.26
Weighted price per share, Forfeited	7.23
Weighted price per share, outstanding	5.13	$ 5.25
Weighted price per share,exercisable	$ 4.52
Weighted contractual term, outstanding	7 years 1 month 6 days	7 years 4 months 24 days
Weighted contractual term, exercisable	6 years 9 months 18 days
Aggregate intrinsic value, outstanding	$ 11,940	$ 49,684
Aggregate intrinsic value, exercisable	$ 10,773

XML

Stock-Based Compensation (Summary of Restricted Stock Activity) (Details)	9 Months Ended
	Sep. 30, 2022 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share Based Compensation Arrangement By Share Based Payment Award Options Grants In Period Gross	1,104,921
Restricted Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share Based Compensation Arrangement By Share Based Payment Award Options Grants In Period Gross	300,000
Unvested, Number of Shares, Ending Balance	300,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares	$ 3.76

XML

Stock-Based Compensation (Schedule of Stock-Based Compensation Expense for Stock Options) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	$ 2,357	$ 1,464	$ 6,361	$ 5,602
Research And Development Expense [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	848	364	2,473	738
General And Administrative Expense [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	$ 1,509	$ 1,100	$ 3,888	$ 4,864

XML

Income Taxes (Narrative) (Details)	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Operating Loss Carryforwards [Line Items]
Effective Income Tax Rate Continuing Operations	0.00%	0.00%

XML

Net Loss Per Share (Schedule of Excluded Potential Common Shares from Computation of Diluted Net Loss Per Share) (Details) - shares	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Excluded potential common shares from computation of diluted net loss per share	22,521,701	72,635,150
Options issued and outstanding [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Excluded potential common shares from computation of diluted net loss per share	20,593,681	20,714,308
Warrants issued and outstanding [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Excluded potential common shares from computation of diluted net loss per share	1,928,020	2,056,722
Series A Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Excluded potential common shares from computation of diluted net loss per share		39,989,083
Series B Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Excluded potential common shares from computation of diluted net loss per share		9,875,037

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Commitments and Contingencies (Narrative) (Details) $ in Millions	1 Months Ended		3 Months Ended	9 Months Ended
	Apr. 30, 2022 USD ($)	Aug. 31, 2021 USD ($)	Sep. 30, 2022 USD ($) ft²	Sep. 30, 2022 USD ($) ft²
Commitments And Contingencies [Line Items]
Lease in square feet | ft²			4,419	4,419
Project Grant				$ 0.8
Grant, Accrued Liability, NonCurrent			$ 0.1	0.1
Short Term Lease Payments			0.1	0.3
Variable Lease Payment			0.1	0.1
Restricted Cash And Current Accrued Liability			3.0	3.0
Reduction In Research And Development			1.6	3.1
Materials Ordered		$ 7.2	0.4	0.4
Materials Expensed		1.2
Materials Received		$ 3.0
Materials Delivered			0.8	0.8
Materials On Order			3.0	3.0
Materials, Probable Loss				2.6
Contract Research Organizations [Member]
Commitments And Contingencies [Line Items]
Remaining prepayments			3.1	3.1
Contract Manufacturing Organizations [Member]
Commitments And Contingencies [Line Items]
Remaining prepayments			$ 0.7	$ 0.7
UB-612 [Member]
Commitments And Contingencies [Line Items]
Project Grant	$ 9.3

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Benefit Plans (Narrative) (Details) - Foreign Plan [Member] - Personal Retirement Savings Account [Member] - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Defined Contribution Plan Disclosure [Line Items]
Company contribution percent	4.00%
Company contributions	$ 0.1	$ 0.1

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Related Party Transactions (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Related Party Transaction [Line Items]
Due to related parties	$ 16,700		$ 16,700		$ 19,400
Service fees	0	$ 13,900	1,100	$ 32,600
Prepaid expenses	5,502		5,502		8,851
Due From Related Parties	$ 400		$ 400		$ 400
UBI [Member] | UBI1 [Member]
Related Party Transaction [Line Items]
Percent of ownership	44.00%		44.00%

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Related Party Transactions (Schedule of Related Party Operating Activity) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Related Party Transaction [Line Items]
Prepaid expenses and other current assets			$ 5,502		$ 8,851
Due From Related Parties			400		400
Property and equipment, net			12,801		12,372
Due to related parties			16,700		19,400
Revenue	$ 50			$ 67
Cost of revenue		$ 9		1,937
Services Provided By Related Parties [Member]
Related Party Transaction [Line Items]
Research and development		13,515	1,139	38,667
General and administrative		$ 355		1,173
Taiwan CDC Grant [Member]
Related Party Transaction [Line Items]
Research and development				$ (7,199)
UBI IP [Member] | Services Provided By Related Parties [Member]
Related Party Transaction [Line Items]
Prepaid expenses and other current assets			1,743		3,517
Due From Related Parties			400		393
Property and equipment, net					337
Due to related parties			16,676		$ 19,407
Accrued expenses			$ 877