arav20210930

arav20210930_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2021

☐	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: 001-36361

Aravive, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

2834

26-4106690

(State or Other Jurisdiction of

Incorporation or Organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification Number)

River Oaks Tower

3730 Kirby Drive, Suite 1200

Houston, Texas 77098

(Address of principal executive offices)

(936) 355-1910

(Registrant’s Telephone Number, including area code)

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, par value $0.0001 per share		ARAV		Nasdaq Global Select 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, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

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

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

As of October 25, 2021, there were 20,973,499 outstanding shares of common stock, par value $0.0001 per share, of Aravive, Inc.

Item		Page
1.	Financial Statements (unaudited):
	a. Condensed Consolidated Balance Sheets at September 30, 2021 and December 31, 2020	3
	b. Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020	4
	c. Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2021 and 2020	5
	d. Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020	6
	e. Notes to Condensed Consolidated Financial Statements	7
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
3.	Quantitative and Qualitative Disclosures About Market Risk	25
4.	Controls and Procedures	26

PART II. OTHER INFORMATION
1.	Legal Proceedings	27
1A.	Risk Factors	27
6.	Exhibits	31
	Signatures	32

	*September 30,*			*December 31,*
	*2021*			*2020*
	(unaudited)
Assets
Current Assets
Cash and cash equivalents	$	67,511		$	60,541
Prepaid expenses and other current assets		4,012			1,148
Total current assets		71,523			61,689
Restricted cash		2,430			2,430
Property and equipment, net		435			526
Operating lease right-of-use assets		2,394			2,958
Intangible asset, net		6			97
Other assets		5			10
Total assets	$	76,793		$	67,710
Liabilities and stockholders' equity
Current liabilities
Accounts payable	$	1,988		$	2,500
Accrued liabilities		4,586			2,323
Operating lease obligation, current portion		2,324			2,086
Current portion of deferred revenue		5,296			2,552
Total current liabilities		14,194			9,461
Deferred revenue, net of current portion		3,617			3,763
Operating lease obligation, net of current portion		4,646			6,431
Total liabilities		22,457			19,655
Stockholders' equity
Common stock, $0.0001 par value, 100,000,000 shares authorized at September 30, 2021 and December 31, 2020; 20,904,499 and 16,481,099 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively		2			2
Additional paid-in capital		581,183			548,707
Accumulated deficit		(526,849	)		(500,654	)
Total stockholders' equity		54,336			48,055
Total liabilities and stockholders’ equity	$	76,793		$	67,710

	*Three Months Ended*						*Nine Months Ended*
	*September 30,*						*September 30,*
	*2021*			*2020*			*2021*			*2020*
Revenue
Collaboration revenue	$	2,412		$	—		$	6,457		$	—
Total revenue		2,412			—			6,457			—
Operating expenses
Research and development		11,343			5,070			25,347			11,085
General and administrative		2,643			2,715			8,102			9,866
Loss on impairment of long-lived assets		—			2,914			—			5,784
Total operating expenses		13,986			10,699			33,449			26,735
Loss from operations		(11,574	)		(10,699	)		(26,992	)		(26,735	)
Interest income		9			8			29			251
Other income (expense), net		479			31			768			(13	)
Net loss	$	(11,086	)	$	(10,660	)	$	(26,195	)	$	(26,497	)
Net loss per share - basic and diluted	$	(0.53	)	$	(0.66	)	$	(1.33	)	$	(1.69	)
Weighted-average common shares used to compute basic and diluted net loss per share		20,763			16,055			19,758			15,658

	*Three and Nine Months Ended*
	*September 30, 2021*
					*Additional*					*Total*
	*Common Stock*				*Paid-In*		*Accumulated*			*Stockholders'*
	*Shares*		*Amount*		*Capital*		*Deficit*			*Equity*
Balances at January 1, 2021		16,481,099	$	2	$	548,707	$	(500,654	)	$	48,055
Issuance of common stock upon exercise of options		77,858		—		260		—			260
Issuance of common stock in direct offering, net of issuance costs of $98		2,875,000		—		20,866		—			20,866
Issuance of common stock in at the market offering		884,695		—		7,034		—			7,034
Stock-based compensation		—		—		505		—			505
Net loss		—		—		—		(8,004	)		(8,004	)
Balances at March 31, 2021		20,318,652	$	2	$	577,372	$	(508,658	)	$	68,716
Issuance of common stock upon exercise of options		63,094		—		20		—			20
Issuance of common stock in at the market offering		314,983		—		1,816		—			1,816
Issuance of common stock under employee benefit plans		17,275		—		71		—			71
Stock-based compensation		—		—		540		—			540
Net loss		—		—		—		(7,105	)		(7,105	)
Balances at June 30, 2021		20,714,004	$	2	$	579,819	$	(515,763	)	$	64,058
Issuance of common stock upon exercise of options		7,500		—		5		—			5
Issuance of common stock in at the market offering		182,995		—		732		—			732
Stock-based compensation		—		—		627		—			627
Net loss		—		—		—		(11,086	)		(11,086	)
Balances at September 30, 2021		20,904,499	$	2	$	581,183	$	(526,849	)	$	54,336

	*Three and Nine Months Ended*
	*September 30, 2020*
					*Additional*					*Total*
	*Common Stock*				*Paid-In*		*Accumulated*			*Stockholders'*
	*Shares*		*Amount*		*Capital*		*Deficit*			*Equity*
Balances at January 1, 2020		15,001,795	$	2	$	539,158	$	(470,111	)	$	69,049
Issuance of common stock upon exercise of options		5,645		—		33		—			33
Issuance of common stock under employee benefit plans		8,492		—		—		—			—
Stock-based compensation		—		—		717		—			717
Net loss		—		—		—		(10,796	)		(10,796	)
Balances at March 31, 2020		15,015,932	$	2	$	539,908	$	(480,907	)	$	59,003
Issuance of common stock in private placement, net of issuance costs of $78		931,098		—		4,922		—			4,922
Issuance of common stock upon exercise of options		13,844		—		53		—			53
Issuance of common stock under employee benefit plans		35,303		—		22		—			22
Stock-based compensation		—		—		488		—			488
Net loss		—		—		—		(5,041	)		(5,041	)
Balances at June 30, 2020		15,996,177	$	2	$	545,393	$	(485,948	)	$	59,447
Issuance of common stock upon exercise of options		91,089		—		203		—			203
Stock-based compensation		—		—		376		—			376
Net loss		—		—		—		(10,660	)		(10,660	)
Balances at September 30, 2020		16,087,266	$	2	$	545,972	$	(496,608	)	$	49,366

	*Fair Value Measurements at*
	*September 30, 2021*
	(unaudited)
	*Total*		*Level 1*
Assets
Money market funds	$	49,214	$	49,214

	*Fair Value Measurements at*
	*December 31, 2020*
	*Total*		*Level 1*
Assets
Money market funds	$	49,207	$	49,207

Year Ending December 31,
2021 (3 months remaining)	$	733
2022		2,955
2023		3,039
2024		2,619
2025		116
Thereafter		30
Total future minimum lease payments		9,493
Less: discount		(2,523	)
Total lease liabilities	$	6,970

						*Weighted*
						*Average*
				*Weighted*		*Remaining*		*Aggregate*
				*Average*		*Contractual*		*Intrinsic*
	*Number of*			*Exercise*		*Life*		*Value*
	*Shares*			*Price*		*(in years)*		*(in thousands)*
Balances, January 1, 2021		2,173,776		$	9.59
Options granted		865,674			5.55
Options cancelled		(457,323	)		34.53
Options exercised		(148,452	)		1.91
Balances, September 30, 2021		2,433,675		$	3.93		7.0	$	3,269
Outstanding and expected to vest as of September 30, 2021		2,278,219		$	3.77		6.9	$	3,269
Exercisable as of September 30, 2021		1,473,616		$	2.44		5.6	$	3,269

	*September 30,*			*September 30,*
	*2021*			*2020*
Expected volatility		114.4	%		112.3	%
Risk-free interest rate		0.7	%		1.0	%
Dividend yield		0.0	%		0.0	%
Expected life (in years)		5.9			6.0