huma-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________________________________________________________________________________________

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2023

o 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: 001-39532

___________________________________________________________________________________________________

Humacyte, Inc.

(Exact name of registrant as specified in its charter)

___________________________________________________________________________________________________


Delaware		85-1763759
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2525 East North Carolina Highway 54
Durham,	NC	27713
(Address of principal executive offices)		(Zip code)

(919) 313-9633

(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 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

HUMA

The Nasdaq Stock Market LLC

Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50

HUMAW

The Nasdaq Stock Market LLC

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

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 x No o

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. o

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

As of August 3, 2023, 103,434,507 shares of common stock, par value $0.0001, were issued and outstanding.

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Humacyte, Inc.

Quarterly Report on Form 10-Q

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		Page No.
	PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	5

	Condensed Consolidated Balance Sheets (unaudited)	5

	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (unaudited)	6

	Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited)	7

	Condensed Consolidated Statements of Cash Flows (unaudited)	8

	Notes to Condensed Consolidated Financial Statements (unaudited)	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45

Item 4.	Controls and Procedures	45

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	46

Item 1A.	Risk Factors	46

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47

Item 3.	Defaults Upon Senior Securities	47

Item 4.	Mine Safety Disclosures	47

Item 5.	Other Information	47

Item 6.	Exhibits	48

SIGNATURES		49

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FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements that involve substantial risks and uncertainties. “Forward-looking statements,” as that term is defined in the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) are statements that are not historical facts and involve a number of risks and uncertainties. These statements include, without limitation, statements regarding the financial position, business strategy and the plans and objectives of management for future operations. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used therein, words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strive,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Such statements are based on the beliefs of, as well as assumptions made by and information currently available to, our management.

Forward-looking statements may include, for example, statements about:

•our plans and ability to execute product development, process development and preclinical development efforts successfully and on our anticipated timelines;

•our plans, anticipated timeline and ability to file an application for, and obtain marketing approval from, the U.S. Food and Drug Administration (“FDA”) and other regulatory authorities, including the European Medicines Agency, for our bioengineered human acellular vessels (“HAVs”) and other product candidates;

•our ability to design, initiate and successfully complete clinical trials and other studies for our product candidates and our plans and expectations regarding our ongoing or planned clinical trials, including for our ongoing V005 Phase 2/3 clinical trial and V007 Phase 3 clinical trial;

•the outcome of our ongoing discussions with the FDA concerning the design of our clinical trials;

•our anticipated growth rate and market opportunities;

•the potential liquidity and trading of our securities;

•our ability to raise additional capital in the future;

•our ability to use our proprietary scientific technology platform to build a pipeline of additional product candidates;

•the characteristics and performance of our HAVs;

•our plans and ability to commercialize our HAVs and other product candidates, if approved by regulatory authorities;

•the expected size of the target populations for our product candidates;

•the anticipated benefits of our HAVs relative to existing alternatives;

•our assessment of the competitive landscape;

•the degree of market acceptance of HAVs, if approved, and the availability of third-party coverage and reimbursement;

•our ability to manufacture HAVs and other product candidates in sufficient quantities to satisfy our clinical trial and commercial needs;

•our expectations regarding our strategic partnership with Fresenius Medical Care Holdings, Inc. (“Fresenius Medical Care”) to sell, market and distribute our 6 millimeter HAV for certain specified indications and in specified markets;

•the performance of other third parties on which we rely, including our third-party manufacturers, our licensors, our suppliers and the organizations conducting our clinical trials;

•our ability to obtain and maintain intellectual property protection for our product candidates as well as our ability to operate our business without infringing, misappropriating or otherwise violating the intellectual property rights of others;

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•our ability to maintain the confidentiality of our trade secrets, particularly with respect to our manufacturing process;

•our compliance with applicable laws and regulatory requirements, including FDA regulations, healthcare laws and regulations, and anti-corruption laws;

•our ability to attract, retain and motivate qualified personnel and to manage our growth effectively;

•our future financial performance and capital requirements;

•our ability to implement and maintain effective internal controls; and

•the impact of the overall global economy and increasing interest rates and inflation on our business.

We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. Any forward-looking statement is based on information current as of the date of this Quarterly Report and speaks only as of the date on which such statement is made. Actual events or results may differ materially from the results, plans, intentions or expectations anticipated in these forward-looking statements as a result of a variety of factors, many of which are beyond our control. More information on factors that could cause actual results to differ materially from those anticipated is included from time to time in our reports filed with the Securities and Exchange Commission (the “SEC”), including, but not limited to, those described in the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this Quarterly Report and our Annual Report on Form 10-K for the year ended December 31, 2022, which we filed with the SEC on March 24, 2023. We disclaim any obligation, except as specifically required by law, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Humacyte, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands except for share and per share amounts)


	June 30, 2023		December 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	114,604	$	149,772

Prepaid expenses and other current assets	5,958		2,298
Short-term investments	—		2,107
Accounts receivable	—		31
Total current assets	120,562		154,208

Finance lease right-of-use assets, net	18,343		19,373
Operating lease right-of-use assets, net	658		682
Property and equipment, net	28,543		30,039
Total assets	$	168,106	$	204,302

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	2,362	$	1,595
Accrued expenses	6,571		7,108
Finance lease obligation, current portion	2,404		2,256
Operating lease obligation, current portion	51		50
SVB loan payable, current portion	—		8,571


Total current liabilities	11,388		19,580

Contingent Earnout Liability	38,457		27,893
Revenue interest liability	36,248		—
Finance lease obligation, net of current portion	17,614		18,853
Contingent derivative liability	2,392		—


Other long-term liabilities	890		712
SVB loan payable, net of current portion	—		20,336

Total liabilities	106,989		87,374

Commitments and contingencies (Note 11)

Stockholders’ equity
Preferred stock, $0.0001 par value; 20,000,000 shares designated as of June 30, 2023 and December 31, 2022; 0 shares issued and outstanding as of June 30, 2023 and December 31, 2022	—		—
Common stock, $0.0001 par value; 250,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 103,408,248 and 103,229,013 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively	10		10
Additional paid-in capital	547,320		543,456
Accumulated deficit	(486,213)		(426,538)
Total stockholders’ equity	61,117		116,928
Total liabilities and stockholders’ equity	$	168,106	$	204,302

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

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Humacyte, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(unaudited)

(in thousands except for share and per share amounts)


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022

Grant revenue	$	—	$	1,301	$	—	$	1,534

Operating expenses:
Research and development	20,540		14,652		37,818		30,966
General and administrative	6,191		5,180		11,425		10,862
Total operating expenses	26,731		19,832		49,243		41,828
Loss from operations	(26,731)		(18,531)		(49,243)		(40,294)

Other income (expense), net:
Interest income	1,479		301		2,954		332
Change in fair value of Contingent Earnout Liability	3,627		56,353		(10,564)		59,611
Employee retention credit	3,107		—		3,107		—
Loss on extinguishment of debt	(2,421)		—		(2,421)		—
Change in fair value of derivative liabilities	(57)		233		(99)		307
Interest expense	(1,710)		(1,488)		(3,409)		(2,920)
Total other income (expense), net	4,025		55,399		(10,432)		57,330
Net income (loss) and comprehensive income ( loss)	$	(22,706)	$	36,868	$	(59,675)	$	17,036

Net income (loss) per share attributable to common stockholders, basic	$	(0.22)	$	0.36	$	(0.58)	$	0.17
Weighted-average shares outstanding used in computing net income (loss) per share attributable to common stockholders, basic	103,361,501		103,005,651		103,312,785		103,004,874

Net income (loss) per share attributable to common stockholders, diluted	$	(0.22)	$	0.35	$	(0.58)	$	0.16
Weighted-average shares outstanding used in computing net income (loss) per share attributable to common stockholders, diluted	103,361,501		103,908,440		103,312,785		103,923,138

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

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Humacyte, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(unaudited)

(in thousands except for share amounts)


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance as of December 31, 2022	103,229,013	$	10	$	543,456	$	(426,538)	$	116,928
Proceeds from the exercise of stock options	100,158	—		119		—		119
Stock-based compensation	—	—		1,809		—		1,809
Net loss	—	—		—		(36,969)		(36,969)
Balance as of March 31, 2023	103,329,171	$	10	$	545,384	$	(463,507)	$	81,887
Proceeds from the exercise of stock options	79,077	—		95		—		95
Stock-based compensation	—	—		1,841		—		1,841
Net loss	—	—		—		(22,706)		(22,706)
Balance as of June 30, 2023	103,408,248	$	10	$	547,320

SEC Form 10-Q filed by Humacyte Inc.