$PRAX
Praxis Precision Medicines, Inc.

2020 Q4 Form 10-Q Financial Statement

#000119312520301222 Filed on November 23, 2020

View on sec.gov

Income Statement

Concept 2020 Q4 2020 Q3 2019 Q3
Revenue $0.00 $0.00 $0.00
YoY Change
Cost Of Revenue
YoY Change
Gross Profit
YoY Change
Gross Profit Margin
Selling, General & Admin $9.440M $3.430M $1.310M
YoY Change 424.44% 161.83%
% of Gross Profit
Research & Development $16.27M $12.79M $9.346M
YoY Change 185.44% 36.81%
% of Gross Profit
Depreciation & Amortization $20.00K $10.00K $10.00K
YoY Change 100.0% 0.0%
% of Gross Profit
Operating Expenses $25.71M $16.22M $10.65M
YoY Change 243.26% 52.22%
Operating Profit -$16.22M -$10.65M
YoY Change 52.22%
Interest Expense $10.00K $0.00 $50.00K
YoY Change -50.0% -100.0%
% of Operating Profit
Other Income/Expense, Net $1.000K $48.00K
YoY Change -97.92%
Pretax Income -$25.71M -$16.22M -$10.61M
YoY Change 244.18% 52.89%
Income Tax $0.00 $0.00
% Of Pretax Income
Net Earnings -$25.71M -$16.22M -$10.61M
YoY Change 247.85% 52.89%
Net Earnings / Revenue
Basic Earnings Per Share -$12.10
Diluted Earnings Per Share -$650.4K -$12.10 -$311.0K
COMMON SHARES
Basic Shares Outstanding 38.26M 1.666M shares
Diluted Shares Outstanding 1.666M shares

Balance Sheet

Concept 2020 Q4 2020 Q3 2019 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $296.6M $114.8M
YoY Change
Cash & Equivalents $296.6M $114.8M $4.320M
Short-Term Investments
Other Short-Term Assets $5.700M $1.100M
YoY Change
Inventory
Prepaid Expenses
Receivables
Other Receivables
Total Short-Term Assets $302.3M $115.9M
YoY Change 564.51%
LONG-TERM ASSETS
Property, Plant & Equipment $82.00K $98.00K
YoY Change -35.94%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $15.00K $2.066M
YoY Change -97.58%
Total Long-Term Assets $851.0K $3.697M
YoY Change -61.28%
TOTAL ASSETS
Total Short-Term Assets $302.3M $115.9M
Total Long-Term Assets $851.0K $3.697M
Total Assets $303.2M $119.5M
YoY Change 535.67%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $4.088M $3.452M
YoY Change 53.28%
Accrued Expenses $10.87M $6.186M
YoY Change 214.59%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $15.72M $10.38M
YoY Change 130.57%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00
YoY Change
Other Long-Term Liabilities $0.00 $200.0K
YoY Change
Total Long-Term Liabilities $0.00 $200.0K
YoY Change
TOTAL LIABILITIES
Total Short-Term Liabilities $15.72M $10.38M
Total Long-Term Liabilities $0.00 $200.0K
Total Liabilities $15.72M $10.58M
YoY Change 107.36%
SHAREHOLDERS EQUITY
Retained Earnings -$149.6M -$123.3M
YoY Change 84.61%
Common Stock $4.000K $1.000K
YoY Change 300.0%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares 0.000 shares
Shareholders Equity $287.5M -$123.3M -$72.06M
YoY Change
Total Liabilities & Shareholders Equity $303.2M $119.5M
YoY Change 535.67%

Cashflow Statement

Concept 2020 Q4 2020 Q3 2019 Q3
OPERATING ACTIVITIES
Net Income -$25.71M -$16.22M -$10.61M
YoY Change 247.85% 52.89%
Depreciation, Depletion And Amortization $20.00K $10.00K $10.00K
YoY Change 100.0% 0.0%
Cash From Operating Activities -$20.22M -$13.89M -$7.700M
YoY Change 103.22% 80.39%
INVESTING ACTIVITIES
Capital Expenditures $0.00 $0.00 -$30.00K
YoY Change -100.0%
Acquisitions
YoY Change
Other Investing Activities
YoY Change
Cash From Investing Activities $0.00 $0.00 -$30.00K
YoY Change -100.0%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 202.1M 108.9M -60.00K
YoY Change 300.54% -181600.0%
NET CHANGE
Cash From Operating Activities -20.22M -13.89M -7.700M
Cash From Investing Activities 0.000 0.000 -30.00K
Cash From Financing Activities 202.1M 108.9M -60.00K
Net Change In Cash 181.9M 95.01M -7.790M
YoY Change 349.01% -1319.64%
FREE CASH FLOW
Cash From Operating Activities -$20.22M -$13.89M -$7.700M
Capital Expenditures $0.00 $0.00 -$30.00K
Free Cash Flow -$20.22M -$13.89M -$7.670M
YoY Change 103.22% 81.1%

Facts In Submission

Frame Concept Type Concept / XBRL Key Value Unit
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us-gaap Depreciation
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us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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dei Security12b Title
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dei Trading Symbol
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PRAX
us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family: times new roman; font-size: 10pt; margin-top: 18pt; margin-bottom: 0pt;"><div style="font-family: 'times new roman'; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;;font-style:italic;display:inline;">Use of Estimates </div></div></div></div><div style="text-indent: 4%; font-family: times new roman; font-size: 10pt; margin-top: 6pt; margin-bottom: 0pt;"><div style="font-family: 'times new roman'; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the accrual for research and development expenses, stock-based compensation expense, and the valuation of equity </div><div style="font-size: 10pt; font-family: 'times new roman', serif; letter-spacing: 0px; top: 0px;;display:inline;"><div style="letter-spacing: 0px; top: 0px;;display:inline;">awards</div></div><div style="font-family: 'times new roman'; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ materially from those estimates. </div></div> <table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table>
dei Security Exchange Name
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<div style="font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: 'times new roman'; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;">1. Nature of the Business </div></div></div><div style="text-indent: 4%; font-family: times new roman; font-size: 10pt; margin-top: 6pt; margin-bottom: 0pt;">Praxis Precision Medicines, Inc. (&#8220;Praxis&#8221; or the &#8220;Company&#8221;) is a clinical-stage biopharmaceutical company translating genetic insights into the development of therapies for central nervous system (&#8220;CNS&#8221;) disorders characterized by neuronal imbalance. The Company has established a broad portfolio, including five disclosed programs across multiple CNS disorders, including depression, epilepsy, movement disorders and pain syndromes, with three clinical-stage product candidates. The Company&#8217;s most advanced programs, <div style="white-space: nowrap; letter-spacing: 0px; top: 0px;;display:inline;">PRAX-114</div> and <div style="white-space: nowrap; letter-spacing: 0px; top: 0px;;display:inline;">PRAX-944,</div> are currently in <div style="letter-spacing: 0px; top: 0px;;display:inline;"><div style="letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-family: 'times new roman'; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">Phase 2<div style="letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div></div></div>development. <div style="white-space: nowrap; letter-spacing: 0px; top: 0px;;display:inline;">PRAX-114</div> is being developed for the treatment of major depressive disorder and perimenopausal depression, and <div style="white-space: nowrap; letter-spacing: 0px; top: 0px;;display:inline;">PRAX-944</div> is a selective small molecule inhibitor of <div style="white-space: nowrap; letter-spacing: 0px; top: 0px;;display:inline;">T-type</div> calcium channels for the treatment of essential tremor. The Company <div style="letter-spacing: 0px; top: 0px;;display:inline;">plans</div>&#160;to continue to discover and develop additional product candidates and expand into additional therapeutic areas.</div><div style="text-indent: 4%; font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="letter-spacing: 0px; top: 0px;;display:inline;"><div style="letter-spacing: 0px; top: 0px;;display:inline;">Praxis was incorporated in 2015 and commenced operations in 2016. The Company has funded its operations primarily with proceeds from the issuance of convertible debt, Series A redeemable convertible preferred stock (the &#8220;Series A Preferred Stock&#8221;), Series B redeemable convertible preferred stock (the &#8220;Series B Preferred Stock&#8221;), Series <div style="white-space: nowrap; letter-spacing: 0px; top: 0px;;display:inline;">B-1</div> redeemable convertible preferred stock (the &#8220;Series <div style="white-space: nowrap; letter-spacing: 0px; top: 0px;;display:inline;">B-1</div> Preferred Stock&#8221;), Series C redeemable convertible preferred stock (the &#8220;Series C Preferred Stock&#8221;) and Series <div style="white-space: nowrap; letter-spacing: 0px; top: 0px;;display:inline;">C-1</div> redeemable convertible preferred stock (the &#8220;Series <div style="white-space: nowrap; letter-spacing: 0px; top: 0px;;display:inline;">C-1</div> Preferred Stock&#8221;) (the Series A Preferred Stock, Series B Preferred Stock, Series <div style="white-space: nowrap; letter-spacing: 0px; top: 0px;;display:inline;">B-1</div> Preferred Stock, Series C Preferred Stock and Series <div style="white-space: nowrap; letter-spacing: 0px; top: 0px;;display:inline;">C-1</div> Preferred Stock are collectively referred to as the &#8220;Preferred Stock&#8221;). From inception through September&#160;30, 2020, the Company raised </div></div>$210.7&#160;million in aggregate cash proceeds from these transactions, net of issuance costs.</div><div style="text-indent: 4%; font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;">On October&#160;8, 2020, the board of directors and the Company&#8217;s stockholders approved a <div style="white-space: nowrap; letter-spacing: 0px; top: 0px;;display:inline;"><div style="white-space: nowrap; letter-spacing: 0px; top: 0px;;display:inline;">one-for-2.14</div></div> reverse stock split. Effective on October&#160;8, 2020, the reverse stock split impacted the Company&#8217;s issued and outstanding shares of common stock. Stockholders entitled to fractional shares as a result of the reverse stock split will receive a cash payment in lieu of receiving fractional shares. All shares of common stock, per share amounts, aggregate par value and additional <div style="white-space: nowrap; letter-spacing: 0px; top: 0px;;display:inline;">paid-in</div> capital amounts for all periods presented in the accompanying condensed consolidated financial statements and related notes have been retroactively adjusted, where applicable, to reflect the reverse stock split. Shares of common stock underlying outstanding stock options and other equity instruments were proportionately reduced and the respective exercise prices were proportionately increased, as applicable, in accordance with the terms of the agreements governing such securities. The respective conversion prices of the Preferred Stock were proportionately increased. The number of shares of common stock authorized for issuance and the per share par value of common stock were not adjusted as a result of the reverse stock split.</div><div style="text-indent: 4%; font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: 'times new roman'; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">On October&#160;20, 2020, the Company completed its initial public offering (&#8220;IPO&#8221;), in which the Company issued and sold 11,500,000 shares of its common stock at a public offering price of $19.00 per share, including 1,500,000 shares of common stock sold pursuant to the underwriters&#8217; exercise of their option to purchase additional shares of common stock, for aggregate gross proceeds of $218.5&#160;million. The Company raised approximately $199.9&#160;million in net proceeds after deducting underwriting discounts and commissions and offering expenses payable by the Company. Upon the closing of the IPO, all of the outstanding shares of the Company&#8217;s Preferred Stock automatically converted into 25,067,977 shares of common stock. On October&#160;20, 2020, in connection with the closing of the IPO, the <div style="letter-spacing: 0px; top: 0px;;display:inline;">Company filed its</div>&#160;Amended and Restated Certificate of Incorporation&#160;<div style="letter-spacing: 0px; top: 0px;;display:inline;">which provides that<div style="display:inline;">&#160;</div></div>the<div style="display:inline;">&#160;</div>authorized capital stock of the Company consists of 150,000,000 shares of common stock and 10,000,000 shares of undesignated preferred stock, both with a par value of $0.0001 per share. </div></div><div style="text-indent: 4%; font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: 'times new roman'; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including but not limited to, risks associated with completing preclinical studies and clinical trials, receiving regulatory approvals for product candidates, development by competitors of new biopharmaceutical products, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Programs currently under development will require significant additional research and development efforts, including preclinical 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. Even if the Company&#8217;s product development efforts are successful, it is uncertain when, if ever, the Company will realize revenue from product sales. </div></div><div style="font-size: 1px; margin-top: 18px; margin-bottom: 0px;"><div style="font-size: 1px; letter-spacing: 0px; top: 0px;;display:inline;">&#160;</div></div><div style="font-family: times new roman; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;"><div style="font-family: 'times new roman'; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;"><div style="font-weight:bold;display:inline;"><div style="font-style:italic;display:inline;;font-style:italic;display:inline;">Liquidity </div></div></div></div><div style="text-indent: 4%; font-family: times new roman; font-size: 10pt; margin-top: 6pt; margin-bottom: 0pt;">In accordance with the Financial Accounting Standards Board (&#8220;FASB&#8221;) Accounting Standards Update (&#8220;ASU&#8221;) <div style="white-space: nowrap; letter-spacing: 0px; top: 0px;;display:inline;">2014-15,</div> <div style="font-style:italic;display:inline;;font-style:italic;display:inline;">Disclosure of Uncertainties about an Entity&#8217;s Ability to Continue as a Going Concern (Subtopic <div style="white-space: nowrap; letter-spacing: 0px; top: 0px;;display:inline;">205-40)</div></div>, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company&#8217;s ability to continue as a going concern within one year after the date that these condensed consolidated financial statements are issued.</div><div style="text-indent: 4%; font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: 'times new roman'; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">The Company has incurred recurring losses since its inception, including net losses of $36.1&#160;million and $28.1&#160;million for the nine months ended September&#160;30, 2020 and 2019, respectively. In addition, as of September&#160;30, 2020, the Company had an accumulated deficit of $123.3&#160;million. The Company expects to continue to generate operating losses for the foreseeable future. </div></div><div style="text-indent: 4%; font-family: times new roman; font-size: 10pt; margin-top: 12pt; margin-bottom: 0pt;"><div style="font-family: 'times new roman'; font-size: 10pt; letter-spacing: 0px; top: 0px;;display:inline;">The Company previously identified conditions and events that raised substantial doubt about its ability to continue as a going concern. As a result of the completion of its IPO, the Company expects that its cash and cash equivalents as of September&#160;30, 2020 of $114.8&#160;million, in addition to the net proceeds of $199.9&#160;million from its IPO, will be sufficient to fund the operating expenses and capital expenditure requirements necessary to advance its research efforts and clinical trials for at least one year from the date of issuance of these condensed consolidated financial statements. The future viability of the Company is dependent on its ability to raise additional capital to finance its operations. The Company&#8217;s inability to raise capital as and when needed could have a negative impact on its financial condition and ability to pursue its business strategies. There can be no assurance that the current operating plan will be achieved or that additional funding will be available on terms acceptable to the Company, or at all. </div></div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table>

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