ORGANOVO HOLDINGS INC
For the period ended Dec 31, 2024. Filed Feb 19, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2024 · Filed Feb 19, 2025
VIVS$0.14+0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0000950170-24-124044
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-31; filed 2025-02-19.
0000950170-25-022778
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 78 previous paragraphs and 76 current paragraphs.
51 unchanged; 23 reworded; 2 added; 4 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (2)
Current report
On January 16, 2025, the Staff provided a notice to us (the “Nasdaq Notice”) that we had not regained compliance with Rule 5550(a)(2) and were not eligible for a second 180 calendar day compliance period as we did not comply with the requirements for initial listing on the Nasdaq Capital Market. The Nasdaq Notice further indicated that, unless we timely requested a hearing before a Hearings Panel (the “Panel”), the Company’s common stock would be subject to delisting. We timely requested a hearing, which automatically stayed any delisting or suspension action pending the hearing and the expiration of any extension period granted by the Panel following the hearing. In that regard, pursuant to the Nasdaq Listing Rules, the Panel has the discretion to grant a further extension not to exceed July 15, 2025. Following the hearing request, our common stock continues to be listed on the Nasdaq Capital Market under the symbol “ONVO.”
Current report
Comparison of the nine months ended December 31, 2024 and 2023
Removed paragraphs (4)
Previous report
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have been provided with an initial period of 180 calendar days, or until January 14, 2025, to regain compliance. In order to regain compliance with the minimum bid price requirement, the closing bid price of our common stock must be at least $1 per share for a minimum of ten consecutive business days during this 180-day period. The Notice provides that the Nasdaq staff will provide written confirmation to us if we regain compliance with Rule 5550(a)(2).
Previous report
If we do not regain compliance with Rule 5550(a)(2) by January 14, 2025, we may be eligible for an additional compliance period of 180 calendar days. To qualify, we would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and would need to provide written notice to Nasdaq of our intention to cure the bid price deficiency during the second compliance period. However, if it appears to the Nasdaq staff that we will not be able to cure the deficiency, or we are otherwise not eligible, Nasdaq would notify us that our securities will be subject to delisting. In the event of such a notification, we may appeal the Nasdaq staff’s determination to delist our securities, but there can be no assurance the Nasdaq staff would grant any request for continued listing.
Previous report
Comparison of the six months ended September 30, 2024 and 2023
Reworded paragraphs (23)
Previous wording
In February 2024, we formed our Mosaic Cell Sciences division (“Mosaic”) to serve as a key source of certain of the primary human cells we utilize in our research and development efforts. We believe Mosaic can help us optimize our supply chain, reduce operating expenses related to cell sourcing and procurement and ensure that the cellular raw materials we use are of the highest quality and are derived from tissues that are ethically sourced in full compliance with state and federal guidelines. Mosaic provides us with qualified human cells for use in its clinical research and development programs. In addition to supplying us with primary human cells, Mosaic offers human cells for sale to life science customers, both directly and through distribution partners, which we expect to offset costs and over time become a profit center that offsets our overall R&D spending.
Current wording
In February 2024, we formed our Mosaic Cell Sciences division (“Mosaic”) to serve as a key source of certain of the primary human cells we utilize in our research and development efforts. Mosaic provided us with qualified human cells for use in its clinical research and development programs. In addition to supplying us with primary human cells, Mosaic offered human cells for sale to life science customers, both directly and through distribution partners, which we expected to offset costs and over time become a profit center that offset our overall R&D spending. However, Mosaic ended its operations during the third quarter of fiscal 2025 and any remaining saleable inventory was internally transferred to R&D at that time.
Previous wording
On July 18, 2024, we received a written notice (the “Notice”) from the Listing Qualifications Staff of the Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based upon the closing bid price of our common stock for the last 30 consecutive business days, we no longer meet the requirement to maintain a minimum bid price of $1 per share, as set forth in Nasdaq Listing Rule 5550(a)(2) (“Rule 5550(a)(2)”).
Current wording
On July 18, 2024, we received a written notice (the “Notice”) from the Listing Qualifications Staff (the "Staff") of the Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based upon the closing bid price of our common stock for the last 30 consecutive business days, we no longer meet the requirement to maintain a minimum bid price of $1 per share, as set forth in Nasdaq Listing Rule 5550(a)(2) (“Rule 5550(a)(2)”). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were provided an initial period of 180 calendar days, or until January 14, 2025, to regain compliance.
Previous wording
The Notice had no immediate effect on the listing or trading of our common stock and our common stock will continue to trade on the Nasdaq Capital Market under the symbol “ONVO”. We intend to monitor the closing bid price of our common stock and consider our available options if our common stock does not trade at a level likely to result in us regaining compliance with Rule 5550(a)(2) by January 14, 2025, including effecting a reverse stock split, which would be subject to the prior approval of our stockholders.
Current wording
We intend to present our plan to the Panel at the hearing on February 27, 2025, which compliance plan is expected to include conducting a reverse stock split if necessary to regain compliance with Rule 5550(a)(2). However, there can be no assurance that the Panel will grant a further extension or that we will ultimately regain compliance with all applicable requirements for continued listing on the Nasdaq Capital Market. We intend to monitor the closing bid price of our common stock and consider our available options if our common stock does not trade at a level likely to result in us regaining compliance with Rule 5550(a)(2) by January 14, 2025, including effecting a reverse stock split, which would be subject to the prior approval of our stockholders.
Previous wording
At our 2024 annual meeting of our stockholders to be held on November 20, 2024, we are asking our stockholders to approve an amendment to our Certificate of Incorporation, as amended, to effect, in the sole discretion of our Board of Directors (our “Board”) at any time on or before November 20, 2025, a reverse split of our common stock at a ratio to be determined by the Board within a range of 1-to-5 to 1-to-20 (or any number in between).
Current wording
At our 2024 annual meeting of our stockholders held on November 20, 2024, our stockholders approved an amendment to our Certificate of Incorporation, as amended, to effect, in the sole discretion of our Board of Directors (our “Board”) at any time on or before November 20, 2025, a reverse split of our common stock at a ratio to be determined by the Board within a range of 1-to-5 to 1-to-20 (or any number in between).
Previous wording
For the three months ended September 30, 2024 and 2023, total revenue was less than $0.1 million and zero, respectively. Royalty revenue is related to sales-based royalties from licensing intellectual property. The increase in the second fiscal quarter royalty revenue year over year relates to overestimating royalty revenue in the first fiscal quarter of 2023, resulting in an adjustment to actual sales. We expect quarterly sales of royalty bearing products by the licensee to remain consistent with the sales in the second quarter of fiscal 2025 going forward. Product revenue is related to the sale of human cells developed by Mosaic. The first two quarters of fiscal 2025 are the first two quarters of product sales since the inception of Mosaic. We expect product revenue to increase going forward.
Current wording
For the three months ended December 31, 2024 and 2023, total revenue was less than $0.1 million. Royalty revenue is related to sales-based royalties from licensing intellectual property. The increase in the third fiscal quarter royalty revenue year over year relates to overestimating royalty revenue in the second quarter of fiscal 2023, resulting in an adjustment to actual sales. Going forward, we expect quarterly sales of royalty bearing products by the licensee to remain consistent with the sales in the third quarter of fiscal 2025. Product revenue is related to the sale of human cells developed by Mosaic. As Mosaic's commercial operations ended during the third quarter of fiscal 2025, there will be no product revenue going forward.
Previous wording
For the three months ended September 30, 2024, total research and development expenses were $1.0 million, a decrease of $0.4 million, or approximately 26%, from the prior year period. Our average full-time research and development staff decreased from an average of eighteen full-time employees for the three months ended September 30, 2023 to an average of fourteen full-time employees for the three months ended September 30, 2024. Our operations for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 resulted in a $0.1 million decrease in facilities costs, and a $0.4 million decrease in material related costs, offset by a $0.1 million increase in personnel related costs which includes stock-based compensation. Going forward, we intend to continue to advance the clinical drug development of FXR314 and expect an associated increase in expenses.
Current wording
For the three months ended December 31, 2024, total research and development expenses were $1.8 million, an increase of $0.4 million, or approximately 24%, from the prior year period. Our operations for the three months ended December 31, 2024 as compared to the three months ended December 31, 2023 resulted in a $0.4 million increase in material related costs. Of the $0.4 million increase in material costs, $0.6 million was due to the write-off and transfer of Mosaic's inventory to R&D, which was offset by a $0.2 decrease in lab supplies costs. Our fiscal 2025 operations also resulted in a $0.1 million increase in consulting expenses, which was offset by a $0.1 million decrease in personnel related costs due to a lower headcount compared to the prior year period. Going forward, we intend to continue to advance the clinical drug development of FXR314 and our 3D models for target discovery and drug development.
Previous wording
For the three months ended September 30, 2024, total selling, general and administrative expenses were approximately $1.7 million, a decrease of $1.1 million, or approximately 41%, compared to the prior year period. Our average full-time general and administrative staff of five employees remained the same for each of the three months ended September 30, 2024 and 2023. However, in fiscal 2024 one of the employees was our former General Counsel who was an executive officer and was included in a reduction in force during the second quarter of fiscal 2024. Subsequently, a sales associate for Mosaic was hired in the fourth quarter of fiscal 2024. Our operations for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 resulted in a $0.8 million decrease in personnel related expenses which includes stock-based compensation, and a $0.3 million decrease in legal and other corporate costs, which includes a $0.1 million decrease in legal expenses, a $0.1 million decrease in audit and tax expense, and a $0.1 million decrease in investor relations expenses.
Current wording
For the three months ended December 31, 2024, total selling, general and administrative expenses were approximately $1.7 million, a decrease of $0.5 million, or approximately 24%, compared to the prior year period. Our average full-time general and administrative staff of four employees remained the same for each of the three months ended December 31, 2024 and 2023. Our operations for the three months ended December 31, 2024 as compared to the three months ended December 31, 2023 resulted in a $0.1 million decrease in personnel related expenses which includes stock-based compensation, and a $0.4 million decrease in legal and other corporate costs, which was mostly related to a decrease in investor relations costs.
Previous wording
The following table summarizes our results of operations for the six months ended September 30, 2024 and 2023 (in thousands, except %):
Current wording
The following table summarizes our results of operations for the nine months ended December 31, 2024 and 2023 (in thousands, except %):
Previous wording
For each of the six months ended September 30, 2024 and 2023, total revenue was $0.1 million. Royalty revenue is related to sales-based royalties from licensing intellectual property. The decrease in royalty revenue year over year relates to a decrease in sales of royalty bearing products by the licensee in fiscal 2025. We expect quarterly sales of royalty bearing products by the licensee to remain consistent with the sales in the second quarter of fiscal 2025 going forward. Product revenue is related to the sale of human cells developed by Mosaic. The first two quarters of fiscal 2025 are the first two quarters of product sales since the inception of Mosaic. We expect product revenue to increase going forward.
Current wording
For each of the nine months ended December 31, 2024 and 2023, total revenue was $0.1 million. Royalty revenue is related to sales-based royalties from licensing intellectual property. The decrease in royalty revenue year over year relates to a decrease in sales of royalty bearing products by the licensee in fiscal 2025. Going forward, we expect annual sales of royalty bearing products by the licensee to remain consistent with the sales in fiscal 2025. Product revenue is related to the sale of human cells developed by Mosaic. As Mosaic's commercial operations ended during the third quarter of fiscal 2025, there will be no product revenue going forward.
Previous wording
For the six months ended September 30, 2024 and 2023, total cost of revenues was less than $0.1 million and zero, respectively, and is related to the sale of finished goods inventory by Mosaic.
Current wording
For the nine months ended December 31, 2024 and 2023, total cost of revenues was less than $0.1 million and zero, respectively, and is related to the sale of finished goods inventory by Mosaic.
Previous wording
The following table summarizes our research and development expenses for the six months ended September 30, 2024 and 2023 (in thousands, except %):
Current wording
The following table summarizes our research and development expenses for the nine months ended December 31, 2024 and 2023 (in thousands, except %):
Previous wording
For the six months ended September 30, 2024, total research and development expenses were $2.4 million, a decrease of $0.6 million, or approximately 20% from the prior year period. Our average full-time research and development staff decreased from an average of eighteen full-time employees for the six months ended September 30, 2023 to an average of fourteen full-time employees for the six months ended September 30, 2024. Our operations for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023 resulted in a $0.1 million decrease in personnel related costs, a $0.4 million decrease in material related costs, and a $0.2 million decrease in facilities costs, offset by a $0.1 million increase in consulting expenses. Going forward, we intend to continue to advance the clinical drug development of FXR314 and expect an associated increase in expenses.
Current wording
For the nine months ended December 31, 2024, total research and development expenses were $4.2 million, a decrease of $0.3 million, or approximately 6% from the prior year period. Our average full-time research and development staff decreased from an average of eighteen full-time employees for the nine months ended December 31, 2023 to an average of fourteen full-time employees for the nine months ended December 31, 2024. Our operations for the nine months ended December 31, 2024 as compared to the nine months ended December 31, 2023 resulted in a $0.1 million decrease in material related costs. Of the $0.1 million decrease in material costs, a $0.8 million increase was due to the write-off and transfer of Mosaic's inventory to R&D, which was offset by a $0.9 decrease in lab supplies costs. Our fiscal 2025 operations also resulted in a $0.2 million decrease in personnel related costs which included stock-based compensation, , and a $0.2 million decrease in facilities costs, offset by a $0.2 million increase in consulting expenses. Going forward, we intend to continue to advance the clinical drug development of FXR314 and our 3D models for target discovery and drug development.
Previous wording
The following table summarizes our selling, general and administrative expenses for the six months ended September 30, 2024 and 2023 (in thousands, except %):
Current wording
The following table summarizes our selling, general and administrative expenses for the nine months ended December 31, 2024 and 2023 (in thousands, except %):
Previous wording
For the six months ended September 30, 2024, total selling, general and administrative expenses were approximately $3.7 million, a decrease of $1.7 million, or approximately 32%, compared to the prior year period. Our average full-time general and administrative staff of five employees remained the same for each of the six months ended September 30, 2024 and 2023. However, in fiscal 2024 one of the employees was our former General Counsel who was an executive officer and was included in a reduction in force during the second quarter of fiscal 2024. Subsequently, a sales associate for Mosaic was hired in the fourth quarter of fiscal 2024. Our operations for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023 resulted in a $1.0 million decrease in personnel related expenses which includes stock-based compensation, a $0.2 million decrease in consulting expenses, a $0.5 million decrease in legal and other corporate costs, which includes a $0.4 million decrease in legal expenses, and a $0.2 million decrease in audit and tax expense, offset by a $0.1 million increase in investor relations expenses.
Current wording
For the nine months ended December 31, 2024, total selling, general and administrative expenses were approximately $5.4 million, a decrease of $2.3 million, or approximately 29%, compared to the prior year period. There was a reduction in force event in fiscal 2024 and one of the affected employees was our former General Counsel who was an executive officer and a highly compensated employee. The reduction in force event resulted in significant severance expenses in fiscal 2024 and lower personnel costs in fiscal 2025. Our operations for the nine months ended December 31, 2024 as compared to the nine months ended December 31, 2023 resulted in a $1.2 million decrease in personnel related expenses which includes stock-based compensation, a $0.2 million decrease in consulting expenses, and a $0.9 million decrease in legal and other corporate costs, which includes a $0.4 million decrease in legal expenses, a $0.2 million decrease in audit and tax expense, and a $0.3 million decrease in investor relations expenses.
Previous wording
Other income was $0.1 million and $0.3 million for the six months ended September 30, 2024 and 2023, respectively, which was related to interest income.
Current wording
Other income was $0.1 million and $0.4 million for the nine months ended December 31, 2024 and 2023, respectively, which was related to interest income.
Previous wording
The accompanying consolidated financial statements have been prepared on the basis that we are a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. At September 30, 2024, we had cash and cash equivalents of approximately $3.2 million, restricted cash of approximately $0.1 million and an accumulated deficit of approximately $345.6 million. The restricted cash was pledged as collateral for a letter of credit that we are required to maintain as a security deposit under the terms of the lease agreement for our facilities. We had negative cash flow from operations of approximately $5.6 million during the six months ended September 30, 2024. At March 31, 2024, we had cash and cash equivalents of approximately $2.9 million, restricted cash of approximately $0.1 million and an accumulated deficit of approximately $339.7 million.
Current wording
The accompanying consolidated financial statements have been prepared on the basis that we are a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. At December 31, 2024, we had cash and cash equivalents of approximately $1.2 million, restricted cash of approximately $0.1 million and an accumulated deficit of approximately $349.0 million. The restricted cash was pledged as collateral for a letter of credit that we are required to maintain as a security deposit under the terms of the lease agreement for our facilities. We had negative cash flow from operations of approximately $7.4 million during the nine months ended December 31, 2024. At March 31, 2024, we had cash and cash equivalents of approximately $2.9 million, restricted cash of approximately $0.1 million and an accumulated deficit of approximately $339.7 million.
Previous wording
At September 30, 2024, we had total current assets of approximately $4.8 million and current liabilities of approximately $2.4 million, resulting in working capital of $2.4 million. At March 31, 2024, we had total current assets of approximately $3.9 million and current liabilities of approximately $1.9 million, resulting in working capital of $2.0 million.
Current wording
At December 31, 2024, we had total current assets of approximately $2.1 million and current liabilities of approximately $2.9 million, resulting in negative working capital of $0.8 million. At March 31, 2024, we had total current assets of approximately $3.9 million and current liabilities of approximately $1.9 million, resulting in working capital of $2.0 million.
Previous wording
The following table summarizes the primary sources and uses of cash for the six months ended September 30, 2024 and 2023 (in thousands):
Current wording
The following table summarizes the primary sources and uses of cash for the nine months ended December 31, 2024 and 2023 (in thousands):
Previous wording
Net cash used in operating activities for the six months ended September 30, 2024, was approximately $5.6 million as compared to $8.5 million used in operating activities for the six months ended September 30, 2023. This $2.9 million decrease in operating cash usage can be attributed primarily to the $2.0 million cash payment in fiscal 2024 for acquired in-process research and development assets.
Current wording
Net cash used in operating activities for the nine months ended December 31, 2024, was approximately $7.4 million as compared to $12.0 million used in operating activities for the nine months ended December 31, 2023. This $4.6 million decrease in operating cash usage can be attributed primarily to a strategic effort to decrease selling, general, and administrative expenses in fiscal 2025, as well as the $2.0 million cash payment in fiscal 2024 for acquired in-process research and development assets.
Previous wording
Net cash provided by investing activities was less than $0.1 million for the six months ended September 30, 2024, which consisted of interest income. Net cash provided by investing activities was $0.8 million for the six months ended September 30, 2023, which consisted of the purchases of investments of $7.9 million, the maturities of investments of $8.0 million, the liquidation of equity securities of $0.7 million, and fixed asset purchases of less than $0.1 million.
Current wording
Net cash provided by investing activities was less than $0.1 million for the nine months ended December 31, 2024, which consisted of the purchases of investments of $2.5 million and the maturities of investments of $2.5 million. Net cash provided by investing activities was $0.8 million for the nine months ended December 31, 2023, which consisted of the purchases of investments of $9.9 million, the maturities of investments of $10.0 million, the liquidation of equity securities of $0.7 million, and fixed asset purchases of less than $0.1 million.
Previous wording
Net cash provided by financing activities was $5.9 million and zero for the six months ended September 30, 2024 and 2023, respectively. Financing activities consisted of the sale of common stock through at-the-market (“ATM”) share offerings and a public offering of common stock and accompanying common warrants and pre-funded warrants. Refer to “Operations funding requirements” below for further information regarding financing activities.
Current wording
Net cash provided by financing activities was $5.7 million and $1.2 million for the nine months ended December 31, 2024 and 2023, respectively. Financing activities consisted of the sale of common stock through at-the-market (“ATM”) share offerings and a public offering of common stock and accompanying common warrants and pre-funded warrants. Refer to “Operations funding requirements” below for further information regarding financing activities.
Previous wording
Our ongoing cash requirements include research and development expenses, compensation for personnel, consulting fees, legal and accounting support, insurance premiums, facilities, maintenance of our intellectual property portfolio, license and collaboration agreements, listing on the Nasdaq Capital Market, and other miscellaneous fees to support our operations. We expect our total operating expense for the fiscal year ending March 31, 2025 to be between $13.0 million and $15.0 million. Based on our current operating plan and available cash resources, we will need substantial additional funding to support future operating activities. We have concluded that the prevailing conditions and ongoing liquidity risks faced by us raise substantial doubt about our ability to continue as a going concern for at least one year following the date these financial statements are issued. The accompanying consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.
Current wording
Our ongoing cash requirements include research and development expenses, compensation for personnel, consulting fees, legal and accounting support, insurance premiums, facilities, maintenance of our intellectual property portfolio, license and collaboration agreements, listing on the Nasdaq Capital Market, and other miscellaneous fees to support our operations. We expect our total operating expense for the fiscal year ending March 31, 2025 to be between $12.0 million and $14.0 million. Based on our current operating plan and available cash resources, we will need substantial additional funding to support future operating activities. We have concluded that the prevailing conditions and ongoing liquidity risks faced by us raise substantial doubt about our ability to continue as a going concern for at least one year following the date these financial statements are issued. The accompanying consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.
Previous wording
During the six months ended September 30, 2024, we issued 1,352,600 shares of common stock in ATM offerings for net proceeds of approximately $1.7 million, all of which were sold pursuant to the 2024 Shelf. As of September 30, 2024, we have sold an aggregate of 1,389,002 shares of common stock in ATM offerings under the 2024 ATM Prospectus, with gross proceeds of approximately $1.8 million and net proceeds of approximately $1.8 million. As of September 30, 2024, there was approximately $100.0 million available for future offerings under the 2024 Shelf, and approximately $0.8 million available for future offerings through our ATM program under the 2024 ATM Prospectus.
Current wording
During the three and nine months ended December 31, 2024, we issued 52,628 and 1,405,228 shares of common stock in ATM offerings, respectively, for net proceeds of approximately less than $0.1 million and $1.7 million, respectively, all of which were sold pursuant to the 2024 Shelf. As of December 31, 2024, we have sold an aggregate of 1,441,630 shares of common stock in ATM offerings under the 2024 ATM Prospectus, with gross proceeds of approximately $1.8 million and net proceeds of approximately $1.8 million. As of December 31, 2024, there was approximately $100.0 million available for future offerings under the 2024 Shelf, and approximately $0.8 million available for future offerings through our ATM program under the 2024 ATM Prospectus.