SEC Filing | ATAI Life Sciences N.V.

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10-Q/A

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM

10-Q/A

(Amendment No.1)

(Mark One)

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

For the quarterly period ended June 30, 2021

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

For the transition period from

Commission File Number:

001-40493

ATAI Life Sciences N.V.

(Exact name of registrant as specified in its charter)


The Netherlands		Not Applicable
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

ATAI Life Sciences N.V. c/o Mindspace Krausenstraße 9-10 Berlin, Germany		Not Applicable
(Address of principal executive offices)		(Zip Code)

+49 89 2153 9035

(Registrant’s telephone number, including area code)

N/A

(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
Common shares, par value €0.10 per share	ATAI	The Nasdaq Stock Market LLC ( 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, 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.

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

August 11,

2021, the registrant had 154,819,776 common shares, par value €0.10 per share, outstanding.

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EXPLANATORY NOTE

This Amendment No. 1 to the Quarterly Report on Form 10-Q/A (the “Amendment”) of ATAI Life Sciences N.V. (the “Company”) amends the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021 (the “Original Filing”) which was filed with the Securities and Exchange Commission on August 16, 2021. The Company is filing this Amendment to file Exhibits 101 and 104 relating to inline XBRL requirements in accordance with Rule 405 of Regulation S-T, which had been omitted from the Original Filing in accordance with the 30-day grace period provided under Regulation S-T for the first quarterly period in which inline XBRL is required.

Additionally, in connection with the filing of this Amendment, the Company is including updated certifications from its chief executive officer and chief financial officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002.

This Amendment does not reflect events occurring after the Original Filing. Except for the items described above, this Amendment continues to speak as of the date of the Original Filing, and does not modify, amend or update any other item or disclosures in the Original Filing.

Table of Contents

ATAI Life Sciences N.V.

FORM

10-Q

Table of Contents


		Page
Forward-Looking Statements			1
PART I. FINANCIAL INFORMATION			2
Item 1.	Financial Statements (Unaudited)		2
	Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020		2
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2021 and 2020		3
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2021 and 2020		4
	Condensed Consolidated Statements of Redeemable Convertible Noncontrolling Interests and Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2021 and 2020		5
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020		6
	Notes to Condensed Consolidated Financial Statements		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		51
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		77
Item 4.	Controls and Procedures		78
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		80
Item 1A.	Risk Factors		81
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		82
Item 3.	Defaults Upon Senior Securities		83
Item 4.	Mine Safety Disclosures		83
Item 5.	Other Information		83
Item 6.	Exhibits		83
	Signatures		85

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CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q/A (this “Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements contained in this Quarterly Report other than statements of historical fact, including statements regarding our future operating results and financial position, the success, cost and timing of development of our product candidates, including the progress of preclinical and clinical trials, the commercialization of our current product candidates and any other product candidates we may identify and pursue, if approved, including our ability to successfully build a specialty sales force and commercial infrastructure to market our current product candidates and any other product candidates we may identify and pursue, the timing of and our ability to obtain and maintain regulatory approvals, our business strategy and plans, potential acquisitions, and the plans and objectives of management for future operations and capital expenditures, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “potentially,” “preliminary,” “likely,” and similar expressions are intended to identify forward-looking statements.

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including without limitation: we are a clinical-stage biopharmaceutical company and have incurred significant losses since our inception, and we anticipate that we will continue to incur significant losses for the foreseeable future; we will require substantial additional funding to achieve our business goals, and if we are unable to obtain this funding when needed and on acceptable terms, we could be forced to delay, limit or terminate our product development efforts; our limited operating history may make it difficult to evaluate the success of our business and to assess our future viability; we have never generated revenue and may never be profitable; our product candidates contain controlled substances, the use of which may generate public controversy; clinical and preclinical development is uncertain, and our preclinical programs may experience delays or may never advance to clinical trials; we currently rely on qualified therapists working at third-party clinical trial sites to administer certain of our product candidates in our clinical trials and we expect this to continue upon approval, if any, of our current or future product candidate, and if third-party sites fail to recruit and retain a sufficient number of therapists or effectively manage their therapists, our business, financial condition and results of operations would be materially harmed; we cannot give any assurance that any of our product candidates will receive regulatory approval, which is necessary before they can be commercialized; research and development of drugs targeting the central nervous system, or CNS, is particularly difficult, and it can be difficult to predict and understand why a drug has a positive effect on some patients but not others; we face significant competition in an environment of rapid technological and scientific change; third parties may claim that we are infringing, misappropriating or otherwise violating their intellectual property rights, the outcome of which would be uncertain and may prevent or delay our development and commercialization efforts; a change in our effective place of management may increase our aggregate tax burden; we identified material weaknesses in connection with our internal control over financial reporting; and a pandemic, epidemic, or outbreak of an infectious disease, such as the

COVID-19

pandemic, may materially and adversely affect our business, including our preclinical studies, clinical trials, third parties on whom we rely, our supply chain, our ability to raise capital, our ability to conduct regular business and our financial results. Other risk factors include the important factors described in the section titled “Risk Factors” in our final prospectus dated June 17, 2021, filed with the Securities and Exchange Commission (“SEC”) pursuant to Rule 424(b) under the Securities Act, that may cause our actual results, performance or achievements to differ materially and adversely from those expressed or implied by the forward-looking statements.

Any forward-looking statements made herein speak only as of the date of this Quarterly Report, and you should not rely on forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, performance, or achievements reflected in the forward-looking statements will be achieved or will occur. Except as required by applicable law, we undertake no obligation to update any of these forward-looking statements for any reason after the date of this Quarterly Report on Form

10-Q

or to conform these statements to actual results or revised expectations.

GENERAL

Unless the context otherwise requires, all references in this Quarterly Report to “we,” “us,” “our,” “ATAI” or the “Company” refer to ATAI Life Sciences N.V. and its consolidated subsidiaries.

All reports we file with the SEC are available for download free of charge via the Electronic Data Gathering Analysis and Retrieval (EDGAR) System on the SEC’s website at www.sec.gov. We also make electronic copies of our reports available for download, free of charge, through our investor relations website at

ir.atai.life

as soon as reasonably practicable after filing such material with the SEC.

We may announce material business and financial information to our investors using our investor relations website at

ir.atai.life

. We therefore encourage investors and others interested in ATAI to review the information that we make available on our website, in addition to following our filings with the SEC, webcasts, press releases and conference calls. Information contained on our website is not part of this Quarterly Report.

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements (Unaudited)

ATAI LIFE SCIENCES N.V.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share and per share amounts)


	June 30,			December 31,
	2021			2020
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	453,622		$	97,246
Prepaid expenses and other current assets		3,964			2,076
Short term notes receivable - related party		—			226

Total current assets		457,586			99,548
Property and equipment, net		331			71
Deferred offering costs		—			1,575
Equity method investments		19,780			—
Other investments held at fair value		6,886			—
Other investments		16,107			8,044
Long term notes receivable		1,388			911
Long term notes receivable - related parties		3,194			1,060
Other assets		689			339

Total assets	$	505,961		$	111,548

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	6,202		$	3,083
Accrued liabilities		7,824			9,215
Deferred r evenue		120			—
Short-term notes payable		39			—

Total current liabilities		14,185			12,298
Contingent consideration liability - related parties		2,466			1,705
Convertible promissory notes - related parties, net of discounts and deferred issuance costs		1,176			1,199
Convertible promissory notes and derivative liability (including a related party convertible promissory note and derivative liability of $0 million and $0.3 million at June 30, 2021 and December 31, 2020, respectively )		—			978
Other liabilities		3,239			—

Total liabilities		21,066			16,180

Commitments and contingencies (Note 15)
Stockholders’ equity:
Common stock, €0.10 par value ($0.12 par value at June 30, 2021 and December 31, 2020, respectively); 750,000,000 and 173,116,704 shares authorized at June 30, 2021 and December 31, 2020, respectively; 154,819,776 and 114,735,712 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		17,299			13,372
Additional paid-in capital		691,382			261,626
Accumulated other comprehensive income (loss)		3,937			5,819
Accumulated deficit		(237,768	)		(189,995	)

Total stockholders’ equity attributable to ATAI Life Sciences N.V. stockholders		474,850			90,822
Noncontrolling interests		10,045			4,546

Total stockholders’ equity		484,895			95,368

Total liabilities and stockholders’ equity	$	505,961		$	111,548

See accompanying notes to the unaudited condensed consolidated financial statements

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ATAI LIFE SCIENCES N.V.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share and per share amounts)

(unaudited)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
License revenue	$	—		$	—		$	19,880		$	—
Operating expenses:
Research and development		16,026			2,854			21,611			4,998
Acquisition of in-process research and development		7,962			120			8,934			120
General and administrative		37,331			2,851			46,604			4,421

Total operating expenses		61,319			5,825			77,149			9,539

Loss from operations		(61,319	)		(5,825	)		(57,269	)		(9,539	)

Other income (expense), net:
Interest income		35			18			72			38
Change in fair value of contingent consideration liability - related parties		(911	)		(42	)		(660	)		(66	)
Change in fair value of short term notes receivable - related party		—			—			—			718
Change in fair value of convertible promissory notes		—			(1,260	)		—			(133	)
Change in fair value of derivative liability		—			—			41			—
Unrealized loss on other investments held at fair value		(5,460	)		—			(5,460	)		—
Unrealized gain on other investments		—			—			—			19,856
Loss on conversion of convertible promissory notes		(513	)		—			(513	)		—
Gain on consolidation of a variable interest entity		3,543			—			3,543			—
Other income (expense), net		(2,676	)		(37	)		(1,302	)		(119	)

Total other income (expense), net		(5,982	)		(1,321	)		(4,279	)		20,294

Net income (loss) before income taxes		(67,301	)		(7,146	)		(61,548	)		10,755
Provision for income taxes		(58	)		—			(64	)		—
Gain on dilution of equity method investment		16,923			—			16,923			—
Losses from investments in equity method investees, net of tax		(2,937	)		(9,811	)		(4,640	)		(11,831	)

Net loss		(53,373	)		(16,957	)		(49,329	)		(1,076	)
Net loss attributable to redeemable noncontrolling interests and noncontrolling interests		(4,912	)		(600	)		(1,556	)		(1,022	)

Net loss attributable to ATAI Life Sciences N.V. stockholders	$	(48,461	)	$	(16,357	)	$	(47,773	)	$	(54	)

Net loss per share attributable to ATAI Life Sciences N.V. stockholders — basic and diluted	$	(0.37	)	$	(0.18	)	$	(0.38	)	$	(0.00	)

Weighted average common shares outstanding attributable to ATAI Life Sciences N.V. stockholders — basic and diluted		132,265,075			90,709,312			125,797,732			90,709,312

See accompanying notes to the unaudited condensed consolidated financial statements

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ATAI LIFE SCIENCES N.V.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Amounts in thousands)

(unaudited)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Net loss	$	(53,373	)	$	(16,957	)	$	(49,329	)	$	(1,076	)
Other comprehensive loss:
Foreign currency translation adjustments, net of tax		2,110			784			(1,916	)		(106	)

Comprehensive income (loss)	$	(51,263	)	$	(16,173	)	$	(51,245	)	$	(1,182	)
Comprehensive income (loss) attributable to redeemable noncontrolling interests and noncontrolling interests		(4,912	)		(600	)		(1,556	)		(1,022	)
Foreign currency translation adjustments, net of tax attributable to noncontrolling interests		150			(20	)		(34	)		(7	)

Comprehensive loss attributable to redeemable noncontrolling interests and noncontrolling interests		(4,762	)		(620	)		(1,590	)		(1,029	)

Comprehensive income (loss) attributable to ATAI Life Sciences N.V. stockholders	$	(46,501	)	$	(15,553	)	$	(49,655	)	$	(153 )

See accompanying notes to the unaudited condensed consolidated financial statements

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ATAI LIFE SCIENCES N.V.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE NONCONTROLLING

INTERESTS AND STOCKHOLDERS’ EQUITY

(Amounts in thousands, except share and per share amounts)

(unaudited)


													Accumulated						Total
													Other						Stockholders’
	Redeemable							Additional		Share			Comprehensive						Equity Attributable to						Total
	Noncontrolling			Common Stock				Paid-In		Subscriptions			Income			Accumulated			ATAI Life Sciences N.V.			Noncontrolling			Stockholders’
	Interests			Shares		Amount		Capital		Receivable			(Loss)			Deficit			Stockholders			Interests			Equity
Balances at December 31, 2020	$	—			114,735,712	$	13,372	$	261,626	$	—		$	5,819		$	(189,995	)	$	90,822		$	4,546		$	95,368
Issuance of common shares, net of issuance costs of $4.9 million		—			15,552,688		1,881		162,497		(140,868	)		—			—			23,510			—			23,510
Issuance of common shares under the Hurdle Share Option Plan (see Note 12)		—			7,281,376		—		—		—			—			—			—			—			—
Issuance of noncontrolling interest		—			—		—		—		—			—			—			—			885			885
Stock-based compensation expense		—			—		—		212		—			—			—			212			—			212
Foreign currency translation adjustment, net of tax		—			—		—		—		—			(3,842	)		—			(3,842	)		(184	)		(4,026	)
Net income		—			—		—		—		—			—			688			688			3,356			4,044

Balances as of March 31, 2021	$	—			137,569,776	$	15,253	$	424,335	$	(140,868	)	$	1,977		$	(189,307	)	$	111,390		$	8,603		$	119,993

Settlement of issuance of common shares, net of issuance costs of $4.9 million		—			—		—		—		140,868			—			—			140,868			—			140,868
Issuance of common shares, net of issuance costs of $9.0 million		—			17,250,000		2,046		229,535		—			—			—			231,581			—			231,581
Issuance of noncontrolling interest		2,555			—		—		—		—			—			—			—			3,649			3,649
Stock-based compensation expense		—			—		—		37,512		—			—			—			37,512			—			37,512
Foreign currency translation adjustment, net of tax		—			—		—		—		—			1,960			—			1,960			150			2,110
Net income		(2,555	)		—		—		—		—			—			(48,461	)		(48,461	)		(2,357	)		(50,818	)

Balances as of June 30, 2021	$	—			154,819,776	$	17,299	$	691,382	$	—		$	3,937		$	(237,768	)	$	474,850		$	10,045		$	497,032


										Accumulated						Total
										Other						Stockholders’
	Redeemable							Additional		Comprehensive						Equity Attributable						Total
	Noncontrolling			Common Stock				Paid-In		Income			Accumulated			to ATAI Life Sciences N.V.			Noncontrolling			Stockholders’
	Interests			Shares		Amount		Capital		(Loss)			Deficit			Stockholders			Interests			Equity
Balances at December 31, 2019	$	142			90,709,312	$	10,510	$	69,819	$	(1,426	)	$	(20,152	)	$	58,751		$	887		$	59,638
Stock-based compensation expense		—			—		—		41		—			—			41			—			41
Foreign currency translation adjustment, net of tax		—			—		—		—		(903	)		—			(903	)		13			(890	)
Net income (loss)		(33	)		—		—		—		—			16,302			16,302			(389	)		15,913

Balances as of March 31, 2020	$	109			90,709,312	$	10,510	$	69,860	$	(2,329	)	$	(3,850	)	$	74,191		$	511		$	74,702

Stock-based compensation expense		—			—		—		41		—			—			41			—			41
Issuance of subsidiary shares in connection with the Columbia stock purchase agreement (Note 16)		—			—		—		120		—			—			120			—			120
Foreign currency translation adjustment, net of tax		—			—		—		—		804						804			(20	)		777
Net income (loss)		(109	)		—		—		—		—			(16,357	)		(16,357	)		(491	)		(16,848	)

Balances as of June 30, 2020	$	—		$	90,709,312	$	10,510	$	70,021	$	(1,525	)	$	(20,207	)	$	58,799		$	—		$	58,800

See accompanying notes to the unaudited condensed consolidated financial statements

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ATAI LIFE SCIENCES N.V.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(unaudited)


	Six Months Ended
	June 30,
	2021				2020
Cash flows from operating activities
Net loss	$	(49,329	)		$	(1,076	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		25				5
Amortization of debt discount		191				15
Change in fair value of contingent consideration liability- related parties		660				66
Change in fair value of short term notes receivable - related parties		—				(718	)
Change in fair value of convertible promissory notes		—				133
Change in fair value of derivative liability		(41	)			12
Change in fair value of warrant liability		40				—
Unrealized loss on other investments held at fair value		5,460				—
Unrealized gains on other investments		—				(19,856	)
Gain on dilution of equity method investment		(16,923	)			—
Loss on conversion of convertible notes		513				—
Gain on consolidation of a variable interest entity		(3,543	)			—
Losses from investments in equity method investees		4,641				11,831
In-process research and development expense		8,934				120
Stock-based compensation expense		37,724				82
Unrealized foreign exchange gains		—				(155	)
Other		41				(57	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(1,674	)			(513	)
Accounts payable		2,380				252
Accrued liabilities		(3,846	)			752
Deferred revenue		120				—

Net cash used in operating activities		(14,627	)			(9,107	)

Cash flows from investing activities				<