ࡱ; }z  !"#$%&'()*+,-./0123456789:;<=>?@ABCDEFGHIJKLMNOPQRSTUVWXYZ[\]^_`abcdefghijklmnopqrstuvwxy|~Root Entry  \pCalc Ba=8 =@ 8X@"1Calibri1Arial1Arial1Arial1Calibri General3._(\$* #,##0_);_(\$* \(#,##0\);_(\$* \-_);_(@_) #,##0\(#,##0_);[RED]\(#,##0\)!"($"#,##0_);[RED]"($"#,##0\)'""($"#,##0.00_);[RED]"($"#,##0.00\) #,##0.00;6_(\$* #,##0.00_);_(\$* \(#,##0.00\);_(\$* \-??_);_(@_)                + ) , *   (  " " "8 *8   #4 #4 #8 #4 #4 #4 # #4 # # # #4 #   ( `-Caxcella health inc"Fcondensed consolidated bal"Scondensed consolidated sta$GZcondensed consolidated sta-1$gcondensed consolidated sta-2"xnotes to condensed consoli!}4 fair value measurements#A4 fair value measurements-1#Q4 fair value measurements-2"5 accrued expenses and oth!6 debt financing/terminal interest feew7 stockholders equity ɢpreferred stock warrants"preferred stock warrants-1"preferred stock warrants-2"wpreferred stock warrants-3"A8 commitments and continge10 net loss per share10 net loss per share-1"ecomparison of the three mo kresearch and development"qgeneral and administrative cash flowscontractual obligationsYitem 6 exhibits"Ocertification of chief exe$ certification of chief exe-1T2*p     3  @@    AXCELLA HEALTH INC.Delaware 26-3321056=(State or other jurisdiction ofincorporation or organization)#(I.R.S. EmployerIdentification No.)R840 Memorial DriveCambridge, Massachusetts(Address of principal executive offices)02139(Zip Code)B(857) 320-2200(Registrant s telephone number, including area code)1Condensed Consolidated Balance Sheets (Unaudited)As ofMarch31, 2019December31, 2018AssetsCurrent assets:Cash and cash equivalents)Prepaid expenses and other current assetsTotal current assetsProperty and equipment, net"Security deposits and other assetsDeferred offering costs Total assetsVLiabilities, Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)Current liabilities:Accounts payableAccrued expensesTotal current liabilitiesLong term debt, net of discountOther liabilities!Preferred stock warrant liabilityTotal liabilities&Commitments and contingencies (Note8) /Redeemable convertible preferred stock (Note7)Stockholders' equity (deficit):Common stock, $0.001 par value; 47,000,000 and 47,000,000 shares authorized, 5,195,250 and 5,193,915 shares issued and 4,776,269 and 4,774,934 shares outstanding at March 31, 2019 and December 31, 2018, respectivelyAdditional paid-in-capital&Treasury stock, 418,981 shares at costAccumulated deficit$Total stockholders' equity (deficit)\Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit);Condensed Consolidated Statements of Operations (Unaudited)Three Months Ended March 31,20192018Operating expenses:Research and developmentGeneral and administrativeTotal operating expensesLoss from operationsOther income (expense):9Change in fair value of preferred stock warrant liabilityInterest income (expense), net!Total other income (expense), netNet loss%Net loss per share, basic and diluted=Weighted average common shares outstanding, basic and diluted;Condensed Consolidated Statements of Cash Flows (Unaudited)%Cash flows from operating activities:JAdjustment to reconcile net loss to net cash used in operating activities:Depreciation and amortization Stock-based compensation expenseNon-cash interest expense*Changes in current assets and liabilities:%Net cash used in operating activities%Cash flows from investing activities:#Purchases of property and equipment%Net cash used in investing activities%Cash flows from financing activities:"Payment of deferred offering costs(Proceeds from issuance of long term debtPayment of debt issuance costs.Proceeds from exercise of common stock options3Net cash (used in) provided by financing activities)Net decrease in cash and cash equivalents.Cash and cash equivalents, beginning of period(Cash and cash equivalents, end of period#Supplemental cash flow information:Cash paid for interestIDeferred offering costs included in accounts payable and accrued expenses$ OCondensed Consolidated Statements of Redeemable Convertible Preferred Stock and&Redeemable convertible preferred stock Common stockTreasury stockTotalSharesAmount Par ValueAdditional paid-in capitalstockholders equity (deficit)BALANCE - December31, 20170Accretion of preferred stock to redemption valueStock-based compensationBALANCE - March31, 2018BALANCE - December31, 2018 Exercise of common stock optionsBALANCE - March31, 2019@NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)Laboratory equipmentLeasehold improvementsOffice and computer equipmentFurniture and fixturesProperty and equipment/Less: accumulated depreciation and amortization4. FAIR VALUE MEASUREMENTS0Fair value measurements at March31, 2019 using:Level 1Level 2Level3Assets:Cash Equivalents Liabilities:Success Fee Liability!Preferred Stock Warrant Liability3Fair value measurements at December31, 2018 using:Level1Level2 Success fee Preferred stock warrantliabilityBalance January 1, 20198Increase in warrant fair value included in other expenseBalance  March31, 201915. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES *Accrued employee compensation and benefits2Accrued external research and development expensesAccrued professional feesOther4Total accrued expenses and other current liabilities6. DEBT FINANCING"Principal amount of long term debt Debt discountDeferred financing feesTerminal Interest FeeYear Ending December31,2020202120227. STOCKHOLDERS' EQUITYMarch31, 2019PreferredStockAuthorized&Preferred Stock Issued and Outstanding CarryingValueLiquidationPreference"Commonstock issuableuponconversionSeries A Preferred StockSeries B Preferred StockSeries B-1 Preferred StockSeries C Preferred StockSeries D Preferred StockSeries E Preferred StockPreferred Stock Warrants March 31,Expected volatility73.41%65%Risk-free interest rate2.22%2.48%6Weighted-average remaining contractual term (in years)Expected dividend yield0%1Fair value of underlying SeriesA Preferred Stock 2.30%- 2.50 2.05%- 2.68%Expected term (in years) 1.83 - 6.25.Expected volatility of underlying common stock73.4%OptionsWeighted AverageExercise Price(Weighted AverageRemaining Life(in Years)IntrinsicValue(in thousands)Outstanding January1, 2019Granted ExercisedCanceledOutstanding March31, 20197Options vested or expected to vest as of March31, 2019(Options exercisable as of March31, 2019 8. COMMITMENTS AND CONTINGENCIESYears Ending December31,10. NET LOSS PER SHARE Numerator:3Accretion of redeemable convertible preferred stock,Net loss attributable to common stockholders Denominator:ERedeemable convertible preferred stock (as converted to common stock)ZWarrants to purchase redeemable convertible preferred stock (as converted to common stock) Options to purchase common stock<Comparison of the Three Months Ended March 31, 2019 and 2018Three Months EndedMarch31,Change(in thousands)RevenueTotal other expense, netResearch and Development4Direct research and development expenses by program:AXA1665 AXA1125/1957AXA2678DPlatform development, early-stage research and unallocated expenses:Personnel related#External manufacturing and research*Laboratory supplies and research materialsFacility related and other'Total research and development expensesGeneral and Administrative Professional and consultant fees)Total general and administrative expenses Cash Flows!Cash used in operating activities!Cash used in investing activities/Cash (used in) provided by financing activities4Net increase (decrease) in cash and cash equivalentsContractual ObligationsPayments due by periodLess than1year 1 to3 years 4 to5 yearsMore than5yearsOperating lease commitments(1)Debt obligations(2)Item 6. Exhibits Exhibit No. Exhibit IndexRestated Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.3 to the Registrant s Current Report on Form 8-K (File No. 001-38901) filed with the Securities and Exchange Commission on May 13, 2019).Amended and Restated Bylaws of Registrant (Incorporated by reference to Exhibit 3.4 to the Registrant s Current Report on Form 8-K (File No. 001-38901) filed with the Securities and Exchange Commission on May 13, 2019).Specimen Sto<vck Certificate evidencing shares of common stock (Incorporated by reference to Exhibit 4.1 to the Registrant s Registration Statement on Form S-1/A (File No. 333-230822) filed with the Securities and Exchange Commission on April 30, 2019).AFifth Amended and Restated Investors' Rights Agreement among the Registrant and certain of its stockholders, dated November30, 2018 (Incorporated by reference to Exhibit 4.2 to the Registrant s Registration Statement on Form S-1 (File No. 333-230822) filed with the Securities and Exchange Commission on April 12, 2019).10.1# 2019 Stock Option and Incentive Plan and forms of award agreements thereunder (Incorporated by reference to Exhibit 10.2 to the Registrant s Registration Statement on Form S-1/A (File No. 333-230822) filed with the Securities and Exchange Commission on May 6, 2019).10.2#2019 Employee Stock Purchase Plan (Incorporated by reference to Exhibit 10.3 to the Registrant s Registration Statement on Form S-1/A (File No. 333-230822) filed with the Securities and Exchange Commission on April 30, 2019).10.3#Senior Executive Cash Incentive Bonus Plan (Incorporated by reference to Exhibit 10.4 to the Registrant s Registration Statement on Form S-1/A (File No. 333-230822) filed with the Securities and Exchange Commission on April 30, 2019).10.4#*Amended and Restated Employment Agreement between the Registrant and William Hinshaw, dated December20, 2018 (Incorporated by reference to Exhibit 10.5 to the Registrant s Registration Statement on Form S-1/A (File No. 333-230822) filed with the Securities and Exchange Commission on May 6, 2019).10.5#)Amended and Restated Employment Agreement between the Registrant and Thomas Leggett, dated December31, 2018 (Incorporated by reference to Exhibit 10.6 to the Registrant s Registration Statement on Form S-1/A (File No. 333-230822) filed with the Securities and Exchange Commission on May 6, 2019).10.6#,Amended and Restated Employment Agreement between the Registrant and Stephen Mitchener, dated December29, 2018 (Incorporated by reference to Exhibit 10.7 to the Registrant s Registration Statement on Form S-1/A (File No. 333-230822) filed with the Securities and Exchange Commission on May 6, 2019).31.1*Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2*Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1**Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.101INSXBRL Instance Document.101SCH(XBRL Taxonomy Extension Schema Document.101CAL6XBRL Taxonomy Extension Calculation Linkbase Document.101LAB1XBRL Taxonomy Extension Labels Linkbase Document.101PRE7XBRL Taxonomy Extension Presentation Linkbase Document.101DEF5XBRL Taxonomy Extension Definition Linkbase Document.DCERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICERDate: June 20, 2019By:/s/ William R. Hinshaw, Jr.fWilliam R. 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