Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
|
(State or other jurisdiction of incorporation)
|
(I.R.S. Employer Identification No.)
|
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Title of each class
|
Trading
Symbol(s)
|
Name of each exchange
on which registered
|
|
|
|
Large Accelerated Filer
|
☐ |
Accelerated Filer
|
☐ |
|
☒ |
Smaller reporting company
|
|
Emerging growth company
|
PART I — FINANCIAL INFORMATION | PAGE |
|
ITEM 1.
|
Unaudited Condensed Consolidated Financial Statements (unaudited)
|
|
|
3
|
|
|
4
|
|
|
5
|
|
|
6
|
|
|
|
|
|
8
|
|
ITEM 2.
|
17
|
|
ITEM 3.
|
24
|
|
ITEM 4.
|
25
|
|
PART II — OTHER INFORMATION | ||
ITEM 1.
|
25
|
|
ITEM 1A.
|
25
|
|
ITEM 2.
|
25
|
|
ITEM 3.
|
25
|
|
ITEM 4.
|
25
|
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ITEM 5.
|
25
|
|
ITEM 6.
|
25
|
|
27
|
|
June 30,
2024 |
December 31,
2023 |
||||||
|
(in thousands)
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Prepaid expenses and other current assets
|
|
|
||||||
Total current assets
|
|
|
||||||
Other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
|
$
|
|
||||
Accrued expenses and other
|
|
|
||||||
Accrued dividends payable
|
|
|
||||||
Total current liabilities
|
|
|
||||||
Convertible notes payable and accrued interest, net of discounts – related party (Note 3)
|
|
|
||||||
Derivative liabilities (Note 4) |
|
|
||||||
Borrowing and accrued interest under convertible line of credit, net of debt discount – related party (Notes 9 and 10)
|
||||||||
Other liabilities
|
|
|
||||||
Total liabilities
|
|
|
||||||
Commitments and contingencies (Note 11)
|
||||||||
Series C super dividend redeemable convertible preferred stock;
|
|
|
||||||
Stockholders’ equity (deficit):
|
||||||||
Undesignated stock, $
|
|
|
||||||
Series A 12% convertible preferred stock;
|
|
|
||||||
Common stock, $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Retained deficit
|
(
|
)
|
(
|
)
|
||||
Total stockholders’ equity (deficit)
|
(
|
)
|
(
|
)
|
||||
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)
|
$
|
|
$
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||||
|
2024
|
2023
|
2024
|
2023
|
||||||||||||
|
(in thousands, except per share
data)
|
(in thousands, except per share
data)
|
||||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
General and administrative
|
|
|
|
|
||||||||||||
Total operating expenses
|
|
|
|
|
||||||||||||
Total operating loss
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Other income (expense):
|
||||||||||||||||
Interest income
|
|
|
|
|
||||||||||||
Interest expense
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Change in fair value of derivative
|
|
|
(
|
)
|
(
|
)
|
||||||||||
Total other income (expense)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Preferred stock dividends
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Net loss applicable to common stockholders
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Net loss per common share — basic and diluted
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Weighted average common shares outstanding — basic and diluted
|
|
|
|
|
|
Six Months Ended
June 30, |
|||||||
|
2024
|
2023
|
||||||
|
(in thousands)
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Adjustments to reconcile net loss to net cash flows from operating activities:
|
||||||||
Stock-based compensation expense
|
|
|
||||||
Amortization of right to use lease asset
|
|
|
||||||
Non-cash interest expense
|
|
|
||||||
Change in fair value of derivative liabilities
|
|
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Prepaid expenses and other assets
|
|
|
||||||
Accounts payable, accrued expenses and other liabilities
|
(
|
)
|
(
|
)
|
||||
Accrued interest on convertible debt - related party
|
||||||||
Net cash from operating activities
|
(
|
)
|
(
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Net proceeds from convertible line of credit – related party
|
||||||||
Net proceeds from exercise of common stock warrants |
||||||||
Net cash flows from financing activities
|
|
|
||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
(
|
)
|
(
|
)
|
||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
|
|
||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
|
$
|
|
||||
NONCASH FINANCING ACTIVITIES:
|
||||||||
Payment of preferred stock dividends in common stock
|
$ | $ | ||||||
Reclassification of accrued bonus to additional paid in capital
|
|
|
||||||
Common stock purchase warrants issued in connection with related party line of credit
|
|
Series C Super
Dividend Redeemable Convertible Preferred Stock |
|||||||
|
Number of
Shares |
Amount
|
||||||
Balance at December 31, 2022
|
|
$
|
|
|||||
Balance at June 30, 2023
|
|
$
|
|
|||||
Balance at December 31, 2023
|
|
$
|
|
|||||
Balance at June 30, 2024
|
|
$
|
|
|
Series A 12%
Convertible Preferred Stock |
Common Stock
|
||||||||||||||||||||||||||
|
Number
of Shares |
Amount
|
Number
of Shares |
Amount
|
Additional
Paid-In
Capital |
Retained
Deficit |
Total
Stockholders’ Equity (Deficit) |
|||||||||||||||||||||
Balance at March 31, 2023
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||||||||||
Series A 12% convertible preferred stock dividend
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||||
Series C super dividend redeemable convertible preferred
stock dividend
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||||
Common stock purchase warrants issued in connection
with related party line of credit
|
||||||||||||||||||||||||||||
Stock-based compensation expense
|
|
|
||||||||||||||||||||||||||
Net loss
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||||
Balance at June 30, 2023
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||||||||||
Balance at March 31, 2024
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||||||||||
Series A 12% convertible preferred stock dividend
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||||
Series C super dividend redeemable convertible preferred
stock dividend |
(
|
)
|
(
|
)
|
||||||||||||||||||||||||
Common stock purchase warrants issued in connection
with related party line of credit
|
||||||||||||||||||||||||||||
Exercise of common stock options |
||||||||||||||||||||||||||||
Exercise of common stock purchase warrants | ||||||||||||||||||||||||||||
Stock-based compensation expense
|
|
|
||||||||||||||||||||||||||
Net loss
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||||
Balance at June 30, 2024
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
|
Series A 12%
Convertible Preferred Stock |
Common Stock
|
||||||||||||||||||||||||||
|
Number
of Shares |
Amount
|
Number
of Shares |
Amount
|
Additional
Paid-In
Capital |
Retained
Deficit |
Total
Stockholders’ Equity (Deficit) |
|||||||||||||||||||||
Balance at December 31, 2022
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||||||||||
Series A 12% convertible preferred stock dividend
|
|
|
(
|
)
|
||||||||||||||||||||||||
Series C super dividend redeemable convertible preferred
stock dividend
|
|
|
(
|
)
|
( |
) | ||||||||||||||||||||||
Common stock purchase warrants issued in connection with related party line of credit
|
||||||||||||||||||||||||||||
Stock-based compensation expense
|
|
|
|
|||||||||||||||||||||||||
Net loss
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||||
Balance at June 30, 2023
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||||||||||
Balance at December 31, 2023
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||||||||||
Series A 12% convertible preferred stock dividend
|
|
|
(
|
)
|
||||||||||||||||||||||||
Series C super dividend redeemable convertible preferred stock dividend
|
|
|
(
|
)
|
||||||||||||||||||||||||
Exercise of common stock options
|
||||||||||||||||||||||||||||
Exercise of common stock purchase warrants
|
||||||||||||||||||||||||||||
Common stock purchase warrants issued in connection with related party line of credit
|
||||||||||||||||||||||||||||
Stock-based compensation expense, net of shares forfeited to cover tax withholding
|
|
|
|
|||||||||||||||||||||||||
Net loss
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||||
Balance at June 30, 2024
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
|
June 30,
2024 |
December 31,
2023 |
||||||
|
(in thousands)
|
|||||||
Legal and accounting fees
|
$
|
|
$
|
|
||||
Accrued compensation
|
|
|
||||||
Lease liability
|
|
|
||||||
Accrued research and development costs and other
|
|
|
||||||
|
$
|
|
$
|
|
June 30,
2024
|
December 31,
2023
|
|||||||
Derivative Liability – Contingent Interest April Note
|
$
|
|
$
|
|
||||
Derivative Liability – Contingent Interest September Note | $ | $ | ||||||
Derivative Liability – Contingent Interest December Note | $ | $ |
|
June 30,
2024
|
December 31,
2023
|
||||||
Stock Price
|
$
|
|
$
|
|
||||
Conversion Price of conversion feature
|
$
|
|
$
|
|
||||
Term
|
|
|
||||||
Risk Free Interest Rate
|
|
%
|
|
%
|
||||
Credit Adjusted Discount Rate
|
|
%
|
|
%
|
||||
Volatility
|
|
%
|
|
%
|
||||
Dividend Rate
|
|
% |
|
% |
Balance – December 31, 2023
|
$
|
|
||
Fair Value Adjustment
|
|
|||
Balance – June 30, 2024
|
$
|
|
||
Balance – December 31, 2022 |
$ |
|||
Fair Value Adjustment | ||||
Balance – June 30, 2023
|
$ |
June 30,
2024
|
December 31,
2023
|
|||||||
Stock Price
|
$
|
|
$
|
|
||||
Conversion Price of conversion feature
|
$
|
|
$
|
|
||||
Term
|
|
|
||||||
Risk Free Interest Rate
|
|
%
|
|
%
|
||||
Credit Adjusted Discount Rate
|
|
%
|
|
%
|
||||
Volatility
|
|
%
|
|
%
|
||||
Dividend Rate
|
|
% |
|
% |
Balance – December 31, 2023
|
$ | |||
Fair Value Adjustment
|
||||
Balance – June 30, 2024
|
$ | |||
Balance – December 31, 2022
|
||||
Fair Value Adjustment | ||||
Balance – June 30, 2023 | $ |
June 30,
2024
|
December 31,
2023
|
|||||||
Stock Price
|
$
|
|
$
|
|
||||
Conversion Price of conversion feature
|
$
|
|
$
|
|
||||
Term
|
|
|
||||||
Risk Free Interest Rate
|
|
%
|
|
%
|
||||
Credit Adjusted Discount Rate
|
|
%
|
|
%
|
||||
Volatility
|
|
%
|
|
%
|
||||
Dividend Rate
|
|
% |
|
% |
Balance – December 31, 2023
|
$
|
|
||
Fair Value Adjustment
|
|
|||
Balance – June 30, 2024
|
$
|
|
||
Balance – December 31, 2022 |
$ | |||
Fair Value Adjustment
|
|
|||
Balance – June 30, 2023
|
$
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||||
|
2024
|
2023
|
2024
|
2023
|
||||||||||||
|
in thousands
|
|||||||||||||||
Research and development
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
General and administrative
|
|
|
|
|
||||||||||||
Total stock-based compensation expense
|
$
|
|
$
|
|
$
|
|
$
|
|
|
Shares
|
Weighted
Average Exercise Price |
||||||
Outstanding, December 31, 2023
|
|
$
|
|
|||||
Granted
|
|
|
||||||
Exercised
|
( |
) |
(
|
)
|
||||
Options forfeited/cancelled
|
(
|
)
|
(
|
)
|
||||
Outstanding, June 30, 2024
|
|
$
|
|
|
Six
Months Ended
June 30, |
Six
Months Ended June 30, |
||||||
|
2024
|
2023
|
||||||
Risk-free interest rate
|
|
%
|
|
%
|
||||
Expected life of the options
|
|
|
||||||
Expected volatility of the underlying stock
|
|
%
|
|
%
|
||||
Expected dividend rate
|
|
% |
|
% |
|
Shares
|
Weighted Average
Exercise Price |
||||||
Outstanding, December 31, 2023
|
|
$
|
|
|||||
Granted
|
|
|
||||||
Exercised
|
(
|
)
|
|
|||||
Forfeited/cancelled
|
(
|
)
|
|
|||||
Outstanding, June 30, 2024
|
|
$
|
|
|
June 30,
2024
|
June 30,
2023
|
||||||
(shares) |
(shares) |
|||||||
Warrants to purchase shares of common stock
|
|
|
||||||
Options to purchase shares of common stock
|
|
|
||||||
Restricted stock units |
||||||||
Shares of common stock issuable upon conversion of convertible notes payable – related party
|
|
|
||||||
Shares of common stock issuable upon conversion of convertible line of credit – related party |
||||||||
Shares of common stock issuable upon conversion of preferred stock
|
|
|
||||||
|
|
|
2024
|
|
|
||
2025 |
||||
Total
|
|
|||
Less imputed interest
|
|
|||
Present value of lease liability
|
$
|
|
• |
our early stage of development,
|
• |
we have incurred significant operating losses since our inception and cannot assure you that we will generate revenue or profit,
|
• |
our dependence on additional outside capital,
|
• |
we may be unable to enter into strategic partnerships for the development, commercialization, manufacturing and distribution of our proposed product candidates,
|
• |
uncertainties related to any litigation,
|
• |
uncertainties related to our technology and clinical trials, including expected dates of availability of clinical data,
|
• |
we may be unable to demonstrate the efficacy and safety of our developmental product candidates in human trials,
|
• |
we may be unable to improve upon, protect and/or enforce our intellectual property,
|
• |
we are subject to extensive and costly regulation by the U.S. Food and Drug Administration (FDA) and by foreign regulatory authorities, which must approve our product candidates in development and could restrict the sales and marketing
and pricing of such products,
|
• |
competition and stock price volatility in the biotechnology industry,
|
• |
limited trading volume for our stock, concentration of ownership of our stock, and other risks detailed herein and from time to time in our SEC reports, and
|
• |
the impact resulting from a pandemic or the reemergence of COVID-19, which delayed our clinical trial and development efforts, as well as the impact that such a pandemic has on the volatility of the capital market and our ability to
access the capital market and,
|
• |
other risks detailed herein and from time to time in our SEC reports, including our Annual Report on Form 10-K filed with the SEC for the fiscal year ended December 31, 2023, and our subsequent SEC filings.
|