UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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Table of Contents
i
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (“Report”) contains statements reflecting assumptions, expectations, projections, intentions or beliefs about future events that are intended as “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements included or incorporated by reference in this Report, other than statements of historical fact, that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. These statements appear in a number of places, including, but not limited to “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements represent our reasonable judgment of the future based on various factors and using numerous assumptions and are subject to known and unknown risks, uncertainties and other factors that could cause our actual results and financial position to differ materially from those contemplated by the statements. You can identify these statements by the fact that they do not relate strictly to historical or current facts, and use words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “may,” “should,” “plan,” “project” and other words of similar meaning. In particular, these include, but are not limited to, statements relating to the following:
● | our projected operating or financial results, including anticipated cash flows used in operations; |
● | our expectation that our shareholders will approve an increase in our authorized shares of common stock; |
● | our expectations that closing will occur in May 2022 under a securities purchase agreement entered into on May 4, 2022 with Handok, Inc. and certain of its affiliates; |
● | our expectations regarding capital expenditures, research and development expenses and other payments; |
● | our expectation about the extent and duration of the COVID-19 pandemic on our business; |
● | our beliefs and assumptions relating to our liquidity position, including our ability to obtain additional financing; |
● | our ability to obtain regulatory approvals for our pharmaceutical drugs and diagnostics; and |
● | our future dependence on third party manufacturers or strategic partners to manufacture any of our pharmaceutical drugs and diagnostics that receive regulatory approval, and our ability to identify strategic partners and enter into license, co-development, collaboration or similar arrangements. |
Any or all of our forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known and unknown risks, uncertainties and other factors including, but not limited to, the risks described in Part II, Item 1.A Risk factors, as well as “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2021 (the “2021 Form 10-K”), filed with the Securities and Exchange Commission (“SEC”) on September 15, 2021 and as amended on September 27, 2021.
In addition, there may be other factors that could cause our actual results to be materially different from the results referenced in the forward-looking statements, some of which are included elsewhere in this Report, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Many of these factors will be important in determining our actual future results. Consequently, no forward-looking statement can be guaranteed. Our actual future results may vary materially from those expressed or implied in any forward-looking statements. All forward-looking statements contained in this Report are qualified in their entirety by this cautionary statement. Forward-looking statements speak only as of the date they are made, and we disclaim any obligation to update any forward-looking statements to reflect events or circumstances after the date of this Report, except as otherwise required by applicable law.
ii
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Rezolute, Inc.
Unaudited Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
| March 31, | June 30, | ||||
| 2022 |
| 2021 | |||
Assets | ||||||
Current assets: |
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Cash and cash equivalents | $ | | $ | | ||
Prepaid expenses and other | | | ||||
Total current assets |
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Long-term assets: | ||||||
Restricted cash | | — | ||||
Right-of-use assets, net |
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Deferred offering costs and other | | | ||||
Property and equipment, net |
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Total assets | $ | | $ | | ||
Liabilities and Shareholders' Equity |
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Current liabilities: |
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Accounts payable | $ | | $ | | ||
Accrued liabilities: |
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Insurance premiums | — | | ||||
Compensation and benefits | | | ||||
Other | | | ||||
Current portion of operating lease liabilities | | | ||||
Total current liabilities |
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Long term liabilities: | ||||||
Long term debt, net of discount |
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Operating lease liabilities, net of current portion |
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Embedded derivative liabilities | | | ||||
Total liabilities |
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Commitments and contingencies (Notes 4 and 8) |
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Shareholders' equity: |
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Preferred Stock, $ |
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Common Stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Total shareholders’ equity |
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Total liabilities and shareholders’ equity | $ | | $ | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
Rezolute, Inc.
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
Three Months Ended | Nine Months Ended | ||||||||||||
March 31, | March 31, | ||||||||||||
| 2022 |
| 2021 | 2022 |
| 2021 | |||||||
Operating expenses: |
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Research and development |
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General and administrative |
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Total operating expenses |
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Operating loss |
| ( |
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Non-operating income (expense): |
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Interest expense |
| ( |
| — | ( |
| — | ||||||
Gain (loss) from change in fair value of derivative liabilities | ( | | ( | | |||||||||
Employee retention credit | — | — | | — | |||||||||
Interest and other income | — | | | | |||||||||
Total non-operating income (expense), net |
| ( |
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Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||
Net loss per common share - basic and diluted | ( | ( | ( | ( | |||||||||
Weighted average number of common shares outstanding - basic and diluted |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
Rezolute, Inc.
Unaudited Condensed Consolidated Statements of Shareholders’ Equity
Nine Months Ended March 31, 2022 and 2021
(In thousands)
Additional | Total | |||||||||||||
Common Stock | Paid-in | Accumulated | Shareholders' | |||||||||||
| Shares |
| Amount |
| Capital |
| Deficit |
| Equity | |||||
Nine Months Ended March 31, 2022: | ||||||||||||||
Balances, June 30, 2021 |
| | $ | | $ | | $ | ( | $ | | ||||
Gross proceeds from issuance of equity securities for cash in Underwritten Public Offering: | ||||||||||||||
Common Stock | | | | — | | |||||||||
2021 pre-funded warrants | — | — | | — | | |||||||||
Gross proceeds from issuance of common stock for cash: | ||||||||||||||
In 2021 registered direct offering | | | | — | | |||||||||
Under Equity Distribution Agreement | | | | — | | |||||||||
Under LPC Purchase Agreement | | — | | — | | |||||||||
Underwriting discounts and other equity offering costs | — | — | ( | — | ( | |||||||||
Share-based compensation | — | — | | — | | |||||||||
Commitment shares issued under LPC Purchase Agreement | | — | | — | | |||||||||
Net loss |
| — |
| — |
| — |
| ( |
| ( | ||||
Balances, March 31, 2022 | | $ | | $ | | $ | ( | $ | | |||||
Nine Months Ended March 31, 2021: | ||||||||||||||
Balances, June 30, 2020 | | $ | | $ | | $ | ( | $ | | |||||
Share-based compensation | — | — | | — | | |||||||||
Fair value of warrants issued to consultants for services | — | — | | — | | |||||||||
Issuance of common stock for cash | | | | — | | |||||||||
Advisory fees and other offering costs related to issuance of Units | — | — | ( | — | ( | |||||||||
Issuance of common stock for services | — | — | | — | | |||||||||
Reclassification of derivative liability for authorized share deficiency | — | — | ( | — | ( | |||||||||
Net loss | — | — | — | ( | ( | |||||||||
Balances, March 31, 2021 |
| | $ | | $ | | $ | ( | $ | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
Rezolute, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands)
| Nine Months Ended | |||||
March 31, | ||||||
| 2022 |
| 2021 | |||
CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net loss | $ | ( | $ | ( | ||
Share-based compensation expense | | | ||||
Accretion of debt discount and issuance costs | | — | ||||
Non-cash lease expense | | | ||||
Depreciation and amortization expense | | | ||||
Loss (gain) from change in fair value of derivative liabilities | | ( | ||||
Fair value of warrants issued for services | — | | ||||
Fair value of shares of common stock issued for services | — | | ||||
Changes in operating assets and liabilities: |
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Decrease in prepaid expenses and other assets |
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Increase (decrease) in accounts payable |
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Increase (decrease) in other accrued liabilities | | ( | ||||
Decrease in license fees payable to Xoma |
| — |
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Net Cash Used in Operating Activities |
| ( |
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CASH FLOWS FROM INVESTING ACTIVITIES |
| — |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Proceeds from 2021 Underwritten Public Offering | | — | ||||
Proceeds from 2021 Registered Direct Offering | | — | ||||
Proceeds from issuance of Units | — | | ||||
Payment of commissions and other deferred offering costs | ( | ( | ||||
Payment for debt discount and issuance costs |
| ( | ( | |||
Proceeds from issuances of common stock |
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Net Cash Provided by Financing Activities |
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Net increase in cash, cash equivalents and restricted cash | $ | | $ | | ||
Cash, cash equivalents and restricted cash at beginning of period |
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Cash, cash equivalents and restricted cash at end of period | $ | | $ | | ||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH: | ||||||
Cash and cash equivalents, end of period | | | ||||
Restricted cash, end of period | | — | ||||
Total cash, cash equivalents and restricted cash, end of period | $ | | $ | | ||
SUPPLEMENTARY CASH FLOW INFORMATION: |
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Cash paid for interest | $ | | $ | — | ||
Cash paid for income taxes | — | — | ||||
Right-of-use assets acquired in exchange for operating lease liabilities | — | | ||||
Cash paid for amounts included in the measurement of operating lease liabilities | | | ||||
NON-CASH INVESTING AND FINANCING ACTIVITIES: |
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Issuance of commitment shares for deferred offering costs subsequently charged to additional paid-in capital | $ | | $ | — | ||
Reclassification of warrants and stock options from equity to derivative liability due to authorized share deficiency | — | | ||||
Increase in payables for debt issuance costs | — | | ||||
Furniture and equipment received as inducement under operating lease | — | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
NOTE 1 — NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
Rezolute, Inc. (the “Company”) is a clinical stage biopharmaceutical company developing transformative therapies for metabolic diseases related to chronic glucose imbalance.
Change in Domicile
In June 2021, the Company merged with and into its wholly owned subsidiary, Rezolute Nevada Merger Corporation, a Nevada corporation (“Merger Sub”), pursuant to an Agreement and Plan of Merger, dated as of June 18, 2021 (the “Reincorporation Merger Agreement”), between the Company and Merger Sub, with Merger Sub as the surviving corporation (the “Reincorporation Merger”). At the effective time of the Reincorporation Merger (the “Effective Time”), Merger Sub was renamed “Rezolute, Inc.” and succeeded to the assets, continued its business and assumed its rights and obligations by operation of law. The Reincorporation Merger Agreement was approved by the Company’s shareholders at the 2021 annual meeting of its shareholders held on May 26, 2021.
Basis of Presentation
The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), the rules and regulations of the SEC for interim financial information, and the instructions to Form 10-Q and Article 8 of Regulation S-X.
The condensed consolidated balance sheet as of June 30, 2021, has been derived from the Company’s audited consolidated financial statements. The unaudited interim financial statements should be read in conjunction with the Company’s 2021 Form 10-K, which contains the Company’s audited financial statements and notes thereto, together with the Management’s Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended June 30, 2021.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all information and footnote disclosures necessary for a comprehensive presentation of financial position, results of operations, and cash flows. It is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments) that are necessary for a fair financial statement presentation have been made. The interim results for the three and nine months ended March 31, 2022 are not necessarily indicative of the financial condition and results of operations that may be expected for any future interim period or for the fiscal year ending June 30, 2022.
Consolidation
The Company has
5
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts in the unaudited condensed consolidated financial statements and the accompanying notes. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. The Company’s significant accounting estimates include, but are not necessarily limited to, the fair value of derivative liabilities, fair value of share-based payments, management’s assessment of going concern, and clinical trial accrued liabilities. Actual results could differ from those estimates.
Risks and Uncertainties
The Company’s operations may be subject to significant risks and uncertainties including financial, operational, regulatory and other risks associated with a clinical stage company, including the potential risk of business failure, and the future impact of COVID-19 as discussed in Note 8.
Significant Accounting Policies
The Company’s significant accounting policies are described in Note 1 to the financial statements in Item 8 of the 2021 Form 10-K.
Recent Accounting Pronouncements
Standard Required to be Adopted in Future Periods. The following accounting standards are not yet effective; management has not completed its evaluation to determine the impact that adoption of this standard will have on the Company’s consolidated financial statements.
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends the guidance on the impairment of financial instruments. This update adds an impairment model (known as the current expected credit losses model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes, as an allowance, its estimate of expected credit losses. In November 2019, ASU 2016-13 was amended by ASU 2019-10, Financial Instruments- Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) whereby the effective date for ASU 2016-13 for smaller reporting companies is now required for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company does not expect the adoption of ASU 2016-13 will have a material impact on its consolidated financial statements.
In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity). ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock, which results in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Additionally, ASU 2020-06 affects the diluted earnings per share calculation for instruments that may be settled in cash or shares and for convertible instruments and requires enhanced disclosures about the terms of convertible instruments and contracts in an entity’s own equity. ASU 2020-06 allows entities to use a modified or full retrospective transition method and is effective for smaller reporting companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company plans to early adopt this standard using the full retrospective transition method effective July 1, 2022. The Company does not expect the impact of adoption will have a material effect on the Company’s financial statements.
Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not currently expected to have a material impact on the Company’s financial statements upon adoption.
6
NOTE 2 — LIQUIDITY
The Company is in the clinical stage and has not yet generated any revenues. For the nine months ended March 31, 2022, the Company incurred a net loss of $
As discussed in Note 4, the Company is subject to license agreements that provide for future contractual payments upon achievement of various milestone events. Pursuant to the ActiveSite License Agreement (as defined below), a $
As discussed in Note 6, in October and November 2021 the Company completed an underwritten public offering for net proceeds of $
As discussed in Note 13, the Company received gross proceeds of approximately $
Management believes the Company’s cash and cash equivalents balance of $
NOTE 3 — OPERATING LEASES
The carrying value of right-of-use assets and operating lease liabilities are as follows (in thousands):
| March 31, |
| June 30, | |||
| 2022 |
| 2021 | |||
Right-of-use assets, net | $ | | $ | | ||
Operating lease liabilities: |
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Current | $ | | $ | | ||
Long-term |
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Total | $ | | $ | |
7
For the three and nine months ended March 31, 2022 and 2021, operating lease expense was as follows (in thousands):
| Three Months Ended | Nine Months Ended | |||||||||||
March 31, | March 31, | ||||||||||||
| 2022 |
| 2021 | 2022 |
| 2021 | |||||||
Research and development | $ | | $ | | $ | | $ | | |||||
General and administrative |
| |
| |
| |
| | |||||
Total | $ | | $ | | $ | | $ | |
As of March 31, 2022, the weighted average remaining lease term under operating leases was
Fiscal year ending June 30, |
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Remainder of fiscal year 2022 | $ | | |
2023 | | ||
2024 | | ||
Total lease payments | | ||
Less imputed interest |
| ( | |
Present value of operating lease liabilities | $ | |
As discussed in Note 13, the Company entered into a new lease agreement in April 2022 that provides for total cash payments of approximately $
NOTE 4 — LICENSE AGREEMENTS
Xoma License Agreement
In December 2017, the Company entered into a license agreement (the “Xoma License Agreement”) with XOMA Corporation (“Xoma”), through its wholly-owned subsidiary, XOMA (US) LLC, pursuant to which Xoma granted an exclusive global license to the Company to develop and commercialize Xoma 358 (formerly X358, now RZ358) for all indications. In January 2019, the Xoma License Agreement was amended with an updated payment schedule, as well as revising the amount the Company was required to expend on development of RZ358 and related licensed products, and revised provisions with respect to the Company’s diligence efforts in conducting clinical studies.
In January 2022, the Company was required to make a milestone payment under the Xoma License Agreement of $
ActiveSite License Agreement
On August 4, 2017, the Company entered into a Development and License Agreement (the “ActiveSite License Agreement”) with ActiveSite Pharmaceuticals, Inc. (“ActiveSite”) pursuant to which the Company acquired the rights to ActiveSite’s Plasma Kallikrein Inhibitor program (“PKI Portfolio”). The Company is initially using the PKI Portfolio to develop an oral PKI therapeutic for diabetic macular edema (RZ402) and may use the PKI Portfolio to develop other therapeutics for different indications. The ActiveSite Development and License Agreement requires various milestone payments up to $
8
NOTE 5 — LOAN AND SECURITY AGREEMENT
On April 14, 2021, the Company entered into a $
In addition, the Company’s cash and cash equivalents became subject to a blocked account control agreement (“BACA”) in favor of the Lenders whereby a cash balance of at least $
Outstanding borrowings under the Loan Agreement bear interest at a floating rate equal to (a)
The Company is obligated to pay the Lenders (i) a non-refundable facility fee in the amount of
Concurrently with the execution of the Loan Agreement, the Company entered into an exit fee agreement (the “Exit Fee Agreement”) that provides for a fee of
The Company has the option to prepay all, but not less than all, of the outstanding principal balance of the term loans. In the event of a voluntary or mandatory prepayment prior to the Maturity Date, the Company will incur a prepayment fee ranging from
The Company’s obligations under the Loan Agreement are secured by a first-priority security interest in substantially all the Company’s assets, including its intellectual property. This security interest will not be released until all obligations are repaid, including the requirement to pay an Exit Fee of $
9
Agreement contains customary representations, warranties and covenants and also includes customary events of default, including payment defaults, breaches of covenants, and a default upon the occurrence of a material adverse change affecting the Company. Upon the occurrence of an event of default, a default interest rate of an additional
As of March 31, 2022, the Company had outstanding contractual obligations under the Loan Agreement consisting of the principal balance of $
Fiscal year ending June 30, |
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Remainder of fiscal year 2022 | $ | — | |
2023 |
| | |
2024 |
| | |
2025 |
| | |
2026 |
| | |
Total contractual payments |
| | |
Less unaccreted debt discount |
| ( | |
Net carrying value | $ | |
NOTE 6 — SHAREHOLDERS’ EQUITY
Changes in Shareholders’ Equity for the Three Months Ended March 31, 2022 and 2021
The following table presents changes in shareholders’ equity for the three months ended March 31, 2022 and 2021 (in thousands):
Additional | Total | |||||||||||||
Common Stock | Paid-in | Accumulated | Shareholders' | |||||||||||
| Shares |
| Amount |
| Capital |
| Deficit |
| Equity | |||||
Three Months Ended March 31, 2022: | ||||||||||||||
Balances, December 31, 2021 |
| | $ | | $ | | $ | ( | $ | | ||||
Share-based compensation | — | — | | — | | |||||||||
Net loss |
| — |
| — |
| — |
| ( |
| ( | ||||
Balances, March 31, 2022 | | $ | | $ | | $ | ( | $ | | |||||
Three Months Ended March 31, 2021: | ||||||||||||||
Balances, December 31, 2020 | | $ | | $ | | $ | ( | $ | | |||||
Share-based compensation | — | — | | — | | |||||||||
Reclassification of derivative liability for authorized share deficiency | — | — | ( | — | ( | |||||||||
Fair value of warrants issued to consultants for services | — | — | | — | | |||||||||
Net loss | — | — | — | ( | ( | |||||||||
Balances, March 31, 2021 |
| | $ | | $ | | $ | ( | $ | |
For changes in shareholders’ equity for the nine months ended March 31, 2022 and 2021, please refer to the unaudited condensed consolidated statements of shareholders’ equity.
Underwritten Public Offering
On October 12, 2021, the Company entered into an underwriting agreement with Oppenheimer & Co., Inc., as representative of the underwriters listed therein (the “2021 Underwriters”) for the planned issuance and sale of equity securities in an underwritten public offering (the “2021 Underwritten Offering”). On October 15, 2021, closing occurred for the Underwritten Offering resulting in the issuance of (i)
10
warrants to purchase
The Company granted the 2021 Underwriters a
2021 Pre-Funded Warrants
The 2021 PFWs have an exercise price of $
The gross proceeds of $
2021 Registered Direct Offering
Concurrently with the Underwritten Offering, Handok, Inc. (the “Purchaser”), an entity affiliated with a member of the Board of Directors, entered into a subscription agreement for a registered direct offering (the “2021 RDO”) pursuant to which the Company agreed to sell to the Purchaser an aggregate of
Equity Distribution Agreement
In December 2020, the Company and Oppenheimer & Co. Inc. (the “Agent”) entered into an Equity Distribution Agreement (the “EDA”) that provides for an “at the market offering” for the sale of up to $
Under the terms of the EDA, the Company agreed to pay the Agent a commission equal to
11
LPC Purchase Agreement
In August 2021, the Company entered into a purchase agreement (the “Purchase Agreement”) and a registration rights agreement (the “RRA”) with Lincoln Park Capital Fund, LLC (“LPC”), which provides that the Company may sell to LPC up to an aggregate of $
LPC’s initial purchase consisted of
On September 17, 2021, the Company submitted a Regular Purchase Notice, resulting in the sale of
Pursuant to the RRA, the Company agreed to use its reasonable best efforts to maintain effectiveness of the registration statement and the related prospectus supplement within prescribed deadlines set forth in the RRA. In addition, the Company is required to use its reasonable best efforts to secure and maintain its listing of the Purchase Shares on the NCM. LPC has no obligation to purchase shares under the Purchase Agreement unless the Company complies with the terms of the RRA.
Derivative Liability for Authorized Share Deficiency
On February 17, 2021, the Company filed a certificate of correction (the “Charter Revision”) with the Secretary of State of Delaware. The Charter Revision changed the number of authorized shares of Common Stock from
The Company made an accounting policy election to select the stock options and warrant agreements with the earliest issuance dates to compute the estimated fair value of the financial instruments associated with the authorized share deficiency. These stock options and warrants were generally those with the highest exercise prices that were least likely to be exercised. The fair value of such stock options and warrants was accounted for as a derivative liability that amounted to $
12
below is a summary of the derivative liability associated with stock options and warrants as of February 17, 2021 and March 31, 2021 (in thousands, except per share amounts):
February 17, 2021 | March 31, 2021 | ||||||||||||||||
Stock | Stock | ||||||||||||||||
Options | Warrants | Total | Options | Warrants | Total | ||||||||||||
Number of shares | | | | | | | |||||||||||
Weighted average fair value per share | $ | $ | $ | $ | $ | $ | |||||||||||
Fair value of derivative liability | $ | | $ | | $ | | $ | | $ | | $ | |
Due to the reduction in fair value of the derivative liability from February 17, 2021 to March 31, 2021, the Company recognized a non-cash gain of approximately $
February 17, 2021 | March 31, 2021 | ||||||||||||||||||
Stock | Stock | ||||||||||||||||||
Options | Warrants | Total | Options | Warrants | Total | ||||||||||||||
Market price of Common Stock | $ | | $ | | $ | | $ | | $ | | $ | | |||||||
Exercise price | $ | | $ | | $ | | $ | | $ | | $ | | |||||||
Risk-free interest rate | | % | | % | | % | | % | | % | | % | |||||||
Dividend rate | % | % | % | % | % | % | |||||||||||||
Remaining contractual term (years) | |||||||||||||||||||
Historical volatility | % | % | % | % | % | % |
On May 26, 2021, the Company’s shareholders approved an increase in authorized shares of common stock from
NOTE 7 — SHARE-BASED COMPENSATION AND WARRANTS
Stock Option Plans
Presented below is a summary of the number of shares authorized, outstanding, and available for future grants under each of the Company’s stock option plans as of March 31, 2022 (in thousands):
| Plan Termination |
| Number of Shares | |||||
Description |
| Date |
| Authorized |
| Outstanding |
| Available |
2015 Plan |
| February 2020 |
| |
| |
| — |
2016 Plan |
| October 2021 |
| |
| |
| — |
2019 Plan |
| July 2029 |
| |
| |
| — |
2021 Plan | March 2030 | | | | ||||
Total |
|
|
| |
| |
| |
13
Stock Options Outstanding
The following table sets forth a summary of the activity under all of the Company’s stock option plans for the nine months ended March 31, 2022 (shares in thousands):
| Shares |
| Price (1) |
| Term (2) | ||
Outstanding, June 30, 2021 |
| | $ | |
| ||
Granted | | | |||||
Expired | ( | | |||||
Forfeited | ( | | |||||
Outstanding, March 31, 2022 |
| |
| |
| ||
Vested, March 31, 2022 |
| |
| |
|
(1) | Represents the weighted average exercise price. |
(2) | Represents the weighted average remaining contractual term for the number of years until the stock options expire. |
For the nine months ended March 31, 2022, the aggregate fair value of stock options granted for approximately
Market price of common stock on grant date | $ | | ||
Expected volatility |
| | % | |
Risk free interest rate |
| | % | |
Expected term (years) |
| |||
Dividend yield |
| | % |
Share-based compensation expense for the three and nine months ended March 31, 2022 and 2021 is included under the following captions in the unaudited condensed consolidated statements of operations (in thousands):
| Three Months Ended | Nine Months Ended | |||||||||||
March 31, | March 31, | ||||||||||||
| 2022 |
| 2021 | 2022 |
| 2021 | |||||||
Research and development | $ | | $ | | $ | |