NOTE 2 — LIQUIDITY

The Company is in the clinical stage and has not yet generated any revenues. For the fiscal year ended June 30, 2019, the Company incurred a net loss of $30.4 million and net cash used in operating activities amounted to $15.3 million. For the six months ended December 31, 2019, the Company incurred a net loss of $11.7 million and net cash used in operating activities amounted to $14.4 million. As of December 31, 2019, the Company had an accumulated deficit of $138.6 million. As of December 31, 2019, the Company had cash, cash equivalents and restricted cash of $19.7 million and total liabilities of $5.9 million.

As discussed in Note 5, in July and August 2019 the Company received aggregate net proceeds of approximately $22.6 million from the issuance of approximately 82.9 million shares of Common Stock to investors in a private placement. Management believes the Company’s existing cash, cash equivalents and restricted cash balance of $19.7 million will be adequate to carry out currently planned activities through February 2021. The Company has flexibility to delay clinical programs, if necessary, to ensure that adequate capital resources are available to fund activities for the next 12 months. Therefore, if additional financing is not obtained by the second quarter of calendar year 2020, management plans to delay clinical spending and reduce discretionary spending in order to ensure that the Company’s most important clinical initiatives continue to be funded for the next 12 months. Management believes it has the ability to effectively manage these expenditures to enable the Company to have sufficient liquidity to operate through February 2021. The Company expects to continue pursuing equity and/or debt financings to provide funding for clinical programs and other planned activities for the foreseeable future. There are no assurances that the Company will be able to obtain additional financing equity offerings and bank financings in the future. Even if these financing sources are available, they may be on terms that are not acceptable to management and the Company’s stockholders.