美国
证券和交易委员会
华盛顿特区 20549
表格
截至季度结束日期的财务报告
或者
过渡期从_________到___________
委托文件编号:001-39866
ALLARITY THERAPEUTICS,INC。
(根据其章程规定的注册人准确名称)
| |
(设立或组织的其他管辖区域) | (纳税人识别号码) |
|
(总部地址及邮政编码) |
(
(注册人电话号码,包括区号)
Not Applicable
(前名称、地址及财政年度,如果自上次报告以来有更改)
在法案第12(b)条的规定下注册的证券:
每个类别的标题 | 交易标的 | 在其上注册的交易所的名称 | ||
| | 该 |
请用复选标记指示,注册者(1)在过去12个月内已按照《1934年证券交易法》第13或15(d)条的规定提交了所有要求提交的报告(或者要求注册者提交此类报告的更短期限),并且(2)已经受到过去90天的此类申报要求。
请勾选方框,以表明注册人是否在过去12个月内(或其要求提交此类文件的较短期限内)提交了每份交互式数据文件,其提交是根据规则405号第S-T条(本章第232.405条)要求提交的。
请使用复选标记指示报告人是否为大型快速申报人、加速申报人、非加速申报人、小型报告公司或新兴成长公司。请参阅《交易所法》第120亿.2条中“大型快速申报人”、“加速申报人”、“小型报告公司”和“新兴成长公司”的定义。
大型加速报告人 | ☐ | 加速文件提交人 | ☐ |
| ☒ | 较小的报告公司 | |
新兴成长公司 | |
如果是新兴成长型企业,请勾选复选标记,表明注册者已选择不使用延长过渡期来符合根据证券交易法第13(a)条规定提供的任何新财务会计准则。
请勾选是否注册公司是外壳公司(根据《证券交易法》第12b-2规则定义)。是
截至2024年11月13日,
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除非上下文另有说明,在本第10-Q表格的季度报告(“季度报告”)中,对“公司”、“Allarity”、“我们”、“我们”等类似术语的引用指的是Allarity Therapeutics, Inc.,Allarity Therapeutics A/S(前身)及其各自的合并子公司。2024年4月9日,我们实施了一项1对20的普通股合并(“四月普通股合并”)。 2024年9月11日,我们实施了一项1对30的普通股合并(“九月普通股合并”)。本季度报告中反映的所有历史股票数量和每股金额均已调整以反映股票合并。
本季度报告包含我们认为是“前瞻性声明”的内容,该内容符合1995年《私人证券诉讼改革法》的含义。这些前瞻性声明旨在享受该法案提供的前瞻性声明安全港的保护,以及其他联邦证券法所提供的保护。一般而言,诸如“实现”、“目标”、“抱负”、“预期”、“相信”、“致力于”、“继续”、“可能”、“设计”、“估计”、“期望”、“预测”、“未来”、“目标”、“成长”、“指引”、“打算”、“可能”、“应该”、“里程碑”、“目标”、“在进行中”、“机会”、“展望”、“即将”、“计划”、“方位”、“可能”、“潜力”、“预测”、“进展”、“路线图”、“寻求”、“应该”、“努力”、“目标”、“即将”、“将会”、“将”等词汇及类似表达识别出前瞻性声明,这些声明并不具有历史性质。前瞻性声明可能贯穿本季度报告和我们向证券交易委员会(“SEC”)提交的其他文件中。前瞻性声明涉及风险和不确定性,可能导致实际结果与这些前瞻性声明预期的不同。这些风险和不确定性包括但不限于我们在年度报告(Form 10-k,经修订的)中“风险因素”部分所描述的因素,该年度报告最初于2024年3月8日向SEC提交。
我们敦促投资者在评估本季度报告中包含的前瞻性陈述时,仔细考虑这些文件中披露的所有风险、不确定性和其他因素。我们无法向您保证本季度报告中包含的任何前瞻性陈述所反映或暗示的我们所预期的结果或发展将会实现,或者即使大致实现,那些结果或发展将对我们产生预期的后果,或影响我们的运营或财务表现,正如我们所预测或期望的那样。由于上述事项及其他事项,包括事实变化、假设未实现或其他因素,与任何前瞻性陈述相关的实际结果可能与该前瞻性陈述中表达或暗示的预期结果存在重大差异。本季度报告中包含的前瞻性陈述仅在本季度报告的日期作出,我们没有义务更新任何此类陈述以反映后续事件或情况。
简明合并资产负债表
(未经审计)
(以千美元计,每股数据除外)
9月30日, | 2023年12月31日, | |||||||
2024 | 2023 | |||||||
资产 | ||||||||
流动资产 | ||||||||
现金及现金等价物 | $ | $ | ||||||
其他流动资产 | ||||||||
预付费用 | ||||||||
税收信用应收款 | ||||||||
总流动资产 | ||||||||
物业、厂房和设备,净值 | ||||||||
无形资产 | ||||||||
总资产 | $ | $ | ||||||
负债和股东权益(赤字) | ||||||||
流动负债 | ||||||||
应付账款 | $ | $ | ||||||
应计负债 | ||||||||
权证衍生金融负债 | ||||||||
应付所得税 | ||||||||
可转换票据及应计利息,扣除债务折扣净额 | ||||||||
总流动负债 | ||||||||
递延税款 | ||||||||
总负债 | ||||||||
承诺和 contingencies (注14) | ||||||||
股东权益(赤字) | ||||||||
A股优先股$ 每股( 和 截至2024年9月30日和2023年12月31日指定的股份分别为)截至2024年9月30日和2023年12月31日已发行并流通的股份为 和 ,分别 | ||||||||
普通股,每股面值为 $0.0001; 每股( 和 股份授权数量在2024年9月30日和2023年12月31日分别为;2024年9月30日和2023年12月31日的已发行和流通股份为 和 ,分别 | ||||||||
追加实收资本 | ||||||||
累计其他综合损失 | ( | ) | ( | ) | ||||
累积赤字 | ( | ) | ( | ) | ||||
股东权益(赤字) | ( | ) | ||||||
负债和股东权益(赤字)总额 | $ | $ |
请参阅简明综合财务报表附注。
综合损失及综合损益简明综合表
(未经审计)
(以千美元计,每股数据除外)
三个月已结束 |
九个月已结束 |
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九月三十日 |
九月三十日 |
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2024 |
2023 |
2024 |
2023 |
|||||||||||||
运营费用 |
||||||||||||||||
研究和开发 |
$ | $ | $ | $ | ||||||||||||
无形资产减值 |
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一般和行政 |
||||||||||||||||
运营费用总额 |
||||||||||||||||
运营损失 |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
其他收入(支出) |
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利息收入 |
||||||||||||||||
利息支出 |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
外汇(亏损)收益 |
( |
) | ( |
) | ||||||||||||
9月新认股权证的公允价值 |
( |
) | ( |
) | ||||||||||||
2023 年 4 月和 7 月认股权证修改的公允价值 |
( |
) | ( |
) | ||||||||||||
衍生品和认股权证负债公允价值的变化 |
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其他收入总额(支出) |
( |
) | ||||||||||||||
税收优惠前的净亏损 |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
所得税优惠 |
||||||||||||||||
净亏损 |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
A系列优先股的视作股息 |
( |
) | ( |
) | ( |
) | ||||||||||
A系列可转换优先股的视同股息 |
( |
) | ( |
) | ||||||||||||
A系列可转换优先股的灭绝收益 |
||||||||||||||||
C系列优先股的视作股息 |
( |
) | ||||||||||||||
归属于普通股股东的净亏损 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
每股普通股的基本净亏损和摊薄净亏损 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
已发行普通股、基本股和摊薄后普通股的加权平均数 |
||||||||||||||||
其他综合亏损,扣除税款 |
||||||||||||||||
净亏损 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
累积翻译调整的变化 |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
归属于普通股股东的综合亏损总额 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) |
请参阅简明综合财务报表附注。
可赎回可转换股东的合并变动简表’ 资产净额(亏损)
截至2024年9月30日和2023年9月30日的前三个月和前九个月
(未经审计)
(以千美元计,除分享数据外)
C轮 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
A轮融资 | B轮 | 可转换债券 | A轮融资 | 累计 | 总计 | |||||||||||||||||||||||||||||||||||||||||||||||||||
优先股 | 优先股 | 优先股 | 优先股 | 额外的 | 其他 | 股东权益 | ||||||||||||||||||||||||||||||||||||||||||||||||||
股票 | 股票 | 股票 | 股票 | 普通股 | 实收资本 | 综合 | 累计 | 股权 | ||||||||||||||||||||||||||||||||||||||||||||||||
数字 | 价值 | 数字 | 价值 | 数字 | 价值 | 数字 | 价值 | 数字 | 价值 | 资本 | 亏损 | 亏损 | (赤字) | |||||||||||||||||||||||||||||||||||||||||||
2022年12月31日余额 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||||||||
发行C系列可转换优先股,净额 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
被视为分红派息 分红派息以及C系列可转换优先股增值至赎回价值 | — | — | — | — | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||
普通股回购,结果为1比35和1比40的拆股并股 | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
优先股转换为普通股,净值 | ( | ) | ( | ) | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
B系列优先股赎回 | — | — | ( | ) | ( | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
以股票为基础的补偿(收入) | — | — | — | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
货币翻译调整 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
本期亏损 | — | — | — | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
2023年3月31日的结存 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||||||||
2023年4月融资中发行的普通股净额 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
由于1比40的拆股并股而发行的普通股合并 | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
4月份认股证的公允价值,扣除融资成本后分配给负债 | — | — | — | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
将A类优先股转换为普通股 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
C类优先股的被视为派息 | — | — | — | — | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||
A类赎回权的消除 | ( | ) | ( | ) | — | — | — | — | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||
发行A类优先股以偿还债务 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
赎回A类优先股以取消债务 | — | — | — | — | — | — | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
将C系列优先股与A系列优先股交换 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
基于股票的补偿 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
货币翻译调整 | — | — | — | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
本期亏损 | — | — | — | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
余额,2023年6月30日 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||||||||
2023年7月10日修改A系列优先股 | — | — | — | — | — | — | — | — | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||
发行普通股,净额2023年7月融资 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
分配给负债的7月认股权的公允价值,扣除融资成本 | — | — | — | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
赎回A系列股份 | — | — | — | — | — | — | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
由于拆股并股而进行的普通股调整 | — | — | — | — | — | — | — | — | ( | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
根据诱因行使的2023年9月权证,净额 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
根据2023年9月权证诱因发行股份的义务 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
根据9月份权证诱因行使的公平价值 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
2023年9月修改A系列优先股 | — | — | — | — | — | — | — | — | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||
基于股票的补偿 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
货币翻译调整 | — | — | — | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
本期亏损 | — | — | — | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
余额,2023年9月30日 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) |
A轮融资 |
A系列可转换债券 |
累计 |
总计 |
|||||||||||||||||||||||||||||||||||||
可转换债券 |
可赎回 |
额外的 |
其他 |
股东权益 |
||||||||||||||||||||||||||||||||||||
优先股 |
优先股 |
普通股 |
实收资本 |
综合 |
累计 |
股权 |
||||||||||||||||||||||||||||||||||
数字 |
净值 |
数字 |
净值 |
数字 |
价值 |
资本 |
亏损 |
亏损 |
(赤字) |
|||||||||||||||||||||||||||||||
2023年12月31日余额 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||||||||||||||||
将优先股转换为普通股,净值 |
( |
) | ( |
) | — | — | ||||||||||||||||||||||||||||||||||
优先股的注销 |
— | ( |
) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
优先股的视为分红 |
— | — | — | — | — | ( |
) | |||||||||||||||||||||||||||||||||
为补偿发行的股票 |
||||||||||||||||||||||||||||||||||||||||
根据公开市场销售协议(ATM)发行的普通股,减去发行成本 |
— | — | — | |||||||||||||||||||||||||||||||||||||
逆向拆分(1股拆30股)四舍五入调整 |
— | — | ( |
) | — | — | — | — | — | |||||||||||||||||||||||||||||||
基于股票的补偿(收回) |
— | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||
货币翻译调整 |
— | — | — | |||||||||||||||||||||||||||||||||||||
本期亏损 |
— | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||
2024 年 3 月 31 日余额 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||||||||||||||||
优先股转换为普通股,净额 |
( |
) | ( |
) | — | — | ||||||||||||||||||||||||||||||||||
优先股的注销 |
— | ( |
) | — | — | — | — | |||||||||||||||||||||||||||||||||
优先股的视为分红 |
— | — | — | — | — | ( |
) | |||||||||||||||||||||||||||||||||
现金less 转让 3i 交易所 warrants |
— | — | ||||||||||||||||||||||||||||||||||||||
根据公开市场销售协议(ATM)发行的普通股,减去发行成本 |
— | — | — | — | ||||||||||||||||||||||||||||||||||||
逆向拆分(1-30)舍入调整 |
— | — | ( |
) | — | — | — | — | — | |||||||||||||||||||||||||||||||
基于股价的补偿(追索) |
— | — | — | |||||||||||||||||||||||||||||||||||||
货币翻译调整 |
— | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||
本期亏损 |
— | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||
余额,2024年6月30日 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||||||||||||||||
发行可转换可赎回优先股 |
— | — | — | — | — | — | — | 2,938 | ||||||||||||||||||||||||||||||||
可转换可赎回优先股赎回 |
— | — | ( |
) | ( |
) | — | — | ( |
) | ||||||||||||||||||||||||||||||
可赎回优先股的被视为股息 |
— | — | — | — | — | ( |
) | |||||||||||||||||||||||||||||||||
根据公开市场销售协议(ATM)发行的普通股,减去发行成本 |
— | — | — | — | ||||||||||||||||||||||||||||||||||||
股票的1比30的回拆圆整调整 |
— | — | ( |
) | ||||||||||||||||||||||||||||||||||||
基于股票的补偿 |
— | — | — | |||||||||||||||||||||||||||||||||||||
货币翻译调整 |
— | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||
本期亏损 |
— | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||
余额,2024年9月30日 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ |
请参阅简明综合财务报表附注。
现金流量表简明综合报表
(未经审计)
(千美元)
截至九个月 |
||||||||
9月30日, |
||||||||
2024 |
2023 |
|||||||
经营活动产生的现金流量: |
||||||||
净亏损 |
$ | ( |
) | $ | ( |
) | ||
净亏损与经营活动使用现金的调节: |
||||||||
折旧和摊销 |
||||||||
基于股票的补偿 |
||||||||
无形资产减值 |
||||||||
未实现外汇汇兑(盈利)损失 |
( |
) | ||||||
非现金融资成本 |
||||||||
非现金利息 |
||||||||
九月份新期权的公允价值 |
||||||||
2023年4月和7月warrants的公允价值调整 |
||||||||
权证和衍生工具义务的公允价值变动 |
( |
) | ( |
) | ||||
递延所得税 |
( |
) | ||||||
运营资产和负债的变化: |
||||||||
其他流动资产 |
||||||||
税收信用应收款 |
( |
) | ( |
) | ||||
预付费用 |
||||||||
应付账款 |
( |
) | ||||||
应计负债 |
( |
) | ( |
) | ||||
应付所得税 |
( |
) | ||||||
经营租赁负债 |
( |
) | ||||||
用于经营活动的净现金 |
( |
) | ( |
) | ||||
筹资活动产生的现金流量: |
||||||||
普通股ATM销售收入,扣除发行费用 |
||||||||
普通股和预先融资权证发行的净收益 |
||||||||
与价格和权证诱导相关的权证行使的净收益 |
||||||||
C系列可转换优先股发行的收益,扣除成本 |
||||||||
B系列优先股的赎回 |
( |
) | ||||||
可转换可赎回A系列优先股发行的收益 |
||||||||
可转换可赎回A系列优先股的赎回 |
( |
) | ||||||
来自3i的本票收益 |
||||||||
3i债务和本票的偿还 |
( |
) | ( |
) | ||||
赎回A系列优先股 |
( |
) | ||||||
融资活动提供的净现金 |
||||||||
现金及现金等价物的净增加(减少) |
( |
) | ||||||
汇率变动对现金及现金等价物的影响 |
( |
) | ( |
) | ||||
现金及现金等价物期初余额 |
||||||||
现金及现金等价物期末余额 |
$ | $ | ||||||
现金流信息的补充披露: |
||||||||
支付的所得税费用 |
$ | $ | ||||||
支付的利息现金 |
$ | $ | ||||||
补充披露非现金融资和投资活动: |
||||||||
A系列可赎回优先股的转换 |
||||||||
A类优先股的被视为股息 |
( |
) | ||||||
A系列优先股灭失收益 |
||||||||
与咨询协议相关发行的股票 |
||||||||
因转换3,632,366个3i 交易所权证而发行2,359,650普通股 |
||||||||
发行A系列优先股以换取C系列优先股 |
||||||||
发行A系列优先股以偿还350美元的3i本票 |
||||||||
因消除A系列赎回权而视为股息 |
||||||||
因将C系列优先股兑换成A系列优先股而视为股息 |
||||||||
因赎回A系列优先股而视为股息 |
||||||||
视为C系列可转换优先股的股息,以及C系列优先股的增值至赎回价值 |
||||||||
因可转换可赎回A系列优先股而视为股息 |
请参阅简明综合财务报表附注。
ALLARITY THERAPEUTICS,INC。
(未经审计)
1. 组织、主要活动和陈述基础
背景
Allarity Therapeutics, Inc.及其子公司(以下简称“公司”)是一家临床阶段的药品公司,专注于开发用于癌症个性化治疗的药物,使用其专有的药物反应预测技术DRP®生成的特定药物伴随诊断。此外,公司的丹麦子公司Allarity Therapeutics Europe ApS(之前的Oncology Venture ApS)专注于抗癌药物的研发。
公司的主要运营位于Venlighedsvej 1, 2970 阿尔胡斯,丹麦。公司在美国的业务地址位于 24 学校街, 2日 层,波士顿,马萨诸塞州 02108.
流动性
随附的未经审计的简要中期合并基本报表(以下简称“基本报表”)是根据业务持续经营、实现资产以及在正常业务中满足负债和承诺的基础上编制的。
根据会计准则宗号(ASC)的要求, 205-40, 关于实体继续作为持续经营的不确定性披露,公司已评估是否存在条件和事件,综合考虑,存在对公司继续作为持续经营可能带来重大疑虑的情况。 一份 在附带的基本报表发布后的一年内。
作为一家生物制药组织,公司自成立以来,几乎将所有资源投入到了与公司产品候选者相关的药物反应预测器“DRP”的研究和开发活动、业务规划、筹集资本、建立知识产权组合、获取或发现新的产品候选者,以及为这些运营提供一般和行政支持。因此,公司自成立以来一直承担着重大的营运亏损和负现金流,并预计这种亏损和负现金流将在可预见的未来继续存在。
公司自成立以来,主要通过销售股票来资助其运营。公司已经遭受了巨额损失,并累计赤字达到$
尽管该公司认为其资本资源足以为公司下一年的持续运营提供资金 12 自财务报表发布之日起几个月,在此期间,公司的流动性可能会受到以下方面的重大影响:(1) 其通过股权发行、债务融资或其他非稀释性筹集额外资本的能力 第三-派对资金;(2) 与新的或现有的战略联盟或许可和合作安排相关的成本;(3) 与 DRP 相关的负面监管事件或意想不到的成本;(4) 任何其他意想不到的重大负面事件或成本。这些事件或成本中的一项或多项可能会对公司的流动性产生重大影响。如果公司无法在到期时履行其义务,则公司 可能 必须推迟支出,缩小研发计划的范围,或对其运营计划进行重大修改。财务报表确实如此 不 包括由于这种不确定性的结果而可能产生的任何调整。
演示基础
基本报表是按照美国公认的会计原则( "U.S. GAAP")编制的,该原则由财务会计准则委员会("FASB")为中期财务信息以及证券交易委员会("SEC")的规则和条款制定。
基本报表包含所有正常且经常性的调整,以充分陈述公司的合并资产负债表、营业成果和综合损失、可赎回可转换优先股和股东权益(赤字)、以及公司在报告期内现金流量。除另有披露外,所有这些调整仅包括那些正常经常性的调整。营运成果为 三 和 九 月结束 2024年9月30日, 针对…,在任何后续时期,结果可能是... 在测试商誉减值时,公司可以选择可预期的结果。 可以 在截至的本财政年度结束之际,可以预期 12月31日2024此处提供的财务数据不包含美国通用会计准则要求的所有披露内容,应同时阅读经审计的合并财务报表和相关说明,截至并包括截至的财政年度 在测试商誉减值时,公司可以选择 包括所有US GAAP要求的披露,应结合审计的合并财务报表和相关附注阅读,截至和截至财政年度 2023年12月31日,其中包括在公司于2024年3月8日首次向证券交易委员会提交的年度报告表格中 10-k,已修订的(称为“表格- K”)最初于 10 年 2024年3月8日提交
使用估计
根据美国公认会计原则编制基本报表需要管理层做出估计和假设,这些估计和假设会影响到未经审计的临时简明合并基本报表中资产的报告金额以及或有资产和负债的披露,同时也会影响到报告期间的营业收入和费用的报告金额。实际结果可能与这些估计和假设存在差异。
2.计划的财务报表按照美国通用会计准则(“U.S. GAAP”)的原则准备。
已经发生了 没有 在本表中讨论的重要会计政策的新修订或变化 10年度报告中,报告格式为 该租赁的当前经营负债约为这些对公司具有重要意义或潜在重要性。
组织和合并原则
所有板块内公司之间的交易和余额,包括跨公司销售产生的未实现利润,在合并时已被消除。
外币和货币翻译
功能货币是实体运营所在主要经济环境的货币。公司及其子公司主要在丹麦和美国运营。公司子公司的功能货币为其当地货币。
公司的报告货币是美元。公司将丹麦子公司的资产和负债按资产负债表日的汇率换算为美元。收入和费用按每月期间的平均汇率进行换算。未实现的汇兑收益和损失作为累积汇兑调整记录,包含在简明合并的股东权益(赤字)变动表中,作为累计其他综合损失的一个组成部分。
以其他货币计价的货币资产和负债按资产负债表日期的汇率重新计量为功能货币。以外币计价的非货币资产和负债按交易日期的汇率重新计量为功能货币。因外币交易产生的汇兑收益或损失计入各自期间的净损失的计算中。汇率转换产生的调整计入在综合损失和综合损失的压缩合并报表中,作为发生的其他综合损失。
汇率变动引起的调整金额在综合损益表中包括在其他综合损失中。在发生时,汇总利润表和综合损失中的其他。 三 月结束 2024年9月30日 及 2023公司报告了累积外币翻译亏损$
信用风险和重要供应商的集中度
可能使公司面临信用风险集中度的金融工具主要包括现金及现金等价物。公司将其现金及现金等价物存放在金融机构,金额可能超过政府保险的限额。公司不认为 在测试商誉减值时,公司可以选择 它面临额外的信用风险,超出了通常与商业银行关系相关的风险。公司已 在测试商誉减值时,公司可以选择 在其现金及现金等价物账户中经历了损失,管理层基于金融机构的质量认为,这些存款的信用风险是 在测试商誉减值时,公司可以选择 显著的。公司依赖于 第三- 第三方制造商为其项目的研究和开发活动提供产品。特别是,公司依赖并预计将继续依赖少数制造商来满足其与这些项目相关的供应和原材料需求。这些项目可能会受到这些制造服务或原材料可用性重大中断的不利影响。
现金及现金等价物
公司认为所有在购买时剩余期限为1个月或更短的高流动性投资均为货币等价物。 三 公司主要在金融机构存入资金,有时超出美国联邦存款保险公司(FDIC)保险范围。 可以 公司未曾经历超出FDIC限额的损失。 在测试商誉减值时,公司可以选择 公司未经历任何与超过FDIC限额的金额相关的损失。
累计其他综合损失
累计其他综合损失包括净损失以及股东权益(赤字)中的其他变动,这些变动源于与股东以外的交易和经济事件。公司将与外币转换和特定信用风险相关的未实现收益和损失记录为在简明合并损益表和综合损失中的其他累计综合损失的元件。期间, 三 和 九 月结束 2024年9月30日及 2023公司的其他综合收益包括货币转换调整。
最近发布的会计声明
美国会计准则的变化由FASB以会计准则更新(“ASUs”)的形式确定,并纳入FASB的会计准则编码。公司考虑所有ASUs的适用性和影响。所有ASUs截至基本报表日期发布的更新已经进行评估和确定 在测试商誉减值时,公司可以选择 为适用或预计对公司的简明合并财务状况和经营成果影响较小。
会计准则 不 尚未采纳
2023年1月, 2023年11月,ASU:对第326号主题的会计准则改进进行了澄清或解决了有关ASU2020-01的某些方面的特定问题。No. 2023-07, 分段报告(主题280:报告段落披露的改进这要求实体根据主题报告分部信息。280,分部报告。ASU中的修正案旨在通过增强对重要分部费用的披露来改善可报告分部的披露要求。本次更新中的修正案适用于在之后开始的财政年度。 2023年12月15日之后。以及在财政年度开始后的中期。 2024年12月15日。公司目前正在评估新标准对其财务报表披露的影响。
2023年1月, 2023年12月,ASU:对第326号主题的会计准则改进进行了澄清或解决了有关ASU2020-01的某些方面的特定问题。No. 2023-09, 所得税(话题 740关于所得税披露的改进。这将扩展实体所得税税率调节表中的披露,以及关于在美国和外国管辖区支付的现金税的披露。该更新将在之后开始的年度期间生效。 2024年12月15日。公司目前正在评估这一指引对其财务报表披露的影响。
在 2024年11月, 《金融工具-信用损失》以引入新的准则,用于对其范畴内的工具的信贷损失进行会计处理。ASU No. 2024-03, 损益表 – 综合收益报告 – 费用分解披露(子主题 220-40):利润表费用的分解这要求在基本报表的附注中以表格格式披露有关某些成本和费用的特定信息。此更新中的修订没有 在测试商誉减值时,公司可以选择 更改或删除当前的费用披露要求。此更新中的修订适用于财政年度,自 2026年12月15日后的财政年度开始日期起实施。 和财年开始后的中期财报 2027年12月15日。 允许提前采用。公司目前正在评估新标准对其基本报表披露的影响。
3. 无形资产
公司的知识产权和研发资产已被归类为无限使用寿命的无形资产。公司正在进行的单个重要开发项目,斯特诺帕瑞,的记录为
公司已经暂停进行正在进行的第 2 stenoparib试验,并将重点放在与FDA监管意图相关的后续试验的开发。这些进展促使公司利用加权平均资本成本(“WACC”)的贴现现金流模型对公司无形资产进行了更新的减值评估。 26%. 由于更新的减值评估结果,公司确认了一项金额为$的减值损失,以及一项外汇损失为$的损失。
4. 应计负债
The Company’s accrued liabilities are comprised of the following:
September 30, | December 31, | |||||||
($ in thousands) | 2024 | 2023 | ||||||
Development cost liability | $ | $ | ||||||
Accrued interest on milestone liabilities | ||||||||
Accrued audit and legal | ||||||||
Payroll accruals | ||||||||
Accrued contracted services and other | ||||||||
Total accrued expenses | $ | $ |
5. Convertible promissory note due to Novartis
On January 26, 2024, the Company received a termination notice from Novartis Pharma AG, a company organized under the laws of Switzerland (“Novartis”) due to a material breach of that certain license agreement dated April 6, 2018, as amended to date (the “License Agreement”). Accordingly, under the terms of the License Agreement, the Company ceased all development and commercialization activities with respect to all licensed products, all rights and licenses granted by Novartis to the Company reverted to Novartis; and all liabilities due to Novartis became immediately due and payable inclusive of interest which is continuing to accrue at
6. Convertible senior promissory notes due to 3i, LP (“3i”)
3i Convertible Senior Promissory Notes (2024) (collectively the “2024 Notes”) |
During the three months ended March 31, 2024, the Company entered into a Securities Purchase Agreement (the “SPA”), as amended, with 3i, pursuant to which three senior convertible promissory notes were issued as follows:
i. | On January 18, 2024, in an aggregate principal amount of $ |
ii. | On February 13, 2024, in an aggregate principal amount of $ |
iii. | On March 14, 2024, in an aggregate principal amount of $ |
The Company agreed to pay interest to 3i on the aggregate unconverted and then outstanding principal amount of the 2024 Notes at the rate of
Redemption
Subject to the provisions of the 2024 Notes, if, at any time while the 2024 Notes are outstanding, the Company engages in one or more subsequent financings, 3i may require the Company to first use up to 100% of the gross proceeds of such financing to redeem all or a portion of the 2024 Notes at
The 2024 Notes and accrued interest were redeemed in full and cancelled on May 6, 2024.
3i Convertible Secured Promissory Notes (2023) |
On November 22, 2022, the Company entered into a Secured Note Purchase Agreement (“Purchase Agreement”) with 3i, whereby the Company authorized the sale and issuance of three Secured Promissory Notes (each a “Note” and collectively, the “Notes”). Effective November 28, 2022, the Company issued: (1) a Note in the principal amount of $
Each Note matured on January 1, 2024, carried an interest rate of
The 3i Convertible Secured Promissory Notes were paid in full and cancelled on April 21, 2023.
7. Preferred Stock
August 2024 Series A Convertible Redeemable Preferred Stock
On August 19, 2024 (the "Closing Date"), the Company entered into a Securities Purchase Agreement (the “August 2024 SPA”) with certain purchasers (the “August 2024 Purchasers”), pursuant to which the Company issued and sold, in a private placement (the “August 2024 Offering”),
On the Closing Date, the Company filed a certificate of designation (the “August 2024 COD”) with the Secretary of the State of Delaware designating the rights, preferences and limitations of the August 2024 Preferred Stock. Under the August 2024 COD, for purposes of determining the presence of a quorum at any meeting of the stockholders of the Company at which the August 2024 Preferred Stock were entitled to vote and the voting power of the August 2024 Preferred Stock, each holder of the August 2024 Preferred Stock was entitled to a number of votes equal to shares of the Company’s common stock into which such August 2024 Preferred Stock are then convertible, disregarding, for such purposes, any limitations on conversion. The August 2024 Preferred Stock were entitled to vote on each matter submitted to a vote of the stockholders generally and shall vote together with the common stock and any other class or series of capital stock entitled to vote thereon as a single class and on an as converted to the common stock basis.
The holders of the August 2024 Preferred Stock were entitled to dividends, on an as-if converted basis, equal to dividends actually paid, if any, on the common stock. The August 2024 Preferred Stock was convertible, at the option of the holders and, in certain circumstances, by the Company, into common stock, as determined by dividing the net purchase price of $
On the Closing Date, the Company and the August 2024 Purchasers also entered into a Registration Rights Agreement (the “August 2024 RRA”), pursuant to which the Company agreed to file a registration statement with the SEC, to register for resale the common stock issuable upon the conversion of the August 2024 Preferred Stock. The registration statement was filed with the SEC on August 30, 2024.
All of the August 2024 Preferred Stock was redeemed in September 2024. As a result of the redemption of the August 2024 Preferred Stock, the Company presented a deemed dividend of $
Series A Convertible Preferred Stock and Common Stock Purchase Warrants |
Amendments to Series A Convertible Preferred Stock
Determination of Conversion Price Adjustments for Series A Preferred Stock |
On December 9, 2022, the Company and 3i entered into a letter agreement (the “2022 Letter Agreement”) which provided that pursuant to Section 8(g) of the Company’s Certificate of Designations for the Series A Preferred Stock (the “COD”), the Company and 3i agreed that the Conversion Price (as defined in the COD) was modified to mean the lower of: (i) the Closing Sale Price (as defined in the COD) on the trading date immediately preceding the Conversion Date (as defined in the COD) and (ii) the average Closing Sale Price (as defined in the COD) of the common stock for the five trading days immediately preceding the Conversion Date (as defined in the COD), for the Trading Days (as defined in the COD) through and inclusive of January 19, 2023. Any conversion which occurs shall be voluntary at the election of 3i, which shall evidence its election as to the Series A Preferred Stock being converted in writing on a conversion notice setting forth the then Minimum Price (as defined in the COD). Management determined that the adjustment made to the Conversion Price is not a modification of the COD which allows for adjustments to the Conversion Price (as defined in the COD) at any time by the Company and the other terms of the COD remained unchanged.
On January 23, 2023, the Company and 3i amended the 2022 Letter Agreement, to provide that the modification of the term Series A Preferred Stock Conversion Price (the “Series A Preferred Stock Conversion Price”) to mean the lower of: (i) the Closing Sale Price (as defined in the COD) on the trading date immediately preceding the Conversion Date (as defined in the COD and (ii) the average Closing Sale Price (as defined in the COD) of the Company’s shares of common stock for the five trading days immediately preceding the Conversion Date (as defined in the COD), for the Trading Days (as defined in the COD) will be in effect until terminated by the Company and 3i.
Modification to Conversion Price of Series A Preferred Stock and 3i Exchange Warrants |
On January 14, 2024, pursuant to the terms of the First Note, the Company modified the conversion price of the 3i Exchange Warrants from $
On February 13, 2024, pursuant to the terms of the Second Note, the Company modified the conversion price of the 3i Exchange Warrants from $
On March 14, 2024, pursuant to the terms of the Third Note, the Company modified the conversion price of the 3i Exchange Warrants from $
During the period April 1, 2024, through May 2, 2024, the Company amended the conversion prices of the Series A Convertible Preferred Stock, the Exchange Warrants and the 2024 Notes to equal the current last sale price of its shares of common stock of $
Accounting
Series A Preferred Stock |
As a result of fair value adjustments during the nine months ended September 30, 2024, the Company recognized a deemed dividend of $
January 14 – March 14, | April 5 – May 2, | |||||||
2024 | 2024 | |||||||
Initial exercise price | | | ||||||
Stock price on valuation date | | | ||||||
Risk-free rate | ||||||||
Term (in years) | ||||||||
Rounded annual volatility |
3i Exchange Warrants |
The 3i Exchange Warrants were identified as a freestanding financial instrument and meet the criteria for derivative liability classification, initially measured at fair value. Subsequent changes in fair value are recognized through earnings for as long as the contracts continue to be classified as a liability. The measurement of fair value is determined utilizing an appropriate valuation model considering all relevant assumptions current at the date of issuance and at each reporting period (i.e., share price, exercise price, term, volatility, risk-free rate and expected dividend rate).
Series A Preferred Stock and 3i Exchange Warrant Conversions
During the nine months ended September 30, 2024:
(a) | 3i exercised its option to convert |
(b) | 3i exercised its option to convert |
During the nine months ended September 30, 2023, 3i exercised its option to convert
The accounting for the Series A Preferred Stock and Warrants is illustrated in the tables below:
Consolidated | ||||||||||||||||||||
Statement of | ||||||||||||||||||||
Operations & | ||||||||||||||||||||
Comprehensive | ||||||||||||||||||||
Consolidated Balance Sheets | Loss | |||||||||||||||||||
Fair value | ||||||||||||||||||||
Series A Convertible | adjustment to | |||||||||||||||||||
Series A | Redeemable | Additional | derivative | |||||||||||||||||
Warrant | Preferred | Preferred | paid-in | and warrant | ||||||||||||||||
($ in thousands) | liability | Stock | Stock | capital | liabilities | |||||||||||||||
Balances, December 31, 2023 | $ | $ | $ | ( | ) | $ | ||||||||||||||
Conversion of Series A Preferred Stock, net | ( | ) | ||||||||||||||||||
Extinguishment of Series A Preferred Stock | ( | ) | ||||||||||||||||||
Deemed dividend on January 14, 2024, modification | ( | ) | ||||||||||||||||||
Fair value adjustment | ( | ) | — | |||||||||||||||||
Balances, March 31, 2024 | ( | ) | ||||||||||||||||||
Conversion of Series A Preferred Stock, net | ( | ) | ||||||||||||||||||
Extinguishment of Series A Preferred Stock | ( | ) | ||||||||||||||||||
Deemed dividend on modification of Series A Preferred Stock | ( | ) | ||||||||||||||||||
Cashless exercise of 3i Exchange Warrants | ( | ) | ||||||||||||||||||
Fair value adjustment | ( | ) | — | |||||||||||||||||
Balances, June 30, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Fair value adjustment | ( | ) | ||||||||||||||||||
Issuance of redeemable preferred stock | — | — | — | — | ||||||||||||||||
Redemption of redeemable preferred stock | ( | ) | ||||||||||||||||||
Deemed dividend on redeemable preferred stock | ( | ) | ||||||||||||||||||
Balances, September 30, 2024 | $ | $ | $ | $ | ( | ) | $ |
Consolidated | ||||||||||||||||||||
Statement of | ||||||||||||||||||||
Operations & | ||||||||||||||||||||
Comprehensive | ||||||||||||||||||||
Consolidated Balance Sheets | Loss | |||||||||||||||||||
Series A | ||||||||||||||||||||
Preferred | Fair value | |||||||||||||||||||
Convertible | adjustment to | |||||||||||||||||||
Stock – | Series A | Additional | derivative | |||||||||||||||||
Warrant | Mezzanine | Preferred | paid-in | and warrant | ||||||||||||||||
($ in thousands) | liability | Equity | Stock | capital | liabilities | |||||||||||||||
Balances, December 31, 2022 | $ | 374 | $ | 2,001 | $ | — | $ | (3,756 | ) | $ | — | |||||||||
Conversion of Series A Preferred Stock, net | ( | ) | ||||||||||||||||||
Fair value adjustment | ( | ) | — | |||||||||||||||||
Balances, March 31, 2023 | ( | ) | ||||||||||||||||||
Conversion of Series A Preferred Stock | ( | ) | ( | ) | ||||||||||||||||
Elimination of redemption rights on Series A Preferred stock; deemed dividend of $ | ( | ) | ( | ) | ||||||||||||||||
Redemption of Series A Preferred Stock | ( | ) | — | |||||||||||||||||
Issuance of Series A Preferred stock as repayment of $ debt; $ charged to interest expense | — | — | — | — | ||||||||||||||||
Exchange of Series C Preferred Stock for Series A Preferred Stock; deemed dividend of $ | ( | ) | ||||||||||||||||||
Fair value adjustment | — | ( | ) | |||||||||||||||||
Balances, June 30, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||
July 10, 2023 modification | ( | ) | ||||||||||||||||||
Redemption of Series A Preferred stock | ( | ) | ( | ) | ||||||||||||||||
September 14, 2023 modification | ( | ) | ||||||||||||||||||
Fair value adjustment | ( | ) | ||||||||||||||||||
Balances, September 30, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) |
Series C Convertible Preferred Stock
On February 28, 2023, the Company entered into a Securities Purchase Agreement (the “2023 SPA”) with 3i for the purchase and sale of
The Company evaluated the terms of the Series C Preferred Stock as required pursuant to ASC 570, 480, 815 and ASU 2020-06, and concluded the Series C Preferred Stock fair value to be $
The Company treated the exchange of Series C Preferred Stock for Series A Preferred Stock as an extinguishment as there has been a fundamental change in the nature of the instrument and applied the derecognition accounting model in ASC 260-10-S99-2. Accordingly, the Company had recognized the difference between (1) the fair value of the consideration transferred to the holders of the preferred shares of $
8. Derivative Liabilities
Continuity of Common Share Purchase Warrant and 3i Warrant Derivative Liabilities |
Warrant liabilities are categorized within Level 3 of the fair value hierarchy and are measured at fair value on a recurring basis as follows (in thousands):
The Common Share Purchase Warrants, comprised of warrants issued in April 2023, July 2023, and September 2023, and 3i Exchange Warrant derivative liabilities are measured at fair value at each reporting period and the reconciliation of changes in fair value during the year ended December 31, 2023, and during the nine months ended September 30, 2024, is presented in the following tables:
Common | ||||||||
Share | ||||||||
Purchase | 3i Exchange | |||||||
($ in thousands) | Warrants | Warrants | ||||||
Balance as of January 1, 2023 | $ | $ | ||||||
Issuance date fair value of April, July & September 2023 Common share purchase warrants | ||||||||
Modifications to fair value upon exercise | ||||||||
Change in fair value adjustment of derivative and warrant liabilities | ( | ) | ||||||
Amount transferred to Equity | ( | ) | ( | ) | ||||
Balance as of December 31, 2023 | $ | $ | ||||||
Fair value per Common warrant / 3i Warrant / issuable at December 31, 2023 | $ | $ |
Common | ||||||||
Share | ||||||||
Purchase | 3i Exchange | |||||||
($ in thousands) | Warrants | Warrants | ||||||
Balance at January 1, 2024 | $ | $ | ||||||
Change in fair value adjustment of derivative and warrant liabilities | ( | ) | ( | ) | ||||
Cashless conversion of 3i Exchange Warrants | ( | ) | ||||||
Balance at September 30, 2024 | $ | $ | ||||||
Fair value per Common warrant issuable at September 30, 2024 | $ | $ |
Common Share Purchase Warrants – Valuation Inputs |
On September 30, 2024, the Company used the Black-Scholes Merton model to estimate the fair value of the Common Share Purchase Warrants derivative liability at $
September 2023 | ||||||||||||
April 2023 | July 2023 | Inducement | ||||||||||
Warrants | Warrants | Warrants | ||||||||||
Initial exercise price | $ | $ | $ | |||||||||
Stock price on valuation date | $ | $ | $ | |||||||||
Risk-free rate | % | % | % | |||||||||
Term (in years) | ||||||||||||
Rounded annual volatility | % | % | % |
3i Exchange Warrants - Valuation Inputs
On September 30, 2023, the Company utilized the reset strike options Type 2 model by Espen Garder Haug and Black-Scholes Merton models to estimate the fair value of the 3i Warrants to be approximately $
September 30, | ||||
2023 | ||||
Initial exercise price | $ | |||
Stock price on valuation date | $ | |||
Risk-free rate | % | |||
Expected life of the Warrant to convert (years) | ||||
Rounded annual volatility | % | |||
Timing of liquidity event | Q4 - 2023 | |||
Expected probability of event | % |
9. Stockholders’ Equity
Common Stock
On September 9, 2024, the Company filed the Sixth Certificate of Amendment to the Certificate of Incorporation with the Delaware Secretary of State to decrease the number of authorized shares from,
Reverse Stock Splits
On April 4, 2024, the Company filed a Fifth Certificate of Amendment to the Certificate of Incorporation with the Delaware Secretary of State to effect a 1-for-
On September 9, 2024, the Company filed the Seventh Certificate of Amendment with the Secretary of State of the State of Delaware to effect a 1-for-
All share and per share information has been retroactively adjusted to give effect to the April Reverse Stock Split and September Reverse Stock Split for all periods presented, unless otherwise indicated.
2023 Shelf
On November 2, 2023, the Company filed a shelf registration statement (File No. 333-275282) on Form S-3, which was declared effective on November 29, 2023 (the "Shelf"). Approximately $
ATM Facility
On March 19, 2024, the Company entered into an At-The-Market Issuance Sales Agreement, as amended (the “Sales Agreement”) with Ascendiant Capital Markets, LLC (“Ascendiant”) pursuant to which, the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, par value $
Under the Sales Agreement, Ascendiant may sell shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act. Ascendiant will use commercially reasonable efforts to sell the shares from time to time, based upon instructions from the Company (including any price, time or size limits or other customary parameters or conditions the Company may impose). The Company agreed to pay Ascendiant a commission of
For the three and nine months ended September 30, 2024, the Company sold an aggregate of
Series A Preferred Stock
During the six months ended June 30, 2024, 3i exercised its option to convert
Exchange Warrants
3i converted
Settlement Agreement
In accordance with the terms of the settlement agreement between the Company and James G. Cullem, the Company's former CEO, the Company issued
Equity Incentive Plan
The Company has in effect the Allarity Therapeutics, Inc. 2021 Incentive Plan (as amended, the “2021 Incentive Plan"). Under the 2021 Incentive Plan, the compensation committee of the Company’s board of directors is authorized to grant stock-based awards to employees, directors, consultants, independent contractors and advisors. The 2021 Incentive Plan authorizes grants to issue up to
At the 2024 Annual Meeting of Stockholders of the Company held on September 3, 2024, the Company’s stockholders, upon the recommendation of the Company’s board of directors, approved an amendment to the 2021 Incentive Plan, as amended, to increase the aggregate number of shares of the Company's common stock authorized for grant under the 2021 Incentive Plan from
The number of shares available for grant and issuance under the 2021 Incentive Plan will be increased on January 1st of each of 2022 through 2031, by the lesser of (a)
Total shares available for the issuance of stock-based awards under the Company’s 2021 Incentive Plan was
The Company granted inducement awards consisting of
Restricted Stock Units
The following table summarizes the restricted stock unit activity during the nine months ended September 30, 2024:
Weighted | ||||||||
Number of | Average Grant | |||||||
Units | Date Fair Value | |||||||
Unvested balance at December 31, 2023 | ||||||||
Granted | $ | |||||||
Unvested balance at September 30, 2024 | $ |
At September 30, 2024, the Company had unrecognized stock-based compensation expense related to restricted stock awards of $
Stock Options
The following table summarizes stock option activity during the nine months ended September 30, 2024:
Weighted | ||||||||||||||||
Average | ||||||||||||||||
Weighted | Remaining | Aggregate | ||||||||||||||
Number | Average | Contractual | Intrinsic Value | |||||||||||||
of Options | Exercise Price | Term (years) | (in thousands) | |||||||||||||
Outstanding at December 31, 2023 | $ | |||||||||||||||
Cancelled/forfeited | ( | ) | — | |||||||||||||
Outstanding at September 30, 2024 | $ | 4,699,177 | 2.7 | — | ||||||||||||
Expected to vest | $ | |||||||||||||||
Exercisable | $ |
There were
Stock-based compensation expense has been reported in the Company's condensed consolidated statements of operations as follows:
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
($ in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
Research and development | $ | $ | $ | $ | ||||||||||||
General and administrative | ( | ) | ||||||||||||||
Total stock-based compensation expense | $ | $ | $ | $ |
10. License and Development Agreements
License Agreement with Novartis for Dovitinib
On January 26, 2024, the Company received a termination notice from Novartis due to a material breach of the License Agreement. Accordingly, under the terms of the License Agreement, the Company ceased all development and commercialization activities with respect to all licensed products, all rights and licenses granted by Novartis to the Company reverted to Novartis; and all liabilities due to Novartis became immediately due and payable inclusive of interest which is continuing to accrue at
License Agreement with Eisai Inc. for Stenoparib
The Company holds the exclusive worldwide rights to all preventative, therapeutic and/or diagnostic uses related to cancer in humans and by amendment to the agreement on December 11, 2020, viral infections in humans (including, but not limited to, coronaviruses) for stenoparib from Eisai, Inc. (“Eisai”) pursuant to a license agreement (the “Eisai License Agreement”). Pursuant to the Eisai License Agreement, the Company is solely responsible for the development of stenoparib during the term of the Eisai License Agreement. Eisai License Agreement also provides for a joint development committee consisting of six members, three appointed by the Company and three appointed by Eisai. One of the Company’s members of the joint development committee is designated chair of the committee and has the power to break any deadlock in decisions by the committee that must be made by a majority vote with each representative having one vote. The purpose of the committee is to implement and oversee development activities for stenoparib pursuant to the clinical development plan, serving as a forum for exchanging data, information and development strategy.
Effective July 12, 2022, the Company’s July 6, 2017 Exclusive License Agreement with Eisai Inc. (the “Third Amendment”), the terms of the original exclusive license were further amended in order to (1) further postpone the due date of the extension payment and extend the deadline for the Company’s successful completion of its first Phase 1b or Phase 2 clinical trial for stenoparib beyond December 31, 2022; and (2) amend terms related to Eisai’s right of termination of development.
On May 26, 2023, the Company and Eisai entered into a fourth amendment to the Exclusive License Agreement with an effective date of May 16, 2023, to postpone the extension payment, restructure the payment schedule and extend the deadline to complete enrollment in a further Phase 1b or Phase 2 Clinical Trial for the stenoparib. The Company agreed to pay Eisai in periodic payments as follows: (i) $
On February 26, 2024, in exchange for an additional $
On August 2, 2024, the Company and Eisai entered into a sixth amendment to the Exclusive License Agreement with an effective date of August 2, 2024. The terms of the amended exclusive license were further amended in order to (1) amend the definition of a successful completion and (2) amend the terms related to Eisai's right of termination for development.
Development Milestone Payments
The Company has agreed to make milestone payments to Eisai in connection with the development of stenoparib by the Company or its affiliates, or by a third-party program acquirer that assumes control of the stenoparib development program from the Company corresponding to: (i) successful completion of a Phase 2 clinical trial; (ii) upon dosing of the first patient in the first Phase 3 clinical trial; (iii) upon submission of the first NDA with the FDA; (iv) submission of an MAA to the EMA; (v) submission of an NDA to the MHLW in Japan; (vi) upon receipt of authorization by the FDA to market and sell a licensed product; (vii) upon receipt of approval of an MAA by the EMA for a licensed product; and (viii) upon receipt of approval by the MHLW in Japan for a licensed product. If all milestones have been achieved, the Company may be obligated to pay Eisai up to a maximum of $
Royalty Payments
In addition to the milestone payments described above, the Company has agreed to pay Eisai royalties based on annual incremental sales of product derived from stenoparib in an amount between
The Company is obligated to pay royalties under the agreement on a country-by-country and product-by-product basis for a period that commences with the first commercial sale of a product in such country and expiring on the later of (i) the expiration of the last valid claim of any and all Eisai patents, OV patents and joint patents covering such product in such country; or, (ii) the 15 year anniversary of the date of first commercial sale of such licensed product in such country. However, the agreement may be terminated sooner without cause by the Company upon 120 days prior written notice, or upon written notice of a material breach of the agreement by Eisai that is not cured within 90 days (30 days for a payment default).
Eisai also has the right to terminate the agreement upon written notice of a material breach of the agreement by the Company that is not cured within 90 days (30 days for a payment default) or if the Company files for bankruptcy.
Option to Reacquire Rights to Stenoparib
For the period commencing with enrollment of the first five patients in a Phase 2 clinical trial pursuant to the clinical development plan and ending 90 days following successful completion of such Phase 2 clinical trial, Eisai has the option to reacquire the Company's licensed rights to develop stenoparib for a purchase price equal to the fair market value of the Company's rights, giving effect to the stage of development of stenoparib that the Company has completed under the agreement. The Company commenced a Phase 2 clinical trial April 15, 2019, and as of the date of the Financial Statements, Eisai has not indicated an intention to exercise its repurchase option.
11. Related party
During the three and nine months ended September 30, 2024, Thomas H. Jensen, a director of the Company, was paid $
During the three and nine months ended September 30, 2023, Thomas H. Jensen was paid $
12. Loss per share of common stock
Basic loss per share is derived by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share includes the effect, if any, of the potential exercise or conversion of securities, such as warrants and stock options, which would result in the issuance of incremental shares of common stock unless such effect is anti-dilutive. In calculating the basic and diluted net loss per share applicable to common stockholders, the weighted average number of shares remained the same for both calculations because when a net loss exists, dilutive shares are not included in the calculation. Potentially dilutive securities outstanding, as determined by the latest applicable conversion price, that have been excluded from diluted loss per share due to being anti-dilutive include the following:
As of September 30, | ||||||||
2024 | 2023 | |||||||
Warrants | ||||||||
Options | ||||||||
Unvested restricted stock units | ||||||||
Series A Convertible Preferred stock | ||||||||
13. Financial Instruments
The following tables present information about the Company’s financial instruments measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values:
Fair Value Measurements as of September 30, 2024 | ||||||||||||||||
($ in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Liabilities: | ||||||||||||||||
Warrant liability | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
$ | $ | $ | ( | ) | $ | ( | ) |
Fair Value Measurements as of December 31, 2023 | ||||||||||||||||
($ in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Liabilities: | ||||||||||||||||
Warrant liability | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
Derivative warrant liability | ( | ) | ( | ) | ||||||||||||
$ | $ | $ | ( | ) | $ | ( | ) |
Methods used to estimate the fair values of the Company's financial instruments, not disclosed elsewhere in the Financial Statements, are as follows:
When available, the Company’s marketable securities are valued using quoted prices for identical instruments in active markets. If the Company is unable to value its marketable securities using quoted prices for identical instruments in active markets, the Company values its investments using broker reports that utilize quoted market prices for comparable instruments. The Company has no financial assets or liabilities measured using Level 2 inputs. Financial assets and liabilities are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies, or similar techniques, and at least one significant model assumption or input is unobservable.
The Company recognizes its derivative liabilities as Level 3 and values its derivatives using the methods described in Note 8. While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The primary assumptions that would significantly affect the fair values using terms in the notes that are subject to volatility and market price of the underlying shares of common stock.
The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. The Company’s policy is to recognize transfers into and out of levels within the fair value hierarchy at the date the actual event or change in circumstances that caused the transfer occurs. When a determination is made to classify an asset or liability within Level 3, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement. There were no transfers between Level 1 or Level 2 during the nine months ended September 30, 2024 and 2023.
14. Commitments and Contingencies
Indemnification
In accordance with its certificate of incorporation, bylaws, and indemnification agreements, the Company has indemnification obligations to its officers and directors for certain events or occurrences, subject to certain limits, while they are serving at the Company's request in such capacity.
SEC Investigation
On July 19, 2024, the Company received a “Wells Notice” from the Staff of the SEC relating to the Company’s previously disclosed SEC investigation. The Wells Notice relates to the Company’s disclosures regarding meetings with the United States Food and Drug Administration (the “FDA”) regarding the Company’s NDA for Dovitinib or Dovitinib-DRP, which was submitted to the FDA in 2021. The Company understands that all conduct relating to the SEC Wells Notice occurred during or prior to fiscal year 2022. The Company also understands that three of its former officers received Wells Notices from the SEC relating to the same conduct. A Wells Notice is neither a formal charge of wrongdoing nor a final determination that the recipient has violated any law. The Wells Notice informed the Company that the SEC Staff has made a preliminary determination to recommend that the SEC file an enforcement action against the Company that would allege certain violations of the federal securities laws. The Company is continuing to cooperate with the SEC and maintains that its actions were appropriate, and pursuing the Wells Notice process.
Nasdaq Delisting Notifications
On June 18, 2024, the Company received a letter from the Nasdaq Listing Qualifications Staff (the “Staff”) of Nasdaq indicating that the Company has not complied with the Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”) which is the requirement that for 30 consecutive business days the bid price for the Company’s common stock close above the $1 per share minimum bid price requirement for continued inclusion on Nasdaq. On July 30, 2024, the Company attended a hearing before a Nasdaq Hearings Panel (the "Panel"), and by decision date August 15, 2024, the Panel granted the Company's request for an extension through September 6, 2024 to obtain shareholder approval for a reverse split at a ratio that will allow the Company to demonstrate compliance with the Bid Price Rule. This approval was granted by Allarity's shareholders at the Company's Annual Meeting of Stockholders on September 3, 2024. On October 9, 2024, the Company was formally notified by the Staff that the Company has evidenced compliance with the Bid Price Requirement for continued listing on the Nasdaq, as set forth in Nasdaq Listing Rule 5550(a)(2).
Class Action
On September 13, 2024, a purported class action captioned Osman Mukeljic v. Allarity Therapeutics, Inc., et al, 1:24-cv-06952, was filed in the United States District Court for the Southern District of New York against the Company and certain of its current and former officers. The complaint alleges, among other things, that defendants made false and misleading statements and/or failed to disclose information related to Dovitinib NDA’s continued regulatory prospects and purported misconduct in connection with the Dovitinib NDA and/or the Dovitinib-DRP PMA. The complaint asserts violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder against all defendants as well as violations of Section 20(a) of the Exchange Act of 1934 against the individual defendants. The Company believes that the class action is without merit and plans to vigorously defend itself against these claims. At this time, there can be no assurance that the Company will prevail in the lawsuits and the Company cannot currently estimate the possible loss or range of losses, if any, that it may experience in connection with this litigation.
15. Subsequent Events
For its Financial Statements as of September 30, 2024, and for the three months then ended, the Company evaluated subsequent events through the date on which the Financial Statements were issued. All subsequent events not disclosed elsewhere in this Quarterly Report are disclosed below.
ATM Facility
During the period October 1, 2024 through November 13, 2024, the Company had sold
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-Looking Statements
You should read the following discussion and analysis of our financial condition and results of operations together with “Cautionary Note Regarding Forward-Looking Statements” and our condensed consolidated financial statements and related notes included under Item 1 of this Quarterly Report as well as our most recent Annual Report on Form 10-K for the year ended December 31, 2023, as amended, including Part 1, Item 1A “Risk Factors.”
The forward-looking statements contained in this report reflect our views and assumptions as of the effective date of this report. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. Except as required by law, we assume no responsibility for updating any forward-looking statements to reflect events or circumstances that may arise after the date of this report, except as required by applicable law.
We qualify all of our forward-looking statements by these cautionary statements. In addition, with respect to all of our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Overview
We are a biopharmaceutical company focused on discovering and currently developing a highly targeted anti-cancer drug candidate. Through the use of our Drug Response Predictor (DRP®) platform, we identify the value in drug assets that have otherwise been discontinued by identifying patient populations where these drugs are active. Our lead drug candidate, stenoparib, is a small molecule dual inhibitor of the poly-ADP-ribose polymerase (PARP 1/2) as well as tankyrase 1/2.
Recent Developments
Nasdaq Delisting Notifications
On June 18, 2024, we received a letter from the Nasdaq Listing Qualifications Staff (the “Staff”) of Nasdaq indicating that the we have not complied with the Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”) which is the requirement that for 30 consecutive business days the bid price for our common stock close above the $1 per share minimum bid price requirement for continued inclusion on the Nasdaq Capital Market ("Nasdaq"). On June 27, 2024, we were granted a hearing before a Nasdaq Hearings Panel (the "Panel"). On July 30, 2024, we attended a hearing before the Panel, and by decision date August 15, 2024, the Panel granted our request for an extension through September 6, 2024 to obtain shareholder approval for a reverse split at a ratio that will allow us to demonstrate compliance with the Bid Price Rule. This approval was granted by our shareholders at our Annual Meeting of Stockholders on September 3, 2024. On October 9, 2024, we were formally notified by Nasdaq that we have evidenced compliance with the Bid Price Requirement for continued listing on the Nasdaq, as set forth in Nasdaq Listing Rules 5550(a)(2).
Reverse Stock Splits
On April 4, 2024, we effected a 1-for-20 reverse stock split (the "April Reverse Stock Split") of the shares of common stock effective as of April 9, 2024. No fractional shares were issued in connection with the April Reverse Stock Split. If, as a result of the April Reverse Stock Split, a stockholder would otherwise have been entitled to a fractional share, each fractional share was rounded up to the next whole number. The April Reverse Stock Split resulted in a reduction of our outstanding shares of common stock as of March 31, 2024, from 228,487 to 11,426. The par value of our authorized stock remained unchanged at $0.0001.
On September 9, 2024, we effected a 1-for-30 reverse stock split (the "September Reverse Stock Split") of the shares of common stock, effective September 11, 2024. As a result of the September Reverse Stock Split, every 30 shares of common stock outstanding immediately prior to effectiveness of the September Reverse Stock Split were combined and converted into one share of common stock without any change in the par value per share. The September Reverse Stock Split became effective on September 11, 2024, and the common stock was quoted on the Nasdaq Stock Market on a post-split basis at the open of business on September 11, 2024. No fractional shares were issued in connection with the September Reverse Stock Split. Stockholders who would have otherwise been entitled to a fraction of one share of common stock as a result of the September Reverse Stock Split instead received one whole share of common stock. We issued 97,190 shares of common stock to shareholders who had been entitled to a fraction of one share.
All share and per share information has been retroactively adjusted to give effect to the April Reverse Stock Split and September Reverse Stock Split for all periods presented, unless otherwise indicated.
ATM Facility
On March 19, 2024, we entered into an At-The-Market Issuance Sales Agreement, as amended (the "Sales Agreement") with Ascendiant Capital Markets, LLC ("Ascendiant") under which we may offer and sell, from time to time at our sole discretion, shares of our common stock, par value $0.0001 per share, having an aggregate gross sales price of up to $50 million, to or through the Ascendiant. The offer and sales of the shares are made pursuant to a previously filed shelf registration statement on Form S-3 (File No. 333-275282), originally filed with the Securities and Exchange Commission (the "SEC") on November 2, 2023 and declared effective on November 29, 2023, and the related prospectus supplement dated September 9, 2024 and filed with the SEC on such date. We will pay the Ascendiant a commission of 3.0% of the gross proceeds from the sales of shares sold through Ascendiant under the Sales Agreement. We will also reimburse the Ascendiant for certain expenses incurred in connection with the Sales Agreement. Both we and Ascendiant may each terminate the Sales Agreement at any time upon specified prior written notice. For the three months ended September 30, 2024, we sold an aggregate of 1,493,878 shares of our common stock pursuant to the Sales Agreement, resulting in net proceeds of approximately $5.4 million after deducting underwriting discounts.
August 2024 Series A Convertible Redeemable Preferred Stock
On August 19, 2024 (the "Closing Date") we entered into a Securities Purchase Agreement (the “August 2024 SPA”) with certain purchasers (the “August 2024 Purchasers”), pursuant to which we issued and sold, in a private placement (the “August 2024 Offering”), 35,000 shares of our Series A Convertible Redeemable Preferred Stock, par value $0.0001 per share (the “August 2024 Preferred Stock”), for net proceeds of approximately $2.9 million in the aggregate for the August 2024 Offering, after the deduction of discounts, fees and offering expenses.
On the Closing Date, we filed a certificate of designation (the “August 2024 COD”) with the Secretary of the State of Delaware designating the rights, preferences and limitations of the August 2024 Preferred Stock. Under the August 2024 COD, for purposes of determining the presence of a quorum at any meeting of the stockholders of Allarity at which the August 2024 Preferred Stock are entitled to vote and the voting power of the August 2024 Preferred Stock, each holder of the August 2024 Preferred Stock shall be entitled to a number of votes equal to shares of our common stock into which such August 2024 Preferred Stock are then convertible, disregarding, for such purposes, any limitations on conversion. The August 2024 Preferred Stock shall be entitled to vote on each matter submitted to a vote of the stockholders generally and shall vote together with the common stock and any other class or series of capital stock entitled to vote thereon as a single class and on an as converted to the common stock basis.
The holders of the August 2024 Preferred Stock are entitled to dividends, on an as-if converted basis, equal to dividends actually paid, if any, on the common stock. The August 2024 Preferred Stock is convertible, at the option of the holders and, in certain circumstances, by us, into common stock, as determined by dividing the net purchase price of $90 per share by the conversion price of $5.10, at the option of the holders.
On the Closing Date, we entered into a Registration Rights Agreement (the “August 2024 RRA”) with the August 2024 Purchasers, pursuant to which we agreed to file a registration statement with the SEC, to register for resale the common stock issuable upon the conversion of the August 2024 Preferred Stock. The registration statement was filed with the SEC on August 30, 2024.
In connection with the August 2024 Offering, we paid $0.2 million to Ascendiant Capital Markets, LLC, our placement agent.
SEC Investigation
On July 19, 2024, we received a “Wells Notice” from the Staff of the SEC relating to our previously disclosed SEC investigation. The Wells Notice relates to our disclosures regarding meetings with the United States Food and Drug Administration (the “FDA”) regarding our NDA for Dovitinib or Dovitinib-DRP, which was submitted to the FDA in 2021. We understand that all conduct relating to the SEC Wells Notice occurred during or prior to fiscal year 2022. We also understand that three of our former officers received Wells Notices from the SEC relating to the same conduct. A Wells Notice is neither a formal charge of wrongdoing nor a final determination that the recipient has violated any law. The Wells Notice informed us that the SEC Staff has made a preliminary determination to recommend that the SEC file an enforcement action against us that would allege certain violations of the federal securities laws. We are continuing to cooperate with the SEC and maintains that our actions were appropriate, and pursuing the Wells Notice process.
Class Action
On September 13, 2024, a purported class action captioned Osman Mukeljic v. Allarity Therapeutics, Inc., et al, 1:24-cv-06952, was filed in the United States District Court for the Southern District of New York against us and certain of our current and former officers. The complaint alleges, among other things, that defendants made false and misleading statements and/or failed to disclose information related to Dovitinib NDA’s continued regulatory prospects and purported misconduct in connection with the Dovitinib NDA and/or the Dovitinib-DRP PMA. The complaint asserts violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder against all defendants as well as violations of Section 20(a) of the Exchange Act of 1934 against the individual defendants. We believe that the class action is without merit and plan to vigorously defend ourselves against these claims. At this time, there can be no assurance that we will prevail in the lawsuits and we cannot currently estimate the possible loss or range of losses, if any, that it may experience in connection with this litigation.
Risks and Uncertainties
We are subject to risks common to companies in the biotechnology industry, including but not limited to, risks of failure of preclinical studies and clinical trials, the need to obtain marketing approval for any drug product candidate that we may identify and develop, the need to successfully commercialize and gain market acceptance of our product candidate, dependence on key personnel and collaboration partners, protection of proprietary technology, compliance with government regulations, development by competitors of technological innovations, and the ability to secure additional capital to fund operations. Our product candidate currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval prior to commercialization. Even if our research and development efforts are successful, it is uncertain when, if ever, we will realize significant revenue from product sales.
Recently Issued Accounting Pronouncements
See Note 2, “Summary of Significant Accounting Policies”, to our unaudited condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of recent accounting pronouncements.
Financial Operations Overview
Since our inception in September of 2004, we have focused substantially all our resources on conducting research and development activities, including drug discovery and preclinical studies, establishing, and maintaining our intellectual property portfolio, the manufacturing of clinical and research material, hiring personnel, raising capital and providing general and administrative support for these operations. In recent years, we have recorded very limited revenue from collaboration activities, or any other sources. We have funded our operations to date primarily from convertible notes and the issuance and sale of our ordinary shares.
We have incurred net losses in each year since inception. Our net losses were $17.1 million and $10.2 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $111.5 million and cash and cash equivalents of $18.5 million. Substantially all our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to continue to incur significant expenses and increasing operating losses over at least the next several years. We expect our expenses will increase substantially in connection with our ongoing activities, as we:
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advance our drug candidate through clinical trials; |
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pursue regulatory approval of our drug candidate; |
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operate as a public company; |
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continue our preclinical programs and clinical development efforts; |
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continue research activities for the discovery of new drug candidates; and |
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manufacture supplies for our preclinical studies and clinical trials. |
Components of Operating Expenses
Research and Development Expenses
Research and development expenses include:
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expenses incurred under agreements with third-party contract organizations, and consultants; |
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costs related to production of drug substance, including fees paid to contract manufacturers; |
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laboratory and vendor expenses related to the execution of preclinical trials; and |
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employee-related expenses, which include salaries, benefits, and stock-based compensation. |
We expense all research and development costs in the periods in which they are incurred. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks and estimates of services performed using information and data provided to us by our vendors and third-party service providers. Non-refundable advance payments for goods or services to be received in future periods for use in research and development activities are deferred and accounted for as prepaid expenses. The prepayments are then expensed as the related goods are delivered and as services are performed. To date, most of these expenses have been incurred to advance our lead drug candidate stenoparib.
We expect our research and development expenses on stenoparib to increase substantially for the foreseeable future as we continue to invest to accelerate stenoparib in clinical trials designed to attain regulatory approval. Costs related to dovitinib and IXEMPRA will decrease precipitously as these have been deprioritized/terminated. We expect additional costs in research and development activities as we continue to conduct clinical trials. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our drug candidate is highly uncertain. As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of any of our drug candidate.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel-related costs, facilities costs, depreciation and amortization expenses and professional services expenses, including legal, human resources, audit, and accounting services. Personnel-related costs consist of salaries, benefits, travel, insurance and stock-based compensation. Facilities costs consist of rent and maintenance of facilities. We expect our general and administrative expenses to increase for the foreseeable future due to anticipated increases in headcount to advance our drug candidate and as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC, Nasdaq, additional insurance expenses, investor relations activities and other administrative and professional services.
Results of Operations
Comparison of the Three and Nine Months Ended September 30, 2024 and 2023 (unaudited)
Three Months Ended |
Nine Months Ended |
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September 30, |
Increase/ |
September 30, |
Increase/ |
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($ in thousands) |
2024 | 2023 | (Decrease) | 2024 | 2023 | (Decrease) | ||||||||||||||||||
Operating costs and expenses: |
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Research and development |
$ | 1,021 | $ | 1,948 | $ | (927 | ) | $ | 4,249 | $ | 4,480 | $ | (231 | ) | ||||||||||
Impairment of intangible assets |
9,703 | — | 9,703 | 9,703 | — | 9,703 | ||||||||||||||||||
General and administrative |
1,589 | 2,478 | (889 | ) | 5,972 | 7,770 | (1,798 | ) | ||||||||||||||||
Total operating costs and expenses |
12,313 | 4,426 | 7,887 | 19,924 | 12,250 | 7,674 | ||||||||||||||||||
Loss from operations: |
(12,313 | ) | (4,426 | ) | (7,887 | ) | (19,924 | ) | (12,250 | ) | (7,674 | ) | ||||||||||||
Other income (expense): |
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Interest income |
261 | 12 | 249 | 314 | 19 | 295 | ||||||||||||||||||
Interest expense |
(50 | ) | (34 | ) | (16 | ) | (578 | ) | (268 | ) | (310 | ) | ||||||||||||
Foreign exchange (losses) gains |
121 | (156 | ) | 277 | 69 | (87 | ) | 156 | ||||||||||||||||
Fair value of New September Warrants |
— | (4,189 | ) | 4,189 | — | (4,189 | ) | 4,189 | ||||||||||||||||
Fair value of modification to April & July 2023 Warrants |
— | (591 | ) | 591 | — | (591 | ) | 591 | ||||||||||||||||
Change in fair value of derivative and warrant liabilities |
14 | 4,937 | (4,923 | ) | 2,676 | 7,187 | (4,511 | ) | ||||||||||||||||
Total other income (expense): |
$ | 346 | $ | (21 | ) | $ | 367 | $ | 2,481 | $ | 2,071 | $ | 410 |
Research and Development Expenses
For the three months ended September 30, 2024, compared to September 30, 2023
The decrease of $0.9 million in research and development expenses was primarily related to a reduction of $0.8 million in manufacturing and supplies and $0.1 million in milestone payments.
For the nine months ended September 30, 2024, compared to September 30, 2023
The decrease of $0.2 million in research and development expenses was primarily related to a reduction of $0.3 million in manufacturing and supplies, $0.1 million in personnel-related costs, including salaries and stock-based compensation, and $0.1 million in contractor and consultant expenses, partially offset by a $0.3 million increase in research study costs.
Impairment of intangible assets
For the three and nine months ended September 30, 2024, compared to September 30, 2023
We halted enrollment in the ongoing Phase 2 trial of stenoparib and are focused on the development of a follow-on trial with FDA regulatory intent. These developments prompted an updated impairment assessment of our intangible assets utilizing a discounted cash flow model with a weighted average cost of capital (“WACC”) of 26%. As a result of the updated impairment assessment, we recognized an impairment charge of $9.7 million and foreign exchange loss of $0.1 million during the three months ended September 30, 2024, with no comparable expense in 2023.
General and Administrative Expenses
For the three months ended September 30, 2024, compared to September 30, 2023
General and administrative expenses decreased by $0.9 million for the three months ended September 30, 2024, compared to September 30, 2023. The decrease was primarily due to decreases of $0.7 million in financing costs, $0.1 million in professional services, and $0.3 million in insurance costs, partially offset by an increase of $0.1 million in personnel-related costs and $0.1 million in public reporting company costs.
For the nine months ended September 30, 2024, compared to September 30, 2023
General and administrative expenses decreased by $1.8 million during the nine months ended September 30, 2024, compared to September 30, 2023. The decrease was primarily due to decreases of $1.1 million in financing costs, $0.8 million in insurance expense, and $0.2 million in professional fees, partially offset by an increase of $0.3 million in public reporting company costs.
Other income (expense)
For the three months ended September 30, 2024, compared to September 30, 2023
Other income of $0.3 million recognized during the three months ended September 30, 2024, consisted primarily of $0.3 million in interest income and $0.1 million in foreign exchange gains, partially offset by $0.1 million in interest expenses
Other expense of $21,000 recognized during the three months ended September 30, 2023, consisted primarily of loss of $4.2 million in fair value of New September Warrants, $0.6 million in fair value of the modification to April and July 2023 warrants, $0.2 million in foreign exchange losses, and $34,000 in interest expenses, partially offset by a $4.9 million change in fair value adjustment to derivative and warrant liabilities and $12,000 in interest income.
For the nine months ended September 30, 2024, and September 30, 2023
Other income of $2.5 million recognized during the nine months ended September 30, 2024, consisted primarily of a gain of $2.7 million in change in fair value of derivative and warrant liabilities, $0.3 million in interest income, and $0.1 million in foreign exchange gains, partially offset by $0.6 million in interest expense.
Other income of $2.1 million recognized during the nine months ended September 30, 2023, consisted primarily of a gain of $7.2 million in change in fair value of derivative and warrant liabilities and $19,000 in interest income, partially offset by losses of $4.2 million in fair value of New September Warrants, $0.6 million in fair value of the modification to April and July 2023 warrants, $0.3 million in interest expense, $0.1 million in foreign exchange losses.
Liquidity, Capital Resources and Plan of Operations
Since our inception through September 30, 2024, our operations have been financed primarily by the sale of convertible promissory notes and the sale and issuance of our securities. As of September 30, 2024, we had $18.5 million in cash and cash equivalents, and an accumulated deficit of $111.5 million.
Our primary use of cash is to fund operating expenses, which consist of research and development as well as regulatory expenses related to our lead drug candidate and clinical programs for stenoparib, and to a lesser extent, general and administrative expenses. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.
On March 21, 2024, we commenced an at the market offering of shares of our common stock and as of September 30, 2024, had sold 2,556,927 shares of our common stock for net proceeds of $33.1 million. In light of our cash position as of the date of this Quarterly Report, we have sufficient funds for our current operations and planned capital expenditures. As discussed above we intend to seek capital through the sale of our securities or other sources. There are no assurances, however, that we will be successful in raising additional working capital, or if we are able to raise additional working capital, we may be unable to do so on commercially favorable terms. Our failure to raise capital or enter into other such arrangements if and when needed would have a negative impact on our business, results of operations and financial condition and our ability to develop our product candidate.
Management’s plans to mitigate the conditions or events that raise substantial doubt include additional funding through public equity, private equity, debt financing, collaboration partnerships, or other sources. We currently plan on completing an additional public offering in the near future, however there are no assurances that we will be successful in raising additional working capital, or if it is able to raise additional working capital, it may be unable to do so on commercially favorable terms. Our failure to raise capital or enter into other such arrangements when needed would have a negative impact on our business, results of operations and financial condition and our ability to continue our plan of operations.
We expect to incur substantial expenses in the foreseeable future for the development and potential commercialization of our drug candidate and ongoing internal research and development programs. At this time, we cannot reasonably estimate the nature, timing, or aggregate amount of costs for our development, potential commercialization, and internal research and development programs. However, to complete our current and future preclinical studies and clinical trials, and to complete the process of obtaining regulatory approval for our drug candidate, as well as to build the sales, marketing, and distribution infrastructure that we believe will be necessary to commercialize our drug candidate, if approved, we may require substantial additional funding in the future.
Contractual Obligations and Commitments
We enter into agreements in the normal course of business with vendors for preclinical studies, clinical trials, and other service providers for operating purposes. We have not included these payments in a table of contractual obligations since these contracts are generally cancellable at any time by us following a certain period after notice and therefore, we believe that our non-cancellable obligations under these agreements are not material.
Cash Flows
Nine Months Ended |
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September 30, |
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($ in thousands) |
2024 | 2023 | ||||||
Total cash and cash equivalents provided by (used in): |
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Operating activities |
$ | (14,146 | ) | $ | (11,073 | ) | ||
Financing activities |
32,557 | 10,473 | ||||||
Net increase (decrease) in cash and cash equivalents |
$ | 18,411 | $ | (600 | ) |
Operating Activities
Net cash and cash equivalents used in operating activities was $14.1 million for the nine months ended September 30, 2024, primarily comprised of our $17.1 million net loss, $3.8 million increase in operating assets and liabilities, $2.7 million change in fair value of warrant liability and $0.4 million in deferred income taxes, partially offset by a $9.7 million impairment of intangible assets and $0.2 million in non-cash interest expense.
Net cash and cash equivalents used in operating activities was $11.1 million for the nine months ended September 30, 2023, primarily comprised of our $10.2 million net loss, $7.2 million change in fair value of warrant liability and $0.1 million increase in operating assets and liabilities, partially offset by $4.2 million in fair value of New September Warrants, $1.1 million in on-cash finance expense, $0.6 million in fair value modifications to April and July 2023 warrants, $0.2 million in stock-based compensation, $0.2 million in non-cash interest and $0.1 million in unrealized foreign exchange loss.
Financing Activities
Net cash and cash equivalents provided by financing activities was $32.6 million for the nine months ended September 30, 2024, primarily due to $33.1 million in net proceeds from the sale of common stock pursuant to the Sales Agreement, $2.9 million in net proceeds from the issuance of Series A Convertible Redeemable Preferred Stock, and $1.3 million in proceeds from 3i debt promissory notes, partially offset by the $3.5 million redemption of Series A Convertible Redeemable Preferred Stock and repayment of $1.3 million of 3i debt promissory notes.
Operating Capital and Capital Expenditure Requirements
We believe that our existing cash and cash equivalents will be sufficient to fund our anticipated expenditures and commitments for the next twelve months. Our estimate as to how long we expect our cash to be able to continue to fund our operations is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Further, changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Critical Accounting Policies and Use of Estimates
Our management’s discussion and analysis of financial condition and results of operations is based upon our unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2024 and 2023, and our audited consolidated financial statements for the years ended December 31, 2023 and 2022, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses. On an on-going basis, we evaluate our critical accounting policies and estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions.
Our significant accounting policies are described in the notes to our consolidated financial statements for the year ended December 31, 2023 included in the Form 10-K, and there have been no significant changes to our significant accounting policies during the nine months ended September 30, 2024. These unaudited condensed interim consolidated financial statements should be read in conjunction with our audited financial statements and accompanying notes.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act of 1934, as amended (the "Exchange Act") and are not required to provide the information under this item.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions.
With respect to the quarter ended September 30, 2024, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective.
Management does not expect that our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control systems are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in a cost-effective control system, no evaluation of internal control over financial reporting can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been or will be detected.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended September 30, 2024, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
For information regarding our material legal proceedings, see “Note 14, Commitments and contingencies” in the accompanying “Notes to Condensed Consolidated Financial Statements” in this Quarterly Report, which information is incorporated herein by reference.
There are no material changes to the risk factors set forth in Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023, except as set forth below.
The risk factor titled “Unstable global market and economic conditions may have serious adverse consequences on our business, financial condition and stock price” is amended and restated as follows:
Unstable global market and economic conditions may have serious adverse consequences on our business, financial condition and stock price.
The global credit and financial markets have from time-to-time experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, including the conflict between Russia and Ukraine, the conflicts in Israel and the Gaza Strip and the broader Middle East, terrorism or other geopolitical events. Sanctions imposed by the United States and other countries in response to such conflicts, including the one in Ukraine, may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability. There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon clinical development plans. In addition, there is a risk that one or more of our current service providers, manufacturers and other partners may not survive an economic downturn, which could directly affect our ability to attain our operating goals on schedule and on budget.
The development and use of artificial intelligence, or AI, presents risks and challenges that can impact our business including by posing security risks to our confidential information, proprietary information, and personal data and could give rise to legal and/or regulatory actions, damage our reputation or otherwise materially harm our business.
Artificial intelligence, or AI, is increasingly being used in the biopharmaceutical, pharmaceutical, technology, and consumer health industries. We may develop and incorporate AI technology in certain of our products and services. Issues relating to the use of new and evolving technologies such as AI, machine learning, generative AI, and large language models, may cause us to experience perceived or actual brand or reputational harm, technical harm, competitive harm, legal liability, cybersecurity risks, privacy risks, compliance risks, security risks, ethical issues, and new or enhanced governmental or regulatory scrutiny, and we may incur additional costs to resolve such issues. Litigation or government regulation related to the use of AI may also adversely impact our ability to develop and offer products that use AI, as well as increase the cost and complexity of doing so. In addition, uncertainties regarding developing legal and regulatory requirements and standards may require significant resources to modify and maintain business practices to comply with U.S. and non-U.S. laws concerning the use of AI, the nature of which cannot be determined at this time. In addition, the European Union recently passed the Artificial Intelligence Act, whose regulations will be developed over the coming year and, in the U.S., the recent Executive Order concerning artificial intelligence may result in extensive new federal rule-making. Further, market demand and acceptance of AI technologies are uncertain, and we may be unsuccessful in our product development efforts.
We plan to develop policies governing the use of AI to help reasonably ensure that such AI is used in a trustworthy manner by our employees, contractors, and authorized agents and that our assets, including intellectual property, competitive information, personal information we may collect or process, and customer information, are protected. Any failure by our personnel, contractors, or other agents to adhere to our established policies could violate confidentiality obligations or applicable laws and regulations, jeopardize our intellectual property rights, cause or contribute to unlawful discrimination, or result in the misuse of personally identifiable information or the injection of malware into our systems, any of which could have a material adverse effect on our business, results of operations, and financial condition.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
On March 19, 2024, we entered into an At-The-Market Issuance Sales Agreement (the "Sales Agreement") with Ascendiant Capital Markets, LLC ("Ascendiant") under which we may offer and sell, from time to time at our sole discretion, shares of our common stock, par value $0.0001 per share, having an aggregate gross sales price of up to $50 million, to or through Ascendiant. The offer and sales of the shares are made pursuant to a previously filed shelf registration statement on Form S-3 (File No. 333-275282), originally filed with the SEC on November 2, 2023 and declared effective on November 29, 2023, and the related prospectus supplement dated September 9, 2024 and filed with the SEC on such date. We will pay Ascendiant a commission of 3.0% of the gross proceeds from the sales of shares sold through Ascendiant under the Sales Agreement. We will also reimburse Ascendiant for certain expenses incurred in connection with the Sales Agreement. Both we and Ascendiant may each terminate the Sales Agreement at any time upon specified prior written notice.
During the period October 1, 2024, through November 13, 2024, we sold 1,534,356 shares of our common stock for net proceeds of $2.5 million.
Item 3. Defaults Upon Senior Securities.
For information regarding defaults upon senior securities, see “Note 5, Convertible promissory note due to Novartis” in the accompanying “Notes to Condensed Consolidated Financial Statements” in this Quarterly Report, which information is incorporated herein by reference.
Item 4. Mine Safety Disclosures.
Not applicable.
of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the third quarter of 2024.
See the Exhibit Index to this Quarterly Report immediately below and before the signature page hereto, which Exhibit Index is incorporated by reference as if fully set forth herein.
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Schedules (or similar attachments) to this exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of all omitted schedules (or similar attachments) to the Securities and Exchange Commission on a confidential basis upon request. |
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# | Certain information was redacted from this exhibit pursuant to Item 601(a)(6) of Regulation S-K. |
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Management contracts or compensatory plans or arrangements. |
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Furnished herewith. |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
ALLARITY THERAPEUTICS, INC., |
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Date: November 14, 2024 |
By: |
/s/ Thomas H. Jensen |
Thomas H. Jensen |
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Chief Executive Officer |
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Date: November 14, 2024 |
By: |
/s/ Alexander Epshinsky |
Alexander Epshinsky |
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Chief Financial Officer |