☒ | Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
☐ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Nevada | 04-3562325 | |
(State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) | |
4960 Peachtree Industrial Blvd., Suite 240, Norcross, GA | 30071 | |
(Address of Principal Executive Offices) | (Zip Code) |
CapitalStock MarketUnits, each consisting of two shares of Common Stock and one Warrant to purchase one share of Common StockThe NASDAQ Capital MarketCommon Stock Purchase WarrantsThe NASDAQ Capital Market
Large accelerated filer | ☐ | Accelerated filer | ||||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☐ |
PAGE | ||||||||||
PART 1 | ||||||||||
ITEM 1. | 1 | |||||||||
ITEM 1A. | ||||||||||
ITEM 1B. | ||||||||||
ITEM 2. | ||||||||||
ITEM 3. | ||||||||||
ITEM 4. | ||||||||||
PART II | ||||||||||
ITEM 5. | ||||||||||
ITEM 6. | ||||||||||
ITEM 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |||||||||
ITEM 7A. | ||||||||||
ITEM 8. | ||||||||||
ITEM 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | |||||||||
ITEM 9A. | ||||||||||
ITEM 9B. | ||||||||||
PART III | ||||||||||
ITEM 10. | ||||||||||
ITEM 11. | ||||||||||
ITEM 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | |||||||||
ITEM 13. | Certain Relationships, Related Transactions and Director Independence | |||||||||
ITEM 14. | ||||||||||
PART IV | ||||||||||
ITEM 15. | ||||||||||
Comments from FDA were received in late October 2019 and have been incorporated into the final version of the clinical trial protocol by the Company in conjunction with its hepatology consultants and medical and other experts at Covance, its chosen CRO Further information is described below under“NASH-RX Trial”. This modified trial design was discussed with FDA in a meeting on November 14, 2019 at which FDA indicated the design was reasonable (subject to a review of the protocol). The Company together with its advisors and Covance has modified the protocol and associated statistical analysis plans in conformance with the feedback received from FDA.In addition, the Company has been working to complete the various additional information requested by FDA. Design aspects of the ongoing NAVIGATE trial.
We endeavor to leverage our scientific and product development expertise as well as established relationships with outside sources to achieve cost-effective and efficient drug development. These outside sources, amongst others, provide us with expertise in preclinical models, pharmaceutical development, toxicology, clinical trial operations, pharmaceutical manufacturing, sophisticated physical and chemical characterization, and commercial development. We also have established several collaborative scientific discovery programs with leading experts in carbohydrate chemistry and characterization. These discovery programs are generally aimed at the targeted development of new carbohydrate molecules that bind galectin proteins and offer alternative options to larger market segments inthrough our primary disease indications. We also have established throughmajority-owned joint venture subsidiary, Galectin Sciences LLC, a discovery program aimed at the targeted development of small molecules (generally,Initial resultsThree series of the effortscomposition of matter patents covering discoveries at Galectin Sciences LLC were presented by Dr. E. Zomer at the AFDD meeting in Boston in Fall, 2019. have been filed.
Indication | Drug | Status | ||
Fibrosis | ||||
NASH with Advanced Fibrosis: NASH-CX trial andNASH-FX trial | IND submitted January 2013. Results from the Phase 1 clinical trial were reported in 2014, with final results reported in January 2015. The Phase
| |||
The Phase 2 NASH CX trial, was designed for patients with well compensated cirrhosis. The NASH CX trial top line data was reported in December Gastroenterology | ||||
NASH | Based on A | |||
Lung Fibrosis | In pre-clinical development | |||
Kidney Fibrosis | In pre-clinical development |
Indication | Drug | Status | ||
Cardiac and Vascular Fibrosis | GM-CT-01 | In pre-clinical development | ||
Cancer Immunotherapy | ||||
Melanoma, Head,Neck Squamous Cell Carcinoma (HNSCC) | Investigator IND Q-1 2016. | |||
February 2017 and | ||||
Psoriasis | ||||
Moderate to Severe Plaque Psoriasis Severe Atopic Dermatitis | IND submitted March 2015. A |
at baseline demonstrated by a prevention of development of varices when compared to placebo. GR-MD-02 (belapectin)GR-MD-02 belapectin has a significant therapeutic effect on liver fibrosis as shown in several relevant animal models. In addition, in NASH animal models,GR-MD-02 belapectin has been shown to reduce liver fat, inflammation, and ballooning degeneration or death(death of liver cells.cells). Therefore, we choseGR-MD-02 belapectin as the lead candidate in a development program targeted initially at fibrotic liver disease associated with(NASH, or fatty liver disease)(NASH). In January 2013, an Investigational New Drug (“IND”) was submitted to the FDA with the goal of initiating a Phase 1 study in patients with NASH and advanced liver fibrosis to evaluate the human safety ofGR-MD-02 belapectin and pharmacodynamics biomarkers of disease. On March 1, 2013, the FDA indicated we could proceed with a US Phase 1 clinical trial forGR-MD-02 belapectin with a development program aimed at obtaining support for a proposed indication ofGR-MD-02 belapectin for treatment of NASH with advanced fibrosis. The Phase 1 trial was completed and demonstrated thatGR-MD-02 belapectin up to 8 mg/kg Lean Body Mass (LBM), i.v. was safe and well tolerated. The human pharmacokinetic data defined a drug dose for use in the planned Phase 2 trials based on extrapolation from efficacy data in NASH animal models of liver fibrosis and/or cirrhosis. Additionally, there was evidence of a pharmacodynamic effect ofGR-MD-02 at the 8 mg/kg dose with a decrease in alpha 2 macroglobulin, a serum marker of fibrotic activity, and a reduction in liver stiffness as determined by FibroScan®. An “End of Phase 1 Meeting” was held with FDA which, amongst other items, provided guidance on the primary endpoint for the Phase 2 clinical trial, theNASH-CX trial.GR-MD-02 belapectin and it showed that with 8 mg/kg LBM dose ofGR-MD-02 belapectin and 2 mg/kg LBM dose of midazolam there was no drug-drug interaction and no serious adverse events or drug-related adverse events were observed. This study was required by the U.S. Food and Drug Administration (FDA) and the primary objective was to determine if single or multiple intravenous (IV) doses ofGR-MD-02 affect thepharmacokinetics (PK) of midazolam. The secondary objective was to assess the safety and tolerability ofGR-MD-02 belapectin when administered concomitantly with midazolam. The lack of a drug interaction in this study enabled the Company to expand the number of patients eligible for its Phase 2 clinical trial. In addition, shouldGR-MD-02 be approved for marketing, the success of this study supports a broader patient population for the drug label. well compensated cirrhosis, which began enrolling in June 2015. This study was the primary focus of our program and iswas a randomized, placebo-controlled, double-blind, parallel-group Phase 2b trial to evaluate the safety and efficacy ofGR-MD-02 belapectin for treatment of liver fibrosis and resultant portal hypertension in NASH patients with well compensated cirrhosis. A smaller, exploratoryNASH-FX for patients with NASH and advanced fibrosis that explored use of threetechnologies, is now complete.technologies. It was a short, single site, four-month trial in 30 NASH patients with advanced fibrosis (F3), but not cirrhosis (F4), randomized 1:1 to eitherGR-MD-02 belapectin or placebo. The trial did not meet its primary biomarker endpoint as measured using multi-parametric magnetic resonance imaging (LiverMultiScanmaywas not be sufficient to show efficacy results in established advanced liver fibrosis. This small study was also not adequately powered for the secondary endpoints and thus, not surprisingly, did not meet the secondary endpoints. In the trial,GR-MD-02 belapectin was found to be safe and well tolerated among the patient population with no serious adverse events. Although there was no apparent improvementevents and evidence of a pharmacodynamic effect. These results provided support for further development in the threenon-invasive tests for assessment of liver fibrosis in the four-monthNASH-FX trial, the principal investigator of theNASH-FX trial has stated that the inhibition ofgalectin-3 withGR-MD-02 remains promising for the treatment of NASH fibrosis. Of note is thatGR-MD-02 has demonstrated an improved clinical effect inmoderate-to-severe psoriasis, suggesting the compound has activity in humans in an immune-mediated inflammatory human disease that can occur in association with NASH. We believe our drug candidate provides a promising new approach for the therapy of fibrotic diseases, and liver fibrosis in particular. Fibrosis is the formation of excess connective tissue (collagen and other proteins plus cellular elements such as myofibroblasts) in response to damage, inflammation or repair. When the fibrotic tissue becomes confluent, it obliterates the cellular architecture, leading to scarring and dysfunction of the underlying organ. Givengalectin-3’s broad biological functionality, it has been demonstrated to be involved in cancer, inflammation and fibrosis, heart disease, and renal disease. We have further demonstrated the broad applicability of the actions of ourgalectin-3 inhibitor’s biological effect in ameliorating fibrosis involving lung, kidney, blood vessels, and cardiac tissues in a wide variety of animal models. well-designed multi-center clinical trial that explored the use ofGR-MD-02 belapectin for the treatment of liver fibrosis and resultant portal hypertension in patients with well-compensated NASH cirrhosis. Enrollment in this trial was completed in September 2016, and a total of 162 patients at 36 sites in the United States were randomized to receive either 2 mg/kg LBM ofGR-MD-02, belapectin, 8 mg/kg LBM ofGR-MD-02 belapectin or placebo, with approximately 54 patients in each group. Approximately 50% of patients at baseline had esophageal varices (a complication of portal hypertension). The primary endpoint was a reduction in change in hepatic venous pressure gradient (HVPG). Patients received an infusion of belapectin or placebo every other week for one year, a total of 26 infusions, and were evaluated to determine the change in HVPG as compared with placebo. HVPG was also correlated with secondarySecondary or exploratory endpoints ofincluded fibrosis on liver biopsy, as well as with measurement of liver stiffness (FibroScan, which arenon-invasive measures of the liver that may be used in future studies.. Top line data readout was reported in December 2017 demonstrating positive efficacy data and2017. The study demonstrated a favorable safety profile and clinically meaningful efficacy results in the NASH patients with well compensated cirrhosis without esophageal varices (stage 1 cirrhosis).
from baseline to week 54 was 0.3 mm Hg. The mean change in HVPG from baseline wasGR-MD-02, belapectin, respectively.
A responder analysis was performed on those patients without varices at baseline. Analysis was performed looking at two groups: those with an equal to or greater than 2 mm Hg decrease in HVPG from baseline or those with an equal to or greater than 2 mm Hg and a greater than or equal to 20% decrease in HVPG from baseline. In both cases, the change observed in theGR-MD-02 belapectin 2 mg/kg LBM group was statistically significant (p<0.01) while that of the 8 mg/kg LBM group was not.
In terms of cirrhosis complications over
efficacy in patients with NASH cirrhosis.
NASH-RX
The Company together with itsco-PIs and FDA had a follow up telephone conference on November 14, 2019 seeking clarifications during which the Company proposed a newthis innovative Phase 2b/3 study design to address FDA comments receivedare: i) In patients with NASH cirrhosis and clinical signs of portal hypertension but without esophageal varices at baseline, this trial will assess the effect of belapectin on the incidence of new varices (the primary endpoint) – as well as assessing effect on the incidence of long-term, clinically significant cirrhosis-related outcomes (a key secondary efficacy endpoint), (ii) The study targets NASH patients with a clearly identified unmet medical need: patients with compensated cirrhosis who are at risk of developing esophageal varices, a potentially life-threatening complication of cirrhosis (bleeding varices are a cause of death in about
Based on updated feedback, the Company has redesigned the trial protocol in conjunction with itsCo-PIs, biostatical experts and other experts at Covance. We will continue to seek approval in a manner consistent with the data derived from the results of the Phase 2bNASH-CX trial. The pathway pursuedmg/kg LBM) will be compared to placebo (phase 2b). Then, at the interim analysis (IA), one belapectin dose will be selected based on efficacy and safety, for continued evaluation (Phase 3). The belapectin dose selected for the phase 2b/3 are based on the assessmentanalysis of that data and inthe
Currently, as a resultdose response pharmacokinetic analysis of the Agency’s feedbackhepatic venous gradient pressure (HVPG, a reflection of portal hypertension). Prior belapectin clinical studies have also indicated the good tolerance and safety profile of belapectin with doses of up to 8 mg/kg LBM for 52 weeks (Phase 2b Study
As developed, theNASH-RX adaptively designed study has certain features potentially improving likelihood of showing drug effects. These include, but are not limited to: clarity and reaffirmation of efficacy and safety demonstrated in theNASH-CX Phase 2b trial; inclusion of sample sizere-estimation (SSR) after approximately 50% of the patients have completed one year of treatment; the SSR is designed to assure the rate of varices development is as expected and allowing adjustments in sample size if needed; appropriate selection of dose – e.g., a single dose for the Phase 3 component simplifying the overall trial and allowing adjustment to randomization ratio; Hepatic Impairment study may allow inclusion ofCTP-B patients that are believed to have a much higher rate of varices progression and bleeding and other decompensating events; reduced frequency of EGDs and elimination of biopsies (other than to confirm a definitive diagnosis of NASH cirrhosis at screening), elimination of the HVPG subgroup, and revision to the randomization ratio (e.g., proving a greater chance of a patient being on active drug rather than placebo) may make it easier to enroll the trial and retain patients for the course of the trial. These positive features may be offset by robust sizing (e.g. 126 patients per group completers treated for 18 months) and a difficulty in frequently monitoring patients for varices progression.
The Interim Analysis (IA) for efficacy and safety after all patients have completed 18 months of treatment will be conducted by an Independent Data Monitoring Committee (DMC). This will provide preplanned adaptations and trends relative to interim efficacy and safety and the results of this interim analysis will be
disclosed. Patients will continue on their assigned therapy until the IA is completed. If the IA feedback from the DMC is positive, patients are expected to continue in the trial (at the dose selected from the IA) adding patients with another year exposure to the drug treatment group for the Phase 3 component and increasing the likelihood of showing drug effect as patient cirrhosis progresses for a longer period of time. Adaptation to size and power calculations based on the IA reaffirming efficacy and safety will allow better estimates of Phase 3 cohort sizing and statistical power estimations which could be readjusted following the IA. The IA could also lead the DMC to stop the trial due to lack of sufficient efficacy, and other factors.
The focus and goal of the therapeutic program is to stop the progression of andand/or reverse fibrosis and/or portal hypertension in the liver and thereby improve liver function and prevent the development of varices, and clinical complicationspotentially one of fibrosis/cirrhosis and liver-related mortality in patients.the most immediately life-threatening complication of cirrhosis. Based on the results of the
Covance has already begun extensive work on completed. We believe that as more people get vaccinated for
Covance has also2022.
In advance of commencing the adaptively-designed NASH-RX Phase 2b/3 trial, thecan be found on
GR-MD-02 belapectin enhances the immune response to cancer cells, increased tumor shrinkage and enhanced survival in immune competent mice with prostate, breast, melanoma and sarcoma cancers when combined with one of the immune checkpoint inhibitors,GR-MD-02 belapectin in combination with Yervoy
Data on this combination immunotherapy program was presented on February 7, 2017 at the 9th GTCBio Immunotherapeutics & Immunomonitoring Conference in San Diego, CA by Dr. William L. Redmond, Providence Cancer Center. Preclinical results in mouse models
measures relevant to galectin biologyreported as it becomes available. Discussions are ongoing about the planning and pembrolizumabT-cell checkpoint inhibition. Assuming thesefeasibility of a multicenter Phase 2 study, assuming the additional expansion cohort data are positive, the next logical step could be a Phase II trial.
positive.
partnership which is unlikely.
disease is growing due to obesity and diabetes, with the potential to become the leading cause of liver cirrhosis and liver transplantation in the future. Liver transplantation is currently the only therapeutic approach to NASH or other forms of liver fibrosis because, to the best of our knowledge, there are no drug therapies on the market. Organ transplantation is a difficult, risky and costly procedure, and organ availability is scarce. There is also the risk of developing cirrhosis in the transplanted liver from the same disease that damaged the patient’s original liver. Therefore, there is a great need for other therapeutic options. All diseases that affect the liver (viral hepatitis, alcoholic liver disease, and fatty liver as examples) lead to the development of scarring of the liver.
GR-MD-02Belapectin is a proprietary, patented galactoarabino-rhamnogalacturonan polysaccharide polymer that is comprised predominantly of galacturonic acid, galactose, arabinose, rhamnose, and smaller amounts of other sugars. Structural studies have shown thatGR-MD-02 belapectin binds toGR-MD-02, belapectin, we currently have, as of December 31, 2019, 222020, 24 granted U.S. patents, and 6681 foreign granted patents. These patents, which are more fully described below, include a composition of matter patent, and methods of use including manufacture, use patient in patients with NASH, in patients with liver fibrosis, and in patients with diabetic kidney disease. Additional patent applications are pending with respect to, amongst other uses, cancer immunotherapy, lung fibrotic disease, and inflammatory disease associated with increase in inducible nitric oxide synthase. Patents have also been granted with respect to liver fibrosis, NASH, and liver fibrosis in combination with other therapeutic agents. Compounds for subcutaneous administration and oral delivery are currently underpre-clinical development.
without serious adverse events that were determined to be related toGR-MD-02. belapectin. The third dosing group is no longer enrolling due to the availability of newer agents such as the
and autoimmune disorders in which galectin proteins are involved, at least in part, in the pathogenesis. Additional specific claims encompass liver fibrosis, kidney fibrosis, lung fibrosis or heart fibrosis. The patent, assigned U.S. Patent No. 8,871,925, was issued October 28, 2014.
disease other than cancer. See “Risk Factors — Risks Related to Our Intellectual Property”. Our competitive position, in part, is contingent upon protection of our intellectual property. Galectin Sciences LLC has 1 granted international patent, 31 international patent allowed, 5 US patent application pending, and 2946 foreign applications pending; 2 PCT International applications are pending.
developed and will continue to develop relationships with third-parties that have established pharmaceutical manufacturing capabilities and expertise. We are not a party to any long-term agreement with any of our suppliers and, accordingly, we have our products manufactured on a purchase-order basis from one of two primary well-known and established pharmaceutical suppliers that meet FDA requirements.
Additionally, belapectin is manufactured as a sterile liquid formulation. We have experienced, and may experience in the future, certain delays related to
1. |
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2. | Submission to the FDA of an IND for human clinical testing, which must become effective before human clinical trials may begin, |
3. | Adequate and well-controlled human clinical trials to establish the safety and efficacy of the drug for each indication, |
4. | Submission to the FDA of a NDA, |
5. | Satisfactory completion of an FDA inspection of the manufacturing facility or facilities, at which the drug is produced to assess compliance with current good manufacturing procedures (“cGMP”) established by the FDA, |
6. | FDA review and approval of the NDA, and |
7. | FDA review and approval of a trademark used in connection with a pharmaceutical. |
Item 1A. Risk |
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operate.
candidates that we may
be obtained from later or more extensive testing. Also, it is possible to suffer significant setbacks in advanced clinical trials, even after obtaining promising results in earlier trials. For example, although there was positive data from ourGR-MD-02, which we believe will allow us to conduct a Phase 3 trial, belapectin it did not meet its primary endpoint. Similarly, our Phase 2a pilot trial
belapectin.
We have limited experience in marketing, sales or distribution, and we do not intend to develop a sales and marketing infrastructure to commercialize our pharmaceutical products. If we develop commercial products, we will need to rely on licensees, collaborators, joint venture partners or independent distributors to market and sell those products. Thus, we expect that we will be required to enter into agreements with commercial partners to engage in sales, marketing and distribution efforts around our products in development. We may be unable to establish or maintain third-party relationships on a commercially reasonable basis, if at all. In addition, these
third parties may have similar or more established relationships with our competitors. If we do not enter into relationships with third parties for the sales and marketing of our proposed products, we will need to develop our own sales and marketing capabilities.
Even if engaged, these distributors may:
fail to satisfy financial or contractual obligations to us;
fail to adequately market our products;
cease operations with little or no notice to us; or
offer, design, manufacture or promote competing formulations or products.
If we fail to develop sales, managed care, marketing and distribution channels, we would experience delays in generating sales and incur increased costs, which would harm our financial results.
We are exposed to product liability,
Because we do not currently have anyWe may not be able to obtain or maintain adequate product liability insurance on acceptable terms, if at all, or such insurance may not provide adequate coverage against our potential liabilities. Furthermore, ourOur current and potential partners with whom we have collaborative agreements or our future licensees may not be willing to indemnify us against these types of liabilities and may not, themselves, be sufficiently insured or have sufficient liquidity to satisfy any product liability claims. Claims or losses in excess of any product liability insurance coverage that may be obtained by us could have a material adverse effect on our business, financial condition and results of operations.
As apre-revenue company engaged in the development of drug technologies, our Our resources are limited and we may experience technical challenges inherent in such technologies. Competitors have developed or are in the process of developing technologies that are, or in the future may be, the basis for competition. Some of these technologies may have an entirely different approach or means of accomplishing similar therapeutic effects compared to our proposed products. Our competitors may develop drugs that are safer, more effective and less costly than our proposed products and, therefore, present a serious competitive threat to us.
GR-MD-02 belapectin is performed by third parties on a contract basis and production is ongoing to generate what we believe are sufficient quantities ofGR-MD-02 belapectin for planned Phase 3our NAVIGATE or other clinical trials. Manufacturing could become delayed due to circumstances beyond our control which could delay any planned Phase 3 clinical trials. Further because of limited resources, we have curtailed most of our expenditures in research focused on the development of an oral galectin inhibitor to replace our current drug candidate that is delivered via infusion.
reported after our drug products are made available to patients. This would include results from any post marketing tests or vigilance required as a condition of approval. The manufacturer and manufacturing facilities we use to make any of our drug products will also be subject to periodic review and inspection by the FDA. The discovery of any new or previously unknown problems with the product, manufacturer or facility may result in restrictions on the drug, manufacturer or facility, including withdrawal of the drug from the market. We would continue to be subject to the FDA requirements governing the labeling, packaging, storage, advertising, promotion, recordkeeping, and submission of safety and other post-market information for all of our product candidates, even those that the FDA had approved. If we fail to comply with applicable continuing regulatory requirements, we may be subject to fines, suspension or withdrawal of regulatory approval, product recalls and seizures, operating restrictions and other adverse consequences.
If users of our proposed products are unable to obtain adequate reimbursement from third-party payers, market acceptance of our proposed products may be limited, and we may not achieve revenues or profits.
The continuing efforts of governments, insurance companies, health maintenance organizations and other payers of healthcare costs to contain or reduce costs of health care may affect our future revenues and profitability as well as the future revenues and profitability of our potential customers, suppliers and collaborative partners in addition to the availability of capital. Our ability to commercialize our proposed products will depend in large part on the extent to which appropriate reimbursement levels for the cost of our proposed formulations, products and related treatments are obtained by the health care providers of these products and treatments. It is possible that the adoption new health care reform legislation or legislation to replace the current health care reimbursement system could harm our business, financial condition and results of operations.
We will need to obtain FDA approval
Company. Our success depends, in part, on our ability to obtain patent protection for our products or processes in the U.S. and other countries, protect trade secrets and prevent others from infringing on our proprietary rights. We will only be able to protect our product candidates from unauthorized making, using, selling, offering to sell or importation by third parties to the extent that we have rights under valid and enforceable patents or trade secrets that cover these activities. If we do not adequately protect our intellectual property, competitors may be able to practice our technologies.
prescribe, by resolution and without stockholder approval, a class or series of undesignated shares, including the number of shares in the class or series and the voting powers, designations, rights, preferences, restrictions and the relative rights in each such class or series. Accordingly, we may designate and issue additional shares or series of preferred stock that would rank senior to the shares of common stock as to dividend rights or rights upon our liquidation,
could prohibit or delay a merger or other takeover or change in control attempt and, accordingly, may discourage attempts to acquire our Company even though such a transaction may be in our stockholders’ best interest and offer our stockholders the opportunity to sell their stock at a price above the prevailing market price.
it could be considered “thinly-traded.” This situation may be attributable to a number of factors, including the fact that we are a small company that is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned and viable. As a consequence, there may be periods of several days, weeks or months when trading activity in our shares is minimal, as compared to a seasoned issuer that has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a broader or more active public trading market for our common stock will be sustained, or that current trading levels will be sustained or not diminish.
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2019
Year ended December 31, | 2019 as Compared to 2018 | |||||||||||||||
2019 | 2018 | $ Change | % Change | |||||||||||||
(in thousands, except %) | ||||||||||||||||
Research and development | $ | 7,467 | $ | 6,471 | $ | 996 | 15 | % |
Year ended December 31, | 2020 as Compared to 2019 | |||||||||||||||
2020 | 2019 | $Change | % Change | |||||||||||||
(in thousands, except %) | ||||||||||||||||
Research and development | $ | 17,976 | $ | 7,467 | $ | 10,509 | 141 | % |
Year Ended December 31, | ||||||||
2019 | 2018 | |||||||
(in thousands) | ||||||||
Direct external expenses: | ||||||||
Clinical programs | $ | 4,826 | $ | 2,296 | ||||
Pre-clinical activities | 394 | 208 | ||||||
Other research and development expenses: | ||||||||
Payroll and other including stock-based compensation | 2,247 | 3,967 | ||||||
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$ | 7,467 | $ | 6,471 | |||||
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|
Year Ended December 31, | ||||||||
2020 | 2019 | |||||||
(in thousands) | ||||||||
Direct external expenses: | ||||||||
Clinical programs | $ | 14,229 | $ | 4,826 | ||||
Pre-clinical activities | 532 | 394 | ||||||
Other research and development expenses: | ||||||||
Payroll and other including stock-based compensation | 3,215 | 2,247 | ||||||
$17,976 | $7,467 | |||||||
Year ended December 31, | 2019 as Compared to 2018 | |||||||||||||||
2019 | 2018 | $ Change | % Change | |||||||||||||
(in thousands, except %) | ||||||||||||||||
General and administrative | $ | 5,971 | $ | 7,131 | $ | (1,160 | ) | (16 | )% |
Year ended December 31, | 2020 as Compared to 2019 | |||||||||||||||
2020 | 2019 | $Change | % Change | |||||||||||||
(in thousands, except %) | ||||||||||||||||
General and administrative | $ | 5,468 | $ | 5,971 | $ | (503 | ) | (8 | )% |
$82,000 partially offset by an increase in insurance expenses of $331,000.
2018
Year ended December 31, | 2018 as Compared to 2017 | |||||||||||||||
2018 | 2017 | $ Change | % Change | |||||||||||||
(in thousands, except %) | ||||||||||||||||
Research and development | $ | 6,471 | $ | 11,721 | $ | (5,250 | ) | (45 | )% |
Year ended December 31, | 2019 as Compared to 2018 | |||||||||||||||
2019 | 2018 | $Change | % Change | |||||||||||||
(in thousands, except %) | ||||||||||||||||
Research and development | $ | 7,467 | $ | 6,471 | $ | 996 | 15 | % |
have begun upon acceptance by the FDA, or similar agency outside of the United States, to commence a clinical trial in humans, at which time we begin tracking expenditures by the product candidate. Clinical program expenses comprise payments to vendors related to preparation for, and conduct of, all phases of the clinical trial, including costs for drug manufacture, patient dosing and monitoring, data collection and management, oversight of the trials and reports of results.GR-MD-02 belapectin andGR-MD-02 belapectin is in active development.
Year Ended December 31, | ||||||||
2018 | 2017 | |||||||
(in thousands) | ||||||||
Direct external expenses: | ||||||||
Clinical programs | $ | 2,296 | $ | 9,362 | ||||
Pre-clinical activities | 208 | 194 | ||||||
Other research and development expenses: | ||||||||
Payroll and other including stock-based compensation | 3,967 | 2,165 | ||||||
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$ | 6,471 | $ | 11,721 | |||||
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Year Ended December 31, | ||||||||
2019 | 2018 | |||||||
(in thousands) | ||||||||
Direct external expenses: | ||||||||
Clinical programs | $ | 4,826 | $ | 2,296 | ||||
Pre-clinical activities | 394 | 208 | ||||||
Other research and development expenses: | ||||||||
Payroll and other including stock-based compensation | 2,247 | 3,967 | ||||||
$7,467 | $6,471 | |||||||
expense of approximately $1,626,000.
Year ended December 31, | 2018 as Compared to 2017 | |||||||||||||||
2018 | 2017 | $ Change | % Change | |||||||||||||
(in thousands, except %) | ||||||||||||||||
General and administrative | $ | 7,131 | $ | 4,526 | $ | 2,605 | 58 | % |
Year ended December 31, | 2019 as Compared to 2018 | |||||||||||||||
2019 | 2018 | $Change | % Change | |||||||||||||
(in thousands, except %) | ||||||||||||||||
General and administrative | $ | 5,971 | $ | 7,131 | $ | (1,160 | ) | (16 | )% |
$1,136,000.
financed our operations from proceeds of public and private offerings of debt and equity. As of December 31, 2019,2020, we raised a net total of $197.4$197.7 million from these offerings. At December 31, 2019,2020, the Company had $47.5$27.1 million of unrestricted cash and cash equivalents available to fund future operations. In December 2018, the Company announced the extension of itsoperations plus a $10 million unsecured line of credit facility with stockholder and director, Richard E. Uihlein. The Company has not drawn under the line of credit. The Company believes there is sufficient cash, including availability of the line of credit, to fund currently planned operations at least through September 30, 2021.March 31, 2022. We will require more cash to fund our operations after September 30, 2021March 31, 2022 and believe we will be able to obtain additional financing. The currently planned operations include costs related to a plannedour adaptively designed NAVIGATE Phase 2b/3 clinical trial. While theCurrently, we expect to require an additional approximately
trial and associated activities.
2018 compared to 2017
Net cash used in operations decreased by $5,713,000 to $10,179,000 for 2018, as compared to $15,892,000 for 2017. Cash operating expenses decreased principally due to decreased research and development activities primarily related to our Phase 2 clinical programs.
There were no equipment purchases or other investing activities in 2018 or 2017.
Net cash provided by financing activities was $15,379,000 during 2018 as compared to $3,583,000 during 2017, due primarily to the transactions described below.
In 2018, we completed sales of common stock through At the Market issuances totaling $5,603,000. Additionally, in 2018, we received proceeds totaling $6,003,000 and $3,773,000 from the exercise of common stock warrants and options, respectively. In 2017, we completed a private placement of common stock with warrants totaling $200,000 and sales of common stock through At the Market issuances totaling $3,383,000.
a rate of approximately $3,800 per month. The amended lease provided for free rent for the first two months of the lease and continues the security deposit of $6,000. In addition to base rental payments included in the contractual obligations table above, the Company is responsible for our
Contractual Obligations and Commitments
The following table summarizes contractual obligations and commitments as of December 31, 2019:
Payments due by period (in thousands) | ||||||||||||||||||||
Contractual Obligations | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
Operating Leases | $ | 103 | $ | 47 | $ | 56 | ||||||||||||||
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Total | $ | 103 | $ | 47 | $ | 56 | ||||||||||||||
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payroll expenses. In connection with these service fees, our estimates are most affected by our understanding
studies are charged to research and development expense as incurred. The Company accounts for nonrefundable advance payments for goods and services that will be used in future research and development activities as expense when the service has been performed or when the goods have been received. Our current NAVIGATE clinical trial is being supported by third-party contract research organizations, or CROs, and other vendors. We accrue expenses for clinical trial activities performed by CROs based upon the estimated amount of work completed on each trial. For clinical trial expenses and related expenses associated with the conduct of clinical trials, the significant factors used in estimating accruals include the number of patients enrolled, the number of active clinical sites, and the duration for which the patients have been enrolled in the trial. We monitor patient enrollment levels and related activities to the extent possible through internal reviews, review of contractual terms and correspondence with CROs. We base our estimates on the best information available at the time. We monitor patient enrollment levels and related activities to the extent possible through discussions with CRO personnel and based our estimates of clinical trial costs on the best information available at the time. However, additional information may become available to us which will allow us to make a more accurate estimate in future periods. In that event, we may be required to record adjustments to research and development expenses in future periods when the actual level of activity becomes more certain.
Item 7A. |
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Item 8. |
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Item 9. |
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Item 9A. |
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2019.2020. Our management has concluded, based on their evaluation, that our disclosure controls and procedures were effective as of December 31, 20192020 to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.
reporting is a process designed by, or under the supervision of, a company’s principal executive and principal financial officers and effected by a company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. It includes those policies and procedures that:
2020.
Item 9B. |
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Item 10. |
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Name | Age | Position | Director Since | |||
Gilbert F. Amelio, Ph.D (2)(3) | 76 | Director | 2009 | |||
James C. Czirr | 66 | Director | 2009 | |||
Kary Eldred (1) | 46 | Director | 2018 | |||
Kevin D. Freeman (1)(3) | 58 | Director | 2011 | |||
Joel Lewis (1) (2) (3) | 50 | Director | 2017 | |||
Gilbert S. Omenn, M.D., Ph.D. (2) | 78 | Director | 2014 | |||
Marc Rubin, M.D. (3) | 65 | Director | 2011 | |||
Harold H. Shlevin, Ph.D. | 70 | Director | 2019 | |||
Richard E. Uihlein, Chairman | 74 | Director | 2017 |
Name | Age | Director Since | ||||||
Gilbert F. Amelio, Ph.D. (2)(3) | 77 | 2009 | ||||||
James C. Czirr | 67 | 2009 | ||||||
Kary Eldred (1) | 46 | 2018 | ||||||
Kevin D. Freeman (1)(2)(3) | 59 | 2011 | ||||||
Joel Lewis | 51 | 2017 | ||||||
Gilbert S. Omenn, M.D., Ph.D. (2) | 79 | 2014 | ||||||
Marc Rubin, M.D. (3) | 66 | 2011 | ||||||
Elissa J. Schwartz, Ph.D. | 50 | 2020 | ||||||
Harold H. Shlevin, Ph.D. | 71 | 2019 | ||||||
Richard E. Uihlein, Chairman | 75 | 2017 | ||||||
Richard A. Zordani (1) | 48 | 2020 |
(1) | Member of audit committee |
(2) | Member of compensation committee |
(3) | Member of nominating and |
early stageearly-stage development of Safe Science Inc., a developer of anti-cancer drugs; served from 2005 to 2008 as Chief Executive Officer of Minerva Biotechnologies Corporation, a developer of nano particle bio chips to determine the cause of solid tumors; and was a consultant to Metalline
Mining Company Inc., now known as Silver Bull Resources, Inc., (AMEX: SVBL), a mineral exploration company seeking to become a low cost producer of zinc. Mr. Czirr received a B.B.A. degree from the University of Michigan. We believe that Mr. Czirr is best situated to sit on our Board because he is the director who was a
from Harvard Medical School, and Ph.D. in genetics from the University of Washington. We believe Dr. Omenn’s qualifications to sit on our Board of Directors include his extensive executive leadership and management experience in the medical industry and his continuing cutting-edge research.
company headquartered in Alpharetta, GA. From April 2010 through August 2012, Mr. Callicutt was the Chief Financial Officer of Vystar Corporation, a publicly traded company that holds proprietary technology to remove antigenic proteins from natural rubber latex. Prior to that Mr. Callicutt was Chief Financial Officer of IVOX, Inc., Tikvah Therapeutics and Corautus Genetics, a publicly traded biotechnology company which was developing gene therapy for treatment of cardiovascular disease. Mr. Callicutt previously spent more than fourteen years in public accounting, most recently as a senior manager at Deloitte, where he specialized in technology companies from 1989 to 2003. Mr. Callicutt is a Certified Public Accountant and graduated with honors from Delta State University with a B.B.A. in accounting and computer information systems.
Adam E. Allgood, Pharm.D., R.Ph,age 55, became our Executive Director of Clinical Development on June 29, 2015. Dr. Allgood was most recently associate director of global pharmaceutical regulatory affairs at UCB Inc., a multinational biopharmaceutical company, from October 2011 to May 2015. His prior positions include leadership roles at Abbott Laboratories from February 2009 to September 2011 in regulatory affairs and Solvay Pharmaceuticals from January 1988 to January 2009 in clinical development and medical affairs, spanning a variety of therapeutic areas including gastroenterology, immunology, rheumatology, neurology, and women’s health. Dr. Allgood earned his Doctor of Pharmacy (Pharm.D.) degree summa cum laude from Mercer University College of Pharmacy and Health Sciences in Atlanta and is a Registered Pharmacist (R.Ph.). He is a member of the American Pharmacists Association (APHA), and the Association of the United States Army (AUSA). None of the directors, executive officers and key employees share any familial relationship.
Name | Title | |
Harold H. Shlevin, Ph.D. | Chief Executive Officer and President, until September 2, 2020 | |
Joel Lewis | Chief Executive Officer and President, from September 2, 2020 | |
Pol F. Boudes, M.D. | Chief Medical Officer | |
Jack W. Callicutt | Chief Financial Officer |
companies within the industry. Barney & Barney LLC reviewed information from industry and other sources, surveys and databases, including publicly-available compensation information of other companies with which we compete, to gauge the competitiveness of our compensation programs. Barney & Barney LLC then reported its findings to the Compensation Committee, with recommendations to bring the Company’s executive compensation closer to the 502019.
2020.
NAVIGATE trial.
In June 2018 after the resignation
Name | 2020 Base Salary | 2019 Base Salary | ||||||
Joel Lewis | $ | 500,000 | (3) | - | (1) | |||
Pol F. Boudes, M.D.. | $ | 440,500 | - | (2) | ||||
Jack W. Callicutt | $ | 302,100 | $ | 285,000 |
(1) | Mr. Lewis became our President and Chief Executive Officer on September 2, 2020. |
(2) | Dr. Boudes became our Chief Medical Officer on March 3, 2020. |
(3) | Pursuant to Mr. Lewis’s Employment Agreement and Deferred Stock Unit Agreement, 20% of Mr. Lewis’ base salary will be paid in cash and 80% will be paid in the form of deferred-stock units in accordance with the terms and subject to the provisions of the DSU Agreement |
Name | Performance Bonus Amount | Awarded Amount As % of Base Salary | ||||||
Harold H. Shlevin, Ph.D. | $ | 215,625 | 43 | % | ||||
Jack W. Callicutt | $ | 90,950 | 32 | % |
March 2021.
Name | Performance Bonus Amount | Awarded Amount As % of Base Salary | ||||||
Joel Lewis | $ | 75,000 | (3) | 45 | % (1) | |||
Pol F. Boudes, M.D. | $ | 110,000 | 30 | % (2) | ||||
Jack W. Callicutt | $ | 85,000 | 28 | % | ||||
(1) Mr. Lewis joined the Company on September 2, 2020 and his bonus was prorated for his employment duration in 2020. (2) Dr. Boudes the Company on March 2, 2020 and his bonus was prorated for his employment duration in 2020. (3) Pursuant to Mr. Lewis’s Employment Agreement and Deferred Stock Unit Agreement, 20% of Mr. Lewis’ bonus will be paid in cash and 80% will be paid in the form of deferred-stock units in accordance with the terms and subject to the provisions of the DSU Agreement |
2020.
Name | Retention Bonus Amount | Awarded Amount As % of Base Salary | ||||||
Harold H. Shlevin, Ph.D. | $ | 250,000 | 50 | % | ||||
Jack W. Callicutt | $ | 142,500 | 50 | % |
Mr. Lewis and Dr. Boudes joined the Company as employees and officers in 2020 and thus were not part of the retention bonus plan.
Name | Retention Bonus Amount | Awarded Amount As % of Base Salary | ||||||
Harold H. Shlevin, Ph.D. | $ | 125,000 | 25 | % (1) | ||||
Jack W. Callicutt | $ | 151,050 | 50 | % |
(1) | Dr. Shlevin retired as our President and Chief Executive Officer effective September 2, 2020 and thus did not receive a retention bonus at December 31, 2020. |
Name | Grant Date | Number of Securities Underlying Options | Exercise Price | |||||||||
Harold H. Shlevin, Ph.D. | 1/16/2019 | 70,000 | $ | 4.72 | ||||||||
Jack W. Callicutt | 1/16/2019 | 50,000 | $ | 4.72 |
Name | Grant Date | Number of Securities Underlying Options | Exercise Price | |||||||||
Harold H. Shlevin, Ph.D. | 1/9/2020 | 70,000 | $ | 2.86 | ||||||||
Jack W. Callicutt | 1/9/2020 | 50,000 | $ | 2.86 |
We entered into (until September 2, 2020)
On June 8, 2018, we entered into a first amendment to the employment agreement with Dr. Shlevin in recognition of his appointment as Chief Executive Officer and President of the Company. In accordance with the amendment, Dr. Shlevin will receive a base salary of $500,000, was granted 35,000 stock options as noted above, and his target bonus opportunity was increasedequal to 50% of his base salary.
COMPENSATION COMMITTEE REPORT
The following report is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to the SEC’s proxy rules or the liabilities of Section 18 of the Exchange Act, and the report shall not be deemed to be incorporated by reference into any prior or subsequent filing by us under the Securities Act of 1933, as amended, or the Exchange Act.
The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis included in this proxy statement. Based on this review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
Name and Principal Position | Year | Salary ($) | Bonus ($) (1) | Option Awards ($) (2) | All Other Compensation ($) | Total ($) | ||||||||||||||||||
Harold H. Shlevin, Ph.D., | 2019 | 500,000 | 465,625 | 268,196 | 72,686 | (3) | 1,306,507 | |||||||||||||||||
Chief Executive Officer & President | 2018 | 395,833 | 375,000 | 891,113 | 68,869 | (4) | 1,730,815 | |||||||||||||||||
2017 | 260,000 | 91,163 | — | 53,992 | (5) | 405,155 | ||||||||||||||||||
Jack W. Callicutt, | 2019 | 285,000 | 233,450 | 191,568 | 68,105 | (6) | 778,123 | |||||||||||||||||
Chief Financial Officer | 2018 | 275,278 | 213,750 | 715,319 | 62,150 | (7) | 1,266,497 | |||||||||||||||||
2017 | 260,000 | 91,163 | — | 54,848 | (8) | 406,011 |
Name and Principal Position | Year | Salary ($) | Bonus ($) | Option Awards ($) (1) | All Other Compensation ($) | Total ($) | ||||||||||||||||
Harold H. Shlevin, Ph.D., | 2020(2) | 375,583 | 335,000 | 154,266 | 54,487 | (4) | 919,336 | |||||||||||||||
Chief Executive Officer & President | 2019 (3) | 500,000 | 465,625 | 268,196 | 72,686 | (5) | 1,306,507 | |||||||||||||||
Joel Lewis, Chief Executive Officer & President | 2020(10) | 164,773 | 75,000 | 486,125 | 27,660 | (11) | 753,558 | |||||||||||||||
Pol F. Boudes, M.D., Chief Medical Officer | 2020(12) | 367,083 | 210,000 | 419,460 | 85,938 | (13) | 1,082,481 | |||||||||||||||
Jack W. Callicutt, | 2020 (6) | 300,675 | 236,050 | 110,190 | 73,457 | (8) | 720,372 | |||||||||||||||
Chief Financial Officer | 2019 (7) | 285,000 | 233,451 | 191,568 | 68,105 | (9) | 778,124 |
(1) |
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Represents the aggregate grant date fair value of option awards made during |
value was calculated using the Black-Scholes options pricing model. For a description of the assumptions used to determine these amounts, see Note 7 of the Notes to the Consolidated Financial Statements in our Annual Reports on Form 10-K (or Form10-K/A, as applicable) for the fiscal years ended December 31, |
(2) | Dr. Shlevin retired from employment as our President and Chief Executive Officer effective September 2, 2020. His salary in 2020 includes the salary earned prior to his retirement. Dr. Shlevin’s bonus amount in 2020 consisted of $125,000 retention bonus in July 2020 and a bonus of $210,000 pursuant to his retirement agreement. |
(3) Dr. | Shlevin’s bonus amount in 2019 consisted of $125,000 retention bonuses paid in July 2019 and January 2020 and $215,625 performance bonus earned in 2019 which was paid in January 2020. |
(4) | Includes $48,635 for health and other insurance and $5,852 for 401(k) plan contributions. |
(5) | Includes $61,486 for health and other insurance and $11,200 for 401(k) plan contributions. |
Callicutt’s bonus amount in 2020 consisted of $75,525 retention bonuses paid in July 2020 and January 2021 and $85,000 performance bonus earned in 2020 which was paid in March 2021. |
(7) | Mr. Callicutt’s bonus amount in 2019 consisted of $71,250 retention bonuses paid in July 2019 and January 2020 and $90,951 performance bonus earned in 2019 which was paid in January 2020. |
(8) | Includes |
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$56,905 for health and other insurance and $11,200 for 401(k) plan contributions. |
Mr. Lewis became our Chief Executive Officer and President effective September 2, 2020, and his performance bonus was prorated for 2021 and paid in March 2021. Pursuant to his employment agreement, 20% his salary and bonus are paid in cash and 80% are in deferred stock units. |
(11) | Includes |
Dr. Boudes became our Chief Medical Officer effective March 2, 2020. He was paid a $100,000 bonus upon joining the Company. His performance bonus of $110,000 was prorated for 2020 and paid in March 2021. |
(13) | Includes |
GRANTS OF PLAN-BASED AWARDS IN 2019
Name | Grant Date | Estimated Possible Payouts UnderNon-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards | |||||||||||||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||||
Harold H. Shlevin, Ph.D. | 01/16/2019 | (1) | 70,000 | $ | 4.72 | $ | 268,196 | (2) | ||||||||||||||||||||||||||||||||||||
Jack W. Callicutt | 01/16/2019 | (1) | 50,000 | $ | 4.72 | $ | 191,568 | (2) |
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Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||||||||||||||||||||||||
Harold H. Shlevin, Ph.D. | 38,000 | (1) | — | 13.38 | 01/21/2024 | — | — | — | — | |||||||||||||||||||||||||||
90,000 | (2) | — | 5.87 | 01/15/2028 | ||||||||||||||||||||||||||||||||
90,000 | (3) | — | 4.16 | 05/22/2028 | ||||||||||||||||||||||||||||||||
35,000 | (3) | — | 6.17 | 06/08/2028 | ||||||||||||||||||||||||||||||||
35,000 | (4) | 35,000 | (4) | 4.72 | 01/16/2029 | |||||||||||||||||||||||||||||||
Jack W. Callicutt | 26,000 | (1) | — | 13.38 | 01/21/2024 | — | — | — | — | |||||||||||||||||||||||||||
8,706 | (5) | — | 1.37 | 01/20/2026 | ||||||||||||||||||||||||||||||||
90,000 | (2) | — | 5.87 | 01/15/2028 | ||||||||||||||||||||||||||||||||
90,000 | (3) | — | 4.16 | 05/22/2028 | ||||||||||||||||||||||||||||||||
25,000 | (4) | 25,000 | (4) | 4.72 | 01/16/2029 |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||||||||||||||||||
Joel Lewis | 54,250 (1) | — | 2.39 | 12/14/2027 | 20,455 | (12) | 45,819 | |||||||||||||||||||||||
35,000 (2) | — | 4.72 | 01/16/2029 | |||||||||||||||||||||||||||
40,000 (3) | — | 2.86 | 01/09/2030 | |||||||||||||||||||||||||||
20,833 (4) | 229,167 (4) | 2.65 | 08/31/2030 | |||||||||||||||||||||||||||
Pol F. Boudes, M.D. | — (5) | 300,000 (5) | 1.75 | 03/12/2030 | — | — | — | — | ||||||||||||||||||||||
Jack W. Callicutt | 26,000 (6) | — | 13.38 | 01/21/2024 | — | — | — | — | ||||||||||||||||||||||
8,706 (7) | — | 1.37 | 01/20/2026 | |||||||||||||||||||||||||||
90,000 (8) | — | 5.87 | 01/15/2028 | |||||||||||||||||||||||||||
90,000 (9) | — | 4.16 | 05/22/2028 | |||||||||||||||||||||||||||
50,000 (10) | — | 4.72 | 01/16/2029 | |||||||||||||||||||||||||||
25,000 (11) | 25,000 (11) | 2.86 | 01/09/2030 |
(1) | 100% of the options vested in full on December 14, 2018. |
(2) | 100% of the options vested in full on January 16, 2020. |
(3) | 100% of the options vested in full on December 31, 2020. |
(4) | One-twelfth of the total options vest quarterly from August 31, 2020, which was the grant date. |
(5) | 20% of the options vest on each of March 2, 2021, March 2, 2022, and March 2023 and 40% of the options vest on March 2, 2024. |
(6) | 25% of the options vested on January 21, 2014, the grant date with the remainder vested ratably on a monthly basis over a three-year period. |
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25% of the options vested on January 29, 2015, the grant date with the remainder vested ratably on a monthly basis over a three-year period. |
Option Exercises and Stock Vested Table in 2019
The following table sets forth the number of shares and value realized by the named executive officers during 2019 on the exercise of stock options and the vesting of restricted stock (or restricted stock units).
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (2) | ||||||||||||
Harold H. Shlevin, Ph.D | 8,706 | 22,113 | — | — | ||||||||||||
Jack W. Callicutt | — | — | — | — |
25% of the |
(9) | 25% of the |
25% of the options vested on June 30, 2019, 25% vested on December 31, 2019, 25% vested on June 30, 2020, and 25% vested on December 31, 2020. |
(11) | 25% of the |
(12) | Mr. Lewis’ stock awards in the table are from board compensation taken in restricted stock |
Pension Benefits
None
Under
(1) | the acquisition of beneficial ownership of 50% or more of either the value of then outstanding equity securities of the Company or the combined voting power of our securities, except for any acquisition directly from us, any acquisition by us or any person that owns a controlling interest in the Company, or any acquisition by any of our employee benefit plans; |
(2) | during any period of three (3) consecutive years, a majority of the Board is no longer comprised of individuals who, as of the beginning of that period, constituted our Board and individuals whose nomination for election was approved by the Board; |
(3) | a reorganization, merger, statutory share exchange or consolidation or similar transaction, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or equity of another entity by the Company, in each case unless (i) substantially all of the owners, respectively, of our outstanding shares of common stock or the combined voting power of our securities immediately before the transaction beneficially own more than 50% of, respectively, the common stock and the combined voting power of the securities of the resulting corporation, in substantially the same proportions as their ownership immediately prior to the transaction, (ii) no person owns 50% of, respectively, the common stock and the combined voting power of the securities of the resulting corporation, unless such ownership existed prior to the transaction and (iii) at least a majority of the members of the board of directors of the resulting entity were members of the Board of Directors of the Company at the time of the execution of the initial agreement or of the action of the Board providing for such transaction ; or |
(4) | approval by the stockholders of a complete liquidation or dissolution of the Company. |
Harold H. Shlevin, PhD
Dr. Shlevin’s employment agreement provides that he shall
The agreement provides that during its term Dr. Shlevin shall not engage in any business competitive with the Company. Following termination of employment, Dr. Shlevin shall not, for 18 months (i) solicit customers or employeesconditions of the CompanyStock Option Agreement. However, if, in connection with a transaction that technically meets, or (ii) render services to any “competing business”may meet, the definition of Change of Control (as defined in the agreement). TheEmployment Agreement), Mr. Callicutt’s employment by the Company or a successor to the Company is
Jack W. Callicutt
Under the Callicutt Employment Agreement, as amended by the Amendment (as such terms are defined on pg. 24 above), if Mr. Callicutt’s employment is terminated by the Company “without cause,” or by Mr. Callicutt
for “good reason,” (as such terms are defined in the Callicutt Employment Agreement, as amended) he shall receive severance equal to: 3 months’ base salary if such termination occurred within 12 months of July 1, 2013 (the “Commencement Date”); 6 months’ base salary if such termination occurred between 12 and 18 months after the Commencement Date; 9 months’ base salary if such termination occurs after 18 months after the Commencement Date, plus, in each case, a portion of the performance bonus for the then-current year based on the number of days elapsed in the year. If Mr. Callicutt’s employment is terminated “for cause”, subject to “cure rights” in certain instances, he is not entitled to severance. If the Callicutt Employment Agreement, as amended, is terminated within 12 months after a change of control by the Company “without cause,” or by Mr. Callicutt for “good reason,” Mr. Callicuttand severance, no benefits shall receive severance equal to 12 months’ base salary, a portionbe payable under the Change of Control provision of the performance bonus for the then-current year based on the number of days elapsed in the year and immediate vesting of all unvested options.
The Callicutt Employment Agreement, as amended, provides that during its term, Mr. Callicutt shall not engage in any business competitive with the Company. Following termination of employment, Mr. Callicutt shall not, for 18 months (i) solicit customers or employees of the Company or (ii) render services to any “competing business” (as defined in the agreement). The Callicutt Employment Agreement also contains provisions binding on Mr. Callicutt with respect to protection of our confidential information.
The following table sets forth the potential benefits payable to our NEOs pursuant to the arrangements described above, assuming termination of employment or a change of control had occurred on December 31, 2019.
Benefit/Plan/Program | Harold H. Shlevin, Ph.D. | Jack W. Callicutt | ||||||
Options (1) | $ | 0 | $ | 0 | ||||
Employment Agreement Change of Control Severance (2) | $ | 500,000 | $ | 285,000 | ||||
Employment Agreement Termination Severance (3) | $ | 375,000 | $ | 213,750 | ||||
Total value upon a change of control (4) | $ | 500,000 | $ | 285,000 | ||||
Total value upon termination of employment due to death or disability (5) | $ | 0 | $ | 0 |
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Name | Fees Earned or Paid in Cash ($) | Restricted Stock Awards ($) (4) | Option Awards ($) (2) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) (3) | Total ($) | ||||||||||||||||||
Gilbert F. Amelio, Ph.D. | 47,000 | — | 134,098 | — | — | 181,098 | ||||||||||||||||||
James C. Czirr | 38,500 | — | 95,784 | — | — | 134,284 | ||||||||||||||||||
Kevin D. Freeman | 46,000 | — | 153,255 | — | — | 199,255 | ||||||||||||||||||
Kary Eldred | 42,500 | — | 95,784 | — | — | 138,284 | ||||||||||||||||||
Joel Lewis | — | 55,000 | 134,098 | — | — | 189,098 | ||||||||||||||||||
Gilbert S. Omenn, M.D., Ph.D. | 45,000 | — | 134,098 | — | — | 179,098 | ||||||||||||||||||
Marc Rubin, M.D. | 38,500 | — | 95,784 | — | — | 134,284 | ||||||||||||||||||
Stephen Shulman (1) | 35,675 | — | 95,784 | — | — | 131,459 | ||||||||||||||||||
Richard Uihlein | — | 35,000 | 153,255 | — | — | 188,255 |
Name | Fees Earned or Paid in Cash ($) | Restricted Stock Awards ($) (4) | Option Awards ($) (2) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) (3) | Total ($) | ||||||||||||||||||
Gilbert F. Amelio, Ph.D. | 47,000 | — | 87,997 | — | — | 134,997 | ||||||||||||||||||
James C. Czirr | 38,500 | — | 65,998 | — | — | 104,498 | ||||||||||||||||||
Kevin D. Freeman | 48,500 | — | 98,997 | — | — | 147,497 | ||||||||||||||||||
Kary Eldred | 42,500 | — | 65,998 | — | — | 108,498 | ||||||||||||||||||
Joel Lewis | — | 58,500 | 87,997 | — | — | 146,497 | ||||||||||||||||||
Gilbert S. Omenn, M.D., Ph.D. | 45,000 | — | 87,997 | — | — | 132,997 | ||||||||||||||||||
Marc Rubin, M.D. | 38,500 | — | 65,998 | — | — | 104,498 | ||||||||||||||||||
Elissa J. Schwartz, Ph.D. (1) | 11,569 | — | — | — | — | 11,569 | ||||||||||||||||||
Harold H. Shlevin, Ph.D. (1) | 11,569 | — | — | — | — | 11,569 | ||||||||||||||||||
Richard Uihlein | — | 35,000 | 98,997 | — | — | 133,997 | ||||||||||||||||||
Richard A. Zordani (1) | 16,528 | — | — | — | — | 16,528 |
(1) | Dr. Schwartz and Mr. |
(2) | Represents the grant date fair value of option awards based upon the Black Scholes valuation model made in 10-K for the fiscal year ended December 31, |
(3) | Excludes travel expense reimbursements. |
(4) | Mr. Lewis and Mr. Uihlein elected to receive restricted stock in lieu of cash retainer for their service. The restricted shares |
Name | Number of Shares Subject to Option Awards Held as of December 31, 2020 | |||
Gilbert F. Amelio, Ph.D. | ||||
James C. Czirr | ||||
Kary Eldred | ||||
Kevin D. Freeman | ||||
Joel Lewis (1) | ||||
Gilbert S. Omenn, M.D., Ph.D. | ||||
Marc Rubin, M.D. | ||||
Richard Uihlein | ||||
| ||||
TOTAL | 1,436,154 | |||
(1) | Mr. Lewis became our Chief Executive Officer and president effective September 2, 2020 and was granted 250,000 stock options which is included here. |
Committee Chairman will receive an annual cash retainer of $5,000; and the Audit Committee Chairman will receive an annual cash retainer of $7,500. Additionally, in December 2016, the Board approved cash retainers of $3,500 to be paid to each member of the Board’s investor relation/public relations committee.
Item 12. Security |
|
Name and Address (1) | Shares of Common Stock Beneficially Owned (2) | Percent of Common Stock (3) | Shares of Series A Preferred Stock Beneficially Owned | Percent of Series A Preferred Stock (4) | ||||||||||||
5% Stockholders | ||||||||||||||||
James C. Czirr | 13,617,451 | (5) | 21.4 | % | 100,000 | 7.3 | % | |||||||||
10X Fund, L.P. (8) | 12,108,043 | (6) | 19.3 | % | — | — | ||||||||||
David Smith (9) | — | — | 175,000 | 12.7 | % | |||||||||||
Early Equities LLC (9) | — | — | 100,000 | (7) | 7.3 | % | ||||||||||
Richard E. Uihlein (11) | 11,151,981 | (12) | 18.9 | % | — | — | ||||||||||
Directors and Named Executive Officers | ||||||||||||||||
James C. Czirr | 13,617,451 | (5) | 21.4 | % | 100,000 | 7.3 | % | |||||||||
Gilbert F. Amelio, Ph.D. | 159,614 | * | — | — | ||||||||||||
Kevin Freeman | 886,009 | (10) | 1.5 | % | — | — | ||||||||||
Joel Lewis | 199,566 | * | — | — | ||||||||||||
Gilbert S. Omenn, M.D., Ph.D. | 218,496 | * | 50,000 | 3.6 | % | |||||||||||
Marc Rubin, M.D. | 88,146 | * | — | — | ||||||||||||
Richard E. Uihlein | 11,151,981 | (12) | 18.9 | % | — | — | ||||||||||
Kary Eldred | 881,575 | (13) | 1.5 | % | — | — | ||||||||||
Harold H. Shlevin, Ph.D. | 296,706 | * | — | — | ||||||||||||
Jack W. Callicutt | 243,905 | * | — | — | ||||||||||||
All executive officers and directors as a group (11 persons) | 27,743,449 | (14) | 40.7 | % | 150,000 | 10.9 | % |
|
Name and Address (1) | Shares of Common Stock Beneficially Owned (2) | Percent of Common Stock (3) | Shares of Series A Preferred Stock Beneficially Owned | Percent of Series A Preferred Stock (4) | ||||||||||||
5% Stockholders | ||||||||||||||||
James C. Czirr | 13,610,095 | (5) | 21.4 | % | 100,000 | 7.5 | % | |||||||||
10X Fund, L.P. (8) | 12,068,687 | (6) | 19.2 | % | — | — | ||||||||||
David Smith (9) | — | — | 175,000 | 13.2 | % | |||||||||||
Early Equities LLC (9) | — | — | 100,000 | (7) | 7.5 | % | ||||||||||
Richard E. Uihlein (11) | 11,223,949 | (12) | 18.6 | % | — | — | ||||||||||
Directors and Named Executive Officers | ||||||||||||||||
James C. Czirr | 13,610,095 | (5) | 21.4 | % | 100,000 | 7.3 | % | |||||||||
Gilbert F. Amelio, Ph.D. | 139,614 | * | — | — | ||||||||||||
Kevin Freeman | 888,881 | (10) | 1.5 | % | — | — | ||||||||||
Joel Lewis | 361,785 | * | — | — | ||||||||||||
Gilbert S. Omenn, M.D., Ph.D. | 260,990 | * | 50,000 | 3.7 | % | |||||||||||
Marc Rubin, M.D. | 118,146 | * | — | — | ||||||||||||
Richard E. Uihlein | 11,223,949 | (12) | 18.6 | % | — | — | ||||||||||
Richard A. Zordani | 15,353 | * | — | — |
Name and Address (1) | Shares of Common Stock Beneficially Owned (2) | Percent of Common Stock (3) | Shares of Series A Preferred Stock Beneficially Owned | Percent of Series A Preferred Stock (4) | ||||
Elissa J. Schwartz | — | — | — | — | ||||
Kary Eldred | 911,575 (13) | 1.6% | — | — | ||||
Harold H. Shlevin, Ph.D. | 366,706 | * | — | — | ||||
Pol F. Boudes | 60,000 | * | — | — | ||||
Jack W. Callicutt | 293,905 | * | — | — | ||||
All executive officers and directors as a group (13 persons) | 28,250,999 (14) | 42.4% | 150,000 | 11.0% |
(1) | Except as otherwise indicated, the address for each named person is c/o Galectin Therapeutics Inc., 4960 Peachtree Industrial Blvd., Suite 240, Norcross, GA 30071. |
(2) | Includes the following number of shares of our common stock issuable upon exercise of outstanding stock options granted to our named executive officers and directors that are exercisable within 60 days after February |
Directors, Nominees and Named Executive Officers | Options Exercisable Within 60 Days | |||
James C. Czirr | ||||
Gilbert F. Amelio, Ph.D. | ||||
Marc Rubin, M.D. | ||||
Gilbert S. Omenn, M.D., Ph.D | ||||
Kevin Freeman | ||||
Kary Eldred | ||||
Joel Lewis. | ||||
Richard E. Uihlein. | ||||
Harold Shlevin, Ph.D. | ||||
Pol F. Boudes, M.D. | ||||
Jack Callicutt | 289,706 | |||
All executive officers and directors as a group | ||||
(3) | For each named person and group included in this table, percentage ownership of our common stock is calculated by dividing the number of shares of our common stock beneficially owned by such person or group by the sum of (i) |
(4) | Based on |
(5) | Includes (i) |
(6) | Includes 5,732,253 common shares issuable upon exercise of warrants; shares of common stock acquired upon exercise of warrants; and common shares issued as stock dividends paid on the Series B preferred stock which is net of shares sold or distributed to 10X Fund limited partners, as to which Mr. Czirr, in his capacity as a managing member of 10X Capital Management Fund, LLC, a Florida limited liability company and general partner of 10X Fund, has voting and investment power, and disclaims beneficial ownership, of these securities. |
(7) | Mr. Smith is the manager of Early Equities LLC, a Connecticut limited liability company, and may be deemed to have voting and investment control over, but disclaims beneficial ownership of, the shares of Series A preferred stock. |
(8) | Contact: c/o 10X Capital Management, LLC at Investment Law Group attn: Bob Mottern 545 Dutch Valley Road NE, Suite A, Atlanta, GA 30324. |
(9) | Contact: c/o David Smith 34 Shorehaven Road E., Norwalk, CT 06855. |
(10) | Includes |
(11) | Contact: c/o Uline Corporation, 12575 Uline Drive, Pleasant Prairie, WI 53158 |
(12) | Includes (i) non-voting stock. |
(13) | Includes 44,915 shares of common stock, 16,869 common stock purchase warrants, and |
(14) | Includes 5,732,253 common shares issuable upon exercise of warrants and common shares acquired upon exercise of warrants or issued as stock dividends on the Series B preferred stock net of shares sold or distributed to 10X Fund limited partners, as to which Mr. Czirr has voting and investment control but are counted one time for purposes of this total. For additional information about the beneficial ownership of our capital stock by Mr. Czirr, see note 5. |
Plan Category | Number of Securities to be issued upon exercise of outstanding options | Weighted- average exercise price of outstanding options | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||
Equity compensation plans approved by security holders | 2,505,256 | $ | 4.45 | 4,000,000 | ||||||||
Equity compensation plans not approved by security holders (1) | 500,000 | $ | 7.02 | — | ||||||||
|
|
|
|
|
| |||||||
Total | 3,005,256 | $ | 4.88 | 4,000,000 |
Plan Category | Number of Securities to be issued upon exercise of outstanding options | Weighted- average exercise price of outstanding options | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||
Equity compensation plans approved by security holders | 3,487,575 | $ | 3.90 | 2,872,307 | ||||||||
Equity compensation plans not approved by security holders (1) | 500,000 | $ | 7.02 | — | ||||||||
Total | 3,987,575 | $ | 4.29 | 2,872,307 |
(1) | Represents grants by our Board for stock options granted to employees and consultants that are outside of the stockholder approved compensation plans. The shares underlying these grants are not registered upon exercise and have six month holding restrictions under Rule 144 of the SEC. |
Item 13. |
|
On December 19, 2017, the2020.
Originally, borrowings may be made byshareholder pursuant to an agreement established in December, 2017 and amended in December, 2018 and January, 2019. Under the arrangement the Company through December 31, 2018. Borrowings bearmay borrow up to $10 million from Mr. Uihlein on an unsecured basis and with any borrowings bearing interest at the Applicable Federal Rate for short termterms loans published by the Internal Revenue Service (2.7%(0.14% in January 2019)2021). All borrowings and interest areBorrowings may be made through December 31, 2021 with repayment due on December 31, 2019 but may be prepaid without penalty.2022. In connection with the Line of Credit agreement, the Company issued to Mr. Uihlein warrants to purchase 1 million shares of the Company’s common stock for $5 per share. Half of the warrants vested at closing of the Line of Credit and the other half vest ratably with borrowings under the agreement. As of the date of this Annual Report, there have been no borrowings under the Line of Credit.
On December 20, 2018, the Line
Item 14. Principal |
|
2020.
Fiscal Year 2019 | Fiscal Year 2018 | |||||||
Audit Fees (1) | $ | 161,000 | $ | 155,000 | ||||
Audit-Related Fees (2) | 22,000 | 23,300 | ||||||
Tax Fees | 16,400 | 16,400 | ||||||
All Other Fees | — | — | ||||||
|
|
|
| |||||
Total Fees | $ | 199,400 | $ | 191,700 | ||||
|
|
|
|
Fiscal Year 2020 | Fiscal Year 2019 | |||||||
Audit Fees (1) | $ | 135,000 | $ | 161,000 | ||||
Audit-Related Fees (2) | 14,323 | 22,000 | ||||||
Tax Fees | 17,000 | 16,400 | ||||||
All Other Fees | — | — | ||||||
Total Fees | $ | 166,323 | $ | 199,400 | ||||
(1) |
|
(2) |
|
Item 15. |
|
* | Filed herewith. |
# | Furnished herewith and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. |
*** | Galectin Therapeutics, Inc. has requested confidential treatment with respect to portions of this exhibit. Those portions have been omitted from the exhibit and filed separately with the U.S. Securities and Exchange Commission. |
† | Executive Compensation Arrangement pursuant to 601(b)(10)(iii)(A) of Regulation S-K |
GALECTIN THERAPEUTICS INC. | ||
By: | /S/ | |
Name: JOEL LEWIS. Title: Chief Executive Officer and President |
Signature | Title | Date | ||
/S/
Joel Lewis | Chief Executive Officer, President and Director (principal executive officer) | March | ||
/S/ JACK W. CALLICUTT Jack W. Callicutt | Chief Financial Officer (principal financial and accounting officer) | March | ||
/S/ RICHARD E. UIHLEIN Richard E. Uihlein | Director and Chairman of the Board | March | ||
/S/
Gilbert F. Amelio, Ph.D. | Director | March | ||
/S/
James C. Czirr | Director | March | ||
/S/
Kary Eldred | Director | March | ||
/S/ KEVIN D. FREEMAN Kevin D. Freeman | Director | March | ||
/S/
Gilbert S. Omenn, M.D., Ph.D. | Director | March | ||
/S/
Marc Rubin, M.D. | Director | March | ||
/S/
Elissa J. Schwartz, Ph.D. | Director | March | ||
/S/ HAROLD H. SHLEVIN, Ph.D. Harold H. Shlevin, Ph.D. | Director | March 31, 2021 | ||
/S/ RICHARD A. ZORDANI Richard A. Zordani | Director | March 31, 2021 |
F-1 | ||||
F-8 | ||||
F-9 |
Subsidiaries:
The Company’s management is responsible for these
but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Definition and Limitations
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation ofconsolidated financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertainwere communicated or required to be communicated to the maintenance of recordsaudit committee and that: (1) relate to accounts or disclosures that in reasonable detail, accurately and fairly reflectare material to the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation ofconsolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effectany way our opinion on the consolidated financial statements.
Becausestatements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Going Concern | ||
Description of Matter | As described further in Note 1 to the consolidated financial statements, the Company has incurred losses each year from inception through December 31, 2020, and expects to incur additional losses in the foreseeable future. Currently, management’s forecasts and related assumptions illustrate their ability to sufficiently fund operations and satisfy the Company’s obligations as they come due for at least one year from the financial statement issuance date. Management made judgments to conclude that it is probable that the Company’s plans will be effectively implemented and will provide the necessary cash flows to fund the Company’s obligations as they become due. The judgments with the highest degree of impact and subjectivity in reaching this conclusion included its ability to raise capital through debt and equity issuances to fund research and development clinical trial costs and other general and administrative costs. As a result, a high degree of auditor judgment and increased audit effort was required in performing audit procedures to evaluate the reasonableness of management’s estimates. | |
How We Addressed the Matter in Our Audit | Our audit procedures included the following: • Obtained an understanding of the internal controls and processes in place over the Company’s preparation of forecasted information and considerations of the Company’s obligations. • We tested the reasonableness of the forecasted research and development expenses, operating expenses, and uses and sources of cash used in management’s assessment of whether the Company has sufficient liquidity to fund operations for at least one year from the financial statement issuance date. This testing included inquiries with management, comparison of prior period forecasts to actual results, consideration of positive and negative evidence impacting management’s forecasts, the Company’s financing arrangements in place as of the report date, consideration of the Company’s relationships with its financing partners, performance of a sensitivity analysis of accelerated uses of cash, and creation of an independent estimate of expected future cash flows. | |
Valuation of Accrued and Prepaid Clinical Trial Expenses | ||
Description of Matter | The Company’s accrued expenses total approximately $4 million at December 31, 2020, which included the estimated obligation for clinical trial expenses incurred as of December 31, 2020 but not paid as of that date in the amount of approximately $3.1 million. In addition, the Company’s total prepaid expenses and other current assets totaled $2.3M, which included amounts that were paid in advance of services incurred pursuant to clinical trials in the amount of approximately $1.1 million. As discussed in Note 2 to the consolidated financial statements, when the third party contract research organization and other vendor billing terms do not coincide with the Company’s period-end, the Company is required to make estimates of its obligations to those vendors, including personnel costs, allocated facility costs, lab supplies, outside services, contract laboratory costs related to manufacturing drug product, clinical trials and preclinical studies costs incurred in a given accounting period and record accruals at the end of the period. The Company bases its estimates on its knowledge of the research and development programs, services performed for the period, past history for related activities and the expected duration of the vendor service contract, where applicable. Payments for these activities are based on the terms of the individual arrangements and may result in payment terms that differ from the pattern of costs incurred. There may be instances in which payments made to vendors will exceed the level of services provided and result in a prepayment of the clinical expense.Auditing the Company’s accrued and prepaid clinical trial expenses is especially challenging due to the large volume of information received from multiple vendors that perform services on the Company’s behalf. While the Company’s estimates of accrued and prepaid clinical trial expenses are primarily based on information received related to each study from its vendors, the Company may need to make an estimate for additional costs incurred. Additionally, due to the long duration of clinical trials and the timing of invoicing received from vendors, the actual amounts incurred are not typically known at the time the financial statements are issued. |
How We Addressed the Matter in Our Audit | Our audit procedures included the following: • Obtained an understanding of the internal controls and processes in place over the Company’s process used in determining the valuation and completeness of accrued and prepaid clinical trial expenses. • We tested the accuracy and completeness of the underlying data used in determining the accrued and prepaid clinical trial expenses and evaluating the assumptions and estimates used by management to adjust the actual information received. We corroborated the schedules of the underlying data used in the accrual calculation with the Company’s third party contract research organization who oversees the clinical trials. To evaluate the completeness and valuation of the accrual, we also tested subsequent invoices received to assess the impact to the accrual. |
December 31, | ||||||||
2019 | 2018 | |||||||
(in thousands) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 47,480 | $ | 8,253 | ||||
Prepaid expenses and other current assets | 729 | 579 | ||||||
|
|
|
| |||||
Total current assets | 48,209 | 8,832 | ||||||
|
|
|
| |||||
Property and equipment, net | — | — | ||||||
Other | 258 | 174 | ||||||
|
|
|
| |||||
Total assets | $ | 48,467 | $ | 9,006 | ||||
|
|
|
| |||||
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ (DEFICIT) EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,661 | $ | 297 | ||||
Accrued expenses | 1,093 | 1,512 | ||||||
Accrued dividends payable | 66 | 299 | ||||||
|
|
|
| |||||
Total current liabilities | 2,820 | 2,108 | ||||||
|
|
|
| |||||
Other liabilities | 52 | — | ||||||
|
|
|
| |||||
Total liabilities | 2,872 | 2,108 | ||||||
|
|
|
| |||||
Commitments and contingencies (Note 10) | ||||||||
Series C 6% super dividend redeemable convertible preferred stock; 1,000 shares authorized, 176 issued and outstanding at December 31, 2019 and 2018, redemption value: $8,652,000, liquidation value: $1,786,000 at December 31, 2019 | 1,723 | 1,723 | ||||||
Stockholders’ equity: | ||||||||
Undesignated stock, $0.01 par value; 20,000,000 shares authorized at December 31, 2019 and 2018, 20,000,000 shares designated at December 31, 2019 and 2018, respectively | — | — | ||||||
Series A 12% convertible preferred stock; 1,742,500 shares authorized, 1,327,500 issued and outstanding at December 31, 2019 and 2018, liquidation value $1,327,500 at December 31, 2019 | 537 | 537 | ||||||
SeriesB-1 12% convertible preferred stock; 900,000 shares authorized, 0 and 900,000 shares issued and outstanding at December 31, 2019 and 2018 | — | 1,761 | ||||||
SeriesB-2 12% convertible preferred stock; 2,100,000 shares authorized, 0 and 2,100,000 shares issued and outstanding at December 31, 2019 and 2018, | — | 3,697 | ||||||
SeriesB-3 8% convertible preferred stock; 2,508,000 shares authorized, 0 and 2,508,000 issued and outstanding at December 31, 2019 and 2018 | — | 1,224 | ||||||
Common stock, $0.001 par value; 100,000,000 shares authorized at December 31, 2019 and 2018, 56,894,642 and 41,190,905 issued and outstanding at December 31, 2019 and 2018, respectively | 56 | 41 | ||||||
Additionalpaid-in capital | 259,673 | 194,130 | ||||||
Retained deficit | (216,394 | ) | (196,215 | ) | ||||
|
|
|
| |||||
Total stockholders’ equity | 43,872 | 5,175 | ||||||
|
|
|
| |||||
Total liabilities, redeemable convertible preferred stock and stockholders’ equity | $ | 48,467 | $ | 9,006 | ||||
|
|
|
|
December 31, | ||||||||
2020 | 2019 | |||||||
(in thousands) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 27,142 | $ | 47,480 | ||||
Prepaid expenses and other current assets | 2,323 | 729 | ||||||
Total current assets | 29,465 | 48,209 | ||||||
Property and equipment, net | 0— | 0— | ||||||
Other | 135 | 258 | ||||||
Total assets | $ | 29,600 | $ | 48,467 | ||||
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ (DEFICIT) EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,292 | $ | 1,661 | ||||
Accrued expenses | 4,042 | 1,093 | ||||||
Accrued dividends payable | 65 | 66 | ||||||
Total current liabilities | 5,399 | 2,820 | ||||||
Other liabilities | 8 | 52 | ||||||
Total liabilities | 5,407 | 2,872 | ||||||
Commitments and contingencies (Note 10) | 0 | 0 | ||||||
Series C 6% super dividend redeemable convertible preferred stock; 1,000 shares authorized, 176 issued and outstanding at December 31, 2020 and 2019, redemption value: $8,546,000, liquidation value: $1,786,000 at December 31, 2020 | 1,723 | 1,723 | ||||||
Stockholders’ equity: | ||||||||
Undesignated stock, $0.01 par value; 20,000,000 shares authorized at December 31, 20 20 and 2019 , 20,000,000 shares designated at December 31, 2020 and 2019, respectively | 0— | 0— | ||||||
Series A 12% convertible preferred stock; 1,742,500 shares authorized, 1,302,500 and 1,327,500 issued and outstanding at December 31, 2020 and 2019, respectively, liquidation value $1,302,500 at December 31, 2020 | 527 | 537 | ||||||
Common stock, $0.001 par value; 100,000,000 shares authorized at December 31, 2020 and 2019, 57,077,055 and 56,894,642 issued and outstanding at December 31, 2020 and 2019, respectively | 56 | 56 | ||||||
Additional paid-in capital | 261,883 | 259,673 | ||||||
Accumulated deficit | (239,996 | ) | (216,394 | ) | ||||
Total stockholders’ equity | 22,470 | 43,872 | ||||||
Total liabilities, redeemable convertible preferred stock and stockholders’ equity | $ | 29,600 | $ | 48,467 | ||||
Year Ended December 31, | ||||||||
2019 | 2018 | |||||||
(in thousands, except per share amounts) | ||||||||
Operating expenses: | ||||||||
Research and development | $ | 7,467 | $ | 6,471 | ||||
General and administrative | 5,971 | 7,131 | ||||||
|
|
|
| |||||
Total operating expenses | 13,438 | 13,602 | ||||||
|
|
|
| |||||
Total operating loss | (13,438 | ) | (13,602 | ) | ||||
|
|
|
| |||||
Other income (expense): | ||||||||
Interest income | 231 | 38 | ||||||
Interest expense | (87 | ) | (336 | ) | ||||
|
|
|
| |||||
Total other income (expense) | 144 | (298 | ) | |||||
|
|
|
| |||||
Net loss | $ | (13,294 | ) | $ | (13,900 | ) | ||
|
|
|
| |||||
Preferred stock dividends | (263 | ) | (1,147 | ) | ||||
Warrant modification (Note 5) | (6,622 | ) | — | |||||
|
|
|
| |||||
Net loss applicable to common stockholders | $ | (20,179 | ) | $ | (15,047 | ) | ||
|
|
|
| |||||
Basic and diluted net loss per share | $ | (0.39 | ) | $ | (0.38 | ) | ||
Shares used in computing basic and diluted net loss per share | 52,238 | 39,414 |
Year Ended December 31, | ||||||||
2020 | 2019 | |||||||
(in thousands, except per share amounts) | ||||||||
Operating expenses: | ||||||||
Research and development | $ | 17,976 | $ | 7,467 | ||||
General and administrative | 5,468 | 5,971 | ||||||
Total operating expenses | 23,444 | 13,438 | ||||||
Total operating loss | (23,444 | ) | (13,438 | ) | ||||
Other income (expense): | ||||||||
Interest income | 66 | 231 | ||||||
Interest expense | ( 87 | ) | (87 | ) | ||||
Total other income (expense) | (21 | ) | 144 | |||||
Net loss | $ | (23,465 | ) | $ | (13,294 | ) | ||
Preferred stock dividends | ( 137 | ) | (263 | ) | ||||
Warrant modification (Note 5) | 0 | (6,622 | ) | |||||
Net loss applicable to common stockholders | $ | (23,602 | ) | $ | (20,179 | ) | ||
Basic and diluted net loss per share | $ | ( 0.41 | ) | $ | (0.39 | ) | ||
Shares used in computing basic and diluted net loss per share | 57,029 | 52,238 |
2019
Series C Super Dividend Redeemable Convertible Preferred Stock | ||||||||
Number of Shares | Amount | |||||||
Balance at January 1, 2018 | 176 | $ | 1,723 | |||||
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Balance at December 31, 2018 | 176 | $ | 1,723 | |||||
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| |||||
Balance at December 31, 2019 | 176 | $ | 1,723 | |||||
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Series C Super Dividend Redeemable Convertible Preferred Stock | ||||||||
Number of Shares | Amount | |||||||
Balance at January 1, 2019 | 176 | $ | 1,723 | |||||
Balance at December 31, 2019 | 176 | $ | 1,723 | |||||
Balance at December 31, 2020 | 176 | $ | 1,723 | |||||
2019
Series A 12% Convertible Preferred Stock | SeriesB-1 12% Convertible Preferred Stock | SeriesB-2 12% Convertible Preferred Stock | SeriesB-3 8% Convertible Preferred Stock | Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||||
Number of Shares | Amount | Number of Shares | Amount | Number of Shares | Amount | Number of Shares | Amount | Number of Shares | Amount | Additional Paid-In Capital | Retained Deficit | Total Stockholders’ Equity (Deficit) | ||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2018 | 1,377,500 | $ | 557 | 900,000 | $ | 1,761 | 2,100,000 | $ | 3,697 | 2,508,000 | $ | 1,224 | 35,789,388 | $ | 36 | $ | 173,363 | $ | (181,168 | ) | $ | (530 | ) | |||||||||||||||||||||||||||||
Series A 12% convertible preferred stock dividend | 27,126 | 146 | (146 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
SeriesB-1 12% convertible preferred stock dividend | 27,835 | 155 | (210 | ) | (55 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
SeriesB-2 12% convertible preferred stock dividend | 64,948 | 363 | (490 | ) | (127 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
SeriesB-3 8% convertible preferred stock dividend | 25,769 | 144 | (194 | ) | (50 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Series C super dividend redeemable convertible preferred stock dividend | 20,394 | 107 | (107 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock | 669,714 | 1 | 5,602 | 5,603 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for warrant exercises | 2,455,595 | 2 | 6,001 | 6,003 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for services | 2,883 | 12 | 12 | |||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for stock option exercises | 2,098,829 | 2 | 3,771 | 3,773 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock from Series A conversion | (50,000 | ) | (20 | ) | 8,424 | 20 | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 4,445 | 4,445 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | (13,900 | ) | (13,900 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
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Balance at December 31, 2018 | 1,327,500 | $ | 537 | 900,000 | $ | 1,761 | 2,100,000 | $ | 3,697 | 2,508,000 | $ | 1,224 | 41,190,905 | $ | 41 | $ | 194,130 | $ | (196,215 | ) | $ | 5,175 | ||||||||||||||||||||||||||||||
Series A 12% convertible preferred stock dividend | 13,275 | 49 | (129 | ) | (80 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
SeriesB-1 12% convertible preferred stock dividend | (6 | ) | (6 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
SeriesB-2 12% convertible preferred stock dividend | (15 | ) | (15 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
SeriesB-3 8% convertible preferred stock dividend | (9 | ) | (9 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Series C super dividend redeemable convertible preferred stock dividend | 14,280 | 53 | (104 | ) | (51 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock | 11,150,620 | 10 | 47,809 | 47,819 | ||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Series B Convertible Preferred to common | (900,000 | ) | (1,767 | ) | (2,100,000 | ) | (3,697 | ) | (2,508,000 | ) | (1,224 | ) | 3,789,346 | 4 | 6,678 | |||||||||||||||||||||||||||||||||||||
Issuance of common stock for warrant exercises | 585,223 | 1 | 2,499 | 2,500 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for stock option exercises | 150,993 | 150 | 150 | |||||||||||||||||||||||||||||||||||||||||||||||||
Warrant modification (Note 5) | 6,622 | (6,622 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 1,683 | 1,683 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | (13,294 | ) | (13,294 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
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Balance at December 31, 2019 | 1,327,500 | $ | 537 | — | — | — | — | — | — | 56,894,642 | $ | 56 | $ | 259,673 | $ | (216,394 | ) | $ | 43,872 | |||||||||||||||||||||||||||||||||
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Series A 12% Convertible Preferred Stock | Series B-1 12%Convertible Preferred Stock | Series B-2 12%Convertible Preferred Stock | Series B-3 8%Convertible Preferred Stock | Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||||
Number of Shares | Amount | Number of Shares | Amount | Number of Shares | Amount | Number of Shares | Amount | Number of Shares | Amount | Additional Paid-In Capital | Retained Deficit | Total Stockholders’ Equity (Deficit) | ||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2019 | 1,327,500 | $ | 537 | 900,000 | $ | 1,761 | 2,100,000 | $ | 3,697 | 2,508,000 | $ | 1,224 | 41,190,905 | $ | 41 | $ | 194,130 | $ | (196,215 | ) | $ | 5,175 | ||||||||||||||||||||||||||||||
Series A 12% convertible preferred stock dividend | 13,275 | 49 | (129 | ) | (80 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Series B-1 12% convertible preferred stock dividend | (6 | ) | (6 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Series B-2 12% convertible preferred stock dividend | (15 | ) | (15 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Series B-3 8% convertible preferred stock dividend | (9 | ) | (9 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Series C super dividend redeemable convertible preferred stock dividend | 14,280 | 53 | (104 | ) | (51 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock | 11,150,620 | 10 | 47,809 | 47,819 | ||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Series B Convertible Preferred to common | (900,000 | ) | (1,767 | ) | (2,100,000 | ) | (3,697 | ) | (2,508,000 | ) | (1,224 | ) | 3,789,346 | 4 | 6,678 | |||||||||||||||||||||||||||||||||||||
Issuance of common stock for warrant exercises | 585,223 | 1 | 2,499 | 2,500 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for stock option exercises | 150,993 | 150 | 150 | |||||||||||||||||||||||||||||||||||||||||||||||||
Warrant modification (Note 5) | 6,622 | (6,622 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 1,683 | 1,683 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | (13,294 | ) | (13,294 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | 1,327,500 | $ | 537 | — | — | — | — | — | — | 56,894,642 | $ | 56 | $ | 259,673 | $ | (216,394 | ) | $ | 43,872 | |||||||||||||||||||||||||||||||||
Series A 12% convertible preferred stock dividend | 26.300 | 61 | (61 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Series C super dividend redeemable convertible preferred stock dividend | 33,416 | 76 | (76 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock | 14,452 | 44 | 44 | |||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Series A Convertible Preferred to common | (25,000 | ) | (10 | ) | 4,553 | 11 | 1 | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for stock option exercises | 84,624 | 219 | 219 | |||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 19,068 | 1,799 | 1,799 | |||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | (23,465 | ) | (23,465 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | 1,302,500 | $ | 527 | 0 | 0 | 0 | 0 | 0 | 0 | 57,077,055 | $ | 56 | $ | 261,883 | $ | (239,996 | ) | $ | 22,470 | |||||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||
2019 | 2018 | |||||||
(in thousands) | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (13,294 | ) | $ | (13,900 | ) | ||
Adjustments to reconcile net loss to net cash from operating activities: | ||||||||
Amortization of right to use asset | 35 | — | ||||||
Stock-based compensation expense | 1,683 | 4,445 | ||||||
Issuance of common stock for services | — | 12 | ||||||
Non-cash interest expense | 87 | 336 | ||||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses and other assets | (356 | ) | 19 | |||||
Accounts payable and accrued expenses | 997 | (1,091 | ) | |||||
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Net cash from operating activities | (10,848 | ) | (10,179 | ) | ||||
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CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Net cash from investing activities | — | — | ||||||
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CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Net proceeds from issuance of common stock and warrants | 50,469 | 15,379 | ||||||
Payment of preferred stock dividends | (394 | ) | — | |||||
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| |||||
Net cash from financing activities | 50,075 | 15,379 | ||||||
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NET INCREASE IN CASH AND CASH EQUIVALENTS | 39,227 | 5,200 | ||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 8,253 | 3,053 | ||||||
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CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 47,480 | $ | 8,253 | ||||
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NONCASH FINANCING ACTIVITIES: | ||||||||
Payment of preferred stock dividends in common stock | $ | 102 | $ | 915 |
Year Ended December 31, | ||||||||
2020 | 2019 | |||||||
(in thousands) | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (23,465 | ) | $ | (13,294 | ) | ||
Adjustments to reconcile net loss to net cash from operating activities: | ||||||||
Amortization of right to use asset | 36 | 35 | ||||||
Stock-based compensation expense | 1,799 | 1,683 | ||||||
Non-cash interest expense | 87 | 87 | ||||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses and other assets | (1,594 | ) | (356 | ) | ||||
Accounts payable and accrued expenses | 2,536 | 997 | ||||||
Net cash from operating activities | (20,601 | ) | (10,848 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Net cash from investing activities | 0— | 0— | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Net proceeds from issuance of common stock and warrants | 263 | 50,469 | ||||||
Payment of preferred stock dividends | 0 | (394 | ) | |||||
Net cash from financing activities | 263 | 50,075 | ||||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (20,338 | ) | 39,227 | |||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 47,480 | 8,253 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 27,142 | $ | 47,480 | ||||
NONCASH FINANCING ACTIVITIES: | ||||||||
Payment of preferred stock dividends in common stock | $ | 137 | $ | 102 |
1. | Nature of Business, |
2. | Summary of Significant Accounting Policies |
no0 Level 2 or 3 assets or liabilities at December 31, 20192020 or 2018.
2019.
2019.
There were 0 impairments of long-lived assets at December 31, 2020 or 2019.
2019.
3. | Property and Equipment |
2019 | 2018 | |||||||
(in thousands) | ||||||||
Leasehold improvements | $ | 2 | $ | 2 | ||||
Computer and office equipment | 13 | 13 | ||||||
Furniture and fixtures | 59 | 59 | ||||||
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Total | 74 | 74 | ||||||
Less accumulated depreciation and amortization | (74 | ) | (74 | ) | ||||
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| |||||
Property and equipment — net | $ | — | $ | — | ||||
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|
2020 | 2019 | |||||||
(in thousands) | ||||||||
Leasehold improvements | $ | 2 | $ | 2 | ||||
Computer and office equipment | 13 | 13 | ||||||
Furniture and fixtures | 59 | 59 | ||||||
Total | 74 | 74 | ||||||
Less accumulated depreciation and amortization | (74 | ) | (74 | ) | ||||
Property and equipment — net | $ | 0— | $ | 0— | ||||
4. | Accrued Expenses |
2019 | 2018 | |||||||
(in thousands) | ||||||||
Legal and accounting fees | $ | 81 | $ | 45 | ||||
Accrued compensation | 973 | 1,294 | ||||||
Lease liability | 39 | — | ||||||
Accrued research and development costs and other | — | 173 | ||||||
|
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| |||||
Total | $ | 1,093 | $ | 1,512 | ||||
|
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|
2020 | 2019 | |||||||
(in thousands) | ||||||||
Legal and accounting fees | $ | 122 | $ | 81 | ||||
Accrued compensation | 789 | 973 | ||||||
Lease liability | 44 | 39 | ||||||
Accrued research and development costs and other | 3,087 | 0— | ||||||
Total | $ | 4,042 | $ | 1,093 | ||||
5. | Stockholders’ Equity |
All issued and outstanding shares of Series
Agreement in 2020, and the 2017 At Market Agreement was terminated in May 2020.
Other
In 2017, the Company entered an agreement with a vendor whereby the Company will issue common stock to the vendor in lieu of paying in cash in amount up to $100,000 for the year. In 2018, the Company issued 2,883 shares of common stock and 290 warrants to purchase shares of common stock at $5.00 per share pursuant to this agreement and the value of such shares and warrants, totaling approximately $12,000, respectively, has been recorded as research and development expense.
On December 23, 2016, the Company and 10X Fund LP amended the
Certain terms of the Series B prior to the conversion into common stock on January 11, 2019 were as follows:
Dividends. Holders of the Series B were entitled to receive cumulative dividends at the rate of 12% for SeriesB-1 andB-2 and 8% for SeriesB-3 per annum (compounding monthly) payable quarterly which may, at the Company’s option, be paid in cash or common stock. Pursuant to an agreement with the holder of all shares of Series B, on January 26, 2011, the Company amended and restated the Certificate of Designation of Preferences, Rights and Limitations for the SeriesB-1 and SeriesB-2, to provide that dividends are payable in cash or shares of Common Stock valued at 100% of the volume weighted average price of the Common Stock for the 20 consecutive trading days prior to the dividend payment date on and after September 30, 2011. If the Company did not pay any dividend on the Series B, dividends would accrue at the rate of 15% per annum (compounding monthly).
Other Restrictions. So long as any shares of the Series B remain outstanding, the Company may not, without the approval of the holders of a majority of the shares of Series B outstanding, among other things, (i) change the size of the Company’s Board of Directors; (ii) amend or repeal the Company’s Articles of Incorporation or Bylaws or file any articles of amendment designating the preferences, limitations and relative rights of any series of preferred stock, that would alter or change the preferences, rights, privileges or powers of, or restriction provided for the benefit of the Series B; (iii) create or increase the authorized amount of any additional class or series of shares of stock that is equal to or senior to Series B; (iv) increase or decrease the authorized number of shares of the Series B; (v) purchase, redeem or otherwise acquire for value any shares of any class of capital stock; (vi) merge or consolidate the Company into or with any other corporation or sell, assign, lease, pledge, encumber or otherwise dispose of all or substantially all of the Company’s assets or those of any subsidiary; (vii) voluntarily or involuntarily liquidate, dissolve or wind up the Company or the Company’s business; (viii) pay or declare dividends on any capital stock other than the Preferred Stock, unless the Series B share ratably in such dividend and all accrued dividends payable with
respect to the Series B have been paid prior to the payment or declaration of such dividend; (ix) acquire an equitable interest in, or the assets or business of any other entity in any form of transaction; (x) create or commit us to enter into a joint venture, licensing agreement or exclusive marketing or other distribution agreement with respect to the Company’s products, other than in the ordinary course of business; (xi) permit the Company or any subsidiary to sell or issue any security of such subsidiary to any person or entity other than the Company; (xii) enter into, create, incur, assume or guarantee any indebtedness for borrowed money of any kind (other than indebtedness existing on the initial closing date and approved by Series B shareholders); (xiii) enter into, create, incur or assume any liens of any kind (other than certain permitted liens); (xiv) issue any common stock or common stock equivalents; (xv) increase the number of shares of the Company’s common stock that may be issued pursuant to options, warrants or rights to employees, directors, officers, consultants or advisors above the number of shares that were authorized for issuance under our 2001 Stock Incentive Plan, 2003Non-Employee Director Stock Incentive Plan and 2009 Incentive Compensation Plan as of September 9, 2016.
200% | before the second anniversary of the date of issuance; | |
250% | on or after the second anniversary of the date of issuance, but before the third anniversary of the date of issuance; |
300% | on or after the third anniversary of the date of issuance, but before the fourth anniversary of the date of issuance; | |
350% | on or after the fourth anniversary of the date of issuance, but before the fifth anniversary of the date of issuance; | |
400% | on or after the fifth anniversary of the date of issuance, but before the sixth anniversary of the date of issuance; | |
450% | on or after the sixth anniversary of the date of issuance, but before the seventh anniversary of the date of issuance; | |
500% | on or after the seventh anniversary of the date of issuance, but before the eighth anniversary of the date of issuance; and | |
550% | on or after the eighth anniversary of the date of issuance, but before the ninth anniversary of the date of issuance. |
$8,546,000.
|
| ||||
| ||||
| ||||
| ||||
Outstanding at December 31, 2018 | 10,647,026 | |||
Issued | 2,622,154 | |||
Exercised | (730,976 | ) | ||
Canceled | — | |||
Outstanding at December 31, 2019 | 12,538,204 | |||
Issued | 0— | |||
Exercised | 0— | |||
Canceled | 0 | |||
Outstanding at December 31, 2020 | 12,538,204 | |||
Issued in Connection With | Number Issued | Exercise Price | Exercisable Date | Expiration Date | ||||||||||||
February 12, 2009 SeriesB-1 Transaction $3.00 Investor Warrants — Class B | 1,200,000 | $ | 3.00 | February 12, 2009 | February 12, 2024 | |||||||||||
May 13, 2009 SeriesB-2 Transaction $3.00 Investor Warrants — Class B | 600,000 | $ | 3.00 | May 13, 2009 | May 13, 2024 | |||||||||||
June 30, 2009 SeriesB-2 Transaction $3.00 Investor Warrants — Class B | 333,333 | $ | 3.00 | June 30, 2009 | June 30, 2024 | |||||||||||
August 12, 2009 SeriesB-2 Transaction $3.00 Investor Warrants — Class B | 200,000 | $ | 3.00 | August 12, 2009 | August 12, 2024 | |||||||||||
September 30, 2009 SeriesB-2 Transaction $3.00 Investor Warrants — Class B | 216,666 | $ | 3.00 | September 30, 2009 | September 30, 2024 |
Issued in Connection With | Number Issued | Exercise Price | Exercisable Date | Expiration Date | ||||||||||||
November 4, 2009 SeriesB-2 Transaction $3.00 Investor Warrants — Class B | 106,666 | $ | 3.00 | November 4, 2009 | November 4, 2024 | |||||||||||
December 8, 2009 SeriesB-2 Transaction $3.00 Investor Warrants — Class B | 133,143 | $ | 3.00 | December 8, 2009 | December 8, 2024 | |||||||||||
January 29, 2010 SeriesB-2 Transaction $3.00 Investor Warrants — Class B | 216,667 | $ | 3.00 | January 29, 2010 | January 29, 2025 | |||||||||||
March 8, 2010 SeriesB-2 Transaction $3.00 Investor Warrants — Class B | 223,334 | $ | 3.00 | March 8, 2010 | March 8, 2025 | |||||||||||
April 30, 2010 SeriesB-2 Transaction $3.00 Investor Warrants — Class B | 204,192 | $ | 3.00 | April 30, 2010 | April 30, 2025 | |||||||||||
May 10, 2010 SeriesB-2 Transaction $3.00 Investor Warrants — Class B | 143,166 | $ | 3.00 | May 10, 2010 | May 10, 2025 | |||||||||||
November 25, 2015 Offering Warrants | 1,180,240 | $ | 2.50 | May 25, 2016 | May 25, 2021 | |||||||||||
September 22, 2016 SeriesB-3 Transaction $3.00 Investor Warrants | 698,158 | $ | 3.00 | September 22, 2016 | September 22, 2023 | |||||||||||
September 29, 2016 SeriesB-3 Transaction $3.00 Investor Warrants | 846,100 | $ | 3.00 | September 29, 2016 | September 29, 2023 | |||||||||||
December 22, 2016 Private placement warrants | 1,466,204 | $ | 5.00 | December 22, 2016 | December 23, 2023 | |||||||||||
December 23, 2016 SeriesB-3 Transaction $3.00 Investor Warrants | 924,780 | $ | 3.00 | December 23, 2016 | December 23, 2023 | |||||||||||
December 28, 2016 Private placement warrants | 644,468 | $ | 5.00 | December 28, 2016 | December 28, 2023 | |||||||||||
February 27, 2017 Private placement warrants | 76,776 | $ | 5.00 | February 27, 2017 | February 27, 2024 | |||||||||||
2018 and 2017 Warrants issued for services | 2,157 | $ | 5.00 | | Various dates in 2018 and 2017 | | | Various dates in 2025 and 2024 | | |||||||
December 19, 2017 Line of credit warrants | 500,000 | $ | 5.00 | December 19, 2017 | December 19, 2024 | |||||||||||
May 23, 2019 Rights offering warrants | 2,622,154 | $ | 7.00 | May 23, 2019 | May 23, 2026 | |||||||||||
|
| |||||||||||||||
Total outstanding warrants | 12,538,204 | |||||||||||||||
|
|
Issued in Connection With | Number Issued | Exercise Price | Exercisable Date | Expiration Date | ||||||||||||
February 12, 2009 Series B-1 Transaction $3.00 Investor Warrants — Class B | 1,200,000 | $ | 3.00 | February 12, 2009 | February 12, 2024 | |||||||||||
May 13, 2009 Series B-2 Transaction $3.00 Investor Warrants — Class B | 600,000 | $ | 3.00 | May 13, 2009 | May 13, 2024 | |||||||||||
June 30, 2009 Series B-2 Transaction $3.00 Investor Warrants — Class B | 333,333 | $ | 3.00 | June 30, 2009 | June 30, 2024 | |||||||||||
August 12, 2009 Series B-2 Transaction $3.00 Investor Warrants — Class B | 200,000 | $ | 3.00 | August 12, 2009 | August 12, 2024 | |||||||||||
September 30, 2009 Series B-2 Transaction $3.00 Investor Warrants — Class B | 216,666 | $ | 3.00 | September 30, 2009 | September 30, 2024 |
Issued in Connection With | Number Issued | Exercise Price | Exercisable Date | Expiration Date | ||||||||||||
November 4, 2009 Series B-2 Transaction $3.00 Investor Warrants — Class B | 106,666 | $ | 3.00 | November 4, 2009 | November 4, 2024 | |||||||||||
December 8, 2009 Series B-2 Transaction $3.00 Investor Warrants — Class B | 133,143 | $ | 3.00 | December 8, 2009 | December 8, 2024 | |||||||||||
January 29, 2010 Series B-2 Transaction $3.00 Investor Warrants — Class B | 216,667 | $ | 3.00 | January 29, 2010 | January 29, 2025 | |||||||||||
March 8, 2010 Series B-2 Transaction $3.00 Investor Warrants — Class B | 223,334 | $ | 3.00 | March 8, 2010 | March 8, 2025 | |||||||||||
April 30, 2010 Series B-2 Transaction $3.00 Investor Warrants — Class B | 204,192 | $ | 3.00 | April 30, 2010 | April 30, 2025 | |||||||||||
May 10, 2010 Series B-2 Transaction $3.00 Investor Warrants — Class B | 143,166 | $ | 3.00 | May 10, 2010 | May 10, 2025 | |||||||||||
November 25, 2015 Offering Warrants | 1,180,240 | $ | 2.50 | May 25, 2016 | May 25, 2021 | |||||||||||
September 22, 2016 Series B-3 Transaction $3.00 Investor Warrants | 698,158 | $ | 3.00 | September 22, 2016 | September 22, 2023 | |||||||||||
September 29, 2016 Series B-3 Transaction $3.00 Investor Warrants | 846,100 | $ | 3.00 | September 29, 2016 | September 29, 2023 | |||||||||||
December 22, 2016 Private placement warrants | 1,466,204 | $ | 5.00 | December 22, 2016 | December 23, 2023 | |||||||||||
December 23, 2016 Series B-3 Transaction $3.00 Investor Warrants | 924,780 | $ | 3.00 | December 23, 2016 | December 23, 2023 | |||||||||||
December 28, 2016 Private placement warrants | 644,468 | $ | 5.00 | December 28, 2016 | December 28, 2023 | |||||||||||
February 27, 2017 Private placement warrants | 76,776 | $ | 5.00 | February 27, 2017 | February 27, 2024 | |||||||||||
2018 and 2017 Warrants issued for services | 2,157 | $ | 5.00 | Various dates in 2018 and 2017 | Various dates in 2025 and 2024 | |||||||||||
December 19, 2017 Line of credit warrants | 500,000 | $ | 5.00 | December 19, 2017 | December 19, 2024 | |||||||||||
May 23, 2019 Rights offering warrants | 2,622,154 | $ | 7.00 | May 23, 2019 | May 23, 2026 | |||||||||||
Total outstanding warrants | 12,538,204 | |||||||||||||||
7. | Stock-Based Compensation |
form of options, stock appreciation rights, restricted stock and other stock-based awards to employees, officers, directors, consultants and other eligible persons. At December 31, Research and development General and administrative Total stock-based compensation expense warrants and deferred stock units:2019,2020, the Company has a stock-based compensation plan where the Company’s common stock has been made available for equity-based incentive grants as part of the Company’s compensation programs. In December 2019, the Company adopted the 2019 Omnibus Equity Incentive Plan (the “2019 Plan”) which provided for the issuance of up to 4,000,000 shares of the Company’s common stock in the2019, 4,000,0002020, 2,822,000 shares were available for future grant under the 2019 Plan. Also, the Company previously had the 2009 Incentive Compensation Plan (the “2009 Plan”) which, after amendments, provided for issuance of up to 6,733,334 shares of the Company’s common stock in the form of options, stock appreciation rights, restricted stock and other stock-based awards to employees, officers, directors, consultants and other eligible persons. Provisions of the 2009 Plan stipulated that no0 grants could be made after February 2019; however, grants made prior to that date remain outstanding for their legal term.2019,2020, 500,000and common stock warrants: Year Ended
December 31, 2019 2018 $ 318 $ 1,944 1,365 2,501 $ 1,683 $ 4,445
Year Ended December 31, | ||||||||
2020 | 2019 | |||||||
Research and development | $ | 516 | $ | 318 | ||||
General and administrative | 1,283 | 1,365 | ||||||
Total stock-based compensation expense | $ | 1,799 | $ | 1,683 | ||||
2019 | 2018 | |||||||
Risk-free interest rate | 2.68 | % | 2.47 | % | ||||
Expected life of the options | 6.0 years | 5.7 years | ||||||
Expected volatility of the underlying stock | 103.7 | % | 103.5 | % | ||||
Expected dividend rate | 0 | % | 0 | % |
2020 | 2019 | |||||||
Risk-free interest rate | 1.26 | % | 2.68 | % | ||||
Expected life of the options | 6.0 years | 6.0 years | ||||||
Expected volatility of the underlying stock | 97.9 | % | 103.7 | % | ||||
Expected dividend rate | 0 | % | 0 | % |
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (in years) | Aggregate Intrinsic Value (in thousands) | |||||||||||||
Outstanding, December 31, 2017 | 5,155,263 | $ | 4.11 | |||||||||||||
Granted | 1,011,875 | 5.01 | ||||||||||||||
Forfeited/Cancelled | (1,354,330 | ) | 7.31 | |||||||||||||
Exercised | (2,098,829 | ) | 2.00 | |||||||||||||
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|
| |||||||||||||
Outstanding, December 31, 2018 | 2,713,979 | $ | 4.67 | |||||||||||||
Granted | 530,000 | 4.72 | ||||||||||||||
Forfeited/Cancelled | (92,730 | ) | 2.91 | |||||||||||||
Exercised | (150,993 | ) | 1.83 | |||||||||||||
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|
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| |||||||||
Outstanding, December 31, 2019 | 3,000,256 | $ | 4.88 | 6.22 | $ | 705 | ||||||||||
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| |||||||||
Exercisable, December 31, 2019 | 2,592,756 | $ | 4.90 | 5.78 | $ | 705 |
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (in years) | Aggregate Intrinsic Value (in thousands) | |||||||||||||
Outstanding, December 31, 2018 | 2,713,979 | $ | 4.67 | |||||||||||||
Granted | 530,000 | 4.72 | ||||||||||||||
Forfeited/Cancelled | (92,730 | ) | 2.91 | |||||||||||||
Exercised | (150,993 | ) | 1.83 | |||||||||||||
Outstanding, December 31, 2019 | 3,000,256 | $ | 4.88 | |||||||||||||
Granted | 1,095,000 | 2.51 | ||||||||||||||
Forfeited/Cancelled | (834 | ) | 1.80 | |||||||||||||
Exercised | (106,847 | ) | 2.61 | |||||||||||||
Outstanding, December 31, 2020 | 3,987,575 | $ | 4.29 | 6.34 | $ | 450 | ||||||||||
Exercisable, December 31, 2020 | 3,335,908 | $ | 4.68 | 5.75 | $ | 303 |
Options Outstanding | Options Exercisable | |||||||||||||||||||
Exercise Price (Range) | Number of Shares | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | Number of Shares | Weighted Average Exercise Price | |||||||||||||||
(in years) | ||||||||||||||||||||
$0.87 – 1.00 | 190,500 | 6.95 | $ | 0.88 | 190,500 | $ | 0.88 | |||||||||||||
$1.01 – 3.00 | 677,103 | 6.02 | 2.37 | 677,103 | 2.37 | |||||||||||||||
$3.01 – 5.00 | 1,071,678 | 8.19 | 4.36 | 664,178 | 4.13 | |||||||||||||||
$5.01 – 8.00 | 878,475 | 4.27 | 6.55 | 878,475 | 6.55 | |||||||||||||||
$8.01 – 13.38 | 182,500 | 4.06 | 13.38 | 182,500 | 13.38 | |||||||||||||||
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3,000,256 | 6.22 | $ | 4.88 | 2,592,756 | $ | 4.90 | ||||||||||||||
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|
Options Outstanding | Options Exercisable | |||||||||||||||||||
Exercise Price (Range) | Number of Shares | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | Number of Shares | Weighted Average Exercise Price | |||||||||||||||
(in years) | ||||||||||||||||||||
$0.87 – 1.00 | 190,500 | 5.95 | $ | 0.88 | 190,500 | $ | 0.88 | |||||||||||||
$1.01 – 3.00 | 1,683,060 | 7.81 | 2.47 | 1,031,393 | 2.60 | |||||||||||||||
$3.01 – 5.00 | 1,053,040 | 7.17 | 4.35 | 1,053,040 | 4.35 | |||||||||||||||
$5.01 – 8.00 | 878,475 | 3.27 | 6.55 | 878,475 | 6.55 | |||||||||||||||
$8.01 – 13.38 | 182,500 | 3.06 | 13.38 | 182,500 | 13.38 | |||||||||||||||
3,987,575 | 6.34 | $ | 4.29 | 3,335,908 | $ | 4.68 | ||||||||||||||
|
On December 19, 2017,September 2020, the Company entered into an employment agreement with its new Chief Executive Officer whereby 20% of his base salary and performance bonuses will be paid in cash, and 80% will be paid in the form of deferred stock units (“
8. | Line of Credit |
On December 20, 2018, the Line of Credit arrangement was extended for one year for both borrowings and maturity. At the time of the conversion of the Series B Convertible Preferred stock into common stock (See Note 5), on January 11, 2019, the Line of Credit arrangement was extended for an additional two years for both borrowings and maturity. After the second amendment to the Line of Credit arrangement, borrowings may be made through December 31, 2021 with repayment due on December 31, 2022. There was no additional consideration or benefits provided to Mr. Uihlein for any of the extensions of the Line of Credit.
9. | Loss Per Share |
net loss per share does not assume the issuance of common shares that have an anti-dilutive effect on net loss per share.
Year Ended December 31, | ||||||||
(in thousands, except per share amounts) | ||||||||
2019 | 2018 | |||||||
Net loss | $ | (13,294 | ) | $ | (13,900 | ) | ||
Preferred stock dividends | (263 | ) | (1,147 | ) | ||||
Warrant modification | (6,622 | ) | — | |||||
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| |||||
Net loss applicable to common stockholders | $ | (20,179 | ) | $ | (15,047 | ) | ||
|
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|
| |||||
Basic and diluted net loss per share | $ | (0.39 | ) | $ | (0.38 | ) | ||
Shares used in computing basic and diluted net loss per share | 52,238 | 39,414 |
Year Ended December 31, | ||||||||
(in thousands, except per share amounts) | ||||||||
2020 | 2019 | |||||||
Net loss | $ (23,465) | $ (13,294) | ||||||
Preferred stock dividends | (137) | (263) | ||||||
Warrant modification | — | (6,622) | ||||||
Net loss applicable to common stockholders | $ (23,602) | $ (20,179) | ||||||
Basic and diluted net loss per share | $ (0.41) | $ (0.39) | ||||||
Shares used in computing basic and diluted net loss per share | 57,029 | 52,238 |
Year Ended December 31, | ||||||||
2019 (Shares) | 2018 (Shares) | |||||||
Warrants to purchase shares of common stock | 12,538,204 | 10,647,026 | ||||||
Options to purchase shares of common stock | 3,000,256 | 2,713,979 | ||||||
Shares of common stock issuable upon conversion preferred stock | 514,590 | 4,303,948 | ||||||
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|
|
| |||||
16,053,050 | 17,664,953 | |||||||
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|
|
Year Ended December 31, | ||||||||
2020 (Shares) | 2019 (Shares) | |||||||
Warrants to purchase shares of common stock | 12,538,204 | 12,538,204 | ||||||
Options to purchase shares of common stock | 3,987,575 | 3,000,256 | ||||||
Shares of common stock issuable upon conversion preferred stock | 510,424 | 514,590 | ||||||
17,036,203 | 16,053,050 | |||||||
10. | Commitments and Contingencies |
2020 2021 2022 Total Less imputed interest Present value of lease liability yearyears ended December 31, 2020 and 2019 was $44,000 and $44,000 and is included in general and administrative expenses. As of December 31, 2019,2020, the right to use lease asset consisted of $84,000$48,000 and is included in other assets. Also, at December 31, 2019,2020, current lease liability of $39,000$44,000 is included in accrued expenses and other and noncurrent lease liability of $52,000$8,000 is in other noncurrent liabilities.20192020 in thousands: $ 47 48 8 103 13 $ 90 $ 48 8 56 4 $ 52
11. | Galectin Sciences LLC |
12. | Income Taxes |
Pursuant to the SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications
2019 | 2018 | |||||||
(in thousands) | ||||||||
Operating loss carryforwards | $ | 39,982 | $ | 36,417 | ||||
Tax credit carryforwards | 910 | 1,195 | ||||||
Other temporary differences | 5,278 | 4,678 | ||||||
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| |||||
46,170 | 42,290 | |||||||
Less valuation allowance | (46,170 | ) | (42,290 | ) | ||||
|
|
|
| |||||
Net deferred tax asset | $ | — | $ | — | ||||
|
|
|
|
2020 | 2019 | |||||||
(in thousands) | ||||||||
Operating loss carryforwards | $ | 46,203 | $ | 39,982 | ||||
Tax credit carryforwards | 910 | 910 | ||||||
Other temporary differences | 5,438 | 5,278 | ||||||
52,551 | 46,170 | |||||||
Less valuation allowance | (52,551 | ) | (46,170 | ) | ||||
Net deferred tax asset | $ | 0— | $ | 0— | ||||
2019 | 2018 | |||||||
Tax benefit at U.S. statutory rates | (21 | %) | (21 | %) | ||||
State tax benefit | (4.7 | %) | (4.7 | %) | ||||
Permanent differences | 0.8 | % | 4.0 | % | ||||
Impact of the 2017 Tax Act | — | — | ||||||
Other | (4.2 | %) | 1.1 | % | ||||
Expiring state NOL’s | — | — | ||||||
Changes in valuation allowance | 29.1 | % | 20.6 | % | ||||
|
|
|
| |||||
0 | % | 0 | % | |||||
|
|
|
|
2020 | 2019 | |||||||
Tax benefit at U.S. statutory rates | (21 | %) | (21 | %) | ||||
State tax benefit | (4.7 | %) | (4.7 | %) | ||||
Permanent differences | 0.8 | % | 0.8 | % | ||||
Impact of the 2017 Tax Act | 0— | 0— | ||||||
Other | (2.2 | %) | (4.2 | %) | ||||
Expiring state NOL’s | 0— | 0— | ||||||
Changes in valuation allowance | 27.1 | % | 29.1 | % | ||||
0 | % | 0 | % | |||||
F-23