QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 90-0577933 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | ☐ | Accelerated filer | ☐ | ||
Non-accelerated filer | ☐ | Smaller reporting company | ☒ | ||
Do not check if smaller reporting company |
Page | |||
3 | |||
10 | |||
16 | |||
16 | |||
16 | |||
16 | |||
18 | |||
18 | |||
18 | |||
19 |
2 |
FINANCIAL INFORMATION |
Financial Statements. |
TABLE OF CONTENTS | PAGE | |
4 | ||
5 | ||
6 | ||
7 |
3 |
December 31, | September 30, | |||||||
2013 | 2013 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | �� | |||||||
Cash | $ | 4,016,224 | $ | 5,122,895 | ||||
Prepaid expenses | 19,817 | 45,350 | ||||||
Total Current Assets | 4,036,041 | 5,168,245 | ||||||
EQUIPMENT, net | 26,834 | 29,755 | ||||||
OTHER ASSETS | ||||||||
Patent costs, net | 526,257 | 545,865 | ||||||
TOTAL ASSETS | $ | 4,589,132 | $ | 5,743,865 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable and accrued expenses | $ | 250,231 | $ | 465,686 | ||||
Notes payable | — | 14,051 | ||||||
Total Current Liabilities | 250,231 | 479,737 | ||||||
TOTAL LIABILITIES | 250,231 | 479,737 | ||||||
STOCKHOLDERS’ EQUITY | ||||||||
Preferred stock, Series B; 6,000,000 shares authorized, $0.0001 par value, 0 and 500,000 shares issued and outstanding, respectively | — | 50 | ||||||
Common stock; 180,000,000 shares authorized, $0.0001 par value, 19,970,046 and 19,741,541shares issued and outstanding, respectively | 1,997 | 1,974 | ||||||
Additional paid-in capital | 40,541,713 | 39,444,988 | ||||||
Accumulated deficit | (21,628,748 | ) | (21,628,748 | ) | ||||
Deficit accumulated during the development stage | (14,576,061 | ) | (12,554,136 | ) | ||||
Total Stockholders’ Equity | 4,338,901 | 5,264,128 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 4,589,132 | $ | 5,743,865 |
4 |
From Inception of | ||||||||||||
the Development | ||||||||||||
Stage on | ||||||||||||
October 1, | ||||||||||||
For the Three Months Ended | 2007 Through | |||||||||||
December 31, | December 31, | |||||||||||
2013 | 2012 | 2013 | ||||||||||
REVENUES | $ | — | $ | — | $ | — | ||||||
COST OF SALES | — | — | — | |||||||||
GROSS PROFIT | — | — | — | |||||||||
OPERATING EXPENSES | ||||||||||||
General and administrative | 57,777 | 70,190 | 1,503,686 | |||||||||
Professional fees | 384,215 | 47,031 | 3,334,040 | |||||||||
Research and development | 1,352,356 | 578,513 | 6,388,691 | |||||||||
Salaries and wages | 227,145 | 119,017 | 2,547,866 | |||||||||
Total Operating Expenses | 2,021,493 | 814,751 | 13,774,283 | |||||||||
OPERATING LOSS | (2,021,493 | ) | (814,751 | ) | (13,774,283 | ) | ||||||
OTHER INCOME (EXPENSE) | ||||||||||||
Interest expense | (513 | ) | (559 | ) | (56,742 | ) | ||||||
Gain/(Loss) on derivative liability | — | (1,403,123 | ) | (1,801,871 | ) | |||||||
Gain on sale of assets | — | — | 70,500 | |||||||||
Gain on settlement of debt | — | — | 153,557 | |||||||||
Other income | 81 | 81 | 154,365 | |||||||||
Total Other Income (Expense) | (432 | ) | (1,403,601 | ) | (1,480,191 | ) | ||||||
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | (2,021,925 | ) | (2,218,352 | ) | (15,254,474 | ) | ||||||
PROVISION FOR INCOME TAXES | — | — | — | |||||||||
INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS | (2,021,925 | ) | (2,218,352 | ) | (15,254,474 | ) | ||||||
Income from discontinued operations (including gain on disposal of $606,000) | — | — | 678,413 | |||||||||
Income tax benefit | — | — | — | |||||||||
GAIN ON DISCONTINUED OPERATIONS | — | — | 678,413 | |||||||||
NET LOSS | $ | (2,021,925 | ) | $ | (2,218,352 | ) | $ | (14,576,061 | ) | |||
BASIC AND DILUTED LOSS PER SHARE | $ | (0.10 | ) | $ | (0.14 | ) | ||||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: | ||||||||||||
BASIC AND DILUTED | 19,872,539 | 15,857,093 |
5 |
From Inception | ||||||||||||
of the | ||||||||||||
Development | ||||||||||||
Stage on | ||||||||||||
October 1, | ||||||||||||
For the Three Months Ended | 2007 Through | |||||||||||
December 31, | December 31, | |||||||||||
2013 | 2012 | 2013 | ||||||||||
OPERATING ACTIVITIES | ||||||||||||
Net loss | $ | (2,021,925 | ) | $ | (2,218,352 | ) | $ | (14,576,061 | ) | |||
Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||||||
Discontinued operations | — | — | (678,413 | ) | ||||||||
Common stock issued for services | — | — | 599,989 | |||||||||
Fair value of warrants issued for services | 700,393 | 167,966 | 2,219,775 | |||||||||
Fair value of employee stock options | 146,303 | 52,495 | 1,978,133 | |||||||||
(Gain) loss on extinguishment of debt | — | — | (89,592 | ) | ||||||||
Gain on sale of asset | — | — | (70,500 | ) | ||||||||
(Gain) loss on derivative liability | — | 1,403,123 | 1,801,871 | |||||||||
Depreciation | 2,921 | 2,364 | 31,587 | |||||||||
Amortization of patent costs | 19,608 | 19,607 | 273,743 | |||||||||
Changes in operating assets and liabilities | ||||||||||||
Prepaid expenses and deposits | 25,533 | 7,563 | 118,941 | |||||||||
Other receivables and other current assets | — | — | 85,025 | |||||||||
Accounts payable and accrued expenses | (165,455 | ) | (95,914 | ) | 108,393 | |||||||
Net Cash Used in Operating Activities | (1,292,622 | ) | (661,148 | ) | (8,197,109 | ) | ||||||
INVESTING ACTIVITIES | ||||||||||||
Proceeds from sale of asset | — | — | 70,500 | |||||||||
Purchase of equipment | — | — | (58,421 | ) | ||||||||
Purchase of patents and other intellectual property | — | — | (300,000 | ) | ||||||||
Discontinued operations | — | — | 418,000 | |||||||||
Net Cash Provided by (Used in) Investing Activities | — | — | 130,079 | |||||||||
FINANCING ACTIVITIES | ||||||||||||
Proceeds from the sale of preferred stock and warrants | — | — | 1,005,000 | |||||||||
Proceeds from the sale of common stock and warrants | — | — | 2,150,000 | |||||||||
Proceeds from warrants exercised for cash | 200,002 | 111,891 | 9,359,317 | |||||||||
Proceeds from related party payables | — | — | 125,453 | |||||||||
Repayments of related party payables | — | — | (125,453 | ) | ||||||||
Proceeds from short-term notes payable | — | — | 64,408 | |||||||||
Repayments of short-term notes payable | (14,051 | ) | (14,562 | ) | (202,746 | ) | ||||||
Repayment of convertible debentures | — | — | (490,000 | ) | ||||||||
Net Cash Provided by Financing Activities | 185,951 | 97,329 | 11,885,979 | |||||||||
NET CHANGE IN CASH | (1,106,671 | ) | (563,819 | ) | 3,818,949 | |||||||
CASH AT BEGINNING OF PERIOD | 5,122,895 | 2,632,413 | 197,275 | |||||||||
CASH AT END OF PERIOD | $ | 4,016,224 | $ | 2,068,594 | $ | 4,016,224 | ||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION CASH PAID FOR: | ||||||||||||
Interest | $ | 513 | $ | 560 | $ | 76,445 | ||||||
Income Taxes | — | — | — | |||||||||
NON CASH FINANCING ACTIVITIES: | ||||||||||||
Common stock and warrants issued in advance of services | $ | — | $ | — | $ | 5,320,432 | ||||||
Financing of insurance premiums through issuance of short term notes | — | — | 138,338 | |||||||||
Conversion of preferred for common stock | 50 | 14 | 558 | |||||||||
Noncash exercise of options | — | 9 | 11 | |||||||||
Transfer of investment for dividends payable | — | — | 186,000 | |||||||||
Purchase of patents for debenture | — | — | 500,000 | |||||||||
Conversion of debenture | — | — | 10,000 | |||||||||
Common stock issued to settle accounts payable | 50,000 | — | 50,000 | |||||||||
Options issued to settle accounts payable | — | — | 3,991 |
6 |
7 |
Date | Number | Exercise | Contractual | Expiration | |||||||||||||
Issued | Outstanding | Price | Life (Years) | Date | |||||||||||||
Balance 10/1/08 | 4,503,286 | 3.54 | 5 | Various | |||||||||||||
03/20/09 | 1,666,667 | 1.50 | 5 | 03/31/14 | |||||||||||||
06/03/09 | 3,722,224 | 0.54 | 5 | 06/03/14 | |||||||||||||
09/30/09 | 50,000 | 1.20 | 5 | 06/30/14 | |||||||||||||
Expired | — | — | — | — | |||||||||||||
Balance 9/30/09 | 9,942,177 | 2.06 | — | — | |||||||||||||
10/09/09 | 29,333 | 1.50 | 5 | 10/29/14 | |||||||||||||
11/09/09 | 6,000 | 1.50 | 5 | 11/09/14 | |||||||||||||
12/04/09 | 43,333 | 1.80 | 2 | 12/04/11 | |||||||||||||
12/15/09 | (1,861,112 | ) | 0.54 | — | — | ||||||||||||
01/15/10 | 1,861,112 | 1.65 | 5 | 01/15/15 | |||||||||||||
01/15/10 | (1,861,112 | ) | 0.54 | — | — | ||||||||||||
04/09/10 | 3,333 | 1.65 | 5 | 4/9/2015 | |||||||||||||
07/23/10 | 31,000 | 1.50 | 3 | 07/23/13 | |||||||||||||
Expired | — | — | — | — | |||||||||||||
Balance 9/30/10 | 8,194,064 | 2.66 | — | — | |||||||||||||
12/30/10 | 840,000 | 1.65 | 5 | 12/30/15 | |||||||||||||
05/12/11 | 18,333 | 1.50 | 5 | 05/12/16 | |||||||||||||
06/13/11 | 100,000 | 1.50 | 2 | 06/13/13 | |||||||||||||
07/15/11 | 33,333 | 1.62 | 5 | 07/15/16 | |||||||||||||
07/15/11 | 40,000 | 1.62 | 5 | 07/15/16 | |||||||||||||
08/23/11 | 16,667 | 2.01 | 3 | 08/23/14 | |||||||||||||
Expired | (363,523 | ) | 3.57 | — | — | ||||||||||||
Balance 9/30/11 | 8,878,874 | 2.50 | — | — | |||||||||||||
12/16/11 | 305,559 | 1.95 | 5 | 12/16/16 | |||||||||||||
12/21/12 | 1,042 | 1.95 | 5 | 12/21/12 | |||||||||||||
03/03/12 | 116,667 | 1.95 | 5 | 03/03/17 | |||||||||||||
04/10/12 | (14,464 | ) | 1.80 | — | — | ||||||||||||
04/12/12 | 5,000 | 2.70 | 3 | 4/12/2015 | |||||||||||||
05/18/12 | 116,667 | 2.85 | 3 | 5/18/2015 | |||||||||||||
06/28/12 | (1,766,334 | ) | 1.65 | — | — | ||||||||||||
06/28/12 | 1,059,803 | 3.60 | 5 | 06/28/17 | |||||||||||||
07/11/12 | 16,667 | 2.85 | 3 | 07/11/15 | |||||||||||||
07/17/12 | (10,000 | ) | 1.50 | — | — | ||||||||||||
09/07/12 | 25,000 | 3.00 | 5 | 09/07/17 | |||||||||||||
Expired | (206,843 | ) | 2.37 | — | — | ||||||||||||
Balance 9/30/12 | 8,527,638 | 2.80 | — | — | |||||||||||||
10/24/2012 | (66,667 | ) | 1.50 | — | — | ||||||||||||
3/7/2013 | (6,996 | ) | 3.57 | — | — | ||||||||||||
3/11/2013 | (1,679 | ) | 3.57 | — | — | ||||||||||||
3/21/2013 | 40,000 | 4.32 | 5 | 3/21/2018 | |||||||||||||
3/21/2013 | 16,667 | 4.32 | 3 | 3/21/2018 | |||||||||||||
3/22/2013 | (3,704 | ) | 1.65 | — | — | ||||||||||||
3/27/2013 | (840,000 | ) | 1.65 | — | — | ||||||||||||
4/18/2013 | (1,406,320 | ) | 3.57 | — | — | ||||||||||||
6/7/2013 | (6,519 | ) | 1.65 | — | — | ||||||||||||
6/14/2013 | (1,000 | ) | 1.50 | — | — | ||||||||||||
7/2/2013 | (50,000 | ) | 1.50 | — | — | ||||||||||||
9/20/2013 | (13,889 | ) | 1.95 | — | — | ||||||||||||
Expired | (326,597 | ) | 3.57 | — | — | ||||||||||||
9/30/2013 | 5,860,934 | 2.77 | — | — | |||||||||||||
10/1/2013 | 100,000 | 7.96 | 3 | 10/1/2016 | |||||||||||||
10/31/2013 | (55,556 | ) | 3.60 | — | — | ||||||||||||
12/30/2013 | 26,667 | 7.94 | 3 | 12/30/2016 | |||||||||||||
Expired | — | — | — | — | |||||||||||||
12/31/2013 | 5,932,045 | 2.88 | — | — |
8 |
Date | Number | Exercise | Contractual | Expiration | |||||||||||||
Issued | Outstanding | Price | Life (Years) | Date | |||||||||||||
Prior 10/1/2008 | — | $ | — | — | — | ||||||||||||
04/09/09 | 193,047 | 1.95 | 5 | 04/09/13 | |||||||||||||
Balance 09/30/2009 | 193,047 | 1.95 | — | — | |||||||||||||
04/12/10 | 333,334 | 1.50 | 5 | 04/12/15 | |||||||||||||
Expired | (10,725 | ) | 1.95 | — | — | ||||||||||||
Balance 9/30/2010 | 515,656 | 1.66 | — | — | |||||||||||||
Issued | — | — | — | — | |||||||||||||
Expired | — | — | — | — | |||||||||||||
Balance 9/30/2011 | 515,656 | 1.66 | — | — | |||||||||||||
03/09/12 | 566,667 | 1.71 | — | 3/9/2017 | |||||||||||||
Expired | — | — | — | — | |||||||||||||
Balance 9/30/2012 | 1,082,323 | 1.69 | — | — | |||||||||||||
Exercised - 11/30/12 | (53,624 | ) | 1.78 | — | — | ||||||||||||
Exercised - 03/27/13 | (128,698 | ) | 1.65 | — | — | ||||||||||||
Issued - 04/30/13 | 116,667 | 4.74 | 5 | 4/30/2018 | |||||||||||||
Issued - 05/17/13 | 116,667 | 4.68 | 5 | 5/17/2018 | |||||||||||||
Expired | — | — | — | — | |||||||||||||
09/30/13 | 1,133,335 | 2.31 | — | — | |||||||||||||
Issued | — | — | — | — | |||||||||||||
Expired | — | — | — | — | |||||||||||||
12/31/13 | 1,133,335 | $ | 2.31 | — | — |
9 |
Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
10 |
Squalamine eye drops are designed for self-administration which may provide several potential advantages over the FDA approved current standards of care (Roche/Genetech’s Lucentis® and Regeneron’s Eylea® Intravitreal Injections). |
11 |
● | Eye drops versus standard of care which is an intravitreal injection directly into the eye every 4-8 weeks on a chronic basis |
● | Reduction or elimination of intravitreal injections has the potential to provide patients with improved safety by reducing or eliminating side effects associated with the intravitreal injection procedure |
● | Inhibition of multiple growth factors may achieve superior visual acuity outcomes. Clinical evidence has demonstrated that inhibiting VEGF and PDGF together may provide patients with better visual acuity outcomes than anti-VEGF therapy alone |
● | Cost advantage of manufacturing a small molecule when compared to large molecule proteins and antibodies |
● | Ocular Tolerance and Toxicity: In a dose escalation safety study involving daily eye drop treatment in Dutch belted rabbits over a 28 day period, the formulation proved safe, and exhibited no signs of ocular toxicity or changes in intraocular pressure. Importantly, no macroscopic or histopathological changes to the ocular tissues were noted. | |
● | Single Dose Biodistribution study: A single eye drop was administered to the front of the eye in Dutch belted rabbits. At all evaluated timepoints, drug concentrations in the posterior sclera-choroid region behind the retina at the back of the eye exceeded the tissue concentrations of Squalamine that are known to block the choroidal neovascularization process in Wet-AMD. | |
● | Multi Dose Biodistribution Study: Squalamine eye drops were administered once or twice daily in both eyes for up to 14 days in Dutch belted rabbits. The eyes were examined one full dosing interval (12 hours when given twice daily, 24 hours when given once daily) after the last administration of Squalamine eye drops to determine concentrations of Squalamine in the posterior ocular tissues (“Trough” level). At all time points and dosing regimens, Trough Squalamine concentrations exceeded tissue concentrations of Squalamine that are known to block the choroidal neovascularization process in Wet-AMD. | |
● | Long Term Ocular Tolerance and Toxicity: In a 26-week safety and toxicity study in male and female Dutch belted rabbits, Squalamine or placebo eye drops were administered via topical instillation twice a day in both eyes. Ophthalmoscopic examinations were conducted throughout the study period to assess ocular toxicity (irritation, redness, swelling, discharge). Blood and urine samples for clinical pathology evaluations were collected, and blood samples for determination of the plasma concentrations of squalamine eye drops and toxicokinetic evaluations were collected from all animals at designated time points. At study termination, necropsy examinations were performed, and organs and optical tissues were microscopically examined. |
No adverse effects of treatment were observed in any of the parameters evaluated including clinical findings, body weights, food consumption, ocular irritation, hematology, coagulation, clinical chemistry, urinalysis and macroscopic pathology examinations. Importantly, ophthalmoscopic examinations indicated no signs of clouding of the lens, no corneal opacities or deposits, and no increase in intraocular pressure. In addition, microscopic histopathology evaluations on ocular tissues were normal. Squalamine also did not build up in plasma over long term administration, indicating reduced potential for systemic side effects. |
12 |
We have also commenced two investigator sponsored trials (“IST”) in indications where a molecule that possesses anti-angiogenic properties may provide therapeutic benefit. Study OHR-003 is a monotherapy IST evaluating Squalamine Eye Drops in five patients with Proliferative Diabetic Retinopathy. The Principal Investigator of Study OHR-003 will be presenting a case study from the ongoing trial at the Macula Society meeting on February 19, 2014 and we expect the final data to be available in the second half of calendar 2014 for presentation at a scientific conference or forum. Study OHR-004 is an IST evaluating Squalamine Eye Drops in 20 patients with Branch and Central Retinal Vein Occlusion. We expect the data from OHR-004 to be available in the second half of calendar 2014 for presentation by the investigator at a scientific forum or conference.
We also anticipate initiating two additional IST’s to further evaluate Squalamine eye drops for the treatment of diabetic macular edema in the first quarter of calendar 2014. Study OHR-005 will evaluate Squalamine Eye Drops in a randomized, masked, placebo controlled trial of approximately 30 patients with Diabetic Macular Edema (“DME”). Study OHR-006 will evaluate Squalamine Eye Drops in combination with monthly Lucentis® injections for patients that have been sub responders to monthly intravitreal Lucentis® injections. The trial will enroll approximately 20 patients and will be randomized, masked, and placebo controlled.
13 |
14 |
2013 | 2012 | Change | ||||||||||
Operating Expenses | ||||||||||||
General and administrative | $ | 57,777 | $ | 70,190 | $ | (12,413 | ) | |||||
Professional fees | 384,215 | 47,031 | 337,184 | |||||||||
Research and development | 1,352,356 | 578,513 | 773,843 | |||||||||
Salaries and wages | 227,145 | 119,017 | 108,128 | |||||||||
Total Operating Expenses | 2,021,493 | 814,751 | 1,206,742 | |||||||||
Operating Income (Loss) | (2,021,493 | ) | (814,751 | ) | (1,206,742 | ) | ||||||
Gain (loss) on derivative liability | — | (1,403,123 | ) | 1,403,123 | ||||||||
Other income and expenses | (432 | ) | (478 | ) | 46 | |||||||
Net Income (Loss) | $ | (2,021,925 | ) | $ | (2,218,352 | ) | $ | 196,427 |
15 |
Quantitative and Qualitative Risk |
Controls and Procedures |
OTHER INFORMATION |
Legal Proceedings |
Unregistered Sales of Equity Securities and Use of Proceeds. |
16 |
17 |
Defaults Upon Senior Securities. |
Removed and Reserved. |
Other Information |
18 |
Exhibits |
Exhibit | Number | ||
19 |
Date: February 14, 2014 | ||
OHR PHARMACEUTICAL, INC. (Registrant) | ||
By: | /s/ Irach Taraporewala | |
Irach Taraporewala | ||
Principal Executive Officer | ||
By: | /s/ Sam Backenroth | |
Sam Backenroth | ||
Chief Financial Officer (Principal Financial and Chief Accounting Officer) |
20 |