Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2022 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Entity File Number | 001-35994 | ||
Entity Registrant Name | NightHawk Biosciences, Inc. | ||
Entity Incorporation | DE | ||
Entity Tax Identification Number | 26-2844103 | ||
Entity Address, Address Line One | 627 Davis Drive, Suite 300 | ||
Entity Address, City or Town | Morrisville | ||
Entity Address, State or Province | NC | ||
Entity Address, Postal Zip Code | 27560 | ||
City Area Code | 919 | ||
Local Phone Number | 240-7133 | ||
Title of 12(b) Security | Common Stock, $0.0002 par value per share | ||
Trading Symbol | NHWK | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 65,407,051 | ||
Entity Common Stock, Shares Outstanding | 26,049,209 | ||
Entity Central Index Key | 0001476963 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | BDO USA, LLP | ||
Auditor Firm ID | 243 | ||
Auditor Location | Raleigh, NC |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 8,434,554 | $ 8,053,879 |
Short-term investments | 35,837,309 | 88,324,922 |
Accounts receivable | 81,456 | 66,049 |
Grant receivable | 1,524,522 | |
Income tax refund receivable | 600,877 | |
Prepaid expenses and other current assets | 3,575,541 | 2,886,520 |
Total Current Assets | 50,054,259 | 99,331,370 |
Property and Equipment, net | 20,480,375 | 2,158,479 |
Intangible assets, net | 8,669,375 | 3,500,000 |
Grant receivable, net of current | 1,318,359 | |
Goodwill | 3,301,959 | |
Operating lease right-of-use asset | 6,005,147 | 1,782,884 |
Finance lease right-of-use asset | 15,329,075 | 470,700 |
Other assets | 260,011 | 12,193,540 |
Deposits | 296,711 | 205,901 |
Total Assets | 104,396,912 | 120,961,233 |
Current Liabilities | ||
Accounts payable | 4,424,053 | 922,782 |
Deferred revenue, current portion | 1,585,808 | |
Operating lease liability, current portion | 490,378 | 350,343 |
Finance lease liability, current portion | 301,048 | 260,574 |
Accrued expenses and other liabilities | 4,301,922 | 2,419,676 |
Contingent consideration, current portion | 6,934,114 | 593,037 |
Contingent consideration, related party - current portion | 174,333 | |
Total Current Liabilities | 18,037,323 | 4,720,745 |
Long Term Liabilities | ||
Other long-term liabilities | 53,530 | |
Derivative warrant liability | 11,020 | |
Deferred tax liability | 215,937 | |
Deferred revenue, net of current portion | 32,500 | 35,000 |
Operating lease liability, net of current portion | 3,079,887 | 1,060,856 |
Financing lease liability, net of current portion | 5,520,034 | 255,429 |
Contingent consideration, net of current portion | 5,290,500 | 1,990,118 |
Contingent consideration, related party | 585,027 | |
Total Liabilities | 31,960,244 | 8,927,662 |
Commitments and Contingencies (Note 10 and Note 14) | ||
Stockholders' Equity | ||
Common stock, $0.0002 par value; 250,000,000 shares authorized, 25,661,488 and 25,649,824 shares issued and outstanding at December 31, 2022 and December 31, 2021 | 5,126 | 5,055 |
Additional paid-in capital | 283,019,456 | 278,890,153 |
Accumulated deficit | (209,153,659) | (165,718,953) |
Accumulated other comprehensive income (loss) | 51,924 | (67,941) |
Total Stockholders' Equity - NightHawk Biosciences, Inc. | 73,922,847 | 113,108,314 |
Non-Controlling Interest | (1,486,179) | (1,074,743) |
Total Stockholders' Equity | 72,436,668 | 112,033,571 |
Total Liabilities and Stockholders' Equity | $ 104,396,912 | $ 120,961,233 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 0.0002 | $ 0.0002 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 25,661,488 | 25,649,824 |
Common stock, shares outstanding | 25,661,488 | 25,649,824 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue: | ||
Total revenue | $ 6,383,169 | $ 2,112,806 |
Operating expenses: | ||
Product cost of sales | 6,401,018 | |
Research and development | 23,461,400 | 16,455,278 |
General and administrative | 21,130,879 | 16,828,229 |
Goodwill impairment loss | 1,452,338 | |
Amortization of intangible asset | 1,030,625 | |
In-process research and development impairment | 3,500,000 | 2,366,000 |
Change in fair value of contingent consideration | (3,452,015) | 430,000 |
Total operating expenses | 52,071,907 | 37,531,845 |
Loss from operations | (45,688,738) | (35,419,039) |
Change in fair value of warrant liability | 11,020 | 22,758 |
Interest income | 987,247 | 815,316 |
Unrealized loss on available-for-sale securities | (1,701,428) | (842,538) |
Other expense, net | (759,235) | (123,278) |
Total non-operating loss | (1,462,396) | (127,742) |
Net loss before income taxes | (47,151,134) | (35,546,781) |
Income tax benefit | 3,288,937 | 145,974 |
Net loss | (43,862,197) | (35,400,807) |
Net loss - non-controlling interest | (427,491) | (329,339) |
Net loss attributable to NightHawk Biosciences, Inc. | $ (43,434,706) | $ (35,071,468) |
Net loss per share, basic (in dollars per share) | $ (1.70) | $ (1.41) |
Net loss per share, diluted (in dollars per share) | $ (1.70) | $ (1.41) |
Weighted-average common shares outstanding, basic (in shares) | 25,606,326 | 24,913,942 |
Weighted-average common shares outstanding, diluted (in shares) | 25,606,326 | 24,913,942 |
Comprehensive loss: | ||
Net loss | $ (43,862,197) | $ (35,400,807) |
Unrealized gain on foreign currency translation | 119,865 | 98,115 |
Total comprehensive loss | (43,742,332) | (35,302,692) |
Comprehensive loss attributable to non-controlling interest | (427,491) | (329,339) |
Comprehensive loss - NightHawk Biosciences, Inc. | (43,314,841) | (34,973,353) |
Product sales | ||
Revenue: | ||
Total revenue | 5,980,993 | |
Grant and contract revenue | ||
Revenue: | ||
Total revenue | $ 402,176 | $ 2,112,806 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock | APIC | Accumulated Deficit | Accumulated Other Comprehensive Gain (Loss) | Non-Controlling Interest | Total |
Beginning Balance at Dec. 31, 2020 | $ 4,519 | $ 247,048,349 | $ (130,647,485) | $ (166,056) | $ (745,404) | $ 115,493,923 |
ATM raise | 420 | 26,303,862 | 26,304,282 | |||
Issuance of common stock from vesting of restricted stock awards | 110 | (110) | ||||
Stock issuance costs | (658,184) | (658,184) | ||||
Stock based compensation | 6,168,981 | 6,168,981 | ||||
Issuance of restricted stock | 3 | (3) | ||||
Exercise of options | 6 | 27,255 | 27,261 | |||
Cancellation and payout of fractional shares | (3) | 3 | ||||
Other comprehensive loss | 98,115 | 98,115 | ||||
Net loss | (35,071,468) | (329,339) | (35,400,807) | |||
Ending Balance at Dec. 31, 2021 | 5,055 | 278,890,153 | (165,718,953) | (67,941) | (1,074,743) | 112,033,571 |
Net loss | (15,127,708) | |||||
Ending Balance at Jun. 30, 2022 | 98,713,663 | |||||
Beginning Balance at Dec. 31, 2021 | 5,055 | 278,890,153 | (165,718,953) | (67,941) | (1,074,743) | 112,033,571 |
Net loss | (28,475,479) | |||||
Ending Balance at Sep. 30, 2022 | 86,198,726 | |||||
Beginning Balance at Dec. 31, 2021 | 5,055 | 278,890,153 | (165,718,953) | (67,941) | (1,074,743) | 112,033,571 |
Issuance of common stock from vesting of restricted stock awards | 65 | (65) | ||||
Common Stock Issuance ESPP | 6 | 43,631 | 43,637 | |||
Stock based compensation | 4,085,737 | 4,085,737 | ||||
Exercise of options | 16,055 | 16,055 | ||||
Other comprehensive loss | 119,865 | 119,865 | ||||
Net loss | (43,434,706) | (427,491) | (43,862,197) | |||
Ending Balance at Dec. 31, 2022 | $ 5,126 | $ 283,019,456 | $ (209,153,659) | $ 51,924 | $ (1,486,179) | 72,436,668 |
Beginning Balance at Jun. 30, 2022 | 98,713,663 | |||||
Net loss | (13,347,771) | |||||
Ending Balance at Sep. 30, 2022 | $ 86,198,726 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash Flows from Operating Activities | ||
Net loss | $ (43,862,197) | $ (35,400,807) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Goodwill impairment loss | 1,452,338 | |
In-process R&D impairment loss | 3,500,000 | 2,366,000 |
Depreciation and amortization | 2,115,015 | 607,667 |
Amortization of intangible asset | 1,030,625 | |
Noncash lease expense | 116,583 | 83,809 |
Noncash interest expense | 21,970 | |
Stock-based compensation | 4,085,737 | 6,168,981 |
Change in fair value of common stock warrants | (11,020) | (22,758) |
Change in fair value of contingent consideration | (3,452,015) | 430,000 |
Unrealized loss on investments | 1,701,443 | 842,538 |
Deferred tax liability | (3,288,937) | (145,974) |
Increase (decrease) in cash arising from changes in assets and liabilities, net of acquisitions: | ||
Accounts receivable | (15,967) | 110,111 |
Grant receivable | (206,163) | (1,318,359) |
Prepaid expenses and other current assets | 58,656 | (1,060,915) |
Income tax refund receivable | 443,968 | |
Contract receivables | 24,526,231 | |
Inventory | 5,844,000 | |
Right-of-use assets | (12,158,238) | |
Other assets | 12,233,529 | (12,193,540) |
Deposits | (64,560) | (83,122) |
Accounts payable | 3,299,326 | (126,937) |
Deferred revenue | 1,583,308 | (806,217) |
Accrued expenses and other liabilities | (3,126,158) | 929,023 |
Other long-term liabilities | (53,530) | 17,286 |
Net Cash Used In Operating Activities | (5,700,364) | (38,128,906) |
Cash Flows from Investing Activities | ||
Purchase of short-term investments | (2,457,348) | (66,960,279) |
Sale of short-term investments | 53,243,519 | 78,635,257 |
Purchase of property and equipment | (20,117,998) | (1,904,713) |
Disposal of property and equipment | 388,103 | |
Acquisition of Elusys Therapeutics, net of cash paid | 2,719,899 | |
Payment of contingent consideration | (22,784,571) | |
Net Cash Provided By Investing Activities | 10,991,604 | 9,770,265 |
Cash Flows from Financing Activities | ||
Proceeds from the issuance of common stock | 59,692 | 26,304,282 |
Proceeds from the exercise of stock options | 27,261 | |
Stock issuance costs | (658,184) | |
Repayments of principal under finance lease | (231,633) | (183,010) |
Payment of contingent consideration | (4,735,000) | |
Net Cash (Used In) Provided by Financing Activities | (4,906,941) | 25,490,349 |
Effect of exchange rate changes on cash and cash equivalents | (3,624) | (9,719) |
Net Increase (Decrease) in Cash and Cash Equivalents | 380,675 | (2,878,011) |
Cash and Cash Equivalents - Beginning of the Year | 8,053,879 | 10,931,890 |
Cash and Cash Equivalents - End of the Year | 8,434,554 | 8,053,879 |
Supplemental Disclosure for Cash Flow Information: | ||
Right-of-use assets obtained upon operating lease commencements | 6,348,346 | 88,596 |
Right-of-use assets obtained (surrendered) upon operating lease modifications | (81,752) | 37,767 |
Right-of-use assets obtained upon financing lease commencements | 15,477,515 | $ 408,677 |
Right-of-use assets obtained due to financing lease modifications | 37,654 | |
Supplemental disclosure of non-cash investing and financing activities: | ||
Purchases of property and equipment included in accounts payable | 288,807 | |
Contingent and deferred cash consideration related to Elusys acquisition | $ 42,853,685 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2022 | |
Organization | |
Organization | 1. Organization NightHawk Biosciences is a fully integrated biopharmaceutical company specializing in the end-to-end development and commercialization of innovative medical countermeasures that combat unmet and emerging biothreats. NightHawk ’ ’ ’ “ ” ’ “ ” ’ ® During the past year, NightHawk ’ Effective May 3, 2022, Heat Biologics, Inc. changed its name to NightHawk Biosciences, Inc. (the “ ” “ ” |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of NightHawk Biosciences, Inc., and its subsidiaries (“the Company”), Pelican Therapeutics, Inc. (“Pelican”), Heat Biologics I, Inc. (“Heat I”), Heat Biologics III, Inc. (“Heat III”), Heat Biologics IV, Inc. (“Heat IV”), Heat Biologics GmbH, Heat Biologics Australia Pty Ltd., Zolovax, Inc., Skunkworx Bio, Inc. (formerly known as Delphi Therapeutics, Inc.), Scorpius BioManufacturing, Inc. (“Scorpius”) (formerly Scorpion Biological Services, Inc), Blackhawk Bio, Inc., Abacus Biotech, Inc., and Elusys Therapeutics, Inc. (“Elusys”). The functional currency of the entities located outside the United States of America (the foreign entities) is the applicable local currency of the foreign entities. Assets and liabilities of the foreign entities are translated at period-end exchange rates. Statement of operations accounts are translated at the average exchange rate during the period. The effects of foreign currency translation adjustments are included in other comprehensive loss, which is a component of accumulated other comprehensive loss in stockholders’ equity. All significant intercompany accounts and transactions have been eliminated in consolidation. The December 31, 2022 and 2021 year-end financials include an 85% controlling interest in Pelican. NightHawk accounts for its less than 100% interest in the consolidated financial statements in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Accordingly, the Company presents non-controlling interest as a component of stockholders’ equity on its consolidated balance sheets and reports non-controlling interest net loss under the heading “net loss – non-controlling interest” in the consolidated statements of operations and comprehensive loss. Restatement of Prior Quarterly 2022 Financial Statements (Unaudited) During the preparation and review of its annual tax provision for the year ended December 31, 2022, it was determined that the Company made certain errors in the manner in which it recognized a deferred tax asset valuation allowance related to the acquisition of Elusys Therapeutics, Inc. (“Elusys”). Under ASC 740 – Income Taxes, the release of an acquirer’s valuation allowance on the acquirer’s (i.e., the Company’s) deferred tax assets in the amount of the acquired Elusys deferred tax liability (“DTL”) should be recorded as an income tax benefit and be reported as a component of net loss in the unaudited consolidated statement of operations and comprehensive loss. The DTL was recorded in the unaudited consolidated balance sheet at June 30, 2022 and September 30, 2022, however the DTL was not and should have been recorded as an income tax benefit within the unaudited consolidated statement of operations and comprehensive loss for the quarter ending June 30, 2022. This error resulted in net loss being overstated by $3.3 million for the three and six months ended June 30, 2022 and the nine months ended September 30, 2022. In accordance with Staff Accounting Bulletin ("SAB") No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company evaluated these misstatements, and based on an analysis of quantitative and qualitative factors, determined that the impact of these misstatements was material to its interim reporting periods ended June 30, and September 30, 2022. Accordingly, the Company has restated its unaudited consolidated financial statements for the interim reporting periods for the three- and six-months ended June 30, 2022, and three- and nine- months ended September 30, 2022, respectively, and has included that restated unaudited financial information within this annual report. There is no cumulative impact to the Company’s full-year 2022 financial statements as a result of this restatement. Restatement of amounts in previously filed unaudited quarterly financial statements are reflected in Note 17- Restatement of Interim Financial Statements. Because we are restating prior periods, we are also reflecting another immaterial adjustment related to an additional error that was identified during this process. The Company recorded a measurement period adjustment in the third quarter which reduced the acquired definite lived intangible asset value by approximately $1.5 million. Given that the DTL is calculated using the acquired intangible asset value, the Company should have also adjusted the purchase price allocation by recording a decrease to goodwill of $0.3 million. This also reduces the deferred tax assets utilized to offset the acquired DTL and thus increases the valuation allowance. This is adjusted through a decrease in the income tax benefit recognized for the three and nine-months ended September 30, 2022 of $0.3 million. This is adjusted in the restated unaudited consolidated balance sheet at September 30, 2022 and the restated unaudited statement of operations and comprehensive loss for the quarter ending September 30, 2022. Going Concern Uncertainty The Company has an accumulated deficit of $209.2 million as of December 31, 2022 and a net loss of approximately $43.9 million for the year ended December 31, 2022 and has not generated significant revenue or positive cash flows from operations. The Company expects to incur significant expenses and continued losses from operations for the foreseeable future. The Company expects its expenses to increase in connection with its ongoing activities, particularly as the Company ramps up operations in its in-house bioanalytic, process development and manufacturing facility in San Antonio, TX, expands its infectious disease/biological threat program, and continues to support the development of, and commencement of operations at, a new biodefense-focused large molecule and biologics biomanufacturing facility in Manhattan, Kansas. As of December 31, 2022, a lease has not been executed for this Kansas facility. In addition, any new business ventures that the Company may engage in are likely to require commitments of capital. Accordingly, the Company will in the future need to obtain substantial additional funding in connection with its planned operations. Adequate additional financing may not be available to the Company on acceptable terms, or at all. If the Company is unable to raise capital when needed or on attractive terms, it would be forced to delay, reduce or eliminate its research and development programs, any future commercialization efforts or the manufacturing services it plans to provide. To meet its capital needs, the Company intends to continue to consider multiple alternatives, including, but not limited to, additional equity financings such as sales of its common stock under at-the-market offerings, debt financings, partnerships, grants, funding collaborations and other funding transactions, if any are available. As of December 31, 2022, the Company had approximately $44.3 million in cash and cash equivalents and short-term investments. The Company will need to generate significant revenues to achieve profitability, and it may never do so. Management has determined that there is substantial doubt about the Company's ability to continue as a going concern within one year after the consolidated financial statements are issued. Risk and Uncertainties The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of results of clinical trials and reaching milestones, uncertainty of market acceptance of the Company’s products, competition from substitute products and larger companies, securing and protecting proprietary technology, strategic relationships and dependence on key individuals and sole source suppliers. The Company depends on third-party suppliers for key materials and services used in research and development, as well as manufacturing processes, and is subject to certain risks related to the loss of these third-party suppliers or their inability to supply adequate materials and services. The Company does not control the manufacturing processes of the contract development and manufacturing organizations, or CDMOs, with whom it contracts and is dependent on for the production of its therapeutic candidates in accordance with relevant regulations (such as current Good Manufacturing Practices, or cGMP), which include, among other things, quality control, quality assurance and the maintenance of records and documentation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are used for, but not limited to, useful lives of fixed assets, contingent consideration, valuation of goodwill and other intangible assets, income taxes, valuation of warrant liabilities, stock-based compensation, right-of-use assets and lease liabilities, and useful lives of intangible assets. Actual results may differ from those estimates. Reclassification Certain prior year amounts have been reclassified to conform to the current year presentation in the consolidated financial statements and accompanying notes to the consolidated financial statements including the IPR&D impairment, which was previously included in research and development expense and is now presented as a separate line item on the Company's consolidated statements of operations and comprehensive loss. Segments Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions regarding resource allocation and assessing performance. To date, the Company has viewed the operations and managed the business as one segment. Cash and Cash Equivalents The Company considers all cash and other highly liquid investments with initial maturities from the date of purchase of three months or less to be cash and cash equivalents. Short-term Investments The Company’s short-term investments consist of equity securities and are carried at fair value. Unrealized gains and losses on securities are reported in the consolidated statements of operations and comprehensive loss. The Company classifies marketable equity investments available to fund current operations as current assets on its consolidated balance sheets. Derivative Financial Instruments The Company has issued common stock warrants in connection with the execution of certain equity financings. The fair value of the warrants, which were deemed to be derivative instruments, was recorded as a derivative liability under the provisions of ASC 815 Derivatives and Hedging The fair value of the warrants, including the warrants issued in connection with the January 2020 common stock offering and recorded as liability, was determined using the Monte Carlo simulation model, which is deemed to be an appropriate model due to the terms of the warrants issued. Concentration of Credit Risk At times, cash balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurable limits. The Company has never experienced any losses related to these balances. As of December 31, 2022, and 2021, cash amounts in excess of $250,000 were not fully insured. The uninsured cash balance as of December 31, 2022 was $7.8 million. The Company does not believe it is exposed to significant credit risk on cash and cash equivalents. Property and Equipment Property and equipment are stated at cost and are capitalized. Depreciation is calculated using the straight-line method and is based on estimated useful lives of five years for lab equipment, three years for computer equipment, eight years for furniture and fixtures and vehicles, and five Leases The Company leases office space and certain equipment under non-cancelable lease agreements. The Company applies the accounting guidance in ASC 842, Leases. Fixed lease payments on operating leases are recognized over the expected term of the lease on a straight-line basis. Variable lease expenses that are not considered fixed are expensed as incurred. Fixed and variable lease expense on operating leases is recognized within operating expenses within the accompanying consolidated statements of operations and comprehensive loss. The interest rate implicit in the Company’s lease contracts is typically not readily determinable and as such, the Company uses its incremental borrowing rate based on the information available at the lease commencement date, which represents an internally developed rate that would be incurred to borrow, on a collateralized basis, over a similar term, an amount equal to the lease payments in a similar economic environment. Other Assets In conjunction with a lease agreement further discussed in Note 14, Scorpius has made reimbursement payments to the lessor, Merchants Ice II, LLC, for costs incurred in conjunction with the leased site. Merchants Ice II, LLC is a nonprofit entity investing in the building with the intention to encourage development of emerging technologies. As a result, investments made to the building could generate tax incentives under the New Market Tax Credit (“NMTC”) program. Scorpius agreed that all investments and expenditures qualifying under the NMTC (i.e., certain equipment and building improvements) would be purchased by Merchants Ice II, LLC to generate the largest possible tax incentive and Scorpius reimbursed Merchant Ice, LLC for these payments. During the construction of the site, these payments were included in other assets on the consolidated balance sheets. On September 15, 2022, the lease commenced, and in accordance with ASC 842, the Company capitalized $13.2 million of payments to lab equipment and $10.2 million is included in the operating lease right-of-use asset. Net Loss per Share Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during each year. Fully diluted net loss per share is computed using the weighted average number of common shares and dilutive securities outstanding during each year. Dilutive securities having an anti-dilutive effect on diluted loss per share are excluded from the calculation. Income Tax Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of assets and liabilities and their respective tax bases, operating loss carryforwards, and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In accordance with ASC 740, Accounting for Income Taxes Stock-Based Compensation The Company accounts for stock-based compensation arrangements with employees and non-employee directors using a fair value method that requires the recognition of compensation expense for costs related to all stock-based payments, including stock options and restricted stock units. The fair value method requires the Company to estimate the fair value of stock-based payment awards on the date of grant using an option pricing model. The fair value of restricted stock units is estimated based on the closing price of the Company’s stock on the date of grant, and for the purposes of expense recognition, the total new number of shares expected to vest is adjusted for forfeitures as they occur. The Company settles exercises of stock options with newly issued shares of its common stock. Stock-based compensation costs are based on the fair value of the underlying option calculated using the Black-Scholes-Merton option pricing model on the date of grant for stock options and are recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. Determining the appropriate fair value model and related assumptions requires judgment, including estimating stock price volatility, and expected term. The expected volatility rates are estimated based on average historical stock price volatility of its own data plus an analysis of reported data for a peer group of comparable companies that have issued stock options with substantially similar terms. The expected term for the years ended December 31, 2022 and 2021 represents the average time that options are expected to be outstanding based on the average of the vesting term and the contractual term of the option. We account for forfeitures as they occur. The Company has not paid dividends and does not anticipate paying a cash dividend in the foreseeable future and, accordingly, uses an expected dividend yield of zero. The risk-free interest rate is based on the rate of U.S. Treasury securities with maturities consistent with the estimated expected term of the awards. Net Loss Attributable to Non-controlling Interests Net loss attributable to non-controlling interests is the result of the Company’s consolidation of subsidiaries of which it does not own 100%. In October 2018, the Company entered into an agreement with the University of Miami (“UM”) whereby UM exchanged its shares of stock in the Company’s subsidiaries, Heat I, Inc. and Pelican, a related party prior to acquisition, for 35,000 shares of the Company ’ 100% of Heat I, Inc. and increasing its controlling ownership in Pelican from 80% to 85%. The Company’s net loss attributable to non-controlling interests relates to the 15% ownership of Pelican that Heat does not own as of December 31, 2022 and 2021. Deferred Revenue Deferred revenue is comprised of an exclusive license agreement with Shattuck Labs, Inc. (“Shattuck”) and process development customer deposits received in advance of our fulfillment of performance obligations. License Agreements The Company has licensed certain provisional patent applications and know-how related to fusion proteins to treat cancer and other diseases that were not being developed by the Company. Shattuck paid the Company an initial license fee of $50,000 in June 2016 and is obligated to pay the Company fees upon its receipt of sublicensing income, achievement of certain milestones, and royalties upon sales of commercial products. In-as-much as the technology that the Company out-licensed is in the early stages of development and there is a low likelihood of success for any technology at such stage, there can be no assurance that any products will be developed by Shattuck or that the Company will derive any revenue from Shattuck. Process Development Process development deferred revenue generally represents customer payments received in advance of the Company’s fulfillment of performance obligations associated with the custom development of a manufacturing process and analytical methods for a customer’s product. As of December 31, 2022 there was $1.6 million of deferred revenue related to process development. Revenue Recognition The Company applies ASC 606, Revenue from Contracts with Customers Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price using the most likely method based on historical experience as well as applicable information currently available. Product Sales The Company recognizes revenue from product sales when its performance obligation with its customers has been satisfied. The performance obligation is satisfied at a point in time when the Company’s customers obtain control of the product, which is typically upon acceptance of the product at the delivery site. The Company invoices its customers after acceptance of the product and invoice payments are generally due within 30 days of the invoice date. The Company records product sales net of any variable consideration, including refund rights. The Company uses the most likely amount method when estimating its variable consideration, unless terms are specified within contracts. The Company recognizes revenue to the extent that it is probable that a significant revenue reversal will not occur in a future period. These estimates may differ from actual consideration received. The Company evaluates these estimates to reflect known changes. Grant Revenue The Company recognizes revenue related to the Cancer Prevention and Research Institute of Texas (“CPRIT”) contract, which is being accounted for under Accounting Standards Update (“ASU”) No. 2018-08 , Not-For-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made, The CPRIT grant covers the period from June 1, 2017 through May 31, 2022, for a total grant award of up to $15.2 million. CPRIT advances grant funds upon request by the Company consistent with the agreed upon amounts and schedules as provided in the contract. The first tranche of funding of $1.8 million was received in May 2017, a second tranche of funding of $6.5 million was received in October 2017, and the third tranche of funding of $5.4 million was received in December 2019. The remaining $1.5 million will be paid, on a reimbursement basis, after the Company has fulfilled every objective of the final goals of the grant. Funds received are reflected in deferred revenue as a liability until revenue is earned. Grant revenue is recognized when qualifying costs are incurred. When grant funds are received after costs have been incurred, the Company records revenue and a corresponding grants receivable until grant funds are received. As of December 31, 2022, all $15.2 million has been recognized. On January 7, 2020, the Company was awarded a grant of up to $0.2 million from the National Institute of Allergy and Infectious Diseases, which is under the umbrella of the National Institutes of Health (“NIH”). The NIH grant provides funding for continued development of the Company’s technologies for PTX-35. The grant funds will be made available by the NIH to the Company as allowable expenses are incurred. For the year ended December 31, 2022, the Company incurred $0.04 million of allowable expenses, respectively, under the NIH grant and recognized the corresponding revenue. For the year ended December 31, 2021, the Company incurred approximately $0.03 million of allowable expenses under the NIH grant and recognized a corresponding amount of grant revenues. Process development revenue Process development revenue generally represents revenue from services associated with the custom development of a manufacturing process and analytical methods for a customer’s product. Process development revenue is recognized over time utilizing an output method by tracking the progress toward completion by measuring outputs to date relative to total estimated outputs needed to satisfy the performance obligation. Under a process development contract, the customer owns the product details and process, which has no alternative use. These process development projects are customized to each customer to meet its specifications and typically includes only one performance obligation. Each process represents a distinct service that is sold separately and has stand-alone value to the customer. The customer also retains control of its product as the product is being created or enhanced by our services and can make changes to its process or specifications upon request. Under these agreements, we are entitled to consideration for progress to date that includes an element of profit margin. As of December 31, 2022, the Company has not recognized any process development revenue. Business Combinations The accounting for our business combinations consists of allocating the purchase price to tangible and intangible assets acquired and liabilities assumed based on their estimated fair values, with the excess recorded as goodwill. We have up to one year from the acquisition date to use information as of each acquisition date to adjust the fair value of the acquired assets and liabilities, which may result in material changes to their recorded values with an offsetting adjustment to goodwill. Determining the fair value of assets acquired and liabilities assumed requires significant judgment, which includes, among other factors, analysis of historical performance and estimates of future performance. In some cases, we have used discounted cash flow analyses, which were based on our best estimate of future revenue, earnings and cash flows as well as our discount rate, adjusted for risk (see Note 5). Goodwill and Intangible Assets The Company classifies intangible assets into three categories: (1) intangible assets with definite lives subject to amortization, (2) intangible assets with indefinite lives not subject to amortization and (3) goodwill. The Company determines the useful lives of definite-lived intangible assets after considering specific facts and circumstances related to each intangible asset. Factors the Company considers when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, and other economic facts; including competition and specific market conditions. Intangible assets that are deemed to have definite lives are amortized, primarily on a straight-line basis, over their estimated useful lives. Intangible assets that are deemed to have indefinite lives, including goodwill, are reviewed for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test for indefinite-lived intangibles, other than goodwill, consists of a comparison of the fair value of the intangible asset with its carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recognized in an amount equal to that excess. Indefinite-lived intangible assets, such as goodwill, are not amortized. The Company tests the carrying amounts of goodwill for recoverability on an annual basis or when events or changes in circumstances indicate a potential impairment exists, using a fair value-based test. The Company records a goodwill impairment charge if a reporting unit’s carrying value exceeds its fair value. In-process research and development (“IPR&D”) assets are considered to be indefinite-lived until the completion or abandonment of the associated research and development projects. IPR&D assets represent the fair value assigned to technologies that the Company acquires, which at the time of acquisition have not reached technological feasibility and have no alternative future use. During the period that the assets are considered indefinite-lived, they are tested for impairment on an annual basis, or more frequently if the Company becomes aware of any events occurring or changes in circumstances that indicate that the fair value of the IPR&D assets are less than their carrying amounts. If and when development is complete, which generally occurs upon regulatory approval and the ability to commercialize products associated with the IPR&D assets, these assets are then deemed definite-lived and are amortized based on their estimated useful lives at that point in time. If development is terminated or abandoned, the Company may have a full or partial impairment charge related to the IPR&D assets, calculated as the excess of carrying value of the IPR&D assets over fair value. See Note 8 regarding impairment at December 31, 2022. Contingent Consideration Consideration paid in a business combination may include potential future payments that are contingent upon the acquired business achieving certain milestones in the future (“contingent consideration”). Contingent consideration liabilities are measured at their estimated fair value as of the date of acquisition, with subsequent changes in fair value recorded in the consolidated statements of operations and comprehensive loss. Contingent consideration is measured at fair value using a discounted cash flow model utilizing significant unobservable inputs including the probability of achieving each of the potential milestones, the estimated timing of milestone achievement, and an estimated discount rate associated with the risks of the expected cash flows attributable to the various milestones. The milestone payments will be made upon the achievement of milestones as well as royalty payments. Subsequent to the date of acquisition, the Company reassesses the actual consideration earned and the probability-weighted future earn-out payments at each balance sheet date. Any adjustment to the contingent consideration liability will be recorded in the consolidated statements of operations and comprehensive loss. Contingent consideration liabilities expected to be settled within 12 months after the balance sheet date are presented in current liabilities, with the non-current portion recorded under long term liabilities in the consolidated balance sheets. During the year ended December 31, 2022, $3.3 million of contingent consideration related to Pelican was written off as PTX-35 will not continue on to a Phase 2 trial (see Note 4). Research and Development Research and development costs associated with developmental products not yet approved by the FDA as well as costs associated with bringing developmental products into advanced phase clinical trials are expensed as incurred. These costs consist primarily of pre-manufacturing and manufacturing drug costs, clinical trial execution, investigator payments, license fees, salaries, stock-based compensation and related personnel costs. Other costs include fees paid to consultants and outside service providers related to the development of the Company’s product candidates and other expenses relating to the design, development, and testing and enhancement of its product candidates. Impact of Recently Issued Accounting Standards: The Company has evaluated issued ASUs not yet adopted and believes the adoption of these standards will not have a material impact on its consolidated financial statements. |
Short-Term Investments
Short-Term Investments | 12 Months Ended |
Dec. 31, 2022 | |
Short-Term Investments. | |
Short-Term Investments | 3. Short-term investments consist of equity securities with a maturity of greater than three months and less than twelve months when acquired. The Company reports its securities at fair value as of December 31, 2022 and 2021. Unrealized losses on securities of $1.7 million and $0.8 million, respectively, are reported in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2022 and 2021. Short-term investments at December 31, 2022 and 2021 consisted of mutual funds with fair values of $35.8 million and $88.3 million, respectively. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 4. As a basis for determining the fair value of certain of the Company’s financial instruments, the Company utilizes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level I – Observable inputs such as quoted prices in active markets for identical assets or liabilities. Level II – Observable inputs, other than Level I prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level III – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the entire fair value measurement requires management to make judgments and consider factors specific to the asset or liability. The Company’s cash equivalents are classified within Level I of the fair value hierarchy. As of December 31, 2022 and 2021, the fair values of cash and cash equivalents, accounts payable, and accrued expenses approximated their carrying values because of the short-term nature of these assets or liabilities. The Company’s short-term investments consist of Level I securities which are comprised of highly liquid money market funds. The estimated fair value of the short-term investments was based on quoted market prices. There were no transfers between fair value hierarchy levels during the years ended December 31, 2022 or 2021. The fair value of financial instruments measured on a recurring basis is as follows: As of December 31, 2022 Description Total Level 1 Level 2 Level 3 Assets: Short-term investments $ 35,837,309 $ 35,837,309 — — Liabilities: Contingent consideration $ 12,224,614 — — $ 12,224,614 Warrant liability — — — — As of December 31, 2021 Description Total Level 1 Level 2 Level 3 Assets: Short-term investments $ 88,324,922 $ 88,324,922 — — Liabilities: Contingent consideration 3,342,515 — — 3,342,515 Warrant liability 11,020 — — 11,020 The following table summarizes the change in fair value, as determined by Level 3 inputs, for all assets and liabilities using unobservable Level 3 inputs for the years ended December 31, 2022 and 2021: Pelican Elusys Contingent Contingent Consideration Consideration Balance at December 31, 2020 $ 2,912,515 $ — Change in fair value 430,000 — Balance at December 31, 2021 $ 3,342,515 $ — Acquisition of Elusys — 39,853,685 Payment of receivable consideration — (20,784,571) Payment of inventory consideration — (4,735,000) Payment of deferred cash consideration (2,000,000) Change in fair value (3,342,515) (109,500) Balance at December 31, 2022 $ — $ 12,224,614 The change in the fair value of the contingent consideration of ($3,452,015) and $430,000 for the years ended December 31, 2022 and 2021, respectively, was primarily due to the effect of the change in discount rate, probability of achieving milestones, passage of time on the fair value measurement and discontinuation of the PTX-35 trial, thus leading to the write-off of the Pelican contingent consideration. Adjustments associated with the change in fair value of contingent consideration are included in the Company’s consolidated statement of operations and comprehensive loss. The following table presents quantitative information about the inputs and valuation methodologies used for the Company’s fair value measurements of contingent consideration classified as Level 3 as of December 31, 2022 and 2021: As of December 31, 2022 Valuation Significant Weighted Average Methodology Unobservable Input (range, if applicable) Elusys Revenue earn-out Discounted cash flow analysis Timing of expected payments 2025-2036 Discount rate 24.5% Future revenue projections $ 325.9 million Elusys Contract deferred consideration Discounted cash flow analysis Timing of expected payments 2023 Discount rate 15.5% Future revenue projections $ 7.6 million As of December 31, 2021 Valuation Significant Weighted Average Methodology Unobservable Input (range, if applicable) Contingent Consideration Probability weighted income approach Milestone dates 2022-2031 Discount rate 7.51% Probability of occurrence 4.9% to 75% The following table presents quantitative information about the inputs used in the valuation for the Company’s fair value measurement of the warrant liability classified as Level 3 as of December 31, 2022 and 2021: December 31, 2022 December 31, 2021 Current stock price $ 0.81 $ 3.04 Estimated volatility of future stock price 80.94 % 133.13 % Risk free interest rate 4.75 % 0.55 % Contractual term 0.90 years 1.90 years The Company measures certain non-financial assets on a non-recurring basis, including goodwill and in-process R&D and definite lived intangibles. As a result of those measurements, during the year ended December 31, 2022, in-process R&D with a total carrying value of $3.5 million was fully impaired with an impairment charge of $3.5 million. The full impairment of the in-process R&D was a result of the Company deciding to terminate any further development of PTX-35, Pelican’s lead product candidate. During the year ended December 31, 2021, goodwill with a total carrying value of $1.5 million was written down and an impairment charge of $1.5 million was recorded. During the same period, in-process R&D with a total carrying value of $5.9 million was written down to its estimated fair value of $3.5 million and an impairment charge of $2.4 million. Impairment analysis requires significant judgments, including primarily the estimation of future development costs, the probability of success in various phases of its development programs, potential post-launch cash flows and a risk-adjusted weighted average cost of capital. Assumptions related to future operating performance are based on management’s annual and ongoing budgeting, forecasting and planning processes and represent our best estimate of the future results of our operations as of a point in time. These estimates are subject to many assumptions, such as the economic environments in which we operate, demand for the products and competitor actions. Estimated future cash flows are discounted to present value using a market participant, weighted average cost of capital, which considers the risk inherent in the probability adjusted future cash flows from each product. The financial and credit market volatility directly impacts certain inputs and assumptions used to develop the weighted average cost of capital such as the risk-free interest rate, industry beta, debt interest rate and our market capital structure. These assumptions are based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy. The use of different inputs and assumptions could increase or decrease our estimated discounted future cash flows, the resulting estimated fair values and the amounts of related goodwill impairments, if any. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2022 | |
Acquisitions | |
Acquisitions | 5 . Pelican Therapeutics In 2017, the Company consummated the acquisition of 80% of the outstanding equity of Pelican, a related party, and Pelican became a majority owned subsidiary of the Company. During the quarter ended March 31, 2018, cash consideration of approximately $300,000 was distributed to the participating Pelican stockholders and the remainder of approximately $200,000 for certain Pelican liabilities not satisfied was recognized as other income in the statements of operations and comprehensive loss for the period. In October 2018, the Company entered into an agreement with the University of Miami (“UM”) whereby UM exchanged its shares of stock in the Company’s subsidiaries, Heat I, Inc. and Pelican. The stock exchange resulted in Heat increasing its controlling ownership in Pelican from 80% to 85%. Under the agreement, the Company was also obligated to make future payments based on the achievement of certain clinical and commercialization milestones, as well as low single digit royalty payments and payments upon receipt of sublicensing income. However, due to the discontinuation of PTX-35 no future milestone payments are expected to be made. The goodwill and in-process R&D resulting from the acquisiton were fully impaired as of December 31, 2022 (see Note 8). Elusys Therapeutics On April 18, 2022 (“Closing Date”), the Company closed on the acquisition of Elusys. NightHawk paid at the closing a cash upfront payment of $3,000,000 to the former owners (“Sellers”) of Elusys. NightHawk is obligated to pay the Sellers $2,000,000 of deferred cash consideration (“Merger Consideration”) at the same time that the payment of the receivable consideration is to be distributed to the Sellers as described below, which was paid in the second quarter of 2022. Earn out payments will be paid to the sellers for a period of 12 years from the date of the closing equal to 10% of the gross dollar amount of payments received during each one year period during such twelve year period with respect to any sale, license or commercialization anywhere in the world of ANTHIM® that either: (a) occurs during the first nine years after the closing date in any respect; or (b) occurs thereafter pursuant to any contract, agreement, commitment or order that is placed, granted, awarded, or entered into during the first nine years after the Closing Date. Per the Merger Agreement, upon collection of the Elusys contract receivables of $24.5 million, NightHawk will remit payment of $22.3 million (the “Receivable Consideration”) to the Sellers. In April 2022, $20.8 million was remitted to the sellers less a hold back of $1.5 million related to future fulfillment cost. Elusys is expected to receive additional revenue from the future fulfillment of an existing U.S. Government contract, and NightHawk has agreed to fulfill the future obligations of Elusys under such contract and pass through and distribute to the Sellers the payments received under such contract minus the costs associated with such fulfillment obligations, subject to certain adjustments to the Merger Consideration specified in the Merger Agreement, including income taxes payable with respect to such payments (the “Contract Deferred Consideration”). The Merger Agreement further provides that 80% of any amounts paid to and received by Elusys (the “Additional Earn Out”) after the Closing Date and prior to June 30, 2023, shall be paid to the Sellers, subject to certain adjustments specified in the Merger Agreement. The Company acquired Elusys to expand its role in the biodefense space, complementing NightHawk’s focus to target emerging biological threats. NightHawk plans to leverage Elusys’ existing relationships and distribution channels. In addition, NightHawk expects to leverage the capabilities of its planned Scorpius biomanufacturing facility in Manhattan, Kansas, which will enable the Company to manufacture these therapies internally and therefore benefit from significant operating synergies, as well as enhanced oversight, quality control, and speed to market. The Company is also exploring opportunities to expand ANTHIM® distribution abroad. The acquisition is aligned with NightHawk’s vision to establish a fully-integrated ecosystem to deliver medical innovations faster, better, and more efficiently. The fair value of the purchase consideration was approximately $42.9 million. The purchase consideration consists of $3.0 million in cash and $2.0 million in deferred cash consideration, and the preliminary estimated fair value of the contingent and deferred consideration liabilities related to the receivable consideration, contract deferred consideration, earn out and additional earn out totaling $37.9 million. The preliminary valuation of the contract deferred consideration and earn out liabilities were valued using a discounted cash flow analysis that utilized discount rates of 24% and 14% , respectively. The preliminary value of the additional earn out liability was calculated as 80% of the estimated gross sales price of 1,500 pre-filled vials of , less estimated fulfillment costs to be incurred. The value of the receivable consideration was equal to the value of the contract receivablesacquired, less holdback expenses, as this liability was settled within 30 days of the Closing Date. The acquisition of Elusys was accounted for as a business combination and reflects the application of acquisition accounting in accordance with ASC 805, Business Combinations . The acquired Elusys’ assets, including identifiable intangible assets and liabilities assumed, have been recorded at their estimated fair values with the excess purchase price assigned to goodwill. The recognition of goodwill is largely attributed to the value paid for Elusys’ capabilities, which will broaden NightHawk’s role in the biodefense space. The goodwill recorded for this transaction is valued at $3.3 million and will be deductible for tax purposes over 15 years . The preliminary purchase price of $42.9 million has been allocated to the underlying assets and liabilities based on their estimated fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired and liabilities assumed was recorded as goodwill. As we are still in the process of reviewing the fair value of the assets acquired and liabilities assumed, the purchase price allocation for Elusys is not complete as of December 31, 2022. In accordance with ASC 805, Business Combinations , we will finalize our purchase price allocation within one year of the acquisition date. The following table highlights the components of the purchase consideration: Aggregate consideration: Cash consideration $ 3,000,000 Deferred cash consideration 2,000,000 Earn out 5,900,000 Additional earn out 4,735,000 Receivable consideration 22,318,685 Contract deferred consideration 4,900,000 Total purchase consideration $ 42,853,685 The preliminary purchase price allocation resulted in the following amounts being allocated to the assets acquired and liabilities assumed as of the closing date based on their respective estimated fair values summarized below: Purchase price allocation: Cash and cash equivalents $ 5,719,899 Contract receivables 24,526,232 Prepaid expenses and other current assets 1,818,278 Inventory 5,844,000 Intangible asset – definite-lived (Note 8) 9,700,000 Property and equipment 50,224 Operating lease right of use assets 352,906 Other assets 326,249 Total assets acquired 48,337,788 Accounts payable (204,794) Accrued expenses and other current liabilities (5,155,363) Operating lease obligations (352,906) Deferred income tax liability (3,073,000) Total liabilities assumed (8,786,063) Net assets acquired and liabilities assumed 39,551,725 Goodwill 3,301,960 Total purchase consideration $ 42,853,685 The above allocation of the purchase price is based upon certain preliminary valuations and other analyses that have not been finalized as of the date of this filing. Any changes in the estimated fair values of the purchase consideration and of the net assets recorded for this business combination upon the finalization of more detailed analyses of the facts and circumstances that existed at the date of the transaction may change the amount and allocation of the purchase price. As such, the allocations for this transaction are preliminary estimates including deferred taxes, which may be subject to change within the measurement period. During the three months ended September 30, 2022 the Company recognized a measurement period adjustment as a result of a change in forecast that related to the estimate of acquired assets resulting in a $1.5 million decrease in intangible assets, a $0.3 million decrease in the deferred tax liability and a $1.2 million decrease in goodwill. There were no other measurement period adjustments during the year. In connection with the acquisition, the Company incurred one-time expenses consisting primarily of legal fees, accounting fees and consultant fees. For the year ended December 31, 2022, the Company incurred approximately $0.6 million of acquisition costs related to the Elusys transaction, which are included in general and administrative expenses in the consolidated statements of operations. From the Elusys acquisition date through December 31, 2022, $6.0 million of total revenue and a net loss of $3.5 million associated with Elusys operations are included in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2022. Upon achievement of the next milestone payment event, contingent consideration of $5.4 million is expected to be paid to Elusys’ shareholders by June 30, 2023. The following unaudited pro forma financial information assumes the companies were combined as of January 1, 2021. The unaudited pro forma financial information as presented below is for informational purposes only and is based on estimates and assumptions that have been made solely for purposes of developing such pro forma information. This is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place on January 1, 2021, nor is it necessarily indicative of future results. Consequently, actual results could differ materially from the unaudited pro forma financial information presented below. The following table presents the pro forma operating results as if Elusys had been included in the Company’s consolidated statements of operations and comprehensive loss as of January 1, 2021 (unaudited): December 31, 2022 2021 (unaudited) (unaudited) Revenue $ 29,972,502 $ 55,511,592 Net loss (33,433,608) (10,084,749) Net loss per share, basic and diluted (1.31) (0.40) |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid Expenses And Other Current Assets. | |
Prepaid Expenses and Other Current Assets | 6. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following at: December 31, December 31, 2022 2021 Prepaid manufacturing expense $ 1,849,875 $ 563,280 Other prepaid expenses and current assets 1,432,242 460,030 Prepaid insurance 227,532 704,650 Prepaid preclinical and clinical expenses 65,892 1,158,560 $ 3,575,541 $ 2,886,520 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment | |
Property and Equipment | 7. Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over estimated useful lives ranging generally from three Property and equipment consisted of the following at: December 31, December 31, 2022 2021 Lab equipment $ 18,060,058 $ 3,178,855 Leasehold improvements 2,495,585 22,563 Construction-in-process 2,053,335 309,620 Computers 502,084 85,071 Furniture and fixtures 286,739 66,106 Vehicles 44,562 — Total 23,442,363 3,662,215 Accumulated depreciation (2,961,988) (1,503,736) Property and equipment, net $ 20,480,375 $ 2,158,479 Depreciation expense totaled $1.8 million and $0.4 million for the years ended December 31, 2022 and 2021, respectively. |
Goodwill and other intangible a
Goodwill and other intangible assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and other intangible assets | |
Goodwill and other intangible assets | 8. Goodwill and other intangible assets The Company performs an annual impairment test at the reporting unit level as of April 1st of each fiscal year or more frequently when an event occurs or circumstances change that indicate the carrying value may not be recoverable. As of April 1, 2022, the Company qualitatively assessed whether it is more likely than not that the respective fair value of the Company’s reporting units (NightHawk, Pelican, Elusys and Scorpius) were less than its carrying amount, including goodwill. Pelican Goodwill and In-Process R&D Goodwill of $2.2 million and in-process R&D of $5.9 million were recorded in connection with the acquisition of Pelican, as described in Note 4 and have been allocated to the Pelican reporting unit. During the fourth quarter of 2021, due to a sustained decline in the quoted market price of its common stock, the Company performed an interim impairment analysis using the income approach and in-process R&D with a total carrying value of $5.9 million was written down to its estimated fair value of $3.5 million and an impairment charge of $2.4 million during the fourth quarter of 2021 was recorded and goodwill in the amount of $1.5 million was fully impaired. During the third quarter of 2022, the Company elected to terminate any further development of PTX-35. As a result of the termination, the in-process R&D affiliated with PTX-35, in the amount of $3.5 million, has been fully impaired. Elusys Goodwill and Intangible Assets Goodwill of $3.3 million and an intangible asset of $9.7 million was recorded in connection with the acquisition of Elusys which has been allocated to the Elusys reporting unit. During the fourth quarter of 2022, due to a sustained decline in the quoted market price of its common stock, the Company performed an interim goodwill impairment analysis using the income approach. However, through its quantitative analysis, the Company determined the carrying value was not in excess of its estimated fair value and therefore no impairment charge was recorded at December 31, 2022. Elusys’ intangible asset relates to the ANTHIM® formulation and is amortized over its remaining patent life, approximately 80 months. The following table provides the Company’s goodwill, in-process R&D, and intangible assets as of December 31, 2022 and 2021. In-process Intangible Goodwill R&D Assets Balance at December 31, 2020 $ 1,452,338 $ 5,866,000 $ — Impairment (1,452,338) (2,366,000) — Balance at December 31, 2021 — 3,500,000 — Impairment — (3,500,000) — Acquisition of Elusys Therapeutics 5,067,748 — 11,200,000 Measurement period adjustments (1,765,789) (1,500,000) Amortization — — (1,030,625) Balance at December 31, 2022 $ 3,301,959 $ — $ 8,669,375 . |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Expenses and Other Liabilities | |
Accrued Expenses and Other Liabilities | 9. Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consist of the following at: December 31, December 31, 2022 2021 Compensation and related benefits $ 1,176,963 $ 459,178 Income tax payable 1,092,560 — Accrued preclinical and clinical trial expenses 959,992 955,013 Accrued manufacturing expenses 594,358 179,173 Other expenses 438,049 631,312 Accrued franchise tax 40,000 195,000 $ 4,301,922 $ 2,419,676 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 10 . Commitments and Contingencies License Agreements ● University of Miami ● Beginning in 2008, the Company has entered into various agreements with the University of Miami (“UM”) for intellectual and tangible property rights relating to the ImPACT ® , technology activities (“License Agreement 03-31, 05-39” and “License Agreement 97-14”, or collectively “License Agreements”). These license agreements were subsequently assigned to the Company’s subsidiary Heat Biologics I, Inc. (“Heat I”) which issued to UM shares of its common stock representing 7.5% of its common stock. The term of the License Agreements is the length of the last to expire patent, unless terminated earlier. ● The Company agreed to make minimum royalty payments of $10,000 for three years beginning in 2010 that are due on the anniversary date of the agreement for License Agreement 97-14. Beginning in 2013, and thereafter for the life of the agreement, the minimum royalty payment shall be $20,000 due on the same date. In July 2016, the Company and UM entered into an amendment which replaced the milestone payment of $250,000 by approval of a Biologics License Application (“BLA”) for the lung cancer vaccine with a payment of $500,000 upon approval of a New Drug Application (“NDA”) for a lung cancer vaccine covered by Patent Rights. ● In August 2009, Heat I and UM entered into a second amendment (“Amendment 2”) to License Agreement UMSS-114A to extend the foregoing payment due dates for all past due license fees and patent costs. ● On February 18, 2011, Heat I entered into a license agreement (“SS114A”) with UM to obtain additional technology related to License Agreement 97-14. Heat I agreed to reimburse UM for all past patent costs of $37,381 . As partial consideration for SS114A, Heat I agreed to grant back certain exclusive rights to UM. ● In addition, Heat entered into an agreement for “Modified Heat Shock Proteins-Antigenic Peptide Complex” with UM in September 2014 for a cancer cell line where UM agreed not to license the cell line to third parties while the Company is in good standing and in compliance of its patent license agreements with UM relating to our ImPACT ® platform. There is no financial obligation on the Company’s part under the arrangement. ● On October 25, 2016, the Company entered into an exclusive license agreement with UM for the license and development of intellectual property related to its gp96 platform to target the Zika virus and other infectious diseases. As consideration for the rights granted in this license agreement the Company is obligated to pay UM an upfront license fee of $20,000 and nominal annual maintenance fees over the initial ten years that total $82,000 and increasing thereafter. The Company is obligated to pay royalties equal to a percentage (mid-single digits) of net sales of products covered by the patent-related rights, subject to reduction if additional licenses from third parties are required to commercialize licensed products. ● On December 7, 2020, the Company entered into separate amendments to its existing three license agreements with the University of Miami to extend to December 31, 2025, the date by which the University of Miami may terminate the license agreements if by such date the Company will not have introduced a licensed product into the commercial marketplace in one of the three major markets (European Union, Japan and the United States) or will not have made best efforts to achieve the same. The three license agreements so amended are: (i) License Agreement (UMSS-114 (previously UM 97-14)) between the University of Miami and Heat Biologics, Inc. effective July 11, 2008, (ii) License Agreement (D-107) between the University of Miami and Heat I, Inc. effective February 18, 2011, and (iii) License Agreement (UMSS-114A) between the University of Miami and Heat I, Inc. effective February 18, 2011. ● University of Miami - Pelican ● For each agreement, the Company agreed to make minimum royalty payments of $10,000 for three years beginning in 2010 due on the anniversary date of the agreements to the University of Miami. Beginning in 2013, and thereafter for the life of the agreements, the minimum royalty payments shall be $20,000 due on the same date. License 0331, 0539: ● Pelican is obligated to make milestone payments as follows: $150,000 due upon submission and approval of an IND and the completion of a Phase 1 clinical trial and $250,000 due upon the earlier of May 2024 or approval of an NDA. The Company has the right to terminate this Agreement without obligation for future unpaid milestones. ● In August 2009, Pelican and UM entered into a second amendment (“Amendment 2”) to License Agreement 0331, 0539 to extend the foregoing payment due dates for all past due license fees and patent costs. ● In February 2010, Pelican and UM entered into a third amendment (“Amendment 3”) to License Agreement 0331, 0539 to grant back to UM a certain nonexclusive license. In all other respects, the original agreement remained the same. ● In October 2010, Pelican and UM entered into a fourth amendment (“Amendment 4”) to License Agreement 0331, 0539 to grant to the licensor a nonexclusive license right for certain technology as research reagents and research tools. License I176: ● On December 12, 2010, Pelican entered into another license agreement (“I176”) with UM for one component of complimentary technology to the July 11, 2008 agreement. Pelican agreed to pay UM a license fee of $50,000 and a reimbursement of $15,797 for past patent fees. Pelican also agreed to make a minimum royalty payment of $10,000 during 2012 through 2014 and then $20,000 every year thereafter. Pelican is obligated to make milestone payments as follows: $150,000 due upon submission and approval of an IND and the completion of a Phase 1 clinical trial and $500,000 due upon the earlier of May 2024 or approval of an NDA. The Company has the right to terminate this Agreement without obligation for future unpaid milestones. ● In August 2012, Pelican and UM entered into a second amendment (“I176 Amendment 2”) to License Agreement I176 to extend the foregoing payment due dates for all past due license fees and patent costs. ● On December 7, 2020, the Company entered into a separate amendment to License Agreement (UMI-176) between the University of Miami and Heat Biologics, Inc. effective December 12, 2010, to extend to December 31, 2025, the date by which the University of Miami may terminate the license agreements if by such date the Company will not have introduced a licensed product into the commercial marketplace in one of the three major markets (European Union, Japan and the United States) or will not have made best efforts to achieve the same. ● Other License Agreements ● On April 12, 2011, the Company entered into a non-exclusive evaluation and biological material license agreement with a not-for-profit corporation for evaluation and production of vaccines. In consideration for the licenses, the Company agreed to pay the not-for-profit corporation a fee of $5,000 and $50,000 , respectively. The Company has the option to renew the license once the original term has expired. Milestone payments are due upon certain events agreed upon by Heat and the not-for-profit corporation. In December 2015, the Company amended the evaluation and biological material license agreement to add additional cell lines in exchange for a one-time payment of $1,000 . ● On August 30, 2010, the Company entered into an option agreement with the University of Michigan (“University”) to acquire the right to negotiate an exclusive license for certain materials which include cancer cells and all unmodified derivatives of these cells. An option fee of $2,000 was paid on September 8, 2010 to grant a period of nine months for this consideration. In July 2011, the Company exercised the option to acquire the license for $10,000 . ● In June 2016, the Company entered into an exclusive license agreement with Shattuck Labs, Inc. (“Shattuck”) pursuant to which the Company licensed certain provisional patent applications and know-how related to fusion proteins to treat cancer and other diseases that were not being developed by us. Shattuck paid the Company an initial license fee of $50,000 and is obligated to pay the Company fees upon its receipt of sublicensing income, achievement of certain milestones and royalties upon sales of commercial products. Inasmuch as the technology that the Company out-licensed is in the early stages of development and there is a low likelihood of success for any technology at such stage, there can be no assurance that any products will be developed by Shattuck or that the Company will derive any revenue from Shattuck. ● On December 31, 2020, Zolovax , Inc. (“Zolovax”), a wholly-owned subsidiary of Heat Biologics, Inc. entered into an Exclusive License Agreement with the University of Miami for the license and development of a portfolio of patents leveraging its UMIP-510 platform to target the COVID-19 virus and other infectious diseases. The License Agreement grants Zolovax exclusive, worldwide rights to research, develop, make, use or sell Licensed Products (as defined in the License Agreement) based upon patent-related rights. The term of the license is the later of the length of the last to expire patent or fifteen (15) years from the date of the first sale of a Licensed Product unless terminated earlier. As consideration for the rights granted in the License Agreement, Zolovax paid an upfront fee of $2,500 , is obligated to pay certain annual payments and to pay royalties equal to a percentage (in the low-to-mid single digits) of net sales of Licensed Products. These royalty rates are subject to reduction if additional license rights from third parties are required to commercialize the Licensed Products. Future minimum royalty payments by the Company for licenses as of December 31, 2022 are as follows (in thousands): Year ended December 31, 2023 $ 74,000 2024 775,000 2025 25,000 2026 50,000 Total $ 924,000 Manufacturing Commitments We rely on Lonza, a third party manufacturer, to produce our commercial quantities of our ANTHIM® substance requirements. We have firm orders with Lonza for future purchases of drug substance, with remaining total non-cancellable future commitments of approximately $53.0 million through 2025. If we terminate certain firm orders with Lonza without cause, we will be required to pay for drug substance scheduled for manufactureunder our arrangement. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2022 | |
Revenue | |
Revenue | 11. Revenue Product Sales On April 19, 2022, Elusys entered into a contract with Public Works and Government Services of Canada to deliver 3,000 vials of ANTHIM® for treatment of inhalational anthrax due to Bacillus anthrax. The total contract award is $6.0 million with a delivery date on or before September 30, 2022. This order was fulfilled on September 13, 2022 for the total contract amount of $6.0 million. Grant Revenue In June 2016, Pelican entered into a cancer research grant contract (“Grant Contract”) with CPRIT, The grant is subject to customary CPRIT funding conditions including a matching funds requirement where Pelican will match $0.50 for every $1.00 from CPRIT. Consequently, Pelican is required to provide $7.6 million in matching funds over the life of the project. Upon commercialization of the product, the terms of the grant require Pelican to pay tiered Through December 31, 2022, $15.2 million of grant funding received to date has been recognized as revenue. As of December 31, 2022, we had a grant receivable balance of $1.5 million for CPRIT proceeds not yet received but for which the costs had been incurred or the conditions of the award had been met. At the conclusion of the grant the Company will be subject to an audit by CPRIT before the final grant payment can be approved and distributed. The Company believes this will not be finalized until the end of 2023. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity | |
Stockholders' Equity | 12. Stockholders’ Equity Authorized Capital NightHawk has authorized 10,000,000 shares of Preferred Stock (par value $0.0001) as of December 31, 2022 and 2021. As of December 31, 2022 and 2021, there were no outstanding shares of Preferred Stock. NightHawk had 250,000,000 shares of common stock (par value $0.0002) authorized as of December 31, 2022 and 2021. As of December 31, 2022 and 2021, 25,661,488 and 25,649,824 common stock shares were issued outstanding At-The-Market-Offering From January 1, 2021 to December 31, 2021 the Company sold 2,106,027 shares of common stock under the Common Stock Sales Agreement, and the Amended and Restated Common Stock Sales Agreement, at an average price of approximately $12.18 per share, raising aggregate net proceeds of approximately $25.6 million, after deducting an aggregate commission up to 3%. No shares of common stock were sold under the Common Stock Sales Agreement, or the Amended and Restated Common Stock Sales Agreement during the year ended December 31, 2022. Common Stock Warrants In connection with the November 26, 2018 public offering, the Company issued 657,142 common stock warrants each of which are exercisable for one share of common stock. The common stock warrants have an exercise price of $11.55 per share and expire five years In connection with the May 7, 2018 public offering, the Company issued 1,357,142 pre-funded warrants and 1,026,785 common stock warrants each of which are exercisable for one share of common stock. The pre-funded warrants had an exercise price of $0.07 per share and as of December 31, 2019 all pre-funded warrants have been exercised. The common stock warrants have an exercise price of $11.09 per share and expire five years In January 2021, the Company issued 31,000 common stock warrants each of which are exercisable for one share of common stock. The common stock warrants have an exercise price of $5.78 per share and expire two years During the year ended December 31, 2022, no common stock warrants have been issued exchanged exchanged The Company has a total of 747,383 warrants outstanding at a weighted average exercise price of $11.06 to purchase its common stock as of December 31, 2022. These warrants are summarized as follows: Issuance Date Number of Shares Exercise Price Expiration Date 5/7/2018 403,025 $ 11.09 5/8/2023 11/26/2018 313,358 $ 11.55 11/26/2023 1/28/2021 31,000 $ 5.78 1/28/2023 Equity Compensation Plans 2009 Stock Incentive Plan In 2009, the Company adopted the Heat Biologics, Inc. 2009 Stock Option Plan (the “2009 Plan”), under which stock options to acquire 21,739 common shares could be granted to key employees, directors, and independent contractors. Under the 2009 Plan, both incentive and non-qualified stock options could be granted under terms and conditions established by the Board of Directors. The exercise price for incentive stock options was the fair market value of the related common stock on the date the stock option was granted. Stock options granted under the 2009 Plan generally have terms of 10 years The Company amended the 2009 Stock Option Plan and all related addendum agreements in April 2011. This second amendment increased the number of shares available for issuance from 21,739 to 65,217. The Company amended the 2009 Plan to increase the number of shares available for issuance to 86,957. The 2009 Plan expired in September 2019, however all options outstanding at the time of expiration remained outstanding and exercisable by their term. As of December 31, 2022 and 2021, there were 1,135 and 2,622 stock options outstanding under the 2009 Plan, respectively. 2014 Stock Incentive Plan In June 2014, the stockholders approved the Heat Biologics, Inc. 2014 Stock Option Plan (the “2014 Plan”), under which the Company is authorized to grant 50,000 awards in the form of both incentive and non-qualified stock options, restricted stock, stock appreciation rights and other stock-based awards with terms established by the Compensation Committee of the Board of Directors which has been appointed by the Board of Directors to administer the 2014 Plan. In 2015, the stockholders approved an amendment to the Plan to increase the number of shares by 60,000 and in 2016, the stockholders approved an amendment that allowed the Company to grant up to 300,000 awards in total. As of December 31, 2022 and 2021, there were 17,385 and 21,368 stock options outstanding under the 2014 Plan, respectively. 2017 Stock Incentive Plan In June 2017, the stockholders approved the Heat Biologics, Inc. 2017 Stock Incentive Plan (the “2017 Plan”), under which the Company is authorized to grant 500,000 awards in the form of both incentive and non-qualified stock options, restricted stock, stock appreciation rights and other stock-based awards with terms established by the Compensation Committee of the Board of Directors which has been appointed by the Board of Directors to administer the 2017 Plan. As of December 31, 2022 and 2021 there were 31,018 and 38,227 stock options outstanding under the 2017 Plan, respectively. 2018 Stock Incentive Plan In October 2018, the stockholders approved the Heat Biologics, Inc. 2018 Stock Incentive Plan (the “2018 Plan”), under which the Company is authorized to grant 571,428 awards in the form of both incentive and non-qualified stock options, restricted stock, stock appreciation rights and other stock-based awards with terms established by the Compensation Committee of the Board of Directors which has been appointed by the Board of Directors to administer the 2018 Plan. At our 2019 Annual Meeting of Stockholders, the stockholders approved an amendment to the 2018 Plan to increase the number of shares by 571,428. 2021 Subsidiaries Stock Incentive Plan In July 2021, the stockholders approved the Company’s 2021 Subsidiaries Stock Incentive Plan (the “SSIP”) which allows for the grant of equity interests in subsidiaries of the Company including Skunkworx, Scorpius, Abacus, Blackhawk and other newly formed subsidiaries of the Company that adopt the SSIP by resolution of their Board of Directors. On August 2, 2021, the Board of Directors, the Compensation Committee and the Boards of Directors of Skunkworx, Scorpius, Abacus and Blackhawk granted to Jeff Wolf, Chief Executive Officer, an option under the SSIP to purchase 10,526, 10,638, 10,526 and 10,526 shares of common stock of Skunkworx, Scorpius, Abacus and Blackhawk, respectively, and to William Ostrander, Chief Financial Officer, an option under the SSIP to purchase 2,127 shares of common stock of Scorpius. In addition, at its 2022 Annual Meeting for Stockholders, the stockholders approved adding Elusys as a participating subsidiary in the SSIP and increasing the numbers of shares that each participating subsidiary may issue under the SSIP. As of December 31, 2022 and 2021 there were 31,578 and 44,343 stock options outstanding under the 2021 SSIP plan, respectively. 2021 Employee Stock Option Plan The ESPP was approved at the Company’s annual meeting of stockholders in September 2021. The ESPP currently authorizes an aggregate of 500,000 shares of common stock to be purchased. The ESPP allows employees to purchase shares of common stock of the Company at each purchase date through payroll deductions of up to a maximum of 15% of their compensation, at 85% of the lesser of the market price of the shares at the time of purchase or the market price on the beginning date of an option period. At December 31, 2022, there were 488,336 shares available for issuance under the ESPP. There are 547,763 stock options remaining available for grant under the 2014 Plan, 2017 Plan, 2018 Plan and 2021 Plans (collectively, the “Plans”). The following table summarizes the components of the Company’s stock-based compensation included in net loss: For the years ended December 31, 2022 2021 Employee stock options $ 2,782,694 $ 1,136,843 Non-employee stock options 1,114,894 1,294,279 Employee stock awards 169,571 2,903,463 Non-employee stock awards 18,578 834,396 $ 4,085,737 $ 6,168,981 Accounting for Stock-Based Compensation: Stock Compensation Expense - For the years ended December 31, 2022, and 2021, we recorded $4,085,737 , and $6,168,981 of stock-based compensation expense, respectively. No compensation expense of employees with stock awards was capitalized during the years ended December 31, 2022 and 2021. Stock Options - Under the Plans, we have issued stock options. A stock option granted gives the holder the right, but not the obligation to purchase a certain number of shares at a predetermined price for a specific period of time. We typically issue options that vest over four years in equal installments beginning on the first anniversary of the date of grant. Under the terms of the Plans, the contractual life of the option grants may not exceed ten years . During the years ended December 31, 2022, and 2021, we issued options that expire ten years from the date of grant. Fair Value Determination - The following weighted-average assumptions were used for option grants during the years ended December 31, 2022 and 2021: ● Volatility – The Company used an average historical stock price volatility of its own data plus an analysis of reported data for a peer group of comparable companies that have issued stock options with substantially similar terms. ● Expected life of options – The expected term represents the period that the Company’s stock option grants are expected to be outstanding. The Company elected to utilize the “simplified” method to estimate the expected term as the company does not have sufficient appropriate exercise data on which to base its estimate. Under this approach, the weighted-average expected life is presumed to be the average of the vesting term and the contractual term of the option. ● Risk-free interest rate – The rate is based on U.S. Treasury interest rates at the time of the grant whose term is consistent with the expected life of the stock options. ● Dividend yield – The expected dividend yield was considered to be 0% in the option pricing formula since the Company had not paid any dividends and had no plan to do so in the future. ● Forfeitures – The Company’s policy is to account for forfeitures as they occur. The following table summarizes assumptions used in our calculations of fair value for the years ended December 31, 2022 and 2021: 2022 2021 Dividend yield — % — % Expected volatility 100.85-105.09 % 99.34-104.61 % Risk-free interest rate 1.95-3.61 % 0.36-1.36 % Expected lives (years) 5.3-6.1 years 5.0-6.1 years Stock Option Activity - The following table summarizes stock option activity for the years ended December 31, 2022 and 2021: Weighted Weighted Average Aggregate Average Exercise Intrinsic Remaining Shares Price Value Contractual Life Stock options outstanding at December 31, 2020 1,480,139 $ 11.05 $ 403,743 Granted 1,674,153 4.65 Exercised (70,967) 6.53 $ — Expired (49,532) 14.26 Forfeited (79,478) 5.55 Stock options outstanding at December 31, 2021 2,954,315 7.62 $ 100,419 Granted 4,307,599 1.10 Exercised (12,765) 1.30 $ — Expired (82,253) 10.20 Forfeited (130,022) 4.44 Stock options outstanding at December 31, 2022 7,036,874 $ 3.67 $ 16,842 9.1 Years Stock options exercisable at December 31, 2022 1,680,455 $ 9.63 $ 16,841 7.5 Years Unrecognized compensation expense related to unvested stock options was $5.4 million as of December 31, 2022, which is expected to be recognized over a weighted-average period of 1.30 years and will be adjusted for forfeitures as they occur. Restricted Stock Restricted Stock Activity Weighted Average Shares Fair Value Restricted stock at December 31, 2020 239,928 $ 4.02 Granted 678,490 5.09 Vested (548,248) 4.88 Restricted stock at December 31, 2021 370,170 4.71 Vested (336,169) 4.86 Restricted stock at December 31, 2022 34,001 $ 3.22 The aggregate fair value of awards that vested during the years ended December 31, 2022 and 2021 was $1.6 million and $2.2 million. RSUs one The following table summarizes the RSU activity during the year ended December 31, 2021. There was no RSU activity during the year ended December 31, 2022. Weighted Average Shares Fair Value RSUs at December 31, 2020 1,900 $ 26.60 Vested (1,900) 26.60 RSUs at December 31, 2021 — $ — |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax | |
Income Tax | 13 . Income Tax The components of income tax benefit are as follows: 2022 2021 Current Expense: Federal $ — $ — State — — Foreign — — — — Deferred Expense: Federal $ (3,288,937) $ (145,974) State — — Foreign — — Total $ (3,288,937) $ (145,974) The differences between the company’s income tax benefit and the expense computed at the 21% United States statutory income tax rate were as follows: 2022 2021 Federal income tax expense at statutory rate: $ (9,902,000) $ (7,465,000) Increase (reduction) in income tax resulting from: State income taxes (198,000) 556,000 Foreign rate differential (19,000) (16,000) Nondeductible expenses 1,000 1,000 Research and development credit (1,312,000) (836,000) Stock based compensation 192,000 164,000 Excess executive compensation 9,000 259,000 Elusys acquisition (41,000) — Goodwill impairment — 305,000 Reserve for loss carryforwards limited by Sec. 382 8,000 8,000 Other (99,937) (32,974) Increase in valuation allowance 8,073,000 6,911,000 $ (3,288,937) $ (145,974) The tax effects of temporary differences and operating loss carryforwards that gave rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows at December 31, 2022 and 2021: 2022 2021 Deferred tax assets: Net operating losses $ 23,938,503 $ 17,830,889 R&D credits 4,132,625 2,538,168 Stock compensation 2,974,242 2,344,902 Contingent consideration — 767,763 Deferred revenue 7,465 8,039 Section 174 costs 4,690,801 — Unrealized gains/losses 584,079 210,300 Deferred tax assets 36,327,715 23,700,061 Deferred tax liabilities: Intangible assets (1,991,789) (803,937) Property, plant and equipment, primarily due to differences in depreciation (553,332) (83,122) Lease liability (2,743,364) (78,035) Other (99,272) (83,931) Deferred tax liabilities (5,387,757) (1,049,025) Valuation allowance (30,939,958) (22,866,973) Net deferred tax (liabilities) $ — $ (215,937) At December 31, 2022 and December 31, 2021, the Company evaluated all significant available positive and negative evidence, including the existence of losses in recent years and management’s forecast of future taxable income, and, as a result, determined it was more likely than not that federal and state deferred tax assets, including benefits related to net operating loss carryforwards, would not be realized. The company completed a 382 analysis to determine any limitations on the annual usage of their NOL carryforwards (discussed in further detail below). The allowance increased to $30,939,958 at December 31, 2022. Net Operating Losses created in years beginning after 2017 now only offset 80% of Taxable Income but no longer have a 20 year expiration. As such, NOL’s created after 2017 can be used to offset indefinite lived liabilities up to 80%. At December 31, 2022, the Company has federal net operating loss carryforwards of approximately $174,285,827, including $3,027,284 acquired from Pelican Therapeutics. However, due to Section 382 limitations (discussed in further detail below), only $116,493,744 of the NOLs are available to offset future taxable income. The federal net operating loss carryforwards begin to expire in 2029. The Company has various state net operating loss carryforwards totaling approximately $124,461,888 including $2,464,819 from Pelican Therapeutics, which are available to offset future state taxable income. State net operating losses begin to expire in 2024. On November 15, 2021, the North Carolina General Assembly passed Senate Bill 105 eliminating the current 2.5% corporate income tax by phased lowering of the rate from 2025 – 2030. A reserve has been set up for North Carolina NOLs that are not expected to be used by 2030. The Company has various foreign net operating loss carryforwards of $125,097. The foreign net operating loss carryforwards are carried forward indefinitely. Because the Company has incurred cumulative net operating losses since inception, all tax years remain open to examination by U.S. federal, state, and foreign income tax authorities. In accordance with FASB ASC 740, Accounting for Income Taxes, the Company reflects in the financial statements the benefit of positions taken in a previously filed tax return or expected to be taken in a future tax return only when it is considered ‘more-likely-than-not’ that the position taken will be sustained by a taxing authority. As of December 31, 2022, and 2021, the Company had no unrecognized income tax benefits and correspondingly there is no impact on the Company’s effective income tax rate associated with these items. The Company’s policy for recording interest and penalties relating to uncertain income tax positions is to record them as a component of income tax expense in the accompanying statements of income. As of December 31, 2022 and 2021, the Company had no such accruals The Company files income tax returns in the United States, various state and foreign jurisdictions. The Company was subject to examination by taxing authorities for the tax years ended December 31, 2009 through 2021. Potential 382 Limitation The Company’s ability to utilize its NOL and research and development (R&D) credit carryforwards may be substantially limited due to ownership changes that have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the Code), as well as similar state provisions. These ownership changes may limit the amount of NOL and R&D credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change,” as defined by Section 382 of the Code, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percent of the outstanding stock of a company by certain stockholders or public groups. The Company completed a Section 382 study during 2021. It was determined that the Company has experienced five ownership changes of over 50% since 2013, the latest occurring on June 30, 2020. Going forward, the utilization of loss carryforwards and tax credits generated before June 30, 2020 will be subject to an annual limitation. As a result of the ownership changes and limitations, $58,181,799 of federal NOLs and approximately $2,935,000 of federal R&D credits will expire unutilized, in addition to Section 382 limits on Pelican already in place. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Leases | 14. Leases The Company accounts for its leases under ASC 842, “Leases” The Company conducts its operations from leased facilities in Morrisville, North Carolina; San Antonio, Texas; Parsippany, New Jersey and North Brunswick, New Jersey. The North Carolina lease will expire in 2030, the Texas lease will expire in 2037, the Parsippany and New Brunswick leases will expire in July 2023. The leases are for general office space, manufacturing space, and lab space and require the Company to pay property taxes, insurance, common area expenses and maintenance costs. In June 2021, the Company entered into a lease agreement with Durham KTP Tech 7, LLC, to lease a 15,996 square foot facility in Morrisville, North Carolina to expand its research and development activities. The lease has a term of eight years following the commencement date and provides the Company the option to extend the lease term for one five year term, however option to extend was not included in the ROU asset and liability. It is subject to fixed rate escalation increases and also provides up to $2.4 million for tenant improvements. NightHawk recorded an operating lease right-of-use asset of $5.6 million and lease liability of $3.2 million for this lease in the accompanying consolidated balance sheets. In October 2021, Scorpius entered into a lease agreement with Merchants Ice II, LLC to lease a 20,144 square foot facility in San Antonio, TX for general office, laboratory, research, analytical, and/or biomanufacturing purposes. Merchants Ice II, LLC is a nonprofit entity investing in the building with the intention to encourage development of emerging technologies. As a result, investments made by both Merchants Ice II, LLC and Scorpius into the building may qualify and share tax credits under the New Market Tax Credit (“NMTC”) program. Scorpius agreed that all investments and expenditures qualifying under the NMTC (i.e., certain equipment and building improvements) would be purchased by Merchants Ice II, LLC to generate the largest possible tax incentive and Scorpius would reimburse Merchants Ice II, LLC for these payments. The lease officially commenced on September 15, 2022. As of December 31, 2022, Scorpius has reimbursed Merchants Ice II, LLC $24.3 million. Based on ASC 842, the Company has capitalized $13.2 million of the reimbursements as lab equipment, expensed $0.9 million as supplies and facilities, and $10.2 million has been included in the finance lease right-of-use asset. Scorpius the option to extend the lease term for one fifteen-year term, and one subsequent ten year term upon expiration of the first extended term. These options to extend were not included in the ROU asset and lease liability. It is subject to fixed rate escalation increases and also provides up to $2.4 million for tenant improvements. Scorpius recorded a finance lease right-of-use asset of $15.1 million and lease liability of $5.1 million for this lease in the accompanying consolidated balance sheets. Total cash paid for operating leases during the years ended December 31, 2022 and 2021 was $0.8 million and $0.4 million and is included within cash flows from operating activities within the consolidated statements of cash flows. The Company leases furniture and specialized lab equipment under finance leases. The related right-of-use assets are amortized on a straight-line basis over the lesser of the lease term or the estimated useful life of the asset. The effective interest rate was 5.80% and 5.30% for the years ended December 31, 2022 and 2021. The Company’s lease cost reflected in the accompanying statements of operations and comprehensive loss is as follows: For the Year Ended December 31, 2022 For the Year Ended December 31, 2021 Operating lease cost $ 870,939 $ 474,135 Finance lease cost Amortization of lease assets 656,794 185,171 Interest on lease liabilities 181,667 21,970 Total finance lease cost $ 838,461 $ 207,141 The weighted average remaining lease term and incremental borrowing rate as of December 31, 2022 and 2021 were as follows: For the Year Ended December 31, 2022 For the Year Ended December 31, 2021 Weighted average remaining lease term Operating leases 7.2 years 5.0 years Finance leases 13.3 years 2.0 years Weighted average incremental borrowing rate Operating leases 9.30 % 6.32 % Finance leases 9.60 % 5.30 % Maturities of operating and finance lease liabilities as of December 31, 2022 were as follows: Operating Leases Finance Leases Total 2023 791,502 769,621 1,561,123 2024 618,918 812,383 1,431,301 2025 635,180 715,782 1,350,962 2026 575,349 595,309 1,170,658 2027 592,572 615,269 1,207,841 2028 610,407 635,827 1,246,234 Thereafter 1,166,271 7,080,308 8,246,579 Total minimum lease payments 4,990,199 11,224,499 16,214,698 Less: imputed interest (1,419,934) (5,403,417) (6,823,351) Present value of lease liabilities $ 3,570,265 $ 5,821,082 $ 9,391,347 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions | |
Related Party Transactions | 15. Related Party Transactions Prior to acquisition, Jeffrey Wolf, President, Chief Executive Officer and Chairman of the Board of Directors, was a director of Elusys and directly and through affiliated entities owned approximately 1.2% of the outstanding stock of Elusys, in the form of common stock, which is subordinate in terms of distributions to the Elusys preferred stock. Common stockholders are not expected to receive any future payments as presently it seems most, if not all, of such payments will also be paid to the preferred stockholders of Elusys. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Net Loss Per Share | |
Net Loss Per Share | 16. Net Loss Per Share Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the periods. Fully diluted net loss per common share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the periods. Common equivalent shares consist of stock options, restricted stock units, and warrants that are computed using the treasury stock method. For the years ended December 31, 2022 and 2021, all of the Company’s common stock options, unvested restricted stock units and warrants are anti-dilutive and therefore have been excluded from the diluted net loss per common share calculation. The following table reconciles net loss to net loss attributable to NightHawk Biosciences, Inc.: For the Year Ended December 31, 2022 2021 Net loss $ (43,862,197) $ (35,400,807) Net loss - Non-controlling interest (427,491) (329,339) Net loss attributable to NightHawk $ (43,434,706) $ (35,071,468) Weighted-average common shares outstanding, basic and diluted 25,606,326 24,913,942 Net loss per share, basic and diluted $ (1.70) $ (1.41) The following potentially dilutive securities were excluded from the calculation of diluted net loss per share due to their anti-dilutive effect: 2022 2021 Outstanding stock options 7,036,874 2,954,315 Restricted stock subject to forfeiture and restricted stock units 34,001 370,170 Outstanding common stock warrants 747,383 747,383 |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited and restated) | 12 Months Ended |
Dec. 31, 2022 | |
Quarterly Financial Data (Unaudited and restated) | |
Quarterly Financial Data (Unaudited and restated) | 17. Quarterly Financial Data (Unaudited and restated) The Company is providing restated quarterly unaudited consolidated financial information for interim periods June 30, 2022 and September 30, 2022. The restated consolidated balance sheet line items for the second through third fiscal quarters of 2022 are as follows: June 30, 2022 As Previously Reported Adjustments As Restated Deferred tax liability $ 3,541,937 $ (3,326,000) $ 215,937 Total Liabilities 36,467,130 (3,326,000) 33,141,130 Accumulated deficit (183,996,826) 3,326,000 (180,670,826) Total Stockholders' Equity - NightHawk Biosciences, Inc. 96,638,241 3,326,000 99,964,241 Total Stockholders' Equity $ 95,387,663 $ 3,326,000 $ 98,713,663 September 30, 2022 As Previously Reported Adjustments As Restated Goodwill $ 3,467,747 $ (253,000) $ 3,214,747 Total Assets 120,164,913 (253,000) 119,911,913 Deferred tax liability 3,326,000 (3,326,000) — Total Liabilities 37,039,188 (3,326,000) 33,713,188 Accumulated deficit (197,002,176) 3,073,000 (193,929,176) Total Stockholders' Equity - NightHawk Biosciences, Inc. 84,465,725 3,073,000 87,538,725 Total Stockholders' Equity $ 83,125,726 $ 3,073,000 $ 86,198,726 The restated line items of the consolidated statements of operations and comprehensive loss for : Three Months Ended Six Months Ended Three Months Ended Six Months Ended Three Months Ended Six Months Ended June 30, 2022 June 30, 2022 June 30, 2022 As Previously reported Adjustments As Restated Income tax benefit $ — $ — $ 3,326,000 $ 3,326,000 $ 3,326,000 $ 3,326,000 Net loss (10,263,910) (18,453,708) 3,326,000 3,326,000 (6,937,910) (15,127,708) Net loss attributable to NightHawk Biosciences, Inc. (10,157,286) (18,277,873) 3,326,000 3,326,000 (6,831,286) (14,951,873) Net loss per share, basic and diluted $ (0.40) $ (0.71) $ 0.13 $ 0.13 $ (0.27) $ (0.58) Total comprehensive loss (10,114,055) (18,359,122) 3,326,000 3,326,000 (6,788,055) (15,033,122) Comprehensive loss - NightHawk Biosciences, Inc. $ (10,007,431) $ (18,183,287) $ 3,326,000 $ 3,326,000 $ (6,681,431) $ (14,857,287) Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended September 30, 2022 September 30, 2022 September 30, 2022 As Previously reported Adjustments As Restated Income tax benefit $ 215,937 $ 215,937 $ (253,000) $ 3,073,000 $ (37,063) $ 3,288,937 Net loss (13,094,771) (31,548,479) (253,000) 3,073,000 (13,347,771) (28,475,479) Net loss attributable to NightHawk Biosciences, Inc. (13,005,350) (31,283,223) (253,000) 3,073,000 (13,258,350) (28,210,223) Net loss per share, basic and diluted $ (0.51) $ (1.22) $ (0.01) $ 0.12 $ (0.52) $ (1.10) Total comprehensive loss (12,979,112) (31,338,234) (253,000) 3,073,000 (13,232,112) (28,265,234) Comprehensive loss - NightHawk Biosciences, Inc. $ (12,889,691) $ (31,072,978) $ (253,000) $ 3,073,000 $ (13,142,691) $ (27,999,978) While the adjustments changed the deferred tax liability line item in the unaudited consolidated statements of cash flows, they did not have an impact on total net cash provided by operating activities, net cash used in investing activities, or net cash (used in) provided by financing activities for any of the applicable periods. The restated line items of the unaudited consolidated statements of cash flows for the second through third fiscal quarters of 2022 are as follows: For the Six Months Ended, For the Nine Months Ended, For the Six Months Ended, For the Nine Months Ended, For the Six Months Ended, For the Nine Months Ended, June 30, 2022 September 30, 2022 June 30, 2022 September 30, 2022 June 30, 2022 September 30, 2022 As Previously Reported Adjustments As Restated Net loss $ (18,453,708) $ (31,548,479) $ 3,326,000 $ 3,073,000 $ (15,127,708) $ (28,475,479) Adjustments to reconcile net loss to net cash used in operating activities: Deferred tax liability $ — $ (215,937) $ (3,326,000) $ (3,073,000) $ (3,326,000) $ (3,288,937) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Event | |
Subsequent Events | 18. Subsequent Events On January 27, 2023, Nighthawk Biosciences, Inc. terminated its license agreements with the University of Miami as these assets will not be developed further. The following agreements have been terminated: ● License Agreement (UMIP-510) between the University of Miami and Zolovax, Inc. dated December 31, 2020. ● License Agreement (UMSS-114 (previously UM97-14)) between the University of Miami and Heat Biologics, Inc. effective July 11, 2008, as amended. ● License Agreement (UMSS114A) between the University of Miami and Heat Biologics I, Inc. effective February 18, 2011, as amended. ● License Agreement (UMD-107) between the University of Miami Heat Biologics I, Inc. effective February 18, 2011. ● License Agreement (UMIP-114/Strbo) between the University of Miami and Zolovax, Inc., effective October 24, 2016. ● License Agreement between the University of Miami and Pelican, effective November 19, 2013. ● License Agreement (I176) between the University of Miami and Heat Biologics II, Inc., effective December 12, 2010. ● License Agreement (0331, 0539) between the University of Miami and Heat Biologics II, Inc., effective July 11, 2008. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of NightHawk Biosciences, Inc., and its subsidiaries (“the Company”), Pelican Therapeutics, Inc. (“Pelican”), Heat Biologics I, Inc. (“Heat I”), Heat Biologics III, Inc. (“Heat III”), Heat Biologics IV, Inc. (“Heat IV”), Heat Biologics GmbH, Heat Biologics Australia Pty Ltd., Zolovax, Inc., Skunkworx Bio, Inc. (formerly known as Delphi Therapeutics, Inc.), Scorpius BioManufacturing, Inc. (“Scorpius”) (formerly Scorpion Biological Services, Inc), Blackhawk Bio, Inc., Abacus Biotech, Inc., and Elusys Therapeutics, Inc. (“Elusys”). The functional currency of the entities located outside the United States of America (the foreign entities) is the applicable local currency of the foreign entities. Assets and liabilities of the foreign entities are translated at period-end exchange rates. Statement of operations accounts are translated at the average exchange rate during the period. The effects of foreign currency translation adjustments are included in other comprehensive loss, which is a component of accumulated other comprehensive loss in stockholders’ equity. All significant intercompany accounts and transactions have been eliminated in consolidation. The December 31, 2022 and 2021 year-end financials include an 85% controlling interest in Pelican. NightHawk accounts for its less than 100% interest in the consolidated financial statements in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Accordingly, the Company presents non-controlling interest as a component of stockholders’ equity on its consolidated balance sheets and reports non-controlling interest net loss under the heading “net loss – non-controlling interest” in the consolidated statements of operations and comprehensive loss. |
Restatement of Prior Quarterly 2022 Financial Statements (Unaudited) | Restatement of Prior Quarterly 2022 Financial Statements (Unaudited) During the preparation and review of its annual tax provision for the year ended December 31, 2022, it was determined that the Company made certain errors in the manner in which it recognized a deferred tax asset valuation allowance related to the acquisition of Elusys Therapeutics, Inc. (“Elusys”). Under ASC 740 – Income Taxes, the release of an acquirer’s valuation allowance on the acquirer’s (i.e., the Company’s) deferred tax assets in the amount of the acquired Elusys deferred tax liability (“DTL”) should be recorded as an income tax benefit and be reported as a component of net loss in the unaudited consolidated statement of operations and comprehensive loss. The DTL was recorded in the unaudited consolidated balance sheet at June 30, 2022 and September 30, 2022, however the DTL was not and should have been recorded as an income tax benefit within the unaudited consolidated statement of operations and comprehensive loss for the quarter ending June 30, 2022. This error resulted in net loss being overstated by $3.3 million for the three and six months ended June 30, 2022 and the nine months ended September 30, 2022. In accordance with Staff Accounting Bulletin ("SAB") No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company evaluated these misstatements, and based on an analysis of quantitative and qualitative factors, determined that the impact of these misstatements was material to its interim reporting periods ended June 30, and September 30, 2022. Accordingly, the Company has restated its unaudited consolidated financial statements for the interim reporting periods for the three- and six-months ended June 30, 2022, and three- and nine- months ended September 30, 2022, respectively, and has included that restated unaudited financial information within this annual report. There is no cumulative impact to the Company’s full-year 2022 financial statements as a result of this restatement. Restatement of amounts in previously filed unaudited quarterly financial statements are reflected in Note 17- Restatement of Interim Financial Statements. Because we are restating prior periods, we are also reflecting another immaterial adjustment related to an additional error that was identified during this process. The Company recorded a measurement period adjustment in the third quarter which reduced the acquired definite lived intangible asset value by approximately $1.5 million. Given that the DTL is calculated using the acquired intangible asset value, the Company should have also adjusted the purchase price allocation by recording a decrease to goodwill of $0.3 million. This also reduces the deferred tax assets utilized to offset the acquired DTL and thus increases the valuation allowance. This is adjusted through a decrease in the income tax benefit recognized for the three and nine-months ended September 30, 2022 of $0.3 million. This is adjusted in the restated unaudited consolidated balance sheet at September 30, 2022 and the restated unaudited statement of operations and comprehensive loss for the quarter ending September 30, 2022. |
Going Concern Uncertainty | Going Concern Uncertainty The Company has an accumulated deficit of $209.2 million as of December 31, 2022 and a net loss of approximately $43.9 million for the year ended December 31, 2022 and has not generated significant revenue or positive cash flows from operations. The Company expects to incur significant expenses and continued losses from operations for the foreseeable future. The Company expects its expenses to increase in connection with its ongoing activities, particularly as the Company ramps up operations in its in-house bioanalytic, process development and manufacturing facility in San Antonio, TX, expands its infectious disease/biological threat program, and continues to support the development of, and commencement of operations at, a new biodefense-focused large molecule and biologics biomanufacturing facility in Manhattan, Kansas. As of December 31, 2022, a lease has not been executed for this Kansas facility. In addition, any new business ventures that the Company may engage in are likely to require commitments of capital. Accordingly, the Company will in the future need to obtain substantial additional funding in connection with its planned operations. Adequate additional financing may not be available to the Company on acceptable terms, or at all. If the Company is unable to raise capital when needed or on attractive terms, it would be forced to delay, reduce or eliminate its research and development programs, any future commercialization efforts or the manufacturing services it plans to provide. To meet its capital needs, the Company intends to continue to consider multiple alternatives, including, but not limited to, additional equity financings such as sales of its common stock under at-the-market offerings, debt financings, partnerships, grants, funding collaborations and other funding transactions, if any are available. As of December 31, 2022, the Company had approximately $44.3 million in cash and cash equivalents and short-term investments. The Company will need to generate significant revenues to achieve profitability, and it may never do so. Management has determined that there is substantial doubt about the Company's ability to continue as a going concern within one year after the consolidated financial statements are issued. |
Risk and Uncertainties | Risk and Uncertainties The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of results of clinical trials and reaching milestones, uncertainty of market acceptance of the Company’s products, competition from substitute products and larger companies, securing and protecting proprietary technology, strategic relationships and dependence on key individuals and sole source suppliers. The Company depends on third-party suppliers for key materials and services used in research and development, as well as manufacturing processes, and is subject to certain risks related to the loss of these third-party suppliers or their inability to supply adequate materials and services. The Company does not control the manufacturing processes of the contract development and manufacturing organizations, or CDMOs, with whom it contracts and is dependent on for the production of its therapeutic candidates in accordance with relevant regulations (such as current Good Manufacturing Practices, or cGMP), which include, among other things, quality control, quality assurance and the maintenance of records and documentation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are used for, but not limited to, useful lives of fixed assets, contingent consideration, valuation of goodwill and other intangible assets, income taxes, valuation of warrant liabilities, stock-based compensation, right-of-use assets and lease liabilities, and useful lives of intangible assets. Actual results may differ from those estimates. |
Reclassification | Reclassification Certain prior year amounts have been reclassified to conform to the current year presentation in the consolidated financial statements and accompanying notes to the consolidated financial statements including the IPR&D impairment, which was previously included in research and development expense and is now presented as a separate line item on the Company's consolidated statements of operations and comprehensive loss. |
Segments | Segments Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions regarding resource allocation and assessing performance. To date, the Company has viewed the operations and managed the business as one segment. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all cash and other highly liquid investments with initial maturities from the date of purchase of three months or less to be cash and cash equivalents. |
Short-term Investments | Short-term Investments The Company’s short-term investments consist of equity securities and are carried at fair value. Unrealized gains and losses on securities are reported in the consolidated statements of operations and comprehensive loss. The Company classifies marketable equity investments available to fund current operations as current assets on its consolidated balance sheets. |
Derivative Financial Instruments | Derivative Financial Instruments The Company has issued common stock warrants in connection with the execution of certain equity financings. The fair value of the warrants, which were deemed to be derivative instruments, was recorded as a derivative liability under the provisions of ASC 815 Derivatives and Hedging The fair value of the warrants, including the warrants issued in connection with the January 2020 common stock offering and recorded as liability, was determined using the Monte Carlo simulation model, which is deemed to be an appropriate model due to the terms of the warrants issued. |
Concentration of Credit Risk | Concentration of Credit Risk At times, cash balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurable limits. The Company has never experienced any losses related to these balances. As of December 31, 2022, and 2021, cash amounts in excess of $250,000 were not fully insured. The uninsured cash balance as of December 31, 2022 was $7.8 million. The Company does not believe it is exposed to significant credit risk on cash and cash equivalents. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost and are capitalized. Depreciation is calculated using the straight-line method and is based on estimated useful lives of five years for lab equipment, three years for computer equipment, eight years for furniture and fixtures and vehicles, and five |
Leases | Leases The Company leases office space and certain equipment under non-cancelable lease agreements. The Company applies the accounting guidance in ASC 842, Leases. Fixed lease payments on operating leases are recognized over the expected term of the lease on a straight-line basis. Variable lease expenses that are not considered fixed are expensed as incurred. Fixed and variable lease expense on operating leases is recognized within operating expenses within the accompanying consolidated statements of operations and comprehensive loss. The interest rate implicit in the Company’s lease contracts is typically not readily determinable and as such, the Company uses its incremental borrowing rate based on the information available at the lease commencement date, which represents an internally developed rate that would be incurred to borrow, on a collateralized basis, over a similar term, an amount equal to the lease payments in a similar economic environment. |
Other Assets | Other Assets In conjunction with a lease agreement further discussed in Note 14, Scorpius has made reimbursement payments to the lessor, Merchants Ice II, LLC, for costs incurred in conjunction with the leased site. Merchants Ice II, LLC is a nonprofit entity investing in the building with the intention to encourage development of emerging technologies. As a result, investments made to the building could generate tax incentives under the New Market Tax Credit (“NMTC”) program. Scorpius agreed that all investments and expenditures qualifying under the NMTC (i.e., certain equipment and building improvements) would be purchased by Merchants Ice II, LLC to generate the largest possible tax incentive and Scorpius reimbursed Merchant Ice, LLC for these payments. During the construction of the site, these payments were included in other assets on the consolidated balance sheets. On September 15, 2022, the lease commenced, and in accordance with ASC 842, the Company capitalized $13.2 million of payments to lab equipment and $10.2 million is included in the operating lease right-of-use asset. |
Net Loss per Share | Net Loss per Share Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during each year. Fully diluted net loss per share is computed using the weighted average number of common shares and dilutive securities outstanding during each year. Dilutive securities having an anti-dilutive effect on diluted loss per share are excluded from the calculation. |
Income Tax | Income Tax Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of assets and liabilities and their respective tax bases, operating loss carryforwards, and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In accordance with ASC 740, Accounting for Income Taxes |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation arrangements with employees and non-employee directors using a fair value method that requires the recognition of compensation expense for costs related to all stock-based payments, including stock options and restricted stock units. The fair value method requires the Company to estimate the fair value of stock-based payment awards on the date of grant using an option pricing model. The fair value of restricted stock units is estimated based on the closing price of the Company’s stock on the date of grant, and for the purposes of expense recognition, the total new number of shares expected to vest is adjusted for forfeitures as they occur. The Company settles exercises of stock options with newly issued shares of its common stock. Stock-based compensation costs are based on the fair value of the underlying option calculated using the Black-Scholes-Merton option pricing model on the date of grant for stock options and are recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. Determining the appropriate fair value model and related assumptions requires judgment, including estimating stock price volatility, and expected term. The expected volatility rates are estimated based on average historical stock price volatility of its own data plus an analysis of reported data for a peer group of comparable companies that have issued stock options with substantially similar terms. The expected term for the years ended December 31, 2022 and 2021 represents the average time that options are expected to be outstanding based on the average of the vesting term and the contractual term of the option. We account for forfeitures as they occur. The Company has not paid dividends and does not anticipate paying a cash dividend in the foreseeable future and, accordingly, uses an expected dividend yield of zero. The risk-free interest rate is based on the rate of U.S. Treasury securities with maturities consistent with the estimated expected term of the awards. |
Net Loss Attributable to Non-controlling Interests | Net Loss Attributable to Non-controlling Interests |
Deferred Revenue | Deferred Revenue Deferred revenue is comprised of an exclusive license agreement with Shattuck Labs, Inc. (“Shattuck”) and process development customer deposits received in advance of our fulfillment of performance obligations. License Agreements The Company has licensed certain provisional patent applications and know-how related to fusion proteins to treat cancer and other diseases that were not being developed by the Company. Shattuck paid the Company an initial license fee of $50,000 in June 2016 and is obligated to pay the Company fees upon its receipt of sublicensing income, achievement of certain milestones, and royalties upon sales of commercial products. In-as-much as the technology that the Company out-licensed is in the early stages of development and there is a low likelihood of success for any technology at such stage, there can be no assurance that any products will be developed by Shattuck or that the Company will derive any revenue from Shattuck. Process Development Process development deferred revenue generally represents customer payments received in advance of the Company’s fulfillment of performance obligations associated with the custom development of a manufacturing process and analytical methods for a customer’s product. As of December 31, 2022 there was $1.6 million of deferred revenue related to process development. |
Revenue Recognition | Revenue Recognition The Company applies ASC 606, Revenue from Contracts with Customers Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price using the most likely method based on historical experience as well as applicable information currently available. Product Sales The Company recognizes revenue from product sales when its performance obligation with its customers has been satisfied. The performance obligation is satisfied at a point in time when the Company’s customers obtain control of the product, which is typically upon acceptance of the product at the delivery site. The Company invoices its customers after acceptance of the product and invoice payments are generally due within 30 days of the invoice date. The Company records product sales net of any variable consideration, including refund rights. The Company uses the most likely amount method when estimating its variable consideration, unless terms are specified within contracts. The Company recognizes revenue to the extent that it is probable that a significant revenue reversal will not occur in a future period. These estimates may differ from actual consideration received. The Company evaluates these estimates to reflect known changes. Grant Revenue The Company recognizes revenue related to the Cancer Prevention and Research Institute of Texas (“CPRIT”) contract, which is being accounted for under Accounting Standards Update (“ASU”) No. 2018-08 , Not-For-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made, The CPRIT grant covers the period from June 1, 2017 through May 31, 2022, for a total grant award of up to $15.2 million. CPRIT advances grant funds upon request by the Company consistent with the agreed upon amounts and schedules as provided in the contract. The first tranche of funding of $1.8 million was received in May 2017, a second tranche of funding of $6.5 million was received in October 2017, and the third tranche of funding of $5.4 million was received in December 2019. The remaining $1.5 million will be paid, on a reimbursement basis, after the Company has fulfilled every objective of the final goals of the grant. Funds received are reflected in deferred revenue as a liability until revenue is earned. Grant revenue is recognized when qualifying costs are incurred. When grant funds are received after costs have been incurred, the Company records revenue and a corresponding grants receivable until grant funds are received. As of December 31, 2022, all $15.2 million has been recognized. On January 7, 2020, the Company was awarded a grant of up to $0.2 million from the National Institute of Allergy and Infectious Diseases, which is under the umbrella of the National Institutes of Health (“NIH”). The NIH grant provides funding for continued development of the Company’s technologies for PTX-35. The grant funds will be made available by the NIH to the Company as allowable expenses are incurred. For the year ended December 31, 2022, the Company incurred $0.04 million of allowable expenses, respectively, under the NIH grant and recognized the corresponding revenue. For the year ended December 31, 2021, the Company incurred approximately $0.03 million of allowable expenses under the NIH grant and recognized a corresponding amount of grant revenues. Process development revenue Process development revenue generally represents revenue from services associated with the custom development of a manufacturing process and analytical methods for a customer’s product. Process development revenue is recognized over time utilizing an output method by tracking the progress toward completion by measuring outputs to date relative to total estimated outputs needed to satisfy the performance obligation. Under a process development contract, the customer owns the product details and process, which has no alternative use. These process development projects are customized to each customer to meet its specifications and typically includes only one performance obligation. Each process represents a distinct service that is sold separately and has stand-alone value to the customer. The customer also retains control of its product as the product is being created or enhanced by our services and can make changes to its process or specifications upon request. Under these agreements, we are entitled to consideration for progress to date that includes an element of profit margin. As of December 31, 2022, the Company has not recognized any process development revenue. |
Business Combinations | Business Combinations The accounting for our business combinations consists of allocating the purchase price to tangible and intangible assets acquired and liabilities assumed based on their estimated fair values, with the excess recorded as goodwill. We have up to one year from the acquisition date to use information as of each acquisition date to adjust the fair value of the acquired assets and liabilities, which may result in material changes to their recorded values with an offsetting adjustment to goodwill. Determining the fair value of assets acquired and liabilities assumed requires significant judgment, which includes, among other factors, analysis of historical performance and estimates of future performance. In some cases, we have used discounted cash flow analyses, which were based on our best estimate of future revenue, earnings and cash flows as well as our discount rate, adjusted for risk (see Note 5). |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company classifies intangible assets into three categories: (1) intangible assets with definite lives subject to amortization, (2) intangible assets with indefinite lives not subject to amortization and (3) goodwill. The Company determines the useful lives of definite-lived intangible assets after considering specific facts and circumstances related to each intangible asset. Factors the Company considers when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, and other economic facts; including competition and specific market conditions. Intangible assets that are deemed to have definite lives are amortized, primarily on a straight-line basis, over their estimated useful lives. Intangible assets that are deemed to have indefinite lives, including goodwill, are reviewed for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test for indefinite-lived intangibles, other than goodwill, consists of a comparison of the fair value of the intangible asset with its carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recognized in an amount equal to that excess. Indefinite-lived intangible assets, such as goodwill, are not amortized. The Company tests the carrying amounts of goodwill for recoverability on an annual basis or when events or changes in circumstances indicate a potential impairment exists, using a fair value-based test. The Company records a goodwill impairment charge if a reporting unit’s carrying value exceeds its fair value. In-process research and development (“IPR&D”) assets are considered to be indefinite-lived until the completion or abandonment of the associated research and development projects. IPR&D assets represent the fair value assigned to technologies that the Company acquires, which at the time of acquisition have not reached technological feasibility and have no alternative future use. During the period that the assets are considered indefinite-lived, they are tested for impairment on an annual basis, or more frequently if the Company becomes aware of any events occurring or changes in circumstances that indicate that the fair value of the IPR&D assets are less than their carrying amounts. If and when development is complete, which generally occurs upon regulatory approval and the ability to commercialize products associated with the IPR&D assets, these assets are then deemed definite-lived and are amortized based on their estimated useful lives at that point in time. If development is terminated or abandoned, the Company may have a full or partial impairment charge related to the IPR&D assets, calculated as the excess of carrying value of the IPR&D assets over fair value. See Note 8 regarding impairment at December 31, 2022. |
Contingent Consideration | Contingent Consideration Consideration paid in a business combination may include potential future payments that are contingent upon the acquired business achieving certain milestones in the future (“contingent consideration”). Contingent consideration liabilities are measured at their estimated fair value as of the date of acquisition, with subsequent changes in fair value recorded in the consolidated statements of operations and comprehensive loss. Contingent consideration is measured at fair value using a discounted cash flow model utilizing significant unobservable inputs including the probability of achieving each of the potential milestones, the estimated timing of milestone achievement, and an estimated discount rate associated with the risks of the expected cash flows attributable to the various milestones. The milestone payments will be made upon the achievement of milestones as well as royalty payments. Subsequent to the date of acquisition, the Company reassesses the actual consideration earned and the probability-weighted future earn-out payments at each balance sheet date. Any adjustment to the contingent consideration liability will be recorded in the consolidated statements of operations and comprehensive loss. Contingent consideration liabilities expected to be settled within 12 months after the balance sheet date are presented in current liabilities, with the non-current portion recorded under long term liabilities in the consolidated balance sheets. During the year ended December 31, 2022, $3.3 million of contingent consideration related to Pelican was written off as PTX-35 will not continue on to a Phase 2 trial (see Note 4). |
Research and Development | Research and Development Research and development costs associated with developmental products not yet approved by the FDA as well as costs associated with bringing developmental products into advanced phase clinical trials are expensed as incurred. These costs consist primarily of pre-manufacturing and manufacturing drug costs, clinical trial execution, investigator payments, license fees, salaries, stock-based compensation and related personnel costs. Other costs include fees paid to consultants and outside service providers related to the development of the Company’s product candidates and other expenses relating to the design, development, and testing and enhancement of its product candidates. |
Impact of Recently Issued Accounting Standards: | Impact of Recently Issued Accounting Standards: The Company has evaluated issued ASUs not yet adopted and believes the adoption of these standards will not have a material impact on its consolidated financial statements. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value of Financial Instruments | |
Schedule of fair value of financial instruments measured on a recurring basis | As of December 31, 2022 Description Total Level 1 Level 2 Level 3 Assets: Short-term investments $ 35,837,309 $ 35,837,309 — — Liabilities: Contingent consideration $ 12,224,614 — — $ 12,224,614 Warrant liability — — — — As of December 31, 2021 Description Total Level 1 Level 2 Level 3 Assets: Short-term investments $ 88,324,922 $ 88,324,922 — — Liabilities: Contingent consideration 3,342,515 — — 3,342,515 Warrant liability 11,020 — — 11,020 |
Schedule of change in fair value, as determined by Level 3 inputs, for all assets and liabilities using unobservable Level 3 inputs | Pelican Elusys Contingent Contingent Consideration Consideration Balance at December 31, 2020 $ 2,912,515 $ — Change in fair value 430,000 — Balance at December 31, 2021 $ 3,342,515 $ — Acquisition of Elusys — 39,853,685 Payment of receivable consideration — (20,784,571) Payment of inventory consideration — (4,735,000) Payment of deferred cash consideration (2,000,000) Change in fair value (3,342,515) (109,500) Balance at December 31, 2022 $ — $ 12,224,614 |
Schedule of fair value inputs | As of December 31, 2022 Valuation Significant Weighted Average Methodology Unobservable Input (range, if applicable) Elusys Revenue earn-out Discounted cash flow analysis Timing of expected payments 2025-2036 Discount rate 24.5% Future revenue projections $ 325.9 million Elusys Contract deferred consideration Discounted cash flow analysis Timing of expected payments 2023 Discount rate 15.5% Future revenue projections $ 7.6 million As of December 31, 2021 Valuation Significant Weighted Average Methodology Unobservable Input (range, if applicable) Contingent Consideration Probability weighted income approach Milestone dates 2022-2031 Discount rate 7.51% Probability of occurrence 4.9% to 75% December 31, 2022 December 31, 2021 Current stock price $ 0.81 $ 3.04 Estimated volatility of future stock price 80.94 % 133.13 % Risk free interest rate 4.75 % 0.55 % Contractual term 0.90 years 1.90 years |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Acquisitions | |
Schedule of purchase price allocation | Aggregate consideration: Cash consideration $ 3,000,000 Deferred cash consideration 2,000,000 Earn out 5,900,000 Additional earn out 4,735,000 Receivable consideration 22,318,685 Contract deferred consideration 4,900,000 Total purchase consideration $ 42,853,685 Purchase price allocation: Cash and cash equivalents $ 5,719,899 Contract receivables 24,526,232 Prepaid expenses and other current assets 1,818,278 Inventory 5,844,000 Intangible asset – definite-lived (Note 8) 9,700,000 Property and equipment 50,224 Operating lease right of use assets 352,906 Other assets 326,249 Total assets acquired 48,337,788 Accounts payable (204,794) Accrued expenses and other current liabilities (5,155,363) Operating lease obligations (352,906) Deferred income tax liability (3,073,000) Total liabilities assumed (8,786,063) Net assets acquired and liabilities assumed 39,551,725 Goodwill 3,301,960 Total purchase consideration $ 42,853,685 |
Schedule of proforma operating results | December 31, 2022 2021 (unaudited) (unaudited) Revenue $ 29,972,502 $ 55,511,592 Net loss (33,433,608) (10,084,749) Net loss per share, basic and diluted (1.31) (0.40) |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid Expenses And Other Current Assets. | |
Schedule of prepaid expenses and other current assets | December 31, December 31, 2022 2021 Prepaid manufacturing expense $ 1,849,875 $ 563,280 Other prepaid expenses and current assets 1,432,242 460,030 Prepaid insurance 227,532 704,650 Prepaid preclinical and clinical expenses 65,892 1,158,560 $ 3,575,541 $ 2,886,520 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment | |
Schedule of property and equipment | December 31, December 31, 2022 2021 Lab equipment $ 18,060,058 $ 3,178,855 Leasehold improvements 2,495,585 22,563 Construction-in-process 2,053,335 309,620 Computers 502,084 85,071 Furniture and fixtures 286,739 66,106 Vehicles 44,562 — Total 23,442,363 3,662,215 Accumulated depreciation (2,961,988) (1,503,736) Property and equipment, net $ 20,480,375 $ 2,158,479 |
Goodwill and other intangible_2
Goodwill and other intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and other intangible assets | |
Schedule of carrying amount of goodwill and intangible assets | The following table provides the Company’s goodwill, in-process R&D, and intangible assets as of December 31, 2022 and 2021. In-process Intangible Goodwill R&D Assets Balance at December 31, 2020 $ 1,452,338 $ 5,866,000 $ — Impairment (1,452,338) (2,366,000) — Balance at December 31, 2021 — 3,500,000 — Impairment — (3,500,000) — Acquisition of Elusys Therapeutics 5,067,748 — 11,200,000 Measurement period adjustments (1,765,789) (1,500,000) Amortization — — (1,030,625) Balance at December 31, 2022 $ 3,301,959 $ — $ 8,669,375 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Expenses and Other Liabilities | |
Schedule of accrued expenses and other liabilities | December 31, December 31, 2022 2021 Compensation and related benefits $ 1,176,963 $ 459,178 Income tax payable 1,092,560 — Accrued preclinical and clinical trial expenses 959,992 955,013 Accrued manufacturing expenses 594,358 179,173 Other expenses 438,049 631,312 Accrued franchise tax 40,000 195,000 $ 4,301,922 $ 2,419,676 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies | |
Schedule of future minimum royalty payments | Future minimum royalty payments by the Company for licenses as of December 31, 2022 are as follows (in thousands): Year ended December 31, 2023 $ 74,000 2024 775,000 2025 25,000 2026 50,000 Total $ 924,000 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity | |
Schedule of common stock warrants by exercise price range | Issuance Date Number of Shares Exercise Price Expiration Date 5/7/2018 403,025 $ 11.09 5/8/2023 11/26/2018 313,358 $ 11.55 11/26/2023 1/28/2021 31,000 $ 5.78 1/28/2023 |
Schedule of components of stock-based compensation included in net loss | For the years ended December 31, 2022 2021 Employee stock options $ 2,782,694 $ 1,136,843 Non-employee stock options 1,114,894 1,294,279 Employee stock awards 169,571 2,903,463 Non-employee stock awards 18,578 834,396 $ 4,085,737 $ 6,168,981 |
Schedule of stock option valuation assumptions | 2022 2021 Dividend yield — % — % Expected volatility 100.85-105.09 % 99.34-104.61 % Risk-free interest rate 1.95-3.61 % 0.36-1.36 % Expected lives (years) 5.3-6.1 years 5.0-6.1 years |
Schedule of stock option activity | Weighted Weighted Average Aggregate Average Exercise Intrinsic Remaining Shares Price Value Contractual Life Stock options outstanding at December 31, 2020 1,480,139 $ 11.05 $ 403,743 Granted 1,674,153 4.65 Exercised (70,967) 6.53 $ — Expired (49,532) 14.26 Forfeited (79,478) 5.55 Stock options outstanding at December 31, 2021 2,954,315 7.62 $ 100,419 Granted 4,307,599 1.10 Exercised (12,765) 1.30 $ — Expired (82,253) 10.20 Forfeited (130,022) 4.44 Stock options outstanding at December 31, 2022 7,036,874 $ 3.67 $ 16,842 9.1 Years Stock options exercisable at December 31, 2022 1,680,455 $ 9.63 $ 16,841 7.5 Years |
Schedule of restricted stock activity | Weighted Average Shares Fair Value Restricted stock at December 31, 2020 239,928 $ 4.02 Granted 678,490 5.09 Vested (548,248) 4.88 Restricted stock at December 31, 2021 370,170 4.71 Vested (336,169) 4.86 Restricted stock at December 31, 2022 34,001 $ 3.22 |
Schedule of RSU activity | Weighted Average Shares Fair Value RSUs at December 31, 2020 1,900 $ 26.60 Vested (1,900) 26.60 RSUs at December 31, 2021 — $ — |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax | |
Schedule of components of income tax benefit | 2022 2021 Current Expense: Federal $ — $ — State — — Foreign — — — — Deferred Expense: Federal $ (3,288,937) $ (145,974) State — — Foreign — — Total $ (3,288,937) $ (145,974) |
Schedule of income tax expense reconciliation | 2022 2021 Federal income tax expense at statutory rate: $ (9,902,000) $ (7,465,000) Increase (reduction) in income tax resulting from: State income taxes (198,000) 556,000 Foreign rate differential (19,000) (16,000) Nondeductible expenses 1,000 1,000 Research and development credit (1,312,000) (836,000) Stock based compensation 192,000 164,000 Excess executive compensation 9,000 259,000 Elusys acquisition (41,000) — Goodwill impairment — 305,000 Reserve for loss carryforwards limited by Sec. 382 8,000 8,000 Other (99,937) (32,974) Increase in valuation allowance 8,073,000 6,911,000 $ (3,288,937) $ (145,974) |
Schedule of deferred tax assets and liabilities | 2022 2021 Deferred tax assets: Net operating losses $ 23,938,503 $ 17,830,889 R&D credits 4,132,625 2,538,168 Stock compensation 2,974,242 2,344,902 Contingent consideration — 767,763 Deferred revenue 7,465 8,039 Section 174 costs 4,690,801 — Unrealized gains/losses 584,079 210,300 Deferred tax assets 36,327,715 23,700,061 Deferred tax liabilities: Intangible assets (1,991,789) (803,937) Property, plant and equipment, primarily due to differences in depreciation (553,332) (83,122) Lease liability (2,743,364) (78,035) Other (99,272) (83,931) Deferred tax liabilities (5,387,757) (1,049,025) Valuation allowance (30,939,958) (22,866,973) Net deferred tax (liabilities) $ — $ (215,937) |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Schedule of lease cost | For the Year Ended December 31, 2022 For the Year Ended December 31, 2021 Operating lease cost $ 870,939 $ 474,135 Finance lease cost Amortization of lease assets 656,794 185,171 Interest on lease liabilities 181,667 21,970 Total finance lease cost $ 838,461 $ 207,141 |
Schedule of weighted average remaining lease term and incremental borrowing rate | For the Year Ended December 31, 2022 For the Year Ended December 31, 2021 Weighted average remaining lease term Operating leases 7.2 years 5.0 years Finance leases 13.3 years 2.0 years Weighted average incremental borrowing rate Operating leases 9.30 % 6.32 % Finance leases 9.60 % 5.30 % |
Schedule of maturities of operating and finance lease liabilities | Maturities of operating and finance lease liabilities as of December 31, 2022 were as follows: Operating Leases Finance Leases Total 2023 791,502 769,621 1,561,123 2024 618,918 812,383 1,431,301 2025 635,180 715,782 1,350,962 2026 575,349 595,309 1,170,658 2027 592,572 615,269 1,207,841 2028 610,407 635,827 1,246,234 Thereafter 1,166,271 7,080,308 8,246,579 Total minimum lease payments 4,990,199 11,224,499 16,214,698 Less: imputed interest (1,419,934) (5,403,417) (6,823,351) Present value of lease liabilities $ 3,570,265 $ 5,821,082 $ 9,391,347 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Net Loss Per Share | |
Schedule of reconciliation of net loss | For the Year Ended December 31, 2022 2021 Net loss $ (43,862,197) $ (35,400,807) Net loss - Non-controlling interest (427,491) (329,339) Net loss attributable to NightHawk $ (43,434,706) $ (35,071,468) Weighted-average common shares outstanding, basic and diluted 25,606,326 24,913,942 Net loss per share, basic and diluted $ (1.70) $ (1.41) |
Schedule of potentially dilutive securities | 2022 2021 Outstanding stock options 7,036,874 2,954,315 Restricted stock subject to forfeiture and restricted stock units 34,001 370,170 Outstanding common stock warrants 747,383 747,383 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited and restated) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Quarterly Financial Data (Unaudited and restated) | |
Schedule of Quarterly Financial Data (Unaudited and restated) | The restated consolidated balance sheet line items for the second through third fiscal quarters of 2022 are as follows: June 30, 2022 As Previously Reported Adjustments As Restated Deferred tax liability $ 3,541,937 $ (3,326,000) $ 215,937 Total Liabilities 36,467,130 (3,326,000) 33,141,130 Accumulated deficit (183,996,826) 3,326,000 (180,670,826) Total Stockholders' Equity - NightHawk Biosciences, Inc. 96,638,241 3,326,000 99,964,241 Total Stockholders' Equity $ 95,387,663 $ 3,326,000 $ 98,713,663 September 30, 2022 As Previously Reported Adjustments As Restated Goodwill $ 3,467,747 $ (253,000) $ 3,214,747 Total Assets 120,164,913 (253,000) 119,911,913 Deferred tax liability 3,326,000 (3,326,000) — Total Liabilities 37,039,188 (3,326,000) 33,713,188 Accumulated deficit (197,002,176) 3,073,000 (193,929,176) Total Stockholders' Equity - NightHawk Biosciences, Inc. 84,465,725 3,073,000 87,538,725 Total Stockholders' Equity $ 83,125,726 $ 3,073,000 $ 86,198,726 The restated line items of the consolidated statements of operations and comprehensive loss for : Three Months Ended Six Months Ended Three Months Ended Six Months Ended Three Months Ended Six Months Ended June 30, 2022 June 30, 2022 June 30, 2022 As Previously reported Adjustments As Restated Income tax benefit $ — $ — $ 3,326,000 $ 3,326,000 $ 3,326,000 $ 3,326,000 Net loss (10,263,910) (18,453,708) 3,326,000 3,326,000 (6,937,910) (15,127,708) Net loss attributable to NightHawk Biosciences, Inc. (10,157,286) (18,277,873) 3,326,000 3,326,000 (6,831,286) (14,951,873) Net loss per share, basic and diluted $ (0.40) $ (0.71) $ 0.13 $ 0.13 $ (0.27) $ (0.58) Total comprehensive loss (10,114,055) (18,359,122) 3,326,000 3,326,000 (6,788,055) (15,033,122) Comprehensive loss - NightHawk Biosciences, Inc. $ (10,007,431) $ (18,183,287) $ 3,326,000 $ 3,326,000 $ (6,681,431) $ (14,857,287) Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended September 30, 2022 September 30, 2022 September 30, 2022 As Previously reported Adjustments As Restated Income tax benefit $ 215,937 $ 215,937 $ (253,000) $ 3,073,000 $ (37,063) $ 3,288,937 Net loss (13,094,771) (31,548,479) (253,000) 3,073,000 (13,347,771) (28,475,479) Net loss attributable to NightHawk Biosciences, Inc. (13,005,350) (31,283,223) (253,000) 3,073,000 (13,258,350) (28,210,223) Net loss per share, basic and diluted $ (0.51) $ (1.22) $ (0.01) $ 0.12 $ (0.52) $ (1.10) Total comprehensive loss (12,979,112) (31,338,234) (253,000) 3,073,000 (13,232,112) (28,265,234) Comprehensive loss - NightHawk Biosciences, Inc. $ (12,889,691) $ (31,072,978) $ (253,000) $ 3,073,000 $ (13,142,691) $ (27,999,978) The restated line items of the unaudited consolidated statements of cash flows for the second through third fiscal quarters of 2022 are as follows: For the Six Months Ended, For the Nine Months Ended, For the Six Months Ended, For the Nine Months Ended, For the Six Months Ended, For the Nine Months Ended, June 30, 2022 September 30, 2022 June 30, 2022 September 30, 2022 June 30, 2022 September 30, 2022 As Previously Reported Adjustments As Restated Net loss $ (18,453,708) $ (31,548,479) $ 3,326,000 $ 3,073,000 $ (15,127,708) $ (28,475,479) Adjustments to reconcile net loss to net cash used in operating activities: Deferred tax liability $ — $ (215,937) $ (3,326,000) $ (3,073,000) $ (3,326,000) $ (3,288,937) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Narrative (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | 67 Months Ended | 79 Months Ended | |||||||||||
Jan. 07, 2020 USD ($) | Dec. 31, 2019 USD ($) | Oct. 31, 2018 shares | Oct. 31, 2017 USD ($) | May 31, 2017 USD ($) | Jun. 30, 2016 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) segment shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2017 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Sep. 15, 2022 USD ($) | Dec. 31, 2020 USD ($) | Sep. 30, 2018 | |
Overstatement of net loss | $ 3,300,000 | $ 3,300,000 | $ 3,300,000 | |||||||||||||||
Goodwill | $ (3,214,747) | (3,214,747) | $ (3,301,959) | $ (3,301,959) | $ (3,301,959) | $ (1,452,338) | ||||||||||||
Income tax benefit | 37,063 | (3,326,000) | (3,326,000) | (3,288,937) | (3,288,937) | $ (145,974) | ||||||||||||
Accumulated deficit | (193,929,176) | (180,670,826) | (180,670,826) | (193,929,176) | 209,153,659 | 165,718,953 | 209,153,659 | 209,153,659 | ||||||||||
Net loss | 13,347,771 | $ 6,937,910 | $ 15,127,708 | 28,475,479 | 43,862,197 | 35,400,807 | ||||||||||||
Cash, cash equivalents and short term investments | $ 44,300,000 | 44,300,000 | 44,300,000 | |||||||||||||||
Derivative warrant liability | 11,020 | |||||||||||||||||
Number Of Operating Segments | segment | 1 | |||||||||||||||||
Cash balance insured | $ 250,000 | 250,000 | 250,000 | 250,000 | ||||||||||||||
Cash balance uninsured | 7,800,000 | 7,800,000 | 7,800,000 | |||||||||||||||
Other assets | 260,011 | 12,193,540 | 260,011 | 260,011 | ||||||||||||||
Unrecognized tax benefit | 0 | 0 | 0 | 0 | ||||||||||||||
Revenue | 6,383,169 | 2,112,806 | ||||||||||||||||
Allowable expenses incurred under NIH grant | 40,000 | $ 30,000 | ||||||||||||||||
Customer deposits | $ 1,600,000 | $ 1,600,000 | $ 1,600,000 | |||||||||||||||
Pelican Therapeutics, Inc. | ||||||||||||||||||
Percentage of non-controlling interest acquired | 15% | 15% | 15% | 15% | ||||||||||||||
Minimum | ||||||||||||||||||
Estimated useful lives | 3 years | |||||||||||||||||
Maximum | ||||||||||||||||||
Estimated useful lives | 8 years | |||||||||||||||||
In-process R&D. | ||||||||||||||||||
Goodwill | $ (1,500,000) | |||||||||||||||||
Grant and contract revenue | ||||||||||||||||||
Revenue | $ 402,176 | $ 2,112,806 | ||||||||||||||||
Grant and contract revenue | Maximum | ||||||||||||||||||
Amount awarded from NIH grant | $ 200,000 | |||||||||||||||||
Lab equipment | ||||||||||||||||||
Reimbursement of expenses, capitalized | $ 13,200,000 | |||||||||||||||||
Reimbursement Included in operating lease right of use asset | $ 10,200,000 | |||||||||||||||||
Estimated useful lives | 5 years | |||||||||||||||||
Computers | ||||||||||||||||||
Estimated useful lives | 3 years | |||||||||||||||||
Furniture and fixtures | ||||||||||||||||||
Estimated useful lives | 8 years | |||||||||||||||||
Leasehold Improvements | Minimum | ||||||||||||||||||
Estimated useful lives | 5 years | |||||||||||||||||
Leasehold Improvements | Maximum | ||||||||||||||||||
Estimated useful lives | 8 years | |||||||||||||||||
Common stock warrants | ||||||||||||||||||
Warrants exchanged | shares | 0 | 0 | ||||||||||||||||
Revision of Prior Period | ||||||||||||||||||
Acquired finite-lived intangible assets | 1,500,000 | |||||||||||||||||
Goodwill | 300,000 | 300,000 | ||||||||||||||||
Income tax benefit | $ 300,000 | $ 300,000 | ||||||||||||||||
Heat I | ||||||||||||||||||
Ownership interest in subsidiary | 100% | |||||||||||||||||
Pelican Therapeutics, Inc. | ||||||||||||||||||
Ownership interest in subsidiary | 85% | 85% | 85% | 85% | 85% | 80% | ||||||||||||
Heat I, Inc. and Pelican | ||||||||||||||||||
Shares issued in acquisition | shares | 35,000 | |||||||||||||||||
Pelican Therapeutics, Inc. | ||||||||||||||||||
Contingent consideration liability, written off | $ 3,300,000 | |||||||||||||||||
Pelican Therapeutics, Inc. | In-process R&D. | ||||||||||||||||||
Acquired finite-lived intangible assets | $ (5,900,000) | |||||||||||||||||
Pelican Therapeutics, Inc. | Grant and contract revenue | ||||||||||||||||||
Revenue | 15,200,000 | $ 15,200,000 | $ 15,200,000 | |||||||||||||||
Remaining grant amount receivable | $ 1,500,000 | $ 1,500,000 | $ 1,500,000 | |||||||||||||||
Pelican Therapeutics, Inc. | Grant and contract revenue | Tranche 1 | ||||||||||||||||||
Revenue | $ 1,800,000 | |||||||||||||||||
Pelican Therapeutics, Inc. | Grant and contract revenue | Tranche 2 | ||||||||||||||||||
Revenue | $ 6,500,000 | |||||||||||||||||
Pelican Therapeutics, Inc. | Grant and contract revenue | Tranche 3 | ||||||||||||||||||
Revenue | $ 5,400,000 | |||||||||||||||||
Pelican Therapeutics, Inc. | Grant and contract revenue | Maximum | ||||||||||||||||||
Amount awarded from CPRIT grant | $ 15,200,000 |
Short-Term Investments (Details
Short-Term Investments (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Unrealized losses | $ 1.7 | $ 0.8 |
Mutual funds | ||
Estimated fair value | $ 35.8 | $ 88.3 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Schedule of Fair Value Financial Instruments (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Liabilities: | ||
Derivative warrant liability | $ 11,020 | |
Recurring | ||
Assets: | ||
Short-term investments | $ 35,837,309 | 88,324,922 |
Liabilities: | ||
Contingent consideration | 12,224,614 | 3,342,515 |
Derivative warrant liability | 11,020 | |
Recurring | Level 1 | ||
Assets: | ||
Short-term investments | 35,837,309 | 88,324,922 |
Recurring | Level 3 | ||
Liabilities: | ||
Contingent consideration | $ 12,224,614 | 3,342,515 |
Derivative warrant liability | $ 11,020 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Change in Fair Value (Details) - Contingent Consideration - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Pelican Therapeutics, Inc. | ||
Change in fair value | ||
Balance at the beginning | $ 3,342,515 | $ 2,912,515 |
Change in fair value | (3,342,515) | 430,000 |
Balance at end | $ 3,342,515 | |
Elusys Therapeutics | ||
Change in fair value | ||
Acquisition of Elusys | 39,853,685 | |
Payment of receivable consideration | (20,784,571) | |
Payment of inventory consideration | (4,735,000) | |
Payment of deferred cash consideration | (2,000,000) | |
Change in fair value | (109,500) | |
Balance at end | $ 12,224,614 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Schedule of Inputs and Valuation Methodologies Used (Details) - Level 3 $ in Millions | Dec. 31, 2022 USD ($) | Dec. 31, 2021 |
Contingent Consideration | Pelican Therapeutics, Inc. | Discount rate | Probability weighted income approach | ||
Fair Value of Financial Instruments | ||
Contingent Consideration | 7.51 | |
Revenue earn-out | Elusys Therapeutics | Discount rate | Discounted cash flow analysis | ||
Fair Value of Financial Instruments | ||
Contingent Consideration | 24.5 | |
Revenue earn-out | Elusys Therapeutics | Future revenue projections | Discounted cash flow analysis | ||
Fair Value of Financial Instruments | ||
Contingent Consideration | 325.9 | |
Contract deferred consideration | Elusys Therapeutics | Discount rate | Discounted cash flow analysis | ||
Fair Value of Financial Instruments | ||
Contingent Consideration | 15.5 | |
Contract deferred consideration | Elusys Therapeutics | Future revenue projections | Discounted cash flow analysis | ||
Fair Value of Financial Instruments | ||
Contingent Consideration | 7.6 | |
Minimum | Contingent Consideration | Pelican Therapeutics, Inc. | Probability of occurrence | Probability weighted income approach | ||
Fair Value of Financial Instruments | ||
Contingent Consideration | 4.9 | |
Maximum | Contingent Consideration | Pelican Therapeutics, Inc. | Probability of occurrence | Probability weighted income approach | ||
Fair Value of Financial Instruments | ||
Contingent Consideration | 75 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Schedule of Warrant Weighted Average Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) $ / shares | |
Fair Value of Financial Instruments | ||
Assets transfer from level 1 to level 2 | $ 0 | $ 0 |
Level 3 Asset transferred, net | 0 | 0 |
Level 3 liabilities transferred, net | $ 0 | $ 0 |
Current stock price | ||
Fair Value of Financial Instruments | ||
Fair value measurement input | $ / shares | 0.81 | 3.04 |
Estimated volatility of future stock price | ||
Fair Value of Financial Instruments | ||
Fair value measurement input | 0.8094 | 1.3313 |
Risk free interest rate | ||
Fair Value of Financial Instruments | ||
Fair value measurement input | 0.0475 | 0.0055 |
Contractual term | ||
Fair Value of Financial Instruments | ||
Fair value measurement input | 0.90 | 1.90 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | Dec. 31, 2020 | |
Change in fair value of contingent consideration | $ (3,452,015) | $ 430,000 | |||
Intangible assets, net | $ 3,500,000 | 8,669,375 | 3,500,000 | ||
In-process research and development impairment | 3,500,000 | 2,366,000 | |||
Goodwill | 3,301,959 | $ 3,214,747 | $ 1,452,338 | ||
Goodwill impairment loss | 1,452,338 | ||||
In-process R&D. | |||||
Intangible assets, net | 3,500,000 | 3,500,000 | 3,500,000 | $ 5,866,000 | |
In-process research and development impairment | 2,400,000 | $ 3,500,000 | 2,366,000 | ||
Goodwill | 1,500,000 | 1,500,000 | |||
Goodwill impairment loss | 1,500,000 | ||||
Intangible assets fair value | $ 3,500,000 | $ 3,500,000 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||||||||
Apr. 18, 2022 | Apr. 30, 2022 | Mar. 31, 2018 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Oct. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Acquisitions | ||||||||||
Goodwill | $ 3,301,959 | $ 3,214,747 | $ 1,452,338 | |||||||
Pelican Therapeutics, Inc. | ||||||||||
Acquisitions | ||||||||||
Ownership interest in subsidiary | 85% | 85% | 85% | 80% | ||||||
Pelican Therapeutics, Inc. | ||||||||||
Acquisitions | ||||||||||
Percentage of voting interests acquired in acquisition | 80% | |||||||||
Cash consideration | $ 200,000 | |||||||||
Milestone payment | $ 0 | |||||||||
Pelican Therapeutics, Inc. | Stockholders | ||||||||||
Acquisitions | ||||||||||
Cash consideration | $ 300,000 | |||||||||
Elusys Therapeutics | ||||||||||
Acquisitions | ||||||||||
Earn out payments period | 12 years | |||||||||
Percentage of earn out payments | 10% | |||||||||
Frequency of periodic earn out payment | 1 year | |||||||||
Period of occurrence of earn payment | 9 years | |||||||||
Receivable consideration | $ 22,318,685 | |||||||||
Consideration paid | $ 20,800,000 | |||||||||
Holding back related to future fulfillment cost | $ 1,500,000 | |||||||||
Contract receivables | 24,526,232 | |||||||||
Fair value of the purchase consideration | 42,900,000 | |||||||||
Cash consideration | 3,000,000 | |||||||||
Deferred cash consideration | 2,000,000 | |||||||||
Fair value of contingent and deferred consideration liabilities | $ 37,900,000 | |||||||||
Discount rate for deferred consideration | 24% | |||||||||
Discount rate for earn out liabilities | 14% | |||||||||
Preliminary value of Additional Earn Out liability as percentage | 80% | |||||||||
Goodwill | $ 3,301,960 | |||||||||
Goodwill deductible for tax purposes | 15 years |
Acquisitions - Components of Pu
Acquisitions - Components of Purchase Consideration (Details) - USD ($) | 12 Months Ended | |
Apr. 18, 2022 | Dec. 31, 2022 | |
Acquisitions | ||
Total purchase consideration | $ 42,853,685 | |
Elusys Therapeutics | ||
Acquisitions | ||
Cash consideration | $ 3,000,000 | |
Deferred cash consideration | 2,000,000 | |
Earn out | 5,900,000 | |
Additional earn out | 4,735,000 | |
Receivable consideration | 22,318,685 | |
Contract deferred consideration | 4,900,000 | |
Total purchase consideration | $ 42,853,685 |
Acquisitions - Purchase Price A
Acquisitions - Purchase Price Allocation (Details) - USD ($) | 3 Months Ended | 8 Months Ended | 12 Months Ended | ||||
Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2023 | Apr. 18, 2022 | Dec. 31, 2020 | |
Purchase price allocation: | |||||||
Goodwill | $ 3,214,747 | $ 3,301,959 | $ 3,301,959 | $ 1,452,338 | |||
Measurement period adjustments - goodwill | 1,765,789 | ||||||
Measurement period adjustment - deferred tax liability | 3,288,937 | $ 145,974 | |||||
Elusys Therapeutics | |||||||
Purchase price allocation: | |||||||
Cash and cash equivalents | $ 5,719,899 | ||||||
Contract receivables | 24,526,232 | ||||||
Prepaid expenses and other current assets | 1,818,278 | ||||||
Inventory | 5,844,000 | ||||||
Intangible asset - definite-lived (Note 8) | 9,700,000 | ||||||
Property and equipment | 50,224 | ||||||
Operating lease right of use assets | 352,906 | ||||||
Other assets | 326,249 | ||||||
Total assets acquired | 48,337,788 | ||||||
Accounts payable | (204,794) | ||||||
Accrued expenses and other current liabilities | (5,155,363) | ||||||
Operating lease obligations | (352,906) | ||||||
Deferred income tax liability | (3,073,000) | ||||||
Total liabilities assumed | (8,786,063) | ||||||
Net assets acquired and liabilities assumed | 39,551,725 | ||||||
Goodwill | 3,301,960 | ||||||
Total purchase consideration | $ 42,853,685 | ||||||
Total revenue of acquiree from acquisition date | 6,000,000 | ||||||
Net loss of acquiree from acquisition date | $ 3,500,000 | ||||||
Measurement period adjustments - goodwill | 1,200,000 | ||||||
Measurement period adjustment - deferred tax liability | 300,000 | ||||||
Measurement period adjustments - intangible assets | $ 1,500,000 | ||||||
Acquisition costs | $ 600,000 | ||||||
Elusys Therapeutics | Forecast | |||||||
Purchase price allocation: | |||||||
Contingent consideration | $ 5,400,000 |
Acquisitions - Supplemental Pro
Acquisitions - Supplemental Pro Forma Financial Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Acquisitions | ||
Revenue | $ 29,972,502 | $ 55,511,592 |
Net loss | $ (33,433,608) | $ (10,084,749) |
Net loss per share, basic | $ (1.31) | $ (0.40) |
Net loss per share, diluted | $ (1.31) | $ (0.40) |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Prepaid Expenses And Other Current Assets | ||
Prepaid manufacturing expense | $ 1,849,875 | $ 563,280 |
Other prepaid expenses and current assets | 1,432,242 | 460,030 |
Prepaid insurance | 227,532 | 704,650 |
Prepaid preclinical and clinical expenses | 65,892 | 1,158,560 |
Prepaid expenses and other current assets | $ 3,575,541 | $ 2,886,520 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property and Equipment | ||
Total | $ 23,442,363 | $ 3,662,215 |
Accumulated depreciation | (2,961,988) | (1,503,736) |
Property and equipment, net | 20,480,375 | 2,158,479 |
Depreciation expense | $ 1,800,000 | 400,000 |
Minimum | ||
Property and Equipment | ||
Estimated useful lives | 3 years | |
Maximum | ||
Property and Equipment | ||
Estimated useful lives | 8 years | |
Lab equipment | ||
Property and Equipment | ||
Estimated useful lives | 5 years | |
Total | $ 18,060,058 | 3,178,855 |
Leasehold improvements | ||
Property and Equipment | ||
Total | $ 2,495,585 | 22,563 |
Leasehold improvements | Minimum | ||
Property and Equipment | ||
Estimated useful lives | 5 years | |
Leasehold improvements | Maximum | ||
Property and Equipment | ||
Estimated useful lives | 8 years | |
Construction-in-process | ||
Property and Equipment | ||
Total | $ 2,053,335 | 309,620 |
Computers | ||
Property and Equipment | ||
Estimated useful lives | 3 years | |
Total | $ 502,084 | 85,071 |
Furniture and fixtures | ||
Property and Equipment | ||
Estimated useful lives | 8 years | |
Total | $ 286,739 | $ 66,106 |
Vehicles | ||
Property and Equipment | ||
Total | $ 44,562 |
Goodwill and other intangible_3
Goodwill and other intangible assets (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||
Apr. 18, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2017 | Dec. 31, 2020 | |
Goodwill and other intangible assets | |||||||
Goodwill acquired | $ 5,067,748 | ||||||
Balance of finite-lived intangible assets | $ 3,500,000 | 8,669,375 | $ 3,500,000 | ||||
In-process research and development impairment | 3,500,000 | 2,366,000 | |||||
Goodwill impairment loss | 1,452,338 | ||||||
In-process R&D. | |||||||
Goodwill and other intangible assets | |||||||
Balance of finite-lived intangible assets | 3,500,000 | 3,500,000 | 3,500,000 | $ 5,866,000 | |||
Carrying value written Down | 5,900,000 | 5,900,000 | |||||
Intangible assets fair value | 3,500,000 | 3,500,000 | |||||
In-process research and development impairment | 2,400,000 | 3,500,000 | 2,366,000 | ||||
Goodwill impairment loss | $ 1,500,000 | ||||||
Pelican Therapeutics, Inc. | |||||||
Goodwill and other intangible assets | |||||||
Goodwill acquired | $ 2,200,000 | ||||||
In-process research and development impairment | $ 3,500,000 | ||||||
Goodwill impairment loss | $ 1,500,000 | ||||||
Pelican Therapeutics, Inc. | In-process R&D. | |||||||
Goodwill and other intangible assets | |||||||
Finite-lived intangible assets acquired | $ 5,900,000 | ||||||
Elusys Therapeutics | |||||||
Goodwill and other intangible assets | |||||||
Goodwill acquired | $ 3,300,000 | ||||||
Finite-lived intangible assets acquired | $ 9,700,000 | ||||||
In-process research and development impairment | $ 0 | ||||||
Remaining amortization period | 80 months |
Goodwill and other intangible_4
Goodwill and other intangible assets - Carrying amount of goodwill and intangible assets (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill | ||||
Goodwill beginning balance | $ 1,452,338 | |||
Impairment | (1,452,338) | |||
Acquisition of Elusys Therapeutics | $ 5,067,748 | |||
Measurement period adjustments | (1,765,789) | |||
Goodwill ending balance | $ 3,214,747 | 3,301,959 | ||
Intangible Assets | ||||
Intangible assets beginning balance | 3,500,000 | |||
Impairment | (3,500,000) | (2,366,000) | ||
Amortization | (1,030,625) | |||
Intangible assets, ending balance | $ 3,500,000 | 8,669,375 | 3,500,000 | |
In-process R&D. | ||||
Goodwill | ||||
Goodwill beginning balance | 1,500,000 | |||
Impairment | (1,500,000) | |||
Goodwill ending balance | 1,500,000 | 1,500,000 | ||
Intangible Assets | ||||
Intangible assets beginning balance | 3,500,000 | 5,866,000 | ||
Impairment | (2,400,000) | (3,500,000) | (2,366,000) | |
Intangible assets, ending balance | 3,500,000 | 3,500,000 | 3,500,000 | |
Intangible Assets | ||||
Intangible Assets | ||||
Intangible assets beginning balance | ||||
Impairment | ||||
Acquisition of Elusys Therapeutics | 11,200,000 | |||
Measurement period adjustments | (1,500,000) | |||
Amortization | (1,030,625) | |||
Intangible assets, ending balance | $ 8,669,375 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Expenses and Other Liabilities | ||
Compensation and related benefits | $ 1,176,963 | $ 459,178 |
Income tax payable | 1,092,560 | |
Accrued preclinical and clinical trial expenses | 959,992 | 955,013 |
Accrued manufacturing expenses | 594,358 | 179,173 |
Other expenses | 438,049 | 631,312 |
Accrued franchise tax | 40,000 | 195,000 |
Accrued expenses and other current liabilities | $ 4,301,922 | $ 2,419,676 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | 1 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2020 USD ($) | Oct. 25, 2016 USD ($) | Apr. 12, 2011 USD ($) | Feb. 18, 2011 USD ($) | Dec. 12, 2010 USD ($) | Sep. 08, 2010 USD ($) | Jun. 30, 2016 USD ($) | Jul. 31, 2011 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2010 USD ($) | Dec. 31, 2008 | Dec. 07, 2020 agreement item | Jul. 31, 2016 USD ($) | Dec. 31, 2015 USD ($) | Dec. 31, 2013 USD ($) | Dec. 31, 2012 USD ($) | |
ANTHIM | ||||||||||||||||
Future commitments | $ 53,000,000 | |||||||||||||||
University of Miami | ||||||||||||||||
Minimum royalty payment for first three years, per year | $ 10,000 | |||||||||||||||
Time period of minimum royalty payments | 3 years | |||||||||||||||
Minimum royalty payment for remainder life of agreement, per year | $ 20,000 | |||||||||||||||
Milestone payment | $ 500,000 | |||||||||||||||
Milestone payment upon annual net sales of $100,000,000 or more | $ 250,000 | |||||||||||||||
Maintenance fee | $ 82,000 | |||||||||||||||
Number of license agreements | agreement | 3 | |||||||||||||||
Threshold number of major markets | item | 1 | |||||||||||||||
Number of major markets | item | 3 | |||||||||||||||
Period of payment of nominal maintenance fee | 10 years | |||||||||||||||
Upfront fee | $ 20,000 | |||||||||||||||
University of Miami | License agreement ("SS114A") | ||||||||||||||||
Reimbursement of for past patent fees | $ 37,381 | |||||||||||||||
University of Miami | License I176 | ||||||||||||||||
Threshold number of major markets | item | 1 | |||||||||||||||
Number of major markets | item | 3 | |||||||||||||||
Not-for-profit corporation | ||||||||||||||||
Milestone payment | $ 1,000 | |||||||||||||||
License costs | $ 50,000 | |||||||||||||||
Maintenance fee | $ 5,000 | |||||||||||||||
University of Michigan | ||||||||||||||||
Option fees | $ 2,000 | |||||||||||||||
Term of option agreement | 9 months | |||||||||||||||
Payment for exercise of license option | $ 10,000 | |||||||||||||||
Pelican Therapeutics, Inc. | University of Miami | ||||||||||||||||
Minimum royalty payment for first three years, per year | $ 10,000 | |||||||||||||||
Time period of minimum royalty payments | 3 years | |||||||||||||||
Minimum royalty payment for remainder life of agreement, per year | $ 20,000 | |||||||||||||||
Heat I | ||||||||||||||||
Percentage of issued and outstanding stock owned | 7.50% | |||||||||||||||
Shattuck | ||||||||||||||||
License costs | $ 50,000 | |||||||||||||||
Zolovax | University of Miami | ||||||||||||||||
License time period from date of first sale of a Licensed Product | 15 years | |||||||||||||||
Upfront fee | $ 2,500 | |||||||||||||||
Pelican Therapeutics, Inc. | Pelican Therapeutics, Inc. | License I176 | ||||||||||||||||
Minimum royalty payment for remainder life of agreement, per year | $ 20,000 | |||||||||||||||
Pelican Therapeutics, Inc. | Pelican Therapeutics, Inc. | University of Miami | License 0331, 0539 | ||||||||||||||||
Milestone payments due upon submission | 150,000 | |||||||||||||||
Milestone payments completion of phase 1 clinical trial | $ 250,000 | |||||||||||||||
Pelican Therapeutics, Inc. | Pelican Therapeutics, Inc. | University of Miami | License I176 | ||||||||||||||||
Minimum royalty payment for first three years, per year | $ 10,000 | |||||||||||||||
License costs | $ 50,000 | |||||||||||||||
Reimbursement of for past patent fees | 15,797 | |||||||||||||||
Milestone payments due upon submission | 150,000 | |||||||||||||||
Milestone payments completion of phase 1 clinical trial | $ 500,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Royalty Payments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Commitments and Contingencies | |
2023 | $ 74,000 |
2024 | 775,000 |
2025 | 25,000 |
2026 | 50,000 |
Total | $ 924,000 |
Revenue (Details)
Revenue (Details) | 1 Months Ended | 12 Months Ended | 67 Months Ended | 79 Months Ended | ||||||||
Apr. 19, 2022 item | Jan. 07, 2020 USD ($) | Dec. 31, 2019 USD ($) | Oct. 31, 2017 USD ($) | May 31, 2017 USD ($) | Jun. 30, 2016 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 13, 2022 USD ($) | |
Grant Revenue | ||||||||||||
Revenue | $ 6,383,169 | $ 2,112,806 | ||||||||||
Grant receivable | 1,524,522 | $ 1,524,522 | $ 1,524,522 | |||||||||
Grant receivable | 1,318,359 | |||||||||||
Allowable expenses incurred under NIH grant | 40,000 | 30,000 | ||||||||||
Grant and contract revenue | ||||||||||||
Grant Revenue | ||||||||||||
Revenue | 402,176 | $ 2,112,806 | ||||||||||
Grant and contract revenue | Maximum | ||||||||||||
Grant Revenue | ||||||||||||
Amount Awarded From NIH Grant | $ 200,000 | |||||||||||
ANTHIM Vials | ||||||||||||
Grant Revenue | ||||||||||||
Number of vials to be delivered | item | 3,000 | |||||||||||
Contract award | $ 6,000,000 | |||||||||||
ANTHIM Vials | Accounts receivable | ||||||||||||
Grant Revenue | ||||||||||||
Contract with customer, receivable, after allowance for credit loss, current | $ 6,000,000 | |||||||||||
Pelican Therapeutics, Inc. | Grant and contract revenue | ||||||||||||
Grant Revenue | ||||||||||||
Revenue | 15,200,000 | 15,200,000 | 15,200,000 | |||||||||
Remaining grant amount receivable | 1,500,000 | 1,500,000 | 1,500,000 | |||||||||
Amount the company is required to match of each dollar of grant | 0.50 | 0.50 | 0.50 | |||||||||
Threshold amount for match of grant | 1 | 1 | 1 | |||||||||
Contribution to be made by Pelican | 7,600,000 | 7,600,000 | 7,600,000 | |||||||||
Grant receivable | $ 1,500,000 | $ 1,500,000 | $ 1,500,000 | |||||||||
Pelican Therapeutics, Inc. | Grant and contract revenue | Maximum | ||||||||||||
Grant Revenue | ||||||||||||
Amount awarded from CPRIT grant | $ 15,200,000 | |||||||||||
Royalty percentage after threshold is met | 1% | |||||||||||
Pelican Therapeutics, Inc. | Grant and contract revenue | Tranche 1 | ||||||||||||
Grant Revenue | ||||||||||||
Revenue | $ 1,800,000 | |||||||||||
Pelican Therapeutics, Inc. | Grant and contract revenue | Tranche 2 | ||||||||||||
Grant Revenue | ||||||||||||
Revenue | $ 6,500,000 | |||||||||||
Pelican Therapeutics, Inc. | Grant and contract revenue | Tranche 3 | ||||||||||||
Grant Revenue | ||||||||||||
Revenue | $ 5,400,000 |
Stockholders' Equity - Authoriz
Stockholders' Equity - Authorized Capital (Details) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Stockholders' Equity | ||
Preferred Stock, par value per share | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.0002 | $ 0.0002 |
Common Stock, Shares Authorized | 250,000,000 | 250,000,000 |
Common Stock, Shares, Issued | 25,661,488 | 25,649,824 |
Common Stock, Shares, Outstanding | 25,661,488 | 25,649,824 |
Stockholders' Equity - ATM Offe
Stockholders' Equity - ATM Offerings (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Proceeds from the issuance of common stock | $ 59,692 | $ 26,304,282 |
At The Market Offering | ||
Issuance of common stock (in shares) | 0 | 2,106,027 |
Average price of common stock | $ 12.18 | |
Proceeds from the issuance of common stock | $ 25,600,000 | |
Percentage of commission for common stock sold | 3% |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock Warrants - Narratives (Details) - $ / shares | 1 Months Ended | 12 Months Ended | |||
Nov. 26, 2018 | May 07, 2018 | Jan. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Common stock warrants | |||||
Stockholders' Equity | |||||
Warrants exercised | 31,000 | 0 | 0 | ||
Warrants expired | 42,556 | ||||
Warrants exchanged | 0 | 0 | |||
Warrants issued | 0 | 31,000 | |||
Number of shares of common stock each warrant is exercisable into | 1 | ||||
Outstanding common stock | 747,383 | ||||
Exercise price | $ 5.78 | ||||
Expiration term | 2 years | ||||
Common stock warrants | November 2018 Offering | |||||
Stockholders' Equity | |||||
Warrants issued | 657,142 | ||||
Number of shares of common stock each warrant is exercisable into | 1 | ||||
Exercise price | $ 11.55 | ||||
Expiration term | 5 years | ||||
Common stock warrants | May 2018 Offering | |||||
Stockholders' Equity | |||||
Number of shares of common stock issuable through warrants | 1,357,142 | ||||
Number of shares of common stock each warrant is exercisable into | 1 | ||||
Exercise price | $ 11.09 | ||||
Common stock issued for conversion of warrants | 1,026,785 | ||||
Expiration term | 5 years | ||||
Pre-funded warrant | May 2018 Offering | |||||
Stockholders' Equity | |||||
Exercise price | $ 0.07 |
Stockholders' Equity - Warrants
Stockholders' Equity - Warrants By Exercise Price (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Shares | 7,036,874 | 2,954,315 | 1,480,139 |
Exercise Price | $ 3.67 | $ 7.62 | $ 11.05 |
5/7/2018 | |||
Issuance Date | May 07, 2018 | ||
Number of Shares | 403,025 | ||
Exercise Price | $ 11.09 | ||
Expiration Date | May 08, 2023 | ||
11/26/2018 | |||
Issuance Date | Nov. 26, 2018 | ||
Number of Shares | 313,358 | ||
Exercise Price | $ 11.55 | ||
Expiration Date | Nov. 26, 2023 | ||
1/28/2021 | |||
Issuance Date | Jan. 28, 2021 | ||
Number of Shares | 31,000 | ||
Exercise Price | $ 5.78 | ||
Expiration Date | Jan. 28, 2023 | ||
Common stock warrants | |||
Exercise Price | $ 11.06 |
Stockholders' Equity - Equity C
Stockholders' Equity - Equity Compensation Plan - Narrative (Details) - shares | 1 Months Ended | 12 Months Ended | ||||||||||||
Aug. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2019 | Dec. 31, 2016 | Dec. 31, 2009 | Dec. 31, 2020 | Oct. 31, 2018 | Jun. 30, 2017 | Dec. 31, 2015 | Jun. 30, 2014 | Apr. 30, 2011 | Mar. 31, 2011 | |
Stockholders' Equity | ||||||||||||||
Granted | 4,307,599 | 1,674,153 | ||||||||||||
Outstanding stock options | 7,036,874 | 2,954,315 | 1,480,139 | |||||||||||
Dividend yield | ||||||||||||||
Stockholders' Equity | ||||||||||||||
Annual interest on outstanding balance | 0% | |||||||||||||
Subsidiaries Stock Incentive Plan | ||||||||||||||
Stockholders' Equity | ||||||||||||||
Outstanding stock options | 31,578 | 44,343 | ||||||||||||
Subsidiaries Stock Incentive Plan | CEO | Skunkworx Bio, Inc. | ||||||||||||||
Stockholders' Equity | ||||||||||||||
Granted | 10,526 | |||||||||||||
Subsidiaries Stock Incentive Plan | CEO | Scorpion Biological Services, Inc. | ||||||||||||||
Stockholders' Equity | ||||||||||||||
Granted | 10,638 | |||||||||||||
Subsidiaries Stock Incentive Plan | CEO | Abacus Biotech, Inc. | ||||||||||||||
Stockholders' Equity | ||||||||||||||
Granted | 10,526 | |||||||||||||
Subsidiaries Stock Incentive Plan | CEO | Blackhawk Bio Inc. | ||||||||||||||
Stockholders' Equity | ||||||||||||||
Granted | 10,526 | |||||||||||||
Subsidiaries Stock Incentive Plan | CFO | ||||||||||||||
Stockholders' Equity | ||||||||||||||
Granted | 2,127 | |||||||||||||
2009 Stock Incentive Plan | ||||||||||||||
Stockholders' Equity | ||||||||||||||
Number of shares authorized | 21,739 | 65,217 | 21,739 | |||||||||||
Expiration term | 10 years | |||||||||||||
Outstanding stock options | 1,135 | 2,622 | ||||||||||||
Common shares available for issuance | 86,957 | |||||||||||||
2014 Stock Option Plan | ||||||||||||||
Stockholders' Equity | ||||||||||||||
Number of shares authorized | 50,000 | |||||||||||||
Stock Incentive Plan, shares authorized increased | 60,000 | |||||||||||||
Outstanding stock options | 17,385 | 21,368 | ||||||||||||
2009 and 2014 Plans | ||||||||||||||
Stockholders' Equity | ||||||||||||||
Granted | 300,000 | |||||||||||||
2017 Stock Option Plan | ||||||||||||||
Stockholders' Equity | ||||||||||||||
Number of shares authorized | 500,000 | |||||||||||||
Outstanding stock options | 31,018 | 38,227 | ||||||||||||
2018 Stock Option Plan | ||||||||||||||
Stockholders' Equity | ||||||||||||||
Number of shares authorized | 571,428 | |||||||||||||
Increase in the number of shares available for grant | 571,428 | |||||||||||||
Outstanding stock options | 6,955,758 | 2,847,755 | ||||||||||||
2021 Stock Option Plan | ||||||||||||||
Stockholders' Equity | ||||||||||||||
Common shares available for issuance | 547,763 | |||||||||||||
2021 Employee Stock Option Plan | ||||||||||||||
Stockholders' Equity | ||||||||||||||
Number of shares authorized | 500,000 | |||||||||||||
Common shares available for issuance | 488,336 | |||||||||||||
Share based payment award discount from market price on purchase date | 15% | |||||||||||||
Share based payment award discount from market price on offering date | 85% |
Stockholders' Equity - Stock-ba
Stockholders' Equity - Stock-based Compensation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Stockholders' Equity | ||
Stock-based compensation | $ 4,085,737 | $ 6,168,981 |
Employee stock options | ||
Stockholders' Equity | ||
Stock-based compensation | 2,782,694 | 1,136,843 |
Non-employee stock options | ||
Stockholders' Equity | ||
Stock-based compensation | 1,114,894 | 1,294,279 |
Employee stock awards | ||
Stockholders' Equity | ||
Stock-based compensation | 169,571 | 2,903,463 |
Non-employee stock awards | ||
Stockholders' Equity | ||
Stock-based compensation | $ 18,578 | $ 834,396 |
2021 Stock Option Plan | ||
Stockholders' Equity | ||
Common shares available for issuance | 547,763 |
Stockholders' Equity - Accounti
Stockholders' Equity - Accounting for Stock-Based Compensation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Stockholders' Equity | ||
Stock-based compensation | $ 4,085,737 | $ 6,168,981 |
Compensation expenses capitalized | 0 | 0 |
Employee stock options | ||
Stockholders' Equity | ||
Stock-based compensation | $ 2,782,694 | $ 1,136,843 |
Vesting period | 4 years | |
Expiration term | 10 years | 10 years |
Employee stock options | Maximum | ||
Stockholders' Equity | ||
Vesting period | 10 years |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Option Valuation Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Stockholders' Equity | ||
Dividend yield | 0% | 0% |
Minimum | ||
Stockholders' Equity | ||
Expected volatility | 100.85% | 99.34% |
Risk-free interest rate | 1.95% | 0.36% |
Expected lives (years) | 5 years 3 months 18 days | 5 years |
Maximum | ||
Stockholders' Equity | ||
Expected volatility | 105.09% | 104.61% |
Risk-free interest rate | 3.61% | 1.36% |
Expected lives (years) | 6 years 1 month 6 days | 6 years 1 month 6 days |
Stockholders' Equity - Stock _2
Stockholders' Equity - Stock Option Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Shares | ||
Stock options outstanding at beginning of period | 2,954,315 | 1,480,139 |
Granted | 4,307,599 | 1,674,153 |
Exercised | (12,765) | (70,967) |
Expired | (82,253) | (49,532) |
Forfeited | (130,022) | (79,478) |
Stock options outstanding at end of period | 7,036,874 | 2,954,315 |
Stock options exercisable at end of period | 1,680,455 | |
Weighted Average Exercise Price | ||
Stock options outstanding at beginning of period (in dollars per share) | $ 7.62 | $ 11.05 |
Granted (in dollars per share) | 1.10 | 4.65 |
Exercised (in dollars per share) | 1.30 | 6.53 |
Expired (in dollars per share) | 10.20 | 14.26 |
Forfeited | 4.44 | 5.55 |
Stock options outstanding at end of period (in dollars per share) | 3.67 | $ 7.62 |
Stock options exercisable at end of period | $ 9.63 | |
Aggregate Intrinsic Value | ||
Stock options outstanding at beginning of period | $ 100,419 | $ 403,743 |
Stock options outstanding at end of period | 16,842 | $ 100,419 |
Stock options exercisable at end of period | $ 16,841 | |
Weighted Average Remaining Contractual Life | ||
Stock options outstanding at end of period | 9 years 1 month 6 days | |
Stock options exercisable at end of period | 7 years 6 months | |
Unrecognized stock-based compensation expense | $ 5,400,000 | |
Unrecognized stock-based compensation expense, recognition period | 1 year 3 months 18 days | |
Weighted-average fair value of options | $ 0.87 | $ 3.67 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted stock | ||
Shares | ||
Restricted stock at beginning of period | 370,170 | 239,928 |
Granted | 678,490 | |
Vested | (336,169) | (548,248) |
Restricted stock at end of period | 34,001 | 370,170 |
Weighted Average Fair Value | ||
Restricted stock at beginning of period | $ 4.71 | $ 4.02 |
Granted | 5.09 | |
Vested | 4.86 | 4.88 |
Restricted stock at end of period | $ 3.22 | $ 4.71 |
Aggregate fair value of awards vested | $ 1.6 | $ 2.2 |
Restricted stock | Vest on grant date | ||
Stockholders' Equity | ||
Vesting percentage | 50% | |
Restricted stock | Vest on first anniversary | ||
Stockholders' Equity | ||
Vesting percentage | 30% | |
Restricted stock | Vest on each anniversary thereafter | ||
Stockholders' Equity | ||
Vesting percentage | 10% | |
RSU's | ||
Shares | ||
Restricted stock at beginning of period | 1,900 | |
Vested | (1,900) | |
Weighted Average Fair Value | ||
Restricted stock at beginning of period | $ 26.60 | |
Vested | $ 26.60 | |
Increments for delivery of shares for time-based awards | 25% |
Income Tax (Details)
Income Tax (Details) | 12 Months Ended | ||
Nov. 15, 2021 | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) item | |
Income Tax | |||
Unrecognized tax benefit | $ 0 | $ 0 | |
Unrecognized income tax benefits impact on effective income tax rate | 0 | 0 | |
Accrual for interest and penalties relating to uncertain income tax positions | $ 0 | $ 0 | |
Statutory federal tax rate | 21% | 21% | |
Number of ownership changes over 50% | item | 5 | ||
Federal. | |||
Income Tax | |||
Net operating loss carryforwards | $ 174,285,827 | ||
Net operating loss available to offset future income | 116,493,744 | ||
NOLs that will expire unutilized | $ 58,181,799 | ||
R&D credits that will expire unutilized | $ 2,935,000 | ||
Federal. | Pelican Therapeutics, Inc. | |||
Income Tax | |||
Net operating loss carryforwards | 3,027,284 | ||
State. | |||
Income Tax | |||
Net operating loss carryforwards | 124,461,888 | ||
State. | Pelican Therapeutics, Inc. | |||
Income Tax | |||
Net operating loss carryforwards | 2,464,819 | ||
State. | North Carolina | |||
Income Tax | |||
Corporate income tax (as a percent) | 2.50% | ||
Foreign. | |||
Income Tax | |||
Net operating loss carryforwards | $ 125,097 |
Income Tax - Income Tax Benefit
Income Tax - Income Tax Benefit (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred Expense: | ||
Federal | $ (3,288,937) | $ (145,974) |
Total | $ (3,288,937) | $ (145,974) |
Income Tax - Income Tax Rate Di
Income Tax - Income Tax Rate Differences (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax | ||||||
Federal income tax expense at statutory rate: | $ (9,902,000) | $ (7,465,000) | ||||
Increase (reduction) in income tax resulting from: | ||||||
State income taxes | (198,000) | 556,000 | ||||
Foreign rate differential | (19,000) | (16,000) | ||||
Nondeductible expenses | 1,000 | 1,000 | ||||
Research and development credit | (1,312,000) | (836,000) | ||||
Stock based compensation | 192,000 | 164,000 | ||||
Excess executive compensation | 9,000 | 259,000 | ||||
Elusys acquisition | (41,000) | |||||
Goodwill Impairment | 305,000 | |||||
Reserve for loss carryforwards limited by Sec. 382 | 8,000 | 8,000 | ||||
Other | (99,937) | (32,974) | ||||
Increase in valuation allowance | 8,073,000 | 6,911,000 | ||||
Income tax expense (benefit) | $ 37,063 | $ (3,326,000) | $ (3,326,000) | $ (3,288,937) | $ (3,288,937) | $ (145,974) |
Income Tax - Deferred Tax Asset
Income Tax - Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Net operating losses | $ 23,938,503 | $ 17,830,889 |
R&D credits | 4,132,625 | 2,538,168 |
Stock compensation | 2,974,242 | 2,344,902 |
Contingent consideration | 767,763 | |
Deferred revenue | 7,465 | 8,039 |
Section 174 costs | 4,690,801 | |
Unrealized gains/losses | 584,079 | 210,300 |
Deferred tax assets | 36,327,715 | 23,700,061 |
Deferred tax liabilities: | ||
Intangible assets | (1,991,789) | (803,937) |
Property, plant and equipment, primarily due to differences in depreciation | (553,332) | (83,122) |
Lease liability | (2,743,364) | (78,035) |
Other | (99,272) | (83,931) |
Deferred tax liabilities | (5,387,757) | (1,049,025) |
Valuation allowance | $ (30,939,958) | (22,866,973) |
Net deferred tax (liabilities) | $ (215,937) |
Leases - Facility Lease (Detail
Leases - Facility Lease (Details) | 1 Months Ended | ||||
Sep. 15, 2022 USD ($) item | Oct. 31, 2021 ft² | Jun. 30, 2021 USD ($) ft² item | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Leases | |||||
Operating lease right-of-use asset | $ 6,005,147 | $ 1,782,884 | |||
Operating lease liability | 3,570,265 | ||||
Finance lease right-of-use asset | 15,329,075 | $ 470,700 | |||
Finance lease liability | 5,821,082 | ||||
Lab equipment | |||||
Leases | |||||
Reimbursement of expenses, capitalized | $ 13,200,000 | ||||
Morrisville, NC | |||||
Leases | |||||
Area of facility to be leased | ft² | 15,996 | ||||
Lease term | 8 years | ||||
Number of lease renewal terms | item | 1 | ||||
Lease renewal term | 5 years | ||||
Maximum amount of tenant improvements provided for under lease | $ 2,400,000 | ||||
Operating lease right-of-use asset | 5,600,000 | ||||
Operating lease liability | $ 3,200,000 | ||||
San Antonio, TX | |||||
Leases | |||||
Area of facility to be leased | ft² | 20,144 | ||||
Reimbursement of expenses to lessor | $ 24,300,000 | ||||
Lease term | 15 years | ||||
Number of lease renewal terms | item | 1 | ||||
Lease renewal term | 15 years | ||||
Number of lease subsequent renewal terms | item | 1 | ||||
Lease subsequent renewal term | 10 years | ||||
Maximum amount of tenant improvements provided for under lease | $ 2,400,000 | ||||
Reimbursements, expensed | 900,000 | ||||
Reimbursement included in finance lease right of use asset | 10,200,000 | ||||
Finance lease right-of-use asset | 15,100,000 | ||||
Finance lease liability | $ 5,100,000 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases | ||
Operating lease payments | $ 800,000 | $ 400,000 |
Effective interest rate | 5.80% | 5.30% |
Operating lease cost | $ 870,939 | $ 474,135 |
Finance lease cost | ||
Amortization of lease assets | 656,794 | 185,171 |
Interest on lease liabilities | 181,667 | 21,970 |
Total finance lease cost | $ 838,461 | $ 207,141 |
Weighted average remaining lease term (years), Operating leases | 7 years 2 months 12 days | 5 years |
Weighted average remaining lease term (years), Finance leases | 13 years 3 months 18 days | 2 years |
Weighted average incremental borrowing rate, Operating leases | 9.30% | 6.32% |
Weighted average incremental borrowing rate, Finance leases | 9.60% | 5.30% |
Leases - Maturities of Operatin
Leases - Maturities of Operating and Finance Lease Liabilities (Details) | Dec. 31, 2022 USD ($) |
Maturities of operating lease liabilities | |
2023 | $ 791,502 |
2024 | 618,918 |
2025 | 635,180 |
2026 | 575,349 |
2027 | 592,572 |
2028 | 610,407 |
Thereafter | 1,166,271 |
Total minimum lease payments | 4,990,199 |
Less: imputed interest | (1,419,934) |
Present value of operating lease liabilities | 3,570,265 |
Maturities of finance lease liabilities | |
2023 | 769,621 |
2024 | 812,383 |
2025 | 715,782 |
2026 | 595,309 |
2027 | 615,269 |
2028 | 635,827 |
Thereafter | 7,080,308 |
Total minimum lease payments | 11,224,499 |
Less: imputed interest | (5,403,417) |
Present value of lease liabilities | 5,821,082 |
Maturities of lease liabilities | |
2023 | 1,561,123 |
2024 | 1,431,301 |
2025 | 1,350,962 |
2026 | 1,170,658 |
2027 | 1,207,841 |
2028 | 1,246,234 |
Thereafter | 8,246,579 |
Total minimum lease payments | 16,214,698 |
Less: imputed interest | (6,823,351) |
Present value of lease liabilities | $ 9,391,347 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions | |
Percentage of outstanding common stock | 1.20% |
Net Loss Per Share - Reconcilia
Net Loss Per Share - Reconciliation of Net Loss (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net Loss Per Share | ||||||
Net loss | $ (13,347,771) | $ (6,937,910) | $ (15,127,708) | $ (28,475,479) | $ (43,862,197) | $ (35,400,807) |
Net loss - Non-controlling interest | (427,491) | (329,339) | ||||
Net loss attributable to NightHawk | $ (13,258,350) | $ (6,831,286) | $ (14,951,873) | $ (28,210,223) | $ (43,434,706) | $ (35,071,468) |
Weighted-average common shares outstanding, basic (in shares) | 25,606,326 | 24,913,942 | ||||
Weighted-average common shares outstanding, diluted (in shares) | 25,606,326 | 24,913,942 | ||||
Net loss per share, basic (in dollars per share) | $ (0.52) | $ (0.27) | $ (0.58) | $ (1.10) | $ (1.70) | $ (1.41) |
Net loss per share, diluted (in dollars per share) | $ (0.52) | $ (0.27) | $ (0.58) | $ (1.10) | $ (1.70) | $ (1.41) |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive Securities (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Employee stock options | ||
Net Loss Per Share | ||
Potentially dilutive securities | 7,036,874 | 2,954,315 |
Restricted stock subject to forfeiture and restricted stock units | ||
Net Loss Per Share | ||
Potentially dilutive securities | 34,001 | 370,170 |
Common stock warrants | ||
Net Loss Per Share | ||
Potentially dilutive securities | 747,383 | 747,383 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited and restated) - Restated consolidated balance sheet (Details) - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Goodwill | $ 3,301,959 | $ 3,214,747 | $ 1,452,338 | ||
Total Assets | 104,396,912 | 119,911,913 | $ 120,961,233 | ||
Deferred tax liability | $ 215,937 | 215,937 | |||
Total Liabilities | 31,960,244 | 33,713,188 | 33,141,130 | 8,927,662 | |
Accumulated deficit | 209,153,659 | (193,929,176) | (180,670,826) | 165,718,953 | |
Total Stockholders' Equity - NightHawk Biosciences, Inc. | 73,922,847 | 87,538,725 | 99,964,241 | 113,108,314 | |
Total Stockholders' Equity | $ 72,436,668 | 86,198,726 | 98,713,663 | $ 112,033,571 | $ 115,493,923 |
As Previously Reported | |||||
Goodwill | 3,467,747 | ||||
Total Assets | 120,164,913 | ||||
Deferred tax liability | 3,326,000 | 3,541,937 | |||
Total Liabilities | 37,039,188 | 36,467,130 | |||
Accumulated deficit | (197,002,176) | (183,996,826) | |||
Total Stockholders' Equity - NightHawk Biosciences, Inc. | 84,465,725 | 96,638,241 | |||
Total Stockholders' Equity | 83,125,726 | 95,387,663 | |||
Adjustments | |||||
Goodwill | (253,000) | ||||
Total Assets | (253,000) | ||||
Deferred tax liability | (3,326,000) | (3,326,000) | |||
Total Liabilities | (3,326,000) | (3,326,000) | |||
Accumulated deficit | 3,073,000 | 3,326,000 | |||
Total Stockholders' Equity - NightHawk Biosciences, Inc. | 3,073,000 | 3,326,000 | |||
Total Stockholders' Equity | $ 3,073,000 | $ 3,326,000 |
Quarterly Financial Data (Una_4
Quarterly Financial Data (Unaudited and restated) - Restated consolidated statements of operations and comprehensive loss (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income tax benefit | $ (37,063) | $ 3,326,000 | $ 3,326,000 | $ 3,288,937 | $ 3,288,937 | $ 145,974 |
Net loss | (13,347,771) | (6,937,910) | (15,127,708) | (28,475,479) | (43,862,197) | (35,400,807) |
Net loss attributable to NightHawk Biosciences, Inc. | $ (13,258,350) | $ (6,831,286) | $ (14,951,873) | $ (28,210,223) | $ (43,434,706) | $ (35,071,468) |
Net loss per share, basic (in dollars per share) | $ (0.52) | $ (0.27) | $ (0.58) | $ (1.10) | $ (1.70) | $ (1.41) |
Net loss per share, diluted (in dollars per share) | $ (0.52) | $ (0.27) | $ (0.58) | $ (1.10) | $ (1.70) | $ (1.41) |
Total comprehensive loss | $ (13,232,112) | $ (6,788,055) | $ (15,033,122) | $ (28,265,234) | $ (43,742,332) | $ (35,302,692) |
Comprehensive loss - NightHawk Biosciences, Inc. | (13,142,691) | (6,681,431) | (14,857,287) | (27,999,978) | $ (43,314,841) | $ (34,973,353) |
As Previously Reported | ||||||
Income tax benefit | 215,937 | 215,937 | ||||
Net loss | (13,094,771) | (10,263,910) | (18,453,708) | (31,548,479) | ||
Net loss attributable to NightHawk Biosciences, Inc. | $ (13,005,350) | $ (10,157,286) | $ (18,277,873) | $ (31,283,223) | ||
Net loss per share, basic (in dollars per share) | $ (0.51) | $ (0.40) | $ (0.71) | $ (1.22) | ||
Net loss per share, diluted (in dollars per share) | $ (0.51) | $ (0.40) | $ (0.71) | $ (1.22) | ||
Total comprehensive loss | $ (12,979,112) | $ (10,114,055) | $ (18,359,122) | $ (31,338,234) | ||
Comprehensive loss - NightHawk Biosciences, Inc. | (12,889,691) | (10,007,431) | (18,183,287) | (31,072,978) | ||
Adjustments | ||||||
Income tax benefit | (253,000) | 3,326,000 | 3,326,000 | 3,073,000 | ||
Net loss | (253,000) | 3,326,000 | 3,326,000 | 3,073,000 | ||
Net loss attributable to NightHawk Biosciences, Inc. | $ (253,000) | $ 3,326,000 | $ 3,326,000 | $ 3,073,000 | ||
Net loss per share, basic (in dollars per share) | $ (0.01) | $ 0.13 | $ 0.13 | $ 0.12 | ||
Net loss per share, diluted (in dollars per share) | $ (0.01) | $ 0.13 | $ 0.13 | $ 0.12 | ||
Total comprehensive loss | $ (253,000) | $ 3,326,000 | $ 3,326,000 | $ 3,073,000 | ||
Comprehensive loss - NightHawk Biosciences, Inc. | $ (253,000) | $ 3,326,000 | $ 3,326,000 | $ 3,073,000 |
Quarterly Financial Data (Una_5
Quarterly Financial Data (Unaudited and restated) - Restated consolidated cash flow (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net loss | $ (13,347,771) | $ (6,937,910) | $ (15,127,708) | $ (28,475,479) | $ (43,862,197) | $ (35,400,807) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Deferred tax liability | (3,326,000) | (3,288,937) | ||||
Cash Flows from Investing Activities | ||||||
Acquisition of Elusys Therapeutics, net of cash paid | $ 2,719,899 | |||||
As Previously Reported | ||||||
Net loss | (13,094,771) | (10,263,910) | (18,453,708) | (31,548,479) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Deferred tax liability | (215,937) | |||||
Adjustments | ||||||
Net loss | $ (253,000) | $ 3,326,000 | 3,326,000 | 3,073,000 | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Deferred tax liability | $ (3,326,000) | $ (3,073,000) |