美國
證券和交易委員會
華盛頓特區 20549
表格
截至季度結束日期的財務報告
或者
過渡期從_________到___________
委託文件編號：001-39866
ALLARITY THERAPEUTICS，INC。
(根據其章程規定的註冊人準確名稱)
| | |
| （設立或組織的其他管轄區域） | （納稅人識別號碼） |
| |
| （總部地址及郵政編碼） |
(
(註冊人電話號碼，包括區號)
Not Applicable
（前名稱、地址及財政年度，如果自上次報告以來有更改）
在法案第12(b)條的規定下注冊的證券：
| 每個類別的標題 | 交易標的 | 在其上註冊的交易所的名稱 | ||
| | | 該 |
請用複選標記指示，註冊者（1）在過去12個月內已按照《1934年證券交易法》第13或15(d)條的規定提交了所有要求提交的報告（或者要求註冊者提交此類報告的更短期限），並且（2）已經受到過去90天的此類申報要求。
請勾選方框，以表明註冊人是否在過去12個月內（或其要求提交此類文件的較短期限內）提交了每份交互式數據文件，其提交是根據規則405號第S-T條（本章第232.405條）要求提交的。
請使用複選標記指示報告人是否爲大型快速申報人、加速申報人、非加速申報人、小型報告公司或新興成長公司。請參閱《交易所法》第120億.2條中「大型快速申報人」、「加速申報人」、「小型報告公司」和「新興成長公司」的定義。
| 大型加速報告人 | ☐ | 加速文件提交人 | ☐ |
| | ☒ | 較小的報告公司 | |
| 新興成長公司 | |
如果是新興成長型企業，請勾選複選標記，表明註冊者已選擇不使用延長過渡期來符合根據證券交易法第13(a)條規定提供的任何新財務會計準則。
請勾選是否註冊公司是外殼公司（根據《證券交易法》第12b-2規則定義）。是
截至2024年11月13日，
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除非上下文另有說明，在本第10-Q表格的季度報告（「季度報告」）中，對「公司」、「Allarity」、「我們」、「我們」等類似術語的引用指的是Allarity Therapeutics, Inc.，Allarity Therapeutics A/S（前身）及其各自的合併子公司。2024年4月9日，我們實施了一項1對20的普通股合併（「四月普通股合併」）。 2024年9月11日，我們實施了一項1對30的普通股合併（「九月普通股合併」）。本季度報告中反映的所有歷史股票數量和每股金額均已調整以反映股票合併。
本季度報告包含我們認爲是「前瞻性聲明」的內容，該內容符合1995年《私人證券訴訟改革法》的含義。這些前瞻性聲明旨在享受該法案提供的前瞻性聲明安全港的保護，以及其他聯邦證券法所提供的保護。一般而言，諸如「實現」、「目標」、「抱負」、「預期」、「相信」、「致力於」、「繼續」、「可能」、「設計」、「估計」、「期望」、「預測」、「未來」、「目標」、「成長」、「指引」、「打算」、「可能」、「應該」、「里程碑」、「目標」、「在進行中」、「機會」、「展望」、「即將」、「計劃」、「方位」、「可能」、「潛力」、「預測」、「進展」、「路線圖」、「尋求」、「應該」、「努力」、「目標」、「即將」、「將會」、「將」等詞彙及類似表達識別出前瞻性聲明，這些聲明並不具有歷史性質。前瞻性聲明可能貫穿本季度報告和我們向證券交易委員會（「SEC」）提交的其他文件中。前瞻性聲明涉及風險和不確定性，可能導致實際結果與這些前瞻性聲明預期的不同。這些風險和不確定性包括但不限於我們在年度報告（Form 10-k，經修訂的）中「風險因素」部分所描述的因素，該年度報告最初於2024年3月8日向SEC提交。
我們敦促投資者在評估本季度報告中包含的前瞻性陳述時，仔細考慮這些文件中披露的所有風險、不確定性和其他因素。我們無法向您保證本季度報告中包含的任何前瞻性陳述所反映或暗示的我們所預期的結果或發展將會實現，或者即使大致實現，那些結果或發展將對我們產生預期的後果，或影響我們的運營或財務表現，正如我們所預測或期望的那樣。由於上述事項及其他事項，包括事實變化、假設未實現或其他因素，與任何前瞻性陳述相關的實際結果可能與該前瞻性陳述中表達或暗示的預期結果存在重大差異。本季度報告中包含的前瞻性陳述僅在本季度報告的日期作出，我們沒有義務更新任何此類陳述以反映後續事件或情況。
簡明合併資產負債表
(未經審計)
(以千美元計，每股數據除外)
| 9月30日, | 2023年12月31日, | |||||||
| 2024 | 2023 | |||||||
| 資產 | ||||||||
| 流動資產 | ||||||||
| 現金及現金等價物 | $ | $ | ||||||
| 其他流動資產 | ||||||||
| 預付費用 | ||||||||
| 稅收信用應收款 | ||||||||
| 總流動資產 | ||||||||
| 物業、廠房和設備，淨值 | ||||||||
| 無形資產 | ||||||||
| 總資產 | $ | $ | ||||||
| 負債和股東權益（赤字） | ||||||||
| 流動負債 | ||||||||
| 應付賬款 | $ | $ | ||||||
| 應計負債 | ||||||||
| 權證衍生金融負債 | ||||||||
| 應付所得稅 | ||||||||
| 可轉換票據及應計利息，扣除債務折扣淨額 | ||||||||
| 總流動負債 | ||||||||
| 遞延稅款 | ||||||||
| 總負債 | ||||||||
| 承諾和 contingencies (注14) | ||||||||
| 股東權益（赤字） | ||||||||
| A股優先股$每股（ 和 截至2024年9月30日和2023年12月31日指定的股份分別爲)截至2024年9月30日和2023年12月31日已發行並流通的股份爲 和 ，分別 | ||||||||
| 普通股，每股面值爲 $0.0001；每股（ 和 股份授權數量在2024年9月30日和2023年12月31日分別爲；2024年9月30日和2023年12月31日的已發行和流通股份爲 和 ，分別 | ||||||||
| 追加實收資本 | ||||||||
| 累計其他綜合損失 | ( | ) | ( | ) | ||||
| 累積赤字 | ( | ) | ( | ) | ||||
| 股東權益（赤字） | ( | ) | ||||||
| 負債和股東權益（赤字）總額 | $ | $ | ||||||
請參閱簡明綜合財務報表附註。
綜合損失及綜合損益簡明綜合表
(未經審計)
(以千美元計，每股數據除外)
| 三個月已結束 |
九個月已結束 |
|||||||||||||||
| 九月三十日 |
九月三十日 |
|||||||||||||||
| 2024 |
2023 |
2024 |
2023 |
|||||||||||||
| 運營費用 |
||||||||||||||||
| 研究和開發 |
$ | $ | $ | $ | ||||||||||||
| 無形資產減值 |
||||||||||||||||
| 一般和行政 |
||||||||||||||||
| 運營費用總額 |
||||||||||||||||
| 運營損失 |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| 其他收入（支出） |
||||||||||||||||
| 利息收入 |
||||||||||||||||
| 利息支出 |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| 外匯（虧損）收益 |
( |
) | ( |
) | ||||||||||||
| 9月新認股權證的公允價值 |
( |
) | ( |
) | ||||||||||||
| 2023 年 4 月和 7 月認股權證修改的公允價值 |
( |
) | ( |
) | ||||||||||||
| 衍生品和認股權證負債公允價值的變化 |
||||||||||||||||
| 其他收入總額（支出） |
( |
) | ||||||||||||||
| 稅收優惠前的淨虧損 |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| 所得稅優惠 |
||||||||||||||||
| 淨虧損 |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| A系列優先股的視作股息 |
( |
) | ( |
) | ( |
) | ||||||||||
| A系列可轉換優先股的視同股息 |
( |
) | ( |
) | ||||||||||||
| A系列可轉換優先股的滅絕收益 |
||||||||||||||||
| C系列優先股的視作股息 |
( |
) | ||||||||||||||
| 歸屬於普通股股東的淨虧損 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| 每股普通股的基本淨虧損和攤薄淨虧損 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| 已發行普通股、基本股和攤薄後普通股的加權平均數 |
||||||||||||||||
| 其他綜合虧損，扣除稅款 |
||||||||||||||||
| 淨虧損 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| 累積翻譯調整的變化 |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| 歸屬於普通股股東的綜合虧損總額 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
請參閱簡明綜合財務報表附註。
可贖回可轉換股東的合併變動簡表’ 資產淨額（虧損）
截至2024年9月30日和2023年9月30日的前三個月和前九個月
(未經審計)
(以千美元計，除分享數據外)
| C輪 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| A輪融資 | B輪 | 可轉換債券 | A輪融資 | 累計 | 總計 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 優先股 | 優先股 | 優先股 | 優先股 | 額外的 | 其他 | 股東權益 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 股票 | 股票 | 股票 | 股票 | 普通股 | 實收資本 | 綜合 | 累計 | 股權 | ||||||||||||||||||||||||||||||||||||||||||||||||
| 數字 | 價值 | 數字 | 價值 | 數字 | 價值 | 數字 | 價值 | 數字 | 價值 | 資本 | 虧損 | 虧損 | (赤字) | |||||||||||||||||||||||||||||||||||||||||||
| 2022年12月31日餘額 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||||||||
| 發行C系列可轉換優先股，淨額 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| 被視爲分紅派息 分紅派息以及C系列可轉換優先股增值至贖回價值 | — | — | — | — | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||
| 普通股回購，結果爲1比35和1比40的拆股並股 | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| 優先股轉換爲普通股，淨值 | ( | ) | ( | ) | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| B系列優先股贖回 | — | — | ( | ) | ( | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| 以股票爲基礎的補償（收入） | — | — | — | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| 貨幣翻譯調整 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| 本期虧損 | — | — | — | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| 2023年3月31日的結存 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||||||||
| 2023年4月融資中發行的普通股淨額 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 由於1比40的拆股並股而發行的普通股合併 | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| 4月份認股證的公允價值，扣除融資成本後分配給負債 | — | — | — | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| 將A類優先股轉換爲普通股 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
| C類優先股的被視爲派息 | — | — | — | — | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||
| A類贖回權的消除 | ( | ) | ( | ) | — | — | — | — | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||
| 發行A類優先股以償還債務 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 贖回A類優先股以取消債務 | — | — | — | — | — | — | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| 將C系列優先股與A系列優先股交換 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 基於股票的補償 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| 貨幣翻譯調整 | — | — | — | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| 本期虧損 | — | — | — | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| 餘額，2023年6月30日 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||||||||
| 2023年7月10日修改A系列優先股 | — | — | — | — | — | — | — | — | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||
| 發行普通股，淨額2023年7月融資 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 分配給負債的7月認股權的公允價值，扣除融資成本 | — | — | — | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| 贖回A系列股份 | — | — | — | — | — | — | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| 由於拆股並股而進行的普通股調整 | — | — | — | — | — | — | — | — | ( | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| 根據誘因行使的2023年9月權證，淨額 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| 根據2023年9月權證誘因發行股份的義務 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| 根據9月份權證誘因行使的公平價值 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2023年9月修改A系列優先股 | — | — | — | — | — | — | — | — | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||
| 基於股票的補償 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| 貨幣翻譯調整 | — | — | — | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| 本期虧損 | — | — | — | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| 餘額，2023年9月30日 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||||||||
| A輪融資 |
A系列可轉換債券 |
累計 |
總計 |
|||||||||||||||||||||||||||||||||||||
| 可轉換債券 |
可贖回 |
額外的 |
其他 |
股東權益 |
||||||||||||||||||||||||||||||||||||
| 優先股 |
優先股 |
普通股 |
實收資本 |
綜合 |
累計 |
股權 |
||||||||||||||||||||||||||||||||||
| 數字 |
淨值 |
數字 |
淨值 |
數字 |
價值 |
資本 |
虧損 |
虧損 |
(赤字) |
|||||||||||||||||||||||||||||||
| 2023年12月31日餘額 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||||||||||||||||
| 將優先股轉換爲普通股，淨值 |
( |
) | ( |
) | — | — | ||||||||||||||||||||||||||||||||||
| 優先股的註銷 |
— | ( |
) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
| 優先股的視爲分紅 |
— | — | — | — | — | ( |
) | |||||||||||||||||||||||||||||||||
| 爲補償發行的股票 |
||||||||||||||||||||||||||||||||||||||||
| 根據公開市場銷售協議（ATM）發行的普通股，減去發行成本 |
— | — | — | |||||||||||||||||||||||||||||||||||||
| 逆向拆分（1股拆30股）四捨五入調整 |
— | — | ( |
) | — | — | — | — | — | |||||||||||||||||||||||||||||||
| 基於股票的補償（收回） |
— | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||
| 貨幣翻譯調整 |
— | — | — | |||||||||||||||||||||||||||||||||||||
| 本期虧損 |
— | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||
| 2024 年 3 月 31 日餘額 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||||||||||||||||
| 優先股轉換爲普通股，淨額 |
( |
) | ( |
) | — | — | ||||||||||||||||||||||||||||||||||
| 優先股的註銷 |
— | ( |
) | — | — | — | — | |||||||||||||||||||||||||||||||||
| 優先股的視爲分紅 |
— | — | — | — | — | ( |
) | |||||||||||||||||||||||||||||||||
| 現金less 轉讓 3i 交易所 warrants |
— | — | ||||||||||||||||||||||||||||||||||||||
| 根據公開市場銷售協議（ATM）發行的普通股，減去發行成本 |
— | — | — | — | ||||||||||||||||||||||||||||||||||||
| 逆向拆分（1-30）舍入調整 |
— | — | ( |
) | — | — | — | — | — | |||||||||||||||||||||||||||||||
| 基於股價的補償（追索） |
— | — | — | |||||||||||||||||||||||||||||||||||||
| 貨幣翻譯調整 |
— | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||
| 本期虧損 |
— | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||
| 餘額，2024年6月30日 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||||||||||||||||
| 發行可轉換可贖回優先股 |
— | — | — | — | — | — | — | 2,938 | ||||||||||||||||||||||||||||||||
| 可轉換可贖回優先股贖回 |
— | — | ( |
) | ( |
) | — | — | ( |
) | ||||||||||||||||||||||||||||||
| 可贖回優先股的被視爲股息 |
— | — | — | — | — | ( |
) | |||||||||||||||||||||||||||||||||
| 根據公開市場銷售協議（ATM）發行的普通股，減去發行成本 |
— | — | — | — | ||||||||||||||||||||||||||||||||||||
| 股票的1比30的回拆圓整調整 |
— | — | ( |
) | ||||||||||||||||||||||||||||||||||||
| 基於股票的補償 |
— | — | — | |||||||||||||||||||||||||||||||||||||
| 貨幣翻譯調整 |
— | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||
| 本期虧損 |
— | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||
| 餘額，2024年9月30日 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||||||||||||||||
請參閱簡明綜合財務報表附註。
現金流量表簡明綜合報表
（未經審計）
(千美元)
| 截至九個月 |
||||||||
| 9月30日, |
||||||||
| 2024 |
2023 |
|||||||
| 經營活動產生的現金流量： |
||||||||
| 淨虧損 |
$ | ( |
) | $ | ( |
) | ||
| 淨虧損與經營活動使用現金的調節： |
||||||||
| 折舊和攤銷 |
||||||||
| 基於股票的補償 |
||||||||
| 無形資產減值 |
||||||||
| 未實現外匯匯兌（盈利）損失 |
( |
) | ||||||
| 非現金融資成本 |
||||||||
| 非現金利息 |
||||||||
| 九月份新期權的公允價值 |
||||||||
| 2023年4月和7月warrants的公允價值調整 |
||||||||
| 權證和衍生工具義務的公允價值變動 |
( |
) | ( |
) | ||||
| 遞延所得稅 |
( |
) | ||||||
| 運營資產和負債的變化： |
||||||||
| 其他流動資產 |
||||||||
| 稅收信用應收款 |
( |
) | ( |
) | ||||
| 預付費用 |
||||||||
| 應付賬款 |
( |
) | ||||||
| 應計負債 |
( |
) | ( |
) | ||||
| 應付所得稅 |
( |
) | ||||||
| 經營租賃負債 |
( |
) | ||||||
| 用於經營活動的淨現金 |
( |
) | ( |
) | ||||
| 籌資活動產生的現金流量： |
||||||||
| 普通股ATM銷售收入，扣除發行費用 |
||||||||
| 普通股和預先融資權證發行的淨收益 |
||||||||
| 與價格和權證誘導相關的權證行使的淨收益 |
||||||||
| C系列可轉換優先股發行的收益，扣除成本 |
||||||||
| B系列優先股的贖回 |
( |
) | ||||||
| 可轉換可贖回A系列優先股發行的收益 |
||||||||
| 可轉換可贖回A系列優先股的贖回 |
( |
) | ||||||
| 來自3i的本票收益 |
||||||||
| 3i債務和本票的償還 |
( |
) | ( |
) | ||||
| 贖回A系列優先股 |
( |
) | ||||||
| 融資活動提供的淨現金 |
||||||||
| 現金及現金等價物的淨增加（減少） |
( |
) | ||||||
| 匯率變動對現金及現金等價物的影響 |
( |
) | ( |
) | ||||
| 現金及現金等價物期初餘額 |
||||||||
| 現金及現金等價物期末餘額 |
$ | $ | ||||||
| 現金流信息的補充披露： |
||||||||
| 支付的所得稅費用 |
$ | $ | ||||||
| 支付的利息現金 |
$ | $ | ||||||
| 補充披露非現金融資和投資活動： |
||||||||
| A系列可贖回優先股的轉換 |
||||||||
| A類優先股的被視爲股息 |
( |
) | ||||||
| A系列優先股滅失收益 |
||||||||
| 與諮詢協議相關發行的股票 |
||||||||
| 因轉換3,632,366個3i 交易所權證而發行2,359,650普通股 |
||||||||
| 發行A系列優先股以換取C系列優先股 |
||||||||
| 發行A系列優先股以償還350美元的3i本票 |
||||||||
| 因消除A系列贖回權而視爲股息 |
||||||||
| 因將C系列優先股兌換成A系列優先股而視爲股息 |
||||||||
| 因贖回A系列優先股而視爲股息 |
||||||||
| 視爲C系列可轉換優先股的股息，以及C系列優先股的增值至贖回價值 |
||||||||
| 因可轉換可贖回A系列優先股而視爲股息 |
||||||||
請參閱簡明綜合財務報表附註。
ALLARITY THERAPEUTICS，INC。
(未經審計)
1. 組織、主要活動和陳述基礎
背景
Allarity Therapeutics, Inc.及其子公司（以下簡稱「公司」）是一家臨床階段的藥品公司，專注於開發用於癌症個性化治療的藥物，使用其專有的藥物反應預測技術DRP®生成的特定藥物伴隨診斷。此外，公司的丹麥子公司Allarity Therapeutics Europe ApS（之前的Oncology Venture ApS）專注於抗癌藥物的研發。
公司的主要運營位於Venlighedsvej 1, 2970 阿爾胡斯，丹麥。公司在美國的業務地址位於 24 學校街， 2日 層，波士頓，馬薩諸塞州 02108.
流動性
隨附的未經審計的簡要中期合併基本報表（以下簡稱「基本報表」）是根據業務持續經營、實現資產以及在正常業務中滿足負債和承諾的基礎上編制的。
根據會計準則宗號（ASC）的要求， 205-40, 關於實體繼續作爲持續經營的不確定性披露，公司已評估是否存在條件和事件，綜合考慮，存在對公司繼續作爲持續經營可能帶來重大疑慮的情況。 一份 在附帶的基本報表發佈後的一年內。
作爲一家生物製藥組織，公司自成立以來，幾乎將所有資源投入到了與公司產品候選者相關的藥物反應預測器「DRP」的研究和開發活動、業務規劃、籌集資本、建立知識產權組合、獲取或發現新的產品候選者，以及爲這些運營提供一般和行政支持。因此，公司自成立以來一直承擔着重大的營運虧損和負現金流，並預計這種虧損和負現金流將在可預見的未來繼續存在。
公司自成立以來，主要通過銷售股票來資助其運營。公司已經遭受了巨額損失，並累計赤字達到$
儘管該公司認爲其資本資源足以爲公司下一年的持續運營提供資金 12 自財務報表發佈之日起幾個月，在此期間，公司的流動性可能會受到以下方面的重大影響：（1) 其通過股權發行、債務融資或其他非稀釋性籌集額外資本的能力 第三-派對資金；（2) 與新的或現有的戰略聯盟或許可和合作安排相關的成本；(3) 與 DRP 相關的負面監管事件或意想不到的成本；(4) 任何其他意想不到的重大負面事件或成本。這些事件或成本中的一項或多項可能會對公司的流動性產生重大影響。如果公司無法在到期時履行其義務，則公司 可能 必須推遲支出，縮小研發計劃的範圍，或對其運營計劃進行重大修改。財務報表確實如此 不 包括由於這種不確定性的結果而可能產生的任何調整。
演示基礎
基本報表是按照美國公認的會計原則（ "U.S. GAAP"）編制的，該原則由財務會計準則委員會（"FASB"）爲中期財務信息以及證券交易委員會（"SEC"）的規則和條款制定。
基本報表包含所有正常且經常性的調整，以充分陳述公司的合併資產負債表、營業成果和綜合損失、可贖回可轉換優先股和股東權益（赤字）、以及公司在報告期內現金流量。除另有披露外，所有這些調整僅包括那些正常經常性的調整。營運成果爲 三 和 九 月結束 2024年9月30日， 針對…，在任何後續時期，結果可能是... 在測試商譽減值時，公司可以選擇可預期的結果。 可以 在截至的本財政年度結束之際，可以預期 12月31日2024此處提供的財務數據不包含美國通用會計準則要求的所有披露內容，應同時閱讀經審計的合併財務報表和相關說明，截至幷包括截至的財政年度 在測試商譽減值時，公司可以選擇 包括所有US GAAP要求的披露，應結合審計的合併財務報表和相關附註閱讀，截至和截至財政年度 2023年12月31日，其中包括在公司於2024年3月8日首次向證券交易委員會提交的年度報告表格中 10-k，已修訂的（稱爲「表格- K」）最初於 10 年 2024年3月8日提交
使用估計
根據美國公認會計原則編制基本報表需要管理層做出估計和假設，這些估計和假設會影響到未經審計的臨時簡明合併基本報表中資產的報告金額以及或有資產和負債的披露，同時也會影響到報告期間的營業收入和費用的報告金額。實際結果可能與這些估計和假設存在差異。
2.計劃的財務報表按照美國通用會計準則（「U.S. GAAP」）的原則準備。
已經發生了 沒有 在本表中討論的重要會計政策的新修訂或變化 10年度報告中，報告格式爲 該租賃的當前經營負債約爲這些對公司具有重要意義或潛在重要性。
組織和合並原則
所有板塊內公司之間的交易和餘額，包括跨公司銷售產生的未實現利潤，在合併時已被消除。
外幣和貨幣翻譯
功能貨幣是實體運營所在主要經濟環境的貨幣。公司及其子公司主要在丹麥和美國運營。公司子公司的功能貨幣爲其當地貨幣。
公司的報告貨幣是美元。公司將丹麥子公司的資產和負債按資產負債表日的匯率換算爲美元。收入和費用按每月期間的平均匯率進行換算。未實現的匯兌收益和損失作爲累積匯兌調整記錄，包含在簡明合併的股東權益（赤字）變動表中，作爲累計其他綜合損失的一個組成部分。
以其他貨幣計價的貨幣資產和負債按資產負債表日期的匯率重新計量爲功能貨幣。以外幣計價的非貨幣資產和負債按交易日期的匯率重新計量爲功能貨幣。因外幣交易產生的匯兌收益或損失計入各自期間的淨損失的計算中。匯率轉換產生的調整計入在綜合損失和綜合損失的壓縮合並報表中，作爲發生的其他綜合損失。
匯率變動引起的調整金額在綜合損益表中包括在其他綜合損失中。在發生時，彙總利潤表和綜合損失中的其他。 三 月結束 2024年9月30日 及 2023公司報告了累積外幣翻譯虧損$
信用風險和重要供應商的集中度
可能使公司面臨信用風險集中度的金融工具主要包括現金及現金等價物。公司將其現金及現金等價物存放在金融機構，金額可能超過政府保險的限額。公司不認爲 在測試商譽減值時，公司可以選擇 它面臨額外的信用風險，超出了通常與商業銀行關係相關的風險。公司已 在測試商譽減值時，公司可以選擇 在其現金及現金等價物帳戶中經歷了損失，管理層基於金融機構的質量認爲，這些存款的信用風險是 在測試商譽減值時，公司可以選擇 顯著的。公司依賴於 第三- 第三方製造商爲其項目的研究和開發活動提供產品。特別是，公司依賴並預計將繼續依賴少數製造商來滿足其與這些項目相關的供應和原材料需求。這些項目可能會受到這些製造服務或原材料可用性重大中斷的不利影響。
現金及現金等價物
公司認爲所有在購買時剩餘期限爲1個月或更短的高流動性投資均爲貨幣等價物。 三 公司主要在金融機構存入資金，有時超出美國聯邦存款保險公司（FDIC）保險範圍。 可以 公司未曾經歷超出FDIC限額的損失。 在測試商譽減值時，公司可以選擇 公司未經歷任何與超過FDIC限額的金額相關的損失。
累計其他綜合損失
累計其他綜合損失包括淨損失以及股東權益（赤字）中的其他變動，這些變動源於與股東以外的交易和經濟事件。公司將與外幣轉換和特定信用風險相關的未實現收益和損失記錄爲在簡明合併損益表和綜合損失中的其他累計綜合損失的元件。期間， 三 和 九 月結束 2024年9月30日及 2023公司的其他綜合收益包括貨幣轉換調整。
最近發佈的會計聲明
美國會計準則的變化由FASB以會計準則更新（「ASUs」）的形式確定，並納入FASB的會計準則編碼。公司考慮所有ASUs的適用性和影響。所有ASUs截至基本報表日期發佈的更新已經進行評估和確定 在測試商譽減值時，公司可以選擇 爲適用或預計對公司的簡明合併財務狀況和經營成果影響較小。
會計準則 不 尚未採納
2023年1月， 2023年11月，ASU：對第326號主題的會計準則改進進行了澄清或解決了有關ASU2020-01的某些方面的特定問題。No. 2023-07, 分段報告（主題280：報告段落披露的改進這要求實體根據主題報告分部信息。280,分部報告。ASU中的修正案旨在通過增強對重要分部費用的披露來改善可報告分部的披露要求。本次更新中的修正案適用於在之後開始的財政年度。 2023年12月15日之後。以及在財政年度開始後的中期。 2024年12月15日。公司目前正在評估新標準對其財務報表披露的影響。
2023年1月， 2023年12月，ASU：對第326號主題的會計準則改進進行了澄清或解決了有關ASU2020-01的某些方面的特定問題。No. 2023-09, 所得稅（話題 740關於所得稅披露的改進。這將擴展實體所得稅稅率調節表中的披露，以及關於在美國和外國管轄區支付的現金稅的披露。該更新將在之後開始的年度期間生效。 2024年12月15日。公司目前正在評估這一指引對其財務報表披露的影響。
在 2024年11月， 《金融工具-信用損失》以引入新的準則，用於對其範疇內的工具的信貸損失進行會計處理。ASU No. 2024-03, 損益表 – 綜合收益報告 – 費用分解披露（子主題 220-40）：利潤表費用的分解這要求在基本報表的附註中以表格格式披露有關某些成本和費用的特定信息。此更新中的修訂沒有 在測試商譽減值時，公司可以選擇 更改或刪除當前的費用披露要求。此更新中的修訂適用於財政年度，自 2026年12月15日後的財政年度開始日期起實施。 和財年開始後的中期業績 2027年12月15日。 允許提前採用。公司目前正在評估新標準對其基本報表披露的影響。
3. 無形資產
公司的知識產權和研發資產已被歸類爲無限使用壽命的無形資產。公司正在進行的單個重要開發項目，斯特諾帕瑞，的記錄爲 and $
公司已經暫停進行正在進行的第 2 stenoparib試驗，並將重點放在與FDA監管意圖相關的後續試驗的開發。這些進展促使公司利用加權平均資本成本（「WACC」）的貼現現金流模型對公司無形資產進行了更新的減值評估。 26%. 由於更新的減值評估結果，公司確認了一項金額爲$的減值損失，以及一項外匯損失爲$的損失。
4. 應計負債
The Company’s accrued liabilities are comprised of the following:
| September 30, | December 31, | |||||||
| ($ in thousands) | 2024 | 2023 | ||||||
| Development cost liability | $ | $ | ||||||
| Accrued interest on milestone liabilities | ||||||||
| Accrued audit and legal | ||||||||
| Payroll accruals | ||||||||
| Accrued contracted services and other | ||||||||
| Total accrued expenses | $ | $ | ||||||
5. Convertible promissory note due to Novartis
On January 26, 2024, the Company received a termination notice from Novartis Pharma AG, a company organized under the laws of Switzerland (“Novartis”) due to a material breach of that certain license agreement dated April 6, 2018, as amended to date (the “License Agreement”). Accordingly, under the terms of the License Agreement, the Company ceased all development and commercialization activities with respect to all licensed products, all rights and licenses granted by Novartis to the Company reverted to Novartis; and all liabilities due to Novartis became immediately due and payable inclusive of interest which is continuing to accrue at
6. Convertible senior promissory notes due to 3i, LP (“3i”)
| 3i Convertible Senior Promissory Notes (2024) (collectively the “2024 Notes”) |
During the three months ended March 31, 2024, the Company entered into a Securities Purchase Agreement (the “SPA”), as amended, with 3i, pursuant to which three senior convertible promissory notes were issued as follows:
| i. | On January 18, 2024, in an aggregate principal amount of $ |
| ii. | On February 13, 2024, in an aggregate principal amount of $ |
| iii. | On March 14, 2024, in an aggregate principal amount of $ |
The Company agreed to pay interest to 3i on the aggregate unconverted and then outstanding principal amount of the 2024 Notes at the rate of
Redemption
Subject to the provisions of the 2024 Notes, if, at any time while the 2024 Notes are outstanding, the Company engages in one or more subsequent financings, 3i may require the Company to first use up to 100% of the gross proceeds of such financing to redeem all or a portion of the 2024 Notes at
The 2024 Notes and accrued interest were redeemed in full and cancelled on May 6, 2024.
| 3i Convertible Secured Promissory Notes (2023) |
On November 22, 2022, the Company entered into a Secured Note Purchase Agreement (“Purchase Agreement”) with 3i, whereby the Company authorized the sale and issuance of three Secured Promissory Notes (each a “Note” and collectively, the “Notes”). Effective November 28, 2022, the Company issued: (1) a Note in the principal amount of $
Each Note matured on January 1, 2024, carried an interest rate of
The 3i Convertible Secured Promissory Notes were paid in full and cancelled on April 21, 2023.
7. Preferred Stock
August 2024 Series A Convertible Redeemable Preferred Stock
On August 19, 2024 (the "Closing Date"), the Company entered into a Securities Purchase Agreement (the “August 2024 SPA”) with certain purchasers (the “August 2024 Purchasers”), pursuant to which the Company issued and sold, in a private placement (the “August 2024 Offering”),
On the Closing Date, the Company filed a certificate of designation (the “August 2024 COD”) with the Secretary of the State of Delaware designating the rights, preferences and limitations of the August 2024 Preferred Stock. Under the August 2024 COD, for purposes of determining the presence of a quorum at any meeting of the stockholders of the Company at which the August 2024 Preferred Stock were entitled to vote and the voting power of the August 2024 Preferred Stock, each holder of the August 2024 Preferred Stock was entitled to a number of votes equal to shares of the Company’s common stock into which such August 2024 Preferred Stock are then convertible, disregarding, for such purposes, any limitations on conversion. The August 2024 Preferred Stock were entitled to vote on each matter submitted to a vote of the stockholders generally and shall vote together with the common stock and any other class or series of capital stock entitled to vote thereon as a single class and on an as converted to the common stock basis.
The holders of the August 2024 Preferred Stock were entitled to dividends, on an as-if converted basis, equal to dividends actually paid, if any, on the common stock. The August 2024 Preferred Stock was convertible, at the option of the holders and, in certain circumstances, by the Company, into common stock, as determined by dividing the net purchase price of $
On the Closing Date, the Company and the August 2024 Purchasers also entered into a Registration Rights Agreement (the “August 2024 RRA”), pursuant to which the Company agreed to file a registration statement with the SEC, to register for resale the common stock issuable upon the conversion of the August 2024 Preferred Stock. The registration statement was filed with the SEC on August 30, 2024.
All of the August 2024 Preferred Stock was redeemed in September 2024. As a result of the redemption of the August 2024 Preferred Stock, the Company presented a deemed dividend of $
| Series A Convertible Preferred Stock and Common Stock Purchase Warrants |
Amendments to Series A Convertible Preferred Stock
| Determination of Conversion Price Adjustments for Series A Preferred Stock |
On December 9, 2022, the Company and 3i entered into a letter agreement (the “2022 Letter Agreement”) which provided that pursuant to Section 8(g) of the Company’s Certificate of Designations for the Series A Preferred Stock (the “COD”), the Company and 3i agreed that the Conversion Price (as defined in the COD) was modified to mean the lower of: (i) the Closing Sale Price (as defined in the COD) on the trading date immediately preceding the Conversion Date (as defined in the COD) and (ii) the average Closing Sale Price (as defined in the COD) of the common stock for the five trading days immediately preceding the Conversion Date (as defined in the COD), for the Trading Days (as defined in the COD) through and inclusive of January 19, 2023. Any conversion which occurs shall be voluntary at the election of 3i, which shall evidence its election as to the Series A Preferred Stock being converted in writing on a conversion notice setting forth the then Minimum Price (as defined in the COD). Management determined that the adjustment made to the Conversion Price is not a modification of the COD which allows for adjustments to the Conversion Price (as defined in the COD) at any time by the Company and the other terms of the COD remained unchanged.
On January 23, 2023, the Company and 3i amended the 2022 Letter Agreement, to provide that the modification of the term Series A Preferred Stock Conversion Price (the “Series A Preferred Stock Conversion Price”) to mean the lower of: (i) the Closing Sale Price (as defined in the COD) on the trading date immediately preceding the Conversion Date (as defined in the COD and (ii) the average Closing Sale Price (as defined in the COD) of the Company’s shares of common stock for the five trading days immediately preceding the Conversion Date (as defined in the COD), for the Trading Days (as defined in the COD) will be in effect until terminated by the Company and 3i.
| Modification to Conversion Price of Series A Preferred Stock and 3i Exchange Warrants |
On January 14, 2024, pursuant to the terms of the First Note, the Company modified the conversion price of the 3i Exchange Warrants from $
On February 13, 2024, pursuant to the terms of the Second Note, the Company modified the conversion price of the 3i Exchange Warrants from $
On March 14, 2024, pursuant to the terms of the Third Note, the Company modified the conversion price of the 3i Exchange Warrants from $
During the period April 1, 2024, through May 2, 2024, the Company amended the conversion prices of the Series A Convertible Preferred Stock, the Exchange Warrants and the 2024 Notes to equal the current last sale price of its shares of common stock of $
Accounting
| Series A Preferred Stock |
As a result of fair value adjustments during the nine months ended September 30, 2024, the Company recognized a deemed dividend of $
| January 14 – March 14, | April 5 – May 2, | |||||||
| 2024 | 2024 | |||||||
| Initial exercise price | | | ||||||
| Stock price on valuation date | | | ||||||
| Risk-free rate | ||||||||
| Term (in years) | ||||||||
| Rounded annual volatility | ||||||||
| 3i Exchange Warrants |
The 3i Exchange Warrants were identified as a freestanding financial instrument and meet the criteria for derivative liability classification, initially measured at fair value. Subsequent changes in fair value are recognized through earnings for as long as the contracts continue to be classified as a liability. The measurement of fair value is determined utilizing an appropriate valuation model considering all relevant assumptions current at the date of issuance and at each reporting period (i.e., share price, exercise price, term, volatility, risk-free rate and expected dividend rate).
Series A Preferred Stock and 3i Exchange Warrant Conversions
During the nine months ended September 30, 2024:
| (a) | 3i exercised its option to convert |
| (b) | 3i exercised its option to convert |
During the nine months ended September 30, 2023, 3i exercised its option to convert
The accounting for the Series A Preferred Stock and Warrants is illustrated in the tables below:
| Consolidated | ||||||||||||||||||||
| Statement of | ||||||||||||||||||||
| Operations & | ||||||||||||||||||||
| Comprehensive | ||||||||||||||||||||
| Consolidated Balance Sheets | Loss | |||||||||||||||||||
| Fair value | ||||||||||||||||||||
| Series A Convertible | adjustment to | |||||||||||||||||||
| Series A | Redeemable | Additional | derivative | |||||||||||||||||
| Warrant | Preferred | Preferred | paid-in | and warrant | ||||||||||||||||
| ($ in thousands) | liability | Stock | Stock | capital | liabilities | |||||||||||||||
| Balances, December 31, 2023 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Conversion of Series A Preferred Stock, net | ( | ) | ||||||||||||||||||
| Extinguishment of Series A Preferred Stock | ( | ) | ||||||||||||||||||
| Deemed dividend on January 14, 2024, modification | ( | ) | ||||||||||||||||||
| Fair value adjustment | ( | ) | — | |||||||||||||||||
| Balances, March 31, 2024 | ( | ) | ||||||||||||||||||
| Conversion of Series A Preferred Stock, net | ( | ) | ||||||||||||||||||
| Extinguishment of Series A Preferred Stock | ( | ) | ||||||||||||||||||
| Deemed dividend on modification of Series A Preferred Stock | ( | ) | ||||||||||||||||||
| Cashless exercise of 3i Exchange Warrants | ( | ) | ||||||||||||||||||
| Fair value adjustment | ( | ) | — | |||||||||||||||||
| Balances, June 30, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
| Fair value adjustment | ( | ) | ||||||||||||||||||
| Issuance of redeemable preferred stock | — | — | — | — | ||||||||||||||||
| Redemption of redeemable preferred stock | ( | ) | ||||||||||||||||||
| Deemed dividend on redeemable preferred stock | ( | ) | ||||||||||||||||||
| Balances, September 30, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
| Consolidated | ||||||||||||||||||||
| Statement of | ||||||||||||||||||||
| Operations & | ||||||||||||||||||||
| Comprehensive | ||||||||||||||||||||
| Consolidated Balance Sheets | Loss | |||||||||||||||||||
| Series A | ||||||||||||||||||||
| Preferred | Fair value | |||||||||||||||||||
| Convertible | adjustment to | |||||||||||||||||||
| Stock – | Series A | Additional | derivative | |||||||||||||||||
| Warrant | Mezzanine | Preferred | paid-in | and warrant | ||||||||||||||||
| ($ in thousands) | liability | Equity | Stock | capital | liabilities | |||||||||||||||
| Balances, December 31, 2022 | $ | 374 | $ | 2,001 | $ | — | $ | (3,756 | ) | $ | — | |||||||||
| Conversion of Series A Preferred Stock, net | ( | ) | ||||||||||||||||||
| Fair value adjustment | ( | ) | — | |||||||||||||||||
| Balances, March 31, 2023 | ( | ) | ||||||||||||||||||
| Conversion of Series A Preferred Stock | ( | ) | ( | ) | ||||||||||||||||
| Elimination of redemption rights on Series A Preferred stock; deemed dividend of $ | ( | ) | ( | ) | ||||||||||||||||
| Redemption of Series A Preferred Stock | ( | ) | — | |||||||||||||||||
| Issuance of Series A Preferred stock as repayment of $ debt; $ charged to interest expense | — | — | — | — | ||||||||||||||||
| Exchange of Series C Preferred Stock for Series A Preferred Stock; deemed dividend of $ | ( | ) | ||||||||||||||||||
| Fair value adjustment | — | ( | ) | |||||||||||||||||
| Balances, June 30, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||
| July 10, 2023 modification | ( | ) | ||||||||||||||||||
| Redemption of Series A Preferred stock | ( | ) | ( | ) | ||||||||||||||||
| September 14, 2023 modification | ( | ) | ||||||||||||||||||
| Fair value adjustment | ( | ) | ||||||||||||||||||
| Balances, September 30, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||
Series C Convertible Preferred Stock
On February 28, 2023, the Company entered into a Securities Purchase Agreement (the “2023 SPA”) with 3i for the purchase and sale of
The Company evaluated the terms of the Series C Preferred Stock as required pursuant to ASC 570, 480, 815 and ASU 2020-06, and concluded the Series C Preferred Stock fair value to be $
The Company treated the exchange of Series C Preferred Stock for Series A Preferred Stock as an extinguishment as there has been a fundamental change in the nature of the instrument and applied the derecognition accounting model in ASC 260-10-S99-2. Accordingly, the Company had recognized the difference between (1) the fair value of the consideration transferred to the holders of the preferred shares of $
8. Derivative Liabilities
| Continuity of Common Share Purchase Warrant and 3i Warrant Derivative Liabilities |
Warrant liabilities are categorized within Level 3 of the fair value hierarchy and are measured at fair value on a recurring basis as follows (in thousands):
The Common Share Purchase Warrants, comprised of warrants issued in April 2023, July 2023, and September 2023, and 3i Exchange Warrant derivative liabilities are measured at fair value at each reporting period and the reconciliation of changes in fair value during the year ended December 31, 2023, and during the nine months ended September 30, 2024, is presented in the following tables:
| Common | ||||||||
| Share | ||||||||
| Purchase | 3i Exchange | |||||||
| ($ in thousands) | Warrants | Warrants | ||||||
| Balance as of January 1, 2023 | $ | $ | ||||||
| Issuance date fair value of April, July & September 2023 Common share purchase warrants | ||||||||
| Modifications to fair value upon exercise | ||||||||
| Change in fair value adjustment of derivative and warrant liabilities | ( | ) | ||||||
| Amount transferred to Equity | ( | ) | ( | ) | ||||
| Balance as of December 31, 2023 | $ | $ | ||||||
| Fair value per Common warrant / 3i Warrant / issuable at December 31, 2023 | $ | $ | ||||||
| Common | ||||||||
| Share | ||||||||
| Purchase | 3i Exchange | |||||||
| ($ in thousands) | Warrants | Warrants | ||||||
| Balance at January 1, 2024 | $ | $ | ||||||
| Change in fair value adjustment of derivative and warrant liabilities | ( | ) | ( | ) | ||||
| Cashless conversion of 3i Exchange Warrants | ( | ) | ||||||
| Balance at September 30, 2024 | $ | $ | ||||||
| Fair value per Common warrant issuable at September 30, 2024 | $ | $ | ||||||
| Common Share Purchase Warrants – Valuation Inputs |
On September 30, 2024, the Company used the Black-Scholes Merton model to estimate the fair value of the Common Share Purchase Warrants derivative liability at $
| September 2023 | ||||||||||||
| April 2023 | July 2023 | Inducement | ||||||||||
| Warrants | Warrants | Warrants | ||||||||||
| Initial exercise price | $ | $ | $ | |||||||||
| Stock price on valuation date | $ | $ | $ | |||||||||
| Risk-free rate | % | % | % | |||||||||
| Term (in years) | ||||||||||||
| Rounded annual volatility | % | % | % | |||||||||
3i Exchange Warrants - Valuation Inputs
On September 30, 2023, the Company utilized the reset strike options Type 2 model by Espen Garder Haug and Black-Scholes Merton models to estimate the fair value of the 3i Warrants to be approximately $
| September 30, | ||||
| 2023 | ||||
| Initial exercise price | $ | |||
| Stock price on valuation date | $ | |||
| Risk-free rate | % | |||
| Expected life of the Warrant to convert (years) | ||||
| Rounded annual volatility | % | |||
| Timing of liquidity event | Q4 - 2023 | |||
| Expected probability of event | % | |||
9. Stockholders’ Equity
Common Stock
On September 9, 2024, the Company filed the Sixth Certificate of Amendment to the Certificate of Incorporation with the Delaware Secretary of State to decrease the number of authorized shares from,
Reverse Stock Splits
On April 4, 2024, the Company filed a Fifth Certificate of Amendment to the Certificate of Incorporation with the Delaware Secretary of State to effect a 1-for-
On September 9, 2024, the Company filed the Seventh Certificate of Amendment with the Secretary of State of the State of Delaware to effect a 1-for-
All share and per share information has been retroactively adjusted to give effect to the April Reverse Stock Split and September Reverse Stock Split for all periods presented, unless otherwise indicated.
2023 Shelf
On November 2, 2023, the Company filed a shelf registration statement (File No. 333-275282) on Form S-3, which was declared effective on November 29, 2023 (the "Shelf"). Approximately $
ATM Facility
On March 19, 2024, the Company entered into an At-The-Market Issuance Sales Agreement, as amended (the “Sales Agreement”) with Ascendiant Capital Markets, LLC (“Ascendiant”) pursuant to which, the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, par value $
Under the Sales Agreement, Ascendiant may sell shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act. Ascendiant will use commercially reasonable efforts to sell the shares from time to time, based upon instructions from the Company (including any price, time or size limits or other customary parameters or conditions the Company may impose). The Company agreed to pay Ascendiant a commission of
For the three and nine months ended September 30, 2024, the Company sold an aggregate of
Series A Preferred Stock
During the six months ended June 30, 2024, 3i exercised its option to convert
Exchange Warrants
3i converted
Settlement Agreement
In accordance with the terms of the settlement agreement between the Company and James G. Cullem, the Company's former CEO, the Company issued
Equity Incentive Plan
The Company has in effect the Allarity Therapeutics, Inc. 2021 Incentive Plan (as amended, the “2021 Incentive Plan"). Under the 2021 Incentive Plan, the compensation committee of the Company’s board of directors is authorized to grant stock-based awards to employees, directors, consultants, independent contractors and advisors. The 2021 Incentive Plan authorizes grants to issue up to
At the 2024 Annual Meeting of Stockholders of the Company held on September 3, 2024, the Company’s stockholders, upon the recommendation of the Company’s board of directors, approved an amendment to the 2021 Incentive Plan, as amended, to increase the aggregate number of shares of the Company's common stock authorized for grant under the 2021 Incentive Plan from
The number of shares available for grant and issuance under the 2021 Incentive Plan will be increased on January 1st of each of 2022 through 2031, by the lesser of (a)
Total shares available for the issuance of stock-based awards under the Company’s 2021 Incentive Plan was
The Company granted inducement awards consisting of
Restricted Stock Units
The following table summarizes the restricted stock unit activity during the nine months ended September 30, 2024:
| Weighted | ||||||||
| Number of | Average Grant | |||||||
| Units | Date Fair Value | |||||||
| Unvested balance at December 31, 2023 | ||||||||
| Granted | $ | |||||||
| Unvested balance at September 30, 2024 | $ | |||||||
At September 30, 2024, the Company had unrecognized stock-based compensation expense related to restricted stock awards of $
Stock Options
The following table summarizes stock option activity during the nine months ended September 30, 2024:
| Weighted | ||||||||||||||||
| Average | ||||||||||||||||
| Weighted | Remaining | Aggregate | ||||||||||||||
| Number | Average | Contractual | Intrinsic Value | |||||||||||||
| of Options | Exercise Price | Term (years) | (in thousands) | |||||||||||||
| Outstanding at December 31, 2023 | $ | |||||||||||||||
| Cancelled/forfeited | ( | ) | — | |||||||||||||
| Outstanding at September 30, 2024 | $ | 4,699,177 | 2.7 | — | ||||||||||||
| Expected to vest | $ | |||||||||||||||
| Exercisable | $ | |||||||||||||||
There were
Stock-based compensation expense has been reported in the Company's condensed consolidated statements of operations as follows:
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| ($ in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Research and development | $ | $ | $ | $ | ||||||||||||
| General and administrative | ( | ) | ||||||||||||||
| Total stock-based compensation expense | $ | $ | $ | $ | ||||||||||||
10. License and Development Agreements
License Agreement with Novartis for Dovitinib
On January 26, 2024, the Company received a termination notice from Novartis due to a material breach of the License Agreement. Accordingly, under the terms of the License Agreement, the Company ceased all development and commercialization activities with respect to all licensed products, all rights and licenses granted by Novartis to the Company reverted to Novartis; and all liabilities due to Novartis became immediately due and payable inclusive of interest which is continuing to accrue at
License Agreement with Eisai Inc. for Stenoparib
The Company holds the exclusive worldwide rights to all preventative, therapeutic and/or diagnostic uses related to cancer in humans and by amendment to the agreement on December 11, 2020, viral infections in humans (including, but not limited to, coronaviruses) for stenoparib from Eisai, Inc. (“Eisai”) pursuant to a license agreement (the “Eisai License Agreement”). Pursuant to the Eisai License Agreement, the Company is solely responsible for the development of stenoparib during the term of the Eisai License Agreement. Eisai License Agreement also provides for a joint development committee consisting of six members, three appointed by the Company and three appointed by Eisai. One of the Company’s members of the joint development committee is designated chair of the committee and has the power to break any deadlock in decisions by the committee that must be made by a majority vote with each representative having one vote. The purpose of the committee is to implement and oversee development activities for stenoparib pursuant to the clinical development plan, serving as a forum for exchanging data, information and development strategy.
Effective July 12, 2022, the Company’s July 6, 2017 Exclusive License Agreement with Eisai Inc. (the “Third Amendment”), the terms of the original exclusive license were further amended in order to (1) further postpone the due date of the extension payment and extend the deadline for the Company’s successful completion of its first Phase 1b or Phase 2 clinical trial for stenoparib beyond December 31, 2022; and (2) amend terms related to Eisai’s right of termination of development.
On May 26, 2023, the Company and Eisai entered into a fourth amendment to the Exclusive License Agreement with an effective date of May 16, 2023, to postpone the extension payment, restructure the payment schedule and extend the deadline to complete enrollment in a further Phase 1b or Phase 2 Clinical Trial for the stenoparib. The Company agreed to pay Eisai in periodic payments as follows: (i) $
On February 26, 2024, in exchange for an additional $
On August 2, 2024, the Company and Eisai entered into a sixth amendment to the Exclusive License Agreement with an effective date of August 2, 2024. The terms of the amended exclusive license were further amended in order to (1) amend the definition of a successful completion and (2) amend the terms related to Eisai's right of termination for development.
Development Milestone Payments
The Company has agreed to make milestone payments to Eisai in connection with the development of stenoparib by the Company or its affiliates, or by a third-party program acquirer that assumes control of the stenoparib development program from the Company corresponding to: (i) successful completion of a Phase 2 clinical trial; (ii) upon dosing of the first patient in the first Phase 3 clinical trial; (iii) upon submission of the first NDA with the FDA; (iv) submission of an MAA to the EMA; (v) submission of an NDA to the MHLW in Japan; (vi) upon receipt of authorization by the FDA to market and sell a licensed product; (vii) upon receipt of approval of an MAA by the EMA for a licensed product; and (viii) upon receipt of approval by the MHLW in Japan for a licensed product. If all milestones have been achieved, the Company may be obligated to pay Eisai up to a maximum of $
Royalty Payments
In addition to the milestone payments described above, the Company has agreed to pay Eisai royalties based on annual incremental sales of product derived from stenoparib in an amount between
The Company is obligated to pay royalties under the agreement on a country-by-country and product-by-product basis for a period that commences with the first commercial sale of a product in such country and expiring on the later of (i) the expiration of the last valid claim of any and all Eisai patents, OV patents and joint patents covering such product in such country; or, (ii) the 15 year anniversary of the date of first commercial sale of such licensed product in such country. However, the agreement may be terminated sooner without cause by the Company upon 120 days prior written notice, or upon written notice of a material breach of the agreement by Eisai that is not cured within 90 days (30 days for a payment default).
Eisai also has the right to terminate the agreement upon written notice of a material breach of the agreement by the Company that is not cured within 90 days (30 days for a payment default) or if the Company files for bankruptcy.
Option to Reacquire Rights to Stenoparib
For the period commencing with enrollment of the first five patients in a Phase 2 clinical trial pursuant to the clinical development plan and ending 90 days following successful completion of such Phase 2 clinical trial, Eisai has the option to reacquire the Company's licensed rights to develop stenoparib for a purchase price equal to the fair market value of the Company's rights, giving effect to the stage of development of stenoparib that the Company has completed under the agreement. The Company commenced a Phase 2 clinical trial April 15, 2019, and as of the date of the Financial Statements, Eisai has not indicated an intention to exercise its repurchase option.
11. Related party
During the three and nine months ended September 30, 2024, Thomas H. Jensen, a director of the Company, was paid $
During the three and nine months ended September 30, 2023, Thomas H. Jensen was paid $
12. Loss per share of common stock
Basic loss per share is derived by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share includes the effect, if any, of the potential exercise or conversion of securities, such as warrants and stock options, which would result in the issuance of incremental shares of common stock unless such effect is anti-dilutive. In calculating the basic and diluted net loss per share applicable to common stockholders, the weighted average number of shares remained the same for both calculations because when a net loss exists, dilutive shares are not included in the calculation. Potentially dilutive securities outstanding, as determined by the latest applicable conversion price, that have been excluded from diluted loss per share due to being anti-dilutive include the following:
| As of September 30, | ||||||||
| 2024 | 2023 | |||||||
| Warrants | ||||||||
| Options | ||||||||
| Unvested restricted stock units | ||||||||
| Series A Convertible Preferred stock | ||||||||
13. Financial Instruments
The following tables present information about the Company’s financial instruments measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values:
| Fair Value Measurements as of September 30, 2024 | ||||||||||||||||
| ($ in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Liabilities: | ||||||||||||||||
| Warrant liability | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
| $ | $ | $ | ( | ) | $ | ( | ) | |||||||||
| Fair Value Measurements as of December 31, 2023 | ||||||||||||||||
| ($ in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Liabilities: | ||||||||||||||||
| Warrant liability | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
| Derivative warrant liability | ( | ) | ( | ) | ||||||||||||
| $ | $ | $ | ( | ) | $ | ( | ) | |||||||||
Methods used to estimate the fair values of the Company's financial instruments, not disclosed elsewhere in the Financial Statements, are as follows:
When available, the Company’s marketable securities are valued using quoted prices for identical instruments in active markets. If the Company is unable to value its marketable securities using quoted prices for identical instruments in active markets, the Company values its investments using broker reports that utilize quoted market prices for comparable instruments. The Company has no financial assets or liabilities measured using Level 2 inputs. Financial assets and liabilities are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies, or similar techniques, and at least one significant model assumption or input is unobservable.
The Company recognizes its derivative liabilities as Level 3 and values its derivatives using the methods described in Note 8. While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The primary assumptions that would significantly affect the fair values using terms in the notes that are subject to volatility and market price of the underlying shares of common stock.
The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. The Company’s policy is to recognize transfers into and out of levels within the fair value hierarchy at the date the actual event or change in circumstances that caused the transfer occurs. When a determination is made to classify an asset or liability within Level 3, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement. There were no transfers between Level 1 or Level 2 during the nine months ended September 30, 2024 and 2023.
14. Commitments and Contingencies
Indemnification
In accordance with its certificate of incorporation, bylaws, and indemnification agreements, the Company has indemnification obligations to its officers and directors for certain events or occurrences, subject to certain limits, while they are serving at the Company's request in such capacity.
SEC Investigation
On July 19, 2024, the Company received a “Wells Notice” from the Staff of the SEC relating to the Company’s previously disclosed SEC investigation. The Wells Notice relates to the Company’s disclosures regarding meetings with the United States Food and Drug Administration (the “FDA”) regarding the Company’s NDA for Dovitinib or Dovitinib-DRP, which was submitted to the FDA in 2021. The Company understands that all conduct relating to the SEC Wells Notice occurred during or prior to fiscal year 2022. The Company also understands that three of its former officers received Wells Notices from the SEC relating to the same conduct. A Wells Notice is neither a formal charge of wrongdoing nor a final determination that the recipient has violated any law. The Wells Notice informed the Company that the SEC Staff has made a preliminary determination to recommend that the SEC file an enforcement action against the Company that would allege certain violations of the federal securities laws. The Company is continuing to cooperate with the SEC and maintains that its actions were appropriate, and pursuing the Wells Notice process.
Nasdaq Delisting Notifications
On June 18, 2024, the Company received a letter from the Nasdaq Listing Qualifications Staff (the “Staff”) of Nasdaq indicating that the Company has not complied with the Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”) which is the requirement that for 30 consecutive business days the bid price for the Company’s common stock close above the $1 per share minimum bid price requirement for continued inclusion on Nasdaq. On July 30, 2024, the Company attended a hearing before a Nasdaq Hearings Panel (the "Panel"), and by decision date August 15, 2024, the Panel granted the Company's request for an extension through September 6, 2024 to obtain shareholder approval for a reverse split at a ratio that will allow the Company to demonstrate compliance with the Bid Price Rule. This approval was granted by Allarity's shareholders at the Company's Annual Meeting of Stockholders on September 3, 2024. On October 9, 2024, the Company was formally notified by the Staff that the Company has evidenced compliance with the Bid Price Requirement for continued listing on the Nasdaq, as set forth in Nasdaq Listing Rule 5550(a)(2).
Class Action
On September 13, 2024, a purported class action captioned Osman Mukeljic v. Allarity Therapeutics, Inc., et al, 1:24-cv-06952, was filed in the United States District Court for the Southern District of New York against the Company and certain of its current and former officers. The complaint alleges, among other things, that defendants made false and misleading statements and/or failed to disclose information related to Dovitinib NDA’s continued regulatory prospects and purported misconduct in connection with the Dovitinib NDA and/or the Dovitinib-DRP PMA. The complaint asserts violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder against all defendants as well as violations of Section 20(a) of the Exchange Act of 1934 against the individual defendants. The Company believes that the class action is without merit and plans to vigorously defend itself against these claims. At this time, there can be no assurance that the Company will prevail in the lawsuits and the Company cannot currently estimate the possible loss or range of losses, if any, that it may experience in connection with this litigation.
15. Subsequent Events
For its Financial Statements as of September 30, 2024, and for the three months then ended, the Company evaluated subsequent events through the date on which the Financial Statements were issued. All subsequent events not disclosed elsewhere in this Quarterly Report are disclosed below.
ATM Facility
During the period October 1, 2024 through November 13, 2024, the Company had sold
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-Looking Statements
You should read the following discussion and analysis of our financial condition and results of operations together with “Cautionary Note Regarding Forward-Looking Statements” and our condensed consolidated financial statements and related notes included under Item 1 of this Quarterly Report as well as our most recent Annual Report on Form 10-K for the year ended December 31, 2023, as amended, including Part 1, Item 1A “Risk Factors.”
The forward-looking statements contained in this report reflect our views and assumptions as of the effective date of this report. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. Except as required by law, we assume no responsibility for updating any forward-looking statements to reflect events or circumstances that may arise after the date of this report, except as required by applicable law.
We qualify all of our forward-looking statements by these cautionary statements. In addition, with respect to all of our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Overview
We are a biopharmaceutical company focused on discovering and currently developing a highly targeted anti-cancer drug candidate. Through the use of our Drug Response Predictor (DRP®) platform, we identify the value in drug assets that have otherwise been discontinued by identifying patient populations where these drugs are active. Our lead drug candidate, stenoparib, is a small molecule dual inhibitor of the poly-ADP-ribose polymerase (PARP 1/2) as well as tankyrase 1/2.
Recent Developments
Nasdaq Delisting Notifications
On June 18, 2024, we received a letter from the Nasdaq Listing Qualifications Staff (the “Staff”) of Nasdaq indicating that the we have not complied with the Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”) which is the requirement that for 30 consecutive business days the bid price for our common stock close above the $1 per share minimum bid price requirement for continued inclusion on the Nasdaq Capital Market ("Nasdaq"). On June 27, 2024, we were granted a hearing before a Nasdaq Hearings Panel (the "Panel"). On July 30, 2024, we attended a hearing before the Panel, and by decision date August 15, 2024, the Panel granted our request for an extension through September 6, 2024 to obtain shareholder approval for a reverse split at a ratio that will allow us to demonstrate compliance with the Bid Price Rule. This approval was granted by our shareholders at our Annual Meeting of Stockholders on September 3, 2024. On October 9, 2024, we were formally notified by Nasdaq that we have evidenced compliance with the Bid Price Requirement for continued listing on the Nasdaq, as set forth in Nasdaq Listing Rules 5550(a)(2).
Reverse Stock Splits
On April 4, 2024, we effected a 1-for-20 reverse stock split (the "April Reverse Stock Split") of the shares of common stock effective as of April 9, 2024. No fractional shares were issued in connection with the April Reverse Stock Split. If, as a result of the April Reverse Stock Split, a stockholder would otherwise have been entitled to a fractional share, each fractional share was rounded up to the next whole number. The April Reverse Stock Split resulted in a reduction of our outstanding shares of common stock as of March 31, 2024, from 228,487 to 11,426. The par value of our authorized stock remained unchanged at $0.0001.
On September 9, 2024, we effected a 1-for-30 reverse stock split (the "September Reverse Stock Split") of the shares of common stock, effective September 11, 2024. As a result of the September Reverse Stock Split, every 30 shares of common stock outstanding immediately prior to effectiveness of the September Reverse Stock Split were combined and converted into one share of common stock without any change in the par value per share. The September Reverse Stock Split became effective on September 11, 2024, and the common stock was quoted on the Nasdaq Stock Market on a post-split basis at the open of business on September 11, 2024. No fractional shares were issued in connection with the September Reverse Stock Split. Stockholders who would have otherwise been entitled to a fraction of one share of common stock as a result of the September Reverse Stock Split instead received one whole share of common stock. We issued 97,190 shares of common stock to shareholders who had been entitled to a fraction of one share.
All share and per share information has been retroactively adjusted to give effect to the April Reverse Stock Split and September Reverse Stock Split for all periods presented, unless otherwise indicated.
ATM Facility
On March 19, 2024, we entered into an At-The-Market Issuance Sales Agreement, as amended (the "Sales Agreement") with Ascendiant Capital Markets, LLC ("Ascendiant") under which we may offer and sell, from time to time at our sole discretion, shares of our common stock, par value $0.0001 per share, having an aggregate gross sales price of up to $50 million, to or through the Ascendiant. The offer and sales of the shares are made pursuant to a previously filed shelf registration statement on Form S-3 (File No. 333-275282), originally filed with the Securities and Exchange Commission (the "SEC") on November 2, 2023 and declared effective on November 29, 2023, and the related prospectus supplement dated September 9, 2024 and filed with the SEC on such date. We will pay the Ascendiant a commission of 3.0% of the gross proceeds from the sales of shares sold through Ascendiant under the Sales Agreement. We will also reimburse the Ascendiant for certain expenses incurred in connection with the Sales Agreement. Both we and Ascendiant may each terminate the Sales Agreement at any time upon specified prior written notice. For the three months ended September 30, 2024, we sold an aggregate of 1,493,878 shares of our common stock pursuant to the Sales Agreement, resulting in net proceeds of approximately $5.4 million after deducting underwriting discounts.
August 2024 Series A Convertible Redeemable Preferred Stock
On August 19, 2024 (the "Closing Date") we entered into a Securities Purchase Agreement (the “August 2024 SPA”) with certain purchasers (the “August 2024 Purchasers”), pursuant to which we issued and sold, in a private placement (the “August 2024 Offering”), 35,000 shares of our Series A Convertible Redeemable Preferred Stock, par value $0.0001 per share (the “August 2024 Preferred Stock”), for net proceeds of approximately $2.9 million in the aggregate for the August 2024 Offering, after the deduction of discounts, fees and offering expenses.
On the Closing Date, we filed a certificate of designation (the “August 2024 COD”) with the Secretary of the State of Delaware designating the rights, preferences and limitations of the August 2024 Preferred Stock. Under the August 2024 COD, for purposes of determining the presence of a quorum at any meeting of the stockholders of Allarity at which the August 2024 Preferred Stock are entitled to vote and the voting power of the August 2024 Preferred Stock, each holder of the August 2024 Preferred Stock shall be entitled to a number of votes equal to shares of our common stock into which such August 2024 Preferred Stock are then convertible, disregarding, for such purposes, any limitations on conversion. The August 2024 Preferred Stock shall be entitled to vote on each matter submitted to a vote of the stockholders generally and shall vote together with the common stock and any other class or series of capital stock entitled to vote thereon as a single class and on an as converted to the common stock basis.
The holders of the August 2024 Preferred Stock are entitled to dividends, on an as-if converted basis, equal to dividends actually paid, if any, on the common stock. The August 2024 Preferred Stock is convertible, at the option of the holders and, in certain circumstances, by us, into common stock, as determined by dividing the net purchase price of $90 per share by the conversion price of $5.10, at the option of the holders.
On the Closing Date, we entered into a Registration Rights Agreement (the “August 2024 RRA”) with the August 2024 Purchasers, pursuant to which we agreed to file a registration statement with the SEC, to register for resale the common stock issuable upon the conversion of the August 2024 Preferred Stock. The registration statement was filed with the SEC on August 30, 2024.
In connection with the August 2024 Offering, we paid $0.2 million to Ascendiant Capital Markets, LLC, our placement agent.
SEC Investigation
On July 19, 2024, we received a “Wells Notice” from the Staff of the SEC relating to our previously disclosed SEC investigation. The Wells Notice relates to our disclosures regarding meetings with the United States Food and Drug Administration (the “FDA”) regarding our NDA for Dovitinib or Dovitinib-DRP, which was submitted to the FDA in 2021. We understand that all conduct relating to the SEC Wells Notice occurred during or prior to fiscal year 2022. We also understand that three of our former officers received Wells Notices from the SEC relating to the same conduct. A Wells Notice is neither a formal charge of wrongdoing nor a final determination that the recipient has violated any law. The Wells Notice informed us that the SEC Staff has made a preliminary determination to recommend that the SEC file an enforcement action against us that would allege certain violations of the federal securities laws. We are continuing to cooperate with the SEC and maintains that our actions were appropriate, and pursuing the Wells Notice process.
Class Action
On September 13, 2024, a purported class action captioned Osman Mukeljic v. Allarity Therapeutics, Inc., et al, 1:24-cv-06952, was filed in the United States District Court for the Southern District of New York against us and certain of our current and former officers. The complaint alleges, among other things, that defendants made false and misleading statements and/or failed to disclose information related to Dovitinib NDA’s continued regulatory prospects and purported misconduct in connection with the Dovitinib NDA and/or the Dovitinib-DRP PMA. The complaint asserts violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder against all defendants as well as violations of Section 20(a) of the Exchange Act of 1934 against the individual defendants. We believe that the class action is without merit and plan to vigorously defend ourselves against these claims. At this time, there can be no assurance that we will prevail in the lawsuits and we cannot currently estimate the possible loss or range of losses, if any, that it may experience in connection with this litigation.
Risks and Uncertainties
We are subject to risks common to companies in the biotechnology industry, including but not limited to, risks of failure of preclinical studies and clinical trials, the need to obtain marketing approval for any drug product candidate that we may identify and develop, the need to successfully commercialize and gain market acceptance of our product candidate, dependence on key personnel and collaboration partners, protection of proprietary technology, compliance with government regulations, development by competitors of technological innovations, and the ability to secure additional capital to fund operations. Our product candidate currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval prior to commercialization. Even if our research and development efforts are successful, it is uncertain when, if ever, we will realize significant revenue from product sales.
Recently Issued Accounting Pronouncements
See Note 2, “Summary of Significant Accounting Policies”, to our unaudited condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of recent accounting pronouncements.
Financial Operations Overview
Since our inception in September of 2004, we have focused substantially all our resources on conducting research and development activities, including drug discovery and preclinical studies, establishing, and maintaining our intellectual property portfolio, the manufacturing of clinical and research material, hiring personnel, raising capital and providing general and administrative support for these operations. In recent years, we have recorded very limited revenue from collaboration activities, or any other sources. We have funded our operations to date primarily from convertible notes and the issuance and sale of our ordinary shares.
We have incurred net losses in each year since inception. Our net losses were $17.1 million and $10.2 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $111.5 million and cash and cash equivalents of $18.5 million. Substantially all our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to continue to incur significant expenses and increasing operating losses over at least the next several years. We expect our expenses will increase substantially in connection with our ongoing activities, as we:
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advance our drug candidate through clinical trials; |
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pursue regulatory approval of our drug candidate; |
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operate as a public company; |
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continue our preclinical programs and clinical development efforts; |
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continue research activities for the discovery of new drug candidates; and |
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manufacture supplies for our preclinical studies and clinical trials. |
Components of Operating Expenses
Research and Development Expenses
Research and development expenses include:
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expenses incurred under agreements with third-party contract organizations, and consultants; |
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costs related to production of drug substance, including fees paid to contract manufacturers; |
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laboratory and vendor expenses related to the execution of preclinical trials; and |
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employee-related expenses, which include salaries, benefits, and stock-based compensation. |
We expense all research and development costs in the periods in which they are incurred. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks and estimates of services performed using information and data provided to us by our vendors and third-party service providers. Non-refundable advance payments for goods or services to be received in future periods for use in research and development activities are deferred and accounted for as prepaid expenses. The prepayments are then expensed as the related goods are delivered and as services are performed. To date, most of these expenses have been incurred to advance our lead drug candidate stenoparib.
We expect our research and development expenses on stenoparib to increase substantially for the foreseeable future as we continue to invest to accelerate stenoparib in clinical trials designed to attain regulatory approval. Costs related to dovitinib and IXEMPRA will decrease precipitously as these have been deprioritized/terminated. We expect additional costs in research and development activities as we continue to conduct clinical trials. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our drug candidate is highly uncertain. As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of any of our drug candidate.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel-related costs, facilities costs, depreciation and amortization expenses and professional services expenses, including legal, human resources, audit, and accounting services. Personnel-related costs consist of salaries, benefits, travel, insurance and stock-based compensation. Facilities costs consist of rent and maintenance of facilities. We expect our general and administrative expenses to increase for the foreseeable future due to anticipated increases in headcount to advance our drug candidate and as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC, Nasdaq, additional insurance expenses, investor relations activities and other administrative and professional services.
Results of Operations
Comparison of the Three and Nine Months Ended September 30, 2024 and 2023 (unaudited)
| Three Months Ended |
Nine Months Ended |
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| September 30, |
Increase/ |
September 30, |
Increase/ |
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| ($ in thousands) |
2024 | 2023 | (Decrease) | 2024 | 2023 | (Decrease) | ||||||||||||||||||
| Operating costs and expenses: |
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| Research and development |
$ | 1,021 | $ | 1,948 | $ | (927 | ) | $ | 4,249 | $ | 4,480 | $ | (231 | ) | ||||||||||
| Impairment of intangible assets |
9,703 | — | 9,703 | 9,703 | — | 9,703 | ||||||||||||||||||
| General and administrative |
1,589 | 2,478 | (889 | ) | 5,972 | 7,770 | (1,798 | ) | ||||||||||||||||
| Total operating costs and expenses |
12,313 | 4,426 | 7,887 | 19,924 | 12,250 | 7,674 | ||||||||||||||||||
| Loss from operations: |
(12,313 | ) | (4,426 | ) | (7,887 | ) | (19,924 | ) | (12,250 | ) | (7,674 | ) | ||||||||||||
| Other income (expense): |
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| Interest income |
261 | 12 | 249 | 314 | 19 | 295 | ||||||||||||||||||
| Interest expense |
(50 | ) | (34 | ) | (16 | ) | (578 | ) | (268 | ) | (310 | ) | ||||||||||||
| Foreign exchange (losses) gains |
121 | (156 | ) | 277 | 69 | (87 | ) | 156 | ||||||||||||||||
| Fair value of New September Warrants |
— | (4,189 | ) | 4,189 | — | (4,189 | ) | 4,189 | ||||||||||||||||
| Fair value of modification to April & July 2023 Warrants |
— | (591 | ) | 591 | — | (591 | ) | 591 | ||||||||||||||||
| Change in fair value of derivative and warrant liabilities |
14 | 4,937 | (4,923 | ) | 2,676 | 7,187 | (4,511 | ) | ||||||||||||||||
| Total other income (expense): |
$ | 346 | $ | (21 | ) | $ | 367 | $ | 2,481 | $ | 2,071 | $ | 410 | |||||||||||
Research and Development Expenses
For the three months ended September 30, 2024, compared to September 30, 2023
The decrease of $0.9 million in research and development expenses was primarily related to a reduction of $0.8 million in manufacturing and supplies and $0.1 million in milestone payments.
For the nine months ended September 30, 2024, compared to September 30, 2023
The decrease of $0.2 million in research and development expenses was primarily related to a reduction of $0.3 million in manufacturing and supplies, $0.1 million in personnel-related costs, including salaries and stock-based compensation, and $0.1 million in contractor and consultant expenses, partially offset by a $0.3 million increase in research study costs.
Impairment of intangible assets
For the three and nine months ended September 30, 2024, compared to September 30, 2023
We halted enrollment in the ongoing Phase 2 trial of stenoparib and are focused on the development of a follow-on trial with FDA regulatory intent. These developments prompted an updated impairment assessment of our intangible assets utilizing a discounted cash flow model with a weighted average cost of capital (“WACC”) of 26%. As a result of the updated impairment assessment, we recognized an impairment charge of $9.7 million and foreign exchange loss of $0.1 million during the three months ended September 30, 2024, with no comparable expense in 2023.
General and Administrative Expenses
For the three months ended September 30, 2024, compared to September 30, 2023
General and administrative expenses decreased by $0.9 million for the three months ended September 30, 2024, compared to September 30, 2023. The decrease was primarily due to decreases of $0.7 million in financing costs, $0.1 million in professional services, and $0.3 million in insurance costs, partially offset by an increase of $0.1 million in personnel-related costs and $0.1 million in public reporting company costs.
For the nine months ended September 30, 2024, compared to September 30, 2023
General and administrative expenses decreased by $1.8 million during the nine months ended September 30, 2024, compared to September 30, 2023. The decrease was primarily due to decreases of $1.1 million in financing costs, $0.8 million in insurance expense, and $0.2 million in professional fees, partially offset by an increase of $0.3 million in public reporting company costs.
Other income (expense)
For the three months ended September 30, 2024, compared to September 30, 2023
Other income of $0.3 million recognized during the three months ended September 30, 2024, consisted primarily of $0.3 million in interest income and $0.1 million in foreign exchange gains, partially offset by $0.1 million in interest expenses
Other expense of $21,000 recognized during the three months ended September 30, 2023, consisted primarily of loss of $4.2 million in fair value of New September Warrants, $0.6 million in fair value of the modification to April and July 2023 warrants, $0.2 million in foreign exchange losses, and $34,000 in interest expenses, partially offset by a $4.9 million change in fair value adjustment to derivative and warrant liabilities and $12,000 in interest income.
For the nine months ended September 30, 2024, and September 30, 2023
Other income of $2.5 million recognized during the nine months ended September 30, 2024, consisted primarily of a gain of $2.7 million in change in fair value of derivative and warrant liabilities, $0.3 million in interest income, and $0.1 million in foreign exchange gains, partially offset by $0.6 million in interest expense.
Other income of $2.1 million recognized during the nine months ended September 30, 2023, consisted primarily of a gain of $7.2 million in change in fair value of derivative and warrant liabilities and $19,000 in interest income, partially offset by losses of $4.2 million in fair value of New September Warrants, $0.6 million in fair value of the modification to April and July 2023 warrants, $0.3 million in interest expense, $0.1 million in foreign exchange losses.
Liquidity, Capital Resources and Plan of Operations
Since our inception through September 30, 2024, our operations have been financed primarily by the sale of convertible promissory notes and the sale and issuance of our securities. As of September 30, 2024, we had $18.5 million in cash and cash equivalents, and an accumulated deficit of $111.5 million.
Our primary use of cash is to fund operating expenses, which consist of research and development as well as regulatory expenses related to our lead drug candidate and clinical programs for stenoparib, and to a lesser extent, general and administrative expenses. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.
On March 21, 2024, we commenced an at the market offering of shares of our common stock and as of September 30, 2024, had sold 2,556,927 shares of our common stock for net proceeds of $33.1 million. In light of our cash position as of the date of this Quarterly Report, we have sufficient funds for our current operations and planned capital expenditures. As discussed above we intend to seek capital through the sale of our securities or other sources. There are no assurances, however, that we will be successful in raising additional working capital, or if we are able to raise additional working capital, we may be unable to do so on commercially favorable terms. Our failure to raise capital or enter into other such arrangements if and when needed would have a negative impact on our business, results of operations and financial condition and our ability to develop our product candidate.
Management’s plans to mitigate the conditions or events that raise substantial doubt include additional funding through public equity, private equity, debt financing, collaboration partnerships, or other sources. We currently plan on completing an additional public offering in the near future, however there are no assurances that we will be successful in raising additional working capital, or if it is able to raise additional working capital, it may be unable to do so on commercially favorable terms. Our failure to raise capital or enter into other such arrangements when needed would have a negative impact on our business, results of operations and financial condition and our ability to continue our plan of operations.
We expect to incur substantial expenses in the foreseeable future for the development and potential commercialization of our drug candidate and ongoing internal research and development programs. At this time, we cannot reasonably estimate the nature, timing, or aggregate amount of costs for our development, potential commercialization, and internal research and development programs. However, to complete our current and future preclinical studies and clinical trials, and to complete the process of obtaining regulatory approval for our drug candidate, as well as to build the sales, marketing, and distribution infrastructure that we believe will be necessary to commercialize our drug candidate, if approved, we may require substantial additional funding in the future.
Contractual Obligations and Commitments
We enter into agreements in the normal course of business with vendors for preclinical studies, clinical trials, and other service providers for operating purposes. We have not included these payments in a table of contractual obligations since these contracts are generally cancellable at any time by us following a certain period after notice and therefore, we believe that our non-cancellable obligations under these agreements are not material.
Cash Flows
| Nine Months Ended |
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| September 30, |
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| ($ in thousands) |
2024 | 2023 | ||||||
| Total cash and cash equivalents provided by (used in): |
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| Operating activities |
$ | (14,146 | ) | $ | (11,073 | ) | ||
| Financing activities |
32,557 | 10,473 | ||||||
| Net increase (decrease) in cash and cash equivalents |
$ | 18,411 | $ | (600 | ) | |||
Operating Activities
Net cash and cash equivalents used in operating activities was $14.1 million for the nine months ended September 30, 2024, primarily comprised of our $17.1 million net loss, $3.8 million increase in operating assets and liabilities, $2.7 million change in fair value of warrant liability and $0.4 million in deferred income taxes, partially offset by a $9.7 million impairment of intangible assets and $0.2 million in non-cash interest expense.
Net cash and cash equivalents used in operating activities was $11.1 million for the nine months ended September 30, 2023, primarily comprised of our $10.2 million net loss, $7.2 million change in fair value of warrant liability and $0.1 million increase in operating assets and liabilities, partially offset by $4.2 million in fair value of New September Warrants, $1.1 million in on-cash finance expense, $0.6 million in fair value modifications to April and July 2023 warrants, $0.2 million in stock-based compensation, $0.2 million in non-cash interest and $0.1 million in unrealized foreign exchange loss.
Financing Activities
Net cash and cash equivalents provided by financing activities was $32.6 million for the nine months ended September 30, 2024, primarily due to $33.1 million in net proceeds from the sale of common stock pursuant to the Sales Agreement, $2.9 million in net proceeds from the issuance of Series A Convertible Redeemable Preferred Stock, and $1.3 million in proceeds from 3i debt promissory notes, partially offset by the $3.5 million redemption of Series A Convertible Redeemable Preferred Stock and repayment of $1.3 million of 3i debt promissory notes.
Operating Capital and Capital Expenditure Requirements
We believe that our existing cash and cash equivalents will be sufficient to fund our anticipated expenditures and commitments for the next twelve months. Our estimate as to how long we expect our cash to be able to continue to fund our operations is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Further, changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Critical Accounting Policies and Use of Estimates
Our management’s discussion and analysis of financial condition and results of operations is based upon our unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2024 and 2023, and our audited consolidated financial statements for the years ended December 31, 2023 and 2022, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses. On an on-going basis, we evaluate our critical accounting policies and estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions.
Our significant accounting policies are described in the notes to our consolidated financial statements for the year ended December 31, 2023 included in the Form 10-K, and there have been no significant changes to our significant accounting policies during the nine months ended September 30, 2024. These unaudited condensed interim consolidated financial statements should be read in conjunction with our audited financial statements and accompanying notes.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act of 1934, as amended (the "Exchange Act") and are not required to provide the information under this item.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions.
With respect to the quarter ended September 30, 2024, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective.
Management does not expect that our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control systems are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in a cost-effective control system, no evaluation of internal control over financial reporting can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been or will be detected.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended September 30, 2024, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
For information regarding our material legal proceedings, see “Note 14, Commitments and contingencies” in the accompanying “Notes to Condensed Consolidated Financial Statements” in this Quarterly Report, which information is incorporated herein by reference.
There are no material changes to the risk factors set forth in Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023, except as set forth below.
The risk factor titled “Unstable global market and economic conditions may have serious adverse consequences on our business, financial condition and stock price” is amended and restated as follows:
Unstable global market and economic conditions may have serious adverse consequences on our business, financial condition and stock price.
The global credit and financial markets have from time-to-time experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, including the conflict between Russia and Ukraine, the conflicts in Israel and the Gaza Strip and the broader Middle East, terrorism or other geopolitical events. Sanctions imposed by the United States and other countries in response to such conflicts, including the one in Ukraine, may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability. There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon clinical development plans. In addition, there is a risk that one or more of our current service providers, manufacturers and other partners may not survive an economic downturn, which could directly affect our ability to attain our operating goals on schedule and on budget.
The development and use of artificial intelligence, or AI, presents risks and challenges that can impact our business including by posing security risks to our confidential information, proprietary information, and personal data and could give rise to legal and/or regulatory actions, damage our reputation or otherwise materially harm our business.
Artificial intelligence, or AI, is increasingly being used in the biopharmaceutical, pharmaceutical, technology, and consumer health industries. We may develop and incorporate AI technology in certain of our products and services. Issues relating to the use of new and evolving technologies such as AI, machine learning, generative AI, and large language models, may cause us to experience perceived or actual brand or reputational harm, technical harm, competitive harm, legal liability, cybersecurity risks, privacy risks, compliance risks, security risks, ethical issues, and new or enhanced governmental or regulatory scrutiny, and we may incur additional costs to resolve such issues. Litigation or government regulation related to the use of AI may also adversely impact our ability to develop and offer products that use AI, as well as increase the cost and complexity of doing so. In addition, uncertainties regarding developing legal and regulatory requirements and standards may require significant resources to modify and maintain business practices to comply with U.S. and non-U.S. laws concerning the use of AI, the nature of which cannot be determined at this time. In addition, the European Union recently passed the Artificial Intelligence Act, whose regulations will be developed over the coming year and, in the U.S., the recent Executive Order concerning artificial intelligence may result in extensive new federal rule-making. Further, market demand and acceptance of AI technologies are uncertain, and we may be unsuccessful in our product development efforts.
We plan to develop policies governing the use of AI to help reasonably ensure that such AI is used in a trustworthy manner by our employees, contractors, and authorized agents and that our assets, including intellectual property, competitive information, personal information we may collect or process, and customer information, are protected. Any failure by our personnel, contractors, or other agents to adhere to our established policies could violate confidentiality obligations or applicable laws and regulations, jeopardize our intellectual property rights, cause or contribute to unlawful discrimination, or result in the misuse of personally identifiable information or the injection of malware into our systems, any of which could have a material adverse effect on our business, results of operations, and financial condition.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
On March 19, 2024, we entered into an At-The-Market Issuance Sales Agreement (the "Sales Agreement") with Ascendiant Capital Markets, LLC ("Ascendiant") under which we may offer and sell, from time to time at our sole discretion, shares of our common stock, par value $0.0001 per share, having an aggregate gross sales price of up to $50 million, to or through Ascendiant. The offer and sales of the shares are made pursuant to a previously filed shelf registration statement on Form S-3 (File No. 333-275282), originally filed with the SEC on November 2, 2023 and declared effective on November 29, 2023, and the related prospectus supplement dated September 9, 2024 and filed with the SEC on such date. We will pay Ascendiant a commission of 3.0% of the gross proceeds from the sales of shares sold through Ascendiant under the Sales Agreement. We will also reimburse Ascendiant for certain expenses incurred in connection with the Sales Agreement. Both we and Ascendiant may each terminate the Sales Agreement at any time upon specified prior written notice.
During the period October 1, 2024, through November 13, 2024, we sold 1,534,356 shares of our common stock for net proceeds of $2.5 million.
Item 3. Defaults Upon Senior Securities.
For information regarding defaults upon senior securities, see “Note 5, Convertible promissory note due to Novartis” in the accompanying “Notes to Condensed Consolidated Financial Statements” in this Quarterly Report, which information is incorporated herein by reference.
Item 4. Mine Safety Disclosures.
Not applicable.
of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the third quarter of 2024.
See the Exhibit Index to this Quarterly Report immediately below and before the signature page hereto, which Exhibit Index is incorporated by reference as if fully set forth herein.
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Schedules (or similar attachments) to this exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of all omitted schedules (or similar attachments) to the Securities and Exchange Commission on a confidential basis upon request. |
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| # | Certain information was redacted from this exhibit pursuant to Item 601(a)(6) of Regulation S-K. |
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Management contracts or compensatory plans or arrangements. |
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Furnished herewith. |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| ALLARITY THERAPEUTICS, INC., |
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| Date: November 14, 2024 |
By: |
/s/ Thomas H. Jensen |
| Thomas H. Jensen |
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| Chief Executive Officer |
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| Date: November 14, 2024 |
By: |
/s/ Alexander Epshinsky |
| Alexander Epshinsky |
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| Chief Financial Officer |
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