nvus-10q_20200930.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020 

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to           

Commission File Number: 001-36620

 

NOVUS THERAPEUTICS, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

 

20-1000967

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

19900 MacArthur Blvd., Suite 550

Irvine, California

 

92612

(Address of principal executive offices)

 

(Zip Code)

 

 

(949) 238-8090

Registrant’s telephone number, including area code

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.001 par value

 

NVUS

 

Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      Yes      No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).      Yes      No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).      Yes      No

As of November 13, 2020, there were 1,431,316 shares of the Registrant’s common stock outstanding.

 

 

 


Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995, which statements involve substantial risks and uncertainties. Any statements in this Quarterly Report on Form 10-Q about the Company’s future expectations, plans and prospects, including statements about its strategy, future operations, and development of its product candidates and other statements containing words such as “believes,” “anticipates,” “plans,” “expects,” “estimates,” “intends,” “predicts,” “projects,” “targets,” “could,” “may,” and similar expressions, constitute forward-looking statements, although not all forward-looking statements include such identifying words. Forward-looking statements include, but are not limited to statements regarding:

 

our short operating history and the Anelixis acquisition, which may make it difficult to evaluate the success of our business to date and to assess our future viability;

 

the impact of the COVID-19 pandemic on our operations, including our ability to access capital markets;

 

the anticipated expenses associated with a workforce reduction that we effected in June 2020;

 

expectations regarding the timing for the commencement and completion of product development or clinical trials for the Company’s product candidates;

 

the timing, costs, conduct and outcome of preclinical studies and clinical trials;

 

meeting future clinical and regulatory milestones, such as New Drug Application (“NDA”) submissions;

 

the risk that clinical trials of the Company’s product candidates may not be successful in establishing safety and tolerability or efficacy;

 

the Company’s plans and timing with respect to seeking regulatory approvals and uncertainties regarding the regulatory process;

 

the anticipated treatment of data by the U.S. Food and Drug Administration (“FDA”), the European Medicines Agency (“EMA”) or other regulatory authorities of the Company’s product candidates;

 

the rate and degree of market acceptance and clinical utility of the Company’s product candidates;

 

the Company’s commercialization, marketing, and manufacturing capabilities and strategy;

 

the Company’s intellectual property position and strategy;

 

the Company’s ability to identify additional product candidates with significant commercial potential;

 

the availability of funds and resources to pursue the Company’s research and development projects, including preclinical studies and clinical trials of its product candidates, and manufacturing activities.

 

the Company’s estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

 

the Company’s ability to continue as a going concern;

 

developments relating to the Company’s competitors and industry;

 

the impact of government laws and regulations; and

 

the duration over which the Company’s cash balances will fund its operations.

Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: the ability to develop commercially viable product formulations on a timely basis, or at all; the sufficiency of the Company’s cash resources; the ability to obtain necessary regulatory and ethics approvals to commence additional clinical trials; whether data from early clinical trials will be indicative of the data that will be obtained from future clinical trials; whether the results of clinical trials will warrant submission for regulatory approval of any investigational product; whether any such submission will receive approval from the FDA or equivalent foreign regulatory agencies and, if the Company is able to obtain such approval for an investigational product, whether it will be successfully distributed and marketed; and the severity, magnitude and duration of the COVID-19 pandemic, including economic and other impacts of the pandemic and of and actions taken in response to it by governments, businesses, and individuals. These risks and uncertainties, as well as other risks and uncertainties that could cause the Company’s actual results to differ significantly from the forward-looking statements contained herein, are described in greater detail in Part II, Item 1A, Risk Factors in this Quarterly Report on Form 10-Q.

Any forward-looking statements contained in this Quarterly Report on Form 10-Q speak only as of the date hereof and not of any future date, and the Company expressly disclaims any intent to update any forward-looking statements, whether as a result of new information, future events or otherwise.

 

2


RISK FACTOR SUMMARY

The following summarizes the principal factors that make an investment in the Company speculative or risky, all of which are more fully described in Part II, Item 1A, Risk Factors in this Quarterly Report on Form 10-Q. This summary should be read in conjunction with the Risk Factors section and should not be relied upon as an exhaustive summary of the material risks facing our business. The occurrence of any of these risks could harm our business, financial condition, results of operations and/or growth prospects or cause our actual results to differ materially from those contained in forward-looking statements we have made in this report and those we may make from time to time. You should consider all of the risk factors described in our public filings when evaluating our business.

Risks Related to Our Operations

Our short operating history and the Anelixis acquisition may make it difficult to evaluate the success of our business to date and to assess our future viability.

We are required to use reasonable best efforts to solicit stockholder approval for the conversion of the Series X1 Preferred Stock and if we are unable to obtain such approval by March 13, 2021, then the holders of this preferred stock may demand cash settlement upon attempted conversions. If stockholders demand this cash-settlement right, the Company may not have sufficient capital to funds its operations.

We have incurred significant operating losses since our inception and expect that we will continue to incur losses over the next several years and may never achieve or maintain profitability.

Our product candidates are in the early stages of clinical development and may not be successfully developed. If we are unable to successfully develop and commercialize these or any other product candidate, or if we experience significant delays in doing so, our business will be materially harmed.

The ongoing COVID-19 pandemic and actions taken in response to it may result in additional disruptions to our business operations, which could have a material adverse effect on our business.

Drug development involves a lengthy and expensive process with an uncertain outcome, including failure to demonstrate safety and efficacy to the satisfaction of the FDA or similar regulatory authorities outside the United States. We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the formulation and commercialization of our product candidates.

Delays or difficulties in the enrollment of patients in clinical trials, could delay or prevent our receipt of necessary regulatory approvals and increase expenses for the development of our product candidates.

If serious adverse events or unacceptable side effects are identified during the development of our product candidates, we may need to abandon or limit our development of some of our product candidates.

We will require additional funding to be able to complete the development of our lead drug candidate. If we are unable to raise capital when needed, we may be forced to significantly alter our business strategy, substantially curtail our current operations, or liquidate and cease operations altogether.

Our future success depends on our ability to retain executives and key employees and to attract, retain and motivate qualified personnel in the future.

 

Risks Related to Regulatory Approval of Our Product Candidates and Other Legal Compliance Matters

If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals, or the approvals may be for a narrow indication, we may not be able to commercialize our product candidates, and our ability to generate revenue may be materially impaired.

Any product candidate for which we obtain marketing approval will be subject to extensive post-marketing regulatory requirements and could be subject to post-marketing restrictions or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products, when and if any of them are approved.

Legislation regulating the pharmaceutical and healthcare industries may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and affect the prices we may obtain.

Our business operations and relationships will be subject to applicable anti-kickback, fraud and abuse and other broadly applicable healthcare laws, which could expose us to criminal sanctions, civil penalties, program exclusion, contractual damages, reputational harm and diminished profits and future earnings.

Our internal computer systems, or those of our third-party collaborators, service providers, contractors or consultants, may fail or suffer security breaches, disruptions, or incidents, which could result in a material disruption of our development programs or loss of data or compromise the privacy, security, integrity or confidentiality of sensitive information related to our business and have a material adverse effect on our reputation, business, financial condition or results of operations.

European data collection is governed by restrictive regulations governing the collection, use, processing and cross-border transfer of personal information.

3


If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business.

 

Risks Related to the Commercialization of Our Product Candidates

Even if any of our product candidates receives marketing approval, we may fail to achieve the degree of market acceptance by physicians, patients, third-party payers and others in the medical community necessary for commercial success.

If our current product candidates, or a future product candidate receives marketing approval and we, or others, later discover that the product is less effective than previously believed or causes undesirable side effects that were not previously identified, the ability to market the product could be compromised.

If we are unable to establish effective marketing and sales capabilities or enter into agreements with third parties to market and sell our product candidates, we may not be able to effectively market and sell our product candidates, if approved, or generate product revenues.

We face substantial competition, which may result in others discovering, developing or commercializing competing products before or more successfully than we do.

The insurance coverage and reimbursement status of newly approved products is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for new or current products could limit our ability to market those products and decrease our ability to generate revenue.

Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop.

 

Risks Related to Our Dependence on Third Parties

The reliance on third parties for the manufacture of our product candidates for nonclinical and clinical trials, and for eventual commercialization, increases the risk that we will not have sufficient quantities of our product candidates or products at an acceptable cost and quality, which could delay, prevent or impair our development or commercialization efforts.

We depend on CROs and other contracted third parties to perform nonclinical and clinical testing and certain other research and development activities. As a result, the outcomes of the activities performed by these organizations will be, to a certain extent, beyond our control.

 

Risks Related to Our Intellectual Property

If we are unable to obtain and maintain intellectual property protection for our technology and products or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully commercialize our technology and products may be impaired.

We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time-consuming and unsuccessful.

We may need to license certain intellectual property from third parties, and such licenses may not be available or may not be available on commercially reasonable terms.

If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

We may be subject to trade secret claims from former employers of Company personnel.

 

Risks Related to Our Common Stock

Our stock price could be volatile as holders of our preferred stock become able to convert their shares to common stock and sell these shares in the open market.

If we fail to establish and maintain proper and effective internal control over financial reporting, our operating results and our ability to operate our business could be harmed.

Provisions in our corporate charter and under Delaware law could make an acquisition of the Company more difficult and may prevent attempts by our stockholders to replace or remove our current management.

We do not expect to pay any cash dividends in the foreseeable future.

 

 

4


NOVUS THERAPEUTICS, INC.

FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2020

Table of Contents

 

 

 

 

Page

 

 

 

 

PART I.

FINANCIAL INFORMATION

 

 

 

 

 

 

Item 1.

Financial Statements

 

6

 

 

 

 

 

Condensed Consolidated Balance Sheets as of September 30, 2020 (Unaudited) and December 31, 2019

 

6

 

 

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2020 and 2019 (Unaudited)

 

 

7

 

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity for the Three and Nine Months Ended September 30, 2020 and 2019 (Unaudited)

 

8

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2019 (Unaudited)

 

9

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

10

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

26

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

37

 

 

 

 

Item 4.

Controls and Procedures

 

38

 

 

 

 

PART II.

OTHER INFORMATION

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

39

 

 

 

 

Item 1A.

Risk Factors

 

39

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

59

 

 

 

 

Item 3.

Defaults Upon Senior Securities

 

59

 

 

 

 

Item 4.

Mine Safety Disclosures

 

59

 

 

 

 

Item 5.

Other Information

 

59

 

 

 

 

Item 6.

Exhibits

 

59

 

 

 

 

Exhibit Index

 

60

 

 

 

 

Signatures

 

61

 

5


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

NOVUS THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

 

 

 

September 30,

2020

 

 

December 31,

2019

 

 

 

(Unaudited)

 

 

(Note 2)

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

114,464

 

 

$

8,791

 

Prepaid expenses and other current assets

 

 

637

 

 

 

1,180

 

Total current assets

 

 

115,101

 

 

 

9,971

 

Property and equipment, net

 

 

 

 

 

5

 

Operating lease asset, net

 

 

183

 

 

 

316

 

Goodwill

 

 

44,466

 

 

 

 

In-process research and development

 

 

32,386

 

 

 

 

Other assets

 

 

449

 

 

 

639

 

Total assets

 

$

192,585

 

 

$

10,931

 

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

758

 

 

$

329

 

Current operating lease liability

 

 

191

 

 

 

180

 

Accrued severance

 

 

803

 

 

 

 

Accrued expenses and other liabilities

 

 

4,378

 

 

 

813

 

Total current liabilities

 

 

6,130

 

 

 

1,322

 

Non-current operating lease liability

 

 

 

 

 

144

 

Total liabilities

 

 

6,130

 

 

 

1,466

 

Commitments and contingencies (Note 5)

 

 

 

 

 

 

 

 

Series X1 non-voting convertible preferred stock, $0.001 par value, 515,000 shares authorized;

   339,138 and no shares issued and outstanding at September 30, 2020 and

   December 31, 2019, respectively

 

 

164,949

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Series X preferred stock, $0.001 par value, 10,000 shares authorized; 511 and no shares

   issued and outstanding at September 30, 2020 and December 31, 2019, respectively

 

 

 

 

 

 

Common stock, $0.001 par value, 200,000,000 shares authorized at September 30, 2020

   and December 31, 2019; 1,274,631 and 720,408 shares issued and

   outstanding at September 30, 2020 and December 31, 2019, respectively

 

 

1

 

 

 

1

 

Additional paid-in capital

 

 

95,994

 

 

 

67,046

 

Accumulated deficit

 

 

(74,489

)

 

 

(57,582

)

Total stockholders’ equity

 

 

21,506

 

 

 

9,465

 

Total liabilities, convertible preferred stock and stockholders’ equity

 

$

192,585

 

 

$

10,931

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

6


NOVUS THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)

(Unaudited)

 

 

 

For the Three Months

Ended September 30,

 

 

For the Nine Months

Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

615

 

 

$

1,509

 

 

$

3,095

 

 

$

6,795

 

General and administrative

 

 

3,731

 

 

 

1,411

 

 

 

6,730

 

 

 

5,089

 

Restructuring expense

 

 

1,802

 

 

 

 

 

 

2,292

 

 

 

 

Total operating expenses

 

 

6,148

 

 

 

2,920

 

 

 

12,117

 

 

 

11,884

 

Loss from operations

 

 

(6,148

)

 

 

(2,920

)

 

 

(12,117

)

 

 

(11,884

)

Other income, net

 

 

4

 

 

 

27

 

 

 

39

 

 

 

17

 

Warrant inducement expense

 

 

 

 

 

 

 

 

(4,829

)

 

 

 

Net loss and comprehensive loss

 

$

(6,144

)

 

$

(2,893

)

 

$

(16,907

)

 

$

(11,867

)

Net loss per share, basic and diluted

 

$

(5.51

)

 

$

(4.01

)

 

$

(16.81

)

 

$

(18.74

)

Weighted-average common shares outstanding, basic and diluted

 

 

1,114,133

 

 

 

720,829

 

 

 

1,006,008

 

 

 

633,187

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 

7


 

NOVUS THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)

 

 

 

 

Series X1 Non-Voting Convertible

Preferred Stock

 

 

 

 

Series X Preferred Stock

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Total

 

Balance as of December 31, 2019

 

 

 

 

$

 

 

 

 

 

 

 

$

 

 

 

720,408

 

 

$

1

 

 

$

67,046

 

 

$

(57,582

)

 

$

9,465

 

Issuance of common stock in connection with exercise of warrants, net of

   issuance costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

404,068

 

 

 

 

 

 

5,191

 

 

 

 

 

 

5,191

 

Issuance of common stock in connection with conversion of preferred stock

 

 

 

 

 

 

 

 

 

 

(3,285

)

 

 

 

 

 

182,500

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock in connection with vesting of restricted stock units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,056

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock in connection with acquisition

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

175,488

 

 

 

 

 

 

1,194

 

 

 

 

 

 

1,194

 

Cancellation of common stock in connection with exchange for preferred stock

 

 

 

 

 

 

 

 

 

 

3,796

 

 

 

 

 

 

(210,889

)

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of preferred stock in connection with acquisition

 

 

140,026

 

 

 

69,723

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of preferred stock in connection with PIPE transaction, net of

   issuance costs

 

 

199,112

 

 

 

95,226

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair value of options assumed in acquisition

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,278

 

 

 

 

 

 

3,278

 

Fair value of warrants assumed in acquisition

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12,944

 

 

 

 

 

 

12,944

 

Warrant inducement expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,829

 

 

 

 

 

 

4,829

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,512

 

 

 

 

 

 

1,512

 

Net loss and other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(16,907

)

 

 

(16,907

)

Balance as of September 30, 2020

 

 

339,138

 

 

$

164,949

 

 

 

 

 

511

 

 

$

 

 

 

1,274,631

 

 

$

1

 

 

$

95,994

 

 

$

(74,489

)

 

$

21,506

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of June 30, 2020

 

 

 

 

$

 

 

 

 

 

511

 

 

$

 

 

 

1,076,642

 

 

$

1

 

 

$

77,700

 

 

$

(68,345

)

 

$

9,356

 

Issuance of common stock in connection with cashless exercise of warrants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20,834

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock in connection with vesting of restricted stock units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,667

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock in connection with acquisition

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

175,488

 

 

 

 

 

 

1,194

 

 

 

 

 

 

1,194

 

Issuance of preferred stock in connection with acquisition

 

 

140,026

 

 

 

69,723

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of preferred stock in connection with PIPE transaction, net of

   issuance costs

 

 

199,112

 

 

 

95,226

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair value of options assumed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,278

 

 

 

 

 

 

3,278

 

Fair value of warrants assumed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12,944

 

 

 

 

 

 

12,944

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

878

 

 

 

 

 

 

878

 

Net loss and other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,144

)

 

 

(6,144

)

Balance as of September 30, 2020

 

 

339,138

 

 

$

164,949

 

 

 

 

 

511

 

 

$

 

 

 

1,274,631

 

 

$

1

 

 

$

95,994

 

 

$

(74,489

)

 

$

21,506

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2018

 

 

 

 

$

 

 

 

 

 

 

 

$

 

 

 

523,452

 

 

$

1

 

 

$

56,062

 

 

$

(41,571

)

 

$

14,492

 

Issuance of common stock at-the-market, net of issuance costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,401

 

 

 

 

 

 

107

 

 

 

 

 

 

107

 

Issuance of common stock and warrants in registered direct offering, net of

   issuance costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

191,617

 

 

 

 

 

 

9,569

 

 

 

 

 

 

9,569

 

Issuance of common stock in connection with exercise of options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,359

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,065

 

 

 

 

 

 

1,065

 

Net loss and other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11,867

)

 

 

(11,867

)

Balance as of September 30, 2019

 

 

 

 

$

 

 

 

 

 

 

 

$

 

 

 

720,829

 

 

$

1

 

 

$

66,803

 

 

$

(53,438

)

 

$

13,366

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of June 30, 2019

 

 

 

 

$

 

 

 

 

 

 

 

$

 

 

 

720,829

 

 

$

1

 

 

$

66,576

 

 

$

(50,545

)

 

$

16,032

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

227

 

 

 

 

 

 

227

 

Net loss and other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,893

)

 

 

(2,893

)

Balance as of September 30, 2019

 

 

 

 

$

 

 

 

 

 

 

 

$

 

 

 

720,829

 

 

$

1

 

 

$

66,803

 

 

$

(53,438

)

 

$

13,366

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

8


 

NOVUS THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

For the Nine Months

Ended September 30,

 

 

 

2020

 

 

2019

 

Operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(16,907

)

 

$

(11,867

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

5

 

 

 

7

 

Amortization of operating lease asset

 

 

133

 

 

 

129

 

Warrant inducement expense

 

 

4,829

 

 

 

 

Stock-based compensation

 

 

1,512

 

 

 

1,065

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses and other assets

 

 

771

 

 

 

3

 

Accounts payable and accrued expenses

 

 

4,011

 

 

 

(1,050

)

Operating lease liability

 

 

(133

)

 

 

(121

)

Net cash used in operating activities

 

 

(5,779

)

 

 

(11,834

)

Investing activities

 

 

 

 

 

 

 

 

Cash and cash equivalents received from acquisition

 

 

11,035

 

 

 

 

Net cash provided by investing activities

 

 

11,035

 

 

 

 

Financing activities

 

 

 

 

 

 

 

 

Proceeds from issuances of common stock, net

 

 

 

 

 

9,676

 

Proceeds from issuances of non-voting preferred stock, net

 

 

95,226

 

 

 

 

Proceeds from exercise of warrants, net

 

 

5,191

 

 

 

 

Net cash provided by financing activities

 

 

100,417

 

 

 

9,676

 

Net change in cash and cash equivalents

 

 

105,673