Excerpt:
As of September 30, 2017, the Company has an accumulated deficit of $74.1 million, representative of recurring losses since inception. The Company is a
development stage pharmaceutical company that has no sales as it does not have any products in the market and will continue to not have any revenues until it
begins to market its products after it has obtained the necessary Federal Drug Administration (the “FDA”) approval. As a result, the Company expects to continue
to incur losses.
At September 30, 2017, the Company’s cash amounted to $2.9 million and current liabilities amounted to $10.8 million, of which $6.6 million were payables to
related parties with no immediate payment terms (See Note 8- Related Party Transactions in the Notes to Condensed Financial Statements section below). The
Company had expended substantial funds on its clinical trials and expects to increase this spending. The Company’s net cash used in operating activities for the
three months ended September 30, 2017 was approximately $3.7 million, and current projections indicate that the Company will have continued negative cash
flows for the foreseeable future. Our net losses incurred for the three months ended September 30, 2017 and 2016, amounted to $4.5 million and $3.0 million,
respectively, and working capital deficits was approximately $7.6 million and $6.1 million at September 30, 2017 and June 30, 2017, respectively.
Accordingly, the Company’s planned operations, including total budgeted expenditures of approximately $15 million for the next twelve months, raise doubt about
its ability to continue as a going concern. The Company’s plans to alleviate the doubt of its ability to continue as a going concern primarily include controlling the
timing and spending on its research and development programs and raising additional funds through equity financings from its common stock purchase agreement
with Aspire Capital Fund, LLC, an Illinois limited liability company (“Aspire Capital”). The Company may consider other plans to fund operations including: (1)
raising additional capital through debt financings or from other sources; (2) additional funding through new relationships to help fund future clinical trial costs (i.e.
licensing and partnerships); (3) reducing spending on one or more research and development programs by discontinuing development; and/or (4) restructuring
operations to change its overhead structure. The Company may issue securities, including shares of common stock, shares of preferred stock and stock purchase
contracts through private placement transactions or registered public offerings, pursuant to its registration statement on Form S-3 filed with the SEC on September
11, 2017. The Company’s future liquidity needs, and ability to address those needs, will largely be determined by the success of its product candidates and key
development and regulatory events and its decisions in the future.
The Company believes that the actions discussed above are probable of occurring and alleviating the substantial doubt raised by our historical operating results and
satisfying our estimated liquidity needs twelve months from the issuance of the accompanying financial statements.
On September 6, 2017, the Company entered into a new $30 million common stock purchase agreement with Aspire Capital (the “2017 Agreement”) to replace the
prior 2015 $30 million common stock purchase agreement with Aspire Capital (the “2015 Agreement”). During the period from July 1, 2017 to September 5, 2017,
the Company generated proceeds of approximately $2.1 million under the 2015 Agreement from the sale of approximately 2.6 million shares of its common stock.
During the period from September 6, 2017 to September 30, 2017, the Company generated proceeds of approximately $0.4 million under the 2017 Agreement
from the sale of approximately 0.6 million shares of its common stock. As of September 30, 2017, the available balance under the 2017 equity line agreement is
approximately $29.6 million.
As of September 30, 2017, the Company has an accumulated deficit of $74.1 million, representative of recurring losses since inception. The Company is a
development stage pharmaceutical company that has no sales as it does not have any products in the market and will continue to not have any revenues until it
begins to market its products after it has obtained the necessary Federal Drug Administration (the “FDA”) approval. As a result, the Company expects to continue
to incur losses.
At September 30, 2017, the Company’s cash amounted to $2.9 million and current liabilities amounted to $10.8 million, of which $6.6 million were payables to
related parties with no immediate payment terms (See Note 8- Related Party Transactions in the Notes to Condensed Financial Statements section below). The
Company had expended substantial funds on its clinical trials and expects to increase this spending. The Company’s net cash used in operating activities for the
three months ended September 30, 2017 was approximately $3.7 million, and current projections indicate that the Company will have continued negative cash
flows for the foreseeable future. Our net losses incurred for the three months ended September 30, 2017 and 2016, amounted to $4.5 million and $3.0 million,
respectively, and working capital deficits was approximately $7.6 million and $6.1 million at September 30, 2017 and June 30, 2017, respectively.
Accordingly, the Company’s planned operations, including total budgeted expenditures of approximately $15 million for the next twelve months, raise doubt about
its ability to continue as a going concern. The Company’s plans to alleviate the doubt of its ability to continue as a going concern primarily include controlling the
timing and spending on its research and development programs and raising additional funds through equity financings from its common stock purchase agreement
with Aspire Capital Fund, LLC, an Illinois limited liability company (“Aspire Capital”). The Company may consider other plans to fund operations including: (1)
raising additional capital through debt financings or from other sources; (2) additional funding through new relationships to help fund future clinical trial costs (i.e.
licensing and partnerships); (3) reducing spending on one or more research and development programs by discontinuing development; and/or (4) restructuring
operations to change its overhead structure. The Company may issue securities, including shares of common stock, shares of preferred stock and stock purchase
contracts through private placement transactions or registered public offerings, pursuant to its registration statement on Form S-3 filed with the SEC on September
11, 2017. The Company’s future liquidity needs, and ability to address those needs, will largely be determined by the success of its product candidates and key
development and regulatory events and its decisions in the future.
The Company believes that the actions discussed above are probable of occurring and alleviating the substantial doubt raised by our historical operating results and
satisfying our estimated liquidity needs twelve months from the issuance of the accompanying financial statements.
On September 6, 2017, the Company entered into a new $30 million common stock purchase agreement with Aspire Capital (the “2017 Agreement”) to replace the
prior 2015 $30 million common stock purchase agreement with Aspire Capital (the “2015 Agreement”). During the period from July 1, 2017 to September 5, 2017,
the Company generated proceeds of approximately $2.1 million under the 2015 Agreement from the sale of approximately 2.6 million shares of its common stock.
During the period from September 6, 2017 to September 30, 2017, the Company generated proceeds of approximately $0.4 million under the 2017 Agreement
from the sale of approximately 0.6 million shares of its common stock. As of September 30, 2017, the available balance under the 2017 equity line agreement is
approximately $29.6 million.
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