|
|
|
(State or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification Number)
|
|
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Title of Each Class
|
Trading Symbol(s)
|
Name of Each Exchange on Which Registered
|
||
|
|
|
Large accelerated filer
|
☐ |
|
☒ |
Accelerated filer
|
☐ |
Smaller reporting company
|
|
Emerging growth company
|
|
|
Page
|
|
3 |
|
Item 1.
|
3 |
|
|
3 |
|
|
4 |
|
|
5 |
|
|
6 |
|
|
7 |
|
Item 2.
|
27 |
|
Item 3.
|
43 |
|
Item 4.
|
43 |
|
|
|
|
|
44 |
|
|
|
|
Item 1.
|
44 | |
Item 1A.
|
44 | |
Item 2.
|
44 | |
Item 3.
|
44 | |
Item 4.
|
44 | |
Item 5.
|
44 | |
Item 6.
|
45 | |
|
|
|
46 |
Item 1. |
Financial Statements
|
As of
|
||||||||
September 30,
2023
(unaudited)
|
December 31,
2022
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Accounts receivable (Note 9) | ||||||||
Contract assets and unbilled receivables (Note 9) |
||||||||
Prepaids and other current assets
|
||||||||
Short-term investments
|
|
|
||||||
Total current assets
|
|
|
||||||
Property and equipment, net
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
Liabilities and stockholders’ equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
|
$
|
|
||||
Accrued expenses
|
|
|
||||||
Derivative liability | ||||||||
Total current liabilities
|
|
|
||||||
Total liabilities
|
|
|
||||||
Commitments and contingencies (Note 3 and Note 8)
|
|
|
||||||
Stockholders’ equity
|
||||||||
Preferred stock, par value $
|
|
|
||||||
Common stock, par value $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||
Total stockholders’ equity
|
|
|
||||||
Total liabilities and stockholders’ equity
|
$
|
|
$
|
|
For the Three Months Ended
September 30,
|
For the Nine Months Ended
September 30,
|
|||||||||||||||
2023
|
2022
|
2023 | 2022 | |||||||||||||
License and collaborations revenue |
$ | $ | $ | $ | ||||||||||||
Operating expenses:
|
||||||||||||||||
General and administrative
|
|
|
||||||||||||||
Research and development
|
|
|
||||||||||||||
Total operating expenses
|
|
|
||||||||||||||
Income (loss) from operations |
|
(
|
)
|
( |
) | ( |
) | |||||||||
Financing costs (Note 6)
|
( |
) | ( |
) | ||||||||||||
Interest expense (Note 4)
|
|
|
( |
) | ||||||||||||
Fair value change in derivative liability |
||||||||||||||||
Other income (expense), net
|
|
|
( |
) | ||||||||||||
Income (loss) before income taxes
|
|
(
|
)
|
( |
) | ( |
) | |||||||||
Provision for income taxes
|
(
|
)
|
|
( |
) | |||||||||||
Net income (loss) |
|
(
|
)
|
( |
) | ( |
) | |||||||||
Other comprehensive income (loss), net of tax |
|
|
||||||||||||||
Comprehensive income (loss) |
$
|
|
$
|
(
|
)
|
$ | ( |
) | $ | ( |
) | |||||
Net income (loss) per share (Note 10): | ||||||||||||||||
Basic
|
$
|
|
$
|
(
|
)
|
$ | ( |
) | $ | ( |
) | |||||
Diluted | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||
Number of shares used in per share calculations:
|
||||||||||||||||
Basic
|
|
|
||||||||||||||
Diluted |
Common Stock
|
Additional
Paid–In
|
Accumulated
|
Total
|
|||||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
Equity
|
||||||||||||||||
Balance at December 31, 2021
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
Issuance of common stock in connection with the at-the-market program
|
||||||||||||||||||||
Issuance costs |
— | ( |
) | ( |
) | |||||||||||||||
Stock–based compensation
|
|
|
|
|
|
|||||||||||||||
Exercise of stock options | ||||||||||||||||||||
Net and comprehensive loss
|
—
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Balance at March 31, 2022
|
|
|
|
(
|
)
|
|
||||||||||||||
Issuance of common stock in connection with the at-the-market program
|
||||||||||||||||||||
Issuance costs | — | ( |
) | ( |
) | |||||||||||||||
Stock–based compensation
|
|
|
|
|
|
|||||||||||||||
Net and comprehensive loss
|
—
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Balance at June 30, 2022
|
|
|
|
|
|
|
(
|
)
|
|
|
||||||||||
Issuance of common stock in connection with the at-the-market program
|
||||||||||||||||||||
Issuance costs | — | ( |
) | ( |
) | |||||||||||||||
Stock–based compensation | ||||||||||||||||||||
Exercise of Series B warrants |
||||||||||||||||||||
Net and comprehensive loss | — | ( |
) | ( |
) | |||||||||||||||
Balance at September 30, 2022 | $ | $ |
$ |
( |
) | $ |
||||||||||||||
Balance at December 31, 2022
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
Issuance costs | — | ( |
) | ( |
) | |||||||||||||||
Stock-based compensation
|
|
|
|
|
|
|||||||||||||||
Exercise of warrants
|
|
|
|
|
|
|||||||||||||||
Net and comprehensive loss
|
—
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Balance at March 31, 2023
|
|
|
|
(
|
)
|
|
||||||||||||||
Issuance costs
|
— |
|
(
|
)
|
(
|
)
|
||||||||||||||
Stock-based compensation
|
|
|
|
|
|
|||||||||||||||
Net and comprehensive loss
|
—
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Balance at June 30, 2023
|
|
|
|
|
|
|
(
|
)
|
|
|
||||||||||
Issuance of common stock in connection with the at-the-market program and purchase agreement
|
||||||||||||||||||||
Issuance costs |
— | ( |
) | ( |
) | |||||||||||||||
Stock–based compensation | ||||||||||||||||||||
Net and comprehensive income |
— | |||||||||||||||||||
Balance at September 30, 2023 | $ |
$ |
$ |
( |
) | $ |
For the Nine Months
Ended
September 30,
|
||||||||
2023
|
2022
|
|||||||
Operating activities
|
||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Stock-based compensation
|
|
|
||||||
Depreciation
|
|
|
||||||
Unrealized loss from short-term investments
|
||||||||
Financing costs
|
||||||||
Fair value change in derivative liability
|
( |
) | ||||||
Change in assets and liabilities: |
||||||||
Accounts receivable
|
( |
) | ||||||
Contract assets and unbilled receivables
|
||||||||
Prepaid and other assets
|
|
|
||||||
Accounts payable
|
|
(
|
)
|
|||||
Accrued and other liabilities
|
|
(
|
)
|
|||||
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
Investing activities
|
||||||||
Net cash used in investing activities
|
|
|
||||||
Financing activities
|
||||||||
Proceeds from issuance of common stock in connection with the at-the-market program and purchase agreement
|
||||||||
Issuance costs | ( |
) | ( |
) | ||||
Payments made in connection with short-term loan | ( |
) | ||||||
Exercise of Series B warrants |
||||||||
Exercise of stock options
|
|
|
||||||
Net cash provided by financing activities
|
|
|
||||||
Net decrease in cash and cash equivalents
|
(
|
)
|
(
|
)
|
||||
Cash and cash equivalents at beginning of period
|
|
|
||||||
Cash and cash equivalents at end of period
|
$
|
|
$
|
|
||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid for income taxes
|
$
|
|
$
|
|
||||
Cash paid for interest
|
$
|
|
$
|
|
||||
Supplemental non-cash financing transactions:
|
||||||||
Unpaid issuance costs |
$
|
|
$
|
|
||||
Non-cash issuance of common stock in connection with equity purchase agreement |
$ | $ | ||||||
Value of derivative established in connection with the equity purchase agreement |
$ | $ |
1. |
Company Description and Summary of Significant Accounting Policies
|
● |
Level 1 inputs: Unadjusted quoted prices for identical assets or liabilities in active markets;
|
● |
Level 2 inputs: Quoted prices for similar assets and liabilities in active markets, quoted prices in
markets that are not active, or inputs which are observable, whether directly or indirectly, for substantially the full term of the asset or liability; and
|
● |
Level 3 inputs: Unobservable inputs that reflect the Company’s own assumptions about the assumptions
market participants would use in pricing the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date.
|
As of September 30, 2023
|
||||||||||||||||
Description
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Assets:
|
||||||||||||||||
Short-term investments |
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Total assets at fair value
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Liabilities: | ||||||||||||||||
Derivative liability | $ |
$ |
$ |
$ |
||||||||||||
Total liabilities at fair value | $ |
$ |
$ |
$ |
As of December 31, 2022
|
||||||||||||||||
Description
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Assets:
|
||||||||||||||||
Short-term investments
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Total assets at fair value
|
$
|
|
$
|
|
$
|
|
$
|
|
2023
|
2022
|
|||||||
Short-term investments
|
||||||||
Balance as of beginning of period
|
$
|
|
$
|
|
||||
Unrealized loss
|
(
|
)
|
(
|
)
|
||||
Balance as of end of period
|
$
|
|
$
|
|
2023
|
2022
|
|||||||
Derivative liability
|
||||||||
Balance as of beginning of period
|
$
|
|
$
|
|
||||
Purchase agreement execution
|
|
|
||||||
Unrealized gain
|
( |
) |
|
|||||
Balance as of end of period
|
$ |
$
|
|
2. |
Merger
|
● |
|
● |
|
● |
|
3.
|
Commitments and Contingencies
|
4. |
Supplemental Balance Sheet Information
|
September 30,
2023
|
December 31,
2022
|
|||||||
Prepaids
|
$
|
|
$
|
|
||||
Other
|
|
|
||||||
Total prepaids and other assets
|
$
|
|
$
|
|
September 30,
2023
|
December 31,
2022
|
|||||||
Equipment
|
$
|
|
$
|
|
||||
Furniture
|
|
|
||||||
Total property and equipment
|
|
|
|
|
||||
Less accumulated depreciation
|
(
|
)
|
(
|
)
|
||||
Property and equipment, net
|
$
|
|
$
|
|
September 30,
|
December 31,
|
|||||||
2023
|
2022
|
|||||||
Income taxes
|
$ |
|
$
|
|
||||
Payroll
|
|
|
||||||
Professional services
|
|
|
||||||
R&D services and supplies
|
||||||||
Severance
|
||||||||
Other
|
|
|
||||||
Total
|
$ |
|
$
|
|
5. |
Related Party Transactions
|
6. |
Stockholders’ Equity
|
• |
the lowest sale price for the Company’s common stock on Nasdaq
on the purchase date of such shares; and
|
• |
the average of the three (3) lowest closing sale prices for
the Company’s common stock on Nasdaq during the ten (
|
• |
three (
|
• |
|
• |
the closing sale price of the Company’s common stock on Nasdaq
on the applicable Accelerated Purchase date; and
|
• |
the volume-weighted average price of the Company’s common
stock on Nasdaq during the applicable Accelerated Purchase Measurement Period on the applicable Accelerated Purchase date.
|
7. |
Stock-based Compensation
|
|
Three Months
Ended
September 30,
|
Nine Months
Ended
September 30,
|
||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
General and administrative
|
$ |
$
|
|
$
|
|
$
|
|
|||||||||
Research and development
|
|
|
|
|
||||||||||||
Total stock-based compensation
|
$
|
|
$
|
|
$
|
|
$
|
|
|
Three Months
Ended
September 30,
|
Nine Months
Ended September 30, |
||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
Expected stock price volatility
|
|
%
|
|
%
|
|
%
|
|
%
|
||||||||
Expected life of options (years)
|
|
|
|
|
||||||||||||
Expected dividend yield
|
|
%
|
|
%
|
|
%
|
|
%
|
||||||||
Risk free interest rate
|
|
%
|
|
%
|
|
%
|
|
%
|
8. |
Apexian Sublicense Agreement
|
9.
|
License and Collaboration Agreements
|
Contract Assets and Unbilled Receivables
|
||||
Balance as of December 31, 2022
|
$
|
|
||
Revenue recognized
|
|
|||
Reclassification to accounts receivable related to costs billed under the Nyxol License Agreement
|
(
|
)
|
||
Balance as of September 30, 2023
|
$
|
|
10. |
Net Income (Loss) per Share
|
|
Three Months
Ended
September 30,
|
Nine Months
Ended
September 30,
|
||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
Basic
|
|
|
|
|
||||||||||||
Dilutive stock options
|
|
|
|
|
||||||||||||
Dilutive RSUs
|
|
|
|
|
||||||||||||
Dilutive warrants
|
|
|
|
|
||||||||||||
Diluted common shares outstanding
|
|
|
|
|
Three Months
Ended
September 30,
|
Nine Months
Ended
September 30,
|
|||||||||||||||
2023
|
2022
|
2023 | 2022 | |||||||||||||
Series A, Series B, and RDO warrants
|
|
|
||||||||||||||
Stock options
|
|
|
||||||||||||||
RSUs | ||||||||||||||||
Former Rexahn warrants
|
|
|
11.
|
Income Taxes
|
12.
|
Deferred Compensation Plan
|
13. |
Subsequent Events
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
• |
continue clinical trials for APX3330, POS and for any other product candidate in our future pipeline;
|
• |
continue nonclinical studies for APX3330, APX2009 and APX2014, POS and for any other product candidate in our future pipeline;
|
• |
develop additional product candidates that we identify, in-license or acquire;
|
• |
seek regulatory approvals for any product candidates that successfully complete clinical trials;
|
• |
contract to manufacture our product candidates;
|
• |
maintain, expand and protect our intellectual property portfolio;
|
• |
hire additional staff, including clinical, scientific, operational and financial personnel, to execute our business plan;
|
• |
add operational, financial and management information systems and personnel, including personnel to support our product development and potential future commercialization efforts;
|
• |
continue to operate as a public company; and
|
• |
establish on our own or with partners, a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain regulatory approval.
|
• |
the conduct of nonclinical studies;
|
• |
the design of clinical studies;
|
• |
per-patient trial costs;
|
• |
the number of patients that participate in the trials;
|
• |
the number of sites included in the trials;
|
• |
the countries in which the trials are conducted;
|
• |
the length of time required to enroll eligible patients;
|
• |
the number of doses that patients receive;
|
• |
the drop-out or discontinuation rates of patients;
|
• |
potential additional safety monitoring or other studies requested by regulatory agencies;
|
• |
the duration of patient follow-up;
|
• |
the phase of development of the product candidate;
|
• |
arrangements with contract research organizations and other service providers; and
|
• |
the efficacy and safety profile of the product candidates.
|
|
For the Three Months Ended
September 30,
|
|||||||||||
|
2023
|
2022
|
Change
|
|||||||||
|
||||||||||||
License and collaborations revenue
|
$
|
11,935
|
$
|
—
|
$
|
11,935
|
||||||
|
||||||||||||
Operating expenses:
|
||||||||||||
General and administrative
|
2,055
|
1,703
|
352
|
|||||||||
Research and development
|
3,494
|
2,835
|
659
|
|||||||||
Total operating expenses
|
5,549
|
4,538
|
1,011
|
|||||||||
Income (loss) from operations
|
6,386
|
(4,538
|
)
|
10,924
|
||||||||
Financing costs
|
(1,328
|
)
|
—
|
(1,328
|
)
|
|||||||
Fair value change in derivative liability
|
61
|
—
|
61
|
|||||||||
Other income, net
|
456
|
7
|
449
|
|||||||||
Income (loss) before income taxes
|
5,575
|
(4,531
|
)
|
10,106
|
||||||||
Provision for income taxes
|
(14
|
)
|
—
|
(14
|
)
|
|||||||
Net income (loss)
|
$
|
5,561
|
$
|
(4,531
|
)
|
$
|
10,092
|
|
For the Three Months Ended
September 30,
|
|||||||||||
|
2023
|
2022
|
Change
|
|||||||||
|
||||||||||||
External costs:
|
||||||||||||
Phentolamine Ophthalmic Solution 0.75% (“POS”)
|
$
|
1,561
|
$
|
1,637
|
$
|
(76
|
)
|
|||||
APX3330
|
1,294
|
692
|
602
|
|||||||||
Unallocated
|
158
|
173
|
(15
|
)
|
||||||||
Total external cost
|
3,013
|
2,502
|
511
|
|||||||||
Internal costs:
|
||||||||||||
Employee related expenses
|
469
|
324
|
145
|
|||||||||
Facilities, supplies and other
|
12
|
9
|
3
|
|||||||||
Total internal costs
|
481
|
333
|
148
|
|||||||||
Total research and development expenses
|
$
|
3,494
|
$
|
2,835
|
$
|
659
|
|
For the Nine Months Ended
September 30,
|
|||||||||||
|
2023
|
2022
|
Change
|
|||||||||
|
||||||||||||
License and collaborations revenue
|
$
|
17,358
|
$
|
—
|
$
|
17,358
|
||||||
|
||||||||||||
Operating expenses:
|
||||||||||||
General and administrative
|
8,680
|
5,215
|
3,465
|
|||||||||
Research and development
|
13,812
|
10,769
|
3,043
|
|||||||||
Total operating expenses
|
22,492
|
15,984
|
6,508
|
|||||||||
Loss from operations
|
(5,134
|
)
|
(15,984
|
)
|
10,850
|
|||||||
Financing costs
|
(1,328
|
)
|
—
|
(1,328
|
)
|
|||||||
Interest expense
|
—
|
(9
|
)
|
9
|
||||||||
Fair value change in derivative liability
|
61
|
—
|
61
|
|||||||||
Other income (expense), net
|
1,224
|
(60
|
)
|
1,284
|
||||||||
Loss before income taxes
|
(5,177
|
)
|
(16,053
|
)
|
10,876
|
|||||||
Provision for income taxes
|
(14
|
)
|
—
|
(14
|
)
|
|||||||
Net loss
|
$
|
(5,191
|
)
|
$
|
(16,053
|
)
|
$
|
10,862
|
|
For the Nine Months Ended
September 30,
|
|||||||||||
|
2023
|
2022
|
Change
|
|||||||||
|
||||||||||||
External costs:
|
||||||||||||
Phentolamine Ophthalmic Solution 0.75% (“POS”)
|
$
|
8,732
|
6,516
|
2,216
|
||||||||
APX 3330
|
2,947
|
2,631
|
316
|
|||||||||
Unallocated
|
536
|
446
|
90
|
|||||||||
Total external cost
|
12,215
|
9,593
|
2,622
|
|||||||||
Internal costs:
|
||||||||||||
Employee related expenses
|
1,578
|
1,099
|
479
|
|||||||||
Facilities, supplies and other
|
19
|
77
|
(58
|
)
|
||||||||
Total internal costs
|
1,597
|
1,176
|
421
|
|||||||||
Total research and development expenses
|
$
|
13,812
|
10,769
|
3,043
|
For the Nine Months Ended
September 30,
|
||||||||
|
2023
|
2022
|
||||||
Net cash used in operating activities
|
$
|
(5,660
|
)
|
$
|
(14,477
|
)
|
||
Net cash provided by (used in) investing activities
|
—
|
—
|
||||||
Net cash provided by financing activities
|
5,376
|
3,798
|
||||||
Net decrease in cash and cash equivalents
|
$
|
(284
|
)
|
$
|
(10,679
|
)
|
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4. |
Controls and Procedures
|
Item 1. |
Legal Proceedings
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3. |
Defaults Upon Senior Securities
|
Item 4. |
Mine Safety Disclosures
|
Item 5. |
Other Information
|
EXHIBIT
NUMBER
|
|
DESCRIPTION OF DOCUMENT
|
3.1
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
3.4
|
3.5
|
|
|
3.6
|
|
|
3.7
|
|
|
3.8
|
|
|
3.9
|
|
|
3.10
|
|
|
10.1
|
||
10.2
|
||
|
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
101.INS
|
|
Inline XBRL Instance Document.
|
|
|
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
104
|
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
|
+ |
Indicates management contract or compensatory plan.
|
* |
Documents are furnished not filed.
|
By:
|
/s/ George Magrath
|
|
|
George Magrath
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
By:
|
/s/ Amy Rabourn
|
|
|
Amy Rabourn
|
|
|
Senior Vice President of Finance
|
|
|
(Principal Financial Officer)
|
|