10-Q: Quarterly report pursuant to Section 13 or 15(d)
Published on November 9, 2022
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
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 No.
(Exact Name of Registrant as Specified in Its Charter)
|
||
(State or other jurisdiction of |
(I.R.S. Employer |
(Address of Principal Executive Offices, including zip code)
(
(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 |
The |
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. ☒
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 during the preceding 12 months (or for such shorter period that the registrant was required to submit). ☒
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 |
☐ |
|
|
|
|
☒ |
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.)
On November 8, 2022, there were
KIORA PHARMACEUTICALS, INC.
Table of Contents
QUARTERLY REPORT ON FORM 10-Q
For the Period Ended September 30, 2022
INDEX
Page |
||
3 |
||
Condensed Consolidated Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021 |
3 |
|
4 |
||
5 |
||
9 |
||
10 |
||
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
23 |
|
29 |
||
29 |
||
30 |
||
30 |
||
30 |
||
30 |
||
30 |
||
30 |
||
30 |
||
31 |
1
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains statements that are not statements of historical fact and are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The forward-looking statements are principally, but not exclusively, contained in “Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited to, statements about management’s confidence or expectations, and our plans, objectives, expectations, and intentions that are not historical facts. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “goals,” “sees,” “estimates,” “projects,” “predicts,” “intends,” “think,” “potential,” “objectives,” “optimistic,” “strategy,” and similar expressions intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:
● | the timing and success of preclinical studies and clinical trials conducted by us and our development partners; |
● | the ability to obtain and maintain regulatory approval of our product candidates, and the labeling for any approved products; |
● | the scope, progress, expansion, and costs of developing and commercializing our product candidates; |
● | the size and growth of the potential markets for our product candidates and the ability to serve those markets; |
● | our expectations regarding our expenses and revenue, the sufficiency of our cash resources and needs for additional financing; |
● | the rate and degree of market acceptance of any of our product candidates; |
● | our expectations regarding competition; |
● | our anticipated growth strategies; |
● | our ability to attract or retain key personnel; |
● | our ability to establish and maintain development partnerships; |
● | our expectations regarding federal, state and foreign regulatory requirements; |
● | regulatory developments in the U.S. and foreign countries; |
● | our ability to obtain and maintain intellectual property protection for our product candidates; |
● | the anticipated trends and challenges in our business and the market in which we operate; and |
● | the impact of the evolving COVID-19 pandemic and the global response thereto. |
We discuss many of these risks in detail under the heading “Item 1A. Risk Factors” beginning on page 23 of our Annual Report on Form 10-K/A, as filed with the Securities and Exchange Commission, or the SEC, on July 7, 2022, or the Annual Report. You should carefully review all these factors, as well as other risks described in our public filings, and you should be aware that there may be other factors, including factors of which we are not currently aware, that could cause these differences.
Also, these forward-looking statements represent our estimates and assumptions only as of the date of this report. We may not update these forward-looking statements, even though our situation may change in the future, unless we have obligations under the federal securities laws to update and disclose material developments related to previously disclosed information.
Kiora Pharmaceuticals, Inc. is referred to herein as “we,” “our,” “us,” and “the Company.”
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
KIORA PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
|
September 30, 2022 |
|
||||
|
|
(unaudited) |
|
December 31, 2021 |
||
ASSETS |
|
|
|
|
||
Current Assets: |
|
|
|
|
||
Cash and Cash Equivalents |
$ |
|
$ |
|
||
Prepaid Expenses and Other Current Assets |
|
|
|
|
||
Tax Receivables |
|
|
|
|
||
Total Current Assets |
|
|
|
|
||
Non-Current Assets: |
||||||
Property and Equipment, Net |
|
|
|
|
||
Restricted Cash |
|
|
|
|
||
Intangible Assets and In-Process R&D, Net |
|
|
|
|
||
Operating Lease Assets |
|
|
||||
Other Assets |
|
|
|
|
||
Total Assets |
$ |
|
$ |
|
||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
||
Current Liabilities: |
|
|
|
|
||
Accounts Payable |
$ |
|
$ |
|
||
Accrued Expenses |
|
|
|
|
||
Operating Lease Liabilities |
|
|
|
|
||
Contingent Consideration |
|
— |
||||
Total Current Liabilities |
|
|
|
|
||
Non-Current Liabilities: |
|
|
|
|||
Contingent Consideration, Non-Current |
|
|
|
|
||
Deferred Tax Liability |
|
|
|
|
||
Operating Lease Liabilities, Non-Current |
|
|
||||
Total Non-Current Liabilities |
|
|
|
|
||
Total Liabilities |
|
|
|
|
||
Commitments and Contingencies (Note 9) |
|
|
|
|
||
Stockholders’ Equity: |
|
|
|
|
||
Preferred Stock, $ |
|
|
||||
Common Stock, $ |
|
|
|
|
||
Additional Paid-In Capital |
|
|
|
|
||
Accumulated Deficit |
|
( |
|
( |
||
Accumulated Other Comprehensive Loss |
|
( |
|
( |
||
Total Stockholders’ Equity |
|
|
|
|
||
Total Liabilities and Stockholders’ Equity |
$ |
|
$ |
|
See Accompanying Notes to Condensed Consolidated Financial Statements.
3
KIORA PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited)
Three Months Ended September 30, |
Nine Months Ended, September 30, |
|||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||
Operating Expenses: |
|
|
|
|
||||||||
General and Administrative |
$ |
|
$ |
|
$ |
|
$ |
|
||||
Research and Development |
|
|
|
|
||||||||
Executive Severance |
— |
— |
|
— |
||||||||
Change in Fair Value of Contingent Consideration |
|
|
|
( |
||||||||
Total Operating Expenses |
|
|
|
|
|
|
||||||
Operating Loss Before Other Expense |
( |
( |
|
( |
|
( |
||||||
Other Income (Expense), Net: |
|
|
|
|||||||||
Change in Fair Value of Warranty Liability |
( |
— |
( |
— |
||||||||
Gain on Forgiveness of Loan |
— |
— |
— |
|
||||||||
Interest Income (Expense), Net |
|
|
|
|
|
( |
||||||
Other Income (Expense), Net |
|
— |
|
— |
||||||||
Total Other Income (Expense), Net |
( |
|
|
( |
|
|
||||||
Net Loss |
$ |
( |
$ |
( |
$ |
( |
$ |
( |
||||
Net Loss per Common Share - Basic and Diluted |
( |
( |
( |
( |
||||||||
Weighted Average Shares Outstanding - Basic and Diluted |
|
|
|
|
|
|||||||
Other Comprehensive Loss: |
|
|
||||||||||
Net Loss |
$ |
( |
$ |
( |
$ |
( |
$ |
( |
||||
Foreign Currency Translation Adjustments |
( |
( |
|
( |
|
( |
||||||
Comprehensive Loss |
$ |
( |
$ |
( |
$ |
( |
$ |
( |
See Accompanying Notes to Condensed Consolidated Financial Statements.
4
KIORA PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
Three Months Ended September 30, 2022 and 2021
(unaudited)
Accumulated |
||||||||||||||||||||||
Additional |
Other |
Total |
||||||||||||||||||||
Preferred Stock |
Common Stock |
Paid-In |
Accumulated |
Comprehensive |
Stockholders’ |
|||||||||||||||||
|
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Capital |
|
Deficit |
|
Loss |
|
Equity |
||||||
Balance at June 30, 2022 |
|
|
$ |
— |
|
|
$ |
|
$ |
|
$ |
( |
$ |
( |
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Stock-Based Compensation |
|
— |
|
— |
|
— |
|
— |
|
|
|
— |
|
— |
|
|
||||||
Issuance of Common Stock from Public Offering, Net of Offering Costs of $ |
— |
— |
|
|
|
— |
— |
|
||||||||||||||
Issuance of Series E Preferred Stock from Public Offering, Net of Offering Costs of $ |
|
|
— |
— |
|
— |
— |
|
||||||||||||||
Conversion of Series E Preferred Stock into common stock |
( |
( |
|
|
( |
— |
— |
— |
||||||||||||||
Reclassification of Warrant Liability |
|
— |
|
— |
|
— |
|
— |
|
|
|
— |
|
— |
|
|
||||||
Adjustments Due to the Rounding Impact from the Reverse Stock Split for Fractional Shares |
— |
— |
( |
— |
( |
— |
— |
( |
||||||||||||||
Foreign Currency Translation Adjustment |
— |
— |
— |
— |
— |
— |
( |
( |
||||||||||||||
Net Loss |
|
— |
|
— |
|
— |
|
— |
|
— |
|
( |
|
— |
|
( |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at September 30, 2022 |
|
|
$ |
— |
|
$ |
|
$ |
|
$ |
( |
$ |
( |
$ |
|
5
Accumulated |
|
|||||||||||||||||||||
Additional |
Other |
Total |
||||||||||||||||||||
Preferred Stock |
Common Stock |
Paid-In |
Accumulated |
Comprehensive |
Stockholders’ |
|||||||||||||||||
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Capital |
|
Deficit |
|
Loss |
|
Equity |
|||||||
Balance at June 30, 2021 |
|
|
$ |
|
|
|
$ |
|
$ |
|
$ |
( |
$ |
( |
$ |
|
||||||
Stock-Based Compensation |
|
— |
|
— |
|
— |
|
— |
|
|
|
— |
|
— |
|
|
||||||
Conversion of Series C Preferred Stock into Common Stock |
( |
( |
|
|
( |
— |
— |
— |
||||||||||||||
Issuance of Common Stock from Registered Direct Offering, Net of Offering Costs of $ |
— |
— |
|
|
|
— |
— |
|
||||||||||||||
Foreign Currency Translation Adjustment |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
( |
|
( |
||||||
Net Loss |
|
— |
|
— |
|
— |
|
— |
|
— |
|
( |
|
— |
|
( |
||||||
Balance at September 30, 2021 |
|
|
$ |
— |
|
|
$ |
|
$ |
|
$ |
( |
$ |
( |
$ |
|
6
KIORA PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
Nine Months Ended September 30, 2022 and 2021
(unaudited)
Accumulated |
||||||||||||||||||||||
Additional |
Other |
Total |
||||||||||||||||||||
Preferred Stock |
Common Stock |
Paid-In |
Accumulated |
Comprehensive |
Stockholders’ |
|||||||||||||||||
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Capital |
|
Deficit |
|
Loss |
|
Equity |
|||||||
Balance at December 31, 2021 |
|
|
$ |
— |
|
|
$ |
|
$ |
|
$ |
( |
$ |
( |
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Stock-Based Compensation |
|
— |
— |
|
— |
— |
|
|
|
— |
|
— |
|
|
||||||||
Issuance of Common Stock from Panoptes Holdback Shares |
— |
— |
|
|
( |
— |
— |
— |
||||||||||||||
Issuance of Common Stock from Public Offering, Net of Offering Costs of $ |
— |
— |
|
|
|
— |
— |
|
||||||||||||||
Issuance of Series E Preferred Stock from Public Offering, Net of Offering Costs of $ |
|
|
— |
— |
|
— |
— |
|
||||||||||||||
|
|
|||||||||||||||||||||
Conversion of Series E Preferred Stock into common stock |
|
( |
( |
|
|
( |
— |
— |
— |
|||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
Reclassification of Warrant Liability |
|
— |
— |
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|||||||
Adjustments Due to the Rounding Impact from the Reverse Stock Split for Fractional Shares |
— |
— |
( |
— |
( |
— |
— |
( |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Foreign Currency Translation Adjustment |
|
— |
— |
|
— |
|
— |
|
— |
|
— |
|
( |
|
( |
|||||||
Net Loss |
|
— |
— |
|
— |
|
— |
|
— |
|
( |
|
— |
|
( |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance at September 30, 2022 |
|
|
$ |
— |
|
|
$ |
|
$ |
|
$ |
( |
$ |
( |
$ |
|
7
Accumulated |
|
|||||||||||||||||||||
Additional |
Other |
Total |
||||||||||||||||||||
Preferred Stock |
Common Stock |
Paid-In |
Accumulated |
Comprehensive |
Stockholders’ |
|||||||||||||||||
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Capital |
|
Deficit |
|
Loss |
|
Equity |
|||||||
Balance at December 31, 2020 |
|
|
$ |
|
|
|
$ |
|
$ |
|
$ |
( |
$ |
( |
$ |
|
||||||
Stock-Based Compensation |
|
— |
|
— |
|
— |
|
— |
|
|
|
— |
|
— |
|
|
||||||
Conversion of Series C Preferred Stock into Common Stock |
( |
( |
|
|
( |
— |
— |
— |
||||||||||||||
Issuance of Common Stock from Warrants, Net |
— |
— |
|
|
|
|
— |
— |
|
|||||||||||||
Issuance of Common Stock from Private Placement, Net of Offering Costs of $ |
— |
— |
|
|
|
|
— |
— |
|
|||||||||||||
Issuance of Common Stock from Registered Direct Offering, Net of Offering Costs of $ |
— |
— |
|
|
|
— |
— |
|
||||||||||||||
Foreign Currency Translation Adjustment |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
( |
|
( |
||||||
Net Loss |
|
— |
|
— |
|
— |
|
— |
|
— |
|
( |
|
— |
|
( |
||||||
Balance at September 30, 2021 |
|
|
$ |
— |
|
|
$ |
|
$ |
|
$ |
( |
$ |
( |
$ |
|
See Accompanying Notes to Condensed Consolidated Financial Statements.
8
KIORA PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Nine Months Ended September 30, |
||||||
|
|
2022 |
|
2021 |
||
Operating Activities: |
|
|
|
|
||
Net Loss |
$ |
( |
$ |
( |
||
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: |
|
|
|
|
||
Depreciation and Amortization |
|
|
|
|
||
Reduction of Right-of-Use Assets |
|
|
|
|
||
Stock-Based Compensation |
|
|
|
|
||
Change in Fair Value of Contingent Consideration |
|
( |
||||
Change in Fair Value of Warrant Liability |
|
— |
||||
Paycheck Protection Program Loan Forgiveness |
— |
( |
||||
Gain on Disposal of Equipment |
( |
— |
||||
Changes in Operating Assets and Liabilities: |
|
|
|
|
||
Prepaid Expenses |
|
|
|
|
||
Tax Receivable |
|
( |
|
( |
||
Other Assets |
|
|
|
|
||
Accounts Payable |
|
|
|
( |
||
Lease Liabilities |
|
( |
|
( |
||
Accrued Expenses |
|
|
|
|
||
Net Cash Used in Operating Activities |
|
( |
|
( |
||
Investing Activities: |
||||||
Purchases of Property and Equipment |
— |
( |
||||
Proceeds on Sale of Equipment |
|
— |
||||
Net Cash Provided by (Used in) Investing Activities |
|
( |
||||
Financing Activities: |
|
|
|
|
||
Proceeds from Public Offerings, Net of Offering Costs |
|
|
|
|
||
Exercise of Warrants |
— |
|
||||
Net Cash Provided by Financing Activities |
|
|
|
|
||
Effect of Exchange Rate Changes on Cash |
|
( |
|
( |
||
Net (Decrease) Increase in Cash |
|
( |
|
|
||
Cash, Cash Equivalents and Restricted Cash, Beginning of Period |
|
|
|
|
||
Cash, Cash Equivalents and Restricted Cash, End of Period |
$ |
|
$ |
|
||
Supplemental Disclosures of Noncash Operating and Financing Activities |
|
|
||||
Creation of Right-of-Use Assets and Related Lease Liabilities |
$ |
|
$ |
|
||
Conversion of Preferred Stock into Common Stock |
$ |
|
$ |