ITEM 2.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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You should read the following discussion of our financial condition and results of operations together with the unaudited interim condensed consolidated financial statements and the notes thereto included elsewhere in this report and other financial information included in this report. The following discussion may contain predictions, estimates and other forward looking statements that involve a number of risks and uncertainties, including those discussed under “
Part I — Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Special Note Regarding Forward Looking Statements
” in this report and under “
Part I — Item 1A. Risk Factors
” in our annual report on Form 10-K for the fiscal year ended December 31, 2015. These risks could cause our actual results to differ materially from any future performance suggested below.
Business Overview
We are a clinical stage biotechnology company focused on extending the life expectancy of cancer patients by improving the effectiveness of current standard-of-care treatments, including radiation therapy and chemotherapy. We are developing our lead product candidate,
transcrocetinate sodium
, also known as
trans sodium crocetinate
(“TSC”), for use in the many cancer types in which tumor oxygen deprivation (“hypoxia”) is known to diminish the effectiveness of current treatments. TSC is designed to target the cancer’s hypoxic micro-environment, re-oxygenating treatment-resistant tissue and making the cancer cells more susceptible to the therapeutic effects of standard-of-care radiation therapy and chemotherapy.
Our lead development programs target TSC against cancers known to be inherently treatment-resistant, including brain cancers and pancreatic cancer. A Phase 1/2 clinical trial of TSC combined with first-line radiation and chemotherapy in patients newly diagnosed with primary brain cancer (“glioblastoma” or “GBM”) was completed in 2015. This trial provided evidence of efficacy and safety in extending overall survival without the addition of toxicity. Based on these results, an End-of-Phase 2 meeting was held with the U.S. Food and Drug Administration (“FDA”) in August 2015, resulting in agreement on the design of a single 400 patient pivotal Phase 3 registration study which, if successful, would be sufficient to support approval. Discussions with the FDA regarding extension of the TSC development program from first line GBM into first-line pancreatic cancer treatment are currently underway. TSC has been granted Orphan Drug designations for the treatment of GBM and metastatic brain cancer.
In addition to cancer, TSC also has potential applications in other indications involving hypoxia, such as hemorrhagic shock, stroke, peripheral artery disease and neurodegenerative diseases.
On January 8, 2016, we entered into a business combination whereby a wholly-owned subsidiary of the Company merged with and into Diffusion LLC, with Diffusion LLC surviving as our wholly-owned subsidiary (the “Merger”). In connection with the Merger, the Company issued to the holders of outstanding units of Diffusion LLC an aggregate of approximately 8.1 million shares of the Company’s common stock (“Common Stock”) and, as a result, immediately following the completion of the Merger, the former equity holders of Diffusion LLC owned approximately 84.1% of the Common Stock and the stockholders of RestorGenex immediately prior to the Merger owned approximately 15.9% of the Common Stock, in each case, on a fully-diluted basis (subject to certain exceptions and adjustments). Also in connection with the Merger, the pre-Merger directors and officers of the Company tendered their resignations and the pre-Merger directors and officers of Diffusion LLC were appointed as the new directors and officers of the Company, and our corporate headquarters was moved from Buffalo Grove, Illinois to Charlottesville, Virginia. Following the completion of the Merger, the Company changed its corporate name from “RestorGenex Corporation” to “Diffusion Pharmaceuticals Inc.” and changed the trading symbol of the Company’s Common Stock from “RESX” to “DFFN.” In November 2016, our common stock was approved for listing on the NASDAQ Capital Market and will continue to trade under the ticker symbol "DFFN".
For accounting purposes, the Merger is treated as a “reverse acquisition” under generally acceptable accounting principles in the United States (“U.S. GAAP”) and Diffusion LLC is considered the accounting acquirer. Accordingly, Diffusion LLC’s historical results of operations will replace the Company’s historical results of operations for all periods prior to the Merger and, for all periods following the Merger, the results of operations of the combined company will be included in the Company’s financial statements. Unless otherwise stated, all comparisons in this Management’s Discussion and Analysis to prior year periods are to the results of Diffusion LLC for such period on a stand-alone basis.
Summary of Current Product Candidate Pipeline
The following table, as of September 30, 2016, summarizes the targeted clinical indications for Diffusion’s lead molecule, :
In addition to the TSC programs depicted in the table, we are exploring alternatives regarding how best to capitalize upon the legacy RestorGenex product candidate, RES-529, a novel PI3K/Akt/mTOR pathway inhibitor which has completed two Phase I clinical trials for age-related macular degeneration and was in preclinical development in oncology, specifically GBM.
The Company’s novel PI3K/Akt/mTOR pathway inhibitor, RES-529, is in preclinical development for oncology. Through a series of in vitro and in vivo animal models, RES-529 has been shown to have activity in several cancer types due to its ability to target and inhibit the PI3K/Akt/mTOR signal transduction pathway. RES-529 is a first-in-class inhibitor of both TORC1 and TORC2 that is mechanistically differentiated from other PI3K/Akt/mTOR pathway inhibitors currently in development. RES-529 has shown activity in both in vitro and in vivo glioblastoma animal models and has been demonstrated to be orally bioavailable and can cross the blood brain barrier.
Financial Summary
At September 30, 2016, we had cash and cash equivalents balances of $3.0 million. We have incurred operating losses since inception, have not generated any product sales revenue and have not achieved profitable operations.
We incurred a net loss of $5.4 million and $15.5 million for the three and nine months ended September 30, 2016, respectively. Our accumulated deficit as of September 30, 2016 was $57.6 million, and we expect to continue to incur substantial losses in future periods.
We anticipate that our operating expenses will increase substantially as we continue to advance our lead, clinical-stage product candidate, TSC. We anticipate that our expenses will substantially increase as we:
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complete regulatory and manufacturing activities and commence our planned Phase II and III clinical trials for TSC;
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continue the research, development and scale-up manufacturing capabilities to optimize products and dose forms for which we may obtain regulatory approval;
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conduct other preclinical and clinical studies to support the filing of a New Drug Application (“NDA”) with the FDA;
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maintain, expand and protect our global intellectual property portfolio;
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hire additional clinical, manufacturing, and scientific personnel; and
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add operational, financial and management information systems and personnel, including personnel to support our drug development and potential future commercialization efforts.
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We intend to use our existing cash and cash equivalents for working capital and to fund the research and development of TSC for use in the treatment of GBM, pancreatic cancer and brain metastases. We believe that
our cash and cash equivalents as of September 30, 2016 will enable us to fund our operating expenses and capital expenditure requirements into the early first quarter of 2017. However, we will need to secure additional funding in the future, from one or more equity or debt financings, collaborations, or other sources, in order to carry out all of our planned research and development activities with respect to TSC and our other product candidates.
Financial Operations Overview
Revenues
We have not yet generated any revenue from product sales. We do not expect to generate revenue from product sales for the foreseeable future.
Research and Development Expense
Research and development costs are charged to expense as incurred. These costs include, but are not limited to, impairment of our in-process research and development, or IPR&D, assets, employee-related expenses, including salaries, benefits, stock-based compensation and travel expense reimbursement, as well as expenses related to third-party contract research arrangements. Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. As we advance our product candidates, we expect the amount of research and development costs will continue to increase for the foreseeable future.
General and Administrative Expense
General and administrative expenses consist principally of salaries and related costs for executive and other personnel, including stock-based compensation, expenses associated with investment bank and other financial advisory services, and travel expenses. Other general and administrative expenses include costs associated with the Merger, professional fees that were incurred in connection with preparing to operate and operating as a public company, settlement of litigation matters, facility-related costs, communication expenses and professional fees for legal, patent prosecution and maintenance, and consulting and accounting services.
Interest Expense, Net
Interest expense, net consists principally of the interest expense recorded in connection with our convertible debt instruments offset by the interest earned from our cash and cash equivalents.
Income Tax Benefit
Since inception, we have incurred net losses and have not recorded any U.S. federal or state income tax benefits for the losses as they have been offset by valuation allowances. Indefinite lived intangibles, such as IPR&D, cannot be utilized for purposes of future realization of deferred tax assets. Income tax benefits recognized are derived from the impairment charges related to our abandonment of the future development efforts for the RES-440 IPR&D asset.
Results of Operations for Three and Nine Months Ended September 30, 2016 Compared to Three and Nine Months Ended September 30, 2015
The following table sets forth our results of operations for the three months ended September 30, 2016 and 2015.
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Three Months Ended September 30,
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2016
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2015
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Change
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Operating expenses:
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Research and development
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$
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1,941,743
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$
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922,234
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$
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1,019,509
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General and administrative
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3,852,406
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421,985
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|
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3,430,421
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Depreciation
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5,822
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|
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2,228
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|
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3,594
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Loss from operations
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5,799,971
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|
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1,346,447
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|
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4,453,524
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Interest expense, net
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1,378
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76,170
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|
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(74,792
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)
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Loss from operations before income tax benefit
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(5,801,349
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)
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(1,422,617
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)
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(4,378,732
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)
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Income tax benefit
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(364,796
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)
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-
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|
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(364,796
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)
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Net loss
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$
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(5,436,553
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)
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$
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(1,422,617
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)
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$
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(4,013,936
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)
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We recognized $1.9 million in research and development expenses during the three months ended September 30, 2016 compared to $0.9 million in research and development expenses during the three months ended September 30, 2015. This increase was primarily a result of the $1.0 million noncash impairment charge upon our abandonment of the future development efforts of the RES-440 IPR&D asset. In addition, we had $0.2 million of research and development stock-based compensation expense during the three months ended September 30, 2016 compared to $0.1 million during the same period in 2015. We expect that our research and development expenses will increase significantly in future periods compared to prior year periods due to our anticipated efforts to advance the research and development of our technologies and product candidates.
General and administrative expenses were $3.9 million during the three months ended September 30, 2016 compared to $0.4 million during the three months ended September 30, 2015. The increase in general and administrative costs were primarily attributable to the $2.5 million noncash charge in September 2016 upon the settlement of the Schmidt litigation matter and a $0.5 million increase in professional fees in connection with operating as a public company in 2016. We had $0.4 million in salaries and wages during the three months ended September 30, 2016 compared to $0.2 million during the three months ended September 30, 2015 due to our increase in headcount. In addition, we had $0.2 million of stock-based compensation expense during the three months ended September 30, 2016 compared to $0.1 million during the three months ended September 30, 2015.
During the three months ended September 30, 2016, we recognized tax benefit of $0.4 million in connection with the impairment charge for RES-440.
The following table sets forth our results of operations for the nine months ended September 30, 2016 and 2015.
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Nine Months Ended September 30,
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2016
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2015
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Change
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Operating expenses:
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Research and development
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$
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5,739,456
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$
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2,602,900
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$
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3,136,556
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General and administrative
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10,070,878
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1,227,860
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8,843,018
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Depreciation
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19,520
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6,154
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13,366
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Loss from operations
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(15,829,854
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)
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(3,836,914
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)
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(11,992,940
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)
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Interest expense, net
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854
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160,315
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(159,461
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)
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Loss from operations before income tax benefit
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(15,830,708
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)
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(3,997,229
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)
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(11,833,479
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)
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Income tax benefit
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(364,796
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)
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-
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(364,796
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)
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Net loss
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$
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(15,465,912
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)
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$
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(3,997,229
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)
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$
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(11,468,683
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)
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We recognized $5.7 million in research and development expenses during the nine months ended September 30, 2016 compared to $2.6 million in research and development expenses during the nine months ended September 30, 2015. This increase was primarily a result of $1.6 million in development expenses related to our TSC pancreatic cancer program and an increase in GBM-related drug manufacturing costs, and a $1.0 million noncash impairment charge upon our abandonment of future development efforts related to our RES-440 IPR&D asset. In addition, we had $0.6 million of research and development stock-based compensation expense during the nine months ended September 30, 2016 compared to $0.2 million during the same period in 2015. We expect that our research and development expenses will increase significantly in future periods compared to prior year periods due to our anticipated efforts to advance the research and development of our technologies and product candidates.
General and administrative expenses were $10.1 million during the nine months ended September 30, 2016 compared to $1.2 million during the nine months ended September 30, 2015. The increase in general and administrative costs were primarily attributable to acquisition costs of $2.0 million in connection with the reverse merger, $3.1 million in professional fees that were incurred in connection with preparing to operate as a public company and for investment bank advisory services and the $2.5 million noncash charge in September 2016 upon the settlement of the Schmidt litigation matter. We had $1.0 million salaries and wages during the nine months ended September 30, 2016 compared to $0.5 million during the nine months ended September 30, 2015 due to our increase in headcount. In addition, we had $0.5 million of stock-based compensation expense during the nine months ended September 30, 2016 compared to $0.2 million during the nine months ended September 30, 2015.
During the nine months ended September 30, 2016, we recognized tax benefit of $0.4 million in connection with the impairment charge for RES-440.
Liquidity and Capital Resources
Working Capital
Our working capital (deficit) totaled $(0.4) million, including $3.0 million in cash and cash equivalents, as of September 30, 2016.
The following table summarizes our working capital as of September 30, 2016 and December 31, 2015:
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September 30, 2016
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December 31, 2015
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Cash and cash equivalents
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$
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3,021,388
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$
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1,997,192
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Prepaid expenses, deposits and other assets
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265,125
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45,921
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Total current liabilities
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(3,681,305
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)
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(1,471,308
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)
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Working capital (deficit)
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$
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(394,792
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)
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$
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571,805
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We expect to continue to incur net losses for the foreseeable future. We intend to use our existing cash and cash equivalents for working capital and to fund the research and development of our product candidates.
Cash Flows
The following table sets forth our cash flows for the nine months ended September 30, 2016 and 2015:
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Nine Months Ended
September 30,
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Net cash (used in) provided by:
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2016
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2015
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Operating activities
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$
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(9,354,075
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)
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$
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(2,919,334
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)
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Investing activities
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8,498,271
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2,486,356
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Financing activities
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1,880,000
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—
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Net increase in cash and cash equivalents
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$
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1,024,196
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$
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(432,978
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)
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Operating Activities
Net cash used in operating activities of $9.4 million during the nine months ended September 30, 2016 was primarily attributable to our net loss of $15.5 million, the $0.4 reduction in our deferred tax liability that was offset by $6.0 million of non-cash charges and $0.5 million for the net change in our operating assets and liabilities. Noncash charges primarily consisted of stock-based compensation expense of $1.1 million, $1.0 million impairment charge in connection abandoning our future development efforts of RES-440, $2.5 million litigation settlement charge, and the issuance of 148,073 shares of our common stock for advisory services at an estimated fair value of $1.4 million. The net change in our operating assets and liabilities is primarily attributable to the increase in our accounts payable and accrued expenses due to the timing in processing our payroll and payment to our vendors for professional services and costs associated with our clinical and preclinical activities.
Net cash used in operating activities of $2.9 million during the nine months ended September 30, 2015 was primarily attributable to our net loss of $4.0 million that was offset by $0.5 million of non-cash charges and $0.5 million for the net change in our operating assets and liabilities. Noncash charges primarily consisted of stock-based compensation and non-cash interest related to our convertible debt.
Investing Activities
Net cash provided by investing activities was $8.5 million during the nine months ended September 30, 2016 compared to $2.5 million during the nine months ended September 30, 2015. We received $8.5 million in the Merger during the nine months ended September 30, 2016. During the nine months ended September 30, 2015, certificates of deposit matured and proceeds of $2.5 million were received.
Financing Activities
Net cash provided by financing activities was $1.9 million during the nine months ended September 30, 2016 and attributable to the cash proceeds received in connection with the issuance of 6.0% convertible notes in September 2016 in an aggregate principal amount of $1.9 million in connection with the settlement of the Schmidt litigation matter (the “2016 Convertible Notes”). There was no cash provided by or used in financing activities during the nine months ended September 30, 2015.
Capital Requirements
We expect to incur substantial expenses and generate significant operating losses as we intend to pursue our business strategy of developing our lead product candidate, TSC, for use in the treatment of GBM, pancreatic cancer and brain metastases.
To date, we have primarily used equity and debt financings to fund our ongoing business operations and short-term liquidity needs. We expect to continue this practice for the foreseeable future.
In January 2016, we completed a business combination whereby a wholly-owned subsidiary of the Company merged with Diffusion LLC. For accounting purposes, Diffusion LLC is considered the acquiring entity and, as a result, we acquired $8.5 million in cash. In September 2016, we issued the 2016 Convertible Notes and received cash proceeds of $1.9 million.
We believe our cash and cash equivalents as of September 30, 2016 will be sufficient to fund our planned operations into the early first quarter of 2017.
As of September 30, 2016, we did not have any existing credit facilities under which we could borrow funds. We may seek to raise additional funds through various sources, such as equity and debt financings, or through strategic collaborations and license agreements. We can give no assurances that we will be able to secure additional sources of funds to support our operations, or if such funds are available to us, that such additional financing will be sufficient to meet our needs or be on terms acceptable to us. This risk may increase if economic and market conditions deteriorate. If we are unable to obtain additional financing when needed, we may need to terminate, significantly modify or delay the development of our product candidates and our operations, or we may need to obtain funds through collaborators that may require us to relinquish rights to our technologies or product candidates that we might otherwise seek to develop or commercialize independently. If we are unable to raise any additional capital in the near-term and/or we cannot significantly reduce our expenses and are forced to terminate our operations, investors may experience a complete loss of their investment.
To the extent that we raise additional capital through the sale of our Common Stock, the interests of our current stockholders may be diluted. If we issue preferred stock or convertible debt securities, it could affect the rights of our common stockholders or reduce the value of our Common Stock. In particular, specific rights granted to future holders of preferred stock or convertible debt securities may include voting rights, preferences as to dividends and liquidation, conversion and redemption rights, sinking fund provisions, and restrictions on our ability to merge with or sell our assets to a third party. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements, as defined by the rules and regulations of the SEC that have or are reasonably likely to have a material effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources. As a result, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these arrangements.
Critical Accounting Policies
Certain of our critical accounting estimates require the application of significant judgment by management in selecting the appropriate assumptions in determining the estimate. By their nature, these judgments are subject to an inherent degree of uncertainty. We develop these judgments based on our historical experience, terms of existing contracts, our observance of trends in the industry and information available from other outside sources, as appropriate. Actual results may differ from these judgments under different assumptions or conditions. Different, reasonable estimates could have been used for the current period. Additionally, changes in accounting estimates are reasonably likely to occur from period to period. Both of these factors could have a material impact on the presentation of our financial condition, changes in financial condition or results of operations. We believe the following accounting estimates are the most critical to aid in fully understanding and evaluating our financial statements as they require our most subjective or complex judgments:
Goodwill
Goodwill is the excess of the cost of an acquired entity over the net amounts assigned to tangible and intangible assets acquired and liabilities assumed. We apply Accounting Standards Codification (ASC) 350 “
Goodwill and Other Intangible Assets
,” which requires testing goodwill for impairment on an annual basis. We assess goodwill for impairment as part of our annual reporting process on October 1 of each year. In between valuations, we conduct additional tests if circumstances indicate a need for testing. We evaluate goodwill on a consolidated basis as we are organized as a single reporting unit. We consider certain triggering events when evaluating whether an interim goodwill impairment analysis is warranted. Among these would be a significant long-term decrease in our market capitalization based on events specific to our operations. There were no triggering events requiring an impairment analysis during the nine months ended September 30, 2016.
Intangible Assets
Our sole intangible asset as of September 30, 2016 consists of an in-process research and development (“IPR&D”) intangible asset acquired as part of the reverse merger transaction on January 8, 2016. The fair value of the IPR&D assets was determined as of the acquisition date using the cost approach. The cost approach was chosen as we were not able to estimate an income stream attributable to the IPR&D assets given the fact that the related products have only completed limited preclinical and clinical trials and the timeline to commercial viability, if the FDA approval process is successful, is somewhat uncertain and would take a number of years. In August 2016, we abandoned future development efforts for the IPR&D asset associated with our RES-440 product candidate and recorded an impairment charge equal to the acquired value of RES-440. A
s the development efforts for our remaining RES-529 IPR&D asset continue, based on the facts and circumstances at the time of a future valuation for the purposes of assessing impairment, it is possible that the value for RES-529 currently on our unaudited condensed consolidated balance sheets could be substantially reduced or eliminated, which could result in a maximum pretax charge to operations equal to the current carrying value of our intangible asset of $8,639,000 as of September 30, 2016. We will test the IPR&D intangible asset for impairment on October 1, which is our annual impairment testing date, and we consider certain triggering events when evaluating whether an interim IPR&D impairment analysis is warranted. There were no triggering events requiring an impairment analysis for our RES-529 IPR&D asset during the three months ended September 30, 2016.
Stock-Based Compensation
We account for stock-based compensation based on the grant date fair value of the award. We recognize this cost as an expense over the requisite service period, which is generally the vesting period of the respective award. Forfeitures rates are used in stock-based compensation to adjust the recognized stock-based compensation expense to reflect the expected attrition of employees prior to their full vesting in stock-based compensation awards. Should an employee leave our company, management will adjust stock-based compensation to reflect the expense related to the portion of those awards that were unvested at the time of the employee’s departure. We use the Black-Scholes option-pricing model to determine the estimated fair value of stock options. Critical inputs into the Black-Scholes option-pricing model include: the estimated grant date fair value of our common stock; the option exercise price; the expected term of the option in years; the annualized volatility of the stock; the risk-free interest rate; and the annual rate of quarterly dividends on the stock. If any of the assumptions used in the Black-Scholes model changes significantly, stock-based compensation for future awards may differ materially compared with the awards granted previously. The inputs that create the most sensitivity in our option valuation are the volatility and expected term.
Given our limited history as a publicly traded company following the Merger in January 2016, we did not have sufficient trading data to calculate volatility based on our own common stock, and the expected volatility was calculated as of each grant date based on reported data for a peer group of publicly traded companies for which historical information was available. The expected term of the stock options was determined based upon the simplified approach for employees, allowed under SEC Staff Accounting Bulletin No. 110, which assumes that the stock options will be exercised evenly from vesting to expiration, as we did not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. As data associated with future exercises is obtained, the expected term of future grants will be adjusted accordingly. For non-employee awards, we use the remaining contractual term.
Special Note Regarding Forward-Looking Statements
This report includes forward-looking statements. We may, in some cases, use terms such as “believes,” “estimates,” “anticipates,” “expects,” “plans,” “intends,” “may,” “could,” “might,” “will,” “should,” “approximately” or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Forward-looking statements appear in a number of places throughout this Quarterly Report and include statements regarding our intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things, our ongoing and planned preclinical development and clinical trials, the timing of and our ability to make regulatory filings and obtain and maintain regulatory approvals for our product candidates, our intellectual property position, the degree of clinical utility of our products, particularly in specific patient populations, our ability to develop commercial functions, expectations regarding clinical trial data, our results of operations, cash needs, financial condition, liquidity, prospects, growth and strategies, the industry in which we operate and the trends that may affect the industry or us.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events, competitive dynamics and industry change, and depend on the economic circumstances that may or may not occur in the future or may occur on longer or shorter timelines than anticipated. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this Annual Report. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Annual Report, they may not be predictive of results or developments in future periods.
Actual results could differ materially from our forward-looking statements due to a number of factors, including risks related to:
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our ability to obtain additional financing;
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our estimates regarding expenses, future revenues, capital requirements and needs for additional financing;
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the success and timing of our preclinical studies and clinical trials;
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the difficulties in obtaining and maintaining regulatory approval of our products and product candidates, and the labeling under any approval we may obtain;
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our plans and ability to develop and commercialize our product candidates;
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our failure to recruit or retain key scientific or management personnel or to retain our executive officers;
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the accuracy of our estimates of the size and characteristics of the potential markets for our product candidates and our ability to serve those markets;
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regulatory developments in the United States and foreign countries;
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the rate and degree of market acceptance of any of our product candidates;
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obtaining and maintaining intellectual property protection for our product candidates and our proprietary technology;
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our ability to operate our business without infringing the intellectual property rights of others;
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recently enacted and future legislation regarding the healthcare system;
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the success of competing products that are or may become available; and
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the performance of third parties, including contract research organizations and manufacturers.
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You should also read carefully the factors described in the “Risk Factors” section of our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 25, 2016 (as amended) and elsewhere in our public filing to better understand the risks and uncertainties inherent in our business and underlying any forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report on Form 10-Q will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified timeframe, or at all.
Any forward-looking statements that we make in this Quarterly Report speak only as of the date of such statement, and, except as required by applicable law, we undertake no obligation to update such statements to reflect events or circumstances after the date of this Quarterly Report or to reflect the occurrence of unanticipated events. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.