Veru(US:VERU)2024-04-01 19:42Financial Performance - Veru Inc. reported a net loss of $38.7 million for the three months ended December 31, 2022, which was an increase from the previously reported net loss of $36.8 million due to a restatement of research and development expenses[29]. - The net revenues for the three months ended December 31, 2023, were $2,140,726, a decrease of 14.6% from $2,507,794 in the same period of 2022[47]. - The company reported an income tax benefit of $(72,439) for the three months ended December 31, 2023, compared to $(68,278) in the same period of 2022, reflecting a slight increase in tax benefits[13]. - Net loss for the three months ended December 31, 2023, was $8.3 million, or $(0.08) per share, compared to a net loss of $38.7 million, or $(0.48) per share, for the same period in 2022[155]. - Gross profit increased to $1.2 million with a gross profit margin of 54% for the fiscal 2023 period, compared to 28% in the fiscal 2022 period[160]. Assets and Liabilities - The total assets as of December 31, 2022, were restated to $101.3 million, down from $103.8 million, reflecting a decrease of $2.5 million in prepaid research and development costs[30]. - The company’s total liabilities were restated to $52.1 million, a decrease of $2.6 million from the previously reported $54.7 million, primarily due to adjustments in accrued research and development costs[30]. - The company's accounts receivable, net, decreased to $2,382,937 as of December 31, 2023, from $4,506,508 as of September 30, 2023[49]. - The allowance for credit losses was $3.9 million, primarily related to receivables from The Pill Club due to its Chapter 11 bankruptcy filed on April 18, 2023[52]. - The carrying amount of goodwill remained unchanged at $6.9 million as of December 31, 2023[59]. Cash Flow and Financing - The company anticipates that its current cash position and expected sales from the FC2 product will be sufficient to fund operations for the next 12 months[37]. - Cash and cash equivalents increased to $40.6 million as of December 31, 2023, compared to $9.6 million at September 30, 2023, largely due to a public offering[169]. - Net cash provided by financing activities was $37.0 million, primarily from a public offering that generated net proceeds of approximately $35.2 million[177]. - The company may pursue additional financing options, including debt financing and common stock offerings, to support its operations and growth strategies[37]. - The company has $35.1 million remaining available under its shelf registration statement filed in March 2023[67]. Research and Development - Veru Inc. is focused on developing novel medicines for metabolic diseases, oncology, and ARDS, with ongoing drug development programs including enobosarm and sabizabulin[27]. - Research and development expenses were $1.7 million for the three months ended December 31, 2023, a decrease from $20.6 million in the same period in 2022 due to a strategic refocus on promising drug candidates[153]. - The oncology drug pipeline focuses on enobosarm for metastatic breast cancer, with Stage 1a of the Phase 3 trial completed in October 2023, but further advancement is contingent on sufficient funding[127]. - The company has initiated a Phase 2b clinical study for enobosarm, with FDA clearance received in February 2024, targeting 90 sarcopenic obese or overweight elderly patients[123]. - The company plans to prioritize funding for enobosarm development and seeks external funding for sabizabulin, with no plans to advance Phase 3 development without such funding[137]. Asset Sales and Agreements - The company sold substantially all assets related to ENTADFI on April 19, 2023, which was previously approved by the FDA in December 2021[27]. - The company recorded a gain of approximately $5.7 million from the sale of ENTADFI assets during fiscal 2023, with an additional gain of $0.9 million recorded in the quarter ended December 31, 2023[108][110]. - The company entered into an asset purchase agreement for ENTADFI assets with a total purchase price of $20 million, including milestone payments of up to $80 million based on future net revenues[108]. - The company has agreed to pay $8.3 million to a supplier, resolving a dispute over $10 million owed, with modified payment terms[111]. - The company is at risk of not receiving future installment payments or milestone payments under the BWV Asset Purchase Agreement, with BWV potentially being insolvent[213]. Internal Controls and Compliance - The Company reported material weaknesses in internal controls over financial reporting, specifically in accounting for nonrecurring events and estimating research and development expenses[198][199]. - A comprehensive review of complex transactions and R&D expenses is underway to assess potential material misstatements due to identified weaknesses[202]. - The Company is implementing additional controls and review procedures to enhance internal controls related to complex transactions and R&D expense estimates[204][206]. - The company is not in compliance with the Jefferies Sales Agreement due to a failure to timely file required reports, which may prevent further sales under the agreement[190]. - The company has identified material weaknesses in its internal control over financial reporting as of December 31, 2023, affecting the effectiveness of its disclosure controls[196].