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Semper Paratus Acquisition (LGST) - 2024 Q2 - Quarterly Report
LGSTSemper Paratus Acquisition (LGST)2024-08-14 20:38

Financial Instruments and Liabilities - The Company reported a balance of 94,932,000inconvertiblepromissorynotesasofJanuary1,2024,whichdecreasedto94,932,000 in convertible promissory notes as of January 1, 2024, which decreased to 0 by June 30, 2024, due to derecognition upon conversion[27]. - The fair value of the Company's private warrants decreased from an initial value of 29,000to29,000 to 22,185 by June 30, 2024, reflecting a change in fair value of (6,815)[29].−TheCompanyreportedachangeinfairvalueofconvertiblepromissorynotesof(6,815)[29]. - The Company reported a change in fair value of convertible promissory notes of (48,468,678) during the first half of 2024[27]. - The Company’s fair value measurements for derivative warrant liabilities and written call option derivative liabilities were both classified as Level 3 inputs, totaling 22,185and22,185 and 213,214 respectively[31]. - The Company adopted ASU 2020-06 effective January 1, 2024, which simplifies the accounting for convertible instruments without impacting its consolidated financial statements[33]. - The Series A Preferred Stock has a conversion price of 4.00pershare,subjecttostandardantidilutionadjustments[56].−ConvertiblepromissorynoteswerevaluedusingtheProbabilityWeightedExpectedReturnMethod,withsignificantassumptionsincludingvolatilityanddiscountrate[134].MergersandAcquisitions−TotalnetliabilitiesacquiredintheMergeramountedto4.00 per share, subject to standard antidilution adjustments[56]. - Convertible promissory notes were valued using the Probability Weighted Expected Return Method, with significant assumptions including volatility and discount rate[134]. Mergers and Acquisitions - Total net liabilities acquired in the Merger amounted to (2,654,653), with total transaction costs incurred of 7,728,681[36].−TheCompanyassumed7,728,681[36]. - The Company assumed 3,613,000 in liabilities from the Merger, issuing Series B Preferred Stock to the Sponsor, which was later repurchased[38]. - The Series B Preferred Stock was repurchased in June 2024, resulting in no shares of Series B outstanding as of June 30, 2024[59]. - The company completed a merger on February 14, 2024, resulting in the renaming to Tevogen Bio Holdings Inc., with the merger accounted for as a reverse recapitalization[79]. - The company incurred 2,000,000infeestotheSponsorforadvisoryservicesrelatedtothemerger,with2,000,000 in fees to the Sponsor for advisory services related to the merger, with 250,000 payable in cash[62]. - Merger transaction costs recognized as period expenses for the six months ended June 30, 2024, were 7.5million,exceedingthecashreceivedfromthemerger[109].FinancingActivities−TheCompanyenteredintoaLoanAgreementprovidingforanunsecuredlineofcreditfacilityfortermloansofupto7.5 million, exceeding the cash received from the merger[109]. Financing Activities - The Company entered into a Loan Agreement providing for an unsecured line of credit facility for term loans of up to 36,000,000, with a freestanding purchase option valued at 14,000,000[32].−TheCompanyenteredintoaLoanAgreementforanunsecuredlineofcreditofupto14,000,000[32]. - The Company entered into a Loan Agreement for an unsecured line of credit of up to 36,000,000, allowing monthly draws of up to 1,000,000over36months[42].−TheLoanAgreementincludesapurchaseoptionfortheLendertobuyupto1,000,000 over 36 months[42]. - The Loan Agreement includes a purchase option for the Lender to buy up to 14,000,000 of shares at 70% of the Trailing VWAP, exercisable when the Trailing VWAP reaches 10.00[43].−ALoanAgreementwasenteredintoonJune6,2024,providingforanunsecuredlineofcreditfacilityofupto10.00[43]. - A Loan Agreement was entered into on June 6, 2024, providing for an unsecured line of credit facility of up to 36.0 million, with a contingent option for the lender to purchase at least 14.0millionofcommonstockinafutureprivateplacement[84].−Thecompanydrew14.0 million of common stock in a future private placement[84]. - The company drew 500,000 under its unsecured line of credit facility in July 2024, followed by an additional 500,000inAugust2024[70].−Thecompanyhasraisedatotalof500,000 in August 2024[70]. - The company has raised a total of 24.0 million from convertible promissory notes and 2.0millionfromSeriesAPreferredStocksinceJanuary2021[111].−Thecompanyplanstoevaluatevariousstrategiesforobtainingadditionalfunding,includingprivateplacementsandpublicofferings[123].StockandShareholderInformation−AsofJune30,2024,theCompanyhad168,826,402sharesofcommonstockissuedandoutstanding,withatotalof154,939,826sharesconsideredissuedandoutstandingforaccountingpurposes[52].−TheCompanyauthorizedandissued2,500sharesofSeriesAPreferredStockforgrossproceedsof2.0 million from Series A Preferred Stock since January 2021[111]. - The company plans to evaluate various strategies for obtaining additional funding, including private placements and public offerings[123]. Stock and Shareholder Information - As of June 30, 2024, the Company had 168,826,402 shares of common stock issued and outstanding, with a total of 154,939,826 shares considered issued and outstanding for accounting purposes[52]. - The Company authorized and issued 2,500 shares of Series A Preferred Stock for gross proceeds of 2.0 million, with a cumulative dividend rate of 5% per annum[53]. - The Company has authorized a total of 40,000,000 shares under the 2024 Omnibus Incentive Plan, with 20,651,046 shares remaining available for grant as of June 30, 2024[48]. - As of June 30, 2024, the company had 17,249,978 public warrants and 725,000 private placement warrants outstanding[68]. - The Company may issue up to 24,500,000 Earnout Shares if the volume-weighted average price (VWAP) of its common stock reaches specified thresholds over three years[37]. - Earnout Shares for former holders of Tevogen Bio common stock are structured in three tranches of 6,666,667 shares each, contingent on VWAP reaching 15.00,15.00, 17.50, and 20.00[39].−Thecompanyenteredintoanagreementtoissue600sharesofSeriesA−1PreferredStockforagrosspurchasepriceof20.00[39]. - The company entered into an agreement to issue 600 shares of Series A-1 Preferred Stock for a gross purchase price of 6,000,000, with a cumulative dividend cap of 15% per annum[57]. Financial Performance - For the three months ended June 30, 2024, the net loss was 9,663,447comparedtoanetlossof9,663,447 compared to a net loss of 22,184,353 for the same period in 2023, indicating a 56.4% improvement year-over-year[65]. - The net income attributable to common stockholders for the six months ended June 30, 2024, was 5,044,907,asignificantrecoveryfromanetlossof5,044,907, a significant recovery from a net loss of 52,940,497 in the same period of 2023[65]. - The company reported a basic net loss per share attributable to common stockholders of (0.04)forthethreemonthsendedJune30,2024[66].−ThenetlossforthethreemonthsendedJune30,2024,was(0.04) for the three months ended June 30, 2024[66]. - The net loss for the three months ended June 30, 2024, was 9.7 million, compared to a net loss of 22.2millionforthesameperiodin2023[99].−ForthesixmonthsendedJune30,2024,researchanddevelopmentexpensesreached22.2 million for the same period in 2023[99]. - For the six months ended June 30, 2024, research and development expenses reached 24.9 million, a substantial increase from 2.4millioninthesameperiodof2023[106].−GeneralandadministrativeexpensesforthesixmonthsendedJune30,2024,were2.4 million in the same period of 2023[106]. - General and administrative expenses for the six months ended June 30, 2024, were 13.2 million, compared to 2.1millionforthesameperiodin2023,largelyduetostock−basedcompensationandincreasedlegalfees[107].−ThetotaloperatingexpensesforthesixmonthsendedJune30,2024,amountedto2.1 million for the same period in 2023, largely due to stock-based compensation and increased legal fees[107]. - The total operating expenses for the six months ended June 30, 2024, amounted to 38.1 million, compared to 4.5millioninthesameperiodof2023[105].ResearchandDevelopment−Thecompanyhasongoingdevelopmentplansforproductcandidates,includingTVGN489forCOVID−19andLongCOVID,leveragingitsExacTcellplatform[71].−Thefirstclinicalproduct,TVGN489,aimstoaddressCOVID−19therapeuticsforimmunocompromisedandhigh−riskelderlypatients,withaPhase1trialcompletedinJanuary2023showingnodose−limitingtoxicities[78].−ThecompanyplanstolaunchapivotaltrialofTVGN489inCOVID−19patientswithBcellmalignancies,withfurtherstudiesinothervulnerablepopulationstofollow[78].−Thecompanyexpectssignificantincreasesinresearchanddevelopmentexpensesasitexpandsitsclinicaltrialsandmanufacturingcapabilities[89].−ResearchanddevelopmentexpensesforthethreemonthsendedJune30,2024,were4.5 million in the same period of 2023[105]. Research and Development - The company has ongoing development plans for product candidates, including TVGN 489 for COVID-19 and Long COVID, leveraging its ExacTcell platform[71]. - The first clinical product, TVGN 489, aims to address COVID-19 therapeutics for immunocompromised and high-risk elderly patients, with a Phase 1 trial completed in January 2023 showing no dose-limiting toxicities[78]. - The company plans to launch a pivotal trial of TVGN 489 in COVID-19 patients with B cell malignancies, with further studies in other vulnerable populations to follow[78]. - The company expects significant increases in research and development expenses as it expands its clinical trials and manufacturing capabilities[89]. - Research and development expenses for the three months ended June 30, 2024, were 4.1 million, a significant increase from 1.0millioninthesameperiodof2023,primarilyduetostock−basedcompensationexpenses[100].−Clinicaltrialandmanufacturingcostsarerecognizedbasedonvendorprogress,withpaymentsvaryingsignificantlyfromserviceperformanceperiods[129].−Nomaterialadjustmentshavebeenmadetopriorestimatesofaccruedresearchanddevelopmentexpenses,butfuturechangesmayoccurasnewinformationarises[130].CashFlowandCapitalRequirements−AsofJune30,2024,theaccumulateddeficitwas1.0 million in the same period of 2023, primarily due to stock-based compensation expenses[100]. - Clinical trial and manufacturing costs are recognized based on vendor progress, with payments varying significantly from service performance periods[129]. - No material adjustments have been made to prior estimates of accrued research and development expenses, but future changes may occur as new information arises[130]. Cash Flow and Capital Requirements - As of June 30, 2024, the accumulated deficit was 98.1 million, with cash reserves of 1.1million[82].−Thecompanyincurredanetcashoutflowof1.1 million[82]. - The company incurred a net cash outflow of 5.1 million from operating activities for the six months ended June 30, 2024, compared to a net cash outflow of 4.4millionforthesameperiodin2023[113][114].−Thecompanyreceived4.4 million for the same period in 2023[113][114]. - The company received 5.2 million in net cash from financing activities during the six months ended June 30, 2024, compared to 2.5millioninthesameperiodin2023[115].−Thecompanyanticipatesthatitsfuturecapitalrequirementswilldependontheprogressandcostsofclinicaltrialsandregulatoryreviews[121].−Thecompanyhasnotyetcommercializedanyproductsorgeneratedrevenuefromproductsales[111].−Thecompanyexpectstoincursignificantexpensesrelatedtoongoingclinicaltrialsandcommercializationeffortsforproductcandidates,particularlyTVGN489[119].−AsofJune30,2024,thecompanyhadcontractualobligationstotaling2.5 million in the same period in 2023[115]. - The company anticipates that its future capital requirements will depend on the progress and costs of clinical trials and regulatory reviews[121]. - The company has not yet commercialized any products or generated revenue from product sales[111]. - The company expects to incur significant expenses related to ongoing clinical trials and commercialization efforts for product candidates, particularly TVGN 489[119]. - As of June 30, 2024, the company had contractual obligations totaling 391,067, with $146,621 due within one year[124].