GeoVax Labs(GOVX) - 2019 Q3 - Quarterly Report

PART I Item 1. Condensed Consolidated Financial Statements The company's financial statements for the period ended September 30, 2019, reflect a continued net loss, a stockholder's deficiency, and a critical 'going concern' issue with cash sufficient only into the first quarter of 2020 Condensed Consolidated Balance Sheets As of September 30, 2019, GeoVax reported total assets of $816,529 and a stockholders' deficiency of $1,020,719, with a significant increase in cash and cash equivalents compared to December 31, 2018 Condensed Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Item | September 30, 2019 ($) | December 31, 2018 ($) | | :--- | :--- | :--- | | Cash and cash equivalents | $569,359 | $259,701 | | Total current assets | $795,590 | $619,704 | | Total assets | $816,529 | $642,064 | | Total current liabilities | $1,808,081 | $1,624,831 | | Total liabilities | $1,837,248 | $1,664,411 | | Total stockholders' equity (deficiency) | ($1,020,719) | ($1,022,347) | Condensed Consolidated Statements of Operations For the nine months ended September 30, 2019, GeoVax reported a net loss of $1.78 million on revenues of $0.91 million, with an improved loss per share of ($0.37) primarily due to increased weighted average shares outstanding Statement of Operations Summary (Unaudited) | Metric | Nine Months Ended Sep 30, 2019 ($) | Nine Months Ended Sep 30, 2018 ($) | | :--- | :--- | :--- | | Grant and collaboration revenue | $907,382 | $663,908 | | Total operating expenses | $2,688,808 | $2,592,291 | | Loss from operations | ($1,781,426) | ($1,928,383) | | Net loss | ($1,780,036) | ($1,925,749) | | Loss per common share (Basic and diluted) | ($0.37) | ($6.43) | Condensed Consolidated Statements of Cash Flows For the nine months ended September 30, 2019, net cash used in operating activities was $1.12 million, primarily funded by $1.43 million from financing activities, resulting in a net increase in cash of $309,658 Cash Flow Summary (Unaudited) | Cash Flow Activity (Nine Months Ended) | September 30, 2019 ($) | September 30, 2018 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | ($1,117,737) | ($1,041,485) | | Net cash used in investing activities | ($4,272) | $0 | | Net cash provided by financing activities | $1,431,667 | $1,240,000 | | Net increase in cash and cash equivalents | $309,658 | $198,515 | | Cash and cash equivalents at end of period | $569,359 | $511,242 | Notes to Condensed Consolidated Financial Statements The notes detail the company's clinical-stage biotechnology business, disclose substantial doubt about its going concern ability with cash sufficient only into Q1 2020, and describe significant financing activities including convertible preferred stock issuances and a reverse stock split - The company is a clinical-stage biotechnology firm developing immunotherapies and vaccines using its MVA-VLP platform, with programs focused on HIV, hemorrhagic fevers (Ebola, Lassa), Zika, malaria, and cancer[22][23] - There is substantial doubt about the company's ability to continue as a going concern, with existing cash resources expected to fund planned operations only into the first quarter of 2020[30] - On April 30, 2019, the company effected a one-for-five hundred reverse stock split of its common stock, with all share and per-share information retroactively restated[28][51] - During 2019, the company engaged in complex financing, issuing Series G, H, and I Convertible Preferred Stock and exchanging older series to raise capital[46][47][49] - Revenue from government grants for the nine months ended September 30, 2019, was $754,022, with $1,835,225 in approved grant funds remaining available for use in 2019 and 2020[58][91] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's critical financial condition, including a 'going concern' issue, a working capital deficit, and reliance on equity financing, while also addressing potential delisting from the OTCQB market and plans for a reverse stock split Liquidity and Capital Resources The company faces critical liquidity challenges with a working capital deficit and cash sufficient only into Q1 2020, relying on equity financing while also addressing OTCQB listing non-compliance and insufficient authorized shares - The company has a 'going concern' opinion from its auditors, with existing cash resources sufficient to fund operations only into the first quarter of 2020[78] - As of September 30, 2019, the company had a working capital deficit of $1,012,491 and cash and cash equivalents of $569,359[69] - Financing activities in the first nine months of 2019 provided $1.43 million in net cash, primarily from the sale of Series G and Series I convertible preferred stock[74] - On October 24, 2019, the company was notified of non-compliance with OTCQB listing standards for failing to maintain a minimum bid price of $0.01, facing potential removal from the OTCQB marketplace if not cured by January 22, 2020[81] - The company has insufficient authorized common stock to fulfill obligations for convertible preferred stock and warrants, and management plans to seek stockholder approval for another reverse stock split[79][80] Results of Operations For the nine months ended September 30, 2019, the net loss decreased to $1.78 million, while grant and collaboration revenues increased, and both research and development and general and administrative expenses rose Financial Performance Summary (Unaudited) | Metric | Nine Months Ended Sep 30, 2019 ($) | Nine Months Ended Sep 30, 2018 ($) | | :--- | :--- | :--- | | Net Loss | $1,780,036 | $1,925,749 | | Grant and Collaboration Revenues | $907,382 | $663,908 | | Research and Development Expenses | $1,474,619 | $1,416,892 | | General and Administrative Expenses | $1,214,189 | $1,175,399 | - Grant revenues fluctuate based on the timing of expenditures for supported activities, with $754,022 in grant revenue for the nine months of 2019, primarily from Lassa Fever and Zika grants[90][91] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company states this item is not applicable - Not applicable[99] Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of the reporting period, with no material changes in internal control over financial reporting during the quarter - Management concluded that as of September 30, 2019, the company's disclosure controls and procedures were effective[101] - There were no changes in internal control over financial reporting during the third quarter of 2019 that materially affected, or are reasonably likely to materially affect, internal controls[102] PART II – OTHER INFORMATION Item 1. Legal Proceedings The company reports no legal proceedings - None[105] Item 1A. Risk Factors As a smaller reporting company, the company is not required to provide this information - As a smaller reporting company, the company is not required to provide the information for this item[106] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities not previously disclosed on a Form 8-K - None not previously disclosed on Form 8-K[107] Item 6. Exhibits This section lists the exhibits filed with the 10-Q report, including certificates of designation for preferred stock, securities purchase agreements, exchange agreements, and officer certifications