First Wave BioPharma(FWBI) - 2024 Q3 - Quarterly Report

Financial Position - The company reported stockholders' equity of $881,960 as of June 30, 2023, which was below the$2.5 million minimum requirement for continued listing on Nasdaq[176]. - The company has cash and cash equivalents of approximately $0.4 million as of September 30, 2024, and cumulative losses attributable to common stockholders of approximately$190.1 million[196]. - As of September 30, 2024, the aggregate outstanding obligations under the Credit Agreement were $6,997,583, including$5,360,000 in outstanding principal and $1,637,583 of accrued and unpaid interest[187]. - The company has received a Notice of Default and Acceleration related to the Credit Agreement, indicating ongoing events of default[185]. - The company is dependent on obtaining necessary funding from outside sources to continue operations, with no committed source of additional capital[183]. Mergers and Acquisitions - The company completed a merger with ImmunogenX, Inc. in March 2024, acquiring IMGX's biologic Latiglutenase for celiac disease treatment[169]. - A binding term sheet was entered into with Journey Therapeutics, Inc. for the acquisition of 100$4.0 million from the March 2024 Offering, which included 173,100 shares of Common Stock and warrants[172]. - The May 2024 Offering generated gross proceeds of approximately $1.1 million, consisting of 275,000 shares of Common Stock and associated warrants[173]. - The company anticipates needing to raise substantial additional capital in the near term to fund continuing operations and satisfy existing obligations[196]. Operational Changes - The company reduced its workforce from 15 employees to 11 employees in July 2024 as part of cost reduction measures[180]. - The company entered into a consulting agreement with former CEO James Sapirstein, paying$400 per hour for services rendered[181]. - The company is exploring strategic alternatives for its Niclosamide program, which is currently under a non-binding term sheet for potential sale[171]. - The company is focusing on its Adrulipase and Capeserod programs while evaluating the Niclosamide program[167]. Research and Development Expenses - Research and development expenses for Q3 2024 totaled approximately $0.2 million, a decrease of approximately$0.8 million, or 80%, compared to $1.0 million in Q3 2023[204]. - Research and development expenses for the three months ended September 30, 2024, were$207,000, a decrease of approximately $804,000, or 80$1,011,000 for the same period in 2023[208]. - Research and development expenses for the nine months ended September 30, 2024, totaled approximately $0.9 million, a decrease of approximately$2.8 million, or 76%, compared to $3.7 million for the same period in 2023[212]. - The company expects research and development expenses to decrease during the remainder of the fiscal year as it conserves cash[205]. General and Administrative Expenses - General and administrative expenses for Q3 2024 totaled approximately$1.7 million, a decrease of approximately $0.7 million, or 30$2.4 million in Q3 2023[207]. - General and administrative expenses for the three months ended September 30, 2024, totaled $1.7 million, a decrease of approximately$736,000, or 30%, from $2.4 million in the prior year[208]. - General and administrative expenses for the nine months ended September 30, 2024, were approximately$13.5 million, an increase of approximately $5.6 million, or 70$7.9 million in the prior year[215]. - The company expects general and administrative expenses to decrease during the remainder of the fiscal year as it conserves cash[209]. Net Loss and Cash Flow - The net loss for the three months ended September 30, 2024, was approximately $2.6 million, a decrease of approximately$0.9 million, or 25%, from a net loss of $3.4 million for the same period in 2023[210]. - The net loss for the nine months ended September 30, 2024, was approximately$5.8 million, a decrease of approximately $5.9 million, or 50$11.7 million for the same period in 2023[218]. - Net cash used in operating activities during the nine months ended September 30, 2024, was approximately $9.0 million, primarily due to a net loss of$5.8 million and a non-cash change in deferred tax valuation allowance of $10.6 million[219]. - Net cash provided by financing activities for the nine months ended September 30, 2024, was approximately$5.6 million, primarily from net proceeds of approximately $4.5 million from registered direct offerings[223]. Discontinued Operations - Loss from discontinued operations for the three months ended September 30, 2024, was$0.7 million, representing expenses related to a disposal group classified as held for sale[210].