VistaGen Therapeutics(US:VTGN)2022-02-10 21:16PART I. FINANCIAL INFORMATION Condensed Consolidated Financial Statements (Unaudited) VistaGen reported a net loss of $31.1 million for the nine months ended December 31, 2021, driven by increased R&D, with recurring losses and an accumulated deficit of $250.9 million raising going concern doubts Condensed Consolidated Balance Sheet Data (in USD) | Balance Sheet Items | Dec 31, 2021 (unaudited) | Mar 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $83,700,200 | $103,108,300 | | Total current assets | $86,770,300 | $104,117,500 | | Total assets | $90,536,100 | $108,281,300 | | Total current liabilities | $6,420,800 | $4,189,000 | | Total liabilities | $10,558,300 | $16,302,800 | | Total stockholders' equity | $79,977,800 | $91,978,500 | Condensed Consolidated Statements of Operations (in USD) | Operations Data (Nine Months Ended) | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Sublicense revenue | $1,070,000 | $647,600 | | Research and development expenses | $23,637,100 | $7,585,500 | | General and administrative expenses | $8,518,800 | $4,776,900 | | Loss from operations | ($31,085,900) | ($11,714,800) | | Net loss | ($31,074,000) | ($11,723,300) | | Net loss per common share (basic and diluted) | ($0.16) | ($0.19) | Condensed Consolidated Statements of Cash Flows (in USD) | Cash Flow Data (Nine Months Ended) | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($29,668,000) | ($6,791,600) | | Net cash used in investing activities | ($200,300) | ($249,900) | | Net cash provided by financing activities | $10,460,200 | $110,017,500 | | Net (decrease) increase in cash | ($19,408,100) | $102,976,000 | - The company has experienced recurring losses and negative cash flows, resulting in an accumulated deficit of approximately $250.9 million as of December 31, 20213845 - Management has concluded that its cash position is not sufficient to fund planned operations for the next twelve months, which raises substantial doubt about its ability to continue as a going concern without securing additional capital197 Management's Discussion and Analysis of Financial Condition and Results of Operations Increased R&D expenses, particularly for the PH94B Phase 3 program, drove a higher net loss and cash burn, necessitating additional financing despite $10.7 million raised, as current cash of $83.7 million is insufficient for the next year - The company is a late-stage clinical biopharmaceutical firm focused on CNS disorders with three clinical-stage candidates: PH94B (anxiety), PH10 (depression), and AV-101 (neurological disorders)126127 - The primary focus is the PALISADE Phase 3 Program for PH94B for the acute treatment of social anxiety disorder (SAD), with topline results from the PALISADE-1 study anticipated in mid-2022138 Comparison of Operating Expenses (Nine Months Ended Dec 31, in USD) | Expense Category | 2021 | 2020 | Change | | :--- | :--- | :--- | :--- | | Research and Development | $23,637,000 | $7,586,000 | +$16,051,000 | | General and Administrative | $8,519,000 | $4,777,000 | +$3,742,000 | - The increase in R&D expense was primarily driven by costs for the PALISADE Phase 3 Program for PH94B, including PALISADE-1 and PALISADE-2 trials, and manufacturing activities for both PH94B and PH10170177 - The increase in G&A expense was mainly due to pre-commercialization studies for PH94B, increased personnel costs, and a noncash write-off of deferred offering costs from a terminated financing agreement188 - During the nine months ended December 31, 2021, the company raised capital through: - Warrant exercises: ~$6.2 million in cash proceeds40 - At-the-market (ATM) offering: ~$4.45 million in gross cash proceeds41192 Controls and Procedures Management concluded disclosure controls were effective as of December 31, 2021, while actively remediating previously identified material weaknesses in internal control over financial reporting through staffing and software improvements - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report208 - The company previously identified two material weaknesses in internal control over financial reporting: (i) inadequate segregation of duties and (ii) limitations in accounting software functionality209 - Remediation efforts began in April 2021, including hiring additional accounting staff and implementing new, state-of-the-art accounting software313 PART II. OTHER INFORMATION Legal Proceedings The company reported no legal proceedings during the period - There are no legal proceedings to report212 Risk Factors The company faces significant financial, product development, operational, and intellectual property risks, including recurring losses, the need for additional financing, clinical trial uncertainties, reliance on third parties, and internal control weaknesses - Financial Risks: The company has a history of significant net losses ($250.9 million accumulated deficit), requires additional financing to continue as a going concern, and has identified material weaknesses in its internal control over financial reporting215302313 - Product Development & Regulatory Risks: The business heavily depends on the success of its three CNS product candidates, with a high risk of failure or delay in clinical trials and no certainty of obtaining regulatory approval215221 - Operational Risks: The COVID-19 pandemic may continue to cause delays in manufacturing and clinical trial enrollment, and the company relies completely on third-party CROs and CMOs for clinical trials and manufacturing, creating dependency risk215241246 - Intellectual Property Risks: The company's success depends on its ability to obtain and maintain patent protection for its product candidates, which is uncertain and subject to legal challenges, and it also faces risks of infringing on third-party IP rights333353 Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None404 Defaults Upon Senior Securities The company reported no defaults upon senior securities - None405 Exhibits This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL data files - Exhibits filed include certifications from the Principal Executive Officer and Principal Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act, as well as Inline XBRL documents406