GeoVax Labs(GOVX) - 2024 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION This section details the company's financial performance, condition, and operational controls for the reporting period Item 1. Condensed Consolidated Financial Statements The company's financial position significantly weakened, with decreased assets and a shift to a stockholders' deficit, alongside a net loss and substantial doubt about its going concern ability Condensed Consolidated Balance Sheets The balance sheet reflects a significant deterioration in financial health, with total assets decreasing and stockholders' equity shifting to a deficit Condensed Consolidated Balance Sheet Summary | Balance Sheet Item | June 30, 2024 (unaudited) ($) | December 31, 2023 ($) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $1,561,712 | $6,452,589 | | Total current assets | $3,843,523 | $7,885,742 | | Total assets | $4,095,070 | $9,283,219 | | Liabilities & Equity | | | | Total current liabilities | $6,404,296 | $3,519,881 | | Total stockholders' equity (deficit) | ($2,309,226) | $5,763,338 | | Total liabilities and stockholders' equity (deficit) | $4,095,070 | $9,283,219 | Condensed Consolidated Statements of Operations The company reported initial revenue from a government contract but incurred a net loss of $5.1 million for Q2 and a widened $10.9 million net loss for the six-month period Statement of Operations Highlights (Unaudited) | Metric | Three Months Ended June 30, 2024 ($) | Three Months Ended June 30, 2023 ($) | Six Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2023 ($) | | :--- | :--- | :--- | :--- | :--- | | Revenue from government contract | $300,677 | $0 | $300,677 | $0 | | Research and development | $4,276,868 | $4,719,728 | $8,702,596 | $7,538,917 | | General and administrative | $1,086,030 | $1,459,093 | $2,543,383 | $2,910,518 | | Loss from operations | ($5,062,221) | ($6,178,821) | ($10,945,302) | ($10,449,435) | | Net loss | ($5,064,042) | ($5,927,620) | ($10,914,174) | ($9,965,536) | | Net loss per common share | ($1.99) | ($3.79) | ($4.68) | ($5.66) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities totaled $7.6 million, leading to a significant decrease in cash and cash equivalents despite financing proceeds Cash Flow Summary (Unaudited) | Cash Flow Activity | Six Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2023 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | ($7,624,778) | ($9,800,016) | | Net cash used in investing activities | $0 | ($23,805) | | Net cash provided by financing activities | $2,733,901 | $0 | | Net decrease in cash and cash equivalents | ($4,890,877) | ($9,823,821) | | Cash and cash equivalents at end of period | $1,561,712 | $17,788,911 | Notes to Condensed Consolidated Financial Statements Notes detail the company's biotech operations, significant going concern doubt due to insufficient cash, and recent BARDA contract revenue and equity offerings - The company is a clinical-stage biotechnology firm focused on developing vaccines for infectious diseases (like COVID-19 and Mpox) and therapies for solid tumor cancers (like advanced head and neck cancer)[14][15] - There is substantial doubt about the company's ability to continue as a going concern Existing cash resources are insufficient to fund operations beyond the third quarter of 2024 without additional funding[18] - On June 12, 2024, GeoVax was awarded a contract by BARDA to advance the clinical development of its COVID-19 vaccine, GEO-CM04S1 The company recognized $300,677 in revenue from this contract during the quarter[37][39] - Subsequent to the quarter's end, on July 12, 2024, the company closed a registered direct offering, raising net proceeds of approximately $2.8 million[42] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses clinical programs, the BARDA contract, critical liquidity concerns, and ongoing net losses driven by R&D spending Overview The overview highlights lead clinical programs, the significant BARDA contract for a COVID-19 vaccine trial, and a Nasdaq non-compliance notice - The company's lead clinical programs are GEO-CM04S1 (next-gen COVID-19 vaccine) and Gedeptin® (advanced head and neck cancer therapy)[45] - A contract was awarded by BARDA on June 12, 2024, to sponsor a 10,000-participant Phase 2b study of GEO-CM04S1, with a direct award to GeoVax of approximately $24.3 million, potentially increasing to $45 million[47] - The company received a Nasdaq non-compliance notice on May 23, 2024, for failing to meet the minimum stockholders' equity requirement of $2.5 million Nasdaq has granted an extension until November 19, 2024, to regain compliance[47] Results of Operations Q2 2024 saw initial BARDA contract revenue and a reduced net loss, while the six-month period showed increased R&D expenses and a higher net loss Comparison of Operating Results (Three Months Ended June 30) | Metric | 2024 ($) | 2023 ($) | Change ($) | | :--- | :--- | :--- | :--- | | Revenue | $300,677 | $0 | $300,677 | | R&D Expenses | $4,276,868 | $4,719,728 | ($442,860) | | G&A Expenses | $1,086,030 | $1,459,093 | ($373,063) | | Net Loss | ($5,064,042) | ($5,927,620) | $863,578 | Comparison of Operating Results (Six Months Ended June 30) | Metric | 2024 ($) | 2023 ($) | Change ($) | | :--- | :--- | :--- | :--- | | Revenue | $300,677 | $0 | $300,677 | | R&D Expenses | $8,702,596 | $7,538,917 | $1,163,679 | | G&A Expenses | $2,543,383 | $2,910,518 | ($367,135) | | Net Loss | ($10,914,174) | ($9,965,536) | ($948,638) | Liquidity and Capital Resources The company faces critical liquidity issues with insufficient cash for operations beyond Q3 2024, raising substantial doubt about its going concern ability Liquidity and Capital Resources Summary | Metric | June 30, 2024 ($) | December 31, 2023 ($) | | :--- | :--- | :--- | | Cash and cash equivalents | $1,561,712 | $6,452,589 | | Working capital (deficit) | ($2,560,773) | $4,365,861 | - Existing cash and cash equivalents are insufficient to fund operations beyond the third quarter of 2024 without additional funding, which raises substantial doubt about the Company's ability to continue as a going concern[65][66] - Net cash used in operating activities for the six months ended June 30, 2024, was $7.6 million Net cash provided by financing activities was $2.7 million[62] Item 3. Quantitative and Qualitative Disclosures about Market Risk This section is not applicable as the company qualifies as a smaller reporting company - Not applicable to smaller reporting companies[71] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures are effective, with no significant changes to internal control over financial reporting during the quarter - Management concluded that as of the end of the period, the company's disclosure controls and procedures were effective[73] - No significant changes were made to internal control over financial reporting during the three months ended June 30, 2024[74] PART II – OTHER INFORMATION This part covers legal proceedings, risk factors, equity sales, other information, and a list of exhibits Item 1. Legal Proceedings The company reports no legal proceedings during the reporting period - None[76] Item 1A. Risk Factors The company refers to its Annual Report on Form 10-K for risk factors, with no required updates as a smaller reporting company - The company refers to the risk factors discussed in its most recent Annual Report on Form 10-K and is not required to provide updates as a smaller reporting company[77] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered equity securities sales occurred during the period that were not previously disclosed on a Form 8-K - There were no sales of unregistered equity securities during the period that were not previously reported on Form 8-K[78] Item 5. Other Information No directors or executive officers adopted or terminated Rule 10b5-1 trading arrangements, and all required Form 8-K information was reported - No directors or executive officers adopted or terminated any "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the period[79] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including key agreements and officer certifications - The report includes several exhibits, such as: - RRPV Base Agreement and Project Award (BARDA Contract) - Securities Purchase Agreements from May and July 2024 - Forms of Pre-Funded and Common Warrants - Officer Certifications (Rule 13a-14(a) and Section 1350)[79]