Cocrystal(COCP) - 2020 Q3 - Quarterly Report

Financial Performance - Revenue for the nine months ended September 30, 2020 was $1,504,000, a decrease of 75.6% compared to $6,162,000 for the same period in 2019[136] - Net loss for the nine months ended September 30, 2020 was $8,155,000, compared to a net loss of $324,000 for the same period in 2019[144] - Net cash used in operating activities was $7,449,000 for the nine months ended September 30, 2020, compared to $333,000 for the same period in 2019[145] - The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and has incurred operating losses since inception[150] - The Company continues to incur losses, and achieving profitability depends on the successful development, approval, and commercialization of its product candidates[158] Research and Development - Research and development expenses for the nine months ended September 30, 2020 were $5,336,000, an increase of 75.0% compared to $3,046,000 for the same period in 2019, primarily due to COVID-19 and Influenza A programs[139] - Total research and development expenses for the three months ended September 30, 2020 were $2,077,000, an increase of 92.8% compared to $1,077,000 for the same period in 2019[139] - The Company initiated a coronavirus program targeting SARS-CoV-2 and anticipates selecting its lead preclinical molecule in the fourth quarter of 2020[129] - The anticipated milestones in the Influenza program include the initiation of the Phase 1 study in 2021[159] - The Company aims to identify additional replication inhibitors in its coronavirus program and select a preclinical lead molecule in Q4 2020[159] - The Company plans to complete the proof-of-concept animal model study for its norovirus program in Q4 2020[159] Cash and Funding - The Company had $31,781,000 cash on September 30, 2020, sufficient to maintain planned operations for well beyond the next 12 months[149] - The Company received an upfront payment of $4,000,000 from Merck under the Collaboration Agreement and is eligible for milestone payments up to $156,000,000[125] - Management plans to fund future operations through additional private or public equity offerings and arrangements with strategic partners[158] Risks and Uncertainties - Risks include the impact of the COVID-19 pandemic on operations and reliance on collaboration with Merck[162] - Future liquidity is uncertain and dependent on various factors, including regulatory approvals and collaboration agreements[162] - The Company undertakes no obligation to publicly update or revise any forward-looking statements[162] Goodwill and Accounting - As of September 30, 2020, the Company had goodwill of $19,092,000, which is tested annually for impairment[164] - The Company adopted ASC Topic 606 for revenue recognition effective in Q4 2018[165]