Crown(CRKN) - 2019 Q3 - Quarterly Report

Financial Performance - For the three months ended September 30, 2019, the company reported no revenue, compared to $0.2 million for the same period in 2018, resulting in a net loss of $2.8 million for Q3 2019[177][176] - For the six months ended September 30, 2019, the company reported no revenue, compared to $0.3 million for the same period in 2018, with a net loss of $5.0 million[184][183] - The company had an accumulated deficit of approximately $11.9 million as of September 30, 2019, with significant operating losses expected to continue[191] Expenses - Research and development expenses increased to $0.8 million for the three months ended September 30, 2019, up from $0.2 million in the same period of 2018, primarily due to stock-based compensation[179] - Selling, general and administrative expenses rose to $1.5 million for Q3 2019, compared to $0.5 million in Q3 2018, reflecting a $1.0 million increase mainly from employee compensation and professional fees[180] - Research and development expenses for the six months ended September 30, 2019, were $1.1 million, compared to $0.3 million in the same period of 2018, indicating a $0.7 million increase due to stock-based compensation[186] - Selling, general and administrative expenses for the six months ended September 30, 2019, were $2.9 million, up from $0.8 million in the same period of 2018, marking a $2.1 million increase[187] Cash Flow - Net cash used in operating activities for the six months ended September 30, 2019, was $0.7 million, primarily due to a net loss of $5.0 million adjusted for non-cash expenses[195] - Net cash provided by financing activities for the six months ended September 30, 2019, was $0.7 million, primarily from proceeds of senior secured convertible notes[199] - For the six months ended September 30, 2018, net cash provided by financing activities was $0.7 million, primarily from $0.8 million proceeds from senior secured convertible notes[200] Going Concern - The company anticipates needing substantial additional financing to fund operations and develop its technology, raising doubts about its ability to continue as a going concern[192] Accounting Policies - The adoption of the new revenue standard, ASC 606, did not affect 2019 or 2018 revenue recognition[203] - The company recognizes revenue up to the amount of costs incurred for performance obligations that cannot be reasonably measured[205] - Stock-based compensation expense is recognized based on the estimated fair value of the award on the grant date, using the Black-Scholes option-pricing model[207] - The expected term for options is calculated using the simplified method, typically 10 years following the date of grant[210] - The expected volatility for options is based on the historical share volatility of comparable publicly traded companies[211] - The fair value of common stock is estimated by the board of directors based on various factors, including third-party valuations and market conditions[213] - The company is electing to delay the adoption of new or revised accounting standards as an emerging growth company[217] - Quantitative and qualitative disclosures about market risk are not required for a Smaller Reporting Company[218]