Soligenix(SNGX) - 2019 Q3 - Quarterly Report

PART I - FINANCIAL INFORMATION This section covers consolidated financial statements, management's analysis, market risk, and internal controls ITEM 1 - Consolidated Financial Statements This section presents Soligenix, Inc.'s unaudited consolidated financial statements and detailed notes Consolidated Balance Sheets This section details the company's financial position, including assets, liabilities, and equity Consolidated Balance Sheets Summary | Metric | Sep 30, 2019 (Unaudited) | Dec 31, 2018 | Change ($) | Change (%) | | :------------------------ | :----------------------- | :----------- | :--------- | :--------- | | Cash and cash equivalents | $6,551,793 | $8,983,717 | $(2,431,924) | -27.07% | | Total current assets | $8,010,209 | $10,342,710 | $(2,332,501) | -22.55% | | Total assets | $8,331,821 | $10,491,702 | $(2,159,881) | -20.59% | | Total current liabilities | $5,634,423 | $4,211,532 | $1,422,891 | 33.78% | | Total liabilities | $5,654,306 | $4,211,532 | $1,442,774 | 34.26% | | Total shareholders' equity| $2,677,515 | $6,280,170 | $(3,602,655) | -57.37% | Consolidated Statements of Operations This section presents the company's revenues, expenses, and net loss, highlighting operational performance Consolidated Statements of Operations Summary | Metric (3 Months Ended Sep 30) | 2019 | 2018 | Change ($) | Change (%) | | :----------------------------- | :----------- | :----------- | :--------- | :--------- | | Total revenues | $1,254,904 | $1,381,353 | $(126,449) | -9.15% | | Gross profit | $289,451 | $144,123 | $145,328 | 100.84% | | Research and development | $2,266,799 | $1,394,913 | $871,886 | 62.57% | | General and administrative | $789,251 | $667,799 | $121,452 | 18.19% | | Net loss | $(2,720,783) | $(1,861,608) | $(859,175) | 46.15% | | Basic & diluted net loss per share | $(0.14) | $(0.11) | $(0.03) | 27.27% | | Metric (9 Months Ended Sep 30) | 2019 | 2018 | Change ($) | Change (%) | | :----------------------------- | :----------- | :----------- | :--------- | :--------- | | Total revenues | $3,944,655 | $4,226,670 | $(282,015) | -6.67% | | Gross profit | $964,464 | $516,843 | $447,621 | 86.61% | | Research and development | $5,763,467 | $4,377,483 | $1,385,984 | 31.66% | | General and administrative | $2,432,550 | $2,041,340 | $391,210 | 19.16% | | Net loss | $(6,483,931) | $(5,795,156) | $(688,775) | 11.89% | | Basic & diluted net loss per share | $(0.34) | $(0.50) | $0.16 | -32.00% | Consolidated Statements of Comprehensive Loss This section details net loss and other comprehensive income/loss, including foreign currency adjustments Consolidated Statements of Comprehensive Loss Summary | Metric (3 Months Ended Sep 30) | 2019 | 2018 | Change ($) | Change (%) | | :----------------------------- | :----------- | :----------- | :--------- | :--------- | | Net loss | $(2,720,783) | $(1,861,608) | $(859,175) | 46.15% | | Foreign currency translation adjustments | $(7,985) | $(1,767) | $(6,218) | 352.07% | | Comprehensive loss | $(2,728,768) | $(1,863,375) | $(865,393) | 46.44% | | Metric (9 Months Ended Sep 30) | 2019 | 2018 | Change ($) | Change (%) | | :----------------------------- | :----------- | :----------- | :--------- | :--------- | | Net loss | $(6,483,931) | $(5,795,156) | $(688,775) | 11.89% | | Foreign currency translation adjustments | $(11,324) | $(1,767) | $(9,557) | 540.86% | | Comprehensive loss | $(6,495,255) | $(5,796,923) | $(698,332) | 12.05% | Consolidated Statements of Changes in Shareholders' Equity This section outlines changes in shareholders' equity, including stock issuances and net loss Consolidated Statements of Changes in Shareholders' Equity Summary | Shareholder Equity Item (9 Months Ended Sep 30, 2019) | Amount |\n| :---------------------------------------------------- | :----------- |\n| Balance, December 31, 2018 | $6,280,170 |\n| Issuance of common stock (FBR At Market Sales) | $2,554,147 |\n| Issuance costs (FBR At Market Sales) | $(101,277) |\n| Issuance of restricted common stock to vendors | $205,738 |\n| Share-based compensation expense | $233,992 |\n| Foreign currency translation adjustment | $(11,324) |\n| Net loss | $(6,483,931) |\n| Balance, September 30, 2019 | $2,677,515 | Consolidated Statements of Cash Flows This section summarizes cash flows from operating, investing, and financing activities Consolidated Statements of Cash Flows Summary | Cash Flow Activity (9 Months Ended Sep 30) | 2019 | 2018 | Change ($) | Change (%) | | :----------------------------------------- | :------------- | :------------- | :--------- | :--------- | | Net cash used in operating activities | $(4,866,288) | $(4,568,927) | $(297,361) | 6.51% |\n| Net cash provided by (used in) investing activities | $5,500 | $(1,924) | $7,424 | -385.86% |\n| Net cash provided by financing activities | $2,446,939 | $8,483,216 | $(6,036,277) | -71.15% |\n| Net (decrease) increase in cash and cash equivalents | $(2,431,924) | $3,910,598 | $(6,342,522) | -162.19% |\n| Cash and cash equivalents at end of period | $6,551,793 | $11,720,085 | $(5,168,292) | -44.10% | Notes to Consolidated Financial Statements This section provides essential context and detailed explanations for financial figures and accounting policies - The notes are an integral part of the consolidated financial statements, providing essential context and detail for understanding the reported financial figures[11][13][16][19][21][23] Note 1. Nature of Business This note describes business segments, product development, and financial viability concerns - The company operates in two segments: Specialized BioTherapeutics (developing therapies for CTCL, oral mucositis, GI disorders) and Public Health Solutions (developing vaccines for ricin toxin and therapeutics for infectious diseases)[25][26][27] - Revenues are primarily generated from government grants and contracts, including a $24.7 million NIAID contract for RiVax and NIH grants for SGX301 and SGX942[28] - The company had an accumulated deficit of $172.7 million and used $4.9 million cash in operating activities for the nine months ended September 30, 2019, raising substantial doubt about its ability to continue as a going concern without additional funding[30] - Cash and cash equivalents decreased by 27% to $6.55 million, and working capital decreased by 61% to $2.38 million as of September 30, 2019, primarily due to expenditures on Phase 3 clinical trials for SGX942 and SGX301[31] Note 2. Summary of Significant Accounting Policies This note outlines key accounting principles and methods applied in financial statements - The company adopted ASC 2016-02 "Leases" (Topic 842) on January 1, 2019, recognizing right-of-use assets and corresponding lease liabilities for its office space and copier machine[57][60] - Research and development costs are expensed as incurred, including clinical trial expenses, contracted research, and license agreement fees without alternative future use[47][167] - Share-based compensation for nonemployees is measured at grant date fair value and recognized when services are performed, following the adoption of ASU 2018-07[49][170] Note 3. Intangible Assets This note details intangible assets, including licenses and patents, and their amortization Intangible Assets Summary | Intangible Asset | Cost | Accumulated Amortization | Net Book Value (Sep 30, 2019) | Net Book Value (Dec 31, 2018) | | :--------------- | :----------- | :----------------------- | :---------------------------- | :---------------------------- | | Licenses | $462,234 | $435,744 | $26,490 | $46,863 | | Patents | $1,893,185 | $1,893,185 | $- | $- | | Total | $2,355,419 | $2,328,929 | $26,490 | $46,863 | - Amortization expense for intangible assets was $20,373 for the nine months ended September 30, 2019, and $6,791 for the three months ended September 30, 2019[62] Note 4. Accrued Expenses This note provides a breakdown of accrued expenses, primarily clinical trial costs Accrued Expenses Summary | Accrued Expense | Sep 30, 2019 | Dec 31, 2018 | Change ($) | Change (%) | | :-------------- | :----------- | :----------- | :--------- | :--------- | | Clinical trial expenses | $3,075,943 | $1,633,713 | $1,442,230 | 88.28% | | Other | $85,836 | $156,976 | $(71,140) | -45.32% | | Total | $3,161,779 | $1,790,689 | $1,371,090 | 76.57% | Note 5. Income Taxes This note explains income tax position, including NOL carryforwards and tax benefits - The company recognized an income tax benefit of $610,676 from the sale of its 2017 New Jersey NOL carryforwards during the nine months ended September 30, 2019[53][66][172] - As of December 31, 2018, the company had approximately $104.1 million in federal NOLs, $14.0 million in state NOLs, and $0.7 million in foreign NOLs, subject to limitations under IRC Section 382[65] Note 6. Shareholders' Equity This note details changes in shareholders' equity, including stock issuances and compensation - During the nine months ended September 30, 2019, the company issued 2,529,050 shares of common stock through the FBR At Market Sales Issuance Agreement, generating $2,554,147 in proceeds (net of issuance costs)[19] - The company also issued 245,700 restricted shares of common stock to vendors, valued at $205,738, as partial consideration for services performed[19] - As of November 7, 2019, $6.3 million remained available for sale of common stock under the FBR Sales Agreement[32][72][186] Note 7. Related Party Transaction This note describes transactions with related parties, including stock issuances for services - The company issued 78,338 shares of common stock to Altamont Pharmaceutical Holdings, LLC (a related party) for website development costs ($46,500 capitalized) and investor relations/web hosting services ($4,290 expensed)[74] Note 8. Commitments and Contingencies This note outlines contractual obligations, future commitments, and contingent liabilities Commitments and Contingencies Summary | Year | Research and Development | Property and Other Leases | Total | | :------------------------ | :----------------------- | :------------------------ | :----------- | | Oct 1 - Dec 31, 2019 | $50,000 | $37,527 | $87,527 | | 2020 | $100,000 | $127,374 | $227,374 | | 2021 | $100,000 | $6,408 | $106,408 | | 2022 | $100,000 | $- | $100,000 | | 2023 | $100,000 | $- | $100,000 | | Total | $450,000 | $171,309 | $621,309 | - The company has commitments of approximately $450,000 for licensing agreements and potential future milestone payments of up to $7.9 million and royalties up to 6% of net sales under collaboration and license agreements, contingent on clinical or commercialization success[75][185] Note 9. Operating Segments This note provides financial information by operating segments: Public Health and BioTherapeutics Operating Segments Summary | Metric (3 Months Ended Sep 30) | Public Health Solutions | Specialized BioTherapeutics | Corporate | Total | | :----------------------------- | :---------------------- | :-------------------------- | :----------- | :----------- | | Revenues | $991,087 | $263,817 | $- | $1,254,904 | | Income (Loss) from Operations | $72,491 | $(1,926,883) | $(912,207) | $(2,766,599) | | Amortization and Depreciation | $4,312 | $4,141 | $6,448 | $14,901 | | Share-Based Compensation | $8,072 | $18,609 | $54,846 | $81,527 | | Metric (9 Months Ended Sep 30) | Public Health Solutions | Specialized BioTherapeutics | Corporate | Total | | :----------------------------- | :---------------------- | :-------------------------- | :----------- | :----------- | | Revenues | $2,767,304 | $1,177,351 | $- | $3,944,655 | | Income (Loss) from Operations | $267,601 | $(4,725,774) | $(2,773,380) | $(7,231,553) | | Amortization and Depreciation | $13,030 | $12,986 | $11,876 | $37,892 | | Share-Based Compensation | $21,340 | $58,611 | $154,041 | $233,992 | ITEM 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial condition, operational results, business segments, and critical accounting policies Our Business Overview This section provides an overview of the biopharmaceutical business, its segments, and strategic objectives - The company is a late-stage biopharmaceutical company with two active business segments: Specialized BioTherapeutics and Public Health Solutions[85] - Key business strategies include completing Phase 3 trials for SGX301 and SGX942, continuing RiVax development with ThermoVax, securing additional government funding, pursuing business development, and acquiring new clinical-stage compounds[88] Corporate Information This section provides basic corporate details, including incorporation, location, and historical context - Soligenix, Inc was incorporated in Delaware in 1987 and has undergone several name changes, with its principal executive offices located in Princeton, New Jersey[89] Our Product Candidates in Development This section details the company's pipeline across specialized biotherapeutics and public health solutions - The company has product candidates in development across two segments: Specialized BioTherapeutics (SGX301, SGX942, SGX203, SGX201) and Public Health Solutions (ThermoVax, RiVax, OrbeShield, SGX943)[91][93] Specialized BioTherapeutics Overview This section overviews product candidates targeting rare diseases within specialized biotherapeutics - The Specialized BioTherapeutics segment includes SGX301 for Cutaneous T-Cell Lymphoma, SGX942 for Oral Mucositis in Head and Neck Cancer, and oral BDP formulations (SGX203 for Pediatric Crohn's disease, SGX201 for Acute Radiation Enteritis)[91] SGX301 – for Treating Cutaneous T-Cell Lymphoma This section describes SGX301, a photodynamic therapy for CTCL, its development and designations - SGX301 is a novel photodynamic therapy for CTCL, utilizing topical synthetic hypericin activated by visible light, avoiding the negative effects of UV light[94][96] - SGX301 has received Orphan Drug and Fast Track designations from the FDA, and Orphan Drug and PIM designations from the EMA/MHRA, providing market exclusivity and expedited review benefits[98] - The pivotal Phase 3 FLASH study for SGX301, initiated in December 2015, received a positive interim analysis in October 2018, recommending additional patient enrollment, with final results expected in Q1 2020[91][101][103] Cutaneous T-Cell Lymphoma This section provides background on CTCL, its prevalence, and limitations of current treatments - CTCL is a rare non-Hodgkin's lymphoma affecting over 20,000 individuals in the U.S annually, with no FDA-approved front-line treatment for early stages[105][107] - Current unapproved therapies like PUVA carry serious adverse effects, including secondary skin cancers, due to mutagenic chemicals and carcinogenic UVA light[106] Dusquetide This section introduces Dusquetide (SGX94), an innate defense regulator, and its mechanism of action - Dusquetide (SGX94) is an innate defense regulator (IDR) that modulates the innate immune system to simultaneously reduce inflammation, eliminate infection, and enhance tissue healing[108][109] - IDRs have no direct antibiotic activity but modulate host responses, increasing survival after infections and accelerating tissue damage resolution, with potential anti-tumor action[109] SGX942 – for Treating Oral Mucositis in Head and Neck Cancer This section details SGX942 for oral mucositis, its clinical trial results, and development progress - SGX942, containing the IDR dusquetide, targets oral mucositis in head and neck cancer patients, an area with no approved drug therapies[111] - The Phase 2 study showed SGX942 reduced the median duration of severe oral mucositis by 50% (from 18 to 9 days) and by 67% (from 30 to 10 days) in patients receiving aggressive chemoradiation therapy[112] - The pivotal Phase 3 DOM–INNATE study received a positive recommendation from the DMC in August 2019 to continue enrollment, increasing the sample size to 260 subjects, with final results expected in Q2 2020[91][124] Oral Mucositis This section describes oral mucositis, its incidence in cancer patients, and clinical impact - Mucositis affects approximately 500,000 people in the U.S per year, with oral mucositis being a subpopulation of about 90,000 patients in the U.S and a comparable number in Europe[127][129] - Oral mucositis is common in head and neck cancer patients treated with radiation therapy (over 80% incidence of severe mucositis) and can lead to severe debilitation, infection, and limit cancer treatment doses[127][129] Oral BDP This section describes Oral BDP, a locally acting therapy for GI inflammation, and its patent status - Oral BDP is a first-of-its-kind oral, locally acting therapy specifically formulated to treat GI inflammation, with a two-tablet delivery system for immediate and delayed release throughout the GI tract[130][131] - The European Patent Office issued two patents in July 2019 for the use of oral BDP in treating GI tract damage resulting from acute radiation injury[132] SGX203 – for Treating Pediatric Crohn's Disease This section details SGX203 for pediatric Crohn's disease, its regulatory status, and future plans - SGX203 has received Orphan Drug and Fast Track designations from the FDA for the treatment of pediatric Crohn's disease[134] - A pivotal Phase 3 clinical trial for SGX203 is planned, contingent upon securing additional funding, potentially through partnerships[134] SGX201 – for Preventing Acute Radiation Enteritis This section describes SGX201 for acute radiation enteritis, its clinical results, and regulatory status - SGX201, a delayed-release BDP formulation, showed safety and potential dose-response efficacy in a Phase 1/2 clinical trial for preventing acute radiation enteritis[138] - SGX201 has received Fast Track designation from the FDA for acute radiation enteritis[139] Public Health Solutions Overview This section overviews product candidates addressing public health threats within this segment - The Public Health Solutions segment includes ThermoVax (thermostability technology), RiVax (ricin toxin vaccine), and SGX943 (therapeutic for antibiotic-resistant and emerging infectious diseases)[93] ThermoVax– Thermostability Technology This section describes ThermoVax, a technology for thermostabilizing vaccines, and its development - ThermoVax is a novel technology that renders aluminum salt-adjuvanted vaccines stable at elevated temperatures, potentially eliminating the need for cold chain storage and distribution[144] - Preclinical studies demonstrated ThermoVax's ability to produce stable vaccine formulations, with RiVax remaining potent for up to one year at 40°C and anthrax vaccine for 16 weeks at 70°C[145] - The company holds a worldwide exclusive sublicense agreement for ThermoVax for use in ricin and Ebola vaccines, with ongoing collaboration for a trivalent thermostabilized Ebola vaccine[149][150] RiVax – Ricin Toxin Vaccine This section details RiVax, a ricin toxin vaccine candidate, its clinical development, and funding - RiVax is a proprietary ricin toxin vaccine candidate that has demonstrated 100% protection in an aerosol exposure non-human primate model and was safe and immunogenic in two Phase 1 human clinical trials[153] - The development of RiVax is supported by a NIAID contract of up to $24.7 million, with $6.9 million still available as of August 2017, funding preclinical, manufacturing, and clinical development[154][155] - RiVax has been granted Orphan Drug designation by the FDA and EMA and has the potential to qualify for a biodefense Priority Review Voucher upon approval[156][158] SGX943 – for Treating Emerging and/or Antibiotic-Resistant Infectious Diseases This section describes SGX943 for infectious diseases, its preclinical efficacy, and government support - SGX943, an innate defense regulator (IDR), has demonstrated efficacy against both Gram-negative and Gram-positive bacterial infections, including antibiotic-resistant strains, in preclinical models[161] - The IDR mechanism acts on the host, not the pathogen, making it unlikely to generate bacterial resistance and applicable to systemic inflammation and multi-organ failure caused by biothreat agents[162][163] - The company was awarded a $600,000 Defense Threat Reduction Agency (DTRA) subcontract in May 2019 to develop medical countermeasures against bacterial threat agents using SGX943[164] Critical Accounting Policies This section outlines key accounting policies, including revenue recognition and R&D expense treatment - Revenue from government contracts and grants is recognized when subcontractor or internal reimbursable expenses are incurred[166] - Research and development costs are expensed as incurred, including clinical trial expenses and license fees without alternative future use[167] - Share-based compensation for nonemployees is measured at grant date fair value and recognized when services are performed, following ASU 2018-07[170][171] Material Changes in Results of Operations This section discusses significant changes in revenues, expenses, and net loss for reporting periods Material Changes in Results of Operations Summary | Metric (3 Months Ended Sep 30) | 2019 | 2018 | Change ($) | Change (%) | | :----------------------------- | :----------- | :----------- | :--------- | :--------- | | Net loss | $(2,720,783) | $(1,861,608) | $(859,175) | 46.15% | | Total revenues | $1,254,904 | $1,381,353 | $(126,449) | -9.15% | | Gross profit | $289,451 | $144,123 | $145,328 | 100.84% | | R&D expenses | $2,266,799 | $1,394,913 | $871,886 | 62.57% | | G&A expenses | $789,251 | $667,799 | $121,452 | 18.19% | | Metric (9 Months Ended Sep 30) | 2019 | 2018 | Change ($) | Change (%) | | :----------------------------- | :----------- | :----------- | :--------- | :--------- | | Net loss | $(6,483,931) | $(5,795,156) | $(688,775) | 11.89% | | Total revenues | $3,944,655 | $4,226,670 | $(282,015) | -6.67% | | Gross profit | $964,464 | $516,843 | $447,621 | 86.61% | | R&D expenses | $5,763,467 | $4,377,483 | $1,385,984 | 31.66% | | G&A expenses | $2,432,550 | $2,041,340 | $391,210 | 19.16% | - The increase in net loss for the nine months ended September 30, 2019, was partially offset by a $610,676 income tax benefit from NOL carryforward sales and $373,557 milestone fee income from the RiVax program[175][176] Financial Condition This section analyzes liquidity, capital resources, and plans to address future funding needs Financial Condition Summary | Metric | Sep 30, 2019 | Dec 31, 2018 | Change ($) | Change (%) | | :---------------- | :----------- | :----------- | :--------- | :--------- | | Cash & equivalents| $6,551,793 | $8,983,717 | $(2,431,924) | -27.07% | | Working capital | $2,375,787 | $6,131,178 | $(3,755,391) | -61.25% | - The decrease in cash and working capital was primarily due to expenditures for the pivotal Phase 3 clinical trials of SGX942 and SGX301[180] - The company plans to address liquidity needs through government contracts/grants (up to $8.0 million available), equity instruments for vendor compensation, NOL sales, potential partnerships, and additional equity/debt financings (up to $6.3 million remaining from FBR Sales Agreement)[181][182][32] Expenditures This section details research and development expenditures and anticipated reimbursements - Projected R&D expenditures for the next 12 months are approximately $10.0 million, with $6.9 million for Specialized BioTherapeutics and $3.1 million for Public Health Solutions[183] - The company anticipates approximately $3.2 million in contract and grant reimbursements to offset R&D expenses in the next 12 months[183] Expenditures Summary | R&D Program (9 Months Ended Sep 30) | 2019 Expenses | 2018 Expenses | Change ($) | Change (%) | | :---------------------------------- | :------------ | :------------ | :--------- | :--------- | | RiVax and ThermoVax Vaccines | $303,149 | $313,735 | $(10,586) | -3.37% | | Dusquetide (SGX94) | $3,853,182 | $2,332,590 | $1,520,592 | 65.19% | | SGX301 | $1,260,664 | $1,451,349 | $(190,685) | -13.14% | | Other | $346,472 | $279,809 | $66,663 | 23.82% | | Total R&D Expenses | $5,763,467 | $4,377,483 | $1,385,984 | 31.66% | | Reimbursements (9 Months Ended Sep 30) | 2019 | 2018 | Change ($) | Change (%) | | :------------------------------------- | :------------ | :------------ | :--------- | :--------- | | RiVax and ThermoVax Vaccines | $2,195,743 | $3,125,027 | $(929,284) | -29.74% | | SGX942 | $405,055 | $271,011 | $134,044 | 49.46% | | SGX301 | $379,392 | $313,789 | $65,603 | 20.91% | | Total Reimbursements | $2,980,191 | $3,709,827 | $(729,636) | -19.67% | Contractual Obligations This section outlines future contractual commitments, including R&D and lease obligations Contractual Obligations Summary | Year | Research and Development | Property and Other Leases | Total | | :------------------------ | :----------------------- | :------------------------ | :----------- | | Oct 1 - Dec 31, 2019 | $50,000 | $37,527 | $87,527 | | 2020 | $100,000 | $127,374 | $227,374 | | 2021 | $100,000 | $6,408 | $106,408 | | 2022 | $100,000 | $- | $100,000 | | 2023 | $100,000 | $- | $100,000 | | Total | $450,000 | $171,309 | $621,309 | - The company has commitments of approximately $450,000 for licensing agreements and potential future milestone payments of up to $7.9 million and royalties up to 6% of net sales upon clinical or commercialization success[185] ITEM 3 – Quantitative and Qualitative Disclosures About Market Risk The company's market risk exposure primarily stems from interest income sensitivity and foreign exchange fluctuations - The company's primary market risk exposure is interest income sensitivity from short-term marketable securities and foreign exchange rate fluctuations[190] - The company does not have any derivative financial instruments and believes it is not subject to any material market risk exposure due to the nature of its short-term investments[190] ITEM 4 – Controls and Procedures Management concluded disclosure controls were effective as of September 30, 2019, with no material changes - Management concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2019[192] - No material changes in internal control over financial reporting occurred during the last fiscal quarter[193] PART II – OTHER INFORMATION This section provides additional information, including risk factors, equity sales, and exhibits ITEM 1A – Risk Factors The company's business faces significant risks, detailed in its Annual Report on Form 10-K - The company's business faces significant risks, which are disclosed in Item 1A of its Annual Report on Form 10-K for the fiscal year ended December 31, 2018[196] ITEM 2 – Unregistered Sales of Equity Securities and Use of Proceeds The company issued restricted common stock to vendors, exempt from registration under Section 4(2) of the Securities Act - During the nine months ended September 30, 2019, the company issued restricted shares of common stock to third-party vendors as partial compensation for services performed[197] - Specific issuances included 60,000 shares at $0.96 on Jan 2, 2019; 8,681 shares at $0.73 on Apr 29, 2019; 50,000 shares at $0.83 on May 15, 2019; 78,338 shares at $0.71 on Jun 28, 2019; 8,681 shares at $0.72 on Jul 1, 2019; 25,000 shares at $0.98 on Jul 15, 2019; 5,000 shares at $1.05 on Aug 15, 2019; and 10,000 shares at $0.88 on Sep 15, 2019[197][198][199][200][201][202][203][204] - The company believes these issuances were exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as they did not involve a public offering[205] ITEM 6 – Exhibits This section lists filed exhibits, including CEO/CFO certifications and XBRL taxonomy documents - The exhibits include certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Exchange Act Rule 13(a)-14(a) and Section 906 of the Sarbanes-Oxley Act of 2002[212] - XBRL Instance Document and Taxonomy Extension Schema, Calculation, Definition, Label, and Presentation Linkbase Documents are also filed as exhibits[212] SIGNATURES This section formally attests to the accuracy and completeness of the financial report by authorized officers - The report is signed by Christopher J Schaber, PhD, President and Chief Executive Officer, and Jonathan Guarino, Chief Financial Officer, Senior Vice President, and Corporate Secretary, on November 12, 2019[210]