Virpax Pharmaceuticals(US:VRPX)2024-11-14 22:00Financial Performance - The company reported a net loss of $2,006,456 for the three months ended September 30, 2024, compared to a net loss of $5,994,498 for the same period in 2023[15]. - For the nine months ended September 30, 2024, the company incurred a net loss of $8.7 million, compared to a net loss of $10.6 million for the same period in 2023, resulting in an accumulated deficit of $68.2 million[24]. - Basic and diluted net loss per share for the three months ended September 30, 2024, was $(0.43), compared to $(5.12) for the same period in 2023[15]. - The company incurred a net loss of $2,006,456 for the three months ended September 30, 2024, compared to a net loss of $5,994,498 for the same period in 2023, representing a decrease of approximately 66.6%[15]. - Total operating expenses for the three months ended September 30, 2024, were $1,924,354, a decrease from $6,115,138 in the same period of 2023, indicating a reduction of approximately 68.6%[15]. Assets and Liabilities - As of September 30, 2024, total current assets were $304,162, a significant decrease from $9,628,345 as of December 31, 2023[11]. - The company had total liabilities of $2,355,774 as of September 30, 2024, compared to $7,694,024 as of December 31, 2023[12]. - The accumulated deficit increased to $(68,221,271) as of September 30, 2024, from $(59,544,135) as of December 31, 2023[13]. - Current liabilities increased to $2,355,774 as of September 30, 2024, compared to $1,694,024 as of December 31, 2023, reflecting an increase of approximately 39.0%[12]. - As of September 30, 2024, prepaid expenses and other current assets totaled $286,933, a decrease of 41% from $486,833 on December 31, 2023[42]. Cash Flow - The company reported a net cash used in operating activities of $13.8 million for the nine months ended September 30, 2024, compared to $6.8 million for the same period in 2023[19]. - As of September 30, 2024, the company had cash of $17,229, compared to $12,152,993 at the end of the same period in 2023[19]. - The company raised $2.2 million from a public offering during the nine months ended September 30, 2024[19]. - The company raised $5,000,000 through a public offering of 3,200,000 shares of common stock at $0.50 per share, along with prefunded warrants for 6,800,000 shares[119]. Research and Development - Research and development expenses for the three months ended September 30, 2024, were $1,143,396, compared to $1,495,619 for the same period in 2023[15]. - Research and development expenses for the nine months ended September 30, 2024, were $60,878, compared to $142,099 for the same period in 2023, indicating a reduction in R&D spending[79]. - The company has incurred significant research and development expenses, with a notable increase in R&D expenses from $143,071 to $1,219,828 as of September 30, 2024[43]. - The company is facing potential disruptions in research and development activities due to global macroeconomic challenges, including supply chain weaknesses and geopolitical instability[59]. Legal and Settlement Obligations - The company is liable for $14,684,833 in potential damages related to ongoing litigation, with additional claims for royalties of 6% on net sales of certain drug candidates[49][54]. - The company incurred a litigation liability of $6 million as part of a settlement agreement with Sorrento Therapeutics, Inc. and Scilex Pharmaceuticals Inc.[25]. - A settlement agreement was reached on February 29, 2024, with a total cash payment of $6 million to be made to Sorrento and Scilex, with $3.5 million paid shortly after the settlement order[54]. - The company has ongoing obligations for significant cash payments in the next year, raising substantial doubt about its ability to continue as a going concern[8]. Stock and Equity - The number of common shares outstanding increased to 4,887,581 as of September 30, 2024, from 1,171,233 as of December 31, 2023[13]. - The company authorized the issuance of 10,000,000 shares of preferred stock and 100,000,000 shares of common stock, with 4,887,581 shares of common stock issued as of September 30, 2024[62][63]. - The company executed a 1-for-10 reverse stock split effective March 1, 2024, affecting all issued and outstanding shares of common stock[64]. - The company granted common warrants in connection with the offering, with a relative fair value of approximately $1.1 million recorded to additional paid-in capital[70]. Management and Governance - The company accepted the resignation of CEO Anthony P. Mack effective November 17, 2023, with estimated separation compensation of $711,000 recorded in accounts payable and accrued expenses[60]. - An employment dispute arose with former executives regarding alleged violations of their employment agreements, with the company denying the allegations and planning to defend the matter[118]. Tax and Valuation - The company expects no current tax expenses during 2024 due to current year losses and maintains a full valuation allowance on deferred tax assets[39]. - The company has no uncertain income tax positions as of September 30, 2024[40]. Financing and Capital Needs - The company will need to raise additional capital to fund operations and litigation costs, with substantial doubt about its ability to continue as a going concern[25][26]. - The company is negotiating a subsequent financing of not less than $5 million with the investor, with exclusive negotiation rights until November 30, 2024[115].