Plus Therapeutics(PSTV) - 2023 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This part details the company's unaudited financial statements and management's discussion and analysis Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed financial statements, including balance sheets, statements of operations, stockholders' equity, and cash flows, along with accompanying notes. It provides a snapshot of the company's financial position, performance, and cash movements for the periods ended June 30, 2023, and December 31, 2022 Condensed Balance Sheets This section summarizes the company's financial position, detailing assets, liabilities, and equity Condensed Balance Sheet Highlights (in thousands) | Metric | June 30, 2023 | December 31, 2022 | Change (2023 vs 2022) | | :-------------------------- | :-------------- | :---------------- | :-------------------- | | Cash and cash equivalents | $10,895 | $18,120 | $(7,225) | | Total current assets | $12,364 | $21,817 | $(9,453) | | Total assets | $14,197 | $23,867 | $(9,670) | | Total current liabilities | $11,399 | $11,852 | $(453) | | Total liabilities | $11,535 | $17,422 | $(5,887) | | Total stockholders' equity | $2,662 | $6,445 | $(3,783) | Condensed Statements of Operations This section presents the company's financial performance, detailing revenues, expenses, and net loss Condensed Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------------------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Development revenues: Government contracts and other | $1,854 | $— | $2,360 | $— | | Research and development expenses | $1,420 | $2,831 | $4,403 | $4,615 | | General and administrative expenses | $1,924 | $2,289 | $4,167 | $4,431 | | Total operating expenses | $3,344 | $5,120 | $8,570 | $9,046 | | Loss from operations | $(1,490) | $(5,120) | $(6,210) | $(9,046) | | Net loss | $(1,482) | $(5,282) | $(6,287) | $(9,398) | | Net loss per share, basic and diluted | $(0.59) | $(3.56) | $(2.60) | $(6.43) | Condensed Statements of Stockholders' Equity This section outlines changes in the company's equity accounts, including common stock, capital, and deficit Condensed Statements of Stockholders' Equity Highlights (in thousands, except share data) | Metric | December 31, 2022 | June 30, 2023 | | :-------------------------- | :---------------- | :------------ | | Common stock shares | 2,240,092 | 2,879,620 | | Common stock amount | $2 | $3 | | Additional paid-in capital | $473,628 | $476,131 | | Accumulated deficit | $(467,185) | $(473,472) | | Total stockholders' equity | $6,445 | $2,662 | Condensed Statements of Cash Flows This section details cash inflows and outflows from operating, investing, and financing activities Condensed Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(8,571) | $(6,516) | | Net cash used in investing activities | $(108) | $(715) | | Net cash provided by financing activities | $1,454 | $6,921 | | Net decrease in cash and cash equivalents | $(7,225) | $(310) | | Cash and cash equivalents at end of period | $10,895 | $18,090 | Notes to Condensed Financial Statements This section provides detailed explanations and additional information for the condensed financial statements 1. Basis of Presentation and New Accounting Standards This note outlines the basis for preparing the unaudited condensed financial statements, the impact of a reverse stock split, the company's policy for grant revenue recognition, and the adoption of new accounting guidance for credit losses - The Company implemented a 1-for-15 reverse stock split effective May 1, 2023, decreasing outstanding common stock from approximately 37.4 million to 2.5 million shares[24][25] - Government grants are recognized as revenue when related expenses are incurred, applying IAS 20 by analogy, as funding entities are not considered 'customers' under ASC 606[26][27] - The Company adopted ASU 2016-13 (Credit Losses) as of January 1, 2023, which did not materially impact its financial statements[29] 2. Use of Estimates This note highlights that the preparation of financial statements requires management to make significant estimates and assumptions, particularly concerning grant revenue recognition, asset impairment, and stock-based compensation - Significant estimates and critical accounting policies include grant revenue recognition, reviewing assets for impairment, and determining assumptions for stock-based compensation expense[30] 3. Liquidity and Going Concern The company's accumulated deficit, net loss, and cash used in operations raise substantial doubt about its ability to continue as a going concern, necessitating additional capital to fund future operations - The Company incurred a net loss of $(6.3) million and used $(8.6) million in cash from operations for the six months ended June 30, 2023, with an accumulated deficit of $473.5 million, raising substantial doubt about its ability to continue as a going concern[31] - The Company regained compliance with Nasdaq's Minimum Bid Requirement after a 1-for-15 reverse stock split effective May 1, 2023[35] - Ongoing need to raise additional cash from outside sources to fund future clinical development programs and operations; inability to do so would materially and adversely impact operations and could lead to default on its term loan[32][36][37] 4. Fair Value Measurements This note describes the company's fair value measurement hierarchy and the classification of Series U Warrants as Level 3 liability instruments, with immaterial changes in fair value - Series U Warrants are classified as Level 3 liability instruments and are marked to market each balance sheet date, with changes in fair value recorded as non-operating income or loss[39][40] 5. Term Loan Obligations Details of the term loan with Oxford Finance, LLC, including its original amount, interest rate, amendments, collateral, and the company's compliance with debt covenants - The Company has a Term Loan with Oxford Finance, LLC, with $2.0 million principal outstanding as of June 30, 2023, excluding a $3.2 million final payment fee, maturing June 1, 2024[41][44] - The Term Loan is collateralized by substantially all of the Company's assets, including intellectual property, and the Company was in compliance with all debt covenants as of June 30, 2023[44] Interest Expense (in thousands) | Period | 2023 | 2022 | | :-------------------------------- | :--- | :--- | | Three Months Ended June 30, | $112 | $181 | | Six Months Ended June 30, | $246 | $379 | 6. Loss per Share This note explains the calculation of basic and diluted loss per