Drug Development - The company focuses on developing targeted anti-cancer drug candidates, with three lead candidates: dovitinib, stenoparib, and IXEMPRA [173] - Stenoparib is now the lead clinical asset, advancing in two out of three ongoing clinical trials [175] - The company continues to support the clinical development of IXEMPRA and dovitinib, which are believed to have substantial potential [175] - The company expects to incur substantial expenses for the development and commercialization of drug candidates, requiring additional funding in the future [237] Financial Performance - The company incurred net losses of $5.7 million and $8.2 million for the six months ended June 30, 2023, and 2022, respectively, with an accumulated deficit of $88.3 million as of June 30, 2023 [217] - Cash balance as of June 30, 2023, was $420 thousand, indicating limited liquidity for ongoing operations [217] - Total operating costs and expenses for the six months ended June 30, 2023, were $7.824 million, a decrease of $15.327 million compared to $23.151 million for the same period in 2022 [224] - Research and development expenses for the three months ended June 30, 2023, were $1.105 million, a decrease of $591 thousand from $1.696 million in the same period in 2022 [224] - General and administrative expenses for the six months ended June 30, 2023, were $5.292 million, a decrease of $867 thousand from $6.159 million in the same period in 2022 [224] - Other income for the three months ended June 30, 2023, was $1,776, compared to a loss of $257 for the same period in 2022, reflecting a significant improvement [231] - For the six months ended June 30, 2023, other income was $2,092, up from $13,745 in the same period of 2022, primarily due to a fair value adjustment to derivative liabilities [233] Funding and Capital Structure - The company raised approximately $11 million from a public offering on July 10, 2023, selling 357,223 shares of common stock at an effective price of $4.50 per share [190] - The conversion price of Series A Preferred Stock was reduced to $4.50 following the July offering [191] - The company redeemed 4,630 shares of Series A Preferred Stock for $5,000,400 in cash on July 10, 2023 [189] - The company received a loan of $350,000 from 3i on April 19, 2023, which was converted into shares of Series A Preferred Stock [183] - The company entered into a series of agreements with 3i, including a modification of the Series A Preferred Stock terms and a cancellation of debt agreement [184] - The number of shares exercisable under the Exchange Warrant was adjusted to 3,134,693 shares with an exercise price of $3.0155 per share following the July Offering [192] - The Company secured a promissory note of $350,000 from 3i with a 5% annual interest rate, which was fully redeemed for $350,886 in cash on July 10, 2023 [194] - Following a public offering on July 10, 2023, the company raised approximately $11 million, but the net proceeds of about $4.7 million are insufficient to fund operations for more than three months [235] - The company plans to mitigate funding challenges through additional public equity, private equity, and debt financing, but there are no assurances of success [236] Compliance and Governance - The board of directors was restructured with the appointment of new independent directors, ensuring compliance with Nasdaq requirements [178] - The company regained compliance with Nasdaq listing requirements as of July 14, 2023, and will be subject to a panel monitor for one year [213] - The Company filed an appeal with Nasdaq after being notified of potential delisting due to non-compliance with listing rules [209] - The company intends to seek further clarification from the Nasdaq hearings panel regarding compliance conditions [212] Stock and Shareholder Information - The June Reverse Stock Split reduced the outstanding shares of Common Stock from 20,142,633 to approximately 503,566 shares at a ratio of 1-for-40 [195] - From March 31, 2023 to August 14, 2023, the Company issued 223,857 shares of Common Stock upon the conversion of 8,214 shares of Series A Preferred Stock [200] - The exercise price of the April 2023 Common Warrants was reduced to $4.50 per share and the termination date extended to July 10, 2028 [199] - As of June 30, 2023, the company had $420 in cash and an accumulated deficit of $88.3 million, with a working capital deficit of $9 million [234] Operational Challenges - The company expects to continue incurring significant expenses and increasing operating losses over the next several years due to ongoing research and development activities [217] - Manufacturing and supplies expenses increased by $365 thousand for the three months ended June 30, 2023, primarily due to increased drug manufacturing costs [228] - As of August 11, 2023, the company had a cash position of approximately $1.2 million, which is insufficient to fund operations for the next twelve months [245] - For the six months ended June 30, 2023, net cash used in operating activities was approximately $5.7 million, a decrease of $4.2 million compared to the same period in 2022 [242] - Net cash provided by financing activities for the six months ended June 30, 2023, was approximately $4 million, compared to a cash outflow of $2.3 million in the same period of 2022 [244]
Allarity Therapeutics(ALLR) - 2023 Q2 - Quarterly Report