180 Life Sciences (US:ATNF)2022-03-30 16:00Financial Performance - As of December 31, 2021, 180 Life Sciences Corp. reported an accumulated deficit of $68,682,286 and a net loss of $20,324,648 for the year[542]. - The net loss for the year ended December 31, 2021 was $20,324,648, compared to a net loss of $10,884,058 in 2020, representing an increase of 87%[577]. - For the year ended December 31, 2021, total operating expenses were $15,641,003, an increase of 177% from $5,648,112 in 2020[577]. - Cash used in operating activities was $19,371,428 for the year ended December 31, 2021, compared to $3,871,961 in 2020[585]. - The company expects to continue incurring losses and will need to raise additional capital to fund operations[589]. Capital Requirements - The company anticipates needing to raise significant additional capital to support research, clinical trials, and operational costs, with reliance on equity financing[545][548]. - The company anticipates cash requirements of approximately $7,100,000 for 2022 and $33,400,000 for the years 2023 through 2026[590]. - The company raised approximately $13.88 million in August 2021 to support ongoing operations[593]. - The Company raised approximately $15 million in gross proceeds from the August 2021 Offering, with net proceeds of approximately $13.9 million after fees[597]. Research and Development - Research and development expenses are expected to increase as clinical programs progress, with a focus on three product platforms: fibrosis and anti-TNF, CBD derivatives, and α7nAChR[560][562]. - Research and development expenses decreased by $1,216,602 or 55%, totaling $1,000,769 in 2021 compared to $2,217,371 in 2020[578]. Operational Challenges - The company has a working capital deficit of $8,498,193 and requires approximately $500,000 in monthly cash to meet its operational needs[542][544]. - The impact of the COVID-19 pandemic has caused delays in clinical trials and may continue to affect future operations[556][557]. - The company has faced liquidity issues and may need to evaluate alternative actions to reduce operating expenses if profitability is not achieved[545][543]. - General and administrative expenses are expected to rise as the company expands its research and development activities and prepares for potential commercialization[569]. Shareholder and Stock Information - The business combination with KBL was finalized on November 6, 2020, resulting in the issuance of 17,500,000 shares of common stock to 180's stockholders[551][558]. - The Company converted $1,234,334 in convertible notes into 467,123 shares of common stock during Q3 2021, with conversion prices ranging from $2.45 to $3.29 per share[601]. - The Company issued 150,000 shares of common stock and warrants to purchase 25,000 shares at an exercise price of $7.07 per share to settle the Alpha Note[602]. Assets and Liabilities - As of December 31, 2021, the Company reported total goodwill, intangible assets, and in-process research and development (IPR&D) assets of $51.5 million, representing 81% of total assets[608]. - The fair market value of the Company's single reporting unit was determined to be $132,760,680 as of December 31, 2021, exceeding the carrying value of $40,207,861[610]. - Derivative liabilities totaled $15.2 million, or 65% of the Company's total liabilities, as of December 31, 2021[612]. - The Company had $8,224,508 in cash and cash equivalents as of December 31, 2021, with exposure primarily to interest rate risk[618]. Legal and Settlement Matters - The Company recorded a gain of approximately $650,000 after settling legal services with Mintz for $800,000, down from an original bill of $1,454,240[605]. - The Company recorded a loss of $223,250 related to the settlement agreement with EarlyBird Capital, which included a cash payment of $275,000 and 225,000 shares of restricted common stock[601]. Financing Activities - Cash provided by financing activities was $25,411,919 in 2021, compared to cash used of $8,733,927 in 2020[588]. - The Placement Agent received a commission of $1,050,000, which is 7% of the aggregate gross proceeds from the August 2021 Offering[597].