Strategic Focus - The company announced a strategic shift to focus on oncology, deprioritizing preclinical vaccine programs to enhance shareholder value and provide leading-edge therapeutics, diagnostics, and services[91]. - The company has deprioritized its vaccine discovery and development programs, now operating solely in the commercial segment focused on ENTADFI[102]. - The company signed a non-binding term sheet to acquire a private commercial stage oncology biotechnology company, which will further align with its new oncology focus[103]. Financial Performance - The company has a working capital deficit of approximately $8.1 million and an accumulated deficit of approximately $34.4 million as of September 30, 2023[111]. - The company incurred net losses since inception and expects to continue incurring losses in the foreseeable future, with significant fluctuations based on various operational activities[111]. - The company incurred a net loss of $5.3 million and $15.1 million for the three and nine months ended September 30, 2023, respectively, with an accumulated deficit of $34.4 million as of the same date[193]. - Total operating expenses for the nine months ended September 30, 2023, were $14.0 million, a 36.6% increase from $10.2 million in the same period in 2022[205]. - The company generated negative operating cash flows of $9.3 million for the nine months ended September 30, 2023[193]. - The company reported a net cash decrease of approximately $18.1 million for the nine months ended September 30, 2023[232]. Revenue Generation - The company expects to generate revenue from sales of ENTADFI, which is FDA-approved, in the near term, although expenses are anticipated to increase substantially due to commercialization activities[109]. - The company has not generated any revenue from product sales, relying on financing from preferred securities, IPO proceeds, and warrant exercises[133]. - The company has not generated any revenue from product sales aside from ENTADFI since its acquisition in April 2023[208]. Management Changes - Bruce Harmon was appointed as Chief Financial Officer on October 4, 2023, with an annual base salary of $325,000 and a target discretionary bonus of up to 30% of his salary[117]. - The Company appointed Dr. Neil Campbell as President and CEO on October 4, 2023, with an annual salary of $475,000 and a signing bonus of $75,000[138]. Agreements and Acquisitions - The company signed an agreement with UpScriptHealth to create a telemedicine platform for distributing ENTADFI, supporting patients throughout the prescription process[106]. - The company agreed to provide Veru with initial consideration totaling $20 million for the acquisition of ENTADFI, with specific payment terms outlined[119]. - The Company is set to acquire WraSer Assets for a total consideration of $9.5 million in cash and 1.0 million shares of common stock, with a $500,000 payment due one year after closing[122]. - The acquisition of ENTADFI® from Veru was for a total possible consideration of $100 million, with additional milestone payments of up to $80 million based on net sales[140][143]. - The Company entered into an Exclusive Distribution Agreement with Cardinal Health 105, LLC for the distribution of all commercial assets on September 21, 2023[129]. - The Company entered into a development and manufacturing agreement with Ology, with obligations increasing by $180,000 under the amended project addendum[153]. Compliance and Regulatory Matters - The Company regained compliance with Nasdaq Listing Rule 5250(c)(1) on November 1, 2023, after filing its Form 10-Q for the period ended June 30, 2023[126]. - The Company is required to regain compliance with Nasdaq's minimum bid price rule by March 16, 2024, after being notified of non-compliance[172]. - The company has filed a motion for relief from the automatic stay in the Bankruptcy Court to exercise termination rights under the WraSer APA due to a Material Adverse Effect[147]. Expenses and Financial Obligations - Selling, general and administrative expenses increased by approximately $1.0 million for the nine months ended September 30, 2023, mainly due to increased commercialization activities for ENTADFI of $2.2 million[190]. - Selling, general and administrative expenses increased by approximately $1.6 million (58.4%) for the three months ended September 30, 2023, primarily due to increased commercialization activities for ENTADFI[203]. - The Company has significant commercialization expenses expected for marketing, manufacturing, and distribution of ENTADFI®[132]. - The Company is required to pay a 6% royalty on sales of tadalafil-finasteride and milestone payments of up to $22.5 million based on sales achievements[144]. - A $3.5 million impairment loss was recorded on the deposit for the WraSer asset purchase agreement during the nine months ended September 30, 2023[191]. - An early termination fee of approximately $2.3 million will be recorded in the quarter ending December 31, 2023, following the termination of the Master Services Agreement[199]. Capital Needs - The company expects to require significant additional capital in the short term to fund ongoing operations and commercialization of ENTADFI, with potential financing through public or private equity or debt[210]. - The company anticipates needing significant additional capital to fund operations and support commercialization of ENTADFI, which has not yet been successfully commercialized[227]. - The company may face significant uncertainty in launching ENTADFI if adequate financing is not obtained[227]. Internal Controls - The company has developed a remediation plan for material weaknesses in internal control over financial reporting[248].
Blue Water Biotech(BWV) - 2023 Q3 - Quarterly Report