Perspective Therapeutics(CATX) - 2023 Q3 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for Perspective Therapeutics, Inc. for the quarter ended March 31, 2023, reflecting the significant impact of the Viewpoint Molecular Targeting, Inc. acquisition on assets, liabilities, and operating results Condensed Consolidated Balance Sheets Total assets increased to $127.6 million from $58.1 million at year-end 2022, primarily due to $50.0 million in intangible assets and $27.3 million in goodwill from the Viewpoint merger Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total Current Assets | $40,266 | $53,215 | | Cash and cash equivalents | $36,452 | $20,993 | | Intangible assets | $50,000 | $0 | | Goodwill | $27,319 | $0 | | Total Assets | $127,645 | $58,091 | | Total Liabilities | $9,617 | $3,449 | | Total Stockholders' Equity | $118,028 | $54,642 | Condensed Consolidated Statements of Operations The company reported a net loss of $0.37 million for Q1 2023, an improvement from $1.35 million in Q1 2022, primarily due to a $10.5 million deferred income tax benefit, despite a widened operating loss of $11.2 million Statement of Operations Summary (in thousands) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Total Revenue | $2,063 | $2,910 | | Gross Profit | $487 | $1,441 | | Total Operating Expenses | $11,714 | $2,817 | | Operating Loss | ($11,227) | ($1,376) | | Deferred income tax benefit | $10,500 | $0 | | Net Loss | ($371) | ($1,347) | | Basic and Diluted Loss Per Share | ($0.00) | ($0.01) | Condensed Consolidated Statements of Cash Flows Net cash used by operating activities increased to $9.7 million in Q1 2023, while investing activities provided $25.3 million, resulting in a $15.5 million increase in cash and cash equivalents Cash Flow Summary (in thousands) | Activity | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net cash used by operating activities | ($9,723) | ($1,424) | | Net cash provided (used) by investing activities | $25,262 | ($26) | | Net cash used by financing activities | ($80) | $0 | | Net increase (decrease) in cash | $15,459 | ($1,450) | Notes to the Condensed Consolidated Financial Statements The notes detail significant accounting policies, the Viewpoint merger's impact, segment performance, revenue concentration, and commitments, including provisional purchase price allocation and revenue breakdown - The company operates two reportable business segments: Brachytherapy (Cesium-131 seeds) and Drug Operations (R&D related to Lead-203/Lead-212 from the Viewpoint acquisition)[74][93] - Grant revenue from government agencies is recognized under ASC 958 as qualified expenses are incurred, as grants are conditional, nonreciprocal contributions[13][88] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition and results, highlighting the transformative Viewpoint merger, challenges from declining brachytherapy sales and increased operating expenses, and the need for future capital raises despite sufficient cash through 2023 Overview The company operates through Isoray Medical, Inc. (Cesium-131 brachytherapy seeds) and Viewpoint Molecular Targeting, Inc. (clinical-stage alpha-therapies), with the February 2023 merger aiming to enter the alpha-emitter market - The company consists of two subsidiaries: Isoray Medical, Inc. (brachytherapy device manufacturer) and Viewpoint Molecular Targeting, Inc. (precision oncology R&D)[127] - Viewpoint is developing VMT-α-NET for neuroendocrine tumors and VMT01 for metastatic melanoma, utilizing Lead-203 for imaging and Lead-212 for therapy[89][109][128] - The merger with Viewpoint was completed on February 3, 2023, involving the issuance of 136,545,075 shares of common stock to Viewpoint stockholders[131] Results of Operations Total revenue decreased 29% to $2.1 million in Q1 2023 due to a 56% drop in prostate brachytherapy sales, while operating expenses surged 316% to $11.7 million from merger-related costs and increased R&D Comparison of Operations (in thousands) | Metric | Q1 2023 | Q1 2022 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $2,063 | $2,910 | (29)% | | Sales, net | $1,830 | $2,910 | (37)% | | Grant revenue | $233 | $0 | 100% | | Gross Profit | $487 | $1,441 | (66)% | | Total Operating Expenses | $11,714 | $2,817 | 316% | | Research & development | $3,857 | $549 | 603% | | General & administrative | $7,023 | $1,581 | 344% | | Operating Loss | ($11,227) | ($1,376) | 716% | - The 56% decrease in prostate sales resulted from the loss of the company's historically largest customer, who ceased placing orders after a late 2022 supply disruption[118][135] - The significant increase in R&D costs is a direct result of incorporating Viewpoint's development-stage operations[141][162] - The increase in G&A expenses was primarily due to approximately $4.6 million in legal, investment banking, and other merger-related costs, alongside ongoing G&A from Viewpoint's operations[97][166] Liquidity and Capital Resources Working capital decreased to $33.1 million in Q1 2023, with $9.7 million net cash used in operations, and while current cash is sufficient through 2023, the company anticipates needing to raise additional capital for long-term operations Liquidity Metrics (in thousands) | Metric | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Working Capital | $33,072 | $50,539 | | Current Ratio | 5.60 | 19.89 | - Management forecasts that current cash and equivalents will be sufficient to meet projected operating needs through December 31, 2023[171] - The company anticipates a significant increase in expenses, particularly R&D for Viewpoint's operations, and does not expect to achieve cashflow break-even for three to four years, necessitating future capital raises[171][188] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section is not applicable for the reporting period - The company has indicated no applicable quantitative and qualitative disclosures about market risk for this period[193] Item 4. Controls and Procedures Disclosure controls and procedures were deemed effective as of March 31, 2023, with no material changes in internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2023[181] - No changes occurred during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[194] PART II - OTHER INFORMATION Item 1. Legal Proceedings The company is only involved in ordinary, routine litigation incidental to its business - The Company is only involved in ordinary routine litigation incidental to its business[195] Item 1A. Risk Factors The company faces significant risk due to heavy reliance on a small number of customers, with 45% of Q1 2023 revenue from three customers, and the loss of its largest customer already materially impacting revenues - For Q1 2023, approximately 45% of the Company's revenues were dependent on three customers, with one customer generating 24% of revenue[183] - The company's historically largest customer has not placed any orders since September 2022, materially impacting revenues[183][196] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or specific uses of proceeds to report for the period - None reported[202] Item 6. Exhibits This section lists all exhibits filed with the quarterly report, including the Agreement and Plan of Merger with Viewpoint, officer certifications, and XBRL data files - A list of exhibits filed with the Form 10-Q is provided, referencing key corporate and transactional documents[185][198]