Cocrystal(COCP) - 2021 Q2 - Quarterly Report

Part I – FINANCIAL INFORMATION Overview of the company's financial performance and position for the six months ended June 30, 2021, highlighting key statements and management analysis Financial Statements Presents the company's financial position, operations, equity, and cash flows for the six months ended June 30, 2021, showing increased net loss and cash Condensed Consolidated Balance Sheets Total assets increased to $87.4 million by June 30, 2021, driven by a significant rise in cash, with stockholders' equity growing to $84.7 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2021 (unaudited) | December 31, 2020 | | :--- | :--- | :--- | | Assets | | | | Cash | $67,062 | $33,010 | | Total current assets | $67,337 | $34,015 | | Total assets | $87,417 | $54,242 | | Liabilities & Equity | | | | Total current liabilities | $2,379 | $1,358 | | Total liabilities | $2,669 | $1,737 | | Total stockholders' equity | $84,748 | $52,505 | | Total liabilities and stockholders' equity | $87,417 | $54,242 | Condensed Consolidated Statements of Operations No collaboration revenue for the three and six months ended June 30, 2021, with a widened net loss of $6.6 million for the six-month period Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Collaboration revenue | $- | $554 | $- | $1,015 | | Research and development | $2,747 | $1,976 | $4,324 | $3,259 | | General and administrative | $1,081 | $2,028 | $2,242 | $3,167 | | Loss from operations | $(3,828) | $(3,450) | $(6,566) | $(5,411) | | Net loss | $(3,821) | $(3,495) | $(6,559) | $(5,485) | | Net loss per share | $(0.04) | $(0.07) | $(0.08) | $(0.12) | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity increased to $84.7 million by June 30, 2021, primarily due to $38.5 million in net proceeds from common stock sales - The sale of 26 million shares of common stock in the second quarter of 2021 provided net proceeds of $36.4 million, significantly boosting stockholders' equity[15] - Total stockholders' equity grew by $32.2 million in the first half of 2021, from $52.5 million to $84.7 million[15] Condensed Consolidated Statements of Cash Flows Net cash from financing activities significantly increased to $38.5 million, leading to a $34.1 million net increase in cash, totaling $67.1 million Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,394) | $(4,388) | | Net cash used in investing activities | $(40) | $(220) | | Net cash provided by financing activities | $38,486 | $16,505 | | Net increase in cash and restricted cash | $34,052 | $11,897 | | Cash and restricted cash at end of period | $67,112 | $19,365 | Notes to the Condensed Consolidated Financial Statements Details the company's biopharmaceutical focus, completion of Merck collaboration, significant capital raises, ongoing litigation, and post-quarter share authorization increase - The company's primary research responsibilities under the Collaboration Agreement with Merck were completed in January 2021, leading to no collaboration revenue in the first six months of 2021[48] - In May 2021, the company closed an underwritten public offering of 26 million shares, receiving approximately $36.4 million in net proceeds[70] - The company is engaged in ongoing litigation with Liberty Insurance Underwriters Inc. and A.G.P./Alliance Global Partners, with outcomes that cannot be reasonably estimated[98][101][102] - Subsequent to quarter end, in August 2021, the company increased its authorized shares of common stock from 100 million to 150 million[106] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses pipeline advancements, Q2 2021 operating results with no revenue and increased net loss, and $67.1 million cash providing 36 months of liquidity Research and Development Update The company is advancing its influenza, coronavirus, and norovirus programs, with a Phase 1 influenza study planned for Q3 2021 and an IND-enabling coronavirus study for H1 2022 - Influenza: The company's novel PB2 inhibitor, CC-42344, has completed preclinical IND-enabling studies, and a Phase 1 study is planned to start in the third quarter of 2021[111] - Coronavirus: The lead compound CDI-45205 demonstrated a strong synergistic effect with remdesivir and showed potent activity against multiple SARS-CoV-2 variants, with an IND-enabling study planned for the first half of 2022[115][116] - Norovirus: The company expects to complete a proof-of-concept animal study for its norovirus inhibitors by the end of 2021[118] Results of Operations Q2 2021 saw no revenue due to Merck collaboration completion, increased R&D expenses, decreased G&A expenses, and a net loss of $3.8 million Comparison of Operating Results (in thousands) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Change | | :--- | :--- | :--- | :--- | | Revenue | $- | $554 | $(554) | | Research & Development Expense | $2,747 | $1,976 | $771 | | General & Administrative Expense | $1,081 | $2,028 | $(947) | | Net Loss | $3,821 | $3,495 | $326 | Liquidity and Capital Resources The company holds $67.1 million in cash, sufficient for 36 months of operations, bolstered by $38.5 million from financing activities in H1 2021 - The company had $67.1 million in cash as of June 30, 2021, and believes this is sufficient to maintain planned operations for at least the next 36 months[134] - Net cash provided by financing activities was $38.5 million for the first six months of 2021, a significant increase from $16.5 million in the same period of 2020, primarily due to equity offerings[132] - In May 2021, an offering of 26 million shares of common stock generated approximately $36.4 million in net proceeds[138] Quantitative and Qualitative Disclosures About Market Risk This section is not applicable to the company as a smaller reporting company - The company stated that this item is not applicable[146] Controls and Procedures Management confirmed the effectiveness of disclosure controls and procedures as of June 30, 2021, with no material changes to internal controls - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2021[147] - No material changes were made to the company's internal controls over financial reporting during the quarter ended June 30, 2021[148] Part II – OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, and exhibits, providing additional context beyond the financial statements Legal Proceedings No material changes to previously disclosed legal proceedings were reported during the period - There were no material changes to the legal proceedings previously disclosed in the company's 2020 Annual Report on Form 10-K[151] Risk Factors The company reported no new risk factors in this filing - The company did not report any new risk factors in this filing[152] Unregistered Sales of Equity Securities and Use of Proceeds All recent sales of unregistered equity securities have been previously reported - All recent sales of unregistered securities have been previously reported[153] Exhibits Lists all exhibits filed with or incorporated by reference into the Form 10-Q, including corporate governance and certification documents - The exhibits filed with this Form 10-Q include the Certificate of Incorporation, officer certifications (Rule 302 and Section 906), and XBRL data files[157][160]