GeoVax Labs(GOVX) - 2023 Q3 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements The unaudited condensed consolidated financial statements for the period ended September 30, 2023, show a significant increase in net loss and a substantial decrease in cash and stockholders' equity compared to the previous year, raising doubt about the company's going concern ability as existing cash is projected to fund operations only into the first quarter of 2024 Condensed Consolidated Balance Sheets As of September 30, 2023, the company's total assets decreased to $16.2 million from $31.3 million at year-end 2022, primarily due to a significant reduction in cash and cash equivalents, while total liabilities increased and total stockholders' equity fell sharply from $26.6 million to $9.1 million Condensed Consolidated Balance Sheets (unaudited) | | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Current Assets | | | | Cash and cash equivalents | $12,687,041 | $27,612,732 | | Total current assets | $14,800,290 | $28,938,730 | | Total Assets | $16,201,031 | $31,347,928 | | Current Liabilities | | | | Total current liabilities | $7,081,685 | $4,747,894 | | Total Stockholders' Equity | $9,119,346 | $26,600,034 | Condensed Consolidated Statements of Operations For the three and nine months ended September 30, 2023, the company reported significantly higher net losses compared to the same periods in 2022, driven by a substantial rise in research and development expenses, which more than doubled year-over-year Statements of Operations Highlights (unaudited) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Grant Revenue | $0 | $0 | $0 | $81,526 | | Research and Development | $6,947,979 | $2,721,196 | $14,486,896 | $5,358,917 | | General and Administrative | $1,651,775 | $1,249,337 | $4,562,293 | $3,363,672 | | Net Loss | $(8,408,818) | $(3,968,102) | $(18,374,354) | $(8,637,316) | | Net Loss Per Share | $(0.32) | $(0.17) | $(0.69) | $(0.63) | Condensed Consolidated Statements of Changes in Stockholders' Equity Stockholders' equity decreased from $26.6 million at the end of 2022 to $9.1 million by September 30, 2023, primarily driven by the cumulative net loss of $18.4 million for the nine-month period, slightly offset by stock-based compensation and stock issuances for services - Total stockholders' equity declined from $26,600,034 at December 31, 2022, to $9,119,346 at September 30, 2023[15] - The primary driver for the decrease in equity was the net loss of $18,374,354 for the nine months ended September 30, 2023[13][15] Condensed Consolidated Statements of Cash Flows For the nine months ended September 30, 2023, net cash used in operating activities increased to $14.9 million from $12.0 million in the prior year period, with no financing activities in 2023 unlike 2022's $35.4 million, leading to a net decrease in cash of $14.9 million Cash Flow Summary (unaudited) | Cash Flow Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(14,895,694) | $(11,965,972) | | Net cash used in investing activities | $(29,997) | $(134,258) | | Net cash provided by financing activities | $0 | $35,353,328 | | Net (decrease) increase in cash | $(14,925,691) | $23,253,098 | Notes to Condensed Consolidated Financial Statements The notes highlight the company's focus on developing immunotherapies and vaccines, crucially stating that existing cash resources are only sufficient to fund operations into Q1 2024, raising substantial doubt about the company's ability to continue as a going concern, and detailing commitments under operating leases, license agreements, stock options, and warrants outstanding - The company's existing cash resources are only sufficient to fund planned operations into the first quarter of 2024, which raises substantial doubt about its ability to continue as a going concern[23] - As of September 30, 2023, there were 2,018,800 stock options and 13,384,115 stock purchase warrants outstanding[32][33] - The company has commitments for an operating lease for office and lab space expiring in December 2025, as well as various technology license agreements with uncertain future payment amounts[27][28] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's focus as a clinical-stage biotechnology firm and provides updates on its key clinical trials, including GEO-CM04S1 for COVID-19 and Gedeptin for head and neck cancer, highlighting a significant increase in operating expenses, primarily R&D, leading to a larger net loss and major liquidity concerns with cash reserves expected to be depleted by early 2024, necessitating additional funding Overview and Recent Events GeoVax is advancing its pipeline of immunotherapies and vaccines, with recent developments including positive immunogenicity data for its COVID-19 vaccine (GEO-CM04S1), expansion of its Phase 2 trial sites, completion of enrollment in another booster trial, and safety and feasibility findings for the Gedeptin trial for head and neck cancer, alongside securing a commercial license for a new manufacturing cell line and receiving several Notices of Allowance for new patents - GEO-CM04S1 COVID-19 Vaccine: Phase 2 trial in immunocompromised patients showed high immunogenicity; site expansion is underway to accelerate enrollment. A separate booster trial has completed patient enrollment[42][49] - Gedeptin® Cancer Therapy: Interim data from the Phase 1/2 trial in advanced head and neck cancer indicated safety, feasibility, and observation of tumor growth impairment[49] - Manufacturing & IP: Signed a commercial license with ProBioGen for its AGE1.CR.pIX® cell line to enhance MVA-based vaccine manufacturing. Received multiple U.S. Patent Office Notices of Allowance for its Marburg, HIV, Malaria, and Ebolavirus vaccine platforms[46][50] Results of Operations Comparing the three and nine-month periods ended September 30, 2023, to 2022, the company saw a significant widening of its net loss, primarily driven by a 155% and 170% increase in R&D expenses for the respective periods, attributed to clinical trial costs for GEO-CM04S1 and Gedeptin, while general and administrative expenses also rose by 32% and 36% due to higher personnel, consulting, and legal costs Comparison of Operating Results | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Research & Development | $6,947,979 | $2,721,196 | $14,486,896 | $5,358,917 | | General & Administrative | $1,651,775 | $1,249,337 | $4,562,293 | $3,363,672 | | Net Loss | $(8,408,818) | $(3,968,102) | $(18,374,354) | $(8,637,316) | - R&D expenses increased 170% for the nine-month period due to costs of clinical trials for GEO-CM04S1 and Gedeptin, manufacturing materials, license fees, and personnel costs[62] - G&A expenses increased 36% for the nine-month period due to higher personnel costs, investor relations consulting, legal fees, and patent costs[63] Liquidity and Capital Resources The company's liquidity has significantly deteriorated, with cash and cash equivalents dropping to $12.7 million from $27.6 million at the end of 2022, and working capital also decreasing sharply, as the company used $14.9 million in cash for operations during the first nine months of 2023 with no financing activities, in contrast to raising over $35 million in the same period of 2022, necessitating substantial additional funding as current cash will only fund operations into the first quarter of 2024 - Existing cash and cash equivalents are expected to be sufficient to fund operations only into the first quarter of 2024[68] Liquidity and Capital Resources Summary | Metric | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $12,687,041 | $27,612,732 | | Working capital | $7,718,605 | $24,190,836 | - Net cash used in operating activities was $14.9 million for the nine months ended September 30, 2023. There were no cash proceeds from financing activities during this period, compared to $35.4 million in the prior year period[65][66] Item 3. Quantitative and Qualitative Disclosures about Market Risk This section is not applicable as the company qualifies as a smaller reporting company - Not applicable to smaller reporting companies[71] Item 4. Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of September 30, 2023, with no significant changes in internal control over financial reporting during the quarter - Based on an evaluation as of the end of the period, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures are effective[73] - No significant changes in internal control over financial reporting occurred during the three months ended September 30, 2023[74] PART II – OTHER INFORMATION Item 1. Legal Proceedings The company reported no legal proceedings - None[77] Item 1A. Risk Factors As a smaller reporting company, GeoVax is not required to provide updates on material changes to risk factors, referring to the risk factors disclosed in its most recent Annual Report on Form 10-K - As a smaller reporting company, GeoVax is not required to provide information on material changes from the risk factors previously disclosed in its most recent Annual Report on Form 10‑K[78] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During the quarter, the company issued a total of 251,638 shares of restricted common stock in two separate transactions to consultants for professional services, relying on exemptions from registration under the Securities Act - On August 10, 2023, the company issued 178,253 shares of restricted common stock to Outside the Box Capital, Inc. for professional services[79] - On September 28, 2023, the company issued 73,385 shares of restricted common stock to Acorn Management Partners, LLC for consulting services[80] Item 5. Other Information The company reported that no directors or executive officers adopted or terminated any Rule 10b5-1 trading arrangements during the period - During the reporting period, none of the company's directors or executive officers adopted or terminated any "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement"[83] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including an At The Market Offering Agreement, officer certifications, and Inline XBRL documents - Exhibits filed include an At The Market Offering Agreement with H.C. Wainwright & Co., LLC, certifications from the CEO and CFO, and XBRL data files[85]