GeoVax Labs(GOVX) - 2020 Q4 - Annual Report

Part I Business GeoVax develops vaccines and immunotherapies for infectious diseases and cancers using its GV-MVA-VLP™ platform, relying on collaborations and third-party manufacturing - GeoVax is a clinical-stage biotechnology company focused on developing immunotherapies and vaccines for cancers and infectious diseases, including COVID-19, using its novel GV-MVA-VLP™ vector vaccine platform[13] - The company's corporate strategy is to advance its vaccine platform through development, protection, and exploitation, aiming for regulatory registration and commercialization while considering collaborations to maximize stockholder value[18] - GeoVax relies on third-party contract manufacturers for all clinical and commercial supplies and notes a current shortage of vaccine manufacturing capability due to the high demand for COVID-19 vaccines[98][99] Research and Development Expenses (2019-2020) | Year | R&D Expense | | :--- | :--- | | 2020 | $2,444,459 | | 2019 | $1,910,715 | Product Development Pipeline GeoVax's pipeline includes a Phase 2a completed preventive HIV vaccine and preclinical candidates for COVID-19, hemorrhagic fevers, Zika, malaria, and cancer immunotherapies Product Development Pipeline Status | Product Area / Indication | Stage of Development | | :--- | :--- | | Cancer | | | HPV-related cancers | Preclinical | | MUC1-expressing tumors | Preclinical completed | | Infectious Diseases | | | HIV (preventive) | Phase 2a completed | | HIV (immunotherapy) | Phase 1 | | Zika | Preclinical completed | | Malaria | Preclinical | | Ebola, Marburg, Sudan | Preclinical completed | | Lassa Fever | Preclinical | | Coronavirus (COVID-19) | Preclinical | - The company's most advanced program, the preventive HIV vaccine GOVX-B11, is set for an upcoming HVTN 132 clinical trial expected to begin in late 2021[16][52] - In January 2020, GeoVax initiated a COVID-19 vaccine program, resulting in four candidates that are currently in preclinical animal testing with support from a NIAID SBIR grant[13][40][41] - Preclinical studies for the Ebola (EBOV) vaccine candidate showed 100% protection against a lethal dose with a single immunization in nonhuman primates. Similarly, the Marburg (MARV) and Sudan vaccine candidates showed 100% protection in guinea pig challenge studies[61][62] Support from the United States Government GeoVax receives significant U.S. government funding, including DoD and NIAID grants, for its Lassa Fever, COVID-19, malaria, and HIV vaccine programs - In September 2018, the U.S. Department of Defense (DoD) awarded a $2,442,307 cooperative agreement to support the Lassa Fever (LASV) vaccine development program[78] - In January 2021, NIAID awarded a $299,927 Phase I SBIR grant to support the preclinical development of the company's COVID-19 vaccine candidates[79] - All human clinical trials for the preventive HIV vaccine to date have been conducted by the HVTN and fully funded by NIAID, a form of financial support not recognized in GeoVax's financial statements[84] Intellectual Property GeoVax's IP strategy includes 14 granted U.S. and 43 foreign patents as of December 31, 2020, with key technologies licensed from Emory University and NIH - As of December 31, 2020, GeoVax's patent estate includes 14 granted U.S. patents, 16 pending U.S. applications, 43 granted foreign patents, and 13 pending foreign applications[111] - The company holds an exclusive worldwide license from Emory University for key HIV vaccine technology, with related patents expiring between 2022 and 2028[112][119] - GeoVax has a non-exclusive commercial license from the NIH for the MVA backbone used in its SARS-CoV-2 vaccine and a research license for its other candidates[120] Risk Factors GeoVax faces substantial risks from operating losses, funding needs, unproven products, regulatory uncertainty, reliance on third parties, competition, IP, and stock dilution - The company has a history of operating losses, incurring a net loss of $2,958,068 in 2020, and expects losses to continue for the foreseeable future[137] - GeoVax requires substantial additional financing for its operations. Current working capital is expected to be sufficient to support operations into 2023, but additional funds will be needed beyond that[138][141] - The company's products are still in development, unproven in human clinical trials, and have not been approved for sale by any government agency[147] - GeoVax relies heavily on the HIV Vaccine Trials Network (HVTN) and NIAID for the execution and funding of its HIV clinical trials, and does not control many aspects of their activities[139][154] - There are 2,994,969 shares issuable upon the exercise of outstanding warrants, which would cause significant dilution to existing shareholders[178] Properties GeoVax leases 8,400 square feet of office and lab space in Smyrna, Georgia, under a lease expiring December 31, 2022 - The company leases 8,400 square feet of office and laboratory space in Smyrna, Georgia, with the lease expiring on December 31, 2022[130] Legal Proceedings GeoVax is not currently involved in any material legal proceedings - The company is not currently involved in any material legal proceedings[191] Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities GeoVax common stock trades on Nasdaq under "GOVX"; the company has never paid dividends and does not anticipate doing so - The company's common stock is traded on The Nasdaq Capital Market under the symbol "GOVX"[194] - GeoVax has never declared or paid cash dividends on its common stock and does not plan to in the foreseeable future, intending to retain any future earnings for business operations[196] Management's Discussion and Analysis of Financial Condition and Results of Operations GeoVax's 2020 net loss increased to $2.96 million, but liquidity significantly improved to $9.88 million cash and $9.42 million working capital, sufficient into 2023 Financial Position Comparison (2019 vs 2020) | Metric | Dec 31, 2020 ($) | Dec 31, 2019 ($) | | :--- | :--- | :--- | | Cash and cash equivalents | $9,883,796 | $283,341 | | Working Capital | $9,424,839 | ($1,568,929) | - Net cash provided by financing activities was $12.5 million in 2020, largely from a public offering in September 2020 that yielded net proceeds of approximately $11.2 million[221][226] - The company believes its existing cash resources, combined with current government grants, will be sufficient to fund planned operations into 2023[231] Results of Operations (2019 vs 2020) | Line Item | 2020 ($) | 2019 ($) | | :--- | :--- | :--- | | Grant and Collaboration Revenues | $1,823,658 | $1,175,896 | | Research and Development Expenses | $2,444,459 | $1,910,715 | | General and Administrative Expenses | $2,196,014 | $1,637,674 | | Net Loss | ($2,958,068) | ($2,370,629) | Controls and Procedures As of December 31, 2020, management concluded that disclosure controls and internal control over financial reporting were effective - Management concluded that as of December 31, 2020, the company's disclosure controls and procedures were effective[252] - Management's assessment concluded that the company's internal control over financial reporting was effective as of December 31, 2020[253] Part III Directors, Executive Officers and Corporate Governance Information on directors, executive officers, and corporate governance is incorporated by reference from the 2021 proxy statement - The required information for this item is incorporated by reference from the company's 2021 annual meeting proxy statement[258] Executive Compensation Executive compensation information is incorporated by reference from the 2021 annual meeting proxy statement - The required information for this item is incorporated by reference from the company's 2021 annual meeting proxy statement[262] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Security ownership and equity compensation plan information is incorporated by reference from the 2021 annual meeting proxy statement - The required information for this item is incorporated by reference from the company's 2021 annual meeting proxy statement[263] Certain Relationships and Related Party Transactions, and Director Independence Information on related party transactions and director independence is incorporated by reference from the 2021 annual meeting proxy statement - The required information for this item is incorporated by reference from the company's 2021 annual meeting proxy statement[264] Principal Accounting Fees and Services Principal accounting fees and services information is incorporated by reference from the 2021 annual meeting proxy statement - The required information for this item is incorporated by reference from the company's 2021 annual meeting proxy statement[265] Part IV Exhibits and Financial Statement Schedules This section provides an index to the financial statements, schedules, and all exhibits filed with the annual report - This item provides an index to the financial statements, schedules, and all exhibits filed with the annual report[267][269] Financial Statements Report of Independent Registered Public Accounting Firm Wipfli LLP issued an unqualified opinion on the financial statements, noting a Critical Audit Matter regarding complex equity transactions - The auditor, Wipfli LLP, provided an unqualified opinion, stating the financial statements are fairly presented in all material respects[280] - A Critical Audit Matter was identified related to the volume and complexity of the company's equity transactions, which required significant auditor judgment[284][287] Consolidated Financial Statements Consolidated financial statements show significant 2020 improvements in cash to $9.88 million and equity to $9.57 million, despite a $2.96 million net loss Consolidated Balance Sheet Highlights | Account | Dec 31, 2020 ($) | Dec 31, 2019 ($) | | :--- | :--- | :--- | | Cash and cash equivalents | $9,883,796 | $283,341 | | Total Assets | $10,393,899 | $468,880 | | Total Liabilities | $825,047 | $2,043,436 | | Total Stockholders' Equity (Deficiency) | $9,568,852 | ($1,574,556) | Consolidated Statement of Operations Highlights | Account | 2020 ($) | 2019 ($) | | :--- | :--- | :--- | | Grant and collaboration revenue | $1,823,658 | $1,175,896 | | Total operating expenses | $4,640,473 | $3,548,389 | | Net loss | ($2,958,068) | ($2,370,629) | | Loss per common share | ($2.14) | ($781.87) | Consolidated Statement of Cash Flows Highlights | Account | 2020 ($) | 2019 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | ($2,750,570) | ($1,398,497) | | Net cash used in investing activities | ($156,791) | ($7,606) | | Net cash provided by financing activities | $12,507,816 | $1,429,743 | Notes to Consolidated Financial Statements Notes detail 2020 accounting policies and events, including reverse stock splits, a $12.8 million public offering, and a $61.8 million NOL carryforward, with significant 2021 subsequent events - The company effected a 1-for-2000 reverse stock split in January 2020 and a 1-for-20 reverse stock split in September 2020[347] - On September 29, 2020, the company closed a public offering with gross proceeds of approximately $12.8 million[349] - As of December 31, 2020, the company had a federal net operating loss (NOL) carryforward of approximately $61.8 million[366] - Subsequent to year-end, in February 2021, the company closed a bought deal public offering with net proceeds of approximately $9.4 million[371][372]