Matinas BioPharma(MTNB) - 2021 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Financial Statements This section presents the unaudited condensed consolidated financial statements for Q1 2021, encompassing balance sheets, statements of operations, stockholders' equity, and cash flows, accompanied by detailed notes Condensed Consolidated Balance Sheets As of March 31, 2021, total assets increased to $72.4 million, driven by cash and marketable securities, while total liabilities decreased to $5.8 million, resulting in increased stockholders' equity of $66.6 million Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $23,382,743 | $12,432,481 | | Marketable securities | $37,283,697 | $46,246,573 | | Total current assets | $63,135,665 | $61,554,845 | | Total assets | $72,350,569 | $70,967,306 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $2,221,352 | $3,567,621 | | Total liabilities | $5,794,465 | $7,236,609 | | Total stockholders' equity | $66,556,104 | $63,730,697 | Condensed Consolidated Statements of Operations and Comprehensive Loss For Q1 2021, the company reported a net loss of approximately $5.0 million or ($0.03) per share, consistent with the prior year, with minimal revenue and total expenses of approximately $6.4 million Condensed Consolidated Statements of Operations (Unaudited) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Revenue | $33,333 | $ - | | Research and development expense | $3,241,432 | $4,086,883 | | General and administrative expense | $3,145,010 | $2,259,631 | | Loss from operations | $(6,353,109) | $(6,346,514) | | Net loss | $(4,956,320) | $(5,045,898) | | Net loss per share - basic and diluted | $(0.03) | $(0.03) | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity increased from $63.7 million to $66.6 million, primarily due to $5.6 million net proceeds from a public stock offering and stock-based compensation, partially offset by net loss - During Q1 2021, the company issued 3,023,147 shares of common stock in a public offering, raising net proceeds of $5,580,471[17] - Stock-based compensation expense for Q1 2021 was approximately $1.1 million[17] Condensed Consolidated Statements of Cash Flow Net cash used in operating activities was approximately $4.7 million, while investing activities provided $8.8 million and financing activities provided $6.8 million, leading to a net cash increase of $11.0 million for Q1 2021 Condensed Consolidated Statements of Cash Flow (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,651,113) | $(4,664,546) | | Net cash provided by/(used in) investing activities | $8,816,859 | $(54,967,709) | | Net cash provided by financing activities | $6,784,516 | $47,439,344 | | Net increase/(decrease) in cash | $10,950,262 | $(12,192,911) | Notes to Unaudited Condensed Consolidated Financial Statements The notes detail the company's status as a clinical-stage biopharmaceutical firm with an accumulated deficit of $112.5 million, but with $60.7 million in cash and marketable securities, sufficient to fund operations into 2024, alongside key collaborations and a $5.6 million stock offering - The company is a clinical-stage biopharmaceutical company focused on developing novel pharmaceutical products using its lipid nanocrystal (LNC) platform delivery technology[22][24] - As of March 31, 2021, the company had cash and cash equivalents of $23.4 million and marketable securities of $37.3 million, which are believed to be sufficient to fund planned operations into 2024[27] - The company entered into an award agreement with the Cystic Fibrosis Foundation (CFF) for up to $4.2 million to support the preclinical development of its MAT2501 product candidate, recognizing $424,000 as credits to R&D expenses in Q1 2021[55][56] - Under a feasibility study agreement with Genentech, the company recognized approximately $33,000 of revenue in Q1 2021 for developing an oral formulation of a second molecule[57] - In Q1 2021, the company sold 3,023,147 shares of common stock under its At-The-Market Sales Agreement, generating net proceeds of approximately $5.6 million[26][59] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses the company's LNC platform, clinical asset advancement, and financial performance for Q1 2021, reporting a $5.0 million net loss, with $60.7 million in cash and marketable securities expected to fund operations into 2024 - The company's strategy is focused on advancing its LNC platform technology, delivering efficacy data for MAT2203 in the EnACT study, progressing MAT2501 with support from the Cystic Fibrosis Foundation, and expanding collaborations[81][84] - The company expects to continue incurring significant expenses and operating losses and will need additional financing, which it plans to seek through equity/debt offerings, collaborations, or other funding[82] Results of Operations Q1 2021 revenue was minimal at $33,000, while R&D expenses decreased by $0.9 million to $3.2 million due to trial completion, and G&A expenses increased by $0.8 million to $3.1 million due to higher compensation Direct Research and Development Expenses (in thousands) | Expense Category | Three months ended March 31, 2021 | Three months ended March 31, 2020 | | :--- | :--- | :--- | | Manufacturing process development | $489 | $305 | | Preclinical trials | $9 | $151 | | Clinical development | $771 | $1,493 | | Regulatory | $42 | $19 | | Internal staffing, overhead and other | $1,930 | $2,119 | | Total research and development | $3,241 | $4,087 | - The decrease in R&D expenses was primarily due to the completion of the LYPDISO clinical trial in January 2021[100] - The increase in G&A expense was primarily due to higher compensation expense related to the exercise of stock options during the quarter[101] Liquidity and Capital Resources As of March 31, 2021, the company held approximately $60.7 million in cash and marketable securities, raising $5.6 million from ATM sales, with $4.7 million net cash used in operations, sufficient to fund operations into 2024 - As of March 31, 2021, the company had cash, cash equivalents and marketable securities totaling approximately $60.7 million[103] - In Q1 2021, the company sold 3,023,147 shares of common stock under its ATM Sales Agreement, generating net proceeds of approximately $5.6 million[104] - The company expects its existing cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditures requirements into 2024[110] Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Cash used in operating activities | $(4,651) | $(4,664) | | Cash provided by/(used in) investing activities | $8,817 | $(54,968) | | Cash provided by financing activities | $6,785 | $47,439 | Quantitative and Qualitative Disclosures About Market Risk The company's market risk is primarily interest rate sensitivity on its $60.7 million cash and marketable securities, but due to the short-term nature of investments, no material impact from U.S. interest rate changes is anticipated - The company's primary market risk is interest income sensitivity from changes in U.S. interest rates on its cash, cash equivalents, and marketable securities[115] - Due to the short-term nature of the investment portfolio, a sudden change in market interest rates is not expected to have a material impact on financial condition or operations[115] Controls and Procedures As of March 31, 2021, disclosure controls and procedures were deemed effective, with modifications to internal controls over financial reporting resulting from the implementation of a new ERP system during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2021[116] - During the quarter ended March 31, 2021, the company implemented a new ERP system, which led to changes in its internal control over financial reporting[118] PART II - OTHER INFORMATION Legal Proceedings The company reported no legal proceedings during the reporting period - None[119] Risk Factors No material changes were reported from the risk factors previously disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2020 - There were no material changes from the risk factors set forth in the Annual Report on Form 10-K for the fiscal year ended December 31, 2020[120] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or use of proceeds during the reporting period - None[121] Other Information This item is not applicable for the current reporting period - Not applicable[124] Exhibits This section refers to the Exhibit Index, listing all exhibits filed with the Quarterly Report on Form 10-Q, including CEO and CFO certifications and XBRL data files - The Exhibit Index lists certifications from the CEO and CFO (31.1, 31.2, 32.1) and XBRL-related documents (101.1-101.6) filed with the report[125][131]