Minerva Neurosciences(NERV) - 2022 Q2 - Quarterly Report

PART I Financial Statements Unaudited H1 2022 financial statements report a net loss of $18.5 million, a $8.4 million stockholders' deficit, and a 1-for-8 reverse stock split - On June 17, 2022, the company effected a 1-for-8 reverse stock split of its common stock, with all share and per-share amounts retroactively adjusted[31][32][34] - In January 2021, the company sold its royalty interest in seltorexant for a $60 million upfront payment, with the liability growing to $69.9 million by June 30, 2022, due to accrued non-cash interest[46][48] Condensed Consolidated Balance Sheets (Unaudited) | Metric | June 30, 2022 ($) | December 31, 2021 ($) | | :--- | :--- | :--- | | Cash and cash equivalents | $49,753,998 | $60,755,080 | | Total assets | $64,959,298 | $77,121,918 | | Liability related to the sale of future royalties | $69,932,614 | $66,327,321 | | Total liabilities | $73,341,542 | $69,146,275 | | Total stockholders' (deficit) equity | $(8,382,244) | $7,975,643 | Condensed Consolidated Statements of Operations (Unaudited) | Metric | Three Months Ended June 30, 2022 ($) | Three Months Ended June 30, 2021 ($) | Six Months Ended June 30, 2022 ($) | Six Months Ended June 30, 2021 ($) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $4,131,978 | $5,520,928 | $9,091,841 | $8,779,635 | | General and administrative | $2,833,211 | $3,442,365 | $5,862,606 | $7,691,179 | | Net loss | $(8,717,714) | $(10,589,163) | $(18,482,143) | $(19,393,896) | | Net loss per share, basic and diluted | $(1.63) | $(1.98) | $(3.46) | $(3.63) | Condensed Consolidated Statements of Cash Flows (Unaudited) | Metric | Six Months Ended June 30, 2022 ($) | Six Months Ended June 30, 2021 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | $(11,001,077) | $(11,142,185) | | Net cash provided by financing activities | $(5) | $60,000,000 | | Net (decrease) increase in cash | $(11,001,082) | $48,857,815 | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses roluperidone NDA preparation, Q2 2022 operating expense decreases, and the sufficiency of $49.9 million cash for the next 12 months - The company is preparing for a potential NDA submission for roluperidone in Q3 2022, despite FDA concerns regarding Phase 2b study applicability and post hoc analyses for the Phase 3 study[73][77][79] - As of June 30, 2022, the company had approximately $49.9 million in cash, cash equivalents, and restricted cash, believed sufficient for at least the next 12 months[97] - Net cash used in operating activities for the six months ended June 30, 2022, was $11.0 million, primarily due to a net loss of $18.5 million, offset by non-cash expenses[105] Operating Expense Comparison (Q2 2022 vs Q2 2021) | Expense Category | Q2 2022 ($ millions) | Q2 2021 ($ millions) | Change ($ millions) | | :--- | :--- | :--- | :--- | | Research & Development | $4.1 million | $5.5 million | -$1.4 million | | General & Administrative | $2.8 million | $3.4 million | -$0.6 million | Quantitative and Qualitative Disclosures about Market Risk The company reports this section is not applicable - Not applicable[115] Controls and Procedures Management concluded disclosure controls and procedures were effective as of June 30, 2022, with no material changes to internal control over financial reporting - Based on an evaluation as of June 30, 2022, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[117] - There were no material changes in internal control over financial reporting during the quarter[118] PART II — Other Information Legal Proceedings The company is not currently party to any legal proceedings expected to have a material adverse effect on its business - As of the report date, the company is not party to any claim or litigation that is expected to have a material adverse effect on its business[120] Risk Factors Updated risk factors include significant accumulated losses, need for additional capital, potential Nasdaq delisting due to equity deficiency, and regained bid price compliance - The company has a history of significant losses, with an accumulated deficit of $353.2 million as of June 30, 2022, and expects to continue incurring losses[123][124] - The company will require additional capital to finance operations, with existing cash of $49.9 million deemed sufficient for at least the next 12 months, though future financing is not guaranteed[126][127] - On March 8, 2022, the company received a deficiency letter from Nasdaq for not meeting the $10 million stockholders' equity requirement, but was granted an extension until September 5, 2022, to regain compliance[156] - The company regained compliance with Nasdaq's $1.00 minimum bid price requirement on July 6, 2022, following a 1-for-8 reverse stock split implemented in June 2022[155] - The company is subject to evolving U.S. and foreign data privacy and security laws, and non-compliance could lead to significant penalties, litigation, and reputational harm[136][137][138] Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities during the period - None[159] Defaults Upon Senior Securities The company reports this section is not applicable - Not applicable[160] Mine Safety Disclosures The company reports this section is not applicable - Not applicable[161] Other Information The company reports this section is not applicable - Not applicable[162] Exhibits This section lists exhibits filed with the report, including the Certificate of Amendment for the reverse stock split and Sarbanes-Oxley certifications - Lists exhibits filed with the report, including the Certificate of Amendment to the Amended and Restated Certificate of Incorporation effective June 17, 2022, and Sarbanes-Oxley certifications[164]