NanoViricides(NNVC) - 2023 Q3 - Quarterly Report

PART I FINANCIAL INFORMATION Financial Statements This section presents the unaudited condensed financial statements for the period ended March 31, 2023, including balance sheets, statements of operations, and cash flows, reporting a net loss of $1.7 million for the quarter and $5.0 million for the nine months Condensed Balance Sheets | Balance Sheet Highlights | March 31, 2023 (Unaudited) | June 30, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $9,650,958 | $14,066,359 | | Total current assets | $9,931,075 | $14,416,380 | | Total assets | $18,576,799 | $23,494,862 | | Total current liabilities | $348,744 | $412,837 | | Total stockholders' equity | $18,228,055 | $23,082,025 | - Cash and cash equivalents decreased by approximately $4.4 million, reflecting cash used in operations[9] Condensed Statements of Operations | Operating Results (Unaudited) | Three Months Ended Mar 31, 2023 | Three Months Ended Mar 31, 2022 | Nine Months Ended Mar 31, 2023 | Nine Months Ended Mar 31, 2022 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $1,196,094 | $1,255,074 | $3,479,463 | $4,613,302 | | General and administrative | $614,647 | $532,801 | $1,787,632 | $1,707,514 | | Loss from operations | ($1,810,741) | ($1,787,875) | ($5,267,095) | ($6,320,816) | | Net loss | ($1,702,804) | ($1,792,664) | ($5,018,580) | ($6,326,866) | | Net loss per share | ($0.15) | ($0.16) | ($0.43) | ($0.55) | - Net loss for the nine months ended March 31, 2023, decreased due to lower research and development expenses[11] Condensed Statements of Cash Flows | Cash Flow Summary (Unaudited) | Nine Months Ended March 31, 2023 | Nine Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($4,171,467) | ($4,493,550) | | Net cash used in investing activities | ($149,146) | ($248,986) | | Net cash used in financing activities | ($94,788) | ($202,007) | | Net change in cash | ($4,415,401) | ($4,944,543) | | Cash at end of period | $9,650,958 | $15,572,134 | Notes to the Condensed Financial Statements These notes provide crucial context to the financial statements, detailing the company's clinical-stage status, lead drug candidate NV-CoV-2 entering Phase 1 trials, liquidity position, and significant related-party transactions - The company is a clinical-stage biopharmaceutical firm with its lead candidate, NV-CoV-2 for COVID-19, entering Phase 1a/1b human clinical trials in India[20][21] - As of March 31, 2023, the company had an accumulated deficit of approximately $127.5 million and no revenue, but management believes $9.7 million in cash is sufficient for at least 12 months of operations[27][30] - The company holds exclusive worldwide licenses from TheraCour Pharma, Inc., a related party, for its core technology, with a 15% royalty on net sales upon commercialization[24] - The company licensed its COVID-19 drug candidates to Karveer Meditech for clinical development and commercialization in India, with NanoViricides reimbursing trial costs plus a 30% fee and receiving a 70% royalty on net sales[40] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's business, drug pipeline, and financial performance, focusing on advancing NV-CoV-2 into human clinical trials and expanding NV-387's use against other viruses, with a net loss of $5.0 million for the nine months Drug Pipeline and Strategy - The lead clinical-stage drug, NV-CoV-2 for COVID-19, is poised to enter Phase 1a/1b trials in India[66][75] - The company is exploring additional applications for NV-387, the active ingredient in NV-CoV-2, against other viruses like RSV and mpox[68][85][92] - The company's platform technology develops drugs resistant to viral mutation by mimicking human cellular receptors[108][109] - NanoViricides possesses its own cGM-compliant manufacturing facility, providing a competitive advantage for rapid and cost-effective production of clinical trial materials[103][104] Recent Developments and Financial Status - During the quarter, the company completed cGM-compliant manufacturing of NV-387 and NV-CoV-2 Oral Syrup and Gummies for clinical trials in India[124] - Subsequent to the quarter, drug products were shipped to partner Karveer in India on April 12, 2023, with clinical trials expected to commence shortly[125] - As of March 31, 2023, the company held $9.7 million in cash and cash equivalents, deemed sufficient to fund operations for over twelve months and initial human clinical trials for NV-CoV-2[128][129] Results of Operations Analysis | Expense Category | Nine Months Ended Mar 31, 2023 | Nine Months Ended Mar 31, 2022 | Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Research & Development | $3,479,463 | $4,613,302 | ($1,133,839) | Decrease in external lab expenses and a prior-year milestone payment | | General & Administrative | $1,787,632 | $1,707,514 | $80,118 | Increase in professional fees | - The net loss for the nine months ended March 31, 2023, was $5.02 million (or $0.43 per share), a decrease from $6.33 million (or $0.55 per share) in the prior year period[182] Quantitative and Qualitative Disclosures About Market Risk The company's market risk exposure is primarily limited to non-material interest rate fluctuations on cash equivalents, with no foreign currency or derivative instrument exposure - The company's market risk exposure is primarily limited to non-material interest rate risk on its cash equivalents[188] Controls and Procedures Management concluded that disclosure controls and procedures were ineffective as of March 31, 2023, due to a material weakness in internal control over financial reporting, with a remediation plan in place - Disclosure controls and procedures were deemed ineffective as of March 31, 2023, due to a material weakness in internal control over financial reporting[190] - The material weakness arises from insufficient timely review of the period-end closing process and inadequate personnel and resources[190] - A remediation plan, including a financial reporting controls committee, is in place to enhance oversight and ensure financial reporting reliability[192] PART II OTHER INFORMATION Legal Proceedings The company reports no pending or threatened legal proceedings expected to materially adversely affect its business, financial condition, or results of operations - As of the filing date, there are no legal proceedings against the company, nor is the company aware of any threatened actions[197] Unregistered Sales of Equity Securities and Use of Proceeds This section details the issuance of unregistered equity securities, including Series A preferred stock, common stock, and warrants, as compensation to various parties under Section 4(a)(2) exemptions - Issued Series A preferred stock and common stock for employee, director, and consulting services[198][199][201][202] - Granted fully vested warrants to the Scientific Advisory Board to purchase common stock shares[200] - All securities were issued without registration under the Securities Act, relying on Section 4(a)(2) exemptions, and are considered restricted[203] Defaults Upon Senior Securities No defaults upon senior securities were reported during the period - The company reported no defaults upon senior securities[204] Mine Safety Disclosures This item is not applicable to the company's operations - This disclosure item is not applicable[205] Other Information No other material information was reported - The company reported no other information[206] Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - Exhibits filed include Rule 13(a)-14(a)/15(d)-14(a) and Section 1350 certifications for the CEO and CFO, along with Inline XBRL files[208]