Financial Performance - The company reported a net loss of $2,009,000 for the quarter ended March 31, 2024, compared to a net loss of $1,346,000 for the same period in 2023, indicating an increase in loss of 48.9%[8] - The Company recorded a comprehensive loss with no elements of comprehensive gain during the three months ended March 31, 2024[19] - The net loss for the quarter ended March 31, 2024, was $2,009,000, compared to a net loss of $1,346,000 for the same period in 2023, representing an increase of approximately 49%[12] - The Company has not generated any revenue to date and has incurred substantial losses and negative cash flows since inception[15] Assets and Liabilities - Total current assets decreased to $36,670,000 as of March 31, 2024, down from $37,592,000 at December 31, 2023, representing a decline of 2.45%[7] - Cash and cash equivalents decreased to $35,903,000 at the end of the quarter, down from $37,431,000 at the beginning of the year, a decrease of 4.1%[12] - The company’s accumulated deficit increased to $190,750,000 as of March 31, 2024, compared to $188,741,000 at December 31, 2023, an increase of 1.07%[10] - Total liabilities decreased to $1,581,000 as of March 31, 2024, down from $841,000 at December 31, 2023, a decrease of 188.3%[7] - ARCA's total stockholders' equity decreased to $35.125 million as of March 31, 2024, down from $37.020 million as of December 31, 2023[7] Expenses - Research and development expenses were $165,000 for the quarter ended March 31, 2024, down from $390,000 in the same quarter of 2023, reflecting a decrease of 57.4%[8] - General and administrative expenses increased to $2,317,000 for the quarter ended March 31, 2024, compared to $1,406,000 in the prior year, marking an increase of 64.6%[8] - Total share-based compensation expense for Q1 2024 was $114,000, a decrease of 44% from $204,000 in Q1 2023[40] - Rent expense for Q1 2024 was $22,000, down 29% from $31,000 in Q1 2023[36] - For the three months ended March 31, 2024, depreciation and amortization expense was $3,000, a decrease from $4,000 in the same period of 2023[29] Merger and Strategic Alternatives - The company is in the process of a merger with Oruka Therapeutics, which is expected to significantly impact future operations[14] - The merger is intended to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code[14] - The merger agreement signed on April 3, 2024, will result in Oruka stockholders owning approximately 97.62% of the combined company[44] - The merger is subject to conditions including approval by ARCA stockholders and Nasdaq's approval of the initial listing application[44] - The company has incurred significant costs related to evaluating strategic alternatives, including legal and advisory fees[16] Capital and Funding - The Company expects its current cash and cash equivalents to fund operations through the middle of fiscal year 2025[15] - The Company may need to raise additional capital for clinical trials of Gencaro and to fund operations, with no assurance of success[15] - The Company has historically funded operations through issuances of common and preferred stock[15] - ARCA has entered into subscription agreements for PIPE Securities with an aggregate purchase price of approximately $275.0 million, contingent on the Merger Agreement conditions[46] Stock and Options - The weighted average shares outstanding increased to 14,501,143 for the quarter ended March 31, 2024, compared to 14,410,143 for the same quarter in 2023, an increase of 0.63%[8] - The Company has outstanding stock options totaling 645,845 as of March 31, 2024, down from 664,857 in 2023[24] - The weighted average exercise price of options outstanding as of March 31, 2024, was $4.30, with 645,845 options outstanding[41] Management and Compensation - The company appointed Thomas A. Keuer as President and principal executive officer effective April 3, 2024, without additional compensation[48] - The board approved a retention bonus increase for executives Thomas A. Keuer and C. Jeffrey Dekker to $200,000 each[49] - As of March 31, 2024, unpaid retention bonuses totaled $311,000, which increased to $444,000 in April 2024 due to amendments made to the retention bonuses[32] - Dr. Michael Bristow's separation agreement includes a lump sum payment of 12 months of base salary and a cash payment of $25,000[47] Other Obligations - The company has potential obligations of approximately €1.6 million related to a patent agreement for rNAPc2 treatment[37] - The Company has entered into a lease agreement for office facilities with future minimum commitments due under the lease agreement[33] - As of March 31, 2024, the lease liability was $48,000, all of which is current[36] - The Company has no marketable securities as of March 31, 2024, and its cash equivalents consist solely of money market funds[25]
ARCA biopharma(ABIO) - 2024 Q1 - Quarterly Report