SEELAS Life Sciences (SLS) - 2023 Q3 - Quarterly Report

PART I - FINANCIAL INFORMATION Financial Statements This section presents the unaudited consolidated financial statements, highlighting a significant decrease in cash and total assets, a shift to a stockholders' deficit, and a net loss of $29.2 million for the nine-month period Unaudited Consolidated Balance Sheets Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $3,969 | $17,125 | | Total current assets | $5,203 | $17,756 | | Total assets | $8,086 | $20,943 | | Liabilities & Equity | | | | Total current liabilities | $11,735 | $15,515 | | Total liabilities | $11,913 | $16,092 | | Total stockholders' (deficit) equity | $(3,827) | $4,851 | Unaudited Consolidated Statements of Operations Operating Results (in thousands, except per share data) | Metric | Q3 2023 | Q3 2022 | 9 Months 2023 | 9 Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Licensing revenue | $0 | $0 | $0 | $1,000 | | Research and development | $5,813 | $4,282 | $18,910 | $14,422 | | General and administrative | $3,548 | $2,864 | $10,782 | $8,982 | | Operating loss | $(9,361) | $(7,146) | $(29,692) | $(32,504) | | Net loss | $(9,267) | $(7,022) | $(29,204) | $(32,180) | | Net loss per share | $(0.33) | $(0.34) | $(1.09) | $(1.70) | Unaudited Consolidated Statements of Stockholders' (Deficit) Equity - Stockholders' equity transitioned to a deficit of $3.8 million as of September 30, 2023, from an equity position of $4.9 million at the end of 2022. This was primarily driven by a net loss of $29.2 million for the nine-month period, partially offset by $18.6 million raised from the issuance of common stock[20] Unaudited Consolidated Statements of Cash Flows Cash Flow Summary for Nine Months Ended Sep 30 (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(26,585) | $(18,657) | | Net cash used in investing activities | $(5,500) | $(4,500) | | Net cash provided by financing activities | $18,929 | $23,150 | | Net decrease in cash | $(13,156) | $(7) | Notes to Consolidated Financial Statements - The company is a late-stage clinical biopharmaceutical firm focused on cancer therapeutics, with lead candidates GPS and SLS009[24] - The company has incurred recurring losses, with an accumulated deficit of $209.1 million as of September 30, 2023. Management has substantial doubt about the company's ability to continue as a going concern, as existing cash is not sufficient to fund operations for the next twelve months[25][32] - In February 2023, the company raised net proceeds of approximately $18.5 million through an underwritten public offering. Subsequently, in October 2023, it raised an additional $4.0 million in gross proceeds from a registered direct offering[26][27] - Under the 3DMed License Agreement, $191.5 million in potential future development, regulatory, and sales milestones remain as of September 30, 2023. These are considered variable and not under the company's control[31][75] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's late-stage clinical candidates, GPS and SLS009, highlighting increased R&D and G&A expenses, and addresses liquidity concerns with insufficient funds for the next twelve months - The Phase 3 REGAL study for GPS is expected to complete enrollment (excluding China) in November 2023, with an interim analysis anticipated by late 2023 or early 2024[98] - The SLS009 program is advancing with a Phase 2a trial in AML and has received FDA Orphan Drug Designation for AML and Fast Track Designation for PTCL[106][110] Change in Operating Expenses (Nine Months Ended Sep 30, 2023 vs 2022, in millions) | Expense Category | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Research and development | $18.9 | $14.4 | +$4.5 | | General and administrative | $10.8 | $9.0 | +$1.8 | | Acquired in-process R&D | $0.0 | $10.0 | -$10.0 | - The company's cash and cash equivalents of $4.0 million as of September 30, 2023, supplemented by a $4.0 million offering in October 2023, are not sufficient to fund planned operations for at least the next twelve months, raising substantial doubt about its ability to continue as a going concern[141] Quantitative and Qualitative Disclosures About Market Risk The company has determined that quantitative and qualitative disclosures about market risk are not applicable for this reporting period - The company has determined that quantitative and qualitative disclosures about market risk are not applicable[153] Controls and Procedures The company's principal officers concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - The Certifying Officers concluded that the company's disclosure controls and procedures were effective as of the end of the period[155] - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls[156] PART II - OTHER INFORMATION Legal Proceedings The company reports no pending or threatened litigation as of September 30, 2023 - As of September 30, 2023, there was no pending or threatened litigation against the company[56][159] Risk Factors This section refers investors to the comprehensive risk factors detailed in the company's 2022 Annual Report on Form 10-K - The company refers readers to the risk factors discussed in its 2022 Annual Report on Form 10-K[161] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or use of proceeds from such sales during the period - None reported for the period[162] Other Information The company did not report any other information required to be disclosed under this item for the period - None reported for the period[165] Exhibits This section lists all exhibits filed with the Form 10-Q, including corporate governance documents and required officer certifications - The filing includes certifications from the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act[166][167]