Financial Performance - Total current assets decreased to $16,978,994 as of September 30, 2022, down 56.4% from $38,837,951 as of December 31, 2021[18]. - Grant revenue for the three months ended September 30, 2022, was $87,586, a 75.2% increase compared to $50,000 for the same period in 2021[20]. - Total operating expenses for the nine months ended September 30, 2022, were $24,599,037, an increase of 13.4% from $21,766,422 in the same period of 2021[20]. - Net loss for the nine months ended September 30, 2022, was $24,396,828, compared to a net loss of $20,988,943 for the same period in 2021, reflecting a 16.5% increase in losses[20]. - Cash and cash equivalents at the end of the period were $13,147,090, a decrease of 61.1% from $33,794,672 at the beginning of the period[22]. - Stockholders' equity decreased to $18,022,526 as of September 30, 2022, down 53.5% from $38,737,059 as of December 31, 2021[18]. - The company reported a net loss per share of $0.29 for the three months ended September 30, 2022, compared to $0.34 for the same period in 2021[20]. - For the nine months ended September 30, 2022, the Company reported a net loss of $24.4 million and negative cash flow from operations of $19.6 million[24]. - As of September 30, 2022, the Company had an accumulated deficit of $89.7 million and cash and cash equivalents of $13.1 million[24]. - The Company sold 104,011 shares of its common stock at an average price of $5.96 per share, resulting in net proceeds of approximately $405,000[24]. Research and Development - The company is focused on the development of inhaled dry powder drugs for pulmonary diseases and is in the clinical research stage with its initial product candidates[23]. - The Company plans to increase research and development activities, leading to higher cash utilization and payroll expenses as it hires additional staff[26]. - The Company recorded a research and development tax incentive receivable of $949,168 as of September 30, 2022[43]. - The percentage of eligible research and development expenses reimbursable under the Australian Tax Incentive is 43.5% for the periods ended September 30, 2022 and 2021[42]. - The Company has three product candidates under development: TFF Voriconazole Inhalation Powder, TFF Tacrolimus Inhalation Powder, and TFF Niclosamide Inhalation Powder, with ongoing Phase 2 clinical trials for TFF Voriconazole and TFF Tacrolimus[88]. - The TFF technology platform aims to improve the solubility of poorly water-soluble drugs, which constitute approximately 33% of major pharmaceuticals worldwide[87]. - The company is engaged in a collaboration with UNION therapeutics A/S to develop a dry powder formulation of niclosamide, alongside testing of other dry powder formulations for various applications[89]. - The company plans to focus on developing inhaled dry powder formulations for pulmonary diseases, targeting a market potential ranging from $100 million to over $500 million for several off-patent drugs[90]. - The company has entered into a joint development agreement with Augmenta Bioworks for COVID-19 therapeutics, but further development has been suspended[97]. - The company is exploring dry powder formulations of CBD and aluminum salt vaccines in partnership with pharmaceutical companies[93]. Clinical Trials and Regulatory Challenges - TFF Vori, an inhaled dry powder version of Voriconazole, completed Phase 1 trials in July 2020 and initiated a Phase 2 trial in 2022, with individual patient data expected in Q1 2023[1]. - TFF Tac-Lac, an inhaled dry powder version of tacrolimus, completed Phase 1 trials in September 2021 and began Phase 2 trials in 2022, with data anticipated in H1 2023[1]. - TFF Niclosamide, an inhaled dry powder formulation, completed Phase 1 trials in Q1 2022, but further progress is pending review of results and market opportunities[1]. - COVID-19 has caused delays in Phase 2 clinical trials for TFF Vori and TFF Tac-Lac, highlighting the pandemic's impact on operations[139]. - The company has not submitted an NDA to the FDA or comparable applications to other regulatory authorities for any of its product candidates as of the report date[154]. - The company expects to conduct Phase I and Phase II studies for TFF Vori and Phase I and Phase IIb/IIIa studies for TFF Tac-Lac prior to filing for marketing approval[155]. - The regulatory approval process is expensive and can take many years, with no assurance of success[157]. - The company may face significant delays and costs in obtaining foreign regulatory approvals, which could hinder the introduction of product candidates in certain countries[174]. - The FDA's orphan drug designation could provide potential exclusivity for products intended to treat rare diseases, but there is no guarantee that the designation will be granted[175]. - The company anticipates that third-party payors may limit coverage and reimbursement for new therapeutic products, impacting future revenues[186]. Financial Strategy and Funding - The Company expects to seek additional funding through equity and/or debt securities, and licensing fees for its technology[26]. - The company has entered into an Open Market Sale Agreement with Jefferies LLC to potentially raise up to $35.0 million through the sale of common stock[120]. - The company may face significant restrictions on its operations if it raises additional funds by issuing debt securities[211]. - If the company raises additional capital through equity securities, existing stockholders may experience substantial dilution[211]. - The company has not paid dividends in the past and has no immediate plans to do so, intending to reinvest all earnings to cover operating costs and remain competitive[216]. Risks and Challenges - The business model is heavily reliant on patent rights licensed from the University of Texas at Austin, with potential loss of these rights posing a significant risk to operations[134]. - The company currently lacks a sales and marketing organization, which may hinder the successful commercialization of product candidates[140]. - There is a reliance on third-party manufacturers for product candidates, with potential risks related to regulatory approvals and quality control[142]. - Product liability risks are present due to clinical testing, with potential substantial liabilities affecting commercialization efforts[149]. - The company has insurance coverage for clinical trials but lacks product liability insurance, which may inhibit future commercialization[151]. - Information technology system failures or security breaches could disrupt operations and lead to loss of proprietary information[152]. - The company may face challenges in obtaining adequate market acceptance for its product candidates, which could limit revenue generation[162]. - The company may rely on know-how and trade secrets for technology protection, which are difficult to enforce and protect[199]. - The company could face patent infringement claims from third parties, which may lead to costly litigation and impact its commercialization efforts[201]. - The company's stock price may decline if analysts publish unfavorable research or cease coverage, affecting trading volume[208]. Corporate Structure and Compliance - The company is classified as an "emerging growth company" under the JOBS Act of 2012, which allows it to take advantage of reduced disclosure requirements[212]. - The company will maintain its "emerging growth company" status for up to five years unless revenues exceed $1.07 billion or the market value of its common stock held by non-affiliates exceeds $700 million[214]. - The company is required to provide a report on management's assessment of internal control over financial reporting starting with its annual report for the fiscal year ended December 31, 2020[215]. - There is a risk that the company may not be able to maintain effective internal controls over financial reporting, which could lead to a loss of investor confidence[215]. - The company has chosen to take advantage of all benefits available under the JOBS Act, but this may make its common stock less attractive to some investors[213]. - The company is not required to comply with auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act while it remains an emerging growth company[216].
TFF Pharmaceuticals(TFFP) - 2022 Q3 - Quarterly Report