Hepion Pharmaceuticals(US:HEPA)2024-05-21 21:08Financial Performance - The company reported no revenues for the three months ended March 31, 2024, and 2023, as it does not have any commercial biopharmaceutical products[132]. - The company incurred a net loss of $2.9 million for the three months ended March 31, 2024, compared to a net loss of $13.3 million for the same period in 2023, reflecting an improvement of $10.4 million[132]. - As of March 31, 2024, the company had an accumulated deficit of $227.5 million and expects to continue incurring significant losses for the foreseeable future[136]. Expenses - Research and development expenses decreased to $2.5 million in Q1 2024 from $9.8 million in Q1 2023, a reduction of $7.3 million primarily due to decreased clinical trial costs[133]. - General and administrative expenses decreased to $2.6 million in Q1 2024 from $3.4 million in Q1 2023, a reduction of $0.8 million mainly due to lower salaries and stock-based compensation costs[134]. - Net cash used in operating activities was $3.6 million for Q1 2024, compared to $8.2 million for Q1 2023, indicating improved cash flow management[143]. Working Capital and Financing - The company had working capital of $12.9 million as of March 31, 2024, an increase of $0.7 million from $12.2 million as of December 31, 2023[142]. - The company received $1.8 million in net cash from financing activities for the three months ended March 31, 2024, primarily from warrant exercises[146]. Clinical Trials - The Data and Safety Monitoring Board approved the continuation of the ASCEND-NASH Phase 2b study without modifications, indicating positive progress in clinical trials[126]. Internal Controls and Compliance - The company identified a material weakness in internal controls related to the design and implementation of controls over complex accounting transactions[151]. - A material weakness was also noted regarding the income tax provision and management's review, with insufficient controls over completeness and accuracy[151]. - The company plans to increase personnel to ensure proper segregation of duties in the future[151]. - External consultants are being utilized for non-routine and technical accounting issues as they arise[151]. - The company aims to enhance the review process for complex accounting transactions by improving access to accounting literature and identifying third-party professionals[151]. - Management will evaluate the processes around tax provision and internal control design gaps with third-party assistance[151]. - Enhancements and process improvements will be implemented, including well-defined controls regarding income tax provision and disclosures[151]. - A detailed timeline for the tax provision calculation will be developed to ensure sufficient time is allocated for completion[151]. - The company is committed to remediating identified material weaknesses and improving internal control over financial reporting[148]. - There have been no changes in internal controls over financial reporting that materially affect the reporting during the three months ended March 31, 2024[150]. Strategic Restructuring - The board approved a strategic restructuring plan in December 2023, incurring a one-time restructuring charge of approximately $0.7 million[127].