What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-08-11 compared with 2023-05-12 · 64 added, 29 removed, 199 unchanged (32% of the section changed)

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You should review the disclosure under the heading “Risk Factors” in this Quarterly Report on Form 10-Q for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements.

Acurx Pharmaceuticals, Inc., (the “Company”), a Delaware corporation, formerly Acurx Pharmaceuticals, LLC (the “Company”) is a clinical stage biopharmaceutical company developing a new class of antibiotics for infections caused by bacteria listed as priority pathogens by the World Health Organization (“WHO”), the U.S.

Acurx Pharmaceuticals, Inc., a Delaware corporation, formerly Acurx Pharmaceuticals, LLC (the “Company”) is a clinical stage biopharmaceutical company developing a new class of antibiotics for infections caused by bacteria listed as priority pathogens by the World Health Organization (“WHO”), the U.S.

Centers for Disease Control and Prevention (“CDC”) and the U.S.

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Protocol Amendment, Referring Physician Program and Trial Site Expansion

On March 16, 2023, the Company announced that based on the blinded observed data from the ongoing Phase 2b clinical trial to date, in January 2023, the Company filed a protocol amendment to its Investigational New Drug Application with the U.S.

Food and Drug Administration (“FDA”) to allow for an Independent Data Monitoring Committee (“IDMC”) to review interim clinical data.

The FDA accepted the Company’s protocol amendment in March 2023 which will allow the IDMC to review the clinical data upon enrollment of 36 patients in the Phase 2b clinical trial.

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The Company intends to report available data promptly after the IDMC conducts this interim review.

The Company assembled its IDMC during this first quarter of 2023 for this purpose.

The Company assembled its IDMC during the first quarter of 2023 for this purpose.

In July 2022, we launched an innovative patient enrollment acceleration program (“Referring Physician Program”) to optimize patient enrollment in our ongoing Phase 2b clinical trial of ibezapolstat in patients with CDI.

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2023 Registered Direct Offering

On May 16, 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with a single healthcare-focused U.S.

institutional investor named therein (the “2023 Investor”), pursuant to which the Company issued and sold, in a registered direct offering by the Company directly to the 2023 Investor (the “2023 Registered Offering”), an aggregate of 601,851 shares of common stock at an offering price of $3.00 per share and an aggregate of 731,482 pre-funded warrants exercisable for shares of common stock at an offering price of $2.9999 per pre-funded warrant.

The pre-funded warrants sold to the 2023 Investor have an exercise price of $0.0001 and were immediately exercisable.

As of June 30, 2023, all of the pre-funded warrants were exercised.

The gross proceeds to the Company from the registered direct offering were approximately $4.0 million and net proceeds after deducting the placements agent’s fees and other offering expenses payable by the Company were approximately $3.5 million.

The securities were offered by the Company pursuant to a registration statement on Form S-3 (File No.

333-265956) previously filed with the SEC on July 1, 2022, and which was declared effective by the SEC on July 11, 2022.

In a concurrent private placement (the “2023 Private Placement” and together with the 2023 Registered Offering, the “2023 Offerings”), the Company issued to the Investor series C warrants exercisable for an aggregate of 1,333,333 shares of Common Stock at an exercise price of $3.26 per share and series D warrants exercisable for an aggregate of 1,333,333 shares of common stock at an exercise price of $3.26 per share.

Each Series C Warrant will be exercisable commencing on November 18, 2023 and will expire on November 18, 2025.

Each Series D Warrant will be exercisable commencing on November 18, 2023 and will expire on November 19, 2029.

The 2023 Offerings closed on May 18, 2023.

In connection with the 2023 Offerings, the Company also entered into a Warrant Amendment Agreement with the 2023 Investor.

Under the Warrant Amendment Agreement, the Company amended its existing series A warrants to purchase up to an aggregate of 1,230,769 shares of the Company's common stock and series B warrants to purchase up to an aggregate of 1,230,769 shares of the Company's common stock (collectively, the “Existing Warrants”) that were previously issued in July 2022, such that effective upon the closing of the offering, the amended Existing Warrants will have a termination date of May 18, 2029.

On May 16, 2023, the Company entered into a placement agency agreement (the “2023 Placement Agent Agreement”) with Maxim Group LLC (the “Placement Agent”) pursuant to which the Company engaged Maxim as the placement agent in connection with the 2023 Offerings.

The Placement Agent agreed to use its reasonable best efforts to arrange for the sale of the Securities.

The Company paid the Placement Agent a placement agent fee in cash equal to 5.75% of the gross proceeds from the sale of the Shares, Warrants and Pre-Funded Warrants.

The Company also reimbursed the Placement Agent for all reasonable travel and other out-of-pocket expenses, including the reasonable fees of legal counsel not to exceed $50,000.

The 2023 Placement Agent Agreement also contains representations, warranties, indemnification and other provisions customary for transactions of this nature.

2022 Registered Direct Offering

On July 25, 2022, we entered into securities purchase agreements (the “Purchase Agreements”) with David P.

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Sailer, a member of our board of directors (collectively, the “Affiliate Investors”), and a single U.S.

institutional investor (the “Investor”) pursuant to which we issued and sold in a registered direct offering an aggregate of 1,159,211 shares of our common stock, par value $0.001 per share and pre-funded warrants to purchase an aggregate of 130,769 shares of our common stock.

institutional investor (the “Investor”) pursuant to which we issued and sold in a registered direct offering an aggregate of 1,159,211 shares of our common stock and pre-funded warrants to purchase an aggregate of 130,769 shares of our common stock.

The Affiliate Investors purchased an aggregate of 59,211 shares of common stock at a purchase price of $3.80 per share.

The Investor purchased an aggregate of 1,100,000 shares of common stock at a purchase price of $3.25 per share and an aggregate of 130,769 pre-funded warrants at a purchase price of $3.2499 per pre-funded warrant.

The pre-funded warrants sold to the Investor have an exercise price of $0.0001, were immediately exercisable and may be exercised at any time until fully exercised.

As of March 31, 2023, all of the pre-funded warrants were exercised.

funded warrants sold to the Investor have an exercise price of $0.0001, were immediately exercisable and may be exercised at any time until fully exercised.

As of June 30, 2023, all of the pre-funded warrants were exercised.

The gross proceeds to us from the registered direct offering were $4.2 million and net proceeds after deducting the placement agents’ fees and other offering expenses payable by us were approximately $3.7 million.

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Additionally, we issued an aggregate of 1,230,769 series A warrants and an aggregate of 1,230,769 series B warrants to the Investor with an exercise price per share of $3.25.

The series A warrants were exercisable commencing on January 27, 2023 and will expire on January 27, 2028.

The series B warrants were exercisable commencing on January 27, 2023 and will expire on January 27, 2024.

The series A warrants were exercisable commencing on January 27, 2023 and will expire on May 18, 2029.

The series B warrants were exercisable commencing on January 27, 2023 and will expire on May 18, 2029.

The registered direct offering and concurrent private placement closed on July 27, 2022.

On July 25, 2022, we entered into a co-placement agent agreement (the “Placement Agent Agreement”), with A.G.P./Alliance Global Partners (“AGP”) and Maxim Group LLC (“Maxim”, and together with AGP, the “Placement Agents”) in connection with the registered direct offering pursuant to which we paid the Placement Agents a cash fee of $287,874 and issued to the Placement Agents an aggregate of 63,018 warrants to purchase shares of common stock (which is 5% of the aggregate number of shares of common stock and pre-funded warrants sold in the registered direct offering to the Investor and 2.5% of the aggregate number of shares of common stock sold to the Affiliate Investors).

The warrants have an exercise price of $3.60 per share (representing 110% of the weighted average public offering price of the aggregate number of shares of common stock sold in the

registered direct offering to the Investor and Affiliate Investors), are exercisable beginning January 27, 2023, and will expire on July 27, 2027.

The warrants have an exercise price of $3.60 per share (representing 110% of the weighted average public offering price of the aggregate number of shares of common stock sold in the registered direct offering to the Investor and Affiliate Investors), are exercisable beginning January 27, 2023, and will expire on July 27, 2027.

Initial Public Offering

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Clinical and preclinical development timelines, the probability of success and the amount of development costs can differ materially from expectations.

We anticipate that we will make determinations as to which product candidates and development programs to pursue and how much funding to direct to each product candidate or program on an ongoing basis in response to the results of ongoing and future preclinical studies and clinical trials, regulatory developments and our ongoing assessments as to each product candidate’s commercial potential.

We anticipate that we will make determinations as to which product candidates and development programs to pursue and how much funding to direct to each product candidate or

program on an ongoing basis in response to the results of ongoing and future preclinical studies and clinical trials, regulatory developments and our ongoing assessments as to each product candidate’s commercial potential.

In addition, we cannot forecast which product candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

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Results of Operations

Three Months Ended March 31, 2023 Compared to the Three Months Ended March 31, 2022

The following table presents a summary of the changes in our results of operations for the three months ended March 31, 2023 compared with the three months ended March 31, 2022:

Three Months Ended June 30, 2023 Compared to the Three Months Ended June 30, 2022

The following table presents a summary of the changes in our results of operations for the three months ended June 30, 2023 compared with the three months ended June 30, 2022:

Three Months Ended

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Research and Development Expenses

Research and development expenses were $1.0 million for the three months ended March 31, 2023 and $0.8 million for the three months ended March 31, 2022, an increase of $0.2 million due to Phase 2b clinical trial related costs and increased consulting costs.

Research and development expenses were $1.7 million for the three months ended June 30, 2023 and $0.9 million for the three months ended June 30, 2022, an increase of $0.8 million due to Phase 2b clinical trial related costs and increased consulting costs.

General and Administrative Expenses

General and administrative expenses were $1.9 million for the three months ended March 31, 2023 and $1.9 million for the three months ended March 31, 2022.

Net loss was $2.9 million for the three months ended March 31, 2023, and $2.7 million for the three months ended March 31, 2022, an increase of $0.2 million, due to the reasons stated above.

General and administrative expenses were $1.7 million for the three months ended June 30, 2023 and $1.7 million for the three months ended June 30, 2022.

The decrease of $0.1 million in professional fees was offset by the increase of $0.1 million in employee related compensation expenses.

Net loss was $3.4 million for the three months ended June 30, 2023, and $2.6 million for the three months ended June 30, 2022, an increase of $0.8 million, due to the reasons stated above.

Six Months Ended June 30, 2023 Compared to the Six Months Ended June 30, 2022

The following table presents a summary of the changes in our results of operations for the six months ended June 30, 2023 compared with the six months ended June 30, 2022:

Six Months Ended

(in thousands)

OPERATING EXPENSES:

Research and Development

General and Administrative

TOTAL OPERATING EXPENSES

Research and Development Expenses

Research and development expenses were $2.8 million for the six months ended June 30, 2023 and $1.7 million for the six months ended June 30, 2022, an increase of $1.1 million due to Phase 2b clinical trial related costs and increased consulting costs.

General and Administrative Expenses

General and administrative expenses were $3.6 million for the six months ended June 30, 2023 and $3.6 million for the six months ended June 30, 2022.

The decrease of $0.2 million in professional fees was offset by the increase of $0.2 million in employee related compensation expenses.

Net loss was $6.3 million for the six months ended June 30, 2023, and $5.3 million for the six months ended June 30, 2022, an increase of $1.0 million, due to the reasons stated above.

Liquidity and Capital Resources

Since inception, we have generated no revenue from operations and we have incurred cumulative losses of approximately $41.5 million as of March 31, 2023.

Since inception, we have generated no revenue from operations and we have incurred cumulative losses of approximately $44.9 million as of June 30, 2023.

We have funded our operations primarily from equity issuances.

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On July 27, 2022, we completed a registered direct offering and concurrent private placement resulting in net proceeds of approximately $3.7 million after deducting placement agents fees of $0.3 million and offering costs of $0.2 million.

On May 18, 2023, we completed a registered direct offering and a concurrent private placement resulting in net proceeds of approximately $3.5 million after deducting placement agents fee of $0.2 million and offering costs of $0.2 million.

Based upon our lack of revenue expected for the foreseeable future, and because of numerous risks and uncertainties associated with the research, development and future commercialization of our product candidates, we are unable to estimate with certainty the amounts of increased capital outlays and operating expenditures associated with our anticipated clinical trials and development activities.

As of March 31, 2023, we had working capital of $5.3 million, consisting primarily of $7.2 million of cash and $0.2 million of prepaid expenses, offset by $2.1 million of accounts payable and accrued expenses.

As of June 30, 2023, we had working capital of $6.2 million, consisting primarily of $9.1 million of cash and $0.1 million of prepaid expenses, offset by $3.0 million of accounts payable and accrued expenses.

The following table sets forth selected cash flow information for the periods indicated:

For the three months ended

For the six months ended

(in thousands)

Net cash used in:

Net cash (used in)/provided by:

Operating activities

Net decrease in cash

Financing activities

Net increase/(decrease) in cash

Net Cash Used in Operating Activities

Net cash used in operating activities was $1.9 million for the three months ended March 31, 2023.

The net loss was greater than the net cash used in operating activities by $1.0 million, primarily attributable to share-based compensation and share-based vendor payments of $0.9 million.

Net cash used in operating activities was $1.9 million for the three months ended March 31, 2022.

Net cash used in operating activities was $3.5 million for the six months ended June 30, 2023.

The net loss was greater than the net cash used in operating activities by $2.8 million, primarily attributable to share-based compensation and share-based vendor payments of $1.7 and increase in accounts payable and accrued expenses of $0.9 million and decrease in prepaid expenses of $0.2 million.

Net cash used in operating activities was $3.9 million for the six months ended June 30, 2022.

The net loss was greater than the net cash used in operating activities by $1.4 million, primarily attributable to share-based compensation and share-based vendor payments of $1.7 million, offset by a decrease in accrued expenses of $0.4 million.

Net Cash Provided by Financing Activities

There was no cash provided from financing activities for the three months ended March 31, 2023 and 2022, respectively.

Net cash provided from financing activities was $3.5 million for the six months ended June 30, 2023, which was attributable to the net proceeds from the registered direct offering.

There was no cash provided from financing activities for the six months ended June 30, 2022.

Critical Accounting Policies and Estimates

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On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses and stock-based compensation.

We base our estimates on historical experience, known trends and events, and various other factors that we believe to be reasonable under the circumstances, the

results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

We base our estimates on historical experience, known trends and events, and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Our actual results may differ from these estimates under different assumptions or conditions.

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Recent Accounting Pronouncements

The Financial Accounting Standards Board has issued certain accounting pronouncements as of March 31, 2023 that will become effective in subsequent periods;

The Financial Accounting Standards Board has issued certain accounting pronouncements as of June 30, 2023 that will become effective in subsequent periods;

however, we do not believe that any of those pronouncements would have significantly affected our financial accounting measurements or disclosures had they been in effect, or that they will have a significant impact on us at the time they become effective.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis