What changed in this filing

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Item 1. Financial Statements

2023-08-10 compared with 2023-05-11 · 91 added, 52 removed, 290 unchanged (33% of the section changed)

10 unchanged sentences

Stockholders’ Equity:

Common Stock, par value $ 0.0001 , 250,000,000 shares authorized, and 2,388,157 shares issued and outstanding as of March 31, 2023;

Common Stock, par value $ 0.0001 , 250,000,000 shares authorized, and 3,189,034 shares issued and outstanding as of June 30, 2023;

and 250,000,000 shares authorized, and 770,115 shares issued and outstanding as of December 31, 2022, respectively.

9 unchanged sentences

For the three months ended

For the six months ended June 30,

Operating expenses:

5 unchanged sentences

( 2,730,573 )

( 4,010,096 )

( 5,516,725 )

Other income and expenses:

2 unchanged sentences

$ ( 2,730,573 )

$ ( 3,941,506 )

$ ( 5,516,725 )

Net loss per share of common stock, basic and diluted

2 unchanged sentences

DERMATA THERAPEUTICS, INC.

Statements of Stockholder’s Equity

Statements of Stockholders Equity

Stockholders’

9 unchanged sentences

$ ( 47,833,330 )

Stock-based compensation

Issuance of Common Stock and warrants, net of issuance costs

Issuance of Common Stock upon exercise of pre-funded warrants

( 1,701,364 )

Balance at June 30, 2023

$ ( 49,534,694 )

The accompanying notes are an integral part of these financial statements.

DERMATA THERAPEUTICS, INC.

Statements of Stockholder’s Equity

Statements of Stockholders Equity

Stockholders’

6 unchanged sentences

$ ( 38,768,426 )

Issuance of Common Stock and warrants, net of issuance costs

Issuance of Common Stock upon exercise of pre-funded warrants

Issuance of restricted stock unit awards

Stock-based compensation

( 2,730,573 )

Balance at June 30, 2022

$ ( 41,498,999 )

The accompanying notes are an integral part of these financial statements.

1 unchanged sentence

Statements of Cash Flows

For the three months ended

For the six months ended

Cash flows from operating activities:

17 unchanged sentences

Net increase (decrease) in Cash and cash equivalents

( 2,607,848 )

Cash and cash equivalents at beginning of period

6 unchanged sentences

On March 24, 2021, the Company converted from an LLC to a Delaware C-corporation and changed its name to Dermata Therapeutics, Inc.

Any references in these Notes to Financial Statements to equity securities as “units” refer to pre-conversion equity securities and any references to “shares” or “stock” in these Notes to Financial Statements refer to post-conversion equity securities.

The Company is a clinical-stage biotechnology company focused on the treatment of medical and aesthetic skin conditions and diseases.

3 unchanged sentences

The Company received net cash proceeds of approximately $ 15.4 million from the IPO after deducting underwriters’ discounts and offering expenses of approximately $ 2.6 million.

The Company’s shares of Common Stock and warrants are listed on the Nasdaq Stock Market LLC under the symbols “DRMA,” and “DRMAW,” respectively, and both began trading in August 2021.

The Company’s shares of Common Stock and warrants are listed on the Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “DRMA,” and “DRMAW,” respectively, and both began trading in August 2021.

Reverse Stock Split

4 unchanged sentences

Since its inception, the Company has devoted substantially all of its resources to research and development activities and has not generated any revenue or commercialized any product candidates.

As of March 31, 2023, cash and cash equivalents totaled $ 8.8 million and the Company had an accumulated deficit of $ 47.8 million.

For the three months ended March 31, 2023, and the year ended December 31, 2022, the Company used cash of $ 1.6 million and $ 8.8 million, respectively, in operations.

During March 2023, the Company raised $ 5.0 million in gross proceeds from an at-the-market public offering of Common Stock and warrants.

The Company’s cash balances are expected to fund operations into the first quarter of 2024.

As of June 30, 2023, cash and cash equivalents totaled $ 8.4 million and the Company had an accumulated deficit of $ 49.5 million.

For the six months ended June 30, 2023, and the year ended December 31, 2022, the Company used cash of $ 3.5 million and $ 8.8 million, respectively, in operations.

During May 2023, the Company raised $ 1.8 million in gross proceeds from a private placement of Common Stock and warrants.

The Company’s cash and cash equivalents are expected to fund operations into the second quarter of 2024.

The Company anticipates that it will continue to incur net losses for the foreseeable future.

11 unchanged sentences

The Company’s ability to raise additional capital may be adversely impacted by potential worsening of global economic conditions, potential future global pandemics or health crises, and the recent disruptions to, and volatility in, the credit and financial markets in the United States.

The Company has raised additional capital through the initial public offering of its Common Stock and warrants, as well as a private placement financing in April 2022 and an at-the-market public offering in March 2023;

The Company has raised additional capital through the initial public offering of its Common Stock and warrants, as well as a private placement financing in April 2022, an at-the-market public offering in March 2023, and an at-the-market private placement in May 2023;

however, prior completed financings do not alleviate substantial doubt about the Company’s ability to continue as a going concern.

19 unchanged sentences

Cash and Cash Equivalents

The Company deposits its cash with reputable financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”).

This cash is held in checking and cash sweep accounts.

The Company deposits its cash and cash equivalents with reputable financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”), which are held in checking and cash sweep accounts.

At times, deposits held may exceed the amount of insurance provided by the FDIC.

8 unchanged sentences

Interest Income

Interest income consists of interest income earned on cash equivalents from interest bearing demand accounts.

Interest income consists of interest income earned on cash and cash equivalents from interest bearing demand accounts.

Patent costs related to obtaining and maintaining patent protection in both the United States and other countries are expensed as incurred.

18 unchanged sentences

Stock-Based Compensation

In March 2021, the Company’s board of directors and shareholders approved the 2021 Omnibus Equity Incentive Plan (“the 2021 Plan”).

In March 2021, the Company’s board of directors and shareholders approved the Dermata Therapeutics, Inc.

2021 Omnibus Equity Incentive Plan (the “2021 Plan”).

For stock options granted under the 2021 Plan, the Company measures and recognizes compensation expense for all stock-based awards made to employees, directors, and non-employees, based on estimated fair values recognized using the straight-line method over the requisite service period.

6 unchanged sentences

Comprehensive loss includes net loss and other comprehensive income (loss) for the periods presented.

The Company did not have other comprehensive income (loss) items such as unrealized gains and losses and so for the three months ended March 31, 2023, and 2022, comprehensive loss was equal to the net loss.

The Company did not have other comprehensive income (loss) items such as unrealized gains and losses and so for the three and six months ended June 30, 2023, and 2022, comprehensive loss was equal to the net loss.

Net Loss Per Common Share

4 unchanged sentences

Three Months Ended

Six Months Ended

$ ( 1,701,364 )

$ ( 2,730,573 )

Basic and diluted net loss per common share

$ ( 3,941,506 )

$ ( 5,516,725 )

Weighted-average basic and diluted common shares

Basic and diluted net loss per common share

The common share equivalents that are not included in the calculation of diluted net loss per common share but could potentially dilute basic earnings per share in the future are as follows:

As of March 31,

As of June 30,

Common Stock options

2 unchanged sentences

Recent Accounting Pronouncements

For the three months ended March 31, 2023, the Company has reviewed recent accounting standards and does not expect the future adoption of recently issued accounting pronouncements to have a material impact on the Company's financial position and results of operations.

For the six months ended June 30, 2023, the Company has reviewed recent accounting standards and does not expect the future adoption of recently issued accounting pronouncements to have a material impact on the Company's financial position and results of operations.

Balance Sheet Details

13 unchanged sentences

Equity Securities

On March 20, 2023, the Company closed a public offering (the “2023 Offering”) priced at the market under Nasdaq rules, in which it sold an aggregate of (i) 85,000 shares of Common Stock, (ii) pre-funded warrants (the “2023 Pre-Funded Warrants”) to purchase up to an aggregate of 1,533,123 shares of Common Stock with an exercise price of $ 0.0001 per share, (iii) Series A warrants (the “Series A Common Warrants”) to purchase up to an aggregate of 1,618,123 shares of Common Stock, and (iv) Series B warrants (the “Series B Common Warrants” and collectively with the Series A Warrants, the “2023 Offering Warrants”) to purchase up to an aggregate of 1,618,123 shares of Common Stock.

The 2023 Offering Warrants have an exercise price of $ 2.82 per share.

The 2023 Pre-Funded Warrants were fully exercised by March 31, 2023, adding 1,533,123 common shares.

No 2023 Pre-Funded Warrants were outstanding as of March 31, 2023.

On April 25, 2022, the Company closed a private placement (“PIPE”), in which it sold 56,161 shares of its Common Stock together with 179,687 pre-funded warrants to purchase up to an aggregate of 179,687 shares of Common Stock with an exercise price of $ 0.0001 per share (“Pre-funded Warrant”), and 235,849 warrants to purchase up to an aggregate of 235,849 shares of Common Stock with an exercise price of $ 21.20 per share (“PIPE Common Warrant”) at a combined offering price of $ 21.20 .

The PIPE Common Warrants related to the private placement were to expire on May 12, 2027.

On May 26, 2023, the Company closed a private placement (the “2023 PIPE”) priced at the market under Nasdaq rules, in which it sold 458,555 shares of its Common Stock together with 342,322 pre-funded warrants to purchase up to an aggregate of 342,322 shares of Common Stock with an exercise price of $ 0.0001 per share (the “May 2023 Pre-Funded Warrants”), and 800,877 warrants to purchase up to an aggregate of 800,877 shares of Common Stock with an exercise price of $ 2.16 per share (the “May 2023 PIPE Common Warrants”) at a combined offering price of $ 2.285 .

The May 2023 PIPE Common Warrants expire on November 27, 2028 .

The Company received net cash proceeds of approximately $ 1.5 million from the 2023 PIPE after deducting underwriters’ discounts and offering expenses of approximately $ 0.3 million.

The PIPE Pre-funded Warrants were exercised fully during 2022, and no Pre-Funded Warrants were outstanding as of December 31, 2022, or March 31, 2023, related to the 2022 PIPE.

In connection with the March 2023 Offering, the Company agreed to amend the terms of the PIPE Common Warrants, which are held by the purchaser in the 2023 Offering.

The exercise price of the PIPE Common Warrant was reduced from $21.20 to $2.82 per share upon closing of the 2023 Offering.

The original expiration date of the PIPE Common Warrant was May 12, 2027, which was extended to five years after the closing of the 2023 Offering, or March 20, 2028.

The modification of the PIPE Common Warrants resulted in an increase in additional paid-in capital since the warrants are equity classified before and after the modification in connection with the March 2023 Offering.

The May 2023 Pre-Funded Warrants were exercised by June 30, 2023, and no May 2023 Pre-Funded Warrants were outstanding as of June 30, 2023.

On March 20, 2023, the Company closed a public offering (the “March 2023 Offering”) priced at the market under Nasdaq rules, in which it sold an aggregate of (i) 85,000 shares of Common Stock, (ii) pre-funded warrants (the “March 2023 Pre-Funded Warrants”) to purchase up to an aggregate of 1,533,123 shares of Common Stock with an exercise price of $ 0.0001 per share, (iii) Series A warrants (the “Series A Common Warrants”) to purchase up to an aggregate of 1,618,123 shares of Common Stock, and (iv) Series B warrants (the “Series B Common Warrants” and collectively with the Series A Warrants, the “2023 Offering Warrants”) to purchase up to an aggregate of 1,618,123 shares of Common Stock.

The March 2023 Offering Warrants have an exercise price of $2.82 per share.

The Company received net cash proceeds of approximately $ 4.2 million after deducting underwriters’ discounts and offering expenses of approximately $ 0.8 million.

The March 2023 Pre-Funded Warrants were fully exercised by March 31, 2023, adding 1,533,123 shares to Common Stock outstanding.

No March 2023 Pre-Funded Warrants were outstanding as of June 30, 2023.

On April 25, 2022, the Company closed a private placement (the “April 2022 PIPE”), in which it sold 56,161 shares of its Common Stock together with 179,687 pre-funded warrants to purchase up to an aggregate of 179,687 shares of Common Stock with an exercise price of $ 0.0001 per share (the “April 2022 PIPE Pre-Funded Warrants”), and 235,849 warrants to purchase up to an aggregate of 235,849 shares of Common Stock with an exercise price of $ 21.20 per share (the “April 2022 PIPE Common Warrants”) at a combined offering price of $ 21.20 .

The April 2022 PIPE Common Warrants related to the private placement expire on May 12, 2027.

The Company received net cash proceeds of approximately $ 4.3 million from the April 2022 PIPE after deducting underwriters’ discounts and offering expenses of approximately $ 0.7 million.

The April 2022 PIPE Pre-Funded Warrants were exercised fully during 2022, and no April 2022 PIPE Pre-Funded Warrants were outstanding as of December 31, 2022, or June 30, 2023.

In connection with the March 2023 Offering, the Company agreed to amend the terms of the April 2022 PIPE Common Warrants, which are held by the purchaser in the March 2023 Offering.

The exercise price of the April 2022 PIPE Common Warrants were reduced from $21.20 to $2.82 per share upon closing of the March 2023 Offering .

The original expiration date of the April 2022 PIPE Common Warrants was May 12, 2027, which was extended to five years after the closing of the March 2023 Offering, or March 20, 2028.

The modification of the April 2022 PIPE Common Warrants resulted in an increase in additional paid-in capital since the warrants are equity classified before and after the modification in connection with the March 2023 Offering.

Stockholders’ Agreements

On July 11, 2022, the Company filed a Certificate of Amendment (the “Certificate of Amendment”) to the Company’s Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) with the Secretary of State of the State of Delaware to increase the number of authorized shares of the Company’s Common Stock from 90,000,000 shares to 250,000,000 shares.

The increase in the number of authorized shares was approved by the holders of a majority of the outstanding shares of Common Stock of the Company at its annual meeting on July 11, 2022.

On March 13, 2023, the Company filed a Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, with the Secretary of State of the State of Delaware on March 14, 2023, a 1-for-16 reverse stock split of the Company’s issued and outstanding shares of Common Stock.

All issued and outstanding Common Stock shares and per share amounts contained in the financial statements have been retroactively adjusted to reflect this reverse stock split for all periods presented.

On July 11, 2022, the Company filed a Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to increase the number of authorized shares of the Company’s Common Stock from 90,000,000 shares to 250,000,000 shares.

The increase in the number of authorized shares was approved by the holders of a majority of the outstanding shares of Common Stock of the Company at its annual meeting on July 11, 2022.

Preferred Stock

While the Company has 10,000,000 shares of preferred stock authorized with a par value of $ 0.0001 , no shares of preferred stock are outstanding as of March 31, 2023, or December 31, 2022.

While the Company has 10,000,000 shares of preferred stock authorized with a par value of $ 0.0001 , no shares of preferred stock are outstanding as of June 30, 2023, or December 31, 2022.

The Company performs an assessment of warrants upon issuance to determine their proper classification in the financial statements based upon the warrant’s specific terms, in accordance with the authoritative guidance provided in Financial Accounting Standards Board Accounting Standards Codification, or ASC, 480 Distinguishing Liabilities from Equity, and ASC 815, Derivatives and Hedging.

5 unchanged sentences

The Company has performed an assessment of all warrants issued and modified and determined that the Company’s warrants are equity classified.

Common and Pre-Funded Warrants issued with Public Offering

In March 2023, the Company completed the 2023 Public Offering, in which it sold 85,000 shares of its Common Stock together with 1,533,123 2023 Pre-funded Warrants to purchase up to an aggregate of 1,533,123 shares of Common Stock with an exercise price of $0.0001 per share, and 1,618,123 Series A Common Warrants to purchase up to an aggregate of 1,618,123 shares of Common Stock with an exercise price of $ 2.82 per share, and 1,618,123 Series B Common Warrants to purchase up to an aggregate of 1,618,123 shares of Common Stock with an exercise price of $ 2.82 per share, at a combined offering price of $ 3.09 .

Common and Pre-Funded Warrants issued in the 2023 PIPE

In May 2023, the Company completed the 2023 PIPE, in which it sold 458,555 shares of its Common Stock together with 342,322 May 2023 Pre-Funded Warrants to purchase up to an aggregate of 342,322 shares of Common Stock with an exercise price of $ 0.0001 per share, and 800,877 May 2023 PIPE Common Warrants to purchase up to an aggregate of 800,877 shares of Common Stock with an exercise price of $ 2.16 per share, at a combined offering price of $ 2.285 .

Each May 2023 Common Warrant is immediately exercisable at the option of the holder and expires November 27, 2028 .

In connection with the 2023 PIPE, the Company issued Placement Agent Warrants to purchase up to 56,061 shares of Common Stock at an exercise price equal to $2.8563 per share (the “May 2023 PIPE Placement Agent Warrants”).

The May 2023 PIPE Placement Agent Warrants are exercisable immediately upon issuance and expire on May 23, 2028 .

During the quarter ended June 30, 2023, all 342,322 of the May 2023 Pre-Funded Warrants were exercised.

No additional May 2023 Pre-Funded Warrants are outstanding as of June 30, 2023.

Common and Pre-Funded Warrants issued with March 2023 Offering

In March 2023, the Company completed the March 2023 Offering, in which it sold 85,000 shares of its Common Stock together with 1,533,123 2023 Pre-Funded Warrants to purchase up to an aggregate of 1,533,123 shares of Common Stock with an exercise price of $ 0.0001 per share, and 1,618,123 Series A Common Warrants to purchase up to an aggregate of 1,618,123 shares of Common Stock with an exercise price of $ 2.82 per share, and 1,618,123 Series B Common Warrants to purchase up to an aggregate of 1,618,123 shares of Common Stock with an exercise price of $ 2.82 per share, at a combined offering price of $ 3.09 .

Each Series A Common Warrant is immediately exercisable at the option of the holder and expires March 20, 2028.

Each Series B Common Warrant is immediately exercisable at the option of the holder and expires July 20, 2025 .

In connection with the 2023 Offering, the Company issued Placement Agent Warrants to purchase up to 113,269 shares of Common Stock at an exercise price equal to $ 3.8625 per share.

The Placement Agent Warrants are exercisable immediately upon issuance and expire on March 16, 2028.

In connection with the March 2023 Offering, the Company issued Placement Agent Warrants to purchase up to 113,269 shares of Common Stock at an exercise price equal to $ 3.8625 per share (the “March 2023 Offering Placement Agent Warrants”).

The March 2023 Offering Placement Agent Warrants are exercisable immediately upon issuance and expire on March 16, 2028.

During the quarter ended March 31, 2023, 1,533,123 of the 2023 Pre-Funded Warrants were exercised.

No additional 2023 Pre-funded Warrants are outstanding as of March 31, 2023.

No additional 2023 Pre-Funded Warrants are outstanding as of June 30, 2023.

Summary of Warrants Outstanding

The table below lists outstanding warrants for the dates presented.

The fair value of the Company’s warrants is $ 1.29 per warrant share, the Company’s closing stock price as of March 31, 2023.

Since the exercise price of the warrants listed are greater than the fair value as of March 31, 2023, the intrinsic value of the warrants is zero.

The aggregate intrinsic value of warrants outstanding as of June 30, 2023 is calculated as the difference between the exercise price of the warrants and the closing market price of the Company's Common Stock on that date, which was $ 1.65 per share.

The intrinsic value of warrants outstanding as of June 30, 2023, was zero due to the warrants' exercise prices above market value.

Quantity of Warrants Outstanding as of

March 31, 2023

June 30, 2023

December 31, 2022

Series 1a Warrants

Class B Common Unit Warrants

Class B Common Warrants

IPO Underwriter Warrants

PIPE Common Warrants

April 2022 PIPE Common Warrants

Series A Common Warrants

Series B Common Warrants

Placement Agent Warrants

March 2023 Offering Placement Agent Warrants

May 2023 PIPE Common Warrants

May 2023 PIPE Placement Agent Warrants

Total warrants outstanding

6 unchanged sentences

Stock awards granted are exercisable over a maximum term of 10 years from the date of grant and generally vest over a period of four years for employees and one year for directors of the Company’s board and consultants .

As of March 31, 2023, there remain an additional 127 shares reserved for issuance under the 2021 Plan.

As of June 30, 2023, there remain an additional 127 shares reserved for issuance under the 2021 Plan.

Fair Value Measurement

22 unchanged sentences

Three Months Ended

Six Months Ended

Grant date fair value

Risk-free interest rate

Risk-free rate

Dividend yield

5 unchanged sentences

Three Months Ended

Six Months Ended

Research and development

6 unchanged sentences

Options cancelled

Balance at March 31, 2023

Options exercisable at March 31, 2023

The aggregate intrinsic value of options exercisable as of March 31, 2023, is calculated as the difference between the exercise price of the underlying options and the closing market price of the Company’s common stock on that date, which was $ 1.29 per share.

The intrinsic value of options outstanding and exercisable as of March 31, 2023, was zero.

As of March 31, 2023, total unrecognized compensation cost related to stock options was approximately $ 1.0 million and the weighted average period over which this cost is expected to be recognized is 2.3 years.

Balance at June 30, 2023

Options exercisable at June 30, 2023

The aggregate intrinsic value of options exercisable as of June 30, 2023, is calculated as the difference between the exercise price of the underlying options and the closing market price of the Company’s Common Stock on that date, which was $ 1.65 per share.

The intrinsic value of options outstanding and exercisable as of June 30, 2023, was zero.

As of June 30, 2023, total unrecognized compensation cost related to stock options was approximately $ 0.8 million and the weighted average period over which this cost is expected to be recognized is 2.1 years.

Commitments and Contingencies

17 unchanged sentences

The Company is not a party to any legal proceedings or aware of any threatened legal proceedings which are expected to have a material adverse effect on its financial condition, results of operations or liquidity.

Subsequent Event

On August 3, 2023, at the Company’s 2023 Annual Meeting, stockholders approved an amendment to the Company’s 2021 Omnibus Equity Incentive Plan to increase the number of shares of Common Stock authorized for issuance by 513,150 shares to 629,069 shares.

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 1. Financial Statements