What changed in this filing

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Item 1. Financial Statements

2023-11-09 compared with 2023-08-10 · 75 added, 52 removed, 329 unchanged (28% of the section changed)

2 unchanged sentences

Balance Sheets

September 30,

Cash and cash equivalents

6 unchanged sentences

Stockholders’ Equity:

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

Common Stock, par value $ 0.0001 , 250,000,000 shares authorized, and 3,189,034 shares issued and outstanding as of September 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,

September 30,

For the nine months ended

September 30,

Operating expenses:

14 unchanged sentences

Net loss per share of common stock, basic and diluted

Weighted-average basic and diluted common shares

Weighted-average basic and diluted shares

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

DERMATA THERAPEUTICS, INC.

Statements of Stockholders Equity

Statements of Stockholder’s Equity

Stockholders’

16 unchanged sentences

$ ( 49,534,694 )

Stock-based compensation

Issuance costs

( 1,719,211 )

Balance at September 30, 2023

$ ( 51,253,905 )

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

DERMATA THERAPEUTICS, INC.

Statements of Stockholders Equity

Statements of Stockholder’s Equity

Stockholders’

14 unchanged sentences

$ ( 41,498,999 )

Issuance of common stock upon exercise of pre-funded warrants

Issuance of restricted stock unit awards

Stock-based compensation

( 2,424,586 )

Balance at September 30, 2022

$ ( 43,923,585 )

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

1 unchanged sentence

Statements of Cash Flows

For the six months ended

For the nine months ended

September 30,

Cash flows from operating activities:

17 unchanged sentences

Net increase (decrease) in Cash and cash equivalents

( 2,731,984 )

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Supplemental disclosure:

Cash paid for taxes

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

11 unchanged sentences

Reverse Stock Split

On March 13, 2023, the Company effected a reverse split of shares of the Company’s Common Stock at a ratio of 1-for-16 pursuant to an amendment to the Company’s certificate of incorporation approved by the Company’s board of directors and stockholders.

On March 13, 2023, the Company effected a reverse stock split of shares of the Company’s Common Stock at a ratio of 1-for-16 pursuant to an amendment to the Company’s certificate of incorporation approved by the Company’s board of directors and stockholders.

The par value was not adjusted as a result of the reverse split.

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.

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

Liquidity and Going Concern Uncertainty

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 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.

As of September 30, 2023, cash and cash equivalents totaled $ 6.6 million and the Company had an accumulated deficit of $ 51.3 million.

For the nine months ended September 30, 2023, and the year ended December 31, 2022, the Company used cash of $ 5.3 million and $ 8.8 million, respectively, in operations.

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

76 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 and six months ended June 30, 2023, and 2022, comprehensive loss was equal to the net loss.

Net Loss Per Common Share

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

Net Loss Per Share of Common Stock

Basic net loss per share is calculated by dividing net loss attributable to common shareholders by the weighted-average number of shares outstanding during the period, contingently issuable restricted stock units for which no future service is required as a condition to the delivery of the underlying Common Stock, and pre-funded warrants because their exercise requires only nominal consideration for the delivery of shares (collectively, “basic shares”), without consideration of common share equivalents.

3 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

$ ( 1,719,211 )

5 unchanged sentences

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 June 30,

As of September 30,

Common Stock options

2 unchanged sentences

Recent Accounting Pronouncements

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.

For the nine months ended September 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

The following provides certain balance sheet details:

September 30,

Prepaid expenses and other current assets:

12 unchanged sentences

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 May 2023 PIPE Common Warrants are set to 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 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.

The May 2023 Pre-Funded Warrants were exercised fully during the second quarter of 2023, and no May 2023 Pre-Funded Warrants were outstanding as of September 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.

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

The March 2023 Pre-Funded Warrants were fully exercised during the first quarter of 2023, and no March 2023 Pre-Funded Warrants were outstanding as of September 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 April 2022 PIPE Common Warrants related to the private placement were to 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.

The April 2022 PIPE Pre-Funded Warrants were fully exercised during 2022, and no April 2022 PIPE Pre-Funded Warrants were outstanding as of December 31, 2022, or September 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 exercise price of the April 2022 PIPE Common Warrants was 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.

6 unchanged sentences

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 June 30, 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 September 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 in the 2023 PIPE

Common and Pre-Funded Warrants issued in the May 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 .

2 unchanged sentences

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.

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

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

Common and Pre-Funded Warrants issued with March 2023 Offering

4 unchanged sentences

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 June 30, 2023.

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

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

Summary of Warrants Outstanding

The table below lists outstanding warrants for the dates presented.

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.

The aggregate intrinsic value of warrants outstanding as of September 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 $ 1.06 per share.

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

Quantity of Warrants Outstanding as of

June 30, 2023

September 30, 2023

December 31, 2022

Series 1a Warrants

Class B Common Warrants

Pre-IPO Series 1a Warrants

Pre-IPO Class B Common Warrants

IPO Underwriter Warrants

April 2022 PIPE Common Warrants

Series A Common Warrants

Series B Common Warrants

March 2023 Series A Common Warrants

March 2023 Series B Common Warrants

March 2023 Offering Placement Agent Warrants

3 unchanged sentences

Equity Incentive Plan

Under the Company’s 2021 Omnibus Equity Incentive Plan (the “2021 Plan”), the Company may grant options to purchase Common Stock, restricted stock awards, performance stock awards, incentive bonus awards, other cash-based awards or directly issue shares of Common Stock to employees, directors, and consultants of the Company.

Under the Company’s 2021 Omnibus Equity Incentive Plan (the “2021 Plan”), as amended, the Company may grant options to purchase shares of Common Stock, restricted stock awards, performance stock awards, incentive bonus awards, other cash-based awards or directly issue shares of Common Stock to employees, directors, and consultants of the Company.

Effective January 1, 2022, an evergreen provision contained in the Company’s 2021 Plan increased the total number of shares of common shares issuable under the 2021 Plan in an amount equal to one percent of the Company’s common shares outstanding as of December 31, 2021.

This evergreen provision resulted in an additional 5,205 common shares issuable pursuant to the 2021 Plan as of January 1, 2022.

This evergreen provision resulted in an additional 7,701 common shares issuable pursuant to the 2021 as of January 1, 2023, increasing the total authorized shares available for issuance under the 2021 Plan to 115,919 as of January 1, 2023.

This evergreen provision resulted in an additional 5,205 and 7,701 shares of Common Stock issuable pursuant to the 2021 Plan as of January 1, 2022, and 2023, respectively.

The total authorized shares available for issuance under the 2021 Plan was 115,919 as of January 1, 2023.

At the Company’s 2023 Annual Meeting of Stockholders held on August 3, 2023, the Company’s stockholders approved an amendment (the “Amendment”) to the Company’s 2021 Plan to increase the number of shares of common stock authorized for issuance thereunder by 513,150 shares to 629,069 shares.

Stock awards may be granted at an exercise price per share of not less than 100% of the fair market value at the date of grant.

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

As of September 30, 2023, there remain 513,277 shares reserved for issuance under the 2021 Plan, as amended.

Fair Value Measurement

22 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Grant date fair value

6 unchanged sentences

The following table summarizes the total stock-based compensation expense related to stock options and RSUs included in the Company’s statements of operations:

Three Months Ended

Six Months Ended

Three Months Ended September 30,

Nine Months Ended

September 30,

Research and development

6 unchanged sentences

Options cancelled

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.

Balance at September 30, 2023

Options exercisable at September 30, 2023

The aggregate intrinsic value of options exercisable as of September 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 $ 1.06 per share.

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

As of September 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 1.8 years.

Commitments and Contingencies

12 unchanged sentences

The imposition of enhanced export controls and economic sanctions on transactions with Russia and Russian entities by the United States, the United Kingdom, and/or the European Union could prevent the Company from performing under this existing contract or any future contract it may enter or may prevent the Company from remitting payment for raw material purchased from the Company’s supplier.

The Company received two shipments of raw material from its supplier during fiscal year 2022 containing additional quantities of Spongilla raw material which will provide the Company with sufficient quantities of Spongilla to initiate and complete two Phase 3 studies in moderate-to-severe acne and support filing a new drug application for DMT310 in acne upon the successful completion of two Phase 3 studies.

The Company has received multiple shipments of raw material from its supplier, containing additional quantities of Spongilla raw material, which will provide the Company with sufficient quantities of Spongilla to initiate and complete two Phase 3 studies in moderate-to-severe acne and support filing a new drug application for DMT310 in acne upon the successful completion of two Phase 3 studies.

Depending on the extent and breadth of new sanctions or export controls that may be imposed against Russia, otherwise or as a result of the impact of the war in Ukraine, it is possible that the Company’s ability to obtain additional supply of the Spongilla raw material used in DMT310 and DMT410 could be negatively impacted, which could adversely affect its business, results of operations, and financial condition.

2 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