What changed in this filing

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Item 1. Financial Statements

2021-11-10 compared with 2021-08-10 · 127 added, 106 removed, 388 unchanged (38% of the section changed)

3 unchanged sentences

Dollars and shares in thousands)

June 30, 2021

September 30, 2021

Current assets

2 unchanged sentences

Other current assets

Total current assets

Non-current assets

1 unchanged sentence

Deferred issuance cost (amortization)

Total non-current assets

Liabilities and Shareholders’ Equity

22 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Operating expenses:

5 unchanged sentences

Amortization expense

Unrealized (loss)/gain on securities

Unrealized gain on securities

Interest income

10 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Cash flows (used in) provided by:

2 unchanged sentences

Amortization of deferred issuance costs

Unrealized loss/(gain) on securities

Stock-based compensation - consultants

Unrealized (gain) on securities

Stock-based compensation - contractors

Stock-based compensation - employees

7 unchanged sentences

Issuance of shares, net of issuance costs

Long-term debt

Proceeds from long-term debt

Debt discount

Capitalized deferred issuance costs

Net cash provided by financing activities

Increase/(decrease) in cash and cash equivalents

Net cash (used in)/provided by financing activities

(Decrease)/increase in cash and cash equivalents

Cash and cash equivalents - Beginning of period

5 unchanged sentences

Condensed Consolidated Statements of Stockholders’ Equity

Three and Six Months Ended June 30, 2021 and 2020

Three and Nine Months Ended September 30, 2021 and 2020

dollars and shares in thousands)

6 unchanged sentences

Stock options issued to employees

Stock options issued to contractors

Exercise of options

Balance at June 30, 2021

Stock options issued to employees

Balance at September 30, 2021

Comprehensive

4 unchanged sentences

Balance at March 31, 2020

Stock options issued to consultants

Stock options issued to employees

Stock options issued to contractors

Issuance of securities

Balance at June 30, 2020

Stock options issued to employees

Stock options issued to contractors

Exercise of options

Balance at September 30, 2020

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

8 unchanged sentences

With the exception of Fennec Pharmaceuticals, Inc., all subsidiaries are inactive.

These unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) that are applicable to a going concern, which contemplates that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business.

During the three and six months ended June 30, 2021, the Company incurred a loss from operations of $ 3,920 and $ 8,843 , respectively.

At June 30, 2021, the Company had an accumulated deficit of $ 170,900 and had experienced negative cash flows from operating activities during the three and six months ended June 30, 2021 in the amounts of $ 4,426 and $ 8,019 , respectively.

These unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S.

GAAP”) that are applicable to a going concern, which contemplates that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business.

During the three and nine months ended September 30, 2021, the Company incurred a loss from operations of $ 4,173 and $ 13,016 , respectively.

At September 30, 2021, the Company had an accumulated deficit of $ 175,059 and had experienced negative cash flows from operating activities during the three and nine months ended September 30, 2021 in the amounts of $ 2,958 and $ 10,977 , respectively.

On May 5, 2020, the Company announced the completion of an underwritten public offering of 4,800 common shares at a public offering price of $ 6.25 per share.

1 unchanged sentence

The approximate total gross proceeds from the offering were $ 34,100 ($ 31,967 net of commissions, fees and issue costs).

On February 1, 2019, the Company’s wholly owned subsidiary Fennec Pharmaceuticals, Inc.

entered into a Loan and Security Agreement (the “Bridge Bank Loan and Security Agreement”) with Bridge Bank, a division of Western Alliance Bank, an Arizona corporation (“Bridge Bank”), pursuant to which Bridge Bank agreed to loan $ 12,500 to Fennec Pharmaceuticals, Inc., to be made available upon New Drug Application (“NDA”) approval of PEDMARK TM by the U.S.

On February 1, 2019, the Company’s wholly owned subsidiary Fennec Pharmaceuticals, Inc, entered into a Loan and Security Agreement (the “Bridge Bank Loan and Security Agreement”) with Bridge Bank, a division of Western Alliance Bank, an Arizona corporation (“Bridge Bank”), pursuant to which Bridge Bank agreed to loan $ 12,500 to Fennec Pharmaceuticals, Inc., to be made available upon New Drug Application (“NDA”) approval of PEDMARK TM by the U.S.

Food and Drug Administration (“FDA”) no later than September 30, 2020.

4 unchanged sentences

Following receipt of the FDA’s Complete Response Letter (“CRL”) in August 2020, which identified deficiencies in the third-party manufacturing facility that manufactures PEDMARK TM on the Company’s behalf, the Company decided to fully amortize the remaining portions of the loan fee and the value of the warrants.

The warrant issued to Bridge Bank remains outstanding notwithstanding termination of the facility.

The warrant issued to Bridge Bank remains outstanding.

On June 24, 2021, the Company announced it had negotiated a second amendment to the Bridge Bank Loan and Security Agreement.

2 unchanged sentences

Term Loan B consists of $ 7,500 to be funded upon NDA approval of PEDMARK TM in the U.S.

Term Loan C consists of $ 7,500 to be funded upon the occurrence the Company achieving consolidated trailing six-month revenues of $ 11 million on or before December 31, 2022.

Term Loan C consists of $ 7,500 to be funded upon the Company achieving consolidated trailing six-month revenues of $ 11 million on or before December 31, 2022.

The interest-only period for the facility has the ability to be extended from 18 months to 24 months from the funding of Term Loan B, provided that Term Loan C is funded, and certain conditions are met.

The Company intends to use the proceeds from the loans to provide working capital for commercial readiness activities prior to NDA approval as well as commercialization activities for PEDMARK, if approved.

Fennec Pharmaceuticals Inc.

1 unchanged sentence

dollars and shares in thousands, except per share information)

The Company believes the funds raised in its May 2020 public offering, along with the funds from the Bridge Bank Loan and Security Agreement, provide sufficient funding for the Company to carry out its planned activities, including NDA resubmission and, if approved, the commencement of commercialization efforts, for at least the next twelve months as it continues its strategic development of PEDMARK TM .

The Company believes the funds raised in its May 2020 public offering, along with the funds from the Bridge Bank Loan and Security Agreement, provide sufficient funding for the Company to carry out its planned activities, including, if PEDMARK TM is approved by the FDA, the commencement of commercialization efforts, for at least the next twelve months as it continues its strategic development of PEDMARK TM .

These financial statements do not reflect the potentially material adjustments in the carrying values of assets and liabilities, the reported expenses, and the balance sheet classifications used, that would be necessary if the going concern assumption were not appropriate.

1 unchanged sentence

Basis of presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with US GAAP and are the responsibility of the Company’s management.

These unaudited interim condensed consolidated financial statements do not include all of the information and notes required by US GAAP for annual financial statements.

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S.

GAAP and are the responsibility of the Company’s management.

These unaudited interim condensed consolidated financial statements do not include all of the information and notes required by U.S.

GAAP for annual financial statements.

Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes filed with the Securities and Exchange Commission (“SEC”) in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

3 unchanged sentences

Use of estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that impact the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the interim condensed consolidated financial statements and the reported amounts of expense during the reporting period.

The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that impact the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the interim condensed consolidated financial statements and the reported amounts of expense during the reporting period.

Actual results could differ from those estimates.

In the opinion of management, these unaudited interim condensed consolidated financial statements include all adjustments, which are normal and recurring in nature, necessary for the fair presentation of the Company’s financial position at June 30, 2021 and to state fairly the results for the periods presented.

The most significant estimates utilized during the three and six months ended June 30, 2021 included estimates necessary to value grants of stock options to employees and various contractors, disclosed in Note 4.

In the opinion of management, these unaudited interim condensed consolidated financial statements include all adjustments, which are normal and recurring in nature, necessary for the fair presentation of the Company’s financial position at September 30, 2021 and to state fairly the results for the periods presented.

The most significant estimates utilized during the three and nine months ended September 30, 2021 include estimates necessary to value grants of stock options to employees and various contractors, as disclosed in Note 4.

Fennec Pharmaceuticals Inc.

13 unchanged sentences

The Company places its cash and cash equivalents in investments held by highly rated financial institutions in accordance with its investment policy designed to protect the principal investment.

At June 30, 2021, the Company had $ 27,293 in cash, savings and money market accounts ($ 30,344 at December 31, 2020).

At June 30, 2021, the Company held $ 398 in cash of which $ 6 (as presented in U.S.

At September 30, 2021, the Company had $ 24,335 in cash, savings and money market accounts ($ 30,344 at December 31, 2020).

At September 30, 2021, the Company held $ 428 in cash of which $ 37 (as presented in U.S.

dollars) was in Canadian dollars ($ 45 at December 31, 2020 as presented in U.S.

At June 30, 2021, the Company held $ 26,895 in money market investments.

At September 30, 2021, the Company held $ 23,907 in money market investments.

Money market investments typically have minimal risks.

1 unchanged sentence

Financial instruments

Financial instruments recognized on the balance sheets at June 30, 2021 and December 31, 2020 consist of cash and cash equivalents, accounts payable, accrued liabilities and long term debt, the carrying values of which approximate fair value due to their relatively short time to maturity.

Financial instruments recognized on the balance sheets at September 30, 2021 and December 31, 2020 consist of cash and cash equivalents, accounts payable, accrued liabilities and long term debt, the carrying values of which approximate fair value due to their relatively short time to maturity.

The Company does not hold or issue financial instruments for trading.

6 unchanged sentences

As the main purpose of the Company is research and development, the Company has chosen to avoid investments of a trading or speculative nature.

The Company’s revenue has generated through sales of intellectual property (“IP”).

The Company’s nominal historical revenue has been generated through sales of its intellectual property (“IP”).

For the periods presented, there is no revenue.

8 unchanged sentences

When determining whether the customer has obtained control of the goods or services, the Company considers the point at which the customer may benefit from the goods or services.

For sale of IP to, revenue is recognized upon grant or transfer of the IP, as the Company’s IP is considered functional in nature.

For sale of IP, revenue is recognized upon grant or transfer of the IP, as the Company’s IP is considered functional in nature.

Performance obligations

7 unchanged sentences

a non-refundable, upfront payment;

milestone payments and royalties on commercial sales of IP product candidates, if any.

milestone payments;

and royalties on commercial sales of IP product candidates, if any.

To date, the Company has received upfront payments and several milestone payments but has not received any license or option fees or earned royalty revenue as a result of product sales.

5 unchanged sentences

The Company refers to this as the variable consideration constraint.

Due to the uncertainty associated with the occurrence of any underlying events which would trigger development and regulatory milestone consideration under its revenue arrangements, with the exception of certain initial conditions precedent milestones, the Company has concluded the variable consideration associated with all development and regulatory milestones to be fully constrained as of June 30, 2021, and therefore has not included such consideration in the transaction price for any of its revenue arrangements.

Due to the uncertainty associated with the occurrence of any underlying events which would trigger development and regulatory milestone consideration under its revenue arrangements, with the exception of certain initial conditions precedent milestones, the Company has concluded the variable consideration associated with all development and regulatory milestones to be fully constrained as of September 30, 2021, and therefore has not included such consideration in the transaction price for any of its revenue arrangements.

The Company will reassess this conclusion at each subsequent reporting period and will only include amounts associated with regulatory or development milestones in the transaction price when, or if, the variable consideration is determined to be released from the constraint.

The Company adjusts the transaction price for the effects of the time value of money if the timing of payments agreed to by the parties to the contract, explicitly or implicitly, provides the Company or its customer with a significant benefit of financing the transfer of goods or services.

In relation to the royalties from the sale of Eniluracil to Elion, the Company concluded that its licensing and collaboration arrangements do not contain a significant financing component because the payment structure of its agreements arise from reasons other than providing a significant benefit of financing.

In relation to the royalties from the sale of Eniluracil to Elion (described under “Revenue arrangements” below), the Company concluded that its licensing and collaboration arrangements do not contain

Fennec Pharmaceuticals Inc.

1 unchanged sentence

dollars and shares in thousands, except per share information)

a significant financing component because the payment structure of its agreements arise from reasons other than providing a significant benefit of financing.

Contract assets

The Company did not have any contract assets as of June 30, 2021 or December 31, 2020.

The Company did not have any contract assets as of September 30, 2021 or December 31, 2020.

Contract liabilities

The Company did not have any contract liabilities as of June 30, 2021 or December 31, 2020.

The Company did not have any contract liabilities as of September 30, 2021 or December 31, 2020.

Revenue arrangements

1 unchanged sentence

The agreement called for $ 40 in cash and 5 % royalties to be paid to Fennec for any income derived from the sale of Eniluracil.

The agreement was for the sale, not license of IP.

The agreement was for the sale (not the license) of IP.

In addition, the agreement did not call for any additional good or service beyond the transfer of IP and related assets (e.g.

7 unchanged sentences

The event which triggered the receipt of cash and shares occurred in October of 2020.

The revenue for this event was recognized in Q4 of 2020.

The revenue for this event was recognized in the fourth quarter ended December 31, 2020.

The agreement between Elion and Processa entitles Elion to the payments outlined in the table below.

14 unchanged sentences

2nd Regulatory Approval Outside US

Since the Condition Precedent was achieved, and only the passage of time must occur in order for the 1 st and 2 nd Year Anniversary payments to become due, the Company concluded the 1 st and 2 nd Year Anniversary milestone payments are also probable of coming to fruition and thus were included in the transaction price during the 4 th quarter of 2020 along with the aforementioned Condition Precedent payments.

Since the Condition Precedent was achieved, and only the passage of time must occur in order for the 1 st and 2 nd Year Anniversary payments to become due, the Company concluded the 1 st and 2 nd Year Anniversary milestone payments are also probable of coming to fruition and thus were included in the transaction price during the fourth quarter ended December 31, 2020 along with the aforementioned Condition Precedent payments.

The arrangement with Elion contains consideration that is variable based on the Processa’s achievement of the above referenced development and regulatory milestones.

The next milestone payment the Company may be entitled to receive is 5 restricted shares for 1 st patient in Dose Confirmation Study and then another 15 restricted shares for the NDA submission.

These are considered variable consideration that is fully constrained due to the uncertainty associated with the achievement of the development milestone.

The considerations related to royalties (first and second FDA approval in US and first and second regulatory approval outside of US) are also variable consideration that are fully constrained in

The next milestone payment the Company may be entitled to receive is 5 restricted shares for 1 st patient in Dose Confirmation Study and then another 15 restricted shares for the NDA

Fennec Pharmaceuticals Inc.

1 unchanged sentence

dollars and shares in thousands, except per share information)

accordance with the royalty recognition constraint.

These are considered variable consideration that is fully constrained due to the uncertainty associated with the achievement of the development milestone.

The considerations related to royalties (first and second FDA approval in U.S.

and first and second regulatory approval outside U.S.) are also variable consideration that are fully constrained in accordance with the royalty recognition constraint.

The variable consideration related to royalties will be recognized in the period the products are sold by Processa and the Company has a present right to payment.

3 unchanged sentences

Recognizing the passage of time, the Company adjusted its liquidity discount to the original shares of 5 % and then 20 % and 25 % for the one- and two-year anniversary tranches.

Subsequent changes to the fair value of the underlying securities are recognized as unrealized gains or losses on marketable equity securities within the consolidated statement of operations and comprehensive loss.

During the quarter ended June 30, 2021, the Company reported $ 84 in unrealized loss on the fair value of the underlying Processa shares.

There is a total unrealized gain on the Processa shares of $ 98 for the six months ended June 30, 2021..

Subsequent changes to the fair value of the underlying securities are recognized as unrealized gains or losses on marketable equity securities within the condensed consolidated statement of operations.

During the quarter ended September 30, 2021, the Company reported $ 39 in unrealized gain on the fair value of the underlying Processa shares.

There is a total unrealized gain on the Processa shares of $ 137 for the nine months ended September 30, 2021.

Loss per Share

6 unchanged sentences

The following table sets forth the computation of basic and diluted net loss per share:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Weighted-average common shares, basic

5 unchanged sentences

The following outstanding options and warrants were excluded from the computation of basic and diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Options to purchase common shares

Warrants to purchase common shares

Stockholders’ Equity

Authorized capital stock

The Company’s authorized capital stock consists of an unlimited number of common shares, no par value per share.

Fennec Pharmaceuticals Inc.

1 unchanged sentence

dollars and shares in thousands, except per share information)

Stockholders’ Equity

Authorized capital stock

The Company’s authorized capital stock consists of an unlimited number of common shares, no par value per share.

Warrants to Purchase Common Stock

During the three and six-months ended June 30, 2021 and 2020, there were no warrants issued or exercised.

Outstanding warrants have a weighted average life of 7.60 years on June 30, 2021.

The following tables detail the Company’s warrant activity for the three and six months ended June 30, 2021 and 2020, respectively:

During the three and nine-months ended September 30, 2021 and 2020, there were no warrants issued or exercised.

Outstanding warrants have a weighted average life of 7.35 years on September 30, 2021.

The following tables detail the Company’s warrant activity for the three and nine months ended September 30, 2021 and 2020, respectively:

Common Shares

7 unchanged sentences

Outstanding June 30, 2021

Outstanding September 30, 2021

Common Shares

7 unchanged sentences

Outstanding June 30, 2020

Outstanding September 30, 2020

Stock option plan

6 unchanged sentences

All options vest within three years or less and are exercisable for a period of ten years from the date of grant.

The Plan allows the issuance of Canadian and U.S.

The Plan allows

Fennec Pharmaceuticals Inc.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

dollars and shares in thousands, except per share information)

the issuance of Canadian and U.S.

dollar grants.

The table below outlines recognized contractor and employee expense from equity awards for the three and six months period ended June 30, 2021 and 2020.

Three Months Ended June 30,

Six Months Ended June 30,

The table below outlines recognized contractor and employee expense from equity awards for the three and nine months period ended September 30, 2021 and 2020.

Three Months Ended September 30,

Nine Months Ended September 30,

Contractor options expense recognized

1 unchanged sentence

Total option expense recognized

Fennec Pharmaceuticals Inc.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

dollars and shares in thousands, except per share information)

Stock option activity

The following is a summary of option activity for the three and six months ended June 30, 2021, and 2020 for stock options denominated in U.S dollars.

As of August 2020, there were no Canadian denominated options outstanding.

The following is a summary of option activity for the three and nine months ended September 30, 2021, and 2020 for stock options denominated in U.S.

Since August of 2020, there have been no Canadian denominated options outstanding.

Weighted-Average

4 unchanged sentences

Outstanding at March 31, 2021

Outstanding at June 30, 2021

During the three month period ended June 30, 2021, there were 755 US denominated options issued, 50 US denominated options forfeited and 4 US denominated options exercised.

The exercise resulted in a cash inflow of $ 24 .

Of the 3,653 US denominated options granted and outstanding at June 30, 2021, 2,479 are fully vested and exercisable.

Outstanding and exercisable at June 30, 2021

Outstanding at September 30, 2021

During the three-month period ended September 30, 2021, there were no grants or exercises of U.S.

denominated options.

Of the 3,653 U.S.

denominated options granted and outstanding at September 30, 2021, 2,586 are fully vested and exercisable.

The following is a summary of option activity for each of the quarterly periods in fiscal year 2020 for stock options denominated in Canadian dollars:

5 unchanged sentences

Outstanding at March 31, 2020

Outstanding at June 30, 2020

Outstanding and exercisable at June 30, 2020

Outstanding at September 30, 2020

The value of options issued was estimated using the Black-Scholes option pricing model using the following assumptions in the table below.

The expected volatility was determined using historical volatility of our stock based on the contractual life of the award.

Fennec Pharmaceuticals Inc.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

dollars and shares in thousands, except per share information)

Valuation Assumptions

6 unchanged sentences

Expected life

Fennec Pharmaceuticals Inc.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

dollars and shares in thousands, except per share information)

Restricted Share Units Activity

The Company’s Equity Incentive Plan allows for the issuance of restricted share units (“RSU’s”).

The following is a summary of RSU activity for the three and six months ended June 30, 2021, for RSU’s denominated in U.S.

The Plan allows for the issuance of restricted share units (“RSU’s”).

The following is a summary of RSU activity for the three and nine months ended September 30, 2021, for RSU’s denominated in U.S.

Prior to June 2021, there was no activity involving RSU’s.

7 unchanged sentences

Outstanding at June 30, 2021

Outstanding at September 30, 2021

The value of RSU’s issued was estimated using the share price on the date of the grant multiplied by the number of shares granted.

3 unchanged sentences

This Topic applies to certain assets and liabilities that are being measured and reported on a fair value basis.

The Fair value Measurements Topic defines fair value, establishes a framework for measuring fair value in accordance with US GAAP, and expands disclosure about fair value measurements.

The Fair Value Measurements Topic defines fair value, establishes a framework for measuring fair value in accordance with U.S.

GAAP, and expands disclosure about fair value measurements.

This Topic enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values.

3 unchanged sentences

Unobservable inputs that are not corroborated by market data.

Fair Value Measurement at June 30, 2021 and December 31, 2020

Fennec Pharmaceuticals Inc.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

dollars and shares in thousands, except per share information)

Fair Value Measurement at September 30, 2021 and December 31, 2020

(in thousands)

6 unchanged sentences

Processa common shares

The Company held approximately $ 398 in cash as of June 30, 2021, of which approximately $ 6 was in Canadian funds (translated into U.S.

The Company held approximately $ 428 in cash as of September 30, 2021, of which approximately $ 37 was in Canadian funds (translated into U.S.

As of December 31, 2020, the Company held approximately $ 678 in cash of which approximately $ 45 was in Canadian funds (translated into U.S.

Fennec Pharmaceuticals Inc.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

dollars and shares in thousands, except per share information)

The Company received 41 restricted common shares of Processa (PSCA).

The Company received 41 restricted common shares of Processa (NASDAQ:PCSA).

The share restriction will expire in three tranches:

18 unchanged sentences

This litigation, and any other securities class actions that may be brought against us, could result in substantial costs and a diversion of our management’s attention and resources.

Fennec Pharmaceuticals Inc.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

dollars and shares in thousands, except per share information)

Executive Severance

In the event of his termination with us other than for cause, we will be obligated to pay Mr.

Raykov a one-time severance payment equal to twelve months of salary ($ 442 as of June 30, 2021).

Raykov a one-time severance payment equal to twelve months of salary ($ 442 as of September 30, 2021).

In the event of his termination with us other than for cause, we will be obligated to pay Mr.

Andrade a one-time severance payment equal to six months of salary ($ 160 as of June 30, 2021).

Andrade a one-time severance payment equal to six months of salary ($ 160 as of September 30, 2021).

In the event of her termination with us other than for cause, we will be obligated to pay Ms.

Goel a one-time severance payment equal to three months of salary ($ 92 as of June 30,2021).

Goel a one-time severance payment equal to six months of salary ($ 184 as of September 30, 2021).

We have an operating lease in Research Triangle Park, North Carolina utilizing small space within a commercial building.

1 unchanged sentence

This operating lease is terminable with 30 days’ notice and has no penalties or contingent payments due.

Fennec Pharmaceuticals Inc.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

dollars and shares in thousands, except per share information)

On January 23, 2020, the Company entered into an Office Service Agreement (the “Office Service Agreement”) with Regus to lease office space at in Hoboken, New Jersey.

10 unchanged sentences

Term Loan A consists of $ 5,000 , which was funded upon closing.

Term Loan B consists of $ 7,500 to be funded upon New Drug Application (NDA) approval of PEDMARK TM in the U.S.

Term Loan B consists of $ 7,500 to be funded upon NDA approval of PEDMARK TM in the U.S.

Term Loan C consists of $ 7,500 million to be funded upon the occurrence the Company achieving consolidated trailing six-month revenues of $ 11,000 on or before December 31, 2022.

On June 24, 2021, the Company drew $ 5,000 from Term Loan A.

The Bridge Bank Term Loan A matures on July 1, 2025.

Term Loan A matures on July 1, 2025.

Payments are for interest only through February 1, 2023.

2 unchanged sentences

The Company is obligated to maintain a cash balance greater or equal to three times its monthly cash burn as calculated on the last date of the immediately preceding month.

Aggregate annual payments due on Term Loan A as of June 30, 2021 are as follows (in thousands):

Fennec Pharmaceuticals Inc.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

dollars and shares in thousands, except per share information)

Aggregate annual payments due on Term Loan A as of September 30, 2021 are as follows (in thousands):

Years Ending December 31,

3 unchanged sentences

In the event of default or change of control, all unpaid principal and all accrued and unpaid interest amounts (if any) become immediately due and payable including the prepayment fee.

Events of default include, but are not limited to, a

Fennec Pharmaceuticals Inc.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

dollars and shares in thousands, except per share information)

payment default, a material adverse change, and insolvency.

The Term Loan is secured by all of the Company’s assets, including all capital stock held by the Company.

Debt issuance costs amounting to $ 55 securing access to Term Loans A, B and C were paid in cash to Bridge Bank.

Events of default include, but are not limited to, a payment default, a material adverse change, and insolvency.

The Bridge Bank facility is secured by all of the Company’s assets, including all capital stock held by the Company.

Debt issuance costs amounting to $ 55 securing access to Term Loans A, B and C were paid in cash to Bridge Bank on June 24, 2021.

This amount was capitalized and is being amortized over the access period of the Term Loans.

1 unchanged sentence

The debt discount is being amortized over the life of Term Loan A.

The following table summarizes the Company’s term loans (in thousands):

Principal of term loan

Unamortized debt discount

Total term Loan

term loan, current

Term loan noncurrent

Subsequent Events

1 unchanged sentence

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