Greenwich LifeSciences, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS GREENWICH LIFESCIENCES, INC. BALANCE SHEETS AS OF MARCH 31, 2022 AND DECEMBER 31, 2021 (UNAUDITED) March 31, 2022 December 31, 2021 Assets Current assets Cash $ 19,743,096 $ 27,204,269 Acquired patents, net 11,712 12,615 Total assets $ 19,754,808 $ 27,216,884 Liabilities and stockholders’ equity Current liabilities Accounts payable & accrued interest $ 220,845 $ 220,845 Unreimbursed expenses 20,323 164,327 Total current liabilities 241,168 385,172 Total liabilities 241,168 385,172 Stockholders’ equity Common stock, $ 0.001 par value; 100,000,000 shares authorized; 12,951,453 and 13,147,829 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively 12,952 13,148 Additional paid-in capital 55,117,845 60,466,093 Accumulated deficit ( 35,617,157 ) ( 33,647,529 ) Total stockholders’ equity 19,513,640 26,831,712 Total liabilities and stockholders’ equity $ 19,754,808 $ 27,216,884 See accompanying notes to unaudited financial statements. - 3 - GREENWICH LIFESCIENCES, INC. STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021 (UNAUDITED) 2022 2021 Three Months Ended March 31, 2022 2021 Revenue $ — $ — Operating expenses Research and development 1,660,821 281,977 General and administrative 328,382 318,629 Total operating expenses 1,989,203 600,606 Loss from operations ( 1,989,203 ) ( 600,606 ) Interest income 19,575 3,598 Net loss $ ( 1,969,628 ) $ ( 597,008 ) Per share information: Net loss per common share, basic and diluted $ ( 0.15 ) $ ( 0.05 ) Weighted average common shares outstanding, basic and diluted 13,063,710 12,800,667 See accompanying notes to unaudited financial statements. - 4 - GREENWICH LIFESCIENCES, INC. STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021 (UNAUDITED) Shares Par Amount Shares Par Amount Paid-in Capital Accumulated Deficit Stockholders’ Equity Common Stock Preferred Stock Additional Total Shares Par Amount Shares Par Amount Paid-in Capital Accumulated Deficit Stockholders’ Equity Balances, December 31, 2020 12,703,541 $ 12,704 — $ — $ 56,695,359 $ ( 29,076,953 ) $ 27,631,110 Stock-based compensation 73,356 73 — — 164,978 — 165,051 Exercise of common stock from Green Shoe of follow-on offering, net of offering costs 70,000 70 — — 2,547,930 — 2,548,000 Net loss ( 597,008 ) ( 597,008 ) Balances, March 31, 2021 12,846,897 $ 12,847 — $ — $ 59,408,267 $ ( 29,673,961 ) $ 29,747,153 Balances, December 31, 2021 13,147,829 $ 13,148 — $ — $ 60,466,093 $ ( 33,647,529 ) $ 26,831,712 Stock-based compensation 73,452 74 — — 165,193 — 165,267 Repurchase of common stock via stock buy back program, net of costs ( 269,828 ) ( 270 ) — — ( 5,513,441 ) — ( 5,513,711 ) Net loss ( 1,969,628 ) ( 1,969,628 ) Balances, March 31, 2022 12,951,453 $ 12,952 $ — $ — $ 55,117,845 $ ( 35,617,157 ) $ 19,513,640 See accompanying notes to unaudited financial statements. - 5 - GREENWICH LIFESCIENCES, INC. STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021 (UNAUDITED) 2022 2021 Three Months Ended March 31, 2022 2021 Operating activities: Net loss $ ( 1,969,628 ) $ ( 597,008 ) Adjustments required to reconcile net loss to net cash used in operating activities: Amortization 903 903 Stock-based compensation 165,267 165,051 Changes in operating assets and liabilities: Accounts payable — ( 120,000 ) Accrued interest — 18,303 Unreimbursed expenses (accrued) ( 144,004 ) 4,481 Net cash used in operating activities ( 1,947,462 ) ( 528,270 ) Financing activities: Proceeds from sale of common stock — 2,548,000 Repurchase of common stock via stock buy back program, net of costs ( 5,513,711 ) — Repayment to related party/shareholder — ( 275,154 ) Net cash provided by (used in) financing activities ( 5,513,711 ) 2,272,846 Net increase (decrease) in cash ( 7,461,173 ) 1,744,576 Cash, beginning of period 27,204,269 28,660,375 Cash, end of period $ 19,743,096 $ 30,404,951 See accompanying notes to unaudited financial statements. - 6 - GREENWICH LIFESCIENCES, INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. Organization and Description of the Business Greenwich LifeSciences, Inc. (the “Company”) was incorporated in the state of Delaware in 2006 under the name Norwell, Inc. In March 2018, Norwell, Inc. changed its name to Greenwich LifeSciences, Inc. The Company is developing a breast cancer immunotherapy focused on preventing the recurrence of breast cancer following surgery. 2. Significant Accounting Policies Basis of Presentation The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission and should be read in conjunction with the audited financial statements and notes thereto of the Company contained elsewhere herein. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosures contained in the audited financial statements of the Company for the years ended December 31, 2021 and 2020 as reported in the Company’s Form 10-K have been omitted. Basic and Diluted Loss per Share As of March 31, 2022 and 2021, the Company had common stock equivalents related to warrants outstanding to acquire 20,174 and 100,870 shares of the Company’s common stock, respectively. As of March 31, 2022 and 2021, the Company has no common stock equivalents related to convertible preferred stock issued and outstanding. The following table sets forth the computation of basic and diluted net loss per common share for the periods indicated: Schedule of Basic and Diluted Net Loss Per Common Share 2022 2021 Three Months Ended March 31, 2022 2021 Basic and diluted net loss per share calculation: Net loss, basic ( 1,969,628 ) ( 597,008 ) Change in fair value of warrants — — Net loss, diluted ( 1,969,628 ) ( 597,008 ) Weighted average common shares outstanding, basic and diluted 13,063,710 12,800,667 Net loss per common share, basic and diluted $ ( 0.15 ) $ ( 0.05 ) - 7 - 3. Related Party Transactions Unreimbursed expenses have been accrued and incurred by management, which total $ 20,323 as of March 31, 2022 and $ 164,327 as of December 31, 2021. 4. Commitments and Contingencies License Obligation, Legal Expenses, and Manufacturing Agreements The Company entered into an exclusive license agreement with The Henry M. Jackson Foundation (“HJF”) in April 2009, as amended, pursuant to which it acquired exclusive marketing rights to GP2, the Company’s product candidate. In consideration for such licensed rights, the Company issued HJF 202,619 shares of the Company’s common stock valued at $ 0.267 per share, which is amortized over 15 years at $ 3,607 per year. Pursuant to the exclusive license agreement, the Company is required to pay an annual maintenance fee, milestone payments and royalty payments based on sales of GP2 and to reimburse HJF for patent expenses related to GP2. The Company currently depends on third-party contract manufacturers for all required raw materials, active pharmaceutical ingredients, and finished product candidate for the Company’s clinical trials. Accounts payable includes accrued interest obligations to HJF which total $ 220,845 as of March 31, 2022 and December 31, 2021. Legal Proceedings From time to time, the Company may be involved in disputes, including litigation, relating to claims arising out of operations in the normal course of business. Any of these claims could subject the Company to costly legal expenses and, while management generally believes that there will be adequate insurance to cover different liabilities at such time the Company becomes a public company and commences clinical trials, the Company’s future insurance carriers may deny coverage or policy limits may be inadequate to fully satisfy any damage awards or settlements. If this were to happen, the payment of any such awards could have a material adverse effect on the results of operations and financial position. Additionally, any such claims, whether or not successful, could damage the Company’s reputation and business. The Company is currently not a party to any legal proceedings, the adverse outcome of which, in management’s opinion, individually or in the aggregate, could have a material adverse effect on our results of operations or financial position. 5. Stockholders’ Equity As of March 31, 2022, 746,469 shares of the 908,242 shares of the common stock grant had vested at approximately $ 1,679,555 value and 161,773 shares remain unvested and unrecognized at approximately $ 363,989 value. An aggregate of 73,452 shares of common stock were vested at approximately $ 165,267 value in January, February, and March 2022 in consideration for services rendered. On January 23, 2022, the Board of Directors authorized the Company’s management to implement a stock repurchase program for up to $ 10 million of the Company’s common stock at any time. The term of the Board of Directors authorization of the repurchase program is until March 31, 2023. The repurchase program may be suspended or discontinued at any time and will be funded using the Company’s working capital. As of March 15, 2022, approximately 269,828 shares of the Company’s common stock has been repurchased and cancelled at an aggregate purchase price, including all transactions costs, of approximately $ 5,513,711 . On March 15, 2022, the Board of Directors indefinitely suspended the Company’s stock repurchase program. On January 23, 2022, the Board of Directors extended the lock-up of the shares owned by the Company’s directors, officers, and existing pre-IPO investors to March 24, 2023 (30 months from date of the Company’s IPO) from March 24, 2022 (18 months from date of the Company’s IPO). During this period, current officers, directors and certain shareholders will not be able to sell their shares of the Company’s common stock unless otherwise modified by the Board of Directors. Warrants At March 31, 2022, outstanding warrants to purchase shares of common stock accounted for as equity or liabilities were as follows with an aggregate intrinsic value as of March 31, 2022 of $ 250,813 based on the March 31, 2022 closing share price of $ 19.62 : Schedule of Outstanding Warrants Shares Underlying Outstanding Exercise Expiration Warrants Price (1) Date (1) 20,174 $ 7.1875 September 24, 2025 20,174 (1) The warrants are exercisable at any time and from time to time, in whole or in part, during a period commencing March 24, 2021 and expiring September 24, 2025 . The exercise price of the warrants is $ 7.1875 per share or $ 6.9718 per share if the warrants are exercised for cash within the first six months of the period in which they are exercisable. - 8 -