Greenwich LifeSciences, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS GREENWICH LIFESCIENCES, INC. BALANCE SHEETS AS OF SEPTEMBER 30, 2022 AND DECEMBER 31, 2021 (UNAUDITED) September 30, 2022 December 31, 2021 Assets Current assets Cash $ 15,638,087 $ 27,204,269 Acquired patents, net 9,906 12,615 Total assets $ 15,647,993 $ 27,216,884 Liabilities and stockholders’ equity Current liabilities Accounts payable & accrued interest $ 220,845 $ 220,845 Unreimbursed expenses 17,034 164,327 Total current liabilities 237,879 385,172 Total liabilities 237,879 385,172 Stockholders’ equity Common stock, $ 0.001 par value; 100,000,000 shares authorized; 12,848,165 and 13,147,829 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively 12,848 13,148 Additional paid-in capital 54,079,520 60,466,093 Accumulated deficit ( 38,682,254 ) ( 33,647,529 ) Total stockholders’ equity 15,410,114 26,831,712 Total liabilities and stockholders’ equity $ 15,647,993 $ 27,216,884 See accompanying notes to unaudited financial statements. - 3 - GREENWICH LIFESCIENCES, INC. STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021 (UNAUDITED) 2022 2021 2022 2021 Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenue $ — $ — $ — $ — Operating expenses Research and development 1,723,493 657,096 4,017,564 1,495,607 General and administrative 659,568 209,590 1,128,007 725,130 Total operating expenses 2,383,061 866,686 5,145,571 2,220,737 Loss from operations ( 2,383,061 ) ( 866,686 ) ( 5,145,571 ) ( 2,220,737 ) Interest Income 64,037 3,568 110,846 10,866 Net loss $ ( 2,319,024 ) $ ( 863,118 ) $ ( 5,034,725 ) $ ( 2,209,871 ) Per share information: Net loss per common share, basic and diluted $ ( 0.18 ) $ ( 0.07 ) $ ( 0.39 ) $ ( 0.17 ) Weighted average common shares outstanding, basic and diluted 12,823,447 12,968,891 13,067,620 12,826,249 See accompanied notes to unaudited financial statements. - 4 - GREENWICH LIFESCIENCES, INC. STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE NINE MONTHS ENDED SEPTEMBER 30, 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 Stock-based compensation 73,356 73 — — 164,978 — 165,051 Net loss - ( 749,745 ) ( 749,745 ) Balances, June 30, 2021 12,920,253 12,920 — — 59,573,245 ( 30,423,706 ) 29,162,459 Stock-based compensation 73,356 74 — — 164,977 — 165,051 Net loss - ( 863,118 ) ( 863,118 ) Balances, September 30, 2021 12,993,609 $ 12,994 — $ — $ 59,738,222 $ ( 31,286,824 ) $ 28,464,392 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 Stock-based compensation 73,356 73 — — 224,430 — 224,503 Repurchase of common stock via stock buy back program, net of costs ( 250,000 ) ( 250 ) — — ( 2,022,255 ) — ( 2,022,505 ) Net loss - ( 746,073 ) ( 746,073 ) Balances, June 30, 2022 12,774,809 12,775 — — 53,320,020 ( 36,363,230 ) 16,969,565 Stock-based compensation 73,356 73 — — 759,500 - 759,573 Net loss - ( 2,319,024 ) ( 2,319,024 ) Balances, September 30, 2022 12,848,165 $ 12,848 — $ — $ 54,079,520 $ ( 38,682,254 ) $ 15,410,114 See accompanying notes to unaudited financial statements. - 5 - GREENWICH LIFESCIENCES, INC. STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021 (UNAUDITED) 2022 2021 Nine Months Ended September 30, 2022 2021 Operating activities: Net loss $ ( 5,034,725 ) $ ( 2,209,871 ) Adjustments required to reconcile net loss to net cash used in operating activities: Amortization 2,709 2,709 Stock-based compensation 1,149,343 495,153 Changes in operating assets and liabilities: Accounts payable — ( 451,732 ) Accrued interest — 36,606 Unreimbursed expenses (accrued) ( 147,293 ) 99,907 Net cash used in operating activities ( 4,029,966 ) ( 2,027,228 ) Financing activities: Proceeds from sale of common stock — 2,548,000 Repurchase of common stock via stock buy back program, net of costs ( 7,536,216 ) — Repayment to related party/shareholder — ( 275,154 ) Net cash provided by (used in) financing activities ( 7,536,216 ) 2,272,846 Net increase (decrease) in cash ( 11,566,182 ) 245,618 Cash, beginning of period 27,204,269 28,660,375 Cash, end of period $ 15,638,087 $ 28,905,993 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 September 30, 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 September 30, 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 Nine Months Ended September 30, 2022 2021 Basic and diluted net loss per share calculation: Net loss, basic ( 5,034,725 ) ( 2,209,871 ) Change in fair value of warrants — — Net loss, diluted ( 5,034,725 ) ( 2,209,871 ) Weighted average common shares outstanding, basic and diluted 13,067,620 12,826,249 Net loss per common share, basic and diluted $ ( 0.39 ) $ ( 0.17 ) - 7 - 3. Related Party Transactions Unreimbursed expenses have been accrued and incurred by management, which total $ 17,034 as of September 30, 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 September 30, 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 September 30, 2022, 893,181 shares of the 908,362 shares of the common stock grant, which includes an additional grant of 120 shares issued during the vesting period due to rounding up of fractional shares, had vested at approximately $ 2,009,657 value and 15,181 shares remain unvested and unrecognized at approximately $ 34,157 value. An aggregate of 220,164 shares of common stock were vested at approximately $ 495,369 value from January through September 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 June 30, 2022, approximately 519,828 shares of the Company’s common stock has been repurchased and cancelled at an aggregate purchase price, including all transactions costs, of approximately $ 7,536,216 . 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 September 30, 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 September 30, 2022 of $ 38,583 based on the September 30, 2022 closing share price of $ 9.10 : 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. Options On June 22, 2022, 1,498,128 shares of common stock were granted to employees, consultants, and directors issuable upon exercise of outstanding stock options under the Company’s 2019 Equity Incentive Plan at an exercise price of $ 7.63 per share, which was the closing share price on June 21, 2022. The options had a fair value on the grant date of $ 9,512,356 of which $ 653,974 was expensed through September 30, 2022 and $ 8,858,382 will be expensed in the future if and as vesting occurs. Vesting will be based on time of service over a four year period and certain additional performance milestones for senior management, primarily related to the planned Phase III clinical trial. - 8 -