enVVeno Medical Corp 10-Q

ITEM 1 – Financial Statements ENVVENO MEDICAL CORPORATION CONDENSED BALANCE SHEETS (Unaudited) September 30, 2024 December 31, 2023 (In thousands except par values, unless otherwise indicated) Assets Current Assets: Cash and cash equivalents $ 17,915 $ 3,620 Short-term investments 30,464 42,792 Prepaid expenses and other current assets 672 511 Total current assets 49,051 46,923 Property and equipment, net 218 334 Operating lease right-of-use assets, net 1,090 1,347 Security deposits and other assets 31 31 Total assets $ 50,390 $ 48,635 Liabilities and Stockholders’ Equity Current Liabilities: Accounts payable, accrued expenses and other current liabilities $ 1,872 $ 1,033 Current portion of operating lease liabilities 357 338 Total current liabilities 2,229 1,371 Long-term operating lease liabilities 791 1,064 Total liabilities 3,020 2,435 Commitments and Contingencies - - Stockholders’ Equity: Preferred stock, par value $ 0.00001 , 10,000 shares authorized: no shares issued or outstanding - - Common stock, par value $ 0.00001 , 250,000 shares authorized, 17,536 and 13,317 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively - - Additional paid-in capital 192,996 176,236 Accumulated deficit ( 145,626 ) ( 130,036 ) Total stockholders’ equity 47,370 46,200 Total liabilities and stockholders’ equity $ 50,390 $ 48,635 See Notes to these Unaudited Condensed Financial Statements 1 ENVVENO MEDICAL CORPORATION CONDENSED STATEMENTS OF OPERATIONS (Unaudited) 2024 2023 2024 2023 For the Three Months Ended For the Nine Months Ended September 30, September 30, 2024 2023 2024 2023 (In thousands, except per share data) Operating Expenses: Research and development expenses 2,859 2,798 8,736 10,602 Selling, general and administrative expenses 3,311 2,551 8,391 8,358 Loss from Operations ( 6,170 ) ( 5,349 ) ( 17,127 ) ( 18,960 ) Other Income: Realized gain from sales of trading securities 428 148 1,215 398 Unrealized gain from trading securities 6 156 96 567 Interest income, net 94 44 226 128 Total Other Income 528 348 1,537 1,093 Net Loss $ ( 5,642 ) $ ( 5,001 ) $ ( 15,590 ) $ ( 17,867 ) Net Loss Per Basic and Diluted Common Share: $ ( 0.35 ) ( 0.45 ) ( 0.97 ) ( 1.59 ) Weighted Average Number of Common Shares Outstanding: Basic and Diluted 16,067 11,231 16,063 11,231 See Notes to these Unaudited Condensed Financial Statements 2 ENVVENO MEDICAL CORPORATION CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (In thousands, unless otherwise indicated) (Unaudited) Shares Amount Capital Deficit Equity Three Months Ended September 30, 2024 Common Stock Additional Paid-in Accumulated Total Stockholders’ Shares Amount Capital Deficit Equity Balance at July 1, 2024 13,330 - $ 178,402 $ ( 139,984 ) $ 38,418 Common Stock and Warrants Issued in Public Offering 4,206 - 13,591 - 13,591 Share-Based Compensation - - 1,003 - 1,003 Net loss - - - ( 5,642 ) ( 5,642 ) Balance at September 30, 2024 17,536 $ - $ 192,996 $ ( 145,626 ) $ 47,370 Shares Amount Capital Deficit Equity Three Months Ended September 30, 2023 Common Stock Additional Paid-in Accumulated Total Stockholders’ Shares Amount Capital Deficit Equity Balance at July 1, 2023 9,472 - $ 148,198 $ ( 119,386 ) $ 28,812 Share-Based Compensation - - 1,104 - 1,104 Net loss - - - ( 5,001 ) ( 5,001 ) Balance at September 30, 2023 9,472 $ - $ 149,302 $ ( 124,387 ) $ 24,915 Shares Amount Capital Deficit Equity Nine Months Ended September 30, 2024 Common Stock Additional Paid-in Accumulated Total Stockholders’ Shares Amount Capital Deficit Equity Balance at January 1, 2024 13,317 $ - $ 176,236 $ ( 130,036 ) $ 46,200 Common Stock and Warrants Issued in Public Offering 4,206 - 13,591 - 13,591 Share-Based Compensation - - 3,123 - 3,123 Options exercised 13 - 46 - 46 Net loss - - - ( 15,590 ) ( 15,590 ) Balance at September 30, 2024 17,536 $ - $ 192,996 $ ( 145,626 ) $ 47,370 Shares Amount Capital Deficit Equity Nine Months Ended September 30, 2023 Common Stock Additional Paid-in Accumulated Total Stockholders’ Shares Amount Capital Deficit Equity Balance at January 1, 2023 9,472 $ - $ 145,249 $ ( 106,520 ) $ 38,729 Balance 9,472 $ - $ 145,249 $ ( 106,520 ) $ 38,729 Share-Based Compensation - - 4,053 - 4,053 Net loss - - - ( 17,867 ) ( 17,867 ) Balance at September 30, 2023 9,472 $ - $ 149,302 $ ( 124,387 ) $ 24,915 Balance 9,472 $ - $ 149,302 $ ( 124,387 ) $ 24,915 See Notes to these Unaudited Condensed Financial Statements 3 ENVVENO MEDICAL CORPORATION CONDENSED STATEMENTS OF CASH FLOWS (In thousands, unless otherwise indicated) (Unaudited) 2024 2023 For the Nine Months Ended September 30, 2024 2023 Cash Flows from Operating Activities Net loss $ ( 15,590 ) $ ( 17,867 ) Adjustments to reconcile net loss to net cash used in operating activities: Share-based compensation 3,123 4,052 Depreciation and amortization 149 165 Amortization of right-of-use assets 257 247 Unrealized gain from investments, net ( 96 ) ( 567 ) Changes in operating assets and liabilities: Prepaid expenses and other current assets ( 118 ) ( 155 ) Security deposit and other assets ( 43 ) ( 8 ) Accounts payable, accrued expenses and other current liabilities 839 484 Operating lease liabilities ( 254 ) ( 236 ) Net Cash Used in Operating Activities ( 11,733 ) ( 13,885 ) Cash Flows from Investing Activities Purchase of property and equipment ( 33 ) ( 29 ) Purchases of investments ( 33,420 ) ( 24,276 ) Maturities of investments 45,844 38,581 Net Cash Provided by Investing Activities 12,391 14,276 Cash Flows from Financing Activities Proceeds from public offering 13,591 - Proceeds from stock option exercises 46 - Net Cash Provided by Financing Activities 13,637 - Net Increase in Cash, Cash Equivalents 14,295 391 Cash, cash equivalents - Beginning of period 3,620 4,555 Cash, cash equivalents - End of period $ 17,915 $ 4,946 See Notes to these Unaudited Condensed Financial Statements 4 ENVVENO MEDICAL CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) Note 1 – Business Organization and Nature of Operations enVVeno Medical Corporation (the “Company”) is a late clinical-stage medical device company focused on the advancement of innovative bioprosthetic (tissue-based) solutions to improve the standard of care for the treatment of venous disease. The Company is developing surgical and non-surgical replacement venous valves for patients suffering from severe Chronic Venous Insufficiency (“CVI”) of the deep venous system of the leg. The Company’s lead product is the VenoValve®, which is a potential first-in-class surgical replacement venous valve that is currently being evaluated in a U.S. pivotal study. The Company is also developing a second product called enVVe®, which is a potential first-in-class, non-surgical, transcatheter based replacement venous valve system consisting of the enVVe valve, the enVVe delivery system, and the delivery system accessories. The Company is currently conducting pre-clinical testing on enVVe. Both the VenoValve and enVVe are designed to act as one-way valves, to help assist in propelling blood up the veins of the leg, and back to the heart and lungs. The VenoValve and enVVe are being developed first for approval by the U.S. Food and Drug Administration (FDA). We expect the VenoValve to be eligible for FDA approval first, followed two to three years later by enVVe. If approved, we expect the VenoValve and enVVe to co-exist, with the VenoValve as a surgical replacement venous valve option and enVVe as a non-surgical replacement venous valve option. Note 2 – Management’s Liquidity Plan As of September 30, 2024, the Company had a cash and investment balance of $ 48.4 million and working capital of $ 47.3 million. Although the Company expects to continue incurring losses for the foreseeable future and may need to raise additional capital to sustain its operations, pursue its product development initiatives and penetrate markets for the sale of its products, management believes that the Company’s capital resources are sufficient to meet its obligations as they become due within one year after the date of this Quarterly Report, and sustain operations. 5 ENVVENO MEDICAL CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) Note 3 – Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed financial statements of the Company as of September 30, 2024 and December 31, 2023, and for the three and nine months ended September 30, 2024 and 2023. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the operating results for the full year. These unaudited condensed financial statements should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 29, 2024. The accompanying condensed balance sheet as of December 31, 2023 has been derived from the Company’s audited financial statements. Note 4 – Investments The components of investments were as follows at September 30, 2024 and December 31, 2024: Schedule of Components of Investments (In thousands) September 30, 2024 December 31, 2023 Cash Equivalents Short-Term Investments Cash Equivalents Short-Term Investments Fair Value Level 1 U.S. Government securities $ 3,794 $ 30,464 $ 3,187 $ 42,792 Total debt investments $ 3,794 $ 30,464 $ 3,187 $ 42,792 Unrealized and realized gains and losses on the accompanying statement of operations result from fixed-income securities and are primarily attributable to changes in interest rates. Management does not believe any remaining unrealized losses represent impairments based on our evaluation of available evidence. 6 ENVVENO MEDICAL CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) Note 5 – Concentrations The Company maintains cash with major financial institutions. Cash held in United States bank institutions is currently insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 at each institution. There were aggregate uninsured cash balances of $ 14.9 million and $ 3.4 million as of September 30, 2024 and December 31, 2023, respectively. Note 6 – Accounts Payable, Accrued Expenses and Other Current Liabilities As of September 30, 2024, and December 31, 2023, accounts payable, accrued expenses and other current liabilities consist of the following: Schedule of Accounts Payable, Accrued Expenses and Other Current Liabilities (In thousands) September 30, 2024 December 31, 2023 Accounts payable $ 894 $ 427 Accrued compensation costs 446 478 Other accrued expenses 532 128 Total accrued expenses and other current liabilities $ 1,872 $ 1,033 Note 7 – Commitments and Contingencies Litigations Claims and Assessments In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements. 7 ENVVENO MEDICAL CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) Note 8 – Stockholders’ Equity Equity Issuance The Company consummated a public offering on September 30, 2024 whereby it raised net proceeds of $ 13.3 million and issued 4.2 million shares of common stock, 0.1 million prefunded warrants and 0.3 million warrants to the underwriter. The weighted average exercise price of the warrants is $ 3.18 . Transaction fees in connection with the capital raise were $ 1.4 million. The warrants have a fair value of $ 1.0 million based on the Black Scholes method and the following weighted average input assumptions: Schedule of Estimated Fair values and Assumptions Contractual term in years 5 Volatility 102 % Risk free interest rate 4 % Dividend yield 0 % Stock Options Stock-based compensation is reflected in selling, general and administrative expenses in the accompanying condensed statements of operations and was $ 1.0 million and $ 1.1 million during the three months ended September 30, 2024 and 2023, respectively, and $ 3.1 million and $ 4.1 million during the nine months ended September 30, 2024 and 2023. As of September 30, 2024, there was $ 4.3 million of unrecognized stock-based compensation expense related to outstanding stock options that will be recognized over the weighted average remaining vesting period of 1.9 years. Note 9 – Net Loss per Share The following table summarizes the number of potentially dilutive common stock equivalents excluded from the calculation of diluted net loss per common share as of September 30, 2024 and 2023: Schedule of Dilutive Net Loss Per Common Share (In thousands) 2024 2023 September 30, (In thousands) 2024 2023 Shares of common stock issuable upon exercise of warrants 9,847 4,506 Shares of common stock issuable upon exercise of options 5,552 4,254 Potentially dilutive common stock equivalents excluded from diluted net loss per share 15,399 8,760 8