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Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Form 10-Q and our other filings with the SEC, before making an investment decision regarding our common stock.
+Added: there is no guarantee that even if we do engage in a strategic transaction that such strategic transaction will increase stockholder value;
if we are not able to successfully develop, obtain FDA approval for, and provide for the commercialization of rNAPc2 or Gencaro in a timely manner, we may not be able to continue our business operations;
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Risks Related to Our Business and Financial Condition
+Added: There is no guarantee that even if we do engage in a strategic transaction that such strategic transaction will increase stockholder value.
+Added: In April 2022, the Board of Directors established a Special Committee to evaluate strategic options, including transactions involving the merger or sale of all or part of our assets, and other alternatives with the goal of maximizing stockholder value .
+Added: We do not have a defined timeline for the strategic review process and the review may not result in any specific action or transaction.
+Added: We may never complete a strategic transaction, and in the event that we do complete a strategic transaction, implementation of such transactions may impair stockholder value or otherwise adversely affect our business.
+Added: Any such transaction may require us to incur non-recurring or other charges and may pose significant integration challenges and/or management and business disruptions, any of which could harm our results of operation and business prospects and impair the value of any such strategic transaction to our stockholders .
If we are not able to successfully develop, obtain FDA approval for, and provide for the commercialization of rNAPc2 or Gencaro in a timely manner, we may not be able to continue our business operations.
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We will receive regulatory approval for our product candidates only if we can demonstrate, in carefully designed and conducted clinical trials, that the product candidate is safe and effective.
−Removed: We do not know whether any future clinical trials for rNAPc2, Gencaro or any other product candidate will demonstrate sufficient safety and efficacy to obtain the requisite regulatory approvals or will result in marketable products.
+Added: We do not know whether any future clinical trials for rNAPc2, Gencaro or any other product candidate will demonstrate sufficient safety and efficacy to obtain the requisite regulatory approvals or will result
+Added: in marketable products.
rNAPc2 has never been tested for safety or efficacy in any pre-clinical COVID-19 models or any patients diagnosed with COVID-19.
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Even if we are able to fund continued development of rNAPc2, Gencaro or any of our other product candidates is approved, we expect that we will need to complete a strategic transaction or raise substantial additional funding through public or private equity or debt securities to successfully commercialize rNAPc2, Gencaro or any other product candidate.
−Removed: We believe our cash and cash equivalents as of September 30, 2021 will be sufficient to fund our operations through the end of fiscal year 2022.
+Added: We believe our cash and cash equivalents as of March 31, 2022 will be sufficient to fund our operations at the current levels through at least the middle of fiscal year 202 3 .
+Added: Our review of our strategic options may impact this projection .
Conducting a Phase 3 rNAPc2 clinical trial or the Phase 3 PRECISION-AF trial would likely require additional financing .
−Removed: On July 22, 2020, we entered into a new sales agreement with a placement agent to sell, from time to time, our common stock having an aggregate offering price of up to $54.0 million, in an “at the market offering.” As of September 30, 2021, we sold an aggregate of 9,928,272 shares of our common stock pursuant to the terms of such sales agreement for aggregate gross proceeds of approximately $54.0 million.
+Added: O n July 22, 20 20 , we entered into a new sales agreement with a placement agent to sell, from time to time, our common stock having an aggregate offering price of up to $ 54.0 million, in an “at the market offering .
+Added: ” As of December 30 , 2021 , we sold an aggregate of 9,928,272 shares of our common stock pursuant to the terms of such sales agreement for aggregate gross proceeds of approximately $ 54.0 million.
Net proceeds received in this offering were approximately $52.2 million, after deducting expenses for executing the “at the market offering” and commissions paid to the placement agent .
In April 2021, we amended the new sales agreement and have $50.0 million available for the offering under our prospectus to our registration statement on Form S-3 (No.
+Added: 333-254585) .
+Added: As of April 29, 2022, the amount available for the offering under the prospectus supplement is subject to the limitation of not selling a total value amount of shares exceeding more than on e-third of our public float in any 12-month period, which as of April 29, 2022 would have been approximately $10.1 million .
Sales of our common stock dilute the ownership interest of our stockholders and may cause the price per share of our common stock to decrease.
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We have put the potential initiation of the PRECISION-AF clinical trial on hold due to the ongoing COVID-19 pandemic and prioritizing the development of rNAPc2.
−Removed: I nitiation of the PRECISION-AF clinical trial will depend on receiving additional funding and an abatement of the COVID-19 pandemic to the point of being able to recruit patients for a cardiovascular clinical trial .
+Added: Initiation of the PRECISION-AF clinical trial will depend on receiving additional funding and an abatement of the COVID-19 pandemic to the point of being able to recruit patients for a cardiovascular clinical trial.
Our liquidity, and our ability to raise additional capital or complete any strategic transaction, depends on a number of factors, including, but not limited to, the following:
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Upon specific request by a clinical trial sponsor, the FDA will evaluate the protocol and respond to a sponsor’s questions regarding, among other things, primary efficacy endpoints, trial conduct and data analysis, within 45 days of receipt of the request.
−Removed: The FDA ultimately assesses whether the protocol design and planned analysis of the trial are acceptable to support regulatory approval of the product candidate with respect to the effectiveness of the indication studied.
+Added: The FDA ultimately assesses whether the protocol design and planned analysis of the trial are acceptable to support regulatory approval of the product candidate with respect to the
+Added: effectiveness of the indication studied.
All agreements and disagreements between the FDA and the sponsor regarding a SPA must be clearly documented in a SPA letter or the minutes of a meeting between the sponsor and the FDA.
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In future periods, if we do not meet the minimum stockholders’ equity, minimum closing bid price requirements, or any other listing requirements, we would be subject to delisting from the Nasdaq Capital Market.
−Removed: As of November 1, 2021, the closing price of our common stock was $2.70 per share, and the total market value of our listed securities was approximately $38.9 million.
−Removed: As of September 30, 2021, we had stockholders’ equity of $56.6 million.
−Removed: Our financial statements for the quarter ended September 30, 2021 were prepared assuming that we will continue as a going concern.
+Added: As of April 29, 2022, the closing price of our common stock was $2.37 per share, and the total market value of our listed securities was approximately $34.2 million.
+Added: As of March 31, 2022, we had stockholders’ equity of $47.9 million.
+Added: Our financial statements for the quarter ended March 31, 2022 were prepared assuming that we will continue as a going concern.
Our management has concluded that due to our need for additional capital, and the uncertainties surrounding our ability to raise such funding, there may be uncertainty about our ability to continue as a going concern in future years.
−Removed: Our financial statements for the quarter ended September 30, 2021 were prepared assuming that we will continue as a going concern.
+Added: Our financial statements for the quarter ended March 31, 2022 were prepared assuming that we will continue as a going concern.
The going concern basis of presentation assumes that we will continue in operation for the foreseeable future and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from our inability to continue as a going concern.
As of December 31, 2019, our management and our independent registered public accounting firm concluded that, due to our need for additional capital and the uncertainties surrounding our ability to raise such funding, substantial doubt existed as to our ability to continue as a going concern for a period from one year after our annual financial statements had been issued.
−Removed: We believe our cash and cash equivalents as of September 30, 2021 will be sufficient to fund our operations through the end of fiscal year 2022.
+Added: We believe our cash and cash equivalents as of March 31, 2022 will be sufficient to fund our operations at the current levels through at least the middle of fiscal year 2023.
+Added: Our review of our strategic options may impact this projection .
Conducting a Phase 3 rNAPc2 clinical trial or the Phase 3 PRECISION-AF trial would likely require additional financing .
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Delays in enrolling patients in any future clinical trials would also adversely affect our ability to generate any product, milestone and royalty revenues under collaboration agreements, if any, and could impose significant additional costs on us or on any future collaborators.
−Removed: Development beyond our control may impact our ability to enroll patients in an rNAPc2 (AB201) Phase 2b clinical trial, such as the development of vaccines for the SARS-CoV-2 virus or the development of other therapies for COVID-19 disease.
+Added: Development beyond our control, such as the development of vaccines for the SARS-CoV-2 virus or the development of other therapies for COVID-19 disease, may impact our ability to enroll patients in any future rNAPc2 (AB201) clinical trials.
+Added: Enrollment for the rNAPc2 (AB201) Phase 2b clinical trial was slower than expected.
The GENETIC-AF clinical trial required that we identify and enroll a large number of patients with the condition under investigation and the trial enrolled only those patients having a specific genotype, and certain patients who have or are willing to have a Medtronic device implanted for monitoring and recording AFB data.
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Moreover, such delays or increased costs or failures could adversely affect our business, operating results and prospects for commercializing the genetic test.
−Removed: If a third-party diagnostics provider responsible for the genetic test associated with Gencarp or certain of its third-party suppliers fails to comply with ongoing FDA or other foreign regulatory authority requirements, or if there are unanticipated problems with the genetic test, these products could be subject to restrictions or withdrawal from use in a trial or from the market.
+Added: If a third-party diagnostics provider responsible for the genetic test associated with Gencaro or certain of its third-party suppliers fails to comply with ongoing FDA or other foreign regulatory authority requirements, or if there are unanticipated problems with the genetic test, these products could be subject to restrictions or withdrawal from use in a trial or from the market.
Any diagnostic for which a third-party diagnostics provider obtains clearance or approval, and the manufacturing processes, reporting requirements, post-approval clinical data and promotional activities for such product, will be subject to continued regulatory review, oversight and periodic inspections by the FDA and other domestic and foreign regulatory bodies.
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An adverse outcome could subject us to significant liabilities to third parties, require disputed rights to be licensed from third parties or require us to cease using such technology.
−Removed: We own the clinical development program of rNAPc2, including Phase 2 clinical trials.
+Added: We own the clinical development program of rNAPc2, including Phase 2b clinical trials.
If rNAPc2 is successfully developed, we believe it will have intellectual property protection, including 12 years of market exclusivity as an innovative biologic product under FDA law in the United States, 10 years data protection exclusivity in the EU, and potentially patent protection in addition to this.
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Sales in the public market of substantial amounts of our common stock could depress prevailing market prices of our common stock.
−Removed: As of September 30, 2021, approximately 14.4 million shares of common stock were outstanding, and all of these shares are freely transferable without restriction or further registration under the Securities Act of 1933, as amended, or the Securities Act, except for shares held by our directors, officers and other affiliates and unregistered shares held by non-affiliates.
+Added: As of March 31, 2022, approximately 14.4 million shares of common stock were outstanding, and all of these shares are freely transferable without restriction or further registration under the Securities Act of 1933, as amended, or the Securities Act, except for shares held by our directors, officers and other affiliates and unregistered shares held by non-affiliates.
The sale of these additional shares, or the perception that such sales may occur, could depress the market price of our common stock.
−Removed: As of September 30 , 202 1 , approximately 133,000 shares of our common stock were issuable upon the exercise of outstanding warrants.
+Added: As of March 31, 2022 , approximately 133,000 shares of our common stock were issuable upon the exercise of outstanding warrants.
Once a warrant is exercised, if the shares of our common stock issued upon the exercise of any such warrant are not available for sale in the open market without further registration under the Securities Act, then the holder can arrange for the resale of shares either by invoking any applicable registration rights, causing the shares to be registered under the Securities Act and thus freely transferable, or by relying on an exemption to the Securities Act.
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If these registration rights, or similar registration rights that may apply to securities we may issue in the future, are exercised, it could result in additional sales of our common stock in the market, which may have an adverse effect on our stock price.
−Removed: As of September 30, 2021, there were approximately 641,000 shares of our common stock which may be issued upon the exercise of outstanding stock options, and we anticipate that we will continue to issue stock option awards to our employees and consultants in the fiscal year ended December 31, 2021 and thereafter.
+Added: As of March 31, 2022, there were approximately 869,000 shares of our common stock which may be issued upon the exercise of outstanding stock options, and we anticipate that we will continue to issue stock option awards to our employees and consultants in the fiscal year ended December 31, 2022 and thereafter.
If and when these options are exercised, such shares will be available for sale in the open market without further registration under the Securities Act.
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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.