What changed in this filing

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Item 1. Financial Statements

2022-08-02 compared with 2022-05-02 · 37 added, 34 removed, 244 unchanged (23% of the section changed)

22 unchanged sentences

100 million shares authorized

at March 31, 2022 and December 31, 2021;

at June 30, 2022 and December 31, 2021;

shares issued and outstanding at

March 31, 2022 and December 31, 2021

June 30, 2022 and December 31, 2021

Additional paid-in capital

6 unchanged sentences

Three Months Ended

(in thousands, except share

and per share amounts)

Six Months Ended

(in thousands, except share and per share amounts)

Costs and expenses:

26 unchanged sentences

Balance, March 31, 2022

Share-based compensation

Balance, June 30, 2022

See accompanying Notes to Financial Statements

1 unchanged sentence

STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(in thousands)

26 unchanged sentences

transactions:

Leased assets obtained in exchange for operating lease liabilities

Purchases of property and equipment in accrued liabilities

8 unchanged sentences

The Company’s lead product candidates are rNAPc2 (AB201) as a potential treatment for COVID-19, the disease caused by SARS-CoV-2 virus, and potentially other viral diseases and Gencaro™ (bucindolol hydrochloride) for the treatment of atrial fibrillation (AF) in patients with chronic heart failure (HF).

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 the Company’s assets, and other alternatives with the goal of maximizing stockholder value.

In April 2022, the Board of Directors established a Special Committee and, in May, retained Ladenburg Thalmann & Co.

to evaluate strategic options, including transactions involving the merger or sale of all or part of the Company’s assets, and other alternatives with the goal of maximizing stockholder value.

The Company does not have a defined timeline for the strategic review process and the review may not result in any specific action or transaction .

7 unchanged sentences

The Company has historically funded its operations through issuances of common and preferred stock.

The Company believes that its current cash and cash equivalents as of March 31, 2022 will be sufficient to fund its operations at the current levels through at least the middle of fiscal year 2023.

The Company believes that its current cash and cash equivalents as of June 30, 2022 will be sufficient to fund its operations at the current levels through at least the end of fiscal year 2023.

The Company’s review of its strategic options may impact this projection.

18 unchanged sentences

In the opinion of management, these financial statements include all normal and recurring adjustments considered necessary for a fair presentation of these interim financial statements.

The results of operations for the three months ended March 31, 2022 are not necessarily indicative of results expected for the full year ending December 31, 2022.

The results of operations for the six months ended June 30, 2022 are not necessarily indicative of results expected for the full year ending December 31, 2022.

The Company has generated no revenue to date and its activities have consisted of seeking regulatory approval, research and development, exploring strategic alternatives for further developing and commercializing rNAPc2 and Gencaro, and raising capital.

9 unchanged sentences

If the Company had comprehensive gains (losses), they would be reflected in the statement of operations and comprehensive loss and as a separate component in the statement of stockholders’ equity.

There were no elements of comprehensive loss during the three months ended March 31, 2022 and 2021.

There were no elements of comprehensive loss during the three and six months ended June 30, 2022 and 2021.

The Company determines if an arrangement is a lease at inception.

Operating leases are included in right-of-use (ROU) asset – operating and lease obligations are included in accrued expenses and other liabilities and operating lease liability on the Company’s March 31, 2022 and December 31, 2021 balance sheets.

Operating leases are included in right-of-use (ROU) asset – operating and lease obligations are included in accrued expenses and other liabilities and operating lease liability on the Company’s June 30, 2022 and December 31, 2021 balance sheets.

ROU lease assets represent the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligation to make lease payments arising from the lease.

14 unchanged sentences

The Company’s potentially dilutive shares include stock options and warrants for common stock .

Because the Company reported a net loss for the three months ended March 31, 2022 and 2021, all potentially dilutive shares of common stock have been excluded from the computation of the dilutive net loss per share for all periods presented.

Because the Company reported a net loss for the three and six months ended June 30, 2022 and 2021, all potentially dilutive shares of common stock have been excluded from the computation of the dilutive net loss per share for all periods presented.

Such potentially dilutive shares of common stock consist of the following:

3 unchanged sentences

(3) Fair Value Disclosures

There were no marketable securities as of March 31, 2022 or December 31, 2021.

There were no marketable securities as of June 30, 2022 or December 31, 2021.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price).

9 unchanged sentences

The Company does not have any Level 3 assets or liabilities.

As of March 31, 2022 and December 31, 2021, the Company had $ 49.1 million and $ 53.3 million, respectively, of cash equivalents consisting of money market funds with original maturities of 90 days or less.

As of June 30, 2022 and December 31, 2021, the Company had $ 46.4 million and $ 53.3 million, respectively, of cash equivalents consisting of money market funds with original maturities of 90 days or less.

The Company has the ability to liquidate these investments without restriction.

The Company determines fair value for these money market funds with Level 1 inputs through quoted market prices.

There were no transfers of assets between fair value hierarchy levels during the three-month period ended March 31, 2022.

There were no transfers of assets between fair value hierarchy levels during the six-month period ended June 30, 2022.

Fair Value of Other Financial Instruments

3 unchanged sentences

Estimated Life

March 31, 2022

Computer equipment

4 unchanged sentences

Property and equipment, net

For the three months ended March 31, 2022 and 2021, depreciation and amortization expense was $ 5,000 and $ 3,000 , respectively.

For the six months ended June 30, 2022 and 2021, depreciation and amortization expense was $ 11,000 and $ 6,000 , respectively.

(5) Related Party Arrangements

2 unchanged sentences

Funding of any unrestricted research grants is contingent upon the Company’s financial condition, and can be deferred or terminated at the Company’s discretion.

Total expense under these arrangements for the three months ended March 31, 2022 and 2021 was $ 108,000 and $ 107,000 respectively.

Total expense under these arrangements for the six months ended June 30, 2022 and 2021 was $ 216,000 and $ 223,000 respectively.

(6) Commitments and Contingencies

13 unchanged sentences

In addition, common area maintenance charges are based on actual costs incurred and are a non-lease component that is not included in the lease obligation.

Future minimum commitments due under the October 2020 and 2021 Lease agreements as of March 31, 2022 are as follows (in thousands):

Future minimum commitments due under the October 2020 and 2021 Lease agreements as of June 30, 2022 are as follows (in thousands):

Remainder of 2022

3 unchanged sentences

Operating lease liability, net of current portion

Rent expense, which is included in general and administrative expense, for the three months ended March 31, 2022 and 2021 was $ 31,000 and $ 22,000 , respectively.

As of March 31, 2022, the lease liability was $ 460,000 , and the current portion is included in accrued expenses and other liabilities and the non-current portion is in operating lease liability, net of current portion in the accompanying balance sheet.

Cash paid for amounts included in the measurement of lease liabilities and the operating cash flows from operating leases for the three months ended March 31, 2022 and 2021 were $ 32,000 and $ 7,000 , respectively.

The weighted-average remaining lease term for the operating lease as of March 31, 2022 is 4.5 years.

Rent expense, which is included in general and administrative expense, for the six months ended June 30, 2022 and 2021 was $ 63,000 and $ 47,000 , respectively.

As of June 30, 2022, the lease liability was $ 435,000 , and the current portion is included in accrued expenses and other liabilities and the non-current portion is in operating lease liability, net of current portion in the accompanying balance sheet.

Cash paid for amounts included in the measurement of lease liabilities and the operating cash flows from operating leases for the six months ended June 30, 2022 and 2021 were $ 65,000 and $ 29,000 , respectively.

The weighted-average remaining lease term for the operating lease as of June 30, 2022 is 4.3 years.

The discount rate for the operating lease is 7 %.

6 unchanged sentences

The term of the Agreement extends to the date of expiration of the last to expire of any of the assigned patents.

(7) Equity Financings and Warrants

(7) Equity Financings

At the Market Equity Financing

11 unchanged sentences

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 one-third of the Company’s public float in any 12-month period.

Warrants to purchase shares of common stock were previously granted as part of various financing and business agreements.

All outstanding warrants were recorded in additional paid-in capital at their estimated fair market value at the date of grant using a Black-Scholes option-pricing model.

As of March 31, 2022, these warrants, by year of expiration, are summarized below:

Year of Expiration

Weighted Average

Exercise Price

(8) Share-based Compensation

For the three month periods ended March 31, 2022 and 2021, the Company recognized the following non-cash, share-based compensation expense in the statements of operations (in thousands):

Ended March 31,

For the three and six month periods ended June 30, 2022 and 2021, the Company recognized the following non-cash, share-based compensation expense in the statements of operations (in thousands):

Ended June 30,

Research and development

General and administrative

Stock option transactions for the three month period ended March 31, 2022 under the Company’s stock incentive plans were as follows:

Stock option transactions for the six month period ended June 30, 2022 under the Company’s stock incentive plans were as follows:

Weighted Average Exercise Price

1 unchanged sentence

Forfeited and cancelled

Options outstanding at March 31, 2022

Options exercisable at March 31, 2022

Options outstanding at June 30, 2022

Options exercisable at June 30, 2022

Options vested and expected to vest

4 unchanged sentences

The Company believes its tax filing positions and deductions related to tax periods subject to examination will be sustained upon audit and, therefore, has no reserve for uncertain tax positions.

(10) Subsequent Event

In July 2022, the Company implemented a strategic reduction of the workforce by approximately 67 %, or 12 employees.

Personnel reductions were primarily focused in research and development and general and administrative functions.

The restructuring was a result of the Company’s decision to manage operating costs and expenses.

In July, the Company recorded total restructuring charges of approximately $ 790,000 , of which $ 490,000 and $ 300,000 were recognized in research and development and general and administrative expenses, respectively, in connection with the restructuring, all in the form of one-time termination benefits.

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