COHBAR, INC. As ofJune 30, 2022 , the Company had working capital and stockholders' equity of$20.4 million and$20.7 million , respectively. During the six months endedJune 30, 2022 , the Company incurred a net loss of$6.0 million and utilized cash of$5.9 million in its operating activities. Based on the cash and investments on hand as ofJune 30, 2022 of approximately$20.1 million , current budget assumptions and projected cash burn, the Company believes that it has sufficient capital to meet its operating expenses and obligations for the next twelve months from the date of this filing. However, if unanticipated difficulties or circumstances arise, the Company may require additional capital sooner to support its operations. If the Company is unable to raise additional capital whenever necessary, it may be forced to decelerate or curtail its research and development activities and/or other operations until such time as additional capital becomes available. Such limitation of the Company's activities would allow it to slow its rate of spending and extend its use of cash until additional capital is raised. There can be no assurance that such a plan would be successful. There is no assurance that additional financing will be available when needed or that the Company will be able to obtain such financing on reasonable terms. 5COHBAR, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (unaudited)
Note 3 - Summary of Significant Accounting Policies
Basis of Presentation
All amounts are presented in
Use of Estimates The preparation of financial statements in conformity withU.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at dates of the financial statements and the reported amounts of revenue and expenses during the periods. Actual results could differ from these estimates. The Company's significant estimates and assumptions include the fair value of financial instruments, stock-based compensation and the valuation allowance relating to the Company's deferred tax assets.
Concentrations of Credit Risk
The Company maintains deposits in a financial institution which is insured by theFederal Deposit Insurance Corporation ("FDIC"). At various times, the Company has deposits in this financial institution in excess of the amount insured by theFDIC . The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk. Investments Investments as ofJune 30, 2022 andDecember 31, 2021 consist ofU.S. Treasury Bills, which are classified as held-to-maturity, totaling$17.2 million and$21.3 million , respectively. The Company determines the appropriate balance sheet classification of its investments at the time of purchase and evaluates the classification at each balance sheet date. All of the Company'sU.S. Treasury Bills mature within the subsequent twelve months from the date of purchase. Unrealized gains and losses were de minimus. As ofJune 30, 2022 andDecember 31, 2021 , the carrying value of the Company'sU.S. Treasury Bills approximates their fair value due to their short-term maturities.
Common Stock Purchase Warrants
The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) provide the Company with a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement) provided that such contracts are indexed to the Company's own stock. The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company's control) or (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses classification of its common stock purchase warrants and other free-standing derivatives at each reporting date to determine whether a change in classification between assets, liabilities and equity is required. The Company's free-standing derivatives consist of warrants to purchase common stock that were issued in connection with its notes payable and a private offering. The Company evaluated these warrants to assess their proper classification using the applicable criteria enumerated underU.S. GAAP and determined that the common stock purchase warrants meet the criteria for equity classification in the accompanying balance sheets as ofJune 30, 2022 andDecember 31, 2021 . 6COHBAR, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (unaudited)
Note 3 - Summary of Significant Accounting Policies (continued)
Share-Based Payment
The Company accounts for share-based payments using the fair value method. For employees and directors, the fair value of the award is measured, as discussed below, on the grant date. For non-employees, fair value is generally valued based on the fair value of the services provided or the fair value of the equity instruments on the measurement date, whichever is more readily determinable. The Company accounts for performance-based share payments by measuring the fair value of the grant when the performance criteria are deemed satisfied and recognizing the associated expense at that time. The Company has granted stock options at exercise prices equal to the closing price of the Company's common stock as reported by The Nasdaq Capital Market, with input from management on the date of grant. Upon exercise of an option or warrant, the Company issues new shares of common stock out of its authorized shares. The weighted-average fair value of options and warrants has been estimated on the grant date or measurement date using the Black-Scholes pricing model. The fair value of each instrument is estimated on the grant date or measurement date utilizing certain assumptions for a risk-free interest rate, volatility and expected remaining lives of the awards. The risk-free interest rate used is the United States Treasury rate for the day of the grant having a term equal to the life of the equity instrument. The assumptions used in calculating the fair value of share-based payment awards represent management's best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and the Company uses different assumptions, the Company's stock-based compensation expense could be materially different in the future.
The weighted-average Black-Scholes assumptions are as follows:
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2022 2021 2022 2021
Expected life N/A 6.25 years 6.25 years 6.25 years
Risk free interest rate N/A 1.06 % 1.47 % 1.06 %
Expected volatility N/A 91 % 92 % 91 %
Expected dividend yield N/A 0 % 0 % 0 %
Forfeiture rate N/A 0 % 0 % 0 %
As of June 30, 2022 , total unrecognized stock option compensation expense was
$5.0 million , which will be recognized as those options vest over a period of
approximately four years. The amount of future stock option compensation expense
could be affected by any future option grants or by any option holders leaving
the Company before their grants are fully vested.
7
COHBAR, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(unaudited)
Note 3 - Summary of Significant Accounting Policies (continued)
Net Loss Per Share of Common Stock
Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net earnings per share reflects the potential dilution that could occur if securities or other instruments to issue common stock were exercised or converted into common stock. Potentially dilutive securities are excluded from the computation of diluted net loss per share as their inclusion would be anti-dilutive and consist of the following as ofJune 30, 2022 and
2021:
As of June 30,
2022 2021
Options 9,776,252 10,944,413
Warrants 35,475,075 19,368,918
Totals 45,251,327 30,313,331
Recent Accounting Pronouncements
There were no recently issued accounting standards not yet adopted which would have a material effect on the Company's consolidated financial statements or related disclosures.
Note 4 - Commitments and Contingencies
Litigation, Claims and Assessments
The Company may from time to time be party to litigation and subject to claims incident to the ordinary course of business. As the Company grows and gains prominence in the marketplace, it may become party to an increasing number of litigation matters and claims. The outcome of litigation and claims cannot be predicted with certainty, and the resolution of these matters could materially affect the Company's future results of operations, cash flows or financial position. The Company is not currently a party to any legal proceedings. Operating Leases
The Company is a party to (i) a lease agreement for laboratory space leased on a month-to month basis that is part of a shared facility inMenlo Park, California and (ii) a one-year lease agreement for office space inFairfield, New Jersey , which expires inSeptember 2022 . Rent expense was$0.1 million for each of the three-month periods endedJune 30, 2022 and 2021. Rent expense was$0.2 million for each of the six-month periods endedJune 30, 2022 and 2021.
Note 5 - Stockholders' Equity
Authorized Capital The Company has authorized the issuance and sale of up to 185.0 million shares of stock, consisting of 180.0 million shares of common stock having a par value of$0.001 and 5.0 million shares of Preferred Stock having a par value of$0.001 per share. As ofJune 30, 2022 andDecember 31, 2021 , there were no shares of Preferred Stock outstanding and there were no declared but unpaid dividends or undeclared dividend arrearages on any shares of the Company's capital stock. At the Company's annual meeting of stockholders inJune 2022 , the stockholders approved an amendment to the Company's certificate of incorporation to effect a reverse stock split by a ratio not to exceed 1:30, with the exact ratio to be set by the Company's board of directors in its sole discretion, and approved an amendment to the Company's certificate of incorporation to effectively increase the number of authorized shares of common stock of the Company. 8COHBAR, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (unaudited)
Note 5 - Stockholders' Equity (continued)
Stock Options The Company has an incentive stock plan, the Amended and Restated 2011 Equity Incentive Plan (the "2011 Plan"), and has granted stock options to employees, non-employee directors and consultants from the 2011 Plan. Options granted under the 2011 Plan may be Incentive Stock Options or Non-statutory Stock Options, as determined by the Administrator at the time of grant. As ofJune 30, 2022 , there were 4.4 million shares remaining available for issuance under the 2011 Plan. During the six months endedJune 30, 2022 , stock options to purchase 0.4 million shares of common stock were granted at an exercise price of$0.43 per share. The stock options have a term of ten years and are subject to vesting based on continuous service of the awardee over a period of four years. The stock options have an aggregate grant date fair value of$0.1 million . During the six months endedJune 30, 2022 , stock options to purchase 1.6 million shares of common stock expired, were cancelled and returned to the option pool for future issuance.
The Company recorded stock-based compensation as follows:
For the Three Months Ended
June 30 ,
For the Six Months Ended
2022 2021 2022 2021
Research and development $ 17,601 $ 119,627 $ 46,409 $ 176,730
General and administrative 417,355 837,931
844,970 1,101,272
Total $ 434,956 $ 957,558 $ 891,379 $ 1,278,002
The following table represents stock option activity for the six months ended
June 30, 2022 :
Weighted Average
Stock Options Exercise Price Fair Value Contractual Aggregate
Outstanding Exercisable
Outstanding Exercisable Vested Life (Years) Intrinsic Value
Balance -
1.71$ 1.58 $ 1.58 6.27 $ - Granted 375,000 - - - - - - Exercised - - - - - - - Cancelled (1,591,083 ) - - - - - - Balance - June 30, 2022 9,776,252 5,579,545 $ 1.64$ 1.46 $ 1.46 6.26 $ - 9 COHBAR, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (unaudited)
Note 5 - Stockholders' Equity (continued)
The following table summarizes information on stock options outstanding and
exercisable as of
Weighted
Average
Grant Price Weighted Average Total Number Remaining
From To Exercise Price Outstanding Exercisable Contractual Term
$ 0.26 $ 2.02 $ 1.17 7,923,085 3,830,440 7.65 years
$ 2.10 $ 4.60 $ 2.74 1,410,167 1,306,105 5.71 years
$ 5.30 $ 8.86 $ 6.44 443,000 443,000 5.85 years
Totals 9,776,252 5,579,545
Warrants
During the six months ended
The following table summarizes information on warrants outstanding as ofJune 30, 2022 : Weighted Average Warrants Exercise Price Fair Contractual Aggregate Value Life Intrinsic Outstanding Exercisable Outstanding Exercisable Vested (Years) Value Balance - December 31, 2021 35,634,075 35,629,908 $ 1.04$ 1.04 $ 0.53 4.38 $ - Granted - - - - - - - Exercised - - - - - - - Cancelled (159,000 ) - - - - - - Balance - June 30, 2022 35,475,075 35,475,075 $ 1.03$ 1.03 $ 0.61 3.90 $ -
Note 6 - At-the-Market Offering
InMay 2020 , the Company entered into an At-the-Market Offering Sales Agreement (the "ATM") withVirtu Americas, LLC as sales agent. During the six months endedJune 30, 2022 , the Company sold 0.6 million shares of its common stock under the ATM program for proceeds of$0.2 million , net of commissions. Note 7 - Non-Cash Expenses
The following table details the Company's non-cash expenses included in the accompanying condensed statements of operations:
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2022 2021 2022 2021
Operating expenses:
Stock-based compensation $ 434,956 $ 957,558 $ 891,379 $ 1,278,002
Depreciation & amortization 32,244 36,179
65,044 72,864
Subtotal $ 467,200 $ 993,737 $ 956,423 $ 1,350,866
Other expense:Amortization of debt discount - 10,407
8,350 23,339
Subtotal $ - $ 10,407 $ 8,350 $ 23,339
Total non-cash expenses $ 467,200 $ 1,004,144 $ 964,773 $ 1,374,205 10COHBAR, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (unaudited) Note 8 - Promissory Notes
During the six months ended
During the six months ended
Note 9 - Subsequent Events
Management has evaluated subsequent events to determine if events or transactions occurring through the date on which the condensed financial statements were issued require adjustment or disclosure in the Company's condensed financial statements.
Subsequent toJune 30, 2022 , the Company granted stock options to purchase a total of 0.2 million shares of the Company's common stock with an exercise price of$0.197 per share. The stock options have a term of ten years with vesting over a four-year period. Subsequent toJune 30, 2022 , the Company issued 168,138 shares of common stock at a price of$0.1488 per share pursuant to its Employee Stock Purchase Plan (the "ESPP"). Two officers of the Company participated in the ESPP.
Subsequent to
11
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis is based upon our financial statements as of the dates and for the periods presented in this section. You should read this discussion and analysis in conjunction with the financial statements and notes thereto found in Part I, Item 1 of this Form 10-Q and our financial statements and notes thereto included in our Annual Report on Form 10-K for the year endedDecember 31, 2021 (the "2021 Form 10-K"). All references to the second quarter mean the three-month period endedJune 30, 2022 , and all references to the first six months of 2022 and 2021 mean the six-month periods endedJune 30, 2022 and 2021, respectively. Unless the context otherwise requires, "CohBar ," "we," "us" and "our" refer toCohBar, Inc.
Special Note Regarding Forward-Looking Statements
This report, including the "Management's Discussion and Analysis of Financial
Condition and Results of Operations," contains forward-looking statements
regarding future events and our future results that are based on our current
expectations, estimates, forecasts and projections about our business, our
potential drug candidates, our capital resources and ability to fund our
operations, our results of operations, the industry in which we operate and the
beliefs and assumptions of our management. Words such as "expect," "anticipate,"
"target," "goal," "project," "would," "could," "intend," "plan," "believe,"
"seek" and "estimate," variations of these words, and similar expressions are
intended to identify those forward-looking statements. These forward-looking
statements are only predictions and are subject to risks, uncertainties and
assumptions that are difficult to predict. Therefore, actual results may differ
materially from those expressed in any forward-looking statements. Factors that
might cause or contribute to such differences include, but are not limited to,
those discussed in this report under the section entitled "Risk Factors" in
Item 1A of Part I of the 2021 Form 10-K, as supplemented or modified in our
quarterly reports on Form 10-Q. We undertake no obligation to revise or update
publicly any forward-looking statements for any reason, whether as a result of
new information, future events or otherwise, except as may be required by law.
Overview
We are a clinical stage biotechnology company leveraging the power of the
mitochondria and the peptides encoded in its genome to develop potential
breakthrough therapeutics targeting chronic and age-related diseases with
limited to no treatment options. Our novel approach is built on the key insights
of our founders that certain mitochondrially encoded peptides produce effects
that are not limited to local regulation within the mitochondria and may have
important roles to play in critical systemic biological pathways. Many of these
effects are quite distinct from traditional mitochondrial function such as
energy production and metabolism, involving diverse processes including
inflammation, fibrosis and cell signaling.
We believe we have achieved a leading position in exploring the mitochondrial
genome and its utility for the development of novel therapeutics, including
world-renowned expertise in mitochondrial biology, a broad intellectual property
estate with more than 65 patent applications filed, key opinion leaders and
disciplined drug discovery and development processes. Our proprietary processes
of identifying nucleic acid sequences encoding native peptides in the
mitochondrial genome, developing and optimizing novel analogs of these natural
mitochondrial derived peptides ("MDPs"), as well as developing and conducting
proprietary screens to identify and characterize the activities of these
peptides are referred to as our Mito+ platform. We are using our Mito+ platform
to identify and develop novel modified versions of natural peptides, which we
call analogs, to treat a variety of serious conditions, with a focus on chronic
diseases involving inflammation and fibrosis. We believe that the mitochondrial
genome may be transformative in the field of drug discovery and that our novel
peptide analogs may become a new and major class of drugs with broad therapeutic
application. We are currently advancing a pipeline of novel peptide analogs
through varying stages of development: CB5138-3 for idiopathic pulmonary
fibrosis ("IPF"), CB4211 for the treatment of nonalcoholic steatohepatitis
("NASH") and obesity, and several preclinical and discovery-stage programs.
12
Our Programs
? CB5138-3: In 2021, we nominated our second clinical candidate, CB5138-3, a
first-in-class therapeutic under development for the treatment of idiopathic
pulmonary fibrosis and other fibrotic diseases. Our CB5138-3 product candidate
has shown positive preclinical results, with significant anti-fibrotic and
anti-inflammatory properties in models of IPF. In addition, we believe CB5138-3
has the potential to provide a better safety and tolerability profile than
currently approved IPF drugs, which are poorly tolerated with significant
gastrointestinal and/or skin toxicity. When combined with our promising
preclinical data, we believe CB5138-3 could provide important clinical and
commercial advantages over current standard of care. This program is currently
in IND-enabling studies. To date, we have not seen any notable systemic
toxicity in rodent or non-human primate studies. Due to additional planned
formulation work, we plan to file an Investigational New Drug ("IND")
Application in the second half of 2023 and begin a first-in-human study shortly
thereafter.
? CB4211: Our most advanced clinical candidate, CB4211, is a first-in-class
therapeutic under development for the treatment of NASH and obesity. In August
2021, we released positive topline data from our Phase 1a/1b clinical study of
CB4211. The Phase 1b stage of this study was designed to assess the safety,
tolerability, and activity of CB4211 in obese subjects with nonalcoholic fatty
liver disease. The study met its primary endpoint as CB4211 was well-tolerated
and appeared safe with no serious adverse events. The evaluation of the
exploratory endpoints in the Phase 1b portion of the trial showed significant
reductions from baseline in key biomarkers of liver damage, ALT and AST, and in
glucose levels in the CB4211 group compared to placebo after four weeks of
treatment, with a trend towards lower body weight. We believe the positive
clinical data from our CB4211 trial is an important validation of our overall
approach to drug discovery, serving as a proof point that novel analogs of
peptides encoded in the mitochondrial genome can impact systemic biological
pathways in humans while having an attractive safety and tolerability profile.
We have been working to further improve the formulation for CB4211 and intend
to partner this program before moving forward into further clinical trials.
? CB5064 Analogs: Our discovery efforts have identified CB5064 Analogs, a family
of peptides that are agonists of the apelin receptor. By utilizing the
protective apelin signaling pathway, our CB5064 Analogs have the potential to
address a variety of unmet medical needs such as our initial target of Acute
Respiratory Distress Syndrome ("ARDS"). We believe our CB5064 Analogs could be
effective in ARDS from a variety of different causes, such as bacterial or
viral pneumonia, including COVID-19 associated ARDS. In a preclinical mouse
model of ARDS, treatment with CB5064 Analogs reduced fluid accumulation in the
lungs and a corresponding broad reduction in levels of key pro-inflammatory
cytokines secreted into the lung fluid, when compared to treatment with a
placebo control.
? Discovery Efforts: Our discovery efforts have resulted in the identification of
multiple unique and previously unidentified peptides encoded within the
mitochondrial genome. Many of these natural sequences and their novel analogs
have demonstrated various degrees of biological activity in cell based and/or
animal models relevant to a wide range of diseases. Our research efforts have
identified and focused on certain of these novel analogs that have demonstrated
greatest therapeutic potential. We plan to further explore these peptide
families for the potential treatment of a variety of diseases, subject to
resource availability and the requirements of our more-advanced programs.
Business Overview We have financed our operations primarily with proceeds from sales of our equity securities, including our initial public offering, private placements of our securities, public sales of our securities and the exercise of outstanding warrants and stock options, as well as through a debt offering. Since our inception throughJune 30, 2022 , our operations have been funded with an aggregate of approximately$97.3 million from the sale and issuance of equity instruments and debt. Since inception, we have incurred significant operating losses. Our net losses were$6.0 million and$9.3 million for the six months endedJune 30, 2022 and 2021, respectively. We incurred$1.0 million and$1.4 million in non-cash expenses during the six months endedJune 30, 2022 and 2021, respectively. Our net losses excluding non-cash expenses were$5.0 million and approximately$7.9 million for the six months endedJune 30, 2022 and 2021, respectively. As ofJune 30, 2022 , we had an accumulated deficit of$90.7 million . Although we anticipate incurring expenses consistent with prior periods, our net losses may fluctuate significantly from quarter to quarter and from year to year and are subject to the ongoing COVID-19 pandemic, the timing of our clinical trial
expenses and other factors.
13
Financial Operations Review
Revenue
To date, we have not generated any revenue from product sales and do not expect
to generate any revenue from the sale of products in the near future. In the
future, we will seek to generate revenue from product sales, either directly or
under any future licensing, development or similar relationship with a strategic
partner.
Research and Development Expenses
Research and development expenses consist primarily of costs incurred for our research activities, including our drug discovery efforts, and the development of our product candidates, which include:
? employee-related expenses including salaries, benefits and stock-based
compensation expense;
? expenses incurred under agreements with third parties, including contract
research organizations ("CROs") that conduct research and development and
preclinical activities on our behalf and the cost of consultants;
? the cost of laboratory equipment, supplies and manufacturing MDP and
proprietary analog test materials; and
? depreciation and other personnel-related costs associated with research and
product development.
We record all research and development expenses as incurred.
Our Research Programs
Our research and development programs include activities in support of our continuing evaluation of CB5138-3 in IPF and CB4211 in NASH and obesity, as well as the operation of our platform technology related to the discovery and development of additional novel analogs, evaluation of newly discovered natural sequences, design of novel improved analogs, evaluation of their therapeutic potential and optimization of their characteristics as potential drug development candidates. Depending on factors of capability, cost, efficiency and intellectual property rights, we conduct our research programs at our laboratory facility, or externally, pursuant to contractual arrangements with CROs or under collaborative arrangements with academic institutions. The success of our research programs and the timing of those programs and the possible development of research peptides into drug candidates is highly uncertain. As such, at this time, we cannot reasonably estimate or know the nature, timing or estimated costs of the efforts that will be necessary to complete research and development of a commercial drug. We are also unable to predict when, if ever, we will receive material net cash inflows from our operations. This is due to the numerous risks and uncertainties associated with developing medicines, including the uncertainty of:
? developing appropriate manufacturing processes and formulations;
? establishing an appropriate safety profile with toxicology studies;
? obtaining appropriate regulatory approval for conducting clinical trials;
? successfully designing, enrolling and completing clinical trials;
? receiving marketing approvals from applicable regulatory authorities;
? establishing commercial manufacturing capabilities or making arrangements with
third-party manufacturers;
? obtaining and enforcing patent and trade secret protection for our product
candidates;
? launching commercial sales of the products, if and when approved, whether alone
or in collaboration with others;
? receiving desirable payor reimbursement and formulary access for potential
drugs that are approved and commercially launched; and
? maintaining an acceptable safety profile of the products following approval.
14
A change in the outcome of any of these variables with respect to the development of any of our product candidates would significantly change the costs and timing associated with the development of that product candidate.
Research and development activities are central to our business model. Most of our potential drug candidates are in early stages of investigational research. Candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect research and development costs to increase for the foreseeable future as we incur costs related to our IND-enabling studies and potential initial clinical costs for our CB5138-3 program in addition to general program costs and the discovery, evaluation and optimization of novel analogs as potential drug candidates. However, we do not believe that it is possible at this time to accurately project total program-specific expenses through commercialization. There are numerous factors associated with the successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. Additionally, future commercial and regulatory factors beyond our control may impact our clinical development programs and plans.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in executive, finance and administrative functions. Other significant costs include legal fees relating to patent and corporate matters and fees for accounting and consulting services and directors' and officers' insurance. We anticipate that our general and administrative expenses will remain relatively constant in the year endingDecember 31, 2022 . Results of Operations The following table sets forth our results of operations for the periods presented. The period-to-period comparison of financial results is not necessarily indicative of financial results to be achieved in future periods. For The Three Months Ended June 30, Change 2022 2021 $ % Operating expenses: Research and development$ 1,186,900 $ 2,617,675 $ (1,430,775 ) -55 % General and administrative 1,556,785 2,584,364 (1,027,579 ) -40 % Total operating expenses$ 2,743,685 $ 5,202,039 $ (2,458,354 ) -47 %
Comparison of Three Months Ended
Research and development expenses were$1.2 million in the three months endedJune 30, 2022 compared to$2.6 million in the prior year period, a decrease of$1.4 million , or 55%. The decrease in research and development expenses was primarily due to a decrease of$0.7 million associated with the timing of our research programs focused on continuing the development of our peptides and a$0.7 million decrease in clinical trial costs due to the timing of those expenses. General and administrative expenses were$1.6 million in the three months endedJune 30, 2022 compared to$2.6 million in the prior year period, a decrease of$1.0 million , or 40%. The decrease in general and administrative expenses was primarily due to a$0.9 million decrease in compensation costs and stock-based compensation costs primarily related to the departure of our former CEO in the prior year period. For The Six Months Ended June 30, Change 2022 2021 $ % Operating expenses: Research and development$ 2,693,208 $ 5,272,447 $ (2,579,239 ) -49 % General and administrative 3,301,703 3,943,043 (641,340 ) -16 % Total operating expenses$ 5,994,911 $ 9,215,490 $ (3,220,579 ) -35 % 15
Comparison of Six Months Ended
Research and development expenses were$2.7 million in the six months endedJune 30, 2022 compared to$5.3 million in the prior year period, a decrease of$2.6 million , or 49%. The decrease in research and development expenses was primarily due to a decrease of$1.6 million associated with the timing of our research programs focused on continuing the development of our peptides and a$1.0 million decrease in clinical trial costs due to the timing of those expenses. Though we expect research and development expenses to increase in the coming quarters as we incur the costs of the IND-enabling activities and clinical trial for CB5138-3, and continue evaluating and optimizing other potential drug candidates, the extent of that increase is unknown at this time and subject to change based on successful outcomes of our studies, the amount of capital available to us and the uncertainties related to the COVID-19 pandemic. General and administrative expenses were$3.3 million in the six months endedJune 30, 2022 compared to$3.9 million in the prior year period, a decrease of$0.6 million , or 16%. The decrease in general and administrative expenses was primarily due to$0.6 million decrease in compensation costs and stock-based compensation costs primarily due to the departure of our former CEO in the
prior year period.
Liquidity and Capital Resources
As of
OnMay 27, 2020 , we entered into an At-the-Market Offering Sales Agreement (the "ATM") withVirtu Americas, LLC , as sales agent. In connection with the ATM, we filed a prospectus supplement onMarch 29, 2022 , pursuant to which we may currently sell shares of common stock with an aggregate offering price of up to$5.0 million .
During the six months ended
As ofJune 30, 2022 , we had working capital and stockholders' equity of$20.4 million and$20.7 million , respectively. During the six months endedJune 30, 2022 , we incurred a net loss of$6.0 million . Based on cash and investments on hand as ofJune 30, 2022 of approximately$20.1 million and our projected cash burn, we believe that we have sufficient capital to meet our operating expenses and obligations for the next twelve months from the date of this filing. However, if unanticipated difficulties or circumstances arise, we may require additional capital sooner to support our operations. If we are unable to raise additional capital whenever necessary, we may be forced to decelerate or curtail our research and development activities and/or other operations until such time as additional capital becomes available. Such limitation of our activities would allow us to slow our rate of spending and extend our use of cash until additional capital is raised. There can be no assurance that such a plan would be successful. There is no assurance that additional financing will be available when needed or that we will be able to obtain such financing on reasonable terms.
Cash Flows from Operating Activities
Net cash used in operating activities for the six months endedJune 30, 2022 and 2021 was$5.9 million and$8.5 million , respectively. The cash used in operations for the six months endedJune 30, 2022 was primarily due to our reported net loss of$6.0 million . The cash used in operations for the six months endedJune 30, 2021 was primarily due to our reported net loss of$9.3 million , partially offset by an increase in accounts payable of$1.1 million due to the timing of invoices received during the quarter.
Cash Flows from Investing Activities
Net cash provided by investing activities was$4.0 million in the six months endedJune 30, 2022 and was primarily due to the redemptions of investments during the period. Net cash provided by investing activities was$5.9 million in the six months endedJune 30, 2021 and was primarily due to the redemptions of investments during the period. 16
Cash Flows from Financing Activities
Net cash used in and provided by financing activities in the six months endedJune 30, 2022 and 2021 was$0.2 million and$1.3 million , respectively. Cash used in financing activities in the six months endedJune 30, 2022 was due to the repayment of promissory notes partially offset by the proceeds received from sales under our ATM program. Cash provided by financing activities in the six months endedJune 30, 2021 was due to proceeds received from the sales of common stock under our ATM program and the exercise of stock options and warrants partially offset by the repayment of promissory notes. Contractual Obligations We are a party to (i) a lease agreement for laboratory space leased on a month-to month basis that is part of a shared facility inMenlo Park, California and (ii) a one-year lease agreement for office space inFairfield, New Jersey , which expires inSeptember 2022 . Rent expense was$0.1 million for each of the three-month periods endedJune 30, 2022 and 2021. Rent expense was$0.2 million for each of the six-month periods endedJune 30, 2022 and 2021.
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