General and Administrative Expenses
General and administrative expenses were $6.1 million for the nine months ended September 30, 2020, compared to $4.1 million for the nine months ended September 30, 2019. The increase of $2.0 million was primarily due to operating as a public company when compared to the comparable prior year. The cost increases in 2020 included $1.2 million in director and officer insurance premiums, $0.5 million in board of director and other public company costs, $0.4 million in stock-based compensation, legal costs of $0.3 million and facility related costs of $0.2 million, offset in part by decreases in consulting, audit and accounting support costs of $0.6 million. Stock-based compensation costs during the nine month periods ended September 30, 2020 and 2019 were $0.5 million and $0.1 million, respectively.
Interest Income (Expense), net
Interest income for the nine month period ended September 30, 2020 was $34,000 related to cash deposits. The Company did not incur interest expenses during the nine months ended September 30, 2020 as there was no debt outstanding during the period.
Interest (expense) income, net during the nine month period ended September 30, 2019 included non-cash interest expense in connection with our convertible notes of $45,000 offset in part by interest income of $42,000 related to cash deposits. Non-cash interest expense during the nine month period ended September 30, 2019 consisted of interest on principal in the amount of $19,000 and costs attributed to the underlying beneficial conversion features of the convertible notes in the form of discount amortization in the amount of $26,000.
Other (Expense) Income, net
Other (expense) income, net was $(1,000) during the nine month period ended September 30, 2020, compared to a nominal amount during the nine month period ended September 30, 2019. The net change was due to a fluctuations in realized foreign currency exchange gains and losses period over period.
Liquidity and Capital Resources
Prior to the Merger, Private NeuroBo funded operations with proceeds from sales of preferred stock and proceeds from the issuance of convertible debt. Prior to the Merger, Private NeuroBo received net proceeds of $40.9 million from sales of preferred stock and $0.5 million from the sales of convertible notes which were converted into shares of Private NeuroBo common stock, effective immediately prior to the closing of the Merger.
ln April 2018, Private NeuroBo issued an aggregate of 4,801,020 shares of Series A preferred stock (as adjusted for the exchange ratio (“Exchange Ratio”) in connection with the Merger), at a purchase price of $3.50 per share, for aggregate gross consideration of approximately $16.8 million. On December 30, 2019, each share of Series A preferred stock then outstanding was converted into common stock in accordance with the terms of the Merger Agreement.
ln August 2019, Private NeuroBo issued an aggregate of 3,463,593 shares of Series B preferred stock (as adjusted for the Exchange Ratio) at a purchase price of $7.00 per share, for aggregate gross consideration of approximately $24.2 million. On December 30, 2019, each share of Series B preferred stock then outstanding was converted into common stock in accordance with the terms of the Merger Agreement.
On April 13, 2020, we entered into a Securities Purchase Agreement with an institutional investor, pursuant to which we sold in a registered direct offering (the “Registered Offering”) 750,000 shares of our common stock, at an offering price of $10.00 per share. The Registered Offering resulted in gross proceeds of $7.5 million, before deducting the placement agent’s fees and related offering expenses.