0001582554 false Q3 --12-31 0001582554
2022-01-01 2022-09-30 0001582554 2022-10-31 0001582554 2022-09-30
0001582554 2021-12-31 0001582554 2022-07-01 2022-09-30 0001582554
2021-07-01 2021-09-30 0001582554 2021-01-01 2021-09-30 0001582554
us-gaap:PreferredStockMember
MTNB:RedeemableConvertiblePreferredStockBMember 2021-12-31
0001582554 us-gaap:CommonStockMember 2021-12-31 0001582554
us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0001582554
us-gaap:RetainedEarningsMember 2021-12-31 0001582554
us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-12-31
0001582554 us-gaap:PreferredStockMember
MTNB:RedeemableConvertiblePreferredStockBMember 2022-06-30
0001582554 us-gaap:CommonStockMember 2022-06-30 0001582554
us-gaap:AdditionalPaidInCapitalMember 2022-06-30 0001582554
us-gaap:RetainedEarningsMember 2022-06-30 0001582554
us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-06-30
0001582554 2022-06-30 0001582554 us-gaap:PreferredStockMember
MTNB:RedeemableConvertiblePreferredStockBMember 2020-12-31
0001582554 us-gaap:CommonStockMember 2020-12-31 0001582554
us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0001582554
us-gaap:RetainedEarningsMember 2020-12-31 0001582554
us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-12-31
0001582554 2020-12-31 0001582554 us-gaap:PreferredStockMember
MTNB:RedeemableConvertiblePreferredStockBMember 2021-06-30
0001582554 us-gaap:CommonStockMember 2021-06-30 0001582554
us-gaap:AdditionalPaidInCapitalMember 2021-06-30 0001582554
us-gaap:RetainedEarningsMember 2021-06-30 0001582554
us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-06-30
0001582554 2021-06-30 0001582554 us-gaap:PreferredStockMember
MTNB:RedeemableConvertiblePreferredStockBMember 2022-01-01
2022-09-30 0001582554 us-gaap:CommonStockMember 2022-01-01
2022-09-30 0001582554 us-gaap:AdditionalPaidInCapitalMember
2022-01-01 2022-09-30 0001582554 us-gaap:RetainedEarningsMember
2022-01-01 2022-09-30 0001582554
us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-01-01
2022-09-30 0001582554 us-gaap:PreferredStockMember
MTNB:RedeemableConvertiblePreferredStockBMember 2022-07-01
2022-09-30 0001582554 us-gaap:CommonStockMember 2022-07-01
2022-09-30 0001582554 us-gaap:AdditionalPaidInCapitalMember
2022-07-01 2022-09-30 0001582554 us-gaap:RetainedEarningsMember
2022-07-01 2022-09-30 0001582554
us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-07-01
2022-09-30 0001582554 us-gaap:PreferredStockMember
MTNB:RedeemableConvertiblePreferredStockBMember 2021-01-01
2021-09-30 0001582554 us-gaap:CommonStockMember 2021-01-01
2021-09-30 0001582554 us-gaap:AdditionalPaidInCapitalMember
2021-01-01 2021-09-30 0001582554 us-gaap:RetainedEarningsMember
2021-01-01 2021-09-30 0001582554
us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-01-01
2021-09-30 0001582554 us-gaap:PreferredStockMember
MTNB:RedeemableConvertiblePreferredStockBMember 2021-07-01
2021-09-30 0001582554 us-gaap:CommonStockMember 2021-07-01
2021-09-30 0001582554 us-gaap:AdditionalPaidInCapitalMember
2021-07-01 2021-09-30 0001582554 us-gaap:RetainedEarningsMember
2021-07-01 2021-09-30 0001582554
us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-07-01
2021-09-30 0001582554 us-gaap:PreferredStockMember
MTNB:RedeemableConvertiblePreferredStockBMember 2022-09-30
0001582554 us-gaap:CommonStockMember 2022-09-30 0001582554
us-gaap:AdditionalPaidInCapitalMember 2022-09-30 0001582554
us-gaap:RetainedEarningsMember 2022-09-30 0001582554
us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-09-30
0001582554 us-gaap:PreferredStockMember
MTNB:RedeemableConvertiblePreferredStockBMember 2021-09-30
0001582554 us-gaap:CommonStockMember 2021-09-30 0001582554
us-gaap:AdditionalPaidInCapitalMember 2021-09-30 0001582554
us-gaap:RetainedEarningsMember 2021-09-30 0001582554
us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-09-30
0001582554 2021-09-30 0001582554 srt:ManagementMember 2022-09-30
0001582554 srt:ManagementMember 2022-01-01 2022-09-30 0001582554
us-gaap:USTreasurySecuritiesMember 2022-09-30 0001582554
us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2022-09-30
0001582554 us-gaap:CorporateDebtSecuritiesMember 2022-09-30
0001582554 us-gaap:USStatesAndPoliticalSubdivisionsMember
2022-09-30 0001582554
us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2021-12-31
0001582554 us-gaap:CorporateDebtSecuritiesMember 2021-12-31
0001582554 us-gaap:USStatesAndPoliticalSubdivisionsMember
2021-12-31 0001582554 us-gaap:FairValueInputsLevel1Member
us-gaap:USTreasurySecuritiesMember 2022-09-30 0001582554
us-gaap:FairValueInputsLevel2Member
us-gaap:USTreasurySecuritiesMember 2022-09-30 0001582554
us-gaap:FairValueInputsLevel3Member
us-gaap:USTreasurySecuritiesMember 2022-09-30 0001582554
us-gaap:FairValueInputsLevel1Member
us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2022-09-30
0001582554 us-gaap:FairValueInputsLevel2Member
us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2022-09-30
0001582554 us-gaap:FairValueInputsLevel3Member
us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2022-09-30
0001582554 us-gaap:FairValueInputsLevel1Member
us-gaap:CorporateDebtSecuritiesMember 2022-09-30 0001582554
us-gaap:FairValueInputsLevel2Member
us-gaap:CorporateDebtSecuritiesMember 2022-09-30 0001582554
us-gaap:FairValueInputsLevel3Member
us-gaap:CorporateDebtSecuritiesMember 2022-09-30 0001582554
us-gaap:FairValueInputsLevel1Member 2022-09-30 0001582554
us-gaap:FairValueInputsLevel2Member 2022-09-30 0001582554
us-gaap:FairValueInputsLevel3Member 2022-09-30 0001582554
us-gaap:FairValueInputsLevel1Member
us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2021-12-31
0001582554 us-gaap:FairValueInputsLevel2Member
us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2021-12-31
0001582554 us-gaap:FairValueInputsLevel3Member
us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2021-12-31
0001582554 us-gaap:FairValueInputsLevel1Member
us-gaap:CorporateDebtSecuritiesMember 2021-12-31 0001582554
us-gaap:FairValueInputsLevel2Member
us-gaap:CorporateDebtSecuritiesMember 2021-12-31 0001582554
us-gaap:FairValueInputsLevel3Member
us-gaap:CorporateDebtSecuritiesMember 2021-12-31 0001582554
us-gaap:FairValueInputsLevel1Member
us-gaap:USStatesAndPoliticalSubdivisionsMember 2021-12-31
0001582554 us-gaap:FairValueInputsLevel2Member
us-gaap:USStatesAndPoliticalSubdivisionsMember 2021-12-31
0001582554 us-gaap:FairValueInputsLevel3Member
us-gaap:USStatesAndPoliticalSubdivisionsMember 2021-12-31
0001582554 us-gaap:FairValueInputsLevel1Member 2021-12-31
0001582554 us-gaap:FairValueInputsLevel2Member 2021-12-31
0001582554 us-gaap:FairValueInputsLevel3Member 2021-12-31
0001582554 us-gaap:EquipmentMember 2022-09-30 0001582554
us-gaap:EquipmentMember 2021-12-31 0001582554
us-gaap:LeaseholdImprovementsMember 2022-09-30 0001582554
us-gaap:LeaseholdImprovementsMember 2021-12-31 0001582554
us-gaap:LeaseholdImprovementsMember 2022-01-01 2022-09-30
0001582554 us-gaap:EquipmentMember 2022-01-01 2022-09-30 0001582554
us-gaap:LeaseholdImprovementsMember 2021-01-01 2021-09-30
0001582554 us-gaap:EquipmentMember 2021-01-01 2021-09-30 0001582554
MTNB:BioNTechAgreementMember 2022-09-30 0001582554
MTNB:GenentechAgreementMember 2022-09-30 0001582554
MTNB:GenentechAgreementMember 2021-12-31 0001582554
MTNB:CFFAgreementMember 2022-09-30 0001582554
MTNB:CFFAgreementMember 2021-12-31 0001582554
MTNB:BioNTechAgreementMember 2022-04-07 2022-04-08 0001582554
MTNB:BioNTechAgreementMember 2022-04-08 0001582554
MTNB:BioNTechAgreementMember 2022-01-01 2022-09-30 0001582554
MTNB:BioNTechAgreementMember 2022-07-01 2022-09-30 0001582554
MTNB:CFFAgreementMember MTNB:CysticFibrosisFoundationMember
2020-11-19 0001582554 MTNB:CFFAgreementMember
MTNB:CysticFibrosisFoundationMember 2020-11-18 2020-11-19
0001582554 MTNB:CysticFibrosisFoundationMember
MTNB:CFFAgreementMember 2021-10-01 2021-12-31 0001582554
us-gaap:AccruedLiabilitiesMember MTNB:CFFAgreementMember 2022-09-30
0001582554 us-gaap:AccruedLiabilitiesMember MTNB:CFFAgreementMember
2021-12-31 0001582554 MTNB:GenentechFeasibilityStudyAgreementMember
MTNB:GenentechMember 2019-12-11 2019-12-12 0001582554
MTNB:RestatedExclusiveLicenseAgreementMember
MTNB:UnregisteredSharesMember MTNB:RutgersMember 2022-02-07
2022-02-08 0001582554 MTNB:RestatedExclusiveLicenseAgreementMember
2022-02-07 2022-02-08 0001582554
MTNB:RestatedExclusiveLicenseAgreementMember 2022-02-08 0001582554
MTNB:BTIGLLCMember 2021-01-01 2021-09-30 0001582554
MTNB:BTIGLLCMember 2021-09-30 0001582554 srt:MinimumMember
2022-09-30 0001582554 srt:MaximumMember 2022-09-30 0001582554
2021-01-01 2021-12-31 0001582554 MTNB:StockOptionsMember 2022-01-01
2022-09-30 0001582554 MTNB:StockOptionsMember 2021-01-01 2021-09-30
0001582554 us-gaap:WarrantMember 2022-01-01 2022-09-30 0001582554
us-gaap:WarrantMember 2021-01-01 2021-09-30 0001582554
MTNB:TwoThousandThirteenEquityCompensationPlanMember 2022-09-30
0001582554 MTNB:TwoThousandThirteenEquityCompensationPlanMember
2022-01-01 2022-09-30 0001582554 2022-01-02 0001582554
us-gaap:ResearchAndDevelopmentExpenseMember 2022-07-01 2022-09-30
0001582554 us-gaap:ResearchAndDevelopmentExpenseMember 2021-07-01
2021-09-30 0001582554 us-gaap:ResearchAndDevelopmentExpenseMember
2022-01-01 2022-09-30 0001582554
us-gaap:ResearchAndDevelopmentExpenseMember 2021-01-01 2021-09-30
0001582554 us-gaap:GeneralAndAdministrativeExpenseMember 2022-07-01
2022-09-30 0001582554 us-gaap:GeneralAndAdministrativeExpenseMember
2021-07-01 2021-09-30 0001582554
us-gaap:GeneralAndAdministrativeExpenseMember 2022-01-01 2022-09-30
0001582554 us-gaap:GeneralAndAdministrativeExpenseMember 2021-01-01
2021-09-30 0001582554 MTNB:ThermoFisherMember 2022-07-01 2022-09-30
0001582554 MTNB:ThermoFisherMember 2022-01-01 2022-09-30 0001582554
MTNB:ThermoFisherMember 2022-09-30 iso4217:USD xbrli:shares
iso4217:USD xbrli:shares MTNB:Segment utr:sqft xbrli:pure
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
☒ |
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
For
the quarterly period ended
September 30, 2022
OR
☐ |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
For
the transition period from
to
Commission
File Number:
001-38022

MATINAS BIOPHARMA HOLDINGS, INC.
(Exact
name of registrant as specified in its charter)
Delaware |
|
No.
46-3011414 |
(State
or other jurisdiction of |
|
(I.R.S.
Employer |
incorporation
or organization) |
|
Identification
No.) |
1545 Route 206 South,
Suite 302
Bedminster,
New Jersey
07921
(Address
of principal executive offices) (Zip Code)
908-484-8805
(Registrant’s
telephone number, including area code)
(Former
Name, Former Address and Former Fiscal Year,
if
Changed Since Last Report)
Securities
registered pursuant to Section 12(b) of the Act:
Title
of Each Class |
|
Trading
Symbol(s) |
|
Name
of Each Exchange on Which Registered |
Common Stock |
|
MTNB |
|
NYSE American |
Indicate
by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated filer,” “smaller reporting
company,” and “emerging growth company” in Rule 12b-2 of the
Exchange Act.
Large
accelerated filer |
☐ |
|
Accelerated
filer |
☐ |
|
|
|
|
|
Non-accelerated Filer |
☒ |
|
Smaller
reporting company |
☒ |
|
|
|
|
|
|
|
|
Emerging
growth company |
☐ |
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes ☐
No ☒
As of
October 31, 2022, there were
216,864,526 shares of the registrant’s common stock, $0.0001
par value, outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
None.
MATINAS
BIOPHARMA HOLDINGS, INC.
Form
10-Q
Quarter
Ended September 30, 2022
Table
of Contents
Matinas BioPharma Holdings, Inc.
Condensed
Consolidated Balance Sheets
The
accompanying notes are an integral part of these condensed
consolidated financial statements
Matinas
BioPharma Holdings, Inc.
Condensed
Consolidated Statements of Operations and Comprehensive
Loss
Unaudited
The
accompanying notes are an integral part of these condensed
consolidated financial statements
Matinas
BioPharma Holdings, Inc.
Condensed
Consolidated Statements of Stockholders’ Equity
Unaudited
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Loss |
|
|
Equity |
|
|
|
Common Stock |
|
|
Additional
Paid
– in
|
|
|
Accumulated |
|
|
Accumulated
Other
Comprehensive
|
|
|
Total
Stockholders’
|
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Loss |
|
|
Equity |
|
Balance, June 30, 2022 |
- |
|
216,864,526 |
|
|
$ |
21,685 |
|
|
$ |
187,116,333 |
|
|
$ |
(143,535,065 |
) |
|
$ |
(754,416 |
) |
|
$ |
42,848,537 |
|
Stock-based
compensation |
- |
|
- |
|
|
|
- |
|
|
|
1,413,070 |
|
|
|
- |
|
|
|
- |
|
|
|
1,413,070 |
|
Other
comprehensive loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(181,152 |
) |
|
|
(181,152 |
) |
Net
loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(5,461,592 |
) |
|
|
- |
|
|
|
(5,461,592 |
) |
Balance, September 30, 2022 |
- |
|
216,864,526 |
|
|
$ |
21,685 |
|
|
$ |
188,529,404 |
|
|
$ |
(148,996,657 |
) |
|
$ |
(935,568 |
) |
|
$ |
38,618,864 |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Income (loss) |
|
|
Equity |
|
|
|
Redeemable
Convertible
Preferred
Stock B
|
|
|
Common Stock |
|
|
Additional
Paid
- in
|
|
|
Accumulated |
|
|
Accumulated
Other
Comprehensive
|
|
|
Total
Stockholders’
|
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Income (loss) |
|
|
Equity |
|
Balance, December 31, 2020 |
|
|
4,361 |
|
|
$ |
3,797,705 |
|
|
|
200,113,431 |
|
|
$ |
20,010 |
|
|
$ |
167,192,003 |
|
|
$ |
(107,507,193 |
) |
|
$ |
228,172 |
|
|
$ |
63,730,697 |
|
Stock-based
compensation |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3,132,351 |
|
|
|
- |
|
|
|
- |
|
|
|
3,132,351 |
|
Issuance of common
stock as compensation for services |
|
|
- |
|
|
|
- |
|
|
|
23,910 |
|
|
|
3 |
|
|
|
23,811 |
|
|
|
- |
|
|
|
- |
|
|
|
23,814 |
|
Issuance of common
stock in exchange for preferred stock |
|
|
(4,361 |
) |
|
|
(3,797,705 |
) |
|
|
8,722,000 |
|
|
|
873 |
|
|
|
3,796,832 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Issuance of common
stock in public offering, net of stock issuance costs ($172,592) |
|
|
- |
|
|
|
- |
|
|
|
3,023,147 |
|
|
|
302 |
|
|
|
5,580,169 |
|
|
|
- |
|
|
|
- |
|
|
|
5,580,471 |
|
Issuance of common
stock in exchange for options |
|
|
- |
|
|
|
- |
|
|
|
1,062,883 |
|
|
|
106 |
|
|
|
1,400,552 |
|
|
|
- |
|
|
|
- |
|
|
|
1,400,658 |
|
Issuance of common
stock in exchange for warrants |
|
|
- |
|
|
|
- |
|
|
|
114,957 |
|
|
|
12 |
|
|
|
(12 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Issuance of common
stock pursuant to the Aquarius Merger Agreement |
|
|
- |
|
|
|
- |
|
|
|
1,500,000 |
|
|
|
150 |
|
|
|
1,199,850 |
|
|
|
- |
|
|
|
- |
|
|
|
1,200,000 |
|
Stock
dividend |
|
|
- |
|
|
|
- |
|
|
|
1,687,200 |
|
|
|
169 |
|
|
|
843,431 |
|
|
|
(843,600 |
) |
|
|
- |
|
|
|
- |
|
Other
comprehensive loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(229,766 |
) |
|
|
(229,766 |
) |
Net
loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(16,583,975 |
) |
|
|
- |
|
|
|
(16,583,975 |
) |
Balance, September 30, 2021 |
|
|
- |
|
|
$ |
- |
|
|
|
216,247,528 |
|
|
$ |
21,625 |
|
|
$ |
183,168,987 |
|
|
$ |
(124,934,768 |
) |
|
$ |
(1,594 |
) |
|
$ |
58,254,250 |
|
|
|
Shares |
|
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Income (loss) |
|
|
Equity |
|
|
|
Redeemable
Convertible
Preferred
Stock B
|
|
|
Common Stock |
|
|
Additional
Paid
- in
|
|
|
Accumulated |
|
|
Accumulated
Other
Comprehensive
|
|
|
Total
Stockholders’
|
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Income (loss) |
|
|
Equity |
|
Balance, June 30, 2021 |
|
|
- |
|
|
$ |
- |
|
|
|
214,627,522 |
|
|
$ |
21,462 |
|
|
$ |
180,929,263 |
|
|
$ |
(118,098,218 |
) |
|
$ |
51,243 |
|
|
$ |
62,903,750 |
|
Stock-based
compensation |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,031,949 |
|
|
|
- |
|
|
|
- |
|
|
|
1,031,949 |
|
Issuance of common
stock as compensation for services |
|
|
- |
|
|
|
- |
|
|
|
6,106 |
|
|
|
1 |
|
|
|
7,937 |
|
|
|
- |
|
|
|
- |
|
|
|
7,938 |
|
Issuance of common
stock in exchange for Warrants |
|
|
- |
|
|
|
- |
|
|
|
113,900 |
|
|
|
12 |
|
|
|
(12 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Issuance of common
stock pursuant to the Aquarius Merger Agreement |
|
|
- |
|
|
|
- |
|
|
|
1,500,000 |
|
|
|
150 |
|
|
|
1,199,850 |
|
|
|
- |
|
|
|
- |
|
|
|
1,200,000 |
|
Other
comprehensive loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(52,837 |
) |
|
|
(52,837 |
) |
Net
loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(6,836,550 |
) |
|
|
- |
|
|
|
(6,836,550 |
) |
Balance, September 30, 2021 |
|
|
- |
|
|
$ |
- |
|
|
|
216,247,528 |
|
|
$ |
21,625 |
|
|
$ |
183,168,987 |
|
|
$ |
(124,934,768 |
) |
|
$ |
(1,594 |
) |
|
$ |
58,254,250 |
|
The
accompanying notes are an integral part of these condensed
consolidated financial statements
Matinas
BioPharma Holdings, Inc.
Condensed
Consolidated Statements of Cash Flow
Unaudited
The
accompanying notes are an integral part of these condensed
consolidated financial statements
MATINAS
BIOPHARMA HOLDINGS, INC.
Notes
to Unaudited Condensed Consolidated Financial
Statements
(Tabular
dollars and shares in thousands, except per share
data)
Note
1 – Description of
Business
Matinas
BioPharma Holdings Inc. (“Holdings”) is a Delaware corporation
formed in 2013. Holdings is the parent company of Matinas
BioPharma, Inc. (“BioPharma”), and Matinas BioPharma
Nanotechnologies, Inc. (“Nanotechnologies,” formerly known as
Aquarius Biotechnologies, Inc.), its operating subsidiaries
(“Nanotechnologies”, and together with “Holdings” and “BioPharma”,
“the Company”). The Company is a clinical-stage biopharmaceutical
company with a focus on identifying and developing novel
pharmaceutical products.
Note
2 – Liquidity and Plan
of Operations
The
Company has experienced net losses and negative cash flows from
operations each period since its inception. Through September 30,
2022, the Company had an accumulated deficit of approximately
$149.0 million. The Company’s net
loss was approximately $17.4 million for the nine months ended
September 30, 2022.
The
Company has been engaged in developing its lipid nanocrystal
(“LNC”) platform delivery technology and a pipeline of associated
product candidates, including MAT2203 and MAT2501, since 2011. To
date, the Company has not obtained regulatory approval for any of
its product candidates nor generated any revenue from product
sales, and the Company expects to incur significant expenses to
complete development of its product candidates. The Company may
never be able to obtain regulatory approval for the marketing of
any of its product candidates in any indication in the United
States or internationally and there can be no assurance that the
Company will generate revenues or ever achieve
profitability.
If
the Company obtains U.S. Food and Drug Administration (“FDA”)
approval for one or more of its product candidates, the Company
expects that its expenses will continue to increase once the
Company reaches commercial launch. The Company also expects that
its research and development expenses will continue to increase as
it moves forward with additional clinical studies for its current
product candidates and development of additional product
candidates. As a result, the Company expects to continue to incur
substantial losses for the foreseeable future, and that these
losses will be increasing.
As of
September 30, 2022, the Company had cash and cash equivalents of
approximately $11.2 million, marketable
debt securities of approximately $21.9 million and restricted
cash of approximately $0.3 million. The Company believes
the cash and cash equivalents and marketable debt securities on
hand are sufficient to fund planned operations through
2023.
Note
3 – Summary of
Significant Accounting Policies
Basis of presentation and principles of
consolidation
The
accompanying unaudited condensed consolidated financial statements
include the consolidated accounts of Holdings and its wholly owned
subsidiaries, BioPharma, and Nanotechnologies. The accompanying
unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally
accepted in the United States (“U.S. GAAP”) and reflect the
operations of the Company and its wholly owned subsidiaries. All
intercompany transactions have been eliminated in
consolidation.
The
Company’s significant accounting policies are described in Note 3
within the Company’s Notes to Consolidated Financial Statements
included in the Company’s 2021 Form 10-K.
The
Company’s management has considered all recent accounting
pronouncements issued and believes that these recent pronouncements
will not have a material effect on the Company’s financial
statements.
COVID-19
Since
its emergence in 2019, COVID-19 has continued to spread and has
adversely affected workforces, economies, and financial markets
globally, and has and may continue to cause economic
downturns.
The
Company’s financial results for the three and nine months ended
September 30, 2022 were not significantly impacted by COVID-19.
However, the Company cannot predict the impact of the progression
of COVID-19 on future results or the Company’s ability to raise
capital due to a variety of factors, including but not limited to
the continued good health of Company employees, the ability of
service providers and suppliers to continue to operate and deliver,
the ability of the Company to maintain operations, and any further
government and/or public actions taken in response to
COVID-19.
Note
4 – Cash, Cash
Equivalents, Restricted Cash and Marketable Debt
Securities
The
Company considers all highly liquid financial instruments with
original maturities of three months or less when purchased to be
cash and cash equivalents and all investments with maturities of
greater than three months from date of purchase are classified as
marketable debt securities. Cash and cash equivalents consisted of
cash in bank checking and savings accounts, money market funds and
short-term U.S. treasury bonds that mature within three months of
settlement date.
Cash,
Cash Equivalents and Restricted Cash
The
Company presents restricted cash with cash and cash equivalents in
the Condensed Consolidated Statements of Cash Flows. Restricted
cash at both September 30, 2022 and December 31, 2021 of $250
thousand represents funds the Company is required to set aside as
collateral, primarily for one of the Company’s operating leases and
other purposes.
The
following table provides a reconciliation of cash, cash equivalents
and restricted cash reported in the Condensed Consolidated Balance
Sheets to the total of the amounts in the Condensed Consolidated
Statements of Cash Flows as of September 30, 2022, December 31,
2021, September 30, 2021 and December 31, 2020:
Schedule of Cash, Cash Equivalents and
Restricted Cash
|
|
September 30,
2022 |
|
|
December 31,
2021 |
|
|
September 30,
2021 |
|
|
December 31,
2020 |
|
Cash and cash
equivalents |
|
$ |
11,176 |
|
|
$ |
21,030 |
|
|
$ |
24,923 |
|
|
$ |
12,432 |
|
Restricted cash
included in current/non-current assets |
|
|
250 |
|
|
|
250 |
|
|
|
250 |
|
|
|
336 |
|
Cash, cash
equivalents and restricted cash in the statement of cash flows |
|
$ |
11,426 |
|
|
$ |
21,280 |
|
|
$ |
25,173 |
|
|
$ |
12,768 |
|
Marketable
Debt Securities
The
Company has classified its investments in marketable debt
securities as available-for-sale and as a current asset. The
Company’s investments in marketable debt securities are carried at
fair value, with unrealized gains and losses included as a separate
component of stockholders’ equity. Unrealized losses and gains are
classified as other comprehensive (loss)/income and costs are
determined on a specific identification basis. Realized gains and
losses from our marketable debt securities are recorded in other
income, net. For the three and nine months ended September 30,
2022, the Company recorded unrealized losses of $181 thousand
and $790 thousand,
respectively. For the three and nine months ended September 30,
2021, the Company recorded unrealized losses of $53 thousand
and $230 thousand,
respectively. As of September 30, 2022 and December 31, 2021, the
Company had net accumulated unrealized losses of $936 thousand and
$145 thousand,
respectively.
The
following tables summarizes the Company’s marketable debt
securities as of September 30, 2022:
Schedule of Marketable
Securities
|
|
Amortized Cost |
|
|
Unrealized Gain |
|
|
Unrealized
(Loss) |
|
|
Fair Value |
|
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
|
|
|
|
Cost |
|
|
Gain |
|
|
(Loss) |
|
|
Fair Value |
|
U.S. Treasury Bonds |
|
$ |
991 |
|
|
$ |
— |
|
|
$ |
(36 |
) |
|
$ |
955 |
|
U.S. Government Notes |
|
|
16,342 |
|
|
|
— |
|
|
|
(784 |
) |
|
|
15,558 |
|
Corporate Debt
Securities |
|
|
5,478 |
|
|
|
— |
|
|
|
(116 |
) |
|
|
5,362 |
|
State and
Municipal Bonds |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
Total
marketable debt securities |
|
$ |
22,811 |
|
|
$ |
— |
|
|
$ |
(936 |
) |
|
$ |
21,875 |
|
Maturities
of debt securities classified as available-for-sale were as follows
at September 30, 2022:
Schedule of Maturities of Debt Securities
Available-for-sale
|
|
Fair Value |
|
Due within one year |
|
$ |
10,349 |
|
Due after one
year through five years |
|
|
11,526 |
|
|
|
$ |
21,875 |
|
The following tables summarizes the Company’s marketable debt
securities as of December 31, 2021:
Maturities
of debt securities classified as available-for-sale were as follows
at December 31, 2021:
Note
5 - Fair Value
Measurements
The
Company uses the fair value hierarchy to measure the value of its
financial instruments. The fair value hierarchy is based on inputs
to valuation techniques that are used to measure fair value that
are either observable or unobservable. Observable inputs reflect
assumptions market participants would use in pricing an asset or
liability based on market data obtained from independent sources,
while unobservable inputs reflect a reporting entity’s pricing
based upon its own market assumptions. The basis for fair value
measurements for each level within the hierarchy is described
below:
● |
Level
1 – Quoted prices for identical assets or liabilities in active
markets. |
|
|
● |
Level
2 – Quoted prices for identical or similar assets and liabilities
in markets that are not active; or other model-derived valuations
whose inputs are directly or indirectly observable or whose
significant value drivers are observable. |
|
|
● |
Level
3 – Valuations derived from valuation techniques in which one or
more significant inputs to the valuation model are unobservable and
for which assumptions are used based on management
estimates. |
The
Company utilizes valuation techniques that maximize the use of
observable inputs and minimize the use of unobservable inputs to
the extent possible as well as considers counterparty credit risk
in its assessment of fair value.
The
carrying amounts of cash equivalents, current portion of restricted
cash, prepaid expenses and other current assets, accounts payable,
current portion of lease liabilities and accrued expenses
approximate fair value due to the short-term nature of these
instruments.
A
summary of the assets and liabilities carried at fair value in
accordance with the hierarchy defined above is as
follows:
Schedule of Fair Value Measurement of Assets
and Liabilities
|
|
Total |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
|
|
|
|
|
Fair Value Hierarchy |
|
September 30, 2022 |
|
Total |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable Debt Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Treasury Bonds |
|
$ |
955 |
|
|
$ |
955 |
|
|
$ |
— |
|
|
$ |
— |
|
U.S. Government
Notes |
|
|
15,558 |
|
|
|
— |
|
|
|
15,558 |
|
|
|
— |
|
Corporate Debt Securities |
|
|
5,362 |
|
|
|
— |
|
|
|
5,362 |
|
|
|
— |
|
Total |
|
$ |
21,875 |
|
|
$ |
955 |
|
|
$ |
20,920 |
|
|
$ |
— |
|
|
|
Total |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
|
|
|
|
|
Fair Value Hierarchy |
|
December 31, 2021 |
|
Total |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable Debt Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Government Notes |
|
$ |
19,277 |
|
|
$ |
— |
|
|
$ |
19,277 |
|
|
$ |
— |
|
Corporate Debt
Securities |
|
|
9,065 |
|
|
|
— |
|
|
|
9,065 |
|
|
|
— |
|
State
and Municipal Bonds |
|
|
250 |
|
|
|
— |
|
|
|
250 |
|
|
|
— |
|
Total |
|
$ |
28,592 |
|
|
$ |
— |
|
|
$ |
28,592 |
|
|
$ |
— |
|
U.S.
treasury bonds are classified within Level 1 of the fair value
hierarchy because they are valued using quoted market prices for
identical assets in active markets. Marketable debt securities
consisting of U.S. government notes, corporate debt securities and
state and municipal bonds are classified as Level 2 and are valued
using quoted market prices in markets that are not
active.
Note
6 – Leasehold
Improvements and Equipment
Leasehold
improvements and equipment, summarized by major category, consist
of the following as of September 30, 2022 and December 31,
2021:
Schedule of Leasehold Improvements and
Equipment
|
|
September 30, 2022 |
|
|
December 31, 2021 |
|
Equipment |
|
$ |
2,269 |
|
|
$ |
1,640 |
|
Leasehold
improvements |
|
|
1,156 |
|
|
|
935 |
|
Total |
|
|
3,425 |
|
|
|
2,575 |
|
Less:
accumulated depreciation and amortization |
|
|
1,281 |
|
|
|
1,037 |
|
Leasehold improvements and equipment, net |
|
$ |
2,144 |
|
|
$ |
1,538 |
|
Depreciation
and amortization expense for the three and nine months ended
September 30, 2022 was $89 thousand
and $244 thousand,
respectively, and for the three and nine months ended September 30,
2021 was $62 thousand
and $179 thousand,
respectively. During the nine months ended September 30, 2022 the
Company purchased leasehold improvements of $221
thousand, and equipment of $629
thousand. During the nine months ended September 30, 2021 the
Company purchased leasehold improvements of $57
thousand, and equipment of approximately $167
thousand.
Note
7 – Accrued Expenses
and Other Liabilities
Accrued
Expenses, summarized by major category, as of September 30, 2022
and December 31, 2021 consist of the following:
Schedule of Accrued
Expenses
|
|
September 30, 2022 |
|
|
December 31, 2021 |
|
Payroll and
incentives |
|
$ |
1,462 |
|
|
$ |
1,343 |
|
Deferred revenue * |
|
|
1,408 |
|
|
|
33 |
|
Research and development
expenses |
|
|
334 |
|
|
|
381 |
|
General and administrative
expenses |
|
|
299 |
|
|
|
195 |
|
Other deferred
liabilities ** |
|
|
194 |
|
|
|
899 |
|
Total |
|
$ |
3,697 |
|
|
$ |
2,851 |
|
|
* |
At
September 30, 2022, the balance included $1,375
thousand related to an exclusive research collaboration with
BioNTech SE (the “BioNTech Agreement”) and $33
thousand is related to a feasibility study agreement with
Genentech, Inc. (the “Genentech Agreement”), which is expected to
be recognized by December 31, 2022. At December 31, 2021, the
balance of $33
thousand was related to the Genentech Agreement. The balance of the
BioNTech Agreement will be recognized evenly over the next six
months. (See Note 9 – Revenue Recognition, Collaboration Agreements
and Other). |
|
|
|
|
** |
At
September 30, 2022 and December 31, 2021, the balances of
$194
thousand and $899
thousand, respectively, related to an award agreement with the
Cystic Fibrosis Foundation (the “CFF Agreement). (See Note 9 –
Revenue Recognition, Collaboration Agreements and
Other). |
Note
8 – Leases
The
Company has various lease agreements , including leases of office
space, a laboratory and manufacturing facility, and various
equipment. Some leases include purchase,
termination or extension options for one or more years. These
options are included in the lease term when it is reasonably
certain that the option will be exercised.
The
assets and liabilities from operating and finance leases are
recognized at the lease commencement date based on the present
value of remaining lease payments over the lease term using the
Company’s incremental borrowing rates or implicit rates, when
readily determinable. Short-term leases, which have an initial term
of 12 months or less, are not
recorded on the balance sheet. The Company’s operating leases do
not provide implicit rates, therefore the Company utilized a
discount rate based on its incremental borrowing rate to record the
lease obligations. The Company’s finance leases provide readily
determinable implicit rates.
Operating
lease obligations
On
September 13, 2022, the Company entered into an amendment to the
operating lease agreement for its administrative office space in
Bedminster, New Jersey which extends the term of the lease until
June 30, 2029. Before this amendment, the lease term was scheduled
to expire on July 31, 2028. (See Note 8 – Leases within the
Company’s Notes to Consolidated Financial Statements included in
the Company’s 2021 Form 10-K.)
The
Company incurred lease expense for its operating leases of
$194 thousand and $646 thousand for the three and nine
months ended September 30, 2022, respectively, and $219 thousand and $626 thousand for the three and nine
months ended September 30, 2021, respectively. The Company incurred
amortization expense on its operating lease right-of-use assets of
$138
thousand and $413
thousand for the three and nine months ended September 30, 2022,
respectively, and $125
thousand and $368
thousand for the three and nine months ended September 30, 2021,
respectively.
Finance
Leases
The
Company incurred interest expense on its finance leases of
$0 and $1 thousand for the
three and nine months ended September 30, 2022, respectively, and
$1 thousand and
$3 thousand for the
three and nine months ended September 30, 2021, respectively. The
Company incurred amortization expense on its finance lease
right-of-use assets of $3
thousand and $15
thousand for the three and nine months ended September 30, 2022,
respectively, and $9
thousand and $29
thousand for the three and nine months ended September 30, 2021,
respectively.
The
following table presents information about the amount and timing of
liabilities arising from the Company’s operating leases and finance
leases as of September 30, 2022:
Schedule of Maturity of Operating and Finance
Leases Liabilities
Maturity of Lease Liabilities |
|
Operating
Lease
Liabilities
|
|
|
Finance
Lease
Liabilities
|
|
Remainder of 2022 |
|
$ |
225 |
|
|
$ |
6 |
|
2023 |
|
|
916 |
|
|
|
2 |
|
2024 |
|
|
956 |
|
|
|
- |
|
2025 |
|
|
998 |
|
|
|
- |
|
2026 |
|
|
1,040 |
|
|
|
- |
|
Thereafter |
|
|
1,355 |
|
|
|
- |
|
Thereafter |
|
|
1,112 |
|
|
|
- |
|
Total undiscounted operating lease
payments |
|
$ |
5,490 |
|
|
$ |
8 |
|
Less:
Imputed interest |
|
|
1,266 |
|
|
|
- |
|
Present
value of operating lease liabilities |
|
$ |
4,224 |
|
|
$ |
8 |
|
|
|
|
|
|
|
|
|
|
Weighted average remaining lease
term in years |
|
|
5.6 |
|
|
|
0.5 |
|
Weighted average discount rate |
|
|
9.2 |
% |
|
|
7.0 |
% |
The
following table presents information about the amount and timing of
liabilities arising from the Company’s operating leases and finance
leases as of December 31, 2021:
Maturity of Lease Liabilities |
|
Operating
Lease
Liabilities
|
|
|
Finance
Lease
Liabilities
|
|
2022 |
|
$ |
883 |
|
|
$ |
22 |
|
2023 |
|
|
922 |
|
|
|
2 |
|
2024 |
|
|
962 |
|
|
|
- |
|
2025 |
|
|
1,004 |
|
|
|
- |
|
2026 |
|
|
1,046 |
|
|
|
- |
|
Thereafter |
|
|
1,112 |
|
|
|
- |
|
Total undiscounted operating lease
payments |
|
$ |
5,929 |
|
|
$ |
24 |
|
Less:
Imputed interest |
|
|
1,250 |
|
|
|
- |
|
Present
value of operating lease liabilities |
|
$ |
4,679 |
|
|
$ |
24 |
|
|
|
|
|
|
|
|
|
|
Weighted average remaining lease
term in years |
|
|
6.1 |
|
|
|
0.9 |
|
Weighted average discount rate |
|
|
7.8 |
% |
|
|
7.8 |
% |
Note
9 – Revenue
Recognition, Collaboration Agreements and
Other
BioNTech
Research Collaboration
On
April 8, 2022, the Company entered into the BioNTech Agreement to
evaluate the combination of mRNA formats utilizing the Company’s
proprietary LNC platform delivery technology. Under the terms of
the BioNTech Agreement, the Company received an exclusivity fee in
the amount of $2.75 million, and
BioNTech SE will fund certain of the Company’s research expenses to
be incurred under the agreement. The parties have also commenced
discussions on a potential option to license (“OTL”) agreement for
the Company’s LNC platform delivery technology. The term of the
agreement begins on the effective date and ends on the earlier of
the execution of an OTL agreement by the parties, 12-months after
the effective date and termination of the agreement.
The
Company assessed the BioNTech Agreement under ASC 808
Collaboration Arrangements and ASC 606 Revenue from
Contracts with Customers (“ASC 606”) and concluded that the
contract counterparty, BioNTech SE, is a customer based on the
arrangement structure. The Company identified two material promises
to deliver under the contract: (1) grant of an exclusive research
license and (2) clinical research services. However, given the
nature of the promises, the license and research services are not
considered to be distinct from each other within the context of the
contract. The Company therefore concluded that there is one
combined performance obligation for both the license and research
services.
The
$2.75 million license fee was
recorded as deferred revenue and is being recognized over the term
of the contract performance obligation period, which the Company
has concluded to be 12 months after the execution of the contract.
The clinical research services are being invoiced as service
revenue is earned on a monthly basis during the term of the
contract.
As of
September 30, 2022, the Company recognized approximately $2.1 million of contract research revenue
from the BioNTech Agreement. For the three and nine months ended
September 30, 2022, $688 thousand and $1.4 million of the contract
research revenue was recognized from the license fee and $375 thousand and $750 thousand was earned from the monthly
clinical research services performed by the Company. As of
September 30, 2022, approximately $1.4
million of the license fee is included in deferred revenue within
accrued expenses.
Cystic
Fibrosis Foundation Therapeutics Development Award
On
November 19, 2020, the Company entered into an award agreement (the
“CFF Agreement”) with the Cystic Fibrosis Foundation (“CFF”),
pursuant to which it received a Therapeutics Development Award of
up to $4.2 million (the
“Award”) (of which $484 thousand had been previously
received) to support the preclinical development (the “Development
Program”) of the Company’s MAT2501 product candidate. On November
19, 2021, the Company and CFF entered into an Amendment to the CFF
Agreement which added an additional milestone payment in the amount
of $321 thousand, which was
received in the fourth quarter of 2021.
As of
September 30, 2022, the Company has received approximately
$3.6 million of the $4.5 million commitment,
including the Amendment’s additional milestone payment, and a
related deferred liability balance of $194 thousand and $899 thousand is included in
accrued expenses at September 30, 2022 and December 31, 2021,
respectively. The remainder of the Award will be paid to the
Company upon the achievement of certain milestones related to
progress of the Development Program, as set forth in the CFF
Agreement.
Genentech
Feasibility Study Agreement
On
December 12, 2019, the Company entered into the Genentech Agreement
which involves the development of oral formulations using the
Company’s LNC platform delivery technology. Under the terms of the Genentech
Agreement, Genentech paid the Company a total of $100 thousand for the development
of three molecules, or $33 thousand per molecule, which is being
recognized upon the Company fulfilling its obligations for each
molecule under the Genentech Agreement. The Company recorded the
upfront consideration as deferred revenue, which is included in
accrued expenses on the consolidated balance sheets. As of December
31, 2021, the Company completed its obligations related to the
first and second of the three molecules. During the three and nine
months ended September 30, 2022, the Company did not complete its
obligations related to the remaining molecule but expects to do so
by December 31, 2022.
Note
10 – Income
Taxes
Sale
of net operating losses (NOLs) & tax credits
The
Company recognized approximately $1.7 million and
$1.3 million for the
nine months ended September 30, 2022 and 2021, respectively, in
connection with the sale of certain state net operating losses
(“NOLs”) and research and development tax credits to a third party
under the New Jersey Technology Business Tax Certificate Transfer
Program.
Note
11 –
Common
Stock
On
February 8, 2022, the Company issued 400,000
unregistered shares of its common stock to Rutgers, The State
University of New Jersey (“Rutgers”), as partial consideration
pursuant to the Second Amended and Restated Exclusive License
Agreement between the Company and Rutgers. The agreement provides
for (1) royalties on a tiered basis between low single digits and
the mid-single digits of net sales of products using such licensed
technology, (2) a one-time sales milestone fee of $100,000 when and if sales of products
using the licensed technology reach the specified sales threshold
and (3) an annual license fee of $50,000 over the term of the license
agreement. There was also a reduction in the consideration paid to
Rutgers in the event of a sublicense to a third party of the
exclusive patent rights granted pursuant to the Agreement. The
Company recorded a $291 thousand
research and development expense related to the issuance of the
400,000
shares based on the closing price of the Company’s common stock of
$0.728 on the date of
issuance.
For
the nine months ended September 31, 2021, the Company sold
3,023,147
shares of its common stock under its At-The-Market Sales Agreement
with BTIG, LLC, at an average price of $1.90, generating gross
proceeds of approximately $5.8 million and net
proceeds of approximately $5.6 million. No sales
of the Company’s common stock occurred during the nine months ended
September 30, 2022.
Warrants
All
warrants issued by the Company are exercisable immediately upon
issuance and have a five-year term. The warrants may be exercised
at any time in whole or in part upon payment of the applicable
exercise price until expiration. No fractional shares will be
issued upon the exercise of the warrants. The exercise price and
the number of shares purchasable upon the exercise of the warrants
are subject to adjustment upon the occurrence of certain events,
which include stock dividends, stock splits, combinations and
reclassifications of the Company’s capital stock or other similar
changes to the equity structure of the Company. The warrants do not
have a redemption feature. They may be exercised on a cashless
basis at the holder’s option. The warrants are classified as equity
instruments.
As of
September 30, 2022, the Company had outstanding warrants to
purchase an aggregate of 988,000
shares of common stock at exercise prices ranging from $0.50
to $0.75
per share, all of which are fully vested and with expiration dates
between December 31, 2022 and June 21, 2023. The following table
summarizes the changes in warrants outstanding during 2021 and for
the nine months ended September 30, 2022:
Schedule of Shareholders Equity Warrants
Outstanding
|
|
Shares |
|
Outstanding at December
31, 2020 |
|
|
1,328 |
|
Issued |
|
|
- |
|
Exercised |
|
|
(320 |
) |
Tendered |
|
|
- |
|
Expired |
|
|
(20 |
) |
Outstanding at December 31,
2021 |
|
|
988 |
|
Issued |
|
|
- |
|
Exercised |
|
|
- |
|
Tendered |
|
|
- |
|
Expired |
|
|
- |
|
Outstanding at
September 30, 2022 |
|
|
988 |
* |
* |
Weighted
average exercise price for outstanding warrants is $0.56. |
Basic
and diluted net loss per common share
During
the three and nine months ended September 30, 2022 and 2021,
diluted loss per common share is the same as basic loss per common
share because, as the Company incurred a net loss during each
period presented, the potentially dilutive securities from the
assumed exercise of all outstanding stock options and warrants,
would have an anti-dilutive effect. The following outstanding
shares of potentially dilutive securities were excluded from the
computation of diluted net loss per share attributable to common
shareholders because including them would have been anti-dilutive
as of September 30, 2022 and 2021:
Schedule of Anti-dilutive Securities Excluded
from Computation of Earning Per Share
|
|
As of September 30, |
|
|
|
2022 |
|
|
2021 |
|
Stock options |
|
|
27,782 |
|
|
|
22,242 |
|
Warrants |
|
|
988 |
|
|
|
988 |
|
Total |
|
|
28,770 |
|
|
|
23,230 |
|
Note
12 – Accumulated Other
Comprehensive (Loss)/Income
The
following table summarizes the changes in accumulated other
comprehensive (loss)/income by component during the nine months
ended September 30, 2022 and 2021:
Schedule of Components of Accumulated Other
Comprehensive (Loss)/Income
|
|
Net Unrealized (Losses)/Gains on Available-for-Sale Securities |
|
|
Accumulated Other Comprehensive
(Loss)/Income |
|
Balance, December 31,
2021 |
|
$ |
(145 |
) |
|
$ |
(145 |
) |
Net
unrealized loss on securities available-for-sale |
|
|
(791 |
) |
|
|
(791 |
) |
Net
current period other comprehensive loss |
|
|
(791 |
) |
|
|
(791 |
) |
Balance, September 30, 2022 |
|
$ |
(936 |
) |
|
$ |
(936 |
) |
|
|
|
|
|
|
|
|
|
Balance, December 31, 2020 |
|
$ |
228 |
|
|
$ |
228 |
|
Net
unrealized loss on securities available-for-sale |
|
|
(230 |
) |
|
|
(230 |
) |
Net
current period other comprehensive income |
|
|
(230 |
) |
|
|
(230 |
) |
Balance, September 30, 2021 |
|
$ |
(2 |
) |
|
$ |
(2 |
) |
All
components of accumulated other comprehensive income are net of
tax.
Note
13 – Stock-based
Compensation
The
Company’s Amended and Restated 2013 Equity Compensation Plan (the
“Plan”) provides for the granting of incentive stock options,
nonqualified stock options, restricted stock units, performance
units, and stock purchase rights. There were no significant
modifications to the Plan during the nine months ended September
30, 2022 and 2021.
The
following table contains information about the Company’s stock plan
at September 30, 2022:
Schedule of Equity Compensation Plan by
Arrangements
|
|
Awards
Reserved for
Issuance |
|
|
Awards
Issued &
Exercised |
|
|
Awards
Available
for Grant |
|
2013 Equity Compensation Plan |
|
|
45,603 |
* |
|
|
32,463 |
** |
|
|
13,140 |
|
* |
Increased
by
8,651 thousand on January 1, 2022, representing
4% of the total number of shares of common stock outstanding
on December 31, 2021. |
** |
Includes
both restricted stock grants and option grants |
The
Company recognized stock-based compensation expense (options and
restricted share grants) in its condensed consolidated statements
of operations as follows:
Schedule of Recognized Stock-Based
Compensation
|
|
Three
Months Ended
September
30,
|
|
|
Nine
Months Ended
September
30,
|
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Research and
Development |
|
$ |
554 |
|
|
$ |
467 |
|
|
$ |
1,660 |
|
|
$ |
1,411 |
|
General and
Administrative |
|
|
859 |
|
|
|
594 |
|
|
|
2,228 |
|
|
|
1,806 |
|
Total |
|
$ |
1,413 |
|
|
$ |
1,061 |
|
|
$ |
3,888 |
|
|
$ |
3,217 |
|
As of
September 30, 2022, total compensation costs related to unvested
awards not yet recognized was approximately $8.1 million
and the weighted-average periods over which the awards are expected
to be recognized was 2.4
years.
Stock
Options
The
following table summarizes the activity for Company’ stock options
for the nine months ended September 30, 2022:
Schedule of Stock Option
Activity
|
|
Stock Options |
|
Outstanding at December
31, 2021 |
|
|
28,184 |
|
Granted |
|
|
1,095 |
|
Exercised |
|
|
(195 |
) |
Forfeited |
|
|
(165 |
) |
Cancelled |
|
|
- |
|
Expired |
|
|
(1,137 |
) |
Outstanding at
September 30, 2022 |
|
|
27,782 |
|
Restricted
Stock Awards
During
the nine months ended September 30, 2022 and 2021, the Company
granted restricted stock awards for 0 and 8 thousand shares of
common stock, respectively. These awards are typically granted to
members of the Board of Directors as payment in lieu of cash fees
or as payment to a vendor pursuant to a consulting agreement. The
Company values restricted stock awards at the fair market value on
the date of grant. The Company recorded the value of the 2021
restricted awards as general and administrative expense of
$29 thousand
and $85 thousand
for the three and nine months ended September 30, 2021,
respectively. As of September 30, 2022, there was no unrecognized
compensation costs related to restricted stock grants.
Note
14 – Commitments and
Contingencies
On
March 7, 2022, the Company entered into an agreement with Thermo
Fisher Scientific to provide scale-up and commercial manufacturing
capabilities for MAT2203. The estimated fees under the agreement,
including capital equipment requirements, are approximately
$7.7 million. The fees are expected
to be incurred over a two-year period beginning in March 2022
through the first quarter of 2024. For the three and nine months
ended September 30, 2022, the Company prepaid $2.0 million to Thermo Fisher
Scientific for expenses to be incurred during beginning phases of
the agreement activities. During the three and nine months ended
September 30, 2022, the Company expensed $7 thousand and $45 thousand, respectively. At
September 30, 2022, $1,955
thousand is included in prepaid expenses and other current
assets.
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The
following discussion and analysis of our financial condition and
results of operations should be read together with our financial
statements and the related notes and the other financial
information included elsewhere in this Quarterly Report on Form
10-Q. This discussion contains forward-looking statements that
involve risks and uncertainties. Our actual results could differ
materially from those anticipated in these forward-looking
statements as a result of various factors, including those
discussed below and elsewhere in this Quarterly Report on Form
10-Q, in our Annual Report on Form 10-K for the year ended December
31, 2021 and in other reports we file with the Securities and
Exchange Commission, particularly those under “Risk Factors.”
Dollars in tabular format are presented in thousands, except per
share data, or otherwise indicated.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
report on Form 10-Q contains forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 under Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Forward-looking statements include
statements with respect to our beliefs, plans, objectives, goals,
expectations, anticipations, assumptions, estimates, intentions and
future performance, and involve known and unknown risks,
uncertainties and other factors, which may be beyond our control,
including risks and uncertainties related to the impact of
COVID-19, and which may cause our actual results, performance or
achievements to be materially different from future results,
performance or achievements expressed or implied by such
forward-looking statements. All statements other than statements of
historical fact are statements that could be forward-looking
statements. You can identify these forward-looking statements
through our use of words such as “may,” “can,” “anticipate,”
“assume,” “should,” “indicate,” “would,” “believe,” “contemplate,”
“expect,” “seek,” “estimate,” “continue,” “plan,” “point to,”
“project,” “predict,” “could,” “intend,” “target,” “potential” and
other similar words and expressions of the future.
There
are a number of important factors that could cause the actual
results to differ materially from those expressed in any
forward-looking statement made by us. These factors include, but
are not limited to:
● |
our
ability to raise additional capital to fund our operations and to
develop our product candidates; |
|
|
● |
our
anticipated timing for preclinical development, regulatory
submissions, commencement and completion of clinical trials and
product approvals; |
|
|
● |
our
history of operating losses in each year since inception and the
expectation that we will continue to incur operating losses for the
foreseeable future; |
|
|
● |
our
dependence on product candidates which are still in an early
development stage; |
|
|
● |
our
reliance on our proprietary lipid nanocrystal (LNC) platform
delivery technology, which is licensed to us by Rutgers
University; |
|
|
● |
our
ability to manufacture GMP batches of our product candidates which
are required for preclinical and clinical trials and, subsequently,
if regulatory approval is obtained for any of our products, our
ability to manufacture commercial quantities; |
|
|
● |
our
ability to complete required clinical trials for our lead product
candidate and other product candidates and obtain approval from the
FDA or other regulatory agents in different
jurisdictions; |
● |
our
dependence on third parties, including third parties to manufacture
our intermediates and final product formulations and third-party
contract research organizations to conduct our clinical
trials; |
|
|
● |
our
ability to maintain or protect the validity of our patents and
other intellectual property; |
|
|
● |
our
ability to retain and recruit key personnel; |
|
|
● |
our
ability to internally develop new inventions and intellectual
property; |
● |
interpretations
of current laws and the passages of future laws; |
|
|
● |
our
lack of a sales and marketing organization and our ability to
commercialize products, if we obtain regulatory approval, whether
alone or through potential future collaborators; |
|
|
● |
our
ability to successfully commercialize, and our expectations
regarding future therapeutic and commercial potential with respect
to, our product candidates; |
|
|
● |
the
accuracy of our estimates regarding expenses, ongoing losses,
future revenue, capital requirements and our needs for or ability
to obtain additional financing; |
|
|
● |
developments
and projections relating to our competitors or our
industry; |
|
|
● |
our
operations, business and financial results may be adversely
impacted by COVID-19; and |
● |
the
factors listed under the heading “Risk Factors” in our Annual
Report on Form 10-K for the year ended December 31, 2021, elsewhere
in this report and other reports that we file with the Securities
and Exchange Commission. |
All
forward-looking statements are expressly qualified in their
entirety by this cautionary notice. You are cautioned not to place
undue reliance on any forward-looking statements, which speak only
as of the date of this report or the date of the document
incorporated by reference into this report. We have no obligation,
and expressly disclaim any obligation, to update, revise or correct
any of the forward- looking statements, whether as a result of new
information, future events or otherwise. We have expressed our
expectations, beliefs and projections in good faith, and we believe
they have a reasonable basis. However, we cannot assure you that
our expectations, beliefs or projections will result or be achieved
or accomplished.
Overview
We
are a clinical-stage biopharmaceutical company focused on
redefining the intracellular delivery of nucleic acids and small
molecules through our lipid nanocrystal (LNC) platform delivery
technology. Our current pipeline consists of two potent
anti-infective small molecules, MAT2203 (oral amphotericin B) and
MAT2501 (oral amikacin). We are also expanding the application of
our LNC platform through collaborations with well-respected
pharmaceutical companies whose molecules and compounds benefit from
the unique capabilities of our delivery technology, which can
provide oral bioavailability and facilitate non-toxic and efficient
intracellular delivery. We are intent on further expansion of our
LNC platform, both internally and through external partnerships,
into the field of nucleic acids where delivery into cells remains a
critical element of therapeutic effect.
Key
elements of our strategy include:
● |
Advancing
our clinical stage assets based on our LNC platform delivery
technology and continuing to expand utilization of this promising
technology into areas of innovative medicine beyond small
molecules, including nucleic acids (e.g. mRNA, DNA, ASOs) and
proteins, both internally and through additional external
collaborations and partnerships, including our feasibility study
agreement with Genentech and exclusive research collaboration with
BioNTech SE. |
|
|
● |
Advancing
MAT2203 toward NDA filing through the ongoing EnACT study for the
treatment of cryptococcal meningitis, which highlights the safety
and efficacy of this promising drug candidate, while also
demonstrating the ability of our LNC platform technology to deliver
potent medicines across the blood-brain barrier with oral
administration. |
|
|
● |
Progressing
the development of MAT2501 through extensive preclinical toxicology
and efficacy studies in NTM infections and completing a single
ascending dose (SAD) pharmacokinetic study in healthy volunteers,
all with the financial support of the CFF. |
We
have incurred losses for each period from our inception. For the
nine months ended September 30, 2022 and 2021, our net loss was
approximately $17.4 million and $16.6 million, respectively. We
expect to incur significant expenses and operating losses over the
next several years. Accordingly, we will need additional financing
to support our continuing operations. We will seek to fund our
operations through public or private equity offerings, debt
financings, government or other third-party funding, collaborations
and licensing arrangements. Adequate additional financing may not
be available to us on acceptable terms, or at all. Our failure to
raise capital as and when needed would impact our going concern and
would have a negative impact on our financial condition and our
ability to pursue our business strategy and continue as a going
concern. We will need to generate significant revenues to achieve
profitability, and we may never do so.
Financial
Operations Overview
Revenue
During
the three and nine months ended September 30, 2022, we generated
approximately $1.1 million and $2.1 million, respectively, in
contract research revenue resulting from the research collaboration
with BioNTech SE and $0 and $33 thousand during the three and nine
months ended September 30, 2021, respectively, resulting from the
feasibility study agreement with Genentech Inc. Our ability to
generate product revenue, which we do not expect to occur for many
years, if ever, will depend heavily on the successful development
and eventual commercialization of our early-stage product
candidates.
Research and Development Expenses
Research
and development expenses consist of costs incurred for the
development of product candidates MAT2203 and MAT2501, and
advancement of our LNC platform delivery technology, which
include:
● |
the
cost of conducting pre-clinical work; |
|
|
● |
the
cost of acquiring, developing and manufacturing pre-clinical and
human clinical trial materials; |
|
|
● |
costs
for consultants and contractors associated with Chemistry and
Manufacturing Controls (CMC), pre-clinical and clinical activities
and regulatory operations; |
|
|
● |
expenses
incurred under agreements with contract research organizations, or
CROs, including the National Institutes of Health (NIH), that
conduct our pre-clinical or clinical trials; |
|
|
● |
employee-related
expenses, including salaries and stock-based compensation expense
for those employees involved in the research and development
process; and |
|
|
● |
the
reimbursement of certain expenses related to the CFF award
agreement. |
The
table below summarizes our direct research and development expenses
for our product candidates and development platform for the three
and nine months ended September 30, 2022 and 2021. Our direct
research and development expenses consist principally of external
costs, such as fees paid to contractors, consultants, analytical
laboratories and CROs and/or the NIH, in connection with our
development work. We typically use our employee and infrastructure
resources for manufacturing clinical trial materials, conducting
product analysis, study protocol development and overseeing outside
vendors. Included in “Internal staffing, overhead and other” below
is the cost of laboratory space, supplies, research and development
(R&D) employee costs (including stock-based compensation),
travel and medical education.
|
|
Three months ended
September 30, |
|
|
Nine months ended
September 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Direct research and development
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing process
development |
|
$ |
417 |
|
|
$ |
844 |
|
|
$ |
1,988 |
|
|
$ |
1,572 |
|
Preclinical trials |
|
|
86 |
|
|
|
99 |
|
|
|
711 |
|
|
|
101 |
|
Clinical development |
|
|
492 |
|
|
|
586 |
|
|
|
1,702 |
|
|
|
1,652 |
|
Regulatory |
|
|
160 |
|
|
|
44 |
|
|
|
562 |
|
|
|
129 |
|
Internal
staffing, overhead and other |
|
|
2,552 |
|
|
|
3,048 |
|
|
|
7,848 |
|
|
|
6,889 |
|
Total research
and development |
|
$ |
3,707 |
|
|
$ |
4,621 |
|
|
$ |
12,811 |
|
|
$ |
10,343 |
|
Research
and development activities are central to our business model. We
expect our research and development expenses to increase because
product 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 human trials. Our research and
development expenses reflect the reimbursement of certain MAT2501
program expenses related to the CFF award agreement. In addition,
we will look to strategically expand the use of our LNC platform
delivery technology through additional development work. During
2022, we are focused on advancing our lead product candidate,
MAT2203, to efficacy data in the treatment of cryptococcal
meningitis (CM), accelerating the development of MAT2501 and also
expanding application of our LNC platform delivery technology
through both internal efforts and collaborations with third
parties.
General and Administrative Expenses
General
and administrative expenses consist principally of salaries and
related costs for personnel in executive and finance functions.
Other general and administrative expenses include facility costs,
insurance, investor relations expenses, professional fees for
legal, patent review, consulting and accounting/audit services. We
anticipate that our general and administrative expenses during 2022
will remain relatively consistent with expenses incurred during
2021.
Sale of Net Operating Losses (NOLs) & Tax
Credits
Income
obtained from selling unused net operating losses (NOLs) and
research and development tax credits under the New Jersey
Technology Business Tax Certificate Transfer Program was
approximately $1.7 million and $1.3 million for the nine months
ended September 30, 2022 and 2021, respectively.
Other Income, net
Other
income, net is largely comprised of interest income/(expense) and
dividends.
Application
of Critical Accounting Policies and Accounting
Estimates
A
critical accounting policy is one that is both important to the
portrayal of our financial condition and results of operation and
requires management’s most difficult, subjective or complex
judgments, often as a result of the need to make estimates about
the effect of matters that are inherently uncertain.
For a
description of our significant accounting policies, refer to “Note
3 – Summary of Significant Accounting Policies” in our 2021
Form 10-K. Of these policies, the following are considered critical
to an understanding of our Unaudited Condensed Consolidated
Financial Statements as they require the application of the most
difficult, subjective and complex judgments: (i) Stock-based
compensation, (ii) Fair value measurements, (iii) Research and
development costs, (iv) Goodwill and other intangible assets, (v)
Basic and diluted net loss per common share, and (vi) Revenue
recognition.
Recent
Accounting Pronouncements
Refer
to “Note 3 – Summary of Significant Accounting Policies” in
the Notes to Unaudited Condensed Consolidated Financial Statements
for a discussion of recently adopted accounting pronouncements and
their expected impact on our financial positions and results of
operations.
Current
Operating Trends
Our
current R&D efforts are focused on advancing our lead LNC
product candidates, MAT2203, through clinical development toward an
initial indication for the treatment of CM, accelerating
preclinical development of MAT2501 with the assistance of the CFF,
and expanding application of our LNC platform delivery technology
through collaborations with third parties. Our R&D expenses
consist of manufacturing work and the cost of active pharmaceutical
ingredients and excipients used in such work, fees paid to
consultants for work related to clinical trial design and
regulatory activities, fees paid to providers for conducting
various clinical studies as well as for the analysis of the results
of such studies, and for other medical research addressing the
potential efficacy and safety of our drugs. We believe that
significant investment in product development is a competitive
necessity, and we plan to continue these investments in order to be
in a position to realize the potential of our product candidates
and proprietary technologies.
We
expect that all of our R&D expenses in the near-term future
will be incurred in support of our current and future preclinical
and clinical development programs rather than technology
development. These expenditures are subject to numerous
uncertainties relating to timing and cost to completion. We test
compounds in numerous preclinical studies for safety, toxicology
and efficacy. At the appropriate time, subject to the approval of
regulatory authorities, we expect to conduct early-stage clinical
trials for each drug candidate. We anticipate funding these trials
ourselves, and possibly with the assistance of federal grants,
contracts or other agreements. As we obtain results from trials, we
may elect to discontinue or delay clinical trials for certain
products in order to focus our resources on more promising
products. Completion of clinical trials may take several years, and
the length of time generally varies substantially according to the
type, complexity, novelty and intended use of a product
candidate.
The
commencement and completion of clinical trials for our products may
be delayed by many factors, including lack of efficacy during
clinical trials, unforeseen safety issues, slower than expected
participant recruitment, lack of funding or government delays. In
addition, we may encounter regulatory delays or rejections as a
result of many factors, including results that do not support the
intended safety or efficacy of our product candidates, perceived
defects in the design of clinical trials and changes in regulatory
policy during the period of product development. As a result of
these risks and uncertainties, we are unable to accurately estimate
the specific timing and costs of our clinical development programs
or the timing of material cash inflows, if any, from our product
candidates. Our business, financial condition and results of
operations may be materially adversely affected by any delays in,
or termination of, our clinical trials or a determination by the
FDA that the results of our trials are inadequate to justify
regulatory approval, insofar as cash in-flows from the relevant
drug or program would be delayed or would not occur.
Results
of Operations
Comparison
of the three months ended September 30, 2022 to the three months
ended September 30, 2021
The
following tables summarizes our revenues and operating expenses for
the periods presented:
|
|
Three Months Ended September 30, |
|
|
|
2022 |
|
|
2021 |
|
Revenues |
|
$ |
1,063 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
$ |
3,707 |
|
|
$ |
4,621 |
|
General and
administrative |
|
|
2,818 |
|
|
|
2,257 |
|
Operating
Expenses |
|
$ |
6,525 |
|
|
$ |
6,878 |
|
Revenues. During the three months ended September 30, 2022
we generated $1.1 million from the exclusive research collaboration
with BioNTech SE and no revenue during the same period in
2021.
Research and Development expenses. Research and Development
(R&D) expense for the three months ended September 30, 2022 and
2021 was approximately $3.7 million and $4.6 million, respectively.
The decrease in R&D expenses was primarily due to the expense
related to the issuance of common stock pursuant to the Aquarius
Merger Agreement in 2021 and decreased manufacturing expenses
partially offset by higher compensation expense related to
increased head count in 2022.
General and Administrative expenses. General and
administrative expense for the three months ended September 30,
2022 and 2021 was approximately $2.8 million and $2.3 million,
respectively. The increase in general and administrative expense
was primarily due to increased compensation expense related to
increased head count.
Comparison
of the nine months ended September 30, 2022 to the nine months
ended September 30, 2021
|
|
Nine Months Ended September 30, |
|
|
|
2022 |
|
|
2021 |
|
Revenues |
|
$ |
2,125 |
|
|
$ |
33 |
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
$ |
12,811 |
|
|
$ |
10,343 |
|
General and
administrative |
|
|
8,424 |
|
|
|
7,711 |
|
Operating
Expenses |
|
$ |
21,235 |
|
|
$ |
18,054 |
|
|
|
|
|
|
|
|
|
|
Sale of net operating losses
(NOLs) |
|
$ |
1,734 |
|
|
$ |
1,328 |
|
Revenues. During the nine months ended September 30, 2022
and 2021, we generated revenue of approximately $2.1 million and
$33 thousand. The amount earned during the current year consists of
contract research revenue resulting from the research collaboration
with BioNTech SE while the amount earned during the prior year
resulted from the feasibility study agreement with Genentech
Inc.
Research and Development expenses. Research and Development
(R&D) expense for the nine months ended September 30, 2022 and
2021 was approximately $12.8 million and $10.3 million,
respectively. The increase in R&D expenses was primarily due to
the increased clinical trials and manufacturing costs related to
the advancement of our product candidates and higher compensation
expense in 2022 partially offset by a non-recurring expense related
to the Aquarius Merger Agreement in 2021.
General and Administrative expenses. General and
administrative expense for the nine months ended September 30, 2022
and 2021 was approximately $8.4 million and $7.7 million,
respectively. The increase in general and administrative expense
was primarily due to higher compensation expense.
Sale of net operating losses (NOLs). The Company recognized
approximately $1.7 million and $1.3 million for the nine months
ended September 30, 2022 and 2021, respectively, in connection with
the sale of state net operating losses and research and development
tax credits to third parties under the New Jersey Technology
Business Tax Certificate Transfer Program.
Liquidity
and capital resources
Sources of Liquidity
We
have funded our operations since inception through private
placements and public offerings of our equity securities. As of
September 30, 2022, we have raised a total of approximately $156.7
million in gross proceeds and approximately $143.9 million, net,
from sales of our equity securities.
As of
September 30, 2022, we had cash, cash equivalents and marketable
debt securities totaling approximately $33.1 million.
Cash Flows
The
following table sets forth the primary sources and uses of cash,
cash equivalents and restricted cash for each of the periods set
forth below:
|
|
Nine Months Ended September 30, |
|
|
|
2022 |
|
|
2021 |
|
Cash used in operating
activities |
|
$ |
(14,857 |
) |
|
$ |
(11,266 |
) |
Cash provided by investing
activities |
|
|
4,919 |
|
|
|
16,713 |
|
Cash provided
by financing activities |
|
|
84 |
|
|
|
6,957 |
|
Net
(decrease)/increase in cash and cash equivalents and restricted
cash |
|
$ |
(9,854 |
) |
|
$ |
12,404 |
|
Operating Activities
Net
cash used in operating activities was approximately $14.9 million
and $11.3 million for the nine months ended September 30, 2022 and
2021, respectively. Net losses of approximately $17.4 million and
$16.6 million for the nine months ended September 30, 2022 and
2021, respectively, were partially offset by working capital
adjustments due to the timing of receipts and payments in the
ordinary course of business. We expect that there will be an
increase in cash used in operations during the remainder of 2022
and into 2023 due to higher research and development expenses as we
continue to move our product candidates and delivery platform
forward in their development cycles.
Investing Activities
Approximately
$4.9 million of net cash was provided by investing activities for
the nine months ended September 30, 2022, while approximately $16.7
million of net cash was provided by investing activities for the
nine months ended September 30, 2021. The decrease of cash provided
by investing activities of approximately $11.8 million was
primarily due to the approximately $19.5 million decrease in
proceeds received from maturities of our marketable debt
securities, offset by a decrease of approximately $8.3 million in
purchases of marketable debt securities and the purchase of
approximately $0.6 million of leasehold improvements and equipment
as compared to the nine months ended September 30, 2021.
Financing Activities
Net
cash provided by financing activities was approximately $0.1
million and $7.0 million for the nine months ended September 30,
2022 and 2021, respectively. The decrease of approximately $6.9
million is primarily due to the ATM sales during January 2021 of
approximately $5.6 million, for which the Company did not have
similar equity raises during the nine months ended September 30,
2022, and a decrease in the receipt of proceeds of approximately
$1.3 million from the exercise of stock options.
Funding Requirements and Other Liquidity Matters
We
expect to continue to incur significant expenses and increasing
operating losses for the foreseeable future. We anticipate that our
expenses will increase substantially if and as we:
● |
conduct
further preclinical and clinical studies of MAT2203, our lead
product candidate, even if such studies are primarily financed with
non-dilutive funding from the NIH; |
|
|
● |
support
the conduct of further clinical studies of MAT2501, even if such
studies are primarily financed with non-dilutive funding from the
CFF; |
|
|
● |
seek
to discover and develop additional product candidates; |
|
|
● |
seek
regulatory approvals for any product candidates that successfully
complete clinical trials; |
|
|
● |
require
the manufacture of larger quantities of product candidates for
clinical development and potentially commercialization; |
● |
maintain,
expand and protect our intellectual property portfolio; |
|
|
● |
hire
additional clinical, quality control and scientific personnel;
and |
|
|
● |
add
operational, financial and management information systems and
personnel, including personnel to support our product development
and planned future commercialization efforts and personnel and
infrastructure necessary to help us comply with our obligations as
a public company. |
We
expect that our existing cash and cash equivalents will be
sufficient to fund our operating expenses and capital expenditures
requirements through 2023.
Until
such time, if ever, that we can generate product revenues
sufficient to achieve profitability, we expect to finance our cash
needs through a combination of public and private equity offerings,
debt financings, government or other third-party funding,
collaborations and licensing arrangements. We do not have any
committed external source of funds other than limited grant funding
from the CFF and NIH. To the extent that we raise additional
capital through the sale of common stock, convertible securities or
other equity securities, the ownership interest of our stockholders
may be materially diluted, and the terms of these securities may
include liquidation or other preferences that adversely affect your
rights of our common stockholders. Debt financing and preferred
equity financing, if available, would result in increased fixed
payment obligations and may involve agreements that include
covenants limiting or restricting our ability to take specific
actions, such as incurring additional debt, making capital
expenditures or declaring dividends, that could adversely impact
our ability to conduct our business. Securing additional financing
could require a substantial amount of time and attention from our
management and may divert a disproportionate amount of their
attention away from day-to-day activities, which may adversely
affect our management’s ability to oversee the development of our
product candidates.
If we
raise additional funds through collaborations, strategic alliances
or marketing, distribution, or licensing arrangements with third
parties, we may have to relinquish valuable rights to our
technologies, future revenue streams, research programs or product
candidates or grant licenses on terms that may not be favorable to
us. If we are unable to raise additional funds through equity or
debt financings when needed, we may be required to delay, limit,
reduce or terminate our product development or future
commercialization efforts or grant rights to develop and market
product candidates that we would otherwise prefer to develop and
market ourselves.
Contractual Obligations and Commitments
On
March 7, 2022, the Company entered into an agreement with Thermo
Fisher Scientific to provide commercial manufacturing capabilities
for MAT2203. The estimated fees under the agreement, including
capital equipment requirements, are approximately $7.7 million. The
fees are expected to be incurred over a two-year period beginning
in March 2022 through the first quarter of 2024.
Off-Balance Sheet Arrangements
We
did not have during the periods presented, and we do not currently
have, any off-balance sheet arrangements, as defined under SEC
rules, such as relationships with unconsolidated entities or
financial partnerships, which are often referred to as structured
finance or special purpose entities, established for the purpose of
facilitating financing transactions that are not required to be
reflected on our balance sheets.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
Not
applicable.
Item 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and
Procedures.
Disclosure Controls and Procedures:
As of
September 30, 2022, under the supervision and with the
participation of our principal executive officer and principal
financial officer we have evaluated, the effectiveness of the
design and operation of our disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). Based on
that evaluation, our principal executive officer and principal
financial officer concluded that our disclosure controls and
procedures were effective at the reasonable assurance level as of
September 30, 2022.
Our
disclosure controls and procedures are designed to provide
reasonable assurance that information required to be disclosed in
the reports that we filed or submitted under the Exchange Act is
recorded, processed, summarized and reported within time periods
specified by the SEC’s rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed in our
reports filed under the Exchange Act is accumulated and
communicated to our management, including principal executive
officer and principal financial officer, as appropriate to allow
timely decisions regarding required disclosure.
Changes in Internal Control Over Financial
Reporting
There
were no changes in our internal control over financial reporting
identified in connection with the above evaluation that occurred
during the third quarter of 2022 that have materially affected, or
are reasonably likely to materially affect, our internal control
over financial reporting.
PART - II OTHER INFORMATION
Item 1. LEGAL PROCEEDSINGS
None.
Item 1A. RISK FACTORS
There
were no material changes from the risk factors set forth under Part
I, Item 1A., “Risk Factors” in our Annual Report on Form 10-K for
the fiscal year ended December 31, 2021. You should carefully
consider the risk factors contained in our Annual Report on Form
10-K for the fiscal year ended December 31, 2021 in addition to the
other information set forth in this report which could materially
affect our business, financial condition or future results. The
risks and uncertainties described in this report and in our Annual
Report on Form 10-K for the year ended December 31, 2021, as well
as other reports and statements that we file with the SEC, are not
the only risks and uncertainties facing us. Additional risks and
uncertainties not currently known to us or that we currently deem
to be immaterial may also have a material adverse effect on our
financial position, results of operations or cash flows.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
None.
Item 3. DEFAULTS UNDER SENIOR SECURITIES
None.
Item 4. MINE SAFETY DISCLOSURES
Not
applicable.
Item 5. OTHER INFORMATION
None.
Item 6. EXHIBITS
See
the Exhibit Index following the signature page to this Quarterly
Report on Form 10-Q for a list of exhibits filed or furnished with
this report, which Exhibit Index is incorporated herein by
reference.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
|
MATINAS
BIOPHARMA HOLDINGS, INC. |
|
|
|
BY: |
|
|
|
/s/
Jerome D. Jabbour |
Dated:
November 2, 2022 |
Jerome
D. Jabbour |
|
Chief
Executive Officer (Principal Executive Officer) |
|
|
|
/s/
Keith A. Kucinski |
Dated:
November 2, 2022 |
Keith
A. Kucinski |
|
Chief
Financial Officer |
|
(Principal
Financial and Accounting Officer) |
EXHIBIT
INDEX
*
Filed herewith.
†
Indicates a management contract or compensation plan, contract or
arrangement. Certain portions of this exhibit, that are not
material and would likely cause competitive harm to the registrant
if publicly disclosed, have been redacted pursuant to Item
601(b)(10) of Regulation S-K.
Matinas Biopharma (AMEX:MTNB)
Historical Stock Chart
From May 2023 to Jun 2023
Matinas Biopharma (AMEX:MTNB)
Historical Stock Chart
From Jun 2022 to Jun 2023