UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended:
or
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _____________ to _____________.
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Indicate
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☒ | Smaller reporting company | |||
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ADHERA THERAPEUTICS, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023
TABLE OF CONTENTS
2 |
PART I - FINANCIAL INFORMATION
ITEM I – FINANCIAL INFORMATION
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, | December 31, | |||||||
2023 | 2022 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash | $ | $ | ||||||
Prepaid expenses | ||||||||
Total Current Assets | ||||||||
Total Assets | $ | $ | ||||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | $ | $ | ||||||
Due to related parties | ||||||||
Accrued expenses | ||||||||
Accrued dividends | ||||||||
Term loans, net of discounts | ||||||||
Convertible notes payable | ||||||||
Contract liabilities | ||||||||
Derivative liabilities | ||||||||
Total Current Liabilities | ||||||||
Total Liabilities | ||||||||
Commitments and Contingencies (Note 9) | ||||||||
STOCKHOLDERS’ DEFICIT: | ||||||||
Preferred stock: $ | par value; authorized;||||||||
Series C convertible preferred stock: $ | par value; shares designated; shares issued and outstanding at September 30, 2023 and December 31, 2022 ($||||||||
Series D convertible preferred stock: $ | par value; shares designated; shares issued and outstanding at September 30, 2023 and December 31, 2022 ($||||||||
Series E convertible preferred stock: $ | par value; shares designated; shares issued and outstanding at September 30, 2023 and December 31, 2022 ($||||||||
Series F convertible preferred stock: $ | par value; shares designated; shares issued and outstanding at September 30, 2023 and December 31, 2022||||||||
Series G convertible preferred stock: $ | par value; shares designated; shares issued and outstanding at September 30, 2023 and December 31, 2022||||||||
Common stock: $ | par value, shares authorized; and shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively||||||||
Additional paid-in capital | ||||||||
Treasury stock ( | shares, at cost)( | ) | ( | ) | ||||
Accumulated deficit | ( | ) | ( | ) | ||||
Total Stockholders’ Deficit | ( | ) | ( | ) | ||||
Total Liabilities and Stockholders’ Deficit | $ | $ |
See accompanying condensed notes to unaudited consolidated financial statements.
3 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
REVENUES, NET | $ | $ | $ | $ | ||||||||||||
OPERATING EXPENSES: | ||||||||||||||||
Professional fees | ||||||||||||||||
Compensation expense | ||||||||||||||||
General and administrative expenses | ||||||||||||||||
Total Operating Expenses | ||||||||||||||||
LOSS FROM OPERATIONS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
OTHER INCOME (EXPENSES): | ||||||||||||||||
Interest expense, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Amortization of debt discount | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Gain on debt extinguishment, net | ||||||||||||||||
Loan inducement expense | ( | ) | ||||||||||||||
Derivative income (expense) | ( | ) | ( | ) | ( | ) | ||||||||||
Total Other Income (Expenses), net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
NET LOSS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Accrued preferred stock dividends | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
NET LOSS PER COMMON SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS: | ||||||||||||||||
Basic | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||||||
Basic | ||||||||||||||||
Diluted |
See accompanying condensed notes to unaudited consolidated financial statements.
4 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
Preferred Stock | Common Stock | Additional | Treasury Stock | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series C of Shares | Amount | Series D of Shares | Amount | Series E of Shares | Amount | Series F of Shares | Amount | of Shares | Amount | Paid-in Capital | of Shares | Amount | Accumulated Deficit | Stockholders’ Deficit | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | | $ | | $ | | $ | $ | $ | $ | $ | ( | ) | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||||||||||
Accrued dividend | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for convertible note conversions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued dividend | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for convertible note conversions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance on June 30, 2023 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued dividend | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for convertible note and accrued interest conversions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for cashless warrant exercises | - | - | - | - | ( | ) | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance on September 30, 2023 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Preferred Stock | Common Stock | Additional | Treasury Stock | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series C of Shares | Amount | Series D of Shares | Amount | Series E of Shares | Amount | Series F of Shares | Amount | of Shares | Amount | Paid-in Capital | of Shares | Amount | Accumulated Deficit | Stockholders’ Deficit | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | | $ | | $ | | $ | | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||||||||||
Accrued dividend | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock with convertible notes | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for convertible note conversions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued dividend | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock with term loan | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Series E Preferred to common stock | - | - | ( | ) | ( | ) | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Series F Preferred to common stock | - | - | - | ( | ) | ( | ) | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance on June 30, 2022 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued dividend | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance on September 30, 2022 | ( | ) | ( | ) | ( | ) |
See accompanying condensed notes to unaudited consolidated financial statements.
5 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Nine Months Ended | ||||||||
September 30, | ||||||||
2023 | 2022 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | ( | ) | $ | ( | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Gain on debt extinguishment | ( | ) | ( | ) | ||||
Derivative expense (income) | ( | ) | ||||||
Amortization of debt discount and fees | ||||||||
Inducement expense | ||||||||
Change in operating assets and liabilities: | ||||||||
Prepaid expenses and other assets | ( | ) | ||||||
Accounts payable | ( | ) | ( | ) | ||||
Accrued expenses | ||||||||
Contract liabilities | ||||||||
NET CASH USED IN OPERATING ACTIVITIES | ( | ) | ( | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from notes payable | ||||||||
Proceeds from convertible notes payable | ||||||||
Notes payable and convertible notes issuance costs | ( | ) | ( | ) | ||||
Repayment of convertible notes payable | ( | ) | ( | ) | ||||
Purchase of treasury stock | ( | ) | ||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | ||||||||
NET INCREASE IN CASH | ||||||||
CASH, beginning of the period | ||||||||
CASH, end of the period | $ | $ | ||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | $ | ||||||
Income taxes | $ | $ | ||||||
Non-cash investing and financing activities: | ||||||||
Conversion of Series E to common stock | $ | $ | ||||||
Conversion of Series F to common stock | $ | $ | ||||||
Debt discounts for issuance costs, warrants and derivatives | $ | $ | ||||||
Issuance of common stock for conversion of convertible notes and accrued interest | $ | $ | ||||||
Accrued and deemed dividends | $ | $ |
See accompanying condensed notes to unaudited consolidated financial statements.
6 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
NOTE 1 – ORGANIZATION AND BUSINESS OPERATIONS
Adhera Therapeutics, Inc. and its wholly-owned subsidiaries(collectively “Adhera,” “we”, or the “Company”), historically focused on drug development and commercialization of “small molecule” drugs to treat Parkinson’s disease (PD) and Type 1 diabetes. More recently, as it has struggled to operate with very limited working capital, it has been seeking to license a diabetes drug to a publicly-traded Nasdaq company as described in Note 9.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. This quarterly report should be read in conjunction with the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The information furnished in this Report reflects all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for each period presented. The results of operations for the nine months ended September 30, 2023, are not necessarily indicative of the results for the year ending December 31, 2023, or for any future period.
Principles of Consolidation
The consolidated financial statements include the accounts of Adhera Therapeutics, Inc. and the wholly-owned subsidiaries and eliminates any inter-company balances and transactions. All wholly-owned subsidiaries of Adhera Therapeutics, Inc. are inactive.
Going Concern and Management’s Liquidity Plans
The
accompanying unaudited condensed consolidated financial statements have been prepared on the basis that the Company will continue as
a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. As of
September 30, 2023, the Company had approximately $
The
Company has no revenues and has incurred recurring losses and negative cash flows from operations since inception and has funded its
operating losses through the sale of common stock, preferred stock, warrants to purchase common stock, convertible notes and secured
promissory notes. The Company incurred a net loss and net cash used in operating activities of $
In addition, to the extent that the Company continues its business operations, the Company anticipates that it will continue to have negative cash flows from operations, at least into the near future. However, the Company cannot be certain that it will be able to obtain such funds required for our operations at terms acceptable to the Company or at all. General market conditions, as well as market conditions for companies in the Company’s financial and business position, as well as the ongoing issue arising from the COVID-19 pandemic, the war in Ukraine, the war in Israel, federal bank failures or other world-wide events, may make it difficult for the Company to seek financing from the capital markets, and the terms of any financing may adversely affect the holdings or the rights of its stockholders. If the Company is unable to obtain additional financing in the future, it will cease operations. . The Company plans to increase working capital by managing its cash flows and expenses, divesting development assets and raising additional capital through private or public equity or debt financing. There can be no assurance that such financing or partnerships will be available on terms which are favorable to the Company or at all. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance date of this Report. The consolidated financial statements do not contain any adjustments that might result from the resolution of any of the above uncertainties.
7 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
Reverse Stock Split
On
September 30, 2022, the Company filed a Certificate of Amendment to the Certificate of Incorporation with the Delaware Secretary of State
to effect a reverse stock split of all outstanding shares of the Company’s common stock at a ratio of
All disclosures of common shares and per common share data in the accompanying consolidated financial statements and related notes reflect the reverse stock split for all periods presented.
Cash and Cash Equivalents
The
Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.
As of September 30, 2023, the Company had approximately $
The Company deposits its cash with a major financial institution that may at times exceed the federally insured limit. As of September 30, 2023, the Company’s cash balance did not exceed the federal deposit insurance limit.
Use of Estimates
The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Significant areas requiring the use of management estimates include accruals related to our operating activity including legal and other consulting expenses, the fair value of non-cash equity-based issuances, the fair value of derivative liabilities, and the valuation allowance on deferred tax assets. Actual results could differ materially from such estimates under different assumptions or circumstances.
Fair Value of Financial Instruments
The Company considers the fair value of cash, accounts payable, debt, and accrued expenses not to be materially different from their carrying value. These financial instruments have short-term maturities. We follow authoritative guidance with respect to fair value reporting issued by the Financial Accounting Standards Board (“FASB”) for financial assets and liabilities, which defines fair value, provides guidance for measuring fair value and requires certain disclosures. The guidance does not apply to measurements related to share-based payments. The guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into six broad levels. The following is a brief description of those six levels:
Level 1: | Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. |
8 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
Level 2: | Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. |
Level 3: | Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. |
As
of September 30, 2023, the Company measured conversion features on outstanding convertible notes and warrants as a derivative liability
using significant unobservable prices that are based on little or no verifiable market data, which is Level 3 in the fair value hierarchy,
resulting in a fair value estimate of approximately $
Fair Value Measurements at September 30, 2023 | ||||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Other Observable Inputs | Significant Unobservable Inputs | ||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
Derivative liability | $ | $ | $ | $ | ||||||||||||
Total | $ | $ | $ | $ |
A roll forward of the level 3 valuation financial instruments is as follows:
Nine Months Ended September 30, 2023 | ||||||||||||
Warrants | Notes | Total | ||||||||||
Balance at December 31, 2022 | $ | $ | $ | |||||||||
Initial valuation of derivative liabilities included in debt discount | ||||||||||||
Initial valuation of derivative liabilities included in derivative expense | ||||||||||||
Reclassification of derivative liabilities to gain on debt extinguishment | ( | ) | ( | ) | ||||||||
Change in fair value included in derivative expense (income) | ( | ) | ( | ) | ||||||||
Balance at September 30, 2023 | $ | $ | $ |
ASC 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding equity instruments.
9 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
Convertible Debt and Warrant Accounting
Debt with warrants
In accordance with ASC Topic 470-20-25, when the Company issues debt with warrants, the Company treats the relative fair value of the warrants as a debt discount, recorded as a contra-liability against the debt, and amortizes the balance over the life of the underlying debt as amortization of debt discount expense in the consolidated statements of operations. The offset to the contra-liability is recorded as additional paid-in capital in the Company’s consolidated balance sheets if the warrants are not treated as a derivative. The Company determines the fair value of the warrants using the Black-Scholes Option Pricing Model (“Black-Scholes”), the binomial model or the Monte Carlo Method based upon the underlying conversion features of the debt and then computes and records the relative fair value as a debt discount. If the warrant is treated as a derivative liability, the derivative liability is recorded at fair value and the difference between the derivative liability and debt discount is recorded as an initial derivative expense. If the debt is retired early, the associated debt discount is then recognized immediately as amortization of debt discount expense in the consolidated statements of operations.
Convertible debt – derivative treatment
When the Company issues debt with a conversion feature, it first assesses whether the conversion feature meets the requirements to be accounted for as stock settled debt. If it does not meet those requirements then it is assessed on whether the conversion feature should be bifurcated and treated as a derivative liability, as follows: a) one or more underlyings, typically the price of our common stock; b) one or more notional amounts or payment provisions or both, generally the number of shares upon conversion; c) no initial net investment, which typically excludes the amount borrowed; and d) net settlement provisions, which in the case of convertible debt generally means the stock received upon conversion can be readily sold for cash. An embedded equity-linked component that meets the definition of a derivative does not have to be separated from the host instrument if the component qualifies for the scope exception for certain contracts involving an issuer’s own equity. The scope exception applies if the contract is both a) indexed to its own stock; and b) classified in stockholders’ equity in its statement of financial position.
Recently Issued Accounting Pronouncements
Accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.
Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common shares and common stock equivalents outstanding for the period. Common stock equivalents are only included when their effect is dilutive. Potentially dilutive securities which include outstanding warrants, stock options, convertible notes and preferred stock have been excluded from the computation of diluted net loss per share as their effect would be anti-dilutive. For all periods presented, basic and diluted net loss were the same.
September 30, | ||||||||
2023 | 2022 | |||||||
Stock options outstanding | ||||||||
Convertible notes | ||||||||
Warrants | ||||||||
Series C Preferred Stock | ||||||||
Series D Preferred Stock | ||||||||
Series E Preferred Stock | ||||||||
Total |
10 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
The Company applies the provisions of ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and non-employees, including stock options, in the statements of operations.
For stock options issued, the Company estimates the grant date fair value of each option using the Black-Scholes option pricing model. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. For awards subject to service-based vesting conditions, including those with a graded vesting schedule, the Company recognizes stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period, which is generally the vesting term. Forfeitures are recorded as they are incurred as opposed to being estimated at the time of grant and revised if and when a forfeiture becomes probable.
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry forwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
The Company accounts for income taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates.
Reclassifications
Certain reclassifications have been made in the consolidated financial
statements to conform to the current period presentation. Such reclassifications had no impact on the Company’ previously reported
consolidated financial position or results of operations. Specifically, on the consolidated financial statements, all amounts are now
reflected in whole dollars and all rounding to thousands has been eliminated. Additionally, on the consolidated statements of operations,
professional fees and compensation expense has been reclassified from general and administrative expenses and are shown separately as
part of operating expenses. Furthermore, for the nine months ended September 30, 2022, certain reclassifications were made on the consolidated
statement of cash flows to conform to the current presentation. The reclassification on the 2022 consolidated statement of cash flow increased
cash flows used in operations by approximately $
NOTE 3 – PREPAID EXPENSES
As
of September 30, 2023, and December 31, 2022, prepaid expenses totaled $
NOTE 4 – NOTES PAYABLE AND CONVERTIBLE PROMISSORY NOTES
The following table summarizes the Company’s outstanding term loans:
September 30, 2023 | December 31, 2022 | |||||||
2019 Term Loan | $ | $ | ||||||
2022 Term Loans | ||||||||
2023 Term Loans | ||||||||
Unamortized discounts and fees | ( | ) | ( | ) | ||||
$ | $ |
As of September 30, 2023, the 2019 Term Loan was in default.
11 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
2019 Term Loan
During
2019, the Company entered into term loan subscription agreements with certain accredited investors, pursuant to which the Company issued
secured promissory notes in the aggregate principal amount of approximately $
The
promissory notes accrued interest at a rate of
The
unpaid principal balance of the notes, plus accrued and unpaid interest thereon, matured on
On June 26, 2021, the holders of the 2019 Term Loans agreed to subordinate their lien and security interest in the assets of the Company and its subsidiaries as set forth in the Security Agreement dated June 28, 2019, to the holders of the June 2021 convertible notes.
On April 19, 2022, a majority of the noteholders of the secured non-convertible promissory notes of the Company issued between June 18, 2019, and August 5, 2019, which matured on August 5, 2020, consented to forbear collection efforts until September 30, 2022. Accordingly, the collateral agent for the noteholders in consideration of the signed noteholder agreements agreed to forbear all notes outstanding.
On November 16, 2022, holders of outstanding promissory notes representing a majority of the outstanding principal and accrued interest of the Notes, agreed to amend the Notes to make them automatically convertible into units consisting of a new series of convertible preferred stock and warrants upon an up listing financing transaction in which the Company’s common stock is listed on The Nasdaq Capital Market or the NYSE American, in exchange for the Holders agreeing to forbear repayment of their Notes and accrued interest until the Up listing Transaction has been completed.
The terms for the amendment of the Notes include no less than the following:
● | The
Notes will automatically convert upon the Uplisting Transaction into the Preferred Stock at | |
● | In
addition, each Holder will receive | |
● | The shares of Preferred Stock will be subject to a six-month lock-up period from date of issuance; and | |
● | The Company has agreed to register the Holders’ sale of the shares of common stock issuable upon conversion of the Preferred Stock and upon the exercise of the Warrants such that those shares will be freely tradeable following the up-list transaction and expiration of the lock-up period. |
The shares of the Preferred Stock will be entitled to vote on an as-converted-to-common basis together with the Company’s common stock. The shares of the Preferred Stock will automatically convert into shares of common stock upon expiration of the lock-up period at the conversion price of a percentage of a 30-day VWAP of common stock.
The interest on the Notes, as accrued through the date of conversion, will convert into common stock at the offering price for the up-list transaction.
The
Company recognized $
As
of September 30, 2023, the Company had $
12 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
2022 Term Loan – May
On
May 11, 2022, the Company entered into a Securities Purchase Agreement with investors whereby the Company issued the Purchasers Original
Issue Discount Promissory Notes in the aggregate principal amount of $
The
Notes were due on the earliest to occur of
The
Company recorded a total debt discount of $
The Company’s obligations under the Notes are secured by a first priority lien on all of the assets of the Company and its wholly-owned subsidiaries pursuant to a Security Agreement, dated May 11, 2022 and among the Company, its wholly-owned subsidiaries, the Purchasers, and the lead investor as the collateral agent.
The
Warrants were exercisable for a
On
January 10, 2023, the exercise price of the warrants was adjusted to $
On
April 14, 2023, the exercise price of the warrants was adjusted to $
On
April 28, 2023, the exercise price of the warrants was adjusted to $
On
May 10, 2023, the exercise price of the warrants was adjusted to $
On
May 11, 2023, the Company elected to extend the maturity date on the loan by six-months to
13 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
On
June 23, 2023, the exercise price of the warrants was adjusted to $
During
the three months ended September 30, 2023, the exercise price of the warrants was adjusted from $
During
the three and nine months ended September 30, 2023, the Company increased the outstanding principal amount of the notes by approximately
$
For
the three and nine months ended September 30, 2023, the Company recognized approximately $
As
of September 30, 2023, the Company has recorded $
2022 Term Loan – December
On
December 14, 2022, the Company entered into a Securities Purchase Agreement with an accredited investor pursuant to which the Company
issued and sold the investor a non-convertible Original Issue Discount Senior Secured Promissory Note in the principal amount of $
The
Notes are due on the earliest to occur of
The unpaid principal amount of this Note, together with any interest accrued but unpaid thereon, may, at the sole discretion of the Company, be converted into shares of a new class of convertible preferred stock of the Company on the closing date on which the Company completes a public offering for cash of common stock and/or common stock equivalents which results in the listing of the Company’s common stock on a “national securities exchange” as defined in the Securities Exchange Act of 1934 (a “Qualified Financing”).
The
Company recorded a total debt discount of $
14 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
The Company’s obligations under the Notes are secured by a first priority lien on all of the assets of the Company and its wholly-owned subsidiaries pursuant to a Security Agreement, dated May 11, 2022 and among the Company, its wholly-owned subsidiaries, the Purchasers, and the lead investor as the collateral agent.
The
Warrants were exercisable for a
On
January 10, 2023, the exercise price of the warrants was adjusted to $
On
April 14, 2023, the exercise price of the warrants was adjusted to $
On
April 28, 2023, the exercise price of the warrants was adjusted to $
On
May 10, 2023, the exercise price of the warrants was adjusted to $
On
June 23, 2023, the exercise price of the warrants was adjusted to $
During
the three months ended September 30, 2023, the exercise price of the warrants was adjusted from $
For
the three and nine months ended September 30, 2023, the Company recognized approximately $
As
of September 30, 2023, the Company has recorded $
2023 Term Loans
January 18, 2023
On
January 18, 2023, the Company entered into a Securities Purchase Agreement with two accredited investors pursuant to which the Company
issued and sold the investors a non-convertible Original Issue
The
Company also agreed to increase the principal amount of prior Original Issue Discount Promissory Notes issued to the investor in May
2022 by
The
Notes are due on the earliest to occur of
15 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
The unpaid principal amount of this Note, together with any interest accrued but unpaid thereon, may, at the sole discretion of the Company, be converted into shares of a new class of convertible preferred stock of the Company on the closing date on which the Company completes a public offering for cash of common stock and/or common stock equivalents which results in the listing of the Company’s common stock on a “national securities exchange” as defined in the Securities Exchange Act of 1934 (a “Qualified Financing”).
The
Company recorded a total debt discount of $
The
Warrants were exercisable for a
On
April 14, 2023, the conversion price of the warrants was adjusted to $
On
April 28, 2023, the conversion price of the warrants was adjusted to $
On
May 10, 2023, the conversion price of the warrants was adjusted to $
On
June 23, 2023, the conversion price of the warrants was adjusted to $
During
the three months ended September 30, 2023, the exercise price of the warrants was adjusted from $
During
both the three and nine months ended September 30, 2023, the Company increased the outstanding principal amount of the notes by $
For
the three and nine months ended September 30, 2023, the Company recognized approximately $
As
of September 30, 2023, the Company has recorded $
February 3, 2023
On
February 3, 2023, the Company entered into a Securities Purchase Agreement with an accredited investor pursuant to which the Company
issued and sold the investor a non-convertible Original Issue
16 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
The
Notes are due on the earliest to occur of
The unpaid principal amount of this Note, together with any interest accrued but unpaid thereon, may, at the sole discretion of the Company, be converted into shares of a new class of convertible preferred stock of the Company on the closing date on which the Company completes a public offering for cash of common stock and/or common stock equivalents which results in the listing of the Company’s common stock on a “national securities exchange” as defined in the Securities Exchange Act of 1934 (a “Qualified Financing”)
The
Company recorded a total debt discount of approximately $
The
Warrants were exercisable for a
On
April 14, 2023, the exercise price of the warrants was adjusted to $
On
April 28, 2023, the exercise price of the warrants was adjusted to $
On
May 10, 2023, the exercise price of the warrants was adjusted to $
On
June 23, 2023, the exercise price of the warrants was adjusted to $
During
the three months ended September 30, 2023, the exercise price of the warrants was adjusted from $
For
the three and nine months ended September 30, 2023, the Company recognized $
As
of September 30, 2023, the Company has recorded $
17 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
February 16, 2023
On
February 16, 2023, the Company entered into a Securities Purchase Agreements with two accredited investors pursuant to which the Company
issued and sold the investor a non-convertible Original Issue
The
Company also agreed to increase the principal amount of prior Original Issue Discount Promissory Notes issued to the investors in May
2022 by
The
Notes are due on the earlier of (i) the 12 month anniversary of the issuance date, and (ii) the date on which the Company completes a
public offering for cash of common stock and/or common stock equivalents which results in the listing of the Company’s common stock
on a “national securities exchange” as defined in the Securities Exchange Act of 1934 (a “Qualified Financing”),
provided that unless there is an event of default, the Company may extend the maturity date by six months in its discretion.
The Notes may, at the discretion of the Company, be converted into shares of a new class of convertible preferred stock of the Company (the “Convertible Preferred Stock”) on the closing date of the Qualified Financing. In the event of the conversion, the holder will receive a number of shares of Convertible Preferred Stock equal to the quotient obtained by dividing (i) the unpaid principal amount of this Note (together with any interest accrued but unpaid thereon) by (ii) the closing price of the securities issued in the Qualified Financing on the closing date of the Qualified Financing. Upon issuance, the conversion price of the Convertible Preferred Stock will be equal to the closing price of the securities issued in the Qualified Financing, subject to adjustment.
The
Company recorded a total debt discount of $
The
Warrants were exercisable for a
On
April 14, 2023, the conversion price of the warrants was adjusted to $
On
April 28, 2023, the conversion price of the warrants was adjusted to $
On
May 10, 2023, the conversion price of the warrants was adjusted to $
On
June 23, 2023, the conversion price of the warrants was adjusted to $
During
the three months ended September 30, 2023, the exercise price of the warrants was adjusted from $
18 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
During
the three and nine months ended September 30, 2023, the Company increased the outstanding principal amount of the notes by $
For
the three and nine months ended September 30, 2023, the Company recognized $
As
of September 30, 2023, the Company has recorded $
April 28, 2023
On
April 28, 2023, the Company entered into Securities Purchase Agreements with three accredited investors pursuant to which the Company
issued and sold the investors non-convertible Original Issue
The
Company also agreed to increase the principal amount of prior Original Issue Discount Promissory Notes issued to the investor in May
2022 and January 2023 by
The
Notes are due on the earlier of
The Notes may, at the discretion of the Company, be converted into shares of a new class of convertible preferred stock of the Company (the “Convertible Preferred Stock”) on the closing date of the Qualified Financing. In the event of the conversion, the holder will receive a number of shares of Convertible Preferred Stock equal to the quotient obtained by dividing (i) the unpaid principal amount of this Note (together with any interest accrued but unpaid thereon) by (ii) the closing price of the securities issued in the Qualified Financing on the closing date of the Qualified Financing. Upon issuance, the conversion price of the Convertible Preferred Stock will be equal to the closing price of the securities issued in the Qualified Financing, subject to adjustment.
The
Company recorded a total debt discount of $
The
Warrants issued with promissory notes were exercisable for a
On
May 10, 2023, the conversion price of the warrants was adjusted to $
19 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
On
June 23, 2023, the conversion price of the warrants was adjusted to $
During
the three months ended September 30, 2023, the exercise price of the warrants was adjusted from $
For
the three and nine months ended September 30, 2023, the Company recognized $
As
of September 30, 2023, the Company has recorded $
June 22, 2023
On
June 22, 2023, the Company entered into Securities Purchase Agreements with four accredited investors pursuant to which the Company issued
and sold the investors non-convertible Original Issue Discount Senior Secured Promissory Notes in the aggregate principal amount of $
The
Notes are due on the earlier of
The Notes may, at the discretion of the Company, be converted into shares of a new class of convertible preferred stock of the Company (the “Convertible Preferred Stock”) on the closing date of the Qualified Financing. In the event of the conversion, the holder will receive a number of shares of Convertible Preferred Stock equal to the quotient obtained by dividing (i) the unpaid principal amount of this Note (together with any interest accrued but unpaid thereon) by (ii) the closing price of the securities issued in the Qualified Financing on the closing date of the Qualified Financing. Upon issuance, the conversion price of the Convertible Preferred Stock (the “Preferred Conversion Price”) will be equal to the closing price of the securities issued in the Qualified Financing, subject to adjustment.
The
Notes provide for certain customary events of default which include failure to maintain the required reserve of shares for the Warrants,
a restatement of the financial statements of the Company resulting in a reduction to the stock price by an enumerated threshold, and
certain other customary events of default, subject to certain exceptions and limitations. Upon an event of default, the Notes will become
immediately due and payable at a
20 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
The
Company recorded a total debt discount of $
The
Warrants issued with promissory notes were exercisable for a
On
June 23, 2023, the conversion price of the warrants was adjusted to $
During
the three months ended September 30, 2023, the exercise price of the warrants was adjusted from $
For
the three and nine months ended September 30, 2023, the Company recognized $
As
of September 30, 2023, the Company has recorded $
CONVERTIBLE PROMISSORY NOTES
The following table summarizes the Company’s outstanding convertible notes as of September 30, 2023, and December 31, 2022:
September 30, 2023 | December 31, 2022 | |||||||
Convertible Notes | $ | $ | ||||||
Unamortized discounts | ( | ) | ||||||
$ | $ |
All
convertible notes including accrued interest were in default as of the issuance date of this Report. As of September 30, 2023, accrued
interest totaled $
Secured Convertible Promissory Note – February 2020
On
February 5, 2020, the Company entered into a Securities Purchase Agreement with accredited investors and issued the investors, (i) original
issue discount Convertible Promissory Notes with a principal of $
The
Convertible Notes matured on
21 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
Until
the Convertible Notes are no longer outstanding, the Convertible Notes are convertible, in whole or in part, at any time, and from time
to time, into shares of Common Stock at the option of the noteholder. The conversion price is the lower of: (i) $
The
exercise price of the Warrants shall be equal to the conversion price of the Convertible Notes, provided, that on the date that the Convertible
Notes are no longer outstanding, the exercise price shall be fixed at the conversion price of the Convertible Notes on such date, with
the exercise price of the Warrants thereafter (and the number of shares of Common Stock issuable upon the exercise thereof) being subject
to adjustment as set forth in the Warrants. The warrants have a
The
Company recorded a discount related to the Warrants of approximately $
On
January 27, 2022, the conversion price of the notes and warrants was adjusted to be the lower of (x)
On
January 10, 2023, the conversion price of the notes and warrants was adjusted to be the lower of (x)
On
April 14, 2023, the conversion price of the notes and warrants was adjusted to be the lower of (x)
On
April 28, 2023, the conversion price of the notes and warrants was adjusted to be the lower of (x)
On
May 10, 2023, the conversion price of the notes and warrants was adjusted to be the lower of (x)
On
June 23, 2023, the conversion price of the notes and warrants was adjusted to be the lower of (x)
During the three months ended September 30, 2023, the conversion price of the notes and exercise price of the warrants was adjusted from $ to $ as a result of issuing common stock for convertible note conversions.
22 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
The
Company recognized $
As
of September 30, 2023, the Company remains in default on the repayment of $
Secured Convertible Promissory Note – June 2020
On
June 26, 2020, the Company issued to an existing investor in the Company a
The
Note is convertible, in whole or in part, into shares of common stock of the Company at the option of the noteholder at a conversion
price of $
The
obligations of the Company under the Note are secured by a senior lien and security interest in all of the assets of the Company and
certain of its wholly-owned subsidiaries pursuant to the terms and conditions of a Security Agreement dated June 26, 2020 by the Company
in favor of the noteholder. In connection with the issuance of the Note, the holders of the secured promissory notes that the Company
issued to select accredited investors between June 28, 2019 and August 5, 2019 in the aggregate principal amount of approximately $
On
January 27, 2022, the conversion price of the note was adjusted to the lower of
On
January 10, 2023, the conversion price of the note was adjusted to the lower of
On
April 14, 2023, the conversion price of the note was adjusted to the lower of
23 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
On
April 28, 2023, the conversion price of the note was adjusted to the lower of
On
May 10, 2023, the conversion price of the note was adjusted to the lower of
On
June 23, 2023, the conversion price of the note was adjusted to the lower of
During
the three months ended September 30, 2023, the conversion price of the note was adjusted to the lower of
For
the three months ended September 30, 2023 and 2022, the Company recognized $
As
of September 30, 2023, the Company remains in default on the repayment of principal of $
Secured Convertible Promissory Note – October 2020
On
October 30, 2020, the Company issued to an existing investor in and lender to the Company a
The obligations of the Company under the note are secured by a senior lien and security interest in all of the assets of the Company.
The
Company recorded approximately $
The
interest rate on the note was
24 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
Additionally,
the Company issued the noteholder
The
Company recorded a discount related to the warrants of approximately $
On
January 27, 2022, the exercise price of the notes and warrants was adjusted from the default conversion price of $
On
January 10, 2023, the exercise price of the notes and warrants was adjusted from the default conversion price of $
On
April 14, 2023, the exercise price of the notes and warrants was adjusted from the default conversion price of $
On
April 28, 2023, the exercise price of the notes and warrants was adjusted from the default conversion price of $
On
May 10, 2023, the exercise price of the notes and warrants was adjusted from the default conversion price of $
On
June 23, 2023, the exercise price of the notes and warrants was adjusted from the default conversion price of $
During
the three months ended September 30, 2023, the conversion price of the notes and exercise price of the warrants was adjusted from the
default conversion price of $
As
of September 30, 2023,
25 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
For
the nine months ended September 30, 2023 and 2022, the Company recognized $
As
of September 30, 2023, the Company has outstanding principal of $
As
of September 30, 2023, the Company remains in default on the repayment of principal and interest on the notes. Upon demand for repayment
at the election of the holder, the holder of the note is due
Secured Convertible Promissory Note – January 2021
On
January 31, 2021, the Company issued to an existing investor in and lender to the Company a
The obligations of the Company under the Note are secured by a senior lien and security interest in all assets of the Company.
Additionally,
the Company issued to the investor
The
Company recorded approximately $
The
interest rate on the note was
The
Company recorded a discount related to the warrants of approximately $
The
Company also recorded a debt discount related to the convertible debt of approximately $
Total
discounts recorded including the original issue discount were approximately $
26 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
On
January 27, 2022, the exercise price of the notes and warrants was adjusted from the default conversion price of $
On
January 10, 2023, the exercise price of the notes and warrants was adjusted from the default conversion price of $
On
April 14, 2023, the exercise price of the notes and warrants was adjusted from the default conversion price of $
On
April 28, 2023, the exercise price of the notes and warrants was adjusted from the default conversion price of $
On
May 10, 2023, the exercise price of the notes and warrants was adjusted from the default conversion price of $
On
June 23, 2023, the exercise price of the notes and warrants was adjusted from the default conversion price of $
During
the three months ended September 30, 2023, the conversion price of the notes and exercise price of the warrants was adjusted from the
default conversion price of $
As
of September 30, 2023,
For
nine months ended September 30, 2023 and 2022, the Company recognized approximately $
As
of September 30, 2023, the Company has outstanding principal of $
As
of September 30, 2023, the Company remains in default on the repayment of principal and accrued interest on the notes. Upon demand for
repayment at the election of the holder, the holder of the note is due
Secured Convertible Promissory Note – April 2021
On
April 12, 2021, the Company issued to an accredited investor in and lender to the Company a
27 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
The
note matured on October 12, 2021, prior to default, interest accrued on the aggregate unconverted and then outstanding principal amount
of the note at the rate of
The
Note is convertible, in whole or in part, at any time, and from time to time, into shares of the common stock of the Company at the option
of the noteholder at a conversion price of $
The
Company recorded a discount related to the warrants of approximately $
On
June 25, 2021, the exercise price of the warrants was adjusted to $
On
November 4, 2021, the Company issued
On
November 30, 2021, the exercise price of the warrants was adjusted to $
On
January 27, 2022, the exercise price of the note and warrants was adjusted from the default conversion price of $
During
the year ended December 31, 2022, the Company repaid $
On
January 10, 2023, the exercise price of the note and warrants was adjusted from the default conversion price of $
On
April 14, 2023, the exercise price of the notes and warrants was adjusted from the default conversion price of $
On
April 28, 2023, the exercise price of the notes and warrants was adjusted from the default conversion price of $
28 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
On
May 10, 2023, the exercise price of the notes and warrants was adjusted from the default conversion price of $
On
June 23, 2023, the exercise price of the notes and warrants was adjusted from the default conversion price of $
During
the three months ended September 30, 2023, the conversion price of the notes and exercise price of the warrants was adjusted from the
default conversion price of $
As
of September 30, 2023,
For
the three and nine months ended September 30, 2023, the Company recognized $
As
of September 30, 2023, the Company has recorded $
As
of September 30, 2023, the Company remains in default on the repayment of principal and accrued interest on the notes. Upon demand for
repayment at the election of the holder, the holder of the note is due
Secured Convertible Promissory Note – June 2021
On
June 25, 2021, the Company issued to an accredited investor in and lender to the Company a
The
note matures one year from issuance, or such earlier date as the note is required or permitted to be repaid. Interest shall accrue on
the aggregate unconverted and then outstanding principal amount of the note at the rate of
The
Note is convertible, in whole or in part, at any time, and from time to time, into shares of the common stock of the Company at the option
of the noteholder at a conversion price of $
29 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
The obligations of the Company under the Note are secured by a senior lien and security interest in all assets of the Company.
The
Company incurred approximately $
The
Company also issued
Due
to the variability in the conversion price of the Note the embedded conversion option has been bifurcated and reflected as a derivative
liability with an initial fair value of $
Total
discounts recorded were $
On
August 11, 2021, the exercise price of the warrants was adjusted to $
On October 27, 2021, the Company and the institutional investor who holds the convertible promissory note agreed to extend the maturity date of the note by six months to December 25, 2022, for no consideration.
On
November 30, 2021, the exercise price of the warrants was adjusted to $
On
January 27, 2022, the holder of the June 25, 2021, convertible note converted $
On December 25, 2022, the Company defaulted on the extended maturity date of the note.
On
January 10, 2023, the exercise price of the notes and warrants was adjusted from the default conversion price of $
On
April 14, 2023, the exercise price of the notes and warrants was adjusted from the default conversion price of $
30 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
On
April 28, 2023, the exercise price of the notes and warrants was adjusted from the default conversion price of $
On
May 10, 2023, the exercise price of the notes and warrants was adjusted from the default conversion price of $
On
June 23, 2023, the exercise price of the notes and warrants was adjusted from the default conversion price of $
During
the three months ended September 30, 2023, the exercise price of the notes and warrants was adjusted from the default conversion price
of $
As
of September 30, 2023,
During
the three months ended September 30, 2023, the Company issued
The
Company recognized approximately a $
For
the three and nine months ended September 30, 2023, the Company recognized $
At
September 30, 2023, the Company has recorded $
Convertible Promissory Note – August 11, 2021
On
August 11, 2021, the Company entered into a Securities Purchase Agreement with an accredited institutional investor pursuant to which
the Company issued to the investor its Original Issue Discount Secured Convertible Promissory Note in the principal amount of $
The
note matured in August 2021 and absent an event of default provides for an interest rate of
31 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
In addition to customary anti-dilution adjustments the Note provides, subject to certain limited exceptions, that if the Company issues any common stock or common stock equivalents, as defined in the Note, at a per share price lower than the conversion price then in effect, the conversion price will be reduced to the per share price at which such shares or common share equivalents were sold.
The
Warrants are initially exercisable for a period of five years at a price of $
The
Company incurred approximately $
The Company also issued shares of common stock to the investment banker as a commission on the note.
Due
to the variability in the conversion price of the Note the embedded conversion option has been bifurcated and reflected as a derivative
liability with an initial fair value of $
The
Company recorded a total debt discount of $
The
fair value of the warrants on which the relative fair value was based was determined by using a simple binomial lattice model. The assumptions
used in the model were a risk-free rate of
On
November 30, 2021, the exercise price of the warrants was adjusted to $
On
January 27, 2022, the conversion price of the notes was adjusted to the lower of $
On
May 12, 2022, the Company repaid $
On
January 10, 2023, the conversion price of the notes was adjusted to the lower of $
32 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
On
April 14, 2023, the conversion price of the notes was adjusted to the lower of $
On
April 28, 2023, the conversion price of the notes was adjusted to the lower of $
On
May 10, 2023, the conversion price of the notes was adjusted to the lower of $
On
June 23, 2023, the conversion price of the notes was adjusted to the lower of $
During
the three months ended September 30, 2023, the conversion price of the notes was adjusted to the lower of $
As
of September 30, 2023,
For
the three and nine months ended September 30, 2023, the Company recognized approximately $
At
September 30, 2023, the Company has remaining $
Convertible Promissory Note – August 17, 2021
On
August 17, 2021, the Company entered into a Securities Purchase Agreement with an accredited institutional investor pursuant to which
the Company issued to the investor its Original Issue Discount Secured Convertible Promissory Note in the principal amount of $
33 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
The
note matures one year from issuance and provides for an interest rate of
In addition to customary anti-dilution adjustments the Note provides, subject to certain limited exceptions, that if the Company issues any common stock or common stock equivalents, as defined in the Note, at a per share price lower than the conversion price then in effect, the conversion price will be reduced to the per share price at which such shares or common share equivalents were sold.
The
Warrants are initially exercisable for a period of five years at a price of $
The
Company incurred approximately $
Due
to the variability in the conversion price of the Note, the embedded conversion option has been bifurcated and reflected as a derivative
liability with an initial fair value of $
The
Company recorded a total debt discount of $
The
fair value of the warrants on which the relative fair value was based was determined by using a simple binomial lattice model. The assumptions
used in the model were a risk-free rate of
On October 27, 2021, the Company and the institutional investor who holds the promissory note agreed to extend the maturity date the notes by six months to February 17, 2023, for no consideration.
On
November 15, 2021, the Company defaulted on certain covenants in the note and the interest rate on the note reset to
On
November 30, 2021, the exercise price of the warrants was adjusted to $
On
January 27, 2022, the conversion price of the notes was adjusted to the lower of $
34 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
On
January 10, 2023, the conversion price of the notes was adjusted to the lower of $
On
April 14, 2023, the conversion price of the notes was adjusted to the lower of $
On
April 28, 2023, the conversion price of the notes was adjusted to the lower of $
On
May 10, 2023, the conversion price of the notes was adjusted to the lower of $
On
June 23, 2023, the conversion price of the notes was adjusted to the lower of $
During
the three months ended September 30, 2023, the conversion price of the notes was adjusted to the lower of $
On February 17, 2023, the Company defaulted on the extended maturity date for the convertible note.
As
of September 30, 2023,
35 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
For
the three and nine months ended September 30, 2023, the Company recognized $
As
of September 30, 2023, the Company has recorded $
Convertible Promissory Note – October 4, 2021
On
October 4, 2021, the Company entered into a Securities Purchase Agreement (“SPA”) with an institutional investor pursuant
to which the Company issued the Buyer a
The
Note is due October 4, 2022. The Note provides for interest at the rate of
The
warrants are exercisable for six-years from October 4, 2021, at an exercise price of $
The
Company incurred approximately $
Due
to the lack of authorized shares, the embedded conversion option has been bifurcated and reflected as a derivative liability with an
initial fair value of $
The
Company recorded a total debt discount of $
On
January 2, 2022, the Company defaulted on certain covenants contained in the October 4, 2021, convertible note and the interest rate
reset to
On
January 27, 2022, the exercise price of the note was adjusted to $
On
May 12, 2022, the Company repaid $
On
January 10, 2023, the exercise price of the note was adjusted to $
On
March 9, 2023, the Company repaid $
36 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
On
April 14, 2023, the exercise price of the note was adjusted from the default conversion price of $
On
April 28, 2023, the exercise price of the note was adjusted from the default conversion price of $
On
May 10, 2023, the exercise price of the note was adjusted from the default conversion price of $
On
June 23, 2023, the exercise price of the note was adjusted from the default conversion price of $
During
the three months ended September 30, 2023, the exercise price of the note was adjusted from the default conversion price of $
For
the three and nine months ended September 30, 2023, the Company recognized approximately $
As
of September 30, 2023, the Company has recorded $
Convertible Promissory Note – October 7, 2021
On
October 7, 2021, the Company entered into a Securities Purchase Agreement (“SPA”) with an institutional investor pursuant
to which the Company issued the investor a
The
Note is due October 7, 2022. The Note provides for interest at the rate of
The
warrants are exercisable for six-years from October 7, 2021, at an exercise price of $
The
Company incurred approximately $
Due
to the lack of authorized shares, the embedded conversion option has been bifurcated and reflected as a derivative liability with an
initial fair value of $
The
Company recorded a total debt discount of $
37 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
On
January 5, 2022, the Company defaulted on certain covenants contained in the October 7, 2021, convertible note and the interest rate
reset to
On
January 27, 2022, the exercise price of the note was adjusted to $
On
May 12, 2022, the Company repaid $
On
January 10, 2023, the exercise price of the note was adjusted to $
On
April 14, 2023, the exercise price of the note was adjusted from the default conversion price of $
On
April 28, 2023, the exercise price of the note was adjusted from the default conversion price of $
On
May 10, 2023, the exercise price of the note was adjusted from the default conversion price of $
On
June 23, 2023, the exercise price of the note was adjusted from the default conversion price of $
During
the three months ended September 30, 2023, the exercise price of the note was adjusted from the default conversion price of $
For
the three and nine months ended September 30, 2023, the Company recognized $
As
of September 30, 2023, the Company has recorded $
Convertible Promissory Note – March 15, 2022
On
March 15, 2022, the Company entered into a Securities Purchase Agreement (“SPA”) with an institutional investor pursuant
to which the Company issued the investor a
The
Note provides for guaranteed interest at the rate of
38 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
The Note is convertible into shares of common stock at any time following any event of default at the investor’s option at a conversion price of ninety percent (90%) per share of the lowest per-share trading price of the Company; stock during the ten trading day periods before the conversion, subject to certain adjustments.
The
Company recorded a total debt discount of $
On
September 16, 2022, the Company defaulted on the repayment of the note and the interest rate reset to
For
the year ended December 31, 2022, the Company repaid $
On
January 10, 2023, the holder of the March 15, 2022, convertible note converted $
On
January 23, 2023, the Company repaid $
On
February 1, 2023, the Company repaid $
On
February 17, 2023, the Company repaid $
On
March 13, 2023, the Company repaid $
On
April 14, 2023, the holder of the March 15, 2022, convertible note converted $
On
April 28, 2023, the holder of the March 15, 2022, convertible note converted $
On
May 10, 2023, the holder of the March 15, 2022, convertible note converted $
On
May 30, 2023, the holder of the March 15, 2022, convertible note converted $
On
June 23, 2023, the holder of the March 15, 2022, convertible note converted $
On
September 1, 2023, the holder of the March 15, 2022, convertible note converted $
During
the three months ended September 30, 2023, the exercise price of the note was adjusted from the default conversion price of $
39 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
The
Company recognized approximately a $
For
the three and nine months ended September 30, 2023, the Company recognized
As
of September 30, 2023, the Company has recorded approximately $
Derivative Liabilities Pursuant to Convertible Notes and Warrants
In
connection with the issuance of the unrelated party convertible notes (collectively referred to as “Notes”) and warrants
(collectively referred to as “Warrants”), discussed above, the Company determined that the terms of certain Notes and Warrants
contain an embedded conversion options to be accounted for as derivative liabilities due to the holder having the potential to gain value
upon conversion and provisions which includes events not within the control of the Company. Due to the fact that the number of shares
of common stock that may be issuable for warrants and notes with variable conversion features may exceed the Company’s authorized
share limit as of September 30, 2023, the equity environment was tainted and all convertible debentures and warrants were included in
the value of the derivative. Accordingly, for existing embedded conversion options and existing warrants that were not previously accounted
for as derivatives, the Company reclassified $
During
the period ended September 30, 2023, in connection with the issuance of the Notes and Warrants, on the initial measurement dates, the
fair values of the embedded conversion options and warrants of approximately $
At
the end of each reporting period, the Company revalued the embedded conversion option and warrants as derivative liabilities. In connection
with the initial valuations and these revaluations, the Company recorded a loss from the initial and change in the derivative liabilities
fair value of $
During the nine months ended September 30, 2023, the fair value of the derivative liabilities was estimated at issuance and at the September 30, 2023, using the Binomial Lattice valuation model with the following assumptions:
Dividend rate | % | |||
Term (in years) | ||||
Volatility | % | |||
Risk-free interest rate | % |
40 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
During the nine-month period ended September 30, 2023, other than the effect on the derivative valuation recognized in operations, there was no accounting effect to the ratchet adjustments of certain convertible notes and warrants since all of the embedded conversion options in the convertible notes were treated as derivatives which are reported at fair value.
NOTE 5 - LICENSING AGREEMENTS
Les Laboratories Servier
As a result of the Asset Purchase Agreement that the Company entered into with Symplmed Pharmaceuticals LLC in June 2017, Symplmed assigned to the Company an Amended and Restated License and Commercialization Agreement with Les Laboratories Servier, pursuant to which the Company has the exclusive right to manufacture, have manufactured, develop, promote, market, distribute and sell Prestalia® in the U.S. (and its territories and possessions).
On
January 4, 2021, the licensor terminated the licensing agreement with the Company for the commercialization of Prestalia®. As of
September 30, 2023 and December 31, 2022, the Company had $
License of DiLA2 Assets
On
March 16, 2018, the Company entered into an exclusive sublicensing agreement for certain intellectual property rights to its DiLA2 delivery
system. The agreement included an upfront payment of $
NOTE 6 - RELATED PARTY TRANSACTIONS
Due to Related Party
The Company and other related entities have had a commonality of ownership and/or management control, and as a result, the reported operating results and/or financial position of the Company could significantly differ from what would have been obtained if such entities were autonomous.
The
Company had a Master Services Agreement (“MSA”) with Autotelic Inc., a related party that is partly owned by one of the Company’s
former Board members and executive officers, namely Vuong Trieu, Ph.D., effective November 15, 2016. The MSA stated that Autotelic Inc.
would provide business functions and services to the Company and allowed Autotelic Inc. to charge the Company for these expenses paid
on its behalf. Dr. Trieu resigned as a director of our company effective October 1, 2018. The Company and Autotelic Inc. agreed to terminate
the MSA effective October 31, 2018. An unpaid balance for previous years services performed under the agreement of $
In
addition, as of September 30, 2023 and December 31, 2022 the Company owed various officers and directors $
41 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
NOTE 7 - STOCKHOLDERS’ EQUITY
Preferred Stock
Adhera has authorized shares of preferred stock for issuance and has designated shares as Series B Preferred Stock (“Series B Preferred”) and shares as Series A Junior Participating Preferred Stock (“Series A Preferred”). No shares of Series A Preferred or Series B Preferred are outstanding. In March 2014, Adhera designated shares as Series C Convertible Preferred Stock (“Series C Preferred”). In August 2015, Adhera designated shares as Series D Convertible Preferred Stock (“Series D Preferred”). In April 2018, Adhera designated shares of Series E Convertible Preferred Stock (“Series E Preferred”). In July 2018, Adhera designated shares of Series F Convertible Preferred Stock (“Series F Preferred”). In December 2019, Adhera designated shares of Series G Convertible Preferred Stock (“Series G Preferred”). The Company plans to file a certificate of elimination with respect to the Series A and Series B stock and a certificate of decrease with respect to each of its Series C, D and F Preferred stock. As of September 30, 2023, the Company has not filed the certificate of elimination. Each subsequent authorization of Preferred Stock has liquidation preference over the previous Series.
Series C Preferred
Each
share of Series C Preferred has a stated value of $
As of September 30, 2023, shares of Series C Preferred stock were outstanding.
Series D Preferred
Each
share of Series D Preferred has a stated value of $
As of September 30, 2023, shares of Series D Preferred were outstanding.
Series E Convertible Preferred Stock and Warrants
The
Series E Preferred Stock has a stated value of $
On
March 19, 2021, the exercise price of the Series E warrants was adjusted from $
On
January 27, 2022, the exercise price of the Series E warrants was adjusted to $
On
May 17, 2022, the Company effected the conversion of
On
January 10, 2023, the exercise price of the Series E warrants was adjusted to $
42 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
On
April 14, 2023, the conversion price of the warrants was adjusted to $
On
April 28, 2023, the conversion price of the warrants was adjusted to $
On
May 10, 2023, the conversion price of the warrants was adjusted to $
On
May 17, 2023, a total of
The
Company had accrued dividends on the Series E Preferred stock of $
At September 30, 2023, there were Series E shares outstanding.
Series F Convertible Preferred Shares and Warrants
The
Series F Preferred Stock has a stated value of $
On
March 19, 2021, the exercise price of the Series F warrants was adjusted from $
On
January 27, 2022, the exercise price of the Series F warrants was adjusted to $
On
May 17, 2022, the Company effected the conversion of
On
January 10, 2023, the exercise price of the Series F warrants was adjusted to $
On
April 14, 2023, the conversion price of the warrants was adjusted to $
On
April 28, 2023, the conversion price of the warrants was adjusted to $
On
May 10, 2023, the conversion price of the warrants was adjusted to $
On
June 23, 2023, the conversion price of the warrants was adjusted to $
43 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
During
the three months ended September 30, 2023, the conversion price of the warrants was adjusted to $
As
of September 30, 2023, the Company had a total of
At September 30, 2023, and December 31, 2022, there were Series F Preferred shares outstanding.
Series G Convertible Preferred Shares
The Series G Preferred Stock has a stated value of $ per share and accrues % dividends per annum that are payable in cash or stock at the Company’s discretion. The Series G Preferred has voting rights, dividend rights, liquidation preferences, conversion rights and anti-dilution rights. Series G Preferred stock is convertible into shares of common stock at $ .
As of September 30, 2023, and December 31, 2022, Series G Preferred Stock has been issued by the Company.
Common Stock
On
January 27, 2022, the Company issued
On
March 15, 2022, the Company issued
On
March 15, 2022, the Company issued
On
May 11, 2022, the Company issued
On
May 17, 2022, the Company effected the conversion of
On
May 17, 2022, the Company effected the conversion of
On
January 10, 2023, the Company issued
On
April 14, 2023, the holder of the March 15, 2022, convertible note converted $
44 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
On
April 28, 2023, the holder of the March 15, 2022, convertible note converted $
On
May 10, 2023, the holder of the March 15, 2022, convertible note converted $
On
May 30, 2023, the holder of the March 15, 2022, convertible note converted $
On
June 23, 2023, the holder of the March 15, 2022, convertible note converted $
During
the three months ended September 30, 2023, the Company issued
On
September 1, 2023 the holder of the March 15, 2022, convertible note converted $
During
the nine months ended September 30, 2023, the Company recorded the difference between the converted amount and the fair value of the
common stock issued as a loss from extinguishment of debt which amounted to $
On
September 8, 2023, an investor exercised
Treasury Stock
On
May 12, 2022, the Company repurchased
Warrants
As
of September 30, 2023, there were
Warrants issued with: | Shares | 2023 | 2024 | 2025 | 2026 | 2027 and After | ||||||||||||||||||
Series F Preferred Stock | - | - | - | - | ||||||||||||||||||||
Bridge Loans | - | - | - | - | ||||||||||||||||||||
Convertible Notes (CVN) | - | - | ||||||||||||||||||||||
Other | - | - | ||||||||||||||||||||||
Total Warrants |
45 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
The above table includes price adjustable warrants including warrants with variable conversion rates and full ratchet protection.
of Warrants | ||||
Warrants as of December 31, 2022 | ||||
Issued as a result of price adjustments on convertible notes | ||||
Variable quantity of warrants related to the February 2020 note | ||||
Warrants issued with 2023 Bridge Notes | ||||
Warrant cashless exercise | ( | ) | ||
Expirations | ( | ) | ||
Warrants as of September 30, 2023 |
The intrinsic value of outstanding warrants as of September 30, 2023, was approximately $ million.
As discussed in Note 2 above, the Company has issued convertible notes and warrants with variable conversion provisions. The conversion terms of the convertible notes are variable based on certain factors, such as the future price of the Company’s common stock and various default provisions related to the payment of the notes in Company stock. The number of shares of common stock to be issued under the convertible notes and warrants is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the convertible notes is therefore, indeterminate. Due to the fact that the number of shares of common stock are indeterminable, the equity environment was tainted and all convertible debentures and warrants were included in the value of the derivative as of that date. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the warrants were recorded as derivative liabilities. On September 30, 2023, the Company evaluated all outstanding warrants to determine whether these instruments are tainted and, due to reasons discussed above, all warrants outstanding were considered tainted and were therefore, accounted for as derivative liabilities.
Other
than the effect on the derivative valuation recognized in operations, there was no accounting effect to the ratchet adjustments of certain
warrants to reduce certain conversion prices during the six-month period to $
Stock Options
Options Outstanding | ||||||||
Shares | Weighted Average Exercise Price | |||||||
Outstanding, December 31, 2022 | $ | |||||||
Options expired / forfeited | ) | $ | ||||||
Outstanding, September 30, 2023 | $ | |||||||
Exercisable, September 30, 2023 | $ |
stock options were granted during the nine months ended September 30, 2023.
46 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
NOTE 9 - COMMITMENTS AND CONTINGENCIES
Litigation
Because of the nature of the Company’s business, it is subject to claims and/or threatened legal actions, which arise out of the normal course of business. As of the date of this filing, the Company is not aware of any pending lawsuits against it, its officers or directors.
Leases
The Company does not own or lease any real property or facilities that are material to its current business operations. If the Company continues its business operations, the Company may seek to lease facilities in order to support its operational and administrative needs.
Licensing Agreement – MLR 1019
On
July 28, 2021, the Company and Melior Pharmaceuticals II, LLC (“Melior II”) entered into an exclusive license agreement for
the development, commercialization and exclusive license of MLR-1019. MLR-1019 is being developed as a new class of therapeutic for Parkinson’s
disease (PD) and is, to the best of the Company’s knowledge, the only drug candidate today to address both movement and non-movement
aspects of PD. Under the Agreement, the Company was granted an exclusive license to use Melior II’s Patents and know-how to develop
products in consideration for cash payments up to approximately $
The
license agreement terminates upon the last expiration of the patents licensed by the Company, which is presently 2038 subject to any
potential extensions and renewals of any of such patents. If the Company fails to have its common stock listed on Nasdaq or the NYSE
(an “Uplisting Event”) within 12 months after the Company receives a Clinical Trial Authorization from the European Medicines
Agency, then the Company’s commercial license and rights for using Melior II’s data shall terminate. Additionally, if the
Company has completed the necessary steps to effect an Uplisting Event, the Company will have the option to purchase all rights held
by Melior II on the MLR-1019 licensed products in consideration for
As of September 30, 2023, no performance milestones requiring cash consideration had been met under the agreement.
Licensing Agreement – MLR 1023
On August 20, 2021, we as licensee entered into the exclusive license agreement with Melior Pharmaceuticals I, Inc. (“MP1”) regarding the development and commercialization of MPI’s MLR-1023 (the “MLR-1023 Agreement”) We refer to MelliorII and MPI as “MP” or “Melior”. This second license is for the development and commercialization of MLR-1023, which is being developed as a novel therapeutic for Type 1 diabetes.
Under
the original terms of the MLR-1023 Agreement,
On October 20, 2021, we as licensee expanded the exclusive licensing agreement with Melior I to include two additional clinical indications for Non-Alcoholic Steatohepatitis (NASH) and pulmonary inflammation.
47 |
ADHERA THERAPEUTICS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
On February 16, 2022, an addendum to the MLR-1023 Agreement dated August 4, 2021 (the “First Addendum”), was executed by the Company and Melior, which extended the Raise Requirement to June 16, 2022.
On
July 20, 2022, the Company and Melior entered into the Second Addendum to the License Agreement (the “Second Addendum”).
In accordance with the Second Addendum and subject to the terms and conditions therein, the Raise Requirement was extended to February
1, 2023, in exchange for a $
On
February 16, 2022, an addendum to the MLR-1023 Agreement dated August 4, 2021 (the “First Addendum”), was executed by the
Company and Melior, which extended the requirement by
On
July 18, 2022, the Company and Melior entered into the Second Addendum to the License Agreement (the “Second Addendum”).
In accordance with the Second Addendum and subject to the terms and conditions therein, the Raise Requirement was extended to February
1, 2023, in exchange for a $
As
of February 1, 2023, the Company had not raised the additional $
On
August 11, 2023, the Company and Biodexa Pharmaceuticals PLC (“Biodexa”) entered into a non-binding summary of proposals
for the assignment of the MLR-1023 Agreement to Biodexa. In connection with the summary of proposals, in August 2023, the Company received
a $
As of September 30, 2023, no performance milestones requiring cash consideration had been met under the agreement.
NOTE 10 - SUBSEQUENT EVENTS
Conversion of Principal on Convertible Note
From
October 1, 2023 to November 17, 2023, certain convertible noteholders converted $
On
October 2, 2023, the Company issued
48 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect management’s current views with respect to future events and financial performance including meeting our obligations under the MP I and Melior II license agreements and our liquidity. The following discussion should be read in conjunction with the financial statements and related notes and the Risk Factors contained in our Annual Report on Form 10-K, for the year ended December 31, 2022, as filed with the Securities and Exchange Commission (“SEC”) on September 30, 2023. Forward-looking statements are projections in respect of future events or financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology.
Forward-looking statements are inherently subject to risks and uncertainties, many of which we cannot predict with accuracy and some of which we might not even anticipate. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions at the time made, we can give no assurance that such expectations will be achieved. Future events and actual results, financial and otherwise, may differ materially from the results discussed in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements after the date of this Quarterly Report on Form 10-Q or to conform them to actual results, new information, future events or otherwise, except as otherwise required by securities and other applicable laws.
The following factors, among others, could cause our or our industry’s future results to differ materially from historical results or those anticipated:
● | Our failure to consummate the proposed transaction with Biodexa; | |
the inability to comply with or obtain waivers or extensions under our current license agreements which Melior, in which case we will lack any intellectual property rights; |
● | our ability to obtain additional funding for our company; | |
● | our ability to attract and retain qualified officers, directors, employees and consultants as necessary; and | |
● | failure to meet our financial obligations under outstanding loans and other financing documents. |
These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” set forth in our Annual Report on Form 10-K, any of which may cause our company’s or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks may cause our or our industry’s actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. We are under no duty to update any forward-looking statements after the date of this report to conform these statements to actual results.
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Nature of Business
We are dependent upon closing the previously announced transaction with Biodexa. See Note 9 to our Consolidated Financial Statements.
Going Concern and Management’s Liquidity Plans
The accompanying unaudited condensed consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. As of September 30, 2023, the Company had approximately $32,000 of cash and has negative working capital of approximately $26.3 million.
The Company has no revenues and has incurred recurring losses and negative cash flows from operations since inception and has funded its operating losses through the sale of common stock, preferred stock, warrants to purchase common stock, convertible notes and secured promissory notes. The Company incurred a net loss and net cash used in operating activities of $4,150,375 and $655,155, respectively, for the nine months ended September 30, 2023. The Company had a stockholders’ deficit of approximately $26.3 million and an accumulated deficit of approximately $60.0 million as of September 30, 2023.
In addition, to the extent that the Company continues its business operations, the Company anticipates that it will continue to have negative cash flows from operations, at least into the near future. However, the Company cannot be certain that it will be able to obtain such funds required for our operations at terms acceptable to the Company or at all. General market conditions, as well as market conditions for companies in the Company’s financial and business position, as well as the ongoing issue arising from the COVID-19 pandemic, the war in Ukraine and Israel, federal bank failures or other world-wide events, may make it difficult for the Company to seek financing from the capital markets, and the terms of any financing may adversely affect the holdings or the rights of its stockholders. If the Company is unable to obtain additional financing in the future, it will be required to cease operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance date of this Report. The consolidated financial statements do not contain any adjustments that might result from the resolution of any of the above uncertainties.
Results of Operations
Comparison of the Three and Nine Months Ended September 30, 2023 to the Three and Nine Months Ended September 30, 2022
Revenues
During the three and nine months ended September 30, 2023 and 2022, we did not generate revenues.
Operating Expenses
For the three and nine months ended September 30, 2023 and 2022, total operating expenses consisted of the following:
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Professional fees | $ | 83,267 | $ | 169,166 | $ | 339,972 | $ | 521,861 | ||||||||
Compensation expense | 143,238 | 154,161 | 429,396 | 304,161 | ||||||||||||
General and administrative expenses | 42,992 | 224,243 | 148,153 | 430,268 | ||||||||||||
Total operating expenses | $ | 269,497 | $ | 547,570 | $ | 917,521 | $ | 1,256,290 |
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Professional Fees
For the three months ended September 30, 2023, professional fees decreased by $85,899, or 50.8%, as compared to the three months ended September 30, 2022. For the nine months ended September 30, 2023, professional fees decreased by $181,889, or 34.9%, as compared to the nine months ended September 30, 2022. The decreases are attributable to an overall decrease in legal fees, consulting fees and investor relation fees.
Compensation Expense
For the three months ended September 30, 2023, compensation expense decreased by $10,923, or 7.1%, as compared to the three months ended September 30, 2022. The decrease was attributable to a decrease in executive compensation. For the nine months ended September 30, 2023, compensation expense increased by $125,235, or 41.2%, as compared to the nine months ended September 30, 2022. The increase was attributable to an increase in executive compensation due to an increase in compensation to our chief executive office offset by a decrease in compensation to our chief financial officer.
General and Administrative
For the three months ended September 30, 2023, general and administrative expense decreased by $181,251, or 80.8%, as compared to the three months ended September 30, 2022. The decrease was attributable to a decrease in licensing fees and a decrease in insurance expense. For the nine months ended September 30, 2023, general and administrative expense decreased by $282,115, or 65.6%, as compared to the nine months ended September 30, 2022. The decrease was attributable to a decrease in licensing fees and a decrease in insurance expense.
Other Income (Expenses), net
● | For the three months ended September 30, 2023 and 2022, total other expenses, net, amounted to $3,266,318 and $1,255,782, respectively, an increase of $2,010,536, or 160.1%. The increase was primarily due to an increase in derivatives expense of $2,420,243 resulting from the change in fair value of derivative liabilities, and a decrease in gain of debt extinguishment of $79,397, offset by a decrease in interest expense of $489,104 resulting from a decrease in amortization of debt discount and an increase in interest bearing debt. | |
● | For the nine months ended September 30, 2023 and 2022, total other expenses, net amounted to $3,232,854 and $522,506, respectively, an increase of $2,710,348, or 518.7%. The increase was primarily due to an increase in in derivatives expense of $1,640,488 resulting from the change in fair value of derivative liabilities, a decrease in gain of debt extinguishment of $218,786, an increase in loan inducement expense of $809,126, and an increase in interest expense of $41,948 due to an increase in interest bearing debt and a decrease in amortization of debt discount. |
LIQUIDITY & CAPITAL RESOURCES
Liquidity and Capital Resources
Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. We had cash of $32,388 as of September 30, 2023.
Our primary uses of cash have been for compensation and related benefits, fees paid to third parties for professional services, and general and administrative expenses. We have received funds from debt financings. The following trends are reasonably likely to result in changes in our liquidity over the near to long term:
● | An increase in working capital requirements to finance our current business, | |
● | Research and development fees; | |
● | Addition of administrative and sales personnel needed for business growth; | |
● | The cost of being a public company; |
Since inception, we have raised proceeds from debt to fund our operations.
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Cash Flows and Liquidity
Net cash used in Operating Activities
Net cash used in operating activities was $655,155 during the nine months ended September 30, 2023. This was primarily due to our net operating loss of $4,150,375 and a non-cash gain on debt extinguishment of $87,921, partially offset by a $214,994 non-cash loss related to an increase in the fair value of our outstanding derivative liability related to our convertible notes and warrants, non-cash amortization of debt discount of $1,245,825, and $809,126 of expense related to a loan inducement fee related to our 2023 term loans, and change in operating assets and liabilities of $1,313,196 including an increase in accrued expenses of $1,186,871.
Net cash used in operating activities was approximately $1.36 million during the nine months ended September 30, 2022. This was primarily due to our net operating loss of approximately $1.8 million and a non-cash gain on debt extinguishment of approximately $307,000, partially offset by a $1.4 million gain related to a decrease in the fair value of our outstanding derivative liability related to our convertible notes and warrants, non-cash amortization of debt discount of approximately $1.3 million, and changes in operating assets and liabilities of approximately $890,000 including an increase in accrued expenses of $931,000.
Net cash used in Investing Activities
There was no cash used in or provided by investing activities for the nine months ended September 30, 2023, or 2022.
Net cash provided by Financing Activities
Net cash provided by financing activities for the nine months ended September 30, 2023, was $655,782. Net cash provided by financing activities for the nine months ended September 30, 2023, included $746,600 from the sale of promissory notes and warrants, net of issuance costs of $42,300 to certain accredited investors, offset by the repayment of principal and interest on outstanding convertible notes of $90,818.
Net cash provided by financing activities for the nine months ended September 30, 2022, was $1,413,246. Net cash provided by financing activities for the nine months ended September 30, 2022 included $1,872,200 from the sale of promissory notes and warrants, net of issuance costs of $327,800 to certain accredited investors, offset by the repayment of principal and interest on outstanding convertible notes of $456,954 and $2,000 for the repurchase of common stock outstanding.
We will need to raise additional operating capital within the next several months to maintain our operations and to realize our business plan. Without additional sources of cash and/or the deferral, reduction, or elimination of significant planned expenditures, we will not have the cash resources to continue as a going concern thereafter.
Liquidity
We do not have sufficient funds to meet our working capital needs for the next 12 months. We will require additional funds in the near future to continue our business. Historically, we have raised additional capital to supplement our commercialization, clinical development and operational expenses. We will need to raise additional funds required, which may result in further dilution in the equity ownership of our shares. There can be no assurance that additional financing will be available or, if available, that it can be obtained on commercially reasonable terms. Failure to raise additional capital through one or more financings, divesting development assets or reducing discretionary spending could have a material adverse effect on our ability to achieve our intended business objectives. These factors raise substantial doubt about our ability to continue as a going concern.
Off-Balance Sheet Arrangements
As of September 30, 2023, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K.
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Critical Accounting Policies and Estimates
Our significant accounting policies are more fully described in the notes to our consolidated financial statements included herein for the period ended September 30, 2023, and in the notes to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022.
New and Recently Adopted Accounting Pronouncements
Any new and recently adopted accounting pronouncements are more fully described in Note 1 to our consolidated financial statements included herein for the period ended September 30, 2023.
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4 CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives.
Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Report. Based upon that evaluation and subject to the foregoing, our principal executive officer and principal financial officer concluded that, our disclosure controls and procedures were not effective due to the material weaknesses in internal controls over financial reporting described below.
Material Weakness in Internal Control over Financial Reporting
Management assessed the effectiveness of our internal control over financial reporting as of September 30, 2023, based on the framework established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has determined that our internal control over financial reporting as of September 30, 2023, was not effective.
A material weakness, as defined in the standards established by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
The ineffectiveness of our internal control over financial reporting was due to the following material weaknesses:
● | Inadequate segregation of duties consistent with control objectives, and lack of monitoring controls over the accounting function as the Company has limited accounting staff.; | |
● | Lack of qualified accounting personnel to prepare and report financial information in accordance with GAAP; |
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● | Lack of a separate Audit Committee of the Board of Directors; and | |
● | Lack of documentation on policies and procedures that are critical to the accomplishment of financial reporting objectives. |
Management’s Plan to Remediate the Material Weakness
Providing funds are available, management plans to implement measures designed to ensure that control deficiencies, contributing to the material weakness are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions planned include:
● | Identifying gaps in our skills base and the expertise of our personnel necessary to meet the financial reporting requirements of a public company; | |
● | Developing written policies and procedures on internal control over financial reporting and monitor the effectiveness of operations on existing controls and procedures; and | |
● | Establishing a separate Audit Committee of the Board of Directors. |
We will continue to reassess our plans to remedy our internal control deficiencies in light of our personnel structure and our financial condition. We hope that such measures will lead to an improvement in the timely preparation of financial reports and strengthen our segregation of duties at our company. We are committed to developing a strong internal control environment, and we believe that the remediation efforts that we will implement will result in significant improvements in our control environment. Our management will continue to monitor and evaluate the relevance of our risk-based approach and the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. However, our significant working capital deficiency may delay remediation.
There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended September 30, 2023, that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
General
Currently, there is no material litigation pending against our company. From time to time, we may become a party to litigation and subject to claims incident to the ordinary course of our business.
ITEM 1A. RISK FACTORS
An investment in our common stock involves a number of very significant risks. You should carefully consider the risk factors included in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “Annual Report”), as filed with the SEC on March 31, 2023, in addition to other information contained in those documents and reports that we have filed with the SEC pursuant to the Securities Act and the Exchange Act since the date of the filing of the Annual Report, including, without limitation, this Quarterly Report on Form 10-Q, in evaluating our company and its business before purchasing shares of our common stock. Our business, operating results and financial condition could be adversely affected due to any of those risks.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
ITEM 5. OTHER INFORMATION
None.
Item 6. Exhibits
* | Filed herewith. | |
** | This exhibit is being furnished rather than filed and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K. |
Copies of this Report (including the financial statements) and any of the exhibits referred to above will be furnished at no cost to our shareholders who make a written request to our Corporate Secretary at Adhera Therapeutics, Inc., 8000 Innovation Parkway, Baton Rouge, Louisiana 70820.
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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.
ADHERA THERAPEUTICS, INC. | ||
Date: November 20, 2023 | By: | /s/ Zahed Subhan |
Zahed Subhan | ||
CEO (Principal Executive Officer) | ||
Date: November 20, 2023 | By: | /s/ Andrew Kucharchuk |
Andrew Kucharchuk | ||
Chief Operating Officer (Principal Accounting and Financial Officer) |
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