UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _________to ___________
Commission
File Number:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
(Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
The
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Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ | |
☒ | Smaller reporting company | |||
Emerging growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Number of shares of common stock outstanding as of August 12, 2024 was .
2 |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA
This Quarterly Report on Form 10-Q contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements may be identified by such forward-looking terminology as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections about our company, are not guarantees of future results or performance and involve substantial risks and uncertainty. We may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in these forward-looking statements. Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including the risks and uncertainties inherent in our statements regarding:
● | our projected financial position and estimated cash burn rate; | |
● | our estimates regarding expenses, future revenues and capital requirements; | |
● | our ability to continue as a going concern; | |
● | our need to raise substantial additional capital to fund our operations, the availability and terms of such funding, and dilution caused thereby; | |
● | the success, cost and timing of our clinical trials; | |
● | our dependence on third parties in the conduct of our clinical trials; | |
● | our ability to obtain the necessary regulatory approvals to market and commercialize our product candidates; | |
● | the ultimate impact of a health epidemic, on our business, our clinical trials, our research programs, healthcare systems or the global economy as a whole; | |
● | the potential that results of pre-clinical and clinical trials indicate our current product candidates or any future product candidates we may seek to develop are unsafe or ineffective; | |
● | the results of market research conducted by us or others; | |
● | our ability to obtain and maintain intellectual property protection for our current and future product candidates; | |
● | our ability to protect our intellectual property rights and the potential for us to incur substantial costs from lawsuits to enforce or protect our intellectual property rights; |
● | the possibility that a third party may claim we or our third-party licensors have infringed, misappropriated or otherwise violated their intellectual property rights and that we may incur substantial costs and be required to devote substantial time defending against claims against us; | |
● | our reliance on third-party suppliers and manufacturers; | |
● | the success of competing therapies and products that are or become available; | |
● | our ability to expand our organization to accommodate potential growth and our ability to retain and attract key personnel; | |
● | the potential for us to incur substantial costs resulting from product liability lawsuits against us and the potential for these product liability lawsuits to cause us to limit our commercialization of our product candidates; | |
● | market acceptance of our product candidates, the size and growth of the potential markets for our current product candidates and any future product candidates we may seek to develop, and our ability to serve those markets; and | |
● | the successful development of our commercialization capabilities, including sales and marketing capabilities. |
All of our forward-looking statements are as of the date of this Quarterly Report on Form 10-Q only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 29, 2024, this Quarterly Report on Form 10-Q or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the U.S. Securities and Exchange Commission (the “SEC”) could materially and adversely affect our business, prospects, financial condition and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report on Form 10-Q, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report on Form 10-Q that modify or impact any of the forward-looking statements contained in this Quarterly Report on Form 10-Q will be deemed to modify or supersede such statements in this Quarterly Report on Form 10-Q.
This Quarterly Report on Form 10-Q may include market data and certain industry data and forecasts, which we may obtain from internal company surveys, market research, consultant surveys, publicly available information, reports of governmental agencies and industry publications, articles and surveys. Industry surveys, publications, consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed. While we believe that such studies and publications are reliable, we have not independently verified market and industry data from third-party sources, and we have not commissioned any such information.
3 |
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Immix Biopharma, Inc.
Condensed Consolidated Balance Sheets
June 30, 2024 | December 31, 2023 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | $ | ||||||
Tax receivable | ||||||||
Prepaid expenses and other current assets | ||||||||
Total current assets | ||||||||
Other assets | ||||||||
Deferred offering cost | ||||||||
Right-of-use asset, net | ||||||||
Property and equipment, net | ||||||||
Total assets | $ | $ | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | $ | ||||||
Operating lease liability - current | ||||||||
Total current liabilities | ||||||||
Operating lease liability – long term | ||||||||
Total liabilities | ||||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, $ par value; shares authorized; shares issued and outstanding | ||||||||
Common stock, $ par value; shares authorized; shares issued and shares outstanding at June 30, 2024 and shares issued and shares outstanding at December 31, 2023 | ||||||||
Additional paid-in capital | ||||||||
Accumulated other comprehensive income | ||||||||
Accumulated deficit | ( | ) | ( | ) | ||||
Treasury stock at cost, shares as of June 30, 2024 and December 31, 2023 | ( | ) | ( | ) | ||||
Total Immix Biopharma, Inc. stockholders’ equity | ||||||||
Non-controlling interests | ( | ) | ||||||
Total stockholders’ equity | ||||||||
Total liabilities and stockholders’ equity | $ | $ |
See accompanying notes to the unaudited condensed consolidated financial statements.
4 |
Immix Biopharma, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Operating expenses: | ||||||||||||||||
General and administrative expenses | $ | $ | $ | $ | ||||||||||||
Research and development | ||||||||||||||||
Total operating expenses | ||||||||||||||||
Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Other income (expense): | ||||||||||||||||
Interest income | ||||||||||||||||
Total other expense, net | ||||||||||||||||
Loss before provision for income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Provision for income taxes | ||||||||||||||||
Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Net loss attributable to non-controlling interests | ||||||||||||||||
Net loss attributable to Immix Biopharma, Inc. common stockholders | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Other comprehensive income (loss): | ||||||||||||||||
Foreign currency translation | ( | ) | ( | ) | ( | ) | ||||||||||
Total other comprehensive loss | ( | ) | ( | ) | ( | ) | ||||||||||
Comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Less: comprehensive loss attributable to non-controlling interests | ||||||||||||||||
Comprehensive loss attributable to Immix Biopharma, Inc. common stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Loss per common share - basic and diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
Weighted average shares outstanding - basic and diluted |
See accompanying notes to the unaudited condensed consolidated financial statements.
5 |
Immix Biopharma, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
For the Three and Six Months Ended June 30, 2024 and 2023
(Unaudited)
Common | Additional | Accumulated Other | Treasury | Non- | Total | |||||||||||||||||||||||||||||||
Common | Stock | Paid-in | Comprehensive | Accumulated | Treasury | Stock | Controlling | Stockholders’ | ||||||||||||||||||||||||||||
Shares | Amount | Capital | Income | Deficit | Shares | Amount | Interests | Equity | ||||||||||||||||||||||||||||
Balance December 31, 2023 | $ | $ | $ | $ | ( | ) | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||
Shares issued under ATM facility for cash proceeds, net of offering costs | - | |||||||||||||||||||||||||||||||||||
Shares issued under public offering for cash proceeds, net of offering costs | - | |||||||||||||||||||||||||||||||||||
Shares issued for exercise of stock options | - | |||||||||||||||||||||||||||||||||||
Shares issued for services | - | |||||||||||||||||||||||||||||||||||
Stock-based compensation | - | - | ||||||||||||||||||||||||||||||||||
Non-controlling interests in subsidiary | - | - | ( | ) | ||||||||||||||||||||||||||||||||
Net loss | - | ( | ) | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||
Foreign currency translation adjustment | - | ( | ) | - | ( | ) | ||||||||||||||||||||||||||||||
Balance March 31, 2024 | $ | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||
Shares issued for services | - | |||||||||||||||||||||||||||||||||||
Stock-based compensation | - | - | ||||||||||||||||||||||||||||||||||
Non-controlling interests in subsidiary | - | - | ( | ) | ||||||||||||||||||||||||||||||||
Buyout of non-controlling interests in subsidiary | ( | ) | - | |||||||||||||||||||||||||||||||||
Net loss | - | ( | ) | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||
Foreign currency translation adjustment | - | - | ||||||||||||||||||||||||||||||||||
Balance June 30, 2024 | $ | $ | $ | $ | ( | ) | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||||||||
Balance December 31, 2022 | $ | $ | $ | $ | ( | ) | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||||||||
Shares issued under ATM facility for cash proceeds, net of offering costs | - | |||||||||||||||||||||||||||||||||||
Nexcella shares issued for cash proceeds | - | - | ||||||||||||||||||||||||||||||||||
Stock-based compensation | - | |||||||||||||||||||||||||||||||||||
Non-controlling interests in subsidiary | - | - | ( | ) | ||||||||||||||||||||||||||||||||
Net loss | - | ( | ) | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||
Foreign currency translation adjustment | - | ( | ) | - | ( | ) | ||||||||||||||||||||||||||||||
Balance March 31, 2023 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
Shares issued under ATM facility for cash proceeds, net of offering costs | - | |||||||||||||||||||||||||||||||||||
Stock-based compensation | - | |||||||||||||||||||||||||||||||||||
Non-controlling interests in subsidiary | - | - | ( | ) | ||||||||||||||||||||||||||||||||
Net loss | - | ( | ) | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||
Foreign currency translation adjustment | - | ( | ) | - | ( | ) | ||||||||||||||||||||||||||||||
Balance June 30, 2023 | $ | $ | $ | $ | ( | ) | ( | ) | $ | ( | ) | $ | ( | ) | $ |
See accompanying notes to the unaudited condensed consolidated financial statements.
6 |
Immix Biopharma, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the Six Months Ended | ||||||||
June 30, | ||||||||
2024 | 2023 | |||||||
Operating Activities: | ||||||||
Net loss | $ | ( | ) | $ | ( | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Stock-based compensation | ||||||||
Depreciation | ||||||||
Amortization of right of use asset | ||||||||
Changes in operating assets and liabilities: | ||||||||
Tax receivable | ( | ) | ( | ) | ||||
Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
Other assets | ( | ) | ||||||
Accounts payable and accrued expenses | ||||||||
Operating lease liability | ||||||||
Net cash used in operating activities | ( | ) | ( | ) | ||||
Investing Activities: | ||||||||
Purchase of property and equipment | ( | ) | ||||||
Net cash used in investing activities | ( | ) | ||||||
Financing Activities: | ||||||||
Payments of deferred offering costs | ( | ) | ||||||
Proceeds from sale of common stock, net of offering costs | ||||||||
Proceeds from exercise of stock options | ||||||||
Funds received for subsidiary private offering | ||||||||
Net cash provided by financing activities | ||||||||
Effect of foreign currency on cash | ( | ) | ||||||
Net change in cash and cash equivalents | ( | ) | ||||||
Cash and cash equivalents – beginning of period | ||||||||
Cash and cash equivalents – end of period | $ | $ | ||||||
Supplemental Disclosures of Cash Flow Information: | ||||||||
Income taxes paid | $ | $ | ||||||
Supplemental Disclosures of Noncash Financing Information: | ||||||||
Establishment of right of use asset and liabilities | $ | $ | ||||||
Deferred offering costs charged against proceeds from sale of common stock | $ | $ | ||||||
Shares issued in subsidiary absorption | $ | $ | ||||||
Nexcella shares issued for funds previously received | $ | $ |
See accompanying notes to the unaudited condensed consolidated financial statements.
7 |
Immix Biopharma, Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Note 1 – Nature of Business
Immix Biopharma, Inc. (the “Company”) is a clinical-stage biopharmaceutical pharmaceutical company organized as a Delaware corporation on January 7, 2014, which is focused on developing cell therapies in AL Amyloidosis and autoimmune disease. In August 2016, the Company established a wholly-owned Australian subsidiary, Immix Biopharma Australia Pty Ltd. (“IBAPL”), in order to conduct various preclinical and clinical activities for its development candidates. In November 2022, the Company established a majority-owned subsidiary, Nexcella, Inc. (“Nexcella”), its cell therapy division, which subsequently merged into the Company in May 2024, with the Company continuing as the surviving entity. To ensure continuity of operations, the Company re-established Nexcella in 2024 as a wholly-owned subsidiary.
Note 2 – Summary of Significant Accounting Policies
Basis of Presentation - The accompanying condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). The Company’s fiscal year end is December 31.
The condensed consolidated financial statements and related disclosures as of June 30, 2024, and for the three and six months ended June 30, 2024 and 2023 are unaudited, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. In the Company’s opinion, these unaudited condensed consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for the fair statement of the results for the interim periods. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements of the Company for the years ended December 31, 2023 and 2022 which are included in the Company’s Annual Report on Form 10-K filed with the SEC on March 29, 2024. The results of operations for the three and six months ended June 30, 2024, are not necessarily indicative of the results to be expected for the full year ending December 31, 2024.
Risk and Uncertainties - The Company operates in a dynamic and highly competitive industry and is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, contract manufacturers and contract research organizations, compliance with government regulations and the need to obtain additional financing to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical studies and clinical trials and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance and reporting. The Company believes that changes in any of the following areas could have a material adverse effect on the Company’s future financial position, results of operations, or cash flows; ability to obtain future financing; advances and trends in new technologies and industry standards; results of clinical trials; regulatory approval and market acceptance of the Company’s products; development of sales channels; certain strategic relationships; litigation or claims against the Company based on intellectual property, patent, product, regulatory, or other factors; and the Company’s ability to attract and retain employees necessary to support its growth.
8 |
Products developed by the Company require approvals from the U.S. Food and Drug Administration (“FDA”) or other international regulatory agencies prior to commercial sales. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained or maintained, that the products will receive the necessary approvals, or that any approved products will be commercially viable. If the Company is denied approval, approval is delayed, or the Company is unable to maintain approval, it could have a material adverse impact on the Company. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from other pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees, consultants and other third parties.
The Company has expended and plans to continue to expend substantial funds to complete the research, development and clinical testing of product candidates. The Company also will be required to expend additional funds to establish commercial-scale manufacturing arrangements and to provide for the marketing and distribution of products that receive regulatory approval. The Company may require additional funds to commercialize its products. The Company is unable to entirely fund these efforts with its current financial resources and will need to raise additional funding in the future. If adequate funds are unavailable on a timely basis from operations or additional sources of financing, the Company may have to delay, reduce the scope of or eliminate one or more of its research or development programs which may materially and adversely affect its business, financial condition and operations.
Use of Estimates – The preparation of these condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company uses significant judgments when making estimates related to the valuation of deferred tax assets and related valuation allowances, accrual and prepayment of research and development expenses, and the valuation of stock-based compensation. Actual results could differ from those estimates.
Principles
of Consolidation – The accompanying condensed consolidated financial statements include the accounts of Immix Biopharma, Inc.
and the accounts of its
Segment Reporting - The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer. The CODM allocates resources and evaluates the performance of the Company at the consolidated level using information about its revenues, gross profit, income from operations, and other key financial data. All significant operating decisions are based upon an analysis of the Company as one operating segment, which is the same as its reporting segment.
Liquidity
and Going Concern –
These consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue to
realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going
concern is dependent upon the ability of the Company to obtain financing to continue operations. Since the initial public offering
of its common stock in December 2021, the Company has financed its operations through various equity financing. On July 14, 2023,
the Company entered into an additional ATM Sales Agreement (the “July Sales Agreement”) with the Sales Agent, pursuant
to which the Company, may, from time to time, issue and sell through the Sales Agent shares of the Company’s common stock in
sales deemed to be “at-the-market offerings” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933,
as amended (the “July ATM Facility”) (see Note 7). Initially, the Company is eligible to sell up to $
9 |
From
July 14, 2023 through February 5, 2024, the Company has sold
In
February 2024, the Company conducted an underwritten public offering of
On July 25, 2024, the Company was awarded an $
The Company has a history of, and expects to continue to report, negative cash flows from operations and net losses. While the Company’s estimates of its operating expenses and working capital requirements could change significantly based on feedback from the FDA, test results, changes to the nature or timing of future studies or other research and development activities and the Company may use its cash resources faster than it anticipates, management believes that its cash and cash equivalents on hand at June 30, 2024 will be sufficient to meet the Company’s working capital requirements through at least August 12, 2025.
Concentration
of Credit Risk – Periodically, the Company may carry cash and cash equivalents balances at financial institutions in excess
of the federally insured limit of $
Cash and Cash Equivalents – The Company’s cash equivalents include short-term highly liquid investments with an original maturity of 90 days or less when purchased and are carried at fair value.
Fair Value of Financial Instruments – The carrying value of short-term instruments, including cash and cash equivalents, tax receivable, accounts payable and accrued expenses, approximate fair value due to the relatively short period to maturity for these instruments.
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a three-level valuation hierarchy for disclosures of fair value measurements, defined as follows:
Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value.
10 |
The following fair value hierarchy table presents information about the Company’s asset measured at fair value on a recurring basis:
Fair Value Measurements at June 30, 2024 | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
Assets: | ||||||||||||
Cash equivalents (money market funds) | $ | $ | $ |
As
of June 30, 2024, the Company had
Fair Value Measurements at December 31, 2023 | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
Assets: | ||||||||||||
Cash equivalents (money market funds) | $ | $ | $ |
As
of December 31, 2023, the Company had
Australian
Tax Incentive – IBAPL is eligible to receive a cash refund from the Australian Taxation Office for eligible research and development
(“R&D”) expenditures under the Australian R&D Tax Incentive Program (the “Australian Tax Incentive”).
The Australian Tax Incentive is recognized as a reduction to R&D expense when there is reasonable assurance that the relevant expenditure
has been incurred, the amount can be reliably measured and that the Australian Tax Incentive will be received. The Company recognized
reductions to R&D expense of $
Deferred
Offering Costs – The Company had capitalized qualified legal, accounting and other direct costs related to its efforts to raise
capital through the sale of its common stock under the July ATM Facility. Deferred offering costs were deferred and being amortized ratably
upon sales under the July ATM Facility to additional paid-in capital as a reduction of the July ATM proceeds. As a result of the Company
pausing the July ATM Facility, all of the remaining deferred offering costs were immediately amortized to additional paid-in capital
as a reduction to the proceeds received in the six months ended June 30, 2024. As of June 30, 2024,
Stock-Based Compensation – Stock-based compensation expense represents the estimated grant date fair value of the Company’s equity awards, consisting of stock options issued under the Company’s stock option plan and restricted common stock (see Note 7). The fair value of equity awards is recognized over the requisite service period of such awards (usually the vesting period) on a straight-line basis. The Company estimates the fair value of stock options using the Black-Scholes option pricing model on the date of grant and recognizes forfeitures as they occur. For stock awards for which vesting is subject to performance-based milestones, the expense is recorded over the remaining service period after the point when the achievement of the milestone is probable, or the performance condition has been achieved.
Research and Development Costs – R&D costs are expensed as incurred. R&D costs consist primarily of clinical research fees paid to consultants and outside service providers, other expenses relating to design, development and testing of the Company’s therapy candidates, and for license and milestone costs related to in-licensed products and technology. Costs incurred in obtaining technology licenses are charged to R&D expense if the technology licensed has not reached commercial feasibility and has no alternative future use. Such licenses purchased by the Company require substantial completion of research and development, regulatory and marketing approval efforts in order to reach commercial feasibility and have no alternative future use.
11 |
Clinical trial costs are a component of R&D expenses. The Company estimates expenses incurred for clinical trials that are in process based on services performed under contractual agreements with clinical research organizations and actual clinical investigators. Included in the estimates are (1) the fee per patient enrolled as specified in the clinical trial contract with each institution participating in the clinical trial and (2) progressive data on patient enrollments obtained from participating clinical trial sites and the actual services performed. Changes in clinical trial assumptions, such as the length of time estimated to enroll all patients, rate of screening failures, patient drop-out rates, number and nature of adverse event reports, and the total number of patients enrolled can impact the average and expected cost per patient and the overall cost of the clinical trial. The Company monitors the progress of the trials and their related activities and adjusts expense accruals, when applicable. Adjustments to accruals are charged to expense in the period in which the facts give rise to the adjustments become known.
Other Comprehensive Income (Loss) – Other comprehensive income (loss) includes foreign currency translation gains and losses. The cumulative amount of translation gains and losses are reflected as a separate component of stockholders’ equity in the condensed consolidated balance sheets, as accumulated other comprehensive income.
Foreign
Currency Translation and Transaction Gains (Losses) – The Company, and its wholly-owned subsidiary Nexcella, maintain their
accounting records in U.S. Dollars. The Company’s operating subsidiary, IBAPL, is located in Australia and maintains its accounting
records in Australian Dollars, which is its functional currency. Assets and liabilities of the subsidiary are translated into U.S. dollars
at exchange rates at the balance sheet date, equity accounts are translated at historical exchange rate and revenues and expenses are
translated by using the average exchange rates for the period. Translation adjustments are reported as a separate component of other
comprehensive income (loss) in the consolidated statements of operations and comprehensive loss. Foreign currency denominated transactions
are translated at exchange rates approximating those in effect at the transaction dates. Gains (losses) resulting from foreign currency
transactions are included in general and administrative expenses in the accompanying condensed consolidated statements of operations
and comprehensive loss and were $
Property and Equipment - Included in property and equipment is construction-in-progress which consists of manufacturing space improvements and includes the costs of construction, machinery and equipment, and any interest charges arising from borrowings used to finance these assets during the period of construction or installation of the assets. No provision for depreciation is made on construction-in-progress until such time as the relevant assets are completed and ready for their intended use.
Estimated useful lives of the Company’s assets are as follows:
Useful Life | ||
Operating equipment | ||
Electronic equipment | ||
Office equipment |
The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or loss are included in the Company’s results of operations. The costs of maintenance and repairs are recognized to expenses as incurred; significant renewals and betterments are capitalized.
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Leases - At the inception of a contract the Company determines if the arrangement is, or contains a lease. Operating lease right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of the lease payments over the lease term. Lease expense is recognized on a straight-line basis over the lease term.
The Company has made certain accounting policy elections whereby it (i) does not recognize ROU assets or lease liabilities for short-term leases (those with original terms of 12-months or less) and (ii) separates lease and non-lease elements of its operating leases as separate lease components. As of June 30, 2024 and December 31, 2023, the Company did not have any finance leases.
Recent Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an annual and interim basis. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, on a retrospective basis. The Company has implemented this ASU effective January 1, 2024, and determined no retrospective changes were necessary.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands the disclosures required for income taxes. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendment should be applied on a prospective basis while retrospective application is permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures.
Note 3 – Prior Agreements with Nexcella Subsidiary
Nexcella Absorption
On
May 20, 2024, Nexcella, was merged (the “Merger”) with and into the Company, with the Company as the surviving
corporation (the “Nexcella Absorption”). The Merger was effected pursuant to Section 253 of the Delaware General
Corporation Law (“DGCL”) when the Company filed a Certificate of Ownership and Merger (“Certificate of
Merger”) with the Secretary of State of the State of Delaware. Immediately prior to the Merger, the Company owned greater than
Founders Agreement
Effective December 8, 2022, the Company entered into a Founders Agreement with Nexcella (the “Nexcella Founders Agreement”).
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The
Nexcella Founders Agreement provided that prior to a Qualified IPO (as defined in Nexcella’s Amended and Restated Certificate
of Incorporation, as amended (the “Nexcella COI”)) or Qualified Change in Control (as defined in the Nexcella COI), the
Company shall provide funds to Nexcella as requested by Nexcella, in good faith, to be evidenced by a senior unsecured promissory
note. In exchange for the time and capital expended in the formation of Nexcella and the identification of specific assets, the
acquisition of which benefit Nexcella, on December 21, 2022, the Company loaned Nexcella approximately $
Each
share of Class A Preferred Stock was convertible, at the Company’s option, into one fully paid and nonassessable share of Nexcella’s
common stock, subject to certain adjustments. As a holder of Nexcella’s Class A Preferred Stock, the Company received on each March
13 (each a “PIK Dividend Payment Date”) until the date all outstanding Class A Preferred Stock was converted into Nexcella’s
common stock or redeemed (and the purchase price is paid in full), pro rata per share dividends paid in additional fully paid and nonassessable
shares of Nexcella common stock (“PIK Dividends”) such that the aggregate number of shares of common stock issued pursuant
to such PIK Dividend was equal to
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In addition to the foregoing, the Company was entitled to one vote for each share of Nexcella common stock held by it. Except as provided by law or by the Nexcella COI, holders of Nexcella Class A Common Stock and Class A Preferred Stock shall vote together with the holders of Nexcella common stock, as a single class.
As
additional consideration under the Nexcella Founders Agreement, Nexcella would also:
Management Services Agreement
Effective
as of December 8, 2022, the Company entered into a Management Services Agreement (the “Nexcella MSA”) with Nexcella. Pursuant
to the terms of the Nexcella MSA, the Company rendered management, advisory and consulting services to Nexcella. Services provided under
the Nexcella MSA may include, without limitation, (i) advice and assistance concerning any and all aspects of Nexcella’s operations,
clinical trials, financial planning and strategic transactions and financings and (ii) conducting relations on behalf of Nexcella with
accountants, attorneys, financial advisors and other professionals (collectively, the “Services”). At the request of the
Company, Nexcella utilized clinical research services, medical education, communication and marketing services and investor relations/public
relation services of companies or individuals designated by the Company, provided those services are offered at market prices. In consideration
for the Services, Nexcella paid the Company an annual base management and consulting fee of $
The Nexcella MSA was terminated on May 20, 2024 in connection with the Nexcella Absorption. In addition, as a result of the Nexcella Absorption, the Class A Preferred Stock, Class A Common Stock, and the Founders Agreement ceased to exist.
Note 4 – Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist of the following as of June 30, 2024 and December 31, 2023:
June 30, 2024 | December 31, 2023 | |||||||
Prepaid research and development expenses | $ | $ | ||||||
Prepaid insurance expense | ||||||||
Prepaid investor relations expense | ||||||||
Other current assets | ||||||||
Total prepaid expenses and other current assets | $ | $ |
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Note 5 – Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consist of the following as of June 30, 2024 and December 31, 2023:
June 30, 2024 | December 31, 2023 | |||||||
Accounts payable | $ | $ | ||||||
Accrued research and development expenses | ||||||||
Accrued professional services | ||||||||
Accrued compensation and related expenses | ||||||||
Other accrued expenses | ||||||||
Total accounts payable and accrued expenses | $ | $ |
Note 6 – Property and Equipment
Property and equipment at June 30, 2024 and December 31, 2023 consisted of:
June 30, 2024 | December 31, 2023 | |||||||
Operating equipment | $ | $ | ||||||
Office equipment | ||||||||
Less: Accumulated depreciation | ( |
) | ( |
) | ||||
Construction in progress | ||||||||
$ | $ |
For
the six months ended June 30, 2024 and 2023, depreciation expense amounted to $
The
construction in progress of $
Note 7 – Stockholders’ Equity
The Company has authorized shares of common stock and shares of preferred stock each with a par value of $ per share.
July 2023 ATM Sales Agreement
On
July 14, 2023, the Company entered into the July Sales Agreement with the Sales Agent pursuant to which the Company may offer and sell,
from time to time, through the Sales Agent, shares (the “July Shares”) of the Company’s common stock, par value $
Under the July Sales Agreement, the Sales Agent may sell the July Shares in sales deemed to be “at-the-market offerings” as defined in Rule 415(a)(4) promulgated under the Securities Act, including sales made directly on or through The Nasdaq Capital Market or any other existing trading market for the Company’s common stock, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, and/or any other method permitted by law. The Company may instruct the Sales Agent not to sell any July Shares if the sales cannot be effected at or above the price designated by the Company from time to time.
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The
Company will pay the Sales Agent a fixed commission rate of
During
the six months ended June 30, 2024, the Company sold a total of
Common Stock Issuance – Public Offering
On
February 5, 2024, the Company entered into an Underwriting Agreement (the “Agreement”) with Titan Partners Group LLC, a division
of American Capital Partners, LLC (the “Underwriter”), relating to an underwritten offering (the “Offering”)
of
Other Common Stock Issuances
During the six months ended June 30, 2024, the Company issued shares of restricted common stock valued at $ for investor relations services based on the average closing price for the prior 10 trading days pursuant to a marketing services agreement entered into on July 25, 2023.
During the six months ended June 30, 2024, the Company issued shares of restricted common stock valued at $ for investor relations services based on the closing price pursuant to the extensions of marketing services agreements.
During
the six months ended June 30, 2024, the Company issued
During
the year ended December 31, 2023, the Company entered into various marketing services agreements, whereby the Company agreed to issue
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Restricted Stock Awards
Pursuant to the Merger, the Company issued to the former participants in the Nexcella 2022 Equity Incentive Plan, restricted stock awards to receive common stock in the Company. The shares were issued on a pro-rata basis and resulted in no change in fair value.
During the six months ended June 30, 2024, the Company recorded stock-based compensation expense of $ related to the total fair value of the previously issued restricted stock awards, which was included in general and administrative expenses. The unrecognized stock-based compensation expense of $ related to unvested restricted common stock is expected to be recognized over the remaining vesting period of years. As of June 30, 2024, shares of restricted common stock have vested with the remaining restricted shares to vest over the vesting period of years.
Stock Options
In 2016, the Board of Directors of the Company approved the Immix Biopharma, Inc. 2016 Equity Incentive Plan (the “2016 Plan”). The 2016 Plan allows for the Board of Directors to grant various forms of incentive awards covering up to shares of common stock. During the year ended December 31, 2021, the Board of Directors amended the 2016 Plan to increase the aggregate number of shares available for issuance under the 2016 Plan to shares of common stock. On September 10, 2021, the Board of Directors approved the 2021 Equity Incentive Plan (as amended and restated, the “2021 Plan”) pursuant to which it initially reserved and made available for future issuance under the 2021 Plan (i) shares of common stock, plus (ii) the number of shares of common stock reserved, but unissued under the 2016 Plan, and (iii) the number of shares of common stock underlying forfeited awards under the 2016 Plan, provided that shares of common stock issued under the 2021 Plan with respect to an Exempt Award (as defined in the 2021 Plan) would not count against such share limit. Subsequent to September 10, 2021, no further awards are to be issued under the 2016 Plan, but all awards under the 2016 Plan which were outstanding as of September 10, 2021 (including any Grandfathered Arrangement (as defined in the 2021 Plan)) shall continue to be governed by the terms, conditions and procedures set forth in the 2016 Plan and any applicable award agreement.
On April 24, 2023, the Company’s Board of Directors adopted the Immix Biopharma, Inc. Amended and Restated 2021 Omnibus Equity Incentive Plan (the “Amended 2021 Plan”) which, among other things, increased the number of shares of common stock that may be issued under such plan by shares, subject to stockholder approval. On June 7, 2023, stockholders of the Company approved the Amended 2021 Plan. On April 18, 2024, our Board of Directors approved amendments to the 2021 Plan (the “2nd Amended 2021 Plan”) to (i) increase the number of shares of common stock available for issuance under the 2021 Plan by to a total share reserve of and (ii) the adoption of an evergreen provision to the 2021 Plan to provide for an automatic annual increase in the shares of common stock available for issuance under the 2021 Plan over the next ten years (the “2021 Plan Amendments”). Pursuant to the evergreen provision, the number of shares available for issuance under the 2021 Plan shall automatically increase on January 1st of each year for a period of ten years, commencing on January 1, 2025 and ending on (and including) January 1, 2034, in an amount equal to five percent ( %) of the total number of shares of Common Stock outstanding on December 31st of the preceding calendar year. On June 11, 2024, stockholders of the Company approved the 2nd Amended 2021 Plan. As of June 30, 2024, there were shares of the Company’s common stock remaining to be issued under the Amended 2021 Plan.
In addition, the Company issued to the former participants in the Nexcella 2022 Equity Incentive Plan, options to purchase up to shares of Company common stock at an exercise price of $ per share (the closing price on May 17, 2024), under the Company’s Amended and Restated 2021 Omnibus Equity Incentive Plan. The options were issued on a pro-rata basis and resulted in no change in fair value.
During the six months ended June 30, 2024, the Compensation Committee of the Board of Directors approved the issuance of options to purchase shares of the Company’s common stock to non-employee members of the Board of Directors of the Company and shares of the Company’s common stock to management of the Company. The options have a term of years, an exercise price of $ per share and vest over periods of 12 to 48 equal monthly installments.
During the six months ended June 30, 2024, the Board of Directors approved the issuance of options to purchase shares of the Company’s common stock to employees of the Company with a term of years and exercise prices ranging from $ - $ per share, which options vest in 48 equal monthly installments.
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The Company recognized stock-based compensation of $ and $ related to stock options for the three months ended June 30, 2024 and 2023 and $ and $ related to stock options for the six months ended June 30, 2024 and 2023, respectively, which is included in general and administrative expenses.
As of June 30, 2024, the Company had unrecognized stock-based compensation expense of $ , related to unvested stock options, which is expected to be recognized over the weighted-average vesting period of years.
Options | Weighted- Average Exercise Price Per Share | |||||||
Outstanding, January 1, 2024 | $ | |||||||
Granted | $ | |||||||
Exercised | ( | ) | $ | |||||
Forfeited | ( | ) | $ | |||||
Expired | $ | |||||||
Outstanding and expected to vest, June 30, 2024 | $ |
Outstanding | Exercisable | |||||||||||||||||||||
Exercise Price Range | Number of Option Shares | Weighted Average Exercise Price | Weighted Average Remaining Life (Years) | Number of Option Shares | Weighted Average Exercise Price | |||||||||||||||||
$ | - | $ | $ | |||||||||||||||||||
$ |