UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, |
OR
☐ | |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from |
Commission File Number: 001-39563
GEOVAX LABS, INC.
(Exact name of registrant as specified in its charter)
Delaware | 87-0455038 |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
1900 Lake Park Drive, Suite 380 | |
Smyrna, Georgia | 30080 |
(Address of principal executive offices) | (Zip Code) |
(678) 384-7220
(Registrant’sRegistrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each Class | Trading Symbol | Name of each Exchange on which Registered |
Common Stock $0.001 par value | GOVX | The Nasdaq Capital Market |
Warrants to Purchase Common Stock | GOVXW | The Nasdaq Capital Market |
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ | |
Non-accelerated filer | ☒ | Emerging growth company | ☐ | |
Smaller reporting company | ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):
Yes ☐ No ☒
As of April 27, 2022, 9,449,025May 4, 2023, 26,443,649 shares of the Registrant’s common stock, $.001 par value, were issued and outstanding.
TABLE OF CONTENTS
Page | |||
PART I – FINANCIAL INFORMATION | |||
Item 1 | Condensed Consolidated Financial Statements: | ||
Condensed Consolidated Balance Sheets as of March 31, | 1 | ||
Condensed Consolidated Statements of Operations for the three-month periods ended March 31, | |||
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three-month periods ended March 31, 2023 and 2022 | 3 | ||
Condensed Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2023 and 2022 | |||
Notes to Condensed Consolidated Financial Statements (unaudited) | 5 | ||
Item 2 | Management's Discussion and Analysis of Financial Condition and Results of Operations | 8 | |
Item 3 | Quantitative and Qualitative Disclosures about Market Risk | 12 | |
Item 4 | Controls and Procedures | 12 | |
PART II – OTHER INFORMATION | |||
Item 1 | Legal Proceedings | 13 | |
Item 1A | Risk Factors | 13 | |
Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds | 13 | |
Item 3 | Defaults Upon Senior Securities | 13 | |
Item 4 | Mine Safety Disclosures | 13 | |
Item 5 | Other Information | 13 | |
Item 6 | Exhibits | 14 | |
SIGNATURES | 15 |
Part I -- FINANCIAL INFORMATION
Item 1 |
|
GEOVAX LABS, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
March 31 | December 31, | March 31 | December 31, | |||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
ASSETS | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 16,257,716 | $ | 11,423,870 | $ | 23,849,860 | $ | 27,612,732 | ||||||||
Grant funds and other receivables | 99,526 | 49,006 | ||||||||||||||
Prepaid expenses and other current assets | 279,648 | 156,240 | ||||||||||||||
Prepaid expenses | 2,138,971 | 1,325,998 | ||||||||||||||
Total current assets | 16,636,890 | 11,629,116 | 25,988,831 | 28,938,730 | ||||||||||||
Property and equipment, net | 206,855 | 156,938 | 217,593 | 234,912 | ||||||||||||
Deposits | 11,010 | 11,010 | ||||||||||||||
Other assets | 1,197,788 | 2,174,286 | ||||||||||||||
Total assets | $ | 16,854,755 | $ | 11,797,064 | $ | 27,404,212 | $ | 31,347,928 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable | $ | 426,103 | $ | 2,057,534 | $ | 1,287,995 | $ | 1,747,682 | ||||||||
Accrued expenses | 3,075,000 | 3,377,826 | 3,251,060 | 3,000,212 | ||||||||||||
Total current liabilities | 3,501,103 | 5,435,360 | 4,539,055 | 4,747,894 | ||||||||||||
Accrued expenses - noncurrent | 2,000,000 | 2,000,000 | ||||||||||||||
Total liabilities | 5,501,103 | 7,435,360 | ||||||||||||||
Commitments (Note 7) | ||||||||||||||||
Commitments (Note 4) | ||||||||||||||||
Stockholders’ equity: | ||||||||||||||||
Common stock, $.001 par value: | ||||||||||||||||
Authorized shares – 600,000,000 Issued and outstanding shares – 9,449,025 and 6,381,541 at March 31, 2022 and December 31, 2021, respectively | 9,449 | 6,382 | ||||||||||||||
Authorized shares – 600,000,000 Issued and outstanding shares – 26,443,649 and 26,334,953 at March 31, 2023 and December 31, 2022, respectively | 26,444 | 26,335 | ||||||||||||||
Additional paid-in capital | 78,147,616 | 68,731,220 | 105,273,652 | 104,970,722 | ||||||||||||
Accumulated deficit | (66,803,413 | ) | (64,375,898 | ) | (82,434,939 | ) | (78,397,023 | ) | ||||||||
Total stockholders’ equity | 11,353,652 | 4,361,704 | 22,865,157 | 26,600,034 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 16,854,755 | $ | 11,797,064 | $ | 27,404,212 | $ | 31,347,928 |
See accompanying notes to condensed consolidated financial statements.
GEOVAX LABS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March 31, | Three Months Ended March 31, | |||||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
Grant revenues | $ | 81,526 | $ | 110,417 | ||||||||||||
Grant revenue | $ | - | $ | 81,526 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 1,330,544 | 602,783 | 2,819,189 | 1,330,544 | ||||||||||||
General and administrative | 1,179,024 | 1,071,710 | 1,451,425 | 1,179,024 | ||||||||||||
Total operating expenses | 2,509,568 | 1,674,493 | 4,270,614 | 2,509,568 | ||||||||||||
Loss from operations | (2,428,042 | ) | (1,564,076 | ) | (4,270,614 | ) | (2,428,042 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Other income: | ||||||||||||||||
Interest income | 527 | 2,053 | 232,698 | 527 | ||||||||||||
Interest expense | 0 | (755 | ) | |||||||||||||
Total other income (expense) | 527 | 1,298 | ||||||||||||||
Net loss | $ | (2,427,515 | ) | $ | (1,562,778 | ) | $ | (4,037,916 | ) | $ | (2,427,515 | ) | ||||
Basic and diluted: | ||||||||||||||||
Net loss per common share | $ | (0.34 | ) | $ | (0.29 | ) | $ | (0.15 | ) | $ | (0.34 | ) | ||||
Weighted average shares outstanding | 7,109,473 | 5,332,058 | 26,338,576 | 7,109,473 |
See accompanying notes to condensed consolidated financial statements.
GEOVAX LABS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
Three Months Ended March 31, 2022 | ||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Additional | Accumulated | Stockholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Paid-in Capital | Deficit | Equity | ||||||||||||||||||||||
Balance at December 31, 2021 | 0 | $ | 0 | 6,381,541 | $ | 6,382 | $ | 68,731,220 | $ | (64,375,898 | ) | $ | 4,361,704 | |||||||||||||||
Sale of common stock and warrants for cash | 0 | 0 | 707,484 | 707 | 9,228,541 | 0 | 9,229,248 | |||||||||||||||||||||
Issuance of common stock upon warrant exercise | 0 | 0 | 2,360,000 | 2,360 | (2,336 | ) | 0 | 24 | ||||||||||||||||||||
Stock option expense | - | 0 | - | 0 | 190,191 | 0 | 190,191 | |||||||||||||||||||||
Net loss for the three months ended March 31, 2022 | - | 0 | - | 0 | 0 | (2,427,515 | ) | (2,427,515 | ) | |||||||||||||||||||
Balance at March 31, 2022 | 0 | $ | 0 | 9,449,025 | $ | 9,449 | $ | 78,147,616 | $ | (66,803,413 | ) | $ | 11,353,652 |
Three Months Ended March 31, 2023 | ||||||||||||||||||||
Total | ||||||||||||||||||||
Common Stock | Additional | Accumulated | Stockholders’ | |||||||||||||||||
Shares | Amount | Paid-in Capital | Deficit | Equity | ||||||||||||||||
Balance at December 31, 2022 | 26,334,953 | $ | 26,335 | $ | 104,970,722 | $ | (78,397,023 | ) | $ | 26,600,034 | ||||||||||
Issuance of common stock for services | 108,696 | 109 | 74,891 | - | 75,000 | |||||||||||||||
Stock option expense | - | - | 228,039 | - | 228,039 | |||||||||||||||
Net loss for the three months ended March 31, 2023 | - | - | - | (4,037,916 | ) | (4,037,916 | ) | |||||||||||||
Balance at March 31, 2023 | 26,443,649 | $ | 26,444 | $ | 105,273,652 | $ | (82,434,939 | ) | $ | 22,865,157 |
Three Months Ended March 31, 2021 | ||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Additional | Accumulated | Stockholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Paid-in Capital | Deficit | Equity | ||||||||||||||||||||||
Balance at December 31, 2020 | 100 | $ | 76,095 | 3,834,095 | $ | 3,834 | $ | 55,294,504 | $ | (45,805,581 | ) | $ | 9,568,852 | |||||||||||||||
Sale of common stock for cash | 0 | 0 | 1,644,000 | 1,644 | 9,407,276 | 0 | 9,408,920 | |||||||||||||||||||||
Issuance of common stock upon warrant exercise | 0 | 0 | 835,900 | 836 | 3,173,320 | 0 | 3,174,156 | |||||||||||||||||||||
Issuance of common stock for services | 0 | 0 | 1,472 | 1 | 5,999 | 0 | 6,000 | |||||||||||||||||||||
Stock option expense | - | - | - | - | 56,190 | - | 56,190 | |||||||||||||||||||||
Net loss for the three months ended March 31, 2021 | - | 0 | - | 0 | 0 | (1,562,778 | ) | (1,562,778 | ) | |||||||||||||||||||
Balance at March 31, 2021 | 100 | $ | 76,095 | 6,315,467 | $ | 6,315 | $ | 67,937,289 | $ | (47,368,359 | ) | $ | 20,651,340 |
Three Months Ended March 31, 2022 | ||||||||||||||||||||
Total | ||||||||||||||||||||
Common Stock | Additional | Accumulated | Stockholders’ | |||||||||||||||||
Shares | Amount | Paid-in Capital | Deficit | Equity | ||||||||||||||||
Balance at December 31, 2021 | 6,381,541 | $ | 6,382 | $ | 68,731,220 | $ | (64,375,898 | ) | $ | 4,361,704 | ||||||||||
Sale of common stock and warrants for cash | 707,484 | 707 | 9,228,541 | - | 9,229,248 | |||||||||||||||
Issuance of common stock upon warrant exercise | 2,360,000 | 2,360 | (2,336 | ) | - | 24 | ||||||||||||||
Stock option expense | - | - | 190,191 | - | 190,191 | |||||||||||||||
Net loss for the three months ended March 31, 2022 | - | - | - | (2,427,515 | ) | (2,427,515 | ) | |||||||||||||
Balance at March 31, 2022 | 9,449,025 | $ | 9,449 | $ | 78,147,616 | $ | (66,803,413 | ) | $ | 11,353,652 |
See accompanying notes to condensed consolidated financial statements.
GEOVAX LABS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
Three Months Ended March 31, | Three Months Ended March 31, | |||||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net loss | $ | (2,427,515 | ) | $ | (1,562,778 | ) | $ | (4,037,916 | ) | $ | (2,427,515 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||
Depreciation expense | 12,269 | 4,517 | 17,319 | 12,269 | ||||||||||||
Stock-based compensation expense | 205,151 | 76,790 | 246,039 | 205,151 | ||||||||||||
Changes in assets and liabilities: | ||||||||||||||||
Grant funds and other receivables | (50,520 | ) | 182,663 | |||||||||||||
Grant funds receivable | - | (50,520 | ) | |||||||||||||
Prepaid expenses and other current assets | (138,368 | ) | 35,659 | (755,973 | ) | (138,368 | ) | |||||||||
Accounts payable and accrued expenses | (1,934,257 | ) | (357,878 | ) | ||||||||||||
Other assets | 976,498 | - | ||||||||||||||
Accounts payable, accrued expenses and other liabilities | (208,839 | ) | (1,934,257 | ) | ||||||||||||
Total adjustments | (1,905,725 | ) | (58,249 | ) | 275,044 | (1,905,725 | ) | |||||||||
Net cash used in operating activities | (4,333,240 | ) | (1,621,027 | ) | (3,762,872 | ) | (4,333,240 | ) | ||||||||
Cash flows from investing activities: | - | - | ||||||||||||||
Purchase of equipment | (62,186 | ) | 0 | - | (62,186 | ) | ||||||||||
Net cash used in investing activities | (62,186 | ) | 0 | - | (62,186 | ) | ||||||||||
Cash flows from financing activities: | ||||||||||||||||
Net proceeds from sale of common stock and warrants | 9,229,248 | 9,408,920 | - | 9,229,248 | ||||||||||||
Net proceeds from warrant exercise | 24 | 3,174,156 | - | 24 | ||||||||||||
Principal repayment of note payable | 0 | (3,063 | ) | |||||||||||||
Net cash provided by financing activities | 9,229,272 | 12,580,013 | - | 9,229,272 | ||||||||||||
Net increase in cash and cash equivalents | 4,833,846 | 10,958,986 | ||||||||||||||
Net increase (decrease) in cash and cash equivalents | (3,762,872 | ) | 4,833,846 | |||||||||||||
Cash and cash equivalents at beginning of period | 11,423,870 | 9,883,796 | 27,612,732 | 11,423,870 | ||||||||||||
Cash and cash equivalents at end of period | $ | 16,257,716 | $ | 20,842,782 | $ | 23,849,860 | $ | 16,257,716 |
Supplemental disclosure of non-cash financing activities:
During the three months ended March 31, 2021, 145,866 shares of common stock were issued upon the cashless exercise of 188,668 stock purchase warrants.
See accompanying notes to condensed consolidated financial statements.
GEOVAX LABS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 20222023
(unaudited)
1. | Nature of Business |
GeoVax Labs, Inc. (“GeoVax” or, headquartered in the “Company”),Atlanta, Georgia metropolitan area, is a clinical-stage biotechnology company incorporated under the laws of the State of Delaware. GeoVax Labs, Inc. and its wholly owned subsidiary, GeoVax, Inc., a Georgia corporation, are collectively referred to herein as “GeoVax” or the “Company”.
The Company is focused on developing immunotherapies and vaccines against cancers and infectious diseases and cancers using novel vector vaccine platforms. GeoVax’s product pipeline includes ongoing human clinical trials in COVID-19for a next-generation COVID-19 vaccine and a gene-directed therapy for advanced head and neck cancer. Additional preclinical research and development programs include preventive vaccines against Zika Virus,Mpox (monkeypox), hemorrhagic fever viruses (Ebola Zaire, Ebola Sudan, Marburg, and Lassa)Lassa Fever) Zika virus, and malaria, as well as immunotherapies for solid tumors.
2. | Summary of Significant Accounting Policies |
GeoVax is incorporated under
We disclosed in Note 2 to our consolidated financial statements included in our Annual Report on Form 10-K for the lawsyear ended December 31, 2022 those accounting policies that we consider significant in determining our results of operations and financial position. During the three months ended March 31, 2023, there have been no material changes to, or in the application of, the State of Delawareaccounting policies previously identified and our principal offices are locateddescribed in the metropolitan Atlanta, Georgia area.Form 10-K.
2.Basis of Presentation
The accompanying condensed consolidated financial statements at March 31, 2022 include the accounts of GeoVax Labs, Inc. and for the three-month periods ended March 31, 2022 and 2021GeoVax, Inc. All intercompany transactions have been eliminated in consolidation. The financial statements are unaudited, but include all adjustments, consisting of normal recurring entries, which we believe to be necessary for a fair presentation of the dates andinterim periods presented. Interim results are not necessarily indicative of results for a full year. The financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K10-K for the year ended December 31, 2021. 2022. We expect our operating results to fluctuate for the foreseeable future; therefore, period-to-period comparisons should not be relied upon as predictive of the results in future periods.
OurWe believe that our existing cash resources will be sufficient to continue our planned operations into the fourth quarter of 2023. We are devoting substantially all of our present efforts to research and development of our vaccine and immunotherapy candidates and expect to require additional funding to continue our research and development activities. We plan to pursue additional cash resources through public or private equity or debt financings, government grants, arrangements with strategic partners, or from other sources. There can be no assurance that additional funding will be available on favorable terms or at all. These factors collectively raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date these financial statements are issued. Management believes that we will be successful in securing the additional capital required to continue the Company’s planned operations, but that our plans do not fully alleviate the substantial doubt about the Company’s ability to operate as a going concern.
The accompanying financial statements have been prepared assuming that wethe Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business for at leastbusiness. The financial statements do not include any adjustments relating to the twelve-month period followingrecoverability and classification of recorded asset amounts or the issue dateamounts and classification of these consolidated financial statements. We are devoting substantially allliabilities that might result from the outcome of our present efforts to research and development of our vaccine and immunotherapy candidates. We expect to incur future net losses and require substantial funds as we continue our research and development activities. Our transition to profitability will be dependent upon, among other things, the successful development and commercialization of our product candidates. We may never achieve profitability or positive cash flows, and unless and until we do, we will continue to need to raise additional funding. We have funded our activities to date from sales of our equity securities, government grants and clinical trial assistance, and corporate and academic collaborations. We intend to fund our future operations through additional private and/or public offerings of debt or equity securities. In addition, we may seek additional capital through government grants, arrangements with strategic partners, or from other sources. There can be no assurance that we will be able to raise additional funds or achieve or sustain profitability or positive cash flows from operations. uncertainties described above.
3.Significant Accounting Policies and Recent Accounting Pronouncements
We disclosed in Note 2 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 those accounting policies that we consider significant in determining our results of operations and financial position. During the three months ended March 31, 2022, 2023, there have been no material changes to, or in the application of, the accounting policies previously identified and described in the Form 10-K, and there have been no other recent new accounting pronouncements or changes in accounting pronouncements which we expect to have a material impact on our financial statements.
3. | Balance Sheet Components |
Prepaid Expenses4.Basic– Prepaid expenses consist of the following:
March 31, 2023 | December 31, 2022 | |||||||
Prepaid clinical trial costs (current portion) | $ | 1,962,913 | $ | 1,171,077 | ||||
Prepaid insurance premiums | 72,013 | 107,876 | ||||||
Prepaid rent | 13,045 | 13,045 | ||||||
Other prepaid expenses | 91,000 | 34,000 | ||||||
Total prepaid expenses | $ | 2,138,971 | $ | 1,325,998 |
Property and Diluted Loss Per Equipment– Property and equipment consist of the following:
March 31, 2023 | December 31, 2022 | |||||||
Equipment and furnishings | $ | 725,812 | $ | 725,812 | ||||
Leasehold improvements | 115,605 | 115,605 | ||||||
Total property and equipment | 841,417 | 841,417 | ||||||
Accumulated depreciation and amortization | (623,824 | ) | (606,505 | ) | ||||
Total property and equipment, net | $ | 217,593 | $ | 234,912 |
Other Assets – Other assets consist of the following:
March 31, 2023 | December 31, 2022 | |||||||
Prepaid clinical trial costs (noncurrent portion) | $ | 1,106,778 | $ | 2,083,276 | ||||
Prepaid technology license fees | 80,000 | 80,000 | ||||||
Deposits | 11,010 | 11,010 | ||||||
Total other assets | $ | 1,197,788 | $ | 2,174,286 |
Accrued Expenses – Accrued expenses consist of the following:
March 31, 2023 | December 31, 2022 | |||||||
Accrued technology license fees | $ | 2,000,000 | $ | 2,000,000 | �� | |||
Payroll-related liabilities | 127,553 | 550,810 | ||||||
Other accrued expenses | 1,123,507 | 449,402 | ||||||
Total accrued expenses | $ | 3,251,060 | $ | 3,000,212 |
4. | Commitments |
Operating Lease
We lease approximately 8,400 square feet of office and laboratory space pursuant to an operating lease which expires on December 31, 2025. Rent expense for the three-month periods ended March 31, 2023 and 2022 was $45,414 and $44,089, respectively. Future minimum lease payments total $136,242 in 2023, $187,056 in 2024, and $192,708 in 2025 although the lease may be terminated at any time by either party with one hundred eighty days written notice.
License Agreements
We have entered into license agreements for various technologies and patent rights associated with our product development activities. These agreements may contain provisions for upfront payments, milestone fees due upon the achievement of selected development and regulatory events, minimum annual royalties or other fees, and royalties based on future net sales. Due to the uncertainty of the achievement and timing of the contingent events requiring payment under these agreements, the amounts to be paid by us in the future are not determinable.
Other Commitments
In the normal course of business, we enter into various contracts and purchase commitments including those with contract research organizations (“CROs”) for clinical trials services, contract manufacturing organizations (“CMOs”) for production of materials for use in our clinical trials, and other independent contractors for preclinical research activities and other services and products. Most contracts are generally cancellable, with notice, at the Company’s option. Payments due upon cancellation may consist of payments for services provided or expenses incurred to date, or cancellation penalties depending on the time of cancellation.
5. | Stockholders’ Equity |
Common ShareStock Transactions
During March 2023, we issued 108,696 shares of our common stock pursuant to a professional relations and consulting agreement.
Stock Options
We have a stock-based incentive plan (the “2020 Plan”) pursuant to which our Board of Directors may grant stock options and other stock-based awards to our employees, directors and consultants. A total of 2,250,000 shares of our common stock are reserved for issuance pursuant to the 2020 Plan. During the three months ended March 31, 2023, there were no transactions related to the 2020 Plan. As of March 31, 2023, there are 2,058,800 stock options outstanding, with a weighted-average exercise price of $1.89 per share and a weighted-average remaining contractual term of 8.9 years.
Stock Purchase Warrants
We have issued stock purchase warrants in connection with past financing and licensing transactions. During the three months ended March 31, 2023, there were no transactions related to our stock purchase warrants. As of March 31, 2023, there are 13,384,115 stock purchase warrants outstanding with a weighted-average exercise price of $2.77 per share and a weighted-average remaining term of 4.3 years.
6. | Stock-Based Compensation Expense |
Stock-based compensation expense related to stock options is recognized on a straight-line basis over the requisite service period for the award and is allocated to research and development expense or general and administrative expense based upon the classification of the individual to whom the award is granted. Stock-based compensation expense related to stock option grants was $228,039 and $190,191 during the three-month periods ended March 31, 2023 and 2022, respectively, and as of March 31, 2023, there is $1,221,367 of unrecognized compensation expense that we expect to recognize over a weighted-average period of 1.8 years.
We have also issued shares of our restricted common stock to consultants and recognize the related expense over the terms of the related agreements. During the three-month periods ended March 31, 2023 and 2022 we recorded stock-based compensation expense of $18,000 and $14,960, respectively, associated with common stock issued for consulting services. As of March 31, 2023, there is $81,000 recorded as a prepaid expense for these arrangements, which will be recognized as expense over the terms of the related agreements.
7. | Net Loss Per Share |
Basic and diluted loss per common share are computed based on the weighted average number of common shares outstanding. The Company’s potentially dilutive securities, which include stock options and stock purchase warrants, have been excluded from the computation of diluted net loss per share as the effect would be antidilutive. The securities that could potentially dilutive securitiesdilute basic earnings per share in the future and that have been excluded from the computation of diluted net loss per share totaled 6,846,41515,442,915 and 3,395,6356,846,415 shares at March 31, 2022 2023 and 2021,2022, respectively.
8. | Income Taxes |
5.Property
No provision for income taxes was recorded in either of the three-month periods ended March 31, 2023 and Equipment2022. The Company remains in a cumulative loss position with a full valuation allowance recorded against its net deferred income tax assets as of March 31, 2023.
Property and equipment as shown on the accompanying Condensed Consolidated Balance Sheets is composed of the following as of March 31, 2022 and December 31, 2021:
March 31, 2022 | December 31, 2021 | |||||||
Equipment and furnishings | $ | 653,740 | $ | 591,554 | ||||
Leasehold improvements | 115,605 | 115,605 | ||||||
Total property and equipment | 769,345 | 707,159 | ||||||
Accumulated depreciation and amortization | (562,490 | ) | (550,221 | ) | ||||
Property and equipment, net | $ | 206,855 | $ | 156,938 |
Item 2 | Management’s Discussion and Analysis of Financial Condition And Results of Operations |
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand our results of operations and financial condition. This MD&A is provided as a supplement to, and should be read in conjunction with, our condensed consolidated financial statements and the accompanying notes thereto and other disclosures included in this Quarterly Report on Form 10-Q (this “Report”), and our audited financial statements and the accompanying notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021,2022, which was filed with the Securities and Exchange Commission on March 9, 2022.23, 2023.
Forward-Looking Statements
Information included in this Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”“Exchange Act”). Forward-looking statements are not statements of historical facts, but rather reflect our current expectations concerning future events and results. We generally use the words “believes,“believes,” “expects,“expects,” “intends,“intends,” “plans,“plans,” “anticipates,“anticipates,” “likely,“likely,” “will”“will” and similar expressions to identify forward-looking statements. All statements in this Report, other than statements of historical facts, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans, intentions, expectations and objectives could be forward-looking statements. Such forward-looking statements, including those concerning our expectations, involve risks, uncertainties and other factors, some of which are beyond our control, which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and factors include, but are not limited to, those factors set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.2022. We operate in a highly competitive, highly regulated and rapidly changing environment and our business is constantly evolving. Therefore, it is likely that new risks will emerge, and that the nature and elements of existing risks will change, over time. It is not possible for management to predict all such risk factors or changes therein, or to assess either the impact of all such risk factors on our business. We assume no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this Report.
Overview
GeoVax is a clinical-stage biotechnology company developing immunotherapies and vaccines against cancers and infectious diseases and cancers using novel vector vaccine platforms. GeoVax’s product pipeline includes ongoing human clinical trials infor a next-generation COVID-19 vaccine and a gene-directed therapy against advanced head and neck cancer. Additional preclinical research and development programs include preventive vaccines against Zika Virus,Mpox (monkeypox), hemorrhagic fever viruses (Ebola Zaire, Ebola Sudan, Marburg, and Lassa), Zika virus, and malaria, as well as immunotherapies for solid tumors.
Our programs are in various stages of development, the most significant of which are summarized below:
● | GEO-CM04S1 is currently undergoing a Phase 2 clinical trial |
● |
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● | Gedeptin® is currently undergoing a Phase 1/2 clinical trial |
● |
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Our corporate goalstrategy is to advance, protect and exploit our differentiated vaccine/immunotherapy technologies leading to the successful development of preventive and therapeutic vaccines.vaccines and immunotherapies against infectious diseases and various cancers. Our strategygoal is to advance products through to human clinical testing, potentially seekingand to seek partnership or licensing arrangements for achieving regulatory approval and commercialization. We also leverage third party resources through collaborations and partnerships for preclinical and clinical testing with multiple government, academic and corporate entities.
Financial Overview
Revenue
We have not generated any revenuesrevenue from the sale of the products we are developing, and we do not expectproduct sales to generate any such revenues for at least the next several years.date. Our product candidates will require significant additional research and development efforts, including extensive preclinical and clinical testing. All product candidates that we advance to clinical testing will require regulatory approval prior to commercial use and will require significant costs for commercialization. We may not be successful in our research and development efforts, and we may never generate sufficient product revenue to be profitable.
Results of Operations
The following table summarizes our results of operations for the three-month periods ended March 31, 2022 and 2021:
Three Months Ended March 31, | ||||||||||||
2022 | 2021 | Change | ||||||||||
Grant revenue | $ | 81,526 | $ | 110,417 | $ | (28,891 | ) | |||||
Operating expenses: | ||||||||||||
Research and development | 1,330,544 | 602,783 | 727,761 | |||||||||
General and administrative | 1,179,024 | 1,071,710 | 107,314 | |||||||||
Total operating expenses | 2,509,568 | 1,674,493 | 835,075 | |||||||||
Loss from operations | (2,428,042 | ) | (1,564,076 | ) | (863,966 | ) | ||||||
Total other income (expense) | 527 | 1,298 | (771 | ) | ||||||||
Net loss | $ | (2,427,515 | ) | $ | (1,562,778 | ) | $ | (864,737 | ) |
Grant Revenues
Our grant revenues relaterevenue relates to grants and contracts from agencies of the U.S. government in support of our vaccine development activities. We record revenue associated with these grants as the related costs and expenses are incurred. The following table summarizes our grant revenues for the three-month periods ended March 31, 2022 and 2021:
Three Months Ended March 31, | ||||||||||||
2022 | 2021 | Change | ||||||||||
Lassa Fever – U.S. Army Grant | $ | 81,526 | $ | - | $ | 81,526 | ||||||
Covid-19 – NIH SBIR Grant | - | 110,417 | (110,417 | ) | ||||||||
Total grant revenues | 81,526 | 110,417 | (28,891 | ) |
Grant revenues decreased by $28,891 (26%) for the three-month period ended March 31, 2022 compared to the three-month period ended March 31, 2021, attributable to the differing mix of active grants as shown in the table above, as well as the timing of expenditures related to such grants. As of March 31, 2022, all approved grant funds have been utilized.
Research and Development Expensesdevelopment expenses
Our researchSince our inception, we have focused and development expenses can fluctuate considerablywe continue to focus significant resources on a period-to-period basis, depending on the timing of expenditures related to our government grants and other research projects, and other factors. We do not disclose our research and development expenses by project, sinceactivities, including developing our employees’ time is spread across multiple programsvector platform and our laboratory facility is used for multiple product candidates. analytical testing methods, conducting preclinical studies, developing manufacturing processes, and conducting clinical trials. Research and development costs are expensed as incurred and consist primarily of the following:
● | personnel costs in our research, development and regulatory functions; |
● | expenses incurred with contract research organizations (“CROs”) that conduct clinical trials on our behalf; |
● | expenses incurred with contract manufacturing organizations (“CMOs”) that manufacture product used in our clinical trials; |
● | expenses incurred in procuring materials and for analytical testing services required to produce vaccine candidates; |
● | expenses incurred internally and externally to improve the efficiency and yield of our vaccine manufacturing process; |
● | laboratory supplies, vendor expenses and other third-party contract expenses related to preclinical research activities; |
● | technology license fees; |
● | consultant expenses for services supporting our clinical, regulatory and manufacturing activities; and |
● | facilities, depreciation and other general overhead expenses. |
We track the direct cost ofexpect our research and development expenses relatedexpenditures to government grant revenue byincrease during the percentageremainder of assigned employees’ time spent on each grant2023 and other direct costs associated with each grant. Indirect costs associated with grants are not tracked separately but are applied based on a contracted overhead rate negotiated with the granting agency. Therefore, the recorded revenues associated with government grants approximate the costs incurred.
Researchbeyond as we advance our existing and development expenses increased by $727,761 (121%) for the three-month period ended March 31, 2022 versus the 2021 comparable period. Researchfuture product candidates into and development expense for the three-month periods ended March 31, 2022 and 2021 includes stock-based compensation expense of $54,292 and $21,468, respectively, associated with employee stock options, reflecting an increase of $32,824 (see discussion under “Stock-Based Compensation Expense” below). The remaining increase of $694,937 relates primarily to higher personnel costs (including the use of external consultants), costs of manufacturing materials for use inthrough clinical trials and a generally higher levelpursue regulatory approval, especially with regard to the ongoing Gedeptin and GEO-CM04S1 clinical programs. We do not provide forward-looking estimates of activity.costs and time to complete our research programs due to the many uncertainties associated with biotechnology research and development. Due to these uncertainties, our future expenditures are likely to be highly volatile in future periods depending on the outcomes of the trials and studies. As we obtain data from preclinical studies and clinical trials, we may elect to discontinue or delay certain development programs to focus our resources on more promising product candidates. Completion of preclinical studies and human clinical trials may take several years or more, but the length of time can vary substantially depending upon several factors. The duration and the cost of future clinical trials may vary significantly over the life of the project because of differences arising during development of the human clinical trial protocols, including the length of time required to enroll suitable patient subjects, the number of patients that ultimately participate in the clinical trial, the duration of patient follow-up, and the number of clinical sites included in the clinical trials.
General and Administrative Expensesadministrative expenses
For the three-month periods ended March 31, 2022,Our general and administrative expenses increased by $107,314 (10%) versus the 2021 comparable period. Generalconsist primarily of personnel costs in our executive, finance and investor relations, business development and administrative expensefunctions. Other general and administrative expenses include consulting fees, professional service fees for accounting and legal services, lease expenses related to our offices, insurance premiums, intellectual property costs incurred in connection with filing and prosecuting patent applications, depreciation and other costs. We expect our general and administrative expenses to continue to increase in the three-month periods ended March 31, 2022 and 2021 included stock-based compensation expense of $150,859 and $55,322, respectively, reflecting an increase of $95,537 (see discussion under “Stock-Based Compensation Expense” below).
Stock-Based Compensation Expense
The table below shows the components of stock-based compensation expense for the three-month periods ended March 31, 2022 and 2021.
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
Stock option expense | $ | 190,191 | $ | 56,190 | ||||
Stock issued for non-employee services | 14,960 | 20,600 | ||||||
Total stock-based compensation expense | $ | 205,151 | $ | 76,790 |
Our stock option grants to employees generally vest over a three-year period from the date of grant. For members of our Board of Directors the vesting period is one year, effective with grants made during 2021. Stock-based compensation expense is recognized on a straight-line basis over the requisite vesting period for stock option grants or service period for stock awards to consultants. Such expense is allocated tofuture as we support expanded research and development expense oractivities, prepare for potential commercialization of our current and future product candidates, and other general and administrative expense according to the classification the employee, consultant or director to whom the stock compensation was granted.corporate activities.
Stock option expense increased by $134,001 for the three-month period ended March 31, 2022 versus the 2021 comparable period. The increase is primarily due to the prorated expense associated with the 2021 year-end stock option grants. As of March 31, 2022, there is $1,229,953 of unrecognized expense related to stock options that we expect to recognize over a weighted-average period of 2.1 years.
Other Income (Expense)
Interest income for the three-month periods ended March 31, 2022 and 2021 was $527 and $2,053, respectively. Interest expense for the three-month periods ended March 31, 2022 and 2021 was $-0- and $755, respectively.
Critical Accounting Policies and Estimates
This discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, management evaluates its estimates and adjusts the estimates as necessary. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.
For a description of critical accounting policies that require significant judgments and estimates during the preparation of our financial statements, refer to Item 7 inthe Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 2 to our Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2021.2022. There have been no significant changes to our critical accounting policies from those disclosed in our 20212022 Annual Report.
Recent Accounting Pronouncements – Information regarding recent accounting pronouncements is contained in Note 32 to the condensed consolidated financial statements, included in this Quarterly Report.
Liquidity and Capital ResourcesOff-Balance Sheet Arrangements
From inception throughWe have no off-balance sheet arrangements that are likely or reasonably likely to have a material effect on our financial condition or results of operations, other than the operating lease for our office and laboratory space.
Results of Operations
The following table summarizes our results of operations for the three-month periods ended March 31, 2023 and 2022:
Three Months Ended March 31, | ||||||||||||
2023 | 2022 | Change | ||||||||||
Grant revenue | $ | - | $ | 81,526 | $ | (81,526 | ) | |||||
Operating expenses: | ||||||||||||
Research and development | 2,819,189 | 1,330,544 | 1,488,645 | |||||||||
General and administrative | 1,451,425 | 1,179,024 | 272,401 | |||||||||
Total operating expenses | 4,270,614 | 2,509,568 | 1,761,046 | |||||||||
Loss from operations | (4,270,614 | ) | (2,428,042 | ) | (1,842,572 | ) | ||||||
Interest income | 232,698 | 527 | 232,171 | |||||||||
Net loss | $ | (4,037,916 | ) | $ | (2,427,515 | ) | $ | (1,610,401 | ) |
Grant Revenue
Grant revenue decreased by $81,526 (100%) for the three-month period ended March 31, 2023 compared to the three-month period ended March 31, 2022, wereflective of the wind-down of the Company’s grant from the U.S. Department of Defense for our Lassa Fever vaccine program. As of March 31, 2023, all approved grant funds have accumulated net losses of approximately $66.8 millionbeen utilized.
Research and we expect to incur operating lossesDevelopment Expenses
Our research and generate negative cash flows from operationsdevelopment expenses were $2,819,189 for the foreseeable future. We have funded our operationsthree-month period ended March 31, 2023, as compared to date$1,330,544 for the comparable 2022 period, representing an increase of $1,488,645 (112%). The increase during 2023 relates primarily from salesto higher personnel costs (including the use of our equity securitiesexternal consultants), costs of conducting clinical trials for GEO-CM04S1 and from government grantsGedeptin, and clinical trial assistance.a generally higher level of activity. Research and development expense for 2023 and 2022 includes stock-based compensation expense of $77,873 and $54,292, respectively, associated with employee stock options.
General and Administrative Expenses
Our general and administrative expenses were $1,451,425 for the three-month period ended March 31, 2023, as compared to $1,179,024 for the comparable 2022 period, representing an increase of $272,401 (23%). The increase during 2023 relates primarily to higher personnel costs, investor relations consulting costs, and travel expenses. General and administrative expense for 2023 and 2022 includes stock-based compensation expense of $168,166 and $150,859, respectively, associated with employee and consultant stock options and stock awards.
Other Income
Interest income for the three-month periods ended March 31, 2023 and 2022 was $232,698 and $527, respectively. The increase during 2023 is attributable to higher cash balances and rising interest rates.
Liquidity and Capital Resources
The following tables summarize our liquidity and capital resources as of March 31, 20222023 and December 31, 2021,2022, and our cash flows for the three-month periods ended March 31, 20222023 and 2021:2022:
Liquidity and Capital Resources | March 31, 2022 | December 31, 2021 | March 31, 2023 | December 31, 2022 | ||||||||||||
Cash and cash equivalents | $ | 16,257,716 | $ | 11,423,870 | $ | 23,849,860 | $ | 27,612,732 | ||||||||
Working capital | 13,135,787 | 6,193,756 | 21,449,776 | 24,190,836 |
Three Months Ended March 31, | Three Months Ended March 31, | |||||||||||||||
Cash Flow Data | 2022 | 2021 | 2023 | 2022 | ||||||||||||
Net cash provided by (used in): | ||||||||||||||||
Operating activities | $ | (4,333,240 | ) | $ | (1,621,027 | ) | $ | (3,762,872 | ) | $ | (4,333,240 | ) | ||||
Investing activities | (62,186 | ) | - | - | (62,186 | ) | ||||||||||
Financing activities | 9,229,272 | 12,580,013 | - | 9,229,272 | ||||||||||||
Net increase in cash and cash equivalents | $ | 4,833,846 | $ | 10,958,986 | $ | (3,762,872 | ) | $ | 4,833,846 |
Operating Activities – Net cash used in operating activities of $3,762,872 for the three months ended March 31, 2023 was primarily due to our net loss of $4,037,916, offset by non-cash charges such as depreciation and stock-based compensation expense, and by changes in our working capital accounts. Net cash used in operating activities of $4,333,240 for the three months ended March 31, 2022 was primarily due to our net loss of $2,427,515, offset by non-cash items such as depreciation expense and stock-based compensation expense, and by changes in our working capital accounts. Net cash used in operating activities of $1,621,027 for the three months ended March 31, 2021, was primarily due to our net loss of $1,562,778, offset by non-cash charges such as depreciation and stock-based compensation expense, and by changes in our working capital accounts.
Investing Activities – Net cash used in investing activities was $62,186$-0- and $-0-$62,186 for the three-month periods ended March 31, 2023 and 2022, and 2021, respectively, andrespectively. Net cash used in investing activities for the 2022 period relates to purchases of laboratoryproperty and equipment.
Financing Activities – Net cash provided by financing activities was $-0- and $9,229,272 for the three-month periodperiods ended March 31, 2023 and 2022, consisting ofrespectively. Net cash provided by financing activities for the 2022 period relates primarily to net proceeds from a private placementan offering of our common stock and warrants. Net cash provided by financing activities was $12,580,013 for the three-month period ended March 31, 2021, consisting of (i) net proceeds of $9,408,920 from a public offering of our common stock, (ii) $3,174,156 of net proceeds from the exercise of warrants, and (iii) $3,063 in principal repayments toward a note payable to the Georgia Research Alliance, Inc. (the “GRA Note”); the GRA Note has now been fully repaid.
Funding Requirements and Sources of Capital
Our primary usesTo date, we have not generated any product revenue. We do not know when, or if, we will generate any product revenue and we do not expect to generate significant product revenue unless and until we obtain regulatory approval and commercialize one of capital are for personnel costs, costs of conducting clinical trials, manufacturing costs for materials used in clinical trials, third-party research services, laboratory and related supplies, technology license fees, legal and other regulatory expenses, and general overhead costs.our current or future product candidates. We expect these costsanticipate that we will continue to be the primary operating capital requirementsgenerate losses for the near future.
Weforeseeable future, and we expect our research and development coststhe losses to increase as we continue the development of, and seek regulatory approvals for, our various programsproduct candidates, and asbegin to commercialize any approved products. We are subject to all of the risks incident to the development of new products, and may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may harm our business. We anticipate that we move toward later stages of development, especiallywill need substantial additional funding in connection with regard to clinical trials.our continuing operations. We have entered into license agreements with Cityfunded our operations to date primarily from sales of Hope, PNP Therapeutics, Inc., University of Alabama at Birmingham, Southern Research Institute, Emory University,our equity securities and with the U.S. Department of Healthfrom government grants and Human Services (HHS), as represented by National Institute of Allergy and Infectious Diseases (NIAID), an instituteclinical trial assistance.
As of the National Institutesdate of Health (NIH),this Quarterly Report, we expect our existing cash and cash equivalents will be sufficient to fund our operations into the fourth quarter of 2023. This projection takes into consideration contractual commitments we have made, and expect to make, in the normal course of operating our business, which include (i) obligations to our employees, (ii) our lease obligations, (iii) payments due under license agreements for various technologies and patent rights associated with our product development activities. These agreements may contain provisionsactivities, (iv) arrangements with contract research organizations (“CROs”), contract manufacturing organizations (“CMOs”), and other third-party vendors for upfront payments, milestone fees due upon the achievementclinical trials services and production of selected development and regulatory events, minimum annual royalties or other fees, and royalties based on future net sales. Aggregate unrecorded future minimum payments under these agreements (excluding milestone and royalty payments due upon contingent future events) are approximately $149,000materials for use in 2022, $128,000 in 2023, $128,000 in 2024, $28,000 in 2025 and $28,000 in 2026.
Our research and development expenditures during 2022 and beyond will increase significantly as a result of the Gedeptin and GEO-CM04S1our clinical programs. We do not provide forward-looking estimates of costs and time to complete our research programs due to the many uncertainties associated with biotechnology research and development. Due to these uncertainties, our future expenditures are likely to be highly volatile in future periods depending on the outcomes of the trials, and studies. As we obtain data from pre-clinical studies(v) other various firm purchase commitments and clinical trials, we may electcontractual obligations related to discontinue or delay certain development programs to focusproduction and testing of our resources on more promising product candidates. Completion of preclinical studies and human clinical trials may take several years or more, but the length of time can vary substantially depending upon several factors. The durationcandidates and the costgeneral operation of future clinical trials may vary significantly over the life of the project because of differences arising during development of the human clinical trial protocols, including the length of time required to enroll suitable patient subjects, the number of patients that ultimately participate in the clinical trial, the duration of patient follow-up, and the number of clinical sites included in the clinical trials.our business.
Gedeptin is currently undergoing a Phase 1/2 clinical trial (NCT03754933) for treatment of patients with advanced head and neck cancer. The initial stage of the study (10 patients) is being funded by the FDA pursuant to its Orphan Products Clinical Trials Grants Program. We may seek additional sources of capital through government and quasi-government grant programs and clinical trial support, although there can be no assurance any such funds will be obtained.
We expect that our general and administrative costs may increase during the remainder of 2022 and beyond in support of expanded research and development activities and other general corporate activities.
We believe our existing cash and cash equivalents will be sufficient to meet our anticipated cash requirements into the second quarter of 2023. However, ourOur forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties and is based on assumptions that may prove to be wrong; actual results could vary materially.
We have based our projections of operating capital requirements on assumptions that may needprove to obtain additional fundsbe incorrect, and we may use our available capital resources sooner than planned or in greater amounts than we currently anticipate. The actual amount of funds weexpect. Our future capital requirements will need to operate is subject todepend on many factors, some of which include but are beyond our control. These factors include not limited to:
● | the |
● | the timing and costs of manufacturing material for use in clinical trials; |
● | the number and scope of our research programs and the speed at which they are advanced; |
● | the progress and success of our preclinical and clinical development activities; |
● | the costs involved in prosecuting and enforcing patent claims and other intellectual property rights; |
● | the costs to attract and retain skilled personnel; |
● | the costs to maintain and expand our infrastructure to support our operations, our product development, and planned future commercialization efforts; |
● | the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; |
● | the costs associated with any products or technologies that we may in-license or acquire; and |
● | the costs and timing of regulatory approvals. |
We will need to continue to raise additional capital to support our future operating activities, including progression of our development programs, preparation for commercialization, and other operating costs. Financing strategies we may pursue include, but are not limited to, the public or private sale of equity, debt financings or funds from other capital sources, such as government funding, collaborations, strategic alliances or licensing arrangements with third parties. There can be no assurances additional capital will be available to secure additional financing, or if available, that it will be sufficient to meet our needs on favorable terms. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development of one or more of our product candidates.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that are likely or reasonably likely to have a material effect on our financial condition or results of operations, other than the operating lease for our office and laboratory space.
Item 3 |
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Not applicable to smaller reporting companies.
Item 4 |
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Evaluation of disclosure controls and procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that the information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (Exchange Act), is (1) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to management, including the Chief Executive Officer and Principal Financial and Accounting Officer, as appropriate to allow timely decisions regarding required disclosure.
Our management has carried out an evaluation, under the supervision and with the participation of our Principal Executive Officer and our Principal Financial and Accounting Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 or 15d-15 as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.
Changes in internal control over financial reporting
As a result of a material weakness surrounding the Company’s interpretation of a non-routine transaction discovered during management’s assessment of the Company’s internal controls and procedures over financial reporting as of December 31, 2021, during the three months ended March 31, 2022, management modified its internal controls procedures to include a more comprehensive review process of non-routine transactions. There were no other significant changes in our internal control over financial reporting that occurred during the three months ended March 31, 20222023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Controls
Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.
PART II -- OTHER INFORMATION
Item 1 |
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None.
Item 1A |
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For information regarding factors that could affect our results of operations, financial condition or liquidity, see the risk factors discussed under “Risk Factors” in Item 1A of our most recent Annual Report on Form 10-K. See also “Forward-Looking Statements,” included in Part I - Item 2 of this Quarterly Report on Form 10-Q. There have been noAs a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 1A concerning any material changes from the risk factors previously disclosed in our most recent Annual Report on Form 10-K.10‑K.
Item 2 |
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On March 28, 2023, we issued 108,696 shares of our restricted common stock to Acorn Management Partners, LLC pursuant to a professional relations and consulting agreement. The Company relied on an exemption from the registration requirements of the Securities Act afforded by Section 4(a) (2) thereof and Rule 506 of Regulation D.
There were no other sales of unregistered securities during the period covered by this report that have not previously been reported on Form 8-K.
Item 3 |
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None.
Item 4 |
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Not applicable.
Item 5 |
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During the period covered by this report, there was no information required to be disclosed by us in a Current Report on Form 8-K that was not so reported, nor were there any material changes to the procedures by which our security holders may recommend nominees to our board of directors.
Item 6 |
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Exhibit | |
Number | Description |
10.1 ** | |
10.2 ** | |
10.3* | |
31.1* | Certification pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934 |
31.2* | Certification pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934 |
32.1* | |
32.2* | |
101.INS | Inline XBRL Instance Document (1) |
101.SCH | Inline XBRL Taxonomy Extension Schema Document (1) |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document (1) |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document (1) |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document (1) |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document (1) |
104 | Inline XBRL for the cover page of this Quarterly Report on Form 10-Q and included in the Exhibit 101 Inline XBRL Document Set (1) |
_____________________
* | Filed herewith |
** | Indicates a management contract or compensatory plan or arrangement |
(1) | These interactive data files shall not be deemed filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under these sections. |
(2) | |
Incorporated by reference from the registrant’s Annual Report on Form 10-K filed March |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this quarterly report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.
GEOVAX LABS, INC. | ||||
(Registrant) | ||||
Date: | By: | /s/ Mark W. Reynolds | ||
Mark W. Reynolds | ||||
Chief Financial Officer | ||||
(duly authorized officer and principal | ||||
financial officer) |