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 |
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 | (IRS Employer Identification No.) |
of incorporation or organization) | |
1900 Lake Park Drive, Suite 380 | |
Smyrna, Georgia | 30080 |
(Address of principal executive offices) | (Zip Code) |
(678) 384-7220
(Registrant’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 NovemberAugust 9, 2022, 26,334,9532023, 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 | 1 | |
Condensed Consolidated Statements of Operations for the three-month and | 2 | |
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three-month and | 3 | |
Condensed Consolidated Statements of Cash Flows for the | ||
Notes to Condensed Consolidated Financial Statements (unaudited) | ||
Item 2 | Management's Discussion and Analysis of Financial Condition and Results of Operations | 8 |
Item 3 | Quantitative and Qualitative Disclosures about Market Risk | 13 |
Item 4 | Controls and Procedures | 13 |
PART II – OTHER INFORMATION | ||
Item 1 | Legal Proceedings | 14 |
Item 1A | Risk Factors | 14 |
Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds | 14 |
Item 3 | Defaults Upon Senior Securities | 14 |
Item 4 | Mine Safety Disclosures | 14 |
Item 5 | Other Information | 14 |
Item 6 | Exhibits | 15 |
SIGNATURES | 16 |
Part I -- FINANCIAL INFORMATION
Item 1 Financial Statements
GEOVAX LABS, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
September 30, | December 31, | June 30 | December 31, | |||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
ASSETS | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 34,676,968 | $ | 11,423,870 | $ | 17,788,911 | $ | 27,612,732 | ||||||||
Grant funds receivable | - | 49,006 | ||||||||||||||
Prepaid expenses | 1,460,207 | 156,240 | 2,038,283 | 1,325,998 | ||||||||||||
Total current assets | 36,137,175 | 11,629,116 | 19,827,194 | 28,938,730 | ||||||||||||
Property and equipment, net | 248,983 | 156,938 | 224,080 | 234,912 | ||||||||||||
Other assets | 2,184,286 | 11,010 | 1,197,788 | 2,174,286 | ||||||||||||
Total assets | $ | 38,570,444 | $ | 11,797,064 | $ | 21,249,062 | $ | 31,347,928 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable | $ | 1,079,421 | $ | 2,057,534 | $ | 871,131 | $ | 1,747,682 | ||||||||
Accrued expenses | 3,709,984 | 3,377,826 | 3,214,381 | 3,000,212 | ||||||||||||
Total current liabilities | 4,789,405 | 5,435,360 | 4,085,512 | 4,747,894 | ||||||||||||
Other liabilities | 2,000,000 | 2,000,000 | ||||||||||||||
Total liabilities | 6,789,405 | 7,435,360 | ||||||||||||||
Commitments (Note 4) | ||||||||||||||||
Stockholders’ equity: | ||||||||||||||||
Common stock, $.001 par value: | ||||||||||||||||
Authorized shares – 600,000,000 Issued and outstanding shares – 26,334,953 and 6,381,541 at September 30, 2022 and December 31, 2021, respectively | 26,335 | 6,382 | ||||||||||||||
Authorized shares – 600,000,000 | ||||||||||||||||
Issued and outstanding shares – 26,443,649 and 26,334,953 at June 30, 2023 and December 31, 2022, respectively | 26,444 | 26,335 | ||||||||||||||
Additional paid-in capital | 104,767,918 | 68,731,220 | 105,499,665 | 104,970,722 | ||||||||||||
Accumulated deficit | (73,013,214 | ) | (64,375,898 | ) | (88,362,559 | ) | (78,397,023 | ) | ||||||||
Total stockholders’ equity | 31,781,039 | 4,361,704 | 17,163,550 | 26,600,034 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 38,570,444 | $ | 11,797,064 | $ | 21,249,062 | $ | 31,347,928 |
See accompanying notes to condensed consolidated financial statements.
GEOVAX LABS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
Grant and collaboration revenue | $ | - | $ | 30,414 | $ | 81,526 | $ | 220,539 | ||||||||||||||||||||||||
Grant revenue | $ | - | $ | - | $ | - | $ | 81,526 | ||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
Research and development | 2,721,196 | 1,224,362 | 5,358,917 | 2,659,980 | 4,719,728 | 1,307,177 | 7,538,917 | 2,637,721 | ||||||||||||||||||||||||
General and administrative | 1,249,337 | 757,432 | 3,363,672 | 2,562,641 | 1,459,093 | 935,311 | 2,910,518 | 2,114,335 | ||||||||||||||||||||||||
Total operating expenses | 3,970,533 | 1,981,794 | 8,722,589 | 5,222,621 | 6,178,821 | 2,242,488 | 10,449,435 | 4,752,056 | ||||||||||||||||||||||||
Loss from operations | (3,970,533 | ) | (1,951,380 | ) | (8,641,063 | ) | (5,002,082 | ) | (6,178,821 | ) | (2,242,488 | ) | (10,449,435 | ) | (4,670,530 | ) | ||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||
Other income: | ||||||||||||||||||||||||||||||||
Interest income | 2,431 | 877 | 3,747 | 3,998 | 251,201 | 789 | 483,899 | 1,316 | ||||||||||||||||||||||||
Interest expense | - | - | - | (1,286 | ) | |||||||||||||||||||||||||||
Gain on debt extinguishment | - | - | - | 172,056 | ||||||||||||||||||||||||||||
Total other income (expense) | 2,431 | 877 | 3,747 | 174,768 | ||||||||||||||||||||||||||||
Net loss | $ | (3,968,102 | ) | $ | (1,950,503 | ) | $ | (8,637,316 | ) | $ | (4,827,314 | ) | $ | (5,927,620 | ) | $ | (2,241,699 | ) | $ | (9,965,536 | ) | $ | (4,669,214 | ) | ||||||||
Basic and diluted: | ||||||||||||||||||||||||||||||||
Net loss per common share | $ | (0.17 | ) | $ | (0.31 | ) | $ | (0.63 | ) | $ | (0.80 | ) | $ | (0.22 | ) | $ | (0.18 | ) | $ | (0.38 | ) | $ | (0.47 | ) | ||||||||
Weighted average shares outstanding | 23,461,665 | 6,349,297 | 13,818,315 | 6,005,032 | 26,443,649 | 12,721,696 | 26,391,403 | 9,931,088 |
See accompanying notes to condensed consolidated financial statements.
GEOVAX LABS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
Three-Month and Nine-Month Periods Ended September 30, 2022 | ||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Additional | Accumulated | Stockholders’ | ||||||||||||||||||||||||
Shares | Amount | 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 | ||||||||||||||||||||
Sale of common stock and warrants for cash | - | - | 1,050,000 | 1,050 | 18,496,896 | - | 18,497,946 | |||||||||||||||||||||
Issuance of common stock upon warrant exercises | - | - | 5,671,214 | 5,671 | (5,104 | ) | - | 567 | ||||||||||||||||||||
Issuance of common stock for services | - | - | 68,500 | 69 | 71,931 | - | 72,000 | |||||||||||||||||||||
Stock option expense | - | - | - | - | 190,191 | - | 190,191 | |||||||||||||||||||||
Net loss for the three months ended June 30, 2022 | - | - | - | - | - | (2,241,699 | ) | (2,241,699 | ) | |||||||||||||||||||
Balance at June 30, 2022 | - | - | 16,238,739 | 16,239 | 96,901,530 | (69,045,112 | ) | 27,872,657 | ||||||||||||||||||||
Issuance of common stock upon warrant exercises | - | - | 10,021,214 | 10,021 | 7,615,522 | - | 7,625,543 | |||||||||||||||||||||
Issuance of common stock for services | - | - | 75,000 | 75 | 60,675 | - | 60,750 | |||||||||||||||||||||
Stock option expense | - | - | - | - | 190,191 | - | 190,191 | |||||||||||||||||||||
Net loss for the three months ended September 30, 2022 | - | - | - | - | - | (3,968,102 | ) | (3,968,102 | ) | |||||||||||||||||||
Balance at September 30, 2022 | - | $ | - | 26,334,953 | $ | 26,335 | $ | 104,767,918 | $ | (73,013,214 | ) | $ | 31,781,039 |
Three-Month and Six-Month Periods Ended June 30, 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 | |||||||||||||
Stock option expense | - | - | 226,013 | - | 226,013 | |||||||||||||||
Net loss for the three months ended June 30, 2023 | - | - | - | (5,927,620 | ) | (5,927,620 | ) | |||||||||||||
Balance at June 30, 2023 | 26,443,649 | $ | 26,444 | $ | 105,499,665 | $ | (88,362,559 | ) | $ | 17,163,550 |
GEOVAX LABS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
Three-Month and Nine-Month Periods Ended September 30, 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 | - | - | 1,644,000 | 1,644 | 9,407,276 | - | 9,408,920 | |||||||||||||||||||||
Issuance of common stock upon warrant exercise | - | - | 835,900 | 836 | 3,173,320 | - | 3,174,156 | |||||||||||||||||||||
Issuance of common stock for services | - | - | 1,472 | 1 | 5,999 | - | 6,000 | |||||||||||||||||||||
Stock option expense | - | - | - | - | 56,190 | - | 56,190 | |||||||||||||||||||||
Net loss for the three months ended March 31, 2021 | - | - | - | - | - | (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 | ||||||||||||||||||||
Repurchase of preferred stock | (100 | ) | (76,095 | ) | - | - | 75,095 | - | (1,000 | ) | ||||||||||||||||||
Issuance of common stock for services | - | - | 12,235 | 13 | 65,828 | - | 65,841 | |||||||||||||||||||||
Stock option expense | - | - | - | - | 56,190 | - | 56,190 | |||||||||||||||||||||
Net loss for the three months ended June 30, 2021 | - | - | - | - | - | (1,314,033 | ) | (1,314,033 | ) | |||||||||||||||||||
Balance at June 30, 2021 | - | - | 6,327,702 | 6,328 | 68,134,402 | (48,682,392 | ) | 19,458,338 | ||||||||||||||||||||
Issuance of common stock upon warrant exercise | - | - | 53,839 | 54 | 229,946 | - | 230,000 | |||||||||||||||||||||
Stock option expense | - | - | - | - | 56,190 | - | 56,190 | |||||||||||||||||||||
Issuance of warrant for technology license | - | - | - | - | 209,825 | - | 209,825 | |||||||||||||||||||||
Net loss for the three months ended September 30, 2021 | - | - | - | - | - | (1,950,503 | ) | (1,950,503 | ) | |||||||||||||||||||
Balance at September 30, 2021 | - | $ | - | 6,381,541 | $ | 6,382 | $ | 68,630,363 | $ | (50,632,895 | ) | $ | 18,003,850 |
Three-Month and Six-Month Periods Ended June 30, 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 | ||||||||||||||
Sale of common stock and warrants for cash | 1,050,000 | 1,050 | 18,496,896 | - | 18,497,946 | |||||||||||||||
Issuance of common stock upon warrant exercise | 5,671,214 | 5,671 | (5,104 | ) | - | 567 | ||||||||||||||
Issuance of common stock for services | 68,500 | 69 | 71,931 | - | 72,000 | |||||||||||||||
Stock option expense | - | - | 190,191 | - | 190,191 | |||||||||||||||
Net loss for the three months ended June 30, 2022 | - | - | - | (2,241,699 | ) | (2,241,699 | ) | |||||||||||||
Balance at June 30, 2022 | 16,238,739 | $ | 16,239 | $ | 96,901,530 | $ | (69,045,112 | ) | $ | 27,872,657 |
See accompanying notes to condensed consolidated financial statements.
GEOVAX LABS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
Nine Months Ended September 30, | Six Months Ended June 30, | |||||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net loss | $ | (8,637,316 | ) | $ | (4,827,314 | ) | $ | (9,965,536 | ) | $ | (4,669,214 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||
Depreciation and amortization | 42,213 | 26,806 | ||||||||||||||
Stock-based compensation expense for employees and directors | 570,573 | 168,570 | ||||||||||||||
Stock-based compensation expense for consultants | 80,322 | 80,733 | ||||||||||||||
Warrant issued for technology license | - | 209,825 | ||||||||||||||
Gain on debt extinguishment | - | (172,056 | ) | |||||||||||||
Depreciation expense | 34,637 | 24,538 | ||||||||||||||
Stock-based compensation expense | 515,552 | 412,329 | ||||||||||||||
Changes in assets and liabilities: | ||||||||||||||||
Grant funds and other receivables | 49,006 | 182,663 | ||||||||||||||
Grant funds receivable | - | 49,006 | ||||||||||||||
Prepaid expenses and other current assets | (1,251,539 | ) | 106,979 | (698,785 | ) | (939,487 | ) | |||||||||
Deposits and other assets | (2,173,276 | ) | - | |||||||||||||
Other assets | 976,498 | (976,498 | ) | |||||||||||||
Accounts payable and accrued expenses | (645,955 | ) | (289,477 | ) | (662,382 | ) | (2,067,492 | ) | ||||||||
Total adjustments | (3,328,656 | ) | 314,043 | 165,520 | (3,497,604 | ) | ||||||||||
Net cash used in operating activities | (11,965,972 | ) | (4,513,271 | ) | (9,800,016 | ) | (8,166,818 | ) | ||||||||
Cash flows from investing activities | ||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchase of equipment | (134,258 | ) | (47,718 | ) | (23,805 | ) | (82,383 | ) | ||||||||
Net cash used in investing activities | (134,258 | ) | (47,718 | ) | (23,805 | ) | (82,383 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Net proceeds from sale of common stock and warrants | 27,727,194 | 9,408,920 | - | 27,727,194 | ||||||||||||
Net proceeds from warrant exercises | 7,626,134 | 3,404,156 | ||||||||||||||
Repurchase of preferred stock | - | (1,000 | ) | |||||||||||||
Principal repayment of note payable | - | (27,864 | ) | |||||||||||||
Net proceeds from warrant exercise | - | 591 | ||||||||||||||
Net cash provided by financing activities | 35,353,328 | 12,784,212 | - | 27,727,785 | ||||||||||||
Net increase in cash and cash equivalents | 23,253,098 | 8,223,223 | ||||||||||||||
Net increase (decrease) in cash and cash equivalents | (9,823,821 | ) | 19,478,584 | |||||||||||||
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 | $ | 34,676,968 | $ | 18,107,019 | $ | 17,788,911 | $ | 30,902,454 |
Supplemental disclosure of non-cash financing activities:
During the nine months ended September 30, 2021, we issued 149,705 shares of common stock upon the cashless exercise of stock purchase warrants, and $172,056 of principal and accrued interest relatedSee accompanying notes to a note payable was extinguished upon the loan’s forgiveness.condensed consolidated financial statements.
GEOVAX LABS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SeptemberJune 30, 20222023
(unaudited)
1. |
|
GeoVax Labs, Inc., headquartered in the 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 for vaccines against COVID-19a 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 Mpox (monkeypox), hemorrhagic fever viruses (Ebola Zaire, Ebola Sudan, Marburg, and Lassa Fever) Zika virus, and malaria, as well as immunotherapies for solid tumors.
2. | Summary of Significant Accounting Policies |
We disclosed in Note 2 to our consolidated financial statements included in our Annual Report on Form 10-K10-K for the year ended December 31, 2021 2022 those accounting policies that we consider significant in determining our results of operations and financial position. During the ninesix months ended SeptemberJune 30, 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.10-K.
Basis of Presentation–
The accompanying condensed consolidated financial statements include the accounts of GeoVax Labs, Inc. and GeoVax, 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 interim 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 first quarter of 2024. 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. AsThe financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the date these financial statements are issued, the Company expects its existing cash and cash equivalents to be sufficient to fund its operations for at least the next twelve months. Since inception, the Company’s activities have consisted primarily of performing research and development to advance its technologies. The Company expects to continue to generate operating losses in the foreseeable future and will require additional funding to continue its research and development activities. The Company may seek funds through further equity financings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements.uncertainties described above.
Recent Accounting Pronouncements –
During the ninesix months ended SeptemberJune 30, 2022, 2023, there have been no new accounting pronouncements or changes in accounting pronouncements which we expect to have a material impact on our financial statements.
3.Balance Sheet Components
3. | Balance Sheet Components |
Prepaid Expenses – Prepaid expenses consist of the following:
September 30, 2022 | December 31, 2021 | June 30, 2023 | December 31, 2022 | |||||||||||||
Prepaid clinical trial costs (current portion) | $ | 1,231,337 | $ | - | $ | 1,941,588 | $ | 1,171,077 | ||||||||
Prepaid insurance premiums | 143,450 | 123,248 | 36,150 | 107,876 | ||||||||||||
Prepaid rent | 13,045 | 13,045 | 13,045 | 13,045 | ||||||||||||
Other prepaid expenses | 72,375 | 19,947 | 47,500 | 34,000 | ||||||||||||
Total prepaid expenses | $ | 1,460,207 | $ | 156,240 | $ | 2,038,283 | $ | 1,325,998 |
Property and Equipment – Property and equipment consist of the following:
September 30, 2022 | December 31, 2021 | June 30, 2023 | December 31, 2022 | |||||||||||||
Equipment and furnishings | $ | 725,812 | $ | 591,554 | $ | 749,617 | $ | 725,812 | ||||||||
Leasehold improvements | 115,605 | 115,605 | 115,605 | 115,605 | ||||||||||||
Total property and equipment | 841,417 | 707,159 | 865,222 | 841,417 | ||||||||||||
Accumulated depreciation and amortization | (592,434 | ) | (550,221 | ) | (641,142 | ) | (606,505 | ) | ||||||||
Total property and equipment, net | $ | 248,983 | $ | 156,938 | $ | 224,080 | $ | 234,912 |
Other Assets – Other assets consist of the following:
September 30, 2022 | December 31, 2021 | June 30, 2023 | December 31, 2022 | |||||||||||||
Prepaid clinical trial costs (noncurrent portion) | $ | 2,083,276 | $ | - | $ | 1,106,778 | $ | 2,083,276 | ||||||||
Prepaid technology license fees | 90,000 | - | 80,000 | 80,000 | ||||||||||||
Deposits | 11,010 | 11,010 | 11,010 | 11,010 | ||||||||||||
Total other assets | $ | 2,184,286 | $ | 11,010 | $ | 1,197,788 | $ | 2,174,286 |
Accrued Expenses – Accrued expenses consist of the following:
September 30, 2022 | December 31, 2021 | |||||||
Accrued technology license fees – current portion | $ | 3,000,000 | $ | 3,000,000 | ||||
Accrued compensation | - | 269,000 | ||||||
Other accrued expenses | 709,984 | 108,826 | ||||||
Total accrued expenses | $ | 3,709,984 | $ | 3,377,826 |
Other Liabilities – Other liabilities were $2,000,000 at September 30, 2022 and December 31, 2021 and consist of the noncurrent portion of accrued technology license fees.
June 30, 2023 | December 31, 2022 | |||||||
Accrued technology license fees | $ | 2,000,000 | $ | 2,000,000 | ||||
Payroll-related liabilities | 123,922 | 550,810 | ||||||
Other accrued expenses | 1,090,459 | 449,402 | ||||||
Total accrued expenses | $ | 3,214,381 | $ | 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, 2022, but which we expect to extend.2025. Rent expense for the three-monththree-month and nine-monthsix-month periods ended SeptemberJune 30, 2022 2023 was $44,089$45,414 and $132,267,$90,828, respectively, as compared to $42,803$44,089 and $128,410,$88,178, respectively, for the same periods of 2021.2022. Future minimum lease payments total $44,089$90,828 in 2022.2023, $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. Unrecorded future minimum paymentsDue to the uncertainty of the achievement and timing of the contingent events requiring payment under these agreements, (excluding milestone and royalty payments due upon contingent future events) are approximately $409,000the amounts to be paid by us in the aggregate.
Clinical Trial Commitments – We have entered into agreements with contract research organizations (“CROs”) and with testing sites to conduct clinical trials of our products under development. Contracts with CROsfuture are generally cancellable with notice. We have also entered into arrangements with contract manufacturing organizations (“CMOs”) to produce materials for use in our clinical trials. These contracts generally provide for non-cancellable obligations or cancellation penalties depending on the time of cancellation. As of September 30, 2022, the total non-cancellable obligations under contracts with CMOs were approximately $1.2 million.not determinable.
Other Commitments–
In the normal course of business, we enter into various firmcontracts and purchase commitments and other contractual obligations related toincluding those with contract research organizations (“CROs”) for clinical trial services, contract manufacturing organizations (“CMOs”) for production and testing of materials for use in our product candidates, conduct of clinical trials, and other independent contractors or academic institutions for preclinical research studies,activities and other activities. Asservices and products. Most contracts are generally cancellable, with notice, at the Company’s option. Payments due upon cancellation may consist of September 30, 2022, there are approximately $612,000payments for services provided or expenses incurred to date, or cancellation penalties depending on the time of unrecorded noncancelable purchase commitments to our vendors and subcontractors.
5.Stockholders’ Equity
January 2022 Private Placement –On January 19, 2022, we closed a private placement of 707,484 shares of common stock, a pre-funded warrant to purchase 2,360,000 shares of common stock for a nominal exercise price per share (the “Jan 2022 Pre-Funded Warrant”), and a warrant to purchase up to 3,067,484 shares of common stock at an exercise price of $3.26 per share (the “Jan 2022 Common Warrant”). Net proceeds after deducting placement agent commissions and other offering expenses were approximately $9.2 million. During March 2022, the Jan 2022 Pre-Funded Warrant was exercised in full. The Jan 2022 Common Warrant is currently exercisable and will expire on February 10, 2027.cancellation.
May 2022 Private Placement – On May 27, 2022, we closed a private placement of 1,050,000 shares of common stock, pre-funded warrants to purchase an aggregate of 11,071,214 shares of common stock for a nominal exercise price per share (the “May 2022 Pre-Funded Warrants”), and preferred investment options to purchase up to an aggregate of 12,121,214 shares of common stock at an exercise price of $1.65 per share (the “May 2022 Preferred Investment Options”). Net proceeds after deducting placement agent commissions and other offering expenses were approximately $18.5 million.
The May 2022 Pre-Funded Warrants were exercised as to 1,980,304 shares concurrent with the closing and during June and July the remaining 9,090,910 were fully exercised. During August, the May 2022 Preferred Investment Options were exercised as to 4,621,214 shares, resulting in net proceeds to us of approximately $7,626,000.
5. | Stockholders’ Equity |
Other Common Stock Transactions –
During May and July, March 2023, we issued 68,500 and 75,000108,696 shares respectively, of our common stock pursuant to a professional relations and consulting agreements.agreement.
Stock Options –
We have a stock-based incentive plan (the “2020“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 1,500,0002,075,500 shares of our common stock are reserved for future issuance pursuant to the 2020 Plan. During the ninesix months ended SeptemberJune 30, 2022, 2023, 36,667 stock options were cancelled and there were no new grants of stock optionoptions or other transactions related to the 2020 Plan. As of SeptemberJune 30, 2022, 2023, there are 962,3002,022,133 stock options outstanding, with a weighted-average exercise price of $3.18$1.90 per share and a weighted-average remaining contractual term of 8.7 years.
Stock Purchase Warrants
We have issued stock purchase warrants in connection with past financing and licensing transactions. During the six months ended June 30, 2023, there were no transactions related to our stock purchase warrants. As of June 30, 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 8.64.0 years.
Stock Purchase Warrants – The table below presents summary information about our warrants outstanding as of September 30, 2022.
Warrant Description | Number of Shares | Exercise Price | Expiration | ||||||
2020 Warrants | 120,000 | $ | 1.65 | Jun 2025 | |||||
2020 Unit Warrants | 2,396,631 | 5.00 | Sep 2025 | ||||||
2020 Representative Warrants | 128,000 | 5.50 | Mar 2024 | ||||||
2021 Representative Warrants | 72,000 | 6.875 | Aug 2024 | ||||||
2021 Warrants | 100,000 | 13.00 | Sep 2026 | ||||||
Jan 2022 Common Warrants | 3,067,484 | 3.26 | Feb 2027 | ||||||
May 2022 Preferred Investment Options | 7,500,000 | 1.65 | May 2028 | ||||||
Total Warrants Outstanding at September 30, 2022 | 13,384,115 |
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 $226,013 and $454,052 during the three-month and six-month periods ended June 30, 2023, respectively, as compared to $190,191 and $380,382, respectively, during the same periods of 2022. As of September June 30,2022, 2023, there is $849,571$962,090 of unrecognized compensation expense that we expect to recognize over a weighted-average period of 1.71.6 years.
We have also have 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 and six-month periods ended June 30, 2023 we recorded stock-based compensation expense of $43,500 and $61,500, respectively, associated with common stock issued for consulting services, as compared to $16,987 and $31,947, respectively, for the same periods of 2022. As of SeptemberJune 30, 2022, 2023, there is $72,375$37,500 recorded as a prepaid expense for these arrangements, which will be recognized as expense over the termsterm of the related agreements.
The following table summarizes our total stock-based compensation expense for employees, directors and consultants:
Three Months Ended Sep. 30, | Nine Months Ended Sep. 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Stock options: | ||||||||||||||||
Research and development | $ | 54,293 | $ | 21,468 | $ | 162,878 | $ | 64,404 | ||||||||
General and administrative | 135,898 | 34,722 | 407,695 | 104,166 | ||||||||||||
Total stock option expense | 190,191 | 56,190 | 570,573 | 168,570 | ||||||||||||
Stock awards (consultants): | ||||||||||||||||
General and administrative | 48,375 | 29,560 | 80,322 | 80,733 | ||||||||||||
Total stock-based compensation expense | $ | 238,566 | $ | 85,750 | $ | 650,895 | $ | 249,303 |
During September 2021, we recorded $209,825 of expense associated with the issuance of a stock purchase warrant in connection with our entering into a technology licensing agreement; such amount was recorded as research and development expense.agreement.
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 additional 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 dilute basic earnings per share in the future and that have been excluded from the computation of diluted net loss per share totaled 14,346,41515,406,248 and 3,418,63118,967,629 shares at SeptemberJune 30, 2022 2023 and 2021,2022, respectively.
8. | Income Taxes |
No provision for income taxes was recorded in either of the nine-monthsix-month periods ended SeptemberJune 30, 2022 2023 and 2021.2022. The Company remains in a cumulative loss position with a full valuation allowance recorded against its net deferred income tax assets as of SeptemberJune 30, 2022.2023.
Item 2 |
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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 |
● | GEO-CM04S1 is also undergoing the Phase 2 portion of a Phase 1/2 trial |
● | During July 2023, a new investigator-initiated Phase 2 clinical trial (ClinicalTrials.gov Identifier: NCT05672355) of GEO-CM04S1 began, evaluating its use as a COVID-19 booster vaccine in patients with chronic lymphocytic leukemia (CLL). |
● | Gedeptin® is currently undergoing a Phase 1/2 clinical trial |
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● | Our additional research programs for vaccines |
Our corporate strategy is to advance, protect and exploit our differentiated vaccine/immunotherapy technologies leading to the successful development of preventive and therapeutic vaccines and immunotherapies against infectious diseases and various cancers. Our goal is to advance products through to human clinical testing, and 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
RevenuesRevenue
We have not generated any revenuesrevenue from product sales to 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. 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.
Research and development expenses
Since our inception, we have focused and we continue to focus significant resources on our research and development activities, including developing our vector platform and 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 |
● | expenses incurred |
● | expenses incurred |
● | expenses incurred in procuring materials and for analytical |
● |
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● | 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 our external research and development costs on a program-by-program basis. We do not track our internal research and development expenses on a program-by-program basis as they primarily relate to shared costs deployed across multiple projects under development.
Our research and development expenses can fluctuate considerably on a period-to-period basis. We expect our research and development expensesexpenditures to increase substantially induring the futureremainder of 2023 and beyond as we advance our existing and future product candidates into and through clinical trials and pursue regulatory approval. The processapproval, especially with regard to the ongoing Gedeptin and GEO-CM04S1 clinical programs. We do not provide forward-looking estimates of conducting the necessary clinical studies to obtain regulatory approval is costlycosts and time-consuming. Clinical trials generally become larger and more costly to conduct as they advance into later stages.
At this time we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development of any product candidates that we develop from our programs. We are also unable to predict when, if ever, material net cash inflows will commence from sales of product candidates we develop, if at all. This isresearch programs due to the numerous risks andmany uncertainties associated with developingbiotechnology 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 expenses
Our general and administrative expenses consist primarily of personnel costs in our executive, finance and investor relations, business development and administrative functions, including stock-based compensation.functions. 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 future as we expand our operatingsupport expanded research and development activities, and prepare for potential commercialization of our current and future product candidates, increase our headcount and investor relations activities and maintain compliance with requirements of Nasdaq and the Securities and Exchange Commission.other general corporate activities.
Critical Accounting Policies and Estimates
This discussion and analysis of our financial condition and results of operations is based on our condensed 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 2 to the condensed consolidated financial statements, included in this Quarterly Report.
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.
Recent Developments
On December 9, 2022, the Company received a deficiency letter from the Listing Qualifications Department of the Nasdaq Stock Market (“Nasdaq”) notifying the Company that, for the preceding 30 consecutive business days, the closing bid price for the Company’s common stock was below the minimum $1.00 per share requirement for continued inclusion on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Requirement”). In accordance with Nasdaq rules, the Company was provided an initial period of 180 calendar days, or until June 7, 2023, to regain compliance with the Bid Price Requirement.
The Company requested a 180-day extension to regain compliance with the Bid Price Requirement and, on June 8, 2023, the Company received written notification from Nasdaq granting the Company’s request. The Company now has until December 4, 2023 to meet the Bid Price Requirement (the “Compliance Date”).
The grant of the extension by Nasdaq has no effect on the listing of the Company’s shares, which will continue to be listed on the Nasdaq Capital Market under the symbol “GOVX.” If at any time prior to the Compliance Date, the bid price of the Company's common stock closes at, or above, $1.00 per share for a minimum of ten (10) consecutive business days Nasdaq will provide the Company with written confirmation of compliance and the matter will be closed.
If the Company does not meet the Bid Price Requirement prior to the Compliance Date, Nasdaq will notify the Company that the Company’s common stock will be subject to delisting. At that time, the Company may appeal the delisting determination to the Nasdaq Hearings Panel. There can be no assurance that if the Company does appeal a delisting determination, that such appeal will be successful.
Results of Operations
The following tables summarizetable summarizes our results of operations for the three-month and nine-monthsix-month periods ended SeptemberJune 30, 20222023 and 2021:2022:
Three Months Ended September 30, | Three Months Ended June 30, | |||||||||||||||||||||||
2022 | 2021 | Change | 2023 | 2022 | Change | |||||||||||||||||||
Grant revenue | $ | - | $ | 30,414 | $ | (30,414 | ) | $ | - | $ | - | $ | - | |||||||||||
Operating expenses: | ||||||||||||||||||||||||
Research and development | 2,721,196 | 1,224,362 | 1,496,834 | 4,719,728 | 1,307,177 | 3,412,551 | ||||||||||||||||||
General and administrative | 1,249,337 | 757,432 | 491,905 | 1,459,093 | 935,311 | 523,782 | ||||||||||||||||||
Total operating expenses | 3,970,533 | 1,981,794 | 1,988,739 | 6,178,821 | 2,242,488 | 3,936,333 | ||||||||||||||||||
Loss from operations | (3,970,533 | ) | (1,951,380 | ) | (2,019,153 | ) | (6,178,821 | ) | (2,242,488 | ) | (3,936,333 | ) | ||||||||||||
Total other income (expense), net | 2,431 | 877 | 1,554 | |||||||||||||||||||||
Interest income | 251,201 | 789 | 250,412 | |||||||||||||||||||||
Net loss | $ | (3,968,102 | ) | $ | (1,950,503 | ) | $ | (2,017,599 | ) | $ | (5,927,620 | ) | $ | (2,241,699 | ) | $ | (3,685,921 | ) |
Nine Months Ended September 30, | Six Months Ended June 30, | |||||||||||||||||||||||
2022 | 2021 | Change | 2023 | 2022 | Change | |||||||||||||||||||
Grant revenue | $ | 81,526 | $ | 220,539 | $ | (139,013 | ) | $ | - | $ | 81,526 | $ | (81,526 | ) | ||||||||||
Operating expenses: | ||||||||||||||||||||||||
Research and development | 5,358,917 | 2,659,980 | 2,698,937 | 7,538,917 | 2,637,721 | 4,901,196 | ||||||||||||||||||
General and administrative | 3,363,672 | 2,562,641 | 801,031 | 2,910,518 | 2,114,335 | 796,183 | ||||||||||||||||||
Total operating expenses | 8,722,589 | 5,222,621 | 3,499,968 | 10,449,435 | 4,752,056 | 5,697,379 | ||||||||||||||||||
Loss from operations | (8,641,063 | ) | (5,002,082 | ) | (3,638,981 | ) | (10,449,435 | ) | (4,670,530 | ) | (5,778,905 | ) | ||||||||||||
Total other income (expense), net | 3,747 | 174,768 | (171,021 | ) | ||||||||||||||||||||
Interest income | 483,899 | 1,316 | 482,583 | |||||||||||||||||||||
Net loss | $ | (8,637,316 | ) | $ | (4,827,314 | ) | $ | (3,810,002 | ) | $ | (9,965,536 | ) | $ | (4,669,214 | ) | $ | (5,296,322 | ) |
Grant RevenuesRevenue
The following table summarizes ourThere were no grant revenues forduring either of the three-month and nine-month periods ended SeptemberJune 30, 20222023 and 2021:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Lassa Fever – U.S. Army Grant | $ | - | $ | - | $ | 81,526 | $ | - | ||||||||
COVID-19 – NIH SBIR Grant | - | 30,414 | - | 220,539 | ||||||||||||
Total | $ | - | $ | 30,414 | $ | 81,526 | $ | 220,539 |
Total grant revenues2022. Grant revenue decreased by $81,526 (100%) for the three-monthsix-month period ended SeptemberJune 30, 2023 compared to the six-month period ended June 30, 2022, and by $139,013 (63%)reflective of the wind-down of the Company’s grant from the U.S. Department of Defense for the nine-month period ended September 30, 2022, versus the comparable 2021 periods, 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.our Lassa Fever vaccine program. As of SeptemberJune 30, 2022,2023, all approved grant funds approved for direct use by GeoVax have been utilized.
Research and Development Expenses
For the three-month and nine-monthsix-month periods ended Septemberending June 30, 2022,2023, research and development expenses increased by $1,496,834 (122%$3,412,551 (261%) and $2,698,937 (101%$4,901,196 (186%), respectively, versus the comparable 20212022 periods. The overall increase during the 20222023 periods relates primarily to higher personnel costs, (including the use of external consultants), costs of conducting clinical trials for GEO-CM04S1 and Gedeptin, costs of manufacturing materials for use in our clinical trials, technology license fees, costs of preclinical research activities and a generally higher level of activity.travel costs. Research and development expense for the three-month and nine-monthsix-month periods of 20222023 included stock-based compensation expense of $54,293$76,770 and $162,878,$154,643, respectively; as compared to $21,468$54,293 and $64,404,$108,585, respectively, for the comparable 20212022 periods.
General and Administrative Expenses
For the three-month and nine-monthsix-month periods ended Septemberending June 30, 2022,2023, general and administrative expenses increased by $491,905 (65%$523,782 (56%) and $801,031 (31%$796,183 (38%), respectively, versus the comparable 20212022 periods. The overall increase during the 20222023 periods relates primarily to higher personnel costs, (including the use of external consultants), patent costs, investor relations consulting costs, patent costs and travel expenses. General and administrative expense for the three-month and nine-monthsix-month periods of 20222023 included stock-based compensation expense of $184,273$192,743 and $488,017,$360,909, respectively; as compared to $64,282$152,885 and $184,899,$303,744, respectively, for the comparable periods of 2021.2022.
Other Income (Expense)
Interest income for the three-month and nine-monthsix-month periods ended SeptemberJune 30, 20222023 was $2,431$251,201 and $877,$483,899, respectively, as compared to $3,747$789 and $3,998,$1,316, respectively, for comparable periods of 2021.2022. The variances between periods are primarily attributable to cash available for investment and higher interest rate fluctuations.rates.
No interest expense was recorded during the three-month and nine-month periods ended September 30, 2022. Interest expense for the three-month and nine-month periods ended September 30, 2021 was $-0- and $1,286, respectively.
During the nine-month period ended September 30, 2021, we recorded a $172,056 one-time gain on debt extinguishment associated with the forgiveness of the principal and accrued interest related to our Paycheck Protection Program (PPP) loan.
Liquidity and Capital Resources and Cash Flows
The following tables summarize our liquidity and capital resources as of SeptemberJune 30, 20222023 and December 31, 2021,2022, and our cash flows for the nine-monthsix-month periods ended SeptemberJune 30, 20222023 and 2021:2022:
Liquidity and Capital Resources | September 30, 2022 | December 31, 2021 | June 30, 2023 | December 31, 2022 | ||||||||||||
Cash and cash equivalents | $ | 34,676,968 | $ | 11,423,870 | $ | 17,788,911 | $ | 27,612,732 | ||||||||
Working capital | 31,347,770 | 6,193,756 | 15,741,682 | 24,190,836 |
Nine Months Ended September 30, | Six Months Ended June 30, | |||||||||||||||
Cash Flow Data | 2022 | 2021 | 2023 | 2022 | ||||||||||||
Net cash provided by (used in): | ||||||||||||||||
Operating activities | $ | (11,965,972 | ) | $ | (4,513,271 | ) | $ | (9,800,016 | ) | $ | (8,166,818 | ) | ||||
Investing activities | (134,258 | ) | (47,718 | ) | (23,805 | ) | (82,383 | ) | ||||||||
Financing activities | 35,353,328 | 12,784,212 | - | 27,727,785 | ||||||||||||
Net increase in cash and cash equivalents | $ | 23,253,098 | $ | 8,223,223 | ||||||||||||
Net increase (decrease) in cash and cash equivalents | $ | (9,823,821 | ) | $ | 19,478,584 |
Operating Activities – Net cash used in operating activities of $11,965,972$9,800,016 for the ninesix months ended SeptemberJune 30, 2022,2023, was primarily due to our net loss of $8,637,316, as adjusted$9,965,536, 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 $4,513,271$8,166,818 for the ninesix months ended SeptemberJune 30, 2021,2022, was primarily due to our net loss of $4,827,314,$4,669,214, also adjustedoffset 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 $134,258$23,805 and $47,718$82,383 for the nine-monthsix-month periods ended SeptemberJune 30, 20222023 and 2021,2022, respectively, and relates primarily to purchases of laboratory equipment.equipment
Financing Activities – Net cash provided by financing activities was $35,353,328$-0- and $27,727,785 for the nine-monthsix-month periods ended June 30, 2023 and 2022, respectively. Net cash provided by financing activities for the 2022 period ended September 30, 2022, consisting of (i)relates primarily to net proceeds of $27,727,194 from salesofferings of our common stock and warrants and (ii) net proceeds of $7,626,134 from the exercise of warrants, as described in Note 5 to the condensed consolidated financial statements included in this Quarterly Report. Net cash provided by financing activities was $12,784,212 for the nine-month period ended September 30, 2021, consisting of (i) net proceeds of $9,408,920 from a public offering of our common stock, (ii) $3,404,156 of net proceeds from the exercise of warrants, and (iii) $28,864 in principal repayments of a note payable and repurchase of preferred stock.
Funding Requirements and Sources of Capital
To date, we have not generated any product revenue. We have no products approved for commercial sale. Wedo not know when, or if, we will generate any product revenue and we do not expect to generate any meaningfulsignificant product revenue unless and until we obtain regulatory approval of and commercialize one of our current or future product candidates. We do not know when, or if, thisanticipate that we will occur. As of September 30, 2022, we have an accumulated deficit of approximately $73 millioncontinue to generate losses for the foreseeable future, and we expect the losses to incur operating lossesincrease as we continue the development of, and generate negative cash flows from operationsseek regulatory approvals for, our product candidates, and begin to commercialize any approved products. We are subject to all of the foreseeable future.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 will need substantial additional funding in connection with our continuing operations. We have funded our operations to date primarily from sales of our equity securities and from government grants and clinical trial assistance.
Our primary uses 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. We expect these costs will continue to be the primary operating capital requirements for the near future.
Our future expenditures are likely to be highly volatile in future periods depending on the outcomes of our clinical trials and preclinical studies. We expect our research and development costs to increase as we continue development of our various programs and as we move toward later stages of development, especially with regard to the ongoing clinical trials for Gedeptin and GEO-CM04S1. We expect our general and administrative expenses to increase commensurately in support of expanded research and development efforts.
As of the date of this Quarterly Report, we expect our existing cash and cash equivalents will be sufficient to fund our operations over at leastinto the next twelve months.first quarter of 2024. 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, (iv) arrangements with contract research organizations (“CROs”), contract manufacturing organizations (“CMOs”), and other third-party vendors for clinical trials services and production of materials for use in our clinical trials, and (v) other various firm purchase commitments and contractual obligations related to production and testing of our product candidates and the general operation of our business.
Our 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 prove to be incorrect, and we may use our available capital resources sooner than we expect. Our future capital requirements will depend on many factors, which include but are not limited to:
● | the timing and costs of our ongoing and planned clinical trials; |
● | 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.
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
There were no significant changes in our internal control over financial reporting that occurred during the three months ended SeptemberJune 30, 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. As 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
| Unregistered Sales of Equity Securities and Use of Proceeds |
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, none of our directors or executive officers adopted or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as each term is defined in Item 408(a) of Regulation S-K).
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 |
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) | Incorporated by reference from the registrant’s Quarterly Report on Form 10-Q filed May 4, 2023. |
(2) | |
Incorporated by reference from the registrant’s Current Report on Form 8-K filed | |
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) | |||
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Date: | By: |
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| Mark W. Reynolds |
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| Chief Financial Officer (duly authorized officer and principal |
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