Organization, Description of Business and Liquidity
|9 Months Ended|
Sep. 30, 2023
|Organization, Description of Business and Liquidity|
|Organization, Description of Business and Liquidity||
1. Organization, Description of Business and Liquidity
NeuBase Therapeutics, Inc. and its subsidiaries (the “Company” or “NeuBase”) has historically been a preclinical-stage biopharmaceutical company developing a modular peptide nucleic acid (“PNA”) antisense oligo (“PATrOL™”) platform to address genetic diseases with a single, cohesive approach. NeuBase planned to use its platform to address diseases which have a genetic source, with an initial focus on gene silencing in myotonic dystrophy type 1 (“DM1”), Huntington’s disease (“HD”), and oncology.
In October 2022, the Company announced plans to expand its focus to include the advancement of the differentiated gene editing capabilities of its platform.
In August 2023, the Company announced that its Board of Directors (the “Board”) had made the determination to halt further development of the Company’s programs and to conduct a comprehensive exploration of strategic alternatives focused on maximizing shareholder value. As part of this evaluation process, the Board will explore potential strategic alternatives for the Company that may include, but are not limited to, an acquisition, merger, business combination, or other transaction.
Liquidity and Going Concern
The Company has had no revenues from product sales and has incurred operating losses since inception. As of September 30, 2023, the Company had $12.6 million in cash and cash equivalents, and during the nine months ended September 30, 2023, incurred a loss from operations of $10.7 million and used $9.1 million of cash in operating activities.
The Company expects to continue to incur substantial operating losses and negative cash flows from operations for the foreseeable future and may never become profitable. Accordingly, there are material risks and uncertainties that raised substantial doubt about the Company’s ability to continue as a going concern. In August 2023, as further discussed below, the Board approved a plan to halt further development of the Company’s programs and to conduct a comprehensive exploration of strategic alternatives focused on maximizing shareholder value. This restructuring plan is expected to reduce operating expenses and extend the Company’s cash runway into the fourth quarter of calendar year 2025 based on current operating plans and estimates. Management believes it is probable that the restructuring plan will be effectively implemented within the next twelve months and that the restructuring plan, when implemented, will mitigate the conditions that gave rise to substantial doubt about the Company’s ability to continue as a going concern. Because the Company has sufficient resources on hand to fund operations through at least the next twelve months from the date these consolidated financial statements were available to be issued, the substantial doubt has been alleviated. There can be no assurance that the Company will be successful in acquiring additional funding, that the Company’s projections of its future working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years.
The Company’s future liquidity and capital funding requirements will depend on numerous factors, including:
The Company will likely need to raise substantial additional funds through issuance of equity or debt or completion of a licensing transaction for one or more of the Company’s pipeline assets. If the Company is unable to maintain sufficient financial resources, its business, financial condition and results of operations will be materially and adversely affected. This could affect future development and business activities and potential future clinical studies and/or other future ventures. Failure to obtain additional equity or debt financing will have a material, adverse impact on the Company’s business operations. There can be no assurance that the Company will
be able to obtain the needed financing on acceptable terms or at all. Additionally, any equity financings will likely have a dilutive effect on the holdings of the Company’s existing stockholders.
Change in Year End
On April 21, 2023, the Board approved a change in the Company’s fiscal year end from September 30 to December 31, effective for the fiscal year beginning January 1, 2023 and ending December 31, 2023. As a result of the change in year end, the Company filed on June 5, 2023 a Transition Report on Form 10-QT for the period from October 1, 2022 through December 31, 2022. The Company’s 2023 fiscal year will run from January 1, 2023 through December 31, 2023.
Reverse Stock Split
The Company effected areverse stock split of its outstanding shares of common stock on June 14, 2023. The reverse stock split did not change the number of authorized shares of common stock or par value. All references in these condensed consolidated financial statements to shares, share prices, exercise prices, and other per share information in all periods have been adjusted, on a retroactive basis, to reflect the reverse stock split.
The entire disclosure for the basis of accounting, or basis of presentation, used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS).
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef