UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the Quarterly Period Ended
OR
For the Transition Period from to
Commission File Number:
(Exact Name of Registrant as Specified in Its Charter)
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(Address of principal executive offices) |
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Trading Symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ |
Accelerated filer ☐ |
Smaller reporting company |
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of August 10, 2023, the registrant had
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TABLE OF CONTENTS
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Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3 – Qualitative and Quantitative Disclosures about Market Risk |
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2
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Report contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities law, which we collectively refer to as “forward-looking statements”. Such forward-looking statements reflect our current beliefs and are based on information currently available to us. In some cases, forward-looking statements can be identified by terminology such as “may,” “would,” “could,, “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “hope,” “foresee” or the negative of these terms or other similar expressions concerning matters that are not historical facts.
Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements, including, among others:
3
More detailed information about risk factors and their underlying assumptions are included in our Annual Report on Form 10-K for the year ended December 31, 2022, under Item 1A – Risk Factors. Except as required under applicable securities legislation, we undertake no obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise.
4
PART I—FINANCIAL INFORMATION
ITEM 1 – FINANCIAL STATEMENTS
Condensed Consolidated Interim Financial Statements
(Unaudited)
APTOSE BIOSCIENCES INC.
For the three months and six months ended June 30, 2023 and 2022
5
APTOSE BIOSCIENCES INC.
Condensed Consolidated Interim Statements of Financial Position
(Expressed in thousands of US dollars)
(unaudited)
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June 30, |
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December 31, |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Investments |
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Prepaid expenses |
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Other current assets |
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Total current assets |
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Non-current assets: |
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Property and equipment |
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Right-of-use assets, operating leases |
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Total non-current assets |
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Total assets |
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$ |
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$ |
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Liabilities and Shareholders’ Equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued liabilities |
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Current portion of lease liability, operating leases |
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Total current liabilities |
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Non-current liabilities: |
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Lease liability, operating leases |
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Total liabilities |
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Shareholders’ equity: |
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Share capital: |
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Common shares, |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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( |
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Deficit |
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Total shareholders’ equity |
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Total liabilities and shareholders’ equity |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated interim financial statements (unaudited).
Going concern, see Note 2.
Commitments, see Note 9.
Subsequent events, see Note 12.
6
APTOSE BIOSCIENCES INC.
Condensed Consolidated Interim Statements of Loss and Comprehensive Loss
(Expressed in thousands of US dollars, except for per common share data)
(unaudited)
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Three months ended |
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Six months ended |
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2023 |
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2022 |
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2023 |
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2022 |
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Revenue |
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$ |
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$ |
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$ |
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$ |
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Expenses: |
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Research and development |
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General and administrative |
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Operating expenses |
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Other income/(expense): |
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Interest income |
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Foreign exchange loss |
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( |
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( |
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( |
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( |
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Total other income |
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Net loss |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Other comprehensive loss: |
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Unrealized (loss)/gain on available-for-sale securities |
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( |
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( |
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( |
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Total comprehensive loss |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Basic and diluted loss per common share |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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Weighted average number of common shares outstanding used in the calculation of |
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The accompanying notes are an integral part of these condensed consolidated interim financial statements (unaudited).
7
APTOSE BIOSCIENCES INC.
Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity
(Expressed in thousands of US dollars, except for per common share data)
(unaudited)
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Common Shares |
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Additional |
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Accumulated other |
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Shares |
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Amount |
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paid-in |
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comprehensive |
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Deficit |
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Total |
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Balance, December 31, 2022 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Common shares issued in exchange for RSUs |
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( |
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- |
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- |
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- |
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Common shares issued under the 2022 ATM |
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- |
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- |
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- |
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Common shares issued under the ESPP plan |
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- |
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- |
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- |
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Commitment Shares, 2023 Equity Facility |
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- |
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- |
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- |
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Stock-based compensation |
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- |
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- |
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- |
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- |
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Other comprehensive gain |
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- |
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- |
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- |
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- |
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Net loss |
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- |
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- |
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- |
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- |
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( |
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( |
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Balance, June 30, 2023 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Balance, December 31, 2021 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Common shares issued under the 2020 ATM |
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- |
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- |
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- |
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Common shares issued upon exercise of stock |
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( |
) |
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- |
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- |
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Stock-based compensation |
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- |
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- |
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Other comprehensive loss |
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- |
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- |
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- |
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( |
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( |
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Net loss |
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- |
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( |
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( |
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Balance, June 30, 2022 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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The accompanying notes are an integral part of these condensed consolidated interim financial statements (unaudited).
8
APTOSE BIOSCIENCES INC.
Condensed Consolidated Interim Statements of Cash Flows
(Expressed in thousands of US dollars)
(unaudited)
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Three months ended |
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Six months ended |
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2023 |
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2022 |
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2023 |
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2022 |
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Cash flows used in operating activities: |
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Net loss for the period |
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$ |
( |
) |
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$ |
( |
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$ |
( |
) |
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$ |
( |
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Items not involving cash: |
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Stock-based compensation |
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Depreciation and amortization |
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Loss on disposal of property and equipment |
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- |
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- |
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Amortization of right-of-use assets |
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Interest on lease liabilities |
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Foreign exchange on cash |
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( |
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Accrued interest on investments |
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( |
) |
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( |
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Deferred financing expenses |
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- |
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- |
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Changes in non-cash operating assets and liabilities: |
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Prepaid expenses |
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Other current assets |
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( |
) |
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( |
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Operating lease liabilities |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
Accounts payable |
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( |
) |
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( |
) |
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Accrued liabilities |
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Cash used in operating activities |
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( |
) |
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( |
) |
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( |
) |
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( |
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Cash flows from financing activities: |
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Issuance of common shares under 2022 ATM Facility |
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Cost of offering |
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( |
) |
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- |
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( |
) |
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- |
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Issuance of common shares under 2020 ATM Facility |
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Issuance of common shares under ESPP plan |
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Issuance of common shares upon exercise of stock options |
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Cash from financing activities |
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Cash flows from/(used in) investing activities: |
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Maturity (acquisition) of investments, net |
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( |
) |
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( |
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Purchase of property and equipment |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
Cash from/(used in) investing activities |
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( |
) |
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( |
) |
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Effect of exchange rate fluctuations on cash and cash equivalents |
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( |
) |
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( |
) |
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( |
) |
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Increase (decrease) in cash and cash equivalents |
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$ |
( |
) |
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$ |
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$ |
( |
) |
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$ |
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Cash and cash equivalents, beginning of period |
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$ |
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$ |
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$ |
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$ |
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Cash and cash equivalents, end of period |
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$ |
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$ |
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$ |
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$ |
|
The accompanying notes are an integral part of these condensed consolidated interim financial statements (unaudited).
9
APTOSE BIOSCIENCES INC.
Notes to Condensed Consolidated Interim Financial Statements (unaudited)
Three months and six months ended June 30, 2023 and 2022
(Tabular amounts in thousands of United States dollars, except as otherwise noted)
Aptose Biosciences Inc. (“Aptose,” the “Company,” “we,” “us,” or “our”) is a science-driven, clinical-stage biotechnology company committed to the development and commercialization of precision medicines addressing unmet clinical needs in oncology, with an initial focus on hematology. The Company's small molecule cancer therapeutics pipeline includes products designed to provide single agent efficacy and to enhance the efficacy of other anti-cancer therapies and regimens without overlapping toxicities. The Company’s executive offices are located in San Diego, California, and our head office is located in Toronto, Canada.
We are advancing targeted agents to treat life-threatening hematologic cancers that, in most cases, are not elective for patients and require immediate treatment. We have two clinical-stage investigational products for hematological malignancies: tuspetinib, an oral, potent myeloid kinase inhibitor, and luxeptinib, an oral, dual lymphoid and myeloid kinase inhibitor.
Since our inception, we have financed our operations and technology acquisitions primarily from equity financing, proceeds from the exercise of warrants and stock options, and interest income on funds held for future investment. Our uses of cash for operating activities have primarily consisted of salaries and wages for our employees, facility and facility-related costs for our offices and laboratories, fees paid in connection with preclinical and clinical studies, licensing fees, drug manufacturing costs, laboratory supplies and materials, and professional fees.
Management recognizes that in order for us to meet our capital requirements, and continue to operate, additional financing will be necessary. We plan to raise additional funds to fund our business operations but there is no assurance that such additional funds will be available for us to finance our operations on acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern, see Note 2(a). The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Our ability to raise additional funds could be affected by adverse market conditions, the status of our product pipeline, possible delays in enrollment in our trial, and various other factors and we may be unable to raise capital when needed, or on terms favorable to us. If necessary funds are not available, we may have to delay, reduce the scope of, or eliminate some of our development programs, potentially delaying the time to market for any of our product candidates.
We do not expect to generate positive cash flow from operations for the foreseeable future due to the early stage of our clinical trials. It is expected that negative cash flow will continue until such time, if ever, that we receive regulatory approval to commercialize any of our products under development and/or royalty or milestone revenue from any such products exceeds expenses.
Our cash needs for the next twelve months include estimates of the number of patients and rate of enrollment of our clinical trials, the amount of drug product that we will require to support our clinical trials, and our general corporate overhead costs to support our operations, and our reliance on our manufacturers. We have based these estimates on assumptions and plans which may change and which could impact the magnitude and/or timing of operating expenses and our cash runway, See Note 2(a).
The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As of June 30, 2023, the Company had an accumulated deficit of approximately $
On May 23, 2023, during the Aptose Annual and Special Meeting of Shareholders, our shareholders voted to approve special resolutions providing for an amendment to our articles of incorporation to effect a reverse share split of our outstanding Common Shares, at a ratio in the range of 1-for-10 to 1-for-20. Our Board of Directors then approved a ratio of 1-for-15 on May 23, 2023. On May 24, 2023, we filed articles of amendment under the Canada Business Corporations Act to give effect to the reverse stock split (consolidation) of our Common Shares on the basis of one post-consolidation Common Share for each 15 pre-consolidation Common Shares (the “Reverse Stock Split”). The Common Shares commenced trading on a post-Reverse Stock Split basis at market open on Tuesday, June 6, 2023. All references in this report to historical Common Share prices, numbers of Common Shares, and earnings per share calculations have been presented to reflect the effect of the Reverse Stock Split.
10
These unaudited consolidated condensed financial statements have been prepared in conformity with generally accepted accounting principles in the United States, or GAAP and the rules and regulations of the Securities and Exchange Commission, or SEC, related to quarterly reports filed on Form 10-Q, assuming the Company will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, substantial doubt about the Company's ability to continue as a going concern exists.
As of June 30, 2023, the Company had an accumulated deficit of approximately $