GENE BIOTHERAPEUTICS, INC. The following discussion and analyses are intended to help you understand our
financial condition and results of operations for the three and nine month
periods ended
Overview
We are a clinical stage biotechnology company focused on pre-clinical, clinical and commercialization of angiogenic gene therapy biotherapeutics for strategic niche markets, primarily for the treatment of cardiovascular disease. Our technology platform is designed to biologically activate the human body's innate angiogenic healing process to stimulate the growth of microvascular networks for patients with ischemic cardiovascular, cerebral, and other medical conditions and diseases, as well as for advanced tissue engineering applications. Historically we have developed and sold various medical devices, product candidates and products.
Our lead product candidate, Generx, is a first in class, single dose, angiogenic gene therapy product candidate that is designed to improve blood flow and to increase the supply of oxygenated blood in patients with refractory angina and myocardial ischemia due to advanced coronary artery disease. Generx has been designed to improve perfusion by promoting the formation of functional coronary collateral blood vessels within the heart through enlargement of existing arterioles (arteriogenesis) and formation on new capillary vessels (angiogenesis). This process, termed "medical revascularization," represents a fundamentally new mechanism of action that involves the stimulation of the formation of new biological structures in the heart, as opposed to currently available pharmacologic therapies, which only address the symptoms of angina, or mechanical intervention. Results from prior clinical studies demonstrate perfusion improvements with Generx similar to that achieved with coronary artery bypass surgery or stents, but in a significantly less costly and less invasive procedure.
23
Our current business is focused exclusively on the development of Generx, a gene
therapy product candidate targeted at men and women with advanced ischemic heart
disease and refractory angina. We have received FDA approval and FAST Track
Status for a Phase 3 clinical trial. We do not currently have any other products
or other product candidates and have not generated any revenues from operations
for the three month period ended
Results of Operations
For the Three Months Ended
The following tables sets forth our results of operations for the three-month
period ended
Three Month Period Ended
September 30, Change
2020 2019 ($) %
Operating Expenses $ $ %
Research and development 66,116 61,443 4,673 7.6 %
Selling, general and
administrative 322,583 114,047 208,536 183. %
Total Operating Expenses 388,699 175,490 213,209 121.4 %
Gain on sale of assets and
technology - - - -
Loss from Operations (388,699 ) (175,490 ) (213,209 ) 121.4 %
Other Income (expenses) %
Gain on account payable
forgiveness - 35,985 (35,985 ) (100.0 )%
Interest Expense (12,706 ) (10,952 ) (1,754 ) 16.0 %
Total other Income (Expense) (12,706 ) 25,033 (37,739 ) (151 )%
Net income (Loss) (401,405 ) (150,457 ) (250,948 ) 167 %
Net loss attributable to the
non-controlling interest (40,273 ) (19,790 ) (18,165 ) 103 %
Net loss attributable to the
controlling interest (361,132 ) (130,667 ) 210,772 176 %
Research and development expenses increased by
Selling, general and administrative expenses for the three-month period ended
Interest expenses increased for the three-month period ended
24
For the Nine Months Ended
The following tables sets forth our results of operations for the nine-month
period ended
Nine Month Period Ended
September 30, Change
2020 2019 ($) %
Operating Expenses $ $ %
Research and development 161,842 185,177 (23,335 ) (12.6 )%
Selling, general and
administrative 622,398 474,120 148,278 31.3 %
Total Operating Expenses 784,240 659,297 103,732 18.9 %
Gain on sale of assets and
technology (600,000 ) - - -
Loss from Operations (184,240 ) (659,297 ) 475,057 (72 )%
Other Expenses %
Gain on account payable
forgiveness 66,751 35,985 30,767 85.5 %
Interest Expense (44,555 ) (31,584 ) (12,971 ) 41. 0 %
Total other Income (Expense) 22,196 4,401 17,795 404 %
Net income (Loss) (162,044 ) (654,896 ) 492,852 (75.3 %)
Net loss attributable to the
non-controlling interest (86,935 ) (71,490 ) (15,445 ) 21.6 %
Net loss attributable to the
controlling interest (75,109 ) (583,406 ) 508,297 (87.1 )%
Research and development expenses decreased by
Selling, general, and administrative expenses for nine-month period ended
Interest expense increased for the nine-month period ended
25
Liquidity and Capital Resources
The following table summarizes our liquidity and working capital position at
September 30,
2020 2019
Cash and Cash Equivalents $ 781,571 $ 37,258
Other Current Assets 19,174 16,763
Accounts Payable 661,950 1,864,149
Other Current Liabilities 4,264,718 4,366,251
Working Capital (4,125,923 ) (6,176469 )
The following table summarizes our operating, investing, and financing
activities for the nine-month period ended
Period ended September 30,
2020 2019
Net cash generated from (used in) operating
activities $ (795,140 ) $ (113,771 )
Net cash used in investing activities (3,429 )
Net cash generated from/(used in) financing
activities 1,579,740 68,914
Net increase/(decrease) in cash and cash
equivalents 781,171 (44,857 )
The
Cash used in investing activities for the nine-month period ended
The
We anticipate that negative cash flows from operations will continue for the foreseeable future. We do not have any unused credit facilities. We have yet to generate positive cash flows from operations and are dependent on equity and debt funding to finance our operations. Our history of recurring losses and uncertainties as to whether our operations will become profitable raise substantial doubt about our ability to continue as a going concern.
As long as any shares of our Preferred Stock are outstanding, we have agreed that we will not, without the consent of the holders of two-thirds of the Series A Convertible Preferred Stock, incur indebtedness other than specified "Permitted Indebtedness", or incur any liens other than specified "Permitted Liens".
Our principal business objective is to advance our Generx product candidate
through the AFFIRM Phase 3 clinical trial and to begin commercialization of
Generx in
Subsequent to the current period ending
In addition to any funding that can be provided by Nostrum, the Company will require additional financing to support its operations, which it hopes to secure through the sale of additional debt or equity securities. The Company continues to pursue alternative sources of financing, however, there are no arrangements or agreements in place for any financing at this time. We cannot provide any assurances regarding the availability or terms of any future financing at this time. Any delays in obtaining appropriate financing will impact the timing and the Company's ability to execute its strategic initiatives such as Fuji, fund its ongoing working capital requirements and financial obligations.
26
Off-Balance Sheet Arrangements
As of
© Edgar Online, source
