ACCUSTEM SCIENCES, INC. You should read the following discussion of our financial condition and results
of operations in conjunction with the condensed consolidated financial
statements and the related notes included elsewhere in this Form 10-Q and with
our audited consolidated financial statements included in our Annual Report on
Form 10-K for the year ended
Forward-Looking Statements
This Quarterly Report on Form 10-Q (this "Form 10-Q") 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, that are intended to be covered by the "safe harbor" created by those sections. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as "believe," "expect," "may," "will," "should," "would," "could," "seek," "intend," "plan," "goal," "project," "estimate," "anticipate," "strategy," "future," "likely" or the negative thereof or other variations thereon or other comparable terminology. All statements other than statements of historical facts included in this Form 10-Q regarding our strategies, prospects, financial condition, operations, costs, plans and objectives are forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements we make regarding: expectations for revenues, cash flows and financial performance and the anticipated results of our ongoing development and business strategies.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, but are not limited to, the following:
? the success, cost and timing of our clinical development of our products,
including the progress of, and results from, our preclinical and
? clinical trials of StemPrintER products, our discovery programs and other
potential product candidates;
? our ability to obtain and maintain regulatory approval of our product
candidates, and any related restrictions, limitations or warnings in the label
of any of our product candidates, if approved;
? our ability to compete with companies currently marketing or engaged in the
development of treatments for indications that our product candidates are
designed to target;
? our plans to pursue research and development of other future product
candidates;
? the potential advantages of our product candidates and those being developed;
? the rate and degree of market acceptance and clinical utility of our product
candidates;
? the success of our collaborations and partnerships with third parties;
? our estimates regarding the potential market opportunity for our product
candidates;
? our sales, marketing and distribution capabilities and strategy;
? our ability to establish and maintain arrangements for manufacture of our
product candidates;
? our intellectual property position;
? our expectations related to the use of capital;
? the effect of the COVID-19 pandemic, including mitigation efforts and economic
effects, on any of the foregoing or other aspects of our business operations,
including but not limited to our preclinical studies and future clinical
trials;
? our estimates regarding expenses, future revenues, capital requirements and
needs for additional financing;
? the impact of government laws and regulations; and
? our competitive position.
The forward-looking statements are based upon management's beliefs and assumptions and are made as of the date of this report. We undertake no obligation to publicly update or revise any forward-looking statements included in this report. You should not place undue reliance on these forward-looking statements.
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This report also contains or may contain estimates, projections and other information concerning our industry and our business, including data regarding the estimated size of our markets and their projected growth rates. Information that is based on estimates, forecasts, projections, or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained these industry, business, market and other data from reports, studies and similar data prepared by third parties, industry and general publications, government data and similar sources. In some cases, we do not expressly refer to the sources from which these data are derived.
Unless otherwise stated or the context otherwise requires, the terms "AccuStem" "we," "us," "our" and the "Company" refer collectively to AccuStem and, where appropriate, its subsidiaries.
Overview
We are a clinical stage diagnostics company dedicated to improving quality of
life and outcomes for the more than 18 million people worldwide who are
diagnosed with cancer each year. Our plan is to develop and commercialize a
suite of novel genomic tests that support decision making along the entire
continuum of oncology care. Our focus will be the commercialization of our
proprietary genomic test, StemPrintER, for patients with early-stage breast
cancer, and we estimate this market opportunity represents more than
Our primary product candidate is StemPrintER, a 20-gene prognostic assay
intended to predict the risk of distant recurrence ("DR") in luminal
(ER+/HER2-negative) breast cancer patients. The assay was developed to measure
the "stemness" of tumors, or how much a tumor behaves like stem cells which
could indicate how likely a cancer is to recur or be resistant to standard
treatments, ultimately impacting how patients are managed by their
multi-disciplinary care team. StemPrintER has been validated in several clinical
cohorts and studies, the largest of which are a consecutive series of
approximately 2,400 patients from the
*SPRS- StemPrintER Recurrence Score; SPRS High- StemPrintER High Risk; SPRS Low- StemPrintER Low Risk
Beyond our initial plans for StemPrintER, we believe there is significant opportunity to expand our product portfolio. First, given the broad applicability of tumor "stemness", which has been evaluated in a multitude of different cancers, we believe the StemPrint platform will have meaningful clinical utility beyond breast cancer. As such, we will seek to validate and commercialize StemPrint for a variety of different tumor types. Each tumor type, where applicable, would also include ancillary testing to boost our value proposition to physicians and their patients. In addition, we plan to offer ancillary commodity testing (e.g., hereditary genetic testing, somatic mutation testing) that augments our proprietary assays and provides additional information and value to patients and physicians throughout the patient care continuum.
We plan to launch StemPrintER once we have achieved several key milestones.
First, we plan to identify or build a laboratory that will be responsible for
processing, testing and reporting StemPrintER results for all commercial
samples. Further, we plan to transfer the StemPrintER assay from the
laboratories in which they were developed to our commercial laboratory. Finally,
upon establishing testing capabilities in our commercial laboratory, we will
seek to obtain
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Financial Operations Overview
We have no products approved for commercial sale and have not generated revenue
to date. We have never been profitable and have incurred net losses in each year
since inception. We incurred net losses of
Segment Information
As of
Results of Operations
The following discussion and analysis of our results of operations includes a comparison of the three months endedMarch 31, 2023 to the three months endedMarch 31, 2022 : Three Months Ended March 31, 2023 2022 $ Change % Change Revenue $ - $ - $ - - %
Research and development expenses 15,602 21,143 (5,541 ) (26 %) General and administrative expenses 817,739 769,391 48,348
6 %
Loss from operations 833,341 790,534 42,807 5 %
Loss, before income tax (833,341 ) (790,534 ) (42,807 ) 5 %
Income tax benefit (expense) - - - - %
Net loss $ (833,341 ) $ (790,534 ) $ (42,807 ) 5 %
Research and development
Research and development expenses for the three months ended
General and administrative
General and administrative expenses for three months ended
Liquidity and Capital Resources
Sources of Liquidity
Since our inception, we have not generated any revenue and have incurred
significant operating losses. Our potential products are at various phases of
development. We do not expect to generate significant revenue from product sales
for several years, if at all. Pursuant to the demerger, Tiziana transferred
17 Cash Flows
The following table summarizes our cash flows:
For the Three Months Ended
March 31,
2023 2022
Cash flows (used in) provided by operating activities
Cash flows used in investing activities - (8,203 )
Cash flows (used in) provided by financing activities (107,253 ) 2,880,819
Net (decrease) increase in cash and cash equivalents (553,343 ) 3,244,600 Cash and cash equivalents at beginning of period 733,978 - Cash and cash equivalents at end of period$ 180,635 $ 3,244,600
Operating Activities
During the three months ended
During the three months ended
Investing Activities
There were no cash flows from investing activities during the three months ended
The cash flow used in investing activities increased during the three months
ended
Financing Activities
During the three months ended
We generated cash flows from financing activities during the three months ended
Market Capital Expenditure Commitments
We have no material commitment for capital expenditures.
Funding Requirements
We expect that our expenses will increase and operating losses will be
generated, and we have
? the costs, timing and outcomes of clinical trials and regulatory reviews
associated with our product candidates;
? the costs of commercialization activities, including product marketing, sales
and distribution;
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? the costs of preparing, filing and prosecuting patent applications and
maintaining, enforcing and defending intellectual property-related claims;
? the emergence of competing technologies and products and other adverse
marketing developments;
? the effect on our product development activities of actions taken by the FDA,
EMA or other regulatory authorities;
? our degree of success in commercializing our product candidates, if and when
approved; and
? the number and types of future products we develop and commercialize.
A change in the outcome of any of these or other variables with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate. Further, our operating plans may change in the future, and we may need additional funds to meet operational needs and capital requirements associated with such operating plans.
Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity financings, debt financings, collaborations with other companies or other strategic transactions. We do not currently have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
Further, our operating plans may change, and we may need additional funds to meet operational needs and capital requirements for clinical trials and other research and development activities. We currently have no credit facility or committed sources of capital. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated product development programs.
Critical Accounting Policies
There have been no significant changes to our critical accounting policies and
estimates from the information provided in Item 7, "Management's Discussion and
Analysis of Financial Condition and Results of Operations," included in our Form
10-K for the year ended
Off-Balance Sheet Arrangements
We have no other off-balance sheet arrangements that have had, or are reasonably likely to have, a material current or future effect on our consolidated financial statements or changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Recent Accounting Pronouncements
For information on recent accounting pronouncements, see our condensed consolidated financial statements - Note 2 and the related notes found elsewhere in this quarterly report.
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