The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Since inception, the Company has incurred, and continues to incur, significant losses from operations. The Company has funded its operations primarily through external investor financing arrangements and significant actions taken by the Company, including the following:
· On
"Exercise Agreement") with the institutional investor (the "Holder") from our 2020 PIPE financing (see discussion below for a description of the 2020 PIPE). Pursuant to the Exercise Agreement, in order to induce the Holder to exercise all of the remaining 4,842,615 outstanding warrants (the "Existing Warrants") for cash, pursuant to the terms of and subject to beneficial ownership limitations contained in the Existing Warrants, the Company agreed to issue to the Holder new warrants (the "New Warrants") to purchase 0.65 shares of common stock for each share of common stock issued upon such exercise of the remaining 4,842,615 outstanding Existing Warrants pursuant to the Exercise Agreement or an aggregate of 3,147,700 New Warrants. The terms of the New Warrants are substantially similar to those of the Existing Warrants, except that the New Warrants have an exercise price of$3.56 . The New Warrants are immediately exercisable and will expire five years from the date of the Exercise Agreement. The Holder paid an aggregate of$255,751 to the Company for the purchase of the New Warrants. The Company received aggregate gross proceeds before expenses of approximately$9.65 million from the exercise of all of the remaining 4,842,615 outstanding Existing Warrants held by the Holder and the payment of the purchase price for the New Warrants (together, the "2021 Warrant Exercise"). As additional compensation, A.G.P./Alliance Global Partners will receive a cash fee equal to$200,000 upon the cash exercise in full of the New Warrants. 8
· On
"February 2021 Offering") with a singleU.S. -based, healthcare-focused institutional investor for the purchase of (i) 2,784,184 shares of common stock and (ii) 5,549,149 pre-funded warrants, with each pre-funded warrant exercisable for one share of common stock. The Company also issued to the investor, in a concurrent private placement, unregistered common share purchase warrants to purchase 4,166,666 shares of the Company's common stock. Each share of common stock and accompanying common warrant were sold together at a combined offering price of$3.00 , and each pre-funded warrant and accompanying common warrant were sold together at a combined offering price of$2.99 . The pre-funded warrants are immediately exercisable, at an exercise price of$0.01 , and may be exercised at any time until all of the pre-funded warrants are exercised in full. The common warrants will have an exercise price of$3.55 per share, will be exercisable commencing on the six-month anniversary of the date of issuance, and will expire five and one-half (5.5) years from the date of issuance. TheFebruary 2021 Offering raised aggregate net proceeds of$23.5 million , and gross proceeds of$25.0 million . As ofMarch 31, 2021 , all 5,549,149 pre-funded warrants issued in theFebruary 2021 Offering have been exercised.
· On
with one healthcare-focusedU.S. institutional investor for the purchase of (i) 2,245,400 shares of common stock, (ii) 4,842,615 warrants to purchase shares of common stock and (iii) 2,597,215 pre-funded warrants, with each pre-funded warrant exercisable for one share of common stock. Each share of common stock and accompanying common warrant were sold together at a combined offering price of$2.065 , and each pre-funded warrant and accompanying common warrant were sold together at a combined offering price of$2.055 . The common warrants have an exercise price of$1.94 per share, and are exercisable commencing on the six-month anniversary of the date of issuance, and will expire five and one-half (5.5) years from the date of issuance. The 2020 PIPE raised aggregate net proceeds of$9.3 million , and gross proceeds of$10.0 million . As ofDecember 31, 2020 , all 2,597,215 pre-funded warrants issued in the 2020 PIPE have been exercised.
· On
(the "ATM Agreement") with
amended and restated on
to which the Company may offer and sell from time to time in an "at the market
offering", at its option, up to an aggregate of
Company's common stock through the sales agents (the "2020 ATM Offering").
During the year ended
its common stock under the 2020 ATM Offering resulting in aggregate net
proceeds to the Company of approximately
To meet its capital needs, the Company is considering multiple alternatives, including, but not limited to, strategic financings or other transactions, additional equity financings, debt financings and other funding transactions, licensing and/or partnering arrangements. There can be no assurance that the Company will be able to complete any such transaction on acceptable terms or otherwise. The Company believes that current cash will be sufficient to fund operations into the second quarter of 2022. This has led management to conclude that substantial doubt about the Company's ability to continue as a going concern exists. In the event the Company is unable to successfully raise additional capital during or before the end of the second quarter of 2022, the Company will not have sufficient cash flows and liquidity to finance its business operations as currently contemplated. Accordingly, in such circumstances, the Company would be compelled to immediately reduce general and administrative expenses and delay research and development projects, pause or abort clinical trials including the purchase of scientific equipment and supplies, until it is able to obtain sufficient financing. If such sufficient financing is not received on a timely basis, the Company would then need to pursue a plan to license or sell its assets, seek to be acquired by another entity, cease operations and/or seek bankruptcy protection.
Note 3 - Summary of Significant Accounting Policies
Basis of presentation and consolidation
The Company has prepared the accompanying unaudited condensed consolidated
financial statements pursuant to the rules and regulations of the
9
The accompanying unaudited condensed consolidated financial statements include
the accounts of
Foreign currency
The Company has subsidiaries located in Holzgerlingen,
Foreign currency transaction gains and losses, excluding gains and losses on
intercompany balances where there is no current intent to settle such amounts in
the foreseeable future, are included in the determination of net loss. Unless
otherwise noted, all references to "$" or "dollar" refer to
Use of estimates
In preparing financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In the accompanying unaudited condensed consolidated financial statements, estimates are used for, but not limited to, liquidity assumptions, revenue recognition, inducement expense related to warrant reprice, stock-based compensation, allowances for doubtful accounts and inventory obsolescence, discount rates used to discount unpaid lease payments to present values, valuation of derivative financial instruments measured at fair value on a recurring basis, deferred tax assets and liabilities and related valuation allowance, determining the fair value of assets acquired and liabilities assumed in business combinations, the estimated useful lives of long-lived assets, and the recoverability of long-lived assets. Actual results could differ from those estimates.
Fair value of financial instruments
Financial instruments classified as current assets and liabilities (including cash and cash equivalents, receivables, accounts payable, deferred revenue and short-term notes) are carried at cost, which approximates fair value, because of the short-term maturities of those instruments.
Cash and cash equivalents and restricted cash
The Company considers all highly liquid instruments with original maturities of
three months or less to be cash equivalents. The Company has cash and cash
equivalents deposited in financial institutions in which the balances
occasionally exceed the
At
The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the condensed consolidated statements of cash flows:
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