TYME TECHNOLOGIES, INC. The disclosures in this Quarterly Report are complementary to those made in the 2022 10-K. You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing in this Quarterly Report as well as our audited financial statements, notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2022 Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the "Risk Factors" section of this report and of our 2022 Form 10-K, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. As used in this report, unless the context suggests otherwise, "we," "us," "our," "the Company," "TYME" or "Tyme Technologies" refer toTyme Technologies, Inc. together with its subsidiary. All amounts in Management's Discussion and Analysis of Financial Condition and Results of Operations are approximate.
Overview
TYME is an emerging biotechnology company developing CMBTs that are intended to be effective across a broad range of solid tumors and hematologic cancers, while also maintaining patients' quality of life through relatively low toxicity profiles. Unlike targeted therapies that attempt to regulate specific mutations within cancer, the Company's therapeutic approach is designed to take advantage of a cancer cell's innate metabolic requirements to cause cancer cell death through oxidative stress and exposure to the body's natural immune system. The Company has been focused on developing its novel compound, SM-88, as well as further evaluating its preclinical pipeline of novel CMBTTM programs. The Company is also exploring options to further diversify its product candidate pipeline. The Company believes that early clinical results demonstrated by SM-88 in multiple advanced cancers, including breast, sarcomas, pancreatic and prostate, reinforce the potential of our emerging CMBT™ pipeline.
Exploration of Strategic Options and Diversification
OnMarch 29, 2022 , we announced that the Board of Directors of the Company (the "Board") had decided to explore potential strategic options to enhance stockholder value and engaged outside financial and legal advisors to assist with that process. The Company's Board of Directors, the Strategic Planning Committee of the Board, and Management, along with its financial advisor, undertook a comprehensive and thorough process of reviewing and analyzing potential strategic alternatives, in-licensing opportunities and merger candidates to identify the opportunity that would, in the Company's board of directors' view, create the most value for the Company stockholders. OnJuly 3, 2022 , the company entered into an Agreement and Plan of Merger withSyros and Tack Acquisition Corp. , aDelaware corporation and wholly owned subsidiary of Syros. Upon the consummation of the Merger, TYME will continue as the surviving entity and a wholly owned subsidiary of Syros. At the Effective Time, each share of Tyme Common Stock, issued and outstanding immediately prior to the Effective Time will be converted into the right to receive a number of shares of fully paid and non-assessable shares of Syros Common Stock equal to the Exchange Ratio (as defined in the Merger Agreement). The completion of the Merger is subject to the satisfaction or waiver of certain closing conditions, including the adoption of the Merger Agreement by holders of a majority of the outstanding shares of Tyme Common Stock. If the Merger does not close and TYME remains an independent company, it may choose to change its strategy, including, without limitation, to close down its trials and cease operations.
Strategic Review
In the first half of calendar year 2021, the Company undertook a comprehensive strategic review with the goal of aligning the Company's development plans with core strategic goals.
The strategic review was extensive and involved internal and external assessments by industry experts, KOLs and advisors with considerable experience in the various areas we sought to probe and explore.
The strategic review process resulted in several key takeaways including, but not limited to:
• broad activity across 15 cancer types as seen in the First in Human study
and Compassionate Use program and confirmation of strong IP portfolio
provides us extra development opportunities, for which focus is critical;
• the second-line Precision Promise trial was the priority in pancreatic
cancer;
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• breast cancer is a priority indication for development as part of pipeline
diversification beyond pancreatic cancer;
• there is a need to refine our understanding of the MOA and identify
biomarkers to enhance targeting of patient populations; and
• the rapidly changing COVID-19 landscape requires a reevaluation of the
market potential and development pathway for TYME-19.
The Company's recent strategy, including ongoing studies, the Preclinical
Pipeline Programs and diversification efforts, was developed based on the
takeaways from the strategic review , as well as on subsequent developments. Key
elements of the Company's strategy include to (i) successfully advance the
development of SM-88 across a broad range of cancers, (ii) work towards
identifying actionable biomarkers for patient selection or treatment response to
SM-88, (iii) continue to invest in our technology platform and expand the
breadth and depth of our IP portfolio, and (iv) build a balanced portfolio of
proprietary and partnered programs.
Ongoing Studies
OASIS (Metastatic HR+/HER2- Breast Cancer After CDK4/6 Inhibitors)
We are collaborating withGeorgetown University to support a Phase II trial, OASIS, for SM-88 in patients with metastatic breast cancerwho have HR+ and HER2- disease ("HR+/HER2-"). This represents approximately 68% of the annual breast cancer diagnose in the US each year. The OASIS trial is an investigator-initiated prospective open-label Phase II trial evaluating the efficacy and safety of SM-88 with MPS for the treatment of metastatic HR+/ HER2- breast cancer after treatment with a CDK4/6 inhibitor. This trial is designed as a two-stage trial, enrolling up to 50 patientswho have failed or progressed after receiving two hormonal agents and a CDK4/6 inhibitor to receive SM-88 with MPS without additional cancer therapies. The primary endpoint of this trial is ORR, with secondary endpoints including DOR, CBR at >24 weeks, PFS, and safety. The trial is being conducted atGeorgetown University at a total of five sites within the Georgetown/MEDSTAR system located inWashington DC ,Maryland , andNew Jersey . Patient enrollment began in 2021 with the first patient dosed in September. We plan to provide an update on the OASIS breast cancer study during the first half of calendar year 2023.
HoPES Phase II Trial in sarcoma
In early 2020, the open-label Phase 2 investigator sponsored trial of SM-88 therapy in sarcoma, HoPES, opened. This trial has two cohorts, each expecting to enroll 12 patients. The first is SM-88 with MPS as salvage treatment in patients with mixed rare sarcomas, the other is SM-88 with MPS as maintenance treatment for patients with metastatic Ewing's sarcoma that had not progressed on prior therapy. The primary objectives are to measure ORR and PFS. Secondary objectives include DOR, OS, CBR using RECIST, and incidence of treatment-emergent AEs.The Joseph Ahmed Foundation is sponsoring this trial, which is being conducted by PIDr. Chawla at the Sarcoma Oncology Center inSanta Monica, CA. We anticipate that the trial enrollment will continue through the end of calendar year 2022.
Preclinical Pipeline Programs
In fiscal year 2022, the Company began a comprehensive translational preclinical program. We engaged Evotec, a leading global research and development company to aid in the execution of these activities, and we are also incorporating several complementary academic collaborations into this multi-faceted program. The overall goal of these activities is to potentially identify actionable biomarkers of sensitivity and activity to SM-88 in various cancers, complementary combination drugs strategies for SM-88, and other cancer metabolism targets that could benefit from treatment. Additionally, the Company intends to incorporate liquid and/or tumor biopsies to future clinical trials to contribute to the biomarker identification. We anticipate this engagement will have several stages, and that it is likely to last through this fiscal year and potentially into future periods.
TYME-18 and TYME-19
TYME-18 is a CMBTTM compound that is delivered intratumorally. TYME-18 leverages
a member of the bile acid family to create a potential treatment for inoperable
tumors. Preliminary observations of the local administration of TYME-18, a
combination of a proprietary surfactant system and natural sulfonic acid,
suggested its potential as an important regulator of energy metabolism that may
impede the ability of tumors to increase in size, which, in addition to its
lytic functionality, could prove useful in difficult-to-treat cancers. The
Company is assessing development priorities to determine if additional
advancement of this program is warranted at this time.
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TYME-19 is an oral synthetic member of the bile acid family. The Company also
uses bile acids in its anti-cancer drug candidate, TYME-18. Because of its
expertise in bile acids and their effects, the Company was able to identify
TYME-19 as a well-characterized bile acid with potential antiviral properties.
Bile acids have primarily been used for liver disease; however, like all
steroids, they are messenger molecules that modulate a number of diverse
critical cellular processes. Bile acids can modulate lipid and glucose
metabolism and can remediate dysregulated protein folding, with potentially
therapeutic effects on cardiovascular, neurologic, immune, and other metabolic
systems. Some agents in this class have also previously shown antiviral
properties. In in vitro preclinical testing, TYME-19 prevented COVID-19 viral
replication at doses without meaningful cytotoxicity to the treated cells.
Previous independent preclinical research has also shown select bile acids may
have had broad antiviral activity.
The Company retained virology experts at Evotec to assess the mechanisms of
TYME-19. Evotec is a global drug development company that has the capability to
access the multiple existing and emerging variants of the COVID-19 virus. TYME
and Evotec have tested the ability of TYME-19 to interrupt the cellular pathways
commonly used by viruses to produce viral proteins as well as cellular responses
to viral infection that cause local inflammation. Prolonged inflammation from
SARS-CoV-2 can lead to some of the severe outcomes experienced by infected
patients. We aimed for the work by Evotec to provide us with information that
could allow us to assess the potential path forward for the program. However,
with the changes in the demand for COVID-19 therapeutic landscape, and potential
capital required to advance the program, our management decided to currently
pause additional development of this program.
Tumor Targeting Technology
TYME has developed a technology ("Tumor Targeting Technology") by which the
tyrosine isomer L metyrosine (L-?-methylparatyrosine) can be fused with a second
therapeutic agent in a manner that creates a fusion compound that may allow
targeted accumulation of the treatment by the cancer cells in a novel manner.
The Company is assessing potential development paths for this technology.
Discontinuing Programs
Precision Promise Trial- SM-88 with MPS as 2nd line therapy in metastatic pancreatic cancer
InOctober 2018 the Company partnered with PanCAN to study SM-88 in an adaptive randomized Phase II/III trial with registration intent known as Precision PromiseSM. The objective of Precision Promise is to expedite the study and approval of promising therapies for pancreatic cancer by bringing multiple stakeholders together, including academic, industry and regulatory entities. The trial, began in early 2020, SM-88 (with the conditioning agents MPS) is being studied as monotherapy in a treatment arm for patientswho have failed one prior line of chemotherapy. OnJanuary 26, 2022 , the Company announced the discontinuation of SM-88 with MPS in the Precision Promise trial in mPDAC upon learning from PanCAN, the trial sponsor, that it terminated the arm due to futility compared to the control of standard of care chemotherapy in second-line mPDAC. Based on the information provided by PanCAN, the OS for SM-88 with MPS in monotherapy was lower compared to standard of care chemotherapies with either Gemcitabine and Abraxane or modified FOLFIRINOX. As ofJune 30, 2022 , remaining estimated costs to close out the trial have been expensed.
TYME-88-PANC (Part 2) (third-line Metastatic Pancreatic Cancer)
In fiscal year 2020, we launched our pivotal study for SM-88 in the third-line treatment of pancreatic cancer through an amendment to our ongoing TYME-88-Panc trial (Part 2), with the first patient dosed in the third quarter of the fiscal year. As described previously, the COVID-19 pandemic significantly impacted enrollment of this trial such that it appeared likely to complete enrollment in a similar timeline to the second-line Precision Promise pancreatic cancer trial. There has also been a higher than expected dropout of patients randomized to the chemotherapy control arm, which could potentially impact the interpretative and regulatory utility of the data. Following the strategic review discussed above, considering, in part, the timeline and regulatory utility for this trial compared to the parallel Precision Promise trial and concentration of investment in this specific cancer, management concluded that it would be best to focus on the second-line Precision Promise trial which offers treatment options to patients earlier in their disease and includes tumor biopsy and biomarker analyses that aligns with the Company's overall strategic focus on targeted identifying therapies. InJune 2021 , the Company stopped enrollment and began the process of closing down the trial. It is expected to be completed in the third calendar quarter of 2022, with remaining estimated costs to the Company of approximately$100,000 . 23
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COVID-19 Update and Current Economic Conditions
InMarch 2020 , theWorld Health Organization categorized COVID-19 as a pandemic and the President ofthe United States declared the COVID-19 outbreak a national emergency. The COVID-19 pandemic, and actions taken by governments and others to reduce its spread, including travel restrictions, shutdowns of businesses deemed non-essential, and stay-at-home or similar orders, has negatively impacted the global economy, financial markets, and our industry and has disrupted day-to-day life and business operations. We continue to closely monitor the impact of COVID-19 on all aspects of our business, our clinical trials, and the safety of patients as the situation continues to evolve. We will continue to work closely with our clinical trial sites during the pandemic, and are committed to working with them to assure appropriate access for patientswho are seeking clinical trial options for these advanced cancers for which the patients have limited or no other treatment options. We have also taken important steps to protect the health and welfare of our employees, consultants and board members, by continuing to provide a fully "work-from-home" option. Additionally, supply chain disruptions, the effects of theRussia /Ukraine war, inflation and rising interest rates and the possibility of an economic recession further exacerbate challenging economic conditions. Although we have operated in the COVID-19 environment for approximately two years, there remains substantial uncertainty about the extent to which COVID-19 and other macroeconomic headwinds will impact our product candidates and business, including patients' willingness to participate and remain in clinical trials, the timing of meeting enrollment expectations, the ability of our third-party partners to remain operational and our access to capital markets and financing sources and depends on numerous evolving factors that are highly uncertain and cannot be accurately predicted. Management continues to monitor the situation closely and intends to continue to adapt and implement process adjustments as needed. Recent Developments Nasdaq Notice OnJune 21, 2022 , the Company received notice from theNasdaq Stock Market ("Nasdaq") that it had granted the Company a 180-day extension to regain compliance with the Nasdaq continued listing standards. Nasdaq informed the Company that it granted the extension, in part, due to the Company's intention to cure the deficiency during the extension period by effecting a reverse split, if necessary. The extension runs throughDecember 19, 2022 . As previously reported, the Company received notice from Nasdaq onDecember 22, 2021 that the closing bid price for our common stock had been below$1.00 per share for the previous 30 consecutive business days, and that we were therefore not in compliance with the minimum bid price requirement for continued inclusion on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2). Pursuant to the original notice, the Company had a 180-day period in which to regain compliance. Neither the original notice nor the extension has any immediate effect on the listing or trading of our common stock onThe Nasdaq Capital Market. The Company can regain compliance with the$1.00 minimum bid listing requirement if the closing bid price of our common stock is at least$1.00 per share for a minimum of ten (10) consecutive business days during the 180-day extension period. We are actively monitoring the minimum bid price of our common stock and are considering available options to regain compliance. We expect to seek stockholder approval to amend our certificate of incorporation to effectuate a reverse stock split in an effort of regain compliance with the$1.00 minimum bid price listing requirement and avoid delisting.
Critical Accounting Policies and Significant Judgments and Estimates
This management's discussion and analysis of our financial condition and results
of operations is based on our financial statements, which have been prepared in
accordance with GAAP. The preparation of these financial statements requires us
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses and the disclosure of contingent assets and
liabilities in our financial statements. On an ongoing basis, we evaluate our
estimates and judgments, including those related to accrued expenses, warrant
liability, and stock-based compensation. We base our estimates on historical
experience, known trends and events and various other factors that we believe to
be reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions. There have been no
significant changes in our critical accounting policies and significant
judgments and estimates as discussed in our 2022 10-K.
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Derivative Warrant Liability
Certain freestanding common stock warrants that are related to the issuance of common stock are classified as liabilities and recorded at fair value due to characteristics that require liability accounting, primarily the obligation to issue registered shares of common stock upon notification of exercise or certain price protection provisions. Warrants of this type are subject to re-measurement at each balance sheet date and any change in fair value is recognized as a component of other income (expense) in the consolidated statement of operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the warrant. The Company utilizes Level 3 fair value criteria to measure the fair value of the warrants. As noted in Item 1. Note 8, Stockholders' Equity, the Company classifies a warrant to purchase shares of its common stock as a liability on its condensed consolidated balance sheet if the warrant is a free-standing financial instrument that contains certain price protection features or requires issuance of registered common shares upon exercise which cause the warrants to be treated as derivatives. Each warrant of this type is initially recorded at fair value on date of grant using the Monte Carlo simulation model or the Black Scholes model, and is subsequently re-measured to fair value at each subsequent balance sheet date. Changes in fair value of the warrant are recognized as a component of other income (expense) in the condensed consolidated statement of operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the warrant.
Results of Operations
Three Months Ended
Net loss for the three months endedJune 30, 2022 was$6,495,000 compared to$5,929,000 for the three months endedJune 30, 2021 . The increase in losses for the current three-month period is mostly due to an unfavorable variance of$690,000 in the change in fair value of warrant liability offset by decreased operating costs and expenses and higher investment income described below. Cash used in operating activities for the three-months endedJune 30, 2022 was$4,781,000 compared to$5,809,000 for the three months endedJune 30, 2021 . See "Cash Flows" section below for further details.
Revenues
During the three months endedJune 30, 2022 and 2021, the Company did not realize any revenues from operations. We do not anticipate any revenues until such time as one of our product candidates has been approved for commercialization by appropriate regulatory authorities or we enter into certain types of collaboration or licensing arrangements, none of which is anticipated to occur in the near future. Operating Costs and Expenses
For the three months ended
• Research and development expenses were
ended
expenditures in the
studies on SM-88 MOA and biomarker studies, as well as TYME-19. Research
and development costs in the
TYME-88-Panc and Precision Promise clinical trials that were discontinued
in
activities primarily consist of the following:
o Study and consulting expenses were
ended June 30, 2022 , compared to $3,465,000 for the threemonths ended
June 30, 2021 , a decrease of$1,923,000 . The decrease reflects the discontinuation of the TYME-88-Panc and Precision Promise clinical trials inJune 2021 andJanuary 2022 , respectively, offset by costs incurred for the OASIS trial, SM-88 mechanism of action as well as biomarker studies. o Salary and salary-related expenses for research and development personnel were$329,000 for the three months endedJune 30, 2022 , compared to$546,000 for the three months endedJune 30, 2021 , a decrease of$217,000 primarily due to lower headcount for roles currently outsourced to consultants. o Included in research and development expense for the three months endedJune 30, 2022 is$90,000 of stock-based compensation expense related to stock options granted to research and development personnel compared to$173,000 for the three months endedJune 30, 2021 , a decrease of$83,000 primarily attributable to fully vested grants and cancellation/forfeiture of options. 25
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• General and administrative expenses were
ended
expenses for the respective periods include:
o Other general and administrative expenses were $4,196,000 during the
three months ended June 30, 2022 , compared to $1,997,000 for the three
months ended June 30, 2021 , an increase of $2,199,000 , reflecting
financial advisor, clinical advisor and professional fees related to
the evaluation of strategic options, including due diligence of
potential counterparties, that resulted in the Company's entry into
the Merger Agreement.
o Stock-based compensation expense related to stock options was $451,000
for the three months ended June 30, 2022 compared to $471,000 for the
three months ended June 30, 2021 , a decrease of $20,000 .
Other income (expense)
For the three months endedJune 30, 2022 , the Company had$35,000 non-cash income relating to the change in fair value of the warrant liability during the period, compared to$725,000 non-cash income for the three months endedJune 30, 2021 , resulting in a$690,000 variance between the periods. See Item 1, Note 6 for details regarding changes in the fair value of the warrant liability. For the three months endedJune 30, 2022 the Company had investment income and interest income on cash accounts of$90,000 compared to$19,000 for the three months endedJune 30, 2021 . For the three months endedJune 30, 2022 , the Company had interest expense primarily related to the amortization of the severance payable discount of$12,000 compared to$21,000 for the three months endedJune 30, 2021 .
Adjusted Net Loss and Adjusted Net Loss per Share
After adjusting for change in fair value of warrant liability and amortization of employees, directors and consultants stock options, adjusted net loss for the three months endedJune 30, 2022 was$5,990,000 or$0.03 per share compared to$6,010,000 or$0.03 per share for the three months endedJune 30, 2021 . Adjusted net loss and adjusted net loss per share are non-GAAP measures. See "Use of Non-GAAP Measures" below for a reconciliation to the comparable GAAP measures.
Use of Non-GAAP Measures
Adjusted net loss and adjusted net loss per share as presented in this report are non-GAAP measures. The adjustments relate to the change in fair value of warrant liabilities, amortization of employees, directors and consultants stock based compensation and gain on warrant exchange. These financial measures are presented on a basis other than in accordance withU.S. generally accepted accounting principles ("Non-GAAP Measures"). In the reconciliation tables that follow, we present adjusted net loss and adjusted net loss per share, reconciled to their comparable GAAP measures, net loss and net loss per share. These items are adjusted because they are not operational or because they are significant non-cash charges and management believes these adjustments are meaningful to understanding the Company's performance during the periods presented. These Non-GAAP Measures should be considered a supplement to, not a substitute for, or superior to, the corresponding financial measures calculated in accordance with GAAP. Our definitions of adjusted net loss and adjusted loss per share may not be comparable to similar measures reported by other companies. 26
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Reconciliation of Net Loss to Adjusted Net Loss
Three Months Ended June 30,
2022 2021
Net loss (GAAP) $ (6,495,000 ) $ (5,929,000 )
Adjustments:
Change in fair value of warrant liability (35,000 ) (725,000 )
Amortization of employees, directors and consultants stock options
540,000 644,000
Adjusted net loss (non-GAAP) $
(5,990,000 )
Reconciliation of Net Loss Per Share to Adjusted Net
Loss Per Share
Three Months Ended June 30,
2022 2021
Net loss per share (GAAP) $ (0.04 ) $ (0.03 )
Adjustments:
Change in fair value of warrant liability * *
Amortization of employees, directors and consultants stock options
0.01 *
Adjusted net loss per share (non-GAAP) $ (0.03 ) $ (0.03 )
* The effect of the change was negligible to the adjusted net loss per share.
The Non-GAAP Measures for the three months endedJune 30, 2022 and 2021 provide management with additional insight into the Company's results of operations from period to period by excluding certain non-operational and non-cash charges, and are calculated using the following adjustments to net loss: a) TheMay 2020 Warrant issued as part of the warrant exchange as described under the subheading "Historical Financings" below was measured at fair value using a Black-Scholes model which takes into account, as of the valuation date, factors including the current exercise price, the remaining contractual term of the warrant, the current price of the underlying stock, its expected volatility and the risk-free interest rate for the term of the warrant. The warrant liability is revalued at each reporting period or upon exercise. Changes in fair value are recognized in the consolidated statements of operations and are excluded from adjusted net loss and adjusted net loss per share.
b) The Company uses the Black-Scholes option pricing model to determine
fair value of stock options granted. For employees and non-employees,
the compensation expense is amortized over the requisite service period
which approximates the vesting period. The expense is excluded from
adjusted net loss and adjusted net loss per share.
Adjusted basic net loss per share is computed by dividing adjusted net loss by
the weighted average number of shares of Company common stock outstanding for
the period, and adjusted diluted loss per share is computed by also including
common stock equivalents outstanding for the period. During the periods
presented, the calculation excludes any potential dilutive common shares and any
equivalents as they would have been anti-dilutive as the Company incurred losses
for the periods then ended.
Liquidity and Capital Resources
Liquidity and Capital Requirements Outlook
OnFebruary 8, 2021 , the Company closed on a registered direct offering of 40,000,000 shares of its common stock, par value$0.0001 per share, at a purchase price of$2.50 per share. The gross proceeds of the offering were$100 million , prior to deducting placement agent's fees and other offering expenses payable by TYME, which were approximately$6.2 million . The Company continues to use the net proceeds of this offering for the development of our clinical and preclinical assets and for general corporate purposes, capital expenditures, working capital and general and administrative expenses. The Company's most significant funding needs are in connection with (i) participating in the investigator-initiated HoPES clinical trial of SM-88 in sarcoma, (ii) participating in OASIS, our recently announced investigator-initiated prospective open-label Phase II trial, evaluating the efficacy and safety of SM-88 with MPS for the treatment of metastatic HR+, HER2- breast cancer after treatment, (iii) conducting 27 -------------------------------------------------------------------------------- Table of Contents preclinical studies of an injectable form of SM-88, (iv) conducting preclinical studies in connection with our other preclinical pipeline products, TYME-19, TYME-18 and Tumor Targeting Technology, and (v) conducting additional or related studies of other potential drug candidates. If we determine to move beyond the preclinical stage for any of our preclinical product candidates or if we pursue studies in other cancer types, our liquidity requirements will be increased. Additionally, if the Company completes the potential Merger, the Company will, among other transaction related payment obligations, be obligated to pay each of its executive officers a retention bonus within 20 days of such transaction. (See Note 14, Subsequent Event.) Primarily as a result of its active clinical trials, including timing of enrollment, and closing out its discontinuing clinical programs, as well as other business developments, including costs associated with the potential Merger, but not taking into consideration any potential decision to close down its trials and cease operations, the Company currently anticipates that its quarterly cash operating expense will average approximately$5.0 to$7.0 million during fiscal year 2023. Management expects that the Company's net cash usage or net "cash burn" will be less than its operating costs. However, if the proposed Merger is consummated, the Company will become a subsidiary of Syros, and the information presented herein may not be indicative of the cash resources, liquidity sources and liquidity needs of the combined company. As ofJune 30, 2022 , the Company had cash on hand of approximately$6.4 million and working capital of approximately$73.4 million . During the three months endedJune 30, 2021 , the Company established an investment policy and invested approximately$74.1 million in a portfolio of highly liquid investments and marketable securities. As ofJune 30, 2022 , the Company had marketable securities of$71.8 million and accrued interest of$0.6 million classified in other current assets. The primary objectives of the Company's policy are to preserve capital and diversify risk, while maintaining sufficient liquidity to meet cash flow needs. Management has concluded that substantial doubt does not exist regarding the Company's ability to satisfy its obligations as they come due during the twelve-month period following the issuance of these financial statements. This conclusion is based on the Company's assessment of qualitative and quantitative conditions and events, considered in aggregate as of the date of issuance of these financial statements that are known and reasonably knowable. Among other relevant conditions and events, including the ongoing COVID-19 pandemic and related government and economic responses, the Company has considered its operational plans, liquidity sources, obligations due or expected, funds necessary to maintain the Company's operations, and potential adverse conditions or events as of the issuance date of these financial statements. The Company has historically funded its operations primarily through equity offerings of its common stock. As a clinical-stage entity, without product revenues and ongoing needs to fund our clinical development activities and general operations, we regularly evaluate opportunities to raise capital and obtain necessary, as well as opportunistic financing. To meet our short and long-term liquidity needs, we currently expect to use existing cash balances, marketable securities and a variety of other means, including potential issuances of debt or equity securities in public or private financings, option exercises, and partnerships and/or collaborations. The demand for the equity and debt of biopharmaceutical and biotechnology companies like ours is dependent upon many factors, including the general state of the financial markets. During times of extreme market volatility, capital may not be available on favorable terms, if at all. Our inability to obtain such additional capital could materially and adversely affect our business operations. While we likely would continue to seek capital through a number of means, there can be no assurance that additional financing will be available on acceptable terms, if at all, and our negotiating position in capital generating efforts may worsen as existing resources are used. Moreover, as discussed above, should the Company be unable to maintain compliance with Nasdaq listing requirements, our ability to raise funds and, therefore, our liquidity, could be negatively impacted. See Item 1A - Risk Factors for additional information. Additional equity financing, which we expect to raise, may be dilutive to our stockholders; debt financing, if available, may involve significant cash payment obligations and covenants that restrict our ability to operate as a business; and our stock price may not reach levels necessary to induce option exercises. If we are unable to raise the funds necessary to meet our long-term liquidity needs, we may have to delay or discontinue the development of certain or all of our drug candidates or raise funds on terms that we currently consider unfavorable. From time to time, we may also restructure our outstanding securities or seek to repurchase or redeem them if we believe doing so would provide us with additional flexibility to raise capital or is otherwise in the best interests of the Company. Historical Financings OnJanuary 7, 2020 , the Company and Eagle Pharmaceuticals, Inc. ("Eagle") entered into an SPA (the "Eagle SPA"), pursuant to which the Company issued and sold to Eagle 10,000,000 shares of common stock, at a price of$2.00 per share. The Eagle SPA provides that Eagle will, subject to certain conditions, make an additional payment of$20 million upon the occurrence of a milestone event, which is defined as the earlier of (i) achievement of the primary endpoint of OS in the TYME-88-Panc pivotal trial; (ii) 28 -------------------------------------------------------------------------------- Table of Contents achievement of the primary endpoint of OS in the PanCAN Precision PromiseSM SM-88 registration arm; or (iii) FDA approval of SM-88 in any cancer indication. This payment would be split into a$10 million milestone cash payment and a$10 million investment in TYME at a 15% premium to the then prevailing market price. Eagle's shares will be restricted from sale until the earlier of three months following the milestone event or the three-year anniversary of the agreement. OnOctober 18, 2019 , the Company entered into an Open Market Sale AgreementSM , which was amended onAugust 12, 2020 (the "Sale Agreement") withJefferies LLC ("Jefferies"), pursuant to which the Company may, from time to time, sell shares of Common Stock, having an aggregate offering price of up to$30.0 million through Jefferies, as the Company's sales agent (the "Jefferies ATM"). As indicated in the amendment, the shares will be offered and sold by the Company pursuant to its currently effective Registration Statement on Form S-3, as amended (Reg. No. 333-245033). Any sales of Common Stock pursuant to the Sales Agreement will be made by methods deemed to be an "at-the-market offering" as defined in Rule 415 promulgated under the Securities Act of 1933, as amended. Jefferies will use commercially reasonable efforts to sell the shares from time to time, based on the instructions of the Company. The Company will pay Jefferies a commission rate of three percent (3%) of the gross proceeds from the sales of shares of Common Stock sold pursuant to the Sale Agreement. Under the Sale Agreement, the Company is not required to use the full available amount authorized and it may, by giving notice as specified in the Sale Agreement, terminate the Sale Agreement at any time. During the three months endedJune 30, 2022 andJune 30, 2021 , the Company did not raise any proceeds under the Jefferies ATM. As ofJune 30, 2022 , there remained approximately$22.2 million of availability in the Jefferies ATM subject to the terms of the Sale Agreement. InMay 20, 2020 , the Company entered into exchange agreements (the "Share Exchange Agreements") with the Holders of warrants that were issued inApril 2019 (the "April 2019 Warrants"). Pursuant to the Share Exchange Agreements with Holders of theApril 2019 Warrants to purchase 5,833,333 shares of Common Stock in the aggregate, the Company issued an aggregate of 2,406,250 shares of Common stock (the "Exchange Shares") in exchange for suchApril 2019 Warrants. Concurrently therewith, each such Holder executed and delivered to the Company a leak-out agreement (a "Share Leak-Out Agreement") that contained trading restrictions with respect to the Exchange Shares, which (i) for the first 90 days, prohibit any sales of Exchange Shares, (ii) for the subsequent 90 days, limit sales of Exchange Shares on any day to 2.5% of that day's trading volume of Common Stock, and (iii) prohibit new short positions or short sales on Common Stock for the combined 180 day period. The Company also entered into an exchange agreement (the "Warrant Exchange Agreement") with another Holder ofApril 2019 Warrants to purchase 2,166,667 shares of Common Stock in the aggregate. Pursuant to the Warrant Exchange Agreement, the Company issued such Holder a new warrant (the "May 2020 Warrant") to purchase the same number of shares of Common Stock. TheMay 2020 Warrant has the same expiration date,April 2, 2024 , as theApril 2019 Warrants, but has an exercise price of$1.80 and does not include certain price protection, anti-dilution provisions or other restrictions on Company action from the 2019 April Warrants. Concurrently therewith, such Holder executed and delivered to the Company a leak-out agreement that contained trading restrictions on sales of Common Stock issued upon exercise of theMay 2020 Warrant that are substantially similar to the restrictions on Exchange Shares in the Share Leak-Out Agreement, provided that the leak-out restrictions will only apply to the first 893,750 shares of Common Stock issued pursuant to theMay 2020 Warrant.
After such exchanges, the
Cash Flows
Net cash used in or provided by operating, investing and financing activities from continuing operations were as follows:
Three Months
Ended
2022 2021
Net cash (used in) provided by operating activities
(65,254,000 )
Net cash (used in) provided by financing activities - 6,000
Operating Activities
Our cash used in operating activities in the three months ended June 30, 2022
totaled $4.8 million , which is the sum of (i) our net loss of $6.5 million ,
adjusted for non-cash items of $0.5 million expense amortization of stock-based
compensation and $0.4 million net amortization expense of premiums and discounts
on marketable securities, and (ii) changes in operating assets and liabilities
of $0.8 million .
Our cash used in operating activities in the three months ended June 30, 2021
totaled $5.8 million , which is the sum of (i) our net loss of $5.9 million ,
adjusted for non-cash items of $0.6 million expense amortization of stock-based
compensation and $0.2 million net amortization expense of premiums and discounts
on marketable securities, offset by $0.7 million income related to change in
fair
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Table of Contents value of warrant liability. Investing Activities During the three months endedJune 30, 2022 , our investing activities consisted of the purchase of$17.0 million of marketable securities and the receipt of approximately$14.5 million of proceeds from maturities of marketable securities. During the three months endedJune 30, 2021 , our investing activities consisted of the purchase of$74.1 million of marketable securities of which$65.3 million were classified as marketable securities and$8.8 million were classified as cash equivalents on the Company's condensed consolidated balance sheet.
Financing Activities
During the three months ended
There was no financing activity for the three months ended
Seasonality
The Company does not believe that its operations are seasonal in nature.
Off-Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any
off-balance sheet arrangements, as defined under
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