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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2021

 

or

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from________ to_________.

 

Commission File Number:

001-37348

 

Corbus Pharmaceuticals Holdings, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

 

46-4348039

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification Number)

 

500 River Ridge Drive

Norwood, MA

 

02062

(Address of principal executive offices)

 

(Zip code)

 

(617) 963-0100

(Registrant’s telephone number, including area code)

 

 

 

(Former Name, Former Address and Former Fiscal Year if Changed Since Last Report): N/A

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

 

Trading Symbol

 

Name of Each Exchange on Which Registered

Common Stock, par value $0.0001 per share

 

CRBP

 

Nasdaq Global Market

 

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. Yes ☒ No ☐

 

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). Yes ☒ No ☐

 

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

Non-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 ☐ No

 

As of November 9, 2021, 125,230,881 shares of the registrant’s common stock, $0.0001 par value, were issued and outstanding.

 

 

 

 


 

CORBUS PHARMACEUTICALS HOLDINGS, INC.

 

Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2021

 

TABLE OF CONTENTS

 

 

Page

PART I

 

 

 

FINANCIAL INFORMATION

 

 

 

1. Condensed Consolidated Financial Statements

3

Condensed Consolidated Balance Sheets as of September 30, 2021 (unaudited) and December 31, 2020

3

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited)

4

Condensed Consolidated Statement of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited)

5

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020 (unaudited)

7

Notes to Unaudited Condensed Consolidated Financial Statements

8

2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

27

3. Quantitative and Qualitative Disclosures about Market Risk

35

4. Controls and Procedures

35

 

 

PART II

 

 

 

OTHER INFORMATION

 

 

 

1. Legal Proceedings

36

1A. Risk Factors

36

2. Unregistered Sales of Equity Securities and Use of Proceeds

36

3. Defaults Upon Senior Securities

36

4. Mine Safety Disclosures

36

5. Other Information

36

6. Exhibits

37

 

-2-


 

PART I — FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

Corbus Pharmaceuticals Holdings, Inc.

Condensed Consolidated Balance Sheets

 

 

 

September 30, 2021

 

 

December 31, 2020

 

 

 

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

37,118,654

 

 

$

85,433,441

 

Marketable securities

 

 

69,744,151

 

 

 

 

Restricted cash

 

 

192,475

 

 

 

350,000

 

Stock subscriptions receivable

 

 

 

 

 

960,033

 

Prepaid expenses and other current assets

 

 

2,111,858

 

 

 

3,712,861

 

Contract asset

 

 

2,500,000

 

 

 

1,618,296

 

Total current assets

 

 

111,667,138

 

 

 

92,074,631

 

Restricted cash

 

 

477,425

 

 

 

669,900

 

Property and equipment, net

 

 

2,652,828

 

 

 

4,067,837

 

Operating lease right of use assets

 

 

4,776,571

 

 

 

5,248,525

 

Other assets

 

 

 

 

 

234,038

 

Total assets

 

$

119,573,962

 

 

$

102,294,931

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Notes payable

 

$

 

 

$

710,158

 

Accounts payable

 

 

2,545,919

 

 

 

7,381,183

 

Accrued expenses

 

 

13,368,133

 

 

 

22,005,432

 

Derivative liability

 

 

126,857

 

 

 

797,000

 

Operating lease liabilities, current

 

 

1,102,727

 

 

 

1,004,063

 

Total current liabilities

 

 

17,143,636

 

 

 

31,897,836

 

Long-term debt, net of debt discount

 

 

18,550,502

 

 

 

18,029,005

 

Operating lease liabilities, noncurrent

 

 

6,251,038

 

 

 

7,093,165

 

Total liabilities

 

 

41,945,176

 

 

 

57,020,006

 

Stockholders’ equity

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 10,000,000 shares authorized, no shares
   issued and outstanding at September 30, 2021 and December 31, 2020

 

 

 

 

 

 

Common stock, $0.0001 par value; 300,000,000 shares authorized,
   
125,230,881 shares issued and outstanding at September 30, 2021
   and
150,000,000 shares authorized, and 98,852,696 shares issued and
   outstanding at December 31, 2020

 

 

12,523

 

 

 

9,885

 

Additional paid-in capital

 

 

417,098,261

 

 

 

349,358,378

 

Accumulated deficit

 

 

(339,473,031

)

 

 

(304,093,338

)

Accumulated other comprehensive loss

 

 

(8,967

)

 

 

 

Total stockholders’ equity

 

 

77,628,786

 

 

 

45,274,925

 

Total liabilities and stockholders’ equity

 

$

119,573,962

 

 

$

102,294,931

 

 

See notes to the unaudited condensed consolidated financial statements.

-3-


 

Corbus Pharmaceuticals Holdings, Inc.

Condensed Consolidated Statement and Comprehensive Loss

(Unaudited)

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue from awards and licenses

 

$

97,323

 

 

$

1,230,621

 

 

$

881,705

 

 

$

3,279,026

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

8,695,641

 

 

 

27,522,989

 

 

 

30,681,684

 

 

 

82,156,926

 

General and administrative

 

 

5,277,090

 

 

 

7,681,573

 

 

 

16,190,684

 

 

 

23,120,020

 

Total operating expenses

 

 

13,972,731

 

 

 

35,204,562

 

 

 

46,872,368

 

 

 

105,276,946

 

Operating loss

 

 

(13,875,408

)

 

 

(33,973,941

)

 

 

(45,990,663

)

 

 

(101,997,920

)

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense), net

 

 

12,033,031

 

 

 

(4,972

)

 

 

11,790,328

 

 

 

4,005

 

Interest income (expense), net

 

 

(391,867

)

 

 

(454,319

)

 

 

(1,439,587

)

 

 

(348,654

)

Change in fair value of derivative liability

 

 

472,143

 

 

 

(211,000

)

 

 

670,143

 

 

 

(211,000

)

Foreign currency exchange gain (loss), net

 

 

(414,048

)

 

 

(251,117

)

 

 

(409,914

)

 

 

(103,903

)

Other income (expense), net

 

 

11,699,259

 

 

 

(921,408

)

 

 

10,610,970

 

 

 

(659,552

)

Net loss

 

$

(2,176,149

)

 

$

(34,895,349

)

 

$

(35,379,693

)

 

$

(102,657,472

)

Net loss per share, basic and diluted

 

$

(0.02

)

 

$

(0.43

)

 

$

(0.29

)

 

$

(1.37

)

Weighted average number of common shares outstanding, basic and diluted

 

 

125,209,985

 

 

 

81,879,119

 

 

 

122,234,847

 

 

 

75,037,418

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(2,176,149

)

 

$

(34,895,349

)

 

$

(35,379,693

)

 

$

(102,657,472

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on marketable debt securities

 

 

(3,513

)

 

 

 

 

 

(8,967

)

 

 

 

Total other comprehensive income (loss)

 

 

(3,513

)

 

 

 

 

 

(8,967

)

 

 

 

Total comprehensive loss

 

$

(2,179,662

)

 

$

(34,895,349

)

 

$

(35,388,660

)

 

$

(102,657,472

)

 

See notes to the unaudited condensed consolidated financial statements.

 

-4-


 

Corbus Pharmaceuticals Holdings, Inc.

Condensed Consolidated Statement of Stockholders’ Equity

(Unaudited)

 

 

 

For the Three Months Ended September 30, 2021

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated

 

 

Accumulated
Other
Comprehensive

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Loss

 

 

Equity

 

Balance at June 30, 2021

 

 

125,083,006

 

 

$

12,508

 

 

$

414,249,029

 

 

$

(337,296,882

)

 

$

(5,454

)

 

$

76,959,201

 

Issuance of common stock, net of issuance costs of
   $
0

 

 

147,875

 

 

 

15

 

 

 

249,985

 

 

 

 

 

 

 

 

 

250,000

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

2,599,247

 

 

 

 

 

 

 

 

 

2,599,247

 

Unrealized loss on marketable debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,513

)

 

 

(3,513

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(2,176,149

)

 

 

 

 

 

(2,176,149

)

Balance at September 30, 2021

 

 

125,230,881

 

 

$

12,523

 

 

$

417,098,261

 

 

$

(339,473,031

)

 

$

(8,967

)

 

$

77,628,786

 

 

 

 

For the Three Months Ended September 30, 2020

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Equity

 

Balance at June 30, 2020

 

 

80,655,848

 

 

$

8,065

 

 

$

308,991,895

 

 

$

(260,586,081

)

 

$

48,413,879

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

3,630,996

 

 

 

 

 

 

3,630,996

 

Issuance of common stock, net of issuance costs of
   $
350,471

 

 

1,504,473

 

 

 

150

 

 

 

11,331,739

 

 

 

 

 

 

11,331,889

 

Issuance of common stock upon exercise of stock options

 

 

47,084

 

 

 

5

 

 

 

271,923

 

 

 

 

 

 

271,928

 

Fair Value of warrant issued in connection with K2HV

 

 

 

 

 

 

 

 

472,409

 

 

 

 

 

 

472,409

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(34,895,349

)

 

 

(34,895,349

)

Balance at September 30, 2020

 

 

82,207,405

 

 

$

8,220

 

 

$

324,698,962

 

 

$

(295,481,430

)

 

$

29,225,752

 

 

See notes to the unaudited condensed consolidated financial statements.

-5-


 

 

 

 

For the Nine Months Ended September 30, 2021

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated

 

 

Accumulated
Other
Comprehensive

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Loss

 

 

Equity

 

Balance at December 31, 2020

 

 

98,852,696

 

 

$

9,885

 

 

$

349,358,378

 

 

$

(304,093,338

)

 

$

 

 

$

45,274,925

 

Issuance of common stock, net of issuance costs of
   $
1,820,437

 

 

25,539,585

 

 

 

2,554

 

 

 

59,108,247

 

 

 

 

 

 

 

 

 

59,110,801

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

7,686,921

 

 

 

 

 

 

 

 

 

7,686,921

 

Issuance of common stock upon exercise of stock
   options

 

 

838,600

 

 

 

84

 

 

 

944,715

 

 

 

 

 

 

 

 

 

944,799

 

Unrealized loss on marketable debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,967

)

 

 

(8,967

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(35,379,693

)

 

 

 

 

 

(35,379,693

)

Balance at September 30, 2021

 

 

125,230,881

 

 

$

12,523

 

 

$

417,098,261

 

 

$

(339,473,031

)

 

$

(8,967

)

 

$

77,628,786

 

 

 

 

For the Nine Months Ended September 30, 2020

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated

 

 

Total
 Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2019

 

 

64,672,893

 

 

$

6,467

 

 

$

198,975,056

 

 

$

(192,823,958

)

 

$

6,157,565

 

Issuance of common stock, net of issuance costs of
   $
5,365,114

 

 

17,284,934

 

 

 

1,728

 

 

 

114,560,514

 

 

 

 

 

 

114,562,242

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

10,116,775

 

 

 

 

 

 

10,116,775

 

Issuance of common stock upon exercise of stock options

 

 

249,578

 

 

 

25

 

 

 

574,208

 

 

 

 

 

 

574,233

 

Fair Value of warrant issued in connection with K2HV

 

 

 

 

 

 

 

 

472,409

 

 

 

 

 

 

472,409

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(102,657,472

)

 

 

(102,657,472

)

Balance at September 30, 2020

 

 

82,207,405

 

 

$

8,220

 

 

$

324,698,962

 

 

$

(295,481,430

)

 

$

29,225,752

 

 

 

See notes to the unaudited condensed consolidated financial statements.

 

-6-


 

Corbus Pharmaceuticals Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

Nine Months Ended
September 30,

 

 

 

2021

 

 

2020

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(35,379,693

)

 

$

(102,657,472

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Stock-based compensation expense

 

 

7,686,921

 

 

 

10,116,775

 

Depreciation and amortization

 

 

792,132

 

 

 

841,755

 

Loss on impairment of fixed assets

 

 

606,078

 

 

 

 

Net amortization on premium of marketable securities

 

 

493,722

 

 

 

 

(Gain) Loss on foreign exchange

 

 

361,327

 

 

 

(134,368

)

Operating lease right of use asset amortization

 

 

471,954

 

 

 

422,735

 

Amortization of debt discount

 

 

521,497

 

 

 

118,977

 

Change in fair value of derivative liability

 

 

(670,143

)

 

 

211,000

 

Loss on sale of property and equipment

 

 

9,099

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Decrease in prepaid expenses

 

 

1,601,003

 

 

 

1,547,550

 

Decrease (increase) in contract asset

 

 

(881,704

)

 

 

1,720,974

 

Decrease in other assets

 

 

234,037

 

 

 

71,927

 

Increase (decrease) in accounts payable

 

 

(5,196,591

)

 

 

458,646

 

Increase (decrease) in accrued expenses

 

 

(8,387,299

)

 

 

6,186,850

 

Decrease in operating lease liabilities

 

 

(743,462

)

 

 

(366,744

)

Net cash used in operating activities

 

 

(38,481,122

)

 

 

(81,461,395

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of marketable securities

 

 

(77,266,596

)

 

 

 

Proceeds from sales and maturities of marketable securities

 

 

7,019,756

 

 

 

 

Purchases of property and equipment

 

 

 

 

 

(536,577

)

Proceeds from sale of property and equipment

 

 

7,700

 

 

 

 

Net cash used in investing activities

 

 

(70,239,140

)

 

 

(536,577

)

Cash flows from financing activities:

 

 

 

 

 

 

Repayment of short-term borrowings

 

 

(710,158

)

 

 

(752,659

)

Proceeds from issuance of common stock

 

 

62,586,070

 

 

 

120,501,589

 

Issuance costs paid for common stock financings

 

 

(1,820,437

)

 

 

(5,365,114

)

Proceeds from issuance of debt, net

 

 

 

 

 

18,756,021

 

Net cash provided by financing activities

 

 

60,055,475

 

 

 

133,139,837

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

 

(48,664,787

)

 

 

51,141,865

 

Cash, cash equivalents, and restricted cash at beginning of the period

 

 

86,453,341

 

 

 

31,748,686

 

Cash, cash equivalents, and restricted cash at end of the period

 

$

37,788,554

 

 

$

82,890,551

 

Supplemental disclosure of cash flow information and non-cash transactions:

 

 

 

 

 

 

Cash paid during the period for interest

 

$

1,305,512

 

 

$

192,417

 

Fair value of warrants issued with K2HV loan agreement

 

 

 

 

 

472,409

 

Write off of fully depreciated property and equipment

 

 

 

 

 

156,645

 

 

See notes to the unaudited condensed consolidated financial statements.

-7-


 

Corbus Pharmaceuticals Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2021

 

1. NATURE OF OPERATIONS

 

Business

 

Corbus Pharmaceuticals Holdings, Inc. (the “Company” or “Corbus”) is focused on developing new medicines that target inflammation, fibrosis, metabolism and immuno-oncology. Corbus’ current pipeline includes small molecules that activate or inhibit the endocannabinoid system and anti-integrin monoclonal antibodies that block activation of TGFβ. The Company plans to expand its pipeline through internal efforts and business development. Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, acquiring operating assets and raising capital. The Company’s business is subject to significant risks and uncertainties and the Company will be dependent on raising substantial additional capital before it becomes profitable and it may never achieve profitability.

 

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and accounts have been eliminated in consolidation. In the opinion of management of the Company, the accompanying unaudited condensed consolidated interim financial statements reflect all adjustments (which include only normal recurring adjustments) necessary to present fairly, in all material respects, the consolidated financial position of the Company as of September 30, 2021 and the results of its operations and changes in stockholders’ equity for the three and nine months ended September 30, 2021 and 2020 and its cash flows for the nine months ended September 30, 2021 and 2020. The December 31, 2020 condensed consolidated balance sheet was derived from audited financial statements. The Company prepared the condensed consolidated financial statements following the requirements of the U.S. Securities and Exchange Commission (the “SEC”) for interim reporting. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP) have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 15, 2021 (the “2020 Annual Report”). The results of operations for such interim periods are not necessarily indicative of the operating results for the full fiscal year.

 

In response to the spread of COVID-19, the Company has taken temporary precautionary measures intended to help minimize the risk of the virus to its employees and community, including temporarily requiring employees to work remotely, implementing remote monitoring procedures for clinical data and suspending all non-essential travel worldwide for its employees.

 

The Company is continuing to monitor the impact of the COVID-19 pandemic on its business and operations.

 

 

2. LIQUIDITY

 

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has incurred recurring losses since inception and as of September 30, 2021, had an accumulated deficit of $339,473,031. The Company anticipates operating losses to continue for the foreseeable future due to, among other things, costs related to research funding, development of its product candidates and its preclinical and clinical programs, strategic alliances and the development of its administrative organization. The Company expects the cash, cash equivalents, and marketable securities of approximately $106,863,000 at September 30, 2021 and the remaining $2,500,000 of proceeds that the Company expects to receive under the 2018 CFF Award before the end of 2021 will be sufficient to meet its operating and capital requirements at least twelve months from the filing of this Quarterly Report on Form 10-Q.

 

The source, timing and availability of any future financing will depend principally upon market conditions, and, more specifically, on the progress of the Company’s clinical development programs. Funding may not be available when needed, at all, or on terms acceptable to the Company. Lack of necessary funds may require the Company to, among other things, delay, scale back or eliminate some or all of the Company’s planned clinical or preclinical trials.

 

 

-8-


 

On August 7, 2020, the Company entered into an Open Market Sale Agreement (the “August 2020 Sale Agreement”) with Jefferies LLC (“Jefferies”), as sales agent, pursuant to which the Company may issue and sell, from time to time, through Jefferies, shares of its common stock, and pursuant to which Jefferies may sell its common stock by any method permitted by law deemed to be an “at the market offering” as defined by Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended