10-Q

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

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.

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.

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


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


	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


	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


	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	)


	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


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


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


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐


	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


	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