s
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
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:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification Number) |
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(Address of principal executive offices) |
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(Zip code) |
(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 |
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Trading Symbol |
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Name of Each Exchange on Which Registered |
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The |
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.
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).
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 |
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Accelerated filer |
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Smaller reporting company |
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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 3, 2023,
CORBUS PHARMACEUTICALS HOLDINGS, INC.
Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2023
TABLE OF CONTENTS
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PART I |
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FINANCIAL INFORMATION |
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3 |
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Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 |
3 |
4 |
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5 |
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2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
26 |
3. Quantitative and Qualitative Disclosures about Market Risk |
32 |
32 |
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PART II |
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OTHER INFORMATION |
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33 |
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1A. Risk Factors |
33 |
2. Unregistered Sales of Equity Securities and Use of Proceeds |
34 |
34 |
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34 |
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34 |
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6. Exhibits |
35 |
-2-
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements.
Corbus Pharmaceuticals Holdings, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
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September 30, 2023 |
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December 31, 2022 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Investments |
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Restricted cash |
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Prepaid expenses and other current assets |
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Total current assets |
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Restricted cash |
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Property and equipment, net |
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Operating lease right of use assets |
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Other assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Notes payable |
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$ |
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$ |
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Accounts payable |
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Accrued expenses |
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Derivative liability |
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Operating lease liabilities, current |
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Current portion of long-term debt |
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Total current liabilities |
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Long-term debt, net of debt discount |
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License agreement payable, noncurrent |
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Other long-term liabilities |
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Operating lease liabilities, noncurrent |
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Total liabilities |
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Stockholders’ equity |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Accumulated other comprehensive loss |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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See notes to the unaudited condensed consolidated financial statements.
-3-
Corbus Pharmaceuticals Holdings, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
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For the Three Months |
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For the Nine Months |
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2023 |
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2022 |
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2023 |
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2022 |
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Operating expenses: |
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Research and development |
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$ |
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$ |
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$ |
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$ |
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General and administrative |
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Litigation settlement |
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Total operating expenses |
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Operating loss |
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Other expense, net: |
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Other income (expense), net |
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Interest expense, net |
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Foreign currency exchange loss, net |
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( |
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( |
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( |
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Other expense, net |
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( |
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Net loss |
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$ |
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$ |
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$ |
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$ |
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Net loss per share, basic and diluted |
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$ |
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$ |
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$ |
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$ |
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Weighted average number of common shares outstanding, basic and diluted |
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Comprehensive loss: |
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Net loss |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive income (loss): |
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Change in unrealized gain (loss) on marketable debt securities |
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Total other comprehensive income (loss) |
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Total comprehensive loss |
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$ |
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$ |
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$ |
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$ |
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See notes to the unaudited condensed consolidated financial statements.
-4-
Corbus Pharmaceuticals Holdings, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
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For the Three Months Ended September 30, 2023 |
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Common Stock |
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Additional |
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Accumulated |
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Accumulated |
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Total |
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Shares |
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Amount |
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Capital |
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Deficit |
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Loss |
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Equity |
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Balance at June 30, 2023 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Issuance of common stock, net of issuance costs of $ |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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Change in unrealized gain on marketable debt securities |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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( |
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— |
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( |
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Balance at September 30, 2023 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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For the Three Months Ended September 30, 2022 |
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Common Stock |
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Additional |
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Accumulated |
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Accumulated |
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Total |
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Shares |
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Amount |
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Capital |
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Deficit |
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Loss |
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Equity |
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Balance at June 30, 2022 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Issuance of common stock, net of issuance costs of $ |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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Change in unrealized loss on marketable debt securities |
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— |
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— |
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— |
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— |
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( |
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( |
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Net loss |
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— |
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— |
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— |
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( |
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— |
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( |
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Balance at September 30, 2022 |
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$ |
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$ |
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$ |
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$ |
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$ |
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See notes to the unaudited condensed consolidated financial statements.
-5-
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For the Nine Months Ended September 30, 2023 |
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Common Stock |
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Additional |
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Accumulated |
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Accumulated |
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Total |
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Shares |
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Amount |
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Capital |
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Deficit |
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Loss |
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Equity |
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Balance at December 31, 2022 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Issuance of common stock, net of issuance costs of $ |
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— |
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— |
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Issuance of common stock upon conversion of K2 Loan and Security Agreement |
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— |
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— |
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Issuance of common stock upon exercise of stock options |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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Change in unrealized gain on marketable debt securities |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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Balance at September 30, 2023 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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For the Nine Months Ended September 30, 2022 |
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Common Stock |
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Additional |
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Accumulated |
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Accumulated |
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Total |
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Shares |
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Amount |
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Capital |
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Deficit |
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Loss |
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Equity |
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Balance at December 31, 2021 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Issuance of common stock, net of issuance costs of $ |
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— |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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Change in unrealized loss on marketable debt securities |
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— |
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— |
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— |
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— |
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( |
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( |
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Net loss |
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— |
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— |
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— |
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( |
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— |
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( |
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Balance at September 30, 2022 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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See notes to the unaudited condensed consolidated financial statements.
-6-
Corbus Pharmaceuticals Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
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Nine Months Ended |
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2023 |
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2022 |
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Cash flows from operating activities: |
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Net loss |
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$ |
( |
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$ |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Stock-based compensation expense |
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Depreciation and amortization |
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Net amortization on (discount) premium of investments |
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Loss on foreign exchange |
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Amortization of debt discount |
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Realized loss on investments |
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Loss on sale of property and equipment |
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Changes in operating assets and liabilities: |
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(Increase) decrease in prepaid expenses and other current assets |
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Increase in other assets |
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( |
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( |
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Decrease in operating lease right of use asset |
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Increase in other long-term liabilities |
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Increase (decrease) in accounts payable |
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( |
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Increase (decrease) in accrued expenses |
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( |
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Decrease in operating lease liabilities |
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( |
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( |
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Net cash used in operating activities |
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( |
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( |
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Cash flows from investing activities: |
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Purchases of investments |
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Proceeds from sales and maturities of investments |
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Purchases of property and equipment |
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Proceeds from sale of property and equipment |
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Net cash provided by investing activities |
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Cash flows from financing activities: |
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Repayment of short-term borrowings |
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( |
) |
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( |
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Repayment of long-term borrowings |
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( |
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Proceeds from issuance of common stock |
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Issuance costs paid for common stock financings |
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( |
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Net cash used in financing activities |
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( |
) |
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( |
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Net increase (decrease) in cash, cash equivalents, and restricted cash |
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( |
) |
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( |
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Cash, cash equivalents, and restricted cash at beginning of the period |
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Cash, cash equivalents, and restricted cash at end of the period |
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$ |
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$ |
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Supplemental disclosure of cash flow information and non-cash transactions: |
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Cash paid during the period for interest |
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$ |
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$ |
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Issuance of common stock for conversion of convertible debt |
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$ |
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$ |
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Write off of fully depreciated property and equipment |
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$ |
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$ |
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See notes to the unaudited condensed consolidated financial statements.
-7-
Corbus Pharmaceuticals Holdings, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
September 30, 2023
1. NATURE OF OPERATIONS
Business
Corbus Pharmaceuticals Holdings, Inc. (the “Company” or “Corbus”) is a precision oncology company with a diversified portfolio and is committed to helping people defeat serious illness by bringing innovative scientific approaches to well-understood biological pathways. Corbus' pipeline includes CRB-701, a next generation antibody drug conjugate ("ADC") that targets the expression of Nectin-4 on cancer cells to release a cytotoxic payload, CRB-601, an anti-integrin monoclonal antibody that blocks the activation of TGFβ expressed on cancer cells, and CRB-913, a highly peripherally restricted cannabinoid type-1 ("CB1") receptor inverse agonist for the treatment of obesity. 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 condensed consolidated financial position of the Company as of September 30, 2023 and the results of its operations and changes in stockholders’ equity for the three and nine months ended September 30, 2023 and 2022 and its cash flows for the nine months ended September 30, 2023 and 2022. The December 31, 2022 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 (“U.S. 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, 2022, filed on March 7, 2023 (the “2022 Annual Report”). The results of operations for such interim periods are not necessarily indicative of the operating results for the full fiscal year.
2. LIQUIDITY AND GOING CONCERN
The accompanying condensed 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, 2023, had an accumulated deficit of approximately $
The Company will need to raise significant additional capital to continue to fund the clinical trials for CRB-701 and CRB-601. The Company may seek to sell common or preferred equity or convertible debt securities, enter into a credit facility or another form of third-party funding, or seek other debt financing. In addition, the Company may seek to raise cash through collaborative agreements or from government grants. The sale of equity and convertible debt securities may result in dilution to the Company’s stockholders and certain of those securities may have rights senior to those of the Company’s common shares. If the Company raises additional funds through the issuance of preferred stock, convertible debt securities or other debt financing, these securities or other debt could contain covenants that would restrict the Company’s operations. Any other third-party funding arrangement could require the Company to relinquish valuable rights.
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 pre-clinical or clinical trials. These factors, among others, cause management to conclude there is a substantial doubt about the Company’s ability to continue as a going concern. There have been no adjustments made to these consolidated financial statements as a result of these uncertainties.
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On May 31, 2023, the Company entered into Amendment No. 1 to the Open Market Sale Agreement originally dated August 6, 2020 (the “May 2023 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. The Company will pay Jefferies a commission of
3. SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant accounting policies followed by the Company in the preparation of the condensed consolidated financial statements is as follows:
Basis of Presentation
The accompanying financial statements have been prepared in accordance with U.S. GAAP.
Reverse Stock Split
On February 14, 2023, the Company completed a
Consolidation
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.
Use of Estimates
The process of preparing financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and changes in estimates may occur. The most significant estimates are related to stock-based compensation expense (see Note 13), the accrual of research, product development and clinical obligations (see Note 10), and the valuation of warrants (see Note 9 and Note 14).
Cash, Cash Equivalents, and Restricted Cash
The Company considers only those investments which are highly liquid, readily convertible to cash, and that mature within 90 days from date of purchase to be cash equivalents. At September 30, 2023 and December 31, 2022, cash equivalents were comprised of money market funds, commercial paper, and other debt securities with maturities less than three months from the date of purchase.
Restricted cash as of September 30, 2023 included security for a stand-by letter of credit issued in favor of a landlord for $
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Cash, cash equivalents, and restricted cash consist of the following:
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September 30, 2023 |
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December 31, 2022 |
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$ |
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$ |
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Cash and cash equivalents |
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Restricted cash, current |
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Restricted cash, noncurrent |
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Restricted cash |
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