Quarterly report pursuant to Section 13 or 15(d)

Condensed Consolidated Financial Statements Details

v3.23.3
Condensed Consolidated Financial Statements Details
9 Months Ended
Sep. 30, 2023
Condensed Consolidated Financial Statements Details  
Condensed Consolidated Financial Statements Details

3. Condensed Consolidated Financial Statements Details

Equity Securities

Equity securities consisted of an investment in Rezolute’s common stock of $0.2 million and $0.3 million as of September 30, 2023 and December 31, 2022, respectively (Note 4).

For each of the three and nine months ended September 30, 2023, the Company recognized a loss of $0.1 million due to the change in fair value of its investment in Rezolute’s common stock in the other income (expense), net line item of the condensed consolidated statements of operations and comprehensive loss. For the three and nine months ended September 30, 2022, the Company recognized a loss of $0.1 million and $0.3 million, respectively, due to the change in fair value of its investment.

Intangible assets, net

The following table summarizes cost, accumulated amortization, and net carrying value of the intangible assets as of September 30, 2023 (in thousands):

Accumulated

Net Carrying

Cost

Amortization

Value

As of September 30, 2023

Ebopiprant IP (Note 4)

$

15,247

$

770

$

14,477

Total intangible assets

$

15,247

$

770

$

14,477

The following table summarizes cost, accumulated amortization, and net carrying value of the intangible assets as of December 31, 2022 (in thousands):

Accumulated

Net Carrying

Cost

Amortization

Value

As of December 31, 2022

Ebopiprant IP (Note 4)

$

15,247

$

97

$

15,150

Total intangible assets

$

15,247

$

97

$

15,150

The remaining life of the intangible assets is 16.2 years. The following table presents the projected amortization expense for the next five years (in thousands):

Intangible Asset

    

Amortization

 

2023 (excluding nine months ended September 30, 2023)

$

224

2024

 

897

2025

 

897

2026

897

2027

897

Total

$

3,812

Accrued and Other Liabilities

Accrued and other liabilities consisted of the following (in thousands):

September 30, 

December 31, 

    

2023

    

2022

Accrued payroll, severance and retention costs

 

903

 

1,449

Accrued incentive compensation

902

562

Accrued legal and accounting fees

325

867

Other accrued liabilities

30

40

Total

$

2,160

$

2,918

Net Loss Per Share Attributable to Common Stockholders

The following is a reconciliation of the numerator (net loss) and the denominator (number of shares) used in the calculation of basic and diluted net loss per share attributable to common stockholders (in thousands, except per share amounts):

Three Months Ended September 30, 

Nine Months Ended September 30, 

    

2023

    

2022

    

2023

    

2022

Numerator

 

  

 

  

 

  

 

  

Net loss

$

(5,509)

$

(4,178)

$

(20,722)

$

(11,128)

Less: Series A accumulated dividends

 

(530)

 

(530)

 

(1,591)

 

(1,591)

Less: Series B accumulated dividends

(838)

(838)

(2,513)

(2,513)

Net loss attributable to common stockholders, basic and diluted

(6,877)

(5,546)

$

(24,826)

(15,232)

 

 

Denominator

 

 

 

 

Weighted average shares used in computing basic and diluted net loss per share attributable to common stockholders

 

11,473

11,447

 

11,466

 

11,400

Basic and diluted net loss per share attributable to common stockholders

$

(0.60)

(0.48)

$

(2.17)

$

(1.34)

Potentially dilutive securities are excluded from the calculation of diluted net loss per share attributable to common stockholders if their inclusion is anti-dilutive.

The following table shows the weighted-average shares from outstanding securities considered anti-dilutive and therefore excluded from the computation of diluted net loss per share attributable to common stockholders (in thousands):

Three Months Ended September 30, 

Nine Months Ended September 30, 

    

2023

    

2022

    

2023

    

2022

Convertible preferred stock

5,003

5,003

5,003

5,003

Common stock options

 

1,804

 

888

 

1,781

831

Warrants for common stock

 

6

 

6

 

6

6

Total

 

6,813

 

5,897

 

6,790

 

5,840

For PSUs with market conditions, if the market conditions have not been satisfied by the end of the reporting period, the number of shares that would be issuable based on the market price at the end of the reporting period, as if the end of the reporting period were the end of the contingency period, will be included in the calculation of diluted earnings per share if the effect is dilutive. No shares would be issuable based on the market price of $14.09 per share as of September 30, 2023.

Arbitration Proceeding

In June 2021, the Company initiated a binding arbitration proceeding with one of its licensees (the “Licensee”) at the American Arbitration Association/International Centre for Dispute Resolution, seeking milestone and royalty payments under its license agreement. A hearing before a panel of arbitrators was held in November 2022, and the parties submitted post-hearing briefs. On March 21, 2023, the Company received an adverse decision in this arbitration proceeding. The panel of arbitrators declined to award the Company damages and ruled that the license agreement has expired. The panel ruled that the Company is responsible for the Licensee’s costs as well as arbitrators’ and administrative fees previously incurred by the Licensee of $4.1 million, which the Company paid in April 2023.