Annual report pursuant to Section 13 and 15(d)

Restatement of Previously Issued Condensed Unaudited Financial Statements

v3.24.1
Restatement of Previously Issued Condensed Unaudited Financial Statements
 12 Months Ended
Dec. 31, 2023
Accounting Changes and Error Corrections [Abstract]  
Restatement of Previously Issued Condensed Unaudited Financial Statements

 

12. Restatement of Previously Issued Condensed Unaudited Financial Statements

 

During the preparation of our 2023 financial statements and notes thereto, we concluded that there was a material general and administrative expense and related balance sheet error in our previously issued unaudited condensed financial statements as of and for the quarterly and year to date period ended September 30, 2023 relating to the classification of payments made as issuance costs rather than as general and administrative period expense.

 

We noted that a payment in the amount of $406,000 was improperly classified as an issuance cost related to the Series AA Preferred Stock issuance when it should have been classified as a general and administrative expense during the three and nine months ended September 30, 2023.

 

This error in the accounting for issuance costs resulted in an understatement of additional paid in capital of $406,000 and an understatement of operating expenses and net loss of $406,000 as of and for the three and nine months ended September 30, 2023.

 

As a result of such error, we concluded that the previously issued unaudited financial statements for the three and nine months ended September 30, 2023 were materially misstated, and have restated them herein. The restatement corrections impact certain components within operating expense of the statements of operations, stockholders’ equity within the balance sheet and operating and financing cash flows within the statement of cash flows.

 

The following tables present the amounts previously reported, the restatement impact and the amount restated. The quarterly restatements will be effective with the filing of our future 2024 unaudited interim financial statement filings in Quarterly Reports on Form 10-Q.

 

The values as previously reported for the fiscal quarter ended September 30, 2023 were derived from our Quarterly Report on Form 10-Q filed on November 14, 2023 and do not give retroactive effect to a 1-for-20 reverse stock split effected on January 9, 2024. See Note 13. Subsequent Events.

 

                       
    As of
September 30,
2023		  
          (unaudited)        
    As     Restatement     As  
    Reported     Impacts     Restated  
Assets                        
Current assets:                        
Cash and cash equivalents   $ 8,096     $ -     $ 8,096  
Restricted cash     13       -       13  
Receivables     26       -       26  
Notes receivable     1,500       -       1,500  
Inventory     -       -       -  
Prepaid expenses and other current assets     244       -       244  
Discontinued operations – current assets     20       -       20  
Total current assets     9,899       -       9,899  
Property and equipment, net     6       -       6  
Other assets     -       -       -  
Operating lease right-of-use assets, net     94       -       94  
Total assets   $ 9,999     $ -     $ 9,999  
                         
Liabilities and Stockholders’ Equity                        
Current liabilities:                        
Accounts payable   $ 407     $ -     $ 407  
Note payable to related party     500       -       500  
Other accrued liabilities     790       -       790  
Operating lease liability, current     97       -       97  
Deferred grant revenue     12       -       12  
Discontinued operations – current liabilities     60       -       60  
Total current liabilities     1,866       -       1,866  
Operating lease liability, noncurrent     -       -       -  
Total liabilities     1,866       -       1,866  
                         
Commitments and contingencies (Note 6)                        
                         
Stockholders’ equity:                        
Preferred stock, at amounts paid-in, $0.001 par value per share; 5,000,000 shares authorized, 950,000 shares issued and outstanding at September 30, 2023 and no shares issued and outstanding at December 31, 2022.     1               1  
Common stock, at amounts paid-in, $0.001 par value per share; 225,000,000 shares authorized, 15,016,295 shares issued and outstanding at September 30, 2023 and December 31, 2022.     15               15  
Additional paid-in capital     397,977       406       398,383  
Accumulated deficit     (389,860 )     (406 )     (390,266 )
Total stockholders’ equity     8,133       -       8,133  
Total liabilities and stockholders’ equity   $ 9,999     $ -     $ 9,999  

 

 

                       
    Three Months Ended
September 30,
2023		  
    As     Restatement     As  
    Reported     Impacts     Restated  
Revenues:                        
License revenue   $ -     $ -     $ -  
Grant revenue     4       -       4  
Total revenues     4       -       4  
Operating expenses:                        
Research and development     424       -       424  
General and administrative     1,641       406       2,047  
Total operating expenses     2,065       406       2,471  
Loss from operations     (2,061 )     (406 )     (2,467 )
Other income (expense):                        
Interest income (expense)     (11 )     -       (11 )
Gain on asset sale     1,732       -       1,732  
Other income (expense), net     2       -       2  
Other income (expense), net     1,723       -       1,723  
Net loss   $ (338 )   $ (406 )   $ (744 )
Basic and diluted net loss per common share   $ (0.02 )   $ (0.03 )   $ (0.05 )
Weighted average shares used in computing basic and diluted net loss per common share     15,016       15,016       15,016  

 

 

                         
    Nine Months Ended
September 30,
2023		  
    As     Restatement     As  
    Reported     Impacts     Restated  
Revenues:                        
License revenue   $ 1     $ -     $ 1  
Grant revenue     183       -       183  
Total revenues     184       -       184  
Operating expenses:                        
Research and development     1,426       -       1,426  
General and administrative     4,104       406       4,510  
Total operating expenses     5,530       406       5,936  
Loss from operations     (5,346 )     (406 )     (5,752 )
Other income (expense):                        
Interest income (expense)     18       -       18  
Gain on asset sale     1,732       -       1,732  
Other income (expense), net     (3 )     -       (3 )
Other income (expense), net     1,747       -       1,747  
Net loss   $ (3,599 )   $ (406 )   $ (4,005 )
Basic and diluted net loss per common share   $ (0.24 )   $ (0.03 )   $ (0.27 )
Weighted average shares used in computing basic and diluted net loss per common share     15,016       15,016       15,016  

 

 

CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

                       
    Nine Months Ended
September 30,
2023		  
    As     Restatement     As  
    Reported     Impacts     Restated  
Cash flows from operating activities:                        
Net loss   $ (3,599 )   $ (406 )   $ (4,005 )
Adjustments to reconcile net loss to net cash used in operating activities:                        
Gain on sale of assets     (1,732 )     -       (1,732 )
Depreciation and amortization     109       -       109  
Stock-based milestone payment     -       -       -  
Stock-based compensation     965       -       965  
Other     (1 )     -       (1 )
Changes in operating assets and liabilities:                        
Receivables     -       -       -  
Inventory     -       -       -  
Prepaid expenses and other assets     122       -       122  
Accounts payable     (374 )     -       (374 )
Deferred grant revenue     (184 )     -       (184 )
Other accrued liabilities     (152 )     -       (152 )
Net cash used in operating activities     (4,846 )     (406 )     (5,252 )
                         
Cash flows from investing activities:                        
Proceeds from sale of assets     228       -       228  
Net cash provided by investing activities     228       -       228  
                         
Cash flows from financing activities:                        
Net proceeds from equity offering     -       -       -  
Net proceeds from issuance of preferred stock     9,094       406       9,500  
Proceeds from short-term loans     750       -       750  
Net proceeds from the exercises of common stock warrants     -       -       -  
Payments on short-term loans     (250 )     -       (250 )
Net cash provided by financing activities     9,594       406       10,000  
                         
Net increase (decrease) in cash, cash equivalents and restricted cash     4,976       -       4,976  
Cash, cash equivalents and restricted cash at beginning of period     3,133       -       3,133  
Cash, cash equivalents and restricted cash at end of period   $ 8,109     $ -     $ 8,109  
                         
Supplemental cash flow information:                        
Interest paid   $ 4     $ -     $ 4  
Inventory transferred with sale of assets   $ 106     $ -     $ 106  
Property and equipment, net, transferred with sale of assets   $ 109     $ -     $ 109  
Notes receivable received in connection with sale of assets   $ 1,500     $ -     $ 1,500  
Accounts payable related to sale of assets   $ 17     $ -     $ 17  
Other accrued liabilities transferred with sale of assets   $ 236     $ -     $ 236  

 

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed balance sheets that sum to the total of the same such amounts shown in the condensed statements of cash flows (in thousands):

 

    2023  
Cash and cash equivalents   $ 8,096  
Restricted cash     13  
Cash, cash equivalents and restricted cash shown in the condensed statements of cash flows   $ 8,109