Full Press Release Details
Moleculin Biotech, Inc. Reports Financial
Results for the Third Quarter Ended September 30, 2016
HOUSTON - November 21, 2016 -
Moleculin Biotech, Inc., (Nasdaq: MBRX) ("Moleculin" or the "Company"), a preclinical and clinical-stage pharmaceutical
company focused on the development of anti-cancer drug candidates, some of which are based on license agreements with The University
of Texas System on behalf of the M.D. Anderson Cancer Center ("MD Anderson"), today announced its financial and operating
results for the third quarter ended September 30, 2016.
During the third quarter and year to date,
key activities included:
Planned activities and milestones for the
remainder of 2016 include:
Walter Klemp, Chairman and CEO of Moleculin
stated: "We continue to make progress towards executing on our clinical programs and are pleased with recent developments
that allow us to more cost effectively fund our activities and potentially improve target outcomes, while maintaining our milestone
to report Phase II data by the second half of 2017. We continue to believe we have sufficient funds to pursue our planned operations
through the generation of Phase II data for Annamycin through the end of the third quarter of 2017."
Unaudited Financial Results for the
Third Quarter Ended September 30, 2016
Research and development expense was $496,659
and $38,409 for the three months ended September 30, 2016 and 2015, respectively. The increase of approximately $458,000 mainly
represents accrued license fees to MD Anderson for approximately $40,000, $37,500 for research performed by HPI, and approximately
$228,000 related to MD Anderson sponsored research.
General and administrative expense was
$924,041 and $184,344 for the three months ended September 30, 2016 and 2015, respectively. The expense increase of approximately
$740,000 was mainly attributable to additional payroll and related expenses of approximately $459,000 related to a full three months
of our Chief Financial Officer's, Chief Operating Officer's and Chief Executive Officer's salaries and compensation
for our Board of Directors. Also, included in this quarter's expense was $118,000 related to the severance of the former
Chief Financial Officer. The Company also incurred approximately $289,000 of expenses related to investor relations, audit and
accounting, and insurance costs.
Interest expense included expense accrued
on the Company's convertible promissory notes issued in 2015 and 2016 bearing interest at the rate of 8% per annum.
The Company's net loss for the three
months ended September 30, 2016 amounted to $1,432,079.
As of September 30, 2016, the Company had
$6,183,783 in cash. During the period from January 1, 2016 through May 2, 2016, the Company sold 234,296 common shares for $702,888.
On May 31, 2016, the Company completed its initial public offering, pursuant to which it sold 1,540,026 shares of common stock
at $6.00 per share for net proceeds of $8,464,183 after deducting underwriting discounts and commissions and direct offering expenses.
Net cash used in operating activities was
$2,596,647 for the nine months ended September 30, 2016 and mainly included payments made for payroll, travel, insurance and professional
fees to the Company's consultants, attorneys and accountants for services related to becoming a publicly traded company and
related filing fees, along with payments made to MD Anderson for license and maintenance fees. Additionally, prepayments were made
Net cash used in investing activities was
$109,793 for the nine months ended September 30, 2016 and primarily represents the cash paid to acquire Moleculin, LLC.
Net cash provided by financing activities
was $8,862,132 for the nine months ended September 30, 2016. The Company received $8,464,183 net proceeds from its IPO stock issuance,
$702,888 from issuance of common shares at $3 per share, and $165,000 from issuance of convertible notes. Net cash used in financing
activities included approximately $470,000 for payments of notes payable.
Restatement of the Unaudited Financial
Results for the Second Quarter Ended June 30, 2016
Today, the Company filed its restated unaudited
financial statements for the Second Quarter Ended June 30, 2016 with the Security and Exchange Commission ("SEC") on
The Company identified
the following non-cash errors due to an error in the accounting for the business combination of Moleculin, LLC. The impact of the
correction of the error was as follows:
1 - The net loss for the three and
six months ended June 30, 2016 was overstated by approximately $256,889 due to amortization of an intangible which was recorded
in error. Upon correction, the net loss for the period will be $738,727 and $1,070,968, respectively.
2 - A liability in the amount of
$750,000 should not have been reflected in the balance sheet as of June 30, 2016. Upon correction for this and item 1 above, the
total for Liabilities and Stockholders' Equity was $18,740,288.
3 - Intangibles were overstated by
$750,000 before the amortization mentioned above. Upon correction, total assets was $18,740,288.
About Moleculin Biotech, Inc.
Moleculin Biotech, Inc. is a preclinical and clinical-stage
pharmaceutical company focused on the development of anti-cancer drug candidates, some of which are based on discoveries made at
M.D. Anderson Cancer Center. Our lead product candidate is Annamycin, a Phase II clinical stage anthracycline for the treatment
of relapsed or refractory acute myeloid leukemia, more commonly referred to as AML. We also have two pre-clinical small molecule
portfolios, one of which is focused on the modulation of hard-to-target tumor cell signaling mechanisms and the recruitment of
the patient's own immune system. The other portfolio targets the metabolism of tumors.
For more information about the offering,
please visit http://www.moleculin.com
Forward-Looking Statements
Some of the statements in this release
are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange
Act of 1934 and the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. Forward-looking statements
in this press release include, without limitation, the strengthening of its license and IP positions relative to and the future
advancement and potential commercialization of WP1122 and WP1066, the ability to receive guidance from the FDA and successfully
submit an IND for and generate Phase II data from liposomal Annamycin, as well as the ability to increase the MTD of and improve
clinical outcomes with liposomal Annamycin. These statements relate to future events, future expectations, plans and prospects.
Although Moleculin Biotech believes that the expectations reflected in such forward-looking statements are reasonable as of the
date made, expectations may prove to have been materially different from the results expressed or implied by such forward-looking
statements. Moleculin Biotech has attempted to identify forward-looking statements by terminology including "believes,"
"estimates," "anticipates," "expects," "plans," "projects," "intends,"
"potential," "may," "could," ''might," "will," "should," "approximately"
or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. These statements
are only predictions and involve known and unknown risks, uncertainties, and other factors, including those discussed under the
heading "Risk Factors" in our Registration Statement on Form S-1 originally filed with the Securities and Exchange Commission
("SEC") on February 1, 2016, as amended (Registration No. 333-209323) and updated from time to time in its public filings
with the SEC. Any forward-looking statements contained in this release speak only as of its date. We undertake no obligation to
update any forward-looking statements contained in this release to reflect events or circumstances occurring after its date or
to reflect the occurrence of unanticipated events.
Chief Operating Officer
| Moleculin Biotech, Inc. |
| Balance Sheets |
| (Unaudited) |
| September 30, 2016 | December 31, 2015 | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 6,183,783 | $ | 28,091 | ||||
| Prepaid expenses | 244,869 | - | ||||||
| Total current assets | 6,428,652 | 28,091 | ||||||
| Long-Term Assets: | ||||||||
| Furniture and equipment, net of accumulated depreciation | 16,346 | - | ||||||
| Intangible assets, net of accumulated amortization | 11,128,790 | - | ||||||
| Total Assets | $ | 17,573,788 | $ | 28,091 | ||||
| Liabilities and Stockholders' Equity (Deficit) | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 944,997 | $ | 322,790 | ||||
| Accounts payable and accrued expenses-related party | 37,500 | - | ||||||
| Convertible notes payable | 297,656 | 450,000 | ||||||
| Total current liabilities | 1,280,153 | 772,790 | ||||||
| Long-term payable-related party | 50,000 | - | ||||||
| Total Liabilities | 1,330,153 | 772,790 | ||||||
| Stockholders' Equity (Deficit): | ||||||||
| Preferred stock, $0.001 par value; 5,000,000 authorized, no shares issued and outstanding | - | - | ||||||
| Common stock, $0.001 par value; 75,000,000 authorized, 12,054,813 and 6,661,000 shares issued and outstanding, respectively | 12,055 | 6,661 | ||||||
| Subscription receivable | (3,000 | ) | (3,000 | ) | ||||
| Additional paid-in capital | 19,485,987 | - | ||||||
| Accumulated deficit | (3,251,407 | ) | (748,360 | ) | ||||
| Total Stockholders' Equity (Deficit) | 16,243,635 | (744,699 | ) | |||||
| Total Liabilities and Stockholders' Equity (Deficit) | $ | 17,573,788 | $ | 28,091 |
| Moleculin Biotech, Inc. |
| Statement of Operations (Unaudited) |
| Nine Months Ended | From Inception Through | |||||||||||||||
| Three Months Ended September 30, | September 30, | September 30, | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Revenue | $ | - | $ | - | $ | - | $ | - | ||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 496,659 | 38,409 | 616,498 | 38,409 | ||||||||||||
| General and administrative | 924,041 | 184,344 | 1,847,613 | 184,344 | ||||||||||||
| Depreciation | 977 | - | 1,629 | - | ||||||||||||
| Total operating expense | 1,421,677 | 222,753 | 2,465,740 | 222,753 | ||||||||||||
| Loss from operations | (1,421,677 | ) | (222,753 | ) | (2,465,740 | ) | (222,753 | ) | ||||||||
| Other expense: | ||||||||||||||||
| Interest expense | (10,402 | ) | (1,562 | ) | (37,307 | ) | (1,562 | ) | ||||||||
| Net loss | $ | (1,432,079 | ) | $ | (224,315 | ) | $ | (2,503,047 | ) | $ | (224,315 | ) | ||||
| Net loss per common share - basic and diluted | $ | (0.12 | ) | $ | (0.05 | ) | $ | (0.28 | ) | $ | (0.05 | ) | ||||
| Weighted average common shares outstanding - basic and diluted | 11,579,239 | 4,320,015 | 9,066,804 | 4,320,015 |
| Moleculin Biotech, Inc. |
| Statements of Cash Flows |
| (Unaudited) |
| Nine Months Ended September 30, | From Inception Through September 30, | |||||||
| 2016 | 2015 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | (2,503,047 | ) | $ | (224,315 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | 1,629 | - | ||||||
| Amortization of intangible assets | 1,648,310 | - | ||||||
| Stock-based compensation | 208,939 | - | ||||||
| Shares issued for licenses used for research and development | - | 2,061 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses | (244,869 | ) | (23,000 | ) | ||||
| Accounts payable and accrued expenses | (146,799 | ) | 63,010 | |||||
| Accounts payable and accrued expenses - related parties | 87,500 | 19,584 | ||||||
| Net Cash Used in Operating Activities | (2,596,647 | ) | (162,660 | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Cash paid for purchase of fixed assets | (10,155 | ) | - | |||||
| Cash paid for Moleculin, LLC, net of cash acquired | (99,638 | ) | - | |||||
| Net Cash Used in Investing Activities | (109,793 | ) | - | |||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from notes payable | 165,000 | 250,000 | ||||||
| Payments on notes payable | (469,939 | ) | - | |||||
| Proceeds from sale of common stock, net of direct offering costs | 9,167,071 | - | ||||||
| Net Cash Provided by Financing Activities | 8,862,132 | 250,000 | ||||||
| Net change in cash and cash equivalents | 6,155,692 | 87,340 | ||||||
| Cash and cash equivalents, at beginning of period | 28,091 | - | ||||||
| Cash and cash equivalents, at end of period | $ | 6,183,783 | $ | 87,340 | ||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid for interest | $ | 47,950 | $ | - | ||||
| Cash paid for income taxes | $ | - | $ | - | ||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| Common stock issued to acquire Moleculin, LLC | $ | 9,773,586 | $ | - | ||||
| Common stock issued for conversion of debt | $ | 341,785 | $ | - | ||||
| Shares subscribed | $ | - | $ | 4,600 |