Edesa Biotech, Inc 8-K, filed May 15, 2020
Edesa Biotech, Inc. (EDSA)
8-K
2020-05-15
For: 2020-05-15
View Original
Added on
April 09, 2026
About this 8-K
Edesa Biotech, Inc filed this 8-K on May 15, 2020.
Items reported
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
UNITED
STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
FORM
8-K
CURRENT
REPORT
PURSUANT TO
SECTION 13 OR 15(d) OF
THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report
(Date of earliest event reported): May 15, 2020
Edesa Biotech,
Inc.
(Exact Name of
Registrant as Specified in its Charter)
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British Columbia, Canada
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001-37619
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N/A
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(State or Other Jurisdiction of
Incorporation)
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(Commission File
Number)
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(IRS Employer Identification
No.)
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100 Spy Court
Markham, Ontario, Canada L3R 5H6
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(Address of Principal Executive
Offices)
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(289) 800-9600
Registrant’s telephone
number, including area code
N/A
(Former name or former
address, if changed since last report)
Check the appropriate box below if
the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following
provisions (see
General Instruction A.2. below):
☐ Written communications pursuant to
Rule 425 under the Securities Act (17 CFR
230.425)
☐ Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
☐ Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
☐ Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Securities registered pursuant to
Section 12(b) of the Act:
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Title of each
class
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Trading
Symbol(s)
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Name of exchange
on which registered
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Common Shares
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EDSA
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Indicate by check mark whether the registrant is
an emerging growth company as defined in Rule 405 of the Securities
Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☒
Item 2.02 Results of Operations and
Financial Condition.
On May 15, 2020, Edesa Biotech,
Inc. (the “company”) issued a press release announcing
its financial results for the three-month and six-month periods
ended March 31, 2020 (the “Earnings Release”). The full
text of the Earnings Release is attached hereto as Exhibit 99.1.
The information furnished herein and therein shall not be deemed
“filed” for purposes of Section 18 of the Securities
Exchange Act of 1934 (the “Exchange Act”) or otherwise
subject to the liabilities of that Section, or incorporated by
reference in any filing under the Exchange Act or the Securities
Act of 1933, as amended, except as shall be expressly set forth by
specific reference in such a filing.
Item 9.01 Financial Statements and
Exhibits.
(d) Exhibits
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Exhibit No.
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Description
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Press release issued by Edesa
Biotech, Inc. dated May 15, 2020.
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2
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Edesa Biotech,
Inc.
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Date: May 15,
2020
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By:
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/s/
Kathi Niffenegger
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Name:
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Kathi
Niffenegger
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Title:
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Chief Financial
Officer
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3
Exhibit 99.1
Edesa Biotech Reports Fiscal 2nd Quarter 2020 Results
TORONTO,
ON / ACCESSWIRE / May 15, 2020 / Edesa Biotech, Inc. (Nasdaq:
EDSA), a clinical-stage biopharmaceutical company, today reported
financial results for the three and six months ended March 31, 2020
and provided an update on its business.
Edesa
reported that two new biologic drug candidates acquired last month
are rapidly being integrated into the company’s development
pipeline. Known as EB05 and EB06, these TLR4 and CXCL10 antagonists
are believed to have application in a broad range of therapeutic
areas, including potential treatments for COVID-19 pneumonia and
acute respiratory distress syndrome (ARDS). Since the lead drug has
already been manufactured, the company believes that with
government support it could quickly begin clinical studies in
COVID-19 patients.
Dr. Par
Nijhawan, Chief Executive Officer of Edesa, said that the company
is applying its expertise in immune modulation and inflammation
therapies toward finding solutions for hospitalized COVID-19
patients. “We believe there is compelling data to prioritize
this project, and we are optimistic that modulating these well
understood TLR4 and CXCL10 signaling pathways could reduce the
number of ICU patients and intubation/ventilation procedures, and
save lives,” he said.
Dr.
Nijhawan noted that ARDS, a respiratory condition which stops
oxygen from reaching the bloodstream, remains a serious unmet
medical need. “Even excluding COVID-19 patients, there are
approximately 3 million cases of ARDS each year globally despite
the widespread use of prophylactic vaccines and herd
immunity,” he said.
During
the quarter, Edesa also reported that the company took steps to
simplify enrollment and patient care for its ongoing Phase 2b
clinical study of EB01 for the treatment of allergic contact
dermatitis. To support current social distancing requirements, the
trial protocol now allows for fewer in-person office visits and
provides guidelines for remote telehealth appointments, among other
procedural updates. The company is closely monitoring the impacts
of governmental directives related to COVID-19 on its investigation
centers and patient enrollment.
Edesa’s
Chief Financial Officer, Kathi Niffenegger, reported that there
have been no significant changes to the company’s internal
operations related to the pandemic, and that Edesa staff have been
working remotely since early March. “Expenditures have
continued to track in line with management’s plans and our
clinical activities. We strengthened our balance sheet in January
and plan to continue to evaluate our options for non-dilutive grant
funding to accelerate the advancement of our newly acquired drug
candidates.”
Financial Results for the Three Months Ended March 31,
2020*
Total revenues for the three months ended March 31, 2020 were $0.11
million, reflecting sale of product inventory obtained in the
reverse acquisition completed in June 2019. There were no revenues
for the three months ended March 31, 2019.
1
Total operating expenses increased by $1.09 million to $1.63
million for the three months ended March 31, 2020 compared to $0.54
million for the same period last year:
●
Cost
of sales and services was $0.01 million for the three months ended
March 31, 2020, reflecting the sales of product inventory obtained
in the reverse acquisition. There were no product sales in the same
period last year.
●
Research
and development expenses increased by $0.39 million to $0.50
million for the three months ended March 31, 2020 compared to $0.11
million for the same period last year. The increase was primarily
due to increased external research expenses related to the
initiation of clinical studies for the company’s EB01 drug
product candidate as well as increased salary and related personnel
expenses.
●
General
and administrative expenses increased by $0.68 million to $1.11
million for the three months ended March 31, 2020 compared to $0.43
million for the same period last year. The increase was primarily
due to increased salary and related personnel expenses, increased
legal and professional fees, and public company
expenses.
For the three months ended March 31, 2020, Edesa reported a net
loss of $1.49 million, or $0.17 per basic share, compared to a net
loss of $0.53 million, or $0.16 per basic share, for the three
months ended March 31, 2019.
Financial Results for the Six Months Ended March 31,
2020*
Total revenues for the six months ended March 31, 2020 were $0.22
million, reflecting sale of product inventory obtained in the
reverse acquisition completed in June 2019. There were no revenues
for the six months ended March 31, 2019.
Total operating expenses increased by $1.89 million to $2.84
million for the six months ended March 31, 2020 compared to $0.95
million for the same period last year:
●
Cost
of sales and services was $0.01 million for the six months ended
March 31, 2020, reflecting the sales of product inventory obtained
in the reverse acquisition. There were no product sales in the same
period last year.
●
Research
and development expenses increased by $0.66 million to $1.03
million for the six months ended March 31, 2020 compared to $0.37
million for the same period last year. The increase was primarily
due to increased external research expenses related to the
initiation of clinical studies for the company’s EB01 drug
product candidate as well as increased salary and related personnel
expenses.
●
General
and administrative expenses increased by $1.22 million to $1.80
million for the six months ended March 31, 2020 compared to $0.58
million for the same period last year. The increase was primarily
due to increased salary and related personnel expenses, increased
legal and professional fees, and public company
expenses.
For the six months ended March 31, 2020, Edesa reported a net loss
of $2.58 million, or $0.32 per basic share, compared to a net loss
of $0.89 million, or $0.28 per basic share, for the six months
ended March 31, 2019.
* Financial results for any periods ended prior to June 7, 2019
reflect the financials of the company’s subsidiary Edesa
Biotech Research, Inc. on a standalone basis.
2
Working Capital
At March 31, 2020, the company had working capital of $6.85
million. Cash and cash equivalents totaled $6.99
million.
About Edesa Biotech, Inc.
Edesa Biotech, Inc. (Nasdaq: EDSA) is a
clinical-stage biopharmaceutical company focused on efficiently
developing innovative treatments that address significant unmet
medical needs. Edesa’s lead product candidate, EB01, is a
novel non-steroidal anti-inflammatory molecule (sPLA2 inhibitor)
for the treatment of chronic allergic contact dermatitis which has
demonstrated statistically significant improvements in multiple
clinical studies. A Phase 2b clinical study of EB01 was initiated
in October 2019. Edesa also intends to expand the utility of its
sPLA2 inhibitor technology, which forms the basis for EB01, across
multiple indications and expand its portfolio with assets that can
drive long-term growth opportunities. The company is based in
Markham, Ontario, Canada, with U.S. offices in Southern California.
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Edesa Forward-Looking Statements
This press release may contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements may be identified by the use of
words such as "anticipate," "believe," "plan," "estimate,"
"expect," "intend," "may," "will," "would," "could," "should,"
"might," "potential," or "continue" and variations or similar
expressions, including statements related to: the company’s
plans to seek non-dilutive grant funding and initiate new clinical
studies for ARDS in COVID-19 patients. Readers should not unduly
rely on these forward-looking statements, which are not a guarantee
of future performance. There can be no assurance that
forward-looking statements will prove to be accurate, as all such
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause actual results or
future events to differ materially from the forward-looking
statements. Such risks include: the ability of Edesa to obtain
regulatory approval for or successfully commercialize any of its
product candidates, the risk that access to sufficient capital to
fund Edesa’s operations may not be available or may be
available on terms that are not commercially favorable to Edesa,
the risk that Edesa’s product candidates may not be effective
against the diseases tested in its clinical trials, the risk that
Edesa fails to comply with the terms of license agreements with
third parties and as a result loses the right to use key
intellectual property in its business, Edesa’s ability to
protect its intellectual property, the timing and success of
submission, acceptance and approval of regulatory filings, and the
impacts of public health crises, such as COVID-19. Many of these
factors that will determine actual results are beyond the company's
ability to control or predict. For a discussion of further risks
and uncertainties related to Edesa's business, please refer to
Edesa’s public company reports filed with the U.S. Securities
and Exchange Commission and the British Columbia Securities
Commission. All forward-looking statements are made as of the date
hereof and are subject to change. Except as required by law, Edesa
assumes no obligation to update such statements.
Contacts
Gary Koppenjan
Edesa Biotech, Inc.
(805) 488-2800 ext. 150
investors@edesabiotech.com
3
Condensed Interim Consolidated Statements of
Operations
(Unaudited)
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Three Months
Ended
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Six Months
Ended
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March 31, 2020
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March 31, 2019
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March 31, 2020
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March 31, 2019
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Total Revenues
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$110,516
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$-
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$218,316
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$-
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Expenses:
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Cost
of sales and services
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10,037
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-
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13,815
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-
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Research
and development
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502,814
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111,702
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1,030,812
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369,093
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General
and administrative
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1,113,917
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429,076
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1,795,623
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577,426
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1,626,768
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540,778
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2,840,250
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946,519
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Loss from Operations
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(1,516,252)
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(540,778)
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(2,621,934)
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(946,519)
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Other Income
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26,616
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11,948
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38,765
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52,840
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Income tax expense
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-
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-
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800
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-
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Net Loss
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(1,489,636)
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(528,830)
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(2,583,969)
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(893,679)
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Exchange
differences on translation
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(39,908)
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73,253
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(21,794)
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91,013
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Net Loss and Comprehensive Loss
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$(1,529,544)
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$(455,577)
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$(2,605,763)
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$(802,666)
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Weighted
average number of common shares outstanding
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8,740,065
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3,239,902
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8,118,891
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3,239,902
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Loss per share - basic and diluted
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$(0.17)
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$(0.16)
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$(0.32)
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$(0.28)
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4
Condensed Interim Consolidated Balance Sheets
(Unaudited)
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March
31,
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September
30,
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2020
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2019
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Assets:
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Cash and cash
equivalents
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$6,989,930
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$5,030,583
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Other current
assets
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436,092
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614,123
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Operating lease
right-of-use assets
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181,492
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-
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Property and
equipment, net
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25,110
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73,058
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Total
Assets
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$7,632,624
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$5,717,764
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Liabilities
and Shareholders' Equity:
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Current
liabilities
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$578,938
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$461,634
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Noncurrent
liabilities
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122,743
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-
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Shareholders'
equity
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6,930,943
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5,256,130
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Total
Liabilities and Shareholders' Equity
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$7,632,624
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$5,717,764
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5
Condensed Interim Consolidated Statements of Cash
Flows
(Unaudited)
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Six Months
Ended
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March 31, 2020
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March 31, 2019
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Cash flows from operating activities:
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Net
loss
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$(2,583,969)
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$(893,679)
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Adjustments
for non-cash items
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432,400
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25,796
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Change
in working capital items
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191,410
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86,655
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Net cash used in operating activities
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(1,960,159)
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(781,228)
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Net cash provided by (used in) investing activities
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42,359
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(1,504)
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Net cash provided by financing activities
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3,891,801
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-
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Effect
of exchange rate changes on cash and cash equivalents
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(14,654)
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94,643
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Net
change in cash and cash equivalents
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1,959,347
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(688,089)
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Cash
and cash equivalents, beginning of period
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5,030,583
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3,730,230
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Cash and cash equivalents, end of period
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$6,989,930
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$3,042,141
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6