GridAI Technologies Corp 10-Q for FY2022 Q1

GridAI Technologies Corp. (GRDX)

10-Q 2022-05-23 For: 2022-03-31

Added on April 11, 2026

About this 10-Q

GridAI Technologies Corp filed this 10-Q on May 23, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $9.63M; compared with a net loss of $7.69M a year earlier
Diluted EPS: -$0.66; compared with -$5.42 a year earlier

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Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common stock, par value $0.0001 per share	FWBI	Nasdaq Capital Market


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐


		Page

PART I. FINANCIAL INFORMATION

Item 1.	Unaudited Condensed Consolidated Financial Statements	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	31

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	33

Item 1A.	Risk Factors	33

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 3.	Defaults Upon Senior Securities	35

Item 4.	Mine Safety Disclosures	35

Item 5.	Other Information	35

Item 6.	Exhibits	36

SIGNATURES


	March 31,
	2022		December 31,
	(unaudited)		2021
ASSETS

Current Assets:
Cash and cash equivalents	$	5,694,988	$	8,248,684
Other receivables		28,055		—
Prepaid expenses		827,128		1,176,268
Total Current Assets		6,550,171		9,424,952

Property, equipment, and leasehold improvements, net		65,793		73,110

Other Assets:
Goodwill		1,862,069		1,911,705
Operating lease right-of-use assets		313,009		336,197
Deposits		34,397		44,012
Total Other Assets		2,209,475		2,291,914
Total Assets	$	8,825,439	$	11,789,976

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable	$	3,449,928	$	2,707,731
Accrued expenses		717,514		393,253
Accrued dividend payable		556,153		465,361
Note payable		402,766		641,236
Operating lease liabilities		70,784		77,989
Payable related to acquisition - current		9,000,000		8,000,000
Other current liabilities		18,575		14,818
Total Current Liabilities		14,215,720		12,300,388

Non-current operating lease liabilities		264,460		311,138
Payable related to acquisition - long term		3,585,044		7,000,000
Total Liabilities		18,065,224		19,611,526

Commitments and Contingencies

Stockholders' Deficit:
Common stock - Par value $0.0001 per share; 50,000,000 shares authorized; 21,548,835 and 14,855,848 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively		2,154		1,485
Series B preferred stock- Par value $0.0001 per share; 5,194.81 shares authorized; 645.21 and 662.25 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively		—		—
Series C preferred stock- Par value $0.0001 per share; 57,000 shares authorized; 0 shares issued and outstanding at March 31, 2022 and December 31, 2021		—		—
Additional paid-in capital		155,571,487		147,305,147
Accumulated deficit		(163,530,886)		(153,904,047)
Accumulated other comprehensive loss		(1,282,540)		(1,224,135)
Total Stockholders' Deficit		(9,239,785)		(7,821,550)
Total Liabilities and Stockholders' Deficit	$	8,825,439	$	11,789,976


	Three Months Ended
	March 31,
	2022		2021
Operating expenses:
Research and development expenses	$	4,976,517	$	2,516,027
General and administrative expenses		4,405,555		5,697,514
Total operating expenses		9,382,072		8,213,541

Loss from operations		(9,382,072)		(8,213,541)

Other (expense) income:
Interest expense		(5,605)		(5,144)
Interest income		139		403
Other expense		(239,301)		—
Change in fair value of liability		—		532,653
Total other (expense) income		(244,767)		527,912

Net loss	$	(9,626,839)	$	(7,685,629)

Other comprehensive loss:
Foreign currency translation adjustment		(58,405)		(134,797)
Total comprehensive loss	$	(9,685,244)	$	(7,820,426)

Net loss	$	(9,626,839)	$	(7,685,629)
Deemed dividend on preferred stock		—		(4,507,125)
Deemed dividend on preferred stock exchanges		—		(17,584,048)
Deemed dividend on warrant modification		(594,975)		—
Preferred stock dividends		(90,792)		(204,382)
Net loss applicable to common shareholders	$	(10,312,606)	$	(29,981,184)

Basic and diluted weighted average shares outstanding		15,544,679		5,534,813

Loss per share - basic and diluted	$	(0.66)	$	(5.42)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


											Accumulated
	Series B Convertible						Additional				Other		Total
	Preferred Stock			Common Stock			Paid In		Accumulated		Comprehensive		Stockholders'
	Shares	Amount		Shares	Amount		Capital		Deficit		Loss		Deficit
Balance, January 1, 2022	662	$	—	14,855,848	$	1,485	$	147,305,147	$	(153,904,047)	$	(1,224,135)	$	(7,821,550)
Issuance of common stock, pre-funded warrants and warrants in registered direct offering, net of issuance costs	—		—	1,650,000		165		7,971,926		—		—		7,972,091
Exercise of pre-funded warrants into common stock	—		—	4,848,195		485		47,997		—		—		48,482
Deemed dividend of Series B preferred stock	—		—	—		—		(90,792)		—		—		(90,792)
Warrant modification								594,975						594,975
Deemed dividend on warrant modification								(594,975)						(594,975)
Conversion of Series B preferred shares into common stock	(17)		—	104,735		10		(10)		—		—		—
Common stock issued to consultants	—		—	90,057		9		118,990		—		—		118,999
Stock-based compensation	—		—	—		—		218,229		—		—		218,229
Foreign currency translation adjustment	—		—	—		—		—		—		(58,405)		(58,405)
Net loss	—		—	—		—		—		(9,626,839)		—		(9,626,839)
Balance, March 31, 2022	645	$	—	21,548,835	$	2,154	$	155,571,487	$	(163,530,886)	$	(1,282,540)	$	(9,239,785)


														Accumulated
	Series C Convertible			Series B Convertible						Additional				Other		Total
	Preferred Stock			Preferred Stock			Common Stock			Paid In		Accumulated		Comprehensive		Stockholders'
	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Deficit		Loss		Deficit
Balance, January 1, 2021	—	$	—	2,774	$	—	3,115,031	$	3,115	$	93,834,936	$	(95,366,198)	$	(1,112,546)	$	(2,640,693)
Issuance of Series C preferred stock and warrants for cash, net of offering costs	10,670		—	—		—	—		—		7,105,167		—		—		7,105,167
Issuance of Series C preferred stock to settle liability arising from acquisition	3,290		—	—		—	—		—		2,467,648		—		—		2,467,648
Beneficial conversion feature of Series C preferred stock	—		—	—		—	—		—		4,507,125		—		—		4,507,125
Deemed dividend of Series C preferred stock	—		—	—		—	—		—		(4,507,125)		—		—		(4,507,125)
Issuance of Series C preferred stock upon exchange of Series B preferred stock	13,500		—	(1,306)		—	—		—		(1,009)		—		—		(1,009)
Warrants issued in connection with exchange of Series B preferred stock	—		—	—		—	—		—		17,585,057		—		—		17,585,057
Deemed dividend of Series B preferred stock	—		—	—		—	—		—		(17,584,048)		—		—		(17,584,048)
Common stock issued upon conversion of Series B preferred stock	—		—	(259)		—	258,278		258		(258)		—		—		—
Dividends on preferred stock	—		—	—		—	—		—		(204,382)		—		—		(204,382)
Common stock and pre-funded warrants issued upon conversion of Series C preferred stock	(27,460)		—	—		—	2,561,544		2,562		(2,559)		—		—		3
Issuance of common stock, pre-funded warrants and warrants for cash, net of offering costs	—		—	—		—	580,000		580		9,058,710		—		—		9,059,290
Common stock issued upon exercise of warrants	—		—	—		—	912,807		913		4,622,929		—		—		4,623,842
Common stock and warrants issued to consultants	—		—	—		—	57,530		58		944,441		—		—		944,499
Issuance of common stock in connection with settlement with former investment bank	—		—	—		—	7,500		7		94,492		—		—		94,499
Stock-based compensation	—		—	—		—	—		—		772,240		—		—		772,240
Foreign currency translation adjustment	—		—	—		—	—		—		—		—		(134,797)		(134,797)
Net loss	—		—	—		—	—		—		—		(7,685,629)		—		(7,685,629)
Balance, March 31, 2021	—	$	—	1,209	$	—	7,492,690	$	7,493	$	118,693,364	$	(103,051,827)	$	(1,247,343)	$	14,401,687


	Three Months Ended March 31,
	2022		2021
Cash flows from operating activities:
Net loss	$	(9,626,839)	$	(7,685,629)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		7,317		1,021
Amortization		—		131,887
Change in right-of-use assets		23,188		(4,855)
Stock-based compensation		218,229		772,240
Common stock and warrants granted to consultants		118,999		1,038,998
Changes in assets and liabilities:
Other receivables		(28,055)		17,592
Prepaid expenses		349,140		613,076
Lease liabilities		(53,883)		11,654
Deposits		9,615		(1,356)
Accounts payable and accrued expenses		1,066,458		53,938
Accrued dividends payable		—		204,382
Other liabilities		3,757		(226,342)
Net cash used in operating activities		(7,912,074)		(5,073,394)

Cash flows from financing activities:
Proceeds from issuance of preferred stock, net		—		7,105,167
Proceeds from issuance of common stock, net		7,972,091		9,059,290
Proceeds from exercise of warrants		48,482		4,623,842
Payment made related to license agreement		—		(9,532,353)
Payment made related to acquisition agreement		(2,414,956)		—
Repayments of note payable		(238,470)		(205,323)
Net cash provided by financing activities		5,367,147		11,050,623

Net (decrease) increase in cash		(2,544,927)		5,977,229

Effect of exchange rate changes on cash		(8,769)		(13,738)

Cash and cash equivalents, beginning balance		8,248,684		6,062,141
Cash and cash equivalents, ending balance	$	5,694,988	$	12,025,632

Supplemental disclosures of cash flow information:
Cash paid for interest	$	—	$	5,144

Non-cash investing and financing activities:
Deemed dividend on preferred stock issuances	$	—	$	(4,507,125)
Deemed dividend on preferred stock exchanges	$	—	$	(17,584,048)
Deemed dividend on warrant modification	$	(594,975)	$	—
Accrued dividends on preferred stock	$	(90,792)	$	(204,382)
Common stock issued upon conversion of preferred stock	$	(10)	$	—
Issuance of Series C preferred stock to settle liability arising from acquisition	$	—	$	2,467,648


			Fair Value Measured at Reporting Date
			Using
	Carrying
	Amount		Level 1		Level 2		Level 3		Fair Value
March 31, 2022 (unaudited):
Money market funds	$	501,546	$	501,546	$	—	$	—	$	501,546
Note payable		402,766		—		402,766		—		402,766

December 31, 2021:
Money market funds		501,607		501,607		—		—		501,607
Note payable	$	641,236	$	—	$	641,236	$	—	$	641,236


Common stock issued at signing to Mayoly	$	1,740,959
Due to Mayoly at December 31, 2019		449,280
Due to Mayoly at December 31, 2020		393,120
Assumed Mayoly liabilities and forgiveness of Mayoly debt		1,219,386
	$	3,802,745


	Goodwill
Balance on January 1, 2021	$	2,054,048
Foreign currency translation		(142,343)
Balance on December 31, 2021		1,911,705
Foreign currency translation		(49,636)
Balance on March 31, 2022 (unaudited)	$	1,862,069


		Weighted		Weighted
		Average		Average
	Number of	Exercise Price		Remaining
	Warrants	Per Share		Term in Years
Outstanding and exercisable on January 1, 2022	5,527,390	$	9.49	3.95
Issued	11,841,016		0.76	4.92
Expired	(7,366)		49.71	—
Exercised	(4,848,195)		0.01	4.92
Warrants outstanding and exercisable on March 31, 2022	12,512,845	$	4.88	4.39

Warrants outstanding and exercisable on January 1, 2021	2,517,722	$	12.20	4.04
Issued	3,358,519		7.75	5.12
Expired	(2,423)		60.90	—
Exercised	(919,752)		5.22	2.34
Warrants outstanding and exercisable on March 31, 2021	4,954,066	$	10.45	4.55


		Average		Remaining
	Number	Exercise		Contract	Intrinsic
	of Shares	Price		Life (Years)	Value
Outstanding at January 1, 2022	439,192	$	11.58	7.28	$	—
Granted	678,392		1.39	9.11		—
Canceled	(2,646)		9.68	—		—
Forfeited	(74,267)		3.97	—		—
Outstanding at March 31, 2022	1,040,671	$	5.49	8.67	$	—
Exercisable at March 31, 2022	380,559	$	10.60	7.15	$	—

Outstanding at January 1, 2021	407,029	$	13.80	7.94	$	—
Granted	34,365		10.08	10.00		—
Canceled	(13,550)		24.46	2.87		—
Outstanding at March 31, 2021	427,844	$	11.89	7.93	$	1,599,166
Exercisable at March 31, 2021	222,156	$	14.80	6.67	$	637,269


	March 31,
	2022		December 31,
	(unaudited)		2021
Computer equipment and software	$	11,540	$	11,540
Office equipment		48,278		48,278
Leasehold improvements		28,000		28,000
Total property, plant, and equipment		87,818		87,818
Less accumulated depreciation		(22,025)		(14,708)
Property, plant and equipment, net	$	65,793	$	73,110


	March 31,
	2022		December 31,
	(unaudited)		2021
Professional fees	$	443,030	$	15,000
Clinical trials		147,842		—
Consulting fees		109,260		104,100
Payroll and benefits		17,382		274,153
Total accrued expenses	$	717,514	$	393,253


	2022		2021
Contractual term (in years)	10		10
Expected Volatility	90.92	%	84.89	%
Risk-free interest rate	1.11	%	1.12	%
Expected Dividend yield	0	%	0	%


	March 31,
	2022
Lease term and discount rate
Weighted-average remaining lease term (years)	4.3
Weighted-average discount rate	7.94	%


2022 (remainder of year)	$	61,290
2023		83,691
2024		86,202
2025		88,788
Thereafter		60,593
Total lease payments		380,564
Less imputed interest		(45,320)
Present value of lease liabilities	$	335,244


	March 31, 2022	March 31, 2021
	(unaudited)	(unaudited)
Common stock warrants	12,512,845	4,954,066
Stock options	1,040,671	427,844
Convertible preferred stock (1)	717,408	1,236,055
Total shares of common stock issuable	14,270,924	6,617,965


	Three Months Ended
	March 31,				Increase
	2022		2021		(decrease)
Operating expenses:
Research and development expenses	$	4,976,517	$	2,516,027	$	2,460,490
General and administrative expenses		4,405,555		5,697,514		(1,291,959)
Total operating expenses		9,382,072		8,213,541		1,168,531
Other expenses (income)		244,767		(527,912)		772,679
Net loss	$	9,626,839	$	7,685,629	$	1,941,210


Exhibit No.		Description
3.1		Amended and Restated Certificate of Incorporation of First Wave BioPharma, Inc., as amended (incorporated by reference to Exhibit 3.1 of the Company’s Annual Report on Form 10-K/A filed with the SEC on May 10, 2022).
4.1		Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the SEC on March 1, 2022).
4.2		Form of Series C Warrant (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed with the SEC on March 1, 2022).
4.3		Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.3 of the Company’s Current Report on Form 8-K filed with the SEC on March 1, 2022).
4.4		Form of Warrant Amendment Agreement (incorporated by reference to Exhibit 4.4 of the Company’s Current Report on Form 8-K filed with the SEC on March 1, 2022).
10.1		Form of Waiver (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on February 7, 2022).
10.2†		Employment Agreement by and between First Wave BioPharma, Inc. and Sarah Romano, dated February 14, 2022 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on February 17, 2022).
10.3		Form of Purchase Agreement (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on March 1, 2022).
31.1*		Certification of the Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of the Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of the Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL Document and included in Exhibit 101)


	FIRST WAVE BIOPHARMA, INC.

	By	/s/ James Sapirstein
		James Sapirstein
		President, Chief Executive Officer and Chairman
		(Principal Executive Officer)


	By	/s/ Sarah Romano
		Sarah Romano
		Chief Financial Officer
Date: May 23, 2022		(Principal Financial and Accounting Officer)

Date: May 23, 2022	/s/ James Sapirstein
	James Sapirstein
	Chief Executive Officer
	(Principal Executive Officer)

Date: May 23, 2022	/s/ Sarah Romano
	Sarah Romano
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

Date: May 23, 2022	/s/ James Sapirstein
	James Sapirstein
	President and Chief Executive Officer
	(Principal Executive Officer)

	/s/ Sarah Romano
	Sarah Romano
	Chief Financial Officer
	(Principal Financial and Accounting Officer)