GridAI Technologies Corp 10-Q for FY2022 Q3

GridAI Technologies Corp. (GRDX)

10-Q 2022-11-14 For: 2022-09-30

Added on April 11, 2026

About this 10-Q

GridAI Technologies Corp filed this 10-Q on November 14, 2022, covering the quarter ended September 30, 2022 (FY2022 Q3).

Headline figures

Quarter ended September 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net income: $4.39M; compared with a net loss of $30.4M a year earlier
Diluted EPS: $2.60; compared with -$98.00 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	The 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	28

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36

Item 4.	Controls and Procedures	36

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	37

Item 1A.	Risk Factors	37

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39

Item 3.	Defaults Upon Senior Securities	39

Item 4.	Mine Safety Disclosures	39

Item 5.	Other Information	39

Item 6.	Exhibits	39

SIGNATURES


	September 30,
	2022		December 31,
	(unaudited)		2021
ASSETS

Current Assets:
Cash and cash equivalents	$	1,657,013	$	8,248,684
Other receivables		191,984		—
Prepaid expenses		561,459		1,176,268
Deferred offering costs		138,684		—
Total Current Assets		2,549,140		9,424,952

Property, equipment, and leasehold improvements, net		51,157		73,110

Other Assets:
Goodwill		1,714,787		1,911,705
Restricted cash		21,505		—
Operating lease right-of-use assets		274,516		336,197
Deposits		34,298		44,012
Total Other Assets		2,045,106		2,291,914
Total Assets	$	4,645,403	$	11,789,976

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities:
Accounts payable	$	3,582,988	$	2,707,731
Accrued expenses		272,268		393,253
Accrued dividend payable		763,556		465,361
Note payable		—		641,236
Operating lease liabilities		64,397		77,989
Payable related to acquisition - current		2,000,000		8,000,000
Other current liabilities		10,951		14,818
Total Current Liabilities		6,694,160		12,300,388

Non-current operating lease liabilities		231,292		311,138
Payable related to acquisition - long term		—		7,000,000
Total Liabilities		6,925,452		19,611,526

Commitments and Contingencies

Stockholders’ Deficit:
Common stock - Par value $0.0001 per share; 50,000,000 shares authorized; 2,307,008 and 495,194 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		231		50
Series B preferred stock- Par value $0.0001 per share; 5,194.81 shares designated; 631.34 and 662.25 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		—		—
Series C preferred stock- Par value $0.0001 per share; 57,000 shares designated; 0 shares issued and outstanding at September 30, 2022 and December 31, 2021		—		—
Series D preferred stock- Par value $0.0001 per share; 150 shares designated; 0 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		—		—
Series E preferred stock- Par value $0.0001 per share; 150 shares designated; 0 shares issued and outstanding at September 30, 2022 and December 31, 2021		—		—
Additional paid-in capital		163,722,141		147,306,582
Accumulated deficit		(164,547,700)		(153,904,047)
Accumulated other comprehensive loss		(1,454,721)		(1,224,135)
Total Stockholders’ Deficit		(2,280,049)		(7,821,550)
Total Liabilities and Stockholders’ Deficit	$	4,645,403	$	11,789,976


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Operating expenses:
Research and development expenses	$	791,067	$	3,052,791	$	8,674,480	$	11,216,616
Research and development (recovery) expenses- intellectual property acquired		(8,085,045)		21,325,527		(8,085,045)		21,325,527
General and administrative expenses		2,904,448		6,021,160		9,808,960		15,347,764
Total operating (recovery) expenses		(4,389,530)		30,399,478		10,398,395		47,889,907

Income (loss) from operations		4,389,530		(30,399,478)		(10,398,395)		(47,889,907)

Other income (expenses):
Interest expense		(863)		(742)		(9,686)		(8,840)
Interest income		2,664		—		3,729		—
Other (expense) income		—		(568)		(239,301)		1,032
Change in fair value of liability		—		—		—		532,353
Total other income (expenses)		1,801		(1,310)		(245,258)		524,545

Net income (loss)	$	4,391,331	$	(30,400,788)	$	(10,643,653)	$	(47,365,362)

Other comprehensive income (loss):
Foreign currency translation adjustment		(35,235)		(41,604)		(230,586)		(154,561)
Total comprehensive income (loss)	$	4,356,096	$	(30,442,392)	$	(10,874,239)	$	(47,519,923)

Net income (loss)	$	4,391,331	$	(30,400,788)	$	(10,643,653)	$	(47,365,362)
Deemed dividend on preferred stock issuances		—		—		—		(4,507,125)
Deemed dividend on preferred stock exchanges		—		—		—		(21,008,253)
Deemed dividend on warrant modifications		(47,300)		—		(47,300)		—
Preferred stock dividends		(110,278)		(118,089)		(298,195)		(349,132)
Net income (loss) applicable to common shareholders	$	4,233,753	$	(30,518,877)	$	(10,989,148)	$	(73,229,872)

Basic weighted average shares outstanding		1,601,415		311,411		952,794		253,118
Diluted weighted average shares outstanding		1,625,736		311,411		952,794		253,118
Net income (loss) per share - basic	$	2.64	$	(98.00)	$	(11.53)	$	(289.31)
Net income (loss) per share – diluted	$	2.60	$	(98.00)	$	(11.53)	$	(289.31)


☒	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 E Convertible			Series D Convertible			Series C Convertible			Series B Convertible						Additional				Other		Total
	Preferred Stock			Preferred Stock			Preferred Stock			Preferred Stock			Common Stock			Paid In		Accumulated		Comprehensive		Stockholders’
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Capital		Deficit		Loss		Deficit
Balance, July 1, 2022	—	$	—	—	$	—	—	$	—	631	$	—	756,660	$	76	$	156,168,578	$	(168,939,031)	$	(1,419,486)	$	(14,189,863)
Issuance of Series D preferred stock and warrants for cash, net of offering costs	—		—	150		—	—		—	—		—	—		—		178,336		—		—		178,336
Issuance of Series E preferred stock, net of offering costs	150		—	—		—	—		—	—		—	—		—		20,664		—		—		20,664
Issuance of common stock at-the-market for cash, net of offering costs	—		—	—		—	—		—	—		—	1,483,782		149		7,373,206		—		—		7,373,355
Issuance of common stock from the conversion of Series D preferred stock	—		—	(150)		—	—		—	—		—	33,332		3		(3)		—		—		—
Issuance of common stock from the conversion of Series E preferred stock	(150)		—	—		—	—		—	—		—	33,332		3		(3)		—		—		—
Deemed dividend of Series B preferred stock	—		—	—		—	—		—	—		—	—		—		(110,278)		—		—		(110,278)
Warrant modification	—		—	—		—	—		—	—		—	—		—		—		—		—		—
Deemed dividend on warrant modification	—		—	—		—	—		—	—		—	—		—		—		—		—		—
Conversion of Series B preferred shares into common stock	—		—	—		—	—		—	—		—	—		—		—		—		—		—
Effect of cancelled shares from the 30-for-1 reverse stock split	—		—	—		—	—		—	—		—	(98)		—		—		—		—		—
Stock-based compensation	—		—	—		—	—		—	—		—	—		—		91,641		—		—		91,641
Foreign currency translation adjustment	—		—	—		—	—		—	—		—	—		—		—		—		(35,235)		(35,235)
Net loss	—		—	—		—	—		—	—		—	—		—		—		4,391,331		—		4,391,331
Balance, September 30, 2022	—	$	—	—	$	—	—	$	—	631	$	—	2,307,008	$	231	$	163,722,141	$	(164,547,700)	$	(1,454,721)	$	(2,280,049)


			Fair Value Measured at Reporting Date
			Using
	Carrying
	Amount		Level 1		Level 2		Level 3		Fair Value
September 30, 2022 (unaudited):
Money market funds	$	505,179	$	505,179	$	—	$	—	$	505,179
Note payable		—		—		—		—		—

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
Total Patents	$	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		(196,918)
Balance on September 30, 2022 (unaudited)	$	1,714,787


		Weighted		Weighted
		Average		Average
	Number of	Exercise Price		Remaining
	Warrants	Per Share		Term in Years
Outstanding and exercisable on January 1, 2022	183,999	$	284.70	3.95
Issued	464,245		20.36	4.49
Expired	(4,279)		1,125.78	—
Exercised	(161,606)		0.30	4.42
Warrants outstanding and exercisable on September 30, 2022	482,359	$	90.19	4.07

Warrants outstanding and exercisable on January 1, 2021	83,687	$	366.00	4.04
Issued	133,114		233.03	4.11
Expired	(1,698)		1,080.16	—
Exercised	(31,712)		159.32	4.10
Warrants outstanding and exercisable on September 30, 2021	183,391	$	298.47	4.16


		Average		Remaining
	Number	Exercise		Contract	Intrinsic
	of Shares	Price		Life (Years)	Value
Outstanding at January 1, 2022	13,737	$	353.73	7.28	$	—
Granted	22,938		41.17	7.50		—
Canceled	(3,745)		355.14	—		—
Forfeited	(4,972)		120.20	—		—
Outstanding at September 30, 2022	27,958	$	138.63	8.45	$	—
Exercisable at September 30, 2022	13,740	$	215.59	7.75	$	—

Outstanding at January 1, 2021	13,567	$	373.80	7.94	$	—
Granted	5,841		258.30	10.00		—
Canceled	(4,482)		314.10	2.87		—
Outstanding at September 30, 2021	14,926	$	346.50	7.57	$	—
Exercisable at September 30, 2021	9,342	$	412.80	6.78	$	—


	2022		2021
Contractual term (in years)	6.50		10.00
Expected Volatility	90.92	%	88.71	%
Risk-free interest rate	1.12	%	1.29	%
Expected Dividend yield	0	%	0	%


	September 30,
	2022
Lease term and discount rate
Weighted-average remaining lease term (years)	3.9
Weighted-average discount rate	7.00	%


	September 30,
	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		(36,661)		(14,708)
Property, plant and equipment, net	$	51,157	$	73,110


	September 30,
	2022		December 31,
	(unaudited)		2021
Professional fees	$	205,932	$	15,000
Payroll and benefits		40,771		274,153
Consulting fees		25,565		104,100
Total accrued expenses	$	272,268	$	393,253


2022 (remainder of year)	$	20,563
2023		83,691
2024		86,202
2025		88,788
2026		60,593
Total lease payments		339,837
Less imputed interest		(44,148)
Present value of lease liabilities	$	295,689


	Nine Months Ended
	September 30,
	2022		2021
Net cash (used in) provided by:
Operating activities	$	(16,751,790)	$	(26,425,432)
Investing activities		—		(71,448)
Financing activities		10,215,292		27,690,638
Net (decrease) increase in cash, cash equivalents and restricted cash	$	(6,536,498)	$	1,193,758


	Three Months Ended				Nine Months Ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Net income (loss)	$	4,391,331	$	(30,400,788)	$	(10,643,653)	$	(47,365,362)

Basic weighted average shares outstanding		1,601,415		311,411		952,794		253,118
Convertible preferred stock		24,321		—		—		—
Diluted weighted average shares outstanding		1,625,736		311,411		952,794		253,118
Basic net income (loss) per share	$	2.64	$	(98.00)	$	(11.53)	$	(289.31)
Diluted net income (loss) per share	$	2.60	$	(98.00)	$	(11.53)	$	(289.31)


	Three Months Ended
	September 30,				Increase
	2022		2021		(decrease)
Operating expenses:
Research and development expenses	$	791,067	$	3,052,791	$	(2,261,724)
Research and development (recovery) expenses - intellectual property acquired		(8,085,045)		21,325,527		(29,410,572)
General and administrative expenses		2,904,448		6,021,160		(3,116,712)
Total operating (recovery) expenses		(4,389,530)		30,399,478		(34,789,008)
Other expenses		(1,801)		1,310		(3,111)
Net (income) loss	$	(4,391,331)	$	30,400,788	$	(34,792,119)


Exhibit No.		Description
3.1		Amended and Restated Certificate of Incorporation of First Wave BioPharma, Inc., as amended to date (incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement on Form S-1 filed with the SEC on September 14, 2022).
3.2		Amended and Restated Bylaws of First Wave BioPharma, Inc., as amended to date (incorporated by reference to Exhibit 3.2 of the Company’s Registration Statement on Form S-3 filed with the SEC on July 28, 2022).
4.1		Form of Warrant (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the SEC on July 18, 2022).
4.2		Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed with the SEC on July 18, 2022).
10.1		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 July 18, 2022).
10.2		Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on July 18, 2022).
10.3		Form of Term Sheet (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on July 29, 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


	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: November 14, 2022		(Principal Financial and Accounting Officer)


Date: November 14, 2022	/s/ James Sapirstein
	James Sapirstein
	Chief Executive Officer
	(Principal Executive Officer)


Date: November 14, 2022	/s/ Sarah Romano
	Sarah Romano
	Chief Financial Officer
	(Principal Financial and Accounting Officer)


Date: November 14, 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)