MNOV 10-Q

Medicinova Inc (MNOV)

10-Q 2021-05-13 For: 2021-03-31

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Added on April 06, 2026

Delaware		33-0927979
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

4275 Executive Square, Suite 300 La Jolla, CA		92037
(Address of Principal Executive Offices)		(Zip Code)


Common Stock, $0.001 par value	MNOV	The Nasdaq Stock Market LLC
(Title of each class)	(Trading symbol(s))	(Name of each exchange on which registered)

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒


	•	The widespread outbreak of an illness or any other communicable disease, such as COVID-19, or any other public health crisis, could adversely affect our business, results of operations and financial condition;
	•	Inability to raise additional capital if needed;
	•	Inability to generate revenues from product sales to continue business operations;
	•	Inability to develop and commercialize our product candidates;
	•	Failure or delay in completing clinical trials or obtaining Food and Drug Administration or foreign regulatory approval for our product candidates in a timely manner;
	•	Unsuccessful clinical trials stemming from clinical trial designs, failure to enroll a sufficient number of patients, undesirable side effects and other safety concerns;
	•	Inability to demonstrate sufficient efficacy of product candidates;
	•	Reliance on the success of our MN-166 (ibudilast) and MN-001 (tipelukast) product candidates;
	•	Delays in commencement or completion of clinical trials or suspension or termination of clinical trials;
	•	Loss of our licensed rights to develop and commercialize a product candidate as a result of the termination of the underlying licensing agreement;
	•	Competitors may develop products rendering our product candidates obsolete and noncompetitive;
	•	Inability to successfully attract partners and enter into collaborations on acceptable terms;
	•	Dependence on third parties to conduct clinical trials and to manufacture product candidates;
	•	Dependence on third parties to market and distribute products;
	•	Our product candidates, if approved, may not gain market acceptance or obtain adequate coverage for third party reimbursement;
	•	Disputes or other developments concerning our intellectual property rights;
	•	Actual and anticipated fluctuations in our quarterly or annual operating results;
	•	Price and volume fluctuations in the overall stock markets;
	•	Litigation or public concern about the safety of our potential products;
	•	International trade or foreign exchange restrictions, increased tariffs, foreign currency exchange;
	•	High quality material for our products may become difficult to obtain or expensive;
	•	Strict government regulations on our business;
	•	Regulations governing the production or marketing of our product candidates;
	•	Loss of, or inability to attract, key personnel; and
	•	Economic, political, foreign exchange and other risks associated with international operations.

PART I. FINANCIAL INFORMATION		4

ITEM 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)	4
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	14
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	18
ITEM 4.	CONTROLS AND PROCEDURES	18

PART II. OTHER INFORMATION		19

ITEM 1.	LEGAL PROCEEDINGS	19
ITEM 1A.	RISK FACTORS	19
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	19
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	19
ITEM 4.	MINE SAFETY DISCLOSURES	19
ITEM 5.	OTHER INFORMATION	19
ITEM 6.	EXHIBITS	19

SIGNATURES		20

	March 31,			December 31,
	2021			2020
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	76,301,840		$	60,036,763
Accounts receivable		4,000,000			—
Prepaid expenses and other current assets		1,166,282			680,171
Total current assets		81,468,122			60,716,934
Goodwill		9,600,240			9,600,240
In-process research and development		4,800,000			4,800,000
Property and equipment, net		48,931			55,700
Other non-current assets		183,426			246,236
Total assets	$	96,100,719		$	75,419,110
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	428,152		$	616,629
Accrued expenses and other liabilities		1,402,952			1,577,321
Total current liabilities		1,831,104			2,193,950
Long-term deferred revenue		1,694,163			1,694,163
Deferred tax liability		201,792			201,792
Other non-current liabilities		2,211			2,705
Total liabilities		3,729,270			4,092,610
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value; 100,000,000 shares authorized at March 31, 2021 and December 31, 2020; 48,768,541 and 45,024,560 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively		48,769			45,025
Additional paid-in capital		475,532,361			454,296,536
Accumulated other comprehensive loss		(95,040	)		(88,219	)
Accumulated deficit		(383,114,641	)		(382,926,842	)
Total stockholders’ equity		92,371,449			71,326,500
Total liabilities and stockholders' equity	$	96,100,719		$	75,419,110

	Three months ended
	March 31,
	2021			2020
Revenues	$	4,000,000		$	—
Operating expenses:
Research, development and patents		2,145,274			1,250,745
General and administrative		2,056,255			1,673,754
Total operating expenses		4,201,529			2,924,499
Operating loss		(201,529	)		(2,924,499	)
Interest income		36,668			223,280
Other expense		(22,938	)		(12,340	)
Net loss applicable to common stockholders	$	(187,799	)	$	(2,713,559	)
Basic and diluted net loss per common share	$	(0.00	)	$	(0.06	)
Shares used to compute basic and diluted net loss per common share		47,535,307			43,949,291
Net loss applicable to common stockholders	$	(187,799	)	$	(2,713,559	)
Other comprehensive loss, net of tax:
Foreign currency translation adjustments		(6,821	)		(120	)
Comprehensive loss	$	(194,620	)	$	(2,713,679	)

	Three Months Ended March 31, 2021
	Common stock				Additional paid-in		Accumulated other comprehensive			Accumulated			Total stockholders’
	Shares		Amount		capital		loss			deficit			equity
Balance at December 31, 2020		45,024,560	$	45,025	$	454,296,536	$	(88,219	)	$	(382,926,842	)	$	71,326,500
Share-based compensation	—		—			1,139,636	—			—				1,139,636
Issuance of common stock for option exercises		86,250		86		212,089								212,175
Issuance of shares under an employee stock purchase plan (ESPP)		1,424		2		6,108	—			—				6,110
Issuance of common stock in a private placement transaction, net of issuance costs		3,656,307		3,656		19,877,992		—			—			19,881,648
Net loss	—		—		—		—				(187,799	)		(187,799	)
Foreign currency translation adjustments	—		—		—			(6,821	)	—				(6,821	)
Balance at March 31, 2021		48,768,541	$	48,769	$	475,532,361	$	(95,040	)	$	(383,114,641	)	$	92,371,449

	Three Months Ended March 31, 2020
	Common stock				Additional paid-in		Accumulated other comprehensive			Accumulated			Total stockholders’
	Shares		Amount		capital		loss			deficit			equity
Balance at December 31, 2019		43,908,065	$	43,908	$	444,016,341	$	(92,681	)	$	(369,072,945	)	$	74,894,623
Share-based compensation	—		—			596,378	—			—				596,378
Issuance of shares under an employee stock purchase plan (ESPP)		1,979		2		6,252	—			—				6,254
Issuance of common stock under at-the-market equity distribution and sales agreements, net of offering costs		68,952		69		412,623		—			—			412,692
Net loss	—		—		—		—				(2,713,559	)		(2,713,559	)
Foreign currency translation adjustments		—		—		—		(120	)		—			(120	)
Balance at March 31, 2020		43,978,996	$	43,979	$	445,031,594	$	(92,801	)	$	(371,786,504	)	$	73,196,268

Level 1:	Observable inputs such as quoted prices in active markets;

Level 2:	Inputs are quoted prices for similar items in active markets or quoted prices for identical or similar items in markets that are not active near the measurement date; and

Level 3:	Unobservable inputs due to little or no market data, which require the reporting entity to develop its own assumptions.

	Number of Option Shares			Weighted Average Exercise Price
Outstanding at December 31, 2020		7,401,387		$	5.70
Granted		1,221,000			5.95
Exercised		(86,250	)		2.46
Cancelled		(256,250	)		6.96
Outstanding at March 31, 2021		8,279,887		$	5.73
Exercisable at March 31, 2021		6,999,887		$	5.70


	March 31, 2021	March 31, 2020
Stock Option assumptions:
Risk-free interest rate	0.45 - 0.92%	0.37 - 1.68%
Expected volatility of common stock	75.46 - 76.11%	57.44 - 62.9%
Dividend yield	0%	0%
Expected term (in years)	4.47 - 5.41	4.52 - 5.56

Exhibit Number		Description

3.1		Restated Certificate of Incorporation of the Registrant, as amended (incorporated by reference to Exhibit 3.1 of the Registrant’s Quarterly Report on Form 10-Q filed August 9, 2012).

3.2		Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed April 25, 2019).

31.1⁽¹⁾		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2⁽¹⁾		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1⁽¹⁾		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).

32.2⁽¹⁾		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).

101⁽¹⁾		The following financial statements from the MediciNova, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 are formatted in Inline Extensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations and Comprehensive Loss; (iii) Consolidated Statements of Stockholders’ Equity; (iv) Consolidated Statements of Cash Flows; and (v) the notes to the consolidated financial statements.
104⁽¹⁾		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

	MEDICINOVA, INC.

Date: May 13, 2021	By:	/s/ YUICHI IWAKI
		Yuichi Iwaki, M.D., Ph.D.
		President and Chief Executive Officer
		(on behalf of the registrant and
		as the registrant’s Principal Executive Officer)

	By:	/s/ EDWARD STEPANOW
		Edward Stepanow
		Chief Financial Officer
		(on behalf of the registrant and
		as the registrant’s Principal Financial Officer)