Rezolute, Inc 10-Q for FY2025 Q1
Rezolute, Inc. (RZLT)
About this 10-Q
Rezolute, Inc filed this 10-Q on November 7, 2024, covering the quarter ended September 30, 2024 (FY2025 Q1).
Headline figures
Quarter ended September 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $15.38M
- compared with a net loss of $14.52M a year earlier
- Diluted EPS
- -$0.22
- compared with -$0.28 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
or
For the transition period from to
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
| ||
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
| | |
| ||
(Address of principal executive offices) | | (Zip Code) |
(
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
| |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.). ☒
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, and an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ | Accelerated filer ☐ |
|
|
Smaller reporting company | |
|
|
| 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 17(a)(2)(B) of the Securities Act. ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
The registrant had
Table of Contents
i
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2024 (the “Report”) contains statements reflecting assumptions, expectations, projections, intentions or beliefs about future events that are intended as “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements included or incorporated by reference in this Report, other than statements of historical fact, that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. These statements appear in a number of places, including, but not limited to “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements represent our reasonable judgment of the future based on various factors and using numerous assumptions and are subject to known and unknown risks, uncertainties and other factors that could cause our actual results and financial position to differ materially from those contemplated by the statements. You can identify these statements by the fact that they do not relate strictly to historical or current facts, and use words such as “anticipate”, “believe”, “estimate”, “expect”, “forecast”, “may”, “should”, “plan”, “project” and other words of similar meaning. In particular, these include, but are not limited to, statements relating to the following:
| ● | our ability to obtain regulatory approvals for our drug candidates; |
| ● | expectations regarding clinical development and the timing of clinical trials in the United States and outside of the United States; |
| ● | projected operating or financial results, including anticipated cash flows to be used in operating activities; |
| ● | expectations regarding capital expenditures, research and development expenses and the timing of milestone payments required under license agreements; |
| ● | our beliefs and assumptions relating to our liquidity position, including our ability to obtain additional financing; |
| ● | our future dependence on third-party manufacturers or strategic partners to manufacture any of our pharmaceutical drugs and diagnostics that receive regulatory approval; and |
| ● | our ability to identify strategic partners and enter into license, co-development, collaboration or similar arrangements. |
Any or all of our forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known and unknown risks, uncertainties and other factors including, but not limited to, “Risk Factors” described in (i) Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2024 (the “2024 Form 10-K”), filed with the Securities and Exchange Commission (“SEC”) on September 19, 2024.
In addition, there may be other factors that could cause our actual results to be materially different from the results referenced in the forward-looking statements, some of which are included elsewhere in this Report, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Many of these factors will be important in determining our actual future results. Consequently, no forward-looking statement can be guaranteed. Our actual future results may vary materially from those expressed or implied in any forward-looking statements. All forward-looking statements contained in this Report are qualified in their entirety by this cautionary statement. Forward-looking statements speak only as of the date they are made, and we disclaim any obligation to update any forward-looking statements to reflect events or circumstances after the date of this Report, except as otherwise required by applicable law.
ii
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Rezolute, Inc.
Unaudited Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
|
| September 30, | | June 30, | ||
| 2024 |
| 2024 | |||
Assets | | | | | | |
Current assets: |
| |
| | |
|
Cash and cash equivalents | | $ | | | $ | |
Investments in marketable debt securities | | | | | | |
Prepaid expenses and other | | | | | | |
Total current assets | |
| | |
| |
| | | | | | |
Long-term assets: | | | | | | |
Investments in marketable debt securities | | | | | | |
Deposits and other | | | | | | |
Right-of-use assets | |
| | |
| |
Property and equipment, net | |
| | |
| |
Total assets | | $ | | | $ | |
| | | | | | |
Liabilities and Shareholders' Equity | |
|
| |
|
|
Current liabilities: | |
|
| |
|
|
Accounts payable | | $ | | | $ | |
Accrued liabilities: | |
| | |
| |
Compensation and benefits | | | | | | |
Accrued clinical and other | | | | | | |
Current portion of operating lease liabilities | | | | | | |
Total current liabilities | |
| | |
| |
| | | | | | |
Long-term liabilities: | | | | | | |
Operating lease liabilities, net of current portion | |
| | |
| |
Embedded derivative liability | | | | | | |
Total liabilities | |
| | |
| |
| | | | | | |
Commitments and contingencies (Notes 5, 9 and 10) | |
|
| |
|
|
| | | | | | |
Shareholders' equity: | |
|
| |
|
|
Preferred stock, $ | |
| |
| ||
Common stock, $ | |
| | |
| |
Additional paid-in capital | |
| | |
| |
Accumulated other comprehensive income (loss) | | | | | | ( |
Accumulated deficit | |
| ( | |
| ( |
Total shareholders’ equity | |
| | |
| |
Total liabilities and shareholders’ equity | | $ | | | $ | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
Rezolute, Inc.
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except per share amounts)
| | | Three Months Ended | ||||
| | | September 30, | ||||
|
| | 2024 |
| 2023 | ||
Operating expenses: |
| | |
|
| |
|
Research and development |
| | $ | | | $ | |
General and administrative |
| | | | |
| |
Total operating expenses |
| | | | |
| |
Operating loss |
| | | ( | |
| ( |
Non-operating income (expense): |
| | |
| |
|
|
Interest and other income, net | | | | | | | |
Loss from change in fair value of embedded derivative liability | | | | ( | | | ( |
Total non-operating income, net |
| | | | |
| |
| | | | | | | |
Net loss | | | | ( | | | ( |
| | | | | | | |
Other comprehensive income (loss): | | | | | | | |
Net unrealized gain (loss) on marketable debt securities | | | | | | | |
| | | | | | | |
Comprehensive loss | | | $ | ( | | $ | ( |
| | | | | | | |
Net loss per common share: | | | | | | | |
Basic and diluted | | | $ | ( | | $ | ( |
| | | | | | | |
Weighted average number of common shares outstanding: | | |
| | | | |
Basic and diluted | | | | | |
| |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
Rezolute, Inc.
Unaudited Condensed Consolidated Statements of Shareholders’ Equity
Three Months Ended September 30, 2024 and 2023
(In thousands)
| | | | | | Accumulated | | | | | |||||||
| | | | Additional | | Other | | | | Total | |||||||
| | Common Stock | | Paid-in | | Comprehensive | | Accumulated | | Shareholders' | |||||||
|
| Shares |
| Amount |
| Capital |
| Loss |
| Deficit |
| Equity | |||||
Three Months Ended September 30, 2024: | | | | | | | | | | | | | | | | | |
Balances, June 30, 2024 | | | | $ | | | $ | | | $ | ( | | $ | ( | | $ | |
Gross proceeds from issuance of common stock for cash in 2024 Private Placement | | | | | | | | | | | — | | | — | | | |
Payment of commissions and other offering costs | | — | | | — | | | ( | | | — | | | — | | | ( |
Issuance of common stock upon exercise of stock options | | | | | — | | | | | | — | | | — | | | |
Share-based compensation | | — | | | — | | | | | | — | | | — | | | |
Cashless exercise of pre-funded warrants | | | | | | | | ( | | | — | | | — | | | — |
Net change in accumulated other comprehensive loss | | — | | | — | | | — | | | | | | — | | | |
Net loss |
| — | |
| — | |
| — | |
| — | |
| ( | |
| ( |
Balances, September 30, 2024 | | | | $ | | | $ | | | $ | | | $ | ( | | $ | |
| | | | | | | | | | | | | | | | | |
Three Months Ended September 30, 2023: | | | | | | | | | | | | | | | | | |
Balances, June 30, 2023 | | | | $ | | | $ | | | $ | ( | | $ | ( | | $ | |
Share-based compensation | | — | | | — | | | | | | — | | | — | | | |
Net change in accumulated other comprehensive loss | | — | | | — | | | — | | | | | | — | | | |
Net loss | | — | | | — | | | — | | | — | | | ( | | | ( |
Balances, September 30, 2023 | | | | $ | | | $ | | | $ | ( | | $ | ( | | $ | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
Rezolute, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands)
|
| Three Months Ended | ||||
| | September 30, | ||||
|
| 2024 |
| 2023 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: |
| |
|
| |
|
Net loss | | $ | ( | | $ | ( |
Share-based compensation expense | | | | | | |
Loss from change in fair value of embedded derivative liability | | | | | | |
Non-cash lease expense | | | | | | |
Accretion of discounts and amortization of premiums on marketable debt securities, net | | | ( | | | |
Depreciation expense | | | | | | |
Realized gain from investments | | | ( | | | — |
Changes in operating assets and liabilities: | |
|
| |
|
|
Increase in prepaid expenses, deposits, and other assets | |
| ( | |
| ( |
Decrease in accounts payable | |
| ( | |
| ( |
Increase in accrued liabilities | | | | | | |
Net Cash Used in Operating Activities | |
| ( | |
| ( |
| | | | | | |
CASH FLOWS FROM INVESTING ACTIVITIES | |
| | | | |
Purchase of marketable debt securities | | | ( | | | ( |
Proceeds from maturities of marketable debt securities | | | | | | |
Total Cash Provided by (Used in) Investing Activities | |
| ( | |
| |
| | | | | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
|
| | |
|
Proceeds from exercise of stock options | | | | | | — |
Gross proceeds from issuance of common stock in 2024 Private Placement | | | | | | — |
Payment of offering costs | | | ( | | | — |
Net Cash Provided by Financing Activities | |
| | |
| — |
| | | | | | |
Net decrease in cash and cash equivalents | | | ( | | | ( |
Cash and cash equivalents at beginning of period | |
| | |
| |
Cash and cash equivalents at end of period | | $ | | | $ | |
| | | | | | |
SUPPLEMENTARY CASH FLOW INFORMATION: | |
| | |
|
|
Cash paid for interest | | $ | — | | $ | — |
Cash paid for income taxes | | | — | | | — |
Cash paid for amounts included in the measurement of operating lease liabilities | | | | | | |
| | | | | | |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | |
| | |
|
|
Payables for offering costs | | $ | | | $ | — |
Receivable from exercise of stock options | | $ | | | $ | — |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
NOTE 1 — NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
Rezolute, Inc. (the “Company”) is a late-stage rare disease company focused on significantly improving outcomes for individuals with hypoglycemia caused by hyperinsulinism. The Company’s primary clinical assets consist of (i) ersodetug (formerly known as RZ358), which is a potential treatment for all forms of hyperinsulinism, including congenital hyperinsulinism, an ultra-rare pediatric genetic disorder characterized by excessive production of insulin by the pancreas, and (ii) RZ402, which is an oral plasma kallikrein inhibitor (“PKI”) being developed as a potential therapy for the chronic treatment of diabetic macular edema.
Basis of Presentation
The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), the rules and regulations of the SEC for interim financial information, and the instructions to Form 10-Q and Article 8 of Regulation S-X.
The condensed consolidated balance sheet as of June 30, 2024, has been derived from the Company’s audited consolidated financial statements. The unaudited interim financial statements should be read in conjunction with the Company’s 2024 Form 10-K, which contains the Company’s audited financial statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended June 30, 2024.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all information and footnote disclosures necessary for a comprehensive presentation of financial position, results of operations, and cash flows. It is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments) that are necessary for a fair financial statement presentation have been made. The interim results for the three months ended September 30, 2024, are not necessarily indicative of the financial condition and results of operations that may be expected for any future interim period or for the fiscal year ending June 30, 2025.
Consolidation
The Company has
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts in the unaudited condensed consolidated financial statements and the accompanying notes. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. The Company’s significant accounting estimates include, but are not necessarily limited to, determination if an allowance for credit losses is required for marketable debt securities, the fair value of an embedded derivative liability, fair value of share-based compensation, management’s assessment of going concern, and estimates related to clinical trial accrued liabilities. Actual results could differ from those estimates.
Risks and Uncertainties
The Company's operations may be subject to significant risks and uncertainties including financial, operational, regulatory and other risks associated with a clinical stage company, including the potential risk of business failure discussed in Note 2.
5
Significant Accounting Policies
The Company’s significant accounting policies are described in Note 1 to the financial statements in Item 8 of the 2024 Form 10-K.
Recent Accounting Pronouncements Not Yet Adopted
In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which improves reportable segment disclosure requirements through enhanced disclosures about significant segment expenses. ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024. Early adoption is permitted and the amendments should be applied on a retrospective basis to all periods presented. The Company is evaluating the effect of adopting ASU 2023-07 and does not expect the amendments to have a material impact on its consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which expands income tax disclosures including changes in the rate reconciliation and income taxes paid information. This ASU is intended to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, and early adoption is permitted. The Company has not determined the timing for adoption of this standard.
Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not currently expected to have a material impact on the Company’s financial statements upon adoption.
NOTE 2 — LIQUIDITY
As a clinical stage business, the Company has not yet generated any revenues and had an accumulated deficit of $
As discussed in Note 7, the Company completed the 2024 Private Placement in July 2024 that resulted in the sale of
As of September 30, 2024, the Company has total liabilities of $
Management believes the Company’s existing cash and cash equivalents and investments in marketable debt securities will be adequate to meet the Company’s contractual obligations and carry out ongoing clinical trials and other planned activities through November 2025, at a minimum.
6
NOTE 3 —INVESTMENTS IN MARKETABLE DEBT SECURITIES
Investments in marketable debt securities are accounted for as available-for-sale investments at fair value and consist of the following (in thousands):
| September 30, | | June 30, | ||
| 2024 |
| 2024 | ||
Short-term investments | $ | | | $ | |
Long-term investments | | | | | |
Total investments | $ | | | $ | |
The Company only invests in liquid, high quality debt securities. Nonetheless, all of these investments are subject to interest rate and credit risk that may result in fluctuations in the fair value of the investments. To minimize exposure due to an adverse shift in interest rates, the Company generally invests in securities with expected maturities of
During the three months ended September 30, 2024, marketable debt securities for $
Accrued interest receivable on all marketable debt securities amounted to $
For the three months ended September 30, 2024, the Company did
| | | | | Gross Unrealized | | | | | ||||
| | Amortized Cost |
| Gains |
| Losses |
| Fair Value | | ||||
Corporate commercial paper | | $ | | | $ | | | $ | — | | $ | | |
Obligations of U.S. government agencies | | | | | | | | | — | | | | |
U.S. Treasury obligations | | | | | | | | | ( | | | | |
Corporate notes and bonds | | | | | | | | | ( | | | | |
Total | $ | | | $ | | | $ | ( | | $ | | | |
7
NOTE 4 — OPERATING LEASES
The carrying values of all right-of-use assets and operating lease liabilities is as follows (in thousands):
| | September 30, | | June 30, | ||
|
| 2024 |
| 2024 | ||
Right-of-use assets | | $ | | | $ | |
| | | | | | |
Operating lease liabilities: | |
|
| |
|
|
Current | | $ | | | $ | |
Long-term | |
| | |
| |
Total | | $ | | | $ | |
For the three months ended September 30, 2024 and 2023, operating lease expense is included under the following captions in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss (in thousands):
| | 2024 |
| 2023 | ||
Research and development | | $ | | | $ | |
General and administrative | |
| | |
| |
Total | | $ | | | $ | |
As of September 30, 2024, the weighted average remaining lease term under operating leases was
Fiscal year ending June 30, |
|
| |
Remainder of fiscal year 2025 | | $ | |
2026 | | | |
2027 | | | |
Thereafter | | | |
Total lease payments | | | |
Less imputed interest | |
| ( |
Present value of operating lease liabilities | | $ | |
NOTE 5 — LICENSE AGREEMENTS
XOMA License Agreement
In December 2017, the Company entered into a license agreement (“XOMA License Agreement”) with XOMA Corporation (“XOMA”), through its wholly-owned subsidiary, XOMA (U.S.) LLC, pursuant to which XOMA granted an exclusive global license to the Company to develop and commercialize XOMA 358 (formerly X358 or RZ358, now ersodetug) for all indications.
In January 2022, the Company was required to make a milestone payment under the XOMA License Agreement of $
8
annual net sales amounts. There have been no events that would result in any royalty payments owed under the XOMA License Agreement to date. The Company records a liability and corresponding expense for milestone payments under license agreements in the period that the milestone event is achieved. The next milestone payment of $
ActiveSite License Agreement
In August 2017, the Company entered into a Development and License Agreement (the “ActiveSite License Agreement”) with ActiveSite Pharmaceuticals, Inc. (“ActiveSite”) pursuant to which the Company acquired the rights to ActiveSite’s Plasma Kallikrein Inhibitor program (“PKI Portfolio”). The Company is initially using the PKI Portfolio to develop an oral PKI therapeutic for diabetic macular edema (RZ402) and may use the PKI Portfolio to develop other therapeutics for different indications. The ActiveSite License Agreement requires various milestone payments up to $
NOTE 6 — EMBEDDED DERIVATIVE LIABILITY
On April 14, 2021, the Company entered into a $
Concurrently with the execution of the Loan Agreement, the Company entered into an exit fee agreement (the “Exit Fee Agreement”) that provides for a fee of
NOTE 7 — SHAREHOLDERS’ EQUITY
Pre-Funded Warrants
Between October 2021 and June 2024, the Company issued fully vested pre-funded warrants (“PFWs”) exercisable to purchase an aggregate of
The PFWs are exercisable at any time, subject to the then effective ownership blocker percentage (the “OBP”) as elected by each of the holders of PFWs. The OBP is a percentage designated by the holders whereby the PFWs cannot be exercised if, after giving effect thereto, the holder would beneficially own more than the designated OBP. However, upon at least 61 days’ prior notice to the Company, any holder of PFWs may elect to increase or decrease the OBP to any other percentage not to exceed
9
comply with the respective OBP terms, all of the PFWs may be exercised at any time by paying the respective exercise price or electing to exercise on a cashless basis.
As of June 30, 2024, the Company had an aggregate of
| 2021 | | 2022 | | Exchange | | 2024 | | |
| PFWs | | PFWs | | PFWs | | PFWs | | Total |
Outstanding, June 30, 2024 | | (1) | | (2) | | (3) | | (4) | |
Cashless exercise of PFWs: | | | | | | | | | |
Shares surrendered for exercise price | — | | — | | ( | | — | | ( |
Shares of common stock issued | — | | — | | ( | | — | | ( |
Outstanding, September 30, 2024 | | | | | | | | | |
| (1) | In connection with an underwritten offering in October 2021, PFWs were issued to purchase |
| (2) | In connection with a registered direct offering in May 2022, the Company issued |
| (3) | As discussed below under the caption Exchange Agreement, the Company issued |
| (4) | As discussed below under the caption 2024 Underwritten Offering, the Company issued 2024 PFWs for the purchase of |
2024 Private Placement
In June 2024, the Company entered into a securities purchase agreement (the “2024 SPA”) with Handok, Inc. and one other investor relating to a private placement (the “2024 Private Placement”), pursuant to which
2024 Underwritten Offering
On June 13, 2024, the Company entered into an underwriting agreement with Jefferies LLC and Cantor Fitzgerald & Co. (the “Underwriters”) for the planned issuance and sale of equity securities in an underwritten public offering (the “2024 Underwritten Offering”). The 2024 Underwritten Offering provided for the issuance of (i)
10
Exchange Agreement
On March 8, 2024, the Company entered into a securities exchange agreement (the “Exchange Agreement”) with certain of its stockholders (the “Exchanging Shareholders”), whereby the Company purchased
The Exchange PFWs originally required approval by the Company’s shareholders if the exercise of the Exchange PFWs resulted in aggregate beneficial ownership by the holders in excess of
Jefferies Open Market Sales Agreement
On November 14, 2023, the Company and Jefferies LLC (the “Agent”) entered into an open market sales agreement (the “Sales Agreement”) that provides for an “at the market” offering for the sale of up to $
The Company has no obligation to sell any of the Placement Shares under the Sales Agreement. The Company intends to use the net proceeds, if any, from amounts sold under the Sales Agreement for general corporate purposes, including working capital. Under the terms of the Sales Agreement, the Company agreed to pay the Agent a commission equal to
For the three months ended September 30, 2024, the Company did
11
NOTE 8 — SHARE-BASED COMPENSATION AND WARRANTS
Stock Option Plans
Presented below is a summary of the number of shares outstanding, authorized, and available for future grants under the Company’s stock option plans and an inducement grant not associated with a stock option plan as of September 30, 2024 (in thousands):
|
| Number of Shares as of September 30, 2024 | ||||
Description |
| Authorized |
| Outstanding |
| Available |
2015 Plan |
| |
| |
| — |
2016 Plan |
| |
| |
| — |
2019 Plan |
| |
| |
| — |
2021 Plan | | | | | | |
Inducement Grant | | | | | | — |
Total |
| |
| |
| |
2022 Employee Stock Purchase Plan
On June 16, 2022, the Company’s shareholders approved the adoption of the 2022 Employee Stock Purchase Plan (the “2022 ESPP”). The 2022 ESPP provides an opportunity for employees to purchase the Company’s common stock through accumulated payroll deductions.
The 2022 ESPP has consecutive offering periods that begin approximately every 6 months commencing on the first trading day on or after July 1 and terminating on the last trading day of the offering period ending on December 31 and commencing on the first trading day on or after January 1 and terminating on the last trading day of the offering period ending on June 30. The 2022 ESPP reserves
Stock Options Outstanding
For the three months ended September 30, 2024, the following table sets forth a summary of the combined activity under the Company’s stock option plans and an inducement grant not associated with a stock option plan (shares in thousands):
|
| Shares |
| Price (1) |
| Term (2) | |
Outstanding, June 30, 2024 |
| | | $ | | | |
Grants to employees | | | | | | | |
Exercises | | ( | (3) | | | | |
Forfeited | | ( | | | | | |
Outstanding, September 30, 2024 |
| | (4) |
| |
| |
Vested, September 30, 2024 |
| | (5) |
| |
| |
| (1) | Represents the weighted average exercise price. |
| (2) | Represents the weighted average remaining contractual term for the number of years until the stock options expire. |
| (3) | The total intrinsic value (the amount by which the fair market value exceeded the exercise price) of stock options exercised during the three months ended September 30, 2024, was $ |
| (4) | As of September 30, 2024, the intrinsic value of outstanding options was approximately $ |
| (5) | As of September 30, 2024, the aggregate intrinsic value of vested stock options was approximately $ |
For the three months ended September 30, 2024, the aggregate fair value of stock options granted for approximately
12
For the three months ended September 30, 2024, the fair value of stock options was estimated on the respective dates of grant, with the following weighted-average assumptions:
Market price of common stock on grant date | | $ | | |
Expected volatility |
| | | % |
Risk free interest rate |
| | | % |
Expected term (years) |
| | | |
Dividend yield |
| | | % |
Share-based compensation expense for the three months ended September 30, 2024 and 2023 is included under the following captions in the unaudited condensed consolidated statements of operations and comprehensive loss (in thousands):
| | 2024 |
| 2023 | |||
Research and development | | $ | | | $ | | |
General and administrative | |
| | |
| | |
Total | | $ | | | $ | | |
Unrecognized share-based compensation expense is approximately $
Pre-Funded Warrants
PFWs are outstanding for a total of
Legacy Warrants
In connection with an equity financing in October 2020, the Company issued warrants entitling the holders to purchase approximately
For the three months ended September 30, 2024,
|
| Shares |
| Price (1) |
| Term (2) | |
Outstanding, June 30, 2024 |
| |
| $ | |
| |
Expirations |
| ( |
|
| |
|
|
Outstanding, September 30, 2024 |
| |
|
| |
| |
| (1) | Represents the weighted average exercise price. |
| (2) | Represents the weighted average remaining contractual term for the number of years until the warrants expire. |
13
NOTE 9 — COMMITMENTS AND CONTINGENCIES
Licensing Commitments
Please refer to Note 5 for further discussion of commitments to make milestone payments and to pay royalties under license agreements with XOMA and ActiveSite.
Legal Matters
From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. At each reporting period, the Company evaluates known claims to determine whether a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450, Contingencies. As of September 30, 2024, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the Company’s results of operations. Legal fees are expensed as incurred.
NOTE 10 — RELATED PARTY TRANSACTIONS
Related Party Licensing Agreement
On September 15, 2020, the Company and Handok entered into an exclusive license agreement (the “Handok License”) for the territory of the Republic of Korea. The Handok License relates to pharmaceutical products in final dosage form containing the pharmaceutical compounds developed or to be developed by the Company, including those related to ersodetug and RZ402. The Handok License is in effect for a period of
Investors in 2024 Private Placement
Handok was an investor in the 2024 Private Placement discussed in Note 7 for which the Company issued
NOTE 11 — INCOME TAXES
Income tax expense during interim periods is based on applying an estimated annualized effective income tax rate applied to the respective quarterly periods, adjusted for discrete tax items in the period in which they occur. The computation of the annualized estimated effective tax rate for each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating results for the year, projections of the proportion of income earned and taxed in various jurisdictions, permanent and temporary differences, and the likelihood of recovering deferred income tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is obtained, additional information becomes known or as the tax environment changes.
For the three months ended September 30, 2024 and 2023, the Company did not recognize any income tax benefit due to a full valuation allowance on its deferred income tax assets. The Company did not have any material changes to its conclusions regarding valuation allowances for deferred income tax assets or uncertain tax positions for the three months ended September 30, 2024 and 2023.
14
NOTE 12 — NET LOSS PER SHARE
Basic net loss per share is computed by dividing net loss by the weighted average number of outstanding shares of common stock and PFWs during periods when the PFWs are accounted for as equity instruments. Common shares associated with PFWs that are accounted for as equity instruments are included in the computation of basic and diluted net loss per share since the exercise price is negligible and all of the PFWs are fully vested and exercisable.
| | 2024 |
| 2023 | ||
Common Stock | | | | | | |
2021 PFWs | | | | | | |
2022 PFWs | | | | | | |
Exchange PFWs | | | | | | — |
2024 PFWs | | | | | | — |
Total | | | | | | |
For the three months ended September 30, 2024 and 2023, basic and diluted net loss per share were the same since all other common stock equivalents were anti-dilutive.
As of September 30, 2024 and 2023, the following outstanding potential common stock equivalents were excluded from the computation of diluted net loss per share since the impact of inclusion was anti-dilutive (in thousands):
| | 2024 | | 2023 |
Stock options | | | | |
Legacy warrants | | | | |
Total | | | | |
NOTE 13 — FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS
Fair Value Measurements
Fair value is defined as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it transacts and considers assumptions that market participants would use when pricing the asset or liability. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
Level 1—Quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.
Level 2—Other than quoted prices included in Level 1 that are observable for the asset and liability, either directly or indirectly through market corroboration, for substantially the full term of the asset or liability.
Level 3—Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any market activity for the asset or liability at the measurement date.
15
The following table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the fair value hierarchy classification as of September 30, 2024 and June 30, 2024 (in thousands):
| | | ||||||||||
| | Fair Value Measurement of Assets as of September 30, 2024 | ||||||||||
| | Total | | Level 1 | | Level 2 | | Level 3 | ||||
Cash and cash equivalents: | | | | | | | | | | | | |
Money market funds | | $ | | | $ | | | $ | — | | $ | — |
Marketable debt securities: | | | | | | | | | | | | |
Corporate commercial paper | | | | | | — | | | | | | — |
U.S. Government agencies | | | | | | — | | | | | | — |
U.S. Government treasuries | | | | | | — | | | | | | — |
Corporate notes and bonds | | | | | | — | | | | | | — |
Total | | $ | | | $ | | | $ | | | $ | — |
| | Fair Value Measurement of Assets as of June 30, 2024 | ||||||||||
| | Total | | Level 1 | | Level 2 | | Level 3 | ||||
Cash and cash equivalents: | | | | | | | | | | | | |
Money market funds | | $ | | | $ | | | $ | — | | $ | — |
Marketable debt securities: | | | | | | | | | | | | |
Corporate commercial paper | | | | | | — | | | | | | — |
U.S. Government agencies | | | | | | — | | | | | | — |
U.S. Government treasuries | | | | | | — | | | | | | — |
Corporate notes and bonds | | | | | | — | | | | | | — |
Asset-backed securities | | | | | | — | | | | | | — |
Total | | $ | | | $ | | | $ | | | $ | — |
Marketable debt securities classified as Level 2 within the valuation hierarchy generally consist of U.S. government agency securities, corporate bonds, and commercial paper. The Company determines the fair value of marketable debt securities based upon valuations obtained from third-party pricing sources. Except for the amounts shown in the table above, the Company did not have any other assets measured at fair value on a recurring basis as of September 30, 2024 and June 30, 2024.
The Company’s embedded derivative liability discussed in Note 6 is classified under Level 3 of the fair value hierarchy and is required to be measured and recorded at fair value on a recurring basis. Fair value is determined based on management’s assessment of the probability and timing of occurrence for the Exit Events discussed in Note 6 using a discount rate equal to the effective interest rate under the Loan Agreement.
The following table sets forth changes in the fair value of the Company’s embedded derivative liability measured at fair value liability for the three months ended September 30, 2024 and 2023 (in thousands):
| 2024 | | 2023 | ||
Fair value, beginning of period | $ | | | $ | |
Changes in fair value | | | | | |
Fair value, end of period | $ | | | $ | |
Except for the embedded derivative liability, the Company did not have any other liabilities measured at fair value on a recurring basis as of September 30, 2024 and June 30, 2024.
Due to the relatively short maturity of the respective instruments, the fair value of cash, accounts payable, and accrued liabilities approximated their carrying values as of September 30, 2024 and June 30, 2024.
16
The Company’s policy is to recognize asset or liability transfers among Level 1, Level 2 and Level 3 as of the actual date of the events or change in circumstances that caused the transfer. During the three months ended September 30, 2024 and 2023, the Company did not have any transfers of its assets or liabilities between levels of the fair value hierarchy.
Significant Concentrations
As of September 30, 2024, the Company has an aggregate of $
NOTE 14 — SUBSEQUENT EVENTS
Exchange PFW Warrant Exercises
In October 2024, holders of Exchange PFWs provided notice of cashless exercises of the remaining
2022 PFW Warrant Exercise
On November 7, 2024, a holder of certain 2022 PFWs provided notice of cashless exercises of
17
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Certain figures, such as interest rates and other percentages included in this section have been rounded for ease of presentation. Percentage figures included in this section have not in all cases been calculated on the basis of such rounded figures but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this section may vary slightly from those obtained by performing the same calculations using the figures in our unaudited condensed consolidated financial statements or in the associated text. Certain other amounts that appear in this section may similarly not sum due to rounding. As used in the discussion below, “we,” “our,” “us,” and the “Company” refers to Rezolute, Inc.
Rezolute, Inc. (“Rezolute”, the “Company”, “we” or “us”) is a late-stage rare disease company focused on significantly improving outcomes for individuals with hypoglycemia caused by hyperinsulinism (“HI”).
Our priority going into the end of 2024 and first half of 2025 is to execute across our two Phase 3 clinical trials. Our goals include (i) complete enrollment of ex-U.S. participants in the sunRIZE study, (ii) progress study start-up activities in the U.S. to enable U.S. participant enrollment in the sunRIZE study, and (iii) advance study start-up activities and begin enrollment for the Phase 3 registrational tumor HI study.
Ersodetug for congenital hyperinsulinism (cHI)
Congenital HI is the most common cause of recurrent and persistent hypoglycemia in children. Individuals with congenital HI typically present with signs or symptoms of hypoglycemia shortly after birth. Hypoglycemia can result in significant brain injury and death if not recognized and managed appropriately. Additionally, recurrent, or cumulative, hypoglycemia can lead to progressive and irreversible damage over time, including serious and devastating brain injury, seizures, neuro-developmental problems, feeding difficulties, and significant impact on patient and family quality of life. In cases that are unresponsive to medical management, surgical removal of the pancreas may be required. In those with diffuse disease where the whole pancreas is affected, a near-total pancreatectomy can be undertaken, although ongoing medical treatment of hypoglycemia is generally required for several years after surgery, before eventual insulin-dependent diabetes ensues. There are no U.S. Food and Drug Administration (“FDA”) approved therapies for all forms of congenital HI and the current standard of care treatments are suboptimal. The current treatments used by physicians include glucagon, diazoxide, somatostatin analogues and pancreatectomy. We estimate that in the U.S. alone the immediately addressable market for congenital HI is more than 1,500 individuals.
Ersodetug has received Orphan Drug Designation in the U.S. and European Union for the treatment of congenital HI, as well as Rare Pediatric Disease Designation in the U.S., a prerequisite for a request for a Rare Pediatric Disease Priority Review Voucher upon Biologics License Application (“BLA”) submission. Based on the multinational Phase 2b clinical trial (“RIZE”) outcomes and the evidence of benefit in this serious condition with substantial unmet medical need, ersodetug was subsequently granted a priority medicines (“PRIME”) designation by the European Medicines Agency (“EMA”) and an Innovation Passport designation by the UK Innovative Licensing and Access Pathway (“ILAP”) Steering Group for the treatment of congenital HI.
sunRIZE Phase 3 Study
We are actively enrolling a pivotal Phase 3 clinical study (the “sunRIZE” study) of ersodetug for the treatment of hypoglycemia in participants with congenital HI, an ultra-rare pediatric genetic disorder characterized by excessive production of insulin by the pancreas. If untreated, the elevated insulin levels in patients suffering with congenital HI can induce extreme hypoglycemia (low blood sugar) events, increasing the risk of neurological and developmental complications, including persistent feeding problems, learning disabilities, recurrent seizures, brain damage or even death.
The sunRIZE study is a global, randomized, double-blind, placebo-controlled, parallel arm evaluation of ersodetug in participants 3 months of age and older with congenital HI who are not adequately responding to standard of care medical therapies. Specifically, the study is evaluating the safety and efficacy of ersodetug in participants who are unable to achieve control of low blood sugars (“hypoglycemia” [<70 mg/dL]). The study will determine the ability of ersodetug to correct hypoglycemia as assessed by (i) hypoglycemia events using self-monitored blood glucose (“SMBG”) and (ii) time in hypoglycemia using continuous glucose monitoring (“CGM”) over 24 weeks of treatment.
18
On September 4, 2024, FDA lifted the partial clinical holds on ersodetug. We are currently conducting study start-up activities at sites in the U.S. in anticipation of enrolling U.S. participants in the sunRIZE study in the first part of calendar 2025. Topline results from the study are anticipated to be available in the second half of calendar 2025.
Ersodetug for tumor hyperinsulinism (HI)
Tumor HI may be caused by two distinct types of tumors: neuroendocrine islet cell tumors (“ICTs”) and non-islet cell tumors (“NICTs”), both of which lead to hypoglycemia due to excessive activation of the insulin receptor. Insulinomas are the most common type of functional ICT and mediate hypoglycemia through excessive insulin production. NICTs are generally associated with relatively large, solid tumors such as hepatocellular carcinoma, fibrosarcoma and mesothelioma, and can cause hypoglycemia by producing and secreting insulin-like paraneoplastic substances such as IGF-2 or related variants that bind to and activate the insulin receptor. This form of hypoglycemia can occur in more than 15 different tumor types.
Current therapies for insulinomas and NICTs can be grouped into two main categories: (a) tumor-directed de-bulking therapies (e.g. surgery, chemotherapy, radiotherapy), which may indirectly and/or eventually lead to decreased levels of circulating insulin and/or insulin-like substances, and therefore control HI and related hypoglycemia; and/or (b) medical therapies such as glucocorticoids that are used to attempt to treat the hypoglycemia. Tumor-directed therapies do not directly treat hypoglycemia caused by insulinomas or NICTs. In many cases, tumor-directed therapies are administered concurrently with medical therapies for hypoglycemia and in other cases successful treatment of hypoglycemia often enables the initiation and/or continuation of tumor-directed therapies, as indicated. During the period from diagnosis to surgical treatment, or if surgery is contraindicated or refused, medical treatments are often necessary to directly manage the HI and hypoglycemia induced by the tumor. Additionally, chronic medical management of refractory hypoglycemia is often necessary for patients who cannot be cured by surgery, such as those with extensive disease of the pancreas, multi-focal insulinomas, inoperable or unresectable benign or malignant insulinomas, metastatic insulinomas, non-pancreatic insulinomas, or NICT hypoglycemia resulting from a variety of other tumors.
A significant unmet need exists for treatment options with improved efficacy and tolerability as normalization of glucose levels is crucial to prevent serious signs and symptoms of hypoglycemia, improve patient quality of life and overall function, and even to ensure patients are fit to receive cancer treatment and to reduce mortality. Unfortunately, some patients are unresponsive to the current standard of care medical therapies for tumor HI and experience debilitating hypoglycemia that is otherwise untreatable. Currently available medical therapies are directed at reducing or eliminating insulin production and/or secretion from tumors, which may be challenging when the tumor is differentiated or dysregulated, and therefore not responding to usual control mechanisms for suppressing insulin production. In some cases, commonly utilized somatostatin analog therapies may even worsen hypoglycemia due to suppression of glucagon. Therefore, currently available medical therapies directed at suppressing insulin production may have limited effectiveness in tumor HI.
While we believe the total addressable market may be larger, the immediately addressable market for the combined indications causing tumor HI is estimated to be approximately 1,500 patients in the U.S. alone, including approximately 500 with islet cell tumor hypoglycemia (“ICTH”) and approximately 1,000 with non-islet cell tumor hypoglycemia (“NICTH”).
On August 5, 2024, we announced FDA clearance of our Investigational New Drug (“IND”) application for a Phase 3 registrational study of ersodetug for the treatment of hypoglycemia due to tumor HI. This is the second rare disease program with ersodetug in Phase 3 development. We are initiating start-up activities for the study, which will be primarily conducted in the U.S., and patient enrollment is planned to commence in the first half of calendar 2025. Topline results from the study are anticipated to be available in the second half of calendar 2026.
The Phase 3 registrational study is a double-blind, randomized, placebo-controlled trial of 24 participants who have inadequately controlled hypoglycemia because of tumor HI. Eligible participants will be randomized in 1:1 fashion (12 per treatment arm) to receive ersodetug 9 mg/kg per week or matched placebo, as an add-on to standard of care. Up to 24 additional participants may be enrolled into an open-label arm, in participants whose hypoglycemia is being managed by IV glucose in a hospital setting. Following a 6-week pivotal treatment period, all participants may receive ersodetug in open-label extension. The primary endpoint is the change in Level 2 (moderate) and Level 3 (severe) hypoglycemia events by self-monitored blood glucose. Additional endpoints include overall hypoglycemia events, time in hypoglycemia by continuous glucose monitor, patient reported quality of life, hospitalizations, and change in glucose requirements (for open-label hospitalized participants.
19
Expanded Access Program (“EAP”)
Ersodetug has been shown to counteract excessive insulin action downstream, at the insulin-receptor on target organs. The unique mechanism of action of ersodetug makes the therapy a potential universal treatment for any form of hyperinsulinism.
We maintain an EAP for a variety of HI indications for the purpose of making ersodetug available on a compassionate use basis when available therapeutic options have failed, and an individual’s hypoglycemia is unmanageable. In the fourth quarter of 2022, we received and approved an EAP request from Dr. Mary Elizabeth Patti, Director of the Hypoglycemia Clinic at the Harvard Medical School and Beth Israel Medical Center-affiliated Joslin Diabetes Center, for a patient with intractable hypoglycemia caused by a metastatic insulinoma. Dr. Patti received a single patient IND approval from the FDA's Office of Cardiology, Hematology, Endocrinology and Nephrology - Division of Diabetes, Lipid Disorders, and Obesity (“Division”) to treat the patient with ersodetug. Dr. Patti reported that the patient safely achieved correction of hypoglycemia with ersodetug, enabling the patient to wean off continuous intravenous dextrose and several other medications for hypoglycemia, leave the hospital after a prolonged stay, and resume receiving concurrent treatment for his cancer with tumor-directed therapies. The patient remained on ersodetug for more than a year until he eventually passed away due to progression of his underlying malignant/metastatic insulinoma.
We have received and approved several additional requests to date for use of ersodetug in patients with tumor HI caused by metastatic insulinomas and other insulin secreting metastatic cancer (cervical). In the U.S., these requests have all been approved by the Division. These patients have been refractory to usual standard of care therapies for chronic management of hypoglycemia and required continuous high volume/concentration intravenous dextrose or nutritional infusion and were hospitalized and in life-threatening or hospice-bound condition because of uncontrollable hypoglycemia. Further treatment with tumor-directed therapies (e.g., embolization, radiotherapy, chemotherapy) was often deferred as a result of the debilitating hypoglycemia.
Generally, dosing for tumor HI patients has been either 6 mg/kg or 9 mg/kg every 1-2 weeks. In all cases to date, ersodetug has led to substantial improvement in hypoglycemia and has been well tolerated. Within a relatively short period of time after administration of ersodetug, continuous intravenous dextrose was discontinued or substantially reduced and hospitalized patients were able to be discharged and receive maintenance ersodetug doses on an outpatient basis, with durable benefit. In most cases, other background medical therapies for hypoglycemia were able to be weaned or stopped, and patients were able to resume tumor-directed therapies for treatment of their underlying cancer. Patients with metastatic tumor HI often have underlying hepatic injury (abnormal enzymes) at baseline due to hepatic metastases or previous tumor-directed treatments (e.g., partial liver resection or embolization). The patients with hepatic injury that have been treated under the EAP have not exhibited any indication of hepatic toxicity with the use of ersodetug.
RZ402 for diabetic macular edema (DME)
Our second clinical asset, RZ402, is an oral plasma kallikrein inhibitor (“PKI”) and potential therapy for the chronic treatment of diabetic macular edema (“DME”). DME is a vascular complication of diabetes and a leading cause of blindness in the U.S. and elsewhere. Chronic exposure to high blood sugar levels can lead to inflammation, cell damage, and the breakdown of blood vessel walls. Specifically, in DME, retinal blood vessels at the back of the eye become porous and permeable leading to the unwanted infiltration of fluid into the macula. This fluid leakage creates distorted vision, and if left untreated, blindness.
In May 2024, we completed a Phase 2 multi-center, randomized, double-masked, placebo-controlled, parallel arm study to evaluate the safety, efficacy, and pharmacokinetics of RZ402 administered as a monotherapy over a 12-week treatment period in participants with DME who are naïve to, or have received limited anti-VEGF injections. The study met both primary endpoints, demonstrating a significant reduction in central subfield thickness (“CST") in the study eye at all RZ402 dose levels compared to placebo (up to approximately 50 micron improvement), as well as good safety and tolerability. The program is available for partnering and we are actively engaged in conversations with potential partners to take RZ402 into further development.
Recent Developments
2024 Underwritten Offering
On June 13, 2024, we entered into an underwriting agreement for the planned issuance and sale of equity securities in an underwritten public offering (the “2024 Underwritten Offering”). The 2024 Underwritten Offering provided for the issuance of (i) 11,250,000 shares of common stock at a price of $4.00 per share for gross proceeds of $45.0 million, and (ii) pre-funded warrants to purchase 3,750,000
20
shares of common stock at a public offering price of $3.999 per pre-funded warrant (the “2024 PFWs”) for gross proceeds of $15.0 million. The Company granted the underwriters a 30-day option to purchase up to an additional 2,250,000 shares of its common stock at a public offering price of $4.00 per share, less underwriting discounts of 6.0% of the gross proceeds. The underwriters’ option was partially exercised for 1,786,589 shares of common stock for gross proceeds of $7.1 million. Closing occurred on June 24, 2024, whereby the aggregate gross proceeds amounted to $67.1 million. The net proceeds of the 2024 Underwritten Offering amounted to approximately $62.6 million. In July 2024, we utilized approximately $59.7 million of the net proceeds from the 2024 Underwritten Offering to purchase investments in marketable debt securities with maturities that range from October 2024 through December 2025.
2024 Private Placement
In June 2024, we entered into a securities purchase agreement (the “2024 SPA”) with Handok, Inc. and one other investor relating to a private placement (the “2024 Private Placement”), pursuant to which we agreed to sell 1,500,000 shares of common stock at a purchase price of $4.00 per share. Closing of the 2024 Private Placement occurred in July 2024, whereby we received proceeds of $6.0 million.
Exchange PFW Exercises
On July 23, 2024, an investor from our March 2024 Exchange Agreement provided notice of cashless exercise of their Exchange PFWs. We issued 610,273 shares of our common stock on July 24, 2024, and we did not receive any cash proceeds from the exercise. Subsequently, in October 2024, additional holders of Exchange PFWs provided notice of cashless exercise of their PFWs. We issued 2,389,111 shares of our common stock in October 2024 and did not receive any cash proceeds from the exercise.
Factors Impacting our Results of Operations
We have not generated any meaningful revenues since our inception in March 2010. Over the last several years, we have conducted private placements and public offerings to raise additional capital, adopted a licensing model to pursue development of product candidates, conducted pre-clinical and clinical trials, and conducted other research and development activities on our pipeline of product candidates.
Due to the time required to conduct clinical trials and obtain regulatory approval for our product candidates, we anticipate it will be several years before we generate substantial revenues, if ever. We expect to incur operating losses for the foreseeable future; therefore, we expect to continue efforts to raise additional capital to maintain our current operating plans over the next several years. We cannot assure you that we will secure such financing or that it will be adequate for the long-term execution of our business strategy. Even if we obtain additional financing, it may be costly and may require us to agree to covenants or other provisions that will favor new investors over our existing shareholders.
Key Components of Consolidated Statements of Operations and Comprehensive Loss
Research and development expenses. Research and development (“R&D”) expenses consist primarily of compensation and benefits for our personnel engaged in R&D activities, clinical trial costs, licensing costs, and consulting and outside services. Our R&D compensation costs include an allocable portion of our cash and share-based compensation, employee benefits, and consulting costs related to personnel engaged in the design and development of product candidates and other scientific research projects. We also allocate a portion of our facilities and overhead costs based on the personnel and other resources devoted to R&D activities.
General and administrative expenses. General and administrative (“G&A”) expenses consist primarily of (i) an allocable portion of our cash and share-based compensation and employee benefits related to personnel engaged in our administrative, finance, accounting, and executive functions, and (ii) an allocable portion of our facilities and overhead costs related to such personnel. G&A expenses also include travel, legal, auditing, consulting, investor relations and other costs primarily related to our status as a public company.
Interest and other income. Interest and other income consist primarily of interest income earned on marketable debt securities and temporary cash investments, amortization of investment premiums and accretion of investment discounts, and realized gains on investments in marketable debt securities.
Loss from change in fair value of derivative liability. We recognize liabilities for financial instruments that are required to be accounted for as derivatives, as well as embedded derivatives in our debt agreements. Derivative liabilities are adjusted to fair value at the end of
21
each reporting period until the contracts are settled, expire, or otherwise meet the conditions for equity classification. Changes in fair value are reflected as a gain or loss in our unaudited condensed consolidated statements of operations and comprehensive loss.
Critical Accounting Policies and Significant Judgments and Estimates
Overview
The discussion herein is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported revenue and expenses during the reporting periods. These items are monitored and analyzed for changes in facts and circumstances, and material changes in these estimates could occur in the future. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Changes in estimates are reflected in reported results for the period in which they become known. Actual results may differ from these estimates under different assumptions or conditions.
With respect to our significant accounting policies that are described in Note 1 to our consolidated financial statements included in Item 8 of our 2024 Form 10-K, we believe that the following accounting policies involve a greater degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations.
Investments in Marketable Debt Securities
We account for investments in marketable debt securities as available-for-sale securities whereby they are recorded in our consolidated balance sheets at fair value. Interest income consists of accrued interest earned based on the coupon rate of the security, plus the impact of accreting discounts and amortizing premiums to maturity using the straight-line method which approximates the interest method. Unrealized gains and losses due to subsequent changes in fair value of the investments are reported in shareholders’ equity as a component of accumulated other comprehensive income (loss). The individual debt securities in our portfolio are subject to credit risk in the event of default by the issuers. We review the components of our portfolio of available-for-sale debt securities, using both quantitative and qualitative factors, to determine if declines in fair value below amortized cost have resulted from a credit-related loss or other factors. To the extent that declines in fair value are due to a deterioration of credit quality of the issuer, we will recognize an allowance for credit losses related to such investments with a corresponding loss in the consolidated statements of operations. Allowances for credit losses may be reversed in subsequent periods if conditions improve and credit-related losses are no longer expected. For a decline in fair value that is solely due to changes in interest rates, impairment is not recognized if we have the ability and intent to hold the investment until maturity. The cost basis of any securities sold prior to maturity will be determined using the specific identification method.
Research and Development
R&D costs are expensed as incurred. Intangible assets related to in-licensing costs under license agreements with third parties are charged to expense unless we are able to determine that the licensing rights have an alternative future use in other R&D projects or otherwise.
Clinical Trial Accruals
Clinical trial costs are a component of R&D expenses. We accrue and recognize expenses for clinical trial activities performed by third parties based upon estimates of the percentage of work completed over the life of the individual study in accordance with agreements established with clinical research organizations and clinical trial sites. We determine the estimates through discussions with internal clinical personnel and external service providers as to the progress or stage of completion of trials or services and the agreed-upon fee to be paid for such services. Nonrefundable advance payments for goods and services that will be used or rendered in future R&D activities are deferred and recognized as expense in the period that the related goods are delivered, or services are performed.
22
Share-Based Compensation Expense
We measure the fair value of services received in exchange for grants of stock options based on the fair value of the award as of the grant date. We compute the fair value of stock options with time-based vesting using the BSM option-pricing model and recognize the cost of the equity awards over the period that services are provided to earn the award. For awards that contain a graded vesting schedule, and the only condition for vesting is a service condition, compensation cost is recognized on a straight-line basis over the requisite service period as if the award was, in substance, a single award. We recognize the impact of forfeitures in the period that the forfeiture occurs, rather than estimating the number of awards that are not expected to vest in accounting for share-based compensation. For stock options that are voluntarily surrendered by employees, all unrecognized compensation is immediately recognized in the period the options are cancelled.
Results of Operations
Three months ended September 30, 2024 and 2023
Revenue. As a late-stage rare disease company, we did not generate any revenue for the three months ended September 30, 2024 and 2023. We are at a late stage of clinical development and do not currently have any commercial products. Our existing product candidates will require extensive additional clinical evaluation, regulatory review, significant marketing efforts and substantial investment before they generate any revenues. We do not expect to be able to generate revenue from any of our product candidates for several years.
Research and development expenses. R&D expenses for the three months ended September 30, 2024 and 2023 were as follows (in thousands, except percentages):
| | September 30, | | Increase |
| |||||||
|
| 2024 |
| 2023 |
| | Amount |
| Percent |
| ||
Total R&D expenses | | $ | 12,754 | | $ | 12,214 | | $ | 540 |
| 4 | % |
The increase in R&D expenses of $0.5 million for the three months ended September 30, 2024 was primarily attributable to a net increase of $0.6 million in costs incurred for our two clinical candidate programs, of which the ersodetug program had an increase in spending of $1.9 million and the RZ402 program had a decrease in spending of $1.3 million. This increase was partially offset by a $0.2 million decrease in other preclinical toxicology expenses, and a $0.1 million increase in R&D related compensation and benefits.
The increase in ersodetug program costs of $1.9 million primarily was driven by an increase of $1.7 million for higher spending on drug substance and drug product manufacturing and process performance qualification batch productions, and a $0.2 million increase in clinical trial costs due to the ongoing enrollment of patients in the congenital HI Phase 3 clinical study.
RZ402 program costs decreased by $1.3 million due to a $1.2 million decrease in clinical operation costs related to the Phase 2 study, for which the final patients completed the protocol in April 2024, and a $0.1 million decrease in manufacturing preclinical, toxicology and other related program costs.
Compensation and benefits for our R&D workforce increased by approximately $0.1 million. Cash-based compensation and benefits increased by approximately $0.2 million due to an increase in performance-related bonus accruals.
General and administrative expenses. G&A expenses for the three months ended September, 2024 and 2023 were as follows (in thousands, except percentages):
| | September 30, | | Increase |
| |||||||
|
| 2024 |
| 2023 |
| | Amount |
| Percent |
| ||
Total G&A expenses | | $ | 4,187 | | $ | 3,700 | | $ | 487 |
| 13 | % |
The increase in G&A expenses of $0.5 million for the three months ended September 30, 2024, was primarily attributable to an increase in consulting expenses of $0.3 million related to business development and an increase of $0.2 million in compensation and benefits for our G&A workforce.
23
Cash-based compensation and benefits for our G&A workforce increased by approximately $0.5 million and was partially offset by a reduction of share-based compensation of $0.3 million. This $0.5 million increase in cash-based compensation was primarily attributable to an increase in the average number of G&A employees from 14 for the three months ended September 30, 2023, to 18 employees for the three months ended September 30, 2024. Share-based compensation for our G&A workforce decreased by $0.3 million from $1.0 million for the three months ended September 30, 2023 to $0.7 million for the three months ended September 30, 2024. This decrease in share-based compensation expense was primarily attributable to stock options that became fully vested during the fiscal year ended June 30, 2024.
Interest and other income. Interest and other income amounted to $1.6 million for the three months ended September 30, 2024, compared to $1.4 million for the three months ended September 30, 2023. This increase of $0.2 million was primarily due to an increase in the average value of money market funds and investments in marketable debt securities from $98.8 million at September 30, 2023 to $107.4 million as of September 30, 2024 as investment maturities were utilized to fund operating activities. Investments in marketable debt securities are our primary source of liquidity to fund clinical expenditures and other operating expenses.
Income taxes. For the three months ended September 30, 2024 and 2023, we did not recognize any income tax benefit due to our net losses, and our determination that a valuation allowance was required for all of our deferred income tax assets.
Liquidity and Capital Resources
Short-term Liquidity Requirements
As of September 30, 2024, we had cash and cash equivalents of $10.5 million, short-term marketable debt securities of $97.8 million and working capital was approximately $102.2 million. We have incurred cumulative net losses of $344.8 million since our inception and as a clinical stage company we have not generated any meaningful revenue to date. Our most significant contractual obligations consist of milestone payments pursuant to licensing agreements with XOMA Corporation (“XOMA”) and ActiveSite Pharmaceuticals, Inc. (“ActiveSite”) discussed below.
Our primary source of liquidity has historically been from the completion of private placements and public offerings of our equity securities, as well as proceeds from the issuance of debt securities. For the three months ended September 30, 2024, we received proceeds of $6.0 million related to a private placement of 1.5 million shares of common stock. For further information about the key terms and results of our equity financing activities completed in the fourth quarter of fiscal year 2024 for net proceeds of $62.6 million and the first quarter of fiscal year 2025 for net proceeds of $6.0 million, please refer to the discussion above under the caption Recent Developments. The completion of equity financings between May 2022 and September 2024 is the primary source of our total cash, cash equivalents and short-term investments in marketable debt securities of $108.3 million as of September 30, 2024.
In April 2022 we entered into a lease agreement for a new corporate headquarters facility in Redwood City, California. This lease, which commenced in October 2022, provides for total base rent payments of approximately $2.9 million through the expected expiration of the lease in July 2027. Additionally, in October 2023 we extended the lease agreement for our office facility in Bend, Oregon. This lease extension provides for additional base rent payment of approximately $0.4 million through the expiration date of the lease in February 2027.
Remaining cash payments related to existing contractual obligations for the 12-months ending September 30, 2025 include approximately (i) $0.7 million under all of our operating lease agreements, (ii) a milestone payment to XOMA of $5.0 million due upon dosing of the last patient in any of our Phase 3 clinical trials for ersodetug. Due to uncertainties in the timing associated with clinical trial activities, it is possible that the milestone payment due upon dosing of the last patient could be delayed beyond September 30, 2025.
Based on our cash and cash equivalents balance of $10.5 million and investments in short-term marketable debt securities balance of $97.8 million as of September 30, 2024, we believe we have adequate capital resources to meet all of our contractual obligations and conduct all planned activities to advance our clinical trials at least through the next 12 months.
Long-term Liquidity Requirements
Our most significant long-term contractual obligations consist of additional clinical and regulatory milestone payments up to $30.0 million payable to XOMA and additional milestone payments up to $25.0 million payable to ActiveSite. Of these amounts, we expect
24
that $5.0 million will be payable to XOMA during the 12-month period ending September 30, 2025 as discussed above under the caption Short-term Liquidity Requirements. Up to $50.0 million of the remaining milestone payments that may become payable are considered a long-term liquidity requirement. Due to uncertainties in the timing associated with clinical trial activities and regulatory approvals, there is even greater uncertainty in forecasting the timing of future clinical and regulatory milestone payments to XOMA and ActiveSite that may extend beyond the next 12 months.
In addition to the clinical and regulatory milestone payments discussed above, upon the future commercialization of ersodetug and RZ402 we will be obligated to pay additional milestone payments and royalties based on the net sales of the related products and alternative indication regulatory approvals to XOMA and ActiveSite for an aggregate up to $202.5 million. These future milestones include $185.0 million in potential payments to XOMA and $17.5 million to ActiveSite for various sales-based milestones and alternative indication regulatory approvals. No assurance can be provided that commercialization will ever be achieved for ersodetug and RZ402, in which case none of these future payments may ever be required.
In addition to our licensing obligations, we also have long-term contractual obligations under existing operating lease agreements of $0.8 million for each of the fiscal years ending June 30, 2026 and 2027. Based on our current forecast, we expect that our existing cash, cash equivalents and investments in marketable debt securities will be sufficient to fund our long-term contractual obligations and conduct all planned activities to advance our clinical trials at least through the third quarter of calendar year 2025.
In November 2023 we entered into the Sales Agreement that provides for an “at-the-market” offering for the sale of up to $50.0 million in shares of our common stock. The net proceeds under the Sales Agreement, if any, will be used to fund a portion of our long-term liquidity requirements including payments for general corporate purposes and to meet our working capital requirements. To date, we have not elected to sell any shares of our common stock pursuant to the Sales Agreement. Even if we elect to sell the entire $50.0 million of shares under the Sales Agreement, we will need to obtain additional equity or debt financing in order to fund all of our long-term liquidity requirements. Accordingly, no assurance can be given that we will be able to obtain sufficient sources of equity and debt financing on terms that are acceptable to our Board of Directors and stockholders.
Presented below is an additional discussion about the ongoing requirements pursuant to our license agreements with XOMA and ActiveSite, along with additional information about our ongoing financing activities that impacted our liquidity and capital resources through September 30, 2024.
XOMA License Agreement
In December 2017, we entered into a license agreement (the “XOMA License Agreement”) with XOMA through its wholly-owned subsidiary, XOMA (US) LLC, pursuant to which XOMA granted an exclusive global license to develop and commercialize XOMA 358 (formerly X358 or RZ358, now ersodetug) for all indications. In January 2019, the XOMA License Agreement was amended with an updated payment schedule, as well as revised the amount we were required to expend on development of ersodetug and related licensed products, and revised provisions with respect to our diligence efforts in conducting clinical studies.
Upon the achievement of certain clinical and regulatory events, we will be required to make up to $37.0 million in aggregate milestone payments to XOMA. Milestone payments made to date include a $2.0 million payment in January 2022 for the enrollment of the last patient of the Phase 2 clinical study and $5.0 million paid in May 2024 related to the first patient enrollment in a Phase 3 study. We record a liability for milestone payments in our financial statements on the date that we achieve the milestone event. The next milestone payment of $5.0 million will be due upon the enrollment of the last patient in a Phase 3 study, which we believe will occur in the next twelve months. Additionally, upon the future commercialization of ersodetug, we will be required to pay royalties to XOMA based on the net sales of the related products, and milestone payments up to an additional $185.0 million if future annual sales related to ersodetug exceed targets ranging from $100.0 million to $1.0 billion. Through September 30, 2024, no events have occurred that would result in the requirement to make additional milestone payments and no royalties have been incurred.
ActiveSite License Agreement
In August 2017, we entered into a Development and License Agreement with ActiveSite (“ActiveSite License Agreement”) pursuant to which we acquired the rights to ActiveSite’s PKI portfolio. We are planning to use the PKI Program to develop, file, manufacture, market and sell products for diabetic macular edema and other therapeutic indications. The ActiveSite License Agreement requires various milestone payments ranging from $1.0 million to $10.0 million when milestone events occur, up to an aggregate of $46.5 million
25
of aggregate milestone payments. The first milestone payment for $1.0 million was paid in December 2020 after completion of preclinical work and submission of an IND to the FDA for RZ402. The second milestone payment for $3.0 million became due upon dosing of the first patient in a Phase 2 study in February 2023. Remaining milestone payments under the ActiveSite License Agreement for various clinical and regulatory milestones amount to $25.0 million and milestones after commercial success or alternative indication approvals amount to $17.5 million. We will also be required to pay royalties equal to 2.0% of any sales of products that use the PKI Program. Through September 30, 2024, no events have occurred that would result in the requirement to make additional milestone payments and no royalties have been incurred.
Cash Flows Summary
Presented below is a summary of our operating, investing, and financing cash flows for the three months ended September 30, 2024 and 2023 (in thousands):
|
| 2024 |
| 2023 |
| Change | |||
Net cash provided by (used in): | |
| | |
| | |
| |
Operating activities | | $ | (16,014) | | $ | (10,585) | | $ | (5,429) |
Investing activities | |
| (49,410) | |
| 2,606 | |
| (52,016) |
Financing activities | |
| 5,500 | |
| — | |
| 5,500 |
Cash Used in Operating Activities
For the three months ended September 30, 2024 and 2023, cash used in operating activities amounted to $16.0 million and $10.6 million, respectively. The key components in the calculation of our cash used in operating activities are as follows (in thousands):
|
| 2024 |
| 2023 |
| Change | |||
Net loss | | $ | (15,378) | | $ | (14,524) | | $ | (854) |
Non-cash expenses |
| | 1,550 |
| | 1,995 |
| | (445) |
Accretion of discounts and amortization of premiums on marketable debt securities, net |
| | (832) |
| | 973 |
| | (1,805) |
Changes in operating assets and liabilities, net |
| | (1,354) |
| | 971 |
| | (2,325) |
Total | | $ | (16,014) | | $ | (10,585) | | $ | (5,429) |
For the three months ended September 30, 2024, our net loss was $15.4 million compared to $14.5 million for the three months ended September 30, 2023. For further discussion about changes in our operating results for the three months ended September 30, 2024 and 2023, please refer to Results of Operations above.
For the three months ended September 30, 2024 and 2023, our non-cash expenses of $1.6 million and $2.0 million, respectively, were primarily attributable to share-based compensation expense, and non-cash lease expense. For the three months ended September 30, 2024 and 2023, amortization of premiums exceeded accretion of discounts on marketable debt securities by $0.8 million. For the three months ended September 30, 2023, accretion of discounts exceeded amortization of premiums on marketable debt securities by $1.0 million. Accretion of discounts and amortization of premiums on marketable debt securities are a component of interest income that results from investing in marketable debt securities at premiums and discounts. For the three months ended September 30, 2024, net changes in operating assets and liabilities decreased operating cash flow by $1.4 million, primarily driven by a net decrease of $1.3 million in accounts payable and other accrued liabilities, and an increase in prepaid expenses and other assets of $0.1 million. For the three months ended September 30, 2023, net changes in operating assets and liabilities increased operating cash flow by $1.0 million, primarily driven by a net increase of $1.9 million in accounts payable and other accrued liabilities. This amount was partially offset by cash outflows resulting from an increase in prepaid expenses and other assets of $0.9 million.
Cash Provided by or Used in Investing Activities
For the three months ended September 30, 2024, our net cash used in investing activities amounted to $49.4 million. For the three months ended September 30, 2024, we received proceeds of $23.8 million upon the maturity of certain marketable debt securities. These cash proceeds from maturities, along with certain proceeds from the 2024 Public Underwritten Offering in June 2024 and 2024 Private Placement in July 2024, were used to purchase a total of $73.2 million of marketable debt securities.
26
For the three months ended September 30, 2023, our net cash provided by investing activities amounted to $2.6 million, primarily related to the maturity of marketable debt securities $18.6 million partially offset by $16.0 million of purchases of marketable debt securities.
Cash Provided by or Used in Financing Activities
For the three months ended September 30, 2024, our net cash provided by financing activities was $5.5 million. Cash inflows amounted to $6.1 million consisting of $6.0 of proceeds from the 2024 Private Placement and proceeds of $0.1 million of proceeds the exercise of employee stock options. These amounts were partially offset by cash outflows related to the payments of offering costs of $0.6 million incurred in connection with the 2024 Public Underwritten Offering.
There was no net cash provided by or used in financing activities for the three months ended September 30, 2023.
Recent Accounting Pronouncements
Please refer to Note 1 to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Report regarding the impact of recent accounting pronouncements.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet transactions for the periods covered by this Report.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (our Principal Executive and Financial Officer), of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (“Exchange Act”). Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Principal Executive and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Based on that assessment under those criteria, our management has determined that our internal control over financial reporting was effective as of September 30, 2024.
Changes in Internal Controls over Financial Reporting
During the period covered by this Quarterly Report on Form 10-Q, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
27
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
Our Risk Factor disclosures are set forth in Item 1A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2024 filed with the Securities and Exchange Commission (“SEC”) on September 19, 2024. As of the date of this Report, there have been no material changes with respect to the Risk Factor disclosures.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Item 6. Exhibits.
The following exhibits are incorporated by reference or filed as part of this Quarterly Report on Form 10-Q:
Exhibit Number |
| Description of Exhibits |
31.1* | | |
32.1* | | |
101.INS* | | Inline XBRL Instance Document |
101.SC* | | Inline XBRL Taxonomy Extension Schema |
101.CA* | | Inline XBRL Taxonomy Extension Calculation Linkbase |
101.DEF* | | Inline XBRL Taxonomy Extension Definition Linkbase |
101.LA* | | Inline XBRL Taxonomy Extension Label Linkbase |
101.PRE* | | Inline XBRL Taxonomy Extension Presentation Linkbase |
104 | | Cover Page Interactive Data File, formatted in Inline XBRL (included as Exhibit 101) |
* Filed herewith.
28
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | REZOLUTE, INC. |
| | |
Date: November 7, 2024 | By: | /s/ Nevan Charles Elam |
| | Nevan Charles Elam |
| | Chief Executive Officer |
| | (Principal Executive and Financial Officer) |
29
EXHIBIT 31.1
CERTIFICATION OF PERIODIC REPORT UNDER SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Nevan Charles Elam, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Rezolute, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects, the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report. |
| 4. | As the Registrant's certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and |
| 5. | As the Registrant's certifying officer, I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors: |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. |
Date:November 7, 2024
| By: | /s/ Nevan Charles Elam |
| | Nevan Charles Elam |
| | Chief Executive Officer |
| | (Principal Executive and Financial Officer) |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Rezolute, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Nevan Elam, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date:November 7, 2024
By: | /s/ Nevan Charles Elam | |
| Nevan Charles Elam | |
| | Chief Executive Officer |
| (Principal Executive and Financial Officer) |
A signed original of this written statement required by Section 906 has been provided to Rezolute, Inc. and will be retained by Rezolute, Inc. to be furnished to the Securities and Exchange Commission or its staff upon request.