kprx-20230930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


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

For the quarterly period ended September 30, 2023


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

For the transition period from ___________ to ___________

Commission File No. 001-36672

KIORA PHARMACEUTICALS, INC.

(Exact Name of Registrant as Specified in Its Charter)


Delaware			98-0443284
(State or other jurisdiction of Incorporation or organization)			(I.R.S. Employer Identification No.)

332 Encinitas Blvd.

Suite 102

Encinitas, CA 92024

(Address of Principal Executive Offices, including zip code)

(858) 224-9600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	KPRX	The Nasdaq Capital Market

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. x Yes o No

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit). x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or 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

Non-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 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)

o Yes x No

On November 6, 2023, there were 7,689,240 shares of the registrant’s common stock outstanding.

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KIORA PHARMACEUTICALS, INC.

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QUARTERLY REPORT ON FORM 10-Q

For the Period Ended September 30, 2023

INDEX


		Page
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	4

	Condensed Consolidated Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022	4

	Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) for the Three and Nine Months Ended September 30, 2023 and 2022	5

	Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the Three and Nine Months Ended S eptember 30, 2023 and 2022	6

	Condensed Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended September 30, 2023 and 2022	10

	Notes to Condensed Consolidated Financial Statements (unaudited)	11

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	29

Item 4.	Controls and Procedures	29

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	31

Item 1A.	Risk Factors	31

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31

Item 3.	Defaults Upon Senior Securities	32

Item 4.	Mine Safety Disclosures	32

Item 5.	Other Information	32

Item 6.	Exhibits	32

SIGNATURES		33

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FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains statements that are not statements of historical fact and are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The forward-looking statements are principally, but not exclusively, contained in “Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited to, statements about management’s confidence or expectations, and our plans, objectives, expectations, and intentions that are not historical facts. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “goals,” “sees,” “estimates,” “projects,” “predicts,” “intends,” “think,” “potential,” “objectives,” “optimistic,” “strategy,” and similar expressions intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

•the timing and success of preclinical studies and clinical trials conducted by us and our development partners;

•the ability to obtain and maintain regulatory approval of our product candidates, and the labeling for any approved products;

•the scope, progress, expansion, and costs of developing and commercializing our product candidates;

•the size and growth of the potential markets for our product candidates and the ability to serve those markets;

•our expectations regarding our expenses and revenue, the sufficiency of our cash resources and needs for additional financing;

•the rate and degree of market acceptance of any of our product candidates;

•our expectations regarding competition;

•our anticipated growth strategies;

•our ability to attract or retain key personnel;

•our ability to establish and maintain development partnerships;

•our expectations regarding federal, state and foreign regulatory requirements;

•regulatory developments in the U.S. and foreign countries;

•our ability to obtain and maintain intellectual property protection for our product candidates;

•the anticipated trends and challenges in our business and the market in which we operate; and

•the effects of global pandemics such as the COVID-19 pandemic and the global response thereto.

We discuss many of these risks in detail under the heading “Item 1A. Risk Factors” beginning on page 23 of our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, or the SEC, on March 23, 2023, or the Annual Report. You should carefully review all these factors, as well as other risks described in our public filings, and you should be aware that there may be other factors, including factors of which we are not currently aware, that could cause these differences.

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Also, these forward-looking statements represent our estimates and assumptions only as of the date of this report. We may not update these forward-looking statements, even though our situation may change in the future, unless we have obligations under the federal securities laws to update and disclose material developments related to previously disclosed information.

Kiora Pharmaceuticals, Inc. is referred to herein as “we,” “our,” “us,” and “the Company.”

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

KIORA PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


	September 30, 2023 (unaudited)		December 31, 2022
ASSETS
Current Assets:
Cash and Cash Equivalents	$	5,400,498	$	5,964,556
Prepaid Expenses and Other Current Assets	239,391		343,069
Tax Receivables	1,343,087		1,373,041
Total Current Assets	6,982,976		7,680,666
Non-Current Assets:
Property and Equipment, Net	38,616		55,177
Restricted Cash	4,031		49,260
Intangible Assets and In-Process R&D, Net	8,820,100		10,743,164
Operating Lease Assets with Right-of-Use	18,725		116,992
Other Assets	31,995		33,000
Total Assets	$	15,896,443	$	18,678,259
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts Payable	$	125,412	$	1,008,262
Accrued Expenses	1,461,711		1,835,934
Operating Lease Liabilities	18,725		105,782
Contingent Consideration, short-term	495,000		322,385
Total Current Liabilities	2,100,848		3,272,363
Non-Current Liabilities:
Contingent Consideration	5,002,505		3,309,175
Deferred Tax Liability	689,121		689,121
Total Non-Current Liabilities	5,691,626		3,998,296
Total Liabilities	7,792,474		7,270,659
Commitments and Contingencies (Notes 9 and 10)
Stockholders’ Equity:
Preferred Stock, $0.01 Par Value: 10,000,000 shares authorized at September 30, 2023 and December 31, 2022; 3,750 designated Series A, 0 shares issued and outstanding at September 30, 2023 and December 31, 2022; 10,000 designated Series B, 0 shares issued and outstanding at September 30, 2023 and December 31, 2022; 10,000 shares designated Series C, 0 shares issued and outstanding at September 30, 2023 and December 31, 2022; 20,000 shares designated Series D, 7 shares issued and outstanding at September 30, 2023 and December 31, 2022; 1,280 shares designated Series E, 0 shares issued and outstanding at September 30, 2023 and December 31, 2022; 3,908 shares designated Series F, 420 and 0 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	5		—
Common Stock, $0.01 Par Value: 50,000,000 shares authorized; 7,689,240 and 1,796,472 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	76,915		17,986
Additional Paid-In Capital	153,001,469		146,035,314
Accumulated Deficit	(144,708,249)		(134,462,959)
Accumulated Other Comprehensive Loss	(266,171)		(182,741)
Total Stockholders’ Equity	8,103,969		11,407,600
Total Liabilities and Stockholders’ Equity	$	15,896,443	$	18,678,259

See Accompanying Notes to Condensed Consolidated Financial Statements.

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KIORA PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)


	Three Months Ended September 30,				Nine Months ended September 30,
	2023		2022		2023		2022
Operating Expenses:
General and Administrative	$	1,415,844	$	2,033,367	$	3,782,596	$	5,500,036
Research and Development	1,085,010		1,332,153		2,915,392		2,607,308
In-Process R&D Impairment	1,904,314		—		1,904,314		—
Executive Severance	—		—		—		962,833
Change in Fair Value of Contingent Consideration	1,513,400		337,515		1,865,945		604,348
Total Operating Expenses	5,918,568		3,703,035		10,468,247		9,674,525
Operating Loss	(5,918,568)		(3,703,035)		(10,468,247)		(9,674,525)
Other Income (Expense), Net:

Change in Fair Value of Warranty Liability	—		(1,425,102)		—		(1,425,102)
Interest Income, Net	49,912		7,861		128,464		9,315
Other Income, Net	105,715		937		94,493		5,148
Total Other Income (Expense), Net	155,627		(1,416,304)		222,957		(1,410,639)
Net Loss	$	(5,762,941)	$	(5,119,339)	$	(10,245,290)	$	(11,085,164)
Deemed Dividends from Warrant Reset Provision	(530,985)		—		(530,985)		—
Net Loss Attributable to Common Shareholders	$	(6,293,926)	$	(5,119,339)	$	(10,776,275)	$	(11,085,164)
Net Loss per Common Share - Basic and Diluted	$	(0.89)	$	(6.03)	$	(2.73)	$	(22.06)
Weighted Average Shares Outstanding - Basic and Diluted	7,106,900		848,534		3,948,181		502,436

Other Comprehensive Loss:
Net Loss	$	(5,762,941)	$	(5,119,339)	$	(10,245,290)	$	(11,085,164)
Foreign Currency Translation Adjustments	(40,310)		(38,537)		(83,430)		(176,967)
Comprehensive Loss	$	(5,803,251)	$	(5,157,876)	$	(10,328,720)	$	(11,262,131)

See Accompanying Notes to Condensed Consolidated Financial Statements.

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KIORA PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Three Months Ended September 30, 2023 and 2022

(unaudited)


	Preferred Stock			Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balance at June 30, 2023	957	$	10	6,910,720	$	69,129	$	152,744,385	$	(138,945,308)	$	(225,861)	$	13,642,355

Stock-Based Compensation	—	—		—	—		264,865		—		—		264,865

Conversion of Series F Preferred Stock into Common Stock	(530)	(5)		481,770	4,818		(4,813)		—		—		—

Issuance of Common Stock from Restricted Stock Awards	—	—		296,750	2,968		(2,968)		—		—		—

Foreign Currency Translation Adjustment	—	—		—	—		—		—		(40,310)		(40,310)

Net Loss	—	—		—	—		—		(5,762,941)		—		(5,762,941)

Balance at September 30, 2023	427	$	5	7,689,240	$	76,915	$	153,001,469	$	(144,708,249)	$	(266,171)	$	8,103,969

See Accompanying Notes to Condensed Consolidated Financial Statements.

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KIORA PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)

Three Months Ended September 30, 2023 and 2022

(unaudited)


	Preferred Stock			Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balance at June 30, 2022	7	$	—	326,686	$	3,266	$	135,828,737	$	(126,845,174)	$	(224,861)	$	8,761,968

Stock-Based Compensation	—	—		—	—		130,153		—		—		130,153

Issuance of Stock from Public Offering, Net of Offering Costs of $505,020	—	—		592,392	5,924		2,456,914		—		—		2,462,838

Issuance of Series E Preferred Stock from Public Offering, Net of Offering Costs of $136,401	1,280	13		—	—		665,178		—		—		665,191

Conversion of Series E Preferred Stock into Common Stock	(1,280)	(13)		160,000	1,600		(1,587)		—		—		—

Reclassification of Warrant Liability	—	—		—	—		3,674,791		—		—		3,674,791

Adjustments Due to the Rounding Impact from the Reverse Stock Split for Fractional Shares	—	—		(33)	—		(15,629)		—		—		(15,629)

Foreign Currency Translation Adjustment	—	—		—	—		—		—		(38,537)		(38,537)

Net Loss	—	—		—	—		—		(5,119,339)		—		(5,119,339)

Balance at September 30, 2022	7	$	—	1,079,045	$	10,790	$	142,738,557	$	(131,964,513)	$	(263,398)	$	10,521,436

See Accompanying Notes to Condensed Consolidated Financial Statements.

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KIORA PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Nine Months Ended September 30, 2023 and 2022

(unaudited)


	Preferred Stock			Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balance at December 31, 2022	7	$	—	1,796,472	$	17,986	$	146,035,314	$	(134,462,959)	$	(182,741)	$	11,407,600

Stock-Based Compensation	—	—		—	—		572,600		—		—		572,600

Issuance of Stock from Public Offering, Net of Offering Costs of $729,038	3,908	39		2,197,628	21,976		5,573,947		—		—		5,595,962

Issuance of Common Stock from Private Placement, Net of Offering Costs of $84,285	—	—		52,798	528		115,187		—		—		115,715

Issuance of Common Stock from ELOC Purchases	—	—		125,000	1,250		441,060		—		—		442,310

Issuance of Common Stock from Warrant Exercises	—	—		50,000	500		298,000		—		—		298,500

Conversion of Series F Preferred Stock into Common Stock	(3,488)	(34)		3,170,592	31,707		(31,673)		—		—		—

Issuance of Common Stock from Restricted Stock Awards	—	—		296,750	2,968		(2,968)		—		—		—

Foreign Currency Translation Adjustment	—	—		—	—		—		—		(83,430)		(83,430)

Net Loss	—	—		—	—		—		(10,245,290)		—		(10,245,290)

Balance at September 30, 2023	427	$	5	7,689,240	$	76,915	$	153,001,469	$	(144,708,249)	$	(266,171)	$	8,103,969

See Accompanying Notes to Condensed Consolidated Financial Statements.

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KIORA PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)

Nine Months Ended September 30, 2023 and 2022

(unaudited)


	Preferred Stock			Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balance at December 31, 2021	7	$	—	316,599	$	3,166	$	135,541,662	$	(120,879,349)	$	(86,431)	$	14,579,048

SEC Form 10-Q filed by Kiora Pharmaceuticals Inc.