3……………….

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the Quarterly Period Ended March 31, 2023


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

For the Transition Period from___ to___.

Commission File Number 001-35963

NEUBASE THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)



Delaware		46-5622433
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

350 Technology Drive, Pittsburgh, PA 15219

(Address of principal executive offices and zip code)

(412) 763-3350

(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, $0.0001 par value per share	NBSE	The Nasdaq Stock Market LLC

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. Yes ☒ 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ 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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of May 8, 2023, 33,810,356 shares of the common stock, par value $0.0001, of the registrant were outstanding.

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Table of Contents


PART I.		1

ITEM 1.	FINANCIAL STATEMENTS	1

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	13

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	18

ITEM 4.	CONTROLS AND PROCEDURES	18

PART II.		19

ITEM 1.	LEGAL PROCEEDINGS	19

ITEM 1A.	RISK FACTORS	19

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	20

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	20

ITEM 4.	MINE SAFETY DISCLOSURES	20

ITEM 5.	OTHER INFORMATION	20

ITEM 6.	EXHIBITS	21

SIGNATURES		22

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Introductory Note

On April 21, 2023, the Company’s Board of Directors approved a change in the Company’s fiscal year end from September 30 to December 31, effective for the fiscal year beginning January 1, 2023 and ending December 31, 2023. As a result of the change in year end, the Company will file a Transition Report on Form 10-QT for the period from October 1, 2022 through December 31, 2022. The Company’s 2023 fiscal year will run from January 1, 2023 through December 31, 2023.

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PART I.

ITEM 1. FINANCIAL STATEMENTS

NeuBase Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)


	March 31,		December 31,
	2023		2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	13,845,045	$	17,386,326
Prepaid insurance		45,444		188,266
Other prepaid expenses and current assets		323,102		391,655
Total current assets		14,213,591		17,966,247

EQUIPMENT, net		1,697,994		1,934,100

OTHER ASSETS
Right-of-use asset, operating lease asset		5,296,545		5,409,574
Security deposit		250,783		273,215
Total other assets		5,547,328		5,682,789

TOTAL ASSETS	$	21,458,913	$	25,583,136

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	590,189	$	369,505
Accrued expenses and other current liabilities		800,565		1,227,656
Operating lease liabilities		479,493		469,118
Finance lease liabilities		49,816		78,987
Total current liabilities		1,920,063		2,145,266

Long-term operating lease liability		5,090,757		5,214,074
TOTAL LIABILITIES		7,010,820		7,359,340

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding as of March 31, 2023 and December 31, 2022		—		—
Common stock, $0.0001 par value; 250,000,000 shares authorized; 33,810,356 and 33,155,356 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		3,381		3,315
Additional paid-in capital		125,651,217		125,333,873
Accumulated deficit		(111,206,505)		(107,113,392)
TOTAL STOCKHOLDERS’ EQUITY		14,448,093		18,223,796

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	21,458,913	$	25,583,136

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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NeuBase Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)


	Three Months Ended March 31,
	2023		2022
OPERATING EXPENSES
General and administrative	$	2,917,315	$	3,093,713
Research and development		1,240,246		6,835,670
Restructuring		6,727		—
TOTAL OPERATING EXPENSES		4,164,288		9,929,383

LOSS FROM OPERATIONS		(4,164,288)		(9,929,383)

OTHER INCOME (EXPENSE)
Interest expense		(2,354)		(3,316)
Interest income		178,377		3,445
Other income (expense), net		(104,848)		5,225
Total other income (expense), net		71,175		5,354

NET LOSS	$	(4,093,113)	$	(9,924,029)

BASIC AND DILUTED LOSS PER SHARE	$	(0.12)	$	(0.30)

WEIGHTED AVERAGE SHARES OUTSTANDING:
BASIC AND DILUTED		33,548,356		32,683,263

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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NeuBase Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the Three Months Ended March 31, 2023 and 2022

(Unaudited)


				Additional				Total
	Common Stock			Paid-In				Stockholders’
	Shares	Amount		Capital		Accumulated Deficit		Equity
Balance as of December 31, 2022	33,155,356	$	3,315	$	125,333,873	$	(107,113,392)	$	18,223,796
Stock-based compensation expense	—		—		316,689		—		316,689
Exercise of stock options	655,000		66		655		—		721
Net loss	—		—		—		(4,093,113)		(4,093,113)
Balance as of March 31, 2023	33,810,356	$	3,381	$	125,651,217	$	(111,206,505)	$	14,448,093


				Additional				Total
	Common Stock			Paid-In				Stockholders’
	Shares	Amount		Capital		Accumulated Deficit		Equity
Balance as of December 31, 2021	32,768,184	$	3,276	$	123,827,646	$	(76,696,719)	$	47,134,203
Stock-based compensation expense	—		—		952,828		—		952,828
Issuance of restricted stock for services	(509,527)		(51)		51		—		—
Net loss	—		—		—		(9,924,029)		(9,924,029)
Balance as of March 31, 2022	32,258,657	$	3,225	$	124,780,525	$	(86,620,748)	$	38,163,002

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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NeuBase Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended March 31,
	2023		2022
Cash flows from operating activities
Net loss	$	(4,093,113)	$	(9,924,029)
Adjustments to reconcile net loss to net cash used in operating activities
Stock-based compensation		316,689		952,828
Depreciation and amortization		187,444		190,917
Loss on disposal of fixed assets		53,609		(7,595)
Amortization of right-of-use assets		113,029		122,353
Changes in operating assets and liabilities
Prepaid insurance, other prepaid expenses and current assets		211,375		(103,760)
Security deposit		22,432		(19,600)
Accounts payable		244,012		427,530
Accrued expenses and other current liabilities		(390,446)		289,507
Operating lease liability		(112,942)		(120,564)
Net cash used in operating activities		(3,447,911)		(8,192,413)

Cash flows from investing activities
Purchase of laboratory and office equipment		(13,447)		(148,411)
Proceeds received on sale of equipment		8,500		—
Net cash used in investing activities		(4,947)		(148,411)
Cash flows from financing activities
Principal payment of finance lease liability		(29,171)		(27,120)
Payment of issuance costs for equity commitment		(59,973)		—
Proceeds from exercise of stock options		721		—
Net cash used in financing activities		(88,423)		(27,120)
Net decrease in cash and cash equivalents		(3,541,281)		(8,367,944)
Cash and cash equivalents, beginning of period		17,386,326		47,326,060
Cash and cash equivalents, end of period	$	13,845,045	$	38,958,116

Supplemental disclosure of cash flow information:
Non-cash investing and financing activities:
Purchases of laboratory and office equipment in accounts payable	$	13,447	$	—
Right-of-use asset obtained in exchange for operating lease liabilities	$	—	$	164,613

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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NeuBase Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Organization, Description of Business and Liquidity

NeuBase Therapeutics, Inc. and its subsidiaries (the “Company” or “NeuBase”) is developing a modular peptide-nucleic acid (“PNA”) antisense oligo (“PATrOL™”) platform to address genetic diseases, with a single, cohesive approach. NeuBase plans to use its platform to address diseases which have a genetic source, with an initial focus on gene silencing in myotonic dystrophy type 1 (“DM1”), Huntington’s disease (“HD”), and oncology, and in gene editing applications.

NeuBase is a preclinical-stage biopharmaceutical company and continues to develop its clinical and regulatory strategy with its internal research and development team, with a view toward prioritizing market introduction as quickly as possible. NeuBase’s disclosed programs are NT-0100 in HD, NT-0200 in DM1 and NT-0300 in KRAS-driven cancers.

The NT-0100 program is a PATrOL™-enabled therapeutic program being developed to target the mutant expansion in the HD DNA or RNA. The NT-0100 program includes proprietary PNAs which have the potential to be highly selective for the mutant copy of the gene versus the wild-type allele, the expectation being that the resultant therapy will be applicable for all HD patients as it directly targets the expansion itself, and the potential to be delivered systemically and address the brain and whole-body manifestations of the disease. PATrOL™-enabled drugs also have the unique ability to open DNA and RNA secondary structures and bind to either the primary nucleotide sequences or the secondary and/or tertiary structures.

The NT-0200 program is a PATrOL™-enabled therapeutic program being developed to target the mutant expansion in the DM1 disease RNA. The NT-0200 program has the potential to be highly selective for the mutant transcript versus the wild-type transcribed allele and the expectation to be effective for nearly all DM1 patients as it directly targets the expansion itself.

The NT-0300 program is a PATrOL™-enabled therapeutic program being developed to target the mutated KRAS gene. The program is comprised of candidate compounds that target two activating mutations in the KRAS gene at the DNA or RNA levels: G12D and G12V. NeuBase believes these candidate compounds, and subsequent further optimized compounds, have the potential to inhibit transcription and/or translation of the oncogenic mutations and slow or stop tumor growth.

In October 2022, the Company announced plans to expand its focus to include the advancement of the differentiated gene editing capabilities of its platform. The Company is currently identifying and evaluating multiple indications for potential future development.

Liquidity and Going Concern

The Company has had no revenues from product sales and has incurred operating losses since inception. As of March 31, 2023, the Company had $13.8 million in cash and cash equivalents, and during the three months ended March 31, 2023, incurred a loss from operations of $4.2 million and used $3.4 million of cash in operating activities.

The accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue to operate as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to its ability to continue as a going concern.

The Company’s future liquidity and capital funding requirements will depend on numerous factors, including:

●

its ability to raise additional funds to finance its operations;

●

its ability to maintain compliance with the listing requirements of The Nasdaq Capital Market (“Nasdaq”);

●

the outcome, costs and timing of preclinical and clinical trial results for the Company’s current or future product candidates;

●

litigation expenses and the extent and amount of any indemnification claims;

●

the emergence and effect of competing or complementary products;

●

its ability to maintain, expand and defend the scope of its intellectual property portfolio, including the amount and timing of any payments the Company may be required to make, or that it may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;

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NeuBase Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

●

its ability to retain its current employees and the need and ability to hire additional management and scientific and medical personnel;

●

the trading price of its common stock; and

●

its ability to increase the number of authorized shares outstanding to facilitate future financing events.

The Company will likely need to raise substantial additional funds through issuance of equity or debt or completion of a licensing transaction for one or more of the Company’s pipeline assets. If the Company is unable to maintain sufficient financial resources, its business, financial condition and results of operations will be materially and adversely affected. This could affect future development and business activities and potential future clinical studies and/or other future ventures. Failure to obtain additional equity or debt financing will have a material, adverse impact on the Company’s business operations. There can be no assurance that the Company will be able to obtain the needed financing on acceptable terms or at all. Additionally, any equity financings will likely have a dilutive effect on the holdings of the Company’s existing stockholders.

The Company expects to incur substantial operating losses and negative cash flows from operations for the foreseeable future. Accordingly, there are material risks and uncertainties that raise substantial doubt about the Company’s ability to continue as a going concern. We will need to seek additional equity or debt financing to provide the capital required to maintain or expand our operations.

Change in Year End

2. Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended September 30, 2022 included in the Company’s Annual Report on Form 10-K (the “Annual Report”) filed with the U.S. Securities and Exchange Commission (“SEC”) on December 21, 2023. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated during the consolidation process. The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, the accompanying unaudited condensed consolidated financial statements for the periods presented reflect all adjustments, consisting of only normal, recurring adjustments, necessary to fairly state the Company’s financial position, results of operations and cash flows. The unaudited condensed consolidated financial statements for the interim periods are not necessarily indicative of results for the full year. The preparation of these unaudited condensed consolidated financial statements requires the Company to make estimates and judgments that affect the amounts reported in the financial statements and the accompanying notes. The Company’s actual results may differ from these estimates under different assumptions or conditions.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. The most significant estimates in the Company’s unaudited condensed consolidated financial statements relate to the valuation of stock-based compensation and the valuation allowance of deferred tax assets resulting from net operating losses. These estimates and assumptions are based on current facts, historical experience and various other

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NeuBase Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources.

The Company assesses and updates estimates each period to reflect current information, such as the considerations related to the impacts that the current economic environment could have on its significant accounting estimates. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during each period. Diluted net loss per share includes the dilutive effect, if any, from the potential exercise or conversion of securities, such as convertible debt, warrants and stock options that would result in the issuance of incremental shares of common stock. In computing the basic and diluted net loss per share applicable to common stockholders, the weighted average number of shares remains the same for both calculations due to the fact that when a net loss exists, dilutive shares are not included in the calculation as the impact is anti-dilutive.

The following potentially dilutive securities outstanding as of March 31, 2023 and 2022 have been excluded from the computation of diluted weighted average shares outstanding, as they would be anti-dilutive:


	As of March 31,
	2023	2022
Common stock purchase options	6,446,509	8,421,475
Restricted stock units	396,460	—
Common stock purchase warrants	180,000	875,312
	7,022,969	9,296,787

Recent Accounting Pronouncements

In November 2021, the FASB issued ASU No. 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance”, which amends disclosures to increase transparency of government assistance, including (i) the types of assistance, (ii) accounting for the assistance and (iii) the effect of the assistance on an entity’s financial statements. The standard is effective for all business entities for annual periods beginning after December 15, 2021; therefore, it will be effective beginning with the Company’s financial statements issued for the fiscal year ending December 31, 2022. While the adoption of this guidance will not have an impact on the Company’s consolidated balance sheet or statement of operations, the adoption of this guidance may require additional annual disclosures in the Company’s financial statements for the fiscal year ending December 31, 2023, which the Company is currently in the process of assessing.

In June 2022, the FASB issued ASU 2022-03, “ASC Subtopic 820 Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions” (“ASU 2022-03”). ASU 2022-03 amends ASC 820 to clarify that a contractual sales restriction is not considered in measuring an equity security at fair value and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. ASU 2022-03 applies to both holders and issuers of equity and equity-linked securities measured at fair value. The amendments in this ASU are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the impact of this pronouncement on its consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments- Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). This guidance introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. ASU 2016-13 also provides updated guidance regarding the impairment of available-for-sale debt securities and includes additional disclosure requirements. The new guidance is effective for public business entities that meet the definition of a Smaller Reporting Company as defined by the Securities and Exchange Commission for

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NeuBase Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

interim and annual periods beginning after December 15, 2022. The Company adopted this guidance as of January 1, 2023, with minimal impact upon adoption.

3. Other Prepaid Expenses and Current Assets

The Company’s prepaid expenses and other current assets consisted of the following:


	As of March 31,		As of December 31,
	2023		2022
	Unaudited		Unaudited
Prepaid research and development expense	$	64,032	$	67,027
Accounts receivable		—		150,000
Other prepaid expenses and other current assets		259,070		174,628
Total	$	323,102	$	391,655

4. Equipment

The Company’s equipment consisted of the following:


	As of March 31,		As of December 31,
	2023		2022
	Unaudited		Unaudited
Laboratory equipment	$	2,964,067	$	3,048,579
Office equipment		259,978		259,978
Leasehold improvements		31,405

SEC Form 10-Q filed by NeuBase Therapeutics Inc.