plxp20220331

plxp20220331_10q.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

☒	Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended March 31, 2022

☐	Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number 001-36351

Commission File Number 001-36351

PLx Pharma Inc.

(Exact name of registrant as specified in its charter)

Delaware

46-4995704

State or other jurisdiction of

incorporation or organization

(I.R.S. Employer

Identification No.)

9 Fishers Lane, Suite E

Sparta, NJ

07871

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code (973) 409-6541

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

Common Stock, $0.001 par value	PLXP	The NASDAQ Capital Market

(Title of each class)	(Trading Symbol)	(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. ☒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 ☐

		Page #

PART I -	FINANCIAL INFORMATION	6

Item 1.	Consolidated Financial Statements (unaudited)	6

	Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021 (unaudited)	6

	Consolidated Statements of Operations for the Three Months Ended March 31, 2022 and 2021 (unaudited)	7

	Consolidated Statements of Changes in Series A and Series B Convertible Preferred Stock and Stockholders’ Equity for the Three Months Ended March 31, 2022 and 2021 (unaudited)	8

	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021 (unaudited)	9

	Notes to Consolidated Financial Statements (unaudited)	10

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	21

Item 4.	Controls and Procedures	21

PART II -	OTHER INFORMATION	22

Item 1.	Legal Proceedings	22

Item1A.	Risk Factors	22

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22

Item 3.	Defaults Upon Senior Securities	22

Item 4.	Mine Safety Disclosure	22

Item 5.	Other Information	22

Item 6.	Exhibits	22

	Signatures	24

	Certificates

	●	our ability to maintain regulatory approval of VAZALORE™ 81 mg and VAZALORE™ 325 mg (referred to together as “VAZALORE”) and any future product candidates;
	●	the benefits of the use of VAZALORE;
	●	the projected dollar amounts of future sales of established and novel technologies designed to deliver oral non-steroidal anti-inflammatory drugs (“NSAIDs”) and other analgesics while limiting direct contact with the stomach lining;
	●	our ability to successfully further commercialize our VAZALORE products, or any future product candidates;
	●	the rate and degree of market acceptance of our VAZALORE products or any future product candidates;
	●	our expectations regarding government and third-party payor coverage and reimbursement;
	●	our ability to scale up manufacturing of our VAZALORE products to commercial scale;
	●	our ability to successfully build and maintain a specialty sales force and commercial infrastructure or collaborate with a firm that has these capabilities;
	●	our ability to compete with companies currently producing gastrointestinal(“GI”)-safety designed technologies for oral NSAIDs and other analgesics;
	●	our reliance on third parties to conduct our clinical studies;
	●	our reliance on third-party contract manufacturers to manufacture and supply our product candidates for us;
	●	our reliance on third-party warehouse and distribution centers to store and deliver our products to retail trade locations;
	●	our reliance on retail trade customers to maintain an adequate supply of VAZALORE on store shelves or displays;
	●	our ability to obtain supply of raw materials;
	●	our reliance on our current and any potential collaboration partners’ performance over which we do not have control;
	●	our ability to retain and recruit key personnel, including development of a sales and marketing function;
	●	our ability to obtain and maintain intellectual property protection for our VAZALORE products or any future product candidates;
	●	our estimates of our expenses, ongoing losses, future revenue, capital requirements and our need for or ability to obtain additional financing;
	●	our ability to identify, develop, acquire and in-license new products and product candidates;
	●	our ability to successfully establish and successfully maintain appropriate collaborations and derive significant revenue from those collaborations, including but not limited to any milestone payments or royalties;
	●	legal, political, judicial and regulatory changes;
	●	any impact of the COVID-19 pandemic on our business and financial results;
	●	our financial performance;
	●	developments and projections relating to our competitors or our industry; and
	●	our ability to access additional capital due to fluctuations in the U.S. stock market.

	●	PLX®

	●	PLX PHARMA®

	●	PLXGUARD™

	●	VAZALORE®

	●	FIRST LIQUID-FILLED ASPIRIN CAPSULES®

	●

	March 31, 2022			December 31, 2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	52,499		$	69,392
Accounts receivable		698			634
Inventory, net		3,839			2,458
Prepaid expenses and other current assets		712			992
TOTAL CURRENT ASSETS		57,748			73,476
NON-CURRENT ASSETS
Property and equipment, net		828			858
Right of use assets		204			230
Goodwill		2,061			2,061
Security deposit		17			17
TOTAL ASSETS	$	60,858		$	76,642

LIABILITIES, SERIES A AND SERIES B CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	12,716		$	10,600
Accrued bonuses		394			1,163
Other current liabilities		120			116
TOTAL CURRENT LIABILITIES		13,230			11,879
NON-CURRENT LIABILITIES
Warrant liability		5,410			12,818
Accrued dividends		129			129
Other liabilities		106			136
TOTAL LIABILITIES		18,875			24,962

Series A convertible preferred stock: $0.001 par value; liquidation value of $12,642,000; 45,000 shares authorized, 12,642 issued and outstanding at March 31, 2022 and December 31, 2021		13,708			13,708
Series B convertible preferred stock: $0.001 par value; liquidation value of $2,492,722; 25,000 shares authorized, 2,364 issued and outstanding at March 31, 2022 and December 31, 2021		2,306			2,306

Commitments and contingencies

STOCKHOLDERS' EQUITY
Preferred stock; $0.001 par value; 930,000 shares authorized; none issued and outstanding at March 31, 2022 and December 2021		-			-
Common stock; $0.001 par value; 100,000,000 shares authorized; 27,539,229 shares issued and outstanding at March 31, 2022 and December 31, 2021		28			28
Additional paid-in capital		185,000			183,912
Accumulated deficit		(159,059	)		(148,274	)
TOTAL STOCKHOLDERS' EQUITY		25,969			35,666
TOTAL LIABILITIES, SERIES A AND SERIES B CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY	$	60,858		$	76,642

	Three Months Ended March 31,
	2022			2021
REVENUES:
Net sales	$	2,083		$	-
TOTAL REVENUES		2,083			-

Costs of sales		1,169			-
GROSS PROFIT		914			-

OPERATING EXPENSES:
Research and development		654			959
Selling, marketing and administrative		18,456			2,636
TOTAL OPERATING EXPENSES		19,110			3,595
OPERATING LOSS		(18,196	)		(3,595	)

OTHER INCOME (EXPENSE):
Interest income (expense), net		3			(10	)
Change in fair value of warrant liability		7,408			(7,935	)
TOTAL OTHER INCOME (EXPENSE)		7,411			(7,945	)

LOSS BEFORE INCOME TAXES		(10,785	)		(11,540	)
Income taxes		-			-
NET LOSS		(10,785	)		(11,540	)

Preferred dividends		-			(322	)
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(10,785	)	$	(11,862	)

Net loss per common share, basic and diluted	$	(0.39	)	$	(0.73	)

Weighted average shares of common shares, basic and diluted		27,539,229			16,361,583

	Temporary Equity								Permanent Equity
	Series A Convertible Preferred Stock				Series B Convertible Preferred Stock				Common stock			Additional paid-in			Accumulated			Total stockholders'
	Shares		Amount		Shares		Amount		Shares	Amount		capital			deficit			equity

Balance at December 31, 2021		12,642	$	13,708		2,364	$	2,306	27,539,229	$	28	$	183,912		$	(148,274	)	$	35,666

Stock-based compensation expense													1,088						1,088
Net loss																(10,785	)		(10,785	)
Balance at March 31, 2022		12,642	$	13,708		2,364	$	2,306	27,539,229	$	28	$	185,000		$	(159,059	)	$	25,969


Balance at December 31, 2020		15,000	$	13,662		8,000	$	7,723	13,911,633	$	14	$	91,203		$	(102,149	)	$	(10,932	)

Stock-based compensation expense													573						573
Series A Preferred - declared dividends													(217	)					(217	)
Series B Preferred - declared dividends													(105	)					(105	)
Financing									8,924,700		9		66,873						66,882
Net loss																(11,540	)		(11,540	)
Balance at March 31, 2021		15,000	$	13,662		8,000	$	7,723	22,836,333	$	23	$	158,327		$	(113,689	)	$	44,661

Description	March 31, 2022		December 31, 2021
		(in thousands)
Raw Materials	$	164	$	132
Work-in-Progress		1		338
Finished Goods		3,674		1,988
Total Inventory	$	3,839	$	2,458

	March 31, 2022		March 31, 2021
Stock Options		4,189,006		3,033,047
Warrants		6,596,096		7,935,503
Convertible Preferred Stock		6,476,275		9,517,191
Total Potential Dilutive Shares		17,261,377		20,485,741

Description	Outstanding 12/31/2021		Exercised		Outstanding 3/31/22		Exercise Price		Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
June 2017 Warrants		2,457,501		-		2,457,501	$	7.50		5.2	$	-
November 2020 Warrants		4,109,344		-		4,109,344	$	4.31		3.6	$	-
SVB Warrants		29,251		-		29,251	$	6.41		5.4	$	-
Total Warrants		6,596,096		-		6,596,096	$	4.47		4.2		-

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding, December 31, 2021		3,498,297		$	10.07		7.27	$	7,456
Granted		760,000			5.07
Exercised, cancelled, or forfeited		(69,291	)		14.44
Outstanding, March 31, 2022		4,189,006		$	9.08		7.64	$	946

Exercisable, March 31, 2022		2,116,338		$	10.75		6.1	$	629

Future undiscounted cash flows:
2022	$	98,756
2023		113,823
2024		30,132
Total		242,711

Discount factor		(19,851	)
Lease liability		222,860
Current lease liability		(117,131	)
Non-current lease liability	$	105,729

	●	Level 1: Quoted prices in active markets for identical assets or liabilities that the organization has the ability to access at the reporting date.
	●	Level 2: Inputs other than quoted prices included in Level 1, which are either observable or that can be derived from or corroborated by observable data as of the reporting date.
	●	Level 3: Inputs include those that are significant to the fair value of the asset or liability and are generally less observable from objective resources and reflect the reporting entity’s subjective determinations regarding the assumptions market participants would use in pricing the asset or liability.

	●	Level 1: Quoted prices in active markets for identical assets or liabilities that the organization has the ability to access at the reporting date.
	●	Level 2: Inputs other than quoted prices included in Level 1, which are either observable or that can be derived from or corroborated by observable data as of the reporting date.
	●	Level 3: Inputs include those that are significant to the fair value of the asset or liability and are generally less observable from objective resources and reflect the reporting entity’s subjective determinations regarding the assumptions market participants would use in pricing the asset or liability.

Description	Level 1		Level 2		Level 3		Total

Warrant liability	$	-	$	-	$	5,410	$	5,410
Balance at March 31, 2022	$	-	$	-	$	5,410	$	5,410

	Three Months Ended March 31,
(in thousands, except share and per share data)	2022			2021

Net loss attributable to common stockholders - GAAP	$	(10,785	)	$	(11,862	)
Adjustments:
Change in fair value of warrant liability		(7,408	)		7,935
Preferred dividends		-			322

Adjusted non-GAAP net loss attributable to common stockholders	$	(18,193	)	$	(3,605	)

Adjusted non-GAAP net loss per common share - basic and diluted	$	(0.66	)	$	(0.22	)

Weighted average shares of common shares - basic and diluted		27,539,229			16,361,583

	Three Months Ended March 31,				Increase (Decrease)
	2022		2021			$		%
	(in thousands, except percentages)
Operating Expenses
Research and development expenses	$	654	$	959	$	(305	)		(32	)%
Selling, marketing and administrative expenses		18,456		2,636		15,820			600	%
Total operating expenses	$	19,110	$	3,595	$	15,515			432	%

Number	Description

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

31.2	Certification of the Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

32.1	Certification of the Principal Executive Officer and Principal Financial and Accounting Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

101	The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, formatted in Inline XBRL: (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Operations (unaudited), (iii) Consolidated Statements of Changes in Series A and Series B Convertible Preferred Stock and Stockholders’ Equity (unaudited), (iv) Consolidated Statements of Cash Flows (unaudited), and (v) Notes to Consolidated Financial Statements (unaudited), tagged as blocks of text and including detailed tags.

104	Cover Page Interactive Data File (Embedded within the Inline XBRL and included in Exhibit 101).

	PLX PHARMA INC.

Date: May 13, 2022		/s/ Natasha Giordano
		By: Natasha Giordano
		Title: President and Chief Executive Officer (Principal Executive Officer)

		/s/ Rita O’Connor
		By: Rita O’Connor
		Title: Chief Financial Officer (Principal Financial and Accounting Officer)

SEC Form 10-Q filed by PLx Pharma Inc.