wint20200930

10-Q 1 wint20210331_10q.htm FORM 10-Q wint20200930_10q.htm

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, 2021

☐	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 000-26422

Windtree Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation or organization)

94-3171943

(I.R.S. Employer
Identification No.)

2600 Kelly Road, Suite 100

Warrington, Pennsylvania

(Address of principal executive offices)

18976-3622

(Zip Code)

Registrant’s telephone number, including area code: (215) 488-9300

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, $0.001 par value	WINT	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. 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 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, 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 Exchange Act). YES ☐ NO ☒

As of May 12, 2021, there were 26,257,065 shares of the registrant’s common stock outstanding, par value $0.001 per share.

		Page

Item 1.	Financial Statements	4

	CONDENSED CONSOLIDATED BALANCE SHEETS	4
	As of March 31, 2021 (unaudited) and December 31, 2020

	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)	5
	For the Three Months Ended March 31, 2021 and 2020

	CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (unaudited) For the Three Months Ended March 31, 2021 and 2020	6

	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)	7
	For the Three Months Ended March 31, 2021 and 2020

	Notes to Condensed Consolidated Financial Statements (unaudited)	8

Item 2.	Management ’s Discussion and Analysis of Financial Condition and Results of Operations	13

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	19

Item 4.	Controls and Procedures	19

Item 1.	Legal Proceedings	20

Item 1A.	Risk Factors	20

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

	●	our estimates regarding future results of operations, financial position, research and development costs, capital requirements and our needs for additional financing;

	●	how long we can continue to fund our operations with our existing cash and cash equivalents;

	●	delays in our anticipated timelines and milestones and additional costs associated with the novel coronavirus, or COVID-19, pandemic;

	●	the results, cost and timing of our preclinical studies and clinical trials, as well as the number of required trials for regulatory approval and the criteria for success in such trials;

	●	legal and regulatory developments in the United States, or U.S., and foreign countries, including any actions or advice that may affect the design, initiation, timing, continuation, progress or outcome of clinical trials or result in the need for additional clinical trials;

	●	the difficulties and expenses associated with obtaining and maintaining regulatory approval of our product candidates, and the indication and labeling under any such approval;

	●	our plans and the plans of our licensee in Asia and our respective abilities to successfully execute clinical and business development activities in a timely manner, if at all, and commercialize our product candidates;

	●	risks related to manufacturing active pharmaceutical ingredients, drug product, medical devices and other materials we need;

	●	delays, interruptions or failures in the manufacture and supply of our product candidates;

	●	the performance of third parties, both foreign and domestic, upon which we depend, including contract research organizations, contract manufacturing organizations, contractor laboratories and independent contractors;

	●	the size and growth of the potential markets for our product candidates, the regulatory requirements in such markets, the rate and degree of market acceptance of our product candidates and our ability to serve those markets;

	●	the success of competing therapies and products that are or become available;

	●	our ability to limit our exposure under product liability lawsuits;

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

	●	recently enacted and future legislation regarding the healthcare system in the U.S. and other potential markets, including in the U.S. changes to the Patient Protection and Affordable Care Act;

	●	our ability to recruit or retain key scientific, commercial or management personnel or to retain our executive officers;

	●	our ability to secure electronically stored work product, including clinical data, analyses, research, communications and other materials necessary to gain regulatory approval of our product candidates, including those acquired from third parties, and assure the integrity, proper functionality and security of our internal computer and information systems and prevent or avoid cyber-attacks, malicious intrusion, breakdown, destruction, loss of data privacy or other significant disruption; and

	●	the potential impairment of our intangible assets and goodwill on our condensed consolidated balance sheet, which could lead to material impairment charges in the future.

	March 31, 2021			December 31, 2020
	Unaudited
ASSETS
Current Assets:
Cash and cash equivalents	$	38,490		$	16,930
Prepaid expenses and other current assets		851			1,188
Total current assets		39,341			18,118

Property and equipment, net		879			924
Restricted cash		154			154
Operating lease right-of-use assets		2,747			917
Intangible assets		77,090			77,090
Goodwill		15,682			15,682
Total assets	$	135,893		$	112,885

LIABILITIES & STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	939		$	1,161
Accrued expenses		3,744			3,813
Operating lease liabilities - current portion		392			805
Loans payable - current portion		2,409			352
Total current liabilities		7,484			6,131

Operating lease liabilities - non-current portion		2,438			201
Loans payable - non-current portion		-			2,423
Restructured debt liability - contingent milestone payments		15,000			15,000
Other liabilities		2,800			2,800
Deferred tax liabilities		16,683			16,778
Total liabilities		44,405			43,333

Stockholders’ Equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding at March 31, 2021 and December 31, 2020		-			-
Common stock, $0.001 par value; 120,000,000 shares authorized at March 31, 2021 and December 31, 2020; 26,257,089 and 16,921,506 shares issued at March 31, 2021 and December 31, 2020, respectively; 26,257,065 and 16,921,482 shares outstanding at March 31, 2021 and December 31, 2020, respectively		26			17
Additional paid-in capital		821,165			790,277
Accumulated deficit		(726,649	)		(717,688	)
Treasury stock (at cost); 24 shares		(3,054	)		(3,054	)
Total stockholders’ equity		91,488			69,552
Total liabilities & stockholders’ equity	$	135,893		$	112,885

	Three Months Ended
	March 31,
	2021			2020

Expenses:
Research and development	$	4,410		$	3,461
General and administrative		4,669			3,242
Total operating expenses		9,079			6,703
Operating loss		(9,079	)		(6,703	)

Other (expense) income:
Interest income		50			89
Interest expense		(41	)		(44	)
Other income, net		109			124
Total other (expense) income, net		118			169

Net loss	$	(8,961	)	$	(6,534	)

Net loss per common share
Basic and diluted	$	(0.51	)	$	(0.48	)

Weighted average number of common shares outstanding
Basic and diluted		17,695			13,697

	Common Stock									Treasury Stock
	Shares		Amount		Additional Paid-in Capital		Accumulated Deficit			Shares		Amount			Total

Balance - December 31, 2019		13,697	$	14	$	763,097	$	(685,122	)		-	$	(3,054	)	$	74,935
Net loss								(6,534	)							(6,534	)
Stock-based compensation expense						1,689										1,689
Balance - March 31, 2020		13,697	$	14	$	764,786	$	(691,656	)		-	$	(3,054	)	$	70,090

		March 31,		December 31,
(in thousands)	2021		2020

Rostafuroxin drug candidate	$	54,750	$	54,750
Istaroxime drug candidate		22,340		22,340
Intangible assets		77,090		77,090

Goodwill	$	15,682	$	15,682

	●	Level 1 – Quoted prices in active markets for identical assets and liabilities.
	●	Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
	●	Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

	Fair Value		Fair value measurement using
	March 31,
(in thousands)	2021		Level 1		Level 2		Level 3

Cash equivalents:
Money market funds	$	32,077	$	32,077	$	-	$	-
U.S. Treasury notes		3,029		3,029		-		-
Total Assets	$	35,106	$	35,106	$	-	$	-

(in thousands, except for weighted-average data)
Stock Options	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (In Yrs)

Outstanding at January 1, 2021		1,903		$	15.57
Granted		1,339			5.46
Forfeited or expired		(2	)		11.85
Outstanding at March 31, 2021		3,240		$	11.39		8.6

Vested and exercisable at March 31, 2021		1,353		$	17.19		7.5

Vested and expected to vest at March 31, 2021		3,020		$	11.50		8.5

Exhibit No.	Description	Method of Filing

10.1†	Agreement for Scientific Collaboration between Universita degli Studi di Milano-Bicocca and CVie Therapeutics Ltd, a wholly-owned subsidiary of the Registrant, dated March 19, 2021.	Filed herewith.

31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act.	Filed herewith.

31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act.	Filed herewith.

32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Furnished herewith.

101.1	The following condensed consolidated financial statements from Windtree Therapeutics, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, formatted in Extensive Business Reporting Language (XBRL): (i) Balance Sheets as of March 31, 2021 (unaudited) and December 31, 2020, (ii) Statements of Operations (unaudited) for the three months ended March 31, 2021 and March 31, 2020, (iii) Statements of Cash Flows (unaudited) for the three months ended March 31, 2021 and March 31, 2020, and (iv) Notes to Condensed Consolidated Financial Statements.

101.INS	Instance Document.	Filed herewith.

101.SCH	XBRL Taxonomy Extension Schema Document.	Filed herewith.

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.	Filed herewith.

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.	Filed herewith.

101.LAB	XBRL Taxonomy Extension Label Linkbase Document.	Filed herewith.

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.	Filed herewith.

		Windtree Therapeutics, Inc.
		(Registrant)

Date: May 13, 2021		By: /s/ Craig Fraser
		Craig Fraser
		President and Chief Executive Officer


Date: May 13, 2021		By: /s/ John P. Hamill
		John P. Hamill
		Senior Vice President and Chief Financial Officer

	Three Months Ended March 31,
(in thousands)	2021		2020

Research and development	$	939	$	714
General and administrative		1,504		975
Total	$	2,443	$	1,689

	Three Months Ended
	March 31, 2021

Weighted average expected volatility		105%
Weighted average expected term (in years)		6.6
Weighted average risk-free interest rate		0.48%
Expected dividends		-

SEC Form 10-Q filed by Windtree Therapeutics, Inc.