Rezolute(RZLT) - 2020 Q2 - Quarterly Report

Financial Performance - Total assets increased to $20,565,000 as of December 31, 2019, compared to $12,252,000 as of June 30, 2019, representing a growth of 67.8%[14] - Cash and cash equivalents rose to $18,182,000 from $11,573,000, marking an increase of 57.2%[14] - Net loss for the six months ended December 31, 2019, was $11,746,000, compared to a net loss of $7,527,000 for the same period in 2018, indicating a 56.5% increase in losses[24] - For the fiscal year ended June 30, 2019, the company incurred a net loss of $30.4 million and net cash used in operating activities amounted to $15.3 million[53] - For the six months ended December 31, 2019, the company incurred a net loss of $11.7 million and net cash used in operating activities amounted to $14.4 million[53] - The company has cumulative net losses of $138.6 million since inception and has not generated any revenue to date[190] - For the six months ended December 31, 2019, the net loss was $11.7 million, an increase of 55.5% compared to a net loss of $7.5 million for the same period in 2018[198] Operating Expenses - Total operating expenses for the three months ended December 31, 2019, were $6,720,000, up from $3,161,000 in the same period of 2018, reflecting a 112.8% increase[17] - Research and development expenses totaled $5,038,000 for the three months ended December 31, 2019, significantly higher than $1,309,000 for the same period in 2018, a rise of 284.5%[17] - R&D expenses for the six months ended December 31, 2019, increased to $8.3 million from $2.2 million in the same period in 2018, an increase of $6.0 million[174] - Clinical trial costs increased by $2.9 million for the six months ended December 31, 2019, including $2.2 million for Phase 2 clinical testing of RZ358[176] - General and administrative (G&A) expenses decreased slightly from approximately $1.8 million in Q4 2018 to $1.7 million in Q4 2019, a decrease of $0.1 million[162] - General and administrative expenses increased from $3.4 million in 2018 to $3.6 million in 2019, a rise of $0.2 million[180] Cash Flow and Financing - The company reported a net cash used in operating activities of $14,411,000 for the six months ended December 31, 2019, compared to $3,083,000 for the same period in 2018[24] - Cash flows used in operating activities amounted to $14.4 million for the six months ended December 31, 2019, compared to $3.1 million in 2018, reflecting an increase of 365.5%[198] - Net cash provided by financing activities for the six months ended December 31, 2019, was $22.6 million, significantly higher than $1.5 million in 2018[204] - The gross proceeds from equity issuances in 2019 totaled $24.1 million, partially offset by fees of $1.5 million, resulting in net proceeds of $22.6 million[204] - Financing activities generated $22,550 thousand in cash for the six months ended December 31, 2019, an increase of $21,050 thousand from $1,500 thousand in 2018[197] Stock and Equity - Stockholders' equity increased to $14,688,000 as of December 31, 2019, from $1,752,000 as of June 30, 2019, a growth of 738.5%[14] - The weighted average number of common shares outstanding increased to 293,321 for the three months ended December 31, 2019, compared to 62,124 for the same period in 2018[17] - The Company has a total of 52.035 million shares authorized under its stock option plans, with 48.021 million shares outstanding and 4.014 million shares available for future grants[79] - The Company granted stock options for approximately 34.0 million shares at an exercise price of $0.29 per share, with a total fair value of $4.114 million[82] - The Company granted stock options for approximately 35.9 million shares of Common Stock at an exercise price of $0.29 per share during the six months ended December 31, 2019[129] Clinical Development - The company initiated the RIZE study (RZ358-606), a Phase 2b clinical trial for RZ358 in patients with congenital hyperinsulinism (CHI), with the first patient screened and significant enrollment progress expected over the coming year[122] - The company plans to file an IND for RZ402, an oral plasma kallikrein inhibitor for diabetic macular edema, by mid-2020 and complete a Phase 1 study in healthy volunteers by the end of the year[123] - The company received top-line results from its Phase 1 clinical study of AB101 in December 2019, indicating the need for additional formulation adjustments before further clinical activities[136] Internal Controls and Compliance - The company identified material weaknesses in internal controls over financial reporting as of December 31, 2019, due to limited employee numbers and inadequate segregation of duties[210] - Management has begun addressing these weaknesses by hiring additional employees and engaging a consulting firm for technical accounting support[211] - There were no changes in internal controls over financial reporting during the reporting period that materially affected the company's internal control[212] Future Outlook - The company has flexibility to delay clinical programs to ensure adequate capital resources are available for the next 12 months[54] - The company plans to delay clinical spending and reduce discretionary spending if additional financing is not obtained by the second quarter of calendar year 2020[196] - The company aims to uplist its Common Stock to a national stock exchange to expand its shareholder base[124]