Business Focus - The company focuses on discovering and developing highly targeted anti-cancer drug candidates using its Drug Response Predictor (DRP) platform [833]. Financial Position - As of December 31, 2022, the company has an accumulated deficit of 2.0 million, which are insufficient to fund its current operating plan for the next 12 months [852][875]. - The company anticipates that its cash reserves are sufficient for approximately 3 months, raising substantial doubt over its ability to continue as a going concern [875]. - As of the report date, the company does not have sufficient cash to fund its operating expenses and capital expenditure requirements for the next twelve months [889]. Funding and Capital Structure - A bridge loan of 2,316,640 issued to extend cash runway beyond December 31, 2022 [834]. - The company established Series C Preferred Stock with a stated value of 1.2 million through the sale of 50,000 shares [841]. - A private placement offering for 50,000 shares of Series C Preferred Stock was conducted, raising 16.1 million for the year ended December 31, 2022, compared to 6.93 million, a decrease of 14.2 million in 2021 [859][863]. - General and administrative expenses decreased by 9.96 million for the year ended December 31, 2022, compared to 17.57 million for intangible assets due to a Refusal to File from the FDA and a further impairment of 17.6 million on intangible assets in 2022 [901]. Operational Challenges - COVID-19 has caused unexpected delays in clinical program activities, impacting the company's operations [846]. - The company is subject to risks common in the biotechnology industry, including the need for successful clinical trials and regulatory approvals [845]. - The company has contractual obligations totaling 16.8 million, an increase from 791 thousand in 2022, down from 1.3 million in 2022, significantly lower than the inflow of 20 million from the sale of Series A preferred stock [885]. Shareholder Matters - A special meeting of stockholders is scheduled for March 20, 2023, to vote on increasing authorized shares from 30,500,000 to 750,500,000 [844]. - The company amended its Certificate of Designation of Series A Preferred Stock to grant voting rights, which expired on February 28, 2023 [835]. Accounting and Financial Reporting - The Company accounts for certain convertible debt under the fair value option election of ASC 825, with estimated fair value adjustments recognized as other income (expense) in the consolidated statements of operations [904]. - Warrants are classified as equity if indexed to the Company's equity and meet specific conditions; otherwise, they are classified as derivative liabilities and carried at fair value [905]. - The Company does not use derivative instruments to hedge exposures to interest rate, market, or foreign currency risks, and evaluates financial instruments for embedded derivatives [906]. - Share-based compensation is accounted for in accordance with ASC 718, with expenses recognized over the requisite service period based on the fair value of equity-based payment awards [907]. - The Company uses either a graded or straight-line vesting method for option awards, accounting for forfeitures as they occur [909]. - Stock award modifications are reviewed, and incremental fair value is recognized as compensation cost for vested awards [910]. - The fair value of stock options is estimated using the Black-Scholes option-pricing model, which requires subjective assumptions [911]. - The Company is classified as a smaller reporting company and is not required to provide certain market risk disclosures [913].
Allarity Therapeutics(ALLR) - 2022 Q4 - Annual Report