Imunon Inc
For the period ended Dec 31, 2023. Filed Mar 28, 2024.
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FY2023 · Filed Mar 28, 2024
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Financing Overview
Equity, Debt and Other Forms of Financing
Since 2018, the Company has annually submitted applications to sell a portion of the Company’s State of New Jersey net operating losses (“NOLs”) as part of the Technology Business Tax Certificate Program (the “NOL Program”) sponsored by The New Jersey Economic Development Authority. Under the program, emerging biotechnology companies with unused NOLs and unused research and development credits are allowed to sell these benefits to other New Jersey-based companies. In 2018, 2019 and 2020, the Company sold cumulative NOLs from 2011 to 2019 totaling $15 million and received net proceeds of $14 million. As part of the NOL Program, the Company sold $1.3 million and $1.6 million of its New Jersey NOLs in 2023 and 2022, respectively. The sale of these net operating losses resulted in net proceeds to the Company of approximately $1.3 million in 2023 and $1.6 million in 2022. During 2021, the New Jersey State Legislature increased the maximum lifetime benefit per company from $15 million to $20 million, which will allow the Company to participate in this funding program in future years for up to an additional $0.3 million in net operating losses under this maximum lifetime benefit.
As more fully discussed in Note 8 to our financial statements included in this Annual Report, in June 2021, the Company entered into a $10 million loan facility with Silicon Valley Bank (the “SVB Loan Facility”). The Company immediately used $6 million from this facility to retire all outstanding indebtedness with Horizon Technology Finance Corporation. The funding was in the form of money market secured indebtedness bearing interest at a calculated WSJ Prime-based variable rate. The SVB Loan Facility was repaid in full during the quarter ended June 30, 2023.
On March 19, 2021, the Company filed with the SEC a shelf registration statement on Form S-3 (the “2021 Registration Statement”) that allows the Company to issue any combination of common stock, preferred stock or warrants to purchase common stock or preferred stock in an amount up to $100 million. The 2021 Registration Statement was declared effective on March 30, 2021. The 2021 Registration Statement was intended to provide us with flexibility to raise capital in the future for general corporate purposes. However, as of the date of this filing and so long as our public float remains below $75 million, we are subject to limitations with respect to the use of the 2021 Registration Statement and any other shelf registration statement that we file with the SEC pursuant to General Instruction I.B.6 of Form S-3 (the “Baby Shelf Limitation”), which limits the amount we can offer to up to one-third of our public float during any trailing 12-month period. We would be no longer subject to the Baby Shelf Limitation if our public float exceeds $75 million.
During 2022 and 2023, we issued a total of 3.5 million shares of common stock as discussed below for an aggregate $9.5 million in gross proceeds.
| ● | On January 10, 2022, the Company entered into the Preferred Stock Purchase Agreement with several institutional investors, pursuant to which the Company agreed to issue and sell (i) 50,000 shares of Series A Preferred Stock and (ii) 50,000 shares of Series B Preferred Stock, in each case at an offering price of $285 per share, representing a 5% original issue discount to the stated value of $300 per share, for gross proceeds from each offering of $14.25 million, or approximately $28.50 million in the aggregate (the “Preferred Offerings”), before the deduction of the Placement Agent’s (as defined below) fee and offering expenses. The shares of Series A Preferred Stock have a stated value of $300 per share and are convertible, at a conversion price of $13.65 per share, into 1,098,901 shares of common stock (subject in certain circumstances to adjustments). The shares of Series B Preferred Stock have a stated value of $300 per share and are convertible, at a conversion price of $15.00 per share, into 1,000,000 shares of common stock (subject in certain circumstances to adjustments). The closing of the Preferred Offerings occurred on January 13, 2022. |
| On February 28, 2022, the Company effected a 15-for-1 reverse stock split of its common stock, which was made effective for trading purposes as of the commencement of trading on March 31, 2022. In connection with the Preferred Offerings, the Company entered into a placement agent agreement (the “Placement Agent Agreement”) with AGP, as placement agent pursuant to which the Company agreed to pay AGP an aggregate cash fee equal to $1,000,000 and reimburse AGP for certain of their expenses in an amount not to exceed $110,000. On March 3, 2022, the Company redeemed for cash at a price equal to 105% of the $300 stated value per share of all of its 50,000 outstanding shares of Series A Preferred Stock and its 50,000 outstanding Series B Preferred Stock. As a result, all shares of the Preferred Stock have been retired and are no longer outstanding and Imunon’s only class of outstanding stock is its common stock. | |
| ● | On April 6, 2022, the Company entered into a Securities Purchase Agreement (the “April 2022 Purchase Agreement”) with several institutional investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering (the “April 2022 Offering”), an aggregate of 1,328,274 shares of the Company’s common stock at an offering price of $5.27 per share for gross proceeds of $7.0 million before the deduction of the April 2022 Placement Agent (as defined below) fees and offering expenses. The closing of the April 2022 Offering occurred on April 8, 2022. In connection with the April 2022 Offering, the Company entered into a placement agent agreement with A.G.P./Alliance Global Partners (the “April 2022 Placement Agent”) pursuant to which the Company agreed to pay the April 2022 Placement Agent a cash fee equal to 6.5% of the aggregate gross proceeds raised from the sale of the securities sold in the April 2022 Offering and reimburse the April 2022 Placement Agent for certain of their expenses in an amount not to exceed $50,000. |
| ● | On May 25, 2022, the Company entered into an At the Market Offering Agreement (the “Agreement”) with H.C. Wainwright & Co., LLC, as sales agent (“Wainwright”), pursuant to which the Company may offer and sell, from time to time, through Wainwright, shares of the Company’s common stock having an aggregate offering price of up to $7,500,000. The Company intends to use the net proceeds from the offering, if any, for general corporate purposes, including research and development activities, capital expenditures and working capital. The Company did not sell any shares under the Agreement with Wainwright in the first nine months of 2022. From October 1, 2022 through December 31, 2022, the Company sold 336,075 shares of common stock for net proceeds of $503,798. During the year ended December 31, 2023, the Company sold 1,878,488 shares of common stock for net proceeds of $2.8 million. |
Please refer to Note 2 to our financial statements included in this Annual Report. Also refer toPart I, Item 1A, Risk Factors, in this Annual Report, including, but not limited to*, “We will need to raise substantial additional capital to fund our planned future operations, and we may be unable to secure such capital without dilutive financing transactions. If we are not able to raise additional capital, we may not be able to complete the development, testing and commercialization of our drug candidates.”*
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