Hepion Pharmaceuticals Inc

Previous wording

In December 2023, the board of directors approved a strategic restructuring plan to preserve capital by reducing operating costs. We incurred a one-time restructuring charge of approximately $0.7 million in the fourth quarter of 2023. Additionally, we have initiated a process to explore a range of strategic and financing alternatives focused on maximizing stockholder value within the current financial environment and NASH drug development landscape. On April 19, 2024, we announced that we have begun wind-down activities in our ASCEND- NASH clinical trial.

Current wording

In December 2023, the board of directors approved a strategic restructuring plan to preserve capital by reducing operating costs. We incurred a one-time restructuring charge of approximately $0.7 million in the fourth quarter of 2023. Additionally, we have initiated a process to explore a range of strategic and financing alternatives focused on maximizing stockholder value within the current financial environment and NASH drug development landscape. On April 19, 2024, we announced that we had begun wind-down activities in our ASCEND- NASH clinical trial. All clinical trial activities were completed and the trial was closed in August 2024.

Previous wording

From inception through June 30, 2024, we have an accumulated deficit of $231.4 million and we have not generated any revenue from operations.

Current wording

From inception through September 30, 2024, we have an accumulated deficit of $236.3 million and we have not generated any revenue from operations.

Previous wording

During the six months ended June 30, 2024, there were no significant changes to our critical accounting estimates from those described in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in the Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

During the nine months ended September 30, 2024, there were no significant changes to our critical accounting estimates from those described in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in the Annual Report on Form 10-K for the year ended December 31, 2023.

Previous wording

Research and development expenses for the three months ended June 30, 2024 and 2023 was $7.1 million and $11.9 million, respectively. The decrease of $4.7 million was primarily due to a $4.0 million decrease in clinical trial costs primarily for our phase 2b study, a $0.4 million decrease of Chemistry, Manufacturing and Controls costs, a decrease of $0.3 million in employee compensation costs due to reduced headcounts and other miscellaneous expenses.

Current wording

Research and development expenses for the three months ended September 30, 2024 and 2023 was $2.8 million and $8.5 million, respectively. The decrease of $5.8 million was primarily due to a $4.3 million decrease in clinical trial costs primarily for our phase 2b study, a $1.1 million decrease of Chemistry, Manufacturing and Controls costs, a decrease of $0.3 million in employee compensation costs due to reduced headcounts and other miscellaneous expenses, primarily due to the discontinuation of clinical trials.

Previous wording

General and administrative expenses for the three months ended June 30, 2024 and 2023 was $1.4 million and $2.3 million, respectively. The decrease of $0.9 million was primarily due to a decrease in salaries.

Current wording

General and administrative expenses for the three months ended September 30, 2024 and 2023 was $1.7 million and $2.1 million, respectively. The decrease of $0.5 million was primarily due to a decrease in salaries due to reduced headcount as a result of the discontinuation of clinical trials.

Previous wording

We had no revenues during the six months ended June 30, 2024 and 2023, respectively, because we do not have any commercial biopharmaceutical products and we do not expect to have such products for several years, if at all.

Current wording

We had no revenues during the nine months ended September 30, 2024 and 2023, respectively, because we do not have any commercial biopharmaceutical products and we do not expect to have such products for several years, if at all.

Previous wording

Research and development expenses for the six months ended June 30, 2024 and 2023 was $9.7 million and $21.7 million, respectively. The decrease of $12.0 million was primarily due to a $10.7 million decrease in clinical trial costs primarily for our phase 2b study, a $0.9 million decrease of Chemistry, Manufacturing and Controls costs, a decrease of $0.4 million in employee compensation costs due to reduced headcounts, and decrease in consulting and outside services.

Current wording

Research and development expenses for the nine months ended September 30, 2024 and 2023 was $12.4 million and $30.2 million, respectively. The decrease of $17.8 million was primarily due to a $15.6 million decrease in clinical trial costs primarily for our phase 2b study, a $1.8 million decrease of Chemistry, Manufacturing and Controls costs, a decrease of $0.4 million in employee compensation costs due to reduced headcounts, and decrease in consulting and outside services.

Previous wording

We have no products approved for commercial sale. To date, we have devoted substantially all of our resources to organizing and staffing our company, business planning, raising capital, undertaking preclinical studies and clinical trials of our product candidate. As a result, we are not profitable and have incurred losses in each period since our inception in 2013. As of June 30, 2024, we had an accumulated deficit of $231.4 million. We expect to continue to incur significant losses for the foreseeable future.

Current wording

We have no products approved for commercial sale. To date, we have devoted substantially all of our resources to organizing and staffing our company, business planning, raising capital, undertaking preclinical studies and clinical trials of our product candidate. As a result, we are not profitable and have incurred losses in each period since our inception in 2013. As of September 30, 2024, we had an accumulated deficit of $236.2 million. We expect to continue to incur significant losses for the foreseeable future.

Previous wording

The condensed consolidated financial statements as of and for the six months ended June 30, 2024 have been prepared under the assumption that we will continue as a going concern within one year after the financial statements are issued. Due to our accumulated deficit and our recurring and expected continuing losses from operations, we have concluded there is substantial doubt in our ability to continue as a going concern without additional capital becoming available to attain further operating efficiencies and, ultimately, to generate revenue. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Current wording

The condensed consolidated financial statements as of and for the nine months ended September 30, 2024 have been prepared under the assumption that we will continue as a going concern within one year after the financial statements are issued. Due to our accumulated deficit and our recurring and expected continuing losses from operations, we have concluded there is substantial doubt in our ability to continue as a going concern without additional capital becoming available to attain further operating efficiencies and, ultimately, to generate revenue. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Previous wording

As of June 30, 2024, we had working capital of $4.5 million compared to working capital of $12.2 million as of December 31, 2023. The decrease of $7.7 million in working capital is primarily due to $3.0 million in proceeds received from sales of our state NOLs offset by the Company’s operating costs for the six months ended June 30, 2024.

Current wording

As of September 30, 2024, we had working capital of $0.8 million compared to working capital of $12.2 million as of December 31, 2023. The decrease of $11.4 million in working capital is primarily due to $3.0 million in proceeds received from sales of our state NOLs offset by the Company’s operating costs for the nine months ended September 30, 2024.

Previous wording

As of June 30, 2024, we had $2.1 million in cash. Net cash used in operating activities was $14.5 million for the six months ended June 30, 2024 consisting primarily of our net loss of $9.9 million, adjusted for an increase in non-cash charges of $3.2 million, primarily for stock-based compensation and warrant related inducement expense, partially offset by $3.1 million in change in fair value of contingent consideration and the change in fair value of derivative warrants. Changes in working capital accounts had a negative impact of $4.6 million on cash primarily due to an increase in accounts payable, accrued expenses and prepaid expenses.

Current wording

As of September 30, 2024, we had $0.8 million in cash. Net cash used in operating activities was $17.1 million for the nine months ended September 30, 2024 consisting primarily of our net loss of $11.6 million, adjusted for an increase in non-cash charges of $3.8 million, primarily for stock-based compensation, amortization of debt discount, and warrant related inducement expense, partially offset by $6.5 million in change in fair value of contingent consideration and the change in fair value of derivative warrants. Changes in working capital accounts had a negative impact of $2.7 million on cash primarily due to an increase in accounts payable, accrued expenses and prepaid expenses.

Previous wording

As of June 30, 2023, we had $30.5 million in cash. Net cash used in operating activities was $20.7 million for the six months ended June 30, 2023 consisting primarily of our net loss of $27.3 million. Changes in non-cash operating activities was $0.9 million, primarily for stock-based compensation. Changes in working capital accounts had a positive impact of $5.8 million on cash primarily for a decrease in prepaid expenses and other assets of $3.0 million and an increase in accounts payable and accrued expenses of $2.8 million.

Current wording

As of September 30, 2023, we had $19.3 million in cash. Net cash used in operating activities was $31.9 million for the nine months ended September 30, 2023 consisting primarily of our net loss of $37.9 million. Changes in non-cash operating activities was $1.1 million, primarily for stock-based compensation. Changes in working capital accounts had a positive impact of $4.9 million on cash primarily for a decrease in prepaid expenses and other assets of $3.5 million and an increase in accounts payable and accrued expenses of $1.4 million.

Previous wording

Net cash used in investing activities was nominal for the six months ended June 30, 2024 and 2023.

Current wording

Net cash used in investing activities was $600,000 for the nine months ended September 30, 2024 and nominal for 2023. The $600,000 in 2024 is primarily due to the note receivable from Pharma Two B.

Previous wording

Net cash provided by financing activities was $1.8 million for the six months ended June 30, 2024, due primarily to proceeds received from the exercise of the warrants.

Current wording

Net cash provided by financing activities was $4.3 million for the nine months ended September 30, 2024, due primarily to proceeds received from the exercise of the warrants and equity issuance.

Previous wording

There was no cash provided by or used in financing activities for the six months ended June 30, 2023.

Current wording

There was no cash provided by or used in financing activities for the nine months ended September 30, 2023.