Delaware
(State or other jurisdiction of
incorporation or organization)
|
94-1620407
(I.R.S. employer
identification number)
|
9350 Wilshire Blvd. Suite 203
Beverly Hills, CA 90212
(Address of principal executive offices and zip
code)
(800) 304-9888
(Registrant’s telephone number, including area
code)
|
Title of Each Class
|
|
Trading Symbol
|
|
Name of exchange on which registered
|
N/A
|
|
N/A
|
|
N/A
|
Large
accelerated filer ☐
|
Accelerated
filer ☐
|
Non-accelerated
filer ☑
|
Smaller
reporting company ☑
|
Emerging
growth company ☐
|
|
|
|
|
Page
|
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1
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2
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3
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4
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5
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16
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21
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21
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21
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22
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22
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22
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22
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22
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23
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24
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|
|
June 30,
2020
|
December 31,
2020
|
ASSETS
|
(unaudited)
|
|
Current
Assets:
|
|
|
Cash
and cash equivalents
|
$851
|
$28
|
Prepaid
expenses
|
120
|
246
|
Total
Current Assets
|
971
|
274
|
|
|
|
Intangible
assets
|
0
|
0
|
Deposits
|
12
|
12
|
Operating
lease right-to-use asset
|
80
|
110
|
Fixed
assets, net
|
-
|
0
|
Total
Other Assets
|
92
|
122
|
TOTAL
ASSETS
|
$1,063
|
$396
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
Current
Liabilities:
|
|
|
Accounts
payable
|
$2,001
|
$1,940
|
Accrued
expenses
|
1,313
|
2,379
|
Accrued
interest
|
3,283
|
2,029
|
Operating
lease liability
|
90
|
120
|
Line
of credit
|
31
|
31
|
Convertible
notes
|
21,844
|
13,207
|
Total
Current Liabilities
|
28,562
|
19,706
|
|
|
|
Stockholders’
Deficit:
|
|
|
Convertible
preferred stock - $0.01 par value; 15,000,000 shares
authorized:
|
|
|
Series
C - 96,230 and 96,230 shares issued and outstanding at June 30,
2020 and December 31, 2019, respectively
|
1
|
1
|
Series
J-1 – 2,353,548 shares issued and outstanding at June 30,
2020 and December 31, 2019, respectively
|
24
|
24
|
Common
stock - $0.001 par value; 750,000,000 shares authorized; and
75,435,862 and 69,784,699 shares issued and outstanding at June 30,
2020 and December 31, 2019, respectively
|
75
|
70
|
Additional
paid-in capital
|
550,389
|
548,096
|
Accumulated
deficit
|
(577,819)
|
(567,332)
|
Noncontrolling
interest
|
(169)
|
(169)
|
Total
Stockholders’ Deficit
|
(27,499)
|
(19,310)
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$1,063
|
$396
|
|
Three Months
Ended June 30,
|
Six Months Ended
June 30,
|
||
|
2020
|
2019
|
2020
|
2019
|
Operating
expenses:
|
|
|
|
|
Research and
development
|
12
|
154
|
336
|
988
|
Selling, general
and administrative expenses
|
1,546
|
2,125
|
2,292
|
5,347
|
Total operating
expenses
|
1,558
|
2,279
|
2,628
|
6,335
|
Loss from
operations
|
(1,558)
|
(2,279)
|
(2,628)
|
(6,335)
|
Other
income (expense):
|
|
|
|
|
Loss on disposal of
assets
|
-
|
(31)
|
-
|
(31)
|
Settlement
expense
|
(2,563)
|
-
|
(2,563)
|
-
|
Interest
expense
|
(4,658)
|
(479)
|
(5,296)
|
(933)
|
Total other income
(expense)
|
(7,221)
|
(510)
|
(7,859)
|
(964)
|
Loss before
provision for income taxes
|
(8,779)
|
(2,789)
|
(10,487)
|
(7,299)
|
Provision for
income tax
|
-
|
-
|
-
|
-
|
Net
loss
|
(8,779)
|
(2,789)
|
(10,487)
|
(7,299)
|
Net loss per common
share – basic and diluted
|
$(.12)
|
$(.05)
|
$(.15)
|
$(0.14)
|
Weighted average
common shares outstanding – basic and diluted
|
71,899,937
|
51,918,252
|
70,978,579
|
51,507,849
|
|
Preferred Stock
|
Common Stock
|
Additional Paid-in
|
Accumulated
|
||
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Balance at January 1, 2020
|
2,450
|
$25
|
69,785
|
$70
|
$548,096
|
$(567,332)
|
Issuance
of common stock for convertible notes
|
|
|
1,065
|
1
|
212
|
|
Beneficial
conversion feature of convertible notes
|
|
|
3,500
|
3
|
26
|
|
Issuance
of common stock for settlement of litigation
|
|
|
1,086
|
1
|
1,909
|
|
Issuance
of common stock for compensation
|
|
|
|
|
146
|
|
Net
loss
|
|
|
|
|
|
(10,487)
|
Balance at June 30, 2020
|
2,450
|
$25
|
75,436
|
$75
|
$550,389
|
$(577,819)
|
|
Preferred Stock
|
Common Stock
|
Additional Paid-in
|
Accumulated
|
||
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Balance at January 1, 2019
|
1,260
|
$13
|
50,650
|
$51
|
$540,160
|
$(528,685)
|
Issuance
of preferred stock
|
1,190
|
12
|
|
|
1,128
|
|
Issuance
of common stock for convertible notes
|
|
|
1,994
|
2
|
1,040
|
|
Beneficial
conversion feature of convertible notes
|
|
|
|
|
158
|
|
Issuance
of common stock for compensation
|
|
|
|
|
2,565
|
|
Net
loss
|
|
|
|
|
|
(7,299)
|
Balance at June 30, 2019
|
2,450
|
$25
|
52,644
|
$53
|
$545,051
|
$(535,984)
|
The accompanying notes are an integral part of these consolidated
financial statements.
|
|
2020
|
2019
|
|
(unaudited)
|
(unaudited)
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
Net
loss
|
$( 10,487)
|
$( 7,299)
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|
|
Depreciation
|
-
|
10
|
Stock
compensation expense for options and warrants issued to
employees and non-employees
|
147
|
3,705
|
Amortization
of debt discounts
|
1
|
331
|
Non-cash
interest expense
|
3,955
|
1,140
|
Loss
on disposal of assets
|
-
|
31
|
Settlement
expense
|
2,363
|
-
|
Changes
in operating assets and liabilities:
|
|
|
Other
assets
|
126
|
8
|
Accounts
payable and accrued liabilities
|
261
|
26
|
Net
cash used in operating activities
|
( 3,634)
|
( 2,048)
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
Acquisition
of fixed assets
|
-
|
-
|
Net
cash used by investing activities
|
0
|
0
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
Proceeds
from notes payable
|
4,457
|
2,352
|
Loan
costs
|
-
|
-
|
Repayment
of note payable
|
-
|
(100)
|
Net
cash provided by financing activities
|
4,457
|
2,252
|
Minority
interest
|
-
|
-
|
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
823
|
204
|
CASH
AND CASH EQUIVALENTS - Beginning of period
|
28
|
60
|
CASH
AND CASH EQUIVALENTS - End of period
|
$851
|
$264
|
|
|
|
Supplemental
disclosures:
|
|
|
Interest
paid
|
$69
|
$-
|
Income
taxes paid
|
$-
|
$-
|
|
|
|
Supplemental
disclosures:
|
|
|
Issuance
of common stock upon conversion of convertible notes
|
$200
|
$1,035
|
Issuance
of common stock upon conversion of accrued interest
|
$12
|
$10
|
|
Number of
Options
|
Weighted Average
Exercise Price
|
Outstanding,
December 31, 2019
|
40
|
$877.50
|
Granted
|
-
|
-
|
Exercised
|
-
|
-
|
Expired
|
-
|
-
|
Outstanding, June
30, 2020
|
40
|
$877.50
|
Exercisable, June
30, 2020
|
40
|
$877.50
|
|
Number of
Warrants
|
Weighted Average
Exercise Price
|
Outstanding at
December 31, 2019:
|
1,813,053
|
$0.20
|
Granted
|
5,500,000
|
$0.20
|
Forfeited/canceled
|
480,352
|
$0.20
|
Exercised
|
-
|
-
|
Outstanding at June
30, 2020
|
6,832,701
|
$0.20
|
Exercisable at June
30, 2020
|
6,832,701
|
$0.20
|
Year ending
December 31:
|
|
2020
|
36,000
|
2021
|
61,000
|
Total minimum lease
payments
|
$97,000
|
|
|
|
|
|
|
Incorporated by
Reference
|
|||||
Exhibit
|
|
Description
|
|
Herewith
|
|
Form
|
Number
|
SEC File
No.
|
|
Filing
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form Securities Purchase Agreement
among GT Biopharma, Inc. and the purchaser named therein (executed
in April/May 2020)
|
|
|
|
10-Q
|
10.4
|
000-08092
|
|
05/15/20
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Form of Registration Rights
Agreement among GT Biopharma, Inc. and the purchaser named therein
(executed in April/May 2020)
|
|
|
|
10-Q
|
10.5
|
000-08092
|
|
05/15/20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Convertible Note (related
to Securities Purchase Agreement executed in April/May
2020)
|
|
|
|
10-Q
|
10.6
|
000-08092
|
|
05/15/20
|
||
|
|
|
|
|
|
|
|
|
|
||
|
|
Securities Purchase Agreement,
dated July 7, 2020, among GT Biopharma, Inc. and the purchaser
named therein
|
|
|
|
8-K
|
10.1
|
000-08092
|
|
07/09/20
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Registration Rights Agreement,
dated July 7, 2020, among GT Biopharma, Inc. and the purchaser
named therein
|
|
|
|
8-K
|
10.3
|
000-08092
|
|
07/09/20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Convertible Note (related
to Securities Purchase Agreement, dated July 7,
2020)
|
|
|
|
8-K
|
4.1
|
000-08092
|
|
07/09/20
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Standstill and Forbearance
Agreement, dated June 23, 2020, between the Company and certain
holders of Convertible Notes
|
|
|
|
8-K
|
10.1
|
000-08092
|
|
06/23/20
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Settlement Agreement, dated June
19, 2020, among GT Biopharma, Inc., Empery Asset Master Ltd.,
Empery Tax Efficient, LP and Empery Tax Efficient II, LP, Anthony
Cataldo and Paul Kessler
|
|
|
|
8-K
|
10.1
|
000-08092
|
|
06/19/20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Convertible Note, dated
June 19, 2020 (related to Settlement Agreement, dated June 19,
2020)
|
|
|
|
8-K
|
10.2
|
000-08092
|
|
06/19/20
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Pre-Funded Warrant to
Purchase Common Stock, dated June 19, 2020 (related to Settlement
Agreement, dated June 19, 2020)
|
|
|
|
8-K
|
10.3
|
000-08092
|
|
06/19/20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employment agreement with Anthony
Cataldo
|
|
X
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
Employment agreement with Steven
Weldon
|
|
X
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certification of Principal
Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a),
promulgated under the Securities and Exchange Act of 1934, as
amended.
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certification of Principal
Financial Officer pursuant to Rule 13a-14 and Rule 15d 14(a),
promulgated under the Securities and Exchange Act of 1934, as
amended.
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1*
|
|
Certification pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (Chief Executive
Officer).
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
32.2*
|
|
Certification pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (Chief Financial
Officer).
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
Inline XBRL Instance
Document.
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
Inline XBRL Taxonomy Extension
Schema Document.
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
Inline XBRL Taxonomy Extension
Calculation Linkbase Document.
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
Inline XBRL Taxonomy Extension
Definition Linkbase Document.
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
Inline XBRL Taxonomy Extension
Label Linkbase Document.
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
Inline XBRL Taxonomy Extension
Presentation Linkbase Document.
|
|
X
|
|
|
|
|
|
|
*
|
This certification shall not be deemed “filed” for
purposes of Section 18 of the Exchange Act, or otherwise
subject to the liability of that Section, nor shall it be deemed to
be incorporated by reference into any filing under the Securities
Act or the Exchange Act.
|
Dated:
August 17, 2020
|
GT
Biopharma, Inc.
By: /s/
Anthony
Cataldo
Anthony
Cataldo
Chief
Executive Officer and Chairman of the Board
|
|
|
Dated:
August 17, 2020
|
By: /s/
Steven
Weldon
Steven
Weldon
Chief
Financial Officer
|
1.
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the
period covered by this report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in
this report;
|
4.
|
The
registrant’s other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and
internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have for
the registrant and have:
|
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure that material information relating to the
registrant, including
its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report
is being prepared;
|
|
b)
|
Designed
such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles;
|
|
c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this report based on such evaluation;
and
|
|
d)
|
Disclosed
in this report any change in the registrant’s internal
control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the
registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over
financial reporting; and
|
5.
|
The
registrant’s other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and
the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions):
|
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s
ability to record, process, summarize and report financial
information; and
|
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s
internal control over financial reporting.
|
Date:
August 17, 2020
|
|
/s/ Anthony
Cataldo
|
|
|
|
Anthony
Cataldo
|
|
|
|
Chief
Executive Officer, Chairman, and Director
|
|
|
|
|
|
1.
|
I have
reviewed this Amendment No. 1 to the
quarterly report on Form 10-Q/A of GT Biopharma,
Inc.;
|
2.
|
3.
|
Based
on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in
this report;
|
4.
|
The
registrant’s other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and
internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have for
the registrant and have:
|
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure that material information relating to the
registrant, including
its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report
is being prepared;
|
|
b)
|
Designed
such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles;
|
|
c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this report based on such evaluation;
and
|
|
d)
|
Disclosed
in this report any change in the registrant’s internal
control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the
registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over
financial reporting; and
|
5.
|
The
registrant’s other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and
the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions):
|
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s
ability to record, process, summarize and report financial
information; and
|
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s
internal control over financial reporting.
|
|
|
|
|
Date: August
17, 2020
|
|
/s/ Steven
Weldon
|
|
|
|
Steven
Weldon
|
|
|
|
CFO,
Chief Accounting Officer, and Director
|
|
|
|
|
|
Date:
August 17, 2020
|
|
/s/
Anthony Cataldo
|
|
|
|
Anthony
Cataldo
|
|
|
|
Chief
Executive Officer, Chairman, and Director
|
|
|
|
|
|
|
|
|
|
Date:
August 17, 2020
|
|
/s/ Steven
Weldon
|
|
|
|
Steven
Weldon
|
|
|
|
CFO,
Chief Accounting Officer, and Director
|
|
|
|
|
|
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Aug. 11, 2020 |
|
Cover [Abstract] | ||
Entity Registrant Name | GT Biopharma, Inc. | |
Entity Central Index Key | 0000109657 | |
Document Type | 10-Q/A | |
Document Period End Date | Jun. 30, 2020 | |
Amendment Flag | true | |
Amendment Description | We are filing this Amendment No. 1 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 of GT Biopharma, Inc. (the “Original Form 10-Q”), as filed with the Securities and Exchange Commission on August 14, 2020 to correct certain clerical errors in the Original Form 10-Q. The Original Form 10-Q, as amended, reads in its entirety as set forth below. | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 0-8092 | |
Entity Common Stock, Shares Outstanding | 76,560,862 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Long term convertible debentures discount | $ 1,097 | $ 2,302 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 15,000,000 | 15,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 750,000,000 | 750,000,000 |
Common stock, issued | 75,435,862 | 69,784,699 |
Common stock, outstanding | 75,435,862 | 69,784,699 |
Series C | ||
Preferred stock, issued | 96,230 | 96,230 |
Preferred stock, outstanding | 96,230 | 96,230 |
Series J | ||
Preferred stock, issued | 2,353,548 | 2,353,548 |
Preferred stock, outstanding | 2,353,548 | 2,353,548 |
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Operating Expenses: | ||||
Research and development | $ 12 | $ 154 | $ 336 | $ 988 |
Selling, general and administrative expenses | 1,546 | 2,125 | 2,292 | 5,347 |
Total operating expenses | 1,558 | 2,279 | 2,628 | 6,335 |
Loss from operations | (1,558) | (2,279) | (2,628) | (6,335) |
Other Income (Expense): | ||||
Loss on disposal of assets | 0 | (31) | 0 | (31) |
Settlement expense | (2,563) | 0 | (2,563) | 0 |
Interest expense | (4,658) | (479) | (5,296) | (933) |
Total other income (expense) | (7,221) | (510) | (7,859) | (964) |
Loss before provision for income taxes | (8,779) | (2,789) | (10,487) | (7,299) |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net loss | $ (8,779) | $ (2,789) | $ (10,487) | $ (7,299) |
Net loss per common share - basic and diluted | $ (.12) | $ (.05) | $ (.15) | $ (0.14) |
Weighted average common shares outstanding - basic and diluted | 71,899,937 | 51,918,252 | 70,978,579 | 51,507,849 |
Note 1 - The Company and Summary of Significant Accounting Policies |
6 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||
Accounting Policies [Abstract] | |||||||
The Company and Summary of Significant Accounting Policies | Business
In 1965, the corporate predecessor of GT Biopharma, Diagnostic Data, Inc. was incorporated in the State of California. Diagnostic Data changed its incorporation to the State of Delaware in 1972. and changed its name to DDI Pharmaceuticals, Inc. in 1985. In 1994, DDI Pharmaceuticals merged with International BioClinical, Inc. and Bioxytech S.A. and changed its name to OXIS International, Inc. In July 2017, the Company changed its name to GT Biopharma, Inc.
The Company is a clinical stage biopharmaceutical company focused on the development and commercialization of novel immuno-oncology products based off our proprietary Tri-specific Killer Engager (TriKE™), Tetra-specific Killer Engager (TetraKE™) and bi-specific ligand-directed single-chain fusion protein technology platforms. The Company’s TriKE and TetraKE platforms generate proprietary therapeutics designed to harness and enhance the cancer killing abilities of a patient’s own natural killer cells, or NK cells. Once bound to an NK cell, the Company’s moieties are designed to enhance the NK cell, and precisely direct it to one or more specifically-targeted proteins expressed on a specific type of cancer cell or virus infected cell, ultimately resulting in the targeted cell’s death. TriKEs and TetraKEs are made up of recombinant fusion proteins, can be designed to target any number of tumor antigens on hematologic malignancies, sarcomas or solid tumors and do not require patient-specific customization.
Going Concern
The Company’s current operations have focused on business planning, raising capital, establishing an intellectual property portfolio, hiring, and conducting preclinical studies and clinical trials. The Company does not have any product candidates approved for sale and has not generated any revenue from product sales. The Company has sustained operating losses since inception and expects such losses to continue over the foreseeable future.
The financial statements of the Company have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the financial statements do not include any adjustments that might be necessary should the Company be unable to continue in existence.
The Company has incurred substantial losses and negative cash flows from operations since its inception and has an accumulated deficit of $578 million and cash of $851 thousand as of June 30, 2020. The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales of its products currently in development. Substantial additional financing will be needed by the Company to fund its operations and to commercially develop its product candidates. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
Management is currently evaluating different strategies to obtain the required funding for future operations. These strategies may include but are not limited to: public offerings of equity and/or debt securities, payments from potential strategic research and development, and licensing and/or marketing arrangements with pharmaceutical companies. If the Company is unable to secure adequate additional funding, its business, operating results, financial condition and cash flows may be materially and adversely affected.
Use of Estimates
The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities revenues and expenses and disclosures of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.
Basis of Consolidation and Comprehensive Income
The accompanying consolidated financial statements include the accounts of GT Biopharma, Inc. and its subsidiaries. All intercompany balances and transactions have been eliminated. The Company’s financial statements are prepared using the accrual method of accounting.
Basis of Presentation
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Certain information and disclosures required by U.S. GAAP for complete consolidated financial statements have been condensed or omitted herein. The interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2019 filed with the SEC on March 27, 2020. The unaudited interim condensed consolidated financial information presented herein reflects all normal adjustments that are, in the opinion of management, necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented. The Company is responsible for the unaudited interim consolidated financial statements included in this report. The results of operations of any interim period are not necessarily indicative of the results for the full year.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.
Concentrations of Credit Risk
The Company’s cash and cash equivalents, marketable securities and accounts receivable are monitored for exposure to concentrations of credit risk. The Company maintains substantially all of its cash balances in a limited number of financial institutions. The balances are each insured by the Federal Deposit Insurance Corporation up to $250,000. The Company had a balance of approximately $600,000 in excess of this limit at June 30, 2020.
Stock Based Compensation to Employees
The Company accounts for its stock-based compensation for employees in accordance with Accounting Standards Codification (“ASC”) 718. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees over the related vesting period.
The Company granted no stock options during the six months ended June 30, 2020 and 2019, respectively.
Long-Lived Assets
Our long-lived assets include property, plant and equipment, capitalized costs of filing patent applications and other indefinite lived intangible assets. We evaluate our long-lived assets for impairment, other than indefinite lived intangible assets, in accordance with ASC 360, whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Estimates of future cash flows and timing of events for evaluating long-lived assets for impairment are based upon management’s judgment. If any of our intangible or long-lived assets are considered to be impaired, the amount of impairment to be recognized is the excess of the carrying amount of the assets over its fair value.
Applicable long-lived assets are amortized or depreciated over the shorter of their estimated useful lives, the estimated period that the assets will generate revenue, or the statutory or contractual term in the case of patents. Estimates of useful lives and periods of expected revenue generation are reviewed periodically for appropriateness and are based upon management’s judgment.
Impairment of Long-Lived Assets
The Company evaluates indefinite lived intangible assets for impairment at least annually and whenever impairment indicators are present in accordance with ASC 350. When necessary, the Company records an impairment loss for the amount by which the fair value is less than the carrying value of these assets. The fair value of intangible assets other than goodwill is typically determined using the “relief from royalty method”, specifically the discounted cash flow method utilizing Level 3 fair value inputs. Some of the more significant estimates and assumptions inherent in this approach include: the amount and timing of the projected net cash flows, which includes the expected impact of competitive, legal and/or regulatory forces on the projections and the impact of technological risk associated with IPR&D assets, as well as the selection of a long-term growth rate; the discount rate, which seeks to reflect the various risks inherent in the projected cash flows; and the tax rate, which seeks to incorporate the geographic diversity of the projected cash flows.
The Company performs impairment testing for all other long-lived assets whenever impairment indicators are present. When necessary, the Company calculates the undiscounted value of the projected cash flows associated with the asset, or asset group, and compares this estimated amount to the carrying amount. If the carrying amount is found to be greater, we record an impairment loss for the excess of book value over fair value.
Income Taxes
The Company accounts for income taxes using the asset and liability approach, whereby deferred income tax assets and liabilities are recognized for the estimated future tax effects, based on current enacted tax laws, of temporary differences between financial and tax reporting for current and prior periods. Deferred tax assets are reduced, if necessary, by a valuation allowance if the corresponding future tax benefits may not be realized.
Net Income (Loss) per Share
Basic net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period, plus the potential dilutive effect of common shares issuable upon exercise or conversion of outstanding, convertible notes and debentures (including shares issuable upon conversion of accrued interest or other default amounts with respect to such convertible notes or debentures), stock options and warrants during the period. The weighted average number of potentially dilutive common shares excluded from the calculation of net income (loss) per share totaled in 127,946,216 and 39,416,352 as of June 30, 2020 and 2019, respectively.
Patents
Acquired patents are capitalized at their acquisition cost or fair value. The legal costs, patent registration fees and models and drawings required for filing patent applications are capitalized if they relate to commercially viable technologies. Commercially viable technologies are those technologies that are projected to generate future positive cash flows in the near term. Legal costs associated with patent applications that are not determined to be commercially viable are expensed as incurred. All research and development costs incurred in developing the patentable idea are expensed as incurred. Legal fees from the costs incurred in successful defense to the extent of an evident increase in the value of the patents are capitalized.
Capitalized cost for pending patents are amortized on a straight-line basis over the remaining twenty year legal life of each patent after the costs have been incurred. Once each patent is issued, capitalized costs are amortized on a straight-line basis over the shorter of the patent’s remaining statutory life, estimated economic life or ten years.
Fixed Assets
Fixed assets are stated at cost. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, which are 3 to 10 years for machinery and equipment and the shorter of the lease term or estimated economic life for leasehold improvements.
Fair Value
The carrying amounts reported in the balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels are defined as follows:
Research and Development
Research and development costs are expensed as incurred and reported as research and development expense. Research and development costs totaled $0.3 million and $1 million for the six months ended June 30, 2020 and 2019, respectively.
Revenue Recognition
License Revenue
License arrangements may consist of non-refundable upfront license fees, exclusive licensed rights to patented or patent pending technology, and various performance or sales milestones and future product royalty payments. Some of these arrangements are multiple element arrangements.
Non-refundable, up-front fees that are not contingent on any future performance by us, and require no consequential continuing involvement on our part, are recognized as revenue when the license term commences and the licensed data, technology and/or compound is delivered. We defer recognition of non-refundable upfront fees if we have continuing performance obligations without which the technology, right, product or service conveyed in conjunction with the non-refundable fee has no utility to the licensee that is separate and independent of our performance under the other elements of the arrangement. In addition, if we have continuing involvement through research and development services that are required because our know-how and expertise related to the technology is proprietary to us, or can only be performed by us, then such up-front fees are deferred and recognized over the period of continuing involvement.
Payments related to substantive, performance-based milestones in a research and development arrangement are recognized as revenue upon the achievement of the milestones as specified in the underlying agreements when they represent the culmination of the earnings process. As of June 30, 2020, the Company has not generated any licensing revenue.
|
Note 2 - Debt |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Convertible Notes/Debentures
As of June 30, 2020, the Company had approximately $21.8 million aggregate principal amount of convertible notes and debentures (collectively, the “Convertible Notes”) outstanding that were issued pursuant to securities purchase agreements (or, in the case of the Settlement Notes (as defined herein), the Settlement Agreement (as defined herein)) entered into with numerous investors. The Company issued an additional approximately $3.2 million aggregate principal amount of Convertible Notes on July 7, 2020. See Note 6, Subsequent Events under the caption “Convertible Notes.”
The Convertible Notes are convertible at any time, at the holder’s option, into shares of the Company’s common stock at an initial conversion price, subject to certain beneficial ownership limitations (which vary between maximum ownership of between 4.99% and 9.99%). The conversion price of the Convertible Notes is also generally subject to adjustment due to certain events, including stock dividends, stock splits and in connection with the issuance by the Company of common stock or common stock equivalents at an effective price per share lower than the conversion price then in effect. The conversion price for each of the Company’s outstanding Convertible Notes is currently $0.20 per share. In addition, approximately $5.2 million aggregate principal amount of the Company’s Convertible Notes will be subject to mandatory conversion in connection with the completion of a future financing in the amount of at least $15 million, subject to the beneficial ownership limitations described above.
The Convertible Notes generally have terms of six months to one year and mature between August 2, 2019 and January 7, 2021, unless earlier converted or repurchased. The Convertible Notes each accrue interest at a rate of 10% per annum, subject to increase to 18% per annum upon and during the occurrence of an event of default with respect to certain of the Convertible Notes. Interest is payable in cash or, with respect to certain of the Convertible Notes, and at the holder’s option, in shares of common stock based on the conversion price then in effect.
Pursuant to the terms of the Settlement Notes, the Company is required to make an offer to repurchase, at the holder’s option, the Settlement Notes at price in cash equal to 100% of the aggregate principal amount of the Settlement Note plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase following the consummation by the Company of a financing transaction, or a series of transactions, resulting in aggregate gross proceeds to the Company in excess of $7.5 million. Generally, the Company otherwise does not have the right to prepay any of the Convertible Notes without the prior written consent of the holders of such securities.
The Convertible Notes contain a number of affirmative and negative covenants and customary events of default. As of June 30, 2020, approximately $13.2 aggregate principal amount of our Convertible Notes were in default. See “Forbearance Agreements” below.
The securities purchase agreements and Settlement Agreement, as applicable, also generally contain certain ongoing covenants of the Company, including rights of participation in certain future financing transactions, limitations on future variable rate transactions and “at-the-market” offerings and “most favored nation” provisions giving holders of certain of the Convertible Notes the benefit of any terms or conditions under which the Company agrees to issue or sell any common stock or common stock equivalents that are more favorable to an investor than the terms and conditions granted to such holder under the applicable securities purchase agreement and the transactions contemplated thereby.
The Convertible Notes are senior obligations of the Company. In addition, approximately $8.9 million aggregate principal amount of the Convertible Notes are secured by a first priority security interest in substantially all of the assets of the Company and its subsidiaries. Convertible Notes are also secured by individual pledges by certain of our current and former officers and directors of our common stock owned by such officer and directors.
For additional information about the Convertible Notes, see Note 4, Debt to the Company’s audited consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, 2019.
Forbearance Agreements
Effective as of June 23, 2020, the Company entered into Standstill and Forbearance Agreements (collectively, the “Forbearance Agreements”) with the holders of $13.2 million aggregate principal amount of the Convertible Notes (the “Default Notes”), which are currently in default. Pursuant to the Forbearance Agreements, the holders of the Default Notes have agreed to forbear from exercising their rights and remedies under the Default Notes (including declaring such Default Notes (together with any default amounts and accrued and unpaid interest) immediately due and payable) until the earlier of (i) the date that the Company completes a future financing in the amount of $15 million and, in connection therewith, commences listing on NASDAQ (collectively, the “New Financing”) or (ii) October 1, 2020 (the “Termination Date”). As a result of the ongoing default, the Default Notes are currently accruing interest at the default rate of 18% per annum and have accrued additional default amounts of approximately $3.9 million in the aggregate as of June 30, 2020.
The obligations of the holders to forbear from exercising their rights and remedies under the Default Notes pursuant to the Forbearance Agreements will terminate on the earliest of (i) the Termination Date, (ii) the date of any bankruptcy filing by the Company or its subsidiaries, (iii) the date on which the Company defaults on any of the terms and conditions of the Forbearance Agreements or (iv) the date the Forbearance Agreements are otherwise terminated or expire.
The Forbearance Agreements contain various customary and other representations, warranties and covenants of the Company and the holders of the Default Notes, including an agreement that the Default Notes (together with default amounts and accrued and unpaid interest) will be converted into common stock upon the closing of a New Financing at a conversion price equal to the lesser of (i) the conversion price in effect for the Default Notes on the date of such New Financing or (ii) 75% of the lowest per share price at which common stock is or may be issued in connection with such New Financing, in each case, subject to certain beneficial ownership limitations (with a maximum ownership limit of 9.99%). Shares of the Company’s preferred stock, which are convertible into the Company’s common stock, will be issued in lieu of common stock to the extent that conversion of the Default Notes is prohibited by such beneficial ownership limitations.
Settlement Notes
On June 19, 2020, the Company entered into a settlement agreement (the “Settlement Agreement”) with Empery Asset Master Ltd., Empery Tax Efficient, LP and Empery Tax Efficient II, LP (collectively, the “Empery Funds”), Anthony Cataldo and Paul Kessler resolving all remaining disputes between the parties pertaining to certain Convertible Notes and warrants to purchase common stock of the Company (collectively, the “Original Securities”) issued by the Company to the Empery Funds in January 2018 pursuant to a securities purchase agreement. In connection with the Settlement Agreement, the Company issued Convertible Notes in an aggregate principal amount of $450,000 (the “Settlement Notes”) to the Empery Funds on June 19, 2020. The Settlement Notes are convertible at any time, at the holder’s option, into shares of our common stock at an initial conversion price of $0.20 per share, subject to certain beneficial ownership limitations (with a maximum ownership limit of 4.99%).
The Settlement Notes mature on December 19, 2020, unless earlier converted or repurchased. The terms of the Settlement Notes are generally the same as the Company’s other Convertible Notes, except that the Company is required to make an offer to repurchase, at the option of each holder, the Settlement Notes at price in cash equal to 100% of the aggregate principal amount of the Settlement Notes plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase following the consummation by the Company of a financing transaction, or a series of transactions, resulting in aggregate gross proceeds to the Company in excess of $7.5 million.
Fiscal 2019 and Fiscal 2020 Convertible Notes Transactions
On February 4, 2019, the Company entered into a securities purchase agreement with certain purchasers pursuant to which it issued secured Convertible Notes in an aggregate principal amount of $1,352,224, consisting of gross proceeds of $1,052,224 and settlement of existing debt of $300,000, which Convertible Notes were convertible into common stock at an initial conversion price of $0.60 per share.
On May 22, 2019, the Company entered into a securities purchase agreement with certain purchasers pursuant to which the Company issued Convertible Notes in an aggregate principal amount of $1,300,000, which Convertible Notes were convertible into the Company’s common stock at an initial conversion price of $0.35 per share.
Between July 31 and August 28, 2019, the Company entered into a securities purchase agreement with certain purchasers pursuant to which the Company issued Convertible Notes in an aggregate principal amount of $975,000, which Convertible Notes are convertible into the Company’s common stock at an initial conversion price of $0.20 per share.
On December 19, 2019, the Company entered into a securities purchase agreement with one purchaser pursuant to which the Company issued Convertible Notes in an aggregate principal amount of $200,000, which Convertible Notes are convertible into the Company’s common stock at an initial conversion price of $0.20 per share.
On January 30, 2020, the Company entered into a securities purchase agreement with one purchaser pursuant to which the Company issued Convertible Notes in an aggregate principal amount of $200,000, which Convertible Notes are convertible into the Company’s common stock at an initial conversion price of $0.20 per share.
Between April 20 and May 7, 2020, the Company entered into a securities purchase agreement with certain purchasers pursuant to which the Company issued Convertible Notes in an aggregate principal amount of $2,017,000, which Convertible Notes are convertible into the Company’s common stock at an initial conversion price of $0.20 per share.
On June 19, 2020, the Company entered into the Settlement Agreement pursuant to which the Company issued the Settlement Notes in an aggregate principal amount of $450,000, which Settlement Notes are convertible into the Company’s common stock at an initial conversion price of $0.20 per share.
On July 7, 2020, the Company entered into a securities purchase agreement with certain purchasers pursuant to which the Company issued Convertible Notes in an aggregate principal amount of $3,190,000, which Convertible Notes are convertible into the Company’s common stock at an initial conversion price of $0.20 per share.
Gemini Financing Agreement
On November 8, 2010, the Company entered into a financing arrangement with Gemini Pharmaceuticals, Inc., a product development and manufacturing partner of the Company, pursuant to which Gemini Pharmaceuticals made a $250,000 strategic equity investment in the Company and agreed to make a $750,000 purchase order line of credit facility available to the Company. The outstanding principal of all advances under the line of credit will bear interest at the rate of interest of prime plus 2% per annum. There is $31,000 due on this credit line at June 30, 2020.
|
Note 3 - Stockholders' Equity |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Stockholders' Deficit: | |
Stockholders' Equity | Common Stock
Our authorized capital stock consists of 750,000,000 shares of common stock, par value $0.001 per share, and 15,000,000 shares of preferred stock, par value $0.01 per share. As of June 30, 2020, 75,435,862 shares of common stock were issued and outstanding.
During the six months ended June 30, 2020, the Company issued 1,064,734 shares of common stock upon conversion of $212,947 in principal and interest on Convertible Notes.
On May 1, 2020, the Company issued 1,086,429 shares of common stock for consulting services.
On June 19, 2020, the Company issued 3,500,000 shares of common stock pursuant to the Settlement Agreement.
Preferred Stock
The 96,230 shares of Series C preferred stock, par value $0.01 per share (the “Series C Preferred Stock”), are convertible into 111 shares of the Company’s common stock at the option of the holders at any time. The conversion ratio is based on the average closing bid price of the common stock for the fifteen consecutive trading days ending on the date immediately preceding the date notice of conversion is given, but cannot be less than 0.20 or more than 0.2889 common shares for each share of Series C Preferred Stock. The conversion ratio may be adjusted under certain circumstances such as stock splits or stock dividends. The Company has the right to automatically convert the Series C Preferred Stock into common stock if the Company lists its shares of common stock on the Nasdaq National Market and the average closing bid price of the Company’s common stock on the Nasdaq National Market for 15 consecutive trading days exceeds $3,000.00. Each share of Series C Preferred Stock is entitled to the number of votes equal to 0.26 divided by the average closing bid price of the Company’s common stock during the fifteen consecutive trading days immediately prior to the date such shares of Series C Preferred Stock were purchased. In the event of liquidation, the holders of the Series C Preferred Stock shall participate on an equal basis with the holders of the common stock (as if the Series C Preferred Stock had converted into common stock) in any distribution of any of the assets or surplus funds of the Company. The holders of Series C Preferred Stock are entitled to noncumulative dividends if and when declared by the Company’s board of directors (the “Board”). No dividends to holders of the Series C Preferred Stock were issued or unpaid through June 30, 2020.
On September 1, 2017, the Company designated 2,000,000 shares of Series J preferred stock (the “Series J Preferred Stock”). On the same day, the Board issued 1,513,548 shares of Series J Preferred Stock in exchange for the cancellation of certain indebtedness. In the first quarter of 2019, it was discovered that a certificate of designation with respect to the Series J Preferred Stock had never been filed with the Office of the Secretary of State for the State of Delaware. Legal research determined that despite the fact the Company had issued shares of Series J Preferred Stock, those shares had, in fact, never existed.
To remedy the situation, on April 4, 2019, the Company filed a certificate of designation with the Office of the Secretary State for the State of Delaware designating a series of preferred stock as the Series J-1 preferred stock, par value $0.01 per share (the “Series J-1 Preferred Stock”). On April 19, 2019, the Company issued 2,353,548 shares of Series J-1 Preferred Stock. The issuance was in lieu of the Series J Preferred Stock that should have been issued on September 1, 2017, and in settlement for not receiving preferred stock until 20 months after the debt for which the stock was issued was cancelled. The Company reflected an expense in general and administrative costs in the quarter ended June 30, 2019 totaling $1,140,000.
Shares of the Series J-1 Preferred Stock are convertible at any time, at the option of the holders, into shares of the Company’s common stock at an effective conversion price of $0.20 per share, subject to adjustment for, among other things, stock dividends, stock splits, combinations, reclassifications of our capital stock and mergers or consolidations, and subject to a beneficial ownership limitation which prohibits conversion if such conversion would result in the holder (together with its affiliates) being the beneficial owner of in excess of 9.99% of the Company’s common stock. Shares of the Series J-1 Preferred Stock have the same voting rights a shares of the Company’s common stock, with the holders of the Series J-1 Preferred Stock entitled to vote on an as-converted-to-common stock basis, subject to the beneficial ownership limitation described above, together with the holders of the Company’s common stock on all matters presented to the Company’s stockholders. The Series J-1 Preferred Stock are not entitled to any dividends (unless specifically declared by the Board), but will participate on an as-converted-to-common-stock basis in any dividends to the holders of the Company’s common stock. In the event of the Company’s dissolution, liquidation or winding up, the holders of the Series J-1 Preferred Stock will be on parity with the holders of the Company’s common stock and will participate, on a on an as-converted-to-common stock basis, in any distribution to holders of the Company’s common stock.
|
Note 4 - Stock Options and Warrants |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Options and Warrants | Stock Options
The following table summarizes stock option transactions for the six months ended June 30, 2020:
Common Stock Warrants
Warrant transactions for the six months ended June 30, 2020 are as follows:
Settlement Warrants
Pursuant to the Settlement Agreement, the Company issued pre-funded warrants to purchase up to an aggregate of 5,500,000 shares of common stock (the “Settlement Warrants”) at an exercise price of $0.20 per share, subject to adjustment in certain circumstances. The Settlement Warrants expire on June 19, 2025. The aggregate exercise price of the Settlement Warrants was deemed to be pre-funded to the Company in conjunction with exchange of previously issued warrants to purchase 480,352 shares of common stock pursuant to the Settlement Agreement. Exercise of the Settlement Warrant is subject to certain additional terms and conditions, including certain beneficial ownership limitations.
Forbearance Agreements
Pursuant to the Forbearance Agreements, (i) the exercise price of all warrants to purchase common stock held by holders of the Default Notes will be reduced to equal the conversion price of the Default Notes and (ii) the number of shares of common stock underlying such warrants shall be increased so that the total exercise price of all such warrants after the decrease in the exercise price equals the total exercise price of all such warrants prior to the decrease in the exercise price. Further, the expiration date of all such warrants shall be extended for three years following the closing date of any New Financing.
|
Note 5 - Commitments and Contingencies |
6 Months Ended | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||
Commitments and Contingencies | Leases
On October 1, 2018, the Company entered into a three-year lease agreement for its office in Westlake Village, CA. In addition to minimum rent, certain leases require payment of real estate taxes, insurance, common area maintenance charges and other executory costs. The Company recognizes rent expense under such arrangements on a straight-line basis over the effective term of each lease.
The following table summarizes the Company’s future minimum lease commitments as of June 30, 2020:
Rent expense for the six months ended June 30, 2020 and 2019 was $35,000 and $35,000, respectively.
|
Note 6 - Subsequent Events |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Convertible Notes
On July 7, 2020, the Company entered into a securities purchase agreement with certain purchasers pursuant to which the Company issued Convertible Notes in an aggregate principal amount of $3,190,000 (the “July 2020 Notes”). The July 2020 Notes are convertible at any time, at the holder’s option, into shares of our common stock at an initial conversion price of $0.20 per share, subject to certain beneficial ownership limitations (with a maximum ownership limit of 9.99%).
The July 2020 Notes mature on January 7, 2021, unless earlier converted or repurchased. The terms of the July 2020 Notes are generally the same as the Company’s other Convertible Notes, except that the July 2020 Notes will be subject to mandatory conversion in the event of the completion of a future financing in the amount of at least $15 million at a conversion price equal to the lesser of (i) the conversion price in effect for the July 2020 Notes on the date of completion of such financing or (ii) 75% of the lowest per share price at which common stock may be issued in connection with any conversion rights associated with the financing, in each case, subject to the beneficial ownership limitations described above. See Note 2, Debt under the caption “Convertible Notes/Debentures” for additional information regarding the terms of the Company’s Convertible Notes.
Common Stock
In July 2020, the Company issued 1,125,000 shares of common stock upon conversion of $225,000 aggregate principal amount of Convertible Notes.
Warrant
On July 28, 2020, the Company issued a warrant to purchase up to an aggregate of 1,000,000 shares of common stock at an exercise price of $0.20 per share, subject to adjustment in certain circumstances. The warrant expires on July 28, 2025. The warrant was issued as compensation for certain services provided to the Company.
Employment Agreements
Effective August 11, 2020 (the “Effective Date”), the Company and Anthony J. Cataldo (“Mr. Cataldo”) entered into an employment agreement (the “Cataldo Agreement”) with respect to Mr. Cataldo’s continued employment as Chief Executive Officer of the Company. The term of the Cataldo Agreement is three years (the “Initial Term”) with the option of automatic one-year renewals thereafter. Mr. Cataldo will be paid a cash salary of $30,000 per month, together with customary benefits, expense reimbursement and the possibility of performance bonuses. Mr. Cataldo will receive a stock grant equal to ten percent of the fully diluted shares of common stock of the Company (calculated with the inclusion of the current stock holdings of Mr. Cataldo) upon conversion of options, warrants and Convertible Notes in association with a national markets qualified financing as consideration for entering into the Cataldo Agreement (with such stock to vest and be delivered within 30 days after the national markets qualified financing). Mr. Cataldo will be entitled to certain additional severance payments and other benefits in connection with a Change in Control Period Involuntary Termination or a Non Change in Control Period Involuntary Termination (each as defined in the Cataldo Agreement) or his resignation as a result of a Change in Control Period Good Reason or Non Change in Control Period Good Reason (each as defined in the Cataldo Agreement). Following the Effective Date, Mr. Cataldo will also continue to serve as the chairman of the board of the Company.
Effective August 11, 2020, the Company and Steven Weldon (“Mr. Weldon”) entered into an employment agreement (the “Weldon Agreement” and, together with the Cataldo Agreement, the “Employment Agreements”) with respect to Mr. Weldon's continued employment as the Chief Financial Officer of the Company. The term of the Weldon Agreement is three years (the “Initial Term”) with the option of automatic one-year renewals thereafter. Mr. Weldon will be paid a cash salary of $25,000 per month, together with customary benefits, expense reimbursement and the possibility of performance bonuses. Mr. Weldon will receive a stock grant equal to seven percent of the fully diluted shares of common stock of the Company (calculated with the inclusion of the current stock holdings of Mr. Weldon) upon conversion of options, warrants and Convertible Notes in association with a national markets qualified financing as consideration for entering into the Weldon Agreement (with such stock to vest and be delivered within 30 days after the national markets qualified financing). Mr. Weldon will be entitled to certain additional severance payments and other benefits in connection with a Change in Control Period Involuntary Termination or a Non Change in Control Period Involuntary Termination (each as defined in the Weldon Agreement) or his registration as a result of a Change in Control Period Good Reason or Non Change in Control Period Good Reason (each as defined in the Weldon Agreement). Following the Effective Date, Mr. Weldon will also continue to serve as the principal accounting officer and as a director of the Company. |
Note 1 - The Company and Summary of Significant Accounting Policies (Policies) |
6 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||
Accounting Policies [Abstract] | |||||||
Business | In 1965, the corporate predecessor of GT Biopharma, Diagnostic Data, Inc. was incorporated in the State of California. Diagnostic Data changed its incorporation to the State of Delaware in 1972. and changed its name to DDI Pharmaceuticals, Inc. in 1985. In 1994, DDI Pharmaceuticals merged with International BioClinical, Inc. and Bioxytech S.A. and changed its name to OXIS International, Inc. In July 2017, the Company changed its name to GT Biopharma, Inc.
The Company is a clinical stage biopharmaceutical company focused on the development and commercialization of novel immuno-oncology products based off our proprietary Tri-specific Killer Engager (TriKE™), Tetra-specific Killer Engager (TetraKE™) and bi-specific ligand-directed single-chain fusion protein technology platforms. The Company’s TriKE and TetraKE platforms generate proprietary therapeutics designed to harness and enhance the cancer killing abilities of a patient’s own natural killer cells, or NK cells. Once bound to an NK cell, the Company’s moieties are designed to enhance the NK cell, and precisely direct it to one or more specifically-targeted proteins expressed on a specific type of cancer cell or virus infected cell, ultimately resulting in the targeted cell’s death. TriKEs and TetraKEs are made up of recombinant fusion proteins, can be designed to target any number of tumor antigens on hematologic malignancies, sarcomas or solid tumors and do not require patient-specific customization.
|
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Going Concern | The Company’s current operations have focused on business planning, raising capital, establishing an intellectual property portfolio, hiring, and conducting preclinical studies and clinical trials. The Company does not have any product candidates approved for sale and has not generated any revenue from product sales. The Company has sustained operating losses since inception and expects such losses to continue over the foreseeable future.
The financial statements of the Company have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the financial statements do not include any adjustments that might be necessary should the Company be unable to continue in existence.
The Company has incurred substantial losses and negative cash flows from operations since its inception and has an accumulated deficit of $578 million and cash of $851 thousand as of June 30, 2020. The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales of its products currently in development. Substantial additional financing will be needed by the Company to fund its operations and to commercially develop its product candidates. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
Management is currently evaluating different strategies to obtain the required funding for future operations. These strategies may include but are not limited to: public offerings of equity and/or debt securities, payments from potential strategic research and development, and licensing and/or marketing arrangements with pharmaceutical companies. If the Company is unable to secure adequate additional funding, its business, operating results, financial condition and cash flows may be materially and adversely affected.
|
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Use of Estimates | The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities revenues and expenses and disclosures of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.
|
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Basis of Consolidation and Comprehensive Income | The accompanying consolidated financial statements include the accounts of GT Biopharma, Inc. and its subsidiaries. All intercompany balances and transactions have been eliminated. The Company’s financial statements are prepared using the accrual method of accounting.
|
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Basis of Presentation | The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Certain information and disclosures required by U.S. GAAP for complete consolidated financial statements have been condensed or omitted herein. The interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2019 filed with the SEC on March 27, 2020. The unaudited interim condensed consolidated financial information presented herein reflects all normal adjustments that are, in the opinion of management, necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented. The Company is responsible for the unaudited interim consolidated financial statements included in this report. The results of operations of any interim period are not necessarily indicative of the results for the full year.
|
||||||
Cash and Cash Equivalents | The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.
|
||||||
Concentrations of Credit Risk | The Company’s cash and cash equivalents, marketable securities and accounts receivable are monitored for exposure to concentrations of credit risk. The Company maintains substantially all of its cash balances in a limited number of financial institutions. The balances are each insured by the Federal Deposit Insurance Corporation up to $250,000. The Company had a balance of approximately $600,000 in excess of this limit at June 30, 2020.
|
||||||
Stock Based Compensation to Employees | The Company accounts for its stock-based compensation for employees in accordance with Accounting Standards Codification (“ASC”) 718. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees over the related vesting period.
The Company granted no stock options during the six months ended June 30, 2020 and 2019, respectively.
|
||||||
Long-Lived Assets | Our long-lived assets include property, plant and equipment, capitalized costs of filing patent applications and other indefinite lived intangible assets. We evaluate our long-lived assets for impairment, other than indefinite lived intangible assets, in accordance with ASC 360, whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Estimates of future cash flows and timing of events for evaluating long-lived assets for impairment are based upon management’s judgment. If any of our intangible or long-lived assets are considered to be impaired, the amount of impairment to be recognized is the excess of the carrying amount of the assets over its fair value.
Applicable long-lived assets are amortized or depreciated over the shorter of their estimated useful lives, the estimated period that the assets will generate revenue, or the statutory or contractual term in the case of patents. Estimates of useful lives and periods of expected revenue generation are reviewed periodically for appropriateness and are based upon management’s judgment.
|
||||||
Impairment of Long Lived Assets | The Company evaluates indefinite lived intangible assets for impairment at least annually and whenever impairment indicators are present in accordance with ASC 350. When necessary, the Company records an impairment loss for the amount by which the fair value is less than the carrying value of these assets. The fair value of intangible assets other than goodwill is typically determined using the “relief from royalty method”, specifically the discounted cash flow method utilizing Level 3 fair value inputs. Some of the more significant estimates and assumptions inherent in this approach include: the amount and timing of the projected net cash flows, which includes the expected impact of competitive, legal and/or regulatory forces on the projections and the impact of technological risk associated with IPR&D assets, as well as the selection of a long-term growth rate; the discount rate, which seeks to reflect the various risks inherent in the projected cash flows; and the tax rate, which seeks to incorporate the geographic diversity of the projected cash flows.
The Company performs impairment testing for all other long-lived assets whenever impairment indicators are present. When necessary, the Company calculates the undiscounted value of the projected cash flows associated with the asset, or asset group, and compares this estimated amount to the carrying amount. If the carrying amount is found to be greater, we record an impairment loss for the excess of book value over fair value.
|
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Income Taxes | The Company accounts for income taxes using the asset and liability approach, whereby deferred income tax assets and liabilities are recognized for the estimated future tax effects, based on current enacted tax laws, of temporary differences between financial and tax reporting for current and prior periods. Deferred tax assets are reduced, if necessary, by a valuation allowance if the corresponding future tax benefits may not be realized.
|
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Net Income (Loss) per Share | Basic net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period, plus the potential dilutive effect of common shares issuable upon exercise or conversion of outstanding, convertible notes and debentures (including shares issuable upon conversion of accrued interest or other default amounts with respect to such convertible notes or debentures), stock options and warrants during the period. The weighted average number of potentially dilutive common shares excluded from the calculation of net income (loss) per share totaled in 127,946,216 and 39,416,352 as of June 30, 2020 and 2019, respectively.
|
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Patents | Acquired patents are capitalized at their acquisition cost or fair value. The legal costs, patent registration fees and models and drawings required for filing patent applications are capitalized if they relate to commercially viable technologies. Commercially viable technologies are those technologies that are projected to generate future positive cash flows in the near term. Legal costs associated with patent applications that are not determined to be commercially viable are expensed as incurred. All research and development costs incurred in developing the patentable idea are expensed as incurred. Legal fees from the costs incurred in successful defense to the extent of an evident increase in the value of the patents are capitalized.
Capitalized cost for pending patents are amortized on a straight-line basis over the remaining twenty year legal life of each patent after the costs have been incurred. Once each patent is issued, capitalized costs are amortized on a straight-line basis over the shorter of the patent’s remaining statutory life, estimated economic life or ten years.
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Fixed Assets | Fixed assets are stated at cost. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, which are 3 to 10 years for machinery and equipment and the shorter of the lease term or estimated economic life for leasehold improvements.
|
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Fair Value | The carrying amounts reported in the balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels are defined as follows:
|
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Research and Development | Research and development costs are expensed as incurred and reported as research and development expense. Research and development costs totaled $0.3 million and $1 million for the six months ended June 30, 2020 and 2019, respectively.
|
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Revenue Recognition | License Revenue
License arrangements may consist of non-refundable upfront license fees, exclusive licensed rights to patented or patent pending technology, and various performance or sales milestones and future product royalty payments. Some of these arrangements are multiple element arrangements.
Non-refundable, up-front fees that are not contingent on any future performance by us, and require no consequential continuing involvement on our part, are recognized as revenue when the license term commences and the licensed data, technology and/or compound is delivered. We defer recognition of non-refundable upfront fees if we have continuing performance obligations without which the technology, right, product or service conveyed in conjunction with the non-refundable fee has no utility to the licensee that is separate and independent of our performance under the other elements of the arrangement. In addition, if we have continuing involvement through research and development services that are required because our know-how and expertise related to the technology is proprietary to us, or can only be performed by us, then such up-front fees are deferred and recognized over the period of continuing involvement.
Payments related to substantive, performance-based milestones in a research and development arrangement are recognized as revenue upon the achievement of the milestones as specified in the underlying agreements when they represent the culmination of the earnings process. As of June 30, 2020, the Company has not generated any licensing revenue.
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Note 4 - Stock Options and Warrants (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the stock option activity |
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|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the warrant activity |
|
Note 5 - Commitments and Contingencies (Tables) |
6 Months Ended | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||
Schedule of future minimum lease commitments |
|
Note 1 - The Company and Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Accounting Policies [Abstract] | ||||||
Accumulated deficit | $ (577,819) | $ (577,819) | $ (567,332) | |||
Cash and cash equivalent | 851 | $ 264 | 851 | $ 264 | $ 28 | $ 60 |
Cash in excess of insured limit | $ 600 | $ 600 | ||||
Stock options granted | 0 | 0 | ||||
Diluted shares excluded from calcuation of EPS | 127,946,216 | 39,416,352 | 127,946,216 | 39,416,352 | ||
Research and development | $ 12 | $ 154 | $ 336 | $ 988 |
Note 2 - Debt (Details Narrative) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Disclosure [Abstract] | ||
Convertible notes | $ 21,844 | $ 13,207 |
Line of credit | $ 31 | $ 31 |
Note 3 - Stockholders' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Stockholders' Deficit: | ||
Common stock, authorized | 750,000,000 | 750,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 15,000,000 | 15,000,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Common stock, issued | 75,435,862 | 69,784,699 |
Common stock, outstanding | 75,435,862 | 69,784,699 |
Issuance of common stock for convertible notes, shares (in thousands) | 1,065 | |
Issuance of common stock for convertible notes, amount | $ 213 |
Note 4 - Stock Options and Warrants (Details) - $ / shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Equity [Abstract] | ||
Outstanding, beginning (in thousands) | 40 | |
Granted (in thousands) | 0 | 0 |
Exercised (in thousands) | 0 | |
Expired (in thousands) | 0 | |
Outstanding, ending (in thousands) | 40 | |
Exercisable (in thousands) | 40 | |
Outstanding, beginning | $ 877.50 | |
Granted | .00 | |
Exercised | .00 | |
Expired | .00 | |
Outstanding, ending | 877.50 | |
Exercisable | $ 877.50 |
Note 4 - Stock Options and Warrants (Details 1) |
6 Months Ended |
---|---|
Jun. 30, 2020
$ / shares
shares
| |
Equity [Abstract] | |
Outstanding, beginning | shares | 1,813,053 |
Granted | shares | 5,500,000 |
Forfeited | shares | 480,352 |
Exercised | shares | 0 |
Outstanding, ending | shares | 6,832,701 |
Exercisable | shares | 6,832,701 |
Outstanding, beginning | $ / shares | $ 0.20 |
Granted | $ / shares | 0.20 |
Forfeited | $ / shares | 0.20 |
Exercised | $ / shares | 0.00 |
Outstanding, ending | $ / shares | .20 |
Exercisable | $ / shares | $ .20 |
Note 5 - Commitments and Contingencies (Details) $ in Thousands |
Jun. 30, 2020
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 36 |
2021 | 61 |
Total minimum lease payments | $ 97 |
Note 5 - Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Rent expense | $ 35 | $ 35 |
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