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Business, Liquidity and Capital Resources
3 Months Ended
Mar. 31, 2020
Business, Liquidity and Capital Resources [Abstract]  
BUSINESS, LIQUIDITY AND CAPITAL RESOURCES

NOTE 1 – BUSINESS, LIQUIDITY AND CAPITAL RESOURCES

 

Overview

 

Protara Therapeutics, Inc. and its consolidated subsidiaries ("Protara" or the "Company") is focused on identifying and advancing transformative therapies for people with rare and specialty diseases. Protara's portfolio includes its lead program, TARA-002, an investigational cell based therapy being developed for the treatment of lymphatic malformations, and Intravenous (IV) Choline Chloride, an investigational phospholipid substrate replacement therapy initially in development for patients receiving parenteral nutrition (PN) who have intestinal failure associated liver disease (IFALD).

 

On January 9, 2020, privately-held ArTara Subsidiary, Inc. ("Private ArTara") and Protara Therapeutics, Inc. (formerly ArTara Therapeutics, Inc., formerly Proteon Therapeutics, Inc.) completed the merger and reorganization (the "Merger"), in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated September 23, 2019, (the "Merger Agreement") by and among Protara Therapeutics, Inc., Private ArTara and REM 1 Acquisition, Inc., a wholly owned subsidiary of Protara Therapeutics, Inc. Thereupon, Merger Sub merged with and into Private ArTara, with Private ArTara surviving as a wholly owned subsidiary of Protara Therapeutics, Inc. The Merger was structured as a reverse merger and Private ArTara was determined to be the accounting acquirer based on the terms of the Merger and other factors, and the post-merger company retained the name ArTara Therapeutics, Inc., which on May 11, 2020 was changed to Protara Therapeutics, Inc.

 

On January 9, 2020, in connection with, and prior to the completion of, the Merger, Protara Therapeutics, Inc. effected a 1-for-40 reverse stock split of its common stock, or the Reverse Stock Split, Private ArTara changed its name from "ArTara Therapeutics, Inc." to "ArTara Subsidiary, Inc.", and ArTara Therapeutics, Inc. changed its name from "Proteon Therapeutics, Inc." to "ArTara Therapeutics, Inc." All share and per share amounts presented in this quarterly report on Form 10-Q have been adjusted to reflect the Reverse Stock Split and the Exchange Ratio. In addition, immediately following the closing of the Private Placements (defined below), all of the outstanding shares of Protara Therapeutic, Inc.'s Series A Preferred Stock were converted into shares of Protara Therapeutics, Inc.'s Common Stock. Shares of the Company's Common Stock commenced trading on The Nasdaq Capital Market under the new name and ticker symbol "TARA" as of market open on January 10, 2020. See Note 3 for the full discussion regarding the Merger, Exchange Ratio and recapitalization.

 

Liquidity, Capital Resources and Management Plans

 

As of March 31, 2020 and December 31, 2019, the Company's cash and cash equivalents on hand was $36,068,736 and $564,124, respectively. The Company has not generated revenues since its inception and has incurred net losses of $10,060,257 and $1,528,056 for the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, the Company had working capital of $34,713,864 and stockholder's equity of $64,741,841. During the three months ended March 31, 2020, cash flows used in operating activities were $7,145,959, consisting primarily of a net loss of $10,060,257, which includes non-cash stock-based compensation charges of $2,797,807. Since inception, the Company has met its liquidity requirements principally through the sale of its Common Stock in private placements.

 

In connection with the Merger, the Company consummated the Private Placements, raising gross proceeds of $42.5 million and proceeds, net of offering costs, of $39.6 million.

 

The Company is in the business of developing biopharmaceuticals and has no current or near term revenues. The Company has incurred substantial clinical and other costs in its drug development efforts. The Company will need to raise additional capital in order to fully realize management's plans.

 

The Company believes that its current financial resources, as of the date of the issuance of these consolidated financial statements, are sufficient to satisfy the Company's estimated liquidity needs for at least twelve months from the issuance of these unaudited consolidated financial statements.