Exhibit 99.1
NLS PHARMACEUTICS LTD.
UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021
NLS PHARMACEUTICS LTD.
UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
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NLS PHARMACEUTICS LTD.
UNAUDITED INTERIM CONDENSED BALANCE SHEETS
| June 30, 2022 | December 31, 2021 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Prepaid expenses and other current assets (Note 3) | ||||||||
| Total current assets | ||||||||
| Property and equipment (Note 4) | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Note payable (Note 5) | $ | $ | ||||||
| Accounts payable, including related party of $ | ||||||||
| Other accrued liabilities, including related party of $ | ||||||||
| Total current liabilities | ||||||||
| Deferred revenues (Note 7) | ||||||||
| Accrued pension liability | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 8) | ||||||||
| Shareholders’ equity (deficit) | ||||||||
| Common shares, CHF | ||||||||
| Treasury shares | ( | ) | ( | ) | ||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total shareholders’ equity (deficit) | ( | ) | ||||||
| Total liabilities and shareholders’ equity (deficit) | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited interim condensed financial statements.
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NLS PHARMACEUTICS LTD.
UNAUDITED INTERIM CONDENSED STATEMENTS OF OPERATING AND COMPREHENSIVE LOSS
| For the Six Months Ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| Operating expenses: | ||||||||
| Research and development | $ | $ | ||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Other income, net | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Interest on related party loans | - | ( | ) | |||||
| Net loss | ( | ) | ( | ) | ||||
| Other comprehensive loss: | ||||||||
| Defined pension plan adjustments | ( | ) | ||||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | ||
| $ | ( | ) | $ | ( | ) | |||
The accompanying notes are an integral part of these unaudited interim condensed financial statements.
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NLS PHARMACEUTICS LTD.
UNAUDITED INTERIM CONDENSED STATEMENTS OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021
| Common Shares | Treasury | Additional Paid in | Accumulated | Accumulated Other Comprehensive | ||||||||||||||||||||||||
| Shares | Amount | Shares | Capital | Deficit | Loss | Total | ||||||||||||||||||||||
| BALANCE, JANUARY 1, 2022 | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
| Issuance of common shares direct offering, net | ||||||||||||||||||||||||||||
| Issuance of warrants, net | - | - | - | |||||||||||||||||||||||||
| Issuance of pre-funded warrants, net | - | - | - | |||||||||||||||||||||||||
| Issuance of common shares in At-The-Market (ATM) financing | - | - | ||||||||||||||||||||||||||
| Issuance of treasury shares | ( | ) | ||||||||||||||||||||||||||
| Defined pension plan adjustments | - | - | - | - | - | |||||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||
| BALANCE, JUNE 30, 2022 | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||
| Common Shares | Treasury | Additional Paid in | Accumulated | Accumulated Other Comprehensive | ||||||||||||||||||||||||
| Shares | Amount | Shares | Capital | Deficit | Loss | Total | ||||||||||||||||||||||
| BALANCE, JANUARY 1, 2021 | $ | $ | - | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Issuance of common shares in initial public offering, net | ||||||||||||||||||||||||||||
| Issuance of warrants | - | - | ||||||||||||||||||||||||||
| Issuance of common shares to consultant | ||||||||||||||||||||||||||||
| Warrant exercises | ||||||||||||||||||||||||||||
| Defined pension plan adjustments | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||||||
| BALANCE, JUNE 30, 2021 | $ | $ | - | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||
The accompanying notes are an integral part of these unaudited interim condensed financial statements.
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NLS PHARMACEUTICS LTD.
UNAUDITED INTERIM CONDENSED STATEMENTS OF CASH FLOWS
| For the Six Months Ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in in operating activities: | ||||||||
| Amortization of debt discount | ||||||||
| Depreciation expense | ||||||||
| Provision for doubtful accounts | ||||||||
| Periodic pension costs | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Other receivables, net – related parties | ( | ) | ||||||
| Accounts payable | ( | ) | ||||||
| Interest payable | ( | ) | ||||||
| Other accrued liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Investing Activities: | ||||||||
| Purchases of property and equipment | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Financing Activities: | ||||||||
| Proceeds from the issuance of common shares in initial public offering, net | ||||||||
| Proceeds from the issuance of common shares in ATM financing | ||||||||
| Proceeds from the issuance of common shares in direct offering, net | ||||||||
| Proceeds from the issuance of pre-funded warrants, net | ||||||||
| Proceeds from the issuance of warrants, net | ||||||||
| Payments on notes payable | ( | ) | ||||||
| Exercise of warrants | ||||||||
| Proceeds from bridge loan | ||||||||
| Payment on Swiss government loan | ( | ) | ||||||
| Payment on second credit facility | ( | ) | ||||||
| Payment on convertible loans | ( | ) | ||||||
| Payment on convertible loans – related party | ( | ) | ||||||
| Payment on bridge loan | ( | ) | ||||||
| Payment of shareholder loans | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate on cash and cash equivalents | ( | ) | ||||||
| Change in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at the beginning of period | ||||||||
| Cash and cash equivalents at the end of period | $ | $ | ||||||
| Supplemental disclosure of non-cash and financing activities: | ||||||||
| Issuance of note payable for prepaid insurance | $ | $ | ||||||
| Deferred financing costs transferred to additional paid in capital | $ | $ | ||||||
| Issuance of common shares to consultant for payment of expenses | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited interim condensed financial statements.
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NLS PHARMACEUTICS LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
Note 1
Background:
NLS Pharmaceutics Ltd. (Nasdaq: NLSP, NLSPW) (the “Company”) is an emerging biopharmaceutical company engaged in the discovery and development of life-improving drug therapies to treat rare and complex central nervous system disorders, including narcolepsy, idiopathic hypersomnia and other rare sleep disorders, and of neurodevelopmental disorders, such as attention deficit hyperactivity disorder (“ADHD”). The Company’s lead product candidates are Quilience, to treat narcolepsy (type 1 and type 2), and Nolazol, to treat ADHD.
On February
2, 2021, the Company completed the closing of its initial public offering (the “Initial Public Offering”) of
Going Concern
As of June 30, 2022, the Company had an accumulated
deficit of approximately $
As of June 30, 2022, the Company’s cash and
cash equivalents were $
| ● | the length of the novel strain of coronavirus (“COVID-19”) pandemic and its impact on the Company’s planned clinical trials, operations and financial condition; | |
| ● | the progress and costs of the Company’s pre-clinical studies, clinical trials and other research and development activities; | |
| ● | the scope, prioritization and number of the Company’s clinical trials and other research and development programs; | |
| ● | any cost that the Company may incur under in- and out-licensing arrangements relating to its product candidate that it may enter into in the future; | |
| ● | the costs and timing of obtaining regulatory approval for the Company’s product candidates; | |
| ● | the costs of filing, prosecuting, enforcing and defending patent claims and other intellectual property rights; | |
| ● | the costs of, and timing for, strengthening the Company’s manufacturing agreements for production of sufficient clinical and commercial quantities of its product candidates; | |
| ● | the potential costs of contracting with third parties to provide marketing and distribution services for the Company or for building such capacities internally; and | |
| ● | the costs of acquiring or undertaking the development and commercialization efforts for additional therapeutic applications of the Company’s product candidates and the magnitude of the Company’s general and administrative expenses. |
As a result, the Company will require additional capital to finance expenditures related to the manufacture of the Company’s product candidates for use in clinical trials, conducting clinical trials and general and administration expenses.
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NLS PHARMACEUTICS LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
The Company has put in place multiple options to raise
the funds necessary to support its operations, including access to $
Accordingly, the accompanying unaudited interim
condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States of
America (“U.S. GAAP”), which contemplate continuation of the Company as a going concern for a period within
Note 2
Summary of Significant Accounting Policies:
Basis of Preparation
The unaudited interim condensed financial statements have been prepared in accordance with U.S. GAAP for interim financial information and accordingly do not include all information and disclosures as required by U.S. GAAP for complete financial statements. The year-end unaudited interim condensed balance sheet was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. These unaudited interim condensed financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 20-F for the year ended December 31, 2021 and any public announcements made by the Company during the interim reporting period.
In the opinion of management, these unaudited interim condensed financial statements reflect all adjustments necessary, which are of a normal recurring nature, to fairly state the balance sheets, statements of operating and comprehensive loss, changes in equity and cash flows for the interim reporting periods presented.
Use of Estimates
The preparation of the unaudited interim condensed financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the interim reporting periods. Actual results could differ from those estimates and be based on events different from those assumptions. As part of these financial statements, the more significant estimates include the valuation allowance related to the Company’s deferred tax assets.
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NLS PHARMACEUTICS LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
Property and equipment
Property and equipment are recorded at cost, net
of accumulated depreciation and any accumulated impairment losses. Depreciation is computed using the straight-line method over the estimated
useful lives of the assets. The useful lives of property and equipment are
Upon retirement or sale, the cost of disposed assets and their related accumulated depreciation are removed from the balance sheet. Any resulting net gains or losses on dispositions of property and equipment are included as a component of operating expenses within the Company’s statements of operating and comprehensive loss. Repair and maintenance costs that do not significantly add value to the property and equipment, or prolong its life, are charged to operating expense as incurred.
Earnings per Share
Basic loss per common share is computed by dividing
the net loss applicable to common shareholders by the weighted-average number of common shares outstanding during the periods presented.
Diluted loss per common share is computed similar to basic loss per share, except that the denominator is increased to include the number
of additional potential common shares that would have been outstanding if the potential common shares had been issued and if the additional
common shares were dilutive. Potential common shares are excluded from the computation for a period in which a net loss is reported or
if their effect is anti-dilutive. The Company’s potential common shares consist of warrants with their potential dilutive effect
considered using the treasury method. For the six months ended June 30, 2022,
Segment Reporting
The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company’s singular focus is on developing therapeutics for the treatment of neurobehavioral and neurocognitive disorders. All of the Company’s tangible assets are held outside the United States of America.
Note 3
Prepaid Expenses and Other Current Assets:
The Company’s prepaid expenses and other current assets consisted of the following as of June 30, 2022 and December 31, 2021:
| June 30, 2022 | December 31, 2021 | |||||||
| Vendor prepayments | $ | $ | ||||||
| VAT recoverable and other current assets | ||||||||
| Prepaid insurance | ||||||||
| Prepaid expenses | ||||||||
| Total prepaid expenses and other current assets | $ | $ | ||||||
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NLS PHARMACEUTICS LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
Note 4
Property and Equipment, net:
The following table shows the property and equipment as of June 30, 2022 and December 31, 2021:
| June 30, 2022 | December 31, 2021 | |||||||
| Cost | ||||||||
| Furniture and fixtures | $ | $ | ||||||
| Software | ||||||||
| Total cost | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Total property and equipment, net | $ | $ | ||||||
Deprecation and related amortization expense was
$
Note 5
Note Payable
In January 2022, the Company entered into a note
payable of $
Note 6
Other Accrued Liabilities:
Other accrued liabilities consisted of the following as of June 30, 2022 and December 31, 2021:
| June 30, 2022 | December 31, 2021 | |||||||
| Professional consultants’ expenses | $ | $ | ||||||
| Vendor liabilities | ||||||||
| Related party expenses | ||||||||
| Accrued board fees | ||||||||
| Accrued commitment fee | ||||||||
| Other accrued expenses | ||||||||
| Total other accrued liabilities | $ | $ | ||||||
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NLS PHARMACEUTICS LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
Note 7
Deferred Revenues:
In February 2019, the Company entered into a license agreement (the “EF License Agreement”), to develop and commercialize its product candidate, Nolazol, in Latin American countries with Eurofarma, a Brazilian pharmaceutical company. The EF License Agreement covers the grant of non-transferable licenses, without the right to sublicense, to Eurofarma to develop and commercialize Nolazol in Latin America. The EF License Agreement also specifies the Company’s obligation to advance ongoing development activities with respect to Nolazol in the United States. A joint steering committee will oversee the development and regulatory activities directed towards marketing approval, manufacturing and commercialization phases. The Company believes its participation in the joint steering committee is not of material significance to the licenses in the context of the EF License Agreement on the whole and, as such, management has excluded these activities in the determination of its performance obligation(s) under the EF License Agreement.
The EF License Agreement provides that the parties shall enter into a separate manufacturing and supply agreement during the term of the EF License Agreement.
Under the EF License Agreement, the Company received
a non-refundable, upfront payment of $
The Company identified the licenses granted to Eurofarma and its obligation to advance development activities with respect to Nolazol in the United States as the material promises under the EF License Agreement. For purposes of identifying the Company’s performance obligations under the EF License Agreement, management believes that while the exclusive licenses were granted to Eurofarma at the outset of the EF License Agreement, the grant of those licenses does not singularly result in the transfer of the Company’s broader obligation to Eurofarma under the EF License Agreement.
The Company is obligated under the EF License Agreement to advance its development activities in the United States and those activities precede Eurofarma’s necessary regulatory approvals for commercialization of Nolazol, in Latin American countries. The Company intends to apply its proprietary know-how to the ongoing development activities in the United States involving its intellectual property relating to Nolazol. These development activities are specific to the Company and the Company believes they are not capable of being distinct in the context of the EF License Agreement on the whole.
The licenses provided to Eurofarma are not transferable and without the right to sublicense therefore Eurofarma is not presently able to monetize its investment in Nolazol as clinical development in the United States or any Latin American countries has yet to be completed and Eurofarma has yet to seek or obtain regulatory approval in any Latin American country. The licenses to Eurofarma represent rights to use the Company’s intellectual property with respect to Nolazol for which revenue is recognized at a point in time which is when Eurofarma is able to use and benefit from the licenses. The licenses are considered of limited value without the Company’s development activities with respect to Nolazol in the United States. As such, the licenses are not capable of being distinct until after successful clinical development and regulatory approval and alone do not have standalone functionality to Eurofarma. Management has determined that the licenses, while capable of being distinct, are not distinct as they do not have stand-alone value to Eurofarma without the Company’s planned development activities in the United States and the approval for sale in Latin America.
Bundled together with the Company’s development activities of Nolazol in the United States, the licenses granted under the EF License Agreement will enable Eurofarma to seek regulatory approvals and ultimately seek to commercialize Nolazol in Latin America. Therefore, management believes the licenses bundled together with the Company’s development activities in the United States constitute a single distinct performance obligation under the EF License Agreement for accounting purposes, or (the “License Performance Obligation”).
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NLS PHARMACEUTICS LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
The Company has initially estimated a total transaction
price of $
The Company has allocated the transaction price
entirely to the single License Performance Obligation and recorded the $
Amounts expected to be recognized as revenue within
the 12 months following the balance sheet date are classified as a current portion of deferred revenue in the accompanying condensed balance
sheets. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred
revenue, net of current portion. As of June 30, 2022 and December 31, 2021, the Company has long-term deferred revenues of $
Note 8
Commitments and Contingencies:
Commitments
On March 10, 2021, the Company entered into a
License Agreement (the “Agreement”) with Novartis Pharma AG (“Novartis”), whereby the Company obtained, on an
exclusive basis in the U.S., all of the available data referred to and included in the original
new drug application (“NDA”) for Sanorex® (mazindol) submitted to the U.S. Food and Drug Administration (“FDA”)
in February 1972. The agreement encompasses all preclinical and clinical studies, data used for manufacturing including stability and
other chemistry manufacturing and controls data, formulation data and know-how for all products containing mazindol as an active substance,
and all post-marketing clinical studies and periodic safety reports from 1973 onwards. Under the Agreement, the Company has obtained the
same rights on a non-exclusive basis in all territories outside of the U.S. except for Japan, with the right to cross-reference the Sanorex
NDA with non-U.S. regulatory agencies in the licensed territories. The Agreement includes the right to sublicense or assign the license
to third parties, subject to such third parties meeting certain obligations. As consideration for the license, the Company paid Novartis
$
Litigation
The Company may become involved in miscellaneous litigation and legal actions, including product liability, consumer, commercial, tax and governmental matters, which can arise from time to time in the ordinary course of the Company’s business. Litigation and legal actions are inherently unpredictable, and excessive verdicts can result in such situations. The Company is not currently involved in any such matters.
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NLS PHARMACEUTICS LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
COVID-19
The Company has implemented a comprehensive response strategy designed to manage the ongoing impact of the COVID-19 pandemic on its employees, patients and its business. The prolonged nature of the pandemic is negatively impacting the Company’s business in a varied manner due to the emergence of the Delta and Omicron variants and other variants with increased transmissibility, even in some cases in vaccinated people, limited access to health care provider offices and institutions and the willingness of patients or parents of patients to seek treatment. The Company expects that its business, financial condition, results of operations and growth prospects may continue to be negatively impacted by the pandemic on a limited basis that may vary depending on the context. However, the Company has begun to observe, and expects to continue to observe, a gradual normalization in patient and healthcare provider practices, as providers and patients have adapted their behaviors and procedures to the evolving circumstances and as COVID-19 vaccines continue to be administered. The extent of the impact on the Company’s clinical development and regulatory efforts, its corporate development objectives and the value of market for its common shares will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time. Such developments include continued spread of the Delta and Omicron variants in the U.S., Switzerland and other countries and the potential emergence of other SARS-CoV-2 variants that may prove especially contagious or virulent, the ultimate duration and severity of the pandemic, governmental “stay-at-home” orders and travel restrictions, quarantines, social distancing and business closure requirements in the U.S., Switzerland and other countries, and the effectiveness of vaccination programs and other actions taken globally to contain and treat the disease.
Note 9
Share Capital and Public Offerings:
Common Shares:
As of June 30, 2022, the Company had
On April 25, 2022, the Company closed a registered direct offering with health-care focused institutional investors alongside participation from the Company’s Chairman of the Board of Directors, Ronald Hafner, for the purchase and sale of (i) 3,015,384 common shares, at a purchase price of $1.04 per share, and (ii) pre-funded warrants to purchase up to 1,184,616 common shares (the “Pre-Funded Warrants”) at a purchase price of $1.04 minus CHF 0.02 per Pre-Funded Warrant. The Chairman of our Board of Directors, Ronald Hafner, purchased 95,984 of the 3,015,384 common shares in the offering.
In a concurrent private placement, the Company
issued the investors, who also participated in the registered direct offering, warrants to purchase up to
The Company also entered
into an agreement (the “Placement Agent Agreement”) with A.G.P./Alliance Global Partners, as sole placement agent (the “Placement
Agent”) dated April 13, 2022, pursuant to which the Placement Agent agreed to serve as the Company’s placement agent in connection
with the registered direct offering and concurrent private placement. The Company agreed to pay the Placement Agent (except with respect
to the securities to be purchased by Mr. Hafner) a cash placement fee equal to
On March 5, 2022, the
Company, entered into an ATM Sales Agreement (the “Sales Agreement”) with Virtu, as sales agent. Pursuant to the terms of
the Sales Agreement, the Company may issue and sell from time to time its common shares, par value CHF
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NLS PHARMACEUTICS LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
Under the Sales Agreement, common shares will be offered and sold pursuant to the Company’s shelf registration statement on Form F-3 (File No. 333-262489), declared effective by the Securities and Exchange Commission on February 11, 2022. In addition, under the Sales Agreement, sales of common shares may be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended.
The Company will pay
Virtu a commission rate of up to
The Company has no obligation to sell any of the common shares under the Sales Agreement and may at any time suspend the offering of its common shares upon notice and subject to other conditions.
Warrants:
On April 25, 2022, in a concurrent private placement,
the Company issued investors, who also participated in the registered direct offering, warrants to purchase up to
The following table summarizes the common share warrant activity for the six months ended June 30, 2022:
| Balance on January 1, 2022 | ||||
| Issuances | ||||
| Exercises | ||||
| Balance on June 30, 2022 |
Treasury Shares:
In the second half of
2021, the Company created treasury shares from its authorized capital in order to use them for the SEDA, as discussed above. On June 30,
2022 and December 31, 2021, the Company held
Option Plan
On December 14, 2021, the board of directors (the
“Board”) adopted the Share Option Plan Regulation 2021 (the “Option Plan”). The purpose of the Option Plan is
to retain, attract and motivate management, employees, directors and consultants by providing them with options to purchase our common
shares. The Board allocated fifteen percent (
Note 10
Related party consulting agreements:
In October 2019, the Company entered into a collaboration
agreement with Adya Consulting, a company founded and managed by the Company’s current Chief Operating Officer, Silvia Panigone.
Pursuant to the collaboration agreement, the Company agreed to pay Adya Consulting a one-time fee of CHF
12
NLS PHARMACEUTICS LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
In January 2017, and as subsequently amended in
October 2020, the Company entered into a consulting agreement with CHG BioVenture SA, an entity controlled by Mr. Hervé Girsault,
the Company’s current Head of Business Development. Pursuant to the consulting agreement, the Company agreed to pay CHG BioVenture
SA a monthly fee of CHF
The Company has entered into a new consulting
agreement starting May 1, 2021 for the continuation of Mr. Girsault’s engagement with the Company in his current role. Pursuant
to the new agreement,
In March 2021, the Company entered into a consulting
agreement with Mr. Subhasis Roy, the Company’s then Interim Chief Financial Officer, pursuant to which the Company agreed to pay
Mr. Roy a daily rate of CHF
In February 2021, the Company entered into a consulting
agreement with Mr. Eric Konofal, the Company’s current Chief Scientific Officer, pursuant to which the Company agreed to pay Mr.
Konofal a daily rate of CHF
In March 2021, the Company entered into a consulting
agreement with Mr. Carlos Camozzi, the Company’s current Interim Medical Director, pursuant to which the Company agreed to pay Mr.
Camozzi an hourly rate of CHF
In June 2022, the Company entered into a consulting
agreement with Mr. Chad Hellmann, the Company’s current Chief Financial Officer, pursuant to which the Company agreed to pay Mr.
Hellmann an annual salary of $
13
NLS PHARMACEUTICS LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
Note 11
Subsequent Events:
On July 21, 2022,
On August 19, 2022, the Company issued unsecured
short-term notes in the amount of $
On September 29, 2022, the Company received a letter from Nasdaq stating that the Company had failed to regain compliance with the minimum stockholders’ equity requirement for continued listing on the Nasdaq Capital Market, as required by Nasdaq Listing Rule 5550(b)(1), within the extension period granted by Nasdaq and, accordingly, the Nasdaq staff had initiated procedures to delist the Company’s common shares and warrants from Nasdaq. The Company intends to request a hearing to appeal the Nasdaq staff’s delisting determination.
On September 8, 2022, the Company announced the hiring of George Apostle as the Company’s new Chief Medical Officer while simultaneously announcing that Ms. Panigone resigned as the Company’s Chief Operating Officer. Chad Hellmann, the Company’s Chief Financial Officer will assume all non-clinical duties.
Effective as of September 30, 2022, the Company, entered into a securities purchase agreement, or the Purchase Agreement, providing for the issuance in a private placement offering of (i) 5,194,802 common shares at a purchase price of $0.77 per share, and (ii) warrants, or Common Warrants, to purchase up to an aggregate of 2,597,401 common shares at an exercise of $0.70 per share. The Common Warrants will be exercisable immediately and will have a term of 5 years. The offering closed on October 7, 2022. The Company’s Chairman of the Board of Director, Ronald Hafner, purchased 324,675 common shares in the offering and the Company’s recently appointed Chief Medical Officer, George Apostol, purchased 1,298,701 common shares in the offering.
Pursuant to the Purchase Agreement, the Company has agreed not to enter into any agreement to issue or announce the issuance or proposed issuance of any common shares or common share equivalents for a period of 30 days following the closing of the offering, subject to certain exceptions.
The offering resulted in gross proceeds to the Company of $
The Company engaged
Laidlaw & Company (UK) Ltd. as sole placement agent pursuant to which the placement agent agreed to serve as the placement agent
for the Company in connection with the above-described offering. The Company agreed to pay the placement agent a cash placement fee equal
to
At the closing of the offering, the Company’s existing short-term notes, with an aggregate principal balance of $1.53 million plus all accrued interest, that were issued in August 2022, converted into 2,516,429 common shares and the holders received warrants to purchase up to 1,258,215 common shares with an exercise price of $0.70, that are exercisable six months after their issuance and will expire five years following the date that the warrants are initially exercisable, and are otherwise substantially similar to the form of the Common Warrants.
14