Exhibit 99.1
NLS PHARMACEUTICS LTD.
UNAUDITED
INTERIM CONDENSED FINANCIAL STATEMENTS AS OF
JUNE 30, 2023 AND DECEMBER 31, 2022
AND FOR THE SIX MONTH PERIODS ENDED JUNE 30, 2023 AND 2022
NLS PHARMACEUTICS LTD.
UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
i
NLS PHARMACEUTICS LTD.
UNAUDITED INTERIM CONDENSED BALANCE SHEETS
June 30, 2023 |
December 31, 2022 |
|||||||
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: | ||||||||
Accounts payable, including related party of $ |
$ | |
$ | |||||
Other accrued liabilities, including related party of $ |
||||||||
Total current liabilities | ||||||||
Deferred revenues (Note 6) | ||||||||
Accrued pension liability | ||||||||
Total liabilities | ||||||||
Commitments and contingencies (Note 7) | ||||||||
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, | ||||||||
2023 | 2022 | |||||||
Operating expenses: | ||||||||
Research and development | $ | $ | ||||||
General and administrative | | |||||||
Total operating expenses | | |||||||
Operating loss | ( | ( | ) | |||||
Other income (expense), net | ( | ) | ||||||
Interest expense | ( | ) | ( | ) | ||||
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, 2023 AND 2022
Common Shares | Treasury | Additional Paid in | Accumulated | Accumulated Other Comprehensive | ||||||||||||||||||||||||
Shares | Amount | Shares | Capital | Deficit | Loss | Total | ||||||||||||||||||||||
BALANCE, JANUARY 1, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
Issuance of treasury shares | ( | ) | ||||||||||||||||||||||||||
Stock-based compensation | - | |||||||||||||||||||||||||||
Defined pension plan adjustments | - | ( | ) | ( | ) | |||||||||||||||||||||||
Net loss | - | ( | ) | ( | ) | |||||||||||||||||||||||
BALANCE, JUNE 30, 2023 | $ | $ | ( | ) | $ | $ | ( | ) | ( | ) | ( | ) |
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 registered 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 | $ | $ | ( | ) | $ | $ | ( | ) | ( | ) | $ | ( | ) |
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, | ||||||||
2023 | 2022 | |||||||
Operating Activities: | ||||||||
Net loss | $ | ( | ) | $ | ( | ) | ||
Adjustments to reconcile net loss to net cash used in in operating activities: | ||||||||
Depreciation expense | ||||||||
Stock-based compensation expense | ||||||||
Periodic pension costs | ( | ) | ( | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses and other current assets | ( | ) | ||||||
Accounts payable | ||||||||
Other accrued liabilities | ( | ) | ( | ) | ||||
Net cash used in operating activities | ( | ) | ( | ) | ||||
Financing Activities: | ||||||||
Proceeds from the issuance of common shares in ATM financing | ||||||||
Proceeds from the issuance of common shares in registered direct offering, net | ||||||||
Proceeds from the issuance of pre-funded warrants, net | ||||||||
Proceeds from the issuance of warrants, net | ||||||||
Payments on notes payable | ( | ) | ||||||
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 | $ | $ |
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, 2023, the Company had an accumulated
deficit of approximately $
As of June 30, 2023, the Company’s cash
and cash equivalents were $
In response to the ever-evolving biotech and pharmaceutical landscape, NLS has initiated exploration of new strategic opportunities. As part of this process, the Company plans to consider a range of options, including strategic partnerships, out-licensing assets of the Company, and other future strategic actions.
Additionally, the Company’s operating plans may change as a result of many factors that may currently be unknown to the Company including:
● | 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; |
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NLS PHARMACEUTICS LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
● | 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 administrative expenses. There can be no assurance that funds will be available, or if they are available, that their availability will be on terms acceptable to the Company or in an amount sufficient to enable the Company to fully complete its development activities or sustain operations. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to further extend payables and indebtedness, reduce overhead, or scale back its current business plan until sufficient additional capital is raised to support further operations or force the Company to grant rights to develop and commercialize product candidates that it would otherwise prefer to develop and commercialize on its own.
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, 2022, 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.
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
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NLS PHARMACEUTICS LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
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.
Stock-Based Compensation
The Company measures all stock-based awards granted based on the fair value on the date of the grant and recognizes compensation expense with respect to those awards over the requisite service period, which is generally the vesting period of the respective award. Generally, the Company issues awards with only service-based vesting conditions and records the expense for these awards using the straight-line method. The Company recognizes forfeitures related to stock-based compensation awards as they occur and reverses any previously recognized compensation cost associated with forfeited awards in the period the forfeiture occurs.
The Company classifies stock-based compensation expense in the accompanying consolidated statements of operating and comprehensive loss in the same manner in which the award recipients’ payroll costs are classified or in which the award recipients’ service payments are classified.
The fair value of each stock option is estimated on the date of grant using the Black-Scholes option-pricing model (“Black-Scholes”). Black-Scholes requires a number of assumptions, of which the most significant are share price, expected volatility, expected option term (the time from the grant date until the options are exercised or expire), risk-free rate and expected dividend rate. The grant date fair value of a common share is determined by the board of directors (the “Board of Directors”) considering, among other factors, the assistance of a valuation specialist and management. The grant date fair value of a common share is determined using the valuation methodologies, which utilize certain assumptions, including probability weighting of events, volatility, time to liquidation, risk-free interest rate and discount for lack of marketability.
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, 2023,
Treasury Shares
Treasury shares are purchased at cost and recognized as a deduction from equity. Income or loss from subsequent sales is presented in equity.
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.
Recently Issued Accounting Standards Not Yet Effective
The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
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NLS PHARMACEUTICS LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
Note 3
Prepaid Expenses and Other Current Assets:
June 30, 2023 | December 31, 2022 | |||||||
Vendor prepayments | $ | $ | ||||||
VAT recoverable and other current assets | ||||||||
Prepaid insurance | ||||||||
Prepaid expenses | ||||||||
Total prepaid expenses and other current assets | $ | $ |
Note 4
Property and Equipment, net:
June 30, 2023 | December 31, 2022 | |||||||
Cost | ||||||||
Furniture and fixtures | $ | $ | ||||||
Software | ||||||||
Total cost | ||||||||
Accumulated depreciation | ( | ) | ( | ) | ||||
Total property and equipment, net | $ | $ |
Deprecation and related amortization expense was
$
Note 5
Other Accrued Liabilities:
June 30, 2023 | December 31, 2022 | |||||||
Professional consultants’ expenses | $ | $ | ||||||
Vendor liabilities | ||||||||
Expenses | ||||||||
Accrued board fees | ||||||||
Accrued bonus | ||||||||
Other accrued expenses | ||||||||
Total other accrued liabilities | $ | $ |
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NLS PHARMACEUTICS LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
Note 6
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 Laboratorios S.A. (“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 (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, 2023 and December 31, 2022, the Company has long-term
deferred revenues of $
Note 7
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.
Note 8
Share Capital and Public Offerings:
Common Shares:
As of June 30, 2023, the Company had
10
NLS PHARMACEUTICS LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
On December 13, 2022,
the Company closed a private placement offering with funds affiliated with BVF Partners L.P. (“ BVF”), providing for the issuance
of (i)
The Company engaged Laidlaw
& Company (UK) Ltd. (“Laidlaw”) to serve as the placement agent for the Company in connection with the above-described
offering. The Company agreed to pay Laidlaw a cash placement fee of $
In addition, the Company
and BVF agreed that until the 30th day following receipt of the official written minutes from the end of the Phase 2 meeting
to be held by the Company with the FDA (the “Election Deadline”), among other closing conditions, BVF shall have the right
to purchase at a second closing up to $
On October 7, 2022, the
Company closed on a securities purchase agreement for the issuance in a private placement offering of (i)
The Company engaged Laidlaw
to serve as the placement agent for the Company in connection with the above-described offering. The Company paid Laidlaw a cash placement
fee of $
At the closing of the
October 2022 offering, the Company’s existing convertible short-term notes, with an aggregate principal balance of $
On April 25, 2022, the
Company closed a registered direct offering with healthcare focused institutional investors alongside participation from Mr. Hafner, for
the purchase and sale of (i)
In a concurrent
private placement, the Company issued the investors, who also participated in the registered direct offering, warrants to purchase up
to
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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, 2023. 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.
On
March 5, 2022, the Company entered into a sales agreement (the “Sales Agreement”) with Virtu Americas LLC (“Virtu”),
as sales agent, initially with $
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 December 13, 2022,
concurrent with the offering with BVF, the Company issued Laidlaw warrants to purchase up to
On October 7, 2022, in
a concurrent private placement, the Company issued investors who participated in the offering warrants to purchase up to an aggregate
of
On August 19, 2022, concurrent
with the issuance of short-term convertible notes payable, the Company issued the noteholders warrants to purchase up to an aggregate
of
On April 25, 2022, in
a concurrent private placement, the Company issued investors, who also participated in the April 2022 registered direct offering, warrants
to purchase up to
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NLS PHARMACEUTICS LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
Balance at January 1, 2023 | ||||
Issuances | ||||
Exercises | ||||
Balance at June 30, 2023 |
The intrinsic value of
exercisable but unexercised in-the-money common share warrants at June 30, 2023 was $
Treasury Shares:
In the first half of
2023, through a capital increase of CHF
Option Plan
On December 14, 2021, the Board of Directors 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 of Directors
allocated fifteen percent (
The exercise prices, vesting and other restrictions
of the awards to be granted under the Option Plan are determined by the Board of Directors, except that no stock option may be issued
with an exercise price less than the fair market value of the common shares at the date of the grant or have a term in excess of
Number of Options | Weighted Average Exercise Price | |||||||
Balance at December 31, 2022 | ||||||||
Granted | ||||||||
Exercised | ||||||||
Expired/cancelled | ( | ) | ||||||
Balance at June 30, 2023 | $ | |||||||
Options vested and exercisable | ||||||||
Options expected to vest |
The weighted average
remaining contractual life of each of the options outstanding, options vested and exercisable and options expected to vest at June 30,
2023 was
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NLS PHARMACEUTICS LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
Non-Vested Options | Weighted Average Grant date Fair Value | |||||||
Balance at December 31, 2021 | ||||||||
Granted | ||||||||
Vested | ( | ) | $ | |||||
Forfeited | ||||||||
Balance at December 31, 2022 | $ |
The aggregate intrinsic
value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s
common shares for those stock options that had exercise prices lower than the fair value of the Company’s common shares. The share
price as of June 30, 2023, was $
Stock-based
compensation expense for the six months ended June 30, 2023, was $
Note 9
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 then Chief Operating Officer, Silvia Panigone. Pursuant to
the collaboration agreement, the Company agreed to pay Adya Consulting a one-time fee of CHF
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 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,
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NLS PHARMACEUTICS LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
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 then 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 then Chief Financial Officer, pursuant to which the Company agreed to pay Mr. Hellmann
an annual salary of $
In December 2022, the Company entered into a consulting
agreement with Ms. Marianne Lambertson, the Company’s current Head of Corporate Communications & Investor Relations, pursuant
to which the Company agreed to pay Ms. Lambertson a monthly retainer of $
In December 2022, the Company entered into a consulting
agreement with Ms. Astrid Sommer, the Company’s Head of Human Resources, pursuant to which the Company agreed to pay Ms. Sommer
a fixed monthly retainer of $
In December 2022, the Company entered into a consulting
agreement with Mr. Thomas Curatolo, the Company’s current Head of U.S. Commercialization, pursuant to which the Company agreed to
pay Mr. Curatolo a monthly retainer of $
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NLS PHARMACEUTICS LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
Note 10
Subsequent Events:
Management has evaluated subsequent events that have occurred through December 6, 2023, the date these financial statements were issued.
On October 25, 2023,
the Company announced that it had received a written notice from Nasdaq Stock Market LLC indicating that the Company was not in compliance
with the minimum bid price requirement for continued listing set forth in Listing Rule 5550(a)(2), which requires listed companies to
maintain a minimum bid price of $
On November 10, 2023, the Company, received a letter (the “Letter”), from its independent auditor, PricewaterhouseCoopers AG (the “Auditor”). The Letter, which was issued pursuant to Art. 725 and Art. 725b par. 1 of the Swiss Code of Obligations, requested that the Company provide a balance sheet at going concern and liquidation values as of October 31, 2023, to assess whether the Company’s equity showed an excess of liabilities over assets, with such balance sheet required to be provided no later than November 20, 2023. The Auditor advised it was issuing the Letter, in part, due to the fact that it has been advised that the Company would not have sufficient cash to fund its operations through December 31, 2023.
On November 15, 2023,
the Company entered into a series of short-term loan agreements with certain existing shareholders of the Company, including Ronald Hafner,
the Company’s Chairman of the Board of Directors, Felix Grisard, Jürgen Bauer and Maria Nayvalt, providing for unsecured loans
to the Company in the aggregate amount of CHF
On November 15, 2023, the Company reported that
had selected a strategic partner and executed a non-binding term sheet for the out-licensing of its intellectual property, including its
key asset Mazindol. The financial terms of the term sheet have not yet been finalized. Additionally, the Company has reported that it
has implemented a workforce reduction of approximately
On December 1, 2023, the Company announced that
it had entered into an exclusive worldwide option agreement with Aexon Labs, Inc., a privately held U.S. company (“Aexon Labs”),
under which it may acquire global development and commercialization rights to Aexon Labs’ Dual Orexin Receptor Agonists platform,
new molecular entities, highly selective dual oral orexin-1 and orexin-2 receptor agonists (OX1R and OX2R) with potential applications
in the treatment of narcolepsy and idiopathic hypersomnia, as well as neuro-degenerative disorders such as Parkinson’s and Alzheimer’s
disease. The transaction will be structured as an exclusive worldwide license for the development and commercialization by the Company
of the Aexon Labs’ compounds and their derivatives. The Company must exercise its option by no later than March 31, 2024. It will
pay Aexon Labs an upfront payment of $
16