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Description of Business and Basis of Presentation
3 Months Ended
Mar. 31, 2019
Accounting Policies [Abstract]  
Description of Business and Basis of Presentation
1. Description of Business and Basis of Presentation
Description of Business
Mateon Therapeutics, Inc. (“
Mateon
” or the “
Company
”) is a clinical-stage biopharmaceutical company developing investigational drugs for the treatment of orphan oncology indications.
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The financial statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, however, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods ended March 31, 2019 and 2018 have been made. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2019.
The balance sheet at December 31, 2018 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. For further information, refer to the financial statements and footnotes thereto included in the Annual Report on Form 10-K for the Company for the year ended December 31, 2018.
Liquidity and Going Concern
The Company has experienced net losses every year since inception and as of March 31, 2019 had an accumulated deficit of over $295 million. As of March 31, 2019, the Company had $0.2 million in cash and current liabilities of $1.2 million. The Company does not expect to generate revenue from product sales in the near future and expects to incur significant additional operating losses over the next several years, primarily as a result of the Company’s plans to continue clinical trials for its investigational drugs. The Company’s history of recurring losses and uncertainties as to whether the Company’s operations will become profitable raise substantial doubt about its ability to continue as a going concern, since the Company’s capital resources are not sufficient to sustain operations for the next twelve months. The condensed financial statements contained in this report do not include any adjustments related to the recoverability of assets or classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.
The principal source of the Company’s working capital to date has been the sale of equity securities. The Company will need to raise additional capital in order to fund its operations and continue development of product candidates OT-101, OXi4503 and/or CA4P. In April 2019, after the period covered by this report, the Company raised $540,000 through the sale of convertible debentures. The terms of the convertible debentures contemplate the availability to the Company of an additional $540,000 after May 23, 2019. See Note 5 “Subsequent Events”. The Company anticipates raising substantial additional capital through the sale of equity securities, but no other financing arrangements are in place at this time.
If the Company is unable to access additional funds when needed, it may not be able to continue the development of its investigational drugs and the Company could be required to delay, scale back or eliminate some or all of its development programs and operations. Any additional equity financing, if available, would be dilutive to the current stockholders and may not be available on favorable terms. Additional debt financing, if available, may involve restrictive covenants and could also be dilutive. The Company’s ability to access capital is not assured and, if access is not achieved on a timely basis, would materially harm the Company’s financial condition, the value of its common stock and its business prospects.