azrx_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

☐ TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934

From the transition period from to

Commission File Number 001-37853

AZURRX BIOPHARMA, INC.

(Exact name of small business issuer as specified in its charter)

Delaware

46-4993860

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification No.)

777 Yamato Road, Suite 502

Boca Raton, Florida 33431

(Address of principal executive offices)

(561) 589-7020

(Issuer’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol		Name of Each Exchange on Which Registered
Common stock, par value $0.0001 per share		AZRX		Nasdaq Capital Market

Securities registered under Section 12(g) of the Exchange Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Sec.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 93,261,897 shares of the registrant’s common stock, par value $0.0001 per share (the “Common Stock”), outstanding as of August 13, 2021.

TABLE OF CONTENTS

		Page

PART I. FINANCIAL INFORMATION

Item 1.	Unaudited Consolidated Financial Statements	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42

Item 4.	Controls and Procedures	42

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	43

Item 1A.	Risk Factors	43

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43

Item 3.	Defaults Upon Senior Securities	43

Item 4.	Mine Safety Disclosures	43

Item 5.	Other Information	43

Item 6.	Exhibits	44

-i-

Table of Contents

PART I

FINANCIAL INFORMATION

ITEM 1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

In our opinion, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly our financial position, results of operations, and cash flows for the interim periods presented. We have consolidated such financial statements in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Therefore, such financial statements do not include all disclosures required by accounting principles generally accepted in the United States of America. In preparing these unaudited consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the unaudited consolidated financial statements were issued by filing with the SEC.

These financial statements should be read in conjunction with our audited financial statements for the year ended December 31, 2020 included in our Annual Report filed on Form 10-K, filed with the SEC on March 31, 2021.

The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2021.

Table of Contents

AZURRX BIOPHARMA, INC.

Consolidated Balance Sheets (unaudited)

	June 30,			December 31,
	2021			2020
ASSETS

Current Assets:
Cash and cash equivalents	$	8,074,491		$	6,062,141
Other receivables		-			551,489
Prepaid expenses		540,786			1,256,154
Total Current Assets		8,615,277			7,869,784

Property, equipment, and leasehold improvements, net		89,243			18,329

Other Assets:
Patents, net		2,615,762			2,879,536
Goodwill		1,991,287			2,054,048
Operating lease right-of-use assets		395,634			74,238
Deposits		69,596			27,920
Total Other Assets		5,072,279			5,035,742
Total Assets	$	13,776,799		$	12,923,855

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:
Accounts payable and accrued expenses	$	4,643,885		$	1,685,603
Payable related to license agreement		1,250,000			13,250,000
Accrued dividend payable		231,043			-
Note payable		139,569			552,405
Other current liabilities		189,625			57,417
Total Current Liabilities		6,454,122			15,545,425

Other liabilities		285,753			19,123
Total Liabilities		6,739,875			15,564,548

Stockholders’ Equity:
Common stock - Par value $0.0001 per share; 250,000,000 shares authorized; 82,585,075 and 31,150,309 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively.		8,260			3,115
Series B preferred stock- Par value $0.0001 per share; 5,194.81 shares authorized; 676.05 and 2,773.6 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively.		-			-
Series C preferred stock- Par value $0.0001 per share; 57,000 shares authorized; 0 shares issued and outstanding at June 30, 2021 and December 31, 2020.		-			-
Additional paid-in capital		120,584,938			93,834,936
Accumulated deficit		(112,330,771	)		(95,366,198	)
Accumulated other comprehensive loss		(1,225,503	)		(1,112,546	)
Total Stockholders’ Equity		7,036,924			(2,640,693	)
Total Liabilities and Stockholders’ Equity	$	13,776,799		$	12,923,855

See accompanying notes to consolidated financial statements

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AZURRX BIOPHARMA, INC.

Consolidated Statements of Operations and Comprehensive Loss (unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Operating expenses:
Research and development expenses	$	5,647,798		$	1,089,177		$	8,163,825		$	2,642,537
General and administrative expenses		3,629,090			1,304,527			9,326,604			2,679,618

Loss from operations		(9,276,888	)		(2,393,704	)		(17,490,429	)		(5,322,155	)

Other income (expenses):
Interest expense		(2,954	)		(2,302,174	)		(8,098	)		(4,635,013	)
Other income		898			-			1,601			-
Change in fair value of liability					-			532,353			-
Total other income (expenses)		(2,056	)		(2,302,174	)		525,856			(4,635,013	)

Net loss	$	(9,278,944	)	$	(4,695,878	)	$	(16,964,573	)	$	(9,957,168	)

Other comprehensive loss:
Foreign currency translation adjustment		21,840			(163,719	)		(112,957	)		(6,225	)
Total comprehensive loss	$	(9,257,104	)	$	(4,859,597	)	$	(17,077,530	)	$	(9,963,393	)

Net loss	$	(9,278,944	)	$	(4,695,878	)	$	(16,964,573	)	$	(9,957,168	)
Deemed dividend on preferred stock issuances		-			-			(4,507,125	)		-
Deemed dividend on preferred stock exchanges		(3,424,205	)		-			(21,008,253	)		-
Preferred stock dividends		(26,661	)		-			(231,043	)		-
Net loss applicable to common shareholders	$	(12,729,810	)	$	(4,695,878	)	$	(42,710,994	)	$	(9,957,168	)

Basic and diluted weighted average shares outstanding		78,124,399			28,016,478			66,799,183			27,479,140

Loss per share - basic and diluted	$	(0.16	)	$	(0.17	)	$	(0.64	)	$	(0.36	)

See accompanying notes to consolidated financial statements

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AZURRX BIOPHARMA, INC.

Consolidated Statements of Changes in Stockholders’ Equity (unaudited)

Accumulated

Additional

Other

Common Stock

Paid In

Accumulated

Comprehensive

Shares

Amount

Capital

Deficit

Loss

Total

Balance, April 1, 2020

27,157,651

2,716

72,103,490

(67,956,022

)

(1,109,061

)

3,041,123

Common stock issued to Lincoln Park for Equity Purchase agreement

1,345,199

134

844,214

844,348

Stock-based compensation

SEC Form 10-Q filed by AzurRx BioPharma, Inc.