ctic-20210930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


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

For the quarterly period ended: September 30, 2021


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

For the transition period from to

Commission File Number 000-28386

CTI BIOPHARMA CORP.

(Exact name of registrant as specified in its charter)


Delaware						91-1533912
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

3101 Western Avenue
Suite 800
Seattle
Washington						98121
(Address of principal executive offices)						(Zip Code)

(206) 282-7100

(Registrant’s telephone number, including area code)

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


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	CTIC	The Nasdaq Capital Market

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 (§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, a 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 ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:


Class						Outstanding at October 28, 2021
Common Stock, par value $0.001 per share						96,692,424

CTI BIOPHARMA CORP.

TABLE OF CONTENTS


						PAGE
PART I - FINANCIAL INFORMATION

ITEM 1: Financial Statements (unaudited)						4

Condensed Consolidated Balance Sheets						4

Condensed Consolidated Statements of Operations						5

Condensed Consolidated Statements of Comprehensive Loss						6

Condensed Consolidated Statements of Changes in Stockholders' Equity						7

Condensed Consolidated Statements of Cash Flows						9

Notes to Condensed Consolidated Financial Statements						10

ITEM 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations						18

ITEM 3: Quantitative and Qualitative Disclosures about Market Risk						24

ITEM 4: Controls and Procedures						24

PART II - OTHER INFORMATION

ITEM 1: Legal Proceedings						26

ITEM 1A: Risk Factors						26

ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds						26

ITEM 3: Defaults upon Senior Securities						26

ITEM 4: Mine Safety Disclosures						26

ITEM 5: Other Information						26

ITEM 6: Exhibits						27

Signatures						28

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

CTI BIOPHARMA CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)

(unaudited)


	September 30, 2021		December 31, 2020

ASSETS
Current assets:
Cash and cash equivalents	$	95,276	$	40,394

Short-term investments	—		12,057



Prepaid expenses and other current assets	3,769		1,874
Total current assets	99,045		54,325
Property and equipment, net	308		719
Other assets	1,877		3,197
Total assets	$	101,230	$	58,241

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	1,784	$	1,637
Accrued expenses	10,444		7,191

Current portion of long-term debt	47,240		4,455
Other current liabilities	2,874		3,755
Total current liabilities	62,342		17,038


Long-term liabilities	—		1,174
Total liabilities	62,342		18,212
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value per share:
Authorized shares - 33,333 as of September 30, 2021 and December 31, 2020
Series O Preferred Stock, 12,575 shares issued and outstanding as of September 30, 2021 and December 31, 2020 (Aggregate liquidation preference of $25,150 as of September 30, 2021 and December 31, 2020)	—		—
Series X Preferred Stock, 4,092 shares and 4,429 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively (Aggregate liquidation preference of $40,920 and $44,290 as of September 30, 2021 and December 31, 2020, respectively)	—		—
Series X1 Preferred Stock, 600 shares and 0 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively (Aggregate liquidation preference of $15,000 as of September 30, 2021)	—		—
Common stock, $0.001 par value per share:
Authorized shares - 266,500,000 and 166,500,000 as of September 30, 2021 and December 31, 2020, respectively
Issued and outstanding shares - 96,679,923 and 75,896,884 as of September 30, 2021 and December 31, 2020, respectively	97		76
Additional paid-in capital	2,427,918		2,367,958
Accumulated other comprehensive income	—		2
Accumulated deficit	(2,389,127)		(2,328,007)


Total stockholders' equity	38,888		40,029
Total liabilities and stockholders' equity	$	101,230	$	58,241

See accompanying notes.

CTI BIOPHARMA CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020




Operating costs and expenses:

Research and development	$	9,717	$	6,994	$	28,454	$	16,457
Selling, general and administrative	13,664		4,052		31,503		12,316

Other operating expenses	—		—		—		4,200
Total operating costs and expenses	23,381		11,046		59,957		32,973
Loss from operations	(23,381)		(11,046)		(59,957)		(32,973)
Non-operating income (expense):
Interest income	9		25		28		187
Interest expense	(531)		(115)		(644)		(419)
Amortization of debt discount and issuance costs	(131)		(131)		(391)		(391)
Foreign exchange (loss) gain	(7)		4		(18)		(79)
Loss on dissolution of majority-owned subsidiary	—		—		—		(3,774)
Other non-operating expense	(138)		—		(138)		—
Total non-operating expense, net	(798)		(217)		(1,163)		(4,476)


Net loss	$	(24,179)	$	(11,263)	$	(61,120)	$	(37,449)



Basic and diluted net loss per common share	$	(0.26)	$	(0.15)	$	(0.70)	$	(0.54)


Shares used in calculation of basic and diluted net loss per common share	93,823		73,712		87,574		69,966

See accompanying notes.

CTI BIOPHARMA CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net loss	$	(24,179)	$	(11,263)	$	(61,120)	$	(37,449)
Other comprehensive income (loss):



Change in unrealized gain (loss) on available-for-sale securities	—		3		(2)		3
Other comprehensive income (loss)	—		3		(2)		3
Comprehensive loss	$	(24,179)	$	(11,260)	$	(61,122)	$	(37,446)

See accompanying notes.

CTI BIOPHARMA CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(In thousands)

(unaudited)


							Additional		Accumulated Other						Total
	Preferred Stock			Common Stock			Paid-in		Comprehensive		Accumulated		Noncontrolling		Stockholders'
	Shares	Amount		Shares	Amount		Capital		Income (loss)		Deficit		Interest		Equity
Balance at January 1, 2021	17	$	—	75,897	$	76	$	2,367,958	$	2	$	(2,328,007)	$	—	$	40,029
Issuance of common stock, net of issuance costs	—	—		858	1		2,961		—		—		—		2,962
Equity-based compensation	—	—		—	—		932		—		—		—		932
Cancellation of restricted stock	—	—		(4)	—		—		—		—		—		—
Net loss	—	—		—	—		—		—		(17,266)		—		(17,266)
Other comprehensive loss	—	—		—	—		—		(3)		—		—		(3)
Balance at March 31, 2021	17	$	—	76,751	$	77	$	2,371,851	$	(1)	$	(2,345,273)	$	—	$	26,654
Issuance of common stock and Series X1 preferred stock, net of issuance costs	1	—		16,400	16		53,537		—		—		—		53,553
Equity-based compensation	—	—		—	—		988		—		—		—		988
Exercise of stock options and shares issued under employee stock purchase plan	—	—		159	—		185		—		—		—		185
Net loss	—	—		—	—		—		—		(19,675)		—		(19,675)
Other comprehensive income	—	—		—	—		—		1		—		—		1
Balance at June 30, 2021	18	$	—	93,310	$	93	$	2,426,561	$	—	$	(2,364,948)	$	—	$	61,706
Conversion of Series X preferred stock to common stock	(1)	—		3,370	4		(4)		—		—		—		—
Equity-based compensation	—	—		—	—		1,361		—		—		—		1,361
Net loss	—	—		—	—		—		—		(24,179)		—		(24,179)

Balance at September 30, 2021	17	$	—	96,680	$	97	$	2,427,918	$	—	$	(2,389,127)	$	—	$	38,888


							Additional		Accumulated Other						Total
	Preferred Stock			Common Stock			Paid-in		Comprehensive		Accumulated		Noncontrolling		Stockholders'
	Shares	Amount		Shares	Amount		Capital		Income		Deficit		Interest		Equity
Balance at January 1, 2020	13	$	—	57,980	$	58	$	2,299,186	$	—	$	(2,275,556)	$	(5,758)	$	17,930
Issuance of common stock, net of issuance costs	—	—		15,699	16		15,454		—		—		—		15,470
Conversion of Series X preferred stock to common stock	—	—		3	—		3		—		—		—		3
Equity-based compensation	—	—		—	—		1,167		—		—		—		1,167
Net loss	—	—		—	—		—		—		(12,186)		—		(12,186)
Balance at March 31, 2020	13	$	—	73,682	$	74	$	2,315,810	$	—	$	(2,287,742)	$	(5,758)	$	22,384
Reclassification of Series X preferred stock from mezzanine equity	4	—		—	—		43,637		—		—		—		43,637
Equity-based compensation	—	—		—	—		1,002		—		—		—		1,002

Dissolution of majority-owned subsidiary	—	—		—	—		(1,949)		—		—		5,758		3,809
Exercise of stock options and shares issued under employee stock purchase plan	—	—		35	—		31		—		—		—		31
Net loss	—	—		—	—		—		—		(14,000)		—		(14,000)

Balance at June 30, 2020	17	$	—	73,717	$	74	$	2,358,531	$	—	$	(2,301,742)	$	—	$	56,863
Equity-based compensation	—	—		—	—		1,216		—		—		—		1,216
Net loss	—	—		—	—		—		—		(11,263)		—		(11,263)
Other comprehensive income	—	—		—	—		—		3		—		—		3
Balance at September 30, 2020	17	$	—	73,717	$	74	$	2,359,747	$	3	$	(2,313,005)	$	—	$	46,819

See accompanying notes.

CTI BIOPHARMA CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)


	Nine Months Ended September 30,
	2021		2020
Operating activities
Net loss	$	(61,120)	$	(37,449)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss on dissolution of majority-owned subsidiary	—		3,774
Equity-based compensation	3,281		3,385
Depreciation and amortization	395		399


Provision for Italian VAT receivables and deposit	—		4,200






Other	(52)		(122)
Changes in operating assets and liabilities:



Prepaid expenses and other assets	856		2,267

Accounts payable, accrued expenses and other liabilities	1,769		(7,839)




Net cash used in operating activities	(54,871)		(31,385)
Investing activities

Purchases of short-term investments	—		(12,100)
Proceeds from maturities of short-term investments	12,000		2,500

Net cash provided by (used in) investing activities	12,000		(9,600)
Financing activities
Gross proceeds from public offering of common stock and Series X1 preferred stock	56,000		—
Cash paid for offering costs - public offering of common stock and Series X1 preferred stock	(2,447)		—
Gross proceeds from at-the-market equity offering	3,064		—

SEC Form 10-Q filed by CTI BioPharma Corp.