plxp20210930

plxp20210930_10q.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

☒	Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended September 30, 2021

☐	Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number 001-36351

Commission File Number 001-36351

PLx Pharma Inc.

(Exact name of registrant as specified in its charter)

Delaware		46-4995704
State or other jurisdiction of incorporation or organization		(I.R.S. Employer Identification No.)

9 Fishers Lane, Suite E Sparta, NJ		07871
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (973) 409-6541

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

Common Stock, $0.001 par value	PLXP	The NASDAQ Capital Market

(Title of each class)	(Trading Symbol)	(Name of each exchange on which registered)

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

As of November 9, 2021, there were 27,537,129 shares of common stock, $0.001 par value, issued and outstanding.

Table of Contents

PLx Pharma Inc.

Table of Contents

		Page #

PART I -	FINANCIAL INFORMATION	5

Item 1.	Consolidated Financial Statements (unaudited)	5

	Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020 (unaudited)	5

	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited)	6

	Consolidated Statements of Changes in Series A and Series B Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited)	7

	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020 (unaudited)	8

	Notes to Consolidated Financial Statements (unaudited)	9

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	26

Item 4.	Controls and Procedures	26

PART II -	OTHER INFORMATION	27

Item 1.	Legal Proceedings	27

Item1A.	Risk Factors	27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

Item 3.	Defaults Upon Senior Securities	27

Item 4.	Mine Safety Disclosure	27

Item 5.	Other Information	27

Item 6.	Exhibits	27

	Signatures	29

	Certificates

Table of Contents

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q and certain information incorporated herein by reference contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In this quarterly report, we refer to PLx Pharma Inc., together with its subsidiary, as the “Company,” “we,” “our” or “us.” All statements other than statements of historical facts contained herein, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “design,” “intend,” “expect” or the negative version of these words and similar expressions are intended to identify forward-looking statements.

We have based these forward-looking statements on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short- and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in Part II, Item 1A “Risk Factors.” In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances included herein may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

	●	our ability to maintain regulatory approval of VAZALORE™ 325 mg and VAZALORE™ 81 mg (referred to together as “VAZALORE”) and any future product candidates;
	●	the benefits of the use of VAZALORE;
	●	the projected dollar amounts of future sales of established and novel technologies designed to deliver oral non-steroidal anti-inflammatory drugs (“NSAIDs”) and other analgesics while limiting direct contact with the stomach;
	●	our ability to successfully commercialize our VAZALORE products, or any future product candidates;
	●	the rate and degree of market acceptance of our VAZALORE products or any future product candidates;
	●	our expectations regarding government and third-party payor coverage and reimbursement;
	●	our ability to scale up manufacturing of our VAZALORE products to commercial scale;
	●	our ability to successfully build a specialty sales force and commercial infrastructure or collaborate with a firm that has these capabilities;
	●	our ability to compete with companies currently producing gastrointestinal(“GI”)-safety designed technologies for oral NSAIDs and other analgesics;
	●	our reliance on third parties to conduct our clinical studies;
	●	our reliance on third-party contract manufacturers to manufacture and supply our product candidates for us;
	●	our ability to obtain supply of raw materials;
	●	our reliance on our collaboration partners’ performance over which we do not have control;
	●	our ability to retain and recruit key personnel, including development of a sales and marketing function;
	●	our ability to obtain and maintain intellectual property protection for our VAZALORE products or any future product candidates;
	●	our estimates of our expenses, ongoing losses, future revenue, capital requirements and our need for or ability to obtain additional financing;
	●	our ability to identify, develop, acquire and in-license new products and product candidates;
	●	our ability to successfully establish and successfully maintain appropriate collaborations and derive significant revenue from those collaborations, including but not limited to any milestone payments or royalties;
	●	legal, political, judicial and regulatory changes;
	●	any impact of the COVID-19 pandemic on our business and financial results;
	●	our financial performance; and
	●	developments and projections relating to our competitors or our industry.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. In addition, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Any forward-looking statement made by us in this quarterly report speaks only as of the date on which it is made. We disclaim any duty to update any of these forward-looking statements after the date of this quarterly report to conform these statements to actual results or revised expectations.

Table of Contents

Other risks may be described from time to time in our filings made under applicable securities laws. New risks emerge from time to time. It is not possible for our management to predict all risks. All forward-looking statements in this quarterly report speak only as of the date made and are based on our current beliefs and expectations. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

NOTE REGARDING TRADEMARKS

We own various U.S. federal trademark registrations and applications and unregistered trademarks and service marks, including:

	●	PLX®

	●	PLX PHARMA®

	●	PLXGUARD™

	●	VAZALORE™

	●	FIRST LIQUID-FILLED ASPIRIN CAPSULES™

	●

Solely for convenience, the trademarks and trade names in this quarterly report are sometimes referred to without the TM symbol, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend the use or display of other companies’ trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies, products or services.

Table of Contents

PART I.	FINANCIAL INFORMATION

ITEM 1.	CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

PLx Pharma Inc.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 30, 2021			December 31, 2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	82,554,297		$	22,448,651
Accounts receivable, net		3,253,312			-
Inventory		2,190,350			143,380
Prepaid expenses and other current assets		616,249			393,470
TOTAL CURRENT ASSETS		88,614,208			22,985,501
NON-CURRENT ASSETS
Property and equipment, net		888,658			1,225,879
Right of use assets		255,121			327,161
Goodwill		2,061,022			2,061,022
Security deposit		17,036			17,036
TOTAL ASSETS	$	91,836,045		$	26,616,599

LIABILITIES, SERIES A AND SERIES B CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	6,452,172		$	862,568
Accrued bonuses		839,701			1,184,823
Accrued interest		-			597,411
Term loan, net of discount and fees		-			622,265
Other current liabilities		113,509			275,247
TOTAL CURRENT LIABILITIES		7,405,382			3,542,314
NON-CURRENT LIABILITIES
Warrant liability		37,229,175			9,691,271
Accrued dividends		128,722			2,795,795
Other liabilities		165,494			134,184
TOTAL LIABILITIES		44,928,773			16,163,564

Series A convertible preferred stock: $0.001 par value; liquidation value of $12,642,000; 45,000 shares authorized, 12,642 and 15,000 issued and outstanding at September 30, 2021 and December 31, 2020 respectively		13,707,935			13,661,578
Series B convertible preferred stock: $0.001 par value; liquidation value of $2,492,722; 25,000 shares authorized, 2,364 and 8,000 issued and outstanding at September 30, 2021 and December 31, 2020 respectively		2,305,667			7,723,312

Commitments and contingencies

STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock; $0.001 par value; 930,000 shares authorized; none issued and outstanding		-			-
Common stock; $0.001 par value; 100,000,000 shares authorized; 27,477,022 and 13,911,633 shares issued and outstanding, respectively		27,477			13,912
Additional paid-in capital		182,702,379			91,203,050
Accumulated deficit		(151,836,186	)		(102,148,817	)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)		30,893,670			(10,931,855	)
TOTAL LIABILITIES, SERIES A AND SERIES B CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)	$	91,836,045		$	26,616,599

See accompanying notes to unaudited consolidated financial statements.

Table of Contents

PLx Pharma Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
REVENUES:
Net sales	$	6,616,100		$	-		$	6,616,100		$	-
Federal grant revenue		-			-			-			30,430
TOTAL REVENUES		6,616,100			-			6,616,100			30,430
Costs of sales		3,912,741			-			3,912,741			-
GROSS PROFIT		2,703,359			-			2,703,359			30,430

OPERATING EXPENSES:
Research and development		1,551,988			1,207,302			3,494,221			3,116,097
Selling, marketing and administrative		11,013,221			1,981,037			19,147,297			6,681,452
TOTAL OPERATING EXPENSES		12,565,209			3,188,339			22,641,518			9,797,549
OPERATING LOSS		(9,861,850	)		(3,188,339	)		(19,938,159	)		(9,767,119	)

OTHER INCOME (EXPENSE):
Interest income (expense), net		3,663			(72,705	)		(1,843	)		(267,213	)
Change in fair value of warrant liability		(11,784,305	)		134,552			(29,747,367	)		2,804,962
TOTAL OTHER INCOME (EXPENSE)		(11,780,642	)		61,847			(29,749,210	)		2,537,749

LOSS BEFORE INCOME TAXES		(21,642,492	)		(3,126,492	)		(49,687,369	)		(7,229,370	)
Income taxes		-			-			-			-
NET LOSS	$	(21,642,492	)	$	(3,126,492	)	$	(49,687,369	)	$	(7,229,370	)

Preferred dividends and beneficial conversion feature		-			(499,797	)		(2,524,958	)		(1,227,422	)
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(21,642,492	)	$	(3,626,289	)	$	(52,212,327	)	$	(8,456,792	)

Net loss per common share - basic and diluted	$	(0.80	)	$	(0.40	)	$	(2.34	)	$	(0.92	)

Weighted average shares of common shares - basic and diluted		26,911,855			9,156,260			22,342,538			9,156,260

See accompanying notes to unaudited consolidated financial statements.

Table of Contents

PLx Pharma Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN SERIES A AND SERIES B CONVERTIBLE PREFERRED STOCK

AND STOCKHOLDERS' EQUITY (DEFICIT)

(Unaudited)

For the Three and Nine Months Ended September 30, 2021 and 2020

	Temporary Equity												Permanent Equity
	Series A Convertible Preferred Stock						Series B Convertible Preferred Stock						Common stock				Additional paid-			Accumulated			Total stockholders'
	Shares			Amount			Shares			Amount			Shares		Amount		in capital			deficit			equity (deficit)
Balance at December 31, 2020		15,000		$	13,661,578			8,000		$	7,723,312			13,911,633	$	13,912	$	91,203,050		$	(102,148,817	)	$	(10,931,855	)

Stock-based compensation expense																		573,722						573,722
Series A Preferred - declared dividends																		(217,206	)					(217,206	)
Series B Preferred - declared dividends																		(105,065	)					(105,065	)
Issuance of common stock, net of issuance costs														8,924,700		8,924		66,872,947						66,881,871
Net loss																					(11,540,511	)		(11,540,511	)

Balance at March 31, 2021		15,000			13,661,578			8,000			7,723,312			22,836,333		22,836		158,327,448			(113,689,328	)		44,660,956

Stock-based compensation expense																		557,583						557,583
Settlement of dividends on Preferred Stock with adjustment of converson price					2,603,176						386,168													-
Conversion of Preferred Stock		(2,358	)		(2,556,819	)		(5,636	)		(5,803,813	)		3,000,000		3,000		8,357,633						8,360,633
Exercise of Warrants														308,675		309		3,040,437						3,040,746
Net loss																					(16,504,366	)		(16,504,366	)

Balance at June 30, 2021		12,642			13,707,935			2,364			2,305,667			26,145,008		26,145		170,283,101			(130,193,694	)		40,115,552

Stock-based compensation expense																		740,999						740,999
Issuance of common stock, net of issuance costs														448,268		448		7,578,179						7,578,627
Exercise of Warrants														883,746		884		4,100,100						4,100,984
Net loss																					(21,642,492	)		(21,642,492	)

Balance at September 30, 2021		12,642		$	13,707,935			2,364		$	2,305,667			27,477,022	$	27,477	$	182,702,379		$	(151,836,186	)	$	30,893,670


Balance at December 31, 2019		15,000		$	13,661,578			-		$	-			9,156,260	$	9,156	$	74,837,046		$	(86,938,163	)	$	(12,091,961	)

Stock-based compensation expense																		272,537						272,537
Series A Preferred - declared dividends																		(320,290	)					(320,290	)
Net income																					1,496,086			1,496,086

SEC Form 10-Q filed by PLx Pharma Inc.