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Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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 March 31, 2024

OR

Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to ____________

 

Commission File No. 001-33407

 

PERSPECTIVE THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

41-1458152

(State or other jurisdiction of incorporation or
organization)

(I.R.S. Employer
Identification No.)

 

 

2401 Elliott Avenue, Suite 320

Seattle, Washington

98121

(Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including area code: (206) 676-0900

 

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, $0.001 par value

CATX

NYSE American LLC

 

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 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

Number of shares outstanding of each of the issuer's classes of common equity as of the latest practicable date:

 

Class

Outstanding as of May 10, 2024

Common stock, $0.001 par value

622,629,038

 

 


 

 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

In addition to historical information, this Quarterly Report on Form 10-Q (Form 10-Q), contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA). This statement is included for the express purpose of availing Perspective Therapeutics, Inc., of the protections of the safe harbor provisions of the PSLRA.

 

This Form 10-Q, including Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part I, Item 2, contains 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). All statements contained in this Form 10-Q other than statements of historical fact, including, without limitation, statements regarding our future financial condition, results of operations, business strategy and plans and objectives of management for future operations, industry trends and other future events are forward-looking statements. In some cases, you can identify forward-looking statements by terminology, such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “may,” “could,” “might,” “plan,” “should,” “will,” “would” or the negative of these terms and other similar expressions, although not all forward-looking statements contain these identifying terms. Forward-looking statements in this Form 10-Q include, among other things:

 

the timing, progress and results of our preclinical studies and clinical trials of our current and future program candidates, including statements regarding the timing of our planned regulatory communications, submissions and approvals, initiation and completion of studies or trials and related preparatory work and the period during which the results of the trials will become available, and our research and development programs;
our ability to obtain and maintain regulatory approvals for our future program candidates;
our manufacturing capabilities and strategy, including the scalability and commercial viability of our manufacturing methods and processes;
our ability to identify patients with the diseases treated by our program candidates and to enroll these patients in our clinical trials;
our expectations regarding the potential functionality, capabilities and benefits of our program candidates, if approved, for commercial use;
the potential size of the commercial market for our program candidates;
our expectations regarding the scope of any approved indication for any program candidate;
our ability to successfully commercialize our program candidates;
our ability to leverage technology to identify and develop future program candidates;
our estimates of our expenses, ongoing losses, future revenue, capital requirements and our need for or ability to obtain additional funding before we can expect to generate any revenue from product sales;
our belief regarding the sufficiency of our cash resources to fund our operating expenses and capital expenditure requirements into the first quarter of 2026;
our competitive position and expectations regarding developments and projections relating to our competitors or our industry; and
expectations, beliefs, intentions and strategies regarding the future.

 

These statements are based on certain assumptions and analyses made by us in light of our experience and our assessment of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate under the circumstances. Consequently, all of the forward-looking statements made in this Form 10-Q are qualified by these cautionary statements and there can be no assurance that the actual results anticipated by management will be realized or, even if substantially realized, that they will have the expected consequences to or effects on our business operations. Readers are cautioned not to place undue reliance on such forward-looking statements as they speak only of the Company’s views as of the date the statement was made (or any earlier date indicated in such statement). While we may update certain forward-looking statements from time to time, we undertake no obligation to do so, whether as a result of new information, future events or otherwise, except as required by applicable law. Our Securities and Exchange Commission (SEC) filings are available publicly on the SEC’s website at www.sec.gov.

i


Table of Contents

 

PERSPECTIVE THERAPEUTICS, INC.

Table of Contents

 

PART I

FINANCIAL INFORMATION

 

 

Item 1

Financial Statements

1

 

 

 

Condensed Consolidated Balance Sheets as of March 31, 2024 (unaudited) and December 31, 2023

1

 

 

 

 

Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023 (unaudited)

3

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 (unaudited)

4

 

 

 

 

Condensed Consolidated Statements of Changes in Stockholders' Equity for the three months ended March 31, 2024 and 2023 (unaudited)

5

 

 

 

Notes to the Unaudited Condensed Consolidated Financial Statements

6

 

 

Item 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

17

 

 

Item 3

Quantitative and Qualitative Disclosures About Market Risk

24

 

 

Item 4

Controls and Procedures

24

 

 

PART II

OTHER INFORMATION

 

 

Item 1

Legal Proceedings

25

 

 

Item 1A

Risk Factors

25

 

 

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

25

 

 

Item 3

Defaults Upon Senior Securities

25

 

 

Item 4

Mine Safety Disclosures

25

 

 

Item 5

Other Information

25

 

 

Item 6

Exhibits

26

 

 

Signatures

 

28

 

ii


Table of Contents

 

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

Perspective Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except shares and par value data)

 

 

March 31,

 

 

December 31,

 

 

2024

 

 

2023

 

 

 

(unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

142,117

 

 

$

9,238

 

Short-term investments

 

 

38,531

 

 

 

-

 

Accounts receivable, net of allowance for doubtful accounts: 2024 - $650; 2023 - $650

 

 

999

 

 

 

1,165

 

Prepaid expenses and other current assets

 

 

1,287

 

 

 

1,133

 

Current assets held for sale, discontinued operations

 

 

5,266

 

 

 

5,301

 

Total current assets

 

 

188,200

 

 

 

16,837

 

 

 

 

 

 

 

Noncurrent assets:

 

 

 

 

 

 

Property and equipment, net

 

 

14,302

 

 

 

5,576

 

Right-of-use asset, net

 

 

1,058

 

 

 

747

 

Restricted cash

 

 

182

 

 

 

182

 

Intangible assets, in-process research and development

 

 

50,000

 

 

 

50,000

 

Goodwill

 

 

24,062

 

 

 

24,062

 

Other assets, net

 

 

482

 

 

 

487

 

 

 

 

 

 

 

Total assets

 

$

278,286

 

 

$

97,891

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

6,027

 

 

$

6,909

 

Lease liability

 

 

128

 

 

 

46

 

Accrued personnel expenses

 

 

1,828

 

 

 

3,588

 

Note payable

 

 

50

 

 

 

49

 

Deferred Income (Note 3)

 

 

1,400

 

 

 

-

 

Current liabilities of discontinued operations

 

 

5,070

 

 

 

5,072

 

Total current liabilities

 

 

14,503

 

 

 

15,664

 

 

 

 

 

 

 

Noncurrent liabilities:

 

 

 

 

 

 

Lease liability

 

 

1,037

 

 

 

780

 

Note payable

 

 

1,663

 

 

 

1,676

 

Deferred Income (Note 3)

 

 

26,600

 

 

 

-

 

Deferred tax liability

 

 

4,592

 

 

 

4,592

 

 

 

 

 

 

 

Total liabilities

 

 

48,395

 

 

 

22,712

 

 

 

 

 

 

 

Commitments and contingencies (Note 10)

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Preferred stock, $0.001 par value; 7,000,000 shares authorized; 5,000,000 designated Series B convertible preferred stock; no shares issued and outstanding as of March 31, 2024 and December 31, 2023

 

 

-

 

 

 

-

 

Common stock, $0.001 par value; 750,000,000 shares authorized; 586,915,977 and 281,809,852 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

 

 

587

 

 

 

282

 

Additional paid-in capital

 

 

394,028

 

 

 

227,337

 

Accumulated deficit

 

 

(164,724

)

 

 

(152,440

)

 

 

 

 

 

 

Total stockholders' equity

 

 

229,891

 

 

 

75,179

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

278,286

 

 

$

97,891

 

 

1


Table of Contents

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

2


Table of Contents

 

Perspective Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations (unaudited)

(Dollars and shares in thousands, except for per-share amounts)

 

 

 

 

Three Months Ended March 31,

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

Grant revenue

 

$

325

 

 

$

233

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

Research and development

 

 

7,452

 

 

 

3,309

 

General and administrative

 

 

5,878

 

 

 

6,663

 

Loss on disposal of property and equipment

 

 

-

 

 

 

22

 

Total operating expenses

 

 

13,330

 

 

 

9,994

 

 

 

 

 

 

 

Operating loss

 

 

(13,005

)

 

 

(9,761

)

 

 

 

 

 

 

Non-operating income (expense):

 

 

 

 

 

 

Interest income

 

 

1,211

 

 

 

374

 

Interest and other expense

 

 

(29

)

 

 

(18

)

Equity in loss of affiliate

 

 

(2

)

 

 

-

 

Total non-operating income (expense), net

 

 

1,180

 

 

 

356

 

 

 

 

 

 

 

Net loss from continuing operations

 

 

(11,825

)

 

 

(9,405

)

Net loss from discontinued operations

 

 

(461

)

 

 

(1,466

)

Gain recognized on classification as held for sale

 

 

2

 

 

 

-

 

Net loss before deferred income tax benefit

 

 

(12,284

)

 

 

(10,871

)

Deferred income tax benefit

 

 

-

 

 

 

10,500

 

Net loss

 

$

(12,284

)

 

$

(371

)

 

 

 

 

 

 

Basic and diluted loss per share:

 

 

 

 

 

 

Loss from continuing operations

 

$

(0.02

)

 

$

0.01

 

Loss from discontinued operations

 

 

(0.00

)

 

 

(0.01

)

Basic and diluted loss per share

 

$

(0.02

)

 

$

0.00

 

 

 

 

 

 

 

Weighted average shares used in computing net loss per share:

 

 

 

 

 

 

Basic and diluted

 

 

495,100

 

 

 

228,591

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

3


Table of Contents

 

Perspective Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (unaudited)

(In thousands)

 

Three Months Ended March 31,

 

 

2024

 

 

2023

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net loss

 

$

(12,284

)

 

$

(371

)

Adjustments to reconcile net loss to net cash provided by or used in operating activities:

 

 

 

 

 

 

Lease expense

 

 

28

 

 

 

1

 

Depreciation expense

 

 

346

 

 

 

180

 

Loss on disposal of property and equipment

 

 

-

 

 

 

22

 

Amortization of other assets

 

 

10

 

 

 

10

 

Accretion of asset retirement obligation

 

 

-

 

 

 

9

 

Equity in loss of affiliate

 

 

2

 

 

 

-

 

Accrued interest on short-term investments

 

 

(306

)

 

 

-

 

Share-based compensation

 

 

656

 

 

 

1,368

 

Deferred income tax benefit

 

 

-

 

 

 

(10,500

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

166

 

 

 

(1

)

Inventory

 

 

27

 

 

 

128

 

Prepaid expenses and other current assets

 

 

(154

)

 

 

(60

)

Accounts payable and accrued expenses

 

 

(883

)

 

 

(588

)

Deferred Income1

 

 

28,000

 

 

 

-

 

Accrued personnel expenses

 

 

(1,760

)

 

 

79

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

 

 

13,848

 

 

 

(9,723

)

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Additions to property and equipment

 

 

(9,072

)

 

 

(201

)

Purchases of short-term investments

 

 

(38,225

)

 

 

-

 

Proceeds from maturity of short-term investments

 

 

-

 

 

 

22,764

 

Net cash acquired in acquisition of Viewpoint

 

 

-

 

 

 

2,699

 

 

 

 

 

 

 

Net cash (used in) provided by investing activities

 

 

(47,297

)

 

 

25,262

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Repayment of notes payable

 

 

(12

)

 

 

(15

)

Proceeds from sales of common stock, pursuant to exercise of option

 

 

126

 

 

 

-

 

Proceeds from January 2024 Public Offering, net1

 

 

53,141

 

 

 

-

 

Proceeds from Pre-funded Warrants, net1

 

 

10,208

 

 

 

-

 

Proceeds from Lantheus Investment Agreement, net1

 

 

20,846

 

 

 

-

 

Proceeds from March 2024 Investment Agreement, net1

 

 

82,019

 

 

 

-

 

Issuance costs related to common stock issued in exchange for Viewpoint common stock

 

 

-

 

 

 

(65

)

 

 

 

 

 

 

Net cash provided by (used in) financing activities

 

 

166,328

 

 

 

(80

)

 

 

 

 

 

 

Net increase in cash, cash equivalents and restricted cash

 

 

132,879

 

 

 

15,459

 

Cash, cash equivalents and restricted cash beginning of period

 

 

9,420

 

 

 

21,175

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH END OF PERIOD

 

$

142,299

 

 

$

36,634

 

 

 

 

 

 

 

Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

142,117

 

 

$

36,452

 

Restricted cash

 

 

182

 

 

 

182

 

Total cash, cash equivalents and restricted cash shown on the condensed consolidated statements of cash flows

 

$

142,299

 

 

$

36,634

 

 

 

 

 

 

 

Supplemental schedule of noncash investing and financing activities:

 

 

 

 

 

 

Recognition of operating lease liability and right-of-use asset

 

$

348

 

 

$

-

 

Fair value of Viewpoint assets acquired including goodwill

 

 

-

 

 

 

85,885

 

136,545,075 shares of Perspective Therapeutics common stock issued in exchange for Viewpoint common stock

 

 

-

 

 

 

(54,618

)

Assumption of Viewpoint stock options and warrants at fair value

 

 

-

 

 

 

(7,836

)

Note receivable and accrued interest from Viewpoint forgiven

 

 

-

 

 

 

(6,171

)

Viewpoint liabilities assumed including deferred tax liabilities established through accounting for business combinations (Note 14)

 

$

348

 

 

$

17,260

 

 

1. See Note 3, Investments and Agreements, for additional information.

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

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Perspective Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Stockholders' Equity (unaudited)

(In thousands, except shares)

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional Paid-in Capital

 

 

Accumulated Deficit

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at December 31, 2022

 

 

142,112,766

 

 

$

142

 

 

$

160,432

 

 

$

(105,932

)

 

$

54,642

 

Issuance of common stock in exchange for
   Viewpoint common stock,
   net of issuance costs

 

 

136,545,075

 

 

137

 

 

 

54,416

 

 

 

-

 

 

 

54,553

 

Assumption of Viewpoint stock options
   and warrants at fair value

 

 

-

 

 

 

-

 

 

 

7,836

 

 

 

-

 

 

 

7,836

 

Share-based compensation

 

 

-

 

 

 

-

 

 

 

1,368

 

 

 

-

 

 

 

1,368

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(371

)

 

 

(371

)

Balances at March 31, 2023

 

 

278,657,841

 

 

$

279

 

 

$

224,052

 

 

$

(106,303

)

 

$

118,028

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional Paid-in Capital

 

 

Accumulated Deficit

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at December 31, 2023

 

 

281,809,852

 

 

$

282

 

 

$

227,337

 

 

$

(152,440

)

 

$

75,179

 

Issuance of common stock pursuant to the
   January 2024 Public Offering, net
1

 

 

156,399,542

 

 

 

157

 

 

 

52,984

 

 

 

-

 

 

 

53,141

 

Issuance of Pre-funded Warrants, net1

 

 

-

 

 

 

-

 

 

 

10,208

 

 

 

-

 

 

 

10,208

 

Issuance of common stock pursuant to the
   Lantheus Investment Agreement, net
1

 

 

56,342,355

 

 

 

56

 

 

 

20,790

 

 

 

-

 

 

 

20,846

 

Issuance of common stock pursuant to the
   March 2024 Investment Agreement, net
1

 

 

92,009,981

 

 

 

92

 

 

 

81,927

 

 

 

-

 

 

 

82,019

 

Issuance of common stock pursuant to
   exercise of options

 

 

354,247

 

 

 

-

 

 

 

126

 

 

 

-

 

 

 

126

 

Share-based compensation

 

 

-

 

 

 

-

 

 

 

656

 

 

 

-

 

 

 

656

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(12,284

)

 

 

(12,284

)

Balances at March 31, 2024

 

 

586,915,977

 

 

$

587

 

 

$

394,028

 

 

$

(164,724

)

 

$

229,891

 

 

1. See Note 3, Investments and Agreements, for additional information.

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Perspective Therapeutics, Inc.

Notes to the Unaudited Condensed Consolidated Financial Statements

 

1.
Basis of Presentation and Summary of Significant Accounting Policies

Perspective Therapeutics, Inc. (Perspective Therapeutics or the Company) (formerly known as Isoray, Inc. and Century Park Pictures Corporation) was incorporated in Minnesota in 1983. In December 2018, upon approval of a majority of stockholders, Perspective Therapeutics was redomiciled to Delaware.

On February 3, 2023, the Company completed the merger of Isoray Acquisition Corp., a Delaware corporation and wholly owned subsidiary of the Company, with Viewpoint Molecular Targeting, Inc. (Viewpoint) (such transaction being the Merger). Pursuant to the Merger, the Company issued 136,545,075 shares of common stock, representing approximately 49% of its fully diluted outstanding capital stock as of the close of the Merger. Viewpoint is developing the next generation of precision-targeted alpha therapies (TAT) for oncology that have the potential to treat a large population of cancer patients across multiple tumor types, including those with metastatic disease.

On February 6, 2023, the Company announced that on January 31, 2023, its board of directors approved a change in its fiscal year end from June 30 to December 31, effective as of December 31, 2022.

Perspective Therapeutics Pty Ltd, an Australian registered company, was formed on April 14, 2023 as a wholly owned subsidiary of the Company. It was formed to assist in certain clinical trial aspects of the alpha-emitter therapeutic agents.

On July 28, 2005, Isoray Medical, Inc. (Isoray) became a wholly owned subsidiary of Perspective Therapeutics pursuant to a merger. Isoray was formed under Delaware law on June 15, 2004 and on October 1, 2004 acquired two affiliated predecessor companies which began operations in 1998. On April 12, 2024, the Company completed the previously announced sale of its Cesium-131 brachytherapy business and substantially all of the assets of Isoray to GT Medical Technologies, Inc., a Delaware corporation (GT Medical) (such transaction being the GT Medical Closing). Pursuant to the GT Medical Closing, GT Medical issued to Isoray 279,516 shares of GT Medical’s common stock, par value $0.0001 per share, representing 0.5% of GT Medical’s issued and outstanding capital stock on a fully diluted basis as of the closing. Accordingly, the financial information and operating results of the Cesium-131 brachytherapy business have been presented as discontinued operations in the condensed consolidated financial statements for all periods presented. Unless otherwise noted, discussion within these notes to the condensed consolidated financial statements relates to continuing operations. For additional information, see Note 4, Discontinued Operations, in this Form 10-Q.

Isoray International LLC, a Washington limited liability company, was formed on November 27, 2007 and is a wholly owned subsidiary of Perspective Therapeutics.

The accompanying unaudited condensed consolidated financial statements are those of Perspective Therapeutics, Inc., and its wholly owned subsidiaries, referred to herein as “Perspective Therapeutics” or the “Company.” All significant intercompany accounts and transactions have been eliminated in the consolidation. In the opinion of management, all adjustments necessary for the fair statement of the condensed consolidated financial statements have been included. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes as set forth in the Company’s Annual Report on Form 10-K for the period ended December 31, 2023 filed with the SEC on March 28, 2024 (2023 Form 10-K). Viewpoint has been consolidated since the close of the Merger. For additional information regarding the Merger, see Note 14, Merger, in this Form 10-Q.

The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP). Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures are adequate for the information not to be misleading. The unaudited condensed consolidated financial statements reflect, in management’s opinion, all adjustments of a normal, recurring nature that are necessary for the fair statement of the Company’s financial position, results of operations and cash flows for the interim periods, but are not necessarily indicative of the results expected for the full fiscal year or any other period.

The Company anticipates that as the result of continuing operating losses and the significant net operating losses available from prior fiscal years, its effective income tax rate for fiscal year 2024 will be 0%.

Liquidity

The Company assesses its liquidity in terms of its ability to generate cash to fund its operating, investing and financing activities. The Company has had a history of operating losses and an absence of significant recurring cash inflows from revenue, and at March 31, 2024, the Company had cash, cash equivalents and short-term investments of $180.6 million and total accumulated deficit of $164.7 million. The Company has historically financed its operations primarily through selling equity.

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The Company believes that its $180.6 million of cash, cash equivalents and short-term investments as of March 31, 2024 will enable it to fund its current planned operations into the first quarter of 2026, though it may raise additional capital through a combination of equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements and/or government funding and grants. On April 11, 2024, the Company sold 35,352,461 shares of its common stock under the ATM Agreement at an average price of approximately $1.40 per common share, resulting in gross proceeds of approximately $49.5 million.

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The operating plan may change as a result of many factors currently unknown to management, and there can be no assurance that the current operating plan will be achieved in the timeframe anticipated by management or at all, and the Company may need to seek additional funds sooner than anticipated. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from potential unknown factors.

Reclassifications

In addition to the discontinued operations discussed above, the Company has made certain reclassifications to prior period amounts in the condensed consolidated financial statements and accompanying notes to conform to the current period presentation. The reclassification of these items had no impact on net loss, financial position or cash flows in the current or prior periods. Specifically, accrued payroll and related taxes and accrued vacation were combined to create accrued personnel, and accrued protocol expense and accrued waste disposal are included in accounts payable and accrued expenses, all of which are presented on the condensed consolidated balance sheets and condensed consolidated statement of cash flows.

Significant Accounting Policies

The Company’s significant accounting policies and recent accounting pronouncements are described in Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements in Item 8 of the 2023 Form 10-K. There have been no changes to the Company’s significant accounting policies, and the Company has not adopted any significant accounting policies during the three months ended March 31, 2024.

 

2.
Loss per Share

Basic and diluted loss per share is calculated by dividing net loss by the weighted average number of shares of common stock outstanding and does not include the impact of any potentially dilutive common stock equivalents. In January 2024, the Company issued pre-funded warrants in connection with a public offering (see January 2024 Public Offering in Note 3, Investments and Agreements, in this Form 10-Q). As the pre-funded warrants exercise price is nominal and there are no conditions that must be satisfied prior to their exercise, the pre-funded warrants are included in the calculation of the basic and diluted earnings per share. At March 31, 2024 and 2023, the calculation of diluted weighted average shares did not include common stock warrants or options that are potentially convertible into common stock as those would be antidilutive due to the Company’s net loss position.

Securities not considered in the calculation of diluted weighted average shares, but that could be dilutive in the future as of March 31, 2024 and 2023, were as follows (in thousands):

 

 

March 31, 2024

 

 

March 31, 2023

 

Common stock warrants

 

 

4,386

 

 

 

6,033

 

Common stock options

 

 

51,649

 

 

 

37,870

 

Total potential dilutive securities

 

 

56,035

 

 

 

43,903

 

 

Effective upon the closing of the Merger with Viewpoint on February 3, 2023, the Company assumed 3,387,093 warrants to purchase shares of common stock with an exercise price of $0.27 per share and 24,263,424 options to purchase shares of common stock with exercise prices ranging from $0.13 to $0.30 per share.

 

3.
Investments and Agreements

 

March 2024 Private Placement with Institutional Investors

On March 4, 2024, the Company entered into an investment agreement (the March 2024 Investment Agreement) with certain accredited institutional investors (Institutional Investors) pursuant to which the Company agreed to issue and sell, in a private placement (the March 2024 Private Placement), 92,009,981 shares of the Company’s common stock, par value $0.001 per share (Common Stock), for a purchase price of $0.95 per share, representing the closing price of the Common Stock on March 1, 2024. The closing of the March 2024 Private Placement occurred on March 6, 2024.

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The gross proceeds to the Company from the March 2024 Private Placement were approximately $87.4 million, before deducting fees payable to the Placement Agents (as defined below) and other estimated transaction expenses. The Company intends to use the net proceeds from the March 2024 Private Placement for general corporate and working capital purposes, which may include research and development expenditures, preclinical study and clinical trial expenditures, manufacturing expenditures, commercialization expenditures, capital expenditures, acquisitions of new technologies, products or businesses and investments.

The March 2024 Private Placement was conducted pursuant to a Placement Agency Agreement, dated March 4, 2024 (the Placement Agency Agreement), by and between the Company and Oppenheimer & Co. Inc., as representative of the placement agents named therein (the Placement Agents). Per the Placement Agency Agreement, the Company agreed to: (i) pay the Placement Agents a cash fee equal to 5.85% of the gross proceeds received by the Company from the sale of the shares; and (ii) reimburse the Placement Agents for certain fees and expenses.

Lantheus Agreements

Investment Agreement

On January 8, 2024, the Company entered into an investment agreement (the Lantheus Investment Agreement) with Lantheus Alpha Therapy, LLC, a Delaware limited liability company and wholly owned subsidiary of Lantheus Holdings, Inc. (Lantheus), pursuant to which the Company agreed to sell and issue to Lantheus in a private placement transaction certain shares (the Lantheus Shares) of the Company’s Common Stock. The closing of the purchase and sale of the Lantheus Shares to Lantheus by the Company (the Lantheus Closing) was subject to the Company raising at least $50.0 million of gross proceeds (excluding Lantheus’ investment) in a qualifying third-party financing transaction, which occurred on January 22, 2024.

The number of Lantheus Shares sold was 56,342,355, representing 19.99% of the outstanding shares of Common Stock as of January 8, 2024. Pursuant to the Lantheus Investment Agreement, the Company agreed to cooperate in good faith to negotiate and enter into a registration rights agreement with Lantheus, obligating the Company to file a registration statement on Form S-3 with the SEC to register for resale the Lantheus Shares issued at the Lantheus Closing. The Company filed the Form S-3 on March 29, 2024, and the SEC declared it effective on April 9, 2024 (File No. 333-278362).

 

The Lantheus Investment Agreement also contains agreements of the Company and Lantheus whereby Lantheus is provided certain board observer and information rights of the Company, as well as standstill provisions prohibiting Lantheus from taking certain actions for a specified period of time, subject to certain exceptions.

The Lantheus Investment Agreement also provides Lantheus with certain pro rata participation rights to maintain its ownership position in the Company in the event that the Company makes any public or non-public offering of any equity or voting interests in the Company or any securities that are convertible or exchangeable into (or exercisable for) equity or voting interests in the Company, subject to certain exceptions.

Pursuant to the Lantheus Investment Agreement, the Company is required to notify Lantheus within 10 business days of the end of a fiscal quarter in which the Company issued shares of Common Stock pursuant to that certain At Market Issuance Sales Agreement among the Company, Oppenheimer & Co. Inc., B. Riley Securities, Inc., and JonesTrading Institutional Services LLC dated November 17, 2023 (the ATM Agreement), of (i) the number of shares of Common Stock issued during such fiscal quarter pursuant to the ATM Agreement and (ii) the average price per share received by the Company before commissions (the ATM Average Price). Upon receipt of such notice, Lantheus may elect, at its option, to purchase all or a portion of its Pro Rata Portion (as defined in the Lantheus Investment Agreement) of such shares at an aggregate price equal to the number of shares purchased multiplied by the ATM Average Price for such quarter (the ATM Participation Right). Pursuant to the Lantheus Investment Agreement, Lantheus may not exercise the ATM Participation Right more than two times per calendar year.

Asset Purchase Agreement

On January 8, 2024, the Company entered into an Asset Purchase Agreement (the Progenics APA) with Progenics Pharmaceuticals, Inc., a Delaware corporation (Progenics) and affiliate of Lantheus, pursuant to which the Company acquired certain assets and the associated lease of Progenics’ radiopharmaceutical manufacturing facility in Somerset, New Jersey for a purchase price of $8.0 million in cash. The transactions contemplated by the Progenics APA closed on March 1, 2024.

Option Agreement

On January 8, 2024, the Company entered into an option agreement (the Option Agreement) with Lantheus whereby Lantheus was granted an exclusive option to negotiate an exclusive, worldwide, royalty- and milestone-bearing right and license to [212Pb]VMT-α-NET, the Company’s clinical-stage alpha therapy developed for the treatment of neuroendocrine tumors. If good-faith negotiations fail, Lantheus has a one-year right to reenter negotiations if a third party offers to purchase or license the [212Pb]VMT-α-NET program.

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Additionally, Lantheus has a right to co-fund the Investigational New Drug (IND) application, enabling studies for early-stage therapeutic candidates targeting prostate-specific membrane antigen and gastrin-releasing peptide receptor and, prior to IND filing, a right to negotiate for an exclusive license to such candidates. In consideration of the rights granted by the Company to Lantheus pursuant to the Option Agreement, Lantheus paid to the Company a one-time payment of $28.0 million, subject to certain withholding provisions associated with the closing of the Progenics APA.

Under the terms of the Option Agreement, Lantheus also has a right of first offer and last look protections for any third-party merger and acquisition transactions involving the Company for a 12-month period beginning on January 8, 2024.

 

The Company determined that the Option Agreement should be accounted for as a research and development arrangement in accordance with ASC 730-20, Research and Development Arrangements, as Lantheus held approximately 19.9% of the Company’s outstanding common stock at March 31, 2024. The Option Agreement contains no repayment provisions, does not create any obligation to enter into any license, transfer or sale agreements with Lantheus, and does not restrict the use of the funds in any way.

 

Accordingly, the balance sheet reports current and long-term liabilities related to these options under the caption, “Deferred Income.” The values for each distinct option within the Option Agreement were determined by estimating the fair value of each distinct option by a third-party valuation firm and the liabilities will be recognized as income in the condensed consolidated statement of operations as the various options expire.

January 2024 Public Offering

On January 17, 2024, the Company entered into an underwriting agreement (the Underwriting Agreement) with Oppenheimer & Co. Inc., as representative of the underwriters named therein (the Underwriters), in connection with its previously announced underwritten public offering (the Public Offering) of 132,075,218 shares (the Public Shares) of the Company's Common Stock and, in lieu of Public Shares to certain investors, pre-funded warrants (the Pre-funded Warrants) to purchase 30,086,944 shares of Common Stock. The price to the public for the Public Shares was $0.37 per Public Share, and the price to the public for the Pre-funded Warrants was $0.369 per Pre-funded Warrant, which represents the per share price for the Public Shares less the $0.001 per share exercise price for each such Pre-funded Warrant. Under the terms of the Underwriting Agreement, the Company granted the Underwriters an option, exercisable for 30 days, to purchase up to an additional 24,324,324 shares of Common Stock at the same price per share as the Public Shares, which was fully exercised by the Underwriters on January 18, 2024. The Public Offering closed on January 22, 2024.

The gross proceeds to the Company from the Public Offering were approximately $69.0 million, before underwriting discounts and commissions and estimated expenses of the Public Offering.

The Company intends to use the net proceeds from the Public Offering for general corporate purposes, which may include research and development expenditures, preclinical study and clinical trial expenditures, manufacturing expenditures, commercialization expenditures, working capital, capital expenditures, acquisitions of new technologies, products or businesses and investments.

The Public Offering was made pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-275638), declared effective by the SEC on December 14, 2023, a base prospectus dated December 14, 2023, and the related prospectus supplement dated January 17, 2024.

The Pre-funded Warrants are exercisable at any time after the date of issuance. The exercise price and the number of shares of Common Stock issuable upon exercise of each Pre-funded Warrant are subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Common Stock as well as upon any distribution of assets, including cash, stock or other property, to the Company’s stockholders. The Pre-funded Warrants will not expire and are exercisable in cash or by means of a cashless exercise. A holder of Pre-funded Warrants may not exercise such Pre-funded Warrants if the aggregate number of shares of Common Stock beneficially owned by such holder, together with its affiliates, would beneficially own more than 4.99% of the issued and outstanding shares of Common Stock following such exercise, as such percentage ownership is determined in accordance with the terms of the Pre-funded Warrants. A holder of Pre-funded Warrants may increase or decrease this percentage not in excess of 19.99% by providing at least 61 days’ prior notice to the Company.

 

ATM Agreement

 

The Company has an At Market Issuance Sales Agreement (ATM Agreement) with Oppenheimer & Co., Inc., B. Riley Securities, Inc. and JonesTrading Institutional Services LLC, dated November 17, 2023, to create an "at-the-market" equity program under which it may offer and sell shares of its common stock, from time to time.

On November 17, 2023, the Company filed a shelf registration statement on Form S-3 with the SEC (File No. 333-275638) and accompanying base prospectus, declared effective by the SEC on December 14, 2023, for the offer and sale of up to $200 million of its securities (December 2023 Registration Statement). Also on November 17, 2023, the Company filed a prospectus supplement with the SEC in connection with the offering of up to $50 million of shares of its common stock pursuant to the ATM Agreement under the

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December 2023 Registration Statement. In December 2023, the Company sold 1,238,826 shares under the ATM Agreement at an average price of approximately $0.303 per common share for gross proceeds of approximately $0.4 million.

 

On April 11, 2024, the Company sold 35,352,461 shares of its common stock under the ATM Agreement at an average price of approximately $1.40 per common share, resulting in gross proceeds of approximately $49.5 million.

 

For additional information related to the various agreements discussed above, see Note 20, Subsequent Events, in the Company’s 2023 Form 10-K.

 

4.
Discontinued Operations

 

On April 12, 2024 (GT Medical Closing Date), the Company completed the sale of substantially all of the assets (GT Medical Closing) of Isoray to GT Medical. Previously, the Company announced that on December 7, 2023, Isoray entered into an Asset Purchase Agreement (GT Medical APA) by and among Isoray, the Company, and GT Medical pursuant to which Isoray would sell to GT Medical, and GT Medical would purchase from Isoray, all of Isoray’s right, title and interest in and to substantially all of the assets of Isoray related to Isoray’s commercial Cesium-131 business (the Business) including equipment, certain contracts, inventory and intellectual property. Subject to limited exceptions set forth in the GT Medical APA, GT Medical did not assume the liabilities of Isoray.

 

Pursuant to the terms of, and subject to the conditions specified in, the GT Medical APA, at the GT Medical Closing, (i) GT Medical issued to Isoray 279,516 shares of GT Medical’s common stock, par value $0.0001 per share, representing 0.5% of GT Medical’s issued and outstanding capital stock on a fully diluted basis as of the GT Medical Closing Date and (ii) Isoray has the right to receive, and GT Medical is obligated to pay, certain cash royalty payments during each of the first four years beginning upon the GT Medical Closing Date (each such year, a Measurement Period), as summarized below:

with respect to GT Medical’s net sales of Cesium 131 brachytherapy seeds for cases that do not utilize GT Medical’s GammaTile Therapy: (a) if such net sales for a Measurement Period are $10 million or less, 3.0% of such net sales; (b) if such net sales for a Measurement Period are greater than $10 million and less than $15 million, 4.0% of such net sales; and (c) if such net sales for a Measurement Period are $15 million or more, 5.0% of such net sales; and
with respect to GT Medical’s net sales of GT Medical’s GammaTile Therapy utilizing Cesium 131 brachytherapy seeds: 0.5% of such net sales for a Measurement Period.

 

In accordance with ASC 205-20, Presentation of Financial Statements – Discontinued Operations, the following table presents the major classes of assets and liabilities of discontinued operations of the Business reported in the condensed consolidated balance sheets and prior year amounts have been reclassified.

 

 

 

March 31, 2024

 

 

December 31, 2023

 

(in thousands)

 

 

 

 

 

 

Assets held for sale of discontinued operations, current

 

 

 

 

 

 

Inventory

 

$

3,121

 

 

$

3,148

 

Prepaid expenses and other current assets

 

 

169

 

 

 

169

 

Property and equipment, net

 

 

1,263

 

 

 

1,263

 

Right-of-use asset, net

 

 

676

 

 

 

676

 

Other assets, net

 

 

37

 

 

 

45

 

Total current assets held for sale of discontinued operations

 

$

5,266

 

 

$

5,301

 

 

 

 

 

 

 

Liabilities held for sale of discontinued operations, current

 

 

 

 

 

 

Lease liability

 

$

677

 

 

$

677

 

Asset retirement obligation

 

 

225

 

 

 

225

 

Loss recognized on classification as held for sale

 

 

4,168

 

 

 

4,170

 

Total current liabilities of discontinued operations

 

$

5,070

 

 

$

5,072

 

 

10


The following table presents the components of discontinued operations in relation to the Business reported in the unaudited condensed consolidated statements of operations (in thousands):

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

Sales, net

 

$

1,973

 

 

$

1,830

 

Cost of sales

 

 

1,402

 

 

 

1,576

 

Gross profit

 

 

571

 

 

 

254

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

Research and development

 

 

48

 

 

 

548

 

Sales and marketing

 

 

803

 

 

 

812

 

General and administrative

 

 

181

 

 

 

360

 

Total operating expenses

 

 

1,032

 

 

 

1,720

 

 

 

 

 

 

 

Net loss from discontinued operations

 

$

(461

)

 

$

(1,466

)

 

The Company determined the loss recognized on classification as held for sale by identifying the assets and liabilities that are included in the GT Medical APA and are included in the table above. Additionally, the loss recognized on classification as held for sale was determined using the estimated fair value of the GT Medical stock of $0.2 million received less than the carrying value of the net assets sold. The fair value of the stock received was determined based on information provided to the Company by GT Medical from a current valuation study that was prepared for them. Excluded from the calculation of the loss are contingent royalties that could be received from future sales.

 

Certain amounts included in the unaudited condensed consolidated statements of cash flows related to the discontinued operations are as follows (in thousands):

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

Depreciation

 

$

-

 

 

$

55

 

Amortization

 

 

-

 

 

 

9

 

Share-based compensation

 

 

34

 

 

 

386

 

Additions to property and equipment

 

 

-

 

 

 

56

 

 

For the three months ended March 31, 2024 and 2023, there was no provision (benefit) for income taxes recorded related to the discontinued operations. Additionally, the Company is in a loss position and has recorded a full valuation allowance for the deferred tax assets associated with the discontinued operations.

 

5.
Property and Equipment

Property and equipment consists of the following at March 31, 2024 and December 31, 2023 (in thousands):

 

 

March 31, 2024

 

 

December 31, 2023

 

 

 

 

 

 

 

 

Building

 

$

1,770

 

 

$

1,770

 

Land

 

 

1,283

 

 

 

1,283

 

Equipment

 

 

8,563

 

 

 

2,683

 

Leasehold improvements

 

 

3,369

 

 

 

179

 

Other1

 

 

332

 

 

 

330

 

Property and equipment

 

 

15,317

 

 

 

6,245

 

Less accumulated depreciation

 

 

(1,015

)

 

 

(669

)

Property and equipment, net

 

$

14,302

 

 

$

5,576

 

 

1.
Property and equipment not placed in service are items that meet the capitalization threshold, or which management believes will meet the threshold at the time of completion and which have yet to be placed into service as of the date of the balance sheets and, therefore, no depreciation expense has been recognized.

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6.
Goodwill and Other Intangible Assets

Goodwill

The carrying amount of goodwill as of both March 31, 2024 and December 31, 2023 was $24.1 million and has been recorded in connection with the Company’s Merger of Viewpoint in February 2023. The Company tests goodwill and indefinite-lived intangible assets for impairment during the fourth quarter of each year, or more frequently should circumstances change or events occur that would more likely than not reduce the fair value of its assets. No testing was deemed necessary during the three months ended March 31, 2024.

 

Other intangible assets, net consists of the following (in thousands):

 

 

March 31, 2024

 

 

Cost

 

 

Accumulated Amortization

 

 

Net Carrying Value

 

Indefinite-lived intangible assets

 

 

 

 

 

 

 

 

 

In-process research and development

 

$

50,000

 

 

$

-

 

 

$

50,000

 

Total

 

$

50,000

 

 

$

-

 

 

$

50,000

 

 

 

December 31, 2023

 

 

Cost

 

 

Accumulated Amortization

 

 

Net Carrying Value

 

Indefinite-lived intangible assets

 

 

 

 

 

 

 

 

 

In-process research and development

 

$

50,000

 

 

$

-

 

 

$

50,000

 

Total

 

$

50,000

 

 

$

-

 

 

$

50,000

 

 

The Company’s IPR&D assets represents the estimated fair value of Viewpoint’s pipeline of radiotherapy product candidates acquired in February 2023. The estimated fair value of the IPR&D assets at the acquisition date was determined using a probability-weighted income approach, which discounts expected future cash flows to present value. The projected cash flow estimates for Viewpoint’s pipeline of radiotherapy product candidates were based on certain key assumptions, including estimates of future revenue and expenses, taking into account the stage of development of the technology at the Merger date and the time and resources needed to complete development.

 

7.
Held-to-Maturity Investments

The following table summarizes the carrying values and fair values of the Company’s financial instruments (in thousands):

 

 

March 31, 2024

 

 

Amortized Cost

 

 

Gross Unrealized Gains

 

 

Gross Unrealized Losses

 

 

Estimated Fair Value
(Level 1)

 

U.S. Treasury Bills

 

$

38,531

 

 

$

-

 

 

$

(12

)

 

$

38,519

 

 

The Company has investments in U.S. Treasury Bills, some of which mature over a period greater than 90 days and are classified as short-term investments. The U.S. Treasury Bills are carried at amortized cost and classified as held-to-maturity as the Company has the intent and the ability to hold them until they mature. The carrying value of the U.S. Treasury Bills are adjusted for accretion of discounts over the remaining life of the investment. Income related to the U.S. Treasury Bills is recognized in interest income in the Company’s condensed consolidated statement of operations. The U.S. Treasury Bills are classified within Level 1 of the fair value hierarchy. Based on its analysis of the held-to-maturity securities, the Company determined the gross unrealized losses were primarily due to changes in interest rates and not due to credit risks. As such, the Company did not record a credit allowance as of March 31, 2024. As of December 31, 2023, the Company had no held-to-maturity investments, and no held-to-maturity investments were presented in cash and cash equivalents on its condensed consolidated balance sheet.

 

8.
Fair Value Measurements

 

Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

 

Level 1 - Observable inputs such as quoted prices in active markets;

 

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Level 2 - Inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-driven valuations in which all significant inputs are observable or can be derived principally from, or corroborated with, observable market data; and

 

Level 3 - Unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

 

Below is a summary of the Company’s cash equivalents and short-term investments that were measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands):

 

 

 

March 31, 2024

 

 

 

Level 1

 

 

Estimated Fair Value

 

Cash equivalents

 

 

 

 

 

 

Money market fund1

 

$

97,620

 

 

$

97,620

 

U.S. Treasury Bills1

 

 

40,362

 

 

 

40,362

 

Total cash equivalents

 

 

137,982

 

 

 

137,982

 

Short-term investments2

 

 

38,519

 

 

 

38,519

 

Total cash equivalents and short-term investments

 

$

176,501

 

 

$

176,501

 

1.
Included within cash and cash equivalents in the condensed consolidated balance sheet.
2.
For additional information related to our short-term investments, see Note 7, Held-to-Maturity Investments.

 

There were no Level 2 or Level 3 financial instruments measured at fair value on a recurring basis at March 31, 2024, and the Company did not have any financial instruments measured at fair value on a recurring basis at December 31, 2023.

 

9.
Share-Based Compensation

The following table presents the share-based compensation expense recognized for all share-based compensation arrangements during the three months ended March 31, 2024 and 2023 (in thousands):

 

 

Three Months Ended March 31,

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

Research and development expenses

 

$

263

 

 

$

155

 

General and administrative expenses

 

 

359

 

 

 

827

 

Total share-based compensation

 

$

622

 

 

$

982

 

 

10.
Commitments and Contingencies

The Company has been in settlement negotiations with a representative for six stockholder plaintiff firms alleging the Company violated Delaware law in its preliminary proxy statement that was disseminated to stockholders in November 2022 for the Company’s annual meeting held in December 2022. Based on these settlement negotiations to date, the Company estimates that it will settle for no more than an aggregate of $0.2 million and, therefore, recorded an estimated liability of $0.2 million as of December 31, 2023. There was no change in the estimate as of March 31, 2024. This balance is included in accrued expenses on the unaudited condensed consolidated balance sheets.

 

11.
Related Parties

 

In connection with the Lantheus Investment Agreement entered into with Lantheus on January 8, 2024, the Company agreed to sell and issue the Lantheus Shares. The number of Lantheus Shares sold was 56,342,355, representing 19.99% of the outstanding shares of Common Stock as of January 8, 2024.

 

On January 8, 2024, the Company entered into the Progenics APA with Progenics, an affiliate of Lantheus, for a purchase price of $8.0 million. On March 1, 2024, the Company closed on the transactions contemplated by the Progenics APA.

 

On March 4, 2024, the Company entered into the March 2024 Investment Agreement in which the Company agreed to issue and sell 92,009,981 of the Company’s Common Stock. Lantheus, a significant shareholder of the Company, purchased part of the shares issued to increase their ownership percentage to approximately 19.9% in the Company following the closing of the March 2024 Investment Agreement on March 6, 2024.

 

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For additional information regarding the Lantheus Investment Agreement, the Progenics APA and the March 2024 Investment Agreement, see Note 3, Investments and Agreements.

 

12.
Leases

The Company accounts for its leases under ASC 842, Leases. The Company acquired a lease from Progenics, an affiliate of Lantheus, for a production facility in Somerset, New Jersey effective on March 1, 2024 (see Asset Purchase Agreement in Note 3, Investments and Agreements, in this Form 10-Q). The lease terminates on November 29, 2028. Upon entering into this lease, the Company recognized a right-of-use asset and lease liability of approximately $0.3 million on the balance sheet based upon the present value of the future base payments discounted at an 8% discount rate using the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment as the lease does not provide an implicit discount rate. The weighted average remaining term and discount rate as of March 31, 2024 was 4.7 years and 8%, respectively.

On July 1, 2023, the Company entered into a lease with Unico Properties LLC for office space in Seattle, Washington that terminates in October 2028. Upon entering into this lease, the Company recognized a right-of-use asset and lease liability of approximately $0.8 million on the balance sheet based upon the present value of the future base payments discounted at an 8% discount rate using the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment as the lease does not provide an implicit discount rate. The weighted average remaining term and discount rate as of March 31, 2024 was 4.6 years and 8%, respectively.

The Company’s operating lease expense for the three months ended March 31, 2024 was de minimis, and there was no operating lease expense for three months ended March 31, 2023.

The following table presents the future operating lease payments and lease liability included on the condensed consolidated balance sheet related to the Company’s operating leases as of March 31, 2024 (in thousands):

 

Year Ending December 31,

 

 

 

2024 (remaining nine months)

 

$

147

 

2025

 

 

329

 

2026

 

 

324

 

2027

 

 

320

 

2028

 

 

283

 

Total

 

 

1,403

 

Less: imputed interest

 

 

(238

)

Total lease liability

 

 

1,165

 

Less current portion