Filing summary
Entity and period: The supplied filing is Tharimmune, Inc.’s Form 10-Q for the quarter ended September 30, 2023—not a filing for Canton Strategic Holdings, Inc. Tharimmune, formerly Hillstream BioPharma, changed its name and Nasdaq ticker to THAR in September 2023.
Business context and financial results
Tharimmune is a clinical-stage biotechnology company developing candidates for rare, inflammatory and oncologic conditions. It reported no revenue for the three or nine months ended September 30, 2023 or the comparable 2022 periods.
| Metric | Q3 2023 | Q3 2022 | Nine months 2023 | Nine months 2022 |
|---|---|---|---|---|
| Research and development expense | $488,177 | $831,844 | $2,566,910 | $1,595,219 |
| General and administrative expense | $1,356,893 | $1,295,642 | $4,357,154 | $3,520,281 |
| Total operating expenses | $1,845,070 | $2,127,486 | $6,924,064 | $5,115,500 |
| Net loss | $1,820,115 | $2,127,486 | $6,845,317 | $6,706,744 |
| Basic and diluted loss per share | $0.11 | $0.18 | $0.47 | $0.60 |
At September 30, 2023, cash was $2.69 million, total current assets were $3.17 million, current liabilities were $1.41 million, and stockholders’ equity was $1.76 million. Cash was $6.51 million and equity $5.54 million at December 31, 2022. Nine-month operating cash use was $5.88 million, compared with $5.67 million in 2022; financing provided $2.06 million, compared with $13.26 million in 2022. The company reported $1.41 million in total liabilities, including an $81,040 insurance-premium financing liability; it reported no other debt balance at period end.
Changes and management commentary
- Q3 operating expenses fell 13.3% year over year, mainly as R&D costs declined 41.3% after HSB-1216 was placed on hold/deprioritized. Q3 net loss narrowed 14.4%.
- For the first nine months, operating expenses rose 35.4% and net loss increased 2.1%. R&D growth reflected preclinical work, manufacturing scale-up, regulatory review and collaboration costs; G&A growth included investor-relations, legal and accounting expenses.
- Interest expense fell substantially year over year because 2022 included a large noncash debt-discount charge tied to the IPO. Interest income in 2023 was $94,898 for the nine-month period.
- The May 2023 public offering generated approximately $2.1 million in net proceeds. Common shares issued increased to 17,602,665 at quarter end from 11,604,970 at year end; 17,511,839 shares were outstanding on November 6, 2023.
Outlook, risks and unusual items
- Going concern: Management concluded that recurring operating losses, negative operating cash flows and available resources raise substantial doubt about the company’s ability to continue as a going concern for at least one year after the financial statements are issued. It says substantial additional funding is needed; there is no assurance financing will be available on acceptable terms or in time. The filing does not provide a clear cash-runway estimate.
- Development outlook: The company expects R&D and G&A expenses to increase. It plans to advance TH3215 and anticipates TH0059 and TH1940 entering IND-enabling studies in 2024. TH104’s IND was FDA-approved in February 2023. These are plans, not assurances of clinical or regulatory success.
- Post-quarter license: On November 3, 2023, Tharimmune entered an exclusive, sublicensable worldwide license agreement for TH104 and TH103. Terms include an undisclosed mid-six-figure upfront fee, further mid-six-figure fees in quarterly installments, up to $24.25 million in development milestones, sales milestones and royalties. The license creates significant potential future payment obligations.
- Controls: Management determined disclosure controls and procedures were not effective at September 30, 2023, citing weaknesses in segregation of duties and technical accounting review expertise. Remediation efforts include quarterly contract reviews and use of third-party accounting experts.
- Key risks: The business depends on additional capital, clinical and regulatory progress, third-party suppliers and collaborators, and protection and commercialization of intellectual property. The filing reported no known legal proceedings expected to have a material adverse effect and no material changes to previously disclosed risk factors.
Important facts for investors to verify
- Confirm the filing’s identity: it is Tharimmune’s 10-Q, despite the request metadata naming Canton Strategic Holdings.
- Review subsequent financing and cash-burn disclosures, given the going-concern warning and $2.69 million quarter-end cash balance.
- Check the full Avior license terms and the timing and affordability of upfront, milestone, sales-based and royalty payments.
- Track clinical and IND-enabling progress for TH104, TH3215, TH0059 and TH1940, including whether the stated 2024 plans are achieved.
- Monitor dilution, including shares issued for offerings and services, outstanding options and warrants, and the later-effective 2023 equity plan.
- Assess whether management’s remediation actions resolve the disclosed material weaknesses in financial reporting controls.