Greenwich LifeSciences, Inc. — Q1 2021 Form 10-Q
Reporting period: Three months ended March 31, 2021; financial statements are unaudited. Greenwich is a pre-revenue biopharmaceutical company developing GP2, an immunotherapy intended to prevent breast cancer recurrence after surgery.
Key financial metrics
| Metric | Q1 2021 | Q1 2020 / comparison |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $281,977 | $149,891 |
| General and administrative expense | $318,629 | $94,750 |
| Total operating expenses | $600,606 | $244,641 |
| Net loss | $597,008 | $244,641 |
| Basic and diluted loss per share | $0.05 | $0.03 |
| Operating cash flow | $(528,270) | $0 |
| Cash at period end | $30,404,951 | $28,660,375 at Dec. 31, 2020 |
| Total assets | $30,420,275 | $28,676,602 at Dec. 31, 2020 |
| Total liabilities | $673,122 | $1,045,492 at Dec. 31, 2020 |
There is no meaningful revenue margin to report because the company has not generated revenue. The filing does not provide a cash-runway estimate. No outstanding borrowings are reported at quarter-end; the company repaid $275,154 in related-party loans during the quarter.
Changes and notable items
- Net loss increased by $352,367 year over year. R&D expense rose 88%, primarily due to higher cash compensation and manufacturing expense; G&A expense rose 236%, primarily due to costs of raising capital.
- Cash increased by $1.7 million from year-end. Financing provided $2.3 million net, including $2.548 million in net proceeds from the underwriter’s exercise of the follow-on offering’s 70,000-share option. Operating activities used $528,270.
- Common shares outstanding rose from 12,703,541 at December 31, 2020 to 12,846,897 at March 31, 2021. The company reported 12,895,801 shares issued and outstanding as of May 15, 2021.
- Accounts payable and accrued interest of $609,274 included patent and license obligations, GP2 manufacturing costs for the planned Phase III trial, and legal expenses.
Outlook, risks, and controls
- Management planned to commence a Phase III clinical trial in 2021. The filing provides no specific financial guidance or trial-start date.
- The company expects continued losses and significant expenses for the foreseeable future, including clinical development and public-company costs. Management says additional capital will be required for long-term operating needs; future equity or debt financing is not assured.
- The company depends on third-party manufacturers and is obligated under its GP2 license for maintenance fees, milestones, royalties on sales, and patent-cost reimbursement. It reported no material legal proceedings and no off-balance-sheet arrangements.
- Disclosure controls were deemed ineffective at March 31, 2021 because of material weaknesses: inadequate segregation of duties due to limited personnel and insufficient written accounting, IT, financial-reporting, and record-keeping policies. Management was developing a remediation plan.
- Management cited Phase IIb results in the HER2/neu 3+ adjuvant setting: no recurrences were observed after a median five years of follow-up among patients who received six primary injections over six months. This is historical clinical information, not a guarantee of Phase III results.
Important facts for investors to verify
- Whether and when the planned Phase III trial begins, and its design, funding, and enrollment progress.
- Cash burn and expected runway against the company’s stated need for additional long-term capital.
- Progress in remediating the disclosed internal-control material weaknesses.
- Clinical evidence supporting GP2’s efficacy and safety, including the limits of the cited Phase IIb findings.
- Potential future dilution from financing and the 100,870 outstanding warrants, exercisable at $7.1875 per share (or $6.9718 for qualifying cash exercises within the first six months of exercisability).