Immix Biopharma, Inc. — Q2 2022 Form 10-Q
Reporting period: Three and six months ended June 30, 2022. Immix is a clinical-stage biopharmaceutical company developing therapies for cancer and inflammatory diseases; it reported no operating revenue and operates as one business segment.
Financial position and results
| Metric | Q2 2022 / June 30, 2022 | Comparable period / prior year-end |
|---|---|---|
| Revenue | None reported | None reported |
| Operating expenses | $1.561 million | $0.243 million in Q2 2021 |
| Net loss | $1.563 million; $0.11 per share | $0.209 million in Q2 2021; $0.06 per share |
| Six-month net loss | $2.895 million | $1.225 million in H1 2021 |
| Cash and cash equivalents | $18.402 million | $17.644 million at Dec. 31, 2021 |
| Total assets | $19.088 million | $18.192 million at Dec. 31, 2021 |
| Total liabilities | $0.977 million; no note payable outstanding | $0.202 million at Dec. 31, 2021 |
| Stockholders’ equity | $18.111 million | $17.990 million at Dec. 31, 2021 |
| Operating cash flow | $(2.042) million for H1 2022 | $(0.424) million for H1 2021 |
| Financing cash flow | $2.808 million for H1 2022 | $0.147 million for H1 2021 |
Profitability and operating margins are not applicable in the absence of revenue and amid operating losses. The company reported an accumulated deficit of $32.650 million.
Changes and notable items
- Q2 G&A expense rose to $0.953 million from $0.180 million, and R&D expense rose to $0.608 million from $0.063 million. Management attributed increases to public-company and professional costs, officer compensation, stock-based compensation, and the ongoing Phase 1b/2a trial, including CRO and clinical-site costs.
- H1 operating cash use increased to $2.042 million from $0.424 million. The company raised $2.914 million net from the IPO underwriters’ January 2022 over-allotment exercise; it also repaid a $50,000 related-party note and accrued interest.
- During H1, Immix repurchased 37,418 shares for $55,963 under a board-authorized program of up to $1 million, leaving $944,037 authorized at June 30. It also issued 26,315 shares valued at $50,000 for services.
- Q2 2021 included a $90,000 gain from a derivative-liability fair-value change; H1 2021 included a $735,000 loss on that item. No such change was recorded in 2022.
Outlook, risks and contingencies
- Management said cash on hand was expected to fund planned operations through at least August 15, 2023 in the notes; MD&A states at least 12 months from the August 12, 2022 filing date. The company expects continuing losses and negative operating cash flows and says it will need additional funding. No credit facility or committed capital source was reported.
- Management expects R&D costs to increase as development activities expand. Future funding needs depend on clinical progress, trial and manufacturing costs, regulatory requirements, staffing, and other factors. Additional financing may dilute shareholders; unavailable funding could require reductions or delays to programs.
- Key risks include clinical-trial outcomes and timing, regulatory approval, reliance on third-party CROs and suppliers, competition, intellectual-property claims, financing availability, and potential COVID-19-related disruption. The company cautioned that any product revenue, if achieved, is uncertain in timing.
- The filing reports no material pending litigation and no material changes to previously disclosed risk factors. An AxioMx agreement provides for royalties on certain future product sales; none had been paid or accrued through June 30.
- Disclosure controls were deemed ineffective due to a material weakness in financial-reporting controls, including inadequate formal processes for journal-entry processing and review. Management reported remediation efforts but said controls had not operated long enough to establish that the weakness was remediated.
- After quarter-end, the compensation committee approved higher, retroactive executive salaries and potential bonuses and options for the CEO and CFO; the board also approved new non-employee director compensation. The filing reports accrued compensation associated with the executive changes.
Important facts for investors to verify
- Whether the stated cash runway remains adequate given the rising trial and operating expenditures, and when additional financing may be required.
- Clinical-trial progress, enrollment, costs, and any resulting changes to development plans or cash needs.
- Progress and effectiveness of remediation of the disclosed material weakness in internal controls.
- The effects of equity issuance, stock options and warrants, share repurchases, and approved compensation on cash resources and dilution.
- Any subsequent updates to management’s runway estimate, financing plans, or clinical and regulatory outlook.