Business Context and Reporting Period
Company: AntriaBio, Inc. (formerly Fits My Style Inc.)
Filing Date: January 31, 2013 (Report Date)
Event: Completion of a Reverse Merger with AntriaBio Delaware, Inc. ("Antria Delaware").
Business Shift: The Company ceased its prior operations (interactive web service for furnishings) and adopted Antria Delaware's business: a biopharmaceutical company developing sustained-release injectable formulations for diabetes. Antria Delaware is now a wholly-owned subsidiary.
Key Financial Metrics
Revenue: $0. The Company is a development-stage enterprise and has never generated revenue.
Operating Expenses: $770,783 for the nine months ended September 30, 2012 (Antria Delaware).
Interest Expense: $299,642 for the nine months ended September 30, 2012.
Cash on Hand: Approximately $919,000 as of the filing date.
Debt: Aggregate outstanding principal of $3,732,500 in bridge loan notes and convertible notes (8% to 12% interest). $1,437,500 of this debt is payable on demand.
Equity Structure: 40,000,000 shares of common stock issued and outstanding post-merger. 9,000,000 options assumed from Antria Delaware.
Material Changes vs. Prior Period
- Corporate Identity: Changed state of incorporation from Nevada to Delaware; changed name from "Fits My Style Inc." to "AntriaBio, Inc."
- Ownership: Antria Delaware stockholders received 35,284,000 shares (approx. 88.2% of post-merger capital). The former majority shareholder, Tungsten 74, LLC, surrendered 19,890,000 shares for cancellation.
- Asset Acquisition: Acquired all operating and intellectual property assets of PR Pharmaceuticals, Inc. (PRP) out of bankruptcy, including the lead product candidate AB101.
- Management: Complete change in executive leadership. Nevan C. Elam appointed CEO; Sankaram Mantripragada appointed Chief Scientific Officer. Former CEO Nickolay Kukekov resigned from executive role but remains on the Board.
Guidance, Outlook, and Risks
Outlook and Plan of Operation:
- Product Focus: Development of AB101, a once-a-week basal insulin injection for Type 1 and Type 2 diabetes.
- Clinical Timeline: Phase 1 trials planned for initiation in H2 2013 (Russia); Phase 2 trials planned for 4Q 2014. US IND filing expected in 2014; NDA filing targeted for 2017.
- Capital Needs: Anticipates raising $5,000,000 to $10,000,000 in the first half of 2013 to fund operations, hiring, and clinical trials.
Contingent Liabilities:
- Agreed to pay contingent consideration up to $44,000,000 to PRP based on milestones (Phase 2b initiation, licensing, Phase 3 initiation, FDA approval, and sales thresholds).
Risks and Contingencies:
- Going Concern: Substantial doubt exists regarding the ability to continue as a going concern without additional financing.
- Regulatory: No products approved; significant risk of failure in clinical trials or regulatory denial.
- Supply Chain: Reliance on third-party manufacturers; existing supply of AB101 may be insufficient or expired.
- Market: Stock trades on OTC Bulletin Board; limited liquidity and potential "penny stock" restrictions.
Investor Verification Checklist
- Verify the status of the $3,732,500 in convertible debt, specifically the $1,437,500 payable on demand.
- Confirm the timeline and funding status for the planned $5M-$10M capital raise in H1 2013.
- Review the quality and quantity of the acquired AB101 supply from PRP to ensure it is sufficient for preclinical and Phase 1 trials.
- Monitor the contingent payment obligations totaling up to $44M and their impact on future cash flow.
- Assess the progress of the Phase 1 clinical trial initiation in Russia scheduled for H2 2013.