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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

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 Number: 001-37718

 

Spring Bank Pharmaceuticals, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

52-2386345

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

35 Parkwood Drive, Suite 210

Hopkinton, MA

01748

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (508473-5993

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

 

Trading

Symbol

 

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

 

SBPH

 

The Nasdaq Stock Market, 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 that 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, 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  

As of August 7, 2020, the registrant had 17,248,545 shares of common stock, $0.0001 par value per share, outstanding.

 

 

 


 

Spring Bank Pharmaceuticals, Inc.

 

INDEX

 

 

 

 

 

PART I. FINANCIAL INFORMATION

Page    

 

Item 1.

Consolidated Financial Statements (Unaudited)

 

 

Consolidated Balance Sheets

3

 

Consolidated Statements of Operations and Comprehensive Loss

4

 

Consolidated Statements of Stockholders’ Equity

5

 

Consolidated Statements of Cash Flows

7

 

Notes to Unaudited Consolidated Financial Statements

8

Item 2.

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

23

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

34

Item 4.

Controls and Procedures

34

 

 

PART II. OTHER INFORMATION

 

Item 1.

Legal Proceedings

35

Item 1A.

Risk Factors

35

Item 6.

Exhibits

39

Exhibit Index

40

Signatures

41

 

 

 

i


 

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, projected costs, prospects, plans and objectives of management, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “design,” “expect,” “seek,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions.

These forward-looking statements include, but are not limited to, statements about:

 

our proposed combination with F-star Therapeutics Limited (“F-star”);

 

our ongoing and planned preclinical studies and clinical trials;

 

preclinical study data and clinical trial data and the timing of results of our ongoing clinical studies and/or trials; and

 

our estimates regarding prospects, strategies, expenses, operating capital requirements, results of operations and needs for additional financing.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. Factors that could cause actual results or events to differ materially from the forward-looking statements that we make include, but are not limited to, the following:

Our proposed business combination with F-star is subject to a number of closing conditions, including a condition requiring our stockholders to approve the issuance of Spring Bank common stock at the closing of the proposed combination, and it may never occur. Even if this proposed combination is completed, the number of shares of our common stock to be issued to the holders of share capital of F-star will be based on an exchange ratio formula that is subject to adjustment based on, among other things, the amount of our net cash upon the closing of the business combination and the amount of proceeds from a concurrent private placement conducted by F-star. This exchange ratio is adjustable not based on the value of our shares of common stock or on the value of the share capital of F-star. The proposed combination also contemplates that our stockholders as of a date prior to the closing of the business combination will receive two separate contingent value rights related to our STING programs. There can be no assurance that our stockholders will ever receive payment pursuant to these rights, and these rights may expire valueless.

We are very early in our development efforts and our product candidates may not be successful in later stage clinical trials. Results obtained in our preclinical studies and clinical trials to date are not necessarily indicative of results to be obtained in future clinical trials. As a result, our product candidates may never be approved as marketable therapeutics.

We rely, and expect to continue to rely, on third parties to conduct our clinical trials and to manufacture our product candidates for preclinical and clinical testing. These third parties may not perform satisfactorily, which could delay our product development activities.

If we are unable to adequately protect our proprietary technology or obtain and maintain issued patents which are sufficient to protect our product candidates, others could compete against us more directly, which would have a material adverse impact on our business, results of operations, financial condition and prospects.

Business interruptions resulting from the coronavirus disease 2019 (COVID-19) outbreak or similar public health crises could cause a disruption of the development of our product candidates and adversely impact our business.

You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. You should also read carefully the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2019 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, as filed with the Securities and Exchange Commission on February 14, 2020 and May 7, 2020, respectively, to better understand the risks and uncertainties inherent in our business and underlying any forward-looking statements. You are advised, however, to consult any further disclosures we make on related subjects in our subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, press releases, and our website. Any forward-looking statements that we make in this Quarterly Report on Form 10-Q speak only as of the date of this Quarterly Report on Form 10-Q, and we undertake no obligation to update such statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect the occurrence of unanticipated events.

2


 

PART I—FINANCIAL INFORMATION

Item 1.

Financial Statements.

SPRING BANK PHARMACEUTICALS, INC.

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share and Per Share Data)

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

ASSETS

 

(unaudited)

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

     Cash and cash equivalents

 

$

8,531

 

 

$

28,709

 

     Marketable securities

 

 

14,990

 

 

 

25,746

 

     Prepaid expenses and other current assets

 

 

2,717

 

 

 

3,522

 

Total current assets

 

 

26,238

 

 

 

57,977

 

     Property and equipment, net

 

 

2,043

 

 

 

2,234

 

     Operating lease right-of-use assets

 

 

2,576

 

 

 

2,717

 

     Restricted cash

 

 

234

 

 

 

234

 

     Other assets

 

 

 

 

 

35

 

Total

 

$

31,091

 

 

$

63,197

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

     Accounts payable

 

$

2,530

 

 

$

2,210

 

     Accrued expenses and other current liabilities

 

 

2,239

 

 

 

2,438

 

     Accrued interest payable

 

 

 

 

 

403

 

     Operating lease liabilities, current

 

 

364

 

 

 

355

 

Total current liabilities

 

 

5,133

 

 

 

5,406

 

     Convertible term loan, net of unamortized discount

 

 

 

 

 

19,070

 

     Warrant liabilities

 

 

38

 

 

 

299

 

     Operating lease liabilities, noncurrent

 

 

2,688

 

 

 

2,869

 

     Other long-term liabilities

 

 

 

 

 

27

 

Total liabilities

 

 

7,859

 

 

 

27,671

 

Commitments and contingencies (Note 11)

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.0001 par value—authorized, 10,000,000 shares at June 30, 2020

     and December 31, 2019; no shares issued or outstanding at June 30, 2020 and

     December 31, 2019

 

 

 

 

 

 

Common stock, $0.0001 par value—authorized, 200,000,000 shares at June 30, 2020

     and December 31, 2019; 17,248,545 and 16,513,763 shares issued and outstanding

     at June 30, 2020 and December 31, 2019, respectively

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

164,118

 

 

 

161,924

 

Accumulated deficit

 

 

(140,887

)

 

 

(126,165

)

Accumulated other comprehensive loss

 

 

(1

)

 

 

(235

)

Total stockholders’ equity

 

 

23,232

 

 

 

35,526

 

Total

 

$

31,091

 

 

$

63,197

 

 

See accompanying notes to consolidated financial statements.

 

 

3


 

SPRING BANK PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(In Thousands, Except Share and Per Share Data)

 

 

 

For the Three Months Ended June 30,

 

 

For the Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

3,204

 

 

$

7,275

 

 

$

8,507

 

 

$

12,842

 

General and administrative

 

 

2,164

 

 

 

2,490

 

 

 

5,043

 

 

 

5,300

 

Total operating expenses

 

 

5,368

 

 

 

9,765

 

 

 

13,550

 

 

 

18,142

 

Loss from operations

 

 

(5,368

)

 

 

(9,765

)

 

 

(13,550

)

 

 

(18,142

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

44

 

 

 

325

 

 

 

285

 

 

 

686

 

Interest expense

 

 

(35

)

 

 

 

 

 

(511

)

 

 

 

Loss on extinguishment of convertible term loan

 

 

(1,207

)

 

 

 

 

 

(1,207

)

 

 

 

Change in fair value of warrant liabilities

 

 

22

 

 

 

4,885

 

 

 

261

 

 

 

7,706

 

Net loss

 

 

(6,544

)

 

 

(4,555

)

 

 

(14,722

)

 

 

(9,750

)

Unrealized gain/(loss) on marketable securities

 

 

157

 

 

 

(97

)

 

 

234

 

 

 

(213

)

Comprehensive loss

 

$

(6,387

)

 

$

(4,652

)

 

$

(14,488

)

 

$

(9,963

)

Net loss per common share - basic and diluted

 

$

(0.38

)

 

$

(0.28

)

 

$

(0.88

)

 

$

(0.59

)

Weighted-average number of shares outstanding - basic and diluted

 

 

17,052,088

 

 

 

16,443,379

 

 

 

16,787,919

 

 

 

16,440,192

 

 

See accompanying notes to consolidated financial statements.

 

 

 


4


 

SPRING BANK PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED JUNE 30, 2020 AND 2019

(In Thousands, Except Share and Per Share Data)

 

For the Three Months Ended

 

Common Stock

 

 

Additional

Paid-in

 

 

Accumulated

 

 

Other

Comprehensive

 

 

Total

Stockholders’

 

June 30, 2020

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

Equity

 

Balance at March 31, 2020

 

 

16,582,444

 

 

$

2

 

 

$

162,771

 

 

$

(134,343

)

 

$

(158

)

 

$

28,272

 

Stock-based compensation

 

 

 

 

 

 

 

 

449

 

 

 

 

 

 

 

 

 

449

 

Issuance of common stock for services rendered

 

 

17,006

 

 

 

 

 

 

25

 

 

 

 

 

 

 

 

 

25

 

Issuance of common stock in connection with

     at-the-market offering, net of issuance costs

 

 

649,095

 

 

 

 

 

 

 

819

 

 

 

 

 

 

 

 

 

 

 

819

 

Convertible term loan warrant amendment

 

 

 

 

 

 

 

 

 

 

54

 

 

 

 

 

 

 

 

 

 

 

54

 

Net unrealized gain on marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

157

 

 

 

157

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(6,544

)

 

 

 

 

 

(6,544

)

Balance at June 30, 2020

 

 

17,248,545

 

 

$

2

 

 

$

164,118

 

 

$

(140,887

)

 

$

(1

)

 

$

23,232

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

Common Stock

 

 

Additional

Paid-in

 

 

Accumulated

 

 

Other

Comprehensive

 

 

Total

Stockholders’

 

June 30, 2019

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

Equity

 

Balance at March 31, 2019

 

 

16,442,532

 

 

$

2

 

 

$

158,928

 

 

$

(107,263

)

 

$

(121

)

 

$

51,546

 

Stock-based compensation

 

 

 

 

 

 

 

 

982

 

 

 

 

 

 

 

 

 

982

 

Issuance of common stock for services rendered

 

 

16,023

 

 

 

 

 

 

59

 

 

 

 

 

 

 

 

 

59

 

Issuance of common stock in connection with

     at-the-market offering, net of issuance costs

 

 

600

 

 

 

 

 

 

 

6

 

 

 

 

 

 

 

 

 

 

 

6

 

Net unrealized loss on marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(97

)

 

 

(97

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(4,555

)

 

 

 

 

 

(4,555

)

Balance at June 30, 2019

 

 

16,459,155

 

 

$

2

 

 

$

159,975

 

 

$

(111,818

)

 

$

(218

)

 

$

47,941

 

 

See accompanying notes to consolidated financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5


 

SPRING BANK PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(In Thousands, Except Share and Per Share Data)

 

For the Six Months Ended

 

Common Stock

 

 

Additional

Paid-in

 

 

Accumulated

 

 

Other

Comprehensive

 

 

Total

Stockholders’

 

June 30, 2020

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

Equity

 

Balance at December 31, 2019

 

 

16,513,763

 

 

$

2

 

 

$

161,924

 

 

$

(126,165

)

 

$

(235

)

 

$

35,526

 

Stock-based compensation

 

 

 

 

 

 

 

 

1,241

 

 

 

 

 

 

 

 

 

1,241

 

Issuance of common stock for services rendered

 

 

43,887

 

 

 

 

 

 

50

 

 

 

 

 

 

 

 

 

50

 

Issuance of common stock in connection with

     at-the-market offering, net of issuance costs

 

 

690,895

 

 

 

 

 

 

 

849

 

 

 

 

 

 

 

 

 

 

 

849

 

Convertible term loan warrant amendment

 

 

 

 

 

 

 

 

 

 

54

 

 

 

 

 

 

 

 

 

 

 

54

 

Net unrealized gain on marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

234

 

 

 

234

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(14,722

)

 

 

 

 

 

(14,722

)

Balance at June 30, 2020

 

 

17,248,545

 

 

$

2

 

 

$

164,118

 

 

$

(140,887

)

 

$

(1

)

 

$

23,232

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended

 

Common Stock

 

 

Additional

Paid-in

 

 

Accumulated

 

 

Other

Comprehensive

 

 

Total

Stockholders’

 

June 30, 2019

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

Equity

 

Balance at December 31, 2018

 

 

16,434,614

 

 

$

2

 

 

$

157,931

 

 

$

(102,068

)

 

$

(5

)

 

$

55,860

 

Stock-based compensation

 

 

 

 

 

 

 

 

1,895

 

 

 

 

 

 

 

 

 

1,895

 

Issuance of common stock for services rendered

 

 

23,941

 

 

 

 

 

 

143

 

 

 

 

 

 

 

 

 

143

 

Issuance of common stock in connection with

     at-the-market offering, net of issuance costs

 

 

600

 

 

 

 

 

 

 

6

 

 

 

 

 

 

 

 

 

 

 

6

 

Net unrealized loss on marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(213

)

 

 

(213

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(9,750

)

 

 

 

 

 

(9,750

)

Balance at June 30, 2019

 

 

16,459,155

 

 

$

2

 

 

$

159,975

 

 

$

(111,818

)

 

$

(218

)

 

$

47,941

 

 

See accompanying notes to consolidated financial statements.

 

 

6


 

SPRING BANK PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In Thousands)

 

 

 

For the Six Months Ended

June 30,

 

 

 

2020

 

 

2019

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(14,722

)

 

$

(9,750

)

Adjustments for:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

191

 

 

 

171

 

Operating lease right-of-use asset amortization

 

 

141

 

 

 

130

 

Change in fair value of warrant liabilities

 

 

(261

)

 

 

(7,706

)

Loss on extinguishment of convertible term loan

 

 

1,207

 

 

 

 

Non-cash interest expense

 

 

77

 

 

 

 

Non-cash investment income (expense)

 

 

(244

)

 

 

72

 

Non-cash stock-based compensation

 

 

1,291

 

 

 

2,013

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

805

 

 

 

(753

)

Other assets

 

 

35

 

 

 

132

 

Accounts payable

 

 

320

 

 

 

(155

)

Accrued expenses and other liabilities

 

 

(629

)

 

 

1,081

 

Operating lease liabilities

 

 

(172

)

 

 

 

Net cash used in operating activities

 

 

(11,961

)

 

 

(14,765

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Proceeds from sale of marketable securities

 

 

32,234

 

 

 

16,787

 

Purchases of marketable securities

 

 

(21,000

)

 

 

(6,000

)

Purchases of property and equipment

 

 

 

 

 

(205

)

Net cash provided by investing activities

 

 

11,234

 

 

 

10,582

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Payment of convertible term loan and prepayment fee

 

 

(20,300

)

 

 

 

Proceeds from issuance of common stock in connection

     with at-the-market offering, net of issuance costs

 

 

849

 

 

 

6

 

Cash (used in) provided by financing activities

 

 

(19,451

)

 

 

6

 

Net decrease in cash, cash equivalents and restricted cash

 

 

(20,178

)

 

 

(4,177

)

Cash, cash equivalents and restricted cash, beginning of period

 

 

28,943

 

 

 

14,958

 

Cash, cash equivalents and restricted cash, end of period

 

$

8,765

 

 

$

10,781

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for taxes

 

$

7

 

 

$

17

 

Cash paid for interest, net

 

$

837

 

 

$

 

 

See accompanying notes to consolidated financial statements.

 

 

7


 

Spring Bank Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements

 

 

1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Spring Bank Pharmaceuticals, Inc. (the “Company”) is a clinical-stage biopharmaceutical company engaged in the discovery and development of novel therapeutics for the treatment of a range of cancers and inflammatory diseases using its proprietary small molecule nucleotide platform. The Company designs its compounds to selectively target and modulate the activity of specific proteins implicated in various disease states. The Company’s internally-developed programs are primarily designed to stimulate and/or dampen immune responses. The Company is devoting its resources to advancing multiple programs in its STING (STimulator of INterferon Genes) product portfolio.

Until January 2020, the Company was also developing inarigivir, an orally-administered investigational selective immunomodulator, as a potential treatment for chronic hepatitis B virus, or HBV. Inarigivir was being evaluated in multiple clinical trials, including the Company’s Phase 2b CATALYST trials, designed to evaluate both treatment-naïve and virally-suppressed non-cirrhotic patients with HBV under multiple dosing regimens. On January 29, 2020, the Company announced that it terminated all clinical development of inarigivir for the treatment of HBV due to the occurrence of unexpected serious adverse events, including one patient death, in the Company’s Phase 2b CATALYST trial.

On July 29, 2020, the Company and F-star Therapeutics Limited (“F-star”) entered into a Share Exchange Agreement (the “Exchange Agreement”) pursuant to which, subject to the satisfaction or waiver of the conditions set forth in the Exchange Agreement, the Company will acquire the entire issued share capital of F-star with F-star continuing as the combined company (the “Exchange”) (see Note 12).

Since its inception in 2002 and prior to its initial public offering (“IPO”) in May 2016, the Company built its technology platform and product candidate pipeline, supported by grants and through private financings. The Company has three wholly owned subsidiaries: Sperovie Biosciences, Inc. formed in September 2015, SBP Securities Corporation formed in December 2016 and SBP International Limited formed in May 2019.

The Company’s success is dependent upon its ability to successfully complete clinical development and obtain regulatory approval of its product candidates, successfully commercialize approved products, generate revenue, and, ultimately, attain profitable operations.

The pandemic caused by an outbreak of a new strain of coronavirus, or the COVID-19 pandemic, that is affecting the U.S. and global economy and financial markets is also impacting the Company’s employees, patients, communities and business operations. The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19, the actions taken to contain it or treat its impact and the economic impact on local, regional, national and international markets. The Company is actively monitoring this situation and the possible effects on its financial condition, liquidity, operations, suppliers, industry, and workforce.

Basis of Presentation and Liquidity

The accompanying consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“U.S. GAAP”).

The accompanying interim financial statements as of June 30, 2020 and for the three and six months ended June 30, 2020 and 2019, and related interim information contained within the notes to the financial statements, are unaudited. In management’s opinion, the unaudited interim consolidated financial statements have been prepared on the same basis as the Company’s audited financial statements and include all adjustments