Quarterly report pursuant to Section 13 or 15(d)

Liquidity and Financial Condition

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Liquidity and Financial Condition
3 Months Ended
Oct. 31, 2018
Liquidity And Financial Condition  
Liquidity and Financial Condition

Note 3—Liquidity and Financial Condition

 

The Company has sustained losses in all reporting periods since inception, with an inception-to date-loss of $141.7 million as of October 31, 2018, which raises substantial doubt. Further, the Company has never generated any cash from its operations and does not expect to generate such cash in the near term. Consequently, the Company will need additional capital to continue operating its business and fund its planned operations, including research and development, clinical trials and, if regulatory approval is obtained, commercialization of its product candidates. In addition, the Company will require additional financing if it desires to in-license or acquire new assets, research and develop new compounds or new technologies and pursue related patent protection, or obtain any other intellectual property rights or other assets.

 

As of October 31, 2018, the Company had a cash, cash equivalents and investment securities of $28.5 million. The Company had cash of $9.6 million and cash equivalents of $9.4 million for a total cash and cash equivalent balance of $19.0 million. In addition, the Company had short-term investment securities of $9.5 million. Cash flows from financing activities continued to provide the primary source of our liquidity. Net cash provided by financing activities was $8.3 million during the three months ended October 31, 2018, which was primarily attributable to the net proceeds received from the first tranche in the Alpha Holdings agreement and the exercise of certain stock options (See Note 6 & Note 7).

 

Additionally, subsequent to October 31, 2018, the Company received additional gross proceeds of $7.0 million from the funding of the second tranche in the Alpha Holdings agreement (see Note 11). As of December 6, 2018, the Company had cash, cash equivalents and investment securities of approximately $33.3 million. The Company is anticipating raising additional capital but there can be no assurance that it will be able to do so or if the terms will be favorable.

 

The above financing activities substantially increased the Company’s cash position. As a result, as of the date of the issuance of these condensed consolidated financial statements, the Company believes its current cash position as a result of the Company’s financing activities during the three months ended October 31, 2018 and through December 2018 has alleviated substantial doubt about its ability to sustain operations through at least the next 12 months from the issuance date of the condensed consolidated financial statements.