Quarterly report pursuant to Section 13 or 15(d)

Liquidity and Financial Condition

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Liquidity and Financial Condition
6 Months Ended
Jan. 31, 2020
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 $187.8 million as of January 31, 2020, which raises substantial doubt. Further, the Company has never generated any cash from its operations and does not expect to generate meaningful 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 January 31, 2020, the Company had cash and cash equivalents of $9.3 million, which consisted of cash of $1.3 million and cash equivalents of $8.0 million. Since inception, cash flows from financing activities has been the primary source of the Company’s liquidity. The Company currently estimates its monthly working capital requirements to be approximately $2.5 million, although the Company may modify or deviate from this estimate and it is likely that the Company’s actual operating expenses and working capital requirements will vary from its estimate.

 

Subsequent to January 31, 2020, the Company received gross proceeds of approximately $30.0 million from the sale of its common stock. The net proceeds, after deducting offering fees and expenses paid by us, were approximately $28.0 million (see Note 11). In addition, the Company received approximately $0.9 million as part of the Australian government’s research and development tax credit program.

 

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 through February 2020 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. 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 of any such raising of additional capital will be favorable to the Company.