UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 12,
2019
Edesa Biotech, Inc.
(Exact Name of Registrant as Specified in its Charter)
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British Columbia, Canada
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001-37619
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N/A
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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100 Spy Court
Markham, Ontario, Canada L3R 5H6
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(Address
of Principal Executive Offices)
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(905)
475-1234
Registrant’s
telephone number, including area code
N/A
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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Securities
registered pursuant to Section 12(b) of the Act:
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Title
of each class
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Trading
Symbol(s)
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Name of
exchange on which registered
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Common
Shares
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EDSA
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The
Nasdaq Stock Market LLC
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Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this chapter). 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. ☒
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Item 2.02
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Results of Operations and Financial Condition.
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On
December 12, 2019, Edesa Biotech, Inc. (the “Company”)
issued a press release announcing its financial results for the
nine-month period ended September 30, 2019 (the “Earnings
Release”). The full text of the Earnings Release is attached
hereto as Exhibit 99.1. The information furnished herein and
therein shall not be deemed “filed” for purposes of
Section 18 of the Securities Exchange Act of 1934 (the
“Exchange Act”) or otherwise subject to the liabilities
of that Section, or incorporated by reference in any filing under
the Exchange Act or the Securities Act of 1933, as amended, except
as shall be expressly set forth by specific reference in such a
filing.
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Item 9.01
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Financial Statements and Exhibits.
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(d) Exhibits
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Exhibit No.
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Description
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Press
release issued by Edesa Biotech, Inc. dated December 12,
2019.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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Edesa
Biotech, Inc.
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Date:
December 12, 2019
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By:
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/s/
Kathi Niffenegger
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Name:
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Kathi
Niffenegger
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Title:
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Chief
Financial Officer
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Exhibit
99.1
Edesa Biotech Reports Financial Results for Short Period Fiscal
Year
TORONTO,
ON / ACCESSWIRE / December 12, 2019 / Edesa Biotech, Inc.
(Nasdaq: EDSA), a clinical-stage biopharmaceutical company, today
reported financial results for the nine-month period ended
September 30, 2019 and provided an update on its
business.
Edesa recently enrolled the first patient in a Phase 2b clinical
study of its lead product candidate, EB01. The company is
developing EB01 as a monotherapy for patients with chronic allergic
contact dermatitis (ACD), a debilitating disease that is frequently
caused by allergens present in the workplace. In December, the
company reported that based on positive safety data in healthy
volunteers, the company would expand the study to include ACD
patients with symptoms on the face, a commonly effected area. The
experimental drug previously demonstrated positive results in two
previous studies in ACD patients.
In 2019, Edesa also advanced plans to expand the utility of its
anti-inflammatory technology, which forms the basis of EB01, into
additional indications. This included an approval by Health Canada
to conduct a proof-of-concept study of the company’s product
candidate, EB02, as a treatment for hemorrhoids disease
(HD).
“We have maintained a rapid pace this year and I’m
pleased to report that our team has delivered on our key clinical
and corporate milestones. In addition to the transition we made to
the public equity markets, we laid the foundation for a number of
value creation opportunities in the coming year,” said Dr.
Par Nijhawan, Chief Executive Officer of Edesa. “We are
looking forward to the interim data readout for our Phase 2b study
in ACD as well as initiating a clinical study of our
anti-inflammatory technology in HD.”
Edesa's Chief Financial Officer, Kathi Niffenegger, CPA reported
that operating expenses, including expenditures related to
increased activities for the EB01 clinical program, were largely in
line with management’s expectations for the fiscal year.
“We remain committed to the capital efficient product
development model that Edesa adopted as a private company and plan
to continue to focus our working capital on the advancement of our
clinical pipeline.”
Financial Results for the Nine-Month Period Ended September 30,
2019*
The company’s year-end financial results reflect a nine-month
period as a result of a change in fiscal year following the
company’s reverse acquisition completed in June
2019.
Total revenues for the nine-month period ended September 30, 2019
were $0.41 million, reflecting the initiation of sales of product
inventory obtained in the reverse acquisition completed in June
2019. There were no revenues for the year ended December 31,
2018.
Total operating expenses increased by $1.62 million to $3.24
million for the nine-month period ended September 30, 2019 compared
to $1.62 million for the prior year ended December 31,
2018:
●
Cost
of sales and services was $0.10 million for the nine-month period
ended September 30, 2019, reflecting the initiation of sales of
product inventory obtained in the reverse acquisition. There were
no revenues in the prior year ended December 31, 2018.
●
Research
and development expenses were $1.10 million for the nine-month
period ended September 30, 2019, reflecting greater clinical
research activities related to the initiation of the
company’s Phase 2B clinical study of its EB01 product
candidate as well as higher personnel expenses. Research and
development expenses were $1.08 million for the prior
year.
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General
and administrative expenses were $2.05 million for the nine-month
period ended September 30, 2019, reflecting increased legal and
professional fees related to the company’s reverse
acquisition, increased personnel expenses and public company
expenses, which Edesa did not incur as a privately held company.
General and administrative expenses were $0.54 million for the
prior year.
For the nine-month period ended September 30, 2019, Edesa reported
a net loss of $2.78 million, or $0.55 per basic share, compared to
a net loss of $1.54 million, or $0.47 per basic share, for the
prior year ended December 31, 2018.
Working Capital
At September 30, 2019, the company had working capital of $5.18
million. Cash and cash equivalents totaled $5.03
million.
Calendar
Management will be attending the Dermatology Summit on January 12,
2020 and the Biotech Showcase from January 13-15, 2020. Both events
are being held in San Francisco, California. Members of the
investment or biopharma communities interested in meetings with
management can schedule one-on-ones through the conference online
systems or by contacting Edesa at investors@edesabiotech.com.
*As a result of the acquisition accounting for the business
combination completed on June 7, 2019, and the subsequent change in
year end of the company’s subsidiary Edesa Biotech Research,
Inc., the comparative year-end data represent the nine months
period ended September 30, 2019 and the twelve months ended
December 31, 2018, which should be taken into account when
reviewing comparative results. Financial results for any periods
ended prior to June 7, 2019 reflect the financials of Edesa Biotech
Research, Inc. on a standalone basis.
About Edesa Biotech, Inc.
Edesa Biotech, Inc. (Nasdaq:
EDSA) is a clinical-stage biopharmaceutical company focused on
efficiently developing innovative treatments that address
significant unmet medical needs. Edesa’s lead product
candidate, EB01, is a novel non-steroidal anti-inflammatory
molecule (sPLA2 inhibitor) for the treatment of chronic allergic
contact dermatitis which has demonstrated statistically significant
improvements in multiple clinical studies. A Phase 2b clinical
study of EB01 was initiated in October 2019. Edesa also intends to
expand the utility of its sPLA2 inhibitor technology, which forms
the basis for EB01, across multiple indications and expand its
portfolio with assets that can drive long-term growth
opportunities. The company is based in Markham, Ontario, Canada,
with U.S. offices in Southern California.
Edesa Forward-Looking Statements
This press release may contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements may be identified by the use of
words such as "anticipate," "believe," "plan," "estimate,"
"expect," "intend," "may," "will," "would," "could," "should,"
"might," "potential," or "continue" and variations or similar
expressions, including statements related to: the company’s
plans to expand the utility of its sPLA2 anti-inflammatory
technology into additional indications, including HD. Readers
should not unduly rely on these forward-looking statements, which
are not a guarantee of future performance. There can be no
assurance that forward-looking statements will prove to be
accurate, as all such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause
actual results or future events to differ materially from the
forward-looking statements. Such risks include: the ability of
Edesa to obtain regulatory approval for or successfully
commercialize any of its product candidates, the risk that access
to sufficient capital to fund Edesa’s operations may not be
available or may be available on terms that are not commercially
favorable to Edesa, the risk that Edesa’s product candidates
may not be effective against the diseases tested in its clinical
trials, the risk that Edesa fails to comply with the terms of
license agreements with third parties and as a result loses the
right to use key intellectual property in its business,
Edesa’s ability to protect its intellectual property and the
timing and success of submission, acceptance and approval of
regulatory filings. Many of these factors that will determine
actual results are beyond the company's ability to control or
predict. For a discussion of further risks and uncertainties
related to Edesa's business, please refer to Edesa’s public
company reports filed with the U.S. Securities and Exchange
Commission and the British Columbia Securities Commission. All
forward-looking statements are made as of the date hereof and are
subject to change. Except as required by law, Edesa assumes no
obligation to update such statements.
Contacts
Gary Koppenjan
Edesa Biotech, Inc.
(805) 488-2800
investors@edesabiotech.com
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Edesa
Biotech, Inc.
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Consolidated
Statements of Operations
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Nine-Month
Period Ended
September 30, 2019
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Year Ended
December 31, 2018
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Total Revenues
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$410,870
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$-
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Expenses:
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Cost
of sales
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101,286
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-
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Research
and development
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1,096,426
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1,075,491
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General
and administrative
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2,045,296
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543,155
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Total Expenses
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3,243,008
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1,618,646
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Loss from Operations
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(2,832,138)
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(1,618,646)
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Other Income (Loss)
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55,404
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82,090
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Net Loss
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(2,776,734)
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(1,536,556)
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Exchange
differences on translation
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87,899
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(328,838)
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Net Loss and Comprehensive Loss
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$(2,688,835)
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$(1,865,394)
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Weighted
average number of common shares
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5,036,331
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3,239,902
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Loss
per common share - basic and diluted
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$(0.55)
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$(0.47)
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Edesa
Biotech, Inc.
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Consolidated
Balance Sheets
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September 30, 2019
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December 31, 2018
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Assets:
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Cash
and cash equivalents
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$5,030,583
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$3,367,098
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Other
current assets
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614,123
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23,826
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Noncurrent
assets
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73,058
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7,386
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Total
assets
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$5,717,764
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$3,398,310
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Liabilities and shareholders' equity:
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Accounts
payable and accrued liabilities
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$461,634
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$183,820
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Shareholders'
equity
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5,256,130
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3,214,490
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Total
liabilities and shareholders' equity
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$5,717,764
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$3,398,310
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Edesa
Biotech, Inc.
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Consolidated
Statements of Cash Flows
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Nine-Month
Period Ended
September 30, 2019
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Year Ended
December 31, 2018
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Cash Flows From Operating Activities:
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Net
loss
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$(2,776,734)
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$(1,536,556)
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Items
not affecting cash
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37,681
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82,999
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Changes
in working capital items
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(2,106,734)
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164,727
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Net
cash used in operating activities
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(4,845,787)
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(1,288,830)
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Cash Flows From Investing Activities:
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Cash
acquired from reverse acquisition
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6,389,322
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-
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Net
(purchases) proceeds of property and equipment
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28,646
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(6,869)
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Net
cash provided by (used in) investing activities
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6,417,968
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(6,869)
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Effect
of exchange rate changes on cash and cash equivalents
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91,304
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(337,325)
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Net
change in cash and cash equivalents
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1,663,485
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(1,633,024)
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Cash
and cash equivalents, beginning of period and year
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3,367,098
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5,000,122
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Cash and cash equivalents, end of period and year
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$5,030,583
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$3,367,098
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