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): March 27, 2024 (March 22, 2024)
PALISADE BIO, INC.
(Exact name of Registrant as Specified in Its Charter)
Delaware | 001-33672 | 52-2007292 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
7750 El Camino Real Suite 2A |
||
Carlsbad, California | 92009 | |
(Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (858) 704-4900
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:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock, par value $0.01 per share | PALI | Nasdaq Capital Market |
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. ☐
Item 2.02 results of Operations and Financial Condition
On March 26, 2024, Palisade Bio, Inc. (the “Company”) reported its financial results for the year ended December 31, 2023. A copy of the press release is attached as Exhibit 99.01 and is incorporated herein by reference.
The information furnished under Items 2.02, including the accompanying Exhibit 99.01 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of such section, nor shall such information be deemed to be incorporated by reference in any subsequent filing by the Company under the Securities Act of 1933 or the Exchange Act, regardless of the general incorporation language of such filing, except as specifically stated in such filing.
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing rule or Standard; Transfer of Listing.
On March 22, 2024, the Company received a notice (the “Notice”) from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”) stating that the Company was not in compliance with the audit committee requirements set forth in Nasdaq Listing Rule 5605.
More specifically, as of the date of the Notice, the audit committee consists of only two (2) members, both of which are “independent directors,” as that term is defined in Nasdaq Listing Rule 5605(a)(2). Per Nasdaq Rules, the audit committee is required to be comprised of three (3) independent directors. The Notice states that, consistent with Nasdaq Listing Rules 5605(b)(1)(A) and Rule 5605(c)(4), Nasdaq will provide the Company a cure period in order to regain compliance (i) until the earlier of the Company’s next annual shareholders’ meeting or March 4, 2025, or (ii) if the next annual shareholders’ meeting is held before September 3, 2024, then the Company must evidence compliance no later than September 3, 2024.
The Notice has no immediate effect on the listing of the Company’s common stock on the Nasdaq Capital Market.
Item 5.07 Submission of Matters to a Vote of Security Holders.
On March 25, 2024, the Company held a virtual special meeting of its shareholders (“Special Meeting”) at 10:00 a.m. Pacific Time. Shareholders of record as of the close of business on February 2, 2024 (“Record Date”) were entitled to vote. As of the Record Date, 12,129,907 shares of the Company’s common stock were issued, outstanding, and entitled to vote, of which 6,583,805 shares of common stock, constituting a quorum, were represented at the meeting, in person or by proxy. The final results of the shareholder vote on the proposal brought before the Special Meeting was as follows:
Proposal 1. The approval of an amendment to the Company’s Amended and Restated Certificate of Incorporation to effect, at the discretion of the Company’s Board of Directors: a reverse split of the Company’s common stock, at a ratio not less than 1-for-2 and not greater than 1-for-15, with the exact ratio to be set within that range at the discretion of the Board of Directors, without further approval or authorization of our shareholders, and to be effected on or before December 31, 2024, was approved by a majority of votes cast at the Special Meeting, based upon the following votes:
Broker | |||||||||||
Votes For | Votes Against | Abstentions | Non-Votes | ||||||||
4,056,142 | 2,488,183 | 39,480 | — |
Item 9.01 Financial Statement and Exhibits.
Exhibit No. | Description | |
99.01 | Press Release dated March 27, 2024 | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
Date: March 27, 2024 | Palisade Bio, Inc. | |
/s/ J.D. Finley | ||
By: | J.D. Finley | |
Chief Executive Officer |
Exhibit 99.01
Palisade Bio Reports Year End 2023 Financial Results and Provides Corporate Update
– Rapid advancement of PALI-2108 towards Phase 1 clinical study for the treatment of moderate-to-severe ulcerative colitis; On track to commence Phase 1 before year end
– Formation of Clinical Advisory Board
– Sufficient cash on hand to execute on business plan and achieve significant clinical milestones into 2025
Carlsbad, CA – March 27, 2024 – Palisade Bio, Inc. (Nasdaq: PALI) (“Palisade”, “Palisade Bio” or the “Company”), a pre-clinical biopharmaceutical company focused on developing and advancing novel therapeutics for patients living with autoimmune, inflammatory, and fibrotic diseases, today reported its financial results for the full year 2023 and provided a corporate update.
Recent Highlights
● | The Company formed its Clinical Advisory Board and appointed preeminent Key Opinion Leaders, Bruce Sands, MD, MS and Florian Rieder, MD; | |
● | The exercise in February 2024, of 3,422,286 previously issued warrants to purchase common stock resulting in gross cash proceeds to the Company of $2.5 million; | |
● | Presentation of positive preclinical data of its lead asset, PALI-2108 at the 2024 Crohn’s & Colitis Congress; and | |
● | Giiant Pharma, Inc., the Company’s joint development partner, received the second milestone payment to assist in funding PALI-2108 from the US Crohn’s and Colitis Foundation, through its IBD Ventures program. |
“2023 was a transformative year for Palisade Bio as we strategically shifted into the autoimmune, inflammatory, and fibrotic disease space, with the focus on our precision medicine approach in inflammatory bowel disease,” commented J.D. Finley, Chief Executive Officer. “As a result of the progress made by our development team, we are on track to launch the Phase 1 study of PALI-2108 by the end of 2024. We are looking forward to the advancement of our lead program to bring our product candidates into clinical trials and to increase our value for all stakeholders.”
PALI-2108 Development Program
The Company continues to advance its lead program, PALI-2108, for the treatment of moderate-to-severe ulcerative colitis (UC) toward a Phase 1 clinical study. PALI-2108 is an orally administered, locally acting colon-specific phosphodiesterase-4 (PDE4) inhibitor prodrug in development for patients affected by UC.
Upcoming Target Milestones
● | Complete ongoing IND/CTA-enabling tox studies by the end of the second quarter of 2024; | |
● | Complete nonclinical IND/CTA-enabling activities by the end of the third quarter of 2024; | |
● | Submit initial IND/CTA prior to the end of 2024; and | |
● | Initiate Phase 1a/b prior to the end of 2024. |
Precision Medicine Approach
Additionally, the Company is in the process of developing a genetic- or biomarker-based precision medicine approach that, if developed, will aid patients and physicians in selecting patients most likely to respond to PDE4 inhibitor therapy with PALI-2108. The Company is working with a strategic collaborator on development and has completed curation of a pipeline including over 1600 UC patients clinical and biomarker data and is in ongoing discussions with potential partners with access to additional patient data to support development of an FDA-approved test. The Company plans to leverage this expertise and infrastructure to fuel a growing pipeline of validated and high-priority autoimmune, inflammatory, and fibrotic disease product candidates.
Summary of Financial Results for the Year Ended December 31, 2023
As of December 31, 2023, the Company had cash, cash equivalents and restricted cash of $12.5 million. The Company believes it has sufficient cash to fund its currently planned operations into the first quarter of 2025.
Net operating loss was $13.1 million for the year ended December 31, 2023 compared to $15.7 million for the year ended December 31, 2022. Included in the net operating loss for the year ended December 31, 2023 was license revenue of $0.3 million, of which there was none in 2022, and restructuring costs of $0.2 million in 2023, compared to restructuring costs of $0.4 million in 2022.
Research and development expenses were $6.9 million for the year ended December 31, 2023, an increase of $0.3 million, or approximately 5% compared to the year ended December 31, 2022. The year-over-year increase is attributable to increased costs associated with the Giiant License Agreement, which we entered into on September 1, 2023, as well an increase in employee-related costs and employee recruiting costs, which were partially offset by a decrease in costs directly related to our development of LB1148, which we ceased in August of 2023.
General and administrative expenses decreased from $8.8 million for the year ended December 31, 2022 to $6.2 million for the year ended December 31, 2023. The decrease of $2.6 million, or 26%, was primarily as a result of cost-saving opportunities implemented by us in the third and fourth quarters of 2022, including those associated with the 2022 Cost-Reduction Plan. General and administrative employee compensation costs for the year ended December 31, 2023 decreased by approximately $1.4 million compared to the year ended December 31, 2022, primarily due to an approximately $0.9 million decrease in salaries and benefits and an approximately $0.5 million decrease in stock-based compensation expense. Other decreases in general and administrative expenses for the year ended December 31, 2023 compared to the year ended December 31, 2022 include: (i) an approximately $0.3 million decrease in professional fees, including accounting and legal fees and financial printing costs, (ii) an approximately $0.3 million decrease in investor and public relations costs and shareholder services costs, (iii) an approximately $0.2 million decrease in consultants and contract labor costs, (iv) an approximately $0.2 million decrease in general and administrative employee recruiting costs, and (v) an approximately $0.2 million decrease in insurance costs.
About Palisade Bio
Palisade Bio is a pre-clinical biopharmaceutical company focused on developing and advancing novel therapeutics for patients living with autoimmune, inflammatory, and fibrotic diseases. The Company believes that by using a targeted approach with its novel therapeutics it will transform the treatment landscape. For more information, please go to www.palisadebio.com.
Forward Looking Statements
This communication contains “forward-looking” statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding the Company’s intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things: the extent of our cash runway; our ability to successfully develop our licensed technologies; estimates about the size and growth potential of the markets for our product candidates, and our ability to serve those markets, including any potential revenue generated; future regulatory, judicial, and legislative changes or developments in the United States (U.S.) and foreign countries and the impact of these changes; our ability to maintain the Nasdaq listing of our securities; our ability to build a commercial infrastructure in the U.S. and other markets; our ability to compete effectively in a competitive industry; our ability to identify and qualify manufacturers to provide API and manufacture drug product; our ability to enter into commercial supply agreements; the success of competing technologies that are or may become available; our ability to attract and retain key scientific or management personnel; the accuracy of our estimates regarding expenses, future revenues, capital requirements and needs for additional financing; our ability to obtain funding for our operations; our ability to attract collaborators and strategic partnerships; and the impact of the COVID-19 pandemic or any global event on our business, and operations, and supply. Any statements contained in this communication that are not statements of historical fact may be deemed to be forward-looking statements. These forward-looking statements are based upon the Company’s current expectations. Forward-looking statements involve risks and uncertainties. The Company’s actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, the Company’s ability to advance its nonclinical and clinical programs, the uncertain and time-consuming regulatory approval process; and the Company’s ability to secure additional financing to fund future operations and development of its product candidates. Additional risks and uncertainties can be found in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”) on March 26, 2024. These forward-looking statements speak only as of the date hereof and the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.
Investor Relations Contact
JTC Team, LLC
Jenene Thomas
833-475-8247
PALI@jtcir.com
Palisade Bio, Inc.
Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share amounts)
December 31, | ||||||||
2023 | 2022 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 12,432 | $ | 12,383 | ||||
Prepaid expenses and other current assets | 896 | 2,350 | ||||||
Total current assets | 13,328 | 14,733 | ||||||
Restricted cash | 26 | 26 | ||||||
Property and equipment, net | 10 | 10 | ||||||
Operating lease right-of-use asset | 198 | 300 | ||||||
Other noncurrent assets | 490 | 694 | ||||||
Total assets | $ | 14,052 | $ | 15,763 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 698 | $ | 1,759 | ||||
Accrued liabilities | 831 | 574 | ||||||
Accrued compensation and benefits | 778 | 486 | ||||||
Current portion of operating lease liability | 121 | 105 | ||||||
Insurance financing debt | 158 | 88 | ||||||
Total current liabilities | 2,586 | 3,012 | ||||||
Warrant liability | 2 | 61 | ||||||
Contingent consideration obligation | 61 | — | ||||||
Operating lease liability, net of current portion | 90 | 211 | ||||||
Total liabilities | 2,739 | 3,284 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Series A Convertible Preferred Stock, $0.01 par value, 7,000,000 shares authorized; 200,000 issued and outstanding at December 31, 2023 and December 31, 2022 |
2 | 2 | ||||||
Common stock, $0.01 par value; 280,000,000 shares authorized; 9,270,894 and 2,944,306 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively |
93 | 30 | ||||||
Additional paid-in capital | 132,724 | 121,637 | ||||||
Accumulated deficit | (121,506 | ) | (109,190 | ) | ||||
Total stockholders’ equity | 11,313 | 12,479 | ||||||
Total liabilities and stockholders’ equity | $ | 14,052 | $ | 15,763 |
Palisade Bio, Inc.
Consolidated Statements of Operations (Unaudited)
(in thousands, except share and per share amounts)
Year Ended December 31, | ||||||||
2023 | 2022 | |||||||
License revenue | $ | 250 | $ | — | ||||
Operating expenses: | ||||||||
Research and development | 6,893 | 6,547 | ||||||
General and administrative | 6,202 | 8,764 | ||||||
Restructuring costs | 225 | 410 | ||||||
Total operating expenses | 13,320 | 15,721 | ||||||
Loss from operations | (13,070 | ) | (15,721 | ) | ||||
Other income (expense): | ||||||||
Interest expense | (15 | ) | (13 | ) | ||||
Other income | 785 | 2,584 | ||||||
Loss on issuance of warrants | — | (1,110 | ) | |||||
Total other income, net | 770 | 1,461 | ||||||
Net loss | $ | (12,300 | ) | $ | (14,260 | ) | ||
Net loss available to common stockholders | $ | (12,316 | ) | $ | (14,548 | ) | ||
Basic and diluted weighted average shares used in computing basic and diluted net loss per common share |
6,840,213 | 880,311 | ||||||
Basic and diluted net loss per common share | $ | (1.80 | ) | $ | (16.53 | ) |
Palisade Bio, Inc.
Consolidated Statements of Cash Flows (Unaudited)
(in thousands, except share and per share amounts)
Year Ended December 31, | ||||||||
2023 | 2022 | |||||||
Net loss | $ | (12,300 | ) | $ | (14,260 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation | 4 | 3 | ||||||
Noncash operating lease expense | 102 | 164 | ||||||
Loss on issuance of warrants | — | 1,110 | ||||||
Fair value of contingent consideration obligation | 204 | — | ||||||
Change in fair value of warrant liabilities | (59 | ) | (2,426 | ) | ||||
Stock-based compensation and related charges | 624 | 1,032 | ||||||
Other | (108 | ) | (233 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Prepaid and other current assets and other noncurrent assets | 705 | 1,027 | ||||||
Accounts payable and accrued liabilities | (492 | ) | 399 | |||||
Accrued compensation | 292 | (25 | ) | |||||
Operating lease liabilities | (105 | ) | (151 | ) | ||||
Net cash used in operating activities | (11,133 | ) | (13,360 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (4 | ) | (10 | ) | ||||
Net cash used in investing activities | (4 | ) | (10 | ) | ||||
Cash flows from financing activities: | ||||||||
Payments on insurance financing debt | (391 | ) | (790 | ) | ||||
Proceeds from issuance of common stock and warrants | 9,419 | 14,401 | ||||||
Proceeds from the exercise of warrants | 2,758 | 2,274 | ||||||
Payment of equity issuance costs | (617 | ) | (627 | ) | ||||
Proceeds from issuance of common stock under Employee Stock Purchase Plan | 17 | — | ||||||
Net cash provided by financing activities | 11,186 | 15,258 | ||||||
Net increase in cash, cash equivalents and restricted cash | 49 | 1,888 | ||||||
Cash, cash equivalents and restricted cash, beginning of year | 12,409 | 10,521 | ||||||
Cash, cash equivalents and restricted cash, end of year | $ | 12,458 | $ | 12,409 | ||||
Reconciliation of cash, cash equivalents and restricted cash to the balance sheets: | ||||||||
Cash and cash equivalents | $ | 12,432 | $ | 12,383 | ||||
Restricted cash | 26 | 26 | ||||||
Total cash, cash equivalents and restricted cash | $ | 12,458 | $ | 12,409 |