2024 Q1 Form 10-K Financial Statement

#000121390024020485 Filed on March 06, 2024

View on sec.gov

Income Statement

Concept 2024 Q1 2023 Q4 2023
Revenue $0.00 $1.340M
YoY Change -100.0% -50.43%
Cost Of Revenue
YoY Change
Gross Profit
YoY Change
Gross Profit Margin
Selling, General & Admin $1.783M $2.111M $8.425M
YoY Change 23.22% -32.86% -46.21%
% of Gross Profit
Research & Development $1.179M $1.766M $8.971M
YoY Change -73.37% -75.73% -67.54%
% of Gross Profit
Depreciation & Amortization $56.00K $53.00K $196.0K
YoY Change 51.35% 211.76% 237.93%
% of Gross Profit
Operating Expenses $1.179M $3.877M $8.971M
YoY Change -73.37% -62.8% -67.54%
Operating Profit -$2.962M -$15.77M
YoY Change -43.13% -61.16%
Interest Expense $592.0K $17.17M $2.037M
YoY Change -62.93% 1610.46% -41.35%
% of Operating Profit
Other Income/Expense, Net $5.088M $22.89M
YoY Change 218.6% 8571.97%
Pretax Income $1.534M $13.30M $5.088M
YoY Change -142.48% -252.2% -54.42%
Income Tax $0.00
% Of Pretax Income 0.0%
Net Earnings $1.536M $13.34M $5.525M
YoY Change -142.54% -256.1% -114.63%
Net Earnings / Revenue 412.31%
Basic Earnings Per Share $0.04 $0.14
Diluted Earnings Per Share $0.04 $0.32 $0.14
COMMON SHARES
Basic Shares Outstanding 40.52M shares 40.34M shares 40.32M shares
Diluted Shares Outstanding 41.56M shares 40.57M shares

Balance Sheet

Concept 2024 Q1 2023 Q4 2023
SHORT-TERM ASSETS
Cash & Short-Term Investments $18.94M $119.6M $162.0M
YoY Change -22.59% 193.05% 4.06%
Cash & Equivalents $18.58M $9.055M $9.055M
Short-Term Investments $367.0K $110.6M $153.0M
Other Short-Term Assets $501.0K $537.0K $537.0K
YoY Change -64.79% -61.34% -61.34%
Inventory
Prepaid Expenses
Receivables
Other Receivables
Total Short-Term Assets $177.1M $162.6M $162.6M
YoY Change 14.14% 3.48% 3.48%
LONG-TERM ASSETS
Property, Plant & Equipment $819.0K $873.0K $1.567M
YoY Change -16.17% 7.12% -13.04%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments $25.10M $56.37M $56.37M
YoY Change 827.26% 1982.49% 1982.49%
Other Assets $29.00K $27.00K $27.00K
YoY Change 20.83% 12.5% 12.5%
Total Long-Term Assets $26.56M $57.97M $57.97M
YoY Change 474.45% 1178.78% 1178.78%
TOTAL ASSETS
Total Short-Term Assets $177.1M $162.6M $162.6M
Total Long-Term Assets $26.56M $57.97M $57.97M
Total Assets $203.7M $220.6M $220.6M
YoY Change 27.46% 36.44% 36.44%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $1.267M $1.609M $551.0K
YoY Change -68.75% -61.3% -74.67%
Accrued Expenses $254.0K $267.0K $1.325M
YoY Change 4.96% 8.1% -40.29%
Deferred Revenue
YoY Change
Short-Term Debt $32.03M $51.01M $51.01M
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $33.56M $53.21M $53.21M
YoY Change 574.9% 826.11% 826.11%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00 $0.00
YoY Change
Other Long-Term Liabilities $4.375M $4.444M $4.444M
YoY Change -6.12% -6.24% -6.24%
Total Long-Term Liabilities $4.375M $4.444M $4.444M
YoY Change -6.12% -6.24% -6.24%
TOTAL LIABILITIES
Total Short-Term Liabilities $33.56M $53.21M $53.21M
Total Long-Term Liabilities $4.375M $4.444M $4.444M
Total Liabilities $37.93M $57.66M $56.73M
YoY Change 293.8% 449.86% 477.11%
SHAREHOLDERS EQUITY
Retained Earnings -$156.0M -$157.6M
YoY Change -6.28% -3.39%
Common Stock $322.7M $321.4M
YoY Change 66980.87% 67416.18%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $166.6M $163.8M $163.8M
YoY Change
Total Liabilities & Shareholders Equity $203.7M $220.6M $220.6M
YoY Change 27.46% 36.44% 36.44%

Cashflow Statement

Concept 2024 Q1 2023 Q4 2023
OPERATING ACTIVITIES
Net Income $1.536M $13.34M $5.525M
YoY Change -142.54% -256.1% -114.63%
Depreciation, Depletion And Amortization $56.00K $53.00K $196.0K
YoY Change 51.35% 211.76% 237.93%
Cash From Operating Activities -$1.476M -$1.418M -$10.30M
YoY Change -73.4% -82.41% -63.12%
INVESTING ACTIVITIES
Capital Expenditures $2.000K $3.000K $254.0K
YoY Change -98.99% -99.03% -48.79%
Acquisitions
YoY Change
Other Investing Activities $30.00M $30.00M -$72.78M
YoY Change -330.7% 159.34% -337.03%
Cash From Investing Activities $30.00M $30.00M -$73.04M
YoY Change -327.21% 166.4% -341.76%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $2.428M
YoY Change -77.13%
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -$19.00M -25.00M $51.98M
YoY Change -881.89% -698.8% 382.22%
NET CHANGE
Cash From Operating Activities -$1.476M -1.418M -$10.30M
Cash From Investing Activities $30.00M 30.00M -$73.04M
Cash From Financing Activities -$19.00M -25.00M $51.98M
Net Change In Cash $9.521M 3.579M -$31.41M
YoY Change -158.2% -51.46% -341.46%
FREE CASH FLOW
Cash From Operating Activities -$1.476M -$1.418M -$10.30M
Capital Expenditures $2.000K $3.000K $254.0K
Free Cash Flow -$1.478M -$1.421M -$10.55M
YoY Change -74.29% -83.02% -62.87%

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<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 0.5in"> </td> <td style="width: 0.5in"><b>c.</b></td> <td style="text-align: justify"><b>Use of estimates in the preparation of financial statements</b></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the financial statements date and the reported revenues and expenses during the reporting periods. Actual results could differ from those estimates.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">As applicable to these consolidated financial statements, the most significant estimates and assumptions relate to stock-based compensation and to the investments at fair value (for further details, see note 4).</p>
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<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 0.5in; text-align: justify"> </td> <td style="width: 0.5in; text-align: justify"><b>k.</b></td> <td style="text-align: justify"><b>Concentration of credit risks</b></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">Financial instruments that subject the Company to credit risk consist primarily of cash and cash equivalents, short and long-term deposits, which are deposited in major financial institutions, marketable securities, and the Note (as defined herein). The Company is of the opinion that the credit risk in respect of these balances is remote, except for the Note (as defined herein) for which the credit risk is reflected in its fair value measurement (for further details, see note 4).</p>
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<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 0.5in"> </td> <td style="width: 0.5in"><b>m.</b></td> <td style="text-align: justify"><b>Revenue recognition</b></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><i>HTIT</i></p><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in">On November 30, 2015, the Company entered into a Technology License Agreement, with Hefei Tianhui Incubator of Technologies Co. Ltd. (“HTIT”) and on December 21, 2015, the parties entered into an Amended and Restated Technology License Agreement that was further amended by the parties on June 3, 2016 and July 24, 2016 (the “HTIT License Agreement”).</p><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 1in">As of December 31, 2023, an aggregate amount of $22,382 was allocated to the HTIT License Agreement, all of which were received through the balance sheet date. Through December 31, 2023, the Company recognized revenue associated with this agreement in the aggregate amount of $20,382, of which $1,340 was recognized in the twelve month period ended December 31, 2023, and deferred the remaining amount of $2,000, which is presented as long-term deferred revenues on the consolidated balance sheet.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><i>Medicox</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">On November 13, 2022, the Company entered into a distribution license agreement (“Medicox License Agreement”) with Medicox Co., Ltd. (“Medicox”). The Medicox License Agreement grants Medicox an exclusive license to apply for regulatory approval and distribute ORMD-0801 in the Republic of Korea. For further details, see note 8c.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">Under ASC 606 “Revenue from Contracts with Customers,” the Company identified Medicox as a customer and the Medicox License Agreement as a contract with a customer.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">The Company identified a performance obligation in the Medicox License Agreement to stand-ready and provide Medicox with support in its commercialization efforts in the Republic of Korea. This performance obligation includes a non-distinct distribution license for ORMD-0801, which the Company views a predominant item in the combined performance obligation. The Company concluded that the license is not distinct, as no party other than the Company is capable of providing related services to Medicox, and both the license and related services are necessary for the customer to obtain a regulatory approval in the Republic of Korea. In addition, the agreement covers the terms of future manufacturing services, that are contingent on the completion and success of the commercialization efforts.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">The Medicox License Agreement contains a fixed consideration of $2,000, which was received by the Company during the year ended December 31, 2022 and is currently presented under long-term deferred revenues. It also contains variable consideration of contractual milestone payments and sales-based royalties.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">The Company’s obligation to stand-ready and support Medicox will be recognized on a straight-line basis over the period the Company expects to provide support to Medicox. As of December 31, 2023, this support has not commenced, and no revenue was recognized from the Medicox License Agreement.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">If Medicox proceeds with the regulatory approval process in the Republic of Korea, the Company expects most of the revenue to be recognized at a later stage, going forward. The Company notes that its Phase 3 trial did not meet its primary or secondary endpoints (see note 1a.1). If Medicox chooses to terminate the agreement as a result of the outcome of the Phase 3 trials, the Company will accelerate revenue recognition and recognize it at such time. </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
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CY2023 ormp Description Of License Agreement
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According to the HTIT License Agreement, the Company granted HTIT an exclusive commercialization license in the territory of the People’s Republic of China, Macau and Hong Kong (the “Territory”), related to the Company’s oral insulin capsule, ORMD-0801 (the “Product”). Pursuant to the HTIT License Agreement, HTIT will conduct, at its own expense, certain pre-commercialization and regulatory activities with respect to the Subsidiary’s technology and ORMD-0801 capsule, and will pay to the Subsidiary (i) royalties of 10% on net sales of the related commercialized products to be sold by HTIT in the Territory (“Royalties”), and (ii) an aggregate of $37,500, of which $3,000 was payable immediately, $8,000 will be paid subject to the Company entering into certain agreements with certain third parties, and $26,500 will be paid upon achievement of certain milestones and conditions. In the event that the Company does not meet certain conditions, the Royalties rate may be reduced to a minimum of 8%. Following the final expiration of the Company’s patents covering the technology in the Territory in 2033, the Royalties rate may be reduced, under certain circumstances, to 5%.
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