SEC Filing | Vistagen Therapeutics, Inc

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vtgn20211231_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

(Mark One)

☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 001-37761

VistaGen Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

Nevada

20-5093315

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

343 Allerton Avenue

South San Francisco, CA 94080

(Address of principal executive offices including zip code)

(650) 577-3600

(Registrant’s telephone number, including area code)

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 $0.001 per share	VTGN	Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-Accelerated filer	☐	Smaller reporting company	☒
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of February 9, 2022, 206,527,955 shares of the registrant’s common stock, $0.001 par value, were issued and outstanding.

Table of Contents

VistaGen Therapeutics, Inc.

Quarterly Report on Form 10-Q

for the Quarter Ended December 31, 2021

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets at December 31, 2021 and March 31, 2021	1
Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended December 31, 2021 and 2020	2
Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 2021 and 2020	3
Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the nine months ended December 31, 2021 and 2020	4
Notes to the Condensed Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 4. Controls and Procedures	37

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	39
Item 1A. Risk Factors	39
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	72
Item 3. Defaults Upon Senior Secured Securities	72
Item 6. Exhibits	72

SIGNATURES	73

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)

VISTAGEN THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in Dollars, except share amounts)

	December 31,			March 31,
	2021			2021
	(unaudited)			(Note 2)
ASSETS
Current assets:
Cash and cash equivalents	$	83,700,200		$	103,108,300
Receivable from collaboration partner		-			40,600
Prepaid expenses and other current assets		2,936,600			835,100
Deferred contract acquisition costs - current portion		133,500			133,500
Total current assets		86,770,300			104,117,500
Property and equipment, net		452,800			367,400
Right of use asset - operating lease		2,756,800			3,219,600
Deferred offering costs		321,800			294,900
Deferred contract acquisition costs - non-current portion		133,500			234,100
Security deposits		100,900			47,800
Total assets	$	90,536,100		$	108,281,300

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,948,700		$	838,300
Accrued expenses		2,627,500			1,562,700
Deferred revenue - current portion		1,420,200			1,420,200
Operating lease obligation - current portion		424,100			364,800
Financing lease obligation - current portion		300			3,000
Total current liabilities		6,420,800			4,189,000

Non-current liabilities:
Accrued dividends on Series B Preferred Stock		-			6,272,700
Deferred revenue - non-current portion		1,420,300			2,490,300
Operating lease obligation - non-current portion		2,717,200			3,350,800
Total non-current liabilities		4,137,500			12,113,800
Total liabilities		10,558,300			16,302,800

Commitments and contingencies (Note 10)

Stockholders’ equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized at December 31, 2021 and March 31, 2021:
Series A Preferred, 500,000 shares authorized at December 31, 2021 and March 31, 2021; no shares and 500,000 shares issued and outstanding at December 31, 2021 and March 31, 2021, respectively		-			500
Series B Preferred; 4,000,000 shares authorized at December 31, 2021 and March 31, 2021; no shares and 1,131,669 shares issued and outstanding at December 31, 2021 and March 31, 2021, respectively		-			1,100
Series C Preferred; 3,000,000 shares authorized at December 31, 2021 and March 31, 2021; no shares and 2,318,012 shares issued and outstanding at December 31, 2021 and March 31, 2021, respectively		-			2,300
Series D Preferred; 2,000,000 shares authorized at December 31, 2021 and March 31, 2021; no shares and 402,149 shares issued and outstanding at December 31, 2021 and March 31, 2021, respectively		-			400
Common stock, $0.001 par value; 325,000,000 shares authorized at December 31, 2021 and March 31, 2021; 206,644,870 shares and 180,751,234 shares issued at December 31, 2021 and March 31, 2021, respectively		206,600			180,800
Additional paid-in capital		334,655,000			315,603,100
Treasury stock, at cost, 135,665 shares of common stock held at December 31, 2021 and March 31, 2021		(3,968,100	)		(3,968,100	)
Accumulated deficit		(250,915,700	)		(219,841,600	)
Total stockholders’ equity		79,977,800			91,978,500
Total liabilities and stockholders’ equity	$	90,536,100		$	108,281,300

See accompanying notes to Condensed Consolidated Financial Statements.

Table of Contents

VISTAGEN THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(Amounts in dollars, except share amounts)

	Three Months Ended December 31,						Nine Months Ended December 31,
	2021			2020			2021			2020
Sublicense revenue	$	357,900		$	313,600		$	1,070,000		$	647,600
Total revenues		357,900			313,600			1,070,000			647,600
Operating expenses:
Research and development		7,966,800			3,496,100			23,637,100			7,585,500
General and administrative		2,931,300			2,116,800			8,518,800			4,776,900
Total operating expenses		10,898,100			5,612,900			32,155,900			12,362,400
Loss from operations		(10,540,200	)		(5,299,300	)		(31,085,900	)		(11,714,800	)
Other income (expenses), net:
Interest income (expense), net		5,100			600			15,300			(6,500	)
Other income		-			-			-			600
Loss before income taxes		(10,535,100	)		(5,298,700	)		(31,070,600	)		(11,720,700	)
Income taxes		-			-			(3,400	)		(2,600	)
Net loss and comprehensive loss	$	(10,535,100	)	$	(5,298,700	)	$	(31,074,000	)	$	(11,723,300	)
Accrued dividends on Series B Preferred stock		(208,100	)		(353,600	)		(945,100	)		(1,036,600	)

Net loss attributable to common stockholders	$	(10,743,200	)	$	(5,652,300	)	$	(32,019,100	)	$	(12,759,900	)

Basic and diluted net loss attributable to common stockholders per common share	$	(0.05	)	$	(0.07	)	$	(0.16	)	$	(0.19	)

Weighted average shares used in computing basic and diluted net loss attributable to common stockholders per common share		202,328,683			81,086,105			195,179,267			66,551,962

See accompanying notes to Condensed Consolidated Financial Statements.

Table of Contents

VISTAGEN THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Amounts in Dollars)

	Nine Months Ended December 31,
	2021			2020
Cash flows from operating activities:
Net loss	$	(31,074,000	)	$	(11,723,300	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		114,900			77,300
Stock-based compensation		2,078,700			1,815,900
Amortization of operating lease right of use asset		462,800			267,500
Change in operating lease liability		(574,300	)		(230,700	)
Expense related to write-off of deferred offering costs		232,000			-
Changes in operating assets and liabilities:
Receivable from collaboration partner		40,600			-
Prepaid expenses and other current assets		(2,101,500	)		(200	)
Security deposits		(53,100	)		-
Deferred sublicense revenue, net of deferred contract acquisition costs		(969,400	)		4,068,300
Accounts payable and accrued expenses		2,175,300			(1,066,400	)
Net cash used in operating activities		(29,668,000	)		(6,791,600	)

Cash flows from property and investing activities:
Purchases of laboratory and other equipment		(200,300	)		(249,900	)
Net cash used in investing activities		(200,300	)		(249,900	)

Cash flows from financing activities:
Net proceeds from issuance of common stock and Series D Preferred stock		-			93,675,100
Net proceeds from issuance of common stock and warrants, including option exercises		215,500			12,974,900
Net proceeds from exercise of warrants		6,207,400			808,500
Net proceeds from sale of common stock under At the Market (ATM) facility, including expenses treated as deferred offering costs		4,040,100			-
Net proceeds from sale of common stock under equity line		-			2,841,600
Proceeds from issuance of note under Payroll Protection Plan		-			224,400
Repayment of capital lease obligations		(2,800	)		(2,400	)
Repayment of notes payable, including Payroll Protection Plan note		-			(504,600	)
Net cash provided by financing activities		10,460,200			110,017,500
Net increase (decrease) in cash and cash equivalents		(19,408,100	)		102,976,000
Cash and cash equivalents at beginning of period		103,108,300			1,355,100
Cash and cash equivalents at end of period	$	83,700,200		$	104,331,100

Supplemental disclosure of noncash activities:
Insurance premiums settled by issuing note payable	$	-		$	322,200
Accrued dividends on Series B Preferred	$	945,100		$	1,036,600
Accrued dividends on Series B Preferred settled upon conversion by issuance of common stock	$	7,217,800		$	124,600

See accompanying notes to Condensed Consolidated Financial Statements.

VISTAGEN THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE NINE MONTHS ENDED DECEMBER 31, 2021 AND 2020

(Unaudited)

(Amounts in Dollars, except share amounts)

	Series A Preferred Stock				Series B Preferred Stock						Series C Preferred Stock				Series D Preferred Stock				Common Stock				Additional Paid-in			Treasury			Accumulated			Total Stockholders’
	Shares		Amount		Shares			Amount			Shares		Amount		Shares		Amount		Shares		Amount		Capital			Stock			Deficit			Equity (Deficit)

Balances at March 31, 2020		500,000	$	500		1,160,240		$	1,200			2,318,012	$	2,300		-	$	-		49,348,707	$	49,300	$	200,092,800		$	(3,968,100	)	$	(201,907,400	)	$	(5,729,400	)

Proceeds from sale of units of common stock and warrants for cash in private placement		-		-		-			-			-		-		-		-		125,000		200		49,800			-			-			50,000
Net proceeds from sale of common stock under equity line		-		-		-			-			-		-		-		-		6,201,995		6,200		2,741,300			-			-			2,747,500
Issuance of common stock at fair value for professional services		-		-		-			-			-		-		-		-		233,645		200		124,800			-			-			125,000
Sale of common stock pursuant to 2019 Employee Stock Purchase Plan		-		-		-			-			-		-		-		-		28,125		-		12,600			-			-			12,600
Expenses related to S-3 registration statement for warrant shares		-		-		-			-			-		-		-		-		-		-		(29,400	)		-			-			(29,400	)
Accrued dividends on Series B Preferred stock		-		-		-			-			-		-		-		-		-		-		(335,800	)		-			-			(335,800	)
Stock-based compensation expense		-		-		-			-			-		-		-		-		-		-		674,600			-			-			674,600

Net loss for the quarter ended June 30, 2020		-		-		-			-			-		-		-		-		-		-		-			-			(3,126,800	)		(3,126,800	)

Balances at June 30, 2020		500,000		500		1,160,240			1,200			2,318,012		2,300		-		-		55,937,472		55,900		203,330,700			(3,968,100	)		(205,034,200	)		(5,611,700	)

Net proceeds from sale of common stock in public offering		-		-		-			-			-		-		-		-		17,868,250		17,900		12,887,200			-			-			12,905,100
Net proceeds from exercise of warrants		-		-		-			-			-		-		-		-		228,000		200		113,800			-			-			114,000
Net proceeds from sale of common stock under equity line		-		-		-			-			-		-		-		-		100,000		100		49,200			-			-			49,300
Accrued dividends on Series B Preferred stock		-		-		-			-			-		-		-		-		-		-		(347,200	)		-			-			(347,200	)
Stock-based compensation expense		-		-		-			-			-		-		-		-		-		-		410,900			-			-			410,900

Net loss for the quarter ended September 30, 2020		-		-		-			-			-		-		-		-		-		-		-			-			(3,297,800	)		(3,297,800	)

Balances at September 30, 2020		500,000		500		1,160,240			1,200			2,318,012		2,300		-		-		74,133,722		74,100		216,444,600			(3,968,100	)		(208,332,000	)		4,222,600

Net proceeds from sale of common stock and Series D Preferred stock in public offering		-		-		-			-			-		-		2,000,000		2,000		63,000,000		63,000		93,582,900			-			-			93,647,900
Net proceeds from exercise of warrants		-		-		-			-			-		-		-		-		1,447,782		1,400		722,500			-			-			723,900
Accrued dividends on Series B Preferred stock		-		-		-			-			-		-		-		-		-		-		(353,600	)		-			-			(353,600	)
Stock-based compensation expense		-		-		-			-			-		-		-		-		-		-		730,400			-			-			730,400
Conversion of Series B Preferred stock to common and payment of accrued dividends in common stock		-		-		(28,571	)		(100	)		-		-		-		-		188,633		200		124,500			-			-			124,600
Sale of common stock pursuant to 2019 Employee Stock Purchase Plan		-		-		-			-			-		-		-		-		30,000		100		13,500			-			-			13,600
Net loss for the quarter ended December 31, 2020		-		-		-			-			-		-		-		-		-		-		-			-			(5,298,700	)		(5,298,700	)

Balances at December 31, 2020		500,000	$	500		1,131,669		$	1,100			2,318,012	$	2,300		2,000,000	$	2,000		138,800,137	$	138,800	$	311,264,800		$	(3,968,100	)	$	(213,630,700	)	$	93,810,700

(continued)

Table of Contents

VISTAGEN THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) Continued

FOR THE NINE MONTHS ENDED DECEMBER 31, 2021 AND 2020

(Unaudited)

(Amounts in Dollars, except share amounts)

	Series A Preferred Stock						Series B Preferred Stock						Series C Preferred Stock						Series D Preferred Stock						Common Stock				Additional Paid-in			Treasury			Accumulated			Total Stockholders’
	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount			Shares		Amount		Capital			Stock			Deficit			Equity (Deficit)

Balances at March 31, 2021		500,000		$	500			1,131,669		$	1,100			2,318,012		$	2,300			402,149		$	400			180,751,234	$	180,800	$	315,603,100		$	(3,968,100	)	$	(219,841,600	)	$	91,978,500
Accrued dividends on Series B Preferred		-			-			-			-			-			-			-			-			-		-		(361,800	)		-			-			(361,800	)
Stock-based compensation expense (including ESPP)		-			-			-			-			-			-			-			-			-		-		590,400			-			-			590,400
Proceeds from exercise of warrants		-			-			-			-			-			-			-			-			1,516,768		1,500		1,108,200			-			-			1,109,700
Conversion of Series D Preferred stock into common stock		-			-			-			-			-			-			(402,149	)		(400	)		9,249,427		9,200		(8,800	)		-			-			-
Sale of common stock pursuant to 2019 Employee Stock Purchase Plan		-			-			-			-			-			-			-			-			16,251		-		31,600			-			-			31,600
Issuance of common stock upon cashless exercise of options		-			-			-			-			-			-			-			-			82,504		100		-			-			-			100
Issuance of common stock upon exercise of options for cash		-			-			-			-			-			-			-			-			15,824		-		12,900			-			-			12,900

Net loss for quarter ended June 30, 2021		-			-			-			-			-			-			-			-			-		-		-			-			(7,744,600	)		(7,744,600	)
Balances at June 30, 2021		500,000			500			1,131,669			1,100			2,318,012			2,300			-			-			191,632,008		191,600		316,975,600			(3,968,100	)		(227,586,200	)		85,616,800

Accrued dividends on Series B Preferred		-			-			-			-			-			-			-			-			-		-		(375,200	)		-			-			(375,200	)
Stock-based compensation expense (including ESPP)		-			-			-			-			-			-			-			-			-		-		764,500			-			-			764,500
Proceeds from exercise of warrants		-			-			-			-			-			-			-			-			3,297,777		3,300		3,141,800			-			-			3,145,100
Net proceeds from issuance of common stock under ATM facility		-			-			-			-			-			-			-			-			1,502,378		1,500		4,256,300			-			-			4,257,800
Issuance of common stock upon cashless exercise of options		-			-			-			-			-			-			-			-			43,622		-					-			-			-
Issuance of common stock upon exercise of options for cash		-			-			-			-			-			-			-			-			83,000		100		45,000			-			-			45,100

Net loss for quarter ended September 30, 2021		-			-			-			-			-			-			-			-			-		-		-			-			(12,794,400	)		(12,794,400	)

Balances at September 30, 2021		500,000			500			1,131,669			1,100			2,318,012			2,300			-			-			196,558,785		196,500		324,808,000			(3,968,100	)		(240,380,600	)		80,659,700

Accrued dividends on Series B Preferred		-			-			-			-			-			-			-			-			-		-		(208,100	)		-			-			(208,100	)
Stock-based compensation expense (including ESPP)		-			-			-			-			-			-			-			-			-		-		723,800			-			-			723,800
Proceeds from exercise of warrants		-			-			-			-			-			-			-			-			2,484,246		2,500		1,950,100			-			-			1,952,600
Net proceeds from issuance of common stock under ATM facility		-			-			-			-			-			-			-			-			15,420		-		41,300			-			-			41,300
Conversion of Series C Preferred into common stock		-			-			-			-			(2,318,012	)		(2,300	)		-			-			2,318,012		2,300		-			-			-			-
Conversion of Series B Preferred into common stock, including common stock issued in payment of accrued dividends		-			-			(1,131,669	)		(1,100	)		-			-			-			-			4,427,447		4,400		7,214,500			-			-			7,217,800
Conversion of Series A Preferred into common stock		(500,000	)		(500	)		-			-			-			-