UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 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 September 30, 2022

☐ 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 000-22245

SEELOS THERAPEUTICS, INC.

(Exact Name of Registrant as Specified in Its Charter)

Nevada	87-0449967
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

300 Park Avenue, 2nd Floor, New York, NY 10022

(Address of Principal Executive Offices) (Zip Code)

(646) 293-2100

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share	SEEL	The Nasdaq Stock Market LLC

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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth 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 November 4, 2022, 107,168,256 shares of the common stock, par value $0.001, of the registrant were outstanding.

Table of Contents

	PART I.


		PAGE

ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED)	1


ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	21


ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	32


ITEM 4.	CONTROLS AND PROCEDURES	32



	PART II.


ITEM 1.	LEGAL PROCEEDINGS	33


ITEM 1A.	RISK FACTORS	33


ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	68


ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	68


ITEM 4	MINE SAFETY DISCLOSURES	68


ITEM 5.	OTHER INFORMATION	68


ITEM 6.	EXHIBITS	68


SIGNATURES		73

PART I.

ITEM 1. FINANCIAL STATEMENTS

Seelos Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)

		September 30,		December 31,
		2022		2021
Assets
Current assets
Cash	$	30,511	$	78,734
Prepaid expenses and other current assets		9,997		4,727
Total current assets		40,508		83,461
Operating lease right-of-use asset		-		39
Total assets	$	40,508	$	83,500

Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	5,952	$	1,693
Accrued expenses		4,048		3,728
Licenses payable		1,000		200
Short-term portion of convertible notes payable, at fair value		10,655		1,030
Derivative liability		-		1,174
Warrant liabilities, at fair value		232		424
Operating lease liability		-		38
Total current liabilities		21,887		8,287

Convertible notes payable, at fair value		10,742		17,890
Total liabilities		32,629		26,177

Commitments and contingencies (note 12)		-		-

Stockholders’ equity
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued or outstanding as of September 30, 2022 and December 31, 2021		-		-
Common stock, $0.001 par value, 240,000,000 shares authorized, 107,168,256 and 105,500,445 issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		107		105
Additional paid-in-capital		203,859		198,428
Accumulated deficit		(196,087)		(141,210)
Total stockholders’ equity		7,879		57,323
Total liabilities and stockholders’ equity	$	40,508	$	83,500

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Seelos Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss

For the Three and Nine Months Ended September 30, 2022 and 2021

(In thousands, except share and per share data)

(Unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021
Operating expense
Research and development	$	14,750	$	8,683	$	43,115	$	27,103
General and administrative		2,660		2,227		9,544		7,192
Total operating expense		17,410		10,910		52,659		34,295
Loss from operations		(17,410)		(10,910)		(52,659)		(34,295)

Other income (expense)
Interest income		36		39		81		87
Interest expense		(2)		(20)		(14)		(1,593)
Net loss on extinguishment of debt		-		-		-		(2,387)
Gain on forgiveness of debt		-		-		-		149
Change in fair value of convertible notes		(2,137)		-		(2,477)		-
Change in fair value of warrant liabilities		(91)		76		192		(750)
Total other (expense) income		(2,194)		95		(2,218)		(4,494)
Net loss and comprehensive loss	$	(19,604)	$	(10,815)	$	(54,877)	$	(38,789)

Net loss per share basic and diluted	$	(0.18)	$	(0.11)	$	(0.52)	$	(0.45)



Weighted-average common shares outstanding basic and diluted		106,689,924		102,325,238		106,100,413		86,579,881

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Seelos Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

For the Three Months Ended September 30, 2022 and 2021

(In thousands, except share data)

(Unaudited)

					Additional				Total
	Common Stock				Paid-In		Accumulated		Stockholders'
	(Shares)		(Amount)		Capital		Deficit		Equity
Balance as of June 30, 2022	106,190,773	$	106	$	202,604	$	(176,483)	$	26,227
Stock-based compensation expense	-		-		973		-		973
Issuance of common stock for prepaid services	100,000		-		107		-		107
Issuance of common stock for license acquired	500,000		-		-		-		-
Issuance of common stock in at-the-market offering, net of issuance costs	350,000		1		151		-		152
Issuance of common stock, ESPP	27,483		-		24		-		24
Net loss	-		-		-		(19,604)		(19,604)
Balance as of September 30, 2022	107,168,256	$	107	$	203,859	$	(196,087)	$	7,879

					Additional				Total
	Common Stock				Paid-In		Accumulated		Stockholders'
	(Shares)		(Amount)		Capital		Deficit		Equity
Balance as of June 30, 2021	102,271,544	$	102	$	185,732	$	(103,136)	$	82,698
Stock-based compensation expense	-		-		857		-		857
Issuance of common stock, ESPP	39,491		-		74		-		74
Issuance of common stock for conversion of debt	43,664		-		98		-		98
Net loss	-		-		-		(10,815)		(10,815)
Balance as of September 30, 2021	102,354,699	$	102	$	186,761	$	(113,951)	$	72,912

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Seelos Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

For the Nine Months Ended September 30, 2022 and 2021

(In thousands, except share data)

(Unaudited)

Additional

Total

Common Stock

Paid-In

Accumulated

Stockholders'

(Shares)

(Amount)

Capital

Deficit

Equity

Balance as of December 31, 2021

105,500,445

SEC Form 10-Q filed by Seelos Therapeutics Inc.