MDRNA Inc. (MRNA, Financial) filed Quarterly Report for the period ended 2010-03-31.
Mdrna Inc. has a market cap of $56.09 million; its shares were traded at around $1.15 with and P/S ratio of 3.81. MRNA is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Our financing activities provided cash of approximately $6.6 million in the quarter ended March 31, 2010 compared to using cash of approximately $3.7 million in the quarter ended March 31, 2009. Changes in cash from financing activities are primarily due to issuance of common stock and warrants, proceeds and repayment of equipment financing facilities and notes payable and proceeds from exercises of stock options and warrants. In January 2010, we raised net proceeds of approximately $4.9 million through an offering of shares of common stock and warrants to purchase shares of common stock and approximately $1.0 million of the proceeds were used to pay off notes payable in January 2010. We also received proceeds of approximately $2.6 million from the exercise of warrants during the first quarter of 2010. In the quarter ended March 31, 2009, our financing activities consisted of paying down our note payable with GECC by approximately $3.7 million.
On March 31, 2010, in connection with the execution of the Cequent Merger Agreement, we entered into a Loan Agreement with Cequent pursuant to which, among other things, Cequent shall extend to us one or more loans in the aggregate principal amount of up to $3.0 million to fund our operations prior to the proposed merger. On April 30, 2010, Cequent loaned us $1.0 million under the Loan Agreement. The loans are evidenced by a secured promissory note, issued by us to Cequent, which bears interest absent an event of default, at a rate of ten percent per annum. We shall repay the principal and interest of the loans in three equal consecutive monthly installments, commencing on August 15, 2010 and continuing on the 15th day of each month thereafter through and including October 15, 2010. Notwithstanding the foregoing, if the proposed merger is consummated prior to August 15, 2010, then, on the closing date of the merger, we shall not owe to any third party any obligations with respect to the loans, including, without limitation, the then outstanding principal balance of the loans and any interest then accrued but unpaid thereon.
Interest and other expense. We incurred interest expense on our notes payable and, in 2009, on our capital lease obligations. Interest and other expense was approximately $0.8 million in the quarter ended March 31, 2010 compared to $0.1 million in the same period of 2009. Although the average borrowings were lower in 2010, the 2010 expense amount increased over the prior year period due to amortization of debt issuance costs and non-cash amortization of the fair value of the warrants issued in connection with the 2009 notes payable, which were recorded as debt discount. We expect interest and other expense to continue to increase in 2010 as a result the Loan Agreement with Cequent.
Change in fair value liability for price adjustable warrants. We use the Black-Scholes-Merton option pricing model as our method of valuation for price adjustable warrants. The fair value liability is revalued each balance sheet date utilizing Black-Scholes-Merton valuation model computations with the decrease or increase in fair value being reported in the statement of operations as other income or expense, respectively. The change in fair value liability for price adjustable warrants was a net expense of approximately $2.7 million in the quarter ended March 31, 2010, compared to a net expense of approximately $1.0 million in the same period of 2009. The increase in expense for the quarter ended March 31, 2010 compared to the 2009 period is due primarily to an increase in the number of warrants outstanding for the 2010 period.
Gain on settlement of liabilities, net. In the three months ended March 31, 2009 we recorded a net gain on settlement of liabilities of approximately $0.7 million. This included a gain of approximately $0.7 million relating to the amendment of our agreement regarding severance obligations with our former Chief Scientific Officer. In addition, we recorded a gain of approximately $0.2 million related to the issuance of shares of stock valued at approximately $0.4 million to eight of our vendors to settle amounts due to these vendors of approximately $0.6 million in total. These gain amounts were partially offset by a lease termination fee of approximately $0.2 million incurred pursuant to the termination of our lease agreement with GECC and subsequent refinance of the amounts due under our Loan and Security Agreement with GECC. We did not record any gains or losses on settlement of liabilities in 2010.
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Mdrna Inc. has a market cap of $56.09 million; its shares were traded at around $1.15 with and P/S ratio of 3.81. MRNA is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
At March 31, 2010 we had a working capital deficit (current assets less current liabilities) of $1.0 million and approximately $3.8 million in cash, including approximately $1.2 million in restricted cash. On March 31, 2010, in connection with the execution of the Cequent Merger Agreement, we entered into a Loan Agreement with Cequent pursuant to which, among other things, Cequent shall extend to us one or more loans in the aggregate principal amount of up to $3.0 million to fund our operations prior to the proposed merger. On April 30, 2010, Cequent loaned us $1.0 million under the Loan Agreement. We believe that our current resources, including the loans from Cequent, will be sufficient to fund our planned operations into the third quarter of 2010.Our financing activities provided cash of approximately $6.6 million in the quarter ended March 31, 2010 compared to using cash of approximately $3.7 million in the quarter ended March 31, 2009. Changes in cash from financing activities are primarily due to issuance of common stock and warrants, proceeds and repayment of equipment financing facilities and notes payable and proceeds from exercises of stock options and warrants. In January 2010, we raised net proceeds of approximately $4.9 million through an offering of shares of common stock and warrants to purchase shares of common stock and approximately $1.0 million of the proceeds were used to pay off notes payable in January 2010. We also received proceeds of approximately $2.6 million from the exercise of warrants during the first quarter of 2010. In the quarter ended March 31, 2009, our financing activities consisted of paying down our note payable with GECC by approximately $3.7 million.
On March 31, 2010, in connection with the execution of the Cequent Merger Agreement, we entered into a Loan Agreement with Cequent pursuant to which, among other things, Cequent shall extend to us one or more loans in the aggregate principal amount of up to $3.0 million to fund our operations prior to the proposed merger. On April 30, 2010, Cequent loaned us $1.0 million under the Loan Agreement. The loans are evidenced by a secured promissory note, issued by us to Cequent, which bears interest absent an event of default, at a rate of ten percent per annum. We shall repay the principal and interest of the loans in three equal consecutive monthly installments, commencing on August 15, 2010 and continuing on the 15th day of each month thereafter through and including October 15, 2010. Notwithstanding the foregoing, if the proposed merger is consummated prior to August 15, 2010, then, on the closing date of the merger, we shall not owe to any third party any obligations with respect to the loans, including, without limitation, the then outstanding principal balance of the loans and any interest then accrued but unpaid thereon.
Interest and other expense. We incurred interest expense on our notes payable and, in 2009, on our capital lease obligations. Interest and other expense was approximately $0.8 million in the quarter ended March 31, 2010 compared to $0.1 million in the same period of 2009. Although the average borrowings were lower in 2010, the 2010 expense amount increased over the prior year period due to amortization of debt issuance costs and non-cash amortization of the fair value of the warrants issued in connection with the 2009 notes payable, which were recorded as debt discount. We expect interest and other expense to continue to increase in 2010 as a result the Loan Agreement with Cequent.
Change in fair value liability for price adjustable warrants. We use the Black-Scholes-Merton option pricing model as our method of valuation for price adjustable warrants. The fair value liability is revalued each balance sheet date utilizing Black-Scholes-Merton valuation model computations with the decrease or increase in fair value being reported in the statement of operations as other income or expense, respectively. The change in fair value liability for price adjustable warrants was a net expense of approximately $2.7 million in the quarter ended March 31, 2010, compared to a net expense of approximately $1.0 million in the same period of 2009. The increase in expense for the quarter ended March 31, 2010 compared to the 2009 period is due primarily to an increase in the number of warrants outstanding for the 2010 period.
Gain on settlement of liabilities, net. In the three months ended March 31, 2009 we recorded a net gain on settlement of liabilities of approximately $0.7 million. This included a gain of approximately $0.7 million relating to the amendment of our agreement regarding severance obligations with our former Chief Scientific Officer. In addition, we recorded a gain of approximately $0.2 million related to the issuance of shares of stock valued at approximately $0.4 million to eight of our vendors to settle amounts due to these vendors of approximately $0.6 million in total. These gain amounts were partially offset by a lease termination fee of approximately $0.2 million incurred pursuant to the termination of our lease agreement with GECC and subsequent refinance of the amounts due under our Loan and Security Agreement with GECC. We did not record any gains or losses on settlement of liabilities in 2010.
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