Funding requirements from Prospectus16 Feb 2021 18:52
We do not believe that our current cash on hand will be sufficient to fund our projected operating requirements. At this time, there is no guarantee that we will be able to obtain an adequate level of financial resources required for the short and long-term support of our operations or that we will be able to obtain additional financing as needed, or meet the conditions of such financing, or that the costs of such financing may not be prohibitive. These conditions raise substantial doubt about our ability to continue as a going concern for a period within one year from the date of the financial statements included elsewhere in this prospectus. As of June 30, 2020, our cash and cash equivalents were $12.4 million. We believe that our existing cash and cash equivalents, including the sales of our ordinary shares in July 2020 and the expected proceeds from the Merger, will only be sufficient to fund our projected cash requirements into the third quarter of 2021. Therefore, we will require significant additional financing in the near future to fund our operations. As we continue to assess the effects of the COVID-19 pandemic, we believe that it is possible that the COVID-19 pandemic may make financing opportunities scarcer or more difficult or, if such funds are available to us, that such additional financing may not be available in an amount that is sufficient to meet our needs. In light of this unprecedented situation the 4D Pharma Board has carefully re-evaluated management’s strategic priorities and near-to-mid-term objectives. We have taken measures to streamline the business, including changes to management structure and reducing staffing requirements, primarily relating to manufacturing, research and administrative services. The 4D Pharma Board has also prioritized allocation of capital and resources to key programs, such as oncology, set to deliver key clinical value drivers for our shareholders in 2020. We also launched a Phase II clinical trial of MRx-4DP0004 as an oral therapeutic to prevent or reduce the hyperinflammatory response in patients hospitalized with COVID-19, the program commenced in the second quarter of 2020. Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, reduce or terminate our planned or ongoing clinical trials or other operations, or grant rights to develop and commercialize therapeutic candidates that we would otherwise prefer to develop and commercialize ourselves. In October 2020, we entered into a Merger Agreement with Longevity Acquisition Corporation. See further information on the Merger Agreement throughout the proxy statement/prospectus. One of the various closing conditions is that Longevity have at least $14.6 million in cash at closing. However, there can be no assurance that the Company will be successful in completing the Merger or that the funds received in the Merger will be sufficient.
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