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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2022
OR
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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: 001-39488
Apexigen, Inc.
(Exact Name of Registrant as Specified in its Charter)
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Delaware |
85-1260244 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
75 Shoreway Road, Suite C San Carlos, CA |
94070 |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (650) 931-6236
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
Common Stock, par value $0.0001 per share |
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APGN |
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The Nasdaq Stock Market LLC |
Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share |
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APGNW |
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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, 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.
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Large accelerated filer |
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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 10, 2022, the registrant had 22,565,347 shares of common stock, $0.0001 par value per share, outstanding.
Table of Contents
i
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements. All statements other than statements of historical facts contained in this report, including statements regarding our future results of operations and financial position, business strategy, product candidates, planned preclinical studies and clinical trials, results of clinical trials, research and development costs, regulatory approvals, timing, and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other important factors that are in some cases beyond our control and may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “would,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this report include, but are not limited to, statements about:
•our success in retaining or recruiting, or changes required in, our officers, key employees or directors;
•our public securities’ potential liquidity and trading;
•the lack of a market for our securities;
•our financial performance;
•failure to realize the anticipated benefits of the Business Combination (as defined in Part I, Item 1, Note 3, “Business Combination,” in our notes to unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q);
•the outcome of any legal proceedings that may be instituted against us related to the Business Combination;
•the timing and focus of our current and future clinical trials, and the reporting of data from those trials;
•our ability to obtain and maintain regulatory approval of our product candidates;
•our estimates of the number of patients in the United States who suffer from the diseases we are targeting and the number of patients that will enroll in clinical trials;
•the timing or likelihood of regulatory filings and approvals for our product candidates for various diseases;
•our plans relating to commercializing our product candidates, if approved, including which indications will be pursued;
•the ability of our clinical trials to demonstrate safety and efficacy, and other positive results, of our product candidates;
•the beneficial characteristics, safety, efficacy, and therapeutic effects of our product candidates;
•the development of competitors’ product candidates;
•existing regulations and regulatory developments in the United States and other jurisdictions;
•the need to hire additional personnel and our ability to attract and retain such personnel;
•our plans and ability to obtain, maintain, enforce, or protect intellectual property rights;
•our continued reliance on third parties to conduct additional clinical trials of our product candidates, and for the manufacture of our product candidates for preclinical studies and clinical trials; and
•the success of our licensing agreements.
We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate and financial trends that we believe may affect our business, financial condition, results of operations, and prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements speak only as of the date of this report and are subject to a number of risks, uncertainties, and assumptions described in the section titled “Risk Factors” and elsewhere in this report. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. We do not plan to publicly update or revise any forward-looking statements contained herein whether as a result of any new information, future events, or otherwise.
1
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements.
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PART I—FINANCIAL INFORMATION
Item 1. Unaudited Condensed Consolidated Financial Statements.
APEXIGEN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
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|
|
September 30, 2022 |
|
|
December 31, 2021 |
|
|
(Unaudited) |
|
|
|
|
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
12,708 |
|
|
$ |
23,443 |
|
Short-term investments |
|
7,965 |
|
|
|
12,917 |
|
Prepaid expenses and other current assets |
|
2,544 |
|
|
|
1,681 |
|
Deferred financing costs, current |
|
1,776 |
|
|
|
- |
|
Total current assets |
|
24,993 |
|
|
|
38,041 |
|
Property and equipment, net |
|
176 |
|
|
|
245 |
|
Right-of-use assets |
|
198 |
|
|
|
483 |
|
Deferred financing costs, non-current |
|
1,480 |
|
|
|
- |
|
Other assets |
|
727 |
|
|
|
327 |
|
Total assets |
$ |
27,574 |
|
|
$ |
39,096 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
3,340 |
|
|
$ |
4,487 |
|
Accrued liabilities |
|
7,096 |
|
|
|
8,488 |
|
Liability for common stock to be issued |
|
1,350 |
|
|
|
- |
|
Deferred revenue |
|
5,137 |
|
|
|
3,610 |
|
Lease liabilities, current portion |
|
210 |
|
|
|
369 |
|
Total current liabilities |
|
17,133 |
|
|
|
16,954 |
|
Derivative warrant liabilities |
|
28 |
|
|
|
- |
|
Lease liabilities, less current portion |
|
- |
|
|
|
141 |
|
Total liabilities |
|
17,161 |
|
|
|
17,095 |
|
Commitment and contingencies (Note 11) |
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
Common stock, $0.001 par value; 1,000,000,000 and 23,563,040 shares authorized as of September 30, 2022 (unaudited) and December 31, 2021, respectively; 22,065,347 and 18,051,470 shares issued and outstanding as of September 30, 2022 (unaudited) and December 31, 2021, respectively(1) |
|
2 |
|
|
|
2 |
|
Additional paid-in capital |
|
180,778 |
|
|
|
166,727 |
|
Accumulated deficit |
|
(170,362 |
) |
|
|
(144,724 |
) |
Accumulated other comprehensive loss |
|
(5 |
) |
|
|
(4 |
) |
Total stockholders’ equity |
|
10,413 |
|
|
|
22,001 |
|
Total liabilities and stockholders’ equity |
$ |
27,574 |
|
|
$ |
39,096 |
|
(1) The condensed balance sheet as of December 31, 2021 presented above reflects the retrospective application of recapitalization as if the Transaction had occurred on January 1, 2021. See Note 1, 3, and 7.
See accompanying notes to unaudited condensed consolidated financial statements.
3
APEXIGEN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except share and per share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
$ |
5,683 |
|
|
$ |
5,501 |
|
|
$ |
18,796 |
|
|
$ |
15,122 |
|
General and administrative |
|
|
3,116 |
|
|
|
1,807 |
|
|
|
7,240 |
|
|
|
5,735 |
|
Total operating expenses |
|
|
8,799 |
|
|
|
7,308 |
|
|
|
26,036 |
|
|
|
20,857 |
|
Loss from operations |
|
|
(8,799 |
) |
|
|
(7,308 |
) |
|
|
(26,036 |
) |
|
|
(20,857 |
) |
Other income, net |
|
|
307 |
|
|
|
7 |
|
|
|
398 |
|
|
|
34 |
|
Net loss |
|
$ |
(8,492 |
) |
|
$ |
(7,301 |
) |
|
$ |
(25,638 |
) |
|
$ |
(20,823 |
) |
Net loss per share |
|
$ |
(0.41 |
) |
|
$ |
(0.40 |
) |
|
$ |
(1.36 |
) |
|
$ |
(1.16 |
) |
Weighted-average common shares used to compute net loss per share, basic and diluted |
|
|
20,484,136 |
|
|
|
18,040,783 |
|
|
|
18,895,417 |
|
|
|
18,028,234 |
|
Comprehensive Loss: |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(8,492 |
) |
|
$ |
(7,301 |
) |
|
$ |
(25,638 |
) |
|
$ |
(20,823 |
) |
Other comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized (loss) gain on marketable securities |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
12 |
|
|
|
(4 |
) |
Comprehensive loss |
|
$ |
(8,493 |
) |
|
$ |
(7,303 |
) |
|
$ |
(25,626 |
) |
|
$ |
(20,827 |
) |
See accompanying notes to unaudited condensed consolidated financial statements.
4
APEXIGEN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2022 |
|
|
|
Convertible Preferred Stock |
|
|
Common Stock |
|
|
Additional Paid-In |
|
|
Accumulated |
|
|
Accumulated Other Comprehensive |
|
|
Total Stockholders’ |
|
|
|
Shares |
|
|
Amounts |
|
|
Shares |
|
|
Amounts |
|
|
Capital |
|
|
Deficit |
|
|
Income (Loss) |
|
|
Equity (Deficit) |
|
Balance at June 30, 2022, as previously reported |
|
|
145,130,628 |
|
|
$ |
158,707 |
|
|
|
31,461,489 |
|
|
$ |
31 |
|
|
$ |
8,853 |
|
|
$ |
(161,870 |
) |
|
$ |
(17 |
) |
|
$ |
(153,003 |
) |
Retroactive application of recapitalization |
|
|
(145,130,628 |
) |
|
|
(158,707 |
) |
|
|
(13,369,861 |
) |
|
|
(29 |
) |
|
|
158,736 |
|
|
|
- |
|
|
|
- |
|
|
|
158,707 |
|
Balance at June 30, 2022, as adjusted |
|
|
- |
|
|
|
- |
|
|
|
18,091,628 |
|
|
|
2 |
|
|
|
167,589 |
|
|
|
(161,870 |
) |
|
|
(17 |
) |
|
|
5,704 |
|
Business combination and private offering, net of transaction costs of $9,232 |
|
|
- |
|
|
|
- |
|
|
|
3,143,464 |
|
|
|
- |
|
|
|
8,468 |
|
|
|
- |
|
|
|
- |
|
|
|
8,468 |
|
Common stock issuance to Lincoln Park |
|
|
- |
|
|
|
- |
|
|
|
766,684 |
|
|
|
- |
|
|
|
4,115 |
|
|
|
- |
|
|
|
- |
|
|
|
4,115 |
|
Exercise of stock options |
|
|
- |
|
|
|
- |
|
|
|
35,514 |
|
|
|
- |
|
|
|
37 |
|
|
|
- |
|
|
|
- |
|
|
|
37 |
|
Exercise of restricted stock awards |
|
|
- |
|
|
|
- |
|
|
|
23,518 |
|
|
|
- |
|
|
|
242 |
|
|
|
- |
|
|
|
- |
|
|
|
242 |
|
Exercise of common stock warrant |
|
|
- |
|
|
|
- |
|
|
|
4,539 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Reclassification of preferred stock warrant |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2 |
|
|
|
- |
|
|
|
- |
|
|
|
2 |
|
Stock-based compensation |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
325 |
|
|
|
- |
|
|
|
- |
|
|
|
325 |
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(8,492 |
) |
|
|
- |
|
|
|
(8,492 |
) |
Other comprehensive loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
12 |
|
|
|
12 |
|
Balance at September 30, 2022 |
|
|
- |
|
|
$ |
- |
|
|
|
22,065,347 |
|
|
$ |
2 |
|
|
$ |
180,778 |
|
|
$ |
(170,362 |
) |
|
$ |
(5 |
) |
|
$ |
10,413 |
|
See accompanying notes to unaudited condensed consolidated financial statements.
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2022 |
|
|
|
Convertible Preferred Stock |
|
|
Common Stock |
|
|
Additional Paid-In |
|
|
Accumulated |
|
|
Accumulated Other Comprehensive |
|
|
Total Stockholders’ |
|
|
|
Shares |
|
|
Amounts |
|
|
Shares |
|
|
Amounts |
|
|
Capital |
|
|
Deficit |
|
|
Income (Loss) |
|
|
Equity (Deficit) |
|
Balance at January 1, 2022, as previously reported |
|
|
145,130,628 |
|
|
$ |
158,707 |
|
|
|
31,070,665 |
|
|
$ |
31 |
|
|
$ |
7,991 |
|
|
$ |
(144,724 |
) |
|
$ |
(4 |
) |
|
$ |
(136,706 |
) |
Retroactive application of recapitalization |
|
|
(145,130,628 |
) |
|
|
(158,707 |
) |
|
|
(13,019,073 |
) |
|
|
(29 |
) |
|
|
158,736 |
|
|
|
- |
|
|
|
- |
|
|
|
158,707 |
|
Balance at January 1, 2022, as adjusted |
|
|
- |
|
|
|
- |
|
|
|
18,051,592 |
|
|
|
2 |
|
|
|
166,727 |
|
|
|
(144,724 |
) |
|
|
(4 |
) |
|
|
22,001 |
|
Business combination and private offering, net of transaction costs of $9,232 |
|
|
- |
|
|
|
- |
|
|
|
3,143,464 |
|
|
|
- |
|
|
|
8,468 |
|
|
|
- |
|
|
|
- |
|
|
|
8,468 |
|
Common stock issuance to Lincoln Park |
|
|
- |
|
|
|
- |
|
|
|
766,684 |
|
|
|
- |
|
|
|
4,115 |
|
|
|
- |
|
|
|
- |
|
|
|
4,115 |
|
Exercise of stock options |
|
|
- |
|
|
|
- |
|
|
|
75,550 |
|
|
|
- |
|
|
|
110 |
|
|
|
- |
|
|
|
- |
|
|
|
110 |
|
Exercise of restricted stock awards |
|
|
- |
|
|
|
- |
|
|
|
23,518 |
|
|
|
- |
|
|
|
242 |
|
|
|
- |
|
|
|
- |
|
|
|
242 |
|
Exercise of common stock warrant |
|
|
- |
|
|
|
- |
|
|
|
4,539 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Reclassification of preferred stock warrant |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2 |
|
|
|
- |
|
|
|
- |
|
|
|
2 |
|
Stock-based compensation |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,114 |
|
|
|
- |
|
|
|
- |
|
|
|
1,114 |
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(25,638 |
) |
|
|
- |
|
|
|
(25,638 |
) |
Other comprehensive loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1 |
) |
|
|
(1 |
) |
Balance at September 30, 2022 |
|
|
- |
|
|
$ |
- |
|
|
|
22,065,347 |
|
|
$ |
2 |
|
|
$ |
180,778 |
|
|
$ |
(170,362 |
) |
|
$ |
(5 |
) |
|
$ |
10,413 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2021 |
|
|
|
Convertible Preferred Stock |
|
|
Common Stock |
|
|
Additional Paid-In |
|
|
|
Accumulated |
|
|
Accumulated Other Comprehensive |
|
|
Total Stockholders’ |
|
|
|
Shares |
|
|
Amounts |
|
|
Shares |
|
|
Amounts |
|
|
Capital |
|
|
|
Deficit |
|
|
Loss |
|
|
Equity (Deficit) |
|
Balance at June 30, 2021, as previously reported |
|
|
145,130,628 |
|
|
$ |
158,707 |
|
|
|
30,910,665 |
|
|
$ |
31 |
|
|
$ |
7,396 |
|
|
|
$ |
(129,330 |
) |
|
$ |
1 |
|
|
$ |
(121,902 |
) |
Retroactive application of recapitalization |
|
|
(145,130,628 |
) |
|
|
(158,707 |
) |
|
|
(12,875,464 |
) |
|
|
(29 |
) |
|
|
158,736 |
|
|
|
|
- |
|
|
|
- |
|
|
|
158,707 |
|
Balance at June 30, 2021, as adjusted |
|
|
- |
|
|
|
- |
|
|
|
18,035,201 |
|
|
|
2 |
|
|
|
166,132 |
|
|
|
|
(129,330 |
) |
|
|
1 |
|
|
|
36,805 |
|
Exercise of stock options |
|
|
- |
|
|
|
- |
|
|
|
16,391 |
|
|
|
- |
|
|
|
75 |
|
|
|
|
- |
|
|
|
- |
|
|
|
75 |
|
Stock-based compensation |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
264 |
|
|
|
|
- |
|
|
|
- |
|
|
|
264 |
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
(7,301 |
) |
|
|
- |
|
|
|
(7,301 |
) |
Other comprehensive loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
(2 |
) |
|
|
(2 |
) |
Balance at September 30, 2021 |
|
|
- |
|
|
$ |
- |
|
|
|
18,051,592 |
|
|
$ |
2 |
|
|
$ |
166,471 |
|
|
- |
|
$ |
(136,631 |
) |
|
$ |
(1 |
) |
|
$ |
29,841 |
|
See accompanying notes to unaudited condensed consolidated financial statements.
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2021 |
|
|
|
Convertible Preferred Stock |
|
|
Common Stock |
|
|
Additional Paid-In |
|
|
Accumulated |
|
|
Accumulated Other Comprehensive |
|
|
Total Stockholders’ |
|
|
|
Shares |
|
|
Amounts |
|