GI Dynamics Inc. said it is currently having detailed discussions with institutional and private investors regarding a potential fundraising. In addition, the Company is seeking to secure a bridge loan in the event that its current cash reserves are insufficient to sustain the Company’s operations until the closing of any financing that it may be able to secure. However, there is no guarantee that the Company will be successful in securing a bridge loan or funds from any potential investors. If such funds cannot be secured, the Company would need to cease operations.
Crystal Amber Fund Limited has indicated to the Company that it remains supportive of these ongoing financing efforts of the Company. As a result, Crystal Amber has agreed to extend the maturity date of the Senior Secured Convertible Note issued to Crystal Amber on June 15, 2017 from May 1, 2020 to May 15, 2020.
As part of its ongoing financing efforts, the Company has also been considering the possibility of delisting from the Official List of the ASX and has recently applied to the ASX for in-principle advice in this regard. The Company will provide an update on the potential delisting upon receipt of the in-principle advice from ASX, however, at this stage the Company anticipates that it will shortly be seeking to hold a Special Meeting of Stockholders to approve a resolution to delist the Company from the Official List of the ASX.
The Company has implemented business continuity plans in response to the COVID-19 pandemic. Patient safety for all patients enrolled in the STEP-1 Pivotal Trial of EndoBarrier in the U.S., regulatory compliance, and the scientific integrity of its work remains paramount. In the short term, and as has been experienced elsewhere, the pace of patient enrollment has been adversely affected by the pandemic. The Company has proactively paused recruitment in the STEP-1 Trial until further notice. Given the morbidity and adverse outcome rates amongst patients suffering from the pre-existing conditions of diabetes and obesity, the Company believes the unmet clinical need for EndoBarrier has never been more urgent and acute.
About GI Dynamics
Founded in 2003 and headquartered in Boston, Massachusetts, GI Dynamics, Inc. (ASX:GID) is a developer of EndoBarrier, an endoscopically-delivered medical device for the treatment of type 2 diabetes and the reduction of obesity. EndoBarrier is not approved for sale and is limited by federal law to investigational use only. EndoBarrier is subject to an Investigational Device Exemption by the FDA in the United States and is entering concurrent pivotal trials in the United States and India.
GI Dynamics reported a net loss of $17.33 million for the year ended Dec. 31, 2019, compared to a net loss of $8.04 million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $4.18 million in total assets, $7.38 million in total liabilities, and a total stockholders’ deficit of $3.20 million.
Wolf and Company, P.C., Boston, Massachusetts, the Company’s auditor since 2019, issued a “going concern” qualification in its report dated March 26, 2020 citing that the Company has suffered losses from operations since inception and has an accumulated deficit and working capital deficiency that raise substantial doubt about the Company’s ability to continue as a going concern.