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TFF Pharmaceuticals Reports Third Quarter Results and Provides Business Update

December 9, 2019 Off By BusinessWire

Company initiates Phase 1 clinical trial of Voriconazole Inhalation Powder, to treat invasive pulmonary aspergillosis (IPA)

Successfully completes $24 million initial public offering of common stock

AUSTIN, Texas–(BUSINESS WIRE)–TFF Pharmaceuticals, Inc. (NASDAQ: TFFP), a clinical-stage biopharmaceutical company focused on developing and commercializing innovative drug products based on its patented Thin Film Freezing (TFF) technology platform, today announced its third quarter 2019 financial results and provided a corporate update on recent significant events.

“This has been a time of important milestones and accomplishments for TFF Pharmaceuticals,” said Glenn Mattes, President and CEO of TFF Pharmaceuticals. “We are very pleased to report that we recently initiated and began dosing subjects in the Phase 1 clinical trial of our Voriconazole Inhalation Powder, to treat the severe and life-threatening disease of Invasive Pulmonary Aspergillosis, or IPA. This unique formulation of Voriconazole, which is considered to be the most effective antifungal drug for treating IPA, directly targets the site of the fungal infection in the lung and has the potential to be the first dry powder inhaled fungicide on the market.”

“We also successfully completed our IPO on the Nasdaq Stock Market,” continued Mr. Mattes. “We believe this will provide TFF with the funds for the development of our two initial product candidates, Voriconazole Inhalation Powder and Tac-Lac Inhalation Powder, through the completion of their proposed clinical studies, as well as additional product development.”

Recent Clinical and Corporate Highlights

Initiated Phase 1 clinical trial: On November 25, we initiated a Phase 1 clinical trial of Voriconazole Inhalation Powder and began dosing individuals. This is the Company’s next-generation, direct-to-lung, inhaled dry powder version of Voriconazole for treating Invasive Pulmonary Aspergillosis.

This randomized, double-blind, placebo-controlled study will be conducted at a site in Canada for purposes of evaluating, under a U.S. IND and Canadian CTA, the safety, tolerability and pharmacokinetic profile of Voriconazole Inhalation Powder in 64 healthy subjects.

Completed $24 Million Initial Public Offering: In October, the Company closed its initial public offering of 4.8 million shares of common stock, including the exercise by the underwriter of an overallotment option, at a public offering price of $5.00 per share. TFF Pharmaceuticals began trading under the ticker symbol “TFFP” on October 25, 2019 on the Nasdaq Capital Market. Net proceeds to the Company were approximately $22.3 million after deducting underwriting discounts, commissions and other offering expenses.

Third Quarter Financial Results

Cash Position: As of September 30, 2019, TFF Pharmaceuticals reported cash and cash equivalents of $10.6 million, which does not give effect to the Company’s receipt of approximately $22.3 million of net proceeds from its initial public offering in the fourth quarter.

Research and Development (R&D) expenses: R&D expenses for the third quarter of 2019 were $2.6 million, compared to $140,167 for the same period in 2018.

General & Administrative (G&A) expenses: G&A expenses for the third quarter of 2019 were $300,640, compared to $465,919 for the same period in 2018.

Net Loss: TFF Pharmaceuticals reported a net loss for the third quarter of 2019 of $2.8 million, compared to a net loss of $585,215 for the same period in 2018.

About TFF Pharmaceuticals’ Thin Film Freezing technology platform

TFF Pharmaceuticals’ Thin Film Freezing (TFF) platform was designed to improve the solubility and absorption of poorly water-soluble drugs and is particularly suited to generate dry powder particles with properties targeted for inhalation delivery, especially to the deep lung, an area of extreme interest in respiratory medicine. The TFF process results in a “Brittle Matrix Particle,” which possesses low bulk density, high surface area, and typically an amorphous morphology, allowing the particles to supersaturate when contacting the target site, such as lung tissue. Based upon laboratory experiments, the aerodynamic properties of the particles are such that the portion of a drug deposited to the deep lung has the potential to reach as high as 75 percent.

About TFF Pharmaceuticals

TFF Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company focused on developing and commercializing innovative drug products based on its patented Thin Film Freezing, or TFF, technology platform. Early testing confirms that the TFF platform can significantly improve the solubility and absorption of poorly water-soluble drugs, a class of drugs that comprises approximately one-third of the major pharmaceuticals worldwide, thereby improving their pharmacokinetics. TFF Pharmaceuticals has two lead drug candidates: Voriconazole Inhalation Powder and Tac-Lac Inhalation Powder. The Company plans to add to this pipeline by collaborating with large pharmaceutical partners. The TFF Platform is protected by 39 patents issued or pending in the US and internationally. To learn more about TFF Pharmaceuticals and its product candidates, visit the Company’s website at https://tffpharma.com.

SAFE HARBOR

This press release contains forward-looking statements regarding TFF Pharmaceuticals, Inc., including the benefits of the Company’s TFF platform and its dry powder version of Voriconazole and the Company’s plans to add to its existing pipeline of product candidates. Those forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual results to differ materially. Among those factors are: (i) no drug product incorporating the TFF platform has received FDA pre-market approval or otherwise been incorporated into a commercial drug product, (ii) the Company has no current agreements or understandings with any large pharmaceutical companies for the development of a drug product incorporating the TFF Platform and (iii) those other risks disclosed in the section “Risk Factors” included in the Company’s Quarterly Report on Form 10-Q filed with the U.S. Securities and Exchange Commission on December 9, 2019. TFF Pharmaceuticals cautions readers not to place undue reliance on any forward-looking statements. TFF Pharmaceuticals does not undertake, and specifically disclaims, any obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur, except as required by law.

TFF PHARMACEUTICALS, INC. CONDENSED STATEMENTS OF OPERATIONS UNAUDITED

		Three Months Ended September 30, 2019			Three Months Ended September 30, 2018		Nine Months Ended September 30, 2019			January 24, 2018 to September 30, 2018			January 1, 2018 to January 23, 2018 (Predecessor)
Operating expenses
Research and development	$	2,563,528		$	140,167		$	5,554,046		$	759,355		$	*
General and administrative		300,640			465,919			1,721,691			2,243,788			*
Total operating expenses		2,864,168			606,086			7,275,737			3,003,143			*
Loss from operations		(2,864,168	)		(606,086	)		(7,275,737	)		(3,003,143	)		*
Other income														*
Interest income		25,865			20,871			67,699			33,268			*
Total other income		25,865			20,871			67,699			33,268			*
Net loss		(2,838,303	)		(585,215	)		(7,208,038	)		(2,969,875	)		*
														*
Preferred stock dividend		(258,635	)		(219,498	)		(768,876	)		(505,516	)		*
Net loss applicable to common stock	$	(3,096,938	)	$	(804,713	)	$	(7,976,914	)	$	(3,475,391	)	$	*
Net loss applicable to common stock per share, basic and diluted	$	(0.70	)	$	(0.18	)	$	(1.81	)	$	(0.79	)
Weighted average common shares outstanding, basic and diluted		4,400,000			4,400,000			4,400,000			4,400,000

TFF PHARMACEUTICALS, INC. CONDENSED BALANCE SHEETS

	As of September 30, 2019			As of December 31, 2018
Assets		(Unaudited)
Current Assets
Cash and cash equivalents	$	10,550,569		$	10,261,671
Prepaid assets and other current assets		20,297			12,065
Total Current Assets		10,570,866			10,273,736
Deferred offering costs		461,893			127,768
Total Assets	$	11,032,759		$	10,401,504

Liabilities and Stockholders’ Deficit
Current Liabilities
Accounts payable	$	691,105		$	428,645
Accrued dividends payable		1,497,226			728,350
Total Liabilities		2,188,331			1,156,995

Commitments and Contingencies (Note 4)
Series A Preferred Stock
Series A Preferred Stock, $0.001 par value, 10,000,000 shares authorized; 8,930,000 shares issued and outstanding as of September 30, 2019 and 5,662,000 shares issued and outstanding as of December 31, 2018, respectively (Liquidation Preference of $23,822,226)		19,684,197			12,485,971
Stockholders’ Deficit:
Common stock, $0.001 par value, 45,000,000 shares authorized; 4,000,000 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively		4,000			4,000
Additional paid-in capital		206,455			596,724
Accumulated deficit		(11,050,224	)		(3,842,186	)
Total Stockholders’ Deficit		(10,839,769	)		(3,241,462	)

Total Liabilities, Series A Preferred Stock and Stockholders’ Deficit	$	11,032,759		$	10,401,504

TFF PHARMACEUTICALS, INC. CONDENSED STATEMENTS OF CASH FLOWS UNAUDITED

	For the Nine Months Ended September 30, 2019			January 24, 2018 to September 30, 2018			January 1, 2018 to January 23, 2018 (Predecessor)
Cash Flows from Operating Activities
Net loss	$	(7,208,038	)	$	(2,969,875	)	—
Adjustment to reconcile net loss to net cash used in operating activities:
Stock based compensation		378,607			1,235,946		—
Changes in operating assets and liabilities:
Prepaid assets		(261,204	)		(36,305	)	—
Accounts payable		181,307			426,845		(1,833	)
Net Cash Used in Operating Activities		(6,909,328	)		(1,343,389	)	(1,833	)
Cash Flows from Investing Activities
Net Cash Used in Investing Activities		—			—		—
Cash Flows from Financing Activities
Net Transfers from parent		—			(6,542	)	(1,833	)
Proceeds from issuance of preferred stock		7,198,226			12,485,971		—
Net Cash Provided by Financing Activities		7,198,226			12,479,429		(1,833	)
Net Increase in Cash and Cash Equivalents		288,898			11,136,040		—
Cash and Cash Equivalents – beginning of period		10,261,671			—		—
Cash and Cash Equivalents – end of period	$	10,550,569		$	11,136,040		—
Supplemental disclosure of non-cash investing and financing activities:
Common stock issued to former parent for acquired assets	$	—		$	4,000		—
Accrued offering costs	$	81,153		$	60,890		—
Accrued dividend	$	768,876		$	505,516		—