Is this an Uh-oh? What are Harry Crumbs thoughts?
Quote: Going Concern
We have identified conditions and events that raise substantial doubt about our ability to continue as a going concern. Based upon our approximate $37.4 million in existing cash, cash equivalents and marketable securities as of September 30, 2017, along with the $2.0 million research and development reimbursement payment received from EUSA in October 2017 for its election to opt-in to co-develop our PD-1 combination trial in RCC with Opdivo ® (the “TiNivo trial”), we believe that we have sufficient cash on hand to support operations for at least the next twelve months from the date of filing this Quarterly Report on Form 10-Q.
However, in order to maintain compliance with the financial covenant under our loan agreement with Hercules Technology II, L.P. and Hercules Technology III, L.P., affiliates of Hercules Technology Growth, which we collectively refer to as Hercules, we will need to maintain $10.0 million in unrestricted cash (defined as cash and liquid cash, including marketable securities) until the completion of the TIVO-3 trial, with results that are satisfactory to Hercules.
If the results are not satisfactory to Hercules, we will need additional capital to maintain compliance with this financial covenant for at least the next twelve months from the date of filing this Quarterly Report on Form 10-Q. This condition raises substantial doubt about our ability to continue as a going concern within one year after the date these financial statements are issued. For more information, refer to “—Liquidity and Capital Resources—Operating Capital Requirements and Going Concern” below and Note 1 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. AVEO diluted twice in 2017.
