Ritter Pharmaceuticals Reports Financial Results for the Fourth Quarter and Year Ended December 31, 2019

Los Angeles, California, UNITED STATES


Definitive merger agreement with Qualigen, Inc. announced in January 2020

LOS ANGELES, March 31, 2020 (GLOBE NEWSWIRE) -- Ritter Pharmaceuticals, Inc. (Nasdaq: RTTR) (“Ritter Pharmaceuticals”, Ritter” or the “Company”), a developer of therapeutic products that modulate the gut microbiome to treat gastrointestinal diseases, today reported financial results for the fourth quarter and year ended December 31, 2019.

In January 2020, Ritter and Qualigen, Inc. (“Qualigen”), announced that the two companies had entered into a definitive “reverse merger” agreement. Under the merger agreement, Qualigen will become a wholly-owned subsidiary of Ritter. Upon completion of the merger, the Company will change its name to Qualigen Therapeutics, Inc.

"Following our extensive review of strategic alternatives, we are excited about the recently announced merger agreement between Ritter Pharmaceuticals and Qualigen. The merged company will focus on the development of Qualigen’s nanotechnology therapies for the treatment of cancer and infectious diseases, while also continuing to operate its revenue-generating diagnostic business. At the same time, the merger provides for, among other things, a portion of the net proceeds from any potential monetization of our RP-G28 technology, a therapeutic treatment for lactose intolerance, to be distributed to our pre-merger stockholders,” said Andrew J. Ritter, Ritter Pharmaceuticals’ Chief Executive Officer. "We look forward to completing the merger in the second quarter of this year and continue to work diligently with the Qualigen management team to achieve that objective."

Financial Results for the Fourth Quarter and Year Ended December 31, 2019

The Company’s net loss, and net loss per attributable to common stockholders for the fourth quarter and year ended December 31, 2019 was $0.4 million and $10.1 million, or $0.05 per share and $1.06 per share, respectively, compared to $6.6 million and $16.9 million, or $1.73 per share and $3.66 per share, for the same periods in 2018, respectively. Net loss for the fourth quarter and year ended December 31, 2019, included non-cash, stock-based compensation expense of $0.1 million and $0.4 million, respectively, compared to $0.1 million and $0.6 million, for the same periods in 2018, respectively. As of December 31, 2019, the Company had cash and cash equivalents of approximately $1.7 million compared to $14.8 million in cash, cash equivalents and investment in marketable securities as of December 31, 2018.

The net decrease in cash and cash equivalents in 2019 was mainly due to the use of cash to fund the Phase 3 “Liberatus” clinical trial of RP-G28. The decrease in net loss for both the fourth quarter and year ended December 31, 2019 and net loss per share for both the fourth quarter and year ended December 31, 2019 compared to the same periods in 2018 was primarily due to the winding down of development efforts as the Liberatus clinical trial entered its finalization stage.

The Company has significantly reduced its cash burn, including reducing executive management and board compensation and non-essential operating expenses to extend its runway while keeping its core team and expertise intact.

About Ritter Pharmaceuticals
Ritter Pharmaceuticals, Inc. (www.RitterPharma.com, @RitterPharma) develops innovative therapeutic products that modulate the gut microbiome to treat gastrointestinal diseases. On January 15, 2020, the Company entered into an Agreement and Plan of Merger with Qualigen, pursuant to which Merger Sub will merge with and into Qualigen, with Qualigen surviving as a wholly-owned subsidiary of Ritter Pharmaceuticals, Inc.

Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that express the current beliefs and expectations of Ritter Pharmaceuticals’ management. Any statements contained herein that do not describe historical facts, including statements related to the proposed merger with Qualigen and Ritter’s ability to monetize RP-G28 are forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual results, performance and achievements to differ materially from those discussed in such forward-looking statements. Some of the factors that could affect actual results are included in the periodic reports on Form 10-K and Form 10-Q that are filed with the Securities and Exchange Commission. Ritter cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date they were made. The Company undertakes no obligation to update or revise forward-looking statements, except as otherwise required by law, whether as a result of new information, future events or otherwise.

Contacts
Investor Contact:
John Beck
310-203-1000
john@ritterpharma.com


RITTER PHARMACEUTICALS, INC.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

  For the Year Ended 
  December 31, 
  2019  2018 
Operating costs and expenses:        
Research and development (a) $6,126,972  $12,259,940 
Patent costs  146,281   204,396 
General and administrative  4,570,932   5,425,033 
Total operating costs and expenses  10,844,185   17,889,369 
Operating loss  (10,844,185)  (17,889,369)
         
Other income:        
Interest income  123,052   126,835 
Settlement of accounts payable (a)  588,114   893,823 
Total other income  711,166   1,020,658 
Net loss $(10,133,019) $(16,868,711)
         
Other comprehensive gain (loss):        
Unrealized gain (loss) on debt securities  923   (923)
Comprehensive loss $(10,132,096) $(16,869,634)
         
Net Loss  (10,133,019)  (16,868,711)
Deemed dividend of preferred stock     (2,537,844)
Net loss applicable to common stockholders $(10,133,019) $(19,406,555)
Net loss per common share – basic and diluted $(1.06) $(3.66)
         
Weighted average common shares outstanding – basic and diluted  9,570,061   5,304,667 

(a)     For comparative presentation purpose, settlement of accounts payable of $893,823 for the year ended December 31, 2018 was reclassified out of research and development and into settlement of accounts payable under other income.


RITTER PHARMACEUTICALS, INC.
BALANCE SHEETS

  December 31, 2019  December 31, 2018 
ASSETS        
Current assets        
Cash and cash equivalents $1,699,971  $7,812,259 
Accrued interest receivable  771   54,456 
Investment in marketable securities     6,988,780 
Prepaid expenses and other current assets  509,519   421,522 
Total current assets  2,210,261   15,277,017 
Other assets        
Right-of-use assets  93,032    
Other assets  478,075   22,725 
Total other assets  571,107   22,725 
Property and equipment, net  15,656   20,160 
Total Assets $2,797,024  $15,319,902 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Current liabilities        
Accounts payable $1,417,317  $4,512,316 
Accrued expenses  179,258   1,407,843 
Lease liabilities  100,471    
Other liabilities     13,359 
Total current liabilities  1,697,046   5,933,518 
         
Stockholders’ equity        
Series A preferred stock, $0.001 par value; 9,500 shares authorized; 0 and 4,080 shares issued and outstanding as of December 31, 2019 and 2018, respectively     2,289,324 
Series B preferred stock, $0.001 par value; 6,000 shares authorized; 1,850 and 5,608 shares issued and outstanding as of December 31, 2019 and 2018, respectively  1,288,956   3,906,931 
Series C preferred stock, $0.001 par value; 1,880 shares authorized; 240 and 1,880 shares issued and outstanding as of December 31, 2019 and 2018, respectively  240,000   1,880,000 
Common stock, $0.001 par value; 225,000,000 shares authorized; 19,108,331 and 6,036,562 shares issued and outstanding as of December 31, 2019 and 2018, respectively  19,108   6,037 
Additional paid-in capital  79,885,078   71,505,160 
Accumulated other comprehensive loss     (923)
Accumulated deficit  (80,333,164)  (70,200,145)
Total stockholders’ equity  1,099,978   9,386,384 
Total Liabilities and Stockholders’ Equity $2,797,024  $15,319,902