# Q/C Technologies, Inc.: Form 10-Q for the period ended Jun 30, 2024

- Company: [Q/C Technologies, Inc.](/companies/qcls.md) (CIK 1321834)
- Form: 10-Q
- Filed: 2024-08-19
- Accepted by EDGAR: Aug 19, 2024, 10:30 ET
- Period: 2024-06-30
- Accession: 0001493152-24-032940
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1321834/000149315224032940/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1321834/000149315224032940/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Research and development | 3 months, 2024-04-01 to 2024-06-30 | $401.1k | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 6 months, 2024-01-01 to 2024-06-30 | $1.6m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2024-04-01 to 2024-06-30 | −$3.4m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2024-01-01 to 2024-06-30 | −$6.2m | us-gaap:OperatingIncomeLoss |
| Net income | 3 months, 2024-04-01 to 2024-06-30 | −$9.6m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2024-01-01 to 2024-06-30 | −$19.4m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-04-01 to 2024-06-30 | −$4.54 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2024-01-01 to 2024-06-30 | −$9.58 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-04-01 to 2024-06-30 | −$4.54 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2024-01-01 to 2024-06-30 | −$9.58 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-04-01 to 2024-06-30 | 2,275,699 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2024-01-01 to 2024-06-30 | 2,228,218 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2024-01-01 to 2024-06-30 | −$4.6m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2024-06-30 | $536.0k | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-06-30 | $14.4m | us-gaap:AssetsCurrent |
| Total assets | at 2024-06-30 | $26.4m | us-gaap:Assets |
| Current liabilities | at 2024-06-30 | $5.8m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-06-30 | $26.0m | us-gaap:Liabilities |
| Shareholders' equity | at 2024-06-30 | $97.8k | us-gaap:StockholdersEquity |
| Shareholders' equity | at 2024-06-29 | $97.8k | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 82,682 characters.

*The information set forth below should be read in conjunction with our condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission on April 1, 2024. This discussion and analysis contains forward-looking statements based on our current expectations, assumptions, estimates and projections. These forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those indicated in these forward-looking statements as a result of certain factors, including those discussed in Part II, Item 1A of this Quarterly Report on Form 10-Q, entitled “Risk Factors.” References in this discussion and analysis to “us,” “we,” “our,” or “the Company” refer collectively to TNF Pharmaceuticals, Inc.*

Our financial statements are prepared in accordance with GAAP. These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q.

This quarterly report on Form 10-Q and other reports filed by the Company from time to time with the Securities and Exchange Commission (the “SEC” and such reports, collectively, the “Filings”) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to the Company’s business, industry, and the Company’s operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Important factors that could cause actual results to differ materially from the results and events anticipated or implied by such forward-looking statements include, but are not limited to:

- fluctuation and volatility in market price of our Common Stock due to market and industry factors, as well as general economic, political and market conditions;
- the impact of dilution on our shareholders;
- our ability to realize the intended benefits of the Merger (as defined below) and the Contribution Agreement (as defined below);

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- the impact of our ability to realize the anticipated tax impact of the Merger;
- the outcome of litigation or other proceedings we may become subject to in the future;
- delisting of our Common Stock from the Nasdaq;
- our availability and ability to continue to obtain sufficient funding to conduct planned research and development efforts and realize potential profits;
- our ability to develop and commercialize our product candidates, including MYMD-1, Supera-CBD and other future product candidates;
- the impact of the complexity of the regulatory landscape on our ability to seek and obtain regulatory approval for our product candidates, both within and outside of the U.S.;
- the required investment of substantial time, resources and effort for successful clinical development and marketization of our product candidates;
- challenges we may face with maintaining regulatory approval, if achieved;
- the potential impact of changes in the legal and regulatory landscape, both within and outside of the U.S.;
- the impact of pandemics, such as COVID-19, on the administration, funding and policies of regulatory authorities, both within and outside of the U.S.;
- our dependence on third parties to conduct pre-clinical and clinical trials and manufacture its product candidates;
- the impact of pandemics, like COVID-19, on our results of operations, business plan and the global economy;
- challenges we may face with respect to our product candidates achieving market acceptance by providers, patients, patient advocacy groups, third party payors and the general medical community;
- the impact of pricing, insurance coverage and reimbursement status of our product candidates;
- emerging competition and rapidly advancing technology in our industry;
- our ability to obtain, maintain and protect our trade secrets or other proprietary rights, operate without infringing upon the proprietary rights of others and prevent others from infringing on its proprietary rights;
- our ability to maintain adequate cyber security and information systems;
- our ability to achieve the expected benefits and costs of the transactions related to the acquisition of Supera Pharmaceuticals, Inc. (“Supera”);
- our ability to effectively execute and deliver our plans related to commercialization, marketing and manufacturing capabilities and strategy;
- our ability to obtain adequate financing in the future on reasonable terms, as and when we need it;
- challenges we may face in identifying, acquiring and operating new business opportunities;
- our ability to retain and attract senior management and other key employees;
- our ability to quickly and effectively respond to new technological developments;
- changes in political, economic or regulatory conditions generally and in the markets in which we operate; and
- our compliance with all laws, rules, and regulations applicable to our business.

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### Overview

The Company is focused on developing and commercializing two therapeutic platforms based on well-defined therapeutic targets: MYMD-1 and Supera-CBD:

- MYMD-1 is a clinical stage small molecule that is being developed to treat age-related illnesses such as frailty and sarcopenia. MYMD-1 works by regulating the release of numerous pro-inflammatory cytokines, such as TNF-α, interleukin 6 (“IL-6”) and interleukin 17 (“IL-17”). MYMD-1 currently is being evaluated in patients with sarcopenia (age-related muscle loss). By regulating the immunometabolic system, MYMD-1 can also treat autoimmune disease, including (but not limited to) multiple sclerosis, diabetes, rheumatoid arthritis, and inflammatory bowel disease. The Company has significant intellectual property coverage to protect these autoimmune indications, as well as therapy as an anti-aging product;
- The Company is advancing MYMD-1 in sarcopenia based on positive clinical data from its Phase II trial and previous research findings. This previous clinical trial supported the safety profile, including no serious adverse events and no patient dropouts due to an adverse event. Serum analysis confirmed the mechanism of action in patients with sarcopenia aged 65-75 years old. These data support the protocol in development to assess clinical outcomes in patients with sarcopenia;
- In preparation for future studies, the Company and partner Charles River Laboratories completed the dosing in an FDA-required 90-day oral gavage electroencephalogram (EEG) safety study in an animal model. This 90-day dog study was designed to complement the GLP chronic toxicology studies that have been completed and reported to FDA. This complete toxicology package will inform the duration and dosing of future clinical studies;
- An Annual Report is in preparation for submission to FDA;
- Supera-CBD is a synthetic analog of cannabidiol (“CBD”) being developed to treat various conditions, including, but not limited to, epilepsy, pain, and anxiety/depression, through its effects on the CB2 receptor, and a monoamine oxidase enzyme (“MAO”) type B. Supera-CBD has shown promise in treating neuroinflammatory and neurodegenerative diseases, and may benefit from the recent re-classification of cannabis-derived products by FDA;
- In a pre-clinical evaluation of Supera-CBD for pain (Johns Hopkins University School of Medicine - Division of Behavioral Biology), Supera-CBD decreased pain, indicating beneficial effects on inflammatory-induced thermal pain sensitivity at all doses tested;
- The Company is currently preparing several scientific papers for publication in 2024, including an abstract for submission in the fourth quarter 2024 related to the Phase 2 study of MYMD-1 in sarcopenia/frailty to a peer-reviewed publication;
- The Company’s new management is seeking appropriate speaking opportunities to present the Company;
- The Company is exploring non-dilutive opportunities to evaluate MYMD-1 in additional indications not previously considered.

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#### Reverse Stock Split

On February 14, 2024, the Company effected a 1-for-30 reverse stock split (the “Reverse Stock Split”). Simultaneously with the Reverse Stock Split, number of shares of the Company’s common stock authorized for issuance was reduced from 500,000,000 shares to 16,666,666 shares, and our authorized capital stock was reduced from 550,000,000 shares to 66,666,666 shares. The Reverse Stock Split reduced the total number of issued and outstanding shares of Common Stock, including shares held by the Company as treasury shares. All share amounts have been retroactively adjusted for the Reverse Stock Split.

#### 2021 Merger and Milestone Payments

On April 16, 2021, pursuant to the previously announced Agreement and Plan of Merger and Reorganization, dated November 11, 2020 (as subsequently amended, the “Merger Agreement”), by and among the Company, previously known as Akers Biosciences, Inc., XYZ Merger Sub, Inc., a wholly-owned subsidiary of the Company (“Merger Sub”), and MyMD Pharmaceuticals (Florida), Inc., a Florida corporation previously known as MyMD Pharmaceuticals, Inc. (“MyMD Florida”), Merger Sub was merged with and into MyMD Florida, with MyMD Florida continuing after the merger as the surviving entity and a wholly owned subsidiary of the Company (the “Merger”). The Merger consideration included potential milestone payments to the pre-Merger MyMD Florida stockholders (the “Milestone Payments”) payable in shares of the Company’s Common Stock upon the achievement of certain market capitalization milestone events (the “Milestone Events”) during the 36-month period immediately following the closing of the Merger (the “Milestone Period”). On April 16, 2024, the Milestone Period expired and accordingly, the pre-Merger MyMD Florida stockholders are no longer entitled to any potential Milestone Payments pursuant to the Merger Agreement.

The Company previously owned, through its subsidiary Cystron Biotech, LLC (“Cystron”), an exclusive license from Premas Biotech PVT Ltd. (“Premas”) with respect to Premas’ vaccine platform for the development of a vaccine against COVID-19 and other coronavirus infections. On April 16, 2021, pursuant to the Contribution and Assignment Agreement, dated March 18, 2021 (the “Contribution Agreement”) by and among the Company, Cystron, Oravax Medical, Inc. (“Oravax”) and, for the limited purpose set forth therein, Premas, the Company caused Cystron to contribute substantially all of the assets associated with its business of developing and manufacturing Cystron’s COVID-19 vaccine candidate to Oravax. Oravax is pursuing the development of the COVID-19 vaccine candidate. The Company’s interest in Oravax consists of 13% of Oravax’s outstanding shares of capital stock and the rights to a 2.5% royalty on all future net sales. The Company has evaluated several options with respect to its interest in Oravax, including a potential distribution of Oravax shares to the Company’s stockholders. This would make Oravax a publicly held company. In addition, the Company currently has the right to designate a member of the board of directors of Oravax, pursuant to which Mr. Joshua Silverman, our Chairman of the Board, has been designated to serve as a director of Oravax.

### Financial Operations Overview

We will not generate revenue from product sales unless and until we successfully complete clinical development, obtain regulatory approval for, and successfully commercialize our MYMD-1 and Supera-CBD product candidates. The lengthy process of securing marketing approvals for new drugs requires the expenditure of substantial resources. Any significant delay or failure to obtain regulatory approvals would materially adversely affect our product candidate’s development efforts and our business overall. In addition, if we obtain regulatory approval for MYMD-1 and/or Supera-CBD, we expect to incur significant expenses related to developing our commercialization capability to support product sales, marketing, manufacturing and distribution activities.

We anticipate that our expenses will increase significantly as we:

- advance the development of our MYMD-1 and Supera-CBD;
- initiate and continue research and preclinical and clinical development of potential new product candidates;
- maintain, expand and protect our intellectual property as it pertains to MYMD-1 and Supera-CBD;
- expand our infrastructure and facilities to accommodate ongoing development activities;
- establish agreements with contract research organizations, or CROs, and third-party contract manufacturing organizations, or CMOs, in connection with our Supera-CBD preclinical studies, MYMD-1 ongoing and planned clinical trials, Supera-CBD clinical trials and the development of our manufacturing capabilities for MYMD-1 and Supera-CBD;
- develop the large-scale manufacturing processes and capabilities for the commercialization of our MYMD-1 and Supera-CBD drug products;
- seek marketing approvals for our MYMD-1 and Supera-CBD product candidates that successfully complete clinical trials and
- establish a sales, marketing and distribution infrastructure to commercialize MYMD-1 and Supera-CBD should we obtain marketing approval.

As a result of these anticipated expenditures, we will need substantial additional funding to support our continuing operations and pursue our growth strategy.

### Components of our Results of Operations

### Revenue

We have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products in the near future. If our research and development efforts with MYMD-1 and Supera-CBD are successful, we may generate revenue from product sales or through license agreements with third parties.

### Operating Expenses

Our operating expenses are broken into several components, including research and development and general and administrative costs.

We expect operating expenses to increase as we progress through the various clinical trials in the development of MYMD-1 and Supera-CBD.

#### Research and Development

Our research and development expenses primarily consist of costs associated with the development of MYMD-1 and Supera-CBD. These costs include, but are not limited to:

- Salaries, wages and benefits of the research and development staff;
- Contractual agreements with third parties including contract research organizations, preclinical activities and clinical trials;
- Outside consultants including fees and expenses;
- Laboratory supplies and equipment;
- Regulatory compliance; and
- Patent application and maintenance costs to protect our intellectual property.

Four of our six employees are principally involved in research and development activities for either MYMD-1 or Supera-CBD. Their salaries, wages and benefits are captured as a component of research and development but not allocated to specific projects.

We utilize third party contractors and consultants with expertise in specific research or development activities to perform work under the supervision of our researchers. We believe this allows us to control costs and to progress through the development cycle and to utilize our staff more efficiently.

It is difficult to project with absolute accuracy the duration or final cost of the development of MYMD-1 and Super-CBD or if revenue will be generated from the commercialization of these components. The process of achieving regulatory approval is very costly and time consuming. A few of the many factors that contribute to costs of duration include:

- Size and scope of pre-clinical trials;
- The phases of clinical development and the stage of our product candidates in the cycle;
- Per subject trial costs;
- The number of sites required for the trials and the availability of appropriate sites to perform the trials;
- The time that is required to enroll the appropriate number of trial participants; and
- The time required to achieve the approval of regulatory agencies.

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#### General and Administrative

General and administrative expenses primarily consist of salaries, wages and benefits for our employees in the executive, legal and accounting functions and third-party costs for legal, accounting, insurance, investor relations, stock market and board expenses.

Although treated as components of general and administrative expenses, we have chosen to disclose the following significant items separately:

#### Stock Based Compensation

Stock-based compensation includes the fair market value, as determined using the Black-Scholes options pricing model, of stock options issued to key staff and consultants.

#### Warrant Issuance Expenses

Warrant issuance expenses represent the portion of the fees and offering expenses incurred in connection with the February 2023 Offering attributable to the issuance of the Series F Warrants.

#### Other Income (Expense), net

Other income (expense), net consists of interest and dividends earned on our cash, cash equivalents, and investments, gains/(losses) on the sale of marketable securities, gains/(losses) on the changes of fair value of equity investments, gains/(losses) on the changes of fair value of warrant liabilities, gains/(losses) on the changes of fair value of derivative liabilities, and an uninsured casualty loss.

### Results of Operations

### Summary of Statements of Operations for the Three Months Ended June 30, 2024 and 2023

We are focused on developing and commercializing two therapeutic platforms based on well-defined therapeutic targets, MYMD-1 and Supera-CBD. The following table summarized the results of operations for the three months ended June 30, 2024 and 2023.

| Description Operating Expenses | For the Three Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: |
| General and Administrative | $1,020,312 | $1,879,917 |
| Research and Development | 401,104 | 2,224,444 |
| Stock-Based Compensation | 439,627 | 1,677,271 |
| Series F Warrant Issuance Expenses | - | - |
| Series F-1 Warrant Issuance Expenses | 539,097 | - |
| Series G Warrant Issuance Expenses | 969,505 | - |
| Total Operating Expenses | 3,369,645 | 5,781,632 |
| Loss from Operations | (3,369,645) | (5,781,632) |
| Other Income (Expense), net | (6,196,003) | 1,613,979 |
| Net Loss | $(9,565,648) | $(4,167,653) |

### Revenue

We had no revenue from operations during the three months ended June 30, 2024 and 2023.

### General and Administrative Expenses

The table below summarizes our general and administrative expenses for the three months ended June 30, 2024 and 2023:

| Description | For the Three Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: |
| Personnel Costs | $207,197 | $397,847 |
| Professional Service Costs | 306,622 | 272,105 |
| Stock Market & Investor Relations Costs | 82,829 | 307,833 |
| Other Administrative Costs | 423,664 | 902,132 |
| Total Administrative Expense | $1,020,312 | $1,879,917 |

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Personnel costs decreased $187,477 during the three months ended June 30, 2024. The decrease is related to the Company initiatives relating to reducing the number of employees that was implemented during the fourth quarter of 2023.

Professional services costs increased $34,517 during the three months ended June 30, 2024. These costs included legal and accounting and specialized consulting services regularly incurred in the normal course of business. The increase is primarily related to an increase in fees for specialized accounting services related to the fair market valuations for the various convertible preferred stock series.

Stock market and investor relations costs decreased $225,004 during the three months ended June 30, 2024. These costs include the annual Nasdaq listing fees, activities related to keeping the shareholder base informed through press releases, presentations and other communication efforts and the costs of annual stockholder meetings. The decrease is primarily due to the preparation costs associated with the 2023 annual stockholder meeting.

Other administrative expenses decreased $478,468 during the three months ended June 30, 2024. These costs include Board expenses, business insurance, corporate travel and other general operating expenses. The decrease is associated with a reimbursement of expenses to a related party as authorized by the Board of Directors in April 2023.

### Stock-Based Compensation

Stock-based compensation decreased $1,237,644 during the three months ended June 30, 2024. The decrease is related to the accelerated vesting of the stock options issued on June 7, 2023 that occurred in the fourth quarter of 2023 which reduced the periodic recognition of costs, to the final vesting of the second tranche of the June 7, 2023 stock options, and to several forfeitures of unvested stock options related to separated employees.

### Warrant Issuance Expenses

Warrant issuance expenses associated with the issuance of the Series F-1 Convertible Preferred Stock and the Series G Convertible Preferred Stock and Warrants totaled $1,508,602. These costs included placement agent, legal, and accounting fees.

### Research and Development Expenses

The table below summarizes our research and development expenses for the three months ended June 30, 2024 and 2023:

| Description | For the Three Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: |
| Salaries and Wages | $289,722 | $498,244 |
| Development Programs | 65,649 | 1,615,016 |
| Professional Services | 39,099 | 67,360 |
| Regulatory Expenses | 390 | - |
| Other Research and Development Expenses | 6,344 | 43,824 |
| Total Research and Development Expenses | $401,104 | $2,224,444 |

Salaries and wages decreased $208,522 during the three months ended June 30, 2024. The decrease was associated with Company initiatives relating to reducing the number of employees implemented during the fourth quarter of 2023 and due to employee resignations during the three months ended June 30, 2024.

Development program costs include those associated with pre-clinical development, clinical trials and other material and development programs. Costs decreased $1,549,467 during the three months ended June 30, 2024 primarily due to the completion of the Phase II study for Sarcopenia during the year ended December 31, 2023.

Professional services costs decreased $28,261 during the three months ended June 30, 2024. These costs are primarily related to consulting services not related to a specific development program and legal and maintenance fees associated with the protection of our intellectual property.

Regulatory expenses increased $390 during the three months ended June 30, 2024. These expenses were related to the close-out of a multi-site protocol.

Other research and development expenses decreased $37,480 during the three months ended June 30, 2024. These expenses include laboratory supplies, training and travel for department personnel while working with third-party trial sites. The decrease during the three months ended June 30, 2024 is primarily related to expenses for seminars and travel.

### Other Income and Expense

The table below summarizes our other income and expenses for the three months ended June 30, 2024 and 2023:

| Description | For the Three Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: |
| Interest and Dividend Income | $(21,148) | $(174,851) |
| Loss on Investments | 75 | 389 |
| Loss on changes in fair value of Equity Investments | 76 | 983 |
| Gain on changes in fair value of Warrant Liabilities | (2,701,000) | (2,930,700) |
| Loss on changes in fair value of Derivative Liabilities | 72,000 | 1,490,200 |
| Loss on the issuance of preferred stock | 8,846,000 | - |
| Total Other (Income)/Expense | $6,196,003 | $(1,613,979) |

Other expenses, net of income, totaled $6,196,003 for the three months ended June 30, 2024, and other income, net of expenses, totaled $1,613,979 for the three months ended June 30, 2023.

During the three months ended June 30, 2024 interest and dividend income decreased $153,703 primarily related to the availability of cash for investment.

During the three months ended June 30, 2024, we recorded a gain of $2,701,000 related to the change in fair value of the warrant liabilities as follows:

- For the Series F-1 Short-Term Warrants, we recorded a gain of $624,000, The fair value of the Series F-1 Short-Term warrants of approximately $2,682,000 was estimated at June 30, 2024 utilizing the Black Scholes Model using the following weighted average assumptions: dividend yield 0%; remaining term of 1.40 years; equity volatility of 115.0%; and a risk-free interest rate of 4.94%.
- For the Series F-1 Long-Term Warrants, we recorded a gain of $350,000, The fair value of the Series F-1 Long-Term warrants of approximately $4,277,000 was estimated at June 30, 2024 utilizing the Black Scholes Model using the following weighted average assumptions: dividend yield 0%; remaining term of 4.90 years; equity volatility of 120.0%; and a risk-free interest rate of 4.34%.
- For the Series G Short-Term Warrants, we recorded a gain of $1,107,000, The fair value of the Series F-1 Short-Term warrants of approximately $4,752,000 was estimated at June 30, 2024 utilizing the Black Scholes Model using the following weighted average assumptions: dividend yield 0%; remaining term of 1.40 years; equity volatility of 115.0%; and a risk-free interest rate of 4.94%.
- For the Series G Long-Term Warrants, we recorded a gain of $620,000, The fair value of the Series F-1 Long-Term warrants of approximately $7,580,000 was estimated at June 30, 2024 utilizing the Black Scholes Model using the following weighted average assumptions: dividend yield 0%; remaining term of 4.90 years; equity volatility of 120.0%; and a risk-free interest rate of 4.34%.

During the three months ended June 30, 2024, we recorded a loss of $72,000 related to the change in fair value of the Series F-1 Derivative liabilities, which is recorded in other income (expense) on the Statements of Operations. We estimated the $926,000 fair value of the bifurcated embedded derivative at June 30, 2024 using a Monte Carlo simulation model, with the following inputs: the fair value of our common stock of $1.84 on the valuation date, estimated equity volatility of 120.0%, estimated traded volume volatility of 195.0%, the time to maturity of 1 year, a discounted market interest rate of 9.6%, dividend rate of 10.0%, a penalty dividend rate of 15.0%, and probability of default of 6.9%.

During the three months ended June 30, 2024, we recorded a loss associated with the issuance of the Series F-1 Convertible Preferred Stock totaling $3,737,000 and the Series G Convertible Preferred Stock totaling $5,109,000. The losses resulted from the fair market value of the issued warrants exceeding the sum of the gross proceeds, discount and derivative derived from the placement of the preferred shares.

### Summary of Statements of Operations for the Six Months Ended June 30, 2024 and 2023

We are focused on developing and commercializing two therapeutic platforms based on well-defined therapeutic targets, MYMD-1 and Supera-CBD. The following table summarized the results of operations for the six months ended June 30, 2024 and 2023.

| Description Operating Expenses | For the Six Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: |
| General and Administrative | $2,088,632 | $2,867,904 |
| Research and Development | 1,600,042 | 2,994,874 |
| Stock-Based Compensation | 956,992 | 1,746,339 |
| Series F Warrant Issuance Expenses | - | 762,834 |
| Series F-1 Warrant Issuance Expenses | 539,097 | - |
| Warrant Issuance Expenses | 969,505 | - |
| Total Operating Expenses | 6,154,268 | 8,371,951 |
| Loss from Operations | (6,154,268) | (8,371,951) |
| Other Income (Expense), net | (13,211,421) | 2,692,566 |
| Net Loss | $(19,365,689) | $(5,679,385) |

### Revenue

We had no revenue from operations during the six months ended June 30, 2024 and 2023, respectively.

### General and Administrative Expenses

The table below summarizes our general and administrative expenses for the six months ended June 30, 2024 and 2023:

| Description | For the Six Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: |
| Personnel Costs | $397,268 | $684,574 |
| Professional Service Costs | 722,987 | 447,890 |
| Stock Market & Investor Relations Costs | 187,376 | 409,361 |
| Other Administrative Costs | 781,001 | 1,326,079 |
| Total Administrative Expense | $2,088,632 | $2,867,904 |

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Personnel costs decreased $287,306 during the six months ended June 30, 2024. The decrease is related to the Company initiatives relating to reducing the number of employees implemented during the fourth quarter of 2023.

Professional services costs increased $275,097 during the six months ended June 30, 2024. These costs included legal and accounting and specialized consulting services regularly incurred in the normal course of business. The increase is primarily related to an increase in fees for specialized accounting services related to the fair market valuations for the various convertible preferred stock series.

Stock market and investor relations costs decreased $221,965 during the six months ended June 30, 2024. These costs include the annual Nasdaq listing fees, activities related to keeping the shareholder base informed through press releases, presentations and other communication efforts and the costs of annual shareholder meetings. The decrease is primarily due to the preparation costs associated with the 2023 annual shareholder meeting.

Other administrative expenses decreased $545,078 during the six months ended June 30, 2024. These costs include Board expenses, business insurance, corporate travel and other general operating expenses. The decrease is associated with a reimbursement of expenses to a related party as authorized by the Board of Directors in April 2023.

### Stock-Based Compensation

Stock-based compensation decreased $789,347 during the six months ended June 30, 2024. The decrease is related to the accelerated vesting of the June 7, 2023 stock options that occurred in the fourth quarter of 2023 which reduced the periodic recognition of costs, to the final vesting of the second tranche of the June 7, 2023 stock option, and to several forfeitures of unvested stock options related to separated employees.

### Warrant Issuance Expenses

Warrant issuance expenses associated with the issuance of the Series F-1 Convertible Preferred Stock and the Series G Convertible Preferred Stock and Warrants totaled $1,508,602. These costs included placement agent, legal, and accounting fees.

### Research and Development Expenses

The table below summarizes our research and development expenses for the six months ended June 30, 2024 and 2023:

| Description | For the Six Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: |
| Salaries and Wages | $553,219 | $789,718 |
| Development Programs | 954,087 | 1,995,604 |
| Professional Services | 79,406 | 136,624 |
| Regulatory Expenses | 390 | 7,100 |
| Other Research and Development Expenses | 12,940 | 65,828 |
| Total Research and Development Expenses | $1,600,042 | $2,994,874 |

Salaries and wages decreased $236,499 during the six months ended June 30, 2024. The decrease was associated with the Company initiatives relating to reducing the number of employees implemented during the fourth quarter of 2023 and to separations due to resignations during the three months ended June 30, 2024.

Development program costs include those associated with pre-clinical development, clinical trials and other material and development programs. Costs decreased $1,041,517 during the six months ended June 30, 2024 primarily due to the completion of the Phase II study for Sarcopenia during the year ended December 31, 2023.

Professional services costs decreased $57,218 during the six months ended June 30, 2024. These costs are primarily related to consulting services not related to a specific development program and legal and maintenance fees associated with the protection of our intellectual property.

Regulatory expenses decreased $6,710 during the six months ended June 30, 2024. These costs are associated with the development and management of the protocols used in various studies.

Other research and development expenses decreased $52,888 during the six months ended June 30, 2024. These expenses include laboratory supplies, training and travel for department personnel while working with third-party trial sites. The decrease during the three months ended June 30, 2024 is primarily related to expenses for seminars and travel.

### Other Income and Expense

The table below summarizes our other income and expenses for the six months ended June 30, 2024 and 2023:

| Description | For the Three Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: |
| Interest and Dividend Income | $(39,454) | $(200,675) |
| (Gain)/Loss on Investments | (100) | 214 |
| Loss on changes in fair value of Equity Investments | 975 | 2,695 |
| Gain on changes in fair value of Warrant Liabilities | 4,393,000 | (2,810,000) |
| (Gain)/Loss on changes in fair value of Derivative Liabilities | 11,000 | 315,200 |
| Loss on the issuance of preferred stock | 8,846,000 | - |
| Total Other (Income)/Expense | $13,211,421 | $(2,692,566) |

Other expenses, net of income, totaled $13,211,421 for the six months ended June 30, 2024, and other income, net of expense, totaled $2,692,566 for the six months ended June 30, 2023.

During the six months ended June 30, 2024 interest and dividend income decreased $161,221 primarily related to the availability of cash for investment.

During the six months ended June 30, 2024, we recorded a loss of $4,393,000 related to the change in fair value of the warrant liabilities as follows:

- For the Series F Warrants, the May 14, 2024 warrant modification resulted in the reclassification of the Series F Warrants to be considered equity classified as they were no longer in the scope of ASC 815. In accordance with ASC 815-40, we remeasured the Series F Warrant liabilities at $7,961,000 fair value as of March 31, 2024, the effective date of the modification, utilizing the Black Scholes Model using the following weighted average assumptions: dividend yield 0%; remaining term of 3.90 years; equity volatility of 110.0%; and a risk-free interest rate of 4.31%. and recorded a loss of $7,094,000 on the change in fair value and reclassified the $7,961,000 fair value of the Series F Warrants to additional paid-in capital as of March 31, 2024.
- For the Series F-1 Short-Term Warrants, we recorded a gain of $624,000, The fair value of the Series F-1 Short-Term warrants of approximately $2,682,000 was estimated at June 30, 2024 utilizing the Black Scholes Model using the following weighted average assumptions: dividend yield 0%; remaining term of 1.40 years; equity volatility of 115.0%; and a risk-free interest rate of 4.94%.
- For the Series F-1 Long-Term Warrants, we recorded a gain of $350,000, The fair value of the Series F-1 Long-Term warrants of approximately $4,277,000 was estimated at June 30, 2024 utilizing the Black Scholes Model using the following weighted average assumptions: dividend yield 0%; remaining term of 4.90 years; equity volatility of 120.0%; and a risk-free interest rate of 4.34%.
- For the Series G Short-Term Warrants, we recorded a gain of $1,107,000, The fair value of the Series F-1 Short-Term warrants of approximately $4,752,000 was estimated at June 30, 2024 utilizing the Black Scholes Model using the following weighted average assumptions: dividend yield 0%; remaining term of 1.40 years; equity volatility of 115.0%; and a risk-free interest rate of 4.94%.
- For the Series G Long-Term Warrants, we recorded a gain of $620,000, The fair value of the Series F-1 Long-Term warrants of approximately $7,580,000 was estimated at June 30, 2024 utilizing the Black Scholes Model using the following weighted average assumptions: dividend yield 0%; remaining term of 4.90 years; equity volatility of 120.0%; and a risk-free interest rate of 4.34%.

53

During the three months ended June 30, 2024, we recorded a loss of $11,000 related to the change in fair value of the derivative liabilities as follows:

- For the Series F Derivative,, we recorded a gain of $61,000 , We estimated the $0 fair value of the bifurcated embedded derivative at March 31, 2024 using a Monte Carlo simulation model, with the following inputs: the fair value of our common stock of $2.39 on the valuation date, estimated equity volatility of 95.0%, estimated traded volume volatility of 175.0%, the time to maturity of 0.25 year, a discounted market interest rate of 6.20%, dividend rate of 10.0%, a penalty dividend rate of 15.0%, and probability of default of 1.5%.
- For the Series F-1 Derivative, we recorded a loss of $72,000. We estimated the $926,000 fair value of the bifurcated embedded derivative at June 30, 2024 using a Monte Carlo simulation model, with the following inputs: the fair value of our common stock of $1.84 on the valuation date, estimated equity volatility of 120.0%, estimated traded volume volatility of 195.0%, the time to maturity of 1 year, a discounted market interest rate of 9.6%, dividend rate of 10.0%, a penalty dividend rate of 15.0%, and probability of default of 6.9%.

During the six months ended June 30, 2023, we recorded a loss associated with the issuance of the Series F-1 Convertible Preferred Stock totaling $3,737,000 and the Series G Convertible Preferred Stock totaling $5,109,000. The losses resulted from the fair market value of the issued warrants exceeding the sum of the gross proceeds, discount and derivative derived from the placement of the preferred shares.

### Liquidity and Capital Resources

As of June 30, 2024, the Company’s cash on hand was $536,026 and marketable securities were $12,530,326. The Company has incurred a total net loss attributable to stockholders of $21,344,896 for the six months ended June 30, 2024. As of June 30, 2024, the Company had working capital of $8,574,951 and stockholders’ equity of $97,805 including an accumulated deficit of $123,321,963. Since its inception, the Company has met its liquidity requirements principally through the sale of its Common and Preferred Stock in public and private placements.

Holders of the Company’s Series F Preferred Shares (as defined below) are entitled to certain dividends and amortization payments as described in the section titled “Series F Preferred Shares” below. Each payment may be made in cash or, at the Company’s option and subject to certain conditions, either in shares of Common Stock in an amount based on the Conversion Price (as defined below) in effect at the time that such payment is due or in a combination of cash and shares of Common Stock. If the Company elects to make all payments to the holders of the Series F Preferred Shares that fall due within the twelve-month period following June 30, 2023 in cash, the Company estimates that it will pay to the holders of the Series F Preferred Shares up to $14.3 million, assuming that a Triggering Event (as defined in the Certificate of Designation) has not occurred. The dividend rate is subject to adjustment, and the actual amount due to the holders of the Series F Preferred Shares may exceed such amount. If the Company elects to make all such payments in shares of Common Stock, based on the Conversion Price of $2.255 per share of Common Stock in effect as of June 30, 2023 and 12,500 shares of Series F Preferred Stock outstanding as of June 30, 2023, the Company estimates that it will issue to the holders of the Series F Preferred Shares up to 6.3 million shares of Common Stock. The Conversion Price is subject to adjustment, including based on the market price of the Company’s Common Stock during the thirty trading day period immediately prior to the date on which a payment is due to the holders of the Series F Preferred Shares, and the actual number of shares issuable to the holders of the Series F Preferred Shares may exceed such number. For more information regarding payments due to the holders of the Series F Preferred Shares, see the section titled “Series F Preferred Shares” below.

Management has evaluated the Company’s current cash requirements for operations in conjunction with management’s strategic plan and believes that the Company’s current financial resources as of the date of the issuance of these condensed consolidated financial statements, are sufficient to fund its current operating budget and contractual obligations as of June 30, 2024 as they fall due within the next twelve-month period, alleviating any substantial doubt raised by the Company’s historical operating results and satisfying its estimated liquidity needs for twelve months from the issuance of these condensed consolidated financial statements.

#### Operating Activities

During the six months ended June 30, 2024, cash flows used in operating activities were $4,580,551 consisting primarily of a net loss of $19,365,689, an increase in prepaid expenses of $398,154, a reduction in dividends payables of $154,843, and a non-cash gain on the fair market value of derivatives offset by non-cash loss on the fair value of warrants of 11,000, a non-cash loss on the issuance of preferred stock of $8,846,000, non-cash stock-based compensation of $956,992, an increase in trade and other payables of 900,295, and an increase in deferred compensation of $231,454.

Our net cash used in operating activities totaled $7,891,517, consisting primarily of a net loss of $5,679,385, an increase in prepaid expenses of $949,973, a reduction in trade and other payables of $516,769 and a non-cash change in the fair value of the warrant liabilities of $2,810,000, offset by non-cash stock-based compensation of $1,746,339 and non-cash change in the fair value of the derivative liabilities of $315,200.

#### Investing Activities

Our net cash consumed by investing activities totaled $10,289,095 for the six months ended June 30, 2024 as compared to $7,449,439 during the six months ended June 30, 2023. During the six months ended June 30, 2024, we purchased securities totaling $12,539,455 and sold securities totaling $2,250,3660. During the six months ended June 30, 2023, we purchased securities totaling $13,199,409 and sold securities totaling $5,749,970.

#### Financing Activities

Net cash provided by financing activities during the six months ended June 30, 2024 was $12,724,662 which consisted of payments for the redemption of Series F Convertible Preferred Stock and the related dividends and premiums and the proceeds from the sale of the Series F-1 Convertible Preferred Stock and the Series G Convertible Preferred Stock. Net cash provided by financing activities during the six months ended June 30, 2023 was $14,685,689, which consisted of the net proceeds from the sale of Series F Convertible Preferred Stock, net of offering costs.

#### February 2023 Offering

On February 21, 2023, we entered into a Securities Purchase Agreement (the “February 2023 SPA”) with certain accredited investors (the “Series F Investors”), pursuant to which we agreed to sell in a registered direct offering (the “February 2023 Offering”) (i) an aggregate of 15,000 shares (the “Series F Preferred Shares”) of our newly-designated Series F Convertible Preferred Stock, with a stated value of $1,000 per Preferred Share (the “Series F Preferred Stock”), convertible into shares of Common Stock (the “Series F Conversion Shares”) pursuant to the terms of the Certificate of Designations of the Series F Preferred Stock, which was subsequently amended and restated by the filing of the Amended and Restated Certificate of Designations of Series F Convertible Preferred Stock, effective April 8, 2024 (as amended and restated, the “Series F Certificate of Designation”), and (ii) warrants (the “Series F Warrants”) to acquire up to an aggregate of 6,651,885 shares of Common Stock (pre-split), subject to adjustment (the “Series F Warrant Shares”). The Series F Conversion Price (as defined below) is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Series F Conversion Price (subject to certain exceptions). Following the Reverse Stock Split, (i) the Series F Conversion Price was adjusted to $3.18 per share pursuant to the terms of the Series F Certificate of Designations, and (ii) the Series F Exercise Price (as defined below) was adjusted to $3.18 per share and the number of Series F Warrant Shares was adjusted proportionately to 4,716,904 shares pursuant to the terms of the Series F Warrants. In connection with the Private Placements (as defined herein), (i) the conversion price of the Series F Preferred Stock was adjusted to $1.816 per share pursuant to the full ratchet anti-dilution provisions contained in the Series F Certificate of Designations and, (ii) the exercise price of the Series F Warrants was adjusted to $1.816 per share and the number of shares of Common Stock issuable upon exercise of the Series F Warrants was adjusted proportionally to 8,259,911 shares pursuant to the full ratchet anti-dilution provisions contained in the Series F Warrants.

At closing, we received net proceeds from the February 2023 Offering of approximately $14.1 million, after deducting various fees and expenses. We have used and intend to continue to use the net proceeds from this offering for general corporate purposes.

As of June 30, 2024, there were 4,988 Series F Preferred Shares outstanding and Series F Warrants outstanding to purchase up to 8,259,911 shares of Common Stock.

#### Series F Preferred Shares

The terms of the Series F Preferred Shares are as set forth in the form of Certificate of Designation. The Series F Preferred Shares became convertible upon issuance into the Series F Conversion Shares at the election of the holder at any time at an initial conversion price of $2.255 (pre-split) (the “Series F Conversion Price”). The Conversion Price is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Conversion Price (subject to certain exceptions). Following the Reverse Stock Split, the Series F Conversion Price was adjusted to $3.18 per share pursuant to the terms of the Series F Certificate of Designations. The Series F Conversion Price was further adjusted to $1.816 per share pursuant to the full ratchet anti-dilutive provisions contained in the Series F Certificate of Designations in connection with the Private Placements (as defined herein).

Prior to the Series F Certificate of Amendment (as defined below), the Company was initially required to redeem the Series F Preferred Shares in 12 equal monthly installments, commencing on July 1, 2023. The amortization payments due upon such redemption are payable, at the Company’s election, in cash, or subject to certain limitations, in shares of Common Stock valued at the lower of (i) the Series F Conversion Price then in effect and (ii) the greater of (A) 80% of the average of the three lowest closing prices of the Company’s Common Stock during the thirty trading day period immediately prior to the date the amortization payment is due or (B) the Floor Price (as defined below). For purposes of the Series F Certificate of Designation, the “Floor Price” means $6.60 (subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or other similar events) or, in any case, such lower amount as permitted, from time to time, by the Nasdaq Stock Market.

On April 5, 2024, the Company entered into an Omnibus Waiver and Amendment (the “Omnibus Agreement”) with the Required Holders (as defined in the Certificate of Designation). Pursuant to the Omnibus Agreement, the Required Holders agreed (i) to defer payment of the installment amounts due on March 1, 2024, and April 1, 2024 (the “Installments”), under Section 9(a) of the Series F Certificate of Designations, until May 1, 2024, and (ii) to waive any breach or violation of the February 2023 SPA, the Series F Certificate of Designations, or the Series F Warrants resulting from missing the Installments. The Company may require holders to convert their Series F Preferred Shares into Series F Conversion Shares if the closing price of the Company’s Common Stock exceeds $6.765 (as adjusted for the Reverse Stock Split) per share (subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or other similar events) for 20 consecutive trading days and the daily dollar trading volume of the Company’s Common Stock exceeds $3,000,000 per day during the same period and certain equity conditions described in the Series F Certificate of Designations are satisfied.

On May 20, 2024, the Company entered into an Omnibus Waiver, Consent, Notice and Amendment (the “Series F Agreement”) with the Required Holders (as defined in the Series F Certificate of Designations). Pursuant to the Series F Agreement, the Required Holders agreed to (i) amend the Series F Purchase Agreement to amend certain terms relating to purchase rights thereunder, (ii) waive certain rights under the Series F Purchase Agreement and Series F Certificate of Designations in respect of the issuance of the Company’s Series F-1 Convertible Preferred Stock, with a par value of $0.001 per share and a stated value of $1,000 per share (“Series F-1 Preferred Stock”), the Company’s Series G Convertible Preferred Stock, with a par value of $0.001 per share and a stated value of $1,000 per share (“Series G Preferred Stock”), and entrance by the Company into the Purchase Agreements (as defined herein), (iii) waive the requirement that the Company reserve for issuance a sufficient number of shares of Common Stock as required by the Series F Certificate of Designations, the Series F Purchase Agreement and Series F Warrants, until such time as the Company obtains the Stockholder Approval (as defined herein), and (iv) consent to the issuance of the Series F-1 Preferred Stock and Series G Preferred Stock as required pursuant to certain terms of the Series F Certificate of Designations, the Series F Purchase Agreement and the Series F Warrants, as applicable. The Company and the Required Holders further agreed pursuant to the Series F Agreement, to amend the Series F Certificate of Designations by filing a Certificate of Amendment to the Series F Certificate of Designations (the “Series F Certificate of Amendment”) with the Secretary of State of the State of Delaware. The Series F Certificate of Amendment amends the Series F Certificate of Designations to (i) extend the maturity date to December 31, 2024, (ii) permit and modify certain procedures related to the payment of installment amounts with respect to the Installment Dates (as defined in the Series F Certificate of Designations) falling between (and including) July 1, 2024, and (and including) August 1, 2024, thereunder, and (iii) modify the schedule of Installment Dates.

The holders of the Series F Preferred Shares are entitled to dividends of 10% per annum, compounded monthly, which are payable in cash or shares of the Company’s Common Stock at the Company’s option, in accordance with the terms of the Series F Certificate of Designations. Upon the occurrence and during the continuance of a Triggering Event (as defined in the Series F Certificate of Designations), the Series F Preferred Shares accrue dividends at the rate of 15% per annum. In connection with a Triggering Event, each holder of Series F Preferred Shares is able to require the Company to redeem in cash any or all of the holder’s Series F Preferred Shares at a premium set forth in the Certificate of Designation. Upon conversion or redemption, the holders of the Series F Preferred Shares are also entitled to receive a dividend make-whole payment. Except as required by applicable law, the holders of the Series F Preferred Shares are entitled to vote with holders of the Common Stock on as as-converted basis, with the number of votes to which each holder of Series F Preferred Shares is entitled to be calculated assuming a conversion price of $60.21 per share, which was the Minimum Price (as defined in Rule 5635 of the Rule of the Nasdaq Stock Market) applicable immediately before the execution and delivery of the February 2023 SPA, subject to certain beneficial ownership limitations as set forth in the Certificate of Designation. The Series F Certificate of Designations further provides that the holders of record of the Series F Preferred Shares, exclusively and as a separate class, shall be entitled to elect one director of the Company one time on or before June 30, 2024.

The Company is subject to certain affirmative and negative covenants regarding the incurrence of indebtedness, acquisition and investment transactions, the existence of liens, the repayment of indebtedness, the payment of cash in respect of dividends (other than dividends pursuant to the Series F Certificate of Designations), distributions or redemptions, and the transfer of assets, among other matters. There is no established public trading market for the Series F Preferred Shares and the Company does not intend to list the Series F Preferred Shares on any national securities exchange or nationally recognized trading system.

#### Series F Warrants

The Series F Warrants became exercisable immediately upon issuance, have an exercise price of $2.255 per share (pre-split) (as adjusted, the “Series F Exercise Price”) and expire five years from the date of issuance. The Series F Exercise Price is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment, on a “full ratchet” basis, in the event of any issuances of the Company’s Common Stock, or securities convertible, exercisable or exchangeable for the Company’s Common Stock, at a price below the then-applicable Exercise Price (subject to certain exceptions). Upon any such price-based adjustment to the Series F Exercise Price, the number of February 2023 Warrant Shares issuable upon exercise of the Series F Warrants will be increased proportionately. The Series F Warrants were issued with an initial Exercise Price of $2.255 per share (pre-split). Following the Reverse Stock Split, the Exercise Price for the Series F Warrants was adjusted to $3.18 per share and the number of February 2023 Warrant Shares was adjusted to 4,716,904 shares pursuant to the terms of the Series F Warrants. There is no established public trading market for the Series F Warrants and the Company does not intend to list the Series F Warrants on any national securities exchange or nationally recognized trading system. In connection with the Private Placements (as defined herein), the Series F Exercise Price was adjusted to $1.816 per share and the number of shares of Common Stock issuable upon exercise of the Series F Warrants was adjusted proportionally to 8,259,911 shares pursuant to the full ratchet anti-dilution provisions contained in the Series F Warrants.

On May 14, 2024, the Company entered into an Amendment (the “Series F Amendment”) with the Investors in the February 2023 Offering, effective as of March 31, 2024. The Series F Amendment amended certain terms of the Series F Warrants relating to the rights of the holders of the Series F Warrants to provide that, in the event of a Fundamental Transaction (as defined in the Series F Warrants) that is not within our control, including not approved by the Company’s Board of Directors, the holder of a Series F Warrant shall only be entitled to receive from the Company or any successor entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of such Series F Warrant, that is being offered and paid to the holders of our common stock in connection with the Fundamental Transaction.

### May 2024 Private Placements

#### Series F-1 Private Placement

On May 20, 2024, the Company entered into a Securities Purchase Agreement (the “Series F-1 Purchase Agreement”) with certain accredited investors (the “Series F-1 Investors”) pursuant to which it agreed to sell to the Series F-1 Investors (i) an aggregate of 5,050 shares of the Company’s newly-designated Series F-1 Preferred Stock, initially convertible into up to 2,780,839 shares of Common Stock at a conversion price of $1.816 per share, (ii) short-term warrants to acquire up to an aggregate of 2,780,839 shares of Common Stock (the “Series F-1 Short-Term Warrants”) at an exercise price of $1.816 per share, and (iii) warrants to acquire up to an aggregate of 2,780,839 shares of Common Stock (the “Series F-1 Long-Term Warrants,” and collectively with the Series F-1 Short-Term Warrants, the “Series F-1 Warrants”) at an exercise price of $1.816 per share (collectively, the “Series F-1 Private Placement”). The closing of the Series F-1 Private Placements occurred on May 23, 2024 (the “Series F-1 Closing Date”).

#### Series F-1 Preferred Stock

The Series F-1 Preferred Stock became convertible upon issuance into Common Stock (the “Series F-1 Conversion Shares”) at the election of the holder at any time at an initial conversion price of $1.816 (the “Series F-1 Conversion Price”). The Series F-1 Conversion Price is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Series F-1 Conversion Price (subject to certain exceptions).

The Company is required to redeem the Series F-1 Preferred Stock in seven (7) equal monthly installments, commencing on December 1, 2024. The amortization payments due upon such redemption are payable, at the Company’s election, in cash at 105% of the applicable Installment Redemption Amount (as defined in the Series F-1 Certificate of Designations), or subject to certain limitations, in shares of Common Stock valued at the lower of (i) the Series F-1 Conversion Price then in effect and (ii) the greater of (A) 80% of the average of the three lowest closing prices of the Company’s Common Stock during the thirty consecutive trading day period ending and including the trading day immediately prior to the date the amortization payment is due or (B) $0.364, which is 20% of the “Minimum Price” (as defined in Nasdaq Stock Market Rule 5635) on the date in which the Series F-1 Stockholder Approval (as defined herein) was obtained or, in any case, such lower amount as permitted, from time to time, by the Nasdaq Capital Market, and, in each case, subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or other similar events, which amortization amounts are subject to certain adjustments as set forth in the Series F-1 Certificate of Designations (the “Series F-1 Floor Price”).

The holders of the Series F-1 Preferred Stock are entitled to dividends of 10% per annum, compounded monthly, which are payable in arrears monthly in cash or shares of Common Stock at the Company’s option, in accordance with the terms of the Series F-1 Certificate of Designations. Upon the occurrence and during the continuance of a Triggering Event (as defined in the Series F-1 Certificate of Designations), the Series F-1 Preferred Stock will accrue dividends at the rate of 15% per annum. Upon conversion or redemption, the holders of the Series F-1 Preferred Stock are also entitled to receive a dividend make-whole payment. The holders of the Series F-1 Preferred Stock are entitled to vote with holders of the Common Stock on as as-converted basis, with the number of votes to which each holder of Series F-1 Preferred Stock is entitled to be calculated assuming a conversion price of $2.253 per share, which was the Minimum Price applicable immediately before the execution and delivery of the Series F-1 Purchase Agreement, subject to certain beneficial ownership limitations as set forth in the Series F-1 Certificate of Designations.

Notwithstanding the foregoing, the Company’s ability to settle conversions and make amortization and dividend make-whole payments using shares of Common Stock is subject to certain limitations set forth in the Series F-1 Certificate of Designations. Further, the Series F-1 Certificate of Designations contains a certain beneficial ownership limitation after giving effect to the issuance of shares of Common Stock issuable upon conversion of, or as part of any amortization payment or dividend make-whole payment under, the Series F-1 Certificate of Designations or Series F-1 Warrants.

#### Series F-1 Warrants

Pursuant to the Series F-1 Private Placement, the Company issued to investors (i) the Series F-1 Long-Term Warrants to purchase 2,780,839 shares of Common Stock, with an exercise price of $1.816 per share (subject to adjustment), for a period of five years from the date of issuance and (ii) the Series F-1 Short-Term Warrants to purchase 2,780,839 shares of Common Stock, with an exercise price of $1.816 per share (subject to adjustment), for a period of eighteen months from the date of issuance.

The exercise price of the Series F-1 Warrants and the number of shares issuable upon exercise of the Series F-1 Warrants are subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment, on a “full ratchet” basis, in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable exercise price (subject to certain exceptions). Upon any such price-based adjustment to the exercise price, the number of shares issuable upon exercise of the Series F-1 Warrants will be increased proportionately.

On August 16, 2024, the Company entered into (i) an Amendment (the “Series F-1 Long Term Warrant Amendment”) with the Series F-1 Investors, effective as of June 30, 2024 relating to the Series F-1 Long Term Warrants, and (ii) an Amendment (the “Series F-1 Short-Term Warrant Amendment” and, together with the Series F-1 Long Term Warrant Amendment, the “Series F-1 Warrant Amendments”) with the Series F-1 Investors, effective as of June 30, 2024 relating to the Series F-1 Short Term Warrants. The Series F-1 Warrant Amendments modified certain terms of the Series F-1 Warrants relating to the rights of the holders of the Series F-1 Warrants to provide that, in the event of a Fundamental Transaction (as defined in the Series F-1 Warrants) that is not within the Company’s control, including the Fundamental Transaction not being approved by the Company’s Board of Directors, the holder of the Series F-1 Warrant shall only be entitled to receive from the Company or any successor entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value (as defined in the Series F-1 Warrants) of the unexercised portion of such Series F-1 Warrant, that is being offered and paid to the holders of the Company’s Common Stock in connection with the Fundamental Transaction. Additionally, the Series F-1 Warrant Amendments amend the definition of Black Scholes Value related to the volatility input which is now an expected volatility equal to the 30 day volatility, obtained from the “HVT” function on Bloomberg (determined utilizing a 365 day annualization factor) as of the trading day immediately following the earliest to occur of (1) the public disclosure of the applicable Fundamental Transaction and (2) the date of a holder’s request. The modification resulted in the reclassification of the Series F-1 Warrants to be considered equity classified as they were no longer in the scope of ASC 815. In accordance with ASC 815-40, the Company remeasured the Series F-1 Warrants at fair value as of July 25, 2024, the effective date of the modifications, and recognized the change in fair value as a non-cash loss and reclassified the Series F-1 Warrants to additional paid-in capital as of July 25, 2024.

#### Series G Private Placement

On May 20, 2024, the Company entered into a Securities Purchase Agreement (the “Series G Purchase Agreement”) and collectively with the Series F-1 Purchase Agreement, each a “Purchase Agreement” and collectively, the “Purchase Agreements”) with certain accredited investors (the “Series G Investors” and collectively with the Series F-1 Investors, the “Investors”), pursuant to which it agreed to sell to the Series G Investors (i) an aggregate of 8,950 shares of the Company’s newly-designated Series G Preferred Stock, initially convertible into up to 4,928,416 shares of the Company’s Common Stock, at a conversion price of $1.816 per share (ii) short-term warrants to acquire up to an aggregate of 4,928,416 shares of Common Stock (the “Series G Short-Term Warrants”) at an exercise price of $1.816 per share, and (iii) warrants to acquire up to an aggregate of 4,928,416 shares of Common Stock (the “Series G Long-Term Warrants,” and collectively with the Series G Short-Term Warrants, the “Series G Warrants”) at an exercise price of $1.816 per share (collectively, the “Series G Private Placement” and collectively with the Series F-1 Private Placement, each a “Private Placement” and collectively, the “Private Placements”). The closing of the Series G Private Placement occurred on May 23, 2024 (the “Series G Closing Date” and, together with the Series F-1 Closing Date, the “Closing Date”)).

#### Series G Preferred Stock

The Series G Preferred Shares became convertible upon issuance into Common Stock (the “Series G Conversion Shares”) at the election of the holder at any time at an initial conversion price of $1.816 (the “Series G Conversion Price”). The Series G Conversion Price is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Series G Conversion Price (subject to certain exceptions). At any time after the issuance date of the Series G Preferred Shares, the Company has the option to redeem in cash all or any portion of the shares of Series G Preferred Shares then outstanding at a premium upon notice by the Company to all holders of the Series G Preferred Shares.

The holders of the Series G Preferred Shares will be entitled to dividends of 10% per annum, compounded monthly, which will be payable in arrears monthly at the holder’s option (i) in cash, (ii) “in kind” in the form of additional shares of Series G Preferred Shares (the “PIK Shares”) or (iii) in combination thereof, in each case, in accordance with the terms of the Certificate of Designations of the Series G Preferred Shares (the “Series G Certificate of Designations”). Upon the occurrence and during the continuance of a Triggering Event (as defined in the Series G Certificate of Designations), the Series G Preferred Stock will accrue dividends at the rate of 15% per annum. Upon conversion or redemption, the holders of the Series G Preferred Shares are also entitled to receive a dividend make-whole payment. The holders of the Series G Preferred Shares will be entitled to vote with holders of the Common Stock on as as-converted basis, with the number of votes to which each holder of Series G Preferred Share is entitled to be calculated assuming a conversion price of $2.253 per share, which was the Minimum Price (as defined in Rule 5635 of the Rule of the Nasdaq Stock Market) applicable immediately before the execution and delivery of the Series G Purchase Agreement, subject to certain beneficial ownership limitations as set forth in the Series G Certificate of Designations.

Notwithstanding the foregoing, the Company’s ability to settle conversions and make dividend make-whole payments using shares of Common Stock is subject to certain limitations set forth in the Series G Certificate of Designations. Further, the Series G Certificate of Designations contains a certain beneficial ownership limitation, which applies to each Series G Investor other than PharmaCyte Biotech, Inc., after giving effect to the issuance of shares of Common Stock issuable upon conversion of the Series G Preferred Shares or as part of any dividend make-whole payment under the Series G Certificate of Designations.

On June 17, 2024, the Company entered into an Amendment Agreement (the “Series G Amendment”) with the Required Holders (as defined in the Series G Certificate of Designations). Pursuant to the Series G Amendment, the Required Holders agreed to amend the Series G Certificate of Designations by filing a Certificate of Amendment (“Series G Certificate of Amendment”) to the Series G Certificate of Designations with the Secretary of State of the State of Delaware (the “Secretary of State”) to increase the number of authorized shares of Series G Preferred Stock from 8,950 to 12,826,273, in order to authorize a sufficient number of shares of Series G Preferred Stock for the payment of PIK Shares. On June 17, 2024, the Company filed the Series G Certificate of Amendment with the Secretary of State, thereby amending the Series G Certificate of Designations. The Series G Certificate of Amendment became effective with the Secretary of State upon filing.

On August 8, 2024, the Company entered into an Amendment Agreement (the “August Series G Amendment”) with the Required Holders (as defined in the Series G Certificate of Designations). Pursuant to the August Series G Amendment, the Required Holders agreed to amend the Series G Certificate of Designations by filing a Certificate of Amendment (“August Series G Certificate of Amendment”) to the Series G Certificate of Designations with the Secretary of State to adjust the calculation of the PIK Shares. On August 8, 2024, the Company filed the August Series G Certificate of Amendment with the Secretary of State, thereby amending the Series G Certificate of Designations. The August Series G Certificate of Amendment became effective with the Secretary of State upon filing.

#### Series G Warrants

Pursuant to the Series G Private Placement, the Company issued to investors (i) the Series G Long-Term Warrants to purchase 4,928,416 shares of Common Stock, with an exercise price of $1.816 per share (subject to adjustment), for a period of five years from the date of issuance and (ii) the Series G Short-Term Warrants to purchase 4,928,416 shares of Common Stock, with an exercise price of $1.816 per share (subject to adjustment), for a period of eighteen months from the date of issuance.

The exercise price of the Series G Warrants and the number of shares issuable upon exercise of the Series G Warrants are subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment, on a “full ratchet” basis, in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable exercise price (subject to certain exceptions). Upon any such price-based adjustment to the exercise price, the number of shares issuable upon exercise of the Series G Warrants will be increased proportionately.

On August 16, 2024, the Company entered into (i) an Amendment (the “Series G Long Term Warrant Amendment”) with the Series G Investors, effective as of June 30, 2024 relating to the Series G Long Term Warrants, and (ii) an Amendment (the “Series G Short Term Warrant Amendment” and, together with the Series G Long Term Warrant Amendment, the “Series G Warrant Amendments”) with the Series G Investors, effective as of June 30, 2024 relating to the Series G Short Term Warrants. The Series G Warrant Amendments modified certain terms of the Series G Warrants relating to the rights of the holders of the Series G Warrants to provide that, in the event of a Fundamental Transaction (as defined in the Series G Warrants) that is not within the Company’s control, including the Fundamental Transaction not being approved by the Company’s Board of Directors, the holder of the Series G Warrant shall only be entitled to receive from the Company or any successor entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value (as defined in the Series G Warrants) of the unexercised portion of such Series G Warrant, that is being offered and paid to the holders of the Company’s Common Stock in connection with the Fundamental Transaction. Additionally, the Series G Warrant Amendments amend the definition of Black Scholes Value related to the volatility input which is now an expected volatility equal to the 60 day volatility, obtained from the “HVT” function on Bloomberg (determined utilizing a 365 day annualization factor) as of the trading day immediately following the earliest to occur of (1) the public disclosure of the applicable Fundamental Transaction and (2) the date of a holder’s request. The modification resulted in the reclassification of the Series G Warrants to be considered equity classified as they were no longer in the scope of ASC 815. In accordance with ASC 815-40, the Company remeasured the Series G Warrants at fair value as of July 25, 2024, the effective date of the modifications, and recognized the change in fair value as a non-cash gain and reclassified the warrant liability to additional paid-in capital as of July 25, 2024.

#### Private Placement Warrants

In connection with the Private Placements, pursuant to (A) an engagement letter (the “GPN Agreement”) with GP Nurmenkari Inc. (“GPN”) and (B) an engagement letter (the “Palladium Agreement,” and collectively with the GPN Agreement, the “Engagement Letters”) with Palladium Capital Group, LLC (“Palladium,” and collectively with GPN, the “Placement Agents”), the Company engaged the Placement Agents to act as non-exclusive placement agents in connection with each Private Placement, pursuant to which, the Company agreed to (i) pay the Placement Agents a cash fee equal to 3% of the gross proceeds of each Private Placement (including any cash proceeds realized by the Company from the exercise of the Series F Warrants), (ii) reimbursement and payment of certain expenses, and (iii) issue to the Placement Agents on the Closing Date, warrants to purchase up to an aggregate of 693,833 of shares of Common Stock to each Placement Agent, which is equal to 3% of the aggregate number of shares of Common Stock underlying the securities issued in each Private Placement, including upon exercise of any Series F Warrants, with terms identical to the Series G Long-Term Warrants and Series F-1 Long-Term Warrants.

#### Registration Rights Agreements

In connection with the Series G Private Placement, we entered into a Registration Rights Agreement with the Series G Investors (the “Series G Registration Rights Agreement”), pursuant to which we agreed to file a resale registration statement (the “Series G Registration Statement”) with the SEC to register for resale 200% of the Series G Conversion Shares, (B) 200% of the shares of common stock issuable upon conversion of the PIK Shares, and (C) 200% of the Series G Warrant Shares promptly following the Closing Date, but in no event later than 30 calendar days after the Closing Date, and to have such Series G Registration Statement declared effective by the Effectiveness Deadline (as defined in the Series G Registration Rights Agreement).

In connection with the Series F-1 Private Placement, we entered into a Registration Rights Agreement with the Series F-1 Investors (the “Series F-1 Registration Rights Agreement,” and, together with the Series G Registration Rights Agreement, the “Registration Rights Agreements”), pursuant to which we agreed to file a resale registration statement (the “Series F-1 Registration Statement”) with the SEC to register for resale 200% of the Series F-1 Conversion Shares and (B) 200% of the Series F-1 Warrant Shares promptly following the Closing Date, but in no event later than 30 calendar days after the Closing Date, and to have such Series F-1 Registration Statement declared effective by the Effectiveness Deadline (as defined in the Series F-1 Registration Rights Agreement).

In connection with the Registration Rights Agreements, the Company filed a registration statement on Form S-3 covering such securities, which registration statement was filed on June 21, 2024, amended on August 8, 2024 and declared effective by the SEC on August 12, 2024. Under the Series F-1 Registration Rights Agreement, we are obligated to pay certain liquidated damages to the Series F-1 Investors if the Company failed to file the Series F-1 Registration Statement when required, failed to file or cause the Series F-1 Registration Statement to be declared effective by the SEC when required, or fails to maintain the effectiveness of the Series F-1 Registration Statement.

### Critical Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements. The most significant accounting estimates inherent in the preparation of our financial statements include estimates associated with the determinations of the fair-market value of the preferred stock, stock-based compensation, and the impairment analysis of intangibles.

Our financial position, results of operations and cash flows are impacted by the accounting policies we have adopted. In order to get a full understanding of our financial statements, one must have a clear understanding of the accounting policies employed. A summary of our critical accounting policies is presented within the notes to our consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

Our management’s discussion and analysis of financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of our financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. These items are monitored and analyzed by us for changes in facts and circumstances, and material changes in these estimates could occur in the future. We base our estimates on historical experience, known trends and events, and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may materially differ from these estimates under different assumptions or conditions.

Our critical accounting estimates have not changed materially from those previously reported in our Annual Report for the year ended December 31, 2023, on Form 10-K, as filed with the SEC on April 1, 2024.

## Market risk

As filed, 182 characters.

There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company.

## Controls and procedures

As filed, 1,234 characters.

### Evaluation of Disclosure Controls and Procedures

Our principal executive officer and principal financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”) Rule 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q, have concluded that, based on such evaluation, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our principal executive officer and principal financial officer as appropriate to allow timely decisions regarding required disclosure.

### Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 11,629 characters.

The following description of risk factors includes any material changes to, and supersedes the description of, risk factors associated with our business, financial condition and results of operations previously disclosed in “Item 1A. Risk Factors” of our Annual Report for the year ended December 31, 2023 on Form 10-K, as filed with the SEC on April 1, 2024. Our business, financial condition and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to those described below, any one or more of which could, directly or indirectly, cause our actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results and stock price.

The following discussion of risk factors contains forward-looking statements. These risk factors may be important to understanding other statements in this Form 10-Q. The following information should be read in conjunction with the condensed consolidated financial statements and related notes in Part I, Item 1, “Financial Statements” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-Q.

***Holders of our Series F Preferred Stock, Series F-1 Preferred Stock and Series G Preferred Stock are entitled to certain payments under the applicable Certificate of Designations that may be paid in cash, in shares of Common Stock or in additional shares of Series G Preferred Stock depending on the circumstances. If we make these payments in cash, it may require the expenditure of a substantial portion of our cash resources. If we make these payments in Common Stock, it may result in substantial dilution to the holders of our Common Stock.***

Under the Series F Certificate of Designations and Series F-1 Certificate of Designations, we are required to redeem the shares of the shares of the Series F Preferred Stock and Series F-1 Preferred Stock in equal monthly installments commencing July 1, 2023, and December 1, 2024, respectively. Such holders are also entitled to receive dividends, payable in arrears monthly, and dividends payable on installment dates shall be paid as part of the applicable installment amount. Installment amounts are payable, at the Company’s election, in shares of Common Stock or, subject to certain limitations, in cash. Installment amounts paid in cash must be paid in the amount of 105% of the applicable payment amount due.

Our ability to make payments due to the holders of our Series F Preferred Stock and Series F-1 Preferred Stock using shares of Common Stock is subject to certain limitations set forth in the applicable Certificate of Designations. If we are unable to make installment payments in shares of Common Stock, we may be forced to make such payments in cash. Additionally, the holders of the Series G Preferred Stock are entitled to dividends of 10% per annum, compounded monthly, which are payable in arrears monthly, at the holder’s sole discretion, in cash, or “in kind” in the form of additional Series G Preferred Stock, or a combination thereof. If we do not have sufficient cash resources to make these payments, we may need to raise additional equity or debt capital, and we cannot provide any assurance that we will be successful in doing so. If are unable to raise sufficient capital to meet our payment obligations, we may need to delay, reduce or eliminate certain research and development programs or other operations, sell some or all of our assets or merge with another entity.

Our ability to make payments due to the holders of our Series F Preferred Stock, Series G Preferred Stock, Series F-1 Preferred Stock using cash is also limited by the amount of cash we have on hand at the time such payments are due as well as certain provisions of the Delaware General Corporation Law (the “DGCL”). Further, we intend to make the installment payments due to holders of Series F Preferred Stock and Series F-1 Preferred Stock in the form of Common Stock to the extent allowed under the applicable Certificate of Designation and applicable law in order to preserve our cash resources. The issuance of shares of Common Stock to the holders of our Series F Preferred Stock and Series F-1 Preferred Stock with increase the number of shares of Common Stock outstanding and could result in substantial dilution to the existing holders of our Common Stock.

***The Certificate of Designations for the Series F Preferred Stock, Series F-1 Preferred Stock and Series G Preferred Stock and the warrants issued concurrently therewith contain anti-dilution provisions that may result in the reduction of the conversion price of the applicable preferred stock or the exercise price of such warrants in the future. These features may increase the number of shares of Common Stock being issuable upon conversion of the Series F Preferred Stock, Series F-1 Preferred Stock and Series G Preferred Stock or upon the exercise of the warrants.***

The Series F Certificate of Designations, Series F-1 Certificate of Designations and Series G Certificate of Designations and the warrants issued concurrently therewith, contain anti-dilution provisions, which provisions require the lowering of the applicable conversion price or exercise, as then in effect, to the purchase price of equity or equity-linked securities issued in subsequent offerings. If in the future, while any of our Series F Preferred Stock, Series F-1 Preferred Stock, Series G Preferred Stock, Series F Warrants, Series F-1 Warrants or Series G Warrants are outstanding, we issue securities for a consideration per share of Common Stock (the “New Issuance Price”) that is less than the applicable conversion price of our preferred stock or the exercise price of the Series F Warrants, Series F-1 Warrants or Series G Warrants, as then in effect, we will be required, subject to certain limitations and adjustments as provided in the applicable Certificate of Designations or the applicable warrants, to reduce the conversion price or the exercise price to be equal to the New Issuance Price, which will result in a greater number of shares of Common Stock being issuable upon conversion or exercise, as applicable, which in turn will increase the dilutive effect of such conversion or exercise on existing holders of our Common Stock. It is possible that we will not have a sufficient number of shares available to satisfy the conversion of the Series F Preferred Stock, Series F-1 Preferred Stock or Series G Preferred Stock or the exercise of the Series F Warrants, Series F-1 Warrants or Series G Warrants if we enter into a future transaction that reduces the applicable conversion price or exercise price. If we do not have a sufficient number of available shares for any such conversions or any such warrant exercises, we may need to seek shareholder approval to increase the number of authorized shares of our Common Stock, which may not be possible and will be time consuming and expensive. The potential for such additional issuances may depress the price of our Common Stock regardless of our business performance and may make it difficult for us to raise additional equity capital while any of our Series F Preferred Stock, Series F-1 Preferred Stock, Series G Preferred Stock or Series F Warrants, Series F-1 Warrants or Series G Warrants are outstanding.

***Under the February 2023 SPA and Purchase Agreements, we are subject to certain restrictive covenants that may make it difficult to procure additional financing.***

The February 2023 SPA, pursuant to which we issued the Series F Preferred Stock, contains, among others, the following restrictive covenants: (i) until all of the Series F Warrants are exercised, we agreed not to enter into any variable rate transactions; and (ii) until the later of no shares of Series F Preferred Stock being outstanding and the maturity date of the Series F Preferred Stock, the opportunity to participate in any subsequent securities offerings by us. The Series F-1 Purchase Agreement, pursuant to which we issued the Series F-1 Preferred Stock, contains, among others, the following restrictive covenants: (i) until all of the Series F-1 Warrants are exercised, we agreed not to enter into any variable rate transactions; and (ii) until the later of no shares of Series F-1 Preferred Stock being outstanding and the maturity date, the opportunity to participate in any subsequent securities offerings by us. The Series G Purchase Agreement, pursuant to which we issued the Series G Preferred Stock, contains, among others, the following restrictive covenants: (i) until all of the Series G Warrants are exercised, we agreed not to enter into any variable rate transactions; and (ii) until the later of no shares of Series G Preferred Stock being outstanding and the second anniversary of the Series G Closing Date, the opportunity to participate in any subsequent securities offerings by us.

If we require additional funding while these restrictive covenants remain in effect, we may be unable to effect a financing transaction while remaining in compliance with the terms of the February 2023 SPA or Purchase Agreements, or we may be forced to seek a waiver from the investors party to the February 2023 SPA and Purchase Agreements.

***We may not be able to adequately protect or enforce our intellectual property rights, which could harm our competitive position.***

Our success and future revenue growth will depend, in part, on our ability to protect our intellectual property. We will primarily rely on patent, copyright, trademark, and trade secret laws, as well as nondisclosure agreements and other methods, to protect our proprietary technologies or processes. It is possible that competitors or other unauthorized third parties may obtain, copy, use or disclose proprietary technologies and processes, despite efforts by the us to protect our proprietary technologies and processes. While we hold rights in several patents, there can be no assurances that any additional patents will be issued, or additional rights will be granted, to us. Even if new patents are issued, the claims allowed may not be sufficiently broad to adequately protect our technology and processes. Our competitors may also be able to develop similar technology independently or design around the patents to which we have rights.

Currently, the Company has 17 issued U.S. patents, 68 foreign patents, two pending U.S. patent applications and 7 foreign patent applications pending in such jurisdictions as Australia, Canada, China, European Union, Israel, Japan, and South Korea and one pending international patent application, which if issued are expected to expire between 2036 and 2041. Although we expect to obtain additional patents and in-licenses in the future, there is no guarantee that we will be able to successfully obtain such patents or in-licenses in a timely manner or at all. Further, any of our rights to existing patents, and any future patents issued to us, may be challenged, invalidated, or circumvented. As such, any rights granted under these patents may not provide us with meaningful protection. Even if foreign patents are granted, effective enforcement in foreign countries may not be available. If our patents or rights to patents do not adequately protect our technology or processes, competitors may be able to offer products similar to our products.

Filed Aug 19, 2024.
Source: SEC EDGAR, the filing index for accession 0001493152-24-032940. Last ingested by Listed: Oct 24, 2026, 15:11 ET. No prices; not investment advice.