SAN DIEGO, Oct. 23, 2024 (GLOBE NEWSWIRE) -- Calidi Biotherapeutics, Inc. (NYSE AMERICAN: CLDI) (“Calidi” or the “Company”), a clinical-stage biotechnology company developing a new generation of targeted immunotherapies, today announced that it has entered into a definitive securities purchase agreement with certain institutional investors for the purchase and sale of 2,050,000 shares of the Company’s common stock at a price of $1.00 per share of common stock in a registered direct offering. In addition, in ...

SAN DIEGO, Oct. 18, 2024 (GLOBE NEWSWIRE) -- Calidi Biotherapeutics, Inc. (NYSE American: CLDI) ("Calidi"), a clinical-stage biotechnology company developing a new generation of targeted antitumor virotherapies, today announced that the staff of NYSE Regulation has determined to commence proceedings to delist the warrants — ticker symbol CLDI WS — of Calidi Biotherapeutics, Inc. (the "Company"), each whole warrant exercisable for 1/10th of a share of common stock at an exercise price of $115.00 per whole sh ...

[Press Release Overview](index=1&type=section&id=Press%20Release%20Overview) Calidi Biotherapeutics' Q2 2024 report highlights the launch of Nova Cell, key leadership appointments, and a new U.S. patent [Q2 2024 Key Highlights](index=1&type=section&id=Q2%202024%20Key%20Highlights) Calidi Biotherapeutics reported its Q2 2024 operating and financial results, highlighting the launch of its Nova Cell subsidiary with a $2 million investment, the strengthening of its leadership team with key appointments, and the receipt of a new U.S. patent for its SuperNova technology, advancing its CLD-201 program - Launched Nova Cell subsidiary with a **$2 million investment** from Dr. Ronald Rigor to advance Calidi's Adult Adipose Allogeneic (AAA) stem cell innovative programs[1](index=1&type=chunk) - Strengthened the team with the appointment of Dr. George E. Peoples to the Board of Directors and Dr. Mark Gilbert to the Medical Advisory Board[1](index=1&type=chunk) - Received a new U.S. patent for the company's novel SuperNova technology, positioning Calidi to advance its CLD-201 program into the clinic[1](index=1&type=chunk) [Second Quarter 2024 and Recent Corporate Developments](index=1&type=section&id=Second%20Quarter%202024%20and%20Recent%20Corporate%20Developments) This section details Calidi's strategic investments, leadership appointments, intellectual property advancements, and capital raising activities during Q2 2024 [Strategic Investments and Subsidiaries](index=1&type=section&id=Strategic%20Investments%20and%20Subsidiaries) Calidi announced a $2 million strategic investment by Dr. Ronald Rigor into its new subsidiary, Nova Cell, Inc., formed to develop innovative stem cell-based products. Dr. Rigor also made an additional $1 million investment directly into Calidi's oncology pipeline - Nova Cell, Inc. was launched with a **$2 million strategic investment** from Dr. Ronald Rigor in July 2024 to advance Calidi's Adult Adipose Allogeneic (AAA) stem cell programs[2](index=2&type=chunk) - Dr. Rigor invested an additional **$1 million** into Calidi to further its oncology pipeline assets and was appointed as a member of Calidi's Scientific and Medical Advisory Board[2](index=2&type=chunk) [Board and Advisory Appointments](index=1&type=section&id=Board%20and%20Advisory%20Appointments) The company strengthened its leadership by appointing Dr. George Peoples, a Professor of Surgery and Surgical Oncology, to its Board of Directors, and Dr. Mark Gilbert, former Chief of Neuro-Oncology Branch at NIH, to its Medical Advisory Board - Dr. George Peoples, MD, FACS, Professor of Surgery and adjunct Professor of Surgical Oncology at MD Anderson Cancer Center, was appointed as a Class II director to the Board of Directors[2](index=2&type=chunk) - Dr. Mark Gilbert, MD, scientist emeritus at NIH and former Chief of the Neuro-Oncology Branch, was appointed to the Calidi Medical Advisory Board[1](index=1&type=chunk)[3](index=3&type=chunk) [Intellectual Property and Technology Advancement](index=1&type=section&id=Intellectual%20Property%20and%20Technology%20Advancement) Calidi secured a new U.S. patent for its SuperNova technology platform, which involves incubating cells with an oncolytic virus to express immunomodulatory proteins, enhancing viral delivery to tumor sites by shielding the payload from the immune system - Received a patent covering the novel SuperNova technology platform, which combines stem cells and an oncolytic virus for a defined period, allowing expression of immunomodulatory proteins and shielding the viral payload from the immune system for targeted delivery to tumor sites[1](index=1&type=chunk)[3](index=3&type=chunk) - The SuperNova platform is composed of adipose-derived mesenchymal stem cells loaded with oncolytic vaccinia virus[3](index=3&type=chunk) [Capital Raising Activities](index=1&type=section&id=Capital%20Raising%20Activities) Calidi generated $2.5 million in gross proceeds during July and August 2024 through the exercise of warrants - Received **$2.5 million in gross proceeds** during July and August 2024 pursuant to warrant exercises[4](index=4&type=chunk) [Second Quarter Financial Results](index=2&type=section&id=Second%20Quarter%20Financial%20Results) This section presents Calidi Biotherapeutics' financial performance for the second quarter of 2024, including net loss, expenses, and balance sheet details [Summary Financial Performance](index=2&type=section&id=Summary%20Financial%20Performance) Calidi reported a reduced net loss of $5.8 million, or $1.40 per share, for Q2 2024, significantly down from $12.5 million, or $14.24 per share, in Q2 2023. Research and development expenses decreased, while general and administrative expenses slightly increased. Cash and restricted cash totaled $1.0 million as of June 30, 2024 Summary Financial Performance (in thousands) | Metric | Q2 2024 (in thousands) | Q2 2023 (in thousands) | Change (YoY) | | :----- | :--------------------- | :--------------------- | :----------- | | Net Loss | $(5,767) | $(12,501) | Improved by $6,734 | | Net Loss per Share | $(1.40) | $(14.24) | Improved by $12.84 | | R&D Expenses | $(2,167) | $(3,177) | Decreased by $1,010 | | G&A Expenses | $(3,605) | $(3,360) | Increased by $245 | | Cash (as of June 30, 2024 / Dec 31, 2023) | $836 (June 30, 2024) | $1,949 (Dec 31, 2023) | Decreased by $1,113 | | Restricted Cash (as of June 30, 2024 / Dec 31, 2023) | $200 (June 30, 2024) | $200 (Dec 31, 2023) | No change | [Detailed Financial Statements](index=2&type=section&id=Detailed%20Financial%20Statements) This section provides a comprehensive breakdown of Calidi Biotherapeutics' financial position and operational results through its condensed consolidated balance sheets and statements of operations [Condensed Consolidated Balance Sheets](index=2&type=section&id=CALIDI%20BIOTHERAPEUTICS%2C%20INC.%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) This table presents Calidi Biotherapeutics' financial position, detailing assets, liabilities, and stockholders' deficit as of June 30, 2024, and December 31, 2023 Condensed Consolidated Balance Sheets (in thousands) | ASSETS (in thousands) | June 30, 2024 (Unaudited) | December 31, 2023 | | :-------------------- | :------------------------ | :---------------- | | **CURRENT ASSETS** | | | | Cash | $836 | $1,949 | | Prepaid expenses and other current assets | $789 | $2,354 | | Total current assets | $1,625 | $4,303 | | **NONCURRENT ASSETS** | | | | Machinery and equipment, net | $1,061 | $1,270 | | Operating lease right-of-use assets, net | $3,518 | $4,073 | | Other noncurrent assets | $227 | $373 | | **TOTAL ASSETS** | **$6,431** | **$10,019** | | **LIABILITIES AND STOCKHOLDERS' DEFICIT** | | | | **CURRENT LIABILITIES** | | | | Accounts payable | $4,460 | $2,796 | | Related party accounts payable | $87 | $81 | | Accrued expenses and other current liabilities | $3,236 | $4,896 | | Related party accrued expenses and other current liabilities | $504 | $536 | | Term notes payable, net of discount, including accrued interest | $233 | $529 | | Related party term notes payable, net of discount, including accrued interest | $2,539 | $278 | | Related party bridge loan payable, including accrued interest | $211 | — | | Related party other current liability | $597 | — | | Finance lease liability, current | $68 | $81 | | Operating lease right-of-use liability, current | $1,117 | $1,035 | | Total current liabilities | $13,052 | $10,232 | | **NONCURRENT LIABILITIES** | | | | Operating lease right-of-use liability, noncurrent | $2,461 | $3,037 | | Finance lease liability, noncurrent | $180 | $216 | | Convertible notes payable, including accrued interest | $1,925 | — | | Warrant liability | $524 | $623 | | Related party warrant liability | $41 | $48 | | Related party term notes payable, net of discount, including accrued interest | — | $2,060 | | Other noncurrent liabilities | — | $1,500 | | Related party other noncurrent liabilities | — | $538 | | **TOTAL LIABILITIES** | **$18,183** | **$18,254** | | **STOCKHOLDERS' DEFICIT** | **$(11,752)** | **$(8,235)** | | **TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT** | **$6,431** | **$10,019** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=CALIDI%20BIOTHERAPEUTICS%2C%20INC.%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) This table details Calidi Biotherapeutics' operational expenses, other income/expenses, and net loss for the three months ended June 30, 2024, and 2023 Condensed Consolidated Statements of Operations (in thousands) | OPERATING EXPENSES (in thousands) | Three Months Ended June 30, 2024 (Unaudited) | Three Months Ended June 30, 2023 | | :-------------------------------- | :------------------------------------------- | :------------------------------- | | Research and development | $(2,167) | $(3,177) | | General and administrative | $(3,605) | $(3,360) | | Total operating expense | $(5,772) | $(6,537) | | Loss from operations | $(5,772) | $(6,537) | | **OTHER INCOME (EXPENSES), NET** | | | | Interest expense | $(108) | $(98) | | Interest expense – related party | $(165) | $(208) | | Change in fair value of debt, other liabilities, and derivatives | $86 | $(1,074) | | Change in fair value of debt, other liabilities, and derivatives – related party | $9 | $(2,773) | | Series B convertible preferred stock financing costs – related party | — | $(2,680) | | Grant income | $181 | $889 | | Other income (expense), net | $10 | $(16) | | Total other income (expenses), net | $13 | $(5,960) | | LOSS BEFORE INCOME TAXES | $(5,759) | $(12,497) | | Income tax provision | $(8) | $(4) | | **NET LOSS** | **$(5,767)** | **$(12,501)** | | Deemed dividend on warrants | $(1,671) | — | | **NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS** | **$(7,438)** | **$(12,501)** | | Net loss per share; basic and diluted | $(1.40) | $(14.24) | | Weighted average common shares outstanding; basic and diluted | 5,328 | 878 | [About Calidi Biotherapeutics](index=2&type=section&id=About%20Calidi%20Biotherapeutics) This section provides an overview of Calidi Biotherapeutics, detailing its focus on immuno-oncology and its proprietary stem cell-based virotherapy platforms [Company Overview and Technology](index=2&type=section&id=Company%20Overview%20and%20Technology) Calidi Biotherapeutics is a clinical-stage immuno-oncology company focused on developing a new generation of targeted antitumor virotherapies. Its proprietary technology utilizes potent allogeneic stem cells to deliver oncolytic viruses for various oncology indications, including high-grade gliomas and solid tumors, aiming to enhance efficacy and patient safety - Calidi Biotherapeutics is a clinical-stage immuno-oncology company with proprietary technology designed to arm the immune system to fight cancer[6](index=6&type=chunk) - The company's novel stem cell-based platforms utilize potent allogeneic stem cells capable of carrying payloads of oncolytic viruses for use in multiple oncology indications, including high-grade gliomas and solid tumors[6](index=6&type=chunk) - Calidi's clinical stage off-the-shelf, universal cell-based delivery platforms (e.g., SuperNova) and preclinical enveloped virotherapies are designed to protect, amplify, and potentiate oncolytic viruses, potentially treating or preventing metastatic disease[6](index=6&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This section contains a standard disclaimer regarding forward-looking statements, highlighting inherent risks and uncertainties that may cause actual results to differ [Disclaimer](index=2&type=section&id=Disclaimer) This section provides a standard disclaimer regarding forward-looking statements, cautioning that actual results may differ materially due to various risks and uncertainties, including capital raising, clinical trial outcomes, and regulatory approvals - The press release may contain forward-looking statements subject to multiple risks and uncertainties that could cause actual results to differ materially and adversely[7](index=7&type=chunk) - Key risks include the ability to raise sufficient capital, the potential for early clinical trial results to change, and the risk of not receiving FDA approval for therapeutic candidates[7](index=7&type=chunk)

Launched Nova Cell subsidiary with $2 million investment from Dr. Ronald Rigor to advance Calidi's Adult Adipose Allogeneic (AAA) stem cell innovative programs Strengthened team with the appointment of Dr. George E. Peoples, MD, FACS, adjunct professor of Surgical Oncology at MD Anderson Cancer Center, to the company's Board of Directors, and the addition of Mark Gilbert, MD, scientist emeritus at the National Institutes of Health (NIH), to its Medical Advisory Board Received a new U.S. patent for the compa ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-40789 Calidi Biotherapeutics, Inc. (Exact name of registrant as specified in its charter) Delaware 86-2967193 (State or other jurisdiction of incorporation or organization) ( ...

Core Insights - Calidi Biotherapeutics, Inc. announced a $2 million strategic investment by Dr. Ronald Rigor into its new subsidiary, Nova Cell, to advance its Adult Adipose Allogeneic (AAA) stem cell programs [1][7] - Dr. Rigor also invested an additional $1 million into Calidi to support its oncology pipeline [1] - The global stem cell therapy market is projected to grow from $14.5 billion in 2024 to $31.4 billion by 2030, with Calidi's AAA stem cell technology positioned to lead this market [3] Company Developments - Nova Cell will serve as an exclusive technology service provider for Dr. Rigor to develop innovative stem cell-based products, including anti-aging creams and lotions for the Philippines [2] - Calidi's AAA stem cell technology is expected to generate revenue by supplying stem cells to Dr. Rigor's patients starting in 2025 [3] - The establishment of Nova Cell enhances strategic focus and resource allocation for both Calidi and Nova Cell, with Calidi concentrating on cancer therapies and Nova Cell on regenerative treatments [3] Investment Details - Dr. Rigor's investment includes a $1 million subscription agreement for Calidi common stock at a 10% discount and warrants for 600,000 shares at a 20% premium [7] - The investment aims to unlock the potential of off-the-shelf AAA stem cells through Calidi's advanced cellular manufacturing process [7] Market Position - Calidi Biotherapeutics is a clinical-stage immuno-oncology company utilizing proprietary technology to enhance the immune system's ability to fight cancer [4] - The company has been harvesting AAA stem cells from healthy adult donors for five years, adhering to FDA guidelines, and is now expanding applications beyond oncology to fields like cosmetics and orthopedics [8] - Dr. Rigor, as a leading figure in stem cell therapy in the Philippines, aims to elevate the health and wellness industry through this partnership with Nova Cell [9]

Core Insights - Calidi Biotherapeutics has announced the issuance of a new patent for its SuperNova technology, enhancing its intellectual property portfolio and enabling the advancement of its CLD-201 program into clinical trials [1][3][8] Company Overview - Calidi Biotherapeutics is a clinical-stage biotechnology company focused on developing targeted antitumor virotherapies, utilizing a novel stem cell-based platform to enhance the immune system's ability to fight cancer [10] - The company is headquartered in San Diego, California, and aims to address the unmet need for effective treatments of solid tumors [10] Technology and Innovation - The newly granted patent (U.S. Patent No. 12,036,278) covers methods and compositions related to cancer immunotherapy, specifically combining a smallpox vaccine with adipose-derived mesenchymal stem cells loaded with oncolytic vaccinia virus [8][9] - The patent broadens previously allowed claims to include 21 smallpox vaccine virus strains, which supports the potential of the SuperNova platform to shield viral payloads from the immune system, enhancing delivery to tumor sites [9] Clinical Development - Calidi plans to submit an Investigational New Drug (IND) application to initiate its first-in-human clinical trial for the CLD-201 program, which is an off-the-shelf allogeneic therapy targeting advanced solid tumors [2][3] - The company has reported initial clinical success with its autologous adipose-derived stem cells loaded with vaccinia oncolytic viruses, indicating a promising path forward for its therapies [2]

Core Insights - Calidi Biotherapeutics has appointed Dr. Mark Gilbert, a prominent figure in neuro-oncology, to its Medical Advisory Board, enhancing the board's expertise and membership to eight [9][10]. Company Overview - Calidi Biotherapeutics is a clinical-stage immuno-oncology company focused on developing targeted antitumor virotherapies using proprietary technology to enhance the immune system's ability to combat cancer [6]. - The company utilizes allogeneic stem cells to deliver oncolytic viruses, aiming to treat various oncology indications, including high-grade gliomas and solid tumors [6]. Dr. Mark Gilbert's Background - Dr. Gilbert served as the Chief of the Neuro-Oncology Branch at NIH from 2014 to 2024, where he led significant research in brain tumors and developed innovative clinical trials [2][4]. - His experience includes working at renowned institutions such as MD Anderson and Johns Hopkins, where he completed his medical training and residencies [4]. Potential Impact of Dr. Gilbert's Appointment - Dr. Gilbert expressed enthusiasm for Calidi's therapies, particularly their versatility in addressing rare cancer diseases that affect approximately 25% of cancer patients [3]. - The CEO of Calidi, Allan Camaisa, highlighted that Dr. Gilbert's expertise will guide the company in developing innovative studies and partnerships with national centers of excellence [11].

Financial Performance - Reported a net loss of $7.2 million, or $0.20 per share, for Q1 2024, compared to a net loss of $6.5 million, or $0.75 per share, for the same period in 2023[5] - Cash and restricted cash totaled $1.4 million as of March 31, 2024, down from $2.1 million as of December 31, 2023[8] - Total liabilities increased to $21.98 million as of March 31, 2024, up from $18.25 million as of December 31, 2023[16] Fundraising and Capital - Closed a public offering of 15,197,500 shares of common stock and accompanying warrants, raising gross proceeds of $6.1 million[4] - Anticipates initiating a Phase 1 trial with Northwestern University in Q3 2024, subject to additional capital being raised[18] Research and Development - Research and development expenses were $2.7 million for Q1 2024, compared to $2.6 million for the same period in 2023[13] - Unveiled the RTNova systemic platform, which has demonstrated preclinical ability to resist inactivation by human serum and target diverse tumor types[4] - Plans to present three posters at the 2024 ASCO Annual Meeting, including an update from the ongoing Phase 1 trial of CLD-101 in recurrent high-grade glioma[18] - Presented new data at the AACR Annual Meeting supporting the first-in-class use of stem cells to protect and potentiate antitumor virotherapies[18] General and Administrative Expenses - General and administrative expenses increased to $4.0 million for Q1 2024, up from $2.8 million in the comparable period of 2023[6]

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and management's analysis of the company's financial condition and results of operations [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) The unaudited condensed consolidated financial statements for Calidi Biotherapeutics, Inc. as of March 31, 2024, show a net loss of **$7.2 million** for the quarter and an accumulated deficit of **$106.8 million**, raising going concern doubts [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of March 31, 2024, shows total assets decreased to **$7.4 million** and total liabilities increased to **$22.0 million**, resulting in a larger stockholders' deficit Balance Sheet Comparison (in thousands) | Metric | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash | $1,143 | $1,949 | | Total Current Assets | $1,936 | $4,303 | | **Total Assets** | **$7,405** | **$10,019** | | Total Current Liabilities | $14,953 | $10,232 | | **Total Liabilities** | **$21,978** | **$18,254** | | **Total Stockholders' Deficit** | **($14,573)** | **($8,235)** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2024, the company reported a net loss of **$7.2 million**, an increase from the prior year, driven by higher operating expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Research and development | ($2,743) | ($2,622) | | General and administrative | ($4,009) | ($2,792) | | **Loss from operations** | **($6,752)** | **($5,414)** | | Total other expenses, net | ($469) | ($1,044) | | **Net Loss** | **($7,225)** | **($6,462)** | | Net loss per share; basic and diluted | ($0.20) | ($0.75) | | Weighted average common shares outstanding | 35,552 | 8,655 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities increased to **$3.8 million** in Q1 2024, partially offset by **$3.0 million** from financing activities, leading to a net cash decrease Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($3,831) | ($3,107) | | Net cash used in investing activities | ($5) | ($137) | | Net cash provided by financing activities | $3,013 | $3,791 | | **Net (decrease) increase in cash** | **($806)** | **$547** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's operations, accounting policies, 'going concern' warning, debt, warrants, and significant post-quarter financing events - The company has experienced recurring losses and negative cash flows, with an accumulated deficit of **$106.8 million** as of March 31, 2024. Management has concluded there is substantial doubt about the company's ability to continue as a going concern for the next 12 months[39](index=39&type=chunk)[64](index=64&type=chunk) - In March 2024, the company entered into a settlement agreement involving the issuance of **$3.5 million** in convertible notes, with **$2.0 million** for cash and **$1.5 million** to settle prior funding claims[5](index=5&type=chunk) - Subsequent to the quarter end, in April 2024, the company closed a public offering for gross proceeds of approximately **$6.1 million**, extended the maturity of several term notes, and repaid a **$1.5 million** convertible note[307](index=307&type=chunk)[308](index=308&type=chunk)[309](index=309&type=chunk) - The company is involved in legal proceedings, including a dispute with a former Chief Accounting Officer and a recently settled matter with physicians regarding stock options, which resulted in the issuance of restricted stock and warrants[233](index=233&type=chunk)[295](index=295&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's clinical-stage status, significant operating losses, and substantial doubt about its going concern ability, highlighting recent financing efforts - The company is a clinical-stage immuno-oncology firm developing stem cell-based platforms (NeuroNova™, SuperNova™) to deliver oncolytic viruses for cancer treatment, with key candidates including CLD-101 for gliomas and CLD-201 for solid tumors[313](index=313&type=chunk)[323](index=323&type=chunk)[324](index=324&type=chunk) - Management explicitly states there is substantial doubt about the company's ability to continue as a going concern, as existing cash as of May 10, 2024, is insufficient to continue operations through June 2024 without raising additional capital[327](index=327&type=chunk)[392](index=392&type=chunk) Q1 2024 vs Q1 2023 Operating Expense Comparison (in thousands) | Expense Category | Q1 2024 | Q1 2023 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research & Development | $2,743 | $2,622 | $121 | 5% | | General & Administrative | $4,009 | $2,792 | $1,217 | 44% | | **Total Operating Expenses** | **$6,752** | **$5,414** | **$1,338** | **25%** | - To address liquidity issues, the company raised **$3.0 million** from convertible notes in Q1 2024 and an additional **$6.1 million** in gross proceeds from a public offering in April 2024[409](index=409&type=chunk)[509](index=509&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=60&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is not required to provide detailed market risk disclosures and believes it has no significant exposure to interest rate, foreign currency, or inflation risks - As a smaller reporting company, the company is not required to provide detailed disclosures about market risk[445](index=445&type=chunk) - The company does not believe it has significant exposure to interest rate risk, foreign currency risk, or inflation[417](index=417&type=chunk)[439](index=439&type=chunk)[440](index=440&type=chunk) [Item 4. Controls and Procedures](index=61&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2024[422](index=422&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or were reasonably likely to materially affect, the company's internal controls[423](index=423&type=chunk) [PART II - OTHER INFORMATION](index=61&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section covers legal proceedings, key risk factors, unregistered equity sales, and other required disclosures [Item 1. Legal Proceedings](index=61&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to litigation, including a recent complaint filed by a former Chief Accounting Officer regarding share restrictions - On May 1, 2024, former CAO Tony Kalajian filed a complaint against the company regarding the restrictive legend on **139,423** shares of Common Stock, seeking damages and an order to remove the legend[348](index=348&type=chunk)[425](index=425&type=chunk) [Item 1A. Risk Factors](index=61&type=section&id=Item%201A.%20Risk%20Factors) Critical risks include insufficient cash for ongoing operations, substantial doubt about going concern, and significant stockholder dilution from future capital raises and price reset features - The company has insufficient cash to continue operations for the next 12 months, raising substantial doubt about its ability to continue as a going concern[427](index=427&type=chunk)[449](index=449&type=chunk) - Future sales of common stock to raise capital will result in significant dilution to existing stockholders and could cause the share price to fall[428](index=428&type=chunk)[450](index=450&type=chunk) - Certain outstanding warrants and convertible notes have exercise or conversion prices that are subject to a reset, which could significantly increase the number of shares issuable and cause further dilution[430](index=430&type=chunk)[451](index=451&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=64&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In February 2024, the company issued **50,000** shares of common stock to a consultant, with another **50,000** shares to be issued later, under a registration exemption - On March 25, 2024, the company issued **50,000** shares of common stock to a consultant for marketing services, with another **50,000** shares to be issued later, and the issuance was exempt from registration under Section 4(a)(2) of the Securities Act[432](index=432&type=chunk)[453](index=453&type=chunk) [Item 3. Defaults Upon Senior Securities](index=64&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon its senior securities during the period - None[433](index=433&type=chunk)[454](index=454&type=chunk) [Item 4. Mine Safety Disclosures](index=64&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[434](index=434&type=chunk)[462](index=462&type=chunk) [Item 5. Other Information](index=64&type=section&id=Item%205.%20Other%20Information) The company reported no other information for this item - None[435](index=435&type=chunk)[455](index=455&type=chunk) [Item 6. Exhibits](index=65&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including various agreements, officer certifications, and XBRL data files - Exhibits filed include agreements for convertible promissory notes, a settlement agreement, officer certifications, and XBRL interactive data files[436](index=436&type=chunk)[457](index=457&type=chunk)[464](index=464&type=chunk)