Core Insights - Gyre Therapeutics has published findings indicating that hydronidone, a novel derivative of pirfenidone, shows promise in treating liver fibrosis by inducing apoptosis in activated hepatic stellate cells (HSCs) through the endoplasmic reticulum stress-associated mitochondrial apoptotic pathway [2][3] Company Overview - Gyre Therapeutics is a clinical-stage biotechnology company focused on developing anti-fibrotic therapeutics for chronic organ diseases, with its lead candidate being F351 (Hydronidone) for treating NASH-associated fibrosis in the U.S. [4] - The company is advancing a diverse pipeline in the People's Republic of China (PRC) through its indirect controlling interest in Gyre Pharmaceuticals, which includes therapeutic expansions and other candidates [4] Research and Development - The recent study published in the Journal of Gastroenterology and Hepatology supports the potential of hydronidone as a therapy for liver fibrosis, demonstrating significant apoptosis in activated HSCs in both in vivo and in vitro models [2][3] - Gyre Pharmaceuticals is currently conducting a Phase 3 trial in the PRC for hydronidone's efficacy in treating Chronic Hepatitis B (CHB)-associated liver fibrosis, with topline data expected by early 2025 [7] - The trial involves 248 patients, aiming for a primary endpoint of reducing the liver fibrosis score by at least one grade after treatment with hydronidone in combination with entecavir [7]

SAN DIEGO, May 30, 2024 (GLOBE NEWSWIRE) -- Gyre Therapeutics ("Gyre") (Nasdaq: GYRE), a clinical-stage, self-sustainable biotechnology company developing anti-fibrotic therapeutics for a variety of chronic organ diseases, today announced that the Center for Drug Evaluation ("CDE") of China's National Medical Products Administration ("NMPA") has approved Gyre Pharmaceuticals' (Gyre's indirectly controlled subsidiary) Investigational New Drug ("IND") application for F230 tablets, a selective endothelin recep ...

SAN DIEGO, May 30, 2024 (GLOBE NEWSWIRE) -- Gyre Therapeutics ("Gyre") (NASDAQ:GYRE), a clinical-stage, self-sustainable biotechnology company developing anti-fibrotic therapeutics for a variety of chronic organ diseases, today announced that the Center for Drug Evaluation ("CDE") of China's National Medical Products Administration ("NMPA") has approved Gyre Pharmaceuticals' (Gyre's indirectly controlled subsidiary) Investigational New Drug ("IND") application for F230 tablets, a selective endothelin recept ...

Company Overview - Gyre Therapeutics is a clinical-stage biotechnology company focused on developing anti-fibrotic therapeutics for chronic organ diseases [1][4] - The company is headquartered in San Diego, CA, and is advancing its lead product F351 (Hydronidone) for the treatment of NASH-associated fibrosis in the U.S. [4] Recent Developments - Gyre Therapeutics is expected to be added to the small-cap Russell 2000® and all-cap Russell 3000® Indexes effective after U.S. market close on June 28, 2024 [1][2] - The addition to the Russell Indexes is seen as a significant milestone for the company, enhancing its visibility as it advances its product F351 in both the PRC and the United States [2] Market Context - The Russell Indexes capture the 4,000 largest U.S. stocks as of April 30, 2024, ranked by total market capitalization [2] - Approximately $12.1 trillion in assets are benchmarked against the Russell U.S. Indexes, indicating the importance of these indexes for investment managers and institutional investors [3]

SAN DIEGO, May 28, 2024 (GLOBE NEWSWIRE) -- Gyre Therapeutics ("Gyre") (Nasdaq: GYRE), a clinical-stage, self-sustainable biotechnology company developing anti-fibrotic therapeutics for a variety of chronic organ diseases, today announced that it expects to be added to the small-cap Russell 2000® and all-cap Russell 3000® Indexes at the conclusion of the 2024 Russell Indexes annual reconstitution, effective after U.S. market close on June 28, 2024, according to a preliminary list of additions posted on May ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) For the first quarter ended March 31, 2024, Gyre Therapeutics reported total revenues of $27.2 million, a 9% increase year-over-year, and a net income of $9.9 million, up from $4.2 million in the prior year period, with total assets growing to $122.0 million from $116.5 million at year-end 2023, primarily driven by an increase in total equity following the conversion of preferred stock, and cash and cash equivalents standing at $29.8 million [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2024, the company's total assets were $122.0 million, an increase from $116.5 million at December 31, 2023, accompanied by a significant shift in equity to $88.8 million from $13.9 million, largely due to preferred stock conversion Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 (Unaudited) | December 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $29,785 | $33,509 | | Total current assets | $62,723 | $57,221 | | Total assets | $122,010 | $116,539 | | **Liabilities & Equity** | | | | Total current liabilities | $19,486 | $20,047 | | Total liabilities | $33,239 | $38,065 | | Convertible Preferred Stock | $0 | $64,525 | | Total Gyre stockholders' equity (deficit) | $56,640 | $(15,828) | | Total equity | $88,771 | $13,949 | | Total liabilities, convertible preferred stock, and equity | $122,010 | $116,539 | - All **13,151 shares of Convertible Preferred Stock** outstanding at year-end 2023 were converted into **8,767,333 shares of common stock** during the first quarter of 2024, resulting in the elimination of the **$64.5 million preferred stock liability** on the balance sheet[13](index=13&type=chunk)[67](index=67&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) In Q1 2024, revenues increased to $27.2 million from $24.9 million in Q1 2023, with net income attributable to common stockholders surging to $7.5 million ($0.09 per basic share) from $2.2 million ($0.04 per basic share) year-over-year, largely due to a $4.3 million non-cash gain from the change in fair value of warrant liability Condensed Consolidated Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Revenues | $27,172 | $24,931 | | Income from operations | $8,071 | $6,664 | | Change in fair value of warrant liability | $4,288 | $0 | | Net income | $9,935 | $4,217 | | Net income attributable to common stockholders | $7,532 | $2,244 | | Basic EPS | $0.09 | $0.04 | | Diluted EPS | $0.03 | $0.03 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the three months ended March 31, 2024, net cash provided by operating activities was $2.9 million, a decrease from $10.4 million in the same period of 2023, with net cash used in investing activities at $7.2 million, primarily for the purchase of certificates of deposit, resulting in a $3.7 million decrease in cash and cash equivalents, ending at $29.8 million Condensed Consolidated Statement of Cash Flows Highlights (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,884 | $10,417 | | Net cash used in investing activities | $(7,220) | $(7,648) | | Net cash provided by financing activities | $658 | $0 | | Net (decrease) increase in cash and cash equivalents | $(3,724) | $2,969 | | Cash and cash equivalents at end of period | $29,785 | $28,144 | - A significant non-cash financing activity during the quarter was the conversion of **$64.5 million of convertible preferred stock** into common stock[16](index=16&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's business structure following the reverse asset acquisition in October 2023, key accounting policies, and financial instrument valuations, highlighting revenue concentration from three main PRC customers, the valuation of warrant and CVR liabilities, and segment reporting which shows the Gyre Pharmaceuticals segment as the sole revenue generator, alongside various commitments for R&D and IP transfers - The company operates as a financially-sustainable pharmaceutical firm focused on anti-inflammatory and anti-fibrotic drugs, holding a **65.2% indirect interest** in its primary operating subsidiary, Gyre Pharmaceuticals in the PRC[19](index=19&type=chunk)[20](index=20&type=chunk) - Management believes existing cash, cash flows from operations, and access to capital markets are sufficient to fund operations for at least the **next 12 months**[21](index=21&type=chunk) - For Q1 2024, three customers (Sinopharm, China Resources Pharmaceutical, and Shanghai Pharmaceuticals) accounted for **47.3%, 17.2%, and 11.1% of total revenue**, respectively, indicating significant customer concentration[28](index=28&type=chunk) - Product revenues, mainly from the sale of ETUARY, accounted for **99.2% of total revenue** for the three months ended March 31, 2024, with all sales generated in the PRC[49](index=49&type=chunk)[51](index=51&type=chunk) - The company's operations are divided into two reportable segments: Gyre Pharmaceuticals (operating in mainland China and generating all revenue) and Gyre (operating in the U.S. with no revenue)[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's strategy centered on its commercial drug ETUARY® (Pirfenidone) and its lead development candidate, F351, highlighting a 9% revenue increase to $27.2 million in Q1 2024, driven by enhanced marketing in the PRC, and a net income rise to $9.9 million, significantly boosted by a $4.3 million gain on warrant liability remeasurement, while maintaining a strong liquidity position with $29.8 million in cash and cash equivalents, sufficient for at least the next year [Overview](index=29&type=section&id=Overview) The company is a commercial-stage pharmaceutical firm focused on anti-fibrotic drugs, with its primary commercial product, ETUARY (Pirfenidone), approved in the PRC for Idiopathic Pulmonary Fibrosis (IPF) and generating $112.1 million in sales in 2023, while its lead development candidate, F351, is in a Phase 3 trial in the PRC for liver fibrosis, with results expected by early 2025, and an IND submission planned in the U.S. in late 2024 for a Phase 2a trial in NASH-associated liver fibrosis - The company's strategy is to leverage the success of ETUARY® (Pirfenidone) to expand into new indications and develop similar drug candidates[108](index=108&type=chunk) - The lead development candidate, F351, is in a confirmatory Phase 3 trial in the PRC for CHB-associated liver fibrosis, with clinical results expected by **early 2025**[111](index=111&type=chunk) - An Investigational New Drug (IND) application for F351 is expected to be submitted in the U.S. in **late 2024** to initiate a Phase 2a trial for non-alcoholic steatohepatitis-associated liver fibrosis in **2025**[112](index=112&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) For Q1 2024 compared to Q1 2023, revenues grew 9% to $27.2 million due to increased pharmaceutical sales in the PRC, with gross profit increasing by 10%, operating income rising 21% to $8.1 million despite a 95% increase in G&A expenses from higher payroll, and net income surging 136% to $9.9 million, primarily due to a $4.3 million gain from the change in fair value of warrant liability Results of Operations Comparison (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenues | $27,172 | $24,931 | $2,241 | 9% | | Gross profit | $26,193 | $23,806 | $2,387 | 10% | | Income from operations | $8,071 | $6,664 | $1,407 | 21% | | Net income | $9,935 | $4,217 | $5,718 | 136% | - The revenue increase was primarily due to enhanced marketing and sales initiatives for pharmaceutical products in regions of the PRC[140](index=140&type=chunk) - General and administrative expenses increased by **95%**, or **$1.7 million**, mainly driven by a **$1.2 million increase in payroll expenses** due to increased staff headcount[144](index=144&type=chunk) - Research and development expenses decreased by **17%**, or **$0.5 million**, primarily due to a decrease in clinical trial and pre-clinical research expenses as projects advanced[143](index=143&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2024, the company had $29.8 million in cash and cash equivalents, $7.6 million in short-term bank deposits, and $23.1 million in long-term certificates of deposit, with management asserting that existing cash, operational cash flow, and capital market access are sufficient to fund operations for at least the next 12 months, noting that $64.3 million of its net assets in the PRC are restricted from distribution due to local regulations - The company holds cash and cash equivalents of **$29.8 million**, short-term bank deposits of **$7.6 million**, and long-term certificates of deposit of **$23.1 million** as of March 31, 2024[149](index=149&type=chunk) - Net cash provided by operating activities was **$2.9 million** for Q1 2024, a decrease from **$10.4 million** in Q1 2023[151](index=151&type=chunk)[152](index=152&type=chunk) - Under PRC regulations, **$64.3 million** in capital and statutory reserves of its subsidiary Gyre Pharmaceuticals are restricted and not available for distribution[157](index=157&type=chunk) - As of March 31, 2024, the company has committed to allocate **$25.8 million** toward future research and development activities for various programs[163](index=163&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Gyre Therapeutics is not required to provide the information for this item - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[168](index=168&type=chunk) [Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2024, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation as of March 31, 2024, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective[170](index=170&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, internal controls[171](index=171&type=chunk) [PART II. OTHER INFORMATION](index=40&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings - As of the filing date, the company is not involved in any material legal proceedings[173](index=173&type=chunk) [Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes from the risk factors previously disclosed in the company's Annual Report on Form 10-K - The company states there have been no material changes from the risk factors disclosed in its Annual Report[174](index=174&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[175](index=175&type=chunk) [Other Information](index=40&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the quarter - No directors or executive officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter[178](index=178&type=chunk) [Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Quarterly Report, including agreements, corporate governance documents, and officer certifications

Phase 3 clinical trial evaluating F351 for the treatment of CHB-associated liver fibrosis in the PRC remains on track with data anticipated by early 2025 U.S. IND submission to evaluate F351 for the treatment of NASH-associated liver fibrosis expected in late 2024; Phase 2a trial expected to initiate in 2025 Acquired the rights to complementary assets relating to nintedanib through Gyre Pharmaceuticals to improve competitiveness in the PRC Cash and cash equivalents totaled $29.8 million as of March 31, 2024 ...

Gyre Therapeutics Reports First Quarter 2024 Financial Results and Provides Business Update Phase 3 clinical trial evaluating F351 for the treatment of CHB-associated liver fibrosis in the PRC remains on track with data anticipated by early 2025 U.S. IND submission to evaluate F351 for the treatment of NASH-associated liver fibrosis expected in late 2024; Phase 2a trial expected to initiate in 2025 Exhibit 99.1 SAN DIEGO, May 9, 2024 (GLOBE NEWSWIRE) – Gyre Therapeutics ("Gyre") (Nasdaq: GYRE), a clinical- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 000-51173 Gyre Therapeutics, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 56-2020050 (State or Other Jurisdiction of In ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The financial statements for the period ended September 30, 2023, reflect a significant transformation, including asset sales, a pending business combination, and a shift to net loss, raising going concern doubts [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of September 30, 2023, shows a significant reduction in total assets and liabilities, alongside a major reclassification of preferred stock to permanent equity, resulting in positive stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2023 (Unaudited) | Dec 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $2,228 | $21,666 | | Total current assets | $5,132 | $28,206 | | Total assets | $9,964 | $28,444 | | **Liabilities & Equity** | | | | Total current liabilities | $1,783 | $16,824 | | Total liabilities | $6,447 | $16,824 | | Redeemable convertible preferred stock | $0 | $33,309 | | Total stockholders' equity (deficit) | $3,517 | $(21,689) | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) For the nine months ended September 30, 2023, the company reported a net loss of $3.8 million, a significant shift from the prior year's net income driven by asset disposal gains Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $0 | $0 | $0 | $794 | | Research and development | $415 | $803 | $1,321 | $12,377 | | General and administrative | $2,408 | $4,363 | $8,603 | $13,201 | | GNI cost-sharing reimbursement | $(1,200) | $0 | $(1,200) | $0 | | Gain on disposal of assets, net | $0 | $0 | $(4,736) | $(57,245) | | **Net Income (Loss)** | **$(1,576)** | **$(4,884)** | **$(3,788)** | **$32,212** | | Net Income (Loss) per share, basic | $(0.04) | $(0.16) | $(0.10) | $1.02 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2023, the company experienced a net decrease in cash of $19.4 million, driven by operating and financing outflows, resulting in a period-end balance of $2.2 million Cash Flow Summary for Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(11,904) | $(31,621) | | Net cash provided by investing activities | $5,206 | $55,375 | | Net cash used in financing activities | $(12,740) | $(45,011) | | **Net decrease in cash and cash equivalents** | **$(19,438)** | **$(21,257)** | | **Cash and cash equivalents at end of period** | **$2,228** | **$23,090** | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) The notes detail significant corporate events, including asset acquisitions, a pending business combination, asset sales, and the reclassification of preferred stock, alongside a going concern disclosure - The company has **ceased its prior biopharmaceutical research** and has **pivoted its strategy** through an **asset purchase agreement for F351 assets** with GNI Group and a concurrent **business combination agreement** to acquire an indirect controlling interest in Beijing Continent Pharmaceutical Co., Ltd[16](index=16&type=chunk)[17](index=17&type=chunk)[24](index=24&type=chunk) - Management has identified **substantial doubt about the company's ability to continue as a going concern** for at least 12 months, citing a **net loss of $3.8 million** for the nine months ended Sep 30, 2023, a **low cash balance of $2.2 million**, and uncertainties surrounding the pending Business Combination Agreement[29](index=29&type=chunk) - The company **sold its complement portfolio to Vertex for $60.0 million** and its **legacy rare bleeding disorder program to GC Biopharma for $6.0 million**. Net **proceeds from these sales are being distributed to holders of Contingent Value Rights (CVRs)**[18](index=18&type=chunk)[19](index=19&type=chunk)[82](index=82&type=chunk) - Following stockholder approval on August 29, 2023, the **cash redemption feature of the Series X Redeemable Convertible Preferred Stock was eliminated**, and the stock was **reclassified from a liability to permanent stockholders' equity**[22](index=22&type=chunk)[23](index=23&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's strategic shift, significant expense reductions, critical liquidity position, and reliance on a cost-sharing agreement, highlighting substantial doubt about its going concern ability Comparison of Results of Operations (in thousands) | Line Item | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $1,321 | $12,377 | $(11,056) | (89)% | | General and administrative | $8,603 | $13,201 | $(4,598) | (35)% | | GNI cost-sharing reimbursement | $(1,200) | $0 | $(1,200) | 100% | | Gain on disposal of assets, net | $(4,736) | $(57,245) | $52,509 | (92)% | | **Net Income (Loss)** | **$(3,788)** | **$32,212** | **$(36,000)** | * | - The company's **operations have fundamentally changed**, **ceasing old R&D activities** in March 2022 and **acquiring F351 assets** from GNI in December 2022. A **pending business combination** with GNI is expected to close by the Outside Date[91](index=91&type=chunk)[93](index=93&type=chunk)[104](index=104&type=chunk) - The **significant decrease in R&D and G&A expenses** for the nine months ended Sep 30, 2023, compared to 2022, is primarily due to the **cessation of development programs** and a **reduction-in-force**[116](index=116&type=chunk)[118](index=118&type=chunk) - The company's **cash position has dwindled to $2.2 million**. Management states there is **substantial doubt about the ability to continue as a going concern**, with **future operations dependent on the closing of the Business Combination Agreement and cost-sharing support from GNI**[126](index=126&type=chunk)[127](index=127&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company has determined that quantitative and qualitative disclosures about market risk are not applicable for this reporting period - The company has determined that quantitative and qualitative disclosures about market risk are **not applicable** for this reporting period[137](index=137&type=chunk) [Item 4. Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal control over financial reporting during the quarter - The CEO and Interim CFO concluded that the company's disclosure controls and procedures were **effective** as of September 30, 2023[139](index=139&type=chunk) - There were **no changes in internal control over financial reporting** during the quarter that materially affected, or are reasonably likely to materially affect, such controls[140](index=140&type=chunk) [PART II. OTHER INFORMATION](index=26&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not a party to any material legal proceedings - As of the filing date, Catalyst is **not involved in any material legal proceedings**[142](index=142&type=chunk) [Item 1A. Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant delisting risk from Nasdaq due to non-compliance with minimum bid price and stockholders' equity requirements, which could jeopardize stock value and the pending business combination - The company is **not in compliance** with Nasdaq's **Minimum Bid Price Requirement (below $1.00)** and the **minimum stockholders' equity requirement ($2.5 million)**[144](index=144&type=chunk)[145](index=145&type=chunk) - Nasdaq has granted the company an **extension until October 30, 2023**, to **regain compliance**, pending the **completion of the Business Combination Agreement and a reverse stock split**[145](index=145&type=chunk) - Failure to regain compliance could **result in delisting**, which would **adversely affect the stock's price and liquidity**, and could **jeopardize the closing of the Business Combination Agreement**[146](index=146&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=26&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company states that this item is not applicable - There were **no unregistered sales of equity securities** during the reporting period[147](index=147&type=chunk) [Item 5. Other Information](index=27&type=section&id=Item%205.%20Other%20Information) The company reports that no directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the quarter ended September 30, 2023 - **No directors or officers adopted or terminated a Rule 10b5-1 trading plan** during the third quarter of 2023[150](index=150&type=chunk) [Item 6. Exhibits](index=27&type=section&id=Item%206.%20Exhibits) This section refers to the Exhibit Index at the end of the report, which lists all documents filed as part of the Form 10-Q - The report **incorporates by reference an index of all exhibits** filed with this Form 10-Q[151](index=151&type=chunk)