Revenue and Financial Performance - CERo Therapeutics Holdings, Inc. has not recognized any revenue from product sales and does not expect to generate revenue in the foreseeable future[128]. - The company has not generated any revenue and does not expect to do so for at least the next few years until regulatory approval is obtained for its product candidates[147]. - The net loss for the three-month period ended June 30, 2024, was $2.4 million, compared to a net loss of $2.1 million for the same period in 2023, an increase of 17%[136]. - Interest and other income, net, was $2.7 million for the three-month period ended June 30, 2024, compared to $0.3 million for the same period in 2023, reflecting an increase of 800%[140]. - The Company reported a net cash increase of $1.1 million for the six months ended June 30, 2024, compared to a decrease of $2.9 million in the same period of 2023[153]. Research and Development Expenses - The company plans to substantially increase its R&D expenses as it continues the development of its product candidates through clinical development[130]. - Research and development expenses increased to $2.7 million for the three-month period ended June 30, 2024, compared to $1.2 million for the same period in 2023, reflecting a 125% increase[138]. - For the six-month period ended June 30, 2024, research and development expenses were $4.4 million, up from $3.0 million in the same period of 2023, indicating a 47% increase[145]. - The company anticipates significant increases in R&D expenses in the future due to expanded headcount and contracted services for clinical development[139]. - The company anticipates that future R&D expenses may vary significantly based on ongoing assessments of product candidates' commercial potential[130]. Compliance and Regulatory Matters - On June 28, 2024, the company submitted an Investigational New Drug Application for its product candidate, CER-1236, but the FDA placed a clinical hold due to insufficient data[121]. - The company received a letter from Nasdaq indicating that the closing bid price for its common stock has been below the minimum $1.00 per share required for continued listing[122]. - The company has until January 15, 2025, to regain compliance with the Bid Price Requirement and until October 29, 2024, for the Market Value of Publicly Held Shares Requirement[125]. - The company plans to actively monitor its stock price and may evaluate options to resolve deficiencies to maintain compliance with Nasdaq listing standards[126]. Financing and Cash Flow - The company completed a private placement in February 2024, raising approximately $10.0 million from the issuance of Series A Preferred Stock and warrants[120]. - Net cash used in operating activities increased by $5.4 million from $3.5 million in the six-month period ended June 30, 2023, to $8.9 million in 2024[155]. - Net cash provided by financing activities increased by $9.1 million from $0.6 million in the three-month period ended June 30, 2023, to $9.7 million in 2024[156]. - The Company has arranged two equity lines of credit, one for the sale of up to 25 million shares and another for the purchase of up to $25 million of Common Stock[150]. - The Company expects to continue relying on additional financing to achieve its business objectives, as commercial revenues from product candidates are not expected in the near term[152]. - The Company may need to seek additional funds sooner than planned due to changing circumstances affecting cash availability[150]. - The Company has no guarantee that conditions for the equity line of credit will be satisfied, which may impact its ability to fund operations[150]. - The Company’s future funding requirements are uncertain and depend on various factors, including research and development progress[151]. General and Administrative Expenses - General and administrative expenses rose to $2.4 million for the three-month period ended June 30, 2024, from $1.2 million in the same period of 2023, marking a 108% increase[137]. - General and administrative expenses for the six-month period ended June 30, 2024, were $5.3 million, compared to $1.9 million for the same period in 2023, reflecting a 179% increase[144]. Emerging Growth Company Status - The company qualifies as an "emerging growth company" under the JOBS Act, allowing it to delay the adoption of certain accounting standards until they apply to private companies[172]. - The company can present only two years of audited financial statements, reducing disclosure requirements in its financial reports[173]. - The company will cease to qualify as an emerging growth company if total annual gross revenues exceed $1.07 billion[175]. - The company has taken advantage of reduced reporting requirements in its Form 10-Q, which may differ from other public companies[175]. - The company is exempt from compliance with auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act[173]. - The company is allowed to reduce disclosure about executive compensation arrangements in its periodic reports[173]. - The company is exempt from holding non-binding advisory votes on executive compensation or golden parachute arrangements[173]. - The company may choose to take advantage of some but not all reduced reporting burdens[175]. - The market value of the company's Common Stock held by non-affiliates must exceed $700 million to be deemed a "large accelerated filer"[175]. - The company has not issued more than $1.0 billion of non-convertible debt over the prior three-year period[175].
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