Anebulo Pharmaceuticals(ANEB) - 2025 Q1 - Quarterly Report

Special Note Regarding Forward-Looking Statements The report contains forward-looking statements regarding future financial condition, business strategy, plans, and management objectives, which are subject to substantial risks and uncertainties - The report contains forward-looking statements regarding future financial condition, business strategy, plans, and management objectives, which are subject to substantial risks and uncertainties[5] - Key areas of forward-looking statements include capital requirements, timing/outcome of regulatory submissions, clinical trial conduct, clinical utility and approval likelihood of selonabant, future growth, intellectual property, licensing, commercial potential, supplier performance, competition, economic/political impacts, and governmental regulations[6] PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed financial statements for Anebulo Pharmaceuticals, Inc., including the Balance Sheets, Statements of Operations, Stockholders' Equity, and Cash Flows, along with detailed notes explaining the nature of business, accounting policies, and specific financial line items Condensed Balance Sheets as of September 30, 2024 and June 30, 2024 The balance sheets show a decrease in total assets from $4.07 million at June 30, 2024, to $2.47 million at September 30, 2024, primarily driven by a reduction in cash and cash equivalents. Total liabilities increased significantly from $0.26 million to $0.57 million, while total stockholders' equity decreased from $3.81 million to $1.90 million Condensed Balance Sheet Highlights | Metric | Sep 30, 2024 | Jun 30, 2024 | Change | | :------------------------- | :----------- | :----------- | :----- | | Cash and cash equivalents | $1,404,211 | $3,094,200 | $(1,689,989) | | Total current assets | $1,962,513 | $3,507,990 | $(1,545,477) | | Total assets | $2,467,940 | $4,073,114 | $(1,605,174) | | Total liabilities | $569,225 | $260,583 | $308,642 | | Total stockholders' equity | $1,898,715 | $3,812,531 | $(1,913,816) | Condensed Statements of Operations for the Three Months Ended September 30, 2024 and September 30, 2023 For the three months ended September 30, 2024, the company reported a net loss of $2.20 million, an improvement from $2.48 million in the prior year period, primarily due to decreased general and administrative expenses and increased grant income Condensed Statements of Operations Highlights | Metric | Sep 30, 2024 | Sep 30, 2023 | Change | | :---------------------------------- | :----------- | :----------- | :----- | | Research and development | $1,314,859 | $1,270,220 | $44,639 | | General and administrative | $1,097,265 | $1,273,458 | $(176,193) | | Total operating expenses | $2,412,124 | $2,543,678 | $(131,554) | | Loss from operations | $(2,412,124) | $(2,543,678) | $131,554 | | Interest expense | $59,697 | $0 | $59,697 | | Interest income | $(26,006) | $(55,198) | $29,192 | | Grant income | $(245,362) | $0 | $(245,362) | | Net loss | $(2,200,736) | $(2,480,823) | $280,087 | | Net loss per share, basic and diluted | $(0.08) | $(0.10) | $0.02 | Condensed Statements of Stockholders' Equity for the Three Months Ended September 30, 2024 and September 30, 2023 Total stockholders' equity decreased from $3.81 million at June 30, 2024, to $1.90 million at September 30, 2024, primarily due to the net loss incurred, partially offset by stock-based compensation expense Condensed Statements of Stockholders' Equity Highlights | Metric | Jun 30, 2024 | Sep 30, 2024 | Change | | :--------------------------- | :----------- | :----------- | :----- | | Common Stock Amount | $25,934 | $25,934 | $0 | | Additional Paid-in Capital | $69,190,341 | $69,477,261 | $286,920 | | Accumulated Deficit | $(65,403,744) | $(67,604,480) | $(2,200,736) | | Total Stockholders' Equity | $3,812,531 | $1,898,715 | $(1,913,816) | Condensed Statements of Cash Flows for the Three Months Ended September 30, 2024 and September 30, 2023 Net cash used in operating activities decreased significantly to $1.69 million for the three months ended September 30, 2024, compared to $2.73 million in the prior year, driven by lower net loss and favorable changes in operating assets and liabilities Condensed Statements of Cash Flows Highlights (Operating Activities) | Metric | Sep 30, 2024 | Sep 30, 2023 | Change | | :---------------------------------- | :----------- | :----------- | :----- | | Net loss | $(2,200,736) | $(2,480,823) | $280,087 | | Stock-based compensation | $286,920 | $210,797 | $76,123 | | Amortization of loan commitment fee | $59,697 | $0 | $59,697 | | Grant receivable | $(245,362) | $0 | $(245,362) | | Prepaid expenses | $100,850 | $(104,558) | $205,408 | | Accounts payable | $95,716 | $31,404 | $64,312 | | Accrued expenses | $212,926 | $(383,645) | $596,571 | | Net cash used in operating activities | $(1,689,989) | $(2,726,825) | $1,036,836 | | Cash, end of period | $1,404,211 | $8,520,578 | $(7,116,367) | Notes to Unaudited Condensed Financial Statements This section provides detailed explanations and disclosures for the unaudited condensed financial statements, covering the company's nature of business, accounting policies, and specific financial line items Note 1. Nature of business and basis of presentation Anebulo Pharmaceuticals, Inc. is a clinical-stage company developing treatments for cannabis toxicity, with an accumulated deficit of $67.6 million as of September 30, 2024, and expects to require additional funding for long-term development - Anebulo Pharmaceuticals, Inc. is a clinical-stage pharmaceutical company developing treatments for cannabis toxicity, including unintentional cannabis poisoning and acute cannabinoid intoxication (ACI)[14] - The company has incurred a net loss of approximately $2.2 million for the three months ended September 30, 2024, and an accumulated deficit of $67.6 million as of September 30, 2024[15] - The company expects its cash and cash equivalents, along with available funding under the Loan and Security Agreement (LSA), to fund operations and capital expenditures for at least 12 months from the financial statements' issuance date[15] - Future funding will be sought through equity and debt financings or collaboration agreements, with risks of dilution or inability to secure funding on acceptable terms, potentially delaying or eliminating product development[16] Note 2. Summary of Significant Accounting Policies The company's unaudited interim condensed financial statements are prepared in accordance with U.S. GAAP and SEC rules, with no material changes to significant accounting policies since June 30, 2024, except for research and development grants - Unaudited interim condensed financial statements are prepared in accordance with U.S. GAAP and SEC rules, with certain information and footnote disclosures omitted as permitted[19][20] - No material changes to significant accounting policies have occurred since June 30, 2024, other than the policy for accounting for research and development grants[22] Note 3. Prepaid Expenses Prepaid expenses decreased from $413,790 at June 30, 2024, to $312,940 at September 30, 2024, primarily due to a decrease in prepaid research and development, partially offset by an increase in prepaid insurance Prepaid Expenses | Category | Sep 30, 2024 | Jun 30, 2024 | | :------------------------- | :----------- | :----------- | | Prepaid insurance | $155,507 | $95,871 | | Prepaid research and development | $118,893 | $274,879 | | Prepaid other | $38,540 | $43,040 | | Total prepaid expenses | $312,940 | $413,790 | Note 4. Accrued Expenses Accrued expenses significantly increased from $104,157 at June 30, 2024, to $317,083 at September 30, 2024, primarily driven by a substantial increase in accrued research and development costs Accrued Expenses | Category | Sep 30, 2024 | Jun 30, 2024 | | :------------------------- | :----------- | :----------- | | Accrued payroll related expenses | $32,843 | $29,512 | | Accrued research and development | $248,685 | $47,554 | | Accrued professional fees | $35,555 | $27,091 | | Total accrued expenses | $317,083 | $104,157 | Note 5. Other Assets Other assets, primarily loan commitment fees, decreased from $0.6 million at June 30, 2024, to $0.5 million at September 30, 2024, due to amortization, resulting in $0.1 million interest expense - Loan commitment fees, included in other assets, decreased from $0.6 million at June 30, 2024, to $0.5 million at September 30, 2024, due to amortization over a three-year loan term[26] - Interest expense related to the amortization of loan commitment fees was $0.1 million for the three months ended September 30, 2024, compared to zero in the prior year period[26] Note 6. License Agreement The company licensed selonabant intellectual property from Vernalis Development Limited, involving potential development milestone payments up to $29.9 million and sales milestone payments up to $35.0 million, plus single-digit royalties - The company licensed intellectual property for selonabant from Vernalis Development Limited in May 2020, involving potential development milestone payments up to $29.9 million and sales milestone payments up to $35.0 million, plus single-digit royalties[27] - As part of the May 2021 IPO, 192,857 shares of common stock were issued to Vernalis in lieu of approximately $1.4 million in future milestone payments, and no further milestone payments are considered probable as of September 30, 2024[28] Note 7. Stockholders' Equity The company's authorized common stock increased to 50,000,000 shares in November 2023, with 25,933,217 shares issued and outstanding as of September 30, 2024, following a $6.3 million private placement and issuance of 300,000 shares for a Loan and Security Agreement - The authorized common stock was increased from 40,000,000 to 50,000,000 shares in November 2023[28] - As of September 30, 2024, 25,933,217 shares of common stock were issued and outstanding[9][10] - A private placement in September 2022 generated approximately $6.3 million in net proceeds from the issuance of 2,264,650 units, each comprising one common share and a warrant[29] - 300,000 shares of common stock were issued in November 2023 in connection with a Loan and Security Agreement[30] Note 8. Stock-Based Compensation The 2020 Stock Incentive Plan has 324,452 shares available for future issuance, with stock-based compensation expense of approximately $0.3 million for the three months ended September 30, 2024, and $2.1 million in unrecognized expense - The 2020 Stock Incentive Plan has 324,452 shares available for future issuance as of September 30, 2024, out of a total authorized 3,650,000 shares[31] - Stock-based compensation expense was approximately $0.3 million for the three months ended September 30, 2024, compared to $0.2 million for the same period in 2023[37] - As of September 30, 2024, unrecognized stock-based compensation expense related to unvested stock options totaled approximately $2.1 million, to be recognized over a weighted average period of 2.3 years[37] Stock Option Activity (Three Months Ended September 30, 2024) | Metric | Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | | :-------------------------- | :--------------- | :------------------------------ | :------------------------------------------ | | Outstanding at June 30, 2024 | 2,319,048 | $3.00 | 6.0 | | Granted | - | - | - | | Exercised | - | - | - | | Forfeited/cancelled | - | - | - | | Outstanding at Sep 30, 2024 | 2,319,048 | $3.00 | 5.8 | | Options exercisable at Sep 30, 2024 | 903,994 | $3.15 | 3.0 | Note 9. Net Loss Per Share Attributable to Common Stockholders Net loss per share was $(0.08) for the three months ended September 30, 2024, an improvement from $(0.10) in the prior year, with 4,583,698 common stock equivalents excluded due to anti-dilutive effect Common Stock Equivalents Excluded from EPS Calculation | Category | Sep 30, 2024 | Sep 30, 2023 | | :-------------------- | :----------- | :----------- | | Stock options outstanding | 2,319,048 | 2,054,893 | | Warrants outstanding | 2,264,650 | 2,264,650 | | Total | 4,583,698 | 4,319,543 | - Net loss per share, basic and diluted, was $(0.08) for the three months ended September 30, 2024, compared to $(0.10) for the same period in 2023[11] Note 10. Loan and Security Agreement The company entered into a Loan and Security Agreement (LSA) on November 13, 2023, providing access to up to $10 million at 0.25% annual interest, with 300,000 shares issued upon signing and no outstanding balance as of September 30, 2024 - The company entered into a Loan and Security Agreement (LSA) on November 13, 2023, allowing it to draw up to $10 million at 0.25% annual interest, due on November 13, 2026[39] - 300,000 shares of common stock were issued to 22NW upon signing the LSA, with additional shares (0.03 per dollar loaned, up to 300,000 aggregate) to be issued upon advances[40] - As of September 30, 2024, there was no outstanding balance under the LSA[40] Note 11. Research and Development Grant The company received the first tranche of $0.9 million from a $1.9 million NIDA grant in July 2024, supporting IV selonabant development for pediatric cannabis toxicity, recognizing $0.2 million in grant income and a $0.2 million grant receivable - On July 16, 2024, the company was awarded the first tranche of $0.9 million from a two-year NIDA grant totaling up to $1.9 million to support the development of intravenous selonabant for pediatric cannabis toxicity[42] - The company recognized $0.2 million in grant income and recorded a $0.2 million grant receivable for the three months ended September 30, 2024, with no comparable income in the prior year[44] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations, highlighting its focus on developing selonabant for cannabis toxicity, recent financial performance, liquidity, capital resources, and critical accounting estimates Overview Anebulo Pharmaceuticals is a clinical-stage company developing selonabant for cannabis toxicity, prioritizing an IV formulation for pediatric use due to faster approval, and recently secured a U.S. patent and a $1.9 million NIDA grant - Anebulo Pharmaceuticals is a clinical-stage company developing selonabant (formerly ANEB-001) to rapidly reverse the negative effects of cannabis toxicities, including unintentional cannabis poisoning in children and ACI in adults[46] - The company is prioritizing the advancement of an intravenous (IV) selonabant formulation for pediatric patients with unintentional cannabis poisoning, believing it offers a faster timeline to approval compared to the adult oral product[51][52] - A U.S. patent (No. 11,795,146) was issued on October 24, 2023, covering crystalline forms of selonabant and methods of use to treat acute cannabinoid overdose, providing patent protection through 2042[56] - On July 16, 2024, the company was awarded the first tranche of $0.9 million from a two-year NIDA grant totaling up to $1.9 million to support the development of intravenous selonabant for emergency treatment of acute cannabis-induced toxicities in children[59] Components of Results of Operations This section outlines the company's key operational components: Revenue, Research and Development Expenses, and General and Administrative Expenses, noting no revenue generation since inception and expected significant operating losses Revenue The company has not generated any revenue since its inception and expects to continue incurring significant operating losses and negative cash flows, with future revenue contingent on successful product development or collaboration agreements - The company has not generated any revenue since inception and expects to incur significant operating losses and negative cash flows in the future[60] - Future revenue is dependent on successful development and marketing approval of selonabant or other product candidates, or through collaboration/license agreements[60] Research and Development Expenses Research and development expenses are a significant portion of operating costs, expensed as incurred, and are expected to increase as the company advances selonabant's clinical development and expands its pipeline - Research and development expenses are expected to significantly increase as the company continues to develop selonabant and conduct clinical trials for cannabis toxicity, and expand its product-candidate pipeline[63][64] - R&D expenses include employee costs, third-party CRO/CMO costs, consultant fees, other direct third-party expenses, and amortization for asset purchases[63] General and Administrative Expenses General and administrative expenses primarily consist of professional fees, stock-based compensation, insurance, personnel costs, and rent - General and administrative expenses primarily include professional fees, stock-based compensation, insurance, personnel costs, and rent[65] Results of Operations (Comparison of the Three Months Ended September 30, 2024 and 2023) The company's net loss decreased by $280,087 to $2.20 million for the three months ended September 30, 2024, compared to $2.48 million in the prior year, driven by decreased general and administrative expenses and recognized grant income Research and Development Expenses Research and development expenses increased slightly by $44,639 to $1.31 million for the three months ended September 30, 2024, mainly due to increased contract manufacturing costs, and are expected to increase further for IV selonabant formulation and clinical safety studies Research and Development Expenses | Category | Sep 30, 2024 | Sep 30, 2023 | Change | | :------------------------------------- | :----------- | :----------- | :----- | | Pre-clinical, nonclinical and clinical studies | $833,861 | $841,133 | $(7,272) | | Contract manufacturing | $215,466 | $143,302 | $72,164 | | Other research and development | $265,532 | $285,785 | $(20,253) | | Total research and development expenses | $1,314,859 | $1,270,220 | $44,639 | - Research and development expenses are expected to increase as the company scales up the IV selonabant formulation and commences clinical safety studies, following the completion of Phase 2 oral ACI trials[68] General and Administrative Expenses General and administrative expenses decreased by $176,193 to $1.10 million for the three months ended September 30, 2024, primarily due to strategic cost reductions in professional and consultant fees General and Administrative Expenses | Category | Sep 30, 2024 | Sep 30, 2023 | Change | | :---------------------------------- | :----------- | :----------- | :----- | | Compensation and related benefits | $306,613 | $264,710 | $41,903 | | Professional and consultant fees | $315,794 | $613,960 | $(298,166) | | Stock-based compensation expense | $286,920 | $210,797 | $76,123 | | Directors' and officers' insurance | $117,158 | $117,525 | $(367) | | Facilities, fees and other costs | $70,780 | $66,466 | $4,314 | | Total general and administrative expenses | $1,097,265 | $1,273,458 | $(176,193) | - The decrease in general and administrative expenses was primarily due to strategic cost reductions in professional and consultant fees[69] Interest Expense Interest expense was $0.1 million for the three months ended September 30, 2024, attributed to the amortization of loan commitment fees related to the Loan and Security Agreement, which was not in effect in the prior year - Interest expense was $0.1 million for the three months ended September 30, 2024, due to the amortization of loan commitment fees from the LSA, which was not in effect in the prior year period[70] Interest Income Interest income decreased to approximately $26,000 for the three months ended September 30, 2024, from approximately $55,000 in the prior year, due to lower cash balances and interest rates - Interest income decreased to approximately $26,000 for the three months ended September 30, 2024, from $55,000 in the prior year, attributed to lower cash balances and interest rates[71] Grant Income The company recognized $0.2 million in grant income for the three months ended September 30, 2024, from the NIDA research and development grant, with no comparable income in the prior year period - Grant income of $0.2 million was recognized for the three months ended September 30, 2024, from the NIDA research and development grant, with no comparable income in the prior year period[72] Liquidity and Capital Resources The company has incurred significant operating losses and expects this trend to continue, with $1.4 million in cash as of September 30, 2024, and anticipates needing additional funding beyond the next 12 months despite access to a $10 million LSA Overview The company has incurred significant operating losses since inception and expects to continue doing so, with $1.4 million in cash as of September 30, 2024, and plans to seek additional funding through equity, debt, or collaboration agreements - The company has incurred significant operating losses since inception and expects to continue incurring significant expenses and operating losses in the future[73] - As of September 30, 2024, cash and cash equivalents were $1.4 million[73] - The company plans to seek additional funding through equity and debt financings or collaboration agreements, with no assurance of securing funds on acceptable terms[73] Loan and Security Agreement The LSA, entered into on November 13, 2023, provides access to up to $10 million at 0.25% annual interest until November 13, 2026, with 300,000 common shares issued upon signing and no outstanding balance as of September 30, 2024 - The LSA provides access to up to $10 million for future operations until November 13, 2026, with an interest rate of 0.25% per annum[74] - 300,000 common shares were issued to 22NW upon signing the LSA, and 0.03 shares per dollar loaned (up to 300,000 aggregate) will be issued upon advances[75] - As of September 30, 2024, there was no outstanding balance under the LSA[75] Cash Flows Net cash used in operating activities for the three months ended September 30, 2024, was approximately $1.7 million, a significant decrease from $2.7 million in the prior year, due to lower net loss and favorable changes in operating assets and liabilities Net Cash Used in Operating Activities | Period | Net Cash Used in Operating Activities | | :------------------------- | :---------------------------------- | | Three Months Ended Sep 30, 2024 | $(1,689,989) | | Three Months Ended Sep 30, 2023 | $(2,726,825) | - The decrease in cash used in operating activities for the three months ended September 30, 2024, was primarily due to a lower net loss and favorable changes in operating assets and liabilities, partially offset by non-cash stock-based compensation and loan commitment amortization[78][79] Funding and Material Cash Requirements The company expects current cash and LSA access to fund operations for at least the next 12 months, but future funding needs are substantial and depend on clinical trial progress, regulatory approvals, and operational expansion, potentially leading to dilution or restrictive covenants - Current cash and LSA access are expected to fund operations for at least the next 12 months, but estimates are imprecise, and capital resources may be exhausted sooner[80] - Future funding requirements depend on clinical trial progress, regulatory approvals, operational expansion, intellectual property costs, and new product candidates[81] - Additional equity or debt financing, or collaboration agreements, will be needed, potentially causing stockholder dilution, liens on assets, or relinquishing rights to products[82] Contractual Obligations and Commitments The company has contractual obligations including a license agreement with Vernalis for selonabant, requiring potential milestone payments and royalties, an office lease, manufacturing contract, and CRO contracts, with the $3.0 million manufacturing contract substantially completed by June 30, 2024 License Agreement with Vernalis Development Limited The exclusive worldwide royalty-bearing license agreement with Vernalis for selonabant includes a $0.2 million signature fee, potential development milestone payments up to $29.9 million, sales milestone payments up to $35.0 million, and low to mid-single digit royalties - The license agreement with Vernalis for selonabant includes a $0.2 million signature fee, potential development milestone payments up to $29.9 million ($0.4 million paid), sales milestone payments up to $35.0 million, and low to mid-single digit royalties[83][84] - The company has sole discretion and responsibility for selonabant's development and commercialization, including regulatory approvals and associated costs[86] Office Lease, Manufacturing Contract and CRO Contract The company leases office space for approximately $400 per month, and a $3.0 million manufacturing agreement was substantially completed by June 30, 2024, with stability study costs expected through 2026, alongside cancellable CRO contracts - The company leases its principal executive office for approximately $400 per month[87] - A manufacturing agreement for approximately $3.0 million was substantially completed by June 30, 2024, with stability study costs expected to be fully incurred during calendar 2026[88] - The company enters into cancellable contracts with clinical trial sites and clinical supply manufacturers[89] Critical Accounting Estimates This section discusses critical accounting estimates requiring significant judgment, including accrued research and development expenses and stock-based compensation expense, and notes the company's election to use the extended transition period for new accounting standards under the JOBS Act Accrued Research and Development Expenses The company estimates accrued research and development expenses by reviewing contracts, communicating with personnel, and estimating service levels and costs for unbilled services, with potential adjustments for variations in service timing or effort - The company estimates accrued R&D expenses by reviewing contracts, communicating with personnel, and estimating service levels and costs for unbilled services from CROs, investigative sites, vendors, and manufacturers[92] - Estimates are made at each balance sheet date, and while not expected to be materially different, variations in actual service timing or effort may require adjustments[93] Stock-Based Compensation Expense Stock-based compensation expense is estimated using the Black-Scholes option pricing model, relying on subjective assumptions like expected stock price volatility and expected term, with no significant changes to these assumptions during the three months ended September 30, 2024 - The fair value of stock options is estimated using the Black-Scholes option pricing model, which depends on subjective assumptions including expected stock price volatility, expected term, risk-free rate, and expected dividends[95] - No significant changes to the assumptions used in the Black-Scholes model occurred during the three months ended September 30, 2024[96] JOBS Act Accounting Election As an "emerging growth company," the company has elected to use the extended transition period for new accounting standards under the JOBS Act, which may affect comparability and investor attractiveness - As an "emerging growth company," the company has elected to use the extended transition period for complying with new or revised accounting standards under the JOBS Act[97] - This election may make the company's financial statements less comparable to those of other public companies and could potentially reduce investor attractiveness[97] Item 3. Quantitative and Qualitative Disclosures About Market Risk This item is not required for smaller reporting companies - This item is not required for smaller reporting companies[99] Item 4. Controls and Procedures This section details the evaluation of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting Evaluation of Disclosure Controls and Procedures As of September 30, 2024, management concluded that the design and operation of the company's disclosure controls and procedures were effective at a reasonable assurance level - As of September 30, 2024, management, including the CEO and CFO, concluded that the design and operation of disclosure controls and procedures were effective at a reasonable assurance level[100][101] Changes in Internal Control over Financial Reporting There were no material changes in the company's internal control over financial reporting during the three months ended September 30, 2024 - No material changes in internal control over financial reporting occurred during the three months ended September 30, 2024[102] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not currently a party to any material legal proceedings, and management believes no pending claims could materially adversely affect its operations or financial condition - The company is not currently a party to any material legal proceedings, and management believes no pending claims could materially adversely affect its operations or financial condition[104] Item 1A. Risk Factors The company faces various risks, including its inability to generate revenue, an accumulated deficit of $67.6 million, expected future losses, clinical trial delays, regulatory hurdles, competition, and the need for substantial additional capital - The company has not generated any revenue since inception and has an accumulated deficit of $67.6 million as of September 30, 2024, expecting to incur future losses[106] - Future success is uncertain due to potential clinical trial delays, regulatory challenges, competition, and the need for substantial additional capital, which may not be available on acceptable terms[106][107][109] - Raising additional capital through equity or equity-linked securities may result in substantial dilution for existing stockholders, and debt financing may involve liens on assets and restrictive covenants[111][112] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company did not sell any equity securities in unregistered transactions during the quarter ended September 30, 2024, and there were no issuer purchases or repurchases of equity securities - No unregistered sales of equity securities occurred during the quarter ended September 30, 2024[115] - There were no issuer purchases or repurchases of equity securities during the quarter[115] Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities - No defaults upon senior securities were reported[115] Item 4. Mine Safety Disclosures This item is not applicable to the company - This item is not applicable[115] Item 5. Other Information No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended September 30, 2024 - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended September 30, 2024[115] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including various certificates of incorporation, bylaws, certifications of principal executive and financial officers, and Inline XBRL documents - The exhibits include various corporate governance documents (certificates of incorporation, bylaws), officer certifications (302 and 906), and Inline XBRL documents for financial data[116] Signatures - The report was signed on November 13, 2024, by Richard Anthony Cunningham (CEO) and Daniel George (CFO)[119]