Acquisition and Investments - The Company entered into a Share Purchase and Transfer Agreement to acquire Cataneo GmbH for a total purchase price of $19,500,000, consisting of $9,000,000 in cash and 4,200,000 shares of Common Stock valued at $2.50 per share[141]. - The acquisition of Cataneo is expected to close in Q4 2024, subject to customary closing conditions[144]. - The company has agreed to pay a cash purchase price of $9.0 million as part of the Cataneo Purchase Agreement[214]. - The company entered into a research and development sponsorship agreement with Korea University for a total consideration of up to 528.0 million Korean won (approximately $0.4 million) from January 2024 through December 2024[213]. Financing Activities - The Company raised $5,925,000 through the issuance of 1,185,000 shares of Common Stock at $5.00 per share in an August Private Placement[146]. - The Company has a Standby Equity Purchase Agreement allowing it to sell up to $50,000,000 of Common Stock to Yorkville during a 36-month commitment period[152]. - The company entered into a Standby Equity Purchase Agreement (SEPA) allowing it to sell up to $50.0 million of Common Stock over a 36-month period[192]. - The company issued a Promissory Note to Yorkville for approximately $1.7 million, maturing on March 11, 2025, with a potential interest rate increase to 18.0% upon default[193]. - The company raised approximately $5.9 million through the issuance of 1,185,000 shares of Common Stock at a price of $5.00 per share[195]. - The company issued 960,000 warrants with an exercise price of $5.00 per share as part of the August Warrant Agreement[199]. Operational Performance - For the three months ended September 30, 2024, the Company reported revenues of $50,000, an increase from $0 for the same period in 2023[173][174]. - General and administrative expenses for the three months ended September 30, 2024 were approximately $4.2 million, an increase of approximately $1.9 million compared to the same period in 2023[175]. - Total operating expenses for the three months ended September 30, 2024 were $5.3 million, up from $2.6 million in the same period in 2023, resulting in a loss from operations of $5.3 million[173]. - The Company incurred a gain on debt extinguishment of approximately $98,318 for the three months ended September 30, 2024, compared to no such gain in the same period in 2023[178]. - For the nine months ended September 30, 2024, the Company reported revenues of $99,790, an increase from $0 for the same period in 2023[182]. - General and administrative expenses for the nine months ended September 30, 2024 were approximately $16.0 million, an increase of approximately $8.3 million compared to the same period in 2023[181]. - Research and development expenses for the three months ended September 30, 2024 were approximately $0.2 million, an increase of approximately $0.1 million compared to the same period in 2023[177]. - The Company experienced a net loss of $5.8 million for the three months ended September 30, 2024, compared to a net loss of $2.6 million for the same period in 2023[173]. - Gain on extinguishment of debt for the nine months ended September 30, 2024 was approximately $1.9 million, with no such extinguishment during the same period in 2023[187]. - Change in fair value of warrant liabilities for the nine months ended September 30, 2024 was approximately $0.8 million, with no expenses incurred during the same period in 2023[188]. Cash Flow and Financial Position - As of September 30, 2024, the company had cash of approximately $0.1 million and an accumulated deficit of approximately $29.1 million[189]. - The company expects recurring losses and negative cash flows to continue due to increased expenses and ongoing product research and development[189]. - Cash used in operating activities for the nine months ended September 30, 2024, was approximately $11.7 million, primarily due to a net loss of approximately $15.8 million[216]. - Cash provided by financing activities during the nine months ended September 30, 2024, was approximately $10.3 million, mainly from the sale of Common Stock and exercise of options and warrants[219]. - Cash used in investing activities during the nine months ended September 30, 2024, was approximately $0.2 million, primarily for capitalized internal-use software costs[218]. - The net cash inflow from changes in operating assets and liabilities was approximately $1.5 million, mainly due to an increase in accounts payable of $5.4 million[216]. - The company expects to seek additional funds primarily through the issuance of debt or equity securities to support its operations[210]. - Cash used in operating activities for the nine months ended September 30, 2023, was approximately $2.8 million, primarily due to a net loss of approximately $8.3 million[217]. Management Changes - The Company appointed Paul Chang as Chief Executive Officer following the separation of Michael Zacharski, who received a total of $0.3 million in cash separation and bonus payments[155][156]. Intellectual Property - The Company has significant intellectual property in the form of a patent portfolio targeting industries such as automotive, healthcare, and financial services[140]. Funding Delays - The Company has experienced delays in funding from certain investors under the August SPA, with an aggregate amount of $1.25 million in required fundings currently uncertain[151]. - The company has experienced delays in funding from certain investors under the August SPA, with an aggregate amount of $1.25 million in required fundings not made[198]. Debt and Indebtedness - The Company issued 151,261 shares of Common Stock at $2.38 per share to convert $0.4 million in outstanding fees owed to Sponsor[154]. - The Company issued 93,333 shares of Common Stock at $4.50 per share to convert $0.4 million in outstanding indebtedness[159]. - The company issued the Cohen Convertible Note for $1.9 million to settle outstanding invoices, with a maturity date of March 14, 2025[207]. - As of September 30, 2024, the company had four outstanding bank loans totaling approximately $0.9 million, with interest rates ranging from 4.667% to 6.69%[212].
DHC Acquisition (DHCA) - 2024 Q3 - Quarterly Report