ptis Therapeutics (COEP) - 2024 Q4 - Annual Report

PART I ITEM 1. BUSINESS Coeptis Therapeutics develops cell therapy technologies for cancer and other diseases, advancing its pipeline and requiring financing - Coeptis Therapeutics Holdings, Inc. was incorporated on November 27, 2018, domesticated to Delaware on October 27, 2022, and changed its name on October 28, 2022, following a reverse merger[23] - The company operates through wholly-owned subsidiaries Coeptis Therapeutics, Inc., Coeptis Pharmaceuticals, Inc., and Coeptis Pharmaceuticals, LLC, and majority-owned subsidiaries SNAP Biosciences, Inc. and GEAR Therapeutics, Inc[24] - The business model focuses on developing its current product portfolio, exploring partnership opportunities for novel therapies, and leveraging in-license, out-license, and co-development arrangements[25] Product Pipeline Summary | Program | Target Indication | Pre-Clinical | Phase I | Phase II Phase III | | :--- | :--- | :--- | :--- | :--- | | CD38-GEAR NK | Protect CD38+ NK Cells from destruction by anti-CD38 monoclonal antibodies | X | | | | CD38-Diagnostic | Diagnostic tool to analyze if cancer patients might be appropriate candidates for anti-CD38 mAB therapy | X | | | | SNAP-CAR Platform | SNAP-CAR cells co-administered with one or more antibody adaptors | X | | | | Unmodified Natural Killer Cells | Acute Myeloid Leukemia | X | X | | | Unmodified Natural Killer Cells | Acute Respiratory Diseases | X | X | | - In August 2023, Coeptis licensed an exclusive allogeneic stem cell expansion and directed differentiation platform from Deverra Therapeutics Inc., including two IND applications and two Phase 1 clinical trial stage programs for unmodified NK cell therapy[28] - The company acquired a 50% ownership interest in CD38-GEAR-NK and CD38-Diagnostic from Vy-Gen Bio, Inc. in 2021-2022[31][32][35] - The CD38-Diagnostic was designated a Class II type device by the FDA in September 2023, aiding future development planning[37] - In August 2022, Coeptis licensed SNAP-CAR technology from the University of Pittsburgh, expanding its field of use to include natural killer cells in September 2023, with a focus on solid tumors[40][41][42] - The company has ceased allocating priority resources to CPT60621, an oral liquid Parkinson's Disease drug, and is negotiating a buy-out of its ownership rights by Vici Health Sciences, LLC[48] - Coeptis' growth strategy is three-pronged: Portfolio Optimization, Strategic Partnerships, and Business Development[51][52][53][54] - As of November 2024, the company entered into a Standby Equity Purchase Agreement (SEPA) with Yorkville, allowing it to sell up to $20,000,000 of common stock and receiving a convertible promissory note of up to $1,304,758[58] - The company has a history of losses, expects future losses, and requires additional financing to continue operations and pursue strategic transactions, raising substantial doubt about its ability to continue as a going concern[60] ITEM 1A. RISK FACTORS Significant risks include product development, regulatory approval, financial sustainability, and potential Nasdaq delisting - Clinical trials are expensive, time-consuming, difficult to design and implement, and involve uncertain outcomes, with no guarantee that positive preclinical or early-stage results will translate to success in later stages or regulatory approval[67][68] - Delays in clinical trials can arise from regulatory discussions, limited suitable sites, funding issues, manufacturing delays, slow patient recruitment, unforeseen safety issues, or lack of efficacy, hindering regulatory approval and revenue generation[69][71] - The independent registered public accounting firm's report indicates substantial doubt about the company's ability to continue as a going concern due to net losses, negative operating cash flows, and working capital deficits[76] Net Loss and Accumulated Deficit | Metric | Year Ended December 31, 2024 | Year Ended December 31, 2023 | | :--- | :--- | :--- | | Net Loss | $(10,877,412) | $(21,266,537) | | Accumulated Deficit | $(98,233,673) | $(87,356,260) | - The company currently lacks sufficient cash to fully implement its business plan and will require additional short-term and long-term financing, which may not be available on acceptable terms or at all, potentially leading to delays or termination of development programs[85][88] - The company relies on third-party agreements for intellectual property rights and must sustain and build its direct and indirect IP rights to prevent competitors from duplicating its research and development efforts[92] - Competition in the biotechnology and pharmaceutical industries is intense, with many competitors possessing greater resources and experience, potentially leading to superior competing products, lower revenues, or obsolescence of the company's product candidates[102][103] - The regulatory approval process is costly and lengthy, with no guarantee of success, and failure to comply with continuing regulatory requirements post-approval could lead to loss of approvals, product recalls, and costly product liability claims[108][109][110] - The company's holding company structure makes it dependent on its subsidiaries for cash flow, potentially subordinating shareholder rights to subsidiary creditors in case of insolvency[118] - The company faces a risk of Nasdaq delisting if it fails to maintain listing requirements, such as a minimum bid price of $1.00 per share or minimum stockholders' equity, which could negatively impact its stock price and liquidity[126][127][128] - Management self-identified material weaknesses in internal control over financial reporting in 2022 and 2023, which, if not fully remediated, could result in material misstatements or failure to meet reporting obligations[129][131] - As an 'emerging growth company,' Coeptis benefits from reduced disclosure requirements, but this status may make its securities less attractive to some investors, potentially leading to a less active trading market and increased stock price volatility[133][135] ITEM 1B. UNRESOLVED STAFF COMMENTS The company has no unresolved staff comments from the SEC - There are no unresolved staff comments[136] ITEM 1C. CYBERSECURITY The company's cybersecurity relies on Microsoft Outlook and OneDrive protocols, with executive oversight and IT service provider support - The company's cybersecurity measures primarily rely on standard security protocols provided by Microsoft Outlook and OneDrive, including encryption, multi-factor authentication, and access controls[137] - Executive management is responsible for overseeing cybersecurity risks, and the company relies on IT service providers and Microsoft's security framework for system protection and incident response, lacking a dedicated cybersecurity team[139] - The company acknowledges potential vulnerability to cybersecurity incidents that could disrupt operations, compromise sensitive data, or result in financial or reputational harm[138][140] ITEM 2. PROPERTIES The company's principal place of business is a leased office in Wexford, Pennsylvania, with the lease expiring on May 31, 2026 - The principal place of business is located at 105 Bradford Rd, Suite 420, Wexford, Pennsylvania, under a lease scheduled to expire on May 31, 2026[141] - The company does not own any properties or land[142] ITEM 3. LEGAL PROCEEDINGS The company is subject to ordinary course litigation but believes no pending lawsuits will materially affect its financial condition - The company is subject to litigation and other proceedings in the ordinary course of business but believes no pending lawsuits or claims will have a material adverse effect[143] ITEM 4. MINE SAFETY DISCLOSURES This item is not applicable to the company - This item is not applicable[144] PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The company's common stock is listed on Nasdaq under "COEP", with 3,364,939 shares outstanding as of March 26, 2025 - The company's common stock is listed on the Nasdaq Global Market under the symbol "COEP", with a closing price of $5.50 per share on December 31, 2024[147] - As of March 26, 2025, there were 3,364,939 shares of common stock issued and outstanding, held by 121 record holders[148] - The company has never declared or paid dividends and does not intend to do so, planning to retain future earnings for business development and growth[149] - The 2022 Equity Incentive Plan, which allows for various equity awards, had its maximum authorized shares increased to 367,000 in December 2023, with 279,625 stock options granted as of December 31, 2024[152][153] - In August 2023, the company issued 4,000,000 shares of common stock to Deverra Therapeutics Inc. as part of an exclusive licensing arrangement[188] - In September 2023, the company issued 2,400,000 shares of common stock for $2,400,000 and 600,000 shares for $600,000 to private investors[189] - In October 2023, a private placement generated $2,000,000 gross proceeds through the issuance of 777,000 common shares, pre-funded warrants, Series A Warrants, and Series B Warrants[190] - Between June 2024 and February 2025, the company sold 10,000 shares of its Series A Preferred Stock for aggregate gross proceeds of $10 million[191] - In November 2024, the company issued 400,000 Commitment Shares and a $1,304,758 convertible promissory note to Yorkville as part of a Standby Equity Purchase Agreement[192][193] Authorized Capital Stock | Stock Type | Par Value | Authorized Shares | | :--- | :--- | :--- | | Common Stock | $0.0001 | 150,000,000 | | Preferred Stock | $0.0001 | 10,000,000 | Outstanding Equity as of December 31, 2024 | Equity Type | Shares Outstanding | | :--- | :--- | | Common Stock | 2,116,191 | | Series A Preferred Stock | 6,520 | | Warrants (total) | 1,399,316 | | Stock Options (total) | 279,625 | ITEM 6. SELECTED FINANCIAL DATA As a smaller reporting company, Coeptis Therapeutics Holdings, Inc. is not required to provide selected financial data - The company is a smaller reporting company and is not required to provide selected financial data[207] ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS MD&A reviews Coeptis Therapeutics' financial condition and operations for 2024 and 2023, highlighting continued losses and liquidity challenges - The company is a biopharmaceutical and technology company focused on acquiring and developing cell therapy technologies for cancer and other diseases, with products intended for commercialization in the US and other major markets[217] - The company has generated minimal revenue to date, primarily from consulting and product sales, and does not expect significant revenue for at least the next year as drug development continues[235][238] Operating Expenses Comparison (2024 vs. 2023) | Expense Category | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | Change (YoY) | | :--- | :--- | :--- | :--- | | Research and development | $2,331,548 | $6,668,244 | $(4,336,696) | | Salary expense | $1,722,050 | $1,454,295 | $267,755 | | Amortization expense | $1,000,000 | $1,000,000 | $0 | | Professional services expense | $2,950,271 | $10,864,640 | $(7,914,369) | | Stock based compensation expense | $1,104,978 | $477,503 | $627,475 | | General and administrative expenses | $945,641 | $1,026,443 | $(80,802) | | Total Operating Expenses | $10,054,488 | $21,491,125 | $(11,436,637) | - Operating expenses decreased significantly in 2024, primarily due to lower research and development expenses and reduced legal and consulting services, partially offset by higher stock-based compensation[239] Other Income (Expense) Comparison (2024 vs. 2023) | Category | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | Change (YoY) | | :--- | :--- | :--- | :--- | | Interest expense | $(396,116) | $(107,685) | $(288,431) | | Royalties and licensing fees | $0 | $(15,000) | $15,000 | | Other income (expense) | $152,109 | $(220,477) | $372,586 | | Loss on write down of assets | $(37,257) | $0 | $(37,257) | | Loss on extinguishment of debt | $(200,000) | $0 | $(200,000) | | (Loss) gain on change in fair value of derivative liability and derivative liability warrants, net | $(341,660) | $567,750 | $(909,410) | | Total Other (Expense) Income | $(822,924) | $224,588 | $(1,047,512) | - Total other expense increased significantly in 2024, primarily due to a loss on change in fair value of derivative liability and a loss on extinguishment of debt related to the Yorkville SEPA[242] Cash Position (2024 vs. 2023) | Metric | As of December 31, 2024 | As of December 31, 2023 | Change | | :--- | :--- | :--- | :--- | | Cash | $532,885 | $1,469,134 | $(936,249) | - The company's cash decreased from $1,469,134 in 2023 to $532,885 in 2024, indicating limited financial resources and a continued need to raise capital[243] ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a smaller reporting company, Coeptis Therapeutics Holdings, Inc. is not required to provide market risk disclosures - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[244] ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The required financial statements and supplementary data are appended to this report and incorporated by reference - The financial statements required are appended to this report and incorporated by reference, with an index found in Item 15 of Part IV[245] ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Coeptis Therapeutics Holdings, Inc. engaged Astra Audit & Advisory, LLC as its independent registered public accounting firm for 2024, dismissing Turner, Stone & Company, LLP - Turner, Stone & Company, L.L.P. became the company's auditors following the Merger and adoption of Coeptis' historical business[246] - On September 30, 2024, the company engaged Astra Audit & Advisory, LLC as its independent registered public accounting firm for the fiscal year ending December 31, 2024, and dismissed Turner, Stone & Company, LLP[247] ITEM 9A. CONTROLS AND PROCEDURES Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2024, following remediation efforts - As of December 31, 2024, the company's disclosure controls and procedures were deemed effective by management, following remediation efforts for previously self-diagnosed material weaknesses[249] - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2024, after addressing material weaknesses identified in 2023 related to internal controls and financial statement close processes[250][251] - The company is exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act as a non-accelerated filer[253] ITEM 9B. OTHER INFORMATION No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the quarter ended December 31, 2024 - No director or officer adopted or terminated a "Rule 10b5-1 trading arrangement" during the quarter ended December 31, 2024[254] - The company has adopted an insider trading policy and procedures, available on its corporate website, governing the purchase, sale, and other disposition of its securities[255] PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE This section details Coeptis Therapeutics Holdings, Inc.'s executive officers, directors, board independence, committee structures, and Code of Business Conduct and Ethics Executive Officers and Directors | Name | Age | Position | | :--- | :--- | :--- | | David Mehalick | 56 | Chairman, Chief Executive Officer and President | | Daniel Yerace | 42 | Director and Vice President of Operations | | Brian Cogley | 38 | Chief Financial Officer | | Colleen Delaney | 57 | Chief Scientific and Medical Officer | | Christine Sheehy | 57 | Vice President of Compliance and Secretary | | Christopher Calise | 51 | Director | | Tara Maria DeSilva | 56 | Director | | Philippe Deschamps | 62 | Director | | Christopher Cochran | 55 | Director | | Gene Salkind | 71 | Director | - Colleen Delaney resigned as Chief Medical and Scientific Officer effective March 24, 2025, to pursue another business opportunity but will continue on a consulting basis for up to six months[263] - Tara Maria DeSilva, Philippe Deschamps, Christopher Cochran, and Gene Salkind are considered independent directors under Nasdaq rules and Exchange Act criteria, while Christopher Calise is considered an independent director under Nasdaq rules[274] - The Board has an Audit Committee (chaired by Philippe Deschamps), a Compensation Committee (chaired by Christopher Cochran), and a Nominating and Corporate Governance Committee (chaired by Christopher Cochran), all composed of independent directors[276][279][281] - The company has adopted a Code of Business Conduct and Ethics applicable to all employees, officers, and directors, available on its website[282] - Christopher Calise and Tara Maria DeSilva are first cousins, but there are no other family relationships among executive officers or directors[285] - The company has a Scientific Advisory Board formed in 2022, comprising three scientific researchers from the Karolinska Institutet: Evren Alici, M.D., Ph.D.; Hans-Gustaf Ljunggren, M.D., Ph.D; and Arnika Kathleen Wagner, Ph.D[292] ITEM 11. EXECUTIVE COMPENSATION This section details the compensation of named executive officers for 2023 and 2024, including salaries and equity awards Summary Compensation Table (2024 & 2023) | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Non-qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | David Mehalick, Chairman, CEO and President | 2024 | 360,000 | – | – | – | – | – | – | 360,000 | | | 2023 | 360,000 | – | – | – | – | – | – | 360,000 | | Daniel Yerace, Vice President of Operations | 2024 | 360,000 | – | – | – | – | – | – | 360,000 | | | 2023 | 360,000 | – | – | – | – | – | – | 360,000 | | Brian Cogley, Chief Financial Officer | 2024 | 200,000 | – | – | – | – | – | – | 200,000 | | | 2023 | 200,000 | 8,000 | – | – | – | – | – | 208,000 | | Colleen Delaney, Chief Scientific and Medical Officer | 2024 | 360,000 | – | – | – | – | – | – | 360,000 | | | 2023 | 360,000 | – | – | – | – | – | – | 360,000 | | Christine Sheehy, Former Chief Financial Officer | 2024 | 83,769 | – | – | – | – | – | – | 83,769 | | | 2023 | 150,999 | – | – | – | – | – | – | 150,999 | - David Mehalick and Daniel Yerace have employment agreements with annualized salaries of $360,000 each, plus eligibility for guaranteed and merit bonuses and equity awards[298][299] - As of December 31, 2024, the company had 279,625 unexercised stock options outstanding for executive officers, directors, and consultants, compared to 82,850 as of December 31, 2023[302] Outstanding Equity Awards at Fiscal Year End (December 31, 2024) | Name | Number of Securities Underlying Unexercised Options Exercisable () | Number of Securities Underlying Unexercised Options Unexercisable () | Grant Date | Option Exercise Price ($) | Option Expiration Date | | :--- | :--- | :--- | :--- | :--- | :--- | | David Mehalick | 6,250 | 6,250 | 1/27/2023 | 35.20 | 1/27/2028 | | David Mehalick | 9,374 | 9,376 | 1/27/2023 | 32.00 | 1/27/2033 | | David Mehalick | – | 20,000 | 1/10/2024 | 12.92 | 1/10/2034 | | David Mehalick | 120,000 | – | 6/13/2024 | 6.20 | 6/12/2034 | | Daniel Yerace | 5,000 | 5,000 | 1/27/2023 | 32.00 | 1/27/2033 | | Daniel Yerace | – | 10,000 | 1/10/2024 | 12.92 | 1/10/2034 | | Christine Sheehy | 5,000 | 5,000 | 1/27/2023 | 32.00 | 1/27/2033 | | Christine Sheehy | – | 2,500 | 1/10/2024 | 12.92 | 1/10/2034 | | Christopher Calise | 1,500 | – | 1/27/2023 | 32.00 | 1/27/2033 | | Christopher Calise | 1,750 | – | 1/10/2024 | 12.92 | 1/10/2034 | | Tara DeSilva | 1,500 | – | 1/27/2023 | 32.00 | 1/27/2033 | | Tara DeSilva | 1,750 | – | 1/10/2024 | 12.92 | 1/10/2034 | | Gene Salkind | 1,500 | – | 1/27/2023 | 32.00 | 1/27/2033 | | Gene Salkind | 1,750 | – | 1/10/2024 | 12.92 | 1/10/2034 | | Philippe Deschamps | 1,500 | – | 1/27/2023 | 32.00 | 1/27/2033 | | Philippe Deschamps | 1,750 | – | 1/10/2024 | 12.92 | 1/10/2034 | | Christopher Cochran | 1,500 | – | 1/27/2023 | 32.00 | 1/27/2033 | | Christopher Cochran | 1,750 | – | 1/10/2024 | 12.92 | 1/10/2034 | | Brian Cogley | 1,250 | 3,750 | 10/02/2023 | 21.40 | 10/2/2033 | | Brian Cogley | – | 7,500 | 1/10/2024 | 12.92 | 1/10/2034 | | Colleen Delaney | 2,500 | 7,500 | 10/02/2023 | 21.40 | 10/2/2033 | | Colleen Delaney | – | 20,000 | 1/10/2024 | 12.92 | 1/10/2034 | Non-Employee Director Compensation | Year | Total Compensation | | :--- | :--- | | 2024 | $20,000 | | 2023 | $18,333 | ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS This section provides beneficial ownership information for common stock by executive officers, directors, and significant stockholders as of March 26, 2025 Beneficial Ownership as of March 26, 2025 | Name of Beneficial Ownership | Shares Owned | Percentage | | :--- | :--- | :--- | | David Mehalick | 274,449 | 6.89% | | Daniel Yerace | 59,282 | 1.54% | | Christopher Calise | 364,466 | 9.37% | | Tara DeSilva | 4,675 | * | | Philippe Deschamps | 4,675 | * | | Christopher Cochran | 4,675 | * | | Gene Salkind | 8,886 | * | | Brian Cogley | 4,062 | * | | Christine Sheehy | 56,844 | 1.48% | | Colleen Delaney | 8,125 | * | | Officers and Directors as a Group (10 persons) | 790,139 | 20.18% | * Less than 1.0%. - Applicable percentage ownership is based on an assumed 3,839,939 shares of common stock outstanding as of March 26, 2025, including 3,364,939 issued and outstanding shares and 475,000 shares underlying Series A Convertible Preferred Stock[312] - The company is not aware of any arrangements that may result in a change of control[316] ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE This section outlines related party transactions, board independence, committee structures, and indemnification provisions for directors and officers - Prior to the merger, the predecessor's sponsor, officers, and directors were reimbursed for certain out-of-pocket expenses[318] - In 2021, David Mehalick purchased Series B Preferred Stock from Coral Investment Partners, LP, which was later exchanged for common stock during the merger[322] - The company's bylaws and certificate of incorporation provide for indemnification of directors and officers to the fullest extent permitted by Delaware law, and the company intends to enter into indemnification agreements with each director and executive officer[289][290][333] - Christopher Calise and Tara Maria DeSilva are first cousins, representing the only family relationship among executive officers or directors[328] ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES This section details the fees paid to Astra Audit & Advisory, LLC (2024) and Turner, Stone & Company, LLP (2023) for audit and other services Principal Accountant Fees and Services (2024 vs. 2023) | Fee Type | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Audit fees | $159,335 | $73,912 | | Other Service Fees | $22,949 | $145,440 | | Total | $182,284 | $219,352 | - Audit fees increased from $73,912 in 2023 to $159,335 in 2024, while other service fees decreased from $145,440 in 2023 to $22,949 in 2024[337] PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES This section lists the documents filed as part of the report, including financial statements, schedules, and an exhibit index - The report includes financial statements (see Item 8), financial statement schedules (omitted if not applicable), and an exhibit index[343] ITEM 16. FORM 10-K SUMMARY The company does not provide a Form 10-K Summary - No Form 10-K Summary is provided[342] ITEM 17. EXHIBIT INDEX This section provides a comprehensive list of exhibits filed with the Form 10-K, including corporate governance and licensing agreements - The exhibit index includes documents such as the Agreement and Plan of Merger and Reorganization, Amended and Restated Certificate of Incorporation and Bylaws, Registration Rights Agreement, various Co-Development Option Purchase Agreements, Employment Agreements, the 2022 Equity Incentive Plan, and certifications[345][348] ITEM 18. SIGNATURES The report is duly signed on behalf of Coeptis Therapeutics Holdings, Inc. by its CEO, CFO, and other directors as of March 27, 2025 - The report is signed by David Mehalick (Chief Executive Officer and Principal Executive Officer), Brian Cogley (Chief Financial Officer and Principal Financial and Accounting Officer), and other directors, dated March 27, 2025[351][352] Financial Statements INDEX TO CONSOLIDATED FINANCIAL STATEMENTS This section provides an index to Coeptis Therapeutics Holdings, Inc.'s consolidated financial statements for the years ended December 31, 2024, and 2023 - The index lists the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Stockholders' Equity, Consolidated Statements of Cash Flows, and Notes to Consolidated Financial Statements for the years ended December 31, 2024 and 2023[354] REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (Astra Audit & Advisory, LLC) Astra Audit & Advisory, LLC issued an unqualified opinion on the 2024 financial statements but noted substantial doubt about the company's going concern ability - Astra Audit & Advisory, LLC issued an unqualified opinion on the consolidated financial statements for the year ended December 31, 2024[357] - The report includes an explanatory paragraph regarding substantial doubt about the company's ability to continue as a going concern, citing net losses, negative operating cash flows, and working capital deficits[358] - Astra Audit & Advisory, LLC has served as the company's auditor since 2024[361] REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (Turner, Stone & Company, L.L.P.) Turner, Stone & Company, L.L.P. issued an unqualified opinion on the 2023 financial statements but also raised substantial doubt about the company's going concern ability - Turner, Stone & Company, L.L.P. issued an unqualified opinion on the consolidated financial statements for the two years ended December 31, 2023[366] - The report highlights substantial doubt about the company's ability to continue as a going concern due to recurring losses from operations and insufficient working capital[367] - Turner, Stone & Company, L.L.P. served as the company's auditor from 2020 to 2024[372] CONSOLIDATED BALANCE SHEETS The consolidated balance sheets show significant increases in total assets, liabilities, and stockholders' equity from 2023 to 2024 Consolidated Balance Sheet Summary | Metric | As of December 31, 2024 | As of December 31, 2023 | | :--- | :--- | :--- | | ASSETS | | | | Cash | $532,885 | $1,469,134 | | Total Current Assets | $1,051,292 | $1,749,713 | | Investments | $5,691,084 | $0 | | Intangible assets | $541,875 | $0 | | Total Assets | $8,908,660 | $4,571,089 | | LIABILITIES | | | | Total Current Liabilities | $4,513,309 | $2,988,696 | | Derivative liability | $1,041,484 | $0 | | Total Liabilities | $5,041,434 | $3,757,125 | | STOCKHOLDERS' EQUITY | | | | Accumulated deficit | $(98,233,673) | $(87,356,260) | | Total Stockholders' Equity | $3,867,226 | $813,964 | - Total assets increased by approximately $4.34 million (95%) from December 31, 2023, to December 31, 2024, primarily due to new investments and intangible assets[374] - Total liabilities increased by approximately $1.28 million (34%) from December 31, 2023, to December 31, 2024, largely driven by the introduction of a derivative liability[374] - Total stockholders' equity increased by approximately $3.05 million (375%) from December 31, 2023, to December 31, 2024, despite an increase in accumulated deficit[374] CONSOLIDATED STATEMENTS OF OPERATIONS The consolidated statements of operations show a reduced net loss in 2024 due to lower operating expenses, despite increased other expenses Consolidated Statements of Operations Summary | Metric | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Sales | $0 | $0 | | Total operating expenses | $10,054,488 | $21,491,125 | | Loss from operations | $(10,054,488) | $(21,491,125) | | Total other (expense) income | $(822,924) | $224,588 | | Net loss | $(10,877,412) | $(21,266,537) | | Loss per share, basic and fully diluted | $(5.65) | $(16.56) | | Weighted average number of common shares outstanding | 1,924,639 | 1,284,499 | - Net loss decreased by approximately $10.39 million (48.9%) from $21,266,537 in 2023 to $10,877,412 in 2024[376] - Operating expenses decreased by approximately $11.44 million (53.2%) from $21,491,125 in 2023 to $10,054,488 in 2024, mainly due to lower R&D and professional services expenses[376] - Loss per share (basic and diluted) improved from $(16.56) in 2023 to $(5.65) in 2024, despite an increase in weighted average common shares outstanding[376] CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY The consolidated statements of stockholders' equity show significant increases in additional paid-in capital and total equity in 2024, despite an accumulated deficit Key Changes in Stockholders' Equity (2024 vs. 2023) | Metric | As of December 31, 2024 | As of December 31, 2023 | | :--- | :--- | :--- | | Preferred Stock Series A | $2 | $0 | | Common stock | $212 | $179 | | Additional paid-in capital | $102,976,748 | $91,670,045 | | Subscription receivable | $(2,100,000) | $(3,500,000) | | Common stock subscribed | $541,875 | $0 | | Accumulated deficit | $(98,233,673) | $(87,356,260) | | Total Stockholders' Equity - Controlling Interests | $3,185,164 | $813,964 | | Total Stockholders' Equity - Noncontrolling Interests | $682,062 | $0 | | Total Stockholders' Equity | $3,867,226 | $813,964 | - Additional paid-in capital increased by $11,306,703 in 2024, reflecting proceeds from common stock and warrant issuances, preferred share offerings, and stock-based compensation[379] - The accumulated deficit increased by $10,877,413 in 2024 due to the net loss incurred during the year[379] - Non-controlling interests of $682,062 were recognized in 2024 due to the consolidation of newly formed subsidiaries SNAP Biosciences, Inc. and GEAR Therapeutics, Inc[379] CONSOLIDATED STATEMENTS OF CASH FLOWS The consolidated statements of cash flows show continued cash usage in operating activities, with financing activities providing liquidity, resulting in decreased cash by year-end 2024 Consolidated Statements of Cash Flows Summary | Activity | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(6,649,281) | $(7,239,514) | | Net cash used in investing activities | $0 | $0 | | Net cash provided by financing activities | $5,713,032 | $4,917,346 | | Net change in cash | $(936,249) | $(2,322,168) | | Cash at end of period | $532,885 | $1,469,134 | - Net cash used in operating activities decreased by $590,233 (8.15%) from $7,239,514 in 2023 to $6,649,281 in 2024[381] - Net cash provided by financing activities increased by $795,686 (16.18%) from $4,917,346 in 2023 to $5,713,032 in 2024, primarily from preferred stock offerings and convertible notes[381] - Cash at the end of the period decreased by $936,249 (63.7%) from $1,469,134 in 2023 to $532,885 in 2024[381] NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The notes provide detailed information on the company's business, accounting policies, financial instruments, capital structure, investments, and commitments NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION This note describes Coeptis Therapeutics Holdings, Inc. as a biopharmaceutical and technology holding company, formed through a reverse merger in October 2022 - Coeptis Therapeutics Holdings, Inc. is a biopharmaceutical and technology company, operating through direct and indirect subsidiaries SNAP Biosciences, Inc., GEAR Therapeutics, Inc., Coeptis Therapeutics, Inc., Coeptis Pharmaceuticals, Inc., and Coeptis Pharmaceuticals, LLC[384][385] - The company's biopharmaceutical division develops cell therapy platforms for cancer, autoimmune, and infectious diseases, while the technology division focuses on AI-powered marketing software and robotic process automation[385] - A 20-1 reverse stock split of issued and outstanding common stock was completed on December 31, 2024, and retrospectively applied to all share and per-share amounts[388] NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note outlines significant accounting policies, including cash, intangible assets, R&D costs, derivative liabilities, and the going concern uncertainty - The company classifies highly liquid investments with maturities of three months or less as cash equivalents and monitors uninsured balances exceeding the federally insured limit[390] - Intangible assets, including $541,875 related to the acquired NexGenAI Affiliates Network Platform in 2024, are recorded at cost and amortized using the straight-line method over estimated useful lives of two to forty years[392] - Research and development costs are expensed as incurred, totaling $2,331,548 in 2024 and $6,668,244 in 2023[395] - Derivative liability warrants are classified as liabilities at fair value and re-measured each reporting period, with changes recognized in the consolidated statements of operations[397] - The company had an accumulated deficit of $98,233,673 and a net loss of $10,877,412 for the year ended December 31, 2024, raising substantial doubt about its ability to continue as a going concern[410] Antidilutive Potential Common Shares | Instrument | Years ended December 31, 2024 | Years ended December 31, 2023 | | :--- | :--- | :--- | | Warrants | 1,399,316 | 1,036,601 | | Stock options | 279,625 | 82,875 | | Convertible notes payable | 406,629 | 8,056 | | Preferred stock | 815,000 | – | | Total | 2,900,570 | 1,127,532 | NOTE 3 – CO-DEVELOPMENT OPTIONS This note details the termination of a license agreement with Purple and the capitalization of CD38 Assets from Vy-Gen-Bio, Inc. - The company terminated its license agreement with Purple for the Consensi product in September 2021, resulting in convertible debt and warrant issuances[416] - Joint development agreements with Vy-Gen-Bio, Inc. for CD38-GEAR-NK and CD38-Diagnostic (CD38 Assets) involved payments of $1,750,000 and promissory notes totaling $3,250,000[417] - The CD38 Assets are capitalized at $5,000,000 and amortized over a five-year period, based on their platform technology nature, multiple applications, and reasonable expectation of future value[417][418] - The net carrying amount of co-development options was $1,554,167 at December 31, 2024, after accumulated amortization of $3,737,500[420] NOTE 4 – NOTES PAYABLE This note details a convertible promissory note for $350,000, issued in October 2022 for legal services, which was in default at year-end 2024 - A convertible promissory note of $350,000, issued in October 2022 for legal services, had an outstanding balance of $100,000 at December 31, 2024, and was in default[421] - The note's conversion price is $10.00 per share, subject to a one-time adjustment to the thirty-day volume weighted average price, with a floor of $5.00 and a ceiling of $10.00 per share[421] NOTE 5 – CONVERTIBLE NOTES This note details several convertible notes, including one with Purple in default, and the Yorkville Convertible Notes with associated derivative liability - A $1,500,000 convertible note with Purple, bearing 5% interest and convertible at $5 per share, had an outstanding balance of $218,750 at December 31, 2024, and was in default[422] - An unsecured convertible note of $150,000 (5% interest) from December 2023 was fully converted into common stock in April 2024[423] - An unsecured note of $500,000 (10% interest) with a related party from April 2024 was fully converted to equity in connection with the Series A Preferred Stock offering in June 2024[424] - The YA Note-1 ($1,500,000 principal) from January 2024 was replaced by a new Convertible Note of $1,304,758 from Yorkville in November 2024 as part of a Standby Equity Purchase Agreement (SEPA)[425][426] - The SEPA is accounted for as a derivative liability, with an initial value of $501,824 and a fair value of $1,041,484 as of December 31, 2024, resulting in a $539,660 loss on change in fair value[428][430] Derivative Liability Fair Value Measurement (Level 3) | Description | Level | December 31, 2024 | | :--- | :--- | :--- | | Derivative liability | 3 | $1,041,484 | | Total | | $1,041,484 | Quantitative Information for Level 3 Fair Value Measurements (Derivative Liability) | Input | November 1, 2024 (inception) | December 31, 2024 | | :--- | :--- | :--- | | Risk-free interest rate | 4.28% | 4.16% | | Expected volatility | 86.10% | 114.61% | | Conversion price | $3.77 | $3.71 | | Stock price | $3.96 | $5.50 | NOTE 6 – SBA LOAN PAYABLE The company has an SBA Economic Injury Disaster Loan (EIDL) of $150,000, received in July 2020, with payments beginning in January 2023 - The company received a $150,000 SBA EIDL loan in July 2020, with a 3.75% annual interest rate and a 30-year repayment term[431] - The outstanding balance of the SBA loan was $150,000 as of December 31, 2024, and December 31, 2023[431] NOTE 7 – DERIVATIVE LIABILITY WARRANTS This note details the accounting for Public Warrants and Private Placement Warrants as derivative liabilities, measured at fair value - As of December 31, 2024, and 2023, there were 375,000 Public Warrants (exercisable for 187,500 common shares at $230.00/share) and 187,500 Private Placement Warrants (exercisable for 187,500 common shares at $230.00/share) outstanding, adjusted for a 20-1 reverse stock split[432] - The warrants are classified as liabilities under ASC 815-40 because they do not meet the criteria for equity treatment, and their fair value is re-measured at each reporting period[436][437] Derivative Liability Warrants Fair Value | Description | Level | December 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | :--- | | Warrant Liability – Public Warrants | 1 | $165,000 | $232,500 | | Warrant Liability – Private Placement Warrants | 3 | $194,250 | $324,750 | | Total | | $359,250 | $557,250 | - The fair value of warrant liabilities decreased by $198,000 from $557,250 in 2023 to $359,250 in 2024[439] NOTE 8 – CAPITAL STRUCTURE This note details the company's capital structure, including authorized and outstanding common and preferred stock, stock options, warrants, and the Yorkville SEPA - The company's authorized capital stock consists of 150,000,000 shares of common stock ($0.0001 par value) and 10,000,000 shares of preferred stock ($0.0001 par value)[440] - As of December 31, 2024, there were 2,116,191 shares of common stock outstanding, and 1,766,552 shares outstanding as of December 31, 2023, all adjusted for the 20-1 reverse stock split[441] - In June 2023, a public offering generated approximately $3.0 million net proceeds from issuing common stock, pre-funded warrants, and Series A & B Warrants[443] - In October 2023, a private placement generated approximately $1.8 million net proceeds from issuing common stock, pre-funded warrants, and Series A & B Warrants[444] - The company completed a Series A preferred stock offering in 2024, raising $4.3 million in June, $1.3 million in July, $225,000 in September, and $695,000 in December, totaling $6.52 million by year-end 2024[448][449][82] - The Series A Preferred Stock is convertible into common stock at the holder's option (initial conversion price $0.40/share) and automatically converts upon a fundraising transaction of at least $20 million[450] - The Standby Equity Purchase Agreement (SEPA) with Yorkville, entered into November 1, 2024, grants the company the right to sell up to $20,000,000 of common stock and includes a $1,304,758 convertible promissory note[469] Stock Option Activity Summary | Metric | Outstanding at Dec 31, 2022 | Granted | Forfeited | Exercised | Outstanding at Dec 31, 2023 | Granted | Forfeited | Exercised | Outstanding at Dec 31, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Shares Underlying Options | – | 87,875 | – | – | 87,875 | 196,750 | (5,000) | – | 279,625 | | Weighted Average Exercise Price | $0 | $40.20 | $0 | $0 | $40.20 | $8.85 | $200.00 | $0 | $15.29 | | Weighted Average Contractual Life (Years) | – | 8.78 | – | – | 7.97 | 10.00 | – | – | 8.74 | - Stock-based compensation expense was $1,104,978 in 2024 and $477,503 in 2023, with $1,321,013 of unamortized expense remaining as of December 31, 2024[458] NOTE 9 – NON-CONTROLLING INTEREST This note explains the recognition of non-controlling interests due to the consolidation of newly formed subsidiaries, SNAP Biosciences, Inc. and GEAR Therapeutics, Inc. - Non-controlling interest of $682,062 was recorded at December 31, 2024, due to the consolidation of SNAP Biosciences, Inc. and GEAR Therapeutics, Inc., in which Series A Investors hold a 9.78% non-voting equity ownership[476] - The company contributed co-development options to GEAR Therapeutics, Inc. and the exclusive license and corporate research agreements with the University of Pittsburgh to SNAP Biosciences, Inc[476] NOTE 10 – INVESTMENTS This note details the company's $5.7 million investments in privately held companies as of December 31, 2024, carried at initial cost basis - On August 12, 2024, the company satisfied $5.7 million of subscription receivables and related interest receivable by receiving shares of common stock in two privately held companies[477] - These investments are carried at their initial cost basis of $1.00 per share on the consolidated balance sheets, with no impairment recorded as of December 31, 2024[477] NOTE 11 – COMMITMENTS AND CONTINGENCIES This note outlines the company's commitments and contingencies, including an operating lease, legal matters, and intellectual property licenses - The company leases office space under an operating lease extended through May 31, 2026, with future minimum rental payments totaling $65,402[478][480] - The company is not currently a defendant in any litigation that could materially affect its financial statements[480] - An exclusive license agreement with the University of Pittsburgh for SNAP-CAR technology involves an initial fee, annual maintenance fees, developmental milestone payments, and 3.5% royalties on net sales[481] - In August 2023, the company entered an exclusive licensing arrangement with Deverra Therapeutics Inc. for a stem cell expansion platform, paying approximately $570,000 in cash and issuing 200,000 shares of common stock[483][484] - The company entered into one-year Master Services Agreements with five customers for the NexGenAI Affiliates Network platform, with a total contract value of approximately $1.6 million expected to be recognized as revenue in 2025[489] NOTE 12 - 401(k) PROFIT-SHARING PLAN The company sponsors a 401(k) profit-sharing plan for eligible employees, with no employer contributions made in 2024 or 2023 - The company sponsors a 401(k) profit-sharing plan for eligible employees, with no employer contributions made in 2024 or 2023[490] NOTE 13 – INCOME TAXES This note details the company's income tax provisions, deferred tax assets, and net operating loss carryforwards, fully offset by a valuation allowance - The company had approximately $86,200,000 of unused net operating loss carryforwards at December 31, 2024, which are fully offset by a valuation allowance[493] Income Tax Benefit Reconciliation | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Income tax benefit at statutory rate | $2,455,499 | $4,357,970 | | Change in valuation allowance | $(2,455,499) | $(4,357,970) | | Total Income Tax Provision (Benefit) | $0 | $0 | Deferred Tax Assets and Valuation Allowance | Category | 2024 | 2023 | | :--- | :--- | :--- | | Net operating loss carryforwards | $24,971,010 | $22,473,712 | | Section 174 R&D | $1,275,054 | $1,799,825 | | PPE and intangible assets | $915,327 | $416,708 | | State taxes | $(1,569,922) | $(1,554,275) | | Subtotal | $25,591,469 | $23,135,970 | | Valuation Allowance | $(25,591,469) | $(23,135,970) | | Net deferred tax assets (liabilities) | $0 | $0 | NOTE 14 – NOTE RECEIVABLE This note describes a Senior Secured Note agreement with Deverra for up to $572,000, which was fully paid in September 2023 - A Senior Secured Note agreement with Deverra for up to $572,000, bearing 3% interest, was entered into in July 2023[494] - The full amount of $567,609 principal and $2,892 interest was applied against the cash portion of a business transaction with Deverra in September 2023, and the note is considered paid in full[496] NOTE 15 – RELATED PARTY TRANSACTIONS This note details related party transactions, including a September 2023 common stock issuance to AG Bio Life Capital I LP and investments in privately held companies - In September 2023, the company issued 600,000 shares of common stock to AG Bio Life Capital I LP (a related party) for $600,000, consisting of cash and a promissory note[497] - The AG Note was fully paid in August 2024 through the assignment of $522,667 in shares of common stock in a privately held company[497] - The company's Chief Executive Officer and Chief Financial Officer hold ownership interests in certain privately held companies where the company also has investments, with a carrying value of $5,691,084 as of December 31, 2024[498][499] NOTE 16 – INTANGIBLE ASSETS This note describes the acquisition of NexGenAI Affiliates Network Platform assets on December 19, 2024, for $541,875, recorded as intangible assets - On December 19, 2024, the company acquired the assets of NexGenAI Affiliates Network Platform, including AI-powered marketing software and robotic process automation capabilities[500] - The acquisition consideration was 187,500 shares of common stock, valued at $541,875, recorded as intangible assets on the consolidated balance sheet[500][501] NOTE 17 – SEGMENT REPORTING Effective 2024, the company began operating in two non-revenue generating segments: Biotechnology and Technology - Effective 2024, the company began operating in two segments: Biotechnology and Technology, a change from prior periods where no operating segments were reported[502] - Both segments are currently non-revenue generating and incur expenses for product development (Biotechnology) and technology acquisition (Technology)[503] Segment Information as of December 31, 2024 | Metric | Biotechnology Segment | Technology Segment | Consolidated | | :--- | :--- | :--- | :--- | | Sales | $0 | $0 | $0 | | Total operating expenses | $10,054,488 | $0 | $10,054,488 | | Net loss from operations | $(10,054,488) | $0 | $(10,054,488) | | Total assets | $8,366,785 | $541,875 | $8,908,660 | NOTE 18 – SUBSEQUENT EVENTS This note discloses significant events after December 31, 2024, including convertible note conversions, a new note, preferred stock offering closure, and licensing agreements - On January 2, 2025, Yorkville converted $219,758 of a convertible note's principal balance into 81,877 shares of common stock[507] - On January 16, 2025, the company entered into a new $1,100,000 convertible promissory note with Yorkville, bearing 8% annual interest and maturing on December 31, 2025[508] - On February 6, 2025, the company successfully closed the remaining $5.7 million of its Series A preferred stock offering, completing the total $10.0 million financing round[511] - On March 3, 2025, the company licensed exclusive worldwide development and commercialization rights to the GEAR™ Cell Therapy Platform from Vy-Gen-Bio, Inc., committing to a $400,000 license fee by August 1, 2025, plus future milestone and royalty payments[512] - On March 5, 2025, the company entered a one-year agreement to provide access to the NexGenAI Affiliates Network platform, receiving 2,857,143 shares of the customer's publicly traded stock, valued at $600,000, as an investment[513]