180 Life Sciences (US:ATNF)2025-03-31 20:15PART I Business 180 Life Sciences Corp. pivoted from biotechnology to focus on the iGaming industry, acquiring a blockchain casino platform in September 2024 - The company shifted its primary focus from biotechnology to an online blockchain casino after acquiring a back-end platform from Elray Resources, Inc. in September 20242526 - The go-forward strategy involves launching a B2C online casino, with potential expansion into B2B and industry consolidation346880 - The company seeks to monetize legacy biotechnology programs, including fibrosis & anti-TNF and synthetic CBD analogues (SCAs) platforms888994 - The license agreement with Stanford University for the α7nAChR platform was terminated in November 20248688109 Projected iGaming Commercialization Costs | Cost Category | Estimated Amount (USD) | | :--- | :--- | | Front-End Player Interface | Starts at ~$100,000 | | Game Provider Partnerships | $10,000 - $100,000+ per game | | Game Acquisition (Sufficient Portfolio) | ~$500,000 | | First-Year Marketing Budget | $1 - $2 million | | Licensing Fees | $50,000 - $200,000+ per jurisdiction | | Legal & Regulatory Consultants | $20,000 - $100,000 annually | | Senior Staff Salaries | $250,000 - $300,000 annually per executive | | Total Initial Commercialization Cost | $3 million to >$5 million | Risk Factors The company faces substantial risks, including financial viability, iGaming operating history, cryptocurrency volatility, and internal control weaknesses - The company's current cash balance is only sufficient to fund operations until approximately December 2025, which raises substantial doubt about its ability to continue as a going concern255260 - The company has no operating history in the highly competitive and regulated online gaming industry, presenting significant business and execution risks279280 - Plans to allow players to use cryptocurrencies like Bitcoin and Ethereum expose the company to significant legal, commercial, regulatory, and technical uncertainties, including price volatility and potential security breaches309310327 - Elray Resources, Inc. beneficially owns 25.4% of the company's voting stock, with the potential to own 52.8% upon warrant exercise, giving it significant influence over corporate matters411 - The company has identified material weaknesses in its disclosure controls and internal control over financial reporting, which could result in material misstatements in financial statements380382 - The company may be unable to successfully monetize its existing life science assets (SCA and ATNF platforms) following its strategic shift to iGaming359 Unresolved Staff Comments The company reports no unresolved staff comments from the SEC - None487 Cybersecurity The company engages cybersecurity consultants, with CFO oversight and Board updates, reporting no material incidents as of year-end 2024 - The company has engaged specialized consultants to assess and manage cybersecurity threats, resulting in enhancements to security processes and controls488489 - The CFO is responsible for overseeing cybersecurity risks, and the Board receives periodic updates on the matter492 - As of December 31, 2024, there have been no cybersecurity incidents that have materially affected the company493 Properties The company's headquarters are in leased office space in Palo Alto, California, deemed suitable for current business needs - The company's principal executive offices are located at 3000 El Camino Real, Bldg. 4, Suite 200, Palo Alto, CA 94306494 Legal Proceedings The company is involved in legal proceedings detailed in Note 10, with management not expecting a material adverse effect, despite inherent litigation uncertainty - Details of current litigation are incorporated by reference from "Note 10 – Commitments and Contingencies" in the financial statements496 - Management believes the resolution of pending matters will not have a material adverse effect, but the outcome of litigation is inherently uncertain496497 Mine Safety Disclosures This item is not applicable to the company - Not applicable498 PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock and warrants trade on Nasdaq, with 3,837,780 shares outstanding as of March 31, 2025, and no plans for future cash dividends - Common stock and warrants trade on the Nasdaq Capital Market under symbols "ATNF" and "ATNFW"501 - As of March 31, 2025, there were 3,837,780 common shares outstanding502 - The company has never paid cash dividends and does not plan to in the foreseeable future503 Reserved This item is reserved Management's Discussion and Analysis of Financial Condition and Results of Operations The company reported a $6.2 million net loss in 2024, with cash only until December 2025 raising substantial doubt about its going concern ability Consolidated Results of Operations (FY 2024 vs. FY 2023) | Metric | FY 2024 (USD) | FY 2023 (USD) | Change (%) | | :--- | :--- | :--- | :--- | | Total Operating Expenses | 6,324,729 | 13,477,500 | (53.1)% | | Research and development | 1,969,267 | 2,784,528 | (29.3)% | | General and administrative | 4,355,462 | 10,692,972 | (59.3)% | | Loss From Operations | (6,324,729) | (13,477,500) | (53.1)% | | Net Loss | (6,168,177) | (19,935,112) | (69.1)% | | Net Loss available to Common Stockholders | (14,179,687) | (19,935,112) | (28.9)% | - The company's ability to continue as a going concern is in doubt, with cash on hand as of March 24, 2025, of approximately $3.8 million, expected to fund operations only until December 2025508511546 - General and administrative expenses decreased by $6.3 million (59%) in 2024, primarily due to reduced legal fees, professional fees, salaries from lower headcount, and stock-based compensation534 - Cash provided by financing activities was $4.0 million in 2024, mainly from warrant exercises and a stock offering, compared to $5.9 million in 2023542 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the primary market risk is interest rate sensitivity on cash and equivalents, with a 100 basis point change not expected to be material - The company is a "smaller reporting company" and is not required to provide the full information for this item569 - The primary market risk is interest rate sensitivity for its $4.6 million in cash and cash equivalents, with an immediate 1% change in interest rates not expected to have a material effect570 Financial Statements and Supplemental Data The company's consolidated financial statements and supplemental data are included in the report starting on page F-1 - The required financial statements are included in the report, indexed on page F-1571 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None572 Controls and Procedures Management concluded disclosure controls were ineffective as of December 31, 2024, due to a material weakness in accounting for bonus accrual reversals - Management concluded that disclosure controls and procedures were not effective as of December 31, 2024573580 - A material weakness was identified related to ineffective controls over financial reporting, specifically concerning the incorrect accounting for reversals of year-end bonus accruals for a discontinued R&D project382 Other Information On March 27, 2025, Elray Resources, Inc. converted 1,000,000 Series B Preferred Stock into 1,318,000 common shares, resulting in 5,185,780 total common shares outstanding - On March 27, 2025, Elray Resources, Inc. converted all 1,000,000 shares of Series B Convertible Preferred Stock into 1,318,000 shares of common stock583 - Post-conversion, the total number of common shares outstanding is 5,185,780584 Disclosure Regarding Foreign Jurisdictions That Prevent Inspections This item is not applicable to the company - None585 PART III Directors, Executive Officers and Corporate Governance Information for this item is incorporated by reference from the company's 2025 definitive proxy statement - Information is incorporated by reference from the 2025 Proxy Statement588 Executive Compensation Information for this item is incorporated by reference from the company's 2025 definitive proxy statement - Information is incorporated by reference from the 2025 Proxy Statement589 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information for this item is incorporated by reference from the company's 2025 definitive proxy statement - Information is incorporated by reference from the 2025 Proxy Statement590 Certain Relationships and Related Transactions, and Director Independence Information for this item is incorporated by reference from the company's 2025 definitive proxy statement - Information is incorporated by reference from the 2025 Proxy Statement591 Principal Accountant Fees and Services M&K CPAS, PLLC is the independent auditor for FY2024, with fee information incorporated by reference from the 2025 Proxy Statement - The independent public accounting firm for FY2024 is M&K CPAS, PLLC, while the firm for FY2023 was Marcum, LLP592 - Information on fees and services is incorporated by reference from the 2025 Proxy Statement593 PART IV Exhibits, Financial Statements and Schedules This section provides the index to consolidated financial statements starting on page F-1 and a list of all filed or incorporated exhibits - This section includes the index to the Consolidated Financial Statements and the Exhibit Index595598 Form 10–K Summary The company has not provided a summary for its Form 10-K - None608 Consolidated Financial Statements Financial Statements Consolidated financial statements show a $6.2 million net loss in 2024, $12.8 million total assets, and $9.3 million stockholders' equity as of December 31, 2024 Key Balance Sheet Data (as of Dec 31) | Metric | 2024 (USD) | 2023 (USD) | | :--- | :--- | :--- | | Total Assets | 12,763,412 | 5,259,476 | | Cash | 4,585,141 | 1,975,799 | | Intangible assets, net | 7,622,041 | 1,619,570 | | Total Liabilities | 3,511,501 | 5,387,209 | | Total Stockholders' Equity (Deficit) | 9,251,911 | (127,733) | Key Operations Data (for the year ended Dec 31) | Metric | 2024 (USD) | 2023 (USD) | | :--- | :--- | :--- | | Loss From Operations | (6,324,729) | (13,477,500) | | Net Loss | (6,168,177) | (19,935,112) | | Net Loss per Share (Basic & Diluted) | (15.49) | (52.59) | Key Cash Flow Data (for the year ended Dec 31) | Metric | 2024 (USD) | 2023 (USD) | | :--- | :--- | :--- | | Net Cash Used In Operating Activities | (1,480,567) | (10,922,223) | | Net cash provided by financing activities | 4,037,715 | 5,907,887 | | Cash - End of Period | 4,585,141 | 1,975,799 | Notes to Consolidated Financial Statements The notes detail the company's iGaming strategic shift, significant going concern uncertainty, impairment of legacy biotech assets, financing activities, and legal dispute settlements - Going Concern: The financial statements were prepared assuming the company will continue as a going concern, but management notes that significant losses and a working capital deficit raise substantial doubt about this ability, with continuation dependent on obtaining new financing658659 - Intangible Assets: In September 2024, the company acquired source code and intellectual property for an online casino, valued at $7.6 million, while concurrently recognizing a $1.5 million impairment loss on its legacy licensed patents and technology in 2024, following a $9.1 million impairment of IP R&D assets in 2023668701703 - Legal Proceedings: The company settled a major legal action with its former CEO, Dr. Marlene Krauss, in February 2025, involving a cash payment and issuance of 200,000 restricted shares, and also settled actions with Tyche Capital and the Bauers in June 2024731736744 - Financing Activities: The company conducted several financing activities, including a warrant inducement in October 2024 that raised $3.3 million gross and a registered direct offering in December 2024 that raised $2.9 million gross554561819 - Subsequent Events: On March 27, 2025, all 1,000,000 shares of Series B Preferred Stock were converted into 1,318,000 shares of common stock909