What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-02-11 compared with 2024-11-13 · 325 added, 263 removed, 548 unchanged (52% of the section changed)

1 unchanged sentence

Condensed Balance Sheets

September 30,

CURRENT ASSETS:

2 unchanged sentences

Total current assets

Operating lease right-of-use assets, net

Operating lease right-of-use asset, net

Intangible assets, net

2 unchanged sentences

Accounts payable and accrued expenses

Current portion of operating lease liabilities

Current portion of note payable, net of financing cost, unearned premium and discount of $ 820,242 at September 30, 2024 and $ 701,210 at June 30, 2024

Current portion of operating lease liability

Current portion of notes payable, net of financing cost, unearned premium and discount of $ 701,210 at June 30, 2024

Warrant liability

Total current liabilities

Operating lease liabilities, net of current portion

Operating lease liability, net of current portion

TOTAL LIABILITIES

6 unchanged sentences

Common stock, $ 0.0001 par value;

800,000,000 shares authorized at September 30, 2024 and June 30, 2024, respectively;

7,982,986 shares issued of which 7,956,660 shares are outstanding at September 30, 2024;

800,000,000 shares authorized at December 31, 2024 and June 30, 2024;

18,478,307 shares issued of which 18,451,981 shares are outstanding at December 31, 2024;

and 6,216,398 shares issued of which 6,190,072 shares outstanding at June 30, 2024

10 unchanged sentences

Three Months Ended

September 30, 2024

September 30, 2023

Six Months Ended

December 31, 2024

December 31, 2023

December 31, 2024

December 31, 2023

OPERATING EXPENSES:

6 unchanged sentences

( 8,781,408 )

( 11,414,910 )

( 19,657,229 )

OTHER EXPENSE (INCOME):

Change in fair value of derivative liabilities

( 1,690,336 )

Interest expense

Interest income

TOTAL OTHER EXPENSE (INCOME), NET

TOTAL OTHER INCOME, NET

$ ( 7,112,529 )

$ ( 8,401,445 )

$ ( 11,264,561 )

$ ( 19,111,909 )

Deemed dividend related to ratchet adjustment to warrants

2 unchanged sentences

$ ( 8,401,445 )

$ ( 11,634,026 )

$ ( 19,111,909 )

NET LOSS PER COMMON SHARE

3 unchanged sentences

$ ( 8,401,445 )

$ ( 11,634,026 )

$ ( 19,111,909 )

Other comprehensive loss

Unrealized gain on available-for-sale investments

Reclassification of unrealized gains on available-for-sale investments upon settlement

3 unchanged sentences

$ ( 8,401,445 )

$ ( 11,634,026 )

$ ( 19,288,500 )

See accompanying notes to unaudited condensed financial

Condensed Statements of Changes in Stockholders’

Additional Paid in

Treasury Stock

Other Comprehensive

Total Stockholders'

Comprehensive

Stockholders'

Balance, June 30, 2023

10 unchanged sentences

( 311,936,169 )

Stock-based compensation - stock options

Stock-based compensation - restricted stock units

Proceeds from issuance of common stock, net of costs of $258,254

Issuance of common stock from vesting of - restricted stock units

( 8,401,445 )

Balance, June 30, 2024

( 8,401,445 )

Balance, December 31, 2023

$ 327,824,910

$ ( 320,337,614 )

Balance, June 30, 2024

$ ( 334,232,661 )

Stock-based compensation - stock options

9 unchanged sentences

( 338,709,734 )

Stock-based compensation - stock options

Stock-based compensation - restricted stock units

Issuance of common stock from vesting of - restricted stock units

Exercise of warrants

Cashless exercise of warrants

Proceeds from issuance of common stock, net of costs of $2,492,880

Deemed dividend for ratchet adjustment to warrants

( 7,112,529 )

Balance, December 31, 2024

$ 369,781,837

$ ( 345,866,687 )

See accompanying notes to unaudited condensed financial

Condensed Statements of Cash Flows

Three Months Ended

September 30, 2024

September 30, 2023

Six Months Ended

December 31, 2024

December 31, 2023

CASH FLOWS FROM OPERATING ACTIVITIES:

12 unchanged sentences

Change in fair value of derivative liabilities

( 1,690,336 )

Changes in operating assets and liabilities:

Prepaid and other current assets

( 1,446,761 )

Accounts payable and accrued expenses

( 2,204,411 )

Operating lease liabilities

4 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from (purchases of) U.S.

Proceeds from U.S.

Treasury Bills (available-for-sale)

Net cash provided by (used in) investing activities

Net cash provided by investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Net proceeds from issuance of common stock

Proceeds from exercise of warrants

Payment of loan premium

Payments of note payable

1 unchanged sentence

( 5,000,000 )

Net cash used in financing activities

Net cash provided by financing activities

Net change in cash and cash equivalents

( 3,820,393 )

Cash and cash equivalents, beginning of period

8 unchanged sentences

Notes to Condensed Financial Statements

For the Three Months Ended September 30, 2024 and

For the Three and Six Months Ended December 31,

2024 and 2023

Background Information

5 unchanged sentences

(“NeurMedix”) a privately held clinical-stage pharmaceutical company and a related party in June 2021 .

acquired assets included NE3107.

NE3107 is an investigational, novel, orally administered small molecule that is thought to inhibit inflammation-driven

insulin resistance and major pathological inflammatory cascades with a novel mechanism of action.

There is emerging scientific consensus

that both inflammation and insulin resistance may play fundamental roles in the development of Alzheimer’s disease (“AD”)

and Parkinson’s disease (“PD”), and NE3107 could, if approved by the U.S.

Food and Drug Administration (“FDA”),

represent an entirely new medical approach to treating these devastating conditions affecting an estimated 6 million Americans suffering

from AD and 1 million Americans suffering from PD.

acquired assets included NE3107 or (“Bezisterim”).

Bezisterim, the approved generic name for NE3107 is an investigational,

novel, orally administered small molecule that is thought to inhibit inflammation-driven insulin resistance and major pathological inflammatory

cascades with a novel mechanism of action.

There is emerging scientific consensus that both inflammation and insulin resistance may play

fundamental roles in the development of Alzheimer’s disease (“AD”) and Parkinson’s disease (“PD”),

and Beizisterim could, if approved by the U.S.

Food and Drug Administration (“FDA”), represent an entirely new medical approach

to treating these devastating conditions affecting an estimated 6 million Americans suffering from AD and 1 million Americans suffering

Neurodengenerative Disease Program

49 unchanged sentences

Both objectives were met.

To extend this Phase 2 data in progressed patients,

the Company has designed a new Phase 2 study of bezisterim (NE3107) as a potential first line therapy to treat patients with new onset

In July 2024, the Company submitted the new protocol and received a response from the FDA which permitted the Company to proceed with

The trial is anticipated to commence during the first calendar quarter of 2025.

Long COVID Program

In April 2024, the Company announced the grant of

a clinical trial award of up to $13.1 million from the U.S.

Department of Defense (“DOD”), awarded through the Peer Reviewed

Medical Research Program of the Congressionally Directed Medical Research Programs.

In April 2024, the Company announced the grant of a clinical trial

award of up to $13.1 million from the U.S.

Department of Defense (“DOD”), awarded through the Peer Reviewed Medical Research

Program of the Congressionally Directed Medical Research Programs.

In August 2024, U.S.

Army Medical Research and Development

Command, Office of Human Research Oversight (“OHRO”) approved the Company’s plan to evaluate bezisterim (NE3107) for

the treatment of neurological symptoms that are associated with long COVID.

Army Medical Research and Development Command,

Office of Human Research Oversight (“OHRO”) approved the Company’s plan to evaluate bezisterim (NE3107) for the treatment

of neurological symptoms that are associated with long COVID.

and the FDA authorized our Investigational New Drug (“IND”)

application for bezisterim (NE3107) allowing us to study a novel, anti-inflammatory approach or the treatment of the debilitating neurocognitive

symptoms associated with long covid.

The Company anticipates the trial to commence by early 2025.

The Company has been reimbursed approximately

$325,000 for the trial during the three months ended September 30, 2024.

application for bezisterim (NE3107) allowing the Company to study a novel, anti-inflammatory approach or the treatment of the debilitating

neurocognitive symptoms associated with long covid.

The Company anticipates the trial to commence by first calendar quarter of 2025.

Company was reimbursed approximately $325,000 for trial costs during the six months ended December 31, 2024.

Subsequent to December 31,

2024, additional reimbursements of approximately $2.6 million were received for trial costs incurred through December 31, 2024.

Liver Disease Program

33 unchanged sentences

the results of

clinical testing and trial activities of the Company’s products, the Company’s ability to obtain regulatory approval to market

clinical testing and trial activities of the Company’s products;

the Company’s ability to obtain regulatory approval to market

its products;

5 unchanged sentences

continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of

As of September 30, 2024, the Company had working capital of approximately $ 13.3 million, cash and cash equivalents of approximately

$ 20.0 million, stockholders’ equity of approximately $ 14.1 million, and an accumulated deficit of approximately $ 338.7 million.

As of December 31, 2024, the Company had working capital of approximately $ 23.2 million, cash and cash equivalents totaling

approximately $ 24.4 million, stockholders’ equity of approximately $ 23.9 million, and an accumulated deficit of approximately $ 345.9

The Company is in the pre-revenue stage and no revenues are expected in the foreseeable future.

47 unchanged sentences

accompanying condensed statements of operations and comprehensive loss from the settlement of available-for-sale investments during the

three months ended September 30, 2023.

six months ended December 31, 2023.

The Company had no outstanding investment securities with original maturities of greater than three

months at the time of purchase as of and during the three months ended September 30, 2024.

months at the time of purchase as of and during the three and six months ended December 31, 2024.

Concentration of Credit Risk in the Financial Service

As of September 30, 2024, the Company had cash deposited

As of December 31, 2024, the Company had cash deposited

in certain financial institutions in excess of federally insured levels.

26 unchanged sentences

The Company’s financial instruments include

cash, accounts payable, the carrying value of the operating lease liabilities and notes payable.

The carrying amounts of cash and accounts

payable approximate their fair value, due to the short-term nature of these items.

The carrying amounts of notes payable and operating

lease liabilities approximate their fair values since they bear interest at rates which approximate market rates for similar debt instruments.

cash and cash equivalents, accounts payable and the carrying value of the operating lease liabilities and notes payable.

amounts of cash and accounts payable approximate their fair value, due to the short-term nature of these items.

The carrying amounts of

notes payable and operating lease liabilities approximate their fair values since they bear interest at rates which approximate market

rates for similar debt instruments.

Net Loss per Common Share

4 unchanged sentences

that could occur from common shares issuable through stock options, warrants, and convertible debentures.

For the three months ending

September 30, 2024 and 2023, such amounts were excluded from the diluted loss since their effect was considered anti-dilutive due to the

net loss for the periods presented.

The weighted average number of common shares outstanding

at September 30, 2024 of 6,398,360 includes the weighted average effect of the pre-funded warrants issued in connection with the September

2024 Offering, the exercise of which requires nominal consideration for the delivery of the shares of common stock (see Note 8).

The table below shows the potential shares of common

stock, presented based on amounts outstanding at each year end, which were excluded from the computation of diluted net loss per share

attributable to common stockholders because including them would have had an anti-dilutive effect:

For the three and six months

ending December 31, 2024 and 2023, such amounts were excluded from the diluted loss since their effect was considered anti-dilutive due

to the net loss for the periods presented.

The table below shows the potential shares of common stock, presented

based on amounts outstanding at each period end, which were excluded from the computation of diluted net loss per share attributable to

common stockholders because including them would have had an anti-dilutive effect:

Schedule of dilutive securities were excluded from the computation of diluted loss per share

September 30, 2024

September 30, 2023

December 31, 2024

December 31, 2023

Number of Shares

5 unchanged sentences

The company effected a 1:10 reverse split of the issued

and outstanding shares of its Class A commons stock which was approved by the board of directors after the approval obtained from shareholders

and outstanding shares of its Class A common stock which was approved by the board of directors after the approval obtained from shareholders

at a special meeting on July 29, 2024 which became effective on Nasdaq on August 6, 2024, 5 trading days after the shareholders’

2 unchanged sentences

Grant program

The Company records

expenses related to the DOD long Covid Program as such expenses are incurred.

The reimbursement of such expenses is recognized upon receipt

of the reimbursement as a credit against the respective expense account.

Recent Accounting

Pronouncements

In November 2024, the

FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (“DISE”), which will require additional disclosure of

the nature of expenses included in the income statement in response to longstanding requests from investors for more information about

an entity’s expenses.

The new standard requires disclosures about specific types of expenses included in the expense captions presented

on the face of the income statement as well as disclosures about selling expenses.

The new standard will be effective for public companies

for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

The requirements

will be applied prospectively with the option for retrospective application.

The Company records expenses related to the DOD Long

Covid Program as such expenses are incurred.

The reimbursement of such expenses is recognized upon receipt of the reimbursement as a credit

against the respective expense account.

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Disaggregation

of Income Statement Expenses (“DISE”), which will require additional disclosure of the nature of expenses included in the

income statement in response to longstanding requests from investors for more information about an entity’s expenses.

The new standard

requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as

well as disclosures about selling expenses.

The new standard will be effective for public companies for fiscal years beginning after December

15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

The requirements will be applied prospectively with

the option for retrospective application.

Early adoption is permitted.

The Company is currently evaluating

the impact of this accounting standard update on its financial statements.

The Company is currently evaluating the impact of this accounting

standard update on its financial statements.

Intangible Assets

4 unchanged sentences

Schedule of intangible assets

September 30, 2024

December 31, 2024

June 30, 2024

5 unchanged sentences

Amortization expense was $ 57,344 in each of the three-month

periods ended September 30, 2024 and 2023.

periods ended December 31, 2024 and 2023.

Amortization expense was $ 114,688 in each of the six-month periods ended December 31, 2024 and

The Company amortizes intellectual property over the expected original useful lives of 10 years.

10 unchanged sentences

The down round feature reduced the exercise

price of the PIPE Warrant Shares to $10.00 per share on March 6, 2024 and again to $1.53 per share on September 25, 2024 in connection

with the offering further described in Note 8 as the Company sold stock at a price lower than its initial exercise price.

calculated the difference in fair value of the PIPE Warrant Shares between the stated exercise price and the reduced exercise price and

recorded $ 325,041 as a deemed dividend in the accompanying condesnsed statement of changes in stockholders’ equity.

The fair value

of the PIPE Warrant Shares were estimated using the Black Scholes Method with the following inputs, the stock price of $ 1.20 , exercise

price of $ 1.53 and $ 10.00 , remaining term of 2.9 years, risk free rate of 3.5 % and volatility of 93.0 % .

price of the PIPE Warrant Shares to $10.00 per share on March 6, 2024, $1.53 per share on September 25, 2024 and again to $1.37 on October

22, 2024 in connection with the offerings further described in Note 8, as the Company sold stock at a price lower than its initial exercise

For the three months ended September 30, 2024, the

Company calculated the difference in fair value of the PIPE Warrant Shares between the stated exercise price and the reduced exercise

price and recorded $ 325,041 as a deemed dividend in the accompanying condensed statement of changes in stockholders’ equity.

fair value of the PIPE Warrant Shares were estimated using the Black Scholes Method with the following inputs, the stock price of $ 1.20 ,

exercise price of $ 1.53 and $ 10.00 , remaining term of 2.9 years, risk free rate of 3.5 % and volatility of 93.0 % .

For the three months ended December 31, 2024, the

Company calculated the difference in fair value of the PIPE Warrant Shares between the stated exercise price and the reduced exercise

price and recorded $ 44,424 as a deemed dividend in the accompanying condensed statement of changes in stockholders’ equity.

fair value of the PIPE Warrant Shares were estimated using the Black Scholes Method with the following inputs, the stock price of $ 3.36 ,

exercise price of $ 1.53 and $ 1.37 , remaining term of 2.8 years, risk free rate of 3.99 % and volatility of 94.0 % .

For the six months ended December 31, 2024, the Company

recorded $ 369,465 as a deemed dividend in the accompanying condensed statement in stockholders’ equity.

Consulting expenses

the three months ended December 31, 2024, the Company paid a Director of the Company $ 50,000 for consulting services which are reflected

as a component of selling, general and administrative expenses on the accompanying condensed statement of operations and comprehensive

Notes Payable

7 unchanged sentences

On the Closing Date, $15 million of the Loan was funded (“Tranche 1”).

The Loan provided for an additional $5 million to be available to the Company on or prior to September 15, 2022, subject to the Company’s

achievement of certain milestones with respect to certain of its ongoing clinical trials, which were not achieved.

The Loan bears interest

at an annual rate equal to the greater of (a) the sum of 7.00 % plus the prime rate as reported in The Wall Street Journal and (b) 10.75%.

The prime rate on September 30, 2024, was 8.50 % .

The Loan is secured by a lien upon and security interest in all of the Company’s

assets, including intellectual property, subject to agreed exceptions.

The maturity date of the Loan is December 1, 2024.

The Loan Agreement required monthly interest-only

payments during the first eighteen months of the term of the Loan.

Following the interest-only period, on July 1, 2023, the Company pays

equal monthly payments of principal, plus accrued interest, until the Loan’s maturity date when all remaining principal and accrued

interest is due.

If the Company prepays the Loan, it will be required to pay (a) a prepayment fee in an amount equal to 3.0% of the principal

amount of the Loan that is prepaid during the interest-only period;

and (b) a prepayment fee in an amount equal to 1.0% of the principal

amount of the Loan that is prepaid after the interest-only period.

At the Loan’s maturity date, or on the date of the prepayment

of the Loan, the Company will be obligated to pay a final payment equal to 4.25% of the Loan commitment amount, the sum of Tranche 1 and

Tranche 2, which amounts to $850,000 (the “Loan Premium”).

The Loan Agreement includes a conversion option to

The Loan bore interest at an annual rate equal to the greater of (a) the sum of 7.00 % plus the prime rate as reported in The Wall Street

Journal and (b) 10.75%.

The Loan was secured by a lien upon and security interest in all of the Company’s assets, including intellectual

property, subject to agreed exceptions.

The Loan was paid in full on its maturity date of December 1, 2024 along with a final payment

equal to 4.25 % of the Loan commitment amount, or $850,000, the (“Loan Premium”).

The Loan Agreement included a conversion option to

convert up to $5.0 million of the principal amount of the Loan outstanding at the option of Avenue, into shares of the Company’s

Common Stock at a conversion price of $69.80 per share (the “Conversion Option”).

On the Closing Date, the Company issued to Avenue

On the Closing Date, the Company also issued to Avenue

warrants to purchase 36,101 shares of Common Stock of the Company (the “Avenue Warrants”) at an exercise price per share equal

1 unchanged sentence

The amount of the carrying value of the notes payable

was determined by allocating portions of the outstanding principal of the notes, approximately $ 1.4 million, to the fair value of the

Avenue Warrants, and approximately $ 2.2 million to the fair value of the embedded Conversion Option.

Accordingly, the total amount of

unearned discount of approximately $3.6 million, the total direct financing cost of approximately $ 390,000 and the Loan Premium of $ 850,000

are being amortized using the effective interest method over the term of the Loan.

The adjusted effective interest rate is 24%.

Total interest expense associated with this loan was approximately $ 252,000 , which is reflected as a component of interest expense on the accompanying

condensed statements of operations and comprehensive loss for the three months ended September 30, 2024.

Interest expense associated with

this loan was comprised of interest incurred on the outstanding principal of the loan of approximately $ 132,000 , amortization of financing

costs of approximately $ 9,500 , amortization of the unearned discount of $ 89,000 , and the accretion of the Loan Premium of approximately

Total interest expense for the three months ended

September 30, 2023 was approximately $ 1 million on the accompanying condensed statements of operations and comprehensive loss.

expense was comprised of interest incurred on the outstanding principal of the loan of approximately $ 525,000 , amortization of financing

costs of approximately $ 38,000 , amortization of the unearned discount of approximately $ 356,000 and the accretion of Loan Premium of approximately

As of September 30, 2024, the remaining principal

balance of $ 2.5 million under the Loan is payable in 3 monthly equal installments.

For the three months ended September 30, 2024, the

Company paid back $ 2.5 million of the original loan of $ 15 million.

The following is a summary of the Notes Payable as of September 30, 2024

was determined by allocating portions of the outstanding principal of the notes, resulting in approximately $ 1.4 million allocated to

the fair value of the Avenue Warrants, and approximately $ 2.2 million allocated to the fair value of the embedded Conversion Option.

the total amount of unearned discount of approximately $3.6 million, the total direct financing cost of approximately $ 390,000 and the

Loan Premium of $ 850,000 were amortized using the effective interest method over the term of the Loan.

Total interest expense associated with the Loan was

approximately $ 62,000 , which is reflected as a component of interest expense on the accompanying condensed statements of operations and

comprehensive loss for the three months ended December 31, 2024.

Interest expense associated with this loan was comprised of interest

incurred on the outstanding principal of the loan of approximately $ 33,000 , amortization of financing costs of approximately $ 2,000 , amortization

of the unearned discount of $ 22,000 , and the accretion of the Loan Premium of approximately $ 5,000 .

Total interest expense associated

with the Loan was approximately $ 312,000 , which is reflected as a component of interest expense on the accompanying condensed statements

of operations and comprehensive loss for the six months ended December 31, 2024.

Interest expense associated with this loan was comprised

of interest incurred on the outstanding principal of the loan of approximately $ 163,000 , amortization of financing costs of approximately

$ 12,000 , amortization of the unearned discount of approximately $ 111,000 , and the accretion of the Loan Premium of approximately $ 26,000 .

Total interest expense associated with the Loan for

the three months ended December 31, 2023 was approximately $ 682,000 on the accompanying condensed statements of operations and comprehensive

Interest expense was comprised of interest incurred on the outstanding principal of the loan of approximately $ 429,000 , amortization

of financing costs of approximately $ 31,000 , amortization of the unearned discount of approximately $ 289,000 and the accretion of Loan

Premium of approximately $ 67,000 .

Total interest expense associated with the Loan for the six months ended December 31, 2023 was approximately

$ 1.5 million on the accompanying condensed statements of operations and comprehensive loss.

Interest expense was comprised of interest

incurred on the outstanding principal of the loan of approximately $ 955,000 , amortization of financing costs of approximately $ 69,000 ,

amortization of the unearned discount of approximately $ 645,000 and the accretion of Loan Premium of approximately $ 149,000 .

The following is a summary of the Notes Payable as of December 31, 2024

and June 30, 2024:

Current portion of Notes Payable

Schedule of note payable

September 30, 2024

December 31, 2024

June 30, 2024

4 unchanged sentences

Current portion of Notes Payable, net of financing costs, unearned premium and discount

Estimated future amortization expense and accretion of Loan Premium are

Schedule of estimated future amortization expense and accretion of premium

Unearned Discount

Debt Financing Costs

Year ending June 30, 2025 (Remaining 9 months)

Fair Value Measurements

At September 30, 2024 and June 30, 2024, the estimated fair value of derivative

At December 31, 2024 and June 30, 2024, the estimated fair value of derivative

liabilities measured on a recurring basis are as follows:

1 unchanged sentence

Fair Value Measurements at

September 30, 2024

December 31, 2024

Derivative liability - Warrants

7 unchanged sentences

The following table presents the activity for level 3 liabilities measured

at fair value using unobservable inputs for the three months ended September 30, 2024:

at fair value using unobservable inputs for the six months ended December 31, 2024:

Fair value, liabilities measured on recurring basis

1 unchanged sentence

Derivative liability -

Conversion Option on

Convertible Debenture

Conversion Option

Balance at June 30, 2024

2 unchanged sentences

Transfer in and/or out of Level 3

Balance at September 30, 2024

Balance at December 31, 2024

The following table presents the activity for level 3 liabilities measured

at fair value using unobservable inputs for the three months ended September 30, 2023:

at fair value using unobservable inputs for the six months ended December 31, 2023:

Derivative liability -

5 unchanged sentences

Transfer in and/or out of level 3

Balance at September 30, 2023

The fair values of derivative liabilities for the

Avenue Warrants and Conversion Option at September 30, 2024, in the accompanying condensed balance sheets, were approximately $1,300 and

approximately zero, respectively.

The total change in the fair value of the derivative liabilities totaled approximately $2,500 and $708,000

for the three months ended September 30, 2024 and 2023, respectively;

and accordingly, was recorded in the accompanying condensed statements

of operations and comprehensive loss.

The assumptions used in the Black Scholes model to value the derivative liabilities at September

30, 2024 included the closing stock price of $ 1.20 per share;

for the Avenue Warrants, the exercise price of $ 58.20 , remaining term 2.2

year, risk free rate of 3.7 % and volatility of 91.0 % ;

and for the Conversion Option, the conversion price of $ 69.80 ;

remaining term of

2 months, risk free rate of 4.8 % and volatility of 75.0 % .

Balance at December 31, 2023

The fair value of the Avenue Warrants at December

31, 2024, in the accompanying condensed balance sheets, was $ 7,290 .

The total change in the fair value of the derivative liabilities totaled

approximately $ 3,519 and $ 1.7 million for the six months ended December 31, 2024 and 2023, respectively;

and accordingly, was recorded

in the accompanying condensed statements of operations and comprehensive loss.

The assumptions used in the Black Scholes model to value

the derivative liabilities at December 31, 2024 included the closing stock price of $ 2.00 per share;

for the Avenue Warrants, the exercise

price of $ 58.20 , remaining term 1.9 years, risk free rate of 4.2 % and volatility of 95.0 % .

The Conversion Option was nil as of December

31, 2024 and June 30, 2024.

Derivative liability – Avenue Warrants

1 unchanged sentence

to the Company’s own stock, and accordingly, were recorded as a derivative liability at fair value in the accompanying condensed

balance sheets at September 30, 2024 and June 30, 2024, respectively.

balance sheets at December 31, 2024 and June 30, 2024, respectively.

The Black Scholes model was used to calculate the

fair value of the derivative warrant to bifurcate the amount from the Avenue Loan amount funded.

The Avenue Warrants are recorded at their

fair values at the date of issuance and remeasured at each subsequent reporting period end date.

The Avenue Warrants are recorded at fair

value at the date of issuance and remeasured at each subsequent reporting period end date.

Embedded derivative liability – Conversion

The Conversion Option is accounted for as an embedded

The Conversion Option was accounted for as an embedded

derivative liability and required bifurcation from the Loan amount.

2 unchanged sentences

Financial assets

As of September 30, 2024, investments in U.S.

As of December 31, 2024, investments in U.S.

Bills were valued through use of quoted prices and are classified as Level 1.

3 unchanged sentences

Fair Value Measurements at

September 30, 2024

December 31, 2024

Treasury Bills due in 3 months or less at purchase

15 unchanged sentences

During the three

months ended September 30, 2024, the Company sold 2,143 shares of common stock under the Sales Agreement for total net proceeds of $ 6,400

after 3 % commissions and expenses of approximately $ 200 .

During the three months ended September 30, 2023, the Company sold 43,220 shares

of common stock under the Sales Agreement for total net proceeds of $ 1.9 million after 3 % commissions and expenses of approximately $ 119,000 .

On September 25, 2024, the Company closed a best

efforts public offering (the “September 2024 Offering”) of 1,360,800

shares of its common stock, par value $ 0.0001

per share, pre-funded warrants (the “September Pre-funded Warrants”) to purchase 600,000

shares of Common Stock, and warrants to purchase up to 1,960,800

shares of Common Stock (the “September Common Warrants”) at a combined public offering price of $ 1.53

per Share, or September Pre-funded Warrant, and the associated September Common Warrant.

265,000 September Pre-funded Warrants were

exercised in the three months ended September 30, 2024 and reflected on the condensed statement of changes in stockholders’ equity as a component of proceeds

from issuance of common stock.

The September Common Warrants have an

exercise price of $ 1.53

per share and are immediately exercisable upon issuance and will expire on the fifth anniversary date of the original issuance date.

gross proceeds to the Company from the September 2024 Offering were approximately $ 3.0

million, before deducting placement agent fees and offering expenses of approximately $747,000.

Additionally, upon closing, the

Company issued the placement agent warrants (“September Placement Agent’s Warrants”) to purchase 98,040

shares of Common Stock exercisable at a per share price of $1.91, which was equal to 125 %

of the public offering price per share.

The September Placement Agent’s Warrants are exercisable during a five-year period

commencing 180 days from September 25, 2024.

months ended December 31, 2023, the Company sold 290,090 shares of common stock under the Sales Agreement for total net proceeds of approximately

$ 7.4 million after 3 % commissions and expenses of approximately $ 258,000 .

During the six months ended December 31, 2023, the Company sold

333,310 shares of common stock under the Sales Agreement for total net proceeds of approximately $ 9.3 million after 3 % commissions and

expenses of approximately $ 377,000 .

During the six months ended December 31, 2024, the Company sold approximately 2,143 shares of its

Common Stock under its Controlled Equity Offering Sales Agreement with Cantor Fitzgerald & Co for total net proceeds of approximately

$ 6,400 after 3 % commissions and offering costs totaling approximately $ 200 .

On September 25, 2024, the Company filed a prospectus supplement

to suspend sales under the Controlled Equity Offering Sales Agreement.

On September 25, 2024, the Company closed a best efforts

public offering (the “September 2024 Offering”) of 1,360,800 shares of its common stock, par value $ 0.0001 per share, pre-funded

warrants (the “September Pre-funded Warrants”) to purchase 600,000 shares of Common Stock, and warrants to purchase up to

1,960,800 shares of Common Stock (the “September Common Warrants”) at a combined public offering price of $ 1.53 per share,

or September Pre-funded Warrant, and the associated September Common Warrant.

265,000 September Pre-funded Warrants were exercised in

the three months ended September 30, 2024 and reflected on the condensed statement of changes in stockholders’ equity as a component

of proceeds from issuance of common stock.

The September Common Warrants have an exercise price

of $ 1.53 per share and were immediately exercisable upon issuance and will expire on the fifth anniversary date of the original issuance

The gross proceeds to the Company from the September 2024 Offering were approximately $ 3.0 million, before deducting placement

agent fees and offering expenses of approximately $747,000.

Additionally, upon closing, the Company issued the placement agent warrants

(“September Placement Agent’s Warrants”) to purchase 98,040 shares of Common Stock exercisable at a per share price

of $1.91, which was equal to 125 % of the public offering price per share.

The September Placement Agent’s Warrants are exercisable

during a five-year period commencing 180 days from September 25, 2024.

In October 2024, the Company closed three registered

direct offerings totaling 8,256,000 shares of its common stock, par value $ 0.0001 per share, and two concurrent private placements of

warrants to purchase up to 7,110,000 shares of Common Stock (the “October Common Warrants”) priced at-the-market under Nasdaq

rules at prices ranging from $ 1.50 to $ 2.83 per share (the “October Offerings”) .

October Common Warrants have exercise prices ranging from $ 1.37 to $ 2.12 per share and are exercisable beginning six months following

issuance and will expire on the fifth anniversary date of the original issuance dates.

The gross proceeds to the Company from the

October Offerings totaled approximately $ 15.9 million, before deducting placement agent fees and offering expenses of approximately $ 2.5

Additionally, upon closing of the October Offerings, the Company issued placement agent warrants (the “October Placement

Agent’s Warrants”) to purchase 412,800 shares of Common Stock in the aggregate exercisable at a per share price ranging from

$ 1.88 to $ 3.54 , which was equal to 125% of the offering price per share in the applicable October Offering.

The October Placement Agent’s

Warrants are exercisable during a five-year period commencing 180 days from each of the respective closing dates of the October Offerings.

During the three months ended December 31, 2024, 1,896,300

of common warrants from the September 2024 Offering were exercised at $ 1.53 per share for proceeds totaling approximately $ 2.9 million,

and 335,000 September Pre-funded Warrants were also exercised.

In addition, 6,667 September Placement Agent’s Warrants were exercised

on a cashless exercise basis and 4,214 common shares were issued.

Issuance of common stock for services

6 unchanged sentences

The following table summarizes the activity relating to the Company’s

stock options for the three months ended September 30, 2024:

stock options for the six months ended December 31, 2024:

Schedule of summarizes the activity relating to the Company’s stock options

5 unchanged sentences

Outstanding at June 30, 2024

Options Granted

Options Expired

Outstanding at September 30, 2024

Exercisable at September 30, 2024

Options Canceled

Outstanding at December 31, 2024

Exercisable at December 31, 2024

The fair value of each option on the date of grant

is estimated using the Black-Scholes option pricing model.

The pricing model reflects the following weighted-average assumptions for the

six months ended December 31, 2024 and 2023:

Schedule of assumptions used

December 31, 2024

December 31, 2023

Expected life of options (in years)

Expected volatility

Risk free interest rate

Dividend Yield

On December 20, 2024, the Company issued to employees

and directors stock options to purchase 208,902 and 113,055 shares of common stock, respectively;

at an exercise price of $ 1.90 , the Company’s

stock price at the close on December 20, 2024.

The fair value of the stock options issued to Directors were $ 1.20 per share.

value of the stock options issued to Management was $ 1.43 per share.

The Company recorded stock-based compensation expense

relating to the vesting of stock options of approximately $ 119,000 and $ 808,000 for the three months ended September 30, 2024 and 2023,

relating to the vesting of stock options of approximately $ 385,000 and $ 620,000 for the three months ended December 31, 2024 and 2023,

respectively.

The total stock-based compensation expense from stocks options for the six months ended December 31, 2024 and 2023 was $ 504,000

and $ 1.4 million, respectively.

Restricted stock units:

On November 20, 2024, the Company issued equity awards

for the board of directors’ annual compensation.

Four directors received 18,270 RSUs with a grant date fair value of $ 30.10 per

In addition, two directors received stock options to purchase 18,325 shares of common stock at an exercise price of $ 30.10 per

share with a grant date fair value of $18.30 per share.

The equity awards vest quarterly on February 9, 2024, May 9, 2024, August 9, 2024

and earlier of November 9, 2024 or the next annual shareholders’ meeting.

During the three months ended September 30, 2024, 3,409

of these RSUs vested.

On July 25, 2024, Mr.

Gorlin resigned from the Board of Directors, and as a result, 1,159 of his RSUs were cancelled.

The following table summarizes vesting of restricted

Schedule of vesting of restricted common stock

as part of the board of directors’ annual compensation.

Two directors received 66,900 restricted stock units (“RSUs”)

with a grant date fair value of $ 3.36 per share and three directors received stock options to purchase 168,300 shares of common stock

at an exercise price of $ 3.36 per share with a grant date fair value of $2.11 per share.

The RSUs vest quarterly on February 8, 2025,

May 8, 2025, August 8, 2025 and the earlier of November 8, 2025 or the next annual shareholders’ meeting.

During the three months

ended December 31, 2024, 3,410 shares were issued related to the final tranche of RSUs that vested, from the directors’ annual equity

awards granted November 9, 2023.

Additionally, during the three months ended December

31, 2024, 397 shares were issued related to the vesting of RSUs previously awarded to a consultant.

The following table summarizes the unvested restricted

stock units outstanding at June 30, 2024 and December 31, 2024:

Schedule of unvested of restricted stock units

Number of Shares

2 unchanged sentences

Unvested at June 30, 2024

Unvested at September 30, 2024

Unvested at December 31, 2024

The total stock-based compensation expense from restricted

stock units for the three months ended September 30, 2024 and 2023 was approximately $ 301,000 and $ 381,000 , respectively.

stock units for the three months ended December 31, 2024 and 2023 was approximately $ 266,000 and $ 303,000 , respectively.

total stock-based compensation expense from restricted stock units for the six months ended December 31, 2024 and 2023 was approximately

$ 567,000 and $ 684,000 , respectively.

There were 8,080 RSUs that vested on November 23,

2024 and the related shares of common stock will be issued and delivered by March 15, 2025.

Stock Warrants

The following table summarizes the warrants activity during the three months

ended September 30, 2024:

The following table summarizes the warrants activity during the six months

ended December 31, 2024:

Summary of warrants activity

1 unchanged sentence

Weighted Average Exercise Price

Weighted Average Remaining Life (Years)

Weighted Average Remaining Life

Aggregate Intrinsic Value

Outstanding and exercisable at June 30, 2024

Outstanding and exercisable at September 30, 2024

Of the above warrants outstanding at September 30,

2024, 271 expire in the fiscal year ending June 30, 2025, 3,518 expire in the fiscal year ending June 30, 2026, 763,373 expire in the

fiscal year ending June 30, 2027, 1,155,000 expire in the fiscal year ending June 30, 2029 and 2,393,840 expire in the fiscal year ending

June 30, 2030.

As of September 30, 2024, the Company had 335,000

prefunded warrants, 3,882,962 warrants and 98,040 placement agent warrants outstanding.

( 2,502,967 )

Outstanding and exercisable at December 31, 2024

The table below shows the expiration of the warrants

outstanding as of December 31, 2024:

Schedule of warrants

Number of Warrants

Expiring June 30, 2025

Total outstanding warrants

Office Leases

9 unchanged sentences

Total operating lease expense for the three months

ended September 30, 2024 and 2023 of approximately $ 32,000 and $ 13,000 , respectively, were included in the accompanying condensed statements

of operations and comprehensive loss as a component of selling, general and administrative expenses.

ended December 31, 2024 and 2023 was approximately $ 32,000 and $ 13,000 , respectively, and for the six months ended December 31, 2024 and

2023 was approximately $ 63,000 and $ 26,000 , respectively, which is included in the accompanying condensed statements of operations and

comprehensive loss as a component of selling, general and administrative expenses.

The right-of-use asset, net and current and non-current

1 unchanged sentence

Schedule of deferred tax assets

September 30, 2024

December 31, 2024

June 30, 2024

3 unchanged sentences

Total operating lease liability

At September 30, 2024, the future estimated minimum lease payments under

At December 31, 2024, the future estimated minimum lease payments under

non-cancelable operating leases are as follows:

7 unchanged sentences

Total cash paid for amounts included in the measurement of lease liabilities

were $ 29,055 and $ 12,900 for the three months ended September 30, 2024 and 2023, respectively.

were $ 58,110 and $ 25,800 for the six months ended December 31, 2024 and 2023, respectively.

The weighted average remaining lease term and discount

rate as of September 30, 2024 and June 30, 2024 were as follows:

rate as of December 31, 2024 and June 30, 2024 were as follows:

Schedule of weighted average remaining lease term and discount rate

September 30, 2024

December 31, 2024

June 30, 2024

35 unchanged sentences

The defendants filed a motion to

dismiss the amended complaint on August 21, 2024 , and plaintiffs filed their opposition

on October 21, 2024 .

The defendant’s reply brief is due December 5, 2024.

The Company believes the lawsuit is without merit

and intends to defend the case vigorously.

At this early stage of the proceedings, the Company is unable to make any prediction regarding

the outcome of the litigation.

No adjustment or accruals have been reflected in the accompanying condensed financial statements.

dismiss the amended complaint on August 21, 2024, and plaintiffs filed their opposition on October 21, 2024 and the defendants’

reply brief was filed on December 5, 2024.

On December 30, 2024, a shareholder derivative lawsuit was filed in the

United States District Court for the District of Nevada by putative stockholder Andrew Hulm, allegedly on behalf of the Company, that

piggy-backs on the securities class action also pending in that court.

The derivative complaint names certain current and former officers

and directors as defendants, and generally alleges that they breached their fiduciary duties by causing or failing to prevent the securities

violations alleged in the securities class action.

The Company believes that the claims are without merit and intend to defend

vigorously against them, but there can be no assurances as to the outcome.

Employee Benefit Plan

6 unchanged sentences

The Company made contributions into the plan of approximately

$ 34,500 and $ 30,900 , for the three months ended September 30, 2024 and 2023, respectively.

Subsequent Events

In October 2024, the Company closed three

registered direct offerings totaling 8,256,000

shares of its common stock, par value $ 0.0001 per

share, and two concurrent private placements of warrants to purchase up to 8,256,000 shares

of Common Stock (the “October Common Warrants”) priced at-the-market under Nasdaq rules at prices ranging from $ 1.50 to

share (the “October Offerings”) .

The October Common Warrants have exercise prices

ranging from $ 1.37 to

share and are exercisable beginning six months following issuance and will expire on the fifth anniversary date of the original

issuance dates.

The gross proceeds to the Company from the October Offerings totaled approximately $ 15.9 million,

before deducting placement agent fees and offering expenses of approximately $ 2.8 million.

Additionally, upon closing of the October Offerings the Company issued placement agent warrants (the “October Placement

Agent’s Warrants”) to purchase 412,800 shares of Common Stock in the aggregate exercisable at a per share price ranging

from $ 1.88 to

which was equal to 125% of the offering price per share in the applicable October Offering.

The October Placement Agent’s

Warrants are exercisable during a five-year period commencing 180 days from each of the respective closing dates of the October

Additionally in October, 1,216,300 of the common warrants from the September 2024 Offering were exercised at

$ 1.53 per share for proceeds totaling approximately $ 1.9 million.

$ 27,500 and $ 20,500 , for the three months ended December 31, 2024 and 2023, respectively.

The Company made contributions into the plan

of approximately $ 62,000 and $ 51,400 , for the six months ended December 31, 2024 and 2023, respectively.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements