Glucotrack, Inc. 10-Q

Item 1. Financial Statements GLUCOTRACK INC. CONDENSED CONSOLIDATED BALANCE SHEETS (i n thousands of US dollars except share data) In thousands of US dollars (except stock data) March 31, 2024 December 31, 2023 Unaudited Current Assets Cash and cash equivalents 1,497 4,492 Other current assets 440 376 Total current assets 1,937 4,868 Operating lease right-of-use asset, net (Note 3C) 77 - Property and equipment, net 82 27 Restricted cash 10 10 TOTAL ASSETS 2,106 4,905 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities Accounts payable 1,014 839 Operating lease liability, current (Note 3C) 24 - Other current liabilities 444 673 Total current liabilities 1,482 1,512 Non-current Liabilities Loans from stockholders 195 196 Operating lease liability, non-current (Note 3C) 53 - Total liabilities 1,730 1,708 Commitments and contingent liabilities (Note 4) - - Stockholders’ Equity Common Stock of $ 0.001 par value (“Common Stock”): 500,000,000 shares authorized as of March 31, 2024 and December 31, 2023; 26,756,369 and 20,892,193 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively 27 20 Common Stock of $ 0.001 par value (“Common Stock”): 500,000,000 shares authorized as of March 31, 2024 and December 31, 2023; 26,756,369 and 20,892,193 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively 27 20 Additional paid-in capital 113,029 112,966 Receipts on account of shares 78 48 Accumulated other comprehensive income 22 16 Accumulated deficit ( 112,780 ) ( 109,853 ) Total stockholders’ equity 376 3,197 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 2,106 4,905 The accompanying notes are an integral part of these condensed interim consolidated financial statements. 4 GLUCOTRACK INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (in thousands of US dollars except share data) (unaudited) 2024 2023 Three-month period ended March 31, 2024 2023 Research and development $ 2,148 $ 642 General and administrative 733 642 Selling and marketing expenses 70 - Total operating expenses 2,951 1,284 Operating loss 2,951 1,284 Finance expenses (income), net ( 24 ) 2 Net Loss 2,927 1,286 Other comprehensive income: Foreign currency translation adjustment ( 6 ) ( 5 ) Comprehensive loss for the period $ 2,921 $ 1,281 Basic and diluted net loss per common stock $ ( 0.12 ) $ ( 0.08 ) Weighted average number of common stock used in computing basic and diluted loss per common stock 24,959,768 15,503,632 The accompanying notes are an integral part of these condensed interim consolidated financial statements. 5 GLUCOTRACK INC. CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (in thousands of US Dollars except share data) (unaudited) Numbers of Shares Amount Paid-in Capital account of shares Comprehensive Income Accumulated Deficit Stockholders’ Equity In thousands of US Dollars (except share data) Common Stock Additional Receipts on Accumulated Other Total Numbers of Shares Amount Paid-in Capital account of shares Comprehensive Income Accumulated Deficit Stockholders’ Equity Balance as of January 1, 2023 15,500,730 15 103,095 4 17 ( 101,901 ) 1,230 Loss for the period - - - - - ( 1,286 ) ( 1,286 ) Other comprehensive income - - - - 5 - 5 Stock-based compensation - - 57 - - - 57 Issuance of restricted shares as compensation towards directors 2,902 ( * ) - 4 ( 4 ) - - - Restricted shares to be issued as compensation towards directors - - - 5 - - 5 Balance as of March 31, 2023 15,503,632 15 103,156 5 22 ( 103,187 ) 11 Balance as of January 1, 2024 20,892,193 20 112,966 48 16 ( 109,853 ) 3,197 Balance 20,892,193 20 112,966 48 16 ( 109,853 ) 3,197 Loss for the period - - - - - ( 2,927 ) ( 2,927 ) Other comprehensive income - - - - 6 - 6 Stock-based compensation - - 22 - - - 22 Issuance of restricted shares as compensation towards directors 194,503 - 48 ( 48 ) - - - Issuance of restricted shares as payment for achievement of milestone pursuant to purchase agreement (Note 4B) 100,000 1 ( 1 ) - - - - Restricted shares to be issued as compensation towards directors - - - 78 - - 78 Exercise of prefunded warrants into shares (Note 3A) 1,976,470 2 ( 2 ) - - - - Exchange of warrants into shares (Note 3B) 3,593,203 4 ( 4 ) - - - - Balance as of March 31, 2024 26,756,369 27 113,029 78 22 ( 112,780 ) 376 Balance 26,756,369 27 113,029 78 22 ( 112,780 ) 376 (*) Represents amount lower than $1. The accompanying notes are an integral part of these condensed interim consolidated financial statements. 6 GLUCOTRACK INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands of US Dollars) 2024 2023 Three-month period ended March 31, 2024 2023 (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES Loss for the period $ ( 2,927 ) $ ( 1,286 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 4 4 Stock-based compensation 22 57 Issuance of restricted shares as compensation towards directors 78 5 Linkage difference on principal of loans from stockholders ( 1 ) 2 Changes in assets and liabilities: Increase in other current assets ( 64 ) ( 137 ) Increase (decrease) in accounts payable 175 ( 13 ) Increase (Decrease) in other current liabilities ( 229 ) 55 Net cash used in operating activities ( 2,942 ) ( 1,313 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment ( 59 ) - Net cash used in investing activities ( 59 ) - Effect of exchange rate changes on cash and cash equivalents, and restricted cash 6 ( 5 ) Change in cash and cash equivalents, and restricted cash ( 2,995 ) ( 1,318 ) Cash and cash equivalents, and restricted cash at beginning of the period 4,502 2,331 Cash and cash equivalents, and restricted cash, end of period $ 1,507 $ 1,013 Three-month period ended March 31, 2024 2023 (Unaudited) Supplemental disclosure of cash flow activities: (a) Net cash paid during the year for: Interest $ 28 $ - (b) Non-cash activities: Recognition of right for usage asset against a lease liability $ 79 $ - The accompanying notes are an integral part of these condensed interim consolidated financial statements. 7 GLUCOTRACK INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands of US Dollars) NOTE 1 – GENERAL A. Glucotrack Inc. (the “Company”) was incorporated on May 18, 2010 under the laws of the State of Delaware. The Company is a medical device company, focused on the design, development and commercialization of novel technologies for use by people with diabetes. The Company is currently developing an Implantable Continuous Blood Glucose Monitor (“CBGM”) for persons with Type 1 diabetes and insulin-dependent Type 2 diabetes (the “Glucotrack CBGM Product”). B. Liquidity and capital resources To date, the Company has not yet commercialized the Glucotrack CBGM Product. Further development and commercialization efforts are expected to require substantial additional expenditures. Therefore, the Company is dependent upon external sources for financing its operations. As of March 31, 2024, the Company has incurred accumulated deficit of $ 112,780 . Furthermore, the Company has generated operating losses and negative operating cash flow for all reported periods. As of March 31, 2024, the balance of cash and cash equivalents which amounted to $ 1,497,000 is insufficient for the Company to realize its business plans for the twelve-month period subsequent to the reporting period. Management has considered the significance of such conditions in relation to the Company’s ability to meet its current obligations and to achieve its business targets and has determined that these conditions raise substantial doubt about the Company’s ability to continue as a going concern. During the year ended December 31, 2023, the Company raised net proceeds of $ 8,730 through completion of an underwritten public offering. In addition, during the year ended December 31, 2023, the Company entered into exchange agreement with certain shareholders under which warrants with down round protection feature have been exchanged into shares of common stock in order to improve its equity structure to enable the completion of a planned equity financing (see also Note 3A). Moreover, in April 2024, the Company raised net proceeds of $ 500,000 through completion of private placement transaction (see also Note 5A). The Company plans to finance its operations through the sale of equity and/or debt securities (including shelf registration statement on Form S-3 that was declared effective on September 27, 2021 by the Securities and Exchange Commission (“SEC”) and which allows the Company to register up to $ 90,000 of certain equity and/or debt securities of the Company through prospectus supplement). There can be no assurance that the Company will succeed in obtaining the necessary financing or generating sufficient revenues from sales of its Glucotrack CBGM Product, if any, in order to continue its operations as a going concern. The condensed interim consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Basis of Presentation The accompanying unaudited condensed interim consolidated financial statements and related notes should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as was filed with the SEC on March 28, 2024. The unaudited condensed interim consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC related to interim financial statements. As permitted under those rules, certain information and footnote disclosures normally required or included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The financial information contained herein is unaudited; however, management believes all adjustments have been made that are considered necessary to present fairly the results of the Company’s financial position and operating results for the interim periods. All such adjustments are of a normal recurring nature. The results for the period of three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any other interim period or for any future period. 8 GLUCOTRACK INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands of US Dollars) NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.) B. Use of Estimates in the Preparation of Financial Statements The preparation of the condensed interim consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of expenses during the reported periods. Actual results could differ from those estimates. Management believes that there are no critical accounting estimates in these financial statements. C. Principles of Consolidation The condensed interim consolidated financial statements include the accounts of the Company and its subsidiary. Significant intercompany balances and transactions have been eliminated in consolidation. D. Cash and Cash Equivalents Cash equivalents are short-term highly liquid investments which include short term bank deposits (up to three months from the date of deposit), that are not restricted as to withdrawals or use that are readily convertible to cash with maturities of three months or less as of the date acquired. E. Leases The Company applies ASC Topic 842, “Leases” (“ASC 842”) under which the Company determines if an arrangement is a lease at inception. The Company’s assessment is based on: (i) whether the contract involves the use of an identified asset, (ii) whether the Company obtains the right to substantially all of the economic benefits from the use of the asset throughout the period of use, and (iii) whether the Company has the right to direct the use of the asset. Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: (i) the lease transfers ownership of the asset by the end of the lease term, (ii) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (iii) the lease term is for a major part of the remaining useful life of the asset, (iv) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset, or (v) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of lease term. A lease is classified as an operating lease if it does not meet any one of these criteria. Since all the Company’s lease contracts for premises do not meet any of the criteria above, the Company concluded that all its lease contracts should be classified as operating leases. Right of Usage (“ROU”) assets and liabilities are recognized on the commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As the Company’s leases do not provide an implicit rate, the Company uses its Incremental Borrowing Rate (“IBR”) based on the information available on the commencement date in determining the present value of lease payments. The Company’s IBR is estimated to approximate the interest rate for collateralized borrowing with similar terms and payments and in economic environments where the leased asset is located. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. Moreover, the ROU asset may also include initial direct costs, which are incremental costs of a lease that would not have been incurred if the lease had not been obtained. The Company uses the long-lived assets impairment guidance in ASC 360-10, “Property, Plant, and Equipment - Overall”, to determine whether a ROU asset is impaired, and if so, the amount of the impairment loss to recognize. Certain leases include options to extend or terminate the lease. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain that the Company will exercise that option. An option to terminate is considered unless it is reasonably certain that the Company will not exercise the option. 9 GLUCOTRACK INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands of US Dollars) NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.) F. Modification of equity-classified contracts The modification or exchange of equity-classified contracts, such as warrants that were classified as equity before the modification or exchange and remained eligible for equity classification after the modification, is accounted for in a similar manner to a modification of stock-based compensation. Accordingly, the incremental fair value from the modification or exchange (the change in the fair value of the instrument before and after the modification or exchange), if any, is recognized as a reduction of retained earnings of increase of accumulated deficit as a deemed dividend. Modifications or exchanges that result in a decrease in the fair value of an equity-classified instrument are not reflected in accumulated deficit. In addition, the amount of the deemed dividend is also recognized as an adjustment to earnings available to common shareholders for purposes of calculating earnings per share. G. Basic and diluted loss per share Basic loss per share is computed by dividing the loss for the period applicable for Common Stockholders by the weighted average number of shares of Common Stock outstanding. In computing, diluted loss per share, basic earnings per share are adjusted to reflect the potential dilution that could occur upon the exercise of options or warrants issued or granted using the “treasury stock method,” if the effect of each of such financial instruments is dilutive. In computing diluted loss per share, the average stock price for the period is used in determining the number of Common Stock assumed to be purchased from the proceeds to be received from the exercise of stock options or stock warrants. Shares that will be issued upon the exercise of all stock options and stock warrants (other than pre-funded warrants), have been excluded from the calculation of the diluted net loss per share for all the reported periods for which net loss was reported because the effect of the common shares issuable as result of the exercise or conversion of these instruments was anti-dilutive. 10 GLUCOTRACK INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONT.) (in thousands of US Dollars) NOTE 3 - SIGNIFICANT TRANSACTIONS A. Exercise of pre-funded warrants On January 3, 2024, a number of 1,976,470 pre-funded warrants granted through underwritten public offering in April 2023 have been fully exercised into the same number of shares of Common Stock of the Company. B. Exchange Agreement On February 13, 2024, the Company entered into an Exchange Agreement with certain warrantholders (the “Holders”), pursuant to which the Company and the Holders agreed to exchange (the “Exchange”) warrants with down round protection feature exercisable to common shares (the “Warrants”) owned by the Holders for shares of Common Stock to be issued by the Company. On February 13, 2024, the Company closed the Exchange and issued to the Holders on February 15, 2024 an aggregate of 3,593,203 shares of Common Stock in exchange for 4,381,953 Warrants (the “Shares”). It was also agreed that the Holders will not, during the period (“Lock-Up Period”) (i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Shares, (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Shares of, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Shares or such other securities, in cash or otherwise, (iii) make any demand for or exercise any right with respect to, the registration of any Shares or any security convertible into or exercisable or exchangeable for shares of common stock, or (iv) publicly announce an intention to effect any transaction specific in clause (i), (ii) or (iii) above, provided however that the Holder, during the Lock-Up Period, may (a) sell or contract to sell Shares at a price higher than $0.50 per Share on any trading day up to 10% of the daily volume of Shares or (b) sell or contract to sell Shares at a price higher than $0.80 per Share on any trading day with no limitation on volume. The Lock-Up Period shall expire at the earliest of (i) 365 days after the date hereof or (ii) until the Shares traded above $ 1.00 per Share for five consecutive trading days. The Company accounted for the Exchange of the aforesaid warrants as deemed dividend which was calculated at the closing date by the management using the assistance of external appraiser as the excess of fair value of the share to be issued after taking into consideration a discount for lack of marketability at a rate of 16.81% over the Lock-Up Period over the fair value of the original equity instrument (i.e. warrants which included down round protection feature). However, since the fair value of the new equity instrument was estimated as lesser than the fair value of the replaced equity instrument, deemed dividend was not recorded. C. Lease Agreement On February 19, 2024, the Company entered into Lease Agreement (the “Agreement”) with Tapsak Enterprises LLC dba Virginia Analytical (the “Landlord”) under which it was agreed that the Company will lease from the Landlord a premises located in Front Royal, Virginia area for a monthly rental fee of $ 2.5 over a period of 3 -years commencing March 1, 2024 through February 28, 2027 (the “Initial Lease Period”). A security deposit of $ 2.5 which represents a one month payment is held by the Landlord and will be returned to the Company at the end of the Initial Lease Period. In addition, the Company has an option to renew the Initial Lease Period for another two additional periods of 3-years each following the Initial Lease Period (the “Option Term”), following advanced notice as defined in the Agreement. The monthly rental fee over the Option Term shall be the fair market rate which is determined as the comparable cost for similar property in the Front Royal, Virginia area. In accordance with the provision of ASC 842, Leases, at the commencement date of the Agreement, the Company recognized the right to usage asset equals to lease liability in total amount of $ 79 . The lease liability was measured at the present value of the future lease payments, which are discounted based on an estimate of the estimated interest rate that the Company would be required to pay in order to borrow a similar amount for a similar period in order to obtain a similar amount on the date of first recognition of the lease (using a discount rate of 9.03 %). As part of the lease term, the Company considered only the Initial Lease Period, as the exercise of the option to extend the period was not considered as reasonably certain. 11 Right of usage asset: SCHEDULE OF RIGHT OF USAGE ASSET Premises Cost Balance as of January 1, 2024 - Additions 79 Balance as of March 31, 2024 79 Accumulated amortization Balance as of January 1, 2024 - Additions 2 Balance as of March 31, 2024 2 Amortized cost as of March 31, 2024 77 Lease liability: SCHEDULE OF LEASE LIABILITY Premises Balance as of January 1, 2024 - Additions 79 Interest expenses 1 Lease payments ( 3 ) Balance as of March 31, 2024 77 Amounts recognized in statements of cash flow: SCHEDULE OF AMOUNT RECOGNIZED OF OPERATING LEASE Three months period ended March 31, 2024 Amortization of the right for usage asset 2 Interest expense in respect of lease liability 1 Repayment of principal in respect of lease liability 3 Total negative cash flows in respect of leasing for the period of three months ended March 31, 2024 are approximately $ 3 . Analysis of contractual payment dates of lease liability as of March 31, 2024: SCHEDULE OF CONTRACTUAL PAYMENT LEASE LIABILITY Up to a year $ 30 Between 1-2 years 30 More than 2 years 28 Total (undiscounted) $ 88 12 GLUCOTRACK INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONT.) (in thousands of US Dollars) NOTE 4 – COMMITMENTS AND CONTINGENT LIABILITIES A. On March 4, 2004, the IIA provided Integrity Israel with a grant of approximately $ 93 (NIS 420,000 ), for its plan to develop a non-invasive blood glucose monitor (the “Development Plan”). Integrity Israel is required to pay royalties to the IIA at a rate ranging between 3 - 5 % of the proceeds from the sale of the Company’s products arising from the Development Plan up to an amount equal to $ 93 plus interest at LIBOR from the date of grant. As to the replacement of the LIBOR benchmark rate, even though the IIA has not declared the alternative benchmark rate to replace the LIBOR, the Company does not believe it will have a significant impact. As of March 31, 2024, the remaining contingent liability with respect to royalty payment on future sales equals approximately $ 73 excluding interest. Such contingent obligation has no expiration date. B. On October 7, 2022 (“the Closing Date”), the Company entered into an Intellectual Property Purchase Agreement (the “Agreement”) with Paul Goode, the Company’s Chief Executive Officer (the “Seller”), under which the parties agreed that on and subject to the terms and conditions of the Agreement, at the Closing Date, the Seller shall sell, assign, transfer, convey and deliver to the Company, all of the Seller’s right, title and interest in and to the following assets, properties and rights (collectively, the “Purchased Assets”): (a) All rights, title, interests in all current and future intellectual property, including, but not limited to patents, trademarks, trade secrets, industry know-how and other IP rights relating to an implantable continuous glucose sensor (collectively, the “Conveyed Intellectual Property”); and (b) All the goodwill relating to the Purchased Assets. In consideration for the sale by the Seller of the Purchased Assets to the Company, at the Closing Date, the Company paid to Seller cash in the amount of one dollar and obligated the Company to issue up to 1,000,000 shares of its Common Stock to be issued based upon specified performance milestones as set forth in the Agreement (the “Purchase Price”). In addition, if upon the final issuance, the aggregate 1,000,000 shares represent less than 1.5 % of the then outstanding Common Stock of the Company, the final issuance will include such number of additional shares so that the total aggregate issuance equals 1.5 % of the outstanding shares (the “True-Up Shares”). All shares of Common Stock of the Company that will be issued under this agreement shall be (i) restricted over a limited period of 1-year and issued in transactions exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended and (ii) subject to the lockup provisions. When the Company acquires net assets that do not constitute a business, as defined under ASU 2017-01 Business Combinations (Topic 805) Clarifying the Definition of a Business (such as when there is no substantive process in the acquired entity) the transaction is accounted for as an asset acquisition and no goodwill is recognized. The acquired In-Process Research and Development intangible asset (“IPR&D”) to be used in research and development projects which have been determined not to have alternative future use, is expensed immediately. At the Closing Date, it was determined that the asset acquisition represents the purchase of IPR&D with no alternative future use. However, the achievement of each of the performance milestones is considered as a contingent event outside the Company’s control and thus the contingent consideration which is equal to the fair value of the Purchase Price as measured at the Closing Date will be recognized when it becomes probable that each target will be achieved within the reasonable period of time. Such additional contingent consideration will be recognized in subsequent periods if and when the contingency (the achievement of targets) is resolved, or when it will be considered as reasonably estimable under ASC 450, Contingencies. During June 2023, the Company achieved the first performance milestone out of the five performance milestones outlined in the Agreement executed between the Company and the Seller as of the Closing Date. As a result, upon the date of the fulfilment of the first performance milestone the Company was committed to issue 100,000 restricted shares to the Seller. Accordingly, in 2023, the Company recorded an amount of $ 131 as research and development expenses with a similar amount as an increase to additional paid-in capital. The shares were issued on February 6, 2024. As of March 31, 2024, the achievement of all other remaining performance milestones was not considered probable and thus nothing was accrued with respect to thereof. 13 NOTE 5 - SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed interim consolidated financial statements were issued May 15, 2024. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements, except as follows: A. Private Placement Agreement On April 22, 2024, the Company entered into private placement agreement under which the Company issued 396,825 shares of its common stock at a price of $ 1.26 per share for aggregate gross proceeds of $ 500,000 (the “Offering”). The Offering included the participation of certain members of the Company’s executive management, Board of Directors and existing shareholders. There were no warrants issued and no commissions or brokerage fees paid in connection with the Offering. B. Reverse Stock Split At the Company’s annual meeting of stockholders held on April 26, 2024, the stockholders of the Company approved a proposal to authorize the Company’s Board of Directors (the “Board”) to file a Certificate of Amendment to the Company’s Certificate of Incorporation, as amended, to effect a reverse stock split of the Company’s common stock, par value $0.001 per share at a ratio between 1-for-5 and 1-for-30, to be effected at such time and date, if at all, as determined by the Board in its sole discretion (the “Reverse Stock Split”). On April 30, 2024, the Board approved the Reverse Stock Split. As of the date of the filing of this Quarterly Report on 10-Q, the Company has not filed the Certificate of Amendment to implement the Reverse Stock Split, and the Reverse Stock Split is not effective as of the time of filing. 14