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Item 7. Management’s Discussion and Analysis

2024-04-15 compared with 2023-03-31 · 49 added, 63 removed, 90 unchanged (55% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

are a clinical-stage biopharmaceutical company focused on the development of GP2, an immunotherapy to prevent breast cancer recurrences

in patients who have previously undergone surgery.

We are a clinical-stage biopharmaceutical company focused on our Phase

III clinical trial, Flamingo-01, which is evaluating GLSI-100, an immunotherapy to prevent breast cancer recurrences.

GP2 is a 9 amino acid transmembrane peptide of the HER2/ neu protein, a cell

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intermediate (2+), and high (3+ or over-expressor) levels.

The combination of GP2 + GM-CSF is called GLSI-100.

In a completed randomized,

single-blinded, placebo-controlled, multi-center Phase IIb clinical trial led by MD Anderson Cancer Center, no recurrences were observed

in patients treated with GLSI-100 in the HER2/ neu 3+ adjuvant setting after median 5 years of follow-up, if the patients were

treated, followed, and remained disease free over the first 6 months, which is the time required to reach peak immunity and thus maximum

efficacy and protection (p = 0.0338).

For the 146 patients who have been treated with GLSI-100 to date over 4 clinical trials, treatment

was well tolerated and no serious adverse events were observed related to the immunotherapy.

have commenced Flamingo-01, a Phase III clinical trial with Baylor College of Medicine as the global primary investigator site.

is designed to evaluate the safety and efficacy of GLSI-100 in HER2 /neu positive patients with residual disease or high-risk pathologic

complete response at surgery and who have completed both neoadjuvant and postoperative adjuvant trastuzumab based treatment.

We have commenced Flamingo-01, a Phase III clinical trial, with plans to expand

into Europe and to open up to 150 sites globally.

Flamingo-01 is designed to evaluate the safety and efficacy of GLSI-100 in HER2 /neu

positive patients with residual disease or high-risk pathologic complete response at surgery and who have completed both neoadjuvant

and postoperative adjuvant trastuzumab based treatment.

date, we have not generated any revenue and we have incurred net losses.

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for the year ended December 31, 2022.

The increase was primarily the result of increases in manufacturing and clinical

expenses for the Phase III clinical trial.

The increase was primarily the result of increases in clinical expenses for the

Phase III clinical trial.

and Administrative Expenses

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for the year ended December 31, 2022.

The increase was primarily the result of increases in cash and stock-based compensation expense.

The increase was primarily the result of increases in stock-based compensation expense.

and Capital Resources

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be for continuing operations, funding of research and development, including our clinical trials, and general working capital requirements.

Between January 1, 2024 and April 10, 2024, the Company completed At The Market (“ATM”) offerings pursuant

to its ATM agreement with Jefferies, in which it issued and sold a total of 30,244 shares of its common stock at an average

offering price of $12.81 per share for gross proceeds of $387,490 and net proceeds of $348,741, after deducting

underwriting discounts and commissions and offering expenses borne by the Company, which totaled $ 38,749 .

Flow Activities for the Years Ended December 31, 2023 and 2022

incurred net losses of $7,825,237 and $4,570,576 during the years ended December 31, 2022 and 2021, respectively, and the increase was primarily the result of increases in manufacturing and clinical expenses for the Phase III clinical trial and increases

in cash and stock-based compensation expense.

was $13,468,026 at December 31, 2022 and $27,204,269 at December 31, 2021 and decreased due to the following reasons:

incurred net losses of $8,891,803 and $7,825,237 during the years ended December 31, 2023 and 2022, respectively, and the increase was

primarily the result of increases in clinical expenses for the Phase III clinical trial and increases in stock-based

compensation expense.

Cash was $6,989,424 at December 31, 2023 and $13,468,026 at December 31, 2022 and decreased due to the following

cash used in operating activities was $6,478,602 for the year ended December 31, 2023 and $6,200,027 for the year ended December 31,

The increase was primarily the result of increases in manufacturing and clinical expenses for the Phase III clinical trial and increases

in cash compensation expense.

The increase was primarily the result of increases in clinical expenses for the Phase III clinical trial.

did not use or generate cash from investing activities during the year ended December 31, 2023 and December 31, 2022.

cash used in financing activities was $7,536,216 during the year ended December 31, 2022, attributable to the repurchase of common stock pursuant to the Company’s stock repurchase program.

provided by financing activities was $2,835,442 during the year ended December 31, 2021, attributable to the exercise of the

underwriter’s over-allotment option from our follow-on offering and the partial exercise of underwriter warrants.

was no net cash provided by or used in financing activities during the year ended December 31, 2023.

Net cash used in financing activities

was $7,536,216 during the year ended December 31, 2022, attributable to the repurchase of common stock pursuant to the Company’s

stock repurchase program.

Obligations and Commitments

of December 31, 2022, we did not have any material contractual obligations, other than employment and shareholder agreements, license

for GP2 from HJF, manufacturing and clinical trial obligations related to the Phase III clinical trial.

of December 31, 2023, we did not have any material contractual obligations, other than employment and shareholder agreements and the

license for GP2 from HJF.

Sheet Arrangements

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significant social and economic disruptions and uncertainties associated with the ongoing coronavirus pandemic and the COVID-19 control

Accounting Pronouncements

February 2016, the FASB issued ASU No.

2016-02, Leases (Topic 842) (“ASU 2016-02”), which provides guidance requiring lessees

to recognize a right-of-use asset and a lease liability on the balance sheet for substantially all leases, with the exception of short-term

Leases will be classified as either financing or operating, with classification affecting the pattern of expense recognition

in the statement of income.

The Company adopted Topic 842 effective October 1, 2019 and elected the package of transition practical expedients

for expired or existing contracts, which does not require reassessment of:

(1) whether any of the Company’s contracts are or contain

leases, (2) lease classification and (3) initial direct costs.

In July 2018, the FASB issued ASU No.

2018-11, “Targeted Improvements

- Leases (Topic 842).” The Company did not elect the hindsight practical expedient.

This update provides an optional transition

method that allows entities to elect to apply the standard using the modified retrospective approach at its effective date, versus recasting

the prior years presented.

If this adoption method is elected, an entity would recognize a cumulative-effect adjustment to the opening

balance of retained earnings in the year of adoption.

The Company elected this adoption method on October 1, 2019 and the adoption did

not result in any cumulative impact to retained earnings.

Additionally,

the Company’s adoption of Topic 842 did not have a significant impact on the recognition, measurement, or presentation of lease

expenses within the statements of operations or the statements of cash flows.

The Company’s adoption of Topic 842 did not have

a material impact on the timing or amount of the Company’s sublease agreement.

January 2021, the Company early adopted ASU 2020-06 Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging

— Contracts in Entity’s Own Equity (Subtopic 815-40).

ASU 2020-06 simplifies the accounting for convertible debt instruments

and convertible preferred stock by reducing the number of accounting models and limiting the number of embedded conversion features separately

recognized from the primary contract.

The guidance also includes targeted improvements to the disclosures for convertible instruments

and earnings per share.

ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within

those fiscal years.

Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020.

The adoption of

ASU 2020-06 did not have a material impact on the Company’s financial statements.

Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments –

Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments.

The main objective of the standard is to provide financial

statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments

to extend credit held by a reporting entity at each reporting date.

To achieve this objective, the amendments in this standard replace

the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration

of a broader range of reasonable and supportable information to inform credit loss estimates.

The update is effective for the Company

beginning January 1, 2023 with early adoption permitted.

The Company adopted the standard on January 1, 2023.

The adoption of this standard

did not have a material effect on the Company’s audited consolidated financial statements and related disclosures.

Issued Accounting Pronouncements Not Yet Adopted

October 2023, the FASB issued ASU 2023-06—Codification Amendments in Response to the SEC’s Disclosure Update and Simplification

The main objective of the amendment is to modify the disclosure or presentation requirements of various Topics in the Codification.

Certain amendments represent clarifications to or technical corrections of the current requirements.

to eliminate disclosure requirements

that were redundant, duplicative, overlapping, outdated, or superseded.

The effective date for each amendment will be when the SEC’s

removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited.

is still evaluating the impact of the adoption of this standard.

April 5, 2012, the JOBS Act was enacted.

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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-K

Item 7. Management’s Discussion and Analysis