What changed in this filing

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Item 1. Financial Statements

2024-11-14 compared with 2024-08-14 · 94 added, 68 removed, 358 unchanged (31% of the section changed)

3 unchanged sentences

(in thousands, except share and per share amounts)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Assets (unaudited)

18 unchanged sentences

Common stock, 0.0001 par value;

250,000,000 shares authorized as of June 30, 2024 and December 31, 2023;

801,914 and 49,663 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

250,000,000 shares authorized as of September 30, 2024 and December 31, 2023;

5,022,901 and 49,663 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Additional paid-in-capital 41,453 31,792

6 unchanged sentences

(in thousands, except share and per share amounts)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

5 unchanged sentences

Change in fair value of warrant liability — 46 3 167

Interest expense, net 6 ( 934 ) 13 ( 2,095 )

Other income — 250 — 250

Interest income (expense), net 7 6 19 ( 2,089 )

Net loss $ ( 2,123 ) $ ( 2,137 ) $ ( 6,259 ) $ ( 11,033 )

22 unchanged sentences

Balance, June 30, 2023 32,485 $ — $ 31,430 $ ( 27,392 ) $ 4,038

Stock-based compensation — — 326 — 326

Net loss — — — ( 2,137 ) ( 2,137 )

Balance, September 30, 2023 32,485 $ — $ 31,756 $ ( 29,529 ) $ 2,227

Common Stock Additional Paid-in Capital Accumulated Deficit Stockholders’ Equity

8 unchanged sentences

Fractional share adjustment ( 187 ) — — — —

Issuance of common stock and prefunded warrants in financing 353,892 — 4,134 — 4,134

Issuance of common stock 353,892 — 4,134 — 4,134

Prefunded warrant exercise 202,334 — — — —

1 unchanged sentence

Balance, June 30, 2024 801,914 $ — $ 40,389 $ ( 35,670 ) $ 4,719

Stock-based compensation — — 37 — 37

Issuance of common stock 2,093,404 — 1,027 — 1,027

Warrant exercise 2,127,583 — — — —

Net loss — — — ( 2,123 ) ( 2,123 )

Balance, September 30, 2024 5,022,901 $ — $ 41,453 $ ( 37,793 ) $ 3,660

See accompanying notes to unaudited interim consolidated financial statements.

2 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Operating activities:

5 unchanged sentences

Change in fair value of warrant liability ( 3 ) 18

Change in operating right of use assets ( 127 ) 26

Change in operating lease right of use assets ( 117 ) 39

Change in operating assets and liabilities:

10 unchanged sentences

Repayment of advances from employees — ( 195 )

Proceeds from issuance of common stock in financing 9,499 12,250

Proceeds from issuance of common stock under ATM 961 —

Proceeds from issuance of bridge promissory note — 1,250

Proceeds from issuance of common stock in financing transactions 9,499 12,250

Proceeds from issuance of common stock under ATM facility 1,988 —

Proceeds from warrant exercise 1 12

Payment for fractional shares in connection with reverse stock split ( 1 ) —

Net liabilities assumed in connection with reverse recapitalization — ( 2,939 )

12 unchanged sentences

Issuance of warrants for payment of stock issuance costs $ — $ 18

Stock issuance costs in accounts payable and accrued expenses $ 367 $ —

Merger costs included in accounts payable $ — $ 72

25 unchanged sentences

The Company has not generated any significant revenues from operations since inception and does not expect to do so in the foreseeable future.

The Company has incurred operating losses since its inception in 2009 and, as a result, has incurred $ 35,670 in accumulated deficit through June 30, 2024.

The Company has incurred operating losses since its inception in 2009 and as a result has incurred $ 37,793 in accumulated deficit through September 30, 2024.

The Company has financed its working capital requirements to date through the issuance of equity and debt securities.

As of June 30, 2024, the Company had cash of approximately $ 6,353 .

As of September 30, 2024, the Company had cash of approximately $ 4,746 .

In connection with signing the Merger Agreement, the Company, GRI Operations and Altium Growth Fund, LP (Altium) entered into a Securities Purchase Agreement, dated December 13, 2022 (the Equity SPA), pursuant to which Altium agreed to invest $ 12,250 in cash and cancel any outstanding principal and accrued interest on the Bridge Notes (as defined below) in return for the issuance of shares of GRI Operations common stock (GRI Operations Common Stock) immediately prior to the consummation of the Merger.

8 unchanged sentences

Each Series B-2 Common Warrant is exercisable into one share of Common Stock at a price per share of $ 14.30 for an 18 -month period after February 6, 2024 the date of issuance.

As of June 30, 2024, all of the February 2024 Pre-Funded Warrants have been exercised.

As of September 30, 2024, all of the February 2024 Pre-Funded Warrants have been exercised.

In connection with the issuance of the February 2024 Shares and February 2024 Warrants pursuant to the February 2024 Purchase Agreement, the exercise price of the Series A-1 Warrants was reduced to par, or $ 0.0001 , per share pursuant to the terms of the Series A-1 Warrants.

As of September 30, 2024, all of the Series A-1 Warrants have been exercised.

On May 20, 2024, the Company entered into an At The Market Offering Agreement (the Sales Agreement) with H.C.

Wainwright & Co., LLC (Wainwright), pursuant to which the Company may sell and issue, subject to the limitations in the Sales Agreement, shares up to $ 10.0 million of Common Stock from time to time through Wainwright as its sales agent (the ATM Offering).

Wainwright & Co., LLC (Wainwright), pursuant to which the Company may sell and issue, subject to the limitations in the Sales Agreement, up to $ 10.0 million shares of Common Stock from time to time through Wainwright as its sales agent (the ATM Offering).

Under the Sales Agreement, Wainwright is entitled to compensation of 3.0 % of the gross offering proceeds of all shares of Common Stock sold through it pursuant to the Sales Agreement.

As of June 30, 2024, the Company has sold 293,892 shares of Common Stock in the ATM Offering at a weighted-average price of $ 3.27 per share, raising $ 961 of gross proceeds and net proceeds of $ 923 , after deducting commissions to the sales agent and other ATM Offering related expenses.

As of September 30, 2024, the Company has sold 2,387,296 shares of Common Stock in the ATM Offering at a weighted-average price of $ 0.83 per share, raising $ 1,988 of gross proceeds and net proceeds of $ 1,910 , after deducting commissions to the sales agent and other ATM Offering related expenses.

On July 26, 2024, the Company filed a prospectus supplement to its registration statement on Form S-1 (File No.

333-279348) to increase the amount of shares of Common Stock that the Company may offer and sell under the Sales Agreement and applicable registration statement to an aggregate offering price of up to $ 2,644 , which amount does not include the shares of Common Stock having an aggregate gross sales price of approximately $ 961 that have been sold under the ATM Offering.

On June 26, 2024, the Company entered into a securities purchase agreement (the June 2024 Purchase Agreement), pursuant to which the Company agreed to issue and sell, in a public offering (the June 2024 Offering), (i) 60,000 shares (the June 2024 Shares) of Common Stock, (ii) 2,125,793 pre-funded warrants (the June 2024 Pre-Funded Warrants) exercisable for an aggregate of 2,125,793 shares of Common Stock, (iii) 2,185,793 Series C-1 common warrants (the Series C-1 Common Warrants) exercisable for an aggregate of 2,185,793 shares of Common Stock, and (iv) 2,185,793 Series C-2 common warrants (the Series C-2 Common Warrants, and together with the Series C-1 Common Warrants, the Series C Common Warrants) exercisable for an aggregate of 2,185,793 shares of Common Stock for net proceeds of $ 3,172 , after deducting offering expenses of $ 1,057 .

The Series C Common Warrants together with the June 2024 Pre-Funded Warrants are referred to in this Quarterly Report on Form 10-Q as the “June 2024 Warrants.” The securities were offered in combinations of (a) one June 2024 Share or one June 2024 Pre-Funded Warrant, together with (b) one Series C-1 Common Warrant and one Series C-2 Common Warrant, for a combined purchase price of $ 1.83 (less $ 0.0001 for each June 2024 Pre-Funded Warrant).

The June 2024 Pre-Funded Warrants are exercisable for one share of Common Stock at a price per share of $ 0.0001 , are exercisable immediately and will expire when exercised in full.

Each Series C Common Warrant is exercisable into one share of Common Stock at a price per share of $ 1.83 and are exercisable beginning on the effective date of stockholder approval of the issuance of the shares upon exercise of the Series C Common Warrants (Warrant Stockholder Approval).

The Series C-1 Common Warrants will expire on the five-year anniversary of the Warrant Stockholder Approval.

The Series C-2 Common Warrants will expire on the 18 -month anniversary of the Warrant Stockholder Approval.

Based on the Company’s current operating plan, the Company believes that its existing cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements into the first quarter of 2025.

The June 2024 Pre-Funded Warrants were exercisable for one share of Common Stock at a price per share of $ 0.0001 , were exercisable immediately and have been exercised in full as of September 30, 2024.

Each Series C-1 Common Warrant is exercisable into one share of Common Stock at a price per share of $ 1.83 for a five-year period beginning after September 6, 2024.

Each Series C-2 Common Warrant is exercisable into one share of Common Stock at a price per share of 1.83 for an 18 -month period beginning after September 6, 2024.

The Company’s ability to continue as a going concern is dependent on its ability to raise additional capital to fund its business activities, including its research and development program.

The Series T Warrants issued in connection with the Merger are not presently subject to forced exercise by the Company as the equity conditions for their forced exercise, which include (among other things) a requirement that shares of Common Stock have a value weighted average price of at least $ 838.11 per share for the periods specified in the Series T Warrants, are not met.

The Company intends to raise capital through additional issuances of equity securities and/or short-term or long-term debt arrangements, but there can be no assurances any such financing will be available when needed, even if the Company’s research and development efforts are successful.

6 unchanged sentences

The December 31, 2023 balance sheet was derived from the Company’s audited consolidated financial statements.

In the opinion of management, the unaudited interim consolidated financial statements furnished herein include all normal and recurring adjustments considered necessary to present fairly the Company’s financial position as of June 30, 2024, and the consolidated results of operations and consolidated stockholders’ deficit for the three and six months ended June 30, 2024 and 2023 and consolidated cash flows for the three and six months ended June 30, 2024 and 2023.

Consolidated results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2024.

In the opinion of management, the unaudited interim consolidated financial statements furnished herein include all normal and recurring adjustments considered necessary to present fairly the Company’s financial position as of September 30, 2024, and the consolidated results of operations and consolidated stockholders’ deficit for the three and nine months ended September 30, 2024 and 2023 and consolidated cash flows for the three and nine months ended September 30, 2024 and 2023.

Consolidated results of operations for the three and nine months ended September 30, 2024, are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2024.

The unaudited interim consolidated financial statements, presented herein, do not contain the required disclosures under GAAP for annual consolidated financial statements.

15 unchanged sentences

Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

As of June 30, 2024, the Company’s financial instruments included cash, cash equivalents, prepaid expenses and other current assets, accounts payable, accrued expenses and certain liability classified warrants.

As of September 30, 2024, the Company’s financial instruments included cash, cash equivalents, prepaid expenses and other current assets, accounts payable, accrued expenses and certain liability classified warrants.

The carrying amounts reported in the balance sheets for cash, cash equivalents, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair value based on the short-term maturity of these instruments.

The Company recognizes transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer.

At June 30, 2024, there were no financial assets or liabilities measured at fair value on a recurring basis other than the liability classified warrants.

At September 30, 2024, there were no financial assets or liabilities measured at fair value on a recurring basis other than the liability classified warrants.

In May 2022, Vallon Pharmaceuticals, Inc.

5 unchanged sentences

The valuation of the May 2022 Warrants is considered under Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable.

The change in the fair value of the Level 3 warrant liability is reflected in the statement of operations for the six months ended June 30, 2024.

The change in the fair value of the Level 3 warrant liability is reflected in the statement of operations for the nine months ended September 30, 2024.

Deferred Stock Issuance Costs

4 unchanged sentences

Diluted net loss per common share is computed based on the weighted average number of shares of common stock outstanding during each year, plus the dilutive effect of options considered to be outstanding during each year, in accordance with ASC 260, Earnings Per Share .

As the Company had a net loss in each of the three and six months ended June 30, 2024 and 2023, diluted net loss per common share is the same as basic net loss per common share for the period because the effects of potentially dilutive securities are antidilutive.

As the Company had a net loss in each of the three and nine months ended September 30, 2024 and 2023, diluted net loss per common share is the same as basic net loss per common share for the period because the effects of potentially dilutive securities are antidilutive.

Common stock equivalents excluded from the diluted net loss per common share calculations are as follows:

September 30,

Stock options 2,503 3,485

Warrants 5,293,861 27,699

5,305,316 41,347

Total 5,296,364 31,184

Recent Accounting Pronouncements

The Company considered the applicability and impact of all ASUs issued during the quarter ended June 30, 2024 and each was determined to be either not applicable or expected to have minimal impact on these financial statements.

The Company considered the applicability and impact of all ASUs issued during the quarter ended September 30, 2024 and each was determined to be either not applicable or expected to have minimal impact on these unaudited interim consolidated financial statements.

MERGER WITH VALLON

9 unchanged sentences

(c) Each warrant to purchase shares of GRI Operations Common Stock (the GRI Operations Warrants) outstanding immediately prior to the Effective Time was assumed by the Company and converted into a warrant to purchase shares of Common Stock (the Assumed Warrants) and thereafter (i) each Assumed Warrant became exercisable solely for shares of the Common Stock;

(ii) the number of shares of Common Stock subject to each Assumed Warrant was determined by multiplying (A) the number of shares of GRI Operations Common Stock that were subject to such GRI Operations Warrant, as in effect immediately prior to the Effective Time, by (B) the Exchange Ratio, and rounding the resulting number down to the nearest

whole number of shares of Common Stock;

immediately prior to the Effective Time, by (B) the Exchange Ratio, and rounding the resulting number down to the nearest whole number of shares of Common Stock;

and (iii) the per share exercise price for shares of Common Stock issuable upon exercise of each Assumed Warrant was determined by dividing (A) the exercise price per share of GRI Operations Common Stock subject to such GRI Operations Warrant, as in effect immediately prior to the Effective Time, by (B) the Exchange Ratio, and rounding the resulting exercise price up to the nearest whole cent.

26 unchanged sentences

The Company evaluates its hierarchy disclosures each reporting period.

There were no transfers between Level 1, 2 and 3 during the six months ended June 30, 2024.

The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s liabilities that are measured at fair value on a recurring basis at June 30, 2024:

There were no transfers between Level 1, 2 and 3 during the nine months ended September 30, 2024.

The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s liabilities that are measured at fair value on a recurring basis at September 30, 2024:

Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3)

5 unchanged sentences

Change in valuation ( 3 )

Fair value as of June 30, 2024

Fair value as of September 30, 2024

The Black-Scholes valuation model was used to estimate the fair value of the May 2022 Warrants with the following weighted-average assumptions:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Volatility 159.3 % 171.0 %

3 unchanged sentences

PROPERTY AND EQUIPMENT

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Computer equipment $ 21 $ 21

1 unchanged sentence

Accumulated depreciation ( 29 ) ( 26 )

Depreciation expense related to property and equipment was $ 2 for each of the six-month periods ended June 30, 2024 and 2023.

Depreciation expense related to property and equipment was $ 3 in each of the nine-month periods ended September 30, 2024 and 2023.

ACCRUED EXPENSES

Accrued expenses consist of the following:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Research and development $ 239 $ 93

17 unchanged sentences

The Bridge Notes were accounted for as share-settled debt under the accounting guidance in ASC 835-30 and, as such, the initial net carrying amounts were accreted to the redemption amounts using the effective interest method.

The Company incurred $ 205 of debt issuance costs related to its issuance of debt under the Bridge SPA, of which $ 90 was incurred during the six months ended June 30, 2023 related to its issuance of debt under the Bridge SPA.

Interest expense stemming from amortization of debt discounts and issuance costs was $ 1,161 and $ 2,104 for the three and six months ended June 30, 2023, respectively.

The Company incurred $ 205 of debt issuance costs related to its issuance of debt under the Bridge SPA, of which $ 90 was incurred during the nine months ended September 30, 2023 related to its issuance of debt under the Bridge SPA.

Interest expense stemming from amortization of debt discounts and issuance costs was $ 2,104 for the nine months ended September 30, 2023.

STOCKHOLDERS’ EQUITY

12 unchanged sentences

The February 2024 Warrants were classified as equity and the allocated fair value of $ 4,279 is included in additional paid in capital.

As of June 30, 2024, all of the February 2024 Pre-Funded Warrants have been exercised.

As of September 30, 2024, all of the February 2024 Pre-Funded Warrants have been exercised.

The Company determined that the amount paid for the February 2024 Pre-Funded Warrants approximates their fair value.

8 unchanged sentences

Under the Sales Agreement, Wainwright is entitled to compensation of 3.0 % of the gross offering proceeds of all shares of Common Stock sold through it pursuant to the Sales Agreement.

As of September 30, 2024, the Company has sold 2,387,296 shares of Common Stock in the ATM Offering at a weighted-average price of 0.83 per share, raising $ 1,988 of gross proceeds and net proceeds of $ 1,910 , after deducting commissions to the sales agent and other ATM Offering related expenses.

On July 26, 2024, the Company filed a prospectus supplement to its registration statement on Form S-3 (File No.

June 2024 Securities Purchase Agreement

On June 26, 2024, the Company entered into the June 2024 Purchase Agreement, pursuant to which the Company agreed to issue and sell, in the June 2024 Offering, (i) 60,000 June 2024 Shares, (ii) 2,125,793 June 2024 Pre-Funded Warrants exercisable for an aggregate of 2,125,793 shares of Common Stock, (iii) 2,185,793 Series C-1 Common Warrants exercisable for an aggregate of 2,185,793 shares of Common Stock, and (iv) 2,185,793 Series C-2 Common Warrants, exercisable for an aggregate of 2,185,793 shares of Common Stock for net proceeds of $ 3,172 , after deducting offering expenses of $ 1,057 .

On June 26, 2024, the Company entered into the June 2024 Purchase Agreement, pursuant to which the Company issued and sold, in the June 2024 Offering, (i) 60,000 June 2024 Shares, (ii) 2,125,793 June 2024 Pre-Funded Warrants exercisable for an aggregate of 2,125,793 shares of Common Stock, (iii) 2,185,793 Series C-1 Common Warrants exercisable for an aggregate of 2,185,793 shares of Common Stock, and (iv) 2,185,793 Series C-2 Common Warrants, exercisable for an aggregate of 2,185,793 shares of Common Stock for net proceeds of $ 3,172 , after deducting offering expenses of $ 1,057 .

The securities were offered in combinations of (a) one June 2024 Share or one June 2024 Pre-Funded Warrant, together with (b) one Series C-1 Common Warrant and one Series C-2 Common Warrant, for a combined purchase price of $ 1.83 (less $ 0.0001 for each June 2024 Pre-Funded Warrant).

The June 2024 Pre-Funded Warrants are exercisable for one share of Common Stock at a price per share of $ 0.0001 , are exercisable immediately and expire when exercised in full.

Each Series C Common Warrant is exercisable into one share of Common Stock at a price per share of $ 1.83 and are exercisable beginning on the effective date of the Warrant Stockholder Approval.

The Series C-1 Common Warrants will expire on the five-year anniversary of the Warrant Stockholder Approval.

The Series C-2 Common Warrants will expire on the 18 -month anniversary of the Warrant Stockholder Approval.

Each Series C-1 Common Warrant is exercisable into one share of Common Stock at a price per share of 1.83 for a five-year period beginning after September 6, 2024.

Each Series C-2 Common Warrant is exercisable into one share of Common Stock at a price per share of 1.83 for an 18 -month period beginning after September 6, 2024.

The June 2024 Pre-Funded Warrants and the Series C Common Warrants were classified as equity and the allocated fair value of $ 2,908 is included in additional paid in capital.

Pursuant to an engagement agreement (the Engagement Agreement) with Wainwright, the Company, in connection with the June 2024 Offering, agreed to issue to Wainwright, or its designees, warrants to purchase up to an aggregate of 153,006 shares of Common Stock (the Placement Agent Warrants).

The Placement Agent Warrants have an exercise price of $ 2.2875 per share, will expire on June 26, 2029 and are exercisable following the Warrant Stockholder Approval.

Pursuant to an engagement agreement (the Engagement Agreement) with Wainwright, the Company, in connection with the June 2024 Offering, issued to Wainwright, or its designees, warrants to purchase up to an aggregate of 153,006 shares of Common Stock (the Placement Agent Warrants).

The Placement Agent Warrants have an exercise price of $ 2.2875 per share, will expire on June 26, 2029 and are exercisable beginning after September 6, 2024.

The Placement Agent Warrants were classified as equity and the fair value of $ 229 is included in additional paid in capital.

5 unchanged sentences

Risk-free interest rate 4.92 %

As of June 30, 2024, the Company had the following warrants outstanding to purchase Common Stock.

As of September 30, 2024, the Company had the following warrants outstanding to purchase Common Stock.

Number of Shares Exercise Price per Share Expiration Date

2,125,793 $ 0.00 Do not expire

384,605 $ 14.30 August 2025

8,950 $ 1,117.48 December 2025

35 $ 27,300.00 February 2026

2,185,793 $ 1.83 March 2026

271 $ 2,561.65 May 2027

3 unchanged sentences

153,006 $ 2.29 June 2029

2,185,793 $ 1.83 18 months after the Warrant Stockholder Approval

2,185,793 $ 1.83 60 months after the Warrant Stockholder Approval

2,185,793 $ 1.83 September 2029

STOCK-BASED COMPENSATION

2 unchanged sentences

Upon completion of the Merger, the Company assumed the GRI Operations Plan and 982 outstanding and unexercised options issued thereunder, and ceased granting awards under the GRI Operations Plan.

As of June 30, 2024, no options remain outstanding under the GRI Operations Plan.

As of September 30, 2024, no options remain outstanding under the GRI Operations Plan.

Amended and Restated 2018 Equity Incentive Plan

6 unchanged sentences

Stock options granted by the Company under the A&R 2018 Plan generally have a contractual life of up to 10 years.

As of June 30, 2024, awards granted under the A&R 2018 Plan representing the right to purchase or contingent right to receive up to an aggregate of 2,503 shares of the Company's Common Stock were outstanding and 4,367 shares of the Company’s Common Stock were reserved for issuance under the A&R 2018 Plan.

As of September 30, 2024, awards granted under the A&R 2018 Plan representing the right to purchase or contingent right to receive up to an aggregate of 2,503 shares of the Company's Common Stock were outstanding and 4,367 shares of the Company’s Common Stock were reserved for issuance under the A&R 2018 Plan.

The number of shares reserved for issuance under the A&R 2018 Plan may be increased pursuant to the A&R 2018 Plan’s “evergreen” provision on the first day of each calendar year beginning January 1, 2024 and ending on and including January 1, 2033, by a number of shares not to exceed 4 % of the aggregate number of shares of the Company’s Common Stock outstanding on the final day of the immediately preceding calendar year.

The Company recorded stock-based compensation related to equity-based awards issued under the GRI Operations Plan and the A&R 2018 Plan in the following expense categories of its accompanying consolidated statements of operations for the three and six months ended June 30, 2024 and 2023:

For the Three Months Ended June 30, For the Six Months Ended June 30,

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2024 2023 2024 2023

6 unchanged sentences

The Company records expense for performance-based awards if the Company concludes that it is probable that the performance condition will be achieved.

The table below represents the activity of stock options granted to employees and non-employees for the six months ended June 30, 2024:

The table below represents the activity of stock options granted to employees and non-employees for the nine months ended September 30, 2024:

Number of options Weighted average exercise price Weighted average remaining contractual term (years)

Outstanding at December 31, 2023 2,503 $ 471.45 9.55

Exercised — —

Forfeited/Cancelled — —

Outstanding at June 30, 2024 2,503 $ 471.45 9.06

Exercisable at June 30, 2024 456 $ 1,655.14 8.56

Vested and expected to vest at June 30, 2024 2,503 $ 471.45 9.06

As of June 30, 2024, all of the outstanding and exercisable stock options were out of the money and therefore had no intrinsic value.

At June 30, 2024, the unrecognized compensation cost related to unvested stock options expected to vest was $ 313 .

Outstanding at September 30, 2024 2,503 $ 471.45 8.81

Exercisable at September 30, 2024 932 $ 913.87 8.62

Vested and expected to vest at September 30, 2024 2,503 $ 471.45 8.81

As of September 30, 2024, all of the outstanding and exercisable stock options were out of the money and therefore had no intrinsic value.

As of September 30, 2024, the unrecognized compensation cost related to unvested stock options expected to vest was $ 276 .

This unrecognized compensation is expected to be recognized over a weighted-average amortization period of 2.21 years.

No equity-based awards were granted during each of the three-month periods ended June 30, 2024 and 2023.

The Company granted 2,427 stock options to employees and non-employees during the nine months ended September 30, 2023.

The Black-Scholes option-pricing model was used to estimate the grant date fair value of each stock option grant at the time of grant using the following weighted-average assumptions:

For the Nine Months Ended September 30,

Volatility 129.54 %

Expected term in years 5.84

Dividend rate 0.00 %

Risk-free interest rate 4.34 %

Fair value of option on grant date $ 194.30

No equity-based awards were granted during the nine-month period ended September 30, 2024.

COMMITMENTS AND CONTINGENCIES

8 unchanged sentences

Baker also received a lump sum payment equal to 150 % of his target bonus and agreed to reduce amounts payable with respect to certain future milestone payments.

SUBSEQUENT EVENTS

On October 21, 2024, the Company entered into letter agreements (the Repricing Letter Agreements) with holders (the Holders) of its issued and outstanding Series B-1 Warrants and Series B-2 Warrants (the Prior Warrants) to purchase an aggregate of 762,236 shares of its Common Stock, offering the Holders the opportunity to exercise all of their Prior Warrants for cash at a reduced exercise price equal to $ 1.00 per share.

In addition, the Holders received new unregistered Series D-1 Warrants (the Series D-1 Warrants) exercisable for up to an aggregate of 762,236 shares of Common Stock and new unregistered Series D-2 Warrants (the Series D-2 Warrants and, together with the Series D-1 Warrants, the Series D Warrants) exercisable for up to an aggregate of 762,236 shares of Common Stock.

The Series D Warrants are immediately exercisable and have an exercise price of $ 1.00 per share.

The Series D-1 Warrants have a term of exercise equal to five years from October 22, 2024, and the Series D-2 Warrants have a term of exercise equal to 18 months from October 22, 2024.

Wainwright acted as the exclusive placement agent for the offering pursuant to an engagement agreement between the Company and Wainwright dated as of October 21, 2024.

As compensation for such placement agent services, the Company has agreed to pay Wainwright an aggregate cash fee equal to 7.0 % of the gross proceeds received by the Company from the offering, plus a management fee equal to 1.0 % of the gross proceeds received by the Company from the offering, and reimbursement for accountable expenses of $ 25,000 and non-accountable expenses of $ 10,000 .

The Company has also issued to Wainwright or its designees warrants to purchase up to an aggregate of 53,357 shares of Common Stock (the PA Warrants).

The PA Warrants are immediately exercisable, have a term of five years from October 22, 2024, and have an exercise price of $ 1.25 per share.

The gross proceeds to the Company from the exercise of the Prior Warrants were $ 762 prior to deducting placement agent fees and offering expenses.

The issuance under the Repricing Letter Agreements represented $ 1,171 in additional value provided to the investors, which was recorded as a deemed dividend to common stockholders.

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