Immix Biopharma, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS. Immix Biopharma, Inc. Condensed Consolidated Balance Sheets September 30, 2023 December 31, 2022 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 19,582,425 $ 13,436,714 Tax receivable 652,482 255,705 Prepaid expenses and other current assets 2,096,600 1,205,398 Total current assets 22,331,507 14,897,817 Other assets 103,191 6,724 Equipment, net 40,080 3,560 Total assets $ 22,474,778 $ 14,908,101 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued expenses $ 2,825,504 $ 1,273,296 Total current liabilities 2,825,504 1,273,296 Funds held for subsidiary private offering - 475,000 Total liabilities 2,825,504 1,748,296 Commitments and contingencies - - Stockholders’ equity: Preferred stock, $ 0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding - - Common stock, $ 0.0001 par value; 200,000,000 shares authorized; 19,681,091 shares issued and 19,608,728 shares outstanding at September 30, 2023 and 13,964,485 shares issued and 13,892,122 shares outstanding at December 31, 2022 1,968 1,397 Additional paid-in capital 68,146,992 51,156,597 Accumulated other comprehensive income 46,735 87,021 Accumulated deficit ( 48,321,791 ) ( 37,985,247 ) Treasury stock at cost, 72,363 shares as of September 30, 2023 and December 31, 2022 ( 99,963 ) ( 99,963 ) Total Immix Biopharma, Inc. stockholders’ equity 19,773,941 13,159,805 Non-controlling interests ( 124,667 ) - Total stockholders’ equity 19,649,274 13,159,805 Total liabilities and stockholders’ equity $ 22,474,778 $ 14,908,101 See accompanying notes to the unaudited condensed consolidated financial statements. 5 Immix Biopharma, Inc. Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) 2023 2022 2023 2022 For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Operating expenses: General and administrative expenses $ 2,417,776 $ 837,441 $ 5,130,977 $ 2,491,151 Research and development 2,106,020 695,937 5,634,284 1,933,219 Total operating expenses 4,523,796 1,533,378 10,765,261 4,424,370 Loss from operations ( 4,523,796 ) ( 1,533,378 ) ( 10,765,261 ) ( 4,424,370 ) Other income (expense): Interest income 186,691 - 343,431 - Interest expense - - - ( 497 ) Total other income (expense), net 186,691 - 343,431 ( 497 ) Loss before provision for income taxes ( 4,337,105 ) ( 1,533,378 ) ( 10,421,830 ) ( 4,424,867 ) Provision for income taxes 6,807 1,672 18,326 5,009 Net loss ( 4,343,912 ) ( 1,535,050 ) ( 10,440,156 ) ( 4,429,876 ) Net loss attributable to non-controlling interests 63,248 - 103,612 - Net loss attributable to Immix Biopharma, Inc. common stockholders ( 4,280,664 ) ( 1,535,050 ) ( 10,336,544 ) ( 4,429,876 ) Other comprehensive income (loss): Foreign currency translation ( 34,147 ) ( 40,389 ) ( 40,286 ) ( 63,353 ) Total other comprehensive loss ( 34,147 ) ( 40,389 ) ( 40,286 ) ( 63,353 ) Comprehensive loss ( 4,314,811 ) ( 1,575,439 ) ( 10,376,830 ) ( 4,493,229 ) Less: comprehensive loss attributable to non-controlling interests - - - - Comprehensive loss attributable to Immix Biopharma, Inc. common stockholders $ ( 4,314,811 ) $ ( 1,575,439 ) $ ( 10,376,830 ) $ ( 4,493,229 ) Loss per common share - basic and diluted $ ( 0.23 ) $ ( 0.11 ) $ ( 0.65 ) $ ( 0.32 ) Weighted average shares outstanding - basic and diluted 18,578,414 13,924,832 15,861,100 13,879,261 See accompanying notes to the unaudited condensed consolidated financial statements. 6 Immix Biopharma, Inc. Condensed Consolidated Statements of Stockholders’ Equity For the Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited) Common Additional Accumulated Other Treasury Non- Total Common Stock Paid-in Comprehensive Accumulated Treasury Stock Controlling Stockholders’ Shares Amount Capital Income Deficit Shares Amount Interests Equity Balance December 31, 2022 13,964,485 $ 1,397 $ 51,156,597 $ 87,021 $ ( 37,985,247 ) ( 72,363 ) $ ( 99,963 ) $ - $ 13,159,805 Shares issued under ATM facility for cash proceeds, net of offering costs 50,000 5 101,318 - - - - - 101,323 Nexcella shares issued for cash proceeds - - 650,000 - - - - - 650,000 Stock-based compensation 6,700 1 329,918 - - - - - 329,919 Non-controlling interests in subsidiary - - 13,990 - - - - ( 13,990 ) - Net loss - - - - ( 2,479,664 ) - - ( 18,368 ) ( 2,498,032 ) Foreign currency translation adjustment - - - ( 4,474 ) - - - - ( 4,474 ) Balance March 31, 2023 14,021,185 1,403 52,251,823 82,547 ( 40,464,911 ) ( 72,363 ) ( 99,963 ) ( 32,358 ) 11,738,541 Shares issued under ATM facility for cash proceeds, net of offering costs 2,213,868 221 4,584,032 - - - - - 4,584,253 Stock-based compensation 99,128 10 447,646 - - - - - 447,656 Non-controlling interests in subsidiary - - 2,416 - - - - ( 2,416 ) - Net loss - - - - ( 3,576,216 ) - - ( 21,996 ) ( 3,598,212 ) Foreign currency translation adjustment - - - ( 1,665 ) - - - - ( 1,665 ) Balance June 30, 2023 16,334,181 1,634 $ 57,285,917 80,882 ( 44,041,127 ) ( 72,363 ) ( 99,963 ) ( 56,770 ) 13,170,573 Shares issued under ATM facility for cash proceeds, net of offering costs 105,834 10 185,272 - - - - - 185,282 Shares and warrants issued under private placement for cash proceeds, net of offering costs 3,241,076 324 9,933,829 - - - - - 9,934,153 Stock-based compensation - - 737,325 - - - - - 737,325 Non-controlling interests in subsidiary - - 4,649 - - - - ( 4,649 ) - Net loss - - - - ( 4,280,664 ) - - ( 63,248 ) ( 4,343,912 ) Foreign currency translation adjustment - - - ( 34,147 ) - - - - ( 34,147 ) Balance September 30, 2023 19,681,091 $ 1,968 $ 68,146,992 $ 46,735 $ ( 48,321,791 ) ( 72,363 ) $ ( 99,963 ) $ ( 124,667 ) $ 19,649,274 Balance December 31, 2021 13,228,689 $ 1,323 $ 47,618,852 $ 125,408 $ ( 29,755,534 ) - $ - $ - $ 17,990,049 Shares issued for cash proceeds, net of offering costs 630,000 63 2,913,687 - - - - - 2,913,750 Stock-based compensation - - 65,074 - - - - - 65,074 Net loss - - - - ( 1,332,048 ) - - - ( 1,332,048 ) Foreign currency translation adjustment - - - 15,587 - - - - 15,587 Balance March 31, 2022 13,858,689 1,386 50,597,613 140,995 ( 31,087,582 ) - - - 19,652,412 Shares issued for cashless exercise of option 62,532 6 ( 6 ) - - - - - - Stock-based compensation - - 65,709 - - - - - 65,709 Shares issued for services 26,315 3 49,997 - - - - - 50,000 Repurchase of common shares - - - - - ( 37,418 ) ( 55,963 ) - ( 55,963 ) Net loss - - - - ( 1,562,778 ) - - - ( 1,562,778 ) Foreign currency translation adjustment - - - ( 38,551 ) - - - - ( 38,551 ) Balance June 30, 2022 13,947,536 $ 1,395 $ 50,713,313 $ 102,444 $ ( 32,650,360 ) ( 37,418 ) $ ( 55,963 ) $ - $ 18,110,829 Shares issued for services 16,949 2 49,998 - - - - - 50,000 Stock-based compensation - - 163,192 - - - - - 163,192 Net loss - - - - ( 1,535,050 ) - - - ( 1,535,050 ) Foreign currency translation adjustment - - - ( 40,389 ) - - - - ( 40,389 ) Balance September 30, 2022 13,964,485 $ 1,397 $ 50,926,503 $ 62,055 $ ( 34,185,410 ) ( 37,418 ) $ ( 55,963 ) $ - $ 16,748,582 See accompanying notes to the unaudited condensed consolidated financial statements. 7 Immix Biopharma, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) 2023 2022 For the Nine Months Ended September 30, 2023 2022 Operating Activities: Net loss $ ( 10,440,156 ) $ ( 4,429,876 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation 1,514,900 393,975 Depreciation 2,392 1,569 Changes in operating assets and liabilities: Tax receivable ( 427,476 ) ( 175,435 ) Prepaid expenses and other current assets ( 923,909 ) 207,544 Accounts payable and accrued expenses 1,580,248 506,945 Accrued interest - ( 9,099 ) Net cash used in operating activities ( 8,694,001 ) ( 3,504,377 ) Investing Activities: Purchase of equipment ( 38,912 ) - Net cash used in investing activities ( 38,912 ) - Financing Activities: Payments of deferred offering costs ( 234,617 ) - Proceeds from sale of common stock, net of offering costs 14,936,437 2,913,750 Proceeds from sale of Nexcella common stock 175,000 - Payments on note payable - ( 50,000 ) Repurchase of common stock - ( 55,963 ) Net cash provided by financing activities 14,876,820 2,807,787 Effect of foreign currency on cash 1,804 ( 31,367 ) Net change in cash and cash equivalents 6,145,711 ( 727,957 ) Cash and cash equivalents – beginning of period 13,436,714 17,644,478 Cash and cash equivalents – end of period $ 19,582,425 $ 16,916,521 Supplemental Disclosures of Cash Flow Information: Interest paid $ - $ 9,596 Income taxes paid $ 18,326 $ - Supplemental Disclosures of Noncash Financing Information: Nexcella shares issued for funds previously received $ 475,000 $ - Deferred offering costs charged against proceeds from sale of common stock $ 131,426 $ - Common stock issued for cashless exercise of stock options $ - $ 6 See accompanying notes to the unaudited condensed consolidated financial statements. 8 Immix Biopharma, Inc. Notes to the Condensed Consolidated Financial Statements (Unaudited) Note 1 – Nature of Business Immix Biopharma, Inc. (the “Company”) is a clinical-stage biopharmaceutical pharmaceutical company organized as a Delaware corporation on January 7, 2014 which is focused on developing a novel class of Tissue-Specific Therapeutics in oncology and immune-dysregulated diseases. In August 2016, the Company established a wholly-owned Australian subsidiary, Immix Biopharma Australia Pty Ltd. (“IBAPL”), in order to conduct various preclinical and clinical activities for its development candidates. In November 2022, the Company established a majority-owned subsidiary, Nexcella, Inc. (“Nexcella”), which is a clinical-stage biopharmaceutical company engaged in the discovery and development of novel cell therapies for hematologic malignancies (blood cancers), oncology and other indications. Note 2 – Summary of Significant Accounting Policies Basis of Presentation - The accompanying condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). The Company’s fiscal year end is December 31. The condensed consolidated financial statements and related disclosures as of September 30, 2023 and for the three and nine months ended September 30, 2023 and 2022 are unaudited, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. In the Company’s opinion, these unaudited condensed consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for the fair statement of the results for the interim periods. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements of the Company for the years ended December 31, 2022 and 2021 which are included in the Company’s Annual Report on Form 10-K filed with the SEC on March 27, 2023. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023. Risk and Uncertainties - The Company operates in a dynamic and highly competitive industry and is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, contract manufacturers and contract research organizations, compliance with government regulations and the need to obtain additional financing to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical studies and clinical trials and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance and reporting. The Company believes that changes in any of the following areas could have a material adverse effect on the Company’s future financial position, results of operations, or cash flows; ability to obtain future financing; advances and trends in new technologies and industry standards; results of clinical trials; regulatory approval and market acceptance of the Company’s products; development of sales channels; certain strategic relationships; litigation or claims against the Company based on intellectual property, patent, product, regulatory, or other factors; and the Company’s ability to attract and retain employees necessary to support its growth. Products developed by the Company require approvals from the U.S. Food and Drug Administration (“FDA”) or other international regulatory agencies prior to commercial sales. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained or maintained, that the products will receive the necessary approvals, or that any approved products will be commercially viable. If the Company is denied approval, approval is delayed, or the Company is unable to maintain approval, it could have a material adverse impact on the Company. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from other pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees, consultants and other third parties. 9 The Company has expended and plans to continue to expend substantial funds to complete the research, development and clinical testing of product candidates. The Company also will be required to expend additional funds to establish commercial-scale manufacturing arrangements and to provide for the marketing and distribution of products that receive regulatory approval. The Company may require additional funds to commercialize its products. The Company is unable to entirely fund these efforts with its current financial resources and will need to raise additional funding in the future. If adequate funds are unavailable on a timely basis from operations or additional sources of financing, the Company may have to delay, reduce the scope of or eliminate one or more of its research or development programs which may materially and adversely affect its business, financial condition and operations. Use of Estimates – The preparation of these condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company uses significant judgments when making estimates related to the valuation of deferred tax assets and related valuation allowances, accrual and prepayment of research and development expenses, and the valuation of stock-based compensation. Actual results could differ from those estimates. Principles of Consolidation – The accompanying condensed consolidated financial statements include the accounts of Immix Biopharma, Inc., the accounts of its 100 % owned subsidiary, IBAPL, and the accounts of its majority-owned subsidiary, Nexcella. All intercompany transactions and balances have been eliminated in consolidation. For consolidated entities where the Company owns less than 100 % of the subsidiary, the Company records net loss attributable to non-controlling interests in its condensed consolidated statements of operations and comprehensive loss equal to the percentage of the economic or ownership interest retained in such entities by the respective non-controlling parties. Liquidity and Going Concern – These condensed consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain financing to continue operations. In December 2021, the Company received $ 18,648,934 in net proceeds from the initial public offering (“IPO”) of its common stock. In January 2022, the Company raised additional net proceeds of $ 2,913,750 from the exercise of the underwriter’s over-allotment option in connection with the Company’s IPO. On March 22, 2023, the Company entered into an ATM Sales Agreement (the “March Sales Agreement”) with ThinkEquity LLC (the “Sales Agent”), pursuant to which the Company, issued and sold through the Sales Agent, approximately $ 5 million of shares of the Company’s common stock in sales deemed to be “at-the-market offerings” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended (the “March ATM Facility”) (see Note 6). As of June 15, 2023, the Company completed the equity raise pursuant to the March Sales Agreement and received net proceeds of $ 4,685,576 under the March ATM Facility. On July 14, 2023, the Company entered into an additional ATM Sales Agreement (the “July Sales Agreement”) with the Sales Agent, pursuant to which the Company, may, from time to time, issue and sell through the Sales Agent shares of the Company’s common stock in sales deemed to be “at-the-market offerings” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended (the “July ATM Facility”) (see Note 6). Initially, the Company is eligible to sell up to $ 4,200,000 worth of shares of its common stock as t he aggregate market value of the Company’s shares of common stock eligible for sale under the July Sales Agreement is subject to the limitations of General Instruction I.B.6 of Form S-3 until such time that the Company’s public float equals or exceeds $ 75.0 million. In the event the aggregate market value of the Company’s outstanding common stock held by non-affiliates equals or exceeds $ 75.0 million, then the one-third limitation on sales set forth in General Instruction I.B.6 of Form S-3 shall not apply to additional sales made pursuant to the July Sales Agreement . In August 2023, the Company sold (i) 3,241,076 shares of the Company’s common stock, par value $ 0.0001 , and (ii) Pre-Funded warrants to purchase 1,913,661 shares of common stock (the “Pre-Funded Warrants”). The Company received gross proceeds of $ 10 million from the private placement and net proceeds of approximately $ 9.93 million, after deducting fees and expenses paid by the Company (the “August 2023 Private Placement”) (see Note 6). As of November 9, 2023, the Company has sold 210,834 common shares pursuant to the July ATM Facility for net proceeds of $ 586,193 . 10 The Company has a history of, and expects to continue to report, negative cash flows from operations and a net loss. While the Company’s estimates of its operating expenses and working capital requirements could be incorrect and the Company may use its cash resources faster than it anticipates, management believes that its cash and cash equivalents on hand at September 30, 2023, and funds that may be raised from the July ATM Facility, will be sufficient to meet the Company’s working capital requirements through at least November 9, 2024. Concentration of Credit Risk – Periodically, the Company may carry cash and cash equivalents balances at financial institutions in excess of the federally insured limit of $ 250,000 , or the Australian insured limit of AUD 250,000 . At times, deposits held with financial institutions may exceed the amount of insurance provided. The Company has not experienced losses on these accounts and management believes that the credit risk with regard to these deposits is not significant. Cash and Cash Equivalents – The Company’s cash equivalents include short-term highly liquid investments with an original maturity of 90 days or less when purchased and are carried at fair value. Fair Value of Financial Instruments – The carrying value of short-term instruments, including cash and cash equivalents, tax receivable, accounts payable and accrued expenses, approximate fair value due to the relatively short period to maturity for these instruments. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a three-level valuation hierarchy for disclosures of fair value measurements, defined as follows: Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value. The following fair value hierarchy table presents information about the Company’s asset measured at fair value on a recurring basis: Schedule of Asset Measured at Fair Value on a Recurring Basis Level 1 Level 2 Level 3 Fair Value Measurements at September 30, 2023 Level 1 Level 2 Level 3 Assets: Cash equivalents (money market funds) $ 18,834,431 $ - $ - As of September 30, 2023, the Company had no liabilities required to be measured at fair value on a recurring basis. As of December 31, 2022, the Company had no assets or liabilities required to be measured at fair value on a recurring basis. Australian Tax Incentive – IBAPL is eligible to receive a cash refund from the Australian Taxation Office for eligible research and development (“R&D”) expenditures under the Australian R&D Tax Incentive Program (the “Australian Tax Incentive”). The Australian Tax Incentive is recognized as a reduction to R&D expense when there is reasonable assurance that the relevant expenditure has been incurred, the amount can be reliably measured and that the Australian Tax Incentive will be received. The Company recognized reductions to R&D expense of $ 378,390 and $ 30,001 for the three months ended September 30, 2023 and 2022, respectively. The Company recognized reductions to R&D expense of $ 599,926 and $ 176,178 for the nine months ended September 30, 2023 and 2022, respectively. 11 Deferred Offering Costs – The Company has capitalized qualified legal, accounting and other direct costs related to its efforts to raise capital through the sale of its common stock under the July ATM Facility. Deferred offering costs will be deferred and amortized ratably upon sales under the July ATM Facility, and upon completion, they will be reclassified to additional paid-in capital as a reduction of the July ATM proceeds. If the Company terminates the July ATM Facility or there is a significant delay, all of the deferred offering costs will be immediately written off to operating expenses. As of September 30, 2023, $ 103,191 of deferred offering costs were capitalized related to the July ATM Facility, which are included in other assets in the accompanying condensed consolidated balance sheet. Stock-Based Compensation – Stock-based compensation expense represents the estimated grant date fair value of the Company’s equity awards, consisting of stock options issued under the Company’s stock option plan and restricted common stock (see Note 6). The fair value of equity awards is recognized over the requisite service period of such awards (usually the vesting period) on a straight-line basis. The Company estimates the fair value of stock options using the Black-Scholes option pricing model on the date of grant and recognizes forfeitures as they occur. For stock awards for which vesting is subject to performance-based milestones, the expense is recorded over the remaining service period after the point when the achievement of the milestone is probable, or the performance condition has been achieved. Research and Development Costs – R&D costs are expensed as incurred. R&D costs consist primarily of clinical research fees paid to consultants and outside service providers, other expenses relating to design, development and testing of the Company’s therapy candidates, and for license and milestone costs related to in-licensed products and technology. Costs incurred in obtaining technology licenses are charged to R&D expense if the technology licensed has not reached commercial feasibility and has no alternative future use. Such licenses purchased by the Company require substantial completion of research and development, regulatory and marketing approval efforts in order to reach commercial feasibility and have no alternative future use. Clinical trial costs are a component of R&D expenses. The Company estimates expenses incurred for clinical trials that are in process based on services performed under contractual agreements with clinical research organizations and actual clinical investigators. Included in the estimates are (1) the fee per patient enrolled as specified in the clinical trial contract with each institution participating in the clinical trial and (2) progressive data on patient enrollments obtained from participating clinical trial sites and the actual services performed. Changes in clinical trial assumptions, such as the length of time estimated to enroll all patients, rate of screening failures, patient drop-out rates, number and nature of adverse event reports, and the total number of patients enrolled can impact the average and expected cost per patient and the overall cost of the clinical trial. The Company monitors the progress of the trials and their related activities and adjusts expense accruals, when applicable. Adjustments to accruals are charged to expense in the period in which the facts give rise to the adjustments become known. Other Comprehensive Income (Loss) – Other comprehensive income (loss) includes foreign currency translation gains and losses. The cumulative amount of translation gains and losses are reflected as a separate component of stockholders’ equity in the condensed consolidated balance sheets, as accumulated other comprehensive income. Foreign Currency Translation and Transaction Gains (Losses) – The Company , and its majority-owned subsidiary Nexcella, maintain their accounting records in U.S. Dollars. The Company’s operating subsidiary, IBAPL, is located in Australia and maintains its accounting records in Australian Dollars, which is its functional currency. Assets and liabilities of the subsidiary are translated into U.S. dollars at exchange rates at the balance sheet date, equity accounts are translated at historical exchange rate and revenues and expenses are translated by using the average exchange rates for the period. Translation adjustments are reported as a separate component of other comprehensive income (loss) in the consolidated statements of operations and comprehensive loss. Foreign currency denominated transactions are translated at exchange rates approximating those in effect at the transaction dates. Gains (losses) resulting from foreign currency transactions are included in general and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive loss and were $ 8,095 and $ 1,891 for the three months ended September 30, 2023 and 2022, respectively, and $ 6,372 and $ 5,982 for the nine months ended September 30, 2023 and 2022, respectively. 12 Loss Per Common Share - Basic loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. Basic weighted average shares outstanding for the three and nine months ended September 30, 2023 include 1,913,661 shares underlying Pre-Funded warrants to purchase common shares. As the shares underlying these Pre-Funded warrants can be issued for little consideration (an exercise price per share equal to $ 0.0001 per share), these shares are deemed to be issued for purposes of basic loss per common share As of September 30, 2023 and 2022, the Company’s potentially dilutive shares, which were not included in the calculation of net loss per share, included stock options and warrants exercisable for 2,911,412 and 2,168,742 shares of common stock, respectively. Reclassifications Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation. These reclassifications had no effect on our previously reported results of operations or accumulated deficit. Recent Accounting Pronouncements The Company does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying condensed consolidated financial statements. Note 3 – Agreements with Nexcella Subsidiary Founders Agreement Effective December 8, 2022, the Company entered into a Founders Agreement with Nexcella (the “Nexcella Founders Agreement”). The Nexcella Founders Agreement provides that prior to a Qualified IPO (as defined in Nexcella’s Amended and Restated Certificate of Incorporation, as amended (the “Nexcella COI”)) or Qualified Change in Control (as defined in the Nexcella COI), the Company shall provide funds to Nexcella as requested by Nexcella, in good faith, to be evidenced by a senior unsecured promissory note. In exchange for the time and capital expended in the formation of Nexcella and the identification of specific assets, the acquisition of which benefit Nexcella, on December 21, 2022, the Company loaned Nexcella approximately $ 2.1 million, evidenced by a senior unsecured promissory note, representing the up-front fee required to acquire Nexcella’s license agreement with Hadasit Medica Research Services & Development, Ltd. (“HADASIT”) and BIRAD Research and Development Company Ltd. (“BIRAD”), and for use as working capital for its research and development activities. The note, which matures on January 31, 2030 , accrues interest at a rate of 7.875 % per annum and is convertible into shares of common stock of Nexcella at a conversion price of $ 2.00 per share, subject to adjustment; provided, however, that such note shall automatically convert into shares of Nexcella common stock immediately prior to certain conversion triggers set forth in the note. Nexcella may not prepay the note without the Company’s prior written consent. The Nexcella Founders Agreement has a term of 15 years, which, upon expiration, automatically renews for successive one-year periods unless terminated by the Company upon notice at least six months prior to the end of the term or upon the occurrence of a Change of Control (as defined in the Nexcella Founders Agreement). In connection with the Nexcella Founders Agreement, the Company was issued 250,000 shares of Nexcella’s Class A Preferred Stock, 1,000,000 shares of Nexcella’s Class A Common Stock, and 5,000,000 shares of Nexcella’s common stock. The Class A Preferred Stock is identical to the common stock other than as to conversion rights, the PIK Dividend right (as defined below) and voting rights. Each share of Class A Preferred Stock is convertible, at the Company’s option, into one fully paid and nonassessable share of Nexcella’s common stock, subject to certain adjustments. As a holder of Nexcella’s Class A Preferred Stock, the Company will receive on each March 13 (each a “PIK Dividend Payment Date”) until the date all outstanding Class A Preferred Stock is converted into Nexcella’s common stock or redeemed (and the purchase price is paid in full), pro rata per share dividends paid in additional fully paid and nonassessable shares of Nexcella common stock (“PIK Dividends”) such that the aggregate number of shares of common stock issued pursuant to such PIK Dividend is equal to 2.5 % of Nexcella’s fully-diluted outstanding capitalization on the date that is one business day prior to any PIK Dividend Payment Date. In addition, as a holder of Class A Preferred Stock, the Company will be entitled to cast for each share of Class A Preferred Stock held as of the record date for determining stockholders entitled to vote on matters presented to the stockholders of Nexcella, the number of votes that is equal to 1.1 times a fraction, the numerator of which is the sum of (A) the shares of outstanding Nexcella common stock and (B) the whole shares of Nexcella common stock into which the shares of outstanding Nexcella Class A Common Stock and the Class A Preferred Stock are convertible and the denominator of which is the number of shares of outstanding Nexcella Class A Preferred Stock. 13 Each share of Class A Common Stock is convertible, at the Company’s option, into one fully paid and nonassessable share of Nexcella’s common stock, subject to certain adjustments. In addition, upon a Qualified IPO (as defined in the Nexcella COI) or Qualified Change in Control (as defined in the Nexcella COI), each share of Class A Common Stock will automatically convert into one fully paid and nonassessable share of Nexcella’s common stock; provided however, if at that time, the Class A Common Stock is not then convertible into a number of shares of Nexcella common stock (or such other capital stock or securities at the time issuable upon the conversion of the Class A Common Stock) that have a value of: (a) in the case of a Qualified IPO, at least $5,000,000 based on the initial offering price in such initial public offering, or (b) in the case of a Qualified Change in Control, at least $5,000,000 in cash or at least $5,000,000 of equity based on the implied value of a share of Nexcella common stock resulting from the price paid upon the consummation of such Qualified Change of Control, the Class A Common Stock will automatically convert into such number of shares of Nexcella common stock (or such other capital stock or securities at the time issuable upon the conversion of the Class A Common Stock) that have a value of $5,000,000 based on the initial offering price in such initial public offering or the implied value of a share of Nexcella common stock resulting from the price paid upon the consummation of such Qualified Change of Control (or if such Qualified Change of Control results in the Class A Shares being exchanged solely for cash, then $5,000,000 in cash). The Company is entitled to cast such number of votes equal to the number of whole shares of Nexcella common stock into which the Company’s Class A Common Stock is convertible as of the record date for determining stockholders entitled to vote on matters presented to the stockholders of Nexcella. In addition to the foregoing, the Company is entitled to one vote for each share of Nexcella common stock held by it. Except as provided by law or by the Nexcella COI, holders of Nexcella Class A Common Stock and Class A Preferred Stock shall vote together with the holders of Nexcella common stock, as a single class. As additional consideration under the Nexcella Founders Agreement, Nexcella will also: (i) pay an equity fee in shares of common stock, payable within five business days of the closing of any equity or debt financing for Nexcella or any of its respective subsidiaries that occurs after the effective date of the Nexcella Founders Agreement and ending on the date when the Company no longer has majority voting control in Nexcella’s voting equity, equal to 2.5% of the gross amount of any such equity or debt financing; and (ii) pay a cash fee equal to 4.5% of Nexcella’s annual Net Sales (as defined in the Nexcella Founders Agreement), payable on an annual basis, within 90 days of the end of each calendar year. In the event of a Change of Control, Nexcella will pay a one-time change in control fee equal to five times the product of (A) Net Sales for the 12 months immediately preceding the Change of Control and (B) 4.5%. Management Services Agreement Effective as of December 8, 2022, the Company entered into a Management Services Agreement (the “Nexcella MSA”) with Nexcella. Pursuant to the terms of the Nexcella MSA, the Company will render management, advisory and consulting services to Nexcella. Services provided under the Nexcella MSA may include, without limitation, (i) advice and assistance concerning any and all aspects of Nexcella’s operations, clinical trials, financial planning and strategic transactions and financings and (ii) conducting relations on behalf of Nexcella with accountants, attorneys, financial advisors and other professionals (collectively, the “Services”). At the request of the Company, Nexcella will utilize clinical research services, medical education, communication and marketing services and investor relations/public relation services of companies or individuals designated by the Company, provided those services are offered at market prices. In consideration for the Services, Nexcella will pay the Company an annual base management and consulting fee of $ 500,000 (the “Annual Consulting Fee”), payable in advance in equal quarterly installments on the first business day of each calendar quarter in each year; provided, however, that such Annual Consulting Fee will be increased to $ 1.0 million for each calendar year in which Nexcella has Net Assets (as defined in the Nexcella MSA) in excess of $ 100 million at the beginning of the calendar year. Notwithstanding the foregoing, the first Annual Consulting Fee payment is not due until first business day of the calendar quarter immediately following the completion of the first equity financing for Nexcella that is in excess of $ 10 million in gross proceeds, which hasn’t yet occurred. The first payment will include all amounts in arrears from the effective date of the Nexcella MSA through such payment as well as the amounts in advance for such first quarterly payment. Actual and direct out-of-pocket expenses reasonably incurred by the Company in performing the Services are required to be reimbursed to the Company by Nexcella. The Nexcella MSA continues for a period of five years from the effective date thereof and shall be automatically extended for additional five year periods unless the Company and Nexcella provide written notice to not extend the term at least 90 days prior to the end of the term, unless the Nexcella MSA is terminated earlier by mutual agreement of the Company and Nexcella. 14 Note 4 – Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following as of September 30, 2023 and December 31, 2022: Schedule of Prepaid Expenses and Other Current Assets September 30, 2023 December 31, 2022 Prepaid research and development expenses $ 1,652,833 $ 792,130 Prepaid insurance expense 89,500 323,296 Prepaid public company compliance expense 25,275 - Prepaid investor relations expense 161,993 11,905 Other current assets 166,999 78,067 Total prepaid expenses and other current assets $ 2,096,600 $ 1,205,398 Note 5 – Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consist of the following as of September 30, 2023 and December 31, 2022: Schedule of Accounts Payable and Accrued Expenses September 30, 2023 December 31, 2022 Accounts payable $ 1,566,006 $ 143,074 Accrued research and development expenses 748,162 57,500 Accrued professional services 283,255 81,691 Accrued compensation and related expenses 128,478 552,835 Other accrued expenses 99,603 438,196 Total accounts payable and accrued expenses $ 2,825,504 $ 1,273,296 Note 6 – Stockholders’ Equity The Company has authorized 200,000,000 shares of common stock and 10,000,000 shares of preferred stock each with a par value of $ 0.0001 per share. March ATM Sales Agreement On March 22, 2023, the Company entered into the March Sales Agreement with the Sales Agent pursuant to which the Company could offer and sell, from time to time, through the Sales Agent, shares (the “March Shares”) of the Company’s common stock, par value $ 0.0001 per share, having an aggregate offering price of up to $ 5,000,000 , subject to the terms and conditions set forth in the March Sales Agreement. The March Shares were offered and sold pursuant to the Company’s prospectus supplement, dated March 22, 2023, filed by the Company with the SEC on March 22, 2023, including the accompanying base prospectus forming a part of the Company’s Registration Statement on Form S-3 (File No. 333-269100) filed by the Company with the SEC on January 3, 2023 and declared effective by the SEC on January 11, 2023. The aggregate market value of March Shares eligible for sale under the Sales Agreement was subject to the limitations of General Instruction I.B.6 of Form S-3. Under the March Sales Agreement, the Sales Agent sold the March Shares in sales deemed to be “at-the-market offerings” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), including sales made directly on or through The Nasdaq Capital Market, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, and/or any other method permitted by law. The Company could instruct the Sales Agent not to sell any March Shares if the sales could not be effected at or above the price designated by the Company from time to time. The Company paid the Sales Agent a fixed commission rate of 3.75 % of the aggregate gross proceeds from the sale of the March Shares pursuant to the March Sales Agreement. In addition, the Company paid an expense deposit of $ 15,000 to the Sales Agent, which was applied against the actual out-of-pocket accountable expenses that were paid by the Company to the Sales Agent in connection with the offering. The Company reimbursed the Sales Agent for all expenses related to the offering including, without limitation, the fees and expenses of the Sales Agent’s legal counsel up to $ 50,000 and reimbursed the Sales Agent, upon request, for such costs, fees and expenses in an amount not to exceed $ 7,500 on a quarterly basis for the first three fiscal quarters of each year and $ 10,000 for the fiscal fourth quarter of each year. Furthermore, the Company provided indemnification and contribution to the Sales Agent with respect to certain liabilities, including liabilities under the Securities Act. During the nine months ended September 30, 2023, the Company sold 2,263,868 March Shares pursuant to the March ATM Facility for net cash proceeds of $ 4,811,393 , after deducting commissions. In addition, the Company amortized $ 125,817 of deferred offering costs for fees paid related to the March ATM Facility. July ATM Sales Agreement On July 14, 2023, the Company entered into the July Sales Agreement with the Sales Agent pursuant to which the Company may offer and sell, from time to time, through the Sales Agent, shares (the “July Shares”) of the Company’s common stock, par value $ 0.0001 per share, subject to the terms and conditions set forth in the Sales Agreement. Initially, the Company is eligible to sell up to $ 4,200,000 worth of shares of its common stock as t he aggregate market value of the Company’s shares of common stock eligible for sale under the July Sales Agreement is subject to the limitations of General Instruction I.B.6 of Form S-3 until such time that the Company’s public float equals or exceeds $ 75.0 million. In the event the aggregate market value of the Company’s outstanding common stock held by non-affiliates equals or exceeds $ 75.0 million, then the one-third limitation on sales set forth in General Instruction I.B.6 of Form S-3 shall not apply to additional sales made pursuant to the July Sales Agreement . The July Shares will be offered and sold pursuant to the Company’s prospectus supplement, dated July 14, 2023, filed by the Company with the SEC on July 14, 2023, including the accompanying base prospectus forming a part of the Company’s Registration Statement on Form S-3 (File No. 333-269100) filed by the Company with the SEC on January 3, 2023 and declared effective by the SEC on January 11, 2023. 15 Under the July Sales Agreement, the Sales Agent may sell the July Shares in sales deemed to be “at-the-market offerings” as defined in Rule 415(a)(4) promulgated under the Securities Act, including sales made directly on or through The Nasdaq Capital Market or any other existing trading market for the Company’s common stock, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, and/or any other method permitted by law. The Company may instruct the Sales Agent not to sell any July Shares if the sales cannot be effected at or above the price designated by the Company from time to time. The Company will pay the Sales Agent a fixed commission rate of 3.75 % of the aggregate gross proceeds from the sale of the July Shares pursuant to the Sales Agreement. The Company has paid an expense deposit of $ 15,000 to the Sales Agent, which will be applied against the actual out-of-pocket accountable expenses that will be paid by the Company to the Sales Agent in connection with the offering. The Company has agreed to reimburse the Sales Agent for all expenses related to the offering including, without limitation, the fees and expenses of the Sales Agent’s legal counsel up to $ 50,000 , and shall reimburse the Sales Agent, upon request, for such costs, fees and expenses in an amount not to exceed $ 7,500 on a quarterly basis for the first three fiscal quarters of each year and $ 10,000 for the fiscal fourth quarter of each year. The Company has also agreed to provide indemnification and contribution to the Sales Agent with respect to certain liabilities, including liabilities under the Securities Act. During the nine months ended September 30, 2023, the Company sold 105,834 July Shares pursuant to the July ATM Facility for net cash proceeds of $ 190,891 , after deducting commissions. In addition, the Company amortized $ 5,609 of deferred offering costs for fees paid related to the July ATM Facility. August 2023 Private Placement On August 21, 2023, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with a certain accredited investor (the “Purchaser”), pursuant to which the Company sold and issued to the Purchaser in a private placement transaction (the “Private Placement”) (i) 3,241,076 shares (the “Shares”) of the Company’s common stock, par value $ 0.0001 , and (ii) Pre-Funded warrants to purchase 1,913,661 shares of common stock (the “Pre-Funded Warrants”). The purchase price per share of common stock was $ 1.94 per share (the “Purchase Price”) and the purchase price for the Pre-Funded Warrants was the Purchase Price minus $ 0.0001 per Pre-Funded Warrant. The Company received gross proceeds of $ 10 million from the Private Placement and net proceeds of $ 9,934,153 , after deducting fees and expenses paid by the Company. The Company intends to use the proceeds of the August 2023 Private Placement for working capital and general corporate purposes. The Pre-Funded Warrants have a per share exercise price of $ 0.0001 , subject to proportional adjustments in the event of stock splits or combinations or similar events. The Pre-Funded Warrants will not expire until exercised in full. The Pre-Funded Warrants contain a “blocker” provision providing that a holder (together with its affiliates) may not exercise any portion of a warrant to the extent that the holder would own more than 19.99 % of the outstanding shares of common stock of the Company. The Securities Purchase Agreement contains customary representations and warranties and agreements of the Company and the Purchaser and customary indemnification rights and obligations of the parties. The Shares and Pre-Funded Warrants, and the common stock issuable upon the exercise of the Pre-Funded Warrants, have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and were offered pursuant to the exemption from registration provided in Section 4(a)(2) under the Securities Act. Pursuant to the Securities Purchase Agreement, the Company filed with the SEC a Registration Statement on Form S-3 (File No. 333-274684) on September 25, 2023 and declared effective by the SEC on September 28, 2023, to register the resale of the Shares and Pre-Funded Warrants. None of the Pre-Funded Warrants have been exercised to date. Other Common Stock Issuances On March 9, 2023, the Company entered into a marketing services agreement, whereby the Company agreed to issue 50,000 shares of its common stock, valued at $ 97,500 , in exchange for six months of services. As of September 30, 2023, the Company has issued 50,000 shares of the Company’s common stock pursuant to the marketing services agreement. During the nine months ended September 30, 2023, the Company recorded stock-based compensation expense of $ 97,500 related to the fair value of the shares of common stock. On April 23, 2023, the Company entered into a marketing services agreement, whereby the Company issued 55,828 shares of its common stock valued at $ 100,000 , which was recorded as stock-based compensation during the nine months ended September 30, 2023. Stock Options In 2016, the Board of Directors of the Company approved the Immix Biopharma, Inc. 2016 Equity Incentive Plan (the “2016 Plan”). The 2016 Plan allows for the Board of Directors to grant various forms of incentive awards covering up to 417,120 shares of common stock. During the year ended December 31, 2021, the Board of Directors amended the 2016 Plan to increase the aggregate number of shares available for issuance under the 2016 Plan to 1,761,120 shares of common stock. On September 10, 2021, the Board of Directors approved the 2021 Equity Incentive Plan (as amended and restated, the “2021 Plan”) pursuant to which it initially reserved and made available for future issuance under the 2021 Plan (i) 900,000 shares of common stock, plus (ii) the number of shares of common stock reserved, but unissued under the 2016 Plan, and (iii) the number of shares of common stock underlying forfeited awards under the 2016 Plan, provided that shares of common stock issued under the 2021 Plan with respect to an Exempt Award (as defined in the 2021 Plan) would not count against such share limit. Subsequent to September 10, 2021, no further awards are to be issued under the 2016 Plan, but all awards under the 2016 Plan which were outstanding as of September 10, 2021 (including any Grandfathered Arrangement (as defined in the 2021 Plan)) shall continue to be governed by the terms, conditions and procedures set forth in the 2016 Plan and any applicable award agreement. On April 24, 2023, the Company’s Board of Directors adopted the Immix Biopharma, Inc. Amended and Restated 2021 Omnibus Equity Incentive Plan (the “Amended 2021 Plan”) which, among other things, increased the number of shares of common stock that may be issued under such plan by 1,034,561 shares, subject to stockholder approval. On June 7, 2023, stockholders of the Company approved the Amended 2021 Plan. As of September 30, 2023, there were 1,040,777 shares of the Company’s common stock remaining to be issued under the Amended 2021 Plan. 16 During the nine months ended September 30, 2023, the Compensation Committee of the Board of Directors approved the issuance of options to purchase 136,670 shares of the Company’s common stock to non-employee members of the Board of Directors of the Company and 586,000 shares of the Company’s common stock to management of the Company. The options have a term of 10 years, exercise prices ranging from $ 1.82 to $ 1.95 per share and vest over periods of 12 to 48 equal monthly installments. During the nine months ended September 30, 2023, the Board of Directors approved the issuance of options to purchase 20,000 shares of the Company’s common stock to a consultant of the Company with a term of 10 years and an exercise price of $ 1.95 per share, which options vest in 12 equal monthly installments. The Company recognized stock-based compensation of $ 171,454 and $ 163,192 related to stock options for the three months ended September 30, 2023 and 2022, respectively, and $ 507,017 and $ 293,975 related to stock options for the nine months ended September 30, 2023 and 2022, respectively, which is included in general and administrative expenses. As of September 30, 2023, the Company had unrecognized stock-based compensation expense of $ 2,210,423 , related to unvested stock options, which is expected to be recognized over the weighted-average vesting period of 3.15 years. The following table summarizes the stock option activity for the nine months ended September 30, 2023: Schedule of Stock Option Activity Options Weighted- Average Exercise Price Per Share Outstanding, January 1, 2023 1,771,242 $ 1.94 Granted 742,670 $ 1.86 Exercised - $ - Forfeited - $ - Expired - $ - Outstanding and expected to vest, September 30, 2023 2,513,912 $ 1.92 The following table discloses information regarding outstanding and exercisable options at September 30, 2023: Schedule of Stock Outstanding and Exercisable Outstanding Exercisable Exercise Price Number of Option Shares Weighted Average Exercise Price Weighted Average Remaining Life (Years) Number of Option Shares Weighted Average Exercise Price $ 0.80 256,500 $ 0.80 7.45 256,500 $ 0.80 $ 1.33 150,992 $ 1.33 1.92 150,992 $ 1.33 $ 1.80 36,670 $ 1.80 9.90 1,019 $ 1.80 $ 1.86 1,458,500 $ 1.86 8.73 454,762 $ 1.86 $ 1.95 20,000 $ 1.95 9.92 417 $ 1.95 $ 2.64 580,000 $ 2.64 8.79 225,834 $ 2.64 $ 5.83 11,250 $ 5.83 8.29 4,688 $ 5.83 2,513,912 $ 1.92 8.29 1,094,212 $ 1.72 Aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option and the fair value of the Company’s common stock for stock options that were in-the-money at period end. As of September 30, 2023, the aggregate intrinsic value for the options vested and outstanding was $ 1,874,939 and $ 3,803,565 , respectively. 17 Stock Warrants The following table summarizes the stock warrant activity for the nine months ended September 30, 2023: Schedule of Stock Warrant Activity Warrants Weighted-Average Exercise Price Per Share Outstanding and exercisable, January 1, 2023 397,500 $ 4.11 Granted 1,913,661 $ 0.0001 Exercised - $ - Forfeited - $ - Expired - $ - Outstanding and exercisable, September 30, 2023 2,311,161 $ 0.71 The following table discloses information regarding outstanding and exercisable warrants at September 30, 2023: Schedule of Stock Outstanding and Exercisable Outstanding Exercisable Exercise Price Number of Option Shares Weighted Average Exercise Price Weighted Average Remaining Life (Years) Number of Option Shares Weighted Average Exercise Price $ 0.0001 1,913,661 $ 0.0001 - 1,913,661 $ 0.0001 $ 0.80 156,000 $ 0.80 7.48 156,000 $ 0.80 $ 6.25 241,500 $ 6.25 3.21 241,500 $ 6.25 2,311,161 $ 4.11 0.84 2,311,161 $ 0.71 Aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock warrant and the fair value of the Company’s common stock for stock warrants that were in-the-money at period end. As of September 30, 2023, the intrinsic value for the warrants vested and outstanding was $ 6,953,249 . Nexcella Equity Transactions As of September 30, 2023, the Company’s controlling interest, on a fully dilutive basis, of Nexcella represents 91.4 % of Nexcella’s total common stock equivalents outstanding. The Nexcella 2022 Equity Incentive Plan (the “2022 Plan”) allows for Nexcella’s Board of Directors to grant various forms of incentive awards initially covering up to 375,000 shares of common stock. On May 29, 2023, Nexcella’s Board of Directors approved the Second Amended and Restated Nexcella 2022 Equity Incentive Plan, which submitted an increase to the number of shares of Nexcella common stock issuable under the plan from 375,000 shares to 607,640 shares. On August 11, 2023, Nexcella’s Board of Directors requested the Third Amended and Restated 2022 Equity Incentive Plan, which increased the number of shares of Nexcella common stock issuable under the plan from 607,640 to 800,000 shares. The Nexcella shareholders subsequently approved the increase in Nexcella common stock issuable under the plan to 800,000 . As of September 30, 2023, there were 96,188 shares of common stock available for issuance under the Nexcella 2022 Plan. Common stock During the nine months ended September 30, 2023, Nexcella closed on its private offering for the sale of 100,152 common shares of Nexcella at a purchase price of $ 6.49 per share for total proceeds of $ 650,000 . The Company’s Chief Executive Officer purchased 7,704 shares of Nexcella’s common stock for a purchase price of $ 50,000 in the private placement offering. In addition, the Company’s Chief Financial Officer through Alwaysraise, LLC and Alwaysraise Ventures I, L.P., entities affiliated with the Company’s Chief Financial Officer, purchased an aggregate of 15,408 shares of Nexcella’s common stock in the private placement offering for $ 100,000 . As of December 31, 2022, Nexcella entered into subscription agreements for the sale of 73,188 shares of Nexcella’s common stock, at a purchase price of $ 6.49 per share for total proceeds of $ 475,000 . As of December 31, 2022, the offering had not yet closed, and the shares were not issued by Nexcella as of December 31, 2022, and accordingly, the Company recorded the proceeds of $ 475,000 in funds held for subsidiary private offering at December 31, 2022. 18 On March 13, 2023, pursuant to the terms of the Founders Agreement, Nexcella issued 167,566 shares of common stock to the Company as a PIK Dividend based on the total dilutive shares of Nexcella outstanding as of March 12, 2023. Restricted Stock Awards On December 8, 2022, Nexcella issued 350,000 shares of Nexcella restricted common stock to the officers of the Company for services to be performed, which vest in 48 equal monthly installments. The stock was valued at a share price of $ 6.49 on the date of issuance, which represents the most recent cash sales price of Nexcella’s common stock, for a total value of $ 2,271,500 related to services. During the nine months ended September 30, 2023, the Board of Directors of Nexcella, granted 179,784 shares of restricted common stock to the non-employee members of the Board of Directors for services to be performed, which vest in 24 equal monthly installments. The stock was valued at a share price of $ 6.49 on the date of issuance, which represents the most recent cash sales price of Nexcella’s common stock, for a total value of $ 1,166,798 related to services. During the three and nine months ended September 30, 2023, the Company recorded stock-based compensation expense of $ 378,916 and $ 662,854 , respectively, related to the total value, which was included in general and administrative expenses. The unrecognized stock-based compensation expense of $ 2,728,122 related to unvested restricted common stock is expected to be recognized over the remaining vesting period of 2.7 years. As of September 30, 2023, 100,280 shares of restricted common stock have vested with the remaining 429,504 restricted shares to vest over the vesting period of 2.7 years. Stock Options During the nine months ended September 30, 2023, the Board of Directors of Nexcella, granted 114,028 options to purchase shares of common stock to the non-employee members of the Board of Directors for services to be performed, with a term of 10 years and an exercise price of $ 6.49 per share, which options vest in 24 equal monthly installments. During the nine months ended September 30, 2023, the Board of Directors of Nexcella granted 60,000 options to purchase shares of common stock to two consultants for services to be performed, with a term of 10 years and an exercise price of $ 6.49 per share, which options vest in 48 equal monthly installments. The Company recognized stock-based compensation of $ 147,529 related to stock options for the three and nine months ended September 30, 2023, which is included in general and administrative expenses. As of September 30, 2023, Nexcella had unrecognized stock-based compensation expense of $ 850,496 , related to unvested stock options, which is expected to be recognized over the weighted-average vesting period of 2.53 years. The following table summarizes the stock option activity for the nine months ended September 30, 2023 for Nexcella: Schedule of Stock Option Activity Options Weighted- Average Exercise Price Per Share Outstanding and exercisable, January 1, 2023 - $ - Granted 174,028 $ 6.49 Exercised - $ - Forfeited - $ - Expired - $ - Outstanding and expected to vest, September 30, 2023 174,028 $ 6.49 19 The following table discloses information regarding outstanding and exercisable options at September 30, 2023: Schedule of Stock Outstanding and Exercisable Outstanding Exercisable Exercise Price Number of Option Shares Weighted Average Exercise Price Weighted Average Remaining Life (Years) Number of Option Shares Weighted Average Exercise Price $ 6.49 174,028 $ 6.49 9.83 23,197 $ 6.49 174,028 $ 6.49 9.83 23,197 $ 6.49 Note 7 – Licenses Acquired On December 8, 2022, Nexcella entered into a Research and License agreement with HADASIT and BIRAD (collectively, the “Licensors”) to acquire intellectual property rights pertaining to CAR-T (the “H&B License”). Pursuant to the H&B License, Nexcella paid the Licensors an upfront license fee of $ 1.5 million in December 2022 (included in research and development expenses on the consolidated statements of operations and comprehensive loss). Additional quarterly payments totaling approximately $13 million related to the Company’s ongoing support of the CAR-T clinical trials currently ongoing at HADASIT, are due through September 2026, along with an annual license fee of $50,000 . Future royalty payments of 5 % are due on net sales of licensed products, combined with sales milestone payments in the aggregate amount of up to $ 20 million when annual net sales reach certain thresholds for each licensed product. The royalties for each licensed product on a country-to-country basis are to be paid through the latter of (a) the expiration of the last-to-expire valid claim under a licensed patent (if any) in such country; (b) the date of expiration of any other Exclusivity Right (as defined in the H&B License) or data protection period granted by a regulatory or other governmental authority with respect to a licensed product that provides exclusivity in the relevant country; or (c) the end of a period of 15 years from the date of the First Commercial Sale (as defined in the H&B License) of the applicable Licensed Product (as defined in the H&B License) in such country. During the nine months ended September 30, 2023, the Company recorded R&D expenses of $ 1,929,601 related to the license agreement. Note 8 – Commitments and Contingencies Indemnifications In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and may provide for indemnification of the counterparty. The Company’s exposure under these agreements is unknown because it involves claims that may be made against it in the future but have not yet been made. To date, the Company has not been subject to any claims or been required to defend any action related to its indemnification obligations. The Company indemnifies each of its directors and officers for certain events or occurrences, subject to certain limits, while the director is or was serving at the Company’s request in such capacity, as permitted under Delaware law and in accordance with its certificate of incorporation and bylaws. The term of the indemnification period lasts as long as the director or officer may be subject to any proceeding arising out of acts or omissions of such individual in such capacity. The maximum amount of potential future indemnification is unlimited. The Company believes that the fair value of these indemnification obligations is minimal. Accordingly, the Company has not recognized any liabilities relating to these obligations as of September 30, 2023. 20 Royalty Agreement On December 22, 2014, the Company entered into a Master Service Agreement (“MSA”) with AxioMx, Inc. (“AxioMx”). AxioMx is in the business of developing and supplying custom affinity reagents. AxioMx and the Company entered into the MSA to serve as a master agreement governing multiple sets of projects as may be agreed upon by them from time to time. Pursuant to the MSA, AxioMx is entitled to royalties on the sale of any Deliverable (as defined in the MSA) that is used for diagnostic, prognostic or therapeutic purposes, in humans or animals, or for microbiology testing, including food safety testing or environmental monitoring. Specifically, the Company shall pay AxioMx a royalty of 3.5% of Net Sales (as defined in the MSA) of assigned products for each Deliverable used in licensed products for therapeutic purposes. In addition, the Company agreed to pay AxioMx a royalty of 1.5% of Net Sales of assigned products for each Deliverable used in licensed products for diagnostic or prognostic purposes; provided, however, if three Deliverables are used in an assigned product for diagnostic or prognostic purposes, the royalty is increased to 4.5%. Through September 30, 2023, no amounts have been paid or accrued under the MSA. As of December 31, 2022, the MSA has expired and the Company does not intend to extend the MSA; however, the royalty obligations shall survive the termination of the MSA. Legal Proceedings From time to time the Company may be involved in claims that arise during the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, the Company does not currently have any pending litigation to which it is a party or to which its property is subject that it believes to be material. Regardless of the outcome, litigation can be costly and time consuming, and it can divert management’s attention from important business matters and initiatives, negatively impacting the Company’s overall operations. Employment Agreements On June 18, 2021, the Company entered into an Employment Agreement with Ilya Rachman (as amended, the “Rachman Employment Agreement”), effective for a three-year term. Pursuant to the Rachman Employment Agreement, the Company employs Dr. Rachman as Chief Executive Officer and Dr. Rachman was entitled to a base salary of $ 360,000 annually. Dr. Rachman was also entitled to a performance-based bonus of 100 % of the base salary (subject to, and determined by, the Board in its sole discretion) plus additional performance bonuses to be determined by the Board. On July 14, 2022, the Compensation Committee of the Board of Directors approved a new compensation package for Dr. Rachman, and on November 9, 2022, the Company entered into an amendment to the Rachman Employment Agreement dated as of June 18, 2021 pursuant to which (i) Dr. Rachman’s annual base salary was increased to $ 425,000 , retroactive as of January 1, 2022 and (ii) entitling Dr. Rachman to a performance-based bonus of up to 50 % of his base salary (subject to, and determined by, the Board in its sole discretion) plus additional performance bonuses to be determined by the Board. In addition, on July 14, 2022, the Company issued Dr. Rachman options to purchase up to 250,000 shares of the Company’s common stock at an exercise price of $ 2.64 per share. Unless terminated by the Company without “cause” or by Dr. Rachman with “good reason” (as such terms are defined in the Rachman Employment Agreement), upon termination, Dr. Rachman will be entitled only to his base salary through the date of termination, valid expense reimbursements and unused vacation pay. If terminated by the Company without “cause” or by Dr. Rachman with “good reason,” he is entitled to be paid his base salary through the end of the term at the rate of 150 %, valid expense reimbursements and accrued but unused vacation pay. On March 7, 2023, the Compensation Committee of the Board of Directors approved an increase in the annual base salary and on May 12, 2023, the Company entered into an amendment to the Rachman Employment Agreement pursuant to which Dr. Rachman’s annual base salary was increased to $ 446,000 , effective January 1, 2023. Dr. Rachman’s employment agreement contains provisions for the protection of the Company’s intellectual property and contains non-compete restrictions in the event of his termination other than by the Company without “cause” or by Dr. Rachman with “good reason” (generally imposing restrictions on (i) employment or consultation with competing companies or customers, (ii) recruiting or hiring employees for a competing company and (iii) soliciting or accepting business from our customers for a period of six months following termination). Pursuant to the Rachman Employment Agreement, Dr. Rachman may serve as a consultant to, or on boards of directors of, or in any other capacity to, other companies provided that they will not interfere with the performance of his duties to the Company. 21 On March 18, 2021, the Company entered into a Management Services Agreement with Alwaysraise LLC, an entity which Gabriel Morris, the Company’s Chief Financial Officer and a member of the Board, is sole member, effective for a three-year term, which was amended effective June 18, 2021 (as amended, the “Morris MSA”). Pursuant to the Morris MSA, the Company employs Mr. Morris as Chief Financial Officer and Mr. Morris was entitled to a base salary of $ 240,000 annually beginning in December 2021 ($ 120,000 annually prior). Mr. Morris was also entitled to a performance-based bonus of 100 % of the base salary (subject to, and determined by, the Board in its sole discretion) plus additional performance bonuses to be determined by the Board. On July 14, 2022, the Compensation Committee of the Board of Directors approved a new compensation package for Mr. Morris, and on November 9, 2022, the Company entered into an amendment to the Morris MSA dated as of March 24, 2021 pursuant to which (i) Mr. Morris’ annual base salary was increased to $ 425,000 , retroactive as of January 1, 2022 and (ii) entitling Mr. Morris to a performance-based bonus of up to 50 % of his base salary (subject to, and determined by, the Board in its sole discretion) plus additional performance bonuses to be determined by the Board. In addition, on July 14, 2022, the company issued Mr. Morris options to purchase up to 250,000 shares of the Company’s common stock at an exercise price of $ 2.64 per share. Unless terminated by the Company without “cause” or by Alwaysraise LLC (as such terms are defined in the Morris MSA), upon termination, Mr. Morris will be entitled only to his base salary through the date of termination, valid expense reimbursements and unused vacation pay. If terminated by the Company without “cause,” he is entitled to be paid his base salary through the end of the term at the rate of 150 %, valid expense reimbursements and accrued but unused vacation pay. On March 7, 2023, the Compensation Committee of the Board of Directors approved an increase in annual base salary, and on May 12, 2023, the Company entered into an amendment to the Morris MSA pursuant to which the Mr. Morris’ annual base salary was increased to $ 446,000 , effective January 1, 2023. The Morris MSA contains provisions for the protection of the Company’s intellectual property and confidential information. On June 24, 2021, the Company issued an offer letter to Graham Ross Oncology Consulting Services Ltd., a United Kingdom company, of which Graham Ross, the Company’s Acting Chief Medical Officer and Head of Clinical Development is the sole member, regarding Dr. Ross’ provision of consultative services to the Company (the “Offer Letter”). Pursuant to the Offer Letter (signed by Dr. Ross on June 24, 2021), Dr. Ross is entitled to an hourly rate for his consulting services and an option grant. On June 24, 2021, the Company also signed a mutual confidentiality and non-disclosure agreement with Graham Ross Oncology Consulting Services Ltd. Collaboration Agreement In August 2021, the Company entered into a Clinical Collaboration and Supply Agreement with BeiGene Ltd. (“BeiGene”) for a combination Phase 1b clinical trial in solid tumors of IMX-110 and anti-PD-1 Tislelizumab (the subject of a collaboration and license agreement among BeiGene and Novartis). Under the terms of the agreement, the Company will conduct the combination trial. The cost of Tislelizumab manufacture and supply (including shipping, taxes and duty if applicable and any third-party license payments that may be due) will be solely borne by BeiGene. To date, no amounts have been paid to BeiGene. Note 9 – Subsequent Events Subsequent events have been evaluated subsequent to the consolidated balance sheet date of September 30, 2023 through the filing date of this Quarterly Report. Based on management’s evaluation, there are no other events that required recognition or disclosure, other than those discussed below and elsewhere in the notes hereto. On October 2, 2023, the Company issued 6,938 shares of restricted common stock valued at $ 22,500 for investor relations services based on the average closing price for the prior 10 trading days pursuant to a marketing services agreement entered into on July 25, 2023. On October 6, 2023, the Company issued 67,568 shares of restricted common stock pursuant to a marketing services agreement entered into on September 19, 2023, in exchange for 12 months of services. The shares of common stock were valued at $ 222,299 for investor relations services based on the closing price on the effective date. In addition, the Company paid $ 167,500 in cash pursuant to the agreement. On October 10, 2023, the Company issued 72,300 shares of restricted common stock pursuant to an extension of a previous marketing services agreement entered into on October 4, 2023, in exchange for an additional four months of services. The shares of common stock were valued at $ 150,000 based on the average closing price for the prior 30 trading days for investor relations services. On November 2, 2023, the Company issued 6,690 shares of restricted common stock valued at $ 22,500 for investor relations services based on the average closing price for the prior 10 trading days pursuant to a marketing services agreement entered into on July 25, 2023. Subsequent to September 30, 2023, the Company sold a total of 105,000 shares of its common stock under the July ATM Facility for aggregate net proceeds of $ 377,801 . 22