Lunai Bioworks Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Forward-Looking Statement Notice Certain statements made in this Quarterly Report on Form 10-Q are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance, or achievements of Renovaro Inc. (“Renovaro,” and together with its subsidiaries, the “Company”, “we” or “us”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. Our actual future results and trends may differ materially depending on a variety of factors, including, but not limited to, the risks and uncertainties discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K as filed with the SEC on October 2, 2023. The Company’s plans and objectives are based, in part, on assumptions involving the continued expansion of the business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Quarterly Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved. Our Business Renovaro Inc. operates in two subsidiaries, Renovaro Biosciences and RenovaroCube. RenovaroCube was created upon our acquisition of GediCube Itnl. Ltd. and its wholly-owned subsidiary GediCube, BV, which closed on February 13, 2024. Renovaro Biosciences Renovaro Biosciences is a biotechnology company committed to developing advanced allogeneic cell and gene therapies to promote stronger immune system responses potentially for long-term or life-long cancer remission in some of the deadliest cancers, and potentially to treat or cure serious infectious diseases such as Human Immunodeficiency Virus (HIV) and Hepatitis B Virus (HBV) infections. As a result of our acquisition of GEDi Cube on February 13, 2024, we have also expanded our technology pipeline to include diagnostic related services with an early emphasis on the detection of cancer. Our Product Development strategy related to our allogeneic cell and gene therapies is anchored in the use of “non-self” or allogeneic cells that enhance the immune response that we seek to elicit. Over the past several years, Renovaro Biosciences has evolved from a company with a single product candidate as a potential cure for HIV (RENB-HV12 and RENB-HV21), a pipeline for Hepatitis B Virus (HBV) (RENB-HB01), and with a significant expansion into cancer immune therapies to address high unmet needs from difficult-to-treat solid tumors (RENB-DC11.) The oncology platform is now at the forefront of our development activities, beginning with pancreatic cancer and other solid tumors with poor life expectancy, such as triple negative breast, second-line liver, head, neck, and oral among other possible targets. Many operational aspects of our platforms can be quickly adapted to multiple disease states from a single therapeutic approach, potentially streamlining and accelerating development, and regulatory process, as well as manufacturing operations. Moreover, because our product candidates do not require specialized delivery devices and surgical procedures, our potentially groundbreaking interventions could have worldwide applicability. Renovaro Biosciences responds quickly to new data and perceived development opportunities and risk assessments. Based on the maturation of our pipelines, the Company makes business decisions to prioritize the programs that could move more rapidly through development and commercial processes. 37 Therapeutic Platforms Renovaro Bioscience’s general approach with gene- and/or cell-therapy is to train the immune system to allow a person to better fight diseases. Our vision is for a world free from toxic chemotherapy and healthy longevity for those with cancer and other diseases. Renovaro Biosciences is leveraging general principles and advances in the knowledge of the immune response to engineer cells with enhanced attributes to promote the recognition and elimination of diseased cells. Advanced Allogeneic Cell Therapy The strategic benefit of cell therapy platforms is to potentially allow for manufacture of large, “off-the-shelf” banks of therapeutic cells that could be accessed on demand by health care professionals to potentially decrease the time between diagnosis and treatment. In addition, because we focus on cells from donors, the strategy could potentially enhance the ability of the therapeutic candidates to induce a more robust response once injected into patients. The human immune system is designed to recognize and distinguish “self” from “non-self” and destroy “otherness” such as bacteria, viruses, and damaged or diseased cells such as cancer cells. Alloreactivity (reacting against another person’s cells) is the most powerful response the immune system generates. Several of our technologies take advantage of the alloreactivity to hyper stimulate a person’s immune response to better attack a chronic infection (e.g., HIV) or solid tumor. In certain treatments (e.g., HIV and cancer), cells taken from healthy donors are sometimes genetically modified to introduce signaling molecules that are designed to enhance the ability of specific immune cells to recognize diseased cells, and to help recruit other cells that will destroy cancer or virus infected cells. We believe that the combination of off-the-shelf allogeneic cells, combined with genetic modifications designed to enhance immune signaling, could potentially generate therapeutic candidates that have unique attributes that will increase the likelihood of clinical success. HBV Gene Therapy Renovaro Biosciences is exploring various approaches for gene therapy design elements to potentially eliminate virus-infected cells with an innovative molecular mechanism that co-opts the virus’ machinery to induce the death of infected cells rather than reproducing and causing more infection to exacerbate disease. Oncology: RENB-DC11: Genetically modified Allogeneic Dendritic Cell Therapeutic Vaccine as Potential Product for Long-term Remission of Solid Tumors – Starting with Pancreatic Cancer Allogeneic Cell Therapy Platform – Advanced Pre-Clinical Based on learnings from literature reviews of ongoing clinical development for solid tumors, and recent advances in immune modulation, we have designed an innovative therapeutic vaccination platform that could potentially be used to induce life-long remission from some of the deadliest solid tumors. The survival rate in pancreatic cancer is currently only 5 to 10 percent at 5 years. 38 Initial preclinical in vitro and proof of concept in vivo studies have been compelling. The platform is designed to enable broad immune enhancements that are combined with cancer specific antigens that could be applicable to a wide range of solid tumors. We initially plan to target pancreatic cancer. Other potential targets for later development could include triple-negative breast cancer, liver or mesothelioma amongst many. Similar to our approach with HIV, RENB-DC11 would potentially allow for outpatient therapy without wiping out or significantly impairing the patient’s immune system often associated with standard of care chemotherapies. Renovaro Biosciences has initiated a collaboration with Dr. Anahid Jewett from UCLA to study further the in vitro and in vivo effectiveness of the approach in pancreatic cancer. Dr. Jewett created an innovative pancreatic cancer mouse model that comprises the human immune system repertoire in combination with human cancer cells implanted in the corresponding anatomical location found in human cancer. Multiple experiments in different humanized mouse models are consistently showing with only one regimen cycle of therapy (2 injections in mice, likely 5-6 in human) - what Dr. Jewett calls “the Holy Grail of cancer research” with now seven independent animal studies: 1. Consistent superior therapeutic effect compared to mainstream cancer vaccine approach and other control dendritic cell therapies 2. Significant infiltration of effector immune cells into the tumor 3. Significant peripheral T and NK cell immune activation 4. Primary tumor reduction and no metastases 5. Effective in early stage and late-stage cancer The confirming reproducibility and robustness of the therapeutic response in an aggressive form of human pancreatic cancer in several models is promising. We received FDA input from pre-IND interactions which helped solidify our IND-enabling plan as well as our investigational plan. We are now fully committed to process development/improvements and IND-enabling activities. We believe that we can complete IND-enabling activities in the second half of 2024 which if successful, would enable the start of clinical trials in humans during the first half of 2025. The investigational plan discussed with the FDA includes phase 1 safety testing broadly in all solid tumor types, followed by a phase 2a focusing on a few solid tumor types that are difficult to treat and have poor life expectancy, for example triple negative breast, second-line liver, and head and neck cancers. Phase 2b would expand cohorts in cancers with the strongest response in phase 2a. RENB-DC-12--XX: Genetically modified Allogeneic Dendritic Cell Therapeutic Vaccine as Potential Product for Long-term Remission of Additional Indications The technology is a platform that could potentially be adapted to other solid tumors first line and/or salvage therapy, by itself or, potentially, in combination with other cancer treatments. Additional cancer vaccine designs are being evaluated strategically to balance risk and opportunity to advance therapeutic development quickly in cancer indications with few treatment options. Infectious Diseases: HIV: RENB-HV12: HIV Therapeutic Vaccines for Potential Long-term Remission/Cure Allogeneic Cell Therapy Platform - Advanced Pre-Clinical Stage; Non-Human Primate Studies Ongoing. In persons living with HIV who are controlling the spread of virus with anti-retroviral (ARV) treatment, boosting the immune system in a different way than the virus already has through infection, could allow for control of HIV after stopping ARVs. 39 Renovaro Biosciences is developing RENB-HV12 that utilizes a novel cellular and immunotherapy approach that could potentially provide therapeutic vaccines for HIV. A non-human study of the therapeutic vaccine in primates at the Fred Hutchinson Cancer Research Center is ongoing. Animals began receiving the first injections of the potential therapeutic vaccine in August, 2023. Preliminary results assessment may potentially be available in the second half of 2024. A Pre-IND request could be submitted in the first half of 2025, with IND submission and the beginning of Phase I clinical trials by mid- to end-2025. RENB-HV21: Immunotherapy with Allogeneic NK/GDT Cells Allogeneic Cell Therapy Platform - Pre-IND conducted - Advanced Pre-Clinical with Human Data through a Collaboration We are also exploring RENB-HV21, an innovative treatment for HIV with allogeneic Natural Killer (NK) and Gamma Delta T-Cells (GDT). It is believed that the GDT cells, a small subset of immune cells that can be infected with HIV, could both be infected by, and be a key factor in controlling the virus. The initial scientific findings were presented during the American Society of Gene & Cell Therapy (ASCGT) Annual Meeting in 2021. We have an exclusive license to use the underlying patent to develop RENB-HV21 for potential treatment or cure of HIV. A successful investigator-initiated Pre-IND was completed in October 2021. However, due to a shift in priorities to the Oncology pipeline, Renovaro Biosciences does not plan to pursue the IND and potential clinical trial in the medium- to long-term. HBV: RENB-HB01: Potential Cure for HBV HBV Gene Therapy - Pre-Clinical RENB-HB01 is in an early pre-clinical phase as we explore various approaches for gene therapy design elements. If those explorations are successful, it is possible we could begin the regulatory process at the earliest in the second half of 2024. However, our highest priority is currently the oncology platform, beginning with pancreatic cancer and other solid tumors with poor life expectancy. 40 Renovaro Cube Renovaro Cube (“RenCube”) is an artificial intelligence driven healthcare technology company focused on developing diagnostic tests and test kits that would analyze samples derived from non-invasive liquid biopsy procedures for the early detection of cancer, disease recurrence, treatment selection and monitoring of treatment in cancer. RenCube is developing a proprietary platform that will analyze genetic information using “Explainable AI” (as defined below) to provide earlier and more accurate cancer diagnosis. This platform applies a multi-omics approach to search for individual biomarkers that are present even in asymptomatic patients. RenCube’s process also generates biomarker panels, which are used for training models per cancer type and per clinical application, and are integrated into a machine learning library referred to as a “Cube” to facilitate accurate diagnosis. The “Cube” will become more effective and accurate over time due to retraining of its models on the enriched database of molecular data. RenCube also aims to utilize and commercialize its proprietary platform RenCube for use in developing products and services by third parties aimed at (i) early cancer characterization, (ii) personalized treatment selection, (iii) tracking response to therapies, (iv) recurrence detection, and (v) ultimately, drug discovery. As part of RenCube’s dedication to the development of early cancer detection blood tests it expects to develop partnerships with third-party laboratories across the United Kingdom, the Netherlands, Europe and the United States. In particular, RenCube is focused on developing diagnostic tests and test kits that make use of non-invasive liquid biopsy samples. Renovaro Cube’s Strategy RenCube’s prod uct development focuses on four core areas: ● Early Detection. Multi-cancer early detection (“MCED”) blood tests are advanced diagnostic tools that analyze cell-derived molecules present in the bloodstream. These tests specifically look for genetic mutations, epigenetic alterations, cell-free DNA fragment patterns, gene expressions, proteomic patterns or other genetic alterations of these tumor-derived molecules, which can indicate the presence of cancer cells. By examining the molecules shed from cancer cells, MCED tests aim to detect cancer at an early stage employing a non-invasive blood test. ● Recurrence of cancer . A recurrence refers to the return of cancer after a period of remission. A cancer recurrence happens because, in spite of the efforts to eradicate the cancer, some cells may remain, which grow and eventually cause symptoms. In rare instances, a patient may develop a new cancer that’s completely unrelated to the originally diagnosed cancer, which is referred to as a second primary cancer. ● Response to treatment. Most cancer treatments that are currently available are only effective in 30-40% of the cases. In life threatening cases these patients only have one option and therefore reduce their chances of survival significantly. Particularly, in patients with cancer, it is critical to be the ‘first time right’. RenCube aims to develop a new array of diagnostic products that can accurately identify patients that are going to respond or fail to a certain drug thereby facilitating personalized treatment. ● Treatment monitoring. Current imaging modalities, while valuable, may not be sensitive enough to capture subtle changes in tumor size to guide treatment adjustments effectively. Furthermore, the cost and availability of these imaging techniques can pose barriers to frequent monitoring, potentially delaying necessary interventions. RenCube aims to develop non-invasive liquid biopsy tests that will provide real-time accurate feedback on tumor response thereby empowering clinicians to personalize treatment plans, optimize outcomes, and minimize unnecessary interventions, ultimately improving patient care and quality of life. Renovaro Cube’s Technology and Techniques RenCube’s AI technology aims to address three critical facets of medical needs within the domain of cancer diagnosis: ● type-specific cancer detection; ● pan-cancer detection; and ● personalized treatment 41 The foundational architecture of RenCube’s AI technology will be engineered to facilitate comprehensive pan-cancer analysis through its extensive record of informative biomarkers discovered across a diverse array of cancer types. This comprehensive repository empowers RenCube’s technology to swiftly cross-reference biomarkers and explore molecular commonalities and distinctions that span multiple tumor categories. Uses of RenCube’s AI Technology RenCube’s AI platform will be an enterprise software platform that is distinguished from its competitors’ technology by its core attributes encompassing AI-guided analysis and meticulous record-keeping of data handling procedures within audit trails, logs, and data discoveries. RenCube is designing this technology to support and validate every phase of the process, from the initial handling of raw data to the creation of essential biomarker panels. RenCube’s AI platform may also facilitate the integration of data originating from diverse sources, including public databases and collaborative partnership data. AI-Assisted Diagnostics The process of biomarker discovery facilitated by RenCube’s AI technology has yielded a set of biomarkers that enables scrutiny of the genomic distinctions and commonalities inherent in diverse cancer types. This biomarker set may support the diagnosis of cancers when their type or origin remains unidentified. In addition to this role in biomarker discovery and the development of diagnostic tests, RenCube’s AI technology will integrate AI-guided molecular profiling of patient samples to generate diagnostic patient reports. These diagnostic reports reflect the outcomes of molecular profiling, coupled with interpretations provided by RenCube’s team, to facilitate the process of cancer diagnostics by a qualified healthcare provider, who can consider these reports in the context of a patient’s medical history, clinical signs, and symptoms, among other factors. Panel Mining The unique panel mining technique in RenCube’s technology repeatedly investigates genes to identify relevant biomarkers. The proprietary technique in RenCube’s technology not only searches for individual biomarkers, but also integrates validated panels for different cancer types into the “Cube” machine learning library. This process enables precision diagnosis, by including one cancer and excluding others on the basis of statistically, scientifically and clinically validated machine-learning panels. Explainable AI The term “Explainable AI” refers to the ability of an artificial intelligence system or model to provide human-understandable explanations for its decision-making process or predictions. This feature aims to bridge the gap between the “black box” nature of many AI algorithms and the need for transparency, interpretability, and accountability in AI applications. RenCube believes that Explainable AI is crucial for ensuring transparency, fairness, and accountability in AI systems. RenCube’s AI platform includes Explainable AI by design. All data points, calculations and results are traceable, and all calculations are verifiable and reproducible with the same result. Differential Diagnosis Diseases like cancer are very homogenous, meaning that markers like TP53 or BRCA are expressed with multiple cancers. To address this homogeneity, differential diagnosis distinguishes between two or more conditions or diseases that share similar signs, symptoms or characteristics. The goal of differential diagnosis is to consider and evaluate all possible diagnoses for the patient’s symptoms to determine the most likely cause. Differential diagnosis therefore aims to identify the underlying condition accurately and guide appropriate treatment and management strategies. 42 Corporate History We were incorporated under the laws of the State of Delaware on January 18, 2011, under the name Putnam Hills Corp. and in 2014 we merged with and changed our name to DanDrit Biotech USA, Inc. In 2018, we acquired Enochian Biopharma and changed our name to Enochian BioSciences Inc. In August 2023, the Company changed its corporate name to Renovaro Biosciences Inc. On February 13, 2024, the Company changed its corporate name to Renovaro Inc. On February 13, 2024, Renovaro Inc. acquired Renovaro Cube Intl Ltd and its subsidiaries, in which Renovaro Cube became a wholly-owned subsidiary of Renovaro Inc. Going Concern and Management’s Plans The financial statements included elsewhere herein for the period ended March 31, 2024, were prepared under the assumption that we would continue our operations as a going concern, which contemplates the realization of assets and the satisfaction of liabilities during the normal course of business. As of March 31, 2024, we had cash and cash equivalents of $312,697, an accumulated deficit of $274,757,816 and a working capital deficit of $19,654,098 and total liabilities of $43,683,784. We have incurred significant losses from continuing operations, have used cash in our continuing operations, and are dependent on additional financing to fund operations. These conditions raise substantial doubt about our ability to continue as a going concern for one year after the date the financial statements are issued. The financial statements included elsewhere herein do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. Management has reduced overhead and administrative costs by streamlining the organization to focus around two of its therapies (oncology and a HIV therapeutic vaccine) and investment in the development and validation of our AI driven cancer diagnostics platform. The Company has tailored its workforce to focus on these therapies. In addition, the Company intends to attempt to secure additional required funding through equity or debt financing. However, there can be no assurance that the Company will be able to obtain any sources of funding. Such additional funding may not be available or may not be available on reasonable terms, and, in the case of equity financing transactions, could result in significant additional dilution to our stockholders. If we do not obtain required additional equity or debt funding, our cash resources will be depleted and we could be required to materially reduce or suspend operations, which would likely have a material adverse effect on our business, stock price and our relationships with third parties with whom we have business relationships, at least until additional funding is obtained. If we do not have sufficient funds to continue operations, we could be required to seek bankruptcy protection or other alternatives that could result in our stockholders losing some or all of their investment in us. Funding that we may receive during the fiscal year 2024 is expected to be used to satisfy existing and future obligations and liabilities and working capital needs, to support commercialization of our products and conduct the clinical and regulatory work to develop our product candidates, and to begin building working capital reserves. 43 Results of Operations for the three and nine months ended March 31, 2024, compared to the three and nine months ended March 31, 2023 The following table sets forth our revenues, expenses and net loss for the three and nine months ended March 31, 2024 and 2023. The financial information below is derived from our unaudited condensed consolidated financial statements. For the Three Months Ended For the Nine Months Ended March 31, Increase/(Decrease) March 31, Increase/(Decrease) 2024 2023 $ % 2024 2023 $ % Operating Expenses General and administrative $ 7,652,379 $ 3,796,057 $ 3,856,322 102 % $ 19,558,981 $ 12,365,960 $ 7,193,021 58 % Research and development 1,087,156 239,137 848,019 355 % 2,274,321 3,170,471 (896,150 ) (28 )% Intangible assets impairment 8,421,000 — 8,421,000 100 % 8,421,000 — 8,421,000 100 % Depreciation and amortization 30,305 28,242 2,063 7 % 90,727 85,487 5,240 6 % Total Operating Expenses 17,190,840 4,063,436 13,127,404 323 % 30,345,029 15,621,918 14,723,111 94 % LOSS FROM OPERATIONS (17,190,840 ) (4,063,436 ) (13,127,404 ) 323 % (30,345,029 ) (15,621,918 ) (15,299,606 ) 94 % Other Income (Expenses) Loss on extinguishment of debt — — — — % (120,018 ) — (120,018 ) 100 % Loss on extinguishment of contingent consideration liability — — — — % — (419,182 ) 419,182 (100 )% Change in fair value of contingent consideration 486,500 — 486,500 100 % 486,500 — 486,500 100 % Interest expense (303,802 ) (122,289 ) (181,513 ) 148 % (758,057 ) (310,766 ) (447,291 ) 144 % Interest and other income (expense) (16,272 ) (142,571 ) 126,299 (89 )% 8,041 (133,938 ) 141,979 (106 )% Total Other Income (Expense) 166,426 (264,860 ) 431,286 (163 )% (383,534 ) (863,886 ) 480,352 (56 )% NET LOSS $ (17,024,414 ) $ (4,328,296 ) $ (12,696,118 ) 293 % $ (30,728,563 ) $ (16,485,804 ) $ (14,242,759 ) 86 % Revenues We are a pre-revenue, pre-clinical biotechnology and artificial intelligence driven healthcare technology company. We have never generated revenues and have incurred losses since inception. We do not anticipate earning any revenues until our therapies or products are approved for marketing and sale. 44 Expenses Our operating expenses for the three months ended March 31, 2024 and 2023, were $17,190,840 and $4,063,436 respectively, representing an increase of $13,127,404 or approximately 323% . The increase in operating expenses primarily relates to the increase in general and administrative expenses of $3,856,322, the increase in research and development expenses of $848,019 and an indefinite life intangible assets impairment charge of $8,421,000. Our operating expenses for the nine months ended March 31, 2024 and 2023, were $30,345,029 and $15,621,918 respectively, representing an increase of $14,723,111, or approximately 94% . The increase in operating expenses primarily relates to the increase in general and administrative expenses of $7,193,021, and the indefinite life intangible assets impairment charge of $8,421,000, partially offset by the decrease in research and development expenses of $896,150. General and administrative expenses for the three months ended March 31 2024, and 2023, were $7,652,379 and $3,796,057, respectively, representing an increase of $3,856,322 or approximately 102%. The variance is related to an increase in legal expenses of $1,552,970, non-cash stock-based compensation of $785,396, non-cash consulting fees of $544,657, accrued expenses related to the GEDi Cube acquisition of $797,203, investor relations expenses of $264,344, marketing expenses of $148,827, and compensation and related expenses of $97,528, partially offset by a decrease in accounting fees of $466,145. General and administrative expenses for the nine months ended March 31, 2024, and 2023, were $19,558,981 and $12,365,960, respectively, representing an increase of $7,193,021 or approximately 58%. The variance is related to an increase in non-cash consulting fees of $4,570,000, non-cash stock-based compensation of $922,492, accrued expenses related to the GEDi Cube acquisition of $797,203, legal expenses of $693,473, investor relations expenses of $505,395, consulting expenses of $447,407, marketing expenses of $270,010, rent expenses of $156,626, and insurance expenses of $127,628, partially offset by a decrease in accounting fees of $403,538. Research and development expenses for the three months ended March 31, 2024, and 2023, were $1,087,156 and $239,137, respectively, representing an increase of $848,019 or approximately 355%. The variance is primarily driven by an increase of $584,912 in collaborating partner expenses with CDMO and CROs, $115,616 in consumables related to pre-clinical testing and $150,811 in consulting expenses related to regulatory and outsourced consultants. Research and development expenses for the nine months ended March 31, 2024, and 2023, were $2,274,321 and $3,170,471, respectively, representing a decrease of $896,150 or approximately 28%. The variance is primarily driven by a decrease of $1,603,896 in collaborating partner expenses with CDMO and CROs related to discontinued product candidates, partially offset by an increase in consumables of $355,235 and consulting expenses of $351,466. Intangible assets impairment expense for the three and nine months ended March 31, 2024, was $8,421,000. This was due to the termination of the HV-01 license agreement in which the Company abandoned the development of a technology included in its IPR&D and recorded an impairment of $8,421,000 in the period ended March 31, 2024. The Company recorded other income of $166,426 for the three months ended March 31, 2024, compared to other expense of $264,860 for the three months ended March 31, 2023, representing a decrease in other expense of $431,286 or 163%. The variance is primarily due to an increase of $486,500 in change in fair value of contingent consideration following the acquisition of GEDi Cube. The Company recorded other expense of $383,534 for the nine months ended March 31, 2024, compared to other expense of $863,886 for the nine months ended March 31, 2023, representing a decrease in other expense of $480,352 or 56%. The variance is primarily due to the loss on extinguishment of contingent consideration liability of $419,182 in the prior period, and an increase of $486,500 in change in fair value of contingent consideration in the current period, partially offset by an increase of $447,291 in interest expense in the current period. Net Loss Net loss for the three months ended March 31, 2024, and 2023, was $17,024,414 and $4,328,296, respectively, representing an increase in net loss of $12,696,118 or approximately 293%. The increase in net loss was primarily due to the indefinite life intangible assets impairment charge of $8,421,000 and an increase in general and administrative expenses of $3,856,322. 45 Net loss for the nine months ended March 31, 2024, and 2023, was $30,728,563 and $16,485,804, respectively, representing an increase in net loss of $14,242,759 or approximately 86%. The increase in net loss was primarily due to the indefinite life intangible assets impairment charge of $8,421,000 and an increase in general and administrative expenses of $7,193,021. Liquidity and Capital Resources We have historically satisfied our capital and liquidity requirements through funding from stockholders, the sale of our Common Stock and warrants, and debt financing. We have never generated any sales revenue to support our operations and we expect this to continue until our therapies or products are approved for marketing in the United States and/or Europe. Even if we are successful in having our therapies or products approved for sale in the United States and/or Europe, we cannot guarantee that a market for the therapies or products will develop. We may never be profitable. As noted above under the heading “Going Concern and Management’s Plans,” through March 31, 2024, we have incurred substantial losses. We will need additional funds for (a) research and development, (b) increases in personnel, (c) the purchase of equipment, specifically to advance towards an Investigational New Drug Application (IND) following Pre-IND readouts from the FDA for RENB-DC11, RENB-HV12, RENB-HV21 and RENB-HB01 and (d) investment in the development and validation of our AI driven cancer diagnostics platform. The availability of any required additional funding cannot be assured. In addition, an adverse outcome in legal or regulatory proceedings in which we are currently involved or in the future may be involved could adversely affect our liquidity and financial position. We may raise such funds from time to time through public or private sales of our equity or debt securities. Such financing may not be available on acceptable terms, or at all, and our failure to raise capital when needed could materially adversely affect our growth plans and our financial condition and results of operations. As of March 31, 2024, the Company had $312,697 in cash and working capital of $(19,654,098) as compared to $1,874,480 in cash and working capital of $(8,457,693) as of June 30, 2023, a decrease of 83% and 132%, respectively. Assets Total assets at March 31, 2024, were $212,279,340 compared to $58,300,796 as of June 30, 2023. The increase in total assets was primarily due to the increase in goodwill of $152,546,852 from the acquisition of Renovaro Cube. Liabilities Total liabilities at March 31, 2024, were $43,683,784 compared to $11,798,685 as of June 30, 2023. The increase in total liabilities was primarily related to increases of $20,071,000 in contingent consideration liability, $3,031,803 in accrued expenses, $2,693,808 in accounts payable, $3,700,694 in convertible notes payable, net of discount and $2,774,856 in deferred tax liability offset by a decrease of $1,206,326 in notes payable, net of discount. The following is a summary of the Company’s cash flows (used in) or provided by operating, investing, and financing activities: Nine Months Ended March 31, 2024 Nine Months Ended March 31, 2023 Net Cash Used in Operating Activities $ (8,557,649 ) $ (9,512,937 ) Net Cash Used in Investing Activities (1,206,806 ) (23,633 ) Net Cash Provided by Financing Activities 8,050,737 3,267,008 Effect of exchange rates on cash 151,935 45,462 Change in Cash and Cash Equivalents $ (1,561,783 ) $ (6,224,100 ) 46 Cash Flows Cash used in operating activities for the nine months ended March 31, 2024, and 2023 was ($8,557,649) and ($9,512,937), respectively. Cash used in operating activities during the current period primarily related to the net loss including $2,274,321 in research and development expenses for CDMO and CRO costs, along with approximately $10,477,101 in general and administrative expenses, net of non-cash items, partially offset by an increase in accounts payable of $2,693,808 and accrued expenses of $3,031,803 due to the timing of cash payments and a $216,293 increase in prepaid expenses. Cash used in investing activities for the nine months ended March 31, 2024, and 2023 was ($1,206,806) and ($23,633), respectively. Cash used in investing activities during the current period primarily related to the issuance of notes receivable prior to the acquisition of Renovaro Cube totaling $1,193,000 in principal and $32,779 of interest accrued as of February 13, 2024. Cash provided by financing activities for the nine months ended March 31, 2024, was $8,050,737 as compared to cash provided by financing activities of $3,267,008 during the nine months ended March 31, 2023. During the nine months ended March 31, 2024, the Company received net proceeds of $5,355,000 from issuance of notes payable, $3,000,000 from private placements and $341,865 from Common Stock warrants exercised, that were partially offset by $646,128 in repayment of a finance agreement. Off-Balance Sheet Arrangements The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. Significant Accounting Policies and Critical Accounting Estimates The methods, estimates, and judgments that we use in applying our accounting policies have a significant impact on the results that we report in our financial statements. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain. For a summary of our accounting policies, see Note 1 to the unaudited condensed consolidated financial statements. Item 3. Quantitative and Qualitative Disclosures About Market Risk. As a “smaller reporting company” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, the Company is not required to provide the information required by this Item.