What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-12 compared with 2024-05-09 · 113 added, 76 removed, 459 unchanged (29% of the section changed)

8 unchanged sentences

Marketable securities

21,544 27,942

Prepaid and other current assets 3,716 3,389

14 unchanged sentences

issued 8,321,799

and 8,150,635 shares at March 31, 2024 and December 31, 2023, respectively;

outstanding, 8,307,433 and 8,149,897 shares at March 31, 2024 and December 31, 2023,

and 8,150,635 shares at June 30, 2024 and December 31, 2023, respectively;

outstanding, 8,321,061 and 8,149,897 shares at June 30, 2024 and December 31, 2023,

Additional paid-in capital 577,552 576,971

Treasury stock, at cost;

738 shares at March 31, 2024 and December 31, 2023

738 shares at June 30, 2024 and December 31, 2023

( 708 ) ( 708 )

11 unchanged sentences

(In thousands, except per share data)

Three Months Ended March 31,

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

2024 2023 2024 2023

Operating Expenses:

18 unchanged sentences

Basic and diluted shares

8,308 8,021 8,301 8,004

See accompanying notes to consolidated financial statements.

3 unchanged sentences

(In thousands)

Three Months Ended March 31,

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

2024 2023 2024 2023

Net loss $ ( 5,044 ) $ ( 4,027 ) $ ( 10,445 ) $ ( 10,214 )

Other comprehensive loss:

Available for sale securities - net unrealized loss ( 13 ) ( 11 )

Other comprehensive gain (loss):

Available for sale securities - net unrealized gain (loss) 4 12 ( 9 ) 1

Cumulative translation adjustment arising during the period 23 ( 10 ) ( 26 ) ( 22 )

Total other comprehensive loss ( 62 ) ( 23 )

Total other comprehensive gain (loss) 27 2 ( 35 ) ( 21 )

Comprehensive loss attributable to Lisata Therapeutics, Inc.

15 unchanged sentences

Shares Amount

Balance at March 31, 2023 7,999 $ 8 $ 575,137 $ ( 52 ) $ ( 513,428 ) $ ( 708 ) $ 60,957 $ ( 254 ) $ 60,703

Net loss — — — — ( 4,027 ) — ( 4,027 ) — ( 4,027 )

Share-based compensation ( 25 ) — 584 — — — 584 — 584

Net proceeds from issuance of common stock 76 — 297 — — — 297 — 297

Proceeds from option exercises 83 — 155 — — — 155 — 155

Unrealized gain on marketable securities — — — 12 — — 12 — 12

Foreign currency translation adjustment — — — ( 10 ) — — ( 10 ) — ( 10 )

Balance at June 30, 2023 8,133 $ 8 $ 576,173 $ ( 50 ) $ ( 517,455 ) $ ( 708 ) $ 57,968 $ ( 254 ) $ 57,714

Common Stock Additional

Capital Accumulated

Comprehensive

Loss Accumulated

Deficit Treasury

Lisata Therapeutics,

Stockholders'

Subsidiary Total

Shares Amount

Balance at December 31, 2022 7,867 $ 8 $ 574,548 $ ( 29 ) $ ( 507,241 ) $ ( 708 ) $ 66,578 $ ( 254 ) $ 66,324

1 unchanged sentence

Share-based compensation 107 — 1,173 — — — 1,173 — 1,173

Unrealized loss on marketable securities — — — ( 11 ) — — ( 11 ) — ( 11 )

Net proceeds from issuances of common stock 76 — 297 — — — 297 — 297

Proceeds from option exercises 83 — 155 — — — 155 — 155

Unrealized gain on marketable securities — — — 1 — — 1 — 1

Foreign currency translation adjustment — — — ( 22 ) — — ( 22 ) — ( 22 )

Balance at June 30, 2023 8,133 $ 8 $ 576,173 $ ( 50 ) $ ( 517,455 ) $ ( 708 ) $ 57,968 $ ( 254 ) $ 57,714

See accompanying notes to consolidated financial statements.

Common Stock Additional

Capital Accumulated

Comprehensive Loss Accumulated

Deficit Treasury

Lisata Therapeutics,

Stockholders'

Subsidiary Total

Shares Amount

Balance at March 31, 2024 8,308 $ 8 $ 577,283 $ ( 104 ) $ ( 533,482 ) $ ( 708 ) $ 42,997 $ ( 254 ) $ 42,743

Net loss — — — — ( 5,044 ) — ( 5,044 ) — ( 5,044 )

Share-based compensation — — 237 — — — 237 — 237

Net proceeds from issuances of common stock 14 — 32 — — — 32 — 32

Unrealized gain on marketable securities — — — 4 — — 4 — 4

Foreign currency translation adjustment — — — 23 — — 23 — 23

Balance at June 30, 2024 8,322 $ 8 $ 577,552 $ ( 77 ) $ ( 538,526 ) $ ( 708 ) $ 38,249 $ ( 254 ) $ 37,995

Common Stock Additional

9 unchanged sentences

Share-based compensation 157 — 549 — — — 549 — 549

Net proceeds from issuances of common stock 14 — 32 — — — 32 — 32

Unrealized loss on marketable securities — — — ( 9 ) — — ( 9 ) — ( 9 )

Foreign currency translation adjustment — — — ( 26 ) — — ( 26 ) — ( 26 )

Balance at March 31, 2024 8,308 $ 8 $ 577,283 $ ( 104 ) $ ( 533,482 ) $ ( 708 ) $ 42,997 $ ( 254 ) $ 42,743

See accompanying notes to consolidated financial statements.

Balance at June 30, 2024 8,322 $ 8 $ 577,552 $ ( 77 ) $ ( 538,526 ) $ ( 708 ) $ 38,249 $ ( 254 ) $ 37,995

LISATA THERAPEUTICS, INC.

2 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

17 unchanged sentences

Cash flows from financing activities:

Proceeds from exercise of options — 155

Tax withholding payments on net share settlement equity awards ( 142 ) ( 85 )

Net cash used in financing activities ( 142 ) ( 85 )

Net proceeds from issuance of common stock 32 297

Net cash (used in) provided by financing activities ( 110 ) 367

Effect of exchange rate changes on cash ( 29 ) ( 15 )

Net decrease in cash and cash equivalents ( 788 ) ( 3,999 )

Net increase (decrease) in cash and cash equivalents 5,700 ( 8,464 )

Cash and cash equivalents at beginning of period 22,593 32,154

7 unchanged sentences

(together with its subsidiaries, the “Company”) is a clinical-stage pharmaceutical company dedicated to the discovery, development, and commercialization of innovative therapies for the treatment of solid tumors and other major diseases.

The Company's lead investigational product candidate, certepetide (LSTA1), is designed to activate a novel uptake pathway that allows co-administered or tethered (i.e., molecularly bound) anti-cancer drugs to target and penetrate solid tumors more effectively.

The Company's investigational product, certepetide (LSTA1), is designed to activate a novel uptake pathway that allows co-administered or tethered (i.e., molecularly bound) anti-cancer drugs to target and penetrate solid tumors more effectively.

Certepetide actuates this active transport system in a tumor-specific manner, resulting in systemically co-administered anti-cancer drugs more efficiently penetrating and accumulating in the tumor, while normal tissues are expected to be unaffected.

Certepetide also has been shown to modify the tumor microenvironment (“TME”), thereby making tumors more susceptible to immunotherapies and inhibiting the metastasis cascade (i.e., the spread of cancer to other parts of the body).

Certepetide has also been shown to modify the tumor microenvironment (“TME”) by reducing T-regulatory cells and augmenting cytotoxic T cells, thereby making tumors more susceptible to immunotherapies and inhibiting the metastatic cascade (i.e., the spread of cancer to other parts of the body).

The Company and its collaborators have amassed significant non-clinical data demonstrating enhanced delivery of a range of existing and emerging anti-cancer therapies, including chemotherapeutics, immunotherapies, and RNA-based therapeutics.

8 unchanged sentences

Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, the accompanying Consolidated Financial Statements of the Company and its subsidiaries, which are unaudited, include all normal and recurring adjustments considered necessary to present fairly the Company’s financial position as of March 31, 2024, and the results of its operations and its cash flows for the periods presented.

In the opinion of management, the accompanying Consolidated Financial Statements of the Company and its subsidiaries, which are unaudited, include all normal and recurring adjustments considered necessary to present fairly the Company’s financial position as of June 30, 2024, and the results of its operations and its cash flows for the periods presented.

The unaudited consolidated financial statements herein should be read together with the historical consolidated financial statements of the Company for the years ended December 31, 2023 and 2022 included in our 2023 Form 10-K.

Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

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

Use of Estimates

48 unchanged sentences

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset exceeds the fair value of the asset.

If other events or changes in circumstances indicate that the carrying amount of an asset that the Company expects to hold and use may not be recoverable, the Company will estimate the undiscounted future cash flows expected to result from the use of the asset and/or its eventual disposition, and recognize an impairment loss, if any.

impairment loss, if any.

The impairment loss, if determined to be necessary, would be measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets.

4 unchanged sentences

This method incorporates various assumptions such as the risk-free interest rate, expected volatility, expected dividend yield and expected life of the options or warrants.

Stock based compensation expense also includes an estimate, which is made at the time of the grant, of the number of awards that are expected to be forfeited.

Share-based compensation expense also includes an estimate, which is made at the time of the grant, of the number of awards that are expected to be forfeited.

The fair value of the Company’s restricted stock and restricted stock units is based on the closing market price of the Company’s common stock on the date of grant.

9 unchanged sentences

The Company expenses the costs associated with research and development activities when incurred.

To further drive the Company’s initiatives, the Company will continue targeting key governmental agencies, congressional committees and not-for-profit organizations to contribute funds for the Company’s research and development programs.

To further drive the Company’s initiatives, the Company will continue targeting key governmental agencies and not-for-profit organizations to contribute funds for the Company’s research and development programs.

The Company accounts for such grants as a deduction to the related expense in research and development operating expenses when earned.

8 unchanged sentences

The intangible asset is stated at fair value and is amortized using the straight-line method over its estimated useful life of 5 years.

Amortization expense was $ 17 thousand for the three months ended March 31, 2024 and $ 18 thousand for the three months ended March 31, 2023.

Amortization expense was $ 18 thousand and $ 35 thousand for the three and six months ended June 30, 2024, respectively, and $ 18 thousand and $ 35 thousand for the three and six months ended June 30, 2023, respectively.

The intangible asset is reviewed for potential impairment when events or circumstances indicate that carrying amounts may not be recoverable.

15 unchanged sentences

If licenses are bundled with other performance obligations, the Company would utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue.

There was no revenue recognized for the three months ended March 31, 2024 and 2023.

There was no revenue recognized for the three and six months ended June 30, 2024 and 2023.

At the inception of each arrangement that includes milestone payments (variable consideration), the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method.

4 unchanged sentences

Any such adjustments are allocated on a cumulative catch-up basis to satisfied and partially satisfied performance obligations, with the consideration allocated to an ongoing performance obligation being recognized over the period of performance.

For the three months ended March 31, 2024 and March 31, 2023, the Company has not recognized revenue related to milestones.

For the three and six months ended June 30, 2024 and June 30, 2023, the Company has not recognized revenue related to milestones.

For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and for which the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

2 unchanged sentences

The following table is a summary of available-for-sale securities recorded in cash and cash equivalents or marketable securities in our Consolidated Balance Sheets (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value

6 unchanged sentences

The following table summarizes the classification of the available-for-sale securities in the Company's Consolidated Balance Sheets (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Cash equivalents $ 23,860 $ 16,715

2 unchanged sentences

The following table summarizes our portfolio of available-for-sale securities by contractual maturity (in thousands):

March 31, 2024

June 30, 2024

Amortized Cost Estimated Fair Value

4 unchanged sentences

Property and equipment consisted of the following (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Computer equipment 589 589

3 unchanged sentences

Property and equipment, net $ 119 $ 175

The Company’s results included depreciation expense of approximately $ 29 thousand and $ 30 thousand for the three months ended March 31, 2024 and 2023, respectively.

The Company’s results included depreciation expense of approximately $ 56 thousand and $ 60 thousand for the six months ended June 30, 2024 and 2023, respectively.

Note 5 – Income (Loss) Per Share

For the three months ended March 31, 2024 and 2023, the Company incurred net losses and therefore no common stock equivalents were utilized in the calculation of diluted loss per share as they are anti-dilutive in the periods presented.

At March 31, 2024 and 2023, the Company excluded the following potentially dilutive securities (in thousands):

For the six months ended June 30, 2024 and 2023, the Company incurred net losses and therefore no common stock equivalents were utilized in the calculation of diluted loss per share as they are anti-dilutive in the periods presented.

At June 30, 2024 and 2023, the Company excluded the following potentially dilutive securities (in thousands):

Stock options 1,454 1,339

9 unchanged sentences

The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.

The Company's financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 were as follows (in thousands):

March 31, 2024 December 31, 2023

The Company's financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2024 and December 31, 2023 were as follows (in thousands):

June 30, 2024 December 31, 2023

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

2 unchanged sentences

$ 23,860 $ 9,969 $ — $ 33,829 $ 16,715 $ 27,942 $ — $ 44,657

The carrying values of accounts payable and accrued expenses approximate fair value as of March 31, 2024 and December 31, 2023, due to the short maturity nature of these items.

The carrying values of cash, cash equivalents, accounts payable and accrued expenses approximate fair value as of June 30, 2024 and December 31, 2023, due to the short maturity nature of these items.

Note 7 – Accrued Liabilities

Accrued liabilities as of March 31, 2024 and December 31, 2023 were as follows (in thousands):

March 31, 2024 December 31, 2023

Accrued liabilities as of June 30, 2024 and December 31, 2023 were as follows (in thousands):

June 30, 2024 December 31, 2023

Salaries, employee benefits and related taxes $ 1,701 $ 2,665

1 unchanged sentence

Accounting & tax consulting liabilities 126 57

Legal settlement 500 —

Operating lease liabilities — current 176 168

5 unchanged sentences

The Company recognizes lease expense on a straight-line basis over the lease term.

For lease agreements entered into or reassessed after the adoption of Topic 842, the Company elected to account for non-lease components associated with its leases and lease components as a single lease component.

For lease agreements entered into or reassessed after the adoption of ASU No.

2016-02, Leases (Topic 842), the Company elected to account for non-lease components associated with its leases and lease components as a single lease component.

The Company's lease includes an option for the Company to extend the lease term and/or sub-lease space in whole or in part.

Operating lease liabilities and right-of-use assets were recorded in the following captions of our balance sheet as follows (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Right-of-Use Assets:

5 unchanged sentences

Total Operating Lease Liabilities $ 223 $ 305

As of March 31, 2024, the weighted average remaining lease term for our operating lease was 1.5 years, and the weighted average discount rate for our operating lease was 9.625 %.

As of June 30, 2024, the weighted average remaining lease term for our operating lease was 1.25 years, and the weighted average discount rate for our operating lease was 9.625 %.

As of December 31, 2023, the weighted average remaining lease term for our operating leases was 1.75 years, and the weighted average discount rate for our operating leases was 9.625 %.

Future minimum lease payments under the lease agreement as of March 31, 2024 were as follows (in thousands):

Future minimum lease payments under the lease agreement as of June 30, 2024 were as follows (in thousands):

Years ended Operating Leases

12 unchanged sentences

If the Company’s public float exceeds $75.0 million on a future measurement date, it will no longer be subject to the Baby Shelf Limitation.

There were no issuances of common stock under the ATM Agreement for the three months ended March 31, 2024.

There were no issuances of common stock under the ATM Agreement for the three and six months ended June 30, 2024.

Since inception, the Company has issued 64,394 shares of common stock under the ATM Agreement for net proceeds of $ 270,774 .

Stock Options and Warrants

The following table summarizes the activity for stock options and warrants for the three months ended March 31, 2024:

The following table summarizes the activity for stock options and warrants for the six months ended June 30, 2024:

Stock Options Warrants

6 unchanged sentences

Expired ( 1,163 ) 1,165.50 — —

Outstanding at March 31, 2024 1,453,913 $ 9.18 6.18 $ 232.1 1,421,744 $ 42.51 2.00 $ —

Vested at March 31, 2024

Outstanding at June 30, 2024 1,453,913 $ 9.18 5.93 $ 350.2 1,421,744 $ 42.51 1.75 $ —

Vested at June 30, 2024

or expected to vest in the future 1,445,256 $ 9.22 5.91 $ 346.7 1,421,744 $ 42.51 1.75 $ —

Vested at March 31, 2024 1,285,911 $ 9.92 5.75 $ 215.9 1,421,744 $ 42.51 2.00 $ —

Vested at June 30, 2024 1,286,121 $ 9.92 5.50 $ 283.1 1,421,744 $ 42.51 1.75 $ —

Restricted Stock

During the three months ended March 31, 2024 and 2023, the Company issued restricted stock for services as follows (in thousands, except share data):

Three Months Ended March 31,

During the six months ended June 30, 2024 and 2023, the Company issued restricted stock for services as follows (in thousands, except share data):

Six Months Ended June 30,

Number of restricted stock issued 203,800 159,950

1 unchanged sentence

The vesting terms of restricted stock issuances are generally between one and four years .

The following is a summary of the changes in non-vested restricted stock for the three months ended March 31, 2024:

The following is a summary of the changes in non-vested restricted stock for the six months ended June 30, 2024:

Restricted Stock Shares Weighted Average Grant-Date Fair Value

4 unchanged sentences

Forfeited — $ —

Non-vested at March 31, 2024 229,889 $ 3.67

Non-vested at June 30, 2024 229,889 $ 3.67

Restricted Stock Units

During the three months ended March 31, 2024 and 2023, the Company issued restricted stock units for services as follows (in thousands, except share data):

Three Months Ended March 31,

During the six months ended June 30, 2024 and 2023, the Company issued restricted stock units for services as follows (in thousands, except share data):

Six Months Ended June 30,

Number of restricted stock units issued 205,300 188,850

Value of restricted stock units issued $ 632 $ 567

The weighted average estimated fair value of restricted stock units issued for services in the three months ended March 31, 2024 and 2023 was $ 3.08 and $ 3.00 per share, respectively.

The weighted average estimated fair value of restricted stock units issued for services in the six months ended June 30, 2024 and 2023 was $ 3.08 and $ 3.00 per share, respectively.

The fair value of the restricted stock units was determined using the Company’s closing stock price on the date of issuance.

The vesting terms of restricted stock unit issuances are generally one year , or upon the achievement of performance-based milestones.

The following is a summary of the changes in non-vested restricted stock units for the three months ended March 31, 2024:

The following is a summary of the changes in non-vested restricted stock units for the six months ended June 30, 2024:

Restricted Stock Units Weighted Average Grant-Date Fair Value

4 unchanged sentences

Forfeited — $ —

Non-vested at March 31, 2024 110,200 $ 3.45

Non-vested at June 30, 2024 218,100 $ 3.27

Note 10 – Share-Based Compensation

1 unchanged sentence

The Company utilizes share-based compensation in the form of stock options, restricted stock, and restricted stock units.

The following table summarizes the components of share-based compensation expense for the three months ended March 31, 2024 and 2023 (in thousands):

Three Months Ended March 31,

The following table summarizes the components of share-based compensation expense for the three and six months ended June 30, 2024 and 2023 (in thousands):

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

2024 2023 2024 2023

Research and development $ 37 $ 227 $ 123 $ 414

1 unchanged sentence

Total share-based compensation expense $ 237 $ 584 $ 691 $ 1,258

Total compensation cost related to unvested awards not yet recognized and the weighted-average periods over which the awards were expected to be recognized at March 31, 2024 were as follows (in thousands):

Total compensation cost related to unvested awards not yet recognized and the weighted-average periods over which the awards were expected to be recognized at June 30, 2024 were as follows (in thousands):

Stock Options Restricted Stock Units Restricted Stock

1 unchanged sentence

Expected weighted-average period in years of compensation cost to be recognized 2.09 0.69 2.00

Total fair value of shares vested and the weighted average estimated fair values of shares granted for the three months ended March 31, 2024 and 2023 were as follows (in thousands):

Total fair value of shares vested and the weighted average estimated fair values of shares granted for the six months ended June 30, 2024 and 2023 were as follows (in thousands):

Stock Options

Three Months Ended March 31,

Six Months Ended June 30,

Total fair value of shares vested $ 201 $ 641

27 unchanged sentences

The usage of the Company’s NOLs is limited given the change in ownership.

The Company applies the FASB’s provisions for uncertain tax positions.

The Company applies the Financial Accounting Standards Board provisions for uncertain tax positions.

The Company utilizes the two-step process to determine the amount of recognized tax benefit.

16 unchanged sentences

The Company’s Australian subsidiary, which conducts core research and development activities, is eligible to receive a refundable tax incentive between 43.5 % to 48.5 % (depending upon the income tax rate) for qualified research and development activities.

As of the three months ended March 31, 2024 and 2023, the Company had $ 1.0 million and $ 1.0 million, respectively, recorded as an income tax incentive receivable in prepaid and other current assets in the consolidated balance sheets, as the Company determined that the expenses met the eligibility criteria and the amounts claimed are expected to be received shortly after the related tax returns are filed.

As of June 30, 2024 and December 31, 2023, the Company had $ 1.0 million and $ 1.0 million, respectively, recorded as an income tax incentive receivable in prepaid and other current assets in the consolidated balance sheets, as the Company determined that the expenses met the eligibility criteria and the amounts claimed are expected to be received shortly after the related tax returns are filed.

On July 26, 2024, the Company's Australian subsidiary received a $ 0.9 million tax refund from the Australian Taxation Office related to the 2023 tax year.

Note 13 – Contingencies

8 unchanged sentences

Lingmed filed an answer to Cend’s response on July 11, 2022, denying all of the Company’s material allegations.

On March 25, 2024 the Company entered into a settlement agreement whereby the Company is required to pay Lingmed $ 0.5 million within 30 days of the effective date and the Company effected payment on April 4, 2024.

On March 25, 2024 the Company entered into a settlement agreement whereby the Company was required to pay Lingmed $ 0.5 million within 30 days of the effective date and the Company effected payment on April 4, 2024.

Lingmed is also entitled to 5.0 % of any future milestone payments received by the Company under the license agreement with Qilu in addition to a sum of $ 250 thousand with respect to the first future milestone received by the Company.

3 unchanged sentences

In July 2023, the Company entered into a technology transfer agreement with Impilo Therapeutics (“Impilo”) under which the Company transferred its rights to its tumor penetrating nanocomplex (TPN) platform to Impilo.

As consideration for the technology transfer, Impilo issued a total of 766,000 shares of its pre-seed preferred stock to the Company.

On October 3, 2023

in connection with the Sanford Burnham Prebys license agreement (Note 15) Impilo cancelled the original stock certificate for 766,000 shares and reissued 574,500 shares of its pre-seed preferred stock to the Company.

As consideration for the

technology transfer, Impilo issued a total of 766,000 shares of its pre-seed preferred stock to the Company.

On October 3, 2023 in connection with the Sanford Burnham Prebys license agreement (Note 15) Impilo cancelled the original stock certificate for 766,000 shares and reissued 574,500 shares of its pre-seed preferred stock to the Company.

On March 15, 2024, the Company purchased a Simple Agreement for Future Equity ("SAFE") from Impilo for $ 100,000 .

As of March 31, 2024 and December 31, 2023 the Company owned 38.6 % of Impilo.

This investment was expensed under the equity method of accounting for the three months ended March 31, 2024 in other expense,net in the accompanying statement of operations.

As of June 30, 2024 and December 31, 2023 the Company owned 38.6 % of Impilo.

This investment was expensed under the equity method of accounting for the six months ended June 30, 2024 in other expense, net in the accompanying statement of operations.

The SAFE has a valuation cap of $ 30.0 million and an 80 % discount rate.

15 unchanged sentences

Upon termination of the agreement for any reason, all rights and obligations of the Company with respect to the patents and patent applications shall terminate and revert to SBP.

SBP did no t own shares of the Company’s common stock as of March 31, 2024.

SBP did no t own shares of the Company’s common stock as of June 30, 2024.

Note 16 – Research Collaboration and License Agreement

7 unchanged sentences

Unless terminated early, the Qilu Agreement will continue in effect until the expiration of all Qilu payment obligations.

Either party may terminate the Qilu Agreement if an undisputed material breach by the other party is not cured within a defined

period of time, or upon notice for insolvency-related events of the other party that are not discharged within a defined time period.

Either party may terminate the Qilu Agreement if an undisputed material breach by the other party is not cured within a defined period of time, or upon notice for insolvency-related events of the other party that are not discharged within a defined time period.

Qilu may terminate the Qilu Agreement in its entirety, at any time with at least sixty days written notice.

All rights and obligations of Qilu with respect to such licensed patents and patent applications would terminate simultaneously.

Note 17 – Subsequent Events

On April 15, 2024, the Company’s Board of Directors appointed James Nisco as the Company’s Senior Vice President, Finance and Treasury and Chief Accounting Officer, effective immediately.

Effective as of April 15, 2024, Mr.

Nisco shall serve as the Company’s principal financial officer and principal accounting officer.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements