Moleculin Biotech, Inc. 10-Q

Item 1. Financial Statements Moleculin Biotech, Inc. Condensed Consolidated Balance Sheets (in thousands, except for share and per share data) (Unaudited) March 31, December 31, 2024 2023 Assets Current assets: Cash and cash equivalents $ 16,824 $ 23,550 Prepaid expenses and other current assets 2,133 2,723 Total current assets 18,957 26,273 Furniture and equipment, net 240 272 Intangible assets 11,148 11,148 Operating lease right-of-use asset 500 524 Total assets $ 30,845 $ 38,217 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 2,104 $ 2,498 Accrued expenses and other current liabilities 3,304 4,317 Total current liabilities 5,408 6,815 Operating lease liability - long-term, net of current portion 450 474 Warrant liability - long-term 3,400 4,855 Total liabilities 9,258 12,144 Commitments and contingencies (Note 7) Stockholders' equity Preferred stock, $ 0.001 par value; 5,000,000 shares authorized, no shares issued or outstanding — — Common stock, $ 0.001 par value; 100,000,000 shares authorized; 2,311,536 and 2,227,516 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively 2 33 Additional paid-in capital 158,177 157,653 Accumulated other comprehensive income (loss) ( 18 ) ( 9 ) Accumulated deficit ( 136,574 ) ( 131,604 ) Total stockholders’ equity 21,587 26,073 Total liabilities and stockholders’ equity $ 30,845 $ 38,217 See accompanying notes to condensed consolidated financial statements. 3 Table of Contents Moleculin Biotech, Inc. Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except share and per share data) (Unaudited) Three Months Ended March 31, 2024 2023 Revenues $ — $ — Operating expenses: Research and development 4,252 5,687 General and administrative 2,393 2,637 Depreciation and amortization 32 30 Total operating expenses 6,677 8,354 Loss from operations ( 6,677 ) ( 8,354 ) Other income: Gain from change in fair value of warrant liability 1,455 39 Other income, net 11 8 Interest income, net 241 392 Net loss $ ( 4,970 ) $ ( 7,915 ) Net loss per common share - basic and diluted $ ( 2.02 ) $ ( 4.13 ) Weighted average common shares outstanding, basic and diluted 2,466,174 1,916,665 Net Loss $ ( 4,970 ) $ ( 7,915 ) Other comprehensive loss: Foreign currency translation ( 9 ) ( 4 ) Comprehensive loss $ ( 4,979 ) $ ( 7,919 ) See accompanying notes to condensed consolidated financial statements. 4 Table of Contents Moleculin Biotech, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (Unaudited) Three Months Ended March 31, 2024 2023 Cash flows from operating activities: Net loss $ ( 4,970 ) $ ( 7,915 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 32 30 Stock-based compensation 493 499 License rights expense settled in stock — 772 Change in fair value of warrant liability ( 1,455 ) ( 39 ) Operating lease, net 108 110 Changes in operating assets and liabilities: Prepaid expenses and other current assets 590 427 Accounts payable ( 394 ) ( 156 ) Accrued expenses and other current liabilities ( 1,121 ) 255 Net cash used in operating activities ( 6,717 ) ( 6,017 ) Cash flows from financing activities: Proceeds from sale of common stock, net of issuance costs — 141 Net cash provided by financing activities — 141 Effect of exchange rate changes on cash and cash equivalents ( 9 ) ( 4 ) Net decrease in cash and cash equivalents ( 6,726 ) ( 5,880 ) Cash and cash equivalents, - beginning of period 23,550 43,145 Cash and cash equivalents, - end of period $ 16,824 $ 37,265 See accompanying notes to condensed consolidated financial statements. 5 Table of Contents Moleculin Biotech, Inc. Condensed Consolidated Statements of Stockholders’ Equity (in thousands, except for shares) (Unaudited) Three Months Ended March 31, 2024 Common Stock Accumulated Shares Par Value Amount Additional Paid-In Capital Accumulated Deficit Other Comprehensive Income (Loss) Total Stockholders' Equity Balance, December 31, 2023 2,227,516 $ 33 $ 157,653 $ ( 131,604 ) $ ( 9 ) $ 26,073 Issuance of common stock in connection with Consulting Agreements 6,834 — 37 — — 37 Reverse stock split 77,186 ( 31 ) 31 — — — Stock-based compensation — — 456 — — 456 Net loss — — — ( 4,970 ) — ( 4,970 ) Cumulative translation adjustment — — — — ( 9 ) ( 9 ) Balance, March 31, 2024 2,311,536 $ 2 $ 158,177 $ ( 136,574 ) $ ( 18 ) $ 21,587 Three Months Ended March 31, 2023 Common Stock Accumulated Shares Par Value Amount Additional Paid-In Capital Accumulated Deficit Other Comprehensive Income (Loss) Total Stockholders' Equity Balance, December 31, 2022 1,908,522 $ 29 $ 153,985 $ ( 101,835 ) $ 12 $ 52,191 Issuance of common stock with equity purchase agreement 10,026 — 141 — — 141 Common stock issued for license rights 54,808 1 771 — — 772 Stock-based compensation — — 499 — — 499 Net loss — — — ( 7,915 ) — ( 7,915 ) Cumulative translation adjustment — — — — ( 4 ) ( 4 ) Balance, March 31, 2023 1,973,356 $ 30 $ 155,396 $ ( 109,750 ) $ 8 $ 45,684 See accompanying notes to condensed consolidated financial statements. 6 Table of Contents Moleculin Biotech, Inc. Notes to the Condensed Consolidated Financial Statements (Unaudited) 1. Nature of Business The terms “MBI” or “the Company”, “we”, “our” and “us” are used herein to refer to Moleculin Biotech, Inc. MBI is a clinical-stage pharmaceutical company, organized as a Delaware corporation in July 2015, with clinical programs for hard-to-treat cancers and viruses. The Company has three core technologies, each of which have had one or more drugs successfully complete a Phase 1 clinical trial, based substantially on discoveries made at and licensed from MD Anderson Cancer Center (MD Anderson) in Houston, Texas. The Company has two wholly owned subsidiaries, Moleculin Australia Pty. Ltd., which was set up to perform certain preclinical development and Moleculin Amsterdam B.V., which acts as its legal representative for clinical trials in Europe. The Company utilizes its own internal resources and funds to conduct some of these trials and also has trials being conducted via physician-sponsored trials. The physician-sponsored trials utilize primarily external funds, such as grant funds, which are not presented in these financial statements. The Company does not have manufacturing facilities and all manufacturing activities are contracted out to third parties. Additionally, the Company does not have a sales organization. The Company’s overall strategy is to seek potential out-licensing or outsourcing opportunities with development/commercialization strategic partners who are better suited for the marketing, sales and distribution of its drugs, if approved. In 2019, the Company sublicensed its technologies to Animal Life Sciences, Inc. (ALI), to enable research and commercialization for non-human use and share development data. As part of this agreement, ALI issued to the Company a 10 % equity interest in ALI. On May 5, 2023, the Company received a letter from the Nasdaq Capital Market (Nasdaq) notifying the Company that for the prior 30 consecutive business days the bid price for the Company's common stock had closed below the minimum $ 1.00 per share requirement for continued inclusion on Nasdaq pursuant to Nasdaq Listing Rule 5550 (a)( 2 ) (Bid Price Rule). The deficiency letter did not result in the immediate delisting of the Company's common stock from the Nasdaq. In accordance with Nasdaq Listing Rule 5810 (c)( 3 )(A), the Company was provided an initial period of 180 calendar days, until November 1, 2023, to regain compliance with the Bid Price Rule. On November 2, 2023, the Company received a 180 -calendar day extension, until April 29, 2024, from the Nasdaq to regain compliance with Bid Price Rule. On March 5, 2024, the Board of Directors approved a reverse 1 -for- 15 reverse stock split effective 11:59 P.M. (Eastern time) on March 21, 2024, with trading to commence on a split-adjusted basis on March 22, 2024. On April 8, 2024, the Company received a letter from Nasdaq notifying the Company that it had regained compliance with Bid Price Rule 5550 (a)( 2 ) as a result of the closing bid price of the Company's common stock being at $ 1.00 per share or greater for the 10 consecutive business days from March 22, 2024 through April 5, 2024. Accordingly, the Company is in compliance with the Bid Price Rule and Nasdaq considers the matter closed. 2. Basis of presentation, principles of consolidation, and significant accounting policies and liquidity Reverse Stock Split - On March 22, 2024, the Company completed a reverse stock split of all the issued and outstanding shares of the Company's common stock at a ratio of 1 to 15 . The accompanying consolidated financial statements and notes to the consolidated financial statements gives retroactive effect to the reverse stock split for all periods presented. Certain amounts previously reported include rounding up of fractional shares as a result of the reverse stock split. Basis of Presentation – Condensed Consolidated Financial Information - The accompanying condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP) for financial information, and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC) with respect to Form 10 -Q and Article 8 of Regulation S- X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated financial statements furnished reflect all normal adjustments, which are, in the opinion of management, necessary for a fair statement of results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These condensed consolidated financial statements should be read in conjunction with the audited financial statements of the Company as of December 31, 2023 and for the year then ended, including the notes thereto contained in the Form 10 -K filed with the SEC on March 22, 2024. Principles of Consolidation - The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP. The Company views its operations and manages its business in one operating segment. All material long-lived assets of the Company reside in the U.S. 7 Table of Contents Significant Accounting Policies - The Company's significant accounting policies are described in Note 2, Basis of Presentation, principles of consolidation and significant accounting policies , to the consolidated financial statements included in the Company's Annual Report on Form 10 -K for the year ended December 31, 2023 . There have been no material changes to the significant accounting policies during the three months ended March 31, 2024 . Use of Estimates - The preparation of these condensed consolidated financial statements 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 expenses during the reporting period. Actual results could differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. This process may result in actual results differing materially from those estimated amounts used in the preparation of financial statements. Estimates are used in the following areas, among others: fair value estimates on intangible assets, warrants, and stock-based compensation expense, as well as accrued expenses and taxes. Going Concern and Liquidity - 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 necessary equity financing to continue operations and the attainment of profitable operations. As of March 31, 2024 , the Company had an accumulated defici t of $ 136.6 million since inception and had not yet generated any revenues from operations. Additionally, management anticipates that its cash on hand of $ 16.8 million a s of March 31, 2024 is not sufficient to fund its planned operations for a period of at least one year from when these consolidated financial statements are issued. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. These unaudited condensed consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company intends to seek additional funding through one or more of the following: a combination of equity offerings, debt financings, government or other third -party funding, commercialization, marketing and distribution arrangements, other collaborations, strategic alliances and licensing arrangements and delay planned cash outlays or a combination thereof. There can be no assurance that such events or a combination thereof can be achieved. In March 2022, the Company received a subpoena from the SEC requesting information and documents, including materials related to certain individuals ( none of which are the Company's officers or directors) and entities, and materials related to the development of and statements regarding the Company's drug candidate for the treatment of COVID- 19. The Company has received, and expects to continue to receive, periodic further requests from the SEC staff with respect to this matter. The Company is not aware of the specific nature of the underlying investigation by the SEC, and to the extent that this investigation relates to prior public disclosures that it has made, the Company believes in the accuracy and adequacy of such prior disclosures. The correspondence from the SEC transmitting the subpoena to the Company states that the SEC is trying to determine whether there have been any violations of federal securities laws, but that its investigation does not mean that the SEC has concluded that anyone has violated the law or that the SEC has a negative opinion of any person, entity, or security. The Company cannot predict when this matter will be resolved or what, if any, action the SEC may take following the conclusion of the investigation. During the three months ended March 31, 2024 and 2023 , the Company expensed approximately $ 0.1 million and $ 0.5 milli on, respectively, in related general and administrative fees and expenses. The Company is in the process of filing a claim with its insurance carriers related to this loss which may cover a portion of the related expenses but not all. The claim is currently under review by the insurance company. The claim has not yet been approved nor has a reimbursement amount been determined which, if any, would be limited by the applicable retention as defined under the policy . Accordingly, the Company has not recorded any provision for insurance reimbursement. The Company expects to record the insurance reimbursement at the time that the amount to be reimbursed is determined and approved by the insurance carrier. Any insurance reimbursement receivable will be recorded at an amount not to exceed the recorded loss and only if the terms of the legally enforceable insurance contracts support that the insurance recovery will not be disputed and is deemed collectible, or if recovery of the loss is probable. Cash and Cash Equivalents - Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company maintains cash accounts principally at one financial institution in the U.S., which at times, may exceed the Federal Deposit Insurance Corporation’s limit. The Company has not experienced any losses from cash balances in excess of the insurance limit. The Company’s management does not believe the Company is exposed to significant credit risk at this time due to the financial condition of the financial institution where its cash is held. Fair Value of Financial Instruments - The Company's financial instruments consist primarily of non-trade receivables, accounts payable, accrued expenses and its warrant liability. The carrying amount of non-trade receivables, accounts payable, and accrued expenses approximates their fair value because of the short-term maturity of such. 8 Table of Contents The Company has categorized its assets and liabilities that are valued at fair value on a recurring basis into a three -level fair value hierarchy in accordance with U.S. GAAP. 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. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1 ) and lowest priority to unobservable inputs (Level 3 ). Assets and liabilities recorded in the balance sheets at fair value are categorized based on a hierarchy of inputs as follows: Level 1 – Unadjusted quoted prices in active markets of identical assets or liabilities. Level 2 – Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 – Unobservable inputs for the asset or liability. The Company’s financial assets and liabilities recorded at fair value on a recurring basis include the fair value of warrant liability discussed in Note 4. The following table provides the financial liabilities reported at fair value and measured on a recurring basis at March 31, 2024 and December 31, 2023 (table in thousands): Description Fair Value Level 1 Level 2 Level 3 Fair value of warrant liability as of March 31, 2024: $ 3,400 $ — $ — $ 3,400 Fair value of warrant liability as of December 31, 2023: $ 4,855 $ — $ — $ 4,855 The table below of Level 3 liabilities (table in thousands) begins with the valuation as of the beginning of the first quarter and then is adjusted for changes in fair value that occurred during the first quarter. The ending balance of the Level 3 financial instrument presented above represents the Company's best estimates and may not be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. Three Months Ended March 31, 2024 Warrant Liability Long-Term Balance, December 31, 2023 $ 4,855 Change in fair value - net ( 1,455 ) Balance, March 31, 2024 $ 3,400 Loss Per Common Share - Basic net loss per common share is computed by dividing net loss available to common shareholders by the weighted-average number of common shares outstanding during the period. For purposes of this calculation, options to purchase common stock, restricted stock units subject to vesting and warrants to purchase common stock are considered to be common stock equivalents. Diluted net 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. For the three months ended March 31, 2024 and 2023 , approximatel y 1.7 million and 0.4 million, respectively, of potentially dilutive shares were excluded from the computation of diluted earnings per share due to their anti-dilutive effect. Subsequent Events - The Company’s management reviewed all material events through the date of these unaudited condensed consolidated financial statements. See Note 8 - Subsequent Events. Recent Accounting Pronouncements - There are no recently issued accounting standards updates that are currently expected to have a material impact on the Company. 9 Table of Contents 3. Accrued expenses and other current liabilities Accrued expenses and other current liabilities consist of the following components (in thousands): March 31, 2024 December 31, 2023 Accrued research and development $ 1,565 $ 2,845 Accrued payroll and bonuses 1,092 765 Accrued legal, regulatory, professional and other 477 547 Operating lease liability - current 109 100 Accrued liabilities due to related party 61 60 Total accrued expenses and other current liabilities $ 3,304 $ 4,317 Additionally, accounts payable inclu des $ 74,000 a nd $ 67,000 as of March 31, 2024 and December 31, 2023 , respectively, for related party payables. 4. Warrants Liability Classified Warrants The Company uses the Black-Scholes option pricing model (BSM) to determine the fair value of its warrants at the date of issue and outstanding at each reporting date. The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds linearly interpolated to obtain a maturity period commensurate with the term of the warrants. Estimated volatility is a measure of the amount by which the Company's stock price is expected to fluctuate each year during the expected life of the warrants. Only the volatility of the Company's own stock is used in the Black-Scholes option pricing model. The assumptions used in determining the fair value of the Company's outstanding liability classified warrants are as follows: March 31, 2024 December 31, 2023 Risk-free interest rate 4.2 % to 5.5 % 3.8 % to 5.4 % Volatility 88.1 % to 108.7 % 79.5 % to 108.7 % Expected life (years) 0.1 to 4.7 0.3 to 5.0 Dividend yield —% —% A summary of the Company's liability classified warrant activity during the three months ended March 31, 2024 and related information follows: Number of Shares Range of Warrant Exercise Weighted Average Weighted Average Remaining Contractual Under Warrant Price per Share Exercise Price Life (Years) Balance at January 1, 2024 1,082,895 $ 9.60 $ 157.50 $ 24.32 5.1 Expired warrants ( 17,573 ) $ 99.00 $ 99.00 $ 99.00 — Balance at March 31, 2024 1,065,322 $ 9.60 $ 157.50 $ 23.09 4.4 Exercisable at March 31, 2024 1,065,322 $ 9.60 $ 157.50 $ 23.09 4.4 For a summary of the changes in fair value associated with the Company's warrant liability for the three months ended March 31, 2024 , see Note 2 - Basis of presentation, principles of consolidation and significant accounting policies - Fair Value of Financial Instruments. Equity Classified Warrants In March 2024, the Company granted equity-classified warrants to purchase up to 3,334 shares of Company common stock with a ten -year term and an exercise price of $ 9.15 . The warrants vest annually over four years while services are being performed. At March 31, 2024 , the Company had 292,611 eq uity classified warrants outstanding an d 266,591 w arrants were exercisable. At December 31, 2023 , the Company had 289,276 equity classified warrants outstanding and 266,350 warrants were exercisable. 10 Table of Contents The Company recorded stock compensation expense for the non-employee consulting agreements o f $ 34,000 a nd $ 46,000 for the three months ended March 31, 2024 and 2023 , respectively. At March 31, 2024 , there was $ 344,000 of unrecognized stock compensation expense related to the Company's equity classified warrants. 5. Equity Lincoln Park Equity Line The Company did not utilize the 2021 Lincoln Park purchase agreement during the three months ended March 31, 2024 . The 2021 Lincoln Park Agreement, which h as $ 19.8 mi llion available as of March 31, 2024 , terminates on July 1, 2024. The Company is in discussions with Lincoln Park Capital to effect the extension of this agreement. The Company intends to seek an extension of this agreement prior to termination, however no agreement has been reached as of the date these unaudited consolidated financial statements were issued. In the December 2023 Offering, the Company agreed not to utilize the Lincoln Park Agreement or any such extension thereof, until after June 26, 2024. Other Components of Equity In March 2024, the Company issued 6,834 shares of common stock to consultants in exchange for services to be provided. Stock-Based Compensation and Outstanding Awards The 2015 Stock Plan provides for the grant of stock options, stock awards, stock unit awards, and stock appreciation rights to employees, non-employee directors and consultants. In May 2023 and 2022, the 2015 Stock Plan (the Plan) was amended to authorize an additional 116,667 shares and 133,334 shares, respectively, such that 366,667 total shares may be issued under the Plan. As of March 31, 2024 , there wer e 2,053 shar es remaining to be issued under the 2015 Stock Plan. Stock-based compensation expense for the three months ended March 31, 2024 and 2023 , respectively, is as follows (table in thousands): Three Months Ended March 31, 2024 2023 General and administrative $ 381 $ 369 Research and development 112 130 Total stock-based compensation expense $ 493 $ 499 On May 8, 2024 the Company issued 1,000 options to purchase the company stock under the 2015 Stock Plan each to two Science Advisory Board members. 6. Income Taxes Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company does not expect to pay any significant federal, state, or foreign income taxes in 2024 as a result of the losses recorded during the three months ended March 31, 2024 and the additional losses expected for the remainder of 2024 and cumulative net operating loss carryforwards. Accounting standards require the consideration of a valuation allowance for deferred tax assets if it is “more likely than not” that some component or all of the benefits of deferred tax assets will not be realized. As a result, as of March 31, 2024 and December 31, 2023 the Company maintained a full valuation allowance for all deferred tax assets. The Company recorded no income tax provision for the three months ended March 31, 2024 and 2023 , respectively. The effective tax rate for the three months ended March 31, 2024 and 2023 is nil. The income tax rates vary from the federal and state statutory rates primarily due to the change in fair value of the stock warrants, Internal Revenue Code Section 162 (m) limitations and ISO activity, as well as the valuation allowances on the Company’s deferred tax assets. The Company estimates its annual effective tax rate at the end of each quarterly period. Jurisdictions with a projected loss for the year where no tax benefit can be recognized due to the valuation allowance could result in a higher or lower effective tax rate during a particular quarter depending on the mix and timing of actual earnings versus annual projections. 11 Table of Contents 7. Commitments and Contingencies In addition to the commitments and contingencies described elsewhere in these notes, see below for a discussion of the Company's commitments and contingencies as of March 31, 2024 . Lease Obligations Payable The following summarizes quantitative information about the Company's operating leases for the three months ended March 31, 2024 and 2023 , respectively (table in thousands): Three Months Ended March 31, 2024 2023 Lease cost: Operating lease cost $ 38 $ 33 Variable lease cost 2 7 Total $ 40 $ 40 I n September 2023, th e Company executed an amendment to extend the corporate office lease until August 31, 2029, with an option to renew. The Company is required to remit base monthly rent of a pproximately $ 4,700 which will increase at an average approximate rate of 2 % each year. The Company is also required to pay additional rent in the form of its pro-rata share of certain specified operating expenses of the building. In June 2022, the Company extended the lab lease until September 30, 2027, with no further right or option to renew. The Company recorded approximately $ 12,000 i n sublease income from a related party for the three months ended March 31, 2024 and 2023 , respectively. Sublease income is recorded as other income, net on the Company's condensed consolidated statement of operations and comprehensive loss. Operating cash flows from operating leases w as $ 29,000 and $ 38,000 for the three months ended March 31, 2024 and 2023 , respectively . Licenses MD Anderson - Total expenses related to the Company's license agreements with MD Anderson w ere $ 54,000 and $ 64,000 for the three months ended March 31, 2024 and 2023 , respectively . HPI - The Company has two agreements with a related party, Houston Pharmaceuticals, Inc. (HPI) with total expenses o f $ 59,000 for e ach of the three months ended March 31, 2024 and 2023 , respectively. Sponsored Research Agreements - The expenses recognized under the agreements were $ 156,000 and $ 155,000 for the three months ended March 31, 2024 and 2023 , respectively . 8. Subsequent Events In addition to the subsequent events discussed elsewhere in these notes, no other subsequent events were noted as occurring after March 31, 2024 . 12 Table of Contents