What changed in this filing

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Item 1. Financial Statements

2024-11-14 compared with 2024-08-14 · 232 added, 178 removed, 362 unchanged (53% of the section changed)

3 unchanged sentences

(Amounts in thousands, except share and per

September 30,

Current assets:

13 unchanged sentences

Preferred stock, $ 0.0001 par value, 100,000,000 shares authorized;

no shares issued and outstanding at June 30, 2024 and December 31, 2023

no shares issued and outstanding at September 30, 2024 and December 31, 2023

Common stock, $ 0.0001 par value, 100,000,000 shares authorized;

510,188 and 416,368 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

958,219 and 416,368 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Operating expenses:

14 unchanged sentences

(Amounts in thousands, except share data)

D Preferred Stock

the Three and Six Months Ended

Series D Preferred Stock

For the Three and Nine Months Ended

September 30, 2024

Balance at December 31, 2023

1 unchanged sentence

Issuance of common stock upon exercise of warrants

Issuance of common stock upon vesting of restricted

Issuance of common stock upon vesting of restricted stock units

Shares withheld for payroll taxes

5 unchanged sentences

$ ( 143,206 )

D Preferred Stock

For the Three and Six Months Ended

Cash-in-lieu of fractional shares for reverse stock split

Issuance of common stock and warrants, net of offering costs

Issuance of common stock upon exercise of warrants

Stock-based compensation expense

Balance at September 30, 2024

$ ( 144,730 )

Series D Preferred Stock

For the Three and Nine Months Ended

September 30, 2023

Balance at December 31, 2022

$ ( 128,380 )

Cash-in-lieu of fractional shares for reverse stock

Cash-in-lieu of fractional shares for reverse stock split

Redemption of preferred stock

Issuance of common stock upon vesting of restricted

Issuance of common stock upon vesting of restricted stock units

Shares withheld for payroll taxes

2 unchanged sentences

$ ( 131,982 )

Issuance of common stock and warrants, net of offering

Issuance of common stock and warrants, net of offering costs

Issuance of common stock upon exercise of warrants

2 unchanged sentences

$ ( 134,531 )

Issuance of common stock upon exercise of warrants

Issuance of common stock upon vesting of restricted stock units

Shares withheld for payroll taxes

Stock-based compensation expense

Balance at September 30, 2023

$ ( 137,311 )

The accompanying notes are an integral part of

3 unchanged sentences

(Amounts in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

18 unchanged sentences

Payment of taxes on net share settlements of restricted stock units

Net cash (used in) provided by financing activities

Net cash provided by financing activities

Net decrease in cash, cash equivalents and restricted cash

3 unchanged sentences

of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the totals above:

September 30,

Cash and cash equivalents

110 unchanged sentences

Collaboration Agreement

February 2021, the Company entered into a clinical co-development collaboration agreement (the “ Clinical Co-Development

Agreement ”) with AgonOx, a private company developing a pipeline of novel immunotherapy drugs targeting key regulators of

the immune response to cancer.

On May 8, 2024, the Company terminated the Clinical Co-Development Agreement with AgonOx, which such

termination was effective immediately.

Under the Clinical Co-Development Agreement, Phio and AgonOx were working to develop a T

cell-based therapy using the Company’s lead product candidate, PH-762, and AgonOx’s “double positive” tumor

infiltrating lymphocytes (“ DP TIL ”) technology.

Per the terms of the Clinical Co-Development Agreement, the

Company had agreed to reimburse AgonOx up to $ 4,000,000 in expenses incurred to conduct a Phase 1 clinical trial of PH-762 treated

DP TIL in patients with advanced melanoma and other advanced solid tumors and was entitled to certain future development milestones

and low single-digit sales-based royalty payments from AgonOx licensing its DP TIL technology.

recognized its share of costs arising from research and development activities performed by AgonOx in the Company’s condensed consolidated

financial statements in the period AgonOx incurred such expense.

February 2021, the Company entered into a clinical co-development collaboration agreement (the “ Clinical Co-Development Agreement ”)

with AgonOx, a private company developing a pipeline of novel immunotherapy drugs targeting key regulators of the immune response to cancer.

On May 8, 2024, the Company terminated the Clinical Co-Development Agreement with AgonOx, which such termination was effective immediately.

Under the Clinical Co-Development Agreement, Phio and AgonOx were working to develop a T cell-based therapy using the Company’s

lead product candidate, PH-762, and AgonOx’s “double positive” tumor infiltrating lymphocytes (“ DP TIL ”)

Per the terms of the Clinical Co-Development Agreement, the Company had agreed to reimburse AgonOx up to $ 4,000,000 in expenses

incurred to conduct a Phase 1 clinical trial of PH-762 treated DP TIL in patients with advanced melanoma and other advanced solid tumors

and was entitled to certain future development milestones and low single-digit sales-based royalty payments from AgonOx licensing its

DP TIL technology.

Company recognized its share of costs arising from research and development activities performed by AgonOx in the Company’s condensed

consolidated financial statements in the period AgonOx incurred such expense.

Effective as of the date of termination, the Clinical Co-Development

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Company will pay to AgonOx all Company payment obligations that accrued prior to the termination of the Clinical Co-Development Agreement.

Remaining payments to be made to AgonOx as of June 30, 2024 were $344,000, which primarily related to accrued obligations for patient

fees and other miscellaneous costs as of the date of termination.

Pursuant to the terms of the Clinical Co-Development Agreement, the

Company and AgonOx are coordinating the orderly wind-down of the Phase 1 clinical trial.

Remaining payments to be made to AgonOx as of September 30, 2024 were $35,000, which primarily related to remaining accrued obligations

for patient fees and other miscellaneous costs as of the date of termination.

Pursuant to the terms of the Clinical Co-Development Agreement,

the Company and AgonOx are coordinating the orderly wind-down of the Phase 1 clinical trial.

Each of the Company and AgonOx shall be responsible

for its own costs and expenses incurred in connection with the wind-down of the Phase 1 clinical trial.

Company recognized approximately $ 56,000

and $ 106,000

of expense in connection with the Clinical Co-Development Agreement during the three and six months ended June 30, 2024, respectively,

which relate to the Company’s expense obligations under the Clinical Co-Development Agreement through the date of termination.

The Company recognized approximately $ 181,000

and $ 300,000

of expense in connection with the Clinical Co-Development Agreement during the three and six months ended June 30, 2023, respectively.

Company recognized approximately $ 308,000 and $ 414,000 in connection with the Clinical Co-Development Agreement during the

three and nine months ended September 30, 2024, respectively, which relate to

the Company’s expense obligations under the Clinical Co-Development Agreement through the date of termination.

recognized approximately $ 606,000 and

expense in connection with the Clinical Co-Development Agreement during the three and nine months ended September 30, 2023,

respectively.

Fair Value of Financial Instruments

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at the measurement date.

As of June 30, 2024, the Company

categorized its cash equivalents as Level 1 hierarchy as the carrying amounts approximate their fair value due to their short-term nature

and market rates of interest.

As of September 30, 2024,

the Company categorized its cash equivalents as Level 1 hierarchy as the carrying amounts approximate their fair value due to their short-term

nature and market rates of interest.

As of December 31, 2023, the Company did not identify any financial instruments required to be presented

1 unchanged sentence

Schedule of financial instruments at fair value

June 30, 2024

September 30, 2024

Quoted Prices

5 unchanged sentences

accounts payable and accrued expenses of the Company approximate their fair values due to their short-term nature.

The Company entered into

a lease for a laboratory facility located at 17 Briden Street, Worcester, Massachusetts, which covers 321

square feet of rentable space.

The Company entered into a

lease for a laboratory facility located at 17 Briden Street, Worcester, Massachusetts, which covers 321 square feet of rentable space.

The lease commenced on March 1, 2024 and had an original expiration date of August 31, 2024 .

The Company has the option to renew the lease for additional 6-month periods.

On June 1, 2024, the Company elected

the option to renew the lease for an additional 6-month period, and the lease will expire on February 28, 2025.

The Company made an

accounting policy election under the FASB ASC Topic 824, “ Leases ” not to recognize leases with a term less than

one year on the balance sheet and that do not contain a purchase option.

Under the short-term lease election, the Company will

recognize the lease payments for the laboratory facility on a straight-line basis over the lease term.

The total base rent for

the premises over each 6-month term is expected to be $ 15,000 .

During the three and six month periods ending June 30, 2024, the Company recognized $ 8,180

and $ 10,780 ,

respectively, of rent expense and variable lease costs related to the laboratory facility.

The Company has the option to renew the lease

for additional 6-month periods.

On June 1, 2024, the Company elected the option to renew the lease for an additional 6-month period, and

the lease will expire on February 28, 2025.

The Company made an accounting policy election under the FASB ASC Topic 842, “ Leases ”

not to recognize leases with a term less than one year on the balance sheet and that do not contain a purchase option.

Under the short-term

lease election, the Company will recognize the lease payments for the laboratory facility on a straight-line basis over the lease term.

The total base rent for the

premises over each 6-month term is expected to be $ 15,000 .

During the three and nine month periods ending September 30, 2024, the Company

recognized $ 8,129 and $ 18,909 , respectively, of rent expense and variable lease costs related to the laboratory facility.

The Company’s lease

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former corporate headquarters represented all of the Company’s capitalized lease obligations.

The amounts reported in

the condensed consolidated balance sheets for the Company’s former corporate headquarters classified as an operating lease in

which the Company is the lessee and other supplemental balance sheet information is set forth as follows, in thousands, except the

lease term (number of years) and discount rate:

The amounts reported in the

condensed consolidated balance sheets for the Company’s former corporate headquarters classified as an operating lease in which

the Company is the lessee and other supplemental balance sheet information is set forth as follows, in thousands, except the lease term

(number of years) and discount rate:

Schedule of lease amounts recorded in balance sheet

September 30,

Right of use asset

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Weighted average discount rate

There were no

operating lease costs for our former corporate headquarters included in operating expense for the three months ended June 30, 2024.

Operating lease costs for our former corporate headquarters included in operating expense were $ 33,000

for the three months ended June 30, 2023 and $ 33,000

for the six months ended June 30, 2024 and 2023, respectively.

cash paid for the amounts included in the measurement of the operating lease liability on the Company’s condensed consolidated

balance sheets and included within changes in the lease liability in the operating activities of the Company’s condensed

consolidated statements of cash flows for the Company’s former corporate headquarters for the three months ended June 30,

Cash paid for the amounts included in the measurement of the operating lease liability on the Company’s condensed

consolidated balance sheets and included within changes in the lease liability in the operating activities of the Company’s

condensed consolidated statements of cash flows for the Company’s former corporate headquarters was $ 35,000

for the three months ended June 30, 2023 and $ 35,000

for the six months ended June 30, 2024 and 2023, respectively.

There were no operating lease

costs for our former corporate headquarters included in operating expense for the three months ended September 30, 2024.

Operating lease

costs for our former corporate headquarters included in operating expense were $ 33,000 for the three months ended September 30, 2023.

Operating expenses were $ 33,000 and $ 99,000 for the nine months ended September 30, 2024 and 2023, respectively.

The Company’s condensed

consolidated statements of cash flows for the Company’s former corporate headquarters was $ 35,000

and $ 104,000 for the nine months

ended September 30, 2024 and 2023, respectively.

Stockholders’ Equity

Financing — On May 16, 2024, the Company entered into a purchase agreement (the “ Purchase Agreement ”)

with Triton Funds LP (“ Triton ”), pursuant to which the Company agreed to sell, and Triton agreed to purchase,

upon the Company’s request in one or more transactions, up to 95,833

shares of the Company’s common stock at a purchase price of $ 6.48

per share (the “ Purchase Price ”), for aggregate gross proceeds of up to $ 621,000 .

The Company recorded expense of approximately $100,000, primarily related to legal fees, in connection with the execution of the

Purchase Agreement with Triton.

On July 3, 2024, the Company terminated the Purchase Agreement with Triton effective immediately.

shares of common stock were sold by the Company pursuant to the Purchase Agreement prior to termination.

May 2024 Financing

— On May 16, 2024, the Company entered into a purchase agreement (the “ Purchase Agreement ”) with Triton Funds

LP (“ Triton ”), pursuant to which the Company agreed to sell, and Triton agreed to purchase, upon the Company’s

request in one or more transactions, up to 95,833 shares of the Company’s common stock at a purchase price of $ 6.48 per share (the

“ Purchase Price ”), for aggregate gross proceeds of up to $ 621,000 .

The Company recorded expense of approximately $100,000,

primarily related to legal fees, in connection with the execution of the Purchase Agreement with Triton.

On July 3, 2024, the Company

terminated the Purchase Agreement with Triton effective immediately.

No shares of common stock were sold by the Company pursuant to the

Purchase Agreement prior to termination.

Financing — On July 11, 2024, the Company entered into inducement letter agreements (the “ July 2024 Inducement

Letter Agreements ”) with certain holders of certain of the Company’s existing warrants to purchase up to an

aggregate of 545,286

shares of the Company’s common stock.

The existing warrants were originally issued in February 2020 through December 2023,

having exercise prices between $324.00 and $9.72 per share.

Pursuant to the July 2024 Inducement Letter Agreements, these warrants

were exercised for cash at a reduced exercise of $ 5.45

per share in consideration of the Company’s agreement to issue new unregistered five and one-half year term Series C warrants

to purchase up to 583,098

shares of common stock at an exercise price of $ 5.45

and new unregistered eighteen month term Series D warrants to purchase up to 507,474

shares of common stock at an exercise price of $ 5.45 ,

both issued and sold at a price of $0.125 per warrant share (the “ July 2024 Financing ”).

In addition, the Company

issued warrants to the placement agent, HCW, to purchase a total of 40,896 shares of common stock at an exercise price of $6.8125

The net proceeds to the Company from the July 2024 Financing were approximately $ 2,646,000 ,

after deducting placement agent fees and offering expenses.

The Company incurred non-cash equity issuance cost of approximately $ 2.4 million for the incremental fair value

of the outstanding equity classified warrants and approximately $ 0.2 million for placement agent warrants.

Pursuant to the terms of the

July 2024 Inducement Letter Agreements, in the event that the exercise of the existing warrants in the July 2024 Financing would have

otherwise caused a holder to exceed the beneficial ownership limitations set forth in the existing warrant, the Company issued the number

of shares that would not cause a holder to exceed such beneficial ownership limitation and agreed to hold such balance of shares of common

stock in abeyance.

Accordingly, an aggregate of 328,758 shares of common stock were held in abeyance (the “ July 2024 Abeyance

Shares ”) with such July 2024 Abeyance Shares evidenced through the holder’s existing warrants and which are deemed to

The July 2024 Abeyance Shares were held until notice was received by the holder that the balance of the shares of common stock

could be issued in compliance with such beneficial ownership limitations and were exercised pursuant to a notice of exercise from the

Until such time, the Abeyance Shares were evidenced through the holder’s existing warrants and have been included in the

Company’s table of outstanding warrants below.

During the three months ended September 30, 2024, 231,758 of the July 2024 Abeyance

Shares were released.

The remainder of the July 2024 Abeyance Shares were subsequently released in October 2024.

April 2023 Financing

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issuance cost and recorded in additional paid in capital per ASC 815.

Financing — On June 2, 2023, the Company completed a registered direct offering and a concurrent private placement of a

registered shares and 8,000

unregistered shares of the Company’s common stock each at a purchase price per share of $ 38.52 ,

unregistered pre-funded warrants to purchase up to an aggregate of 69,881

shares of common stock at a purchase price per share of $ 38.511

and with a pre-funded warrant exercise price of $ 0.009

per share, unregistered five and one-half year term Series A warrants to purchase up to an aggregate of 103,842

shares of common stock at an exercise price of $ 36.27

per share and unregistered eighteen month term Series B warrants to purchase up to an aggregate of 103,842

shares of common stock at an exercise price of $ 36.27

per share (collectively, the “ June 2023 Financing ”).

In addition, the Company issued unregistered warrants to the

placement agent, HCW, in the June 2023 Financing to purchase a total of 7,788

shares of common stock at an exercise price of $ 48.15

June 2023 Financing

— On June 2, 2023, the Company completed a registered direct offering and a concurrent private placement of a total of:

25,961 registered

shares and 8,000 unregistered shares of the Company’s common stock each at a purchase price per share of $ 38.52 , unregistered pre-funded

warrants to purchase up to an aggregate of 69,881 shares of common stock at a purchase price per share of $ 38.511 and with a pre-funded

warrant exercise price of $ 0.009 per share, unregistered five and one-half year term Series A warrants to purchase up to an aggregate

of 103,842 shares of common stock at an exercise price of $ 36.27 per share and unregistered eighteen month term Series B warrants to purchase

up to an aggregate of 103,842 shares of common stock at an exercise price of $ 36.27 per share (collectively, the “ June 2023 Financing ”).

In addition, the Company issued unregistered warrants to the placement agent, HCW, in the June 2023 Financing to purchase a total of 7,788

shares of common stock at an exercise price of $ 48.15 per share.

Net proceeds to the Company from the June 2023 Financing were $ 3,510,000

after deducting placement agent fees and offering expenses.

December 2023 Financing — In December 2023, the Company

entered into an inducement letter agreement (the “ December 2023 Inducement Letter Agreement ”) with certain holders

of the Company’s existing warrants to purchase up to an aggregate of 236,695 shares of the Company’s common stock (the “ December

2023 Financing ”).

Pursuant to the terms of the December 2023 Inducement Letter Agreement, in the event that the exercise of

the existing warrants in the December 2023 Financing would have otherwise caused a holder to exceed the beneficial ownership limitations

set forth in the existing warrant, the Company issued the number of shares that would not cause a holder to exceed such beneficial ownership

limitation and agreed to hold such balance of shares of common stock in abeyance.

Accordingly, an aggregate of 91,820 shares of common

stock were held in abeyance (the “ December 2023 Abeyance Shares ”) with such December 2023 Abeyance Shares evidenced

through the holder’s existing warrants and which were deemed to be prepaid.

The December 2023 Abeyance Shares were held until notice

was received by the holder that the balance of the shares of common stock could be issued in compliance with such beneficial ownership

limitations and were exercised pursuant to a notice of exercise from the holder.

Until such time, the December 2023 Abeyance Shares were

evidenced through the holder’s existing warrants and have been included in the Company’s table of outstanding warrants below.

to the terms of the Inducement Letter Agreement, in the event that the exercise of the existing warrants in the December 2023 Financing

would have otherwise caused a holder to exceed the beneficial ownership limitations set forth in the existing warrant, the Company issued

the number of shares that would not cause a holder to exceed such beneficial ownership limitation and agreed to hold such balance of shares

of common stock in abeyance.

Accordingly, at December 31, 2023, an aggregate of 91,819 shares of common stock were held in abeyance

(the “ Abeyance Shares ”) with such Abeyance Shares evidenced through the holder’s existing warrants and which

are deemed to be prepaid.

The Abeyance Shares will be held until notice is received by the holder that the balance of the shares of common

stock may be issued in compliance with such beneficial ownership limitations and may be exercised pursuant to a notice of exercise from

Until such time, the Abeyance Shares are evidenced through the holder’s existing warrants and have been included in

the Company’s table of outstanding warrants below.

The remainder of the December 2023 Abeyance Shares were subsequently released during the first quarter of 2024.

The Company first assesses

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have been classified within stockholder’s equity.

December 2023, the Company entered into an inducement letter agreement (the “ December 2023 Inducement Letter Agreement ”)

with certain holders of the Company’s existing warrants to purchase up to an aggregate of 236,695 shares of the Company’s

common stock (the “ December 2023 Financing ”).

Pursuant to the terms of the December 2023 Inducement Letter Agreement,

in the event that the exercise of the existing warrants in the December 2023 Financing would have otherwise caused a holder to exceed

the beneficial ownership limitations set forth in the existing warrant, the Company issued the number of shares that would not cause a

holder to exceed such beneficial ownership limitation and agreed to hold such balance of shares of common stock in abeyance.

an aggregate of 91,820 shares of common stock were held in abeyance (the “ December 2023 Abeyance Shares ”) with such

December 2023 Abeyance Shares evidenced through the holder’s existing warrants and which were deemed to be prepaid.

2023 Abeyance Shares were held until notice was received by the holder that the balance of the shares of common stock could be issued

in compliance with such beneficial ownership limitations and were exercised pursuant to a notice of exercise from the holder.

time, the December 2023 Abeyance Shares were evidenced through the holder’s existing warrants and have been included in the Company’s

table of outstanding warrants below.

the three months ended June 30, 2024 and 2023, there were no

warrant exercises.

During the six months ended June 30, 2024, all of the December 2023 Abeyance Shares were released and issued, and

during the six months ended June 30, 2023, 19,444

shares of common stock were issued related to the exercise of pre-funded warrants from the June 2023 Financing.

The following table summarizes

the Company’s outstanding warrants, all of which are classified as equity instruments, at June 30, 2024:

the three months ended September 30, 2024, 231,758 of the July 2024 Abeyance Shares were released and issued.

During the three months

ended September 30, 2023, 35,588 shares of common stock were issued related to the exercise of pre-funded warrants from the June 2023

the nine months ended September 30, 2024, all of the December 2023 Abeyance Shares were released and issued and 231,758 of the July 2024

Abeyance Shares were released and issued.

During the nine months ended September 30, 2023, 55,032 shares of common stock were issued related

to the exercise of pre-funded warrants from the June 2023 Financing.

The following table summarizes the Company’s outstanding warrants,

all of which are classified as equity instruments, at September 30, 2024:

Schedule of outstanding warrants

1 unchanged sentence

Outstanding at December 31, 2023

Outstanding at June 30, 2024

Outstanding at September 30, 2024

Stock-based Compensation

4 unchanged sentences

RSUs are generally subject to graded vesting and the satisfaction of certain service requirements.

RSUs granted by the Company to employees generally vest annually over 3 years after the grant date and over 1 year after the grant date

for non-employee members of the Board of Directors.

Upon vesting, each outstanding RSU will be settled for one share of the Company’s

common stock.

Employee RSU recipients may elect to net share settle upon vesting, in which case the Company pays the employee’s

income taxes due upon vesting and withholds a number of shares of equal value.

The Company does not expect to repurchase shares to satisfy

The fair value of the RSUs awarded are based upon the Company’s closing stock price at the grant date and are expensed

over the requisite service period.

RSUs granted by the Company to employees and to non-employee members of the Board of Directors generally vest annually over 1

year after the grant date.

Upon vesting, each outstanding RSU will be settled for one share of the Company’s common stock.

Employee RSU recipients may elect to net share settle upon vesting, in which case the Company pays the employee’s income taxes

due upon vesting and withholds a number of shares of equal value.

The Company does not expect to repurchase shares to satisfy RSU vests.

The fair value of the RSUs awarded are based upon the Company’s closing stock price at the grant date and are expensed over the

requisite service period.

On September 11, 2024, the

Company modified all unvested RSUs to reduce the vesting term for employees from 3 years after the grant date to 1 year after the grant

No incremental expense was recognized as a result of the modification, as the fair value of the RSUs immediately before and after

the modification was unchanged.

The following table summarizes

the activity of the Company’s RSUs for the six months ended June 30, 2024:

the activity of the Company’s RSUs for the nine months ended September 30, 2024:

Summary of RSUs activity

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Unvested units at December 31, 2023

Unvested units at June 30, 2024

There were no RSUs granted

during the three months or six months ended June 30, 2024 or the three months ended June 30, 2023.

The weighted-average fair value of

RSUs granted during the six months ended June 30, 2023 was $ 47.16 .

Stock-based compensation expense

related to RSUs was $ 15,000 and $ 94,000 for the three months ended June 30, 2024 and 2023, respectively.

Granted and accepted

Unvested units at September 30, 2024

The weighted-average fair

value of RSUs granted during both the three and nine months ended September 30, 2024 was $2.77.

There were no RSUs

granted during the three months ended September 30, 2023.

During the nine months ended September 30, 2023, 4,833 RSUs were granted.

The weighted-average fair value of RSUs granted during the nine months ended September 30, 2023 was $ 47.16 .

Stock-based compensation expense

related to RSUs was $ 41,000 and $ 205,000 for the six months ended June 30, 2024 and 2023, respectively.

related to RSUs was $ 52,000 and $ 89,000 for the three months ended September 30, 2024 and 2023, respectively.

Stock-based compensation

expense related to RSUs was $ 99,000 and $ 294,000 for the nine months ended September 30, 2024 and 2023, respectively.

The aggregate fair value of

awards that vested during the six months ended June 30, 2024 and 2023 was $ 17,000 and $ 95,000 , respectively, which represents the market

value of the Company’s common stock on the date that the RSUs vested.

awards that vested during the nine months ended September 30, 2024 and 2023 was $ 21,000 and $ 100,000 , respectively, which represents the

market value of the Company’s common stock on the date that the RSUs vested.

Stock Options

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The Company did not grant

any stock options during the three or six months ended June 30, 2024 and 2023.

any stock options during the three or nine months ended September 30, 2024 and 2023.

The following table summarizes

the activity of the Company’s stock options for the six months ended June 30, 2024:

the activity of the Company’s stock options for the nine months ended September 30, 2024:

Summary of stock options activity

Balance at December 31, 2023

Balance at June 30, 2024

Exercisable at June 30, 2024

Balance at September 30, 2024

Exercisable at September 30, 2024

Stock-based compensation expense

related to stock options for the six months ended June 30, 2024 was $ 6,000 .

The Company did no t have any stock-based compensation expense

related to stock options for the three months ended June 30, 2024 and 2023 or the six months ended June 30, 2023.

related to stock options for the nine months ended September 30, 2024 was $ 6,000 .

The Company did no t have any stock-based compensation

expense related to stock options for the three months ended September 30, 2024 and 2023 or the nine months ended September 30, 2023.

Compensation Expense Related to Equity Awards

The following table sets

forth total stock-based compensation expense for the three and six months ended June 30, 2024 and 2023, in thousands:

The following table sets forth

total stock-based compensation expense for the three and nine months ended September 30, 2024 and 2023, in thousands:

Schedule of stock-based compensation expense

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Research and development

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The weighted average number

of common shares outstanding as of June 30, 2023 includes the pre-funded warrants issued in connection with the June 2023 Financing, the

exercise of which requires nominal consideration for the delivery of the shares of common stock.

of common shares outstanding as of September 30, 2023 includes the pre-funded warrants issued in connection with the June 2023 Financing,

the exercise of which requires nominal consideration for the delivery of the shares of common stock.

Therefore, these pre-funded warrants

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Schedule of anti dilutive shares

September 30,

Stock options

Unvested RSUs

The weighted average number of common

shares outstanding as of September 30, 2023 includes pre-funded warrants issued in the June 2023 Financing because the exercise of such

warrants requires only nominal consideration.

Therefore, these pre-funded warrants are not included in the table above.

The weighted average number of common

shares outstanding as of September 30, 2024 includes the Abeyance Shares from the July 2024 Financing, the exercise of which was prepaid

and requires no further consideration for the delivery of the shares of common stock.

Therefore, 97,000 of these Abeyance Shares are not

included in the table above.

Subsequent Events

In July 2024, the Company

entered into inducement letter agreements (the “ July 2024 Inducement Letter Agreements ”) with certain holders of certain

of the Company’s existing warrants to purchase up to an aggregate of 545,286 shares of the Company’s common stock.

warrants were originally issued in February 2020 through December 2023, having exercise prices between $ 324.00 and $ 9.72 per share.

to the July 2024 Inducement Letter Agreements, these warrants were exercised for cash at a reduced exercise of $ 5.45 per share in consideration

of the Company’s agreement to issue new unregistered five and one-half year term Series C warrants to purchase up to 583,098 shares

of common stock at an exercise price of $ 5.45 and new unregistered eighteen month term Series D warrants to purchase up to 507,474 shares

of common stock at an exercise price of $ 5.45 , both issued and sold at a price of $ 0.125 per warrant share (the “ July 2024 Financing ”).

In addition, the Company issued warrants to the placement agent, HCW, to purchase a total of 40,896 shares of common stock at an exercise

price of $ 6.8125 per share.

The net proceeds to the Company from the July 2024 Financing are approximately $ 2,600,000 , after deducting

placement agent fees and offering expenses.

Pursuant to the terms of

the July 2024 Inducement Letter Agreements, in the event that the exercise of the existing warrants in the July 2024 Financing would

have otherwise caused a holder to exceed the beneficial ownership limitations set forth in the existing warrant, the Company issued

the number of shares that would not cause a holder to exceed such beneficial ownership limitation and agreed to hold such balance of

shares of common stock in abeyance.

Accordingly, an aggregate of 328,758

shares of common stock were held in abeyance (the “ July 2024 Abeyance Shares ”) with such July 2024 Abeyance

Shares evidenced through the holder’s existing warrants and which are deemed to be prepaid.

The July 2024 Abeyance Shares will

be held until notice is received by the holder that the balance of the shares of common stock may be issued in compliance with such

beneficial ownership limitations and may be exercised pursuant to a notice of exercise from the holder.

Until such time, the

Abeyance Shares are evidenced through the holder’s existing warrants.

Subsequent to the balance sheet date and through the

date of the filing with the SEC of this Quarterly Report on Form 10-Q, 201,758 of the July 2024 Abeyance Shares were released.

In accordance with ASC Topic 855, “Subsequent

Events”, which establishes general standards of accounting for and disclosure of events that occur after the consolidated balance

sheet date but before the consolidated financial statements are issued, the Company has evaluated all events or transactions that occurred

after September 30, 2024, up through the date the Company issued the condensed consolidated financial statements.

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