What changed in this filing

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Item 1. Financial Statements

2025-05-15 compared with 2024-11-14 · 361 added, 373 removed, 221 unchanged (77% of the section changed)

3 unchanged sentences

(Amounts in thousands, except share and per

September 30,

Current assets:

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Total current assets

Right of use asset

Property and equipment, net

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Accrued expenses

Lease liability

Total current liabilities

Total liabilities

Commitments and contingencies (Note 2)

Stockholders’ equity:

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

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

Series D Preferred Stock, $ 0.0001 par value;

10,000,000 shares authorized, 0 issued and outstanding at March 31, 2025 and December 31, 2024

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

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

4,778,154 and 1,733,717 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital

7 unchanged sentences

(Amounts in thousands, except share and per

Three Months Ended

September 30,

Nine Months Ended

September 30,

Ended March 31,

Operating expenses:

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Operating loss

Total other income (expense), net

Interest income, net

Other income (expense), net

Net loss per common share:

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CONDENSED CONSOLIDATED STATEMENTS OF

PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

STOCKHOLDERS’ EQUITY

(Amounts in thousands, except share data)

Series D Preferred Stock

For the Three and Nine Months Ended

September 30, 2024

For the Three Months Ended March 31, 2025

Balance at December 31, 2024

1 unchanged sentence

Issuance of common stock upon exercise of warrants

Issuance of common stock upon vesting of restricted stock units

Shares withheld for payroll taxes

Issuance of common stock and warrants

Stock-based compensation expense

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$ ( 148,125 )

Stock-based compensation expense

Balance at June 30, 2024

$ ( 143,206 )

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

For the Three Months Ended March 31, 2024

Balance at December 31, 2023

$ ( 139,206 )

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

Redemption of preferred stock

Issuance of common stock upon vesting of restricted stock units

Shares withheld for payroll taxes

Stock-based compensation expense

Balance at March 31, 2023

$ ( 131,982 )

Issuance of common stock and warrants, net of offering costs

Issuance of common stock upon exercise of warrants

Stock-based compensation expense

Balance at June 30, 2023

$ ( 134,531 )

Issuance of common stock upon exercise of warrants

Issuance of common stock upon vesting of restricted stock units

1 unchanged sentence

Stock-based compensation expense

Balance at September 30, 2023

Balance at March 31, 2024

$ ( 141,360 )

4 unchanged sentences

(Amounts in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

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Cash flows from investing activities:

Cash paid for purchase of property and equipment

Cash paid for the purchase of property and equipment

Net cash used in investing activities

1 unchanged sentence

Net proceeds from the issuance of common stock and warrants

Cash in lieu of fractional shares for reverse stock split

Redemption of Series D preferred stock

Net proceeds from the exercise of warrants

Payment of taxes on net share settlements of restricted stock units

Net cash provided by financing activities

Net decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at the beginning of period

Cash, cash equivalents and restricted cash at the end of period

The following table provides a reconciliation

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

September 30,

Cash and cash equivalents

Restricted cash

Cash, cash equivalents and restricted cash

The accompanying notes are an integral part of

these condensed consolidated financial statements.

Net cash provided by (used in) financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of period

Cash and cash equivalents at the end of period

Supplemental cash flow information

Cash paid during the year for:

See accompanying notes to consolidated financial

PHIO PHARMACEUTICALS CORP.

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Phio Pharmaceuticals Corp.

(“ Phio ” or the “ Company ”) is a clinical stage biotechnology company whose proprietary INTASYL®

small interfering RNA gene silencing technology is designed to make immune cells more effective in killing tumor cells.

The Company is

developing therapeutics that are designed to leverage INTASYL to precisely target specific proteins that reduce the body’s ability

(“ Phio ” or the “ Company ”) is a clinical stage biopharmaceutical company whose proprietary INTASYL®

self-delivering small interfering RNAi(siRNA) technology is designed to make immune cells more effective in killing tumor cells.

is developing therapeutics that are designed to leverage INTASYL to precisely target specific proteins that reduce the body’s ability

to fight cancer, without the need for specialized formulations or drug delivery systems.

The Company is committed to discovering and developing

innovative cancer treatments for patients by creating new pathways toward a cancer-free future.

Phio was incorporated in the

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Corp., to reflect its transition from a platform company to one that is fully committed to developing groundbreaking immuno-oncology therapeutics.

July 5, 2024, the Company completed a 1-for-9 reverse stock split of the Company’s outstanding common stock, including

reclassifying an amount equal to the reduction in par value to additional paid-in capital.

The reverse stock split did not reduce the

number of authorized shares of the Company’s common or preferred stock.

All share and per share amounts have been adjusted to give

effect to the reverse stock split.

Basis of Presentation

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In the opinion

of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation of the condensed consolidated

financial statements have been included.

of management, the interim condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of results

for the periods presented.

These statements should be

1 unchanged sentence

Report on Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission (the “ SEC ”)

on April 1, 2024 (the “ 2023 Form 10-K ”).

on March 31, 2025 (the “ 2024 Form 10-K ”).

Interim results are not necessarily indicative of results for a full year.

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segment and all assets are located in the United States.

Reverse Stock Split

July 5, 2024, the Company completed a 1-for-9 reverse stock split of the Company’s outstanding common stock, including

reclassifying an amount equal to the reduction in par value to additional paid-in capital.

The reverse stock split did not reduce the

number of authorized shares of the Company’s common or preferred stock.

All share and per share amounts have been adjusted to give

effect to the reverse stock split.

Use of Estimates

3 unchanged sentences

revenues and expenses during the reporting period.

The areas subject to significant estimates and judgement include, among others, those

The areas subject to significant estimates and judgment include, among others, those

related to the fair value of equity awards, accruals for research and development expenses, useful lives of property and equipment, and

33 unchanged sentences

there have been no material changes to the significant accounting policies disclosed in the Company’s 2024 Form 10-K.

Recent Accounting Pronouncements

In November 2023, the Financial

Accounting Standards Board (the “ FASB ”) issued Accounting Standards Update (“ ASU ”) 2023-07, “Segment

Reporting (Topic 280) – Improvements to Reporting Segment Disclosures” (“ ASU 2023-07 ”), which requires

disclosure of incremental segment information on an annual and interim basis.

In addition, ASU 2023-07 clarifies circumstances in which

an entity can disclose multiple segment measures of profit or loss, provides new segment disclosure requirements for entities with a single

reportable segment, and contains other disclosure requirements.

The amendments in ASU 2023-07 are effective for fiscal years beginning

after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

disclosures are required to be applied retrospectively to all prior periods presented in the financial statements.

Accounting Pronouncements

In December 2023, the Financial

Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic

Improvements to Income Tax Disclosures,” which requires public business entities to disclose additional information in specified

categories with respect to the reconciliation of the effective tax rate to the statutory rate for federal, state, and foreign income taxes.

It also requires greater detail about individual reconciling items in the rate reconciliation to the extent the impact of those items

exceeds a specified threshold.

In addition to new disclosures associated with the rate reconciliation, the ASU requires information pertaining

to taxes paid (net of refunds received) to be disaggregated for federal, state, and foreign taxes and further disaggregated for specific

jurisdictions to the extent the related amounts exceed a quantitative threshold.

The ASU also describes items that need to be disaggregated

based on their nature, which is determined by reference to the item’s fundamental or essential characteristics, such as the transaction

or event that triggered the establishment of the reconciling item and the activity with which the reconciling item is associated.

ASU eliminates the historic requirement that entities disclose information concerning unrecognized tax benefits having a reasonable possibility

of significantly increasing or decreasing in the 12 months following the reporting date.

This ASU is effective for annual periods beginning

after December 15, 2024.

Early adoption is permitted for annual financial statements that have not yet been issued or made available for

This ASU should be applied on a prospective basis;

however, retrospective application is permitted.

The Company is currently

evaluating the impact of ASU 2023-07 on its consolidated financial statements and disclosures, but does not expect that it will have a

material impact on its consolidated financial statements.

In December 2023, the FASB

issued ASU 2023-09, “Income Taxes (Topic 740) – Improvements to Income Tax Disclosures” (“ASU 2023-09”),

which requires disclosure of specific categories in the rate reconciliation table along with additional information for reconciling items

that meet a quantitative threshold, disclosure of disaggregated income taxes paid and modifies other income tax-related disclosures.

amendments in ASU 2023-09 are effective for annual periods beginning after December 15, 2024 and allows for adoption on a prospective

basis, with a retrospective option.

Early adoption is permitted.

The Company is currently evaluating the impact of ASU 2023-09, but does

not expect that it will have a material impact on its consolidated financial statements.

evaluating the impact that ASU 2023-09 will have on its consolidated financial statements.

In November 2024, the FASB

issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40):

Disaggregation

of Income Statement Expenses,” which requires additional disclosure about the specific expense categories in the notes to financial

statements at interim and annual reporting periods.

The amendments in this ASU do not change or remove current expense disclosure requirements

but affect where this information appears in the notes to financial statements.

This ASU is effective for annual reporting periods beginning

after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

Upon adoption,

the guidance can be applied prospectively or retrospectively.

The Company is currently evaluating the impact that ASU 2024-03 will have

on its consolidated financial statements.

Collaboration Agreement

1 unchanged sentence

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

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

In May 2024, the Company terminated

the Clinical Co-Development Agreement with AgonOx, effective immediately.

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

Agreement and the continuing obligations of the Company and AgonOx thereunder were terminated in their entirety.

As a result, the Company

is no longer required to provide financial support for the development costs incurred under the Clinical Co-Development Agreement, and

is not entitled to future development milestones or royalty payments from AgonOx’s licensing of its DP TIL technology.

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 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 $ 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

The Company follows the provisions

of the FASB Accounting Standards Codification (“ ASC ”) Topic 820, “ Fair Value Measurement ,” for the

Company’s financial assets and liabilities that are re-measured and reported at fair value each reporting period and are re-measured

and reported at fair value at least annually using a fair value hierarchy that is broken down into three levels.

Level inputs are defined

Level 1 – quoted prices

in active markets for identical assets or liabilities.

Level 2 – other significant

observable inputs for the assets or liabilities through corroboration with market data at the measurement date.

Level 3 – significant

unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities

at the measurement date.

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

at fair value.

Schedule of financial instruments at fair value

September 30, 2024

Quoted Prices

In Active Markets

Other Significant

Observable Inputs

Cash equivalents

The carrying amounts of cash,

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 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 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

for its corporate headquarters and primary research facility in Marlborough, Massachusetts was for a total of 7,581 square feet of office

and laboratory space and expired on March 31, 2024 .

The lease agreement did not contain information to determine the borrowing rate implicit

in the lease.

As such, the Company calculated its incremental borrowing rate based on what the Company would have to pay to borrow on

a collateralized basis over the lease term for an amount equal to the remaining lease payments, taking into consideration such assumptions

as, but not limited to, the U.S.

treasury yield rate and borrowing rates from a creditworthy financial institution using the above lease

The Company has continued operations as a primarily remote business with the expiration of the lease, but has contracted a private

mailbox with an address of 11 Apex Drive, Suite 300A, PMB 2006, Marlborough, MA 01752 to use as its principal mailing address for SEC

and other purposes.

The lease for the Company’s

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:

Schedule of lease amounts recorded in balance sheet

September 30,

Right of use asset

Lease liability

Lease Term and Discount Rate

Weighted average remaining lease term

Weighted average discount rate

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.

The Company is no longer

required to provide financial support for the development costs incurred in the Clinical Co-Development Agreement and the Company is no

longer entitled to future development milestones or royalty payments from AgonOx’s licensing of its DP TIL technology.

The Company paid AgonOx all

payment obligations that accrued prior to the termination of the Clinical Co-Development Agreement.

Pursuant to the terms of the Clinical

Co-Development Agreement, each of the Company and AgonOx were responsible for its own costs and expenses incurred in connection with the

wind-down of the Phase 1 clinical trial.

The Company made the remaining payment of $34,320, which primarily related to accrued obligations

for patient fees and other miscellaneous costs as of the date of termination, to AgonOx on March 21, 2025.

This settled all future obligations

The Company did no t recognize

expense with respect to the Clinical Co-Development Agreement during the three months ended March 31, 2025.

During the three months ending

March 31, 2024, the Company recognized approximately $ 50,000 of expense with respect to the Clinical Co-Development Agreement.

The Company leases space for

various corporate and research purposes.

It is the Company’s policy to apply the provisions of ASC 842 when accounting for arrangements

that meet the criteria to be a lease.

The Company calculates the lease liability as the present value of the lease’s cash flows

using the interest rate implicit in the lease, if determinable.

If the rate implicit in the lease is not determinable, the Company uses

its incremental borrowing rate.

The incremental borrowing rate is defined as the rate the Company would have to pay to borrow on a collateralized

basis over the lease term.

The Company has elected the accounting policy election available under ASC 842 to not record a lease liability

for leases with a term of less than one year.

From April 2014 to March

2024, the Company leased space that was utilized as its corporate headquarters and primary laboratory.

The lease expired on March

On March 1, 2024, the Company commenced a lease for a laboratory facility located at 17 Briden Street, Worcester,

Massachusetts.

The lease had an original expiration date of August 31, 2024 and was subsequently extended through February

The Company continues to lease the space on a month-to-month basis.

Monthly rent is approximately $ 2,500 .

In March 2025, the Company contracted with LifeSciences PA located at 411 Swedeland Road, King of Prussia, PA 19406 for access to

full working space for normal hours of operations at a fee of $ 300

per month, which can be cancelled at any time.

Operating lease costs included

in operating expense were approximately $ 8,400 and $ 33,000 for the three months ended March 31, 2025 and 2024, 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

was $ 0 and $ 35,000 for the three months ended March 31, 2025 and 2024, respectively.

Stockholders’ Equity

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

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 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.

July 2024 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 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 ,

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

— On April 20, 2023, the Company completed a registered direct offering and a concurrent private placement of a total of:

registered shares of the Company’s common stock at a purchase price per share of $ 50.85 , unregistered five and one-half year term

Series A warrants to purchase up to 39,331 shares of common stock at an exercise price of $ 48.60 per share and unregistered eighteen month

term Series B warrants to purchase up to 39,331 shares of common stock at an exercise price of $ 48.60 per share (collectively, the “ April

2023 Financing ”).

In addition, the Company issued unregistered warrants to the placement agent, H.C.

Wainwright & Co., LLC

(“ HCW ”), in the April 2023 Financing to purchase a total of 2,950 shares of common stock at an exercise price of $ 63.56

Net proceeds to the Company from the April 2023 Financing were $ 1,538,000 after deducting placement agent fees and offering

In connection with the April

2023 Financing, the Company entered into warrant amendment agreements (the “ Warrant Amendment Agreements ”) with the

participating investors to amend the exercise price of certain existing warrants to purchase up to an aggregate of 21,291 shares of common

stock that were previously issued in April 2018 through January 2021, such that each of the amended warrants have an exercise price of

$ 48.60 per share.

The Company received $ 23,952 as consideration in connection with the Warrant Amendment Agreements.

The Company assessed

the amendments to the exercise price of the warrants under ASC Topic 815, “ Derivatives and Hedging ” (“ ASC

815 ”) and determined that the amendment to the exercise price was completed in connection with and contingent on the close of

the April 2023 Financing.

The increase in fair value of $ 293,000 related to the Warrant Amendment Agreements was recognized as an equity

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

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

issued warrants to H.C.

Wainwright & Co., LLC (the “ Placement Agent ”) 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 were

approximately $ 2,646,000 ,

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 incurred non-cash equity issuance costs of approximately

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 be prepaid.

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 holder.

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 year ended December 31, 2024, all of the July 2024 Abeyance Shares were

December 19, 2024 Concurrent Registered Direct Offering and Private

On December 19, 2024, the

Company entered into a securities purchase agreement (the “ December 19, 2024 Securities Purchase Agreement ”) with certain

institutional and accredited investors in connection with a registered direct offering (the “ December 19, 2024 Registered Direct

Offering ”) and concurrent private placement (the “ December 19, 2024 Private Placement ” and, together with

the December 19, 2024 Registered Direct Offering, the “ December 19, 2024 Offerings ”).

The December 19, 2024 Offerings

closed on December 20, 2024.

The net proceeds to the Company from the December 19, 2024 Offerings were approximately $ 900,000 , after deducting

placement agent fees and offering expenses.

Pursuant to the December 19,

2024 Securities Purchase Agreement, the Company offered and sold in the December 19, 2024 Registered Direct Offering 437,192 shares

of Common Stock at a purchase price of $ 2.635 per share.

In the December 19, 2024 Private Placement, the Company also issued to such institutional

and accredited investors unregistered warrants to purchase up to 437,192 shares of Common Stock (the “ Series E Warrants ”).

Under the terms of the December 19, 2024 Securities Purchase Agreement, for each share of Common Stock issued in the December 19, 2024

Registered Direct Offering, an accompanying Series E Warrant was issued to the purchaser thereof.

Each Series E Warrant is exercisable

for one share of Common Stock at an exercise price of $ 2.51 per share and will expire on December 20, 2029 .

The Series E Warrants were

offered and sold at a purchase price of $0.125 per Series E Warrant, which purchase price is included in the offering price per share

of Common Stock issued in the December 19, 2024 Registered Direct Offering.

December 23, 2024 Concurrent Registered Direct Offering and Private

On December 23, 2024, the

Company entered into a securities purchase agreement (the “ December 23, 2024 Securities Purchase Agreement ”) with certain

institutional and accredited investors in connection with a registered direct public offering (the “ December 23, 2024 Registered

Direct Offering ”) and concurrent private placement (the “ December 23, 2024 Private Placement ” and, together

with the December 23, 2024 Registered Direct Offering, the “ December 23, 2024 Offerings ” and, together with the December

19, 2024 Offerings, the “ December 2024 Offerings ”).

The December 23, 2024 Offerings closed on December 24, 2024.

net proceeds to the Company from the December 23, 2024 Offerings were approximately $ 480,000 , after deducting placement agent fees and

offering expenses.

Pursuant to the December 23,

2024 Securities Purchase Agreement, the Company offered and sold in the December 23, 2024 Registered Direct Offering 240,000 shares of

Common Stock at a purchase price of $ 2.00 per share.

In the December 23, 2024 Private Placement, the Company also issued to such institutional

and accredited investors unregistered warrants to purchase up to 240,000 shares of Common Stock (the “ Series F Warrants ”).

Under the terms of the December 23, 2024 Securities Purchase Agreement, for each share of Common Stock issued in the December 23, 2024

Registered Direct Offering, an accompanying Series F Warrant was issued to the purchaser thereof.

Each Series F Warrant is exercisable

for one share of Common Stock at an exercise price of $ 2.00 per share and will expire on December 24, 2029 .

The Series F Warrants were

offered and sold at a purchase price of $0.125 per Series F Warrant, which purchase price is included in the offering price per share

of Common Stock issued in the December 23, 2024 Registered Direct Offering.

In connection with the December

2024 Offerings, the Company agreed to issue to the Placement Agent, or its designees, warrants to purchase up to an aggregate of 50,789

shares of Common Stock (the “ Placement Agent Warrants ”), which represent 7.5% of the aggregate number of shares of

Common Stock sold in the December 19, 2024 Registered Direct Offering and the December 23, 2024 Registered Direct Offering.

The Placement

Agent Warrants have substantially the same terms as the Series E Warrants and the Series F Warrants, except that (i) 32,789 of the Placement

Agent Warrants have an exercise price equal to $ 3.2938 , or 125% of the offering price per share of Common Stock sold in the December 19,

2024 Registered Direct Offering, and are exercisable until December 19, 2029 , and (ii) 18,000 of the Placement Agent Warrants have an

exercise price equal to $ 2.50 , or 125% of the offering price per share of Common Stock sold in the December 23, 2024 Registered Direct

Offering, and are exercisable until December 23, 2029 .

January 13, 2025 Concurrent Registered Direct Offering and Private

On January 13, 2025,

the Company entered into a securities purchase agreement (the “ January 13, 2025 Securities Purchase Agreement ”) with

certain institutional and accredited investors in connection with a registered direct public offering (the “ January 13, 2025

Registered Direct Offering ”) and concurrent private placement (the “ January 13, 2025 Private Placement ” and,

together with the January 13, 2025 Registered Direct Offering, the “ January 13, 2025 Offerings ”).

The January 13, 2025

Offerings closed on January 14, 2025.

In addition, the Company issued warrants to the Placement Agent to purchase a total of 79,775 shares

of Common Stock at an exercise price of $ 3.75 per share.

The net proceeds to the Company from the January 13, 2025 Registered Direct Offerings

and the January 13, 2025 Private Placement were approximately $ 2.9 million , after deducting fees and estimated offering expenses.

Pursuant to the January 13,

2025 Securities Purchase Agreement, the Company offered and sold in the January 13, 2025 Registered Direct Offering 1,063,670 shares of

Common Stock at a purchase price of $3.00 per share.

In the January 13, 2025 Private Placement, the Company also issued to certain institutional

and accredited investors unregistered warrants to purchase up to 2,127,340 shares of Common Stock (the “ Series G Warrants ”).

Under the terms of the January 13, 2025 Securities Purchase Agreement, for each share of Common Stock issued in the January 13, 2025 Registered

Direct Offering, two accompanying Series G Warrants were issued to the purchaser thereof.

Each Series G Warrant is exercisable for one

share of Common Stock at an exercise price of $ 3.00 per share and will expire on January 14, 2027 .

January 14, 2025 Concurrent Registered Direct Offering and Private

On January 14, 2025, the

Company entered into a securities purchase agreement (the “ January 14, 2025 Securities Purchase Agreement ”) with

certain institutional and accredited investors in connection with a registered direct public offering (the “ January 14,

2025 Registered Direct Offering ”) and concurrent private placement (the “ January 14, 2025 Private

Placement ” and together with the January 14, 2025 Registered Direct Offering, the “ January 14, 2025

Offerings ”).

The January 14, 2025 Offerings closed on January 15, 2025.

In addition, the Company issued warrants to the

Placement Agent to purchase a total of 62,500 shares of Common Stock at an exercise price of $ 3.75 per share.

The net proceeds to

the Company from the January 14, 2025 Registered Direct Offering and the January 14, 2025 Private Placement were approximately $ 2.2

million , after deducting fees and estimated offering expenses.

Pursuant to the January

14, 2025 Securities Purchase Agreement, the Company offered and sold in the January 14, 2025 Registered Direct Offering 833,335

shares of Common Stock at a purchase price of $3.00

In the January 14, 2025 Private Placement, the Company also issued to such institutional and accredited investors

unregistered warrants to purchase up to 1,666,670

shares of Common Stock (the “ Series H Warrants ”).

Under the terms of the January 14, 2025 Securities

Purchase Agreement, for each share of Common Stock issued in the January 14, 2025 Registered Direct Offering, two

accompanying Series H Warrants were issued to the purchaser thereof.

Each Series H Warrant is exercisable for one share of Common

Stock at an exercise price of $ 3.00

per share and will expire on January 15, 2027 .

January 16, 2025 Concurrent Registered Direct Offering and Private

On January 16, 2025, the

Company entered into a securities purchase agreement (the “ January 16, 2025 Securities Purchase Agreement ”) with

certain institutional and accredited investors in connection with a registered direct public offering (the “ January 16,

2025 Registered Direct Offering ”) and concurrent private placement (the “ January 16, 2025 Private

Placement ” and, together with the January 16, 2025 Registered Direct Offering, the “ January 16, 2025

Offerings ” and the January 16, 2025 Offerings, together with the January 13, 2025 Offerings and the January 14, 2025

Offerings, the “ January 2025 Offerings” ).

The January 16, 2025 Offerings closed on January 17, 2025.

the Company issued warrants to the Placement Agent to purchase a total of 45,750

shares of Common Stock at an exercise price of $ 3.75

per share The net proceeds to the Company from the January 16, 2025 Registered Direct Offering and the January 16, 2025 Private

Placement are approximately $ 1.6

million , after deducting fees and estimated offering expenses.

Pursuant to the January

16, 2025 Securities Purchase Agreement, the Company offered and sold in the January 16, 2025 Registered Direct Offering 610,000

shares of Common Stock at a purchase price of $3.00 per share.

In the January 16, 2025 Private Placement, the Company also

issued to such institutional and accredited investors unregistered warrants to purchase up to 1,220,000

shares of Common Stock (the “ Series I Warrants ”).

Under the terms of the January 16, 2025 Securities

Purchase Agreement, for each share of Common Stock issued in the January 16, 2025 Registered Direct Offering, two accompanying

Series I Warrants were issued to the purchaser thereof.

Each Series I Warrant is exercisable for one share of Common Stock at an

exercise price of $ 3.00

per share and will expire on January

The Company first assesses

2 unchanged sentences

If there are no instances outside of the Company’s

control that could require cash settlement, the Company then applies and follows the applicable accounting guidance in ASC 815.

instruments are accounted for as either derivative liabilities or equity instruments depending on the specific terms of the agreement.

Based on the assessment of the warrants issued by the Company under the guidance in ASC 480 and ASC 815, the warrants issued by the Company

have been classified within stockholder’s equity.

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:

control that could require cash settlement, the Company then applies and follows the applicable accounting guidance in the FASB ASC Topic

815, “ Derivatives and Hedging ” (“ ASC 815 ”).

Financial instruments are accounted for as either derivative

liabilities or equity instruments depending on the specific terms of the agreement.

Based on the assessment of the warrants issued by

the Company under the guidance in ASC 480 and ASC 815, the warrants issued by the Company have been classified within stockholder’s

During the three months ended

March 31, 2025, there were 537,432 warrants exercised.

The following table summarizes

the Company’s outstanding warrants, all of which are classified as equity instruments, at March 31, 2025:

Schedule of outstanding warrants

1 unchanged sentence

Outstanding at December 31, 2024

Outstanding at September 30, 2024

Outstanding at March 31, 2025

Stock-based Compensation

1 unchanged sentence

Restricted stock units (“ RSUs ”)

are issued under the Company’s 2020 Long-Term Incentive Plan (the “ 2020 Plan ”) or as inducement grants issued

outside of the 2020 Plan to new employees.

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

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.

are issued under the Company’s 2020 Long-Term Incentive Plan (the “ 2020 Plan ”).

RSUs are generally subject to

the satisfaction of certain service requirements.

RSUs granted by the Company to employees generally cliff vest 1 year after the grant

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.

Employee RSU recipients may

elect to net share settle upon vesting, in which case the Company pays the employee’s withholding 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 fair value of the RSUs awarded

is based upon the Company’s closing stock price at the grant date and is expensed over the requisite service period.

The following table summarizes

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

the activity of the Company’s RSUs for the three months ended March 31, 2025:

Summary of RSUs activity

1 unchanged sentence

Unvested units at December 31, 2024

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 .

Unvested units at March 31, 2025

There were no RSUs granted

during the three months ended March 31, 2025 or March 31, 2024.

Stock-based compensation expense

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.

related to RSUs was $ 43,000 and $ 26,000 for the three months ended March 31, 2025 and 2024, respectively.

The aggregate fair value of

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.

awards that vested during the three months ended March 31, 2024 was $ 17,000 , which represents the market value of the Company’s

common stock on the date that the RSUs vested.

No RSUs vested during the three months ended March 31, 2025.

Stock Options

4 unchanged sentences

Stock options granted by the Company to employees generally vest

annually over 4 years after the grant date and generally vest over 1 year after the grant date for non-employee members of the Board of

Directors and expire within ten years of grant.

Upon the exercise of a stock option, the Company issues new shares and delivers them to

the recipient.

annually over 4 years after the grant date and generally vest over 1 year after the grant date for members of the Board of Directors and

expire within ten years of grant.

Upon the exercise of a stock option, the Company issues new shares and delivers them to the recipient.

The Company does not expect to repurchase shares to satisfy stock option exercises.

12 unchanged sentences

The Company did not grant

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

any stock options during the three months ended March 31, 2025 or 2024.

The following table summarizes

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

the activity of the Company’s stock options for the three months ended March 31, 2025:

Summary of stock options activity

Balance at December 31, 2024

Balance at September 30, 2024

Exercisable at September 30, 2024

Balance at March 31, 2025

Exercisable at March 31, 2025

Stock-based compensation expense

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.

related to stock options for the three months ended March 31, 2024 was $ 6,000 .

There was no stock-based compensation expense related to

stock options for the three months ended March 31, 2025.

Compensation Expense Related to Equity Awards

The following table sets forth

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

total stock-based compensation expense for the three months ended March 31, 2025 and 2024, in thousands:

Schedule of stock-based compensation expense

Three Months Ended

Nine Months Ended

September 30,

Research and development

1 unchanged sentence

Total stock-based compensation

As of March 31, 2025,

the total unrecognized compensation cost related to non-vested RSUs was approximately $ 99,000 .

This cost is expected to be recognized

over a weighted-average period of 1 year.

The following table summarizes

the future stock-based compensation expense expected to be recognized:

Schedule of future stock-based compensation expense

2025 (remaining)

Total remaining stock based-compensation

Net Loss per Common Share

8 unchanged sentences

to common stockholders were the same for all periods presented because the impact of these items is generally anti-dilutive during periods

The weighted average number

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

are not included in the table below.

The following table sets forth

1 unchanged sentence

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 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.

Segment Information

The Company is a

clinical stage biopharmaceutical company that has yet to generate operating revenues.

Management has determined that the Company

operates with a single operating segment and a single reporting segment – the Clinical segment.

The Chief Operating Decision

Maker (CODM) is the Chief Executive Officer (CEO).

The CEO assesses performance and allocates resources to achieve the

Company’s goals based on net income/(loss) as reported in the Consolidated Statements of Operations.

The measure of segment

assets is Total Assets as presented on the Consolidated Balance Sheets.

All of the Company’s operations occur within the

United States.

The following table presents selected financial

information with respect to the Company's single operating segment (in thousands):

Schedule of operating segment information

Research and development expense

General and administrative expense

Impairment loss on property and equipment

Other income (expense)

Interest income

Interest expense

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