What changed in this filing

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Item 1. Financial Statements

2024-08-13 compared with 2024-05-14 · 280 added, 180 removed, 294 unchanged (61% of the section changed)

16 unchanged sentences

Accrued interest - related parties

Accrued interest

Notes payable

1 unchanged sentence

Convertible notes payable - related parties

Convertible notes payable

Operating lease liability, current portion

8 unchanged sentences

Series D Convertible Preferred Stock;

12,374,000 shares designated;

12,373,247 shares issued and outstanding at March 31, 2024 and December 31, 2023;

aggregate liquidation preference of $ 14,164,889 at March 31, 2024 and December 31, 2023

957,100 and 12,374,000 shares designated at June 30, 2024 and December 31, 2023, respectively;

956,985 and 12,373,247 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively;

aggregate liquidation preference of $ 1,095,556 and $ 14,164,889 at June 30, 2024 and December 31, 2023, respectively

Series D-1 Convertible Preferred Stock;

11,241,000 shares designated;

10,587,571 and 10,361,097 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively;

aggregate liquidation preference of $ 121,205,780 and $ 118,613,136 at March 31, 2024 and December 31, 2023, respectively

23,042,900 and 11,241,000 shares designated

at June 30, 2024 and December 31, 2023, respectively;

12,002,888 and 10,361,097 shares issued and outstanding at June 30, 2024 and

December 31, 2023, respectively;

aggregate liquidation preference of $ 137,408,291 and $ 118,613,136 at June 30, 2024 and December 31,

2023, respectively

Preferred stock, value

2 unchanged sentences

1,000,000,000 shares authorized;

419,522,119 shares issued and outstanding at March 31, 2024 and December 31, 2023

419,522,119 shares issued

and outstanding at June 30, 2024 and December 31, 2023

Additional paid-in capital

11 unchanged sentences

For the Three Months Ended

For the Six Months Ended

Grant Revenue

4 unchanged sentences

Total Operating Loss

Other Expense:

( 1,242,119 )

( 1,582,416 )

Other Income/(Expense):

Research and development tax credit

Interest expense

Total Other Expense

Total Other Expense, Net

$ ( 846,848 )

$ ( 835,062 )

$ ( 1,350,890 )

$ ( 1,662,516 )

Basic and Diluted Loss Per Common Share

4 unchanged sentences

For the Three Months Ended

For the Six Months Ended

$ ( 846,848 )

$ ( 835,062 )

Other Comprehensive (Loss)/Income:

$ ( 1,350,890 )

$ ( 1,662,516 )

Other Comprehensive Loss:

Foreign currency translation adjustments

2 unchanged sentences

$ ( 835,340 )

$ ( 1,351,179 )

$ ( 1,662,603 )

accompanying notes to condensed consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

THE THREE MONTHS ENDED MARCH 31, 2024

Stock Series D

Stock Series D-1

Other Comprehensive

THE THREE AND SIX MONTHS ENDED JUNE 30, 2024

Preferred Stock

Comprehensive

Balance at January 1, 2024

2 unchanged sentences

$ ( 7,593,351 )

of 2022 Note to Series D-1 Preferred Stock

Comprehensive

Conversion of 2021 Note to Series D1 Preferred Stock

Comprehensive loss:

at March 31, 2024

Other comprehensive loss

Balance at March 31, 2024

$ 245,362,902

1 unchanged sentence

$ ( 7,449,647 )

THE THREE MONTHS ENDED MARCH 31, 2023

Stock Series D

Stock Series D-1

Other Comprehensive

Forfeited shares of Series D Preferred Stock

( 11,416,262 )

Issuance of Series D-1 Preferred Stock for forfeited shares of Series D Preferred Stock

Conversion of 2021 Note to Series D1 Preferred Stock

Comprehensive loss:

Other comprehensive income

Balance at June 30, 2024

$ 246,156,198

$ ( 254,041,299 )

$ ( 7,513,073 )

THE THREE AND SIX MONTHS ENDED JUNE 30, 2023

Preferred Stock

Comprehensive

Balance at January 1, 2023

2 unchanged sentences

$ ( 6,228,510 )

Conversion of 2021 Note to Series D-1 Preferred Stock

Comprehensive loss:

Other comprehensive income

Balance at March 31, 2023

$ 243,008,185

1 unchanged sentence

$ ( 7,001,763 )

of 2021 Note to Series D-1 Preferred Stock

of Note to Series D-1 Preferred Stock

Comprehensive

comprehensive income

at March 31, 2023

$ 243,008,185

1 unchanged sentence

$ ( 7,001,763 )

Conversion of 2021 Note to Series D-1 Preferred Stock

Comprehensive loss:

Other comprehensive loss

Balance at June 30, 2023

$ 243,548,218

1 unchanged sentence

$ ( 7,296,881 )

( 251,251,157 )

( 7,296,881 )

accompanying notes to condensed consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended

For the Six Months Ended

Cash Flows From Operating Activities:

13 unchanged sentences

( 1,807,080 )

( 1,241,893 )

Cash Flows From Financing Activities:

3 unchanged sentences

Repayment of 2021 convertible note payable - related party

Proceeds from exercise of warrants

Net Cash Provided By Financing Activities

4 unchanged sentences

Cash and restricted cash consisted of the following:

Restricted cash

Cash and Restricted Cash,

5 unchanged sentences

Conversion of 2022 Notes and related accrued interest to Series D-1 Preferred Stock

Forfeited shares of Series D Preferred Stock

Issuance of Series D-1 Preferred Stock for forfeited shares

of Series D Preferred Stock

Purchase of insurance policies financed by short-term note payable

accompanying notes to condensed consolidated financial statements.

3 unchanged sentences

Biopharmaceuticals, Inc., a Delaware corporation (together with its subsidiaries, “Provectus” or “the Company”),

is a clinical-stage biotechnology company developing immunotherapy medicines for different diseases that are based on a class of synthetic

small molecule immuno-catalysts called halogenated xanthenes (“HXs”).

is a clinical-stage biotechnology company developing immunotherapy medicines for different diseases based on a class of synthetic small

molecule halogenated xanthenes (“HXs”).

Our lead HX molecule is named rose bengal sodium (“RBS”).

Company’s proprietary, patented, pharmaceutical-grade RBS is the active pharmaceutical ingredient in the drug candidates of

our current clinical development programs and the preclinical formulations of our current non-clinical early discovery programs.

Importantly, our pharmaceutical-grade RBS displays different therapeutic effects at different concentrations and can be formulated

for delivery by different routes of administration.

Company believes that RBS targets disease in a bifunctional manner.

First, direct contact may lead to cell death or repair, depending

on the disease being treated and the concentration of the RBS utilized in the treatment.

Second, multivariate immune signaling, activation,

and response may follow that may manifest as stimulatory, inhibitory, or both.

Company’s proprietary, patented, pharmaceutical-grade RBS is the active pharmaceutical ingredient (“API”) in the drug

candidates of our current clinical development programs and the non-clinical formulations of our current non-clinical proof-of-concept

in vivo and early discovery programs.

Importantly, our pharmaceutical-grade RBS displays different therapeutic effects at different

concentrations and can be formulated for delivery by different routes of administration.

Company believes that RBS targets disease in a bifunctional multi-modal manner.

Direct contact by RBS may lead to cell death or repair,

depending on the disease being treated and the concentration of RBS utilized in the treatment formulation, by one or more targeting mechanisms.

Multivariate innate and adaptive immune activation, signaling, and response may follow that may manifest as stimulatory, inhibitory,

Company believes that it is the first entity to advance an RBS formulation into clinical trials for the treatment of a disease, such

2 unchanged sentences

at a purity of nearly 100%.

Company’s small molecule HX medical science platform comprises several different drug candidates and preclinical targets using

different concentrations delivered by different routes of administration specific to each disease area and/or disease indication.

The Company’s HX medical science platform includes clinical development programs in oncology (intratumoral administration),

dermatology (topical), and ophthalmology (topical);

in vivo proof-of-concept programs in oncology (oral), hematology (oral), wound

healing (topical), and canine cancers (intratumoral);

and in vitro drug discovery programs in infectious diseases and tissue regeneration and

Company’s small molecule medical science platform comprises several different drug candidates and non-clinical targets using different

concentrations delivered by different routes of administration specific to each disease area and/or disease indication, including:

development programs in oncology (intratumoral administration), dermatology (topical), and

ophthalmology (topical),

● Proof-of-concept

in vivo programs in oncology (oral), hematology (oral), wound healing (topical), and

canine cancers (intratumoral), and

discovery programs ( in vitro ) in infectious diseases and tissue regeneration and repair.

and Uncertainties

9 unchanged sentences

accruals) considered necessary for a fair presentation have been included.

Operating results for the three months ended March 31, 2024

are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

Operating results for the six months ended June 30, 2024 are

not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

Liquidity and Going Concern

date, the Company has not generated any revenues or profits from planned principal operations.

Company’s cash and restricted cash were $ 762,752 at March 31, 2024 which includes $ 744,717 of restricted cash resulting from a

grant received from the State of Tennessee.

The Company’s working capital deficit was $ 7,507,105 and $ 7,652,098 as of March 31,

2024 and December 31, 2023, respectively, net loss for the three months ended March 31, 2024 and 2023 was $ 504,042 and $ 827,454 , respectively,

and cash used in operations was $ 1,044,495 and $ 624,110 for the three months ended March 31, 2024 and March 31, 2023, respectively.

Company continues to incur significant operating losses.

Management expects that significant on-going operating expenditures will be

necessary to successfully implement the Company’s business plan and develop and market its products.

These circumstances raise

substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these unaudited

condensed consolidated financial statements are issued.

Implementation of the Company’s plans and its ability to continue as a

going concern will depend upon the Company’s ability to develop PV-10, PH-10, and/or any other halogenated xanthene-based drug

products, and to raise additional capital.

Company’s cash and restricted cash were $ 589,283 at June 30, 2024 which includes $ 559,702 of restricted cash resulting from a grant

received from the State of Tennessee.

The Company’s working capital deficit was $ 7,569,256 and $ 7,652,098 as of June 30, 2024 and

December 31, 2023, respectively, net loss for the six months ended June 30, 2024 and 2023 was $ 1,350,890 and $ 1,662,516 , respectively,

and cash used in operations was $ 1,807,080 and $ 1,241,893 for the six months ended June 30, 2024 and 2023, respectively.

continues to incur significant operating losses.

Management expects that significant on-going operating expenditures will be necessary

to successfully implement the Company’s business plan and develop and market its products.

These circumstances raise substantial

doubt about the Company’s ability to continue as a going concern within one year after the date that these unaudited condensed

consolidated financial statements are issued.

Implementation of the Company’s plans and its ability to continue as a going concern

will depend upon the Company’s ability to develop PV-10, PH-10, and/or any other halogenated xanthene-based drug products, and

to raise additional capital.

Company plans to access capital resources through possible public or private equity offerings, including the 2024 financing (see Note

8 unchanged sentences

primary business objective of management is to build the Company into a commercial-stage biotechnology company;

however, there can

be no assurance that it will be successful in co-developing, licensing, and/or commercializing PV-10, PH-10, and/or any other

halogenated xanthene-based drug candidate developed by the Company or entering into any financial transaction.

Moreover, even if the

Company is successful in improving its current cash flow position, the Company nonetheless plans to seek additional funds to meet

its long-term requirements in 2024 and beyond.

The Company anticipates that these funds will otherwise come from the proceeds of

private placement transactions, the exercise of existing warrants and outstanding stock options, or public offerings of debt or

equity securities.

While the Company believes that it has a reasonable basis for its expectation that it will be able to raise

additional funds, there can be no assurance that it will be able to obtain funds on commercially acceptable terms, or complete

additional financing in a timely manner.

Any such financing may result in significant dilution to stockholders.

These factors

raise substantial doubt about our ability to continue as a going concern.

The consolidated financial statements do not include any adjustments

relating to the recoverability and classification of liabilities that may be necessary should we be unable to continue as a going concern.

Our consolidated

financial statements included elsewhere in this Annual Report on Form 10-K have been prepared in conformity with accounting principles

generally accepted in the United States of America (“U.S.

GAAP”), which contemplate our continuation as a going concern and

the realization of assets and satisfaction of liabilities in the normal course of business.

The carrying amounts of assets and liabilities

presented in the consolidated financial statements do not necessarily purport to represent realizable or settlement values.

however, there can be

no assurance that it will be successful in co-developing, licensing, and/or commercializing PV-10, PH-10, and/or any other halogenated

xanthene-based drug candidate developed by the Company or entering into any financial transaction.

Moreover, even if the Company is successful

in improving its current cash flow position, the Company nonetheless plans to seek additional funds to meet its long-term requirements

in 2024 and beyond.

The Company anticipates that these funds will otherwise come from the proceeds of private placement transactions,

the exercise of existing warrants and outstanding stock options, or public offerings of debt or equity securities.

While the Company

believes that it has a reasonable basis for its expectation that it will be able to raise additional funds, there can be no assurance

that it will be able to obtain funds on commercially acceptable terms, or complete additional financing in a timely manner.

financing may result in significant dilution to stockholders.

These factors raise substantial doubt about our ability to continue as

a going concern.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification

of liabilities that may be necessary should we be unable to continue as a going concern.

condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q have been prepared in conformity

with accounting principles generally accepted in the United States of America (“U.S.

GAAP”), which contemplate our

continuation as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business.

carrying amounts of assets and liabilities presented in the consolidated financial statements do not necessarily purport to

represent realizable or settlement values.

Significant Accounting Policies

10 unchanged sentences

cash consists of a grant award received from the State of Tennessee.

Restricted cash available as of March 31, 2024 is $ 744,717 .

Note 10, Grants.

Restricted cash available as of June 30, 2024 is $ 559,702 .

Concentrations

3 unchanged sentences

balances although there can be no assurance that it will not experience any losses in the future.

As of March 31, 2024 and December 31,

As of June 30, 2024 and December 31,

2023, the Company had cash and restricted cash balances in excess of FDIC insurance limits of $ 339,283 and $ 776,799 , respectively.

10 unchanged sentences

Total potentially dilutive shares

Issued Accounting Pronouncements

2023, the FASB issued ASU 2023-07 “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.” These amendments

require a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide

in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually.

Public entities with a single reporting segment are required to provide both the new disclosures and all of the existing disclosures required

under ASC 280.

The guidance is effective for fiscal years beginning after December 15, 2023 , and interim periods within fiscal years beginning

after December 15, 2024, with early adoption permitted.

Since this new ASU addresses only disclosures, the Company does not expect the

adoption of this ASU to have any material effects on its financial condition, results of operations or cash flows.

The Company is currently

evaluating any new disclosures that may be required upon adoption of ASU 2023-07.

2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Recently Issued Accounting Pronouncements

November 2023, the FASB issued ASU 2023-07 “ Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .”

These amendments require a public entity to disclose significant segment expenses and other segment items on an annual and interim basis

and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required

Public entities with a single reporting segment are required to provide both the new disclosures and all of the existing disclosures

required under ASC 280.

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal

years beginning after December 15, 2024, with early adoption permitted.

Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023-07.

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

The amendments in this update address

investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related

to the rate reconciliation and income taxes paid information.

This update also includes certain other amendments to improve the effectiveness

of income tax disclosures.

The amendments in ASU 2023-09 are effective for the Company for annual periods beginning after

December 15, 2024, with early adoption permitted.

Since this new ASU addresses only disclosures, the Company does not expect the adoption to have any material effects on its financial

condition, results of operation or cash flows.

The Company is currently evaluating any new disclosures that may be required upon adoption

of ASU 2023-09.

The amendments in

this update address investor requests for more transparency about income tax information through improvements to income tax disclosures

primarily related to the rate reconciliation and income taxes paid information.

This update also includes certain other amendments to

improve the effectiveness of income tax disclosures.

The amendments in ASU 2023-09 are effective for the Company for annual periods beginning

after December 15, 2024, with early adoption permitted.

The Company is currently evaluating

any new disclosures that may be required upon adoption of ASU 2023-09.

Other Accrued Expenses

following table summarizes the other accrued expenses at March 31, 2024 and December 31, 2023:

following table summarizes the other accrued expenses at June 30, 2024 and December 31, 2023:

Schedule of Other Accrued Expenses

5 unchanged sentences

Convertible Notes Payable

The following summarizes convertible notes

payable activity during the three months ended March 31, 2024:

following summarizes convertible notes payable activity during the six months ended June 30, 2024:

Schedule of Convertible Notes Payable

Non-Related Party Face Amount

Related Party Face Amount

Non-Related Party

Related Party

Balance as of January 1, 2024

Balance as of March 31, 2024

Non-Related Party Face Amount

Related Party Face Amount

Balance as of June 30, 2024

Non-Related Party

Related Party

Balance as of January 1, 2024

Balance as of March 31, 2024

( 1,325,000 )

Balance as of June 30, 2024

July 11, 2024, the Board approved the closure of the 2022 Financing.

Through June 30, 2024, the Company received 2022 Notes proceeds

in the aggregate amount of $ 4,865,500 , of which $ 3,637,500 is from a related party investor (a Company officer/director).

further details on the terms of the 2021 and 2022 Notes, refer to our Form 10-K as filed with the SEC on March 28, 2024.

Repayment of 2021 Notes

During the three months ended March 31, 2024, the

Company repaid $ 100,000 principal owed on the 2021 Note.

As of March 31, 2024, principal and interest in the amount of $ 100,000 and $ 41,394 ,

respectively, remains outstanding on the 2021 Note.

the six months ended June 30, 2024, the Company repaid $ 100,000 principal owed on the 2021 Note.

As of June 30, 2024, principal and interest

in the amount of $ 100,000 and $ 44,744 , respectively, remains outstanding on the 2021 Note.

Conversions of 2022 Notes into Preferred Stock

the three months ended March 31, 2024, principal and interest in the aggregate amount of $ 648,161 , owed in connection with the 2022 Notes

the three months ended June 30, 2024, principal and interest in the aggregate amount of $ 783,296 , owed in connection with the 2022 Notes

were converted into 273,691 shares of Series D-1 Preferred Stock at the Conversion Price of $ 2.862 .

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information on the Series D-1 Preferred Stock.

the six months ended June 30, 2024, principal and interest in the aggregate amount of $ 1,431,457 , owed in connection with the 2022

Notes were converted into 500,165 shares of Series D-1 Preferred Stock at the Conversion Price of $ 2.862 .

Any fractional shares

issuable pursuant to the formula were rounded up to the next whole share of Series D-1 Preferred Stock.

Stockholders’ Deficit for additional information on the Series D-1 Preferred Stock.

Notes Payable

Company obtained short-term financing from AFCO Insurance Premium Finance for our commercial insurance policies.

As of March 31, 2024

As of June 30, 2024

and December 31, 2023, the balance of the note payable was $ 109,862 and $ 277,815 , respectively.

Related Party Transactions

each of the three months ended March 31, 2024 and 2023, the Company had consulting fees of $ 63,600

Bruce Horowitz (Capital Strategists) for services rendered.

the three months ended June 30, 2024 and 2023, the Company had consulting fees of $ 0 and

$ 63,600 , respectively, to Mr.

Bruce Horowitz

(Capital Strategists) for services rendered.

During the six months ended June 30, 2024 and 2023, the Company had consulting

fees of $ 63,600

and $ 127,200 ,

respectively.

As of March 25, 2024, Mr.

1 unchanged sentence

On March 26, 2024, the Company paid Mr.

Horowitz $ 250,000 with a balance of $ 258,000 due on or

before June 30, 2024 , after which the amount of the second payment would be increased to $ 500,000 .

Horowitz waived the amount of $ 469,000

due him in director fees.

Horowitz $ 250,000

and on June 27, 2024, the Company paid $ 258,000

for outstanding consulting fees.

waived the amount of $ 469,000 due

to him in directors’ fees.

Note 5 for details of other related party transactions.

fees incurred during each of the three months ended March 31, 2024 and 2023 were $ 96,250 .

Accrued directors’ fees as of March 31, 2024 and December 31, 2023 were $ 1,976,839

fees incurred during the three months ended June 30, 2024 and 2023, were $ 77,500

and $ 96,250 ,

respectively.

Directors’ fees incurred during the six months ended June 30, 2024 and 2023, were $ 173,750

and $ 192,500 ,

respectively.

Accrued directors’ fees as of June 30, 2024 and December 31, 2023 were $ 2,054,339

and $ 2,330,589 ,

respectively.

Stockholders’ Deficit

the three months ended March 31, 2024, the Company issued 226,474 shares of Series D-1 Convertible Preferred Stock upon the conversion

of $ 600,000 of principal and $ 48,161 accrued interest outstanding on the 2022 Notes.

the three months ended March 31, 2024 and 2023, the Company did not have any issuances, grants, or exercises of options.

following table summarizes option activities during the three months ended March 31, 2024:

During the three months ended June 30, 2024, the Company issued 273,691

shares of Series D-1 Convertible Preferred Stock upon the conversion of $ 725,000 of principal and $ 58,294 accrued interest outstanding

on the 2022 Notes.

the six months ended June 30, 2024, the Company issued 500,165 shares of Series D-1 Convertible Preferred Stock upon the conversion of

$ 1,325,000 of principal and $ 106,457 accrued interest outstanding on the 2022 Notes.

June 21, 2024, the Board of Directors approved the conversion of 11,416,242

Series D Preferred Shares held by Dominic Rodrigues (a Company officer and director) into 1,141,626 shares

of Series D-1 Preferred shares.

of Preferred Shares

June 24, 2024, the Company filed an amended Series D Certificate of Designation to decrease the authorized shares from 12,374,000

shares of Series D Convertible Preferred Stock.

The Series D-1 Certificate of Designation was also amended to increase the

authorized shares from 9,441,000

to 23,042,900

shares of Series D-1 Convertible Preferred Stock.

2024 Equity Compensation Plan

At the shareholder meeting held on June

20, 2024, the proposal for the new 2024 Equity Compensation Plan was approved.

The approval gives the Company authority to grant Options

and award Restricted Stock under the 2024 Equity Compensation Plan for up to 100,000,000

shares of our common stock, which are approximately fifteen percent ( 15 %)

of the issued and outstanding shares of Common Stock on an as converted basis as of the effective date of the 2024 Equity Compensation

the three and six months ended June 30, 2024 and 2023, the Company did not have any issuances, grants, or exercises of options.

following table summarizes option activities during the six months ended June 30, 2024:

of Option Activity

Weighted Average Exercise Price

Weighted Average Remaining Life in Years

Aggregate Intrinsic Value

Weighted Average

Weighted Average Remaining

Aggregate Intrinsic

Exercise Price

Life in Years

Outstanding and exercisable at January 1, 2024

Outstanding and exercisable at March 31, 2024

following table summarizes information about options outstanding and exercisable at March 31, 2024:

Outstanding and exercisable at June 30, 2024

following table summarizes information about options outstanding and exercisable at June 30, 2024:

of Stock Options Outstanding

3 unchanged sentences

Intrinsic Value

the three months ended March 31, 2024 and 2023, the Company did not have any issuances, grants, or exercises of warrants.

following table summarizes warrant activities during the nine months ended March 31, 2024:

the three and six months ended June 30, 2024 and 2023, the Company did not have any issuances, grants, or exercises of warrants.

following table summarizes warrant activities during the six months ended June 30, 2024:

of Warrant Activity

Average Exercise Price

Average Remaining Life in Years

Intrinsic Value

Outstanding and exercisable at

January 1, 2024

Outstanding and exercisable

at March 31, 2024

following table summarizes information about warrants outstanding and exercisable at March 31, 2024:

of Warrants Outstanding

Exercise Price

Outstanding and Exercisable

Weighted Average

Remaining Contractual Life

Intrinsic Value

of the outstanding warrants are not entitled to vote and the exercise prices of such warrants are subject to customary anti-dilution

Weighted Average Remaining

Aggregate Intrinsic

Exercise Price

Life in Years

Outstanding and exercisable at January 1, 2024

Outstanding and exercisable at June 30, 2024

Stockholder Meeting Proposals

Company held its annual meeting of stockholders on June 20, 2024.

Stockholders authorized the Company’s board of directors (the

“Board”) to amend the Company’s Certificate of Incorporation, as amended by the Certificate of Designation of Series

D Convertible Preferred Stock and Certificate of Designation of Series D-1 Convertible Preferred Stock (the “Certificates of Designation”),

to effect a reverse stock split of the Company’s common stock, Series D Convertible Preferred Stock, and Series D-1 Convertible

Preferred Stock at a ratio of between 1-for-10 and 1-for-50 , where the ratio would be determined by the Board at its discretion, and

to make corresponding amendments to the Certificates of Designation to provide for the proportional adjustment of certain terms upon

a reverse stock split, consistent with the Board’s recommendation.

The Company’s stockholders also authorized the Board to

amend the Company’s Certificate of Incorporation, as amended by the Certificates of Designation, to decrease the number of authorized

shares of the Company’s common stock and preferred stock by the same reverse stock split ratio determined by the Board, consistent

with the Board’s recommendation.

The Board has not acted on these stockholder authorizations as of the filing date.

June 18, 2022, the Company leased 2,700 square feet of corporate office space in Knoxville, Tennessee through an operating lease agreement

1 unchanged sentence

The monthly base rent ranges from $ 4,053 to $ 4,278 over the term of the lease.

operating lease expense for the three months ended March 31, 2024 was $ 12,842 , of which $ 8,561 was included within research and development

operating lease expense for the three months ended June 30, 2024 was $ 13,002 , of which $ 8,668 was included within research and development

and $ 4,334 was included within general and administrative expenses on the condensed consolidated statements of operations.

Total operating

lease expense for the three months ended March 31, 2023 was $ 13,507 of which $ 9,005 was included within research and development and

lease expense for the three months ended June 30, 2023 was $ 12,672 of which $ 8,448 was included within research and development and $ 4,224

was included within general and administrative expenses on the condensed consolidated statements of operations.

operating lease expense for the six months ended June 30, 2024 was $ 25,844 , of which $ 17,229 was included within research and development

and $ 8,615 was included within general and administrative expenses on the condensed consolidated statements of operations.

Total operating

lease expense for the six months ended June 30, 2023 was $ 26,179 of which $ 17,453 was included within research and development and $ 8,726

was included within general and administrative expenses on the condensed consolidated statements of operations.

summary of the Company’s right-of-use assets and liabilities is as follows:

of Right-of-use Assets and Liabilities

For the Three Months Ended

For the Six Months Ended

Cash paid for amounts included in the measurement of lease liabilities:

4 unchanged sentences

Operating leases

1 year 3 months

2 years 3 months

Weighted Average Discount Rate

Operating leases

minimum payments under the Company’s non-cancellable lease obligations as of March 31, 2024 were as follows:

minimum payments under the Company’s non-cancellable lease obligations as of June 30, 2024 were as follows:

Minimum Payments

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statement of operations, in the period that such costs are incurred.

of March 31, 2024 and December 31, 2023, $ 715,176 and $ 953,248 has been recorded as unearned grant revenue liability on the accompanying

of June 30, 2024 and December 31, 2023, $ 460,185 and $ 953,248 , respectively, have been recorded as unearned grant revenue liability on the accompanying

condensed consolidated balance sheets, respectively.

The Company recorded grant revenue of $ 238,072 during the three months ended March

31, 2024, and $ 205,025 during the three months ended March 31, 2023.

The Company recorded grant revenue of $ 254,991 and $ 493,063 during the three and

six months ended June 30, 2024, respectively, and $ 161,842 and $ 366,867 during the three and six months ended June 30, 2023, respectively.

License Transactions

12 unchanged sentences

March 21, 2024, the Company entered into an exclusive worldwide license for the IP.

Details of the license agreement are

reported in the Company’s Current Report on Form 8-K filed with the U.S.

Securities and Exchange Commission on March 27,

Details of the license agreement are reported in

the Company’s Current Report on Form 8-K filed with the SEC on March 27, 2024.

Commitments, Contingencies and Litigation

7 unchanged sentences

or disclosure in the financial statements, except as disclosed below.

July 11, 2024, the Board approved a Financing Term Sheet (the “2024 Term Sheet”), which set forth the terms under which the

Company will use its best efforts to arrange for financing of a maximum of $ 10,000,000 (the “2024 Financing”), which amounts

will be obtained in several tranches.

to the 2024 Term Sheet, the 2024 Notes (defined below) will convert into shares of the Company’s Series D-1 Preferred Stock twelve

months after the issue date of a 2024 Note, subject to certain exceptions.

2024 Financing will be in the form of an unsecured convertible loan (the “2024 Loan”) from the investors (the “2024

Loan Investors”) and evidenced by convertible promissory notes (individually, a “2024 Note” and collectively, the “2024

In addition to customary provisions, the 2024 Notes will contain the following provisions:

2024 Loan will bear interest at the rate of eight percent ( 8 %) per annum on the outstanding principal amount of the Loan that has

been funded to the Company;

the event there is a change of control of the Board, the term of the 2024 Notes will be accelerated and all amounts due under the

2024 Notes may be immediately due and payable at the 2024 Loan Investors’ option;

outstanding principal amount and interest payable under the 2024 Loan may be convertible at the 2024 Loan Investors’ option

into shares of Series D-1 Convertible Preferred Stock at a price per share equal to $ 2.8620 .

The Series D-1 Convertible Preferred

Stock is convertible into ten ( 10 ) shares of common stock;

outstanding principal amount and interest payable under the 2024 Loan will be automatically convertible into shares of the Company’s

Series D-1 Preferred Stock twelve (12) months after the issue date of a 2024 Note at a price per share equal to $ 2.8620 .

further details on the terms of the 2024 Financing and the details of the 2024 Notes, refer to our Form 8-K as filed with the SEC on

July 17, 2024.

Notes Payable

to March 31, 2024, the Company entered into 2022 Notes with a related party investor (Executive Officer) in the aggregate principal amount

to June 30, 2024, the Company entered into 2024 Notes with a related party investor (Executive Officer) in the aggregate principal amount

of $ 215,000 .

Subsequent to March 31, 2024, the Company entered

into 2022 Notes with a non-related party investor in the aggregate principal amount of $ 200,000 .

D-1 Preferred Stock

to March 31, 2024, principal and interest in the aggregate amount of $ 459,189 , owed in connection with 2022 Notes was converted into

to June 30, 2024, principal and interest in the aggregate amount of $ 972,600 , owed in connection with 2022 Notes was converted into 339,833

shares of Series D-1 Preferred Stock at the Conversion Price of $ 2.862 .

Any fractional shares issuable pursuant to the formula

were rounded up to the next whole share of Series D-1 Preferred Stock.

Any fractional shares issuable pursuant to the formula were rounded

up to the next whole share of Series D-1 Preferred Stock.

Subsequent to June 30, 2024, a holder of 38,474 shares of Series D-1 Preferred

Stock voluntarily converted the Preferred Stock into 384,740 shares of Common Stock.

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