What changed in this filing

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Item 1. Financial Statements

2023-08-10 compared with 2023-05-11 · 254 added, 178 removed, 319 unchanged (58% of the section changed)

15 unchanged sentences

Series B, $ 0.001 par value:

1,804,394 shares issued and outstanding as of March 31, 2023 and December 31, 2022

1,804,394 shares issued and outstanding as of June 30, 2023 and December 31, 2022

Series A, $ 0.001 par value:

970,000 shares issued and outstanding as of March 31, 2023 and December 31, 2022

970,000 shares issued and outstanding as of June 30, 2023 and December 31, 2022

Common stock, $ 0.001 par value;

100,000,000 shares authorized as of March 31, 2023 and December 31, 2022;

15,193,587 shares issued as of March 31, 2023 and December 31, 2022;

15,166,596 shares outstanding as of March 31, 2023 and December 31, 2022

10,000,000 shares authorized as of June 30, 2023 and December 31, 2022;

1,535,301 and 1,519,360 shares issued as of June 30, 2023 and December 31, 2022, respectively;

1,532,600 and 1,516,659 shares outstanding as of June 30, 2023 and December 31, 2022, respectively

Additional paid in capital

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended March 31,

THREE MONTHS ENDED

SIX MONTHS ENDED

Royalty revenue

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( 2,077,499 )

( 1,498,519 )

( 3,178,898 )

General and administrative

( 1,026,290 )

( 1,871,693 )

( 1,933,599 )

Total operating costs and expenses

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( 3,103,789 )

( 3,370,212 )

( 5,112,497 )

Loss from operations

( 1,198,188 )

Other income:

Interest income

( 2,687,079 )

( 2,113,363 )

( 4,306,794 )

Other income (expense):

Other income (expense)

Interest income, net

Total other income

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$ ( 2,672,190 )

Basic and diluted loss per share

$ ( 1,907,517 )

$ ( 4,265,801 )

Basic and diluted net loss per share

Weighted-average shares of common stock outstanding, basic and diluted

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS'

THREE MONTHS ENDED MARCH 31, 2023

THREE MONTHS ENDED JUNE 30, 2023

Preferred Stock

Number of Shares

Par Value ($0.001)

Number of Shares

Par Value ($0.001)

Paid in Capital

Accumulated Deficit

Comprehensive Income

Treasury Stock

Stockholders’ Equity

Balance as of April 1, 2023

$ 207,838,756

$ ( 189,956,172

$ ( 5,281,180 )

Issuance of common stock to adjust for reverse split rounding

Share-based expense

( 1,050,963 )

Balance as of June 30, 2023

$ 207,908,129

$ ( 191,007,135

$ ( 5,281,180 )

SIX MONTHS ENDED JUNE 30, 2023

Preferred Stock

Number of Shares

Par Value ($0.001)

Number of Shares

Par Value ($0.001)

Paid in Capital

Accumulated Deficit

Comprehensive Income

Treasury Stock

Stockholders' Equity

Balance as of January 1, 2023

$ 207,769,904

$ ( 189,099,618 )

$ ( 5,281,180 )

Issuance of common stock to adjust for reverse split rounding

Share-based expense

( 1,907,517 )

Balance as of June 30, 2023

$ 207,908,129

$ ( 191,007,135 )

$ ( 5,281,180 )

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

XENETIC BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS'

THREE MONTHS ENDED JUNE 30, 2022

Preferred Stock

Value ($0.001)

Comprehensive

Stockholders'

Balance as of January

Paid in Capital

Accumulated Deficit

Comprehensive Income

Treasury Stock

Stockholders' Equity

Balance as of April 1, 2022

$ 206,084,442

1 unchanged sentence

$ ( 5,281,180 )

Issuance of common stock in connection with purchase of in-process research and development

Share-based expense

of March 31, 2023

Exercise of purchase warrants

( 2,672,190 )

Balance as of June 30, 2022

$ 207,025,224

THREE MONTHS ENDED MARCH 31, 2022

$ ( 186,813,066 )

$ ( 5,281,180 )

SIX MONTHS ENDED JUNE 30, 2022

Comprehensive

Stockholders'

Balance as of January

as of January 1, 2022

$ 205,964,847

1 unchanged sentence

$ ( 5,281,180 )

Issuance of common stock in connection

with purchase of in-process research and development

Share-based expense

2 unchanged sentences

( 4,265,801 )

Balance as of March 31, 2022

of June 30, 2022

$ 207,025,224

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

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Adjustments to reconcile net loss to net cash used in operating activities:

Acquired in-process research and development

Amortization of right of use asset

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( 2,816,590 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Net cash paid to acquire in-process research and development

Net cash used in investing activities

Net change in cash

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SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Issuance of common stock from cashless exercise of purchase warrants

Issuance of common stock to acquire in-process research and development

The accompanying notes are an integral part of

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along with unregistered trademarks and service marks, including but not limited to XCART, OncoHist™, PolyXen, ErepoXen™, and

ImuXen™, which are used throughout this Quarterly Report.

ImuXen™, which may be used throughout this Quarterly Report.

All other company and product names may be trademarks of the respective

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Going Concern and Management’s Plan

Management evaluates whether there are conditions

or events, considered in the aggregate that raise substantial doubt about the Company’s ability to continue as a going concern within

one year after the date that the financial statements are issued.

The Company has incurred substantial losses since its inception and

expects to continue to incur operating losses in the near-term.

These factors raise substantial doubt about its ability to continue as

a going concern.

The Company believes that it has access to capital resources through possible public or private equity offerings, debt

financings, corporate collaborations, related party funding, or other means to continue as a going concern.

The Company believes that

its existing resources will be adequate to fund the Company’s operations for a period of at least twelve months from the date of

these financial statements.

Management evaluates whether there are conditions or events, considered

in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after

the date that the financial statements are issued.

The Company has incurred substantial losses since its inception and expects to continue

to incur operating losses in the near-term.

These factors raise substantial doubt about its ability to continue as a going concern.

Company believes that it has access to capital resources through possible public or private equity offerings, debt financings, corporate

collaborations, related party funding, or other means to continue as a going concern.

The Company believes that its existing resources

will be adequate to fund the Company’s operations for a period of at least twelve months from the date of these financial statements.

However, the Company anticipates it may need additional capital in the long-term to pursue its business initiatives.

The terms, timing and extent of any future financing will depend upon several factors, including the achievement of progress in its product

development programs, its ability to identify and enter into licensing or other strategic arrangements, its continued listing on the Nasdaq

Stock Market (“Nasdaq”), and factors related to financial, economic, geo-political, industry and market conditions, many of

which are beyond its control.

The capital markets for the biotech industry can be highly volatile, which make the terms, timing and extent

of any future financing uncertain.

The terms, timing

and extent of any future financing will depend upon several factors, including the achievement of progress in its product development

programs, its ability to identify and enter into licensing or other strategic arrangements, its continued listing on the Nasdaq Stock

Market (“Nasdaq”), and factors related to financial, economic, geo-political, industry and market conditions, many of which

are beyond its control.

The capital markets for the biotech industry can be highly volatile, which make the terms, timing and extent of

any future financing uncertain.

On June 3, 2022, the Company received a written notification (the “Notice”) from the Listing

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consecutive business days and that the Company therefore was not in compliance with the minimum bid price requirement for continued inclusion

on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Requirement”).

The Notice has no immediate

effect on the listing of the Company’s common stock on the Nasdaq Capital Market.

Under the Nasdaq Listing Rules, the Company had

a period of 180 calendar days from the date of the Notice to regain compliance with the Bid Price Requirement.

Accordingly, the Company

had until November 30, 2022 to regain compliance with the Bid Price Requirement and was eligible for an additional 180 calendar day compliance

period if certain other criteria were met.

On December 1, 2022, the Company received a letter from Nasdaq informing it that although the

Company’s common stock had not regained compliance with the minimum $1.00 bid price per share requirement, Nasdaq had determined

that the Company was eligible for an additional 180 calendar day period, or until May 29, 2023, to regain compliance.

Nasdaq’s determination

was based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements

for initial listing on the Nasdaq Capital Market with the exception of the bid price requirement, and the Company’s written notice

of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary.

on Nasdaq under Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Requirement”).

The Notice had no immediate effect on the listing

of the Company’s common stock on the Nasdaq Capital Market.

On May 15, 2023, the Company effected a reduction, on a 1-for-10 basis,

in its authorized common stock, par value $ 0.001 , along with a corresponding and proportional decrease in the number of shares issued

and outstanding (the “Reverse Stock Split”).

On May 30, 2023, the Company received a letter from Nasdaq notifying the Company

that it has regained compliance with the Bid Price Requirement as a result of the closing bid price of the Company’s common stock

being at $ 1.00 per share or greater for the 10 consecutive business days from May 15, 2023 through May 26, 2023 and that this matter is

Risks and Uncertainties

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in Ukraine on Operations

The short and long-term implications of Russia’s

invasion of Ukraine are difficult to predict at this time.

The imposition of sanctions and counter sanctions may have an adverse effect

on the economic markets generally and could impact our business, financial condition, and results of operations.

The short and long-term

implications of Russia’s invasion of Ukraine are difficult to predict at this time.

The imposition of sanctions and counter sanctions

may have an adverse effect on the economic markets generally and could impact our business, financial condition, and results of operations.

Summary of Significant Accounting Policies

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December 31, 2022 filed with the SEC on March 22, 2023, and amended on April 28, 2023.

On May 15, 2023, the Company effected the Reverse

On the effective date of the Reverse Stock Split, (i) every 10 shares of common stock were reduced to one share of common

stock, with any fractional amounts rounded up to one share;

(ii) the number of shares of common stock into which each outstanding warrant,

restricted stock unit, or option to purchase common stock were proportionately reduced on the same basis as the common stock;

exercise price of each outstanding warrant or option to purchase common stock were proportionately increased on a 1-to-10 basis;

the number of shares of common stock into which each share of preferred stock were proportionately reduced on the same basis as the common

Unless otherwise indicated, all of the share numbers, share prices, and exercise prices have been adjusted in this Quarterly Report,

on a retroactive basis, to reflect this 1-for-10 Reverse Stock Split .

Principles of Consolidation

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Financial instruments that potentially subject

the Company to credit risk consist primarily of cash on deposit with financial institutions, the balances of which frequently exceed federally

the Company to credit risk consist primarily of cash on deposit with financial institutions, the balances of which may exceed federally

insured limits.

On March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection

and Innovation, which appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver.

The Company’s cash consisted

primarily of money market funds held at SVB.

On March 12, 2023, the U.S.

Treasury, Federal Reserve and FDIC rolled out emergency measures

to fully protect all depositors of SVB and on March 13, 2023, we had full access to our cash on deposit with SVB.

As of March 31, 2023,

the Company had transferred its primary banking relationship to a large financial institution and all cash on deposit is covered under

federally insured limits.

The Company has not experienced any losses on such accounts, and does not believe it is exposed to any unusual credit

risk beyond the normal credit risk currently associated with commercial banking relationships.

Cash deposits are insured by the Federal

Deposit Insurance Corporations up to $ 250,000 .

The Company maintains its primary banking relationship with one large financial institution

and all cash on deposit is covered under federally insured limits.

Basic and Diluted Net Loss per Share

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that are outstanding during the period, except where such non-participating securities would be anti-dilutive.

For the three months ended March 31, 2023 and

2022, basic and diluted net loss per share are the same for each respective period due to the Company’s net loss position.

For the three and six months ended June 30, 2023

and 2022, basic and diluted net loss per share are the same for each respective period due to the Company’s net loss position.

dilutive, non-participating securities have not been included in the calculations of diluted net loss per share, as their inclusion would

be anti-dilutive.

Recently Adopted Accounting Standards

Recent Accounting Standards

In June 2016, the Financial Accounting Standards

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Royalty payments

of approximately $ 0.6 million and $ 0.4 million were recorded as revenue by the Company during the three months ended March 31, 2023 and

2022, respectively, and are based on single digit royalties on net sales of certain covered products.

The Company’s policy is to

recognize royalty payments as revenue when they are reliably measurable, which is upon receipt of reports from Takeda.

The Company receives

these reports in the quarter subsequent to the actual sublicensee sales.

At the time the revenue was received, there were no remaining

performance obligations and all other revenue recognition criteria were met.

of approximately $ 0.7 million and $ 1.3 million were recorded as revenue by the Company during the three and six months ended June 30,

2023, respectively, and approximately $ 0.4 million and $ 0.8 million were recorded as revenue by the Company during the three and six months

ended June 30, 2022, respectively.

These payments are based on single digit royalties on net sales of certain covered products.

The Company’s

policy is to recognize royalty payments as revenue when they are reliably measurable, which is upon receipt of reports from Takeda.

Company receives these reports in the quarter subsequent to the actual sublicensee sales.

At the time the revenue was received, there

were no remaining performance obligations and all other revenue recognition criteria were met.

CLS Therapeutics Ltd.

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Volition Collaboration

On August 2, 2022, the Company announced a research

and development collaboration with Volition to develop NETs-targeted adoptive cell therapies for the treatment of cancer.

The collaboration

is an early exploratory program to evaluate the potential combination of Volition’s Nu.Q ® technology Test and the

Company’s DNase-Armored CAR T platform to develop proprietary adoptive cell therapies potentially targeting multiple types of solid

Under the terms of the collaboration agreement, Volition will fund a research program and the two parties will share proceeds

from commercialization or licensing of any products arising from the collaboration.

On August 2, 2022, the Company announced a

research and development collaboration with Belgian Volition SARL Limited (“Volition”) to develop NETs-targeted adoptive

cell therapies for the treatment of cancer.

The collaboration is an early exploratory program to evaluate the potential combination

of Volition’s Nu.Q ® technology Test and the Company’s DNase-Armored CAR T platform to develop

proprietary adoptive cell therapies potentially targeting multiple types of solid cancers.

Under the terms of the collaboration

agreement, Volition will fund a research program and the two parties will share proceeds from commercialization or licensing of any

products arising from the collaboration.

Subsequent to the quarter end, the Company entered into the first Collaborator Statement of

Work as part of this collaboration with Volition.

Catalent Pharma Solutions LLC (“Catalent”)

On June 30, 2022, the Company entered into a

Statement of Work (the “SOW”) with Catalent to outline the general scope of work, timeline, and pricing pursuant to

which Catalent will provide certain services to the Company to perform cGMP manufacturing of the Company’s recombinant

protein, Human DNase I.

The parties agreed to enter into a Master Services Agreement (“MSA”) that will contain terms and

conditions to govern the project contemplated by the SOW and that will supersede the addendum to the SOW containing Catalent's

standard terms and conditions.

In addition, in the event of any conflict between the project-specific terms and conditions set forth

in the SOW and the MSA, the MSA terms and conditions shall govern.

The estimated total cost of the project contemplated by the SOW

is expected to be up to approximately $5 million (exclusive of certain fees and potential alternatives) for the manufacturing

services over the course of the term of the project with each phase of the project invoiced separately in connection with the

commencement of such phase.

Unless earlier amended or terminated, the manufacturing services contemplated by the SOW are currently

targeted to be completed by the first half of 2024.

The SOW is terminable by the Company at any time with 30 days' prior written

notice to Catalent.

The SOW also contains customary provisions related to, among other things, confidentiality, warranties,

intellectual property and indemnification.

The Company has paid Catalent approximately $ 1 .0 million through March 31, 2023, of which $ 0.4

million and $ 0.3

million has been recognized as an advance payment and is included in prepaid expenses and other as of March 31, 2023 and

December 31, 2022, respectively.

On June 30, 2022, the Company entered into a Statement

of Work (the “SOW”) with Catalent to outline the general scope of work, timeline, and pricing pursuant to which Catalent will

provide certain services to the Company to perform cGMP manufacturing of the Company’s recombinant protein, Human DNase I.

agreed to enter into a Master Services Agreement (“MSA”) that will contain terms and conditions to govern the project contemplated

by the SOW and that will supersede the addendum to the SOW containing Catalent’s standard terms and conditions.

In addition, in

the event of any conflict between the project-specific terms and conditions set forth in the SOW and the MSA, the MSA terms and conditions

shall govern.

The estimated total cost of the project contemplated by the SOW is expected to be up to approximately $5 million (exclusive

of certain fees and potential alternatives) for the manufacturing services over the course of the term of the project with each phase

of the project invoiced separately in connection with the commencement of such phase.

Unless earlier amended or terminated, the manufacturing

services contemplated by the SOW are currently targeted to be completed by the first half of 2024.

The SOW is terminable by the Company

at any time with 30 days’ prior written notice to Catalent.

The SOW also contains customary provisions related to, among other things,

confidentiality, warranties, intellectual property and indemnification.

The Company has paid Catalent approximately $ 1.8 million through

June 30, 2023, of which $ 0.9 million and $ 0.3 million has been recognized as an advance payment and is included in prepaid expenses and

other as of June 30, 2023 and December 31, 2022, respectively.

Scripps Research

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under the Agreement or the bankruptcy of the other party.

No payments were made to Scripps Research under

this agreement through March 31, 2023.

As of March 31, 2023, the Company has recorded accrued program expense of approximately $ 40,000

in connection with this agreement as a component of accrued expenses and other current liabilities.

The Company has paid Scripps Research approximately

$ 0.3 million under this agreement through June 30, 2023, of which approximately $ 37,000 has been recognized as an advance payment and

is included in prepaid expenses and other as of June 30, 2023.

Other Agreements

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The Company and its collaborative partners continue

to engage in research and development activities with no resultant commercial products through March 31, 2023.

to engage in research and development activities with no resultant commercial products through June 30, 2023.

No amounts were recognized

as revenue related to the Serum Institute, Pharmsynthez or SynBio agreements during the three months ended March 31, 2023 and 2022, respectively.

as revenue related to the Serum Institute, Pharmsynthez or SynBio agreements during the three and six months ended June 30, 2023 and 2022,

respectively.

Fair Value Measurements

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at the measurement date.

As of March 31, 2023 and December 31, 2022, the carrying amounts of the Company’s financial instruments

As of June 30, 2023 and December 31, 2022, the carrying amounts of the Company’s financial instruments

approximates fair value due to their short maturities.

There were no financial instruments classified as Level 3 in the fair value hierarchy

during the three months ended March 31, 2023 and 2022.

during the three and six months ended June 30, 2023 and 2022.

Stockholders’ Equity

On May 11, 2023, the Company filed a Certificate

of Change to the Company’s Articles of Incorporation with the Secretary of State of Nevada to effect the Reverse Stock Split.

Reverse Stock Split was effective at 12:01 a.m., Eastern Time, on May 15, 2023.

No fractional shares were issued as a result of the Reverse

Stock Split and any remaining share fractions were rounded up to the nearest whole share, resulting in 15,941 new shares of common stock

being issued to existing holders of the Company’s common stock.

In connection

with its July 2021 private placement, the Company issued warrants to purchase an aggregate of 4,629,630 shares of the Company’s

common stock (the “Series A Warrants”).

The Series A Warrants are immediately exercisable at a price of $ 3.30 per share of

common stock and expire on February 23, 2025 .

No Series A Warrants were exercised or forfeited during the three months ended March 31,

with its July 2021 private placement, the Company issued warrants to purchase an aggregate of 462,963 shares of the Company’s common

stock (the “Series A Warrants”).

The Series A Warrants are immediately exercisable at a price of $ 33.00 per share of common

stock and expire on February 23, 2025 .

No Series A Warrants were exercised or forfeited during the three and six months ended June 30,

2023 and 2022.

In addition, the Company has publicly traded warrants

to purchase approximately 21,000 shares of common stock outstanding as of both March 31, 2023 and December 31, 2022.

to purchase approximately 2,100 shares of common stock outstanding as of both June 30, 2023 and December 31, 2022.

These warrants have

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for one share of common stock.

None of these warrants were exercised during the three months ended March 31, 2023.

Warrants to purchase

1,684 shares of common stock were exercised on a cashless, one-for-one basis during the three months ended March 31, 2022.

None of these

warrants were forfeited during the three months ended March 31, 2023 and 2022.

None of these warrants were exercised during the three and six months ended June 30, 2023.

purchase approximately 30 and 199 shares of common stock were exercised on a cashless, one-for-one basis during the three and six months

ended June 30, 2022, respectively.

None of these warrants were forfeited during the three and six months ended June 30, 2023 and 2022.

The Company also has outstanding warrants to purchase

approximately 8,000 shares of the Company’s common stock as of March 31, 2023 and December 31, 2022.

approximately 800 shares of the Company’s common stock as of June 30, 2023 and December 31, 2022.

These warrants have an exercise

price of $ 29.09 per share and expire on July 3, 2026 .

None of these warrants were exercised or forfeited during the three months ended

March 31, 2023 and 2022.

None of these warrants were exercised or forfeited during the three and six months

ended June 30, 2023 and 2022.

Share-Based Expense

Total share-based expense related to stock options,

and restricted stock units (“RSUs”) was approximately $ 0.1 million during each of the three months ended March 31, 2023 and

Share-based expense is classified in the condensed

consolidated statements of operations as follows:

restricted stock units and common stock awards was approximately $ 0.1 million for each of the three months ended June 30, 2023 and 2022

and approximately $ 0.1 million and $ 0.3 million for the six months ended June 30, 2023 and 2022, respectively.

Share-based compensation expense is classified in the condensed consolidated

statements of operations as follows:

Schedule of share-based compensation expense

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Research and development expenses

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No stock option awards to purchase shares of common

stock were granted during the three months ended March 31, 2023.

D uring the three months

ended March 31, 2022, the Company granted 200,000 stock option awards to purchase shares of common stock.

The Company recognized a total

of approximately $ 0.1 million of compensation expense related to employee stock options during each of the three months ended March 31,

2023 and 2022.

No employee stock options or RSUs were exercised and none expired during the three months ended March 31, 2023 and 2022.

stock were granted during the three and six months ended June 30, 2023.

During the six months ended June 30, 2022, the Company granted

20,000 stock option awards to purchase shares of common stock.

The Company recognized a total of $ 0.1 million of compensation expense

related to employee stock options during each of the three months ended June 30, 2023 and 2022 and $ 0.1 million and $ 0.3 million during

the six months ended June 30, 2023 and 2022, respectively.

No employee stock options or RSUs were exercised and none expired during the

three and six months ended June 30, 2023 and 2022.

Non-Employee Stock Options

There were no non-employee stock options granted

or exercised during the three months ended March 31, 2023 and 2022, respectively.

During the three months ended March 31, 2023, non-employee

or exercised during the three and six months ended June 30, 2023 and 2022, respectively.

During the six months ended June 30, 2023, non-employee

stock option grants to purchase approximately 100 shares of common stock expired.

No non-employee stock option grants expired during

the three months ended March 31, 2022.

The Company did not recognize any expense related to non-employee stock options during the three

months ended March 31, 2023 and 2022, respectively.

During the three months ended March 31, 2023 and

2022, there was no provision for income taxes as the Company incurred losses during both periods.

No non-employee stock option grants expired during the

six months ended June 30, 2022.

The Company did no t recognize any expense related to non-employee stock options during the three and six

months ended June 30, 2023 and 2022, respectively.

During the three and six months ended June 30,

2023 and 2022, there was no provision for income taxes as the Company incurred losses during both periods.

Deferred tax assets and liabilities

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The valuation allowance against deferred tax assets

was approximately $ 38.7 million and $ 38.6 million as of March 31, 2023 and December 31, 2022, respectively.

As of March 31, 2023 and December 31, 2022,

was approximately $ 39 .0 million and $ 38.6 million as of June 30, 2023 and December 31, 2022, respectively.

As of June 30, 2023 and December 31, 2022,

the Company did no t record any unrecognized tax positions.

Commitments and contingencies

Supplemental cash flow information and non-cash

activity related to our operating leases are as follows:

activity related to the Company’s operating leases are as follows:

Cash flow information regarding leases

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Supplemental balance sheet information related

to our operating leases is as follows:

to the Company’s operating leases is as follows:

Supplemental information related to operating leases

Balance Sheet Classification

March 31, 2023

March 31, 2022

June 30, 2023

June 30, 2022

Right-of-use assets - ST

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The Pharmsynthez Loan had an initial term of 15-months and accrued interest at a rate of 10 %

The Pharmsynthez Loan is guaranteed by all of the operating subsidiaries of Pharmsynthez, including SynBio and AS Kevelt, and

is secured by all of the common and preferred stock of the Company owned by Pharmsynthez and SynBio.

The Pharmsynthez Loan has been amended at various

times primarily to extend the principal repayment schedule and maturity date.

The Pharmsynthez Loan, as amended, currently has a maturity

date of May 31, 2023 and requires the repayment of the remaining principal amount, plus interest, in seven (7) monthly installments from

November 30, 2022 through May 31, 2023 as well as certain other terms and conditions.

While Pharmsynthez has made certain payments in

accordance with the repayment schedule, all principal and interest payments required to date under the Pharmsynthez Loan, as amended,

have not been made.

As a result, the Company has classified the loan receivable as long-term as of March 31, 2023 and December 31, 2022.

The Company assessed the collectability of the loan and determined that the U.S.-based collateral held by the Company, consisting of all

of the common and preferred stock of the Company owned by Pharmsynthez and SynBio, was adequate to support the repayment of the outstanding

principal balance.

As of March 31, 2023 and December 31, 2022, approximately $ 0.2 million and $ 0.4 million , respectively, was included

in other assets on the condensed consolidated balance sheet.

The Company did no t recognize any interest income related to this loan during

the three months ended March 31, 2023.

The Company recognized approximately $ 9,000 of interest income related to this loan during the

three months ended March 31, 2022.

The Pharmsynthez Loan was guaranteed by all of the operating subsidiaries of Pharmsynthez, including SynBio and AS Kevelt,

and was secured by all of the common and preferred stock of the Company owned by Pharmsynthez and SynBio.

Pharmsynthez paid all obligations due under the Pharmsynthez Loan in

May 2023, and no further amounts are due under the Pharmsynthez Loan.

As a result, the Company recognized approximately $ 65,000 of income

related to interest and fees associated with the Pharmsynthez Loan including approximately $ 40,000 related to interest income during the

three and six months ended June 30, 2023.

The Company recognized approximately $ 9,000 of interest income related to the Pharmsynthez Loan

during the six months ended June 30, 2022.

As of December 31, 2022, approximately $ 0.4 million was included in other assets on the condensed

consolidated balance sheet.

No amounts were outstanding as of June 30, 2023.

Subsequent Events

1 unchanged sentence

to the balance sheet date through the date the financial statements were issued and determined that there were no such events requiring

recognition or disclosure in the financial statements.

recognition or disclosure in the financial statements except as described in footnote 4.

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