What changed in this filing

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Item 1. Financial Statements

2023-11-09 compared with 2023-08-10 · 157 added, 187 removed, 386 unchanged (47% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

Current assets:

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Series B, $ 0.001 par value:

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

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

Series A, $ 0.001 par value:

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

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

Common stock, $ 0.001 par value;

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

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

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

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

Additional paid in capital

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THREE MONTHS ENDED

SIX MONTHS ENDED

SEPTEMBER 30,

NINE MONTHS ENDED

SEPTEMBER 30,

Royalty revenue

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( 2,796,832 )

( 1,933,599 )

Total operating costs and expenses

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( 5,154,580 )

( 4,306,794 )

Other income (expense):

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS'

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

THREE MONTHS ENDED

SEPTEMBER 30, 2023

Comprehensive

Stockholders’

Balance as of July 1,

$ 207,908,129

1 unchanged sentence

$ ( 5,281,180 )

Issuance of common stock to adjust for reverse split rounding

Share-based expense

( 1,055,555 )

Balance as of June 30, 2023

( 1,055,555 )

of September 30, 2023

$ 207,978,395

$ ( 192,062,690 )

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

$ ( 5,281,180 )

NINE MONTHS ENDED SEPTEMBER 30, 2023

Comprehensive

Stockholders'

Balance as of January

6 unchanged sentences

( 2,963,072 )

Balance as of June 30, 2023

of September 30, 2023

$ 207,978,395

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS'

THREE MONTHS ENDED JUNE 30, 2022

Preferred Stock

Value ($0.001)

Paid in Capital

Accumulated Deficit

Comprehensive Income

Treasury Stock

Stockholders' Equity

Balance as of April 1, 2022

THREE MONTHS ENDED SEPTEMBER 30, 2022

Comprehensive

Stockholders'

Balance as of July 1, 2022

$ 207,025,224

1 unchanged sentence

$ ( 5,281,180 )

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

Share-based expense

Exercise of purchase warrants

( 2,672,190 )

Balance as of June 30, 2022

Balance as of September 30, 2022

$ 207,162,588

1 unchanged sentence

$ ( 5,281,180 )

SIX MONTHS ENDED JUNE 30, 2022

NINE MONTHS ENDED SEPTEMBER 30, 2022

Comprehensive

Stockholders'

as of January 1, 2022

Balance 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

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

and development

Share-based expense

2 unchanged sentences

( 5,069,818 )

of June 30, 2022

Balance as of September 30, 2022

$ 207,162,588

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

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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

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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.

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.

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

Qualifications Department of Nasdaq notifying the Company that the closing bid price for its common stock had been below $1.00 for 30

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

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

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

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 the issuance 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.

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

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

Department of Nasdaq notifying the Company that the closing bid price for its common stock had been below $1.00 for 30 consecutive

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

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 now

Risks and Uncertainties

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

For the three and six months ended June 30, 2023

For the three and nine months ended September

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.

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

inclusion would be anti-dilutive.

Recent Accounting Standards

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Royalty payments

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.

of approximately $ 0.6 million and $ 1.9 million were recorded as revenue by the Company during the three and nine months ended September

30, 2023, respectively, and approximately $ 0.4 million and $ 1.2 million were recorded as revenue by the Company during the three and nine

months ended September 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.

The Company’s policy is to recognize royalty payments as revenue when they are reliably measurable, which is upon receipt of reports

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.

CLS Therapeutics Ltd.

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Volition 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.

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.

2023 the Company entered into the first Collaborator Statement of Work as part of this collaboration with Volition.

Catalent Pharma Solutions LLC (“Catalent”)

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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.

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 $ 2.4 million through September 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 September 30, 2023 and December 31, 2022, respectively.

Scripps Research

18 unchanged sentences

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.

$ 0.5 million under the Agreement through September 30, 2023, of which approximately $ 0.3 million has been recognized as an advance payment

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

Other Agreements

3 unchanged sentences

The Company and its collaborative partners continue

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

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

No amounts were recognized

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

respectively.

as revenue related to the Serum Institute, Pharmsynthez or SynBio agreements during the three and nine months ended September 30, 2023

and 2022, respectively.

Fair Value Measurements

11 unchanged sentences

at the measurement date.

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

As of September 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 and six months ended June 30, 2023 and 2022.

during the three and nine months ended September 30, 2023 and 2022.

Stockholders’ Equity

10 unchanged sentences

stock and expire on February 23, 2025 .

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

No Series A Warrants were exercised or forfeited during the three and nine months ended September

30, 2023 and 2022.

In addition, the Company has publicly traded warrants

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

These warrants have

an exercise price of $ 130.00 per share and expire on July 17, 2024 .

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

These warrants

have an exercise price of $ 130.00 per share and expire on July 17, 2024 .

The warrants trade on Nasdaq under the symbol “XBIOW.”

2 unchanged sentences

for one share of common stock.

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.

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

to purchase approximately 199 shares of common stock were exercised on a cashless, one-for-one basis during the nine months ended September

No warrants were exercised during the three months ended September 30, 2022.

None of these warrants were forfeited during the

three and nine months ended September 30, 2023 and 2022.

The Company also has outstanding warrants to purchase

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

approximately 800 shares of the Company’s common stock as of September 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 and six months

ended June 30, 2023 and 2022.

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

ended September 30, 2023 and 2022.

Share-Based Expense

Total share-based expense related to stock options,

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:

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

2022 and approximately $ 0.2 million and $ 0.4 million for the nine months ended September 30, 2023 and 2022, respectively.

Share-based expense is classified in the condensed consolidated statements

of operations as follows:

Schedule of share-based compensation expense

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Research and development expenses

2 unchanged sentences

No stock option awards to purchase shares of common

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.

stock were granted during the three and nine months ended September 30, 2023.

During the nine months ended September 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 share-based expense

related to employee stock options during each of the three months ended September 30, 2023 and 2022 and $ 0.2 million and $ 0.4 million

during the nine months ended September 30, 2023 and 2022, respectively.

No employee stock options or RSUs were exercised and none expired

during the three and nine months ended September 30, 2023 and 2022.

Non-Employee Stock Options

There were no non-employee stock options granted

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

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,

or exercised during the three and nine months ended September 30, 2023 and 2022, respectively.

During the nine months ended September

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 nine months ended September 30, 2022.

The Company did no t recognize any share-based expense related to non-employee

stock options during the three and nine months ended September 30, 2023 and 2022, respectively.

During the three and nine months ended September

30, 2023 and 2022, there was no provision for income taxes as the Company incurred losses during both periods.

Deferred tax assets and liabilities

reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes

and the amounts used for income tax purposes.

The Company records a valuation allowance against its deferred tax assets as the Company

believes it is more likely than not the deferred tax assets will not be realized.

The valuation allowance against deferred tax assets

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.

Deferred tax assets and

liabilities reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting

purposes and the amounts used for income tax purposes.

The Company records a valuation allowance against its deferred tax assets as the

Company believes it is more likely than not the deferred tax assets will not be realized.

The valuation allowance against deferred tax

assets was approximately $ 39.2 million and $ 38.6 million as of September 30, 2023 and December 31, 2022, respectively.

As of September 30, 2023 and December 31,

2022, the Company did not record any unrecognized tax positions.

and Contingencies

Supplemental cash flow information and non-cash

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

Cash flow information regarding leases

September 30,

Operating cash flow information:

Cash paid for amounts included in the measurement of lease liabilities

Supplemental balance sheet information related

to the Company’s operating leases is as follows:

Supplemental information related to operating leases

Balance Sheet Classification

June 30, 2023

June 30, 2022

Right-of-use assets - ST

Prepaid expenses and other

Current lease liabilities

Accrued expenses and other current liabilities

Effective October 1, 2022, the Company did not apply the provisions

of ASU 2016-02 as its leases had terms of 12-month or less at inception.

As of September 30, 2023, total minimum lease payments were approximately

Related Party Transactions

10 unchanged sentences

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.

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 nine months ended September 30, 2023.

The Company recognized approximately $ 9,000 of interest

income related to the Pharmsynthez Loan during the nine months ended September 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 September 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 except as described in footnote 4.

recognition or disclosure in the financial statements except as discussed below.

On October 24, 2023, all of the Company’s Series

A Preferred Stock was converted into approximately 8,000 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