What changed in this filing

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Item 1. Financial Statements

2024-08-13 compared with 2024-05-09 · 226 added, 133 removed, 261 unchanged (58% of the section changed)

3 unchanged sentences

Current assets:

Prepaid expenses and other

Prepaid expenses, receivables and other

Total current assets

9 unchanged sentences

Series B, $ 0.001 par value:

1,804,394 shares issued and outstanding as of March 31, 2024 and December 31, 2023

1,804,394 shares issued and outstanding as of June 30, 2024 and December 31, 2023

Common stock, $ 0.001 par value;

10,000,000 shares authorized as of March 31, 2024 and December 31, 2023;

1,543,385 shares issued as of March 31, 2024 and December 31, 2023;

1,540,684 shares outstanding as of March 31, 2024 and December 31, 2023

10,000,000 shares authorized as of June 30, 2024 and December 31, 2023;

1,543,802 and 1,543,385 shares issued as of June 30, 2024 and December 31, 2023, respectively;

1,541,101 and 1,540,684 shares outstanding as of June 30, 2024 and December 31, 2023, respectively

Additional paid in capital

12 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended March 31,

THREE MONTHS ENDED

SIX MONTHS ENDED

Royalty revenue

2 unchanged sentences

Research and development

( 1,878,092 )

( 1,498,519 )

General and administrative

( 1,130,029 )

( 1,964,939 )

( 1,871,693 )

Total operating costs and expenses

1 unchanged sentence

( 1,849,193 )

( 3,843,031 )

( 3,370,212 )

Loss from operations

( 1,337,396 )

Other income:

( 1,198,188 )

( 2,605,810 )

( 2,113,363 )

Other income (expense):

Other (expense) income

Interest income, net

2 unchanged sentences

$ ( 1,050,963 )

Basic and diluted loss per share

$ ( 2,469,083 )

$ ( 1,907,517 )

Basic and diluted net loss per share

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

2 unchanged sentences

XENETIC BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS'

THREE MONTHS ENDED MARCH 31, 2024

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN STOCKHOLDERS' EQUITY

THREE MONTHS ENDED JUNE 30, 2024

Comprehensive

Stockholders'

Balance as of April

$ 208,131,009

$ ( 194,429,309 )

$ ( 5,281,180 )

Issuance of common stock in connection

with restricted stock

Share-based expense

( 1,273,970 )

of June 30, 2024

$ 208,173,105

$ ( 195,703,279 )

$ ( 5,281,180 )

SIX MONTHS ENDED JUNE 30, 2024

Value ($0.001)

Comprehensive

Stockholders'

Balance as of January

2 unchanged sentences

$ ( 5,281,180 )

Issuance of common stock in connection

with restricted stock

Share-based expense

1 unchanged sentence

( 2,469,083 )

Balance as of March 31, 2024

of June 30, 2024

$ 208,173,105

1 unchanged sentence

$ ( 5,281,180 )

THREE MONTHS ENDED MARCH 31, 2023

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

XENETIC BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN STOCKHOLDERS' EQUITY

THREE MONTHS ENDED JUNE 30, 2023

Value ($0.001)

Comprehensive

Stockholders’ Equity

Balance as of April

$ 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 )

of June 30, 2023

$ 207,908,129

$ ( 191,007,135 )

$ ( 5,281,180 )

SIX MONTHS ENDED JUNE 30, 2023

Value ($0.001)

Comprehensive

Stockholders'

3 unchanged sentences

$ ( 5,281,180 )

Issuance of common stock to adjust

for reverse split rounding

Share-based expense

Balance as of March 31, 2023

( 1,907,517 )

of June 30, 2023

$ 207,908,129

$ ( 191,007,135 )

$ ( 5,281,180 )

The accompanying notes are an integral part of

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

4 unchanged sentences

Changes in operating assets and liabilities:

Prepaid expenses and other

Prepaid expenses, receivables and other

Accounts payable, accrued expenses and other liabilities

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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 the issuance of these financial statements.

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

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.

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 will 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.

While the Company believes 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

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

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(ii) the number

of shares of common stock into which each outstanding warrant, restricted stock unit, or option to purchase common stock was convertible

into was proportionately reduced on the same basis as the common stock;

(iii) the exercise price of each outstanding warrant or option

to purchase common stock was proportionately increased on a 1-to-10 basis;

and (iv) the number of shares of common stock into which each

share of preferred stock was convertible into was proportionately reduced on the same basis as the common stock.

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.

of shares of common stock into which each outstanding warrant, restricted stock unit (“RSU”), or option to purchase common

stock was convertible into was proportionately reduced on the same basis as the common stock;

(iii) the exercise price of each outstanding

warrant or option to purchase common stock was proportionately increased on a 1-to-10 basis;

and (iv) the number of shares of common stock

into which each share of preferred stock was convertible into was proportionately reduced on the same basis as the common stock.

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

3 unchanged sentences

Incorporated, and SymbioTec.

All intercompany balances and transactions have been eliminated in consolidation.

Certain prior period amounts have been reclassified

in this Quarterly Report to conform to the presentation for the current period and had no impact on the reported results of operations.

Certain of the Company’s subsidiaries require guarantees of support from Xenetic.

While all intercompany

balances and transactions have been eliminated in consolidation, the Company has $0.2 million of cash collateralizing these guarantees.

Basic and Diluted Net Loss per Share

4 unchanged sentences

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

For the three months ended March 31, 2024 and

2023, 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, 2024

and 2023, basic and diluted net loss per share are the same in 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

7 unchanged sentences

Royalty payments

of approximately $ 0.5 million and $ 0.6 million were recorded as revenue by the Company during the three months ended March 31, 2024 and

2023, 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 $ 1.2 million were recorded as revenue by the Company during the three and six months ended June 30,

2024, respectively, and 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.

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.

Belgian Volition SARL Limited (“Volition”)

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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

The Company has paid Catalent approximately $ 2.5 million through March 31, 2024, of which $ 28,000 and $ 0.1 million has been recognized

as an advance payment and is included in prepaid expenses and other current assets as of March 31, 2024 and December 31, 2023, respectively.

In addition, $ 0.3 million has been recognized within other assets as of both March 31, 2024 and December 31, 2023.

agreed to enter into a Master Services Agreement 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.

The Company has paid Catalent approximately

$ 2.5 million through June 30, 2024, of which approximately $ 28,000 and $ 0.1 million has been recognized as an advance payment and is included

in prepaid expenses, receivables and other current assets as of June 30, 2024 and December 31, 2023, respectively, and approximately $ 49,000

has been recognized as a liability and is included in accrued expenses and other current liabilities as of June 30, 2024.

accrual as of December 31, 2023.

In addition, approximately $ 0.3 million has been recognized within other assets as of both June 30, 2024

and December 31, 2023.

Scripps Research Institute (“Scripps

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the performance of the research program contemplated by the Agreement.

Unless earlier terminated, the term of the Agreement continues

from the date of the Agreement for fifteen (15) months.

The Agreement may be terminated by the Company with 30 days advance written notice

to Scripps Research or by Scripps Research if the Company fails to make timely payments due under the Agreement, subject to 30 days’

written notice to cure such nonpayment.

The Agreement may further be terminated by either party in the event of the other party’s

uncured failure to perform any obligations under the Agreement or the bankruptcy of the other party.

The Company has paid Scripps Research

approximately $ 0.9 million under the Agreement through March 31, 2024, of which approximately $ 0.1 million and $ 0.4 million has been recognized

as an advance payment and is included in prepaid expenses and other current assets as of March 31, 2024 and December 31, 2023, respectively.

During the second quarter of 2024, the Company amended the

Agreement to extend the term to October 31, 2024 with no additional funding required.

The Company has paid Scripps Research approximately

$ 0.9 million under the Agreement through June 30, 2024, of which approximately $ 0.1 million and $ 0.4 million has been recognized as an

advance payment and is included in prepaid expenses, receivables and other current assets as of June 30, 2024 and December 31, 2023, respectively.

University of Virginia (“UVA”)

8 unchanged sentences

the UVA Agreement.

The Company has paid UVA approximately $ 0.1 million under the UVA Agreement through March 31, 2024, of which

approximately $ 29,000 has been recognized as an advance payment and is included in prepaid expenses and other current assets as of March

The Company has paid UVA approximately $ 0.2 million under the UVA Agreement through June 30, 2024, which was

expensed during the six months ended June 30, 2024.

There were no amounts incurred as of December 31, 2023.

4 unchanged sentences

The Company and its collaborative partners continue

to engage in research and development activities with no resultant commercial products through March 31, 2024.

to engage in research and development activities with no resultant commercial products through June 30, 2024.

No amounts were recognized

as revenue related to the Serum Institute, Pharmsynthez or SynBio agreements during the three months ended March 31, 2024 and 2023, respectively.

as revenue related to the Serum Institute, Pharmsynthez or SynBio agreements during the three and six months ended June 30, 2024 and 2023,

respectively.

Accrued Expenses and Other Current Liabilities

On June 19, 2024, the Company entered into a confidential

separation agreement and general release with each of Jeffrey F.

Eisenberg, the Company’s former Chief Executive Officer (the “Eisenberg

Separation Agreement”), and Curtis Lockshin, the Company’s former Chief Scientific Officer (the “Lockshin Separation

Agreement” and together, the “Separation Agreements”) pursuant to which Messrs.

Eisenberg and Lockshin were each eligible

for certain severance payments and benefits consistent with the terms of their existing employment agreements as described under “Employment

Agreements with our Named Executive Officers” in the Amendment No.

1 to Annual Report on Form 10-K/A filed by the Company with the

Securities and Exchange Commission on April 26, 2024.

In addition, the Eisenberg Separation Agreement provides for accelerated vesting

of all of the unvested stock options held by Mr.

Eisenberg as of May 16, 2024.

As of June 30, 2024, the Company expensed approximately

$ 0.8 million of accrued payroll and benefits related to the Separation Agreements.

In addition, the Company recorded approximately $ 13,000

of share-based expense for the accelerated vesting of unvested stock options.

As of June 30, 2024, approximately $ 0.8 million was accrued

within accrued expenses and other current liabilities related to these obligations.

Fair Value Measurements

5 unchanged sentences

level of input that is available and significant to the fair value measurement.

Level 1 inputs are quoted prices in active markets for

identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 utilizes quoted market

prices in markets that are not active, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency.

Level 3 inputs are unobservable inputs for the asset or liability in which there is little, if any, market activity for the asset or liability

at the measurement date.

As of March 31, 2024 and December 31, 2023, 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, 2024 and 2023.

Level 1 inputs are unadjusted quoted prices in active

markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 utilizes

quoted market prices in markets that are not active, broker or dealer quotations, or alternative pricing sources with reasonable levels

of price transparency.

Level 3 inputs are unobservable inputs for the asset or liability in which there is little, if any, market activity

for the asset or liability at the measurement date.

As of June 30, 2024 and December 31, 2023, 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, 2024 and 2023.

Stockholders’ Equity

12 unchanged sentences

has warrants to purchase approximately 462,963 shares of the Company’s common stock (the “Series A Warrants”) outstanding

as of both March 31, 2024 and December 31, 2023.

as of both June 30, 2024 and December 31, 2023.

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 months ended March 31, 2024 and

In addition, the Company has publicly traded warrants

to purchase approximately 2,100 shares of common stock outstanding as of both March 31, 2024 and December 31, 2023.

These warrants have

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

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

The warrants also provide that if the weighted-average price of common stock on any trading day on or after 30 days after issuance is

lower than the then-applicable exercise price per share, each warrant may be exercised, at the option of the holder, on a cashless basis

for one share of common stock.

None of these warrants were exercised or forfeited during the three months ended March 31, 2024 and 2023.

The Company also has warrants to purchase approximately

800 shares of the Company’s common stock outstanding as of both March 31, 2024 and

December 31, 2023.

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

2024 and 2023.

In addition, the Company had publicly traded

warrants to purchase approximately 2,100

shares of common stock outstanding as of both June 30, 2024 and December 31, 2023.

These warrants had an exercise price of $ 130.00

per share of common stock and expired on July

The warrants ceased trading on Nasdaq under the symbol “XBIOW” upon expiration.

The warrants also provided that

if the weighted-average price of common stock on any trading day on or after 30 days after issuance is lower than the

then-applicable exercise price per share, each warrant may be exercised, at the option of the holder, on a cashless basis for one

share of common stock.

of these warrants were exercised or forfeited during the three and six months ended June 30, 2024 and 2023.

The Company also has warrants to purchase approximately 800 shares

of the Company’s common stock outstanding as of both June 30, 2024 and December 31,

These warrants have an exercise price of $ 29.09 per share of common stock and expire on July 3, 2026 .

None of these

warrants were exercised or forfeited during the three months ended March 31, 2024 and 2023.

None of these warrants were

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

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, 2024 and

Share-based expense is classified in the condensed

consolidated statements of operations as follows:

and RSU’s was approximately $42,000 and $0.1 million for the three months ended June 30, 2024 and 2023, respectively, and approximately

$0.1 million and $0.1 million for each of the six months ended June 30, 2024 and 2023.

Share-based 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

General and administrative expenses

Employee Stock Options

No stock option awards to purchase shares of common

stock were granted during the three months ended March 31, 2024 and 2023.

The Company recognized a total of approximately $ 0.1 million of share-based expense related to employee stock options during each of the three months ended March 31, 2024 and 2023.

No employee stock

options or RSUs were exercised and none expired during the three months ended March 31, 2024 and 2023.

Employee Stock Options and RSU’s

During the three and six months ended June 30,

2024, 20,000 stock options to purchase shares of common stock were granted by the Company.

No stock option awards to purchase shares of

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

No RSUs were granted during each of the three and six months

ended June 30, 2024 and 2023.

The Company recognized a total of approximately $ 42,000 and $ 0.1 million of share-based expense related

to employee stock options during the three months ended June 30, 2024 and 2023, respectively, and $ 0.1 million during each of the six

months ended June 30, 2024 and 2023, respectively.

The Company issued 417 shares of common stock during the three and six months ended

June 30, 2024 related to RSU’s.

No employee stock options were exercised during the three and six months ended June 30, 2024 and

During the three and six months ended June 30, 2024 stock options to purchase 11,667 shares of common stock were forfeited.

stock options expired during the three and six months ended June 30, 2023.

Non-Employee Stock Options

There were no non-employee stock options granted

or exercised during the three months ended March 31, 2024 and 2023.

No non-employee stock option grants expired during the three months

ended March 31, 2024.

During the three months ended March 31, 2023, non-employee stock option grants to purchase approximately 100 shares

of common stock expired.

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

months ended March 31, 2024 and 2023.

During the three months ended March 31, 2024 and

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

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

No non-employee stock option grants expired during

the three and six months ended June 30, 2024.

During the six months ended June 30, 2023, non-employee stock option grants to purchase

approximately 100 shares of common stock expired.

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

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

During the three and six months ended June 30,

2024 and 2023, 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 $ 40.1 million and $ 39.7 million as of March 31, 2024 and December 31, 2023, respectively.

As of March 31, 2024 and December 31, 2023,

was approximately $ 40.4 million and $ 39.7 million as of June 30, 2024 and December 31, 2023, respectively.

As of June 30, 2024 and December 31, 2023,

the Company did no t record any unrecognized tax positions.

8 unchanged sentences

Co-Development Agreement with Pharmsynthez.

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

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

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, no amounts

were outstanding as of March 31, 2024 and December 31, 2023.

The Company did no t recognize any interest income related to the Pharmsynthez

Loan during the three months ended March 31, 2024 and 2023.

Subsequent Events

The Company performed a review of events subsequent

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.

Pharmsynthez paid

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

result, no amounts

were outstanding as of June 30, 2024 and December 31, 2023.

The Company did not recognize any interest income related to the

Pharmsynthez Loan during the three and six months ended June 30, 2024.

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.

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