美國
證券交易委員會 及交易所
華盛頓特區，20549
表格
(標記 一)
| 根據1934年證券交易所法案第13或第15(d)條的季度報告 | |
| 截至本季度結束的季度 | |
| 或 | |
| 根據1934年證券交易所法案第13或第15(d)條的過渡報告 |
從______________到______________的過渡期。
佣金
文件编号：
(根據公司章程所述的註冊人的正確名稱)
| (成立或其他 的司法管轄區 或組織) | (I.R.S. 雇主 識別號碼) |
(主要執行辦公室地址) (郵政編碼)
（申報人的電話號碼，包括區號）
根據法案第12（b）條規定註冊的證券：
| 每個類別的標題 | 交易 標的 | 在哪個交易所上市的名字 | ||
請打勾表示，登記人（1）在過去12個月（或登記人需提交此類報告的更短期間）已提交1934年證券交易法第13或15(d)條所要求提交的所有報告，及（2）在過去90天內已受到該等報告要求的實行。
請用勾選標記來指示登記人是否在過去12個月內（或者在登記人被要求提交此類檔案的較短期間內）根據規則405提交了每個互動數據檔案，該規則屬於S-t法規（本章節第232.405條）。
請勾選註冊者是否為大型加速報告人、加速報告人、非加速報告人、小型報告公司或新興成長公司。請參閱《交易所法》第120億2條中對「大型加速報告人」、「加速報告人」、「小型報告公司」和「新興成長公司」的定義。
| 大型加速提交人 ☐ | 加速提交人 ☐ |
| 較小的報告公司 | |
| 新興成長
公司 |
如為新興成長公司，則應打勾以表示證券登記人選擇不使用按照《交易所法》第13(a)條所提供的遵守任何新的或修訂的財務會計準則的延伸過渡期。
請以勾選標記指示登記人是否為空殼公司（根據交易所法第120億2條的定義）。 是 ☐
截至2024年11月11日，登記人的普通股股份數為.
色素細胞療法公司
季度 報告表格10-Q
截至此季結束
| 頁 數字 | |
| 第一部分：財務資訊 | |
| 第一項。基本報表（未經審計） | 1 |
| 簡明合併資產負債表 | 1 |
| 簡明 合併綜合損益表 | 2 |
| 簡明 合併股東赤字變動報表 | 3 |
| 壓縮綜合現金流量表 | 4 |
| 基本報表附註 | 5 |
| 項目 2. 管理層對財務狀況和營運結果的討論和分析 | 24 |
| 項目 3. 有關市場風險的定量和定性披露 | 35 |
| 項目 4. 控制項和程序 | 35 |
| 部分 II. 其他信息 | |
| 項目 1. 法律訴訟 | 36 |
| 項目 1A. 風險因素 | 36 |
| 項目 2. 未註冊的股權證券銷售和使用所得 | 36 |
| 項目 3. 高級證券違約 | 37 |
| 項目 4. 礦安披露 | 37 |
| 項目 5. 其他資訊 | 37 |
| 項目 6. 附件 | 38 |
| 簽名 | 39 |
第一部分：財務資訊
物品 1.財務報表
CHROMOCELL 治療公司
簡明合併資產負債表
九月三十日， （未經審計） | 十二月三十一日， 2023 | |||||||
| 資產 | ||||||||
| 流動資產 | ||||||||
| 現金 | $ | $ | ||||||
| 預付款項 | ||||||||
| 待收款項來自Chromocell Corporation | ||||||||
| 待發行成本 | ||||||||
| 總流動資產 | ||||||||
| 總資產 | $ | $ | ||||||
| 負債及股東權益不足 | ||||||||
| 流動負債 | ||||||||
| 應付帳款和應計費用 | $ | $ | ||||||
| 應付補償 | ||||||||
| 橋接貸款，減去債務折扣 | ||||||||
| 應付貸款，扣除債務折扣 | ||||||||
| 應付貸款-關聯方，扣除債務折扣 | ||||||||
| 應付Chromocell公司 | ||||||||
| 流動負債總額 | ||||||||
| 负债合计 | ||||||||
| 承諾事項與可能負擔之事項 | ||||||||
| 股東資本赤字 | ||||||||
| Common stock, $票面價值，已授權的股份數，以及股份已發行並持有至2024年9月30日及2023年12月31日 | ||||||||
| shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively面值，授權股份數量，和截至2024年9月30日和2023年12月31日，分别發行和流通股份。 | ||||||||
| 0.01面額，授權股份，及截至2024年9月30日和2023年12月31日，分别發行和流通股份。 | ||||||||
| 額外資本贈与金 | ||||||||
| 累積虧損 | ( | ) | ( | ) | ||||
| 股東總赤字 | ( | ) | ( | ) | ||||
| 負債總額及股東資本赤字 | $ | $ | ||||||
隨附註釋為這些未經審計的縮短綜合財務報表的一個重要組成部分。
備註： 分享和每股金額已經進行了反向股票拆分，以反映2024年2月討論的9比1的影響，如註釋6所述。
1
色素細胞療法公司
綜合損益表
截至2024年和2023年9月30日的三個和九個月
（未經審計）
| 三個月結束 九月30日, | 九個月截至 九月30日, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| 營業費用 | ||||||||||||||||
| 一般及管理費用 | $ | $ | $ | $ | ||||||||||||
| 研究與開發 | ||||||||||||||||
| 專業費用 | ||||||||||||||||
| 營業費用總額 | ||||||||||||||||
| 來自業務淨損失 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 其他（費用）收益 | ||||||||||||||||
| 利息費用 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 其他收入 | ||||||||||||||||
| 違約判決的收益 | ||||||||||||||||
| 所有其他（支出）收入的總額 | ( | ) | ( | ) | ( | ) | ||||||||||
| 營業稅前淨虧損 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 所得稅準備 | ||||||||||||||||
| 淨虧損 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| 普通股每股淨虧損 - 基本和稀釋 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| 基本和稀釋期間內普通股權重平均數量 | ||||||||||||||||
隨附註釋為這些未經審計的縮短綜合財務報表的一個重要組成部分。
注意： 分享及每股金額已經追溯調整，以反映2024年2月進行的9對1反向股票分割的影響，詳情見第6條注釋。
2
色素細胞療法公司
濃縮版 股東權益變動的合併報表
截至2024年和2023年9月30日的三個和九個月
（未經審計）
| 首選
A 股份 | 優先股 A 份額 等價 | 優先股 C 份額 | 優先股 C 股 等價 | Common 股份 | Par | 額外 實收資本 資本 | 累積 虧損 | 總計 股東 赤字 | ||||||||||||||||||||||||||||
| 2022年12月31日的結存 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| 基於股票的薪酬 | — | — | — | |||||||||||||||||||||||||||||||||
| 淨虧損 | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| 2023年3月31日結餘 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| 股票期權補償 | — | — | — | |||||||||||||||||||||||||||||||||
| 發行普通股票以換取橋貸款延長 | — | — | ||||||||||||||||||||||||||||||||||
| 股份被沒收 | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| 淨虧損 | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| 2023年6月30日結餘 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| 股票期權補償 | — | — | — | |||||||||||||||||||||||||||||||||
| 發行普通股票以換取橋貸款延長 | — | — | ||||||||||||||||||||||||||||||||||
| 淨虧損 | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| 2023年9月30日結餘 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
色素細胞療法公司
簡明的 合併股東權益變動表
截至2024年和2023年9月30日的三個和九個月
（未經審計）
| 優先股
A 股份 | 優先股 A 股 等價 | 優先股 C 股 | 優先股 C股 等價 | Common 股份 | Par | 額外 實收資本 資本 | 累積 虧損 | 總計 股東 赤字 | ||||||||||||||||||||||||||||
| 2023年12月31日結餘 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| 基於股票的薪酬 | — | — | — | |||||||||||||||||||||||||||||||||
| 因延長橋樑貸款而發行的普通股發行成本 | — | — | ||||||||||||||||||||||||||||||||||
| 優先股換股 | ( | ) | ( | ) | — | |||||||||||||||||||||||||||||||
| 以現金發行普通股 | — | — | ||||||||||||||||||||||||||||||||||
| 備用協議 | — | — | ( | ) | ||||||||||||||||||||||||||||||||
| 普通股的撤銷 | — | — | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| 將負債轉移至 Chromocell corp. 以換取C類優先股 | — | — | ||||||||||||||||||||||||||||||||||
| 普通股通過 債券轉換發行 | — | — | ||||||||||||||||||||||||||||||||||
| 淨虧損 | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| 2024年3月31日結餘 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| 股票期權補償 | — | — | — | |||||||||||||||||||||||||||||||||
| 限制性股單位費用 | — | — | — | |||||||||||||||||||||||||||||||||
| 股份發行用於服務 | — | — | ||||||||||||||||||||||||||||||||||
| 淨虧損 | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| 2024年6月30日結餘 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| 股票期權補償 | — | — | — | |||||||||||||||||||||||||||||||||
| 限制性股單位費用 | — | — | ||||||||||||||||||||||||||||||||||
| 股份發行用於服務 | — | — | ||||||||||||||||||||||||||||||||||
| 為應付賬款發行的股份 | — | — | ||||||||||||||||||||||||||||||||||
| 股份回購 | — | — | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| 淨虧損 | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| 2024年9月30日結餘 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
隨附註釋為這些未經審計的縮短綜合財務報表的一個重要組成部分。
備註： 分享和每股金額已經進行了反向股票拆分，以反映2024年2月討論的9比1的影響，如註釋6所述。
3
CHROMOCELL THERAPEUTICS CORPORATION
綜合現金流量表
截至2024年和2023年9月30日止九個月
（未經審計）
| 九個月截至9月30日 | ||||||||
| 2024 | 2023 | |||||||
| 現金 來自營運活動的資金流量： | ||||||||
| 淨虧損 | $ | ( |
) | $ | ( |
) | ||
| 調整 將淨虧損調和為經營活動中使用的淨現金 | ||||||||
| 債務折價攤提 | ||||||||
| 發行 延期橋樑貸款所產生的股份發行成本 | ||||||||
| 股票相關的補償 | |
|||||||
| 違約判決 的收益 | ( |
) | ||||||
| 營運資產和負債的變動： | ||||||||
| 應付賬款和應計費用 | |
|||||||
| 應計 薪酬 | ( |
) | ||||||
| 應收 自Chromocell Corporation | ( |
) | ||||||
| 預付費用 | ( |
) | ||||||
| 遞延 發行成本 | ( |
) | ||||||
| 淨 經營活動所用現金 | ( |
) | ( |
) | ||||
| 融資活動 現金流量: | ||||||||
| 淨額 來自應付貸款的收益，扣除債務折扣 | ||||||||
| 淨額 來自應付貸款 - 關聯方收益，扣除債務折扣 | ||||||||
| 淨額 橋接貸款的支付，扣除債務折扣 | ( |
) | ||||||
| 以現金發行普通股 | ||||||||
| 普通股的撤回 | ( |
) | ||||||
| 淨額 融資活動所提供的現金 | ||||||||
| 現金的 淨增加 | ( |
) | ||||||
| 現金 於期初 | ||||||||
| 現金 於期間結束時 | $ | $ | ||||||
| 補充 現金流量信息： | ||||||||
| 所支付的現金 用於所得稅 | $ | $ | ||||||
| 現金 支付利息支出 | $ | $ | ||||||
| 非現金 投資和融資活動： | ||||||||
| 股份 沒收 | $ | $ | ||||||
| 債務 從發行的普通股中為橋接貸款延期提供的折扣 | $ | $ | ||||||
| 票據 轉換 | $ | $ | ||||||
| 將負債轉移至Chromocell corp以獲取優先股 | $ | $ | ||||||
| 應付賬戶及應計費用轉換為票據 | $ | $ | ||||||
| 應付賬戶及應計費用轉換為票據 - 相關方 | $ | $ | ||||||
| 發行股份以支付應付賬戶 | $ | $ | ||||||
隨附註釋為這些未經審計的縮短綜合財務報表的一個重要組成部分。
備註： 分享和每股金額已經進行了反向股票拆分，以反映2024年2月討論的9比1的影響，如註釋6所述。
4
色素細胞療法公司
註釋 簡明合併基本報表附註
（未經審計）
注意 1 – 業務範疇及業務性質
公司 背景
Chromocell生物科技公司（以下簡稱“Chromocell”或“公司”）於2021年3月19日在特拉華州成立。2022年8月10日，該公司與特拉華州的Chromocell Corporation（以下簡稱“Chromocell Holdings”）簽訂了某特定的貢獻協議（以下簡稱“貢獻協議”），根據該協議，自2022年7月12日（以下簡稱“貢獻日期”）生效，Chromocell Holdings將與其歷史治療業務相關的所有資產和負債，包括所有專利、臨床前和I期研究結果與數據，以及與CC8464化合物有關的商業秘密，一併貢獻給公司。（參見註4）
該公司是一家臨床研究階段的生物技術公司，專注於開發和商業化新的治療藥物來緩解疼痛。該公司的臨床重點是選擇性地針對稱為“NaV1.7”的鈉離子通道，該通道已被基因驗證為人體生理學中的疼痛受體。NaV1.7阻斷劑是一種化學實體，以一種方式調節鈉通道的結構，從而防止疼痛知覺傳遞到中樞神經系統（“CNS”）。該公司的目標是開發一類新穎的和獨有的NaV阻斷劑，以針對身體的周邊神經系統。
公司正式推出三個開發疼痛治療藥物的計劃，這三個計劃都基於同一專利分子，具體如下:
神經病 疼痛: CC8464正被開發用以解決某些類型的神經性疼痛。CC8464的化學特性限制了其進入中樞神經系統的能力，並將其作用限制在外周神經系統的NaV1.7通道中，這些神經位於大腦和脊髓之外。激活中樞神經系統中的其他通道可能會導致副作用，包括成癮和其他中樞介導的不良影響。由於CC8464的設計是不穿透中樞神經系統，因此幾乎不會產生中樞介導的副作用，包括欣快感或成癮。根據其特性、預臨床研究（如下所述）以及公司迄今已完成的第一期研究，公司相信，若CC8464獲得批准，將可能成為治療紅斑性皮膚病（“EM”）和特發性小纖維神經病（“iSFN”）中度至重度疼痛的有吸引力的選擇，對患者和醫生均是如此。
眼睛 疼痛基於CC8464新配方的概念板塊，主題為CT2000的公司眼睛疼痛計劃，是為可能治療急性和慢性眼睛疼痛。NaV1.7通道存在於角膜上，使其成為治療眼睛疼痛的可行生物學靶點。眼睛疼痛可能出現在各種情況下，包括嚴重乾眼症、創傷和手術。眼睛疼痛的現有療法（例如類固醇、局部非類固醇抗炎藥、潤滑劑、局部麻醉劑）在其有效性和/或處方期限上存在限制，因為安全問題。公司打算探索將CT2000開發為緩解眼睛疼痛的局部劑的可行性。這種方法的潛在優勢在於，CT2000的局部給藥不太可能引起任何過敏反應或皮膚反應，就像使用CC8464進行系統性給藥時所觀察到的情況一樣，因為透過局部給藥的系統吸收會非常有限。該公司已經開始研發CT2000的局部眼科配方，將首先對眼科毒理學進行評估，然後進行面向概念的（POC）試驗。該公司預計這種眼科配方的CT2000的試驗將於2025年開始。
儲備 項目: 基於幾種新的CC8464配方，公司剛推出的項目，名爲CT3000，旨在潛在治療術後疼痛，使用神經阻滯。示例包括膝關節手術或肩部手術。現有的神經阻滯療法會導致神經肌肉阻滯，從而在手術後prevent movement。醫生通常希望患者在手術後儘早活動，以避免血栓等併發症。用於神經阻滯的NaV1.7抑制劑可能提供良好的鎮痛效果，但不會導致神經肌肉阻滯以防止運動，這與其他局部麻醉劑不同。公司打算探索開發CT3000作爲一種可注射的儲備藥物，以減輕手術後的神經阻滯和疼痛。公司已開始開發一種神經阻滯的可注射儲備藥物，最初將在術後疼痛的動物模型中進行研究，然後進行毒理學研究，再在患者中進行POC試驗。公司目前正在進行動物的藥代動力學和療效試驗，並預計CT3000的儲備註射配方的人體試驗將在2026年初開始。
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公司可能會在未來通過其他內部或外部化合物進一步擴展其項目管道，但所有其他內部發現的化合物目前均處於臨床前階段，至今尚未啓動任何有關許可的商業討論，除非在本季度報告中披露了與Benuvia Operations LLC（「Benuvia」）於2023年12月23日達成的某些噴霧配方的許可相關的事項。
公司經營歷史有限，尚未從其預期的業務中產生收入。公司的業務和運營對美國和全球的一般商業和經濟情況以及地方、州和聯邦政府的政策決策非常敏感。一系列超出公司控制範圍的因素可能導致這些情況的波動。不利的條件可能包括生物技術監管環境的變化、技術進步使公司的技術過時、臨床試驗資源的可用性、技術在醫學界的接受程度以及來自資金更雄厚、更大型公司的競爭。
在
2024年2月21日，公司完成了首次公開募股（「IPO」），併發行了 股
其普通股，價格爲$每股。IPO的總淨收益大約爲$
風險和不確定因素
2022年2月，俄羅斯聯邦和白俄羅斯對烏克蘭採取了軍事行動。由於這一行動，包括美國在內的多個國家已對俄羅斯聯邦和白俄羅斯實施了經濟制裁。
2023年10月以色列與哈馬斯衝突的升級也可能會導致全球經濟情況的干擾，並影響中東地區的穩定。目前尚不清楚這些干擾將持續多長時間，以及這些干擾是否會變得更加嚴重。
截至本財務報表日期，這些衝突對世界經濟的影響尚無法確定，且對公司的財務狀況、經營成果和現金流的具體影響在財務報表日期時也無法確定。
注意 2 – 經營情況
截止到2024年9月30日的九個月期間，公司淨虧損約爲$百萬。截止到2024年9月30日，
公司現金約爲$
這個 本報告所列財務報表不包括任何調整以反映未來可能對可收回性的影響 以及本文討論的事項可能產生的資產分類或負債的數額和分類. 儘管公司相信公司創造足夠收入、控制成本的戰略是可行的 在必要時籌集額外資金，這方面無法保證。公司繼續保持下去的能力 持續經營取決於實施商業計劃、產生足夠收入、籌集資金的能力，以及 控制運營開支。
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流動性和資本資源
2024年9月30日，公司現金約爲$
基於
公司目前的預測，管理層相信其能夠繼續經營作爲一個持續經營單位，並在發行這些基本報表後的至少十二個月內爲其運營提供資金，存在重大疑慮。
儘管公司將繼續投資於其業務及CC8464、CT2000和CT3000的開發，以及可能的其他分子，但公司在未來十二個月內產生產品或授權營業收入的可能性不大。在此期間，公司完成了首次公開募股，籌集了$
如果資金不足且支出超過公司的當前預期，公司可能需要削減其運營或其他業務活動，或者通過與戰略合作伙伴或其他人安排籌集資金，這可能要求公司放棄對某些技術或潛在市場的權利。
備註3 -重要會計政策摘要
表述基礎
附帶的未經審計的簡明合併財務報表是根據美國通用會計原則（「U.S. GAAP」）爲中期財務信息編制的，並遵循證券交易委員會（「SEC」）的規則和規定。根據公司管理層的意見，附帶的簡明合併財務報表反映了所有必要的調整，包括正常的、經常性調整，以公允地展示截至2024年和2023年9月30日的中期業績。儘管管理層相信這些未經審計的簡明合併財務報表中的披露足以使所呈現的信息不具誤導性，但根據SEC的規則和規定，某些通常包含在按U.S. GAAP編制的簡明合併財務報表中的信息和腳註披露已被省略。
附帶的未經審計的簡明合併財務報表應與公司年度報告中包含的財務報表及相關注釋一起閱讀，該年度報告爲截至2023年12月31日的10-k表格，已於2024年4月16日提交給SEC。2024年9月30日結束的三個月和九個月的中期業績並不一定表明2024年12月31日年度業績或任何未來中期業績的預期結果。
新興增長企業
這個 根據經修訂的1933年《證券法》第2（a）條的定義，公司是 「新興成長型公司」（ 《證券法》），經修訂的2012年《Jumpstart我們的商業創業法》（「JOBS法」）修改， 而且它可以利用適用於其他上市公司的各種報告要求的某些豁免 不是新興成長型公司，包括但不限於不被要求遵守獨立註冊公司的規定 《薩班斯-奧克斯利法案》第404條對公共會計師事務所的認證要求，減少了以下方面的披露義務 定期報告和委託書中的高管薪酬，以及對持有不具約束力的要求的豁免 就高管薪酬進行諮詢投票，股東批准任何先前未批准的解僱協議款項。
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此外，JOBS法第102(b)(1)節免除新興成長公司在私人公司（即那些尚未宣告有效的證券法註冊聲明或未在《交易法》下注冊證券的公司）被要求遵守新或修訂的財務會計準則之前，必須遵守新或修訂的財務會計準則。JOBS法規定，公司可以選擇不遵循延長期限並遵守適用於非新興成長公司的要求，但任何選擇不遵循的決定都是不可撤回的。公司選擇不退出此延長期限，這意味着當某一標準被髮布或修訂並且它對公共公司或私人公司的適用日期不同的時候，作爲一家公司，新興成長公司可以在私人公司採用新或修訂的標準時採用新的或修訂的標準。這可能使得將本公司的財務報表與另一個既不是新興成長公司也不使用延長期限的新興成長公司進行比較變得困難或不可能，因爲所使用的會計準則可能存在潛在差異。
合併財務報表是按照美國公認會計原則（「U.S. GAAP」）編制的，包括公司和其全資子公司，Enzo Life Sciences（及其全資外國子公司）、Enzo Therapeutics、Enzo Realty、Enzo Realty II 和 Enzo Clinical Labs（具有終止運營實體的公司）。所有公司內部交易和餘額均已消除。
合併財務報表包括Chromocell Therapeutics Corporation及其全資子公司Chromocell Therapeutics Australia Pty. Ltd. 所有顯著的公司間餘額和交易均已被消除。
使用估計值
根據美國通用會計準則（U.S. GAAP）編制的簡化合並財務報表需要管理層做出估計和假設，這些估計和假設影響報告的資產和負債的金額以及在簡化合並財務報表日期的或有資產和負債的披露，以及報告期間的收入和費用的報告金額。實際結果可能與這些估計有所不同。管理層所做的重大估計包括但不限於預計遞延所得稅的評估。
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of September 30, 2024 and December 31, 2023, the Company did not have any cash equivalents.
As of September 30, 2024, the Company had deposits in excess of federally insured limits.
Research and Development
The Company incurs research and development (“R&D”) costs during the process of researching and developing technologies and future offerings. The Company expenses these costs as incurred unless such costs qualify for capitalization under applicable guidance. The Company reviews acquired R&D and licenses to determine if they should be capitalized or expensed under U.S. GAAP standards.
Below is a disaggregation of R&D expenses:
For the Three Months Ended | For the Three Months Ended | For the Nine Months Ended | For the Nine Months Ended | |||||||||||||
| September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | |||||||||||||
| Consultant | $ | $ | $ | $ | ||||||||||||
| Lab Materials | ||||||||||||||||
| Lab Cell Storage | ||||||||||||||||
| Chemistry Manufacturing and Controls (“CMC”) | ||||||||||||||||
| IP Services | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
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Fair Value Measurements and Fair Value of Financial Instruments
The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:
| ● | Level 1 Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. |
| ● | Level 2 Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. |
| ● | Level 3 Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. |
The Company did not identify any assets or liabilities that are required to be presented on the balance sheets at fair value in accordance with ASC Topic 820.
Due to the short-term nature of all financial assets and liabilities, their carrying value approximates their fair value as of the balance sheet dates.
Stock-Based Compensation
The Company accounts for stock-based compensation costs under the provisions of ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense related to the fair value of stock-based compensation awards that are ultimately expected to vest. Stock-based compensation expense recognized includes the compensation cost for all stock-based payments granted to employees, officers, and directors based on the grant date fair value estimated in accordance with the provisions of ASC 718. ASC 718 is also applied to awards modified, repurchased, or cancelled during the periods reported. Stock-based compensation is recognized as expense over the employee’s requisite vesting period and over the nonemployee’s period of providing goods or services. Pursuant to ASC 718, the Company can elect to either recognize the expenses on a straight-line or graded basis and has elected to do so under the straight-line basis.
Basic loss per common share is computed by dividing the net loss by the weighted average number of shares of Common Stock outstanding for each period. Diluted loss per share is computed by dividing the net loss by the weighted average number of shares of Common Stock outstanding plus the dilutive effect of shares issuable through the common stock equivalents. The weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. As of September 30, 2024, stock options, warrants, and 2 unvested restricted stock units (“RSUs”) were excluded from dilutive earnings per share as their effects were anti-dilutive. As of September 30, 2023, stock options were excluded from dilutive earnings per share as their effects were anti-dilutive.
Income Taxes
The Company accounts for income taxes pursuant to the provision of ASC 740 “Accounting for Income Taxes,” (“ASC 740”) which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.
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The Company follows the provision of the ASC 740 related to Accounting for Uncertain Income Tax Position. When tax returns are filed, it is more likely than not that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is most likely that not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions.
Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions will more likely than not be upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.
The federal and state income tax returns of the Company are subject to examination by the Internal Revenue Service and state taxing authorities, generally for three years after they were filed. The Company has filed its tax returns for the year ended December 31, 2023 and after review of the prior year financial statements and the results of operations through December 31, 2023, the Company has recorded a full valuation allowance on its deferred tax asset.
Recently Issued Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. This ASU will be effective for the annual periods beginning after December 15, 2024. The Company is currently evaluating the timing and impacts of adoption of this ASU.
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The purpose of the amendment is to enable investors to better understand an entity’s overall performance and assess potential future cash flows. 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. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the timing and impacts of adoption of this ASU.
NOTE 4 – RELATED PARTY TRANSACTIONS
Employment Agreement
On
February 14, 2024,
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By Order dated October 3, 2024, the court in the New York Action awarded the Company a default judgment against Mr. Kopfli and Chromocell Holdings on all claims, and ordered an assessment of damages against Mr. Kopfli and Chromocell Holdings (to be held at a date to be determined). As of September 30, 2024, the Company has removed the accrual of $363,091 in compensation expenses and recorded a gain on default judgement in the same amount.
Camden Consulting LLC
The Company entered into a Consultant Agreement with Camden Capital LLC (“Camden”), dated January 10, 2023 (the “Consultant Agreement”). This Consultant Agreement replaced an agreement with Mr. Francis Knuettel II dated June 2, 2022 and pursuant to which, Camden agreed to provide the services of Mr. Knuettel, who was to serve as the Company’s Chief Financial and Strategy Officer, Treasurer and Secretary.
Under
the Consultant Agreement,
The Consultant Agreement contemplates an additional consulting fee, as determined by the Board. The potential additional consulting fee is 50% of the annualized consulting fee and will be based on achievement of performance goals and objectives established by the Board in concert with Mr. Knuettel in January of each year. The Board may increase the potential additional consulting fee in recognition of performance in excess of the performance objectives. Any amount shall only be paid if Camden continues to provide consulting services to the Company as of the date of payment, which will be no later than March 15 of the year following the year to which the additional consulting fee relates. Any additional consulting fee for 2022 is payable solely in the Board’s discretion.
Pursuant to the Consultant Agreement, in the event the relationship with Camden is involuntarily terminated by the Company other than for “Cause” or if Camden terminates the relationship for “Good Reason,” Camden is entitled to receive (i) six months of consulting fees at the same rate existing immediately prior to termination, (ii) a potential additional consulting fee, if performance goals and objectives have been established for the year and prorated for the period of service, and (iii) six months of additional vesting credit with respect to any outstanding time-based equity awards. “Cause” and “Good Reason” are each defined in the Consultant Agreement.
Finally, Camden and Mr. Knuettel agree to certain non-solicitation and non-competition provisions for a period of 12 months following termination of the relationship and to certain confidentiality obligations. Additional terms and conditions are set forth in the Consultant Agreement.
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On
June 23, 2023,
Effective July 19, 2023, the Board appointed Francis Knuettel II as Interim Chief Executive Officer and as of March 13, 2024, the Board appointed Francis Knuettel II as Chief Executive Officer of the Company. Mr. Knuettel will serve as the Company’s Chief Executive Officer until a successor is duly elected and qualified, unless sooner removed. In addition to his role as Chief Executive Officer of the Company, Mr. Knuettel will continue to serve in his capacity as Chief Financial Officer, Treasurer and Secretary of the Company.
Director Note
On
December 6, 2022,
April and September Bridge Financings
On April 17, 2023 and September 1, 2023, the Company entered into bridge notes, the investors in which were almost entirely existing investors. Related party investors in the April Bridge Financing include Chromocell Holdings, Boswell Prayer Ltd., Motif Pharmaceuticals Ltd, Aperture Healthcare Ventures Ltd., MDB Merchants Park LLC, Balmoral Financial Group LLC and AME Equities LLC (each a related party based on share ownership in excess of 5% or resulting from a principal at one of the entities being on the Board). All of these investors, except Chromocell Holdings, also participated in the September Bridge Financing. On February 21, 2024, the principal and accrued interest on these notes converted into 130,494 shares of the Company’s Common Stock.
Due from/to Chromocell Holdings
As
of September 30, 2024, the Company had a $
As
of December 31, 2023, the Company had a $
Side Letter to the Contribution Agreement and Issuance of Series C Convertible Redeemable Preferred Stock
On
August 2, 2023,
The Series C Preferred Stock has a liquidation preference of $1,000 per share. Holders of the Series C Preferred Stock are not entitled to dividends, have no voting rights other than as required by law, and the shares of Series C Preferred Stock are convertible into shares of Common Stock at a price of $7.50 per share of Common Stock. Following the IPO, at the Company’s option, the shares of Series C Preferred Stock are convertible into shares of Common Stock automatically if, the trading price of the Common Stock exceeds certain thresholds and are redeemable by the Company for cash.
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Related Party Note
On
May 10, 2024,
Outstanding Principal on Related Party Notes
| Note Payable – Related Party | Outstanding Principal | Unamortized Debt Discount | Outstanding Principal, net of Debt Discount | |||||||||
| Related Party Note | ||||||||||||
| Total | $ | $ | $ | |||||||||
NOTE 5 – NOTES PAYABLE
Investor Note
On
February 4, 2022, the Company entered into a note payable for $
On
February 27, 2023,
On
June 23, 2023, the Company entered into a side letter with the holder of the Investor Note pursuant to which the Company (i) amended
and restated the Investor Note to extend the maturity date to August 15, 2023 and
On
August 17, 2023, the Company entered into a second side letter with the holder of the Investor Note (the “August Investor
Note Side Letter” and, together with the June Investor Note Side Letter, the “Investor Note Side Letters”) pursuant
to which the Company (i) amended and restated the Investor Note to extend the maturity date to September 30, 2023 and (ii) in
consideration therefor, issued to such holder shares of Common Stock. On September 24, 2023, the Company entered
into an amendment to the Investor Note, which further extended the maturity date to October 10, 2023. The Investor Note provides
for the accrual of interest equal to 2% of the face amount of $
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Effective October 10, 2023, the Company entered into a side letter with the Holder of the Investor Note, which extended the maturity date of the Investor Note to November 14, 2023 and the Company issued to the Holder of the Investor Note shares of Common Stock.
Effective November 13, 2023, the Company entered into another side letter with the holder of the Investor Note pursuant to which the Company (i) amended and restated the Investor Note to extend the maturity date to January 31, 2024, and (ii) in consideration therefor, agreed to issue to such Holder of the Investor Note shares of Common Stock on each of November 29, 2023, December 29, 2023 and January 29, 2024, provided the Investor Note remained outstanding as of such date.
Effective January 30, 2024, the Company entered into another side letter with the holder of the Investor Note (the “January Investor Note Side Letter”) pursuant to which the Company (i) amended and restated the Investor Note to extend the maturity date to February 29, 2024, and (ii) in consideration therefor, agreed to issue to such Holder of the Investor Note shares of Common Stock on the earlier to occur of the IPO or February 29, 2024.
As
of September 30, 2024, the Investor Note and the accrued interest on the note has been fully paid off. As of December 31, 2023,
there was $
Director Note
On
December 6, 2022, the Company and Mr. Todd Davis, one of the Company’s directors, entered into a note payable agreement
(the “Director Note”) for $
On December 28, 2023, the Company entered into an amendment to the Director Note, which extended the maturity date to February 29, 2024. The Director Note was exchanged for 29,167 shares of Common Stock at the time of the Company’s IPO.
April Bridge Financing
On
April 17, 2023,
14
On October 12, 2023, the Company entered into a first amendment to the senior secured convertible notes in the April Bridge Financing, which extended the maturity of the notes to November 1, 2023. On October 24, 2023, the Company entered into a second amendment to the senior secured convertible notes in the April Bridge Financing, which extended the maturity of the notes to November 14, 2023. On November 13, 2023, the Company entered into a third amendment to the senior secured convertible notes in the April Bridge Financing, which further extended the maturity of the notes to February 29, 2024. These notes were exchanged for shares of Common Stock at the time of the Company’s IPO.
September Bridge Financing
On
September 1, 2023, the Company entered into a bridge loan for working capital purposes, with various accredited investors, certain
of which are pre-existing stockholders, in the aggregate principal amount of $
October Promissory Notes
On
October 12, 2023, the Company and four existing investors entered into promissory notes (the “October Promissory Notes”)
with an aggregate face amount of $
Bridge Financing Note Amendments and Recission Agreement
On February 8, 2024, the Company and certain affiliates of A.G.P./Alliance Global Partners (“A.G.P.”) entered into amendments to the senior secured convertible notes issued to such affiliates of the A.G.P. in the April Bridge Financing and September Bridge Financing to remove the automatic conversion features from such notes (the “Bridge Financing Note Amendments”). Under the Bridge Financing Note Amendments, both notes issued in the April Bridge Financing and the September Bridge Financing have a maturity date of March 1, 2024, and the full principal amount of both notes and any accrued interest thereon shall be payable solely in cash upon the consummation of the IPO. Both notes have an annual interest rate of 8%, which accrues daily, and is calculated on the basis of a 360-day year (consisting of twelve 30 calendar day periods), giving an effective interest rate of 8.3%.
On
February 10, 2024, the Company entered into a Stock Rescission Agreement with certain affiliates of A.G.P. (the “Stock Rescission
Agreement” and, together with the Bridge Financing Note Amendments, the “Representative Affiliate Transactions”),
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May Promissory Note
On
May 10, 2024, the Company entered into a promissory note with a professional advisor in the amount of $
Convertible Note
On
July 24, 2024, the Company entered into a securities purchase agreement with an accredited investor (the “July Note Holder”),
pursuant to which the Company issued to the July Note Holder a senior unsecured convertible note (the “July Note”)
in the aggregate principal amount of $
As
of September 30, 2024, there was $
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Outstanding Principal on Notes
| Note Payable | Outstanding Principal | Unamortized Debt Discount | Outstanding Principal, net of Debt Discount | |||||||||
| May Promissory Note | ||||||||||||
| Convertible Note | ( | ) | ||||||||||
| Total | $ | $ | ( | ) | $ | |||||||
NOTE 6 – STOCKHOLDERS’ EQUITY
Initial Public Offering
On
February 21, 2024, the Company completed its IPO and issued shares of Common Stock at a price of $ per
share. The aggregate net proceeds from the IPO were approximately $
Stock Split
On
February 15, 2024,
Share Forfeiture
Pursuant to the terms of the April Bridge Financing, Chromocell Holdings forfeited of the shares of Common Stock of the Company on April 17, 2023. All shareholders with ownership stakes greater than 5% of the Company agreed that the failure to invest its pro rata allocation in the April Bridge Financing would result in the forfeiture of a pro rata percentage of their shares. Chromocell Holdings did not invest its full pro rata allocation, leading to the forfeiture of a portion of their shares of Common Stock of the Company.
Standby Investor Side letter
On
October 11, 2023, the Company entered into a securities purchase agreement with an institutional investor (the “Standby
Investor”), pursuant to which (i) the Standby Investor agreed to purchase, upon close of the IPO and at the Company’s
election, an aggregate of up to shares of Series B Convertible Preferred Stock, par value of $ per share
(the “Series B Preferred Stock”) for a purchase price of $ per share, and
Effective November 13, 2023, the Company entered into a side letter with the Standby Investor (the “Standby Investor Side Letter”), pursuant to which it (i) waived in full the Standby Investor’s obligation to fund the aggregate amount to be paid for the Series B Preferred Stock to be purchased under the Series B Securities Purchase Agreement and (ii) agreed to continue to have the obligation to issue the full amount of the Standby Shares upon the closing of the IPO. The Company and the Standby Investor also agreed to terminate each of their obligations solely with respect to the Series B Preferred Stock under the Series B Securities Purchase Agreement and a certain Registration Rights Agreement between the Company and the Standby Investor, which was required to be delivered pursuant to the Series B Securities Purchase Agreement.
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Rights Offering
On
November 22, 2023,
Recission Agreement
On
February 10, 2024, the Company entered into a Stock Rescission Agreement with certain affiliates of A.G.P. pursuant to which the
Company rescinded shares of Common Stock held by such affiliates of A.G.P. and agreed to refund an aggregate
of $
Equity Issuances
On June 12, 2024, the Company agreed to issue up to shares of Common Stock to a vendor in considerations for the services provided by the vendor to the Company.
On June 12, 2024, the Company entered into a twelve-month agreement with a vendor to issue up to share of Common Stock per month for services performed by such vendor. As of September 30, 2024, the Company has issued shares of Common Stock pursuant to this agreement.
On August 12, 2024, the Company agreed to issue shares of Common Stock to a vendor in exchange for outstanding invoices related to services provided by the vendor to the Company, with such shares granted on October 22, 2024, as set forth below in the Subsequent Events section.
During the nine months ended September 30, 2024, the Company agreed to issue shares of Common Stock, at a grant price of $ per share, to a vendor in considerations for the services provided by the vendor to the Company, with such shares granted on October 22, 2024, as set forth below in the Subsequent Events section.
Committed Equity Financing
On July 26, 2024, the Company entered into a Common Stock Purchase Agreement, dated as of July 26, 2024 (the “CEF Purchase Agreement”), with Tikkun Capital LLC (“Tikkun”), providing for a committed equity financing facility, pursuant to which, upon the terms and subject to the satisfaction of the conditions contained in the CEF Purchase Agreement, Tikkun has committed to purchase, at the Company’s direction in its sole discretion, up to an aggregate of $ (the “Total Commitment”) of the shares of Common Stock (the “Purchase Shares”), subject to certain limitations set forth in the CEF Purchase Agreement, from time to time during the term of the CEF Purchase Agreement. Concurrently with the execution of the CEF Purchase Agreement, the Company and Tikkun also entered into a Registration Rights Agreement, dated as of July 26, 2024, pursuant to which the Company agreed to file with the SEC one or more registration statements, to register under the Securities Act, the offer and resale by Tikkun of all of the Purchase Shares that may be issued and sold by the Company to Tikkun from time to time under the CEF Purchase Agreement.
Stock Repurchase Plan
On
August 5, 2024, the Board authorized a stock repurchase plan (the “Repurchase Plan”) pursuant to which up to $
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Options
During the nine months ended September 30, 2024, the Company granted a total of stock options related to the Company’s common stock. These stock options had a life of years and an exercise price of $ per option. During the nine months ended September 30, 2023, the Company granted a total of stock options. These stock options had a life of years and an exercise price of $ per option.
During the nine months ended September 30, 2024 and 2023, the fair value of each stock option granted was estimated using the Black-Scholes Option Pricing Model using the following inputs:
For the Nine Months Ended September 30, 2024 | For the Nine Months Ended September 30, 2023 | |||||||
| Exercise price | $ | $ | ||||||
| Expected dividend yield | % | % | ||||||
| Risk free interest rate | % | - | % | |||||
| Expected life in years | ||||||||
| Expected volatility | % | - | % | |||||
The risk-free interest rate assumption for options granted is based upon observed interest rates on the United States Government Bond Equivalent Yield appropriate for the expected term of the options.
With
certain adjustments outlined below, the Company based its determination of the underlying fair value of the Company’s Common
Stock on the findings of an independent third party engaged by the Company to determine the fair value of the Company’s
intellectual property. The Company had the analysis conducted in conjunction with the Contribution Agreement, which was executed
on August 10, 2022. The analysis determined that the fair value of the Company’s intellectual property was $
| Value of intellectual property | $ | |||
| Common shares outstanding (as converted) | ||||
| Value per common share | $ | |||
| Illiquidity discount | % | |||
| Minority discount | % | |||
| Fair value of the common stock | $ |
After the completion of the Company’s IPO, the trading price of the Company’s Common Stock is used as the fair value of the Company’s Common Stock.
The Company determined the expected volatility assumption for options granted using the historical volatility of comparable public companies’ common stock. The Company will continue to monitor peer companies and other relevant factors used to measure expected volatility for future option grants, until such time that the Company’s Common Stock has enough market history to use historical volatility.
The dividend yield assumption for options granted is based on the Company’s history and expectation of dividend payouts. The Company has never declared nor paid any cash dividends on its Common Stock, and the Company does not anticipate paying any cash dividends in the foreseeable future.
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The Company recognizes option forfeitures as they occur as there is insufficient historical data to accurately determine future forfeiture rates.
| Weighted Average | Weighted Average | |||||||||||
| Number of Shares | Exercise Price | Remaining Life | ||||||||||
| Stock Options | ||||||||||||
| Outstanding December 31, 2023 | $ | |||||||||||
| Granted | $ | |||||||||||
| Expired | ( | ) | $ | ( | ) | — | ||||||
| Exercised | $ | — | ||||||||||
| Outstanding September 30, 2024 | $ | |||||||||||
| Exercisable September 30, 2024 | $ | |||||||||||
| Weighted Average | Weighted Average | |||||||||||
| Number of Shares | Exercise Price | Remaining Life | ||||||||||
| Stock Options | ||||||||||||
| Outstanding December 31, 2022 | $ | |||||||||||
| Granted | $ | |||||||||||
| Expired | ( | ) | $ | — | ||||||||
| Exercised | $ | — | ||||||||||
| Outstanding September 30, 2023 | $ | |||||||||||
| Exercisable September 30, 2023 | $ | |||||||||||
| Non-vested Options | Options | Weighted- Average Exercise Price | ||||||
| Non-vested at December 31, 2023 | $ | |||||||
| Granted | $ | |||||||
| Vested | ( | ) | $ | |||||
| Forfeited | $ | |||||||
| Non-vested at September 30, 2024 | $ | |||||||
| Non-vested Options | Options | Weighted- Average Exercise Price | ||||||
| Non-vested at December 31, 2022 | $ | |||||||
| Granted | $ | |||||||
| Vested | ( | ) | $ | |||||
| Forfeited | $ | |||||||
| Non-vested at September 30, 2023 | $ | |||||||
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The total number of options granted during the nine months ended September 30, 2024 and 2023 was and , respectively. The exercise price for these options was $ or $ per share. There was an intrinsic value of $ and $ as of September 30, 2024 and 2023, respectively.
The
Company recognized stock-based compensation expense related to option vesting amortization of $
As
of September 30, 2024, the unamortized stock option expense was $
Warrants
| Weighted Average | Weighted Average | |||||||||||
| Number of Shares | Exercise Price | Remaining Life | ||||||||||
| Stock Warrants | ||||||||||||
| Outstanding December 31, 2023 | $ | — | ||||||||||
| Granted | $ | |||||||||||
| Expired | $ | — | ||||||||||
| Exercised | $ | — | ||||||||||
| Outstanding September 30, 2024 | $ | |||||||||||
| Exercisable September 30, 2024 | $ | |||||||||||
A summary of the status of the Company’s nonvested warrants as of September 30, 2024, and changes during the nine months ended September 30, 2024, is presented below:
| Non-vested Warrants | Warrants | Weighted- Average Exercise Price | ||||||
| Non-vested at December 31, 2023 | $ | |||||||
| Granted | $ | |||||||
| Vested | ( | ) | $ | |||||
| Forfeited | $ | |||||||
| Non-vested at September 30, 2024 | $ | |||||||
The total number of warrants granted during the nine months ended September 30, 2024 and 2023 was and , respectively. The exercise price for these warrants was $ per share and there was an intrinsic value of $.
The Company recognized stock-based compensation expense related to warrant vesting amortization of $0 and $0 for the three and nine months ended September 30, 2024 and 2023, respectively.
On
February 21, 2024,
21
RSUs
A summary of the status of the Company’s nonvested RSUs as of September 30, 2024, and changes during the nine months ended September 30, 2024, is presented below:
| Non-vested RSUs | RSUs | Weighted- Average Exercise Price | ||||||
| Non-vested at December 31, 2023 | $ | |||||||
| Granted | $ | |||||||
| Vested | $ | |||||||
| Forfeited | $ | |||||||
| Non-vested at September 30, 2024 | $ | |||||||
The total number of RSUs granted during the nine months ended September 30, 2024 and 2023 was and , respectively. The exercise price for these RSUs was $ per share.
The
Company recognized stock-based compensation expense related to RSU vesting amortization of $
NOTE 7 – LEGAL
Demand Letter from Mr. Kopfli’s Attorney
On
February 14, 2024, the Board received a demand letter from an attorney representing Chromocell Holdings and the Company’s
former Chief Executive Officer and former Chief Strategy Officer, Mr. Christian Kopfli, who was released for “cause”
as disclosed elsewhere in this Report. Mr. Kopfli alleged an improper termination for “cause” and claimed to seek
monetary damages in the amount of $
By Order dated October 3, 2024, the court in the New York Action awarded the Company a default judgment against Mr. Kopfli and Chromocell Holdings on all claims, and ordered an assessment of damages against Mr. Kopfli and Chromocell Holdings (to be held at a date to be determined). As of September 30, 2024, the Company has removed the accrual of $363,091 in compensation expenses and recorded a gain on default judgement in the same amount.
Parexel Claim
On
July 31, 2024,
22
NOTE 8 – SUBSEQUENT EVENTS
2023 Plan Amendment
On
June 12, 2024,
Options and Equity Issuances
On October 22, 2024, the Company granted another vendor options to purchase up to an aggregate of shares of Common Stock at a grant price of $ per share.
On October 22, 2024, the Company granted an aggregate of up to shares of Common Stock, at a grant price of $ per share, to a vendor in considerations for the services provided by the vendor to the Company.
On October 22, 2024, the Company granted an aggregate of shares of Common Stock, at a grant price of $ per share, to a vendor in as payment for previously accrued services provided by the vendor to the Company.
Waiver of Exchange Cap
On October 22, 2024, the affirmative vote of a majority of the outstanding shares of Common Stock present in person, by remote communication, if applicable, or represented by proxy at the Annual Meeting approved the waiver of the Exchange Cap in connection with the July Note and the CEF Purchase Agreement.
Repurchase Plan Amendment
On
October 22, 2024, the Board authorized an amendment (the “Amendment”) to the Repurchase Plan to increase the total
value of shares of Common Stock available for repurchase by the Company under the Repurchase Plan by an additional $
Reincorporation Merger and Name Change
On October 22, 2024, the affirmative vote of a majority of the outstanding shares of Common Stock present in person, by remote communication, if applicable, or represented by proxy at the Annual Meeting approved a reincorporation merger of the Company in the State of Nevada with and into a wholly-owned subsidiary of the Company, with a simultaneous name change to “Channel Therapeutics Corporation” (the “Reincorporation Merger”). The Reincorporation Merger is expected to occur in the fourth quarter of 2024.
23
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary Notice Regarding Forward Looking Statements
This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue,” negatives thereof or similar expressions. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of Chromocell Therapeutics Corporation’s (“Chromocell”, the “Company”, “our”, “us” or “we”) operations; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future operations, future cash needs, business plans and future financial results, and any other statements that are not historical facts.
From time to time, forward-looking statements also are included in our other periodic reports on Form 10-K, 10-Q and 8-K, in our press releases, in our presentations, on our website and in other materials released to the public. Any or all of the forward-looking statements included in this Report and in any other reports or public statements made by us are not guarantees of future performance and may turn out to be inaccurate. These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, including risks related to market, economic and other conditions; our current liquidity position, the need to obtain additional financing to support ongoing operations, Chromocell’s ability to continue as a going concern; Chromocell’s ability to maintain the listing of its Common Stock on the NYSE American LLC, Chromocell’s ability to manage costs and execute on its operational and budget plans; and, Chromocell’s ability to achieve its financial goals. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
Overview
We are a clinical-stage biotech company focused on developing and commercializing new therapeutics to alleviate pain. Our clinical focus is to selectively target the sodium ion-channel known as “NaV1.7”, which has been genetically validated as a pain receptor in human physiology. A NaV1.7 blocker is a chemical entity that modulates the structure of the sodium-channel in a way to prevent the transmission of pain perception to the central nervous system (“CNS”). Our goal is to develop a novel and proprietary class of NaV blockers that target the body’s peripheral nervous system.
We have formally launched three programs developing pain treatment therapeutics, both based on the same proprietary molecule, as follows:
Neuropathic Pain: CC8464 is being developed to address certain types of neuropathic pain. The chemical characteristics of CC8464 restrict its entry into the CNS and limit its effect to the NaV1.7 channels in the peripheral nervous system, which consists of the nerves outside the brain and spinal cord. Activation of other channels in the CNS can result in side effects, including addiction and other centrally mediated adverse effects. Since CC8464 is designed to not penetrate the CNS it is highly unlikely to produce CNS mediated side effects including euphoria or addiction. Based on its characteristics, preclinical studies (described below) and the Phase 1 studies we have completed to date, we believe that CC8464, if approved, could become an attractive option for both patients and physicians as a treatment for moderate-to-severe pain in Erythromelalgia (“EM”) and idiopathic small fiber neuropathy (“iSFN”).
24
We conducted four Phase 1 trials with 207 patients. The results showed that CC8464 has a good overall tolerability and demonstrated no liver or renal toxicity, no central nervous system changes and no cardiovascular findings but may cause rashes in certain patients. The occurrence of rashes is not uncommon in the class of molecules to which CC8464 belongs and the rashes were resolved in all cases with topical steroids and/or topical antihistamines (with the exception of one patient requiring systemic steroids).
As a result of the potential for rashes, following discussions with the U.S. Food and Drug Administration (“FDA”), we decided to launch a slow dose escalation study to further evaluate the incidence of rashes. By titrating the dose over nine weeks, we anticipate that we will reduce or eliminate this side effect. We expect that the slow dose escalation study will also help determine the need for dose escalation in the final treatment regime. Even though the FDA has in the past approved drugs that listed rashes as a potential side effect, we do not know if CC8464 will be approved by the FDA (or any foreign authority).
We anticipate that the dose escalation will enroll the first patient dosing in the third quarter of 2024. The dose escalation trial will enroll approximately 20 healthy volunteers who will receive CC8464 over a period of approximately nine weeks, with the dose escalation study expected to take approximately nine months in total. We anticipate that the slower dose escalation will decrease the likelihood of drug-related skin reactions. The primary endpoint of the dose escalation trail will be safety and tolerability of the slower dose titration; however, we will also be measuring blood concentrations of CC8464, which will allow us to better understand the pharmacokinetics of CC8464. Even if it is ultimately determined that we will need an escalation period for chronic pain treatment therapy, which patients could well take for the remainder of their lives, we do not believe the dose escalation approach is consequential.
We plan to conduct the escalation trial in Australia to avail ourselves of a 43.5% tax credit for clinical expenses incurred in Australia and, on January 9, 2023, established an Australian subsidiary through which the work will be conducted. The location of the proof-of-concept (“POC”) has not been determined at this time, with availability of facilities and patient population, costs, tax credits, centers of excellence in the respective fields (EM or iSFN) are all factors in the ultimate determination of the location.
We are currently working on the development of the Phase 2a POC plan and expect to launch the Phase 2a POC study in 2025 to assess the potential efficacy of CC8464 in EM and iSFN patients. Both are orphan indications for which we plan to apply for orphan drug designations. The orphan indication may decrease the scope of the ultimate development program that is necessary for approval and is associated with a marketing exclusivity period from the FDA along with some tax advantages.
Though the Phase 2a POC study design has not yet been completed, the study will take approximately twelve months after it is initiated. The primary endpoint will be the amount of pain experienced from EM or iSFN with secondary endpoints including other measurements like pain relief and neuropathy scores. The final design may change based on feedback from regulatory authorities or information learned during the dose escalation trial.
The potential population for EM in the United States is estimated to be between 5,000 and 50,000 patients and the potential population for ISFN in the United States is estimated to be between 20,000 and 80,000 patients. In both instances, we expect patients would potentially take our drug for the remainder of their lives, and given the lack of good therapeutic alternatives, we expect to have a robust, ongoing, and durable market.
The Phase 2a results will have significance beyond EM and iSFN and provide important insights about NaV1.7 as a potential target to find novel pain medications as an alternative to opioids, the continuing primary standard of care in analgesics. We believe that positive results from the Phase 2a study could not only act as support for CC8464’s potential in EM and iSFN but may also provide guidance of its potential for other indications of peripheral neuropathic pain.
25
Eye Pain: Based on the same proprietary molecule as CC8464, our Eye Pain program, titled CT2000, is for the potential treatment of both acute and chronic eye pain. NaV1.7 channels are present on the cornea, making it a viable biological target for treating eye pain. Eye pain may occur with various conditions, including severe dry eye disease, trauma and surgery. Existing therapies for eye pain (such as steroids, topical non-steroidal anti-inflammatory agents, lubricants, local anesthetics) are limited in their effectiveness and/or limited in the duration that they may be prescribed because of safety issues. We intend to explore the viability of developing CT2000 as a topical agent for the relief of eye pain. A potential advantage of this approach is that topical administration of CT2000 is unlikely to lead to any hypersensitivity or skin reactions, like what was noted with systemic administration of CC8464, because the systemic absorption from a topical administration would be extremely limited. We have commenced development of a topical ophthalmic formulation of CT2000 that would initially be evaluated for ophthalmic toxicology and then followed by a POC trial in patients. We expect the trials for this ophthalmic formulation of CT2000 to start in 2025.
Current options for the treatment of ocular pain center on the use of corticosteroids and non-steroidal anti-inflammatory drug (“NSAID”) based therapeutics. These options suffer from sight-threatening complications such as Glaucoma and corneal melting, thus there is a large unmet need for other approaches. As an example of the potential patient population, we estimate that there are approximately 5 million cases of corneal abrasions per year in the United States. In addition, other potential indications associated with eye pain include:
| ● | severe dry eye, | |
| ● | side effects from photorefractive keratectomy (PRK) and pterygium surgery, | |
| ● | second eye cataract surgery, | |
| ● | neuropathic corneal pain, and | |
| ● | severe uveitis and severe iritis/scleritis. |
As NaV1.7 channels are present on the cornea and is a viable biological target for treating eye pain, we believe that we have a sound scientific basis for our ability to treat a multitude of eye pain indications. We are in the process of formulating CT2000 eye drops and expect to move into animal toxicity studies in the second half of 2024. From there, we intend to move into proof-of-concept studies in humans.
Depot Program: Based on several novel formulations of CC8464, the Company’s newly launched program, titled CT3000, is for the potential treatment of post operative pain with the use of nerve blocks. Examples would include knee surgery or shoulder surgery. Existing therapies for nerve blocks lead to neuromuscular blockade which prevents movement following surgery. Doctors often want patients to move soon after surgery to avoid complications such as blood clots. A NaV1.7 inhibitor used for nerve blocks may provide good analgesia but will not lead to neuromuscular blockade that prevents movement like other local anesthetics. The Company intends to explore the viability of developing CT3000 as an injectable depot for nerve blocks and pain following surgery. The Company has commenced development of an injectable depot for nerve blocks that would initially be studied in animal models of postoperative pain followed by toxicology and then by a POC trial in patients. The Company is currently conducting pharmacokinetic and efficacy trials in animals and expects human trials for the depot injection formulation of CT3000 to start in early 2026.
We may further expand our pipeline with other internal or external compounds in the future, but all other internally discovered compounds are pre-clinical and no commercial discussions about in-licensing have been initiated to date, other than as disclosed in this Report with respect to the licensing of the Spray Formulations (as defined below).
Background
We were incorporated in Delaware on March 19, 2021. On August 10, 2022, we entered into the Contribution Agreement with Chromocell Corporation, a Delaware corporation (“Chromocell Holdings”). Pursuant to the Contribution Agreement, as of the Contribution Date, we acquired from Chromocell Holdings all assets, liabilities and results of operations related to Chromocell Holdings’ therapeutic business, including all patents, pre-clinical and Phase I study results and data, and trade secrets related to the CC8464 compound, in exchange for the issuance by us of 1,111,112 shares of our common stock, par value $0.0001 per share (“Common Stock”) and (ii) 600,000 shares of Series A Convertible Preferred Stock (“Series A Preferred Stock”).
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On August 2, 2023, we entered into a Side Letter to the Contribution Agreement with Chromocell Holdings (the “Holdings Side Letter”). Pursuant to the Holdings Side Letter, upon closing of our initial public offering (“IPO”): (a) Chromocell Holdings re-assumed all $1.6 million in direct liabilities previously assumed by the Company in accordance with the Contribution Agreement, (b) Chromocell Holdings waived the Company’s obligations to make a cash payment in the amount of $0.6 million to Chromocell Holdings, and (c) in consideration thereof, we issued to Chromocell Holdings 2,600 shares of Series C Convertible Redeemable Preferred Stock of the Company, par value of $0.0001 per share (“Series C Preferred Stock”).
On February 21, 2024, we completed the IPO and issued and sold 1,100,000 shares of Common Stock at a price to the public of $6.00 per share. The aggregate net proceeds from the IPO were approximately $5.7 million after deducting underwriting discounts and commissions of approximately $0.5 million and offering expenses of approximately $0.4 million.
In connection with the completion of the IPO: (A) we effected the 9-for-1 reverse stock split effective February 15, 2024 (the “Reverse Stock Split”) of our shares of Common Stock, (B) all 600,000 issued and outstanding shares of our Series A Preferred Stock automatically converted into 499,429 shares of Common Stock, (C) $389,757 and accrued interest of approximately $28,336 as of February 21, 2024 outstanding under our senior secured convertible notes issued in a bridge financing in April 2023 for an aggregate principal amount of $393,808 (the “April Bridge Financing”) after giving effect to the Representative Affiliate Transactions (as defined below), automatically converted into approximately 87,109 shares of Common Stock, (D) $197,421 and accrued interest of $8,169 as of February 21, 2024 outstanding under our senior secured convertible notes issued in a bridge financing in September 2023 for an aggregate principal amount of $198,128 (the “September Bridge Financing”) after giving effect to the Representative Affiliate Transactions, automatically converted into approximately 43,385 shares of Common Stock, which includes an additional 549 shares of Common Stock issuable as consideration for the September Bridge Financing (the “Bonus Shares”), (E) we issued 37,500 shares of Common Stock to an investor as consideration for its previous agreement to provide funding that is no longer necessary in connection with the IPO, (F) we effected the Representative Affiliate Transactions, (G) we effected the transactions contemplated by the Holdings Side Letter, and issued an aggregate of 2,600 shares of Series C Preferred Stock to Chromocell Holdings pursuant thereto, and (H) we issued (i) 93,823 shares to a lender holding a note payable for $450,000 (the “Investor Note”) and (ii) 29,167 shares to one of our directors holding the promissory note in the aggregate principal amount of $175,000 (the “Director Note”) in full satisfaction of our obligations thereunder (in the case of (A) through (D) and (H) above, based on the IPO price of $6.00 per share of Common Stock). We refer to these actions as the “IPO Transactions.”
In addition, certain stockholders of the Company (“Selling Stockholders”), as identified in the Registration Statement, have agreed to offer for resale of up to an aggregate of 2,969,823 shares of Common Stock (the “Selling Stockholder Shares”) to the public. After conversion of the convertible notes or shares of preferred stock, as applicable, the Selling Stockholders, or their respective transferees, pledgees, donees or other successors-in-interest, may sell the Selling Stockholders Shares through public or private transactions at prevailing market prices, at prices related to prevailing market prices or at privately negotiated prices. We will not receive any proceeds from the sale of the Selling Stockholder Shares by the Selling Stockholders.
The affirmative vote of a majority of the outstanding shares of Common Stock present in person, by remote communication, if applicable, or represented by proxy at the annual meeting of stockholders held on October 22, 2024 approved a reincorporation merger of the Company in the State of Nevada with and into a wholly-owned subsidiary of the Company, with a simultaneous name change to “Channel Therapeutics Corporation” (the “Reincorporation Merger”). The Reincorporation Merger is expected to occur in the fourth quarter of 2024.
Trends and Other Factors Affecting Our Business
On December 23, 2023, we entered into an exclusive licensing agreement (the “Benuvia License Agreement”) with Benuvia Operations LLC (“Benuvia”) for the Diclofenac Spray Formulation (as defined below), an intranasal spray formulation of Rizatriptan and an Ondansetron sublingual spray formulation (collectively, the “Spray Formulations”), diversifying our pipeline of non-opioid pain treatment therapies, while adding therapeutic options for related conditions. The sublingual formulation of a Diclofenac spray for the treatment of acute pain (the “Diclofenac Spray Formulation”) is patented and has started clinical development in human volunteers. Preliminary pharmacokinetics suggest that this formulation may have a faster onset of action than oral Diclofenac tablets. Diclofenac is an NSAID that is also marketed under additional brand names including Voltaren and Cataflam in its pill form. Rizatriptan, whose brand name is Maxalt, is used for the acute treatment of Migraines as a pill. By a number of clinical measures it is thought to be superior to Sumatriptan. A sublingual formulation of Rizatriptan may potentially have a faster onset of action than an oral form and may be easier to tolerate than swallowing a pill when patients are experiencing nausea as a result of the migraine headache. Ondansetron is an anti-emetic that is available in oral and intravenous form. An Ondansetron sublingual spray formulation may potentially have a faster onset of action than an oral form and may be easier to tolerate than swallowing a pill when patients are experiencing nausea. Under the terms of the Benuvia License Agreement, Benuvia will be responsible for the manufacturing and supply of the Spray Formulations, but we will have exclusive, worldwide rights to develop, commercialize and distribute the Spray Formulations.
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In connection with the Benuvia License Agreement, we agreed to pay Benuvia a six and one-half percent (6.5%) royalty on net sales of the Spray Formulations for a period of up to 15 years from the date of the first commercial sale of any of the Spray Formulations. In addition, on December 23, 2023, we entered into a stock issuance agreement with Benuvia pursuant to which we issued to Benuvia 384,226 shares of our Common Stock, which may be offered and sold pursuant to the resale prospectus which forms a part of the Registration Statement.
While we currently do not have strategy and development plans for the Spray Formulations licensed from Benuvia, beginning in the third quarter of 2024, we plan to develop clinical programs for each of the Spray Formulations, determine the labelling strategy that would be obtained from completion of these programs and discuss with the FDA the requirements for bringing each of the Spray Formulations to market. We anticipate bringing the Spray Formulations to market through the FDA 505(b)(2) regulatory pathway for new drug applications; however, the exact details will require further consultation with the FDA.
As a result, our results of operations and balance sheets may not be indicative of future operating results or of our future financial condition.
Going Concern
For the nine months ended September 30, 2024 and 2023, we had a net loss of approximately $6.0 million and approximately $3.3 million, respectively, and will require additional capital in order to operate in the normal course of business and fund clinical studies. The IPO closed on February 21, 2024, from which, the Company received net proceeds from the IPO of approximately $5.7 million after deducting the underwriting discounts and commissions and offering expenses payable by the Company (excluding any exercise of the warrants issued to A.G.P./Alliance Global Partners (the “Representative”) or its designees, in connection with the IPO).
Based on the Company’s current projections, management believes there is substantial doubt about its ability to continue to operate as a going concern and fund its operations through at least the next twelve months following the issuance of these financial statements. While the Company will continue to invest in its business and the development of CC8464, CT2000 and CT 3000, and potentially other molecules, it is unlikely that the Company will generate product or licensing revenue during the next twelve months. During the period, the Company completed its initial public offering, raising $5.7 million, after deducting the underwriting discounts and commissions and offering expenses, and the Company may need to raise additional funds through either strategic partnerships or the capital markets. However, there is no assurance that the Company will be able to raise such additional funds on acceptable terms, if at all. If the Company raises additional funds by issuing securities, existing stockholders may be diluted.
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Results of Operations
Comparison of the Three Months Ended September 30, 2024 and 2023
The following table summarizes our results of operations for the three months ended September 30, 2024 and 2023:
| Three Months Ended September 30, 2024 and 2023 | ||||||||||||||||
| 2024 | 2023 | $ Change | % Change | |||||||||||||
| OPERATING EXPENSES | ||||||||||||||||
| General and administrative expenses | $ | 1,161,090 | $ | 661,572 | $ | 499,518 | 76 | % | ||||||||
| Research and development | 414,639 | 49,132 | 365,507 | 744 | % | |||||||||||
| Professional fees | 472,604 | 581,022 | (108,418 | ) | (19 | )% | ||||||||||
| Total operating expenses | 2,048,333 | 1,291,726 | 756,607 | 59 | % | |||||||||||
| Loss from operations | (2,048,333 | ) | (1,291,726 | ) | (456,607 | ) | (59 | )% | ||||||||
| Other expense | 353,678 | (130,006 | ) | 483,384 | (372 | )% | ||||||||||
| Net loss before provision for income taxes | (1,694,655 | ) | (1,421,732 | ) | (272,923 | ) | 19 | % | ||||||||
| Provision for income taxes | — | — | — | NA | ||||||||||||
| Net loss | $ | (1,694,655 | ) | $ | (1,421,732 | ) | $ | (272,923 | ) | 19 | % | |||||
Operating Expenses
Our operating expenses consist of general and administrative expenses, research and development expenses and professional fees.
General and Administrative Expenses
We incurred general and administrative expenses for the three months ended September 30, 2024 and 2023 of $1,161,090 and $661,572, respectively. For the three months ended September 30, 2024, compared to the same period in 2023, this represented an increase of $499,518, or 76%, primarily as a result of increases of $115,495 in compensation expenses, an increase of $34,580 in marketing expenses, an increase of $129,790 in D&O insurance, an increase of $69,391 in capital market expenses , an increase of $40,000 in board related expenses, and an increase of $94,913 in stock-based compensation expense.
Research and Development Expenses
We incurred research and development expenses for the three months ended September 30, 2024 and 2023 of $414,639, and $49,132, respectively. For the three months ended September 30, 2024, compared to the same period in 2023, this represented an increase of $365,507, or 744%, with the details set forth in the table below:
| Three Months Ended September 30, 2024 and 2023 | ||||||||||||||||
| 2024 | 2023 | $ Change | % Change | |||||||||||||
| Consultant | $ | 76,840 | $ | 12,900 | $ | 63,940 | 496 | % | ||||||||
| Lab Gas | 42 | — | 42 | — | % | |||||||||||
| Lab Cell Storage | 16,360 | 15,247 | 1,113 | 7 | % | |||||||||||
| Chemistry Manufacturing and Controls (“CMC”) | 319,019 | — | 319,019 | — | % | |||||||||||
| IP Services | 2,378 | 20,985 | (18,607 | ) | (89 | )% | ||||||||||
| Total | $ | 414,639 | $ | 49,132 | $ | 365,507 | 744 | % | ||||||||
The Company incurred higher research and development expenses for the three months ended September 30, 2024, as compared to the corresponding period in 2023 primarily as a result of an increase in CMC of $319,019.
Professional Fees
We incurred professional expenses for the three months ended September 30, 2024 and 2023 of $472,604 and $581,022, respectively. For the three months ended September 30, 2024, compared to the same period in 2023, this represented a decrease of $108,418, or 19%, as a result of a decrease in legal fees of $287,752 offset by an increase in consulting fees of $184,659.
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Other (Expense) Income
We incurred other expense for the three months ended September 30, 2024 of $353,678 as compared to other income for the three months ended September 30, 2023 of $(130,006). For the three months ended September 30, 2024, compared to the same period in 2023, this represented an increase of $483,684 or 372%. The other expense for the three months ended September 30, 2024 and 2023 was primarily the result of interest expense and gain on default judgement. The decrease in the interest expense was due to the notes converting to equity.
Comparison of the Nine Months Ended September 30, 2024 and 2023
The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023:
| Nine Months Ended September 30, 2024 and 2023 | ||||||||||||||||
| 2024 | 2023 | $ Change | % Change | |||||||||||||
| OPERATING EXPENSES | ||||||||||||||||
| General and administrative expenses | $ | 3,158,525 | $ | 1,677,078 | $ | 1,481,447 | 88 | % | ||||||||
| Research and development | 894,200 | 285,204 | 608,996 | 214 | % | |||||||||||
| Professional fees | 1,693,676 | 1,021,187 | 672,489 | 66 | % | |||||||||||
| Total operating expenses | 5,746,401 | 2,983,469 | 2,762,932 | 93 | % | |||||||||||
| Loss from operations | (5,746,401 | ) | (2,983,469 | ) | (2,762,932 | ) | (93 | )% | ||||||||
| Other expense | (282,203 | ) | (358,171 | ) | 75,968 | (21 | )% | |||||||||
| Net loss before provision for income taxes | (6,028,604 | ) | (3,341,640 | ) | (2,686,964 | ) | 80 | % | ||||||||
| Provision for income taxes | — | — | — | NA | ||||||||||||
| Net loss | $ | (6,028,604 | ) | (3,341,640 | ) | (2,686,964 | ) | 80 | % | |||||||
Operating Expenses
Our operating expenses consist of general and administrative expenses, research and development expenses and professional fees.
General and Administrative Expenses
We incurred general and administrative expenses for the nine months ended September 30, 2024 and 2023 of $3,158,525 and $1,677,078, respectively. For the nine months ended September 30, 2024, compared to the same period in 2023, this represented an increase of $1,481,447, or 88%, primarily as a result of increases of $427,090 in compensation expenses, an increase of $174,485 marketing expenses, an increase of $338,438 in D&O insurance, an increase of $219,510 in IPO fees, and an increase of $168,385 in stock-based compensation expense.
Research and Development Expenses
We incurred research and development expenses for the nine months ended September 30, 2024 and 2023 of $894,200, and $285,204, respectively. For the nine months ended September 30, 2024, compared to the same period in 2023, this represented an increase of $608,996, or 214%, with the details set forth in the table below:
| Nine Months Ended September 30, 2024 and 2023 | ||||||||||||||||
| 2024 | 2023 | $ Change | % Change | |||||||||||||
| Consultant | $ | 214,230 | $ | 36,200 | $ | 178,030 | 492 | % | ||||||||
| Lab Gas | 1,494 | — | 1,494 | NA | ||||||||||||
| Lab Cell Storage | 67,758 | 33,000 | 34,758 | 105 | % | |||||||||||
| Chemistry Manufacturing and Controls (“CMC”) | 488,636 | — | 488,636 | NA | ||||||||||||
| IP Services | 122,082 | 216,004 | (93,922 | ) | (43 | )% | ||||||||||
| Total | $ | 894,200 | $ | 285,204 | $ | 608,996 | 214 | % | ||||||||
The Company incurred higher research and development expenses for the nine months ended September 30, 2024, as compared to the corresponding period in 2023 primarily as a result of an increase in CMC services of $488,636.
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Professional Fees
We incurred professional expenses for the nine months ended September 30, 2024 and 2023 of $1,693,676 and $1,021,187, respectively. For the nine months ended September 30, 2024, compared to the same period in 2023, this represented an increase of $672,489, or 66%, as a result of higher auditing and legal expenses associated with the Company operating as a public company since February 2024.
Other (Expense) Income
We incurred other expense for the nine months ended September 30, 2024 of $282,203 as compared to other expense for the nine months ended September 30, 2023 of $358,171. For the nine months ended September 30, 2024, compared to the same period in 2023, this represented a decrease of $75,968 or 21%. The other expense for the nine months ended September 30, 2024 and 2023 was primarily the result of interest expense and gain on default judgement. The increase in the interest expense was due to the remaining amortization of the debt discount on the Company’s notes being accelerated upon the conversion of the notes to equity upon consummation of the IPO.
Liquidity
Sources of Liquidity and Capital
We are in our early stages of development and growth, without established records of sales or earnings. We will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or emerging growth companies. We have not yet commercialized any products, and we do not expect to generate revenue from product sales of any of our compounds for several years.
Cash totaled $1.3 million and $0.1 million as of September 30, 2024 and December 31, 2023, respectively. As of September 30, 2024 and December 31, 2023, we had an accumulated deficit of approximately $19.5 million and $13.5 million, respectively, and had a working capital deficit of $1.4 million and a working capital deficit $6.4 million, respectively.
Historically, we have funded our operations from a series of cash advances from Chromocell Holdings, licensing arrangements, bridge and note issuances and grants from the National Institutes of Health.
On February 8, 2024, we and certain affiliates of the Representative entered into amendments to the senior secured convertible notes issued to such affiliates of the Representative in the April Bridge Financing and September Bridge Financing to remove the automatic conversion features from such notes (the “Bridge Financing Note Amendments”). Under the Bridge Financing Note Amendments, both notes issued in the April Bridge Financing and the September Bridge Financing had a maturity date of March 1, 2024, and the full principal amount of both notes and any accrued interest thereon was payable solely in cash upon the consummation of the IPO. Both notes had an annual interest rate of eight percent (8%), which accrued daily, and was calculated on the basis of a 360-day year (consisting of twelve 30 calendar day periods).
On February 10, 2024, we entered into a Stock Rescission Agreement with certain affiliates of the Representative (the “Stock Rescission Agreement” and, together with the Bridge Financing Note Amendments, the “Representative Affiliate Transactions”), pursuant to which we rescinded 111,129 shares of our Common Stock held by such affiliates of the Representative and agreed to refund an aggregate of $91,513 paid by such affiliates of the Representative in consideration therefor within 30 days of the effective date of the Stock Rescission Agreement. At September 30, 2024, all such amounts have been paid pursuant to the Representative Affiliate Transactions and there are no remaining obligations thereto.
On February 21, 2024, we completed the IPO and issued 1,100,000 shares of Common Stock at a price of $6.00 per share. The aggregate net proceeds from the IPO were approximately $5.7 million after deducting approximately $0.9 million in underwriting discounts and commissions and offering expenses.
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In connection with the completion of the IPO: (A) we effected the Reverse Stock Split, effective as of February 15, 2024 (B) all 600,000 issued and outstanding shares of our Series A Preferred Stock automatically converted into 499,429 shares of Common Stock, (C) principal in the amount of $389,757, along with accrued interest of approximately $28,336 as of February 21, 2024, outstanding under our senior secured convertible notes issued in the April Bridge Financing (after giving effect to the Representative Affiliate Transactions), automatically converted into approximately 87,109 shares of Common Stock, (D) principal in the amount of $197,421, along with accrued interest of $8,169 as of February 21, 2024, outstanding under our senior secured convertible notes issued in the September Bridge Financing (after giving effect to the Representative Affiliate Transactions), automatically converted into approximately 43,385 shares of Common Stock, which includes an additional 549 Bonus Shares issuable as consideration for the September Bridge Financing, (E) we issued 37,500 shares of Common Stock to an investor as consideration for its previous agreement to provide funding that is no longer necessary in connection with the IPO, (F) we effected the Representative Affiliate Transactions, (G) we effected the transactions contemplated by the Holdings Side Letter, and issued an aggregate of 2,600 shares of Series C Preferred Stock to Chromocell Holdings pursuant thereto, and (H) we issued (i) 93,823 shares to a lender holding the Investor Note and (ii) 29,167 shares to one of our directors holding the Director Note in full satisfaction of our obligations thereunder (in the case of (A) through (D) and (H) above, based on the IPO price of $6.00 per IPO Share).
In addition, certain Selling Stockholders, as identified in the Registration Statement, have agreed to offer for resale of up to an aggregate of 2,969,823 Selling Stockholder Shares to the public. After conversion of the convertible notes or shares of preferred stock, as applicable, the Selling Stockholders, or their respective transferees, pledgees, donees or other successors-in-interest, may sell the Selling Stockholders Shares through public or private transactions at prevailing market prices, at prices related to prevailing market prices or at privately negotiated prices. We will not receive any proceeds from the sale of the Stockholder Shares by the Selling Stockholders.
On July 26, 2024, the Company entered into a Common Stock Purchase Agreement, dated as of July 26, 2024 (the “CEF Purchase Agreement”), with Tikkun Capital LLC (“Tikkun”), providing for a committed equity financing facility, pursuant to which, upon the terms and subject to the satisfaction of the conditions contained in the CEF Purchase Agreement, Tikkun has committed to purchase, at the Company’s direction in its sole discretion, up to an aggregate of $30,000,000 (the “Total Commitment”) of the shares of Common Stock (the “Purchase Shares”), subject to certain limitations set forth in the CEF Purchase Agreement, from time to time during the term of the CEF Purchase Agreement. Concurrently with the execution of the CEF Purchase Agreement, the Company and Tikkun also entered into a Registration Rights Agreement, dated as of July 26, 2024, pursuant to which the Company agreed to file with the SEC one or more registration statements, to register under the Securities Act, the offer and resale by Tikkun of all of the Purchase Shares that may be issued and sold by the Company to Tikkun from time to time under the CEF Purchase Agreement.
On August 5, 2024, our Board authorized the Repurchase Plan, pursuant to which up to $250,000 of our Common Stock may be repurchased prior to December 31, 2024, unless completed sooner or otherwise extended. Open market purchases are intended to be conducted in accordance with applicable Securities and Exchange Commission regulations, including the guidelines and conditions of Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The timing and actual number of shares repurchased will depend on a variety of factors including trading price, the Company’s financial performance, corporate and regulatory requirements and other market conditions. On October 22, 2024, the Board authorized an amendment (the “Amendment”) to the Repurchase Plan to increase the total value of shares of Common Stock available for repurchase by the Company under the Repurchase Plan by an additional $500,000, to $750,000.
Future Funding Requirements
Our primary use of cash is to fund clinical development, operating expenses and repay accrued liabilities associated with our IPO.
With respect to the Company’s future expected operations expenses, the primary expense drivers will be research and development and management overhead, including costs of being a public company. Of these, it is expected that research and development will be the largest expense and comprise approximately $3.0 million in the twelve months following the IPO, which will be utilized for the furtherance of the Company’s CC8464, CT2000 and CT3000 programs. We have based the research and development costs on current clinical and pre-clinical trial parameters and expectations on certain existing tax credits, and there is no certainty that the clinical and pre-clinical trial parameters or tax credits available to the Company will remain as they are, which could lead to changes in our research and development expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued expenses and prepaid expenses.
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We expect to continue to incur significant and increasing expenses and operating losses in connection with our ongoing research and development activities. In addition, with the closing of the IPO, we expect to incur additional costs associated with operating as a public company. As a result, we expect to continue to incur operating losses and negative operating cash flows for the foreseeable future.
Based on our current operating plan, we believe that the net proceeds from the IPO, together with our existing cash, will be sufficient to fund our operations and capital expenses through the end of 2024. However, we have based this estimate on assumptions that may prove to be incorrect, and we could exhaust our capital resources sooner than we expect.
We may also raise additional funding through strategic relationships, public or private equity or debt financings, credit facilities, grants or other arrangements. If such funding is not available or not available on terms acceptable to us, our current development plan and plans for expansion of our general and administrative infrastructure may be curtailed. If we raise additional funds through the issuance of preferred stock, convertible debt securities or other debt financing, these securities or other debt could contain covenants that restrict our operations. Any other third-party funding arrangement could require us to relinquish valuable rights.
The source, timing and availability of any future financing will depend principally upon market conditions. Funding may not be available when needed, at all, or on terms acceptable to us. Lack of necessary funds may require us to, among other things, delay, scale back or eliminate expenses including some or all of our planned development. There is substantial doubt about our ability to continue as a going concern.
Cash Flows
The following table summarizes our cash flows for the nine months ended September 30, 2024 and 2023:
| Nine Months Ended September 30, 2024 and 2023 | ||||||||||||||||
| 2024 | 2023 | $ Change | % Change | |||||||||||||
| Net cash used in operating activities | $ | (5,122,219 | ) | $ | (624,224 | ) | $ | (4,497,995 | ) | (721 | )% | |||||
| Net cash provided by financing activities | 6,280,731 | 591,936 | 5,688,795 | 961 | % | |||||||||||
| Net increase (decrease) in cash | $ | 1,158,512 | $ | (32,288 | ) | $ | 1,190,800 | (3,688 | )% | |||||||
Net Cash Used in Operating Activities
For the nine months ended September 30, 2024, we incurred a net loss of $6,028,604, and net cash flows used in operating activities was $5,122,219. The cash flow used in operating activities was primarily due to a net loss of $6,028,604, offset by stock-based compensation expense of $1,268,873, amortization of debt discount of $615,933, a change in account payable and accrued expense of $557,589, offset by a change in prepaid expenses of $94,585, a change of $45,786 in due from Chromocell Corporation, and a change in accrued compensation in the amount of $282,548, and a gain on default judgement of $363,091.
For the nine months ended September 30, 2023, we incurred a net loss of $3,341,640, and net cash flows used in operating activities was $624,224. The cash flow used in operating activities was primarily due to a net loss of $3,341,640, offset by stock-based compensation expense of $941,989, amortization of debt discount of $66,786, $201,600 in issuance cost from shares issued on extension of bridge loan, a change in account payable and accrued expense of $1,166,880, and an increase in accrued compensation in the amount of $340,161.
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Net Cash (Used in) Provided by Investing Activities
The Company neither received nor used cash in investing activities during the nine months ended September 30, 2024 and 2023.
Net Cash Provided by Financing Activities
For the nine months ended September 30, 2024, net cash flows provided by financing activities were $6,280,731 resulting from net proceeds from common stock issued for cash of $5,972,000, proceeds from loans of $690,000, partially offset by payment of recission on stock of $166,512 and payments on loans of $214,757.
For the nine months ended September 30, 2023, net cash flows provided by financing activities were $591,936, consisting of cash received from net proceeds from the issuance of notes in the amount of $591,936.
Off-Balance Sheet Arrangements
During the three and nine months ended September 30, 2024 and 2023, we did not have, and we do not currently have, any off-balance sheet arrangements, as defined under applicable SEC rules.
Critical Accounting Estimates
The following discussions are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.
The preparation of these financial statements requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingencies. We continually evaluate the accounting policies and estimates used to prepare the financial statements. We base our estimates on historical experiences and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates made by management.
See Note 3 – Summary of Significant Accounting Policies to the accompanying financial statements for a detailed description of our significant accounting policies.
Income Taxes
We are subject to income taxes in the U.S. Significant judgment is required in determining income tax expense, deferred taxes and uncertain tax positions. The underlying assumptions are also highly susceptible to change from period to period. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some or all the deferred tax assets will be realized. The ultimate realization of deferred taxes assets is dependent upon generation of future taxable income during the period in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and taxable income in carryback years and tax-planning strategies when making this assessment. There is currently significant negative evidence which contributes to our recording a valuation allowance against our deferred tax assets due to cumulative losses since inception.
Although we believe our assumptions, judgments, and estimates are reasonable, changes in tax laws or our interpretation of tax laws and the resolution of any tax audits could significantly impact the amounts provided for income taxes in our consolidated financial statements. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period that includes the enactment date. Adjustments to income tax expense, to the extent we establish a valuation allowance or adjust the allowance in a future period, could have a material impact on our financial condition and results of operations.
Recently Issued and Adopted Accounting Pronouncements
The FASB issues ASUs to amend the authoritative literature in the Accounting Standards Codification (“ASC”). There have been several ASUs to date, including those above, that amend the original text of ASC. Management believes that those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to us or (iv) are not expected to have a significant impact on our financial statements.
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Other accounting standards that have been issued or proposed by FASB and do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. Other than below, management does not believe that any other recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on the accompanying financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. This ASU will be effective for the annual periods beginning after December 15, 2024. The Company is currently evaluating the timing and impacts of adoption of this ASU.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information required by this Item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15 under the Exchange Act, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Report. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Based on the evaluation of our disclosure controls and procedures as of September 30, 2024, our Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were not effective.
Management identified the following material weaknesses:
| 1. | We lack the necessary corporate accounting resources to maintain adequate segregation of duties. Such a lack of segregation of duties is typical in a company with limited resources. | |
| 2. | We lack the ability to provide multiple levels of review in connection with the financial reporting process, which means that we cannot ensure that we are meeting certain financial reporting and transaction processing controls standards. | |
| 3. | We lack the necessary internal IT infrastructure to ensure proper IT general controls. Additionally, we are reliant on third-party software for our financial systems and cannot ensure there are no vulnerabilities in these systems. |
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Changes in Internal Controls
With the completion of the IPO, the Company has begun instituting controls and procedures that we expect will demonstrably improve the effectiveness of the Company’s disclosure controls and procedures in upcoming reporting periods.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may be involved in legal proceedings arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, in the opinion of our management, would have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity and reputation harm, and other factors.
On February 14, 2024, our Board received a demand letter from an attorney representing Chromocell Holdings and our former Chief Executive Officer and former Chief Strategy Officer, Mr. Christian Kopfli, who was released for “cause” as disclosed elsewhere in this Report. Mr. Kopfli alleged an improper termination for “cause” and claimed to seek monetary damages in the amount of $479,169. Of the $479,169 asserted by Mr. Kopfli, as of September 30, 2024, the Company had accrued $363,091 in compensation expenses associated with Mr. Kopfli’s prior employment with the Company. However, the Company believes the assertions made by Mr. Kopfli are without merit and commenced the New York Action against Mr. Kopfli and Chromocell Holdings, asserting causes of action against Mr. Kopfli for breach of the Employment Agreement entered into on January 10, 2023 between the Company and Mr. Kopfli, breach of fiduciary duty by Mr. Kopfli, as well as breach of contract against Chromocell Holdings. The Company also asserted a “faithless servant” claim against Mr. Kopfli, seeking a ruling that Mr. Kopfli is not entitled to compensation from the Company. The Company seeks monetary damages against Mr. Kopfli and Chromocell Holdings in the New York Action, plus disgorgement of all compensation previously paid or accrued to Mr. Kopfli by the Company.
By Order dated October 3, 2024, the court in the New York Action awarded the Company a default judgment against Mr. Kopfli and Chromocell Holdings on all claims, and ordered an assessment of damages against Mr. Kopfli and Chromocell Holdings (to be held at a date to be determined). As of September 30, 2024, the Company has removed the accrual of $363,091 in compensation expenses and recorded a gain on default judgement in the same amount.
On July 31, 2024, the Company received a demand letter from an attorney representing Parexel International (IRL) Limited (“Parexel”). The letter, which was addressed to both the Company and Chromocell Holdings, purports to be a notice of default of the Promissory Note between Chromocell Holdings and Parexel and seeks the payment of allegedly unpaid principal in the amount of $682,551.49 plus interest exceeding $177,000. The Company denies that it is liable for any of the amounts sought by Parexel; the Company is not a party to the Promissory Note and does not believe it is liable for any amounts allegedly due thereunder.
Item 1A. Risk Factors
As a smaller reporting company, the Company is not required to include the disclosure required under this Item 1A.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Recent Sales of Unregistered Securities
On August 12, 2024, the Company agreed to issue 10,000 shares of Common Stock to a vendor in exchange for outstanding invoices related to services provided by the vendor to the Company.
On October 22, 2024, the Company agreed to issue up to an aggregate of 76,667 shares of Common Stock to three vendors in considerations for the services provided by the vendor to the Company.
Also on October 22, 2024, the Company granted another vendor options to purchase up to an aggregate of 50,000 shares of Common Stock at a grant price of $0.73 per share.
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The offers and sales of the above securities were deemed to be exempt from registration under the Securities Act in reliance upon Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder, or Rule 701 promulgated under Section 3(b) of the Securities Act, as transactions by an issuer not involving any public offering or pursuant to benefit plans and contracts relating to compensation as provided under Rule 701. The recipients of the above securities represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Share repurchase activity during the three months ended September 30, 2024 was as follows:
| Periods | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs(1) | |||||||||||||
| July 1, 2024 to July 31, 2024: | — | $ | — | — | $ | 250,000 | |||||||||||
| August 1, 2024 to August 31, 2024: | 58,642 | 0.82 | 58,642 | 201,750 | |||||||||||||
| September 1, 2024 to September 30, 2024: | 27,554 | 0.94 | 27,554 | 175,821 | |||||||||||||
| Total | 86,196 | $ | 0.86 | 86,196 | |||||||||||||
| (1) | On August 5, 2024, the Board authorized the purchase of up to $250,000 of the Company’s Common Stock under the Repurchase Plan. On October 22, 2024, the Board authorized an Amendment to the Repurchase Plan to increase the total value of shares of Common Stock available for repurchase by the Company under the Repurchase Plan by an additional $500,000, to $750,000. As of September 30, 2024, remaining availability under the Repurchase Plan was $175,821. Open market purchases are intended to be conducted in accordance with applicable Securities and Exchange Commission regulations, including the guidelines and conditions of Rule 10b-18 and Rule 10b5-1 of the Exchange Act. The timing and actual number of shares repurchased will depend on a variety of factors including trading price, the Company’s financial performance, corporate and regulatory requirements and other market conditions. |
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
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Item 6. Exhibits
| Exhibit Number |
Description | |
| 10.1+ | Second Amendment to the Chromocell Therapeutics Corporation 2023 Equity Incentive Plan. | |
| 31.1 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1 | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101 | Interactive Data Files (embedded within the Inline XBRL document) | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
+ Indicates management contract or compensatory plan.
In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Chromocell Therapeutics Corporation | ||
| Date: November 13, 2024 | By: | /s/ Francis Knuettel II |
| Name: Francis Knuettel II | ||
Title: Chief Executive Officer and President, Chief Financial Officer, Treasurer and Secretary (Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer) | ||
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