UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
or
For the transition period from ________________ to ________________
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| | ||
| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The |
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
No
As of November
13, 2024, the registrant had 14,234,212 and
Table of Contents
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA
This Quarterly Report on Form 10-Q contains forward-looking statements which are made pursuant to the safe harbor provisions 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”). These statements may be identified by such forward-looking terminology as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections about our company, are not guarantees of future results or performance and involve substantial risks and uncertainty. We may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in these forward-looking statements. Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including the risks and uncertainties inherent in our statements regarding:
| ● | we have generated no significant revenue from commercial sales to date and our future profitability is uncertain; |
| ● | if we fail to obtain the capital necessary to fund our operations, we will be unable to continue or complete our product development and you will likely lose your entire investment; |
| ● | our financial situation creates doubt whether we will continue as a going concern; |
| ● | we may need to raise additional funding, which may not be available on acceptable terms, or at all; |
| ● | even if we can raise additional funding, we may be required to do so on terms that are dilutive to you.; |
| ● | the regulatory approval process is expensive, time-consuming and uncertain and may prevent us from obtaining approvals for the commercialization of our future product candidates, if any; |
| ● | we may encounter substantial delays in completing our clinical studies which in turn will require additional costs, or we may fail to demonstrate adequate safety and efficacy to the satisfaction of applicable regulatory authorities; |
| ● | if our future pre-clinical development and future clinical Phase I/II studies are unsuccessful, we may be unable to obtain regulatory approval of, or commercialize, our product candidates on a timely basis or at all; |
| ● | even if we receive regulatory approval for any of our product candidates, we may not be able to successfully commercialize the product and the revenue that we generate from their sales, if any, may be limited; |
| ● | adverse events involving our products may lead the FDA or applicable foreign regulatory agency to delay or deny clearance for our products or result in product recalls that could harm our reputation, business and financial results; |
ii
| ● | certain technologies are subject to licenses from LLU and Stanford (as defined below), each of which are revocable in certain circumstances, including in the event we do not achieve certain payments and milestone deadlines. Without these licenses, we may not be able to continue to develop our product candidates; |
| ● | if we were to lose our CLIA certification or state laboratory licenses, whether as a result of a revocation, suspension or limitation, we would no longer be able to offer our assays (including our AditxtScore™ platform), which would limit our revenues and harm our business. If we were to lose, or fail to obtain, a license in any other state where we are required to hold a license, we would not be able to test specimens from those states; |
| ● | our results of operations will be affected by the level of royalty and milestone payments that we are required to pay to third parties; |
| ● | we face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do; |
| ● | our technologies and products under development, and our business, may fail if we are not able to successfully commercialize them and ultimately generate significant revenues as a result; |
| ● | customers may not adopt our products quickly, or at all; |
| ● | the failure to obtain or maintain patents, licensing agreements and other intellectual property could materially impact our ability to compete effectively; |
| ● | some of our intellectual property may be subject to “march-in” rights by the U.S. federal government; |
| ● | we do not expect to pay dividends in the foreseeable future; |
| ● | we have issued a significant number of shares of convertible preferred stock and warrants and may continue to do so in the future. The conversion and/or exercise of these securities and the sale of the shares of common stock issuable thereunder may dilute your percentage ownership interest and may also result in downward pressure on the price of our common stock; |
| ● | we have issued a significant number of restricted stock awards, restricted stock units, options and warrants and may continue to do so in the future. The vesting and, if applicable, exercise of these securities and the sale of the shares of common stock issuable thereunder may dilute your percentage ownership interest and may also result in downward pressure on the price of our common stock; |
| ● | we have entered into a Common Stock Purchase Agreement with an equity line investor pursuant to which we may issue and sell up to $150 million of our common stock, which could result in significant dilution; |
| ● | we have entered into an At The Market Offering Agreement with H.C. Wainwright & Co., LLC pursuant to which we may issue and sell up to $35 million of our common stock, which could result in significant dilution; |
| ● | while we have entered into a Share Exchange Agreement with Cellvera Global, a Merger Agreement with Evofem Biosciences, Inc. and an Arrangement Agreement with Appili Therapeutics, Inc., we cannot assure you that such transactions will be consummated or, that if one or more of such transactions are consummated, that they will be accretive to stockholder value; |
iii
| ● | we may engage in future acquisitions or strategic transactions, including the transactions with Cellvera Global, Evofem Biosciences and Appili Therapeutics, which will require us to seek additional financing or financial commitments, increase our expenses and/or present significant distractions to our management; |
| ● | future sales or issuances of substantial amounts of our common stock, including, potentially as a result of future acquisitions or strategic transactions, including the transactions with Evofem Biosciences, Appili Therapeutics, and Cellvera Global, could result in significant dilution; |
| ● | On December 29, 2023, we received the determination from Nasdaq that we regained compliance with the Nasdaq continued listing requirements, however, we remain subject to a panel monitor of our ongoing compliance until December 29, 2024 and if we fail to comply with such requirements during the panel monitor, it could result in the delisting of our securities by Nasdaq; and |
| ● | exclusive forum provisions in our amended and restated certificate of incorporation and amended and restated bylaws. |
All of our forward-looking statements are as of the date of this Quarterly Report on Form 10-Q only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report on Form 10-Q or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the U.S. Securities and Exchange Commission (the “SEC”) could materially and adversely affect our business, prospects, financial condition, and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report on Form 10-Q, even if such results, changes, or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report on Form 10-Q that modify or impact any of the forward-looking statements contained in this Quarterly Report on Form 10-Q will be deemed to modify or supersede such statements in this Quarterly Report on Form 10-Q.
This Quarterly Report on Form 10-Q may include market data and certain industry data and forecasts, which we may obtain from internal company surveys, market research, consultant surveys, publicly available information, reports of governmental agencies and industry publications, articles, and surveys. Industry surveys, publications, consultant surveys, and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed. While we believe that such studies and publications are reliable, we have not independently verified market and industry data from third-party sources.
References to Aditxt, Inc.
Throughout this Quarterly Report on Form 10-Q, the “Company,” “Aditxt,” “we,” “us,” and “our” refers to Aditxt, Inc. and “our board of directors” refers to the board of directors of Aditxt, Inc.
iv
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ADITXT, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventory | ||||||||
| Prepaid expenses | ||||||||
| Subscription receivable | ||||||||
| TOTAL CURRENT ASSETS | ||||||||
| Fixed assets, net | ||||||||
| Intangible assets, net | ||||||||
| Deposits | ||||||||
| Right of use asset - long term | ||||||||
| Investment in Evofem | ||||||||
| Deposit on acquisition | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Notes payable - related party | ||||||||
| Notes payable, net of discount | ||||||||
| Financing on fixed assets | ||||||||
| Deferred rent | ||||||||
| Lease liability - current | ||||||||
| TOTAL CURRENT LIABILITIES | ||||||||
| Settlement liability | ||||||||
| Lease liability - long term | ||||||||
| Derivative liability | ||||||||
| TOTAL LIABILITIES | ||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred stock, $ | ||||||||
| Series A-1 Convertible Preferred stock, $ | ||||||||
| Series B Preferred stock, $ | ||||||||
| Series B-1 Convertible Preferred stock, $ | ||||||||
| Series B-2 Convertible Preferred stock, $ | ||||||||
| Series C Preferred stock, $ | ||||||||
| Series C-1 Convertible Preferred Stock, $ | ||||||||
| Series D-1 Preferred stock, $ | ||||||||
| Common stock, $ | ||||||||
| Treasury stock, | ( | ) | ( | ) | ||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL ADITXT, INC. STOCKHOLDERS’ EQUITY | ||||||||
| NON-CONTROLLING INTEREST | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
See accompanying notes to the consolidated financial statements.
1
ADITXT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
| September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | |||||||||||||
| REVENUE | ||||||||||||||||
| Sales | $ | $ | $ | $ | ||||||||||||
| Cost of goods sold | ||||||||||||||||
| Gross profit (loss) | ( | ) | ( | ) | ||||||||||||
| OPERATING EXPENSES | ||||||||||||||||
| General and administrative expenses $ | ||||||||||||||||
| Research and development $ | ||||||||||||||||
| Sales and marketing $ | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| NET LOSS FROM OPERATIONS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest income | ||||||||||||||||
| Amortization of debt discount | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss on note exchange agreement | ( | ) | ||||||||||||||
| Total other expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax provision | ||||||||||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Implied Dividends | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST | ( | ) | ( | ) | ||||||||||||
| NET LOSS ATTRIBUTABLE TO ADITXT, INC. & SUBSIDIARIES | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share - basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average number of shares outstanding during the period - basic and diluted | ||||||||||||||||
See accompanying notes to the consolidated financial statements.
2
ADITXT, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(unaudited)
| Preferred A-1 Shares | Preferred A-1 Shares Par | Preferred B-1 Shares | Preferred B-1 Shares Par | Preferred B-2 Shares | Preferred B-2 Shares Par | Preferred C-1 Shares | Preferred C-1 Shares Par | Preferred D-1 Shares | Preferred D-1 Shares Par | Common Shares Outstanding | Common Shares Par | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Non- Controlling Interest | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance December 31, 2023 | $ | - | $ | $ | - | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock option compensation | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MDNA asset purchase | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brain asset purchase | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares for settlement | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance March 31, 2024 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock option compensation | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restricted stock unit compensation | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares for offering, net of issuance costs | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares for debt issuance costs | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Modification of warrants | - | - | - | - | - | - | - | - | - | - | - | - | - | ( | ) | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance June 30, 2024 (unaudited) | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Restricted stock unit compensation | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares for registered direct offering, net of issuance costs | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares under ELOC, net of issuance costs | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exchange of prefunded and common stock warrants for Series C-1 Convertible Preferred Stock | - | - | - | - | - | ( | ) | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Liquidation damages | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion of Series A-1 Convertible Preferred stock | ( | ) | - | - | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion of Series B-1 Convertible Preferred stock | - | ( | ) | ( | ) | - | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exercise of warrants | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of warrants as debt issuance costs | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Modifications of warrants as debt issuance costs | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Modifications of warrants | - | - | - | - | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative liability from conversion feature on preferred stock | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rounding from reverse stock split | - | - | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance September 30, 2024 (unaudited) | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ |
| ||||||||||||||||||||||||||||||||||||||||||||||||||
See accompanying notes to the consolidated financial statements.
3
ADITXT, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(unaudited)
| Preferred Shares Outstanding | Preferred Shares Par | Preferred
B Shares Outstanding | Preferred
B Shares Par | Preferred
C Shares Par | Preferred B-2 Shares Par | Common Shares Outstanding | Common Shares Par | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Non- Controlling Interest | Total Stockholders’ Equity (Deficit) | ||||||||||||||||||||||||||||||||||||||||
| Balance December 31, 2022 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Stock option and warrant compensation | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||
| Restricted stock unit compensation | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares for vested restricted stock units | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||
| Sale of common stock | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares for services | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Balance March 31, 2023 | ( | ) | ( | ) | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock option and warrant compensation | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||
| Restricted stock unit compensation | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares for vested restricted stock units | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||
| Warrants issued for cash, net of issuance costs | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||
| Exercise of warrants | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Balance June 30, 2023 | - | - | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||
| Stock option compensation | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||
| Restricted stock unit compensation | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares for vested restricted stock units | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||
| Sale of Series C Preferred shares to related party | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares for debt issuance costs | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of warrants for offering, net of issuance costs | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||
| Exercise of warrants | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||
| Rounding from reverse stock split | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Modification of warrants | - | - | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||
| Redemption of Series C Preferred shares to related party | - | - | ( | ) | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | </ | |||||||||||||||||||||||||||||||||||||||||||||||