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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2024

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _______ to _______

 

Commission file number: 000-55413

 

Cell Source, Inc.

 

(Exact name of registrant as specified in its charter)

 

Nevada   32-0379665

(State or other jurisdiction

of incorporation or organization)

  

(I.R.S. Employer

Identification No.)

 

57 West 57th Street, Suite 400

New York, NY 10019

(Address of principal executive offices)

 

(646) 416-7896

(Issuer’s telephone number)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading symbol(s)   Name of each exchange on which registered
None   N/A   N/A

 

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. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an 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. (Check one):

 

Large accelerated filer ☐ Accelerated filer ☐
Non-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 news 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 43,468,184 shares of $0.001 par value common stock outstanding.

 

 

 

 
 

 

CELL SOURCE, INC.

 

FORM 10-Q

 

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

 

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION  
   
Item 1. Financial Statements. 3
   
Condensed Consolidated Balance Sheets as of September 30, 2024 (Unaudited) and December 31, 2023 3
   
Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023 4
   
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficiency for the Three and Nine Months Ended September 30, 2024 and 2023 5
   
Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023 7
   
Notes to Unaudited Condensed Consolidated Financial Statements 8
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 14
   
Item 3. Quantitative and Qualitative Disclosures About Market Risk. 17
   
Item 4. Controls and Procedures. 17
   
PART II - OTHER INFORMATION  
   
Item 1. Legal Proceedings. 18
   
Item 1A. Risk Factors. 18
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 18
   
Item 3. Defaults Upon Senior Securities. 18
   
Item 4. Mine Safety Disclosures. 18
   
Item 5. Other Information. 18
   
Item 6. Exhibits. 19
   
SIGNATURES 20

 

2
 

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

CELL SOURCE, INC.

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   September 30,   December 31, 
   2024   2023 
   (Unaudited)     
Assets          
Current Assets:          
Cash  $22,992   $22,203 
Prepaid expenses   241,125    160,750 
Other current assets   543    12,218 
Total Assets  $264,660   $195,171 
           
Liabilities and Stockholders’ Deficiency          
           
Current Liabilities:          
Accounts payable  $2,036,128   $1,467,052 
Accrued expenses   1,153,100    1,225,195 
Accrued expenses - related party   188,000    144,500 
Accrued interest   1,070,144    939,549 
Accrued interest - related parties   2,065,948    1,480,117 
Accrued compensation   1,048,592    960,554 
Notes payable, net of debt discount of $42,259 and $776 as of September 30, 2024 and December 31, 2023, respectively   932,584    710,317 
Notes payable - related parties, net of debt discount of $42,259 and $0 as of September 30, 2024 and December 31, 2023, respectively   401,491    150,000 
Convertible notes payable, net of debt discount of $9,188 and $16,179 as of September 30, 2024 and December 31, 2023, respectively   985,812    1,078,821 
Convertible notes payable - related parties   7,461,708    7,315,036 
Derivative liabilities   609,207    33,000 
Derivative liabilities - related party   178,064    - 
Financing liability   314,985    42,033 
Advances payable   194,375    135,000 
Advances payable - related party   200,000    100,000 
Accrued dividend payable   365,078    25,540 
Total Liabilities   19,205,216    15,806,714 
           
Commitments and contingencies (Note 9)   -     -  
           
Stockholders’ Deficiency:          
Convertible Preferred Stock, $0.001 par value, 10,000,000 shares authorized;          
Series A Convertible Preferred Stock, 1,350,000 shares designated, 1,342,195 shares issued and outstanding as of September 30, 2024 and December 31, 2023; liquidation preference of $10,294,818 and $10,066,463 as of September 30, 2024 and December 31, 2023, respectively   1,342    1,342 
Series B Convertible Preferred Stock, 2,000,000 shares designated, 210,132 and 106,668 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively; liquidation preference of $1,628,150 and $806,805 as of September 30, 2024 and December 31, 2023, respectively   210    107 
Series C Convertible Preferred Stock, 1,000,000 shares designated, 550,815 and 537,482 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively; liquidation preference of $4,214,414 and $4,049,861 as of September 30, 2024 and December 31, 2023, respectively   550    537 
Common Stock, $0.001 par value, 200,000,000 shares authorized; 43,253,897 and 39,830,802 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively   43,254    39,831 
Additional paid-in capital   26,862,811    26,014,028 
Accumulated deficit   (45,848,723)   (41,667,388)
Total Stockholders’ Deficiency   (18,940,556)   (15,611,543)
Total Liabilities and Stockholders’ Deficiency  $264,660   $195,171 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

3
 

 

CELL SOURCE, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

(Unaudited)

 

   2024   2023   2024   2023 
   For the Three Months Ended
September 30,		   For the Nine Months Ended
September 30,		 
   2024   2023   2024   2023 
                 
Operating Expenses:                    
Research and development  $346,357   $500,005   $1,493,581   $1,175,093 
Research and development - related party   14,500    14,500    43,500    43,500 
General and administrative   470,768    480,875    1,626,352    2,097,801 
Total Operating Expenses   831,625    995,380    3,163,433    3,316,394 
Loss From Operations   (831,625)   (995,380)   (3,163,433)   (3,316,394)
                     
Other (Expense) Income:                    
Interest expense   (95,865)   (62,463)   (136,213)   (138,937)
Interest expense - related parties   (260,921)   (199,628)   (594,326)   (496,206)
Interest expense - amortization of debt discount   (74,718)   (29,912)   (112,218)   (107,487)
Interest expense - amortization of debt discount - related parties   (73,355)   (50,755)   (111,434)   (254,205)
Change in fair value of derivative liabilities   (62,851)   -    (50,034)   - 
Change in fair value of derivative liabilities - related party   (35,699)   -    (31,570)   - 
Gain on extinguishment of note payable   17,893    -    17,893    41,920 
Total Other Expense   (585,516)   (342,758)   (1,017,902)   (954,915)
Net Loss   (1,417,141)   (1,338,138)   (4,181,335)   (4,271,309)
Dividend attributable to Series A, B, and C preferred stockholders   (350,984)   (309,150)   (1,017,520)   (907,516)
Net Loss Applicable to Common Stockholders  $(1,768,125)  $(1,647,288)  $(5,198,855)  $(5,178,825)
                     
Net Loss Per Common Share - Basic and Diluted  $(0.04)  $(0.04)  $(0.13)  $(0.14)
                     
Weighted Average Common Shares Outstanding -                    
Basic and Diluted   42,426,449    38,191,731    41,321,759    37,492,478 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

4
 

 

CELL SOURCE, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIENCY

 

(Unaudited)

 

   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Deficiency 
   FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 
   Convertible Preferred   Convertible Preferred   Convertible Preferred           Additional       Total 
   Stock - Series A   Stock - Series B   Stock - Series C   Common Stock   Paid-In   Accumulated   Stockholders’ 
   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Deficiency 
                                             
Balance, January 1, 2024   1,342,195   $1,342    106,668   $107    537,482   $537    39,830,802   $39,831   $26,014,028   $(41,667,388)  $     (15,611,543)
                                                        
Conversion of convertible notes payable and accrued interest into Series C Convertible Preferred Stock and common stock   -    -    -    -    13,333    13    6,546    6    104,891    -    104,910 
                                                        
Series A, B and C Convertible Preferred Stock dividends:                                                       
Accrual of earned dividends   -    -    -    -    -    -    -    -    (326,665)   -    (326,665)
                                                        
Common stock issued in satisfaction of accrued compensation   -    -    -    -    -    -    180,000    180    44,820    -    45,000 
                                                        
Issuance of Series B Convertible Preferred Stock for cash, net   -    -    3,333    3    -    -    -    -    19,897    -    19,900 
                                                        
Common stock issued in satisfaction of convertible note payable interest   -    -    -    -    -    -    2,000    2    518    -    520 
                                                        
Stock-based compensation:                                                       
Warrants   -    -    -    -    -    -    -    -    29,141    -    29,141 
Common stock   -    -    -    -    -    -    1,000,000    1,000    259,000    -    260,000 
                                                        
Net loss   -    -    -    -    -    -    -    -    -    (1,275,406)   (1,275,406)
                                                        
Balance, March 31, 2024   1,342,195   $1,342    110,001   $110    550,815   $550    41,019,348   $41,019   $26,145,630   $(42,942,794)  $(16,754,143)
                                                        
Series A, B and C Convertible Preferred Stock dividends:                                                       
Accrual of earned dividends   -    -    -    -    -    -    -    -    (339,871)   -    (339,871)
Payment of dividends in kind   -    -    -    -    -    -    904,049    904    677,078    -    677,982 
                                                        
Issuance of Series B Convertible Preferred Stock for cash, net   -    -    96,798    97    -    -    -    -    571,704    -    571,801 
                                                        
Common stock issued in satisfaction of convertible note payable interest   -    -    -    -    -    -    18,000    18    4,662    -    4,680 
                                                        
Stock-based compensation:                                                       
Warrants   -    -    -    -    -    -    -    -    8,838    -    8,838 
                                                        
Net loss   -    -    -    -    -    -    -    -    -    (1,488,788)   (1,488,788)
                                                        
Balance, June 30, 2024   1,342,195   $1,342    206,799   $207    550,815   $550    41,941,397   $41,941   $27,068,041   $(44,431,582)  $(17,319,501)
                                                        
Series A, B and C Convertible Preferred Stock dividends:                                                       
Accrual of earned dividends   -    -    -    -    -    -    -    -    (350,984)   -    (350,984)
                                                        
Issuance of Series B Convertible Preferred Stock for cash, net   -    -    3,333    3    -    -    -    -    17,797    -    17,800 
                                                        
Common stock issued for cash   -    -    -    -    -    -    1,312,500    1,313    126,857    -    128,170 
                                                        
Warrant modification expense   -    -    -    -    -    -    -    -    1,100    -    1,100 
                                                        
Net loss   -    -    -    -    -    -    -    -    -    (1,417,141)   (1,417,141)
                                                        
Balance, September 30, 2024   1,342,195   $1,342    210,132   $210    550,815   $550    43,253,897   $43,254   $26,862,811   $(45,848,723)  $(18,940,556)

 

5

 

 

   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Deficiency 
   FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 
   Convertible Preferred   Convertible Preferred           Additional       Total 
   Stock - Series A   Stock - Series C   Common Stock  

 Paid-In

   Accumulated  

Stockholders’

 
   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Deficiency 
                                     
Balance, January 1, 2023   1,342,195   $1,342    502,776   $503    36,081,758   $36,082   $23,674,354   $(36,346,176)  $     (12,633,895)