Silo Pharma Inc
For the period ended Sep 30, 2024. Filed Nov 12, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 12, 2024
SILO$1.33+3.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-13.
0001213900-24-068296
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001213900-24-096841
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 125 previous paragraphs and 69 current paragraphs.
39 unchanged; 21 reworded; 8 added; 60 removed; 5 previous and 1 current paragraphs rearranged.
Tables are not compared: 15 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
Throughout this report, unless otherwise designated, the terms “we,” “us,” “our,” the “Company,” and “Silo,” refer to Silo Pharma, Inc., a Nevada corporation, and its subsidiaries on a consolidated basis
Current report
For the three months ended September 30, 2024 and 2023, compensation expense amounted to $169,736 and $379,294, respectively, a decrease of $209,558, or 55.3%. During the three months ended September 30, 2023, we paid a bonus of $200,000 as compared to $0 during the three months ended September 30, 2024.
Current report
For the nine months ended September 30, 2024 and 2023, compensation expense was $511,463 and $710,737, respectively, a decrease of $199,274, or 28.0%. During the nine months ended September 30, 2023, we paid a bonus of $200,000 as compared to $0 during the nine months ended September 30, 2024.
Current report
For the three months ended September 30, 2024 and 2023, we incurred research and development expense of $517,548 and $174,495, respectively, an increase of $343,053, or 196.6%.
Current report
For the nine months ended September 30, 2024 and 2023, we incurred research and development expense of $1,292,437 and $508,127, respectively, an increase of $784,310, or 154.4%.
Current report
For the three months ended September 30, 2024 and 2023, insurance expense was $21,100 and $25,915, respectively, a decrease of $4,815, or 18.6%. For the nine months ended September 30, 2024 and 2023, insurance expense was $63,905 and $72,811, respectively, a decrease of $8,906, or 12.2%.
Current report
For the nine months ended September 30, 2024 and 2023, selling, general and administrative expenses were $174,281 and $176,162, respectively, a decrease of $1,881 or 1.1%.
Current report
For the three months ended September 30, 2024 and 2023, loss from operations amounted to $1,010,055 and $773,398 respectively, an increase of $236,657, or 30.6%. For the nine months ended September 30, 2024 and 2023, loss from operations amounted to $2,892,342 and $2,691,868, respectively, an increase of $200,474, or 7.4%.
Removed paragraphs (60)
Previous report
Rare Disease Therapeutics
Previous report
We seek to acquire and/or develop intellectual property or technology rights from leading universities and researchers to treat rare diseases, including the use of psychedelic drugs, such as psilocybin, ketamine, and the potential benefits they may have in certain cases involving depression, mental health issues and neurological disorders. We are focused on developing traditional therapeutics and psychedelic medicine. The company concentrates on the development and commercialization of therapies for unmet needs from indications such as depression, post-traumatic stress disorder (“PTSD”), and other rare neurological disorders. Our mission is to identify assets to license and fund the research which we believe will be transformative to the well-being of patients and the health care industry.
Previous report
Psilocybin is considered a serotonergic hallucinogen and is an active ingredient in some species of mushrooms. Recent industry studies using psychedelics, such as psilocybin, have been promising, and we believe there is a large unmet need with many people suffering from depression, mental health issues and neurological disorders. While classified as a Schedule I substance under the Controlled Substances Act (“CSA”), there is an accumulating body of evidence that psilocybin may have beneficial effects on depression and other mental health conditions. Therefore, the U.S. Food and Drug Administration (“FDA”) and U.S. Drug Enforcement Agency (“DEA”) have permitted the use of psilocybin in clinical studies for the treatment of a range of psychiatric conditions.
Previous report
The potential of psilocybin therapy in mental health conditions has been demonstrated in a number of academic-sponsored studies over the last decade. In these early studies, it was observed that psilocybin therapy provided rapid reductions in depression symptoms after a single high dose, with antidepressant effects lasting for up to at least six months for a number of patients. These studies assessed symptoms related to depression and anxiety through a number of widely used and validated scales. The data generated by these studies suggest that psilocybin is generally well-tolerated and may have the potential to treat depression when administered with psychological support.
Previous report
We have engaged in discussions with a number of world-renowned educational institutions and advisors regarding potential opportunities and have formed a scientific advisory board that is intended to help advise management regarding potential acquisition and development of products.
Previous report
In addition, as more fully described below, we have entered into a license agreement with the University of Maryland, Baltimore, and developing a Ketamine polymer implant. In addition, we have recently entered into a sponsored research agreement with Columbia University pursuant to which we have been granted an option to license certain patents and inventions relating to the treatment of Alzheimer’s disease and stress-induced affective disorders using Ketamine in combination with certain other compounds.
Previous report
We plan to actively pursue the acquisition and/or development of intellectual property or technology rights to treat rare diseases, and to ultimately expand our business to focus on this new line of business.
Previous report
Product Candidates
Previous report
We are currently focusing on four product candidates: (i) SPC-15 for treatment of depression disorders; (ii) SP-26 for treatments of chronic pain; (iii)SPC-14 for the treatment of Alzheimer’s disease and (iv) SPU-16 for the treatment of CNS disorders with an initial indication for multiple sclerosis.
Previous report
SPC-15
Previous report
On October 1, 2021, the Company entered into a sponsored research agreement with Columbia University pursuant to which the Company has been granted an option to license certain assets currently under development, including assets related to SPC-15 for the treatment of depression disorders. On September 22, 2022, we entered into a First Amendment to Sponsored Research Agreement with Columbia to extend the term of the Columbia Agreement to conduct further research studies, which extension runs through March 31, 2024. On April 11, 2023 the assets under development for which we have the option to license as described above were issued a patent from the U.S. Patent & Trademark Office (USPTO) for “Biomarkers for Efficacy of Prophylactic Treatments Against Stress-Induced Affective Disorders” (US 11,622,948, B2). The Company exercised its option for an exclusive license agreement for SPC-15, a prophylactic treatment for stress-induced affective disorders including anxiety and PTSD pursuant to which the Company will be granted an exclusive license to further develop, manufacture, and commercialize SPC-15 worldwide. pursuant to an exclusive license agreement entered into on July 1, 2024. See “----License Agreements between the Company and Vendor—Exclusive License Agreement with Columbia University”.
Previous report
SPC-15 is a targeted prophylactic therapeutic composition for the treatment and prevention for stress-induced affective disorders including PTSD. The treatment predicts levels of severity or progression of such disorders and their metabolomic biomarkers’ response to pharmacological treatments. We intend to develop SPC-15 under the Section 505(b)(2) regulatory pathway of the FDA rules. Section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act (“FDCA”) was enacted to enable sponsors to seek New Drug Application (“NDA”) approval for novel repurposed drugs without the need for such sponsors to undertake time consuming and expensive pre-clinical safety studies and Phase 1 safety studies. Proceeding under this regulatory pathway, we will be able to rely upon publicly available data with respect to our active ingredient in our NDA submission to the FDA for marketing approval.
Previous report
On November 15, 2023, the Company entered an exclusive license agreement with Medspray Pharma BV for its proprietary patented soft mist nasal spray technology, as the delivery mechanism for SPC-15, which agreement has an effective date of October 31, 2023. Preclinical and formulation studies were completed in the first half of 2024 and on June 4, 2024 the Company submitted a pre-Investigational New Drug (pre-IND) briefing package and meeting request to the U.S. Food and Drug Administration (FDA) for SPC-15, Silo’s intranasal prophylactic treatment for post-traumatic stress disorder (PTSD) and stress-induced anxiety disorder.
Previous report
SP-26
Previous report
In March 2023, the Company filed a provisional patent application with the USPTO to use SP-26 for treatment of chronic pain, including fibromyalgia. Fibromyalgia is a chronic condition causing pain to the connective tissues through the body including muscles, ligaments, and tendons. Musculoskeletal pain is often accompanied by sleep difficulties, fatigue, mood disorders, and problems with memory and concentration. Fibromyalgia affects about 4 million American adults, or about 2% of the adult population.
Previous report
We intend to develop SP-26 following the Section 505(b)(2) regulatory pathway of the FDA rules. Section 505(b)(2) of the FDCA was enacted to enable sponsors to seek NDA approval for novel repurposed drugs without the need for such sponsors to undertake time consuming and expensive pre-clinical safety studies and Phase 1 safety studies. Proceeding under this regulatory pathway, we will be able to rely upon publicly available data with respect to our active ingredient in our NDA submission to the FDA for marketing approval.
Previous report
SPC-14
Previous report
On October 1, 2021, the Company entered into a sponsored research agreement with Columbia University (“Columbia”) pursuant to which Columbia shall conduct two different studies related to the use of SPC-14 for the treatment of Alzheimer’s. See “Investigator-Sponsored Study Agreements between the Company and Vendors---Sponsored Research Agreement with Columbia University for the Study of Ketamine in Combination with Other Drugs for Treatment of Alzheimer’s and Depression Disorders.” for additional details. In addition, Company has been granted an option to license certain assets currently under development, including SPC-14 for the treatment of Alzheimer’s disease. The Company exercised its option for an exclusive license agreement for SPC-15, a prophylactic treatment for stress-induced affective disorders including anxiety and PTSD pursuant to which the Company was granted an exclusive license to further develop, manufacture, and commercialize SPC-15 worldwide on July 1, 2024. See “----License Agreements between the Company and Vendor—Exclusive License Agreement with Columbia University.”.
Previous report
SPC-14 is a novel drug combining two approved therapeutics, so we intend to develop SPC-14 following the Section 505(b)(2) regulatory pathway of the FDA rules. Section 505(b)(2) of the FDCA was enacted to enable sponsors to seek NDA approval for novel repurposed drugs without the need for such sponsors to undertake time consuming and expensive pre-clinical safety studies and Phase 1 safety studies. Proceeding under this regulatory pathway, we will be able to rely upon publicly available data with respect to our active ingredient in our NDA submission to the FDA for marketing approval.
Previous report
On October 13, 2022, the Company extended the term of the sponsored research agreement with Columbia to conduct further research studies into the mechanism of action of SPC-14 in the treatment of Alzheimer’s disease. We expect the results from further preclinical studies in 2024.
Previous report
SPU-16
Previous report
On February 12, 2021, we entered into a Master License Agreement (the “UMB License Agreement”) with the University of Maryland, Baltimore (“UMB”) pursuant to which UMB granted us an exclusive, worldwide, sublicensable, royalty-bearing license to certain intellectual property (i) to make, have made, use, sell, offer to sell, and import certain licensed products and (ii) to use the invention titled “Central nervous system-homing peptides in vivo and their use for the investigation and treatment of multiple sclerosis and other neuroinflammatory pathology,” or SPU-16. See “License Agreements between the Company and Vendors--Vendor License Agreement with the University of Maryland, Baltimore for CNS Homing Peptide” for additional details. On April 11, 2023 certain intellectual property under the UMB License Agreement described above were issued a patent from the U.S. Patent & Trademark Office (USPTO) for “Peptide-Targeted Liposomal Delivery For Treatment, Diagnosis, and Imaging of Diseases and Disorders” (US 11,766,403, B2).
Previous report
SPU-16 is a novel peptide homing specifically to inflamed CNS areas. It may be used to diagnose neuroinflammation in patients, and targeted delivery of drugs into the spinal cord. The initial indication is for multiple sclerosis (MS). The peptides have been tested in the EAE mouse model of human MS, where they show homing specifically to inflamed CNS areas.
Previous report
Product Development Pipeline
Previous report
The following table summarizes our product development pipeline.
Previous report
Vendor License Agreement with the University of Maryland, Baltimore for CNS Homing Peptide
Previous report
On February 12, 2021, we entered into a Master License Agreement (the “UMB License Agreement”) with the University of Maryland, Baltimore (“UMB”) pursuant to which UMB granted us an exclusive, worldwide, sublicensable, royalty-bearing license to certain intellectual property (i) to make, have made, use, sell, offer to sell, and import certain licensed products and (ii) to use the invention titled, “Central nervous system-homing peptides in vivo and their use for the investigation and treatment of multiple sclerosis and other neuroinflammatory pathology” (the “Invention”) and UMB’s confidential information to develop and perform certain licensed processes for the therapeutic treatment of neuroinflammatory disease. The term of the License Agreement shall commence on the UMB Effective Date and shall continue until the latest of (i) ten years from the date of First Commercial Sale (as defined in the Sublicense Agreement) of the Licensed Product in such country and (ii) the date of expiration of the last to expire claim of the Patent Rights (as defined in the UMB License Agreement) covering such Licensed Product in such country, or (iii) the expiration of data protection, new chemical entity, orphan drug exclusivity, regulatory exclusivity, or other legally enforceable market exclusivity, if applicable, unless terminated earlier pursuant to the terms of the agreement. Pursuant to the UMB License Agreement, we agreed to pay UMB (i) a license fee of $75,000, (ii) certain event-based milestone payments, (iii) royalty payments, depending on net revenues, (iv) minimum royalty payments, and (v) a tiered percentage of sublicense income. The UMB License Agreement will remain in effect until the later of: (a) the last patent covered under the UMB License Agreement expires, (b) the expiration of data protection, new chemical entity, orphan drug exclusivity, regulatory exclusivity, or other legally enforceable market exclusivity, if applicable, or (c) ten years after the first commercial sale of a licensed product in that country, unless earlier terminated in accordance with the provisions of the UMB License Agreement. The term of the UMB License Agreement shall expire 15 years after the effective date in which (a) there were never any patent rights, (b) there was never any data protection, new chemical entity, orphan drug exclusivity, regulatory exclusivity, or other legally enforceable market exclusivity or (c) there was never a first commercial sale of a licensed product.
Previous report
As described below, the Company has entered into an investigator sponsored research agreement with UMB related to a clinical study to examine a novel peptide-guided drug delivery approach for the treatment of Multiple Sclerosis.
Previous report
Commercial Evaluation License and Option Agreement with UMB for Joint Homing Peptide
Previous report
Effective as of February 26, 2021, the Company, through its wholly-subsidiary, Silo Pharma, Inc., and University of Maryland, Baltimore (“UMB”), entered into a commercial evaluation license and option agreement (“License Agreement”), which granted the Company an exclusive, non-sublicensable, non-transferable license to with respect to the exploration of the potential use of joint-homing peptides for use in the investigation and treatment of arthritogenic processes. The License Agreement also granted the Company an exclusive option to negotiate and obtain an exclusive, sublicensable, royalty-bearing license (“Exclusive Option”) with respect to the subject technology. The License Agreement had a term of six months from the effective date. Both parties could have terminated the License Agreement within thirty days by giving a written notice.
Previous report
On July 6, 2021, the Company entered into a First Amendment Agreement (“Amended License Agreement”) with UMB to extend the term of the original License Agreement by an additional six months such that the Amended License Agreement was effective until February 25, 2022 however, if the Company exercises the Exclusive Option, the License Agreement shall expire at the end of the negotiation period (as defined in the License Agreement) or upon execution of a master license agreement, whichever occurs first. The Company paid a license fee of $10,000 to UMB in March 2021 pursuant to the License Agreement, which was expensed, since the Company could not conclude that such costs would be recoverable for this early-stage venture.
Previous report
On January 28, 2022, the Company and UMB entered into a second amendment to the License Agreement dated February 26, 2021 (“Second Amendment”). The Second Amendment extended the term of the License Agreement until December 31, 2022. However, if the Company exercises the Exclusive Option, the License Agreement shall expire at the end of the negotiation period (as defined in the License Agreement) or upon execution of a master license agreement, whichever occurs first.
Previous report
On June 22, 2022, the Company and UMB entered into a third amendment to the License Agreement dated February 26, 2021 under which UMB agreed, to expand the scope of the license granted in the CELA to add additional Patent Rights with respect to an invention generally known as “Peptide-Targeted Liposomal Delivery for Treatment Diagnosis, and Imaging of Diseases and Disorders.” On December 16, 2022, the Company and UMB entered into a fourth amendment to License Agreement (the “Fourth Amendment”) dated February 26, 2021 to extend the term of the License Agreement until March 31, 2023. In addition, the parties agreed in the Fourth Amendment to allow the Company to extend the term of the License Agreement to June 30, 2023 by paying UMB a fee of $1,000 on or before February 28, 2023. This fee was paid and thus the term of the License Agreement was extended to June 30, 2023. We let this license expire by its terms on December 31, 2023.
Previous report
Exclusive License Agreement with the Trustees of Columbia University in the City of New York
Previous report
On July 1, 2024, the Company entered into an exclusive license agreement (the “Columbia License Agreement”) with Columbia University (“Columbia”) with an effective date of June 28, 2024 (the “Effective Date”) and pursuant to which the Company has been granted exclusive rights to certain patents and technical information to develop, manufacture and commercialize Products (as defined in the Columbia License Agreement), including therapies for stress-induced affective disorders and other conditions. The term of the Columbia License Agreement shall commence on the Effective Date and shall continue on a country-by-country and product-by-product basis until the latest of: (a) the date of expiration of the last to expire of the issued Patents (as defined in the Columbia License Agreement), (b) 20 years after the first bona fide commercial sale of the Product in the country in question, or (c) expiration of any market exclusivity period granted by a regulatory agency for a Product in the country in question
Previous report
Joint Venture Agreement with Zylö Therapeutics, Inc. for Z-pod™ Technology
Previous report
On April 22, 2021, the Company entered into a Joint Venture Agreement with Zylö Therapeutics, Inc. (“ZTI”) pursuant to which the parties agreed to form a joint venture entity, to be named Ketamine Joint Venture, LLC, to, among other things, focus on the clinical development of ketamine using ZTI’s Z-pod™ technology. Pursuant to the Joint Venture Agreement, the Company shall act as the manager of the Joint Venture. The Venture shall terminate if the development program does not meet certain specifications and milestones as set forth in the Joint Venture Agreement within 30 days of the date set forth in the Joint Venture Agreement. Notwithstanding the foregoing, the Manager may, in its sole discretion, terminate the Venture at any time.
Previous report
Pursuant to the terms of the Joint Venture Agreement, (A) the Company shall contribute (1) $225,000 and (2) its expertise and the expertise of its science advisory board and (B) ZTI shall contribute (1) certain rights to certain of its patented technology as set forth in the JV Agreement, (2) a license to the know-how and trade secrets with respect to its Z-pod™ technology for the loading and release of ketamine, (3) ketamine to be used for clinical purposes, (4) reasonable use of its facilities and permits and (5) its expertise and know-how. Pursuant to the Joint Venture Agreement, 51% of the interest in the Joint Venture shall initially be owned by the Company and 49% of the interest in the Joint Venture shall initially be owned by ZTI, subject to adjustment in the event of additional contributions by either party. Notwithstanding the foregoing, in no event shall either party own more than 60% of the interest in the Joint Venture. As of June 30, 2024 and as of the current date of this Annual Report, the joint venture entity has not been formed yet.
Previous report
Furthermore, pursuant to the terms of the JV Agreement, ZTI shall grant the Joint Venture a sublicense pursuant to its license agreement (the “License Agreement”) with Albert Einstein College of Medicine dated November 27, 2017, in the event that the Company or a third party makes a request indicating that the patented technology (the “Patented Technology”) licensed to ZTI pursuant to the License Agreement is needed to advance the development of the Joint Venture or it is contemplated or determined that the Patented Technology will be sold. Furthermore, pursuant to the JV Agreement, ZTI granted the Company an exclusive option to enter into a separate joint venture for the clinical development of psilocybin using ZTI’s Z-pod™ technology on the same terms and conditions set forth in the JV Agreement, which option shall expire 24 months after the JV Effective Date. We do not intend to continue with Zylo and have entered into an agreement to develop a polymer implant for dosage and time release of Ketamine for chronic pain and Fibromyalgia.Exclusive License Agreement between Medspray Pharma BV and the Company
Previous report
On November 15, 2023, we entered into an Exclusive License Agreement (the “Medspray License Agreement”) with Medspray Pharma BV (“Medspray”) pursuant to which Medspray granted us an exclusive, non-revocable, worldwide royalty bearing license for Medspray’s proprietary patented soft mist nasal spray technology for marketing, promotion, sale and distribution of the products licensed by Medspray to us under the Medspray License Agreement. The Medspray License Agreement has an effective date of October 31, 2023 and expires on the earlier of (i) termination of the Medspray License Agreement or expiry of all Medspray license rights in the United States, Germany, United Kingdom, Spain, Italy and France. In consideration of the exclusive rights granted by Medspray to us, we agreed to pay Medspray a royalty on a quarterly basis equal to 5% of net sales. The term of the agreement commences on the effective date and continues until the earlier of (i) expiration of the last to expire of Medspray’s patent rights or (ii) December 31, 2023 (the “Initial Term”) at which time, the Medspray License Agreement will automatically renew for a successive period of three (3) years, unless terminated by either party upon one year prior written notice prior to the end of any term; provided, however, the Medspray may terminate the Medspray License Agreement immediately if fail to have any licensed product under the Medspray License Agreement registered with the FDA or EMA by July 1, 2028 or has filed to reach the point of first sale of any licensed product under the Medspray License Agreement by July 1, 2028.
Showing the first 40 of 60 passages. Open the source sections for the rest.
Reworded paragraphs (21)
Previous wording
We are a developmental stage biopharmaceutical company developing novel therapeutics that address underserved conditions including PTSD, stress-induced anxiety disorders, fibromyalgia, and central nervous system (CNS) diseases. We are focused on developing novel therapies that include conventional drugs and psychedelic formulations. The Company’s lead program, SPC-15, is an intranasal drug targeting PTSD and stress-induced anxiety disorders. SP-26 is a time-release ketamine-based loaded implant for fibromyalgia and chronic pain relief. Silo’s two preclinical programs are SPC-14, an intranasal compound for the treatment of Alzheimer’s disease, and SPU-16, a CNS-homing peptide targeting the central nervous system with initial research indication in multiple sclerosis (MS).
Current wording
We are a developmental stage biopharmaceutical company developing novel therapeutics that address under-served conditions using therapies that include conventional drugs and psychedelic formulations. We are focused on developing (i) an intranasal drug targeting PTSD and stress-induced anxiety disorders (SPC-15); (ii) a time-release ketamine-based loaded implant for fibromyalgia and chronic pain relief (SP-26); (iii) an intranasal com-pound for the treatment of Alzheimer’s disease (SPC-14); and (iv) a CNS-homing peptide targeting the central nervous system in multiple sclerosis (SPU-16).
Previous wording
Comparison of Our Results of Operations for the Three and Six Months Ended June 30, 2024 and 2023
Current wording
Comparison of Our Results of Operations for the Three and Nine Months Ended September 30, 2024 and 2023
Previous wording
The following table summarizes the results of operations for the three and six months ended June 30, 2024 and 2023 and were based primarily on the comparative unaudited consolidated financial statements, footnotes and related information for the periods identified and should be read in conjunction with the unaudited consolidated financial statements and the notes to those statements that are included elsewhere in this report.
Current wording
The following table summarizes the results of operations for the three and nine months ended September 30, 2024 and 2023 and were based primarily on the comparative unaudited consolidated financial statements, footnotes and related information for the periods identified and should be read in conjunction with the unaudited consolidated financial statements and the notes to those statements that are included elsewhere in this report.
Previous wording
During the three and six months ended June 30, 2024 and 2023, we generated minimal revenues from operations. For the three months ended June 30, 2024 and 2023, revenues amounted to $18,025 and $18,025, respectively. For the six months ended June 30, 2024 and 2023, revenues amounted to $36,051 and $36,051, respectively. Such revenues are related to the Aikido License and Sublicense Agreement and are recognized over the term of the related license agreement.
Current wording
During the three and nine months ended September 30, 2024 and 2023, we generated minimal revenues from operations. For the three months ended September 30, 2024 and 2023, revenues amounted to $18,025 and $18,025, respectively. For the nine months ended September 30, 2024 and 2023, revenues amounted to $54,076 and $54,076, respectively. Such revenues are deferred revenues received under the Aikido License and Sublicense Agreement and are recognized over the estimated 15-year term of the related UMB license agreement.
Previous wording
During the three months ended June 30, 2024 and 2023, cost of revenues amounted to $1,459 and $1,459, respectively. During the six months ended June 30, 2024 and 2023, cost of revenues amounted to $2,919 and $2,919, respectively. Cost of revenues consists of license fees related to the UMB License and Sublicense Agreement, which are being amortized into cost of revenues over the terms of their respective agreement.** **
Current wording
During the three months ended September 30, 2024 and 2023, cost of revenues amounted to $1,459 and $1,459, respectively. During the nine months ended September 30, 2024 and 2023, cost of revenues amounted to $4,378 and $4,378, respectively. Cost of revenues consists of license fees related to the UMB License and Sublicense Agreement, which are being amortized into cost of revenues over the estimated 15-year terms of their respective agreements with Akido and UMB.** **
Previous wording
For the three and six months ended June 30, 2024 and 2023, total operating expenses consisted of the following:
Current wording
For the three and nine months ended September 30, 2024 and 2023, total operating expenses consisted of the following:
Previous wording
For the three months ended June 30, 2024 and 2023, professional fees were $386,465 and $570,295 and, respectively, a decrease of $183,830, or 32.2%. The decrease was primarily attributable to a decrease in legal fees of $173,699, a decrease in other consulting fees of $142,279, and a decrease in stock-based consulting fees of $33,775 related to the amortization of prepaid expense on previously issued shares to consultants for business advisory and strategic planning services, offset by an increase in investor relations of $159,500, and an increase in accounting and auditing fees of $6,423. During the three months ended June 30, 2024, we reimbursed Columbia University $6,673 related to patent related legal fees incurred by them on our behalf. For the six months ended June 30, 2024 and 2023, professional fees were $641,067 and $935,565 and, respectively, a decrease of $294,498, or 31.5%. The decrease was primarily attributable to a decrease in other consulting fees of $244,923, a decrease in legal fees of $147,791, and a decrease in stock-based consulting fees of $67,550 related to the amortization of prepaid expense on previously issued shares to consultants for business advisory and strategic planning services, offset by an increase in investor relations of $156,612, and an increase in accounting and auditing fees of $9,154. During the six months ended June 30, 2024, we reimbursed Columbia University $18,140 related to patent related legal fees incurred by them on our behalf.
Current wording
For the three months ended September 30, 2024 and 2023, professional fees were $258,887 and $338,164 and, respectively, a decrease of $79,277, or 23.4%. The decrease was primarily attributable to a decrease in legal and accounting fees of $24,659, a decrease in other consulting fees of $77,365, and a decrease in stock-based consulting fees of $22,517 related to the amortization of prepaid expense on previously issued shares to consultants for business advisory and strategic planning services, offset by an increase in investor relations of $45,264.
Previous wording
For the three months ended June 30, 2024 and 2023, we incurred research and development expense of $392,824 and $130,719, respectively, an increase of $262,105, or 200.5%. For the six months ended June 30, 2024 and 2023, we incurred research and development expense of $774,889 and $333,632, respectively, an increase of $441,257, or 132.3%. The increase was a result of an increase in research and development costs in connection with the Investigator-sponsored Study Agreement with UCSF, UMB, Columbia University, and other parties.
Current wording
The increase was a result of an increase in research and development costs in connection with the Investigator-sponsored Study Agreement with UCSF, UMB, Columbia University, and other parties.
Previous wording
For the three months ended June 30, 2024 and 2023, insurance expense was $21,101 and $22,251, respectively, a decrease of $1,151, or 5.2%. For the six months ended June 30, 2024 and 2023, insurance expense was $42,805 and $46,896, respectively, a decrease of $4,092, or 8.7%. This decrease was a result of decrease in the cost of renewal of the D&O insurance policy.
Current wording
This decrease was a result of decrease in the cost of renewal of the D&O insurance policy.
Previous wording
For the three months ended June 30, 2024 and 2023, selling, general and administrative expenses were $50,569 and $239,100, respectively, a decrease of $188,528 or 78.8%. The decrease was primarily attributed to a decrease in Delaware franchise taxes of $200,000 resulting from a reincorporation of the Company in Nevada, offset by a net increase in other general and administrative expenses of $11,401. For the six months ended June 30, 2024 and 2023, selling, general and administrative expenses were $114,931 and $304,066, respectively, a decrease of $189,135 or 62.2%. The decrease was primarily attributed to a decrease in Delaware franchise taxes of $214,967 resulting from a reincorporation of the Company in Nevada, offset by a net increase in other general and administrative expenses of $14,363.
Current wording
For the three months ended September 30, 2024 and 2023, selling, general and administrative expenses (income) were $59,350 and $(127,904), respectively, a negative change of $187,254 or 146.4%. The change was primarily attributed to a decrease in Delaware franchise taxes of $166,369 resulting from a reincorporation of the Company in Nevada, offset by a net increase in other general and administrative expenses of $20,885.
Previous wording
The decrease was primarily a result of the changes in operating expenses discussed above.
Current wording
The increases in loss from operations in each of the three and nine month periods ended September 30, 2024 were primarily a result of the changes in operating expenses discussed above.
Previous wording
For the three months ended June 30, 2024 and 2023, other income, net amounted to $70,995 and $102,034, respectively, a decrease of $31,039, or 30.4%. The decrease in other income, net was primarily due to a decrease in interest and dividend income of $32,541, and an increase in foreign currency transaction loss of $2,929, offset by a decrease in net unrealized loss on equity investment of $3,508, and a decrease in net realized loss on short-term investments of $920.
Current wording
For the three months ended September 30, 2024 and 2023, other income, net amounted to $81,241 and $113,238, respectively, a decrease of $31,997, or 28.3%. The decrease in other income, net was primarily due to a decrease in interest and dividend income of $31,238, and an increase in foreign currency transaction loss of $2,618, offset by a decrease in net realized loss on short-term investments of $1,862.
Previous wording
For the six months ended June 30, 2024 and 2023, other income (expense), net amounted to $148,841 and $(877), respectively, a positive change of $149,718, or 17,078.2%. The positive change in other income (expenses), net was primarily due to a decrease in penalty expense of $166,034 which was incurred due to the early termination of a certificate of deposit, a decrease in net unrealized loss on equity investment of $3,118, a decrease in net realized loss on short-term investments of $1,154, offset by an increase in foreign currency transaction loss of $11,624, a decrease in interest and dividend income of $8,753, and an increase in interest expense of $211.
Current wording
For the nine months ended September 30, 2024 and 2023, other income (expense), net amounted to $230,082 and $112,361, respectively, an increase of $117,721, or 104.8%. The increase in other income (expenses), net was primarily due to a decrease in penalty expense of $166,034 which was incurred during the 2023 period due to the early termination of a certificate of deposit, a decrease in net unrealized loss on equity investment of $3,118, and a decrease in net realized loss on short-term investments of $3,016, offset by an increase in foreign currency transaction loss of $14,242, a decrease in interest and dividend income of $39,991, and an increase in interest expense of $214.
Previous wording
For the three months ended June 30, 2024, net loss amounted to $931,779 or $0.31 loss per common share (basic and diluted), as compared to net loss of $1,012,951, or $0.32 loss per common share (basic and diluted) for the three months ended June 30, 2023, a decrease of $81,172, or 8.0%. For the six months ended June 30, 2024, net loss amounted to $1,733,446 or $0.59 loss per common share (basic and diluted), as compared to net loss of $1,919,347, or $0.61 loss per common share (basic and diluted) for the six months ended June 30, 2023, a decrease of $185,901, or 9.7%.
Current wording
For the three months ended September 30, 2024, net loss amounted to $928,814 or $0.22 loss per common share (basic and diluted), as compared to net loss of $660,160, or $(0.21) loss per common share (basic and diluted) for the three months ended September 30, 2023, an increase of $268,654, or 40.7%. For the nine months ended September 30, 2024, net loss amounted to $2,662,260 or $0.78 loss per common share (basic and diluted), as compared to net loss of $2,579,507, or $(0.82) loss per common share (basic and diluted) for the nine months ended September 30, 2023, an increase of $82,753, or 3.2%.
Previous wording
The changes were primarily a result of the changes discussed above.
Current wording
The changes in each of the three and nine month periods ended September 30, 2024 were primarily a result of the changes discussed above.
Previous wording
Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. We had working capital of $6,405,949, $3,102,240 in short-term investments, and $4,506,300 in cash and cash equivalents as of June 30, 2024, and working capital of $6,905,568, $4,140,880 in short-term investments and $3,524,308 in cash and cash equivalents as of December 31, 2023, respectively.
Current wording
Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. We had working capital of $7,216,955, $3,154,443 in short-term investments, and $4,860,890 in cash and cash equivalents as of September 30, 2024, and working capital of $6,905,568, $4,140,880 in short-term investments and $3,524,308 in cash and cash equivalents as of December 31, 2023, respectively.
Previous wording
The decrease in working capital of $499,619 was primarily attributable to an increase in current liabilities of $547,289 due to an increase in accounts payable, offset by a net increase in current assets of $47,670.
Current wording
The increase in working capital of $311,387 was primarily attributable to a net increase in current assets of $580,629, offset by an increase in current liabilities of $269,242 due to an increase in accounts payable.
Previous wording
Net cash used in operating activities for the six months ended June 30, 2024 and 2023 were $1,569,982 and $1,242,654, respectively, an increase of $327,328, or 26.3%.
Current wording
Net cash used in operating activities for the nine months ended September 30, 2024 and 2023 were $2,916,482 and $2,314,486, respectively, an increase of $601,996, or 26.0%.
Previous wording
Net cash provided by (used in) investing activities for the six months ended June 30, 2024 and 2023 were $1,051,868 and $(9,834,589), respectively, a positive change of $10,886,457, or 110.7%.
Current wording
Net cash provided by (used in) investing activities for the nine months ended September 30, 2024 and 2023 were $1,011,436 and $(8,576,011), respectively, a positive change of $9,587,447, or 111.8%.
Previous wording
Net cash provided (used) in financing activities for the six months ended June 30, 2024 and 2023 was $1,500,106 and $(130,959), respectively, a positive change of $1,631,065 or 1,245.5%.
Current wording
Net cash provided by (used in) financing activities for the nine months ended September 30, 2024 and 2023 was $3,241,628 and $(276,698), respectively, a positive change of $3,414,741, or 1,272.0%.
Previous wording
As reflected in the accompanying unaudited consolidated financial statements, we generated a net loss of $1,733,446 and used cash in operations of $1,322,582 during the six months ended June 30, 2024. Additionally, we have an accumulated deficit of $12,605,257 on June 30, 2024. As of June 30, 2024, we had working capital of $6,405,949.
Current wording
As reflected in the accompanying unaudited consolidated financial statements, we generated a net loss of $2,662,260 and used cash in operations of $2,916,482 during the nine months ended September 30, 2024. Additionally, we have an accumulated deficit of $13,534,071 on September 30, 2024. As of September 30, 2024, we had working capital of $7,216,955.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
For the nine months ended September 30, 2024 and 2023, professional fees were $899,954 and $1,273,729 and, respectively, a decrease of $373,775, or 29.3%. The decrease was primarily attributable to a decrease in other consulting fees of $322,288, a decrease in legal fees of $172,516, and a decrease in stock-based consulting fees of $90,067 related to the amortization of prepaid expense on previously issued shares to consultants for business advisory and strategic planning services, offset by an increase in investor relations of $201,876, and an increase in accounting and auditing fees of $9,220.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
License Agreements between the Company and Vendor
Previous report — wording carried elsewhere
June 2024 Registered Direct Offering and Concurrent Private Placement
Previous report — wording carried elsewhere
Concurrently with the sale of June 2024 Shares and/or the Pre-Funded Warrants, pursuant to the June 2024 Purchase Agreement in a private placement, for each share of Common Stock and/or Pre-Funded Warrant purchased by the investors, such investors received an unregistered warrant (the “June 2024 Investor Warrant”) to purchase one share of Common Stock, or 917,432 shares of Common Stock in the aggregate (the “June 2024 Investor Warrant Shares”). The warrants have an exercise price of $2.06 per share and are exercisable immediately upon issuance for a five-year period.
Previous report — wording carried elsewhere
The closing of the sales of these securities under the June 2024 Purchase Agreement took place on June 6, 2024. The gross proceeds from the offering were approximately $2 million, prior to deducting placement agent’s fees and other offering expenses payable by the Company. We intend to use the net proceeds from the offering for working capital and other general corporate purposes.
Previous report — wording carried elsewhere
On April 23, 2024, we entered into an engagement agreement with H.C. Wainwright & Co., LLC, as exclusive placement agent (the “Placement Agent”), pursuant to which the Placement Agent agreed to act as placement agent on a reasonable “best efforts” basis in connection with the Offering. We agreed to pay the Placement Agent an aggregate cash fee equal to 7.5% of the gross proceeds from the sale of securities in the Offering and a management fee equal to 1.0% of the gross proceeds raised in the Offering. We also issued the Placement Agent’s designees warrants (the “June 2024 Placement Agent Warrants”) to purchase up to 7.5% of the aggregate number of shares of Common Stock and/or Pre-Funded Warrants sold in the offering, or warrants to purchase up to 68,807 shares of Common Stock, at an exercise price equal to 125.0% of the offering price per share of Common Stock, or $2.725 per share. The June 2024 Placement Agent Warrants are exercisable immediately upon issuance for a period of five years following the commencement of the sales pursuant to the June 2024 Offering.