GENELUX Corp

Previous wording

Since inception, we have incurred significant operating losses. Our net losses were $7.9 million and $10.4 million for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, we had an accumulated deficit of $229.4 million. We expect to continue to incur significant and increasing expenses and operating losses for the foreseeable future, as we advance our current and future product candidates through preclinical and clinical development, manufacture drug product and drug supply, seek regulatory approval for our current and future product candidates, maintain and expand our intellectual property portfolio, hire additional research and development and business personnel and operate as a public company.

Current wording

Since inception, we have incurred significant operating losses. Our net losses were $14.4 million and $16.2 million for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, we had an accumulated deficit of $236.0 million. We expect to continue to incur significant and increasing expenses and operating losses for the foreseeable future, as we advance our current and future product candidates through preclinical and clinical development, manufacture drug product and drug supply, seek regulatory approval for our current and future product candidates, maintain and expand our intellectual property portfolio, hire additional research and development and business personnel and operate as a public company.

Previous wording

The Company currently is engaged in regulatory study start-up activities of a Phase 2, open-label, randomized, and controlled clinical trial designed to evaluate the efficacy and safety of intravenously delivered Olvi-Vec oncolytic VACV for patients with recurrent NSCLC in the United States. In accordance with our licensing agreement, the Phase 2 clinical trial will be funded in its entirety by our partner in China, Newsoara. In November 2023, we agreed with Newsoara that Genelux would directly engage a contract research organization on mutually agreeable terms to conduct certain startup activities for the NSCLC trial in the U.S. only, with Newsoara reimbursing Genelux for the costs and expenses of such agreed-upon startup activities. Newsoara is permitted to defer such reimbursement payments until the completion of its next round of financing, which Newsoara expects to occur in 2024.

Current wording

Our Phase 2, open-label, randomized, and controlled clinical trial designed to evaluate the efficacy and safety of intravenously delivered Olvi-Vec oncolytic VACV for patients with recurrent non-small cell lung cancer (“NSCLC”) is expected to report interim results in mid-2025. The Phase 2 clinical trial will be funded in its entirety by our partner in China, Newsoara BioPharma Co. Ltd. (“Newsoara”). In November 2023, we agreed with Newsoara that Genelux would directly engage a contract research organization on mutually agreeable terms to conduct certain startup activities for the NSCLC trial in the U.S. only, with Newsoara reimbursing Genelux for the costs and expenses of such agreed-upon startup activities. Newsoara is permitted to defer such reimbursement payments until the completion of its next round of financing, which Newsoara expects to occur in 2024.

Previous wording

During the three months ended March 31, 2023, under our license agreement with Newsoara BioPharma Co. Ltd. (“Newsoara”), we invoiced and collected $0.2 million relating to supplying product for Newsoara to use in its clinical trials. During the three months ended March 31, 2024, we recognized revenue of $0.01 million relating to the Company’s license agreement with ELIAS Animal Health, LLC.

Current wording

During the six months ended June 30, 2023, under our license agreement with Newsoara, we invoiced and collected $0.2 million relating to supplying product for Newsoara to use in its clinical trials. During the six months ended June 30, 2024, we recognized revenue of $0.01 million relating to the Company’s license agreement with ELIAS Animal Health, LLC.

Previous wording

Research and development expenses were $4.0 million and $2.8 million for the three months ended March 31, 2024 and 2023, respectively, an increase of $1.2 million. Significant variations between periods are primarily a result of a $0.4 million increase in employee compensation and related expenses in 2024, primarily related to new employee hires after the first quarter of 2023; and a $0.3 million increase in stock-related compensation in 2024, relating to the increased cost of stock options and restricted stock units in 2024.

Current wording

Research and development expenses were $4.4 million and $2.9 million for the three months ended June 30, 2024 and 2023, respectively, an increase of $1.5 million. Significant variations between periods are primarily a result of a $0.3 million increase in employee compensation and related expenses in 2024, primarily related to new employee hires after the second quarter of 2023; a $0.3 million increase in stock-related compensation in 2024, relating to the increased cost of stock options and restricted stock units in 2024; a $0.4 million increase in outsourced manufacturing services in 2024, primarily related to increased costs of third party product testing and other manufacturing processes; and $0.7 million increase in clinical and regulatory expenses relating to increased clinical trial costs associated with our Phase 3 On Prime Registration trial in 2024.

Previous wording

General and administrative expenses were $4.1 million and $3.8 million for the three months ended March 31, 2024 and 2023, respectively, an increase of $0.3 million. Significant variations between periods are primarily a result of a $0.6 million decrease in stock compensation expense in 2024, due to the decrease in the cost of stock options and restricted stock units in 2024 compared to 2023; and a $0.4 million increase in professional service expenses in 2024, primarily resulting from increased corporate legal costs and other professional services related to being a newly publicly traded company.

Current wording

General and administrative expenses were $2.5 million for the three months ended June 30, 2024 and 2023. Significant variations between periods are primarily a result of a $0.4 million increase in stock compensation expense in 2024, due to the increase in the cost of stock options and restricted stock units in 2024 as compared to 2023; and offset by a $0.5 million decrease in professional service expenses in 2024, primarily resulting from decreased corporate legal costs.

Previous wording

Other income (expenses), net, were $0.3 million and $(3.9) million for the three months ended March 31, 2024 and 2023, respectively. During the three months ended March 31, 2024, other income consisted of interest income of $0.3 million from the investment into money market funds and short-term investments, while during the same period in 2023, other expenses consisted of interest expense of $0.1 million, debt discount amortization of $0.6 million and financing costs of $3.1 million.

Current wording

Other income (expenses), net, were $0.3 million and $(0.4) million for the three months ended June 30, 2024 and 2023, respectively. During the three months ended June 30, 2024, other income consisted of interest income of $0.3 million from the investment into money market funds and short and long-term investments, while during the same period in 2023, other expenses consisted of interest expense of $0.02 million and debt extinguishment costs of $0.4 million.

Previous wording

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, we experienced recurring losses from operations since inception and incurred a net loss of $6.8 million and used cash in operations of $4.4 million during the three months ended March 31, 2024. These factors raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to raise additional funds and implement our strategies. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

Current wording

The accompanying condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. During the year ended December 31, 2023, we incurred a net loss of $28.3 million and used cash in operations of $20.3 million and had an accumulated deficit of $221.5 million as of December 31, 2023. During the six months ended June 30, 2024, we incurred a net loss of $14.4 million and used cash in operations of $11.2 million.

Previous wording

At March 31, 2024, we had cash and cash equivalents, and short-term investments, in the amount of $19.6 million. The ability to continue as a going concern is dependent on us attaining and maintaining profitable operations in the future and raising additional capital to meet our obligations and repay our liabilities arising from normal business operations when they come due. Since inception, we have funded our operations primarily through equity and debt financings and licensing income, and we expect to continue to rely on these sources of capital in the future.

Current wording

The ability to continue as a going concern is dependent on our attaining and maintaining profitable operations in the future and raising additional capital to meet our obligations and repay our liabilities arising from normal business operations when they come due. Since inception, we have funded our operations primarily through equity and debt financings, and licensing income, and we expect to continue to rely on these sources of capital in the future.

Previous wording

No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to us. Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, cause substantial dilution to our stockholders, in the case of equity financing, or grant unfavorable terms in future licensing agreements.

Current wording

No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to us. Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing, or grant unfavorable terms in licensing future licensing agreements.

Previous wording

The table below summarizes our cash flow activities for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

The table below summarizes our cash flow activities for the six months ended June 30, 2024 and 2023 (in thousands):

Previous wording

During the three months ended March 31, 2024, we used cash from operating activities of $4.4 million, compared to $4.6 million used during the three months ended March 31, 2023. During the three months ended March 31, 2024, we incurred a net loss of $7.9 million and had non-cash expenses of $2.9 million, compared to a net loss of $10.4 million and non-cash expenses of $7.0 million during the three months ended March 31, 2023. The primary non-cash expense during both periods was stock-related compensation totaling $2.8 million and $3.0 million during the three months ended March 31, 2024 and 2023, respectively; and the fair value of warrants issued in connection with the conversion of convertible notes of $3.1 million during the three months ended March 31, 2023. The net change in operating assets and liabilities during the three months ended March 31, 2024 provided cash of $0.6 million, compared to $1.3 million used during the three months ended March 31, 2023. The primary source of cash during the three months ended March 31, 2024 was the increase in accounts payable and accrued expenses of $1.5 million. The primary use of cash during the three months ended March 31, 2023 was the decrease in accounts payable and accrued expenses of $0.9 million.

Current wording

During the six months ended June 30, 2024, we used cash from operating activities of $11.2 million, compared to $10.0 million used during the six months ended June 30, 2023. During the six months ended June 30, 2024, we incurred a net loss of $14.4 million and had non-cash expenses of $4.4 million, compared to a net loss of $16.2 million and non-cash expenses of $8.4 million during the six months ended June 30, 2023. The primary non-cash expense during both periods was stock-related compensation totaling $4.2 million and $3.7 million during the six months ended June 30, 2024 and 2023, respectively; and the fair value of warrants issued in connection with the conversion of convertible notes of $3.1 million during the six months ended June 30, 2023. The net change in operating assets and liabilities during the six months ended June 30, 2024 used cash of $1.1 million, compared to $2.3 million used during the six months ended June 30, 2023. The primary source of cash during the six months ended June 30, 2024 was the increase in accounts payable and accrued expenses of $1.0 million and the primary use of cash was the decrease in accrued payroll and payroll taxes of $1.6 million. The primary use of cash during the six months ended June 30, 2023 was the decrease in accounts payable and accrued expenses of $1.7 million.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2024 was $1.7 million, consisting of the net purchases of short-term investments of $1.7 million, and purchases of property and equipment for construction-in-progress of $0.003 million. Net cash used in investing activities for the three months ended March 31, 2023 was $0.1 million, consisting of the purchase of property and equipment.

Current wording

Net cash used in investing activities for the six months ended June 30, 2024 was $18.8 million, consisting of the purchases net of sales of short and long-term investments of $18.5 million, and purchases of property and equipment primarily for construction-in-progress of $0.3 million. Net cash used in investing activities for the six months ended June 30, 2023 was $0.5 million, consisting of the purchase of property and equipment.

Previous wording

During the three months ended March 31, 2024, we provided cash from operating activities of $0.7 million, compared to $14.6 million provided during the three months ended March 31, 2023. For the three months ended March 31, 2024, cash provided by financing activities consisted of proceeds from the exercise of stock warrants of $0.7 million. For the three months ended March 31, 2023, cash provided by financing activities consisted of proceeds from the issuance of proceeds from notes payable - shareholders totaling $0.9 million and proceeds from the sale of common stock related to our IPO totaling $14.5 million, excluding offering costs paid by us.

Current wording

During the six months ended June 30, 2024, we provided cash from operating activities of $28.4 million, compared to $37.3 million provided during the six months ended June 30, 2023. For the six months ended June 30, 2024, cash provided by financing activities consisted of proceeds from the sale of common stock of $27.7 million, proceeds from the exercise of stock warrants of $0.7 million and proceeds from our company equity awards programs of $0.05 million. For the six months ended June 30, 2023, cash provided by financing activities consisted of proceeds from the issuance of proceeds from notes payable-shareholders totaling $0.9 million, proceeds from the sale of common stock related to our IPO and private placements totaling $36.1 million, and the exercise of stock warrants of $1.2 million.

Previous wording

Net cash used in financing activities during the three months ended March 31, 2023 related to the repayment of notes payable - shareholders totaling $0.5 million and the payment of deferred offering costs of $0.3 million.

Current wording

Net cash used in financing activities during the six months ended June 30, 2023 related to the repayment of notes payable-shareholders totaling $0.7 million and the payment of deferred offering costs of $0.3 million.

Previous wording

During the three months ended March 31, 2024 and 2023, we did not have, and we do not currently have, any off-balance sheet arrangements (as defined under SEC rules).

Current wording

During the six months ended June 30, 2024 and 2023, we did not have, and we do not currently have, any off-balance sheet arrangements (as defined under SEC rules).