Indaptus Therapeutics Inc

Previous wording

In September 2023, we began the second cohort of the Phase 1 clinical trial after receiving authorization from the Safety Review Committee. The second cohort dose was a reduction from 7 x 10^7 Decoy20 dose to 3 x 10^7 Decoy20 based on the significant pharmacodynamic effect seen with the first four patients in the first cohort. In March 2024, we completed the second cohort of patients who received a single dose of 3 x 10^7 Decoy20 in Part 1 of the clinical trial and, following authorization from the Safety Review Committee, advanced into the weekly dosing part of the trial. In May 2024, we dosed the first patient in the weekly dosing part and as of the date of the issuance of this Quarterly Report we completed one month of the weekly dosing part in the first three patients at the 3 x 10^7 Decoy20 dose.

Current wording

In September 2023, we began the second cohort of the Phase 1 clinical trial after receiving authorization from the Safety Review Committee. The second cohort dose was a reduction from 7 x 10^7 Decoy20 dose to 3 x 10^7 Decoy20. In March 2024, we completed the second cohort of patients who received a single dose of 3 x 10^7 Decoy20 in Part 1 of the clinical trial Patients on the second (lower dose) cohort experienced adverse events similar in frequency and severity to the higher dose cohort with one dose-limiting toxicity of grade 3 ALT elevation that required one week to resolve. Pharmacodynamic effects included transient induction of multiple biomarkers. Clearance of Decoy20 was similarly rapid. Following authorization from the Safety Review Committee, we advanced into the weekly dosing part of the trial.

Previous wording

In May and June 2024, we enrolled two additional patients in the first cohort who received a single dose of 7 x 10^7 Decoy20, and we intend to initiate the weekly dosing with 7 x 10^7 Decoy20 later this year.

Current wording

In May and June 2024, we enrolled two additional patients in the first cohort who received a single dose of 7 x 10^7 Decoy20, and in August 2024 we received the authorization from the Safety Review Committee to initiate the weekly dosing with 7 x 10^7 Decoy20.

Previous wording

Economic developments such as supply chain constraints and rising inflation and interest rates have negatively affected the global financial markets and may reduce our ability to access capital, which could negatively impact our short-term and long-term liquidity. The ultimate impact of current economic conditions is highly uncertain and subject to change. While it is unknown how long these conditions will last and what the complete financial effect will be to us, capital raise efforts and additional development of our technologies may be negatively affected. In addition, our business operations expose us to risks associated with public health crises and epidemics/pandemics.

Current wording

Economic developments such as inflation and interest rates have negatively affected the global financial markets and may reduce our ability to access capital, which could negatively impact our short-term and long-term liquidity. The ultimate impact of current economic conditions is highly uncertain and subject to change. While it is unknown how long these conditions will last and what the complete financial effect will be to us, capital raise efforts and additional development of our technologies may be negatively affected. In addition, our business operations expose us to risks associated with public health crises and epidemics/pandemics.

Previous wording

We expect our general and administrative expenses to increase substantially for the foreseeable future as we continue to increase our headcount to support our research and development activities and operations generally, the growth of our business and, if any of our product candidates receive marketing approval, commercialization activities. We also expect to continue to incur expenses as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC, additional director and officer insurance expenses, investor relations activities, and other administrative and professional services.

Current wording

We expect our general and administrative expenses to increase for the foreseeable future as we continue to support our research and development activities and operations generally, the growth of our business and, if any of our product candidates receive marketing approval, commercialization activities. We also expect to continue to incur expenses as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC, additional director and officer insurance expenses, investor relations activities, and other administrative and professional services.

Previous wording

During the three months ended June 30, 2024, our research and development expenses were approximately $1.7 million, which represented an increase of approximately $0.2 million, or approximately 16%, compared to approximately $1.5 million for the three months ended June 30, 2023. This increase was attributable primarily to payroll and related expenses, including stock-based compensation. We expect our research and development expenses to increase for the remainder of the year as our Phase 1 clinical trial progresses.

Current wording

During the three months ended September 30, 2024, our research and development expenses were approximately $1.5 million, which represented a decrease of approximately $0.7 million, or approximately 34%, compared to approximately $2.2 million for the three months ended September 30, 2023. This decrease was attributable primarily to the development of our manufacturing processes of Decoy20 that were conducted in the three months ended September 30, 2023. We expect our research and development expenses to increase for the remainder of the year as our Phase 1 clinical trial progresses.

Previous wording

Our general and administrative expenses for the three months ended June 30, 2024 amounted to approximately $2.4 million, an increase of approximately $0.4 million, or approximately 19%, compared to approximately $2.0 million for the three months ended June 30, 2023. This increase was attributable primarily to payroll and related expenses, legal fees and investor relations expenses.

Current wording

Our general and administrative expenses for the three months ended September 30, 2024 amounted to approximately $1.7 million, a decrease of approximately $0.3 million, or approximately 17%, compared to approximately $2.0 million for the three months ended September 30, 2023. This decrease was attributable primarily to stock-based compensation, legal fees and recruitment costs.

Previous wording

During the three months ended June 30, 2024, our other income, net was approximately $0.1 million, which represented a decrease of approximately $0.16 million as compared to the three months ended June 30, 2023. The other income generated in the period consists primarily of income earned on the Company’s cash and cash equivalent accounts.

Current wording

During the three months ended September 30, 2024, our other income, net was approximately $0.1 million, which represented a decrease of approximately $0.2 million as compared to the three months ended September 30, 2023. The other income generated in the period consists primarily of income earned on the Company’s cash and cash equivalent accounts, the balances of which were lower during the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Previous wording

The following tables set forth our results of operations for the six months ended June 30, 2024 and 2023 and the relative dollar change between the two periods.

Current wording

The following tables set forth our results of operations for the nine months ended September 30, 2024 and 2023 and the relative dollar change between the two periods.

Previous wording

During the six months ended June 30, 2024, our research and development expenses were approximately $3.3 million, which represented a decrease of approximately $0.1 million, or approximately 2%, compared to approximately $3.4 million for the six months ended June 30, 2023. This decrease was attributable primarily to a decrease of approximately $0.5 million in our manufacturing processes of Decoy20 that were conducted in 2023 and was offset by an increase of approximately $0.4 million in our Phase 1 clinical trial and in payroll and related expenses. We expect our research and development expenses to increase for the remainder of the year as our Phase 1 clinical trial progresses.

Current wording

During the nine months ended September 30, 2024, our research and development expenses were approximately $4.8 million, which represented a decrease of approximately $0.8 million, or approximately 15%, compared to approximately $5.6 million for the nine months ended September 30, 2023. This decrease was attributable primarily to a decrease of approximately $1.1 million in the development of our manufacturing processes of Decoy20 that were conducted in 2023 and was offset by an increase of approximately $0.3 million in our Phase 1 clinical trial and in payroll and related expenses. We expect our research and development expenses to increase for the remainder of the year as our Phase 1 clinical trial progresses.

Previous wording

Ourgeneral and administrative expenses for the six months ended June 30, 2024 amounted to approximately $4.7 million, an increase of approximately $0.1 million, or approximately 3%, compared to approximately $4.6 million for the six months ended June 30, 2023. This increase was attributable primarily to payroll and related expenses, including stock-based compensation.

Current wording

Ourgeneral and administrative expenses for the nine months ended September 30, 2024 amounted to approximately $6.4 million, a decrease of approximately $0.2 million, or approximately 3%, compared to approximately $6.6 million for the nine months ended September 30, 2023. This decrease was attributable primarily to a decrease of approximately $0.7 million in legal fees, payroll and related expenses, recruitment costs and directors’ and officers’ insurance expenses, and was offset by an increase of approximately $0.5 million in investor relations and business development expenses.

Previous wording

During the six months ended June 30, 2024, our other income, net was approximately $0.2 million, which represented a decrease of approximately $0.2 million as compared to the six months ended June 30, 2023. The other income generated in the period consists primarily of income earned on the Company’s cash and cash equivalent accounts.

Current wording

During the nine months ended September 30, 2024, our other income, net was approximately $0.3 million, which represented a decrease of approximately $0.5 million as compared to the nine months ended September 30, 2023. The other income generated in the period consists primarily of income earned on the Company’s cash and cash equivalent accounts, the balances of which were lower during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Previous wording

On August 8, 2024, we completed a registered direct offering, pursuant to which we sold and issued to certain investors, including an officer of Indaptus, 1,643,837 shares of our common stock at a purchase price per share of $1.825. In addition, in a concurrent private placement, we also issued to the purchasers in August 2024 Offering unregistered warrants to purchase 1,643,837 shares of our common stock (the “PIPE Warrants”). The PIPE Warrants are immediately exercisable at an exercise price of $1.70 per share and expire five years from the date of issuance. The total net proceeds were approximately $2.5 million, after deducting placement agent and other offering expenses in the amount of approximately $0.5 million.

Current wording

On August 8, 2024, we completed a registered direct offering, pursuant to which we sold and issued to certain investors, including an officer of Indaptus, 1,643,837 shares of our common stock at a purchase price per share of $1.825. In addition, in a concurrent private placement, we also issued to the purchasers in the August 2024 Offering unregistered warrants to purchase 1,643,837 shares of our common stock (the “PIPE Warrants”). The PIPE Warrants are immediately exercisable at an exercise price of $1.70 per share and expire five years from the date of issuance. The total net proceeds were approximately $2.5 million, after deducting placement agent and other offering expenses in the amount of approximately $0.5 million.

Previous wording

In June 2022, we entered into an At The Market Offering Agreement (the “ATM Agreement”) which was amended on September 1, 2022 with H.C. Wainwright & Co., LLC, as sales agent (“Wainwright”), pursuant to which based on the prospectus supplement that was filed with the SEC on March 13, 2024, we may offer and sell, from time to time through Wainwright, shares of our common stock, par value $0.01 per share, for aggregate gross proceeds of up to $5.2 million. The issuance and sale of common stock by us under the ATM Agreement is being made pursuant to our effective “shelf” registration statement on Form S-3 filed with the SEC on September 1, 2022 and declared effective on September 9, 2022. In 2024, we sold 152,000 shares of our common stock for aggregate gross proceeds of approximately $0.4 million. On August 6, 2024, we filed a prospectus supplement to reduce the amount of shares registered under the prospectus for the ATM to $0.00 and to suspend the ATM program, but the ATM Agreement remains in full force and effect.

Current wording

In June 2022, we entered into an At The Market Offering Agreement (the “ATM Agreement”) which was amended on September 1, 2022 with H.C. Wainwright & Co., LLC, as sales agent (“Wainwright”), pursuant to which we may offer and sell, through Wainwright, shares of our common stock from time to time. The issuance and sale of common stock by us under the ATM Agreement is being made pursuant to our effective “shelf” registration statement on Form S-3 filed with the SEC on September 1, 2022 and declared effective on September 9, 2022. In 2024, we sold 152,000 shares of our common stock for aggregate gross proceeds of approximately $0.4 million. On August 6, 2024, we filed a prospectus supplement to reduce the amount of shares registered under the prospectus for the ATM to $0.00 and to suspend the ATM program, but the ATM Agreement remains in full force and effect.

Previous wording

We believe that the cash and cash equivalents of approximately $7.3 million that we had as of June 30, 2024, and the net proceeds of approximately $2.5 million received from the August 2024 Offering will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2025. While we intend to finance our cash needs principally through collaborations, strategic alliances, or license agreements with third parties and/or debt or equity financings, we cannot provide any assurance that new financing will be available to us on commercially acceptable terms or in the amounts required, if at all. These conditions raise substantial doubt regarding our ability to continue as a going concern within one year after the date of the filing of this Quarterly Report. For additional information, see Note 1 to ourunaudited condensed consolidated financial statements included elsewhere in this Quarterly Report. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

Current wording

We believe that the cash and cash equivalents of approximately $7.4 million that we had as of September 30, 2024 will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2025. As of the date of this report, despite our best efforts, we have been unable to raise new financing since the completion of the August 2024 registered direct offering and we do not have any committed arrangements in place for future financing, other than as described above. We will need to increase our capital resources through equity or debt financings, and we may need to do so sooner than we expect. We may also seek to finance our cash needs through collaborations, strategic alliances, or license agreements with third parties. If sources of financing are available, they may result in substantial dilution to our stockholders. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms or in the amounts required, if at all. If we are unable to consummate a financing or other transaction, we may need to delay, reduce, or eliminate our research and development programs, which could adversely affect our business prospects, or cease operations. These conditions raise substantial doubt regarding our ability to continue as a going concern within one year after the date of the filing of this Quarterly Report. For additional information, see Note 1 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

Previous wording

Net cash used in operating activities was approximately $6.4 million for the six months ended June 30, 2024, compared with net cash used in operating activities of approximately $7.1 million for the six months ended June 30, 2023. The decrease in net cash used was primarily attributable to a settlement fee that was paid in February 2023.

Current wording

Net cash used in operating activities was approximately $8.9 million for the nine months ended September 30, 2024, compared with net cash used in operating activities of approximately $10.8 million for the nine months ended September 30, 2023. This decrease resulted primarily from a decrease in our research and development activities and general and administrative expenses and by net changes in operating asset and liability items.

Previous wording

There was no net cash provided by or used in investing activities in the six months ended June 30, 2024. Net cash provided by investing activities was approximately $10.1 million for the six months ended June 30, 2023, which was related to the maturity of $17.0 million in marketable securities, offset by net investment of approximately $6.9 million in marketable securities.

Current wording

There was no net cash provided by or used in investing activities in the nine months ended September 30, 2024. Net cash provided by investing activities was approximately $17.1 million for the nine months ended September 30, 2023, which was related to the maturity of $24.0 million in marketable securities, offset by net investment of approximately $6.9 million in marketable securities.

Previous wording

Net cash provided by financing activities for the six months ended June 30, 2024 was approximately $0.4 million, which was provided byissuance and sale of our common stock under the ATM Agreement. There was no net cash provided by or used in financing activities in the six months ended June 30, 2023.

Current wording

Net cash provided by financing activities for the nine months ended September 30, 2024 was approximately $2.9 million, which was provided byissuance and sale of our common stock under the ATM Agreement and issuance and sale of our common stock and warrants in the August 2024 Offering. There was no net cash provided by or used in financing activities in the nine months ended September 30, 2023.

Previous wording

We believe that our existing cash and cash equivalents as of the date of the issuance of this Quarterly Report are adequate to fund our ongoing activities into the first quarter of 2025.

Current wording

We believe that our existing cash and cash equivalents as of September 30, 2024 are adequate to fund our ongoing activities into the first quarter of 2025.

Previous wording

Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain process that takes many years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of product candidates that we do not expect to be commercially available for the next couple of years, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all. For example, the trading prices for our and other biopharmaceutical companies’ stock have been highly volatile as a result of current macroeconomic conditions and market volatility. As a result, we may face difficulties raising capital through sales of our common stock on acceptable terms, if at all. If we are unsuccessful in securing sufficient financing, we may need to delay, reduce, or eliminate our research and development programs, which could adversely affect our business prospects, or cease operations. For additional information, see Note 1 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report and “Risk Factors” in Part II. Item 1A of this Quarterly Report.

Current wording

Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain process that takes many years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of product candidates that we do not expect to be commercially available for the next couple of years, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. The trading prices for our and other biopharmaceutical companies’ stock have been highly volatile as a result of current macroeconomic conditions and market volatility. As a result, we have faced and may continue to face difficulties raising capital through sales of our common stock. Adequate additional financing may not be available to us on acceptable terms or in the amounts required, if at all. If we are unsuccessful in securing sufficient financing, we may need to delay, reduce, or eliminate our research and development programs, which could adversely affect our business prospects, or cease operations. For additional information, see Note 1 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report and “Risk Factors” in Part II. Item 1A of this Quarterly Report.

Previous wording

Operating lease liabilities represent our commitment for future rent made under a non-cancelable lease for our offices in San Diego, CA. The total future payments for our operating lease obligation on June 30, 2024 were approximately $0.15 million, of which approximately $0.1 million is due in the next twelve months and the remaining payments are due through October 2025. For additional details regarding our lease, see Note 7 to our unaudited condensed consolidated financial statements included in this Quarterly Report.

Current wording

Operating lease liabilities represent our commitment for future rent made under a non-cancelable lease for our offices in San Diego, CA. The total future payments for our operating lease obligation on September 30, 2024 were approximately $0.1 million which is due through October 2025. For additional details regarding our lease, see Note 7 to our unaudited condensed consolidated financial statements included in this Quarterly Report.

Previous wording

Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in our 2023 Annual Report on Form 10-K. During the six months ended June 30, 2024, there were no material changes to our critical accounting policies from those discussed in our 2023 Annual Report on Form 10-K.

Current wording

Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in our 2023 Annual Report on Form 10-K. During the nine months ended September 30, 2024, there were no material changes to our critical accounting policies from those discussed in our 2023 Annual Report on Form 10-K.