GENELUX Corp

Previous 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.

Current wording

Since inception, we have incurred significant operating losses. Our net losses were $14.6 million and $16.2 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $236.1 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

During the year ended December 31, 2023, we closed our initial public offering (“IPO”) and two Private Placements and received $37.8 million of net proceeds from these offerings. During the six months ended June 30, 2024, we closed a second public offering and received $27.7 million of net proceeds from that offering. Due to the funds received through these offerings, and the conversion of preferred stock and convertible notes payable upon the closing of the IPO, we have shareholders’ equity of $37.6 million at June 30, 2024. We now expect our cash and cash equivalents, and short and long-term investments, totaling $40.4 million at June 30, 2024, to last into the first quarter of 2026.

Current wording

During the year ended December 31, 2023, we closed our initial public offering (“IPO”) and two Private Placements and received $37.8 million of net proceeds from these offerings. During the nine months ended September 30, 2024, we closed a second public offering and received $27.7 million of net proceeds from that offering. Due to the funds received through these offerings, and the conversion of preferred stock and convertible notes payable upon the closing of the IPO, we have shareholders’ equity of $33.1 million at September 30, 2024. We now expect our cash and cash equivalents, and short and long-term investments, totaling $35.1 million at September 30, 2024, to last until the first quarter of 2026.

Previous 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.

Current wording

In October 2024, we announced that the first patient had been dosed in 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 non-small cell lung cancer (“NSCLC”) in the United States. In accordance with our license agreement with our partner in China, Newsoara BioPharma Co. Ltd. (Newsoara), Newsoara is generally obligated to fund the Phase 2 clinical trial in its entirety. 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 us 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. During the quarter ended September 30, 2024, the Company entered into a Clinical Trial Services Agreement with Hong Kong Tigermed Consulting Co., Ltd., to provide regulatory and development support services for the NSCLC trial in the U.S. The total amount of the contract is up to $10.1 million.

Previous 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.

Current wording

During the nine months ended September 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 nine months ended September 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 costs are expensed as incurred. Costs for certain activities are recognized based on an evaluation of the progress to completion of specific tasks using data such as information provided to us by our vendors and analyzing the progress of our preclinical and clinical studies or other services performed. Significant judgment and estimates are made in determining the accrued expense balances at the end of any reporting period.

Current wording

Research and development costs are expensed as incurred. Costs for certain activities are recognized based on an evaluation of the progress to completion of specific tasks using data such as information provided to us by our vendors and analyzing the progress of our preclinical and clinical studies or other services performed. Significant judgement and estimates are made in determining the accrued expense balances at the end of any reporting period.

Previous 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.

Current wording

Research and development expenses were $4.1 million and $2.8 million for the three months ended September 30, 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 stock-related compensation in 2024, relating to the increased cost of stock options and restricted stock units in 2024; and a $0.9 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 $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.

Current wording

General and administrative expenses were $2.9 million and $2.5 million for the three months ended September 30, 2024 and 2023, respectively, an increase of $0.4 million. Significant variations between periods are primarily a result of a $0.7 million increase in stock compensation expense in 2024, due to the increase in the cost of stock options and restricted stock units in 2024; offset by a $0.3 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 $(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.

Current wording

Other income (expenses), net, were $0.5 million and $(0.4) million for the three months ended September 30, 2024 and 2023, respectively. During the three months ended September 30, 2024, other income consisted of interest income of $0.5 million from the investment into money market funds and short and long-term investments, while during the same period in 2023, other income consisted of interest income of $0.04 million and financing costs of $0.4 million.

Previous wording

The following table summarizes our results of operations for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

The table below summarizes our research and development expenses for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The table below summarizes our research and development expenses for the nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

Research and development expenses were $8.4 million and $5.8 million for the six months ended June 30, 2024 and 2023, respectively, an increase of $2.6 million. Significant variations between periods are the result of a $0.8 million increase in employee compensation and related expenses in 2024, primarily due to new employee hires after the second quarter of 2023; a $0.7 million increase in stock-related compensation in 2024, relating to the increased cost of stock options and restricted stock units in 2024; a $0.5 million increase in outsourced manufacturing services in 2024, primarily related to increased costs of third party product testing and other manufacturing processes; and a $0.8 million increase in clinical and regulatory expenses in 2024, relating to increased clinical trial costs associated with our Phase 3 On Prime Registration trial in 2024.

Current wording

Research and development expenses were $12.5 million and $8.6 million for the nine months ended September 30, 2024 and 2023, respectively, an increase of $3.9 million. Significant variations between periods are the result of a $0.9 million increase in employee compensation and related expenses in 2024, primarily due to new employee hires after the second quarter of 2023; a $1.1 million increase in stock-related compensation in 2024, relating to the increased cost of stock options and restricted stock units in 2024; a $0.7 million increase in outsourced manufacturing services in 2024, primarily related to increased costs of third-party product testing and other manufacturing processes; and a $1.7 million increase in clinical and regulatory expenses in 2024, relating to increased clinical trial costs associated with our Phase 3 On Prime Registration trial in 2024; offset by a $0.5 decrease in the manufacturing and laboratory material costs and consulting and contract labor expenses.

Previous wording

The table below summarizes our general and administrative expenses for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The table below summarizes our general and administrative expenses for the nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

Other income (expenses), net, were $0.6 million and $(4.3) million for the six months ended June 30, 2024 and 2023, respectively. During the six months ended June 30, 2024, other income consisted of interest income of $0.6 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 $0.2 million, debt discount amortization of $0.6 million, financing costs of $3.1 million and debt extinguishment costs of $0.4 million.

Current wording

Other income (expenses), net, were $1.1 million and $(4.3) million for the nine months ended September 30, 2024 and 2023, respectively. During the nine months ended September 30, 2024, other income consisted of interest income of $1.1 million from the investment into money market funds and short and long-term investments, while during the same period in 2023, other income consisted of interest income of $0.004 million from the investment into money market funds. During the nine months ended September 30, 2024, other expenses consisted of interest expense of $0.2 million, debt discount amortization of $0.6 million, financing costs of $3.2 million and debt extinguishment costs of $0.4 million.

Previous 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.

Current wording

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 nine months ended September 30, 2024, we incurred a net loss of $20.9 million and used cash in operations of $16.9 million.

Previous wording

During the six months ended June 30, 2023, we closed our IPO and two Private Placements and received $37.8 million of net proceeds from the offerings. During the six months ended June 30, 2024, we closed our second public offering and received $27.7 million of net proceeds from that offering. Due to the funds received through these offerings, and the conversion of preferred stock and convertible notes payable upon the closing of the IPO, we had shareholders’ equity of $37.7 million at June 30, 2024. We expect our cash and cash equivalents, and short and long-term investments, totaling $40.4 million at June 30, 2024, to last into the first quarter of 2026.

Current wording

During the nine months ended September 30, 2023, we closed our IPO and two Private Placements and received $37.8 million of net proceeds from the offerings. During the nine months ended September 30, 2024, we closed our secondary public offering and received $27.7 million of net proceeds from that offering. Due to the funds received through these offerings, and the conversion of preferred stock and convertible notes payable upon the closing of the IPO, we had shareholders’ equity of $33.1 million at September 30, 2024. We now expect our cash and cash equivalents, and short and long-term investments, totaling $35.1 million at September 30, 2024, to last into the first quarter of 2026.

Previous wording

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

Current wording

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

Previous 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.

Current wording

During the nine months ended September 30, 2024, we used cash from operating activities of $16.9 million, compared to $13.4 million used during the nine months ended September 30, 2023. During the nine months ended September 30, 2024, we incurred a net loss of $20.9 million and had non-cash expenses of $6.1 million, compared to a net loss of $21.5 million and non-cash expenses of $9.4 million during the nine months ended September 30, 2023. The primary non-cash expense during both periods was stock-related compensation totaling $6.0 million and $4.4 million during the nine months ended September 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 nine months ended September 30, 2023. The net change in operating assets and liabilities during the nine months ended September 30, 2024 used cash of $2.1 million, compared to $1.3 million used during the nine months ended September 30, 2023. The primary source of cash relating to operating assets and liabilities during the nine months ended September 30, 2024 was the increase in accounts payable and accrued expenses of $0.3 million and the primary use of cash was the decrease in accrued payroll and payroll taxes of $1.4 million. The primary use of cash during the nine months ended September 30, 2023 was the decrease in accounts payable and accrued expenses of $2.1 million.

Previous 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.

Current wording

Net cash used in investing activities for the nine months ended September 30, 2024 was $14.8 million, consisting of the net purchases of short and long-term investments of $14.5 million, and purchases of property and equipment primarily for construction-in-progress of $0.3 million. Net cash used in investing activities for the nine months ended September 30, 2023 was $0.8 million, consisting of the purchase of property and equipment.

Previous 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.

Current wording

During the nine months ended September 30, 2024, we provided cash from operating activities of $28.4 million, compared to $43.6 million provided during the nine months ended September 30, 2023. For the nine months ended September 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.

Previous 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.

Current wording

Net cash used in financing activities during the nine months ended September 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 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).

Current wording

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