SOLIGENIX, INC.
For the period ended Dec 31, 2024. Filed Mar 21, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 21, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-15.
0001558370-24-003402
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations8. Financial Statements and Supplementary DataCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-21.
0001558370-25-003459
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations8. Financial Statements and Supplementary DataThe 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 76 previous paragraphs and 79 current paragraphs.
34 unchanged; 30 reworded; 13 added; 9 removed; 3 previous and 2 current paragraphs rearranged.
Tables are not compared: 23 previous and 28 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 (13)
Current report
Recent Accounting Pronouncements
Current report
In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07,Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This update enhances the segment reporting requirements by increasing transparency and providing investors with additional insights into how an entity’s Chief Operating Decision Maker (“CODM”) evaluates segment performance and allocates resources.
Current report
The standard requires public entities to disclose significant segment expenses that are regularly reviewed by the CODM and included in the reported measure of segment profit or loss. Additionally, entities must provide a reconciliation of total segment amounts to consolidated financial statements, as well as enhanced qualitative disclosures regarding the methodology used to identify reportable segments and assess performance. The update applies to all public entities, including those with a single reportable segment, and expands segment disclosures in interim financial statements.
Current report
ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We have adopted ASU 2023-07 for the year ended December 31, 2024, and have updated our segment disclosures accordingly. The adoption of this standard did not impact the recognition or measurement of our financial statements but resulted in enhanced segment-related disclosures in the notes to the consolidated financial statements.
Current report
In October 2024, we entered into an amendment (the “2024 Amendment”) to the convertible debt financing agreement with Pontifax, as amended. The 2024 Amendment resulted in a substantial modification of the debt for accounting purposes, as defined, which is accounted for as an extinguishment. The difference between the fair value, or net carrying amount, of the debt before the 2024 Amendment and upon reacquisition was diminimus. Accordingly, no gain or loss was recognized related to the extinguishment related to the 2024 Amendment. Furthermore, as the 2024 Amendment resulted in a substantial modification, as defined, we elected not to account for the convertible debt using the fair value option in accordance with the applicable guidance. We determined the embedded conversion feature, after the 2024 Amendment, does not require bifurcation and therefore the convertible debt, as amended, has been recorded as a single liability classified instrument in accordance with ASU 2020-06. As a result of this election, we recognized a gain of $260,933 of other income from the change in the fair value of the convertible debt on our accompanying 2024 consolidated statement of operations.
Current report
with the reduction in interest resulting from the repayment of a portion of the convertible debt principal balance, higher interest income earned on cash balances, an increase in tax credits, an increase in other income resulting from the change in the fair value of the convertible debt and approximately $394,000 of a loss on extinguishment of debt resulting from an amendment to the original convertible debt loan agreement was recognized in 2023.
Current report
Other than the AGP Sales Agreement, which was entered into on August 16, 2024, none of these alternatives are currently committed. There is no assurance that we will obtain sufficient funding on acceptable terms, if at all, to continue operations, enter into strategic transactions that provide the necessary capital, or implement other strategies to mitigate the substantial doubt about our ability to continue as a going concern. If these alternatives are unavailable or not secured on satisfactory terms, we will not have sufficient cash resources or liquidity to fund our operations for at least 12 months after the financial statements are issued. Failure to obtain adequate capital when needed may force us to delay, reduce, or eliminate business development efforts, negatively impacting our ability to achieve our objectives, remain competitive, and maintain our financial condition and operating results. Additionally, market instability, including geopolitical factors, may limit our access to capital, further straining our liquidity and ability to continue as a going concern. The perception of financial instability may also deter potential business partners due to concerns about our ability to fulfill contractual obligations.
Current report
price of the Existing Warrants from $6.40 per share to $6.00 per share and (ii) issued new warrants (“New Warrants”) to the Holders to purchase a number of shares of common stock equal to 150% of the number of shares of common stock issued upon exercise of the Holders’ Existing Warrants. Pursuant to the Inducement Agreement, the Holders agreed to exercise for cash their Existing Warrants to purchase up to 703,125 shares of our common stock at a reduced exercise price of $6.00 per share on July 9, 2024, the date of the Inducement Agreement, until 1:30 p.m., Eastern Time. The total gross proceeds to us was approximately $4.2 million from the exercise of the Existing Warrants before deducting financial advisory fees and other expenses;
Current report
On January 3, 2024, Pontifax delivered a conversion notice to us electing to convert a portion of the remaining principal balance into shares of our common stock. Upon conversion, we issued 9,139 shares of our common stock at $10.88 per share, reducing the remaining principal balance by $99,416.
Current report
On April 15, 2024, Pontifax delivered a conversion notice to us electing to convert a portion of the remaining principal balance into shares of our common stock. Upon conversion, we issued 27,651 shares of our common stock at $5.60 per share, reducing the remaining principal balance by $154,840.
Current report
In October 2024, we entered into an amendment (the “2024 Amendment”) to the Loan Agreement, as amended. The 2024 Amendment reduced the conversion price with respect to the remaining principal amount outstanding to (i) $3.81 for the first 501,648 shares of our common stock issuable upon conversion and (ii) $4.23 with respect to all shares of our common stock issuable upon conversion thereafter. The remaining terms of the agreement remained in effect with minimal, non-material modifications to those terms. The 2024 Amendment resulted in a substantial modification of the debt for accounting purposes, as defined, which is accounted for as an extinguishment. The difference between the fair value, or net carrying amount, of the debt before the 2024 Amendment and upon reacquisition was diminimus. Accordingly, no gain or loss was recognized related to the extinguishment related to the 2024 Amendment. Furthermore, as the 2024 Amendment resulted in a substantial modification, as defined, we elected not to account for the convertible debt using the fair value option in accordance with the applicable guidance. We determined the embedded conversion feature, after the 2024 Amendment, does not require bifurcation and therefore the convertible debt, as amended, has been recorded as a single liability classified instrument in accordance with ASU 2020-06. As a result of this election, we recognized a gain of $260,933 of other income from the change in the fair value of the convertible debt on our accompanying 2024 consolidated statement of operations.
Current report
In February 2025, we fully repaid all outstanding obligations and terminated the Loan Agreement. As a result, all related liens and security interests securing the Company’s obligations were released. We did not incur any prepayment penalties for the early repayment.
Current report
received refunds of approximately $313,000 and $121,000, respectively. The refunds were recorded as other income on our accompanying consolidated statements of operations for the years ended December 31, 2024 and 2023, respectively.
Removed paragraphs (9)
Previous report
Revenue Recognition
Previous report
Our revenues include revenues generated from government contracts and grants. The revenue from government contracts and grants is based upon subcontractor costs and internal costs incurred that are specifically covered by the contracts and grants, plus a facilities and administrative rate that provides funding for overhead expenses and management fees. These revenues are recognized when expenses have been incurred by subcontractors or when we incur reimbursable internal expenses that are related to the government contracts and grants.
Previous report
We also record revenue from contracts with customers in accordance with Accounting Standards Codification Topic 606 (“ASC 606”),Revenue From Contracts with Customers. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations, and assess whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
Previous report
Certain amounts received from or billed to customers in accordance with contract terms are deferred and recognized as future performance obligations are satisfied. All amounts earned under contracts with customers other than sales-based royalties are classified as license revenues. Sales-based royalties under our license agreements would be recognized as royalty revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied. To date, we have not recognized any royalty revenue.
Previous report
Pontifax may elect to convert the outstanding loan drawn under the first tranche into shares of our common stock at any time prior to repayment. We also have the ability to force the conversion of the loan into shares of our common stock, subject to certain conditions.
Previous report
COVID-19
Previous report
Based on the current outbreak of SARS-CoV-2, the pathogen responsible for COVID-19, which has already had an impact on financial markets, there could be additional repercussions to our operating business, including but not limited to, the sourcing of materials for product candidates, manufacture of supplies for preclinical and/or clinical studies, delays in clinical operations, which may include the availability or the continued availability of patients for trials due to such things as quarantines, conduct of patient monitoring and clinical trial data retrieval at investigational study sites.
Previous report
COVID-19 affected our operations but did not have a material impact on our business, operating results, financial condition or cash flows as of and for the year ended December 31, 2023.
Previous report
The future impact of the outbreak is highly uncertain and cannot be predicted, and we cannot provide any assurance that the outbreak will not have a material adverse impact on our operations or future results or filings with regulatory health authorities. The extent of the impact to us, if any, will depend on future developments, including actions taken to contain the coronavirus.
Reworded paragraphs (30)
Previous wording
Our Specialized BioTherapeutics business segment is developing and moving toward potential commercialization of HyBryte™ (a proposed proprietary name of SGX301 or synthetic hypericin sodium), a novel photodynamic therapy (“PDT”), utilizing topical synthetic hypericin activated with safe visible light for the treatment of cutaneous T-cell lymphoma (“CTCL”). With successful completion of the Phase 3 FLASH (Fluorescent Light And Synthetic Hypericin) study, regulatory approval is being pursued in the U.S. and Europe. Following submission of a new drug application (“NDA”) for HyBryte™ in the treatment of CTCL, we received a refusal to file (“RTF”) letter from the U.S. Food and Drug Administration (“FDA”). We had a Type A meeting with the FDA to clarify and respond to the issues identified in the RTF letter and to seek additional guidance concerning information that the FDA would require for a resubmitted NDA to be deemed acceptable to file, in order to advance HyBryte™ towards U.S. marketing approval and commercialization. In order to accept an NDA filing for HyBryte™, the FDA is requiring positive results from a second, Phase 3 pivotal study in addition to the Phase 3, randomized, double-blind, placebo-controlled FLASH study previously conducted in this orphan indication. Based on this feedback, we are collaboratively engaging in active discussions with both the FDA and the European Medicines Agency (“EMA”) in order to define the protocol and evaluate the feasibility of conducting the additional Phase 3 clinical trial evaluating HyBryte™ in the treatment of CTCL in support of potential marketing approval.
Current wording
Our Specialized BioTherapeutics business segment is developing and moving toward potential commercialization of HyBryte™ (a proposed proprietary name of SGX301 or synthetic hypericin sodium), a novel photodynamic therapy, utilizing topical synthetic hypericin activated with safe visible light for the treatment of cutaneous T-cell lymphoma (“CTCL”). With successful completion of the first Phase 3 FLASH (Fluorescent Light Activated Synthetic Hypericin) study and agreement from the European Medicines Agency (“EMA”) on the key design components of a confirmatory Phase 3 placebo-controlled study evaluating the safety and efficacy of HyBryte™ in the treatment of CTCL patients with early stage disease, we began patient enrollment during December 2024 for the second Phase 3 study called “FLASH2” (Fluorescent Light Activated Synthetic Hypericin 2). We anticipate top-line results in the second half of 2026. Upon successful completion of the Phase 3 FLASH2 study, regulatory approval will be sought to support potential commercialization worldwide.
Previous wording
Development programs in this business segment also include expansion of synthetic hypericin (SGX302) into psoriasis, our first-in-class Innate Defense Regulator (“IDR”) technology, and dusquetide (SGX942 and SGX945) for the treatment of inflammatory diseases, including oral mucositis in head and neck cancer and aphthous ulcers in Behçet’s Disease.
Current wording
Development programs in this business segment also include expansion of synthetic hypericin (SGX302) into psoriasis, and our first-in-class Innate Defense Regulator (“IDR”) technology, and dusquetide (SGX942 and SGX945), for the treatment of inflammatory diseases, including oral mucositis in head and neck cancer and aphthous ulcers in Behçet’s Disease.
Previous wording
Our management’s discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of our financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, costs and expenses and the disclosure of contingent assets and liabilities. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and
Current wording
Our management’s discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of our financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, costs and expenses and the disclosure of contingent assets and liabilities. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.
Previous wording
As part of the process of preparing our financial statements, we are required to estimate our accrued research and development expenses. This process involves reviewing open contract and purchase orders, communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated costs incurred for the services when we have not yet been invoiced or otherwise notified of the actual costs. The majority of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met; however, some require advance payments. We make estimates of our accrued expenses as of each balance sheet date in our financial statements based on facts and circumstances known to us at that time. Examples of estimated accrued research and development expenses include fees paid to:
Current wording
personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated costs incurred for the services when we have not yet been invoiced or otherwise notified of the actual costs. The majority of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met; however, some require advance payments. We make estimates of our accrued expenses as of each balance sheet date in our financial statements based on facts and circumstances known to us at that time. Examples of estimated accrued research and development expenses include fees paid to:
Previous wording
We base our expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant to quotes and contracts with multiple CROs that conduct and manage preclinical studies and clinical trials on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense. Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing fees, we estimate the time period over which services will be performed, enrollment of patients, number of sites active and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or amount of prepaid expense accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in us reporting amounts that are too high or too low in any particular period. To date, we have not made any material adjustments to our prior estimates of accrued research and development expenses.
Current wording
We base our expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant to quotes and contracts with multiple CROs that conduct and manage preclinical studies and clinical trials on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense. Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing fees, we estimate the time period over which services will be performed, enrollment of patients, number of sites active and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or amount of prepaid expense accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in us reporting amounts that are too high or too low in any particular period. During the year ended December 31, 2024, we made adjustments to estimated accrued clinical trial expenses for completed trials of approximately $1.4 million. These adjustments resulted in decreases to research and development expenses in the accompanying consolidated statements of operations during the year ended December 31, 2024.
Previous wording
For the year ended December 31, 2023, we had a net loss of $6,140,730 as compared to a net loss of $13,798,339 for the prior year, representing decreased net loss of $7,657,609 or 55%. The decrease in net loss is primarily attributed to decreases in operating expenses and interest expense as well as an increase in other income. For the year ended December 31, 2023, we had revenues of $839,359 as compared to $948,911 for the prior year, representing a decrease of $109,552 or 12%. The decrease in revenues was primarily a result of the recognition of licensing revenue in 2022 partially offset by an increase in grant revenue during 2023.
Current wording
For the year ended December 31, 2024, we had a net loss of $8,266,576 as compared to a net loss of $6,140,730 for the prior year, representing increased net loss of $2,125,846 or 35%. The increase in net loss is primarily attributed to decreases in gross profit and income tax benefits as well as an increase in operating expenses, offset by increases in interest income, tax credits and the change in the fair value of debt. For the year ended December 31, 2024, we had revenues of $119,371 as compared to $839,359 for the prior year, representing a decrease of $719,988 or 86%. The decrease in revenues was primarily a result of the conclusion of higher margin grants associated with the development of SGX943 and CiVax™ and a decrease in revenue associated with the zero margin grant for the HyBryte™ investigator initiated study.
Previous wording
We incurred costs related to contract and grant revenues in the year ended December 31, 2023 and 2022 of $742,048 and $550,822, respectively, representing an increase of $191,226 or 35%. The increase in costs was primarily the result of an increase in costs relating to the HyBryte™ investigator-initiated study.
Current wording
We incurred costs related to contract and grant revenues in the year ended December 31, 2024 and 2023 of $119,371 and $742,048, respectively, representing a decrease of $622,677 or 84%. The decrease in costs was primarily the result of the conclusion of higher margin grants associated with the development of SGX943 and CiVax™ and a decrease in the zero margin grant for the HyBryte™ investigator initiated study.
Previous wording
Our gross profit for the year ended December 31, 2023 was $97,311 or 12% of total revenues as compared to $398,089 or 42% of total revenues for the prior year, representing a decrease of $300,778 or 76%. The decrease in gross profit was primarily the result of the recognition of higher margin licensing revenue in 2022 and the lower margin grant revenue associated with the HyBryte™ investigator-initiated study during 2023.
Current wording
Our gross profit for the year ended December 31, 2024 was $0 or 0% of total revenues as compared to $97,311 or 12% of total revenues for the prior year, representing a decrease of $97,311 or 100%. The decrease in gross profit was primarily the result of the conclusion of higher margin grants associated with the development of SGX943 and CiVax™ and a decrease in the zero margin grant for the HyBryte™ investigator initiated study.
Previous wording
Research and development expenses decreased by $4,631,390 or 58% to $3,312,699 for year ended December 31, 2023 as compared to $7,944,089 for the prior year. The decrease in research and development spending for the year ended December 31, 2023 was primarily related to the decrease in manufacturing and regulatory costs associated with the HyBryte™ NDA filing.
Current wording
Research and development expenses increased by $1,910,890 or 58% to $5,223,589 for year ended December 31, 2024 as compared to $3,312,699 for the prior year. The increase in research and development spending for the year ended December 31, 2024 was primarily related to preliminary costs associated with the initiation of our Phase 2 study in Behçet’s Disease and the second confirmatory Phase 3 CTCL trial offset by an adjustment of estimated accruals for completed clinical trials.
Previous wording
General and administrative expenses decreased by $2,210,352 or 33%, to $4,482,552 for the year ended December 31, 2023, as compared to $6,692,904 for the prior year. This decrease is primarily related to a reduction in legal and consulting expenses.
Current wording
General and administrative expenses decreased by $266,644 or 6%, to $4,215,908 for the year ended December 31, 2024, as compared to $4,482,552 for the prior year. This decrease is primarily related to a reduction in legal and consulting expenses.
Previous wording
The amendment to the convertible debt financing agreement with Pontifax resulted in the extinguishment of the original convertible debt for accounting purposes. We elected to account for the amended convertible debt using the fair value option, which requires us to record changes in fair value as a component of other income or expense. The fair value of the convertible debt on the date of the amendment was approximately $3,304,000, which resulted in the recognition of a loss on extinguishment of approximately $394,000 on our accompanying consolidated statements of operations during the year ended December 31, 2023. The fair value of the convertible debt as of December 31, 2023 was approximately $3,260,934, which resulted in the recognition of $43,066 of other income from the change in the fair value of the convertible debt on our accompanying consolidated statements of operations during the year ended December 31, 2023. The fair value of the convertible debt was estimated using the Monte Carlo valuation method.
Current wording
In April 2023, we entered into an amendment (the “2023 Amendment”) to the convertible debt financing agreement with Pontifax Medison Finance (“Pontifax”) (see Note 5 – Debt). The 2023 Amendment resulted in the extinguishment of the original convertible debt for accounting purposes. We elected to account for the amended convertible debt using the fair value option, which requires us to record changes in fair value as a component of other income or expense. The fair value of the convertible debt on the date of the amendment was approximately $3,304,000, which resulted in the recognition of a loss on extinguishment of approximately $394,000 on our accompanying consolidated statements of operations during the year ended December 31, 2023. The fair value of the convertible debt as of December 31, 2023 was approximately $3,260,934, which resulted in the recognition of $43,066 of other income from the change in the fair value of the convertible debt on our accompanying consolidated statements of operations for the year ended December 31, 2023. For 2023 and through the 2024 Amendment (described below), the fair value of the convertible debt was estimated using the Monte Carlo valuation method.
Previous wording
Total other expense for the year ended December 31, 2023 was $210,593 as compared to $714,370 of total other expense for the prior year, reflecting a decrease of $503,777 or 71%. The decrease in total other expense was primarily associated with the reduction in interest resulting from the repayment of a portion of the convertible debt principal balance and higher interest income earned on cash balances.
Current wording
Total other income for the year ended December 31, 2024 was $763,807 as compared to $210,593 of total other expense for the prior year, reflecting a decrease of $974,400 or 463%. The decrease in total other expense was primarily associated
Previous wording
The State of New Jersey’s Technology Business Tax Certificate Program allows certain high technology and biotechnology companies to sell unused NOL carryforwards to other New Jersey-based corporate taxpayers. We sold 2022, 2021 and 2020 New Jersey NOL carryforwards resulting in the recognition of income tax benefits, net of transaction costs of $1,767,803 and $1,154,935 during the years ended December 31, 2023 and 2022, respectively. We sold our 2022 New Jersey NOLs and have recorded a receivable of $606,606 which is included in prepaid expenses and other current assets on the accompanying consolidated balance sheet for the year ended December 31, 2023. We have not yet sold our 2023 New Jersey NOL carryforwards but may do so in the future. We will continue to explore opportunities to sell unused NOL carryforwards for the year ended December 31, 2023. However, there can be no assurance as to the continuation or magnitude of this program in future years.
Current wording
The State of New Jersey’s Technology Business Tax Certificate Program allows certain high technology and biotechnology companies to sell unused NOL carryforwards to other New Jersey-based corporate taxpayers. We sold 2023, 2022 and 2021 New Jersey NOL carryforwards resulting in the recognition of income tax benefits, net of transaction costs of $409,114 and $1,767,803 during the years ended December 31, 2024 and 2023, respectively. We sold our 2023 New Jersey NOLs and have recorded a receivable of $409,114 which is included in prepaid expenses and other current assets on the accompanying consolidated balance sheet for the year ended December 31, 2024. We have not yet sold our 2024 New Jersey NOL carryforwards but may do so in the future. We will continue to explore opportunities to sell unused NOL carryforwards for the year ended December 31, 2024. However, there can be no assurance as to the continuation or magnitude of this program in future years.
Previous wording
The Specialized BioTherapeutics business segment had revenue of $395,124 for the year ended December 31, 2023 as compared to $31,929 for the year ended December 31, 2022, representing an increase of $363,195 or 100%. The increase was due to increased reimbursable development activity under the grant to support the investigator-initiated study of HyBryte™ for expanded treatment in patients with early-stage CTCL.
Current wording
The Specialized BioTherapeutics business segment had revenue of $119,371 for the year ended December 31, 2024 as compared to $395,124 for the year ended December 31, 2023, representing a decrease of $275,753 or 70%. The decrease was due to decreased reimbursable development activity under the grant to support the investigator-initiated study of HyBryte™ for expanded treatment in patients with early-stage CTCL.
Previous wording
Revenues for the Public Health Solutions business segment for the year ended December 31, 2023 were $444,235 as compared to $916,982 for the year ended December 31, 2022, representing a decrease of $472,747 or 52%. The decrease in revenues was primarily the result of the recognition of licensing revenue in 2022 and the conclusion of the grant associated with the development of SGX943.
Current wording
Revenues for the Public Health Solutions business segment for the year ended December 31, 2024 were $0 as compared to $444,235 for the year ended December 31, 2023, representing a decrease of $444,235 or 100%. The decrease in revenues was primarily the result of the conclusion of the grant associated with the development of SGX943.
Previous wording
Loss from operations for the Public Health Solutions business segment for the year ended December 31, 2023 was $36,531 as compared to income from operations of $26,612 for the year ended December 31, 2022, representing a decrease of $63,143 or 237%. The loss for the year ended December 31, 2023 is attributable to the recognition of licensing revenue in 2022 and additional expenses incurred due to the expiration of grants and contracts. Loss from operations for the Specialized BioTherapeutics business segment for the year ended December 31, 2023 was $2,812,303 as compared to $7,614,988 for the year ended December 31, 2022, representing a decreased loss of $4,802,685 or 63%. This decreased loss is primarily attributed to the decrease in manufacturing and regulatory costs associated with the HyBryte™ NDA filing.
Current wording
Loss from operations for the Public Health Solutions business segment for the year ended December 31, 2024 was $254,576 as compared to loss from operations of $36,531 for the year ended December 31, 2023, representing an increase in loss of $218,045 or 597%. The loss for the year ended December 31, 2024 is attributable to additional expenses incurred due to the expiration of grants and contracts. Loss from operations for the Specialized BioTherapeutics business segment for the year ended December 31, 2024 was $4,365,034 as compared to $2,812,303 for the year ended December 31, 2023, representing an increase in loss of $1,552,731 or 55%. This increase in loss is primarily related to preliminary costs associated with the initiation of our Phase 2 study in Behçet’s Disease and the second confirmatory Phase 3 CTCL trial offset by an adjustment of estimated accruals for completed clinical trials.
Previous wording
As of December 31, 2023, we had cash and cash equivalents of $8,446,158 as compared to $13,359,615 as of December 31, 2022, representing a decrease of $4,913,457 or 37%. As of December 31, 2023, we had working capital of $3,355,212, representing an increase of $6,018,933 as compared to a working capital deficit of ($2,663,721) for the prior year. The decrease in cash and cash equivalents was primarily related to cash used in operating activities. The increase in working capital is primarily the result of the net proceeds received from financing activities partially offset by the immediate paydown of $5 million of outstanding debt principal balance and any accrued interest resulting from the amendment to the convertible debt financing agreement with Pontifax during the year ended December 31, 2023.
Current wording
As of December 31, 2024, we had cash and cash equivalents of $7,819,514 as compared to $8,446,158 as of December 31, 2023, representing a decrease of $626,644 or 7%. As of December 31, 2024, we had working capital of $3,980,218, representing an increase of $625,006 as compared to working capital of $3,355,212 for the prior year. The decrease in cash and cash equivalents was primarily related to cash used in operating activities and debt principal repayments offset by cash provided by financing activities. The increase in working capital is primarily the result of a reduction in outstanding convertible debt resulting from principal repayments and debt conversions partially offset by cash used in operating activities during the year ended December 31, 2024.
Previous wording
We believe that we have sufficient resources available to support our development activities and business operations and timely satisfy our obligations as they become due into the fourth quarter of 2024. We do not have sufficient cash and cash equivalents as of the date of filing this Annual Report on Form 10-K to support our operations for at least the 12 months
Current wording
We believe that we have sufficient resources available to support our development activities and business operations and to satisfy our obligations as they become due through the end of 2025. However, as of the date of filing this Annual Report on Form 10-K, we do not have sufficient cash and cash equivalents to support our operations for at least 12 months following the issuance of our financial statements on March 21, 2025. As a result, these conditions raise substantial doubt about our ability to continue as a going concern through 12 months after the issuance date of the financial statements
Previous wording
To alleviate the conditions that raise substantial doubt about our ability to continue as a going concern, we plan to secure additional capital, potentially through a combination of public or private equity offerings and strategic transactions, including potential alliances and drug product collaborations, securing additional proceeds from government contract and grant programs, securing additional proceeds available from the sale of shares of our common stock via an At Market Issuance Sales Agreement and potentially amending the loan agreement with Pontifax to reduce the conversion price in order to allow for conversion of a portion of the debt which will reduce our debt repayments; however, none of these alternatives are committed at this time. There can be no assurance that we will be successful in obtaining sufficient funding on terms acceptable to us to fund continuing operations, if at all, identify and enter into any strategic transactions that will provide the capital that we will require or achieve the other strategies to alleviate the conditions that raise substantial doubt about our ability to continue as a going concern. If none of these alternatives are available, or if available, are not available on satisfactory terms, we will not have sufficient cash resources and liquidity to fund our business operations for at least the 12 months following the date the financial statements are issued. The failure to obtain sufficient capital on acceptable terms when needed may require us to delay, limit, or eliminate the development of business opportunities and our ability to achieve our business objectives and our competitiveness, and our business, financial condition, and results of operations will be materially adversely affected. In addition, market instability, including as a result of geopolitical instability, may reduce our ability to access capital, which could negatively affect our liquidity and ability to continue as a going concern. In addition, the perception that we may not be able to continue as a going concern may cause others to choose not to deal with us due to concerns about our ability to meet our contractual obligations.
Current wording
To alleviate the conditions that raise substantial doubt about our ability to continue as a going concern, our plans include securing:
Previous wording
On February 9, 2023, we completed a reverse stock split of our issued and outstanding shares of common stock at a ratio of one-for-fifteen, whereby, every fifteen shares of our issued and outstanding common stock was converted automatically into one issued and outstanding share of common stock without any change in the par value per share. No fractional shares were issued as a result of the reverse stock split. Any fractional shares that would otherwise have resulted from the reverse stock split were rounded up to the next whole number. Our common stock began trading on The NASDAQ Capital Market on a reverse split basis at the market opening on February 10, 2023. All share and per share data have been restated to reflect this reverse stock split.
Current wording
On June 5, 2024, we completed a reverse stock split of our issued and outstanding shares of common stock at a ratio of one-for-sixteen, whereby every sixteen shares of our issued and outstanding common stock were automatically combined into one issued and outstanding share of common stock without any change in the par value per share. No fractional shares were issued as a result of the reverse stock split. Any fractional shares that would otherwise have resulted from the reverse stock split were rounded up to the next whole number. Our common stock began trading on The Nasdaq Capital Market on a reverse split basis at the market opening on June 6, 2024. All share and per share data have been restated to reflect this reverse stock split.
Previous wording
Under our budget and based upon our existing product development agreements and license agreements pursuant to letters of intent and option agreements, we expect our total research and development expenditures for the year ending December 31, 2024 to be approximately $5.5 million before any contract or grant reimbursements, of which approximately all relates to the Specialized BioTherapeutics business segment. We anticipate grant reimbursements for the same period of approximately $0.3 million to offset research and development expenses in the Specialized BioTherapeutics business segment.
Current wording
Under our budget and based upon our existing product development agreements and license agreements pursuant to letters of intent and option agreements, we expect our total research and development expenditures for the year ending December 31, 2025 to be approximately $6 million before any contract or grant reimbursements, of which approximately all relates to the Specialized BioTherapeutics business segment. We anticipate grant reimbursements for the same period of approximately $0.1 million to offset research and development expenses in the Specialized BioTherapeutics business segment.
Previous wording
We currently lease approximately 6,200 square feet of office space at 29 Emmons Drive, Suite B-10 in Princeton, New Jersey. This office space currently serves as our corporate headquarters, and both of our business segments (Specialized BioTherapeutics and Public Health Solutions), operate from this space. Pursuant to an amendment on June 21, 2022, the lease has been extended to October 2025. The current rent of $11,367 per month will be maintained until November 2024 when it will be increased to $11,625 where it will remain until expiration. Our office space is sufficient for our current needs.
Current wording
We currently lease approximately 6,200 square feet of office space at 29 Emmons Drive, Suite B-10 in Princeton, New Jersey. This office space currently serves as our corporate headquarters, and both of our business segments (Specialized BioTherapeutics and Public Health Solutions), operate from this space. Pursuant to the lease which expires October 2025, the current rent is $11,625 per month. Our office space is sufficient for our current needs.
Previous wording
In September 2014, we entered into an asset purchase agreement with Hy Biopharma pursuant to which we acquired certain intangible assets, properties and rights of Hy Biopharma related to the development of Hy BioPharma’s synthetic hypericin product. As consideration for the assets acquired, we initially paid $275,000 in cash and issued 12,328 shares of common stock with a fair value based upon our stock price on the date of grant of $3.75 million. These amounts were charged to research and development expense during the third quarter of 2014 as the assets will be used in our research and development activities and do not have alternative future use pursuant to generally accepted accounting principles in the U.S.
Current wording
In September 2014, we entered into an asset purchase agreement with Hy Biopharma pursuant to which we acquired certain intangible assets, properties and rights of Hy Biopharma related to the development of Hy BioPharma’s synthetic hypericin product. As consideration for the assets acquired, we initially paid $275,000 in cash and issued 771 shares of common stock with a fair value based upon our stock price on the date of grant of $3.75 million. These amounts were charged to research and development expense during the third quarter of 2014 as the assets will be used in our research and development activities and do not have alternative future use pursuant to generally accepted accounting principles in the U.S.
Previous wording
In January 2020, our Board of Directors authorized an amendment to Dr. Schaber’s employment agreement to increase the number of shares of common stock from 334 to 33,334, issuable to Dr. Schaber immediately prior to the completion of a transaction, or series or a combination of related transactions, negotiated by our Board of Directors whereby, directly or indirectly, a majority of our capital stock or a majority of our assets are transferred from us and/or our stockholders to a third party.
Current wording
In January 2020, our Board of Directors authorized an amendment to Dr. Schaber’s employment agreement to increase the number of shares of common stock from 21 to 2,084, issuable to Dr. Schaber immediately prior to the completion of a transaction, or series or a combination of related transactions, negotiated by our Board of Directors whereby, directly or indirectly, a majority of our capital stock or a majority of our assets are transferred from us and/or our stockholders to a third party.
Previous wording
In March 2020, we filed a prospectus supplement covering the offer and sale of up to 130,413 shares of our common stock, which were issued to Hy Biopharma. We were required to issue the shares to Hy Biopharma as payment following the achievement of a milestone under the asset purchase agreement, specifically, the Phase 3 clinical trial of HyBryte™ being successful in the treatment of CTCL. The number of shares of our common stock issued to Hy Biopharma was calculated using an effective price of $38.40 per share, based upon a formula set forth in the asset purchase agreement.
Current wording
In March 2020, we filed a prospectus supplement covering the offer and sale of up to 8,151 shares of our common stock, which were issued to Hy Biopharma. We were required to issue the shares to Hy Biopharma as payment following the achievement of a milestone under the asset purchase agreement, specifically, the Phase 3 clinical trial of HyBryte™ being successful in the treatment of CTCL. The number of shares of our common stock issued to Hy Biopharma was calculated using an effective price of $614.40 per share, based upon a formula set forth in the asset purchase agreement.
Previous wording
In December 2020, we entered into a $20 million convertible debt financing agreement with Pontifax, the healthcare-dedicated venture and debt fund of the Pontifax life science funds. Under the terms of the agreement with Pontifax, we had access to up to $20 million in convertible debt financing in three tranches, which will mature on June 15, 2025 and had an interest only period through December 2022 with a rate of 8.47% on borrowed amounts and a 1% rate on amounts available but not borrowed as an unused line of credit fee. After the interest-only period, the outstanding principal was to be repaid in quarterly payments of $1 million each commencing in the first quarter of 2023. The agreement is secured by a lien covering substantially all of our assets, other than intellectual property.
Current wording
In December 2020, we entered into a $20 million convertible debt financing agreement with Pontifax (the “Loan Agreement”), the healthcare-dedicated venture and debt fund of the Pontifax life science funds. Under the terms of the Loan Agreement, we had access to up to $20 million in convertible debt financing in three tranches, which will mature on June 15, 2025 and had an interest only period for the first two years with a fixed interest rate of 8.47% on borrowed amounts and an interest rate of 1% on amounts available but not borrowed as an unused line of credit fee. After the interest-only period, the outstanding principal was to be repaid in quarterly payments of $1 million each commencing in the first quarter of 2023. The agreement is secured by a lien covering substantially all of our assets, other than intellectual property.
Previous wording
On April 19, 2023, we entered into an amendment to the convertible debt financing agreement with Pontifax. The amendment required the immediate payment of $5 million of the outstanding principal balance and any accrued interest, waived any prepayment charge in connection with the repayment of this amount and resulted in an outstanding principal balance of $3 million. The amendment also provided for a new interest only period from the date of the amendment through June 30, 2024, reduced quarterly principal repayments from $1 million to $750,000 and eliminated the minimum cash covenant. Further, the Amendment reduced the conversion price with respect to the remaining principal amount under the agreement to (i) 90% of the closing price of our common stock on the day before the delivery of the conversion notice with respect to the first 588,599 shares of our common stock issuable upon conversion and to (ii) $1.70 with respect to all shares of our common stock issuable upon conversion in excess of the first 588,599 shares so issued. The remaining terms of the agreement remain in effect without modification.
Current wording
In April 2023, we entered into an amendment to the Loan Agreement (the “2023 Amendment”). The 2023 Amendment called for the immediate payment of $5 million of the outstanding principal balance and any accrued interest, waived any prepayment charge in connection with the repayment of this amount and resulted in an outstanding principal balance of $3 million. The 2023 Amendment also provided for interest only through June 30, 2024, reduced quarterly principal repayments to $750,000 and eliminated the minimum cash covenant. Further, the 2023 Amendment reduced the conversion price with respect to the remaining principal amount to (i) 90% of the closing price of our common stock on the day before the delivery of a conversion notice with respect to the first 36,790 shares of our common stock issuable upon conversion and to (ii)
Previous wording
The amendment to the convertible debt financing agreement with Pontifax Medison Finance (“Pontifax”) – see Note 5 –, resulted in the extinguishment of the original convertible debt for accounting purposes. We elected to account for the amended convertible debt using the fair value option, which requires us to record changes in fair value as a component of other income or expense. The fair value of the convertible debt on the date of the amendment was approximately $3,304,000, which resulted in the recognition of a loss on extinguishment of approximately $394,000 on our accompanying consolidated statements of operations during the year ended December 31, 2023. The fair value of the convertible debt as of December 31, 2023 was approximately $3,260,934, which resulted in the recognition of $43,066 of other income from
Current wording
The 2023 Amendment resulted in the extinguishment of the original convertible debt for accounting purposes. We elected to account for the amended convertible debt using the fair value option. The fair value of the convertible debt on the date of the amendment was approximately $3,304,000, which resulted in the recognition of a loss on extinguishment of approximately $394,000 on our accompanying consolidated statements of operations for the year ended December 31, 2023. The fair value of the convertible debt as of December 31, 2023 was approximately $3,260,934, which resulted in the recognition of $43,066 of other income from the change in the fair value of the convertible debt on our accompanying consolidated statements of operations for the year ended December 31, 2023. For 2023 and through the 2024 Amendment (described below), the fair value of the convertible debt was estimated using the Monte Carlo valuation method.
Previous wording
We qualified for the CARES ERC for qualified wages through September 30, 2021. We have submitted filings for refunds of the CARES ERC but cannot reasonably estimate when or if we will receive any or all of the requested refunds. We have elected to follow subtopic 450-30 of the FASB Accounting Standards Codification and to account for the CARES ERC only when all uncertainties regarding realization have been resolved. During October 2023, we received a refund of $120,771. The refund was recorded as other income on our accompanying consolidated statements of operations.
Current wording
We qualified for the CARES ERC for qualified wages through September 30, 2021. We have submitted filings for refunds of the CARES ERC but cannot reasonably estimate when or if we will receive any or all of the requested refunds. We have elected to follow subtopic 450-30 of the FASB Accounting Standards Codification and to account for the CARES ERC only when all uncertainties regarding realization have been resolved. For the years ended December 31, 2024 and 2023, we
Previous wording
The information required by this Item 8 is contained on pages F-1 through F-22 of this Annual Report on Form 10-K and is incorporated herein by reference.
Current wording
The information required by this Item 8 can be found beginning on page F-1 of this Annual Report on Form 10-K and is incorporated herein by reference.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
As part of the process of preparing our financial statements, we are required to estimate our accrued research and development expenses. This process involves reviewing open contract and purchase orders, communicating with our
Current report — wording carried from elsewhere
$27.20 with respect to all shares of our common stock issuable upon conversion thereafter. The remaining terms of the agreement remained unmodified.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.
Previous report — wording carried elsewhere
the change in the fair value of the convertible debt on our accompanying consolidated statements of operations during the year ended December 31, 2023. The fair value of the convertible debt was estimated using the Monte Carlo valuation method.
Previous report — wording carried elsewhere
following the date the financial statements are issued. These conditions raise substantial doubt about our ability to continue as a going concern through 12 months after the date that the financial statements are issued.