Mosaic ImmunoEngineering Inc.

Previous wording

We are a development-stage biotechnology company focused on advancing and eventually commercializing immunotherapies for the treatment of cancer. We have historically advanced early-stage product candidates and we are pursuing new product candidates and platforms to expand our pipeline based on a deep understanding of immunotherapies.

Current wording

We are a development-stage biotechnology company focused on advancing and eventually commercializing immunotherapies for the treatment of cancer. We have historically advanced early-stage product candidates and we are pursuing new product candidates and platforms to build a new pipeline based on a deep understanding of immunotherapies.

Previous wording

If we enter into a definitive agreement under the terms of the Binding Term Sheet, our present stockholders will experience immediate substantial dilution and will not have control of our majority voting securities. If we do not receive shareholder approval for the transaction and receive the required waivers from the holders of the Convertible Notes by December 31, 2024, as amended, we may not be able to enter into a definitive agreement with Oncotelic, and we may need to cease our operations altogether. On August 9, 2024, the expiration date to enter into a possible transaction with Oncotelic was extended from July 25, 2024 to December 31, 2024.

Current wording

If we enter into a definitive agreement under the terms of the Binding Term Sheet, our present stockholders will experience immediate substantial dilution and will not have control of our majority voting securities. In addition, if we do not receive shareholder approval for a possible transaction by Juen 30, 2025, as amended, we may not be able to enter into a definitive agreement with Oncotelic, and we may need to cease our operations altogether. Currently, we and Oncotelic are continuing to pursue a potential transaction under the Binding Term Sheet although there are no guarantees we will enter into any definitive agreement. On December 31, 2024, the expiration date to enter into a possible transaction with Oncotelic was extended to June 30, 2025.

Previous wording

On November 18, 2024, we entered into a convertible note purchase agreement (“Note Purchase Agreement”) with an accredited investor (“Investor”) for proceeds of up to $200,000 to be used for general corporate purposes. Upon funding, the Company will issue an unsecured convertible note that will bear interest at a rate of 5% per annum and will be due and payable upon closing a financing of at least $10.0 million or convertible into shares of common stock of the Company, at the sole discretion of the accredited investor. The number of shares of common stock to be issued, if converted, would be equal to the unpaid principal amount and accrued and unpaid interest thereon divided by the closing price of our common stock on the date that is one day prior to such election.

Current wording

On November 18, 2024, we entered into an unsecured convertible promissory note (“Note Purchase Agreement”) with an accredited investor (“Investor”) for proceeds of up to $200,000 to be used for general corporate purposes. On December 4, 2024, the Company received $200,000 under the note purchase agreement and issued an unsecured convertible note bearing interest at a rate of 5% per annum that is due and payable upon closing a financing of at least $10.0 million or convertible into shares of common stock of the Company, at the sole discretion of the accredited investor. The number of shares of common stock to be issued, if converted, would be equal to the unpaid principal amount and accrued and unpaid interest thereon divided by the closing price of our common stock on the date that is one day prior to such election. During the three months ended March 31, 2025, the Company recorded interest expense on the note payable of $2,466. As of March 31, 2025, the Company has accrued $3,206 in interest that is included in other accrued expenses within the accompanying unaudited condensed consolidated balance sheet.

Previous wording

Research and development expenses of approximately $40,000 for the three months ended September 30, 2024 are primarily related to salaries and related costs for personnel in research and development functions and related consulting fees. The decrease in research and development expenses of approximately $45,000 for the three months ended September 30, 2024 as compared to the same prior year period was primarily due to a decrease in payroll and related costs of approximately $36,000 due to a reduced time commitment by certain employees, combined with a decrease in consulting fees of approximately $7,000 due to a lower time commitment by our independent contractors. We believe our research and development expenses will increase significantly over time if we are able to raise sufficient capital to advance our programs.

Current wording

Research and development expenses of approximately $16,000 for the three months ended March 31, 2025 are primarily related to salaries and related costs for personnel in research and development functions. The decrease in research and development expenses of approximately $52,000 for the three months ended March 31, 2025 as compared to the same prior year period was primarily due to a decrease in payroll and related costs due to a reduced time commitment by certain employees. We believe our research and development expenses will increase significantly over time if we are able to raise sufficient capital to advance our programs.

Previous wording

General and administrative expenses of approximately $147,000 for the three months ended September 30, 2024 consist principally of salaries and related costs for personnel and consultants in executive and administrative functions of approximately $124,000, accounting and filing fees of approximately $10,000, director and officer insurance of approximately $9,000, and other expenses of approximately $4,000. The decrease in general and administrative expenses of approximately $80,000 for the three months ended September 30, 2024 as compared to the same prior year period was primarily due to (i) a decrease in payroll and related expenses of approximately $58,000 due to a reduced time commitment by certain employees, (ii) a decrease in accounting and filing fees of approximately $7,000 due to timing of services provided, and (iii) a decrease in legal fees related to intellectual property rights of approximately $12,000 primarily related to lower patent fees owed under the former license agreement with Case Western Reserve University. We believe our general and administrative expenses will increase over time as we hire new employees to support key administrative functions and the planned expansion of research and development personnel, provided we are able to raise sufficient capital to advance our programs.

Current wording

General and administrative expenses of approximately $159,000 for the three months ended March 31, 2025 consist principally of salaries and related costs for personnel and consultants in executive and administrative functions of approximately $109,000, accounting and filing fees of approximately $37,000, director and officer insurance of approximately $8,000, and other expenses of approximately $5,000. The decrease in general and administrative expenses of approximately $42,000 for the three months ended March 31, 2025 as compared to the same prior year period was primarily due to (i) a decrease in payroll and related expenses of approximately $67,000 due to a reduced time commitment by certain employees, (ii) a decrease in other expenses of approximately $1,000 offset by an increase in accounting and filing fees of approximately $26,000 due to timing of services provided. We believe our general and administrative expenses will increase over time as we hire new employees to support key administrative functions and the planned expansion of research and development personnel, provided we are able to raise sufficient capital to advance our programs.

Previous wording

Interest expense of approximately $21,000 and $18,000 for the three months ended September 30, 2024 and 2023, respectively, represents interest expense on convertible notes and loan payable.

Current wording

Interest expense of approximately $21,000 and $18,000 for the three months ended March 31, 2025 and 2024, respectively, represents interest expense on convertible notes and loan payables.

Previous wording

Accretion to redemption value on convertible notes of approximately $1,000 and $14,000 for the nine months ended September 30, 2024 and 2023, respectively, pertains to the accretion of the convertible notes to their redemption value of $1,145,790 over the estimated conversion period using the effective interest method. The Convertible Notes have been accreted to their full Redemption Value as of March 31, 2024.

Current wording

Accretion to redemption value on convertible notes of approximately $1,000 for the three months ended March 31, 2024 pertains to the accretion of the convertible notes to their redemption value using the effective interest method. The Convertible Notes have been accreted to their full redemption value as of March 31, 2024.

Previous wording

As of September 30, 2024, we had cash and cash equivalents of $5,736. Our ability to continue our operations is highly dependent on our ability to raise capital to fund future operations. We anticipate, based on currently proposed plans and assumptions, that our cash on hand will not satisfy our operational and capital requirements through twelve months from the filing date of this Quarterly Report.

Current wording

As of March 31, 2025, we had cash and cash equivalents of approximately $86,000. Our ability to continue our operations is highly dependent on our ability to raise capital to fund future operations. We anticipate, based on currently proposed plans and assumptions, that our cash on hand will not satisfy our operational and capital requirements through twelve months from the filing date of this Annual Report.

Previous wording

Our primary uses of capital to date are primarily related to payroll, consulting and related costs, corporate formation and ongoing public company expenses, fees associated with license agreements, including patent related expenses, and costs of the reverse merger. On a go forward basis, we will need significant additional capital to support our research and development efforts, compensation and related expenses, and hiring additional staff (including clinical, scientific, operational, financial, and management personnel) and to reduce our current liabilities. We expect to incur substantial expenditures in the foreseeable future for the research and development of new potential product candidates, provided we are able to raise sufficient capital to advance these technologies and technologies under the Binding Term Sheet, as noted below.

Current wording

Our primary uses of capital to date are primarily related to payroll, consulting and related costs, corporate formation and ongoing public company expenses, audit fees, fees associated with license agreements, including patent-related expenses, and costs of the reverse merger. Pending our ability to identify new product candidates and license or acquire those rights, then on a go forward basis, we will need significant additional capital to support our research and development efforts, compensation and related expenses, and hiring additional staff (including clinical, scientific, operational, financial, and management personnel) and to reduce our current liabilities. Pending our ability to identify new product candidates and license or acquire those rights, we would expect to incur substantial expenditures in the foreseeable future for the research and development of new potential product candidates, provided we are able to raise sufficient capital to advance these technologies and technologies under the Binding Term Sheet, as noted below.

Previous wording

If we do not receive shareholder approval for the potential transaction and receive the required waivers from the holders of the Convertible Notes by December 31, 2024, as amended, we may not be able to enter into a definitive agreement with Oncotelic, and we may need to cease our operations altogether. On August 9, 2024, the expiration date to enter into a possible transaction with Oncotelic was extended from July 25, 2024 to December 31, 2024.

Current wording

If we enter into a definitive agreement under the terms of the Binding Term Sheet, our present stockholders will experience immediate substantial dilution and will not have control of our majority voting securities. In addition, if we do not receive shareholder approval for a possible transaction by Juen 30, 2025, as amended, we may not be able to enter into a definitive agreement with Oncotelic, and we may need to cease our operations altogether. Currently, we and Oncotelic are continuing to pursue a potential transaction under the Binding Term Sheet although there are no guarantees we will enter into any definitive agreement. On December 31, 2024, the expiration date to enter into a possible transaction with Oncotelic was extended to June 30, 2025.

Previous wording

On November 18, 2024, we entered into a convertible note purchase agreement (“Note Purchase Agreement”) with an accredited investor (“Investor”) for proceeds of up to $200,000 to be used for general corporate purposes. Upon funding, the Company will issue an unsecured convertible note that will bear interest at a rate of 5% per annum and will be due and payable upon closing a financing of at least $10.0 million or convertible into shares of common stock of the Company, at the sole discretion of the accredited investor. The number of shares of common stock to be issued, if converted, would be equal to the unpaid principal amount and accrued and unpaid interest thereon divided by the closing price of our common stock on the date that is one day prior to such election.

Current wording

On November 18, 2024, we entered into an unsecured convertible promissory note (“Note Purchase Agreement”) with an accredited investor (“Investor”) for proceeds of up to $200,000 to be used for general corporate purposes. On December 4, 2024, the Company received $200,000 under the note purchase agreement and issued an unsecured convertible note bearing interest at a rate of 5% per annum that is due and payable upon closing a financing of at least $10.0 million or convertible into shares of common stock of the Company, at the sole discretion of the accredited investor. The number of shares of common stock to be issued, if converted, would be equal to the unpaid principal amount and accrued and unpaid interest thereon divided by the closing price of our common stock on the date that is one day prior to such election.

Previous wording

There are a number of uncertainties associated with our ability to raise additional capital and we have no current arrangements with respect to any additional financing. If we raise funds from the issuance of equity securities (which will be challenging in light of current market conditions combined with our limited technologies), substantial dilution to our existing stockholders would likely result. If we raise additional funds by incurring debt financing (also challenging in light of current market conditions combined with our limited technologies), the terms of the debt may involve significant cash payment obligations as well as covenants and specific financial ratios that may restrict our ability to operate our business. Since the closing date of the Reverse Merger, our limited cash position has required us to perform only limited development activities and to delay and scale back our development programs and other activities to remain afloat. If we continue to have insufficient funds, we may be required to cease our operations altogether.

Current wording

We plan to continue to fund losses from operations and future funding needs through our cash on hand and future potential equity and/or debt offerings. There are a number of uncertainties associated with our ability to raise additional capital and we have no current arrangements with respect to any additional financing. If we raise funds from the issuance of equity securities (which will be challenging in light of current market conditions combined with our limited technologies), substantial dilution to our existing stockholders would likely result. If we raise additional funds by incurring debt financing (also challenging in light of current market conditions combined with our limited technologies), the terms of the debt may involve significant cash payment obligations as well as covenants and specific financial ratios that may restrict our ability to operate our business. Since the closing date of the Reverse Merger, our limited cash position has required us to perform only limited development activities and to delay and scale back our development programs and other activities to remain afloat. If we continue to have insufficient funds, we may be required to cease our operations altogether.

Previous wording

The following table provides a summary of our net cash flow activity for the nine months ended September 30, 2024 and 2023:

Current wording

The following table provides a summary of our net cash flow activity for the three months ended March 31, 2025 and 2024:

Previous wording

Net cash used in operating activities for the nine months ended September 30, 2024 consisted of our net loss of $768,939, which amount was offset by (i) non-cash share-based compensation expense of $4,867, (ii) non-cash interest expense of $58,999, (iii) the accretion to redemption value on convertible notes of $1,446, and (iv) a net change in operating assets and liabilities of $483,185 primarily due to an increase in accrued compensation of $456,939.

Current wording

Net cash used in operating activities for the three months ended March 31, 2024 consisted of our net loss of $288,492, which amount was offset by (i) non-cash share-based compensation expense of $4,867, (ii) non-cash interest expense of $18,283, (iii) the accretion to redemption value on convertible notes of $1,446, and (iv) a net change in operating assets and liabilities of $172,757 primarily due to an increase in accounts payable and accrued compensation of $173,008, in aggregate.