Azitra Inc
For the period ended Jun 30, 2024. Filed Aug 12, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 12, 2024
AZTR$0.73+1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-09.
0001701478-24-000005
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-12.
0001701478-24-000009
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe 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 54 previous paragraphs and 65 current paragraphs.
35 unchanged; 17 reworded; 7 added; 2 removed; 0 previous and 6 current paragraphs rearranged.
Tables are not compared: 2 previous and 3 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 (7)
Current report
General and administrative costs during the second quarter of fiscal 2024 increased by $704,589, or 83%, to $1,549,228 from the comparable prior period. The increase was primarily related to the costs incurred following, and as a result of, our emergence as a public company in June 2023, including $157,000 of salaries and benefits primarily related to the hiring of our COO, an increase of $139,000 primarily related to the hiring of our CFO consultant, an increase of $257,000 primarily related to costs associated with listing on the NYSE, an increase of $89,000 primarily related to the cost of directors and officers insurance, an increase of $88,000 in public relations expenditures, an increase of $77,000 in legal costs, an increase of $18,000 in Board member costs, an increase of $18,000 in conference expense offset by a decrease of $136,000 in accounting and audit expenses and a net decrease of $2,409 in other overhead expenses.
Current report
Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
Current report
Service Revenue - Related Party
Current report
General and Administrative
Current report
General and administrative costs during the first six months of fiscal 2024 increased by $1,350,106, or 80%, to $3,037,755 from the prior year period. The increase was primarily related to the costs incurred following, and as a result of, our emergence as a public company in June 2023, including an increase of $299,000 of salaries and benefits primarily related to the hiring of or COO, an increase of $260,000 primarily related to the hiring of our CFO consultant, an increase of $342,000 primarily related to costs associated with listing on the NYSE, an increase of $204,000 primarily related to the cost of directors and officers insurance, an increase of $123,000 in public relations expenditures, an increase of $147,000 in legal costs, an increase of $48,000 in Board member costs, an increase of $32,000 in conference expense offset by a decrease of $142,000 in accounting and audit expenses and a net increase of $37,106 in other overhead expenses.
Current report
During the first six months of fiscal 2024, research and development expenses increased by $1,007,535, or 64%, to $2,591,522 from the prior year period. The increase was primarily related to a increase of $153,000 in research and development related costs attributable to our efforts in moving our ATR-12 program forward into the clinic, an increase of $272,000 attributable to the use of clinical consultants, an increase of $642,000 attributable to moving our ATR-04 program forward offset by a decrease of $56,000 related to the forgiveness of an accounts payable amount and a net decrease of $3,464 in other cost. There was $0 and $1,145 in government and nonprofit grant revenue received by us during the first six months of fiscal 2024 and 2023, respectively.
Current report
Other Income (Expense)
Removed paragraphs (2)
Previous report
General and administrative costs during the first quarter of fiscal 2024 increased by $645,515, or 77%, to $1,488,527 from the comparable prior period. The increase was primarily related to an increase of $641,842 in payroll and related costs due to the hiring of our chief operating officer, legal fees, listing fees with NYSE American Stock Exchange, premiums for our directors and officers insurance, investor and public relations costs, conference costs and a net increase of $3,673 in other overhead expenses.
Previous report
Research and Development
Reworded paragraphs (17)
Previous wording
In this report we make, and from time to time we otherwise make written and oral statements regarding our business and prospects, such as projections of future performance, statements of management’s plans and objectives, forecasts of market trends, and other matters that are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements containing the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimates,” “projects,” “believes,” “expects,” “anticipates,” “intends,” “target,” “goal,” “plans,” “objective,” “should” or similar expressions identify forward-looking statements, which may appear in our documents, reports, filings with the SEC, and news releases, and in written or oral presentations made by officers or other representatives to analysts, stockholders, investors, news organizations and others, and in discussions with management and other of our representatives.
Current wording
In this report we make statements, and from time to time we otherwise make written and oral statements regarding our business and prospects, such as projections of future performance, statements of management’s plans and objectives, forecasts of market trends, and other matters that are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements containing the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimates,” “projects,” “believes,” “expects,” “anticipates,” “intends,” “target,” “goal,” “plans,” “objective,” “should” or similar expressions identify forward-looking statements, which may appear in our documents, reports, filings with the SEC, and news releases, and in written or oral presentations made by officers or other representatives to analysts, stockholders, investors, news organizations and others, and in discussions with management and other of our representatives.
Previous wording
To date, we have capitalized our operations primarily through a series of private placements of our convertible preferred stock and convertible promissory notes and our initial public offering, IPO, of common stock which closed on June 21, 2023. In connection with our IPO, we issued 1.5 million shares of our common stock at a public offering price of $5 per share. Concurrent with the close of our IPO, all of our outstanding shares of convertible preferred stock and convertible promissory notes converted into a total of 8,951,526 shares of our common stock. In February 2024, we completed a follow-on public offering in which we issued and sold 16,667,000 shares of our common stock at a price to the public of $0.30 per share. As of May 9, 2024, we had 28,804,643 shares of our common stock issued and outstanding. Except as otherwise indicated, all share and share price this report gives effect to a forward stock split effected on May 17, 2023 at a ratio of 7.1-for-1.
Current wording
To date, we have capitalized our operations primarily through a series of private placements of our convertible preferred stock and convertible promissory notes and our initial public offering, IPO, of common stock which closed on June 21, 2023. In connection with our IPO, we issued 50,000 shares of our common stock at a public offering price of $150 per share. Concurrent with the close of our IPO, all of our outstanding shares of convertible preferred stock and convertible promissory notes converted into a total of 298,384 shares of our common stock. In February 2024, we completed a follow-on public offering in which we issued and sold 555,567 shares of our common stock at a price to the public of $9.00 per share. On July 25, 2024, the Company completed a follow-on offering of an aggregate of 6,665,000 shares of its common stock, and Class A warrants to purchase up to 13,330,000 shares of common stock, at a combined public offering price of $1.50 per share and accompanying warrants.
Previous wording
We focused on developing innovative therapies for precision dermatology using engineered proteins and topical live biotherapeutic products. We have built a proprietary platform that includes a microbial library comprised of approximately 1,500 unique bacterial strains that can be screened for unique therapeutic characteristics. The platform is augmented by an artificial intelligence and machine learning technology that analyzes, predicts and helps screen our library of strains for drug like molecules. The platform also utilizes a licensed genetic engineering technology, which can enable the transformation of previously genetically intractable strains. Our initial focus is on the development of genetically engineered strains of Staphylococcus epidermidis, or S. epidermidis, which we consider to be an optimal therapeutic candidate species for engineering of dermatologic therapies. The particular species demonstrates a number of well-described properties in the skin. As of the date of this report, we have identified among our microbial library over 60 distinct bacterial species that we believe are capable of being engineered to create living organisms or engineered proteins with significant therapeutic effect.
Current wording
We focus on developing innovative therapies for precision dermatology using engineered proteins and topical live biotherapeutic products. We have built a proprietary platform that includes a microbial library comprised of approximately 1,500 unique bacterial strains that can be screened for unique therapeutic characteristics. The platform is augmented by an artificial intelligence and machine learning technology that analyzes, predicts and helps screen our library of strains for drug like molecules. The platform also utilizes a licensed genetic engineering technology, which can enable the transformation of previously genetically intractable strains. Our initial focus is on the development of genetically engineered strains of Staphylococcus epidermidis, or S. epidermidis, which we consider to be an optimal therapeutic candidate species for engineering of dermatologic therapies. The particular species demonstrates a number of well-described properties in the skin. As of the date of this report, we have identified among our microbial library over 60 distinct bacterial species that we believe are capable of being engineered to create living organisms or engineered proteins with significant therapeutic effect.
Previous wording
•ATR-12, a genetically modified strain of S. epidermidisfor treating the orphan disease, Netherton syndrome, a chronic and sometimes fatal disease of the skin estimated to affect approximately one in every 100,000, but its prevalence may be underestimated due to misdiagnosis caused by similarities to other skin diseases. We received Pediatric Rare Disease Designation for ATR-12 by the United States Food and Drug Administration, or FDA, in 2019. In December 2022, we submitted an investigational new drug application, or IND, for a Phase 1b clinical trial of ATR-12 in Netherton syndrome patients, and on January 27, 2023 we received notification from the FDA that the “study may proceed” with respect to the proposed Phase 1b clinical trial. After submitting post-IND manufacturing reports, we have commenced operating activities for our Phase 1b clinical trial in December 2023. We expect to report initial safety results in the second half of 2024.
Current wording
•ATR-12, a genetically modified strain of S. epidermidisfor treating the orphan disease, Netherton syndrome, a chronic and sometimes fatal disease of the skin estimated to affect approximately one in every 100,000, but its prevalence may be underestimated due to misdiagnosis caused by similarities to other skin diseases. We received Pediatric Rare Disease Designation for ATR-12 by the United States Food and Drug Administration, or FDA, in 2019. In December 2022, we submitted an investigational new drug application, or IND, for a Phase 1b clinical trial of ATR-12 in Netherton syndrome patients, and on January 27, 2023 we received notification from the FDA that the “study may proceed” with respect to the proposed Phase 1b clinical trial. After submitting post-IND manufacturing reports, we have commenced operating activities for our Phase 1b clinical trial in December 2023 and the trial has been opened for patient enrollment. We expect to report initial safety results by year-end 2024.
Previous wording
•ATR-04, a genetically modified strain of S. epidermidisfor treating the papulopustular rash experienced by cancer patients undergoing epidermal growth factor receptor inhibitor, or EGFRi, targeted therapy. We intend to submit an IND for a Phase 1b clinical trial in certain cancer patients undergoing EGFRi targeted therapy by mid-2024. Subject to FDA clearance of our IND, we expect to commence our Phase 1b clinical trial in the fourth quarter of 2024.
Current wording
•ATR-04, a genetically modified strain of S. epidermidisfor treating the papulopustular rash experienced by cancer patients undergoing epidermal growth factor receptor inhibitor, or EGFRi, targeted therapy. We intend to submit an IND for a Phase 1b clinical trial in certain cancer patients undergoing EGFRi targeted therapy in the third quarter of 2024. Subject to FDA clearance of our IND, we expect to commence our Phase 1b clinical trial in the fourth quarter of 2024.
Previous wording
•ATR-01, a genetically modified strain of S. epidermidis that expresses an engineered recombinant human filaggrin protein for treating ichthyosis vulgaris, a chronic, xerotic (abnormally dry), scaly skin disease with an estimated incidence and prevalence of 1 in 250, which suggests a total patient population of 1.3 million in the United States. We are planning to complete lead optimization and IND-enabling studies in 2024 to support an IND filing targeted for the second half of 2025.
Current wording
•ATR-01, a genetically modified strain of S. epidermidis that expresses an engineered recombinant human filaggrin protein for treating ichthyosis vulgaris, a chronic, xerotic (abnormally dry), scaly skin disease with an estimated incidence and prevalence of 1 in 250, which suggests a total patient population of 1.3 million in the United States. We are planning to perform lead optimization and IND-enabling studies in 2024 to support an IND filing targeted for the second half of 2025.
Previous wording
•Two separate strains of bacterial microbes being investigated and developed by us and Bayer Consumer Care AG, the consumer products division of Bayer AG, or Bayer, the international life science company. We entered into a Joint Development Agreement, or JDA, with Bayer in December 2019. Under the terms of the JDA, we are responsible for testing our library of bacterial strains and their natural products for key preclinical properties. After screening through hundreds of strains, we and Bayer have selected two particular strains to move forward into further development. Bayer holds the exclusive option to license the patent rights to these strains. In December 2020, Bayer purchased $8 million of our Series B preferred stock, which converted into 1,449,743 shares of our common stock.
Current wording
•Two separate strains of bacterial microbes being investigated and developed by us and Bayer Consumer Care AG, the consumer products division of Bayer AG, or Bayer, the international life science company. We entered into a Joint Development Agreement, or JDA, with Bayer in December 2019. Under the terms of the JDA, we are responsible for testing our library of bacterial strains and their natural products for key preclinical properties. After screening through hundreds of strains, we and Bayer have selected two particular strains to move forward into further development. Bayer holds the exclusive option to license the patent rights to these strains. In December 2020, Bayer purchased $8 million of our Series B preferred stock, which converted into 48,324 shares of our common stock.
Previous wording
•Advance our lead product candidates, ATR-12 and ATR-04, through clinical trials. In 2022, we obtained pre-IND correspondence with the FDA for purposes of discussing our proposed regulatory pathway for ATR-12 and obtaining guidance from the FDA on the preclinical plan leading to the filing and acceptance of an IND for ATR-12. In December 2022, we filed an IND for a first-in-human trial of ATR-12 in Netherton syndrome patients. On January 27, 2023, we received notification from the FDA that the “study may proceed” with respect to the proposed Phase 1b clinical trial. In April 2024, we held a pre-IND meeting with the FDA to discuss an IND filing for a first-in-human Phase 1b/2a clinical trial in patients with EGFRi-associted rash. We expect to report initial safety results of our Phase 1b clinical trial for our ATR-12 in Netherton syndrome patients in the second half of 2024 and are currently planning to commence a Phase 1b trial of our ATR-04 in certain cancer patients undergoing EGFRi therapy in the fourth quarter of 2024. We have a cleared IND for ATR-12 and expect to file an IND for ATR-04 in mid-2024.
Current wording
•Advance our lead product candidates, ATR-12 and ATR-04, through clinical trials. In 2022, we obtained pre-IND correspondence with the FDA for purposes of discussing our proposed regulatory pathway for ATR-12 and obtaining guidance from the FDA on the preclinical plan leading to the filing and acceptance of an IND for ATR-12. In December 2022, we filed an IND for a first-in-human trial of ATR-12 in Netherton syndrome patients. On January 27, 2023, we received notification from the FDA that the “study may proceed” with respect to the proposed Phase 1b clinical trial. In April 2024, we held a pre-IND meeting with the FDA to discuss an IND filing for a first-in-human Phase 1b/2a clinical trial in patients with EGFRi-associated rash. We expect to report initial safety results of our Phase 1b clinical trial for our ATR-12 in Netherton syndrome patients by year-end and are currently planning to commence a Phase 1b trial of our ATR-04 in certain cancer patients undergoing EGFRi therapy in the fourth quarter of 2024. We have a cleared IND for ATR-12 and expect to file an IND for ATR-04 in the third quarter of 2024.
Previous wording
We generated $0 of service revenue under the Bayer JDA during the first quarter of fiscal 2024 compared to service revenue of $113,300 under the JDA for the comparable period in fiscal 2023. The decrease of $113,300 in service revenue is attributable to a decrease in the amount of reimbursable development costs incurred in 2024.
Current wording
We generated $7,500 of service revenue under the Bayer JDA during the second quarter of fiscal 2024 compared to service revenue of $172,000 under the JDA for the comparable period in fiscal 2023. The decrease of $164,500 in service revenue is attributable to a decrease in the amount of reimbursable development costs incurred in 2024.
Previous wording
During the first quarter of fiscal 2024, research and development expenses increased by $643,935, or 78%, to $1,472,970 from the comparable prior period. The increase was primarily related to an increase of $237,794 in research and development related costs attributable to our efforts in moving our Netherton program into the clinic, $382,215 in research and development related costs attributable to advancing our CTAR program and a net increase of $23,926 in other miscellaneous costs. There was $0 and $1,145 government and nonprofit grant revenue received for the periods ended March 31, 2024 and 2023, respectively. There were no refundable tax credits for the periods ended March 31, 2024 and 2023.
Current wording
During the second quarter of fiscal 2024, research and development expenses increased by $363,601, or 48%, to $1,118,552 from the comparable prior period. The increase was primarily related to an increase of $12,000 in research and development related costs attributable to our efforts in moving our ATR-12 program forward into the clinic, an increase of $149,000 attributable to the use of clinical consultants, an increase of $191,000 attributable to moving our ATR-04 program forward and a net increase of $11,601 in other costs. There was no government and nonprofit grant revenue received by us during the second quarter of fiscal 2024 and 2023. There were no refundable tax credits for the three-month periods ended June 30, 2024 and 2023.
Previous wording
Our other income (expense) consists of interest income, change in fair value of convertible notes, interest expense, valuation of warrants, and loss on foreign currency. During the first quarter of fiscal 2024, other income (expense) decreased by $917,340, or 103%, compared to the comparable period in fiscal 2023. The decrease was primarily related to an decrease of $800,000 attributable to the change in fair value of the convertible note, a decrease of $89,832 attributable to interest expense, and by a net decrease of $27,508 attributable to other income and expense.
Current wording
Our other income (expense) consists valuation of warrants, loss on foreign currency translation, change in fair value of the convertible note and interest expense. During the second quarter of fiscal 2024, other income (expense) decreased by $3,030,225, or 101%, compared to the comparable period in fiscal 2023. The decrease was primarily related to a decrease of $2,830,100 attributable to the change in fair value of the convertible note, a decrease of $74,405 attributable to interest expense, a decrease of $98,504 in warrant value and a net decrease of $27,216 attributable to other income and expense.
Previous wording
As of March 31, 2024, we had total assets of approximately $6.1 million and working capital of approximately $2.3 million. As of March 31, 2024, our liquidity included approximately $3.0 million of cash and cash equivalents. We believe that our cash on-hand will not be sufficient to cover our proposed plan of operations over the next twelve months. We intend to seek additional funds through various financing sources, including the sale of our equity and debt securities, licensing fees for our technology and joint ventures with industry partners. In addition, we will consider alternatives to our current business plan that may enable us to achieve revenue producing operations and meaningful commercial success with a smaller amount of capital. However, there can be no guarantees that such funds will be available on commercially reasonable terms, if at all. If such financing is not available on satisfactory terms, we may be unable to further pursue our business plan and we may be unable to continue operations.
Current wording
As of June 30, 2024, we had total assets of approximately $3.9 million and working capital of approximately $(0.4) million. As of June 30, 2024, our liquidity included approximately $0.8 million of cash and cash equivalents. Following the quarter end, in July 2024, we completed a follow-on offering of an aggregate of 6,665,000 shares of our common stock and Class A warrants to purchase up to 13,330,000 shares of common stock, at a combined public offering price of $1.50 per share and accompanying warrants, for the net proceeds of $8.95 million. After giving effect to the July 2024 offering we believe that our cash on-hand as of the date of this report may not be sufficient to cover our proposed plan of operations over the next twelve months. We intend to seek additional funds through various financing sources, including the sale of our equity and debt securities, federal grants, licensing fees for our technology and joint ventures with industry partners. In addition, we will consider alternatives to our current business plan that may enable us to achieve revenue producing operations and meaningful commercial success with a smaller amount of capital. However, there can be no guarantees that such funds will be available on commercially reasonable terms, if at all. If such financing is not available on satisfactory terms, we may be unable to further pursue our business plan and we may be unable to continue operations.
Previous wording
During the first three months of fiscal 2024, operating activities used $3.0 million of cash primarily driven by our net loss of $2.9 million and by non-cash items of $0.1 million. During the comparable period of fiscal 2023, operating activities used $1.3 million of cash primarily driven by our net loss of 2.5 million offset by non-cash items of $1.2 million.
Current wording
During the first six months of fiscal 2024, operating activities used $5.1 million of cash primarily driven by our net loss of $5.6 million offset by non-cash items of $0.5 million. During the comparable period of fiscal 2023, operating activities used $3.0 million of cash primarily driven by our net loss of $6.9 offset by non-cash items of $3.9 million.
Previous wording
During the first three months of fiscal 2024, investing activities used $81,078 of cash driven by $81,078 of trademark and patent costs. During the comparable period of fiscal 2023, investing activities used $82,834 of cash primarily driven by $64,584 of trademark and patent costs, $14,392 for the purchase of furniture and equipment, and $3,858 of license costs.
Current wording
During the first six months of fiscal 2024, investing activities used $155,826 of cash driven by $155,826 trademark and patent costs. During the comparable period of fiscal 2023, investing activities used $162,138 of cash driven by $129,297 of trademark and patent costs, $17,578 for the purchase of furniture and equipment, and $15,263 of license costs.
Previous wording
During the first three months of fiscal 2024, financing activities provided $4.3 million in cash primarily driven by proceeds from our follow-on public offering. During the comparable period of fiscal 2023, financing activities used $0.3 million in cash primarily driven by deferred offering costs for the follow-on public offering.
Current wording
During the first six months of fiscal 2024, financing activities provided $4.3 million in cash primarily driven by proceeds from our February 2024 follow-on public offering. During the comparable period of fiscal 2023, financing activities used $6.0 million in cash primarily driven by deferred offering costs for our June 2023 IPO.
Previous wording
During the three months ended March 31, 2024, there were no material changes to our critical accounting policies previously disclosed in our Form 10-K dated December 31, 2023 and filed with the SEC on March 15, 2024.
Current wording
During the six months ended June 30, 2024, there were no material changes to our critical accounting policies previously disclosed in our Form 10-K dated December 31, 2023 and filed with the SEC on March 15, 2024.
Previous wording
Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts and experience. The effects of material revisions in estimates, if any, will be reflected in the consolidated financial statements prospectively from the date of change in estimates. There were no material changes to our critical accounting estimates as reported in our Form 10-K for the year ended December 31, 2023 and filed with the SEC on March 15, 2024.
Current wording
Our management’s discussion and analysis of our financial condition and results of operations are based on our condensed financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these condensed financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our condensed financial statements. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts and experience. The effects of material revisions in estimates, if any, will be reflected in the condensed financial statements prospectively from the date of change in estimates. There were no material changes to our critical accounting estimates as reported in our Form 10-K for the year ended December 31, 2023 and filed with the SEC on March 15, 2024.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
As of August 12, 2024, we had 7,625,056 shares of our common stock issued and outstanding. Except as otherwise indicated, all share and share price this report gives effect to a reverse stock split effected on July 1, 2024 at a ratio of 30-for-1.
Current report — wording carried from elsewhere
The following table summarizes our results of operations with respect to the items set forth below for the for the six months ended June 30, 2024 and 2023 together with the percentage change for those items.
Current report — wording carried from elsewhere
We generated $7,500 of service revenue under the Bayer JDA during the first six months of fiscal 2024 compared to service revenue of $285,300 under the JDA for the comparable period in fiscal 2023. The decrease of $277,800 in service revenue is attributable to a decrease in the amount of reimbursable development costs in 2024.
Current report — wording carried from elsewhere
Research and development expenses include salaries and benefits of all research personnel, payments to contract research organizations, payments to research consultants, and the purchase of lab supplies. These expenses are offset by income earned from government grant payments. We generate grant revenue on contracts with various federal agencies and nonprofit research institutions for general research conducted by us. These grant arrangements also do not meet the criteria for revenue recognition and amounts earned under these grant contracts are recorded as a negative research and development expense.
Current report — wording carried from elsewhere
We expect our research and development expenses to significantly increase in the future due primarily to our planned clinical trial activity and continued development of product candidates.
Current report — wording carried from elsewhere
Our other income (expense) consists valuation of warrants, loss on foreign currency translation, change in fair value of the convertible note and interest expense. During the first six months of fiscal 2024, other income (expense) decreased by $3,947,565, or 101%, compared to the comparable period in fiscal 2023. The decrease was primarily related to an decrease of $3,630,100 attributable to the change in fair value of the convertible note, an decrease of $163,323 attributable to interest expense, an decrease of $121,138 in warrant value and a net decrease of $33,004 attributable to other income and expense.