Chromocell Therapeutics Corp

Previous wording

We have formally launched two programs developing pain treatment therapeutics, both based on the same proprietary molecule, as follows:

Current wording

We have formally launched three programs developing pain treatment therapeutics, both based on the same proprietary molecule, as follows:

Previous wording

Neuropathic Pain: CC8464 is being developed to address certain types of neuropathic pain. The chemical characteristics of CC8464 restrict its entry into the CNS and limit its effect to the NaV1.7 receptors in the peripheral nervous system, which consists of the nerves outside the brain and spinal cord. Activation of other receptors in the CNS can result in side effects, including addiction and other centrally mediated adverse effects. Since CC8464 is designed to not penetrate the CNS it is highly unlikely to produce CNS mediated side effects including euphoria or addiction. Based on its characteristics, preclinical studies (described below) and the Phase 1 studies we have completed to date, we believe that CC8464, if approved, could become an attractive option for both patients and physicians as a treatment for moderate-to-severe pain in Erythromelalgia (“EM”) andidiopathic small fiber neuropathy (“iSFN”).

Current wording

Neuropathic Pain: CC8464 is being developed to address certain types of neuropathic pain. The chemical characteristics of CC8464 restrict its entry into the CNS and limit its effect to the NaV1.7 channels in the peripheral nervous system, which consists of the nerves outside the brain and spinal cord. Activation of other channels in the CNS can result in side effects, including addiction and other centrally mediated adverse effects. Since CC8464 is designed to not penetrate the CNS it is highly unlikely to produce CNS mediated side effects including euphoria or addiction. Based on its characteristics, preclinical studies (described below) and the Phase 1 studies we have completed to date, we believe that CC8464, if approved, could become an attractive option for both patients and physicians as a treatment for moderate-to-severe pain in Erythromelalgia (“EM”) andidiopathic small fiber neuropathy (“iSFN”).

Previous wording

Eye Pain: Based on the same proprietary molecule as CC8464, our newly launched program, titled CT2000, is for the potential treatment of both acute and chronic eye pain. NaV1.7 receptor is present on the cornea, making it a viable biological target for treating eye pain. Eye pain may occur with various conditions, including severe dry eye disease, trauma and surgery. Existing therapies for eye pain (such as steroids, topical non-steroidal anti-inflammatory agents, lubricants, local anesthetics) are limited in their effectiveness and/or limited in the duration that they may be prescribed because of safety issues. We intend to explore the viability of developing CT2000 as a topical agent for the relief of eye pain. A potential advantage of this approach is that topical administration of CT2000 is unlikely to lead to any hypersensitivity or skin reactions, like what was noted with systemic administration of CC8464, because the systemic absorption from a topical administration would be extremely limited. We have commenced development of a topical ophthalmic formulation of CT2000 that would initially be evaluated for ophthalmic toxicology and then followed by a POC trial in patients. We expect the trials for this ophthalmic formulation of CT2000 to start in 2025.

Current wording

Eye Pain: Based on the same proprietary molecule as CC8464, our Eye Pain program, titled CT2000, is for the potential treatment of both acute and chronic eye pain. NaV1.7 channels are present on the cornea, making it a viable biological target for treating eye pain. Eye pain may occur with various conditions, including severe dry eye disease, trauma and surgery. Existing therapies for eye pain (such as steroids, topical non-steroidal anti-inflammatory agents, lubricants, local anesthetics) are limited in their effectiveness and/or limited in the duration that they may be prescribed because of safety issues. We intend to explore the viability of developing CT2000 as a topical agent for the relief of eye pain. A potential advantage of this approach is that topical administration of CT2000 is unlikely to lead to any hypersensitivity or skin reactions, like what was noted with systemic administration of CC8464, because the systemic absorption from a topical administration would be extremely limited. We have commenced development of a topical ophthalmic formulation of CT2000 that would initially be evaluated for ophthalmic toxicology and then followed by a POC trial in patients. We expect the trials for this ophthalmic formulation of CT2000 to start in 2025.

Previous wording

As the NaV1.7 receptor is present on the cornea and is a viable biological target for treating eye pain, we believe that we have a sound scientific basis for our ability to treat a multitude of eye pain indications. We are in the process of formulating CT2000 eye drops and expect to move into animal toxicity studies in the second half of 2024. From there, we intend to move into proof-of-concept studies in humans.

Current wording

As NaV1.7 channels are present on the cornea and is a viable biological target for treating eye pain, we believe that we have a sound scientific basis for our ability to treat a multitude of eye pain indications. We are in the process of formulating CT2000 eye drops and expect to move into animal toxicity studies in the second half of 2024. From there, we intend to move into proof-of-concept studies in humans.

Previous wording

We may further expand our pipeline with other internal or external compounds in the future, but all other internally discovered compounds are pre-clinical and no commercial discussions about in-licensing have been initiated to date, other than as disclosed in this Report with respect to the licensing of the “Spray Formulations.”

Current wording

We may further expand our pipeline with other internal or external compounds in the future, but all other internally discovered compounds are pre-clinical and no commercial discussions about in-licensing have been initiated to date, other than as disclosed in this Report with respect to the licensing of the Spray Formulations (as defined below).

Previous wording

For the six months ended June 30, 2024 and 2023, we had a net loss of approximately $4.3 million and approximately $1.7 million, respectively, and will require additional capital in order to operate in the normal course of business and fund clinical studies. The IPO closed on February 21, 2024, from which, the Company received net proceeds from the IPO of approximately $5.7 million after deducting the underwriting discounts and commissions and offering expenses payable by the Company (excluding any exercise of the warrants issued to the A.G.P./Alliance Global Partners (the “Representative”) or its designees, in connection with the IPO).

Current wording

For the nine months ended September 30, 2024 and 2023, we had a net loss of approximately $6.0 million and approximately $3.3 million, respectively, and will require additional capital in order to operate in the normal course of business and fund clinical studies. The IPO closed on February 21, 2024, from which, the Company received net proceeds from the IPO of approximately $5.7 million after deducting the underwriting discounts and commissions and offering expenses payable by the Company (excluding any exercise of the warrants issued to A.G.P./Alliance Global Partners (the “Representative”) or its designees, in connection with the IPO).

Previous wording

Based on the Company’s current projections, management believes there is substantial doubt about its ability to continue to operate as a going concern and fund its operations through at least the next twelve months following the issuance of these financial statements. While the Company will continue to invest in its business and the development of CC8464 and CT2000, and potentially other molecules, it is unlikely that the Company will generate product or licensing revenue during the next twelve months. During the period, the Company completed its initial public offering, raising $5.7 million, after deducting the underwriting discounts and commissions and offering expenses, and the Company may need to raise additional funds through either strategic partnerships or the capital markets. However, there is no assurance that the Company will be able to raise such additional funds on acceptable terms, if at all. If the Company raises additional funds by issuing securities, existing stockholders may be diluted.

Current wording

Based on the Company’s current projections, management believes there is substantial doubt about its ability to continue to operate as a going concern and fund its operations through at least the next twelve months following the issuance of these financial statements. While the Company will continue to invest in its business and the development of CC8464, CT2000 and CT 3000, and potentially other molecules, it is unlikely that the Company will generate product or licensing revenue during the next twelve months. During the period, the Company completed its initial public offering, raising $5.7 million, after deducting the underwriting discounts and commissions and offering expenses, and the Company may need to raise additional funds through either strategic partnerships or the capital markets. However, there is no assurance that the Company will be able to raise such additional funds on acceptable terms, if at all. If the Company raises additional funds by issuing securities, existing stockholders may be diluted.

Previous wording

We incurred general and administrative expenses for the three months ended June 30, 2024 and 2023 of $1,209,874 and $537,876, respectively. For the three months ended June 30, 2024, compared to the same period in 2023, this represented an increase of $671,998, or 125%, primarily as a result of increases of $219,069 in compensation expenses, an increase of $32,400 in marketing expenses, an increase of $193,434 in D&O insurance, an increase of $54,353 in IPO fees, an increase of $40,000 in board related expenses, and an increase of $53,140 in stock-based compensation expense.

Current wording

We incurred general and administrative expenses for the three months ended September 30, 2024 and 2023 of $1,161,090 and $661,572, respectively. For the three months ended September 30, 2024, compared to the same period in 2023, this represented an increase of $499,518, or 76%, primarily as a result of increases of $115,495 in compensation expenses, an increase of $34,580 in marketing expenses, an increase of $129,790 in D&O insurance, an increase of $69,391 in capital market expenses , an increase of $40,000 in board related expenses, and an increase of $94,913 in stock-based compensation expense.

Previous wording

We incurred research and development expenses for the three months ended June 30, 2024 and 2023 of $12,955, and $49,955, respectively. For the three months ended June 30, 2024, compared to the same period in 2023, this represented a decrease of $37,000, or 74%, with the details set forth in the table below:

Current wording

We incurred research and development expenses for the three months ended September 30, 2024 and 2023 of $414,639, and $49,132, respectively. For the three months ended September 30, 2024, compared to the same period in 2023, this represented an increase of $365,507, or 744%, with the details set forth in the table below:

Previous wording

The Company incurred lower research and development expenses for the three months ended June 30, 2024, as compared to the corresponding period in 2023 primarily as a result of a decrease in CMC of $133,780 due to the cancelation of a research and development agreement that was previously accrued for in the first quarter and reversed in the second quarter of 2024.

Current wording

The Company incurred higher research and development expenses for the three months ended September 30, 2024, as compared to the corresponding period in 2023 primarily as a result of an increase in CMC of $319,019.

Previous wording

We incurred other expense for the three months ended June 30, 2024 of $7,533 as compared to other expense for the three months ended June 30, 2023 of $176,187. For the three months ended June 30, 2024, compared to the same period in 2023, this represented a decrease of $168,654 or 96%. The other expense for the three months ended June 30, 2024 and 2023 was primarily the result of interest expense. The decrease in the interest expense was due to the notes converting to equity in the first quarter of 2024.

Current wording

We incurred other expense for the three months ended September 30, 2024 of $353,678 as compared to other income for the three months ended September 30, 2023 of $(130,006). For the three months ended September 30, 2024, compared to the same period in 2023, this represented an increase of $483,684 or 372%. The other expense for the three months ended September 30, 2024 and 2023 was primarily the result of interest expense and gain on default judgement. The decrease in the interest expense was due to the notes converting to equity.

Previous wording

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

Current wording

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

Previous wording

We incurred general and administrative expenses for the six months ended June 30, 2024 and 2023 of $1,997,435 and $1,015,506, respectively. For the six months ended June 30, 2024, compared to the same period in 2023, this represented an increase of $981,929, or 97%, primarily as a result of increases of $311,596 in compensation expenses, an increase of $139,905 marketing expenses, an increase of $208,648 in D&O insurance, an increase of $150,120 in IPO fees, and an increase of $151,971 in stock-based compensation expense.

Current wording

We incurred general and administrative expenses for the nine months ended September 30, 2024 and 2023 of $3,158,525 and $1,677,078, respectively. For the nine months ended September 30, 2024, compared to the same period in 2023, this represented an increase of $1,481,447, or 88%, primarily as a result of increases of $427,090 in compensation expenses, an increase of $174,485 marketing expenses, an increase of $338,438 in D&O insurance, an increase of $219,510 in IPO fees, and an increase of $168,385 in stock-based compensation expense.

Previous wording

We incurred research and development expenses for the six months ended June 30, 2024 and 2023 of $479,561, and $236,072, respectively. For the six months ended June 30, 2024, compared to the same period in 2023, this represented an increase of $243,489, or 103%, with the details set forth in the table below:

Current wording

We incurred research and development expenses for the nine months ended September 30, 2024 and 2023 of $894,200, and $285,204, respectively. For the nine months ended September 30, 2024, compared to the same period in 2023, this represented an increase of $608,996, or 214%, with the details set forth in the table below:

Previous wording

The Company incurred higher research and development expenses for the six months ended June 30, 2024, as compared to the corresponding period in 2023 primarily as a result of an increase in CMC services of $169,617.

Current wording

The Company incurred higher research and development expenses for the nine months ended September 30, 2024, as compared to the corresponding period in 2023 primarily as a result of an increase in CMC services of $488,636.

Previous wording

We incurred professional expenses for the three months ended June 30, 2024 and 2023 of $541,257 and $189,329, respectively. For the three months ended June 30, 2024, compared to the same period in 2023, this represented an increase of $351,928, or 186%, as a result of higher auditing and legal expenses associated with the Company operating as a public company since February 2024.

Current wording

We incurred professional expenses for the nine months ended September 30, 2024 and 2023 of $1,693,676 and $1,021,187, respectively. For the nine months ended September 30, 2024, compared to the same period in 2023, this represented an increase of $672,489, or 66%, as a result of higher auditing and legal expenses associated with the Company operating as a public company since February 2024.

Previous wording

We incurred other expense for the six months ended June 30, 2024 of $635,881 as compared to other expense for the six months ended June 30, 2023 of $228,165. For the six months ended June 30, 2024, compared to the same period in 2023, this represented an increase of $407,716 or 179%. The other expense for the six months ended June 30, 2024 and 2023 consisted of interest expense. The increase in the interest expense was due to the remaining amortization of the debt discount on the Company’s notes being accelerated upon the conversion of the notes to equity upon consummation of the IPO.

Current wording

We incurred other expense for the nine months ended September 30, 2024 of $282,203 as compared to other expense for the nine months ended September 30, 2023 of $358,171. For the nine months ended September 30, 2024, compared to the same period in 2023, this represented a decrease of $75,968 or 21%. The other expense for the nine months ended September 30, 2024 and 2023 was primarily the result of interest expense and gain on default judgement. The increase in the interest expense was due to the remaining amortization of the debt discount on the Company’s notes being accelerated upon the conversion of the notes to equity upon consummation of the IPO.

Previous wording

Cash totaled $2.4 million and $0.1 million as of June 30, 2024 and December 31, 2023, respectively. As of June 30, 2024 and December 31, 2023, we had an accumulated deficit of approximately $17.9 million and $13.5 million, respectively, and had a working capital deficit of $0.1 million and a working capital deficit $6.4 million, respectively.

Current wording

Cash totaled $1.3 million and $0.1 million as of September 30, 2024 and December 31, 2023, respectively. As of September 30, 2024 and December 31, 2023, we had an accumulated deficit of approximately $19.5 million and $13.5 million, respectively, and had a working capital deficit of $1.4 million and a working capital deficit $6.4 million, respectively.

Previous wording

On February 21, 2024, we completed the IPO and issued 1,100,000 shares of Common Stock at a price of $6.00 per share. The aggregate net proceeds from the IPO were approximately $5.7 million after deducting $0.9 million in underwriting discounts and commissions and offering expenses.

Current wording

On February 21, 2024, we completed the IPO and issued 1,100,000 shares of Common Stock at a price of $6.00 per share. The aggregate net proceeds from the IPO were approximately $5.7 million after deducting approximately $0.9 million in underwriting discounts and commissions and offering expenses.

Previous wording

In July 2024, we entered into a Common Stock Purchase Agreement which provides for a committed equity financing facility of up to an aggregate of $30,000,000 of the shares of Common Stock, to be purchased by the investor at the Company’s direction in its sole discretion, subject to certain limitations set forth in such agreement.

Current wording

On July 26, 2024, the Company entered into a Common Stock Purchase Agreement, dated as of July 26, 2024 (the “CEF Purchase Agreement”), with Tikkun Capital LLC (“Tikkun”), providing for a committed equity financing facility, pursuant to which, upon the terms and subject to the satisfaction of the conditions contained in the CEF Purchase Agreement, Tikkun has committed to purchase, at the Company’s direction in its sole discretion, up to an aggregate of $30,000,000 (the “Total Commitment”) of the shares of Common Stock (the “Purchase Shares”), subject to certain limitations set forth in the CEF Purchase Agreement, from time to time during the term of the CEF Purchase Agreement. Concurrently with the execution of the CEF Purchase Agreement, the Company and Tikkun also entered into a Registration Rights Agreement, dated as of July 26, 2024, pursuant to which the Company agreed to file with the SEC one or more registration statements, to register under the Securities Act, the offer and resale by Tikkun of all of the Purchase Shares that may be issued and sold by the Company to Tikkun from time to time under the CEF Purchase Agreement.

Previous wording

With respect to the Company’s future expected operations expenses, the primary expense drivers will be research and development and management overhead, including costs of being a public company. Of these, it is expected that research and development will be the largest expense and comprise approximately $3.0 million in the twelve months following the IPO, which will be utilized for the furtherance of the Company’s CC8464 and CT2000 programs. We have based the research and development costs on current clinical and pre-clinical trial parameters and expectations on certain existing tax credits, and there is no certainty that the clinical and pre-clinical trial parameters or tax credits available to the Company will remain as they are, which could lead to changes in our research and development expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued expenses and prepaid expenses.

Current wording

With respect to the Company’s future expected operations expenses, the primary expense drivers will be research and development and management overhead, including costs of being a public company. Of these, it is expected that research and development will be the largest expense and comprise approximately $3.0 million in the twelve months following the IPO, which will be utilized for the furtherance of the Company’s CC8464, CT2000 and CT3000 programs. We have based the research and development costs on current clinical and pre-clinical trial parameters and expectations on certain existing tax credits, and there is no certainty that the clinical and pre-clinical trial parameters or tax credits available to the Company will remain as they are, which could lead to changes in our research and development expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued expenses and prepaid expenses.

Previous wording

The following table summarizes our cash flows for the six months ended June 30, 2024 and 2023:

Current wording

The following table summarizes our cash flows for the nine months ended September 30, 2024 and 2023:

Previous wording

For the six months ended June 30, 2024, we incurred a net loss of $4,333,949, and net cash flows used in operating activities was $4,944,308. The cash flow used in operating activities was primarily due to a net loss of $4,333,949, offset by stock-based compensation expense of $751,530, amortization of debt discount of $605,630, a change in account payable and accrued expense of $1,481,113, change in prepaid expenses of $158,102, a decrease of $45,786 in due from Chromocell Corporation, and an increase in accrued compensation in the amount of $282,518.

Current wording

For the nine months ended September 30, 2024, we incurred a net loss of $6,028,604, and net cash flows used in operating activities was $5,122,219. The cash flow used in operating activities was primarily due to a net loss of $6,028,604, offset by stock-based compensation expense of $1,268,873, amortization of debt discount of $615,933, a change in account payable and accrued expense of $557,589, offset by a change in prepaid expenses of $94,585, a change of $45,786 in due from Chromocell Corporation, and a change in accrued compensation in the amount of $282,548, and a gain on default judgement of $363,091.

Previous wording

For the six months ended June 30, 2023, we incurred a net loss of $1,919,908, and net cash flows used in operating activities was $366,989. The cash flow used in operating activities was primarily due to a net loss of $1,919,908, offset by stock-based compensation expense of $599,559, amortization of debt discount of $49,122, $126,000 in issuance cost from shares issued on extension of bridge loan, a change in account payable and accrued expense of $548,297, and an increase in accrued compensation in the amount of $229,941.

Current wording

For the nine months ended September 30, 2023, we incurred a net loss of $3,341,640, and net cash flows used in operating activities was $624,224. The cash flow used in operating activities was primarily due to a net loss of $3,341,640, offset by stock-based compensation expense of $941,989, amortization of debt discount of $66,786, $201,600 in issuance cost from shares issued on extension of bridge loan, a change in account payable and accrued expense of $1,166,880, and an increase in accrued compensation in the amount of $340,161.

Previous wording

The Company neither received nor used cash in investing activities during the six months ended June 30, 2024 and 2023.

Current wording

The Company neither received nor used cash in investing activities during the nine months ended September 30, 2024 and 2023.

Previous wording

For the six months ended June 30, 2024, net cash flows provided by financing activities were $7,253,015 resulting from net proceeds from common stock issued for cash of $5,972,000, proceeds from loans of $1,587,284, partially offset by payment of recission on stock of $91,512 and payments on loans of $214,757.

Current wording

For the nine months ended September 30, 2024, net cash flows provided by financing activities were $6,280,731 resulting from net proceeds from common stock issued for cash of $5,972,000, proceeds from loans of $690,000, partially offset by payment of recission on stock of $166,512 and payments on loans of $214,757.

Previous wording

For the six months ended June 30, 2023, net cash flows provided by financing activities were $393,808, consisting of cash received from net proceeds from the issuance of notes in the amount of $393,808.

Current wording

For the nine months ended September 30, 2023, net cash flows provided by financing activities were $591,936, consisting of cash received from net proceeds from the issuance of notes in the amount of $591,936.

Previous wording

During the three and six months ended June 30, 2024 and 2023, we did not have, and we do not currently have, any off-balance sheet arrangements, as defined under applicable SEC rules.

Current wording

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