Canton Strategic Holdings, Inc.
For the period ended Dec 31, 2024. Filed Mar 26, 2025.
View on SEC.govAbout this filing
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 26, 2025
CNTN$2.06+6.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-23.
0001493152-24-007612
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-26.
0001641172-25-000654
Item 7. 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 71 previous paragraphs and 81 current paragraphs.
46 unchanged; 13 reworded; 20 added; 12 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 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 (20)
Current report
On September 11, 2024, we entered into a Patent License Agreement (the “Intract Agreement”) with Intract Pharma Limited (“Intract”), pursuant to which, we exclusively licensed INT-023/TH023, an oral anti-Tumor Necrosis Factor-alpha (TNF-α) monoclonal antibody infliximab. Infliximab is a purified, recombinant DNA-derived chimeric IgG monoclonal antibody protein that contains both murine and human components that inhibit tumor TNF-α. Under the terms of the Intract Agreement, we licensed global development and commercialization rights (outside of South Korea) to Intract’s Soteria® and Phloral® delivery platform along with an existing supply agreement for infliximab to be used in the oral product development program.
Current report
On March 11, 2024, we entered into an addendum to the ABSI Agreement to fund research services with quarterly payments of $50,000 beginning March 18, 2024 with subsequent payments due on the 18 th of each calendar quarter.
Current report
Avior Patent License Agreement
Current report
Enkefalos License Agreement
Current report
Intract Patent License Agreement
Current report
On September 11, 2024 (the “Intract Effective Date”), we entered into a Patent License Agreement (the “Intract Agreement”) with Intract Pharma Limited, (“Intract”), pursuant to which the Company exclusively licensed INT-023/TH023, an oral anti-Tumor Necrosis Factor-alpha (TNF-α) monoclonal antibody infliximab. Under the terms of the Intract Agreement, we licensed global development and commercialization rights (outside of South Korea) to Intract’s Soteria® and Phloral® delivery platform along with an existing supply agreement for infliximab to be used in the oral product development program. Pursuant to the Intract Agreement, Intract recieved an upfront license fee of $400,000 and is eligible to receive additional payments upon an equity financing of the Company and for future development, regulatory and commercial milestones, as well as mid-single digit royalties based on net product sales. Under the terms of the Intract Agreement, we retain a right of first refusal to continue development and commercialization after a Phase 2 clinical trial and have the option to exercise the license to Intract’s platform for up to four additional targets. The term of the Intract Agreement expires upon the final payment obligation of the Company under the Intract Agreement. In addition, the Intract Agreement may be terminated by us at any time upon 90 days written notice to Intract. Either party may terminate the Intract Agreement if the other party materially breaches any provision of the Intract Agreement and fails to cure such breach within thirty (30) days after the breaching party receives written notice thereof. In addition, either party may terminate the Intract Agreement on written notice in the event that either party declare: (a) becomes insolvent or admits inability to pay its debts generally as they become due; (b) becomes subject, voluntarily or involuntarily, to any proceeding under any domestic or foreign bankruptcy or insolvency law, which is not fully dismissed or vacated within sixty (60) days; (c) is dissolved or liquidated or takes any corporate action for such purpose; (d) makes a general assignment for the benefit of creditors; or (e) has a receiver, trustee, custodian or similar agent appointed by order of any court of competent jurisdiction to take charge of or sell any material portion of its property or business.
Current report
On June 7, 2024, we entered into an at-the-market offering agreement (the “ATM Agreement”) with Rodman & Renshaw LLC (the “ATM Sales Manager”) under which we may sell, from time to time through the ATM Sales Manager, shares of common stock in one or more offerings up to a total dollar amount of $1.65 million. Sales of shares of our common stock through the ATM Sales Manager, if any, will be made by any method permitted by law deemed to be an “at-the-market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended (the “Securities Act”), including without limitation sales made directly on the Nasdaq Stock Market LLC or any other existing trading market for the common shares. Our common stock is being offered and sold pursuant to the effective shelf registration statement on Form S-3 and an accompanying prospectus declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on March 24, 2023, and pursuant to a prospectus supplement dated June 7, 2024.
Current report
On June 10, 2024, we reported positive results from our Phase 1 clinical trial with TH104. Results from healthy subjects demonstrated consistent pharmacokinetic (PK) profiles across buccal and intravenous routes of administration with a comparable safety and tolerability profile between routes of administration. This Phase 1 trial was a single-dose, single-center, open-label, randomized 2-way crossover study comparing 16 mg of TH104 with 1 mg intravenous nalmefene administered under fasting conditions, with a 7-day washout period between doses. Twenty healthy subjects were enrolled to complete both doses of the crossover design. All 20 subjects completed TH104 buccal dosing, while 19 of 20 subjects also completed the intravenous dosing. The primary objective was to evaluate the absolute bioavailability of TH104, as well as to assess safety and tolerability. Findings from the study indicated that the primary endpoint of the study which was absolute bioavailability (F) of TH104, or fraction (or percentage) of the administered dose absorbed into the systemic circulation compared to an equivalent intravenous dose of nalmefene, was 0.459 (45.9%). The median time to maximum concentration (Cmax) of TH104 was 2.0 hours, and mean half-life (T 1/2) as measured in the blood of subjects was 14 hours after a single buccal administration of TH104, compared to 9 hours for the 1mg intravenous dose of nalmefene. These data were consistent and within range of previous findings of nalmefene in the literature and the Company believes PK results from this Phase 1 trial show proportional kinetics consistent with published findings of oral and intravenous formulations, suggesting TH104 could be developed for once-daily dosing in a target population of moderate-to-severe chronic pruritus in PBC patients. The Phase 1 trial also demonstrated that a 16mg dose of TH104 had a comparable safety and tolerability profile to the FDA-approved 1mg dose of nalmefene intravenous formulation. Treatment emergent adverse events (TEAEs) in this study were reported in 8 subjects (40.0%) in the TH104 group and 7 subjects (36.8%) in the intravenous group. All reported TEAEs were considered mild in severity. The most frequently reported TEAE for both TH104 and intravenous treatments was dizziness (4 subjects in the TH104 group; 7 subjects in the intravenous group). TEAEs reported in at least 2 subjects in any treatment group were nausea (3 subjects in each group) and somnolence (3 subjects in each group). There were no serious adverse events reported during this study. No subjects discontinued the study due to adverse events. No subjects exhibited abnormal results for the visual examinations of the buccal mucosa pre- or post-dosing with TH104 buccal film.
Current report
On June 17, 2024, we reported positive Type C meeting feedback from the U.S. Food and Drug Administration (FDA) for our Phase 2 clinical trial with TH104, confirming our plan to pursue a 505(b)(2) approval pathway, which permits inclusion of data from external studies when the active ingredient is already approved in the United States. The FDA also agreed that the nonclinical studies submitted to the FDA in advance of the meeting appear sufficient to support the proposed Phase 2 clinical trial. In addition, the FDA provided feedback on study design and certain recommendations regarding PBC patient inclusion, the primary endpoint to assess pruritus in these patients, and considerations for monitoring for adverse events in this patient population. Based on this interaction, in early 2025, we began start up activities in preparation for the Phase 2 trial with TH104 in moderate-to-severe chronic pruritus in PBC patients. We plan to plan to initiate a hepatic impairment study prior to launching the Phase 2 study.
Current report
On June 7, 2024, we entered into an at-the-market offering agreement (the “ATM Agreement”) with Rodman & Renshaw LLC (the “Manager”), pursuant to which we may offer and sell, from time to time, shares of our common stock having an aggregate offering price of up to $1,650,000 through the Manager. Any shares sold under the ATM Agreement will be issued pursuant to our effective shelf registration statement on Form S-3 and the related prospectus supplement. We will pay the Manager a commission of 3.0% of the aggregate gross proceeds from the sales of shares of our common stock sold through the Manager pursuant to the ATM Agreement. During the year ended December 31, 2024, we raised gross proceeds of $83,568 pursuant to the ATM Agreement from the sale of 40,000 shares of our common stock at an average price of $2.0892 per share (the “ATM Sale”). The net proceeds from the ATM Sale during the year ended December 31, 2024 were $73,189, after deducting sales agent commissions of $2,507 and other fees of $7,992.
Current report
On June 21, 2024, we closed a private placement offering (the “June 2024 PIPE Offering”) with certain accredited investors of $2.08 million of our securities consisting of shares of our common stock and/or pre-funded warrants to acquire shares of our common stock and warrants to acquire shares of our common stock. Net proceeds from the June 2024 PIPE Offering were approximately $1.8 million.
Current report
We signed a development agreement for TH1014 Phase 2A clinical trial manufacturing on July 25, 2024. In the study, our CMO will manufacture four increasing strengths of TH104 active material and their corresponding placebos. The manufacturing operation is a 5-month program, where each of the strengths will be released for clinical packaging by the end of the year. We are pleased to state that the developmental activities are on track and within budget. Updates to the developmental activities are provided biweekly, and we currently see no risks to the timely completion of the activities and procurement of the clinical trial materials in the proposed timeframe.
Current report
On December 9, 2024, we closed a private placement offering (the “December 2024 PIPE Offering”) with certain accredited investors of $2.02 million of our securities consisting of shares of our common stock and/or pre-funded warrants to acquire shares of our common stock and warrants to acquire shares of our common stock. Net proceeds from the December 2024 PIPE Offering were approximately $1.8 million.
Current report
We have not recognized revenue since inception or for the years ended December 31, 2024 and 2023.
Current report
Research and development expenses increased by $2.8 million, or 80%, to $6.4 million for the year ended December 31, 2024 from $3.6 million for year ended December 31, 2023. The increase was primarily the result of an increase in clinical trial expenses of approximately $1.6 million due to completion of our Phase 1 clinical trial and start-up costs related to our Phase 2 clinical trial in TH104, an increase of $1.8 million in license fees, and an increase of $0.2 million in regulatory fees. These increases were offset by a decrease of $0.7 million in pre-clinical vendor expenses and a decrease of $0.1 million in stock-based compensation expense related to our research and development personnel.
Current report
Interest income increased by $97,277, or 64%, to $249,908 for the year ended December 31, 2024 from $152,631 for year ended December 31, 2023. The increase in interest income was primarily due to the increase in cash from the June 2024 and December 2024 PIPE Offerings as well as a higher balance toward the end of 2023 which existed for most of 2024
Current report
During the year ended December 31, 2024, we raised gross proceeds of $83,688 pursuant to the ATM Agreement from the sale of 40,000 shares of our common stock at an average price of $2.0892 per share. The net proceeds from the ATM Sale during the year ended December 31, 2024 were $73,189, after deducting sales agent commissions of $2,507 and other fees of $7,992.
Current report
Further, on June 17, 2024 and December 9, 2024, we closed private placement offerings (the “June 2024 PIPE Offering” and “December 2024 PIPE Offering”) with certain accredited investors, consisting of offerings of shares of our common stock and/or pre-funded warrants to acquire shares of our common stock and warrants to acquire shares of our common stock, with combined net proceeds of approximately $3.6 million. The shares of our common stock began trading on The Nasdaq Capital Market on January 12, 2022 under the ticker symbol “HILS” and effective as of September 25, 2023, are traded under the ticker symbol “THAR.”
Current report
Reverse Stock Split
Current report
On May 24, 2024, the Company effectuated an additional reverse split of shares of its common stock at a ratio of 1-for-15 pursuant to an amendment to the Company’s Certificate of Incorporation, as amended, filed with the Delaware Secretary of State and approved by the Company’s board of directors and stockholders. The par value of the Company’s common stock was not adjusted as a result of the reverse split. All issued and outstanding common stock share and per share amounts contained in the accompanying consolidated financial statements have been retroactively adjusted to reflect the reverse split for all periods presented.
Removed paragraphs (12)
Previous report
We have deprioritized our previous preclinical candidate, HSB-1216, due to a strategic reprioritization of our vision to focus on therapeutics in high unmet need cancers focused on novel epitopes of certain antitumor drug targets.
Previous report
As part of the ABSI Agreement, on July 26, 2023, we issued 25,107 shares of our common stock with a per share value of $9.95, representing total compensation expense of $250,000.
Previous report
We did not recognize any revenue for the years ended December 31, 2023 and 2022.
Previous report
Deferred Offering Costs
Previous report
Deferred offering costs consisted of legal, accounting, printing, and filing fees that were capitalized and offset against the proceeds from our common stock offerings during the year.
Previous report
Research and development expenses increased by $1.3 million, or 56.2%, to $3.6 million for the year ended December 31, 2023 from $2.3 million for the year ended December 31, 2022. The increase was the result of an increase in expenses for pre-clinical activities of approximately $0.3 million, an increase in licensing fees of approximately $1.0 million, an increase of approximately $0.1 million in stock-based compensation expense related to research and development team members because of an increased number of stock options vested during the year. These increases were offset by a decrease in research and development consulting expenses of approximately $0.1 million. The increase for the year ended December 31, 2023 was primarily the result of increased focus on newer product candidates as we placed our now deprioritized product candidate, HSB-1216, on hold during the 3 rd quarter.
Previous report
Interest income increased by $0.2 million, or 100.0%, to $0.2 million for the year ended December 31, 2023 from $0 for the year ended December 31, 2022. The increase in interest income was primarily from the funds held in our cash accounts.
Previous report
Net Loss
Previous report
Net loss increased by $0.8 million, or 10.0%, to $9.3 million for the year ended December 31, 2023 from $8.5 million for the year ended December 31, 2022. The change in net loss was primarily related to the increase in research and development and general and administrative expenses described above offset by the decrease in interest expense.
Previous report
Cash used in operating activities for the year ended December 31, 2022 was $6.6 million which consisted of net loss of $8.5 million and net decrease in operating assets and liabilities of $0.6 million, partially offset by $2.5 million in non-cash charges and other adjustments to reconcile net loss to net cash used in operating activities. The non-cash charges consist of amortization of debt discount of $1.6 million, stock compensation expenses of $0.8 million, stock issuance pursuant to service agreement of $0.1 million, and interest expense and original issuance discount on promissory notes of $14,645. The net decrease in operating activities was primarily due to a decrease of $0.2 million due to founder, a decrease in accounts payable of $0.1 million, a decrease in accrued expenses of $0.1 million, and a decrease of $0.1 million in prepaid expenses and other current assets.
Previous report
Concentration of Credit Risk
Previous report
We maintain cash balances with various financial institutions. Account balances at these institutions are insured by the Federal Deposit Insurance Corporation up to $250,000 per depositor. At various times during the year, bank account balances may have been in excess of federally insured limits. We have not experienced losses in such accounts. We believe that we are not subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.
Reworded paragraphs (13)
Previous wording
Tharimmune is a clinical-stage biotechnology company developing therapeutic candidates in rare, inflammatory and oncologic conditions with high unmet need. On November 3, 2023, we entered into a patent license agreement (the “Avior License Agreement”) with Avior Inc. d/b/a Avior Bio, LLC (“Avior”) pursuant to which we received an exclusive sublicensable right and license to Licensed Patent Rights and Licensed Technology to, among other things, Develop, have Developed, make, have made, use, sell, import, export and commercialize TH104 and TH103 and to practice the Licensed Technology in connection with the foregoing, throughout the world, each as defined in the Avior License Agreement. See “Recent Developments” below for additional information. In February 2023, the U.S. Food and Drug Administration (“FDA”) approved an investigational new drug (“IND”) application for TH104. TH104 has a dual mechanism of action by affecting multiple receptors, known to suppress chronic, debilitating pruritis or “uncontrollable itching.” With respect to TH104, we intend to first seek approval for the treatment of moderate to severe chronic pruritis in patients with primary biliary cholangitis (“PBC”), an orphan rare form of liver disease with no known cure in which more than 70% of patients suffer from debilitating chronic pruritis, and with respect to TH103, we intend to develop the product candidate and potentially file an IND.
Current wording
Tharimmune is a clinical-stage biotechnology company developing therapeutic candidates in immunology and inflammation with high unmet need. On November 3, 2023, we entered into a patent license agreement (the “Avior License Agreement”) with Avior Inc. d/b/a Avior Bio, LLC (“Avior”) pursuant to which we received an exclusive sublicensable right and license to Licensed Patent Rights and Licensed Technology to, among other things, Develop, have Developed, make, have made, use, sell, import, export and commercialize TH104 and TH103 and to practice the Licensed Technology in connection with the foregoing, throughout the world, each as defined in the Avior License Agreement. In February 2023, the U.S. Food and Drug Administration (“FDA”) approved an investigational new drug (“IND”) application for TH104. TH104 has a dual mechanism of action by affecting multiple receptors, known to suppress chronic, debilitating pruritus or “uncontrollable itching.” With respect to TH104, we intend to first seek approval for the treatment of moderate-to-severe chronic pruritus in patients with primary biliary cholangitis (“PBC”), an orphan rare form of liver disease with no known cure in which more than 70% of patients suffer from debilitating chronic pruritic. We expect to obtain topline data from a Phase 2 trial in TH104 in Q4 2025 and with respect to TH103, we intend to develop the product candidate and potentially file an IND.
Previous wording
We are also developing an early-stage pipeline of novel therapeutic candidates targeting validated high value immuno-oncology (“IO”) targets including human epidermal growth factor (“EGF”) receptor 2 (“HER2”), human EGF receptor 3 (“HER3”) and programmed cell death protein 1 (“PD-1”). We are developing antibodies including bispecific antibodies, antibody drug conjugates (“ADCs”) and small molecular weight bovine-derived Picobodies™ or antibody “knob” domains which have the potential to target and bind more tightly to “undruggable” epitopes better than full sized antibodies. We are advancing TH3215, a bispecific against both HER2 and HER3 antibody which targets a novel “bridging epitope” encompassing multiple domains of the HER2 extracellular domain (“ECD”) as well as ligand-dependent and independent blocking of the ECD of HER3 into IND-enabling studies in 2024. In addition, we anticipate that TH0059, a HER2/HER3 bispecific ADC (“bsADC”), and TH1940, a PD-1 Picobody, will progress to enter IND-enabling studies in 2024.
Current wording
We are also developing an early-stage pipeline of novel therapeutic candidates targeting validated high value immuno-oncology (“IO”) targets including human epidermal growth factor (“EGF”) receptor 2 (“HER2”), human EGF receptor 3 (“HER3”) and programmed cell death protein 1 (“PD-1”). We are developing antibodies including bispecific antibodies, antibody drug conjugates (“ADCs”) and small molecular weight bovine-derived Picobodies™ or antibody “knob” domains which have the potential to target and bind more tightly to “undruggable” epitopes better than full sized antibodies. We are advancing HS3215, a bispecific against both HER2 and HER3 antibody which targets a novel “bridging epitope” encompassing multiple domains of the HER2 extracellular domain (“ECD”) as well as ligand-dependent and independent blocking of the ECD of HER3 into IND-enabling studies in 2025. In addition, we anticipate that HS0059, a HER2/HER3 bispecific ADC (“bsADC”), and HS1940, a PD-1 Picobody, will progress to enter IND-enabling studies in 2025.
Previous wording
The critical components of our business strategy include:
Current wording
The critical components of our business strategy to achieve our goals include:
Previous wording
On November 3, 2023 (the “Avior Effective Date”), we entered into the Avior Patent License Agreement with Avior pursuant to which we received an exclusive sublicensable right and license to Licensed Patent Rights and Licensed Technology to, among other things, Develop, have Developed, make, have made, use, sell, import, export and commercialize TH104 and TH103 and to practice the Licensed Technology in connection with the foregoing, throughout the world. Pursuant to the Avior Patent License Agreement, we paid Avior a mid-six digit up front license fee within ten days of the Avior Effective Date and an additional mid-six digit license fee which shall be paid in four equal installments within ten days of the end of each fiscal quarter following the Avior Effective Date. In addition, we shall pay Avior a high single digit percentage of any upfront payments received by us as a result of the grant of any sublicenses with respect to TH104. We shall also pay Avior milestone payments in the aggregate amount of $24.25 million upon the occurrence of various development milestones (the “Development Milestone Payments”). Furthermore, we shall pay Avior certain fees based upon sales milestones. The payments for such sales milestones range from the low seven digits to the low eight digits with higher sales being subject to higher fees. Finally, we shall pay Avior royalties based on net sales. Such royalties range from low single digit percentages to mid-single digit percentages with higher sales being subject to lower percentages. The Avior Patent License Agreement shall expire upon the expiration of the final payment obligation due to Avior as set forth in such agreement. Upon the expiration of the Avior Patent License Agreement, we shall have a fully paid-up, irrevocable, freely transferable and sublicensable worldwide license to the Licensed Patent Rights and Licensed Technology to Develop, have Developed, make, have made, use, have used sell, offer for sale, have sold, import, have imported, export, have exported, commercialize or have commercialized any and all Licensed Products and to practice the Licensed Technology worldwide. Pursuant to the Avior Patent License Agreement, we may terminate the agreement at any time without cause, upon 30 days’ prior written notice to Avior along with payment of the next unpaid Development Milestone Payment, if any. Furthermore, either we or Avior may terminate the Avior Patent License Agreement (i) on written notice to the other party if the other party materially breaches any provision of the Avior Patent License Agreement and fails to cure such breach within 30 days after the breaching party receives written notice thereof or (ii) on written notice in the event that either party (A) becomes insolvent or admits its inability to pay its debts generally as they become due; (B) becomes subject, voluntarily or involuntarily, to any proceeding under any domestic or foreign bankruptcy or insolvency law, which is not fully d…
Excerpt shortened here; the source contains the full paragraph.
Current wording
On November 3, 2023 (the “Avior Effective Date”), we entered into the Avior Patent License Agreement with Avior pursuant to which we received an exclusive sublicensable right and license to Licensed Patent Rights and Licensed Technology to, among other things, develop, have developed, make, have made, use, sell, import, export and commercialize TH104 and TH103 and to practice the Licensed Technology in connection with the foregoing, throughout the world. Pursuant to the Avior Patent License Agreement, we paid Avior an up front license fee of $400,000 within ten days of the Avior Effective Date and an additional mid-six digit license fee which shall be paid in four equal installments within ten days of the end of each fiscal quarter following the Avior Effective Date. In addition, we shall pay Avior a high single digit percentage of any upfront payments received by us as a result of the grant of any sublicenses with respect to TH104. We shall also pay Avior milestone payments in the aggregate amount of $24.25 million upon the occurrence of various development milestones (the “Development Milestone Payments”). Furthermore, we shall pay Avior certain fees based upon sales milestones. The payments for such sales milestones range from the low seven digits to the low eight digits with higher sales being subject to higher fees. Finally, we shall pay Avior royalties based on net sales. Such royalties range from low single digit percentages to mid-single digit percentages with higher sales being subject to lower percentages. The Avior Patent License Agreement shall expire upon the expiration of the final payment obligation due to Avior as set forth in such agreement. Upon the expiration of the Avior Patent License Agreement, we shall have a fully paid-up, irrevocable, freely transferable and sublicensable worldwide license to the Licensed Patent Rights and Licensed Technology to Develop, have Developed, make, have made, use, have used sell, offer for sale, have sold, import, have imported, export, have exported, commercialize or have commercialized any and all Licensed Products and to practice the Licensed Technology worldwide. Pursuant to the Avior Patent License Agreement, we may terminate the agreement at any time without cause, upon 30 days’ prior written notice to Avior along with payment of the next unpaid Development Milestone Payment, if any. Furthermore, either we or Avior may terminate the Avior Patent License Agreement (i) on written notice to the other party if the other party materially breaches any provision of the Avior Patent License Agreement and fails to cure such breach within 30 days after the breaching party receives written notice thereof or (ii) on written notice in the event that either party (A) becomes insolvent or admits its inability to pay its debts generally as they become due; (B) becomes subject, voluntarily or involuntarily, to any proceeding under any domestic or foreign bankruptcy or insolvency law, which is not fully di…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
We have incurred research and development expenses related to the development of HSB-1216, which has been deprioritized. We expect that our research and development expenses will increase as we plan for and commence our clinical trials of TH3215 and TH1940.
Current wording
We have incurred research and development expenses related to the development of HSB-1216, which has been deprioritized. We expect that our research and development expenses will increase as we plan for and commence our clinical trials of HS3215 and HS1940.
Previous wording
We cannot determine with certainty the duration and costs of future clinical trials of our product candidates, TH3215 and TH1940, or any other product candidates we may develop or if, when or to what extent we will generate revenue from the commercialization and sale of any of our product candidates for which we obtain marketing approval. We may never succeed in obtaining marketing approval for any of our product candidates. The duration, costs and timing of clinical trials and development of our current and future product candidates will depend on a variety of factors, including:
Current wording
We cannot determine with certainty the duration and costs of future clinical trials of our product candidates, HS3215 and HS1940, or any other product candidates we may develop or if, when or to what extent we will generate revenue from the commercialization and sale of any of our product candidates for which we obtain marketing approval. We may never succeed in obtaining marketing approval for any of our product candidates. The duration, costs and timing of clinical trials and development of our current and future product candidates will depend on a variety of factors, including:
Previous wording
General and administrative expenses increased by approximately $1.3 million, or 28.1%, to $5.9 million for the year ended December 31, 2023 from $4.6 million for the year ended December 31, 2022. The change in general and administrative expenses was primarily due to an increase of approximately $0.9 million in investor relations expenses, approximately $0.6 million in general and administrative personnel expenses, $0.2 million in legal expenses, and other general corporate increases of approximately $0.1 million. These increases were offset by a decrease of $0.3 million in financial consulting expenses and a decrease in insurance expense of approximately $0.2 million.
Current wording
General and administrative expenses increased by $0.1 million, or 2%, to $6.0 million for the year ended December 31, 2024 from $5.9 million for the year ended December 31, 2023. The change in general and administrative expenses was primarily due to a decrease of $0.2 million in investor relations, a decrease of $0.4 million in insurance, and a decrease of $0.1 million in stock-based compensation expense related to our general and administrative personnel. These decreases were offset by an increase in wages of $0.4 million, an increase in $0.1 million in general corporate, and an increase of $0.1 million in director remuneration.
Previous wording
Interest expense decreased by $1.6 million, or 99%, to $16,505 for the year ended December 31, 2023 from $1.6 million for the year ended December 31, 2022. The decrease in interest expense was primarily related to the unamortized debt discount charged to interest expense on the date of our IPO during 2022 further described in Note 3 of the accompanying consolidated financial statements.
Current wording
Interest expense decreased by $2,821, or 17%, to $13,684 for the year ended December 31, 2024 from $16,505 for the year ended December 31, 2023. The decrease in interest expense was primarily related to the decrease in D&O insurance premium financing liability.
Previous wording
The accompanying consolidated financial statements have been prepared on the basis that we are a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. For the year ended December 31, 2023, we incurred operating losses of approximately $9.5 million, expended approximately $7.3 million in cash in operating activities, and had an accumulated deficit of approximately $24.7 million as of December 31, 2023. We financed our working capital requirements through December 31, 2023 primarily through the issuance of common stock in various offerings. We received gross proceeds of approximately $13.6 million through public offerings of our common stock on May 2, 2023 and November 30, 2023 which generated net proceeds to us of approximately $2.1 million and $9.7 million, respectively.
Current wording
The accompanying consolidated financial statements have been prepared on the basis that we will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. During the year ended December 31, 2024, we incurred operating losses in the amount of approximately $12.4 million, expended approximately $10.9 million in net cash used in operating activities, and had an accumulated deficit of approximately $36.9 million as of December 31, 2024. Through December 31, 2024, we have primarily financed our operations through public and private offerings of our equity securities. We received net proceeds from our initial public offering (“IPO”) on January 14, 2022 of approximately $12.5 million. Additionally, we closed the May 2023 Offering and November 2023 Offering, public offerings with net proceeds of approximately $2.1 million and $8.7 million, respectively.
Previous wording
Cash Flow Activities for the Year Ended December 31, 2023 and 2022
Current wording
Cash Flow Activities for the Years Ended December 31, 2024 and 2023
Previous wording
Cash provided by financing activities for the year ended December 31, 2022 was $13.1 million. The net increase in financing activities was from net cash proceeds of $13.6 million from the issuance of our common stock in connection with our IPO, $0.9 million from insurance premium financing liability, $0.1 million from the issuance of promissory notes, offset by repayment of insurance premium financing liability of $0.9 million, payment of deferred offering costs of $0.5 million, repayment of promissory notes of $0.1 million, and purchase of treasury stock at cost of $0.1 million. See Note 2 of our consolidated financial statements.
Current wording
Cash provided by financing activities for the year ended December 31, 2024 was $3.5 million. The net increase in financing activities was due to proceeds from the PIPE Offerings of $4.1 million, proceeds from the ATM Sale of $0.1 million and insurance premium financing liability of $0.4 million, offset by payments of deferred offering costs of $0.7 million and repayments of insurance premium financing liability of $0.4 million.
Previous wording
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: research and development expense recognition, valuation of common shares and stock options, allowances of deferred tax assets, valuation of debt related instruments, and cash flow assumptions regarding going concern considerations. Although management believes the estimates that have been used are reasonable, actual results could vary from the estimates that were used.
Current wording
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: research and development expense recognition, stock-based compensation, allowances of deferred tax assets, and cash flow assumptions regarding going concern considerations. Although management believes the estimates that have been used are reasonable, actual results could vary from the estimates that were used.
Previous wording
The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Prior to January 12, 2022, we were a private company and our common stock has only been publicly traded since that date. As a result, we lack company-specific historical and implied volatility information. Therefore, we have estimated our expected stock price volatility based on the historical data regarding the volatility of a publicly traded set of peer companies. The expected term of stock options granted was between five and seven years. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award.
Current wording
The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Prior to January 12, 2022, we were a private company and our common stock has only been publicly traded since that date. As a result, we lack company-specific historical and implied volatility information. Therefore, we have estimated our expected stock price volatility based on the historical volatility of a publicly traded set of peer companies. The expected term of stock options granted was between five and seven years. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
On June 17, 2024 (the “Enkefalos Effective Date”), we signed a letter of intent (the “Enkefelos LOI”) to enter into the Enkefalos License Agreement with Enkefalos Biosciences Inc. pursuant to which we are licensing the global rights in all fields of use for the products related to the compounds knows as cyclotides to deliver HER2 antibodies across the blood-brain barrier and all associated know-how, technology, intellectual property and related information and constructs, and any associated authorized generic rights and all related assets (collectively, the “Products” referred to in this letter as ENBI-01) from Enkefalos Biosciences, Inc. Pursuant to the Enkefalos License Agreement, we paid Enkefalos an upfront license fee of $150,000 upon signing of the Enkefalos LOI and an additional $150,000 license fee to be paid 6 months after the Enkefalos Effective Date. In addition, we shall pay Enkefalos a $50,000 annual license fee and milestone payments in the aggregate amount of up to $8,500,000 upon the occurrence of various development milestones (the “Enkefalos Development Milestone Payments”). Furthermore, we shall pay Enkefalos royalties based on net sales. Such royalties range from low-single digit percentages to mid-single digit percentages with higher sales being subject to lower percentages. The Enkefalos License Agreement shall expire upon the expiration of the final payment obligation due to Enkefalos as set forth in such agreement. Upon the expiration of the Enkefalos Patent License Agreement, we shall have a fully paid, irrevocable, freely transferable and sublicensable worldwide license to the Licensed Patent Rights and Licensed Technology to Develop, have Developed, make, have made, use, have used sell, offer for sale, have sold, import, have imported, export, have exported, commercialize or have commercialized any and all Licensed Products and to practice the Licensed Technology worldwide. Pursuant to the Enkefalos License Agreement, either the Company or Enkefalos may terminate the Enkefalos License Agreement on written notice to the other party. Upon termination of the Enkefalos License Agreement, the license granted pursuant to such agreement shall terminate and all rights in the Licensed Patent Rights and Licensed Products shall revert back to Enkefalos.
Current report — wording carried from elsewhere
Cash used in operating activities for the year ended December 31, 2024 was $10.9 million which consisted of net loss of $12.2 million, partially offset by non-cash stock-based compensation of approximately $0.7 million, non-cash stock issuance pursuant to a services agreement of less than $0.1 million, and net changes in operating assets and liabilities of approximately $0.6 million.