CVKD Cadrenal Therapeutics Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934‌

For the transition period from                  to               

Commission file number 001-41596

CADRENAL THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (904) 300-0701

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 7, 2024, there were 1,658,771 outstanding shares (excluding 123,715 shares held in abeyance by Transfer Agent) of common stock, par value $0.001 per share, of Cadrenal Therapeutics, Inc.

CADRENAL THERAPEUTICS, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CADRENAL THERAPEUTICS, INC.

BALANCE SHEETS 

The accompanying notes are an integral part of these financial statements.

CADRENAL THERAPEUTICS, INC.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

The accompanying notes are an integral part of these financial statements.

CADRENAL THERAPEUTICS, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(unaudited)

The accompanying notes are an integral part of these financial statements.

CADRENAL THERAPEUTICS, INC.
STATEMENTS OF CASH FLOWS

(unaudited)

The accompanying notes are an integral part of these financial statements.

CADRENAL THERAPEUTICS, INC.
Notes to Unaudited Financial Statements

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following management’s discussion and analysis of our financial condition and results of operations in conjunction with our unaudited financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and notes thereto for the year ended December 31, 2023, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed on March 11, 2024 (the “Annual Report”) with the U.S. Securities and Exchange Commission (the “SEC”). This discussion, particularly information with respect to our future results of operations or financial condition, business strategy, plans and objectives for future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special note regarding forward-looking statements” in this Quarterly Report on Form 10-Q. You should review the disclosure under Part 1, Item 1A of the Annual Report for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements. References in this Quarterly Report on Form 10-Q to “we,” “us,” “our” and similar first-person expressions refer to Cadrenal Therapeutics, Inc. (“Cadrenal”).

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. The statements contained in this report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “strategy,” “target,” “will,” “would” and similar expressions or variations intended to identify forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified under Part 1, Item 1A of the Annual Report. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Company Overview

We are developing tecarfarin, a new Vitamin K Antagonist (VKA) chronic anticoagulant (blood thinner) to prevent heart attacks, strokes, and deaths due to thrombosis (blood clots) in patients with implanted cardiac devices or rare cardiovascular conditions. The prevailing treatment for thrombosis is an oral anticoagulant, either a VKA, like warfarin, or a direct oral anticoagulant, (“DOAC”). VKAs block the production of vitamin K-dependent blood clotting factors, such that the blood is “thinned,” preventing clots, while DOACs directly block the activity of certain of these clotting factors. Tecarfarin, like warfarin, is a VKA.

Tecarfarin, a once-daily oral and reversible anticoagulation treatment, is expected to improve outcomes and reduce overall healthcare costs for patients that are not well served by currently available VKAs and for which DOACs are contraindicated or lack clinical evidence of efficacy. This includes patients with LVADs, patients with ESKD and AFib, and patients with mechanical heart valves, among others, where the need for VKA-dependent chronic anticoagulation has been underscored by recent clinical studies.

Tecarfarin is specifically designed to provide safer and more effective anticoagulation than the most commonly prescribed VKA, warfarin.

We anticipate that tecarfarin will address many of the bleeding and other adverse events and drug-to-drug interaction challenges of warfarin because tecarfarin is metabolized using a different metabolic pathway.

Extensive data indicates that tecarfarin may avoid kidney impairment problems, which are common in these patients. Late-stage clinical trials show that tecarfarin may offer enhanced stability and time in therapeutic range (TTR) that inversely correlates with major events. Cadrenal aims to show that tecarfarin will provide less dosing variability, enhancing the quality of care for patients and reducing the time-consuming and costly hassles of dosing adjustments for healthcare providers. We believe tecarfarin is the only new anticoagulant being developed for patients with implanted cardiac devices and certain other rare cardiovascular conditions. Despite breakthrough implanted cardiac device products by leading medical device companies such as Abbott, patients still depend on 70-year-old warfarin for the indefinite future.

Tecarfarin has an orphan drug designation from the U.S. Food and Drug Administration (the “FDA”) for the prevention of thrombosis and thromboembolism (blood clots) in patients with an implanted mechanical circulatory support device, which includes left ventricular assist device (LVAD), a heart pump. Tecarfarin also has orphan drug and fast-track designations from the FDA for the prevention of systemic thromboembolism of cardiac origin in patients with end-stage kidney disease (ESKD) and atrial fibrillation (AFib).

Tecarfarin has been evaluated in eleven (11) human clinical trials in over 1,000 individuals; (269 patients were treated for at least six months and 129 patients were treated for one year or more). In Phase 1, Phase 2 and Phase 2/3 clinical trials, tecarfarin has generally been well-tolerated in both healthy adult subjects and patients with chronic kidney disease (“CKD”). In the Phase 2/3 trial, EMBRACE-AC, the largest tecarfarin trial with 607 patients having completed it including those with mechanical heart valves, only 1.6% of the blinded tecarfarin subjects suffered from major bleeding and there were no thrombotic events.

Tecarfarin was developed by researchers using a small molecule “retrometabolic” drug design process which targets a different metabolic pathway than the most commonly prescribed drugs for the treatment of thrombosis and AFib. “Drug metabolism” refers to the process by which a drug is inactivated by the body and rendered easier to eliminate or to be cleared by the body. Most approved drugs, including warfarin, the only FDA-approved VKA, which is a prescribed drug for the treatment of thrombosis, are metabolized in the liver through a pathway known as the Cytochrome CYP450 system, or CYP450, by the enzymes known as CYP2C9 and CYP3A4.

By using a different metabolic pathway, tecarfarin eliminates or minimizes the CYP450 metabolism in the liver. Patients taking multiple medications that interact with CYP2C9, or CYP3A4, or those with impaired kidney function, can experience an overload in the pathway, creating a bottleneck that often leads to insufficient clearance, which results in a toxic build-up of one or more drugs. In some instances, patients taking multiple medications metabolized by the same CYP450 pathway may experience decreased efficacy of one or more of the medications due to rapid metabolism or increased drug effect and/or toxicity due to enzyme induction. Patient-specific genetic differences can also hinder drug clearance in the CYP450 pathway. Our product candidate tecarfarin was designed to follow a metabolic pathway distinct from the CYP450 pathway and is metabolized by both CYP450 and non-CYP450 pathways. We believe this may allow elimination by large capacity and non-saturable tissue esterase pathways that exist throughout the body rather than just in the liver.

There are approximately 15,000 patients in the U.S. with LVADs, and recent randomized controlled trials in LVAD patients have documented that currently available VKAs yield poor quality anticoagulation despite the tight management of anticoagulation in the clinical trial setting. Implantable LVAD therapy is used to improve quality of life, alleviate symptoms, and extend survival rates in patients with advanced heart failure, irrespective of eligibility for cardiac transplant. Patients with LVADs require chronic anticoagulation to reduce the risk of thromboembolic complications, and under the currently available anticoagulants, they commonly experience bleeding events. Recent data reveals that the current standard of care anticoagulant, warfarin, yields suboptimal levels of anticoagulation, leading to excess bleeding complications. LVAD patients require life-long anticoagulant therapy to reduce the risk of pump thrombosis and anticoagulation management in patients with LVADs continues to be a challenge. Patients and their clinicians are faced with the daily challenge of balancing the need for adequate anticoagulation versus the bleeding risks that are associated with excess anticoagulation. Warfarin is the only available oral anticoagulant for all currently available LVAD devices, however, warfarin is known to be a difficult medication to manage due to its labile metabolism, and its many drug-drug interactions which also impacts the stability of anticoagulation.

In patients with LVADs, recent data also highlights the need for a next generation VKA anticoagulant. The ARIES-HM3 study was designed to evaluate the need for chronic aspirin treatment in patients with the newest LVAD, the HeartMate3. The use of aspirin in LVAD patients was standard but had never been proven to be beneficial. The ARIES study randomized LVAD patients to continue aspirin, along with warfarin, versus warfarin alone. The main finding of the study revealed that aspirin is not helpful in LVAD patients; however, since all patients were receiving warfarin and had careful monitoring of the quality of anticoagulation, the study also provided the opportunity to determine if the quality of anticoagulation provided by warfarin, had an impact on patient outcomes. The analysis of this carefully controlled and monitored study showed that the average time in the therapeutic range was only 56% with warfarin, far below the target of 70%, and that, despite the superior design of the HM3 device, poor quality anticoagulation was associated with excess thrombotic and bleeding events. 

Initial Public Offering

On January 24, 2023, we consummated our initial public offering (the “IPO”) of 93,333 shares of our common stock, par value $0.001 per share (the “common stock”) at a public offering price of $75.00 per share, generating gross proceeds of $7,000,000. Our shares of common stock commenced trading on the Nasdaq on January 20, 2023 under the symbol “CVKD.”

Private Placement

On July 12, 2023, we entered into a securities purchase agreement (the “Purchase Agreement”) with an institutional investor (the “Investor”) pursuant to which we sold to the Investor in a private placement priced at-the-market (the “Private Placement”) consistent with the rules of the Nasdaq), (i) an aggregate of 86,667 shares of common stock, (ii) in lieu of additional share of common stock, pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to an aggregate of 199,047 shares of common stock, and (iii) accompanying common warrants (the “Common Warrants”) to purchase up to an aggregate of 285,715 shares of common stock. The combined purchase price of each share and accompanying Common Warrants was $26.25. The combined purchase price of each Pre-Funded Warrant and accompanying Common Warrants was $26.25.

The Private Placement closed on July 14, 2023. We received aggregate gross proceeds from the Private Placement of approximately $7.5 million before deducting the placement agent commissions and estimated offering expenses payable by us. We intend to use the net proceeds from the Private Placement for working capital purposes. H.C. Wainwright & Co., LLC (“H.C.W.”) acted as the placement agent in the Private Placement, and as part of its compensation, we issued to designees of H.C.W. Placement Agent Warrants to purchase up to 18,571 shares of common stock.

ATM Facility

During the quarter ended September 30, 2024, we sold 154,144 shares of our common stock through our at-the-market (ATM) facility with H.C.W., generating gross proceeds of $1,635,777 and net proceeds of $1,527,946.

During October 2024, we sold 237,099 shares of our common stock through our ATM facility. These sales were made at a weighted average price of $14.79 per share, resulting in additional gross proceeds of $3,507,817.

Warrant Inducement

On November 1, 2024, the Company entered into a warrant inducement letter agreement (the “Warrant Inducement Agreement”) with a holder (the “Holder”) of outstanding warrants to purchase up to 285,715 shares of common stock issued in a private placement offering on July 14, 2023 (the “Existing Warrants”) pursuant to which such holder exercised the Existing Warrants at a reduced exercise price of $16.50 generating approximately $4.7 million in gross proceeds. See Note 9-Subsequent Events for a more detailed discussion of the warrant inducement transaction.

Results of Operations

Results of Operations for the Three Months Ended September 30, 2024 and Three Months Ended September 30, 2023

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

General and administrative expenses

General and administrative expenses were $1,674,905 for the three months ended September 30, 2024 compared to $898,051 for the three months ended September 30, 2023. The $776,854, or 87%, increase can be primarily attributed to a $192,948 increase in personnel-related expenses as a result of the hiring of a Chief Operating Officer in February 2024 as well as annual pay raises for management in January 2024, a $422,147 increase in public company expenses, a $141,304 increase in stock-based compensation, and a $77,456 increase in professional fees and other expenses. These increases were partially offset by a $45,535 decrease in consulting expenses.

Research and development expenses

Research and development expenses were $784,646 for the three months ended September 30, 2024, compared to $243,948 for the three months ended September 30, 2023. The $540,698, or 222%, increase can be primarily attributed to a $291,155 increase in expenses associated with chemistry, manufacturing and controls (“CMC”), a $213,078 increase in consulting fees, and a $19,102 increase in personnel-related expenses.

Interest and dividend income

Interest and dividend income was $52,129 for the three months ended September 30, 2024. This represents the interest and dividend income earned from our investments in money market funds from the proceeds of our IPO and July 2023 Private Placement. Interest and dividend income was $106,145 for the three months ended September 30, 2023. The decrease in interest and dividend income in the current quarter can be attributed to lower balances in money market funds.

Results of Operations for the Nine Months Ended September 30, 2024 and Nine Months Ended September 30, 2023

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

General and administrative expenses

General and administrative expenses were $4,013,336 for the nine months ended September 30, 2024 compared to $2,647,407 for the nine months ended September 30, 2023. The $1,365,929, or 52%, increase can be primarily attributed to a $588,693 increase in personnel-related expenses as we hired a Chief Operating Officer in February 2024 as well as annual pay raises for management in January 2024, a $636,669 increase in public company expenses, and a $61,139 increase in professional fees. These increases were partially offset by a $93,788 decrease in consulting expenses.

Research and development expenses

Research and development expenses were $2,667,382 for the nine months ended September 30, 2024 compared to $3,720,222 for the nine months ended September 30, 2023. The prior period included a $3.0 million expense for the issuance of 40,000 shares of common stock (valued at $3.0 million) in January 2023 to HESP LLC, pursuant to the terms of an Amendment to the Asset Purchase Agreement. This $3.0 million decrease was partially offset by a $1,094,419 increase in expenses associated with chemistry, manufacturing and controls (“CMC”), a $666,033 increase in consulting fees, a $105,073 increase in personnel-related expenses, and a $69,120 increase in professional fees.

Change in fair value of derivative liabilities

Concurrent with the closing of the IPO in January 2023, the note holders converted the debt into common stock, accordingly, the derivative financial liabilities were de-recognized and reclassified to stockholders’ equity (deficit) on January 24, 2023.

The derivative liabilities were considered a level 3 fair value financial instrument and were remeasured up to January 24, 2023 which was the date of derecognition. We recorded a non-cash charge of $216,095 in January 2023. This charge represented the increase in the fair value of the derivative liabilities since the previous measurement date of December 31, 2022. We did not have such activity during the nine months ended September 30, 2024.

Loss on extinguishment of debt

We recorded a $740,139 loss on the extinguishment of debt during the nine months ended September 30, 2023. This loss represented the unamortized debt discount associated with the convertible notes and the November promissory notes, which were settled concurrent with the IPO. We did not have such activity during the nine months ended September 30, 2024.

Liquidity and Capital Resources

Since inception, we have incurred losses and negative cash flows from operations. To date, we have funded our operations from the proceeds of the sale of convertible notes, and the nonconvertible notes and warrants issued in November 2022, as well as our IPO completed in January 2023, our Private Placement consummated in July 2023, and the sale of common stock through our ATM facility. We had a net loss of $6,464,099 for the nine months ended September 30, 2024 which included $656,987 of non-cash expenses. Cash used in operating activities for the nine months ended September 30, 2024 totaled $5,566,844. As of November 7, 2024, we had cash and cash equivalents of approximately $11.3 million, which is expected to be sufficient to fund our operations for at least the next twelve months from the date of the filing of this Quarterly Report on Form 10-Q, however, we will require additional funding to complete our planned Phase 3 clinical trial and submit our New Drug Application.

Cash Flows

The following table summarizes our cash flows for the periods presented:

Operating activities

During the nine months ended September 30, 2024, cash used in operating activities was $5,566,844. Net loss adjusted for the non-cash items as detailed on the statement of cash flows, used $5,807,112 in cash, and the changes in operating assets and liabilities, as detailed on the statement of cash flows, provided $240,268 in cash primarily from a $329,504 increase in accounts payable partially offset by a $116,884 increase in deferred offering costs, and a $102,033 increase in prepaid expenses.

During the nine months ended September 30, 2023, cash used in operating activities was $2,835,878. Net loss adjusted for the non-cash items as detailed on the statement of cash flows, used $2,634,308 in cash, and the changes in operating assets and liabilities, as detailed on the statement of cash flows, used $201,570 in cash primarily from a decrease in accrued liabilities of $466,935 and a decrease in accounts payable of $263,239, partially offset by a $672,295 decrease in deferred equity offering costs.

Financing activities

During the nine months ended September 30, 2024, net cash provided by financing activities totaled $1,528,244. During the period, we utilized our ATM facility, which generated proceeds of $1,527,946, net of fees. In addition, we had proceeds of $298 from the exercise of Pre-Funded Warrants.

During the nine months ended September 30, 2023, net cash provided by financing activities totaled $11,915,991 as we completed our IPO in January 2023, generating net proceeds of $5,408,575, and we completed a private placement financing in July 2023, generating net proceeds of $6,507,416. We also received $250,000 from the exercise of warrants that we issued in November 2022, which proceeds were used to repay the notes that were issued in November, with accrued interest on the notes being paid in cash.  

Critical Accounting Estimates  

This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Significant estimates and assumptions made in the accompanying financial statements include but are not limited to the fair value of financial instruments, the fair value of stock-based awards, deferred tax assets and valuation allowance, income tax uncertainties, and certain accruals. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimated under different assumption or conditions.

Derivative Financial Instruments

We evaluate all of our agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. We account for certain redemption features that are associated with convertible notes as liabilities at fair value and adjust the instruments to their fair value at the end of each reporting period. Derivative financial liabilities are initially recorded at fair value, with gains and losses arising from changes in the fair value recognized in other income (expense) in the accompanying statements of operations and comprehensive loss for each reporting period while such instruments are outstanding. The embedded derivative liability is valued using a probability-weighted expected return model. If we repay the note holders or if, during the next round of financing, the note holders convert the debt into equity, the derivative financial liability will be de-recognized on that date. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

Stock-Based Compensation

We measure our stock-based awards granted to employees, consultants and directors based on the estimated fair values of the awards and recognize the compensation over the requisite service period. We use the Black-Scholes option-pricing model to estimate the fair value of our stock option awards. Stock-based compensation is recognized using the straight-line method. As the stock compensation expense is based on awards ultimately expected to vest, it is reduced by forfeitures. We account for forfeitures as they occur.

OFF-BALANCE SHEET ARRANGEMENTS

We did not have during the period presented, and we do not currently have, any off-balance sheet arrangements, as defined under the SEC rules.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2024. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. We have adopted and maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed in the reports filed under the Exchange Act, such as this Quarterly Report on Form 10-Q, is collected, recorded, processed, summarized, and reported within the time periods specified in the rules of the SEC. Our disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to management to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of September 30, 2024, our Chief Executive Officer and Chief Financial Officer concluded that, as of such a date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

During the quarter ended September 30, 2024, there were no changes in our internal control over financial reporting (as defined in Rules 13a 15(f) and 15d 15(f) of the Exchange Act) that occurred that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II: OTHER INFORMATION

Item 1. Legal Proceedings

We are not currently subject to any material legal proceedings.

Item 1A. Risk Factors

Investing in our securities involves a high degree of risk. Please refer to Part I, Item 1A, “Risk Factors,” contained in our Annual Report for a description of certain significant risks and uncertainties to which our business, financial condition and results of operations are subject. Except as set forth below, there have been no material changes from these risk factors as of the date of filing of this Quarterly Report on Form 10-Q.

We cannot be assured that we will be able to maintain our listing on the Nasdaq Capital Market. 

Our securities are listed on The Nasdaq Capital Market, a national securities exchange. We cannot be assured that we will continue to comply with the rules, regulations or requirements governing the listing of our common stock on Nasdaq Capital Market or that our securities will continue to be listed on Nasdaq Capital Market in the future. If Nasdaq should determine at any time that we fail to meet Nasdaq requirements, we may be subject to a delisting action by Nasdaq.

On September 6, 2023, we received a letter from Nasdaq stating that we were not in compliance with Nasdaq Listing Rule 5550(a)(2) (the “Rule”), requiring listed securities to maintain a minimum bid price of $1.00 per share because our closing bid price for the last 30 consecutive business days was below $1.00 per share. Pursuant to the Rule, we initially had 180 calendar days (until March 4, 2024), to regain compliance with the Nasdaq Listing Rules (the “Compliance Period”). On February 16, 2024, we requested an additional 180 calendar days to comply with the Rule. On March 5, 2024, we received written notification from Nasdaq granting our request for a 180-day extension or until September 3, 2024 to regain compliance with the Rule. On August 20, 2024, we effected a 1-for-15 reverse stock split. On September 5, 2024, we received a letter from Nasdaq stating that we had regained compliance with the Rule. However, there can be no assurance that we will continue to comply with the Rule or any other Nasdaq continued listing requirements.

If Nasdaq delists our securities from trading on its exchange at some future date, we could face significant material adverse consequences, including:

We will also need to raise additional capital to meet our long-term business objectives.

We had an accumulated deficit of $21,535,514 as of September 30, 2024 and a net loss of approximately $6,464,099 for the nine months ended September 30, 2024, having incurred significant losses from operations to date. We expect to incur significant expenses and continued losses from operations for the foreseeable future. We believe that our existing cash and cash equivalents will be sufficient to meet our anticipated cash requirements for the next twelve months, however, we will require additional financing as we continue to execute our business strategy, including additional funds for the initiation of enrollment of patients and completion of the planned pivotal Phase 3 trial for tecarfarin. Our unaudited financial statement for the nine months ended September 30, 2024 were prepared under the assumption that we will continue as a going concern; however, we expect our expenses to increase in connection with the initiation of enrollment of patients and completion of the planned pivotal Phase 3 trial for tecarfarin. Our liquidity may be negatively impacted as a result of research and development cost increases in addition to general economic and industry factors. In order to meet our expected obligations, we intend to raise additional funds through partnering and equity and debt financings or a combination of these potential sources of liquidity. There can be no assurance that funding will be available on acceptable terms on a timely basis, or at all. The various ways that we could raise capital carry potential risks. Any additional sources of financing will likely involve the issuance of our equity securities, which will have a dilutive effect on our stockholders. Any debt financing, if available, may involve restrictive covenants that may impact our ability to conduct our business. If we raise funds through partnering such as collaborations and licensing arrangements, we might be required to relinquish significant rights to our technologies or grant licenses on terms that are not favorable to us. If we do not succeed in raising additional funds on acceptable terms or at all, we may be unable to complete the planned Phase 3 trial.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(a) Unregistered Sales of Equity Securities

We did not sell any equity securities during the quarter ended September 30, 2024 and up to the date of the filing of this Quarterly Report on Form 10-Q in transactions that were not registered under the Securities Act other than as set forth below and as previously disclosed in our filings with the SEC.

On September 11, 2024, we issued 13,333 shares of restricted common stock to a consultant as partial compensation for services.

On October 10, 2024, we issued 25,000 shares of restricted common stock to a consultant as partial compensation for services.

(b) Use of Proceeds

Not applicable.

(c) Issuer Purchases of Equity Securities

Not applicable.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

During the three months ended September 30, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “nonRule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits.

The exhibits filed or furnished as part of this Quarterly Report on Form 10-Q are set forth on the Exhibit Index, which Exhibit Index is incorporated herein by reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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