Cell Source, Inc 10-Q for FY2024 Q3
Cell Source, Inc. (CLCS)
About this 10-Q
Cell Source, Inc filed this 10-Q on November 14, 2024, covering the quarter ended September 30, 2024 (FY2024 Q3).
Headline figures
Quarter ended September 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $1.42M
- compared with a net loss of $1.34M a year earlier
- Diluted EPS
- -$0.04
- compared with -$0.04 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
| 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:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
(Issuer’s telephone number)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||
| None | N/A | N/A |
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.
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).
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. (Check one):
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller
reporting company | |
| Emerging
growth company |
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 news 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 13, 2024, the registrant had shares of $ par value common stock outstanding.
CELL SOURCE, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024
TABLE OF CONTENTS
| 2 |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
CELL SOURCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Other current assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Deficiency | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Accrued expenses - related party | ||||||||
| Accrued expenses | ||||||||
| Accrued interest | ||||||||
| Accrued interest - related parties | ||||||||
| Accrued interest | ||||||||
| Accrued compensation | ||||||||
| Notes payable, net of debt discount of $ and $ as of September 30, 2024 and December 31, 2023, respectively | ||||||||
| Notes
payable - related parties, net of debt discount of $ | ||||||||
| Notes payable | ||||||||
| Convertible notes payable, net of debt discount of $ and $ as of September 30, 2024 and December 31, 2023, respectively | ||||||||
| Convertible notes payable - related parties | ||||||||
| Convertible notes payable | ||||||||
| Derivative liabilities | ||||||||
| Derivative liabilities - related party | ||||||||
| Derivative liabilities | ||||||||
| Financing liability | ||||||||
| Advances payable | ||||||||
| Advances payable - related party | ||||||||
| Advances payable | ||||||||
| Accrued dividend payable | ||||||||
| Total Liabilities | ||||||||
| Commitments and contingencies (Note 9) | ||||||||
| Stockholders’ Deficiency: | ||||||||
| Convertible Preferred Stock, $ par value, shares authorized; | ||||||||
| Series
A Convertible Preferred Stock, shares designated, shares issued and outstanding as of September 30, 2024 and
December 31, 2023; liquidation preference of $ | ||||||||
| Series
B Convertible Preferred Stock, shares designated, and shares issued and outstanding as of September 30,
2024 and December 31, 2023, respectively; liquidation preference of $ | ||||||||
| Series
C Convertible Preferred Stock, shares designated, and shares issued and outstanding as of September 30,
2024 and December 31, 2023, respectively; liquidation preference of $ | ||||||||
| Preferred stock, value | ||||||||
| Common Stock, $ par value, shares authorized; and shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Deficiency | ( | ) | ( | ) | ||||
| Total Liabilities and Stockholders’ Deficiency | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 3 |
CELL SOURCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| For
the Three Months Ended September 30, | For
the Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Operating Expenses: | ||||||||||||||||
| Research and development | $ | $ | $ | $ | ||||||||||||
| Research and development - related party | ||||||||||||||||
| Research and development | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Loss From Operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other (Expense) Income: | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expense - related parties | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expense - amortization of debt discount | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expense - amortization of debt discount - related parties | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expense - amortization of debt discount | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Change in fair value of derivative liabilities | ( | ) | ( | ) | ||||||||||||
| Change in fair value of derivative liabilities - related party | ( | ) | ( | ) | ||||||||||||
| Change in fair value of derivative liabilities | ( | ) | ( | ) | ||||||||||||
| Gain on extinguishment of note payable | ||||||||||||||||
| Total Other Expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Dividend attributable to Series A, B, and C preferred stockholders | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net Loss Applicable to Common Stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net Loss Per Common Share - Basic and Diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted Average Common Shares Outstanding - | ||||||||||||||||
| Basic and Diluted | ||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 4 |
CELL SOURCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIENCY
(Unaudited)
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Deficiency | ||||||||||||||||||||||||||||||||||
| FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| Convertible Preferred | Convertible Preferred | Convertible Preferred | Additional | Total | ||||||||||||||||||||||||||||||||||||||||
| Stock - Series A | Stock - Series B | Stock - Series C | Common Stock | Paid-In | Accumulated | Stockholders’ | ||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Deficiency | ||||||||||||||||||||||||||||||||||
| Balance, January 1, 2024 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Conversion of convertible notes payable and accrued interest into Series C Convertible Preferred Stock and common stock | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Series A, B and C Convertible Preferred Stock dividends: | ||||||||||||||||||||||||||||||||||||||||||||
| Accrual of earned dividends | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Payment of dividends in kind | ||||||||||||||||||||||||||||||||||||||||||||
| Payment of dividends in kind, shares | ||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued in satisfaction of accrued compensation | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Issuance of Series B Convertible Preferred Stock for cash, net | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Common stock issued in satisfaction of convertible note payable interest | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock in connection with extinguishment of note payable | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock in connection with extinguishment of note payable, shares | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of warrants in connection with: | ||||||||||||||||||||||||||||||||||||||||||||
| Satisfaction of accrued interest | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of convertible notes payable | ||||||||||||||||||||||||||||||||||||||||||||
| Conversion of Series C Convertible Preferred Stock into common stock | ||||||||||||||||||||||||||||||||||||||||||||
| Conversion of Series C Convertible Preferred Stock into common stock, shares | ||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation: | ||||||||||||||||||||||||||||||||||||||||||||
| Warrants | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Common stock | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Series A, B and C Convertible Preferred Stock dividends: | ||||||||||||||||||||||||||||||||||||||||||||
| Accrual of earned dividends | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Payment of dividends in kind | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Issuance of Series B Convertible Preferred Stock for cash, net | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Common stock issued in satisfaction of convertible note payable interest | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation: | ||||||||||||||||||||||||||||||||||||||||||||
| Warrants | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Series A, B and C Convertible Preferred Stock dividends: | ||||||||||||||||||||||||||||||||||||||||||||
| Accrual of earned dividends | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Issuance of Series B Convertible Preferred Stock for cash, net | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Common stock issued for cash | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Warrant modification expense | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2024 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||
| 5 |
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Deficiency | ||||||||||||||||||||||||||||
| FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 | ||||||||||||||||||||||||||||||||||||
| Convertible Preferred | Convertible Preferred | Additional | Total | |||||||||||||||||||||||||||||||||
| Stock - Series A | Stock - Series C | Common Stock | Paid-In | Accumulated |
Stockholders’ | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Deficiency | ||||||||||||||||||||||||||||
| Balance, January 1, 2023 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| Conversion of convertible notes payable and accrued interest into Series C Convertible Preferred Stock and common stock | - | |||||||||||||||||||||||||||||||||||
| Series A and Series C Convertible Preferred Stock dividends: | ||||||||||||||||||||||||||||||||||||
| Accrual of earned dividends | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Issuance of warrants in connection with: | ||||||||||||||||||||||||||||||||||||
| Issuance of warrants in connection with issuance of convertible notes payable | - | - | - | |||||||||||||||||||||||||||||||||
| Conversion of Series C Convertible Preferred Stock into common stock | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Stock-based compensation: Common stock | - | - | ||||||||||||||||||||||||||||||||||
| Common stock | - | - | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance, March 31, 2023 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| Series A and Series C Convertible Preferred Stock dividends: | ||||||||||||||||||||||||||||||||||||
| Accrual of earned dividends | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Payment of dividends in kind | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of common stock in connection with extinguishment of note payable | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of warrants in connection with: | ||||||||||||||||||||||||||||||||||||
| Satisfaction of accrued interest | - | - | - | |||||||||||||||||||||||||||||||||
| Issuance of convertible notes payable | - | - | - | |||||||||||||||||||||||||||||||||
| Stock-based compensation: | ||||||||||||||||||||||||||||||||||||
| Warrants | - | - | - | |||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance, June 30, 2023 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| Balance | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| Conversion of convertible notes payable and accrued interest into Series C Convertible Preferred Stock and common stock | - | |||||||||||||||||||||||||||||||||||
| Issuance of warrants in connection with issuance of convertible notes payable | - | - | - | |||||||||||||||||||||||||||||||||
| Conversion of Series C Convertible Preferred Stock into common stock | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Series A and Series C Convertible Preferred Stock dividends: | ||||||||||||||||||||||||||||||||||||
| Accrual of earned dividends | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Stock-based compensation: | ||||||||||||||||||||||||||||||||||||
| Warrants | - | - | - | |||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance, September 30, 2023 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| Balance | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 6 |
CELL SOURCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| 2024 | 2023 | |||||||
| For Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2024 | 2023 | |||||||
| Cash Flows From Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Gain on extinguishment of note payable | ( | ) | ( | ) | ||||
| Interest expense - amortization of debt discount | ||||||||
| Interest expense - amortization of debt discount - related parties | ||||||||
| Interest expense - amortization of debt discount | ||||||||
| Change in fair value of derivative liabilities - related party | ||||||||
| Change in fair value of derivative liabilities | ||||||||
| Non-cash interest expense - warrants | ||||||||
| Warrant modification expense | ||||||||
| Stock-based compensation: | ||||||||
| Common stock | ||||||||
| Warrants | ||||||||
| Stock-based compensation | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses | ||||||||
| Other current assets | ||||||||
| Accounts payable | ||||||||
| Accrued expenses | ( | ) | ||||||
| Accrued expenses - related party | ||||||||
| Accrued expenses | ||||||||
| Accrued interest | ||||||||
| Accrued interest - related parties | ||||||||
| Accrued interest | ||||||||
| Accrued compensation | ||||||||
| Net Cash Used In Operating Activities | ( | ) | ( | ) | ||||
| Cash Flows From Financing Activities: | ||||||||
| Proceeds from issuance of common stock and warrants | ||||||||
| Proceeds from issuance of Series B Convertible Preferred Stock and warrants | ||||||||
| Proceeds from issuance of convertible notes payable | ||||||||
| Proceeds from issuance of convertible notes payable - related party | ||||||||
| Proceeds from issuance of convertible notes payable | ||||||||
| Proceeds from issuance of notes payable | ||||||||
| Proceeds from issuance of notes payable - related party | ||||||||
| Proceeds from issuance of notes payable | ||||||||
| Proceeds from advances payable | ||||||||
| Proceeds from advances payable - related party | ||||||||
| Proceeds from advances payable | ||||||||
| Repayment of notes payable | ( | ) | ||||||
| Repayment of notes payable - related party | ( | ) | ||||||
| Repayment of notes payable | ( | ) | ||||||
| Repayment of financing liability | ( | ) | ( | ) | ||||
| Net Cash Provided By Financing Activities | ||||||||
| Net Increase (Decrease) In Cash | ( | ) | ||||||
| Cash - Beginning of Period | ||||||||
| Cash - End of Period | $ | $ | ||||||
| Supplemental Disclosures of Cash Flow Information: | ||||||||
| Cash paid for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Common stock issued in satisfaction of accrued compensation | $ | ( | ) | $ | ||||
| Common stock issued in connection with payment of Series A, B, and C Convertible Preferred Stock dividends in-kind | $ | $ | ||||||
| Financing of Director and Officer insurance | $ | $ | ||||||
| Conversion of Series C Convertible Preferred Stock into common stock | $ | $ | ||||||
| Conversion of accrued expenses into note principal | $ | $ | ||||||
| Accrual of warrant obligations in connection with issuance of notes payable | $ | $ | ||||||
| Warrants issued in satisfaction of accrued warrant obligation | $ | $ | ( | ) | ||||
| Issuance of warrants in connection with the issuance of notes payable | $ | $ | ||||||
| Issuance of warrants in connection with the exchange of notes payable | $ | $ | ||||||
| Accrual of earned preferred stock dividends | $ | ( | ) | $ | ( | ) | ||
| Conversion of convertible notes payable and accrued interest into Series C Preferred Stock and common stock | $ | $ | ||||||
| Issuance of warrants in connection with issuance of Series B Preferred Stock | $ | $ | ||||||
| Issuance of embedded derivative liabilities in connection with issuance of Series B Preferred Stock | $ | $ | ||||||
| Issuance of embedded derivative liabilities in connection with issuance of Series C Preferred Stock | $ | $ | ||||||
| Extinguishment of note payable for common stock | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 7 |
CELL SOURCE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Business Organization, Nature of Operations, Risks and Uncertainties and Basis of Presentation
Organization and Operations
Cell Source, Inc. (“Cell Source”, “CSI” or the “Company”) is a Nevada corporation formed on June 6, 2012 that is the parent company of Cell Source Limited (“CSL”), a wholly owned subsidiary which was founded in Israel in 2011 in order to commercialize a suite of inventions relating to certain cancer treatments. The Company is a biotechnology company focused on developing cell therapy treatments based on the management of immune tolerance. The Company’s lead prospective product is its patented Veto Cell immune system management technology, which is an immune tolerance biotechnology that enables the selective blocking of immune responses. CSL’s Veto Cell immune system management technology is based on technologies patented, owned, and licensed to CSL by Yeda Research and Development Company Limited, an Israeli corporation (“Yeda”) (see Note 9, Commitments and Contingencies). The Company’s target indications include: lymphoma, leukemia and multiple myeloma through the facilitation of safer and more accessible stem cell (e.g. bone marrow) transplantation acceptance, treatment of end stage kidney disease and other non-malignant organ diseases through improved organ transplantation (broadened donor pool, reduced dependence on post-transplant anti-rejection therapy), and ultimately treating a variety of cancers and non-malignant diseases.
Risks and Uncertainties
On October 7, 2023, a conflict arose between Israel and Hamas militants on Israel’s southern border from the Gaza Strip. The intensity and duration of Israel’s current war against Hamas is difficult to predict, and as are such war’s economic implications on the Company’s business and operations. To the extent that any of these negative developments do occur, they may have an adverse effect on the Company’s business, results of operations and its ability to raise additional funds. As of September 30, 2024, the Company considered the impact of the war on its business and operational assumptions and estimates and determined there were no material adverse impacts on the Company’s condensed consolidated results of operations and financial position.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the condensed consolidated financial position of the Company as of September 30, 2024 and the condensed consolidated results of its operations and cash flows for the three and nine months ended September 30, 2024 and 2023. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the operating results for the full year ending December 31, 2024 or any other period. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures of the Company as of December 31, 2023 and for the year then ended which were included in the Company’s Annual Report on Form 10-K that was filed with the Securities and Exchange Commission (“SEC”) on June 24, 2024.
Note 2 - Going Concern and Management Plans
During
the nine months ended September 30, 2024, the Company had not generated any revenues, had a net loss of approximately $
The
Company is currently funding its operations on a month-to-month basis. While there can be no assurance that it will be successful,
the Company is in active negotiations to raise additional capital. The Company’s primary sources of operating funds since
inception have been equity and debt financings. Management’s plans include continued efforts to raise additional capital
through debt and equity financings. There is no assurance that these funds will be sufficient to enable the Company to fully
complete its development activities or attain profitable operations. If the Company is unable to obtain such additional financing on
a timely basis or, notwithstanding any request the Company may make, if the Company’s debt holders do not agree to convert
their notes into equity or extend the maturity dates of their notes, the Company may have to curtail its development, marketing and
promotional activities, which would have a material adverse effect on the Company’s business, financial condition and results
of operations, and ultimately the Company could be forced to discontinue its operations and liquidate. Subsequent to September 30,
2024 and as more fully described in Note 10, Subsequent Events, the Company received aggregate proceeds of $
The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.
| 8 |
Note 3 - Summary of Significant Accounting Policies
There have been no material changes to the Company’s significant accounting policies included in the Annual Report on Form 10-K for the year ended December 31, 2023, except as disclosed herein.
The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. The fair value of the award is measured on the grant date and is then recognized over the period the services are required to be provided in exchange for the award, usually the vesting period. Upon the exercise of an option or warrant, the Company issues new shares of common stock out of its authorized shares.
Because the Company’s common stock historically was not actively traded on a public market, the fair value of the Company’s restricted equity instruments is estimated by management based on observations of the sales prices of both restricted and freely tradable common stock, or instruments convertible into common stock. The Company obtained a third-party valuation of its common stock as of July 1, 2024 and December 31, 2023, which was considered in management’s estimation of fair value during the three and nine months ended September 30, 2024. The third-party valuation was performed in accordance with regulation of Section 409A of the Internal Revenue Code (“IRC”) as well as FASB ASC Topic 718. The estimates used by management are considered highly complex and subjective. The Company anticipates that once its shares become more actively traded, the use of such estimates will no longer be necessary to determine the fair value of its common stock.
The independent appraisal utilized the market approach, specifically the Backsolve method. The Backsolve method utilizes the economics from a direct transaction in the Company’s securities in determining fair value. The Backsolve method utilizes the Black-Scholes option pricing method (“OPM”) which allocated a probability-weighted present value to the Company’s convertible securities. The following steps were applied under the OPM:
| ● | Establishment of total enterprise or equity value; | |
| ● | Analysis of equity rights for each class of security; | |
| ● | Selection of appropriate model for valuation purposes; | |
| ● | Determination of key valuation inputs; and | |
| ● | Computation of the fair value of the subject security. |
Under
the OPM, it was determined the Company’s common stock had a fair value of $ and $ as of July 1, 2024 and December 31, 2023,
respectively, which included a discount for lack of marketability of
The Company computes basic net loss per share by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding for the period and excludes the effects of any potentially dilutive securities. Diluted earnings per share includes the dilution that would occur upon the exercise or conversion of all dilutive securities into common stock using the “treasury stock” and/or “if converted” methods, as applicable.
Schedule of Securities Excluded From Calculation of Weighted Average Dilutive Common Shares
| September 30, | ||||||||
| 2024 | 2023 | |||||||
| Options | ||||||||
| Warrants | ||||||||
| Convertible notes [1] | ||||||||
| Convertible preferred stock | ||||||||
| Total | ||||||||
| [1] |
Recent Accounting Standards
In October 2023, the FASB issued ASU 2023-06, “Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative,” to amend certain disclosure and presentation requirements for a variety of topics within the ASC. These amendments align the requirements in the ASC to the removal of certain disclosure requirements set out in Regulation S-X and Regulation S-K, announced by the SEC. The effective date for each amended topic in the ASC is either the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or on June 30, 2027, if the SEC has not removed the requirements by that date. Early adoption is prohibited. The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements.
In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segments Disclosures (Topic 280), which updates reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses on both an annual and interim basis. The guidance becomes effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Since this new ASU addresses only disclosures, the Company does not expect the adoption of this ASU to have any material effects on its financial condition, results of operations or cash flows. The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023-07.
| 9 |
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This update also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024 with early adoption permitted. The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The standard is intended to require more detailed disclosures about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions presented on the face of the income statement. This ASU is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements. This ASU is applicable to entities with a single operating segment. The Company is currently evaluating the potential impact of this adoption on the condensed consolidated financial statements and related disclosures.
Note 4 - Fair Value
The following table provides a summary of the changes in fair value, including net transfers in and/or out, of all Level 3 liabilities measured at fair value on a recurring basis using unobservable inputs during the three and nine months ended September 30, 2024 and 2023:
Schedule of Changes in Fair Value of Liabilities Measured at Fair Value on a Recurring Basis
| Accrued | Accrued | Derivative | ||||||||||||||
| Interest | Compensation | Liabilities | Total | |||||||||||||
| Balance - January 1, 2024 | $ | $ | $ | $ | ||||||||||||
| Accrual of warrant obligation | ||||||||||||||||
| Accrual of common stock obligation | - | - | - | |||||||||||||
| Reclassification of warrant obligation to derivative liabilities | - | - | - | |||||||||||||
| Issuance of warrants and conversion option | ||||||||||||||||
| Issuance of warrants | ||||||||||||||||
| Common stock issued in satisfaction of accrued compensation | ( | ) | ( | ) | ||||||||||||
| Change in fair value | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Balance - March 31, 2024 | $ | $ | $ | $ | ||||||||||||
| Reclassification of warrant obligation to derivative liabilities | ( | ) | ||||||||||||||
| Issuance of warrants and conversion option | ||||||||||||||||
| Change in fair value | ( | ) | ||||||||||||||
| Balance - June 30, 2024 | $ | $ | $ | $ | ||||||||||||
| Issuance of warrants and conversion option | ||||||||||||||||
| Change in fair value | ||||||||||||||||
| Balance - September 30, 2024 | $ | $ | $ | $ | ||||||||||||
| Accrued | Accrued | |||||||||||
| Interest | Compensation | Total | ||||||||||
| Balance - January 1, 2023 | $ | $ | $ | |||||||||
| Accrual of warrant obligation | ||||||||||||
| Change in fair value | ( | ) | ( | ) | ( | ) | ||||||
| Balance - March 31, 2023 | ||||||||||||
| Accrual of common stock obligation | ||||||||||||
| Satisfaction of warrant obligation | ( | ) | ( | ) | ||||||||
| Change in fair value | ||||||||||||
| Balance - June 30, 2023 | ||||||||||||
| Change in fair value | ||||||||||||
| Balance - September 30, 2023 | $ | $ | $ | |||||||||
Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The Company’s Level 3 liabilities shown in the above table consist of accrued obligations to issue warrants and common stock to non-employees and is recorded at fair value at inception and subsequent changes in fair value are charged to the condensed consolidated statement of operations at each reporting period.
In applying the Black-Scholes option pricing model utilized in the valuation of Level 3 liabilities, the Company used the following approximate assumptions:
Schedule of Assumptions Used for Valuation of Level 3 Liabilities
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Risk-free interest rate | % - | % | % - | % | % - | % | % - | % | ||||||||
| Expected term (years) | - | - | - | - | ||||||||||||
| Expected volatility | % | % | % - | % | % | |||||||||||
| Expected dividends | % | % | % | % | ||||||||||||
The expected term used is the contractual life of the instrument being valued. Since the Company’s stock does not have significant trading volume, the Company is utilizing an expected volatility based on a review of the historical volatilities, over a period of time, equivalent to the expected life of the instrument being valued, of similarly positioned public companies within its industry. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued.
| 10 |
As
of September 30, 2024 and December 31, 2023, the Company had an obligation to issue and shares of common stock to service
providers that had a fair value of $
See Note 6, Notes Payable and Note 7, Stockholders’ Deficiency for additional details associated with the issuances of common stock, warrants and embedded conversion options.
Note 5 – Advances Payable
Advances payable and advances payable – related party represent cash received from investors for working capital purposes.
During
the three months ended September 30, 2024, the Company received aggregate proceeds of $
Note 6 – Notes Payable
As
of September 30, 2024 and through the date of this filing, notes and convertible notes payable with principal amounts totaling approximately
$
During
the three months ended September 30, 2024 and 2023, the Company recorded interest expense of $
Notes Payable
In
May 2024, the Company received proceeds of $
On
July 15, 2024, the Company entered into an exchange agreement with a note holder, whereby the parties agreed to exchange a note
payable with a principal amount of $
Notes Payable - Related Parties
In
May 2024, the Company received proceeds of $
Convertible Notes Payable
During
the three months ended March 31, 2024, a convertible note with $
On
March 22, 2024, the Company completed its private offering of
On
July 24, 2024, the Company entered into a note amendment agreement with a note holder to (i) extend the maturity date of a note in the
principal amount of $
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On
July 24, 2024, the Company entered into a note amendment agreement with a note holder to (i) extend the maturity date of a note in the
principal amount of $
On
November 29, 2023, the Company and a certain investor agreed to extend the maturity date of a certain convertible note payable in the
principal amount of $
Convertible Notes Payable - Related Parties
In
March 2024, the Company received additional advances of $
In
April 2024, the Company entered into note amendment agreements with a trust controlled by Darlene Soave to extend the maturity dates
of a note originally issued to Ms. Soave and assigned to the trust (the “Soave Note”) and the Verstraete Note to
Note 7 – Stockholders’ Deficiency
Preferred Stock Dividends
During
the three months ended September 30, 2024 and 2023, the Company accrued additional preferred dividends of $
During
the three months ended June 30, 2024, the Company issued an aggregate of shares of common stock at the stated value of $
per share for aggregate value of $
Series B Convertible Preferred Stock
During
the nine months ended September 30, 2024, the Company received gross proceeds of $
Series C Convertible Preferred Stock
See
Note 6, Notes Payable – Convertible Notes Payable for details associated with conversions of notes payable into shares
of Series C Convertible Preferred Stock. The embedded conversion option of the Series C Convertible Preferred Stock was accounted for
as a derivative liability under the Company’s sequencing policy and had an issuance date fair value of $
Common Stock
See Note 6, Notes Payable – Convertible Notes Payable for details associated with conversions of accrued interest into shares of common stock.
During
the three months ended March 31, 2024, the Company issued shares of the Company’s common stock with an issuance date fair
value of $
During
the three months ended March 31, 2024, the Company issued immediately vested shares of the Company’s common stock to
a certain consultant as compensation for services performed. The shares had a grant date fair value of $
During
the three and six months ended June 30, 2024, the Company issued and shares of the Company’s common stock to a certain
investor in satisfaction of convertible note payable late fees. The shares had an issuance date fair value of $
During
the three months ended September 30, 2024, the Company received gross proceeds of $
| 12 |
Stock Warrants
During
the three months ended March 31, 2024, the Company entered into an advisory agreement with a certain advisor to perform independent advisory
services in connection with business operations from January 5, 2024 to June 4, 2024. In consideration of services to be performed, the
Company issued -year warrants to purchase
See Note 6, Notes Payable and Note 7, Stockholders’ Deficiency – Common Stock for additional details associated with the issuance of stock warrants.
Stock-Based Compensation
During
the three months ended September 30, 2024, the Company recognized stock-based compensation expense of $, consisting of $ of
expense related to warrants which was included within accrued compensation and $
During
the nine months ended September 30, 2024, the Company recognized stock-based compensation expense of $, consisting of $
of expense related to warrants (of which, $ was included within stockholder’s deficiency and $(
There was unrecognized stock-based compensation expense as of September 30, 2024.
Note 8 – Related Party Transactions
As
of September 30, 2024 and December 31, 2023, the Company was required to issue warrants to purchase an aggregate of
See Note 6, Notes Payable – Convertible Notes Payable – Related Parties for details related to convertible notes held by directors of the Company. See Note 5, Advances Payable for details related to advances received from related parties.
Note 9 – Commitments and Contingencies
Yeda Research and License Agreement
During
the three months ended September 30, 2024 and 2023, the Company recorded research and development expenses of $
MD Anderson Agreements
During
the nine months ended September 30, 2024, the Company commenced work under the February 2019 clinical trial agreement, as amended in
May 2023, under which MD Anderson agreed to perform cell production and conduct Phase 1/2 human clinical trials with a second set of
12 patients for a total of approximately $
The
Company recognized $
Litigation
In
January 2019, the holder of a promissory note in the principal amount of $
Loss contingencies considered remote are generally not disclosed, unless they involve guarantees, in which case the guarantees would be disclosed. There can be no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. Aside from the matters discussed above, there are no other known contingencies through the date of this filing.
Note 10 – Subsequent Events
The Company has evaluated events that have occurred after the balance sheet and through the date the financial statements were issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements, except as disclosed below.
Subsequent to September 30, 2024, the Company
received gross proceeds of $
Subsequent to September 30, 2024, the Company received
gross proceeds of $
Subsequent to September 30, 2024, the Company entered
into note amendment agreements with a trust controlled by Darlene Soave to extend the maturity dates of a note originally issued to Ms.
Soave and assigned to the trust and the Verstraete Note, which had an outstanding principal amount of $
| 13 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of the condensed consolidated results of operations and financial condition of Cell Source, Inc. (“CSI”, “Cell Source”, the “Company”, “us,” “we,” “our,”) as of September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023 should be read in conjunction with our unaudited financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the Securities and Exchange Commission (“SEC”) on June 24, 2024.
This Quarterly Report contains forward-looking statements as that term is defined in the federal securities laws. The events described in forward-looking statements contained in this Quarterly Report may not occur. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of our plans or strategies, projected or anticipated benefits from acquisitions to be made by us, or projections involving anticipated revenues, earnings or other aspects of our operating results. The words “may,” “will,” “expect,” “believe,” “anticipate,” “project,” “plan,” “intend,” “estimate,” and “continue,” and their opposites and similar expressions, are intended to identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements and the projections upon which the statements are based. Factors that may affect our results include, but are not limited to, the risks and uncertainties discussed in Item 1A (“Risk Factors”) of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on June 24, 2024.
Overview
We are a cell therapy company focused on immunotherapy. Since our inception, we have been involved with the development of proprietary immune system management technology licensed from Yeda Research & Development Company Limited (“Yeda”), the commercial arm of the Weizmann Institute. We have since shifted the focus of our research and development efforts to MD Anderson.
This technology addresses one of the most fundamental challenges within human immunology: how to tune the immune response such that it tolerates selected desirable foreign cells, but continues to attack all other (undesirable) targets. In simpler terms, a number of potentially life-saving treatments have limited effectiveness today because the patient’s immune system rejects them. For example, while HSCT – hematopoietic stem cell transplantation (e.g. bone marrow transplantation) has become a preferred therapeutic approach for treating blood cell cancer, most patients do not have a matched family donor. Although matched unrelated donors and cord blood can each provide an option for such patients, haploidentical stem cell transplants (sourced from partially mismatched family members) are rapidly gaining favor as a treatment of choice. This is still a risky and difficult procedure primarily because of potential conflicts between host (recipient) and donor immune systems and also due to viral infections that often follow even successful HSCT while the compromised new immune system works to reconstitute itself by using the transplanted stem cells. Today, rejection is partially overcome using aggressive immune suppression treatments that leave the patient exposed to many dangers by compromising their immune system.
The unique advantage of Cell Source technology lies in the ability to induce sustained tolerance of transplanted cells (or organs) by the recipient’s immune system in a setting that requires only mild immune suppression, while avoiding the most common post-transplant complications. The scientific term for the result of successfully inducing such tolerance in a transplantation setting is chimerism, where the recipient’s immune system tolerates the co-existence of the (genetically different) donor type and host type cells. Attaining sustained chimerism is an important prerequisite to achieving the intrinsic GvL (graft versus leukemia) effect of HSCT and supporting the reconstitution of normal hematopoiesis (generation of blood cells, including those that protect healthy patients from cancer) in blood cancer patients. Preclinical data and initial clinical data show that Cell Source’s Veto Cell technology can provide superior results in allogeneic (donor-derived) HSCT by allowing for haploidentical stem cell transplants under a mild conditioning regimen, while avoiding the most common post-transplant complications. Combining this with CAR (Chimeric Antigen Receptor) T cell therapy as a unified VETO CAR-T treatment, we will be able to treat patients in relapse as well as those in remission and use the cancer killing power of CAR-T to protect the patient while their immune system fully reconstitutes, thus providing an end-to-end solution for blood cancer treatment by potentially delivering a fundamentally safer and more effective allogeneic HSCT: prevention of relapse; avoidance GvHD; prevention of viral infections; and enhanced persistence of GvL effect. This means that the majority of patients will be able to find a donor, and will have access to a potentially safer procedure with higher long term survival rates than what either donor-derived HSCT or autologous CAR-T each on their own currently provide.
The ability to induce permanent chimerism (and thus sustained tolerance) in patients – which allows the transplantation to overcome rejection without having to compromise the rest of the immune system – may open the door to effective treatment of a number of severe medical conditions, in addition to blood cancers, which are characterized by this need. These include:
| ● | The broader set of cancers, including solid tumors, that can potentially be treated effectively using genetically modified cells such as CAR-T cell therapy, but also face efficacy and economic constraints due to limited persistence based on immune system issues (i.e., the need to be able to safely and efficiently deliver allogeneic CAR-T therapy). Inducing sustained tolerance to CAR-T cells may bring reduced cost and increased efficacy by allowing for off-the-shelf (vs. patient-derived) treatments with more persistent cancer killing capability. | |
| ● | Organ failure and transplantation. A variety of conditions can be treated by the transplantation of vital organs. However, transplantation is limited both by the insufficient supply of available donor organs and the need for lifelong, daily anti-rejection treatments post-transplant. Haploidentical organ transplants, with sustained chimerism, have the potential to make life saving transplants accessible to the majority of patients, with the prospect of improved life quality and expectancy. | |
| ● | Non-malignant hematological conditions (such as type one diabetes and sickle cell anemia) which could, in many cases, also be more effectively treated by stem cell transplantation if the procedure could be made safer and more accessible by inducing sustained tolerance in the stem cell transplant recipient. |
Human Capital Resources
Other than our Chief Executive Officer, we currently do not have any full-time employees, but retain the services of independent contractors/consultants on a contract-employment basis.
| 14 |
Recent Developments
Preclinical Results and Clinical Results
After two years of intensive collaboration with Professor Zelig Eshhar, the inventor of CAR-T cell therapy, preclinical data confirmed that Veto Cells can markedly extend persistence of genetically modified T cells from the same donor and that genetically modified Veto Cells can effectively inhibit tumors expressing an antigen recognized by the transgenic T cell receptor. Furthermore, human Veto Cells transfected with CAR exhibit anti-tumor activity in-vitro without losing their veto activity. These preclinical results have formed the basis of our current development of a clinical protocol for allogeneic VETO CAR-T HSCT combined therapy for blood cancer treatment. Cell Source plans to submit this protocol for approval in 2025. Recent preclinical research has determined that Veto Cells can overcome rejection from both NK (natural killer) cells and T-cells, further enhancing their potential efficacy when used for off-the-shelf CAR-T cell therapy. The Phase 1/2 clinical trial at the University of Texas MD Anderson Cancer Center, using Cell Source’s Anti-viral Veto Cells, has completed the first five treatment cohorts, with 15 patients each receiving a haploidentical HSCT under reduced intensity conditioning with Veto Cells. This trial has thus far shown that there has been no toxicity associated with the Veto Cells, with patients showing successful stem cell engraftment, in the absence of severe GvHD. The study is expected to continue with additional cohorts of patients, using the current treatment protocol.
Private Placement of Series B Convertible Preferred Stock
Beginning in October 2023, the Company entered into subscription agreements with certain accredited investors in a private placement offering. Each unit, which is sold at a price of $7.50 per unit, consists of one (1) share of Series B Convertible Preferred Stock and a five-year warrant to purchase a certain number of shares of common stock at an exercise price of $0.75 per share. For every $100,000 of units acquired, the investor will receive warrants to purchase an aggregate of 150,000 shares of common stock.
From October 2023 through the date of filing, the Company has sold an aggregate of 210,132 units for gross proceeds of $1,576,000 and issued warrants to purchase 2,364,000 shares of the Company’s common stock.
Condensed Consolidated Results of Operations
Three Months Ended September 30, 2024 Compared with the Three Months Ended September, 2023
Research and Development
Research and development expense was $360,857 and $514,505 for the three months ended September 30, 2024 and 2023, respectively, a decrease of $153,648, or 30%. This decrease is primarily attributable to no patients being enrolled in the three months ended September 30, 2024 by MD Anderson.
General and Administrative
General and administrative expense, which is associated with external consulting and professional fees, payroll and stock-based compensation expenses, was $470,768 and $480,875 for the three months ended September 30, 2024 and 2023, respectively, a decrease of $10,107, or 2%. This decrease is primarily attributable to decreases in legal expenses of approximately $16,000, due to various legal matters that occurred in 2023, stock-based compensation expense of $20,000 and consulting expenses of $60,000, due to a decrease in various consulting services, partially offset by increases in accounting and audit expenses of approximately $57,000, due to increased work performed, and payroll expenses of $30,000.
Interest Expense
Interest expense for the three months ended September 30, 2024 and 2023 was $356,786 and $262,091, respectively, an increase of $94,695, or 36%. This increase is primarily associated with an increase in the balance of interest bearing notes during the 2024 compared to the prior period.
Interest Expense - Amortization of Debt Discount
Amortization of debt discount was $148,073 and $80,667 for the three months ended September 30, 2024 and 2023, respectively, an increase of $67,406, or 84%. This increase is primarily associated with an increase in notes payable issued in 2024 compared to the prior year.
Change in Fair Value of Derivative Liabilities
During the three months ended September 30, 2024, we recognized a gain on the change in fair value of derivative liability of $98,550.
Gain on Extinguishment of Note Payable
During the three months ended September 30, 2024, we recognized a gain on the extinguishment of a note payable of $17,893 via the issuance of warrants. The gain on extinguishment of note payable is attributable to the exchange of a promissory note in the principal amount of $30,000 for a five-year warrant to purchase 100,000 shares of common stock.
Nine Months Ended September 30, 2024 Compared with the Nine Months Ended September, 2023
Research and Development
Research and development expense was $1,537,081 and $1,218,593 for the nine months ended September 30, 2024 and 2023, respectively, an increase of $318,488, or 26%. This increase is primarily attributable to a patient enrollment milestone being achieved during the 2024 period, compared to no patient enrollment milestones being achieved during the 2023 period.
General and Administrative
General and administrative expense, which is associated with external consulting and professional fees, payroll and stock-based compensation expenses, was $1,626,352 and $2,097,801 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $471,449, or 22%. This decrease is primarily attributable to decreases in legal expenses of $367,000, due to various legal matters that occurred in 2023, stock-based compensation expense of $100,000 and consulting expenses of $150,000, due to a decrease in various consulting services, partially offset by an increase in external expenses of $84,000 and payroll expense of $72,000.
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Interest Expense
Interest expense for the nine months ended September 30, 2024 and 2023 was $730,539 and $635,143, respectively, an increase of $95,396, or 15%. This increase is primarily associated with an increase in the balance of interest bearing notes outstanding during the 2024 period compared to the prior period.
Interest Expense - Amortization of Debt Discount
Amortization of debt discount was $223,652 and $361,692 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $138,040, or 38%. This decrease is primarily associated with a majority of the debt discount being fully amortized during 2023.
Change in Fair Value of Derivative Liabilities
During the nine months ended September 30, 2024, we recognized a gain on the change in fair value of derivative liability of $81,604.
Gain on Extinguishment of Note Payable
Gain on extinguishment of note payable was $17,893 and $41,920 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $24,027, or 57%. This decrease is primarily attributable to the exchange of a $100,000 note occurring during the 2023 period as compared to a $30,000 note during the 2024 period.
Liquidity and Going Concern
We measure our liquidity in a number of ways, including the following:
| September 30,2024 | December 31, 2023 | |||||||
| Cash | $ | 22,992 | $ | 22,203 | ||||
| Working capital deficiency | $ | (18,940,556 | ) | $ | (15,611,543 | ) | ||
During the nine months ended September 30, 2024, we had not generated any revenues, had a net loss of approximately $4,181,000 and had used cash in operations of approximately $1,936,000. As of September 30, 2024, we had a working capital deficiency of approximately $18,941,000 and an accumulated deficit of approximately $45,849,000. As of September 30, 2024 and through the date of this filing, notes payable with principal amounts totaling $5,663,000 and $1,926,093, respectively, were past due. We will continue to incur net operating losses to fund operations. These conditions raise substantial doubt about our ability to continue as a going concern for at least one year from the date these financial statements are issued.
We are currently funding our operations on a month-to-month basis. While there can be no assurance that we will be successful, we are in active negotiations to raise additional capital. Our primary sources of operating funds since inception have been equity and debt financings. Management’s plans include continued efforts to raise additional capital through debt and equity financings. There is no assurance that these funds will be sufficient to enable us to fully complete our development activities or attain profitable operations. If we are unable to obtain such additional financing on a timely basis or, notwithstanding any request we may make, if our debt holders do not agree to convert their notes into equity or extend the maturity dates of their notes, we may have to curtail our development, marketing and promotional activities, which would have a material adverse effect on our business, financial condition and results of operations, and ultimately we could be forced to discontinue our operations and liquidate. Subsequent to September 30, 2024 and as more fully described in Note 10, Subsequent Events, the Company received aggregate proceeds of $75,000 from the issuance of common stock and $300,000 from the sale of Series B Convertible Preferred Stock. The Company will continue to incur net operating losses to fund operations
There can be no assurances that we will be successful in generating additional cash from equity or debt financings or other sources to be used for operations. Should we not be successful in obtaining the necessary financing to fund our operations, we would need to curtail certain or all operational activities and/or contemplate the sale of our assets, if necessary.
During the nine months ended September 30, 2024, our sources and uses of cash were as follows:
Net Cash Used in Operating Activities
We experienced negative cash flows from operating activities for the nine months ended September 30, 2024 and 2023 in the amounts of approximately $1,936,000 and $1,626,000, respectively. The net cash used in operating activities for the nine months ended September 30, 2024 was primarily due to cash used to fund a net loss of approximately $4,181,000, adjusted for net non-cash expenses in the aggregate amount of approximately $670,000, partially offset by $1,575,000 of net cash provided by changes in the levels of operating assets and liabilities. The net cash used in operating activities for the nine months ended September 30, 2023 was primarily due to cash used to fund a net loss of approximately $4,271,000, adjusted for non-cash expenses in the aggregate amount of approximately $753,000, partially offset by $1,892,000 of net cash provided by changes in the levels of operating assets and liabilities.
Net Cash Provided by Financing Activities
Net cash provided by financing activities for the nine months ended September 30, 2024 and 2023 was approximately $1,937,000 and $1,406,000, respectively. The net cash provided by financing activities during the nine months ended September 30, 2024 was attributable to $416,000 of proceeds from issuance of common stock and warrants, $776,000 of proceeds from the issuance of Series B Convertible Preferred Stock and warrants, approximately $647,000 of proceeds from the issuance of notes and convertible notes payable, proceeds from advances payable and a related party advance of 159,000 partially offset by the repayment of a financing liability in the amount of $49,000 and $13,000 related to the repayment of notes payable. The net cash provided by financing activities during the nine months ended September 30, 2023 was attributable to $677,000 of proceeds from the issuance of convertible notes to a related party director and $920,000 of proceeds from the issuance of convertible notes payable, partially offset by $191,000 of repayments towards the financing of the Company’s Director’s and Officer’s Insurance.
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Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Critical Accounting Estimates
The preparation of financial statements and related disclosures are in conformity with U.S. GAAP. These accounting principles require us to make estimates and judgments that can affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenue and expense during the periods presented. We believe that the estimates and judgments upon which we rely are reasonable based upon information available to us at the time that we make these estimates and judgments. To the extent that there are material differences between these estimates and actual results, our financial results will be affected. The accounting policies that reflect our more significant estimates and judgments and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results are described below.
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.
There have been no material changes to the Company’s critical accounting estimates since the 2023 Form 10-K except as described below.
Valuation of the Company’s Common Stock Price
Because the Company’s common stock historically was not actively traded on a public market, the fair value of the Company’s restricted equity instruments is estimated by management based on observations of the sales prices of both restricted and freely tradable common stock, or instruments convertible into common stock. The Company obtained a third-party valuation of its common stock as of July 1, 2024 and December 31, 2023, which was considered in management’s estimation of fair value during the three and nine months ended September 30, 2024. The third-party valuation was performed in accordance with regulation of Section 409A of the Internal Revenue Code (“IRC”) as well as FASB ASC Topic 718.
The independent appraisal utilized the market approach, specifically the Backsolve method. The Backsolve method utilizes the economics from a direct transaction in the Company’s securities in determining fair value. The Backsolve method utilizes the Black-Scholes option pricing method (“OPM”) which allocated a probability-weighted present value to the Company’s convertible securities. The following steps were applied under the OPM:
| ● | Establishment of total enterprise or equity value; | |
| ● | Analysis of equity rights for each class of security; | |
| ● | Selection of appropriate model for valuation purposes; | |
| ● | Determination of key valuation inputs; and | |
| ● | Computation of the fair value of the subject security. |
Under the OPM, it was determined the Company’s common stock had a fair value of $0.28 and $0.26 as of July 1, 2024 and December 31, 2023, respectively, which included a discount for lack of marketability of 25%. Furthermore, the independent appraisal determined the Company’s expected volatility was 75% and 65% as of July 1, 2024 and December 31, 2023, respectively, by evaluating historical and implied volatilities of guideline companies.
Item 3. Quantitative And Qualitative Disclosures About Market Risk.
Not applicable.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Annual Report, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the Principal Executive and Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Internal controls are procedures which are designed with the objective of providing reasonable assurance that (1) our transactions are properly authorized, recorded and reported; and (2) our assets are safeguarded against unauthorized or improper use, to permit the preparation of our condensed consolidated financial statements in conformity with United States generally accepted accounting principles.
In connection with the preparation of this Quarterly Report, management, with the participation of our Principal Executive and Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)). Based upon that evaluation, our Principal Executive and Financial Officer concluded that, as of September 30, 2024, our disclosure controls and procedures were effective.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
We are not currently involved in any pending legal proceeding or litigations and, to the best of our knowledge, no governmental authority is contemplating any proceeding to which we are a party or to which any of our properties is subject, which would reasonably be likely to have a material adverse effect on us.
Item 1A. Risk Factors.
There have been no material changes to the risk factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on June 24, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
In August 2024, we sold 1,312,500 shares of common stock to four (4) accredited investors at a purchase price of $0.317 per share. In connection with this transaction, we issued the investors ten-year warrants to purchase 1,312,500 shares of our common stock at an exercise price of $0.35 per share. We relied upon the exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), in connection with these issuances.
In July 2024, we issued we issued five-year warrants to purchase a total of 37,500 shares of our common stock at an exercise price of $0.75 per share to holders of promissory notes in exchange for their agreement to extend the maturity dates and amend certain other terms of the notes. We relied upon the exemption provided by Section 4(a)(2) of the Securities Act in connection with these transactions.
In July 2024, we issued a warrant to purchase 100,000 shares of our common stock at an exercise price of $0.35 per share to a holder of a promissory note in the principal amount of $30,000 in exchange for the cancellation of the promissory note. We relied upon the exemption provided by Section 3(a)(9) of the Securities Act in connection with this transaction.
Item 3. Defaults Upon Senior Securities.
As of September 30, 2024 and through the date of this filing, notes payable and convertible notes payable with face values totaling approximately $5,663,000 and $1,926,093, respectively, were past due. Such notes continue to accrue interest and all relevant penalties have been accrued as of September 30, 2024. Of such past due notes payable, a holder of a note with principal amount of $250,000 issued a notice of default. See Item 1 above for additional details. We are in negotiations with all holders to extend the maturity dates of such notes or to convert the principal and accrued interest into equity.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
In October 2024, our common stock was re-listed on the OTCQB Market.
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Item 6. Exhibits.
| 10.73 | Common Stock Purchase Agreement, dated as of August 20, 2024, between Cell Source, Inc. and the investors identified therein. | |
| 31* | Certification of principal executive officer and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32* | Certification of principal executive officer and principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS* | Inline XBRL Instance Document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104* | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith
| 19 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CELL SOURCE, INC. | ||
| Dated: November 14, 2024 | By: | /s/ Itamar Shimrat |
| Name: | Itamar Shimrat | |
| Title: | Chief Executive Officer and Chief Financial Officer (Principal Executive, Financial and Accounting Officer) | |
| 20 |
EXHIBIT 10.73
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the “Agreement”) is made as of this 20th day of August, 2024 by and among Cell Source, Inc., a Delaware corporation (the “Company”), and David Zolty Investment ULC, a Canadian Unlimited Liability Corporation, Solomon Zolty Investment ULC, a Canadian Unlimited Liability Corporation, Honey Kamenetsky Investment ULC, a Canadian Unlimited Liability Corporation, Helen Samuel Investment ULC, a Canadian Unlimited Liability Corporation, and Phyllis Friedman Investment ULC, a Canadian Unlimited Liability Corporation (the “Buyer”).
WHEREAS, the Company wishes to issue and sell to Buyers and the Buyers wish to purchase from the Company a total of One Million Five Hundred Thousand (1,500,000) shares of the Company’s Common Stock, $.001 par value (the “Common Stock”);
NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement, and of other valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
| 1. | Purchase of Shares. The Company does hereby sell to each Buyer and each Buyer does hereby purchase from the Company the number of shares (the “Shares”) of the Company’s Common Stock set forth next to such Buyer’s name below for the purchase price set forth next to such Buyer’s name below (the “Purchase Price”). |
| Name of Buyer | No. of Shares | Purchase Price | ||||||
| David Zolty Investment ULC | 187,500 | $ | 59,375 | |||||
| Solomon Zolty Investment ULC | 187,500 | $ | 59,375 | |||||
| Honey Kamenetsky Investment ULC | 187,500 | $ | 59,375 | |||||
| Helen Samuel Investment ULC | 187,500 | $ | 59,375 | |||||
| Phyllis Friedman Investment ULC | 750.000 | $ | 237,500 | |||||
Contemporaneous with the execution and delivery of this Agreement, each Buyer is delivering by wire transfer of immediately available the applicable Purchase Price to the account set forth on Exhibit A hereto and the Company is instructing the transfer agent and registrar of its Common Stock to register the applicable number of Shares in each Buyer’s name in book entry form.
|
2. | Warrant. As an inducement to each Buyer to purchase the Shares, the Company, upon the execution and delivery of this Agreement shall issue to each Buyer a ten (10) year warrant to purchase the number of shares of the Company’s Common Stock (the “Warrant Shares”) set forth next to such Buyer’s name below at an exercise price of $0.35 per share. |
| Name of Buyer | No. of Warrant Shares | |||
| David Zolty Investment ULC | 187,500 | |||
| Solomon Zolty Investment ULC | 187,500 | |||
| Honey Kamenetsky Investment ULC | 187,500 | |||
| Helen Samuel Investment ULC | 187,500 | |||
| Phyllis Friedman Investment ULC | 750.000 | |||
| 3. | Representations of the Company. The Company hereby represents and warrants to the Buyers as follows: |
| (a) | The Company is a corporation duly organized and validly existing and in good standing under the laws of the State of Nevada. |
| (b) | The Company has the full corporate power and authority to enter into this Agreement and to perform its obligations hereunder. |
| (c) | The Shares of Common Stock sold and issued to Buyer pursuant to this Agreement are duly authorized, validly issued and non-assessable. |
| (d) | When issued pursuant to the terms of the Warrant, the shares of Common Stock issuable upon the exercise of the Warrant (the “Warrant”) will be duly authorized, validly issued and non-assessable. |
| 2 |
| 4. | Representations of Buyer. Each Buyer hereby represents and warrants to the Company as follows: |
| (a) | The Shares and Warrant (collectively, the “Securities”) are being been acquired for investment and not with a view to the resale or distribution of such Shares. Such Shares are being acquired by the Buyer for its own account. |
| (b) | The Buyer understands that neither the Securities nor the Warrant Shares the Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on an exemption for private offerings. Because the Company has no obligation to effect such registration, the Buyer may have to continue to bear the economic risk of his investment in the Shares for an indefinite period. |
| (c) | The Buyer has relied only on the good faith information provided by the Company, has been given ample time and has had the opportunity to ask questions and has been given access to full and complete information regarding the Company. The Buyer has been provided access to all information requested by the Buyer. |
| (d) | The Buyer believes that an investment in the Company is suitable based upon the Buyer’s investment objectives and financial needs, and the Buyer has no need for liquidity of the investment contemplated by this Agreement. |
| (e) | The Buyer has the requisite knowledge to assess the relative merits and risks, is capable of interpreting financial statements, or has relied upon the advice of counsel, accountants and/or purchaser representative(s) with regard to tax aspects, risks and other considerations involved in the investment, and fully understands that the Buyer must look to the Buyer’s own advisors with respect to the tax consequences, risks and other considerations in connection with investing in the Company and consult with the Buyer’s own independent counsel or advisors regarding the tax consequences, risks and other considerations involved in the investment. |
| (f) | The Buyer is acquiring the Securities for long-term investment and not with a view toward resale, fractionalization or division or distribution thereof. |
| (g) | The Securities are being purchased by the Buyer in the Buyer’s name solely for the Buyer’s own beneficial interest and not as nominee for, or on behalf of, or for the beneficial interest of, or with the intention to transfer to, any other person, trust or organization. |
| (h) | The Buyer is aware that there are certain specific informational requirements which the Company must meet in connection with an offering to any person who is not an Accredited Investor (as defined in Rule 501), pursuant to Rule 501 of Regulation D of the rules and regulations of the Securities and Exchange Commission (“Rule 501”). There are no such specific informational requirements for offerings to Accredited Investors (as defined in Rule 501). The Company is making the offer and sale of the Securities to the Buyer in reliance on the representations by the Buyer that the Buyer is an Accredited Investor (as defined in Rule 501), and the Buyer so acknowledges and reaffirms that the Buyer is an Accredited Investor (as defined in Rule 501). |
| 3 |
| (i) | The Buyer is willing and able to bear the economic risk and loss of an investment in the Company in an amount equal to the total purchase price of the Securities. In making this statement, consideration has been given to whether the Buyer could afford a complete loss of the Buyer’s investment. |
| 5. | Governing Law. This Agreement and its validity, construction and performance shall be governed in all respects by the laws of the State of New York, without giving effect to principles of conflict of laws. Further, in the event that any dispute arises between the parties to this Agreement, unless otherwise set forth herein, such dispute shall be settled by a court of competent jurisdiction of the State of New York or the United States District Court for the Southern District of New York and the parties hereto agree to submit to the jurisdiction of the Courts of the State of New York or the United States District Court for the Southern District of New York. |
| 6. | Severability. If any provisions of this Agreement or the application of any provision hereof to any person or circumstance is held invalid, the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected unless the provision held invalid shall substantially impair the benefits of the remaining portions of this Agreement. |
| 7. | Benefit of Parties, Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective personal representatives, heirs, successors and assigns. This Agreement may not be assigned by any party hereto except with the prior written consent of the other party hereto. |
| 8. | Headings. The headings in the sections of this Agreement are inserted for convenience of reference only and shall not constitute a part hereof. |
| 9. | Construction. As used in this Agreement, words in the singular shall be construed as including the plural and vice versa and words in one gender shall include all genders unless the context shall clearly require otherwise. |
| 10. | Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument. |
| 4 |
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement to be executed by their duly authorized corporate officers as of the day and year first above written.
| THE COMPANY | ||
| CELL SOURCE, INC. | ||
| By: | /s/ Itamar Shimrat | |
| Name: | Itamar Shimrat | |
| Title: | President | |
| BUYERS: | ||
| DAVID ZOLTY INVESTMENT ULC | ||
| By: | /s/ David Zolty | |
| Name: | David Zolty | |
| Title: | ||
| SOLOMON ZOLTY INVESTMENT ULC | ||
| By: | /s/ Solomon Zolty | |
| Name: | Solomon Zolty | |
| Title: | ||
| HONEY KAMENETSKY INVESTMENT ULC | ||
| By: | ||
| Name: | Honey Kamenetsky | |
| Title: | ||
| HELEN SAMUEL INVESTMENT ULC | ||
| By: | /s/ Helen Samuel | |
| Name: | Helen Samuel | |
| Title: | ||
| PHYLLIS FRIEDMAN INVESTMENT ULC | ||
| By: | /s/ Benzion Friedman | |
| Name: | Benzion Friedman | |
| Title: | ||
| 5 |
EXHIBIT A
WIRE INSTRUCTIONS
Bank: TD Bank
Address: 224 West 57th Street, New York, NY 10019
Account in name of: Cell Source, Inc.
Account address: 57 West 57th Street, Suite 400, New York, NY 10019
Account #: 4313121115
ABA#: 026013673
| 6 |
Exhibit 31
CERTIFICATION OF
CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Itamar Shimrat, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Cell Source, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15I and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: November 14, 2024 | |
| /s/ Itamar Shimrat | |
| Itamar Shimrat | |
| Chief Executive Officer and Chief Financial Officer | |
| (Principal Executive, Financial, and Accounting Officer) |
Exhibit 32
CERTIFICATION OF
CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED
PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of Cell Source, Inc., a Nevada corporation (the “Company”), does hereby certify, to such officer’s knowledge, that:
The Quarterly Report for the quarter ended September 30, 2024 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Date: November 14, 2024 | |
| /s/ Itamar Shimrat | |
| Itamar Shimrat | |
| Chief Executive Officer and Chief Financial Officer | |
| (Principal Executive, Financial, and Accounting Officer) |