Ernexa Therapeutics Inc 10-K for FY2024

Ernexa Therapeutics Inc. (ERNA)

10-K 2025-03-12 For: 2024-12-31

Added on April 06, 2026

About this 10-K

Ernexa Therapeutics Inc filed this 10-K on March 12, 2025, covering the fiscal year ended December 31, 2024 (FY2024).

Headline figures

Fiscal year ended December 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $582K; up 755.9% from $68K a year earlier
Net loss: $44.54M; compared with a net loss of $21.67M a year earlier
Diluted EPS: -$3.26; compared with -$4.08 a year earlier

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Delaware		31-1103425
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

1035 Cambridge Street, Suite 18A, Cambridge, MA		02141
(Address of Principal Executive Offices)		(Zip Code)

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Stock, $0.005 par value		ERNA		Nasdaq Capital Market

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

		Page
Item
	Part I

1.	Business	1
1A.	Risk Factors	12
1B.	Unresolved Staff Comments	31
1C.	Cybersecurity	31
2.	Properties	31
3.	Legal Proceedings	31
4.	Mine Safety Disclosures	31

	Part II

5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	32
6.	[Reserved]	33
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
7A.	Quantitative and Qualitative Disclosures About Market Risk	42
8.	Financial Statements and Supplementary Data	42
9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	42
9A.	Controls and Procedures	42
9B.	Other Information	43
9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	43

	Part III

10.	Directors, Executive Officers and Corporate Governance	44
11.	Executive Compensation	46
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	52
13.	Certain Relationships and Related Transactions, and Director Independence	54
14.	Principal Accountant Fees and Services	55

	Part IV

15.	Exhibits and Financial Statement Schedule	56
16.	Form 10-K Summary	58
	Signatures	59
	Index to Financial Statements	F-1

	●	We will require substantial additional capital to fund our operations, and if we fail to obtain the necessary financing, we may not be able to continue as a going concern.
	●	We have incurred significant losses since our inception and expect to continue to incur losses for the foreseeable future, which, together with our limited financial resources and substantial capital requirements, make it difficult to assess our prospects.
	●	We depend substantially, and expect in the future to continue to depend, on in-licensed intellectual property. Such licenses impose obligations on our business, and if we fail to comply with those obligations, we could lose license rights, which would substantially harm our business.
	●	We rely heavily on in-licensed intellectual property from Factor Limited. Loss of this license or termination of the Factor L&C Agreement could significantly harm our product development and ability to enter co-development strategic partnerships, materially impacting our business..
	●	We have previously identified a material weakness in our internal control over financial reporting, which may adversely affect investor confidence in us, result in litigation and materially and adversely affect our business and operating results.

	●	Our product development relies on novel, inherently risky technologies. Stem cell therapy is a relatively new field, and our efforts may not result in effective treatments for human diseases.
	●	We are in an industry with intense competition and rapid technological change and our competitors may develop therapies that are more advanced, safer or more effective than any therapy we may develop in the future, which may adversely affect our financial condition.
	●	Negative public opinion and increased regulatory scrutiny due to ethical and other concerns surrounding the use of stem cell therapy or human tissue may damage public perception of our synthetic allogeneic iMSC product candidates or adversely affect our ability to conduct our business.
	●	The manufacture of biotechnology products is complex, and manufacturers often encounter difficulties in production.

	●	Seven stockholders collectively own a significant percentage of our outstanding common stock, and as a result of such ownership, such stockholders may influence the election of directors and other matters submitted to stockholders.
	●	Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock.
	●	Anti-takeover provisions of Delaware law and provisions in our charter and bylaws could make a third-party acquisition of us difficult.

	●	The regulatory approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable. If we are unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.
	●	If we are unable to obtain and maintain patent and other intellectual property protection, or if the scope of the patent and other intellectual property protection obtained is not sufficiently broad, our business, financial condition, results of operations, and/or prospects may be materially and adversely effected.
	●	If we do not obtain patent term extension for future products that our strategic partners or collaborators may successfully develop, our business may be materially harmed.
	●	Changes in patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect future products and product candidates that we or our strategic partners or collaborators may develop.
	●	We may not be able to protect our intellectual property rights throughout the world.
	●	We may become involved in lawsuits to protect or enforce our patents and other intellectual property rights, which could be expensive, time-consuming and unsuccessful.

Family Number and Title	United States or Foreign Jurisdiction	Earliest Effective Date of Patent Application
FAB-001: “Methods and Products for Transfecting Cells”	Granted: US (Nos. 10829738, 10982229, 11692203, 10472611, 11466293, 10662410, 12227757); EP (No. 2788033 (CH; DE; FR; GB; IE)); EP (No. 3260140 (BE; CH; DE; DK; FR; GB; IE; NL); CA (No. 2,858,148); JP (Nos. 6073916, 6294944); KR (No. 10-2196339) Pending: US (4X), EP, CA	12/05/2011

FAB-003: “Methods and Products for Transfection”	Granted: US (Nos. 8497124, 9127248, 11492600, 9399761, 9562218, 9695401, 9879228, 9969983, 10131882, 10301599, 10443045, 12227768) Pending: US (3X)	5/07/2012

FAB-005: “Methods and Products for Expressing Proteins in Cells”	Granted: : JP (Nos. 6510416, 6890565, 6793146, 7436406); KR (No. 10-2121086); CA (No. 2890110) Pending: JP, US	11/01/2012

FAB-009: “Nucleic Acid Products and Methods of Administration Thereof”	Granted: JP (Nos. 7199809, Not Assigned Yet) Pending: CA, JP	02/16/2016

Family Number and Title	United States or Foreign Jurisdiction	Earliest Effective Date of Patent Application
FAB-010: “Nucleic Acid Products and Methods of Administration Thereof”	Pending: US, CA, EP	08/17/2017

FAB-011: “Nucleic Acid-Based Therapeutics”	Pending: US (2X), EP	03/27/2019

FAB-013: “Engineered Gene-Editing Proteins”	Pending: US, EP	05/12/2021

FAB-016: “Mesenchymal Stem Cell Therapies”	Pending: US, EP, JP	04/28/2021

FAB-017: “Engineered Immune Cell Therapies”	Pending: US, CA, EP and JP	03/04/2022

FAB-018: “Circular RNA”	Pending: US, CA, EP and JP	04/27/2022

FAB-019: “Methods for reprogramming and gene editing cells”	Pre-nationalization PCT: (1X)	01/05/2022

FAB-021: ““Methods for reprogramming and gene editing cells”	Pre-nationalization PCT: (1X)	05/01/2024

FAB-023: “Methods for reprogramming and gene editing cells”	Pre-nationalization PCT: (1X) Pending: US	09/20/2024 04/19/2024

US – United States of America EP – European Patent Convention PCT – Patent Cooperation Treaty BE – Belgium CA – Canada CH – Switzerland DE – Germany DK – Denmark FR – France GB – Great Britain IE – Ireland JP – Japan KR – Republic of Korea (South Korea) NL – Netherlands

	●	FAB-021: “Methods for reprogramming and gene editing cells” The present disclosure provides improved methods for reprogramming and gene editing cells. The present disclosure provides a method of inserting a sequence in a DNA site by introducing a single strand break followed by insertion of the sequence using a single-stranded repair template. In another aspect, the present disclosure provides a method of activating gene expression in a cell during its differentiation. In another aspect, the present disclosure methods and compositions related to iPSC-derived mesenchymal stroma/stem cells that overexpressed IDO1. In another aspect, the present disclosure provides a solid support comprising iPSC-derived mesenchymal stem cells which can be used to treat organ damage.

	●	FAB-023: “Methods for reprogramming and gene editing cells” The present disclosure provides improved methods for reprogramming and gene editing cells. The present disclosure provides a method gene editing a cell using engineered chromatin opening sequence at the DNA target site. The cells can be induced pluripotent stem cells. The disclosure is also directed to the targeting the inhibition of tumor promoting genes.

	●	completion of preclinical laboratory tests, animal studies and formulation studies according to the FDA’s good laboratory practice, or GLP, regulations;
	●	submission of an investigational new drug application (“IND”), which must become effective before human clinical trials may begin and which must include approval by an institutional review board (“IRB”) at each clinical site before the trials are initiated;
	●	performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug for its intended use conducted in compliance with federal regulations and good clinical practice (“GCP”), an international standard meant to protect the rights and health of human clinical trial subjects and to define the roles of clinical trial sponsors, administrators, and monitors;
	●	submission to, and acceptance by, the FDA of a MA;
	●	satisfactory completion of an FDA inspection of our manufacturing facility or other facilities at which the drug or biologic is produced to assess compliance with current good manufacturing practice (“cGMP”), regulations to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;
	●	potential FDA audit of the non-clinical and clinical trial sites that generated the data in support of the MA: and
	●	FDA review and approval of the MA.

	●	Phase 1 clinical trials involve the initial introduction of the drug or biologic into human subjects. These studies are designed to determine the safety of usually single doses of the compound and determine any dose limiting intolerance, as well as evidence of the metabolism and pharmacokinetics of the drug in humans. For some products for severe or life-threatening diseases, especially if the product may be too toxic to administer to healthy humans, the initial clinical trials may be conducted in individuals having a specific disease for which use the tested product is indicated.
	●	Phase 2 clinical trials usually involve studies in a limited patient population to evaluate the safety and efficacy of the drug or biologic for specific, targeted indications, to determine dosage tolerance and optimal dosage, and to identify possible adverse effects and safety risks.
	●	In Phase 3, if a compound is found to be potentially effective and to have an acceptable safety profile in Phase 2 (or occasionally Phase 1) studies, the Phase 3 studies will be conducted to further confirm clinical efficacy, optimal dosage and safety within an expanded population which may involve geographically diverse clinical trial sites. Generally, but not always, two adequate and well-controlled Phase 3 clinical trials are required by the FDA for approval of a marketing application.
	●	Phase 4 clinical trials are studies required of or agreed to by a sponsor that are conducted after the FDA has approved a product for marketing. These studies are used to gain additional experience from the treatment of patients in the intended therapeutic indication and to document a clinical benefit in the case of drugs approved under accelerated approval regulations. If the FDA approves a product while a company has ongoing clinical trials that were not necessary for approval, a company may be able to use the data from these clinical trials to meet all or part of any Phase 4 clinical trial requirement. Failure to promptly conduct Phase 4 clinical trials where necessary could result in withdrawal of approval for products approved under accelerated approval regulations.

	●	controls on government-funded reimbursement for drugs;
	●	mandatory rebates or additional charges to manufacturers for their products to be covered on Medicare Part D formularies;
	●	controls on healthcare providers;
	●	controls on pricing of pharmaceutical products, including the possible reference of the pricing of United States drugs to non-United States drug pricing for the same product;
	●	challenges to the pricing of drugs or limits or prohibitions on reimbursement for specific products through other means;
	●	reform of drug importation laws;
	●	entering into contractual agreements with payors; and
	●	expansion of use of managed-care systems in which healthcare providers contract to provide comprehensive healthcare for a fixed cost per person

	●	the timing, progress, costs and results of ERNA-101 and ERNA-102;
	●	the costs of any other product development programs we may initiate, including the costs to conduct the studies;
	●	the outcome, timing and cost of meeting regulatory requirements established by the FDA and other comparable foreign regulatory authorities;
	●	the pace and success of our potential strategic partners in co-developing our product candidates and the proceeds to us, if any, as a result;
	●	the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights;
	●	the cost of defending potential intellectual property disputes, including patent infringement actions brought by third parties against us or any of our potential co-development strategic partners or collaborators; and
	●	the effect of competing market developments.

	●	the scope of rights granted under the license agreement and other interpretation-related issues;
	●	whether and the extent to which our technology and processes infringe intellectual property of the licensor that is not subject to the licensing agreement;
	●	our right to sublicense patents and other intellectual property to third parties under the license agreement;
	●	our diligence obligations under the agreement and what activities satisfy those diligence obligations;
	●	the priority of invention of patented technology; and
	●	the ownership of inventions and know-how resulting from any joint creation or use of intellectual property by our licensors and us or our partners.

	●	we, or our license partners or current or future collaborators, might not have been the first to make the inventions covered by the issued patent or pending patent application that we license or may own in the future;
	●	we, or our license partners or current or future collaborators, might not have been the first to file patent applications covering certain of our or their inventions;
	●	others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing, misappropriating or otherwise violating any of our owned or licensed intellectual property rights;
	●	it is possible that our pending licensed patent applications or those that we may own in the future will not lead to issued patents;
	●	issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors or other third parties;
	●	our competitors or other third parties might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale;
	●	we may not develop additional proprietary technologies that are patentable;
	●	the patents of others may harm our business;
	●	we may choose not to file a patent in order to maintain certain trade secrets or proprietary know- how, and a third party may subsequently file a patent covering such intellectual property; and
	●	our trade secrets or proprietary know-how may be unlawfully disclosed, thereby losing their trade secret or proprietary status.

	●	the FDA or comparable foreign regulatory authorities may not authorize us or our future clinical investigators to commence planned clinical studies, or require that we suspend ongoing clinical studies through imposition of clinical holds;
	●	negative results from our ongoing studies or other industry studies involving engineered or gene-edited cell therapy product candidates;
	●	delays in reaching or failing to reach agreement on acceptable terms with prospective clinical research organizations (“CROs”) and clinical study sites, the terms of which can be subject to considerable negotiation and may vary significantly among different CROs and study sites;
	●	inadequate quantity or quality of a product candidate or other materials necessary to conduct clinical studies, for example delays in the manufacturing of sufficient supply of finished drug product;
	●	difficulties obtaining ethics committee or IRB, approval to conduct a clinical study at a prospective site or sites;
	●	challenges in recruiting and enrolling subjects to participate in clinical studies, the proximity of subjects to study sites, eligibility criteria for the clinical study, the nature of the clinical study protocol, the availability of approved effective treatments for the relevant disease and competition from other clinical study programs for similar indications;

	●	severe or unexpected drug-related side effects experienced by subjects in a clinical study, such as severe neurotoxicity and cytokine release syndrome;
	●	the FDA or comparable foreign regulatory authorities may disagree with a proposed clinical study design, implementation of clinical trials or our interpretation of data from clinical studies, or may change the requirements for approval even after it has reviewed and commented on the design for our clinical studies;
	●	reports from non-clinical or clinical testing of other competing candidates that raise safety or efficacy concerns; and
	●	difficulties retaining subjects who have enrolled in a clinical study but may be prone to withdraw due to rigors of the clinical studies, lack of efficacy, side effects, personal issues, or loss of interest.

	●	the demand for our therapeutic candidates, if we obtain marketing approval;
	●	our ability to receive or set a price that we believe is fair for our future products;
	●	our ability to generate revenue and achieve or maintain profitability;
	●	the level of taxes that we are required to pay; and
	●	the availability of capital.

	Year ended December 31,
(in thousands)	2024			2023			Change
Revenue	$	582		$	68		$	514
Cost of revenues		96			236			(140	)
Gross income (loss)		486			(168	)		654

Operating expenses:
Research and development		4,604			5,920			(1,316	)
General and administrative		13,132			14,587			(1,455	)
Gain on lease termination		(1,576	)		-			(1,576	)
Acquisition of Exacis IPR&D		-			460			(460	)
Total operating expenses		16,160			20,967			(4,807	)

Loss from operations		(15,674	)		(21,135	)		5,461

Other (expense) income, net:
Loss on extinguishment of debt		(22,440	)		-			(22,440	)
Change in fair value of convertible notes		1,017			-			1,017
Change in fair value of bridge notes derivative liability		(1,459	)		-			(1,459	)
Change in fair value of warrant liabilities		414			215			199
Change in fair value of contingent consideration		66			118			(52	)
Loss on non-controlling investment		-			(59	)		59
Interest income		249			138			111
Interest expense		(6,752	)		(614	)		(6,138	)
Other income (expense), net		70			(334	)		404
Total other expense, net		(28,835	)		(536	)		(28,299	)
Loss before income taxes		(44,509	)		(21,671	)		(22,838	)
(Provision) benefit for income taxes		(30	)		3			(33	)
Net loss	$	(44,539	)	$	(21,668	)	$	(22,871	)

	Years ended December 31,
	2024		2023		Change
(in thousands)
Professional fees	$	759	$	1,181	$	(422	)
MSA/license expense		3,017		3,250		(233	)
Payroll-related		502		701		(199	)
Stock-based compensation		89		234		(145	)
Allocated occupancy expense		192		186		6
Other expenses, net		45		368		(323	)
Total research and development expenses	$	4,604	$	5,920	$	(1,316	)

	For the years ended December 31,
(in thousands)	2024			2023			Change
Cash (used in) provided by:
Operating activities	$	(15,836	)	$	(20,408	)	$	4,572
Investing activities		(365	)		(19	)		(346	)
Financing activities		6,260			16,556			(10,296	)
Net decrease in cash and cash equivalents	$	(9,941	)	$	(3,871	)	$	(6,070	)

	●	enhance the business process controls related to reviews over technical, complex, and non-recurring transactions;
	●	provide additional training to accounting personnel; and
	●	use external accounting advisors to review management’s conclusions on technical, complex and non-recurring matters.

Name	Age	Position
Sanjeev Luther	63	President and Chief Executive Officer and Director
Sandra Gurrola	58	Senior Vice President, Finance
James Bristol	78	Chairman of the Board
Peter Cicala	63	Director
Elena Ratner	48	Director
William Wexler	65	Director

Name		Title
Sanjeev Luther		President and Chief Executive Officer
Sandra Gurrola		Senior Vice President of Finance

2024 Summary Compensation Table
Name and Principal Position	Fiscal Year	Salary (US$)		Bonus (US$)			Stock-Based Awards (US$)⁽¹⁾		Option-Based Awards (US$)⁽¹⁾		Non-Equity Incentive Plan Compensation (US$)		Nonqualified deferred compensation earnings (US$)		All Other Compensation (US$)			Total Compensation (US$)
Sanjeev Luther, President and Chief Executive Officer	2024	$	550,000	$	75,000	⁽²⁾	$	—	$	2,422,818	$	—	$	—	$	—	⁾	$	3,047,818
Sandra Gurrola, Sr. Vice President of Finance	2024	$	275,000	$	—		$	—	$	110,198	$	—	$	—	$	—		$	385,198
	2023	$	255,833	$	50,050	⁽³⁾	$	—	$	—	$	—	$	—	$	—		$	305,883

	Option Awards												Stock Awards
Name	Grant Date		Number of securities underlying unexercised options (#) exercisable		Number of securities underlying unexercised options (#) unexercisable		Equity incentive plan awards: Number of securities underlying unexercised unearned options (#)		Option exercise price ($)		Option expiration date		Number of shares or units of stock that have not vested (#)		Market value of shares of units of stock that have not vested ($)		Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#)		Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested shares ($)
Sanjeev Luther, President and Chief Executive Officer	1/1/2024	⁽¹⁾		—		1,685,218		—		1.80		1/01/2034		—		—		—		—

Sandra Gurrola, Sr. Vice President of Finance	6/21/2021	⁽²⁾		—		—		—		—		—		437		127		—		—
	3/11/2022	⁽³⁾		5,725		478		—		38.60		3/11/2032		—		—		—		—
	4/26/2024	⁽⁴⁾		—		80,000		—		1.74		4/26/2034		—		—		—		—

1.	The stock option vests over three years, with 25% vesting on the one-year anniversary of the grant date, and the remaining stock options vesting in 24 substantially equal monthly installments thereafter.
2.	The restricted stock units vest at a rate of 25% of the shares subject to the award in four substantially equal annual installments on the anniversary date of the grant date.
3.	The stock option vests in 36 substantially equal monthly installments.
4.	The stock option vests over three years, with one-third vesting on the one-year anniversary of the grant date, and the remaining stock options vesting in 24 substantially equal monthly installments thereafter.

Compensation Element		Amount
Annual Board Member Compensation		Paid in cash or stock options at our board’s discretion. Cash paid in quarterly installments or upon the effective date of an earlier resignation of the non-employee director. Stock Options to vest quarterly over one year from grant date:
		Board Member: $40,000
		Board Chair: $70,000
Committee Member Retainers		Paid in cash or stock options at our board’s discretion. Cash paid in quarterly installments or upon the effective date of an earlier resignation of the non-employee director. Stock Options to vest quarterly over one year from grant date:
		Audit Committee: $7,500
		Compensation Committee: $5,000
		Nominating/Governance Committee: $4,000
Leadership Supplemental Retainer		Paid in cash or stock options, ‘s discretion. Cash paid in quarterly installments or upon the effective date of an earlier resignation of the non- employee director. Stock Options to vest quarterly over one year from grant date:
		Audit Committee Chair: $15,000
		Compensation Committee Chair: $10,000
		Nominating/Governance Committee Chair: $8,000
New Director Equity Award (outside directors)		Option for 8,290 shares of Common Stock, which option shall have an exercise price equal to the fair market value per share of common stock, as determined under the 2020 Plan, and, subject to continued service on our board of directors, vest in an initial installment of one-third of the shares on the first anniversary of the grant date, with the remaining shares to vest in 24 substantially equal installments thereafter.

●	each person known by us to be the beneficial owner of more than 5% of outstanding common stock;
●	each of our named executive officers and directors; and
●	all of our executive officers and directors as a group.

*Name and Address of Beneficial Owner*	Common Shares Beneficially Owned		Percentage of Common Shares Beneficially Owned
Greater than 5% Stockholders:
Charles Cherington⁽¹⁾		16,647,302		31.86	%
John Halpern^{(2)^}		5,228,571		9.99	%
Freebird Partners LP^{(3)^}		5,228,571		9.99	%
George Denny Estate ⁽⁴⁾		4,954,285		9.48	%
IAF, LLC⁽⁵⁾		2,679,214		5.13	%
Regolith Capital Investments LP ⁽⁶⁾		2,641,814		5.06	%
Named Executive Officers and Directors:
Sanjeev Luther⁽⁷⁾		631,956		1.20	%
Sandra Gurrola⁽⁸⁾		33,577		*
James Bristol⁽⁷⁾		124,525		*
Peter Cicala⁽⁷⁾		88,943		*
Elena Ratner		—		—
William Wexler⁽⁷⁾		15,895		*
All current directors and executive officers as a group (6 persons)⁽⁹⁾		894,896		1.68	%

(1)	The number of common shares beneficially owned consists of (i) 16,633,205 shares of common stock and (ii) 14,097 shares of common stock issuable upon the conversion of shares of Series A convertible preferred stock (assuming a conversion rate of 5.0583 per share). Mr. Cherington’s address is c/o Ara Partners, LLC, 200 Berkeley Street, 26^th Floor, Boston, MA, 02116.
(2)	The number of common shares beneficially owned consists of (i) 5,136,571 shares of common stock held by the John D. Halpern Revocable Trust, of which, Mr. Halpern and Katherine H. Halpern are trustees and (ii) 92,000 shares of common stock issuable upon exercise of prefunded warrants. Mr. Halpern and Ms. Halpern share voting and dispositive powers. Mr. Halpern’s address is PO Box 540 Portsmouth, New Hampshire 03802.
(3)	The number of common shares beneficially owned consists of (i) 5,136,686 shares of common stock and (ii) 91,885 shares of common stock issuable upon exercise of prefunded warrants. Freebird Investments LLC serves as the general partner of Freebird Partners LP. Curtis Huff is the sole member and 100% owner of Freebird Investments LLC, the President of Freebird Partners LP and the Managing Member of Freebird Investments LLC. By virtue of these relationships, each of Freebird Investments LLC and Mr. Huff may be deemed to share beneficial ownership of the securities held of record by Freebird Partners LP. The principal business address of Freebird Partners LP is 2800 Post Oak Blvd, Suite 2000, Houston, Texas 77056.
(4)	Denny Family Partners II, LLC owns 270,583 shares of common stock and the George Denny III 2021 Trust (the “Denny Trust”) owns 4,720,058 shares of common stock. Amos Denny is the managing partner of Denny Family Partners II, LLC and in such capacity has the sole voting and dispositive power over the shares owned by such entity. Amos Denny disclaims beneficial ownership of the shares held by Denny Family Partners II, LLC except to the extent of his pecuniary interest therein. The Denny Trust has four trustees who share voting and dispositive power over the shares owned by the Denny Trust. Each of the trustees disclaims beneficial ownership of the shares held by the Denny Trust except to the extent of their respective pecuniary interest therein, if any. The address for each of Denny Family Partners II, LLC and Denny Trust is PO Box 423, Poland, ME 04274. The number of common shares beneficially owned consists of (i) 4,940,188 shares of common stock and (ii) 14,097 shares of common stock issuable upon the conversion of shares of Series A convertible preferred stock (assuming a conversion rate of 5.0583 per share).
(5)	Represents outstanding shares of common stock. David Laughlin is the manager of IAF, LLC and has sole voting and dispositive power over the shares held by such entity. Mr. Laughlin disclaims beneficial ownership of the shares held by IAF, LLC except to the extent of his pecuniary interest therein. IAF LLC’s address is 115 Church Street, Charleston, SC 29401.

(6)	Includes (i) 2,478,881 shares of common stock held by Regolith Capital Investments LP (“Regolith”) and (ii) 162,933 shares of common stock held by Shameek Konar. Mr. Konar and his spouse are the General Partner of Regolith. By virtue of these relationships, each of Mr. Konar and his spouse may be deemed to share beneficial ownership of the shares held by Regolith. Regolith’s address is 10608 Stoppard View Way, Knoxville, TN, 37922.
(7)	Represents shares of common stock issuable upon exercise of options.
(8)	Includes 32,391 shares of common stock issuable upon exercise of options.
(9)	Includes 893,711 shares of common stock issuable upon exercise of options.

	Equity Compensation Plan Information
Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted- average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)		(b)		(c)
Equity compensation plans approved by securityholders⁽¹⁾		854,682	$	3.06		380,108
Equity compensation plans not approved by securityholders⁽²⁾		1,774,826	$	9.69		71,363
Total		2,629,508	$	7.53		451,471