GENELUX Corp 10-Q for FY2024 Q2

GENELUX Corp (GNLX)

10-Q 2024-08-14 For: 2024-06-30

Added on April 08, 2026

About this 10-Q

GENELUX Corp filed this 10-Q on August 14, 2024, covering the quarter ended June 30, 2024 (FY2024 Q2).

Headline figures

Quarter ended June 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $6.58M; compared with a net loss of $5.82M a year earlier
Diluted EPS: -$0.22; compared with -$0.23 a year earlier

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Large Accelerated Filer ☐	Non-Accelerated Filer ☒
Accelerated Filer ☐	Smaller Reporting Company ☒
	Emerging Growth Company ☒

PART I— FINANCIAL INFORMATION		3

Item 1.	Condensed Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Control and Procedures	30

PART II— OTHER INFORMATION		31

Item 1	Legal Proceedings	31
Item 1A	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	113
Item 3.	Defaults Upon Senior Securities	113
Item 4.	Mine Safety Disclosures	113
Item 5.	Other Information	113
Item 6.	Exhibits	114

SIGNATURES		116

	June 30,			December 31,
	2024			2023
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	7,858		$	9,418
Short-term investments		25,778			13,773
Prepaid expenses and other current assets		1,234			1,012
Total Current Assets		34,870			24,203

Property and equipment, net		1,306			1,170
Right of use assets		2,098			2,428
Long-term investments		6,813			-
Other assets		92			92
Total Other Assets		10,309			3,690

TOTAL ASSETS	$	45,179		$	27,893

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable and accrued expenses	$	4,786		$	3,784
Accrued payroll and payroll taxes		517			2,117
Lease liabilities, current portion		500			653
Total Current Liabilities		5,803			6,554

Lease liabilities, long-term portion		1,707			1,866
Total Liabilities		7,510			8,420

Shareholders’ Equity
Preferred stock, par value $0.001, 10,000,000 shares authorized; no shares issued and outstanding, respectively;		-			-
Common stock, par value $0.001, 200,000,000 shares authorized; 34,512,642 and 26,788,986 shares issued and outstanding, respectively		35			27
Treasury stock, 433,333 shares, at cost		(433	)		(433	)
Additional paid-in capital		274,028			241,389
Accumulated other comprehensive income (loss)		(11	)		14
Accumulated deficit		(235,950	)		(221,524	)
Total Shareholders’ Equity		37,669			19,473

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	45,179		$	27,893

	2024			2023			2024			2023
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
	(Unaudited)						(Unaudited)

Revenues	$	-		$	-		$	8		$	170

Operating expenses:
Research and development		4,417			2,943			8,427			5,788
General and administrative		2,475			2,452			6,588			6,239
Total operating expenses		6,892			5,395			15,015			12,027

Loss from operations		(6,892	)		(5,395	)		(15,007	)		(11,857	)

Other income (expenses):
Interest income		316			-			581			-
Interest expense		-			(24	)		-			(167	)
Debt discount amortization		-			-			-			(649	)
Financing costs		-			-			-			(3,110	)
Debt extinguishment costs					(402	)					(402	)
Total other income (expenses), net		316			(426	)		581			(4,328	)

NET LOSS	$	(6,576	)	$	(5,821	)	$	(14,426	)	$	(16,185	)

LOSS PER COMMON SHARE - BASIC AND DILUTED	$	(0.22	)	$	(0.23	)	$	(0.51	)	$	(0.72	)

WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED		29,689,344			25,068,334			28,308,046			22,334,311

	2024			2023			2024			2023
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
	(Unaudited)						(Unaudited)

Net loss	$	(6,576	)	$	(5,821	)	$	(14,426	)	$	(16,185	)

Other comprehensive loss:
Net unrealized loss on short and long-term investments		(6	)		-			(25	)		-
Comprehensive loss	$	(6,582	)	$	(5,821	)	$	(14,451	)	$	(16,185	)

	Shares		Amount		Shares		Amount		Shares			Amount			Capital		Income			Deficit			Total
	Preferred Stock				Common Stock				Treasury Stock						Additional Paid-in		Accumulated Other Comprehensive			Accumulated
	Shares		Amount		Shares		Amount		Shares			Amount			Capital		Income(Loss)			Deficit			Total

Balance, March 31, 2024 (unaudited)		-	$	-		26,996,740	$	27		(433,333	)	$	(433	)	$	244,869	$	(5	)	$	(229,374	)	$	15,084

Stock compensation		-		-		-		-		-			-			1,298		-			-			1,298

Unrealized loss on short and long-term investments		-		-		-		-		-			-			-		(6	)					(6	)

Fair value of vested restricted stock units		-		-		-		-		-			-			136		-			-			136

Issuance of common shares for cash and warrants, net of costs		-		-		7,500,000		8		-			-			27,670		-			-			27,678

Cost of stock option modifications and repricing		-		-		-		-		-			-			6								6

Issuance of common stock in connection with the Company’s equity award programs		-		-		15,902		-		-			-			49		-			-			49

Net loss during the three months ended June 30, 2024		-		-		-		-		-			-			-		-			(6,576	)		(6,576	)

Balance, June 30, 2024 (unaudited)		-	$	-		34,512,642	$	35		(433,333	)	$	(433	)	$	274,028	$	(11	)	$	(235,950	)	$	37,669

Balance, December 31, 2023		-	$	-		26,788,986	$	27		(433,333	)	$	(433	)	$	241,389	$	14		$	(221,524	)	$	19,473

Stock compensation		-		-		-		-		-			-			2,787		-			-			2,787

Unrealized loss on short and long-term investments		-		-		-		-		-			-			-		(25	)		-			(25	)

Fair value of vested restricted stock units		-		-		131,267		-		-			-			1,125		-			-			1,125

Cost of stock option modifications and repricing		-		-		-		-		-			-			320		-			-			320

Issuance of common shares for cash and warrants, net of costs		-		-		7,500,000		8		-			-			27,670		-			-			27,678

Issuance of common stock in connection with the Company’s equity award programs		-		-		15,902		-		-			-			49		-			-			49

Issuance of common shares upon exercise of stock warrants		-		-		76,487		-		-			-			688		-			-			688

Net loss during the six months ended June 30, 2024		-		-		-		-		-			-			-		-			(14,426	)		(14,426	)

Balance, June 30, 2024 (unaudited)		-	$	-		34,512,642	$	35		(433,333	)	$	(433	)	$	274,028	$	(11	)	$	(235,950	)	$	37,669

	June 30, 2024		June 30, 2023
Stock options		5,044,949		4,201,019
Stock warrants		7,897,975		932,854
Restricted stock units		57,323		113,500
Stock warrants, issuable upon conversion of notes payable		-		105,943
Total		13,000,247		5,353,316

	●	Level 1 — Quoted prices in active markets for identical assets or liabilities.

	●	Level 2 — Inputs, other than Level 1, that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

	●	Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

	Level 1		Level 2		Level 3		Total
	Fair Value Measurements as of June 30, 2024, Using:
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	7,414	$	—	$	—	$	7,414
Short and long-term investments:
US Government Agency bonds		—		13,710		—		13,710
US Treasury bonds		—		18,881		—		18,881
Total Cash equivalents and Short-term investments	$	7,414	$	32,591	$	—	$	40,005

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Credit Losses		Fair Value
US Government Agency bonds	$	13,715	$	—	$	(5	)	$	—	$	13,710
US Treasury bonds		18,889		—		(8	)		—		18,881
	$	32,604	$	—	$	(13	)	$	—	$	32,591

	June 30, 2024			December 31, 2023
Furniture and office equipment	$	148		$	148
Laboratory equipment		2,837			2,792
Computer equipment		127			127
Leasehold improvements		557			557
Construction-in-progress		1,208			995
Property and equipment, gross		4,877			4,619
Less: accumulated depreciation and amortization		(3,571	)		(3,449	)
Property and equipment, net	$	1,306		$	1,170

	Number of Restricted Shares			Fair Value			Weighted Average Grant Date Fair Value
Non-vested, December 31, 2023		57,900		$	1,103		$	22.40
Granted		130,690			852			6.52
Vested		(131,267	)		(989	)		7.53
Forfeited		—			—			—
Non-vested, June 30, 2024		57,323		$	966		$	16.85

Exercise prices	$	3.83 - 7.44
Expected dividends		—
Expected volatility		100.0	%
Risk free interest rate		4.3% - 4.5	%
Expected life of options		6.0

	Number of Option Shares			Exercise Price Range Per Share		Weighted Average Exercise Price
Balance, December 31, 2023		5,118,920			6.00 – 24.75		9.76
Granted		31,500			3.83 – 7.44		4.86
Cancelled		(80,471	)		6.00 – 22.40		14.15
Exercised		—			—		—
Expired		(25,000	)		6.00		6.00
Balance, June 30, 2024		5,044,949		$	3.83 - 24.75	$	9.64
Vested and exercisable, June 30, 2024		3,906,994		$	6.00 - 10.50	$	6.37
Unvested, June 30, 2024		1,137,955		$	6.00 – 24.75	$	21.00

		Options Outstanding						Options Exercisable
Range of Exercise Prices		Number Outstanding		Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Average Remaining Contractual Life (in years)		Weighted Average Exercise Price
$	3.83 – 6.00		3,835,162		3.89	$	6.00		3,770,691		3.84	$	6.00
	6.01 – 10.50		99,099		2.27		9.33		90,099		1.53		9.52
	10.51 – 24.75		1,110,688		9.20		22.26		68,704		9.19		22.40
$	3.83 - 24.75		5,044,949		5.06	$	9.64		3,906,994		3.88	$	6.37

	Number of Warrant Shares			Exercise Price Range Per Share		Weighted Average Exercise Price
Balance, December 31, 2023		512,759			3.00 - 10.50		7.14
Issued		7,500,000			5.25		5.25
Cancelled		—			—		—
Exercised		(76,487	)		9.00		9.00
Expired		(38,297	)		10.50		10.50
Balance, June 30, 2024		7,897,975		$	3.00 - 9.00	$	5.32
Vested and exercisable, June 30, 2024		7,897,975		$	3.00 - 9.00	$	5.32

		Warrants Outstanding						Warrants Exercisable
Range of Exercise Prices		Number Outstanding		Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Average Remaining Contractual Life (in years)		Weighted Average Exercise Price
$	3.00		133,333		2.67	$	3.00		133,333		2.67	$	3.00
	3.01 – 9.00		7,764,642		4.84		5.36		7,764,642		4.84		5.36

$	3.00 – 9.00		7,897,975		4.80	$	5.32		7,897,975		4.80	$	5.32

●	employee-related expenses, including salaries, benefits and stock-based compensation expense for our research and development personnel;

●	costs of funding research performed by third parties that conduct research and development and preclinical and clinical activities on our behalf;

●	costs of manufacturing drug product and drug supply related to our current or future product candidates;

●	costs of conducting preclinical studies and clinical trials of our product candidates;

●	consulting and professional fees related to research and development activities, including equity-based compensation to non-employees;

●	costs of maintaining our laboratory, including purchasing laboratory supplies and non-capital equipment used in our preclinical studies;

●	costs related to compliance with clinical regulatory requirements; and

●	facility costs and other allocated expenses, which include expenses for rent and maintenance of facilities, insurance, depreciation and other supplies.

●	the scope, rate of progress, and expenses of our ongoing research activities as well as any preclinical studies and clinical trials and other research and development activities;

●	establishing an appropriate safety profile;

●	successful enrollment in and completion of clinical trials;

●	whether our product candidates show safety and efficacy in our clinical trials;

●	receipt of marketing approvals from applicable regulatory authorities;

●	establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers;

●	obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates;

●	commercializing product candidates, if and when approved, whether alone or in collaboration with others; and

●	continued acceptable safety profile of the products following any regulatory approval.

	June 30,		June 30,
Research and Development Expenses:	2024		2023
Employee compensation and related expenses	$	949	$	621
Stock compensation, including the cost of stock options and restricted stock grants		623		248
Manufacturing and laboratory materials and other expenses		98		207
Outsourced manufacturing services		631		238
Clinical and regulatory expenses		1,742		1,039
Facility-related expenses, including depreciation		321		395
Consulting expenses and contract labor		50		182
Other expenses		3		13
Total research and development expenses	$	4,417	$	2,943

	June 30,		June 30,
General and Administrative Expenses:	2024		2023
Employee compensation and related expenses	$	608	$	604
Stock compensation, including the cost of stock options and restricted stock grants		818		459
Professional services		335		805
Facility-related expenses		111		89
Insurance expenses		244		269
Consulting and contract labor expenses		280		121
Other expenses		79		105
Total general and administrative expenses	$	2,475	$	2,452

	June 30,			June 30,
Net cash provided by (used in):	2024			2023
Operating activities	$	(11,178	)	$	(10,008	)
Investing activities		(18,797	)		(505	)
Financing activities		28,415			37,256
Net increase (decrease) in cash	$	(1,560	)	$	26,743

●	the costs of conducting preclinical studies and clinical trials;

●	the costs of manufacturing;

●	the scope, progress, results and costs of discovery, preclinical development, laboratory testing, and clinical trials for product candidates we may develop, if any;

●	the costs, timing, and outcome of regulatory review of our product candidates;

●	our ability to establish and maintain collaborations on favorable terms, if at all;

●	the achievement of milestones or occurrence of other developments that trigger payments under any license or collaboration agreements we might have at such time;

●	the costs and timing of future commercialization activities, including product sales, marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval;

●	the amount of revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval;

●	the costs of preparing, filing and prosecuting patent applications, obtaining, maintaining and enforcing our intellectual property rights, and defending intellectual property-related claims;

●	our headcount growth and associated costs as we expand our business operations and research and development activities;

●	the costs of operating as a public company; and
●	the impact of geopolitical and macroeconomic events, including future bank failures, increased geopolitical tensions between the U.S. and China, the Russia/Ukraine conflict, the Israel-Hamas war and global pandemics on U.S. and global economic conditions that may affect our ability to access capital on acceptable terms, if at all.

	●	We have incurred significant losses since our inception and anticipate that we will incur significant and increasing losses for the foreseeable future and we may never achieve or maintain profitability.
	●	We will require substantial additional financing to advance the development of our product candidates, which may not be available on acceptable terms, or at all. Failure to obtain this necessary capital could force us to delay, limit, reduce or terminate our product development programs, potential commercialization efforts or other operations.
	●	Our product candidates are in preclinical and clinical stages of development, are not approved for commercial sale and might never receive regulatory approval or become commercially viable.
	●	Our product candidates are based on a novel approach to the treatment of cancer, which makes it difficult to predict the time and cost of product candidate development.
	●	We currently have only one product candidate, Olvi-Vec, in clinical development. A failure of this product candidate in clinical development would adversely affect our business and may require us to discontinue development of other product candidates based on the same therapeutic approach.
	●	Preclinical and clinical development involve a lengthy and expensive process with an uncertain outcome and stringent regulations, and delays can occur for a variety of reasons.
	●	Changes in product candidate manufacturing or formulation may result in additional costs or delay.
	●	If we are unable to manufacture and release any product candidates in the volumes that we require on a timely basis, or fail to comply with stringent regulations applicable to biopharmaceutical manufacturers, we may face delays in the development and commercialization of, or be unable to meet demand for, any product candidates and may lose potential revenues.
	●	If we fail to comply with federal and state healthcare laws, including fraud and abuse laws, we could face substantial penalties and our business, financial condition, results of operations, stock price and prospects will be materially harmed.
	●	We are subject to stringent and evolving U.S. and foreign laws, regulations, rules, contractual obligations, policies and other obligations related to data privacy and security. Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse business consequences.
	●	If we are unable to obtain, maintain and protect our intellectual property rights for our technology and product candidates, or if our intellectual property rights are inadequate, our competitive position could be harmed.
	●	We are highly dependent on our key personnel, including our President, Chief Executive Officer and Chairman. If we are not successful in attracting, motivating and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.

	●	Unfavorable market and economic conditions may have serious adverse consequences on our business, financial condition, results of operations, stock price and prospects.
	●	Public health crises such as pandemics could materially and adversely affect our preclinical studies and clinical trials, business, financial condition and results of operations.
	●	The market price of our common stock has been extremely volatile and may continue to be volatile due to numerous circumstances beyond our control, which could result in substantial losses for our stockholders.

●	advance the Phase 3 registration clinical trial for our lead product candidate, Olvi-Vec, in platinum resistant/refractory ovarian cancer (“PRROC”);

●	initiate planned and future clinical trials of Olvi-Vec in other cancer indications;

●	discover and develop new product candidates, and conduct research and development activities, preclinical studies and clinical trials;

●	manufacture preclinical, clinical and commercial supplies of our product candidates;

●	broaden and strengthen our internal manufacturing capabilities, including the expansion and upgrade of our in-house manufacturing facility;

●	seek regulatory approvals for any product candidates that successfully complete clinical trials;

●	maintain, expand and protect our intellectual property portfolio;

●	hire additional research and development, clinical, scientific and management personnel;

●	add operational, financial and management information systems and personnel;

●	establish a sales, marketing and distribution infrastructure to commercialize any product candidate for which we may obtain regulatory approval and we commercialize on our own or in collaboration with others; and

●	incur additional legal, accounting and other expenses operating as a public company.

●	the scope, progress, results and costs of researching and developing Olvi-Vec and our other product candidates and programs, and of conducting preclinical studies and clinical trials;

●	the timing of, and the costs involved in, obtaining marketing approvals for Olvi-Vec and future product candidates we develop if clinical trials are successful;

●	the success of any future collaborations;

●	the cost of commercialization activities for any approved product, including marketing, sales and distribution costs;

●	the cost and timing of establishing, equipping, and operating our current and planned manufacturing activities;

●	the cost of manufacturing Olvi-Vec and future product candidates for clinical trials in preparation for marketing approval and commercialization;

●	our ability to establish and maintain strategic licensing or other arrangements and the financial terms of such agreements;

●	the cost, timing and outcome of seeking U.S. Food and Drug Administration (“FDA”) and any other regulatory approvals for any future product candidates;

●	the costs involved in preparing, filing, prosecuting, maintaining, expanding, defending and enforcing patent claims, including litigation costs and the outcome of such litigation;

●	our ability to establish and maintain healthcare coverage and adequate reimbursement for our future products, if any;

●	the timing, receipt, and amount of sales of, or royalties on, our future products, if any;

●	the emergence of competing cancer therapies and other adverse market developments;

●	our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of our product candidates;

●	the costs associated with being a public company;

●	our need and ability to retain key management and hire scientific, technical, medical and business personnel;

●	the costs associated with expanding our facilities or building out our laboratory space; and

●	the impact of geopolitical and macroeconomic events, including future bank failures, increased geopolitical tensions between the United States and China, the Russia/Ukraine conflict, the conflicts in the Middle East and global pandemics on U.S. and global economic conditions.

●	obtaining marketing approvals for any product candidates for which we complete clinical trials;

●	obtaining regulatory approval to use and sell products generated by our existing or future manufacturing processes for Olvi-Vec and future product candidates, including at our existing manufacturing facility and/or by establishing and maintaining supply and manufacturing relationships with third parties;

●	launching and commercializing product candidates for which we obtain marketing approvals, either directly by establishing a sales force and marketing, medical affairs and distribution infrastructure or, alternatively, with a collaborator or distributor;

●	establishing and maintaining healthcare coverage and adequate reimbursement for our future products, if any;

●	obtaining market acceptance of product candidates that we develop as viable treatment options;

●	addressing any competing technological and market developments;

●	identifying, assessing, acquiring and developing new product candidates;

●	negotiating favorable terms in any collaboration, licensing, or other arrangements into which we may enter and performing our obligations in such collaborations;

●	maintaining, protecting, and expanding our portfolio of intellectual property rights, including patents, trade secrets, and know-how; and

●	attracting, hiring, and retaining qualified personnel.

●	sufficiency of our financial and other resources to complete the necessary preclinical studies and clinical trials;

●	acceptance of INDs or IND amendments for our planned clinical trials or future clinical trials;

●	successful enrollment and completion of clinical trials;

●	successful data from our clinical trials that support FDA conclusion of an acceptable risk-benefit profile of our product candidates in the intended populations;

●	receipt of regulatory and marketing approvals from applicable regulatory authorities;

●	obtaining regulatory approval to use our existing or future manufacturing processes for the clinical and commercial manufacture of our product candidates at our existing or future manufacturing facilities or at the facilities of one or more third-party manufacturers with whom we would need to establish supply arrangements;

●	successfully launching commercial sales of our product candidates, if and when approved, whether alone or in collaboration with others;

●	acceptance of any products we develop and their benefits and uses, if and when approved, by patients, the medical community and third-party payors;

●	effectively competing with other therapies;

●	obtaining and maintaining healthcare coverage and adequate reimbursement from third-party payors; and

●	maintaining a continued acceptable safety profile of the products following approval.

●	inability to generate sufficient preclinical or other in vivo or in vitro data to support the initiation of clinical trials;

●	unexpected toxicities observed in preclinical IND-enabling studies precluding the identification of a safe dose to move forward in human clinical trials;

●	delays in obtaining regulatory approval for, and production or manufacturing of, clinical supply;

●	delays in reaching a consensus with regulatory agencies on study or trial design; and

●	regulatory authorities not allowing us to rely on previous findings of safety and efficacy for other similar but approved products and published scientific literature.