GridAI Technologies Corp 10-Q for FY2024 Q3

GridAI Technologies Corp. (GRDX)

10-Q 2024-11-13 For: 2024-09-30

Added on April 11, 2026

About this 10-Q

GridAI Technologies Corp filed this 10-Q on November 13, 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: $2.58M; compared with a net loss of $3.43M a year earlier
Diluted EPS: -$0.59; compared with -$9.21 a year earlier

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777 Yamato Road, Suite 502
Boca Raton, Florida		33431
(Address of principal executive offices)		(Zip Code)


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common stock, par value $0.0001 per share	ENTO	The Nasdaq Capital Market


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


		Page

PART I. FINANCIAL INFORMATION

Item 1.	Unaudited Condensed Consolidated Financial Statements	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39

Item 4.	Controls and Procedures	39

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	40

Item 1A.	Risk Factors	40

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41

Item 3.	Defaults Upon Senior Securities	41

Item 4.	Mine Safety Disclosures	42

Item 5.	Other Information	42

Item 6.	Exhibits	42

SIGNATURES


	September 30,
	2024		December 31,
	(unaudited)		2023
ASSETS

Current Assets:
Cash and cash equivalents	$	366,788	$	3,711,770
Prepaid expenses		305,461		1,244,466
Assets of disposal group held for sale		83,170,009		—
Total Current Assets		83,842,258		4,956,236

Property, equipment, and leasehold improvements, net		—		14,565

Other Assets:
Restricted cash		21,520		21,522
Goodwill		1,684,182		1,684,182
Operating lease right-of-use assets		144,410		195,440
Deposits		128,250		11,250
Total Other Assets		1,978,362		1,912,394
Total Assets	$	85,820,620	$	6,883,195

LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS’ EQUITY

Current Liabilities:
Accounts payable	$	2,214,946	$	554,277
Accrued expenses		219,193		825,290
Accrued dividend payable		1,258,450		1,069,616
Note payable		—		612,784
Operating lease liabilities		79,454		67,111
Other current liabilities		—		4,239
Liabilities of disposal group held for sale		11,918,261		—
Total Current Liabilities		15,690,304		3,133,317
Non-current operating lease liabilities		80,213		146,949
Total Liabilities		15,770,517		3,280,266

Mezzanine Equity:
Series G redeemable preferred stock- Par value $0.0001 per share; 13,000 shares designated; 12,373.226 and 0 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively		61,681,100		—
Total Mezzanine Equity		61,681,100		—

Stockholders’ Equity:
Common stock - Par value $0.0001 per share; 100,000,000 shares authorized; 4,741,964 and 1,560,998 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively		474		156
Series B preferred stock- Par value $0.0001 per share; 5,194.81 shares authorized; 484.52 and 514.96 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively		—		—
Series C preferred stock- Par value $0.0001 per share; 75,000 shares authorized; 0 shares issued and outstanding at September 30, 2024 and December 31, 2023		—		—
Series D preferred stock- Par value $0.0001 per share; 150 shares designated; 0 shares issued and outstanding at September 30, 2024 and December 31, 2023		—		—
Series E preferred stock- Par value $0.0001 per share; 150 shares designated; 0 shares issued and outstanding at September 30, 2024 and December 31, 2023		—		—
Series F preferred stock- Par value $0.0001 per share; 7,000 shares designated; 0 shares issued and outstanding at September 30, 2024 and December 31, 2023		—		—
Additional paid-in capital		198,518,268		187,931,445
Accumulated deficit		(190,149,739)		(184,328,672)
Total Stockholders’ Equity		8,369,003		3,602,929
Total Liabilities, Mezzanine Equity and Stockholders’ Equity	$	85,820,620	$	6,883,195


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


☐	TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Operating expenses:
Research and development expenses	$	206,999	$	1,011,055	$	882,522	$	3,725,833
General and administrative expenses		1,685,608		2,422,082		13,535,241		7,951,373
Total operating expenses		1,892,607		3,433,137		14,417,763		11,677,206

Loss from operations		(1,892,607)		(3,433,137)		(14,417,763)		(11,677,206)

Other expenses:
Interest income (expense), net		229		(1,021)		675		(13,108)
Other expense, net		(2,874)		—		(7,859)		(3,729)
Total other expenses		(2,645)		(1,021)		(7,184)		(16,837)

Loss before income tax benefit	$	(1,895,252)	$	(3,434,158)	$	(14,424,947)	$	(11,694,043)

Income tax benefit		—		—		10,604,640		—
Net loss from continuing operations	$	(1,895,252)	$	(3,434,158)	$	(3,820,307)	$	(11,694,043)

Loss from discontinued operations		(685,719)		—		(2,000,760)		—
Net loss	$	(2,580,971)	$	(3,434,158)	$	(5,821,067)	$	(11,694,043)

Preferred stock dividends		(84,632)		(49,292)		(150,776)		(231,047)
Net loss applicable to common shareholders	$	(2,665,603)	$	(3,483,450)	$	(5,971,843)	$	(11,925,090)

Weighted average shares outstanding, basic and diluted		4,552,019		378,301		3,005,055		188,175
Loss per share, basic and diluted	$	(0.59)	$	(9.21)	$	(1.99)	$	(63.37)
Loss per share from discontinued operations, basic and diluted	$	(0.15)	$	—	$	(0.67)	$	—


	Series G Convertible			Series B Convertible						Additional				Total
	Preferred Stock			Preferred Stock			Common Stock			Paid In		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Deficit		Equity
Balance, July 1, 2024	12,373	$	61,681,100	485	$	—	2,941,108	$	294	$	196,689,069	$	(187,568,768)	$	9,120,595
Issuance of common stock in connection with the exercise of warrants in the July 2024 Inducement Offering, net of offering costs	—		—	—		—	1,762,674		176		1,730,189		—		1,730,365
Deemed dividend of Series B preferred stock	—		—	—		—	—		—		(84,632)		—		(84,632)
Issuance of common stock from RSU vest	—		—	—		—	38,182		4		(4)		—		—
Stock-based compensation	—		—	—		—	—		—		183,646		—		183,646
Net loss	—		—	—		—	—		—		—		(2,580,971)		(2,580,971)
Balance, September 30, 2024	12,373	$	61,681,100	485	$	—	4,741,964	$	474	$	198,518,268	$	(190,149,739)	$	8,369,003


	Amount
Common stock issued to ImmunogenX stockholders	$	240,500
Replacement options		1,271,000
Replacement warrants		789,000
Preferred stock issued to ImmunogenX stockholders		57,790,474
Total consideration paid	$	60,090,974


Assets acquired:
Cash and cash equivalents	$	88,169
Prepaid expenses and other current assets		3,131,929
Property and equipment, net		18,963
Intangibles		63,370,000
Operating lease right-of-use assets		4,232
Total assets	$	66,613,293
Liabilities assumed:
Accounts payable		916,209
Accrued expenses and other current liabilities		2,131,439
Long term debt		6,397,889
Deferred tax liability		13,760,280
Total liabilities	$	23,205,817
Goodwill recorded:
Goodwill	$	16,683,498
Net assets acquired	$	60,090,974


	Estimated	Acquisition Date
Intangible Asset	Useful Life	Fair Value
Patents	2 years	$	140,000
Trade names and trademarks	6 years		230,000
IPR&D – Latiglutenase	Indefinite		54,000,000
IPR&D - CypCel	Indefinite	$	9,000,000


	Three Months		Nine Months
	Ended September 30, 2024		Ended September 30, 2024
Operating expenses	$	1,892,607	$	14,417,763
Loss before income tax benefit		(1,895,252)		(14,424,947)
Loss from discontinued operations		(685,719)		(9,374,674)
Net loss applicable to common shareholders		(2,665,603)		(13,345,757)

Basic and diluted weighted average shares outstanding		4,552,019		3,005,055
Loss per share - basic and diluted	$	(0.59)	$	(4.44)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Operating expenses:
Research and development expenses	$	301,661	$	—	$	1,225,533	$	—
General and administrative expenses		76,971		—		152,187		—
Total operating expenses		378,632		—		1,377,720		—
Interest expense		(305,614)		—		(670,296)		—
Other (expense) income		(1,473)		—		47,256		—
Loss from discontinued operations	$	(685,719)	$	—	$	(2,000,760)	$	—


Assets held for sale:
Prepaid expenses and other current assets	$	3,131,929
Property and equipment, net		16,180
Goodwill and intangible assets		80,021,900
Total assets held for sale	$	83,170,009
Liabilities held for sale:
Accounts payable	$	156,086
Accrued expenses and other current liabilities		2,202,798
Debt		6,403,737
Deferred tax liability		3,155,640
Total liabilities held for sale	$	11,918,261


			Fair Value Measured at Reporting Date
			Using
	Carrying
	Amount		Level 1		Level 2		Level 3		Fair Value
September 30, 2024 (unaudited):
Money market funds	$	12,573	$	12,573	$	—	$	—	$	12,573

December 31, 2023:
Money market funds	$	12,131	$	12,131	$	—	$	—	$	12,131
Note payable		612,784		—		612,784	$	—		612,784


	Goodwill
Balance on January 1, 2023	$	1,684,182
Balance on December 31, 2023		1,684,182
Goodwill associated with IMGX acquisition		16,683,498
Goodwill reclassified as held for sale	$	(16,683,498)
Balance on September 30, 2024 (unaudited)	$	1,684,182


		Weighted		Weighted
		Average		Average
	Number of	Exercise Price		Remaining
	Warrants	Per Share		Term in Years
Outstanding and exercisable on January 1, 2024	1,779,780	$	19.29	4.99
Issued	5,226,498		1.87	4.85
Assumed from IMGX	127,680		3.48	8.47
Expired	(3)		52,500.00	—
Exercised	(2,206,199)		3.99	8.58
Warrants outstanding and exercisable on September 30, 2024	4,927,756	$	7.21	4.96

Warrants outstanding and exercisable on January 1, 2023	108,797	$	383.20	5.50
Issued	1,369,940		14.60	4.59
Expired	(4)		15,475.80	—
Exercised	(580,293)		19.20	4.72
Warrants outstanding and exercisable on September 30, 2023	898,440	$	47.60	4.89


		Average		Remaining
	Number	Exercise		Contract	Intrinsic
	of Shares	Price		Life (Years)	Value
Outstanding at January 1, 2024	426	$	6,103.81	8.53	$	—
Assumed from ImmunogenX	200,652		0.81	7.05		—
Expired	(15)		18,720.80	—		—
Outstanding at September 30, 2024	201,063	$	12.01	7.05	$	—
Exercisable at September 30, 2024	201,052	$	11.74	7.05	$	—

Outstanding at January 1, 2023	176	$	15,956.72	8.22	$	—
Granted	250		74.60	9.40		—
Outstanding at September 30, 2023	426	$	7,946.60	8.68	$	—
Exercisable at September 30, 2023	331	$	9,284.40	8.62	$	—


	2024		2023
Contractual term (in years)	7.6		6.5
Expected Volatility	110.35	%	98.80	%
Risk-free interest rate	4.20	%	4.08	%
Expected Dividend yield	0	%	0	%


		Weighted-Average		Weighted-Average
	Number	Grant Date		Remaining Recognition
	of Shares	Fair Value		Period (Years)
Non-vested Outstanding at January 1, 2024	52,271	$	4.31	9.96
Awarded	150,421		3.57	—
Vested	(133,401)		3.91	—
Cancelled	(52,225)		3.32	—
Non-vested Outstanding at September 30, 2024	17,066	$	3.86	0.85

Non-vested Outstanding at January 1, 2023	—		—	—
Awarded	8,012	$	124.00	—
Vested	(5,680)		124.00	—
Canceled	(508)		124.00	—
Non-vested Outstanding at September 30, 2023	1,824	$	124.00	0.25


	September 30,
	2024
Lease term and discount rate
Weighted-average remaining lease term (years)	1.9
Weighted-average discount rate	7.00	%


2024 (remainder of year)	$	21,815
2025		88,788
2026		60,593
Total lease payments		171,196
Less imputed interest		(11,529)
Present value of lease liabilities	$	159,667


			Related				Directors
			party				and Officer’s
	Revolving		promissory				Liability
	line of credit		notes		EIDL loan		Insurance		Total
Principal balance as of January 1, 2024	$	—	$	—	$	—	$	612,784	$	612,784
Additions		5,359,860		1,000,000		500,000		31,798		6,891,658
Payments		—		—		—		(644,582)		(644,582)
Debt discount		—		—		(456,123)		—		(456,123)
Reclassification to liabilities held for sale		(5,359,860)		(1,000,000)		(43,877)		—		(6,403,737)
Total debt as of September 30, 2024	$	—	$	—	$	—	$	—	$	—


	September 30, 2024	September 30, 2023
	(unaudited)	(unaudited)
Series G convertible preferred stock	12,373,226	—
Common stock warrants	4,927,756	898,440
Stock options	201,063	426
RSUs not yet issued	17,066	1,824
Series B convertible preferred stock (1)	135	154
Restricted stock not yet issued	4	8
Total shares of common stock issuable	17,519,250	900,852


	Three Months Ended
	September 30,				Increase
	2024		2023		(Decrease)
Operating expenses:
Research and development expenses	$	206,999	$	1,011,055	$	(804,056)
General and administrative expenses		1,685,608		2,422,082		(736,474)
Total operating expenses		1,892,607		3,433,137		(1,540,530)
Other expenses		2,645		1,021		1,624
Loss from continuing operations	$	(1,895,252)	$	(3,434,158)	$	(1,538,906)
Loss from discontinued operations		(685,719)		—		685,719
Net loss	$	(2,580,971)	$	(3,434,158)	$	(853,187)

Exhibit No.		Description
3.1		Amended and Restated Certificate of Incorporation of the Registrant, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on October 21, 2024).
3.2		Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 of the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 15, 2022).
4.1		Form of Inducement Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 11, 2024).
10.1		Form of Inducement Letter (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 11, 2024).
10.2†		Consulting Agreement, dated August 2, 2024, by and between the Company and James Sapirstein (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 7, 2024).
31.1*		Certification of the Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of the Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of the Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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 and included in Exhibit 101)

	ENTERO THERAPEUTICS, INC.

	By	/s/ James Sapirstein
		James Sapirstein
		Chief Executive Officer and Chairman
		(Principal Executive Officer)

	By	/s/ Sarah Romano
		Sarah Romano
		Chief Financial Officer
Date: November 13, 2024		(Principal Financial and Accounting Officer)

Date: November 13, 2024	/s/ James Sapirstein
	James Sapirstein
	Chief Executive Officer
	(Principal Executive Officer)

Date: November 13, 2024	/s/ Sarah Romano
	Sarah Romano
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

Date: November 13, 2024	/s/ James Sapirstein
	James Sapirstein
	Chief Executive Officer
	(Principal Executive Officer)

	/s/ Sarah Romano
	Sarah Romano
	Chief Financial Officer
	(Principal Financial and Accounting Officer)