Lunai Bioworks Inc 10-Q for FY2025 Q2
Lunai Bioworks Inc. (LNAI)
About this 10-Q
Lunai Bioworks Inc filed this 10-Q on February 19, 2025, covering the quarter ended December 31, 2024 (FY2025 Q2).
Headline figures
Quarter ended December 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $7.25M
- compared with a net loss of $4.53M a year earlier
- Diluted EPS
- -$0.04
- compared with -$0.07 a year earlier
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
OR
For the transition period from ________ to ________
Commission file number
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification Number) | |
| (Address of principal executive offices) | (Zip Code) |
+1(
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||
| The |
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, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| 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 new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
As of February 12, 2025, the number of shares of the registrant’s Common Stock outstanding was .
RENOVARO INC. AND SUBSIDIARIES
- INDEX -
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions for Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.
In the opinion of management, the financial statements contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.
The results for the period ended December 31, 2024, are not necessarily indicative of the results of operations for the full year. These financial statements and related footnotes should be read in conjunction with the financial statements and footnotes thereto included in the Company’s Form 10-K for the fiscal year ended June 30, 2024, filed with the Securities and Exchange Commission on October 10, 2024.
1
RENOVARO INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| December 31, | June 30, | |||||||
| 2024 | 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | $ | ||||||
| Insurance receivable | ||||||||
| Prepaids and other assets | ||||||||
| Total Current Assets | ||||||||
| Property and equipment, net | ||||||||
| OTHER ASSETS: | ||||||||
| Definite life intangible assets, net | ||||||||
| Goodwill | ||||||||
| Deposits and other assets | ||||||||
| Operating lease right-of-use assets | ||||||||
| Total Other Assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable – trade | $ | $ | ||||||
| Accrued expenses | ||||||||
| Other current liabilities | ||||||||
| Contingent consideration liability | ||||||||
| Convertible notes payable | ||||||||
| Current portion of operating lease liabilities | ||||||||
| Notes payable – related parties, net | ||||||||
| Total Current Liabilities | ||||||||
| NON-CURRENT LIABILITIES: | ||||||||
| Operating lease liabilities, net of current portion | ||||||||
| Total Non-Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (Note 7) | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
| Preferred stock, $ par value; shares authorized; shares issued and outstanding | ||||||||
| Common Stock, par value $, shares authorized, shares issued and outstanding at December 31, 2024, and shares issued and outstanding at June 30, 2024 | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income (loss) | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
2
RENOVARO INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Operating Expenses | ||||||||||||||||
| General and administrative | $ | $ | $ | $ | ||||||||||||
| Research and development | ||||||||||||||||
| Goodwill impairment | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Income (Expenses) | ||||||||||||||||
| Change in fair value of contingent consideration | ( | ) | ||||||||||||||
| Loss on extinguishment of debt | ( | ) | ||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest and other income | ( | ) | ||||||||||||||
| Total Other Income (Expense) | ( | ) | ( | ) | ( | ) | ||||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| BASIC AND DILUTED LOSS PER SHARE | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING - BASIC AND DILUTED | ||||||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
3
RENOVARO INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other Comprehensive Income (Loss) | ||||||||||||||||
| Foreign Currency Translation, net of taxes | ( | ) | ( | ) | ||||||||||||
| Comprehensive Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
See accompanying notes to the unaudited condensed consolidated financial statements.
4
RENOVARO INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
| # of Series A Preferred Shares | Series A Preferred Shares Amount | # of Common Shares | Common Shares Amount | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total | |||||||||||||||||||||||||
| June 30, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||
| Issuance of preferred stock and warrants in private placement | — | |||||||||||||||||||||||||||||||
| Issuance of preferred stock and warrants for conversion of $2 million Note | — | |||||||||||||||||||||||||||||||
| Restricted shares issued for services rendered | — | |||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | ||||||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| September 30, 2023 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Stock issued pursuant to warrants exercised | — | |||||||||||||||||||||||||||||||
| Restricted shares issued for advisory services | — | ( | ) | |||||||||||||||||||||||||||||
| Stock-based compensation | — | — | ||||||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | ||||||||||||||||||||||||||||||
| December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
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| # of Series A Preferred Shares | Series A Preferred Shares Amount | # of Shares | Common Shares | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total | |||||||||||||||||||||||||
| June 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
| Issuance of common stock under private placement offering | — | |||||||||||||||||||||||||||||||
| Restricted shares issued for services rendered | — | |||||||||||||||||||||||||||||||
| Forfeited shares of common stock | — | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Stock-based compensation | — | — | ||||||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | ||||||||||||||||||||||||||||||
| September 30, 2024 | ( | ) | ||||||||||||||||||||||||||||||
| Issuance of common stock under private placement offering | — | |||||||||||||||||||||||||||||||
| Restricted shares issued for services rendered | — | |||||||||||||||||||||||||||||||
| Restricted shares issued for executive compensation | — | |||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | ||||||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
6
RENOVARO INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the Six Months Ended | ||||||||
| December 31, | ||||||||
| 2024 | 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES: | ||||||||
| Depreciation and amortization | ||||||||
| Loss on extinguishment of debt | ||||||||
| Changed in value of contingent consideration | ( | ) | ||||||
| Stock-based compensation expense | ||||||||
| Restricted shares for services rendered (including $137,000 of compensation expense) | ||||||||
| Goodwill impairment | ||||||||
| Amortization of discount of notes payable | ||||||||
| Changes in assets and liabilities: | ||||||||
| Other receivables | ||||||||
| Prepaid expenses/deposits | ||||||||
| Accounts payable | ||||||||
| Accrued expenses | ( | ) | ||||||
| Other current liabilities | ( | ) | ||||||
| Operating leases, net | ( | ) | ( | ) | ||||
| NET CASH USED IN OPERATING ACTIVITIES | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Notes receivable | ( | ) | ||||||
| Purchase of property and equipment | ( | |||||||
| NET CASH USED IN INVESTING ACTIVITIES | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from issuance of promissory notes | ||||||||
| Repayment of finance agreement | ( | ) | ( | ) | ||||
| Proceeds from private placement | ||||||||
| Proceeds from notes payable | ||||||||
| Proceeds from exercise of warrants | ||||||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | ||||||||
| Effect of exchange rates on cash | ( | ) | ||||||
| NET CHANGE IN CASH | ( | ) | ||||||
| CASH, BEGINNING OF PERIOD | ||||||||
| CASH, END OF PERIOD | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITIES | ||||||||
| Finance agreement entered into in exchange for prepaid assets | $ | $ | ||||||
| Conversion of note payable for issuance of preferred stock | $ | $ | ||||||
| Debt discount related to convertible promissory notes | $ | $ | ||||||
| Debt discount related to notes payable | $ | $ | ||||||
| Cancellation of restricted stock awards | $ | $ | ||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
7
RENOVARO INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business – On February 13, 2024, the Company changed its corporate name from Renovaro Biosciences Inc. to Renovaro Inc. (“Renovaro”, and together with its subsidiaries, the “Company”, “we” or “us”). Renovaro Inc. operates through two subsidiaries, Renovaro Biosciences and Renovaro Cube. Renovaro Cube refers to Renovaro Cube Intl Ltd. (formerly known as GediCube Intl. Ltd.) and its wholly owned subsidiaries GediCube, B.V. and Grace Systems B.V., which were acquired on February 13, 2024.
Renovaro Biosciences is a biotechnology company intending to develop advanced allogeneic cell and gene therapies to promote stronger immune system responses potentially for long-term or life-long cancer remission in some of the deadliest cancers, and potentially to treat or cure serious infectious diseases such as Human Immunodeficiency Virus (HIV) infections. Renovaro Cube is an AI-driven healthcare technology company focusing on the earliest possible detection of cancer and its recurrence. Renovaro Cube has developed a proprietary AI platform that analyzes genetics using Explainable AI to provide earlier and more accurate cancer diagnosis.
Basis of Presentation – The Company prepares consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and follows the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The accompanying financial statements are unaudited. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at December 31, 2024, and 2023 and for the periods then ended have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s June 30, 2024 audited financial statements. The results of operations for the period ended December 31, 2024 are not necessarily indicative of the operating results for the full year.
Consolidation – For the three and six months ended December 31, 2024, and 2023, the condensed consolidated financial statements include the accounts and operations of the Company and its subsidiaries. All material inter-company transactions and accounts have been eliminated in the consolidation.
Accounting Estimates – The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimated. Significant estimates include the fair value of assets acquired in a business acquisition, contingent consideration, and equity instruments issued for goods or services.
8
Functional Currency & Foreign Currency Translation – The functional currency of Renovaro Biosciences Denmark ApS is the Danish Kroner (“DKK”) and the functional currency of Renovaro Cube is the Euro (“EUR”). The Company’s reporting currency is the U.S. Dollar for the purpose of these financial statements. The Company’s balance sheet accounts are translated into U.S. dollars at the period-end exchange rates and all revenue and expenses are translated into U.S. dollars at the average exchange rates prevailing during the periods ended December 31, 2024, and 2023. Translation gains and losses are deferred and accumulated as a component of other comprehensive income in stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are included in the statement of operations as incurred.
Recently Adopted Accounting Pronouncements – In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about reportable segment’s profit or loss and assets that are currently required annually. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted this ASU on July 1, 2024. The adoption of this ASU had no impact on the Company’s condensed consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which enhances the transparency and decision usefulness of income tax disclosures by requiring; (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2025, with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted. The Company is currently evaluating the impact this standard will have on its condensed consolidated financial statements.
The Company currently believes there are no other issued and not yet effective accounting standards that are materially relevant to our condensed consolidated financial statements.
NOTE 2 — GOING CONCERN
The Company’s consolidated
financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates
the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has incurred substantial
recurring losses from continuing operations, has used cash in the Company’s continuing operations, and is dependent on additional
financing to fund operations. The Company incurred a net loss of $
Management has reduced overhead and administrative costs by streamlining the organization to focus around the development and validation of its AI-driven cancer diagnostics platform. The Company has tailored its workforce to focus on these activities. In addition, the Company intends to secure additional required funding through equity or debt financing. However, there can be no assurance that the Company will be able to obtain any sources of funding. Such additional funding may not be available or may not be available on reasonable terms, and, in the case of equity financing transactions, could result in significant additional dilution to our stockholders. If we do not obtain required additional equity or debt funding, our cash resources will be depleted and we could be required to materially reduce or suspend operations, which would likely have a material adverse effect on our business, stock price and our relationships with third parties with whom we have business relationships, at least until additional funding is obtained. If we do not have sufficient funds to continue operations, we could be required to seek bankruptcy protection or other alternatives that could result in our stockholders losing some or all of their investment in us.
9
Funding that we may receive during the fiscal year 2025 is expected to be used to satisfy existing and future obligations and liabilities and working capital needs, to support commercialization of our products, to conduct the clinical and regulatory work to develop our product candidates, and to begin building working capital reserves.
NOTE 3 — FAIR VALUE MEASUREMENTS
The Company accounts for fair value measurements for financial assets and financial liabilities in accordance with FASB ASC Topic 820, “Fair Value Measurements”. The authoritative guidance among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exit price, representing the amount that would either be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
| ● | Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities; |
| ● | Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and |
| ● | Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. |
There were no Level 1, 2 or 3 assets, nor any Level 1 or 2 liabilities as of December 31, 2024.
Unless otherwise disclosed, the fair value of the Company’s financial instruments including cash, accounts receivable, prepaid expenses, accounts payable, accrued expenses, lease obligations and notes payable approximate their recorded values due to their short-term maturities.
Level 3 liabilities held as of December 31, 2024, consisted of a contingent consideration liability related to the February 13, 2024 acquisition of Renovaro Cube, (the “Acquisition”). As consideration for the Acquisition, the stockholders of Renovaro Cube received (i) 70,834,183 shares of Common Stock, and (ii) the right to receive up to 11,899,545 contingent shares pro rata upon the exercise of convertible notes, options, and warrants, which were outstanding at closing. The contingent consideration liability was recorded at fair value of $20,557,500 at the time of the Acquisition and is subsequently remeasured to fair value at the end of each reporting period. As of December 31, 2024, there were 7,613,301 contingent shares issuable in connection with the Acquisition.
The fair value of the contingent consideration liability is estimated using a Black-Scholes option-pricing model and a Monte-Carlo option pricing model. The key inputs to the model are all contractual or observable with the exception being volatility, which is computed based on the volatility of the Company’s underlying stock. The key inputs to valuing the contingent consideration liability as of December 31, 2024, were:
| Schedule of contingent consideration liability | ||||
| Stock Price | $ | |||
| Exercise Price | $ - $ | |||
| Volatility | % - % | |||
| Risk Free Rate | % - % | |||
| Expected Dividends | % | |||
| Expected Term (years) | – |
The following table sets forth the Level 3 liability at December 31, 2024, which is recorded on the consolidated balance sheet at fair value on a recurring basis. As required, this liability is classified based on the lowest level of input that is significant to the fair value measurement:
10
| Schedule of fair value measurement on recurring basis | ||||||||||||
| Fair Value Measurements at Reporting Date Using | ||||||||||||
| Quoted Prices in Active Markets for Identical Assets Inputs |
Significant Other Observable Inputs |
Significant Other Unobservable Inputs | ||||||||||
| (Level 1) | (Level 2) | (Level 3) | ||||||||||
| The roll forward of the contingent consideration liability is as follows: | ||||||||||||
| Balance June 30, 2024 | $ | |||||||||||
| Fair value adjustment | ( |
) | ||||||||||
| Contingent Consideration Liability at December 31, 2024 | $ | |||||||||||
NOTE 4 — INTANGIBLE ASSETS AND GOODWILL
On February 13, 2024, the Company
acquired Renovaro Cube as a wholly owned subsidiary pursuant to a stock purchase agreement. As part of the acquisition of Renovaro
Cube, the Company acquired goodwill valued at $
Impairment – During the six months ended December
31, 2024, the results of the assessment indicated that the carrying value of the RENC reporting unit exceeded its fair value, due to the
decline in the estimated fair value of the reporting unit based on the Company’s market capitalization. Management concluded the
significant driver for the change in the economic benefits was due to the Company’s continued inability to raise capital for the
further development of the technologies within this reporting unit. Therefore, an impairment adjustment of $
At December 31, 2024 and June 30, 2024, definite-life and indefinite-life intangible assets consisted of the following:
| Schedule of definite-life and indefinite-life intangible assets | ||||||||||||||||||||||||||
| Useful Life | June 30, 2024 | Additions | Amortization | Impairment | Translation Adjustment | December 31, 2024 | ||||||||||||||||||||
| Definite Life Intangible Assets | ||||||||||||||||||||||||||
| Patents | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||
| Less Accumulated Amortization | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| Net Definite-Life Intangible Assets | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||
| Goodwill | ||||||||||||||||||||||||||
| Goodwill | ( | ) | ( | ) | ||||||||||||||||||||||
| Total Goodwill | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
11
Expected future amortization expense is as follows:
| Schedule of expected future amortization expense | ||||||
| Years ended June 30, | ||||||
| 2025 | $ | |||||
| 2026 | ||||||
| 2027 | ||||||
| 2028 | ||||||
| Total | $ | |||||
NOTE 5 — DEBT
Convertible Notes Payable —
The January 2024 Note —
On January 12, 2024, the Company entered into Subscription Agreements with an investor to issue a Convertible Promissory Note for an aggregate
principal amount of $
December 2023 Notes —
On December 20, 2023, the Company entered into Subscription Agreements to purchase Convertible Promissory Notes for an aggregate
principal amount of $
The January 2024 Note and December
2023 Notes balance at December 31, 2024 was $
Notes Payable —
Bridge Loans — From
October 21, 2024 to December 30, 2024, the Company entered into agreements with Paseco ApS, a Danish entity controlled by a shareholder
(“Paseco ApS”), to issue Promissory Notes for the principal amount of $
From November 12, 2024 to December
3, 2024, Renovaro Cube entered into an agreement with Paseco ApS, a Danish entity controlled by a shareholder (“Paseco ApS”),
to issue Promissory Notes for the principal amount of €
On November 1 2024, Renovaro Cube
entered into an agreement with Yalla Yalla Limited, an investor to issue a Promissory Note for the amount of approximately €
On September 16, 2024, the Company
entered into an agreement with RS Bio ApS, a Danish entity controlled by a shareholder (“RS Bio”), to issue a Promissory Note
for the principal amount of $
12
On September 6, 2024, Renovaro
Cube entered into an agreement with Paseco ApS, a Danish entity controlled by a shareholder (“Paseco ApS”), to issue a Promissory
Note for the principal amount of €
On February 5, 2024, the Company
entered into an agreement with RS Bio to issue a 5% Original Issue Discount Secured Promissory Note for the principal amount of $
On January 2, 2024, the Company
entered into an agreement with RS Bio to issue a 5% Original Issue Discount Secured Promissory Note for the principal amount of $
On November 3, 2023, the Company
entered into an agreement with RS Bio to issue a 5% Original Issue Discount Promissory Note for the principal amount of $
Promissory Note — On
March 30, 2020 (the “Issuance Date”), the Company issued a Promissory Note in the principal amount of $
The Company’s obligations under the Promissory Note, November 2023 Note, January 2024 Note, February 2024 Note and the September 2024 Note are secured by a Security Agreement. To secure the Company’s obligations under the Promissory Note, the Company entered into a Security Agreement with the Holder, pursuant to which the Company granted a lien on all assets of the Company (the “Collateral”) for the benefit of Paseco ApS. Upon an Event of Default (as defined in the notes, respectively) Paseco ApS may, among other things, collect or take possession of the Collateral, proceed with the foreclosure of the security interest in the Collateral or sell, lease, or dispose of the Collateral.
NOTE 6 — STOCKHOLDERS’ EQUITY
Purchase Agreement with Lincoln Park Capital
On June
20, 2023, the Company entered into a purchase agreement (the “2023 Purchase Agreement”) with Lincoln Park Capital Fund, LLC
(“Lincoln Park”), pursuant to which the Company may sell and issue to Lincoln Park, and Lincoln Park is obligated to purchase,
up to $
In consideration for entering into the 2023 Purchase Agreement, the Company issued shares of Common Stock to Lincoln Park as a commitment fee on June 20, 2023.
During the quarter ended December 31, 2024 and 2023, no shares of Common Stock to Lincoln Park were sold under the Purchase Agreement.
13
Common Stock Issuances
On June
14, 2024, Renovaro Inc., a Delaware corporation (the “Company”) closed a private placement of
On August 1, 2024, the Company
issued shares of Common Stock for consulting services valued at $
On October 14, 2024, the Company
issued shares of Common Stock to its Chief Executive Officer valued at $
On October 14, 2024, the Company
issued shares of Common Stock for consulting services valued at $
On October 17, 2024, the Company
issued shares of Common Stock for consulting services valued at $
Stock-based Compensation
The Company recognizes compensation costs for stock option awards to employees and directors based on their grant-date fair value. The value of each stock option is estimated on the date of grant using the Black-Scholes option-pricing model. The weighted-average assumptions used to estimate the fair values of the stock options granted using the Black-Scholes option-pricing model are as follows in the six months ended December 31, 2024:
| Schedule of weighted-average assumptions used to estimate the fair values of the stock options granted | ||||
| Renovaro Inc. | ||||
| Expected term (in years) | ||||
| Volatility | % - | % | ||
| Risk free interest rate | % - | % | ||
| Dividend yield | % | |||
On August 23, 2024, Avram Miller,
a former member of the Company’s board of directors (the “Board of Directors”), forfeited shares of Common Stock
from the original shares of Common Stock for advisory services originally granted to him on October 11, 2023. As consideration
for such forfeiture, the Company granted to Mr. Miller, an option to purchase shares of Common Stock of the Company with a per-share
exercise price of, $
On October 14, 2024, the Company issued stock options to its Chief Executive Officer. The options had a fair value of $, fully vest on January 1, 2027 and expire on .
On November 4, 2024, the Company issued stock options to its board of directors. The options had a fair value of $ on the grant date, fully vest on October 14, 2025 and expire on .
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On November 4, 2024, the Company issued stock options to its former interim Chief Financial Officer. The options had a fair value of $ on the grant date, fully vest on January 6, 2025 and expire on .
In total, the Company recognized stock-based compensation expense related to options of $ and $ for the three and six months ended December 31, 2024, respectively. The Company recognized stock-based compensation expense related to options of $ and $ for the three and six months ended December 31, 2023, respectively. At December 31, 2024, the Company had approximately $ of unrecognized compensation cost related to non-vested options.
NOTE 7 — COMMITMENTS AND CONTINGENCIES
Commitments
On January 31, 2020, the Company entered into a Statement of Work and License Agreement (the “HBV License Agreement”) by and among the Company, G Tech Bio, LLC, a California limited liability company (“G Tech”), and G Health Research Foundation, a not-for-profit entity organized under the laws of California doing business as Seraph Research Institute (“SRI”) (collectively the “Licensors”), whereby the Company acquired a perpetual, sublicensable, exclusive license (the “HBV License”) for a treatment under development (the “Treatment”) aimed to treat Hepatitis B Virus (HBV) infections.
The HBV License Agreement states
that in consideration for the HBV License, the Company shall provide cash funding for research costs and equipment and certain other in-kind
funding related to the Treatment over a 24-month period, and provides for an up-front payment of $
The cash funding for research costs pursuant to the HBV License Agreement consisted of monthly payments amounting to $144,500 that covered scientific staffing resources to complete the project as well as periodic payments for materials and equipment needed to complete the project. There were no payments made after January 31, 2022. The Company paid zero under the HBV License Agreement during the quarters ending December 31, 2024, and 2023. The Company has filed a claim against the Licensors, which includes certain payments it made related to this license (see Contingencies sub-section below).
On April 18, 2021, the Company entered into a Statement of Work and License Agreement (the “License Development Agreement”), by and among the Company, G Tech and SRI (collectively, the “Licensors”), whereby the Company acquired a perpetual sublicensable, exclusive license (the “Development License”) to research, develop, and commercialize certain formulations which were aimed at preventing and treating pan-coronavirus or the potential combination of the pan-coronavirus and pan-influenza, including the SARS-coronavirus that causes COVID-19 and pan-influenza (the “Prevention and Treatment”).
The Development License Agreement
was entered into pursuant to the existing Framework Agreement between the parties dated November 15, 2019. The Development License Agreement
states that in consideration for the Development License, the Company shall provide cash funding for research costs and equipment and
certain other in-kind funding related to the Prevention and Treatment over a 24-month period. Additionally, the Development License Agreement
provides for an up-front payment of $
15
The Development License Agreement provides for (i) cooperation related to the development of intellectual property related to the Prevention and Treatment and (ii) a 3% royalty to G Tech on any net sales that may occur under the Development License Agreement. The Company is no longer pursuing any product candidates that relate to this license. The Company has filed a claim against the Licensors to recover all monies it paid related to this license (see Contingencies below).
On August 25, 2021, the Company
entered into an ALC Patent License and Research Funding Agreement in the HIV Field (the “ALC License Agreement”) with Serhat
Gümrükcü and SRI (collectively, the “Licensors”) whereby the Licensors granted the Company an exclusive, worldwide,
perpetual, fully paid-up, royalty-free license, with the right to sublicense, proprietary technology subject to a U.S. patent application,
to make, use, offer to sell, sell or import products for use solely for the prevention, treatment, amelioration of or therapy exclusively
for HIV in humans, and research and development exclusively relating to HIV in humans; provided the Licensors retained the right to conduct
HIV research in the field. Pursuant to the ALC License Agreement, the Company granted a non-exclusive license back to the Licensors, under
any patents or other intellectual property owned or controlled by the Company, to the extent arising from the ALC License, to make, use,
offer to sell, sell or import products for use in the diagnosis, prevention, treatment, amelioration or therapy of any (i) HIV Comorbidities
and (ii) any other diseases or conditions outside the HIV Field. The Company made an initial payment to SRI of $
G Tech and SRI are controlled by Anderson Wittekind, a stockholder of the Company.
Service Agreements –The Company maintains employment agreements with certain senior staff in the ordinary course of business.
Contingencies
Securities Class Action Litigation. On July 26, 2022 and July 28, 2022, securities class action complaints (the former, the “Chow Action” and the latter, the “Manici Action”) and together, the “Securities Class Action Litigation”) were filed by purported stockholders of the Company in the United States District Court for the Central District of California against the Company and certain of the Company’s current and former officers and directors. The complaints allege, among other things, that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder, by making false and misleading statements and omissions of material fact in connection with the Company’s relationship with Serhat Gümrükcü and its commercial prospects. The complaints seek unspecified damages, interest, fees, and costs. On November 22, 2022, the Manici Action was voluntarily dismissed without prejudice, but the Chow action remains pending. On October 22, 2023, the Court appointed a lead plaintiff in the Chow Action. The lead plaintiff filed an amended complaint on December 15, 2023. The Company has filed a motion to dismiss the amended complaint on March 15, 2024. The Court denied the Company’s motion to dismiss on June 28, 2024. A mediation was held on September 17, 2024, after which the parties signed a stipulation of settlement, dated November 8, 2024. The plaintiff filed their motion for preliminary approval of the settlement on December 9, 2024. On December 18, 2024, the Company filed a notice of non-opposition to the motion for preliminary approval of the settlement. On January 7, 2025, the Court took the plaintiff’s motion for preliminary approval of the settlement under consideration without oral argument.
Federal Derivative Litigation. On September 22, 2022, Samuel E. Koenig filed a shareholder derivative action in the United States District Court for the Central District of California. On January 19, 2023, John Solak filed a substantially similar shareholder derivative action in the United States District Court for the District of Delaware. Both derivative actions recite similar underlying facts as those alleged in the Securities Class Action Litigation. The actions, filed on behalf of the Company, name Serhat Gümrükcü and certain of the Company’s former directors as defendants. The actions also name the Company as a nominal defendant. The actions allege violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 and also set out claims for breach of fiduciary duty, contribution and indemnification, aiding and abetting, and gross mismanagement. Plaintiffs do not quantify any alleged injury, but seek damages, disgorgement, restitution, and other costs and expenses. On January 24, 2023, the United States District Court for the Central District of California stayed the Koenig matter pending resolution of the defendants’ anticipated motion to dismiss in the Securities Class Action Litigation. On April 4, 2023, the United States District Court for the District of Delaware stayed the Solak matter pending resolution of the defendants’ anticipated motion to dismiss in the Securities Class Action Litigation. On June 28, 2024,
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the United States District Court for the Central District of California denied defendants’ motion to dismiss the Securities Class Action Litigation. On October 23, 2024, the court in the Koenig matter stayed the case pending further order of the court. On January 10, 2025, the parties in the Koenig matter filed a joint status report requesting that all pending deadlines in the matter remain suspended. The parties’ deadline to file a joint status report in the Koenig matter is April 11, 2025. On October 28, 2024, the court in the Solak matter stayed the case for ninety (90) days. On January 29, 2025, the court in the Solak matter stayed the case for an additional ninety (90) days. The defendants have not yet responded to either complaint. The Company intends to contest these matters but expresses no opinion as to the likelihood of favorable outcomes. Management is unable to determine the likelihood of a loss, including a possible range of losses, if any, arising from this matter as of the reporting date.
State Derivative Litigation. On October 20, 2022, Susan Midler filed a shareholder derivative action in the Superior Court of California, Los Angeles County, reciting similar underlying facts as those alleged in the Securities Class Action Litigation. The action, filed on behalf of the Company, names Serhat Gümrükcü and certain of the Company’s current and former directors as defendants. The action also names the Company as a nominal defendant. The action sets out claims for breaches of fiduciary duty, contribution and indemnification, aiding and abetting, and gross mismanagement. Plaintiff does not quantify any alleged injury, but seeks damages, disgorgement, restitution, and other costs and expenses. On January 20, 2023, the Court stayed the Midler matter pending resolution of the defendants’ anticipated motion to dismiss in the Securities Class Action Litigation. On June 28, 2024, the United States District Court for the Central District of California denied defendants’ motion to dismiss the Securities Class Action Litigation. On October 28, 2024, the court in the Midler matter stayed the case for ninety (90) days. On January 24, 2025, the court in the Midler matter stayed the case for an additional ninety (90) days. The parties’ deadline to file a joint status report in the Midler matter is April 28, 2025. The defendants have not yet responded to the complaint. The Company intends to contest this matter but expresses no opinion as to the likelihood of a favorable outcome. Management is unable to determine the likelihood of a loss, including a possible range of losses, if any, arising from this matter as of the reporting date.
On October 21, 2022, the Company filed a Complaint in the Superior Court of the State of California for the County of Los Angeles against Serhat Gümrükcü, William Anderson Wittekind (“Wittekind”), G Tech, SG & AW Holdings, LLC, and SRI (collectively, the “Defendants”). The Complaint alleges that the Defendants engaged in a “concerted, deliberate scheme to alter, falsify, and misrepresent to the Company the results of multiple studies supporting its Hepatitis B and SARS-CoV-2/influenza pipelines.” Specifically, “Defendants manipulated negative results to reflect positive outcomes from various studies, and even fabricated studies out of whole cloth.” As a result of the Defendants’ conduct, the Company claims that it “paid approximately $25 million to Defendants and third-parties that it would not otherwise have paid.” On April 21, 2023, defendants Wittekind, G Tech, SG & AW Holdings, LLC, and SRI filed a demurrer with respect to some, but not all, of the Company’s claims, as well as a motion to strike. On September 6, 2023, the court denied in part and granted in part the pending motions. On September 7, 2023, the court entered a case management order setting the final status conference, trial, and other intervening deadlines.
On December 4, 2023, the Defendants answered the Company’s First Amended Complaint and G Tech and SRI filed a Cross-Complaint. In the Cross-Complaint, G Tech and SRI seek declaratory and injunctive relief related to certain agreements between G Tech, SRI, and the Company, including, inter alia, a declaration that the Framework Agreement, effective as of November 15, 2019, the Statement of Work & License Agreement, effective as of January 31, 2020, and the Statement of Work and License Agreement for Influenza and Coronavirus Indications, effective as of April 18, 2021, have been terminated and the Company has no rights to any license under such agreements. Trial was scheduled to begin on March 3, 2025. On November 14, 2024, the court vacated the March 3, 2025 trial date and set a trial setting conference for May 1, 2025. Discovery remains ongoing. The Company denies the allegations in Defendants’ cross claims and intends to vigorously defend against them while pursuing its claims against the Defendants.
On March 1, 2021, the Company’s former Chief Financial Officer, Robert Wolfe, and his company, Crossfield, Inc., filed a Complaint in the U.S. District Court for the District of Vermont against the Company, Renovaro Biosciences Denmark ApS, and certain directors and officers. In the Complaint, Mr. Wolfe and Crossfield, Inc. asserted claims for abuse of process and malicious prosecution, alleging, inter alia, that the Company lacked probable cause to file and prosecute an earlier action, and sought millions of dollars of compensatory damages, as well as punitive damages. The allegations in the Complaint relate to an earlier action filed by the Company and Renovaro Biosciences Denmark ApS in the Vermont Superior Court, Orange Civil Division. On March 3, 2022, the court partially granted the Company’s motion to dismiss, dismissing the abuse of process claim against all defendants and all claims against Mark Dybul and Henrik Grønfeldt-Sørensen, the Company’s former Chief Executive Officer and former member of the Board of Directors, respectively. On November 29, 2022, the Company filed a motion for summary judgment with respect to the sole remaining claim of malicious prosecution. On August 24, 2023, the court denied the motion for summary judgment. On November 7, 2024, the Court reset the trial date for May 6, 2025. The Company denies the allegations set forth in the Complaint and will continue to vigorously defend against the remaining claim.
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On June 7, 2023, Weird Science LLC (“Weird Science”), Wittekind, the William Anderson Wittekind 2020 Annuity Trust, the William Anderson Wittekind 2021 Annuity Trust, the Dybul 2020 Angel Annuity Trust, and the Ty Mabry 2021 Annuity Trust (collectively, the “Trusts”) (collectively, “Plaintiffs”) filed a Verified Complaint against the Company in the Court of Chancery of Delaware. In the Verified Complaint, Plaintiffs alleged that the Company breached the February 16, 2018 Investor Rights Agreement between the Company, Weird Science, and RS Group ApS (the “Investor Rights Agreement”). According to the Verified Complaint, the Investor Rights Agreement required the Company to (i) notify all “Holders” of “Registrable Securities” at least 30 days prior to filing a registration statement and (ii) afford such Holders an opportunity to have their Registrable Securities included in such registration statement. Plaintiffs alleged that the Company breached these registration rights by failing to provide the required notice in connection with S-3 registration statements filed by the Company on July 13, 2020 and February 11, 2022. The Company moved to dismiss the Verified Complaint on September 15, 2023.
On December 4, 2023, in lieu of opposing the motion to dismiss, Plaintiffs filed a Verified First Amended Complaint (“FAC”). In the FAC, Plaintiffs assert claims against the Company and others for purported breaches of the Investor Rights Agreement, fraud, tortious interference with a contract, and several other torts. Plaintiffs seek compensatory, exemplary, and punitive damages, as well as certain declaratory relief, specific performance, and pre- and post-judgment interest, costs, and attorneys’ fees. The Company filed a motion to dismiss the FAC on December 18, 2023, and the court held a hearing on the Company’s motion to dismiss on November 15, 2024. At the hearing, the court dismissed (1) all claims brought on behalf of Wittekind and the Trusts, (2) the fraudulent concealment claim against the Company and others (without prejudice), and (3) the breach of contract claim against the Company related to a registration statement that was not filed in 2023. At the hearing, the court also found that punitive damages were not available to Plaintiffs. The court took the remaining issues briefed on the Company’s motion to dismiss under advisement. The Company denies Plaintiffs’ allegations and remaining claims and intends to vigorously defend against these claims.
On August 24, 2023, counsel on behalf of Weird Science, Wittekind, individually, and Wittekind, as trustee of the Trusts served a demand to inspect the Company’s books and records (the “Demand”) pursuant to Delaware General Corporation Law, § 220 (“Section 220”). The Demand seeks the Company’s books and records in connection with various issues identified in the Demand. The Company takes its obligations under Section 220 seriously and, to the extent that the requests are proper under Section 220, intends to comply with those obligations.
On January 19, 2024, Weird Science and Wittekind sent the Board of Directors a letter demanding it take corrective actions with respect to twenty-one issues identified therein. On February 27, 2024, Weird Science and Wittekind sent the Board of Directors a supplemental letter that expanded their demand for corrective actions to twenty-six issues. In response to these demand letters, the Board of Directors initially formed a Special Committee (“Special Committee”) of independent directors on February 29, 2024. The Special Committee retained Stradling Yocca Carlson & Rauth LLP as its counsel to investigate the issues identified in the demand letters. The Special Committee’s investigation is ongoing.
On January 23, 2024, Weird Science and Wittekind filed a shareholder derivative action in the United States District Court for the Central District of California against certain officers, directors, and investors of the Company, as well as other defendants, in connection with, inter alia, Weird Science and Wittekind’s demand for corrective action. Plaintiffs filed an amended complaint on June 21, 2024. The First Amended Verified Stockholder Derivative Complaint (“Derivative Complaint”) alleges, among other claims, violations of Section 13(d) and 14(a) and Rules 10b-5(a), 10b-5(c) and 14a-9 of the Exchange Act of 1934. The Derivative Complaint also includes claims of breach of fiduciary duty, corporate waste, unjust enrichment, and contribution/indemnification. Weird Science and Wittekind seek unspecified compensatory, exemplary, and punitive damages and certain injunctive relief. The Derivative Complaint names the Company as a nominal defendant. On July 19, 2024, certain of the director defendants, who had agreed to waive service of the summons and Derivative Complaint, filed a motion to dismiss the Derivative Complaint on a variety of procedural and substantive grounds. A hearing on the motion dismiss was held on October 3, 2024 and the court subsequently took the motion under submission. On October 22, 2024, the plaintiffs filed a notice of certain subsequent events that they allege relate to their pending motion to dismiss. On October 29, 2024, the court granted the director defendants’ motion to dismiss and dismissed the Derivative Complaint without prejudice, but also without leave to amend.
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On November 27, 2024, Weird Science and Wittekind filed a notice of appeal of the court’s decision granting the director defendants’ motion to dismiss. The appeal remains pending.
On June 21, 2024, the Company filed suit against Weird Science, Wittekind, and certain trusts in connection with the February 16, 2018 merger involving the Company and two companies closely associated with Gumrukcu. In the complaint, the Company alleges that Gumrukcu and others deliberately and fraudulently concealed a murder-for-hire scheme from the Company in order to induce the Company to enter into the merger agreement, which resulted in the defendants receiving shares and compensation. The Company asserts claims for fraudulent concealment, equitable fraud, unjust enrichment, and civil conspiracy and seeks, inter alia, equitable relief, including, but not limited to, return to the Company any shares received in connection with the merger, and damages. On October 1, 2024, the defendants moved to dismiss the complaint.
NOTE 8 — RELATED PARTY TRANSACTIONS
As of December 31, 2024, the Company
has accrued $
On August 23, 2024, Avram Miller,
a former member of the Board of Directors, forfeited shares of Common Stock from the original shares of Common Stock
for advisory services originally granted to him on October 11, 2023. As consideration for such forfeiture, the Company granted to Mr.
Miller, an option to purchase shares of Common Stock of the Company with a per-share exercise price of, $
NOTE 9 — SEGMENT REPORTING
For the period ending December 31, 2024, the Company had two reportable segments. These segments have different strategic and economic goals and are managed separately because they require different technology and marketing strategies.
| Reportable Segment | Description | |
| RENB (United States) | Developing new immunotherapies to combat cancer | |
| RENC (Netherlands) | Developing a predicative artificial intelligence based diagnostic methodology for the use of earlier cancer detection |
The Company’s chief executive officer is the chief operating decision maker and reviews the internal management reports for each segment at least quarterly. During the period ending December 31, 2024, there were no significant inter-company revenues or expenses. The chief operating decision maker assesses performance for each segment and decides how to allocate resources based on segment operating losses that also is reported on the consolidated statement of operations. The measure of segment assets is reported on the balance sheet as total consolidated assets. The accounting policies of each segment are the same as those described in the summary of significant accounting policies.
| Schedule of segment operating loss and asset information | ||||||||
| Operating loss | Assets | |||||||
| United States | $ | $ | ||||||
| Netherlands | ||||||||
| $ | $ | |||||||
The chief operating decision maker uses loss from operations to evaluate the performance of each segment’s assets in deciding how to allocate available capital between segments. The chief operating decision maker also uses loss from operations in their competitive analysis by benchmarking the Company’s competitors. The competitive analysis along with the monitoring of budgeted versus actual results are used in assessing the performance of the segment.
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Information regarding each reportable segment for the three months ended December 31, 2024, is as follows:
| Schedule of information regarding segment reporting | ||||||||||||
| RENB | RENC | Total | ||||||||||
| General and administrative | $ | $ | $ | |||||||||
| Research and development | ||||||||||||
| Goodwill impairment | ||||||||||||
| Depreciation and amortization | ||||||||||||
| Segment operating loss | $ | $ | $ | |||||||||
Information regarding each reportable segment for the six months ended December 31, 2024, is as follows:
| RENB | RENC | Total | ||||||||||
| General and administrative | $ | $ | $ | |||||||||
| Research and development | ||||||||||||
| Goodwill impairment | ||||||||||||
| Depreciation and amortization | ||||||||||||
| Segment operating loss | $ | $ | $ | |||||||||
Geographic information:
RENB and RENC are managed on a worldwide basis but operate in offices located in the United Stated and the Netherlands, respectively. The geographic information analyses the Company’s operations and assets based on the country in which each segment operates. In presenting this geographic information, segment operating results have been based on the geographic location in which the services were provided to the segment and segment assets were based on the geographic location of the assets.
NOTE 10 — ACQUISITION
On September 28, 2023, the Company, entered into a Stock Purchase Agreement (the “Purchase Agreement”) with GEDi Cube Intl Ltd., a private company formed under the laws of England and Wales (“GEDi Cube”) to acquire 100% of the equity interests of GEDi Cube from its equity holders (the “Sellers”). On September 28, 2023, the Board of Directors of the Company, and the board of managers of GEDi Cube unanimously approved the Purchase Agreement and on January 25, 2024, the shareholders of the Company approved the issuance of the shares of Common Stock pursuant to the Purchase Agreement. On February 13, 2024 (the “Closing Date”), the Company consummated the acquisition of GEDi Cube and the other transactions contemplated by the Stock Purchase Agreement (collectively, the “Transaction”). As a result of the Transaction, GEDi Cube became a wholly-owned subsidiary of the Company.
Pursuant to the Stock Purchase Agreement, as of the Closing Date, the Company acquired all the issued and outstanding equity interests of GEDi Cube owned by the Sellers as of the Closing Date (each, a “GEDi Cube Share” and, collectively, the “GEDi Cube Shares”) in exchange for which each Seller was entitled to receive (i) as of the Closing Date, such Seller’s pro rata percentage of an aggregate of 70,834,183 shares of common stock, par value $0.0001 per share, of the Company (“Common Stock”), which represents the 67,224,089 shares of Common Stock issued and outstanding as of the Closing Date (minus (a) 1 million shares of Common Stock previously issued to a consultant assisting with the Transaction and (b) 1 million shares of Common Stock previously issued to Avram Miller, a director of the Company, pursuant to his Advisory Agreement, dated October 11, 2023, by and between Mr. Miller and the Company) (the “Closing Consideration”) plus 5,610,100 shares of Common Stock representing the Seller’s Earnout Shares (defined below) resulting from the automatic conversion of the Company’s Series A Convertible Preferred and, (ii) following the Closing Date, such Seller’s pro rata percentage of the shares of Common Stock (the “Earnout Shares” and, together with the Closing Consideration, the “Exchange Consideration”) to be issued to the Sellers upon the exercise or conversion of any of the Company’s derivative securities (subject to certain exceptions) that are outstanding at the Closing Date (the “Closing Derivative Securities”). Each Seller’s pro rata percentage of the Exchange Consideration is equal to the ratio of the aggregate number of GEDi Cube Shares owned by such Seller divided by the aggregate number of GEDi Cube Shares issued and outstanding, in each case, as of the Closing Date.
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The transaction was accounted for in accordance with the provisions of ASC 805-10 - Business Combinations. As a result of the issuance of the Closing Consideration on the Closing Date and based on the number of shares of Common Stock outstanding as of the Closing Date, the Sellers held approximately 49% of the issued and outstanding shares of Common Stock immediately following the closing of the Transaction and the conversion of the Series A Convertible Preferred Stock.
The assets acquired and liabilities assumed were initially recognized provisionally in the accompanying consolidated balance sheets at their estimated fair values as of the acquisition date. The fair values as of the acquisition date are based on information that existed as of the acquisition date. The Company completed its accounting for this acquisition during the period ended June 30, 2024. As a result of the completion of the Company’s analysis, the amount of provisional in-process research and development was determined to have a value of nil. Accordingly, the amount of goodwill recognized was increased to include the previously recognized provisional amount of in-process research and development. There was no impact to the Company’s consolidated statement of operations as a result of this change to the provisional allocation.
The acquisition-date
fair value of the consideration transferred totaled approximately $
| Schedule of acquisition date fair value | ||||
| Common stock | $ | |||
| Contingent consideration | ||||
| Total consideration transferred | $ |
The fair value of the Company’s common shares issued as consideration was based on the closing price of the Company’s common stock as of the Acquisition Date. The fair value of the contingent consideration was based on the Sellers’ right to receive additional shares of common, pro rata, upon the exercise or conversion of warrants, options and convertible notes payables outstanding as of the Closing Date.
The following table details the provisional fair values of the assets acquired and liabilities assumed at the acquisition date:
| Schedule of fair value of assets acquired and liabilities assumed | ||||
| Cash | $ | |||
| Prepaid & Other Assets | ||||
| Fixed Assets | ||||
| Operating lease ROU | ||||
| Total Assets Acquired: | ||||
| Accounts Payable | ||||
| Accrued Expenses | ||||
| Operating Lease liability | ||||
| Notes Payable | ||||
| Total Liabilities Assumed | ||||
| Net Assets Acquired | ( | ) | ||
| Goodwill | ||||
| Total Consideration | $ |
The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of Gedi Cube. None of the goodwill is expected to be deductible for income tax purposes.
The fair values of the acquired tangible and intangible assets were determined using variations of the income approach. The income approach valuation methodology used for the intangible assets acquired makes use of Level 3 inputs.
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Consolidated unaudited pro forma information:
The following consolidated pro forma information assumes that the acquisition of Renovaro Cube took place on July 1, 2023 for the statement of operations for the six month period ended December 31, 2023. These amounts have been estimated after applying the Company’s accounting policies:
| Schedule of consolidated proforma information | ||||||||
| Three months ended December 31, 2023 | Six months ended December 31, 2023 | |||||||
| Revenues | $ | $ | ||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
The unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations would have been if the acquisition had occurred at the beginning of the period presented, nor are they indicative of future results of operations.
NOTE 11 — SUBSEQUENT EVENTS
From January 10, 2025, to January 24,
2025, the Company issued Promissory Notes in the aggregate principal amount of $
On February 7, 2025, the Company entered into a credit
agreement with a third party with a total capacity of up to $
Additionally, for each borrowing under the credit agreement, the lender will receive warrants equal to the quotient of the principal borrowed divided by the value of an American call option determined by the use of a Black-Scholes option pricing model as of the borrowing date. Any warrants issued will have an exercise price equal to the closing price of the Company’s common stock as quoted per NASDAQ and will have a 5-year term.
On February 7, 2025, the Company entered into a credit
agreement with a third party with a total capacity of up to $
Additionally, for each borrowing under the credit agreement, the lender will receive warrants equal to the quotient of the principal borrowed divided by the value of an American call option determined by the use of a Black-Scholes option pricing model as of the borrowing date. Any warrants issued will have an exercise price equal to the closing price of the Company’s common stock as quoted per NASDAQ and will have a 5 year term.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-Looking Statement Notice
Certain statements made in this Quarterly Report on Form 10-Q are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance, or achievements of Renovaro Inc. (“Renovaro,” and together with its subsidiaries, the “Company”, “we” or “us”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. Our actual future results and trends may differ materially depending on a variety of factors, including, but not limited to, the risks and uncertainties discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K as filed with the SEC on October 10, 2024. The Company’s plans and objectives are based, in part, on assumptions involving the continued expansion of the business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Quarterly Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.
Our Business
Renovaro Inc. operates through two subsidiaries, Renovaro Biosciences and Renovaro Cube. Renovaro Cube refers to Renovaro Cube Intl. Ltd. (formerly known as GediCube Intl. Ltd.) and its wholly owned subsidiaries GediCube, B.V. and Grace Systems B.V., which were acquired on February 13, 2024.
Renovaro Biosciences Overview
Renovaro Biosciences is a biotechnology company intending, if the necessary funding is obtained, to develop advanced allogeneic cell and gene therapies to promote stronger immune system responses potentially for long-term or life-long cancer remission in some of the deadliest cancers, and potentially to treat or cure serious infectious diseases such as Human Immunodeficiency Virus (HIV) infections. As a result of our acquisition of GEDi Cube Intl Ltd. on February 13, 2024, we have shifted the Company’s primary focus and resources to the development of the Renovaro Cube technologies.
Therapeutic Technologies
Renovaro Biosciences aims to train the immune system to allow a person to better fight diseases through allogeneic cell and/or gene therapy. Our vision is for a world with healthy longevity, and free from toxic chemotherapy, for those with cancer and other serious diseases. Renovaro Biosciences will seek to leverage general principles and advances in the knowledge of the immune response to engineer cells with enhanced attributes to promote the recognition and elimination of disease cells.
Allogeneic Cell Therapy
The strategic benefit of the allogeneic cell therapy technologies is to potentially allow for the manufacture of large, “off-the-shelf” banks of therapeutic cells that are readily available on demand by healthcare professionals, to potentially decrease the time between diagnosis and treatment.
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In certain treatments (e.g., HIV and cancer), cells taken from healthy donors are engineered to introduce signaling molecules that are designed to enhance the ability of specific immune cells to recognize diseased cells, and to help recruit other cells that will destroy cancer or virus infected cells.
Gene Therapy
Renovaro Biosciences may also seek to explore various approaches for gene therapy design elements to potentially eliminate virus-infected or cancer cells by the modulation of the patient’s immune system. Upon injecting into the patients, these genetically engineered allogeneic cells have little to no risk of passing those modifications to the patient since they are terminally differentiated with locked functionality to activate the host immune system. Gene modified allogeneic cells are expected to be rejected naturally once they activate the patient’s immune system therefore will have a very short survival time.
Renovaro Biosciences Focus Areas:
Oncology:
RENB-DC11: Genetically modified Allogeneic Dendritic Cell Therapeutic Vaccine as Potential Product for Long-term Remission of Solid Tumors; specifically Pancreatic tumors
Allogeneic Cell Therapy Platform – Completed pre-IND, IND-enabling phase.
Based on learnings from our internal research, literature reviews of ongoing clinical development for solid tumors, and recent advances in immune modulation, we have designed an innovative therapeutic vaccination platform that could potentially be used to induce life-long remission from some of the deadliest solid tumors such as pancreatic, liver, triple negative breast and head & neck cancers.
The platform may one day enable broad immune enhancements that are combined with cancer specific antigens that could be applicable to a wide range of solid tumors. This approach allows us to quickly adapt our approach to any patient solid tumor using the same banked allogenic drug substance.
RENB-DC20: Genetically modified Allogeneic Dendritic Cell Therapeutic Vaccine as Potential Treatment Product for Long-term Remission of Triple Negative Breast Cancer
Triple Negative Breast Cancer (TNBC) is a subtype of breast cancer that is negative for estrogens receptor (ER) negative, progesterone receptor (PR) negative and human epidermal growth factor receptor 2 (HER2). TNBC is characterized by its unique molecular profile, aggressive nature, and distinct metastatic patterns that lack targeted therapies. TNBC is well known for its aggressive behavior and is characterized by onset at a younger age, high mean tumor size, and higher-grade tumors.
Based upon our internal research, literature reviews of ongoing clinical development for solid tumors, and recent advances in immune modulation, we believe we may have the ability to design an innovative therapeutic vaccination platform that could potentially be used to treat some of the deadliest and hard-to-treat solid tumors that include triple negative breast cancer.
Infectious Diseases:
RENB-HV12: Genetically Modified Allogeneic Dendritic Cell Therapeutic Vaccine as Potential Treatment Product for Long-term Remission of HIV; A Chronic Infectious Disease
The oncology therapeutic vaccine technology could potentially be adapted to target infectious disease antigens and be a viable therapeutic approach in difficult to treat chronic infectious diseases. As described above, the engineered allogenic dendritic cell drug substance is thought to be able to be loaded with various cancer antigens for specific solid tumors but could or may be loaded with infectious disease antigens to elicit a more robust immune response to viruses and other difficult to treat infections.
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Renovaro Cube Overview
Renovaro Cube is an AI-driven healthcare technology company focusing on the earliest possible detection of cancer and its recurrence. Renovaro Cube has developed a proprietary AI platform that analyzes genetics using Explainable AI (as defined below) to provide earlier and more accurate cancer diagnosis. This platform uses a multi-omics approach to search for individual biomarkers that are present even in asymptomatic patients. This approach is combined with differential molecular capabilities that are designed to identify, differentiate and pinpoint the exact source. Renovaro Cube’s process also involves the mining of biomarker panels, which are integrated into a machine learning library referred to as “RenovaroCube” to further enhance diagnosis.
Renovaro Cube also aims to utilize its proprietary AI platform in the development of commercial products to support clinical, research and pharmaceutical organizations that are trying to improve patient care through precision diagnosis, prediction of success of therapy, new drug discovery, treatment protocols or clinical trials. Specifically, Renovaro Cube is focused on developing products and services aimed at (i) early cancer characterization, (ii) personalized treatment selection, (iii) prediction and tracking response to therapies, (iv) recurrence detection and efficacy monitoring, and (v) ultimately, drug discovery.
Renovaro Cube was initially incorporated as Grace Systems B.V. (“Grace Systems”) in 2013 under the laws of the Netherlands to develop unique data mining algorithms to enable banking, finance and government entities to extract business insights from data. Grace Systems began applying its algorithms to biological data in 2018 to uncover cancer-associated patterns. Beginning in 2018, Grace Systems pivoted its platform to focus only on healthcare. Renovaro Cube has focused on developing its AI technology for early cancer detection.
Renovaro Cube has now focused on commercialization of its AI technology. Renovaro Cube believes that it has developed a unique approach to the early detection and diagnosis of cancer and its recurrence and, in time, other rare diseases through the systematic analysis of data using AI technologies, data mining procedures and algorithms for health technology.
Renovaro Cube’s technology has been trained on complex heterogeneous cancer data and appears to find patterns associated with cancer in public and private data resources. With the help of Renovaro Cube’s algorithms, discovered patterns may be translated into biomarkers that can be used in a clinical setting to target various aspects of cancer diagnosis and treatment.
Renovaro Cube’s Strategy
Renovaro Cube’s product development focuses on four core areas:
| ● | Early Detection. Multi-cancer early detection (“MCED”) blood tests are advanced diagnostic tools that analyze cell-derived molecules present in the bloodstream. These tests specifically look for abnormal genetic, epigenetic or proteomic patterns of these cell-derived molecules, which can indicate the presence of cancer cells. By examining the molecules shed from various cells, including cancer cells, MCED tests aim to detect cancer at an early stage. This approach holds promise for improving cancer detection and potentially saving lives. |
| ● | Recurrence of cancer. A recurrence refers to the return of cancer after a period of remission. A cancer recurrence happens because, in spite of the efforts to kill the cancer, some cells may remain, which grow and eventually cause symptoms. In rare instances, a patient may develop a new cancer that’s completely unrelated to the originally diagnosed cancer, which is referred to as a second primary cancer. An early warning system could help to identify a recurrence as early as possible, thereby helping to accelerate any treatment and diagnosis. The different types of recurrence include: |
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| o | Local recurrence, meaning that the cancer has returned in the same place it first started; |
| o | Regional recurrence, meaning that the cancer has returned to the lymph nodes near the place it first started; and |
| o | Distant recurrence, meaning the cancer has returned in another part of the body. |
| ● | Response to treatment. At Renovaro Cube we aim to develop a new array of diagnostic products that can accurately identify patients that are going to respond or fail to a certain drug. In highly toxic therapies it will not only increase survival but will also reduce unnecessary exposure to chemotherapy. Furthermore, the costs for cancer drugs are usually very high. Providing the right therapy to the right patient will therefore significantly reduce the costs of medicine in cancer. |
| ● | Clinical trials. Clinical trials involve a type of research that studies new tests and treatments and evaluates their effects on human health outcomes. People volunteer to take part in clinical trials to test medical interventions including drugs, cells and other biological products, surgical procedures, radiological procedures, devices, behavioral treatments and preventive care. Clinical trials are carefully designed, reviewed and completed, and need to be approved before they can start. |
In response to these four core areas, the key components of Renovaro Cube’s product development are to build a software and hardware platform that:
| ● | Uses data science to develop novel insights into the characterization of diseases such as cancer. Renovaro Cube intends to apply its proprietary technology to biological data from multiple sources to enable the typification (or classification) of disease entities and sub-entities to provide insights about the nature and behavior of diseases to payers, providers, pharmaceutical companies and patients. |
| ● | Enables more accurate diagnosis and earlier detection of cancer and other diseases with the goal of maximizing outcomes and minimizing the costs of treatment. Renovaro Cube intends to develop a system to understand the smallest fragments of cancer in the blood of the patient. Presently, Renovaro Cube is developing a product to analyze results from liquid biopsy run through an Oxford Nanopore Sequencer. We expect the Renovaro Cube product will subsequently identify, train and validate explainable biomarkers, panels and models on different molecular layers. Multiple models will be individually trained for optimal stratification through the entire health journey, ensuring the right accuracy for a therapeutic decision in every stage. Renovaro Cube will integrate different modalities and molecular data sources into a differential diagnostic report. Diagnostics and prognosis will be explainable with quality control reports and biomarker insights for different disciplines ensuring maximum trust and insight in medical decision making. |
| ● | Assists in clinical trials with patient cohort selection and response tracking, to be used by companies like Renovaro Biosciences in their patient cohort selection for their clinical trials, by looking at which patients are reacting positively, negatively and have no reaction. This data becomes more important through the progression of the different phases of drug development, as more and more patients are added. Renovaro Cube will provide multi-omic data analysis, looking for specific changes in the patients that might indicate a change in their molecular make-up. This can then be used for the next phase of a clinical trial to look for the specific molecular data that has showed a positive reaction in the previous phase. It also provides insights for more effective response tracking, which Renovaro Cube believes is important to the providers of care as well as the development and evaluation of new pharmaceuticals and immune therapies in clinical trials. Patient response to treatment can be used to focus the target audience for drugs in development and in subsequent clinical practice. As Renovaro Cube collects more data, longitudinal about treatment and response, it will have the ability to train prognostic models to give an insight in disease progression and treatment response, both critical for enrolling in clinical trials and eventually every treatment. Because Renovaro Cube consists of many independently trained and validated models, it will have the ability to assist in virtually every therapeutic decision, for different subtypes and groups (stratifications). The multi-omics and multi-modal pipelines could allow the use of multiple combinations of tissue samples and diagnostic platforms. The detailed diagnostic reports will allow and support insights for multiple disciplines such as cancer biology, genomics and pathology to look at underpinning biomarkers, pathways and clinical annotations. |
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| ● | Provides insight into patients who have had cancer previously. These insights will provide for more effective recurrence monitoring, which Renovaro Cube believes is important to the providers of care and patients during follow-up monitoring of remissions. Renovaro Cube anticipates that payers want to detect and re-treat recurrences at the earliest possible stage to maximize patients’ outcomes in terms of time and cost and that, similarly, patients with a recurrence are keen to re-engage with effective treatment at the earliest opportunity. A key aspect of this will be taking blood from the patients, sequencing this blood and running it through the Renovaro Cube platform which will identify if the patient has any indication of the recurrence of the same or a new cancer. For recurrence monitoring, Renovaro Cube will focus on a highly sensitive combination of lab and information technology. Lab protocols, sequence post processing and machine learning will all be designed, trained and validated to get the best signal with the highest sensitivity to catch early signals of recurrence. This will be done on a regular basis allowing surveillance analysis over time. |
| ● | Includes biomarker panels that will be extended to include as many layers of genetic information (multi-omics) as possible including mutation, gene expression, methylation status, fragmentomics, nucleosome mapping, collectively named multi-omics, with the goal to reach the highest accuracy possible, both in terms of sensitivity and specificity of each individual biomarker panel. This provides a non-invasive alternative for the current complex, expensive and cumbersome procedures. |
| ● | Create value through advancing more sophisticated typification of diseases in an effort to address some of the pressing problems faced by modern healthcare, including healthcare costs, an aging population and developments in medical technology that produce a stream of increasingly sophisticated treatments requiring more precise targeting. |
One additional key focus of Renovaro Cube is its multi-modal, data analysis. Multi-modal data encompasses the whole aspect of data from a patient perspective, whether genomics, imaging, phenotypic or even wearable data, which can be cross analyzed to produce data that could not be previously produced. Renovaro Cube intends to use multi-modal data to bring new insights to the clinical and research teams trying to understand what to do next with the patient.
Renovaro Cube’s Technology and Techniques
Renovaro Cube is dedicated to the development of early cancer detection blood tests and expects to develop partnerships with third-party laboratories across the United Kingdom, the Netherlands and the rest of Europe and will also expand to the United States. Renovaro Cube is focused on developing diagnostic tests and test kits that would analyze samples derived from non-invasive liquid biopsy samples and intends to perform these tests from Renovaro’s dedicated fully certified service laboratory and engage third-party laboratories to perform these tests for end-users.
For this purpose, Renovaro Cube has developed an AI platform that aims to leverage expertise in both biological and computational sciences and to go beyond traditional tumor signals by detecting the body’s early warning signs of cancer. Renovaro Cube’s goal is to provide accurate and reliable tests that can aid in the early diagnosis and treatment of cancer. Renovaro Cube’s AI technology is created to detect a wide range of biological signs to enhance the accuracy and sensitivity of early cancer detection and, thereby, enable earlier intervention and potentially improved patient outcomes.
Renovaro Cube’s AI technology aims to address three critical facets of medical needs within the domain of cancer diagnosis (as illustrated below):
| ● | type-specific cancer detection; |
| ● | pan-cancer detection; and |
| ● | patient stratification. |
Moreover, the versatility of Renovaro Cube’s AI technology extends to encompass the realm of rare cancers, including cases such as cancer of unknown primary.
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Leveraging DNA methylation data, Renovaro Cube has identified and validated biomarker panels tailored for the detection of a wide range of cancers, including bladder, breast, colon, prostate, thyroid, head and neck, liver, kidney and lung cancer.
The foundational architecture of Renovaro Cube’s AI technology is engineered to facilitate comprehensive pan-cancer analysis through its extensive record of informative biomarkers discovered across a diverse array of cancer types. This comprehensive repository empowers Renovaro Cube’s AI technology to swiftly cross-reference biomarkers and explore molecular commonalities and distinctions that span multiple tumor categories.
For example, the capabilities of Renovaro Cube’s AI technology have unearthed biomarkers capable of pinpointing a specific subgroup of thyroid cancer patients characterized by a distinct genomic alteration, the neurotrophic tyrosine receptor kinase (“NTRK”) gene fusion. Identification of these NTRK-positive patients provides an actionable therapeutic target.
Uses of Renovaro Cube’s AI Technology
Renovaro Cube has developed its AI platform to support:
| ● | AI-assisted patient diagnostics; |
| ● | multi-omic data analysis; |
| ● | genome-wide or targeted analysis; |
| ● | pan-cancer analysis; |
| ● | different technology platforms (sequence or array); |
| ● | tracking of each sample; |
| ● | AI-guided biomarker discovery for single or multiple cancer types; and |
| ● | logs of analysis steps and outcomes (data preparation, discovery, validation). |
Renovaro Cube’s AI platform is an enterprise software platform that is distinguished from its competitors’ technology by its core attributes encompassing AI-guided analysis and meticulous record-keeping of data handling procedures within audit trails, logs, and data discoveries. Renovaro Cube designed this technology to support and validate every phase of the process, from the initial handling of raw data to the creation of essential biomarker panels. Renovaro Cube’s AI platform also facilitates the integration of data originating from diverse sources, including public databases and collaborative partnership data.
Illustrated below is the three-phase workflow behind Renovaro Cube’s AI platform for biomarker discovery using DNA methylation data. This workflow commences with the identification of pertinent single- and multi-omic data best suited to address the specific inquiries of Renovaro Cube’s clients, and the subsequent stages involve the meticulous pre-processing and loading of this data into the platform. This process culminates in the availability of a dashboard offering the client insights into the data’s characteristics, such as data quality, the technology employed, and associated metadata.
| ● | Phase I of the workflow behind Renovaro Cube’s AI platform primarily centers on the pivotal process of biomarker discovery. This intricate procedure unfolds through the application of data mining algorithms and statistical methodologies integrated into the AI platform. The paramount objective of Phase I is to reduce the plethora of genomic features displaying variations across samples, which is accomplished by systematically eliminating extraneous or inconsequential features while preserving those features that exhibit the greatest potential for accurately detecting cancer. |
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| ● | Phase II of the workflow builds upon the foundation of selected biomarkers by focusing on understanding the dynamic interplay among these chosen biomarkers, culminating in the creation of composite panels. The goal of Phase II is to pinpoint biomarker combinations that not only demonstrate robustness in detecting cancer but also maintain their efficacy across diverse contexts. Renovaro Cube believes that its AI algorithms are adept at uncovering multiple combinations across a spectrum of panels, which is supported by Renovaro Cube’s AI-guided panel mining, a proprietary combinatorial optimization technique used by Renovaro Cube’s AI technology. This approach, coupled with the capacity to explore numerous panels, significantly enhances the likelihood of discovering panels that align with specific metric criteria, such as sensitivity, specificity, precision, and recall and allows for tailoring criteria to align with clients’ unique needs, such as the number of biomarkers included per panel, or the inclusion of biomarkers associated with the expression of specific genes. The performance of the top-tier panels is further fine-tuned through the application of machine learning models. Subsequently, the efficacy of these biomarker panels in detecting cancer is validated through independent data sets. |
| ● | Phase III of the workflow involves Renovaro Cube’s collaboration with its clinical partners to validate the performance of the biomarker panels. Through this collaboration, Renovaro Cube can confirm the utility and accuracy of its biomarker panels in real-world clinical contexts. |
AI-Assisted Diagnostics
The process of biomarker discovery facilitated by Renovaro Cube’s AI technology has yielded a set of data that enables scrutiny of the genomic distinctions and commonalities inherent in diverse cancer types. This data set can support the diagnosis of cancers when their type or origin remains unidentified.
In addition to this role in biomarker discovery and the development of diagnostic tests, Renovaro Cube’s AI technology also integrates AI-guided molecular profiling of patient samples and furnishes diagnostic patient reports. These diagnostic reports reflect the outcomes of molecular profiling, coupled with interpretations provided by Renovaro Cube’s team, to facilitate the process of cancer diagnostics by a qualified healthcare provider, who can consider these reports in the context of a patient’s medical history, clinical signs, and symptoms, among other factors.
Quality Control Process
Renovaro Cube undertakes post-processing of data generated from sequence and arrays to ensure accurate and meaningful results. These post-processing steps for omic data include:
| 1. | Quality Control: Quality control is performed to assess the overall data quality and to identify any technical issues or anomalies. |
| 2. | Normalization: arrays can introduce various sources of technical variation, such as batch effects, intensity variations, and probe-specific biases. |
| 3. | Quality Filtering: After genotype calling, additional quality filtering may be performed to remove low-quality SNPs based on criteria like call rates, minor allele frequency, Hardy-Weinberg equilibrium p-values, and linkage disequilibrium. |
Other post-processing steps may include genotype calling, population stratification and association analysis. Specific post-processing steps may vary depending on the type of array used, the study design, and the analytical goals.
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Planning for Commercialization
Partnerships in Development
To enhance multi-omic and multi-modal capacity, and to work to validate those capabilities with human samples including liquid-biopsy-based tests/test kits, Renovaro Cube is actively pursuing relationships with leading academic cancer centers, pathology and imagery centers in Europe, the USA and the Middle East. In certain cases, scopes of work are in process. This is a very attractive model for partners to be involved with Renovaro Cube to perform multi-omics genetic analysis using liquid biopsies.
Resources
Renovaro Cube intends to hire additional staff to increase the speed and velocity of its organization, including the development of the AI platform and the opportunities to deploy the AI platform for research perspective and ultimately for clinical practice and into clinical trials.
In addition, Renovaro Cube intends to build out its infrastructure by leasing space for storage, networking and hosting facilities.
Target Market
Renovaro Cube’s intended customers will be hospitals, clinics, insurance companies, pharmaceutical companies, biotech companies, research centers, physicians and individual patients.
Renovaro Cube aims to utilize its AI technology to commercialize products and test kits for healthcare providers, hospitals, clinics and doctors that will expedite diagnosis and the selection of appropriate treatment for various types of cancer. Renovaro Cube intends to differentiate its products based on the following factors:
| ● | Proprietary and unique panel mining algorithms to create multiple biomarker stratifications per cancer; |
| ● | Explainable AI, offering traceability between the prediction and the exact biomarkers, panels and genes; |
| ● | Differential diagnosis, inclusion and exclusion of cancer types based on facts; and |
| ● | Precision diagnosis, with a high accuracy percentage with machine-learning tuning. |
The multi-omic design of Renovaro Cube’s AI platform enables the use of different molecular layers, such as epigenomics, transcriptomics, and metabolomics, together with genomics and clinical data.
Panel Mining
The unique panel mining technique in Renovaro Cube’s technology repeatedly investigates genes to identify relevant biomarkers. The proprietary technique in Renovaro Cube’s technology not only searches for individual biomarkers, but also integrates validated panels for different cancer types into the “RenovaroCube” machine learning library. This process enables precision diagnosis, by including one cancer and excluding others based on statistically, scientifically and clinically validated machine-learning panels.
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Panel mining is designed to combine biomarkers into panels in such a way that the final panel meets:
| ● | performance metric criteria; |
| ● | technical criteria, such as a minimum or maximum number of biomarkers for the selected assay; |
| ● | biological criteria, non-annotated genes inclusion; and |
| ● | stratification criteria. |
Explainable AI
The term “Explainable AI” refers to the ability of an AI system or model to provide human-understandable explanations for its decision-making process or predictions. This feature aims to bridge the gap between the “black box” nature of many AI algorithms and the need for transparency, interpretability, and accountability in AI applications.
In traditional machine learning approaches, such as deep neural networks, the internal workings of the model can be complex and difficult to interpret. This lack of interpretability poses challenges in critical domains where decisions have significant implications, such as healthcare.
Renovaro Cube believes that Explainable AI is crucial for ensuring transparency, fairness, and accountability in AI systems. Renovaro Cube’s AI platform includes Explainable AI by design. All data points, calculations and results are traceable, and all calculations are verifiable and reproducible with the same result.
Disease prognosis is one of the diagnostic capabilities of the Explainable AI feature of Renovaro Cube’s technology. Disease prognosis gives more insight for a specific patient that empowers healthcare providers, patients, and their families to make well-informed decisions about treatment, care, and future planning, thereby enhancing patient-centered care, optimizing resource utilization, and contributing to improved patient outcomes and quality of life.
Differential Diagnosis
Renovaro Cube’s AI platform offers differential diagnosis by design due to its approach with a multitude of models for different diseases and the ability to include and exclude diseases.
Diseases like cancer are very homogenous, meaning that markers like TP53 or BRCA are expressed with multiple cancers. To address this homogeneity, differential diagnosis distinguishes between two or more conditions or diseases that share similar signs, symptoms or characteristics. The goal of differential diagnosis is to consider and evaluate all possible diagnoses for the patient’s symptoms to determine the most likely cause. Differential diagnosis therefore aims to identify the underlying condition accurately and guide appropriate treatment and management strategies.
Corporate History
We were incorporated under the laws of the State of Delaware on January 18, 2011, under the name Putnam Hills Corp. and in 2014 we merged with and changed our name to DanDrit Biotech USA, Inc. In 2018, we acquired Enochian Biopharma and changed our name to Enochian BioSciences Inc. In August 2023, the Company changed its corporate name to Renovaro Biosciences Inc. On February 13, 2024, the Company changed its corporate name to Renovaro Inc. On February 13, 2024, Renovaro Inc. acquired Renovaro Cube Intl Ltd and its subsidiaries, in which Renovaro Cube became a wholly-owned subsidiary of Renovaro Inc.
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Going Concern and Management’s Plans
The Company’s consolidated financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has incurred substantial recurring losses from continuing operations, has used cash in the Company’s continuing operations, and is dependent on additional financing to fund operations. The Company incurred a net loss of $7,252,394 and $51,464,429 for the three and six months ended December 31, 2024, respectively. As of December 31, 2024, the Company had cash and cash equivalents of $311,764 and an accumulated deficit of $383,919,510 and a working capital deficit of $26,898,493. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date the financial statements are issued. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.
Management has reduced overhead and administrative costs by streamlining the organization to focus around the development and validation of its AI-driven cancer diagnostics platform. The Company has tailored its workforce to focus on these activities. In addition, the Company intends to secure additional required funding through equity or debt financing. However, there can be no assurance that the Company will be able to obtain any sources of funding. Such additional funding may not be available or may not be available on reasonable terms, and, in the case of equity financing transactions, could result in significant additional dilution to our stockholders. If we do not obtain required additional equity or debt funding, our cash resources will be depleted and we could be required to materially reduce or suspend operations, which would likely have a material adverse effect on our business, stock price and our relationships with third parties with whom we have business relationships, at least until additional funding is obtained. If we do not have sufficient funds to continue operations, we could be required to seek bankruptcy protection or other alternatives that could result in our stockholders losing some or all of their investment in us.
Funding that we may receive during the fiscal year 2025 is expected to be used to satisfy existing and future obligations and liabilities and working capital needs, to support commercialization of our products, to conduct the clinical and regulatory work to develop our product candidates, and to begin building working capital reserves.
Results of Operations for the Three and Six Months ended December 31, 2024 and 2023
The following table sets forth our revenues, expenses and net loss for the six months ended December 31, 2024 and 2023. The financial information below is derived from our unaudited condensed consolidated financial statements.
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||||||||
| December 31, | Increase/(Decrease) | December 31, | Increase/(Decrease) | |||||||||||||||||||||||||||||
| 2024 | 2023 | $ | % | 2024 | 2023 | $ | % | |||||||||||||||||||||||||
| Operating Expenses | ||||||||||||||||||||||||||||||||
| General and administrative | $ | 4,353,123 | $ | 3,616,392 | $ | 736,731 | 20 | % | $ | 9,654,373 | $ | 11,906,602 | $ | (2,252,229 | ) | (19 | )% | |||||||||||||||
| Research and development | 161,084 | 620,521 | (459,437 | ) | (74 | )% | 551,273 | 1,187,165 | (635,892 | ) | (54 | )% | ||||||||||||||||||||
| Goodwill impairment | — | — | — | 0 | % | 47,614,729 | — | 47,614,729 | 100 | % | ||||||||||||||||||||||
| Depreciation and amortization | 32,109 | 33,162 | (1,053 | ) | (3 | )% | 64,494 | 60,422 | 4,072 | 7 | % | |||||||||||||||||||||
| Total Operating Expenses | 4,546,316 | 4,270,075 | 276,241 | 6 | % | 57,884,869 | 13,154,189 | 44,730,680 | 340 | % | ||||||||||||||||||||||
| LOSS FROM OPERATIONS | (4,546,316 | ) | (4,270,075 | ) | 276,241 | 6 | % | (57,884,869 | ) | (13,154,189 | ) | (44,730,680 | ) | 340 | % | |||||||||||||||||
| 393)Other Income (Expenses) | ||||||||||||||||||||||||||||||||
| Change in fair value of contingent consideration | (2,590,000 | ) | — | (2,590,000 | ) | 100 | % | 6,660,000 | — | 6,660,000 | 100 | % | ||||||||||||||||||||
| Loss on extinguishment of debt | — | — | — | 0 | % | — | (120,018 | ) | 120,018 | (100 | )% | |||||||||||||||||||||
| Interest expense | (98,891 | ) | (274,984 | ) | 176,093 | (64 | )% | (348,971 | ) | (454,255 | ) | 105,284 | (23 | )% | ||||||||||||||||||
| Interest and other income | (17,187 | ) | 15,938 | (33,125 | ) | (208 | )% | 109,411 | 24,313 | 85,098 | 350 | % | ||||||||||||||||||||
| Total Other Income (Expense) | (2,706,078 | ) | (259,046 | ) | (2,447,032 | ) | 945 | % | 6,420,440 | (549,960 | ) | 6,970,400 | (1,267 | )% | ||||||||||||||||||
| NET LOSS | $ | (7,252,394 | ) | $ | (4,529,121 | ) | $ | (2,723,273 | ) | 60 | % | $ | (51,464,429 | ) | $ | (13,704,149 | ) | $ | (37,760,280 | ) | 276 | % | ||||||||||
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Revenues
We are a pre-revenue, pre-clinical biotechnology and artificial intelligence driven healthcare technology company. We have never generated revenues and have incurred losses since inception. We do not anticipate earning any revenue until our therapies or products are approved for marketing and sale.
Expenses
Our operating expenses for the three months ended December 31, 2024 and 2023, were $4,546,316 and $4,270,075 respectively, representing an increase of $276,241 or approximately 6%. The increase in operating expenses primarily relates to the increase in general and administrative expenses of $736,731, partially offset by the decrease in research and development expenses of $459,437.
Our operating expenses for the six months ended December 31, 2024 and 2023, were $57,884,869 and $13,154,189 respectively, representing an increase of $44,730,680, or approximately 340%. The increase in operating expenses primarily relates to the increase in goodwill impairment of $47,614,729, partially offset by the decrease in general and administrative expenses of $2,252,229 and the decrease in research and development expenses of $635,892.
General and administrative expenses for the three months ended December 31, 2024, and 2023, were $4,353,123 and $3,616,392, respectively, representing an increase of $736,731 or approximately 20%. The variance is related to an increase in consulting fees expense of $667,815, compensation and related expenses of $354,968, and accounting fees of $134,620, partially offset by a decrease in non-cash stock-based compensation expense of $440,597.
General and administrative expenses for the six months ended December 31, 2024, and 2023, were $9,654,373 and $11,906,602, respectively, representing a decrease of $2,252,229 or approximately 19%. The variance is related to a decrease in consulting fees expense of $2,098,916, and non-cash stock-based compensation expense of $1,066,778, partially offset by an increase in compensation and related expenses of $637,587 and legal expenses of $192,571.
Research and development expenses for the three months ended December 31, 2024, and 2023, were $161,084 and $620,521, respectively, representing a decrease of $459,437 or approximately 74%. The variance is primarily driven by a decrease of $236,026 in collaborating partner expenses with CDMO and CROs and $205,057 in consumables related to pre-clinical testing.
Research and development expenses for the six months ended December 31, 2024, and 2023, were $551,273 and $1,187,165, respectively, representing a decrease of $635,892 or approximately 54%. The variance is primarily driven by a decrease of $498,092 in collaborating partner expenses with CDMO and CROs, and consulting expenses of $107,433.
The Company recorded other expense of $2,706,078 for the three months ended December 31, 2024, compared to other expense of $259,046 for the three months ended December 31, 2023, representing an increase in other expense of $2,447,032 or 945%. The variance is primarily due to an increase of $2,590,000 in the change in fair value of contingent consideration in the current period.
The Company recorded other income of $6,420,440 for the six months ended December 31, 2024, compared to other expense of $549,960 for the six months ended December 31, 2023, representing a decrease in other expense of $6,970,400 or 1,267%. The variance is primarily due to the change in fair value of contingent consideration liability of $6,660,000 in the current period.
Net Loss
Net loss for the three months ended December 31, 2024, and 2023, was $7,252,394 and $4,529,121, respectively, representing an increase in net loss of $2,723,273 or approximately 60%. The increase in net loss was primarily due to an increase in the change in fair value of contingent consideration of $2,590,000, an increase in general and administrative expenses of $736,731, partially offset by a decrease in research and development expenses of $459,437.
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Net loss for the six months ended December 31, 2024, and 2023, was $51,464,429 and $13,704,149, respectively, representing an increase in net loss of $37,760,280 or approximately 276%. The increase in net loss was primarily due to an increase in goodwill impairment of $47,614,729, partially offset by the decrease in general and administrative expenses of $2,252,229 and change in fair value of contingent consideration of $6,660,000.
Liquidity and Capital Resources
We have historically satisfied our capital and liquidity requirements through funding from stockholders, the sale of our Common Stock and warrants, and debt financing. We have never generated any sales revenue to support our operations, and we expect this to continue until our therapies or products are approved for marketing in the United States and/or Europe. Even if we are successful in having our therapies or products approved for sale in the United States and/or Europe, we cannot guarantee that a market for the therapies or products will develop. We may never be profitable.
As noted above under the heading “Going Concern and Management’s Plans,” through December 31, 2024, we have incurred substantial losses. We will need additional funds both in the next twelve months and beyond for (a) research and development, (b) increases in personnel, (c) the purchase of equipment, and investment in the development and validation of our technology. The availability of any required additional funding cannot be assured. In addition, an adverse outcome in legal or regulatory proceedings in which we are currently involved or in the future may be involved could adversely affect our liquidity and financial position. We may raise such funds from time to time through public or private sales of our equity or debt securities. Such financing may not be available on acceptable terms, or at all, and our failure to raise capital when needed could materially adversely affect our growth plans and our financial condition and results of operations.
As of December 31, 2024, the Company had $311,764 in cash and working capital deficit of $26,898,493 as compared to $220,467 in cash and working capital deficit of $28,312,274 as of June 30, 2024, an increase of 41% and decrease of 5%, respectively.
Assets
Total assets at December 31, 2024, were $111,340,272 compared to $163,129,450 as of June 30, 2024. The decrease in assets is primarily due to goodwill impairment of $47,614,729 in the current period.
Liabilities
Total liabilities at December 31, 2024, were $29,280,954 compared to $31,152,306 as of June 30, 2024. The decrease in total liabilities was primarily related to the decrease of $6,660,000 in contingent consideration liability, partially offset by an increase of $2,679,004 in notes payable – related parties, net and an increase in accounts payable of $1,485,872.
The following is a summary of the Company’s cash flows (used in) or provided by operating, investing, and financing activities:
| Six Months Ended December 31, 2024 | Six Months Ended December 31, 2023 | |||||||
| Net Cash Used in Operating Activities | $ | (4,576,052 | ) | $ | (5,923,830 | ) | ||
| Net Cash Used in Investing Activities | — | (1,115,209 | ) | |||||
| Net Cash Provided by Financing Activities | 4,620,162 | 5,409,682 | ||||||
| Effect of exchange rates on cash | 47,187 | (1,143 | ) | |||||
| Change in Cash and Cash Equivalents | $ | 91,297 | $ | (1,630,500 | ) | |||
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Cash Flows
The decrease in our cash used in operating activities is primarily related to the changes in our operating assets and liabilities. The change is primarily drive by our net loss offset by significant non-cash charges such as stock based compensation, impairments and change in fair value of contingent consideration. Additionally, our operating cash flow was positively impacted by changes in our operating assets and liabilities, primarily other receivables, prepaid expenses and accounts payable.
Cash used in investing activities during the prior period primarily related to the issuance of notes receivable prior to the acquisition of Renovaro Cube totaling $1,073,625.
Cash provided by financing activities during the period primarily related to net proceeds of $2,671,926 from issuance of notes payable and $2,376,181 from private placements that were partially offset by $427,945 in repayment of a finance agreement.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Significant Accounting Policies and Critical Accounting Estimates
The methods, estimates, and judgments that we use in applying our accounting policies have a significant impact on the results that we report in our financial statements. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain.
For a summary of our accounting policies, see Note 1 to the unaudited condensed consolidated financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
As a “smaller reporting company” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, the Company is not required to provide the information required by this Item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer (the “Certifying Officers”) are responsible for establishing and maintaining disclosure controls and procedures for the Company. The Certifying Officers have designed such disclosure controls and procedures to ensure that material information is made known to them, particularly during the period in which this Report was prepared.
The Certifying Officers are responsible for establishing and maintaining adequate internal control over financial reporting for the Company and used the “Internal Control over Financial Reporting Integrated Framework” issued by the Committee of Sponsoring Organizations (“COSO”) to conduct an extensive review of the Company’s “disclosure controls and procedures” (as defined in the Exchange Act, Rules 13a-15(e) and 15-d-15(e)) as of the end of each of the periods covered by this Report (the “Evaluation Date”). Based upon that evaluation, the Certifying Officers concluded that, as of December 31, 2024, our disclosure controls and procedures were not effective in ensuring that the information we were required to disclose in reports that we file or submit under the Securities and Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. The deficiency is attributed to the Company not having adequate resources to address complex accounting matters. This control deficiency will be monitored, and attention will be given to this matter as we grow.
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The Certifying Officers based their conclusion on the fact that the Company has identified a material weakness in controls over financial reporting, detailed above. We expect to be deficient in our disclosure controls and procedures until sufficient capital is available to hire the appropriate internal accounting staff.
Changes in Internal Controls
There have been no changes in our internal controls over financial reporting during the six months ended December 31, 2024, that have materially affected or are reasonably likely to materially affect our internal controls.
PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
Securities Class Action Litigation. On July 26, 2022 and July 28, 2022, securities class action complaints (the former, the “Chow Action” and the latter, the “Manici Action”) and together, the “Securities Class Action Litigation”) were filed by purported stockholders of the Company in the United States District Court for the Central District of California against the Company and certain of the Company’s current and former officers and directors. The complaints allege, among other things, that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder, by making false and misleading statements and omissions of material fact in connection with the Company’s relationship with Serhat Gümrükcü and its commercial prospects. The complaints seek unspecified damages, interest, fees, and costs. On November 22, 2022, the Manici Action was voluntarily dismissed without prejudice, but the Chow action remains pending. On October 22, 2023, the Court appointed a lead plaintiff in the Chow Action. The lead plaintiff filed an amended complaint on December 15, 2023. The Company has filed a motion to dismiss the amended complaint on March 15, 2024. The Court denied the Company’s motion to dismiss on June 28, 2024. A mediation was held on September 17, 2024, after which the parties signed a stipulation of settlement, dated November 8, 2024. The plaintiff filed their motion for preliminary approval of the settlement on December 9, 2024. On December 18, 2024, the Company filed a notice of non-opposition to the motion for preliminary approval of the settlement. On January 7, 2025, the Court took the plaintiff’s motion for preliminary approval of the settlement under consideration without oral argument.
Federal Derivative Litigation. On September 22, 2022, Samuel E. Koenig filed a shareholder derivative action in the United States District Court for the Central District of California. On January 19, 2023, John Solak filed a substantially similar shareholder derivative action in the United States District Court for the District of Delaware. Both derivative actions recite similar underlying facts as those alleged in the Securities Class Action Litigation. The actions, filed on behalf of the Company, name Serhat Gümrükcü and certain of the Company’s former directors as defendants. The actions also name the Company as a nominal defendant. The actions allege violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 and also set out claims for breach of fiduciary duty, contribution and indemnification, aiding and abetting, and gross mismanagement. Plaintiffs do not quantify any alleged injury, but seek damages, disgorgement, restitution, and other costs and expenses. On January 24, 2023, the United States District Court for the Central District of California stayed the Koenig matter pending resolution of the defendants’ anticipated motion to dismiss in the Securities Class Action Litigation. On April 4, 2023, the United States District Court for the District of Delaware stayed the Solak matter pending resolution of the defendants’ anticipated motion to dismiss in the Securities Class Action Litigation. On June 28, 2024, the United States District Court for the Central District of California denied defendants’ motion to dismiss the Securities Class Action Litigation. On October 23, 2024, the court in the Koenig matter stayed the case pending further order of the court. On January 10, 2025, the parties in the Koenig matter filed a joint status report requesting that all pending deadlines in the matter remain suspended. The parties’ deadline to file a joint status report in the Koenig matter is April 11, 2025. On October 28, 2024, the court in the Solak matter stayed the case for ninety (90) days. On January 29, 2025, the court in the Solak matter stayed the case for an additional ninety (90) days. The defendants have not yet responded to either complaint. The Company intends to contest these matters but expresses no opinion as to the likelihood of favorable outcomes. Management is unable to determine the likelihood of a loss, including a possible range of losses, if any, arising from this matter as of the reporting date.
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State Derivative Litigation. On October 20, 2022, Susan Midler filed a shareholder derivative action in the Superior Court of California, Los Angeles County, reciting similar underlying facts as those alleged in the Securities Class Action Litigation. The action, filed on behalf of the Company, names Serhat Gümrükcü and certain of the Company’s current and former directors as defendants. The action also names the Company as a nominal defendant. The action sets out claims for breaches of fiduciary duty, contribution and indemnification, aiding and abetting, and gross mismanagement. Plaintiff does not quantify any alleged injury, but seeks damages, disgorgement, restitution, and other costs and expenses. On January 20, 2023, the Court stayed the Midler matter pending resolution of the defendants’ anticipated motion to dismiss in the Securities Class Action Litigation. On June 28, 2024, the United States District Court for the Central District of California denied defendants’ motion to dismiss the Securities Class Action Litigation. On October 28, 2024, the court in the Midler matter stayed the case for ninety (90) days. On January 24, 2025, the court in the Midler matter stayed the case for an additional ninety (90) days. The parties’ deadline to file a joint status report in the Midler matter is April 28, 2025. The defendants have not yet responded to the complaint. The Company intends to contest this matter but expresses no opinion as to the likelihood of a favorable outcome. Management is unable to determine the likelihood of a loss, including a possible range of losses, if any, arising from this matter as of the reporting date.
On October 21, 2022, the Company filed a Complaint in the Superior Court of the State of California for the County of Los Angeles against Serhat Gümrükcü, William Anderson Wittekind (“Wittekind”), G Tech Bio, SG & AW Holdings, LLC, and SRI (collectively, the “Defendants”). The Complaint alleges that the Defendants engaged in a “concerted, deliberate scheme to alter, falsify, and misrepresent to the Company the results of multiple studies supporting its Hepatitis B and SARS-CoV-2/influenza pipelines.” Specifically, “Defendants manipulated negative results to reflect positive outcomes from various studies, and even fabricated studies out of whole cloth.” As a result of the Defendants’ conduct, the Company claims that it “paid approximately $25 million to Defendants and third-parties that it would not otherwise have paid.” On April 21, 2023, defendants Wittekind, G Tech, SG & AW Holdings, LLC, and SRI filed a demurrer with respect to some, but not all, of the Company’s claims, as well as a motion to strike. On September 6, 2023, the court denied in part and granted in part the pending motions. On September 7, 2023, the court entered a case management order setting the final status conference, trial, and other intervening deadlines.
On December 4, 2023, the Defendants answered the Company’s First Amended Complaint and G Tech and SRI filed a Cross-Complaint. In the Cross-Complaint, G Tech and SRI seek declaratory and injunctive relief related to certain agreements between G Tech, SRI, and the Company, including, inter alia, a declaration that the Framework Agreement, effective as of November 15, 2019, the Statement of Work & License Agreement, effective as of January 31, 2020, and the Statement of Work and License Agreement for Influenza and Coronavirus Indications, effective as of April 18, 2021, have been terminated and the Company has no rights to any license under such agreements. Trial was scheduled to begin on March 3, 2025. On November 14, 2024, the court vacated the March 3, 2025 trial date and set a trial setting conference for May 1, 2025. Discovery remains ongoing. The Company denies the allegations in Defendants’ cross claims and intends to vigorously defend against them while pursuing its claims against the Defendants.
On March 1, 2021, the Company’s former Chief Financial Officer, Robert Wolfe and his company, Crossfield, Inc., filed a Complaint in the U.S. District Court for the District of Vermont against the Company, Renovaro Biosciences Denmark ApS, and certain directors and officers. In the Complaint, Mr. Wolfe and Crossfield, Inc. asserted claims for abuse of process and malicious prosecution, alleging, inter alia, that the Company lacked probable cause to file and prosecute an earlier action, and sought millions of dollars of compensatory damages, as well as punitive damages. The allegations in the Complaint relate to an earlier action filed by the Company and Renovaro Biosciences Denmark ApS in the Vermont Superior Court, Orange Civil Division. On March 3, 2022, the court partially granted the Company’s motion to dismiss, dismissing the abuse of process claim against all defendants and all claims against Mark Dybul and Henrik Grønfeldt-Sørensen, the Company’s former Chief Executive Officer and former member of the Board of Directors, respectively. On November 29, 2022, the Company filed a motion for summary judgment with respect to the sole remaining claim of malicious prosecution. On August 24, 2023, the court denied the motion for summary judgment. On November 7, 2024, the Court reset the trial date for May 6, 2025. The Company denies the allegations set forth in the Complaint and will continue to vigorously defend against the remaining claim.
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On June 7, 2023, Weird Science LLC (“Weird Science”), Wittekind, the William Anderson Wittekind 2020 Annuity Trust, the William Anderson Wittekind 2021 Annuity Trust, the Dybul 2020 Angel Annuity Trust, and the Ty Mabry 2021 Annuity Trust (collectively, the “Trusts”) (collectively, “Plaintiffs”) filed a Verified Complaint against the Company in the Court of Chancery of Delaware. In the Verified Complaint, Plaintiffs alleged that the Company breached the February 16, 2018 Investor Rights Agreement between the Company, Weird Science, and RS Group ApS (the “Investor Rights Agreement”). According to the Verified Complaint, the Investor Rights Agreement required the Company to (i) notify all “Holders” of “Registrable Securities” at least 30 days prior to filing a registration statement and (ii) afford such Holders an opportunity to have their Registrable Securities included in such registration statement. Plaintiffs alleged that the Company breached these registration rights by failing to provide the required notice in connection with S-3 registration statements filed by the Company on July 13, 2020 and February 11, 2022. The Company moved to dismiss the Verified Complaint on September 15, 2023.
On December 4, 2023, in lieu of opposing the motion to dismiss, Plaintiffs filed a Verified First Amended Complaint (“FAC”). In the FAC, Plaintiffs assert claims against the Company and others for purported breaches of the Investor Rights Agreement, fraud, tortious interference with a contract, and several other torts. Plaintiffs seek compensatory, exemplary, and punitive damages, as well as certain declaratory relief, specific performance, and pre- and post-judgment interest, costs, and attorneys’ fees. The Company filed a motion to dismiss the FAC on December 18, 2023 and the court held a hearing on the Company’s motion to dismiss on November 15, 2024. At the hearing, the court dismissed (1) all claims brought on behalf of Wittekind and the Trusts, (2) the fraudulent concealment claim against the Company and others (without prejudice), and (3) the breach of contract claim against the Company related to a registration statement that was not filed in 2023. At the hearing, the court also found that punitive damages were not available to Plaintiffs. The court took the remaining issues briefed on the Company’s motion to dismiss under advisement. The Company denies Plaintiffs’ allegations and remaining claims and intends to vigorously defend against these claims.
On August 24, 2023, counsel on behalf of Weird Science, Wittekind, individually, and Wittekind, as trustee of the Trusts served a demand to inspect the Company’s books and records (the “Demand”) pursuant to Delaware General Corporation Law, § 220 (“Section 220”). The Demand seeks the Company’s books and records in connection with various issues identified in the Demand. The Company takes its obligations under Section 220 seriously and, to the extent that the requests are proper under Section 220, intends to comply with those obligations.
On January 19, 2024, Weird Science and Wittekind sent the Board of Directors a letter demanding it take corrective actions with respect to twenty-one issues identified therein. On February 27, 2024, Weird Science and Wittekind sent the Board of Directors a supplemental letter that expanded their demand for corrective actions to twenty-six issues. In response to these demand letters, the Board of Directors initially formed a Special Committee (“Special Committee”) of independent directors on February 29, 2024. The Special Committee retained Stradling Yocca Carlson & Rauth LLP as its counsel to investigate the issues identified in the demand letters. The Special Committee’s investigation is ongoing.
On January 23, 2024, Weird Science and Wittekind filed a shareholder derivative action in the United States District Court for the Central District of California against certain officers, directors, and investors of the Company, as well as other defendants, in connection with, inter alia, Weird Science and Wittekind’s demand for corrective action. Plaintiffs filed an amended complaint on June 21, 2024. The First Amended Verified Stockholder Derivative Complaint (“Derivative Complaint”) alleges, among other claims, violations of Section 13(d) and 14(a) and Rules 10b-5(a), 10b-5(c) and 14a-9 of the Exchange Act of 1934. The Derivative Complaint also includes claims of breach of fiduciary duty, corporate waste, unjust enrichment, and contribution/indemnification. Weird Science and Wittekind seek unspecified compensatory, exemplary, and punitive damages and certain injunctive relief. The Derivative Complaint names the Company as a nominal defendant. On July 19, 2024, certain of the director defendants, who had agreed to waive service of the summons and Derivative Complaint, filed a motion to dismiss the Derivative Complaint on a variety of procedural and substantive grounds. A hearing on the motion dismiss was held on October 3, 2024 and the court subsequently took the motion under submission. On October 22, 2024, the plaintiffs filed a notice of certain subsequent events that they allege relate to their pending motion to dismiss. On October 29, 2024, the court granted the director defendants’ motion to dismiss and dismissed the Derivative Complaint without prejudice, but also without leave to amend.
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On November 27, 2024, Weird Science and Wittekind filed a notice of appeal of the court’s decision granting the director defendants’ motion to dismiss. The appeal remains pending.
On June 21, 2024, the Company filed suit against Weird Science, Wittekind, and certain trusts in connection with the February 16, 2018 merger involving the Company and two companies closely associated with Gumrukcu. In the complaint, the Company alleges that Gumrukcu and others deliberately and fraudulently concealed a murder-for-hire scheme from the Company in order to induce the Company to enter into the merger agreement, which resulted in the defendants receiving shares and compensation. The Company asserts claims for fraudulent concealment, equitable fraud, unjust enrichment, and civil conspiracy and seeks, inter alia, equitable relief, including, but not limited to, return to the Company any shares received in connection with the merger, and damages. On October 1, 2024, the defendants moved to dismiss the complaint.
Item 1A. Risk Factors.
As a “smaller reporting company” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, the Company is not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Insider Trading Plans
During the quarter ended December 31, 2024, no director
or Section 16 officer
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Item 6. Exhibits.
Exhibits required by Item 601 of Regulation S-K:
| ** | Filed herewith. |
| *** | Furnished herewith. |
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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, thereunto duly authorized.
| Date: February 19, 2025 | RENOVARO INC. | |
| By: | /s/ David Weinstein | |
| David Weinstein | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| By: | /s/ Nathen Fuentes | |
| Nathen Fuentes | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this “Agreement”), dated as of December 19, 2024, by and between NATHEN FUENTES, residing at XXXXX (the “Senior Executive”), and RENOVARO, INC., a Delaware corporation with its mailing address located at 2080 Century Park East, 906, Los Angeles, CA 90067 (the “Company”).
R E C I T A L S :
WHEREAS, the Company is engaged in the business of biotechnology related to the detection, treatment or cure of infectious diseases, including the use of AI technology, and ancillary businesses or services related thereto (the “Business”);
WHEREAS, the Senior Executive is desirous of being employed by the Company and the Company is desirous of employing as the Senior Executive on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties contained herein, and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
| 1. | Employment; Term. The Company shall employ the Senior Executive, and the Senior Executive shall accept employment by the Company, upon the terms and provisions, and subject to the conditions, of this Agreement. The term of the Senior Executive’s |
employment hereunder shall commence on the date hereof (the “Employment Date”) on
terms and conditions reasonably satisfactory to the Senior Executive as set forth herein and shall terminate on the second (2nd) anniversary of the Employment Date (as the same may be extended in accordance with this Section 1 or terminated earlier as provided in
this Agreement, (the “Employment Term”)). This Agreement shall automatically renew
for successive one (1) year periods following the initial two (2) year Employment Term and any extensions thereof, if applicable, unless either party provides written notice to the other party not less than ninety (90) days prior to the end of the then-existing Employment Term, that such party does not desire the Employment Term to automatically renew, in which event this Agreement shall terminate as of the last day of the then-existing Employment Term.
| 2. | Position and Duties. |
| (a) | Position. The Company shall employ the Senior Executive, and the Senior Executive shall initially serve, as the Chief Financial Officer of the Company. The Senior Executive shall be responsible for overseeing and managing the operational affairs of the Business. |
| (b) | Duties; Other Organizations. During the Employment Term, the Senior Executive agrees to devote his full time and efforts exclusively on behalf of the Company and to competently, diligently and effectively discharge all of his duties hereunder. During the Employment Term, the Senior Executive shall not be prohibited in any way from participating in such educational, welfare, social, religious, charitable, civic, or other non- employment organizations, which do not interfere with the full-time employment hereunder and which do not violate any of provisions of this Agreement. The Senior Executive further agrees to comply fully with all reasonable company policies as they are in effect from time to time during the Employment Term. |
| (c) | Investments. Nothing in this Agreement shall prohibit the Senior Executive from making any investments in the securities of any entity or business enterprise; provided, however, that during the Employment Term, the Senior Executive shall not: (i) make any investments (other than “passive investments” as defined below) in the securities of any entity or business enterprise which engages in a business that competes directly with the Business; (ii) manage, supervise, run or direct any entity or business enterprise other than the Company or (iii) maintain his various securities licenses with a registered broker- dealer and act as a sales representative therewith. An investment shall be considered a “passive investment” to the extent that such securities (i) are actively traded on a United States national securities exchange, on the NASDAQ National Market System or Small Cap Market System, on the OTC Bulletin Board, or on any foreign securities exchange, and (ii) represent, at the time such investment is made, less than five percent (5%) of the aggregate voting power of such entity or business enterprise. |
| 3. | Base Salary. |
| (a) | Base Salary. During the Employment Term, the Company shall pay to the Senior Executive an annual salary of $280,000 (the “Base Salary”). The Base Salary shall be payable in equal bi-weekly installments during any year of the Employment Term in accordance with the Company’s normal payroll procedures; provided, however, that such |
payments shall be subject to withholding for applicable taxes and any other amounts generally withheld from compensation paid to salaried senior executives of the Company.
| (b) | Annual Bonus. With respect to each calendar year during the Term, Senior Executive shall be eligible to earn an annual discretionary cash bonus (the “Annual Bonus”), with a target Annual Bonus of up to $40,000 (the “Target Bonus”), subject to standard payroll deductions and withholdings, based on the Company’s achievement of certain performance goals as determined by the Board. The terms and criteria applicable to the Annual Bonus are as set forth on Exhibit A hereto. The Company shall pay the Annual Bonus to Senior Executive in the following calendar year, but no later than March 15th of such year, subject to Senior Executive’s continued employment on the date such Annual Bonus is paid. For the calendar year in which the Effective Date occurs, Senior Executive’s Annual Bonus shall be pro-rated based on the number of days remaining in the calendar year following the Effective Date. |
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| (c) | Equity Grant. The Company shall grant to the Employee an equity incentive grant in the amount of 250,000, 5 year stock options to purchase the common stock of the Company (the “Renovaro Stock”) vesting ratably on a quarterly basis over a period of eight quarters, commencing on the Employment Date, at the closing price of Renovaro Stock on the Employment Date. Additionally, the Company shall grant to the Senior Executive a discretionary equity grant on the first anniversary of the Employment Date (the “Discretionary Equity Grant”) in such amount and on such terms as determined in the sole discretion of the Company. |
| 4. | Business Expenses. |
| (a) | Business Expenses. The Company shall reimburse the Senior Executive for all business- related expenses including but not limited to computer and carrier service charges and Bloomberg, business travel, meals and entertainment expenses, that are reasonable and necessary to the conduct by the Senior Executive of the performance of his duties in connection with the conduct of the Business; provided that if upon request of the Company, the Senior Executive is not able to provide written, detailed substantiation that any expenses the Company may deny reimbursement of the expenses in accordance with then current business expense policy of the Company. |
| 5. | Benefits; Indemnification and D&O Insurance. |
| (a) | Certain Benefits. During the Employment Term the Company will pay for the Senior Executive and his family’s health insurance. Initially this will entail paying for the current insurance that is in effect for the Senior Executive and his family. The Senior Executive may (subject to applicable eligibility requirements) participate in such insurance and health and medical benefits as are generally made available to the senior executives of the Company pursuant to such plans as are from time to time maintained by the Company; provided, however, that the Company shall implement and maintain a health and medical plan as soon after the Employment Date as is reasonably practical and maintain such throughout the Employment Term. The Senior Executive acknowledges that his participation in any benefit plan may require the Senior Executive’s co-payment of a periodic premium as a deduction from his salary. |
| (b) | Vacation and Paid Time off. During the Employment Term, the Senior Executive shall be entitled to four (4) weeks of paid time off per calendar year (as prorated for partial years) (the “Annual Vacation Grant”), during the term in accordance with the Company’s policy. The full Annual Vacation Grant will be available at the beginning of each calendar year. Unused vacation shall not carry over from year to year nor shall any unused vacation relating to a prior year be paid out upon termination. Unused vacation in respect of the year of termination will be paid out upon termination of the Executive’s employment on the Termination Date of the Senior Executive’s employment. |
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| (c) | Other Benefits. During the Employment Term, the Senior Executive shall be entitled to receive such other benefits as may be provided to other similarly situated senior executives of the Company. |
| 6. | Covenant Not to Solicit. |
| (a) | No Solicitation. The Senior Executive shall not, during the Employment Term and the twenty-four (24) month period following the Employment Term (the “Restriction Period”) directly or indirectly, solicit, entice, persuade, induce or cause any employee, officer, manager, director, consultant, agent or independent contractor of the Company to terminate his, her or its employment, consultancy or other engagement by the Company to become employed by or engaged by any individual, entity, corporation, partnership, association, or other organization (collectively, “Person”) other than the Company, or approach any such employee, officer, manager, director, consultant, agent or independent contractor for any of the foregoing purposes, or authorize or assist in the taking of any of such actions by any Person. |
| (b) | Prohibited Actions. The Senior Executive shall not, during the Restriction Period, directly or indirectly, solicit, entice, persuade, induce or cause: |
| (i) | any Person who either was a customer of the Company at any time during the Employment Term or is a customer of the Company at any time during the Restriction Period; or |
| (ii) | any lessee, vendor or supplier to, or any other Person who had or has a business relationship with, the Company at any time during the Employment Term or the Restriction Period; |
(the Persons referred to in items (i) and (ii) above, collectively, the “Prohibited Persons”) to enter into a business relationship with any other Person for the same or similar services, activities or goods that any such Prohibited Person purchased from, was engaged in with or provided to, the Company or to reduce or terminate such Prohibited Person’s business relationship with the Company; and the Senior Executive shall not, directly or indirectly, approach any such Prohibited Person for any such purpose, or authorize or assist in the taking of any of such actions by any Person.
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| (c) | Terms. For purposes of this Section 6, the terms “employee”, “consultant”, “agent”, and “independent contractor” shall include any Persons with such status at any time during the six (6) months preceding any solicitation in question. |
| (d) | Referrals. Nothing in this Section 6 shall be interpreted as prohibiting the Senior Executive from referring business to a consultant, agent, lessee, vendor or supplier of the Company so long as the consultancy or other engagement with the Company is not adversely affected thereby. |
| 7. | Non-Competition. Except as otherwise provided in this Agreement, the Senior Executive shall not, anywhere within the Restricted Territory, as hereinafter defined, directly or indirectly, alone or in association with any other Person, directly or indirectly, (i) acquire, or own in any manner, any interest in any Person that engages in the Business or that engages in any business, activity or enterprise that competes with any aspect of the Business, or (ii) be interested in (whether as an owner, director, officer, partner, member, lender, shareholder, vendor, consultant, employee, advisor, agent, independent contractor or otherwise), or otherwise participate in the management or operation of, any Person that engages in any business, activity or enterprise that competes with any aspect of the Business. For purposes hereof, Restricted Territory is global. |
| 8. | Protection of Confidential Information. The Senior Executive acknowledges that prior to the Employment Date the Senior Executive has had access to, and during the course of the Senior Executive’s employment hereunder will have access to, significant Confidential Information (defined below). During the Restriction Period, (i) the Senior Executive shall maintain all Confidential Information in strict confidence and shall not disclose any Confidential Information to any other Person, except as necessary in connection with the performance of the Senior Executive’s duties and obligations under this Agreement, or as the Senior Executive may be compelled to disclose by law and (ii) the Senior Executive shall not use any Confidential Information for any purpose whatsoever except in connection with the performance of the Senior Executive’s duties and obligations under this Agreement. |
For purposes of this Agreement, “Confidential Information” shall mean any and all information pertaining to the Company and the Business, whether such information is in written form or communicated orally, visually or otherwise, that is proprietary, non-public or relates to any trade secret, including, but not limited to, (i) information, observations and data obtained by the Senior Executive while employed by the Company concerning the Business, (ii) products or services, (iii) fees, costs and pricing structures, (iv) all business records and business strategies, (v) designs and analyses, (vi) drawings, photographs and reports, (vii) computer software, including operating systems, applications and program listings, (viii) flow charts, manuals and documentation, (ix) data bases, (x) accounting and business methods, (xi) inventions, devices, new developments, methods and processes, whether patentable or
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unpatentable and whether or not reduced to practice, (xii) customers, suppliers, clients and customer, supplier and client lists, (xiii) other copyrightable works, (xiv) marketing plans and trade secrets, and (xv) all similar and related information in whatever form. Notwithstanding the foregoing, “Confidential Information” shall not include information that (i) is or becomes generally available to, or known by, the public through no fault of the Senior Executive, or (ii) is independently acquired or developed by the Senior Executive without violating any of his obligations under this Agreement.
| 9. | Inventions. The Senior Executive shall disclose promptly to the Company any and all conceptions and ideas for inventions, improvements, and valuable discoveries, whether patentable or not, which are conceived or made by the Employee solely or jointly with another during the period of employment or within one (1) year thereafter and which are related to the business or activities of the Company. The Senior Executive hereby assigns and agrees to assign all his interest therein to Company or its nominee. Whenever requested by the Company, the Senior Executive shall execute any and all applications, assigns or other instruments that the Company shall deem necessary to apply for and obtain Letters of Patents of the United States or any foreign country or to otherwise protect the Company’s interest therein. These obligations shall continue beyond termination of employment with respect to inventions, improvements and valuable discoveries, whether patentable or not, conceived, made or acquired by the Senior Executive during the period of employment or within one year thereafter, and shall be binding upon the Senior Executive’s heirs, assigns, executors, administrators and other legal representatives. |
| 10. | Return of Property. All correspondence, reports, charts, products, records, designs, patents, plans, manuals, sales and marketing material, memorandum, advertising materials, customer lists, distributor lists, vendor lists, telephones, beepers, portable computers, and any other such data, information or property collected by or delivered to the Senior Executive by or on behalf of the Company, their representatives, customers, suppliers or others and all other materials compiled by the Senior Executive which pertain to the business of the Company shall be and shall remain the property of the Company and shall be delivered to the Company promptly upon its request at any time and without respect upon completion or other termination of the Senior Executive’s employment hereunder for any reason. |
| 11. | Representations of the Senior Executive. The Senior Executive represents and warrants to the Company that he is not subject to any restriction or non-competition covenant in favor of a former employer or any other person or entity, and that the execution of this Agreement by the Senior Executive and his provision of services to the Company and the performance of his obligations hereunder will not violate or be a breach of any agreement with a former employer or any other person or entity. Further, the Senior Executive agrees to indemnify the Company for any claim, including but not limited to attorneys’ fees and expenses of investigation, by any such third party that such third party may now have or may hereafter have against the Company based upon any noncompetition agreement, invention or secrecy agreement between the Senior Executive and such third party. |
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| 12. | Certain Additional Agreements. |
| (a) | Legitimate Interest. The Senior Executive agrees that it is a legitimate interest of the Company and reasonable and necessary for the protection of the goodwill and business of the Company, which are valuable to the Company, that the Senior Executive make the covenants contained in Sections 6, 7, 8, 9 and 10 (the “Selected Covenants”). |
| (b) | Fair and Reasonable. The parties acknowledge that (i) the type and periods of restriction imposed in the Selected Covenants are fair and reasonable and are reasonably required to protect and maintain the proprietary and other legitimate business interests of the Company, as well as the goodwill associated with the Business conducted by the Company, (ii) the Business conducted by the Company extends throughout the United States, and (iii) the time, scope, geographic area and other provisions of the Selected Covenants have been specifically negotiated by sophisticated commercial parties represented by experienced legal counsel. |
| (c) | Illegality. In the event that any covenant contained in this Agreement, including, without limitation, any of the Selected Covenants shall be determined by any court of competent jurisdiction to be illegal, invalid or unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, (i) such covenant shall be interpreted to extend over the maximum period of time for which it may be legal, valid and enforceable, as applicable, and/or over the maximum geographical area as to which it may be legal, valid and enforceable, as applicable, and/or to the maximum extent in all other respects as to which it may be legal, valid and enforceable, as applicable, all as determined by such court making such determination, and (ii) in its reduced form, such covenant shall then be legal, valid and enforceable, as applicable, but such reduced form of covenant shall only apply with respect to the operation of such covenant in the particular jurisdiction in or for which such adjudication is made. It is the intention of the parties that such covenants shall be enforceable to the maximum extent permitted by applicable law. |
| 13. | Specific Performance. The Senior Executive acknowledges that any breach or threatened breach of the covenants contained in the Selected Covenants will cause the Company material and irreparable damage, the exact amount of which will be difficult to ascertain and that the remedies at law for any such breach or threatened breach will be inadequate. Accordingly, the Senior Executive agrees that the Company shall, in addition to all other available rights and remedies (including, but not limited to, seeking such damages as either of them can show it has sustained by reason of such breach), be entitled to specific performance and injunctive relief in respect of any breach or threatened breach of any of the Selected Covenants, without being required to post bond or other security and without having to prove the inadequacy of the available remedies at law or irreparable harm. |
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(a) Notwithstanding anything to the contrary in this Agreement to the contrary, in the event the Company is declared to have been in material default of this Agreement by final arbitration in a forum selected by the parties or final adjudication in any court, Sections 6 and 7 of this Agreement shall terminate and not be operative for any period of time thereafter.
| 14. | Termination. |
| (a) | For Cause. The Company shall have the right to terminate the Senior Executive’s employment under this Agreement at any time for Cause (defined below) upon written notice to the Senior Executive. In the event the Senior Executive’s employment hereunder is terminated by the Company for Cause, the Senior Executive shall be entitled to receive, and the Company shall pay the Senior Executive in accordance with its normal payroll procedures, (i) the Base Salary owing to the Senior Executive hereunder through the date of termination; and (ii) any business expenses which were properly reimbursable to the Senior Executive pursuant to Section 4 hereof through the date of termination. The Senior Executive shall be entitled to no further payment upon such termination. The Senior Executive acknowledges and agrees that each of the factors which comprise the definition of “Cause” constitutes, on an individual basis, adequate and sufficient grounds for termination of the Senior Executive’s employment with the Company. |
For purposes of this Agreement, “Cause” shall mean:
| (i) | The commission of any act of dishonesty by the Senior Executive with respect to the Company, including, but not limited to, misappropriation of funds or any property of the Company; |
| (ii) | The Senior Executive’s refusal to perform assigned duties and responsibilities as assigned by the Company as determined by the Company using reasonable business judgment; |
| (iii) | Gross insubordination by the Senior Executive as determined in by the Company using reasonable business judgment; |
| (iv) | Any breach by the Senior Executive of any covenant, condition or term contained in this Agreement or any other agreement(s) the Senior Executive may from time to time have with the Company, and the Senior Executive’s failure to cure such breach within fifteen (15) days of the Senior Executive’s receipt of written notice with respect thereto as determined by the Company using reasonable business judgment; |
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| (v) | The Senior Executive’s material violation of policies of the Company (including, without limitation, regarding equal employment opportunity, employment discrimination, sexual or other forms of harassment and/or retaliation), which violation, in the judgment of the Company (using reasonable business judgment), is not or cannot reasonably be expected to be cured within fifteen (15) days after written notice is given to the Senior Executive by the Company; |
| (vi) | Any illegal drug or illegal substance use or abuse, any addiction or substantial dependence on the part of the Senior Executive on any legal or illegal drug, legal or illegal substance or alcohol that, as determined by the Company using reasonable business judgment, impairs, or could reasonably be expected to impair, the performance of the Senior Executive’s duties or obligations as set forth in this Agreement, or which is, or could reasonably be expected to become, materially injurious to the reputation or business of the Company, other than the proper use of medication prescribed by a doctor; |
| (vii) | Any conviction of the Senior Executive of, or no contest plea by the Senior Executive to, a crime which is a felony or a misdemeanor involving an act of moral turpitude, or a misdemeanor committed in connection with his employment by the Company; |
| (viii) | The Senior Executive’s failure to perform the financial operations and management of the Company in accordance with any and all standards, procedures and/or guidelines or manuals as set forth by the Company from time to time. |
| (b) | Without Cause. The Company shall have the right to terminate the Senior Executive’s employment hereunder without Cause at any time upon thirty (30) days prior written notice to the Senior Executive. If the Company terminates the Senior Executive’s employment hereunder without Cause, the Senior Executive shall be entitled to receive, and the Company shall pay the Senior Executive, in accordance with its regular payroll policy, (i) Base Salary owing to the Executive through date of termination plus Base Salary for six (6) months (the period for which Base Salary shall be owed to the Executive under this Section 14(b) shall be referred to herein as the “Severance Period”); any business expenses which were properly reimbursable to the Senior Executive pursuant to Section 4 hereof through the date of termination; and (iv) during the Severance Period, the health, medical insurance and other benefits which are provided to the Senior Executive in Section 5 hereunder. In addition, if the Company terminates the Senior Executive’s employment hereunder without Cause, any options, equity or other compensation awards, granted by the Company to the Senior Executive which have not vested or are not yet exercisable shall automatically vest and become immediately exercisable by the Senior Executive commencing on the date the Senior Executive is terminated without Cause and for a period of five (5) years following such date of termination. |
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| (c) | Good Reason. The Senior Executive shall be entitled to terminate his employment with the Company upon notice to the Company of his intent to terminate so within thirty (30). required to be provided by this Section 14(c) within fifteen (15) days following such notice. If the Senior Executive terminates his employment pursuant to this Section 14(c), such termination shall be deemed to be a termination by the Company without Cause, with the same effect and affording to the Senior Executive the same rights and benefits as otherwise provided in this Agreement upon a termination of the Executive’s employment by the Company without Cause as provided in Section 14(b) hereof. |
For purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following events:
| (i) | The Senior Executive is not retained as the CFO, even if the Senior Executive is allowed to continue in Company’s employ; |
| (ii) | There is a sale of substantially all of the assets or merger of the Company in which the Company is not the controlling entity; |
| (iii) | The Company materially reduces the Senior Executive’s duties and responsibilities hereunder; |
| (iv) | Any reduction in the Base Salary owed to the Senior Executive; |
| (v) | The Company fails to perform or observe any of its material obligations to the Senior Executive under this Agreement including, without limitation, by failing to provide or cause the provision of, any compensation or benefits to the Senior Executive that it is obligated to provide hereunder; or |
| (vi) | Fraudulent or unethical behavior on the part of the Company. |
(d) Voluntary. The Senior Executive shall be entitled to voluntarily terminate his employment with the Company prior to the end of the Employment Term upon ninety (30) days prior written notice from the Senior Executive to the Company. If the Senior Executive voluntarily terminates his employment hereunder, the Senior Executive shall be entitled to receive, and the Company shall pay the Senior Executive in accordance with its normal payroll procedures, (i) the Base Salary owing to the Senior Executive hereunder through the date of termination; and (i1) any business expenses which were properly reimbursable to the Senior Executive pursuant to Section 4 hereof through the date of termination. The Senior Executive shall be entitled to no further payment upon such termination. Notwithstanding the foregoing, if the Company upon receipt of Senior Executive’s written notice of voluntary termination, desires to terminate the Senior Executive’s employment prior to the expiration of the 30 day notice period for any reason and at any time, then the Company shall pay the Senior Executive his Base Salary for the time frame between the actual termination date and the 90th day from the date of Senior Executive’s written notice of voluntary termination. If the Senior Executive voluntarily terminates his employment hereunder, it shall not be deemed a breach of this Agreement by the Senior Executive or a violation of the Senior Executive’s duties or obligations hereunder.
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| 15. | Miscellaneous. |
| (a) | Notices. All notices, demands, consents, requests, instructions and other communications to be given or delivered or permitted under or by reason of the provisions of this Agreement or in connection with the transactions contemplated hereby shall be in writing and shall be deemed to be delivered and received by the intended recipient as follows: (i) if personally delivered, on the business day of such delivery (as evidenced by the receipt of the personal delivery service), (ii) if mailed certified or registered mail return receipt requested, four (4) business days after being mailed, (iii) if delivered by overnight courier (with all charges having been prepaid), on the business day of such delivery (as evidenced by the receipt of the overnight courier service of recognized standing), or (iv) if delivered by facsimile transmission, on the business day of such delivery if sent by 5:00 p.m. in the time zone of the recipient, or if sent after that time, on the next succeeding business day (as evidenced by the printed confirmation of delivery generated by the sending party’s facsimile machine). If any notice, demand, consent, request, instruction or other communication cannot be delivered because of a changed address of which no notice was given (in accordance with this Section 15(a)), or the refusal to accept same, the notice, demand, consent, request, instruction or other communication shall be deemed received on the second business day the notice is sent (as evidenced by a sworn affidavit of the sender). All such notices, demands, consents, requests, instructions and other communications will be sent to the addresses set forth in the preamble to this agreement or to such other address as any party may specify by notice given to the other party in accordance with this Section 15(a). |
| (b) | Amendment. This Agreement may not be modified, amended, altered or supplemented, except by a written agreement executed by each of the parties hereto. |
| (c) | Entire Agreement. This Agreement contains the entire understanding and agreement of the parties relating to the subject matter hereof and supersedes all prior and/or contemporaneous understandings and agreements of any kind and nature (whether written or oral) among the parties with respect to such subject matter, all of which are merged herein. |
| (d) | Waiver. Any waiver by a party hereto of any breach of or failure to comply with any provision or condition of this Agreement by any other party hereto shall not be construed as, or constitute, a continuing waiver of such provision or condition, or a waiver of any other breach of, or failure to comply with, any other provision or condition of this Agreement, any such waiver to be limited to the specific matter and instance for which it is given. No waiver of any such breach or failure or of any provision or condition of this Agreement shall be effective unless in a written instrument signed by the party granting the waiver and delivered to the other party hereto in the manner provided for hereunder in Section 15(a). No failure or delay by any party to enforce or exercise its rights hereunder shall be deemed a waiver hereof, nor shall any single or partial exercise of any such right or any abandonment or discontinuance of steps to enforce such rights, preclude any other or further exercise thereof or the exercise of any other right. |
| 16. | Section 409 (A) |
1. The parties agree that this Agreement shall be interpreted to comply with or be exempt from Section 409A of the Code and the regulations and authoritative guidance promulgated thereunder to the extent applicable (collectively, “Section 409A”), and all provisions of this Agreement shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A. In no event whatsoever will the Company, any of its affiliates or any of their respective directors, officers, agents, attorneys, employees, executives, shareholders, investors, members, managers, trustees, fiduciaries, representatives, principals, accountants, insurers, successors or assigns be liable for any additional tax, interest or penalties that may be imposed on Senior Executive under Section 409A or any damages for failing to comply with Section 409A.
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2. Six-Month Delay for Specified Employees. If any payment, compensation or other benefit provided to Executive in connection with the termination of Executive’s employment is determined, in whole or in part, to constitute “nonqualified deferred compensation” within the meaning of Section 409A and Executive is a specified employee as defined in Section 409A(2)(B)(i) of the Code, no part of such payments shall be paid before the day that is six (6) months plus one (1) day after the date of termination or, if earlier, ten business days following Executive’s death (the “New Payment Date”). The aggregate of any payments that otherwise would have been paid to Executive during the period between the date of termination and the New Payment Date shall be paid to Executive in a lump sum on such New Payment Date. Thereafter, any payments that remain outstanding as of the day immediately following the New Payment Date shall be paid without delay over the time period originally scheduled, in accordance with the terms of this Agreement.
3. Termination as Separation from Service. A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits subject to Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A, and for purposes of any such provision of this Agreement, references to a “resignation,” “termination,” “terminate,” “termination of employment” or like terms shall mean separation from service.
4. Payments for Reimbursements, and In-Kind Benefits. All reimbursements for costs and expenses under this Agreement shall be paid in no event later than the end of the calendar month in which Executive incurs such expense. With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (ii) the amount of expenses eligible for reimbursements or in-kind, benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year.
5. Payments Within Specified Number of Days. A payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the specified payment window.
6. Installments as Separate Payment. For purposes of Section 409A, Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.
| 17. | Governing Law; Jurisdiction. |
| (a) | Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made and to be performed in that state, without regard to any of its principles of conflicts of laws or other laws that would result in the application of the laws of another jurisdiction. |
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| (b) | Jurisdiction. Each of the parties unconditionally and irrevocably consents to the exclusive jurisdiction of the state or federal courts of the State of Delaware with respect to any suit, action or proceeding arising out of or relating to this Agreement, and each of the parties hereby unconditionally and irrevocably waives any objection to venue in any such court or to assert that any such court is an inconvenient forum, and agrees that service of any summons, complaint, notice or other process relating to such suit, action or other proceeding may be effected in the manner provided in Section 15(a) hereof. Each of the parties hereby unconditionally and irrevocably waives the right to a trial by jury in any such action, suit or other proceeding. |
| 18. | Binding Effect, No Assignment, etc. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective legal representatives, heirs, estate, successors and permitted assigns. Neither this Agreement nor any right, interest or obligation hereunder may be assigned by any party hereto without the prior written consent of the other party, and any attempt to do so shall be void and of no force and effect, except (i) assignments and transfers by operation of law and (ii) that the Company may assign any or all of its respective rights, interests and obligations hereunder to any purchaser of a majority of the issued and outstanding capital stock of the Company or a substantial part of the assets of the Company. |
| 19. | Third Parties. Nothing herein is intended or shall be construed to confer upon or give to any Person, other than the parties hereto (or persons set forth in Section 17), any rights, privileges or remedies under or by reason of this Agreement. |
| 20. | Headings. The section headings contained in this Agreement are inserted for reference purposes only and shall not affect in any way the meaning, construction or interpretation of this Agreement. Any reference to the masculine, feminine, or neuter gender shall be a reference to such other gender as is appropriate. References to the singular shall include the plural and vice versa. |
| 21. | Counterparts. This Agreement may be executed in two (2) or more counterparts (including by facsimile signature or electronic (e.g. PDF)), which shall constitute a legal and valid signature), and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, and all of which, when taken together, shall constitute one and the same document. This Agreement shall become effective when one or more counterparts, taken together, shall have been executed and delivered by all of the parties. |
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written.
| RENOVARO, INC. | ||
| By: |  | |
| Name: David Weinstein | ||
| Title: CEO | ||
| EXECUTIVE | ||
 | ||
| Nathen Fuentes |
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EXHIBIT 10.3
EMPLOYMENT AGREEMENT FOR DEFINITE PERIOD
THE UNDERSIGNED
| 1. | GEDI CUBE B.V., a private company with limited liability, incorporated and registered at the Dutch Chamber of Commerce with number 91275237, with its registered office at Fred. Roeskestraat 115, 1076EE Amsterdam, hereby duly represented by Mr. D. Weinstein, hereinafter referred to as “Employer”, and |
| 2. | Maurice E.W.M. van Tilburg, born on 31 May 1971, with Dutch passport XXXXX, is with working permit for the European Union, residing at XXXXX, hereinafter referred to as “Employee”. |
Employer and Employee together hereinafter mention as “Parties”.
CONSIDERING THAT
| • | Employee has made spoken agreements with Employer’s to come to employment for a definite time and Parties wish to bring their agreements to this written (labor) Agreement. |
HEREBY AGREE AS FOLLOWS
ARTICLE 1: COMMENCEMENT AND TERMS
| 1. | Employee will take employment at Employer’s for a definite Period from 14 December 2024 |
| 2. | This Agreement may be terminated by either party effective from the end of a calendar month by giving notice in writing, with due observance of a thirty (30) day notice period. |
| 3. | This Agreement will end without any prior notice of termination being required, on 31 December 2026. |
| 4. | Employee agrees that Employer may provide all information regarding this employment and this Agreement, at any time, electronically based on article 7:655 of the DCC. |
| 5. | Employee declares that he will, in case he deems necessary, actively, contact Employer in case of any, further, questions about his employment. |
| 6. | This Agreement is not an agreement as in article 7:690 of the DCC. |
ARTICLE 2: NO COLLECTIVITY
No collective labor contract and/or general terms and conditions of employment apply to this employment Agreement.
ARTICLE 3: POSITION AND DUTIES
| 1. | In the context of this Agreement the Employee shall hold the position of Chief Executive Officer (CEO) and as such the Employee shall be responsible for the scope of work outlined by the CEO of the parent company Renovaro Inc. and will perform all the necessary work related to that position, which position of Employee is further defined in the Personnel Handbook of Employer, of which Employer handed a copy to Employee and of which position all relevant details are clear to Employee. |
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| 2. | Employee shall report directly to and shall be accountable the CEO of Parent Company of Employer, David Weinstein, and will strictly and properly follow his instructions in alignment with the Executive Board of Renovaro Inc. |
| 3. | Employee undertakes to do and to refrain from doing anything and everything that can be expected from a diligent employee, to devote all his knowledge and skills for Employer’s benefit and to promote Employer’s interests to the best of his knowledge and ability. |
| 4. | With observance of article 21, Employer is entitled to make changes to Employee’s position and to modify the terms of his employment accordingly. |
| 5. | Employer may require Employee to also perform activities other than those which are part of the normal exercise of the function, if and insofar as these other activities can reasonably be required by Employer. |
ARTICLE 4: LOCATION
| 1. | Employee’s work location is Employer’s office in Amsterdam. |
| 2. | At Employer’s request, Employee undertakes to perform his work at another working-office of Employer at a different location, if necessary, within reasonability. |
ARTICLE 5: WORKING HOURS
| 1. | Employee will work for 40 (fourty) hours per week at Employer, divided over 5 (five) days. |
| 2. | The work is performed by Employee during the normal business hours of Employer, which are always (to be) determined by Employer. |
| 3. | ln connection with Employee’s position, in appropriate cases Employee will also be required to perform his work outside the working hours that normally apply for him. This has been considered when Employcc·s salary was determined. and thus Employee will not be entitled to any payment of any compensation for work that is performed outside the working hours that normally apply for him. |
ARTICLE 6: SALARY
| 1. | Employee receives and will receive a gross base salary in the amount of Euro €22,080 per month. This salary, less statutory deductions, will be paid monthly towards the end of a month into a bank account designated by Employee. |
| 2. | With respect to each calendar year during the Term, Senior Executive shall be eligible to earn an annual discretionary cash bonus (the “Annual Bonus’”). with a target Annual Bonus of up to Euro €96,000 subject to standard payroll deductions and withholdings, based on the Company’s achievement of certain performance goals as determined by the Board. The terms and criteria applicable to the Annual Bonus will be formally communicated as soon as possible. |
| 3. | With a view to Article 7:626, paragraph 4, of the DCC, Employee declares to agree that his salary slip can also be presented electronically. |
| 4. | Employee will be entitled to participate in the company share option plan which will be defined by the Board of Renovaro Inc. |
ARTICLE 7: PENSION
A collective pension plan administered by A.S.R. NEDERLAND as laid down in the “GEDI CUBE B.V. pension settlement document” applies at Employer. Employee will be a participant in this plan if and insofar as Employee is in compliance with the terms and conditions stipulated in the plan, Employee will have the rights and obligations as stipulated in the description of the pension plan from time to time.
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ARTICLE 8: EXPENSES AND EDUCATION
| 1. | Employer will reimburse Employee for business expenses that Employee incurs at the request and on behalf of Employer, after Employee has submitted the relevant receipts, invoices and proof of payment. Expenses must be declared within 30 (thirty) days after the time at which the expenses in question have been incurred. After that date, Fmployee’s right to business expenses reimbursement lapse. Employee must receive prior written permission from Employer before incurring any expenses that exceed the amount of EUR 100 (hundred Euro). |
| 2. | Employee is not entitled to any allowance or reimbursement of costs in the event of illness lasting 30 (thirty) days or longer, termination of employment or suspension. |
ARTICLE 9: HOLIDAY ALLOWANCE
| 1. | Based on the mentioned working hours, Employee will be entitled to 20 (twenty) working-days of holiday per year, based on full pay. |
| 2. | Employer is entitled to appoint 4 (four) days of the days of holiday per year as mandatory. |
| 3. | Employer determines the start and the end of a/the holiday after consultation with Employee. |
| 4. | If Employee intends to take more than 3 (three) weeks of vacation, he must submit a written request to that effect to Employer. Employer will indicate whether there are any objections. |
| 5. | In the event of incapacity for work, Employee does not accrue vacation days. |
| 6. | Holiday entitlements not taken up lapse on the basis of the statutory provisions or can, at Employer’s discretion, be paid out after the expiry of a calendar year. |
| 7. | Employee is entitled to a holiday allowance which is equal to 8% (eight percent) on top of the gross salary received in total in the 12 (twelve) months preceding the month of payment. Payment will be made annually in the month of May unless Employee requests for this to be paid monthly. In the event that this Agreement is terminated prematurely the holiday allowance will be due pro rata. |
| 8. | Upon termination of this Agreement, settlement of too many/few holiday hours taken, and too many/little paid holiday allowance will be made by deduction from or payment from the last monthly salary, all pro-rata of the number of months worked in the period concerned. |
| 9. | Article 7:640a of the DCC is applicable. |
ARTICLE 10: SUSPENSION
| 1. | Employer reserves the right to suspend Employee (to non-activity) with retention of salary. |
| 2. | In the event of suspension, Employee is not obliged to remain available to perform work for Employer, however, on pain of Employer’s obligation to continue to pay salary, Employee is not free to perform work for third parties during the time that he should normally be available to perform work for Employer. |
| 3. | Employer undertakes to proceed to suspension only with a written statement of reasons. |
| 4. | Employer is always authorized to withdraw the suspension, in which case Employee is obliged to resume the agreed work at Employer’s first demand. |
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ARTICLE 11: ILLNESS/INCAPACITY
| 1. | In the event that Employee is disabled for work due to illness during the first 4 weeks Employer will, only insofar and to the extent that a statutory obligation applies, continue paying 100 % of Employee’s current (of: last) salary as stipulated in articles 4 and 9: 70% during the following 98 weeks. Payments will continue to be made only until the end of the employment (in the event that that is earlier). The benefits that Employee receives under social security laws and/or benefits under any other insurance taken out by Employer with respect to occupational disability will be deducted from the payments made on the ground of this article, the foregoing insofar as Employee receives such benefits directly. As of February 4, 2025, no illness has been disclosed. |
| 2. | On pain of forfeiture of the entitlement to continued payment of salary pursuant to this article (in addition or as a supplement to his statutory obligations) the Employee must strictly comply with the instructions and guidelines given by or on behalf of the Employer (with which the Employee hereby declares that he is familiar) and the Employee must cooperate with any medical examinations in this respect if the Employee is requested to do so. Forfeiture of the right to continued payment of salary as provided for above will not preclude the application of other sanctions in this respect. |
| 3. | The foregoing provisions are without prejudice to the Employer’s right to invoke article 7:629 of the DCC to suspend payment of salary. |
| 4. | Benefits that Employee receives under social security laws and/or benefits under any other insurance taken out by Employer with respect to occupational disability will be deducted from the payments made on the ground of this article, the foregoing insofar as Employee receives such benefits directly. |
| 5. | During a period of leave as determined in the “Wet Arbeid en Zorg”, Employee is entitled to the daily wage referred to in that Act. For all forms of paid leave of/and absence, Employer refers to the mentioned Personnel Handbook and the DCC. |
| 6. | If a third party has caused Employee’s incapacity for work/illness, Employee must report this to Employer immediately in connection with Employer’s rights to recover from a third party. On first request of Employer, Employee will provide all information that Employer needs to recover from this third party, including all rights of recourse of Employer according to article 6:107a of the DCC. |
| 7. | Employer is always authorized to amend these regulations as far as the law allows. |
| 8. | Employee declares that he is aware of and agrees with the regulations laid down by the Employer in connection with reporting sick and checking. |
| 9. | The above obligations apply regardless of the way this Agreement ends. |
ARTICLE 12: PROPERTY
| 1. | All (property of) items that are made available by Employer to Employee are and remain the property of Employer and must be made available to Employer at the end of this Agreement, or so much earlier than is required by Employer. Employee is prohibited to use these items for private use other than with the explicit permission of Employer. |
| 2. | Employee is not allowed to keep any property of any items of Employer for the benefit of any claim, whether alleged or not. Employee waives any right of retention. |
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ARTICLE 13: CONFIDENTIALITY
| 1. | During the term of employment as well as after it has ended - regardless of the manner in which and the reasons for which the employment has ended -Employee is prohibited from disclosing to third parties in any manner, either directly or indirectly, and in any form and in any manner, including any form of digital and/or social media, whatsoever any information that comes to his attention pertaining to the confidential business and interests of Employer and/or any companies affiliated with it, its customers and its other business relations, all of the foregoing in the broadest sense of the word, unless Employee is required to disclose such matters to third parties in connection with his performance of the above obligations apply regardless of the way this Agreement ends. |
| 2. | lmmediately at Employer’s request, or in the event that Employee is suspended and at the time at which his employment is terminated, regardless of the manner in which and the reasons for which Employee is suspended or the employment has ended, Employee will return to Employer any and all property of Employer and/or any companies affiliated with it that Employee has in his possession, in addition to any and all documents that are in any way related to Employer and/or any companies affiliated with it or to the customers and other business relations of Employer and/or the companies affiliated with it, all of the foregoing in the broadest sense of the word, as well as any and all copies of such documents. |
ARTICLE 14: NON-ANCILLARY
During the term of his employment Employee is not permitted to engage in any paid or time consuming unpaid side activity unless Employee has received prior written permission to do so from Employer. Employee will not accept any form of remuneration from third parties in connection with his work for Employer or any companies affiliated with it, based on the weighty circumstances that apply to Employee, as mentioned in the “Considerations” in this Agreement.
ARTICLE 15: NON-COMPETITION
Employee is prohibited to work for or be involved, in any manner whatsoever, directly, or indirectly, paid, or unpaid, with any person, organization. Company or business that is engaged in competitive activities, similar or related to the activities of Employer or any companies affiliated with it or to have any interest therein or in that context within a period of 2 (two) years after termination of this Agreement, without written permission of Employer.
ARTICLE 16: NON-SOLLICITATION
Employee is prohibited, without written permission from Employer, for 2 (two) year after termination of this Agreement in any way, (in)directly, to maintain business-related contact with or work for relations (including prospects, suppliers, and customers) from Employer or to Employer affiliated companies. The question of whether there is a relationship with Employer is determined based on Employer records; all this in the broadest sense of the word.
ARTICLE 17: NON-APPROACHING
Employee is prohibited, without written permission from Employer, for 2 (two) years after termination of this Agreement, from approaching employees or persons who, in the last year prior to the end of this Agreement, have or have had an employment contract with Employer and/or with the companies affiliated with Employer, in order to induce these employees or persons to terminate the employment contract with Employer or with companies affiliated, and/or to hire such employees or persons themselves.
ARTICLE 18: INTELLECTUAL PROPERTY (RIGHTS): IP AND IPR
| 1. | All IP and IPR, to the business of Employer accrue to Employer, including any IP and IPR arising from the activities of Employee, including the ideas and inventions of Employee, during this Agreement, whereby by signing this Agreement, Employee declares, in case necessary, to transfer any IP and IPR that he creates or adds in and to the context of the employment relationship to Employer, and for 2 (two) years after its expiry. |
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| 2. | Employee will cooperate with any further formal and informal acts regarding any (further) establishment of the rights described above, even if these acts must take place after termination of this Agreement, whereby Employee, at no time, has any right has on any monetary compensation regarding the application of this article and IP and IPR in general. |
| 3. | Employee is obliged, as soon as an idea/invention is made, to inform Employer, without any delay and to lend all the cooperation that he will require from Employee for the application and/or patenting of that idea/invention. |
| 4. | Because this Agreement entails that Employee performs activities or conducts research that may lead to ideas/inventions, the agreed wages are deemed to also form compensation for missing entitlement to the stated rights of industrial and intellectual property (rights). |
ARTICLE 19: PENALTY CLAUSE
In the event that the Employee violates any of the provisions contained in articles 12 through 18 Employee will forfeit to the Employer, insofar as necessary in derogation from the provisions contained in article 7:650 (3), (4) and (5) of the Dutch Civil Code, a penalty that will be due on call and without any further demand, notice of default or judicial intervention being required, in the amount of EUR 1.000 for each violation plus EUR 500 for each day on which the violation continues, without prejudice to the Employer’s right to claim full compensation for the loss sustained and specific performance instead of that penalty. Payment of the penalty referred to in this article will not release the Employee from his obligations stipulated in articles 12 through 18.
ARTICLE 20: TAX ADJUSTMENT CLAUSE
lf the Dutch Tax Authorities or the Dutch Court rules that any of Employee’s remunerations or benefits were subject in whole or in part to the levy statutory payroll tax and social security contributions (wage and salaries tax or social insurance contributions) or were not sufficiently at arm’s length, the value of the private use of the remunerations or benefits shall be included in Employee’s salary. The compulsory withholdings will then be made and will be for the account of Employee. As from that time the remunerations or benefits shall be reduced to the level at which such payment/ payments may be made untaxed. Insofar as the remunerations or benefits exceed the standards or the fixed sums that may be paid out untaxed in accordance with the applicable tax and social security legislation at any given time, the part that exceeds the applicable standards or fixed amounts shall no longer be paid out/will be paid out after withholding statutory payroll tax and social security contributions.
ARTICLE 21: ADJUSTMENTS AND MISCELLANEOUS
| 1. | This Agreement deems to contain a full representation of the relevant agreements between Parties, as they exist at the time of signing of this Agreement. Additions to and deviations from this Agreement will only be valid if and insofar as they have been agreed in writing between Parties or have been confirmed in writing by Employer. |
| 2. | Employer has the right, with respect to article 7:613 of the DCC, to unilaterally change the provisions of this Agreement if Employer has such a weighty interest that the interests of Employee that are harmed by the change must give way according to standards of reasonableness and fairness. |
| 3. | Regarding the salary and/or other emoluments referred to in this Agreement, Employer will withhold what Employer is or becomes obliged to do by regulation of government. This will never give rise to compensation in any way whatsoever on the part of Employer. |
| 4. | If there is a conflict between one of the provisions of this Agreement and a legal provision, the other provisions of this Agreement will remain in force. |
| 5. | With the signing of this Agreement, all previous written and oral contracts regarding this employment relationship expire. |
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| 6. | Employee is competent that he is fit to practice, that all the data he has provided is correct and that he has not withheld any information that he could and should reasonably have concluded led to the fact that it would not have entered these or had entered others. |
| 7. | Employee guarantees that no non-competition clause of another clause stands in the way of |
this employment and indemnifies Employer against all third-party claims in this regard.
| 8. | Violation of the prohibition of any of the articles 12 through 18 of this Agreement can be a reason, as these each of these are gross misconduct, for immediate dismissal of Employee. |
| 9. | The IP and IPR to the content and the form of Agreement is owned by Employer and may not be copied or duplicated in any way, partly or fully. |
| 10. | For reasons of interpretation the English language to this Agreement prevails. |
| 11. | For all details of this employment Employer refers to the mentioned Personnel Handbook. |
| 12. | Employee states to have received all information from Employer necessary for Employee to be able to access and understand the specific terms of this Agreement. |
| 13. | Employee declares to have received a signed version of this Agreement. |
ARTICLE 22: GDPR AND PRIVACY
Employee provided, and provides, personal data to Employer based on article 7:655 of the DCC and declares that he is aware of that and the providing of this data is with his consent. The processing of Employee’s personal data is subject to the GDPR, Employer’s privacy.
ARTICLE 23: LAW AND COURT
| 1. | This Agreement is subject to Dutch law to the exclusion of any other legal system. |
| 2. | The Dutch court has exclusive jurisdiction to settle disputes arising from this Agreement. |
ARTICLE 24: SUPPLEMENT ARY AGREEMENT
| 1. | This Agreement has been drawn up as a supplementary agreement alongside the Employment agreement signed by both the Employee and Employer on December 16, 2024 as attached in Appendix A. All clauses in the preceding agreement remain in full force unless superseded by any clauses within this new agreement that ensures the employment is compliant with Dutch Employment Law. |
Thus agreed, drawn up in duplicate and signed, dated 4 February 2025
| /s/ David Weinstein | /s/ Maurice van Tilburg | |
| Employer: | Employee: | |
| Mr. D. Weinstein, Statutory Director | Maurice E.W.M. van Tilburg | |
| Renovaro Cube Intl Ltd | ||
| On behalf of | ||
| GEDI Cube B.V. |
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Exhibit 31.1
OFFICER’S CERTIFICATE
PURSUANT TO SECTION 302
I, David Weinstein, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the period ended December 31, 2024, of Renovaro 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 and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) 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 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: February 19, 2025 | By: | /s/ David Weinstein |
| Name: | David Weinstein | |
| Title: | Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
OFFICER’S CERTIFICATE
PURSUANT TO SECTION 302
I, Nathen Fuentes, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the period ended December 31, 2024, of Renovaro 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 and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) 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 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: February 19, 2025 | By: | /s/ Nathen Fuentes |
| Name: | Nathen Fuentes | |
| Title: | Chief Financial Officer (Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Renovaro Inc. (the “Company”) on Form 10-Q for the period ended December 31, 2024 as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Date: February 19, 2025 | By: | /s/ David Weinstein |
| Name: | David Weinstein | |
| Title: | Chief Executive Officer (Principal Executive Officer) |
A signed original of this written statement required by Section 906, or other document authentications, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the U.S. Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Renovaro Inc. (the “Company”) on Form 10-Q for the period ended December 31, 2024, as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Date: February 19, 2025 | By: | /s/ Nathen Fuentes |
| Name: | Nathen Fuentes | |
| Title: | Chief Financial Officer (Principal Financial Officer) |
A signed original of this written statement required by Section 906, or other document authentications, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the U.S. Securities and Exchange Commission or its staff upon request.