Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended March 31, 2024


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

From the transition period from to

Commission File Number 001-37853

FIRST WAVE BIOPHARMA, INC.

(Exact name of registrant as specified in its charter)

Delaware

46-4993860

(State or other jurisdiction of

incorporation or organization)

(I.R.S Employer

Identification No.)

777 Yamato Road, Suite 502

Boca Raton, Florida 33431

(Address of principal executive offices) (Zip Code)

(561) 589-7020

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


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

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. Yes ☒ No ☐

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). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-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 ☐ No ☒

There were 2,475,090 shares of the registrant’s common stock, par value $0.0001 per share (the “Common Stock”), outstanding as of May 10, 2024.

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		Page

PART I. FINANCIAL INFORMATION

Item 1.	Unaudited Condensed Consolidated Financial Statements	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	31

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33

Item 3.	Defaults Upon Senior Securities	34

Item 4.	Mine Safety Disclosures	34

Item 5.	Other Information	34

Item 6.	Exhibits	35

SIGNATURES

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements that involve substantial risks and uncertainties. All statements contained in this Quarterly Report other than statements of historical facts, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

The words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “target”, “potential”, “will”, “would”, “could”, “should”, “continue” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about:

●

our ability to maintain compliance with the applicable listing requirements of The Nasdaq Capital Market;

●

our ability to satisfy our payment obligations related to the acquisition of First Wave Bio, Inc.;

●

statements regarding the impact of geopolitical events, including the war in Ukraine and the Israel-Hamas war, and their effects on our operations, access to capital, research and development and clinical trials and potential disruption in the operations and business of third-party vendors, contract research organizations (“CROs”), contract development and manufacturing organizations (“CDMOs”), other service providers, and collaborators with whom we conduct business;

●

the availability of capital to satisfy our working capital requirements;

●

our current and future capital requirements and our ability to raise additional funds to satisfy our capital needs;

●

the integration and effects of our acquisitions, including the merger with ImmunogenX, and other strategic transactions;

●

the accuracy of our estimates regarding expense, future revenue and capital requirements;

●

our ability to continue operating as a going concern;

●

our plans to develop and commercialize our product candidates, including Latiglutenase, Adrulipase, Capeserod and Niclosamide;

●

our ability to initiate and complete our clinical trials and to advance our principal product candidates into additional clinical trials, including pivotal clinical trials, and successfully complete such clinical trials;

●

regulatory developments in the U.S. and foreign countries;

●

the performance of our third-party vendor(s), CROs, CDMOs and other third-party non-clinical and clinical development collaborators and regulatory service providers;

●

our ability to obtain and maintain intellectual property protection for our core assets;

●

the size of the potential markets for our product candidates and our ability to serve those markets;

●

the rate and degree of market acceptance of our product candidates for any indication once approved;

●

the success of competing products and product candidates in development by others that are or become available for the indications that we are pursuing;

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●

the loss of key scientific, clinical and nonclinical development, and/or management personnel, internally or from one of our third-party collaborators; and

●

other risks and uncertainties, including those listed under Part I, Item 1A., “Risk Factors” in our Annual Report on Form 10-K.

Factors that may cause actual results to differ materially from current expectations include, among other things, those set forth in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K and for the reasons described elsewhere in this Quarterly Report on Form 10-Q. Any forward-looking statement in this Quarterly Report on Form 10-Q reflects our current view with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, industry and future growth. Given these uncertainties, you should not rely on these forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

This Quarterly Report on Form 10-Q also contains estimates, projections and other information concerning our industry, our business and the markets for certain drugs and consumer products, including data regarding the estimated size of those markets, their projected growth rates and the incidence of certain medical conditions. Information that is based on estimates, forecasts, projections or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained these industry, business, market and other data from reports, research surveys, studies and similar data prepared by third parties, industry, medical and general publications, government data and similar sources and we have not independently verified the data from third party sources. In some cases, we do not expressly refer to the sources from which these data are derived.

In this Quarterly Report on Form 10-Q, unless otherwise stated or as the context otherwise requires, references to “First Wave,” the “Company,” “we,” “us,” “our” and similar references are to First Wave BioPharma, Inc. and its subsidiaries on a consolidated basis. References to “First Wave BioPharma” refer to First Wave BioPharma, Inc. on an unconsolidated basis. References to “FWB” refer to First Wave Bio, Inc. and references to “IMGX” refer to ImmunogenX, Inc., First Wave BioPharma’s wholly-owned subsidiaries.

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PART I

FINANCIAL INFORMATION

ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly our financial position, results of operations, and cash flows for the interim periods presented. We have consolidated such financial statements in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Therefore, such financial statements do not include all disclosures required by accounting principles generally accepted in the United States of America. In preparing these unaudited condensed consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the unaudited condensed consolidated financial statements were issued by filing with the SEC.

These financial statements should be read in conjunction with our audited financial statements for the year ended December 31, 2023 included in our Annual Report filed on Form 10-K, filed with the SEC on March 29, 2024.

The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2024.

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FIRST WAVE BIOPHARMA, INC.

Condensed Consolidated Balance Sheets


	March 31,
	2024		December 31,
	(unaudited)		2023
ASSETS

Current Assets:
Cash and cash equivalents	$	3,431,913	$	3,711,770
Prepaid expenses		4,058,053		1,244,466
Total Current Assets		7,489,966		4,956,236

Property, equipment, and leasehold improvements, net		25,749		14,565

Other Assets:
Restricted cash		21,522		21,522
Patents and tradenames		365,486		—
In - process R&D		63,000,000		—
Goodwill		20,038,508		1,684,182
Operating lease right-of-use assets		181,421		195,440
Deposits		11,250		11,250
Total Other Assets		83,618,187		1,912,394
Total Assets	$	91,133,902	$	6,883,195

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:
Accounts payable	$	1,996,519	$	554,277
Accrued expenses		2,554,446		825,290
Accrued dividend payable		1,135,760		1,069,616
Note payable		386,769		612,784
Operating lease liabilities		71,216		67,111
Other current liabilities		28,546		4,239
Total Current Liabilities		6,173,256		3,133,317
Long - term debt		6,397,889		—
Deferred tax liability		571,221		—
Non-current operating lease liabilities		127,592		146,949
Total Liabilities		13,269,958		3,280,266

Mezzanine Equity:
Series G redeemable preferred stock- Par value $0.0001 per share; 13,000 shares designated; 12,373.2260 and 0 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively.		61,681,100		—
Total Mezzanine Equity		61,681,100		—

Stockholders’ Equity:
Common stock - Par value $0.0001 per share; 100,000,000 shares authorized; 2,025,208 and 1,560,998 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively		203		156
Series B preferred stock- Par value $0.0001 per share; 5,194.81 shares authorized; 504.81 and 514.96 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively		—		—
Series C preferred stock- Par value $0.0001 per share; 75,000 shares authorized; 0 shares issued and outstanding at March 31, 2024 and December 31, 2023		—		—
Series D preferred stock- Par value $0.0001 per share; 150 shares designated; 0 shares issued and outstanding at March 31, 2024 and December 31, 2023		—		—
Series E preferred stock- Par value $0.0001 per share; 150 shares designated; 0 shares issued and outstanding at March 31, 2024 and December 31, 2023		—		—
Series F preferred stock- Par value $0.0001 per share; 7,000 shares designated; 0 shares issued and outstanding at March 31, 2024 and December 31, 2023		—		—
Additional paid-in capital		194,943,707		187,931,445
Accumulated deficit		(178,761,066)		(184,328,672)
Total Stockholders’ Equity		16,182,844		3,602,929
Total Liabilities, Mezzanine Equity and Stockholders’ Equity	$	91,133,902	$	6,883,195

See accompanying notes to unaudited condensed consolidated financial statements

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FIRST WAVE BIOPHARMA, INC.

Condensed Consolidated Statements of Operations (unaudited)


	Three Months Ended March 31,
	2024		2023
Operating expenses:
Research and development expenses	$	565,962	$	1,361,683
General and administrative expenses		8,659,692		2,700,742
Total operating expenses		9,225,654		4,062,425

Loss from operations		(9,225,654)		(4,062,425)

Other (expenses) income:
Interest expense		(66,202)		(8,987)
Interest income		228		1,873
Other expense		(653)		(1,114)
Total other expenses		(66,627)		(8,228)

Loss before income tax benefit		(9,292,281)		(4,070,653)

Income tax benefit		14,859,887		—

Net income (loss)	$	5,567,606	$	(4,070,653)

Preferred stock dividends		(66,144)		(87,431)
Net income (loss) applicable to common shareholders	$	5,501,462	$	(4,158,084)

Basic weighted average shares outstanding		1,761,953		114,033
Diluted weighted average shares outstanding		14,511,461		114,033
Income (loss) per share - basic	$	3.12	$	(36.46)
Income (loss) per share - diluted	$	0.38	$	(36.46)

See accompanying notes to unaudited condensed consolidated financial statements

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FIRST WAVE BIOPHARMA, INC.

Condensed Consolidated Statements of Mezzanine Equity and Changes in Stockholders’ Equity (unaudited)



	Series G Convertible			Series B Convertible						Additional				Total
	Preferred Stock			Preferred Stock			Common Stock			Paid In		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Deficit		Equity
Balance, January 1, 2024	—	$	—	515	$	—	1,560,998	$	156	$	187,931,445	$	(184,328,672)	$	3,602,929
Issuance of common stock, pre-funded warrants and warrants in registered direct offering, net of issuance costs	—		—	—		—	173,100		17		3,604,919		—		3,604,936
Issuance of Series G convertible preferred stock upon acquisition of IMGX	11,777		57,790,474	—		—	—		—		—		—		—
Issuance of common stock upon acquisition of IMGX	—		—	—		—	36,830		4		2,300,496		—		2,300,500
Issuance of Series G convertible preferred stock to financial advisors	596		3,890,626	—		—	—		—		—		—		—
Issuance of common stock to financial advisors	—		—	—		—	18,475		2		120,646		—		120,648
Exercise of pre-funded warrants into common stock	—		—	—		—	83,525		9		—		—		9
Deemed dividend of Series B preferred stock	—		—	—		—	—		—		(66,144)		—		(66,144)
Conversion of Series B preferred shares into common stock	—		—	(10)		—	9		—		—		—		—
Common stock issued to consultants	—		—	—		—	100,000		10		780,990		—		781,000
Issuance of common stock from RSU vest	—		—	—		—	52,271		5		(5)		—		—
Stock-based compensation	—		—	—		—	—		—		271,360		—		271,360
Net income	—		—	—		—	—		—		—		5,567,606		5,567,606
Balance, March 31, 2024	12,373	$	61,681,100	505	$	—	2,025,208	$	203	$	194,943,707	$	(178,761,066)	$	16,182,844

See accompanying notes to unaudited condensed consolidated financial statements

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FIRST WAVE BIOPHARMA, INC.

Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited)



	Series B Convertible						Additional				Total
	Preferred Stock			Common Stock			Paid In		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Equity
Balance, January 1, 2023	550	$	—	49,750	$	5	$	171,275,836	$	(168,533,689)	$	2,742,152
Issuance of common stock, pre-funded warrants and warrants in private placement, net of issuance costs	—		—	6,400		1		3,769,910		—		3,769,911
Exercise of pre-funded warrants into common stock	—		—	21,473		2		299		—		301
Deemed dividend of Series B preferred stock	—		—	—		—		(87,431)		—		(87,431)
Conversion of Series B preferred shares into common stock	(4)		—	4		—		—		—		—
Effect of cancelled shares from the 1-for-7 reverse stock split	—		—	(148)		—		—		—		—
Stock-based compensation	—		—	—		—		358,316		—		358,316
Net loss	—		—	—		—		—		(4,070,653)		(4,070,653)
Balance, March 31, 2023	546	$	—	77,479	$	8	$	175,316,930	$	(172,604,342)	$	2,712,596

See accompanying notes to unaudited condensed consolidated financial statements

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FIRST WAVE BIOPHARMA, INC.

Condensed Consolidated Statements of Cash Flows (unaudited)


	Three Months Ended March 31,
	2024		2023
Cash flows from operating activities:
Net income (loss)	$	5,567,606	$	(4,070,653)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		12,293		7,318
Change in right-of-use assets		18,251		15,528
Stock-based compensation		271,360		358,316
Common stock granted to consultants		781,000		—
Common stock issued to financial advisors at acquisition		120,648		—
Series G convertible preferred stock issued to financial advisors at acquisition		3,890,626		—
Deferred taxes		(14,859,887)		—
Changes in assets and liabilities:
Other receivables		—		73,014
Prepaid expenses		318,342		511,393
Lease liabilities		(18,863)		(15,751)
Accounts payable		526,033		(250,280)
Accrued expenses		(398,672)		525,552
Other liabilities		24,307		(15)
Net cash used in operating activities		(3,746,956)		(2,845,578)

Cash flows from investing activities:
Cash acquired in acquisition of IMGX		88,169		—
Net cash provided by investing activities		88,169		—

Cash flows from financing activities:
Proceeds from issuance of common stock, prefunded warrants and warrants, net		3,604,936		3,769,911
Proceeds from exercise of warrants		9		301
Repayments of note payable		(226,015)		(223,104)
Net cash provided by financing activities		3,378,930		3,547,108

Net (decrease) increase in cash, cash equivalents and restricted cash		(279,857)		701,530

Cash, cash equivalents and restricted cash, beginning balance		3,733,292		1,384,423
Cash, cash equivalents and restricted cash, ending balance	$	3,453,435	$	2,085,953

Supplemental disclosures of cash flow information:
Cash paid for interest	$	21,969	$	8,987

Non-cash investing and financing activities:
Fair value of common shares issued in the IMGX acquisition, net of cash	$	152,331	$	—
Fair value of the Series G preferred stock issued in the IMGX acquisition	$	57,790,474	$	—
Fair value of options assumed in the IMGX acquisition	$	1,271,000	$	—
Fair value of warrants assumed in the IMGX acquisition	$	789,000	$	—
Accrued dividends on preferred stock	$	(66,144)	$	(87,431)

See accompanying notes to unaudited condensed consolidated financial statements

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FIRST WAVE BIOPHARMA, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2024

Note 1 - The Company and Basis of Presentation

The Company

First Wave BioPharma, Inc. (“First Wave”) and its wholly-owned subsidiaries, First Wave Bio, Inc. (“FWB”) and ImmunogenX, Inc. (“IMGX”), are collectively referred to as the “Company”. The Company is engaged in the research and development of targeted, non-systemic therapies for the treatment of patients with gastrointestinal (“GI”) diseases. Non-systemic therapies are non-absorbable drugs that act locally, i.e., in the intestinal lumen, skin or mucosa, without reaching an individual’s systemic circulation.

In March 2024, the Company acquired IMGX, a private, clinical-stage biopharmaceutical company founded in 2013, which was developing the biologic, Latiglutenase, for celiac disease. IMGX was also developing CypCel, a metabolic marker compound that can measure the state of small-intestinal recovery of celiac patients undergoing gluten-free diets (“GFDs”).

The Company is currently focused on developing its pipeline of gut-restricted GI clinical drug candidates, including Latiglutenase, a targeted oral biotherapeutic for celiac disease; the biologic Adrulipase (formerly MS1819), a recombinant lipase enzyme designed to enable the digestion of fats and other nutrients; Capeserod, a selective 5-HT4 receptor partial agonist which the Company will pursue for GI indications; and Niclosamide, an oral small molecule with anti-viral and anti-inflammatory properties.

Risks and Uncertainties

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development and regulatory success, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, and ability to secure additional capital to fund clinical trials and operations.

Worldwide supply chain constraints and economic and capital markets uncertainty arising out of conflicts between Russia and Ukraine and conflicts in the Middle East triggered by attacks on Israel in October of 2023 have disrupted commercial and capital markets and emerged as new barriers to long - term economic recovery. Capital markets uncertainty, with public stock price decreases and volatility, could make it more difficult for us to raise capital when needed.

In addition, the Company is subject to other challenges and risks specific to its business, its ability to maintain compliance with the continued listing requirements of The Nasdaq Capital Market and its ability to execute on its strategy, as well as risks and uncertainties common to companies in the biotechnology and pharmaceutical industries with development and commercial operations, including, without limitation, risks and uncertainties associated with: obtaining regulatory approval of its drug candidates; delays or problems in the manufacture and supply of its drug candidates, loss of single source suppliers or failure to comply with manufacturing regulations; identifying, acquiring or in-licensing additional products or drug candidates; pharmaceutical product development and the inherent uncertainty of clinical success; and the challenges of protecting and enhancing our intellectual property rights; complying with applicable regulatory requirements.

Principles of Consolidation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and include the accounts of First Wave and its wholly owned subsidiaries, FWB and IMGX. Intercompany transactions and balances have been eliminated upon consolidation.

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In our opinion, the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations, and cash flows. The consolidated balance sheet at December 31, 2023, has been derived from audited financial statements of that date. The unaudited interim condensed consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to instructions, rules, and regulations prescribed by the SEC. The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim condensed consolidated financial statements are read in conjunction with the audited financial statements and notes previously distributed in our Annual Report Form 10-K for the year ended December 31, 2023, filed with the SEC on March 29, 2024.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying unaudited interim condensed consolidated financial statements have been prepared as if the Company will continue as a going concern. The Company has incurred significant operating losses and negative cash flows from operations since inception. On March 31, 2024, the Company had cash and cash equivalents of approximately $3.4 million, an accumulated deficit of approximately $178.8 million and working capital of approximately $1.3 million. Subsequent to March 31, 2024, the Company raised aggregate gross proceeds of approximately $1.1 million from a May 2024 Registered Direct Offering. The Company has incurred recurring losses, has experienced recurring negative operating cash flows, and requires significant cash resources to execute its business plans. Based on its cash on hand at March 31, 2024, the Company anticipates having sufficient cash to fund planned operations into June 2024, however, the acceleration or reduction of cash outflows by Company management can significantly impact the timing for the need to raise additional capital to complete development of its products. Historically, the Company’s major sources of cash have been comprised of proceeds from various public and private offerings of its capital stock. The Company is dependent on obtaining additional working capital funding from the sale of equity and/or debt securities in order to continue to execute its development plans and continue operations.

Without adequate working capital, the Company may not be able to meet its obligations and continue as a going concern. These conditions raise substantial doubt about the Company’s ability to continue as a going concern one year from the date these financial statements are issued. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 2 - Significant Accounting Policies and Recent Accounting Pronouncements

Use of Estimates

The accompanying unaudited condensed consolidated financial statements are prepared in conformity with GAAP and include certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements (including goodwill), and the reported amounts of revenue and expense during the reporting period, including contingencies. Accordingly, actual results may differ from those estimates.

Reverse Stock Split

On December 18, 2023, the Company effected a reverse stock split, whereby every twenty shares of the Company’s issued and outstanding common stock was converted automatically into one issued and outstanding share of common stock, but without any change in the number of authorized shares of common stock and the par value per share.

On January 18, 2023, the Company effected a reverse stock split, whereby every seven shares of the Company’s issued and outstanding common stock was converted automatically into one issued and outstanding share of common stock, but without any change in the number of authorized shares of common stock and the par value per share.

On August 26, 2022, the Company effected a reverse stock split, whereby every thirty shares of the Company’s issued and outstanding common stock was converted automatically into one issued and outstanding share of common stock, but without any change in the number of authorized shares of common stock and the par value per share.

All share and per share amounts have been retroactively restated to reflect the reverse stock splits referenced above.

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Cash and Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents. All cash and cash equivalent balances were highly liquid at March 31, 2024 and December 31, 2023. As of March 31, 2024 and December 31, 2023, the Company has classified approximately $0.02 million as restricted cash.

Concentrations of Credit Risk

Financial instruments that potentially expose the Company to concentrations of credit risk consist of cash. The Company primarily maintains its cash balances with financial institutions in federally insured accounts in the U.S. The Company may from time to time have cash in banks in excess of FDIC insurance limits. At March 31, 2024 the Company had approximately $3.4 million in one account in the U.S. which was in excess of these limits. The Company has not experienced any losses to date resulting from this practice. The Company mitigates its risk by maintaining the majority of its cash and equivalents with high quality financial institutions.

Fair Value Measurements

The Company follows Accounting Standards Codification (“ASC”) Topic 820-10, Fair Value Measurements and Disclosures (“ASC 820”), which 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 an exit price, representing the amount that would be received to sell an asset or 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, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Inputs, other than the 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, which reflect those that a market participant would use.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

The Company recognizes transfers between levels as if the transfers occurred on the last day of the reporting period.

Goodwill

Goodwill represents the excess of the purchase price of the acquired business over the fair value of amounts assigned to assets acquired and liabilities assumed. Goodwill and other intangible assets with indefinite useful lives are reviewed for impairment annually or more frequently if events or circumstances indicate impairment may be present. Any excess in carrying value over the estimated fair value is charged to results of operations. The Company has not recognized any impairment charges through March 31, 2024 related to goodwill.

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Impairment of Long-Lived Assets

The Company periodically evaluates its long-lived assets for potential impairment in accordance with ASC Topic 360, Property, Plant and Equipment (“ASC 360”). Potential impairment is assessed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. Recoverability of these assets is assessed based on undiscounted expected future cash flows from the assets, considering a number of factors, including past operating results, budgets and economic projections, market trends and product development cycles. If impairments are identified, assets are written down to their estimated fair value. The Company has not recognized any impairment charges through March 31, 2024.

Income Taxes

Income taxes are recorded in accordance with ASC 740, Accounting for Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. The Company determines its deferred tax assets and liabilities based on differences between financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. At March 31, 2024 and 2023, the Company does not have any significant uncertain tax positions.

Leases

Leases are recorded on the balance sheet as right of use assets and lease obligations.

Research and Development

Research and development costs are charged to operations when incurred and are included in operating expense, except for goodwill related to patents. Research and development costs consist principally of compensation of employees and consultants that perform the Company’s research activities, payments to third parties for preclinical and non-clinical activities, expenses with clinical research organizations (“CROs”), investigative sites, consultants and contractors that conduct or provide other services relating to clinical trials, costs to acquire drug product, drug supply and clinical trial materials from contract development and manufacturing organization (“CDMOs”) and third-party contractors relating to chemistry, manufacturing and controls (“CMC”) efforts, the fees paid for and to maintain the Company’s licenses and research and development costs related to adrulipase and niclosamide. Depending upon the timing of payments to the service providers, the Company recognizes prepaid expenses or accrued expenses related to these costs. These accrued or prepaid expenses are based on management’s estimates of the work performed under service agreements, milestones achieved and experience with similar contracts. The Company monitors each of these factors and adjusts estimates accordingly.

Research and Development – Intellectual Property Acquired

The Company records intellectual property acquired in business acquisitions that has not reached technological feasibility and which has no alternative future use, as In-Process R&D (“IPR&D”) at the acquisition date. On March 13, 2024, the Company entered into an acquisition agreement with IMGX which included the intellectual property and patents for Latiglutenase and CypCel, which was accounted for as a business acquisition (see Note 3).

Intangible assets related to IPR&D are considered indefinite-lived intangible assets and are assessed for impairment annually or more frequently if impairment indicators exist. If the associated research and development effort is abandoned, the related assets will be written-off, and the Company will record a noncash impairment loss on its Consolidated Statements of Operations. For those compounds that reach commercialization, the IPR&D assets will be amortized over their estimated useful lives. The impairment test for indefinite-lived intangible assets is a one-step test that compares the fair value of the intangible asset to its carrying value. If the carrying value exceeds its fair value, an impairment loss is recognized in an amount equal to the excess.

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For tax purposes, intangible assets related to IPR&D are considered definite-lived intangible assets.

Stock-Based Compensation

The Company’s board of directors (the “Board”) and stockholders have adopted and approved the Amended and Restated 2014 Omnibus Equity Incentive Plan (the “2014 Plan”) which took effect on May 12, 2014, and the 2020 Omnibus Equity Incentive Plan, which took effect on September 11, 2020 (the “2020 Plan”). From the effective date of the 2020 Plan, no new awards have been or will be made under the 2014 Plan. On March 13, 2024, in connection with the IMGX acquisition, the Company assumed IMGX’s 2021 Stock Option Plan (the “IMGX Plan”), including all IMGX stock options immediately outstanding prior to the IMGX acquisition, with each becoming an option to purchase Common Stock, subject to adjustment. The IMGX Plan was adopted and approved by the board of directors and stockholders of IMGX in 2021. Following the assumption of the IMGX Plan by the Company, no new awards have been or will be made under the IMGX Plan. The Company accounts for its stock-based compensation awards to employees, consultants, and Board members in accordance with ASC Topic 718, Compensation-Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments to employees, consultants, and Board members, including grants of employee stock options, to be recognized in the statements of operations by measuring the fair value of the award on the date of grant and recognizing this fair value as stock-based compensation using a straight-line method over the requisite service period, generally the vesting period.

For awards with performance conditions that affect their vesting, such as the occurrence of certain transactions or the achievement of certain operating or financial milestones, recognition of fair value of the award occurs when vesting becomes probable.

The Company estimates the grant date fair value of stock option awards using the Black-Scholes option-pricing model. The use of the Black-Scholes option-pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the Common Stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the Common Stock.

Recent Accounting Pronouncements

The Company has evaluated recently issued accounting pronouncements and has concluded that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption.

Note 3 – Business Acquisition

On March 13, 2024, the Company acquired ImmunogenX, Inc.(the “Merger”), a Delaware corporation, in accordance with the terms of an Agreement and Plan of Merger, dated March 13, 2024 (the “Merger Agreement”), by and among the Company, IMMUNO Merger Sub I, Inc., a Delaware corporation (“First Merger Sub”), IMMUNO Merger Sub II, LLC, a Delaware limited liability company (“Second Merger Sub”), and IMGX. Pursuant to the Merger Agreement, First Merger Sub merged with and into IMGX, pursuant to which IMGX was the surviving corporation (the “First Merger”). Immediately following the First Merger, IMGX merged with and into Second Merger Sub, pursuant to which Second Merger Sub was the surviving entity and a wholly owned subsidiary of the Company (the “Second Merger” and, together with the First Merger, the “IMGX Merger”). The Merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.

Under the terms of the Merger Agreement, following the consummation of the Merger (the “Closing”), in exchange for the outstanding shares of capital stock of IMGX immediately prior to the effective time of the First Merger, the Company issued to the stockholders of IMGX an aggregate of (A) 36,830 shares of Common Stock, and (B) 11,777.418 shares of Series G Preferred Stock, each share of which is convertible into 1,000 shares of Common Stock, upon shareholder approval. Following the closing of the acquisition, the Company had 2,303,135 shares of common stock issued and outstanding.

The Company incurred transaction costs of $5,456,038 which are included in the Company’s condensed consolidated statement of operations.

In addition, the Company assumed (i) all IMGX stock options immediately outstanding prior to the First Merger, each becoming an option to purchase Common Stock subject to adjustment pursuant to the terms of the Merger Agreement (the “Assumed Options”) and (ii) all IMGX warrants immediately outstanding prior to the First Merger, each becoming a warrant to purchase Common Stock subject to adjustment pursuant to the terms of the Merger Agreement (the “Assumed Warrants”). The Assumed Options are exercisable for an aggregate of 200,652 shares of Common Stock, have an exercise price of $0.81 and expire between February 1, 2031 and June 6, 2033.

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The Assumed Warrants are exercisable for an aggregate of 127,680 shares of Common Stock, have exercise prices ranging from $3.03 to $3.92 and expire between September 30, 2032 and September 6, 2033.

Tungsten Partners LLC (“Tungsten”) acted as financial advisor to the Company in connection with the Merger. As partial compensation for services rendered by Tungsten, the Company issued to Tungsten or its affiliates or designees an aggregate of 18,475 shares of Common Stock and 595.808 shares of Series G Preferred Stock. The fair value of the advisory fees was approximately $4.0 million which are included in the approximately $5.5 million of transaction costs noted above.

The Merger was accounted for as a business combination under the acquisition method of accounting with First Wave as the accounting acquirer. Under the acquisition method, the total purchase price of the acquisition is allocated to the net identifiable tangible and intangible assets acquired and liabilities assumed based on the fair values as of the date of such acquisition. The preliminary fair value of the consideration totaled approximately $60.1 million, summarized as follows:


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

The Company has made a provisional allocation of the purchase price of the Merger to the assets acquired and the liabilities assumed as of the purchase date. The following table summarizes the provisional purchase price allocations relating to the Merger:


Assets acquired:
Cash and cash equivalents	$	88,169
Prepaid expenses and other current assets		3,131,929
Property and equipment, net		18,963
Intangibles		63,370,000
Operating lease right-of-use assets		4,232
Total assets	$	66,613,293
Liabilities assumed:
Accounts payable		916,209
Accrued expenses and other current liabilities		2,131,439
Long term debt		6,397,889
Deferred tax liability		15,431,108
Total liabilities	$	24,876,645
Goodwill recorded:
Goodwill	$	18,354,326
Net assets acquired	$	60,090,974

The fair value of IPR&D was capitalized as of the IMGX Merger date and accounted for as indefinite-lived intangible assets until completion or disposition of the assets or abandonment of the associated research and development efforts. Upon successful completion of the development efforts, the useful lives of the IPR&D assets will be determined based on the anticipated period of regulatory exclusivity and will be amortized within operating expenses. Until that time, the IPR&D assets will be subject to impairment testing and will not be amortized. The goodwill recorded related to the IMGX Merger is the excess of the fair value of the consideration transferred by the acquirer over the fair value of the net identifiable assets acquired and liabilities assumed at the date of such acquisition. The goodwill recorded is not deductible for tax purposes.

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All intangible assets acquired are subject to amortization and their associated estimated acquisition date fair values are as follows:


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

Net income in the Condensed Consolidated Statement of Operations for the three months ended March 31, 2024 includes net losses of IMGX from the date of acquisition to March 31, 2024 of approximately $0.1 million.

Pro forma disclosure for the IMGX acquisition

The unaudited pro forma information for the three months ended March 31, 2024 and 2023 was impracticable for disclosure as IMGX was a private company.

Note 4 - Fair Value Disclosures

Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework that prioritizes and ranks the level of observability of inputs used in measuring fair value.

The fair value of the Company’s financial instruments are as follows:


			Fair Value Measured at Reporting Date
			Using
	Carrying
	Amount		Level 1		Level 2		Level 3		Fair Value
March 31, 2024 (unaudited):
Money market funds	$	12,244	$	12,244	$	—	$	—	$	12,244
Note payable		386,769		—		386,769		—		386,769

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

At March 31, 2024 and December 31, 2023, the Company had no other assets or liabilities that are subject to fair value methodology and estimation in accordance with U.S. GAAP.

Note 5 – Property, Equipment and Leasehold Improvements

Property, equipment and leasehold improvements consisted of the following:


	March 31,
	2024		December 31,
	(unaudited)		2023
Computer equipment and software	$	21,316	$	11,540
Office equipment		57,465		48,278
Leasehold improvements		28,000		28,000
Total property, equipment and leasehold improvements		106,781		87,818
Less accumulated depreciation		(81,032)		(73,253)
Property, equipment and leasehold improvements, net	$	25,749	$	14,565

Depreciation expense for the three months ended March 31, 2024 was approximately $7,779 and for the three months ended March 31, 2023 was approximately $7,300.

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Note 6 –Goodwill

Goodwill is as follows:


	Goodwill
Balance on January 1, 2023	$	1,684,182
Balance on December 31, 2023		1,684,182
Goodwill associated with IMGX acquisition		18,354,326
Balance on March 31, 2024 (unaudited)	$	20,038,508

Note 7 – Intangible Assets and In-Process R&D

Intangible assets as of March 31, 2024 consist of in-process R&D, patents, tradenames and trademarks acquired from IMGX. Intangible assets and in-process R&D are as follows:


	Estimated	March 31,
	Useful Life	2024
Patents	2	$	140,000
Trademarks and trade names	6		230,000
Less: Accumulated Amortization			(4,514)
Intangible Assets, Net			365,486
In-Process R&D			63,000,000
Total Intangible Assets and In-Process R&D, Net		$	63,365,486

Expected future amortization expense as of March 31, 2024 is as follows:


2024 (remainder of year)	$	81,250
2025		108,333
2026		52,917
2027		38,333
Thereafter		84,653
Total	$	365,486

Note 8 - Accrued Expenses

Accrued expenses consisted of the following:


	March 31,
	2024		December 31,
	(unaudited)		2023
Accrued interest	$	1,328,669	$	—
Consulting fees		662,947		75,972
Professional fees		507,844		253,577
Payroll and benefits		54,986		495,741
Total accrued expenses	$	2,554,446	$	825,290

Note 9 – Capital Stock

Common Stock and Preferred Stock

The Company’s amended and restated certificate of incorporation, as amended to date, (the “Charter”) authorizes the issuance of up to 100,000,000 shares of Common Stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share.

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The Company had 2,025,208 and 1,560,998 shares of its Common Stock issued and outstanding on March 31, 2024 and December 31, 2023, respectively.

The Company had approximately 504.81 and 514.96 shares of Series B preferred stock issued and outstanding on March 31, 2024 and December 31, 2023, respectively.

The Company had 0 shares of Series C, Series D, Series E and Series F preferred stock issued and outstanding on March 31, 2024 and December 31, 2023.

Most Favored Nations Exchange Right and Waiver Agreements

In the event the Company effects any issuance by the Company or any of its subsidiaries of Common Stock or Common Stock equivalents for cash consideration, or a combination of units thereof (a “Subsequent Financing”), each holder of the Series B Preferred Stock had the right, subject to certain exceptions set forth in the Series B Certificate of Designations, at its option, to exchange (in lieu of cash subscription payments) all or some of the Series B Preferred Stock then held (with a value per share of Series B Preferred Stock equal to the stated value of each share of Series B Preferred Stock, or $7,700.00, plus accrued and unpaid dividends thereon, of the Series B Preferred Stock (the “Exchange Amount”)) for any securities or units issued in a Subsequent Financing on dollar-for-dollar basis (the “Series B Exchange Right”). Effective May 12, 2022, the holders of 81.3% of the outstanding shares of the Series B Preferred Stock permanently waived for themselves and all other holders of the Series B Preferred Stock the Series B Exchange Right with respect to any Subsequent Financing occurring on or after January 1, 2022 (the “Permanent Waiver”). Holders of Series B Preferred Stock as of the April 27, 2022 record date were entitled to notice of and to consent to the Permanent Waiver (the “Record Holders”).

As of March 31, 2024, (i) holders of approximately 1,839.76 shares of Series B Preferred Stock with an aggregate Exchange Amount of approximately $14.4 million had previously elected to exercise their Series B Exchange Rights into Series C Preferred Stock, convertible into an aggregate of 395 shares of Common Stock (which conversion the Company has elected to make in full), and additional Investor Warrants exercisable for up to an aggregate of 395 shares of Common Stock, (ii) holders of approximately 140.33 shares of Series B Preferred Stock with an aggregate Exchange Amount of approximately $1.3 million had previously elected to exercise their Series B Exchange Rights into 110 shares of Common Stock with no warrants, and (iii) holders of approximately 30.91 shares of Series B Preferred Stock with an aggregate Exchange Amount of approximately $265,000 had previously elected to exercise their Series B Exchange Rights into 44 shares of Common Stock, and additional Series C Warrants exercisable for up to an aggregate of 44 shares of Common Stock.

Mezzanine Equity

Series G Preferred Stock

The Company had 12,373.226 shares of Series G stock issued and outstanding on March 31, 2024 and 0 on December 31, 2023.

On March 13, 2024, the Company issued 12,373.226 shares of Series G Preferred stock in connection with the IMGX Merger. The following is a summary of the principal terms of the Series G Preferred Stock as set forth in the Certificate of Designation of the Series G Preferred Stock:

General; Transferability. Share of Series G Preferred Stock will be uncertificated and issued in book-entry form. Shares of Series G Preferred Stock may be transferred by the holders thereof without the consent of the Company, provided that such transfer is in compliance with applicable securities laws.

Conversion. Following stockholder approval of the conversion of the Series G Preferred Stock into Common Stock in accordance with the listing rules of the Nasdaq Stock Market (the “Conversion”), each share of Series G Preferred Stock will automatically convert into 1,000 shares of Common Stock, subject to certain limitations, including that a holder of Series G Preferred Stock is prohibited from converting shares of Series G Preferred Stock into shares of Common Stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than a specified percentage (to be established by the holder between 4.9% and 19.9%) of the total number of shares of Common Stock issued and outstanding immediately after giving effect to such conversion.

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The Series G Preferred Stock is redeemable for cash at the option of the holder thereof at any time following the date that is six months after the initial issuance of the Series G Preferred Stock (without regard to the lack of obtaining the requisite stockholder approval to convert the Series G Preferred Stock into Common Stock), at a price per share equal to the then-current fair value of the Series G Preferred Stock, which shall be the last reported closing sale price of the Company’s Common Stock as reported on the Nasdaq Stock Market as of the trading day immediately prior to the conversion event. As such, Series G Preferred Stock is classified as Mezzanine Equity on the balance sheet.

Voting Rights. Except as otherwise required by law, the Series G Preferred Stock does not have voting rights. However, as long as any shares of Series G Preferred Stock are outstanding, the Company will not, without the affirmative vote of the holders of a majority of the then-outstanding shares of the Series G Preferred Stock, (i) alter or change adversely the powers, preferences or rights given to the Series G Preferred Stock or alter or amend the Certificate of Designation, amend or repeal any provision of, or add any provision to, the Charter or bylaws of the Company, or file any articles of amendment, certificate of designations, preferences, limitations and relative rights of any series of preferred stock, in each case if any such action would adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Series G Preferred Stock, regardless of whether any of the foregoing actions shall be by means of amendment to the Charter or by merger, consolidation, recapitalization, reclassification, conversion or otherwise, (ii) issue further shares of Series G Preferred Stock, (iii) prior to the earlier of stockholder approval of the Conversion or the six-month anniversary of issuance, consummate either: (A) any Fundamental Transaction (as in the Certificate of Designation) or (B) any stock sale to, or any merger, consolidation or other business combination of the Company with or into, another entity in which the stockholders of the Company immediately before such transaction do not hold at least a majority of the capital stock of the Company immediately after such transaction, or (iv) enter into any agreement with respect to any of the foregoing.

Liquidation Preference. The Series G Preferred Stock does not have a preference upon any liquidation, dissolution or winding-up of the Company.

Dividend Rights. Holders of Series G Preferred Stock are entitled to receive dividends on shares of Series G Preferred Stock equal to, on an as-if-converted-to-Common-Stock basis, and in the same form as dividends actually paid on shares of the Common Stock.

Redemption. The shares of Series G Preferred Stock shall not be redeemable at the option of the Company or the holder thereof.

Trading Market. There is no established trading market for any of the Series G Preferred Stock, and we do not expect a market to develop. We do not intend to apply for a listing for any of the Series G Preferred Stock on any securities exchange or other nationally recognized trading system. Without an active trading market, the liquidity of the Series G Preferred Stock will be limited.

At The Market Agreement with H.C. Wainwright

On May 26, 2021, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”), as sales agent, pursuant to which the Company may issue and sell, from time to time, through Wainwright, shares of its Common Stock, and pursuant to which Wainwright may sell its Common Stock by any method permitted by law deemed to be an “at the market offering” as defined by Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. The Company will pay Wainwright a commission of 3.0% of the aggregate gross proceeds from each sale of Common Stock. As of May 24, 2022, the Company was authorized to offer and sell up to $8.0 million of its Common Stock pursuant to the ATM Agreement. The Company did not utilize the ATM Agreement during the three months ended March 31, 2024 or the year ended December 31, 2023.

March 2024 Registered Direct Offering

On March 6, 2024, the Company completed a Registered Direct Offering (the “March 2024 Offering”) priced at market under Nasdaq rules, for an aggregate of (i) 173,100 shares of Common Stock, (ii) pre-funded warrants (the “March 2024 Pre-Funded Warrants”) to purchase up to an aggregate of 352,525 shares of Common Stock and (iii) common warrants (the “March 2024 Warrants”) to purchase up to an aggregate of 525,625 shares of Common Stock. The public offering price for each share of Common Stock and accompanying March 2024 Warrant to purchase one share of Common Stock was $7.61 per share. The March 2024 Pre-Funded Warrants have an exercise price of $0.0001 per share, are exercisable immediately and will expire when exercised in full. The March 2024 Warrants have an exercise price of $7.48 per share, are exercisable immediately and will expire five years from the initial exercise date.

The Company received gross proceeds of approximately $4.0 million less placement agent’s fees and other offering expenses of approximately $400,000.

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March 2023 Private Placement

On March 15, 2023, the Company completed a private placement offering (the “March 2023 Offering”) priced at market under Nasdaq rules, for an aggregate of (i) 6,400 shares of Common Stock, (ii) pre-funded warrants (the “March 2023 Pre-Funded Warrants”) to purchase up to an aggregate of 44,751 shares of Common Stock and (iii) common warrants (the “March 2023 Warrants”) to purchase up to an aggregate of 102,302 shares of Common Stock. The public offering price for each share of Common Stock and accompanying March 2023 Warrant to purchase one share of Common Stock was $78.20 per share. The March 2023 Pre-Funded Warrants have an exercise price of $0.002 per share, are exercisable immediately and will expire when exercised in full. The March 2023 Warrants have an exercise price of $73.20 per share, are exercisable immediately and will expire five years from the initial exercise date.

The Company received gross proceeds of approximately $4.0 million less placement agent’s fees and other offering expenses of approximately $300,000.

Common Stock Issuances

Q1 2024 Issuances

During the three months ended March 31, 2024, the Company issued 173,100 shares of Common Stock under the March 2024 Offering for which the Company received net proceeds of approximately $3.6 million.

During the three months ended March 31, 2024, the Company issued an aggregate of 36,830 shares of Common Stock with a value of $2.3 million in connection with the IMGX acquisition.

During the three months ended March 31, 2024, the Company issued an aggregate of 18,475 shares of Common Stock with a value of $0.1 million to its financial advisors in connection with the IMGX acquisition.

During the three months ended March 31, 2024, the Company issued an aggregate of 83,525 shares of Common Stock upon the conversion of pre-funded warrants issued at a par value of $0.0001 (See Note 10).

During the three months ended March 31, 2024, the Company issued an aggregate of 9 shares of Common Stock upon the exchange of an aggregate of 10.15 shares of Series B Preferred Stock with a stated value of approximately $78,125 plus accrued dividends of approximately $22,770.

During the three months ended March 31, 2024, the Company issued an aggregate of 100,000 shares of its Common Stock to consultants with a grant date fair value of approximately $781,000 for investor relations services provided, which was recorded as stock-based compensation and included as part of general and administrative expense.

During the three months ended March 31, 2024, the Company issued an aggregate of 52,271 shares of Common Stock upon the vesting of RSUs (See Note 11).

Q1 2023 Issuances

During the three months ended March 31, 2023, the Company issued 6,400 shares of Common Stock under the March 2023 Offering for which the Company received net proceeds of approximately $3.8 million.

During the three months ended March 31, 2023, the Company issued an aggregate of 21,473 shares of Common Stock upon the conversion of pre-funded warrants issued at a par value of $0.0001 (See Note 10).

During the three months ended March 31, 2023, the Company issued an aggregate of 4 shares of Common Stock upon the exchange of an aggregate of 4.23 shares of Series B Preferred Stock with a stated value of approximately $32,600 plus accrued dividends of approximately $6,200.

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During the three months ended March 31, 2023, the Company cancelled an aggregate of 148 shares of Common Stock in connection with the 1-for-7 reverse stock split on January 18, 2023.

Note 10 – Warrants

Warrant activity for the three months ended March 31, 2024 and 2023 was as follows:


		Weighted		Weighted
		Average		Average
	Number of	Exercise Price		Remaining
	Warrants	Per Share		Term in Years
Outstanding and exercisable on January 1, 2024	1,779,780	$	19.29	4.99
Issued	878,150		4.48	4.93
Assumed from IMGX	127,680		3.48	8.97
Exercised	(83,525)		—	4.93
Warrants outstanding and exercisable on March 31, 2024	2,702,085	$	14.32	5.00

Warrants outstanding and exercisable on January 1, 2023	108,797	$	383.20	5.50
Issued	147,053		51.00	4.96
Exercised	(21,473)		—	5.28
Warrants outstanding and exercisable on March 31, 2023	234,377	$	210.00	5.07

As of March 31, 2024, the outstanding warrants expire from 2024 through 2033.

During the three months ended March 31, 2024, the Company issued warrants to purchase 525,625 shares of the Company’s Common Stock and pre-funded warrants to purchase 352,525 shares of the Company’s Common Stock in connection with the March 2024 Offering (See Note 9). Additionally, the Company assumed warrants to purchase 127,680 shares of the Company’s Common Stock in connection with the IMGX acquisition.

During the three months ended March 31, 2023, the Company issued warrants to purchase 102,302 shares of the Company’s Common Stock and pre-funded warrants to purchase 44,751 shares of the Company’s Common Stock in connection with the March 2023 Offering (See Note 9).

Note 11 – Equity Incentive Plan

The Company’s Board and stockholders adopted and approved the Amended and Restated 2014 Omnibus Equity Incentive Plan (the “2014 Plan”), which took effect on May 12, 2014. The Company’s Board and stockholders adopted and approved the 2020 Omnibus Equity Incentive Plan (the “2020 Plan”), which took effect on September 11, 2020. From the adoption and approval of the 2020 Plan, no new awards have been or will be made under the 2014 Plan.

The 2020 Plan allows for the issuance of securities, including stock options to employees, Board members and consultants. The initial number of shares of Common Stock available for issuance under the 2020 Plan was 238 shares, which will, on January 1 of each calendar year, unless the Board decides otherwise, automatically increase to equal ten percent (10)% of the total number of shares of Common Stock outstanding on December 31 of the immediately preceding calendar year, calculated on an As Converted Basis. As Converted Shares include all outstanding shares of Common Stock and all shares of Common Stock issuable upon the conversion of outstanding preferred stock, warrants and other convertible securities, but will not include any shares of Common Stock issuable upon the exercise of options and other convertible securities issued pursuant to either the 2014 Plan, the 2020 Plan, or the IMGX Plan. The number of shares permitted to be issued as “incentive stock options” (“ISOs”) is 357 under the 2020 Plan.

On March 13, 2024, in connection with the IMGX acquisition, the Company assumed the IMGX Plan, including all 200,652 IMGX stock options immediately outstanding prior to the IMGX acquisition, with each becoming an option to purchase Common Stock, subject to adjustment. Such stock options were the only awards that had been made under the IMGX Plan as of the closing of the IMGX acquisition. The IMGX Plan was adopted and approved by the board of directors and stockholders of IMGX in 2021. Following the assumption of the IMGX Plan by the Company, no new awards have been or will be made under the IMGX Plan.

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As of January 1, 2024, the number of shares of Common Stock available for issuance under the 2020 Plan automatically increased to 334,078 under the 2020 Plan’s evergreen provision.

As of March 31, 2024, there were an aggregate of 73 total shares available (but un-issuable) under the 2014 Plan, of which 28 are issued and outstanding, and 9 shares are reserved subject to issuance of restricted stock and RSUs.

As of March 31, 2024, there were an aggregate of 350,000 total shares available (but un - issuable) under the IMGX 2021 Plan, of which 200,652 are issued and outstanding.

As of March 31, 2024, 334,078 total shares were authorized under the 2020 Plan, of which 178,874 were issued and outstanding and 155,204 shares were available for potential issuances.

During the three months ended March 31, 2024 and 2023, stock option activity under the 2014 Plan, 2020 Plan, and IMGX 2021 Plan was as follows:


		Average		Remaining
	Number	Exercise		Contract	Intrinsic
	of Shares	Price		Life (Years)	Value
Outstanding at January 1, 2024	426	$	6,103.81	8.53	$	—
Assumed from IMGX	200,652		0.81	7.56		716,328
Outstanding at March 31, 2024	201,078	$	13.74	7.56	$	716,350
Exercisable at March 31, 2024	201,054	$	11.99	7.56	$	716,341

Outstanding at January 1, 2023	176	$	15,956.72	8.22	$	—
Granted	250		74.60	9.91		—
Outstanding at March 31, 2023	429	$	8,900.40	9.07	$	—
Exercisable at March 31, 2023	200	$	17,091.40	8.40	$	—

During the three months ended March 31, 2024, the Company assumed fully vested options to purchase 200,652 shares of the Company’s Common Stock issued under the IMGX 2021 Plan. During the three months ended March 31, 2023, the Board approved the grant of options to purchase 250 shares of the Company’s Common Stock pursuant to the 2020 Plan. In general, options granted under the 2020 Plan vest monthly over a 36-month period.

For the three months ended March 31, 2024 and 2023, the fair value of each option grant has been estimated on the date of grant using the Black-Scholes Option Pricing Model with the following weighted-average assumptions:


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

Using the Black-Scholes Option Pricing Model, the estimated weighted average fair value of an option to purchase one share of common stock assumed during the three months ended March 31, 2024 was $6.32. The estimated weighted average fair value of an option to purchase one share of common stock granted during the three months ended and March 31, 2023 was $61.00.

Restricted Stock and Restricted Stock Units

Restricted stock refers to shares of Common Stock subject to vesting based on certain service, performance, and market conditions. Restricted stock units (“RSUs”) refer to an award which constitutes a promise to grant shares of Common Stock at the end of a specified restriction period.

As of each March 31, 2024 and March 31, 2023, under the 2014 Plan, the Company had 5 shares of restricted stock outstanding and an aggregate unrecognized restricted Common Stock expense of approximately $269,500, which will be recognized when vesting of certain milestones become probable.

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During the three months ended March 31, 2024 and March 31, 2023, RSU activity under the 2020 Plan was as follows:


		Weighted-Average		Weighted-Average
	Number	Grant Date		Remaining Recognition
	of Shares	Fair Value		Period (Years)
Non-vested Outstanding at January 1, 2024	52,271	$	4.31	9.96
Awarded	120,532		3.80	—
Vested	(52,271)		4.31	—
Non-vested Outstanding at March 31, 2024	120,532	$	3.82	9.76

Non-vested Outstanding at January 1, 2023	—		—	—
Awarded	7,997	$	124.00	—
Vested	(2,003)		124.00	—
Non-vested Outstanding at March 31, 2023	5,994	$	124.00	0.75

During the three months ended March 31, 2024 and March 31, 2023, the Board approved the grant of 120,532 and 7,997 RSUs, respectively. All grants of RSUs were pursuant to the 2020 Plan and vest quarterly over a one-year period.

The total stock-based compensation expense for employees and non-employees is included in the accompanying condensed consolidated statements of operations and as follows:


	Three Months Ended March 31,
	2024		2023
Research and development	$	42,378	$	38,080
General and administrative		228,982		320,236
Total stock-based compensation expense	$	271,360	$	358,316

As of March 31, 2024, the Company had unrecognized stock-based compensation expense related to stock options and RSUs of approximately $0.6 million. Approximately $0.5 million of this unrecognized expense will be recognized over the average remaining vesting term of the stock awards of 0.76 years. Approximately $0.1 million of this unrecognized expense will vest upon achieving certain clinical and/or corporate milestones. The Company will recognize the expense related to these milestones when the milestones become probable.

As of March 31, 2023, the Company had unrecognized stock-based compensation expense related to stock options and RSUs of approximately $1.1 million. Approximately $0.9 million of this unrecognized expense will be recognized over the average remaining vesting term of the stock awards of 0.94 years. Approximately $0.2 million of this unrecognized expense will vest upon achieving certain clinical and/or corporate milestones. The Company will recognize the expense related to these milestones when the milestones become probable.

Note 12 – Agreements

License Agreement with Sanofi

On September 13, 2023, the Company entered into a License Agreement with Sanofi, pursuant to which the Company received a license to obtain certain exclusive worldwide rights to develop and commercialize Capeserod, a selective 5-HT4 receptor partial agonist which the Company intends to repurpose and develop for gastrointestinal indications.

The Company paid Sanofi an upfront payment of $500,000 in October 2023 and Sanofi will be eligible to receive up to $46 million in potential development and regulatory milestone payments and up to $235 million in potential commercial milestone payments. Sanofi will also be eligible to receive mid-to-high single-digit royalties on net sales, as well as a percentage of sublicense and transfer revenues with respect to Capeserod. Sanofi will also have a right of first refusal with respect to Capeserod out-licensing transactions.

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The upfront payment of $500,000 was recorded as research and development expense in the year ended December 31, 2023. Depending on the status of development at the time a contingent payment is recognized, the Company may determine that the payment should be expensed as research and development or be capitalized as an intangible asset. This determination will be based on the facts and circumstances that exist at the time a contingent payment is recognized.

The License Agreement shall expire on a country-by-country basis upon the later of: (i) the expiration of the last to expire valid claim of an applicable patent in such country covering such licensed product, (ii) the expiration of the regulatory exclusivity for such licensed product in the applicable country and (iii) the tenth anniversary of the date of first commercial sale of a licensed product in such country. Each party may terminate the License Agreement if the other party materially breaches its obligations under the License Agreement and fails to cure such material breach within 60 days from the date of such notice of breach, except in the case of payment breach, as to which the breaching party will have only a ten-day cure period. Sanofi may terminate the License Agreement upon any bankruptcy proceedings by the Company. The Company may terminate the License Agreement by providing Sanofi with at least 60 days prior written notice; provided, however, that Sanofi shall be entitled to any and all payments due and owed to Sanofi prior to the effective date of termination.

Note 13 – Leases

The Company leases its offices under operating leases which are subject to various rent provisions and escalation clauses.

The Company is a party to two real property operating leases for the rental of office space. The Company has office space of 3,472 square feet in Boca Raton, Florida that is used for its corporate headquarters with a term through August 31, 2026. The Company also has office space in Newport Beach, California with a term through April 30, 2025.

The Company’s leases expire at various dates through 2026. The escalation clauses are indeterminable and considered not material and have been excluded from minimum future annual rental payments.

Lease expenses amounted to approximately $35,000 and $37,000, respectively, for the three months ended March 31, 2024 and 2023.

The weighted-average remaining lease term and weighted-average discount rate under operating leases as of March 31, 2024 are:


	March 31,
	2024
Lease term and discount rate
Weighted-average remaining lease term (years)	2.4
Weighted-average discount rate	7.00	%

Maturities of operating lease liabilities as of March 31, 2024, were as follows:


2024 (remainder of year)	$	67,308
2025		88,788
2026		60,593
Total lease payments		216,689
Less imputed interest		(17,881)
Present value of lease liabilities	$	198,808

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Note 14 – Debt

Debt consists of the following:


			Related				Directors
			party				and Officer’s
	Revolving		promissory				Liability
	line of credit		notes		EIDL loan		Insurance		Total
Principal balance March 31, 2024	$	5,359,860	$	1,000,000	$	500,000	$	386,769	$	7,246,629
Debt discount		—		—		(461,971)		—		(461,971)
Total debt as of March 31, 2024	$	5,359,860	$	1,000,000	$	38,029	$	386,769	$	6,784,658

Current portion	$	—	$	—	$	—	$	386,769	$	386,769
Long-term portion, net	$	5,359,860	$	1,000,000	$	38,029	$	—	$	6,397,889

Aggregate future minimum principal maturities of notes payable as of December 31, are as follows:


2024	$	386,769
2025		6,359,860
2026		—
2027		—
Thereafter		500,000
Total	$	7,246,629

Revolving line of credit

In connection with the IMGX acquisition, the Company assumed a revolving line of credit. In October 2022, IMGX entered into a credit agreement, which allowed for a revolving line of credit (the “Revolver”) for borrowings up to $6,000,000, maturing on October 1, 2024, and bearing interest per annum of the prime rate plus 4.5%. The credit agreement was amended in September 2023 (the “First Amendment”) to increase the maximum borrowings of the Revolver to $7,500,000. The credit agreement was amended and restated on March 13, 2024 (the “Second Amendment”). Terms under the Second Amendment include a maturity date of September 13, 2025, interest per annum of the prime rate plus 6.0%, and no further draws on the line of credit after March 13, 2024.

As of March 31, 2024, the outstanding balance of the Revolver was $5.4 million with no available borrowings and accrued interest of $1.3 million.

Promissory notes

In connection with the IMGX acquisition, the Company assumed two promissory notes, one of which is with a related party. The notes are each in the amount of $0.5 million, accrue interest at a rate of the prime rate plus 4.5% per annum, and have a maturity date of September 30, 2025.

EIDL loan

In connection with the IMGX acquisition, the Company assumed an EIDL loan with a principal balance of $0.5 million bearing interest of 3.75% per annum, with interest payable monthly in arrears. All unpaid principal and interest are due at maturity on June 30, 2050.

Directors and Officer’s Liability Insurance

On November 30, 2023, the Company entered into 9-month financing agreements for its directors and officer’s liability insurance, as well as other corporate insurances, in the amount of approximately $683,000 that bears interest at an annual rate of 7.90%. Monthly payments, including principal and interest, are approximately $79,000 per month. The balance due under these financing agreements was approximately $387,000 at March 31, 2024 and $613,000 at December 31, 2023.

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Note 15 – Net Income (Loss) per Common Share

Basic net income (loss) per share is computed by dividing net income (loss) available to Common Stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect, in periods in which they have a dilutive effect, the impact of common shares issuable upon exercise of stock options and warrants and conversion of convertible debt that are not deemed to be anti-dilutive. The dilutive effect of the outstanding stock options, warrants, and RSUs is computed using the treasury stock method. The dilutive effect of the outstanding Series G convertible preferred stock and Series B convertible preferred stock is computed using the if-converted method.

As of March 31, 2024, basic and diluted weighted average shares outstanding includes pre-funded warrants of 269,000 which had not yet been converted into Common Stock. For the three months ended March 31, 2024 stock options in the amount of 31,542 and warrants in the amount of 2,584,001 were excluded from the calculation of diluted net income per share as they did not have a dilutive effect. As of March 31, 2023, basic weighted average shares outstanding includes pre-funded warrants of 44,750 which had not yet been converted into Common Stock.

Basic and diluted net income per share was calculated as follows:


	Three Months Ended
	March 31, 2024
Net income applicable to common shareholders - basic	$	5,501,462
Preferred stock dividends		66,144
Net income applicable to common shareholders - diluted	$	5,567,606
Basic weighted average shares outstanding		1,761,953
Series G convertible preferred stock		12,373,226
Series B convertible preferred stock		139
Stock options		169,536
Common stock warrants		118,084
RSUs not yet issued		88,523
Diluted weighted average shares outstanding		14,511,461
Basic net income per share	$	3.12
Diluted net income per share	$	0.38

All shares of Common Stock that may potentially be issued in the future are as follows:


	March 31, 2024	March 31, 2023
	(unaudited)	(unaudited)
Series G convertible preferred stock	12,373,226	—
Common stock warrants	2,702,085	234,377
Stock options	201,078	429
RSUs not yet issued	120,537	8,011
Series B convertible preferred stock (1)	139	155
Restricted stock not yet issued	4	8
Total shares of common stock issuable	15,397,069	242,980

(1)	Series B convertible preferred stock is assumed to be converted at the rate of $32,340 per common share, which is the conversion price as of March 31, 2024.

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Note 16 - Employee Benefit Plans

401(k) Plan

Since 2015, the Company has sponsored a multiple employer defined contribution benefit plan, which complies with Section 401(k) of the Internal Revenue Code covering substantially all employees of the Company. All employees are eligible to participate in the plan. Employees may contribute from 1% to 100% of their compensation and the Company matches an amount equal to 100% on the first 6% of the employee contribution and may also make discretionary profit-sharing contributions.

Employer contributions under this 401(k) plan amounted to approximately $37,000 and $26,000 for the three months ended March 31, 2024 and 2023, respectively.

Note 17 - Income Taxes

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Where applicable, the Company records a valuation allowance to reduce any deferred tax assets that it determines will not be realizable in the future.

The Company recognizes the benefit of an uncertain tax position that it has taken or expects to take on income tax returns it files if such tax position is more likely than not to be sustained on examination by the taxing authorities, based on the technical merits of the position. These tax benefits are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. Although the Company believes that it has adequately reserved for uncertain tax positions (including interest and penalties), it can provide no assurance that the final tax outcome of these matters will not be materially different. The Company makes adjustments to these reserves in accordance with the income tax accounting guidance when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on the Company’s financial condition and operating results. Carryforward attributes that were generated in tax years prior to those that remain open for examination may still be adjusted by relevant tax authorities upon examination if they either have been, or will be, used in a future period.

In applying the estimated annual effective tax rate approach prescribed under ASC 740 - 270 and based on present evidence and conclusions around the realizability of deferred tax assets, the Company determined that any deferred tax benefits related to the forecasted tax rate and pretax activity during the first quarters of 2024 and 2023 are neither more likely than not to be realized in the current year nor realizable as a deferred tax asset at the end of the year. Therefore, the appropriate amount of income tax benefit to recognize related to deferred tax assets generated during the three months ended March 31, 2024 and 2023 is zero.

The Company’s effective income tax rate was approximately 160% and 0% for the three months ended March 31, 2024 and 2023, respectively. The income tax provision for interim periods is determined using an estimate of the annual effective tax rate adjusted for discrete items. The Company’s effective tax rate for the three months ended March 31, 2024 differs from the applicable statutory tax rate primarily due to the impact of the accounting for the IMGX Merger during the period, which resulted in the release of a portion of the valuation allowance that had previously been recorded against the deferred tax assets of the Company, resulting in a $14.9 million income tax benefit for the three months ended March 31, 2024. The change in valuation allowance was determined based on the weight of available evidence as of the present reporting period and accounted for by the Company pursuant to ASC 805 - 740 - 30 - 3 in the Statement of Operations. The Company’s effective tax rate for the three months ended March 31, 2023 differs from the applicable statutory tax rate primarily due to the full valuation allowance recorded against its deferred tax assets during the period.

Note 18 - Subsequent Events

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were available to be issued. The Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements except for the items noted below.

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Registered Direct Offering

On May 14, 2024, the Company closed on a Registered Direct Offering with an institutional investor for the purchase and sale of 366,000 shares of the Company’s Common Stock (or Common Stock equivalents) at a price of $2.95 per share. In addition, the Company issued to the investor warrants to purchase up to 732,000 shares of Common Stock. The warrants have an exercise price of $2.70 per share, are exercisable immediately following the date of issuance, and have a term of six years following the date of issuance. Roth Capital Partners acted as the exclusive placement agent for the offering. The gross proceeds to the Company from this offering were approximately $1.1 million, before deducting the placement agent’s fees and other offering expenses payable by the Company.

Share Issuances

In April 2024, an investor exercised pre-funded warrants to purchase 269,000 shares of the Company’s Common Stock in connection with the March 2024 Offering, the Company issued an aggregate of 150,000 shares of its Common Stock to consultants, and an aggregate of 30,882 shares of Common Stock upon the vesting of RSUs.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References in this report to “First Wave,” “AzurRx,” “Company,” “we,” “us,” “our,” or similar references mean First Wave BioPharma, Inc. and its subsidiaries on a consolidated basis. References to “First Wave BioPharma” refer to First Wave BioPharma, Inc. on an unconsolidated basis. References to “AzurRx SAS” refer to First Wave BioPharma’s former wholly owned subsidiary through which we previously conducted our European operations. References to “FWB” refer to First Wave Bio, Inc. and references to “IMGX” refer to ImmunogenX, Inc., First Wave BioPharma’s wholly-owned subsidiaries. References to the “SEC” refer to the U.S. Securities and Exchange Commission.

Forward-Looking Statements

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this interim report. Our consolidated financial statements have been prepared in accordance with U.S. GAAP. The following discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including, without limitation, statements regarding our expectations, beliefs, intentions or future strategies that are signified by the words “expect,” “anticipate,” “intend,” “believe,” or similar language. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Our business and financial performance are subject to substantial risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements. In evaluating our business, you should carefully consider the information set forth under the heading “Risk Factors” included in our Annual Report filed on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 29, 2024. Readers are cautioned not to place undue reliance on these forward-looking statements.

Overview

We are engaged in the research and development of targeted, non-systemic therapies for the treatment of patients with gastrointestinal (“GI”) diseases. Non-systemic therapies are non-absorbable drugs that act locally, i.e., in the intestinal lumen, skin or mucosa, without reaching an individual’s systemic circulation.

We are currently focused on developing a therapeutic pipeline with multiple late-stage clinical programs built around four proprietary technologies – Latiglutenase, a targeted oral minimally absorbed recombinant enzyme designed to breakdown gluten into non-immunogenic peptides for the treatment of symptomatic celiac disease as an adjunct to the gluten free diet; the biologic Adrulipase, a recombinant lipase enzyme designed to enable the digestion of fats and other nutrients in cystic fibrosis and chronic pancreatitis patients with exocrine pancreatic insufficiency; Capeserod, a selective 5-HT4 receptor partial agonist which we are developing for the treatment of gastroparesis; and Niclosamide, an oral small molecule with anti-inflammatory properties for patients with inflammatory bowel diseases such as ulcerative colitis and Crohn’s disease.

In March 2024, we announced the closing of a merger with ImmunogenX, Inc. (“IMGX”), a private, clinical-stage biopharmaceutical company founded in 2013, which is developing the biologic, Latiglutenase, for celiac disease. IMGX is also developing CypCel, a metabolic marker compound that can measure the state of small-intestinal recovery of celiac patients undergoing gluten-free diets (“GFDs”).

In December 2023, we announced that we have entered into a non-binding term sheet to sell our Niclosamide program. The non-binding term sheet includes a low seven-figure upfront payment to us for rights to Niclosamide, as well as economics related to future milestones and royalties. The transaction is expected to close in the first half of 2024.

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Recent Developments

March 2024 Registered Direct Offering

On March 6, 2024, we completed the March 2024 Offering priced at market under Nasdaq rules, for an aggregate of (i) 173,100 shares of Common Stock, (ii) pre-funded warrants to purchase up to an aggregate of 352,525 shares of Common Stock and (iii) common warrants to purchase up to an aggregate of 525,625 shares of Common Stock. The public offering price for each share of Common Stock and accompanying March 2024 Warrant to purchase one share of Common Stock was $7.61 per share. The March 2024 Pre-Funded Warrants have an exercise price of $0.0001 per share, are exercisable immediately and will expire when exercised in full. The March 2024 Warrants have an exercise price of $7.48 per share, are exercisable immediately and will expire five years from the initial exercise date. We received gross proceeds of approximately $4.0 million less placement agent’s fees and other offering expenses of approximately $400,000. The March 2024 Offering included customary registration rights, for registration under the Securities Act, of the shares underlying the warrants in the March 2024 Offering.

May 2024 Registered Direct Offering

On May 10, 2024, we announced that we entered into a Registered Direct Offering (the “May 2024 Offering”) likewise priced at market under Nasdaq rules. The May 2024 Offering was for an aggregate of (i) 275,000 shares of Common Stock, (ii) pre-funded warrants (the “May 2024 Pre-Funded Warrants”) to purchase up to an aggregate of 91,000 shares of Common Stock and (iii) common warrants (the “May 2024 Warrants”) to purchase up to an aggregate of 732,000 shares of Common Stock. The May 2024 Pre-Funded Warrants had the same exercise price and exercise terms as the March 2024 Pre-Funded Warrants. The public offering price for each share of Common Stock in the May 2024 Offering was $2.95, and the public offering price for each May 2024 Pre-Funded Warrant, was $2.9499. The May 2024 Warrants have an exercise price of $2.70 per share, are exercisable immediately and will expire six years from the initial exercise date. In this offering, we received gross proceeds of approximately $1.1 million less placement agent’s fees and other offering expenses.

In connection with the May 2024 Offering, we were obligated to file a registration statement with the SEC to register the shares underlying the warrants sold in the offering under the Securities Act, within 30 days of the closing of the May 2024 Offering and have such registration statement declared effective by the SEC within 60 days of such closing, or in the case of full review of the applicable registration statement by the SEC, within 120 days of such closing. If such registration statement is not so filed or declared effective, on each applicable monthly anniversary for which such registration even is not achieved or cured, we are required to pay to the holder an amount in cash, as partial liquidated damages and not as a penalty, equal to the product of 1.0% multiplied by the product of the most recent closing price of our Common Stock on the applicable event date, and the number of shares underlying such warrants, until the shares underlying such warrants are freely tradeable under Rule 144 of the Securities Act or we regain compliance with the registration rights. If we fail to pay partial liquidated damages required thereby within seven (7) days after the date payable, we are required to pay interest thereon at a rate of 12% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the holder, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The partial liquidated damages provisions apply on a daily pro rata basis for any applicable portion of a month.

Nasdaq Continued Listing Requirements

On August 17, 2023, we received a letter from the Listing Qualifications Staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that we were not in compliance with the $2.5 million minimum stockholders’ equity requirement for continued listing of our common stock on Nasdaq as set forth in Nasdaq Listing Rule 5550(b)(1) (the “Minimum Stockholder’s Equity Rule”). In that regard, we reported stockholders’ equity of $881,960 in our Quarterly Report on Form 10-Q for the period ended June 30, 2023 (we did not then, and do not now, meet the alternative compliance standards relating to the market value of listed securities of $35 million or net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the last three most recently completed fiscal years). On April 1, 2024, we received a determination from the Staff that we are back in compliance with the Minium Stockholder’s Equity Rule and that the matter is closed.

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On October 26, 2023, we received a notice from the Staff of Nasdaq indicating that in connection with an offering completed in July 2023 (the “July 2023 Offering”), we were not in compliance with Nasdaq’s shareholder approval requirements set forth in listing rule 5635(d), which requires prior shareholder approval for transactions, other than public offerings, involving the issuance of 20% or more of the pre-transaction shares outstanding at less than the Minimum Price, defined as a price that is the lower of: (i) the Nasdaq official closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement; or (ii) the average Nasdaq official Closing Price of the common stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the binding agreement. On December 12, 2023, during the Special Meeting, our stockholders ratified our entry into the July 2023 Offering as we received the affirmative vote of the majority of the votes cast by shares of our common stock present or represented by proxy and entitled to vote at the Special Meeting. On March 19, 2024, we received a Letter of Reprimand from the Nasdaq Listing Qualifications Staff (the “Letter of Reprimand”) stating that, while we failed to comply with Nasdaq’s continued listing requirements, our violation of listing rule 5635 (d) does not appear to have been the result of a deliberate intent to avoid compliance, and as such, the Staff does not believe that delisting our securities is an appropriate sanction and that it is appropriate to close these matters by issuing the Letter of Reprimand.

Liquidity and Capital Resources

To date, we have not generated any revenues and have experienced net losses and negative cash flows from our activities.

As of March 31, 2024, we had cash and cash equivalents of approximately $3.4 million, and had sustained cumulative losses attributable to common stockholders of approximately $178.8 million. Subsequent to March 31, 2024, we have raised aggregate gross proceeds of approximately $1.1 million from a May 2024 Registered Direct Offering. Based on our cash on hand at March 31, 2024, we anticipate having sufficient cash to fund planned operations into June 2024, however, the acceleration or reduction of cash outflows by management can significantly impact the timing for the need to raise additional capital to complete development of our products. We have not yet achieved profitability and anticipate that we will continue to incur net losses for the foreseeable future. We expect that our expenses will continue to grow and, as a result, we will need to generate significant product revenues to achieve profitability. We may never achieve profitability. As such, we are dependent on obtaining, and are continuing to pursue, the necessary funding from outside sources, including obtaining additional funding from the sale of securities in order to continue our operations. Without adequate funding, we may not be able to meet our obligations. We believe these conditions may raise substantial doubt about our ability to continue as a going concern.

We have funded our operations to date primarily through the issuance of debt, convertible debt securities, preferred stock, as well as the issuance of Common Stock in various public offerings and private placement transactions. We expect to incur substantial expenditures in the foreseeable future for the development of adrulipase, niclosamide and any other drug candidates. We will require additional financing to develop our drug candidates, run clinical trials, prepare regulatory filings and obtain regulatory approvals, fund operating losses, and, if deemed appropriate, establish manufacturing, sales and marketing capabilities. Our current financial condition raises substantial doubt about our ability to continue as a going concern. Our failure to raise capital as and when needed would have a material adverse impact on our financial condition, our ability to meet our obligations, and our ability to pursue our business strategies. We will seek funds through additional equity and/or debt financings, collaborative or other arrangements with corporate sources, or through other sources of financing.

Although, we are primarily focused on the development of our drug candidates, including adrulipase and niclosamide, we are also opportunely focused on expanding our product pipeline of clinical assets through collaborations, and also through acquisitions of products and companies. We are continually evaluating potential asset acquisitions business combinations, and other partnership opportunities. To finance such acquisitions, we might raise additional equity capital, incur additional debt, or both.

We are able to sell securities on a shelf registration statement pursuant to the ATM Agreement with H.C. Wainwright & Co., LLC. Under current Securities and Exchange Commission regulations, because our public float was less than $75 million at the relevant measurement period pursuant to General Instruction I.B.6. to Form S-3, the amount we can raise through primary public offerings of securities in any subsequent twelve-month period under our shelf registration statement is limited to an aggregate of one-third of our public float until such time, if any, as our public float is $75 million or more.

Our ability to issue securities is subject to market conditions. Each issuance under the shelf registration statements will require the filing of a prospectus supplement identifying the amount and terms of the securities to be issued.

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Consolidated Results of Operations for the Three Months Ended March 31, 2024 and 2023

The following table summarizes our consolidated results of operations for the periods indicated:


	Three Months Ended
	March 31,				Increase
	2024		2023		(Decrease)
Operating expenses:
Research and development expenses	$	565,962	$	1,361,683	$	(795,721)
General and administrative expenses		8,659,692		2,700,742		5,958,950
Total operating expenses		9,225,654		4,062,425		5,163,229
Other expenses		66,627		8,228		58,399
Loss before income tax benefit	$	(9,292,281)	$	(4,070,653)	$	5,221,628
Income tax benefit		14,859,887		—		14,859,887
Net income (loss)	$	5,567,606	$	(4,070,653)	$	9,638,259

Research and Development Expense

Research and development expenses include expenses primarily relating to the development of our Latiglutenase, Capeserod, Adrulipase and Niclosamide drug candidates.

Research and development expenses for the three months ended March 31, 2024 totaled approximately $0.6 million, a decrease of approximately $0.8 million, or 58%, over the approximately $1.4 million recorded for the three months ended March 31, 2023.

The approximately $0.8 million decrease in total research and development expenses was primarily attributable to decreases of approximately $0.9 million in clinical related expenses in connection with our Phase 2b Adrulipase SPAN clinical trial which occurred during the three months ended March 31, 2023.

We expect research and development expenses to increase during the remainder of this fiscal year as we begin work on our Latiglutenase asset.

General and Administrative Expense

General and administrative expenses include expenses primarily relating to our overall operations and being a public company, including personnel, legal and financial professional services, insurance, corporate communications and investor relations, listing and compliance related costs, rent, and expenses associated with obtaining and maintaining intellectual property and patents, among others.

General and administrative expenses for the three months ended March 31, 2024 totaled approximately $8.6 million, an increase of approximately $ 5.9 million, or 220% over the approximately $2.7 million recorded for the three months ended March 31, 2023.

The approximately $5.9 million increase in total general and administrative expenses was primarily attributable to $4.0 million of non-cash expense recorded for the Tungsten financial advisor fees and as well as increases of approximately $0.8 million in legal fees, $0.8 million in share-based compensation for consultants, $0.2 million in professional fees, and $0.1 million in personnel related costs.

We expect general and administrative expenses to decrease during the remainder of this fiscal year.

Other Expenses

Other expenses for the three months ended March 31, 2024 increased approximately $0.06 million over other expenses recorded for the three months ended March 31, 2023. The increase in other expenses was mainly due to interest expense related to the revolving line of credit and EIDL loan assumed with the IMGX acquisition.

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Income Tax Benefit

A tax benefit of approximately $14.9 million was recorded in the three months ended March 31, 2024 due to the release of a portion of our valuation allowance that had previously been recorded against our deferred tax assets in connection with the IMGX Merger. The release of the valuation allowance was due to the acquisition of intangible assets which are considered definite lived for tax purposes.

Net Income (Loss)

As a result of the factors above, our net income for the three months ended March 31, 2024 totaled approximately $5.6 million, an increase of approximately $9.6 million, or 237%, over the net loss of approximately $4.1 million recorded for the three months ended March 31, 2023.

Cash Flows for the Three Months Ended March 31, 2024 and 2023

The following table summarizes our cash flows for the periods indicated:


	Three Months Ended
	March 31,
	2024		2023
Net cash (used in) provided by:
Operating activities	$	(3,746,956)	$	(2,845,578)
Investing activities		88,169		—
Financing activities		3,378,930		3,547,108
Net (decrease) increase in cash, cash equivalents and restricted cash	$	(279,857)	$	701,530

Operating Activities

Net cash used in operating activities during the three months ended March 31, 2024 of approximately $3.7 million was primarily attributable to our non-cash change in deferred tax valuation allowance of $14.9 million, partially offset by net income of $5.6 million and other non-cash expenses totaling approximately $5.5 million. Other non-cash expenses include stock issued to our financial advisors in connection with the IMGX acquisition of $4.0 million, common stock granted to consultants of $0.8 million, and stock-based compensation of $0.3 million; a decrease in prepaid expenses of $0.3 million and a net decrease in accounts payable and accrued expenses of $0.1 million.

Net cash used in operating activities during the three months ended March 31, 2023 of approximately $2.8 million was primarily attributable to our net loss of approximately $4.1 million, partially offset by non-cash expenses of approximately $0.4 million, mainly related to stock-based compensation, as well as a decrease in prepaid expenses of $0.5 million and increases in accounts payable and accrued expense of approximately $0.3 million.

Investing Activities

Net cash provided by investing activities during the three months ended March 31, 2024 of approximately $0.1 million was due to the net cash acquired in the acquisition of IMGX.

Financing Activities

Net cash provided by financing activities of approximately $3.4 million for the three months ended March 31, 2024 was primarily due to net proceeds of approximately $3.6 million from the March 2024 registered direct offering, partially offset by approximately $0.2 million of cash repayments of the note payable financing for corporate insurances.

Net cash provided by financing activities of approximately $3.5 million for the three months ended March 31, 2023 was primarily due to net proceeds of approximately $3.8 million from the March 2023 private placement offering, partially offset by approximately $0.2 million of cash repayments of the note payable financing for corporate insurances.

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Critical Accounting Policies and Estimates

Our accounting policies are essential to understanding and interpreting the financial results reported on the consolidated financial statements. The significant accounting policies used in the preparation of our consolidated financial statements are summarized in Note 2 to the consolidated financial statements and notes thereto found in our Annual Report on Form 10-K for the year ended December 31, 2023. Certain of those policies are considered to be particularly important to the presentation of our financial results because they require us to make difficult, complex or subjective judgments, often as a result of matters that are inherently uncertain.

During the three months ended March 31, 2024, there were no material changes to matters discussed under the heading “Critical Accounting Policies and Significant Judgments and Estimates” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As required by Rule 13a - 15(b) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”) conducted an evaluation as of the end of the period covered by this Quarterly Report on Form 10 - Q, of the effectiveness of our disclosure controls and procedures as defined in Rules 13a - 15(e) and 15d - 15(e) under the Exchange Act. Based on that evaluation, our CEO and our CFO each concluded that our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act, (i) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) is accumulated and communicated to our management, including our CEO and our CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a - 15(d) or 15d - 15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10 - Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On January 27, 2023, David Hoffman, a former member of the Company’s board of directors, filed a complaint in the Court of Chancery of the State of Delaware against the Company seeking advancement of his attorneys’ fees and expenses relating to certain aspects of his service as a director of the Company (the “Complaint”). The Complaint alleges that Mr. Hoffman is entitled to reimbursement of approximately $250,000 of alleged fees and expenses he has purportedly incurred in the lawsuit filed in the Court of Chancery. The case went to trial in May 2023 and the court found in favor of the Company in September 2023. Mr. Hoffman filed a motion to reargue or amend in October 2023 and the court denied this request. The matter is closed at this time.

ITEM 1A. RISK FACTORS

Our failure to maintain compliance with applicable Nasdaq’s continued listing requirements could result in the delisting of our Common Stock.

Our common stock is currently listed for trading on The Nasdaq Stock Market LLC. We must satisfy applicable listing requirements of Nasdaq, to maintain the listing of our common stock on The Nasdaq Stock Market LLC.

On August 17, 2023, we received notice from the Listing Qualifications Staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that we were not in compliance with the $2.5 million minimum stockholders’ equity requirement for continued listing of the Common Stock on Nasdaq, as set forth in Nasdaq Listing Rule 5550(b)(1) (the “Minimum Stockholders’ Equity Rule”). In that regard, we reported a stockholders’ deficit of $(881,960) in our Quarterly Report on Form 10-Q for the period ended June 30, 2023 (we did not then, and do not now, meet the alternative compliance standards relating to the market value of listed securities of $35 million or net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the last three most recently completed fiscal years). On October 2, 2023, we submitted a plan to the Staff to regain compliance with the Minimum Stockholders’ Equity Rule. On November 13, 2023, we filed our Quarterly Report on Form 10-Q for the period ended September 30, 2023, reporting total stockholders’ equity of $3,278,805 as of September 30, 2023. On March 29, 2024, we filed our Annual Report on Form 10-K for the year ended December 31, 2023, reporting total stockholders’ equity of $3,602,929 as of December 31, 2023. On April 1, 2024, we received a letter from Nasdaq Staff stating that, based on our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which evidenced stockholders’ equity of $3,602,929, the Staff had determined that we were in compliance with the Minimum Stockholders’ Equity Rule and that the matter was now closed.

As we have previously reported, on August 24, 2023, we received a notice (the “Minimum Bid Price Notice”) from the Staff indicating that, based upon the closing bid price of our common stock for the last 30 consecutive business days, we were not in compliance with the requirement to maintain a minimum bid price of $1.00 per share for continued listing on The Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Rule”). We were provided a compliance period of 180 calendar days from the date of the Notice, or until February 20, 2024, to regain compliance with the Minimum Bid Price Rule, pursuant to Nasdaq Listing Rule 5810(c)(3)(A). If at any time before February 20, 2024, the closing bid price of the Common Stock closes at or above $1.00 per share for a minimum of 10 consecutive business days, subject to Nasdaq’s discretion to extend this period pursuant to Nasdaq Listing Rule 5810(c)(3)(G) to 20 consecutive business days, Nasdaq will provide written notification that we have achieved compliance with the minimum bid price requirement, and the matter would be resolved. On January 4, 2024, we received notice from Nasdaq Listing Qualifications stating that the Staff had determined that for the prior eleven consecutive business days, from December 18, 2023, to January 3, 2024, the closing bid price of our Common Stock had been at $1.00 per share or greater, and accordingly, we had regained compliance with the Bid Price Rule.

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On October 26, 2023, we received notice from the Staff of Nasdaq indicating that, in connection with our July 2023 Offering, we were not in compliance with Nasdaq’s shareholder approval requirements set forth in Listing Rule 5635(d), which requires prior shareholder approval for transactions, other than public offerings, involving the issuance of 20% or more of the pre-transaction shares outstanding at less than the Minimum Price, defined as a price that is the lower of: (i) the Nasdaq official closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement; or (ii) the average Nasdaq official Closing Price of the common stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the binding agreement. On December 12, 2023, during the Special Meeting, our stockholders ratified our entry into the Offering as we received the affirmative vote of the majority of the votes cast by shares of our common stock present or represented by proxy and entitled to vote at the Special Meeting. On March 19, 2024, we received the Letter of Reprimand from the Nasdaq Listing Qualifications Staff stating that, while we failed to comply with Nasdaq’s continued listing requirements, our violation of listing rule 5635(d) does not appear to have been the result of a deliberate intent to avoid compliance, and as such, the Staff does not believe that delisting our securities is an appropriate sanction and that it is appropriate to close these matters by issuing the Letter of Reprimand.

There can be no assurance that we will be able to ultimately sustain compliance with all applicable requirements for continued listing on The Nasdaq Stock Market LLC. In 2020, the SEC approved a previously proposed Nasdaq rule change to expedite delisting of securities with a closing bid price at or below $0.10 for 10 consecutive trading days during any bid price compliance period and that have had one or more reverse stock splits with a cumulative ratio of one for 250 or more shares over the prior two-year period. In addition, if a company falls out of compliance with the $1.00 minimum bid price after completing reverse stock splits over the immediately preceding two years that cumulatively result in a ratio one for 250 shares, the company will not be able to avail itself of any bid price compliance periods under Rule 5810(c)(3)(A), and Nasdaq will instead require the issuance of a Staff delisting determination. We could appeal the determination to a hearings panel, which could grant us a 180-day exception to remain listed if it believes we would be able to achieve and maintain compliance with the bid price requirement. Following the exception, the company would be subject to the procedures applicable to a company with recurring deficiencies (Nasdaq Rule 5815(d)(4)(B)).

Additionally, on March 28, 2024, we received a letter from the Nasdaq Listing Qualifications Department (the “Staff”) stating that the Staff had determined First Wave’s acquisition of ImmunogenX constitutes a business combination that results in a “Change of Control” pursuant to Nasdaq Listing Rule 5110(a), and that, as a result, we will be required to satisfy all of Nasdaq’s initial listing criteria and to complete Nasdaq’s initial listing process prior to shareholder approval of the conversion of the Series G Preferred Stock, or other material changes triggering a change of control.

In the event that we are unable to sustain compliance with all applicable requirements to remain listed on the Nasdaq, our common stock may be delisted from Nasdaq. If our common stock were delisted from Nasdaq, trading of our common stock would most likely take place on an over-the-counter market established for unlisted securities, such as the OTCQB or the Pink Market maintained by OTC Markets Group Inc. An investor would likely find it less convenient to sell, or to obtain accurate quotations in seeking to buy, our common stock on an over-the-counter market, and many investors would likely not buy or sell our common stock due to difficulty in accessing over-the-counter markets, policies preventing them from trading in securities not listed on a national exchange or other reasons. In addition, as a delisted security, our common stock would be subject to SEC rules as a “penny stock,” which impose additional disclosure requirements on broker-dealers. The regulations relating to penny stocks, coupled with the typically higher cost per trade to the investor of penny stocks due to factors such as broker commissions generally representing a higher percentage of the price of a penny stock than of a higher-priced stock, would further limit the ability of investors to trade in our common stock. In addition, delisting would materially and adversely affect our ability to raise capital on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities. For these reasons and others, delisting would adversely affect the liquidity, trading volume and price of our common stock, causing the value of an investment in us to decrease and having an adverse effect on our business, financial condition and results of operations, including our ability to attract and retain qualified employees and to raise capital.

There have been no other material changes in or additions to the risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2023.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

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ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

(b)

Exhibits

Exhibit No.		Description
2.1#		Agreement and Plan of Merger dated March 13, 2024, by and among First Wave BioPharma, Inc., IMMUNO Merger Sub II, LLC, and ImmunogenX Inc. (incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8 - K filed with the SEC on March 13, 2024).
3.1		Amended and Restated Certificate of the Registrant (incorporated by reference to Exhibit 3.1 of the Company’s Annual Report on Form 10-K filed with the SEC on March 20, 2023).
3.2		Certificate of Designation of Series G Non-Voting Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the SEC on March 13, 2024)
4.1		Form of Pre – Funded Warrant (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the SEC on March 5, 2024).
4.2		Form of Common Warrant (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed with the SEC on March 5, 2024).
4.3		Form of Assumed Warrant (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8 - K filed with the SEC on March 13, 2024).
4.4		Form of Pre - Funded Warrant (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8 - K filed with the SEC on May 13, 2024).
4.5		Form of Common Warrant (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8 - K filed with the SEC on May 13, 2024).
10.1		Form of Purchase Agreement (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on March 3, 2024).
10.2		Form of Placement Agency Agreement (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on March 5, 2024).
10.3		Amended Credit Agreement, dated as of October 3, 2022 and amended on September 6, 2023 and March 13, 2024, by and between the Company and Mattress Liquidators, Inc. (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8 - K filed with the SEC on March 13, 2024).
10.4		Second Amended and Restated Revolving Loan Promissory Note, dated March 13, 2024 (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8 - K filed with the SEC on March 13, 2024).
10.5		Security Agreement, dated as of October 3, 2022, by and between ImmunogenX and Mattress Liquidators, Inc. (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8 - K filed with the SEC on March 13, 2024).
10.6		Lender Support Letter, dated as of March 13, 2024, by and between ImmunogenX and Mattress Liquidators, Inc. (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8 - K filed with the SEC on March 13, 2024).
10.7		Form of Shareholder Note (incorporated by reference to Exhibit 10.5 of the Company’s Current Report on Form 8 - K filed with the SEC on March 13, 2024).
10.8		Form of Shareholder Security Agreement (incorporated by reference to Exhibit 10.6 of the Company’s Current Report on Form 8 - K filed with the SEC on March 13, 2024).
10.9+		Offer Letter, dated as of March 13, 2024, by and between Dr. Syage and the Company (incorporated by reference to Exhibit 10.7 of the Company’s Current Report on Form 8 - K filed with the SEC on March 14, 2024).
10.10		Form of Placement Agency Agreement (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on May 13, 2024).
10.11		Form of Purchase Agreement (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8 - K filed with the SEC on May13, 2024).
31.1*		Certification of the Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of the Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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32.1**		Certification of the Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL Document and included in Exhibit 101)

*filed herewith

**furnished, not filed

# Certain annexes, schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted attachment to the SEC on a confidential basis upon request.

† Indicates a management contract or compensation plan, contract or arrangement.

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SIGNATURES

Pursuant to the requirements 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.

	FIRST WAVE BIOPHARMA, INC.

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

	By	/s/ Sarah Romano
		Sarah Romano
		Chief Financial Officer
Date: May 14, 2024		(Principal Financial and Accounting Officer)

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EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James Sapirstein, Chief Executive Officer of First Wave BioPharma, Inc. (the “Company”), certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of the Company;

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;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-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:

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;

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

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

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

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

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: May 14, 2024	/s/ James Sapirstein
	James Sapirstein
	Chief Executive Officer
	(Principal Executive Officer)

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Sarah Romano, Chief Financial Officer of First Wave BioPharma, Inc. (the “Company”), certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of the Company;

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;

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

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: May 14, 2024	/s/ Sarah Romano
	Sarah Romano
	Chief Financial Officer
	(Principal Financial and Accounting 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 First Wave BioPharma, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James Sapirstein, Chief Executive Officer of the Company, and Sarah Romano, Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; 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: May 14, 2024	/s/ James Sapirstein
	James Sapirstein
	Chief Executive Officer
	(Principal Executive Officer)

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

Document And Entity Information - shares	3 Months Ended
Document And Entity Information - shares	Mar. 31, 2024	May 10, 2024
Document And Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity File Number	001-37853
Entity Registrant Name	First Wave BioPharma, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-4993860
Entity Address, Address Line One	777 Yamato Road, Suite 502
Entity Address, City or Town	Boca Raton
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33431
City Area Code	561
Local Phone Number	589-7020
Title of 12(b) Security	Common stock, par value $0.0001 per share
Trading Symbol	FWBI
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		2,475,090
Entity Central Index Key	0001604191
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Current Assets:
Cash and cash equivalents	$ 3,431,913	$ 3,711,770
Prepaid expenses	4,058,053	1,244,466
Total Current Assets	7,489,966	4,956,236
Property, equipment, and leasehold improvements, net	25,749	14,565
Other Assets:
Restricted cash	21,522	21,522
Patents and tradenames	365,486
In - process R&D	63,000,000
Goodwill	20,038,508	1,684,182
Operating lease right-of-use assets	181,421	195,440
Deposits	11,250	11,250
Total Other Assets	83,618,187	1,912,394
Total Assets	91,133,902	6,883,195
Current Liabilities:
Accounts payable	1,996,519	554,277
Accrued expenses	2,554,446	825,290
Accrued dividend payable	1,135,760	1,069,616
Note payable	386,769	612,784
Operating lease liabilities	71,216	67,111
Other current liabilities	28,546	4,239
Total Current Liabilities	6,173,256	3,133,317
Long - term debt	6,397,889
Deferred tax liability	571,221
Non-current operating lease liabilities	127,592	146,949
Total Liabilities	13,269,958	3,280,266
Mezzanine Equity:
Total Mezzanine Equity	61,681,100
Stockholders' Equity:
Common stock - Par value $0.0001 per share; 100,000,000 shares authorized; 2,025,208 and 1,560,998 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively	203	156
Additional paid-in capital	194,943,707	187,931,445
Accumulated deficit	(178,761,066)	(184,328,672)
Total Stockholders' Equity	16,182,844	3,602,929
Total Liabilities, Mezzanine Equity and Stockholders' Equity	91,133,902	6,883,195
Series B Preferred Stock
Stockholders' Equity:
Preferred stock	0	0
Series C Preferred Stock
Stockholders' Equity:
Preferred stock	0	0
Series D Preferred Stock
Stockholders' Equity:
Preferred stock	0	0
Series E Preferred Stock
Stockholders' Equity:
Preferred stock	0	0
Series F Preferred Stock
Stockholders' Equity:
Preferred stock	0	$ 0
Series G Preferred Stock
Mezzanine Equity:
Total Mezzanine Equity	$ 61,681,100

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued	2,025,208	1,560,998
Common stock, shares outstanding (in shares)	2,025,208	1,560,998
Preferred stock, par value (in dollars per share)	$ 0.0001
Preferred stock, shares designated (in shares)	10,000,000
Series B Preferred Stock
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares designated (in shares)	5,194.81	5,194.81
Preferred stock, shares issued (in shares)	504.81	514.96
Preferred stock, shares outstanding (in shares)	504.81	514.96
Series C Preferred Stock
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares designated (in shares)	75,000	75,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Series D Preferred Stock
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares designated (in shares)	150	150
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Series E Preferred Stock
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares designated (in shares)	150	150
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Series F Preferred Stock
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares designated (in shares)	7,000	7,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Series G Preferred Stock
Temporary Equity, Par or Stated Value Per Share	$ 0.0001
Temporary Equity, Shares Authorized	13,000
Temporary Equity, Shares Issued	12,373.2260	0
Temporary Equity, Shares Outstanding	12,373.2260	0

Condensed Consolidated Statements of Operations (unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Operating expenses:
Research and development expenses	$ 565,962	$ 1,361,683
General and administrative expenses	8,659,692	2,700,742
Total operating expenses	9,225,654	4,062,425
Loss from operations	(9,225,654)	(4,062,425)
Other (expenses) income:
Interest expense	(66,202)	(8,987)
Interest income	228	1,873
Other expense	(653)	(1,114)
Total other expenses	(66,627)	(8,228)
Loss before income tax benefit	(9,292,281)	(4,070,653)
Income tax benefit	14,859,887
Net income (loss)	5,567,606	(4,070,653)
Preferred stock dividends	(66,144)	(87,431)
Net income (loss) applicable to common shareholders	$ 5,501,462	$ (4,158,084)
Basic weighted average shares outstanding	1,761,953	114,033
Diluted weighted average shares outstanding	14,511,461	114,033
Income (loss) per share - basic	$ 3.12	$ (36.46)
Income (loss) per share - diluted	$ 0.38	$ (36.46)

Condensed Consolidated Statements of Mezzanine Equity and Changes in Stockholders' Equity (unaudited) - USD ($)	Convertible preferred stock Series G Convertible Preferred Stock	Convertible preferred stock Series B Convertible Preferred Stock	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Total
Balance at the beginning (in shares) at Dec. 31, 2022		550	49,750
Balance at the beginning at Dec. 31, 2022			$ 5	$ 171,275,836	$ (168,533,689)	$ 2,742,152
Issuance of common stock, pre-funded warrants and warrants, net of issuance costs			$ 1	3,769,910		3,769,911
Issuance of common stock, pre-funded warrants and warrants, net of issuance costs (in shares)			6,400
Exercise of pre-funded warrants into common stock			$ 2	299		301
Exercise of pre-funded warrants into common stock (in shares)			21,473
Deemed dividend of Series B preferred stock				(87,431)		$ (87,431)
Conversion of Series B preferred shares into common stock (in shares)		(4)	4
Stock cancelled during period, shares, acquisitions (in shares)						148
Effect of cancelled shares from the reverse stock split (in shares)			(148)
Stock-based compensation				358,316		$ 358,316
Net income (loss)					(4,070,653)	(4,070,653)
Balance at the end (in shares) at Mar. 31, 2023		546	77,479
Balance at the end at Mar. 31, 2023			$ 8	175,316,930	(172,604,342)	2,712,596
Balance at the beginning (in shares) at Dec. 31, 2023		515	1,560,998
Balance at the beginning at Dec. 31, 2023			$ 156	187,931,445	(184,328,672)	3,602,929
Issuance of common stock, pre-funded warrants and warrants, net of issuance costs			$ 17	3,604,919		3,604,936
Issuance of common stock, pre-funded warrants and warrants, net of issuance costs (in shares)			173,100
Issuance of stock upon acquisition of IMGX	$ 57,790,474		$ 4	2,300,496		2,300,500
Issuance of stock upon acquisition of IMGX (in shares)	11,777		36,830
Issuance of stock to financial advisors	$ 3,890,626		$ 2	120,646		120,648
Issuance of stock to financial advisors (in shares)	596		18,475
Exercise of pre-funded warrants into common stock			$ 9			9
Exercise of pre-funded warrants into common stock (in shares)			83,525
Deemed dividend of Series B preferred stock				(66,144)		(66,144)
Conversion of Series B preferred shares into common stock (in shares)		(10)	9
Common stock issued to consultants			$ 10	780,990		781,000
Common stock issued to consultants (in shares)			100,000
Issuance of common stock from RSU vest			$ 5	(5)
Issuance of common stock from RSU vest (in shares)			52,271
Stock-based compensation				271,360		271,360
Net income (loss)					5,567,606	5,567,606
Balance at the end (in shares) at Mar. 31, 2024	12,373	505	2,025,208
Balance at the end at Mar. 31, 2024	$ 61,681,100		$ 203	$ 194,943,707	$ (178,761,066)	$ 16,182,844

Condensed Consolidated Statements of Mezzanine Equity and Changes in Stockholders' Equity (unaudited) (Parenthetical) - shares				3 Months Ended
	Dec. 18, 2023	Jan. 18, 2023	Aug. 26, 2022	Mar. 31, 2023
Condensed Consolidated Statements of Mezzanine Equity and Changes in Stockholders' Equity (unaudited)
Reverse stock splits (in shares)	20	7	30	1

Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities:
Net income (loss)	$ 5,567,606	$ (4,070,653)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	12,293	7,318
Change in right-of-use assets	18,251	15,528
Stock-based compensation	271,360	358,316
Common stock granted to consultants	781,000
Common stock issued to financial advisors at acquisition	120,648
Series G convertible preferred stock issued to financial advisors at acquisition	3,890,626
Deferred taxes	(14,859,887)
Changes in assets and liabilities:
Other receivables		73,014
Prepaid expenses	318,342	511,393
Lease liabilities	(18,863)	(15,751)
Accounts payable	526,033	(250,280)
Accrued expenses	(398,672)	525,552
Other liabilities	24,307	(15)
Net cash used in operating activities	(3,746,956)	(2,845,578)
Cash flows from investing activities:
Cash acquired in acquisition of IMGX	88,169
Net cash provided by investing activities	88,169
Cash flows from financing activities:
Proceeds from issuance of common stock, prefunded warrants and warrants, net	3,604,936	3,769,911
Proceeds from exercise of warrants	9	301
Repayments of note payable	(226,015)	(223,104)
Net cash provided by financing activities	3,378,930	3,547,108
Net (decrease) increase in cash, cash equivalents and restricted cash	(279,857)	701,530
Cash, cash equivalents and restricted cash, beginning balance	3,733,292	1,384,423
Cash, cash equivalents and restricted cash, ending balance	3,453,435	2,085,953
Supplemental disclosures of cash flow information:
Cash paid for interest	21,969	8,987
Non-cash investing and financing activities:
Fair value of common shares issued in the IMGX acquisition, net of cash	152,331
Fair value of the Series G preferred stock issued in the IMGX acquisition	57,790,474
Fair value of options assumed in the IMGX acquisition	1,271,000
Fair value of warrants assumed in the IMGX acquisition	789,000
Accrued dividends on preferred stock	$ (66,144)	$ (87,431)

The Company and Basis of Presentation

3 Months Ended

Mar. 31, 2024

The Company and Basis of Presentation

The Company and Basis of Presentation

Note 1 - The Company and Basis of Presentation

The Company

Risks and Uncertainties

Principles of Consolidation

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

Significant Accounting Policies and Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2024

Significant Accounting Policies and Recent Accounting Pronouncements

Significant Accounting Policies and Recent Accounting Pronouncements

Note 2 - Significant Accounting Policies and Recent Accounting Pronouncements

Use of Estimates

Reverse Stock Split

All share and per share amounts have been retroactively restated to reflect the reverse stock splits referenced above.

Cash and Cash Equivalents and Restricted Cash

Concentrations of Credit Risk

Fair Value Measurements

As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Inputs, other than the 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, which reflect those that a market participant would use.

The Company recognizes transfers between levels as if the transfers occurred on the last day of the reporting period.

Goodwill

Impairment of Long-Lived Assets

Income Taxes

Leases

Leases are recorded on the balance sheet as right of use assets and lease obligations.

Research and Development

Research and Development – Intellectual Property Acquired

For tax purposes, intangible assets related to IPR&D are considered definite-lived intangible assets.

Stock-Based Compensation

Recent Accounting Pronouncements

Business Acquisition

3 Months Ended

Mar. 31, 2024

Business Acquisition

Business Acquisition

Note 3 – Business Acquisition

The Company incurred transaction costs of $5,456,038 which are included in the Company’s condensed consolidated statement of operations.

The Assumed Warrants are exercisable for an aggregate of 127,680 shares of Common Stock, have exercise prices ranging from $3.03 to $3.92 and expire between September 30, 2032 and September 6, 2033.


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


Assets acquired:
Cash and cash equivalents	$	88,169
Prepaid expenses and other current assets		3,131,929
Property and equipment, net		18,963
Intangibles		63,370,000
Operating lease right-of-use assets		4,232
Total assets	$	66,613,293
Liabilities assumed:
Accounts payable		916,209
Accrued expenses and other current liabilities		2,131,439
Long term debt		6,397,889
Deferred tax liability		15,431,108
Total liabilities	$	24,876,645
Goodwill recorded:
Goodwill	$	18,354,326
Net assets acquired	$	60,090,974

All intangible assets acquired are subject to amortization and their associated estimated acquisition date fair values are as follows:


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

Pro forma disclosure for the IMGX acquisition

The unaudited pro forma information for the three months ended March 31, 2024 and 2023 was impracticable for disclosure as IMGX was a private company.

Fair Value Disclosures

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures

Fair Value Disclosures

Note 4 - Fair Value Disclosures

The fair value of the Company’s financial instruments are as follows:


			Fair Value Measured at Reporting Date
			Using
	Carrying
	Amount		Level 1		Level 2		Level 3		Fair Value
March 31, 2024 (unaudited):
Money market funds	$	12,244	$	12,244	$	—	$	—	$	12,244
Note payable		386,769		—		386,769		—		386,769

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

At March 31, 2024 and December 31, 2023, the Company had no other assets or liabilities that are subject to fair value methodology and estimation in accordance with U.S. GAAP.

Property, Equipment and Leasehold Improvements

3 Months Ended

Mar. 31, 2024

Property, Equipment and Leasehold Improvements

Property, Equipment and Leasehold Improvements

Note 5 – Property, Equipment and Leasehold Improvements

Property, equipment and leasehold improvements consisted of the following:


	March 31,
	2024		December 31,
	(unaudited)		2023
Computer equipment and software	$	21,316	$	11,540
Office equipment		57,465		48,278
Leasehold improvements		28,000		28,000
Total property, equipment and leasehold improvements		106,781		87,818
Less accumulated depreciation		(81,032)		(73,253)
Property, equipment and leasehold improvements, net	$	25,749	$	14,565

Depreciation expense for the three months ended March 31, 2024 was approximately $7,779 and for the three months ended March 31, 2023 was approximately $7,300.

Goodwill

3 Months Ended

Mar. 31, 2024

Goodwill

Goodwill

Note 6 –Goodwill

Goodwill is as follows:


	Goodwill
Balance on January 1, 2023	$	1,684,182
Balance on December 31, 2023		1,684,182
Goodwill associated with IMGX acquisition		18,354,326
Balance on March 31, 2024 (unaudited)	$	20,038,508

Intangible Assets and In-Process R&D

3 Months Ended

Mar. 31, 2024

Intangible Assets and In-Process R&D

Intangible Assets and In-Process R&D

Note 7 – Intangible Assets and In-Process R&D

Intangible assets as of March 31, 2024 consist of in-process R&D, patents, tradenames and trademarks acquired from IMGX. Intangible assets and in-process R&D are as follows:


	Estimated	March 31,
	Useful Life	2024
Patents	2	$	140,000
Trademarks and trade names	6		230,000
Less: Accumulated Amortization			(4,514)
Intangible Assets, Net			365,486
In-Process R&D			63,000,000
Total Intangible Assets and In-Process R&D, Net		$	63,365,486

Expected future amortization expense as of March 31, 2024 is as follows:


2024 (remainder of year)	$	81,250
2025		108,333
2026		52,917
2027		38,333
Thereafter		84,653
Total	$	365,486

Accrued Expenses

3 Months Ended

Mar. 31, 2024

Accrued Expenses

Accrued Expenses

Note 8 - Accrued Expenses

Accrued expenses consisted of the following:


	March 31,
	2024		December 31,
	(unaudited)		2023
Accrued interest	$	1,328,669	$	—
Consulting fees		662,947		75,972
Professional fees		507,844		253,577
Payroll and benefits		54,986		495,741
Total accrued expenses	$	2,554,446	$	825,290

Capital Stock

3 Months Ended

Mar. 31, 2024

Capital Stock

Capital Stock

Note 9 – Capital Stock

Common Stock and Preferred Stock

The Company had 2,025,208 and 1,560,998 shares of its Common Stock issued and outstanding on March 31, 2024 and December 31, 2023, respectively.

The Company had approximately 504.81 and 514.96 shares of Series B preferred stock issued and outstanding on March 31, 2024 and December 31, 2023, respectively.

The Company had 0 shares of Series C, Series D, Series E and Series F preferred stock issued and outstanding on March 31, 2024 and December 31, 2023.

Most Favored Nations Exchange Right and Waiver Agreements

Mezzanine Equity

Series G Preferred Stock

The Company had 12,373.226 shares of Series G stock issued and outstanding on March 31, 2024 and 0 on December 31, 2023.

Liquidation Preference. The Series G Preferred Stock does not have a preference upon any liquidation, dissolution or winding-up of the Company.

Redemption. The shares of Series G Preferred Stock shall not be redeemable at the option of the Company or the holder thereof.

At The Market Agreement with H.C. Wainwright

March 2024 Registered Direct Offering

The Company received gross proceeds of approximately $4.0 million less placement agent’s fees and other offering expenses of approximately $400,000.

March 2023 Private Placement

The Company received gross proceeds of approximately $4.0 million less placement agent’s fees and other offering expenses of approximately $300,000.

Common Stock Issuances

Q1 2024 Issuances

During the three months ended March 31, 2024, the Company issued an aggregate of 36,830 shares of Common Stock with a value of $2.3 million in connection with the IMGX acquisition.

During the three months ended March 31, 2024, the Company issued an aggregate of 52,271 shares of Common Stock upon the vesting of RSUs (See Note 11).

Q1 2023 Issuances

During the three months ended March 31, 2023, the Company issued 6,400 shares of Common Stock under the March 2023 Offering for which the Company received net proceeds of approximately $3.8 million.

During the three months ended March 31, 2023, the Company cancelled an aggregate of 148 shares of Common Stock in connection with the 1-for-7 reverse stock split on January 18, 2023.

Warrants

3 Months Ended

Mar. 31, 2024

Warrants

Warrants

Note 10 – Warrants

Warrant activity for the three months ended March 31, 2024 and 2023 was as follows:


		Weighted		Weighted
		Average		Average
	Number of	Exercise Price		Remaining
	Warrants	Per Share		Term in Years
Outstanding and exercisable on January 1, 2024	1,779,780	$	19.29	4.99
Issued	878,150		4.48	4.93
Assumed from IMGX	127,680		3.48	8.97
Exercised	(83,525)		—	4.93
Warrants outstanding and exercisable on March 31, 2024	2,702,085	$	14.32	5.00

Warrants outstanding and exercisable on January 1, 2023	108,797	$	383.20	5.50
Issued	147,053		51.00	4.96
Exercised	(21,473)		—	5.28
Warrants outstanding and exercisable on March 31, 2023	234,377	$	210.00	5.07

As of March 31, 2024, the outstanding warrants expire from 2024 through 2033.

Equity Incentive Plan

3 Months Ended

Mar. 31, 2024

Equity Incentive Plan

Equity Incentive Plan

Note 11 – Equity Incentive Plan

As of January 1, 2024, the number of shares of Common Stock available for issuance under the 2020 Plan automatically increased to 334,078 under the 2020 Plan’s evergreen provision.

As of March 31, 2024, there were an aggregate of 350,000 total shares available (but un - issuable) under the IMGX 2021 Plan, of which 200,652 are issued and outstanding.

As of March 31, 2024, 334,078 total shares were authorized under the 2020 Plan, of which 178,874 were issued and outstanding and 155,204 shares were available for potential issuances.

During the three months ended March 31, 2024 and 2023, stock option activity under the 2014 Plan, 2020 Plan, and IMGX 2021 Plan was as follows:


		Average		Remaining
	Number	Exercise		Contract	Intrinsic
	of Shares	Price		Life (Years)	Value
Outstanding at January 1, 2024	426	$	6,103.81	8.53	$	—
Assumed from IMGX	200,652		0.81	7.56		716,328
Outstanding at March 31, 2024	201,078	$	13.74	7.56	$	716,350
Exercisable at March 31, 2024	201,054	$	11.99	7.56	$	716,341

Outstanding at January 1, 2023	176	$	15,956.72	8.22	$	—
Granted	250		74.60	9.91		—
Outstanding at March 31, 2023	429	$	8,900.40	9.07	$	—
Exercisable at March 31, 2023	200	$	17,091.40	8.40	$	—


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

Restricted Stock and Restricted Stock Units

During the three months ended March 31, 2024 and March 31, 2023, RSU activity under the 2020 Plan was as follows:


		Weighted-Average		Weighted-Average
	Number	Grant Date		Remaining Recognition
	of Shares	Fair Value		Period (Years)
Non-vested Outstanding at January 1, 2024	52,271	$	4.31	9.96
Awarded	120,532		3.80	—
Vested	(52,271)		4.31	—
Non-vested Outstanding at March 31, 2024	120,532	$	3.82	9.76

Non-vested Outstanding at January 1, 2023	—		—	—
Awarded	7,997	$	124.00	—
Vested	(2,003)		124.00	—
Non-vested Outstanding at March 31, 2023	5,994	$	124.00	0.75

The total stock-based compensation expense for employees and non-employees is included in the accompanying condensed consolidated statements of operations and as follows:


	Three Months Ended March 31,
	2024		2023
Research and development	$	42,378	$	38,080
General and administrative		228,982		320,236
Total stock-based compensation expense	$	271,360	$	358,316

Agreements

3 Months Ended

Mar. 31, 2024

Agreements

Agreements

Note 12 – Agreements

License Agreement with Sanofi

Leases

3 Months Ended

Mar. 31, 2024

Leases

Leases

Note 13 – Leases

The Company leases its offices under operating leases which are subject to various rent provisions and escalation clauses.

The Company’s leases expire at various dates through 2026. The escalation clauses are indeterminable and considered not material and have been excluded from minimum future annual rental payments.

Lease expenses amounted to approximately $35,000 and $37,000, respectively, for the three months ended March 31, 2024 and 2023.

The weighted-average remaining lease term and weighted-average discount rate under operating leases as of March 31, 2024 are:


	March 31,
	2024
Lease term and discount rate
Weighted-average remaining lease term (years)	2.4
Weighted-average discount rate	7.00	%

Maturities of operating lease liabilities as of March 31, 2024, were as follows:


2024 (remainder of year)	$	67,308
2025		88,788
2026		60,593
Total lease payments		216,689
Less imputed interest		(17,881)
Present value of lease liabilities	$	198,808

Debt

3 Months Ended

Mar. 31, 2024

Debt

Debt

Note 14 – Debt

Debt consists of the following:


			Related				Directors
			party				and Officer’s
	Revolving		promissory				Liability
	line of credit		notes		EIDL loan		Insurance		Total
Principal balance March 31, 2024	$	5,359,860	$	1,000,000	$	500,000	$	386,769	$	7,246,629
Debt discount		—		—		(461,971)		—		(461,971)
Total debt as of March 31, 2024	$	5,359,860	$	1,000,000	$	38,029	$	386,769	$	6,784,658

Current portion	$	—	$	—	$	—	$	386,769	$	386,769
Long-term portion, net	$	5,359,860	$	1,000,000	$	38,029	$	—	$	6,397,889

Aggregate future minimum principal maturities of notes payable as of December 31, are as follows:


2024	$	386,769
2025		6,359,860
2026		—
2027		—
Thereafter		500,000
Total	$	7,246,629

Revolving line of credit

As of March 31, 2024, the outstanding balance of the Revolver was $5.4 million with no available borrowings and accrued interest of $1.3 million.

Promissory notes

EIDL loan

Directors and Officer’s Liability Insurance

Net Income (Loss) per Common Share

3 Months Ended

Mar. 31, 2024

Net Income (Loss) per Common Share

Net Income (Loss) per Common Share

Note 15 – Net Income (Loss) per Common Share

Basic and diluted net income per share was calculated as follows:


	Three Months Ended
	March 31, 2024
Net income applicable to common shareholders - basic	$	5,501,462
Preferred stock dividends		66,144
Net income applicable to common shareholders - diluted	$	5,567,606
Basic weighted average shares outstanding		1,761,953
Series G convertible preferred stock		12,373,226
Series B convertible preferred stock		139
Stock options		169,536
Common stock warrants		118,084
RSUs not yet issued		88,523
Diluted weighted average shares outstanding		14,511,461
Basic net income per share	$	3.12
Diluted net income per share	$	0.38

All shares of Common Stock that may potentially be issued in the future are as follows:


	March 31, 2024	March 31, 2023
	(unaudited)	(unaudited)
Series G convertible preferred stock	12,373,226	—
Common stock warrants	2,702,085	234,377
Stock options	201,078	429
RSUs not yet issued	120,537	8,011
Series B convertible preferred stock (1)	139	155
Restricted stock not yet issued	4	8
Total shares of common stock issuable	15,397,069	242,980

(1)	Series B convertible preferred stock is assumed to be converted at the rate of $32,340 per common share, which is the conversion price as of March 31, 2024.

Employee Benefit Plans

3 Months Ended

Mar. 31, 2024

Employee Benefit Plans

Employee Benefit Plans

Note 16 - Employee Benefit Plans

401(k) Plan

Employer contributions under this 401(k) plan amounted to approximately $37,000 and $26,000 for the three months ended March 31, 2024 and 2023, respectively.

Income Taxes

3 Months Ended

Mar. 31, 2024

Income Taxes

Income Taxes

Note 17 - Income Taxes

Subsequent Events

3 Months Ended

Mar. 31, 2024

Subsequent Events

Subsequent Events

Note 18 - Subsequent Events

Registered Direct Offering

Share Issuances

Significant Accounting Policies and Recent Accounting Pronouncements (Policies)	3 Months Ended
	Mar. 31, 2024
Significant Accounting Policies and Recent Accounting Pronouncements
Use of Estimates	Use of Estimates The accompanying unaudited condensed consolidated financial statements are prepared in conformity with GAAP and include certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements (including goodwill), and the reported amounts of revenue and expense during the reporting period, including contingencies. Accordingly, actual results may differ from those estimates.
Reverse Stock Split	Reverse Stock Split On December 18, 2023, the Company effected a reverse stock split, whereby every twenty shares of the Company’s issued and outstanding common stock was converted automatically into one issued and outstanding share of common stock, but without any change in the number of authorized shares of common stock and the par value per share. On January 18, 2023, the Company effected a reverse stock split, whereby every seven shares of the Company’s issued and outstanding common stock was converted automatically into one issued and outstanding share of common stock, but without any change in the number of authorized shares of common stock and the par value per share. On August 26, 2022, the Company effected a reverse stock split, whereby every thirty shares of the Company’s issued and outstanding common stock was converted automatically into one issued and outstanding share of common stock, but without any change in the number of authorized shares of common stock and the par value per share. All share and per share amounts have been retroactively restated to reflect the reverse stock splits referenced above.
Cash and Cash Equivalents and Restricted Cash	Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents. All cash and cash equivalent balances were highly liquid at March 31, 2024 and December 31, 2023. As of March 31, 2024 and December 31, 2023, the Company has classified approximately $0.02 million as restricted cash.
Concentrations of Credit Risk	Concentrations of Credit Risk Financial instruments that potentially expose the Company to concentrations of credit risk consist of cash. The Company primarily maintains its cash balances with financial institutions in federally insured accounts in the U.S. The Company may from time to time have cash in banks in excess of FDIC insurance limits. At March 31, 2024 the Company had approximately $3.4 million in one account in the U.S. which was in excess of these limits. The Company has not experienced any losses to date resulting from this practice. The Company mitigates its risk by maintaining the majority of its cash and equivalents with high quality financial institutions.
Fair Value Measurements	Fair Value Measurements The Company follows Accounting Standards Codification (“ASC”) Topic 820-10, Fair Value Measurements and Disclosures (“ASC 820”), which 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 an exit price, representing the amount that would be received to sell an asset or 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, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: Inputs, other than the 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, which reflect those that a market participant would use. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument. The Company recognizes transfers between levels as if the transfers occurred on the last day of the reporting period.
Goodwill	Goodwill Goodwill represents the excess of the purchase price of the acquired business over the fair value of amounts assigned to assets acquired and liabilities assumed. Goodwill and other intangible assets with indefinite useful lives are reviewed for impairment annually or more frequently if events or circumstances indicate impairment may be present. Any excess in carrying value over the estimated fair value is charged to results of operations. The Company has not recognized any impairment charges through March 31, 2024 related to goodwill.
Impairment of Long-Lived Assets	Impairment of Long-Lived Assets The Company periodically evaluates its long-lived assets for potential impairment in accordance with ASC Topic 360, Property, Plant and Equipment (“ASC 360”). Potential impairment is assessed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. Recoverability of these assets is assessed based on undiscounted expected future cash flows from the assets, considering a number of factors, including past operating results, budgets and economic projections, market trends and product development cycles. If impairments are identified, assets are written down to their estimated fair value. The Company has not recognized any impairment charges through March 31, 2024.
Income Taxes	Income Taxes Income taxes are recorded in accordance with ASC 740, Accounting for Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. The Company determines its deferred tax assets and liabilities based on differences between financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. At March 31, 2024 and 2023, the Company does not have any significant uncertain tax positions.
Leases	Leases Leases are recorded on the balance sheet as right of use assets and lease obligations.
Research and Development	Research and Development Research and development costs are charged to operations when incurred and are included in operating expense, except for goodwill related to patents. Research and development costs consist principally of compensation of employees and consultants that perform the Company’s research activities, payments to third parties for preclinical and non-clinical activities, expenses with clinical research organizations (“CROs”), investigative sites, consultants and contractors that conduct or provide other services relating to clinical trials, costs to acquire drug product, drug supply and clinical trial materials from contract development and manufacturing organization (“CDMOs”) and third-party contractors relating to chemistry, manufacturing and controls (“CMC”) efforts, the fees paid for and to maintain the Company’s licenses and research and development costs related to adrulipase and niclosamide. Depending upon the timing of payments to the service providers, the Company recognizes prepaid expenses or accrued expenses related to these costs. These accrued or prepaid expenses are based on management’s estimates of the work performed under service agreements, milestones achieved and experience with similar contracts. The Company monitors each of these factors and adjusts estimates accordingly. Research and Development – Intellectual Property Acquired The Company records intellectual property acquired in business acquisitions that has not reached technological feasibility and which has no alternative future use, as In-Process R&D (“IPR&D”) at the acquisition date. On March 13, 2024, the Company entered into an acquisition agreement with IMGX which included the intellectual property and patents for Latiglutenase and CypCel, which was accounted for as a business acquisition (see Note 3). Intangible assets related to IPR&D are considered indefinite-lived intangible assets and are assessed for impairment annually or more frequently if impairment indicators exist. If the associated research and development effort is abandoned, the related assets will be written-off, and the Company will record a noncash impairment loss on its Consolidated Statements of Operations. For those compounds that reach commercialization, the IPR&D assets will be amortized over their estimated useful lives. The impairment test for indefinite-lived intangible assets is a one-step test that compares the fair value of the intangible asset to its carrying value. If the carrying value exceeds its fair value, an impairment loss is recognized in an amount equal to the excess. For tax purposes, intangible assets related to IPR&D are considered definite-lived intangible assets.
Stock-Based Compensation	Stock-Based Compensation The Company’s board of directors (the “Board”) and stockholders have adopted and approved the Amended and Restated 2014 Omnibus Equity Incentive Plan (the “2014 Plan”) which took effect on May 12, 2014, and the 2020 Omnibus Equity Incentive Plan, which took effect on September 11, 2020 (the “2020 Plan”). From the effective date of the 2020 Plan, no new awards have been or will be made under the 2014 Plan. On March 13, 2024, in connection with the IMGX acquisition, the Company assumed IMGX’s 2021 Stock Option Plan (the “IMGX Plan”), including all IMGX stock options immediately outstanding prior to the IMGX acquisition, with each becoming an option to purchase Common Stock, subject to adjustment. The IMGX Plan was adopted and approved by the board of directors and stockholders of IMGX in 2021. Following the assumption of the IMGX Plan by the Company, no new awards have been or will be made under the IMGX Plan. The Company accounts for its stock-based compensation awards to employees, consultants, and Board members in accordance with ASC Topic 718, Compensation-Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments to employees, consultants, and Board members, including grants of employee stock options, to be recognized in the statements of operations by measuring the fair value of the award on the date of grant and recognizing this fair value as stock-based compensation using a straight-line method over the requisite service period, generally the vesting period. For awards with performance conditions that affect their vesting, such as the occurrence of certain transactions or the achievement of certain operating or financial milestones, recognition of fair value of the award occurs when vesting becomes probable. The Company estimates the grant date fair value of stock option awards using the Black-Scholes option-pricing model. The use of the Black-Scholes option-pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the Common Stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the Common Stock.
Recent Accounting Pronouncements	Recent Accounting Pronouncements The Company has evaluated recently issued accounting pronouncements and has concluded that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption.

Business Acquisition (Tables)

3 Months Ended

Mar. 31, 2024

Business Acquisition

Schedule of preliminary fair value of the consideration


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

Schedule of preliminary purchase price allocation


Assets acquired:
Cash and cash equivalents	$	88,169
Prepaid expenses and other current assets		3,131,929
Property and equipment, net		18,963
Intangibles		63,370,000
Operating lease right-of-use assets		4,232
Total assets	$	66,613,293
Liabilities assumed:
Accounts payable		916,209
Accrued expenses and other current liabilities		2,131,439
Long term debt		6,397,889
Deferred tax liability		15,431,108
Total liabilities	$	24,876,645
Goodwill recorded:
Goodwill	$	18,354,326
Net assets acquired	$	60,090,974

Schedule of intangible assets acquired


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

Fair Value Disclosures (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures

Schedule of fair value of the Company's financial instruments


			Fair Value Measured at Reporting Date
			Using
	Carrying
	Amount		Level 1		Level 2		Level 3		Fair Value
March 31, 2024 (unaudited):
Money market funds	$	12,244	$	12,244	$	—	$	—	$	12,244
Note payable		386,769		—		386,769		—		386,769

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

Property, Equipment and Leasehold Improvements (Tables)

3 Months Ended

Mar. 31, 2024

Property, Equipment and Leasehold Improvements

Summary of property, equipment and leasehold improvements


	March 31,
	2024		December 31,
	(unaudited)		2023
Computer equipment and software	$	21,316	$	11,540
Office equipment		57,465		48,278
Leasehold improvements		28,000		28,000
Total property, equipment and leasehold improvements		106,781		87,818
Less accumulated depreciation		(81,032)		(73,253)
Property, equipment and leasehold improvements, net	$	25,749	$	14,565

Goodwill (Tables)

3 Months Ended

Mar. 31, 2024

Goodwill

Schedule of goodwill


	Goodwill
Balance on January 1, 2023	$	1,684,182
Balance on December 31, 2023		1,684,182
Goodwill associated with IMGX acquisition		18,354,326
Balance on March 31, 2024 (unaudited)	$	20,038,508

Intangible Assets and In-Process R&D (Tables)

3 Months Ended

Mar. 31, 2024

Intangible Assets and In-Process R&D

Summary of patents, tradenames and trademarks, intangible assets and in-process R&D from IMGX

Intangible assets as of March 31, 2024 consist of in-process R&D, patents, tradenames and trademarks acquired from IMGX. Intangible assets and in-process R&D are as follows:


	Estimated	March 31,
	Useful Life	2024
Patents	2	$	140,000
Trademarks and trade names	6		230,000
Less: Accumulated Amortization			(4,514)
Intangible Assets, Net			365,486
In-Process R&D			63,000,000
Total Intangible Assets and In-Process R&D, Net		$	63,365,486

Schedule of expected future amortization expense

Expected future amortization expense as of March 31, 2024 is as follows:


2024 (remainder of year)	$	81,250
2025		108,333
2026		52,917
2027		38,333
Thereafter		84,653
Total	$	365,486

Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2024

Accrued Expenses

Schedule of accrued expenses


	March 31,
	2024		December 31,
	(unaudited)		2023
Accrued interest	$	1,328,669	$	—
Consulting fees		662,947		75,972
Professional fees		507,844		253,577
Payroll and benefits		54,986		495,741
Total accrued expenses	$	2,554,446	$	825,290

Warrants (Tables)

3 Months Ended

Mar. 31, 2024

Warrants

Schedule of warrant activity


		Weighted		Weighted
		Average		Average
	Number of	Exercise Price		Remaining
	Warrants	Per Share		Term in Years
Outstanding and exercisable on January 1, 2024	1,779,780	$	19.29	4.99
Issued	878,150		4.48	4.93
Assumed from IMGX	127,680		3.48	8.97
Exercised	(83,525)		—	4.93
Warrants outstanding and exercisable on March 31, 2024	2,702,085	$	14.32	5.00

Warrants outstanding and exercisable on January 1, 2023	108,797	$	383.20	5.50
Issued	147,053		51.00	4.96
Exercised	(21,473)		—	5.28
Warrants outstanding and exercisable on March 31, 2023	234,377	$	210.00	5.07

Equity Incentive Plan (Tables)

3 Months Ended

Mar. 31, 2024

Equity Incentive Plan

Schedule of stock option activity


		Average		Remaining
	Number	Exercise		Contract	Intrinsic
	of Shares	Price		Life (Years)	Value
Outstanding at January 1, 2024	426	$	6,103.81	8.53	$	—
Assumed from IMGX	200,652		0.81	7.56		716,328
Outstanding at March 31, 2024	201,078	$	13.74	7.56	$	716,350
Exercisable at March 31, 2024	201,054	$	11.99	7.56	$	716,341

Outstanding at January 1, 2023	176	$	15,956.72	8.22	$	—
Granted	250		74.60	9.91		—
Outstanding at March 31, 2023	429	$	8,900.40	9.07	$	—
Exercisable at March 31, 2023	200	$	17,091.40	8.40	$	—

Schedule of option pricing model with the following weighted-average assumptions


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

Schedule of RSU activity under the 2020 Plan


		Weighted-Average		Weighted-Average
	Number	Grant Date		Remaining Recognition
	of Shares	Fair Value		Period (Years)
Non-vested Outstanding at January 1, 2024	52,271	$	4.31	9.96
Awarded	120,532		3.80	—
Vested	(52,271)		4.31	—
Non-vested Outstanding at March 31, 2024	120,532	$	3.82	9.76

Non-vested Outstanding at January 1, 2023	—		—	—
Awarded	7,997	$	124.00	—
Vested	(2,003)		124.00	—
Non-vested Outstanding at March 31, 2023	5,994	$	124.00	0.75

Schedule of stock-based compensation expense


	Three Months Ended March 31,
	2024		2023
Research and development	$	42,378	$	38,080
General and administrative		228,982		320,236
Total stock-based compensation expense	$	271,360	$	358,316

Leases (Tables)

3 Months Ended

Mar. 31, 2024

Leases

Schedule of weighted-average remaining lease term and weighted-average discount rate under operating leases


	March 31,
	2024
Lease term and discount rate
Weighted-average remaining lease term (years)	2.4
Weighted-average discount rate	7.00	%

Schedule of maturities of operating lease liabilities

Maturities of operating lease liabilities as of March 31, 2024, were as follows:


2024 (remainder of year)	$	67,308
2025		88,788
2026		60,593
Total lease payments		216,689
Less imputed interest		(17,881)
Present value of lease liabilities	$	198,808

Debt (Tables)

3 Months Ended

Mar. 31, 2024

Debt

Schedule of debt


			Related				Directors
			party				and Officer’s
	Revolving		promissory				Liability
	line of credit		notes		EIDL loan		Insurance		Total
Principal balance March 31, 2024	$	5,359,860	$	1,000,000	$	500,000	$	386,769	$	7,246,629
Debt discount		—		—		(461,971)		—		(461,971)
Total debt as of March 31, 2024	$	5,359,860	$	1,000,000	$	38,029	$	386,769	$	6,784,658

Current portion	$	—	$	—	$	—	$	386,769	$	386,769
Long-term portion, net	$	5,359,860	$	1,000,000	$	38,029	$	—	$	6,397,889

Schedule of aggregate future minimum principal maturities of notes payable


2024	$	386,769
2025		6,359,860
2026		—
2027		—
Thereafter		500,000
Total	$	7,246,629

Net Income (Loss) per Common Share (Tables)

3 Months Ended

Mar. 31, 2024

Net Income (Loss) per Common Share

Schedule of net income (loss) per share


	Three Months Ended
	March 31, 2024
Net income applicable to common shareholders - basic	$	5,501,462
Preferred stock dividends		66,144
Net income applicable to common shareholders - diluted	$	5,567,606
Basic weighted average shares outstanding		1,761,953
Series G convertible preferred stock		12,373,226
Series B convertible preferred stock		139
Stock options		169,536
Common stock warrants		118,084
RSUs not yet issued		88,523
Diluted weighted average shares outstanding		14,511,461
Basic net income per share	$	3.12
Diluted net income per share	$	0.38

Schedule of Common Stock that may potentially be issued in the future


	March 31, 2024	March 31, 2023
	(unaudited)	(unaudited)
Series G convertible preferred stock	12,373,226	—
Common stock warrants	2,702,085	234,377
Stock options	201,078	429
RSUs not yet issued	120,537	8,011
Series B convertible preferred stock (1)	139	155
Restricted stock not yet issued	4	8
Total shares of common stock issuable	15,397,069	242,980

(1)	Series B convertible preferred stock is assumed to be converted at the rate of $32,340 per common share, which is the conversion price as of March 31, 2024.

The Company and Basis of Presentation (Details) - USD ($)	Apr. 01, 2024	Mar. 31, 2024	Dec. 31, 2023
The Company and Basis of Presentation
Cash and cash equivalents		$ 3,431,913	$ 3,711,770
Accumulated deficit		(178,761,066)	$ (184,328,672)
Working capital		$ 1,300,000
May 2024 Registered Direct Offering \| Subsequent events
The Company and Basis of Presentation
Proceeds from issuance of shares	$ 1,100,000

Significant Accounting Policies and Recent Accounting Pronouncements (Details) - USD ($)				3 Months Ended
	Dec. 18, 2023	Jan. 18, 2023	Aug. 26, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Significant Accounting Policies and Recent Accounting Pronouncements
Number of shares reduced due to reverse stock split	20	7	30		1
Restricted cash				$ 20,000.00		$ 20,000.00
Cash in US banks in excess of FDIC insurance limits				3,400,000
Asset impairment charges				$ 0

Business Acquisition (Details)	Mar. 13, 2024 USD ($) $ / shares shares	Mar. 31, 2024 shares	Dec. 31, 2023 shares
Business Acquisition
Share issuable per each share of preferred stock converted	1,000
Common stock. Shares outstanding		2,025,208	1,560,998
Common stock, shares issued		2,025,208	1,560,998
IMGX
Business Acquisition
Share issuable per each share of preferred stock converted	1,000
Transaction costs \| $	$ 5,456,038
Preliminary fair value of consideration amount \| $	60,100,000
Net losses of acquiree from the date of acquisition \| $	100,000
Amount of advisory fees included in transaction cost \| $	$ 4,000,000.0
IMGX \| Common Stock
Business Acquisition
Number of shares issued	36,830
Common stock. Shares outstanding	2,303,135
Common stock, shares issued	2,303,135
IMGX \| Common Stock \| Tungsten Partners LLC
Business Acquisition
Issuance of stock to financial advisors (in shares)	18,475
IMGX \| Common Stock \| Assumed Options
Business Acquisition
Number of shares issuable upon exercise of options or warrants	200,652
Exercise price per share \| $ / shares	$ 0.81
IMGX \| Common Stock \| Assumed Warrants
Business Acquisition
Number of shares issuable upon exercise of options or warrants	127,680
IMGX \| Common Stock \| Assumed Warrants \| Maximum
Business Acquisition
Exercise price per share \| $ / shares	$ 3.92
IMGX \| Common Stock \| Assumed Warrants \| Minimum
Business Acquisition
Exercise price per share \| $ / shares	$ 3.03
IMGX \| Series G Preferred Stock
Business Acquisition
Number of shares issued	11,777.418
IMGX \| Series G Preferred Stock \| Tungsten Partners LLC
Business Acquisition
Issuance of stock to financial advisors (in shares)	595.808

Business Acquisition - Consideration (Details) - IMGX	Mar. 13, 2024 USD ($)
Business Acquisition
Total Purchase Price	$ 60,090,974
Assumed Options
Business Acquisition
Replacement options/warrants	1,271,000
Assumed Warrants
Business Acquisition
Replacement options/warrants	789,000
Common Stock
Business Acquisition
Stock issued to IMGX stockholders	240,500
Series G Preferred Stock
Business Acquisition
Stock issued to IMGX stockholders	$ 57,790,474

Business Acquisition - Assets acquired and the liabilities assumed (Details) - USD ($)	Mar. 31, 2024	Mar. 13, 2024	Dec. 31, 2023	Dec. 31, 2022
Liabilities assumed:
Goodwill	$ 20,038,508		$ 1,684,182	$ 1,684,182
IMGX
Assets acquired:
Cash and cash equivalents		$ 88,169
Prepaid expenses and other current assets		3,131,929
Property and equipment, net		18,963
Intangibles		63,370,000
Operating lease right-of-use assets		4,232
Total assets		66,613,293
Liabilities assumed:
Accounts Payable		916,209
Accrued expenses and other current liabilities		2,131,439
Long term Debt		6,397,889
Deferred tax liability		15,431,108
Total liabilities		24,876,645
Goodwill		18,354,326
Net assets acquired		$ 60,090,974

Business Acquisition - Assets acquired and the liabilities assumed (Details) - IMGX	Mar. 13, 2024 USD ($)
Business Acquisition
Acquisition Date Fair Value	$ 63,370,000
IPR&D - Latiglutenase
Business Acquisition
Acquisition Date Fair Value	54,000,000
IPR&D - CypCel
Business Acquisition
Acquisition Date Fair Value	$ 9,000,000
Patents
Business Acquisition
Estimated Useful Life	2 years
Acquisition Date Fair Value	$ 140,000
Trademarks and Trade Names
Business Acquisition
Estimated Useful Life	6 years
Acquisition Date Fair Value	$ 230,000

Fair Value Disclosures (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Fair Value Disclosures
Money market funds	$ 3,431,913	$ 3,711,770
Note payable	386,769	612,784
Carrying Amount
Fair Value Disclosures
Note payable	386,769	612,784
Fair Value, Inputs, Level 2
Fair Value Disclosures
Note payable	386,769	612,784
Money Market Funds
Fair Value Disclosures
Money market funds	12,244	12,131
Money Market Funds \| Carrying Amount
Fair Value Disclosures
Money market funds	12,244	12,131
Money Market Funds \| Fair Value, Inputs, Level 1
Fair Value Disclosures
Money market funds	$ 12,244	$ 12,131

Property, Equipment and Leasehold Improvements (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Property, Equipment and Leasehold Improvements
Total property, plant, and equipment	$ 106,781		$ 87,818
Less accumulated depreciation	(81,032)		(73,253)
Property, plant and equipment, net	25,749		14,565
Depreciation	7,779	$ 7,300
Computer equipment and software
Property, Equipment and Leasehold Improvements
Total property, plant, and equipment	21,316		11,540
Office equipment
Property, Equipment and Leasehold Improvements
Total property, plant, and equipment	57,465		48,278
Leasehold improvements
Property, Equipment and Leasehold Improvements
Total property, plant, and equipment	$ 28,000		$ 28,000

Goodwill (Details)	3 Months Ended
Goodwill (Details)	Mar. 31, 2024 USD ($)
Goodwill
Beginning balance	$ 1,684,182
Goodwill associated with IMGX acquisition	18,354,326
Ending balance	$ 20,038,508

Intangible Assets and In-Process R&D - Intangible assets acquired from IMGX (Details)	Mar. 31, 2024 USD ($)
Intangible Assets and In-Process R&D
Less: Accumulated Amortization	$ (4,514)
Intangible Assets, Net	365,486
Total Intangible Assets and In-Process R&D, Net	63,365,486
In Process Research and Development
Intangible Assets and In-Process R&D
In-Process R&D	63,000,000
Patents
Intangible Assets and In-Process R&D
Finite-Lived Intangible Assets, Gross	$ 140,000
Finite-lived intangible asset, useful life (year)	2 years
Trademarks and Trade Names
Intangible Assets and In-Process R&D
Finite-Lived Intangible Assets, Gross	$ 230,000
Finite-lived intangible asset, useful life (year)	6 years

Intangible Assets and In-Process R&D - Future Amortization expense (Details)	Mar. 31, 2024 USD ($)
Future amortization expense
2024 (remainder of year)	$ 81,250
2025	108,333
2026	52,917
2027	38,333
Thereafter	84,653
Intangible Assets, Net	$ 365,486

Accrued Expenses (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Accrued Expenses
Accrued interest	$ 1,328,669
Consulting fees	662,947	$ 75,972
Professional fees	507,844	253,577
Payroll and benefits	54,986	495,741
Total accrued expenses	$ 2,554,446	$ 825,290

Capital Stock (Details)									3 Months Ended
Capital Stock (Details)	Mar. 06, 2024 USD ($) $ / shares shares	Dec. 18, 2023 shares	Mar. 15, 2023 USD ($) $ / shares shares	Jan. 18, 2023 shares	Aug. 26, 2022 shares	May 24, 2022 shares	May 12, 2022	May 26, 2021	Mar. 31, 2024 USD ($) $ / shares shares	Mar. 31, 2023 USD ($) shares	Mar. 13, 2024 shares	Dec. 31, 2023 $ / shares shares
Capital Stock
Common stock, shares authorized (in shares)									100,000,000			100,000,000
Common stock, par or stated value per share (in dollars per share) \| $ / shares									$ 0.0001			$ 0.0001
Preferred stock, shares designated (in shares)									10,000,000
Preferred stock, par or stated value per share (in dollars per share) \| $ / shares									$ 0.0001
Number of shares reduced due to reverse stock split		20		7	30					1
Common stock, shares, issued, total (in shares)									2,025,208			1,560,998
Common stock, shares outstanding (in shares)									2,025,208			1,560,998
Stock cancelled during period, shares, acquisitions (in shares)										148
Preferred Stock, Convertible, Conversion Ratio											1,000
Reverse stock split ratio										1
Stock issued during period, value, acquisitions \| $									$ 2,300,500
Issuance of stock to financial advisors \| $									$ 120,648
Consultants
Capital Stock
Stock issued during period, shares, settlement (in shares)									100,000
Stock issued during period, value, settlement \| $									$ 781,000
Restricted Stock Units
Capital Stock
Conversion of stock, shares issued (in shares)									52,271
At The Market Offering Agreement \| Wainwright
Capital Stock
Stock sales agreement, commission on shares sold, percentage								3.00%
Stock sales agreement, number of shares authorized (in shares)						8,000,000.0
March 2024 Registered Direct Offering
Capital Stock
Convertible preferred stock, shares issued upon conversion (in shares)	7.61
Gross proceeds \| $	$ 4,000,000.0
Other offering expenses \| $	$ 400,000
Number of common stock shares called by each warrant (in shares)	1
Warrants and rights outstanding, term (year)	5 years
Private placement
Capital Stock
Convertible preferred stock, shares issued upon conversion (in shares)			78.20
Gross proceeds \| $			$ 4,000,000.0
Other offering expenses \| $			$ 300,000
Number of common stock shares called by each warrant (in shares)			1
Warrants and rights outstanding, term (year)			5 years
Pre-funded warrants
Capital Stock
Common stock issued upon conversion of preferred stock \| $									$ 0.0001	$ 0.0001
Conversion of stock, shares issued (in shares)									83,525	21,473
Series B Preferred Stock
Capital Stock
Preferred stock, shares designated (in shares)									5,194.81			5,194.81
Preferred stock, par or stated value per share (in dollars per share) \| $ / shares									$ 0.0001			$ 0.0001
Preferred stock, shares outstanding (in shares)									504.81			514.96
Exchange Amount \| $									$ 7,700.00
Preferred stock, shares issued (in shares)									504.81			514.96
Series B Preferred Stock \| Waiver
Capital Stock
Percentage of outstanding shares							81.30%
Series B Preferred Stock \| Series B Preferred Stock Converted into Common Stock
Capital Stock
Conversion of stock, shares converted (in shares)									10.15	4.23
Common stock issued upon conversion of preferred stock \| $									$ 78,125	$ 32,600
Conversion of stock, amount converted, accrued dividends \| $									22,770	$ 6,200
Series B Preferred Stock convertible into Series C Preferred Stock
Capital Stock
Exchange Amount \| $									$ 14,400,000
Conversion of stock, shares converted (in shares)									1,839.76
Conversion of Series B preferred shares into common stock (in shares)									395
Series B Preferred Stock convertible into Series C Preferred Stock \| Investor warrants
Capital Stock
Conversion of Series B preferred shares into common stock (in shares)									395
Series B Preferred Stock convertible into common stock with no warrants
Capital Stock
Exchange Amount \| $									$ 1,300,000
Conversion of stock, shares converted (in shares)									140.33
Conversion of Series B preferred shares into common stock (in shares)									110
Series B Preferred Stock Convertible Into Common Stock With Series C Warrants
Capital Stock
Exchange Amount \| $									$ 265,000
Conversion of stock, shares converted (in shares)									30.91
Conversion of Series B preferred shares into common stock (in shares)									44
Series B Preferred Stock Convertible Into Common Stock With Series C Warrants \| March 2024 Warrants
Capital Stock
Warrants to purchase of stock									44
Series C Preferred Stock
Capital Stock
Preferred stock, shares designated (in shares)									75,000			75,000
Preferred stock, par or stated value per share (in dollars per share) \| $ / shares									$ 0.0001			$ 0.0001
Preferred stock, shares outstanding (in shares)									0			0
Preferred stock, shares issued (in shares)									0			0
Series C Preferred Stock \| March 2024 Registered Direct Offering
Capital Stock
Number of common shares issuable upon conversion	352,525
Series C Preferred Stock \| Private placement
Capital Stock
Number of common shares issuable upon conversion			44,751
Series D Preferred Stock
Capital Stock
Preferred stock, shares designated (in shares)									150			150
Preferred stock, par or stated value per share (in dollars per share) \| $ / shares									$ 0.0001			$ 0.0001
Preferred stock, shares outstanding (in shares)									0			0
Preferred stock, shares issued (in shares)									0			0
Series D Preferred Stock \| March 2024 Registered Direct Offering
Capital Stock
Preferred stock, convertible, conversion price (in dollars per share) \| $ / shares	$ 0.0001
Stock issued during period, shares, new issues (in shares)	173,100
Series D Preferred Stock \| Private placement
Capital Stock
Preferred stock, convertible, conversion price (in dollars per share) \| $ / shares			$ 0.002
Stock issued during period, shares, new issues (in shares)			6,400
Series G Preferred Stock
Capital Stock
Temporary Equity, Shares Issued									12,373.2260			0
Temporary Equity, Shares Outstanding									12,373.2260			0
Series G Preferred Stock \| IMGX
Capital Stock
Temporary Equity, Shares Issued											12,373.226
Series G Redeemable Preferred Stock
Capital Stock
Temporary Equity, Shares Issued									12,373.226			0
Temporary Equity, Shares Outstanding									12,373.226			0
Series E Preferred Stock
Capital Stock
Preferred stock, shares designated (in shares)									150			150
Preferred stock, par or stated value per share (in dollars per share) \| $ / shares									$ 0.0001			$ 0.0001
Preferred stock, shares outstanding (in shares)									0			0
Preferred stock, shares issued (in shares)									0			0
Series E Preferred Stock \| March 2024 Registered Direct Offering
Capital Stock
Number of shares reduced due to reverse stock split	7.48
Number of common shares issuable upon conversion	525,625
Series E Preferred Stock \| Private placement
Capital Stock
Number of shares reduced due to reverse stock split			73.20
Number of common shares issuable upon conversion			102,302
Common Stock
Capital Stock
Conversion of stock, shares issued (in shares)									9	4
Common Stock \| IMGX
Capital Stock
Common stock issued to consultants (in shares)									18,475
Stock Issued During Period, Shares, Acquisitions (in shares)									36,830
Stock issued during period, value, acquisitions \| $									$ 2,300,000
Issuance of stock to financial advisors (in shares)									18,475
Issuance of stock to financial advisors \| $									$ 100,000
Common Stock \| March 2024 Registered Direct Offering
Capital Stock
Stock issued during period, shares, new issues (in shares)									173,100
Proceeds from Issuance of Common Stock \| $									$ 3,600,000
Common Stock \| March 2023 offering
Capital Stock
Stock issued during period, shares, new issues (in shares)										6,400
Warrants to purchase of stock												102,302
Proceeds from Issuance of Common Stock \| $										$ 3,800,000
Maximum \| Series G Preferred Stock
Capital Stock
Preferred Stock, Beneficial Ownership Held, Percentage											19.90%
Minimum \| Series G Preferred Stock
Capital Stock
Threshold Limits of Ownership Percentage											4.9

Warrants (Details) - $ / shares	3 Months Ended		12 Months Ended
Warrants (Details) - $ / shares	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Number of Warrants
Outstanding and exercisable, beginning (in shares)	1,779,780	108,797	108,797
Issued (in shares)	878,150	147,053
Assumed from IMGX (in shares)	127,680
Exercised (in shares)	(83,525)	(21,473)
Warrants outstanding and exercisable, ending (in shares)	2,702,085	234,377	1,779,780	108,797
Weighted Average Exercise Price Per Share
Outstanding and exercisable, beginning (in dollars per share)	$ 19.29	$ 383.20	$ 383.20
Issued (in dollars per share)	4.48	51.00
Assumed from IMGX (in dollars per share)	3.48
Warrants outstanding and exercisable, ending (in dollars per share)	$ 14.32	$ 210.00	$ 19.29	$ 383.20
Weighted Average Remaining Term in Years
Outstanding and exercisable (in years)	5 years	5 years 25 days	4 years 11 months 26 days	5 years 6 months
Issued (in years)	4 years 11 months 4 days	4 years 11 months 15 days
Assumed from IMGX (in years)	8 years 11 months 19 days
Exercised (in years)	4 years 11 months 4 days	5 years 3 months 10 days
March 2023 offering \| Common Stock
Weighted Average Remaining Term in Years
Warrants to purchase of stock			102,302
March 2024 Offering \| Common Stock
Weighted Average Remaining Term in Years
Warrants to purchase of stock	525,625
Warrants, pre-funded warrants, and placement agent warrants \| March 2023 offering \| Common Stock
Weighted Average Remaining Term in Years
Warrants to purchase of stock			44,751
Warrants, pre-funded warrants, and placement agent warrants \| March 2024 Offering \| Common Stock
Weighted Average Remaining Term in Years
Warrants to purchase of stock	352,525

Equity Incentive Plan (Details) - USD ($)		3 Months Ended
Equity Incentive Plan (Details) - USD ($)	Sep. 11, 2020	Mar. 31, 2024	Mar. 31, 2023	Mar. 13, 2024	Jan. 01, 2024	Dec. 31, 2023
Equity Incentive Plan
Unrecognized stock-based compensation expense		$ 600,000	$ 1,100,000
Remaining term
Equity Incentive Plan
Unrecognized stock-based compensation expense		$ 500,000	$ 900,000
Average remaining vesting term of the stock options (in years)		9 months 3 days	11 months 8 days
Clinical, corporate milestones
Equity Incentive Plan
Unrecognized stock-based compensation expense		$ 100,000	$ 200,000
Employee Stock Option
Equity Incentive Plan
Granted (in shares)		357
Stock option
Equity Incentive Plan
Weighted average fair value of warrants granted (in dollars per share)		$ 6.32	$ 61.00
2020 Equity Incentive Plan
Equity Incentive Plan
Shares available under equity incentive plan (in shares)	238	334,078			334,078
Percentage of common stock reserved for issuance equity incentive plan	10.00%
Options to purchase shares of common stock (in shares)		178,874
Shares reserved subject to issuance (in shares)		155,204
Options cancelled			250
Vesting period			36 months
2020 Equity Incentive Plan \| Restricted Stock Units
Equity Incentive Plan
Number of awards outstanding		120,532	5,994			52,271
Awarded (in shares)		120,532	7,997
Vesting period		1 year
Equity Incentive Plan 2014 \| Restricted Stock
Equity Incentive Plan
Number of awards outstanding		5
Aggregate unrecognized restricted Common Stock expense		$ 269,500	$ 269,500
Omnibus Equity Incentive Plan
Equity Incentive Plan
Shares available under equity incentive plan (in shares)		73
Options to purchase shares of common stock (in shares)		28
Omnibus Equity Incentive Plan \| Restricted Stock
Equity Incentive Plan
Shares reserved subject to issuance (in shares)		9
IMGX 2021 plan
Equity Incentive Plan
Shares available under equity incentive plan (in shares)		350,000
Options to purchase shares of common stock (in shares)		200,652
Number of share options assumed in business combination issued		200,652
IMGX Plan \| ImmunogenX
Equity Incentive Plan
Options to purchase shares of common stock (in shares)				200,652

Equity Incentive Plan - Stock option activity (Details) - Stock option - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Numbers of Shares
Granted (in shares)	357
Amended and Restated Omnibus Equity Incentive Plan 2014, Omnibus Equity Incentive Plan 2020 and IMGX 2021 Plan
Numbers of Shares
Outstanding at beginning (in shares)	426	176	176
Assumed from IMGX (in shares)	200,652
Granted (in shares)		250
Outstanding at ending (in shares)	201,078	429	426	176
Exercisable (in shares)	201,054	200
Average Exercise Price
Outstanding at beginning (in dollars per share)	$ 6,103.81	$ 15,956.72	$ 15,956.72
Assumed from IMGX (in dollars per share)	0.81
Granted (in dollars per share)		74.60
Outstanding at ending (in dollars per share)	13.74	8,900.40	$ 6,103.81	$ 15,956.72
Exercisable (in dollars per share)	$ 11.99	$ 17,091.40
Remaining Contract Life (Years)
Stock option outstanding, remaining contractual life (Years)	7 years 6 months 21 days	9 years 25 days	8 years 6 months 10 days	8 years 2 months 19 days
Assumed from IMGX (in years)	7 years 6 months 21 days
Granted (in years)		9 years 10 months 28 days
Exercisable (in years)	7 years 6 months 21 days	8 years 4 months 24 days
Assumed from IMGX, intrinsic value	$ 716,328
Exercisable, intrinsic value	716,341
Stock options outstanding, intrinsic value	$ 716,350

Equity Incentive Plan - Weighted-average assumptions (Details) - Stock option	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Equity Incentive Plan
Contractual term (in years)	7 years 7 months 6 days	6 years 6 months
Volatility	110.35%	98.80%
Risk-free interest rate	4.20%	4.08%
Expected Dividend yield	0.00%	0.00%

Equity Incentive Plan - RSU activity under the 2020 Plan (Details) - 2020 Equity Incentive Plan - Restricted Stock Units - $ / shares	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Number of Shares
Outstanding at beginning (in shares)	52,271
Awarded (in shares)	120,532	7,997
Vested (in shares)	(52,271)	(2,003)
Outstanding at ending (in shares)	120,532	5,994	52,271
Weighted-Average Grant Date Fair Value
Outstanding at beginning (in dollars per share)	$ 4.31
Awarded (in dollars per share)	3.80	$ 124.00
Vested (in dollars per share)	4.31	124.00
Outstanding at ending (in dollars per share)	$ 3.82	$ 124.00	$ 4.31
Weighted-Average Remaining Recognition Period (Years)	9 years 9 months 3 days	9 months	9 years 11 months 15 days

Equity Incentive Plan - Total stock-based compensation expense (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Equity Incentive Plan
Total stock-based compensation expense	$ 271,360	$ 358,316
Research and development
Equity Incentive Plan
Total stock-based compensation expense	42,378	38,080
General and administrative
Equity Incentive Plan
Total stock-based compensation expense	$ 228,982	$ 320,236

Agreements (Details) - USD ($)		1 Months Ended	3 Months Ended		12 Months Ended
Agreements (Details) - USD ($)	Sep. 13, 2023	Oct. 31, 2023	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Agreements
Research and development expenses			$ 565,962	$ 1,361,683
License agreement
Agreements
Upfront payment made to the third party		$ 500,000
License agreement \| Sanofi
Agreements
Research and development expenses					$ 500,000
Termination of contract, cure period			60 days
Termination of contract, cure period for payment breach			10 days
Number of days prior written notice to be issued			60 days
License agreement \| Sanofi \| Development and regulatory milestone
Agreements
Amount eligible to receive by third party	$ 46,000,000
License agreement \| Sanofi \| Commercial milestone
Agreements
Amount eligible to receive by third party	$ 235,000,000

Leases (Details)	3 Months Ended
Leases (Details)	Mar. 31, 2024 USD ($) ft² property	Mar. 31, 2023 USD ($)
Leases
Number of real property operating leases \| property	2
Operating lease, expense \| $	$ 35,000	$ 37,000
Boca Raton, Florida
Leases
Area of real estate property (Square Foot) \| ft²	3,472

Leases - Weighted-average remaining lease term and discount rate (Details)	Mar. 31, 2024
Leases
Weighted-average remaining lease term	2 years 4 months 24 days
Weighted-average discount rate	7.00%

Leases - Maturities of operating lease liabilities (Details)	Mar. 31, 2024 USD ($)
Leases
2024 (remainder of year)	$ 67,308
2025	88,788
2026	60,593
Total lease payments	216,689
Less imputed interest	(17,881)
Present value of lease liabilities	$ 198,808

Debt (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023	Nov. 30, 2023
Debt
Debt instrument, face amount	$ 7,246,629
Debt discount	(461,971)
Total debt as of March 31, 2024	6,784,658
Current portion	386,769
Long-term portion, net	6,397,889
Revolving line of credit
Debt
Debt instrument, face amount	5,359,860
Total debt as of March 31, 2024	5,359,860
Long-term portion, net	5,359,860
Related party promissory notes
Debt
Debt instrument, face amount	1,000,000
Total debt as of March 31, 2024	1,000,000
Long-term portion, net	1,000,000
EIDL loan
Debt
Debt instrument, face amount	500,000
Debt discount	(461,971)
Total debt as of March 31, 2024	38,029
Long-term portion, net	38,029
Directors and Officer's Liability Insurance
Debt
Debt instrument, face amount	386,769		$ 683,000
Total debt as of March 31, 2024	386,769	$ 613,000	$ 387,000
Current portion	$ 386,769

Debt - Aggregate future minimum principal maturities (Details) - Notes payable	Mar. 31, 2024 USD ($)
Aggregate future minimum principal maturities
2024	$ 386,769
2025	6,359,860
Thereafter	500,000
Total	$ 7,246,629

Debt - Additional information (Details)				1 Months Ended		3 Months Ended
Debt - Additional information (Details)	Nov. 30, 2024	Mar. 13, 2024	Nov. 30, 2023 USD ($)	Mar. 31, 2024 USD ($) item	Oct. 31, 2022 USD ($)	Mar. 31, 2024 USD ($)	Dec. 31, 2023 USD ($)	Sep. 30, 2023 USD ($)
Debt
Amount of debt				$ 7,246,629		$ 7,246,629
Amount outstanding				6,784,658		6,784,658
Revolving line of credit
Debt
Maximum amount of borrowings					$ 6,000,000			$ 7,500,000
Amount of debt				5,359,860		5,359,860
Amount outstanding				5,359,860		5,359,860
Revolving line of credit \| Revolver
Debt
Amount of draw downs						0
Amount outstanding				5,400,000		5,400,000
Amount of interest payable				$ 1,300,000		1,300,000
Revolving line of credit \| Prime rate
Debt
Spread on interest rate (in percent)		6.00%			4.50%
Related party promissory notes
Debt
Number of notes assumed \| item				2
Amount of debt				$ 1,000,000		1,000,000
Amount outstanding				1,000,000		1,000,000
Related party promissory notes \| Prime rate
Debt
Amount of debt				500,000		$ 500,000
Spread on interest rate (in percent)						4.50%
EIDL loan
Debt
Amount of debt				$ 500,000		$ 500,000
Interest rate (in percent)				3.75%		3.75%
Amount outstanding				$ 38,029		$ 38,029
Directors and Officer's Liability Insurance
Debt
Term of debt	9 months
Amount of debt			$ 683,000	386,769		386,769
Interest rate (in percent)			7.90%
Monthly payments, including principal and interest			$ 79,000
Amount outstanding			$ 387,000	$ 386,769		$ 386,769	$ 613,000

Net Income (Loss) per Common Share - Tabular disclosure of earnings per share (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Net Loss per Common Share
Net income applicable to common shareholders - basic	$ 5,501,462	$ (4,158,084)
Preferred stock dividends	(66,144)	$ (87,431)
Net income applicable to common shareholders - diluted	$ 5,567,606
Weighted average shares outstanding
Basic weighted average shares outstanding	1,761,953	114,033
Diluted weighted average shares outstanding	14,511,461	114,033
Basic net income per share (in dollars per share)	$ 3.12	$ (36.46)
Diluted net income per share (in dollars per share)	$ 0.38	$ (36.46)
Series G convertible preferred stock
Weighted average shares outstanding
Weighted average shares outstanding, adjustment	12,373,226
Series B convertible preferred stock
Weighted average shares outstanding
Weighted average shares outstanding, adjustment	139
Stock option
Weighted average shares outstanding
Weighted average shares outstanding, adjustment	169,536
Common stock warrants
Weighted average shares outstanding
Weighted average shares outstanding, adjustment	118,084
RSUs not yet issued
Weighted average shares outstanding
Weighted average shares outstanding, adjustment	88,523

Net Income (Loss) per Common Share - Common Stock that may potentially be issued (Details) - $ / shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Net Loss per Common Share
Total shares of common stock issuable	15,397,069	242,980
Series G Preferred Stock
Net Loss per Common Share
Total shares of common stock issuable	12,373,226
Common stock warrants
Net Loss per Common Share
Total shares of common stock issuable	2,702,085	234,377
Stock options
Net Loss per Common Share
Total shares of common stock issuable	201,078	429
RSUs not yet issued
Net Loss per Common Share
Total shares of common stock issuable	120,537	8,011
Series B convertible preferred stock
Net Loss per Common Share
Total shares of common stock issuable	139	155
Preferred stock, convertible, conversion price (in dollars per share)	$ 32,340
RSUs not yet issued
Net Loss per Common Share
Total shares of common stock issuable	4	8

Net Income (Loss) per Common Share - Additional information (Details) - shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Net Loss per Common Share
Incremental Common Shares Attributable to Dilutive Effect of Pre-funded Warrants Shares	269,000	44,750
Shares of common stock issuable	15,397,069	242,980
Stock option
Net Loss per Common Share
Shares of common stock issuable	31,542
Warrant
Net Loss per Common Share
Shares of common stock issuable	2,584,001

Employee Benefit Plans (Details) - USD ($)	3 Months Ended	12 Months Ended
Employee Benefit Plans (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Employee Benefit Plans
Defined contribution plan, employers matching contribution, annual vesting percentage	6.00%
Defined benefit plan, plan assets, contributions by employer	$ 37,000	$ 26,000
Minimum
Employee Benefit Plans
Defined contribution plan, maximum annual contributions per employee, percent	1.00%
Maximum
Employee Benefit Plans
Defined contribution plan, maximum annual contributions per employee, percent	100.00%

Income Taxes (Details) - USD ($)	3 Months Ended
Income Taxes (Details) - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Income Taxes
Deferred tax assets	$ 0	$ 0
Effective income tax	160.00%	0.00%
Income tax benefit	$ (14,859,887)

Subsequent Events - Registered Direct Offering and Share Issuances (Details) - USD ($) $ / shares in Units, $ in Millions			1 Months Ended	3 Months Ended
	May 14, 2024	Apr. 01, 2024	Apr. 30, 2024	Mar. 31, 2024	Mar. 06, 2024
Restricted Stock Units
Subsequent Events
Conversion of stock, shares issued (in shares)				52,271
Consultants
Subsequent Events
Stock issued during period, shares, settlement (in shares)				100,000
March 2024 Registered Direct Offering
Subsequent Events
Warrants and rights outstanding, term (year)					5 years
Subsequent events \| May 2024 Registered Direct Offering
Subsequent Events
Proceeds from issuance of shares		$ 1.1
Subsequent events \| May 2024 Registered Direct Offering \| May 2024 Warrants
Subsequent Events
Stock issued during period, shares, new issues (in shares)	366,000
Shares issued, price per share (in dollars per share)	$ 2.95
Number of shares issuable upon exercise of options or warrants	732,000
Warrant exercise price	$ 2.70
Warrants and rights outstanding, term (year)	6 years
Proceeds from issuance of shares	$ 1.1
Subsequent events \| March 2024 Offering \| Restricted Stock Units
Subsequent Events
Conversion of stock, shares issued (in shares)			30,882
Subsequent events \| March 2024 Offering \| Consultants
Subsequent Events
Stock issued during period, shares, settlement (in shares)			150,000
Subsequent events \| March 2024 Offering \| Pre-funded warrants
Subsequent Events
Number of shares issuable upon exercise of options or warrants			269,000

Pay vs Performance Disclosure - USD ($)	3 Months Ended
Pay vs Performance Disclosure - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ 5,567,606	$ (4,070,653)

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Mar. 31, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

First Wave BioPharma (NASDAQ:FWBI)
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First Wave BioPharma (NASDAQ:FWBI)
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